DD INVESTMENT WA PTY LTD -v- INFINITE GREEN ENERGY LIMITED (receivers and... [2025] WASC 195 | Case summary

Supreme Court of WA|2025-05-21|Before: Strk J

For the reasons outlined in DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] at [97] to [102], and while continuing to acknowledge that the court retains the discretion not to order a winding up,[25] I was satisfied that on the papers filed, DD Investment continued to have a strong case for the winding up of Infinite Green Energy.
As was noted in my earlier reasons, evidence must be adduced on behalf of a defendant company for it to rebut the presumption of insolvency, and in the absence of such evidence, the presumption of insolvency will not have been rebutted.[26]
The further evidence available to the court on 19 May 2025 as to the solvency of Infinite Green Energy was that contained in the administrators' report to creditors, a copy of which was attached to Mr Palandri's fifth affidavit.[27] The report makes plain that the administrators had formed the view that as Infinite Green Energy was insolvent, the administration could not come to an end without either Infinite Green Energy entering into a deed of company arrangement or liquidation.[28]
As was noted at pt 7.1 of the report to creditors, the administrators' investigations had among other things focused upon determining the insolvency date of Infinite Green Energy. At pt 7.5.2 of the report to creditors, the administrators' expressed the their preliminary view in the following terms:[29]

Reliance on capital raisings and debt funding for working capital;
Negative EBITDA for the financial year ended 30 June 2022 and all subsequent financial years, and up to 31 October 2024 were $8.6 million, $25.3 million, $15.7 million and $0.6 million, respectively;
Current ratio was below 1 and negative working capital from financial year ending 30 June 2022 to the date of our appointment, indicating illiquidity;
Negative working capital position from financial years ended 30 June 2022 through to 30 June 2024.
Suffered poor cashflow from financial year ended 30 June 2024; and
Negative net asset position from financial year ended 30 June 2024.

In support of a further adjournment, counsel for the administrators had also drawn the court's attention to that part of the report to creditors where the administrators had estimated a liquidation return to unsecured creditors of between nil and 8.5c in the dollar, with any possibility of a return contingent on highly uncertain recovery proceedings against various parties, some of whom are located overseas.[30]

As Infinite Green Energy remains in administration, s 440A(2) of the Corporations Act continues to have application.
I accepted that the administrators had continued to undertake a significant amount of work; without having conducted a formal vote, creditors representing a majority in value of the provable claims against Infinite Green Energy had provided their express support for the continuation of the administration; and there was evidence before the court which supported a finding that the continuation of the administration of Infinite Green Energy may result in a better outcome for creditors than liquidation.
Counsel for the administrators observed that while there is a significant volume of first instance authority as to s 440A(2) of the Corporations Act, there is a lack of consistency in those authorities about the extent of certainty needed in order to satisfy the requirements of s 440A(2) as to whether the administration would result in a better outcome for creditors than liquidation.[31]
I proceeded cognisant that considerations beyond mere quantum may be relevant to take into account in determining what is in the interests of the creditors and whether it is established that an adjournment may be said to be in the creditors' interests.[32] That said, as was the case when the earlier adjournment was pressed, when regard was had to all of the evidence filed, I did not consider the administrators to have discharged their onus so as to be entitled to an adjournment under s 440A(2) of the Corporations Act. Again, while I considered that there was no doubt that the administrators had acted with appropriate diligence and haste, had undertaken appropriate investigations within the time available, and having given weight to the opinions expressed by Mr Palandri and Mr Dominish in the context of their insolvency and restructuring experience, on the evidence available I did not consider it possible to be satisfied that it is in the interests of Infinite Green Energy's creditors for it to continue under administration, rather than be wound up, as distinct from satisfaction that it may be so.
No proposal for a deed of company arrangement had been made in final form. The administrators recorded in their report to creditors that the shareholders had sought additional time to enter discussions with new investors and key stakeholders, including the secured creditor and larger creditors.[33] Counsel for the administrators properly acknowledged that there is no certainty about what would be provided for in a shareholder proposed deed of company arrangement, or other deed of company arrangement proposal.[34]
Consistent with the approach adopted at [109] of DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2], I did not accept for the purposes of s 440A(2) that in all of the circumstances it is in the interests of Infinite Green Energy's creditors for it to continue under administration rather than be wound up, because the continuation of the administration preserved the prospect of a restructure which may result (or indeed, has a real prospect of resulting) in a better return to creditors than a liquidation.

The court's general power inherent in its own jurisdiction

While I again found that s 440A(2) of the Corporations Act was not enlivened, in all of the circumstances, I was persuaded that it was appropriate to exercise discretion so as to grant an adjournment of the application to wind up Infinite Green Energy.
I was cognisant that the administration was no longer at a very early phase, and that Infinite Green Energy was presumed to be insolvent by operation of the unanswered statutory demand. Further, the authorities show that as a general rule, a creditor who cannot obtain payment is, as between the creditor and the company that owes the debt, entitled to a winding up order as a matter of right.[35] Further, as described in my earlier reasons, there remain matters of concern which might properly be investigated by a liquidator.[36]
However, in contrast to the position taken on 17 April 2025, DD Investment did not oppose the further adjournment of the winding up application pressed on behalf of the administrators. The position adopted by DD Investment was a matter which weighed heavily in favour of the adjournment.
Further, I weighed in the balance the evidence of Mr Dominish, and that the receivers and managers were supportive of the voluntary administration of Infinite Green Energy continuing, in accordance with pt 5.3A of the Corporations Act with a view to Infinite Green Energy entering into a deed of company arrangement.[37] The continued co‑operation and co‑ordination with the receivers and managers and controllers appointed by Legal Mortgage Holdings, and the securing of funding for the purposes of the administration, remain matters key to the prospect of a better outcome for creditors through continued administration.
I also had regard to and weighed in the balance the further evidence of Mr Palandri as to the prospects of a restructure via a deed of company arrangement which might provide a better return to creditors.
As was highlighted on behalf of the administrators, before the court was the unchallenged evidence of the administrators that in their opinion, it is more likely than not that a shareholder proposal for a deed of company arrangement will be submitted; and that such a proposal will provide a better return for creditors than liquidation, and will allow Infinite Green Energy's business to continue as a going concern, satisfying the primary aim of pt 5.3A of the Corporations Act.
That opinion was supported by Mr Palandri's evidence as to discussions which were ongoing with certain shareholders as to a shareholder proposal for a deed of company arrangement.[38] I gave weight to Mr Palandri's evidence as to the extent and status of those discussions.[39]
Mr Palandri also deposed that based on the administrators' discussions with shareholder representatives, he considered that it was more likely than not that a shareholder deed of company arrangement proposal would be able to be finalised and put to the administrators so that it could be put to creditors within the next three weeks; and that such a proposal would result in the continuation of the business of Infinite Green Energy as a going concern and provide a better return to creditors than liquidation.[40] That evidence weighed heavily in favour of the exercise of discretion to adjourn.
As to the potential for a better return to creditors than a liquidation scenario, I also noted that the investor pack circulated by the administrators based on their discussions with the shareholder representatives, anticipated a 15 cents in the dollar return to unsecured creditors, well in excess of both the low‑end nil return and even the high‑end 8.5 cents in the dollar maximum expected return in liquidation.[41]
I also had regard to Mr Palandri's evidence as to the role the administrators would play in seeking to ensure the workability of a deed of company arrangement proposal (which, in order to gain the administrators' support and prevent the risk of a s 445D order, would require a better return to unsecured creditors than liquidation).[42] It was Mr Palandri's evidence that in his experience, the more complex the affairs of a company, the more involved administrators must be in discussions with potential proponents in respect of a possible deed of company arrangement proposal.[43] Mr Palandri is an experienced insolvency practitioner and his evidence in this regard carried considerable weight.
Counsel for the administrators also submitted that the cost to creditors of allowing the administration of Infinite Green Energy to continue for an additional period was unlikely to be a factor weighing against an adjournment, because the administrators were not incurring material trading costs (the key business assets being in the possession of the receivers and managers), and while it is possible the receivers may be incurring trading costs which will attach to the assets over which the receivers and managers were appointed, it was submitted that that was a continuing risk whether or not the court were to appoint a liquidator, because the receivers and managers would be entitled to continue to trade the business in any event.[44] I had regard to the same.
Finally, as was emphasised by counsel for the administrators, I noted that without having conducted a formal vote, creditors representing a majority in value of the provable claims against Infinite Green Energy had provided their express support for the continuation of the administration.[45]
Having regard to all of the matters outlined above, despite the administration no longer being in an early phase, I was satisfied that discretion ought be exercised to adjourn the hearing of the application to wind up Infinite Green Energy. The application was adjourned until after a supplementary report to creditors is to be issued but before the second meeting of creditors of Infinite Green Energy is resumed, which I considered to be an adjournment on grounds not extraneous to the scope and purpose of the Corporations Act, but rather, consistent with that scope and purpose. The further adjournment to such a date would permit a better informed analysis of the critical inquiry.[46] In this regard, although the administration was no longer at a very early phase, the exercise of discretion to adjourn fulfilled the same purpose as it did on 17 April 2025.

The orders made on 19 May 2025 are reproduced at sch A to these reasons.
As to costs I note that on 8, 15 and 17 April 2025 I reserved the costs associated with those attendances before the court. The costs of the hearing on 19 May 2025 and the further adjournment were also reserved without objection.
For completeness I note that the position of the administrators as to the appropriate costs outcome was summarised in my previous reasons;[47] and in advance of the 19 May 2025 hearing, DD Investment foreshadowed that in the circumstances of how the voluntary administration came about, it will seek that its costs should be paid as a priority in any deed of company arrangement proposed to creditors or any subsequent liquidation.[48] For the benefit of creditors and stakeholders, I have recorded the respective positions adopted to date with respect to costs, but make no finding with respect to the same.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Fifth affidavit of JT Palandri sworn 15 May 2025 par 9, JTP16.

[2] Fifth affidavit of JT Palandri sworn 15 May 2025, JTP16 (page 20).

[3] Fifth affidavit of JT Palandri sworn 15 May 2025, JTP16 (page 22).

[4] Fifth affidavit of JT Palandri sworn 15 May 2025 par 9, JTP16.

[5] Fifth affidavit of JT Palandri sworn 15 May 2025 pars 23 - 30.

[6] Fifth affidavit of JT Palandri sworn 15 May 2025 par 25.

[7] Fifth affidavit of JT Palandri sworn 15 May 2025 par 29.

[8] Fifth affidavit of JT Palandri sworn 15 May 2025 par 14.

[9] DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [64].

[10] Fifth affidavit of JT Palandri sworn 15 May 2025 par 17.

[11] Fifth affidavit of JT Palandri sworn 15 May 2025 par 19.

[12] Fifth affidavit of JT Palandri sworn 15 May 2025 par 20.

[13] Fifth affidavit of JT Palandri sworn 15 May 2025 par 21.

[14] Fifth affidavit of JT Palandri sworn 15 May 2025 par 32.

[15] Fifth affidavit of JT Palandri sworn 15 May 2025 par 34.

[16] Fifth affidavit of JT Palandri sworn 15 May 2025 par 35.

[17] Fifth affidavit of JT Palandri sworn 15 May 2025 par 35.

[18] Affidavit of AJ Dominish sworn 19 May 2025 pars 5 - 9.

[19] Affidavit of AJ Dominish sworn 19 May 2025 par 10.

[20] Affidavit of AJ Dominish sworn 19 May 2025 par 11.

[21] Affidavit of AJ Dominish sworn 19 May 2025 par 13.

[22] Memorandum pursuant to O 67A r 13(2) of the Rules of the Supreme Court filed by the administrators on 19 May 2025.

[24] Order 2 of the orders made on 19 May 2025, reproduced at sch A to these reasons.

[25] Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd (Receivers and Managers Appointed) [2011] HCA 18; (2011) 244 CLR 1 [32], as was noted in DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [74].

[26] DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [77], [101]. See also Commonwealth Bank of Australia v Begonia (1993) 11 ACLC 1075, 1081.

[27] Fifth affidavit of JT Palandri sworn 15 May 2025, JTP16.

[28] Fifth affidavit of JT Palandri sworn 15 May 2025, JTP16 (page 22).

[29] Fifth affidavit of JT Palandri sworn 15 May 2025, JTP16 (page 51).

[30] Administrators' supplementary outline of submissions filed 19 May 2025 par 14; fifth affidavit of JT Palandri sworn 15 May 2025, JTP16 (supporting analysis at pages 60 - 64).

[31] Administrators' supplementary outline of submissions filed 19 May 2025 par 18(a). In support of the first adjournment of the application, counsel for the administrators had particularly referred to the observations made in TCS Management Pty Ltd v CTTI Solutions Pty Ltd [2001] NSWSC 830; In the matter of First Netcom Pty Limited [2000] NSWSC 989 [9] ‑ [10]; In the matter of i-Prosperity Capital Pty Ltd [2020] NSWSC 1116; and In the matter of Glenvine Pty Limited [2020] NSWSC 642 [3].

[32] TCS Management Pty Ltd v CTTI Solutions Pty Ltd [18].

[33] Fifth affidavit of JT Palandri sworn 15 May 2025, JTP16 (page 20).

[34] Administrators' supplementary outline of submissions filed 19 May 2025 par 15.

[35] DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [113], citing Deputy Commissioner of Taxation v JGQ Developments Pty Ltd [2018] FCA 2046 [24], and IOC Australia Pty Ltd v Mobil Oil Australia Ltd [1905] ArgusLawRp 98; (1975) 11 ALR 417, 427.

[36] DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [115] - [117].

[37] Affidavit of AJ Dominish sworn 19 May 2025 par 13.

[38] Administrators' supplementary outline of submissions filed 19 May 2025 par 15; fifth affidavit of JT Palandri sworn 15 May 2025 pars 12 - 15.

[39] Administrators' supplementary outline of submissions filed 19 May 2025 par 15(a); fifth affidavit of JT Palandri sworn 15 May 2025 pars 12 - 15.

[40] Fifth affidavit of JT Palandri sworn 15 May 2025 par 12.

[41] Administrators' supplementary outline of submissions filed 19 May 2025 par 15(b); fifth affidavit of JT Palandri sworn 15 May 2025 par 26, JTP16 (page 213).

[42] Administrators' supplementary outline of submissions filed 19 May 2025 par 15(a); fifth affidavit of JT Palandri sworn 15 May 2025 par 23.

[43] Fifth affidavit of JT Palandri sworn 15 May 2025 par 23.

[44] Administrators' supplementary outline of submissions filed 19 May 2025 par 17.

[45] Administrators' supplementary outline of submissions filed 19 May 2025 par 18(d); fifth affidavit of JT Palandri sworn 15 May 2025 pars 32 - 35.

[46] DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [92]; School Holdings Pty Ltd v Dayroll Pty Ltd (Administrators Apptd) [2008] NSWSC 670 [6].

[47] DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [143] - [144].

[48] DD Investment's submissions in relation to the costs of the winding up application filed 19 May 2025 par 1.

On 17 April 2025 the application made by DD Investment WA Pty Ltd to wind up Infinite Green Energy Limited (receivers and managers appointed) (administrators appointed), was adjourned to 19 May 2025 on the application of Richard Scott Tucker and Jared Troy Palandri, who had been appointed under s 436A of the Corporations Act 2001 (Cth) as joint and several voluntary administrators of Infinite Green Energy, and of its Australian subsidiaries (together, the IGE Group). For the reasons then delivered, the court was satisfied that its discretion ought be exercised to adjourn the application to wind up Infinite Green Energy to a date after the report to creditors was issued but before the second meeting of its creditors: DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] [2025] WASC 137.
The report to creditors was issued on 15 May 2025.[1] Among other things, the administrators recorded in their report to creditors that a group of shareholders had expressed interest in participating in the recapitalisation and restructure of the IGE Group through a deed of company arrangement, and that the objectives of those shareholders were to gain back control of the IGE Group; to preserve the IGE Group as a going concern; to secure capital expenditure to spend on the Northam Solar Farm which would improve the viability of the IGE Group; to replace the board; and to issue equity to investors bringing new money (including existing shareholders). The administrators also recorded that the shareholders had sought additional time to enter discussions with new investors and key stakeholders, including the secured creditor and larger creditors.[2]
The administrators also recorded in their report that as no acceptable deed of company arrangement proposal had yet been received, and due to the insolvency of the IGE Group, the administrations could not come to an end. The administrators informed creditors that in the circumstances, they proposed to utilise their statutory power (under s 75‑140 of the Insolvency Practice Rules (Corporations) 2016 (Cth)) to adjourn the second meeting of creditors unilaterally, so as to allow time for the administrators to consider and finalise negotiations and the documentation of any deed of company arrangement proposal, which they understood would take into consideration the IGE Group continuing as a going concern and provide the best return to creditors.[3]
At the adjourned hearing on 19 May 2025 the administrators sought a further adjournment of the application to wind up Infinite Green Energy to 22 July 2025, in order to allow for the voluntary administration of Infinite Green Energy to be completed in accordance with pt 5.3A of the Corporations Act, in the interests of its creditors.
As had occurred on the last occasion, the legal representative of Axpo Servizi Produzione Italia S.p.A. (a creditor of Infinite Green Energy) was granted leave to appear and was heard in support of the further adjournment. Further, leave was granted to the legal representative of Aaron Joseph Dominish, Cameron Hugh Shaw, Richard Albarran, and Brent Trevor-Alex Kijurina in their capacities as joint and several receivers and managers of Infinite Green Energy, to appear and to also be heard in support of the further adjournment.
In the end, the further adjournment was not opposed by DD Investment, however the confidentiality order sought by the administrators with respect to one of the affidavits read by counsel for the administrators in support of further adjournment was opposed. The question of what may in the end be the appropriate costs order with respect to the action was reserved, to be determined at the conclusion of the application to wind up Infinite Green Energy.
These reasons concern the application to further adjourn the application to wind up Infinite Green Energy, and the application to restrict access to an affidavit read in support of the application. These reasons need to be read with my earlier reasons in DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2].

At the hearing on 17 April 2025, in support of its application to wind up Infinite Green Energy, counsel for DD Investment had read and relied upon various affidavits. I had summarised those affidavits in DD Investment WA Pty Ltd v Infinite Green Energy Limited [2025] WASC 118 at [14] to [39].
At the hearing on 17 April 2025 counsel for DD Investment had also read a further affidavit made by Pragya Srivastava, which was affirmed on 14 April 2025 and to which Ms Srivastava attached documents marked PS‑1 to PS‑2. I summarised that affidavit in DD Investment WA Pty Ltd v Infinite Green Energy Limited [No 2] at [15] to [20]. I had regard to those affidavits and adopt the summaries contained in my earlier reasons in these reasons as if reproduced here in full.

DD INVESTMENT WA PTY LTD -v- INFINITE GREEN ENERGY LIMITED (receivers and managers appointed) (administrators appointed) [No 3] [2025] WASC 195 (21 May 2025)

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Judgment (56 paragraphs)

The court's general power inherent in its own jurisdiction

Cases Cited (4)