E Commerce Pty Ltd, in the matter of E Commerce Pty Ltd

[2006] FCA 310

FEDERAL COURT OF AUSTRALIA

E Commerce Pty Ltd, in the matter of E Commerce Pty Ltd [2006] FCA 310

IN THE MATTER OF E COMMERCE PTY LTD

NSD128 OF 2006

EMMETT J
14 MARCH 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD128 OF 2006

IN THE MATTER OF:

E COMMERCE PTY LIMITED APPLICANT
JUDGE:	EMMETT J
DATE OF ORDER:	14 MARCH 2006
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to s 447A, Part 5.3A is to operate in relation to the Company as if s 439B(ii) referred to the period of 100 days and not 60 days.

2.Leave be granted to any creditor and to Australian Securities and Investments Commission to apply on three days’ notice in writing for such relief as such creditor or the Commission may be advised to seek.

THE COURT DIRECTS THAT:

3.        A copy of these orders be served on the Commission no later than 21 March 2006.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD128 OF 2006

IN THE MATTER OF:

E COMMERCE PTY LIMITED PLAINTIFF
JUDGE:	EMMETT J
DATE:	14 MARCH 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. On 7 November 2005, an administrator was appointed to the plaintiff, E Commerce Pty Limited (‘the Company’), pursuant to s 436A of the Corporations Act 2001 (Cth) (‘the Act’) of the Commonwealth. The administrator prepared reports for creditors and, by notices of meeting dated 25 November 2005, convened a meeting of creditors in accordance with the Act for Friday, 2 December 2005. The meeting was subsequently adjourned to 16 January 2006.

2. On 16 January 2006, the reconvened meeting considered and passed a resolution that the meeting be adjourned for a minimum of up to 15 days and subject to seeking orders under s 447A of the Act to extend the voluntary administration to a date no later than 7 March 2006. The Company then applied to the Court for an order under s 447A or s 1322(4)(d) of the Act, that the period of time for the adjournment of the meeting of creditors be extended to 7 March 2006 at 4 pm.

3. A meeting of the creditors was reconvened on 7 March 2006 at 11.43 am.  At that meeting, a representative of one of the creditors, the Commissioner of Taxation, indicated that further time was required for instructions as to whether a proposed deed of company arrangement would be supported.  The meeting was adjourned to 2 pm and reconvened at 2.03 pm.  Again, the Commissioner of Taxation indicated that a final decision had not been made.  The meeting was then adjourned to the following day.

4. On 8 March 2006, a resolution was passed pursuant to s 439C of the Act requiring the Company to execute a deed of company arrangement pursuant to Part 5.3A. That has now been done. The deed of company arrangement appears to have the support of all creditors, and it would be to the detriment of the creditors if it were not to be effective.

5. However, there has been a failure to comply with s 439B(2) of the Act. Section 439B(2) provides that:

   ‘A meeting convened under section 439A may be adjourned from time to time, but cannot be adjourned to a day that is more than 60 days after the first day on which the meeting was held.’

6. The evidence before me indicates that the adjournment for an extra day was the result of an oversight.  Although Graham J, on 24 January 2006, ordered that the meeting be further adjourned to no later than 4 pm on 7 March 2006, there is no further leeway.

7. Section 447A(1) of the Act provides that the Court may make such order as it thinks appropriate about how Part 5.3A is to operate in relation to a particular company. Further, s 1322(4)(a) provides that the Court may make an order declaring that any act, matter or thing purporting to have been done under the Act is not invalid by reason of any contravention of the provision of the Act. However, under s 1322(6) of the Act, the Court must not make such an order unless it is satisfied that the act, matter or thing is essentially of a procedural nature, that the person or persons concerned in or part of the contravention or failure acted honestly, or that it is just and equitable that the appropriate order be made. The matter in question is clearly essentially of a procedural nature, but in any event it is just and equitable that an appropriate order be made.

8. In the circumstances, I am prepared to make orders pursuant to s 447A.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate:

Dated:             28 March 2006

Solicitors for the Plaintiff:	HAL Lawyers
Date of Hearing:	14 March 2006
Date of Judgment:	14 March 2006