China Railway Materials (Australia) Pty Ltd v Aurora Metals Limited

(Delivered ex tempore, revised from the transcript)

A INTRODUCTION AND BACKGROUND 1 The plaintiffs came before me today in my capacity as Commercial and Corporations Duty Judge, seeking an extension of time pursuant to s 588FM of the Corporations Act 2001 (Cth) (Corporations Act). 2 It is unnecessary to set out the background to the proceeding. The underlying factual matrix was set out by Feutrill J in two recent, related judgments, namely Pit N Portal Mining Services Pty Ltd v Aurora Metals Ltd (Administrators Appointed) [2023] FCA 762 and Tucker, in the matter of Aurora Metals Limited (Administrators Appointed) [2023] FCA 761. 3 It suffices to note the defendants, which are all currently in voluntary administration, are each grantors of one or more of the security interests to which the relevant proposed registrations relate. Each has been joined to the proceeding not necessarily because relief is being sought against them specifically, but because the relief sought may affect their rights and, accordingly, they should be given an opportunity to be heard: Re Apex Gold Pty Ltd ACN 124 893 778 [2013] NSWSC 881 (at [18] per Hammerschlag J). 4 This matter has come before me urgently because, as Brereton J explained in Re Appleyard Capital Pty Ltd; 123 Sweden AB v Appleyard Capital Pty Ltd [2014] NSWSC 782; (2014) 101 ACSR 629 (at 633 [8]), unless and until an extension of time is granted: … the effect of s 588FL(2) is that when a company is being wound up, an administrator has been appointed or a deed of company arrangement executed, any PPSA security interest which was perfected, registered, or enforceable against a third party after the latest of 6 months before the critical time or 20 days after the security agreement came into force or such later time as the court may fix under s 588FM, vests in the company, for the benefit of creditors generally, and the secured creditor loses the benefit of the security. (Citations omitted). 5 The plaintiffs move on an originating process dated 3 July 2023, by which they seek the following final relief: 6. An order, pursuant to section 588FM of the Corporations Act, fixing the dates listed in Schedule B of this Originating Process as the time for the First Plaintiff to register each of the New Registrations, respectively, for the purposes of section 588FL(2)(b)(iv) of the Corporations Act. 7. An order that: a. if any or all of the Defendants contradict the application - such Defendant(s) is/are to pay the Plaintiff's costs and incidentals to the proceedings; or b. if any or all of the Defendants do not contradict the application - there be no order as to costs.

B DISPOSITION 6 At the hearing, a preliminary issue arose concerning leave to proceed against the defendants. 7 On 3 July 2023, Cheeseman J granted the plaintiffs leave to proceed pursuant to s 440D of the Corporations Act in respect of interim relief sought in the originating process. The issue of leave to proceed in relation to the balance of the relief sought was otherwise stood over to today. 8 There is no reason why leave to proceed should not be granted. This issue can be put to one side immediately. 9 Before turning to whether an extension of time should be granted pursuant to s 588FM of the Corporations Act, two matters should be noted in the light of the fact that each of the defendants is in external administration. 10 First, the grantor entering external administration does not preclude the bringing of an application of this kind or the grant of the relief sought: Re Carpenter International Pty Ltd [2016] VSC 118; (2016) 51 VR 190 (at 241 [217] per Cameron J). In any event, the registrations for which relief pursuant to s 588FM is sought predate the appointment of any external administrator. 11 Secondly, because the grantors are already in external administration, there is little point in making Guardian Securities orders (an appellation derived from McLelland J's judgment in Re Guardian Securities Ltd [1984] 1 NSWLR 95) which carve out or otherwise permit an external administrator to seek to vary or set aside any order of the Court made under s 588FM of the Corporations Act within six months of the date of the relevant registration or registrations: see also Re Appleyard (at 639 [28] per Brereton J). 12 The principles by which an extension of time is granted under s 588FM are well known and do not require repetition: see, for example, Re Appleyard (at 633 [8]-[10] per Brereton J). I am satisfied an extension of time should be granted for the following three reasons, all of which can be shortly stated and are expanded upon in the submissions filed the plaintiffs (which I accept). 13 First, the administrators and the receivers have been given notice of the application and do not oppose the orders. Secondly, the grant of the relief is not of such a nature as to prejudice the position of creditors or shareholders within the meaning of s 588FM(2)(a)(ii) of the Corporations Act. Thirdly, it is evident from the material before me that it is just and equitable to grant the relief, so as to ensure the relevant interests are not rendered inutile for no reason other than accident or inadvertence. 14 Accordingly, I make the orders sought by the plaintiffs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.

SCHEDULE OF PARTIES NSD 652 of 2023 Plaintiffs Second Plaintiff: CRLC (AUSTRALIA) PTY LTD (ACN 150 271 604) Defendants Fourth Defendant: COLINACOBRE PTY LTD (ACN 601 312 207) (ADMINISTRATORS APPOINTED)