IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
COMMERCIAL COURT

S ECI 2021 00327
IN THE MATTER OF BLUECHAIN PTY LTD (ACN 129 214 795)

GLENCURR CONSULTING PTY LTD (ACN 115 541 707)

and

MARK WILLIAM WINNETT	Plaintiffs	
		
v		
		
BLUECHAIN PTY LTD (ACN 129 214 795)	Defendant	

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JUDGE:	DELANY J	
WHERE HELD:	Melbourne	
DATE OF HEARING:	16 April 2021	
DATE OF RULING:	20 April 2021	
CASE MAY BE CITED AS:	Re Bluechain Pty Ltd	
MEDIUM NEUTRAL CITATION:	[2021] VSC 187	

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CORPORATIONS – Return of ex parte application – Application to appoint provisional liquidators as administrators – Alleged non-disclosure on ex parte application of conflicts of interest – Allegations of unsuitability of provisional liquidators – All allegations denied – All parties including those making the allegations consent to the orders – Untested allegations not a basis to refuse the orders sought – Corporations Act 2001 (Cth) s 436B(2) – Grace v Grace [2007] NSWSC 6; (2007) 25 ACLC 141 cited.
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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiffs	H Somerville	DSS Law	
			
For the second Defendant	M Galvin QC and
J Kohn	Brand Partners Commercial Lawyers	
			
For the Provisional Liquidators	P Fary SC	SLF Lawyers	

HIS HONOUR:
Overview
1	On 17 February 2021 the Court made orders (‘the 17 February Orders’) including that:
(3)	Mr. Richard Albarran and Mr. Richard Lawrence be appointed as joint provisional liquidators of the Defendant, Bluechain Pty Ltd in accordance with section 472(2) of the Corporations Act 2001 (Cth).
(4)	Within 42 days from the date of this order, the provisional liquidators must provide to the Court and all parties a report that:
a.	identifies the assets and liabilities of the Defendant;
b.	provides an opinion as to solvency;
c.	indicates a likely return to creditors if the Defendant be wound up;
d.	includes a summary whether proper financial records have been maintained; and
e.	indicates whether there are any suspected contraventions of the Corporations Act 2001 (Cth) by the Defendant or any director of the Defendant.
2	Those orders were made on an ex parte application by the first plaintiff, Glencurr Consulting Pty Ltd (‘Glencurr’).  The final relief sought in the application is for orders that Bluechain Pty Ltd (‘Bluechain’) be wound up on the just and equitable ground relying on s 461(1)(k) of the Corporations Act 2001 (Cth) (‘the Act’).
3	The 17 February Orders gave leave to Glencurr to add Mr Winnett, a director of Bluechain from 5 February 2021, as the second plaintiff to the proceeding.  As the transcript of the hearing records, Mr Winnett was given leave pursuant to s 459P(2)(c) as a director of Bluechain to apply for a winding up of the company on the ground of insolvency relying on ss 459A and 1323 of the Act.  The amended originating process dated 17 February 2021, reflects that grant of leave and seeks to wind up Bluechain in the alternative, in insolvency.
4	On 29 March 2021 orders were made by consent joining Bluechain Payments Limited (‘Payments’) as the second defendant to the proceeding.  Payments is a company incorporated in the United Kingdom.  It holds all of the 8,953,600 issued shares in Bluechain.  Glencurr holds 36.55 percent of the issued shares in Payments.  On 29 March 2021 orders were made for the filing and service of material by Payments and by the plaintiffs and for the filing of written submissions so as to provide for a substantive hearing of the amended originating process to take place on 16 April 2021.
5	As provided for in the 17 February Orders, the provisional liquidators prepared a report dated 6 April 2021 (‘the Report’) that has been filed with the Court.
6	Bluechain was incorporated on 14 January 2008.  It was founded by Craig Glendenning, a former director.  Bluechain is part of a group of companies which are interrelated in terms of their business activities.  The key activity of Bluechain, and of the group of which it forms part, concerns the development and marketing of a peer to peer secure payment solutions product via an open network, a payment platform first patented in around 2010.
7	From 2017 Bluechain has been a wholly owned subsidiary of Payments.  Payments was incorporated in the United Kingdom in 2017 enabling the raising of additional funds for development of the payment platform, proof of the concept and for its commercialisation.  Payments is the holding company for a number of wholly owned subsidiaries incorporated in the Australia, the United Kingdom, Singapore and in Africa.
8	The Report provides a detailed review of the financial position and solvency of Bluechain.  It includes a statement of the opinion of the provisional liquidators that the company is insolvent and that on a liquidation the estimated return to priority creditors is between 58.4 and 86.2 cents in the dollar and to unsecured creditors, nil.
9	The primary position of the plaintiffs is that they seek the winding up of the company, no longer on the basis of the just and equitable ground as provided for in s 461(1)(k) of the Act, but on the grounds of insolvency.
10	Payments contends that the 17 February Orders made ex parte appointing provisional liquidators to the company should never have been made and should be discharged.  The primary complaints in support of discharge of the 17 February Orders relate to the alleged nondisclosure of relevant facts to the Court on the hearing of the application and to the absence of an undertaking as to damages in support of the orders made.
11	The plaintiffs rely upon the following evidence:
–	Affidavit of Benjamin Thomas Skinner affirmed 12 February 2021;
–	Affidavits of Mark William Wynette affirmed 16 February 2021, 17 February 2021, 1 March 2021 and 9 April 2021;
–	Affidavits of Craig Glendenning dated 16 February and 13 April 2021.
12	Payments relies upon the following evidence:
–	Affidavit of Jeremy Brand dated 6 April 2021;
–	Affidavit of Peter Russell dated 6 April 2021;
–	Affidavits of John Mero dated 6 and 9 April 2021;
–	Affidavit of Michael McCauley dated 6 April 2021;
–	Affidavit of Jonathan Buckley dated 7 April 2021;
–	Expert report of Ross McDermott filed 6 April 2021.
13	An affidavit made 14 April 2021 by Richard John Lawrence has been filed on behalf of the provisional liquidators that responds to the affidavits relied upon by Payments.
14	On the hearing of the matter the plaintiffs, Payments, and the provisional liquidators were each separately represented by counsel.  Prior to the hearing, written submissions and proposed minutes of orders were filed on behalf of the plaintiffs and Payments.
15	It has not become necessary for the Court to rule upon the primary competing positions of the parties.  That is so because following discussions between all relevant parties it is proposed that the Court order, by consent, as follows:
The provisional liquidators have leave to appoint themselves as administrators of the first defendant pursuant to section 436B(2)(g) of the Corporations Act 2001.
16	The purpose of the order sought by consent, with the provisional liquidators as the moving party, is to enable Payments to put forward a proposed deed of company arrangement (‘DOCA’) for consideration by the creditors of Bluechain.
17	Before the Court may make the order sought by consent, it must be satisfied both that the criteria in s 436B(1) are satisfied, and that to make such an order is appropriate in the exercise of its discretion in s 436B(2)(g) of the Act.
18	Payments contends that the order pursuant to s 436B(2)(g) of the Act should be made on condition that the administrators do not sell the assets of the company or enter into a tender process with respect to those assets during the administration and that upon the appointment of the administrators, the provisional liquidation be terminated.
19	The provisional liquidators oppose the first condition limiting the power of sale or the conduct of a tender process.  They do not agree with the proposed order that upon their appointment as administrators the provisional liquidation be terminated.
20	The plaintiffs oppose an order that the provisional liquidation be terminated coincident upon the appointment of the provisional liquidators as administrators.
21	As indicated at the conclusion of the hearing on 16 April 2021, I will make the order sought by consent pursuant to s 436B(2)(g).  I will make the order on the condition sought by Payments limiting the power of sale or the conduct of a tender process by the administrators.  I will provide for termination of the provisional liquidation coincident upon the appointment of the provisional liquidators as administrators.  I will list the matter for directions on a date that is after the date of the administrators’ report pursuant to s 439A of the Act.  I will reserve liberty to apply.
22	I now set out my reasons for those orders.
Orders sought Pursuant to s 436B of the Act
23	Section 436B of the Act is in the following terms:
Liquidator may appoint administrator
(1)	A liquidator or provisional liquidator of a company may by writing appoint an administrator of the company if he or she thinks that the company is insolvent, or is likely to become insolvent at some future time.
(2)	A liquidator or provisional liquidator of a company must not appoint any of the following persons under subsection (1):
(a)	himself or herself;
(b)	if he or she is a partner of a partnership - a partner or employee of the partnership;
(c)	if he or she is an employee - his or her employer;
(d)	if he or she is an employer - his or her employee;
(e)	if he or she is a director, secretary, employee or senior manager of a corporation – a director, secretary, employee or senior manager of the corporation; 
unless:
(f)	at a meeting of the company’s creditors, the company’s creditors pass a resolution approving the appointment; or
(g)	the appointment is made with the leave of the Court.
24	The power of a provisional liquidator to appoint an administrator of the company in s 436B(1) is dependent upon the provisional liquidator thinking that the company is insolvent or is likely to become insolvent at some future time.  It is apparent from the Report that the liquidators are of such an opinion.
25	The executive summary in section 3 of the Report includes the following observations by the provisional liquidators:
Assets and liabilities of the Company	•	Cash at bank in the amount of $753,277
•	Intellectual property of $5,441,018 which relates to trademarks, patents, website development and capitalised research and development expenditure on the Bluechain Technology owned by the Company.
•	A Research and Development Incentive of $1,842,839 for which insufficient documentation has been provided to substantiate same and which would likely be offset by the Company’s ATO debt of $1,997,002 as reflected in its balance sheet.
	
	My investigations into the Company’s affairs have identified the following liabilities as at the date of my appointment:

•	Employee entitlements of $530,157 on a going concern basis and $1,104,019 in circumstances where the Company is wound up and employees are terminated effective from 16 April 2021;
•	Unrelated unsecured creditors of $2,371,104 which includes a debt of $1,997,002 to the ATO;
•	Related unsecured creditors of $14,427,038 which includes $13,811,280 as owing to the Company’s holding entity, Bluechain Payments;
Unsecured loans provided by individual shareholders of Bluechain Payments totalling $2,104,256	
	A summary of the assets and liabilities position of the Company is provided below:

High ($)	
Low ($)	

Total Assets 	
2,598,996	
753,277	

Total Liabilities  	
(20,006,417)	
(20,006,417)	

Net Assets/(Deficiency) 	
(17,407,421)	
(19,253,140)	

		
Solvency position	I have determined that the Company may have traded whilst insolvent from as early as 31 March 2019 (if not earlier).

A summary of the key factors resulting in my determination is as follows:

•	The Company had only began to generate material trading revenue during the current financial year which was insufficient to meet its operating expenses. The Company had effectively ceased to generate any material revenue since August 2020 to the date of my appointment;
•	The Company aged payables indicates the majority of debts unpaid were in excess of three (3) months;
•	The Company was reliant on capital raising activities from its holding entity and related/third-party loans to fund its R&D activities which were subsequently repaid following receipt of its R&D tax incentive. The Company had loans outstanding to these related / third-parties of c. $2.1m as at the date of the Provisional Liquidation;
•	The Company has no liquid assets except for its cash at bank to fund ongoing trading liabilities which would have been exhausted in approximately one (1) to two (2) months based on its operating expenses averaging $450,000 per month;
•	Based on a cash flow test, the Company did not hold sufficient cash at bank to meet its current liabilities at any point from March 2019 onwards;
•	Although the Group’s last capital raising activity was in March 2020 for $7.5m, the Company had insufficient working capital prior and throughout this period leading to the date of the Provisional Liquidation;
•	The Company’s holding company, Bluechain Payments was unlikely to be in a position to proceed with the Tavas Transaction as the transaction was dependent upon securing 66% support of shareholders, however, the major shareholder (who holds 34.16% of the shareholding) has noted that it would not support the transaction and has confirmed that this position remains unchanged. Furthermore, there was no guarantee that any immediate or short term funding benefit would flow to the Company to allow it to continue to trade in light of its overall financial position; and	
		
Likely return to creditors if the Company is wound up	Please refer to the summary below for the estimated return to creditors in both High and Low Liquidation scenarios.

	
High 	
Low	

Secured Creditors	
N/A	
N/A	

Priority Creditors	
86.2 cents in the $	
58.4 cents in the $	

Unsecured Creditors 	
Nil	
Nil	

26	While the satisfaction of the criteria in s 436B(1) solely depends upon the views of the provisional liquidators, it is to be noted that in his expert report dated 6 April 2021, filed on behalf of Payments, Mr McDermott expresses his opinion that the company was insolvent as at 17 February 2021.
27	In circumstances where the provisional liquidators are proposed to be appointed as administrators, such an appointment may only be made pursuant to s 436B(2) if at a meeting of the company’s creditors, the creditors pass a resolution approving the appointment or, if the appointment is made with the leave of the court.
28	Mr Lawrence and his fellow provisional liquidator, Mr Albarran, have given their consent to be appointed administrators of the company should Court grant leave pursuant to s 436B(2)(g) of the Act.
29	The purpose of seeking the appointment of the provisional liquidators as administrators is to allow for the preparation and subsequent consideration by the creditors of the company of a proposed DOCA to be brought forward on behalf of Payments.  The key elements of the proposed DOCA were outlined by Mr Galvin as involving the contribution of $886,000 in addition to cash at bank of $753,277 (less the costs and expenses of the provisional liquidators, estimated by Payments to be in the order of $500,000), together with the research and development tax incentive (‘R&D Allowance’) of around $1.8 million which it is anticipated will be permitted by the Australian Tax Office (‘ATO’) to be offset against existing tax liabilities.
30	It was submitted on behalf of Payments that on the best case scenario the proposed DOCA will return 100 cents in the dollar to ordinary unsecured creditors.  That best case outcome is dependent on a number of matters including the amount of the provisional liquidators’ costs and the realisation of the assumption that the ATO agrees to set off the R&D Allowance against the tax liabilities of the company.
31	The affidavit of Mr Lawrence includes a statement of his agreement with views expressed by Mr McDermott that a DOCA is conceptually feasible to be proposed to creditors of the company.  In the time available Mr Lawrence has not been able to undertake a comprehensive review of the appropriateness of the proposed DOCA, and whether it is in the best interests of the creditors to accept such a proposal.  Nonetheless it is his observation that subject to confirmation of a number of queries to which he refers in his affidavit, it is his preliminary view the proposed terms of the DOCA are likely viable and that it could be in the best interests of the creditors to accept such a proposal.
32	It is Mr Lawrence’s evidence that should the provisional liquidators be appointed as administrators and a proposed DOCA be submitted as anticipated that the only major task outstanding in the administration appointment is the consideration of the DOCA and reporting to creditors of the comparative returns as against a liquidation scenario.  The DOCA would then need to be considered and voted on by the creditors.
33	Mr Lawrence can see no reason why the major meeting of creditors could not be convened and held within 20 business days of the appointment of the provisional liquidators as administrators in accordance with s 539A(5)(b) of the Act.  That is so due to the existing investigation and reporting work that has already been completed in the provisional liquidation.
34	It is important to record that the evidence filed on behalf the Payments seeks to attack the independence of the provisional liquidators based upon dealings asserted to have taken place between them or their firm, Hall Chadwick, and Mr Winnett and earlier business relationships.  Those allegations are denied and the criticisms made are strongly contested by Mr Lawrence.
35	In an affidavit filed on behalf of Payments, Mr Russell expressed his opinion that the provisional liquidators are unfit to be appointed by the Court as liquidators or as administrators.  Those allegations are denied on affidavit by Mr Lawrence.  In particular, the criticism by Mr Russell that Mr Lawrence has not accounted correctly for the going concern value of Bluechain due to the Tavas transaction is strongly refuted.  Bluechain is not a direct party to the Tavas transaction which involves the proposed sale and transfer of shares in Payments.  That transaction is incomplete and appears unable to be completed because it requires a special majority of Payments shareholders for it to proceed.  Unless Glencurr alters its approach to the proposed Tavas transaction, no such majority can be achieved.
36	The provisional liquidators issued a Declaration of Independence, Relevant Relationships and Indemnities (‘DIRRI’) dated 22 February 2021 and a replacement updated DIRRI dated 13 April 2021 following the service of evidence on behalf of Payments.  The provisional liquidators contend that no conflict of interest is demonstrated.
37	Neither Mr Albarran nor Mr Lawrence has been involved in work carried out by Hall Chadwick for Mr Winnett or entities associated with him within the last two years.  That is with the exception of matters relating to this proceeding for which initial contact was made with Mr Lawrence on 12 January 2021.  Both Mr Albarran and Mr Lawrence have many years’ experience as insolvency practitioners.  Mr Albarran‘s experience includes more than 800 appointments to act as an external administrator to corporations over the last ten years.
38	It was accepted by all counsel that the allegations against the provisional liquidators which are strongly denied by them do not stand in the way of the proposed order sought by consent for the appointment of the provisional liquidators as administrators.  Agreement of all parties that an order appointing Mr Albarran and Mr Lawrence as administrators includes agreement on the part of Payments which otherwise, as its primary position, seeks the discharge of the 17 February Orders made ex parte.  It is Payments whose evidence in support of its primary position includes the affidavit of Mr Russell.
39	The evidence establishes that if an order is made as is sought by the consent of all relevant parties, two very experienced insolvency practitioners will be appointed as the administrators of Bluechain.  Those experienced insolvency practitioners have completed a detailed and comprehensive report into the solvency of the company and related issues in accordance with the 17 February Orders.  There is very little for them to do as administrators.  Although there are allegations made against them those allegations are denied and they have not been tested.  I do not consider that the untested and contested allegations stand in the way of the Court making the order sought by consent in the proper exercise of the discretion conferred by s 436B(2)(g).  That is particularly the case when the party making those untested allegations submits in favour of the order sought.
40	In circumstances where the provisional liquidators are very familiar with the business of the company and have prepared the Report to the Court in relation to the company they are extremely well-placed to act as its administrators.
41	As is the evidence of Mr Lawrence, it is not easy to see how a DOCA could be put before the creditors without the Court making orders in the nature of those now sought by consent.
42	I accept that is in the interests of the company and its creditors that the opportunity for the second defendant, Payments, to put forward a DOCA should be facilitated.  It is in the interests of creditors that there is as little further expense and delay as is possible in the preparation of a DOCA and in providing it for consideration by the creditors.  To appoint fresh administrators without the knowledge and background in the business and affairs of the company as is already held by the provisional liquidators could only increase expense and cause delay.
43	In the exercise of the discretion inherent in s 436B(2), for the reasons stated, I propose to make the substantive orders sought by consent appointing the provisional liquidators as administrators.
44	As earlier mentioned there are two matters of substance that separate the parties.  The first concerns the contention of Payments that the order pursuant to s 436B(2)(g) should be made on condition that the administrators do not sell the assets of the company or enter into a tender process with respect to those assets during the administration.  The second concerns whether, upon the appointment of Mr Albarran and Mr Lawrence as administrators, the provisional liquidation should be terminated.
Should the appointment be conditional so as to prevent a sale or tender process?
45	At the outset of the hearing Mr Galvin on behalf of Payments informed the Court that his client had understood such a condition was agreed by all parties.  As it happened, that is not the case.  Mr Fary submitted that to impose such a condition would unduly fetter the administrators in the discharge of their statutory role and functions.
46	In the ordinary case I would agree with the submission advanced on behalf of the provisional liquidators, but not here where the express purpose of the appointment is to enable Payments to put forward a DOCA which, on the best case scenario, would see the unsecured creditors paid 100 cents in the  dollar.  The evidence of Mr Lawrence is that he considers the appointment of an administrator to the company for the purpose of proposing a DOCA is likely an appropriate outcome for the company.
47	If such a proposal is in fact put to the creditors, there would seem to be no real need or benefit to creditors from the expenditure of otherwise limited funds on a sale or tender process.  Such work and the expenditure required would be unnecessary.
48	If the intended DOCA does not materialise, or, if it does, and it is materially different from that which has been under discussion, the restriction on the administrator’s powers can be revisited.  Liberty to apply is reserved, not only to the parties, but also to the provisional liquidators/administrators.  As matters presently stand there is nothing to suggest that the proposed DOCA will not be forthcoming.
Should the appointment of the administrators be accompanied by the termination of the provisional liquidation?
49	I accept the submission on behalf of Payments that it is appropriate to make an order that upon the appointment of the administrators, the provisional liquidation be terminated.
50	It is important to bear in mind the usual purpose of such an appointment, namely to preserve the assets of the company and the status quo in relation to its affairs, pending a final determination of whether the company should be wound up.
51	In Grace v Grace, Brereton J made a series of observations concerning the appointment of a provisional liquidator, relevant parts of which are as follows:
26	A provisional liquidator is not automatically appointed by the court for the mere asking, even where the company itself is the applicant although an appointment is more readily made where the company is the applicant, since it is implicit in the application that the Board has concluded that such appointment is necessary or beneficial, the applicant company must at least show that the application is for a bona fide purpose.
27	The power to appoint a provisional liquidator is not limited, and the circumstances which may constitute sufficient ground under which a provisional liquidator may be appointed are infinite, and in an appropriate case include public interest considerations, which may operate in favour of or against the making of an appointment in particular circumstances. As the primary duty of a provisional liquidator is to preserve the status quo, so as to ensure the least possible harm to all concerned and to enable the court to decide, after a proper final hearing, whether the company should be wound up, the usual, although not the only, purpose for which a provisional liquidator is appointed is to preserve the assets of the company and the status quo in relation to its affairs, pending a final determination of whether the company should be wound up.
28	The appointment of a provisional liquidator pending determination of a winding up application is a drastic intrusion into the affairs of the company and is not to be contemplated if other measures would be adequate to preserve the status. While the appointment of a provisional liquidator may be appropriate in a case involving a dispute between parties to a joint venture, possibly sufficient to give rise to a deadlock in the operations of the companies employed in that venture, where all other expedients have failed, that course is not lightly to be adopted.
29	Thus, while the circumstances in which a provisional liquidator will be appointed are infinite and there is a wide discretion, such an appointment involves the taking of a serious step and requires the exercise of very great care, and the decision whether the court should take the serious step of awarding a judicial remedy of a wholly extraordinary nature by way of drastic intrusion into the affairs of the defendants, is usually approached in a manner broadly analogous to that applicable to other forms of interim preservation, such as an application for the appointment of an interim receiver or an interlocutory injunction - by reference to two main questions: first, whether there are good prospects of the plaintiff obtaining a winding up order; and, secondly, whether, having regard to the whole of the circumstances and in particular the measures already in place, the assets of the company are in jeopardy such that they need to be put under the protection of a provisional liquidator pending trial.
30	First, an applicant must establish that there is a reasonable prospect that a winding-up order will be made. A provisional liquidator may only be appointed after an application has regularly been made disclosing a good ground for winding up, and while the ultimate fate of the application must be left to the court finally hearing the matter, a provisional liquidator will not usually be appointed unless it appears that a winding up order is likely, which presupposes that there should be adequate evidence adduced on an application for appointment of a provisional liquidator to show that a winding up is, in the absence of material to the contrary, likely.
…
35	Although there is some controversy as to whether an undertaking as to damages may be required, in New South Wales the view prevails that such an undertaking can be required, and in practice it routinely is.
52	The primary purpose of the appointment of a provisional liquidator, to secure the assets and undertaking of the company has been achieved.  The provisional liquidators have reported to the Court as contemplated by the 17 February Orders.  No undertaking as to  damages accompanied the appointment of the provisional liquidators.
53	In proposing that the appointment as provisional liquidators remain in place, Mr Fary referred to the prospect that the creditors might resolve to terminate the winding up and to place the company back into the hands of the directors.  If that were to occur, that would not mean that the prospect of the company being wound up on the application of the plaintiff has been removed.  The winding up application remains on foot.
54	Mr Somerville on behalf of the plaintiffs submitted that the provisional liquidators should remain in place until after the date of circulation of the Administrators’ Report pursuant to s 439A of the Act.  He referred in support of that submission to issues of concern relating to corporate governance upon which the provisional liquidators have reported and as to $654,960.84 processed from the bank account of the Company on the same day as the appointment of the provisional liquidators.
55	Mr Galvin submitted that the continued presence of the provisional liquidators would, on his instructions, hamper the raising of funds for the proposed DOCA.  There is no affidavit evidence available to substantiate that submission.  However, I accept Mr Galvin’s submission that the coincidence of dates of appointment as administrators and removal as provisional liquidators was not a matter that his client or those acting on its behalf believed would be in contest at this hearing.
56	On appointment, administrators are to assume control of the affairs of the company, its business, property and affairs  as required by s 437A(1)(a).  The object of Part 5.3A of the Act is to maximise the chances of the company continuing in existence, or if that is not possible, to provide a better return for the company’s creditors and members than would result from an immediate winding up.
57	There is no practical reason why, upon their appointment as administrators, Mr Lawrence and Mr Albarran should also continue in their current role as provisional liquidators.
58	There are no circumstances that would warrant the continued presence of Mr Albarran and Mr Lawrence in their current role as provisional liquidators.  If they should be removed as administrators and replaced by other persons, as was raised as a possibility by Mr Galvin, that would not provide a reason for a fresh appointment of provisional liquidators.  That possibility, to be strongly discouraged on the grounds of cost and the clear familiarity of the existing incumbents, does not support the termination of the provisional liquidation being delayed.  Any replacement administrators would be subject to the same duties and responsibilities under Part 5.3A of the Act as Mr Albarran and Mr Lawrence.
59	I accept that not only may the provisional liquidators be removed following their appointment as administrators, the proposed DOCA may not materialise.  None of these things can be predicted.  I do not consider speculation about what may occur in the future is a sound reason to continue the appointment of Mr Lawrence and Mr Albarran in dual roles.
60	It is to be remembered that the appointment of provisional liquidators is not to be contemplated if other measures would adequately preserve the status quo.  Here the status quo will be preserved by the administrators acting within the statutory framework in Part 5.3A.  There is no reason to continue the provisional liquidation.
61	I accept, as discussed in argument, that it is desirable there be a directions hearing scheduled on a date shortly after the date of circulation of the administrators’ report pursuant to s 439A of the Act.  If any party considers the circumstances at that time warrant the fresh appointment of provisional liquidators, that party can apply and the application will be determined on the evidence and in the circumstances then prevailing.  If such an application were to be made, there would be nothing to prevent the previous provisional liquidators, Mr Lawrence and Mr Albarran, who have familiarity with the company and the issues that it confronts, being nominated again for the same role.
62	Providing for that possibility should not be seen as an indication that circumstances warranting such an application are thought likely to arise in the future.  If all goes as anticipated by the parties and by the provisional liquidators, the most likely future outcome will be the approval of a DOCA.
63	Fixing the matter for directions on 28 May 2021 will enable any issues live at that time to be ventilated before the Court before the second meeting of creditors.