Judge lops six weeks off convening period extension

WA Insolvency Solutions’ Greg Prout.
WA Insolvency Solutions’ Jimmy Trpcevski.

The moral of this particular tale is that if you want a judge to approve your application to significantly extend the convening period, don’t starve them of detail.

“It must be understood that requests for extensions of the convening period under s 439A are not simply available for the asking.” Supreme Court of West Australia judge Michael Lundberg.

As is made clear in Bragu Pty Ltd (Administrators Appointed) [2023] WASC 388 the first affidavit evidence Judge Michael Lindberg was presented with in support of the ex-parte extension application brought by Bragu Pty Ltd administrators Greg Prout and Jimmy Trpcevski was “far less than one would expect to justify a three‑month extension.”

To remedy the dearth his honour, a former Jones Day litigator of note, invited the WA Insolvency Solutions duo to fill in the blanks via an email from his chambers on 4 October 2023, one day before the application was to be heard.

Regrettably, the judge noted, the shortfall was not “substantially improved by the second affidavit”, adding that “The two affidavits which are relied upon provide very little by way of granular detail as to the nature of the business which is operated by the Company, or as to the course of the administration to date.”

What the court could glean from the material provided was that Prout and Trpcevski were assessing some 16 expressions of interest in buying Bragu’s business, which trades as ‘Sound Brewing Co‘ and operates a brewery, taphouse and restaurant in the beachside suburb of Rockingham south of Perth.

Unsurprisingly given the judge’s dissatisfaction, at the time they made the application the administrators were not in a position to provide more information to creditors about potential options.

Thus an extension of the period in which to convene the second meeting of Bragu’s creditors to and including January 5, 2024 was necessary.

But the judge’s chief concern was whether the discretion to extend was enlivened by the anorexic serve of evidence dished up.

“On applications of this nature, the court typically gives weight to the opinion of the appointed administrators,” he said.

“However, the opinion of the administrators must be supported by sufficient factual information which explains the course of the administration and which justifies the further time which is sought.

“In my view, the limited affidavit material which has been adduced by the plaintiffs does not justify an extension of the convening period under s 439A for a period of three months,” the judge said.

“The affidavit material is conclusionary and overly general. It must be understood that requests for extensions of the convening period under s 439A are not simply available for the asking.

“Administrators are required to justify the request for an extension and must adduce sufficiently detailed factual information in this regard, to ensure the court has a thorough understanding of the administration and the work which has been undertaken, as well as the future work which is proposed to be undertaken (and why it is needed). This is unquestionably important in the context of an ex parte application such as the present.

“I am prepared to grant an extension to the convening period for 45 days from today, which will be until 20 November 2023,” his honour concluded.

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