Mentha, in the matter of Griffin Coal Mining Company Pty Ltd (administrators appointed) (No 2) [2010] FCA 1470

Judgment (7 paragraphs)

[1]

Pursuant to s 447A(1) of the Corporations Act 2001 (Cth) (Corporations Act), Part 5.3A of the Corporations Act is to operate in relation to The Griffin Coal Mining Company Ltd (Administrators Appointed) (ACN 008 667 285) (Griffin Coal) and the other companies listed in the Schedule of Companies (collectively, the Companies): (a) as if s 443A(1) provided that the debts and liabilities incurred by the Companies pursuant to the issue of notes referred to in paras 9 and 39 to 41 of the affidavit of Brian Keith McMaster affirmed 13 December 2010 and the documents referred to therein (Additional Note Issue) are debts incurred by the plaintiffs in the performance and exercise of their functions and powers as administrators of the Companies and are the subject of the right of indemnity referred to in s 443D for the purposes of ss 443E and 443F; (b) as if s 443A(1) provided that the debts and liabilities incurred by the Companies, other than Griffin Coal, in their capacity as guarantors of Griffin Coal's obligations under the Additional Note Issue are debts incurred by the plaintiffs in the performance and exercise of their functions and powers as administrators of the Companies and are the subject of the right of indemnity referred to in s 443D for the purposes of ss 443E and 443F; and (c) such that, notwithstanding sub-para (a) and (b) above, if the indemnity of the plaintiffs under s 443D of the Corporations Act is insufficient to meet any amount for which the plaintiffs may be liable arising out of or in connection with the Additional Note Issue, the plaintiffs will not be personally liable to repay such amount to the extent of that insufficiency.
The exhibits marked "Confidential Exhibit BKM-6 - Extension" and "Confidential Exhibit BKM-8" be kept confidential in the court file in proceedings WAD 183 of 2010 by placing the exhibits in a sealed envelope marked "Confidential - Not to be opened by any person without further order of a Judge of this Court and giving the first and second plaintiffs, care of their Solicitor, Corrs Chambers Westgarth, at least 48 hours' prior notice of any application seeking such an order".

REASONS FOR JUDGMENT 1 I made orders on 16 December 2010 under s 447A of the Corporations Act 2001 (Cth) (Corporations Act). These are the reasons in relation to the making of those orders. These reasons to a large extent adopt the written submissions, which I accepted, filed by the plaintiffs. The application was supported by an affidavit of Brian Keith McMaster, who is one of the plaintiffs, affirmed on 13 December 2010. 2 In July 2010, the plaintiffs applied to the Court for orders which would limit their personal liability in respect of funds borrowed by The Griffin Coal Mining Company Ltd (Griffin Coal), repayment of which was guaranteed by certain other companies in the Griffin group of companies. All of these companies are under the administration of some or all of the plaintiffs. 3 I made the orders sought: Mentha; Re The Griffin Coal Mining Company Pty Ltd (admin apptd) [2010] FCA 764. The relevant legal principles, which are uncontroversial, are set out at [21]-[24]. 4 The funding which was obtained in July 2010 was intended to permit the relevant companies in the Griffin group to continue operations to 31 December 2010. 5 Since then, the following significant events have occurred: (a) a further application for extension of the period within which to convene the second meeting of creditors was made, and granted until 25 February 2011: Mentha; Re The Griffin Coal Mining Company Pty Ltd (admin apptd) (No 3) [2010] FCA 1087; (b) a sale agreement was entered on 14 December 2010. 6 Further funding is required in order to allow the companies in the Griffin group to continue operations until the sale is completed. That funding has been arranged by the plaintiffs. 7 As on the last occasion, I am satisfied that there are good reasons for the amount of funding to remain confidential. At the time when Mr McMaster deposed his affidavit affirmed on 13 December 2010 in the present proceedings, no sale agreement had been signed. However, even now that a sale agreement has been signed, I accept that it is still important that confidentiality should be maintained to ensure that the assets of the companies can be dealt with in an orderly fashion while the administration is completed and without creditors exerting pressures to be paid. Moreover, it is a term of the proposed funding that it remain confidential. 8 The additional funding is proposed on materially the same terms as on the last occasion. The amount of funding sought is to allow the companies to continue operating until 31 March 2011. This is an appropriate time period for further funding, making allowance for possible and unanticipated delays in settlement on the sale agreement. The amount of the funding for three months is also appropriate, given that it is about half of the funding actually required for the last six months. 9 Given that there is a proper basis for the funding, and that it is materially similar to the funding obtained on the last occasion, I am prepared to make the proposed orders. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

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