Australasian Memory Pty Ltd v Brien

REASONS FOR JUDGMENT 1 On 16 February 2005 pursuant to s 439A(6) of the Corporations Act 2001 (Cth) ('the Act') I ordered that the period in which the administrators of companies within the Henry Walker Eltin group must convene meetings of creditors under s 493A of the Act be extended until 23 May 2005. Section 439A contains no provision which would allow a further extension of the convening period and is couched in terms which would suggest that a further extension of that period was not within the contemplation of the legislature. Judges of this Court have held that s 439A is confined in that way: see Watson v Uniframes Ltd & Trumbull (1994) 55 FCR 556 ('Watson'), Burnsteen Pty Ltd v Newmore Pty Ltd (1995) 13 ACLC 1608 ('Burnsteen'). 2 Application is now made under s 447A of the Act to further extend the convening period until 5 July 2005. Two issues arise: first, whether there is power to make the order sought and second, if there is such power, whether the order should be made. Section 447A was not considered by the Court in Watson or in Burnsteen. For that reason, those cases were distinguished by Santow J in Re Ricon Constructions Pty Limited (in Liq); Ex Parte McDonald 43 NSWLR 174. In that decision Santow J strongly suggests that the requisite power resides in s 447A. A wide interpretation of s 447A was endorsed by the High Court in Australasian Memory Pty Limited v Brien (2000) 200 CLR 270. In Re Enviro Star Energy Ltd [2002] NSWSC 1246 Barrett J made a further extension order as did Parker J in Re Western National Earthmoving Corporation Pty Ltd (1997) 141 FLR 121. I am also informed by Mr Oakes SC that in this Court Finkelstein J made a further extension order in the Ion Ltd administration, which is proceeding number VID 1620 of 2004. These authorities are sufficient to establish that s 447A is wide enough in its scope to authorise the making of the orders sought. 3 The evidence establishes that whilst the administrators would be in a position to convene meetings within the time frame set by the last order they would not be in a position to comply with s 439A(4)(b) because further steps need to be taken before the administrators will be in a position to finalise a recommendation to creditors concerning the proposed deed of company arrangement which the administrators currently have in contemplation. 4 I am satisfied that the administrators have done what they reasonably could in order to bring this matter to finality and that it is in the commercial interest of creditors that the extension sought be granted. 5 I therefore make the following orders: 1. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth) ('the Act'), the period within which the administrators of Henry Walker Eltin Group Limited (Administrators Appointed) and of each of the 25 other companies set out in the schedule to this application must convene meetings of creditors under s 439A of the Act be further extended up to and including 5 July 2005. 2. Pursuant to s 447A(1) of the Act the meetings of the creditors of Henry Walker Eltin Group Limited (Administrators Appointed) and each of the 25 other companies set out in the Schedule to this application required by s 439A of the Act may be held at any time during, or within 5 business days after the end of, the convening period, as extended by Order 1 above notwithstanding the provisions of s 439A(2) of the Act. 3. Liberty be granted to the plaintiffs to apply to the Court for any further extensions of the convening period referred to in order 1 at any time prior to 5 July 2005. 4. Liberty to apply be granted to any person who can demonstrate sufficient interest to modify or discharge these orders upon appropriate notice being given to the plaintiffs. 5. The costs and expenses of this application be costs and expenses of the administration of Henry Walker Eltin Group Limited (Administrators Appointed) and the 25 other companies set out in Schedule 1 hereto. 6. The exhibits to the affidavit of Joseph David Hayes sworn 5 May 2005 be returned.