Federal Court of Australia

Sava Engineering Pty Limited (In Liquidation), in the matter of WMG Holdings Co Pty Ltd v WMG Holdings Co Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2026] FCA 1260

ORDERS

THE COURT ORDERS THAT:

1.    The Defendant, WMG Holdings Co Pty Ltd (ACN 631 286 238) (Receivers and Managers Appointed) (Administrator Appointed), be wound up pursuant to s 459A of the Corporations Act 2001 (Cth).

2.    Glenn Spooner of SSB Advisory be appointed as liquidator of the Defendant.

3.    The voluntary administration of the Defendant be terminated forthwith.

4.    The question of costs be determined by a Registrar on 4 September 2026 (as currently listed at 9:30am on 4 September 2026).

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

REASONS FOR JUDGMENT

Delivered ex tempore, revised from transcript

WHEATLEY J:

1    The Plaintiff in these proceedings, Sava Engineering Pty Ltd (in liquidation) has brought an Interlocutory Application pursuant to s 459A and s 447A of the Corporations Act 2001 (Cth) (the Act), for the Defendant, WMG Holdings Co Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) to be wound up on the basis of insolvency pursuant to s 459A of the Act and that Mr Spooner of SSB Advisory be appointed as liquidator. Further, the Plaintiff seeks that the voluntary administration of WMG be terminated and other consequential orders. Alternative relief was sought in the Interlocutory Application but was not the subject of any substantive submissions made at the hearing today.

2    The matter has been brought on urgently in the duty list in the following circumstances.

3    On 27 May 2026, Sava Engineering filed an Originating Application for winding up WMG on the basis of insolvency. That Originating Application was the commencement of this proceeding (the Winding up Application). The matter was subsequently adjourned and was then to be relisted for hearing on 18 September 2026. In the meantime, on 6 August 2026, Mr Hanna of Romanis Cant was appointed voluntary administrator of WMG (Administrator).

4    The Administrator held the first meeting of creditors on 18 August 2026. On 26 August 2026, the Administrator advised that the second meeting of creditors would occur at 11 am on 3 September 2026, which is tomorrow. Before the circular to creditors was provided advising of the date of the second meeting of creditors, the Winding up Application return date was changed from 18 September to 4 September 2026.

5    It is in these circumstances that Sava Engineering has approached the Court seeking that this matter be urgently heard prior to the second meeting of creditors scheduled for tomorrow, 3 September 2026, and when the Winding up Application was to return to the Court on 4 September 2026.

Relevant Statutory Provisions

6    As the hearing developed before the Court today, it became clear that all parties and supporting creditors agreed that WMG was insolvent. The basis upon which Sava Engineering advanced its Winding up Application was a failure to comply with a statutory demand, which creates a presumption of insolvency under the Act. That presumption was accepted by the Administrator during the course of the hearing. In that respect I adopt and agree with the observations of Santow J in Re Australasian Memory Pty Ltd and Corporations Law (1997) 149 ALR 393; 142 FLR 424 at 410 (affirmed in Australasian Memory Pty Ltd v Brien (1998) 45 NSWLR 111; (1998) 148 FLR 1 and Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270; [2000] HCA 30 (Australasian Memory HCA)):

It is entirely in conformity with the statutory scheme that an administration, suspending as it does creditors’ rights, should not be unduly prolonged. Once the corporate patient proves irretrievably moribund, despite the intensive care of its administrator, acting as corporate doctor, there is no alternative but liquidation. Hence the need then for a swift transition to liquidation requiring flexibility in that process.

7    It would be fair to observe that the Administrator has recognised this principle and, in his report to creditors, has recommended that WMG be wound up.

8    Sava Engineering also brings this application under s 447A of the Act. Section 447A provides that:

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.

(2)    For example, if the Court is satisfied that the administration of a company should end:

(a)    because the company is solvent; or

(b)    because provisions of this Part are being abused; or

(c)    for some other reason;

the Court may order under subsection (1) that the administration is to end.

...

9    There is nothing on the face of s 447A that suggests that it should be read down. Rather, the power given by the general words are wide enough to make orders which will affect, in the future, something that has been done or not done under the provisions of Pt 5.3A; see Australasian Memory HCA at [17] (Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ). Sava Engineering specifically also relies on s 447A(2) for when a court may order the end of an administration. Originally, the material advanced relied on s 447A(2)(b) of the Act.

10    However, as advanced in the Court today, reliance was placed on s 447A(2)(c), being for some other reason. In the context of s 447A(2), it is relevant to note that it commences with the words “for example”. In that context, s 447A(2) does not then act as a qualifier to the broad power that is in s 447A(1) of the Act.

11    Sava Engineering also seeks on its Interlocutory Application for the administration to be terminated.

12    In oral submissions at the hearing, it was noted that s 435C(3)(g) of the Act would operate to bring the administration to an end if the Court was to order that WMG be wound up. Section 435C is within Pt 5.3A which is relevant when considering the power under s 447A(2)(c), being “for some other reason”. In this regard, I also note the observations of Stewart J in Decon Australia Pty Ltd v TFM Epping Land Pty Ltd [2020] FCA 1085 at [18] which I expressly adopt and agree with, where his Honour states as follows:

18    That s 447A empowers a court to terminate an administration is well established, including because the administration was an abuse of process or for the purpose of ordering a compulsory winding-up. For examples, see Aloridge Pty Ltd v Christianos [1994] FCA 123; 13 ACSR 99 at 101-102; Chief Commissioner of State Revenue (NSW) v Rafferty’s Resort Management Pty Ltd (in liq) [2008] NSWSC 452; 217 FLR 230 at [9]-[10] and Blacktown City Council v Macarthur Telecommunications Pty Ltd [2003] NSWSC 883; 47 ACSR 391 at [16]-[17]. See also Mighty River International Ltd v Hughes [2018] HCA 38; 265 CLR 480 at 507 [65].

(emphasis added)

13    Sava Engineering identified an error in the Administrator’s report and also in the Administrator’s affidavit (a topic to which I will return) regarding the calculation of the relation-back date. Quite properly, counsel for the Administrator accepted that there was an error in relation to the calculation of the relation-back date. That is important in the context of this application because of the Administrator’s recommendation to creditors (that WMG be wound-up) and the position taken in his affidavit filed for the purposes of today. It is clear that both Sava Engineering and the Administrator not only agree that WMG is insolvent, perhaps hopelessly so, but also that it should be wound up.

14    Any potential issue as to a difference of the relation-back date because of a winding up pursuant to Sava Engineering’s Winding up Application on the basis of insolvency or the Administrator’s recommendation and the creditors’ acceptance of the recommendation at the second meeting of creditors, is actually not in issue. It was accepted at the hearing that the relation back date would be the same.

15    Given the relation-back date is not in issue, what distils from the arguments and the hearing, then, is that the real issue in dispute is who is to be appointed as the liquidator of WMG.

The Real Issue in Dispute

16    The principle to be adopted in this regard, as was accepted by counsel for the Administrator, is that as expressed by Brereton J In the matter of El Zorro Transport Pty Ltd [2013] NSWSC 1082 at [5]:

5    It is the practice of the Court that, all things being equal, it will appoint the plaintiff’s nominee as liquidator where there is a contest to the appropriate identity of the appropriate appointee, and there is nothing to be said between the competing nominees as to their respective fitness, qualifications or cost [see Barclay v Barclay (Kearney J, Supreme Court of NSW, 22 December 1978, unreported); Parkinson v Morkaya [2008] NSWSC 1183; Glenwood Village Pty Ltd v Glen Alpine Constructions Pty Ltd [2009] NSWSC 516; and Workers Compensation Nominal Insurer v Perfume Empire Pty Ltd [2011] NSWSC 380.]

17    Those observations have been relevantly and recently followed by Derrington J in Australian Securities and Investments Commission v A One Multi Services Pty Ltd (No 3) [2024] FCA 1209 at [10], which I also gratefully agree with and adopt.

18    Further to those observations are that of McGrath J In the matter of BH Holdings Queensland Pty Ltd [2024] NSWSC 132 at [15]-[18]. Relevantly, McGrath J reasoned that, all things being equal, it was the practice of the court to appoint the plaintiff’s nominee as liquidator and that there must be a reason to depart from that approach. There must be something between the competing nominees in relation to their fitness, qualifications or costs. It is for the defendants in those circumstances to establish grounds to depart from the usual course.

19    Therefore, in these circumstances, it was for the Administrator to satisfy the Court that it was appropriate to depart from the usual course of appointing the liquidator nominated by Sava Engineering, being the Plaintiff’s nominee, and instead appoint the Administrator as the liquidator. In essence, Sava Engineering submitted that there were errors or mistakes in the Administrator’s report to creditors such that matters were not equal as between the competing nominees. Further, Sava Engineering submitted that there was a difference in relation to the rates charged by the competing nominees and the rates by the Plaintiff’s nominated liquidator were less and hence preferable. The Administrator submitted that any errors or mistakes relied on should not cause the Court concern as to found a proper discrepancy as between the competing nominees. The Administrator also submitted that his appointment was preferable because of the work undertaken by the Administrator such that if the Plaintiff’s competing nominee was appointed, there would be a duplication of the work that had been undertaken. Such duplication, it was submitted, would not be in the interests of creditors as the costs of the external administration would increase.

20    It is unnecessary to traverse all of the issues which were raised by the parties in argument. However, it is fair to observe that there was real dispute as to the appropriateness of the appointment of each competing nominee.

21    It is sufficient to refer to the following five matters. The first two matters are somewhat related.

22    First, is in relation to the error concerning the relation-back date. The report to creditors (as has now been accepted) referred to the incorrect relation-back date as a period from 6 August 2026 to 7 February 2026 whereas it should have been from 27 May 2026 to 28 November 2025.

23    Second, is the work which has been undertaken and is yet to be undertaken due to the error in the calculation of the relation-back date. The Administrator submitted that there was considerable overlap between the period which was referred to and relied on in the Administrator’s report and which was the subject of the Administrator’s investigations to date and the correct period. Therefore, so the submission was advanced, although additional work would be required, that should not weigh against the Administrator being appointed the liquidator because the work that had been undertaken would effectively have to be redone by the Plaintiff’s nominated liquidator.

24    This potential duplication might be right insofar as it goes. However, the difficulty with the submission is that a particular position by the Administrator in the report to creditors has been advised and advanced (in error). It is not simply stated in a vacuum or as a bland observation by the Administrator in his report. Those dates are relevant to what are described and considered in the report as potentially voidable transactions. That error has the potential to affect the matters upon which the Administrator offered his opinion and his recommendation. Although there might be some duplication by a new person being appointed as the liquidator, the creditors would benefit from a correct investigation of the proper period in relation to the relation-back date.

25    There might be, as already observed, additional costs. However, the errors do mean that there is a cause for concern in relation to the Administrator’s report and position. The Administrator accepted (by his counsel) at the hearing that the calculation of the relation-back date was an error. However, the affidavit of the Administrator did not accept this, and instead re-stated the incorrect dates (as had been stated in the report to creditors). The Administrator also incorrectly referred to the Winding up Application as being filed on 9 April 2026. The affidavit of the Administrator stated that (with reference to the incorrect date that the Winding up Application was filed):

... I am advised by my solicitors and believe that the relation back day is the day on which that application was filed. That day is earlier than 6 August 2026, and the period within which a liquidator may recover voidable transactions is correspondingly longer.

My report to creditors dated 26 August 2026 identified the relation back period as the six months from 7 February 2026 to 6 August 2026. It did not address the possibility of an earlier relation back day arising from an order made on the Plaintiff’s application. I accept that the report should have addressed that possibility.

(emphasis added)

26    As was accepted at the hearing, that is also not the correct position. The relation-back date in accordance with item 7 of s 91 of the Act would be the same whether WMG was wound up pursuant to the Winding up Application or was wound up on accepting the Administrator’s recommendation at the second meeting of creditors. It is also not correct to say that the report should have addressed that “possibility” being a potential or an earlier possible date arising from the Winding up Application. That earlier date would have arisen under either circumstance. As observed above, that position was accepted today. However, when considering the appointment of the competing nominees, the maintenance of this position by the Administrator in his affidavit dated 2 September 2026 is relevant.

27    Third, in the Administrator’s affidavit of 2 September 2026, there is a reference to a potential $53M claim. It is described as a matter requiring further investigation in any liquidation. The potential claim is in relation to the recovery of $53M of unpaid share capital in WMG. The relevant Australian Securities and Investments Commission (ASIC) search of WMG does state that there is an amount unpaid on the ordinary shares issued of $53M. The report to creditors by the Administrator does not mention any such potential recovery. In fact, the report to creditors by the Administrator describes the number of shares issued and the paid up value of those shares.

28    Although there is independent evidence to support the statement in the Administrator’s affidavit, that is not the issue arising from the failure to bring this material to the creditor’s attention via the Administrator’s report. It was accepted by the Administrator that there was no evidence before the Court that the ASIC search of WMG had been provided to creditors. There is also no statement in the report to creditors of any amount of unpaid share capital. This also causes some concern in relation to the Administrator being appointed as the liquidator, due to this not being brought to the creditors’ attention. It may also have affected the Administrator’s recommendations and opinions that were stated in the creditors’ report. Given the position that the Administrator took at the hearing (maintaining his opinion that WMG should be wound up), it is unnecessary to reach any resolution on that issue; it is sufficient to observe that it was not brought to the attention of creditors.

29    Fourth, Sava Engineering also submitted that, effectively, an inference could be drawn from the chronology of events that the Administrator deliberately called the second meeting of creditors prior to the altered hearing date of the Winding up Application. That is that the Administrator knew the hearing of the Winding up Application was to return to Court on 4 September 2026 and therefore called the second meeting of creditors on 3 September 2026. The evidence that is before the Court does show an email of 18 August 2026 at 11.31 am to the receivers and managers appointed to WMG advising of the new hearing date of 4 September 2026. There is also an email of 18 August 2026 at 11.32 am to the Administrator advising of the new hearing date of 4 September 2026.

30    From the material filed by Sava Engineering in relation to the calling of the second meeting of creditors for 3 September 2026, it was clear that an allegation was being made that it was deliberately being called on a date prior to the resumed hearing date for the Winding up Application in circumstances where it was possible to call the meeting without seeking an extension from the Court up to and including 10 September 2026.

31    The Administrator provides evidence as to the commencement of the administration, the date the convening period was to end and the dates upon which that meeting could be held without seeking an extension from the Court. The Administrator does not provide any explanation for why the date of 3 September 2026 for the second meeting of creditors was chosen. The minutes of the first meeting of creditors, which was held on 18 August 2026, does record that the next meeting of creditors, being the second meeting, will be held prior to the hearing of the Winding up Application presently against the company. Those minutes (settled on 28 August 2026) state that the meeting closed at 11.31 am.

32    The Administrator’s counsel submitted that an inference could be drawn that there was an innocent explanation, that it was simply that the Administrator was calling the second meeting of creditors consistent with that observation made at the first meeting of creditors. That is, that the second meeting would be held prior to the hearing of the Winding up Application.

33    The difficulty with that submission is that although an inference may be able to be drawn, in circumstances where the Administrator was on notice of Sava Engineering’s submission in this regard, it is not a matter which should be left for the Court to draw an inference. The Administrator should have explained why it was that he sought to hold the second meeting of creditors on 3 September 2026. Ultimately, it is unnecessary to make a finding about why the second meeting was to be held on 3 September 2026. It is relevant in the balancing process, as to the appropriate appointee as liquidator, in all of the circumstances (particularly in the context of the usual position of appointing the Plaintiff’s nominee).

34    Fifth, was in relation to the rates that were to be charged by each of the competing nominees. I will not outline each of the relevant classifications of personnel from each of the competing nominees’ offices and the rates which are stated would be charged. It is sufficient to note that the first four categories are charged at a higher hourly rate by those in the Administrator’s office. After those four categories, there are some similarities and there are some differences including some hourly rates which are higher and some hourly rates which are lower as between the competing nominees’ classifications of personnel.

35    What follows from this, in terms of the competing nominees as to their respective costs is that if Sava Engineering’s nominee is appointed, there may be some cost savings in relation to the hourly rate to be charged. However, that would be somewhat neutralised because of the potential duplication of work that will have to be undertaken in relation to the investigations already conducted by the Administrator. Conversely, although the Administrator may have some higher rates for more senior people, as some of the work and investigation has already been undertaken, there would not be that duplication of the work.

36    Of course, on an application such as this, it is difficult to quantify whether or not the costs of the competing nominees in these particular circumstances, noting the different rates and the work that has been done and/or will need to be done. In these circumstances, I regard this factor as neutral.

37    Other potential discrepancies and issues were raised and, as mentioned, I do not propose and it is not necessary to canvas these in any detail. The only other matter which is perhaps worthy of passing mention is the discrepancies in relation to whether or not a deed of company arrangement was to be proposed, was impossible at a particular point in time, whether it was known to be impossible on an earlier occasion and whether it was disclosed and the like. Matters regarding a deed of company arrangement are obviously important given the overall purpose of Pt 5.3A and what creditors must decide at the second meeting of creditors. However, none of these additional matters would support a reason to depart from the usual approach of appointing the Plaintiff’s nominee.

conclusion

38    It is for the Defendant, the Administrator in this case, to establish that there are grounds to depart from the usual course of appointing the Plaintiff’s nominee as liquidator. I am not satisfied that there are such grounds. If anything, I am satisfied that there is some reason to not appoint the Administrator as the liquidator in the particular circumstances of this case.

39    Ultimately, given the practice of the Court and the prima facie position being that the appointment will usually be the Plaintiff’s nominated liquidator and noting the Defendant’s inability to establish grounds to depart from that, it is unnecessary to make any ultimate findings in this regard.

40    Therefore, for those reasons, I will make orders 1, 2 and 3 from the Plaintiff’s Interlocutory Application, that:

(1)    WMG be wound up pursuant to section 459A;

(2)    Mr Glenn Spooner be appointed as liquidator; and

(3)    the voluntary administration be terminated.

41    In all the circumstances the listing of this matter on Friday, 4 September 2026 will be maintained, and the parties can address the Registrar on the question of costs then. That way, the matter will be promptly resolved.

Associate:    

Dated:    17 September 2026