Lewis v Battery Mineral Resources Ltd

An unfortunate post-hearing development 6 Late in the evening on 20 July 2021, after the Court had reserved judgment, the plaintiffs' instructing solicitor, Mr Trevor Hall, emailed my Chambers. This email in part sought leave to rely upon post-hearing submissions, due to his alleged inability to provide instructions to the plaintiffs' counsel in closing submissions caused by the proceeding being conducted remotely by Microsoft Teams. These submissions alleged that Weston, the only "significant creditor", "supports the application", and "therefore in terms of the position of creditors, the Court [could] be comforted that the position of Weston is descriptive of the result. Creditors support it." Mr Hall also claimed that ESI is not a creditor of BMR. 7 By reply email on 21 July 2021 at 10:22 am, my Associate requested that the defendant and amicus provide any response to the plaintiffs' request for leave, including the claim that Weston supported the plaintiffs' application, by 22 July 2021. At 10:41 am on 21 July 2021, Mr Hall responded to this email as follows: As a matter of considerable embarrassment, it is brought to my attention that Weston will not and does not support the application. That is in error. I will otherwise revert as to the below email before people start investing any time in responding to it. 8 As is evident, this email left quite unclear whether the plaintiffs still pressed their application for leave to rely upon the other post-hearing submissions made by Mr Hall in his 20 July 2021 email. 9 By email on 21 July 2021 at 10:47 am, the defendant opposed the grant of leave. 10 At 11:37 pm on 21 July 2021, Mr Hall sent to my Chambers a further "amended email". This email was in similar terms to Mr Hall's email dated 20 July 2021, but without reference to the submissions concerning Weston's support of the application. 11 On 22 July 2021, Mr Bender as amicus also indicated his opposition to the plaintiffs being granted leave to rely upon Mr Hall's emails dated 20 and 21 July 2021. My reasons for refusing leave substantially reflect Mr Bender's submissions. 12 First, as the High Court has made very clear, the time and place for making submissions is at the oral hearing. Once an oral hearing is concluded and judgment reserved, only in very exceptional circumstances, if at all, will the Court grant leave for a party to rely upon further submissions: see Stuart v The Queen (1959) 101 CLR 1 at 10 (Dixon CJ, McTiernan, Fullagar, Taylor and Windeyer JJ); Carr v Finance Co of Australia Ltd [1981] HCA 20; 147 CLR 246 at 258 per Mason J; NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48; 219 CLR 90 at [191]-[192] per McHugh ACJ, Gummow, Callinan and Heydon JJ; Eastman v Director of Public Prosecutions (ACT) [2003] HCA 28; 214 CLR 318 at [29]-[31] per McHugh J (Gummow J agreeing); Miller & Associates Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; 241 CLR 357 at [111] per Heydon, Crennan and Bell JJ; see also Frugtniet v Secretary, Department of Social Services [2021] FCAFC 127 at [85] per Wheelahan and Snaden JJ, O'Callaghan J agreeing and the cases cited therein). The observations of McHugh J in Eastman at [29]-[31] particularly resonate with the current proceeding (foonotes omitted) (emphasis added): 29 Parties to matters before the court need to understand that, once a hearing in the court has concluded, only in very exceptional circumstances, if at all, will the court later give leave to a party to supplement submissions. Parties have a legal right to present their arguments at the hearing. If a new point arises at the hearing, the court will usually give leave to the parties to file further written submissions within a short period of the hearing - ordinarily 7 to 14 days. But a party has no legal right to continue to put submissions to the court after the hearing. In so far as the rules of natural justice require that a party be given an opportunity to put his or her case, that opportunity is given at the hearing. 30 This is not the first time that this court has had to emphasise that the hearing is the time and place to present arguments. In Carr v Finance Corp of Australia Ltd (No 1) Mason J said: The material was submitted without leave having been given by the Court. The impression, unfortunately abroad, that parties may file supplementary written material after the conclusion of oral argument, without leave having been given beforehand, is quite misconceived. We have to say once again, firmly and clearly, that the hearing is the time and place to present argument, whether it be wholly oral or oral argument supplemented by written submissions. 31 Once the hearing has concluded, the workload of the court makes it impossible for the court to give leave to file further submissions - with all the attendant delay in the court's business by a fresh round of submissions. Efficiency requires that the despatch of the court's business not be delayed by further submissions reflecting the afterthoughts of a party or - as perhaps is the case in this appeal - some dissatisfaction with the arguments of the party's counsel. 13 There are no exceptional circumstances warranting the grant of leave in this case. Indeed, the submissions advanced by Mr Hall can appropriately be described as an "afterthought" and should have been made by the plaintiffs' counsel during oral address. As submitted by Mr Bender, it was also inappropriate for Mr Hall to send emails about substantive matters to the Court without first providing prior notice to either the defendant or amicus (see Bale v Mills [2011] NSWCA 226; 81 NSWLR 498 at [59] per Allsop P, Giles JA and Tobias AJA). 14 Secondly, I do not accept the plaintiffs' contention that the circumstances of a virtual hearing precluded their instructing solicitor from providing appropriate instructions to counsel. As the defendant pointed out, the plaintiffs were represented by senior and junior counsel. The plaintiffs failed to provide an adequate explanation as to why they were unable to communicate with junior counsel, by email, sms or otherwise, during the course of the hearing. Virtual hearings have become common practice since at least April 2020 due to the COVID-19 pandemic and have been successfully conducted without any modification to the rules governing parties' communications with the Court. Save for exceptional circumstances, the fact that a hearing is conducted virtually does not provide an explanation or excuse as to why appropriate instructions to counsel were not able to be given during the course of the hearing, nor why leave should be granted to rely upon post-hearing submissions. 15 Thirdly, Mr Hall's emails included statements which were contrary to or not based on any evidence, as Mr Hall's email at 10:23 am on 21 July 2021 partially acknowledged. Furthermore, the matters raised by Mr Hall as to the treatment of the debt owed to ESI do not advance the plaintiffs' case beyond the matters put by counsel during the hearing. It is common ground between the parties that there is no debt presently owed by BMR to ESI, as it formed part of the consideration for the sale to Weston. 16 For these reasons, I refuse leave for the plaintiffs to rely upon the post-hearing submissions contained in Mr Hall's emails on 20 and 21 July 2021.

Summary of background facts 17 The background facts may be summarised as follows. 18 On 14 June 2016, the first plaintiff (Mr Lewis) founded BMR and was its inaugural director and shareholder. 19 On 23 November 2016, BMR became an unlisted public company. Mr Lewis became the Company's managing director on a board of three (the other two members being a geologist and a mining engineer/lawyer respectively). BMR's business was the development for mining of cobalt, lithium and other minerals used in making batteries. 20 By the end of 2016, and amongst other mining activities, BMR began staking mineral claims in the cobalt belt in Ontario, Canada. 21 On 14 December 2017, BMR entered into a $5 million share subscription agreement with Weston, an investment company controlled by New York-based private equity fund Yorktown Partners LLC. On 1 January 2018, Yorktown's Mr Laz Nikeas was appointed to BMR's board. 22 Yorktown planned for BMR to develop a cobalt processing plant in Ontario using funding from Yorktown's group. The proposed funder was ESI, a company related to Weston and Yorktown. To this end, in mid-February 2018, Mr Lewis received an email outlining the Term Sheet for an investment of CAD$100 million, with CAD$10 million paid upfront and as a so-called "non-refundable" payment (the ESI payment). 23 On 17 May 2018, BMR and its wholly owned Canadian namesake entered into the Process Facility and Cobalt Supply Agreement with ESI (ESI Agreement). Importantly for the plaintiffs' application, cl 3 of the ESI Agreement provided as follows: 3 NON-REFUNDABLE PAYMENT 3.1 Payment to BMR As soon as is reasonably possible following the execution of this Agreement, but in no event later than 60 days following the date of execution by both Parties ESI shall pay to BMR a one-time payment equal to $10 million. Subjection to section 3.2, such payment will be non-refundable. 3.2 Repayment by BMR Notwithstanding section 3.1, in the event that (i) ESI terminates the Agreement pursuant to section 17.2(2)(a) or 17.2(2)(c) prior to attainment of Commercial Production and (ii) the event giving rise to the termination right under section 17.2(2)(a) or 17.2(2)(c) is directly related to BMR not using commercially reasonable efforts to advance the development of the Mineral Property, then the $10 million payment made by ESI pursuant to section 3.1 shall be immediately repayable to ESI on demand in full without interest. 24 Mineral property is defined in clause 1.1 to mean BMR's Mineral Rights, which as defined in clause 1.1(5) can be summarised as BMR's mining rights in Ontario. 25 In a news release dated 22 May 2018, ESI made the following statement concerning the non-refundable payment: ESI must make a CAD $10 million payment to BMR for the right to participate in the project. The payment must be made by July 17, 2018 and is non-refundable unless BMR does not use commercially reasonable efforts to advance the development of its Ontario mineral properties. 26 On 16 July 2017, ESI paid CAD$10 million to BMR in accordance with cl 3.1 of the ESI Agreement. 27 During 2018, BMR spent CAD$15,350,387 on exploring for cobalt, the details of which are summarised in an affidavit affirmed by Mr Lewis on 24 March 2021. 28 By early 2019, due to BMR's activities and expenditure, BMR began to experience cash flow difficulties for the (northern hemisphere) winter drilling program and sought third party funding. BMR secured bridging loans from Weston in March and April 2019 on increasingly burdensome terms. 29 On 16 July 2019, in what appears to have been caused by discontent from Yorktown and other Australian shareholders at BMR's increasingly dire financial situation, Mr Lewis was stood down as CEO and Managing Director of BMR. On 13 September 2019, Mr Lewis was formally removed as a director of the company.

The voluntary administration and sale of assets to Weston 30 On 11 November 2019, BMR's board resolved to place the company into voluntary administration, and appointed Mr Connelly and Mr Harris as administrators. 31 On 12 November 2019, the administrators sent out a circular to shareholders seeking "urgent expressions of interest for either the recapitalisation of BMR or the purchase of the shares in its subsidiaries". The email addresses of 55 shareholders, including the plaintiffs, were missed when the circular was initially distributed. 32 In a document titled "Battery Mineral Resources Limited (Administrators Appointed) - Urgent Expressions of Interest Sought", the administrators sought all expressions of interest for the recapitalisation of BMR or purchase of the shares in its subsidiaries by 15 November 2019, and all non-binding indicative offers (NBIOs) by 20 November 2019. I will return later to the plaintiffs' and defendant's evidence concerning the urgency of this sale process. 33 On 20 November 2019, Mr Kenneth Banks, a shareholder, submitted a NBIO of $15 million on behalf of a consortium of shareholders for the issue of 150 million ordinary shares in BMR at 10c per share. The following aspects of Mr Bank's offer will become important for the plaintiffs' claims below: The funds were said to be for "[p]aying out secured, part-payment of unsecured debt with the balance towards review and planning of exploration programs on the cobalt and lithium projects". The offer was conditional "[u]pon the completion of the Due Diligence process", which the consortium required until 4 December 2019 to complete. The consortium's offer was conditional on further fundraising from additional investors. The covering email to the NBIO noted the offer was "predicated on the need to gain approval for any restructure from the secured creditor", namely Weston. 34 On 21 November 2019, the first meeting of shareholders was held, and a seven person Committee of Inspection was appointed, of which Mr Lewis was a member. 35 On 22 November 2019, the Committee of Inspection was presented with a Confidential Report by the administrators, which recommended that the Committee of Inspection accept Weston's proposal to acquire BMR's assets for an approximate consideration of $21.2 million. The terms of the offer included: The forgiveness of Weston's $9.4 million secured debt and ESI's alleged CAD$10 million unsecured debt. Cash consideration of $600,000 and direct payment of certain strategic unsecured creditor claims of $222,561. Immediate payment of approximately $772,000 of debts of BMR's subsidiaries. The timeframe for completion was noted as "as soon as possible, preferably during the week commencing 25 November 2019". 36 As the Confidential Report emphasised, unlike Weston's offer, it was unclear to what extent Mr Bank's offer would result in the payment of creditors beyond Weston, particularly in circumstances where it was expected that working capital of approximately $4 million was to be kept by BMR under that offer. 37 The Committee of Inspection resolved on 22 November 2019 not to object to the administrators' recommendation to accept Weston's offer. As the minutes of the Committee of Inspection make clear, Mr Lewis argued against that resolution. However, Mr Lewis left the meeting before the Committee of Inspection resolved not to object to the Weston offer. 38 On 24 November 2019, Heads of Agreement were entered into between Weston and BMR. A formal share sale agreement was entered into on 2 December 2019 and was completed on 4 December 2019.

The further amended originating application 39 As noted above, the plaintiffs' FAOA advanced a primary claim for the appointment of a SPL pursuant to s 90-15 of the IPS, and an alternative claim for the appointment of a reviewing liquidator pursuant to s 90-23 of the IPS. Additional orders were also sought seeking approval for funding agreements pursuant to s 477(2B) of the Corporations Act and leave to bring proceedings against BMR as a company in liquidation under s 500(2) of the Corporations Act. It is convenient to set out the orders sought in full (without alteration and emphasis in original): 1 The appointment of Daniel Cvitanovic of Worrells Solvency & Forensic Accountants, Suite 1, 151 Tongarra Road, Albion Park, NSW 2527 (Special Purpose Liquidator) to Battery Mineral Resources Limited (in Liquidation), as additional or special purpose liquidator to carry out to the functions specified in Annexure A to this Process. 2 Approval pursuant to section 477(2B) of the Corporations Act of the entry of the special purpose liquidator and the Company into: a. a funding agreement with a syndicate of shareholders and creditors including the plaintiffs in a form to be tendered; b. a retainer with a firm of solicitors selected by the special purpose liquidator in a form to be tendered. 3 An order that the special purpose liquidator may apply from time to time to the Registrar for approval of his remuneration upon serving his claim for such remuneration upon the general purpose liquidators. 4 Leave pursuant to section 500(2) of the Corporations Act to bring these proceedings against the Defendant. Alternative Claim 5 The appointment of Daniel Cvitanovic of Worrells Solvency & Forensic Accountants, Suite 1, 151 Tongarra Road, Albion Park, NSW 2527 (Reviewing Liquidator) to Battery Mineral Resources Limited (in Liquidation), as reviewing liquidator pursuant to section 90-23(6) of Schedule 2 of the Corporations Act 2001 (Cth) to carry out the functions and have the powers specified in Annexure B to this Process. 6 The appointment of the reviewing liquidator is conditional upon the entry of the reviewing liquidator into a funding agreement with the Plaintiffs and any other person agreeable to the plaintiffs within 14 days that provides for the payment of the whole of the reviewing liquidator's remuneration and expenses. 7 Approval (to the extent necessary) pursuant to section 477(2B) of the Corporations Act of the entry of the reviewing liquidator and the Company into a funding agreement with a syndicate of shareholders and creditors including the plaintiffs in a form to be tendered. 8 Costs including against anyone who unreasonably opposes this application. 9 Such other orders as the Court thinks fit. 40 Annexure A to the FAOA sets out the special purposes for which the plaintiffs sought to appoint Mr Cvitanovic as a SPL. They are as follows (without alteration): 1. Conduct investigations into: a. the sale of the assets of Battery Mineral Resources Ltd (Company) on or about 20 November 2020; b. any advice provided to the Company or any of its officers by Anthony Connelly, Jamie Harris or any other person working at McGrath Nicol on or before the appointment of Anthony Connelly and Jamie Harris as the voluntary administrators of the Company; c. the procedures carried out pursuant to Part 3A of the Corporations Act by Anthony Connelly or Jamie Harris, their representatives and agents from the time of their appointment as the voluntary administrators of the Company; d. the conflict of interest of members of the Committee of Inspection, including in their majority vote to approve the sale of the Company's assets, and any breach of section 80-55 of the Insolvency Practice Schedule by such members; e. the influence, if any, of Yorktown Partners LLC, ESI Energy Services Inc, their representatives or agents, including Lazaros Nikeas on Anthony Connelly or Jamie Harris with regards to: i. the admission of ESI Energy Services Inc as a creditor of the Company; and ii. the sale of the Company's assets. f. the investigations, if any, of Anthony Connelly or Jamie Harris with regards to the claim of ESI Energy Services Inc to be a creditor of the Company; g. losses of the Company caused by any sale of its assets for undervalue or on unfavourable terms; h. the liability of anyone for those losses, together the Examinable Affairs. 2. Recover the books and records of the Company relevant to the Examinable Affairs. 3. Conduct public examinations into the Examinable Affairs. 4. Make any claim in the Company's name to make recoveries for it with regard to the Examinable Affairs. 41 At the hearing, the Court confirmed that the reference to "20 November 2020" in [1(a)] was a typographical error, and instead should refer to "20 November 2019". 42 Evidently, the defined Examinable Affairs for which the SPL is sought to be appointed focuses upon the sale process conducted by the voluntary administrators and their acceptance of the ESI payment as a provable debt. As will become apparent, this raises a significant threshold issue for the Court's power to appoint a SPL in this case. 43 It is apposite to note at this stage that paragraph (d) of the Examinable Affairs cannot be a matter for investigation by the SPL in this case. As its terms make clear, it is predicated on investigating a potential breach of s 80-55 of the IPS. As Mr Connelly stated in his affidavit, the creditors of BMR resolved on 21 November 2019 to waive the requirements of s 80-55 pursuant to s 80-55(3). 44 Annexure B to the FAOA sets out the functions and powers of the reviewing liquidator sought in the plaintiffs' alternative claim. It is unnecessary to set out [1] of Annexure B, as the Examinable Affairs are in identical terms to Annexure A in relation to the plaintiffs' primary claim for the appointment of a SPL. Paragraphs 2 and 3 provide: … 2. The reviewing liquidator is to file his report on his review with the Court and serve a copy on the Plaintiffs, Anthony Connelly and Jamie Harris before the end of two months from the date of these orders. 3. The powers of the reviewing liquidator are: a. the powers in section 90-22(1)(a) to (e) of the Insolvency Practice Rules (Corporations) 2016; b. the power to retain solicitors and have those solicitors brief counsel to advise; c. the powers in section 530A(1)(a) of the Corporations Act 2001 relevant to the Examinable Affairs, where "liquidator" is to be taken to include the reviewing liquidator; d. the powers in section 530B of the Corporations Act 2001 relevant to the Examinable Affairs, where "liquidator" is to be taken to include the reviewing liquidator; and e. the power to relist these proceedings for the purposes of making an application under section 90-28 of Schedule 2 to the Corporations Act 2001 (Cth); f. the power to otherwise relist these proceedings.

The plaintiffs' evidence summarised 45 The plaintiffs read the following affidavits in support of the FAOA: (a) an affidavit of Trevor Hall affirmed on 19 February 2021; (b) an affidavit of Kenneth Martin Banks affirmed on 23 March 2021; (c) an affidavit of Gary Leon Lewis affirmed on 24 March 2021; (d) a second affidavit of Gary Leon Lewis affirmed on 29 June 2021; (e) an affidavit of Daniel Cvitanovic affirmed on 9 July 2021; (f) a second affidavit of Daniel Cvitanovic affirmed on 19 July 2021; and (g) a third affidavit of Gary Leon Lewis affirmed on 19 July 2021. 46 Primary reliance was placed on Mr Bank's affidavit and Mr Lewis' first affidavit. Mr Lewis' first affidavit annexed documents totalling over 600 pages. I will only summarise the salient features of these affidavits and annexures as relied upon by the plaintiffs. 47 Mr Banks' affidavit deposed to matters concerning the urgency of the sale process and his offer on behalf of a consortium of shareholders. Mr Banks first deposed to conversations he had with voluntary administrators during the sale process in which he registered his interest to purchase BMR and raised his concerns with the urgency of sale process. The following conversation is instructive of his concerns: Mark said: "The administrators have a very limited time frame to recapitalize BMR, due to immediate and urgent funding requirements to maintain the value of the assets." I said: "The time frame for the sale of 5 days is simply ridiculous and it does not give our syndicate or any other interested parties adequate time to do proper due diligence, to test and verify the validity of the urgent funding required." Mark said: "As you know, all of the information is in the data room, and it is up to you to make your decision from there." I said: "It is so unrealistic, how can we do due diligence on overseas assets in a few days?" Mark said: "This is the path that the Administrators have to go down. If we don't get the funding we will potentially lose assets and not maintain value in the remaining assets." 48 After describing the NBIO made on 20 November 2019 and further conversations with the voluntary administrators in which queries concerning his offer were raised (see [57] below), Mr Banks then outlined the process by which he was notified that his offer would not proceed and his subsequent correspondence with the voluntary administrators. Again, the following email sent on 29 November 2019 in response to a letter by the voluntary administrators of the same date concerning the sale process is demonstrative of Mr Banks' concerns (without alteration and emphasis in original): Your letter shows your sheer arrogance and will flame our further desire to have your conduct scrutinised. We were in the best position to estimate your costs ... "Are you serious"! We did not request a longer sale process, we merely countered your unrealistic rushing which we believe is disingenuous. We asked for a quantum of your costs and you failed to provide them. We are still getting our head around the concept where we pay you to adjudicate on the bonafides of our recapitalisation/restructuring NBIO for BMR ..... that makes no sense to us Our review of the data did not uncover any urgent expenditure that was required that could not wait until after this process should have gone down fair and reasonable timelines, and the beneficial ownership of BMR is determined. This shows your inexperience in understanding mining exploration in our opinion. You may say you are finished corresponding with us but I can assure you we are far from finished. Our determination for a fair outcome for creditors and shareholders goes beyond your flippancy. 49 Mr Lewis' affidavit, after describing matters concerning the incorporation of BMR, his role in the company and the events leading to voluntary administration, sought to highlight his concerns with the urgency of the sale process and the admission of ESI as a creditor of BMR. He annexed correspondence authored by him dated 21, 22, 25, 28 and 29 November 2019, 2, 6, 9 and 12 December 2019, 14 January 2020, 23 March 2020 and 2 September 2020. Mr Lewis also annexed replies received from the voluntary administrators on 29 November 2019, 12 December 2019, 22 January 2020, 7 April 2020 and 9 September 2020. 50 The main thrust of Mr Lewis' correspondence can be summarised as follows: (a) That the views of the voluntary administrators as to the urgency of the sale process was based on "circumstantial evidence", was "unsubstantiated" and was not based on an independent and fair assessment of that information. In the letter dated 23 March 2020, Mr Lewis asserted "[i]t is more than a co - incidence that the sale of assets had occurred in a very short period of time where [Weston] did not have to make any nomination to enforcing its security". (b) That BMR was being run and the sale process was being conducted for the sole benefit of Weston and not in the best interests of the company. Mr Lewis in particular highlighted that Weston held a majority on the board of directors of BMR and called on the voluntary administrators to investigate insolvent trading by those directors in the period immediately prior to the voluntary administration. (c) That the ESI payment should never have been characterised as a liability. In particular, Mr Lewis sought to highlight that Weston and ESI were related parties and therefore it clearly wanted to characterise the CAD$10 million payment as a liability, when in fact ESI had used "commercially reasonable efforts to advance the development of the Ontario cobalt properties" and therefore in accordance with cll 3.1 and 3.2 of the ESI Agreement the ESI payment was non-refundable. (d) On 14 January 2020, Mr Lewis requested information pursuant to s 70-45 of the IPS concerning the matters raised at (a)-(c) above, alongside other matters. This request was refused by the voluntary administrators in correspondence on 22 January 2020, on the grounds that it was an unreasonable request (pursuant to s 70-10(2) of the IPS) because the information requested had already been provided in previous correspondence and the reports extracted at [54]-[55] below. 51 In addition to the terms of the ESI Agreement and the news release by ESI extracted at [23] and [25] above, the plaintiffs relied upon other documents annexed to Mr Lewis' affidavit and Mr Connelly's affidavit as demonstrating that the sale process was not urgent and that the ESI payment should not have been characterised as a liability. In sum: (a) A preliminary prospectus filed with the Ontario Securities Commission on 19 June 2018, which referred to the ESI payment being "non-refundable". (b) Weston's letter of support to BMR dated 8 November 2018, which indicated it was "prepared to invest additional amounts of capital into BMR to continue funding its corporate and exploration activities and contractual land holding obligations over the foreseeable future". (c) An email from Mr Connelly dated 10 November 2019 which stated he understood that "BMR has only a few creditors and the only significant creditor is [Weston]". (d) An email from Mr Connelly to Mr Ronald Phillips and Mr Nikeas from Yorktown dated 19 November 2019 which stated the following regarding the ESI payment: ESI Energy Services Inc. I understand that: • BMR entered into the attached Process Facility and Cobalt Supply Agreement with ESI on 17 May 2018; • if the project proceeds, ESI would finance, build and operate a cobalt processing facility in Ontario; and • the CAD$10 million one-time payment made shortly following the execution of the Deed is non-refundable other than in certain circumstances, including that BMR must use commercially reasonable efforts to advance the development of its Ontario mineral properties I have undertaken a high-level review of the ESI agreement and note that it may be terminated for an insolvency event (clause 17). However, there is no reference in clause 3.2 (which deals with repayment) to termination for an insolvency event. Rather, the repayment trigger appears to relate to termination for alternative reasons set out in clauses 17.2(2)(a) and 17.2(2)(c). I therefore seek your assistance and comments whether you consider an insolvency event (or other factors) have given rise to ESI having a provable debt for CAD$10 million in the administration or liquidation of BMR. Given that a portion of the proposed consideration in the current Weston offer assumes that the ESI claim against BMR is a provable debt, I would be grateful if you and/or Minter Ellison could provide me with further information supporting ESI's claim of CAD$10 million payment. … 52 The plaintiffs provided evidence of the proposed funding agreements for a SPL and/or reviewing liquidator by a consortium of shareholders, and also confirmed Mr Cvitanovic's willingness to accept appointment in either role. It is unnecessary to summarise these affidavits given the conclusions I have reached below concerning the plaintiffs' application.

The defendant's evidence summarised 53 While the defendant did not oppose the plaintiffs' application (see [3] above), to assist the Court the defendant read affidavits by Mr Connelly and Mr Mark Alfred Holland, an employee of McGrath Nicol who provided assistance to Mr Connelly and Mr Harris. These affidavits describe the voluntary administration of BMR and in particular the sale of BMR to Weston in November-December 2019. I will only summarise those parts of the affidavits which go directly to matters raised by the plaintiffs' application. Neither Mr Connelly nor Mr Holland was required for cross-examination. 54 With respect to the urgency of the sale of BMR, Mr Connelly referred to the Confidential Report dated 21 November 2019, which under the heading "Executive Summary" made the following points about the financial position of BMR as at the date of voluntary administration: … • There is currently no funding available to the Administrators to meet the accrued debts of BMR or the Subsidiaries, ongoing operational costs or to undertake exploration activities required to maintain the value of exploration tenements. • The Subsidiaries are without funds of any material value, have material unpaid debts and appear to be insolvent. BMR had A$25k under its control at the time of our appointment and the debts incurred by the Administrators for advertising and legal fees either have or will shortly exhaust those funds. • The Administrators have therefore sought urgent Expressions of Interest for either the recapitalisation of BMR or purchase of the shares in the Subsidiaries and the amounts BMR is owed by the Subsidiaries. … 55 Mr Connelly also referred to the "Report to creditors pursuant to Insolvency Practice Rules (Corporations) 75-225" dated 6 December 2019 (Administrators' Report to Creditors), which under the sub-heading "Situation on appointment" outlined the following matters, among others: • Cash: BMR's cash reserve were limited to A$25k and it did not have immediate access to any further debt or equity funding. The Subsidiaries held less than A$1.5k cash and had no access to debt or equity funding, due to their historical reliance on BMR for funding. • Payables: BMR and the Subsidiaries had critical past due payable of approximately $1.8 million (approximately 83% of them were more than 90 days overdue), which presented the following risks if not paid immediately: - resignation of key employees and consultants, resulting in a loss of human and intellectual capital; - unavailability of those employees/consultants to continue to advance BMR's projects; and - stand-down by certain contractors who advised they would not work for BMR or the Subsidiaries until their balances were paid in full. ... • Administrators' costs: BMR was also without funds to pay the costs for the Administrators and advisers for managing operations or for an extended sale campaign. An administrator is not obliged to personally incur costs in their role that they are unable to pay. 56 As these reports highlight, BMR appeared to be in a difficult financial position when the voluntary administrators were appointed. 57 As to the voluntary administrators' consideration of Mr Bank's offer as an alternative to the Weston offer, the following matters detailed by Mr Holland, which I accept, highlight the uncertainty surrounding the terms of the former offer (see [33] above): 11. With reference to paragraphs 21 and 23 of the Banks Affidavit: (a) following a review of the email received from Mr Banks on 20 November 2019 (refer annexure KMB-9), I placed a call to Mr Banks to again seek clarity on: (i) the value of a deposit, if any; (ii) funding that may be made available to meet upcoming BMR costs; and (iii) the timeframe to complete his proposed transaction. Mr Banks did not answer so I left him a voicemail message. Enclosed at page 23 of Exhibit MH1 is an internal email between Mr Connelly and I regarding these circumstances; (b) I followed up my voicemail message with an email on 21 November 2019 reiterating the information required (refer annexure KMB-1 0); (c) I held a telephone conversation with Mr Banks on the morning of 21 November 2019 (referred to at paragraph 23 of the Banks Affidavit). My recollection is that this was a lengthy telephone conversation and we discussed the following: i. that his offer had not addressed whether any funds would be made available to the Administrators so that the Administrators could meet the urgent and ongoing costs of BMR and its subsidiaries; ii. information to support the quantum of funding required had been included in the data room. I again explained some of the urgent upcoming costs and enquired about how they were to be funded in the absence of any cash held by the Administrators; iii. Mr Banks said that he and his consortium required time to undertake further due diligence and would require time to raise funding to undertake the proposed transaction; iv. as his offer had not addressed the timeframe to complete the proposed transaction, I enquired that if he was proposing a lengthy time to completion (say 18 to 24 months) had he or his consortium also factored in the additional costs of the Administrators (such as administrators' fees and legal fees) that may be incurred over that timeframe and how that would be funded. Mr Banks enquired about the quantum of additional administrators' costs, which I advised would very much depend upon the length of time he required to complete a transaction, but could be in the order of $100,000 to $300,000; v. his offer had not addressed whether a deposit would be payable. We then discussed timing and potential conditions associated with a 10% deposit (nominated by Mr Banks); and vi. that Mr Banks would discuss his offer again with his consortium, including funding, deposit value and timeframe to completion. I advised that the Administrators were convening a meeting of the Committee of Inspection (COI) on the morning of 22 November 2019, where offers and a recommendation tabled by the Administrators would be considered by the COI. 58 As to the voluntary administrators' treatment of the ESI payment as a liability on the balance sheet of BMR, Mr Connelly's affidavit drew attention to section 5.5.1 of draft advice received from Deloitte, Toronto, provided to BMR by email on 24 July 2018, which stated that: As discussed above, the performance obligation is satisfied at a point in time, thus, the Upfront Payment of $10 million should be deferred as a liability and recognized as the performance obligation is satisfied. 59 Mr Connelly viewed this advice as being consistent with BMR's initial accounting treatment of the ESI payment received on 16 July 2018 as a liability, reflected the Chief Financial Officer's commentary in an email dated 5 August 2018, and was consistent with other financial statements of BMR. In a letter to Mr Lewis on 12 December 2019, Mr Connelly noted that he "sought and obtained legal advice" on the ESI liability "from both Canadian and Australian lawyers before forming my view". Mr Connelly provided the following characterisation of the ESI payment, which I accept: 30. Both the Draft Deloitte Advice and BMR's financial statements are consistent with my characterisation (based on the information and advice available to me in November 2019) of the Upfront Payment as a liability of BMR as at the date of the administration of BMR and a provable debt because relevant performance obligations had not been satisfied. 31. In forming my view that the Upfront Payment was a debt provable in the administration, I based this assessment on my review of the terms of the ESI agreement, the treatment of the Upfront Payment in BMR's financial statements and my experience as a Registered Liquidator and Chartered Accountant. I also took into account legal advice that I received which is subject to legal professional privilege. 60 Finally, as to the current status of the liquidation and the impact and the effect on the general liquidation if a SPL was appointed (which would also be applicable to the appointment of a reviewing liquidator), I accept Mr Connelly's evidence on the following matters: (a) By 16 March 2020, the liquidators had largely finalised their investigations regarding BMR, including matters which may result in potential recovery pursuant to Part 5.7B of the Corporations Act. (b) On 30 March 2020, ASIC confirmed it did not intend to commence an investigation into BMR or the conduct of its directors. (c) As at 12 April 2021, BMR had realised and the liquidators presently held $189,000 in cash in the liquidation bank account of BMR. (d) Mr Connelly had adjudicated on proofs of debt and held tax clearances from the Australian Taxation Office and the Canadian Revenue Agency allowing him to proceed with distributing funds to creditors and finalising the liquidation, subject to the payment of the liquidator's final remuneration and giving notice of an intention to declare a dividend. The creditors were set to receive a distribution of 14 cents in the dollar if the funds presently held in the liquidators' bank account are available to pay the dividend. (e) That prior to receiving the plaintiffs' originating application, the liquidation was expected to be completed within two to three months. (f) That the liquidators will incur costs and be required to spend time for which they may be entitled to be remunerated in providing assistance to, and responding to requests from, a SPL. (g) Given the limited funds held by the liquidators, it would be necessary to delay distribution to admitted creditors until at least the time the SPL completed their investigations. In those circumstances, the time period of delay may be significant.

Relevant parts of the statutory schemes and legal principles summarised 61 Before turning to the FAOA, it is first necessary to summarise the relevant aspects of the IPS and legal principles concerning the Court's discretion whether or not to appoint a SPL or a reviewing liquidator.

The supervision of external administrators under the IPS 62 Courts have long held a broad supervisory jurisdiction over the conduct of court-appointed liquidators (see Hall v Poolman [2009] NSWCA 64; 75 NSWLR 99 at [61] per Spigelman CJ, Hodgson JA and Austin J; Australian Securities and Investments Commission v Macks (No 2) [2019] SASC 17; 133 SASR 251 at [48]-[51] per Doyle J). This power was extended over all kinds of liquidators under the now-repealed s 536 of the Corporations Act. Since the amendments made by the Insolvency Law Reform Act 2016 (Cth), the Court's supervisory jurisdiction over "external administrators" and "external administration" has been governed by the IPS, which relevantly includes administrators of companies in administration under Pt 5.3A of the Corporations Act and liquidators of companies in voluntary liquidation under Pt 5.5 of the Corporations Act (see s 5-15 and s 5-20 of the IPS). 63 Of relevance to this proceeding, the Court is empowered to take the following steps by way of supervision and regulation of external administrators under Div 90 of the IPS. 64 First, the Court has the power, either of its own initiative (s 90-5) or on the application of specified persons (including ASIC and persons with a financial interest in the external administration of the company (s 90-10)), to "inquire into the external administration of the company". This power of enquiry includes requiring a person who is or has at any time been an external administrator of the company to give information, provide a report or produce a document (ss 90-5(2) and 90-10(4)). 65 Secondly, s 90-15 provides the Court with a broad power to make any order "it think fits in relation to the external administration of a company". Sub-sections 90-15(3) and (4) provide guidance as to the types of orders and matters that may be taken into account in exercising the discretion under s 90-15(1): Examples of orders that may be made (3) Without limiting subsection (1), those orders may include any one or more of the following: (a) an order determining any question arising in the external administration of the company; (b) an order that a person cease to be the external administrator of the company; (c) an order that another registered liquidator be appointed as the external administrator of the company; (d) an order in relation to the costs of an action (including court action) taken by the external administrator of the company or another person in relation to the external administration of the company; (e) an order in relation to any loss that the company has sustained because of a breach of duty by the external administrator; (f) an order in relation to remuneration, including an order requiring a person to repay to a company, or the creditors of a company, remuneration paid to the person as external administrator of the company. Matters that may be taken into account (4) Without limiting the matters which the Court may take into account when making orders, the Court may take into account: (a) whether the liquidator has faithfully performed, or is faithfully performing, the liquidator's duties; and (b) whether an action or failure to act by the liquidator is in compliance with this Act and the Insolvency Practice Rules; and (c) whether an action or failure to act by the liquidator is in compliance with an order of the Court; and (d) whether the company or any other person has suffered, or is likely to suffer, loss or damage because of an action or failure to act by the liquidator; and (e) the seriousness of the consequences of any action or failure to act by the liquidator, including the effect of that action or failure to act on public confidence in registered liquidators as a group. 66 As noted above, s 90-15 is relied upon by the plaintiffs as the source of the Court's power to appoint a SPL, with particular reference to s 90-15(3)(c). The plaintiffs' standing to bring an application for orders under s 90-15 pursuant to s 90-20(1)(a) is not disputed. 67 Thirdly, the Court can appoint a registered liquidator "to carry out a review into a matter that relates to the external administration of the company" (s 90-23(6)). Sections 90-23(7) and (9) are relevant in this case: (7) The Court may exercise the power under subsection (6): (a) on application under subsection (8); and (b) if the Court considers it appropriate to do so. … (9) If the Court appoints a registered liquidator to carry out a review, the Court must specify: (a) the matters in relation to the external administration of the company which the liquidator is appointed to review; and (b) the way in which the cost of carrying out the review is to be determined. 68 It is not disputed that the plaintiffs have standing to bring an application for the appointment of a reviewing liquidator under s 90-23(8)(b). 69 Section 90-27(1)(b) relevantly provides that the costs of the reviewing liquidator forms part of the expenses of the external administration, subject to an order made under s 90-28. 70 Section 90-28 provides for orders that the Court can make after a reviewing liquidator has been appointed but before the review is complete. It relevantly provides: Court orders on application of reviewing liquidator (2) On application by the reviewing liquidator, the Court may make any or all of the following orders in relation to the review: (a) requiring the external administrator of the company or any other person to provide books, information or assistance to the reviewing liquidator; (b) requiring the reviewing liquidator to carry out a review of one or more matters that relate to the external administration of the company and that are specified in the order instead of, or in addition to, the matters referred to in paragraph (1)(a); (c) accepting the resignation of the reviewing liquidator, and appointing another registered liquidator as reviewing liquidator for the matter or matters; (d) any other order that the Court thinks fit. Court orders on application by a person with a financial interest (3) On application by a person mentioned in subsection (4), the Court may make any or all of the following orders in relation to the review: (a) requiring the reviewing liquidator to carry out a review of one or more matters that relate to the external administration and that are specified in the order instead of, or in addition to, the matters referred to in paragraph (1)(a) of this section; (b) removing from office the reviewing liquidator, and appointing another registered liquidator as reviewing liquidator for the matter or matters; (c) any other order that the Court thinks fit. (4) The persons who may make an application under subsection (3) are: (a) a person with a financial interest in the external administration of the company; or (b) an officer of the company. 71 Section 90-29 provides that the Insolvency Practice Rules may provide for and in relation to reviews under Subdiv C. Relevantly, r 90-22(1) of the Insolvency Practice Rules (Corporations) 2016 (Cth) provides that a reviewing liquidator has the following powers: … (b) to interview any parties to the review; (c) to direct any of the parties to the review to give a written statement about a specified matter in the form, and within the period, specified by the reviewing liquidator; (d) to direct the external administrator to produce specified books relating to the external administration; (e) any other power necessary for, or reasonably incidental to, carrying out a review. 72 Rule 90-22(3) of the Insolvency Practice Rules states that a reviewing liquidator has the following duties: (a) if the person is given a direction under subsection (1) but fails to comply with it - to carry out the review on the basis of the information available to the reviewing liquidator; (b) to act independently and in the interests of creditors; (c) to avoid actual and apparent conflicts of interest. 73 Finally, the "parties to the review" are defined in r 90-22(4) of the Insolvency Practice Rules as follows: (a) the external administrator; (b) any employees or other persons providing services to or for the administrator in relation to the external administration; (c) any third parties in relation to whom an expense relating to the external administration has been incurred. 74 Most of the balance of Subdiv C, Div 90 of the IPS is directed to conducting a review of an external administrator's remuneration and expenses. However, the language in s 90-23(6), "carry out a review into a matter that relates to the external administration of a company", alongside the powers given to a reviewing liquidator under the Insolvency Practice Rules and the orders they can seek under s 90-28, are broad enough to encompass a review of an external administrator's conduct more generally. 75 This reading of s 90-23(6) is supported by the Explanatory Memorandum to the Insolvency Law Reform Bill 2015 (Cth). At [6.23] of the Explanatory Memorandum, in a comparative table about the key features of the Bill, it is stated: … ASIC and the Court may also appoint a reviewer to review and report on reasonableness of the remuneration and costs incurred, or any other matter relating to an external administration. The purpose of the report is to provide information for interested parties to exercise their rights in relation to the administration, such as to remove the liquidator or challenge the liquidator's remuneration. The review is not determinative of the issues considered. … 76 This is further emphasised at [6.144] of the Explanatory Memorandum, which states (emphasis added): ASIC, the Court, creditors or members of a company may appoint a registered liquidator to review the external administration of the company. Such a review may look at a range of matters, including whether the remuneration of the external administrator is reasonable and whether costs and expenses have been properly incurred. 77 As such, it is evident the Court has power to appoint a reviewing liquidator to investigate the plaintiffs' concerns. The issue remains, however, whether that discretionary power should be exercised. 78 It is also important to note that there is an important difference between a SPL and reviewing liquidator. While a SPL acts as a liquidator of the company and may be authorised to take steps on behalf of the company in liquidation, such as pursuing claims against third parties, a reviewing liquidator, despite his or her title, is not a liquidator of the company. The function of a reviewing liquidator is only to review and report to the Court on specified matters concerning the external administration of the company, rather than to take any step in the liquidation.

Principles concerning appointment of special purpose liquidators 79 The principles guiding the exercise of the Court's discretion to appoint a SPL can be summarised as follows. 80 Since the introduction of the IPS, the Court's power to appoint a SPL is found in the Court's general power under s 90-15(1) to "make such orders as it thinks fit in relation to the external administration of the company". Section 90-15(3)(c) expressly states that the power in s 90-15(1) includes the power the make an order that another registered liquidator be appointed as an external administrator of the company (see [65] above). 81 Prior to the introduction of the IPS, the power to appoint a SPL was found in s 511 of the Corporations Act with respect to companies in liquidation and s 447A for companies in voluntary administration. Section 511 of the Corporations Act relevantly provided that the Court could not make an order under that section unless it was "just and beneficial" to do so. While that language is not found in s 90-15, authorities in both this Court and the NSW Supreme Court have noted that principles relevant to the exercise of the Court's discretion under repealed s 511 continue to provide a useful guide. 82 In GDK Projects Pty Ltd, Umberton Pty Ltd (in liq) v Umberton Pty Ltd (in liq) [2018] FCA 451, Farrell J at [33] made the following remarks (emphasis added): The power to make orders conferred by s 90-15(1) contains no equivalent of s 511(2) which permitted the Court to accede to an application "if satisfied that … the exercise of power will be just and beneficial". The power is, in its terms, unconstrained. Section 90-15(4) lists some matters the Court is entitled to take into account but that list is expressed to be "[w]ithout limiting the matters which the Court may take into account when making orders". In Walley, in the matter of Poles & Underground Pty Ltd (Administrators Appointed) [2017] FCA 486, Gleeson J observed at [41] that the question of whether to exercise the power under s 90-15 of Sch 2 can be answered by reference to principles that applied to the exercise of the discretion under the provisions previously contained in ss 479(3) and 511. I agree that those cases can be a useful guide. Despite the breadth of the power conferred by s 90-15(1), it is difficult to envisage circumstances where the power would be exercised if the Court could not be satisfied that it would be just and unless the applicant had demonstrated sufficient utility to the external administration. See also: Re ACN 152 546 453 Pty Ltd (formerly Hemisphere Technologies Pty Ltd) (in liq) [2018] NSWSC 1002 at [20] per Gleeson JA; Re Atlas Construction Group Pty Ltd (in liq) [2018] NSWSC 1189; 129 ACSR 238 at [91] per Ward CJ in Eq. 83 In Deputy Commissioner of Taxation, Italian Prestige Jewellery Pty Ltd v Italian Prestige Jewellery Pty Ltd (in liq) [2018] FCA 983; 129 ACSR 115 at [34], Markovic J set out the following criteria as a guide for the Court's discretion to appoint a SPL under s 90-15 (incorporating Gleeson J's analysis in Deputy Commissioner of Taxation, ACN 154 520 199 Pty Ltd (in liq) v ACN 154 520 199 Pty Ltd (in liq) [2017] FCA 444 at [64]-[85] when considering the now repealed s 511 of the Corporations Act): … (1) there are matters that require investigation by a liquidator with a view to possible recovery for creditors; (2) the current liquidators have insufficient funds and insufficient prospects of obtaining funding to pursue an investigation; (3) a creditor is prepared to fund investigations and recovery actions but only on the condition that another liquidator be appointed; and (4) such an appointment would be beneficial to the winding up and the creditors as a whole: … 84 With respect to the first of those criteria, Gleeson J in Melhelm Pty Ltd, Boka Beverages Pty Ltd (in liq) v Boka Beverages Pty Ltd (in liq) [2019] FCA 1184; 138 ACSR 95 said at [58]-[59]: 58 As to the first matter, it is necessary to identify with specificity the "special purposes" (or powers) for which the appointment of the special purpose liquidator is sought: Atlas at [90] citing, inter alia, GDK Projects at [2] and Hemisphere Technologies at [22]. Examples of purposes that have been identified as matters for investigation by an SPL include whether any of the directors or officers of a company breached their statutory and or fiduciary duties to the company; whether transactions between the company and a specified third party were voidable transactions within the meaning of s 588FE of the Act; any dealing with an asset owned legally or beneficially by the company to a specified third party; and any claim that the company may have or may have had against a specified third party. 59 It is not necessary or appropriate to make findings on the potential claims in determining the application for the appointment of the SPLs: GDK Projects at [36]; Italian Prestige Jewellery at [37]. 85 As these passages make clear, the special purposes for which the appointment of a SPL is sought are a primary consideration for the Court in assessing whether granting such an application would be just and of sufficient utility to the external administration. 86 While Markovic J's summary of relevant principles in Italian Prestige and Gleeson J's remarks in Melhelm were also cited with approval in Shangri-La Construction Pty Ltd v GVE Hampton Pty Ltd (in liq) [2021] VSC 161 at [83], Connock J at [84] remarked that these criteria should not confine the circumstances in which the power to appoint a SPL under s 90-15(1) can be exercised (footnotes omitted): Although it may be appropriate to appoint an SPL in the circumstances helpfully described by Gleeson J in Melhelm, it is to be remembered that, as the New South Wales Court of Appeal recently observed in Glenfyne International Holding Ltd v Glenfyne Farms International AU Pty Ltd (in liq); Glenfyne International Ltd v GI Commercial Pty Ltd (in liq) (Glenfyne International), the language of the section is not so constrained, and regard is to be had to the broad terms of the section and the particular circumstances before the court. In the case of Re ACN 152 546 453 Pty Ltd (formerly Hemisphere Technologies Pty Ltd) (in liq) (Hemisphere), Gleeson JA made similar observations, but noting as Farrell J did in GDK Projects, that it is difficult to envisage in the abstract, circumstances in which the power would be exercised if the court could not be satisfied that it would be just and of sufficient utility to the external administration to make the appointment. 87 Justice Connock identified two common examples of where SPLs are appointed at [85] (footnotes omitted): Whilst the circumstances in which an SPL will be appointed will vary from case to case, a review of the authorities reveals that two common examples are where the liquidator is prevented from investigating or pursuing causes of action which will benefit creditors because of an actual or perceived conflict of interest, or where it has been demonstrated that there are matters that require investigation with a view to possible recovery for creditors in circumstances where it is of utility and just for such matters to be investigated by a different liquidator. The desirability of investigations being pursued by liquidators who are independent and seen to be so was also recently referred to by Markovic J in Phoenix. 88 The plaintiffs here relied heavily on the evident conflict the incumbent liquidators would face in seeking to investigate their own conduct as voluntary administrators. 89 Drawing on relevant caselaw, Reeves J in Markey (Liquidator), Bestjet Travel Pty Ltd (in liq) v Bestjet Travel Pty Ltd (in liq) [2020] FCA 1881 at [19] identified the following factors as providing useful guidance as to whether a SPL should be appointed: (a) whether the plaintiff has identified with specificity the "special purpose" for which the appointment is sought; (b) whether the appointment of a special purpose liquidator would ensure that "confidence in the integrity, objectivity and impartiality of the administration is maintained"; (c) whether the special purpose is "substantial and serious"; and (d) the public interest. 90 Finally, reference should be made to Markovic J's judgment in Commonwealth of Australia (Department of Education, Skills and Employment) v Phoenix Institute of Australia Pty Ltd (in liq) [2020] FCA 937, upon which the plaintiffs relied. In appointing a SPL in that case, Markovic J noted the following factors as weighing in favour of exercising the Court's discretion: (a) that the evidence established that there were "matters that require investigation by a liquidator with a view to possible recovery for creditors" (at [58]); (b) the plaintiff was willing to fund the SPL but not the liquidator, because of the "disharmony" and "different views" between it and the liquidators which could "give rise to a difficult working relationship" (at [61]); (c) a copy of the proposed funding agreement for the SPL was in evidence (at [63]); and (d) there was "no doubt that the appointment of the [SPL] would be beneficial to the winding up and the creditors as a whole", as if the SPL's investigations did not result in any proceedings or recovery, "the Department [would] simply bear the burden of the cost of those investigations" (at [64]). 91 It is appropriate to note at this stage that there is no dispute that, on the basis of plaintiffs' affidavit evidence, there is a consortium of shareholders willing to bear the burden of the costs of the SPL, which weighs in favour of the plaintiffs' primary claim.

Principles concerning appointment of reviewing liquidators 92 Existing caselaw provides limited guidance on the principles guiding the appointment of reviewing liquidators under s 90-23 of the IPS. There appears to be no reported case in which a reviewing liquidator has been sought to be appointed to review the general conduct of external administrators. Furthermore, there appears to only be one decided case in which a party has made an application for the appointment of a reviewing liquidator to investigate the remuneration of the incumbent liquidator: see Liquidators of Y Pty Ltd and Diboll [2020] FamCA 180. In dismissing the application in that case, Gill J at [25] observed (emphasis in original): If all of these hurdles were to be overcome, the appointment of the reviewing liquidator by the Court is conditioned by 90-23(6), that is whether the Court considers that it is appropriate to make the appointment. This is the key provision conferring the discretion upon the Court to appoint the reviewing liquidator. 93 I respectfully agree. The key word governing the Court's discretion to appoint a reviewing liquidator is that it must be "appropriate" for the Court to do so (see s 90-23(7)(b) of the IPS). 94 In my view, s 90-23 of the IPS can be seen as an extension of the Court's supervisory jurisdiction over external administrators and in particular the power of the Court under former s 536 of the Corporations Act to inquire into the affairs of a liquidation (for a history of s 536, see the appendix to Bl and Gy International Co Ltd v Hypec Electronics Pty Ltd [2010] NSWSC 959; 79 ACSR 558). As numerous authorities make clear, the Court's supervisory jurisdiction over external administrators is directed to the "regulation, supervision, discipline and correction" of external administrators "with a view to upholding the public interest in the honest and efficient administration" of companies in external administration: see Hypec Electronics at [41] per Barrett J; Australian Securities and Investments Commission v Macks (No 5) [2021] SASC 12 at [23] per Doyle J and the cases cited therein. 95 The primary consideration in determining if it is "appropriate" to appoint a reviewing liquidator under s 90-23 in this case is whether the Court is satisfied that it is necessary to investigate the conduct of an external administrator to uphold the public interest in the honest and efficient external administration of the company. Drawing upon the statutory scheme and caselaw with respect to the appointment of a SPL, the following factors are relevant to the Court's discretion: (a) The moving party must adduce evidence which at least suggests that the external administrators have engaged in conduct which requires regulation, supervision, discipline or correction by the Court. It is not necessary nor appropriate for the Court to make final findings as to alleged conduct which is sought to be reviewed (see, by analogy, Melhelm at [59] per Gleeson J and the cases cited therein). However, a reviewing liquidator should not be appointed to merely review commercial decisions made by an external administrator acting bona fide: see, by analogy, Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd (1989) 19 NSWLR 434 at 440 per McLelland J. (b) The "functions" or "matters" for investigation by a reviewing liquidator must be stated with sufficient clarity to satisfy the Court that they require investigation (see s 90-23(9)(a)). Broadly-expressed matters for investigation, unsupported by evidence, are unlikely to justify an appointment. This view is further supported by the fact that on application of the reviewing liquidator (s 90-28(2)(b)), or by an officer of the company or a person with a financial interest in the external administration (ss 90-28(3)(a) and 90-28(4)) before a review is completed, the Court may replace or include additional matters for review. (c) The Court should give significant weight to whether the appointment of a reviewing liquidator would be just and beneficial for the interests of the general body of creditors. This will necessarily require the Court to balance a number of considerations, such as the views of creditors towards the proposed review, whether the investigations of a reviewing liquidator could potentially lead to recoveries for creditors, and the potential for the review to cause further delay or expense in the finalisation of an external administration. (d) The proposed reviewing liquidator must have a sufficient degree of independence from the external administration and the specific interests of particular creditors (see r 90-22(3)(b) and (c) of the Insolvency Practice Rules). The appointment of a reviewing liquidator should not be used for the vindication of the private rights of creditors (see, by analogy, Hypec Electronics at [41] per Barrett J). (e) Section 90-27(1)(b) of the IPS provides that the costs of a reviewing liquidator "forms part of the expenses of the external administration of the company", subject to an order of the Court under s 90-28 (see s 90-27(2)). Thus, a relevant factor for the Court to consider is the expense incurred to the external administration by the appointment of a reviewing liquidator (see s 90-23(9)(b)). An application by certain persons with a financial interest in the company for orders that they bear the costs of a reviewing liquidator may therefore weigh in favour of the Court exercising its discretion. 96 As with the plaintiffs' primary claim, the plaintiffs' evidence establishes that a consortium of shareholders is willing to fund the expenses of a reviewing liquidator if successful on its alternative claim.

The primary claim: appointment of a special purpose liquidator 97 Two questions arise for consideration and determination in relation to the plaintiffs' primary claim, namely: (a) The threshold issue: Does this Court have the power to appoint a SPL for the "special purposes" sought to be investigated by the plaintiffs?; and (b) The discretion issue: In any event, should the Court appoint a SPL in the exercise of its discretion under s 90-15 of the IPS? 98 For the following reasons, both questions should be answered in the negative. Accordingly, the plaintiffs' primary claim must be rejected.

The threshold issue 99 The special purposes for which the SPL is sought to be appointed by the plaintiffs are set out at [40] above. As was made clear by the plaintiffs' written submissions, the primary purpose for which the SPL is sought to be appointed is to investigate what they describe as the "hasty sale" of BMR's assets in November and December 2019 while the company was in voluntary administration, which they allege "could lead to a recovery of CAD$10 [million]". The plaintiffs claim that the voluntary administrators should not have accepted the ESI payment as a provable debt. 100 With particular reference to special purposes [1(c)], if a SPL was appointed on the terms sought by the plaintiffs, it would authorise the SPL to conduct an unrestricted investigation into all aspects of the liquidators' conduct while they were administrators. Even if the SPL's special purposes were limited to potential claims arising out of the sale process described above, it would necessarily still involve an investigation of the voluntary administrators' conduct 101 Thus, a threshold issue for this Court is whether, with reference to Brereton J's judgment in Honest Remark Pty Ltd v Allstate Exploration NL [2006] NSWSC 735; 234 ALR 765, a SPL can be appointed to investigate the incumbent liquidators in relation to their conduct as voluntary administrators immediately preceding the liquidation. 102 In Honest Remark, the defendant (Allstate), who was in deed administration, sought summary dismissal of the plaintiffs' application seeking appointment of a special purpose administrator. A special purpose administrator was sought to investigate transactions entered into by Allstate with Macquarie Bank Ltd, alleging that deed administrators had acted in a manner prejudicial to the interests of the members and unsecured creditors of the defendant, both in that role and previously as voluntary administrators. The Court was required to decide whether, under the now repealed ss 447A or 447E of the Corporations Act, or the Court's inherent jurisdiction, the Court had power to appoint an additional administrator to investigate the conduct of the incumbent administrator. 103 After reviewing some caselaw, Brereton J importantly concluded at [62] that "there is no power to appoint a special purpose liquidator for the purpose of investigating the conduct of the original liquidator as such". The primary basis for this conclusion was explained by his Honour at [58]-[59] and [61]-[62], which are extracted below (emphasis added): [58] Accordingly, while Honest Remark's submission that special purpose liquidators have been appointed in circumstances where the potential claim was against the liquidator (plaintiff's supplementary submissions on summary disposal application, para 7) is in terms correct, no case has been discovered in which a special purpose liquidator has been appointed to investigate the conduct of one of the original liquidators in the conduct of the relevant liquidation. Rather, they have been appointed to investigate or conduct claims arising apart from the liquidation, in respect of which the liquidator has or may have a conflict of interest and duty. [59] There are very good reasons why this is so. The investigation of the conduct of a liquidator qua liquidator is not part of the matters entrusted to a liquidator; it is a supervisory function of the court. The court does not readily embark on or permit inquiries into the conduct of liquidators, in the absence of conduct liable to attract sanctions or control for what might broadly be described as disciplinary reasons: Northbourne Developments Pty Ltd v Reiby Chambers Pty Ltd (1989) 19 NSWLR 434 at 443; 1 ACSR 79 at 87; 8 ACLC 39 at 43; Belvista Pty Ltd v Murphy (1993) 11 ACSR 628 at 630 (Belvista). As the cases referred to by Mullins J in McDonald show, courts protect their liquidators by refusing to allow them to be the subject of proceedings without leave. As Young J has said in Re Biposo Pty Ltd (1995) 120 FLR 399 at 403 (Re Biopso): The liquidator, even in a voluntary winding up, has very strong powers which have been given to him under the Corporations Law, virtually as the delegate of the court, or the delegate of the Australian Securities Commission, to see that fair play is done between the competing interests in a liquidation. Up until the bulk of the work became so heavy and, indeed, as is still the case in some other jurisdictions, the matters which under New South Wales law are entrusted to a liquidator were part of the functions of a court official. The court will be very jealous of its delegate exercising the powers that it is given. The court will take every precaution to make sure that those powers are used impartially and for a proper purpose. The corollary of this is that the court will not permit its officer to be sued by a creditor or have an inquiry made under s 536 unless it is satisfied that there is a prima facie case: Re Siromath Pty Ltd 9 ACLC 1583 at 1590. … [61] A special purpose liquidator is appointed to co-exist with the existing liquidators, to fulfil a specific purpose which would otherwise form part of the responsibilities of the original liquidator, but which is carved out from those usual responsibilities because of difficulties in the original liquidator performing it. Because the investigation of the conduct of a liquidator is not part of the matters entrusted to a liquidator, but a supervisory function of the court, an investigation by one of several liquidators into the conduct of another in the liquidation does not involve carving out of the liquidation a part of the ordinary responsibilities of the liquidator. To the contrary, it involves circumventing the ordinary and proper procedures for supervision of liquidators, and the protections that attend them. [62] In my opinion, there is no power to appoint a special purpose liquidator for the purpose of investigating the conduct of the original liquidator as such. As has been seen, it is not the duty of a liquidator (or one of several liquidators) to investigate allegations against themselves or some of them: Re Bond. Such an investigation is not part of the administration, and it cannot therefore be carved out of the administration and given to a special purpose liquidator. In the terms used by Chitty J, it is not a matter arising in the course of the liquidation, conduct of which can be allocated to one of several liquidators. In the terms of s 473(8) of the Corporations Act, it is not a thing required or authorised by the Act to be done by a liquidator. 104 At [63], Brereton J concluded that the position was no different with respect to an administrator. 105 As mentioned, there is apparently no reported case in which a SPL has been appointed to investigate the conduct of an incumbent liquidator either in that capacity or their prior capacity as an administrator (see Honest Remark at [58]). Moreover, Brereton J's conclusion in Honest Remark has been cited with approval in cases following the enactment of the IPS: see Shangri-La at [90]-[91] per Connock J; Re Aus Streaming (in liq) [2020] VSC 313 at [49]-[50] and [66] per Connock J; see also Commonwealth of Australia, Re ACN 093 117 232 Pty Ltd (in liq) v ACN 093 117 232 (in liq) [2018] FCA 1922 at [33] per Derrington J. In Shangri-La, after extracting relevant parts of Honest Remark, Connock J at [91] observed: Although these observations were made prior to the introduction of sch 2 and s 90-15, their underlying force appears to continue to resonate in the context of applications for the appointment of SPLs made pursuant to s 90-15 - at least so far as the exercise of discretion is concerned. Whether or not the same force remains in relation to the question of the court's power under s 90-15 to make such an order need not be explored given the facts of the present application and the confined nature of the SPL's purposes. If the occasion arises for this issue to be considered in the future, no doubt one of the relevant matters will be the extent to which, if any, the specific review powers set out in sub-d C of div 90 of sch 2 impact upon the proper construction of s 90-15(1) in this regard. 106 I did not understand the plaintiffs to challenge the correctness or the ongoing force of Brereton J's reasons in Honest Remark with respect to applications made under s 90-15 of the IPS. Rather, the plaintiffs' primary contention was that the circumstances of this case are distinguishable from Honest Remark because the application to appoint a SPL to BMR is to investigate conduct which occurred before the liquidation, namely during the voluntary administration. To support this proposition, particular reliance was placed on Brereton J's reference to Santow J's decision in Hill v David Hill Electrical Discounts Pty Ltd (in liq) [2001] NSWSC 271; 37 ACSR 617. In Hill, Santow J acceded to an application for the appointment of a new liquidator and removal of an incumbent liquidator, who had also been the voluntary administrator and deed administrator, in circumstances where a referee report ordered by the Court established sufficient prospects of a finding of serious misconduct against the liquidator for conduct which occurred during deed administration. At [55], in summarising Santow J's decision, Brereton J in Honest Remark concluded: … Santow J held that, in light of the findings of a referee, there was an urgent need for an impartial liquidator with no interest in the outcome to investigate whether action should be brought against the deed administrator for insolvent trading, and that the original liquidator (who had been the deed administrator in question) should be removed and replaced. Although the conduct in question arose in the course of the deed administration, it was a claim that arose preceding the liquidation, and did not involve examination of the liquidator's conduct in the liquidation, but his conduct as deed administrator before the liquidation. 107 Indeed, after reviewing Hill and a number of other authorities, Brereton J stated at [58] that the plaintiffs had demonstrated that SPLs "have been appointed to investigate or conduct claims arising apart from the liquidation". 108 While I accept that Brereton J drew a distinction between the appointment of a SPL to investigate conduct during liquidation as opposed to prior or apart from the liquidation, for the following reasons this distinction does not assist the plaintiffs. 109 First, as the facts of Honest Remark reveal, Allstate was in deed administration. The conduct of the deed administrator which the plaintiffs sought the SPL to investigate occurred both during the deed administration and in his previous role as voluntary administrator. As such, I do not accept that Brereton J's remarks at [58] were intended to draw a distinction between conduct during liquidation and another preceding form of external administration. Indeed, this would be contrary to the factual premise on which Brereton J concluded that the Court did not have the power to appoint a special purpose administrator in Honest Remark. 110 Secondly, while Brereton J did not expressly distinguish or disagree with Santow J's reasoning in Hill, it is important to note his Honour's discussion of Re George A Bond & Co Ltd (1932) 32 SR (NSW) 301 (Re Bond) at [47]-[48]. In Re Bond, contributories of a company alleged that the sale of its assets during voluntary liquidation occurred at a significant undervalue, and they applied for the removal of the liquidator. In summarising Re Bond, Brereton J noted at [47] that Long-Inness J held that a "prima facie case of misconduct [by a liquidator] might require removal in some, though not necessarily all, cases …". Where a liquidator is faced with a claim for misconduct against themselves, Brereton J saw Re Bond as standing for the proposition that in those circumstances, the "duty as liquidator did not exceed a passive duty to take no advantage of his positon such as to impede the prosecution of the claim, and an active duty to take such action as would permit of such prosecution". Justice Brereton concluded at [48] that "Re Bond therefore supports the proposition that a liquidator (or administrator) does not have a duty to investigate allegations against himself or herself of alleged misconduct in the discharge of the office of liquidator". 111 Thus, Santow J's decision in Hill can properly be understood as falling within the categories of case referred to by Long-Inness J in Re Bond where misconduct by a liquidator might require removal from office, and the appointment of a new liquidator. Hill was not a case concerning the appointment of a SPL, and does not contradict Brereton J's conclusion at [61] in Honest Remark that a SPL is appointed "to co-exist with the existing liquidators, to fulfil a specific purpose which would otherwise form part of the responsibility of the existing liquidators". The investigation of the conduct of the incumbent liquidator in their previous role as voluntary administrator cannot be carved out of their existing responsibilities, as they were under no duty to conduct such investigations (Re Bond; Honest Remark at [48]). 112 Thirdly, if there is any inconsistency between Santow J's reasons in Hill and Brereton J's reasons in Honest Remark, the latter should be preferred. Indeed, it can reasonably be inferred from the reasons for judgment in Hill that there was no dispute before Santow J as to the propriety of the new liquidator investigating the conduct of the existing liquidator as deed administrator. 113 Justice Brereton's reasons are strengthened by the current statutory regime for the supervision of administrators and liquidators under the IPS. As has been noted above, the Court's specific powers of supervision in the IPS, such as to inquire into the conduct of external administrators (ss 90-5 and 90-10) and to appoint a reviewing liquidator to investigate matters relating to the external administration of a company (s 90-23(6)), apply equally to both liquidators and administrators. The availability of these alternative statutory remedies for the supervision of the conduct of administrators and liquidators reinforces Brereton J's strong observations that SPLs should not be appointed to circumvent "the ordinary and proper procedures for supervision of liquidators, and the protections that attend them" (at [61]). 114 Courts have jealously guarded and protected their supervisory jurisdiction over liquidators, in particular by not permitting proceedings to be brought against a liquidator without the Court's leave (see Aardwolf Industries LLC v Riad Tayeh [2020] NSWSC 299 at [81]-[89] per Rees J and the authorities cited therein). This requirement reflects the Court's concern to ensure liquidators can carry out their official functions without undue encumbrance and as a means by which the Court can protect its own processes for the supervision of liquidators (see Eighty Second Agenda Pty Ltd v Handberg [2014] VSC 665 at [18]-[22] per Croft J). 115 In what can aptly be described as the uniform code established by the IPS, the supervisory jurisdiction of Courts over liquidators has been extended over all forms of external administration. As such, there is no reason of policy or principle to draw the distinction urged by the plaintiffs here. This Court does not have the power under s 90-15 of the IPS to appoint a SPL to investigate the conduct of the incumbent liquidator either as liquidator or in a previous role as voluntary or deed administrator. 116 For these reasons, the plaintiffs' primary claim for the appointment of an SPL must fail.

The discretion issue 117 It is strictly unnecessary to decide this issue given my conclusion on power. However, for the following reasons, had it been necessary, I would have also refused to appoint a SPL in the exercise of the Court's discretion. 118 First, regard should be had to the observations of Brereton J in Honest Remark at [107], who concluded that, even if there was power to appoint a SPL, the discretionary factors weighed in favour of dismissing the plaintiffs' claim on a summary basis (emphasis added): Even if there were any available source of power, on the facts alleged in Honest Remark's case, taken at their highest, it would be manifestly unreasonable to make the orders sought. Courts have emphasised the importance of claiming the appropriate remedy and invoking the appropriate proceeding in cases that involve supervision of liquidators and administrators. The remedy which Honest Remark seeks and the proceedings which it has invoked are, having regard to the functions of a special purpose liquidator/administrator, and the statutory scheme, and the Court's and the legislature's concern to control derivative actions and claims against liquidators and administrators, quite inapt, and would circumvent the conditions and protections that attend the several appropriate remedies for the supervision of administrators and review of their decisions, under s 236 (and ss 237 and 241), s 447E and s 1321. No court acting reasonably could grant the relief sought. 119 While Brereton J's reasoning related to a different statutory scheme, it continues to hold force under the IPS. As noted above, the IPS establishes a comprehensive suite of statutory remedies for the supervision of external administrators. 120 Secondly, the plaintiffs submitted that the appropriate threshold for a "special purpose" which requires investigation by a SPL is that stated by Derrington J in Australia at [4], namely that there "is a good reason for the appointment of a special purpose liquidator … [which] usually involves the assertion of some suspicion as to the inability of the general purpose liquidator to fully administer the winding up". The plaintiffs submitted that the phrase "some suspicion" sets a low bar. 121 While it may be accepted that the Court is not required to make final findings on the plaintiffs' claims, the caselaw has also emphasised that the appointment of a SPL must have "sufficient utility" and be "just" for the interests of creditors (see [82] above). That necessarily requires the plaintiffs to demonstrate that the appointment of a SPL for the specified special purposes could potentially lead to a recovery for the benefit of creditors (see Italian Prestige at [34] per Markovic J; Shangri-La at [85] per Connock J). On the evidence before me, I am not persuaded that the plaintiffs have discharged this onus. 122 As noted above, the investigations sought by the plaintiffs essentially boil down to two issues: (a) the urgency of the sale process; and (b) the treatment of the ESI payment as a provable debt. 123 In relation to the urgent sale process, the Confidential Report to the Committee of Inspection and Administrators' Report to Creditors prepared by the voluntary administrators are revealing (as extracted at [54] and [55] above). As those reports make clear: At the time of the administrators' appointment, BMR had cash reserves of approximately $25,000, and its subsidiaries less than $1,500. The debts incurred by the administrators for advertising and legal fees either had or were to shortly exhaust those cash reserves. The combined unsecured operational and other creditors of BMR and its subsidiaries exceeded $1.8 million, of which 83% had been outstanding for over 90 days; The subsidiaries of BMR had critical past due payables of approximately $1.2 million; and BMR's subsidiaries were unlikely to be able to continue operational and exploration activities as a going concern unless funding was secured in the medium term. 124 In those circumstances, it appears incontrovertible that BMR was in a dire financial situation and urgently needed cash flow to meet its outstanding debts and liabilities. The plaintiffs' evidence to the contrary amounted to no more than mere assertions by Mr Lewis and Mr Banks in correspondence with the voluntary administrators that BMR's cash flow position as understood by the voluntary administrators was based on misunderstandings of matters such as "the due dates for renewals of mining licences" and the position of BMR's employees and consultants. That evidence alone is insufficient to establish that there was undue urgency to the sale process, nor importantly that an investigation into the circumstances of the urgency could lead to a recovery for the benefit of creditors. 125 As to the treatment of the ESI debt, the plaintiffs repeatedly emphasised that pursuant to cll 3.1 and 3.2 of the ESI Agreement (see [23] above), the CAD$10 million "set-off" or credited against the purchase price paid by Weston for BMR was prima facie non-refundable and should not have been accepted by the administrators as a provable debt. The plaintiffs submitted that "had that not been accepted to proof the sale would have yielded about $10 [million] more in cash to the Company, or, if the sale was not acceptable to Weston Energy on such cash terms, Mr Banks' offer may have been more attractive". 126 However, courts are reluctant to interfere with decisions of an external administrator, including commercial decisions, where that external administrator is acting bona fide: Northbourne Developments at 440 per McLelland J; Hall v Poolman at [168]-[169] per Spigelman CJ, Hodgson JA and Austin J; Re McDermott [2019] VSCA 23 at [47] per Wheelan AP, McLeish and Hargrave JJA. There is no suggestion in this case that the voluntary administrators acted other than in good faith with respect to the ESI debt and the Weston offer. The evidence of Mr Connelly, which I accept, indicates that the decision to treat the ESI debt as a liability was based on his review of the ESI Agreement and experience as a registered liquidator after having considered draft advice received by BMR from Deloitte, draft financial statements of BMR, statements by BMR's chief financial officer and legal advice (see [58]-[59] above). 127 Moreover, it is insufficient for the plaintiffs merely to allege that the ESI debt was not a provable debt. The plaintiffs' allegation fails to appreciate that even assuming that the voluntary administrators mischaracterised the ESI debt, the Weston offer was the only offer available to BMR which provided sufficient certainty of cash to maintain the solvency of the company as at 21 November 2019. The only viable alternative was immediate liquidation, which would have deprived BMR of the cash paid by Weston and thereby leaving creditors worse off. The offer by Mr Banks was conditional both upon conducting due diligence and fundraising over a period of two weeks. Leaving to one side the ESI debt, as noted at [123] above, BMR was in desperate need of cash flow to meet its outstanding liabilities. In those circumstances, is not the Court's role to "pronounce upon the commercial prudence" of the administrators' decision to treat the set-off of the ESI debt as valuable consideration for the purpose of considering the Weston offer (Re Mineral Securities Australia Ltd (in liq) [1973] 2 NSWLR 207 at 232 per Street CJ in Eq; see also Re Ansett Australia Ltd [2002] FCA 90; 115 FCR 409 at [41]-[71] per Goldberg J). 128 Thirdly, as Mr Connelly's evidence demonstrates, the appointment of a SPL for the purpose of investigating the sale process would further delay the finalisation of the liquidation of BMR and the distribution of funds to creditors, which before the institution of these proceedings on 19 February 2021 was expected to take 2 to 3 months. The costs incurred by the liquidators in assisting the SPL could also result in a reduction in the final dividend distributed to admitted creditors. In circumstances in which only one creditor, the second plaintiff, supports the application for appointing a SPL, it would not be "just" and "beneficial" for the body of creditors as a whole to accede to the plaintiffs' application. 129 Finally, the plaintiffs were unable to offer an acceptable explanation as to why there was a delay of over 14 months in instituting proceedings in relation to the sale of BMR's assets in November 2019. I accept that Mr Lewis remained in correspondence with the liquidators until September 2020, in which he sought access to various documents and continued to agitate his concerns about the sale process. However, the correspondence of Mr Banks and Mr Lewis with the liquidators clearly raised concerns about the urgency of the sale process and that the ESI debt was not provable almost immediately after BMR entered voluntary administration. This concern was reiterated by Mr Lewis in multiple correspondence to the voluntary administrators (see [49]-[50] above). The bases of the plaintiffs' concern to investigate the sale process and the ESI debt have existed for some time. In the absence of an acceptable explanation, I accept Mr Bender's submission that this delay is fatal to the plaintiffs' application. 130 For these reasons, if it had been necessary, I would have also refused to appoint a SPL to BMR in the exercise of the Court's discretion under s 90-15 of the IPS.

The alternative claim: appointment of a reviewing liquidator 131 Unlike the plaintiffs' primary claim, there is no dispute that the Court has the power to appoint a reviewing liquidator under s 90-23 of the IPS in the circumstances of this case. The issue for consideration is therefore whether a reviewing liquidator should be appointed in the exercise of the Court's discretion. 132 The functions for which the plaintiffs seek to appoint a reviewing liquidator mirror those for appointment of a SPL. For the following reasons, I would decline to appoint a reviewing liquidator in this case for substantially similar reasons to those given above for rejecting the appointment of a SPL. 133 First, as explained at [121] ff above, I am not persuaded that the evidence adduced by the plaintiffs is sufficient to discharge the onus of demonstrating that there are matters concerning the conduct of the external administration by the now liquidators which require investigation by a reviewing liquidator. 134 The evidence in this case does not rise to a level that suggests the voluntary administrators may have breached their obligations under the IPS or Corporations Act, nor that they acted in bad faith. In that light, the proposed matters for investigation by a reviewing liquidator, which evidently relate to the voluntary administrators' decisions to conduct an urgent sale process, admit ESI as a creditor and recommend Weston's offer to the Committee of Inspection, call upon the Court to appoint a reviewing liquidator to investigate commercial decisions made with the assistance of external advisors. It is not the Court's role to supervise the commercial decision-making of external administrators acting in good faith, nor is the appointment of a reviewing liquidator warranted (see [126]- [127] above). 135 Secondly, as with the primary claim, the appointment of a reviewing liquidator would delay the finalisation of the liquidation of BMR, which is not in the interests of the general body of creditors (see [128] above). This is particularly so in light of the powers that the plaintiffs seek to confer on the reviewing liquidator under s 90-22(1)(b)-(e) of the Insolvency Practice Rules (noting that s 90-22(1)(a) cannot be conferred on the reviewing liquidator as this application does not concern a review of remuneration or expenses). Those powers include conducting interviews with any parties to the review, directing any parties to give a written statement and directing the external administrator to produce specified books (see [71] above). As Mr Donnelly's affidavit highlights, this would necessarily result in further delay to the finalisation of the liquidation and distribution to creditors given the limited nature of funds held in the liquidator's bank account. 136 Thirdly, and again fatally to the plaintiffs' application, there is an unexplained delay of over 14 months in instituting these proceedings (see [129] above). 137 For these reasons, I reject the plaintiffs' alternative claim.

Conclusion 138 As the plaintiffs' primary and alternative claims have been rejected, it is unnecessary to consider the other orders sought by them in the FAOA. 139 For all these reasons, the FAOA will be dismissed, with costs, including the costs incurred by the defendant and amicus curiae in responding to the plaintiffs' solicitor's emails dated 20 and 21 July 2021. As noted, the plaintiffs agreed to pay the reasonable costs of amicus. Although the defendant played only a limited role in the proceeding, I think it appropriate that the plaintiffs bear its costs as well. I certify that the preceding one hundred and thirty-nine (139) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Griffiths.