acn 153 096 069 land). · 14/10/2015 · can claim against a liquidator’s recoveries from...

PPB Pty Ltd trading as PPB Advisory ABN 67 972 164 718Liability limited by a scheme approved under Professional Standards Legislation

Level 21, 181 William StreetMelbourne VIC 3000t: +61 3 9269 4000f: +61 3 9269 4099www.ppbadvisory.com

Our ref: 2094953

14 October 2015

Dear Sir/Madam

Midland Hwy Pty Ltd(Administrators Appointed) (the Company)ACN 153 096 069

This letter contains important information from the Administrators of Midland Hwy Pty Ltd(Administrators Appointed) for the Company’s creditors (including Option holders and purchasers ofland).

We recommend that Creditors resolve to wind up Midland (ie place it in liquidation) because:

We are unable to quantify the likely return to creditors if Midland is wound up (ie placed in liquidation) and,hence to determine whether the Bilkurra Deed Proposal will provide a greater return to creditors than ifMidland were wound up. That said, the proposed Deed Fund is insufficient to pay any amount to:

ordinary unsecured trade creditors who have not already submitted a proof of debt to theAdministrators prior to execution of the Deed or

the Option Holders.

This is unfairly prejudicial and can be a ground to set aside a deed of company arrangement.

The Bilkurra Deed Proposal is silent on the question of control of the Company if a deed is executed (andeventually effectuated).

Our investigations to date (detailed in this report and summarised below) suggest that there are manyissues which require further investigation by a liquidator and we are concerned that the Deed proposal isan attempt by the individuals behind the proposal to avoid the scrutiny of a liquidator’s investigations. Thiscan be enough for a Court to set aside a deed of company arrangement. More information about the DeedProposal is at Section 9 of the Report.

Midland received c$24m from Option Holders and has spent those funds without completing its obligationsunder the Option Deeds. Only c$1.7m of the c$24m appears to have been applied specifically for planningpermit and development purposes. Midland is without funds to repay the c$24m Option Fees, despiteMidland being obliged to repay them to Option Holders, as creditors of Midland under cl 15.3 of eachOption Deed, since June 2013.

We have identified up to c$22.3m of payments from Midland’s bank accounts that are likely to be voidabletransactions or other potential claims which should be investigated by a liquidator:

c$7.6m – in payments unrelated to the development of the Land, including $7.2m to companiesassociated with Midland’s lawyers (the majority of payments are without documentation)

c$2m - paid for which Midland appears not to have received any benefit

c$11.9m – for potential ‘above market rate’ payments, including:

o $7.3m - commission paid out of Option Holder payment proceeds

o $4.6m - fees paid to PMA, whose sole director and shareholder appears to be a Midland shadowdirector/de facto director.

c$761k – miscellaneous payments requiring further investigation.

Midland has spent the entire proceeds of the Option Fees. We do not know if Bilkurra, the Land owner,has sufficient financial resources to complete the Land development. Bilkurra’s former director is Mr BenSkinner, a principal of Midland’s lawyers, Evans Ellis. Mr Skinner is the sole shareholder of GBC which, inturn, is Bilkurra’s sole shareholder.

A Liquidator can investigate in greater detail the affairs of the Company and examine Relevant Parties aspart of the investigation and asset recovery process, eg the various voidable transactions and otherpayments to determine whether they should be set aside/recovered by a liquidator, albeit subject to fundingrequirements being met by regulators, creditors or litigation funders.

A deed administrator does not have the power to investigate and potentially set aside these transactionsand payments.

If a liquidator is successful in recovering funds, those funds will be available to meet creditor claims, afterpayment of the liquidators’ fees and expenses.

Midland has never owned the Land which was to be developed as Acacia Banks/Hermitage. That Landwas owned by Bilkurra at the time Option Holders entered into their agreements with Midland. Midland andBilkurra purported to enter into an agreement assigning the Option Holders’ interests to Bilkurra. Thatpurported assignment was ineffective and did not give the Option Holders an interest in Bilkurra’s Land.The Administrators have since lodged a caveat over the Land to protect Investor and Option Holders’interests for money paid by them to Midland.

Bilkurra asserts that the caveat the Administrators lodged on the Land may impact Bilkurra’s ability to raisefinance for the development. We consider that the caveat should remain on the Land to protect Investorand Option Holders’ interests – the ‘equity’ in the land arises, in part, from the $2m Midland paid to Bilkurrafrom Option Fee proceeds.

If Midland is wound up, Option Holders and Purchasers of Land:

will not be precluded from seeking ‘fresh’ arrangements with Bilkurra

can claim against a liquidator’s recoveries from voidable transactions and other claims.

Mr Grochowski, the director of the project management company (PMA) appears to have acted as ashadow director/de facto director of Midland, authorising payment of c$24m from Midland’s bank accounts,including c$22.3m in potential voidable transactions and other claims.

Mr Grochowski appears to have breached several provisions of the Act. He has been banned by ASICsince June 2012 from providing financial services (refer link ASIC Media Release).

The Bilkurra Deed Proposal has been provided to us by EE, the former solicitors for the Company who areacting for Bilkurra. EE has refused to identify which individuals are providing the instructions to them onBilkurra’s behalf. We suspect that someone other than the director of Bilkurra (eg Mr Grochowski orothers) is providing instructions.

Midland was likely insolvent from March 2012 and potentially as early as 7 September 2011.

Deposits paid by Purchasers for off-the-plan land sales, rather than Option Deeds, are held in the EEL trustaccount, pending completion of the off-the–plan sale contracts. Until then, Purchasers are contingentcreditors of Midland.

The Bilkurra Deed Proposal requires further clarification on how it is proposed ordinary unsecured tradecreditors’ claims will be dealt with and how Bilkurra will deal with the rights of Option Holders andpurchasers under off- the- plan contracts. This detail may be provided before the Second Meeting.

Our completed report includes:

the findings of our investigations

details of the Second Creditors Meeting.

Should you have any enquiries please contact the Midland Hwy Information Line on 1300 853 598, or email yourquestions to [email protected].

Yours faithfully

Nicholas Martin and Craig CrosbieAdministrators

Date of appointment: 5 August 2015Contact: Link Market ServicesTelephone number: +1300 853 598Email: [email protected]

http://asic.gov.au/about-asic/media-centre/find-a-media-release/2012-releases/12-125mr-asic-bans-melbourne-man-from-providing-financial-services/

mailto:[email protected]


Administrators’supplementary report

Section 439A of theCorporations Act 2001

14 October 2015

Administrators:Nicholas Martin and Craig Crosbie

Midland Hwy Pty Ltd(Administrators Appointed)

ACN 153 096 069

(the Company)

PPB Pty Limited trading as PPB Advisory ABN 67 972 164 718Liability limited by a scheme approved under Professional Standards LegislationPPB Pty Ltd has associated but independent entities and partnerships

Table of contents

ii

1. Disclaimer 1

2. Executive summary 2

2.1 Conduct of administration 3

2.2 Second meeting of creditors 4

2.3 Deed of Company Arrangement 4

2.4 Remuneration 4

3. Introduction 5

3.1 Appointment information 5

3.2 Declaration of Independence, Relevant Relationships and Indemnities 5

3.3 Report’s purpose 5

3.4 Purpose of second meeting 5

3.5 Second meeting convening period 6

3.6 Second meeting details 6

3.7 Meeting registration 7

3.8 Committee of Inspection (COI) 7

3.9 Further information 7

4. Company background 8

4.1 Company overview and key events 8

4.2 Statutory information 9

4.3 Creditors’ claims 10

5. Conduct of administration 13

5.1 First meeting of creditors 13

5.2 Work undertaken to date 13

6. Financial background 15

6.1 Funds Flow summary to January 2015 (from EEL trust account to the Project Bank Accounts)16

6.2 Director’s Report as to Affairs (RATA) 19

7. Investigations 20

7.1 Director’s explanation for the Company’s difficulties 21

7.2 Administrators’ opinion of the reasons for the Company’s difficulties 21

7.3 Was the Company operating an unregistered managed investment scheme (MIS)? 22

7.4 Land development – progress update 22

7.5 Planning permit process – next steps 25

7.6 Insolvency 26

7.7 Potential legal/class actions 28

7.8 Outstanding or previous winding up applications 28

7.9 Books and records 28

8. Liquidation recoveries and offences 29

8.1 Voidable transactions and other potential claims 29

8.2 Insolvent trading 34

8.3 Offences 35

8.4 Directors and officers insurance policy 36

8.5 Director’s personal financial position 36

8.6 Public examinations 36

8.7 Reporting of offences to ASIC 37

Table of contents

iii

8.8 Costs of investigations and pursuing recovery actions 38

8.9 Funding investigations and recoveries 38

9. Deed of Company Arrangement (Deed) 39

9.1 Key features 39

9.2 Deed general information 42

10. Estimated return to creditors 43

11. Administrators’ recommendation 45

11.1 Liquidation 45

11.2 Deed 45

11.3 Administration to end 46

12. Enquiries 47

iv

Appendix

Appointment of Proxy, Proof of Debt or Claim Form – Form 532A.

Remuneration report dated 14 October 2015B.

Declaration of Independence, Relevant Relationships and IndemnitiesC.

Notice of meeting of creditorsD.

ASIC Publication: Insolvency information for directors, employees, creditors andE.shareholders

ARITA Publication: Creditor information sheet: Offences, recoverable transactions andF.insolvent trading

Process for applying Option FeesG.

Deed proposal for the CompanyH.

List of relevant parties a liquidator may consider examiningI.

v

Glossary

Abbreviations Definitions

Act Corporations Act 2001 (Cth)

Administrators Nicholas Martin and Craig Crosbie of PPB Advisory as Administrators

AEDST Australian Eastern Daylight Savings Time

ARITA Australian Restructuring Insolvency and Turnaround Association (formerly theInsolvency Practitioners Association of Australia).

ASIC Australian Securities and Investments Commission

ATO Australian Taxation Office

Bilkurra Bilkurra Investments Pty Ltd ACN 097 182 182

Bilkurra DeedProposal

Deed proposal issued by EEL for Bilkurra dated 12 October. Copy attached atAppendix H

Brookfield Riverside Brookfield Riverside Pty Ltd ACN 159 111 047

CoB City of Greater Bendigo

COC Committee of Creditors

Code ARITA Code of Professional Practice

COI Committee of Inspection

Company or Midland Midland Hwy Pty Ltd (Administrators Appointed) ACN 153 096 069

D&O Policy Directors and Officers Insurance Policy

Deed Deed of Company Arrangement

Deed of Assignment Deed of Assignment and Consent dated 28 June 2013 entered into between theCompany and Bilkurra

DIRRI Declaration of Independence, Relevant Relationships and Indemnities, pursuant tos436DA of the Act and Code.

EEL Evans Ellis Lawyers

Farming Zone Lot Lot 1 on Title Plan 5002H (volume 10270 folio 178)

First Meeting First meeting of creditors of the Company held on 14 July 2015

Foscari Foscari Holdings Pty Ltd ACN 158 434 578

GBC Greater Bendigo Consolidated Pty Ltd ACN 164 194 932

Gillies Gillies Road Pty Ltd ACN 163 866 724

Mr Grochowski Mr Michael Grochowski

Head Contracts Contracts for sale of land between Bilkurra and PMA (volume 1027 folio 178 andvolume 1027 folio 179) dated 18 October 2011. Settlement due on the earlier of 2years from the day of sale or 30 days after the purchaser notified the vendor.

Investors Holders of Option Deeds and/or off-the-plan land sale contracts

John Wood or Mr JWood

John Wood is the former director of Midland who died in July 2014

k Thousand

Land Volume 10270 folio 178 and volume 10270 folio 179 of TP 5002H having frontageto Midland Highway, Sherwood Road and Wakeman Road in Bagshot, (nearHuntley/Bendigo) Victoria.

Known as “Hermitage”

Formerly known as “Acacia Banks”

vi

Abbreviations Definitions

m Million

MIS Managed Investment Scheme

Option Deeds Deed of Options to Purchase

Option Fees Fees paid by Option Holders (deposits and instalments)

Option Holders Holders of Option Deeds

PMA Project Management (Aust) Pty Ltd ACN 151 902 126 (Mr M Grochowski beingthe sole director and shareholder)

POD Proof of debt form

PPSA Personal Property Security Act 2009 (Cth)

PPSR Personal Property Securities Register – established under the PPSA for theregistration of security interests

PreviousAdministrators

Messrs David Ross and Richard Albarran from Hall Chadwick

Previous Report Report dated 28 July 2015 issued by the Previous Administrators pursuant tos439A of the Act

Property Choice Property Choice Pty Ltd

Project Manager Project manager for the Company – Michael Grochowski

Project BankAccounts

Project Bank Accounts for the Company managed by Mr Grochowski as the onlyauthorised signatory

Purchasers Holders of off-the-plan land sale contracts

RATA Report As To Affairs

Referral Agreement Referral agreement entered into by the Company and David Aron Bracka on 1March 2012

Relevant Parties Directors and shareholders of companies considered for public examination listedin Appendix I

Report orSupplementaryReport

This report, prepared pursuant to s439A of the Act

Russ Wood or Mr RWood

Russell Wood is John Wood’s son, the executor of his estate and the currentdirector of Midland

Second Meeting Meeting held pursuant to s439A of the Act convened for 21 October 2015 at 10amAEDST where creditors determine the future of the Company

Share Option Deed Deed of Option to Purchase Shares dated 28 June 2013 between Bilkurra,shareholders of Bilkurra, GBC, the Company and PMA

Mr Skinner Mr Benjamin (Ben) Skinner

Subject Site Lot 2 on Title Plan 5002H (volume 10270 folio 179)

Unrelated Land Lots 1, 2 and 3 165 Midland Hwy Bagshot (Volume 11092 Folio 397, 398 and 399)to the east of the Land

1PPB Advisory – Report to creditors

1. Disclaimer

In reviewing this Report, creditors should note:

This Report is based upon our preliminary investigations to date. Any additional materialissues that are identified subsequent to issuing this Report may be the subject of a furtherwritten report and/or tabled at the Second Meeting.

The contents of this Report are based on information obtained from the Company’s books andrecords and our investigations and enquiries of the director, officers, ASIC and other parties.

The statements and opinions given in this Report are given in good faith and in the belief thatsuch statements and opinions are not false or misleading. Except where otherwise stated, wereserve the right to alter any conclusions reached on the basis of any amended or additionalinformation which may be provided to us between the date of this Report and the date of theSecond Meeting.

In considering the options available to creditors and formulating our recommendation, theAdministrators have necessarily made forecasts of asset realisations and total creditor claims.These forecasts and estimates may change as investigation progress and claims are receivedfrom creditors. While the forecasts and estimates are based on the Administrators’ bestassessment in the circumstances, creditors should note that the eventual outcome forcreditors may differ from that estimated in this Report.

Neither the Administrators, PPB Advisory nor any member or employee of the firm isresponsible in any way whatsoever to any person in respect of any errors in this Reportarising from incorrect information provided to us.

The Administrators do not assume or accept any responsibility for any liability or losssustained by any creditor or any other party as a result of the circulation, publication,reproduction or any use of the information presented in this Report.

This Report is not for general circulation, publication, reproduction or any use other than toassist creditors in evaluating their position as creditors of the Company and must not bedisclosed without the prior approval of the Administrators.

Creditors should consider seeking their own independent legal advice as to their rights andthe options available to them at the Second Meeting.


2. Executive summary

We recommend that Creditors resolve to wind up Midland (ie place it in liquidation) because:

We are unable to quantify the likely return to creditors if Midland is wound up (ie placed inliquidation) and, hence to determine whether the Bilkurra Deed Proposal will provide a greaterreturn to creditors than if Midland were wound up. That said, the proposed Deed Fund isinsufficient to pay any amount to:

ordinary unsecured trade creditors who have not already submitted a proof of debt tothe Administrators prior to execution of the Deed or

the Option Holders.

This is unfairly prejudicial and can be a ground to set aside a deed of company arrangement.

The Bilkurra Deed Proposal is silent on the question of control of the Company if a deed isexecuted (and eventually effectuated).

Our investigations to date (detailed in this report and summarised below) suggest that thereare many issues which require further investigation by a liquidator and we are concerned thatthe Deed proposal is an attempt by the individuals behind the proposal to avoid the scrutiny ofa liquidator’s investigations. This can be enough for a Court to set aside a deed of companyarrangement. More information about the Deed Proposal is at Section 9 of the Report.

Midland received c$24m from Option Holders and has spent those funds without completingits obligations under the Option Deeds. Only c$1.7m of the c$24m appears to have beenapplied specifically for planning permit and development purposes. Midland is without fundsto repay the c$24m Option Fees, despite Midland being obliged to repay them to OptionHolders, as creditors of Midland under cl 15.3 of each Option Deed, since June 2013.

We have identified up to c$22.3m of payments from Midland’s bank accounts that are likely tobe voidable transactions or other potential claims which should be investigated by a liquidator:

c$7.6m – in payments unrelated to the development of the Land, including $7.2m tocompanies associated with Midland’s lawyers (the majority of payments are withoutdocumentation)



o $7.3m - commission paid out of Option Holder payment proceeds

o $4.6m - fees paid to PMA, whose sole director and shareholder appears to be aMidland shadow director/de facto director.


Midland has spent the entire proceeds of the Option Fees. We do not know if Bilkurra, theLand owner, has sufficient financial resources to complete the Land development. Bilkurra’sformer director is Mr Ben Skinner, a principal of Midland’s lawyers, Evans Ellis. Mr Skinner isthe sole shareholder of GBC which, in turn, is Bilkurra’s sole shareholder.

A Liquidator can investigate in greater detail the affairs of the Company and examineRelevant Parties as part of the investigation and asset recovery process, eg the variousvoidable transactions and other payments to determine whether they should be setaside/recovered by a liquidator, albeit subject to funding requirements being met byregulators, creditors or litigation funders.

A deed administrator does not have the power to investigate and potentially set aside thesetransactions and payments.

If a liquidator is successful in recovering funds, those funds will be available to meet creditorclaims, after payment of the liquidators’ fees and expenses.


Midland has never owned the Land which was to be developed as Acacia Banks/Hermitage.That Land was owned by Bilkurra at the time Option Holders entered into their agreementswith Midland. Midland and Bilkurra purported to enter into an agreement assigning the OptionHolders’ interests to Bilkurra. That purported assignment was ineffective and did not give theOption Holders an interest in Bilkurra’s Land. The Administrators have since lodged a caveatover the Land to protect Investor and Option Holders’ interests for money paid by them toMidland.

Bilkurra asserts that the caveat the Administrators lodged on the Land may impact Bilkurra’sability to raise finance for the development. We consider that the caveat should remain on theLand to protect Investor and Option Holders’ interests – the ‘equity’ in the land arises, in part,from the $2m Midland paid to Bilkurra from Option Fee proceeds.

If Midland is wound up, Option Holders and Purchasers of Land:

will not be precluded from seeking ‘fresh’ arrangements with Bilkurra

can claim against a liquidator’s recoveries from voidable transactions and other claims.

Mr Grochowski, the director of the project management company (PMA) appears to haveacted as a shadow director/de facto director of Midland, authorising payment of c$24m fromMidland’s bank accounts, including c$22.3m in potential voidable transactions and otherclaims.

Mr Grochowski appears to have breached several provisions of the Act. He has been bannedby ASIC since June 2012 from providing financial services (refer link ASIC Media Release).

The Bilkurra Deed Proposal has been provided to us by EE, the former solicitors for theCompany who are acting for Bilkurra. EE has refused to identify which individuals areproviding the instructions to them on Bilkurra’s behalf. We suspect that someone other thanthe director of Bilkurra (eg Mr Grochowski or others) is providing instructions.

Midland was likely insolvent from March 2012 and potentially as early as 7 September 2011.

Deposits paid by Purchasers for off-the-plan land sales, rather than Option Deeds, are held inthe EEL trust account, pending completion of the off-the–plan sale contracts. Until then,Purchasers are contingent creditors of Midland.

The Bilkurra Deed Proposal requires further clarification on how it is proposed ordinaryunsecured trade creditors’ claims will be dealt with and how Bilkurra will deal with the rights ofOption Holders and purchasers under off- the- plan contracts. This detail may be providedbefore the Second Meeting.

2.1 Conduct of administration

Full details of the work performed since our appointment is provided in Section 5.2. The key taskshave been:

investigating the Company’s activities and flow of payments made by Investors

reconstructing Company cash flows from solicitor trust accounts and Project Bank Accountstatements provided by EEL and Mr Grochowski

identifying substantial payments made by Midland that are unrelated to the development ofthe Land

identifying potential voidable transactions

determining director/de facto director/shadow director related transactions.



2.2 Second meeting of creditors

The Federal Court ordered that the Second Meeting of creditors pursuant to s439A (Second Meeting)be adjourned to 21 October 2015.

The Second Meeting will be held on Wednesday, 21 October 2015 at 10am AEDST at the Institute ofChartered Accountants in Melbourne. Notice of meeting of creditors is attached at Appendix D.

A webcast facility will be available for creditors who cannot attend the Second Meeting (refer Section3.6).

2.3 Deed of Company Arrangement

We received the Bilkurra Deed Proposal for the Company on 28 September 2015 (attached atAppendix H).

The Bilkurra Deed Proposal is an outline of a proposed Deed and does not provide sufficient detail forthe Administrators to:

conclude the Company will be restored to solvency at the date of effectuation of the Deed

determine that Company creditors will receive a greater return under the Deed than in aliquidation

recommend that the creditors resolve to accept the Bilkurra Deed Proposal at the SecondMeeting (refer Section 9 and Section 11.2).

2.4 Remuneration

We are seeking approval for our remuneration at the Second Meeting as summarised in ourRemuneration Report at Appendix B:

Period Amount (excluding GST) ($)

Voluntary Administration

Resolution 1: 2 July 2015 to 14 July 2015 – Messrs Martin andCrosbie

$44,229.50

Resolution 2: 14 July 2015 to 4 August 2015 – Messrs Ross andAlbarran

$103,371.50

Resolution 3: 5 August 2015 to 12 October 2015 – MessrsMartin and Crosbie

$360,491.50

Resolution 4: 13 October 2015 to 20 October 2015 – MessrsMartin and Crosbie

$100,000.00

Resolution 5 (if applicable): 21 October to date of Deed’sexecution – Messrs Martin and Crosbie

$80,000.00

Deed (if applicable)

Resolution 6: 21 October 2015 to completion of Deed ofCompany Arrangement – Messrs Martin and Crosbie

$300,000.00

Liquidation (if applicable)

Resolution 7: 21 October 2015 to completion of Liquidation –Messrs Martin and Crosbie

$600,000.00


3. Introduction

3.1 Appointment information

Nicholas Martin and Craig Crosbie were appointed Administrators of the Company on 2 July 2015pursuant to s436A of the Act. At the first creditors’ meeting held on 14 July 2015 (First Meeting),creditors voted to replace us with David Ross and Richard Albarran from Hall Chadwick. On 28 July2015, ASIC issued a proceeding in the Federal Court of Australia seeking orders removing Mr Rossand Mr Albarran as Administrators of the Company and reappointing us.

Mr Ross and Mr Albarran resigned as Administrators on 4 August 2015.

On 5 August 2105, the Federal Court ordered that:

Nicholas Martin and Craig Crosbie, be appointed as Administrators of the Company

the Second Meeting is adjourned to not later than 7 October 2015.

On 29 September 2015, the Federal Court ordered the Second Meeting is adjourned to 21 October2015.

3.2 Declaration of Independence, Relevant Relationships and Indemnities

Our Declaration of Independence, Relevant Relationships and Indemnities (DIRRI) is provided atAppendix C. The DIRRI discloses information regarding any prior personal or professionalrelationships the Administrators and PPB Advisory had with the Company or related parties, ourindependence and any indemnities received relating to this appointment.

Subsequent to the DIRRI dated 3 July 2015, the $40,000 indemnity received by the Company directorwas transferred into PPB Advisory’s bank account as per the terms of the Deed of indemnity ofAdministrators.

3.3 Report’s purpose

An administrator is required to investigate a company’s business, property, affairs and financialcircumstances and report to creditors on:

the Administrator’s opinion on the options available to creditors, being that the:

Company be wound up (liquidation)

Company execute a deed of company arrangement

administration should end (with control of the company reverting to the company’sdirector).

investigations conducted

assets available for realisation

potential voidable transactions and offences.

This Supplementary Report to creditors of the Company should be read in conjunction with thePrevious Report to creditors issued by the Previous Administrators.

3.4 Purpose of second meeting

The Second Meeting will:

address the contents of this Supplementary Report

respond to questions from creditors


determine the Company’s future by resolving one of the three available options

seek approval of:

Administrators’ remuneration

future remuneration of the Liquidators or Deed Administrators (as applicable)

should creditors desire, the formation of a Committee of Inspection (COI)

The current Administrators automatically become the Deed Administrators or Liquidators unlesscreditors resolve to replace them

The options available to creditors and the Administrators’ opinion on each option are set out in detailin Section 11.

We recommend that the Company be wound up (ie placed into liquidation).

3.5 Second meeting convening period

On 29 September 2015 we applied to the Federal Court seeking an adjournment to the date on whichthe Second Meeting must be held, to provide additional time for:

Bilkurra to submit a Deed proposal

the Administrators to analyse and consider the Bilkurra Deed Proposal.

The Court ordered that the Second Meeting is further adjourned to 21 October 2015.

3.6 Second meeting details

The Second Meeting will be held on:

Date: Wednesday, 21 October 2015Registration: 9 amMeeting time: 10 am AEDSTLocation: The Institute of Chartered Accountants

Level 3, 600 Bourke StreetMelbourne, Victoria, 3000

A webcast facility will be available for creditors who cannot attend the Second Meeting.

If you plan to attend via webcast please register your interest in advance by no later than 10.00amAEDST on Tuesday 20 October 2015, by:

contacting the Midland Hwy Pty Ltd (Administrators appointed) Insolvency Line on 1300 853598, or

emailing a request to [email protected]

To enable orderly registration for the webcast please access the webcast link 30 minutes prior to themeeting time.

Creditors intending to attend the Second Meeting via webcast and vote on the proposed resolutions,must submit a POD and proxy form by email to [email protected] by no later than10.00am AEDST on Tuesday, 20 October 2015.

If creditors wish to nominate the Chairman to hold their proxy, the Chairman will exercise each:

General proxy – in accordance with the recommendations in this Report, including thatcreditors resolve that the Company be wound up

Specific proxy - in accordance with the creditor’s specific instructions.

Formal notification Form 529 – Notice of meeting of creditors is attached at Appendix D.




3.7 Meeting registration

To register attendance and be entitled to vote at the Second Meeting, creditors must complete andsubmit the following forms attached at Appendix A:

Registration forms Information

Form 532 – Appointmentof Proxy Form

A new proxy form is required to be completed for each creditors’ meeting (ieprevious meeting proxy forms are invalid for the Second Meeting).

If a corporate creditor (such as a trustee of a self-managed superannuationfund) wants to be represented at the Second Meeting, it must appoint anindividual to act on its behalf by providing an executed proxy form.

Individuals may choose to appoint a representative to vote on their behalf byexecuting a proxy form. If an individual is attending in person a proxy form isnot required.

Proof of Debt or ClaimForm

This form is required to be completed to entitle a creditor to vote at the SecondMeeting. Documents to support the amount claimed (eg unpaid invoices) mustalso be provided.

Please take care when completing the form to ensure the correct party isnamed as the creditor. As an example, this may include XYZ Pty Ltd as trusteefor the ABC family superannuation fund.

Forms must be submitted by no later than 10.00am AEDST on Tuesday, 20 October 2015 to LinkMarket Systems by email to [email protected].

Only creditors of the Company are entitled to vote at the Second Meeting.

Creditors are encouraged to arrive as early as possible after the 9am registration time to enable theorderly registration of attendees so that the meeting can commence on time.

3.8 Committee of Inspection (COI)

Creditors may establish a COI at the Second Meeting, typically to assist and guide the liquidator ordeed administrator (as applicable). A minimum of two members is required to form a COI.

We recommend that creditors establish a COI regardless of whether the creditors resolve to wind upthe Company or that it execute a Deed.

Creditors should consider whether they are in a position to be a COI member, as membership of aCOI requires attendance at meetings (telephone facilities will be made available so members do nothave to attend in person). Members of the COI must have regard for the creditor group’s interest, nottheir own interests.

Importantly, for a creditor to be eligible for appointment as a member of a COI, they must either:

be in attendance at the Second Meeting

appoint a general power of attorney to attend the Second Meeting on their behalf

authorise a person in writing to be a member of the COI on their behalf.

3.9 Further information

To assist creditors, employees, and shareholders to understand the voluntary administration process,ASIC has released a package of insolvency information sheets endorsed by ARITA.

Enclosed at Appendix E is ASIC’s publication Insolvency information for directors, employees,creditors and shareholders, which provide an index of all the information sheets that are available.You can download these information sheets from:

www.asic.gov.au

www.arita.com.au.


http://www.asic.gov.au/

http://www.arita.com.au/


4. Company background

4.1 Company overview and key events

Outlined below is a brief chronology of key events in the Company’s history.

Date Details

2001 Bilkurra purchased Land from John Wood7 September 2011 Company (Midland HWY Pty Ltd) is established17 October 2011 John Wood appointed sole director of the Company18 October 2011 Bilkurra entered into contracts to sell the Land to PMA for $400,000 (folio

178) and $7 million (folio 179) (Head Contracts).18 October 2011to 19 June 2012

Company inexplicably paid $1.4m to Bilkurra by five instalments: $100k – 18 October 2011 $400k - 21 February 2012 $250k - 18 April 2012 $250k - 11 May 2012 $400k - 19 June 2012

27 October 2011 Company commenced selling c700 Option Deeds and c107 off-the-planland sale contracts for parcels of the Land (lots) located on the outskirt ofHuntley (near Bendigo) Victoria. Thereafter the Company received: c$1.15m from off-the-plan land sales (held in EEL trust accounts) and

bank guarantees of c$433k. c$24m from Option Holders

1 November 2011 Appointment of Director Agreement between John Wood, Mr Grochowskiand the Company providing: John Wood is to be the registered director (to be paid a consulting fee) John Wood does “not have authority to act for or create or assume

any responsibility or obligation on behalf of Midland HWY other thanas authorised in writing by Michael (Mr Grochowski)”. (ie MrGrochowski appears to be a de facto director and/or shadow directorof the Company).

Mr Grochowski with a General Power of Attorney Mr Grochowski to hold John Wood’s Resignation of Director form and

Company Resolution pending the removal of John Wood for whateverreason.

10 November 2011 PMA nominated the Company to purchase and take title to the Land underthe Head Contracts.

14 December 2011 PMA appointed project manager for the Company

17 February and22 May 2012

Terms of the Head Contracts were varied and restated (Variation Deeds)

28 June 2013 The Head Contracts and Variation Deeds were cancelled (ie the sale ofLand from Bilkurra to PMA ended) with the following key implications: Company was required to pay a $600k cancellation fee (in addition to

the $1.4m already paid by five instalments) as directed by Bilkurra.Payments were made to PMA ($400k) and John Wood ($200k)

Company became liable to return c$24m to Option Holders under cl15.3 of each Option Deed – ie Option Holders became creditors ofMidland

Company had ongoing obligations under the off-the-plan land saleagreements to ensure the development of the Land continued and aplanning permit received from CoB prior to applicable ‘sunset dates’(beginning mid-2017)


28 June 2013(continued)

Share Option Deed was executed, incorporating an Assignment Deedwith the following key implications: GBC was obliged to pay $5.4m to the former shareholders of Bilkurra

(compared with $7.4m consideration under the Head Contracts dated18 October 2011). GBC’s sole shareholder is Skinner.

GBC becomes the sole shareholder of Bilkurra and the ultimate ownerof the Land from 1 July 2013.

the Company purported to assign all its rights, interest, benefits,obligations and liabilities in respect of Option Deeds and off-the-plansale contracts it had entered into with Option Holders and Purchasers.

24 December 2014 Deed of Variation amending the Share Option Deed allowing, amongstother things, GBC to borrow money and pledge Bilkurra’s Land as security forthe loan for GBC to pay to the former shareholders of Bilkurra.John Wood purportedly signed this Deed of Variation, which is dated nearly sixmonths after his death. It was also executed by Mr Skinner on behalf ofboth Bilkurra and GBC but Mr Skinner was not a director of eithercompany on 24 December 2014. This is a matter that a liquidator willlikely investigate further.

4.2 Statutory information

A search of ASIC’s database reveals the following details of the Company and its registered directors,other officers and shareholder.

Company details

Date of incorporation 7 September 2011

Registered office Dillon Partners, Level 1, 10-12 York Street, South Melbourne, VIC 3205

Principal place of business Level 4, 517 Flinders Lane, Melbourne, VIC 3000

Directors’ details Appointment from/to

Russell Wood 26 May 2015 to current (backdated to 28 July 2014)

John Wood

Jennifer Hamley

17 October 2011 to 28 July 2014

7 September 2011 to 17 October 2011

Secretary’s details Appointment from/to

Russell Wood 26 May 2015 to current (backdated to 28 July 2014)

John Wood

Jennifer Hamley

17 October 2011 to 28 July 2014

7 September 2011 to 4 November 2011

Formal Administrators’ details Appointment from/to

Nicholas Martin and Craig Crosbie

David Ross and Richard Albarran


5 August 2015 to current

14 July 2015 to 4 August 2015

2 July 2015 to 14 July 2015

Shareholder Shareholding details

Russell Wood Two fully paid ordinary shares (total amount paid - $2)


We are not aware of any inaccuracy in ASIC’s records.

However and as reported elsewhere in this Report, we consider that Mr Grochowski acted as de factodirector and/or shadow director of the Company. Mr Grochowski is currently banned by ASIC fromproviding financial services (refer ASIC Media Release).

4.3 Creditors’ claims

At our appointment date, the claims of the Company’s creditors totalled c$24 - c$25m. The followingtable summarises estimated claims by each known class of creditor.

Creditor class Number ofcreditors

Amount ($)

Secured creditors 0 0

Employee entitlements 0 0

Unsecured creditors

1. Trade/External creditors 9 263,947

2. Related entitles 1 128,307

3. Option Holders c700 23,811,661

Total creditor claims c710 24,203,915

Contingent creditors

Purchasers – land sale contracts, fundsof c$1.15m held in EEL trust accountsplus c$433k in bank guarantees)

c107 c$1.58m

*These claims may be subject to change.

These amounts have been derived from the:

formal proof of debt or claim forms submitted by creditors

information gathered during our investigations

Company’s books and records, including those maintained by PMA as the project manager.

4.3.1 Secured creditors

A ‘secured creditor’ is a creditor that holds a security interest over some or all of a company’s assets.To be valid, the security interest must generally be registered on the Personal Property SecuritiesRegister (PPSR).

A search of the PPSR did not reveal any security interests registered over any potential Company’sassets.

4.3.2 Employees

Outstanding employee entitlements have a statutory priority for payment over other creditors.However, we have not received any claim regarding outstanding employee entitlements.



4.3.3 Unsecured creditors

At the date of our appointment, we have identified unsecured creditor claims (excluding relatedparties, Option Holders and off-the-plan purchasers) totalling $263,947 as follows:

No. Unsecured creditor Effective date Claimed amount ($)

1. David Bracka March 2012 133,000

2. WD Legal Holdings Pty Ltd T/A EEL April 2013 65,705

3. Konrad Bobilak Pty Ltd December 2011 42,000

4 Indigital Media Pty Ltd Prior to June 2013 12,177

5 Roedive Pty Ltd ATF Csalad Unit Trust March 2012 6,600

6 Jayson Lowther December 2012 2,349

7 Combined Legal Holdings Pty Ltd September 2012 1,452

8 Dillon Partners Period to May 2014 418

9 ASIC December 2014 246

Total unsecured creditors (excluding related parties,Option Holders and Purchasers)

263,947

In addition to those claims:

Option Holders appear to be entitled to a refund of the entirety of Option Fees paid of c$24m(refer Section 4.3.5 for further detail).

Purchasers under off-the-plan land sale contracts are contingent creditors of the Companyuntil the Land is subdivided and specific lots are made available to Purchasers (deposits andinstalments paid by Purchasers totalling c$1.15m are held in EEL trust accounts with bankguarantees totalling a further c$433k in lieu of payments – refer Section 4.3.6).

At the First Meeting, a number of parties had not provided definitive evidence in support of claims andthese POD’s were admitted for the meeting and marked as “objected to” in accordance withRegulation 5.6.26(2).

Since the First Meeting, we have sought further evidence from each party directly but have notreceived any response at the date of this Report other than from Konrad Bobilak Pty Ltd whichwithdrew its claim.

4.3.4 Related entities

The Company’s related entities and the quantum of their claims at the date of appointment aresummarised below:

Related entity Relationship Claimed amount ($)

Bilkurra Development Corporation PtyLtd

John Wood - former common directorand relative of current director

128,307

PMA Mr Grochowski is the sole director ofPMA and appears to be a de factodirector/shadow director of theCompany

nil

Total related entity claims 128,307


The Bilkurra Development Corporation Pty Ltd (BDC) claim is based on a consultancy agreementdated 1 November 2011 between the Company, John Wood and Mr Grochowski. The claim has beensupported by documents provided by Mr R Wood. However, Mr Grochowski advises the claim is notentirely valid as additional payments under the consultancy agreement had been made to BDC fromthe Project Bank Accounts. These amounts have not been reconciled at the date of this report andare subject to further investigation.

Potential voidable transactions (including with related parties), are discussed at Section 8.1.

4.3.5 Option Holders

The cancellation of the Head Contracts on 28 June 2013 crystallised Option Holder claims against theCompany for the full value of each Option Deed, ie the sum of deposits and instalments paid of up toc$40k each (refer cl 15.3 of the Option Deed). From 28 June 2013, c700 Option Holders haveunsecured claims against the Company totalling c$24m.

Bilkurra asserts that the Company had assigned the rights and obligations under the Option Deeds toBilkurra on 28 June 2013.

We disagree with Bilkurra’s view as:

cl 15.3 of the Option Deeds provides that, if the Head Contract “is not completed for anyreason whatsoever”, Option Fees must be refunded to Option Holders

notice of assignment was not given to Option Holders in the manner required by the OptionDeed to be effective

it is not legally possible to assign obligations.

If creditors resolve to wind up the Company at the Second Meeting, Option Holders will not beprecluded from seeking new arrangements with Bilkurra, as Land owner.

We have not been informed how Bilkurra will fund the Land development, regardless of whethercreditors resolve to wind up the Company (ie place it in liquidation), or execute a Deed.

4.3.6 Contingent creditors

The Company has contingent liabilities to Purchasers holding off-the-plan land sale contracts:

The Company is obliged to complete the sub-division and deliver c107 separate parcels ofland prior to the expiration of ‘sunset dates’, commencing mid-2017. If the Company does notcomplete this obligation, the Purchasers will be entitled to a full refund of deposits, totallingc$1.59m (c$1.15m held in EEL trust accounts and c$433k bank guarantees), and may beentitled to claim for breach of contract, giving rise to an, as yet, unquantified claim.

At the date of this Report the Company does not own the Land and has no rights to acquirethe relevant Land necessary to fulfil the off-the-plan land sale contracts. It has a caveatableinterest under the Share Option Deed

It is unlikely that a liquidator, if the Creditors resolve to wind up the Company at the SecondMeeting, will be able to develop the Land and achieve the necessary subdivision to deliverparcels of land to Purchasers.

If creditors resolve to wind up the company at the Second Meeting, Purchasers may choose to seek‘fresh’ arrangements with Bilkurra, as Land owner.


5. Conduct of administration

5.1 First meeting of creditors

The first meeting of creditors of the Company was held on 14 July 2015 (First Meeting), pursuant tos436E of the Act.

Creditors at the meeting resolved that a Committee of Creditors (COC) be formed comprising:

Representative names Representing

Russell Wood In a personal capacity and as director of the Company

Ben Skinner WD Legal Holdings Pty Ltd T/A EEL

We have not convened any COC meetings.

At the First Meeting creditors resolved that Messrs Ross and Albarran of Hall Chadwick replace us asAdministrators.

A copy of the First Meeting minutes lodged by Messrs Ross and Albarran may be obtained fromASIC’s website.

On 5 August 2015, the Federal Court ordered that Nicholas Martin and Craig Crosbie be appointed asAdministrators.

5.2 Work undertaken to date

Specifically we have:

reconstructed Company cash flows into and from trust accounts and Project Bank Accountstatements provided by EEL and Mr Grochowski

reconciled payments made from the Project Bank Account maintained by Mr Grochowski(c$24.2m)

identified and analysed payments made, or instructed to be paid, by Mr Grochowski on behalfof the Company of c$22.3m which may be voidable transactions and /or other potential claimsif the Company is wound up, eg for which the Company does not appear to have received anybenefit, was unrelated to the Land development, or may have been excessive/unreasonable

identified payments made by Mr Grochowski on behalf of the Company of c$9.6m for whichthe Company does not appear to have received any benefit - c$7.6m of which was paid toparties unrelated to the development of the Land

met with and interviewed Mr Grochowski and the Company’s solicitors (representatives fromEEL)

reviewed and considered advice provided by counsel (ie senior barristers)

conducted initial investigations into the failure of the Company and identified voidabletransactions that may be pursued by a liquidator

determined director/de factor director/shadow director conduct and related transactions

assessed the merits to creditors of the Bilkurra Deed Proposal

ongoing liaison with ASIC:

responding to its enquiries

complying with notices served on the Administrators

regarding our investigations

prepared and swore affidavits, engaged lawyers to issue summons for production of recordsand public examination of Mr Grochowski


identified other parties to be considered for summons for books and records, and publicexaminations (refer Appendix I)

liaised with lawyers to draft affidavits and statutory demands for debts owed to the Company

liaised with appointed solicitors to review documents received (eg contracts, deeds andcorrespondence, etc) and conduct preliminary investigations

engaged in numerous conversations and correspondence with/from Option Holders regardingthe potential impact of the administration on their investment

communicated with various parties including the Company’s director, pre-appointmentlawyers and accountant, project manager, option holders and the City of Greater Bendigo toobtain books and records of the Company

met with the Company director regarding the background of the Company

issued notices to various parties demanding books and records of the Company

reviewed the Company’s books and records

performed various searches and considered linkages between current and former directors,shareholders, registered offices and mortgagees

performed and considered various land title searches

reconciliation of the various director/shareholder/registered office/mortgagee searches to landtitles

met statutory reporting obligations (ie creditor meeting/reporting/ASIC notifications).

corresponded with banks to investigate if the Company held/previously held bank accounts

performed PPSR searches on the Company

reviewed creditors’ claims and communicated accordingly

held the First Meeting of creditors at our office in Melbourne

liaised with the Company’s Previous Administrators on file handover

liaised with the City of Greater Bendigo regarding progress on the proposed Landdevelopment

reviewed proposed plans of subdivision and various related works associated with theproposed Land development

prepared this Report to creditors.

Our findings and issues identified during our investigations are detailed in Section 7.


6. Financial background

Key Comments

Records provided to us are insufficient to reconcile the Company’s financial history

Records provided to us do not explain substantial payments made by the Company

Mr Grochowski deleted Company records maintained by PMA for the Company

From September 2011 – July 2014, John Wood was the director of the Company. Mr Grochowskiappears to have been a de facto or shadow director for that time. In July 2014, John Wood died andhis son, Russ Wood, is the executor of his estate. Mr Grochowski appears to have continued to runthe Company as shadow/de facto director after John Wood’s death.

We have made enquiries of Mr R Wood but he has been unable to locate any books and records ofthe Company. As part of managing his father’s estate, Mr R Wood made enquiries about theCompany’s affairs and when he was unable to obtain sufficient information to understand what wasgoing on, he appointed administrators. Mr R Wood has provided to us what limited information hewas able to obtain in respect of the Company.

Accordingly, our investigations have focused on the books and records maintained by Mr Grochowskiand the Company’s former solicitors.

Mr Grochowski advised that PMA maintained accounting records on MYOB for the Company up to 30June 2012. According to Mr Grochowski, he:

handed these records to the Company director, John Wood, to prepare annual accounts

is not aware if the 2012 financial accounts were prepared

subsequently deleted the MYOB accounting records.

Our investigation into the financial performance of the Company has been limited to a review of thetrust accounts maintained by EEL and the Project Bank Account statements, as we only received:

EEL trust account statements for each lot until January 2015

a copy of a document containing the combined trust account receipts and payments from EEL

the Project Bank Account statements for the two bank accounts maintained by PMA

from Mr Grochowski, an incomplete and unreconciled summary of payments made from theProject Bank Accounts to 30 June 2013.

According to Mr Grochowski, the Company only lodged BAS returns to mid-2012 with the AustralianTaxation Office (ATO). We are unable to determine if the Company has a liability to the ATO.

The financial analysis provided in this report is preliminary. A liquidator, if the creditors resolve to windup the Company at the Second Meeting, would likely investigate the business/financial activities of theCompany in greater detail.

To assist creditors understand the source and applications of funds, the following section summarisesreceipts and payments from:

trust accounts maintained by EEL

Project Bank Account statements.


6.1 Funds Flow summary to January 2015 (from EEL trust account to theProject Bank Accounts)

Key Comments

Option Fees paid into the EEL trust account (of c$24m) were transferred into the Project BankAccounts, usually on Mr Grochowski’s instructions to EEL.

Mr Grochowski, via PMA of which he is sole director, controlled the Project Bank Accounts,authorising payment of the c$24m from the Project Bank Accounts.

Mr Grochowski appears to have authorised and applied proceeds of Option Fees broadly as follows:

c$9.6m - activities unrelated to the development of the Land

c$4.6m – to PMA, for project management fees

c$7.3m – commissions paid to Property Choice (30% of Option Fees)

c$1.7m - development related expenses.

We are aware of $761k of payments from the EEL trust account but do not know why the paymentswere made.

Off-the-plan Land sale deposits (net of costs and transfers) are held in EEL trust accounts, althoughwe understand these funds were transferred into Bilkurra trust accounts in July 2015.

We have reconstructed the cash flows from the EEL trust accounts to the Project Bank Accounts, anddisbursed thereafter:

Land sales - trust account Note $'000's

Net receipts into EEL trust accounts 1 1,163

Unreconciled transfers (15)

Trust account balances 1,147

Option deeds $'000's

Net receipts into EEL trust accounts 1 23,812

Less payments made 2 (761)

Less trust account balances Jan 2015 (92)

Transferred to the Project Bank

Account 322,958

Unreconciled inflows 3 1,254

Project Bank Account inflows 3 24,213

Less other potential voidable payments 4

Land 4.1 - 4.2 (2,421)

Loans 4.3 -4.5 (7,174)

PMA 4.6 (4,638)

Property Choice 4.7 (7,337)

(21,570)

Less other payments

- ATO (419)

- Evans Ellis (468)

- Other (including development costs) 5 (1,755)

Total other payments (2,643)

Total payments (24,213)

Project Bank Account balance -


Notes

1. EEL Trust account receipts – Land sale deposits c$1.16m, Option Fees c$23.812m

Company records indicate there are c700 active Option Deeds and c107 off-the-plan land salecontracts. Statements from EEL indicate there may by up to 760 active Option Deeds.

The Company returned some deposits to Purchasers when they decided to terminate theagreement, although it was not required to do so under the respective Option Deeds/Contracts.The table below summarises our review of the EEL trust statements:

Note: Including bank guarantees (c$433k) provided by some Purchasers, the total amount paid for deposits and/orinstalments relating to off-the-plan land sale agreements total c$1.59m (refer Section 4.3.6).

2. Payments made directly from EEL trust accounts – c$761k

Our investigation found the following payments made directly from EEL trust accounts:

We have not been provided with documentation to explain the transactions or the benefit theCompany received, if any, from entering into the transaction and effecting the payments.

From our review of Mr Grochowski’s/PMA’s instructions to EEL to transfer trust funds to theCompany’s Project Bank Account:

Only one transfer request for $207k to Colin Adno Associates had been recorded correctly

One transfer request for $129k to PMA had been allocated to Colin Adno Associates

One transfer request for $175k to PMA had been allocated to Premium PropertyConsultants

We have not been provided with the remaining transfer requests of c$250k

We expect that a liquidator would investigate these payments, and the underlying transactionsin greater detail.

3. Transfers into the Project Bank Accounts – c$24.213m

We identified the total funds received into and subsequently paid from the Project BankAccounts by Mr Grochowski was $24.213m.

We have identified a $1.254m discrepancy between the:

payments from the EEL trust accounts

receipts into the Project Bank Accounts (refer table below).

This discrepancy may be due to timing, eg the EEL trust account statements provided to uswere up until January 2015. However, Project Bank Accounts statements were up until June2015.

$ Option Deeds

Land sale

agreements Total Funds

Gross receipts 24,147,174 1,203,935 25,351,109

Refunds (335,514) (41,371) (376,885)

Net receipts 23,811,661 1,162,564 24,974,225

Payments made from EEL trust accounts Amounts ($)

- Colin Adno Associates (336,000)

- Premium Property Consultants (175,000)

- Summit Law Trust Account (10,700)

- Legal fees (58,801)

- Bilkurra (15,000)

- Target Fitness (500)

- Jam Preserves (15,000)

- VIP Trading Australia (9,000)

- Brookfield Riverside (2,700)

- Unidentified payments (138,500)

Total payments (761,200)


A liquidator, if the Creditors resolve to wind up the Company at the Second Meeting, wouldlikely investigate this discrepancy.

4. Payments which may be voidable or claimable by a liquidator – c$21.57m

We have identified a number of payments which may constitute voidable transactions or otherpotential claims (further details provided at Section 8.1).

4.1 Bilkurra - $2m

The Company paid $2m to, or as directed by, Bilkurra as part payment of the purchaseprice ($1.4m) and as a cancellation fee ($600k) under the Head Contracts. TheCompany was never a party to the Head Contracts and appears not to have receivedany benefit for the $2m paid to Bilkurra.

4.2 Unrelated Land – c$421k

We have identified that:

The Company executed two contracts of sale

PMA executed one contract of sale.

for land adjacent to the Land.

The Company’s records disclose that the Company paid at least $420,750 to the vendorsunder the contracts. Thereafter, Investment Mutual Holdings Pty Ltd (IMH) wasincorporated and purportedly nominated as the ‘substitute purchaser’. IMH is now theregistered proprietor of all three parcels of land. The Company appears not to havereceived any benefit for the c$421k it paid towards the purchase of the three parcels.

4.3 Brookfield Riverside Pty Ltd – c$2.055m

Company records disclose that the Company paid $2.055m to Brookfield Riverside. Wehave not been provided with an explanation or documentation supporting thesepayments, despite requesting Brookfield Riverside’s director at the time of the payments,Ben Skinner, that he does so.

4.4 Foscari Holdings Pty Ltd – c$4.768m

Company records disclose that the Company paid $4.768m to, or for, Foscari. We havenot been provided with an explanation or documentation supporting these payments,despite requesting Foscari’s director at the time of the payments, Ben Skinner, that hedoes so.

4.5 Gillies Road Pty Ltd - $351k

Company records disclose that the Company paid $351k to Gillies. We have not beenprovided with an explanation or documentation supporting these payments, despiterequesting Gillies’ director at the time of the payments, Ben Skinner, that he does so.

4.6 PMA – c$4.6m

A project management service agreement (PM Agreement) between the Company andPMA was executed by John Wood and Mr Grochowski which became effective on 14December 2011.

It appears that at least $7.6m (refer Section 8.1.2 Note 2).has been paid from theProject Bank Accounts to parties, other than for ‘project costs or the Land’. A liquidator,should the creditors resolve to wind up the Company at the Second Meeting, would likelyinvestigate these payments to determine if:

they have been made in accordance with the requirements of the PM Agreement.

Option Fees $'000's

22,958

24,213

Discrepancy (1,254)

Payments/transfers from EEL trust accounts

Receipts into Project Bank Account


the work undertaken by PMA delivered a benefit to Investors

A liquidator would likely investigate whether the PM Agreement and/or the fees chargedby PMA/Mr Grochowski may be voidable because:

of PMA being a related party, or for any other reason (refer Section 8.1.2 Note 3).

The project management fees may have been uncommercial or excessive

4.7 Property Choice Pty Ltd – c$7.3m

Property Choice received a commission of $12,500 (including GST) on the execution ofeach Option Deed, ie around 30% of the Option Fees were paid to Property Choice.

Despite requesting this information from Property Choice’s director, Mr M Libman, wehave not been provided with an explanation or documentation:

evidencing the services Property Choice purportedly provided

supporting the commerciality of the payments and the benefit the Company receivedfrom making the payments.

A liquidator would likely investigate whether the agreement with Property Choice and thefees paid to it may be voidable and/or uncommercial, particularly noting the 30%commission rate (refer Section 8.1.2 Note 3).

4.8 Other expenses – including development costs – c$1.7m

In response to a Federal Court summons to produce records, Mr Grochowski providedus with 13 contracts and/or engagement letters containing fee proposals and scope ofworks from various consultants.

Generally, the fee proposals include development works in Huntley. However, somereferences were made to work to be performed on development sites other than theHuntly Land. The engagements were signed by Mr Grochowski or Mr Ian Fowler fromPMA. On one occasion Mr Grochowski executed an engagement letter as a director ofthe Company.

At this stage we have not completed our reconciliation of all invoices delivered to ouroffice by Mr Grochowski or reconciled these to payments made from the Project BankAccounts.

Only c$1.7m (7%) of the Option Fees received by Midland appears to have been utilisedfor undertaking works necessary for obtaining a planning permit for the proposed plansof subdivision or otherwise progressing the development.

6.2 Director’s Report as to Affairs (RATA)

A company director must provide an administrator with a RATA outlining the company’s business,property, affairs and financial circumstances at the appointment date (s438B). The RATA shouldinclude:

net asset book values (based on historical financial records)

estimated asset realisable values

known liabilities.

The Company director, Mr R Wood, provided us with a RATA in accordance with his responsibilitiesunder the Act. However, there is no financial information disclosed in the RATA and R Wood advisedthat he:

had very limited knowledge of the operation of the Company and its financial position

only assumed the directorship of the Company as the executor of his father’s estate.

We have sought to obtain information from Mr Grochowski and PMA and recovered some documentsin response to a Federal Court summons to produce which we obtained and served on MrGrochowski and PMA.


7. Investigations

Key Comments

While our investigations are ongoing, we summarise our preliminary findings below:

The proceeds of Option Fees (c$24m), have been spent:

for purposes unrelated to the development of the Land

Often without the Company receiving any benefit

Mostly without adequate documentation

The majority of the above concerns represent potential voidable transactions and otherpotential claims of up to c$22.3m which we expect a liquidator would investigate further, ifcreditors resolve to wind up the Company at the forthcoming Second Meeting

The Company, and its related company PMA, did not maintain adequate financial controls,objectivity, independence and governance, including in respect of related-party transactionsand dealings

Company books and records do not explain its performance and financial position. They aredeficient and give rise to a presumption of insolvency

Mr Grochowski advised that he had deleted company records

The Company was insolvent from:

earliest – 7 September 2011 on the presumption of insolvency, as books and recordswere not adequately maintained

March 2012 – on entering into a Referral Agreement creating an outstanding debt of$133k (still unpaid), indicating the Company was unable to pay debts from this date.

The Company probably did not operate a managed investment scheme (MIS)

We have not identified any major impediment (other than financial), which may delay anapplication for a planning permit for a staged residential subdivision of the Subject Site.

With all of the Option Fees (c$24m) apparently spent, we do not know if/how Bilkurraproposes to undertake and complete the next stages of the development in accordance withOption Deeds and off-the-plan land sale contracts

Investors would not be precluded from seeking ‘fresh’ arrangements with Bilkurra, the Landowner, if the Company were would up.

We have conducted preliminary investigations into the reasons for the Company’s failure, to theextent possible in the available time. We expect that a liquidator, if the Creditors resolve to wind upthe Company at the Second Meeting, would conduct further investigations into the failure of theCompany. A liquidator has greater powers to undertake investigations and pursue recoveries than anadministrator or deed administrator.

Our preliminary investigations to date have been limited because:

we have had a limited timeframe in which to undertake investigations into a complex web ofoften inadequately documented transactions and report to creditors.

the Court was not able to provide dates prior to the Second Meeting to summons RelevantParties to produce records and attend Court for public examinations

the Company did not maintain financial accounts and the only Company records provided tous were from the Company solicitors (EEL) and Mr Grochowski pursuant to a summons wesought and which was granted by the Federal Court

substantial payments and transactions are not supported by any documentation.

We have based our investigations and opinions on information obtained from:

reviewing available Company records including records delivered by Mr Grochowski inresponse to a Federal Court summons


solicitor trust account statements and Company Project Bank Account statements providedby EEL and Mr Grochowski respectively, to reconstruct a summary of receipts and paymentsto the date of administration

external professional reports

publicly available information eg ASIC and statutory planning documentation.

A liquidator would likely apply to Court to issue summonses to produce records and for publicexamination of several parties appear to have a direct or indirect relationship with the Company.

A list of Relevant Parties, which includes persons a liquidator may consider for summons and publicexamination, is attached at Appendix I together with details of the registered offices, current andformer directors and shareholders of those entities.

We have identified that Mr Skinner is, or was, a director of various companies with which Midland hashad dealings including regarding the Land. Some of these dealings may constitute voidabletransactions or other claims. Mr Stephens replaced Mr Skinner as director of a number of thesecompanies of interest and is also a director of GPTAA Pty Ltd being the registered office for many ofthese companies. A schedule of relevant directorships held/previously held by Messrs Skinner andStephens and a schedule of registered offices is included with the list of Relevant Parties attached atAppendix I which creditors should review.

7.1 Director’s explanation for the Company’s difficulties

The Company’s former director, John Wood, died in 2014. The current Director, R Wood, wasappointed in 26 May 2015 and claims he has no knowledge of the Company’s affairs in the periodprior to his appointment.

R Wood appointed administrators after unsuccessfully attempting to obtain copies of the Company’sbooks and records from various parties.

7.2 Administrators’ opinion of the reasons for the Company’s difficulties

We consider the following factors contributed to the Company’s failure:

The Company, and by extension PMA, spent the entire proceeds of the Option Fees (c$24m)prior to completing obligations under the Option Deeds. (Note: the process for applyingOption Fees is provided in Appendix G).

On cancellation of the Head Contracts on 28 June 2013, the Company was required to returnOption Fees to Option Holders, which it has neither done nor endeavoured to do.

The Company is without funds to apply to the Land development costs to fulfil ongoingobligations under the off-the-plan land sale agreements.

The Company paid c$8.2m of Option Fees’ proceeds to parties unrelated to the developmentof the Land (often without supporting documentation), exhausting the funds available toprogress the proposed subdivision to planning permit stage. (refer Sections 6 and 8).

The Company paid 30% of the Option Fees proceeds (c$7.3m) in commissions.

The Company entered into a number of potential voidable transactions at the time theCompany was insolvent, or alternatively which caused the Company to become insolvent andunable to pay outstanding debts (ie from March 2012 or potentially as early as 7 September2011).

The Company did not raise additional funding/finance as originally intended.

The Company only spent c$1.7m (of c$24m Option Fee proceeds) on service providers forservices specific to the development of the Land.

The Company had inadequate financial controls, objectivity, independence and governance toappropriately deal with related party transactions such as the potential uncommercialagreement between the Company and PMA.

The Company did not maintain sufficient books and records to produce accurate financialstatements.


Our investigations also found the Company entered into a power of attorney with Mr Grochowski on 1November 2011, which confers director responsibilities, as the sole decision maker of the Company,on Mr Grochowski. It appears that Mr Grochowski was a shadow director and/or de facto director ofthe Company.

If the Creditors resolve to wind up the Company at the Second Meeting, a liquidator would investigatethis further including potential claims against Mr Grochowski.

During our investigations we found ASIC has banned Mr Grochowski from providing financial services(refer ASIC Media Release).

7.3 Was the Company operating an unregistered managed investmentscheme (MIS)?

The Company received an opinion from TP Murphy QC on 11 December 2012 advising the Companywas not operating an unregistered MIS as defined in sec 9 of the Act. Mr Murphy’s opinion wasbased on instructions given by the Company’s solicitors (EEL) at the time (we have not seen acomplete copy of those instructions).

Mr Murphy formed this view because the Option Fees were paid to acquire the right to purchaseallotments after the subdivision of the Land but were not “pooled or used in a common enterprise”.Under the Option Deed, it was not intended that the Option Fees were to be used to finance theacquisition of the Land or the procurement of the Planning Approval; the monies contributed weretherefore not ‘used’ to generate a financial return. Clause 5.2 in the Option Deeds makes it clear thatthe Option Fee instalments received by the Company are its absolute property and can be used forany purpose whatsoever.

Under the Option Deed:

once each Option Holder paid option fees into the Evans Ellis trust account, that moneybecame the Company’s money

the Company was under no obligation to use the Option Fees for any particular purpose

the Option Fee paid by each Option Holder did not form part of the deposit or purchase pricefor the individual lot the Option Holder could call on once the land was subdivided

Option Holders do not need to call on their options, even if the Land was subdivided (ie therecould never be a common outcome).

We see no reason to dispute Mr Murphy’s view. We do not know what instructions the Company’slawyers or director (including de facto and/or shadow director) gave him. It also seems that the factsas they eventuated after he provided his advice were different from the factual scenario contemplatedin his advice.

According to the ASIC website, generally in a MIS:

people are brought together to contribute money to get an interest in the scheme (‘interests’ ina scheme are a type of ‘financial product’ and are regulated by the Act)

money is pooled together with other investors (often many hundreds or thousands ofinvestors) or used in a common enterprise

a ‘responsible entity’ operates the scheme. Investors do not have day to day control over theoperation of the scheme.

7.4 Land development – progress update

A summary of the two land titles comprising the Land is provided in the table below:



To assist in visually depicting the Land at the date of this Report, the image below has been takenfrom the current Hermitage development plan (noting a plan of subdivision was approved on 19August 2014, which enabled the boundary between the Subject Site and the Farming Zone Lot toshift):

PMA has advised the Land previously formed part of a proposed project known as ‘AcaciaBanks’. However, the Subject Site has since been incorporated into the ‘Hermitage’ developmentplan. The Subject Site plan spans c83 hectares and is represented in the table below:


The adjoining properties to the west (Viewpoint Development and Hermitage Development Westprecincts) are owned by Integra Vic Pty Ltd, which we are told, as noted below, has no commonrelationships with the Company.

PMA and the Company solicitors advise that:

the Company has no interest, nor has it ever had an interest in, the neighbouring land to thewest of the Subject Site (Hermitage Development West and Viewpoint Developmentprecincts)

the original proposed plan of subdivision for the Subject Site included 1200+ lots. This hassubsequently increased to 3000+ lots.

The City of Greater Bendigo (CoB) advises:

the Company is the proponent of a planned residential subdivision of the Subject Site,including the land in Certificate of Title Volume 10270 Folio 179 being within the Subject Site

there is no current proposal or plan to rezone the Farming Zone Lot.

CoB advise that plan of subdivision, PS 730853W, which proposes to divide the Subject Site intoseven lots for a staged residential development (refer below diagram), is ready to belodged/registered with the titles office.

A development plan for the Subject Site has been endorsed by CoB. According to CoB records, thedevelopment plan showed the:

applicant as PMA

land owner as Bilkurra

proponent as the Company.

Having secured an endorsed development plan (often referred to as a ‘master plan’) for the SubjectSite, the Company is now capable of progressively submitting planning permit applications for eachstage of the proposed subdivision.

We have been provided with two proposed plans of subdivision (PS604248N and PS704248N).However, neither has been registered and there is no record of planning approval having beenprovided for either. (Note: the Option Deeds provided to us refer only to PS604248N).


To date, no planning permit application has been lodged for any stage of the proposed subdivision.

The registration of the plan of subdivision cannot occur until such time as the necessary civil works(eg connection of services) are completed and a statement of compliance is issued by the localcouncil.

According to PMA, the civil works on the Subject Site will not commence for approximately two years,as a result of preferential sequencing of other civil works in the broader Hermitage project (ieadjoining land to the west of the Subject Site).

7.5 Planning permit process – next steps

We have not identified any major impediment (other than financial) which may delay anapplication for a planning permit for a staged residential subdivision of the Subject Site.

Whilst our investigations are ongoing, we have made a number of enquiries with CoB in relation to theLand. The following is a summary of the preliminary findings.

Farming Zone Land - the site is unlikely to be rezoned (eg to enable residential subdivision) prior to2022.

Subject Site - is zoned General Residential Zone (GRZ) and CoB has endorsed a development planfor it. Therefore, a planning permit application may be submitted for a staged residential subdivision inaccordance with the endorsed development plan. The next steps are:

1. Preparing a planning permit application, which requires a suitably qualified and experiencedsurveyor and other specialist consultants (as appropriate) to prepare supportingdocumentation including, but not limited to: proposed plan(s) of subdivision (for each respective stage)

planning report that satisfies CoB’s requirements (eg geotechnical report,environmental/ecological impact study, cultural heritage management plan)

a plan for how the lots are to be serviced.

2. Finalisation of a draft Development Contributions Plan* (DCP), which is currently in circulationwith all stakeholders (eg applicant, CoB) – due 2016. CoB has informed: this does not impede the developer’s ability to put forward a planning permit application

for a staged residential subdivision

the developer has the ability to engage in direct negotiations with the CoB, which mayresult in the signing of an agreement to participate in the proposed DCP.

*A DCP is an agreement between stakeholders on how key development infrastructure (eg roads, parks and other public openspace, sewerage and drainage systems) will be delivered, and how it will be funded.

As there is an endorsed development plan in place for the Subject Site, the developer can bypass thepublic advertisement process for the proposed planning permit application - this is beneficial, as itremoves the ability for third parties to object to the proposed development, which often results infurther time and cost.

The Company has already prepared the following items which are required as part of anapplication/registration of a proposed plan of subdivision:

detailed development/master plan documents

transport impact assessment report

servicing report

ecologist’s report on the existing (and proposed future) vegetation on the site

letter from Alpha Archaeology Pty Ltd, advising that a Cultural Heritage Management Plan(CHMP) is not required for the proposed development.


7.6 Insolvency

Our preliminary view is that the Company was insolvent from:

earliest - the date of incorporation (7 September 2011) as books and records were notadequately maintained

March 2012 – on entering into a Referral Agreement the Company created an obligation tothe referrer for introductory fees of $7,000 per Option Deed. A debt of $133k arising from theReferral Agreement was not paid, indicating the Company was unable to pay debts from thisdate.

A company is insolvent if it is unable to pay its debts as and when they become due and payable.

Pursuant to Section 286 of the Act, a company must keep written financial records that correctlyrecord and explain its transactions, financial position and performance, and enable true and fairfinancial statements to be prepared and audited. Financial records must be kept for seven (7) yearsafter the transactions covered by the records are completed.

As a potential shadow director and/or de facto director, Mr Grochowski is obliged to comply with theseobligations. Mr Grochowski advised that he had deleted MYOB accounting records previouslymaintained by PMA for the Company.

Failure to maintain books and records may give rise to a presumption of insolvency pursuant toSection 588E of the Act. This presumption may be relied upon by the Liquidator in an application forcompensation for insolvent trading and other actions for recoveries pursuant to Part 5.7B of the Act(Section 8).

Liquidators are required to demonstrate that a company is insolvent to pursue certain recoveryproceedings (refer Section 8 for potential quantum of claims). Claims for insolvent trading are notavailable for recovery should the Creditors resolve to execute a Deed at the Second Meeting.

Creditors should note that insolvent trading claims are difficult and costly to pursue, and even ifsuccessful they may not generate an additional return for creditors.

7.6.1 Other Indicators of Insolvency

Determining whether a company is insolvent (and the date at which insolvency occurred) is oftendifficult and is ultimately a matter for the courts to decide. The courts have identified fourteen generalindicators of insolvency that are considered further in ASIC Regulatory Guide 217.

Our investigations to date have identified that 13 of these indicators apply, or may apply, to theCompany, as summarised below:


Indicator Present Comment Effective date

Continuing trading lossesUnknown The company did not produce

financial accountsUnknown

Liquidity ratio below oneUnknown The company did not produce

financial accountsUnknown

Overdue Commonwealth andstate taxes

Yes The Company did not prepare orlodge annual taxation returns orBAS statements from 2012.

FY12

Poor relationship withborrower/financier includinginability to borrow additionalfunds

Yes The Company did not obtainborrowed funds despite intending todo so to satisfy obligations under theOption Deeds

Nov 2011

No access to alternativefinance

Unknown We are not aware if the Companysought alternative finance

Nov 2011

Inability to raise further equityYes We are not aware if the Company

sought to raise new equityNov 2011

Supplier placing debtor onCOD terms, otherwisedemanding special paymentsbefore resuming supply

Yes We are aware there was a Creditor’sStatutory Demand issued againstthe Company for outstandingcommissions and/or marketing feesin early 2015

FY15

Creditors outside tradingterms

Yes A number of creditors lodged claimsagainst the Company for overduedebts at the first meeting of creditorsof the Company

FY13

Issuing of post-dated cheques Unknown Unknown - no evidence noted n/a

Dishonoured cheques Unknown Unknown - no evidence noted n/a

Special arrangements withselected creditors

No We are not aware of any paymentplans or special arrangements withcreditors

n/a

Legal action threatened orcommenced, or judgementsentered against the company

Yes Statutory Demand issued by PropertyDirect (International) Pty Ltd againstthe Company for outstandingcommissions and/or marketing fees inearly 2015. This proceeding wasdismissed on 12 May 2015.

FY15

Payments to creditors ofrounded figures, which areirreconcilable to specificinvoices

Yes A number of significant round figurepayments were identified withoutsupporting invoices

FY12-FY15

Inability to produce timely andaccurate financial informationto display the Company’strading performance andfinancial position, and makereliable forecasts

Yes The Company has not producedfinancial information sinceincorporation.

Nov 2011


7.6.2 Proving Insolvency

Further investigations into the Company’s insolvency will be conducted by a liquidator should theCompany be wound up.

7.7 Potential legal/class actions

We are aware that Property Direct (International) Pty Ltd issued a Creditor’s Statutory Demandagainst the Company for outstanding commissions and/or marketing fees in early 2015. Thisproceeding was dismissed on 12 May 2015. We are not aware of any payments made to PropertyDirect (International) Pty Ltd in the six months prior to our appointment.

We are unaware of any other legal proceedings against the Company.

In addition to the above, we are aware that ASIC is conducting investigations into the Company unders13(1) of the Australian Securities and Investments Commission Act 2001 (ASIC Act) on the followingsuspected contraventions:

ss180-184 of the Act – Director and officer duties regarding the use of position, acting in goodfaith and exercising care and diligence.

s601ED (5) of the Act - suspicion that the Company, Bilkurra and the promoters of AcaciaBanks/Hermitage are operating an unregistered MIS

s911A of the Act – requirement to hold an Australian financial service licence

s1041E-H of the Act and Section 12DA, s12DC and s12DF of the ASIC Act - misleading anddeceptive conduct relating to financial products and financial services

s81, 82, 176, and 179 of the Crimes Act 1958 (Vic) – obtaining property and financialadvantage by deception, receipt of secret commissions.

7.8 Outstanding or previous winding up applications

We are not aware of any outstanding or previous winding up applications against the Company.

7.9 Books and records

Our preliminary opinion is that the Company has not maintained adequate books and records toenable the Company’s financial position to be ascertained at any particular time.

A company must keep written financial records that:

correctly record and explain its transactions, financial position and performance

would enable true and fair financial statements to be prepared and audited

must be kept for seven years after the transactions covered by the records arecompleted (s286).

Directors are responsible for ensuring that adequate financial records are maintained. Directors whofail to take all reasonable steps to ensure compliance with this requirement may be subject to a civilpenalty order. This includes shadow and de facto directors.

Failure to maintain books and records may give rise to a presumption of insolvency (pursuant tos588E of the Act) (discussed above at Section 7)

A liquidator, should creditors resolve to wind up the Company at the Second Meeting, will continueinvestigations into whether any breaches of the Act have occurred in relation to the maintenance ofproper books and records, including:

failure to keep proper financial records (s286)

failure to take all reasonable steps to comply with financial records reporting requirements(s344)

requiring officers to exercise a reasonable degree of care and diligence in the exercise of theirpowers and discharge of their duties (s180).


8. Liquidation recoveries and offences

Key Comments

Voidable transactions and other potential claims

While our investigations are preliminary, we have identified the following potential voidabletransactions and other potential recoveries totaling c$22.3m which should be investigated by aliquidator:

c$7.6m – payments unrelated to the development of the Land, including c$7.2m to companiesassociated with Midland’s lawyers (the majority of payments without documentation)



$7.3m – for commission paid to Property Choice, for which the Company may not havereceived a benefit or, if it did, may have been uncommercial because of the rates levied

$4.6m – potential unreasonable director related transactions for fees paid to PMA.


Breaches of director duties

There are potential claims for breach of director duties under sections 180 -184 of the Act against MrGrochowski (as a potential de facto director and/or shadow director) and the estate of John Wood (asthe former director).

Insolvent trading

The company appears to have been insolvent from at least March 2012 and potentially as early asSeptember 2011.

The potential quantum of an insolvent trading claim would be capped at the level of debt incurred butunpaid from incorporation (the earliest date of insolvency) - c$24.2m

Until a liquidator, or deed administrator, issues summonses for the production of records andundertakes public examinations of Relevant Parties, it is difficult to confirm the claim quantum andlikely recoverability.

A liquidator can pursue certain claims that may result in recoveries for creditors. Importantly, theseclaims are not available to a deed administrator should creditors vote to execute a Deed proposal.

To compare the likely return to creditors under each of a Deed and liquidation, administrators identifyclaims that a liquidator could pursue, including:

voidable transactions and other potential recoveries

findings against past or present directors (including shadow directors and de facto directors),secretaries, other officers and Company advisors for breaches of duties (refer Section 8.3).

Enclosed at (Appendix F) is a Creditor Information Sheet: Offences, Recoverable Transactions andInsolvent Trading published by ARITA, which provides general information for creditors on the typesof claims that a liquidator can pursue.

8.1 Voidable transactions and other potential claims

8.1.1 Background

The Act requires an administrator to specify whether there are any transactions that appear to theadministrator to be voidable transactions in respect of which money, property or other benefits may berecoverable by a liquidator under the Act.


A voidable transaction requires a liquidator to establish:

insolvency at the time of the transaction, or

the Company became insolvent as a result of the transaction.

As discussed in Section 7.6, our preliminary view is that the Company was insolvent from at leastMarch 2012 on the signing of the Referral Agreement or potentially as early as the date ofincorporation. The actual date of insolvency, however, may be difficult for a liquidator to prove.

Our preliminary investigations identified a number of potential voidable transactions totalling c$22.3mwhich may fall into any of the following classifications:

Uncommercial transactions

Unfair loans (not required to prove insolvency to set these transactions aside).

Unreasonable director related transactions (not required to prove insolvency to set thesetransactions aside).

A liquidator, if creditors resolve to wind up the Company at the Second Meeting, would investigatethese transactions (refer details in Section 6) to determine:

if they are voidable

the commerciality of these payments or, alternatively, the classification of voidabletransactions

the recoverability of the payments, assets and/or loans for the benefit of creditors.

A liquidator may consider issuing summonses for the production of records and conducting publicexaminations of past and present officers of entities involved to assist in the investigation of variouspayments made to these parties.

8.1.2 Uncommercial transactions, unfair loans, unreasonable director related transactions

The following payments may constitute one or more of the voidable transaction types summarised atSection 8.1.1.

1. Payments regarding the Land for which the Company did not receive a benefit - c$2m

Bilkurra ($1.4m)

The Company does not appear to have received any benefit for paying $1.4m to Bilkurra aspart payment of the purchase price under the Head Contracts. The Company was notcontracted to purchase the Land and did not own or have a right to the Land - PMA was thecontracted party to acquire the Land from Bilkurra. Whilst PMA executed a nominationagreement nominating the Company as the purchaser under the Head Contract, the HeadContract was rescinded. Regardless, the nomination does not give any rights in the Land tothe nominee.

It is likely that the Company has voidable transaction claim or might be able to assert aconstructive or resulting trust against Bilkurra.

The Administrators lodged a caveat on the Land titles pursuant to cl 6.4 of the Share OptionDeed.

Bilkurra ($600k)

The Company does not appear to have received any benefit for paying $600k to or asdirected by Bilkurra as a ‘cancellation fee’ on the cancellation of the Head Contracts.


2. Payments unrelated to the Land for which the Company did not receive a benefit –c$7.6m

Loans (c$7.2m)

The Company made a number of payments/loans to companies of which Mr Skinner was thesole director at the time of the payments. After the payments were made, Mr Skinner wasreplaced by Mr Ian Stephens as sole director of each company.

Mr Skinner is a principal at EEL and Mr Stephens is the current (sole) director of Bilkurra.Skinner or Evans Ellis Management Pty Ltd was the sole shareholder of the recipient of thepayments. Shareholdings are recorded as ‘not beneficially owned’ which indicates the sharesare held for another (undisclosed) party.

Company records disclose payments were made from the Project Bank Account statementsto:

We have not sighted documents explaining the reasons for these payments, despiterequesting this information from Skinner.

According to Mr Grochowski and Skinner, the loan balances are repayable to Bilkurra ratherthan the Company. Mr Grochowski further advised the payments regarding Gillies did notrelate to the Company.

As such, the Company likely has claims against those companies for either or both of thefollowing:

an outstanding debt

voidable transactions.

We are not aware of any asset holdings by Brookfield Riverside or Gillies, but understandFoscari is the owner of land at 99 Palmers Road Truganina, Vic, 3029 which has beengranted a planning permit for the development of at least 95 apartments.

Unrelated Land (c$420k)

The Company does not appear to have received any benefit for paying $420k towards:

two contracts of sale it executed as purchaser

one contract of sale which PMA executed

for three parcels of land adjacent to the Subject Site.

Loan to:

Date of

transaction

Total payments

made by the

Company

Brookfield Riverside Pty Ltd 28 transactions

made between

12 Jul 2012 to

29 Nov 2013

2,055,000$

Foscari Holdings Pty Ltd 74 transactions

made between

12 Jul 2012 to

23 Dec 2013

4,768,000$

Gillies Road Pty Ltd 9 transactions

made between

30 May 2012 to

23 Dec 2013

351,000$


The Company’s records disclose that the Company paid at least $420,750 to the vendorsunder the above contracts of sale (Note: These properties were sold for a collective sum ofc$1.375m). Following the Company paying $420k, Investment Mutual Holdings Pty Ltd (IMH)was incorporated and purportedly nominated as the ‘substitute purchaser’, receiving thebenefit of the payments made by the Company.

This provides the Company with an interest in the three parcels of land. As such theAdministrators lodged a caveat on 24 September 2015 over these properties.

We expect that a liquidator would:

investigate if the Company contributed more than the $420k towards the balance ofc$950k required to settle the properties

seek to realise its interest in the three parcels of land, applying the proceeds in favour ofcreditor claims.

3. Uncommercial fees and commissions – c$11.9m

PMA fee (c$4.6m) – Potential uncommercial transaction and/or unreasonable director relatedtransaction

As discussed in Section 4.3 and 6.1, As a potential de facto director and/or shadow directorof the Company, Mr Grochowski appears to have engaged PMA (a company of which he isthe sole director and shareholder) as ‘Project Manager’ for the Company under the PMAgreement at terms and rates determined by him, without regard to ‘market rates’.

We have not sighted evidence which indicates that the Company ‘went to market’ or soughtproject manager submissions from parties, before engaging PMA.

Our investigations suggest a project management fee of 19% of revenue is uncommercial.

We also note the total fees paid to PMA (c$4.6m) exceed the total amount contemplated bythe PM Agreement of c$3.2m, being 800 lots (c700 Option Deeds and c107 off-the-plan landsale agreements) at $4k each excluding GST.

In addition, a review of some PMA invoices provided by Mr Grochowski refers to workperformed on other projects such as the Viewpoint development to the west of the SubjectSite. At this preliminary stage of investigations, however, we are unable to form a conclusiveview that the Company made payments to PMA for work performed on other projects.

The PM Agreement provided, amongst other things, that PMA:

would pay ‘project costs’ from the Project Bank Accounts – despite paying at least $7.6mfrom the Project Bank Accounts to parties, other than for ‘project costs’ and the Land.(Note: the PM Agreement defines ‘project costs’ as “all monies and liabilities paid orpayable, expended or incurred … in connection with the Land and with carrying out theLand development”).

must keep and maintain all necessary and proper receipts and expenditure invoices inrelation to the project from which the Company could produce financial accounts

would manage the subdivision and construction of a proposed residential developmentproject on the Land

would perform all activities relating to or necessary in the day to day management andco-ordination of all phases and facets of the Land development to completion anddelivery

was entitled to charge $4,400 including GST per lot with a minimum monthly charge(accrued fee) of $55k including GST.


Selling agent commissions (c$7.3m) – Potential uncommercial transaction

Our preliminary investigations disclose that the Company paid c$7.3m, to Property Choice.Property Choice is a licenced real estate agency used by the Company and 21st CenturyDirect Pty Ltd (formerly known as Property Direct (International) Pty Ltd).

Based on Property Choice invoices we have sighted, the c$7.3m appears to be forcommission. However, we have not been provided with documentation between the partieswhich evidences the relationship between the parties or the services to be provided. Despiteour request of Property Choice to provide this evidence, they have not done so.

Regardless, we consider:

commissions of 30% to be excessive and may constitute an uncommercial transaction

payment terms of 30 days from invoice may be uncommercial considering:

Option Fees were due to be refunded to Option Holders if the Head Contractsfailed to complete (Note: this occurred on 28 June 2013)

the Company had not fulfilled its obligations to enable Option Holders to exercisetheir Options

The invoices from Property Choice show a commission of $12,500 (including GST) wascharged for each Option Deed, with payment required to be made to Colin Adno & AssociatesPty Ltd Law Practice Trust Account. Colin Adno is also the sole director of Summit Propertyand Business lawyers Pty Ltd trading as Summit Law which acts for the majority of OptionHolders and Purchasers. Based on searches, both law firms operate from the same addressand with the same telephone numbers.

A Liquidator, should the creditors resolve to wind up the Company at the Second Meeting,may investigate the potential conflict for Mr Adno.

Referral agent commissions (c$133k – unpaid and therefore not included in the total ofc$11.9m above) – potential uncommercial transactions

In addition to the above, at the First Meeting we received two POD’s from creditors claimingoutstanding referral/introductory fees:

$133,000 (being $7,000 per Option Deed on 19 Option Deeds). These fees weresupported by a Referral Agreement entered into with the Company on 1 March 2012.These fees have not been paid and remain outstanding.

$42,000 for ‘Referral/Introducer Fees’ during the period ‘late 2011 to mid-2013’. Thisclaim was not supported by an agreement or any other details and was subsequentlywithdrawn (refer Section 8.3).

Our preliminary view is that the above transactions were uncommercial as the Company wasinsolvent at the time of entering into these transactions or became insolvent as a result of thetransactions.

In addition, we do not understand why the Company would be liable for both commission andreferral fees.

We note that the direct fees and commissions charged by the sales agent and referral agent(combined with PMA fees as a Related Party as per above) total 68% of Option Fees receivedby the Company (refer table below).


Note: Under the Referral Agreement, a referral fee is payable on 22 nominated lots. We have not

sighted other referral agreements so the above may not reflect the payment of fees and commissions

from all Option Deeds.

A Liquidator, if creditors resolve to wind up the Company at the Second Meeting, wouldinvestigate these transactions further to determine if they were uncommercial and considerwhether the payments should be set aside for the benefit of creditors

4. Classification to be determined - $761k

As noted in Section 6.1, c$761k was disbursed from the EEL trust account in favour ofseveral parties. We have not sighted evidence to explain the 10 payments comprising thec$761k but note that a liquidator will likely investigate these relationships and potential conflictas per above, and consider whether the payments should be set aside for the benefit ofcreditors.

8.1.3 Unfair preferences

We have not identified any unfair preference claims.

As discussed in Section 7.7, a Creditor’s Statutory Demand was dismissed by consent of theSupreme Court on 5 May 2015 without further payments made during the six months beforeadministration.

8.1.4 Arrangements to avoid employee entitlements

We have not identified any of these arrangements.

8.1.5 Voidable security(ies)

As discussed in Section 4.3, a search of the PPSR did not reveal any security interests registeredover any Company assets.

8.2 Insolvent trading

8.2.1 Background

As discussed in Section 7.6 above, our preliminary view is that the Company was insolvent from atleast March 2012 being the date of signing of the Referral Agreement or potentially as early as thedate of incorporation.

A liquidator, should creditors resolve to wind up the Company at the Second Meeting, will conductmore detailed investigations in this regard.

Insolvent trading is when a company incurs a debt at a time when:

the company was insolvent or became insolvent by incurring the debt

Details

Payments

made/due

by the

Company %

Average Option Fee 35,000

Less payments (rate per Option):

PMA fees (4,400) 13%

Property Choice commissions (12,500) 36%

Referral fees (7,000) 20%

Net funds available per Option after agent fees 11,100 32%


there were reasonable grounds to suspect the Company was insolvent or would become soas a result of incurring the debt.

Company directors have a duty to prevent insolvent trading by not incurring debts when there arereasonable grounds for suspecting that the company is or will be unable to pay its debts as and whenthey fall due.

The objective test or standard of measure in deciding whether insolvent trading has occurred iswhether a director can demonstrate that their actions are at the same degree and level that would berequired of an ordinary reasonable person holding a similar position and responsibility in the samecircumstances.

A director (including shadow director and/or de facto director) who fails to prevent a company fromincurring a debt at a time when there are reasonable grounds for suspecting that the company isinsolvent, or will become insolvent by incurring that debt, contravenes s588G of the Act.

Creditors should note that only a liquidator or an individual creditor with the liquidator’s permissioncan bring an action against a director for breach of s588G. An administrator or deed administratorcannot pursue a director for recoveries from contraventions of s588G of the Act.

A liquidator may recover from a director the amount of loss or damages suffered by acreditor (s588M).

8.2.2 Quantum

The potential quantum of an insolvent trading claim would be capped at the level of debt incurred butunpaid from incorporation which was $24.2m according to the Project Bank Account statements.

In the absence of issuing summonses for information and examining relevant parties (Appendix I), itis difficult to quantify recoveries from insolvent trading claims.

8.2.3 Director defences

Our investigations regarding whether the Company directors (including the former director John Woodand Mr Grochowski as a potential de facto director and/or shadow director – see Section 4.1) mayhave breached their statutory obligations or general law fiduciary duties are continuing.

Defences available to directors under the Act in regard to allegations of insolvent trading are:

the director had reasonable grounds to expect, and did expect, that the company was solventat that time and would continue to be solvent if it incurred the debt.

the director had reasonable grounds to believe that a competent and reliable person wasresponsible for providing adequate information about whether the company was solvent andthat person was fulfilling the responsibility and it was expected, that on the basis of theinformation provided, that the company was solvent and would continue to be solvent whenthe debt was incurred.

at the time the debt was incurred the director, due to illness or other good reason, did not takepart in the management of the company.

the director took all reasonable steps to prevent the company from incurring the debt.

8.3 Offences

Registered directors and officers (including de facto directors and/or shadow directors) have duties,obligations and responsibilities in relation to common law and statute.

8.3.1 Corporations Act 2001

Based on our investigations to date, it is likely the shadow director (Mr Grochowski) has breached atleast one or more of the following director duties detailed at sections 180 to 184 of the Act:

duty to exercise care and diligence as a reasonable person would exercise

duty to act in good faith and for a proper purpose in the best interests of the Company

duty not to use his position to gain an advantage


duty not to cause detriment to the corporation.

If the creditors resolve to wind up the Company at the Second Meeting, we consider that furtherinvestigations of these likely breaches are warranted under Part 2D.1 – Division 1 of the Act.

A liquidator can conduct more thorough investigations and identify potential offences and recoveries(if any).

If a director breaches any duties, obligations and responsibilities, they may be subject to civil andcriminal penalties including:

compensation to the Company for damages resulting from the contravention

fines (up to $200,000)

imprisonment (up to five years)

disqualification from managing corporations.

8.3.2 Other Legislation

In addition to offences under the Act, directors and others may commit offences in respect of theCompany under other legislation, for example:

Taxation laws

Trade Practices Act

Fair Trading Act.

Our preliminary investigations have identified the following possible breaches:

Failure to lodge Company taxation returns and BAS returns from 2012.

8.4 Directors and officers insurance policy

A Directors and Officers insurance policy (D&O Policy) offers liability cover for company officers toprotect them from claims which may arise from the decisions and actions taken within the scope oftheir regular duties. Such policies cover the personal liability of company directors and officers.

We have not identified any D&O Policy that would be available in the event that a liquidatorsuccessfully claimed against Company management for any breach of their duties.

8.5 Director’s personal financial position

When a liquidator assesses the commercial merit of pursuing a claim, a key consideration is thecapacity of the defending party to satisfy the claim.

We completed an initial search of publicly available records for assets held by the estate of JohnWood and Mr Grochowski. At this time, we do not intend to disclose the details of these searches,however, we understand that the former director’s estate and shadow director do not own assetsagainst which recoveries could be made.

Should creditors resolve to place the Company into liquidation at the Second Meeting, a liquidatorwould continue investigating the former director’s estate and shadow director’s financial positions.

8.6 Public examinations

The Act provides that an ‘eligible applicant’, such as an administrator, deed administrator or liquidator,may examine company officers about its ‘examinable affairs’ and any other person who may be ableto provide information relating to such affairs. ‘Examinable affairs’ is a comprehensive term with wideranging application and includes:

the promotion, formation, management, administration or winding up of the company

other affairs of the company


the business affairs of a connected company of the company insofar as they appear to berelevant to the company or its affairs.

If the Court is satisfied that a summons for examination should be issued, the examinee is usuallyrequired to produce at the examination any specified books that are in the person’s possession andrelate to the corporation.

We applied to the Federal Court to issue a summons to Mr Grochowski to attend Court on 14September 2015 to deliver Company books and records and to be available for examination. The nextCourt date in the Mr Grochowski examination timetable is 30 October 2015.

Should creditors vote to wind up the Company, we expect that a liquidator will:

proceed with the public examination of Mr Grochowski and other persons of interest subject toavailable funds to meet the associated costs of investigating the likelihood of:

recoveries of voidable transactions and other potential recovery actions

recoveries of payments made without supporting documentation and unrelated to theLand development

insolvent trading

breaches of duties.

seek support and funding from ASIC to cover associated costs.

A list of Relevant Parties to be considered for public examination is attached at Appendix I.

Public examinations are expensive, involving:

issuing summonses requiring relevant parties to attend

interviewing parties associated with voidable transactions

reviewing the Company’s books and records, etc.

8.7 Reporting of offences to ASIC

Administrators are required to complete and lodge a report with ASIC pursuant to s438D of the Actwhere it appears that:

a past or present officer (including de facto and/or shadow director) of a company may havecommitted an offence

money or property has been misapplied or retained

a party is guilty of negligence, default, breach of duty or breach of trust in relation to acompany.

Since our appointment, we have had several discussions with ASIC representatives and arecontinuing to liaise with them in regard to our investigations.

The Administrators intend lodging a s438D report to ASIC prior to the Second Meeting.

A liquidator is required to lodge a report of his findings with ASIC, pursuant to s533 of the Act.

Creditors should also be aware that any report lodged pursuant to s438D (or an investigative reportlodged by a liquidator pursuant to s533 of the Act) is not available to the public.


8.8 Costs of investigations and pursuing recovery actions

Creditors should note that investigation and recovery actions:

may be expensive, lengthy and with uncertain outcomes

should not be commenced unless defendants have the financial resources to satisfy anyjudgement (this may be difficult to establish)

must be funded by existing assets, creditor funding or external litigation funders. Litigationfunders are likely to require a significant share of the proceeds of any judgement as acondition of funding the litigation.

As stated above, we expect a liquidator, if the creditors resolve to wind up the Company, may seekfunding from ASIC to continue investigations.

8.9 Funding investigations and recoveries

Should creditors resolve that the Company be wound up and a liquidator appointed, it is likely theliquidator will be substantially without funds to meet the costs of any recovery actions that may beavailable to pursue.

In these circumstances, the liquidator may:

invite creditors to consider providing funding to conduct further investigations of voidabletransactions or other potential recovery actions detailed in the preceding paragraphs

seek external funding from a litigation funder in exchange for a share of any recoveredproceeds

seek financial support from ASIC.


9. Deed of Company Arrangement (Deed)

A Deed is a binding agreement between a company and its creditors setting out how a company’saffairs will be dealt with. It aims to maximise the chances of the company, or as much as possible ofits business continuing to exist, or providing a better return to creditors than would be achieved bywinding up the company.

Creditors can vote that the Company execute a Deed at the Second Meeting if one is proposed.

We received one Deed proposal for the Company - the Bilkurra Deed Proposal, plus correspondencebetween our solicitors and Bilkurra’s solicitor (attached at Appendix H).

9.1 Key features

The key features of the Bilkurra Deed Proposal are:

Payment into a Deed Fund of $300,000 within 30 days after the Deed’s execution.

Trade Creditors (unsecured creditors other than Option Holders and Purchasers) who havealready submitted proofs of debt (POD) to the Administrators are to be paid out or to havetheir claim satisfied by “other agreed arrangement” on or before execution of the Deed.

All creditors are bound to the extent of their claim on or before the date of the Administrators’appointment (referred to as the ‘Relevant Date’).

The Deed Administrators are to remove the caveat lodged over the Land.

The Deed Fund will be applied towards payment of the Deed Administrators’ andAdministrators’ remuneration and expenses. However, it is insufficient to meet them in full.

Trade Creditors who have not lodged a POD prior to execution of the Deed are to receive adistribution from the Deed Fund, but only after it has been applied to the Administrators (bothAdministrators and Previous Administrators) and Deed Administrators’ fees. (Note: theproposed Deed Fund is insufficient to provide a distribution to creditors after payment ofAdministrators’ fees and costs).

Novation of liabilities under the Option Deeds to Bilkurra by way of deed poll and a proposalthat Bilkurra will pay any associated stamp duty costs on behalf of Option Holders

Bilkurra intends to enter into separate individual deeds of novation with each Option Holderand Purchasers of off-the-plan land sale contracts, within the first few months of thecommencement of the Deed.

The transfer of Purchasers’ deposits for off-the-plan land sales to Bilkurra.

The Deed to terminate when all the Deed obligations are complied with

The wording of the current Bilkurra Deed Proposal is confusing as to when the creditor PODadjudication is to take place. It may be that the Bilkurra Deed Proposal timetable may notalign with the POD timeframe prescribed by the Act.

9.1.1 Administrator’s opinion on Deed

Summary


conclude the Company will be restored to solvency at the date of effectuation of the Deed andtherefore preserve the Company’s business

determine that Company creditors will receive a greater return than in a liquidation (ie theamount of the Deed Fund, including the precise property to constitute the Deed Fund andother contributions to the Deed Fund have not been specified)

recommend that the creditors resolve to accept the Bilkurra Deed Proposal at the SecondMeeting.


Key comments:

the Bilkurra Deed Proposal is heavily qualified and does not provide certainty to all creditors –various clauses contain proposed commitments without binding Bilkurra to complete thosecommitments

we are concerned that the Deed is designed, in part, to avoid the scrutiny of liquidation.Courts have made clear that a Deed of Company Arrangement can be set-aside on thatbasis. We consider that this is a highly relevant factor for creditors to consider

Bilkurra’s solicitors have refused to identify the individuals giving them instructions on theproposal, despite our specific request that they do so. On the basis of earlier correspondencewith EEL, we suspect that someone other than the director of Bilkurra, eg Mr Grochowski orothers, is providing the instructions. The refusal to provide the requested details is of itself aconcern.

the Bilkurra Deep Proposal is silent on what will happen to the control of the Company andthe assets and potential claims that may be available to it

specific clauses in the Annexure to the letter from EEL dated 12 October, vary from thebroader summary provided in the cover letter making the Bilkurra Deed Proposal unclear onkey matters such as how trade creditors will be paid – out of the Deed Fund or by separatearrangement with Bilkurra.

the Bilkurra Deed Proposal, as currently framed, is likely to be unfairly prejudicial to someunsecured creditors

the proposed Deed Fund is insufficient to cover the creditors who are given priority by theCorporations Act (including the Administrators and Previous Administrators) so those tradecreditors who have not submitted a POD prior to execution of the Deed will not receive adistribution from the Deed Fund. This may be unfairly prejudicial and contrary to the intent ofthe legislation.

Specific comments in response to the EEL cover letter dated 12 October 2015:

Cl 3 – Bilkurra has no basis to comment on the reasonableness of the Deed Fund as it hasnot been privy to the Administrators’ investigations and findings detailed in this Report.

Cl 4 - 7– Bilkurra is a separate entity from Midland and is not in a position to comment on thetrue extent of claims against the Company from Trade Creditors including creditors such asthe ATO.

Cl 8 and 9 – Bilkurra has not provided detail about how it will take on any duties andobligations owed by Midland to the Option Holders and Off-the-plan Purchasers and there isnothing in the proposal to compel Bilkurra to enter into the individual deeds of novation towhich it refers and cover any applicable duties.

Cl 13 – The Administrators need to form a view on the likelihood of Bilkurra contributing to theDeed Fund and completing the Land development according to the Option Deeds and off-the-plan sale contracts. Without reviewing the documents EEL asserts Bilkurra has in itspossession, the Administrators have concerns about Bilkurra’s ability to complete the BilkurraDeed Proposal and the Land development.

Cl 14 – Without evidence from Bilkurra, we are unable to comment on Bilkurra’s ability tocommence and complete civil infrastructure and other obligations necessary to progress andcomplete the proposed subdivision.

Cl 16 (c) – Our inquiries inform us that the utility authorities have not approved the proposeddevelopment, but have provided only an indicative approval based on functional (high-level)drawings. The CoB will not guarantee the granting of a planning permit within a specifiedperiod.


Other observations on the Bilkurra Deed Proposal:

Bilkurra has not provided any evidence of its ability to:

make a contribution to the Deed Fund

source contributions to the Deed Fund from third parties (with appropriate guaranteesand indemnities)

complete obligations with off-the-plan Purchasers prior to June 2017 (being the earliestsunset date in those agreements)

obtain a planning permit prior to 2022 (being the earliest trigger date for Option Holdersto exercise those options before they expire), or alternatively, to refund Option Fees toOption Holders.

The proposed Deed Fund is insufficient to:

make full payment of the Deed Administrators’ and Administrators’ remuneration andexpenses

result in any distribution to the Trade Creditors who have not already lodged a proof ofdebt with us whether by payment or other agreed arrangements

make any payment to Option Holders in respect of the return of their Option Fees.

It is not clear how Bilkurra will pay out those Trade Creditors which have already lodged aproof of debt – whether the payment is to be made from the Deed Fund or separately byBilkurra. If the return to trade creditors is to be sourced from the Deed Fund, it is insufficient topay any amount

The Deed Proposal states that Bilkurra may contribute an additional sum to the Deed Fund todeal with creditor claims submitted after execution of the Deed, but no detail is provided as tothe amount to be contributed or in what circumstances Bilkurra would do so.

Bilkurra has not provided a copy of terms to be included in the proposed deed poll for theAdministrators to determine if the Company can enter into the proposed arrangements withOption Holders and Purchasers. It has said a draft will be provided prior to the SecondMeeting.

There is no certainty or detail provided in respect of the suggestion that Bilkurra will enter intoindividual deeds of novation with each Option Holder and Purchaser. This has not beenexpressed as a binding obligation.

There is no certainty that Bilkurra will vary the terms of any Option Deed so that it will paystamp duty on behalf of any Option Holder who exercises the option and completes thecorresponding off-the-plan contract of sale. At present, the offer to do so is expressed as apossibility, not a binding obligation.

When the object of a deed is to preserve a company’s business, the legislation does notassume that the creditors will be paid in full. It is not clear to us, however, that the intention ofthe Bilkurra Deed Proposal is to preserve the Company’s business. If it is not possible for theCompany or its business to continue in existence, then there is an onus on thoseproposing/supporting the Deed to show that it results in a better return for the Company’screditors and members than would result for an immediate winding-up of the Company. TheBilkurra Deed Proposal does not do that. In fact, the proposal will likely result in someunsecured creditors receiving nothing while others will receive payment in full. This is unfairlyprejudicial and may be foundation for an application to have the Deed set aside. We are notaware of any business Midland will now undertake as the:

Option Fee proceeds have been spent by Midland

Land is owned by Bilkurra.


Where a creditor would have a particular priority under the Act or other legislation if acompany were to be wound-up (placed into liquidation), then as a general rule, the Courts donot approve or permit in a Deed of Company Arrangement any other regime of distribution ofthe company’s assets which would disturb that priority. The Bilkurra Deed Proposal isunusual in this regard as it seems to provide for some unsecured creditors to receive paymentin full while the Administrators and Deed Administrators (who have a statutory priority) will notreceive full payment.

We are concerned that the Deed is both unfairly prejudicial to some creditors and isconsistent with the object of limiting the investigations to be undertaken. This might berelevant to any party who might make an application to set-aside the Deed. Specifically, theDeed:

does not provide for full payment of the Administrators and the Deed Administrations’remuneration and expenses

provides for certain unsecured Trade Creditors to be paid in full

leaves other unsecured Trade Creditors with no distribution.

While the Bilkurra Deed Proposal has a number of shortcomings, it does provide somecertainty as compared with the unknown outcome for creditors from a liquidation. It may bethat if the proposed distribution mechanisms and deed poll are clarified, that the outcome willbe more certain.

The Bilkurra Deed Proposal states that a draft deed poll will be provided to us before the SecondMeeting. We have been communicating with Bilkurra’s solicitors in respect of the proposal and it maybe that in light of our comments, they will provide more details and clarify the proposal prior to theSecond Meeting.

We will table any further information relating to the Bilkurra Deed Proposal, or any other Deedproposals, received after this Report at the Second Meeting.

9.1.2 Estimated return to creditors

We are not able to estimate creditors’ returns under the Bilkurra Deed Proposal as the assets andcontributions comprising the Deed fund and the method of distribution have not been specified withsufficient clarity.

Our calculation of estimated creditors’ returns under the Bilkurra Deed Proposal, with a comparison tothe estimated returns under the other options available is provided in Section 10.

9.2 Deed general information

If creditors decide to vote for a DOCA:

the Company must sign/execute the DOCA within 15 business days of the Second Meeting,otherwise the Company automatically proceeds into liquidation. The court can allow longertime if required.

unsecured creditors will be bound by the DOCA, even if they vote against the proposal.

property owners, lessors, and secured creditors who vote in favour will be bound by theDOCA.

the court can bind any creditor to the DOCA.


10. Estimated return to creditors

Detailed below is a comparison of the estimated returns to creditors under a ‘high’ and ‘low’ caseliquidation scenarios and the Bilkurra Deed Proposal scenario.

Based on the assumptions detailed, we estimate a return to creditors in liquidation of between 14 and55 cents.

The Bilkurra Deed Proposal is unclear in terms of amounts, timing and source of funds Bilkurraintends to make available, in addition to the Deed Fund (if any). We are unable to estimate the returnto creditors under the Bilkurra Deed Proposal. As is detailed in Section 9, the proposed Deed Fund isinsufficient to:

make full payment of the Administrators’ and Deed Administrators’ remuneration andexpenses

result in any distribution to the Trade Creditors who have not already lodged a POD with usprior to the execution of the Deed - whether the distribution be by payment or other agreedarrangements

make any payment to Option Holders for the return of their Option Fees.

Reportsection and

notes

Liquidation Deed

Low $’000 High $’000 $’000

Circulating assets

Voidable transaction claims Note 1 andSection 8.1

22,300 22,300 0

Insolvent trading claims Note 2 andSection 8.2

1,900 1,900 0

Other claims 0

Total voidable transactions and otherpotential claims

24,200 24,200 0

Estimated recovery rate scaled at25% (low) and 75% (high)

Note 3 6,050 18,150

Deed contribution Section 9 300

Less Administrators’ costs (including thecurrent Administrators’ cost, PreviousAdministrators’ costs and respectivelegal fees and other disbursements)

(757) (757) (837)

Liquidators’/Deed Administrators’ costs (600) (550) (300)

Contingency including realisation costs(20%)

(1,210) (3,630)

Total circulating assets less costs 3,483 13,213 Nil

Unsecured creditor claims: Section 4.3.3 (222) (222) (222)

Related entities Section 4.3.4 (128) (128) (128)

Option Holders (23,812) (23,812) (23,812)

Total unsecured creditors (excludingcontingent creditors)

(24,162) (24,162) (24,162)

Return to other creditors fromcirculating assets (cents in thedollar)

14 cents 55 cents Nil

Estimated distribution timing 12 months 12 months 6 months


This table assumes there will be available funding for investigation costs and recovery actions. In theabsence of adequate funding, the return to creditors will be less than forecast, potentially no return tocreditors after costs and priority claims under the Act.

The table does not include:

other creditors which have not lodged a POD (such as the ATO) which may be eligible toclaim as a creditor of the Company

contingent creditor claims such as Purchasers of off-the-plan land sale contracts.

Notes

1. Voidable transactions and other potential claims – despite requests of various parties toprovide documentation supporting various transactions and payments, they have not done so.Without these agreements, it is difficult to estimate with absolute certainty the likely return in aliquidation scenario. A liquidator would likely issue summonses on parties requiring theprovision of this information and potentially conduct public examinations of associated partiesto ascertain the nature and the ultimate recoverability of each transaction.

We have identified c$22.3m of potential voidable transactions (refer Section 8) and otherclaims which a liquidator would likely investigate and commence recovery actions. Creditorsshould note, pursuing recovery actions by a liquidator have uncertain outcomes and are usuallyexpensive.

2. Insolvent trading claims – The total amount potentially available to a liquidator to pursue asinsolvent trading claims is c$24.2m. This amount includes the c$22.3m of potential voidabletransactions detailed in Note 1 above. Any amount we recover as a voidable transaction or debtclaim may reduce the amount available as an insolvent trading claim as liquidators are unableto recover the same amount twice (hence we have only shown the balance of $1.9m in thetable above).

3. Estimated recovery rate and scaling- Based on our investigations to date and ourexperience, we estimate recoveries of voidable transactions and insolvent trading claims mayrange between 25% and 75% (ie $6.05m - $18.15m).


11. Administrators’ recommendation

Key recommendation

We recommend that it is in the creditors’ best interests that the Company be wound up (ie placed intoliquidation)

Our opinion of each option available to creditors is discussed below.

11.1 Liquidation

Our preliminary view is that the Company was insolvent from at least 1 March 2012 on the signing ofthe Referral Agreement and potentially as early as 7 September 2011 (refer Section 7). Significantfurther investigation would be required by a liquidator in order to reach a conclusion on this issue.Creditors should note that insolvent trading claims are difficult and costly to pursue, and even ifsuccessful they may not generate an additional return for creditors.

A liquidator, if creditors resolve to wind up the Company at the Second Meeting, would be in aposition to conduct detailed investigations into the circumstances leading up to the appointment of theAdministrators.

A liquidator will be empowered to:

pursue various potential recoveries under the Act, such as voidable transactions (Section 8)

distribute recoveries made in accordance with the priority provisions of the Act

complete thorough investigations into:

the Company’s dealings and affairs

actions of the director(s)

report findings to ASIC pursuant to the Act.

These tasks are necessary in order to properly assess the likelihood and quantum of returns tocreditors, however, a liquidator would need funding to perform these tasks.

A return of up to 55 cents in the dollar may be available to the remaining creditors in the Companydepending on the collectability of loans.

11.2 Deed

We received the Bilkurra Deed Proposal for the Company as discussed in Section 9 and included inAppendix H.


conclude the Company will be restored to solvency at the date of effectuation of the Deed andtherefore preserve the Company’s business; or

determine that Company creditors will receive a greater return than in a liquidation.

We do not recommended creditors resolve to enter into the Bilkurra Deed Proposal as we are unableto quantify the likely return to creditors if the Company is wound up (ie liquidation) and, hence,determine whether the Bilkurra Deed Proposal will provide a greater return to creditors than if thecompany were wound up.

The proposed Deed Fund is insufficient to pay any amount to:

ordinary unsecured trade creditors who have not submitted a proof of debt to theAdministrators prior to the Deed’s execution

the Option Holders.


This is unfairly prejudicial and can be a ground to set aside a Deed of Company Arrangement.

11.3 Administration to end

While our investigations are continuing, it is evident that the Company is insolvent and unable to payits debts as and when they fall due (Section 7). Accordingly, returning control of the Company to thedirector would be inappropriate in the present circumstances.


12. Enquiries

Should you have any enquiries please contact the Midland Hwy Pty Ltd (Administrators appointed)Insolvency Line on 1300 853 598, or emailing a request to [email protected].

DATED this 14th day of October 2015

Nicholas Martin and Craig CrosbieAdministrators


Appointment of Proxy, Proof of Debt or ClaimA.

Form – Form 532

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Subregulation 5.6.29FORM 532

Corporations Act 2001APPOINTMENT OF PROXY

Midland Hwy Pty Ltd(Administrators Appointed) (the Company)

ACN 153 096 069

A. Appointment of a proxy

I/We, ………………………………………………………………………………………………………………………..(If a company, strike out “I” and set out full name of the company)(Note: If a corporate creditor, such as a trustee of a self-managed superannuation fund, wants to be represented at the Second Meeting, it must approve an individual to act on itsbehalf by completing this proxy form)

of ……………………………………………………………………………………………………………………………(address)

a creditor of the Company appoint………………………………………………………………………………………

as my/our proxy, or in his/her absence…………………………………………………, to vote at the meeting of creditors

to be held on 21 October 2015 at The Institute of Chartered Accountants, Level 3/600 Bourke Street, Melbourne,

Victoria at 10:00 am or at any adjournment of that meeting.

B. Voting directions

Option 1: ☐ If appointed as a general proxy, as he/she determines on my/our behalf(Please proceed to section C ie do not complete the table below)

and/or

Option 2: ☐ If appointed as a special proxy in the manner set out below:(Please complete the table below before proceeding to section C)

No Resolution For Against Abstain

1To fix the Administrators’ remuneration (representatives of PPBAdvisory) for the period 2 July 2015 to 14 July 2015 at $44,229.50plus GST

☐ ☐ ☐

2To fix the Administrators’ remuneration (representatives of HallChadwick) for the period 14 July 2015 to 4 August 2015 at$103,371.50 plus GST

☐ ☐ ☐

3To fix the Administrators’ remuneration (representatives of PPBAdvisory) for the period 5 August 2015 to 12 October 2015 at$360,491.50 plus GST

☐ ☐ ☐

4

To approve the Administrators’ remuneration for the period 13October 2015 to 20 October 2015, up to a maximum of $100,000.00plus GST, as set out in the Remuneration Report dated 14 October2015.

☐ ☐ ☐

5

(if applicable)

To approve the Administrators’ remuneration from 21 October 2015to the date of Deed’s execution, up to a maximum of $80,000 plusGST, as set out in the Remuneration Report dated 14 October 2015.

☐ ☐ ☐

6

(if applicable)

To approve the Deed Administrators’ remuneration for the period21 October 2015 to the conclusion of the Deed of CompanyArrangement up to a maximum of $300,000.00 plus GST, as set outin the Remuneration Report dated 14 October 2015.

☐ ☐ ☐

7

(if applicable)

To approve the Liquidators’ remuneration for the period 21 October2015 to the conclusion of the Liquidation up to a maximum of$600,000.00 plus GST, as set out in the Remuneration Report dated14 October 2015.

☐ ☐ ☐

8 The Company be wound up ☐ ☐ ☐

9 The Company to execute a Deed of Company Arrangement (DOCA) ☐ ☐ ☐

10The Administration should end (and control revert to the Company’sdirector)

☐ ☐ ☐

11

(if applicable)

If the Company is wound up or creditors resolve that the Companyexecute a DOCA, that a Committee of Inspection be formedcomprising representatives nominated who have provided theirconsent to the meeting of creditors

☐ ☐ ☐

C. Signature (in accordance with Sections 127 or 250D of the Corporations Act 2001)

If the creditor is an individual

……………………………………………………

If the creditor is a company

……………………………………………………….Director/Company secretary

……………………………………………………….Print name

Dated this day of 2015

CERTIFICATE OF WITNESSPlease Note: This certificate is to be completed only where the person giving the proxy is blind or incapable of writing. Thesignature of the creditor is not to be attested by the person nominated as proxy.

I, _______________________________________ of ____________________________________________certify that theabove instrument appointing a proxy was completed by me in the presence of and at the request of the person appointing the proxyand read to him before he attached his signature or mark to the instrument.

Signature of witness: _________________________________

ACN: 153 096 069 Subregulation 5.6.49(2)

FORM 535Corporations Act 2001

FORMAL PROOF OF DEBT OR CLAIM (GENERAL FORM)

To the Administrators of Midland Hwy Pty Ltd (Administrators Appointed) (the Company)

1. This is to state that the Company was on 2 July 2015, and still is, justly and truly indebted

to ....................................................................................................................................(Creditor)

(Note: A proof of debt is only valid if the correct name of the creditor is provided i.e. a self-managed superannuation fund or

Trustee)

of .....................................................................................................................................(address of creditor)

for $.....................………………..

Particulars of the debt are:

Date

(date when the debt arose)

Consideration

(state how debt arose and attachsupporting documentation)

Amount ($) Remarks

(include details of vouchersubstantiating payment)

2. To my knowledge or belief the Creditor has not, nor has any person by the Creditor's order, had orreceived any satisfaction or security for the sum or any part of it except for the following(insert particulars of all securities held. If the securities are on the property of the company, assess the value of those securities. If

any bills or other negotiable securities are held, show them in a schedule in the following form).

Date Drawer Acceptor Amount

($c)

Due Date

*3A. I am employed by the Creditor and authorised in writing by the Creditor to make this statement. I know that the debtwas incurred for the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaidand unsatisfied.

*3B. I am the Creditor's agent authorised in writing to make this statement in writing. I know that the debt was incurredfor the consideration stated and that the debt, to the best of my knowledge and belief, remains unpaid andunsatisfied.

* Items 3A & 3B - delete both if the Creditor is a natural person and this proof is made by the Creditor personally. In other cases,if, for example, you are the director of a corporate Creditor or the solicitor or accountant of the Creditor, you sign this form as theCreditor’s authorised agent (delete item 3A). If you are an authorised employee of the Creditor (credit manager etc), delete item3B.

I have attached the following documents (tick as many as appropriate):

☐Invoices ☐Judgement from Court ☐Letters of demand ☐Orders from Company

☐Monthly statements ☐Statutory demand ☐Credit application ☐Guarantee from Company

☐Creditors authority letter ☐Other documents

Dated ……/…../……. Name …………………………...………Signatory…………….………………….

Phone ………………………………….. Email address………………………………………………………...Co

mp

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B. Remuneration report dated 14 October 2015

Remuneration reportMidland Hwy Pty Ltd(Administrators Appointed) (theCompany)ACN 153 096 069

1. Remuneration declaration


3. Description of work completed / to becompleted

4. Calculation of remuneration

5. Statement of remuneration claim

6. Remuneration recoverable from externalsources

7. Disbursements

8. Summary of receipts and payments

9. Questions

10. Annexures

2


We, Nicholas Martin and Craig Crosbie of PPB Advisory, have undertaken a proper assessment ofthis remuneration claim for our appointment as joint and several Administrators of the Company inaccordance with the law and applicable professional standards. We are satisfied that theremuneration claimed is in respect of necessary work, properly performed, or to be properlyperformed, in the conduct of the administration.

Dated this 14 day of October 2015

Nicholas Martin and Craig CrosbieAdministratorsMidland Hwy Pty Ltd (Administrators Appointed)


To date, no remuneration has been approved and paid in this administration. This remunerationreport details approval sought for the following fees:

Period ReportReference

Amount(ex GST)

Current remuneration approval sought:


Resolution 1: 2 July 2015 to 14 July 2015 Annexure 1

Remuneration Reportdated 27 July 2015

$44,229.50

Resolution 2: 14 July 2015 to 4 August 2015 Annexure 2

Hall ChadwickRemuneration Report

$103,371.50

Resolution 3: 5 August 2015 to 12 October 2015 Annexure 3 $360,491.50

Resolution 4: 13 October 2015 to 20 October 2015 Annexure 4 $100,000.00

Resolution 5: 21 October 2015 to execution of a Deed Annexure 5 $80,000.00

Deed of Company Arrangement

Resolution 6: 21 October 2015 to completion of Deed of CompanyArrangement

Annexure 6 $300,000.00

Liquidation**

Resolution 7: 21 October 2015 to completion of Liquidation Annexure 7 $600,000.00

* Approval for the future remuneration sought is based on an estimate of the work necessary to the completion of theadministration. Should additional work be necessary beyond what is contemplated, further approval may be soughtfrom creditors.

** Creditors will resolve only one of these resolutions, determined by whether the creditors resolve that the Company bewound up or execute a Deed or that the administration should end.

3

Please refer to report section references detailed in the above table for full details of thecalculation and composition of the remuneration approval sought.

3. Description of work completed / to be completed

Resolution 1

We were Administrators of the Company during the period from 2 July 2015 to 14 July 2015 onwhich date creditors resolved to replace us with messrs Ross and Albarran of Hall Chadwick. Ourremuneration report for this period is attached as Annexure 1.

Resolution 2

Messrs Ross and Albarran of Hall Chadwick were the Administrators of the Company for theperiod from 14 July 2015 to 4 August 2015. A copy of the remuneration report prepared by HallChadwick is attached as Annexure 2.

Resolution 3

Summary of work undertaken by Nicholas Martin and Craig Crosbie, Administrators of theCompany and their staff for the period 5 August 2015 to 12 October 2015.

Task Area General Description Includes

Assets

33.50 hours

$15,295.50

Real Property Liaising with the Bendigo City Council regardinginformation on planning permit applications for theHermitage development plan

Obtaining independent advice from real estate expertsregarding the Hermitage development plan

Performing searches and collating various propertyinformation regarding the Land, 99 Palmer's Road,Truganina and Unrelated Land at 1650 MidlandHighway

Investigating interest in land and instructing solicitors tolodge caveats over properties where the Company hadmade deposit and instalment payments

Reviewing draft caveats over the Land and UnrelatedLand

Obtaining legal advice regarding the caveats

Corresponding with other relevant parties regardinglodgement of the caveats

Conducting various searches on other properties inwhich the Company may have an interest

Debtors Reviewing our reconstructed funds flow analysis andCompany books and records to identify potential assetsand recoverable payments (e.g. loan and propertypayments)

Interviewing Grochowski and representatives from EELregarding legal advice in relation to the payments forpotential assets

Seeking legal advice regarding the recovery of variousloan payments

4


Instructing solicitors to draft statutory demands fordebts owed to the Company

Creditors

317.10 hours

$141,418.50

Creditor Enquiries Dealing with numerous creditors’ enquiries viatelephone and email (including Option Holders)regarding the potential impact of the administration ontheir investment

Reviewing and preparing correspondence to creditorsand their representatives via facsimile, email and post

Maintaining a register of information received fromcreditors

Maintaining creditor enquiry file notes

Creditor reports Notifying creditors of Administrators’ replacement(following the Federal Court order on 5 August 2015)

Planning and preparing the Administrators’Supplementary Report to creditors

Preparing various appendices and annexures to theSupplementary Report to creditors

Corresponding with various parties to obtain informationto be disclosed in the Supplementary Report

Obtaining creditor contact details by liaising withvarious parties and reviewing Company documents

Preparing and sending emails to creditors regarding anelection to receive correspondence from theAdministrators electronically

Obtaining legal advice regarding content of theSupplementary Report

Obtaining a remuneration report from the PreviousAdministrators

Various discussions with third parties regarding aproposed Deed

Reviewing the proposed Deed terms

Reviewing and considering various iterations ofproposed Deed

Obtaining legal advice on the proposed Deed

Summarising the proposed Deed, for inclusion in theSupplementary Report

Reviewing and executing an affidavit regarding anapplication under s447A of the Act to adjourn theSecond Meeting to 21 October 2015 to consider aproposed Deed.

Liaise with and instruct solicitors to attend the FederalCourt in relation to the above application

Notifying creditors of the Federal Court order to adjournthe Second Meeting to 21 October 2015 by email andpost

Dealing with proofs of debt Receipting and filing Proof of Debt (POD) forms whennot related to a dividend

Liaising with Previous Administrators to obtain PODsreceived

Liaising with creditors which submitted PODs at theFirst Meeting requesting further evidence in support oftheir claims

5


Meeting of Creditors Obtaining legal advice regarding the meeting ofcreditors

Attending to booking meeting venue

Preparing meeting notices, proxy forms andadvertisements

Engaging Link Market Services Limited to assist withthe conduct of the Second Meeting

Investigation

440.80 hours

$189,944.00

Conducting investigation Reconstructing the Company’s cash flow from the EELTrust Account statements and Project Bank Accountstatements provided by Grochowski

Conducting detailed financial analysis on the Companyfollowing our reconstruction of the Company’s cashflows

Reviewing and collating other records obtained from theCompany and third parties

Reviewing specific transactions in the Company’saccounts

Identifying c$22.3m in payments which may be voidableand/or recoverable by a liquidator including substantialpayments unrelated to the Land development

Preparing and issuing a letter to Property Choicerequesting documentation between Property Choice,the Company and any other party governing thecommissions paid into a legal practitioner’s trustaccount

Communicating with various parties regarding thedevelopment of the Land

Liaising with third parties regarding certain transactionsin the Company’s records

Conducting various analysis on inter-companyrelationships, including company/entity searches,preparing an entity listing and conducting analysis onvarious relationships

Reviewing various agreements and contracts to whichthe Company was party

Reviewing various Deeds and contracts entered into bythe Company

Obtaining legal advice regarding the Option Deeds,Contracts of Sale and Deeds of Assignment

Reviewing proposed plans of subdivision and variousrelated works associated with the proposed Landdevelopment

Conducting preliminary investigations into the failure ofthe Company and any voidable transactions that maybe pursued by a liquidator, including payments pointsmade by Grochowski on behalf of the Company

Conducting investigations on potential claims againstcertain parties, including investigations to identifyindicators of insolvency and possible claims forinsolvent trading

Preparing and issuing a letter to current and Previousdirectors of Brookfield, Foscari and Gillies regardingdetails and documentation governing amounts paid bythe Company to these entities

6


Determining director/de facto director/shadow directorconduct and related transactions

Conducting a reconciliation on the EEL Trust Accountstatements

Cross checking the reconciliation performed by thePrevious administrators on the EEL Trust Accountstatements

Conducting a reconciliation of the Company’s OptionHolder register

Conducting a reconciliation of the Project Bank Accountstatements, invoices and payment records

Issuing statutory demands to various parties (underSection 438C(3) of the Act – Notice to deliver books ofthe Company to the Administrators)

Following up with various parties to whom statutorydemands were issued (under Section 438C(3) of theAct – Notice to deliver books of the Company to theAdministrators)

Holding various discussions and exchanging variouscorrespondence with third parties regarding theCompany’s books and records

Reviewing the Previous Report from the PreviousAdministrators

Requesting the Company’s books and records from thePrevious Administrators

Reviewing the Company’s books and records receivedfrom the Previous Administrators

Liaising with the Previous Administrators regarding filehandover

Reviewing and preparing a summary of the Company’soperating activities, history and key events

Instructing solicitors to obtain the Company’s books andrecords from EEL

Reviewing the Company’s books and records receivedfrom creditors, ASIC and third parties

Attending meetings with third parties regarding thebooks and records of the Company

Maintaining a register of the Company’s books andrecords

Preparing an affidavit for initiating a public examinationon Grochowski

Instructing solicitors to issue summons on Grochowski

Reviewing the summons and issuing the summons toGrochowski

Liaising with ASIC regarding our investigations and theconduct of the Company

Discussions with the Company director regarding thebackground of the Company

Conducting various land title searches and variouscompany searches

Performing vehicle searches

Conducting bank account enquiries and searches for

7


bank accounts previously held by the Company and/orMidland Hwy Unit Trust

Examinations Preparing briefs to solicitors

Liaising with solicitor(s) regarding potentialexaminations of Grochowski and other relevant parties

Litigation / Recoveries Preparing briefs to solicitors

Liaising with solicitors regarding potential recoveryactions relating to various loan payments and potentialvoidable transactions.

ASIC reporting Liaising with ASIC regarding statutory reportingobligations and various enquiries

Administration

38.80 hours

$13,833.50

Correspondence Reviewing correspondence addressed to the Companyand Administrators

Preparing general correspondence

Redirecting the Company’s mail

Document maintenance/filereview/checklist

Regular administration review

Updating checklists

File reviews

Filing of documents

Insurance Reviewing and confirming adequacy of cover

Bank account administration Preparing correspondence to freeze Company’s bankaccounts

Preparing correspondence to open a new bank account

Receiving money into the new bank account

ASIC Form 524 and other forms Preparing and lodging ASIC form 505 (notification ofappointment)

ATO and other statutoryreporting

Notifying the Australian Taxation Office (ATO) of theAdministrators’ appointment

Registration for GST

Planning / Review Conducting internal discussions regarding the status ofthe administration and allocation of tasks

8

Resolution 4

Summary of work expected to be undertaken by Nicholas Martin and Craig Crosbie,Administrators of the Company and their staff for the period 13 October 2015 to 20 October2015, or to execution of a Deed, should creditors resolve to enter a Deed.


Assets

37 hours

$16,080.00

Real Property Liaising with the Bendigo City Council regarding theLand development

Reviewing documents received regarding the Landdevelopment

Debtors Considering various actions available for the recoveryof loans

Liaising with solicitors regarding the recovery of loansand potential recovery claims

Creditors

90 hours

$36,840.00

Creditor Enquiries Dealing with creditor enquiries via telephone and email

Maintaining creditor enquiry files


Creditor reports Reviewing the proposed Deed to be included in theSupplementary Report

Obtaining legal advice on the proposed Deed

Obtaining legal advice relating to the SupplementaryReport

Finalising the Supplementary Report

Issuing the Supplementary Report to creditorselectronically and by regular post

Dealing with proofs of debt Receipting and filing POD when not related to adividend

Corresponding with the Office of State Revenue (OSR)and ATO regarding POD when not related to a dividend

Meeting of Creditors Forwarding Notice of Meeting to all known creditorselectronically and by post

Preparing meeting file, including agenda, certificate ofpostage, attendance register, list of creditors, reports tocreditors, advertisement of meeting and draft minutes ofmeeting

Reviewing POD and proxy forms for registration prior tothe Second Meeting

Finalising instructions to Link Market Services Limitedregarding the conduct of the Second Meeting

Investigation

77 hours

$34,140.00

Conducting investigation Conducting investigation on potential voidable anduncommercial transactions

Conducting investigation on potential claims againstcertain parties

Preparing investigation file

Litigation / Recoveries Liaising with solicitors regarding potential recoveryactions

Administration

45 hours

$17,960.00

Correspondence General correspondence


Filing documents

File reviews

Updating checklists

9


Planning / Review Holding discussions regarding status of administrationand tasks required

Resolution 5

Summary of work expected to be undertaken by Nicholas Martin and Craig Crosbie,Administrators of the Company and their staff for the period 21 October 2015 to theexecution of the Deed.


Creditors

89.50 hours

$34,017.50

Deed Negotiating and refining the terms and mechanisms ofthe proposed deed poll and ancillary documentation togive effect to the Bilkurra Deed proposal

Creditor Enquiries Dealing with creditor enquiries regarding theadjudication of POD’s via telephone, email and post


Dividend

87 hours

$32,480.00

Processing proofs of debt Calling, reviewing and adjudicating on POD’s

Maintaining POD register

Requesting further information from claimants regardingPOD

Preparing correspondence to claimants advisingoutcome of adjudication

Administration

49 hours

$17,590.00


Planning / Review Meetings to review the status of the administration

Resolution 6

Summary of work expected to be undertaken by Nicholas Martin and Craig Crosbie, DeedAdministrators of the Company and their staff for the period 21 October 2015 to thecompletion of the Deed.


Assets

107 hours

$45,570.00

Real Property Reviewing documents received regarding the Land andother real properties

Seeking independent advice on the Land and other realproperties

Attending to tasks associated with realising theCompany’s interest in the Land and other realproperties

Creditors

261 hours

$102,655.00

Creditor Enquiries Dealing with creditor enquiries via telephone, email andpost


Reviewing and preparing correspondence to creditors

10


and their representatives via email and post

Creditor reports Preparing various reports to creditors includingupdates, investigations, meetings and general reportsto creditors


Corresponding with OSR and ATO regarding PODwhen not related to a dividend

Meeting of Creditors Attending meeting of creditors

Preparing and lodging minutes of creditor meeting withASIC

Responding to stakeholder queries and questionsimmediately following meeting

Dividend

290 hours

$117,050.00

Processing proofs of debt Preparing correspondence to potential creditors invitinglodgement of POD

Receipting PODs


Adjudicating on PODs

Requesting further information from claimants regardingPOD

Preparing correspondence to claimants advisingoutcome of adjudication

Dividend procedures Preparing correspondence to creditors advising ofintention to declare dividend

Advertising intention to declare dividend

Obtaining clearance from ATO to allow distribution ofcompany’s assets

Calculating the dividend payable to claimants

Corresponding with creditors to announce declarationof dividend

Advertise announcement of dividend

Preparing distribution

Preparing dividend file

Preparing payment vouchers to pay dividend

Preparing correspondence to creditors enclosingpayment of dividend

Administration

135 hours

$46,750.00



First month, then six monthly administration review

Filing of documents

File reviews

Updating checklists

Bank account administration Bank account reconciliations

ASIC Form 524 and other forms Preparing and lodging ASIC statutory forms (including505, 524, 911 etc.)

Corresponding with ASIC regarding statutory forms


Preparing BAS (monthly or quarterly)

11


Finalisation Notifying ATO of finalisation

Cancelling ABN / GST registration

Completing checklists

Finalising WIP

Planning / Review Meetings to review the status of the administration

Books and records / storage Dealing with records in storage

Sending job files to storage

Resolution 7

Summary of work expected to be undertaken by Nicholas Martin and Craig Crosbie,Liquidators of the Company and their staff for the period 21 October 2015 to the completionof the Liquidation.


Assets

215 hours

$96,175.00

Real Property Reviewing documents received regarding the Land andother real properties

Seeking independent advice on the Land and other realproperties

Attending to tasks associated with realising theCompany’s interest in the Land and other realproperties

Creditors

366 hours

$150,665.00

Creditor Enquiries Dealing with creditor enquiries via telephone



Corresponding with committee of inspection (if one isappointed)

Creditor reports Preparing various reports to creditors includingupdates, investigations, meetings and general reportsto creditors


Corresponding with OSR and ATO regarding PODwhen not related to a dividend

Meeting of Creditors Attending meeting of creditors

Preparing meeting notices, proxies and advertisements

Preparing and lodging minutes of meetings with ASIC

Responding to stakeholder queries and questionsimmediately following meeting

Investigation

345 hours

$143,750.00

Conducting investigation Conducting investigation into potential uncommercialtransactions

Conducting investigation into potential claims againstcertain parties

Reviewing specific transactions and liaising with thirdparties regarding certain transactions to supportpotential claims

Conducting investigations to identify indicators of

12


insolvency and possible claims for insolvent trading

Preparing investigation file

Preparing and lodging further supplementary reports ifrequired

Examinations Preparing brief to solicitor

Liaising with solicitor(s) regarding examinations

Attending examinations

Reviewing examination transcripts

Liaising with solicitor(s) regarding outcome ofexaminations and further actions available

Litigation / Recoveries Preparing brief to solicitors

Liaising with solicitors regarding recovery actions

Attending to negotiations

Attending to settlement matters

ASIC reporting Preparing statutory investigation reports

Liaising with ASIC

Dividend

330 hours

$131,350.00

Processing proofs of debt Preparing correspondence to potential creditors invitinglodgements of PODs

Receipting PODs


Adjudicating on PODs

Requesting further information from claimants regardingPODs

Preparing correspondence to claimant advisingoutcome of adjudication

Dividend procedures Preparing correspondence to creditors advising ofintention to declare dividend

Advertising intention to declare dividend

Obtaining clearance from ATO to allow distribution ofcompany’s assets

Preparing dividend calculation

Preparing correspondence to creditors announcingdeclaration of dividend

Advertising announcement of dividend

Preparing distribution

Preparing dividend file

Preparing payment vouchers to pay dividend

Preparing correspondence to creditors enclosingpayment of dividend

Administration

250 hours

$90,095.00



First month, then six monthly administration review

Filing of documents

File reviews

Updating checklists

Insurance Identifying potential issues requiring attention ofinsurance specialists

Corresponding with insurer regarding ongoinginsurance requirements

13


Bank account administration Preparing bank account reconciliations

Corresponding with bank regarding specific transfers

ASIC Form 524 and other forms Preparing and lodging ASIC statutory forms (including505, 524, 911 etc.)

Correspondence with ASIC regarding statutory forms


Preparing BAS

Finalisation Notifying ATO of finalisation

Cancelling ABN / GST registration

Completing checklists

Finalising WIP

Planning / Review Discussions regarding status of administration

Books and records / storage Dealing with records in storage

Sending job files to storage


The calculation of remuneration schedules are attached as follows:

Annexure Description

Annexure 3 Remuneration Schedule for the period 5 August 2015 to 12 October 2015Annexure 4

Annexure 5

Remuneration Schedule for the period 13 October 2015 to 20 October 2015, orto execution of a Deed, should creditors resolve to enter a DeedRemuneration Schedule for work expected to be undertaken for the period 21October 2015 to the date of Deed’s execution

Annexure 6 Remuneration Schedule for work expected to be undertaken for the period 21October 2015 to the completion of the Deed

Annexure 7 Remuneration Schedule for work expected to be undertaken for the period 21October 2015 to the completion of the Liquidation

14


At the Second Meeting to be held on 21 October 2015, creditors will be asked to consider thefollowing resolutions:

Resolution 1“To fix the Administrators’ remuneration (representatives of PPB Advisory) for the period 2 July2015 to 14 July 2015 at $44,229.50 plus GST.”

Resolution 2“To fix the Administrators’ remuneration (representatives of Hall Chadwick) for the period 14 July2015 to 4 August 2015 at $103,371.50 plus GST.”

Resolution 3“To fix the Administrators’ remuneration (representatives of PPB Advisory) for the period 5 August2015 to 12 October 2015 at $360,491.50 plus GST.”

Resolution 4“To approve the Administrators’ remuneration for the period 13 October 2015 to 20 October 2015,up to a maximum of $100,000.00 plus GST, as set out in the Remuneration Report dated14 October 2015.

Resolution 5

“To approve the Deed Administrators’ remuneration for the period 21 October 2015 to the Deed’sexecution up to a maximum of $80,000 plus GST, as set out in the Remuneration Report dated 14October 2015.”

Resolution 6

“To approve the Deed Administrators’ remuneration for the period 21 October 2015 to theconclusion of the Deed of Company Arrangement up to a maximum of $300,000.00 plus GST, asset out in the Remuneration Report dated 14 October 2015.”

Resolution 7

“To approve the Liquidators’ remuneration for the period 21 October 2015 to the conclusion of theLiquidation up to a maximum of $600,000.00 plus GST, as set out in the Remuneration Reportdated 14 October 2015.”

Future remuneration is approved subject to a maximum or cap. Sometimes the actual cost of theadministration will exceed the maximum which has been approved, in which case, we may seekanother resolution for additional remuneration. We will not pay any amount exceeding themaximum without this approval.

Where funds are available, we will usually pay approved remuneration at intervals not less thanone month. Where funds are not available, remuneration will not be paid.

15

6. Remuneration recoverable from external sources

We have received $40,000 as an initial advance and indemnity by the Company’s director, MrRussell Wood, to cover our remuneration, disbursements, and liabilities associated with theadministration of the Company. It was agreed that the indemnity funds are only to be used if thereare insufficient asset realisations. If asset realisations exceed the amount advanced, the advancewill be repaid to Mr Russell Wood. The money was deposited into the Company’s post-appointment bank account and subsequently transferred into PPB Advisory’s bank account as perthe terms of the Deed of indemnity of Administrators.

On 6 October 2015, $5,693.16 was transferred from PPB Advisory’s bank account into theCompany’s post-appointment bank account to pay legal fees.

7. Disbursements

Messrs Ross and Albarran of Hall Chadwick claimed $27,173.23 (excl. GST) as disbursements forthe period from 14 July 2015 to 4 August 2015. Please refer to the Hall Chadwick remunerationreports in Annexure 2 for details.

Our disbursements are divided into three types:

Externally provided professional services – these are recovered at cost. An example of anexternally provided professional service disbursement is legal fees.

Externally provided non-professional costs such as travel, accommodation and search fees –these are recovered at cost.

Internal disbursements such as photocopying, printing and postage. These disbursements, ifcharged to the administration, would generally be charged at cost; though some expensessuch as telephone calls, photocopying and printing may be charged at a rate which recoupsboth variable and fixed costs. The recovery of these costs must be on a reasonablecommercial basis.

We are not required to seek creditor approval for disbursements, but must account to creditors.

The table below lists costs incurred by the Administrators which are to be reimbursed to our firm.

Disbursements (Excl GST)

5 August 2015 to 12 October 2015

Total

Externally provided professional services

Legal costs including disbursements (Excl GST)(Norton Rose Fulbright Australia)

Paid

Not paid

$5,175.60

$114,761.81

Externally provided non-professional services

Searches

Advertising

844.70

0.00

Internal disbursements

Photocopies 12.00

Postage 0.00

Printing 1,020.30

Scanning 29.10

Travel expenses 58.89

Total 121,902.40

16

Future disbursements incurred by our firm will be charged to the administration on the followingbasis:

Internal Disbursements Rate (Excl GST)

Advertising At cost

Courier At cost

Photocopy/Printing Black and white

Colour

A3 – Black and white

A3 – Colour

$0.10 per page

$0.50 per page

$0.20 per page

$0.60 per page

Postage At cost

Scans $0.05 per page

Staff vehicle use At prescribed ATO ratesRates applicable as at 1 January 2015


The summary of receipts and payments for the period from 5 August 2015 to 12 October 2015 isattached as Annexure 8.

9. Questions

Enclosed for your attention as Appendix E is the ASIC publication ‘Insolvency Information fordirectors, employees, creditors and shareholders’, which provides an index of all the informationsheets that are available including information on ‘Approving fees’. You can download these formsfrom www.arita.com.au/insolvency-you/insolvency-explained/insolvency-fact-sheets.

Should you have any enquiries please contact the Midland Hwy Pty Ltd (Administrators appointed)Information Line on 1300 853 598, or emailing a request to [email protected].

10. Annexures

Annexures 1-7: Remuneration Schedules (refer notes 3 and 4 above)

Annexure 8: Summary of receipts and payments (refer note 8 above)


Remuneration report Midland Hwy Pty Ltd (Administrators Appointed) (the Company) ACN 153 096 069

111

_



3. Description of work completed Ito be completed



6. Disbursements


8. Queries

Appendices


We, Nicholas Martin and Craig Crosbie of PPB Advisory, have undertaken a proper assessment of this remuneration claim for our appointment as joint and several Administrators of the Company for the period 2 July to 14 July 2015 in accordance with the law and applicable professional standards. We are satisfied that the remuneration claimed is in respect of necessary work, properly performed in the conduct of the administration.

Dated this)7 day of 1- 2015

Nicholas Martin and Craig Crosbie Former Administrators Midland Hwy Pty Ltd


To date, remuneration has not been approved and paid in this administration. This remuneration report details approval sought for the following fees:

Period Report Reference

Amount (ex GST)

Current remuneration approval sought:


2 July 2015 to 14 July 2015 Annexure 1 $44,229.50

Please refer to Annexure 1 for full details of the calculation and composition of the remuneration approval sought.

2

3. Description of work completed Ito be completed

Summary of work undertaken by Nicholas Martin and Craig Crosbie, Administrators of the Company and their staff for the period 2 July 2015 to 14 July 2015

Task Area

Creditors

38.50 $16,676.00

General Description _..... 1 IncludesAllig ht Creditor Enquiries Deal with creditor enquiries via telephone


Review and prepare correspondence to creditors and their representatives via facsimile, email and post

Compiling creditor lists based on limited information and no Company books and records

Retention of Title Claims Search the PPSA register

Creditor reports Preparing DIRRI and initial creditor circular

Preparing first creditors circular dated 3 July 2015

Mailing creditor reports

Dealing with proofs of debt Prepare written correspondence to all parties' submitting claims against the Company seeking supporting information to validate claims in the absence of Company books and records

Receive/ review information provided by parties for assessment of the claims

Telephone discussions and email correspondence with parties explaining the need for supporting information to be provided with claims, given Company books and records were not available

Followed up with creditors for supporting document of POD

Review of additional supporting information provided by parties

Meeting of Creditors Preparation of meeting notices, proxies and advertisements

Forward notice of meeting to all known creditors

Preparation of meeting file, including agenda, certificate of postage, attendance register, list of creditors, reports to creditors, advertisement of meeting and draft minutes of meeting

Discussions with various creditors in advance of the creditors meeting

Responding to stakeholder queries and questions before the meeting

Meeting with Mr Skinner (Evans Ellis Lawyers) and Mr Vosko (Hall Chadwick) prior to meeting to discuss the administrators assessment of creditor claims and proxies held by Mr Skinner.

Conducting first meeting of creditors

Investigation

33.70

$18,044.50

Conducting investigation Correspondence with stakeholders seeking company books and records

Issue demands to creditors under Subsection 4380(3) of the Corporations Act 2001 — Notice to deliver books of the Company to the Administrators

3

Review the winding-up application for the Company and Supreme Court of Victoria documentation. Obtain and review background to the application from Mr R Wood. Draft correspondence to all parties to the application for winding-up seeking further information on the Corn pany.

Review draft Deed of Settlement and Release between the former shareholders of Bilkurra Investments Pty Ltd and Greater Bendigo Consolidated Pty Ltd (and other parties)

Contact all parties named in the Deed of Settlement and Release for background information on the Cornpany

Conducting statutory searches on all parties named in the Deed of Settlement and Release for assessment of common interests and information on the Company

Review and assess various contracts and deeds mentioned in the Deed of Settlement and Release for information on the conduct of the Company

Conducting title searches and charting the flow of property transactions relating to Title Volume 10270 Folio 178 and 179 between 2001 and 2015

Various discussions with the director's lawyers and Company lawyers regarding company's affairs

Review of specific transactions and liaising with director regarding certain transactions

Liaising with director regarding certain transactions

Preparation of investigation file

Review option deeds for:

- potential assets and obligations of the Company

- legal representatives of the Company and Grantors/Purchasers.

Perform preliminary review of engagement terms and reconciliation of ACN/ABN of the Company lawyers which submitted claims against the Company

Data collection Forensic imaging of former director laptop

ASIC reporting Correspondence and discussions with ASIC regarding company's affairs

Correspondence Reviewing and signing first day letters

General correspondence

First meeting administration review

Filing of documents

File reviews

Updating checklists

Correspondence with insurer regarding initial and ongoing insurance requirements

Document maintenance/file review/checklist

Insurance

Administration

23.90

$9,509.00

Correspondence with financiers requesting searches and information on historical bank accounts held in the Company's name.

Bank account administration

ASIC Form and other forms Preparing and lodging ASIC form 505etc


4

ATO and other statutory reporting

Notification of appointment

Planning / Review Discussions regarding status of administration


The calculation of remuneration schedules are attached as Annexure 1.


The creditors will be asked to consider the following:

"To fix the remuneration of Messrs Martin and Crosbie of PPB Advisory as administrators during the period 2 July 2015 to 14 July 2015 at $44,229.50 plus GST — payable to PPB Advisory on behalf of the former Administrators."

6. Disbursements

Disbursements are divided into three types:

• Externally provided professional services — these are recovered at cost. An example of an externally provided professional service disbursement is legal fees.

• Externally provided non-professional costs such as travel, accommodation and search fees — these are recovered at cost.

• Internal disbursements such as photocopying, printing and postage. These disbursements, if charged to the administration, would generally be charged at cost; though some expenses such as telephone calls, photocopying and printing may be charged at a rate which recoups both variable and fixed costs. The recovery of these costs must be on a reasonable commercial basis.

We are not required to seek creditor approval for disbursements, but must account to creditors.

The table below lists costs incurred by the administrators which are to be reimbursed to our firm. These costs are payable by our firm due to the lack of funds in the administration at the time the payment was due.

Disbursements paid Total

2 July 2015 to 14 July 2015

Externally provided professional services

Legal costs including disbursements and GST $5,681.61 (Norton Rose Fulbright Australia)

Externally provided non-professional services

Searches $141.12 Advertising $151

Internal disbursements

Photocopies $35.05

Postage $29.19

5

Printing $347

Courier Fees $4.74

Total $6,389.71

Future disbursements incurred by our firm will be charged to the administration on the following basis:

Internal Disbursements

Rate (Excl GST)

Advertising At cost

Courier At cost

Photocopy/Printing Black and white

Colour

A3 — Black and white

A3 — Colour

$0.10 per page

$0.50 per page

$0.20 per page

$0.60 per page

Postage At cost

Scans $0.05 per page

Staff vehicle use At prescribed ATO rates Rates applicable as at 1 January 2015


The summary of receipts and payments for the period from 2 July 2015 to 14 July 2015 is attached as Annexure 2.

We have been provided $40,000 as an initial advance and indemnity by the Company's directors, Mr Russell Wood, to cover our remuneration, disbursements, and liabilities associated with the administration of the Company. It was agreed that the indemnity funds are only to be used if there are insufficient asset realisations. If asset realisations exceed the amount advanced, the advance will be repaid to indemnifier. The money was deposited into the Company's post-appointment bank account and subsequently transferred into PPB Advisory's bank account as per the terms of the Deed of indemnity of Administrators.

8. Queries

Please contact Hamish Graham on +61 3 9269 4162 or by email on [email protected] should you have any queries or require any further information.

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Midland Hwy Pty Ltd (Administrators Appointed) ACN 153 096 069 Professional fees for work undertaken by Nicholas Martin and Craig Crosbie, their partners and staff during the Voluntary Administration process for the period 2 July to 14 July 2015

Position Hourl Rate y

Total Hrs $

Assets Hrs $

Creditors Hrs $

Employees Hrs $

Investigation Hrs $

Dividend

Hrs $ Administration

Hrs $

Appointees 620 - - - - - - - - _ - - - - - Craig Crosbie

Nicholas Martin 620 2050. 12,710.00 - - 5.00 3,100.00 - - 12.00 7,440.00 - 3.50 2,170.00

Other staff - - Partner 620 - - - - - - - - - - - - - - Director 560 34.30 19,208.00 - - 15.60 8,736.00 - - 13.70 7,672.00 - 5.00 2,800.00 Senior Manager 490 - - - - - - - - - - - Manager 445 13.80 6,141.00 - 4.60 2,047.00 - 4.70 2,091.50 - - 4.50 2,002.50 Assistant Manager 410 0.50 205.00 - - - - 0.50 205.00 - - Senior Analyst 1 370 2.60 962.00 - - - - - - 0.30 111.00 . - 2.30 851.00 Senior Analyst 2 370 - - - - - - - - - - - Analyst 1 305 0.10 30.50 - - - - - - 0.10 30.50 Analyst 2 305 - - - - - - - - - - - - Graduate 210 22.30 4,683.00 - 13.30 2,793.00 - 2.50 525.00 - 6.50 1,365.00 Undergraduate 190 - - - - - - - - - - - - - - Senior Bookkeeper 140 1.00 140.00 - - - - - - - - 1.00 140.00 Senior Bookkeeper * 140 - - - - - - - Bookkeeper 140 - - - - - - - - - - - - - - Bookkeeper * 140 - - - - - - - - - - - - - Executive Assistant 150 1.00 150.00 - - - - - - - - - 1.00 150.00 Administration 120 - - - - - - - - - - - - - - Total 96.10 44,229.50 - - 38.50 16,676.00 - - 33.70 18,044.50 - - 23.90 9,509.00 GST Total (incl GST) Average Hourly Rate

4,422.95 $ 48,652.45

460.24

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2. Receipts and Payments Summary

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Receipts and Payments Detailed Listing: MIDLHVVY - Midland Hwy Pty Ltd (Administrators Appointed)

Bank, Cash and Cash Investment Accounts: From: 2/07/2015 To: 14/07/2015 (Gross Method)

RECEIPTS

Date Receipts From Nature of Receipts/Explanation Total Trans ID

03/07/15 bankmecu Trust Funds 40,000.00 1426855

Total Receipts 40,000.00

20/07/2015 10:06 AM Page 1

PAYMENTS

Date Payments To Nature of Payments/Explanation Total Trans ID

13/07/15 PPB Trust Account Trust Funds (40,000.00) 1429852

Total Payments (40,000.00)

Net Receipts (Payments) 0.00

20/07/2015 10:06 AM

Page 2

Annexure 2

Midland Hwy Pty Ltd (Administrators Appointed)

ACN 153 096 069

Calculation of Remuneration - Annexure 3

Resolution 3

Professional fees for work undertaken by Nicholas Martin, Craig Crosbie, their partners and staff during the Voluntary Administration process for the period 5 August 2015 to 12 October 2015. 5/08/2015

24/09/2015

Position $/hours Total Actual Total 40

(Ex GST) Hrs $ $ Hrs $ Hrs $ Hrs $ HrsSUMIF

Allocations 9012.288

Appointees

Martin, Nicholas 620.00 111.30 69,006.00 124.00 0.20 20,584.00 33.20 45,508.00 73.40 2,790.00 4.50 NMARTIN

Crosbie, Craig 620.00 0.00 - - - - - - - - - CCROSBIE

Other Staff

Partner 620.00 - - - - - - - - - - Partner

Director 560.00 222.70 124,712.00 1,792.00 3.20 65,240.00 116.50 53,088.00 94.80 4,592.00 8.20 Director

Senior Manager 490.00 6.70 3,283.00 - - 3,185.00 6.50 - - 98.00 0.20 Senior Manager

Manager 445.00 249.70 111,116.50 13,305.50 29.90 34,042.50 76.50 62,255.50 139.90 1,513.00 3.40 Manager Non-Billable

Assistant Manager 410.00 - - - - - - - - - - Assistant Manager Forensics/Advisory

Senior Analyst 1 370.00 5.40 1,998.00 74.00 0.20 518.00 1.40 407.00 1.10 999.00 2.70 Senior Analyst 1

Analyst 1 305.00 23.40 7,137.00 - - 3,599.00 11.80 3,446.50 11.30 91.50 0.30 Analyst 1

Graduate 210.00 193.40 40,614.00 - - 12,495.00 59.50 25,179.00 119.90 2,940.00 14.00 Graduate

Undergraduate 190.00 - - - - - - - - - - Undergraduate

Senior Bookkeeper 140.00 1.50 210.00 - - - - - - 210.00 1.50 Senior Bookkeeper

Bookkeeper 140.00 - - - - - - - - - - Bookkeeper

Executive Assistant 150.00 16.10 2,415.00 - - 1,755.00 11.70 60.00 0.40 600.00 4.00 Executive Assistant

Administration 120.00 - - - - - - - - - - Administration

Total (Excluding GST) 830.20 360,491.50 15,295.50 33.50 141,418.50 317.10 189,944.00 440.80 13,833.50 38.80

GST 36,049.15 33.50 317.10 440.80 38.80

Total (Including GST) 396,540.65

Average rate (excluding GST) 434.22

Average Rate (excl GST) reflects the average charge rate during the period of the remuneration calculation.

A Creditor Information Sheet containing general information about the remuneration of Insolvency Practitioners is available at: http://www.lpaa.com.au/user/docs/Creditor_Information_Sheet.pdf

Assets Creditors Investigation Administration


ACN 153 096 069

Calculation of Remuneration - Annexure 4 25/09/2015

Resolution 4

Professional fees for work expected to be undertaken by Nicholas Martin, Craig Crosbie, their partners and staff during the Voluntary Administration process for the period 13 October 2015 to 20 October 2015, 6/10/2015

or to execution of a Deed, should the creditors resolve to enter a Deed.

7

Position $/hours Total Actual Total 63086.0125

(Ex GST) Hrs $ $ Hrs $ Hrs $ Hrs $ Hrs

Appointees

Martin, Nicholas 620.00 38.00 23,560.00 3,720.00 6.00 8,060.00 13.00 8,060.00 13.00 3,720.00 6.00

Crosbie, Craig 620.00 - - - - - - - - - -

Other Staff

Partner 620.00 - - - - - - - - - -

Director 560.00 58.00 32,480.00 5,600.00 10.00 10,080.00 18.00 11,200.00 20.00 5,600.00 10.00

Senior Manager 490.00 - - - - - - - - - -

Manager 445.00 67.00 29,815.00 4,450.00 10.00 9,790.00 22.00 10,680.00 24.00 4,895.00 11.00

Assistant Manager 410.00 - - - - - - - - - -

Senior Analyst 1 370.00 - - - - - - - - - -

Analyst 1 305.00 13.00 3,965.00 - - 3,660.00 12.00 - - 305.00 1.00

Graduate 210.00 71.00 14,910.00 2,310.00 11.00 5,250.00 25.00 4,200.00 20.00 3,150.00 15.00

Undergraduate 190.00 - - - - - - - - - -

Senior Bookkeeper 140.00 1.00 140.00 - - - - - - 140.00 1.00

Bookkeeper 140.00 - - - - - - - - - -

Executive Assistant 150.00 1.00 150.00 - - - - - - 150.00 1.00

Administration 120.00 - - - - - - - - - -


BUT SAY 100,000.00

GST 10,000.00





Assets Creditors Investigation Administration


ACN 153 096 069


Resolution 5

Professional fees for work expected to be undertaken by Nicholas Martin, Craig Crosbie, their partners and staff during the Administration for the period 21 October 2015 to the Deed's execution.

Position $/hours Total Actual Total

(Ex GST) Hrs $ $ Hrs $ Hrs $ Hrs

Appointees

Martin, Nicholas 620.00 13.00 8,060.00 2,480.00 4.00 3,720.00 6.00 1,860.00 3.00

Crosbie, Craig 620.00 - - - - - - - -

Other Staff

Partner 620.00 - - - - - - - -

Director 560.00 24.00 13,440.00 5,600.00 10.00 5,600.00 10.00 2,240.00 4.00

Senior Manager 490.00 27.00 13,230.00 5,880.00 12.00 4,900.00 10.00 2,450.00 5.00

Manager 445.00 30.00 13,350.00 5,340.00 12.00 4,450.00 10.00 3,560.00 8.00

Assistant Manager 410.00 - - - - - - - -

Senior Analyst 1 370.00 30.00 11,100.00 5,180.00 14.00 3,700.00 10.00 2,220.00 6.00

Analyst 1 305.00 43.50 13,267.50 5,337.50 17.50 5,490.00 18.00 2,440.00 8.00

Graduate 210.00 50.00 10,500.00 4,200.00 20.00 4,200.00 20.00 2,100.00 10.00

Undergraduate 190.00 - - - - - - - -

Senior Bookkeeper 140.00 6.00 840.00 - - 420.00 3.00 420.00 3.00

Bookkeeper 140.00 - - - - - - - -

Executive Assistant 150.00 2.00 300.00 - - - - 300.00 2.00

Administration 120.00 - - - - - - - -

Total (Excluding GST) 225.5 84,087.50 34,017.50 89.50 32,480.00 87.00 17,590.00 49.00

BUT SAY 80,000.00

GST 8,000.00





Creditors Dividend Administration


ACN 153 096 069


Resolution 6

Professional fees for work expected to be undertaken by Nicholas Martin, Craig Crosbie, their partners and staff during the Deed Administration for the period 21 October 2015 to the completion of the Deed.


(Ex GST) Hrs $ $ Hrs $ Hrs $ Hrs $ Hrs

Appointees

Martin, Nicholas 620.00 85.00 52,700.00 6,200.00 10.00 15,500.00 25.00 21,700.00 35.00 9,300.00 15.00

Crosbie, Craig 620.00 - - - - - - - - - -

Other Staff

Partner 620.00 - - - - - - - - - -

Director 560.00 100.00 56,000.00 8,400.00 15.00 19,600.00 35.00 19,600.00 35.00 8,400.00 15.00

Senior Manager 490.00 90.00 44,100.00 9,800.00 20.00 12,250.00 25.00 17,150.00 35.00 4,900.00 10.00

Manager 445.00 110.00 48,950.00 6,675.00 15.00 15,575.00 35.00 20,025.00 45.00 6,675.00 15.00

Assistant Manager 410.00 - - - - - - - - - -

Senior Analyst 1 370.00 102.00 37,740.00 7,400.00 20.00 13,690.00 37.00 12,950.00 35.00 3,700.00 10.00

Analyst 1 305.00 123.00 37,515.00 4,575.00 15.00 14,640.00 48.00 13,725.00 45.00 4,575.00 15.00

Graduate 210.00 132.00 27,720.00 2,520.00 12.00 10,500.00 50.00 10,500.00 50.00 4,200.00 20.00

Undergraduate 190.00 - - - - - - - - - -

Senior Bookkeeper 140.00 35.00 4,900.00 - - - - 1,400.00 10.00 3,500.00 25.00

Bookkeeper 140.00 - - - - - - - - - -

Executive Assistant 150.00 16.00 2,400.00 - - 900.00 6.00 - - 1,500.00 10.00

Administration 120.00 - - - - - - - - - -


BUT SAY 300,000.00

GST 30,000.00





Dividend AdministrationAssets Creditors


ACN 153 096 069


Resolution 7

Professional fees for work expected to beundertaken by Nicholas Martin, Craig Crosbie, their partners and staff during the Liquidation for the period 21 October 2015 to the completion of the Liquidation.


(Ex GST) Hrs $ $ Hrs $ Hrs $ Hrs $ Hrs $ Hrs

Appointees

Martin, Nicholas 620.00 165.00 102,300.00 21,700.00 35.00 21,700.00 35.00 21,700.00 35.00 21,700.00 35.00 15,500.00 25.00

Crosbie, Craig 620.00 - - - - - - - - - - -

Other Staff

Partner 620.00 - - - - - - - - - - -

Director 560.00 215.00 120,400.00 22,400.00 40.00 28,000.00 50.00 28,000.00 50.00 25,200.00 45.00 16,800.00 30.00

Senior Manager 490.00 180.00 88,200.00 12,250.00 25.00 26,950.00 55.00 22,050.00 45.00 17,150.00 35.00 9,800.00 20.00

Manager 445.00 245.00 109,025.00 20,025.00 45.00 28,925.00 65.00 26,700.00 60.00 20,025.00 45.00 13,350.00 30.00

Assistant Manager 410.00 - - - - - - - - - - - -

Senior Analyst 1 370.00 185.00 68,450.00 7,400.00 20.00 16,650.00 45.00 18,500.00 50.00 18,500.00 50.00 7,400.00 20.00

Analyst 1 305.00 202.00 61,610.00 6,100.00 20.00 14,640.00 48.00 15,250.00 50.00 13,725.00 45.00 11,895.00 39.00

Graduate 210.00 255.00 53,550.00 6,300.00 30.00 12,600.00 60.00 11,550.00 55.00 13,650.00 65.00 9,450.00 45.00

Undergraduate 190.00 - - - - - - - - - - -

Senior Bookkeeper 140.00 35.00 4,900.00 - - - - - - 1,400.00 10.00 3,500.00 25.00

Bookkeeper 140.00 - - - - - - - - - - -

Executive Assistant 150.00 24.00 3,600.00 - - 1,200.00 8.00 - - - - 2,400.00 16.00

Administration 120.00 - - - - - - - - - - -

Total (Excluding GST) 1,506.0 612,035.00 96,175.00 215.00 150,665.00 366.00 143,750.00 345.00 131,350.00 330.00 90,095.00 250.00

BUT SAY 600,000.00

GST 60,000.00





Assets Creditors Investigation AdministrationDividend


Summary of receipts and payments to the Administrators account for the period from 5 August 2015 to 12 October 2015

Receipts Total ($)

Funds for indemnity 5,693.16Other Current Assets 1,232.00

Total Receipts 6,925.16

Payments

Bank Charges 21.80Legal Fees 5,693.16

Total Payments 5,714.96

Net Receipts (Payments) 1,210.20

Declaration of Independence, RelevantC.

Relationships and Indemnities

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Declaration of Independence, Relevant Relationships and Indemnities

Midland Hwy Pty Ltd (Administrators Appointed) (the Company)

ACN 153 096 069

This document requires the Practitioners appointed to an insolvent entity to make declarations as to:

A. their independence generally

B. relevant relationships, induding:

i. the circumstances of the appointment

ii. any relationships with the Company and others within the previous 24 months

iii. any prior professional services for the Company within the previous 24 months

iv. any other relationships to declare.

C. any indemnities given, or up-front payments made, to the Practitioner.

This declaration is made in respect of us, our partners. PPB Advisory and the related entities of PPB Advisory.

A. Independence

We, Nicholas Martin and Craig Crosbie of PPB Advisory, Level 21, 181 William Street, Melbourne VIC 3000, have undertaken a proper assessment of the risks to our independence prior to accepting the appointment as joint and several Administrators of the Company in accordance with the law and applicable professional standards.

This assessment identified no real or potential risks to our independence. We are not aware of any reasons that would prevent us from accepting this appointment.

B. Declaration of Relationships

i. Circumstances of appointment

This appointment was referred to us by Mr Tony Hansen of Crowe Horwath, an advisor to the former director of the Company, Mr John Wood.

On 30 June 2015 Nicholas Martin attended a meeting with the Company's sole director, Mr Russell Wood for the purposes of understanding the background of the Company. Mr Wood's lawyer also attended part of this meeting by phone.

Mr Martin sent Mr Wood an email with link to the insolvency page of the ASIC website.

On 1 July 2015 Nicholas Martin and Ben Verney of PPB Advisory had a telephone conversation with Mr Wood to obtain further information on the Company and to explain the consequences of insolvency.

In our opinion, the meeting and discussions do not affect our independence, as the advice was given to the Company and not to the director personally. Further, the advice was restricted to the limitations imposed by Principle 2 of the Code of Professional Practice in relation to pre-appointment advice. Further, the advice provided is unlikely to be subject to review during the administration and would not impact on compliance with our statutory and fiduciary duties. It is for these reasons that the advice does not, in our opinion, give rise to a conflict of interest or duty.

We did not receive any remuneration for this advice.

We have not provided other information or advice to the Company, its director prior to our appointment, beyond that outlined in this Declaration of Independence, Relevant Relationships and Indemnities (DIRRI).

ii. Relevant relationships (excluding professional services to the insolvent)

Neither we, nor a member of our firm, have, or have had within the preceding 24 months, any relationships with the Company, its associates, or any person or entity that has security over the whole or substantially the whole of its property.

iii. Prior professional services to the insolvent

Neither we, nor our firm, have provided any professional services to the Company in the previous 24 months.

iv. No other relevant relationships to disclose

There are no other known relevant relationships, including personal, business and professional relationships, from the previous 24 months with the Company, an associate of the Company, a former insolvency practitioner appointed to the Company or any person or entity that has security over the whole or substantially the whole of the Company's property that should be disclosed.

C. Indemnities and up-front payments

We have been provided with the following indemnities for this administration.

Name of party

Mr Russell Wood

Relationship with the Company/Director

Director

Indemnity amount

An initial sum of $40,000 excluding GST plus additional sums as agreed between the Indemnifier and joint and several Administrators

What the indemnity or upfront payment covers Administrators' remuneration, disbursements and liabilities associated with the administration of the Company

Where are the funds held The Company's post appointment bank account

Any restrictions on the use of the funds Indemnity funds are only to be used if there are insufficient asset realisations. If asset realisations exceed the amount advanced, the advance will be repaid to indemnifier.

This does not include statutory indemnities. We have not received any other indemnities or upfront payments that should be disclosed.

Dated this day of

Nicholas Martin Administrator

Craig Crosbie Administrator

Note:

If circumstances change, or new information is identified, we are required under the Corporations Act 2001 and the Australian Restructuring Insolvency & Turnaround Association (AR/TA) Code of Professional Practice to update this Declaration and provide a copy to creditors with our next communication as well as table a copy of any replacement declaration at the next meeting of the insolvent's creditors.

Any relationships, indemnities or up-front payments disclosed in the DIRRI must not be such that the Practitioner is no longer independent. The purpose of components B and C of the DIRRI is to disclose relationships that, while they do not result in the Practitioner having a conflict of interest or duty, ensure that creditors are aware of those relationships and understand why the Practitioner nevertheless remains independent.

Notice of meeting of creditorsD.

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FORM 529

Paragraph 439A(3)(b)

Regulation 5.3A.03AB

Corporations Act 2001

NOTICE OF MEETING OF CREDITORS

Midland Hwy Pty Ltd

(Administrators Appointed) (the Company)

ACN 153 096 069

Notice is given that a meeting of the creditors of the Company will be held at The Institute of CharteredAccountants, Level 3, 600 Bourke Street, Melbourne VIC, on Wednesday, 21 October 2015 at 10:00amAEDST.

Agenda

1. To receive the report by the Administrators concerning the Company’s business, property, affairs andfinancial circumstances pursuant to Section 439A of the Corporations Act 2001.

2. For creditors to consider the options available and to resolve that:

(a) the Company execute a Deed of Company Arrangement (DOCA), or

(b) the administration should end, or

(c) the Company be wound up.

3. To approve:

(a) the Administrators’ remuneration

(b) the Deed Administrators’ remuneration, if applicable, or

(c) the Liquidators’ remuneration, if applicable.

4. If the Company is wound up or creditors resolve that the Company execute a DOCA, to consider theappointment of a Committee of Inspection and, if so, who are to be the committee members.

5. Any other business.

Creditors wishing to attend are advised that proof of debts and proxies must be submitted to Link MarketSystems by 10:00am AEDST on Tuesday, 20 October 2015.

A webcast facility will be available for creditors who cannot attend the Second Meeting.

If you plan to attend via webcast please register your interest in advance by no later than 10.00am AEDST onTuesday 20 October 2015, by:

contacting the Midland Hwy Pty Ltd (Administrators appointed) Insolvency Line on 1300 853 598, or

emailing a request to [email protected].

To enable orderly registration for the webcast please access the webcast link 30 minutes prior to the meetingtime.

Creditors intending to attend the Second Meeting via webcast and vote on the proposed resolutions, mustsubmit a POD and proxy form by email to [email protected] by no later than 10.00am AEDSTon Tuesday, 20 October 2015.

A person, or the proxy or attorney of a person, who participates in the meeting by webcast must pay any costsincurred by the person, proxy or attorney in participating and is not entitled to be reimbursed for those costsfrom the assets of the company.

Dated this day of October 2015


Administrators



ASIC Publication: Insolvency information forE.

directors, employees, creditors and

shareholders

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Important note: The information sheets contain a summary of basic information on the topic. It is not

Insolvency information for directors, employees, creditors and shareholders ASIC has 11 insolvency information sheets to assist you if you’re affected by a company’s insolvency and have little or no knowledge of what’s involved.

These plain language information sheets give directors, employees, creditors and shareholders a basic understanding of the three most common company insolvency procedures—liquidation, voluntary administration and receivership. There is an information sheet on the independence of external administrators and one that explains the process for approving the fees of external administrators. A glossary of commonly used insolvency terms is also provided.

The Insolvency Practitioners Association (IPA), the leading professional organisation in Australia for insolvency practitioners, endorses these publications and encourages its members to make their availability known to affected people.

List of information sheets • INFO 41 Insolvency: a glossary of terms • INFO 74 Voluntary administration: a guide for creditors • INFO 75 Voluntary administration: a guide for employees • INFO 45 Liquidation: a guide for creditors • INFO 46 Liquidation: a guide for employees • INFO 54 Receivership: a guide for creditors • INFO 55 Receivership: a guide for employees • INFO 43 Insolvency: a guide for shareholders • INFO 42 Insolvency: a guide for directors • INFO 84 Independence of external administrators: a guide for creditors • INFO 85 Approving fees: a guide for creditors

Getting copies of the information sheets To get copies of the information sheets, visit ASIC’s website at www.asic.gov.au/insolvencyinfosheets. The information sheets are also available from the IPA website at www.ipaa.com.au. The IPA website also contains the IPA’s Code of Professional Practice for Insolvency Professionals, which applies to IPA members.

a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. These documents may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional adviser to take into account your particular circumstances and to tell you how the law applies to you.

© Australian Securities & Investments Commission, December 2008 Page 1 of 1

ARITA Publication: Creditor information sheet:F.

Offences, recoverable transactions and

insolvent trading

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ARITA ACN 002 472 362

Level 5, 33 Erskine Street, Sydney NSW 2000 Australia | GPO Box 9985, Sydney NSW 2001 t +61 2 9290 5700 | f +61 2 9290 2820 | e [email protected] | arita.com.au

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION

Creditor Information Sheet

Offences, Recoverable transactions and Insolvent Trading

Offences A summary of offences that may be identified by the administrator:

Section Offence 180 Failure by officer to exercise a reasonable degree of care and diligence in the exercise of his powers

and the discharge of his duties. 181 Failure to act in good faith. 182 Making improper use of position as an officer or employee, to gain, directly or indirectly, an advantage. 183 Making improper use of information acquired by virtue of his position. 184 Reckless or intentional dishonesty in failing to exercise duties in good faith for proper purpose. Use of

position or information dishonestly to gain advantage or cause detriment. 206A Contravening an order against taking part in management of a corporation. 206A, B Taking part in management of corporation while being an insolvent under an administration. 206A, B Acting as a director or promoter or taking part in the management of a company within five years after

conviction or imprisonment for various offences. 209(3) Dishonest failure to observe requirements on making loans to directors or related companies. 254T Paying dividends except out of profits. 286 Failure to keep proper accounting records. 312 Obstruction of auditor. 314-7 Failure to comply with requirements for financial statement preparation. 437C Performing or exercising a function or power as officer while a company is under administration. 437D(5) Unauthorised dealing with company's property during administration. 438B(4) Failure by directors to assist administrator, deliver records and provide information. 438C(5) Failure to deliver up books and records to administrator. 590 Failure to disclose property, concealed or removed property, concealed a debt due to the company,

altered books of the company, fraudulently obtained credit on behalf of the company, material omission from Report as to Affairs or false representation to creditors.

Voidable Transactions Preferences A preference is a transaction such as a payment between the company and one or more of its creditors, in which the creditor receiving the payment is preferred over the general body of creditors. The relevant time period is six months before the commencement of the liquidation. The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction.

Where a creditor receives a preferred payment, the payment is voidable as against a liquidator and is liable to be paid back to the liquidator subject to the creditor being able to successfully maintain any of the defences available to the creditor under either the Corporations Act.

Uncommercial Transaction An uncommercial transaction is one that it may be expected that a reasonable person in the company's circumstances would not have entered into having regard to: • the benefit or detriment to the company; • the respective benefits to other parties; and • any other relevant matter.

To be voidable, an uncommercial transaction must have occurred during the two years before the liquidation.

However, if a related entity is a party to the transaction, the time period is four years and if the intention of the transaction is to defeat creditors, the time period is ten years.

AUSTRALIAN RESTRUCTURING INSOLVENCY & TURNAROUND ASSOCIATION PAGE 2

The company must have been insolvent at the time of the transaction, or become insolvent as a result of the transaction.

Unfair Loan A loan is unfair if and only if the interest was extortionate when the loan was made or has since become extortionate. There is no time limit on unfair loans – they only have to have been entered into any time on or before the day when the winding up began.

Arrangements to avoid employee entitlements If an employee suffers loss because a person (including a director) enters into an arrangement or transaction to avoid the payment of employee entitlements, the liquidator or the employee may seek to recover compensation from that person. It will only be necessary to satisfy the court that there was a breach on the balance of probabilities. There is no time limit on when the transaction occurred.

Unreasonable payments to directors Liquidators have the power to reclaim "unreasonable payments" made to directors by companies prior to liquidation. The provision relates to transactions made to, on behalf of, or for the benefit of, a director or close associate of a director. To fall within the scope of the section, the transaction must have been unreasonable, and have been entered into during the 4 years leading up to a company's liquidation, regardless of its solvency at the time the transaction occurred.

Voidable charges Certain charges are voidable by a liquidator: • Circulating security interest created with six months of the liquidation unless it secures a

subsequent advance; • Unregistered charges; and • Charges in favour of related parties who attempt to enforce the charge within 6 months of its

creation.

Insolvent Trading In the following circumstances, directors may be personally liable for insolvent trading by the company: • a person is a director at the time a company incurs a debt; • the company is insolvent at the time of incurring the debt or becomes insolvent because of

incurring the debt; • at the time the debt was incurred, there were reasonable grounds to suspect that the company was

insolvent; • the director was aware such grounds for suspicion existed; and • a reasonable person in a like position would have been so aware.

The law provides that the liquidator, and in certain circumstances the creditor who suffered the loss, may recover from the director, an amount equal to the loss or damage suffered. Similar provisions exist to pursue holding companies for debts incurred by their subsidiaries.

A defence is available under the law where the director can establish: • there were reasonable grounds to expect that the company was solvent and they actually did so

expect; • they did not take part in management for illness or some other good reason; or, • they took all reasonable steps to prevent the company incurring the debt.

The proceeds of any recovery for insolvent trading by a liquidator are available for distribution to the unsecured creditors before the secured creditors.

Important note: This information sheet contains a summary of basic information on the topic. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances.

Process for applying Option FeesG.

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Process for applying option fees

The following business process was described in documents provided by the Company solicitorsEvans Ellis:

1. The land is sold by way of Option Deed. Contained within the Option Deed is a contract forthe sale and purchase of real estate together with a vendor's statement (the Contract ofSale).

2. The option under the Option Deed is a call option and is generally for periods of between 3and 5 years (the Call Option). The premium under the Option Deed (the Option Fee) is notrelated to the purchase price under the related Contract of Sale and is solely in considerationof the benefits (generally being time) provided to the Grantee for the Call Option.

3. The Option Deeds are marketed and sold by an appointed Victorian licensed Real EstateAgent on behalf of our Client (the Agent). As part of the sales process our Client providesproject marketing material and contractual documentation to the Agent.

4. The Agent (through themselves and sub-agents) working with the project marketing material,markets the Land to their client data bases in person or over the phone, and discusses theprojects benefits and features in undertaking their engagement.

5. Where the Agent procures a sale of the Land, the usual process followed is:

a. the Agent reserves the Land block via an expression of interest (EOI);

b. a small holding deposit is received under the EOI, usually $3,000.00;

c. the EOl fee is put into a legal practitioners trust account (LPTA);

d. upon the Option Deed being entered into by the grantee, the grantee will commit topaying the Option Fee to the grantor in usually three (3) tranches — refer to the OptionDeed Schedule for further particulars;

e. the Option Fee is usually in the amount of between $25,000 - $45,000;

f. collectively, the Option Fee is formed from the amounts paid as described hereunder.

6. The Option Fee is paid by the grantee to the LPTA for and on behalf of our Client. Upon thesatisfaction of clause 5.1 of the Option Deed, the funds relating to the Option Fee arereleased as cleared funds to the Client (as grantor) from the LPTA pursuant to clause 5.2.

Deed proposal for the CompanyH.

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Evans ELLIs g■ 41

LAVVYERS Principal Responsible: Benjamin Skinner Direct Email: [email protected] Our Ref: BTS:150088

12 October 2015

David Porter

Norton Rose Fulbright Australia

Level 15, RACV Tower

485 Bourke Street

MELBOURNE VIC 3000

BY EMAIL: david.porter;

Dear Sir,

Midland Hwy Pty Ltd (Administrators Appointed) A.C.N. 153 096 069 ("the Company")

We refer to our email communication dated 9 October 2015.

We write to you on behalf of Bilkurra Investments Pty Ltd, the proponent of the DOCA Proposal

("Proposer") and we advise as follows.

DOCA Fund

1. The Proposer will contribute $300,000.00 to the DOCA fund, payable within thirty (30) days of

the date the DOCA is executed.

2. The DOCA fund shall be applied as follows:

(a) First, payment of the fees, expenses, liabilities and costs of the administration, including

but not limited to the remuneration and expenses of the administrators, the Deed

Administrators and the former administrators (Hall Chadwick); and

(b) Second, payment to the admitted participating other unsecured trade creditors (if any)

— note comments in paragraphs 4 to 7 below.

Remuneration and Expenses of the Administrators

3. Our client is of the view that the proposed contribution to the Deed fund is reasonable in

these circumstances.

Trade Creditors

4. As previously advised, our client believes that all the unsecured trade creditors who have to

date submitted a proof of debt ("Trade Creditors"), are all that exist.

5. On or prior to the commencement of the DOCA, the Proposer will seek to discharge, by

payment or other agreed arrangement, the Trade Creditors, subject however to the deed

administrators' adjudication process.

Liability Limited by a scheme approved under Professional Standards Legislation

Level 2, 455 Bourke Street I MELBOURNE VIC 3000 T: +61 3 9863 9727 I F: + 613 9863 9728 I W: eelaw.com.au

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12 October 2015

6. With respect to claims of any other trade creditors whom have yet to submit a proof of debt,

the Proposer may consider contributing an additional sum to the DOCA fund to deal with the

claims of such creditors.

7. Our client however has not received any information in respect of the nature and extent of

these trade creditors' claims and therefore cannot at this present stage make an assessment

of any additional contributions that they may make to the DOCA fund.

Off-the-plan Purchasers and Option Holders

8. The DOCA proposal has been amended such that the Proposer will agree to take on any duties

and obligations to the Option Holders and Off-the-plan Purchasers as are specified in the deed

poll.

9. Notwithstanding paragraph 8 above, in addition to (and independently from) the DOCA, the

Proposer has also advised that it intends to procure individual deeds of novation with each

Option Holder and Off-the-plan Purchaser. This is likely to occur within the first few months of

the commencement of the DOCA.

10. We repeat our comments in respect of off-the-plan purchasers set out in our email of 9

October 2015, namely that in accordance with the terms and conditions of the off-the-plan

contracts, there is no reason preventing the Deed Administrators to deal with non-consenting

off-the-plan purchasers under the DOCA in the ordinary course.

Timing and Effectuation of the DOCA

11. We note your comments in paragraphs 6(1) and 10 of your letter dated 30 September 2015.

12. Our client has no objection to the DOCA being effectuated as soon as is reasonably

practicable.

Evidence of our client's ability to perform

13. We advise that our firm have been presented documents which indicate that the Proposer will

be able to meet its contributions to the DOCA fund (as contemplated under the amended

DOCA proposal hereunder) and continue with the development of the land. These documents

however are commercial-in-confidence and in our view will prejudice our client's interests if

disclosed to any third party.

14. As to your client's queries in relation to:

(a) evidence of the Proposer's ability to: (a) complete contracts with off-the-plan

purchasers before 2017 and/or (b) obtain a planning permit pursuant to obligations

under the option contracts prior to 2022 (which the Proposer notes in the latter case

must be satisfied if off-the-plan purchasers' contracts are to be completed prior to

2017); and

(b) details of the debts owed by the Proposer in respect of the land,

we are unsure as to how such evidence is relevant to your client's enquiries and/or how it will

assist creditors to make a choice between the DOCA proposal and liquidation.

15. Simply put, if the Proposer is unable to meet its obligations by the relevant sunset dates, both

the option contract and off-the-plan contract provides a mechanism to deal with these issues.

16. However, in a continued effort to placate your clients' elusive requests, the Proposer has

instructed us to make the following comments:

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12 October 2015

(a) We advise that the land is encumbered up to by less than 50% LVR.

(b) The Proposer has obtained an approved development plan with the City of Greater

Bendigo ("Approved Plan"), which allows for the Proposer to obtain a planning permit

in respect of the development largely in accordance with the development plan and the

relevant development stages.

(c) We are instructed that upon obtaining an Approved Plan:

(i) there are no further avenues of appeal available to third parties (such as

residents or stakeholders) to object to the proposed development; and

(ii) approval of the proposed development from major service or utility authorities

have been obtained, such as water, transport and road authorities.

Accordingly, once an Approved Plan has been obtained, we are advised that the City of

Greater Bendigo will grant a planning permit for the relevant development stage within

six (6) months of making an application to the council.

(d) As previously advised, the development is only at preliminary stages, i.e. obtaining

planning approvals from the council and relevant authorities. Accordingly, the

Proposer's projected cashflow of the development is both incomplete and a mere

estimate, at best.

DOCA Proposal

An amended DOCA Proposal is set out under Annexure A for your consideration.

We note that as to the specific mechanisms of how the DOCA Proposal achieves the intentions of

the Proposer, it would be subject to the particulars of the deed itself.

Final Comments

It should be obvious and plain from the discussions and information provided to date that the DOCA

Proposal offers the most desirable outcome for all parties involved.

As previously advised, the Proposer is the registered proprietor of the land which is the subject of

the development and realistically the only entity who are in the position to: (a) complete the

development; and (b) realise the commercial aspirations of the development for the benefit of all,

including option holders and off-the-plan purchasers. The Proposer has demonstrated that they

have made significant progress in undertaking the development and, whether validly or not,

assumed any liability and obligations towards the option holders and off-the-plan purchasers.

Following the administration of the Company and learning that interests of the option holders and

off-the-plan purchasers may still rest with the Company, the Proposer has taken it upon itself to

provide the DOCA Proposal, at their sole cost in time and expense.

Despite anything, it is the Proposer's intention and ensuing conduct that clearly demonstrates the

genuinity of the development and the Proposer's desire to fulfill its obligations to the option holder

and off-the-plan purchasers.

That being said, if the Company is put into liquidation, based on your client's report, it is likely that

all parties involved will receive a nil return and the option holders and off-the-plan purchasers will

no longer have an interest in the development.

In closing, it is our view that given the circumstances anything less than a DOCA will lead to

undesirable outcomes for all parties involved.

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12 October 2015

If you have any queries please do not hesitate to contact Ben Skinner of our office on (03) 9863

9727.

Yours faithfully,

&MS eigriglyetS Evans Ellis Lawyers

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12 October 2015

Annexure A

DOCA Proposal

1. Recitals

1.1. A Deed is being proposed by Bilkurra Investments Pty Ltd ("the Proposer").

1.2. The Deed Administrators of the Deed are to be Messrs Nicholas Martin and Craig

Crosbie of PPB Advisory ("the Deed Administrators").

2. Definitions

2.1. For the purpose of this DOCA Proposal, the following definitions apply unless the

context requires otherwise:

(a) "Act" means Corporations Act 2001 (Cth);

(b) "Claim" means a debt payable by or a claim against the Company being debts or

claims, the circumstances giving rise to which occurred before the Relevant Date,

that would be admissible to proof against the Company;

(c) "Commencement Date" means the date of execution of this Deed;

(d) "Company" means Midland Hwy Pty Ltd (Administrators Appointed);

(e) "Deed Fund" has the meaning set out in clause 5.

(f) "Land" means the land contained in Certificates of Title Volume 10270 Folio 178

and 179, more commonly known as Lots 1 and 2 Midland Highway, Bagshot;

(g) "Off-the-plan Contract" means an off-the-plan purchase contract between the

Company and the Off-the-plan Purchasers relating the sale and purchase of a

nominated lot at the Land;

(h) "Off-the-plan Purchasers" means any entity whom has entered into an off-the-

plan purchase contract with the Company, whether by way of exercising its

option or entering into such agreement in its own rights;

"Option Deed" means the option deed between the Option Holder and the

Company granting the Option Holder the right to enter into an off-the-plan

purchase contract to acquire a specified lot at the Land;

(i) "Option Holder" means any entity whom has entered into an option deed with

the Company;

(k) "Relevant Date" means 2 July 2015, being the date upon which the Deed

Administrators were appointed to the Company;

(I) "Second Meeting of Creditors" means the second meeting of the Company's

creditors scheduled to be held 21 October 2015;

(m) "Trade Creditors" means any known creditor of the Company excluding an Option

Holder or Off-the-plan Purchaser

3. Creditors

3.1. In accordance with section 444D of the Act, the Deed is intended to bind all unsecured

creditors of the Company to the extent of their claim on or before the Relevant Date

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12 October 2015

that would be admissible to proof against the Company in accordance with Division 6 of

Part 5.6 of the Act if the Company had been wound up. All unsecured creditors of the

Company must accept their entitlement under the Deed in full and final settlement of

all of their Claims against the Company.

3.2. The Deed will not bind (or restrain the rights of) any creditors of the Company who have

a valid and registered security over the whole or substantially the whole of the

Company's assets and undertakings.

4. Caveat

4.1. Upon execution of this Deed, the Deed Administrators will remove the caveat lodged by

the Company against the Land.

5. Deed Fund

5.1. A Deed Fund is to be established for the participating creditors of the Company.

5.2. The Deed Fund is to be comprised of $300,000.00 due and payable within thirty (30)

days of execution of the signing of this Deed.

5.3. The Deed Fund will be applied as follows:

(a) First, to payment of the fees, expenses, liabilities and costs of the administration,

including but not limited to the remuneration and expenses of the

administrators, the Deed Administrators and the former administrators (Hall

Chadwick); and

(b) Second, to payment of admitted participating other unsecured Trade Creditors,

subject to clause 6 of this Deed.

6. Trade Creditors

6.1. Upon or prior to this Deed being executed, the Claims of any Trade Creditors of the

Company will be dealt with as follows:

(a) In respect of any known Trade Creditors, where any known Trade Creditors are

defined to include such Trade Creditors whom have submitted a proof of debt in

respect of their Claim to the Deed Administrators for adjudication prior to the

date of this Deed — the Proposer will discharge, whether by payment or an agreed

arrangement, these Claims upon or prior to this Deed being executed;

(b) In respect of any unknown Trade Creditors, where any unknown Trade Creditors

are defined to include such Trade Creditors whom have not yet submitted a proof

of debt in respect of their Claim to the Deed Administrators for adjudication prior

to the date of this Deed — any such Claims will be subject to the Deed Fund.

6.2. Upon execution of this Deed:

(a) The Company is released from all Claims against the Company, excluding any

excluded creditors' claims;

(b) All Claims (excluding any excluded creditors' claims) against the Company are

extinguished; and

(c) All persons having a Claim against the Company (excluding any excluded

creditors) must, if called upon to do so, execute and deliver to the Company such

forms of release of any such Claim as the Deed Administrators may require as

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12 October 2015

soon as is reasonably practicable and no later than the time specified by the

Administrators in the relevant form of release.

7. Option Holders and Off-the-plan Purchasers

7.1. Upon Completion, the Proposer agrees to enter into a deed poll (in a form mutually

agreed between the Company, Deed Administrators and the Proposer) which, inter alia,

confirms the Proposer's intention to:

(a) perform any duties and obligations of Company under the Option Deed and/or

Off-the-plan Contract;

(b) assume any liabilities of the Company under the Option Deed and/or Off-the-plan

Contract;

(c) observe any representations, warranties, indemnities and/or guarantees granted

by the Company under the Option Deed and/or Off-the-plan Contract; and

(d) improve the overall commercial position of a Option Holder or Off-the-plan

Purchase by varying the terms the Option Deed and/or Off-the-plan Contract in

accordance with clause 7.2 of this Deed,

and, which shall have the overall effect of providing each Option Holder and/or Off-the-

plan Purchaser a direct course of action against the Proposer for such claims arising

under or pursuant to the terms of the Option Deed and/or Off-the-plan Contract. A

draft deed poll will be presented to the Deed Administrators for consideration prior to

the Second Meeting of Creditors for consideration.

7.2. The Proposer may, as it deems fit and reasonable, vary any term of the Option Deed in

the interests of the Option Holders, including but not limited to the Proposer's offer to

pay stamp duty on behalf of each Option Holder who have or will exercise their option

under the Option Deed and settle the corresponding off-the-plan contract of sale.

8. Satisfaction and Termination

8.1. Additional to any power of the Deed Administrators at law, if the Proposer is unable to

comply with any of the fundamental provisions of the Deed including payment of

monies due pursuant to the Deed, and/or the Deed Administrators form the view that

the Proposer is unlikely to be able to comply with the terms of the Deed, then the Deed

Administrators may in their sole discretion determine to terminate this deed forthwith,

without reference to Creditors nor the need to call a meeting of creditors, in the event

any one or more of the following things occurs:

(a) A court application is made for an order that this deed be terminated, or for an

order that the Company be wound up, or both, and the Deed Administrators

form the view that, having regard to the likely costs of defending the application,

the likelihood of success, the benefits of avoiding expense and litigation and any

other considerations relevant to Creditors' best interests, the deed should be

terminated and the Company wound up forthwith without proceeding to a full

hearing of the application;

(b) The Deed Administrators conclude, on reasonable grounds, that there is no

realistic prospect of the arrangement provided for in this deed being given effect.

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12 October 2015

8.2. Once all Deed obligations are satisfied and the Deed Administrators have distributed

the Deed Funds, the Deed Administrators will effectuate the Deed.

9. General

9.1. Any other term which is necessary to give effect to the above proposal that is agreed to

by the parties to the Deed.

From: Josephine Suen Sent: 9 October 2015 3:35 PM To: fiona.murray-palmer Porter, David Cc: Nicholas Martin; Ben Verney; Ben Skinner Subject: Midland Hwy Pty Ltd (Administrators Appointed) (2829251)[NRF-

APAC.FID1488403]

Dear David and Fiona,

We refer to the recent correspondences.

We have been unable to communicate with our client for almost 72 hours (it is likely that he is flying and/or travelling between countries) and accordingly have been unable to obtain instructions in relation to your client's various queries.

As soon as we hear from him we will provide our client's responses.

In the interim, we make the following general comments in relation to our preliminary views on your queries.

1. Trade Creditors

The terms of the DOCA Proposal provide that Bilkurra Investments Pty Ltd ("the Proposer") will discharge by payment or other agreed arrangement the Trade Creditors' Claims, effective at and upon the commencement date of the DOCA.

Based on these terms, it would be almost impossible for the Proposer to identify a precise contribution they will make to the DOCA fund and/or an intended return to the Trade Creditors - it could conceivably range from 0 c to 100 c in the dollar. Further and in any event if the Proposer is unable to otherwise discharge the claims of the Trade Creditors at or upon the commencement date of the DOCA, presumably the Deed Administrators will do all things to terminate the DOCA.

As previously advised, we believe that all the existing trade PODs are all that exist and on this basis the Proposer believes they will be able to discharge the Trade Creditors whether by payment or other agreed arrangements.

2. Remuneration and Expenses of Administrators

As set out in Ben Skinner's email to David Porter send on 5 October 2015, in the absence of itemization of the remuneration and expenses set out in your letter dated 30 September 2015, the Proposer will not be proposing full payment of such remuneration and expenses, but rather a settled sum.

3. DOCA fund

Based on our comments in point 1 above, the Proposer intends that any contribution made to the DOCA fund is to be applied against the Administrators' remuneration and expenses. We are however currently awaiting on instructions as to what this contribution will be.

4. Secured Creditors

We are not aware of any secured parties in respect of the Company.

5. Off-the-plan Purchasers

Having reviewed your comments, we propose that the DOCA will provide that the Company do all things to novate all the OTP contracts to Bilkurra pursuant to and in accordance with the terms of these contracts - namely, that the Company provides notice to OTP purchasers of the novation. Under the OTP contracts, in the event of a novation the OTP purchasers will arrange for the transfer of each purchaser's deposits to Bilkurra. In this case, Bilkurra may again offer improved commercial terms to the OTP purchasers.

1

In accordance with the terms of the OTP contracts, if a purchaser breaches the novation provisions, e.g. elects not to transfer their deposit to Bilkurra, then the contract provides that their deposits are immediately released to the Vendor, which would be Midland and therefore at the Administrators discretion as to how they intend to deal with the returned deposits.

We note that the LIV have advised that transferring OTP deposits in a solicitors' trust account require only the consent of the client to whom such monies are held on behalf of - i.e. Midland and/or Bilkurra.

Conclusion

We note that these are only preliminary views and comments and are subject to our client's further instructions (which we will confirm once we are able to get into contact with him).

Kind regards,

Josie Suen I Senior Associate I Corporate Evans Ellis Lawyers Level 2, 455 Bourke Street. Melbourne VIC 3000

w: htto://eelaw.com.au/

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NOTICE: This email (and any attachment) contains confidential information intended only for the addressee. If you have received this in error please do not copy or disclose its contents but contact Evans Ellis Lawyers immediately. Unless stated to the contrary in this email (1) any opinions expressed are personal to the sender and do not necessarily represent those of Evans Ellis Lawyers (2) nothing shall or shall be deemed to constitute an offer or acceptance of an offer or otherwise have the effect of forming a contract by electronic communication. Evans Ellis Lawyers make no warranties that this email (and any attachment) is virus free. Any email reply to this address may be subject to interception, retention or monitoring when lawfully permitted for authorised business purposes.

2

30 September 2015

By email: ben.skinner

Attention: Ben Skinner

Evans Ellis Level 2, 455 Bourke Street MELBOURNE VIC 3000

A NORTON ROSE FULBRIGHT Norton Rose Fulbright Australia ABN 32 720 868 049 Level 15, RACV Tower

485 Bourke Street MELBOURNE VIC 3000 AUSTRALIA

Tel +61 3 8686 6000 Fax +61 3 8686 6505 GPO Box 4592, Melbourne VIC 3001 DX 445 Melbourne nortonrosefulbright.conn

Email

Your reference:

Our reference: 2829251

Dear Sirs

Midland Hwy Pty Limited (administrators appointed) (Company)

We refer to your letter dated 28 September 2015 which enclosed a further deed of company arrangement (DOCA) proposal.

We enclose orders of the Federal Court of Australia made on 29 September 2015 extending until 21 October 2015 the adjournment of the Company's meeting of creditors convened under section 439A of the Corporations Act.

Comments on DOCA proposal

Our clients have the following comments on that DOCA proposal:

1

the proposal does not identify:

(1) the precise property that will constitute the DOCA fund available for distribution amongst the Company's creditors;

(2) the precise contribution to the DOCA fund that will be made by your client. That contribution should be either:

(a) a fixed contribution—so that Trade Creditors will receive a changeable 0 in the $ return depending on the quantum of priority claims; or

(b) a changeable contribution—so that Trade Creditors will receive a fixed 0 in the $ return regardless of the quantum of priority claims;

(3)

the actual intended return to Trade Creditors (in that regard, keep in mind our comments on page 4 about whether the Australian Taxation Office (ATO) is a Trade Creditor);

2 clause 2.1—now that the DOCA proposal deals with "Off-the-plan Purchasers" as well as "Option Holders", the definition of "Trade Creditors" should be "any creditor of the Company that is not an Option Holder or Off-the-plan Purchaser;

APAC-#28374008-v1

Norton Rose Fulbright Australia is a law firm as defined in the legal profession legislation of the Australian states in which it practises. Norton Rose Fulbright Australia, Norton Rose Fulbright LLP, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa Inc and Norton Rose Fulbright US LLP are separate legal entities and all of them are members of Norton Rose Fulbright Verein, a Swiss verein. Norton Rose Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients. Details of each entity, with certain regulatory information, are available at nortonrosefulbright.com .

30 September 2015

NORTON ROSE FULBRIGHT

3 clause 3.1—the date at which provable claims are assessed should be the date on which administrators were first appointed to the Company (2 July 2015);

4 clause 3.3:

(1) seeks to preserve the rights of the Company's secured parties. Our clients are not aware that the Company has any secured parties. We enclose a search of the Personal Properties Securities Register. If you are aware of any secured parties, please tell us;

(2) if the Company does have any secured parties our clients will need to consider:

(a) the vesting provision in section 267 of the Personal Property Securities Act 2009 (Cth); and

(b) if the security interest somehow survives the operation of that section, whether the DOCA preserving the secured parties' rights will mean that the Company is insolvent even after the DOCA's terms are fulfilled;

(3 )

what is the consequence of the breach specified in that clause? Is it intended that the breach would result in merely the termination of the DOCA? Or is it intended that the breach would result in the termination of the DOCA and liquidation of the Company?

5 clause 4.1—should provide for the caveat to be removed when both the DOCA has been executed and your client has made its contribution to the DOCA fund (see paragraph 1(2) of this letter);

6 clause 5.1:

(1) creates the timing difficulty identified in the David Porter's email to Ben Skinner sent on 26 September 2015. The calling for and adjudication on proofs of debt will necessarily take more time than the currently proposed "immediately pay and discharge" permits. Regulation 5.6.48 of the Corporations Regulations 2001 (Cth) I requires that at least 14 days' notice be given to allow creditors to lodge a proof of debt (POD). That is before the deed administrators can even commence to adjudicate on those PODs. At the earliest, it is not until that adjudication process is finished that our clients will know the precise claim each Trade Creditor will have on the DOCA fund. Our clients cannot finally distribute the DOCA fund until all those claims are known as to do otherwise would risk that some Trade Creditors are not treated rateably. Once:

(a) your client makes its contribution to the DOCA fund;

(b) your client executes the deed poll contemplated by clause 7; and

(c) suitable arrangements are reached with each of the Off-the-plan Purchasers;

is there anything about the Company being subject to a DOCA that affects your client? Once items (a), (b) and (c) occur we see no reason preventing our clients from dealing with non-consenting Off-the-plan Purchasers and Trade Creditors under the DOCA in the ordinary course. Those entities only have claims against the Company, not your client. In our view, "as soon as is practicable" would be better than "immediately'. If there is some particular reason why Trade Creditors must be paid out "immediately' on execution of the DOCA please tell us;

(2) reference to "subject always to any rights of taxation" should be deleted because:

(a) the term "taxation" is imprecise. We assume the reference is intended to encompass the rights of certain entities to have legal costs reviewed under the Legal Practice Uniform Law. We think it unlikely that a contributor to a DOCA fund is permitted

1 By default this regulation is imported into DOCAs by section 444A(5) of the Corporations Act and Schedule 8A clause 8(2) of the Corporations Regulations.

APAC-#28374008-v1 2

A NORTON ROSE FULBRIGHT

review of the legal fees charged to the administrators by the administrators' lawyers. In any event, if we are wrong about that, the right of review exists by reason of the Legal Practice Uniform Law, not by a provision inserted into the proposed DOCA;

30 September 2015

and

(b) alternatively, if "taxation" is intended to refer to a review of the administrators' or deed administrators' remuneration, the Corporations Act already provides a statutory mechanism to permit that review;

7 Clause 6.1:

(1) a written release from Trade Creditors is not strictly necessary. Section 444H of the Corporations Act provides statutory (as distinct from contractual) basis for the Trade Creditor releases. What is your client's proposal to deal with Trade Creditors who refuse to provide contractual releases?;

(2) Option Holders and Off-the-plan Purchasers should also give statutory releases under section 444H as their claims against the Company are also addressed by the DOCA; and

(3) the statutory releases under section 444H should only become operative when the DOCA is fully effectuated and terminates. Until that time the DOCA will act as a bar to proceedings as a result of Schedule 8A clause 8(2) of the Corporations Regulations;

8 clause 7:

(1) the proposed deed poll is not a novation of the approximately 700 option deeds. A novation would require the express written agreement of each option holder, which is impractical to the point of impossibility. The effect of the deed poll will be that your client takes on whatever obligations to Option Holders as are specified in the deed poll. If the DOCA is finally effectuated section 444H of the Corporations Act will then release the Company from the Option Holders' claims. The overall effect may be similar to a novation, but it is not a novation—it is a deed poll and a statutory release. As we understand things, the proposed deed poll is intended put each Option Holder in a better position than they are currently by, without limitation:

(a) giving each Option Holder direct claims against your client (who, as you point out, owns the Land the subject of the option deeds) on broadly similar (but improved commercial terms) to the terms of the current option deeds with the Company; and

(b) improving the overall commercial position of each Option Holder in the manner set out in clause 7.2 of the DOCA proposal;

9 clause 8:

(1) whilst your client can seek the consent specified in clause 8.1, our clients will need to consider whether the statutory protections afforded to the Off-the-plan Purchasers by the Sale of Land Act 1962 (Vic) permit the transfer of their deposits without something more. It may be that a direction, or even a true novation, from each consenting Off-the-plan Purchaser is necessary to pay their respective deposits into a suitable trust account;

(2) we have not reviewed the contracts with the Off-the-plan Purchasers to determine whether Midland has the power to unilaterally cancel the contracts of those who do not agree to enter into new arrangements with your clients. Absent a specific clause permitting unilateral cancellation, it is not generally open to a party to a contract to do so. We will consider whether section 444H of the Corporations Act provides a statutory basis for effective cancellation of the non-consenting Off-the-plan Purchasers' rights (coupled with a refund of their respective deposits consistent with the Sale of Land Act);

(3) repayment of the deposits of all non-consenting Off-the-plan Purchasers should occur before the DOCA ends.

APAC-#28374008-v1 3

A NORTON ROSE FULBRIGHT 30 September 2015

10 Clause 9.1—is there a specific need that requires the DOCA to terminate "within 6 months"? Such sunset dates in DOCAs can result in a Court application or meeting of creditors as termination by effluxion of time looms. Our clients will fulfil their obligations to creditors to bring the DOCA to an end as soon as is practicable.

Remuneration and expenses of administrators

To assist your client in formulating its DOCA proposal we provide the following information about the remuneration and expenses of the Company's various administrators since 2 July 2015:

Administrators Period Remuneration accrued Expenses

Martin and Crosbie 2 July – 14 August 2015 $44,229.50 $6,842.16

Albarran and Ross 14 July – 4 August 2015 $103,371.50 $27,173.23

Martin and Crosbie 5 August – 27 September* $249,088.00 $131,220.07 * Remuneration and expenses will continue to accrue after 27 September 2015

Australian Taxation Office

Our clients do not presently know the amount of the Company's liability (if any) to the ATO. It is also possible that the Company is entitled to a refund from the ATO.

The Company has received approximately $24 million in option fees. Our clients are yet to determine whether those option fees are assessable income or a capital gain for income tax purposes and/or a taxable supply on which goods and services tax is payable and, if so, whether those taxes have been paid or input tax credits claimed.

Our clients will need to carefully consider the position of the ATO and possibly undertake significant work to complete and lodge income tax returns and/or business activity statements for the Company.

It is possible that the ATO will form part of the Trade Creditors.

Evidence of your client's ability to perform

For the DOCA proposal to succeed your client will need to contribute a significant amount of money to the DOCA fund and continue with the development of the Land. To assist creditors in making the choice between the DOCA proposal and liquidation our clients request that your client provide:

1

evidence of its ability to:

(1) make the required contribution to the DOCA fund—taking into account the remuneration and expenses set out above and assuming Trade Creditors are to be paid 1000 in the dollar under the DOCA proposal, that contribution is likely to be around $1 million (and could be substantially more, depending on the Company's liability to the ATO);

(2) complete contracts with the Off-the-plan Purchaser by 2017 (being the earliest sunset dates in those contracts); and

(3) obtain a planning permit prior to 2022 (being the earliest trigger date for Option Holders to exercise the options before those options expire) or, alternatively, refund the option fees to Option Holders;

2 a projected cashflow for the remaining life of the Hermitage/Acacia Banks development;

3 details of the debts owed by your client to all mortgagees and caveators on the Land; and

APAC-#28374008-v1 4

A NORTON ROSE FULBRIGHT 30 September 2015

4 a copy of a recent 'as is' valuation of the Land (our clients assume that such a valuation exists as you have informed us that your client is proposing to refinance the existing mortgage debt on the Land and enter into a joint venture agreement with respect to the development).

Yours faithfully

David Porter Partner Norton Rose Fulbright Australia

APAC-#28374008-v1 5

Evans Ellis g■•

LAWYERS Principal Responsible: Benjamin Skinner

Our Ref:

BTS:150088

28 September 2015

David Porter

Norton Rose Fulbright Australia

Level 15, RACV Tower

485 Bourke Street

MELBOURNE VIC 3000

BY EMAIL: david.porter;

Dear Sir,

Midland Hwy Pty Ltd (Administrators Appointed) A.C.N. 153 096 069

We refer to the above matter and our recent correspondences.

1. We have obtained instructions from Bilkurra Investments Pty Ltd to put forward the proposal

set out in Annexure A.

2. Our commentary and position with respect to the Deed Proposal follows..

Commentary

3. A number of things must be said about the Deed Proposal.

4. Firstly, we believe that the Deed Prposal should go a long way towards assuaging any concerns

of the Administrators that:

(a) the development at Bendigo is not a going concern; and/or

(b) any contingent claim of the Option Holders rests with the Company in circumstances

where there is likely a nil return to creditors (at least based on your own Report dated 28

July 2015).

The Proposer is the holder of the Land, which is the subject of the Option Deeds and the

Contingent Creditors' claim, and primarily an asset holding company. The Proposer is also

primarily responsible for the fulfillment of the Option Deeds themselves, noting that the

Company has not traded in over 2 years. Clearly it is infinitely more advantageous to the

Contingent Creditors to have recourse against the Proposer and not the Company.

5. We are further instructed that the Proposer at all times believed that upon the execution of the

assignment of the Option Deeds, it had assumed any liability or obligations towards the

Contingent Creditors. Following the administration of the Company and learning that

Contingent Creditors may still rest with the Company, the Proposer has taken it upon itself to

provide the Proposal. In many respects, it is an attempt to formalise the assumption of liability

that it thought it had already effected.

Liability Limited by a scheme approved under Professional Standards Legislation

Level 2,455 Bourke Street I MELBOURNE VIC 3000 T: +61 3 9863 9727 I F: + 613 9863 9728 I W: eelaw.com.au

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28 September 2015

6. In closing, the Proposer cannot stress enough as to the genuinity of the development

(pertaining to the former Option Deeds of the Company), and its intention and desire to realise

the commercial aspirations of the development for the benefit of all (including most notably the

Option Holders). This much should be obvious and plain from the documentation provided to

the Administrator in relation to the progress of the development, which clearly demonstrate

and show the thousands of hours of time spent towards the realisation of the development,

and substantial amounts of money committed. It hopes that the Proposal will move swiftly to

secure the rights of the Option Holders, and to minimise any negative or adverse effect that a

prolonging of the Administration may have on the development (keeping in mind that the

Proposer is currently amidst several key, critical negotiations in relation to the continued

progression of the development, including with funding partners and the City of Greater

Bendigo amongst others).

Yours faithfully,

evairsasiptelers Evans Ellis Lawyers

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28 September 2015

Annexure A

Deed Proposal

1. Recitals

1.1. A Deed is being proposed by Bilkurra Investments Pty Ltd ("the Proposer").

1.2. The Deed Administrators of the Deed are to be Messrs Nicholas Martin and Craig

Crosbie of PPB Advisory ("the Deed Administrators").

2. Definitions

2.1. For the purpose of this Deed Proposal, the following definitions apply unless the

context requires otherwise:

(a) "Act" means Corporations Act 2001 (Cth);

(b) "Claim" means a debt payable by or a claim against the Company being debts or

claims, the circumstances giving rise to which occurred before the Second

Meeting of Creditors, that would be admissible to proof against the Company;

(c) "Company" means Midland Hwy Pty Ltd (Administrators Appointed);

(d) "Deed Period" means the duration of the Deed, commencing from the date the

Deed is accepted until the Deed is effectuated;

(e) "Land" means the land contained in Certificates of Title Volume 10270 Folio 178

and 179, more commonly known as Lots 1 and 2 Midland Highway, Bagshot;

(f) "Off-the-plan Purchasers" means any entity whom has entered into an off-the-

plan purchase contract with the Company, whether by way of exercising its

option or entering into such agreement in its own rights;

(g) "Option Deed" means the option deed between the Option Holder and the

Company granting the Option Holder the right to enter into an off-the-plan

purchase contract to acquire a specified lot at the Land;

(h) "Option Holder" means any entity whom has entered into an option deed with

the Company;

(i) "Second Meeting of Creditors" means the second meeting of the Company's

creditors scheduled to be held 21 October 2015;

(j) "Trade Creditors" means any creditor of the Company that is not an Option

Holder.

3. Creditors

3.1. In accordance with section 444D of the Act, the Deed is intended to bind all unsecured

creditors of the Company to the extent of their claim on or before the date of the

Second Meeting of Creditors that would be admissible to proof against the Company in

accordance with Division 6 of Part 5.6 of the Act if the Company had been wound up.

3.2. All unsecured creditors of the Company must accept their entitlement under the Deed

in full and final settlement of all of their Claims against the Company.

3.3. The Deed will not bind (or restrain the rights of) any creditors of the Company who have

a valid and registered security over the whole or substantially the whole of the

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28 September 2015

Company's assets and undertakings. However, the Deed will be in breach if any of these

secured creditors, who have a valid and registered security over the whole or

substantially the whole of the Company's assets and undertakings, enforce their charge

or make any statutory insolvency (or other) appointment under their security.

4. Caveat

4.1. Upon execution of the Deed, the Deed Administrators will remove the caveat lodged by

the Company against the Land.

5. Payments

5.1. Upon execution of the Deed, the Proposer must:

(a) to the extent of any Trade Creditors' Claim, immediately pay and discharge the

trade creditors, in full; and

(b) pay all of the fees, expenses, liabilities and costs of the administration, including

but not limited to the remuneration and expenses of the administrators, the

Deed Administrators and the former administrators (Hall Chadwick), upon

presentation of itemised invoices, subject always to any rights of taxation.

6. Trade Creditors

6.1. The Trade Creditors must provide a full release to the Company in respect of their

Claims, in a form mutually agreed between the relevant parties, on or before the

effectuation of the Deed.

7. Option Holders

7.1. Upon execution of the Deed, the Proposer must novate by way of deed poll and/or

assume any liability of the Company (in a form acceptable to the Deed Administrators)

that it has or may have to such Option Holders. A draft deed poll will be presented to

the Deed Administrators for consideration prior to the Second Meeting of Creditors for

consideration.

7.2. The Proposer offers to vary (by way of improvement), by way of separate deed to the

Deed (annexed thereto), the terms and conditions of the Option Deed by agreeing to

pay stamp duty on behalf of each Option Holder who have or will exercise their option

under the Option Deed and settle the corresponding off-the-plan contract of sale.

8. Off-the-plan Purchasers

8.1. During the Deed Period, the Proposer will seek the consent and acknowledgement of

each Off-the-plan Purchaser to transfer their deposits held by the Company to the

Proposer, by way of separate deed.

8.2. In the event the Proposer is unable to obtain such consent before the expiry of the

Deed Period, the Company will cancel the underlying contract upon which the deposit

will be returned in full to the relevant Off-the-plan Purchaser.

9. Termination

9.1. The Deed will be deemed to be satisfied when all the Deed obligations of the relevant

parties are complied with to the satisfaction of the Deed Administrators, or within 6

months, whichever comes earlier subject to any agreement between the Deed

Administrators and the Proposer to extend the Deed Period.

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28 September 2015

9.2. Once all Deed obligations are satisfied, the Deed Administrators will effectuate the

Deed.

10. General

10.1. Any other term which is necessary to give effect to the above proposal that is agreed to

by the parties to the Deed.

List of relevant parties a liquidator may considerI.

examining

Ap

pe

nd

ixI

Schedule of Relevant Parties

Company Name(with registration details)

Registered Office andAddress

Directors

(current and former)

Shareholders


Shareholding -beneficially owned

(Yes or No)

Adelaide Properties Pty Ltd

ACN 092 628 870

Reg date: 01/05/2000

139 Madden Avenue

Mildura, VIC

Adrian Ribarits – 01/05/2000 tocurrent

Adrian Ribarits Yes

Graham Matcham – 01/05/2000 to01/05/2000

Note: Registered mortgagee over the land owned by Bilkurra

Bilkurra Investments Pty Ltd

ACN 097 182 182

Reg date: 19/06/2001

GPTAA Pty Ltd

28/25 Bligh Street

Sydney, NSW

Ian Stephens - 01/10/2014 tocurrent

Greater BendigoConsolidated Pty Ltd(current)

Yes

Ben Skinner - 25/11/2013 to01/10/2014

Chintri-Woodlands EstateDevelopment Pty Ltd (former)

No

Alex Stojanovski - 06/05/2003 to25/11/2013

Leong Kok Sau (former) Yes

John Wood - 15/03/2007 to25/11/2013

John Wood Nominees Pty Ltd(former)

Yes

Swee Valcini - 05/02/2004 to15/03/2007

Panorama TTT Pty Ltd(former)

Yes

Russell Wood - 10/11/2003 to15/03/2007

John Wood (former) Yes

John Wood - 19/06/2001 to17/02/2005

Note: Owner of the Land (to be developed as “Hermitage”)

Bourke & Queen Mortgages Pty Ltd

ACN 164 619 970

Reg date: 03/07/2013

EEL

2/455 Bourke Street

Brendan Maletoo - 19/05/2015 tocurrent

Brendan Maletoo No

Note: Registered mortgagee over 99 Palmers Road Truganina, VIC (owned by Foscari Holdings Pty Ltd)

Brookfield Riverside Pty Ltd

ACN 159 111 047

Reg date: 21/06/2012

GPTAA Pty Ltd

28/25 Bligh Street

Sydney, NSW


Evans Ellis Management PtyLtd (current)

No

Ben Skinner - 12/06/2012 to01/10/2014

Ben Skinner (former) No

Note: The Company vis PMA paid c$2m to Bilkurra Investments Pty Ltd without supporting documentation




Directors


Shareholders



(Yes or No)

Colin Adno & Associates Pty Ltd

ACN 143 415 507

Registration date: 30/04/2010

C/- Cohen Fasciani Pty Ltd

Suite 29, 3/25 Claremont St

South Yarra, VIC

Colin Adno – 30/04/2010 tocurrent

Adno Holdings Pty Ltd(current)

Yes

Ian Macleod – 30/04/2010 to01/03/2011

Myer Lipschitz (former) Yes

Myer Lipschitz–30/04/2010 to24/08/2010

Ian Macleod (former) Yes

Note: Receive Property Choice Commission into the Colin Adno & Associates trust account

Evans Ellis Management Pty Ltd

ACN 139 166 144

Reg date: 31/08/2009

EEL

2/455 Bourke Street

Melbourne VIC

Ben Skinner - 31/08/2009 tocurrent

MDC International Pty Ltd(current)

Yes

Drew Woods - 01/05/2012 to07/12/2012

Ellis Law Pty Ltd (current) Yes

Darren Eliau - 31/08/2009 to18/07/2012

Evans Law Pty Ltd (former) Yes

Anita Aarons - 31/08/2009 to15/09/2011

Note: Company solicitors

Foscari Holdings Pty Ltd

ACN 158 434 578

Reg date: 18/05/2012

GPTAA Pty Ltd

28/25 Bligh Street

Sydney, NSW


Evans Ellis Management PtyLtd (current)

No

Ben Skinner - 08/06/2012 to01/10/2014

Evans Ellis Management PtyLtd (former)

Yes

Hakan Elevli - 18/05/2012 to28/06/2013

L. & W. Facilities Pty Ltd(former)

Yes

Note: The Company via PMA paid c$4.8m to Foscari Holdings Pty Ltd without supporting documentation

Gillies Road Pty Ltd

ACN 163 866 724

Registration date: 21/05/2013

GPTAA Pty Ltd

28/25 Bligh Street

Sydney, NSW


Evans Ellis Management PtyLtd

No

Ben Skinner - 21/05/2013 to01/10/2014

Note: The Company via PMA paid c$350k to Gillies Road Pty Ltd without supporting documentation

GPTAA Pty Ltd

ACN 168 785 984

Reg date: 27/03/2014

Level 28, 25 Bligh Street

Sydney NSW 2000

Ian Stephens- 03/08/2015 tocurrent

Ian Stephens (current) Yes

Jai Menon- 27/03/2014 to 03/08/2015

Note: Registered office for a number of relevant parties




Directors


Shareholders



(Yes or No)

Greater Bendigo Consolidated Pty Ltd

ACN 164 194 932

Reg date: 11/06/2013

GPTAA Pty Ltd

28/25 Bligh Street

Sydney, NSW


Ben Skinner (current) Yes

Ben Skinner - 11/06/2013 to01/10/2014

Evans Ellis Management PtyLtd (former)

No

Note: Sole shareholder of Bilkurra Investments Pty Ltd

Investment Mutual Holdings Pty Ltd

ACN 166 712 821

Reg date: 11/11/2013

EEL

2/455 Bourke Street

Melbourne VIC

David Bracka - 11/11/2013 tocurrent

David Bracka Yes

Note: The purchaser of related land. The Company lodged caveats over the 3 properties on 24 September 2015.

Lezak Nominees Pty Ltd

ACN 005 124 596

Reg date: 21/08/1975

67 Elizabeth Street

Malvern, VIC

Lesley Silberscher – 01/09/1975 tocurrent

Lesley Silberscher (current) Yes

Jack Silberscher – 01/09/1975 tocurrent

Jack Silberscher (current) Yes

Lesley Silberscher (former) Yes

Jack Silberscher (former) Yes

Note: Registered mortgagee over the land owned by Bilkurra

Midland Hwy Pty Ltd

(Trustee for Midland Hwy Unit Trust)

ACN 153 096 069

Reg date: 7/09/2011

Dillon Partners

1/10-12 York Street

South Melbourne, VIC

Russell Wood - 26/05/2015 tocurrent

Russell Wood (current) Yes

John Wood - 1/10/2011 to 28/7/2014 John Wood (former) Yes

Jennifer Hamley - 7/09/2011 to17/10/2011

Jennifer Hamley (former) Yes

Note: Sold Option Deeds and off-the-plan land sale contracts

NWC Finance Pty Ltd

ACN 143 762 583

Reg date: 19/05/2010

1/283 George Street

Sydney, NSW

Joe Morello – 19/05/2010 to current Joe Morello (current) Yes

Domenic Morello (current) Yes

Morello Family Nominees PtyLtd

No

Note: Registered mortgagee over 99 Palmers Road Truganina, VIC (owned by Foscari Holdings Pty Ltd)




Directors


Shareholders



(Yes or No)

Project Management (AUST) Pty Ltd

ACN 151 902 126

Reg date: 04/07/2011

92 York Street

South Melbourne, VIC

Michael Grochowski - 04/07/2011to current

Michael Grochowski Yes

Note: Project Manager

Property Choice Pty Ltd

ACN 114 605 373

Reg date: 03/06/2005

C/- Green & Sternfeld Pty Ltd

201 Balaclava Road

Caulfield North

Michael Libman – 19/04/2006 tocurrent

Michael Libman (current) Yes

Gulderen Sivasli – 03/06/2005 to17/01/2007

Deniz Sivasli (former)

Gulderen Sivasli (former)

Yes

Yes

Irena Libman – 03/06/2005 to19/04/2006

Irena Libman (former) Yes

Note: Commissions invoices require payment into Colin Adno & Associates trust account

Property Direct (International) Pty LtdT/AS 21st Century Property Direct

ACN 127 415 196

Reg date: 06/09/2007

21st Century Property'Corporate Centre One'

Suite 8, 2 Corporate Court

Bundall, QLD

Dennis McIntyre – 15/02/2012 tocurrent

Broadview Pinkett Pty Ltd(current)

No

Troy McIntyre – 29/04/2011 to01/03/2012

Broadview Pinkett Pty Ltd(former)

No

Konrad Bobilak – 11/10/2010 to29/04/2011

Henry River Pty Ltd (former) No

Dennis McIntyre – 11/10/2010 to08/03/2011

Troy McIntyre – 22/12/2010 to08/03/2011

Joanna Decco – 11/10/2012 to23/12/2010

Troy McIntyre – 06/09/2007 to11/10/2010

Note: Use Property Choice Pty Ltd as the licenced Real Estate firm

Summit Property & Business LawyersPty Ltd T/AS Summit Law

ACN 151 342 639

Reg date: 07/06/2011

C/- Cohen Fasciani Pty Ltd

Suite 29, 3/25 Claremont St

South Yarra, VIC

Colin Adno – 7/06/2011 to current Adno Holdings Pty Ltd(current)

Yes

Note: Act for the majority of Option Holders


GPTAA Pty Ltd

28/25 Bligh StreetSydney, NSW

Company Name) ACN Registration Date

Bilkurra Investments Pty Ltd 097 182 182 19/06/2001

Greater Bendigo Consolidated Pty Ltd 164 194 932 11/06/2013

Brookfield Riverside Pty Ltd 159 111 047 21/06/2012

Foscari Holdings Pty Ltd 158 434 578 18/05/2012

Gillies Road Pty Ltd 163 866 724 21/05/2013

EEL

2/455 Bourke Street

Melbourne VIC

Company Name ACN Registration Date

Evans Ellis Management Pty Ltd 139 166 144 31/08/2009

Investment Mutual Holdings Pty Ltd 166 712 821 11/11/2013

Bourke & Queen Mortgages Pty Ltd 164 619 970 03/07/2013


Benjamin Skinner - Director Schedule

Company Name (with registration details) Directors (current and former) Date (From - To)

Bilkurra Investments Pty Ltd Former 25/11/2013 to 01/10/2014

Greater Bendigo Consolidated Pty Ltd Former 11/06/2013 to 01/10/2014

Brookfield Riverside Pty Ltd Former 12/06/2012 to 01/10/2014

Gillies Road Pty Ltd Former 21/05/2013 to 01/10/2014

Evans Ellis Management Pty Ltd Current 31/08/2009 to current

Foscari Holdings Pty Ltd Former 08/06/2012 to 01/10/2014

Note: Benjamin Skinner is the current director of 19 unrelated companies and the former director of 7 other companies.


Ian Stephens - Director Schedule

Company Name (with registration details) Directors (current and former) Date (From - To)

Bilkurra Investments Pty Ltd Current 01/10/2014 to current

GPTAA Pty Ltd Current 03/08/2015 to current

Brookfield Riverside Pty Ltd Current 01/10/2014 to current

Gillies Road Pty Ltd Current 01/10/2014 to current

Foscari Holdings Pty Ltd Current 01/10/2014 to current

Greater Bendigo Consolidated Pty Ltd Current 01/10/2014 to current