Court orders AIM to pay costs, declines to disturb Wiluna administrators’ indemnity

The Supreme Court of Western Australia has ordered AIM Mining Corporation to pay the costs of its discontinued bid to terminate Wiluna Mining Corporation’s deed of company arrangement, while declining to disturb the former Deed Administrators’ statutory indemnity following the company’s successful exit from administration.

Last week, we wrote about how Wiluna formally exited its DOCA, paid $39 million into the Wiluna Creditors’ Trust, reconstituted its board, and narrowed regulatory risk as it positioned itself for a potential ASX relisting. The Court has now ruled on the final outstanding courtroom contest that accompanied that exit, determining who bears the costs of the failed attempt to derail the deed.

In reasons delivered on 10 February, Justice Howard addressed competing costs applications arising from the final phase of the restructuring. The substantive issues had already been resolved in December, when the Court granted rectification relief validating amendments to the DOCA and enabling its implementation.

The first dispute concerned the Deed Administrators’ earlier application for directions and rectification under the Corporations Act and Insolvency Practice Schedule. Although rectification relief was granted, not all of the directions originally proposed were ultimately pursued or made. AIM and former executive chair Milan Jerkovic argued that this limited success justified depriving the administrators of their indemnity from company assets.

Justice Howard rejected that submission, holding that the threshold for interfering with a voluntary administrator’s statutory indemnity was not met. The Court declined to exercise supervisory powers to limit the indemnity or order an inquiry, noting that Wiluna’s newly constituted independent board did not support curtailing the administrators’ protections.

The second dispute flowed from AIM’s own application to terminate the DOCA and convene a creditors’ meeting to consider an AIM-backed alternative deed. That application was discontinued shortly before hearing, after confirmation that the DOCA’s cash sweep mechanism would be implemented to fund creditor payments in full. Applying orthodox costs principles, Justice Howard held that a party who discontinues bears the onus of demonstrating why the usual rule should not apply. AIM failed to displace that rule and was ordered to pay the administrators’ and companies’ costs of the proceeding.

The Court acknowledged the compressed timetable and complexity of the matter, permitting certain scale limits to be exceeded under the Legal Profession Uniform Law Application Act 2022 (WA), but declined to approve uplifts to counsel’s hourly rates beyond scale.

Read the decision here.

Paul Walker of Shoreline Chambers (instructed by King & Wood Mallesons) represented the administrators (Michael Ryan, Kathryn Warwick, Daniel Woodhouse and Ian Francis of FTI Consulting).

Brendon Roberts KC of Bar Chambers and Stefan Tomasich of Quayside Chambers (instructed by Lavan) acted for AIM Mining Corporation Limited, while A L Mason (instructed by Wotton Kearney Lawyers) acted for Milan Jerkovic.