Knight, in the matter of ANZ Hospitals Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2025] FCA 674 (19 June 2025)

1. Pursuant to section 439A(6) of the Corporations Act 2001 (Cth) (Act), the convening period defined in section 439A(5)(b) of the Act in respect of the Second and Third Plaintiffs be extended until 1 June 2026.
2. Pursuant to section 90-15 of the Insolvency Practice Schedule (Corporations) 2016 (Cth), being Schedule 2 to the Act, and section 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the Second and Third Plaintiffs such that, notwithstanding section 439A(2) of the Act, the second meetings of the creditors of the Second and Third Plaintiffs required under section 439A of the Act may be convened at any time before, or within five business days after, the end of the convening period as extended by order 1 above (provided that the First Plaintiffs give notice of the meetings to eligible creditors of the Second and Third Plaintiffs (including the persons claiming to be creditors of the Second and Third Plaintiffs) at least five business days before the meetings).
3. The First Plaintiffs have liberty to apply for any further extension of the convening period as extended by paragraph 1 above at any time before that period expires.
4. Liberty be granted to any person who can demonstrate sufficient interest to discharge or modify these orders on the giving of three business days' written notice to the plaintiffs and the Court.
5. The costs of the application be paid as costs of the administrations.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Delivered ex tempore, Revised from transcript

1. The first plaintiffs, Mr Knight, Mr Shepard, Ms Wiggins and Mr Korda, are the voluntary administrators of the second plaintiff, (ANZ) and the third plaintiff, (Newco) (together the Companies).
2. Section 439A(5) of the Corporations Act 2001 (Cth) (the Act), provides the statutory framework for convening the second creditors meetings of the Companies. Unless extended, the convening period for the second creditors meetings will end on Tuesday, 24 June 2025.
3. The administrators seek:

(a) an order of pursuant to s 439A(6) of the Act, that the convening period defined in 439A(5)(b) of the Act be extended to 1 June 2026 (extension order);

(b) an order pursuant to s 447A(1) of the Act, and s 90-15 of the Insolvency Practice Schedule, being Sch 2 to the Act, that Part 5.3 of the Act, is to operate in relation to the Companies, as if it permitted the second meeting of creditors to occur at any time before or within five business days after the end of the extended convening period, provided the administrators provide five days' notice, commonly referred to as a "Daisytek order", having been the order considered and made by Lindgren J in Re Daisytek Australia Pty Limited (Administrators Appointed) [2003] FCA 575; (2003) 45 ACSR 446, at [10]-[18].

1. The overall object of Part 5.3A of the Act, as stated in s 435A, is to maximise the chances of the company involved, or as much as possible of its business, continuing in existence, or achieving a better result for the company's creditors and members than would otherwise be achieved in an immediate winding up.
2. The function of the Court on an application for an order extending the convening period is to strike an appropriate balance between, on the one hand, the expectation that administration will be a relatively speedy and summary matter, and on the other hand, the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders: Diamond Press Australia Pty Limited [2001] NSWSC 313 at [10] (Barrett J).
3. Courts have regularly extended the convening period to facilitate the sale of a business as a going concern, or the progression and assessment of a deed of company arrangement proposal that may provide a better return to creditors than a winding up. There is ample precedent for extensions of nine to twelve months, and sometimes even longer, where the circumstances justify it: see the cases collected in Re Rathner, in the Matter of Citius Property Pty Limited (Administrator Appointed) [2023] FCA 26 at [38] (O'Bryan J), and more recently Re Hams, in the matter of Onesteel Manufacturing Pty Limited (Administrators Appointed) [2025] FCA 219 (Neskovcin J).
4. The plaintiffs submit, and I accept, that the court should extend the convening period for the second creditors' meetings for the following reasons.
5. First, the Healthscope group is the second largest private hospital group in Australia. Its structure and operations are complex and substantial. The Healthscope group comprises 56 corporate entities including ANZ and Newco. ANZ and Newco are non-operating entities in the Healthscope group, and Newco is an intermediary holding company within the Healthscope group.
6. The Healthscope Group has an extensive network of 37 hospitals. The Healthscope Group has about 19,000 employees, 5,000 inpatient beds, and a large number of trade creditors. Approximately 650,000 patients are treated at Healthscope Group operated hospitals every year. Operating the Healthscope Group business also requires engagement with State regulatory bodies in relation to hospital licences, engagement with its heavily unionised workforce of nurses with 23 separate enterprise bargaining agreements, and continual engagement with major private hospital insurers.
7. Second, the receivers are currently undertaking an orderly and considered sale process designed to maximise value for Healthscope's creditors and benefit its key stakeholders. This sale process, which has already attracted interest from several bidders, will be complete in up to twelve months. This timeline reflects the complexity and size of the Healthscope Group's business.
8. The sale process is complex because the Healthscope Group operates its 37 hospitals through various arrangements including several leases. Eleven hospitals are operated from sites leased from entities related to NorthWest Healthcare Australia RE Limited, four hospitals are leased from entities related to HCW Funds Management Limited, seven hospitals are operated from sites leased from entities related to HMC WHF No 1 Pty Limited and eleven hospitals are leased from individual landlords. The receivers may be required to negotiate new rental terms with these landlords to facilitate any sale of the business. Healthscope also operates one hospital from a site owned by a Healthscope operating entity, three through an agreement with the Adelaide Community Healthcare Alliance and one hospital, being the Northern Beaches Hospital, under a public-private partnership arrangement with the New South Wales Government.
9. An extension of twelve months will allow the receivers to conclude the sale process. However, if this is not possible, the extension provides the Companies' secured creditors with an opportunity to recapitalise the Healthscope Group and there may be utility in the Companies executing a deed of company arrangement.
10. Third, if the administrators are required to convene the second creditors' meetings at this time, the administrators expect that the only option for creditors is to place the Companies into liquidation, which will have a serious adverse effect on their trade as well as creditors, employees and patients.
11. Fourth, ANZ has borrowed $1.6 billion from a group of syndicated facility lenders pursuant to a Syndicated Facility Agreement (SFA) with the National Australia Bank (as agent for the lenders and security trustee). Newco and 36 operating companies within the Healthscope Group guaranteed the obligations of ANZ as obligors under the SFA and the lenders have a first-ranking security interest over the assets of the obligors in the Healthscope Group. ANZ and Newco are also party to separate Deeds of Cross-Guarantee, together with other Healthscope Group entities. If the Companies enter into liquidation, the Deeds of Cross-Guarantee provide that all the Group entities, including the operating companies will become liable for all amounts owing by ANZ as borrower under the SFA. To avoid this scenario, the administrators believe it is in the interests of all creditors that the sale process be permitted to proceed over a twelve month period.
12. The administrators have sought a Daisytek order allowing them to call the second creditors' meetings prior to 1 July 2026. This flexibility means that there is no prejudice to creditors by the extension of the convening period. The administrators also seek orders that liberty be granted to any person who can demonstrate sufficient interest to discharge or modify these orders on the giving of notice to the plaintiffs and the Court. The administrators will seek to call the second creditors' meetings at the first available opportunity, following a binding transaction in relation to the Healthscope Group business, or a binding proposal for a deed of company arrangement, which may be earlier than 1 June 2026.
13. The administrators raised the proposed extension of the second creditors' meetings at the first meetings of the creditors on 5 June 2025, and there was no opposition expressed by creditors at that meeting.
14. The application is not opposed by any creditor, or the Australian Securities and Investments Commission.
15. In summary, Healthscope is a significant and complex entity within the Australian healthcare system. Allowing an orderly and considered sale process to be undertaken by the receivers will likely maximise the returns for creditors, and benefit Healthscope's key stakeholders, which include its trade creditors, employees and its patients.
16. Accordingly, I make orders in the form of the draft orders that were provided to me before the hearing.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackman.