Gandel Metals Pty Ltd, in the matter of Centennial Mining Limited (Subject to Deed of Company Arrangement) v Centennial Mining Limited

Federal Court of Australia|2020-02-20|Before: Mr P, Moshinsky J

Number of paragraphs: 64

Counsel for the Plaintiff: Mr S Maiden QC with Mr A Ounapuu

Solicitor for the Plaintiff: HWL Ebsworth Lawyers

Solicitor for the First, Second, Third, Fourth and Fifth Defendants: Lavan

Counsel for the Sixth Defendant: The Sixth Defendant did not appear

Counsel for the Interested Party: Mr CR Brown

Solicitor for the Interested Party: CCK Lawyers

ORDERS VID 688 of 2019 IN THE MATTER OF CENTENNIAL MINING LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT (ACN 149 308 921)) BETWEEN: GANDEL METALS PTY LTD (ACN 102 347 955) Plaintiff

AND: CENTENNIAL MINING LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 149 308 921) First Defendant

MALDON RESOURCES PTY LTD (ACN 090 458 665) Second Defendant

RICHARD SCOTT TUCKER (and others named in the Schedule) Third Defendant

JUDGE: MOSHINSKY J DATE OF ORDER: 20 FEBRUARY 2020

The third to fifth defendants and the interested party undertake to not effectuate the DOCA, being the "effectuation steps" referred to at point 6 of part 4.3.14 of the Report to Creditors dated 28 January 2020, prior to 4.00 pm on 13 March 2020 subject to further order from the Court.

Pursuant to s 447A of the Corporations Act 2001 (Cth) (the Act), Part 5.3A of the Act is to operate in relation to Centennial Mining Ltd (subject to deed of company arrangement) (Centennial) and Maldon Resources Pty Ltd (subject to deed of company arrangement) (Maldon) (collectively, the Companies) as if: (a) on or around 20 January 2020, the date for satisfaction of the Conditions Precedent (as defined in clause 22.1 of the deed of company arrangement dated 20 November 2019 (Amended DOCA)) was extended by the Deed Administrators and Avior Consulting Pty Ltd to 28 February 2020; (b) s 445C(c) of the Act did not have the effect that the Amended DOCA was terminated on 24 January 2020; (c) the terms of the Amended DOCA continue to bind the Deed Administrators and the creditors of Centennial and Maldon (Creditors); and (d) the Notice of Meeting of Creditors dated 28 January 2020 and published on the Deed Administrators' firms' website on 30 January 2020, for the meeting held on 12 February 2020 (the Meeting of Creditors) was validly issued pursuant to the continuing Amended DOCA and the Act.
Pursuant to s 447A of the Act, Part 5.3A of the Act is to operate in relation to the Companies such that: (a) the Amended DOCA continues to bind the Deed Administrators and the Creditors; (b) Clause 22.1.1 of the Amended DOCA read: the Conditions Precedent are not satisfied or waived on or before 31 March 2020, or such other date as agreed in writing between the Deed Administrators and the Proponent.
Paragraphs (b)(i) and (c)(i) of the plaintiff's further amended originating process (FAOP) dated 7 February 2020 be dismissed.
The plaintiff's interlocutory process dated 7 February 2020 (Plaintiff's Interlocutory Process) otherwise be dismissed. Further interlocutory application
The plaintiff file and serve any application to set aside the Oldfield DOCA and any affidavits in support by 4.00 pm on 26 February 2020, such application be made returnable on 12 March 2020.
The first to fifth defendants file and serve any affidavits in response by 4.00 pm on 28 February 2020.
The interested party file and serve any affidavits in response by 4.00 pm on 2 March 2020.
The plaintiff file and serve any affidavits in reply, and its outline of submissions, by 4.00 pm on 4 March 2020.
The first to fifth defendants and interested party file and serve any outline of submissions in response by 4.00 pm on 6 March 2020. Costs
The first to fifth defendants pay the plaintiff's costs of the questions raised by paragraphs (b)(i) and (c)(i) of the FAOP.
In respect of the Plaintiff's Interlocutory Process: (a) the first to fifth defendants pay the plaintiff's costs of the Plaintiff's Interlocutory Process (excluding the costs incurred in respect of paragraph 1 of that application); and (b) the plaintiff pay to the first to fifth defendants any costs thrown away by reason of the amendments to the amended originating process.
The first to fifth defendants pay the plaintiff's costs of the first to fifth defendants' interlocutory process dated 14 February 2020.
There be no order as to costs in respect of the interested party in relation to the questions and applications described in paragraphs 10 to 12 above. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 The plaintiff, Gandel Metals Pty Ltd (Gandel), is a creditor of the first defendant, Centennial Mining Limited (subject to deed of company arrangement) (Centennial). The second defendant is Maldon Resources Pty Ltd (subject to a deed of company arrangement) (Maldon). The third, fourth and fifth defendants are the administrators of a deed of company arrangement in respect of Centennial and Maldon (the Deed Administrators). A company named V C Oldfield Investments Pty Ltd (Oldfield), which is not a party to the proceeding, has been given leave to appear as an interested party. 2 The proceeding was commenced some time ago, in June 2019. At that stage, a deed of company arrangement had been entered into in respect of Centennial and Maldon. Gandel was opposed to that deed of company arrangement and sought various forms of relief in relation to it. Subsequently, the deed of company arrangement was varied on two occasions. These variations took place on 27 September 2019 and 20 November 2019. It will be convenient to refer to the deed of company arrangement as so varied as the Amended DOCA. Gandel was generally satisfied with the Amended DOCA. In light of this, various case management hearings were adjourned by consent and the deadlines for the filing of affidavit material were extended by consent. 3 The position changed, however, in January and February this year. In particular, on 28 January 2020 a meeting of creditors was called for 12 February 2020 for the purpose of considering a proposal put forward by Oldfield to vary the Amended DOCA (the Oldfield Proposal). Gandel is opposed to the Oldfield Proposal. Gandel filed an interlocutory process dated 7 February 2020 seeking an interlocutory injunction to restrain the holding of the meeting and provided a proposed further amended originating process seeking certain additional relief. In particular, Gandel contended that the Amended DOCA had terminated according to its terms on 24 January 2020, by reason of the non-satisfaction of certain conditions precedent by that date. Further, Gandel contended that a variation of the Amended DOCA to give effect to the Oldfield Proposal would not be a "variation" within the meaning of s 445A of the Corporations Act 2001 (Cth). These contentions were set out in paragraphs (b)(i) and (c)(i) of the proposed further amended originating process. 4 Gandel's application for an interlocutory injunction came on for hearing before me on 11 February 2020, the day before the proposed meeting. On that occasion, the matter was ultimately dealt with by way of cross-undertakings by Gandel and the Deed Administrators to the following effect: (a) Gandel gave an undertaking as to damages; and (b) the Deed Administrators gave an undertaking not to execute any deed of company arrangement prior to 4.00 pm on 19 February 2020. 5 In addition to the receipt of these undertakings, orders were made to the following effect: (a) Gandel was given leave to amend its amended originating process in the form of the proposed further amended originating process; (b) the proceeding was listed for hearing at 9.30 am on 19 February 2020 on the questions raised in paragraphs (b)(i) and (c)(i) of the further amended originating process, being the alleged termination of the Amended DOCA and the question whether the Oldfield Proposal is a "variation" of the Amended DOCA within the meaning of s 445A of the Corporations Act; and (c) the further hearing of Gandel's application for an interlocutory injunction was adjourned to 9.30 am on 19 February 2020. 6 It is convenient to note at this point that a separate issue in this proceeding is whether Gandel is a secured creditor of Centennial. This issue is raised by paragraph (a) of the further amended originating process (the Security Issue). At the hearing on 11 February 2020, I also made an order that the Security Issue be heard separately from other issues and that the hearing of that issue be expedited, and set down as soon as practicable after 2 March 2020 on an estimate of one day. 7 At the meeting on 12 February 2020, the creditors of Centennial and Maldon voted to approve the Oldfield Proposal. The resolution was passed by a majority in number and a majority in value of the creditors of each company. 8 On 14 February 2020, the Deed Administrators filed an interlocutory process in this proceeding seeking orders pursuant to ss 447A and 1322(4)(d) of the Corporations Act. In broad terms, the Deed Administrators seek an order that the date for completion of the conditions precedent in the Amended DOCA be extended to 28 February 2020. The Deed Administrators also seek orders that Pt 5.3A of the Corporations Act operate as if: s 445C(c) did not have the effect that the Amended DOCA terminated on 24 January 2020; the terms of the Amended DOCA continue to bind the Deed Administrators and creditors; and the notice of meeting (for the meeting on 12 February 2020) was validly issued. It is evident that this interlocutory process is largely, if not entirely, responsive to the contentions raised by Gandel, as outlined earlier in these reasons. This interlocutory process was listed for hearing at 9.30 am on 19 February 2020. 9 Thus, there were three applications or sets of questions before the Court at the hearing on 19 February 2020: (a) the questions raised by paragraphs (b)(i) and (c)(i) of the further amended originating process; (b) Gandel's interlocutory process seeking an interlocutory injunction; and (c) the Deed Administrators' interlocutory process seeking orders pursuant to ss 447A and 1322(4)(d). 10 Early in the hearing, senior counsel for the Deed Administrators conceded that the Amended DOCA had terminated. As a result, the focus of the hearing became the Deed Administrators' application for orders pursuant to ss 447A and 1322(4)(d).

Evidence 11 Gandel relies on the following affidavits: (a) affidavits of Ian Gandel, the director and company secretary of Gandel, dated 19 June 2019 and 7 February 2020; (b) an affidavit of Hamish John Gillis, a lawyer at CCK Lawyers, the solicitors for Oldfield, dated 10 February 2020; (c) an affidavit of Tegan Esther Healey, a solicitor employed by Lavan, the solicitors for the Deed Administrators, dated 11 February 2020; and (d) an affidavit of Richard Scott Tucker, one of the Deed Administrators, dated 14 February 2020 (in support of the application pursuant to s 447A). 12 The Deed Administrators rely on the following affidavits (in addition to the affidavits of Ms Healey and Mr Tucker referred to above): (a) an affidavit of Mr Tucker dated 17 February 2020; and (b) an affidavit of Ms Healey dated 18 February 2020. 13 In addition, the Deed Administrators tendered three documents, which were admitted into evidence: a letter from Lavan to HWL Ebsworth Lawyers, the solicitors for Gandel, dated 18 February 2020; an email from HWL Ebsworth dated 19 February 2020; and a corrected version of the minutes of the meeting that took place on 12 February 2020. 14 There was no cross-examination.

Background facts 15 The following summary of the facts is drawn from Gandel's outline of submissions dated 19 February 2020. The facts to which I will refer do not appear to be controversial, at least for the purposes of the matters presently before the Court. 16 Companies related to Gandel own approximately 13.5% of Centennial's issued shares. In August 2018, Gandel lent Centennial approximately $2.17 million to pay out a secured loan, referred to in the materials as the Squadron Loan (the Squadron Loan). In December 2018, Gandel advanced approximately $349,000 to Centennial and Maldon to enable them to pay wages. This loan is referred to in the materials as the Section 560 Loan (the Section 560 Loan). 17 On 7 June 2019, Centennial and Maldon entered into a deed of company arrangement. The parties to this deed of company arrangement were the companies, the Deed Administrators and the proponent, Avior Consulting Pty Ltd (Avior). 18 The administration and deed process were funded by a loan from Mining Lending Pty Ltd (Mining Lending). 19 On 25 June 2019, Gandel commenced this proceeding, seeking: declarations to the effect that it has security over certain of Centennial's assets; and orders setting aside the deed of company arrangement. 20 On 27 September 2019 and again on 20 November 2019, the deed of company arrangement was varied in a manner generally satisfactory to Gandel, producing what I refer to as the Amended DOCA. The terms of the Amended DOCA contemplated, broadly, certain creditors receiving cash in satisfaction of their debts, and certain creditors (including Gandel and Mining Lending) undertaking a debt-for-equity swap to obtain shares in Centennial. All of the shares in Centennial were then to be purchased by the ASX-listed Austar Gold Ltd (Austar) in a transaction described as a merger. The debt-for-equity shareholders of Centennial were to receive shares in Austar, and Austar was to undertake a capital raising to fund the deal. 21 On 10 November 2019, Mr Viv Oldfield notified the Deed Administrators that he was intending to submit an alternative deed of company arrangement for creditors to consider. 22 On 15 November 2019, Mr Oldfield provided a draft alternative deed of company arrangement term sheet, along with an overview letter. 23 At the creditors' meeting on 15 November 2019, creditors considered whether to adjourn the meeting to allow Mr Oldfield to amend and finalise his deed of company arrangement proposal. The creditors decided not to adjourn the creditors' meeting any further. 24 On 5 December 2019, the Deed Administrators and Avior extended the deadline for satisfaction of conditions precedent under the Amended DOCA from 18 December 2019 to 24 January 2020. 25 Also on 5 December 2019, Austar announced a $7.5 million placement and entitlement offer to raise funds for, inter alia, the acquisition of Centennial. 26 In early 2020, Mining Lending's plans changed. On 10 January 2020, Austar entered into an agreement to buy Mining Lending's debt. As a result, Austar withdrew the placement and entitlement offer. 27 On or about 20 January 2020, Austar entered a trading halt. Austar's plans changed again. On 22 January 2020, Austar announced that the acquisition of the Mining Lending debt would not proceed. 28 At some point in January 2020, the Deed Administrators formed the view that the Amended DOCA could not be completed: see the Supplementary Report to Creditors dated 28 January 2020 at [1.4]. 29 On 20 January 2020, Oldfield entered into a loan facility agreement with the Deed Administrators, Centennial and Maldon by which Oldfield agreed to advance up to $3.2 million to discharge the Mining Lending debt and to fund Centennial's and Maldon's operations (the Oldfield Loan Agreement). The Oldfield Loan Agreement provided that Oldfield intended to submit a deed of company arrangement for consideration by the Deed Administrators and, if a resolution to approve that proposal did not obtain a majority of votes, the Oldfield Loan Agreement would immediately be terminated and Centennial and Maldon would have seven days to repay the loan and a 5% "exit fee". 30 On 21 January 2020, Oldfield submitted a deed of company arrangement proposal to the Deed Administrators (referred to as the Oldfield Proposal in these reasons). Pursuant to the Oldfield Proposal, which was described as a "Variation to DOCA", the Deed Administrators were to make an application under s 444GA to enable the transfer of 90% of the issued shares in Centennial to Mr Oldfield or his nominee, with the remaining 10% to be divided among certain other creditors (not including Gandel). 31 Under the Oldfield Proposal, the Oldfield interests were to make up to three contributions into a creditors' trust for distribution to the creditors. The first contribution of $1,859,640 was to be made on a date to be agreed, but no later than 30 days after execution of a deed of company arrangement. The second and third contributions were to be made on 30 June 2021 and 30 June 2022, but only if Centennial met a working capital test on the relevant dates. 32 On 22 January 2020, Oldfield advanced $2.6 million, which was used by the Deed Administrators to repay the Mining Lending debt. 33 The Amended DOCA contains a series of conditions precedent, which were to be satisfied by 18 December 2019, which date was extended to 24 January 2020. Clause 22.1.1 of the Amended DOCA relevantly states: 22.1 This Deed will immediately terminate when any of the following occurs: 22.1.1 the Conditions Precedent are not satisfied or waived on or before 18 December 2019, or such other date as agreed in writing between the Deed Administrators and the Proponent; 34 It is common ground that all of the conditions precedent were not satisfied by the extended deadline of 24 January 2020. There was no agreement in writing between the Deed Administrators and the proponent to further extend that date. 35 After 24 January 2020, the Deed Administrators purported to: (a) consider the Oldfield Proposal; (b) prepare the Supplementary Report to Creditors; and (c) convene the creditors' meeting that took place on 12 February 2020. 36 At the meeting on 12 February 2020, a resolution was put to the meeting that Centennial and Maldon execute the deed of company arrangement proposed by Oldfield. This was passed by a majority in both value and number: (a) in relation to Centennial, 63 creditors with a value of $5,952,246 voted for the resolution and three creditors with a value of $2,983,669 voted against the resolution; and (b) in relation to Maldon, 18 creditors with a value of $414,580 voted for the resolution and one creditor with a value of $69,772 voted against the resolution. 37 A draft deed of company arrangement reflecting the Oldfield Proposal has been prepared (the Oldfield DOCA). Consistently with the undertaking given at the hearing on 11 February 2020, the Deed Administrators have not executed the Oldfield DOCA. The Deed Administrators' undertaking not to execute a deed of company arrangement has been extended to 5.00 pm today (20 February 2020).

The question whether the Amended DOCA has terminated 38 In light of the concession by senior counsel for the Deed Administrators that the Amended DOCA has terminated, it is not necessary to consider this issue in any detail. This concession was, in effect, adopted by counsel for Oldfield. 39 It seems plain on the material that the Amended DOCA has terminated, as the conditions precedent were not satisfied by the extended deadline, namely 24 January 2020. Further, there was no evidence of any agreement in writing between the Deed Administrators and the proponent to extend that date. 40 The question whether it is appropriate to make a declaration that the Amended DOCA has terminated is bound up with the application under ss 447A and 1322(4)(d), which will be considered later in these reasons.

The question whether the Oldfield DOCA would constitute a "variation" within the meaning of s 445A 41 In light of the conclusion that the Amended DOCA has terminated, it is strictly unnecessary to consider this issue. However, I consider it for completeness and because it may be indirectly relevant for the application for orders under ss 447A and 1322(4)(d). 42 Gandel submits that: the creditors' resolution amounts to an attempt, not to vary the Amended DOCA, but to execute a new deed of company arrangement; most importantly, the proponent of the Amended DOCA is not even a party to the purported variation; first principles of contract law hold that there can be no variation if one of the parties to the instrument has not even been involved in the purported variation; the Oldfield DOCA purports to replace Avior as proponent with Oldfield; once the proponent is replaced, the agreement cannot be a variation, it can only be a novation. 43 Gandel also submits that the effect of the Oldfield DOCA is substantially different to that of the Amended DOCA. Gandel submits: (a) First, rather than a merger with a new parent company (Austar) as provided under the Amended DOCA, in which classes of creditors including Gandel would receive shares in Austar, the Oldfield DOCA involves existing shareholders (including Gandel) having their interests in Centennial stripped from them, and the shareholdings distributed to an Oldfield nominee (as to 90%) and one class of secured creditors (Class D, as to 10%). (b) Secondly, under the Oldfield DOCA, creditors other than Class D creditors receive only a limited cash distribution, approximately two-thirds of which is entirely chimerical: it is to be deferred and made contingent on the companies' future working capital position which, in the Deed Administrators' own words, can "easily be manipulated". 44 Gandel also refers to FAI Workers Compensation (NSW) Ltd v Philkor Builders Pty Ltd (No 2) (1996) 21 ACSR 532 (FAI Workers Compensation) at 533, where Young J held that it was incompetent for creditors to use s 445A to "vary" a deed of company arrangement so as to add a new debt to be dealt with by the deed. 45 In my view, the word "variation" as used in s 445A is not limited to its contractual meaning and may include, in an appropriate case, a change by which one proponent is substituted for another. The context includes s 444B(6), which provides for a deed of company arrangement to be executed by both the company and the deed's proposed administrator, but does not refer to the proponent. A broader construction of the word "variation" in s 445A would tend to further the objects of Pt 5.3A: see, for example, Mighty River International Ltd v Hughes (2018) 359 ALR 181 at [1], [4]-[14], [45] per Kiefel CJ and Edelman J; at [58], [61], [66] per Gageler J; at [76]-[77] per Nettle and Gordon JJ. The case relied on by Gandel - FAI Workers Compensation - does not deal in detail with the construction of the word "variation" in s 445A and the factual circumstances in that case were quite different. 46 For these reasons, if and to the extent that it is necessary to decide the issue, I am not satisfied that the Oldfield DOCA would not constitute a "variation" of the Amended DOCA within the meaning of s 445A.

The application for orders under ss 447A and 1322(4)(d) 47 Section 447A provides as follows: 447A General power to make orders (1) The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company. (2) For example, if the Court is satisfied that the administration of a company should end: (a) because the company is solvent; or (b) because provisions of this Part are being abused; or (c) for some other reason; the Court may order under subsection (1) that the administration is to end. (3) An order may be made subject to conditions. (4) An order may be made on the application of: (a) the company; or (b) a creditor of the company; or (c) in the case of a company under administration--the administrator of the company; or (d) in the case of a company that has executed a deed of company arrangement--the deed's administrator; or (e) ASIC; or (f) any other interested person. 48 As to the scope of the power conferred by s 447A, see generally Australian Memory Pty Ltd v Brien (2000) 200 CLR 270 at [17]-[32] per Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ; Deputy Commissioner of Taxation v Portinex Pty Ltd (2000) 156 FLR 453 at [30]-[32] per Austin J; Brandrill Pty Ltd v Newmont Yandal Pty Ltd (2006) 24 ACLC 1,179 at [49]-[50] per Austin J. 49 One relevant consideration, in relation to the making of an order under s 447A, is whether substantial injustice would be caused: see, in the context of an order effectively validating an otherwise invalid appointment, Calabretta v Redpen Developments Pty Ltd (in liq) (2010) 183 FCR 47 at [37] per Yates J, citing McIntosh v CMX Technologies Pty Ltd (2005) 56 ACSR 283 at [32] per Palmer J. 50 Section 1322 provides in part as follows: (4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: … (d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding; and may make such consequential or ancillary orders as the Court thinks fit. … (6) The Court must not make an order under this section unless it is satisfied: … (c) in every case - that no substantial injustice has been or is likely to be caused to any person. 51 The Deed Administrators submit that the Amended DOCA has terminated due to an oversight on their part; and that if the Amended DOCA is not, in effect, extended by the Court, the Deed Administrators may be trespassers on the property of the companies, and the relation-back day would change from the current day (when the companies went into administration) to a date in the future. It is further submitted on behalf of the Deed Administrators, that any complaints Gandel may have as to the fairness or otherwise of the Oldfield DOCA can be agitated in an application to terminate the Oldfield DOCA under s 445D of the Corporations Act. 52 These submissions were, in effect, adopted by counsel for Oldfield. 53 In response, senior counsel for Gandel made detailed submissions as to the unfairness of the Oldfield DOCA. It was also contended that, in its treatment of the Section 560 Loan, the Oldfield DOCA fails to comply with s 444DA(1) of the Corporations Act. 54 I accept the evidence of Mr Tucker to the effect that: it was always the Deed Administrators' intention that the conditions precedent deadline would be extended to 28 February 2020; from 24 January 2020, the Deed Administrators operated on the basis that the Amended DOCA had not terminated; and, other than the filing of Gandel's interlocutory process dated 7 February 2020, Mr Tucker is not aware of any other party taking steps that were predicated on the termination of the Amended DOCA. In effect, the Amended DOCA has terminated due to an oversight on the part of the Deed Administrators. In these circumstances, and having regard to the circumstances generally, I consider the preferable course to be to make orders extending the date for satisfaction of the conditions precedent in the Amended DOCA to 28 February 2020, such that the Amended DOCA remains on foot for that further, limited period of time. I consider this course to be appropriate in light of the significant practical disruption that would be caused to the business operations of the companies, including to the employees of the companies. I consider the making of such an order to reflect the objects of Pt 5.3A, particularly in circumstances where a majority of the creditors (both in number and value) voted in favour of the Oldfield Proposal. 55 While the submissions made on behalf of Gandel have force, all of these can be raised in an application to terminate the Oldfield DOCA under s 445D. Further, if Gandel is successful in its contention that it is a secured creditor in respect of the Squadron Loan, it should be able to enforce its security rights in respect of this loan. In the circumstances, I do not consider the orders to cause substantial prejudice to Gandel. 56 I note also that the Deed Administrators and Oldfield have offered to give the following undertaking: The third to fifth defendants and the interested party undertake to not effectuate the DOCA, being the "effectuation steps" referred to at point 6 of part 4.3.14 of the Report to Creditors dated 28 January 2020, prior to 4.00 pm on 13 March 2020 subject to further order from the Court. 57 Gandel submits that the proposed form of undertaking does not go far enough, as considerable expenditure may be incurred in connection with the actions set out at points 2, 3 and 4 of part 4.3.14 of the report, including making applications to the Supreme Court of Western Australia and the Australian Securities and Investments Commission. However, I consider the undertaking to offer sufficient protection of Gandel's position. 58 In light of these matters, I do not consider the proposed orders under s 447A to cause substantial prejudice to Gandel. 59 Accordingly, I will make orders to the effect sought by the Deed Administrators. It follows that it is not appropriate to make a declaration as sought in paragraph (b)(i) of the further amended originating process. I will discuss the form of orders, and costs, with counsel for the parties. [Discussion ensued in relation to the form of orders and costs.]

Costs 60 Gandel seeks an order for costs in its favour in respect of the questions raised by paragraphs (b)(i) and (c)(i) of the further amended originating process and the Deed Administrators' application under ss 447A and 1322(4)(d). Gandel submits that it should also have its costs of its interlocutory process dated 7 February 2020, as this was largely in aid of the questions raised by paragraphs (b)(i) and (c)(i) of the further amended originating process and these issues have now been finally determined, substantially in its favour. 61 The Deed Administrators oppose these orders for costs. Oldfield submits that there should be no order for costs for or against it. 62 In relation to paragraphs (b)(i) and (c)(i) of the further amended originating process, I consider that Gandel was substantially successful and should have a costs order in its favour. The primary issue was whether the Amended DOCA had terminated. This was the subject of detailed written submissions and affidavit evidence. The issue was only conceded at the hearing on 19 February 2020. The variation issue was of only secondary importance. Thus, I consider that Gandel was substantially successful in relation to paragraphs (b)(i) and (c)(i) and should have its costs paid by the Deed Administrators. I would make no order as to costs as regards to Oldfield. 63 In relation to the Deed Administrators' interlocutory process, I consider that the Deed Administrators were seeking an indulgence and they should pay Gandel's costs. Gandel's opposition was legitimate and appropriate, and does not provide a reason why Gandel should not have its costs. There should be no order as to costs as regards Oldfield. 64 In relation to Gandel's interlocutory process, this was substantially in aid of the relief sought in paragraphs (b)(i) and (c)(i) of the further amended originating process. Those issues have now been determined. It is appropriate that the costs order follow the costs order in relation to the hearing and determination of those parts of the further amended originating process. Accordingly, I consider that the Deed Administrators should pay Gandel's costs of Gandel's interlocutory process (excluding the costs incurred in respect of paragraph 1 of that application). Insofar as there may be costs thrown away by reason of the amendments, I would excise these from the order, and the Deed Administrators should have those costs. There should be no order as to costs as regards Oldfield. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky.

SCHEDULE OF PARTIES VID 688 of 2019 Defendants Fourth Defendant: JOHN ALLAN BUMBAK Fifth Defendant: LEANNE KYLIE CHESSER Sixth Defendant: AVIOR CONSULTING PTY LTD (ACN 155 043 191) Interested Party: V C OLDFIELD INVESTMENTS PTY LIMITED (ACN 149 465 805) AS TRUSTEE FOR THE OLDFIELD FAMILY TRUST NO. 3

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