MATTER : Section 439A(6) and s 447A(1) of the Corporations Act 2001 (Cth) and EVANS & TATE LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) ACN 064 820 408 and others

EVANS & TATE LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 064 820 408)

AUSTRALIAN PREMIUM WINES PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 001 189 859)

AUSTRALIAN WINERIES PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS) (ACN 058 399 134)

AWT PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 054 567 690)

CRANSWICK PURCHASING PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 082 976 921)

EVANS & TATE (USA) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 084 350 425)

EVANS & TATE VINEYARDS PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 008 713 764)

IRONBARK WINES PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 090 894 974)

IRYBEL PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 005 405 194)

OAKRIDGE VINEYARDS PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 076 706 440)

REDELLO WINES PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 003 753 491)

SELWYN VITICULTURAL SERVICES PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 093 317 198)

SELWYN WINES PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 055 105 201)

SOVINT PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 005 514 367)

WINE SOURCES (NSW) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 062 372 605)

WINE SOURCES (QLD) PTY LTD (ADMINISTRATOR APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 108 365 742)

WINE SOURCES (VIC) PTY LTD (ADMINISTRATOR APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 065 453 803)

WINE SOURCES (WA) PTY LTD (ADMINISTRATORS APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 111 551 547)

WINE SOURCES HOLDINGS PTY LTD (ADMINISTRATOR APPOINTED) (RECEIVERS AND MANAGERS APPOINTED) (ACN 082 150 801)

EVANS & TATE PREMIUM WINES PTY LTD (ADMINISTRATORS APPOINTED) (ACN 000 024 304)

Corporations - Corporation in administration - Ex parte application - Application for three months extension of period to convene second meeting of creditors - Receivers and managers in control of company assets - Possibility of extension of time for convening second meeting of creditors raised at first meeting - Factors for consideration - Flexibility of powers - Notice to creditors and other interested parties - Application to fix administrators' remuneration - Application to secure administrators' fees and expenses by lien over company property - Adjourned until after notice given to creditors, members and other interested parties

Corporations Act 2001(Cth)

Time for convening second meeting of creditors extended by 30 days with leave granted to apply on notice for further extension

Applications to fix and secure administrators' fees adjourned until after notice given to creditors, members and others

1 EM HEENAN J: Immediately following the hearing of an ex parte application on 7 September 2007, made by the administrators of the company Evans & Tate Ltd and of other companies within its group, pursuant to s 439A(6) of the Corporations Act 2001 (Cth), for an extension of time to convene the second meeting of creditors required by s 439A of the Act, I made an order extending the time for convening that meeting for a period of 30 days; gave liberty to the applicants to apply for a further extension; directed that notice of the orders be given to the creditors of the companies by means of a circular to be dispatched by post; and gave any creditor of the companies or any other interested person liberty to apply to vary the orders. I adjourned those parts of the application by which the applicants sought orders for the specification of their rates of charging for work done in the course of the administration and for securing of their charges and expenses against the assets of the companies, but with liberty to apply to relist upon advance notice given to the committee of creditors and by notice published in a newspaper or newspapers circulating in Australia to all creditors and members of the companies and to any persons who may be affected by such orders.

2 The application was heard on an urgent basis. Before making the orders described, I gave brief oral reasons for my decisions and the terms of the orders which proceeded from a detailed examination of the application and the written submissions which had been filed in support of the application. However, in view of the importance of the applications, and because I declined at that stage - on an ex parte hearing - to make all the orders sought by the applicants, I have considered that it is desirable to record more extensively my reasons for decision.

3 Evans & Tate Ltd, the first-named defendant, is the parent and controlling company of a group of 20 wholly-owned Australian companies (all of which are now under external administration), three wholly-owned UK subsidiaries and one partly-owned US company. This group of companies conducts large scale operations for the growing, production and distribution of fine wines in Australia and abroad. This includes many associated arrangements for purchasing the harvests of other grape growing producers, processing the product, marketing and other facets of the production and distribution of premium wines. Evans & Tate Ltd is a publicly listed company on the Australian Stock Exchange.

4 For some time past the group has been experiencing financial difficulties. On 21 August 2007, a major creditor, the Australian and New Zealand Banking Group Ltd (ANZ), appointed joint and several receivers and managers of all, except one, of the companies in the group, under powers conferred upon the creditor by securities granted to it. The inter-group structure of the companies is that Evans & Tate Ltd owns all the issued shares in seven companies in the group; one of those wholly-owned subsidiaries owns all the issued shares in six other companies in the group, two of which own all the issued shares in four other companies in the group. Two further wholly-owned subsidiaries of the parent own all the shares in five other companies in the group and another wholly-owned subsidiary has a 20% share holding in another company which need not be described.

5 It is unnecessary for the purposes of this application to investigate the individual solvency, or the extent of assets and liabilities, of all the companies in the group. This is because the parent and each of its subsidiaries have entered into a deed of cross guarantee, dated 15 July 2005, by which they each agreed to be jointly and severally liable for the debts of each of the others. Consequently, all of the companies in the group are each jointly and severally liable for all the liabilities of other companies in the group. Further, any proposals for the restructuring of the parent, or for that matter of any one or more of the other companies in the group, needs to be assessed from the overall consolidated position of the entire group.

6 Because of the appointment made by the principal creditor on 21 August 2007, these receivers and managers are now in control of the assets and operations of almost all of the companies. The evidence on the present application, based on information and belief, is that the receivers expect that it will take two or three months, from the 6 September 2007, to undertake and finalise any sale of the business assets of the company as a going concern, as is presently being attempted. Consequently, any such disposition of the assets by the receivers and managers is not expected to be completed until December 2007 or thereabouts.

7 On 20 August 2007 - that is, the day before the appointment of the joint and several receivers and managers - the two applicants were appointed as joint and several administrators of the defendant companies pursuant to pt 5.3A of the Corporations Act. However, because the receivers and managers, appointed under the securities by the principal creditor, are in control of the assets of the companies and their operations, the applicant administrators are limited in their ability to reach a meaningful view about the future prospects of the group or any potential resolution of its difficulties. This is because any proposed or potential resolution will be contingent upon the approach of the receivers and managers in realising the assets of the group for the satisfaction of the secured debts and, naturally, upon prices received. The important task for which the administrators have initially been appointed requires them to consider whether, and if so how, some scheme of arrangement or other resolution, short of liquidation of all or any of the companies in the group, may be to the advantage of creditors and others concerned. It is at present difficult for the administrators to undertake that task without knowing what assets may be sold by the receivers and managers pursuant to their powers and, importantly, what assets and trading advantages may remain which might then be sold or integrated into a reduced, but profitable, operation for the companies in the group under a suitably designed scheme of arrangement. In short, the administrators are seeking more time to convene the second meeting of creditors which they are obliged to call so that, once more is known of the proposals of the secured creditors to deal with the secured assets, the administrators will be in a position to make recommendations or suggestions to the second meeting of creditors about a potential scheme of arrangement or, failing that, about liquidation of some or all of the companies in the group.

8 Under s 439A(4) of the Act, before convening a second meeting of creditors, the administrators must prepare and produce a report to the companies' creditors detailing the companies' businesses, property, affairs and financial circumstances. They must also provide a statement setting out their opinion as to whether it would be in the interests of the companies' creditors to execute a deed of company arrangement; for the administration to end; or for the companies to be wound up. Mr Jones, one of the administrators, has deposed, and I do not doubt it, that the administrators are not currently in a position to prepare such a report or to form any such opinion without knowing more about the intentions and progress of the receivers and managers in disposing of the secured assets.

9 Following the appointment of the administrators, the first meeting of the creditors of the companies in the group, as required by s 436E of the Act, had to be held on or before 27 August 2007. Each of those meetings was held concurrently on 27 August 2007. According to the timetable specified by s 439A, the second meeting would ordinarily need to have been convened by 10 September 2007 and to have been held on or before 17 September 2007. As this application was only made on 6 September 2007 and heard on 7 September 2007, that is a Friday, the last working day before 10 September 2007, which was the last day for convening a second meeting of creditors, the urgency was extreme.

10 In support of the application for the extension of time Mr Jones deposes that, at the first meeting of creditors held on 27 August 2007, he informed the creditors attending that he intended to apply for an extension of the convening period and that no objection to this course was voiced at that meeting. He further deposes that a committee of creditors of the companies was formed at that first meeting and a meeting of the committee was convened immediately afterwards; that he advised the committee of creditors that the administrators intended to seek the leave of the court to extend the convening period for three months, that is until December 2007, and that the committee of creditors agreed to this course; and, that the receivers and managers have also consented to an extension of the convening period.

11 Briefly stated, the particular orders sought by the applicants at the hearing were as follows:

1. The time for hearing of the application [be] abridged.
2. (1) Pursuant to section 439A(6) of the Corporations Act 2001 the final day of the convening period for the [second] meeting of the creditors of [each of the companies in the group] under section 439A [be] extended from 10 September 2007 to 10 December 2007; and

(2) The plaintiffs have leave to apply (in these proceedings) for a further extension of the convening period [as so extended].

1. ... notwithstanding section 439A(2) of the Act, the [second] meeting of the creditors of [each of the companies in the group] may be held at any time before the end of the convening period [as so extended], provided that the [plaintiffs] ... give notice of the meeting in accordance with section 439A(3) of the Act at least 5 business days before the [proposed] meeting.
2. ... all remuneration claimed by the plaintiffs in respect of work performed by the [a]dministrators of each of the [c]ompanies can be recorded as having been incurred in relation to the work performed for [the parent] Evans & Tate Ltd ... without requiring the plaintiffs to allocate their remuneration to or between the [various companies in the group] or record separately the work performed by them [for each of the companies].
3. Pursuant to section 447A of the Act, section 443D [shall] operate in relation to each of [these companies] as if it reads:

'That the plaintiffs, as administrators [of the companies], are entitled to be indemnified out of the property of each of the [c]ompanies for:

(a) any debts incurred for or in respect of any of the [c]ompanies for which the plaintiffs are liable under sub-division A or a remittance provision as defined in sub-section 443BA(3); and

(b) the remuneration as fixed under section 449E.'

1. Pursuant to section 447A of the Act, section 443F of the Act [shall] operate in relation to each of the [c]ompanies as if it reads:

(a) 'To secure the right to indemnity referred to in order 5 above the plaintiffs have a lien on the property of each of the [c]ompanies;

(b) the lien referred to in order [6(a)] above has priority over a charge only [insofar] as the right of indemnity under section 443D has priority over debts secured by the charge'.

1. The plaintiffs give notice of these orders to the [c]ompanies' creditors by means of a circular to be posted to the [c]ompanies' creditors by ordinary post no later than 7 days after the date of these orders.
2. Any creditor of the [c]ompanies, or other interested person, [shall] have liberty to apply to vary these orders upon 48 hours notice to the plaintiffs.
3. The plaintiffs' costs of the application are costs in the administration of each of the [c]ompanies.

12 Because the orders sought under pars 2, 5 and 6 of the application would, if granted, allow the administrators to render charges for their services to the companies for a longer period than contemplated by the scheme of the Act, potentially resulting in a greater overall liability for fees - and that liability would be secured over all the assets of the companies by lien - it follows that making these orders would have the potential to subject other creditors to a significantly greater secured liability for administrator's fees than might result if the one month period contemplated by the Act were retained. Because of this potential prejudice to other creditors, and for that matter to the members of the companies, I considered that such orders to fix remunerations and provide security should not be made on an ex parte basis. Notice of such an application should be given to the committee of creditors, and to all creditors and other interested parties, so as to allow an opportunity for those persons, if so inclined, to apply to be heard in respect of, or in opposition to, those parts of the present application. It was for this reason that I adjourned the hearing of the applications under pars 5 and 6 of the application.

Pooling orders during administration period

13 By par 4 of the application the administrators sought an order under s 447A of the Act permitting them to have access to the 'pooled assets' of all the companies in order to facilitate a lien as security for the payment of their remuneration and expenses incurred in the course of the administration. The amplitude of the power to make such orders as the court may consider appropriate under s 447A is supported by Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270. Examples of orders made under this provision can be found in Ford's Principles of Corporation Law, vol 2 (57-10-07) [26.410]. Although this present application is not one for general pooling, the idea of general pooling of assets was endorsed in Re ACN 004 987 866 Pty Ltd (formerly Hilton's Stores Pty Ltd) [2003] FCA 849; (2003) 21 ACLC 1474 [23]. The administrators cite this decision of Goldberg J, for the proposition that pooling or consolidation of assets for the purpose of giving value to the administrator's lien may be facilitated by such an order.

14 It was submitted that orders similar to the one sought in respect of the pooling of assets have been made by this court in respect of the Sons of Gwalia matter [CIV 346 of 2004] and the Australian Waterwise matter [COR 83 of 2007]. While I can appreciate that it may be unduly burdensome and unproductive to attempt to allocate the administrator's work, effort and fees between all the various companies in the group, and that even to attempt to do so may be artificial, the orders sought will inevitably give personal advantage to the administrators and may serve to enhance the order for security which they desire in respect of their fees. For this reason, I also declined to entertain that application on an ex parte basis and directed that it should be adjourned with liberty to relist after notice has been given to the creditors, the creditors' committee and other interested persons.

15 Section 435A of the Act prescribes that the object of pt 5.3A (Administration of a Company's Affairs with a View to Executing a Deed of Company Arrangement) is:

to provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b) if it is not possible for the company or its business to continue in existence - results in a better return for the company's creditors and members than would result from an immediate winding up of the company.

To this end, an administrator appointed must convene a meeting of the company's creditors within the convening period: s 439A. Unless the administration occurs in December or in the month before Good Friday the convening period is 21 days: s 439A(5). The meeting must then be held within five business days after the end of the convening period: s 439A(2).

16 It is at this second meeting where the creditors decide upon the company's future. They may vote that the company execute a deed of company arrangement; that the administration should end; or, that the company be wound up: s 439C. Plainly, the periods for convening and holding such a second meeting of creditors as established by the legislation are short. They are, however, subject to extension by the court under the powers provided by s 439A(6). The reasons for this are not hard to find. As observed by the learned authors of Ford's Principles of Corporations Law (12th ed, 2005):

The purpose of administration being to give the company a breathing space in which its future can be determined by the creditors in the light of information gathered by the administrator, it follows that, in general, until the creditors decide between executing a DCA (deed of company arrangement) and a winding up, the rights of persons who at the time of the administrator's appointment have claims against the company should be suspended. Furthermore, owners of property leased by the company should be restrained from claiming their property in case it is possibly needed as part of administration under a DCA [27.040].

17 It follows, therefore, that the suspension of the rights of the creditors, and for that matter of lessors, or of any party seeking to begin or to proceed with an action or proceeding in a court against the company under administration (s 440D of the Act), should be for no longer than is reasonably necessary for an informed decision to be made about whether or not to approve a deed of company arrangement, or, otherwise, to end the administration or to proceed to a winding up. There may well be cases, such as the present, where the usual period of 28 days contemplated by the Act is insufficient for these purposes. However, it should not, in my view, be open-ended. Even if a position is reached where the administrators cannot make any detailed recommendation to the creditors because of delays or difficulties in obtaining information, or because their initiative must necessarily be deferred to the initiatives of any secured creditors, that is not a reason for allowing the suspension of third party rights to continue indefinitely or beyond a reasonable limit. There must come a time when, even faced with uncertainty, the creditors will need to decide whether or not to end the administration or to put the company into liquidation. It will be their right to decide. It may well be the case that certain creditors are disproportionately affected by the suspension of rights which the continuation of the administration would entail.

18 Without the advantage of submissions on this issue, it is not possible to make or even to suggest any detailed list of potential creditors within this capacity. However, creditors' claims which are likely to be diluted by the expenses involved in a continuing administration obviously come to mind, as do suppliers to a company within the group who may be prepared to extend credit if given the opportunity of renewing supply to a company under a scheme of arrangement with secured or enhanced prospects of payment, as also do the lessors of land used by companies within the group who may wish to decide whether or not to seek leave to retake possession of the property under s 440C - cf Re Java 452 Pty Ltd (admin appt) [1999] VSC 252; (1999) 32 ACSR 507.

19 Indeed, the explanatory memorandum to the bill which inserted pt 5.3A into the Corporations Act said of the power to extend time conferred under s 439A, that:

The court will be given a power to extend these periods ... though it is not expected that this power will be exercised frequently, since it is an important objective of the new provisions for creditors to be fully informed about the company's position as early as possible and have an opportunity to vote on its future as soon as possible.

20 Accordingly, the starting point for any application for an extension of these time limits must be that, generally, the court will expect that administrators adhere to the specified time limits: Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611; Re ATG Developments Pty Ltd (1994) 13 ACSR 261; Re Levi (1996) 19 ACSR 521; Re Madden (1996) 131 FLR 430; Re Allbuild Construction Co Pty Ltd (admin appt) [2000] WASC 227; Re Port Kennedy Resorts Pty Ltd (admin appt) [2000] WASC 302; (2001) 19 ACLC 328; Re Geraldton Building Co Pty Ltd (admin appt) [2000] WASC 320.

21 Nevertheless, the need to extend time in a particular case is recognised by the power of the court to do so and the exercise of that power should be approached with the objects of pt 5.3A of the Act in view. There do not need to be special grounds for the extension being sought and the matter is one for decision on the evidence in the particular case. One factor for consideration is whether or not an extension of time is necessary to enable the administrator to provide the report and recommendations required under s 439(4) of the Act: Re Pan Pharmaceuticals Ltd (admin appt) [2003] FCA 598; (2003) 46 ACSR 77; Re TPE Kintech Pty Ltd [2004] NSWSC 250; (2004) 49 ACSR 106; Re New Horizons Corporation [2004] NSWSC 253. The wishes of creditors will be a relevant, although not a determinative, consideration: Re Geraldton Building Co Pty Ltd (admin appt); Re Austin Australia Pty Ltd (in admin) [2004] NSWSC 9.

22 The amplitude of the power available to the court under s 447A of the Act indicates that the court has a wide discretion to make whatever order is appropriate in the particular instance to ensure that the objectives of pt 5.3A operate - see, in particular, Re Levi. The power also extends to alter the operation even of mandatory sections of pt 5.3A: Re LOCM Pty Ltd (admin appt) (1997) 79 FCR 35. Further, an order may be made allowing the second creditors' meeting to be convened during the extended convening period: Re Golden Refining Corporation Ltd (admin appt) [2001] WASC 248.

23 In the present case the applicants submit that the following factors support the grant of an extension of the convening period:

(a) The size and complex nature of the operations of the companies in the group.

(b) The fact that the receivers and managers appointed under the securities held by the major creditor remain in control of the assets and operations of the group companies and are said to be exploring the potential to sell certain operations of the group as a going concern, but do not expect to be able to produce any concrete proposals until early December 2007.

(c) The absence of any apparent prejudice to any creditor or company member.

(d) The passive acceptance by creditors attending the first meeting of creditors of the administrators' foreshadowed intention to apply for an extension of time and the endorsement of the committee of creditors given to that proposal.

(e) The consent of the receivers and managers to the extension sought.

(f) The need for the administrators to consider how any sale of the assets in the companies, effected by the receivers and managers, might affect the interests of all creditors, and to examine how some restructuring or scheme of arrangement of the companies following such sales might be devised.

(g) The contention that until the secured creditor effects the sales under its security, it will not be feasible for the administrators to prepare a meaningful report to the creditors with recommendations as contemplated by s 439A(4) of the Act.

(h) The undesirability of the termination of the administration at this stage for want of the due convening of a second creditors' meeting.

24 One can readily appreciate the desire of these administrators to obtain an extension of the convening period for the second creditors' meeting. One can also understand why they would benefit from knowing what proposals are intended, or are about to be implemented, by the receivers and managers in relation to the sale of any of the companies' assets to satisfy the secured creditor. In a very real sense, only once that is known will it be possible to formulate, in any meaningful detail, a scheme of arrangement which might be attractive to the creditors and members and which could ensure the continuation of at least some of the widespread operations of the companies in the group.

25 However, that expectation plainly relies upon a latent assumption; namely, that the receivers and managers can be expected to realise sufficient of the assets charged in favour of the secured creditor to meet its needs and that that will leave a residue sufficient to enable some form of attractive scheme of arrangement to be proposed for the remaining creditors and for the members. It may be the case that the secured creditor might be prepared to participate in the scheme of arrangement or to extend some financial accommodation to the group after satisfying sufficient of its debts, so as to encourage continued participation in group operations. All that lies in the future. In a metaphorical sense, this application by the administrators assumes that there is some light at the end of the tunnel and that, if time is extended to allow a series of sales or realisations to be proposed and effected by the secured creditor and then for the administrators to formulate a scheme of arrangement in relation to the residue of the available assets, some meaningful proposal can be designed and put to the creditors. Such an approach is, no doubt, admirable. However, there is no tangible evidence of the financial position of the companies or the extent of the indebtedness to the principal creditor put before the court to allow the conclusion to be drawn that there is, indeed, light at the end of the tunnel.

26 The papers filed in support of this present application do not include any actual or draft statement of affairs of the group of companies. They include no accounts or balance sheets at all, let alone recent accounts or balance sheets, which would show the financial position of the parent company or a consolidated position of the group accounts. Nor is there any evidence as to the extent of the indebtedness to the principal secured creditor. There is no statement of cash flows or other financial information about the performance of the group since the appointment of the administrators. It is, therefore, not known whether the overall financial position of the group is deteriorating or improving, or whether it is dependent upon continuing support by the principal creditor, as was suggested by counsel for the applicants in the course of submissions. If the overall financial position of the company is deteriorating, and likely to deteriorate to a significant degree over the next three months, that would clearly be an important factor which might incline the court to refuse the full extension of time sought.

27 The picture emerging from the affidavit material presently before the court is that the initiative, in relation to all matters concerning the control and administration of the companies, remains with the receivers and managers. The present administrators are simply not in a position to report upon whether or not a scheme of arrangement might be devised and, if so, whether or not it might be attractive to creditors, members or others. As far as I can tell from the materials before the court, the proposed sale or realisation of the assets of the group remains in the hands of the receivers. It follows from this that the terms of the sale process, including its extent and timing, once they materialise, will probably have been designed and will have been largely determined by decisions of the secured creditor.

28 It seems to follow that the capacity of the administrators to shape the sale process, or to take advantage of any opportunities which may be implicit in it for the unsecured creditors, will be limited. Without any evidence to support it, it was submitted to me by counsel, that the current aggregate of liabilities of the group is approximately $185 million, of which approximately $100 million is owed to the principal secured creditor, ANZ. Counsel for the administrators was unable to produce or to suggest any figure for the current value of the assets of the company or to say whether they were worth more or less than the secured liabilities. If they were to be worth less than the secured liabilities, then the prospects for an attractive scheme of arrangement for the benefit of the unsecured creditors and members of the company would appear to be dismal. The trouble is that there is no quantitative evidence available upon which to verify the assumption that, after the secured creditor has been satisfied, there will be sufficient remaining to encourage the proposal of a scheme of arrangement.

29 Accordingly, while having regard to the facts presently disclosed, I am prepared to extend the time for convening the second meeting of creditors by 30 days, and to allow liberty to apply for a further extension should it be thought necessary, I am not satisfied that there should be a longer extension at this point. The reason why I am limiting this period of extension to 30 days, rather than to the three months sought, is that I am not satisfied on the materials put before me that there are sufficient prospects of an improved outcome for unsecured creditors, members or other persons affected by the companies' affairs, to justify an extension of three months. The reason for my lack of satisfaction in that regard is not prompted by any concern about the actions which the administrators have taken so far, or which are described in the affidavit which is before me, but rather by the fact that the administrators, as they have disclosed in their affidavit, are, to a very great extent, unable to formulate any proposals for the resolution of the business of the companies in the group - their continued trading or any proposed scheme of arrangement - unless and until decisions are made by the receivers appointed by the secured creditor about how, if at all, the secured creditor is going to realise its security.

30 Only if and when the secured creditor or the receivers determine what is to be done with the assets which are the subject of that security will there be any real scope for the administrators to formulate a deed of company arrangement or, indeed, to make any recommendations as to the utility of entering into such a deed. I am also very conscious that, on the materials before me, there does not appear to be sufficient information about the current financial affairs of the company to ascertain with any degree of confidence whether or not the prospects of a superior outcome for unsecured creditors, members or others with interests in the company or interests relating to company property, would be improved by such a scheme. There is presently no information about the actual or estimated realisable value of the assets of the companies, whether in break up form or as a going concern - either as a whole or in portions.

31 Unless there is some reasonable basis to expect the realisable value of the companies, either as a going concern, in segments or as a result of the terms of some scheme of arrangement to be proposed, should exceed the value of the secured liabilities, there is really no prospect of this administration securing any benefit which would not fully be absorbed by the secured creditor. This is not to say that such a consequence is inevitable. One hopes that by a co-ordinated and rationalised process of sale or reconstruction, an improved outcome can be secured. But at the moment that is nothing more than a hope on the materials before me. In these circumstances, I am prepared to extend the time for convening the second meeting of creditors by 30 days, that is from 10 September 2007 until 10 October 2007, so that within that time the administrators will have the opportunity of putting to the creditors and members, or putting before the court if any further extension is sought, more in the nature of financial information than is presently available. For these reasons, therefore, the only orders which I was prepared to make at this hearing, and on an ex parte basis, were as follows:

1. The time for the hearing of this application be abridged.
2. The time prescribed by s 439A of the Corporations Act for the final day of the convening period for the second meeting of creditors of Evans & Tate Ltd, and the other companies within the group nominated as defendants to this application, be extended for 30 days from 10 September 2007; and that the plaintiffs have leave to apply, in these proceedings, for a further extension of the convening period so extended.
3. Notwithstanding s 439A(2) of the Act, the second meeting of creditors of the companies in the group may be held at any time before the end of the convening period as so extended, provided the plaintiffs give notice of that meeting of creditors in accordance with s 439A(3) of the Act at least five business days before the meeting.
4. The application for the orders sought in pars 4, 5 and 6 of the application be adjourned with liberty to apply to relist upon seven days notice to the committee of creditors and by notice, published in a newspaper or newspapers circulating in Australia, to all creditors and members of the company and to any persons who may be affected by such orders.
5. The plaintiffs give notice of these orders to the companies' creditors, by means of a circular to be posted to the companies' creditors by ordinary post, no later than seven days after the date of these orders.
6. Any creditor of the companies, or other interested person, has liberty to apply to vary these orders upon 48 hours notice to the plaintiffs.
7. The plaintiffs' costs of the application be costs in the administration of each of the companies.