Dixon, in the matter of G. G. Engineering (Aust) Pty Ltd (administrators appointed) [2017] FCA 365

DAVIES J: 1 Application has been made by the administrators of G.G. Engineering (Aust) Pty Ltd (administrators appointed) ("the Company") for orders pursuant to ss 439A(6) and 447A(1) of the Corporations Act 2001 (Cth) ("the Act") for an extension of the convening period prescribed by s 439A(5) of the Act, for the convening of a second meeting of the creditors of the Company under s 439A of the Act, to 26 May 2017. The application is supported by an affidavit of Stephen Robert Dixon, one of the administrators. 2 Mr Dixon and his partner Ahmed Bise ("Mr Bise") were appointed as joint and several administrators of the Company on 14 March 2017. The administrators currently have control of the business and assets of the Company which is involved in a number of equine related services including manufacturing a wide range of equine training equipment including treadmills, walkers and stables; offering equestrian facility design and fit out services; and undertaking large scale stable construction projects for major racing clubs in addition to smaller less complex projects for private and small business owners. The Company currently has building contracts with two major Victorian race clubs for the development of large stable complexes: one with Geelong Racecourse ("Racing Victoria") involving the construction of two stable complexes housing 35 horses; and the other with Cranbourne Turf Club involving the construction of a stable development to house up to 245 horses across five sites. The administrators are continuing to trade the business of the Company with a view to selling the business as a going concern. They have had numerous meetings with Racing Victoria and Cranbourne Turf Club and both race clubs have provided their support for the administrators to continue working on their building contracts until the sale of the business is finalised. 3 The first meeting of creditors was held on 24 March 2017. Without an extension of time, the convening period with respect to the Company will expire on 11 April 2017 pursuant to s 439A(5) of the Act. An extension of 45 days to 26 May 2017 for the convening of the second meeting of creditors is sought. 4 Mr Dixon deposed that the reasons for the extension are: (a) to enable sufficient time for the sale of the business as a going concern; (b) to allow the administrators time properly to assess if it is appropriate for any deed for company arrangement to be proposed particularly in regards to any potential sale or continued operation of the business; (c) to allow adequate time for the administrators to assess the financials of the Company; and (d) to allow sufficient time to undertake action required to sell the business and to finalise the terms of the sale of the business. 5 Mr Dixon deposed that the investigations of the administrators to date of the Company's business, property, affairs and financial circumstances lead them to conclude that it will be difficult to form an opinion as to the recommended outcome of the administration and undertake all action necessary to sell the business within the statutory timeframe. If a meeting were to be convened within the statutory timeframe, the administrators would likely recommend that the administration be extended. It is Mr Dixon's opinion that an orderly sale of the business is likely to result in a far better return for the Company's creditors than would result from the immediate winding up of the Company. Further an orderly sale of the business will in Mr Dixon's opinion, be likely to be in the best interests of the employees of the Company. Mr Dixon deposed that in view of the further work required to assess offers, negotiate and sell the business the administrators consider that they are not presently in a position to prepare a report which adequately informs creditors about the options available for the future of the Company or to hold meetings of creditors to decide on the future of the Company. 6 The Court has the power to extend the convening period under s 439A(6) of the Act. The essential matter for the Court on such an application is to strike an appropriate balance between the legislature's expectation that the administration will be relatively swift and the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising the return to creditors and any return for shareholders: Re Riviera Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (2009) 72 ACSR 532; [2009] NSWSC 585 at [15] citing Re Diamond Press Australia Pty Ltd [2001] NSWSC 313; Parbery, in the matter of NewSat Limited (Administrators Appointed) (Receivers and Managers Appointed) [2015] FCA 435 at [59]. The reasons given by Mr Dixon for requiring an extension for 45 days are consistent with the object and purpose of Part 5.3A of the Act as set out in s 435A of the Act. Having regard to the reasons expressed by Mr Dixon, I am satisfied it would be in the best interests of the creditors if the convening period was extended. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.