REASONS FOR JUDGMENT
1 I am satisfied for the reasons contained in the submissions prepared by counsel for the plaintiffs, which I have placed with the papers, that I have power under s 447A of the Corporations Act 2001 (Cth) ('the Act') to make the orders which he seeks. I am also satisfied upon the basis of the cases referred to in those submissions, that to make orders in circumstances such as the present, is not a matter which calls for any special or particular remark. I accept, upon the basis of the evidence, that the committee of creditors have been notified of what is proposed and have expressed no objections to it. I also accept that those persons who might be affected by the limited recourse aspects of the arrangement have consented to their being affected in that way.
2 The proposal is one which has as its objective the preservation of the business of the companies in question on a going concern basis with a view to procuring the ultimate disposition of those businesses for the benefit of creditors. In par 66 of Mr Hayes' affidavit the administrators have expressed an unequivocal opinion that the proposals are necessary and beneficial for the administration of the companies concerned and, absent any indication to the contrary, I propose to act upon that expression of opinion. As the administrators point out, insofar as the proposals involve the raising of further capital and the acquisition of further assets there is minimal commercial risk because of the put and call arrangements which have been entered into with BHP Billiton Iron Ore Pty Limited which would be activated in the event that a sale of the business as a going concern for some reason proved impractical.
3 I therefore make the following orders:
- Pursuant to s 447A of the Corporations Act 2001 (Cth) ('the Act'), that Part 5.3A of the Act is to operate in relation to each of the second plaintiff and the third plaintiff so that:
(a) by entering into the agreements which are identified as:
(i) Master Asset Finance Agreement and each Lease under it for equipment;
(ii) Put and Call Option Deed (Yandi - New Equipment);
(iii) Put and Call Option Deed (Area C - New Equipment);
or agreements substantially to the effect of those documents, identified in the affidavit of Joseph David Hayes sworn on 10 August 2005 whilst the first plaintiffs are administrators of the third plaintiff and the third plaintiff incurring liabilities (whether arising during the administration or after) from the obligations thereunder, the first plaintiffs will, subject to the limitations on the liability of the first plaintiffs contained in those documents, be deemed to incur debts in the performance and exercise of their functions as administrators of the third plaintiff under subs 443A(1) of the Act for property hired, leased, used or occupied (Debts);
(b) by entering into the guarantee of the Master Asset Finance Agreement and each Lease under it for equipment, or agreements substantially to the effect of those documents, identified in the affidavit of Joseph David Hayes sworn on 10 August 2005 whilst the first plaintiffs are administrators of the second plaintiff and the second plaintiff incurring liabilities (whether arising during the administration or after) from the obligations thereunder, the first plaintiffs will, subject to the limitations on the liability of the first plaintiffs contained in those documents, be deemed to incur debts in the performance and exercise of their functions as administrators of the second plaintiffs under subs 443A(1) of the Act (Debts) for property hired, leased, used or occupied; and
(c) by entering into the agreements which are identified as:
(i) Put and Call Option Deed (Yandi - Existing Equipment);
(ii) Put and Call Option Deed (Area C - Existing Equipment),
or agreements substantially to the effect of those documents, identified in the affidavit of Joseph David Hayes sworn on 10 August 2005 whilst the first plaintiffs are administrators of the third plaintiff and the third plaintiff incurring liabilities (whether arising during the administration or after) from the obligations set out in clauses 8.2 to 8.8 (inclusive) of each of those documents, the first plaintiffs will, subject to the limitations on the liability of the first plaintiffs contained in those documents, be deemed to incur debts in the performance and exercise of their functions and powers as administrators of the third plaintiff under subs 443A(1) of the Act (Debts) for property hired, leased, used or occupied; and
(d) notwithstanding paragraphs (a), (b) and (c), if the first plaintiffs' indemnity under s 443D of the Act is insufficient to meet any such Debts, the first plaintiffs will not be liable to pay any such Debts to the extent of that insufficiency.
- The costs of this application be costs in the administration of each of the second and third plaintiffs.
I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.