RE LUCAPA DIAMOND COMPANY LTD; EX PARTE LUCAPA DIAMOND COMPANY LTD [2026] WASC 212

[2026] WASC 212 Page 1 JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS CITATION : RE LUCAPA DIAMOND COMPANY LTD; EX PARTE LUCAPA DIAMOND COMPANY LTD [No 2] [2026] WASC 212 CORAM : HILL J HEARD : 11 MAY 2026 DELIVERED : 11 MAY 2026 PUBLISHED : 3 JUNE 2026 FILE NO/S : COR 147 of 2025 MATTER : IN THE MATTER OF LUCAPA DIAMOND COMPANY LTD EX PARTE RICHARD SCOTT TUCKER AS JOINT AND SEVERAL ADMINISTRATOR OF LUCAPA DIAMOND COMPANY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT) First named Plaintiff PAUL JOSEPH PRACILIO AS JOINT AND SEVERAL ADMINISTRATOR OF LUCAPA DIAMOND COMPANY LTD (SUBJECT TO DEED OF COMPANY ARRANGEMENT) Second named Plaintiff -- 1 of 10 -- [2026] WASC 212 Page 2 Catchwords: Corporations - Insolvency - Deed of company arrangement - Application for directions that deed administrators would be justified and acting properly in effecting completion of deed of company arrangement and related deed - Turns on own facts Legislation: Corporations Act 2001 (Cth) sch 2 s 90-15 Result: Application granted Category: B Representation: Counsel: First named Plaintiff : P Edgar SC & S P Tomasich Second named Plaintiff : P Edgar SC & S P Tomasich Solicitors: First named Plaintiff : Lavan Second named Plaintiff : Lavan Case referred to in decision: Re Lucapa Diamond Company Ltd; Ex Parte Re Lucapa Dimond Company Ltd [2025] WASC 560 -- 2 of 10 -- [2026] WASC 212 HILL J Page 3 HILL J: (This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.) 1 On 27 November 2025, I made orders pursuant to s 447A and s 444GA of the Corporations Act 2001 (Act) giving the plaintiffs leave to transfer all shares and options in Lucapa Diamond Company Ltd to Gaston International DMCC or its nominee (November 2025 orders). At the time, I gave relatively brief reasons for my decision and subsequently, on 22 January 2026, published detailed reasons for my decision.1 2 On 1 April 2026, the plaintiffs filed an interlocutory process seeking directions pursuant to s 90-15 of sch 2 of the Act that they are justified and otherwise acting reasonably in effecting completion in accordance with the terms of the Gaston DOCA and a related deed entered into on 20 March 2026 by the plaintiffs, Lucapa, and Gaston. 3 The interlocutory process was first listed before me for directions on 7 April 2026. On this date, I made orders for the filing of materials in support of the application, for notice of the interlocutory process to be given to creditors, shareholders and optionholders of Lucapa, as well as to ASIC, and listed the matter for hearing on 16 April 2026. On 16 April 2026, orders were made to extend these timeframes, to vacate the hearing on 16 April 2026, and list the interlocutory process for hearing on 24 April 2026. Two further adjournments were sought by the plaintiffs to enable them to file further materials, and ultimately, the interlocutory process has been listed for hearing before me today. 4 In support of the application, the plaintiffs have relied on eleven affidavits. Six of the affidavits were before me on the s 444GA application, being: (a) four affidavits of Richard Scott Tucker, the first named plaintiff, filed 18 September 2025, 10 November 2025, and 14 November 2025; (b) an affidavit of Fiona Hansen, an expert of FTI Consulting, filed 31 October 2025; and 1 Re Lucapa Diamond Company Ltd; Ex Parte Re Lucapa Dimond Company Ltd [2025] WASC 560 (Primary Reasons). In these reasons, I have adopted the definitions used in the Primary Reasons. -- 3 of 10 -- [2026] WASC 212 HILL J Page 4 (c) an affidavit of Jing Yun Soh, a solicitor employed by the plaintiffs' solicitors, filed 26 November 2025. 5 Five affidavits have been filed specifically in support of the interlocutory process, being: (a) three affidavits of Richard Scott Tucker, the first named plaintiff, one open and one confidential filed 1 April 2026, and one filed 7 May 2026; (b) an affidavit of Paul Joseph Pracilio, the second named plaintiff, filed 22 April 2026; and (c) an affidavit of Eloise Adele Hartill, a solicitor employed by the plaintiffs' solicitors, filed 8 May 2026. 6 The plaintiffs have also filed two written outlines of submissions in support of the orders sought by them, filed on 22 April and 7 May 2026. 7 I am satisfied on the evidence before me that notice of this application has been given to ASIC, as well as to Lucapa's creditors and securityholders.2 No one has filed a notice of intention to be heard on the application nor sought to be heard at the hearing today. Factual background 8 Much of the factual background to this matter was summarised in the Primary Reasons. For the purposes of this application, I do not intend to repeat that summary. Since the delivery of the Primary Reasons, the following relevant developments have occurred. 9 The Gaston DOCA initially contemplated that completion of the DOCA (Completion) would occur in early December 2025. However, as at today's date, neither the shares nor the options in Lucapa have been transferred to Gaston or its nominee. This is because a number of the conditions precedent to the Gaston DOCA have not yet been satisfied, including the renewal or extension of all relevant mining tenements (Condition Precedent 20); confirmation there is no outstanding indebtedness of the Lucapa Group (Condition Precedent 23); and the resignation of the existing directors and 2 Affidavit of Paul Joseph Pracilio filed 22 April 2026 [12] - [25], 'PJP-2' - 'PJP-12'; Affidavit of Richard Scott Tucker filed 7 May 2026 [26] - [37], 'RST-143' - 'RST-152'. -- 4 of 10 -- [2026] WASC 212 HILL J Page 5 appointment of new directors of Lucapa (Conditions Precedent 4 and 5). 10 In relation to Conditions Precedents 4 and 5, Mr Tucker's evidence is that he anticipates Gaston will nominate new directors shortly, and after this occurs, the existing directors intend to resign.3 11 In respect of Condition Precedent 23, Mr Tucker's evidence is that this condition cannot be satisfied while Condition Precedent 20 is outstanding. This is because the Lucapa Group's outstanding indebtedness relates to the status of its mining tenements.4 The principal issue that has prevented satisfaction of the conditions precedent to enable Completion to occur concerns Lucapa's interests in the Lulo mine. While on 6 March 2026, the plaintiffs received confirmation that the Lulo Alluvial licence had been successfully renewed,5 there is an outstanding issue in relation to Lucapa's interest in the Lulo Kimberlite JV. 12 In or around March 2025, prior to the plaintiffs' appointment as administrators of Lucapa, Lucapa negotiated an agreement with its joint venture partners by which its interest in the Lulo Kimberlite JV would increase from 39% to 51%. This agreement, which is referred to as a mineral investment contract, includes as a party the National Agency for Mineral Resources (NAMR), an agency of the Angolan government.6 13 In May 2024, the Lulo Kimberlite Exploration licence (Lulo Licence) expired. At that time, the NAMR informed Lucapa that the Lulo Licence remained in force and effect until a new mineral investment contract was signed. As at today's date, the mineral investment contract has not been executed. As a result, the Lulo Licence has not been formally renewed. Mr Tucker is concerned there is a risk that the Lulo Licence could be forfeited if certain conditions of the mineral investment contract cannot be satisfied or is ultimately not executed.7 14 Mr Tucker's evidence is that at the time the November 2025 orders were made, he was not aware there were any issues in relation to the preconditions to the execution of the mineral investment contract or the 3 Open affidavit of Richard Scott Tucker filed 1 April 2026 [18]. 4 Open affidavit of Richard Scott Tucker filed 1 April 2026 [19]. 5 Open affidavit of Richard Scott Tucker filed 1 April 2026 [21], 'RST-124'. 6 Open affidavit of Richard Scott Tucker filed 1 April 2026 [23] - [25], 'RST-125'. 7 Open affidavit of Richard Scott Tucker filed 1 April 2026 [26]. -- 5 of 10 -- [2026] WASC 212 HILL J Page 6 renewal of the Lulo Licence for the purpose of satisfying Condition Precedent 20. 15 On 10 December 2025, Mr Tucker was informed that Gaston's solicitors had met with the Angolan authorities regarding renewal of the Lulo Licence and were informed that the NAMR required the joint venturers of the project, being Lucapa, Endiama and Rosas (Joint Venturers), to pay both an environmental bond and a renewal payment (which together total USD $2.2 million) before the agency would sign the mineral investment contract.8 16 As at the time of the hearing before me today, the environmental bond has not been paid, and only the first instalment (of approximately AUD $40,000 of the renewal payment) has been paid by the Joint Venturers. Mr Tucker's evidence is that Lucapa does not have the funds to make these payments in full.9 17 Since becoming aware of the requirements to pay the environmental bond and renewal payment, the plaintiffs have discussed with Gaston and its solicitors the steps required to achieve Completion.10 These discussions culminated in the entry into a deed on or about 20 March 2026 between the plaintiffs, Lucapa, and Gaston (Relating Deed). Under the terms of the Relating Deed, these parties have agreed that:11 (a) Conditions Precedents 20 and 23 will be waived by Gaston on the basis that Gaston will provide the funding to satisfy the monthly instalments of the renewal payments; and (b) the price payable by Gaston under the Gaston DOCA will be reduced by USD $1.7 million. 18 The effect of the Relating Deed is that the Gaston DOCA will be able to effectuate, and Gaston will be responsible for payment of both the environmental bond and all future instalments of the renewal payment. 19 However, as a consequence of entry into the Relating Deed, a lesser amount will be available for distribution to creditors and shareholders. The plaintiffs currently estimate that creditors will 8 Open affidavit of Richard Scott Tucker filed 1 April 2026 [33], 'RST-128'. 9 Open affidavit of Richard Scott Tucker filed 1 April 2026 [51]. 10 Open affidavit of Richard Scott Tucker filed 1 April 2026 [45] - [48]. 11 Open affidavit of Richard Scott Tucker filed 1 April 2026 [49], 'RST-131'. -- 6 of 10 -- [2026] WASC 212 HILL J Page 7 continue to receive 100 cents in the dollar, but the shareholders will receive up to $0.007 cents per share down from their initial estimate of $0.018 dollars per share.12 The plaintiffs have also updated their analysis of the return to shareholders on a liquidation scenario. Their current estimate is that the return to shareholders on a liquidation scenario would be between nil (at the low end) and $0.005 cents per share (at the high end), with a preferred valuation of nil.13 20 The plaintiffs attempted to contact representatives of Lucapa's top eleven shareholders to ascertain their position in relation to the present application. They were able to contact six of these eleven shareholders; all of whom expressed frustration with the circumstances that have led to this application, including the delay in finalising the DOCA and the amendments that have been made to its terms. However, critically, none of them said they no longer support the DOCA or object to its Completion.14 21 The plaintiffs have maintained a communications register to record all communications received from Lucapa's members regarding this application. The plaintiffs have received a significant number of responses from the shareholders,15 though, as senior counsel for the plaintiffs have pointed out, many of these concerned the question as to when the DOCA will effectuate and payments will be received by them. 22 Two specific complaints were drawn to my attention by the plaintiffs in their written submissions. 23 The first concerned the extent of Gaston's knowledge of the mineral investment contract during the sales process run by the plaintiffs, as well as the status of the Lulo Licence, given the mineral investment contract has not been executed. This shareholder suggested consideration be given to an alternate proposal, namely, that Lucapa's Australian assets be spun out into an unlisted public company. However, as pointed out by the plaintiffs, before this can occur, it would be necessary for the DOCA to be terminated.16 The plaintiffs' solicitors have responded to this communication and provided information to address the matters that have been raised. 12 Open affidavit of Richard Scott Tucker filed 1 April 2026 [69] - [70], 'RST-132'. 13 Affidavit of Richard Scott Tucker filed 7 May 2026 [23] - [24], 'RST-142'. 14 Affidavit of Paul Joseph Pracilio filed 22 April 2026 [25] - [26], 'PJP-13'. 15 Affidavit of Paul Joseph Pracilio filed 22 April 2026 [28] - [30]. 16 Affidavit of Paul Joseph Pracilio filed 22 April 2026, 'PJP-29'. -- 7 of 10 -- [2026] WASC 212 HILL J Page 8 24 The second complaint also concerned Gaston's conduct and expressed a preference for Lucapa to be placed in liquidation.17 25 As was pointed out by the plaintiffs in their written submissions, neither of these complaints adequately grapple with the commercial circumstances that confront Lucapa's creditors and securityholders, including the consequences of Lucapa being placed in liquidation. If this were to occur, it is likely that creditors would not be paid in full, and as a consequence, it is extremely unlikely that shareholders would receive any return. 26 Since the interlocutory application was filed, the plaintiffs, Lucapa, and Gaston have agreed to extend the sunset date of the Gaston DOCA until 18 May 2026, and for the payment to be made by Gaston by instalments. Completion will not occur until all payments have been received. In particular, it was drawn to my attention that no shares or options will be transferred until payment under the Gaston DOCA has been made in full, subject to the adjustment provided for in the Relating Deed. Should the directions sought by the plaintiffs be made? 27 In the interlocutory application, the plaintiffs seek orders pursuant to s 90-15(1) of the IPS that they are justified and are otherwise acting reasonably in effecting Completion in accordance with the terms of the Gaston DOCA and the Relating Deed. 28 Pursuant to s 90-15(1), the court may make 'such orders as it thinks fit in relation to the external administration of a company'. It is accepted by the court that this power is extremely broad. 29 The principles which govern the exercise of this power are well known, and can be summarised as follows: (a) The power to give advice is intended to facilitate external administrators' performance of their functions, and should be interpreted widely to give effect to this purpose. (b) The court may give a direction, where it is just and beneficial to do so. 17 Affidavit of Paul Joseph Pracilio filed 22 April 2026, 'PJP-15'. -- 8 of 10 -- [2026] WASC 212 HILL J Page 9 (c) The function of the power is to give an external administrator advice as to the proper course of action to take in an external administration. (d) The court will not give directions as to a matter of commercial or business judgment. There must be a legal issue of substance or procedure, including an issue of power, propriety or reasonableness. (e) The power will generally not be used to determine substantive rights and make binding orders, although it is possible to do so if the necessary parties are before the court. 30 In their written submissions, the plaintiffs submit it was appropriate for this application to be brought so that shareholders and creditors were informed about the Relating Deed and had a forum in which to raise any concerns. It was submitted that, on this basis, the direction sought was not a direction as to a business or commercial decision. It was also contended that if the orders sought by the plaintiffs are not made, it may be necessary to call a meeting of creditors to consider whether the Gaston DOCA should be amended or terminated, and the Lucapa Group placed in liquidation.18 31 On the evidence before me, I accept that if this occurred and creditors voted in favour of the amendment of the DOCA, it is likely that a question would remain about the validity of the s 444GA leave that had already been obtained, and whether it would be necessary for a fresh application to be made. 32 In the circumstances of this case, I accept it was appropriate for the plaintiffs to bring the application to seek directions from the court in relation to the continued validity of the s 444GA orders that were obtained in November 2025. In my view, the question as to whether the change in circumstances impacts the validity of these orders is a legal question of substance. 33 On the evidence before me, I do not consider that the matters that have occurred since these orders were made call into question the validity of the orders that have been made by the court. The reasons for that decision, namely, that members would not be unfairly prejudiced by the transfer of their shares and options, remain to be the case, and it is appropriate to make a direction to this effect. 18 Open affidavit of Richard Scott Tucker filed 1 April 2026 [60]. -- 9 of 10 -- [2026] WASC 212 HILL J Page 10 Conclusion and orders 34 For these reasons, I consider it is appropriate to make orders in terms of the interlocutory process. 35 I accept that the form of the ancillary orders sought in terms of publishing and providing notice of the orders to creditors, and the allowance for any agreed party to apply to this court to vacate or vary these orders within five business days of service will protect the relevant parties from any possible prejudice that could arise for this application. I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia. KS Associate to the Hon Justice Hill 3 JUNE 2026 -- 10 of 10 --