FEDERAL COURT OF AUSTRALIA

Octaviar Investment Holdings No. 2 Pty Ltd (In Liquidation) ACN 108 248 737

[2010] FCA 184

OCTAVIAR INVESTMENT HOLDINGS NO. 2 PTY LTD (IN LIQUIDATION)

ACN 108 248 737

THE COURT ORDERS THAT:

1.          Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), the entry by Katherine Elizabeth Barnett and William John Fletcher, as the joint liquidators of Octaviar Investment Holdings No.2 Pty Limited (in liquidation), into a National Portfolio Agency Agreement with Jones Lang LaSalle (QLD) Pty Limited, Jones Lang LaSalle (NSW) Pty Limited, Jones Lang LaSalle (VIC) Pty Limited, Jones Lang LaSalle (SA) Pty Limited and Jones Lang LaSalle (WA) Pty Limited in the form of pages 248 to 302 inclusive of Exhibit KEB-1 be and is hereby approved.

2.          Access to pages 248 to 302 of Exhibit KEB-1 be limited to the applicant and their legal advisors up to and including 5 February 2010 and that thereafter, access to the National Portfolio Agency Agreement be limited to the redacted version marked as Exhibit 1.

3.          Liberty be reserved to apply for any variation of Order 2.

4.          Costs of today be costs of the liquidation of Octaviar No.2 Pty Limited.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

OCTAVIAR INVESTMENT HOLDINGS NO. 2 PTY LTD (IN LIQUIDATION)

ACN 108 248 737

REASONS FOR JUDGMENT

1                                             The applicants (the Liquidators) are the joint liquidators of Octaviar Investment Holdings Number 2 Pty Ltd (Investment).  They seek the approval of the Court, pursuant to s 477(2B) of the Corporations Act 2001 (Cth) (the Act), for their entry into a National Portfolio Agency Agreement with various companies in the Jones Lang LaSalle Group. 

2                                             Investment is a member of a somewhat complicated and complex group of companies, the ultimate holding company of which is Octaviar Limited (Limited).  Limited is also in liquidation and the Liquidators are joint liquidators of Limited.  They were appointed as joint liquidators of Investment by order of the Supreme Court of Queensland on 9 September 2009.  There are more than 70 companies in the group of which Limited is the ultimate holding company.  At its height the group comprised more than 400 companies. 

3                                             Investment is the holding company of a number of interests that are concerned with the ownership and operation of child care facilities that operate under the name Sunkids.  The Liquidators desire to enter into an agreement with the Jones Lang LaSalle companies, whereby the Jones Lang LaSalle companies will act as agents for the sale of various properties owned by subsidiaries of Investment. 

4                                             The subsidiaries consist of Octaviar CCTP Pty Ltd, Sunkids Administration Pty Ltd, Kalamanta Pty Limited, Octaviar CCE Pty Ltd, Carrara Pty Limited and Faldun Pty Ltd.  Octaviar CCE Pty Ltd holds units in the Octaviar Child Care Property Trust.  Octaviar CCTP Pty Ltd is the trustee of that trust.  The details of the childcare operations and the properties that they own or hold as tenants are not specifically relevant to this application. 

5                                             The only creditor of Investment is Octaviar Administration Pty Ltd (Administration), which is also in liquidation.  Administration is another subsidiary of Limited through a number of intermediate companies in a different strain from that of Investment.  Ultimately, the creditors of Limited would benefit from any distribution from Investment to Administration.  At a meeting of creditors of Limited held on 16 October 2009, the Liquidators outlined proposals for the realisation of the assets of the group including proposals for the realisation of the assets of the Sunkids operation as a going concern.  No objection has been raised by the creditors to proposals outlined by the Liquidators at that time. 

6                                             Section 477(2B) of the Act relevantly provides that, except with the approval of the Court, of the committee of inspection or of a resolution of the creditors, a liquidator of a company must not enter into an agreement on the company’s behalf if either the term of the agreement may end or obligations of a party to the agreement may be discharged by performance more than three months after the agreement is entered into, even if the term may end or the obligations may be discharged within that period. 

7                                             The National Portfolio Agency Agreement into which the Liquidators and Investment propose to enter will have a term ending on 31 May 2010.  During that term the companies in the Jones Lang LaSalle Group (the Agents) will advise and consult with representatives of the respective owners of the properties and liaise with proposed buyers to procure the sale of relevant assets at the highest possible price.  The services of the Agents will include preparation of detailed information memoranda, preparation of marketing materials, liaising with sellers’ media representatives, one on one presentations to parties who fit the buying brief of a particular site, weekly reporting, dissemination of due diligence information, facilitating execution of contracts and handling of any potential issues that arise during the campaign.

8                                             The National Portfolio Agency Agreement provides for a fee structure.  Where one of the Agents introduces a buyer, the agent is entitled to a base fee and an introductory agent fee.  When an agent introduces a buyer and negotiates the sale of an asset the Agent will be paid a fixed percentage of the total consideration with a minimum fee of a fixed sum.  If the successful buyer is introduced by another agent that agent will be entitled to a fixed percentage of the total consideration and the fee payable to the Agents will be reduced to a smaller percentage of the total consideration.  A minimum fee of a fixed sum will be payable to the Agents.  The National Portfolio Agency Agreement provides for a marketing budget of a fixed sum.  The terms of the National Portfolio Agency Agreement do not appear to be out of the ordinary for an agreement of that nature. 

9                                             There has been no formal resolution of the only creditor of Investment.  However, there is evidence that Administration, as the only creditor, consents to the proposed National Portfolio Agency Agreement.  As I have said, the creditors of Limited who are the ultimate beneficiaries of any realisation have raised no objection.  In all of the circumstances, I consider that it is appropriate for the Court to approve of the entry into the National Portfolio Agency Agreement by the Liquidators. 

Associate:

Dated:         5 March 2010