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Judgment - EX TEMPORE 1By originating process filed on 9 May 2012, the applicants, Quentin Olde and Michael Ryan as voluntary administrators of Kavia Holdings Pty Limited (administrators appointed) (receivers and managers appointed) ("Kavia Holdings") and several other entities (together, "Companies") apply under sections 439A and 447A of the Corporations Act 2001 (Cth) for an extension of the convening period for the second meetings of creditors in respect of the voluntary administration of each of the Companies. The convening period in respect of the Companies would presently expire on 15 May 2013 unless extended by the Court. 2The application appears to have been prompted, at least initially, by a request by the receivers appointed to the Companies' assets, which was initially foreshadowed at the first meeting of creditors of the Companies held on 29 April 2013, and confirmed by letter dated 7 May 2013, on the bases to which I will refer below. Notice of the application has been given to the receivers, to the lessor of two properties occupied by one of the Companies, to creditors who have registered security interests on the Personal Property Securities Register as set out in the evidence, and notice was sought to be given to Mr Christopher Crawley, the common director of all of the Companies, although it appears that an email providing that notice was not successfully delivered. Notice of the application has also, properly, been given to the Australian Securities and Investments Commission which has acknowledged receipt of the application and requested the administrators to advise it of the outcome. I infer that it does not otherwise seek to be heard in respect of the application. 3Several other orders are sought dealing with, for example, the means of notification of creditors and the Australian Securities and Investments Commission of any orders made and, importantly, an additional order is sought which would permit potentially interested persons to apply the Court, on giving appropriate notice, which would allow such persons to seek to vary or set aside the orders made. That order provides an important level of protection in an application of this kind to interested parties. I should add that the matter has been called and no parties have sought to appear. 4The application is supported by an affidavit of Mr Matt John Adams, who is a registered and official liquidator and a Managing Director of FTI Consulting, the firm with which Messrs Olde and Ryan, the voluntary administrators, are associated. Mr Adams gives evidence that his affidavit is authorised by the administrators and he has plainly had an involvement with the administration since he chaired the first meeting of creditors of the Companies at which some discussion relevant to the application today occurred. 5Mr Adams' evidence is that the administrators were appointed to Kavia Holdings and the other six Companies in issue on 16 April 2013 under section 436C of the Corporations Act by the Australia and New Zealand Banking Group Limited ("ANZ") as a secured creditor of the companies. On the same date ANZ appointed Messrs Ayres and Parbery as joint and several receivers and managers of the assets and undertakings of the Companies over which ANZ had security and the receivers have been in control of the Companies' assets since that date. I should say something further as to the nature of the Companies' business and assets, which will be relevant to this application, based on the evidence before the Court. 6The Companies appear to have partly separate business activities with some interlinking of their activities and operate four hotels, two of which are located in the central business district of Sydney and the third and fourth in Darling Harbour. All of the hotels have liquor licences and obtain revenue from patrons who purchase food and drinks. Two of the hotels also have gaming machines from which they derive revenue. Kavia Holdings, the first plaintiff in the application, owns the freehold estate from which a hotel, known as the Belvedere Hotel, conducts its business. It also leases the business from Suntrack Holdings Pty Limited, the premises from which the two businesses at Darling Harbour operate. The second plaintiff, Rocks Catering Pty Limited, operates the two businesses at Darling Harbour. The third plaintiff, BVH Management Pty Limited, operates the Belvedere Hotel. The fourth plaintiff, Marsico Holdings Pty Limited, owns the freehold estate from which a hotel, known as "Jackson's on George", operates and operates that hotel. The fifth plaintiff, J & J O'Brien Pty Limited previously operated another hotel. The administrators' evidence is the sixth plaintiff appears, on their investigations to date, no longer to be trading. The seventh plaintiff operates a charter business. It appears that several of the plaintiffs also own other properties to which reference is made in the evidence. 7It will immediately be apparent that there is a degree of complexity and interlinking between the Companies, so far as some of them own assets and others operate businesses on the relevant premises. Mr Adams, in turn, gives evidence that there is a degree of complexity and interrelationship between the companies. He sets out the work undertaken by the administrators to date although, as his affidavit recognises, the Companies' assets are presently under the receivers' control. He also refers to the first meeting of creditors, at which reference was made to the possibility that the receivers would request the administrators to extend the convening period for the second meeting. There was reference to the receivers' advice that they were determining how best to realise the Companies' assets and were likely to need more time with the protection that the voluntary administration process afforded the companies in respect of the moratorium under s 440D of the Corporations Act in relation to the leasehold businesses. The administrators, in turn, noted that they would assess any application by the receivers "in conjunction with the requirements and benefits to the overall body of creditors in making any decision on an application to extend the convening period". 8It should be noted that, first, the reference to that matter at the first meeting of creditors was transparent about the proposition that one impact of extending the convening period would be to extend the moratorium available under s 440B of the Corporations Act in respect of leased premises, and that has properly also been acknowledged in the application before me. Second, the lessor of the Companies' Darling Harbour premises was represented by a senior executive at that meeting, as were other creditors, including employee creditors. Third, there were no questions or objections raised by creditors present at that meeting to the possible extension of the convening period. 9The administrator properly draws attention to the fact that he has received notice from the lessor of the Darling Harbour premises of the existence of a right of termination of the relevant leases arising from the appointment of receivers and managers and voluntary administrators to the relevant company. The lessor cannot presently proceed to terminate the lease by reason of the statutory moratorium. 10By the receivers' letter, which was dated 7 May 2013 to the administrators, they, in turn, identified the reasons that they sought an extension of the convening period as to allow them to continue to trade the business held by two of the relevant companies, particularly in the leased premises, and to attempt to sell that business as a going concern. They also noted, however, that: "We are conscious that the businesses of the Companies are interrelated. Therefore, we also see that there is merit making an application for an extension of the convening period for each of these additional companies." They drew attention to relevant matters in respect of the application, including that they were paying rent to the lessor of the relevant properties, that they were continuing to maintain the employment of staff working at the business, other than persons associated with the directors, and that they had obtained continued supply from trade suppliers to the business. Those matters are expanded by an affidavit of Mr Ayres, who is one of the receivers, which has been read in support of the application, to which I will refer below. 11Mr Adams has, in turn, identified several reasons why he considers that an extension of the convening period, for all of the Companies and not only the two Companies on which the receivers had placed primary focus, was in the best interests of the Companies' creditors, namely that: (a) An extension will assist in maintaining the status quo while the receivers pursue a sale of the business of all or some of the Companies as a going concern, particularly where such a sale may require an assignment of equipment leases or the lease of premises from which the Darling Harbour businesses operate; (b) A sale of the business as a going concern will maximise the prospect of any return to secured creditors, and to the extent that any shortfall to ANZ on the sale of assets is minimised, will reduce the amounts for which ANZ would prove in any subsequent winding-up, and improve the return to unsecured creditors from any claims which might be brought by the liquidator; (c) Importantly, a sale of the businesses as a going concern preserves the prospect of continuing employment for employees of Companies, a matter which is plainly consistent with the objectives of Part 5.3A of the Corporations Act; (d) The administrators have not completed their investigations, by reason of the issues as to access to the Companies' books and records. It is not necessary to reach any finding as to the origin of those issues, which have been the subject of other applications in this Court, other than to note that issues have plainly existed. 12Mr Adams also expresses the view that it is preferable that any extension of time should be for all the Companies, not only the two Companies operating the Darling Harbour premises, because of the intermingling of accounting systems, the fact that some employees work across several Companies and that the Companies have common books and records, some common creditors, and there will be a cost effectiveness of holding meetings for the Companies concurrently, and any prospect of a deed of company arrangement is likely to also take place on a group basis. 13As I noted above, Mr Ayres has also sworn an affidavit in support of the application for an extension of the convening period. He sets out further information as to the nature of the Companies' business to which I have referred above. He expresses the view that the receivers trading the hotel businesses will maximise the prospects of a going concern sale and maximise the sale proceeds of the assets, and indicates the risk that the businesses operating from the leased premises might otherwise have to be closed and their value compromised if the convening period, and implicitly, the moratorium on action by the lessor, is not extended. He notes that employees will continue to be paid during the receivership, and points to his view that a going concern sale will benefit employees, who may obtain continued employment with the Companies or a purchaser, and benefit the lessor whose lease may be assigned to a purchaser of the business, as well as trade suppliers. 14Sections 439A(6) and 447A of the Corporations Act allow the Court to extend the convening period in an application made, relevantly, during that period. The Court's function in determining an application for an extension of time to hold that second meeting is to reach an appropriate balance between the expectation that the administration will be relatively speedy and summary and the countervailing factor that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising a return for creditors: Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611. In Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10], to which Mr Tyson, who appears for the administrators referred, Barrett J observed that: "The function of the Court on an application such as this is, as I see it, to strike an appropriate balance between, on the one hand, the expectation that the administration will be a relatively speedy and summary matter and, on the other, the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders." 15In Re Riviera Group Pty Ltd (admins apptd) (recs and mgrs apptd) [2009] NSWSC 585; (2009) 72 ACSR 352, Austin J summarised the reasons which may support such an extension, in a passage which has frequently been cited subsequently, as including the size and scope of the company's business; complex corporate group structures and inter-company loans; lack of access to the company's financial records; the time needed to execute an orderly process of disposal of assets, which is a matter plainly relevant in this case, including the opportunity to sell the business as a going concern, or the fact that an extension of time is otherwise likely to enhance the return for unsecured creditors; and the impact of any extension on a person whose claim is affected by the statutory moratoriums under Part 5.3A, which is a matter to which I have already referred. 16I also referred above to the interests of employees, which are in this case plainly served by an extension of the convening period, so far as it will both allow them an opportunity of employment by the receivers during the extended period and maximise the prospect that they may be employed by purchasers of the relevant businesses. The fact that the maintenance of a business may be of benefit to employees' interests may properly be taken into account in an application of this kind: Re ABC Learning Centres (admins apptd) (recs and mgrs apptd); (No 8) [2008] FCA 994; (2009) 73 ACSR 478 at [12]; Owen Re RiverCity Motorway Pty Ltd (admins apptd) (recs and mgrs apptd) v Madden [2011] FCA 295 at [27]. The complexity of the sale process, likely to be involved in the sale of several substantial businesses, is also a relevant matter: Mentha, Re Hans Continental Smallgoods Pty Ltd (admins apptd) [2008] FCA 1933 at [26]. The Court can, and also should, give weight to the considered judgment of the administrator as to these matters, to which I have referred above: Owen, Re RiverCity Motorway Pty Ltd (admins apptd) (recs and mgrs apptd) v Madden (No 4) [2012] FCA 1491; (2012) 92 ACSR 255 at [26]. 17I am conscious that the risk of prejudice to third parties as a result of an extension of time must be taken into account, and that issue is particularly significant where the extension of time sought in this matter is relatively lengthy, for a period to 16 September 2013, reflecting the receivers' estimate of the likely time for a sale process. The administrator properly draws attention to the fact that ANZ, which is a secured creditor and likely to be the largest creditor, supports the continuance of the administration. The administrator contends, and it seems likely on the evidence before me, that the interests of the general body of creditors will either be advanced, or at least not disadvantaged, by an extension of time since trade creditors will be allowed the opportunity to continue to supply the Companies, employees will be allowed the opportunity to continue to work in them, and all creditors will benefit from the prospect that the sale proceeds of the relevant businesses are maximised. 18The administrator properly concedes that there is a possible prejudice to Suntrack Holdings Pty Limited, the lessor of the Darling Harbour premises, but notes that the receivers are presently paying the rent on those premises and will continue to do so. It is significant that, as I noted above, Suntrack did not raise objection to the application at the first creditors meeting; it has not sought to be heard in opposition to the application today; and it will have the opportunity to bring any further application, as an interested person, under the form of orders to be made by the Court. It is, of course, not self-evident that Suntrack will in fact be prejudiced by an extension of the moratorium which may be of advantage if that process delivers a tenant of the premises who may seek to acquire the business and assume the obligations under the leases. 19The determination whether to grant an extension of time in a matter of this kind involves, obviously, a weighing process. I am satisfied, by reference to the matters to which I have referred above, that a strong case has been established to extend the period of the convening period, for the reasons I have noted above. I considered whether to grant such an extension for a shorter period than the four month period which was sought by the administrators, recognising that that is a relatively lengthy extension. However, Mr Tyson has pointed out that, on his instructions, and consistent with the evidence before me, it appears that an orderly sale process will require the four-month period. Mr Tyson notes that allowing a lesser period may not assist in conducting an orderly sale process, because it will introduce a degree of uncertainty in that process which would not otherwise exist. In some circumstances, the proper course for a Court will be to grant an extension for a shorter period, and allow the administrator an opportunity to come back to the Court to seek to extend that extension in the facts then prevailing. In the present case, I am satisfied that there is little reason to think that an orderly sale process will be completed within a shorter period that the Court could nominate with any degree of certainty, and it seems to me preferable to grant an extension of time for the longer period sought so as to allow certainty for that process. 20It is, of course, open to the administrators, as it is to other interested persons, to restore the matter before the Court if ultimately an extension of time is not required for the longer period. I note that the administrators have also, appropriately, sought orders of the form contemplated by Lindgren J in Silvia Re Austcorp Group Ltd (admin apptd) [2009] FCA 636, which will permit the meeting to be held at any time during the convening period as extended, if events move more quickly than the administrators presently anticipate. 21For these reasons, I make orders in accordance with the Short Minutes of Order, initialled by me and placed on the file, deleting paragraph 8. I direct that the administrators or their solicitors retain the exhibits at least pending the second meeting of creditors.