Federal Court of Australia

Knight, in the matter of ANZ Hospitals Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (No 2) [2026] FCA 589

ORDERS

THE COURT ORDERS THAT:

Extension of convening period

1.    Pursuant to s 447A(1) of the Corporations Act 2001 (Cth) (the Act), the period within which the first plaintiffs must convene the second meetings of creditors of the second and third plaintiffs under s 439A of the Act be further extended to 1 June 2027.

2.    Pursuant to s 447A(1) of the Act and s 90-15 of the Insolvency Practice Schedule (Corporations) 2016, being Schedule 2 to the Act, Part 5.3A of the Act is to operate in relation to the second and third plaintiffs such that, notwithstanding s 439A(2) of the Act, the second meetings may be convened at any time before, or within five business days after, the end of the convening period as extended by order 1 above (provided that the first plaintiffs give notice of the meetings to eligible creditors of the second and third plaintiffs (including the persons claiming to be creditors of the second and third plaintiffs) at least five business days before the meetings).

Other matters

3.    The first plaintiffs have liberty to apply for any further extension of the convening period as extended by paragraph 1 above at any time before that period expires.

4.    Liberty be granted to any person who can demonstrate sufficient interest to discharge or modify these orders on the giving of three business days’ written notice to the plaintiffs and the Court.

5.    The costs of the application be paid as costs of the administrations.

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

REASONS FOR JUDGMENT

JACKMAN J:

Introduction

1    Craig Shepard, Mark Korda, Lara Wiggins and Andrew Knight of KordaMentha are the Voluntary Administrators of the second and third plaintiffs, ANZ and NewCo (together, the Companies).

2    The Companies are also subject to the appointment of Keith Crawford, Jason Ireland, Kathy Sozou and Matthew Caddy of McGrathNicol as Receivers and Managers, appointed by a group of Syndicated Facility Lenders.

3    Under section 439A(5) of the Corporations Act 2001 (Cth) (the Act), the Administrators were required to convene the Second Creditors’ Meetings of the Companies within 5 days of 24 June 2025.

4    On 19 June 2025, orders were made extending the period during which the Administrators must convene the Second Creditors’ Meetings to 1 June 2026 and reserving liberty to apply for any further extension to the convening period.

5    The Administrators now seek:

(a)    an order pursuant to section 447A(1) of the Act for the convening period for the Second Creditors’ Meeting to be further extended until 1 June 2027 (Second Extension Order);

(b)    an order pursuant to section 447A(1) of the Act and section 90-15 of the Insolvency Practice Schedule (Corporations) 2016, being Sch 2 to the Act, that Pt 5.3A of the Act is to operate in relation to the Companies as if it permitted the Second Creditors’ Meetings to occur at any time before, or within 5 business days after, 1 June 2027 (provided the Administrators provide 5 days’ prior notice) (Daisytek Order), so named after Re Daisytek Australia Pty Ltd (administrators appointed) [2003] FCA 575; (2003) 45 ACSR 446 at [10]–[18] (Lindgren J); and

(c)    an order that liberty be granted to any person who can demonstrate sufficient interest to discharge or modify these orders on the giving of 3 business days’ written notice to the plaintiffs and the Court.

6    In view of the very lengthy period sought by way of extension, and the public importance of the matter generally, it is worth recording my reasons for granting the application.

7    Justice Barrett stated in Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10] that the function of the Court on an application for such an order is:

to 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 hand, 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.

8    In Mighty River International Ltd v Hughes [2018] HCA 38; (2018) 265 CLR 480 at [73], Nettle and Gordon JJ (in dissent, but not relevantly in this respect), considered a number of authorities and concluded:

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. Provided the evidentiary case for extension has been properly prepared, there has been no evidence of material prejudice to those affected by the moratorium imposed by the administration, and the administrator's estimate of time has had a reasonable basis, the courts have tended to grant extensions for the periods sought by administrators.

9    In this application, there is no opposition to the grant of relief. The Companies’ creditors were put on adequate notice of the application and the length of extension, and no creditor has appeared to oppose the relief. The creditors are sophisticated commercial parties and, in the case of the Lenders, are assisted by the expertise of the Receivers and Managers.

10    Further, there is clear and cogent evidence that the further extension will enhance the prospect of successful sales of the assets of the Healthscope Group and of the expected timeframes in which this will occur.

11    The plaintiffs submit, and I accept, that the Court should further extend the convening period for the following reasons.

12    First, there has been substantial progress in the administrations. An orderly sale process is being conducted by the Receivers and Managers and is well advanced, but the way this process has unfolded means that it cannot be completed by June 2026. In particular:

(a)    the Administrators initially sought a 12-month extension based on an estimated timeline for the preferred strategy of the sale of the Healthscope Group as a whole;

(b)    however, the Administrators also indicated that offers received at that time contemplated purchases of specific assets of the Healthscope Group and that, if a piecemeal sale strategy were pursued, this would create further complexity and require additional time.

13    That contingency has materialised as the initial sale campaign did not attract suitable offers for the entire Healthscope Group as a whole and, accordingly, the Receivers and Managers are now pursuing an alternative sale strategy. The Second Extension Order will allow this process to run its course.

14    Second, the length of the extension is appropriate, having regard to the size and complexity of the business of the Healthscope Group and the steps required to implement the planned transactions.

15    The Healthscope Group is the second largest private hospital group in Australia. Its corporate structure and operations are inherently complex. Its hospitals are operated through various contractual and regulatory arrangements, including leases and public-private partnerships.

16    The sale strategy on foot involves multiple transactions being conducted in parallel, each subject to complex implementation steps and external contingencies:

(a)    Business and Asset Sale Agreements (BASAs) are in place for four hospitals within the Healthscope Group. Subject to satisfaction of conditions precedent, these BASAs are scheduled to complete in the second half of 2026, and entities within the Healthscope Group are expected to enter into transitional services agreements with buyers for further periods of 3 to 12 months.

(b)    The handover of the Northern Beaches Hospital (NBH) occurred in April 2026.

(c)    The Healthscope Group is pursuing discussions with Adelaide Community Healthcare Alliance Inc (ACHA) for the transition of three hospitals in South Australia to an “owner-operator” model. Those discussions are ongoing and the Receivers and Managers expect the implementation of resulting arrangements to occur over at least 6 months.

(d)    The balance of the Healthscope Group’s leasehold interests enabling it to operate hospitals are currently proposed to be sold to a new not-for-profit structure through the “PurposeCo” transaction. This process will be implemented in stages and, while the Receivers and Managers expect to establish initial operations around mid-2026, substantial further work will be required for the new structure to be fully operational.

(e)    The length of the extension which is sought accounts for the fact that the Receivers and Managers, at this juncture, are unable to predict with precision the time required to complete this process. The Receivers and Managers must also carefully balance the speed and execution of the PurposeCo transaction with the successful completion of the existing BASAs and finalisation of the handover of NBH.

17    The Administrators have sought a further extension of up to 12 months having regard to the presently anticipated sale schedule, the potential for further slippage, and the need to formalise and, as much as possible, complete any agreements, having regard to potential contingencies such as funding and regulatory approvals.

18    The Daisytek Order will allow the Administrators to convene the Second Creditors’ Meetings prior to 1 June 2027. This flexibility means there is no prejudice to creditors by the further extension, and the Administrators will seek to call the Second Creditors’ Meetings before the end of the extended convening period, if it is possible to do so. In this way, the proposed orders strike an appropriate balance between the underlying statutory intent of Pt 5.3A that administrations be relatively swift, and the requirement that undue speed not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors.

19    The Administrators have also proposed as a further safeguard that liberty be granted to any person who can demonstrate sufficient interest to apply to discharge or modify the proposed orders on the giving of 3 business days’ written notice to the plaintiffs and the Court.

20    Third, the Second Extension Order will facilitate a sale which maximises the value of Healthscope Group’s business and assets and preserves existing relationships with employees, creditors and other stakeholders.

21    The PurposeCo transaction, while at a nascent stage, represents an active proposal for the sale of valuable leasehold interests held by the Healthscope Group. It is a proposal which is supported by a majority of the secured creditors of the Companies, and which the Receivers and Managers and the Administrators consider capable of returning value to the Companies. It is therefore appropriate that adequate time be provided for that process to be brought to fruition.

22    Fourth, ANZ has borrowed $1.6 billion from the Lenders pursuant to a Syndicated Facility Agreement with the National Australia Bank (as Agent for the Lenders and security trustee). NewCo and 36 Operating Companies within the Healthscope Group guaranteed the obligations of ANZ as obligors under the Syndicated Facility Agreement, and the Lenders have a first ranking security interest over the assets of the obligors in the Healthscope Group. ANZ and NewCo are also parties to separate Deeds of Cross-Guarantee together with other Healthscope Group entities. It remains the case that, if the Companies enter into liquidation, the Deeds of Cross-Guarantee provide that all other entities within the group, including the Operating Companies, will become liable for all amounts owing by ANZ as borrower under the Syndicated Facility Agreement.

23    The Administrators, each experienced insolvency practitioners, consider it to be in the best interests of all creditors for the sale process to proceed over a further 12-month period (unless completed earlier).

24    Fifth, the Receivers and Managers support the Second Extension Order and consider it to be in the best interests of creditors. That the independent judgments of both the Administrators and the Receivers and Managers are aligned in support of the Second Extension Order is significant. Further, the Receivers and Managers also confirm that at least a majority of the Lenders under the Syndicated Facility Agreement expressly support the Second Extension Order.

25    Sixth, the purpose of the Second Creditors’ Meetings is for creditors to decide the future of the Companies. In aid of that purpose, the Administrators must provide their report to creditors which includes their opinion as to whether each of the options available under section 439C of the Act would be in creditors’ interests. The Administrators consider this can most sensibly be done once the sale process is further advanced and that, if prepared now, the Administrators’ report would be informed by an uncertain picture of the final condition of the Healthscope Group. The Second Extension Order will have the benefit of:

(a)    avoiding the destabilisation of the Healthscope Group at a critical juncture; and

(b)    if appropriate, allowing for a deed of company arrangement to be put to creditors at the Second Creditors’ Meetings.

26    Seventh, successful implementation of the sale process will result in continuity of employment for nearly all of the Healthscope Group’s approximately 17,000 employees and minimise disruption to patients.

27    Eighth, this application and the length of the proposed extension were also notified to Healthscope Group, Brookfield and the Australian Securities and Investments Commission. No opposition has been expressed to the Second Extension Order.

28    Accordingly, I make the orders sought by the Administrators.

Associate:

Dated:    11 May 2026