Crowe-Maxwell, in the matter of Minc Financial Services Holdings Pty Limited (Administrators Appointed)
[2011] FCA 637
•30 May 2011
FEDERAL COURT OF AUSTRALIA
Crowe-Maxwell, in the matter of Minc Financial Services Holdings Pty Limited (Administrators Appointed) [2011] FCA 637
Citation: Crowe-Maxwell, in the matter of Minc Financial Services Holdings Pty Limited (Administrators Appointed) [2011] FCA 637 Parties: ATLE CROWE-MAXWELL AND KEN WHITTINGHAM IN THEIR CAPACITY AS ADMINISTRATORS OF MINC FINANCIAL SERVICES HOLDINGS PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 126 999 308 File number(s): NSD 775 of 2011 Judge: JAGOT J Date of judgment: 30 May 2011 Catchwords: CORPORATIONS – application for declarations pursuant to s 1322(4)(a) of Corporations Act – where notice of second meeting of creditors omitted name of companies – where proxy forms circulated to creditors omitted certain resolutions Legislation: Corporations Act 2001 (Cth) ss 439A, 447A, 1322
Corporations Regulations 2001 (Cth)Date of hearing: 30 May 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 11 Solicitor for the Plaintiff: Mr M Kelly of Blake Dawson
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 775 of 2011
BETWEEN: ATLE CROWE-MAXWELL AND KEN WHITTINGHAM IN THEIR CAPACITY AS ADMINISTRATORS OF MINC FINANCIAL SERVICES HOLDINGS PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 126 999 308
PlaintiffJUDGE:
JAGOT J
DATE OF ORDER:
30 MAY 2011
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.In respect of Minc Financial Services Pty Limited (MFS) and Australian Stockbroking and Advisory Services Pty Limited (ASANDAS), pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth) (the Act), the Proxy Forms accompanying the notices of the meetings of those Companies given to creditors on 24 May 2011 pursuant to s 439A(3)(a) and the Proxy Forms circulated to creditors on 27 May 2011 are not invalid by reason of any contravention of regs 5.6.29(1)(a) or 5.6.31 of the Corporations Regulations 2001 (Cth) (the Regulations).
2.With respect to MFS, ASANDAS and Minc Financial Services Holdings Pty Limited (each a Company and together the Companies):
(a)pursuant to s 1322(4)(a) of the Act, the meeting of creditors of the Company convened under s 439A(3) to be held on 1 June 2011 is not invalid by reason of any contravention of s 439A(3)(b) of the Act, which requires notice of the meeting to be published at least five days before the meeting; and
(b)pursuant to s 447A(1) of the Act, Pt 5.3A of the Act is to operate in relation to the Company as though s 439A(3)(b) required that the meeting of the Company’s creditors be convened by causing notice of the meeting to be published in a national newspaper or, in each State or Territory in which the Company has its registered office or carries on business, in a daily newspaper that circulates generally in that State or Territory, at least 4 business days before the meeting.
3.The plaintiffs’ costs and expenses of this application be costs and expenses of the administration of the Companies.
4.These orders may be entered forthwith.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 775 of 2011
BETWEEN: ATLE CROWE-MAXWELL AND KEN WHITTINGHAM IN THEIR CAPACITY AS ADMINISTRATORS OF MINC FINANCIAL SERVICES HOLDINGS PTY LIMITED (ADMINISTRATORS APPOINTED) ACN 126 999 308
PlaintiffJUDGE:
JAGOT J
DATE:
30 MAY 2011
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is an application by the plaintiffs in their capacity as the joint and several administrators of Minc Financial Services Holdings Pty Limited (Administrators Appointed) (MFSH), Minc Financial Services Pty Limited (Administrators Appointed) (MFS) and Australian Stockbroking and Advisory Services Pty Limited (Administrators Appointed) (ASANDAS) (together the companies). Orders are sought pursuant to ss 1322(4) and 447A(1) of the Corporations Act 2001 (Cth) (the Act).
In short, the relevant circumstances are set out in the affidavit of Atle Crowe-Maxwell, a Chartered Accountant, which was sworn on 30 May 2011 and was read in support of the application. Mr Crowe-Maxwell is a partner of the firm PKF Chartered Accountants (PKF) and a registered liquidator. On 15 April 2011, he and Ken Whittingham were appointed to act as the joint and several administrators of the companies.
The first meeting of creditors of the companies was held on 2 May 2011 at PKF’s offices. Pursuant to s 439A(5)(a) of the Act the convening period in respect of the administration of the companies was 25 business days, expiring on 25 May 2011. However, the notice of the second meeting of creditors – which was required by s 439A(3)(b)(ii) of the Act and was published on 24 May 2011 – accidentally omitted the names of the companies (the notice error).
The notice error was rectified by a further notice published on 26 May 2011, being four days before the proposed date of the second creditors’ meeting.
In addition to the notice error, the proxy forms sent to creditors in respect of two of the companies, MFS and ASANDAS, did not include proposed resolutions 8 and 9 (the proxy form error). These resolutions were (respectively) that a Committee of Inspection be appointed in the event the company is wound up, and that the destruction of the books and records at the conclusion of the winding-up be approved subject to ASIC approval.
The proxy form error was discovered on 27 May 2011, and on that day Mr Crowe-Maxwell caused PKF to send, by post, a circular to the creditors of MFS and ASANDAS attaching the corrected proxy forms. Mr Crowe-Maxwell also says that on 30 May 2011 – today’s date – staff at PKF began to make direct contact by telephone with those creditors who had given special proxies using the earlier proxy forms to advise them that those forms contained an error, and that a corrected form had been sent to them on 27 May 2011.
In these circumstances, orders are sought pursuant to s 1322(4)(a) of the Act declaring, relevantly, that the proxy forms are not invalid by reason of any contravention of the Corporations Regulations 2001 (Cth), and that the meeting of creditors to be held on 1 June 2011 is not invalid by reason of any contravention of the Act. An order is also sought pursuant to s 447A(1) of the Act in relation to the operation of Part 5.3A of the Act, as regards the meeting being convened four rather than five business days in advance of the scheduled meeting.
My attention has been drawn to the decision, made in not entirely dissimilar circumstances, of Mentha, in the matter of ACN 009 758 258 Pty Ltd (Administrators Appointed) [2009] FCA 603, in which orders were made to a similar effect by Emmett J having regard to the requirements of s 1322(6) of the Act. Section 1322(6) provides that an order must not be made under s 1322 unless, in the case of an order under subsection (4)(a), either the relevant act, matter, thing or proceeding is essentially of a procedural nature; the persons or persons concerned in or party to the contravention or failure acted honestly; or it is just and equitable that the order be made.
Both the notice error and the proxy form error can be characterised as essentially of a procedural nature. I am also satisfied, based on Mr Crowe-Maxwell’s evidence, that both errors occurred entirely by reason of inadvertence; the notice error in particular cannot be sheeted home to any omission of the administrators. As such, it is just and equitable that the orders sought be made.
In addition, s 1322(6)(c) provides that no order must be made under s 1322 unless (in every case) no substantial injustice has been or is likely to be caused to any person. There will be no injustice to any person by reason of the making of the orders sought in relation to the notice error and the proxy form error.
It follows that each of the alternative requirements in s 1322(6)(a) is satisfied on the facts of this case, and that the requirement for the absence of substantial injustice in s 1322(6)(c), which applies in every case, is also satisfied. Accordingly, I make orders in substantially the form sought.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate:
Dated: 6 June 2011
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