Inelegant insufficiency of credibility ends VA

iNO has not yet seen a DIRRI which might explain the inexplicable willingness of Greengate Advisory’s Patrick Loi and John Chand to accept appointments as voluntary administrators (VAs) of a company the day before a judge of the NSW Supreme Court was to hear an application to have the company wound up.

“The application was put by Mr Mathas, who appears for CII on the instructions of the voluntary administrators with his customary moderation, and with elegance, but neither that moderation nor that elegance could conceal its underlying hopelessness, or the fact that Mr Loi, an experienced insolvency practitioner, who gave evidence in support of the application, could not reasonably have thought that it could succeed.” NSW Supreme Court judge Ashley Black.

What iNO has seen is the judgment of the judicial officer who heard Loi and Chand’s adjournment application, supposedly brought to allow CII Group Pty Ltd’s sole director Iwan Sunito the opportunity to propound a Deed of Company Arrangement (DoCA).

Whilst enlightening, the judgment In the matter of CII Group Pty Ltd [2025] NSWSC 318 sheds no light on why Loi and Chand would bring what presiding judge Ashley Black has portrayed as a profoundly hopeless application.

It certainly wasn’t to give their lawyer, ex-Norton Rose partner Mitchell Mathas an opportunity to deploy his advocative gifts, which the judge acknowledged whilst manifest were in this instance insufficient.

“The application was put by Mr Mathas, who appears for CII on the instructions of the voluntary administrators with his customary moderation, and with elegance, but neither that moderation nor that elegance could conceal its underlying hopelessness, or the fact that Mr Loi, an experienced insolvency practitioner, who gave evidence in support of the application, could not reasonably have thought that it could succeed,” the judge said.

According to the judgment Loi’s first conference with Sunito was “immediately prior” to his and Chand’s appointments on Tuesday, March 25.

Loi we are told, was apparently persuaded to take the gig on the basis of uncorroborated representations Sunito made in respect of alleged payments to the ATO and a spreadsheet listing assets Sunito “believed” could be used as security for payment of the DoCA contributions. But Loi had no opportunity to verify the claims prior to the hearing.

In his affidavit in support of an adjournment Loi deposed to having received confirmation that $100,000 had been deposited into the trust account of Sunito’s solicitors, to be used to cover the expenses of the VAs if an adjournment was granted.

Mathas also referred to the indemnity during the oral hearing, urging the judge to infer that the funds proved Sunito had capacity to make the proposed contribution to the deed fund. Justice Black saw it differently.

“It does not seem to me that that payment supports any such inference,” the judge said.

“It instead indicates, in a disturbing characteristic that is often seen in applications of this kind, that an amount has been contributed by the deed proponent that is likely to ensure that the voluntary administrators will receive payment of their fees and disbursements, but is not sufficiently large to provide any comfort that any significant distribution could be made to other creditors.”

There was also the indisputable fact that Sunito had never sought to challenge the debt upon which the creditor’s statutory demand was based or that after resisting since August 2024 on the basis of producing voluminous evidence as to CII Group’s purported solvency, Sunito then decided the company was in danger of trading whilst insolvent.

Hopeless is as hopeless does was the principle illuminated by this matter with his honour refusing to adjourn the hearing of the winding up and appointing William Buck’s Michael Brereton and Sean Wengel as liquidators.

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