Motor Group Australia Pty Limited (Administrators Appointed) (ACN 101 051 101), in the matter of Motor Group Australia Pty Limited (Administrators Appointed) (ACN 101 051 101) [2005] FCA 695

6 The Company is engaged in the business of selling motor cars. The motor cars which it sells are supplied by a United Kingdom company, which has recently gone into administration. One of the terms upon which the Company sells motor cars is that it provides a warranty against defects and the like for various periods after the sale is effected. Under statute, it is required to give a warranty for 12 months. In fact, the Company has given warranties for 24 months, with that period being extended to 36 months in certain circumstances. In order to satisfy warranty claims, the Company has relied upon the supplier in the United Kingdom for financial support. It has now been informed by the supplier that there will no longer be any support in relation to such claims. Accordingly, the Company will no longer be in a position to receive the financial support involved in meeting such claims. 7 The Company had received some warranty claims prior to the date of the appointment of the administrators. It will no doubt be possible to quantify those claims. However, apart from claims that have already been made, there is the potential for further claims in the future, which cannot at this stage be properly or adequately quantified. There are some 1900 vehicles which are potentially the subject of such claims. There may be no claims. That, of course, is probably unlikely. There may be substantial claims. That simply is not known. 8 The Company's substantial assets consist of motor vehicles, which are the subject of a charge to its bankers. The Company also has other assets. The Company's principal liability is that to its bankers, although it has other trade creditors, liabilities to employees and, of course, the warranty claims, both those made and those yet to be reported. The directors of the Company have intimated that they wish to examine the possibility of a deed of company arrangement. The administrators wish to take advice as to whether it is feasible to propound a deed of company arrangement and also wish to take advice as to the categories of creditors and potential creditors whose claims should be covered by any such a deed of company arrangement. 9 Questions would arise as to the identification of potential creditors and their quantification. Those matters would have considerable effect on the terms of any proposed deed of company arrangement. The administrators have informed the Court that the bankers do not oppose the proposed extension. The effect of an extension, of course, is to continue the stays imposed by Division 6, Part 5.3(a), apart from the stay on any winding up proceeding and on any proceeding against the Company in Court. 10 Section 440B provides that, during the administration, a person cannot enforce a charge on the property of the Company, except with the administrator's written consent or with the leave of the Court. The administrators have already given written consent to the bankers to enforce their charge if they are so advised, although the bankers have indicated they do not intend to do so at this stage. Section 440C provides that, during the administration of the Company, the owner or lessor of property that is used or occupied by the Company cannot take possession of the property, except with the administrator's written consent or with the leave of the Court. I have also been informed by the administrators that the principal property used or occupied by the Company is owned by its directors and that, since they support the present proposal, there is no prejudice likely to follow from the operation of s 440C. 11 In all the circumstances, I consider that it is appropriate to make an order extending the time within which a meeting can be convened in order to satisfy s 439A(1). Section 439A(2) provides that the second meeting must be held within five business days after the end of the convening period. I would not have thought that that requires the meeting to be held during a five day period, rather, it simply means that the meeting must be held before the date which is five days after the end of the convening period. 12 I understand that contrary views have at least been hinted at and, against the possibility that those contrary views may be right, the administrators have also asked the Court to make an order pursuant to s 447A(1) that the meeting of creditors required by s 439A(1) may be held at any time during, or within five business days after the end of, the convening period. To the extent that it is necessary to make such an order, I am prepared to make such an order. 13 It is possible that there are interested persons who might be affected by the orders that I propose to make. Any interested person may, pursuant to s 447A(1), apply to the Court for the making of such order, as the Court thinks appropriate about how Part 5.3(a) of the Act is to operate in relation to a particular company. It is appropriate to reserve liberty for any interested person to make such an application in this proceeding.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.