FEDERAL COURT OF AUSTRALIA

Juratowitch (liquidator), in the matter of Field Solutions Holdings Limited (Administrators Appointed) (Receivers and Managers Appointed) [2025] FCA 207

ORDERS

THE COURT ORDERS THAT:

Extension of convening period

1.    Pursuant to section 439A(6) of the Corporations Act 2001 (Cth) that the period within which the Administrators must convene the second meeting of the creditors of the Companies be extended up to and including 19 June 2025.

2.    Pursuant to section 447A(1) of the Corporations Act 2001 (Cth) that Part 5.3A of the Corporations Act is to operate in relation to each of the Companies such that, notwithstanding section 439A(2), the second meeting of the creditors of any of the Companies required under section 439A may be convened at any time during, or within 5 business days after the end of, the convening period, as extended by order 1 above.

Notice and liberty to apply

3.    The Administrators (or their solicitors) must take all reasonable steps to cause notice of these orders to be given, within 3 business days after the making of these orders, to:

(a)    the creditors of the Companies in the following manner:

(i)    where the creditor is a Portal-Registered Creditor, by publishing a notice via the Portal; and

(ii)    where the creditor is not a Portal-Registered Creditor, by a circular sent by post or e-mail; and

(b)    Matthew Hutton and Robert Smith (in their capacity as joint and several receivers and managers of the second to thirteenth plaintiffs); and

(c)    the Australian Securities and Investments Commission.

4.    There be liberty to apply to any person who can demonstrate sufficient interest to vary or discharge these orders on not less than 72 hours' notice to the Administrators and to the Associate to the Commercial and Corporations Duty Judge.

5.    The Administrators have liberty to apply for any purpose connected with the administration of the Companies, including but not limited to seeking a further extension of the convening period.

Confidentiality

6.    Pursuant to section 37AF(1)(b) of the Federal Court of Australia Act 1976 (Cth):

(a)    paragraphs 24, 25, 26(c) to (f), 28 and 37 of the Juratowitch Affidavit and Annexure DPJ-2; and

(b)    sections B and C of the Smith Affidavit and Annexure RBS-2,

are to be treated as confidential and kept in a sealed envelope which is to be marked as confidential, and is not to be made available for inspection by any person without the leave of a Judge or a Registrar of the Court.

Other

7.    The costs of and incidental to this application be costs and expenses in the administrations of the Companies and be paid out of the assets of the Companies, jointly and severally.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCEVOY J:

1    Before the court is an originating process dated 12 March 2025 by which the first plaintiffs, Mr Daniel Juratowitch and Mr Barry Wight in their capacity as joint and several administrators (the Administrators), seek orders pursuant to ss 439A and 447A(1) of the Corporations Act 2001 (Cth) (Corporations Act) extending the period within which they must convene the second meetings of creditors in respect of the second to sixteenth plaintiffs (together the Companies) for a period of up to approximately three months to 19 June 2025, together with ancillary orders. The convening period for the second meeting for the Companies will, unless extended, expire on or about 19 March 2025.

2    The Administrators are the joint and several administrators of the Companies, which are as follows:

(a)    Field Solutions Holdings Ltd (admin apptd) (recs and mgrs. apptd) (FS Holdings);

(b)    Field Solutions Group Pty Ltd (admin apptd) (recs and mgrs. apptd);

(c)    Field Solutions Technology Services Pty Ltd (admin apptd) (recs and mgrs. apptd);

(d)    FSG MSP Pty Ltd (admin apptd) (recs and mgrs. apptd);

(e)    FSG RSP Pty Ltd (admin apptd) (recs and mgrs. apptd);

(f)    FSG Construction Pty Ltd (admin apptd) (recs and mgrs. apptd);

(g)    Tasmanet Pty Ltd (admin apptd) (recs and mgrs. apptd);

(h)    FSG Assets Pty Ltd (admin apptd) (recs and mgrs. apptd);

(i)    FSG Infrastructure Pty Ltd (admin apptd) (recs and mgrs. apptd);

(j)    FSG Mining Services Pty Ltd (admin apptd) (recs and mgrs. apptd);

(k)    FSG Security Pty Ltd (admin apptd) (recs and mgrs. apptd);

(l)    Freshtel Pty Ltd (admin apptd) (recs and mgrs. apptd);

(m)    Internomic Pty Ltd (admin apptd);

(n)    Data Centre 3 Pty Ltd (admin apptd); and

(o)    Tasconnx Pty Ltd (admin apptd).

3    The Administrators rely on the affidavit of Mr Juratowitch dated 12 March 2025 (Juratowitch affidavit) and the affidavit of Mr Robert Smith dated 12 March 2025 (Smith affidavit). Mr Smith is one of the receivers and managers of the companies in receivership.

4    The Administrators also seek an order pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (Federal Court of Australia Act) that sections B and C and documents in Confidential Annexure RBS-2 of the Smith affidavit, and documents in Confidential Annexure DPJ-2 of the Juratowitch affidavit, not be disclosed or made available for inspection by any person without leave of the court. This order is sought on the basis that the matters contained in those parts of the affidavits are confidential and commercially sensitive and that their disclosure may prejudice the proper administration of justice.

5    The matter was listed before me as Commercial and Corporations Duty Judge on 14 March 2025. It was urgent by reason of the imminence of the end of the convening period. Having had the benefit of detailed written and oral submissions from Ms Bell of counsel on behalf of the Administrators, I was satisfied that the convening period should be extended and that the ancillary orders (including the order pursuant to s 37AF of the Federal Court of Australia Act) should also be made. Accordingly I made orders substantially in the terms sought by the Administrators. My reasons for making these orders, which rely significantly on the Administrator’s written submissions, are as follows.

BACKGROUND

The corporate structure and business operations of the Companies

6    The evidence discloses the following matters.

7    FS Holdings is a public company listed on the Australian Securities Exchange. Each of the other Companies is a direct or indirect subsidiary of FS Holdings.

8    The Companies form part of a telecommunications group known as “Field Solutions Group”. The revenue of the Field Solutions Group in the financial year ending 30 June 2024 was approximately $63.4 million.

9    The Field Solutions Group operates as a telecommunications carrier, telecommunications asset owner and technology services provider (Business). The Administrators’ investigations indicate that the Business comprised two distinct components:

(a)    a managed services business, providing managed information technology services to:

(i)    customers in regional and remote areas of Australia;

(ii)    customers in Tasmania; and

(iii)    customers in the mining sector; and

(b)    an infrastructure business, involving the development and construction of a regional mobile network with government grant support.

10    The Administrators were appointed to the Companies on 19 February 2025. The same day, shortly prior to the Administrators’ appointment, the secured creditor of the second to thirteenth plaintiffs (Companies in Receivership) appointed Mr Smith and Mr Matthew Hutton of McGrathNicol (Receivers) as receivers and managers of the Companies in Receivership.

11    The Administrators understand that the thirteenth to sixteenth plaintiffs (which are not under receivership) are legacy entities that do not trade and have no ascertainable operations or functions.

12    Since their appointment, the Receivers have continued to trade the Business. As at the date of the Administrators’ and Receivers’ appointment, the Companies had 104 employees. That number has since been reduced to 79 employees.

13    Prior to the appointment, the Companies had entered into a heads of agreement to sell the portion of the Business relating to the mining sector to a third party. That sale has been progressed by the Receivers.

14    As at the date of the Receivers’ appointment, the Companies in Receivership had eight leased premises across New South Wales, Queensland and Tasmania, and around 30 further leases with landowners in respect of mobile telecommunication towers. The Receivers intend to exit two leased premises on or before 31 March 2025 in accordance with notices given to the landlords to that effect prior to their appointment. The Receivers presently intend to service the remaining leases.

Overview of the Companies’ assets and liabilities

15    The financial affairs of the Companies are not uncomplicated, having regard to the complex corporate structure and the size and scale of the Business. The consolidated balance sheet and profit and loss statements in the February 2025 management accounts (February management accounts) indicate that the Field Solutions Group held the following assets as at the date of appointment:

(a)    cash: $259,455;

(b)    property, plant and equipment (book value): $45,860,139;

(c)    trade receivables: $9,980,948;

(d)    intangible assets: $9,657,770; and

(e)    right of use assets: $10,780,754.

16    The February management accounts disclose the following liabilities:

(a)    secured: $13,243,825;

(b)    lease liabilities: $7,506,065;

(c)    contract liabilities: $6,606,685;

(d)    trade creditors: $29,716,017; and

(e)    employee liabilities: $1,282,567.

17    The February management accounts also disclose material intercompany liabilities.

The Receivers’ sale and recapitalisation process

18    The Administrators consider that it is in the best interests of the Companies and their creditors to allow the Receivers’ going concern sale and recapitalisation process to occur, in order to explore the possibility of a better return to creditors arising from such a process.

19    This view is shared by the Receivers, who also consider that the Companies’ assets are likely to be worth far more as a portfolio when sold together with the relevant business unit as a going concern.

20    The Receivers’ sale and recapitalisation process was commenced when an advertisement seeking expressions of interest was published in the Australian Financial Review on 24 February 2025. The advertisement invited interested parties to submit expressions of interest by 28 February 2025. Parties which responded to the advertisement were asked to sign a confidentiality deed and upon receipt of a signed deed, the Receivers provided the party with a letter setting out the process for the submission of offers (Process Letter) and access to a confidential virtual data room.

21    Section C of the Smith affidavit sets out the number of executed confidentiality deeds received and the number of parties which then provided non-binding indicative offers. Final binding offers are due for submission on 14 March 2025. The Receivers will then require around three to four weeks to select the successful offers and negotiate the terms of the transactions. The transactions will then need to be documented. On that basis, the Receiver’s best estimate is that the sale process could be completed by the end of May 2025, but that it could take longer depending on the complexity of proposed offers and transactions, issues arising in the due diligence process, and so on.

Creditor notification

22    At the first meeting of creditors on 3 March 2025, the Administrators foreshadowed to those in attendance that it was possible the Administrators would need to make an application to the court to extend the convening period. No opposition was raised by any of the creditors in attendance.

23    The Administrators provided notice of this application by way of circular to creditors of the Companies via the portal set up by Cor Cordis and/or by email.

THE STATUTORY REGIME AND RELEVANT PRINCIPLES

24    Sections 439A(6) of the Corporations pursuant to which this application is brought, are found in Part 5.3A of the Corporations Act. The relevant provisions are as follows:

439A Administrator to convene meeting and inform creditors

(1)    The administrator of a company under administration must convene a meeting of the company’s creditors within the convening period as fixed by subsection (5) or extended under subsection (6).

(2)    The meeting must be held within 5 business days before, or within 5 business days after, the end of the convening period.

…

(5)    The convening period is:

(a) if the day after the administration begins is in December, or is less than 25 business days before Good Friday — the period of 25 business days beginning on:

(i) that day; or

(ii) if that day is not a business day — the next business day; or

(b)    otherwise — the period of 20 business days beginning on:

(i) the day after the administration begins; or

(ii) if that day is not a business day — the next business day.

(6)    The Court may extend the convening period on an application made during or after the period referred to in paragraph (5)(a) or (b), as the case requires.

…

447A General power to make orders

(1)    The Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company.

…

(3)    An order may be made subject to conditions.

(4)    An order may be made on the application of:

…

(c) in the case of a company under administration—the administrator of that company;

…

25    Section 447A of the Corporations Act confers a broad jurisdiction on the court regarding the operation of Part 5.3A of the Corporations Act.

26    It may be accepted that applications to extend convening periods have become commonplace and that the time period prescribed by s 439A(5) will often be insufficient to enable administrators to perform the tasks required before the second meeting.

27    The principles and authorities relevant to extensions of the convening period were essayed by Middleton J in Strawbridge, Re Virgin Australia Holdings Ltd (admins apptd) (No 2) (2020) 144 ACSR 347 at [64] to [68]; see also Warwick, in the matter of BWX Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2023] FCA 465 (McEvoy J). They are well known and it is unnecessary to repeat them for present purposes.

28    The Administrators also seek what have become known as “Daisytek orders” (see Re Daisytek Australia Pty Ltd (administrators appointed) and Another (Bowen and Hall as joint admins) (2003) 45 ACSR 446 (Lindgren J)) under section 447A of the Corporations Act, being orders to the effect that the second creditors’ meetings may be held at any time within the extended convening period or the period of five business days thereafter, notwithstanding the effect of s 439A(2) of the Corporations Act. That sub-section provides that the meeting “must be held within 5 business days before, or within 5 business days after, the end of the convening period”, thus preventing an earlier convening of the meeting. Orders of this nature have become almost routine. They provide administrators with the flexibility to enable them to convene second creditors’ meetings earlier if the circumstances indicate that it is appropriate to do so.

DETERMINATION

29    The Administrators seek an extension of the administration period in order to enable the Receivers’ sale and recapitalisation process to be progressed. I accept that enabling a sale process to complete is one of the well recognised examples of situations where the court will extend the convening period.

30    Until the sale and recapitalisation process is completed, the Administrators are unable to give an opinion as to whether it would be in the interests of creditors for the Companies to execute a deed of company arrangement, for the administrations to end, or for the Companies to be wound up. They will then require a further two to three weeks to prepare the report to creditors and convene the second creditors’ meeting.

31    I accept that a going concern sale or deed of company arrangement will maximise the prospect of the remaining 79 employees maintaining their employment.

32    The Administrators consider that an extension is in the interests of creditors and that an approximate three month extension of the convening period to 19 June 2025 is required in order to enable:

(a)    the Receivers to:

(i)    complete the sale and recapitalisation process;

(ii)    continue trading the Business so as to preserve the value of the Business and the assets of each Company (noting that the value of those assets will likely diminish if trading ceases) and maximise the prospects of a sale of the Business as a going concern;

(b)    the Administrators to:

(i)    pursue, and if appropriate finalise, a deed of company arrangement proposal (if any); and

(ii)    complete the investigations required in order to report to creditors in accordance with section 439A of the Act.

33    I accept that the Administrator’s own opinion as to the need for an extension should be given weight in an application of this kind.

34    The application is supported by the Receivers and their appointor.

35    In the circumstances I am satisfied that it would be appropriate to make the orders sought by the Administrators. An extension of the convening period will further the purpose of maximising the return to creditors and ensure that the Administrators have sufficient time to comply with their statutory obligations. The period of approximately three months sought is reasonable.

36    As to the non-publication and non-disclosure orders sought by the Administrators over sections B and C of the Smith affidavit, documents in Confidential Annexure RBS-2 to the Smith affidavit, and documents in Confidential Annexure DPJ-2 to the Juratowitch affidavit, the court has power pursuant to s 37AF(1)(b)(i) of the Federal Court of Australia Act to make a suppression or non-publication order to restrict publication or disclosure of information about evidence. Section 37AF(1)(b)(i) provides:

(1)    The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:

…

(b)    information that relates to a proceeding before the Court and is:

(i)    information that comprises evidence of information about evidence;

…

37    Section 37AG(1) of the Federal Court of Australia Act sets out the grounds pursuant to which the court may make a suppression or non-publication order under s 37AF, and includes that the order is necessary to prevent prejudice to the proper administration of justice.

38    Several of the authorities relating to s 37AF of the Federal Court of Australia Act are summarised in Clark v Digital Wallet Pty Ltd [2020] FCA 877 at [19]-[22] (Abraham J).

39    For present purposes I accept that sections B and C of the Smith affidavit and the Confidential Annexure RBS-2 contain sensitive information about the Receivers’ sale and recapitalisation process which, if disclosed, may impact the ongoing conduct of that process. I accept also that Confidential Annexure DPJ-2 to the Juratowitch affidavit contains personal data pertaining to employees and creditors which requires protection. In addition, FS Holdings is a publicly listed company, and much of the financial information disclosed in the relevant parts of the affidavits and their annexures is not presently public information.

40    In these circumstances I consider that it is appropriate for the non-publication and non-disclosure orders which the Administrators seek to be made.

OTHER MATTERS

41    The Administrators seek the usual orders as to costs and liberty to apply in relation to any further extension of the convening period at any time prior to 19 June 2025. I am satisfied that it is appropriate to make orders in these terms. The orders to be made also accommodate any person who can demonstrate a sufficient interest by way of liberty to apply on 72 hours’ notice to the Administrators.

Associate:

Dated:    14 March 2025

SCHEDULE OF PARTIES