Cameron Shaw and Richard Albarran in their Capacity as Joint and Several Administrators of Home Art Building Group Pty Ltd (Administrators Appointed) v Home Art Building Group Pty Ltd

Federal Court of Australia|2023-05-05|Before: McEvoy J

ORDERS VID 272 of 2023 IN THE MATTER OF BWX LTD ACN 163 488 631 (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) & ORS KATE WARWICK, KELLY TRENFIELD AND JOSEPH HANSELL AS JOINT AND SEVERAL ADMINISTRATORS OF EACH OF THE SECOND TO FOURTEENTH PLAINTIFFS First Plaintiff

BWX LIMITED ACN 163 488 631 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Second Plaintiff

order made by: MCEVOY J DATE OF ORDER: 5 May 2023

Pursuant to s 439A(6) and s 447A(1) of the Corporations Act 2001 (Cth) (the Act), the period within which the first plaintiffs (administrators) must convene the second meeting of creditors of each of the second to fourteenth plaintiffs (companies) under s 439A of the Act (second meetings) be extended to 11:59 pm on Monday, 13 November 2023.
Pursuant to s 447A(1) of the Act, Pt 5.3A of the Act is to operate in relation to each of the companies so that, notwithstanding s 439A(2) of the Act, the second meetings may be held together or separately at any time during the period up to, or within 5 business days after the end of, the convening period as extended in paragraph 1 above, provided that the administrators give notice of the meeting in accordance with r 75-225(1) and r 75-15 of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR).
Within two business days of these orders being made, the administrators are to give notice of these orders to creditors of each of the companies (including persons claiming to be creditors) by means of a circular: (a) to be published on the website maintained by the administrators in respect of the administration of the companies; and (b) to be sent by email or by post to all known creditors.
Pursuant to s 447A(1) of the Act and s 90-15 of the Insolvency Practice Schedule (Corporations) (IPSC) (being Schedule 2 to the Act), Pt 5.3A of the Act is to operate in relation to the companies such that if, pursuant to any provision in any of Part 5.3A of the Act, the IPSC, or the IPR, the administrators are required to provide any other notification to creditors during the administration of the companies, such notice will be validly given to creditors of the companies by: (a) giving such notice electronically by email sent to the email address of any creditor (including persons claiming to be creditors) of the companies for whom or which the administrators hold an email address; (b) sending such notice to the postal address or facsimile number, or otherwise as provided for by the Act or the IPR, to any creditors not being a creditor referred to in sub-paragraph 4(a) above; and (c) to the extent that the matter relates to a meeting that is the subject of rule 75-40(4) of the IPR, causing such notice to be published in the Insolvency Notices website located at: https://publishednotices.asic.gov.au/
Until further order, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and on the ground that it is necessary to prevent prejudice to the proper administration of justice for the purpose of s 37AG of the FCA Act, the unredacted affidavit of David Alexander Hardy affirmed on 4 May 2023 is not to be disclosed or made available for inspection by any person, other than any Judge of the Court, any member of any Judge's staff or any officer of the Court, the Plaintiffs, their staff and their legal representatives and any other person who signs an undertaking in a form acceptable to the administrators.
Liberty be granted to any person who can demonstrate sufficient interest to discharge or modify these orders on the giving of three business days' written notice to the Plaintiffs and the Court.
The administrators' costs of and incidental to this application be costs in the administration of the companies. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MCEVOY J: 1 Before the Court is an amended originating process filed 28 April 2023 by which the first plaintiffs (the Administrators) seek orders pursuant to ss 439A(6) and 447A(1) of the Corporations Act 2001 (Cth) and s 90-15 of the Insolvency Practice Schedule (Corporations) (IPSC) (being Schedule 2 to the Act) extending the period within which they must convene the second meetings of creditors in respect of the second to fourteenth plaintiffs (the Companies) by approximately six months to 13 November 2023, together with ancillary orders. 2 The second plaintiff, BWX Limited, is an ASX-listed company which itself and through the Companies (each of which are its ultimate subsidiaries) develops, manufactures and distributes natural skin care, hair care and cosmetics products in Australia and internationally. The BWX group owns various well-known cosmetics brands. 3 Pursuant to s 439A(5) of the Act, the convening period in respect of the Companies is the period of 20 business days beginning on the day after the administration began (or 25 business days after the day after the administration began if the administration began in December or less than 25 business days before Good Friday). The administration began on 3 April 2023 when the Administrators were appointed as joint and several administrators of the Companies. The convening period therefore ends on 11 May 2023. Pursuant to s 439A(2) of the Act, the second meetings of each of the Companies must be held within five business days before, or within five business days after, that date. Without an extension to the convening period the notice of meeting, together with the Administrators' second report to creditors, must be issued by 11 May 2023. 4 It is also to be noted that on 4 April 2023 receivers and managers were appointed to the second, third, and sixth to fourteenth plaintiffs. 5 The Administrators seek orders: (a) that the period within which the Administrators must convene the second meetings be extended to 11:59 pm on Monday, 13 November 2023; (b) that Pt 5.3A of the Act is to operate in relation to each of the Companies so that the second meetings may be held at any time during the period up to, or within 5 business days after the end of, the convening period as extended; (c) that the Administrators give notice of these orders to creditors; (d) providing for methods by which the Administrators are to provide any other notification to creditors during the administration of the Companies; (e) that interested parties have liberty to apply; and (f) for the costs of the Administrators to be costs in the administration of the Companies. 6 The Administrators also seek an order pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act), that paragraphs [25] - [32], [36] (part), [39] - [42], [44] - [45], [47], [51] (part), [52] - [56], [62] (part) and [81] (part) of the affidavit of David Alexander Hardy affirmed on 4 May 2023 in support of the application (Receiver Affidavit) not be disclosed or made available for inspection by any person until any sales process with respect to the businesses or assets of the Companies has completed. This order is sought on the basis that the matters contained in those paragraphs are confidential and commercially sensitive and that the disclosure of those matters may undermine the sale process being conducted by the Receivers of the assets of all but two of the Companies. It is said, therefore, that an order sought is necessary to prevent prejudice to the proper administration of justice. 7 The primary purpose of the application is said to be to permit sufficient time for the stabilisation of the Companies' various business streams to maximise the return to creditors (including the substantial secured creditor, the Commonwealth Bank of Australia (CBA)) from the orderly sale of those businesses as a going concern. 8 In support of the application the Administrators rely on the Receiver Affidavit, together with the affidavit of Joseph Ronald Hansell sworn on 4 May 2023 (Administrator Affidavit). 9 The matter was listed before me as Commercial and Corporations Duty Judge on 5 May 2023. It was urgent by reason of the imminence of the end of the convening period. Having had the benefit of detailed written and oral submissions from Ms Slocum of counsel on behalf of the Administrators, I was satisfied that the convening period should be extended and that the ancillary orders (including the order pursuant to s 37AF of the FCA Act) should also be made. Accordingly I made orders in the terms sought by the Administrators. My reasons for making these orders are as follows.

The Statutory Regime and Relevant Principles 10 It is clear that the Court has power to make orders extending the convening period of the Companies under ss 439A(6) and 447A(1) of the Act. 11 In considering an application to extend the convening period, the Court must have regard to the objects of Pt 5.3A, set out in s 435A of the Act. That is, providing for the business, property and affairs of an insolvent company to be administered in a way that: (a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or (b) if it is not possible for the company or its business to continue in existence, results in a better return for the company's creditors and members than would result from an immediate winding up of the company. 12 It is necessary for the Court to attempt to achieve an appropriate balance between the expectation that an administration will be undertaken in a relatively speedy and summary manner with the need to ensure that the administration is not concluded without consideration of sensible and constructive options directed towards maximising the returns for creditors and any return for shareholders: Mighty River International Limited v Hughes [2018] HCA 38; (2018) 265 CLR 480 at [72]-[73] (Nettle and Gordon JJ, in dissent but not relevantly in this respect); Diamond Press Australia Limited [2001] NSWSC 313 at [10] (Barrett J); In the matter of Riviera Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2009] NSWSC 585; (2009) 72 ACSR 352 at [15] (Austin J). 13 In Cameron Shaw and Richard Albarran in their Capacity as Joint and Several Administrators of Home Art Building Group Pty Ltd (Administrators Appointed) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274, Beech J summarised the principles that have been established in considering an application to extend a convening period at [18]: (1) The short time frames are an element of the scheme of the Act, the purpose being that creditors should be fully informed about the company's position and have the opportunity to vote as soon as possible. (2) However, the prospects of a better return to creditors may outweigh the expectation and desirability of prompt resolution. The exercise of power under s 439A(6) involves a balancing of these considerations. (3) In considering an application for an extension, the court must take into account the detriment to third parties including the suspension of rights and remedies of secured creditors, lessors and others. (4) An important question on such an application is whether an extension is necessary to enable the administrator to prepare reports and to come to the opinion required by s 439A(4) to inform creditors as to the appropriate choice between the options of a deed of company arrangement, for the administration to end, or for the company to be wound up. (5) Any extension should be for no longer than is necessary for an informed decision to be made as to whether to enter into a deed of company arrangement, wind up the company or end the administration. 14 In Riviera at [13] Austin J summarised factual matters Courts have taken into account when deciding on applications for an extension to the convening period. These include: (a) the size and scope of the business; (b) substantial offshore activities; (c) complex corporate group structure and intercompany loans; (d) time needed to execute an orderly process of disposal of assets; (e) time needed for thorough assessment of a proposal for a deed of company arrangement; (f) where the extension will allow the sale of the business as a going concern; and (g) more generally, whether additional time is likely to enhance the return for unsecured creditors. 15 Courts will exercise their discretion to extend the convening period where there is a substantial issue as to one or more of these categories: Riviera at [14]; Parbery, in the matter of NewSat Limited (Administrators Appointed) (Receivers and Managers Appointed) [2015] FCA 435 at [64]; Mighty River at [73]. 16 In Mighty River, Nettle and Gordon JJ (citing Riviera) recognised at [73] that: Generally speaking, courts have been disposed to grant substantial extensions in cases where the administration has been complicated by, for example, the size and scope of the business, substantial offshore activities, large numbers of employees with complex entitlements, complex corporate structures and intercompany loans, and complex recovery proceedings, and, more generally, where the additional time is likely to enhance the return to unsecured creditors. Provided the evidentiary case for extension has been properly prepared, there has been no evidence of material prejudice to those affected by the moratorium imposed by the administration, and the administrator's estimate of time has had a reasonable basis, the courts have tended to grant extensions for the periods sought by administrators. (Footnotes omitted) 17 It has also been accepted that the administrators' view on an application to extend the convening period is significant and, particularly where the administration is complex, should carry weight: In the matter of Renex Holdings (Dandenong) 1 Pty Ltd (Administrators Appointed) [2015] NSWSC 2002 at [9] (Black J); Owen, in the matter of RiverCity Motorway Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) v Madden (No 4) [2012] FCA 1491; (2012) 92 ACSR 255 at [26] (Logan J). 18 Also relevant is whether the creditors consent: Richard Scott Tucker as joint and several administrator of Alita Resources Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2019] WASC 355 at [18]. The interests of those whose claims are affected by the statutory moratorium will be relevant, although not decisive: Alita at [18]; Re ABC Learning Centres Ltd (No 8) [2009] FCA 994; (2009) 73 ACSR 478 (Emmett J); Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 at [9] (Jacobson J). It has been recognised that the interests of creditors can be prejudiced not only by delay but also by the convening of premature meetings where the administrator has been unable to obtain adequate information for the preparation of the administrator's report in a form enabling creditors to make an informed decision: In the matter of Harrisons Pharmacy Pty Limited (Administrators Appointed) (Receivers and Managers Appointed) [2013] FCA 458 at [13] (Farrell J). 19 It has also been accepted that if the company is under the control of a privately appointed receiver and the receiver wishes to have the benefit of the moratorium period to assist in allowing a sale of a business as a going concern to occur (and thereby maximise a return to creditors), this will be relevant in assessing whether an extension of the convening period is warranted, even in circumstances where it is not certain that there will be a surplus of assets for unsecured creditors: Gothard, Re Sherwin Iron Ltd (No 2) [2015] FCA 401 at [37] (Gleeson J). 20 As to the length of the extension of time ordered, the court should not allow longer than is required for the diligent exercise of the powers of the administrator: Harrisons at [47]. Generally courts will grant extensions for the periods sought by administrators, provided that the evidentiary case for extension has been properly prepared, there has been no evidence of material prejudice to those affected by the moratorium imposed by the administration, and the administrator's estimate of time has a reasonable basis: Riviera at [14]; Mighty River at [73].

Company structure and appointment of the Administrators and Receivers 21 As has been mentioned, the Administrators were appointed on 3 April 2023 as the voluntary administrators of each of the Companies. The steps taken by the Administrators since their appointment have been summarised in paragraph [44] of the Administrator Affidavit. 22 On 4 April 2023 (being the day following the Administrators' appointment) Gayle Dickerson, James Stewart, James Dampney and David Hardy (Receivers) were appointed as the receivers of the second plaintiff, the third plaintiff and the sixth to fourteenth plaintiffs. That is, all but two of the Companies (together, Receivership Companies). 23 The two Companies that are not Receivership Companies, the fourth plaintiff (LHS No. 2 Pty Ltd) and the fifth plaintiff (Sapu Corporation Pty Ltd (formerly Uspa Corporation Pty Ltd)), are non-trading entities. 24 It was submitted, and I accept, that each of the Administrators and the Receivers have substantial qualifications and experience in conducting formal insolvency appointments and restructures. 25 According to the Receiver Affidavit the BWX group is divided into four key business parts: (a) APAC (the Australian Business), which comprises BWX Brands Pty Ltd, Sukin Australia Pty Ltd and various international subsidiaries and is responsible for the development and manufacturing of cosmetics for BWX's Australian and international businesses and the distribution of the Sukin and Derma Sukin brands; (b) North America, primarily the USA (the US Business), conducted by five North American companies which have as their parent BWX Brands, which conducts the distribution in North America of cosmetics manufactured in Australia and elsewhere; (c) Digital (the Digital Business), conducted by BWX Digital Pty Ltd and its subsidiary The Good Collective Pty Ltd, which operates two stand-alone e-commerce platforms carrying products from a range of suppliers (not just BWX); and (d) the majority interest in the Go-To business (Go-To), conducted by a group of companies under Go-To Enterprise Holdings Pty Ltd (Go-To Pty Ltd), which is 50.1% owned by BWX. 26 The evidence is that the operations of the Australian, US and Digital Business and Go-To are not significantly integrated and each has separate management. 27 The Receivers were appointed over each of the Receivership Companies pursuant to charges over all present and after acquired property granted by each of the Receivership Companies in favour of the CBA (Securities). The Securities secure the Receivership Companies' debt to the CBA (as, either, borrower/obligor or guarantor). The current balance of the Secured Company's liability to the CBA is in evidence. Following demands from CBA, the Companies failed to pay the amounts demanded by CBA and Receivers were appointed to the Companies by CBA. The Receivers are currently in possession and control of each of the Receivership Companies and their assets. 28 It is submitted that the Receivers are trading on the Receivership Companies' businesses to stabilise those businesses, in particular the Australian Business, and to pursue sales of the businesses and assets of those entities. The sales process, and the reasons for the strategy adopted by the Receivers, are addressed below.

Financial Position of Companies 29 The assets and liabilities of the Companies, based on the Companies' books and records (with asset values not yet verified by independent valuations or analysis of debtors, or proofs of debt and the like) are in evidence. The CBA is the Companies' largest creditor, with a secured debt of about $106.4 million. Employee entitlements payments are apparently up to date, and the Receivers continue to meet wages and superannuation, as they accrue.

Realisation of Assets of BWX Group 30 The Receivers consider that the assets of each of the Receivership Companies' four business units should be the subject to separate sales campaigns, as this is likely to "realise optimal value". It is said that this is based, in part, on regular media comment since mid-2022 on the financial difficulties of BWX and the fact that there were unsuccessful attempts by BWX to sell or recapitalise the BWX group in a single line between November 2022 and February 2023.

Sale of the Australian Business 31 In financial year 2022 the Australian Business had sales of approximately $89.5 million. There are approximately 162 staff in Australia. The Receiver Affidavit addresses the challenges faced by the Australian Business and the steps taken, and planned, by the Receivers to alleviate those challenges and ready the Australian Business for sale. It also addresses the estimated time required to conduct the sale of the Australian Business appropriately.

Sale of the US Business 32 The Receivers' evidence is that in financial year 2022 the US Business had sales in the value of $76.8 million and as of November 2022 had 97 staff based in the US and employed by a US entity, with total base salaries of AUD$12.8 million. It is the Receivers' evidence that, whilst some products sold by the US Business have been manufactured in Australia, this does not require common ownership with the Australian Business because the main value of the US Business is said to be in its brands and goodwill. It is the Receivers' view that the US Business' products could be manufactured under contract by another supplier (in Australia or elsewhere). 33 The Receiver Affidavit states that the Receivers' investigations into the profitability of the US Business are ongoing and they are being assisted by KPMG's US office. The Receivers' have summarised their investigations of the US Business in the Receiver Affidavit. 34 The Receivers' proposal for the sale of the US Business and the steps required to be taken to effectuate that sale (together with the timeframe for that sale) are summarised in the Receiver Affidavit.

Sale of the Digital Business 35 The challenges faced by the Digital Business upon the Receivers appointment are also described in the Receiver Affidavit. 36 Upon their appointment the Receivers determined to commence the sale process for the Digital Business immediately. Before the Receivers' appointment, BWX had engaged advisory firm Canterbury Partners in July 2022 to run a comprehensive sales process for the Digital Business and prepare sales material. It is the Receivers' evidence that that campaign identified approximately 30 interested parties and Canterbury Partners had engaged in negotiations in respect of one offer, which was well-advanced at the time of the Receivers' appointment. The Receiver Affidavit states that additional interested parties who had not been bidders in the prior sales process have contacted the Receivers after their appointment in relation to the Digital Business. 37 Having regard to the recent sale campaign, the additional interested parties, and the challenges faced by the Digital Business, the Receivers determined to conduct an expedited sales process themselves, commencing in early April 2023. The Receivers' evidence is that it was their view that this was the "best prospect for a sale on a going concern basis that preserved the jobs of employees working for the Digital Business". The outcome of that rapid sale campaign and the timing of completion is summarised in the Receiver Affidavit.

Sale of interest in Go-To Business 38 BWX holds a 50.1% of the shares in the Go-To Pty Ltd, which conducts a cosmetic brand business, founded by Ms Zoe Foster-Blake, who continues to hold an interest in Go-To Pty Ltd. The relationship, rights and obligations between the minority shareholders of Go-To Pty Ltd, observations about any sale of BWX's interest in Go-To Pty Ltd, and the likely timeframe for that sale are described in the Receiver Affidavit. The Receiver Affidavit states that the Receivers have had constructive discussions with Ms Foster-Blake and her advisors concerning the sale of BWX's interest in Go-To Pty Ltd.

Basis for Extension of Convening Period 39 In reliance on the Receiver Affidavit it is submitted that the extension to the convening period is required to facilitate the orderly sale of the Receivership Companies' assets by the Receivers, to maximise the realisation of those assets, and thereby the potential for both a surplus of assets to be available for unsecured creditors after satisfaction of the CBA's secured debt, and for employees to retain their employment if they are transferred to a purchaser as part of a going concern sale of the businesses. The Administrators depose that the Receivers' sale process is the course of action most likely to maximise returns to creditors and achieve the objects of Pt 5.3A of the Act, as it increases the prospect of there being a surplus of unsecured assets for unsecured creditors and allows for the prospect of one or more of the asset sales being transacted via a Deed of Company Arrangement, if appropriate, while the Receivers continue to meet the Companies' ongoing trading costs, including the payment of leases, suppliers and wages. 40 The Administrators have also deposed that the timeframes identified by the Receivers for the sales process are reasonable, having regard to their substantial experience. 41 It is emphasised by the Administrators that the sale of the various assets is taking place within the context of a group of thirteen Australian corporations, with international subsidiaries, and a broad range of brands manufactured, marketed and distributed in various geographical locations. The Administrators highlight that there are approximately 162 employees in Australia, together with international staff and contractors, and that the Receivers have yet to identify precisely which employees are engaged by which of the Companies. 42 It is submitted that if there is no extension to the convening period, the Receivers' sale process will not have completed (and in relation to the US Business and the Australian Business may not have commenced) before the second meeting of creditors of each of the Companies. It is said that without an extension it will be difficult for the Administrators to make an informed and comprehensive recommendation to the creditors on the future of the Receivership Companies in accordance with s 439A of the Act and r 75-225 of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR), and, in turn, the creditors will be unable to make an informed decision. The evidence is that it is likely, in these circumstances, that the Companies would be placed into liquidation. 43 The Administrators consider that liquidation would be a worse outcome for creditors as the Receivers' sale process is the best prospect of there being a surplus of unsecured assets available for distribution to unsecured creditors. Further, the Administrators consider that if there is no sale of the various BWX businesses as a going concern, there is little prospect of employees maintaining their employment. 44 The relevant creditors have been given notice of the application. On 17 April 2023, at the first meeting of creditors, the Administrators foreshadowed this application and received no objection. On 1 May 2023, the Administrators notified all known creditors of their intention to make this application, advised the hearing date, and invited interested creditors to email a representative of the Administrators if they had questions in relation to the application and/or they wish to request a copy of the originating process. Aside from one request for the originating process and relevant affidavit material, as at the date of the Administrator Affidavit, no other creditor had requested further information and there was no opposition to the application from creditors.

Effect on interested parties 45 The Administrators submit that they have considered the effect of the extension of the convening period on secured, unsecured creditors and other stakeholders, namely employees and lessees. 46 The primary secured creditor is the CBA. CBA, who appointed the Receivers, supports this Application because it is brought in part to support the Receivers' sale process. 47 It may be accepted that the landlords of three premises leased by the Companies will be affected by the prolongation of the statutory moratorium if the convening period is extended. However, the Administrators do not consider that the landlords will be prejudiced by any extension. The evidence is that the Receivers have paid and will continue to pay rent during the extension period. A sale of the businesses as going concerns might involve an assignment of the leases, which would benefit the landlords. Should the Companies enter liquidation, they would vacate the leased premises. 48 The Receiver Affidavit has also set out the benefits potentially available to employees from the Receivers' sale process. In the interim, the evidence is that the Receivers continue to meet wages and superannuation, as they accrue. The Receivers' evidence is also that their appointment has not disrupted the Companies' payroll activities and there will be no unpaid employee entitlements from the period before the Receivers' appointment (subject to the operation of s 556 of the Act in relation to entitlements owed to directors). 49 I accept that beyond mere delay there is no evidence of material prejudice to unsecured creditors or other stakeholders. On the contrary, whatever prejudice there may be (if any) will be outweighed by the benefits which will flow from the completion of the sale process. Any prejudice resulting from the extension of the convening period is also likely to be significantly less than the prejudice to creditors if the Companies go into liquidation. It is also possible that trade supply and other creditors may benefit from a sale of one or more of the Companies' businesses to third parties who may continue to engage them.

Length of extension requested 50 The Administrators acknowledge that the extension requested is substantial. However, they say that it takes into account the estimated timetable for at least four sales campaigns that practitioners of considerable experience and standing consider reasonable in the circumstances, whilst acknowledging that due to the complexity of the various business units and sales campaigns it is almost inevitable that there may be slippage in the timetable beyond the control of the Receivers or the Administrators. In that event, the Administrators wish to avoid the cost of making a further application (to the detriment of creditors, if there is a surplus of unsecured assets) for a matter of mere weeks. 51 However, the Administrators also seek an order in the terms made in Re Daisytek Australia Pty Ltd [2003] FCA 575; (2003) 45 ACSR 446 (Lindgren J) pursuant to s 447A of the Act allowing the second meetings to be held at any time between the date of the order and the date ending five days after the end of the extended convening period. It is submitted that Daisytek orders are now regarded as sensible and almost routine: Re LED Builders Pty Ltd [2008] NSWSC 633 at [2]; Alita at [15]. The Administrators intend to hold the second meetings of the creditors of the Companies as soon as reasonably possible after the completion of the Receivers' sale processes. 52 While some of the Companies are not trading, and the realisation of some of the Companies' assets may occur earlier than the realisation of other assets, the Administrators consider it is in the best interests of the Companies that the convening period for each of the Companies be the same. The Administrators' reasons for this include that: (a) each of the Receivership Companies is jointly liable for the debt to the CBA until that debt is satisfied; (b) operational staff work across various Companies' businesses; (c) some staff may be retained following a sale of any going concern business; (d) the investigations regarding which Companies have employed staff and owe entitlements are continuing; (e) a liquidation of one or more of the BWX entities may have an adverse effect on the sales campaigns; and (f) importantly, to avoid the cost and inefficiency of multiple meetings of creditors and reports prepared pursuant to s 439A of the Act.

Conclusion 53 I am satisfied that in all the circumstances there should be orders extending the period within which the Administrators must convene the second meetings of creditors in respect of the Companies by approximately six months for the following reasons: (a) the Companies' Receivers have been taking steps to commence, or in some instances have commenced, the four sales campaigns of the four business units and require additional time stabilise the businesses, pursue a sale or sales, and finalise that process; (b) the Administrators consider the extension to be necessary to conduct the Receivers' sale process and consider that this is the course of action most likely to maximise returns to creditors and achieve the objects of Pt 5.3A of the Act in that it will increase the prospect of there being a surplus of unsecured assets for unsecured creditors and allows for the prospect of one or more of the asset sales being transacted via a Deed of Company Arrangement while the Receivers continue to meet the Companies' ongoing trading costs; (c) the BWX group is of a size and scope of complexity (including offshore reach) such that an extension to facilitate the sales process is justified; (d) beyond mere delay there is no evidence of partial prejudice to unsecured creditors or other stakeholders; (e) there is no suggestions the Administrators have delayed in exercising their functions; (f) the likely alternative would be that the companies are placed into liquidation which the Administrators consider would be a worse outcome for creditors and other stakeholders than the Receivers' sale process; (g) the extension allows sufficient time for the second meetings of the Companies to be held at the same time following the Receivers' sale process; (h) the Receivers support the extension of the convening period; (i) the creditors received notice of this application for an extension to the convening period and the Administrators received no objection; and (j) the proposed orders provide for liberty to apply to any creditor or other interested party. 54 I accept also that there is utility in making the ancillary orders sought which would allow for: (a) the second meetings to be held together or separately at any time during the period up to, or within five business days after the end of the convening period; (b) the administrators to give notice to each of the known creditors of each of the Companies by means of a circular published on the website maintained by the Administrators or sent by email or post; and (c) for any other notification to be validly given to creditors by the Companies by giving notice electronically by email, sending such notices to the postal address or facsimile number, and to the extent that the matter relates to a meeting that is the subject of r 75-40(4) of the IPR, causing such notice to be published in the Insolvency Notices website. 55 In the circumstances I also accept that it is necessary that there be an order pursuant to s 37AF of the FCA Act in the terms sought so as to prevent prejudice to the proper administration of justice: see Hayes, in the matter of Parcelpoint Pty Ltd (Administrator Appointed) [2022] FCA 1136 at [35]-[36] (Halley J); Hill, in the matter of Autocare Services Pty Ltd (Administrators Appointed) [2021] FCA 167 at [48]-[54] (Farrell J); Scott, in the matter of Tzukuri Pty Ltd (Administrators Appointed) [2018] FCA 16 at [15] (Rangiah J); Pleash, in the matter of Consolidated Tin Mines Limited (Administrators Appointed) [2016] FCA 931 at [21] (Edelman J). 56 Finally, I accept that in all the circumstances the Administrators costs should be costs in the administration of the companies. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McEvoy.

SCHEDULE OF PARTIES VID 272 of 2023 Plaintiffs Fourth Plaintiff: LHS NO. 2 PTY LTD ACN 165 455 201 (ADMINISTRATORS APPOINTED) Fifth Plaintiff: SAPU CORPORATION PTY LTD (FORMERLY USPA CORPORATION PTY LTD) ACN 163 273 514 (ADMINISTRATORS APPOINTED) Sixth Plaintiff: EDWARD BEALE HAIR CARE PTY LTD ACN 167 891 161 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Seventh Plaintiff: BWX BRANDS PTY LTD ACN 602 062 117 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Eighth Plaintiff: BWX AUSTRALIA PTY LTD ACN 601 966 170 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Ninth Plaintiff: SUKIN AUSTRALIA PTY LTD ACN 602 062 199 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Tenth Plaintiff: RENEW SKIN CARE AUSTRALIA PTY LTD ACN 606 139 315 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Eleventh Plaintiff: DERMA SUKIN AUSTRALIA PTY LTD ACN 606 140 818 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Twelfth Plaintiff: LIGHTNING DISTRIBUTION PTY LTD ACN 610 861 455 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Thirteenth Plaintiff: BWX DIGITAL PTY LTD ACN 621 403 370 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) Fourteenth Plaintiff: THE GOOD COLLECTIVE PTY LTD ACN 169 556 398 (RECEIVERS & MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED)

Corporations Act 2001(Cth)ss 435A, 439A, 447A(1), Pt

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