Pan Australia Shipping Pty Limited, in the matter of Pan Australia Shipping Pty Limited (Administrators Appointed) ACN 115 315 985 [2006] FCA 1464

REASONS FOR JUDGMENT 1 On 2 October 2006, Mr Ian James Purchas and Ronald John Dean-Willcocks ('the Administrators') were appointed administrators of Pan Australia Shipping Pty Limited ('the Company'). Pursuant to s 436E of the Corporations Act 2001 (Cth) ('the Act'), the Administrators convened a meeting of creditors, which was held on 6 October 2006. At that meeting, it was unanimously resolved that a committee of creditors be appointed and the identity of the committee was determined. The Administrators have now applied to the Court, pursuant to s 439A(6) of the Act, for an order extending the period during which the Administrators must convene a further meeting of the Company's creditors in order to determine whether the Company should execute a Deed of Company Arrangement or whether the administration should end or whether the Company be wound up. 2 The Company carries on the business of domestic transport of container cargo, primarily between the ports of Sydney, Melbourne, Adelaide and Perth. The Company had two container ships, known as Boomerang I and Boomerang II. A coastal trading licence was granted in respect of Boomerang I, pursuant to s 288 of the Navigation Act 1912 (Cth). That licence allows the Company to operate Boomerang I to engage in trade on the Australian coast. Boomerang I was the subject of a charter party dated 17 February 2006 with Jaymont Shipping Company Limited. On 4 October 2006, the Company received notice from Frontline Management Bermuda Limited concerning termination of that charter party. 3 Boomerang II was the subject of an alleged charter party between Comandate Marine Corp ('Comandate') and the Company. The Company commenced a proceeding in this Court against Comandate seeking, inter alia, damages under the Trade Practices Act 1974 (Cth) and for breach of contract. On 20 June 2006, I granted an ex parte injunction restraining Comandate from taking any steps in the English High Court of Justice, or any other court, seeking to restrain the continuation of that proceeding brought by the Company against Comandate. That injunction was confirmed by Rares J on 22 June 2006. On 22 August 2006, his Honour dismissed an application by Comandate to discharge the injunction. Comandate has filed a notice of appeal in respect of certain of the orders made by Rares J on 22 August 2006. That appeal is fixed for hearing before the Full Court on 25 and 26 October 2006. 4 On 24 June 2006, an order for the arrest of Boomerang 1 was made on the application of Comandate. On 22 June 2006, the Full Court set aside the writ in rem. Comandate sought special leave to appeal from the Full Court's orders to the High Court of Australia. That application for leave was refused. The Company now has a potential claim against Comandate for the wrongful arrest of Boomerang I. The Administrators are obtaining senior counsel's opinion on the merits of that claim. 5 On 6 October 2006, ASP Holdings Pty Limited ('ASP') commenced a proceeding in the Victoria registry of the Court, seeking orders for arrest of Boomerang 1 on the basis of a lien and maritime claim under s 18 of the Admiralty Act 1988 (Cth). ASP was apparently engaged by the Company to provide crew for Boomerang I. ASP's claim is for approximately $900,000. However, the books and records of the Company show no amount owing by the Company to ASP. On the other hand, they indicate an amount of some $500,000 owing to ASP Ship Management Pty Limited. 6 In the proceeding, brought by ASP ASP has obtained an order for leave to proceed against the Company notwithstanding that it is in voluntary administration. The Administrators have applied to revoke that leave. Finkelstein J has reserved his decision on that question. On 7 October and 10 October 2006, advertisements for sale of the Company's business were placed in The Australian newspaper by the Administrators. A number of interested parties have contacted the Administrators concerning the business and infrastructure of the Company. Confidentiality arrangements are currently being negotiated with various parties to enable those interested parties to have access to Company information and records. The Administrators have also engaged in negotiations with another potential purchaser of the Company's assets. Various representatives of that potential purchaser are travelling to Australia from France to attend a meeting today with the Administrators. 7 The Administrators seek an extension of the time within which to convene the second meeting of creditors to 6 November 2006. The Administrators have sent, to each member of the committee of creditors, a communication indicating their intention to make this application. National Australia Bank Limited, a secured creditor of the Company has also been informed of the application and has no objection. None of the other creditors has indicated to the Administrators any objection to the making of this application. 8 The Administrators wish to take the following steps before preparing the report required by s 439A(4) of the Act: · obtain advice from senior counsel about the merits of the Company's claims against Comandate; · consider the proceeding brought by ASP against the Company; · consider the result of the appeal by Comandate against the orders of Rares J made on 22 August 2006; · engage in discussions and negotiations with potential purchasers with a view to the possible sale of the Company's business; · formulation of any proposed Deed of Company Arrangement. The Administrators also wish to be in a position to form conclusive opinions about whether it would be in the creditors' interests for the Company to execute a Deed of Company Arrangement, or for the administration to end, or for the Company to be wound up. 9 In the circumstances I consider that it is appropriate to accede to the Administrators' application. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.