[2025] WASC 328
General information, not legal advice.
Supreme Court of WA
2025-08-14
Strk J
Original judgment source is linked above.
(a) owns a business which operates the Doodlakine Quarry, located on Mather Road, 12 kilometres east of Kellerberrin and two kilometres west of Doodlakine in Western Australia;
(b) sells as its main product a material known as 'cracker dust' (also known as 'blue metal dust'), being a finely crushed material derived from its quarrying operations, and also sells road base products;
(c) has current stock on hand comprising of cracker dust and road base products;
(d) owns no equipment;
(e) leases equipment necessary for the movement and sale of its stock (comprising cracker dust and road base products) from Mineral Crushing Services Holdings; and
(f) leases the Doodlakine Quarry from the Shire of Kellerberrin.
(a) owns all plant and equipment used by Mineral Crushing Services (WA) in its operation of the Doodlakine Quarry;
(b) leases equipment to Mineral Crushing Services (WA), which is used for the movement and sale of stock held by Mineral Crushing Services (WA); and
(c) leases certain equipment from an equipment financing company, InFront Australian Business Solutions, which is the major secured creditor of the Companies.
(a) matters necessary for the marketing and sale process, such as completion of valuations and discussions with the major secured creditor were completed as recently as 29 July 2025 and collection of the surplus assets was completed as recently as 30 July 2025; and
(b) based on the matters he had deposed to in his affidavit, he believed that a marketing and sale process would likely take until 6 October 2025 (that is, 59 days from the end of the convening period).
The prospect of an immediate winding up of the Companies in circumstances if the convening periods of the second meetings of creditors of the Companies are not extended, which in my preliminary view, is not in the interests of the creditors of the Companies where a campaign for sale of the Business as a going concern is underway[.]
42.1 allow me to stabilise the operations of the Companies, in particular ensuring that the Business remains operational;
42.2 allow me to finalise my investigations into the business, property, affairs and financial position of the Companies;
42.3 allow me and prospective sale advisers to conduct an orderly realisation process of the Business; and
42.4 maximise the chance of the Companies, or as much as possible of the Business, to continue in existence as well as the possibility of a greater return to the majority of the creditors of the Companies than would result from an immediate winding up.
(a) he had noted his intention to make an application to the court for an extension to the convening period at the first meeting of creditors of each of the Companies;
(b) he had sought any objections from creditors to an extension of the convening period for a period of at least 60 days at the first meeting of the creditors of each of the Companies, and had received no objections from creditors;
(c) he had informed the major secured creditor about his intention to make an application for an extension to the convening period on a further separate occasion to the first meetings of creditors of the Companies;
(d) he had not received any response from any creditors of the Companies in relation to the notification given and this application; and
(e) he was not aware of any reason that would cause any creditor or interested person to be unfairly prejudiced by the extension of the convening period.
[9] One issue of the form of orders arises, to which Mr Oakes, who appears for the Applicants, has drawn attention. Section 435C(3) of the Act relevantly provides that the administration of a company may end if the convening period ends, without the relevant second meeting having been convened in accordance with s 439A of the Act, and without an application having been made to the Court to extend the time under s 439A(6) of the Act. That was plainly the case here since the application was not made until today, when the convening period would end last Friday. In Re FEA Plantations Ltd (admins apptd) [2010] FCA 468, to which Mr Oakes refers, Dodds-Streeton J contemplated that, if the convening period expired without an extension first being made, the administration would end under s 435C(3)(b) of the Corporations Act. Her Honour was not there specifically directing her attention to the position in respect of an application made after the end of the convening period. I dealt with an application made after the end of the convening period in Re Tendiris Pty Ltd (admin apptd) (recs and mgrs apptd) [2013] NSWSC 739, where my attention was not, so far as I can recall, specifically drawn to s 435C(3)(b) of the Act or to her Honour's decision in Re FEA Plantations Ltd (admins apptd) above. I proceeded on the basis that an order made under s 439A(6) of the Act, after the convening period, would operate in a self-contained way to extend the convening period. That, of course, would be a logical and desirable result, but it seems to me that it could be argued that an order under s 439A(6), although it extends the convening period, is not effective without more, in circumstances that s 435C(3) had come into effect. That argument might be regarded, by some, as unduly technical and, if it were advanced, it would almost inevitably be met by a further order, nunc pro tunc, under s 447A of the Corporations Act to avert that undesirable result.
[10] In these circumstances, it seems to me that it is desirable to make a further order under s 447A of the Corporations Act, at this point, to avert any risk that a difficulty may arise under s 435C(3) of the Act, and such an order under s 447A of the Act might then need to be made at a future point. That possibility was contemplated by the Applicants, in a form of order that they propose, and I propose to make that order, against the contingency that it is necessary to address the issues arising from the operation of ss 439A(6)-(8) and s 435C(3) of the Act in these circumstances. For these reasons, I will make orders in the form of the orders that have been provided. I will make a further order 6 that these orders be entered forthwith.
(1) The short time frames are an element of the scheme of the Act, the purpose being that creditors should be fully informed about the company's position and have the opportunity to vote as soon as possible.
(2) However, the prospects of a better return to creditors may outweigh the expectation and desirability of prompt resolution. The exercise of power under s 439A(6) involves a balancing of these considerations.
(3) In considering an application for an extension, the court must take into account the detriment to third parties, including the suspension of rights and remedies of secured creditors, lessors and others.
(4) An important question on such an application is whether an extension is necessary to enable the administrator to prepare reports and to come to the opinion required by s 439A(4) to inform creditors as to the appropriate choice between the options of a deed on company arrangement for the administration to end or for the company to be wound-up.
(5) Any extension should be for no longer than is necessary for an informed decision to be made as to whether to enter into a deed of company arrangement winding up the company or the enter the administration.
Sch A - orders made on 11 August 2025 and 14 August 2025
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[1] Affidavit of SR Dixon affirmed on 8 August 2025, par 9.
[2] Affidavit of SR Dixon affirmed on 8 August 2025, pars 10.1, 10.5.
[3] Affidavit of SR Dixon affirmed on 8 August 2025, par 42.4.
[4] Affidavit of SR Dixon affirmed on 8 August 2025, par 10.
[5] Affidavit of SR Dixon affirmed on 8 August 2025, par 10.6, SRD-5 (Lease of Doodlakine Quarry, cl 23.1(2)).
[6] Affidavit of SR Dixon affirmed on 8 August 2025, par 12.
[7] Affidavit of SR Dixon affirmed on 8 August 2025, pars 14 - 19.
[8] Affidavit of SR Dixon affirmed on 8 August 2025, par 41.3.
[9] Affidavit of SR Dixon affirmed on 8 August 2025, pars 43, 45, 46.
[10] Affidavit of SR Dixon affirmed on 8 August 2025, par 48.
[11] Affidavit of SR Dixon affirmed on 8 August 2025, par 43.1, page 500, page 504 (second last bullet point).
[14] As observed by Banks-Smith J in Re Reid Group Pty Ltd (Administrators Appointed); Ex parte Kirman & Bauer [2017] WASC 219 [4], the objects and scheme of pt 5.3 of the Corporations Act were outlined in Flynn v Theobold [2008] WASC 263 [36] ‑ [53] (Beech J); and Re Windimurra Vanadium Ltd & Midwest Vanadium Pty Ltd [2009] WASC 71 [2] ‑ [9] (Beech J). As to the court's function, see Mighty River International Ltd v Hughes [2017] WASCA 152; (2017) 52 WAR 1, [124] - [125] (Buss P), referring to Re Silvia; Austcorp Group Ltd [2009] FCA 636 [18] (Lindgren J); and Re Riviera Group Pty Ltd (Admins Apptd) (Recs and Mgs Apptd) [2009] NSWSC 585; (2009) 72 ACSR 352, [9] ‑ [15], [17] ‑ [18] (Austin J).
[15] Re Reid Group Pty Ltd (Administrators Appointed): Ex parte Kirman & Bauer [4(1) - (5)] (Banks‑Smith J), citing Cameron Shaw and Richard Albarran in their Capacity as Joint and Several Administrators of Home Art Building Group Pty Ltd (Administrators Appointed) v Home Art Building Group Pty Ltd (Administrators Appointed) [2016] WASC 274 [18] (Beech J).
[16] Re Foodora Australia Pty Ltd (Administrators Appointed) [2018] NSWSC 1426 [7]. See Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270.
[17] Re Convergency Services Pty Ltd [2007] VSC 403 [16] (Robson J); Re Parker Logan Property Pty Ltd [27] (Ward J).
[18] Re Riviera Group Pty Ltd (Admins Apptd) (Recs and Mgs Apptd) [13] (Austin J).
[19] Affidavit of SR Dixon affirmed on 8 August 2025, par 41.3.
[20] Plaintiffs' outline of submissions filed on 11 August 2025, par 13.2; affidavit of SR Dixon affirmed on 8 August 2025, par 30.19.
[21] Affidavit of SR Dixon affirmed on 8 August 2025, par 45, 41.9.1.
[22] Affidavit of SR Dixon affirmed on 8 August 2025, par 41.9.
[23] Affidavit of SR Dixon affirmed on 8 August 2025, par 43.1, page 500, page 504 (second last bullet point).
[24] Affidavit of SR Dixon affirmed on 8 August 2025, page 500, page 504 (second last bullet point).
[25] Affidavit of SR Dixon affirmed on 13 August 2025, pars 7 - 8.
[26] Affidavit of SR Dixon affirmed on 13 August 2025, par 14.
[27] Re Riviera Group Pty Ltd (Admins Apptd) (Recs and Mgs Apptd [14] (Austin J).
[28] Re Byron Group Holdings Pty Ltd (administrators appointed) [9].
[29] Re Daisytek Pty Ltd (administrators appointed) [2003] FCA 575; (2003) 45 ACSR 446.
(2017) 52 WAR 1
(2000) 200 CLR 270