RE COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445) & ORS; EX PARTE THOMAS DONALD BIRCH AS JOINT AND SEVERAL ADMINISTRATOR OF COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445) & ORS [2024] WASC 499 (20 December 2024)

Last Updated: 6 January 2025

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : RE COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445) & ORS; EX PARTE THOMAS DONALD BIRCH AS JOINT AND SEVERAL ADMINISTRATOR OF COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445) & ORS [2024] WASC 499

CORAM : HILL J

HEARD : 17 DECEMBER 2024

DELIVERED : 17 DECEMBER 2024

PUBLISHED : 20 DECEMBER 2024

FILE NO/S : COR 195 of 2024

MATTER : IN THE MATTER OF COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445) & ORS

EX PARTE

THOMAS DONALD BIRCH as joint and several administrator of COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445)

First named First Plaintiff

JEREMY JOSEPH NIPPS as joint and several administrator of COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445)

Second named First Plaintiff

STEPHEN PHILLIP EAREL as joint and several administrator of COPPER RESOURCES AUSTRALIA PTY LTD (ADMINISTRATORS APPOINTED) (ABN 641 083 445)

Third named First Plaintiff

VICTORY BRIGHT RESOURCES PTE LTD

Interested Party

Catchwords:

Corporations - External administration - Application by administrators to extend convening period for second creditors' meeting - Whether modification in the interests of creditors as a whole - Whether interests of any persons prejudiced by modification are protected by terms of orders - Turns on own facts

Legislation:

Corporations Act 2001 (Cth) s 439A

Result:

Application granted

Category: B

Representation:

Counsel:

First named First Plaintiff	:	C Spencer
Second named First Plaintiff	:	C Spencer
Third named First Plaintiff	:	C Spencer
Interested Party	:	In Person

Solicitors:

First named First Plaintiff	:	Thomson Geer - Perth
Second named First Plaintiff	:	Thomson Geer - Perth
Third named First Plaintiff	:	Thomson Geer - Perth
Interested Party	:	In Person

Cases referred to in decision:

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)

1. By originating process filed on 10 December 2024, the plaintiffs, who are the joint and several administrators of Copper Resources Australia Pty Ltd (Company), seek a series of orders in relation to the conduct of the administration of the Company.
2. The application before me today is for orders for an extension of time to convene the second creditors' meeting of the Company.
3. In support of the application, the plaintiffs have relied on three affidavits of Thomas Donald Birch, filed on 10 December 2024 (one open and one confidential), as well as a further affidavit filed on 16 December 2024. I have also had the benefit of detailed written submissions filed by the plaintiffs.

Factual background

4. The plaintiffs were appointed as joint and several administrators of the Company on 21 November 2024. The Company's primary asset and business is the open pit Rocklands copper mine in Queensland, together with the associated plant and infrastructure.[1]
5. From the preliminary investigations that have been undertaken by the plaintiffs, Mr Birch believes that:[2]

(a) the Rocklands mine was transitioned into care and maintenance prior to the appointment of the administrators as a result of grade and mining underperformance relative to budget;
(b) the main creditor of the Company is its parent company, who is owed approximately $42.25 million; and
(c) other creditors include employees, trade creditors, native title parties, the Australian Tax Office, and the Queensland state government.

6. On 3 December 2024, the plaintiffs held the first meeting of creditors of the Company. At this meeting, the creditors were informed of the plaintiffs' intention to bring this application. This intention was also raised at the first meeting of the committee of inspection. The evidence before me, which I accept, is that a circular was sent to creditors on 12 December 2024 advising of the application, as well as the date of the hearing. In response to that circular, one former employee has raised a number of concerns about the granting of an extension, which the administrators responded to in some detail.[3]
7. Mr Birch's evidence is that the administrators intend to undertake a sale process for the assets and interests of the Company, and have engaged a corporate advisory firm to assist with this process. At this stage they believe the process will take approximately six months, particularly in light of the upcoming Christmas break.
8. Unless an extension of time is granted, the plaintiffs are required to convene the second meeting of creditors of the Company on or before 20 December 2024, with the meeting being held on or before 30 December 2024.

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

9. The legal principles that govern this application are well known.
10. Pursuant to s 439A(6) of the Act, the court has the power to extend the convening period on an application that is made during or after the period referred to in s 439A(5)(a) or s 439A(5)(b) as the case requires. In determining the application, the court is required to take into account the objects and scheme of pt 5.3A of the Act which is set out in s 435A. These objects are to maximise the chances of the company (or as much as possible of its business) continuing in existence, or, if this is not possible, for the administration to be done in such a way as to result in a better return for the company's creditors and members than would result from an immediate winding up.
11. In reaching its decision, the court must maintain an appropriate balance between the expectation that an administration will be undertaken in a relatively speedy and summary manner, with a need to ensure that the administration is not concluded without consideration of sensible and constructive options directed towards maximising the returns for creditors and any return that might be possible for shareholders.[4]
12. The court is also required to take into account the detriment to third parties (if any), including the suspension of rights and remedies of any secured creditors, lessors and others (including employees). In this regard, creditors' interests can be prejudiced by not only delay, but also by the premature convening of meetings. Instances where creditors have been prejudiced include where an administrator has been unable to obtain adequate information for the preparation of an administrator's report in a form enabling creditors to make an informed decision.[5]
13. In Mighty River International Limited v Hughes, Nettle and Gordon JJ stated that the court will generally exercise its discretion to extend the convening period where one or more of the established categories are raised, where there is no evidence of material prejudice to those affected by the extension of time, and the court is satisfied that the administrator's estimate of time required has a reasonable basis.[6]
14. The relevant established categories include:

(a) whether the convening period allows enough time for the administrator to produce a satisfactory report;
(b) where there is a need to extend the administration period to facilitate the sale of the business of the company as a going concern, or to progress and assess a deed of company arrangement proposal (DOCA);
(c) where the creditors support the extension;
(d) the administrator's own opinion as to the need for an extension, particularly where the administration is complex; and
(e) where additional time is likely to enhance the return for unsecured creditors.

15. In this case, the evidence of the plaintiffs is that further time is needed to facilitate the sale of the business of the group as a going concern, or to progress any proposal that might be received for a DOCA, and that the plaintiffs believe an extension of six months is required for the convening period.
16. For the following reasons, I am satisfied that it is appropriate to grant the application for an extension of the convening period, including the proposed Daisytek order.[7]
17. First, I accept that the convening period mandated under the Act does not enable the administrators to produce a detailed report containing a more considered opinion as to the options available to creditors. I specifically accept Mr Birch's evidence that, without an extension, the plaintiffs will not be in a position to make an informed recommendation to creditors, given the proposed sale process has not yet started.[8]
18. Second, I accept that the convening period is required to be extended, in order to facilitate the sale of the Company (or parts of it), or to enable any DOCA to be proposed, and for negotiations to take place of either of those options. Both of these options are matters that are consistent with the purposes of pt 5.3A of the Act.
19. Third, on the evidence before me, I consider the return to creditors is likely to be significantly enhanced through the granting of an extension and enabling the sale process proposed by the plaintiffs to occur.
20. Fourth, the opinion of the administrators is that an extension is required for a period of six months. On the evidence before me, particularly in relation to the timing and duration of the proposed sale process, I am satisfied there is a reasonable basis for this estimate.
21. Finally, notwithstanding the issues that have been raised by a former employee of the Company, I am satisfied on all the evidence before me that the potential benefit of the extension will outweigh any prejudice to creditors and that an extension is in the best interests of the creditors of the Company as a whole.[9]

Annexure A

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

KC
Associate to the Honourable Justice Hill

20 DECEMBER 2024

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[1] Affidavit of Thomas Donald Birch filed 10 December 2024 [16].
[2] Affidavit of Thomas Donald Birch filed 10 December 2024 [20].
[3] Affidavit of Thomas Donald Birch filed 10 December 2024 [82] - [93].
[4] Tucker (Administrator) v Bolten (Trustee), in the matter of Quintis Leasing Pty Ltd (Administrators Appointed) (No 2) [2024] FCA 46 [54] (Banks-Smith J), citing Barrett J in Diamond Press Australia Limited [2001] NSWSC 313 [10].
[5] Re Harrisons Pharmacy Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2013] FCA 458 [13] (Farrell J).
[6] Mighty River International Limited v Hughes [2018] HCA 38 [73].
[7] Re Daisytek Australia Pty Ltd (Administrators Appointed) [2003] FCA 768.
[8] Affidavit of Thomas Donald Birch filed 10 December 2024 [35] - [40].
[9] At the conclusion of the hearing, I made orders in terms of Annexure 'A'.