HUON VALLEY SPRINGS PTY LIMITED (RECEIVERS & MANAGERS APPOINTED)

IN THE MATTER OF HUON VALLEY SPRINGS PTY LIMITED

AND IN THE MATTER OF THE COMPANIES (TASMANIA) CODE

1 This is an application pursuant to s315(4) of the Companies (Tasmania) Code for an order approving a scheme of arrangement propounded by the receivers and managers of Huon Valley Springs Pty Ltd (receivers and managers appointed) (herein referred to as "the company").

2 According to the statement prepared in accordance with s316 of the Code the company has a short and financially disastrous history. It was incorporated in June 1985 to carry on the business of developing, exploiting and promoting the natural mineral waters that have been located around Craddock and Cygnet in the south of Tasmania. The company incurred extensive promotional expenses and launched its product with a great deal of publicity and concomitant expense. According to the company accounts, it managed to lose in excess of $1.6 million in the period to the 31st December 1985. During the same period the only income earned from sales was $14,542.

3 In early February 1986 a secured creditor, the Commonwealth Development Bank made demand for the repayment of loans and interest being a sum in excess of $525,000. The Bank appointed Messrs Allen and Murphy receivers and managers on the 7th February 1986. The report as to the affairs prepared by the receivers disclosed there were insufficient assets to pay the secured creditors. The unsecured creditors who were owed something in the order of $3.0 million had little or no prospect of recovering anything. The receivers attempted to find a purchaser for the company. In result, on the 8th April 1986 the receivers entered into a written agreement with Evanford Pty Ltd and put forward a scheme of arrangement between the company and its unsecured creditors. This scheme was annexed to and formed part of the agreement with Evanford. The submission of the scheme for the consideration of the unsecured creditors was conditional upon the holders of the paid up capital of the company transferring all their shares to Evanford. The essence of the agreement is as follows:-

(1) In the event of the holders of the paid up capital not transferring their shares to Evanford, or the unsecured creditors not approving the scheme, Evanford will purchase the plant, stock, equipment and intellectual property of the company for $617,000. This sum is estimated to be sufficient to pay the secured creditors but there will be no surplus for distribution to the unsecured creditors.

(2) In the event of the shares being transferred and the scheme of arrangement coming into force by order of the court Evanford will pay the receivers a total sum of $817,000 plus a sum for legal costs together with a further sum calculated with reference to the company's accumulated tax losses. These payments will provide sufficient funds to pay the secured creditors in full and the unsecured creditors approximately four cents in the dollar.

(3) In any event Evanford will manage the company's business (subject to the supervision of the receivers) from the date of the agreement until a proposed scheme of arrangement is approved by the requisite number of secured creditors and an order of the court, or alternatively rejected by the unsecured creditors.

4 The scheme proposes a compromise between the company and its unsecured creditors. The essential feature is a provision that upon approval in accordance with the provisions of s315 of the Code, the claims of all unsecured creditors of the company as at the 7th February 1986 will become barred and converted to claims against the scheme fund, namely the purchase price payable by Evanford after discharge of liability to the secured and certain specified creditors.

5 On the 26th May 1986 an order was made pursuant to s315(1) of the Code directing that a meeting of unsecured creditors be held in Hobart on the 24th June 1986. The terms of that order are as follows:-

"1 That a meeting of the company's unsecured creditors, other than preferential creditors, be held on the 24th June 1986 at 10.00 am at the Conference Room, Hobart Town Hall, Macquarie Street, Hobart for the purposes of considering, and if thought fit, approving with or without modification, a scheme of arrangement proposed to be made between the company and its unsecured creditors, the said scheme being in the form annexed to the affidavit of John William Murphey (sic) and sworn on the 15th day of May 1986 and filed herein and marked as annexure 'E' thereto.

2 That John William Murphey (sic) be the Chairman of the aforesaid meeting or failing him, Peter Bernard Allen.

3 That on or before the 4th June 1986, notices convening the said meeting in the form annexed to the aforesaid affidavit of John William Murphey (sic) and marked as annexure 'F' thereto, be sent by ordinary pre-paid post to the unsecured creditors whose names and addresses are set forth in the list annexed to the said affidavit of John William Murphey as annexure 'A' thereto.

4 That the said notices be accompanied by a copy of the said scheme and a proxy in the form annexed to the aforesaid affidavit of John William Murphey (sic) and marked as annexure 'G' thereto.

5 That the said notice, in addition, be accompanied by a statement pursuant to Section 316 of the Companies (Tasmania) Code which statement shall be in the form annexed to the aforesaid affidavit of John William Murphey (sic) and marked as annexure 'K' thereto, together with an up to date statement of the company's assets and liabilities in the form annexed to the aforesaid affidavit of John William Murphey (sic) and marked as annexure 'H' thereto.

6 That the said notice, in addition, be accompanied by a covering letter to unsecured creditors containing an index to the documents accompanying the said notice.

7 That for the purposes of the said meeting of creditors, the presence of one creditor in person or by proxy, at such meeting, shall constitute a quorum.

8 That on or before the 13th June 1986 the company cause to be published once in 'The Mercury', once in 'The Examiner', once in The Government Gazette of Tasmania, and once in 'The Australian' an advertisement in the form annexed to the aforesaid affidavit of John William Murphey (sic) and marked as annexure 'J' thereto.

9 That leave be given for John William Murphey (sic) and Peter Bernard Allen to be appointed to administer the scheme of arrangement proposed to be made between the company and its unsecured creditors aforesaid.

10 That a letter be attached to the papers and sent to the creditors."

6 On the hearing of the application on 26th May 1986, the court was given an undertaking that the scheme documents would not be sent out to the unsecured creditors until the holders of all the paid-up capital in the company had transferred their shares to Evanford, as such transfer was an essential condition precedent to the operation of the scheme. Some delay was experienced in obtaining the transfer of the shares of one of those shareholders with the result that the documents were not sent out until two days after the date fixed by the order.

7 For reasons which follow it is unnecessary to determine whether the failure to dispatch the documents on the date ordered would result in a refusal to approve the scheme. There was some evidence that the delay caused prejudice to one of the unsecured creditors. However, any such prejudice was minimal and would not of itself have prevented approval of the scheme. See Re Telford Inns Pty Ltd (1985) 10 ACLR 312 at 315. In all other respects the order of 26th May 1986 was complied with.

8 The meeting was attended by a number of unsecured creditors appearing either in person or by proxy. The major creditor Trideltic Pty Ltd was represented by its proxy, Mr Denton, a director of the company, who expressed strong opposition to the scheme. Mr Denton claimed to be proxy for a number of other unsecured creditors and proposed that the meeting be adjourned so that there would be more time to consider the proposal, or failing that, the scheme not be approved.

9 The chairman ruled that the sum in respect of which Trideltic was an unsecured creditor was $180,010.48. This ruling was disputed by Mr Denton who claimed that the correct figure was in the vicinity of $980,000. The chairman also ruled invalid a number of documents executed by unsecured creditors purporting to appoint Mr Denton as their proxy. After lengthy argument, the chairman put to the vote a motion, "That the scheme of arrangement in the form of the document initialled by the chairman be approved by this meeting without modification". Upon the basis that the chairman's ruling with respect to the validity of certain proxies given Mr Denton and the amount of Trideltic's claim was correct, the result of the vote was as follows:-

82 creditors in favour having total claims of $2,122,810.79

8 creditors against having total claims of $267,795.96

10 Accordingly, the chairman declared that the scheme was agreed to by a majority in number of the unsecured creditors present and voting either in proxy or in person being a majority whose debts or claims amounted to not less than 75% of the total debts and claims of those present, either in person or in proxy.

11 In accordance with the provisions of s315(4) of the Code approval of that scheme is now sought. The duty of the court upon an application for approval of a scheme of arrangement is firstly, to be satisfied that a resolution approving the scheme was passed by the statutory majority at a duly convened meeting, and secondly, that the scheme is fair and reasonable so that "an intelligent and honest man who is a member of that class, and acting alone in respect of his interest as such a member might approve it". See In re Alabama, New Orleans, Texas & Pacific Junction Railway Co (1891) 1 Ch 213 at 243.

12 Upon the hearing Trideltic Pty Ltd appeared by learned counsel and opposed the making of the order sought upon the basis:-

1 The statutory requirements of s315(4) have not been fulfilled.

2 In the exercise of its discretion the court should not make the order sought.

13 The disputed instruments purportedly appointing Mr Denton proxy can be considered in three different groups. The first group comprises 21 creditors having debts and claims in a total sum of $99,378.90. Each of the 21 creditors used the form referred to in paragraph 4 of the order of this court dated 26th May 1986. That form was as follows:-

"IN THE SUPREME COURT OF TASMANIA

PRINCIPAL REGISTRY No of 1986

(1) ........................................................................................................... of ....................................................................................................... being an unsecured creditor of the abovenamed Company hereby appoints the Chairman of the meeting or

(2) .................................................. of ................................................... as my/our/its proxy to act for me/us/it at the meeting of unsecured creditors of the abovenamed Company to be held at 10 a.m. on 24th June, 1986 at the Conference Rooms Hobart Town Hall, Macquarie Street, Hobart for the purposes of considering and if thought fit, approving (with or without modification) the proposed Scheme of Arrangement referred to in the Notice convening the meeting to vote *FOR the said Scheme with or without modification or *AGAINST the said Scheme.

DATED this . . . day of . . . 1986.

..................................

NOTE:

1 Insert the name and address of Creditor.

2 If a person other than the Chairman of the Meeting is to be appointed, cross out the words 'the Chairman of the meeting' and insert the name and address of the person to be appointed in the space provided.

3 Cross out whichever is inapplicable. If neither is crossed out, it will be assumed that the person named as proxy is authorised to vote in favour of the said Scheme with or without modification, and that the person granting the proxy is a creditor as is revealed in the records of the Company.

4 The creditors are requested to lodge proxies on or before 5pm on 19th June, 1986 at C- Arthur Andersen & Co, Chartered Accountants, 50 Bridge Street, Sydney."

14 Each of the 21 creditors, whom I infer had been contacted by Mr Denton, completed their proxy form by deleting the reference to "Chairman of the meeting" and inserting the name "Mr David H. Denton, corporate counsel of Trideltic Pty Ltd" as being the proxy. At the foot of the form the words "for the scheme with or without modification" were deleted and in their place the words "For an adjournment - failing that" were substituted.

15 In the case of each of these documents the chairman ruled that they were not valid appointments of Mr Denton as proxy as they were not in accordance with the form approved by the court. The form approved by the court made no reference to voting for an adjournment and provided only for voting either for the scheme with or without modification or against the scheme.

16 At common law, attending and voting at meetings had to be in person. Authority to appoint another to attend and vote at a meeting depended upon agreement (Articles of Association) or statutory authority. See Harben v Phillips (1883) 23 Ch 14 at 35. The statute or articles can limit the nature and extent of the agent's authority.

17 Regrettably, the word "proxy" is now used indiscriminately to describe both the agent and the instrument appointing him. See Gower, Modern Company Law, 4th ed 538. In Re English, Scottish, and Australian Chartered Bank [1893] 3 Ch 385, the Court of Appeal considered the statutory expression "present in person or by proxy" now found in s315(4)(a) of the Code. Lord Lindley said, at 409, that proxy meant "some agent properly appointed".

18 In the present case, as in the case of in Re Dorman, Long & Company Ltd (1934) 1 Ch 635, the authority for voting by proxy is to be found in the statute. Section 315(4)(a)(i) provides that the court may approve a scheme of arrangement if, and only if, "at a meeting convened in accordance with an order of the court ....... the arrangement is agreed to by a majority number of the creditors present and voting either in person or in proxy ......." The statute imposes no limit upon the extent of the agent's authority and prescribes no form for the instrument of appointment. In English, Scottish and Australian Chartered Bank (supra), at 417, Smith LJ said:-

"..... it seems to me that it is manifest that the line in this section 'either in person or by proxy' means 'either in person or by his lawfully constituted agent', and not by the instrument of proxy or the proxy paper."

19 It was submitted on behalf of the receiver that the order of this court dated the 16th of May 1986 limited the extent of the authority a creditor could confer upon his proxy to either vote "for the said scheme with or without modification, or against the said scheme". Consequently, any form which purported to authorise the proxy to vote for an adjournment and failing that to vote against the scheme was invalid. This argument cannot be sustained for the following reasons:-

1 The authority to appoint a proxy lies in s315(4)(a)(i) of the Code and is without limitation.

2 Section 315(1) which is the basis for the order dated the 16th of May 1986, empowers the court to order that a meeting "be convened in such manner ............" as the court directs. The section says nothing about the conduct of business at the meeting. It would require clear words to find that the provisions of s315(1) are wide enough to enable a court by order to restrict the unfettered power given by subs 4(a)(i) to attend and vote by proxy.

3 The order of the 16th of May 1986 does not purport to limit the extent of the authority which may be given a proxy. It merely directs that the notice of meeting be accompanied by "a proxy in the form" annexed to a certain affidavit. By its terms the order does not direct that the form of proxy accompanying the notice is the only form of instrument which will effectively appoint a proxy. There is no statutory authority for making such an order because s315(1) confines the order to giving directions as to the manner in which the meeting is to be convened. See Re Dorman, Long (supra) at 659.

4 The notes at the foot of the form of proxy do not constitute part of the instrument. They are no more than directions on how to complete the form and how it will be construed in the event of neither option marked with an asterisk being crossed out.

5 There is no statutory prohibition which prevents a creditor from appointing a person proxy to act as he or she thinks fit by simply deleting both voting options set out in the form. Similarly, there is no statutory prohibition against a creditor limiting the authority in some way by deleting one or both of the options and substituting some other words indicating the extent of the proxy's authority, as was done in the case of the first group of instruments of proxy, by providing that the proxy was to vote "for an adjournment or failing that against the said scheme".

20 Accordingly, I find that the 21 instruments of proxy comprised in group one were erroneously rejected by the chairman as being invalid instruments of appointment. Had these instruments been admitted to vote against the scheme in the event of the meeting not being adjourned, the result of the voting would have been:-

82 creditors in favour of the scheme having total claims of $2,122,810.79

29 creditors against the scheme having total claims of $367,174.86.

21 The second group comprises three instruments of proxy. Each were completed in an identical manner to those contained in the first group, but were neither rejected as invalid nor admitted to vote by the chairman. The creditors concerned are:-

22 By letter dated 19th June 1986, Mr Denton forwarded to an employee of the receiver 20 instruments of proxy. All of these instruments either fell within the group I have called group one, and were rejected as invalid or were accepted by the chairman and had a vote recorded in accordance with the tenor of the instrument. The letter concluded by stating that it was understood the receiver already held proxies from three creditors whose names were then set out. Two of these creditors had votes recorded in accordance with the tenor of the instruments. The third was Stiles Stationery. Mr Denton held instruments of proxy by J W Bardwell Electrical and R M Cannon & Co They are dated five or more days before the day the meeting was held. Why these two instruments of proxy were not adverted to by the chairman remains unexplained by the evidence. There was evidence that some proxies were handed up at the start of the meeting, and the probabilities are that these included J W Bardwell Electrical and R M Cannon & Co. I assume they were inadvertently overlooked by the chairman. However, the instrument executed by Stiles Stationery could not have been handed up at the meeting as the letter of Mr Denton demonstrates. There is no evidence upon which I could find that this proxy was in fact sent to the chairman as Mr Denton's letter asserts. There is no evidence to suggest it was delivered to any other person and accordingly I am not satisfied that Stiles Stationery appointed any person as its proxy to attend the meeting of unsecured creditors.

23 However, the other two proxies in the second group should have been admitted and if counted as votes against the scheme in the event of the meeting not being adjourned, the result of the voting would have been:-

82 creditors in favour having total claims of $2,122,810.79

31 creditors against, having total claims of $368,203.32.

24 The third group comprise four instruments of proxy and require individual examination.

1 Clements and Marshall Pty Ltd executed an instrument in a form identical to those comprising group one. It subsequently revoked this authority and executed a fresh instrument appointing Mr Denton its proxy but on this document did not cross out either option for voting set out in the form. The chairman recorded Mr Denton as the proxy for this company and his vote as being in favour of the scheme. His action in so doing was correct as the creditor had been notified by note 3 accompanying the instrument of proxy, that the agent's voting authority would be construed as limited to voting in favour of the scheme if one of the voting options was not deleted.

2 Creative Kingdom Pty Ltd initially executed the instrument appointing the chairman proxy and in accordance with note 3, directed him to vote in favour of the scheme. This instrument was subsequently revoked and replaced by one in the same terms as those comprising group one. The chairman rejected the second instrument as being invalid and counted the first instrument of proxy as being a valid appointment of himself and a vote in favour of the scheme. For the reasons given, this decision was wrong. This creditor's debt amounted to $8,536.03. The creditors in favour of the scheme must accordingly be reduced by one in number and by $8,536.03 in value. Those voting against the scheme must be increased by a like number and value.

3 A L Barber (Variety Club Aust.) is a creditor for $7,500. Again the instrument was in the same form as those comprising group one. The chairman counted this instrument as an appointment of himself as proxy and a vote in favour of the scheme. There is no explanation for this action and I assume it was an error. As in the case of Creative Kingdom Pty Ltd the creditors recorded as voting in favour of the scheme will have to be reduced in number and value and those against, correspondingly increased.

4 Ansett Air Freight is a creditor for $840.31. Two instruments both properly executed by this creditor were adduced in evidence. Both appointed Mr Denton proxy and both were dated the 23rd June 1986. One was in the form identical to those comprising group one, but the other clearly directed the proxy to vote in favour of the scheme. The chairman counted this creditor as voting in favour of the scheme. There was no evidence which enables me to make a finding which of the two instruments was executed last and therefore impliedly revoked the other. I cannot be satisfied that the chairman's decision was correct, and accordingly the number and value of creditors voting in favour of the scheme will have to be reduced by deleting therefrom this creditor's vote.

25 As a result of the findings with respect to the proxies comprising group three, the voting recorded by the chairman should have been:-

79 creditors in favour of the scheme having total claims of $2,105,934.45

33 creditors against the scheme having total claims of $384,239.35.

26 Although the above findings affect the number of creditors and value of creditors voting both for and against the scheme, the statutory requirements of s315(4)(a)(i) are satisfied provided the chairman's decision to admit Trideltic Pty Ltd as a creditor for the sum of $180,010.48 was correct.

27 The directors of the company proposed to market the mineral water in various containers including pressure pack cans of different sizes. A pressure pack can comprises a cap, a valve, an actuator and the can itself. Trideltic Pty Ltd, a Melbourne based company, entered into an agreement with the company to supply these component parts. It was agreed that the parts would be imported from overseas and that the cans would be specially painted with the company's motive. Although the evidence was insufficient to enable me to make any findings with respect to the terms of the agreement I am satisfied that in fact Trideltic imported a large number of these component parts. Some were delivered to the company's premises and as appears to be common ground, the company is indebted to Trideltic in respect of these goods in the sum of $180,010.48. Some were delivered to a bond store in Hobart where they remain to this day. A dispute has arisen with respect to the component parts in the bond store. Both Trideltic and the company have instituted proceedings in the Supreme Court of Victoria with respect to these goods. In its action, as well as claiming the sum of $180,010.48 Trideltic alleges that the company has wrongfully repudiated the agreement and that repudiation has been accepted with the result that property in the goods has not passed to the company. Trideltic claims damages for breach of agreement in the sum of $748,473 and continuing at the rate of $7,971 per week. In the other action the company claims that the property in the goods in bond store has passed to the company and the statement of claim seeks a declaration to that effect together with related injunctive relief.

28 However, upon this hearing some evidence was adduced which tended to suggest that the company claims that some of the goods in store were not the subject of the agreement of supply and the declaratory relief will not be sought with respect to those unordered goods.

29 The evidence did disclose that the cost to Trideltic of the stock in bond was $626,451. If the company succeeds in the action brought by it in the Supreme Court of Victoria it will have title to the goods and owe Trideltic for the agreed purchase price which (apart from any dispute about unordered goods) will not be less than $626,451 plus the $180,010 for the goods delivered to the company's premises.

If Trideltic succeeds in its claim the company will be liable to pay damages in a sum which is impossible to quantify but may well be in the vicinity of $750,000. In addition Trideltic will recover the sum of $180,010 previously referred to. The final result of both actions will largely depend upon findings made with respect to such matters as which of the goods in bond store were the subject of the agreement to supply, any residual value the goods may have and the responsibility for and reasonableness of any storage costs. In these proceedings it is impossible to determine the nature and extent of the liability of one company to another.

The chairman of the meeting of creditors was faced with the same impossibility. He resolved the problem by admitting Trideltic as a creditor for the sum of $180,010 only, being the amount not in dispute. In evidence he conceded that on any view of the proceedings pending in the Supreme Court of Victoria the company would ultimately be indebted to Trideltic in a substantially larger sum but said that as Trideltic's claim was sounded in damages it was unquantified and should not be taken into account when considering the value of creditors' claims referred to in s315(4)(a)(i) of the Code.

30 Prior to the Companies (Tasmania) Code coming into force s181 of the Companies Act 1962 required the court to be satisfied that, "a majority in number representing three fourths in value of the creditors .... " agreed to the scheme.

31 In Re Midland Coal, Coke, and Iron Company [1895] 1 Ch 267, it was held that "creditors" included those persons with contingent claims against the company. In Re Southern Australia Perpetual Forests Ltd [1971] VicRp 60; [1971] VR 475, "creditors" in s181 of the Victorian Companies Act was held to include those persons with unquantified contractual claims against the company. However, in Trocko v Renlita Products Pty Ltd (1973) 5 SASR 207, Hogarth J held that "creditors" in s181 of the Companies Act (South Australia) did not include persons having claims in tort for unliquidated damages. See also Re Waymouth Guarantee and Discount Co Ltd (1975) 10 SASR 407.

32 Section 315(4) of the Code differs from s181 of the Companies Act 1962 in that it requires approval of a scheme by a majority in number of the creditors "being majority whose debts or claims against the company amount in aggregate to not less than 75% of the total amount of the debts and claims ....... " The significance of the additional words appearing in the Code was considered by McLelland J in Re Glendale Land Development Ltd (1982) 7 ACLR 171. After reviewing the decisions I have referred to his Honour said at p.176:-

"In my opinion having regard to the history of the legislation, its evident purpose, the longstanding decision in Re Midland Coal Coke and Iron Co and the terms in which s315 is now expressed, 'creditors' in that section should be understood as embracing all persons with claims which would be entitled to be admitted to proof if the company were wound up."

I have no doubt that that expression of view is correct and I adopt it. It is true that the admittance of contingent and unquantified claims may make it difficult to establish that the majority in favour of a scheme comprise 75% of the total value of the debts or claims of that majority. As to this McLelland J said in Re Glendale Land Development (supra) at 176:-

"However, if such difficulties proved insuperable in the particular case the consequence would be, no doubt, that if the amount of the particular claim in question proved critical in the assignment of statutory majority the plaintiff might have difficulty in satisfying the court that the conditions set out in s315(4)(a) had been fulfilled. (cf Re Albert Life Assurance Co (1871) 6 Ch App. 381). Furthermore, difficulties as to quantification and disputes as to liability are not confined to unliquidated claims."

33 The scheme itself accords with the interpretation of s315(4) that I have adopted by defining a creditor who is to be bound by its terms as follows:-

"'creditor' means any person who has or claims to have any claim against the company arising out of or having its origin in any matter occurring on or prior to (7th February 1986) and of any transaction, act or omission of the company or any person on or before (7th February 1986) whether the claim be present, future or contingent or whether liquidated or sounding only in damages and whether in contract or in tort howsoever arising other than .........." (there follow two exceptions which are not material for present purposes).

34 Before an order approving this scheme of arrangement can be made the court has to be affirmatively satisfied that the scheme has been approved by the majority of the unsecured creditors who attended the meeting and voted either in person or proxy, being a majority whose debts or claims amount to not less than 75% in value of the debts or claims of those so attending and voting.

35 In addition to the claim for $180,010.48 for the goods delivered to the company's premises Trideltic has a claim in respect of the goods in bond store. That claim is for either the agreed price of the goods which were ordered and perhaps a claim for damages for breach of contract or for damages for a breach of a contract alone being a breach which amounted to a wrongful repudiation of the agreement. The evidence does not enable me to make a finding with respect to the quantum of this claim; however, I cannot exclude the possibility that it may be in the order of $750,000.

36 If the chairman had admitted Trideltic's claim with respect to the goods in bond store in the sum of $750,000 the result of the meeting would have been as follows:-

79 creditors in favour of the scheme having total claims of $2,105,934.45

33 creditors against the scheme having total claims of $1,134,239.35.

37 In this event, although the majority in number of creditors would have been in favour of the scheme such majority would comprise only 65% of the total debts and claims of those present and voting. The required 75% would not be achieved unless Trideltic's claim in respect to the goods in store amounted to less than $325,000.

38 I am not satisfied that the value of Trideltic's claim with respect to the goods in store is less than $325,000. The evidence tended to establish that it might be considerably in excess of that amount. Accordingly, I am not satisfied that the provisions of s315(4)(a)(i) of the code have been fulfilled. The order sought will not be made and the application is dismissed.