IMO G R Finance Ltd

[2011] VSC 528

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

CORPORATIONS LIST

S CI 2011 5554

IN THE MATTER OF G R FINANCE (Administrators Appointed) (ACN 932 549 305)

STEPHEN ROBERT DIXON AND LAURENCE ANDREW FITZGERALD in their capacity as joint Administrators of G R FINANCE LTD (Administrators Appointed) (ACN 092 549 304)

Plaintiffs

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JUDGE:	Gardiner AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	19 October 2011
DATE PUBLICATION OF REASONS:	21 October 2011
CASE MAY BE CITED AS:	IMO G R Finance Ltd
MEDIUM NEUTRAL CITATION:	[2011] VSC 528

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CORPORATIONS – External administration under Part 5.3A of the Corporations Act 2001 (Cth) - Previous administrators resigned within day of their appointment and new administrators appointed, requiring meeting of creditors under s 449C(4) of the Act to be convened in close proximity to the first meeting of creditors required to be held under s 436E – Orders made pursuant to s 447A that Part 5.3A of the Act is to operate in regard to the administration such that the meetings could be held concurrently and that notice and advertising of the meeting required under s 449C(4) by s 449C(5) be dispensed with.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C. Brodrick Holding Redlich

HIS HONOUR:

1. By an originating process filed 18 October 2011 the plaintiffs, Stephen Dixon and Laurence Fitzgerald, who are the joint administrators of G R Finance Limited (administrators appointed) (“the company”) make application under s 447A(1) of the Corporations Act2001 (Cth) (“the Act”) for orders that the first meeting of creditors required to be held pursuant to s 436E(1) of the Act and a meeting of creditors which is required to be held under s 449C(4) by reason of their appointment following the resignation of the previous administrators, be held concurrently. In addition, Messrs Dixon and Fitzgerald seek an order under s 447A that the requirements for notice under s 449C(5)(a) and for advertising under s 449C(5)(b) of the Act be dispensed with.

1. I indicated at the hearing of this application on 19 October 2011 that I would make the orders which were sought and what follows are my reasons for doing so. 

1. On 12 October 2011, the directors of the company appointed Petr Vrsseky, Stirling Lindley Horne and Glenn Jeffrey Franklin of the firm Lawler Draper Dillon as administrators of the company pursuant to s 436A of the Act. It became apparent that those administrators were confronted with a conflict of interest and had to resign their appointments, which they did on 13 October 2011.

1. On the afternoon of 13 October 2011, the directors of the company noted the resignations of Messrs Horne, Vrsseky and Franklin and appointed Messrs Dixon and Fitzgerald as administrators. 

1. In the circumstances of the resignations of Messrs Vrsseky, Horne and Franklin, s 449C(4) of the Act requires Messrs Dixon and Fitzgerald to convene a meeting of the company’s creditors within five business days after being appointed as administrators so that the creditors may determine whether to remove them from office and, if so, appoint someone else as administrator of the company.

1. Section 449C(5) requires that such a meeting be convened by (a) giving written notice of the meeting to as many of the company’s creditors as reasonably practicable and (b) advertising notice of the meeting at least two clear business days before the meeting. 

1. The obligations imposed by s 449C(4) and (5) overlap with the obligations of Messrs Dixon and Fitzgerald to convene a first meeting of creditors under s 436E.

1. The purpose of this application is to obviate the need to call two separate meetings with all the attendant expense and inconvenience. The convening of two separate meetings serves no good purpose in my view and the time limits imposed by the Act would not permit it in any event. The statutory agendae stipulated for each meeting can practicably be dealt with at the same time.

1. The first meeting of creditors under s 436E is required to be held within eight business days after the administration begins and the s 449C meeting is required to be convened within five business days after the new administrator’s appointment.  It is not practicable to require the giving of written notice of the meeting required under s 449C and advertising of it two business days before that meeting. 

1. I note that in McGrath v Henry Walker Elton Group Limited,[1] Hamilton J of the Supreme Court of New South Wales made orders in very similar terms to that which I propose to make. 

   [1][2005] NSWSC 32.

1. For completeness, I set out the orders which I made on 19 October 2011:

1.Pursuant to s 447A(1) of the Corporations Act2001 (“the Act”) Part 5.3A of the Act is to operate in relation to the administration of G R Finance Limited (Administrator Appointed) (ACN 093 549 305) so that the first meeting of creditors required to be convened by s 436E(1) of the Act be held concurrently with the meeting required to be convened pursuant to s 449E(4) of the Act.

2.Pursuant to s 447A of the Act, Part 5.3A of the Act is to operate in relation to the administration of the company so that the requirements for notice imposed under s 449C(5)(a) of the Act and publication under s 449C(5)(b) of the meeting required pursuant to s 449C(4) of the Act be dispensed with.

3.The costs of this application be costs and expenses in the administration of, and be paid out of the assets of, the company.

4.This order be signed by an Associate Judge pursuant to Rule 60.02(2) of the Supreme Court (General Civil Procedure) Rules 2005.

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