Supreme Court New South Wales Medium Neutral Citation: In the matter of Tiaro Coal Limited (Administrators Appointed) [2015] NSWSC 2055 Hearing dates: 30 April 2015 Date of orders: 30 April 2015 Decision date: 30 April 2015 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: Convening period for second creditor's meeting extended. Catchwords: CORPORATIONS – voluntary administration – creditor's meeting – extension of time for convening of second creditor's meeting – where administration has some complexities but insufficient evidence to demonstrate necessity of length of time sought – held, extension of convening period granted for period shorter than sought. Legislation Cited: (Cth) Corporations Act 2001, s 436A, s 439A, s 447A Category: Procedural and other rulings Parties: Martin Madden, David Winterbottom and Rahul Goyal as joint and several administrators of Tiaro Coal Limited (administrators appointed) (first plaintiff) Tiaro Coal Limited (administrators appointed) (second plaintiff) Representation: Counsel: M J Deleuil (solicitor) (plaintiffs) Solicitors: Quinn Emanuel Urquhart & Sullivan (plaintiffs) File Number(s): 2015/128237 Judgment (ex tempore) 1. HIS HONOUR: The applicants are the administrators of Tiaro Coal Limited, having been so appointed by the directors on 31 March 2015, pursuant to (Cth) Corporations Act 2001, s 436A. The convening period expires on 7 April 2015. The applicants seek leave to file an originating process seeking an extension of time within which to convene the second meeting of creditors for a period of six months up to and including 7 November 2015 and consequential relief. 2. On an application for extension of a convening period, the Court does not approach the matter with any presumption that an administration ought ordinarily be conducted within the period provided for by s 439A, but weighs the expectation that an administration should ordinarily proceed expeditiously against the prospective benefits of potentially achieving a better outcome for creditors and/or preserving the company and/or its business through an extension. It is of course important that administrators, so far as practicable, be able to make an informed recommendation to creditors for the purposes of the s 439A meeting. On such an application, the Court is also concerned to have regard to the impact on secured creditors, lessors and others of the moratorium imposed by an administration, and also to the attitude of the creditors generally. 3. I am content to accept that this is an administration which involves a number of complexities in terms of ascertaining just what the assets of the company are, and potentially realising some of those assets. I am far from convinced, on the material presently provided, that it will take six months, or a period approaching six months, for diligent administrators to form an adequate or sufficient view of the assets to enable a sensible recommendation to be made to creditors. 4. The Court is informed that, save for a right of occupation of serviced offices which has been prepaid, the company is not an occupant of leasehold premises and has no secured creditors. However, there is no satisfactory evidence of the attitude of creditors generally to the application – although that difficulty can, to some extent, be mitigated by reserving leave to creditors to apply to set aside any order extending time. 5. The evidence is rather vague and general as to what steps need to be taken that might require the further time sought. Apparently, some indicative proposals for a deed of company arrangement have been received, and it is no doubt desirable that the administrators be afforded some time to investigate them. Again, at least on the material presently available, I do not see why that should take more than three months. Indeed, it ought not require as long as that. 6. The administrators also apparently wish to conduct further investigations to ascertain whether there have been voidable uncommercial or director-related transactions that may be set aside in a liquidation, and also to conduct other investigations as to whether there have been any breaches, offences or voidable transactions. Such investigations can, of course, be conducted by a liquidator as well as by an administrator. While I accept that the availability of voidable transactions might well be relevant to the administrator's recommendation, again I am, on the material presently before the Court, unconvinced that that is sufficient to justify an extension of time of six months for what is, after all, intended to be a relatively expeditious procedure. 7. Better evidence of the view of creditors, particularly unrelated creditors, and of precisely what it is proposed to undertake might have resulted in a different view and might, in due course, justify a further extension; but any further extension would need to be supported by much better evidence as to what the administrators have actually done up to the date when it is sought, what they propose to do in detail in the event of any further extension, reasoned estimates of the time that would be required, and clear evidence of the attitude to a further extension of those interested – in particular, as I say, unrelated creditors. 8. Upon the undertaking of M J Deleuil, solicitor, to pay the appropriate filing fees, I grant leave to Martin Madden, David Winterbottom and Rahul Goyal as administrators of Tiaro Coal Limited to file an originating process in the form initialled by me, dated this day and placed with the papers. I direct that the originating process be returnable instanter. I dispense with service of the originating process. The Court orders that: 1. Pursuant to Corporations Act, s 439A(6), the period within which the applicants must convene the second meeting of creditors of the company be extended up to and including 7 August 2015. 2. Pursuant to s 447A(1), the second meeting of creditors of the company required by s 439A may be held at any time during or within five business days after the end of the convening period as extended by order 1, notwithstanding the provisions of s 439A(2). 3. The applicants give notice to all creditors – including persons claiming to be creditors – of the company for whom the applicants have a current postal, facsimile or email address and the Australian Securities and Investments Commission of these orders and, in the event that they intend to apply for a further extension of the convening period of any such application, by circular notice forwarded by post, facsimile or email as the case may be, to such creditors within seven days of this date. 4. The applicants publish the said circular on their website at www.KordaMentha.com/creditors/information/Australia/143 within seven days of this date. 5. Any person who can demonstrate a sufficient interest, including any creditor, has liberty to apply on three days' notice to the applicants and to the Court to vary or set aside these orders. 6. The costs of this application be costs in the administration. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 February 2016