BANKRUPTCY AND INSOLVENCY - administration - creditors' meeting - proxies - appointment of secretary of employees' union as attorney for employees - Corporations Act 2001 (Cth) s 447A
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BANKRUPTCY AND INSOLVENCY - administration - creditors' meeting - proxies - appointment of secretary of employees' union as attorney for employees - Corporations Act 2001 (Cth) s 447A
Judgment (4 paragraphs)
[1]
THE COURT ORDERS THAT:
Pursuant to section 447A of the Corporations Act (the Act), Part 5.3A of the Act is to operate in relation to each of the First to Ninety-Fourth Respondents (the Group) as if it provided that at the meeting or meetings held pursuant to section 436E of the Act, each employee of the said Respondents who is a member of the Australian Workers' Union (the AWU) had duly appointed Mr Scott McDine to be her or his attorney pursuant to Regulation 5.6.31A for the purpose of that meeting or those meetings save for:
(a) any employee who attends any meeting in person; and
(b) any employee who signs a proxy appointing some other person to attend any meeting on his or her behalf.
All parties' costs of and incidental to the application be paid as costs of the administration, such costs to be taxed in the absence of agreement.
An order pursuant to Rule 1.39 of the Federal Court Rules 2011 shortening the time by which this originating process is required to be served on the Respondents pursuant to Rule 2.7 of the Federal Court (Corporations) Rules 2000.
The Applicant notify the Australian Securities and Investments Commission of the making of this order by 4pm on 12 April 2016.
Liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
[2]
DAVIES J:
1 The Australian Workers' Union ("AWU") has sought an order pursuant to s 447A of the Corporations Act 2001 (Cth) ("the Act") in the following terms:
Part 5.3A of the Act is to operate in relation to each of the First to Ninety-Fourth Respondents (the Group) as if it provided that at the meeting or meetings held pursuant to section 436E of the Act, each employee of the Respondents who is a member of the Australian Workers' Union (the AWU) had duly appointed Mr Scott McDine to be her or his attorney pursuant to Regulation 5.6.31A for the purpose of that meeting or meetings save for
(a) any employee who attends any meeting in person; and
(b) any employee who signs a proxy appointing some other person to attend any meeting on his or her behalf.
2 The first to ninety-fourth respondents are members of a group of companies ("the Group") of which the first respondent, Arrium Limited, is the parent company. Mr Scott McDine is the national secretary of the AWU.
3 On 7 April 2016, Messrs Paul Billingham, Said Jahani, Matthew Byrnes and Michael McCann of Grant Thornton ("the administrators") were appointed administrators of the Group.
4 On 7 April 2016, the administrators provided Mr McDine with the following documents proposed to be sent to employee creditors of the Group:
(a) a standard letter advising of the appointment of the administrators; and
(b) a frequently asked questions document.
5 The frequently asked questions document disclosed that the administrators intend to hold a concurrent meeting of creditors of the Group on 19 April 2016 at 2pm in Sydney with a live webcast to Whyalla, at which creditors will have an opportunity to vote on resolutions and raise any questions.
6 There is evidence before me that the members of the AWU include about 2000 persons who are employed by some of the entities within the Group; there are a number of enterprise agreements made under the Fair Work Act 2009 which cover and apply to the AWU, employing entities within the Group, and employees of those entities including AWU members; the AWU members are employed at several sites across Australia, including Whyalla in South Australia, Laverton in Victoria and Rooty Hill in New South Wales; and AWU members who were employed by the Group as at 7 April 2016 will be creditors of the Group with respect to employee entitlements.
7 The AWU wishes to ensure that the interests of its members as employees of the Group are properly advanced at the first creditors' meeting on 19 April 2016 due to the significant value of employee entitlements and is concerned that the short timeframe before the creditors' meeting will impede the ability of AWU members to participate in the meeting. Due to their geographical spread, many AWU members will be unable to attend the meeting in Sydney or Whyalla, and there is a significant logistical challenge in having individual AWU members sign the necessary proxy forms before the creditors' meeting takes place. Accordingly, the AWU has sought the order in the form to which I have referred.
8 There is authority for the making of such an order: see Re Pasminco Ltd (subject to a deed of company arrangement) (2003) 45 ACSR 1; [2003] FCA 265; Re Ansett Australia Ltd (admin apptd) (2001) 39 ACSR 296; [2001] FCA 1348. In both cases the Court held that it has the power under s 447A of the Act to make such an order and, in circumstances similar to the present case, that it was appropriate that the Court make that order in furtherance of the objects of Pt 5.3A of the Act. In Re Pasminco, Goldberg J stated at [19] that:
…the court should be concerned to ensure that whenever meetings of creditors of companies subject to a deed of company arrangement are called, that any inhibitions upon, or barriers to, creditors being able to have their voice heard or vote cast at such meeting be overcome. More particularly is this so where there is a large body of creditors, such as employees, each with claims modest by reference to the overall indebtedness of the companies subject to deeds of company arrangement, but substantial and significant for each employee.
In the present case, the administrators are yet to have the first meeting, but Goldberg J's comments apply equally to the ability of employees to have a voice at the first creditors' and subsequent creditors' meetings.
9 I accept that the Court has the power to make the order under s 447A of the Act and I am satisfied on the evidence that the order should be made. I am fortified in that view by the consent of the administrators to the making of the orders, which are also supported by the US noteholders which, I am informed, constitute a large body of creditors of companies in the Group.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies.