Bernsteen Pty Ltd v Newmore Pty Ltd

Castlemaine Wastewater Treatment Pty Limited 081 417 030

Simon Engineering (Australia) Holdings Pty Ltd 000 142 165

Simon Engineering (Australia) Pty Limited 000 117 000

Eltin Underground Operations Pty Limited 008 906 849

Henry Walker Eltin Contracting Pty Limited 009 625 138

1 Administrators were appointed to 26 companies which constitute the Henry Walker Eltin Group ('HWE Group') on 31 January 2005. On 1 February 2005 those administrators resigned and the plaintiffs were appointed joint voluntary head administrators in their stead. The convening period under s 439A(1) of the Corporations Act 2001 (Cth) expires on 21 February 2005. This is an application under s 439A(6) to extend the convening period to 23 May 2005. 2 Meetings of creditors of the company were held on 8 February 2005 in Darwin, Perth and Sydney. No resolutions were passed at those meetings for removal of the administrators. The creditors present at the meetings were informed of the administrators' intention to make this application and no opposition to that course was voiced at those meetings. Committees of creditors were appointed to each of the companies and on 15 February 2005 Committee members were notified by a circular of the administrators' intention to make this application. No objections to the application have been registered. 3 The application is occasioned by the fact that the HWE Group is a very complex group of companies carrying on business both in the States and Territories of Australia as well as in a number of countries overseas. The businesses conducted by the members of the HWE Group are extensive and multi-faceted. The HWE Group continued to trade up until 31 January 2005. The evidence establishes that the administrators need more time to review the viability of the various businesses within the HWE Group to determine the best method of realisation of its assets. 4 For the reasons which are explained in more detail in the affidavit of Mr McGrath, the administrators will not be in a position to prepare an adequate administrative report prior to 21 February 2005. I accept that the principles applicable on an application such as this are as set out in the document styled 'Plaintiffs' submissions' which I have placed with the papers. 5 Adopting the language of Barrett J in Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10], it seems to me that the balance to which his Honour referred should, in this case, be struck by granting the extension sought. Superficially, the period of the extension is a long one, but in the circumstances it seems to me to be justified. I therefore propose to make orders in accordance with pars 1, 2, 3 and 4 of the document styled 'Order' which I have signed and placed with the papers. However, there are a couple of comments I wish to make in relation to those orders. First, this application was made ex parte, as was the application made to Lindgren J in Re Daisytek Australia Pty Ltd [2003] FCA 575. It is not unheard of for applications under the Corporations Act 2001 (Cth) to be made without joining a contradictor even though the jurisdiction being exercised is Federal jurisdiction which requires the existence of a matter which would ordinarily involve a contradictor. 6 The second aspect of the same issue is that there are, at least in point of theory, persons whose interests could be adversely affected by the making of these orders and who might wish to challenge the making of them. It is the existence of those people and of those interests which demonstrate that the matter is within Federal jurisdiction, even though a contradictor has not been named. It is consistent with principle that I should reserve liberty to any person who can demonstrate a sufficient interest to apply to modify or discharge these orders on appropriate notice to the plaintiffs. 7 Finally, whilst I have reserved liberty to apply, I have done so in a perfunctory fashion and without expressing any view as to what should happen in the event that anybody should seek to take advantage of that liberty, having regard to the terms of s 439A(6) of the Corporations Act 2001 (Cth) and to the decision of Branson J in Bernsteen Pty Ltd v Newmore Pty Ltd (1995) 13 ACLC 1608. 8 I therefore make the following orders, with the direction that they be entered forthwith: 1. Pursuant to s 439(6) of the Corporations Act 2001 (Cth), 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 hereto must convene meetings of creditors under s 439A of the Corporations Act 2001 (Cth) is extended up to and including 23 May2005. 2. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), 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 hereto required by s 439A of that 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 Corporations Act 2001 (Cth). 3. Liberty be granted to the plaintiffs to apply for any further extensions of the convening period referred to in Order 1 at any time prior to 23 May 2005. 4. 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 the Schedule hereto. 5. Liberty to apply be granted to any person who can demonstrate sufficient interest to modify or discharge the orders on appropriate notice to the plaintiffs. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.