Mighty River International Ltd v Mineral Resources Ltd

Federal Court of Australia|2018-12-12|Before: Farrell J

Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), the period within which the plaintiffs must convene the second meeting of creditors in respect of each of Northern Energy Corporation Limited (administrators appointed) ACN 081 244 395 and Colton Coal Pty Ltd (administrators appointed) ACN 140 768 636 (each a Company and together, Companies) required to be held under s 439A of the Corporations Act be further extended up to and including 21 February 2019.
Pursuant to s 447A(1) of the Corporations Act, Part 5.3A of the Corporations Act is to operate in relation to the Companies as if the meetings of creditors of the Companies, required by s 439A of the Corporations Act, may be convened and held at any time during the period as extended under order 1 above, and the period of five (5) business days thereafter, notwithstanding the provisions of s 439A(2) of the Corporations Act.
Liberty to apply be granted to any person, including any creditor of the Company or the Australian Securities and Investments Commission, who can demonstrate sufficient interest to vary the orders sought on the giving of reasonable notice to the plaintiffs, and to the Court.
Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth): (a) Tab 14 of exhibit SJ-1 to the affidavit of Said Jahani affirmed 8 November 2018 is not to be published or disclosed except pursuant to an order of the Court. This order is to operate until 30 June 2022, unless further extended by the Court, and is necessary to prevent prejudice to the proper administration of justice; (b) Tab 15 of exhibit SJ-1 to the affidavit of Said Jahani affirmed 8 November 2018 is not to be published or disclosed except pursuant to an order of the Court. This order is to operate until 30 June 2022, unless further extended by the Court, and is necessary to prevent prejudice to the proper administration of justice; (c) Tab 16 of exhibit SJ-1 to the affidavit of Said Jahani affirmed 8 November 2018 is not to be published or disclosed except pursuant to an order of the Court. This order is to operate until 30 June 2022, unless further extended by the Court, and is necessary to prevent prejudice to the proper administration of justice; (d) Tab 18 of exhibit SJ-1 to the affidavit of Said Jahani affirmed 8 November 2018 is not to be published or disclosed except pursuant to an order of the Court. This order is to operate until 1 May 2019, unless further extended by the Court, and is necessary to prevent prejudice to the proper administration of justice; (e) Tab 20 of exhibit SJ-1 to the affidavit of Said Jahani affirmed 8 November 2018 is not to be published or disclosed except pursuant to an order of the Court. This order is to operate until 1 May 2019, unless further extended by the Court, and is necessary to prevent prejudice to the proper administration of justice; and (f) "Confidential Annexure A" to the affidavit of Said Jahani affirmed on 15 November 2018 is not to be published or disclosed except pursuant to an order of the Court. This order is to operate until 1 May 2019, unless further extended by the Court, and is necessary to prevent prejudice to the proper administration of justice.

FARRELL J: 1 On 8 November 2018, Said Jahani and Shaun McKinnon (the administrators) applied for orders extending the convening period in relation to the second creditors meeting for Northern Energy Corporation Limited (administrators appointed) (NEC) and Colton Coal Pty Ltd (administrators appointed) (Colton) (together the Companies) to 21 February 2019. 2 Colton is a wholly-owned subsidiary of NEC. The Companies are wholly owned subsidiaries of New Hope Corporation Limited. New Hope is listed on the Australian Stock Exchange (ASX code: NHC) and it has a total market capitalisation of $2.98 billion. The corporate group of which New Hope is the holding company has commercial interests and projects in mining, agriculture and oil and gas industries across Australia. 3 The administrators were appointed as administrators of the Companies pursuant to s 436A of the Corporations Act 2001 (Cth) on 17 October 2018. The administrators foreshadowed the possibility of this application at the first creditors meeting held on 29 October 2018. 4 The application for the extension was filed within the period stipulated in s 439A(5) of the Corporations Act. Creditors were notified of the application by circular on 8 November 2018, the same day as the application was filed. The application was set down for hearing at midday on 9 November 2018. Wiggins Island Coal Export Terminal Pty Ltd (WICET) gave notice of its intention to intervene to oppose the application and leave was granted to its intervention. 5 At the hearing on 9 November 2018, WICET's legal representative submitted that the application should not be granted because WICET might lose the benefit of a guarantee of the Companies' obligations to it if the extension was granted. The guarantee was not in evidence. The Court determined to grant an extension of the convening period to and including 23 November 2018 and set down a further hearing of the application on 16 November 2018 to provide an opportunity for other creditors to express their opinion and evidence of any guarantee to be put before the Court. This was designed to avoid unnecessary cost of the administrators preparing a report which might not be used (if the application for extension to 21 February 2019 was ultimately granted) and to address the issues in a timely way (if the application was ultimately not successful). 6 At the hearing on 16 November 2018, the administrators appeared by counsel, WICET appeared by senior and junior counsel to oppose the application with the support of two other creditors of the Companies who did not appear, Aurizon Network Pty Ltd and Gladstone Ports Corporation Ltd. New Hope appeared by senior counsel following the grant of leave.

Background 7 The business of the Companies involves coal exploration and development. The primary asset of the Companies is the Colton Coal Project and its associated assets. The Project is located in Hervey Bay Queensland. There are three mining leases in relation to which there has been exploration but not yet any development. The leases were granted on 1 May 2017 for a term of 20 years. They cover approximately 110 km² and contain a coking coal resource; the large tenure has the potential to support an open pit mining operation. They include an area adjacent to Queensland Rail's North Coast Rail Line and provide direct rail access to the Gladstone Port and the Wiggins Island Coal Export Terminal. 8 In August and September 2011, the Companies became parties to three agreements relating to the development and operation of the Terminal by WICET, being a Shareholders Agreement, a Take or Pay Agreement with WICET (pursuant to which the Companies became entitled to ship capacity tonnage through the Terminal) and a Port Services Agreement with Gladstone Ports Corporation. The Terminal opened around 2015. The term of the Take or Pay Agreement is 10 years from the date of "mechanical completion" of the Terminal. There is no evidence of when that occurred, but since the Terminal opened in 2015, it might be expected that the term will end no later than some time in 2025. 9 Under the terms of the Take or Pay Agreement, the Companies could use the Terminal for the export of coal up to a quota and handling charges were to be paid whether or not that quota was used. Because of the insolvency of three of eight shareholders of the Terminal, the handling charges levied on existing shareholders and users increased by operation of the Take or Pay Agreement and its associated agreements. The amounts payable by Colton have more than doubled and costs under the Port Services Agreement have also increased. This has caused financial strain on the Companies. 10 It is useful to know that in early 2016, a reconstruction of this part of the New Hope group occurred. This is the "antecedent transaction" about which WICET and Gladstone Ports Corporation have expressed concern. NEC distributed to its holding company, Arkdale Pty Ltd, in specie all of its shares in Taroom Coal Pty Ltd and two other companies. Taroom is the registered holder of tenements associated with the Elimatta Project in the Western Downs Regional Council area of south-west Queensland. Arkdale is a wholly owned subsidiary of New Hope. The consideration for the transfer of the three subsidiaries (which had a carrying value of $43.8 million as at 31 July 2017) was an assumption of liabilities with the carrying value of $45.9 million. Based on this calculation, Arkdale assumed liabilities of $2.1 million in excess of the carrying value of assets received. The Elimatta Project is close to final development according to New Hope's annual report as at 31 July 2018 and WICET and Gladstone Ports Corporation are concerned that the transaction was at an undervalue to a related party giving rise to possible actions for breach of directors' duties and voidable transactions. NEC's obligations to WICET were not assumed by Arkdale.

Administrators' view 11 The administrators have formed the view that, if the Take or Pay Agreement and the Port Services Agreement are put to one side, the Colton Coal Project has the potential to be a viable asset that is capable of being sold (or Colton being recapitalised) for the benefit of the creditors of the Companies. 12 The administrators placed advertisements in the Australian Financial Review on 25 October 2018 seeking expressions of interest to be provided by 9 November 2018. Non-disclosure agreements were executed by 10 parties and two parties provided expressions of interest and a third requested further information. There is in evidence an offer for the acquisition of the Colton Coal Project dated 2 November 2018 which is expressed to be non-binding and indicative only. A copy of the document was provided to counsel and solicitors for WICET but is otherwise confidential. The offer is predicated on an acquisition of either the assets or the unencumbered shares in Colton. 13 Having investigated what consents or approvals might be required from the Minister for Natural Resources, Mines and Energy should a recapitalisation occur through a deed of company arrangement (DOCA) or sale of assets to a new entity, Mr Jahani understands that if the Companies are sold to a new entity, consent of the Minister is required but if the Companies are recapitalised through a DOCA, no such consent is required. It was submitted by the administrators' counsel that this offered the opportunity for a faster sale process which would likely realise a better return for creditors. 14 Mr Jahani says that in his experience providing a thorough and lengthy campaign for a mining company increases the chances of securing a purchaser or investor with a view to achieving the purposes of s 435A. Greatest value is likely to be achieved by a process of recapitalisation through a DOCA. 15 Mr Jahani also gave evidence that he has had a number of conversations with representatives of New Hope and that its Chief Financial Officer, Matthew Busch, said words to the effect that New Hope is considering a deed of company arrangement proposal but will require more time before it is submitted to the administrators. 16 Further time will also allow the administrators to report properly to creditors concerning an assessment of any expressions of interest received and their recommendation concerning whether the Companies should enter into a deed of company arrangement or liquidation or whether the administration should end. 17 The proposed extension also takes into account the traditional Christmas/New Year holiday period in which it is difficult to achieve an asset sale process because a number of businesses effectively shut down during that period.

Creditors 18 The administrators note that the following list of creditors may change as proof of debts are lodged and as a result of ongoing investigations. 19 New Hope is a secured creditor of both of the Companies for an amount of $7,060,062.14. 20 NEC's unsecured creditors are as follows: (1) A priority creditor, a former employee of NEC, for $10,289.86. (2) WICET claims to be owed $3,672,249.38 in respect of obligations under the Take or Pay Agreement which have fallen due and $128,732,428 in respect of future liabilities. The proof of debt lodged by WICET noted that WICET holds bank guarantees in their favour for the amount of AUD$1,784,375 and US$9,218,750 in respect of debts payable by the Companies under the Take or Pay Agreement. The larger amount claimed relates to a termination payment outlined in clause 12.3 of that agreement under which a termination payment is payable "within the earlier of 12 months of the default occurring or the date that WICET has exhausted the Acceptable Security provided". Mr Jahani says that he has not been notified by WICET that the Acceptable Security provided has been exhausted. WICET has issued a default notice under the Shareholders Agreement. (3) Aurizon claims an amount of $3,305,035 pursuant to the Wiggins Island Rail Project deed, the parties to which are shippers through the Terminal. Mr Jahani says that Aurizon's claim is disputed by the Companies and other shippers and it is currently the subject of litigation. The administrators have not yet adjudicated on this claim. (4) Gladstone Ports Corporation which lodged a proof of debt for $5,950,689 on 13 November 2018. Prior to that it claimed $265,689 and the administrators say that that amount is in dispute. Gladstone Ports Corporation holds a bank guarantee in its favour in the amount of $306,350 in respect of debts payable to the company. (5) Ergon Energy Retail for $60.82 and Queensland Office of State Revenue for $229.60. 21 Colton's unsecured creditors are: (1) WICET, Aurizon and Gladstone Ports Corporation, for the same amounts claimed in relation to NEC. (2) Other small creditors whose debts have been purchased by New Hope. (3) A law firm for $98,373. (4) NEC for $52,565,100.43. 22 The administrators have not adjudicated on any of these proofs of debt.

Bases of opposition 23 WICET, Aurizon and Gladstone Ports Corporation each consider that it is in the best interests of creditors of the Companies that the Companies be placed in liquidation immediately. Aurizon and Gladstone Ports Corporation each supplied letters of support for WICET's position in the proceedings. Reasons given by WICET for its position (some of which are expressly stated by Gladstone Ports Corporation in its letter) are: (1) The Companies' primary assets comprise mining tenements that have not yet reached production and it is their view that a liquidation will have no greater impact on the value of the tenements than a DOCA. (2) If the Companies are placed into liquidation, the liquidators will retain the ability to investigate and, if considered appropriate, pursue the antecedent transaction on the basis that it involves voidable transactions which may involve a breach of directors' duties. (3) WICET has no intention of voting in favour of a DOCA for either of NEC or Colton which would have the effect of removing an investigation into their affairs. (4) A Deed of Cross Guarantee executed on 31 July 2012 by New Hope and some of its subsidiaries. WICET says that creditors of the Companies may expect to be paid in full if obligations are triggered by the Companies being wound up pursuant to a creditors voluntary winding up (s 446A(2)). 24 The Deed of Cross Guarantee was executed in order to obtain relief under Class Order [CO 98/1418] issued by the Australian Securities and Investments Commission (ASIC) (which has since been replaced), allowing accounts for some companies in the New Hope group to be prepared on a consolidated basis. It is not disputed that the Deed is in the form of ASIC's Pro Forma 24, as certified in a Certificate dated 31 July 2012 by Natasha Chalk, a solicitor, a copy of which appears in exhibit LF-1 at page 417. The Certificate is addressed to the signatories to the Deed, including New Hope and Arkdale. 25 Neither of NEC or Colton was a signatory to the Deed. They are, however, listed in Part 1(3) of the schedule to the Deed as being "Group Entities (other than the Holding Entity) which are as at the date of execution of the Deed ineligible for the benefit of the Class Order". New Hope is listed in Part 1(1) of the schedule as the "Holding Entity" and Arkdale is one of the entities listed in Part 1(2) (who are all signatories to the Deed) as being "Group Entities (other than the Holding Company) which are as at the date of execution of this Deed eligible for the benefit of the Class Order". 26 It is notable that clause 2 of the Deed states that it will be of no force or effect until an original of the Deed together with an original Certificate relating to the Deed have been lodged with ASIC. It appears that both the Deed and the Certificate have been lodged with ASIC. 27 WICET says: (1) NEC and Colton are listed as "Group Entities" in the schedule to the Deed and they therefore fall under the definition of "Group Entities". (2) Under clause 3.1 the payment of debts owed by a "Group Entity" is guaranteed by the other "Group Entities". Those rights are enforceable by creditors (who are not parties to the Deed) in the name of New Hope (the named Trustee) or by a creditor under a deed poll set out in clause 6.1. (3) Under clause 3.2, the guarantee obligations are triggered upon a creditors' voluntary winding up of a "Group Entity" resolved upon at a meeting convened under s 439A of the Corporations Act. (4) As at 31 July 2018, the New Hope group reported net assets of $1,888,400,000 and a profit before income tax of $213,812,000. It follows that, should the Companies be wound up, WICET and the other creditors are likely to be able to recover the entirety of the debt. The indicative proposal dated 2 November 2018 would not achieve that result. (5) WICET's concern is that clause 4.5 of the Deed allows the Group Entities that are parties to the Deed to revoke the Deed in respect of any Group Entity or Entities by executing a Revocation Deed. The effect of the Revocation Deed is conditional on New Hope lodging an original of the Revocation Deed with ASIC, notice being given to creditors by public advertisement and, relevantly, there being no winding up of a Group Entity under s 459A within six months after the Revocation Deed is lodged with ASIC. WICET submitted that if a Revocation Deed was executed and given to ASIC now, and the convening period was extended to 21 February 2019 it was possible, if the second meeting of creditors was not in fact held until 28 February 2019 and that meeting was adjourned, that the resolutions to wind up the Companies might not be taken until at least 1 May 2019, barely two weeks within the six months period. It was submitted that this was significantly prejudicial to WICET's position and the prospects of it recovering its debts from New Hope and the other signatories to the Deed. 28 WICET submitted that the onus is on the plaintiffs to establish that there is a good reason for extending the convening period, consistent with the object of Part 5.3A of the Corporations Act set out in s 435A; WICET does not carry that onus. As the mining tenements are not yet in a development phase, the purpose in s 435A(a) - maximising the chance that the Companies (or so much as possible of their businesses) continue in existence - is not relevant. WICET submitted that the administrators had not established a basis consistent with s 435A(b) - that extending the convening period might result in a better return for the Companies' creditors and members than would result from an immediate winding up of the Companies. Under the Deed, creditors will get 100 cents in the dollar if creditors vote to wind up the Companies at the second meeting of creditors. If the convening period is extended, they will be kept out of the money for a further three months. Creditors as a body will be better off if the Companies are liquidated. 29 Senior counsel for WICET submitted that the sale of assets is a "straw man". Once New Hope pays out the guarantees, it can do as it likes with the Companies and their assets. The overwhelming body of creditors are better off with an immediate liquidation.

Submissions by New Hope 30 Senior counsel for New Hope tendered to the Court an undertaking given by New Hope that it would not take any steps to revoke the Deed at any time during any extension of the convening period and submitted that this addressed the concern that WICET had raised at the hearing on 9 November 2018. 31 Senior counsel advised that New Hope supports the submissions made by the administrators. He contended that the arguments put forward by WICET assumed too much certainty in the course that events might take. First, in the absence of having seen any proposed DOCA, it is difficult to be as adamant as to how WICET might vote at the second creditors meeting as the Chief Financial Officer of WICET, Laurie Lefcourt, is in the evidence given in the affidavit sworn on 13 November 2018. 32 Second, New Hope disputes that it, or any of its subsidiaries which executed the Deed, would have liability to the Companies' creditors even if the creditors pass a resolution to wind up the Companies at the second meeting of creditors. In this regard, it is notable that neither of the Companies is a signatory of the Deed of Cross Guarantee, nor are they named in the Certificate. The essence of the Deed is that it is a "cross-guarantee" (see clause 3.1) but as the Companies are not parties, how can that be so? As New Hope has that view, the opposing creditors' expectation that their debts will be paid by New Hope quickly and in full if they vote in favour of the Companies' liquidation at a second meeting of creditors is unlikely to be realised. 33 Senior counsel did not address the question of whether New Hope would propose a DOCA.

Administrators' submissions 34 Counsel for the administrators submitted that: (1) It is not an answer to the application that any sale could be effected by a liquidator. The possibility of recapitalisation, which will result in there being no need for Ministerial consent to the transfer of the tenements, offers the fastest route to sale of Colton's assets and likely best value. That will not be available in a liquidation. The general body of creditors are better off if a higher price is realised. (2) There is no evidence that WICET, Aurizon or Gladstone Ports Corporation have dealt with the Companies on the basis of the Deed. The Take or Pay Agreement, the Shareholders Deed and the Port Services Agreement were all signed in August and September 2011, while the Deed was executed in July 2012. Further, Laurie Lefcourt's evidence is that WICET only recently came to realise that the Deed existed on the basis of disclosures in New Hope's most recent annual report. (3) The administrators can, as effectively as a liquidator, conduct an investigation in relation to the "antecedent transaction" and have already begun that process. That is one of the reasons for the requested extension. WICET appears to be acting under the misapprehension that the extension precludes the creditors from voting in favour of liquidation at the second meeting of creditors if an extension is granted. Plainly that is not so. Further, it is not uncommon for an administrator to be appointed as a liquidator so that none of that work would be lost. If a different liquidator were to be appointed, they would have the benefit of the work done by the administrators. (4) The object of s 435A(a) is to maximise the prospect of the continuity of a business. It does not matter whether or not it is trading. The tenements are a business and a DOCA may allow their development. (5) In relation to s 435A(b), the Court need only be satisfied that further time is appropriate in order to enhance the prospect of a better return to creditors than an immediate winding up. It is, of course, possible that winding up might occur if, ultimately, the view is formed that that would yield a better return to creditors. (6) There is no evidence that any of the opposing creditors would be prejudiced by an extension. The concern that they would be prejudiced by the execution of a Revocation Deed was therefore always speculative. (7) Despite the protestations of the opposing creditors, it cannot be certain that the outcome of the second meeting of creditors will be a vote in favour of liquidation. That cannot be known.

Extension of convening period 35 The principles applicable to an application of this kind are well settled. The Court must strike a balance between the expectation that an administration will be relatively speedy and 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: Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 per Barrett J at [10], cited with approval in the High Court by Nettle and Gordon JJ in Mighty River International Ltd v Mineral Resources Ltd (2018) 92 ALJR 822; [2018] HCA 38 at [73]. 36 In Re Mentha, in the matter of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (ACN 008 667 285) [2010] FCA 30, McKerracher J noted that in order for the administrators to carry out their function properly, it is necessary that they should have sufficient time to investigate the affairs of the companies under administration and to provide sensible information and advice to the creditors, citing Hayes, in the matter of Estate Property Group Limited (Administrators Appointed) [2007] FCA 935 at [16]. That includes sufficient time to investigate and carry out a sale process in which structured "due diligence" procedures are adopted: Re Diamond Press at [11], Re Hans Continental Smallgoods Pty Ltd [2008] FCA 1933 at [21]. 37 WICET relies on Re Autodorn Ltd [2012] FCA 1393 at [42], in which McKerracher J declined to extend the convening period because of prejudice to employees and "at least one major creditor" and the degree of certainty of achieving a better outcome by prolonging the administration was so low that it could not be given significant weight. 38 It has been submitted that it is in New Hope's hands to avoid all of this by paying out creditors who will have a right to be paid under the Deed of Cross Guarantee once they have resolved to wind up the Companies at the second meeting of creditors. Immediate liquidation therefore avoids prejudice to the opposing creditors who will get paid 100 cents in the dollar so that any "better outcome" arising from realising the best value for the tenements does not accrue to the general body of creditors but rather, only to New Hope which is a related party of the Companies. 39 When the Court announced its decision to allow the extension of the convening period, I said that the decision was finely balanced. It had been agreed by the administrators, WICET and New Hope that it was not appropriate for the Court to make a finding on this application about whether the Deed of Cross Guarantee would respond to a claim by WICET (or the other opposing creditors) and I indicated that I regarded WICET's position as to its interpretation as having some substance. 40 I am not satisfied that the asserted prejudice to the opposing creditors outweighs the prospect of a "better outcome" arising from the short term continuation of the sale process which has been initiated by the administrators. There are several reasons for that view. 41 First, in this case the administrators say that they need more time to pursue the sale process for the tenements and that process will be truncated if a disposal is by way of recapitalisation, avoiding the need for Ministerial approval which would be likely to extend the sale process substantially. This raises the possibility of a better price being achieved. The potential to accommodate this structure is greater in administration as opposed to liquidation. There is therefore a prospect of a "better outcome" if the convening period is extended. As at the time of the hearing, there is one indicative, non-binding offer and New Hope has indicated that it may propose a DOCA. It may also be that there are two other persons who have an interest in making an offer. The sale process has not been long in progress (advertisement only having occurred on 25 October 2018). The administrators also say that they need time to investigate the antecedent transaction. They therefore need some time to see how the process progresses and to investigate the antecedent transactions so as to put them in a position to report and make recommendations. I place weight on this submission because the administrators are disinterested and, as registered liquidators, customarily owe duties of frankness to the Court. 42 Second, I am not satisfied that WICET and the other opposing creditors would be materially prejudiced by the extension. None of those creditors has sought to establish prejudice other than by reason of the possible loss of rights under the Deed of Cross Guarantee if a Revocation Deed is given to ASIC more than 6 months before the second meeting of creditors passes a resolution to wind up the Companies. WICET has not denied that it has access to bank guarantees for an amount greater than the currently due and payable indebtedness, nor has it suggested that the bank guarantees may not be drawn during the proposed extended convening period. The Aurizon and Gladstone Ports Corporation claims are both subject to dispute. It is not an established fact that WICET (or the other opposing creditors) have the asserted rights under the Deed of Cross Guarantee. In any event, New Hope has undertaken to the Court that it will not take any steps to revoke the Deed during the convening period. Accordingly any benefits WICET and the other creditors may obtain under the Deed upon a resolution being passed to wind up the Companies at the second meeting of creditors will not be prejudiced. In these circumstances, deferral by three months of WICET's opportunity to vote in favour of winding up the Companies at the second creditors meeting in order to rely on the Deed is not a material prejudice. 43 There is clear complexity arising from the onerous nature of the Take or Pay Agreement and other arrangements in relation to the Terminal. That complexity might well be addressed as part of any DOCA. While WICET says that it will not vote in favour of any DOCA, the process for the proposal of DOCAs by an interested purchaser of the tenements or New Hope has not yet played out in the short time which has been available since the sale process began. 44 Third, New Hope is the secured creditor and ultimate shareholder of the Companies. If WICET is right, it will be liable for the Companies' debts under the Deed of Cross Guarantee upon a resolution to wind up the Companies at the second meeting of creditors. Section 435A(b) looks not only to the interests of creditors but also to shareholders. 45 It is clearly in New Hope's interest as the secured creditor, ultimate shareholder and possible guarantor of the Companies' debts that the tenements be sold for their best achievable value in a reasonable timeframe. The fact that some creditors will not be prejudiced by an immediate winding up (and whose commercial position is, unexpectedly, likely to be substantially improved by the winding up if WICET is right about the Deed of Cross Guarantee), does not mean that the prospect of a better outcome for the Companies (and therefore for New Hope) from a sale of the tenements in the administrators' process should be ignored. 46 The proposed extension is for a period of approximately three months, which includes the traditional holiday period in Australia over Christmas/January. While the prospect of the administrators obtaining any further extension might be questioned, I was satisfied that it was appropriate to grant the current extension.

Suppression orders 47 The administrators also sought orders suppressing access to the agreements relating to the Terminal, the indicative non-binding offer and a letter from that offeror. These are commercially sensitive documents and I am satisfied that it is necessary to avoid prejudice to the administration of justice to make orders prohibiting access to them. Without the potential to obtain such orders, there would be a chilling effect on parties seeking relief from the Courts to which they are entitled in the normal course if the commercial arrangements reached by them with persons who may have no interest in the proceedings cannot be protected and prejudice to them avoided. 48 The request relating to the agreements was for an indefinite period. Having regard to s 37AJ of the Federal Court of Australia Act 1976 (Cth), which requires that in deciding the period for which an order will operate, the Court should ensure that it is for no longer than is reasonably necessary to achieve the purpose for which it is made. At the latest, the term of those agreements would end in 2025. The form of the orders relating to the agreements was amended to be for a period ending on 30 June 2022 or further order. Similarly, I was satisfied that it was appropriate to make an order in relation to the indicative offer and related letter until 1 May 2019 or further order.

Costs 49 I was satisfied that it was appropriate to make the usual order in relation to the administrators' costs of the application. 50 The administrators applied for a costs order against WICET. I was not satisfied that that was appropriate. WICET acted as a contradictor to orders sought on an ex parte basis. Although WICET was not successful, it exposed arguments that were properly raised. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.

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