Mighty River International v Hughes

SHARIFF J: 1 This was an application brought by Messrs Beattie, Darin and Lucan in their capacities as joint and several administrators (Administrators) of two entities, National Projects QLD Pty Ltd (Administrators Appointed) ACN 652 810 618 (NP QLD) and NPM (VIC) Pty Ltd (Administrators Appointed) ACN 623 232 637 (NPM VIC) (together, the Companies). 2 The Administrators were appointed on 23 October 2023. At that time, they were also appointed as administrators of several other companies, all of which traded under the "NPM" brand and were part of a broader group of companies known as the "NPM Group". These other companies are located in different States and Territories to NP QLD and NPM VIC. Prior to being placed into administration, the Companies, together with others in the NPM Group, operated a commercial office design, construction and maintenance business. The Companies ceased all trading operations on 23 October 2023, immediately prior to the Administrators being appointed. 3 Pursuant to sub-ss 439A(1), (2) and (5) of the Corporations Act 2001 (Cth) (Act), the Administrators were required to convene a second meeting of creditors for each of the Companies by 20 November 2023 and to hold such meetings by no later than 27 November 2023. However, orders were made to extend the convening period of the Companies (as well as additional companies within NPM Group) on 15 November 2023, 1 February 2024 and 9 August 2024: see, generally, Beattie, in the matter of National Projects and Maintenance Pty Limited (administrators appointed) [2023] FCA 1470 (Goodman J); see also Beattie, in the matter of National Projects and Maintenance Pty Limited (administrators appointed) (No 2) [2024] FCA 950 at [6]-[10] and [18] (Yates J). The most recent orders extended the convening period until 20 February 2025. 4 By their present application, the Administrators seek yet another extension of time. Specifically, the Administrators seek orders pursuant to s 447A of the Act that Pt 5.3A of the Act is to operate in relation to each of the Companies such that, notwithstanding section 439A(2) of the Act, the second meeting of the creditors of each of the Companies required under section 439A(1) of the Act may be convened at any time before, or within, five (5) business days after, the end of the convening period, as extended. In practical terms, the extension is sought until 27 August 2025, being a further extension of 6 months. 5 In support of their application, the Administrators rely upon: (a) the affidavit of Mr Aaron Lucan affirmed on 10 November 2023 and Exhibit AKL-1 to that affidavit; (b) the affidavit of Mr Aaron Lucan affirmed on 25 January 2024; (c) the affidavit of Mr Aaron Lucan affirmed on 1 February 2024; (d) the affidavit of Mr Graeme Beattie sworn on 2 August 2024; (e) an affidavit of Mr Matthew Williams sworn on 13 February 2025 and Exhibit MW-1 to that affidavit; (f) an affidavit of Mr Graeme Beattie sworn on 17 February 2025; and (g) an affidavit of Mr Jeremy Mudford sworn on 17 February 2025. 6 The principal reason for the application was that the investigations conducted by the Administrators to date have revealed that the Companies are owed substantial debts which are likely to be covered by the applicable Security of Payments legislation (SOP Regimes) in each respective State. The Administrators say they need more time to pursue the debts owing to the Companies under the SOP Regimes. 7 I recently set out the principles relevant to an application of this kind in Colley, Re PF Group Holdings Pty Ltd (Admins Apptd) [2024] FCA 792 at [25]-[27] (citing, inter alia, the High Court in Mighty River International v Hughes [2018] HCA 38; (2018) 265 CLR 480 at [72]-[73] (Nettle and Gordon JJ)). It is unnecessary to repeat those principles here. 8 In the present case, I initially had concerns as to the period of time that it had taken for the Administrators' investigations to take place, and the multiple applications for extensions that have been made since their respective appointments. I also had concerns that I did not have up to date evidence as to the position of the primary secured creditor of each of the Companies, Judo Bank. The evidence initially filed in support of the application was essentially the same evidence as that which had been relied upon in support of previous applications made to the Court for extensions of time, with minor and insubstantial updates. Having read that evidence, I formed the view that the Administrators had focussed their attention on the administration of the other companies in the NPM Group and had, in substance, "parked" their consideration of the position of the NP QLD and NPM VIC. That is not to be critical of the Administrators. The evidence discloses that the NPM Group's financial and other records were in a parlous state and considerable time and effort has been expended in piecing things together. It appears that after undertaking these considerable efforts, the Administrators have been successful in recovering debts in favour of other companies in the NPM Group including by invoking and pursuing their rights under the SOP Regimes in other States. In those circumstances, I considered it appropriate that the Administrators account to the Court as to what steps will be taken to progress the administration of NP QLD and NPM VIC. 9 Mr Lalji, solicitor, who appeared for the Administrators sought a short adjournment to file further evidence to update me on the position. I granted the adjournment and subsequently received and read that additional evidence. It includes evidence from Mr Beattie that, if the extension of the convening period is granted, the Administrators will take steps to: (a) file originating processes pursuant to the respective SOP Regimes in each State on behalf of NP QLD and NPM VIC seeking the recovery of the debts owing to the Companies; and (b) secure summary judgment, if that is the appropriate course to be taken. I have also received evidence from Mr Mudford which confirms that that Judo Bank consents to the extension of time, in circumstances where it believes there are good prospects of better recovery by taking this course as opposed to liquidation. Judo Bank is the most substantial secured creditor of the NPM Group overall (being owed over $8 million). I am also satisfied that other creditors of the Companies have been notified of, and did not object to, the Administrators' present application. 10 I am satisfied that the further extension of time should be granted. This Court has previously approved orders seeking an extension of time in order to preserve the rights under the SOP Regimes: see Re Megacrane Holdings Pty Ltd (Administrator Appointed) [2022] FCA 733 (Yates J). Further, and as respectively noted by Goodman J and Yates J in earlier decisions relating to the administration of the NPM Group, if the convening period is not extended, and the Companies are subsequently placed into liquidation, it is possible that the Companies will be unable to make use of the SOP Regimes, thus impairing their ability to recover substantial debts owing to them: Beattie, in the matter of National Projects and Maintenance Pty Limited (administrators appointed) [2023] FCA 1470 at [10] (Goodman J); see also Beattie, in the matter of National Projects and Maintenance Pty Limited (administrators appointed) (No 2) [2024] FCA 950 at [6]-[10] and [18] (Yates J). 11 For these reasons, and on the evidence before me, I am satisfied that the application should be granted and ordered accordingly. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Shariff.