Federal Court of Australia
Mansfield, in the matter of Fresh for Life…..Pty Ltd (administrators appointed) (No 2) [2024] FCA 1303
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. Subject to order 2 below, pursuant to ss 37AF(1) of the Federal Court of Australia Act 1976 (Cth) and on the ground that the order is necessary to prevent the proper administration of justice:
(a) the documents identified as “Confidential Exhibit DM-2” referred to in the affidavit of David Ian Mansfield sworn on 30 August 2024;
(b) the paragraph number 6 of pages 16 and 21 of the affidavit of Thomas Karle affirmed on 4 September 2024;
(c) the paragraph number 6 of pages 2, 10, 19 and 57 of Exhibit DM-3 referred to in the affidavit of David Ian Mansfield sworn on 7 November 2024,
(collectively, the Documents) be marked “Confidential” on the Court’s file and not be published, disclosed or accessed by any person until after 21 March 2025, except pursuant to an order of the Court.
2. Order 1 above:
(a) is to take effect throughout the Commonwealth of Australia; and
(b) does not prevent the plaintiffs, the plaintiffs’ legal representatives or the plaintiffs’ servants, agents or employees, from disclosing, publishing or accessing the Documents and the information contained therein.
3. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), Pt 5.3A of the Corporations Act is to operate in relation to Fresh For Life.....Pty Ltd (administrators appointed) (Company) as if:
(a) s 75-140(3) of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR) omitted the words “that is more than 45 business days after the first day on which the original meeting was held” and, in lieu thereof, included the words “later than 21 March 2025”;
(b) Pt 5.3A of the Corporations Act allowed adjournment of the meeting convened under s 439A of the Corporations Act in relation to the Company to a day not later than 21 March 2025, notwithstanding the operation of s 75-140(3) of the IPR; and
(c) the requirement to hold a meeting of creditors of the Company within the convening period specified in s 439A(2) of the Corporations Act is satisfied by holding the adjourned meeting no later than 21 March 2025, and provided that the requirements of section 75-140 of the IPR are otherwise complied with in respect of such meeting.
4. Within two (2) business days, the first plaintiffs are to cause notice of those orders to be provided to:
(a) each of the known creditors of the Company;
(b) each of the directors of the Company,
(the Notified Parties) with such notice to be provided to the Notified Parties by taking the following steps:
(c) where the first plaintiffs:
(i) have the email address of the relevant Notified Party, by email sent to that email address; and
(ii) do not have the email address of the relevant Notified Party, but have a postal address (or have received notice of non-delivery of a notice sent by email in accordance with order 4(c)(i) above), by ordinary pre-paid post to that postal address.
5. The first plaintiffs’ costs of and incidental to this application be costs and expenses in the administration of the Company and be paid out of the assets of the Company.
6. Any officer, contributory or creditor of the Company, or any other person who can demonstrate sufficient interest, have liberty to apply to vary or discharge order 3 above on 2 business days’ notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
(Delivered ex tempore)
STEWART J:
1 David Mansfield and Nathan Schwarz are the voluntary administrators of Fresh for Life.....Pty Limited (FFL). They apply for an order under s 447A of the Corporations Act 2001 (Cth) (Act) modifying the operation of Pt 5.3A of the Act in relation to FFL in order to further defer the time for resuming the second meeting of creditors of FFL to 21 March 2025.
2 The second meeting was held on 19 July 2024, adjourned for up to 45 business days, and, on 5 September 2024, its resumption was deferred to 19 November 2024 pursuant to orders made by Yates J for reasons published as Mansfield, in the matter of Fresh For Life.....Pty Ltd (administrators appointed) [2024] FCA 1048. Unless there is a further deferral, notice of the resumed meeting must be given to the creditors by 12 November 2024.
3 The relevant background is set out in the reasons of Yates J and does not bear repetition. I am satisfied that this is an appropriate case for a grant of relief under s 447A to further defer the time for resuming the second meeting of creditors to 21 March 2025.
4 In that regard, Mr Mansfield has expressed the opinion that the further deferral of the resumption of the meeting and the continuation of the voluntary administration is in the best interests of FFL and its creditors because it will enable the administrators to negotiate and complete any sale process.
5 There is some complexity to that process, which has been explained on affidavit, including that it involves multiple parties. Further, the administrators do not have control of delays sometimes caused by other parties in getting back to them. In those circumstances, I am satisfied that the extra time will be needed, or may be needed, in order to finalise the negotiations.
6 Mr Mansfield also has the view that the further deferral aligns with the objects of Pt 5.3A of the Act, and that the deferral may allow for a potentially greater return than an immediate winding up. Giving due recognition to Mr Mansfield’s commercial assessment, which I must, I am satisfied of those matters.
7 Mr Mansfield gives evidence that he is not aware of any material prejudice to the company’s creditors that may result from a further deferral, and I can think of no particular such prejudice.
8 Notice of the present application was given to creditors on 6 November 2024. No creditor has objected to the relief sought. I also intend making the usual order allowing any interested party to apply to vary the orders.
9 The period of the extension is lengthy, which has caused me some pause, but I am ultimately satisfied that it is properly supported by the evidence. There is, naturally, the usual end-of-year hiatus fast approaching, which partly justifies the lengthy deferral. It is also relevant that there is no identifiable prejudice arising from that deferral.
10 In short, I am satisfied that it is in the interests of the proper administration and the creditors in due course that negotiations towards a proposed sale of business and assets continue, and a deferral should be ordered.
11 I will make orders essentially in the terms sought by counsel. I am also satisfied as to the need for the continuation of orders in relation to confidentiality and non-publication in order to protect those negotiations.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart. |
Associate:
