Caterpillar Financial Australia Limited v Ovens Nominees Pty Ltd

SHARIFF J: 1 On 2 December 2024, Mr Alan Walker and Mr Glenn Livingstone were appointed as voluntary Administrators, pursuant to s 436A of the Corporations Act 2001 (Cth) (Corporations Act), of Goldin Australia Pty Ltd (administrators appointed) ACN 163 035 685 and Goldin Wines Australia Pty Ltd (administrators appointed) ACN 650 015 88 (together, the Companies). 2 By originating process filed on 17 December 2024, the Administrators seek orders pursuant to s 439A(6) of the Corporations Act extending the convening period for the meetings of creditors of the Companies (referred to in ss 439A(1) and (5) of the Corporations Act) to 30 June 2025, orders allowing for the electronic notification of creditors pursuant to s 447A of the Corporations Act, and s 90-15 of the Insolvency Practice Schedule (Corporations), being Schedule 2 to the Corporations Act (IPS), and consequential orders. The Administrators also seek orders that they be appointed as receivers of property of the Goldin Australia Equine Trust, of which Goldin Australia is trustee, together with any other property of Goldin Australia held on trust. 3 The essential reason for the application is that, in the absence of the foregoing orders, the convening period will expire on 9 January 2025 and the last day on which the second creditors' meetings can be held is 16 January 2025. 4 The Administrators read the following affidavits in support of the application: (a) an affidavit of Alan Walker affirmed on 13 December 2024, together with exhibit AW-1; and (b) an affidavit of Aaron Kam sworn on 19 December 2024. 5 For the reasons that follow, I am satisfied that the orders sought should be made.

APPLICABLE PRINCIPLES 6 The relevant legislative scheme was recently outlined by Halley J in Clubb (administrator), in the matter of Town Tavern Blacktown Pty Limited (administrators appointed) (receivers and managers appointed) [2024] FCA 405 at [22]-[26] and Markovic J in Crawford, in the matter of North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635 at [18]-[20], to which I recently referred in Colley, in the matter of PF Group Holdings Pty Ltd (Administrators Appointed) [2024] FCA 792 at [23]ff. I do not repeat those principles here.

The need for an extension of the convening period 7 Mr Walker explains that the Administrators intend to conduct a sale process in respect of the Companies' assets. As Mr Walker explains, there are a number of steps which he considers will necessarily be undertaken in order for that to occur, including obtaining valuations, undertaking marketing activities, engaging specialists to assist with that sale process, setting up a data room to allow intending purchasers to conduct due diligence, engaging in contract negotiations and attending to post contractual steps as required. 8 In this context, Mr Walker observes that, having regard to the age of the horses owned by Goldin Australia, they cannot be sold until at least March 2025. 9 Mr Walker further observes that, whilst the Administrators have undertaken preliminary work to understand the current state of affairs within the Companies, he considers that there is still much to be done in order for the Administrators to be in a position to report to creditors. In particular, Mr Walker notes that, due to the unique business operated by Goldin Australia, the relationship between the Companies and ongoing proceedings in the Supreme Court of South Australia, at this point in time, the Administrators do not consider that they are in a position to be able to properly report to the Companies' creditors. 10 In this context, Mr Walker opines that the objectives of s 435A of the Corporations Act and the interests of creditors of the Companies will be best served by an extension of the convening periods for the second meetings of creditors of the Companies, and that an extension of the convening periods up to 30 June 2025 will permit sufficient time for the Administrators to obtain further information, carry out further investigations, attempt to sell the Companies' assets, and report to creditors. 11 Having regard to the statements of principle referenced above, and the circumstances of the Companies, I am satisfied that it is appropriate that an extension of the convening period be granted. 12 I am satisfied that the objects of s 435A of the Corporations Act are best served by the extension sought, and the extension sought will, in Mr Walker's opinion, allow the Administrators time to continue their investigations and attempt to sell the assets of the Companies, and meaningfully report to creditors on the affairs of the Companies in advance of the second meeting of creditors. 13 I am satisfied of these matters in particular given that: (a) this application for the extension of the convening period is made before the convening period expires, and it is the first application; (b) the extension sought is for a period of approximately six months. This period is reasonable when one has regard to: (i) the need to conduct further investigations into the affairs of the Companies; (ii) the need for further time to sell the Companies' assets (the timetable of which is informed, amongst other things, by the inability to sell horses owned by the Companies until at least March 2025); and (iii) the need generally for the Administrators to continue to carry out their investigations; (c) creditors will not be materially prejudiced by the extension; (d) the orders proposed make provision for any person who can demonstrate sufficient interest to apply to the Court for modification of those orders; and (e) there is no winding-up application on foot in respect of the Companies.

The appointment of a receiver 14 The Administrators also seek orders, pursuant to s 57 of the Federal Court of Australia Act 1976 (Cth) that they be appointed as receivers without security of the assets of the Trust. 15 That application is made in circumstances in which the trust deed by which the Trust is established contains, in familiar form, a vacation of office clause, which provides that the office of trustee is immediately vacated if, relevantly, the trustee (here, Goldin Australia) enters into administration. 16 The effect of this vacation of office is that Goldin Australia holds any Trust assets as bare trustee. As bare trustee, Goldin Australia's duties, powers and rights are limited to protecting the trust assets, and it has limited powers to deal with the assets of the Trust: see generally the discussion of these issues in Caterpillar Financial Australia Limited v Ovens Nominees Pty Ltd [2011] FCA 677 at [24]-[26]. 17 Although the Administrators have been informed by a solicitor acting for the sole unitholder of the Trust that that unitholder intends to appoint a new trustee, Mr Walker deposes that the Administrators are not aware of that having occurred. Mr Walker further explains that, based on his investigations to date, it appears that Goldin Australia operated solely in its capacity as trustee of the Trust, and as such, it is likely that all of the assets of Goldin Australia are held for, and all of the liabilities of Goldin Australia were incurred in connection with, the Trust. 18 Mr Walker further explains that, absent power to deal with Trust property, the Administrators will not be in a position to complete any sale process in respect of Trust property, and that this may also impact the ability to sell the business of Goldin Wines as a going concern (as that company operated from real property owned by Goldin Australia). 19 In this connection, the Administrators seek to adopt the course referred to by Yates J in Kite v Mooney, in the matter of Mooney's Contractors Pty Ltd (in liq) [2016] FCA 886 at [15] (see also the course referred to by Farrell J in Re Brereton (in their capacities as joint and several voluntary administrators of MyHouse (Aust) Pty Ltd (admins apptd)) [2020] FCA 610 at [25]ff, and in particular, the more limited scope of powers given to Administrators as trustees, as opposed to liquidators). 20 In Re Brereton, Farrell J observed as follows at [37]: Further, the Court accepts that administrators and any relevant purchasers would have more confidence in their negotiation of an ultimate sale if it is clear that the administrators have unambiguous power to sell the Business or any part of it. That is likely to facilitate the sale process and possibly achieve a better return for the Trust's assets for the benefit of the Trust's creditors and beneficiaries, who are also the shareholders of the Company. That is consistent with the object of Part 5.3A as set out in s 435A of the Corporations Act. There is therefore utility in appointing the administrators as receivers under s 57 of the Federal Court Act and providing the advice to the administrators under s 95-15 of the Insolvency Practice Schedule. Further, the Court accepts that the cost of making the application for these orders, in the context of the need to approach the Court for orders extending the convening period, is likely small. 21 I adopt her Honour's analysis. In the present circumstances, I am satisfied that the Administrators and any relevant purchasers would have more confidence in their negotiation and ultimate sale of the assets or Companies or parts of them if the Administrators have unambiguous power in respect of those assets and that this could also possibly achieve a better return for the Trust's assets, for the benefit of the Trust's creditors and beneficiaries. This is particularly so where the relevant assets in the Trust are the only assets held by Goldin Australia (albeit subject to the Trust), and therefore it is appropriate that the Administrators be entitled to deal with those assets. 22 Further, and where Goldin Australia has a right of indemnity from those assets, but can be removed at any time as trustee, I am satisfied that it is appropriate that the Administrators be appointed as receivers of those assets in order to preserve that right of indemnity and to manage those assets going forward.

Notification orders 23 I will also make orders requiring the Administrators to notify relevantly affected persons including creditors and the beneficial owner of the Trust. I am satisfied that such orders are appropriate as they will fulfil the objective of notifying as many creditors of the Companies as quickly and cheaply as possible, and will otherwise conserve the limited assets of the Companies for the benefit of creditors.

DISPOSITION 24 I will make the orders sought. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Shariff.