Federal Court of Australia

Brereton (Administrator), in the matter of Whyalla Ports Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2025] FCA 774

ORDERS

THE COURT ORDERS THAT:

1. Pursuant to section 439A(6) of the Corporations Act 2001 (Cth) (Act), the period in which the Plaintiffs must convene the second meetings of creditors of Whyalla Ports Pty Ltd (Company) be extended to 7 October 2025.

2. Pursuant to section 447A(1) of the Act, the meetings of the creditors of the Company required by section 439A may be held at any time during the period up to, or within five business days after, the end of the convening period as extended by paragraph 1 above, notwithstanding the provisions of section 439A(2) of the Act.

3. Any person who can demonstrate sufficient interest to modify or discharge these orders shall have liberty to apply to the Associate to Justice O’Callaghan on three business days’ written notice to the Plaintiffs.

4. Pursuant to section 447A(1) of the Act, notice of the second meeting of creditors of the Company (Second Meeting) required to be given pursuant to section 75-225(2) of the Insolvency Practice Rules (Corporations) 2016 (Cth) (IPR) (Notice) and the report and statement required to be given to creditors of the Company pursuant to section 75-225(3) of the IPR (Reports) will be validly given to creditors of the Company by:

(a) sending the Notice and Reports by email (Email) to the email address of each creditor at such email address as is recorded in the books and records of the Company;

(b) where an email address of a creditor is not recorded in the books and records of the Company, sending by post the Notice and Reports (Letter) to the postal address of the creditor at such postal address as is recorded in the books and records of the Company;

(c) lodging the Notice and Reports with ASIC for publication by ASIC in accordance with regulation 5.6.75(4) of the Corporations Regulations 2001 (Cth) at least five days before the date of the Second Meeting.

5. Pursuant to section 447A(1) of the Act, and subject to further order, all future notices, reports and communications that the Plaintiffs must or may give or send to creditors of the Company may be given and/or sent in accordance with the procedures set out in paragraph 4(a) – (b) above.

6. Notice sent to a creditor pursuant to paragraph 4 or 5 above is taken to be given on the business day after it is sent.

7. The Plaintiffs give notice of these orders to the creditors of the Company by sending a circular letter to creditors of the Company (by email in respect of those creditors for whom there is an email address in the books and records of the Company or who have otherwise notified the Plaintiffs that email is their preferred method of communication, and by post in respect of all other known creditors) informing them of the substance of these orders.

8. The Plaintiffs’ costs of and incidental to this application be costs in the administration of the Company.

9. These orders be entered forthwith.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J:

Introduction

1 This was an application by the administrators of Whyalla Ports Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (Company) (Administrators) under s 439A of the Corporations Act 2001 (Cth) (Act) for orders giving effect to a three-month extension of the convening period for the second meeting of creditors in respect of the Company.

2 The Administrators also sought related procedural orders under s 447A of the Act, none of which was the subject of any controversy.

3 Absent an extension, the Administrators would have been required to convene the second meeting of creditors by 7 July 2025 and to hold the meeting by no later than 14 July 2025.

4 At a hearing on 4 July 2025, I made the orders set out above.  These are my reasons.

5 At the hearing, Mr J Hynes of counsel appeared for the Company and the Administrators.  He read an affidavit affirmed on 2 July 2025 by one of the Administrators, Mr Rashnyl Prasad.

6 He also tendered two letters addressed to the solicitors for the Administrators:

(a) the first dated 3 July 2025, was sent by the solicitors for the receivers and managers of the Company (the Receivers and Managers) and for Golding Contractors Pty Ltd (Golding), a secured creditor of the Company; and

(b) the second dated 3 July 2025, was sent by the solicitors for Liberty Primary Metals Australia Pty Ltd (LPMA), which is the parent entity of the Company and OneSteel Manufacturing Pty Ltd (Administrators Appointed) (OneSteel).

7 The letters anticipated that Golding, the Receivers and Managers and LPMA would support the Administrators’ extension application, which they did.

8 At the hearing, Mr L Pham of counsel appeared on behalf of Golding and the Receivers and Managers.  Mr C Hibbard of counsel appeared on behalf of LPMA.

9 Mr L Zwier of counsel appeared for OneSteel and its administrators.  He opposed the extension application. He tendered:

(a) a document entitled “Whyalla Port Handbook” (version 18) dated August 2024 (Whyalla Port Handbook); and

(b) a Form 535 Formal Proof of Debt or Claim (General Form) dated 4 July 2025 (Proof of Debt) which particularised the debt owed by the Company to OneSteel in the amount of over $1.3 billion.

Background

Incorporation and operations of the Company

10 On 14 September 2011, the Company was incorporated in connection with a project to upgrade and expand the infrastructure of port facilities located in Whyalla, South Australia (the Whyalla Port).  Following the completion of the upgrade and expansion project, the Company continued to operate out of the Whyalla Port, managing the port facilities and providing port-related services such as logistics and vessel loading services.

11 On 29 June 2018, the Company and OneSteel executed an agreement pursuant to which OneSteel leased to the Company “that portion of the lands in Certificate of Titles Volume 6105 Folio 304, Volume 6141 Folio 526, Volume 5582 Folio 363, Volume 5463 Folio 457 and Volume 5603 Folio 813” (as described in Annexure A to that agreement) for a term of 7 years, commencing on 1 January 2012 (the Lease).  The Lease also included an option for the Company to renew the lease for a further term of 99 years. There are conflicting accounts as to whether the Company formally exercised its option to renew the Lease for the further term.

12 On 27 March 2025, the administrators of OneSteel sought to terminate the Lease by issuing a notice of termination and re-possession.  As a result of the purported termination of the Lease (put beyond doubt by the enactment of the Whyalla Steel Works (Port of Whyalla) Amendment Act 2025 (SA)), the Company was no longer able to continue its operations or perform under its previous supplier agreements and was dispossessed of all plant and equipment.

13 The Company is currently engaged in two separate proceedings, viz:

(a) a Federal Court proceeding (listed for hearing before me commencing 7 August 2025 on an estimate of seven days) brought against it by OneSteel and its administrators, in which the Company has claimed (by cross-claim) that OneSteel and its administrators are wrongfully in possession of substantial assets of the Company (Federal Court Proceeding); and

(b) a winding up proceeding (listed for hearing before a judicial registrar on 29 July 2025) brought by one of the Company’s creditors, Qube Bulk Pty Ltd (Qube Bulk), against the Company (Winding Up Proceeding).

The deed of cross guarantee

14 The Company, OneSteel and LPMA (among other entities in a corporate group called the Gupta Family Group Alliance (GFG Alliance)) are parties to a deed of cross guarantee (DOCG).  The DOCG is a standard form of deed prescribed by the Australian Securities and Investments Commission (ASIC) which applies when a group of companies wishes to be treated as a single entity for financial reporting purposes.  It effectively provides that, upon the winding up of a company within the group, each of the other companies in the group will guarantee the debts of the wound up company.

15 The Schedule to the DOCG identifies the relevant parties to the deed, as follows:

PART 1 — GROUP ENTITIES

(1) Holding Entity:

Liberty Primary Metals Australia Pty Ltd     ACN 631 112 573

(2)     Group Entities (other than the Holding Entity) which are as at the date of execution of the Deed eligible for the benefit of the ASIC Instrument:

OneSteel Manufacturing Pty Limited         ACN 004 651 325

Whyalla Ports Pty Ltd                 ACN 153 225 364

Tahmoor Coal Pty Ltd                 ACN 076 663 968

Bargo Collieries Pty Ltd             ACN 000 970 276

…

PART 2 — TRUSTEE

Trustee:

Liberty Primary Metals Australia Pty Ltd     ACN 631 112 573

PART 3 — ALTERNATIVE TRUSTEE

Alternative trustee:

OneSteel Manufacturing Pty Limited         ACN 004 651 325

16 The relevant terms of the DOCG are as follows:

1 Interpretation

…

“Creditor” means a person (whether now ascertained or ascertainable or not) who is not a Group Entity and to whom now or at any future time a Debt (whether now existing or not) is or may at any future time be or become payable;

…

“Group Entity” means (until this Deed of Cross Guarantee ceases to apply to that entity by virtue of a disposal under clause 4.2 or until that entity is released from this Deed of Cross Guarantee by a Revocation Deed under clause 4.5):

(a)     any one of the entities listed in Part 1 of the Schedule; and

(b)     any entity joined to this Deed of Cross Guarantee by the execution of an Assumption Deed;

…

3 Cross guarantee

3.1     Subject to clause 3.4, each Group Entity covenants with the Trustee for the benefit of each Creditor that the Group Entity guarantees to each Creditor payment in full of any Debt in accordance with this Deed of Cross Guarantee.

3.2     Each Group Entity agrees with the Trustee that this Deed of Cross Guarantee becomes enforceable in respect of the Debt of a Group Entity (“the Group Entity”):

(a)     upon the winding up of the Group Entity under subsection 459A or paragraphs 461(1)(a) or (h) of the Act or as a creditors’ voluntary winding up under Division 3 of Part 5.5 of the Act; or

(b)     in any other case—if six months after a resolution or order for the winding up of the Group Entity any Debt of a Creditor of the Group Entity has not been paid in full.

3.3     Subject to clause 3.4, the Trustee and each Group Entity acknowledge that the Trustee holds the benefit of the covenants and commitments of each Group Entity made pursuant to this Deed upon trust for each Creditor.

3.4     If an Alternative Trustee is named in Part 3 of the Schedule, then:

(a)     the Trustee covenants with the Alternative Trustee as trustee for the benefit of each Creditor that the Trustee guarantees to each Creditor payment in full of any Debt in accordance with this Deed of Cross Guarantee; and

(b)     for the purposes of this covenant the provisions of this Deed of Cross Guarantee will apply to the Trustee as if it was a Group Entity and was not the Trustee and to the Alternative Trustee as if it was the Trustee.

The administration of the Company

17 The Administrators were appointed to the Company on 6 June 2025.  The first meeting of creditors was held on 11 June 2025.  On 30 June 2025, the Administrators decided to bring this extension application, and a notice of that decision was issued by circular to creditors on the same day.  On 2 July 2025, the Administrators lodged this application with the court (with the convening period set to expire on 7 July 2025).

18 The Administrators have identified, based on available records, that the Company has:

(a) total assets valued at $280.3 million;

(b) total liabilities valued at $84.7 million;

(c) potential creditor claims of at least $161 million (including potential claims by Golding, a secured creditor, in the order of $131.2 million); and

(d) six related party debtors (including OneSteel, whose debt is estimated to be worth $101.7 million).

19 Separately, as I have said, the Company is now said to owe $1.3 billion to OneSteel pursuant to the Proof of Debt.

20 The Administrators have also commenced the following (ongoing) work since their appointment:

(a) accessing and reviewing the Company’s books and records;

(b) investigating the Company’s position (and, in particular, the consequences of a liquidation) under the DOCG;

(c) participating in ongoing discussions with the restructuring advisor acting on behalf of the GFG Alliance concerning a deed of company arrangement (DOCA) proposal;

(d) negotiating with the South Australian government to determine if, in light of the Company’s close working relationship with OneSteel, the Company’s creditors may be eligible for grants under the South Australian Business Creditor Assistance Scheme (Creditor Assistance Scheme); and

(e) dealing with the Winding Up Proceeding.

Relevant law

21 Part 5.3A of the Act concerns the administration of a company’s affairs with a view to executing a DOCA.  Section 435A of the Act provides that the object of this Part is:

… to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a)     maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b)     if it is not possible for the company or its business to continue in existence—results in a better return for the company’s creditors and members than would result from an immediate winding up of the company.

22 Section 439A concerns the second meeting of a company’s creditors.  Section 439A(2) provides that the meeting must be held within 5 business days before, or within 5 business days after, the end of the “convening period”, which is defined in s 439A(5) as:

(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;

(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.

23 The court is empowered to extend the convening period under s 439A(6) of the Act. In exercising that power, the court is to have regard to the objects set out in s 435A.  See Re WBHO Australia Pty Ltd (Administrators Appointed) (No 2) [2022] FCA 234 at [16] (Beach J).

24 Section 439A(7) of the Act provides that “the Court may only extend the convening period if the Court is satisfied that it would be in the best interests of the creditors if the convening period were extended in accordance with the application”.

25 The court must ultimately “strike an appropriate balance between, on the one hand, the expectation that administration will be a relatively speedy and summary matter and, on the other, the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders”.  See Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10] (Barrett J); Re MG Gold Pty Ltd (Administrators Appointed) [2023] FCA 282 at [2] (Jackman J).

26 In Mighty River International Ltd v Hughes (2018) 265 CLR 480, Nettle and Gordon JJ (in dissent, but not on the issue under consideration here) considered a number of authorities, including Re Diamond Press, and stated as follows (at 511–512 [73]):

… Consistent with the legislative intention of Pt 5.3A that the administration of a company be brought to an end within a short period of time, there is a presumptive expectation that extensions will be brief. But over time the courts have come to recognise that significant extra time may be required, and should be allowed, in complex cases. Generally speaking, courts have been disposed to grant substantial extensions in cases where the administration has been complicated by, for example, the size and scope of the business, substantial offshore activities, large numbers of employees with complex entitlements, complex corporate structures and intercompany loans, and complex recovery proceedings, and, more generally, where the additional time is likely to enhance the return to unsecured creditors. …

(Citations omitted.)

27 With respect to the ancillary orders sought, s 447A(1) of the Act provides that “[t]he Court may make such order as it thinks appropriate about how this Part is to operate in relation to a particular company”.  This includes empowering the court to make what is known as a “Daisytek” order, which gives the Administrators the ability to hold the second meeting of creditors at any time during, or within 5 business days after the end of, the convening period as extended by the orders of the court pursuant to s 439A(6) of the Act.  Such orders are “sensible and now almost routine”.  See Re LED Builders Pty Ltd (Administrators Appointed) [2008] NSWSC 633 at [2] (Austin J).

Consideration

Preliminary issue: Notice of the extension application

28 The Administrators were appointed on 6 June 2025.  On 30 June 2025, they resolved to bring the extension application, and they notified the Company’s creditors on the same date.  They lodged the application with the court on 2 July 2025.  It was heard two days later (three days before the expiry of the convening period).

29 In my view, the Administrators did not delay in bringing the extension application and provided sufficient notice of the application to the relevant parties.

30 First, as Mr Hynes submitted, despite the submission by OneSteel and its administrators to the contrary, the Administrators had no obligation to provide notice to ASIC. See r 2.8 of the Federal Court (Corporations) Rules 2000 (Cth).

31 Secondly, the Proof of Debt (which formed one basis of OneSteel’s claim to be a creditor of the Company) was only brought to Mr Hynes’ attention, and to the attention of the solicitors for the Administrators, less than one hour before the hearing.

32 Thirdly, the DOCG (which formed the other basis of OneSteel’s claim to be a creditor of the Company) is triggered upon the winding up of a company within the GFG Alliance (see cl 3.2) and operates to make external (i.e. non-GFG Alliance group) creditors of that company become creditors of the other GFG Alliance group entities (see cl 3.1).  Therefore, as Mr Hibbard submitted, the DOCG would not operate to make OneSteel a creditor of the Company in the event of the Company’s liquidation.  It follows that OneSteel is not a “contingent” creditor of the Company under s 553(1) of the Act, and was therefore not entitled to prior notice of the application as a creditor.

33 Fourthly, Mr Zwier ultimately conceded that his real complaint was “one concerning the time which we had to deal with the application as opposed to delay, per se, in relation to the making of the application”.

The best interests of the Company’s creditors

34 The central question for determination is whether it would be in the best interests of the Company’s creditors to extend the convening period by three months (see s 439A(7) of the Act).

35 In the present case, the determination of that question requires a consideration of various subsidiary issues, viz, whether granting the extension sought would:

(a) allow the Administrators to provide better information and recommendations to the Company’s creditors with respect to:

(i) the Company’s affairs and financial position;

(ii) the effect of DOCG; and/or

(iii) the assets the subject of the Federal Court Proceeding;

(b) enable the Administrators to secure better returns for the Company’s creditors by:

(i) avoiding liquidation (and thereby preventing a decrease in the value of the Company’s assets which might result from the liquidation process);

(ii) allowing the Administrators to receive and consider the proposed DOCA from LPMA; and/or

(iii) enabling the Administrators to determine entitlements for the Company’s creditors under the Creditor Assistance Scheme; and

(c) otherwise be inappropriate because:

(i) voluntary administrations ought to proceed in a speedy manner; and/or

(ii) the Winding Up Proceeding is on foot.

Providing better information and recommendations to the Company’s creditors

36 Mr Hynes submitted that a three-month extension would give the Administrators additional time to carry out their functions properly and would put them in the “best position possible” to provide to the creditors “comprehensive” and “properly informed” recommendations at the second meeting in respect of:

(a) the Company’s affairs and financial position;

(b) the effect of the DOCG on creditor entitlements if the Company were to be placed into liquidation; and

(c) the Company’s asset/liability position as a result of the outcome of the Federal Court Proceeding.

The Company’s affairs and financial position

37 Mr Hynes submitted that the Administrators have not yet been furnished with the books and records necessary to understand the Company’s affairs, because the state of the Company’s financial records (which are not segregated from the records of other GFG Alliance group entities) and the apparent inaccuracy of its ledger (which is maintained by software) have resulted in access delays.  It was said that such delays have also prevented the Administrators from investigating related party transactions.

38 As I have already mentioned, the Administrators estimated that the Company has potential creditor claims of at least $161 million.  The Proof of Debt that was produced at the hearing is for many times that amount.  That consideration alone means that an extension of time is necessary to allow the Administrators to determine accurately the Company’s financial position.  As Mr Hynes submitted:

… nothing has been raised which justifies a refusal of the relief that I seek. What has been raised lends support to it. … [T]ake, for example, Mr Zwier’s submissions concerning the proof of debt that he has, just a moment ago, provided to my clients, which discloses a debt of – apparently in excess of 1 billion. Mr Zwier’s submissions in relation to that matter, and the existence of that proof, [makes] me wonder why I did not ask for an extra month, your Honour, to investigate that complex matter. …

The effect of the DOCG in the event of liquidation

39 Mr Hynes submitted that additional time was also required to obtain advice and consider the effect of the DOCG (and, in particular, the effect that a liquidation of the Company would have on creditor entitlements under the DOCG).  In this regard, he relied on the affidavit of Mr Prasad at [71], which stated that:

[t]he Administrators are yet to determine where the competing interests as between the DOCG Entities and major creditors such as Golding intersect and, more importantly, how the interests of the Company’s creditors may be prejudiced or compromised via a liquidation at this stage and the subsequent loss or crystallisation of interests under the DOCG.

40 Mr Zwier submitted that if the Company were wound up (which would be more likely to occur in the absence of an extension), the DOCG would operate to make OneSteel a creditor of the Company. In my view, that conclusion does not follow (for the reasons I have already outlined at paragraph 32).  And even if it did follow, that is not a reason to deprive the Administrators of more time to determine “how the interests of the Company’s creditors may be prejudiced or compromised via a liquidation at this stage and the subsequent loss or crystallisation of interests under the DOCG”.

The disputed assets in the Federal Court Proceeding

41 Mr Hynes submitted that the extension would also allow for the Federal Court Proceeding to be determined, which would enable the Administrators to make a quantitative assessment of the Company’s available assets.  He added that:

[the Administrators] will, in part, determine whether or not Mr Zwier’s clients are wrongfully in possession of assets claimed to be owned by Whyalla Ports and whether they’ve been wrongfully converted. This may have – obviously, given the value of these assets, which is not known, at least to me, that may have a substantial impact on the balance sheet at Whyalla Ports, which, of course is a factor which my clients reasonably consider will be relevant to any recommendation that they give.

42 Mr Pham made a similar submission on behalf of Golding, as follows:

The question is whether [the Company] or OneSteel is the owner of various assets at the port. That question is the subject of the other proceeding before your Honour … The answer to that question is obviously significant to Golding, as the secured creditor, as well as to the overall administration of [the Company], and given that[,] Golding supports the submission made by the administrators, that an extension should be granted so that the position as to the ownership of the port assets may be known in advance of the second meeting.

43 During his oral submissions, Mr Zwier submitted that the dispute in the Federal Court Proceeding had become somewhat confined, concerning only “22 items of plant and equipment”.  He also submitted that Golding might end up being the “wrong party” to bring the Federal Court Proceeding if the Company were to be placed into liquidation before the hearing on 7 August 2025, because such liquidation could result in a liquidator setting aside Golding’s security interest in the Company’s assets.

44 But the Company is not in liquidation, so Golding is entitled to press its claim.

The complexity of the external administration

45 Mr Hynes also submitted that:

the submissions made by Mr Zwier … throw a bright spotlight on the complexity of this external administration, which adds all the more reason for your Honour to grant the relief that my clients seek.

46 I agree. In order to act in the best interests of creditors, administrators must be given sufficient time to investigate the affairs of an insolvent company and provide sensible information and advice to its creditors.

47 In Re North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635 at [20], Markovic J found that a relevant factor when considering an extension application is:

whether an extension is necessary to enable the administrators to prepare and provide the report and statements, and to arrive at the opinion required by s 439A(4), in order to inform creditors adequately so that they, in turn, will be in a position to decide whether to terminate the administration, execute a DOCA or place the company in liquidation.

(Citations omitted.)

48 More recently, in Re Sara Lee Holdings Pty Ltd (Administrators Appointed) [2023] FCA 1408 at [18], Halley J referred to the expectation that creditors be provided with information at a second meeting that “allows them to exercise their decision in as an informed manner as possible”.

49 The extension sought is clearly directed at ensuring that the Administrators can provide sufficient information to the creditors so as to enable the creditors to make an informed decision at the second meeting.  The utility of such an extension is particularly clear in a case such as the present, where Administrators must still complete a significant amount of complex work before they can make informed recommendations as to the options available to the creditors of the Company.

Securing better returns for the Company’s creditors

50 Mr Hynes submitted, consistently with s 435A of the Act, that a three-month extension may result in better returns for the Company’s creditors, because the additional time would:

(a) avoid liquidation (and thereby prevent a decrease in the value of the Company’s assets resulting from an immediate liquidation);

(b) facilitate the consideration and execution of a DOCA proposed by LPMA; and/or

(c) enable the Administrators to negotiate with the South Australian government with a view to granting entitlements to the Company’s creditors under the Creditor Assistance Scheme.

Avoiding liquidation

51 Mr Hynes submitted that granting a three-month extension to the convening period “may result in a better return for creditors, and that is, of course, one of [Part 5.3A’s] objects”. He also contended that an extension would protect the Company and its creditors against the premature enforcement or termination of contractual rights that might otherwise be triggered in a liquidation scenario (see s 440F of the Act).

52 OneSteel and its administrators submitted that an extension would be inconsistent with the purposes of Part 5.3A of the Act because the Company’s creditors would collectively benefit more from its liquidation.  It was contended that if the Company were wound up, that meant that a liquidator could set aside any security granted by the Company in the period up to 6 months before the commencement of winding up proceeding against the Company, and that as the Company granted the $131 million security interest to Golding on 6 December 2024, and Qube Bulk commenced the Winding Up Proceeding on 5 June 2025, a liquidation of the Company in the Winding Up Proceeding would mean that a liquidator could then set aside Golding’s security interest.  It would then follow that the Company’s secured property would be made available to all of its ordinary unsecured creditors rateably (rather than only to Golding).

53 As Mr Zwier put it:

[T]he administrators of Whyalla Ports need to have regard to what is best for the creditors of Whyalla Ports. What’s best for the creditors of Whyalla Ports as a whole would be if there was no security there because then, whatever claims there are in this litigation are going to pass for the benefit of all the creditors, not just one. …

54 Mr Pham submitted to the contrary, as follows:

… Golding rejects, completely, the assertion that its security is capable, or may be capable, of being set aside. In any event, the issue is not an issue that may be properly raised by OneSteel, or its administrators, in the context of the present application.

The issue, if it arises at all, is a matter for the liquidator in any future liquidation of Whyalla Ports. I think Mr Zwier accepted that any application to set aside the security could only be brought by a liquidator. The issue, which I’ve said Golding does not accept to be a real issue, is not a reason to refuse the relatively modest extension sought by Whyalla Ports. Indeed, if anything, it’s a reason in favour of the extension, because it may be something that the administrators may need to consider in preparing their report to the creditors, and in formulating a recommendation as to the future of Whyalla Ports.

55 When I asked Mr Zwier whether his submission was inconsistent with one of the primary purposes of the voluntary administration provisions in the Act — namely, to secure a better result for creditors by avoiding liquidation — he responded as follows:

No. It depends on the circumstances, your Honour. So in a case where all of the assets of the entity are secured on what I described earlier as a green charge [i.e. a charge that is created within the six months of a commencement of a winding up and which is therefore capable of being impugned by liquidator], then self-evidently, the best result is going to be from a liquidation. If there are preference claims, a liquidation might produce better outcomes. If there are uncommercial transactions, it can be set aside in a liquidation. It may well be the far better result is liquidation.

56 He also submitted that the potential for a liquidation to secure better returns for creditors is more pronounced in circumstances where the company in administration has no ongoing business operations or prospects.  Accordingly, he contended that the court should be reluctant to extend the statutorily prescribed convening period where the company in administration is dormant.  Quoting from the reasons of Nettle and Gordon JJ in Mighty River at 512 [73], he contended that:

this is not a case where factors such as “the size and scope of the business, substantial offshore activities, large numbers of employees with complex entitlements, complex corporate structures and intercompany loans, and complex recovery proceedings” justify an extension of the convening period. Extensions ought not be granted to dormant companies or companies like Whyalla Ports that no longer carry on business, or have absolutely no prospect of carrying on business.

57 During oral submissions, Mr Zwier added that:

… there are no employees of Whyalla Ports who have ever operated at the port – none. Your Honour will appreciate from the other case it has always been landlocked. The only people who have access to that land have always been OneSteel. There’s no egress or ingress to where the port is granted to any other person, and there has never been an argument that there has been. …

58 Mr Hynes conceded that, as a result of OneSteel’s termination of the Lease (and the South Australian parliament’s enactment of legislation rendering the Lease void ab initio), the Company was no longer engaged in trade.  However, he submitted that this circumstance had no bearing on the Company’s extension application, because the extension could still advance creditors’ interests by potentially securing a better return for them than an immediate liquidation otherwise would.

59 I accept Mr Hynes’ submission.  The object of Part 5.3A of the Act is to provide for an insolvent company to be administered in a way that “maximises the chances of the company, or as much as possible of its business, continuing in existence” or, where that is not possible, “results in a better return for the company’s creditors and members than would result from an immediate winding up of the company” (see s 435A of the Act).  The fact that the Company is dormant (and may have little to no hope of having its business resurrected) does not mean that an extension would serve no purpose.

60 The proposition that the continuation of a business is not a necessary condition for the grant of an extension also finds support in the case law.  In Re Riviera Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) [2009] NSWSC 585 at [13], Austin J set out a number of reasons that courts have previously given for granting an extension, including “lack of access to corporate financial records”, “the time needed for thorough assessment of a proposal for a deed of company arrangement”, “complex corporate group structure and intercompany loans”, “complex prospects of recovery proceedings” and “more generally, that additional time is likely to enhance the return for unsecured creditors”.  All of these reasons are relevant in the present case, and the final three reasons were also explicitly mentioned by Nettle and Gordon JJ in Mighty River (at 512 [73]).

61 It is therefore inaccurate to say, as Mr Zwier did in the course of his submissions, that “[t]he object is to preserve ongoing businesses, maximise the chance of the business remaining in existence”.  The object of Part 5.3A is not solely to preserve ongoing business operations.  Section 435A of the Act is clearly also directed towards obtaining better returns for creditors than would otherwise result from an immediate liquidation.

The DOCA proposal

62 Mr Hynes submitted that further time was required to receive and consider the proposed DOCA from LPMA.  He contended that:

… it’s not a case that this is some illusory or wholly speculative prospect. I don’t have a DOCA yet, but your Honour will see from Mr Prasad’s affidavit that they’re in negotiations surrounding this.

…

[Y]our Honour had a look at those paragraphs of the evidence that speaks of the DOCA proposal. And you will see Prasad has sworn that these – to the negotiations surrounding that. They’re ongoing. But as recently as Wednesday last, it has been said that the proposed DOCA will be provided imminently. …

63 In his affidavit, Mr Prasad relevantly deposed to the following in respect of the DOCA proposal:

72     I shortly expect to receive a substantive DOCA proposal from Damien Hodgkinson and Adam Simpson of Olvera Advisors on behalf of the GFG Alliance. A copy of an email from Mr. Hodgkinson stating that a DOCA proposal will be ready shortly is at Exhibit RP1 at pages 534 to 535.

73     The Administrators had expected to receive a substantive DOCA proposal well prior to the time to convene the second meeting of creditors. It is likely that such a proposal has not yet been submitted because Olvera Advisors require time to consider the complex and intertwined nature of the Company’s business and dealings as it relates to OSM, Golding, and other related and third-party entities. Throughout the course of the administration to date, the Administrators have been in communication with Olvera Advisors in respect of their work on a DOCA proposal, including as late as 2 July 2025.

74     The Administrators have been informed by Mr. Hodgkinson (and lawyers acting on behalf of the GFG Alliance) that as part of the prospective DOCA proposal, Golding may compromise or waive some or all of the Golding Interests, such that it benefits ordinary unsecured creditors of the Company.

75    It is in the interests of all the Company’s creditors for the GFG Alliance and Golding (together with any other interested parties) to be given a proper opportunity to assess their positions and present the best possible DOCA proposal. The Administrators reasonably anticipate that those parties will conclude their dealings in the short term such that a DOCA proposal will be presented. The Administrators do not consider that any creditors are prejudiced by permitting those dealings to conclude with the benefit of an extension to the Convening Period.

(Emphasis added.)

64 Mr Zwier submitted that LPMA’s intention to provide a DOCA — which he described as “theoretical[,] non-particularised[,] vague and uncertain” — was not good enough, as follows:

[The DOCA proposal has] no particularity, no description, no detail, no amount, no reference, no explanation, no summary, no broad parameters, no principles, nothing, zero. One would expect that if there’s a legitimate opportunity to work something through, someone would have said, “These are the parameters. This is what it looks like, your Honour. This is how we’re going to give the creditors a better return than the return from the liquidation.” And the reason why the options are there is sometimes, it is better to put companies in liquidation, particularly if they don’t have operating businesses with employees and third parties and stakeholders and large unsecured creditors, and this may well be one of them, your Honour …

65 He also submitted that if a DOCA were to be approved, it would have the effect of avoiding a liquidation, which would preclude Golding’s security interest being set aside, to the detriment of the Company’s ordinary unsecured creditors.

66 I do not accept the submission that it would be preferable for the Company to be placed into liquidation simply because doing so might disperse the Company’s property (over which Golding currently holds a security interest) across a greater number of ordinary unsecured creditors.  One of the objects of Part 5.3A of the Act (headed “Administration of a company’s affairs with a view to executing a deed of company arrangement”) is to ensure that an insolvent company is administered in a way that results in a better return for its creditors than would otherwise result from its immediate liquidation (see s 435A of the Act).  This object is based on the understanding that a liquidation will often fail to provide creditors with returns that reflect the full value of the company being liquidated.

67 Mr Hibbard assured me “that it is anticipated by my client that the [DOCA] proposal will provide a better return to creditors than a liquidation. Now, I can’t substantiate that more than saying it before your Honour, but it’s certainly the anticipated position of my client”.

68 Mr Pham told me that he was:

instructed that Golding and GFG [Alliance] are actively engaging in discussions about the proposal and what support, if any, may be provided by Golding with respect to the proposal. Those discussions are ongoing and, in my submission, should be permitted to continue in the interests of all creditors, including Golding.

69 It is true that there is little offered by way of meat on the bones, but given the fact that the Administrators were only appointed on 6 June 2025, that is hardly surprising.

70 In light of the statutory object in s 435A, I am thus satisfied that it is appropriate to grant the Administrators more time to receive and evaluate any such DOCA proposal that may well provide a preferable outcome for the Company’s creditors than a liquidation otherwise would.

The Creditor Assistance Scheme

71 The Creditor Assistance Scheme was established after OneSteel entered administration in order to provide grants to South Australian and Whyalla-based businesses owed money by “designated OneSteel entities”.

72 Mr Hynes submitted that further time was required to complete negotiations with the South Australian government in respect of entitlements under this scheme, as follows:

[The Company] consider[s] that it may be beneficial for creditors – for this status quo to remain while this determination of entitlements under the scheme is being looked at, but they haven’t got this concluded view – [it] is one of three or four issues that they don’t have a concluded view on whether a wind-up liquidation could impact creditors adversely in relation to that scheme.

73 Mr Zwier contended that the Creditor Assistance Scheme was a OneSteel entity scheme that had nothing to do with the Company.  He referred to page 509 of the exhibit to Mr Prasad’s affidavit (which was an extract from a webpage headed “Support for SA businesses owed money by designated OneSteel entities”) in support of this proposition.  That document stated that the Creditor Assistance Scheme “supports SA and Whyalla-based creditors directly impacted by OneSteel Manufacturing Pty Limited (Administrators Appointed) (“OneSteel”) being placed into administration on 19 February 2025”.

74 The exchange below then followed:

HIS HONOUR: … If you’re relying on the largesse of government and it’s a scheme where the criteria for eligibility are … not particularly clear, well, you would imagine that it’s not a far-fetched argument to say, “Well, we need some time to be able to progress negotiations …”

MR ZWIER: … It’s not as if the benefits under that scheme are going to fall away because the company has gone into liquidation. Whether it’s in liquidation, solvent, insolvent, in administration, under receivership, it doesn’t alter anything, your Honour. Therefore, it’s not a proper ground to say that because of those negotiations, they ought to be given a three-month extension of time.

75 Even if the scheme would still be available to a company in liquidation, the Administrators should, in my view, be given an opportunity to make appropriate inquiries into the eligibility of the Company’s creditors under it.

The alleged inappropriateness of the extension

76 Mr Zwier submitted that an extension would be inappropriate in the present circumstances because:

(a) voluntary administrations ought to be conducted in a speedy manner; and

(b) any such extension would “abrogate” the Winding Up Proceeding.

The need for speed in voluntary administration

77 He submitted that voluntary administration is designed to be a short process, and the power to extend the convening period for the second meeting of creditors should not be exercised as of course.  He continued, as follows:

[T]he object of voluntary administration is the fast and speedy resolution of a restructure of a company. It is not intended to be a slow and cumbersome process. It was designed by those who designed it, the Harmer Committee, to be fast in pace, and there are many observations made by many courts about that desire, and this is a balancing exercise that your Honour has been asked to consider.

78 In the alternative, Mr Zwier also contended that any extension granted “should be short, it should be sharp, it should be precise, to avoid the kind of delays and fudginess that occurs when you give administrators too much time, in the circumstances of a company with no ongoing operations”.

79 Mr Hynes contended that there would be little to no prejudice to creditors resulting from the proposed extension, because “three months, in the grand scheme of things, is not lengthy” and is “a modest extension”.

80 While it is correct to highlight the need for voluntary administrations to proceed expeditiously, that imperative should not be prioritised at the expense of maximising creditors’ returns.  See Re WBHO at [16].  As McKerracher J said in Re The Griffin Coal Mining Company Pty Ltd (Administrators Appointed) [2010] FCA 30 at [16], “[i]n order for the administrators to carry out their function properly, it is necessary that they should have should have sufficient time to investigate the affairs of the companies under administration and to provide sensible information and advice to creditors…”.

81 And as Mr Hynes pointed out at the hearing, Mr Prasad has deposed to the fact that if he is in a position to convene a meeting any earlier than 7 October 2025, he will do so.

82 I am therefore satisfied that granting a three-month extension in the present case strikes an appropriate balance between ensuring that the Company’s administration proceeds in a speedy manner and providing the Administrators with sufficient opportunity to make informed recommendations to, and obtain better returns for, the Company’s creditors.  See Re Diamond Press at [10] (Barrett J); Re MG Gold at [2] (Jackman J).

The Winding Up Proceeding

83 As to Mr Zwier’s submission that the appointment of the Administrators was done to abrogate the Winding Up Proceeding, I agree with Mr Hynes’ submission that this proceeding was the “wrong forum” to raise any such complaint, including because:

the extension of the convening period of a company under administration under [P]art 5.3A has absolutely no bearing on the winding up application. The company can still be wound up on 29 July. And, of course, an argument can be made there by Qube Bulk that the company ought be wound up. …

Disposition

84 For the reasons I have discussed above, it was appropriate that the application to extend the convening period for the second meeting of creditors in respect of the Company be granted, and I made orders accordingly.

Associate:

Dated:    16 July 2025