Mentha, in the matter of Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469 (23 December 2010)

Last Updated: 14 February 2011

FEDERAL COURT OF AUSTRALIA

Mentha, in the matter of Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469

Citation:		Mentha, in the matter of Griffin Coal Mining Company Pty Ltd (administrators appointed) [2010] FCA 1469
Parties:		MARK FRANCIS XAVIER MENTHA, CLIFFORD STUART ROCKE, SCOTT BRADLEY KERSHAW, BRIAN KEITH McMASTER IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285)
File number:		WAD 399 of 2010
Judge:		GILMOUR J
Date of judgment:		23 December 2010
Legislation:		Corporations Act 2001 (Cth) ss 435A, 436A, 443A, 443D, 447A, 447D Collie Coal (Griffin) Agreement Act 1979 (WA) Mining Act 1978 (WA) ss 61, 78 and 91B
Cases cited:		Carter, Re SFM Australasia Pty Ltd (admin apptd) [2009] FCA 360 Great Southern Infrastructure Pty Ltd; Ex parte Jones [2009] WASC 161 Hayes Re Estate Property Group Ltd (Admin Appt) [2007] FCA 1393 Lam Soon Australia Pty Ltd (admin apptd) v Molit (No 55) Pty Ltd (1996) 22 ACSR 169 Mentha, Re Spyglass Management Group Pty Ltd [2004] FCA 1469; (2004) 51 ACSR 432 Re Application of Fincorp Group Holdings Pty Ltd (admin apptd) [2007] NSWSC 628 Re Cook Cove Pty Ltd (admin appt) [2009] NSWSC 620 Re Malanos [2007] NSWSC 865 Re View Gold Pty Ltd, View Resources Ltd & View Nickel Pty Ltd; Ex Parte Saker [2008] WASC 241 Vision (Brisbane) Pty Ltd (admin apptd) [2010] FCA 186
Date of hearing:	23 December 2010
Place:	Perth
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	58
Counsel for the First & Second Plaintiffs:	Mr J A Thomson
Solicitor for the First & Second Plaintiffs:	Baker & McKenzie

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 399 of 2010

IN THE MATTER OF GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285)

MARK FRANCIS XAVIER MENTHA, CLIFFORD STUART ROCKE, SCOTT BRADLEY KERSHAW, BRIAN KEITH MCMASTER IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) First Plaintiffs THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) Second Plaintiff

JUDGE:	GILMOUR J
DATE OF ORDER:	16 DECEMBER 2010
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. Pursuant to s 447D(1) of the Corporations Act, that Mark Francis Xavier Mentha, Clifford Stuart Rocke, Scott Bradley Kershaw and Brian Keith McMaster (the first plaintiffs) are justified in causing The Griffin Coal Mining Company Ltd (Administrators Appointed) (ACN 008 667 285) (Griffin Coal) to make applications for and/or maintain and prosecute such applications for, and, in the event the applications are granted, to hold:

(a) new mining leases, exploration licences or prospecting licences in respect of all or any part of land currently the subject of coal mining leases CML 12/778, 12/779, 12/780, 12/781, 12/835, 12/836, 12/837, 12/838, 12/839, 12/888, 12/889, 12/890 and 12/891 (each due to expire on 31 December 2010); and

(b) miscellaneous licence L12/2,

(collectively, the New Grants).

2. Orders pursuant to s 447A(1) of the Corporations Act, that Part 5.3A of the Corporations Act is to operate in relation to Griffin Coal so that any personal liability of the first plaintiffs pursuant to s 443A of the Corporations Act arising out of or in connection with the New Grants (including insofar as the New Grants may be renewed or, if they constitute a licence, be converted to a different type of licence or to a mining lease) or any mining proposal associated with the New Grants, will only apply in respect of so much of:

(a) any royalties payable by Griffin Coal under the Mining Act 1978 (WA) (the Mining Act) and the New Grants on minerals obtained from the New Grants during the period of the voluntary administration of Griffin Coal;

(b) any liability of Griffin Coal to pay rent under the Mining Act and the New Grants which accrues during or is attributable to the period of the voluntary administration of Griffin Coal but does not include any liability for rent which accrues after the voluntary administration ceases; or

(c) any liability of Griffin Coal to pay other amounts in respect of the New Grants which accrues during or is attributable to the period of the voluntary administration of Griffin Coal but does not include any liability that might arise simply by virtue of Griffin Coal having made application for, maintained and prosecuted any application for or becoming the holder of any of the New Grants and in any case shall not extend to any liability that may be attributable to the period after the voluntary administration of Griffin Coal ends.

3A. Grants to any person, including any creditor of Griffin Coal, or the Australian Securities and Investments Commission, who can demonstrate sufficient interest to make such application as he, she, or it may be advised, liberty to apply to the Court to vary or discharge these Orders on 48 hours notice being given to the first plaintiffs and second plaintiffs and to the Court.

3B. Directs that the first plaintiffs and second plaintiffs cause notice of these Orders, within two business days after the making of these Orders:
(a) to be placed on the website maintained by the first plaintiffs at www.kordamentha.com and on the website maintained by Griffin Coal at www.griffincoal.com.au; and

(b) to be sent by email to all creditors of Griffin Coal who have provided the first plaintiffs with an email address, and to all other creditors of Griffin Coal who have provided the first plaintiffs with a mailing address, by mail.

4. Orders that the first and second plaintiffs' costs of this proceeding be costs in the administration of Griffin Coal.
   
5. Order that Confidential Exhibit "BKM-10" to the affidavit of Brian Keith McMaster affirmed on 15 December 2010 be kept confidential in the court file in these proceedings and not be accessed (other than by the plaintiffs) without order of the Court.
   

6. Directs that these orders be entered forthwith.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 399 of 2010

IN THE MATTER OF GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285)

MARK FRANCIS XAVIER MENTHA, CLIFFORD STUART ROCKE, SCOTT BRADLEY KERSHAW, BRIAN KEITH McMASTER IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) First Plaintiffs THE GRIFFIN COAL MINING COMPANY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 008 667 285) Second Plaintiff

JUDGE:	GILMOUR J
DATE:	23 DECEMBER 2010
PLACE:	PERTH

REASONS FOR JUDGMENT

INTRODUCTION

1. I made orders in this matter on 16 December 2010. These are my reasons for so doing. They reflect to a large extent the detailed written submissions filed by the plaintiffs.
2. The first plaintiffs are the joint and several voluntary administrators (Administrators) of The Griffin Coal Mining Company Pty Ltd (administrators appointed) (Griffin Coal). The first plaintiffs were appointed as administrators of Griffin Coal by its board of directors pursuant to s 436A of the Corporations Act 2001 (Cth) (Corporations Act) on 3 January 2010.
3. By an originating process filed in these proceedings, supported by an affidavit of Brian Keith McMaster affirmed on 15 December 2010 the Administrators seek:

(a) directions under s 447D of the Corporations Act that they would be justified in causing Griffin Coal to make applications for, maintain and prosecute such applications for, and in the event the applications are granted, to hold various mining leases and licenses which may be granted during the voluntary administration period; and

(b) orders under s 447A of the Corporations Act to vary the personal liability of the Administrators under s 443A of the Corporations Act in respect of such mining leases and licenses,

(the application).

BACKGROUND

4. Griffin Coal is one of the largest coal producers and suppliers in Western Australia, owning 3 open-cut coal mines in the Collie Basin.
5. The Administrators have, since their appointment, caused Griffin Coal and other related companies which are set out under para 12 of Mr McMaster's affidavit to continue to trade, with a view to realising the maximum value for its business and assets as a going concern.
6. The Administrators are in the process of selling the coal mining business of Griffin Coal and its related companies (the Coal Assets) on a going concern basis (the Sale Process).
7. A sale agreement in relation to the sale of the Coal Assets was entered into by the Administrators with the preferred bidder on 14 December 2010 (the Sale Agreement). Completion of the Sale Agreement is currently anticipated to occur in around February 2011.
8. In order to allow the Sale Process to proceed, the Administrators have obtained orders from this Court in proceeding number WAD15 of 2010, extending the time for convening a second creditors meeting for Griffin Coal, and other related companies, first to 1 May 2010, then 28 September 2010 and most recently to 25 February 2011.

MINING LEASES

9. Griffin Coal is the leaseholder of 13 mining leases in Western Australia relevant to this application as set out in the table marked as Annexure "A" to Mr McMaster's affidavit (the Mining Leases). These are for convenience attached as Annexure "A" to these reasons.
10. Griffin Coal holds in total approximately 95 individual mining tenements in the Collie and Boyup Basin areas in Western Australia. The majority of Griffin Coal's mining tenements have been granted pursuant to the Collie Coal (Griffin) Agreement Act 1979 (WA).
11. All of these Mining Leases are due to expire on 31 December 2010.
12. The Mining Leases include:

(a) CML 12/835 and 12/836 located in the Ewington 1 area and on which mining activity currently takes place;

(b) CML 12/778, 12/779, 12/780 and 12/781 which are an important part of the mining activity proposed for the Muja South area, the planning for which is substantially progressed; and

(c) CML 12/837, 12/838 and 12/839 located in the West Ewington area, likely to be the next area to be mined after Muja South.

13. Provisions of the Sale Agreement that relate to the Mining Leases and are relevant to this application are the condition precedent (for the benefit of the Administrators) in clause 2.1(o); the condition precedent (for the benefit of the purchaser) in clause 2.1(r); and the insured indemnities in G (17) to (24) of Schedule 3.
14. Applications for the issue of new mining leases to Griffin Coal over the mining tenements to which the Mining Leases relate have been lodged with the Department of Mines and Petroleum (Department) for 11 of the 13 Mining Leases as identified in the table at Annexure "A".
15. The Administrators have also caused applications for the grant of new mining leases for the remaining 2 of the Mining Leases (CML12/890 and CML12/891) (the Outstanding Applications) to be prepared, and intend for these applications to be lodged before those mining leases expire on 31 December 2010. The Administrators are awaiting the Western Australian Environment Minister's consent to mark out the land to which these tenements relate before lodging the applications, as the marking out is necessary for valid applications to be made under the Mining Act 1978 (WA) (Mining Act).
16. The Department is endeavouring to determine the most critical of the New Mining Lease Applications, being those in relation to CML12/835 and CML12/836 (the Priority Applications), which tenements are the subject of active mining operations, and, assuming that those applications are successful, have the new mining leases granted in respect of these tenements by the current expiry date of 31 December 2010. As they concern active mining operations, the Priority Applications have included mining proposals.
17. The Administrators have also lodged new miscellaneous licence application number L12/2 for Griffin Coal with the Department (the Licence L12/2 Application). Licence L12/2 is in respect of a corridor of land that will assist with giving access to the Buckingham/Muja South project area to which mining leases CML12/778, CML 12/779, CML12/780 and CML12/781 relate.
18. If the New Mining Lease Applications are granted they will each have a term of 21 years with the potential for them to be renewed for a further 21 years.
19. If the Licence L12/2 Application is granted it will have a term of 21 years with the potential for it to be renewed for up to a further two terms of 21 years.
20. The Administrators may also lodge exploration licence applications with the Department in respect of some or all of the land covered by the Mining Leases before 31 December 2010 (the Licence Applications), if there is a delay with lodging the Outstanding Applications, in order to preserve their priority with respect to these tenements. If licences are granted pursuant to the Licence Applications, the term for each of the licences would be 5 years.
21. To the extent that new mining leases, licenses, exploration licences or prospecting licences are granted in respect of some or all of:

(a) the New Mining Lease Applications;

(b) the Licence L12/2 Application; and

(c) the Licence Applications,

then these are referred to as the New Grants.

22. The terms of the New Grants are prescribed by ss 61, 78 and 91B of the Mining Act.

LAW

23. Section 443A of the Corporations Act relevantly provides:

The administrator of a company under administration is liable for debts he or she incurs, in the performance or exercise, or purported performance or exercise, of any of his or her functions and powers as administrator, for:
(a) services rendered; or
(b) goods bought; or
(c) property hired, leased, used or occupied; or
(d) the repayment of money borrowed; or
(e) interest in respect of money borrowed; or
(f) borrowing costs.

24. Section 443D of the Corporations Act provides the administrators with a statutory indemnity out of the property of the company for, amongst other things, any other debts or liabilities incurred by the administrators in the performance of their functions or powers as administrators.
25. Section 447D(1) of the Corporations Act enables administrators to seek directions about matters arising in connection with the performance or exercise of any of the administrator's functions and powers.
26. Section 447A(1) of the Corporations Act provides that the Court may make such orders as it thinks appropriate about how Part 5.3A is to operate in relation to a particular company.
27. The Court has broad powers under s 447A(1), and has widely used this power in a variety of contexts.
28. It is well established that the Court has power under s 447A of the Corporations Act to order an indemnity where the indemnity available to the administrator under s 443D is insufficient or in doubt, in order to satisfy the debts for which the administrator is personally liable pursuant to s 443A: Mentha, Re Spyglass Management Group Pty Ltd [2004] FCA 1469; (2004) 51 ACSR 432.
29. It is also well established that the Court has power under s 447A of the Corporations Act to make orders to limit the administrators' personal liability under s 443: Hayes Re Estate Property Group Ltd (Admins Apptd) [2007] FCA 1393; Re Malanos [2007] NSWSC 865; Re View Gold Pty Ltd, View Resources Ltd & View Nickel Pty Ltd; Ex Parte Saker [2008] WASC 241; Re Great Southern Infrastructure Pty Ltd; Ex parte Jones [2009] WASC 161; Carter, Re SFM Australasia Pty Ltd (admin apptd) [2009] FCA 360; and Vision (Brisbane) Pty Ltd (Admins Apptd) [2010] FCA 186.
30. The principles governing the granting of an application for orders under s 447A to vary the liability of administrators under s 443A can be summarised as follows:

(a) the proposed arrangements are in the interests of the company's creditors and consistent with the objectives of Part 5.3A of the Corporations Act: Re Great Southern at [13].

(b) typically the arrangements proposed are to enable the company's business to continue to trade for the benefit of the company's creditors: Re Malanos at [9] and Re View at [17].

(c) the creditors of the company are not prejudiced or disadvantaged by the types of orders sought and stand to benefit from the administrators entering into the arrangement: Re View at [18], and also Re Application of Fincorp Group Holdings Pty Ltd [2007] NSWSC 628 at [17].

(d) notice has been given to those who may be affected by the order: Re Great Southern at [12].

31. Most of the cases where the courts have exercised its power under s 447A to vary the administrator's personal liability under s 443A have involved administrators borrowing funds during the period of the administration. The orders typically sought have the effect of limiting recourse of the counterparty to the administrator personally to the extent to which he or she is able to be indemnified from the assets of the company.
32. However, Re Cook Cove Pty Ltd (Admins Appt) [2009] NSWSC 620 was a case which involved the administrators entering into various post appointment construction related contracts. In that case, orders were made to limit the administrators' potentially significant personal liability under the post appointment contracts to the extent that they were able to be satisfied out of the property of the company.
33. In Re Cook at [40], Austin J considered the practical utility of the administrators' statutory indemnity as being a crucial factor in favour of granting the orders sought.
34. Austin J in Re Cook at [37] also made the following comments:

One can envisage cases in which it would not be appropriate to make an order limiting the normal liability of an administrator under Pt 5.3A for post-appointment debts: for example, where the administrator proposes to enter into many business transactions in the course of carrying on the company’s business, contracting with suppliers and service providers for relatively small amounts in circumstances where those with whom the administrator contracts would not be aware of the court’s order and would be entitled to assume that the normal liability provisions of Pt 5.3A were applicable. But the decided cases are of a different kind.

35. In this case the liabilities are for potentially significant amounts and the creditor in question (represented by the Department) has been involved in the drafting of the orders sought in the Application. At the hearing of the application a letter from the Department dated 15 December 2010 was tendered. It stated in substance that the Department has no objection to the orders sought in the application.
36. The orders sought under s 447A in this case will have the effect that the Administrators will only be personally liable for such debts in connection to the New Grants pursuant to s 443A of the Corporations Act as accrued and are attributable to the administration period.
37. The orders sought in this case are consistent with the general principles outlined above and also with the policy reasons behind s 443A of the Corporations Act, which is to encourage suppliers, customers and employees to continue to deal with a company in administration during the administration period, by, in effect, ensuring that they will be paid. This increases the prospects that the objectives of the voluntary administration process will be met, being essentially that the business of the company will continue to trade or, if this is not possible, that the returns to stakeholders will be greater than in an immediate winding up: s 435A Corporations Act.
38. Further, directions under s 447D of the Corporations Act similar to those sought in the Application have been sought and made (or substantially made) by the Court in:

(a) ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No 9) [2009] FCA 1462 (which related to the administrators' entry into a funding agreement);

(b) Carter Re SFM Australasia Pty Ltd (Administrators Appointed) [2009] FCA 360 (which related to the administrators' entry into a cash facility agreement); and

(c) Re Application of Fincorp Group Holdings Pty Ltd [2007] NSWSC 628 (which related to the administrators' entry into a loan facility).

SUPPORT AND REASONS FOR APPLICATION

Benefit

39. The Administrators are of the opinion that, in order to maximise the outcome of the Sale Process for the benefit of the creditors, it is desirable that the assets of Griffin Coal, including the rights in the Mining Leases be preserved, and that the New Grants be issued as soon as possible and potentially during the voluntary administration period.
40. The mining leases to which the Priority Applications relate are particularly important, as active mining has been, and is continuing to be, conducted on these tenements. Griffin Coal's business operations in respect of these particular tenements would not be able to continue without new leases being granted in respect of these Mining Leases.

Administrators' exposure - fairness

41. There is a risk that:

(a) s 443A might apply to any new mining leases or licences granted to Griffin Coal during the administration period of Griffin Coal, at least insofar as that section deals with "property hired, leased, used or occupied"; and

(b) liabilities associated with the mining leases and licences for the full duration of their term (21 years in this case for most of the New Grants plus any renewal), might be considered to be "debts" for the purposes of s 443A, as those liabilities could be regarded as having been incurred at the time the mining leases were entered into: see for example Lam Soon Australia Pty Ltd (administrator appointed) v Molit (No 55) Pty Ltd (1996) 22 ACSR 169 at 177.

42. The potential exposure for the Administrators under the New Grants could be significant, particularly given the long term nature of the majority of the leases and licences that might form part of the New Grants.
43. Amounts which may arise for payment by Griffin Coal under the New Grants are set out in para 48 of Mr McMaster's affidavit, and potentially include amounts in respect of:

(a) rent;

(b) rates;

(c) minimum expenditure requirements;

(d) if coal is extracted, royalties; and

(e) rehabilitation liabilities.

44. Amounts could potentially be significant based on the indicative figures set out in para 48 of Mr McMaster's affidavit. The Administrators may be liable for:

(a) expenditure obligations in the range of approximately $15,000 to $100,000 per tenement per year;

(b) royalties payable on export coal, which are 7.5% of the gross invoice of the exported coal less allowable deductions;

(c) royalties payable on domestic coal, which are in excess of $2.46/tonne of coal sold; and

(d) environmental rehabilitation expenses, which cannot be ascertained with precision, but can be very substantial.

45. The Administrators anticipate that Griffin Coal will emerge as a solvent entity, under the control of a new owner, following the completion of the Sale Agreement, which is intended to be by way of a share sale and include a deed of company arrangement.
46. The Administrators are concerned that they could be potentially liable for debts in connection with or arising under the New Grants, if these are caught by s 443A, long after the Administrators have any practical right to be indemnified from the assets of Griffin Coal. Ordinarily an administrator will have a right of indemnity from the property of the company from which to be reimbursed in respect of amounts for which he or she is personally liable pursuant to s 443A (under s 443D). However, once the assets of the company are realised, and proceeds remitted by way of dividend to creditors, this right of indemnity becomes of illusory value. The Sale Process is likely to complete in February 2011, and although the potential terms of the sale might mean some delay in the payment of dividend to creditors, all amounts to be distributed to creditors will be distributed before the potential liabilities in respect of the New Grants have crystallised or could be estimated with any precision.
47. The evidence demonstrates that the Administrators are unlikely to permit Griffin Coal to enter into the New Grants without orders relieving the First Administrators of personal liability in respect of amounts payable under the New Grants as sought in the application given the personal liability risk.

VIEW OF STAKEHOLDERS

Department

48. The orders sought in the application have been extensively discussed with the Department. The Department, as I earlier stated, does not oppose the orders sought.
49. As the Administrators anticipate that Griffin Coal will emerge as a solvent entity following the completion of the Sale Agreement, the orders sought would not prejudice the Department as they:

(a) will have the effect that the Administrators remain personally liable for amounts payable in respect of the New Grants (to the extent that they are caught by s 443A of the Corporations Act) attributable to the administration period, consistent with the purpose and intention of s 443A of the Corporations Act, and subject to the Administrators' right of indemnity out of the assets of Griffin Coal under s 443D of the Corporations Act;

(b) would make the Minister's rights in respect of debts attributable to the period after the end of the administration (and so after a sale of the shares in Griffin Coal to a third party as anticipated) consistent with the rights the Minister would normally have against any solvent entity, being rights in respect of the holder only (and not ordinarily against prior directors and officers of the holder); and

(c) would not detract from, and the Minister would continue to enjoy, all the rights the Minister would otherwise have under the New Grants in the event that the holder defaults under the New Grants.

50. It is also the Administrators' intention that all debts to the Department in respect of the New Grants that accrue during, and are attributable to, the period of the voluntary administration, and which are caught by s 443A of the Corporations Act, will be paid by the Administrators.

Secured Creditors

51. The secured creditors of the Company support the Application.

ASIC

52. The Australian Securities and Investments Commission has been notified of the application, and there is before me its letter to the Administrator's solicitors Baker McKenzie dated 16 December 2010, where it states that it does not propose to intervene in the proceedings.

Committee of creditors

53. The following 13 out of 16 members of the committee of creditors of Griffin Coal (Committee) have indicated that they support the application:

Creditor	Represented By
Australian Manufacturing Workers Union	Steve McCartney
Construction, Forestry, Mining and Energy Union	Gary Wood
Clearwater Capital Partners	Edward Cairns and Timothy Tse
Credit Distressed Blue Line Master Fund Limited	Larry Clark
Harbinger Capital Partners Master Fund Limited	Larry Clark
Cockburn Cement Limited	Michael Williams
IHI Corporation/IHI Engineering Australia Pty Ltd	Ko Nagata
Komatsu Australia Corporate Finance Pty Ltd	James Dwyer
Australian Taxation Office	Lorne Hunt
Piacentini & Son Pty Ltd	John Tombleson
Bunbury Drilling Company	Jason Linaker
nabCapital Leasing (No 1) Pty Ltd	Richard Wheeler and Jason McGregor
Perdaman Chemicals & Fertilizers	Andreas Walewski

54. The following other three Committee members have been advised of the application by the Administrators, but have not provided any views on the application:

Creditor	Represented By
Association of Professional Engineers, Scientists and Managers, Australia	Don Moss
Royal Equipment Inc	Don Wisenbaker
TiWest	Joy Campos

No prejudice to unsecured creditors or others

55. The Administrators have not obtained the views of all the unsecured creditors of Griffin Coal to the application in view of:

(a) there being a Committee, and the fact that the Committee fairly represents the views of a representative cross-section of creditors of Griffin Coal;

(b) the impracticality of such an exercise given the urgency of this application and the timeframe within which the New Grants may be issued.

56. The Administrators also consider that creditors will not generally be prejudiced by the application, as it is in their interests for the New Grants to be issued (for the reasons already outlined above). The orders sought relate to the limitation of the Administrators' personal liability, and do not otherwise affect the liability of Griffin Coal under the New Grants, or prejudice the interests of its creditors.
57. Orders as sought in the application, if granted, would also give other creditors and sufficiently interested persons who may not have been notified of the application an opportunity and avenue to be heard if they have any objections to the orders sought.

CONCLUSION

58. For these reasons I am satisfied that the application and related consequential orders ought to be granted.
    

I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate:

Dated: 23 December 2010