In the matter of Keybridge Capital Limited (No 2)

Medium Neutral Citation: In the matter of Keybridge Capital Limited (No 2) [2025] NSWSC 354

Hearing dates: 8 April 2025

Date of orders: 14 April 2025

Decision date: 14 April 2025

Jurisdiction: Equity - Corporations List

Before: Nixon J

Decision: 1. Order, pursuant to s 447A of the Corporations Act 2001 (Cth), that the administration of the First Defendant is to end with immediate effect.
2. Direct that:
(a) By 5.00pm on 16 April 2025, the Plaintiffs provide the Defendants with proposed short minutes of order on the issue of costs.
(b) By 5.00pm on 22 April 2025, the Defendants provide the Plaintiffs with proposed short minutes on the issue of costs.
(c) If orders to costs cannot be agreed by the parties, by 5.00pm on 24 April 2025, the parties are to exchange and provide to the Associate to Nixon J the form of orders as to costs which each party proposes, together with any evidence and submissions (limited to 5 pages) in support of those orders, indicating whether an oral hearing is requested to deal with the issues in dispute and if so why.
3. The parties have liberty to apply on two business days’ notice, including the Second Defendant with respect to any application for approval of his remuneration.
(See Addendum for additional orders made.)

Catchwords: CORPORATIONS – voluntary administration – where First Plaintiff is largest shareholder of the First Defendant, which is in administration – where First Plaintiff executed letter of comfort as a deed – where First Plaintiff subsequently provided an executed term sheet, setting out the terms of a proposed bridge funding facility – where the term sheet provides that it is a condition precedent of the facility that financing documentation be entered – where the letter of comfort has been extended to 30 June 2025 or until facility documentation is entered - whether proposed financier has capacity to meet all claims of creditors that are due and payable – whether conditions precedent of facility will be satisfied or waived – whether First Defendant is solvent – whether order should be made ending administration of First Defendant with immediate effect

Legislation Cited: Corporations Act 2001 (Cth) ss 95A, 127, 208, 210, 447A
Civil Procedure Act 2005 (NSW) s 56
ASX Listing Rules Guidance Note 24
ASX Listing Rules Chapter 10 r 10.1.3

Cases Cited: Anchorage Capital Master Offshore Ltd v Sparkes (2023) 111 NSWLR 304; [2023] NSWCA 88
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; [1993] HCA 6
BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton (2011) 82 NSWLR 336; [2011] NSWCA 414
Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607
Chan v First Strategic Development Corporation Ltd (in liq) [2015] QCA 28
Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2017] FCAFC 75
Dwyer and Davies v Chicago Bot Co Pty Ltd [2011] SASC 27
In the matter of IOUpay Limited (admins apptd) [2023] NSWSC 568
In the matter of Keybridge Capital Limited [2025] NSWSC 240
Inspector General in Bankruptcy v Bradshaw [2006] FCA 22
Intel Corporation v Unwired Group Ltd [2008] FCA 1927
Intergen Energy Holdings (Australia) Pty Ltd, Re Intergen Energy Holdings (Australia) Pty Ltd [2017] FCA 445
Lewis (as liquidator of Doran Constructions Pty Limited) v Doran (2005) 54 ACSR 410; [2005] NSWCA 243
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30
Re Ansett Australia Ltd (No 1) (2001) 115 FCR 376; [2001] FCA 1806
Re Custom Bus Australia Pty Ltd (in liq) [2021] NSWSC 1036
Re Keneally (2015) 107 ACSR 172; [2015] NSWSC 937
Re Tweed Garages Ltd [1962] Ch 406
Shaw (as liquidator of ACN 166 338 138 Pty Ltd (In liq) (formerly Structural Projects Pty Ltd) v KPR Recruitment Australia Pty Ltd (No 2) [2017] NSWSC 707
Smith v NSW Bar Association (1992) 176 CLR 256; [1992] HCA 36
Southern Cross Interiors Pty Limited v Deputy Commissioner of Taxation (2001) 39 ACSR 305; [2001] NSWSC 621
Taouk v Louis (No. 1) [2014] NSWSC 656
The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1682
Treloar Constructions Pty Ltd v McMillan (2017) 318 FLR 58; [2017] NSWCA 72
Urban Transport Authority v Nweiser (1992) 28 NSWLR 471
WAM Active Limited v Keybridge Capital Limited (No 2) [2024] NSWSC 1496

Category: Principal judgment

Parties: WAM Active Limited (First Plaintiff)
Geoffrey James Wilson (Second Plaintiff)
Jesse Michael Hamilton (Third Plaintiff)
Martyn McCathie (Fourth Plaintiff)
Keybridge Capital Limited (Administrator Appointed) (First Defendant)
Gideon Isaac Rathner (Second Defendant)
Nicholas Francis John Bolton (Third Defendant)
John Dean Patton (Fourth Defendant)
Frank Antony Catalano (Fifth Defendant)
Richard Michael Dukes (Sixth Defendant)
Sulieman Ahmad Sulieman Ravell (Seventh Defendant)
Yowie Group Limited (Interested Party)

Representation: Counsel:
D Krochmalik with D J Monteith (Plaintiffs)
G Gee (First and Second Defendants)
A T Broadfoot KC with A Byrne (Third, Fourth and Sixth Defendants)
J Burnett (Fifth Defendant)
D S Weinberger (Interested Party)
Solicitors:
Mills Oakley (Plaintiffs)
Tisher Liner FC Law (First and Second Defendants)
Cornwalls (Third, Fourth and Sixth Defendants)
KCL Law (Interested Party)

File Number(s): 2025/00054507

Publication restriction: Nil

JUDGMENT

1. On 21 March 2025, I delivered reasons for judgment in this matter: In the matter of Keybridge Capital Limited [2025] NSWSC 240 (Primary Judgment). This judgment assumes familiarity with, and adopts defined terms from, the Primary Judgment.

2. In the Primary Judgment, I determined that, at the Section 249F Meeting on 10 February 2025, the members of the First Defendant, Keybridge Capital Limited, resolved that:

3. the Third Defendant, Mr Bolton, the Fourth Defendant, Mr Patton, and the Sixth Defendant, Mr Dukes, (the Director Defendants) be removed as directors of Keybridge; and

4. the Second Plaintiff, Mr Wilson, the Third Plaintiff, Mr Hamilton, the Fourth Plaintiff, Mr McCathie, and the Seventh Defendant, Mr Ravell, be appointed as directors of Keybridge.

5. Accordingly, I made a declaration that, following the Section 249F Meeting on 10 February 2025, the directors of Keybridge were the Fifth Defendant, Mr Catalano (who was a director of Keybridge prior to the Section 249F Meeting), Mr Wilson, Mr Hamilton, Mr McCathie and Mr Ravell (the Current Directors).

6. At the hearing on 5-7 March 2025 (the March Hearing), the Plaintiffs tendered: a Letter of Comfort which was dated 12 February 2025 and was executed by the First Plaintiff, WAM Active Limited, as a deed; and a Term Sheet for a proposed bridge funding facility to be offered by WAM or its nominee to Keybridge (the Bridge Funding Facility), which was signed by Mr Hamilton on behalf of WAM and dated 6 March 2025.

7. I determined that, subject to the resolution of the specific outstanding issues which had been raised by the Administrator of Keybridge, Mr Rathner, regarding the Bridge Funding Facility – being issues regarding WAM’s ability to fund the facility and the satisfaction of the condition precedent regarding the composition of the board – this facility “would provide a basis to conclude that Keybridge is solvent and therefore a basis to conclude that the administration should be brought to an end” (Primary Judgment, [371]).

8. I stood over the proceeding for a period of just over a week to allow an opportunity for these outstanding issues to be resolved. In doing so, I stated at [372] of the Primary Judgment that:

“It is in the best interests of creditors and members that Mr Rathner and WAM have an opportunity to communicate regarding the outstanding issues concerning the Term Sheet, given that, if those issues are resolved, the bridging facility proposed in the Term Sheet would provide the means to restore the solvency of Keybridge.”

7. I also indicated that if, following this process, there was an extant issue about WAM’s ability to meet creditors’ claims, or about the satisfaction of the conditions precedent to the Bridge Funding Facility, I would give directions for the resolution of any such remaining dispute (at [373], [375]).

8. As a dispute remained at the end of that period, I then made orders for evidence and submissions to be filed in relation to the issues in dispute, and for the matter to be listed for a further hearing.

9. At the hearing on 8 April 2025 (April Hearing), WAM submitted that, having regard to the Bridge Funding Facility offered by WAM, the Court should determine that Keybridge is solvent and should therefore make an order pursuant to s 447A of the Corporations Act 2001 (Cth) (Act) that the administration of Keybridge is to end with immediate effect.

10. The Administrator confirmed in written submissions in advance of the April Hearing that, from his perspective, there was only one remaining issue as to whether WAM’s proposal will, as a matter of fact, return Keybridge to solvency: namely, that it was a condition precedent of the Bridge Funding Facility that there be further documentation, but that no such documentation had been provided to the Administrator, such that he was not in a position to “provide comfort to the Court” regarding solvency.

11. The Director Defendants opposed an order under s 447A of the Act, as did Yowie Group Limited. Yowie is a creditor of Keybridge and was given leave to appear at the April Hearing. As noted in the Primary Judgment, two of the three directors of Yowie are Mr Bolton and Mr Patton, with Mr Bolton being its Managing Director.

12. In opposing the s 447A order, the Director Defendants and Yowie sought to advance various issues regarding the Bridge Funding Facility additional to those which had been raised by the Administrator at the March Hearing.

13. The Term Sheet has been revised since the March Hearing. However, as outlined below, the revisions are very minor in nature. The current form of the Term Sheet was provided to the Administrator, the Director Defendants and Yowie on 28 March 2025 (the Revised Term Sheet), with an Addendum being issued on 1 April 2025.

Relevant legal principles

14. The only substantive issue remaining for determination (leaving aside costs and the Administrator’s remuneration) is whether an order should be made under section 447A of the Act ending the administration of Keybridge with immediate effect.

15. As set out below, this issue turns on whether or not Keybridge is solvent.

Application of s 447A where company is solvent

16. Section 447A of the Act relevantly provides as follows:

(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; …

the Court may order under subsection (1) that the administration is to end.

17. While s 447A itself confers “plenary powers” on the Court “to do whatever it thinks is just in all the circumstances” (Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607 at 611 per Young J), s 447A(2)(a) expressly provides that the Court has power to end the administration of a company if the Court is satisfied that the company is solvent: Intergen Energy Holdings (Australia) Pty Ltd, Re Intergen Energy Holdings (Australia) Pty Ltd [2017] FCA 445 at [28] (Gleeson J).

18. The Director Defendants submitted that, although s 447A of the Act provides the Court with broad powers, there are important limits to such powers and, in particular, the Court’s power under that provision should be exercised only where it will promote the object of Part 5.3A. This object is set out in s 435A, as follows:

Object of Part

The object of this Part is to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence — results in a better return for the company's creditors and members than would result from an immediate winding up of the company.

19. In support of this proposition, the Director Defendants referred to:

20. the decision of Goldberg J in Re Ansett Australia Ltd (No 1) (2001) 115 FCR 376; [2001] FCA 1806 at [52], where his Honour observed that “any exercise of power under s 447A must be consistent with the object of Pt 5.3A found in s 435A”; and

21. the decision of Black J in Re Keneally (2015) 107 ACSR 172; [2015] NSWSC 937 at [115], where reference was made to the following observation of Campbell JA in BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton (2011) 82 NSWLR 336; [2011] NSWCA 414 at [194]:

“whether it is simply as a limitation that arises as a matter of construction on the scope of the power under s 447A, or whether it is part of the court's obligation to exercise the power under s 447A in a judicial manner, that power cannot properly be used in a way that is foreign to the purpose for which it is inserted in the Corporations Act.”

20. The Director Defendants also referred to the decision of the High Court in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30 at [62]-[63], where it was held that s 447A of the Corporations Law (which was in similar terms to s 447A(1) of the Act) “would not support an order taking away the discretionary powers of the administrators”.

21. The Director Defendants submitted that, having regard to the object of Pt 5.3A of the Act as set out in s 435A, it is necessary to give consideration as to whether ending the administration of Keybridge would maximise the chances of Keybridge continuing in existence. In particular, they submitted that:

22. if a s 447A order is not made, the status quo – with the Administrator conducting the affairs of Keybridge in accordance with Pt 5.3A – will continue, and the Administrator “will continue to seek out an appropriate solution to resolve Keybridge’s insolvency”; and

23. “the default position, in the face of uncertainties and problems with the Revised Term Sheet, should be that the Administrator be permitted to perform and discharge his statutory role”.

24. Similarly, in oral address, Senior Counsel for the Director Defendants put the position as follows:

“…in our submission, your Honour should leave the administration to take its course. You should not be satisfied that the company is solvent, and the creditors should be permitted to choose what happens to the company”.

23. As outlined above, the proposition that that there continues to be a need to “seek out an appropriate solution to resolve Keybridge’s insolvency” and that the administration should therefore “take its course” depends on the anterior proposition that there are “uncertainties and problems with the Revised Term Sheet”, such that the Court would “not be satisfied that the company is solvent”.

24. However, WAM’s application for an order under s 447A is predicated on the Court being satisfied that Keybridge is solvent. WAM did not submit that, if the Court is not so satisfied, an order should be made under s 447A on any other basis.

25. Accordingly, unless the Court is satisfied that Keybridge is solvent, an order under s 447A will not be made, and the administration will continue to take its course.

26. The Director Defendants did not advance any submission as to why, if Keybridge is solvent, an order should not be made under s 447A.

27. Section 447A(2)(a) expressly provides that the power under s 447A(1) may be exercised in such circumstances. Further, the exercise of the power under s 447A(1) to terminate an administration in such circumstances is consistent with the object of Pt 5.3A of the Act as set out in s 435A, namely, “to provide for the business, property and affairs of an insolvent company to be administered” in a way that achieves certain outcomes (emphasis added).

28. This object is not furthered by continuing the administration of a company which is, in fact, solvent. In such circumstances, there is, to adopt the language of the Director Defendants’ submission, no longer any need for the Administrator to “seek out an appropriate solution to resolve Keybridge’s insolvency”.

29. The Administrator put his position as follows in written submissions in advance of the April Hearing:

“If the Court is not satisfied that WAM’s financing proposal (as ultimately amended and presented) is … sufficient to provide the Court with certainty that Keybridge is solvent upon termination of the administration, it is open to the Court not to bring the administration to an end, but rather to allow Mr Rathner the opportunity to convene the second meeting of creditors, to allow the creditors to determine (in accordance with s 439C of the Corporations Act) whether:

(i) to approve the execution of the deed of company arrangement provided by Mr Bolton;

(ii) to resolve that the administration should end (that is, by negotiation and entry into the facility with WAM); or

(iii) that the company be wound up.”

30. Leaving aside the fact that the Act does not make the exercise of the power under s 447A conditional on establishing “certainty” of solvency, this submission implicitly acknowledges the question of whether or not a s 447A order should be made depended on whether or not the solvency of Keybridge is established. This was made explicit in oral address:

“[COUNSEL FOR THE ADMINISTRATOR]: …in my submission there is absent satisfaction of those matters continuing uncertainty as to solvency, such that separate to anything the [Director Defendants] wish to say, this Court should decline the application and permit [the Administrator] to continue to investigate [Keybridge’s] options, prepare his report to creditors, and leave the decision as to how (inaudible) future in its creditors‑‑

HIS HONOUR: If I can be clear on this point. In a sense, this really depends on whether [Keybridge] is solvent or not?

[COUNSEL FOR THE ADMINISTRATOR]: Yes.”

31. Neither the Administrator nor the Director Defendants identified any reason why, if the Court was satisfied as to Keybridge’s solvency, the Court should decline to exercise its power to end the administration. Nor did they seek to explain how prolonging the administration of Keybridge, in circumstances where it has been shown to be solvent, would be consistent with the object set out in s 435A of the Act.

32. It follows that the critical issue for the resolution of the s 447A application is whether or not Keybridge is solvent.

Solvency

33. Section 95A of the Act provides that a company is solvent if, and only if, it is able to pay all its debts as and when they become due and payable; and a company that is not solvent is insolvent.

34. The test in s 95A “is directed to a present inability to pay all debts as and when they become due and payable, including debts that will become payable in the immediate future”: Anchorage Capital Master Offshore Ltd v Sparkes (2023) 111 NSWLR 304; [2023] NSWCA 88 at [235] (Ward P, Brereton JA, Griffiths AJA).

35. Whether a company is able to pay its debts as and when they fall due and payable is a question of fact to be determined objectively and without hindsight in all the circumstances, including the nature of the company’s assets and business, and the Court will have regard to commercial realities in that regard: Re Custom Bus Australia Pty Ltd (in liq*)* [2021] NSWSC 1036 at [34] (Black J) and the cases there cited.

36. A company may at the same time be insolvent and wealthy; it may have its assets locked up in investments not presently realisable but not have the assets available to it to meet its current liabilities: Dwyer and Davies v Chicago Bot Co Pty Ltd [2011] SASC 27 at [16] (Sulan J), citing Re Tweed Garages Ltd [1962] Ch 406 at 410 (Plowman J).

37. In assessing a company’s capacity to pay its debts, the Court should have regard to all of the assets of the company as at the relevant time in order to determine the extent to which those assets were liquid or realisable within a timeframe that would allow each of the debts to be paid as and when they became due. Apart from an assessment of the company’s own assets, regard can also properly be had to funds which the company can borrow, on a secured or unsecured basis, or otherwise obtain from lenders or shareholders and which are, as a matter of commercial reality, available to the company to enable its debts to be paid. The case law recognises that, in determining a company’s solvency, the Court may have regard to the likelihood that it will have funds available to it from sources with which it has no formalised agreement or understanding, including loans from its directors or from third parties, at least if they are not repayable in the short term, and the company's ability to borrow funds can also be taken into account: Re Custom Bus Australia at [35].

38. In considering the company’s financial position as a whole, the Court must have regard to commercial realities. Commercial realities will be relevant in considering what resources are available to the company to meet its liabilities as they fall due, whether resources other than cash are realisable by sale or borrowing upon security, and when such realisations are achievable: (2005) 54 ACSR 410; [2005] NSWCA 243 at [93] per Giles JA (with whom Hodgson and McColl JJA agreed), citing (2001) 53 NSWLR 213; [2001] NSWSC 621 at [54].

Revised Term Sheet and Addendum

40. The Revised Term Sheet has been executed by a director of WAM, Mr Wilson, and WAM’s Company Secretary, Mr Hamilton.

41. Leaving aside changes to the date and the signature block, the only substantive change made by the Revised Term Sheet to the form of the Term Sheet which was before the Court at the March Hearing is an amendment to the provision regarding expiry. Whereas the Term Sheet was expressed to “expire, if not signed by [Keybridge], at 5.00pm on the 5th business day following determination of [this proceeding]”, the Revised Term Sheet is expressed to “expire, if not signed by [Keybridge], at 5.00pm on the 5th business day following any orders made in [this proceeding] to terminate the administration of [Keybridge]” (the Expiry Date).

42. The reason for the amendment is readily apparent. I made findings and declarations in the Primary Judgment regarding a number of the prayers for relief in the Originating Process (but not the application for a s 447A order). In order to avoid any contention that the Primary Judgment constituted a “determination of [this proceeding]” on 21 March 2025 and that the Term Sheet had therefore expired, the Revised Term Sheet makes clear that it is available for acceptance for 5 business days after any s 447A order is made.

43. Otherwise, the Revised Term Sheet is in the same terms as the Term Sheet.

44. I therefore reject the Director Defendants’ contentions that WAM sought impermissibly to reopen its case at the April Hearing in order to advance, via the Revised Term Sheet, a new form of funding proposal which had not been addressed at the March Hearing.

45. The Revised Term Sheet specifies that the “Financer” is WAM “or its nominee”; and that the “Borrower” is Keybridge.

46. The stated “purpose” of the Bridge Funding Facility offered by the Revised Term Sheet is “to provide [Keybridge] with bridge funding pending finalisation of a capital raising”. The term “Capital Raising” is defined as “a pro-rata rights issue or such other capital raising [by Keybridge] reasonably acceptable to the Financier”.

47. The term of the Bridge Funding Facility is the earlier of 30 June 2025 and the close of any Capital Raising by Keybridge (Term). At the end of the Term, Keybridge is required to repay the outstanding balance of the Bridge Funding Facility in full (including any capitalised transaction costs, fees and interest). However, the Revised Term Sheet provides that Keybridge can voluntarily prepay the Bridge Funding Facility, in whole or in part, at any time.

48. The Revised Term Sheet provides that interest is payable at the cash rate from the Reserve Bank of Australia plus 10% per annum. This is, having regard to the current cash rate, a proposed interest rate of around 14% per annum.

“Security First ranking security over all present and after acquired property of [Keybridge].

Keybridge should note that it is the intention of WAM Active that the parties do all things reasonably necessary to obtain any ASX waiver that might be required for … Keybridge to grant security for the Facility Agreement, as contemplated under ASX guidance note 24 at section 84.

Should the ASX decide not to grant such a waiver, the Financier will only take security to the extent permitted by ASX Listing Rule 10.1 with additional security provided by way of a negative pledge.”

55. A section headed “Next Steps” states that Keybridge is required to return a signed copy of the Addendum before the Expiry Date specified in the Revised Term Sheet.

Position of Administrator, Director Defendants and Yowie

56. The Administrator identified four main issues as outstanding following the Primary Judgment:

57. whether WAM (or any related entity it might nominate) had the capacity to provide the funds necessary for Keybridge to meet creditors’ claims;

58. whether the condition precedent relating to “Change of Board” was satisfied or waived;

59. whether regulatory requirements – in particular, regarding approval for the proposed grant of security by Keybridge – could be met; and

60. whether the Administrator (or the Court) could be satisfied as to Keybridge’s solvency in circumstances where the Administrator had not been provided with, or involved in the negotiation of, any proposed long-form facility documentation.

61. I deal with each of these matters below. The Administrator acknowledged, in written submissions filed in advance of the April Hearing, that the first three issues had been resolved to his satisfaction, such that there “only remains one issue as to whether WAM’s proposal will, as a matter of fact, return Keybridge to solvency”, being the fourth issue set out above.

62. At the March Hearing, Senior Counsel for the Director Defendants had submitted that: “it should be for the administrator to determine whether the letter of comfort is of any utility or not”. Subject to that comment, the Director Defendants advanced the following submissions in closing address at the March Hearing in relation to the bridging facility proposed in the Term Sheet:

63. there was no evidence of WAM’s capacity to fund the Bridge Funding Facility, and the Term Sheet was signed only by WAM’s Company Secretary and not by a director of WAM;

64. according to the ASX release following the Spill Meeting, Mr Patton was re-elected as a director at that meeting (and therefore the “Change of Board” condition precedent could not be met); and

65. the Bridge Funding Facility contemplated security over all present and after-acquired property of Keybridge, which would require shareholder approval under ASX Listing Rule 10.1, and “whether or not it would be approved or not [is] simply a matter of speculation”.

66. Senior Counsel for the Director Defendants submitted that, in light of those matters, the proposed Bridge Funding Facility “may be illusory, it may not, but your Honour is not in a position to determine that and it’s really a matter for the administrator”.

67. Despite having submitted that the assessment of the Bridge Funding Facility was “really a matter for the administrator”, and despite the Administrator confirming that he is satisfied that each of the three matters raised by the Director Defendants at the March Hearing has been resolved to his satisfaction, the Director Defendants continue to oppose the s 447A application for an order that the administration end.

“If an application is made to re-open on the basis that new or additional evidence is available, it may be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised.”

65. It has also been said that the Court should not provide a back door method by which unsuccessful litigants can seek to re-open their case by giving an opportunity to reargue them: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303; [1993] HCA 6 (Mason CJ).

66. In Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 at 478, Clarke JA (Mahoney and Meagher JJ agreeing) stated the following general principles in relation to the grant of leave to reopen:

“The principle which should guide the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place. … Where the decision is not made for tactical reasons and is based on a mistaken apprehension of the law or the facts the case is more appropriately to be considered as one in which the application has resulted from an error by counsel.”

67. The categories of case in which the Court may grant leave to re-open were summarised by Kenny J in Inspector General in Bankruptcy v Bradshaw [2006] FCA 22 at [24] as follows (citations omitted):

“The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are (1) fresh evidence …; (2) inadvertent error … ; (3) mistaken apprehension of the facts …; and (4) mistaken apprehension of the law ... In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open …”

68. This summary has been approved on many occasions including, for example, by the Full Court of the Federal Court of Australia (Rares, Murphy and Davies JJ) in Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2017] FCAFC 75 at [169].

69. Although these factors provide useful guidance, ultimately the discretion to permit a party to re-open their case must be exercised having regard to all the circumstances of the case: Taouk v Louis (No. 1) [2014] NSWSC 656 at [11] (Darke J); The Owners – Strata Plan No 74602 v Brookfield Australia Investments Ltd [2015] NSWSC 1682 at [43] (Stevenson J). Those circumstances include the public interest in a just, quick and cheap resolution of the real issues in the proceedings and the need for finality of litigation as reflected in the Civil Procedure Act 2005 (NSW), s 56(1).

70. This matter went to a trial on all issues at the March Hearing. As outlined in the Primary Judgment at [11], WAM served a document headed “Plaintiffs’ issues or contentions”, which identified six issues for determination at this hearing, the last of which was as follows:

“Even if the appointment of the voluntary administrator was valid, the Court should order that the administration is to end under s 447A of the Act.”

71. The parties, including the Director Defendants, led evidence and made written and oral submissions on all issues, including the issue of relief under s 447A of the Act.

72. Given that two of the three directors of Yowie are Mr Bolton and Mr Patton, and given that Mr Bolton is its Managing Director, Yowie was plainly on notice of the March Hearing, the s 447A issue, the evidence filed by the parties, and the submissions made in relation to those matters at the March Hearing. With that knowledge, it chose not to play any part in the March Hearing.

73. That is readily understandable, given that the Administrator has appeared in this proceeding by solicitors and counsel, and has made written and oral submissions on all issues (including the s 447A issue). In his capacity as voluntary administrator of Keybridge, he may be taken to have considered his role and duties including to all creditors of Keybridge. No creditor advanced any submission to the contrary. Instead, as identified above, the Director Defendants (who are now making submissions primarily on the basis that they claim to be creditors) contended at the March Hearing that the Administrator was best placed to evaluate the Bridge Funding Facility. It can readily be inferred that Yowie was of the same view, given that Mr Bolton and Mr Patton together represent a majority of its board.

74. Leaving aside the Bolton DOCA Proposal, none of the Additional Issues is, or was said to be, an issue arising from “(1) fresh evidence …; (2) inadvertent error … ; (3) mistaken apprehension of the facts …; [or] (4) mistaken apprehension of the law” (Bradshaw at [24]). As for the Bolton DOCA Proposal, there was no explanation as to why this proposal was only advanced for the first time around one week after the Primary Judgment, on 30 March 2025, in circumstances where, by that stage, Keybridge had been in administration for nearly two months.

75. Further, this was a matter which was brought on for final hearing on an expedited basis. The consideration of s 447A relief was stood over for a short period of just over a week, in circumstances where the Court had made a finding that, subject to specific issues raised at the March Hearing and identified in the Primary Judgment, the Bridge Funding Facility would be sufficient to restore Keybridge to solvency. The purpose of standing the matter over for a short period was to allow the Administrator and WAM to discuss those specific outstanding issues, following which the Court would determine any dispute in respect of those specific issues.

76. As stated at paragraphs [56]-[57] above, all but one of the specific issues raised by the Administrator have now been resolved to his satisfaction. However, on the return of the matter for the determination of any outstanding dispute in relation to the matters raised the March Hearing, the Director Defendants and Yowie have sought to expand the matters in issue, by raising each of the Additional Issues.

Ability of Financier to fund the facility

81. As noted in the Primary Judgment at [358], the Administrator expressed a concern at the March Hearing that he had not, at that stage, been provided with evidence of WAM’s financial capacity to meet the claims of Keybridge’s creditors.

82. On 27 March 2025, the Administrator sent WAM a list of creditors of Keybridge and stated that creditors’ claims totalling $9,321,599 are presently due and payable. On 2 April 2025, the Administrator sent Mr Bolton the “latest schedule of creditors”, which showed “Claims that are due and payable” in a total amount of $9,323,490.

83. According to the Administrator’s schedule, the largest claim which is due and payable is that of Yowie, being a claim of $6,350,916 (approximately 68% of the total amount due and payable). The next two largest creditors are law firms who were previously retained by Keybridge, namely, Gadens ($725,507) and Baker McKenzie ($317,419), together accounting for another 11% of claims. The remaining creditors include a number of other service providers.

84. In Mr Patton’s affidavits in the Winding Up Proceeding, which were sworn in late 2024 and were tendered in this proceeding at the March Hearing, he deposed that:

85. “Keybridge runs what I would regard as a relatively lean operation, in the sense that it has relatively low overheads and does not generate a large volume of trade debts”;

86. the “annual operating costs of the Company are circa $1-1.2 million per annum, including Board costs, staffing costs, audit fees, ASX fees and regulatory costs”;

87. “Keybridge’s creditors are predominately professional advisers, including legal advisers”; and

88. a number of the creditors which were outstanding (which included, at that time, Baker McKenzie) had not been paid because the relevant debts were disputed.

89. It is not necessary to determine whether each of the creditors recorded in the Administrator’s schedule as having a claim “due and payable” is in fact entitled to be paid the full amount of that claim. If the administration of Keybridge ends, it will be a matter for the Current Directors to determine any such issue.

90. Mr Hamilton gave the following unchallenged evidence:

91. he has not, as yet, been provided with sufficient information to form a view as to the claims of creditors, including whether any of these debts or claims are or should be disputed;

92. that said, if the administration of Keybridge is to end pursuant to a s 447A order, and control of Keybridge is returned to its Current Directors, then subject to Keybridge’s directors satisfying themselves that amounts claimed by Keybridge’s creditors are due and payable in the amounts claimed, it is his intention to ensure that Keybridge pays the debts due to those creditors (and none of the Current Directors has indicated anything to the contrary).

“Based upon announcements made to the ASX, WAM has disclosed sufficient net assets to fund [Keybridge] so that [Keybridge] could meet all creditor’s claims.”

91. However, in the same affidavit, the Administrator stated that he was nonetheless “not able to indicate that WAM’s funding proposal will make the Company solvent” for three reasons, which were as follows:

“i. WAM has not sought to provide or negotiate the transaction documents with me;

ii. WAM has not confirmed whether it will provide the funding, or whether it will nominate a third party. If a third party is nominated, WAM has not provided me with any information to confirm that third party has sufficient net assets to fund [Keybridge] so that [Keybridge] can meet all creditors claims;

iii. WAM has not informed me how it proposes to meet the regulatory requirements that arise for related party transactions involving listed public companies such as [Keybridge], which I understand include the requirement for member approval. I refer in particular to:

1. Sections 208 and 229 of the Corporations Act;

2. ASX Listing Rules 10 and 19; and

3. ASIC Regulatory Guide 76…”

92. I will return to the first and third of these matters below.

93. As regards the second of these matters, Mr Hamilton swore an affidavit on 3 April 2025. Mr Hamilton is both Joint Company Secretary of WAM and Chief Financial Officer of Wilson Asset Management (International) Pty Ltd and its controlled entities, which include WAM, WAM Capital Ltd and WAM Strategic Value Ltd (collectively the Wilson Asset Management Group). In his role as CFO, he oversees all finance and accounting for the Wilson Asset Management Group. Mr Hamilton deposed that it is WAM’s present intention either itself to provide financial accommodation to Keybridge pursuant to the Bridge Funding Facility, or for WAM Capital and/or WAM Strategic Value to do so.

94. As regards WAM Capital:

95. its audited financial statements for the half-year ending 31 December 2024 reported that it had, as at that date, total current assets of $1,810,891,233 and total current liabilities of $94,800,810, with total net assets of $1,882,946,113; and

96. its investment update for February 2025 reported that, as at 31 December 2024, it held 9.9% in cash (approximately $180m).

97. As regards WAM Strategic Value:

98. its audited financial statements for the half-year ending 31 December 2024 reported that it had, as at that date, total current assets of $228,293,525 and total current liabilities of $2,231,929, with total net assets of $230,559,394; and

99. its investment update for February 2025 reported that, as at 31 December 2024, it held 9.0% in cash (approximately $23m).

100. Unsurprisingly, having reviewed this information, the Administrator confirmed, in his written submissions, that each of WAM, WAM Capital and WAM Strategic Value “has sufficient net assets to provide the funding”.

101. The Administrator did, however, raise a concern that WAM had indicated only that its “present intention” was to provide bridge funding through one of these entities, which left it open that another entity may be used (the financial position of which was unknown). The Administrator stated that, if WAM confirmed at the April Hearing that the Bridge Funding Facility would in fact be provided by one of these three entities, then his concern about financial capacity would be addressed. After this query was raised, WAM gave the confirmation requested by the Administrator.

102. One of the Additional Issues which Yowie sought to raise at the April Hearing was whether the provision of the Bridge Funding Facility would be inconsistent with the terms of WAM’s investment strategy.

103. Yowie referred to a prospectus issued by WAM on 6 November 2007, and in particular a part of that document headed “Investment Strategies and Process” which stated that “[t]here will be no single investment strategy adopted for the Company”; and that “[r]elevant strategies may include” those set out in a series of bullet points. Yowie emphasised that the provision of bridging finance was not included in that list of strategies. However, given that this is described as a list of strategies which “may” be implemented, and given the general statement that there will be “no single investment strategy”, the omission is of little consequence.

“The Second Ranger Affidavit suggests that the bridge funding facility would entail a change in investment strategy for [WAM] (or, for completeness, WAM Capital and/or WAM Strategic Value). This is incorrect. Board approvals given by any or all of those entities for the purposes of the bridge funding facility are on a specific exception basis, only, and do not entail a change to investment strategy. Upon execution of long form documents for the bridge funding facility, any and all announcements required under the ASX Listing Rules will be made as usual.”

103. As noted above, Mr Hamilton is Company Secretary of WAM, and the CFO of Wilson Asset Management and its controlled entities. Counsel for Yowie did not put any of the propositions, which it sought to advance in submissions, to Mr Hamilton in cross-examination. I accept Mr Hamilton’s evidence.

Conditions Precedent – Change of Board

104. The Revised Term Sheet states that the following is a condition precedent of the Bridge Funding Facility:

“Messrs Patton and Bolton ceasing to be directors of [Keybridge] and/or any entity that is a subsidiary (as defined under the Corporations Act 2001 (Cth)) of [Keybridge] including, for the avoidance of doubt, including Yowie Group Limited.”

105. In his affidavit of 31 March 2025, Mr Rathner stated that:

“WAM has confirmed that the issue regarding satisfaction of the condition precedent regarding the composition of the board has been addressed…”

106. Specifically, as recorded in Mr Hamilton’s affidavit:

“To the extent necessary, WAM Active is prepared to waive the following terms or conditions of the Revised Term Sheet and Addendum (and any corresponding restrictions in the Letter of Comfort):

a. a condition that Mr Patton is not a director of Keybridge (as set out below, my position is that Mr Patton is not a director of Keybridge but, to the extent of any uncertainty as to that issue, [WAM] is prepared to waive that condition);

b. a condition that each of Mr Patton and Mr Bolton is not a director of [Yowie]…”

107. As set out above, WAM has stated, through Mr Hamilton, that it will waive the conditions precedent that Mr Patton is not a director of Keybridge “to the extent necessary” and “to the extent of any uncertainty as to that issue”. In response to a submission by the Director Defendants that these words were unclear, Counsel for WAM clarified that those words do not mean that there would first need to be a determination (as explained below, in another proceeding) as to whether or not Mr Patton is a director of Keybridge, before it could be determined whether it is “necessary” to waive the condition precedent in respect of Mr Patton. Instead, the words “to the extent necessary” were included because Mr Patton had previously been asked whether he claimed to be a director of Keybridge and had not given an unequivocal answer to that question. WAM confirmed that, to the extent that Mr Patton does maintain any such position, then WAM will waive the condition precedent, without waiting for any such issue to be determined:

“HIS HONOUR: If I could just raise this issue, I don't think you've addressed and it just occurred to me, regarding timing at which funding becomes available. Does that mean that the condition precedent won't be waived if it is necessary until an unknown point in time at which there has been a hearing and determination of whether Mr Patton is a director?

[COUNSEL FOR PLAINTIFFS]: No, we don't say that your Honour. We don't say that at all. If there is any doubt about that‑‑

HIS HONOUR: Well, then in a sense it is going to have to be waived isn't it? If I give the orders you want, the result would be you would have this in place and then there could not be a determination on that issue prior to there being a need to [provide funds].

[COUNSEL FOR PLAINTIFFS]: That's precisely right, your Honour. When we say yes to your Honour's question it would have be waived. It would have to be waived if Mr Patton continues to assert he is a director. He doesn't assert he is a director. One would have thought that would be the beginning and the end of it. There is some ambiguity about all of that, even now. For example, it is not, as your Honour observed my learned friend's submissions, again, they don't ask your Honour to determine that Mr Patton is a director. But if it is now said by my learned friend Mr Broadfoot, Mr Patton says he is a director in [un]quivocal terms. The response to that is, the condition precedent about that will be waived.”

108. One point of common ground is that there is no issue raised for the Court’s determination in this proceeding as to whether Mr Patton was “re-elected” as a director of Keybridge by reason of the resolutions declared to have been passed at the Spill Meeting, in circumstances where I have found that he had been removed as a director at the Section 249F Meeting.

109. The Director Defendants submitted that no case has been pleaded by the Plaintiffs in relation to the Spill Meeting; that Mr Patton would be denied procedural fairness if any such issue were now to be determined in this proceeding; and that there “is no reason for Mr Patton’s status following the Spill Meeting to be rushed to judgment”. In reply, the Plaintiffs confirmed that “there was no ‘oversight’ by the plaintiffs in not seeking relief with respect to the Spill Meeting”, and it is not “necessary for the Court (now) to determine whether Mr Patton is, in fact, a director of Keybridge, which issue should be the subject of a further contested hearing to be listed in due course”.

110. Accordingly, I have not determined any such issue.

111. In any case, it is unnecessary to do so, given that WAM has confirmed that it is prepared to waive the condition, in both the Letter of Comfort and the Term Sheet, that Mr Patton is not a director of Keybridge (insofar as Mr Patton maintains a position to the contrary).

112. The only submission advanced by the Director Defendants as to why, given this waiver, Mr Patton’s status as a director of Keybridge had any continuing relevance was as follows:

“…of the persons who are now directors of Keybridge (albeit with Mr Patton’s status in dispute), Mr Patton is the only director with no relevant association with WAM; and so, accordingly, is likely the only director able to vote, so far as board approval is required, on matters relating to any bridging facility that may be contemplated by the Revised Term Sheet.”

113. This submission depends on the Director Defendants establishing, first, that Mr Patton was validly re-elected as a director of Keybridge at the Spill Meeting; and secondly, that there is some “relevant association” between, on the one hand, WAM and, on the other, each of Mr Ravell and Mr Catalano.

114. The first of these points has been addressed above. I should also briefly note that the Director Defendants submitted in oral address, somewhat faintly, that the Court should proceed on the basis that Mr Catalano is not a director of Keybridge, having regard to the results of the Spill Meeting. This is one of the Additional Issues which I have determined that the Director Defendants should not be permitted to raise at this stage of the proceeding, as it would involve a substantial denial of procedural fairness to Mr Catalano. In particular, I refer to the following matters.

115. The Plaintiffs have sought, from the commencement of the proceeding, a declaration that Mr Catalano is a director of Keybridge. The Director Defendants have never previously disputed (until closing address at the April Hearing) that Mr Catalano is a director of Keybridge.

116. Mr Catalano has filed a submitting appearance in this proceeding, in circumstances where he has not at any stage been notified that any issue regarding his status as a director is raised in this proceeding.

117. Counsel for Mr Catalano appeared at the commencement of the April Hearing in order to apply to set aside a Notice to Produce issued to his client, and indicated that his client otherwise maintained his submitting appearance. Following this argument, he was excused from further attendance. Counsel was not informed, prior to withdrawing, that the Director Defendants intended to raise, at that hearing, an allegation that his client was not a director of Keybridge.

118. Accordingly, Mr Catalano has not been given any opportunity to address, by evidence or submissions, any such allegation.

119. The Director Defendants themselves submitted that there is no pleading directed at the Spill Meeting, there is an absence of evidence concerning the Spill Meeting, and it may be that there are “additional potential proper and necessary parties, yet to be joined” in respect of any issue concerning the Spill Meeting, such that the “the defendants” (which would include Mr Catalano) have not yet been “afforded as [a] matter of procedural fairness, the opportunity of … responding to that case”.

120. Similarly, the second matter, concerning the existence of a “relevant association” between WAM and each of Mr Catalano and Mr Ravell, is one of the Additional Issues, in respect of which I have determined that leave to re-open should not be granted. To allow such an issue to be raised at this stage of the proceeding would result in a substantial denial of procedural fairness to Mr Catalano and Mr Ravell.

“Two of Keybridge’s current directors, Messrs Catalano and Ravell, are independent of WAM Active in that they are not directors, officers, executives, employees, associates or related parties of WAM Active, Wilson Asset Management (or any of the companies in the Wilson Asset Management Group).”

123. For those reasons, I have concluded that it is not open to the Director Defendants to advance, at this stage of the proceeding, any attack on the independence of either Mr Catalano or Mr Ravell.

124. Finally, I should note that, even if I had been persuaded that it were open to the Director Defendants to raise, at this stage of the proceeding, allegations that Mr Catalano and Mr Ravell were incapable of acting independently in the discharge of their duties to Keybridge, the matters advanced by the Director Defendants in their submissions would not have provided any basis for such a finding.

125. So far as Mr Catalano is concerned, the fact that he has a claim against Keybridge, or Keybridge has a claim against him, does not provide a reason why, on an unrelated matter (namely, the terms of financing to be provided by WAM, WAM Capital or WAM Strategic Value), he would not be able to properly discharge his duties. As noted in the Primary Judgment (at [194]-[195]), the issue in respect of ACM was first raised around twelve months ago, but none of the Director Defendants expressed any concern that it affected Mr Catalano’s ability to discharge his duties as a director of Keybridge (until the point in time when he indicated that he would vote in favour of their removal as directors).

126. So far as Mr Ravell is concerned, the emails on which the Director Defendants relied indicated that Mr Ravell was asking questions prior to his appointment as a director of Keybridge with a view to ensuring that, for example, the company’s books and records and its assets were secured. That is entirely consistent with the proper discharge of his duties.

Regulatory requirements

127. As set out above, the Administrator raised a concern in his 31 March 2025 affidavit regarding “regulatory requirements that arise for related party transactions” (see paragraph [91] above).

128. The Plaintiffs contended that this was a new issue, beyond those which had been raised at the March Hearing.

129. In the Primary Judgment, I did not mention this as an issue which had been raised by the Defendants in relation to the Bridge Funding Facility. However, I accept that, as the Director Defendants pointed out, they did advance the following submission at the March Hearing (which was not otherwise developed):

“[The Term Sheet] contemplates security over all present and future acquired property of [Keybridge]. Now, the way we read the ASX listing rules and [specifically] r 10.1, we think that that grant of security would require shareholder approval in respect of this being a related party transaction, and WAM couldn't vote in the approval process. So whether or not it would be approved or not [is] simply a matter of speculation. Really we think at the moment it may be illusory, it may not, but your Honour is not in a position to determine that and it's really a matter for the administrator.”

130. In oral address at the April Hearing, the Administrator outlined the issue in respect of shareholder approval as follows.

131. ASX Listing Rule 10.1.3 provides, relevantly, that an entity must not “dispose of a substantial asset” to a “person who is a substantial (10%+) holder in the entity” without “the approval of the holders of the entity’s ordinary securities”.

132. Paragraph 3.4 of ASX Listing Rules Guidance Note 24 states that:

“…granting a mortgage, charge or other security interest over an asset is treated as a disposal of that asset for the purposes of Listing Rule 10.1, even where it is given in support of a bona fide loan on arm’s length terms”.

133. An asset is “substantial” if its value is 5% or more of the equity interests of the entity, as set out in the latest accounts given to the ASX under the Listing Rules: ASX Listing Rule 10.2. According to Keybridge’s (latest) financial statements for the financial year ending 30 June 2024, Keybridge had total equity at that date in the amount of $11,430,538, such that the 5% threshold is $571,526.

134. On this basis, the Administrator contended (and the Plaintiffs did not, in their submissions, dispute) that shareholder approval would be required for the granting of any security above that threshold.

135. As noted above, the Administrator also raised in his affidavit an issue regarding the application of s 208 of the Act. In written submissions, Yowie advanced the following contention regarding the operation of this provision:

“WAM and related entities hold 44.05% of the ordinary shares on issue in Keybridge, require first ranking security over all of Keybridge’s property and are giving and receiving a financial benefit to and from a related party. As such, shareholder approval by members of Keybridge and WAM may be required: ss 208 and 229 Corporations Act.”

136. After the Administrator raised his concerns about ASX Listing Rule 10.1 and s 208 of the Act in his affidavit of 31 March 2025:

137. WAM issued the Addendum, which clarifies that WAM intends to seek an ASX waiver for Keybridge to grant security over its present and after acquired property, but that, should such a waiver not be granted, WAM will only take security over Keybridge’s assets to the extent permitted by ASX Listing Rule 10.1; and

138. Mr Hamilton swore his affidavit of 3 April 2025, in which he stated that the Independent Subcommittee of the Keybridge board comprising Mr Catalano and Mr Ravell would be appointed to negotiate and finalise the terms of the Bridge Funding Facility, in order to ensure the application of the arm’s length exception (in s 210 of the Act) to the need for member approval (in s 208 of the Act).

139. Having reviewed this material, the Administrator confirmed in his written submissions that his concerns in relation to the need for shareholder approval of the Bridge Funding Facility “have been addressed”.

140. However, in oral address, Counsel for the Administrator raised one further matter which was said to be a matter of “timing”. He noted that, according to guidance material issued by the ASX, any application for a waiver in respect of the need for shareholder approval for the giving of security would be a “non-standard” waiver application, and that the ASX aims to respond to such applications within 20 business days. This was said to give rise to a concern as to whether, if an order to end the administration was made, there would be funding available under the Bridge Funding Facility to fund those debts which are due and payable in the period of five weeks or so following such an order (that is, while any application for a waiver is being addressed by the ASX).

141. I do not accept the submission that any such “timing” issue arises, having regard to the terms of the Letter of Comfort, the Revised Term Sheet and the Addendum.

142. First, as I will address below, the Letter of Comfort is already in place and binding on WAM, and would apply until any long-form documentation in respect of the Bridge Funding Facility is executed. Pursuant to the Letter of Comfort, WAM is obliged to provide funding to Keybridge in response to any written request from Keybridge for a loan on the basis that is “unable to pay a debt or liability … from its own moneys”. In particular, WAM “agrees to provide the Requested Amount in cash to [Keybridge] by way of, at [WAM’s] election, a secured or unsecured loan or equity amount within 15 Sydney business days of the Request”.

143. Counsel for WAM stated that, if there was no waiver at the time when such a request was made, any such advance of funds “would have to be … on an unsecured basis”.

144. Secondly, so far as the Revised Term Sheet and Addendum are concerned, neither the making nor the determination of a waiver application is a condition precedent to the Financier’s obligation to advance funds pursuant to the Bridge Funding Facility. Mr Hamilton stated in unequivocal terms, in an affidavit that was authorised by and filed by WAM, that WAM “will not require security for the proposed funding if it is not permitted by ASX Listing rule 10.1”. As Counsel for WAM stated, the effect of the Revised Term Sheet and Addendum is as follows: “in so far as a waiver is obtained, the security will be provided, and if it’s not then there will be no security”.

“In my experience, as a financial executive with over 17 years experience in financial services, an interest rate of 14% per annum for a corporate loan extended is commercially reasonable and on arms length terms, particularly where:

a. [WAM] is willing to waive any requirement for security to the extent necessary for compliance with ASX Listing Rules;

b. Keybridge is currently in administration and [WAM] has not had access to all proofs of debt (and supporting evidence) lodged in the administration; and

c. It appears that Keybridge may be insolvent but for the [Bridge Funding Facility] offered by [WAM].”

147. Further, Mr Hamilton stated that WAM was willing to reduce the interest rate to 12% per annum in the event that this was requested by Mr Catalano and Mr Ravell in their capacity as members of the Independent Subcommittee. This would bring the interest rate into line with the interest rate charged under the indemnity arrangement that is in place between Yowie and Keybridge, which forms part of the basis of Yowie’s claim as a creditor. Mr Bolton and Mr Patton were, at all relevant times when that agreement was entered and funds were advanced, directors of each of Yowie and Keybridge. Neither Yowie nor Keybridge sought shareholder approval on the basis that the interest rate was not an arm’s length rate.

Long-form documentation

148. In his submissions filed in advance of the April Hearing, the Administrator stated that “[t]here remains only one issue as to whether WAM’s proposal will, as a matter of fact, return Keybridge to solvency”. This concern was put as follows:

149. the Administrator has offered, on a number of occasions, “to consider any proposed final terms”, which would have “allowed [him] to provide comfort to the Court that Keybridge was solvent”;

150. WAM has “elected not to avail itself of that opportunity”, having “determined that the appropriate course is not to negotiate the terms of the facilities with [the Administrator]”, but rather to await a s 447A order and then to rely upon the Independent Subcommittee to conduct those negotiations; and

151. “There is no certainty that such negotiations will lead to a concluded agreement”.

152. For the reasons given below, I do not consider that the Administrator needs to be involved in the drafting of the long-form documentation, or that this documentation needs to be executed (or ready to be executed) before the Court is able to form a view as to solvency.

Role of Administrator in negotiations

150. The Plaintiffs contended that the Administrator did not indicate, at the March Hearing, that he would be unable to form a view on solvency until the long-form documentation was prepared, and that the Administrator should not be permitted to “re-open” to raise this issue. In contrast, the Director Defendants contended that the Court had determined, in the Primary Judgment, that the long-form documentation should be negotiated between the Administrator and WAM, and that WAM should not be permitted to “re-open” to propose some new arrangement, whereby the documentation would be negotiated between WAM and the Independent Subcommittee of Keybridge.

151. I did not make any determination in the Primary Judgment that the Administrator should negotiate or execute the terms of the long-form documentation on behalf of Keybridge. Accordingly, the Plaintiffs are not “re-opening” by proposing that the documentation be negotiated between WAM and the members of the Independent Subcommittee.

152. At the same time, I accept that Counsel for the Administrator did submit, at the March Hearing, that “if WAM can satisfy your Honour as to their capacity to pay creditor’s claims, then this is the sort of offer [the Administrator] could document with WAM” (see Primary Judgment [358]). This submission contemplated that the Administrator would have a role in “documenting” the Bridge Funding Facility, such that I do not consider the Administrator to be “re-opening” his case by raising a similar concern at the April Hearing.

153. Mr Hamilton explained that the reasons why WAM has not negotiated, and does not intend to negotiate, this documentation with the Administrator are as follows:

“a. [WAM] believes that the independent sub-committee referred to above is best placed to negotiate and finalise the bridge funding long form documentation;

b. while I consider that these documents suite [sic] can be prepared and settled in a short space of time, involving Mr Rathner in any discussions is likely to delay the process, prolong the administration of Keybridge, and incur greater costs (including remuneration of Mr Rathner) than necessary, which costs would ultimately have to be borne by Keybridge;

c. the long form documentation delivers the detailed mechanics for implementation of the key terms and conditions of the bridge funding as contemplated in the Revised Term Sheet and its Addendum, rather than being inconsistent with the Revised Term Sheet and its Addendum; and

d. the Letter of Comfort is in place in the interim.”

154. I accept the Plaintiffs’ submission that there is good reason for the Administrator not to be involved in the negotiation of the long-form documentation.

155. First, any such involvement would result in costs being incurred in the administration. That would be acceptable if those costs were reasonably necessary. However, there is no reason to conclude that the Administrator is better placed than the members of the proposed Independent Subcommittee (namely, Mr Catalano and Mr Ravell) to negotiate these documents on behalf of Keybridge.

156. According to the notice issued for the Section 249F Meeting, Mr Ravell “has over 25 years’ experience in the financial services industry”, with his roles including being a director of Benjamin Hornigold Ltd and a representative director and responsible manager of NW Advice Pty Ltd and Wealth Focus Pty Ltd. According to Keybridge’s financial statements for the year ended 30 June 2024 (which were approved by the Director Defendants), Mr Catalano is the former Managing Director of Domain Holdings Australia Pty Ltd and is presently the Executive Chairman of Australian Community Media, a major regional media company.

157. Secondly, whereas I have rejected the Director Defendants’ attacks on the independence of Mr Catalano and Mr Ravell, I have determined that Mr Rathner is, by reason of his dealings with Keybridge in his capacity as liquidator of the PR Group Companies, in a position of conflict (see Primary Judgment, [303]-[327] and [332]).

158. For example, a significant part of Yowie’s total claim against Keybridge is an amount of $1,666,449.27 said to be owing pursuant to an indemnity agreement with Keybridge (the Indemnity Agreement). The recitals to that agreement record that:

“[Yowie] advanced the sum of $1,500,707.03 (the Indemnified Amount) to liquidator Gideon Rathner in his capacity as liquidator of Australian Money Exchange Pty Ltd (in Liq) and PR Finance Group Limited (in Liq) for the purpose of paying funds into the Supreme Court of Victoria as a means of security for costs in relation to proceedings S ECI 2019 02922 (the Proceedings) in the Supreme Court of Victoria in accordance with orders made by Justice Delany on 17 April 2024”

159. Yowie has lodged a proof of debt with Mr Rathner in his capacity as Administrator of Keybridge, claiming that Keybridge owes Yowie, pursuant to the Indemnity Agreement, the amount which Yowie advanced to Mr Rathner in his capacity as liquidator of the PR Group Companies. (It should be noted that at the March Hearing, Yowie’s managing director, Mr Bolton, expressly denied that Yowie had advanced any such sum to Mr Rathner as liquidator of the PR Group Companies: see Primary Judgment at [322]-[324].)

160. On 27 March 2025, Mr Ranger of Yowie sent an email to the Administrator which referred to the Indemnity Agreement and continued as follows:

“Under that agreement, [Keybridge] agreed to cover any losses Yowie might suffer from providing $1,500,707,03 to you in your capacity as liquidator of Australian Money Exchange Pty Ltd and PR Finance Group Ltd, for the purpose of providing court-ordered security for costs in proceeding S ECI 2019 02922 in the Supreme Court of Victoria.

These funds have not been returned to Yowie within the requisite 4 months, and no compensation has been provided. As a result, Yowie has suffered a loss.”

161. It follows that Yowie has made a claim to Mr Rathner in his capacity as Administrator of Keybridge, seeking that Keybridge indemnify it for “a loss” which it has “suffered” as a result of having “advanced” over $1.5m to Mr Rathner is his capacity as liquidator of the PR Group Companies which has not been “returned to Yowie”.

Lack of “certainty” that documentation will be entered

162. It is a condition precedent to the Bridge Funding Facility set out in the Revised Term Sheet that “Finance Documents are completed in a form satisfactory to all parties”. The Revised Term Sheet specifies that this condition may be waived by the Financier.

163. As noted above, the Administrator submitted that there is “no certainty” that the negotiations which will take place following any s 447A order will lead to a concluded agreement, and therefore no “certainty” that Keybridge will be solvent if such an order is made.

164. While the Administrator focussed on the lack of “certainty”, the Director Defendants submitted that, because the Bridge Funding Facility in the Revised Term Sheet is conditional upon documentation which is yet to be negotiated, it “has the distinct feel of a chimera; with creditors and members left exposed, and the risk of the administration of justice being embarrassed”.

165. The power to end an administration under s 447A is not conditioned upon “certainty” of solvency. The power is enlivened in circumstances where the Court is satisfied on the balance of probabilities, having regard to all of the available evidence, that the company is in fact solvent.

166. As set out above, it is necessary, when assessing solvency, to have regard to the “commercial realities”, including the commercial realities so far as concerns the ability of the company to borrow funds to meet its liabilities as they fall due (Doran Constructions at [93]). In determining solvency, the Court may have regard to the likelihood that the company will have funds available to it from sources with which it has no formalised agreement, including loans from related parties (Re Custom Bus Australia at [35]). That is particularly so where there is cogent evidence establishing a degree of commitment from the related entity to the continuance of financial support for the company (Treloar at [142]).

167. In the present case, the commercial realities include the following matters.

168. WAM and its associated entities hold approximately 43.5% of the shares in Keybridge.

169. WAM has for a long time been dissatisfied with the management of Keybridge, and has undertaken a hard-fought and expensive fight to get the Current Directors appointed to the board of Keybridge.

170. In addition, WAM has sought, in this proceeding, to set aside the appointment of the Administrator or otherwise to have the administration terminated with immediate effect, so that the management of Keybridge is returned to the Current Directors.

171. One of the Current Directors is Mr Wilson, who is the Chairman of each of WAM and Wilson Asset Management, and the Chief Investment Officer of Wilson Asset Management. Another is Mr Hamilton, who is the Chief Financial Officer of Wilson Asset Management.

“the Court can adopt the course of making an order (now) that the administration end (together with an order empowering the directors of Keybridge to executed the proposed loan agreements), but that the orders take effect when the agreement is executed (and that an affidavit be filed with the Court within, say, four business days of the orders confirming that this has occurred).”

172. An order under s 447A(1) of the Act – including an order that the administration of a company should end because the company is solvent – “may be made subject to conditions”: s 447A(3).

173. The “fall-back” course proposed by the Plaintiffs was adopted by the Court in In the matter of IOUpay Limited (admins apptd*)* [2023] NSWSC 568 (Williams J).

174. However, there is a significant difference between that case and this one. In IOUpay, there was no binding documentation in place at the time the s 447A order was sought and was made (conditional upon such documentation being executed). In the present case, the Letter of Comfort is already in place.

Funding under the Letter of Comfort

175. On 12 February 2025, the board of WAM approved entry into the Letter of Comfort, subject to final approval of its terms by Mr Wilson. On the same day, the Letter of Comfort was executed by Mr Wilson and Mr Hamilton on behalf of WAM, pursuant to s 127 of the Act.

176. The Letter of Comfort is expressed to be “executed as a deed”. It states as follows:

“This Letter of Comfort is binding on WAM Active upon delivery of this Letter of Comfort to [Keybridge] by email. It is not necessary for [Keybridge] to accept this Letter of Comfort in order for it to be binding on WAM Active, subject to the restrictions below.”

177. On 3 April 2025, WAM notified Keybridge under clause 3.1 of the Letter of Comfort that, for the avoidance of doubt, the term of the Letter of Comfort is extended until the earlier of 30 June 2025 and the date that the long-form documents for the Bridge Funding Facility are executed by the parties.

178. Accordingly, in the event that Keybridge and WAM are not able to negotiate any long-form documentation prior to 30 June 2025 (being the end of the Term specified in the Revised Term Sheet), the Letter of Comfort will remain in place and binding on WAM for the whole of that period.

179. The provision of funding under the Letter of Comfort is subject to a number of “restrictions”, including the following:

“3.2 This Letter of Comfort will only be binding on WAM Active if, and only if:

(a) Mr John Patton, Mr Nicholas Bolton and Mr Richard Dukes have been removed as directors of the Company;

(b) the Proposed Directors are directors of Keybridge (New Directors); and

(c) the New Directors comprise a majority of the Board of the Company.

3.3 The Letter of Comfort:

(a) will cease to be binding on WAM Active if the New Directors cease to comprise a majority of the Board of the Company; and

(b) is not binding on WAM Active if:

(i) the Company is placed or remains under any insolvency administration, including a voluntary administration under Part 5.3 of the Corporations Act; and/or

(ii) either or both of Mr Nicholas Bolton and Mr John Patton are directors of the Company at any time.”

180. Mr Hamilton confirmed, in his affidavit of 3 April 2025, that WAM is prepared to waive the following restrictions in the Letter of Comfort:

“a. a condition that Mr Patton is not a director of Keybridge … ;

b. a condition that each of Mr Patton and Mr Bolton is not a director of [Yowie]…”

181. Accordingly, the conditions in paragraphs 3.2 and 3.3 of the Letter of Comfort regarding the composition of the board either have been satisfied or will be waived (in the event that Mr Patton asserts that he is a director of Keybridge), and the condition regarding Keybridge not being in administration will be satisfied if a s 447A order is made.

182. The Letter of Comfort is expressed to be “for the purpose of giving comfort to the [Current Directors] that [Keybridge] is not insolvent or likely to become insolvent”. It states as follows:

“2.1 Subject to the restrictions in Section 3 of this Letter of Comfort, if at any time during the term of this Comfort Letter, the Company notifies WAM Active in writing (Request) that it requires an amount of equity or shareholder loans from WAM Active (Requested Amount) because it is unable or likely to be unable to pay a debt or liability of the Company from its own moneys, then WAM Active agrees to provide that Requested Amount in cash to the Company by way of, at WAM Active’s election, a secured or unsecured loan or equity amount within 15 Sydney business days of the Request.

2.2 The parties agree that the Company may Request WAM Active to provide a Requested Amount more than once during the term of this Comfort Letter.”

183. Counsel for WAM stated that WAM has, by the Letter of Comfort, provided “an unconditional undertaking on behalf of WAM not conditional on the entry into of long form finance documents, that, as it provides for in clause 2.1, WAM Active agrees to provide the requested amount in cash to Keybridge within 15 business days of the request”.

184. The Administrator repeated, at the April Hearing, a concern which he had raised at the March Hearing, namely, that the “terms of any advance [under the Letter of Comfort] are not provided”. In particular, he noted that there is no statement of the “price” at which finance will be provided.

185. In response, Counsel for WAM accepted that the Letter of Comfort “doesn’t specify any interest”, but submitted that it was nonetheless binding. He stated that, if a request is made by Keybridge under the Letter of Comfort, then the funds have to be advanced by WAM to meet that request, and “if there’s no specification of interest then there is no interest”.

186. A deed poll is subject to the same principles of construction as any ordinary contract. In particular, it is to be construed objectively, without reference to the subjective understanding of the party who executed it. In Intel Corporation v Unwired Group Ltd [2008] FCA 1927 at [32], Rares J observed that:

“The deed poll is not, in itself, a contract between legal persons. But it is a commercial document intended to be the foundation of a contractual relationship embodied in the notes when issued. The ordinary principles of construction of contracts should be applied to the provisions of the deed poll, as well as to the transaction overall. These principles require the rights of the parties to be determined objectively, without reference to their subjective beliefs or understandings about what rights or liabilities would govern their relationship. What matters is what each party, by words and conduct, would have led a reasonable person in the position of the other party to believe. In this context, the role of the Court is to ascertain the common intention of the parties in the commercial matrix in which they contracted. This process involves discerning, in context, what a reasonable person would understand from the language in which the parties expressed their agreement, having regard to the objective surrounding circumstances with the purpose and the object of a transaction: Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at 179 [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ. The commercial purpose of a contract is, in essence, the purpose attributable to a reasonable person in the position of the parties who is aware of what was known at the time to both of them about the genesis of the transaction, its background, context and the market in which they were operating.”

187. It is necessary to interpret the Letter of Comfort having regard to the contents of the Revised Term Sheet.

188. When the Term Sheet was tendered, Senior Counsel for WAM described it as “a term sheet in connection with WAM Active’s letter of comfort”. The Revised Term Sheet (like the Term Sheet) commences with the following statement:

“Further to the comfort letter [WAM] provided to [Keybridge] on 12 February 2025, this term sheet sets out the terms upon which funding will be provided (Bridge Funding Facility) for the purpose of giving comfort to the New Directors that Keybridge is not insolvent or likely to become insolvent.”

189. That is a statement, in terms, that the Letter of Comfort is to be read together with the Revised Term Sheet, and that the Revised Term Sheet “sets out the terms upon which funding will be provided … for the purpose of giving comfort”.

190. The objective intention of the Letter of Comfort, when read with the Revised Term Sheet (as clarified by the Addendum), is as follows:

191. the Letter of Comfort is binding on WAM, without any further step from Keybridge;

192. the term of the Letter of Comfort is from its execution by WAM until the execution of long-form documentation to give effect to the Revised Term Sheet, or otherwise until 30 June 2025;

193. Keybridge may, at any time during the term of the Letter of Comfort, provide a written request to WAM that it requires an amount of equity or shareholder loans from WAM (Requested Amount) because it is unable or likely to be unable to pay a debt or liability of Keybridge from its own moneys;

194. upon receipt of such any such request, WAM agrees to provide the Requested Amount in cash to Keybridge within 15 business days, subject to the restrictions in paragraph 3 of the Letter of Comfort;

195. pursuant to the Letter of Comfort, WAM has an election to provide the Requested Amount by way of a secured or unsecured loan or an equity amount;

196. WAM has, by the Revised Term Sheet (which is expressly given in furtherance of the Letter of Comfort, and for the purpose of giving comfort to the Current Directors that Keybridge is solvent), elected that it will provide any Requested Amount under the Letter of Comfort on the terms set out in the Revised Term Sheet (as clarified by the Addendum), including that:

(a) such funds will be advanced at an interest rate of 14.1% per annum; (b) WAM will not require security in respect of such funds except to the extent permitted by the ASX Listing Rules, unless and until it obtains a waiver in respect of any requirement under those Rules for shareholder approval; and (c) funds will not be repayable until the completion of any Capital Raising pursuant to the Revised Term Sheet, or otherwise 30 June 2025.

191. The Revised Term Sheet is open for acceptance by Keybridge for a period of five days from the making of an order ending the administration. There is no reason to doubt that the Revised Term Sheet would be executed immediately upon such an order being made. No one advanced any submission to the contrary.

192. I should briefly note a submission which was advanced by the Director Defendants in relation to the “Expiry Date” specified in the Revised Term Sheet (which is defined as the fifth business day after any s 447A order is made). The Director Defendants submitted that there was a risk that the long-form documentation would not be executed by the Expiry Date, and that, if this occurred, the Bridge Funding Facility would cease to be available. That is incorrect. There is no requirement in the Revised Term Sheet for the long-form documentation to be executed by the Expiry Date. Provided that the Revised Term Sheet itself is executed by that date, it will come into effect (albeit subject to the condition precedent, which may be waived by WAM, that long-form documentation be executed). Until such long-form documentation is executed, the Letter of Comfort remains binding and in effect.

193. Accordingly, even if there were to be some unanticipated problem with the execution of long-form documentation to give effect to the Revised Term Sheet (which I consider to be a remote risk, having regard to the commercial realities), the Letter of Comfort would remain in place through to 30 June 2025, would remain binding on WAM, and would require WAM to provide funding to Keybridge in order to meet its debts and liabilities.

Restriction in the Letter of Comfort regarding claims by Director Defendants

194. As noted above, the provision of funding under the Letter of Comfort is subject to the restrictions in Section 3 of the Letter of Comfort. I have explained that, so far as this section contains conditions concerning the composition of the board of Keybridge or the termination of the administration, all such conditions have been (or will be) satisfied or waived, provided that the s 447A order is made.

195. However, there is one further restriction which requires consideration, which is in the following terms:

“3.4 The Letter of Comfort is not binding on WAM Active if a Request is in relation to a request or demand from Mr John Patton, Mr Nicholas Bolton and/or Mr Richard Dukes in connection with costs incurred or expected to be incurred by any or all of them, including in any of them defending ‘Relevant Proceedings’ as contemplated under clause 3.3 or clause 3.5 of the Directors Deed between [Keybridge] and Mr Bolton signed on or around 28 December 2011, or any comparable document or agreement between [Keybridge] and any or all of Mr John Patton, Mr Nicholas Bolton and/or Mr Richard Dukes.”

196. The Director Defendants and Yowie submitted that, given the terms of this carve-out and the fact that substantial debts were due and payable to the Director Defendants under their respective deeds of indemnity, the Court could not be satisfied that Keybridge is able to pay its debts as and when they fall due. The Administrator did not advance any such submission. This is one of the “Additional Issues” which the Director Defendants and Yowie sought to raise at the April Hearing. For reasons set out below, I do not consider that this issue has any substance.

197. First, this carve-out is found only in the Letter of Comfort. The Revised Term Sheet does not include any such carve-out. Upon the execution of the long-form documentation, which is likely to occur within a short period after the execution of the Revised Term Sheet, the Letter of Comfort (and therefore this carve-out) would cease to have any operation.

198. The Director Defendants contended for a different interpretation of the Revised Term Sheet. In particular, they contended that because the Revised Term Sheet is in “furtherance” of the Letter of Comfort, it would pick up the restrictions in the Letter of Comfort. I do not accept this submission. I consider that the proper interpretation of the Revised Term Sheet being “further to” to the Letter of Comfort is that:

199. until the execution of the long-form documentation, WAM agrees to provide funding in accordance with the Letter of Comfort on the terms set out in the Revised Term Sheet (subject to the restrictions in paragraph 3 of the Letter of Comfort, including the carve-out regarding claims by any Director Defendant under a deed of indemnity); and

200. on execution of the long-form documentation, WAM agrees to provide funding in accordance with the terms of the Revised Term Sheet (which does not include any such carve-out).

201. This was expressly acknowledged by Counsel for WAM in oral address, as follows: “The term sheet will be binding when it is executed according to its terms and there is no carve-out”.

202. Mr Hamilton gave unchallenged evidence that it is his intention and, as far as he is aware, the intention of the Current Directors, to pay all claims by creditors of Keybridge which are determined to be due and payable (without exception). As set out above, each of WAM, WAM Capital or WAM Strategic Value has sufficient assets to meet any such claim by the Director Defendants, if determined to be due and payable.

203. Secondly, although I accept that the carve-out will operate in the (likely very brief) period during which the Letter of Comfort will be in effect, until long-form documentation is entered, the inclusion of the carve-out does not give rise to any substantial concern about solvency during that period. That is because there is no evidence to establish that there is any debt which is due and payable to any of the Director Defendants under their respective deeds of indemnity, let alone the amount of such debt.

Term of Bridge Funding Facility

203. Another of the Additional Issues raised by the Director Defendants and Yowie (but not by the Administrator) concerned the term of the Bridging Funding Facility and the prospects (and extent) of any equity raising by Keybridge.

204. As noted above, the term of the Letter of Comfort has been extended until the earlier of 30 June 2025 and the date that the long form documents for the Bridge Funding Facility are executed by the parties; and the Term of the Bridge Funding Facility in the Revised Term Sheet is the earlier of 30 June 2025 and the close of any Capital Raising by Keybridge.

205. The Director Defendants submitted that the effect of the Bridge Funding Facility will be to transform one form of debt owed by Keybridge (to its creditors) to another (owed to WAM), and “would worsen [Keybridge’s] solvency at the end of the term of the facility”.

206. This submission fails to acknowledge that, as set out in the Revised Term Sheet, the funding is a bridging facility pending an equity recapitalisation.

207. The Director Defendants and Yowie submitted that Keybridge would only be able to raise capital to a limited extent, such that Keybridge would not have sufficient means by 30 June 2025 to repay the funds advanced under the Bridge Funding Facility. The submission was put as follows by Yowie:

“ASX Listing Rule 7.11.3 limits a pro rata issue of securities to a maximum are securing to each security held. [sic] Keybridge’s current net equity is about $6.21m which means that it is the amount that could be raised (alluring all shareholders, participants and no discount is altered). That will be inadequate. … If only WAM participates, the maximum Keybridge could raise is about $2.6m.”

208. In their written submissions in reply, the Plaintiffs stated that this submission ignores the following matters.

209. The restriction in ASX Listing Rule 7.11.3:

(a) does not apply to a bonus issue (including a bonus issue of options – see ASX Listing Rule 7.16); (b) only relevantly applies to a non-renounceable issue (ASX Listing Rule 7.11.3(a)), and Keybridge is able to undertake a renounceable issue of new shares; and (c) only applies to pro rata issues of equity.

2. Even if the proposed raising is a non-renounceable issue on a pro rata basis, no limitation applies if Keybridge’s securities are trading and the issue price does not exceed the volume weighted average price (ASX Listing Rule 7.11.3(b)). In that regard, the Plaintiffs submitted that: “there is no reason to doubt that the new directors will act swiftly to comply with the outstanding requests of the ASX and ensure that suspension is lifted”.

3. Keybridge has its own assets.

4. None of those matters was disputed or otherwise addressed by the Director Defendants or Yowie in oral address at the April Hearing.

5. As regards the last of those matters, it was common ground in this proceeding that Keybridge is an “asset rich” entity.

6. Mr Bolton deposed that Keybridge has assets with a “readily assessable tangible value” of $11.4m. According to the ROCAP signed by Mr Bolton on 12 March 2025, Keybridge has assets with an estimated value of $15.376m, which may be able to be realised for as much as $53.391m.

7. Similarly, in his affidavit evidence in the Winding Up Proceeding (which was in evidence in this proceeding), Mr Patton deposed that “all of Keybridge’s assets [are] capable of being realised in a timely manner”; that the “nature of investments undertaken, and strategic positions held by [Keybridge]are attractive to a range of investors”; and that a number of Keybridge’s assets “are likely to realise values in excess of the book values”.

8. Given those matters, and the fact that the Administrator has identified that around $9.3m of claims are due and payable, there is no reason to doubt that Keybridge will be able, from a combination of equity raising and, to the extent necessary, the sale of assets, to repay by 30 June 2025 any amount advanced under the Bridge Funding Facility to meet the claims of Keybridge’s creditors.

9. Further, as WAM’s Counsel noted, the term of the Bridge Funding Facility may be extended by WAM and, having regard to the commercial realities outlined above and the degree of commitment by WAM to supporting Keybridge now that WAM’s nominees (including the Chairman of Wilson Asset Management) have been appointed to the board of Keybridge, there is a strong likelihood that any such extension, if required, would be granted.

Order under Section 447A

215. For the reasons set out above, I am satisfied that Keybridge is solvent. Having regard to the Letter of Comfort and the Revised Term Sheet (as clarified by the Addendum), Keybridge has a present ability to pay all debts as and when they become due and payable, including debts that will become payable in the immediate future (Anchorage Capital at [235]).

216. I have reached this view having regard to the matters I have addressed above including, without limitation, the following matters:

217. the terms of the Letter of Comfort, the Revised Term Sheet and the Addendum;

218. the fact that the funds available under the Bridge Funding Facility are unlimited in amount, so long as those funds are requested in order to meet creditor claims which Keybridge has determined are due and payable;

219. the fact that the specific entities in the Wilson Asset Management Group from which the “Financier” will be selected have available assets and cash significantly greater than the amount of all claims made by Keybridge’s creditors;

220. the fact that, on the evidence of Mr Patton and Mr Bolton, Keybridge is an asset rich entity, which runs a “lean” operation (incurring only around $1-1.2m in operating costs per year);

221. the commercial realities I have addressed, which indicate a strong degree of commitment from the Wilson Asset Management Group to supporting Keybridge, now that its Chairman and Chief Investment Officer (Mr Wilson) and its Chief Financial Officer (Mr Hamilton) have been appointed to Keybridge’s board; and

222. the fact that the Bridge Funding Facility will be in place until 30 June 2025 or the close of any Capital Raising by Keybridge, and there is no reason to doubt, having regard to WAM’s intention to participate in any such capital raising and the evidence (including from Mr Patton and Mr Bolton) regarding the value of Keybridge’s assets and its ability to realise those assets, that Keybridge will have the means to repay the Bridge Funding Facility in accordance with its terms.

223. The Director Defendants referred in their submissions to the Administrator’s statement, in his affidavit of 2 April 2025, that the Bolton DOCA Proposal “may be a better solution” than the latest WAM proposal as “all creditor claims are dealt with promptly” under the Bolton DOCA Proposal, being paid in “21 calendar days after the DOCA is executed”. The Director Defendants submitted that the Court should “allow the administration to proceed, allow [the Administrator] to investigate claims, including against Mr Catalano, and the creditors can choose themselves between the WAM option and the DOCA or whatever else may be on the table”. It was submitted that this would give effect to:

“the purpose of [Pt 5.3A of the Act which] is to, when a company is insolvent, and is in administration, and again, I’m assuming that for the purposes of the argument, is to take away the powers and responsibilities of the directors and vest control of the company in an independent administrator and ultimately in the company’s creditors. Allowing the creditors to have that power is the safest course.” (Emphasis added.)

218. These submissions can be addressed briefly.

219. As set out above, the propositions put by the Director Defendants proceed on the assumption that Keybridge “is insolvent”. I have determined that Keybridge is, in fact, solvent. The Defendants did not identify any reason why, in the event that Keybridge is established to be solvent, it should be remain in the control of an administrator, or why its fate should be in the hands of its creditors.

220. In any case, there is no basis to conclude that the Bolton DOCA Proposal would provide, or is capable of providing, a better outcome for creditors of Keybridge. In particular, the Administrator’s statement that it “may” provide a better outcome was expressly subject to his statement that he was investigating “the capacity of the DOCA proponent [Mr Bolton] to provide the funding required by the DOCA”. Mr Bolton did not lead any evidence to establish that he has the capacity to fund the Bolton DOCA Proposal. There is no basis to conclude that he could do so, particularly given that freezing orders have been made by this Court in respect of his assets, which remain in place. In those circumstances, it is unnecessary to address the other submissions made regarding the Bolton DOCA Proposal, including regarding the various conditions precedent and conditions subsequent to the Bolton DOCA Proposal.

221. I am satisfied that, in circumstances where it has been established that Keybridge is able to pay its debts as and when they fall due, an order should be made under s 447A of the Act ending the administration of Keybridge with immediate effect. This will remove the moratorium on creditor claims, will allow any claims of creditors which are due and payable to be paid in the immediate future, will bring an end to the incurring of costs in the administration, and will restore the company to the management of those directors who have been appointed by its members. Such an outcome is in the interests of creditors and members.

222. I will give the parties an opportunity to be heard on costs.

orders

223. For the reasons set out above, I make the following orders.

224. Order, pursuant to s 447A of the Corporations Act 2001 (Cth), that the administration of the First Defendant is to end with immediate effect.

225. Direct that:

(a) By 5.00pm on 16 April 2025, the Plaintiffs provide the Defendants with proposed short minutes of order on the issue of costs. (b) By 5.00pm on 22 April 2025, the Defendants provide the Plaintiffs with proposed short minutes on the issue of costs. (c) If orders to costs cannot be agreed by the parties, by 5.00pm on 24 April 2025, the parties are to exchange and provide to the Associate to Nixon J the form of orders as to costs which each party proposes, together with any evidence and submissions (limited to 5 pages) in support of those orders, indicating whether an oral hearing is requested to deal with the issues in dispute and if so why.

3. The parties have liberty to apply on two business days’ notice, including the Second Defendant with respect to any application for approval of his remuneration.

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addendum

At the listing for judgment on 14 April 2025, the Director Defendants brought an application to stay Order (1) contained at paragraph [223] of my reasons for judgment. I subsequently made orders in court as follows:

(1) Order, pursuant to s 447A of the Corporations Act 2001 (Cth), that the administration of the First Defendant is to end with immediate effect. (2) Order 1 is stayed until 4.00pm on Wednesday, 16 April 2025.

(3) Order, pursuant to s 198G(3)(b) of the Corporations Act 2001 (Cth), that the directors of the First Defendant be granted approval to exercise their powers and functions to cause the First Defendant to negotiate the terms of:

(a) the Revised Term Sheet dated 28 March 2025; (b) the Addendum to the Revised Term Sheet dated 1 April 2025; and

(c) the “Finance Documents” (as defined in the Revised Term Sheet).

(4) Extend Order 1(b) of the orders of 26 February 2025 to 4.00pm on Wednesday, 16 April 2025.

(5) Direct that:

(a) By 5.00pm on 16 April 2025, the Plaintiffs provide the Defendants with proposed short minutes of order on the issue of costs.

(b) By 5.00pm on 22 April 2025, the Defendants provide the Plaintiffs with proposed short minutes on the issue of costs.

(c) If orders to costs cannot be agreed by the parties, by 5.00pm on 24 April 2025, the parties are to exchange and provide to the Associate to Nixon J the form of orders as to costs which each party proposes, together with any evidence and submissions (limited to 5 pages) in support of those orders, indicating whether an oral hearing is requested to deal with the issues in dispute and if so why.

(6) The parties have liberty to apply on two business days’ notice, including the Second Defendant with respect to any application for approval of his remuneration.