Park, In the matter of IG Power (Callide) Pty Ltd (Administrators Appointed) (No 5) [2025] FCA 135

Introduction 1 This is an application by the administrators of a number of related companies - namely, IG Power (Callide) Ltd (administrators appointed) (IGPC), IG Power Holdings Limited (administrators appointed), IG Energy Holdings (Australia) Pty Ltd and IG Power Marketing Pty Ltd (collectively, the IG Power Group) - in which they seek orders pursuant to s 447A of the Corporations Act 2001 (Cth) (Corporations Act) and s 90-15 of the Insolvency Practice Schedule (Corporations) (being Schedule 2 to the Corporations Act) relieving them of personal liability in respect of certain debts and liabilities, and extending the convening periods relating to the several relevant administrations.

Background 2 Whilst there is no need to address the background of this application in great detail, it must be kept squarely in mind that the administrators are involved in a series of large and extremely complex administrations. 3 By themselves, those administrations would necessarily have taken substantial time. However, overlaying the complexity of the administrations, is the fact that the administrators have had to deal with the competing interests of two protagonists: one being a group of foreign entities with interests in the Callide Power Stations, who can generally be referred to as "the Sev.en interests". The other is the Queensland State Government, being the sole owner of several companies that also have interests in the Callide Power Stations (the "State Government Entities"). Each has evinced a determination to either retain or obtain control of the interest in the Callide Power Stations which, hitherto, has been controlled by the Sev.en interests. 4 The continued disputation by the protagonists has rendered the administrations substantially more difficult for the administrators than it might otherwise have been. There is nothing pejorative in that observation, and each of the parties have been legitimately seeking to advance their own commercial interests, as they are very well entitled to do so. The point is only mentioned because it underscores the difficulties posed for the administrators and, in conjunction with a recent lull or softening in the conflict between the protagonists, provides some background to the administrators' present application.

The nature of the orders sought 5 As mentioned, the orders sought are of two classes. The first are designed to relieve the administrators from personal liability in respect of certain debts and liabilities which will arise in the course of the administrations. This is in respect of two agreements. The first is a second amended funding deed entered into by the administrators and Sev.en Global Investments a.s. on 23 December 2024. It amends and restates an initial funding agreement dated 20 August 2024, in respect of which this Court has previously made orders limiting the administrators' liability: see Park, in the matter of IG Power (Callide) Ltd (Administrators Appointed) (No 2) [2024] FCA 1244, [21] - [23] (Second Limitation of Liability Judgment). The second agreement is a proposed services agreement between IGPC, Callide Energy Pty Ltd (CEPL) and Callide Power Management Pty Ltd (CPM), that relates to a proposed agreement in which services are to be provided by IGPC to CPM. The need for that agreement arises by reason of an earlier services agreement with a third-party having now lapsed. 6 The second form of orders sought by the administrators are for the necessary and consequential extensions of the convening periods of the administrations to 31 March 2025. In that respect, the recent softening of hostilities between the interests of the State Government Entities and the Sev.en interests has generated an expectation that the circumstances of the administration will change, and that the administration may be brought to an end in a way that is satisfactory to both the protagonists and administrators, in the sense that it will result in substantial benefits for the creditors of the administrations and, indeed, some of the companies presently under administration will be returned to solvency. 7 It should be acknowledged that the administrators properly notified all relevant creditors of the application, and none appeared at the hearing for the purposes of contesting the orders being sought. In general terms then, the administrators are of the opinion that the orders sought are necessary and appropriate and there is no opposition from any interested party.

Class (1) of the orders sought: limitation on liability 8 Section 443A of the Corporations Act imposes a liability upon the administrator of a company for debts incurred in the performance of the administration. It is drafted in the following terms: 443A General debts (1) The administrator of a company under administration is liable for debts he or she incurs, in the performance or exercise, or purported performance or exercise, of any of his or her functions and powers as administrator, for: (a) services rendered; or (b) goods bought; or (c) property hired, leased, used or occupied, including property consisting of goods that is subject to a lease that gives rise to a PPSA security interest in the goods; or (d) the repayment of money borrowed; or (e) interest in respect of money borrowed; or (f) borrowing costs. (2) Subsection (1) has effect despite any agreement to the contrary, but without prejudice to the administrator's rights against the company or anyone else. 9 In turn, s 443D of the Corporations Act provides the administrator with an indemnity in respect of those debts from the property of the company under administration: 443D Right of indemnity The administrator of a company under administration is entitled to be indemnified out of the company's property (other than any PPSA retention of title property subject to a PPSA security interest that is perfected within the meaning of the Personal Property Securities Act 2009) for: (a) debts for which the administrator is liable under Subdivision A or a remittance provision as defined in subsection 443BA(2); and (aa) any other debts or liabilities incurred, or damages or losses sustained, in good faith and without negligence, by the administrator in the performance or exercise, or purported performance or exercise, of any of his or her functions or powers as administrator; and (b) the remuneration to which he or she is entitled under Division 60 of Schedule 2 (external administrator's remuneration). 10 It is a matter of common sense that these provisions, alongside ss 443D and 443F, provide adequate protection in circumstances where the assets of the company under administration are sufficient to meet the liabilities that the administrator incurs in the course of the administration. However, difficulties necessarily arise when there exists an expected deficiency of the assets from which the administration debts might be discharged, and, in the absence of some ameliorating intervention, the administration could come to an abrupt halt: see generally Re RCR Tomlinson Ltd (Administrators Appointed) [2018] NSWSC 1859, [11]. 11 The administrators' application in relation to this issue is for the Court to make orders which will have the effect of relieving them from the liability which would otherwise fall upon them given the circumstances of the IG Power Group. 12 The principles on which this Court acts in relation to modifying the operation of Part 5.3A of the Corporations Act for the purposes of protecting administrators from liability are now well established. They were neatly explicated in the administrators' careful and thoughtful written submissions, which I gratefully adopt: 4. It is well-established that s 447A of the Corporations Act empowers the Court, in an appropriate case, to modify the operation of Part 5.3A of the Corporations Act so as to exclude or limit the personal liability of an administrator: Re Ten Network Holdings Ltd (Admins Apptd) (Recs and Mgrs Apptd) [2017] FCA 1144 at [40] (Markovic J); Secatore, Re Fletcher Jones and Staff Pty Ltd (admins apptd) [2011] FCA 1493 at [23] (Gordon J). In Re Mentha (in their capacities as joint and several administrators of the Griffin Coal Mining Company Pty Ltd (admins apptd) (2010) 82 ACSR 142, Gilmour J held (at [30]) that: The principles governing the granting of an application for orders under s 447A to vary the liability of administrators under s 443A can be summarised as follows: (a) the proposed arrangements are in the interests of the company's creditors and consistent with the objectives of Pt 5.3A of the Corporations Act: Re Great Southern [Infrastructure Pty Ltd; Ex parte Jones [2009] WASC 161] at [13]. (b) typically the arrangements proposed are to enable the company's business to continue to trade for the benefit of the company's creditors: Re Malanos [[2007] NSWSC 865] at [9] and Re View [Gold View Resources Ltd & View Nickel Pty Ltd; Ex Parte Saker [2008] WASC 241] at [17]. (c) the creditors of the company are not prejudiced or disadvantaged by the types of orders sought and stand to benefit from the administrators entering into the arrangement: Re View at [18], and also Re Application of Fincorp Group Holdings Pty Ltd [2007] NSWSC 628 at [17]. (d) notice has been given to those who may be affected by the order: Re Great Southern at [12]. 5. Most cases where the courts have exercised its power under s 447A to vary the administrator's personal liability under s 443A have involved administrators borrowing funds during the period of the administration (typically limiting the recourse of the counterparty to the administrator personally to the extent to which he or she is able to be indemnified from the assets of the company): Griffin Coal at [31] (Gilmour J). However, personal liability can be excluded with respect to any arrangement which enables the company's business to continue to trade for the benefit of creditors: Re Strawbridge, Virgin Australia Holdings Ltd (Admins Apptd) (No 2) (2020) 144 ACSR 347 at [91] (Middleton J). The rationale for such orders is that administrators should not be expected to expose themselves to substantial personal liabilities: Algeri (Administrator), in the matter of Murray & Roberts Pty Ltd (Administrators Appointed) [2022] FCA 1506 at [47] (Banks-Smith J); Re Renex Holdings (Dandenong) 1 Pty Ltd [2015] NSWSC 2003 at [13] (Black J); Re Preston (in their capacities as joint and several voluntary administrators of Hughes Drilling Ltd) [2016] FCA 1175 at [18] (Yates J). Making such orders permits the administrator to carry on commercial operations uninfluenced by possible concerns of personal liability and instead focus upon the best interests of the company's creditors: Secatore at [29] (Gordon J).

The second amended funding deed 13 On 29 October 2024, the administrators foreshadowed that the funding then available to them, which had been used to trade the IG Power Group, would be depleted by the end of January 2025. That being so, the administrators appropriately sought additional funding and, through their sale adviser, have gone to market for the purposes of acquiring funding so that they can continue to trade the business of the group until 31 March 2025, with an eye on finalising the administrations. 14 On 23 December 2024, the administrators entered into a second amended funding deed with Sev.en Global Investments a.s., which has very appropriately previously provided funding to them. The amount available to the administrators from that deed is, in their opinion, sufficient to allow the administrations to continue until shortly after the expected convening of the second meetings at the end of March 2025. The proposed further funding deed provides funds for the expected expenses and costs of operating the business of the IG Power Group, including the (substantial) cash calls payable under the relevant joint venture agreement and Market Trader Agreement: see Second Limitation of Liability Judgment, [6] - [7]: as well as for paying invoices issued under the existing connection agreement. These matters have previously been provided for by the earlier funding agreements. 15 The proposed second amended funding deed also covers the costs of the administrators' remuneration and expenses, including those of their staff and relevant insurances, and the fees and disbursements of the administrators in respect of their consultants, legal advisors, sale advisors, experts and the like. 16 There is good reason to limit the administrators' liability in respect of this second amended funding agreement. In the first instance, the administrators are of the view that it is in the best interests of, and will not cause prejudice to, the creditors of IGPC or any of the other companies under administration. In their view, entering into this deed will serve to ensure that there is adequate funding to operate the businesses to meet IGPC's ongoing liabilities and will enable them to progress the investigations of certain incidents which adversely affected the Callide Power Stations. 17 Looking more broadly, it is also important that the administrators are of the opinion that entering into the second amended funding deed and drawing on it will not prejudice any unsecured creditor of the companies nor any other party. 18 A second and important aspect in relation to the funding deed which warrants the limitation of the administrators' liability is the critical feature that the Sev.en interests have agreed to limit their recourse under it to the assets of IGPC, from which the administrators are indemnified and in respect of which they have a lien: see ss 443D and 443F of the Corporations Act. 19 The Sev.en interests have also agreed to support any application made by the administrators to limit their liability under s 447A and, as set out in the administrators' written submissions, that has been regarded as a determinative matter: Re Spyglass Management Group Pty Ltd (admin apptd); Mentha (as joint and several admins of Spyglass Management Group Pty Ltd (admin apptd)) (2004) 51 ACSR 432, 434 [6]. Such a factor was also probative in the making of orders limiting liability in Re Globaltech Corporation Pty Ltd (admins apptd) [2024] WASC 196, [56]. In the result, as the creditors cannot be disadvantaged by the making of such an order, they can have no interest in its making. Indeed, they only stand to benefit by it if it is made and results in a successful outcome for the administrations. 20 For the foregoing reasons, the administrators have established that an order should be made limiting their liability under the second amended funding deed.

The services agreement 21 The second agreement in respect of which liability is sought to be limited is the newly proposed services agreement. Until relatively recently, Genuity Services Pty Ltd (Genuity) provided services such as engaging with the operator of Callide C Power Station, collating information and providing it to IGPC and CEPL ahead of committee meetings, facilitating the provision of proposed resolutions for IGPC and CEPL's consideration or approval, and managing ongoing agreements and preparing statutory reporting. Genuity ceased acting in that role on 31 January 2025 and the administrators now intend to enter into a new services agreement with IGPC to provide the required services in the future. As at the date of publishing these reasons, that agreement is being negotiated and is expected to be completed and executed in the near future. 22 Again, there are several good reasons why the administrators' liability in respect of that agreement should be limited. The first is that the administrators have formed a view that it is in the creditors' best interests for IGPC to assume the role of service provider to CPM in place of Genuity in circumstances where those services are critical to the continuation of the joint venture operations. Secondly, the relevant counterparties to the documents, CPM and CEPL, are creditors of IGPC and will therefore be notified of the application. The administrators reasonably believe that there will be no opposition to the making of the orders from those parties. 23 For the reasons referred to, it is appropriate to make orders limiting the liability of the administrators under the proposed services agreement as well.

Class (2) of the orders sought: extension of the convening period 24 The administrators seek to extend the convening period from 28 February 2025 to 31 March 2025. 25 In relation to this aspect of the application, some of the information provided to the Court by Mr Park in his affidavit of 12 February 2025 is highly confidential. Necessarily, the circumstances in which the main protagonists in this matter will resolve their differences involve commercial-in-confidence material, and Mr Park has sought an order to the effect that it not be made publicly available for a period of time. That submission is dealt with below but, for present purposes, it is sufficient to acknowledge that the making of the orders sought to protect the confidential information is appropriate. That being so, it is necessary that these reasons refer to the protected information in only very general and oblique terms. 26 It is sufficient to observe that, in the process of dutifully carrying out their obligations in the administration of the IGPC group, the administrators have become aware of developing circumstances between the protagonists which may bring their disputations to an end. There is no need to go into the details of those circumstances, but if it is possible for those parties to resolve at least some of their dispute, the administrators may very well be able to finally bring the administrations to an end. If so, it is likely to result in a very positive outcome. 27 The administrators have indicated that they are of the belief that an extension of the convening period to allow for those matters to conclude and for the administrations to be finalised is appropriate and in the best interests of the creditors. That is a significant factor in circumstances such as the present. 28 Necessarily, given the delicacy of the circumstances, the parties involved have agreed to certain arrangements in order to facilitate the reaching of an agreement, if possible; what those agreements are, however, is also necessarily confidential. There is nothing sinister in that, and the parties' intentions are only that commercially sensitive information be protected in the interim. 29 The Court's power under s 447A(1) of the Corporations Act to extend the period for convening the second meeting of creditors for the purpose of an administration are the same as those appliable to any extension of the convening period: Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 [12] - [14]. Again, the relevant principles are set out in the erudite written submissions filed on behalf of the administrators, and it is appropriate to quote them directly: Those principles are familiar to the Court, but in short compass they require that the Court reach an appropriate balance between an expectation that an 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": Strawbridge, Re Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717 at [64] (Middleton J). 30 In this case, the extension sought balances that need for a relatively speedy summary administration on the one hand and, on the other, it does not prejudice sensible and constructive actions which are directed to maximising the return for creditors. In the application of that principle, one must always keep steadily in mind that the speed at which an administration can be conducted is necessarily dependent upon the complexity of the company's affairs and the circumstances in which it operates and conducts business. Here, the companies of the IG Power Group are involved in the complex area of electricity generation, and their business operations are rendered more unique and convoluted by reason of the joint venture arrangements in which they operated. The difficulties encountered by the administrations, were exacerbated by the overlay of the internecine disputations of the two protagonists, who were both well-funded and able to protect their interests. 31 It follows that the extension of time of only one month for the calling of meetings, in the scheme of such complex and difficult administrations, is of little moment. That is particularly so in circumstances where all relevant creditors are aware of the proceedings, and none oppose the extension. 32 It follows that the administrators have established the existence of good reasons for the extension of the convening period by use of the power in s 447A of the Corporations Act, and, therefore, such orders ought to be made.

Confidentiality 33 As to the issue of the confidentiality orders, s 37AF(1)(b)(i) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) provides that the Court may, by making a suppression order or non-publication order on grounds permitted by Part VAA, prohibit or restrict the publication or other disclosure of information that both relates to a proceeding before the Court and is information that comprises evidence or information about evidence. 34 In turn, s 37AG(1)(a) of the Federal Court Act provides one such ground, being that the order is "necessary to prevent prejudice to the proper administration of justice". 35 In this case, there is, in the documents in respect of which confidentiality is sought, a recognised public interest in the due and beneficial administration of the estate of the companies in external administration for the benefit of creditors and, to that end, commercial confidentiality in the documents sought to be protected should be maintained: Killer, in the matter of Scooter Group Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2023] FCA 320 [50] - [54]; Hill, Re Autocare Services Pty Ltd (admins apptd) [2021] FCA 167 [53]; and Vickers, Re JM Kelly Builders Pty Ltd (in liq) (No 2) [2019] FCA 1789 [7]. 36 The second amended funding deed also contains terms and conditions relating to the IG Power Group and the Sev.en interests which are necessarily commercial and market sensitive. Such information is not currently available to the public. The information is of particular importance give that the formation of the agreement followed upon the competitive and confidential market process for the provision of additional funding. Were it to be the case that further funding is required after 31 March 2025, disclosure of the current terms and conditions could well hinder the administrators in obtaining any, or might affect the terms on which any such funding might be available. In this respect, the administrators identify the importance of maintaining confidentiality in the second amended funding deed, to preserve any future market process should that be required. 37 There is no reason to doubt the administrators' evidence concerning the importance of maintaining the confidentiality in their funding arrangements and it should be accepted. 38 Similarly, the services agreement and the documents relating to the extension of the convening period are not currently in the public domain or otherwise publicly available. The information contained within them is private, commercially valuable information that is important to the continuation of the businesses of the IG Power companies. In respect of all documents in which the administrators seek to maintain confidentiality, they have shown that it is necessary to do so within the meaning of s 37AG of the Federal Court Act. 39 In those circumstances, the orders for confidentiality sought by the administrators should be made. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

Associate: Dated: 26 February 2025 SCHEDULE OF PARTIES QUD 403 of 2024 Plaintiffs Fourth Plaintiff: IG POWER MARKETING PTY LTD ACN 082 413 867 (ADMINISTRATORS APPOINTED) Fifth Plaintiff: IG POWER (CALLIDE) LTD ACN 082 413 885 (ADMINISTRATORS APPOINTED)