Beattie, in the matter of National Projects and Maintenance Pty Limited... [2023] FCA 1470 | Case summary

Pursuant to s 439A(6) of the Corporations Act 2001 (Cth) the period within which the plaintiffs must convene the second meeting of creditors in respect of National Projects and Maintenance Pty Ltd (ACN 165 833 901) (Administrators Appointed) and each of the other companies named in the schedule (collectively, the Companies) under s 439A of the Corporations Act (Second Meetings) be extended to 15 February 2024.
Pursuant to s 447A(1) of the Act, Part 5.3A of that Act is to operate in relation to each of the Companies such that, notwithstanding s 439A(2) of that Act, the Second Meetings must be held at any time before, or within five business days after, the end of the convening period as extended by paragraph 1 of these orders and the Second Meetings may be held together or separately at any time during that period.

GOODMAN J 1 Since 23 October 2023, the ten companies within the NPM group of companies (which are described in Schedule A to these reasons) have been under administration. 2 On 2 November 2023, the first meeting of creditors for each of the NPM Companies was held. The second meetings of creditors were due to occur by 20 November 2023. 3 On 14 November 2023 the administrators, by originating process filed the previous day, sought orders pursuant to ss 439A and 447A of the Corporations Act 2001 (Cth) extending the convening periods for the second meetings of creditors for five of the ten companies - National Projects and Maintenance, National Projects QLD, National Projects (ACT), NPM (VIC) and National Projects (WA) (together, the subject Companies) - by six months. The administrators also sought ancillary orders. 4 On 15 November 2023, following a further hearing, I made orders extending the convening periods by approximately three months and otherwise made the orders sought by the administrators. My reasons for doing so are set out below. 5 The evidence on the application comprised affidavits of Mr Kevin Lucan (one of the administrators) sworn 10 November 2023, Mr Graeme Beattie (another of the administrators) sworn 15 November 2023, and Mr Michael Lalji (the solicitor for the administrators) sworn 14 November 2023. The salient aspects of that evidence are described at [8] to [14] below. 6 The principles relevant to the extension of a convening period pursuant to ss 439A and 447A are well-established. I refer to my summary of those principles set out in Resnick, in the matter of Toplace Pty Ltd (administrators appointed) [2023] FCA 1086 at [34] to [39]. The Court has a broad discretion to extend the convening period. Factors informing the exercise of that discretion include the objects of Part 5.3A of the Act as set out in s 435A; the reasons put forward for the extension including the complexity or otherwise of the administration; whether, taking into account those reasons, the additional time is needed and will likely enhance the likelihood of a return to creditors; the effect on persons who cannot enforce remedies that would be available to them but for the administration; and the views of persons who object to an extension of time. 7 I was satisfied that an extension of time was appropriate for the following reasons. 8 First, Mr Lucan's evidence includes evidence of the investigations that the administrators had undertaken and of the difficulties they had encountered in doing so, including difficulties in obtaining access to the electronic books and records of the subject Companies. 9 Secondly, the investigations which have been undertaken have revealed issues of some complexity. Those issues include: (1) an assessment of the validity of multiple and competing purchase money security interest claims; (2) extensive intercompany loans and dealings between the subject Companies; (3) the recoverability of outstanding security from clients in the form of bank guarantees and retentions; and (4) the subject Companies' compliance with industrial laws and instruments relating to conditions of employment so as to accurately confirm outstanding employee entitlements. 10 Thirdly, each of the subject Companies has significant trade debts owed to it for maintenance work, construction work or construction-related design work. These debts seem likely to be subject to security of payment legislative regimes in different Australian jurisdictions, the presence of which is likely to be advantageous to the subject Companies in recovering those debts. However, by dint of statutory provisions and case law in various jurisdictions the subject Companies would or may not be able to use the security for payments regimes if they were to be placed into liquidation. 11 Fourthly, Mr Lucan's evidence was that a deed of company arrangement appears to be a real possibility. 12 Fifthly, the administrators have considered that any delay in the subject Companies being placed into liquidation would have a corresponding delay on the ability of employees of the subject Companies to access entitlements pursuant to the Fair Entitlement Guarantee scheme under the Fair Entitlements Guarantee Act 2012 (Cth). Nevertheless, the administrators consider that an extension of time is in the overall interests of the subject Companies. 13 Finally, the administrators gave notice to the creditors of the subject Companies of their intention to make the present application. A small number of objections were provided to the administrators by email, however none of those objections was of sufficient substance to warrant the refusal of the application. None of the objecting creditors sought to be heard at the hearing of the application. Further, the orders made provide for any creditors to apply to discharge the orders made. 14 Whilst an extension of time was appropriate, I was not persuaded that an extension of six months was required and formed the view that an extension of three months was more appropriate. On 14 November 2023, I granted the administrators' request to adjourn the hearing until the following day to allow the administrators the opportunity to adduce further evidence. That further evidence, in the form of Mr Beattie's affidavit, confirmed my initial view. Accordingly, I granted an extension of time until 15 February 2024. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.

Beattie, in the matter of National Projects and Maintenance Pty Limited (administrators appointed) [2023] FCA 1470

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