RE COCOS ISLANDS CO-OPERATIVE SOCIETY LIMITED (ADMINISTRATORS APPOINTED); EX PARTE JEREMY NIPPS AND THOMAS BIRCH IN THEIR CAPACITIES as joint and several administrators of COCOS ISLANDS CO-OPERATIVE SOCIETY LIMITED (ADMINISTRATORS APPOINTED) [No 2] [2025] WASC 161 (6 May 2025)

Should a further extension of time to convene the second creditors' meeting be granted?

1. The plaintiffs' current application is brought pursuant to s 447A of the Act. This is because it is presently unclear as to whether the court has power to grant a further extension of a convening period under s 439A(6),[2] although it is widely accepted that a further extension can be granted under s 447A of the Act.[3]
2. In considering whether or not to grant a further extension to the convening period of the second creditors' meeting, the court is required to consider and take into account the objects and scheme of pt 5.3A of the Act, as set out in s 435A.
3. In reaching its decision, the court is required to maintain the appropriate balance between an expectation that an external administration will be undertaken in a relatively speedy and summary manner, with a need to ensure that an administration is not concluded without consideration of sensible and constructive options that are directed towards maximising returns for creditors and any possible return for shareholders.[4] In reaching its decision, the court is also required to take into account any possible detriment to third parties, including the suspension of rights and remedies of secured creditors, lessors, and others.[5]
4. The court will generally exercise its discretion to extend the convening period where one or more of the established categories are satisfied, where there is no evidence of material prejudice to those affected by the extension, and the court is satisfied that the estimate of time required has a reasonable basis.[6]

(a) stabilising the business operations of the Co-operative and implementing more efficient systems;

(b) improving work health and safety practices;

(c) attending to a number of insurance issues associated with the Co‑operative's business and assets;

(d) reviewing contracts with suppliers, clients and employees, negotiating relevant variations and renewals, and formalising contracts with all the Co-operative employees;

(e) conducting repairs and maintenance to the Islands' resort; and

(f) implementing tighter spending controls, budgeting, and forecasting activities.

1. Mr Nipps' evidence is that while the Administrators have significantly improved and stabilised the operations of the Co‑operative since the first extension was granted, the Administrators are not yet in a position to prepare a report to creditors and convene a second meeting of creditors. In his view, the prospects of securing the sale of the Co‑operative's business, or a recapitalisation or restructure of the Co‑operative, will be improved if further work is done to stabilise the trading operations of the Co-operative before any recapitalisation or sale process is pursued.[8]
2. Mr Nipps also gave evidence of the work that the Administrators plan to undertake prior to convening the second meeting of creditors, if an extension is granted.[9] This work includes:

(a) reviewing existing employee contracts to ensure that they comply with current awards, standardising and modernising the employment arrangements, and arranging for updated employment contracts to be provided to all employees;

(b) quantifying the amount that is owed to employees for unpaid entitlements;

(c) continuing to investigate the financial affairs of the Co‑operative prior to their appointment, and considering what claims, if any, may be available against related parties;

(d) engaging with key stakeholders to discuss potential options for the restructuring of the Co-operative; and

(e) conducting a program for the restructure and/or sale of the Co‑operative and its businesses.

1. Mr Nipps' evidence, which I accept, is that the Administrators believe these tasks will take approximately six months.[10]
2. The evidence before me is that the Administrators have given notice of their intention to bring this application to the Indian Ocean Territories' administrators, as well as to the Committee of Inspection.[11] I note that no one has objected to the proposed extension or appeared at the hearing today to oppose the application.
3. For the following reasons, I am satisfied that it is appropriate to grant the requested application for an extension of the convening period until 23 October 2025, and for the proposed Daisytek order to be made.[12]
4. First, Mr Nipps' evidence, which I accept, is that further time is required to prepare a satisfactory report to creditors. I accept on the evidence before me that without a further extension, the Administrators will not be in a position to make an informed recommendation to creditors given that the proposed sale or restructure process has not yet started, and the investigations being undertaken by the Administrators have not been completed.
5. Second, I accept that the administration is significantly complex for a number of reasons. These include its structure as a co‑operative, the essential role that the Co-operative plays in providing services to the Islands, and the relative isolation of the Islands.
6. Third, a further extension to the convening period is required to enable the sale or restructure of the Co‑operative or its assets, or to enable a deed of company arrangement to be proposed and negotiated. In my view, both of these matters are consistent with the purposes and objects of pt 5.3A of the Act, as set out in s 435A.
7. Fourth, the Administrators' opinion is that a further extension of time is required for a period of approximately six months. On the evidence before me, I am satisfied there is a reasonable basis for this estimate.

1. The plaintiffs also seek orders for notice to be given to creditors of these orders, with liberty to apply to set aside the orders, as well as for the costs of the originating process to be costs in the voluntary administration of the Co-operative. In my view, these are the appropriate orders to be made in the circumstances of this case.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Re Cocos Islands Co-operative Society Limited (Administrators Appointed); Ex parte Jeremy Nipps and Thomas Birch in their capacities as joint and several administrators of Cocos Islands Co-operative Society Limited (Administrators Appointed) [2024] WASC 407 (Re Cocos Islands).

[2] Re Lombe; Australian Discount Retail Pty Ltd [2009] NSWSC 110 [29] ‑ [31].

[3] Re Lombe; Australian Discount Retail Pty Ltd [2009] NSWSC 110 [32].

[4] Tucker (Administrator) v Bolten (Trustee), in the matter of Quintis Leasing Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 46 [54], citing Diamond Press Australia Limited [2001] NSWSC 313 [10].

[5] Shaw and Albarran (Joint and Several Administrators of Home Art Building Group Pty Ltd) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274 [18].

[6] Mighty River International Limited v Hughes [2018] HCA 38 [73].

[7] Open affidavit of Jeremy Joseph Nipps filed 8 April 2025 [16].

[8] Plaintiff's submissions filed 10 April 2025 [15], Open affidavit of Jeremy Joseph Nipps filed 8 April 2025 [23] ‑ [24], [56] ‑ [57].

[9] Open affidavit of Jeremy Joseph Nipps filed 8 April 2025 [52].

[10] Open affidavit of Jeremy Joseph Nipps filed 8 April 2025 [63].

[11] Open affidavit of Jeremy Joseph Nipps filed 8 April 2025 [46], 'JJN-13'.

[12] Re Daisytek Australia Pty Ltd (Administrators Appointed) [2003] FCA 768.