Debis Financial Services (Aust) Pty Ltd v Allied Bellambi Collieries Pty Ltd

[1999] NSWSC 936

CITATION:	Debis Financial Services (Aust) Pty Ltd v Allied Bellambi Collieries Pty Ltd [1999] NSWSC 936
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	3669/99
HEARING DATE(S):	13 September 1999
JUDGMENT DATE:	13 September 1999
PARTIES :	Debis Financial Services (Australia) Pty Limited (P) Allied Bellambi Collieries Pty Limited (Receivers Appointed) (Voluntary Administrator Appointed) (D1) Sandwork Pty Limited (Voluntary Administrator Appointed) (D2) Q Mining Systems Pty Limited (Voluntary Administrators Appointed) (D3) Gregory James Robertson in his capacity as Administrator of Allied Bellambi Collieries Pty Ltd & Sandwork Pty Limited (Voluntary Administrator Appointed) (D4)
JUDGMENT OF:	Hamilton J

COUNSEL :	Miss M Wilson (solicitor) (P) R S Angyal (D1, 2 & 4) No appearance (D3)
SOLICITORS:	Clayton Utz (P) Andersen Legal (D1, 2 & 4) No appearance (D3)
CATCHWORDS:	CORPORATIONS [182] - Voluntary administration - Protection of company property - Secured creditor - Application to take possession of property under s 440C - Meaning of "in the possession of" - Remaining duration of administration short - Relevant considerations.
ACTS CITED:	Corporations Law s 440C
CASES CITED:	Debis Financial Services (Aust) Pty Ltd v Allied Bellambi Collieries Pty Ltd [1999] NSWSC 935
DECISION:	Application for leave to take possession refused.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

MONDAY, 13 SEPTEMBER 1999

3669/99 DEBIS FINANCIAL SERVICES (AUSTRALIA) PTY LIMITED v ALLIED BELLAMBI COLLIERIES PTY LIMITED (RECEIVERS APPOINTED) (VOLUNTARY ADMINISTRATOR APPOINTED) & ORS

JUDGMENT (Application for leave under section 440C)

His Honour:

1    In this matter orders are this morning sought on behalf of the plaintiff against the first and second defendants relating to the gaining of access to certain machines known as Un-a-Haulers ("the machines"), that are at present in the Bellambi West colliery. There is a controversy as to whether there are two or three of the machines in the colliery, but that is immaterial to the present judgment. I have already dealt in these proceedings with applications relating to a Joy continuous mining machine (“the Joy miner”) in the same colliery. In the case of the machines, they are the subject of a lease under which the lessee is the third defendant, Q Mining Systems Pty Limited (voluntary administrators appointed). The second defendant is the holder of the coal lease, which is the title under which the colliery is conducted. The first defendant is the owner and mortgagor of the Joy miner and was the operator of the colliery.

2    The background facts appear in the judgment which I have already delivered relating to the Joy miner: Debis Financial Services (Aust) Pty Ltd v Allied Bellambi Collieries Pty Ltd [1999] NSWSC 935. This being Monday morning, the administration of the first defendant and the second defendant will terminate at the latest at the midnight which separates Tuesday from Wednesday, so that there is a period of less than 48 hours during which it will continue. It will terminate either by the execution of a deed of company arrangement (“DCA”) under which a purchaser will take over the entire operation of the colliery, or by reason of the non-execution of the DCA within the prescribed time. If the DCA is executed, there will be executed with it a Business Purchase and Sale Agreement (“the agreement”) under which the entire colliery operation will pass to a purchaser which will become the new operator.

3 The plaintiff seeks leave to take possession of the machines under s 440C of the Corporations Law (“the Law”) which provides as follows:

“440C Owner or lessor cannot recover property used by company

During the administration of a company, the owner or lessor of property that is used or occupied by, or is in the possession of, the company cannot take possession of the property or otherwise recover it, except:

(a) with the administrator's written consent; or
(b) with the leave of the Court.”

The third defendant consents to the removal of the machines from the colliery. However, the fourth defendant, as administrator of the first defendant and the second defendant, objects to leave being granted during the subsistence of the administration.

4 As already stated, the first and second defendants are not the lessees of the machines, and on the evidence they have no contractual entitlement to them or their use. However, it is said that leave is necessary under s 440C because the machines are "in the possession of" one, other or both of those companies. Miss Williams, solicitor for the plaintiff, urges that a narrow view should be taken of the word "possession" in the section and that, without evidence of any contractual entitlement to the machines or their use, they cannot be said to be in the possession of the first defendant or the second defendant. That, however, is, in a sense, inconsistent with the plaintiff seeking leave to remove them and an order that those defendants give unfettered access to the equipment. It is implicit in the plaintiff seeking that order, and there is no doubt on the facts, that they are upon premises controlled by the first defendant and the second defendant, and that those defendants can deny access to them.

5    In these circumstances, although there has not been time for detailed argument on what may be a difficult question, I am not prepared to hold that the machines are not in the possession of the first defendant and/or the second defendant, and, on the evidence, I take the view that they are in their possession because of the physical control which they exercise over the premises on which the machines are located. As I have said, there is a period of less than 48 hours of this administration to go and there is no doubt that the administrator of the first defendant and the second defendant is heavily engaged in attempting, during that time, to bring the DCA, and its attendant agreement for the sale of the colliery operation, to fruition.

6 On the basis of the shortness of time during which the plaintiff will be inhibited by the administration from pursuing its rights and the importance of the administrator attending to the perfection of the DCA, I am not inclined to grant leave under s 440C at this time. The plaintiff can protect its rights by making it plain to all concerned, including the prospective purchaser of the colliery operation, that it will pursue its rights as soon as the administration is at an end.

7 I should add that Mr Angyal of counsel, on behalf of the first defendant and the second defendant, did offer an undertaking to the Court which would have facilitated the removal of the machines, but on terms. This was an undertaking to insert a clause relating to the machines in the sale agreement, being a clause not dissimilar from one which was offered and accepted in relation to the Joy miner, as appears from my previous judgment. That would have imposed some obligations upon the purchaser in relation to these machines if the sale agreement be perfected and upon terms which seem to me not unreasonable. The offer and refusal of this undertaking is also a factor in my decision to refuse leave under s 440C at this stage.

8    The proceedings will be stood over till 15 September 1999 before the Duty Judge to permit the plaintiff to pursue its rights promptly in light of the regimes in relation to the first defendant and the second defendant that will be known to prevail by that time.

9 The costs of the application for leave under section 440C in relation to the machines will be reserved.

…oOo…

Last Modified: 09/16/1999