Preston, in the matter of Hughes Drilling Limited (Administrators Appointed) [2016] FCA 1279

Preston, in the matter of Hughes Drilling Limited (Administrators Appointed) [2016] FCA 1279

An extension of the convening period was appropriate because it was a fairly short extension necessary for administrators to complete the sales process (which may offer superior returns to creditors compared to liquidation), to maintain the business as a going concern, and to enable the administrators to properly inform creditors and fulfil their statutory reporting obligations, with no prejudice being occasioned to creditors or any opposition to the orders.

Parties
First Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling Limited (Administrators Appointed) ACN 124 279 750; Second Plaintiff: Hughes Drilling Limited (Administrators Appointed) ACN 124 279 750; Third Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Australian Gas Drilling Pty Ltd ACN 139 242 890 (and others named in the Schedule); Fourth Plaintiff: Australian Gas Drilling Pty Ltd ACN 139 242 890; Fifth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of EDMS Metals Pty Ltd ACN 146 399 760; Sixth Plaintiff: EDMS Metals Pty Ltd ACN 146 399 760; Seventh Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Every Day Mine Services Operations Pty Ltd ACN 003 949 148; Eighth Plaintiff: Every Day Mine Services Operations Pty Ltd ACN 003 949 148; Ninth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Express Hydraulics (Aust) Pty Ltd ACN 155 845 864; Tenth Plaintiff: Express Hydraulics (Aust) Pty Ltd ACN 155 845 864; Eleventh Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of G.O.S. Drilling Pty Ltd ACN 068 520 794; Twelfth Plaintiff: G.O.S. Drilling Pty Ltd ACN 068 520 794; Thirteenth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of HD JSW Pty Ltd ACN 165 895 072; Fourteenth Plaintiff: HD JSW Pty Ltd ACN 165 895 072; Fifteenth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling 1 Pty Ltd ACN 011 007 702; Sixteenth Plaintiff: Hughes Drilling 1 Pty Ltd ACN 011 007 702; Seventeenth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling 2 Pty Ltd ACN 146 399 902; Eighteenth Plaintiff: Hughes Drilling 2 Pty Ltd ACN 146 399 902; Nineteenth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling Corporate Pty Ltd ACN 146 398 718; Twentieth Plaintiff: Hughes Drilling Corporate Pty Ltd ACN 146 398 718; Twenty First Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Equipment Hire Pty Ltd ACN 146 398 923; Twenty Second Plaintiff: Hughes Equipment Hire Pty Ltd ACN 146 398 923; Twenty Third Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hyd-Elec Australia Pty Ltd ACN 151 316 611; Twenty Fourth Plaintiff: Hyd-Elec Australia Pty Ltd ACN 151 316 611; Twenty Fifth Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of JSW Australia Pty Ltd ACN 125 989 791; Twenty Sixth Plaintiff: JSW Australia Pty Ltd ACN 125 989 791; Twenty Seventh Plaintiff: Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Reichdrill Australia Pty Ltd ACN 162 841 287; Twenty Eighth Plaintiff: Reichdrill Australia Pty Ltd ACN 162 841 287
Jurisdiction
Australia
Judgment Date
18 October 2016
Procedural Posture
Corporations – Application for Extension of Convening Period Under External Administration / Interlocutory Application – Orders for Extension of Convening Period
Outcome
Application granted. Orders made extending convening period and specifying meeting and notification procedures.
Legal Topics
External Administration, Extension of Convening Period, Voluntary Administration, Creditors' Meetings
Corporations Law Insolvency Law External Administration Extension of Convening Period Voluntary Administration Creditors' Meetings

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Parties

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling Limited (Administrators Appointed) ACN 124 279 750

First Plaintiff

Hughes Drilling Limited (Administrators Appointed) ACN 124 279 750

Second Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Australian Gas Drilling Pty Ltd ACN 139 242 890 (and others named in the Schedule)

Third Plaintiff

Australian Gas Drilling Pty Ltd ACN 139 242 890

Fourth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of EDMS Metals Pty Ltd ACN 146 399 760

Fifth Plaintiff

EDMS Metals Pty Ltd ACN 146 399 760

Sixth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Every Day Mine Services Operations Pty Ltd ACN 003 949 148

Seventh Plaintiff

Every Day Mine Services Operations Pty Ltd ACN 003 949 148

Eighth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Express Hydraulics (Aust) Pty Ltd ACN 155 845 864

Ninth Plaintiff

Express Hydraulics (Aust) Pty Ltd ACN 155 845 864

Tenth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of G.O.S. Drilling Pty Ltd ACN 068 520 794

Eleventh Plaintiff

G.O.S. Drilling Pty Ltd ACN 068 520 794

Twelfth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of HD JSW Pty Ltd ACN 165 895 072

Thirteenth Plaintiff

HD JSW Pty Ltd ACN 165 895 072

Fourteenth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling 1 Pty Ltd ACN 011 007 702

Fifteenth Plaintiff

Hughes Drilling 1 Pty Ltd ACN 011 007 702

Sixteenth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling 2 Pty Ltd ACN 146 399 902

Seventeenth Plaintiff

Hughes Drilling 2 Pty Ltd ACN 146 399 902

Eighteenth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Drilling Corporate Pty Ltd ACN 146 398 718

Nineteenth Plaintiff

Hughes Drilling Corporate Pty Ltd ACN 146 398 718

Twentieth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hughes Equipment Hire Pty Ltd ACN 146 398 923

Twenty First Plaintiff

Hughes Equipment Hire Pty Ltd ACN 146 398 923

Twenty Second Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Hyd-Elec Australia Pty Ltd ACN 151 316 611

Twenty Third Plaintiff

Hyd-Elec Australia Pty Ltd ACN 151 316 611

Twenty Fourth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of JSW Australia Pty Ltd ACN 125 989 791

Twenty Fifth Plaintiff

JSW Australia Pty Ltd ACN 125 989 791

Twenty Sixth Plaintiff

Jason Preston, William James Harris and Shaun Fraser in their capacities as joint and several voluntary administrators of Reichdrill Australia Pty Ltd ACN 162 841 287

Twenty Seventh Plaintiff

Reichdrill Australia Pty Ltd ACN 162 841 287

Twenty Eighth Plaintiff

Procedural Posture

Corporations – Application for Extension of Convening Period Under External Administration / Interlocutory Application – Orders for Extension of Convening Period

Legal Issues

  1. 1 Should the convening period for the second meeting of creditors under s 439A of the Corporations Act 2001 (Cth) be extended?
  2. 2 Should consequential orders under s 447A of the Corporations Act 2001 (Cth) be granted regarding conduct of meetings and notices?

Ratio Decidendi

An extension of the convening period was appropriate because it was a fairly short extension necessary for administrators to complete the sales process (which may offer superior returns to creditors compared to liquidation), to maintain the business as a going concern, and to enable the administrators to properly inform creditors and fulfil their statutory reporting obligations, with no prejudice being occasioned to creditors or any opposition to the orders.

Court Disposition

Application granted. Orders made extending convening period and specifying meeting and notification procedures.

Orders

  • The application be returnable instanter.
  • The convening period within which the administrator plaintiffs must convene the meetings of creditors of the corporate plaintiffs required by section 439A(1) of the Act is extended up to and including 2 December 2016.