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[2005] FCA 686
Federal Court of Australia
2005-05-24
Gyles J
Original judgment source is linked above.
REASONS FOR JUDGMENT 1 This is an application pursuant to s 266(4) of the Corporations Act 2001 (Cth) (the Act) by ING Bank NV, Sydney Branch, for orders extending the period provided by s 263 of the Act for the lodging of documents with the Australian Securities and Investment Commission (ASIC) relating to certain charges in its favour. 2 The charges all relate to the provision of an $18 million term facility by the applicant and an associated overseas entity to Airport West Pty Limited (Airport West), a company which holds an underlease at Adelaide Airport at which it has developed a shopping centre. It is the trustee of the Airport West Unit Trust, which is the operating entity. Airport West is, in substance, a joint venture between two parties: ING Real Estate on the one hand and the Lewis Land group of companies on the other through several corporate vehicles. The charges were taken to secure the facility from Airport West and four other companies in the chain of ownership. I need not set out the detail of those companies or the charges in these reasons. 3 Some of the charges were executed on 22 December 2004 and some on 23 December 2004. Section 263 of the Act required that each chargor company was to ensure that documents were lodged within 45 days after the creation of the charge. Section 266 of the Act has the consequence that if this were not done the charges would be void as against a liquidator, an administrator of a company or the administrator of a deed of company arrangement. That result may be ameliorated by s 266(4) which provides as follows: 'The Court, if it is satisfied that the failure to lodge a notice in respect of a charge, or in respect of a variation in the terms of a charge, as required by any provision of this Part:
(a) was accidental or due to inadvertence or some other sufficient cause; or
(b) is not of a nature to prejudice the position of creditors or shareholders;
or that on other grounds it is just and equitable to grant relief, may, on the application of the company or any person interested and on such terms and conditions as seem to the Court just and expedient, by order, extend the period for such further period as is specified in the order.' 4 In the present case the relevant documents were not lodged with ASIC until 11 February 2005, which was some days after the expiry of the statutory period. This proceeding was commenced on 21 March 2005 and adjourned in order that up to date financial information could be obtained. 5 The evidence shows that the failure to lodge the relevant documents within the statutory period was a result of failure of communication between the various of the solicitors involved, some being in Sydney and some being in Adelaide. I am satisfied that the failure to lodge in time was both accidental and due to inadvertence within s 266(4)(a) (Re ACE Funding Limited [2003] FCA 59; (2003) 44 ACSR 363). The discretion to extend the period in each case is thus enlivened. In my opinion, it ought to be exercised. 6 The application is made by the chargee but all company chargors support the application. Indeed, each of them had the statutory responsibility to ensure lodgement. The evidence is that none of the company chargors has entered into any other relevant charge. The evidence establishes that no such charge has been registered. It also establishes that none of the chargor companies is in administration or liquidation. 7 The failure to lodge the charges in time could conceivably affect other creditors in the event of insolvency, particularly those who lent money during the period in which the charges were not but should have been on the register (Re Daisytek Australia Pty Ltd (Administrators appointed) [2003] FCA 768; 21 ACLC 1392; 46 ACSR 424). The evidence satisfies me that the chargor companies are all solvent and, when taken in conjunction, have a very substantial excess of assets over liabilities and have substantial cash flows. There is no realistic prospect of prejudice to creditors. 8 I therefore make the orders sought in the short minutes of order. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.
Solicitor for the Applicant: Corrs Chambers Westgarth