Intercapital Cleaners (Aust) Pty Limited, in the matter of Intercapital Cleaners (Aust) Pty Limited (No 2)
[2010] FCA 434
FEDERAL COURT OF AUSTRALIA
Intercapital Cleaners (Aust) Pty Limited, in the matter of Intercapital Cleaners (Aust) Pty Limited (No 2) [2010] FCA 434
Citation: Intercapital Cleaners (Aust) Pty Limited, in the matter of Intercapital Cleaners (Aust) Pty Limited (No 2)
[2010] FCA 434Parties: IN THE MATTER OF INTERCAPITAL CLEANERS (AUST) PTY LTD (Administrators Appointed);
CHRISTOPHER MEL CHAMBERLAINFile number: NSD 389 of 2010 Judge: EMMETT J Date of judgment: 30 April 2010 Date of hearing: 30 April 2010 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: Eleven Counsel for the Plaintiff: M Dawson Solicitor for the Plaintiff: Shaw, Reynolds, Bowen & Gerathy
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 389 of 2010
IN THE MATTER OF INTERCAPITAL CLEANERS (AUST) PTY LTD
CHRISTOPHER MEL CHAMBERLAIN, IN HIS CAPACITY AS ADMINISTRATOR OF INTERCAPITAL CLEANERS (AUST) PTY LTD (ADMINISTRATOR APPOINTED)
PlaintiffJUDGE:
EMMETT J
DATE OF ORDER:
30 APRIL 2010
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The plaintiff has leave to file an amended originating process claiming additional orders as set out in the form of interlocutory process initialed and dated with today’s date by Emmett J.
2.Pursuant to s 447A of the Corporations Act 2001 (the Act), Part 5.3A of the Act is to operate, and has at all relevant times operated, in relation to the Company as though the meeting of creditors of Intercapital Cleaners (Aust) Pty Limited (Administrator appointed) (the Company) held on 16 April 2010 (the Meeting) was not invalid by reason of any defect in the giving of notice in respect of it.
3.Pursuant to s 447D of the Act a direction that the plaintiff was justified in proceeding with, and acting in accordance with any resolution at, the Meeting.
4.The plaintiff’s costs and expenses of this application be costs and expenses of the administration of the Company.
5.These orders 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 389 of 2010
IN THE MATTER OF INTERCAPITAL CLEANERS (AUST) PTY LTD
CHRISTOPHER MEL CHAMBERLAIN (IN HIS CAPACITY AS ADMINISTRATOR OF INTERCAPITAL CLEANERS (AUST) PTY LTD (ADMINISTRATOR APPOINTED)
PlaintiffJUDGE:
EMMETT J
DATE:
30 APRIL 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
On 14 April 2010 I made orders under s 447A(1) of the Corporations Act 2001 (Cth) (the Act) that Part 5.3A of the Act is to operate as though:
·the number 90 was substituted for the number 45 in s 439B(2) of the Act; and
·the number 90 was substituted for the number 45 in Regulation 5.6.18(2) of the Corporations Regulation 2001 (Cth).
I also made ancillary orders on that day and gave reasons for making those orders which set out the background of the present application.
The plaintiff was appointed administrator of Intercapital Cleaners (Aust) Pty Limited (the Company) on 6 January 2010. The first meeting of the creditors of the company was held on 15 January 2010, at which time Mr Chamberlain’s appointment as administrator was ratified and a committee of creditors was formed. The second meeting of the creditors of the company was held on 10 February 2010, as required by the Act. At that meeting the creditors present voted in favour of a resolution that the meeting be adjourned for a period up to, but not exceeding, 45 business days. 45 business days is the maximum period allowed by s 439B(2) of the Act. The effect of the orders made on 14 April was to extend that period by a further 45 days. An adjournment of the meeting of 10 February 2010 for 45 days would have required that the adjourned meeting be resumed no later than 16 April 2010.
Mr Chamberlain’s usual practice when inviting creditors of a company to adjourn the second meeting under s 439B is to invite them to nominate a date for the adjourned meeting, with the intention that the minutes of the meeting would provide notice to creditors of the adjourned date. In that case, there would be no need to send a separate notice informing creditors of the date of the adjourned meeting.
Following the orders made on 14 April 2010, Mr Chamberlain took steps to reconvene the adjourned meeting for 16 April 2010, in order to invite the creditors to adjourn the meeting for a further 45 days. The notice reconvening the adjourned meeting for 16 April 2010 was sent to creditors on 14 April 2010. Notice was given to all creditors, both secured and unsecured creditors, that the adjourned meeting would be reconvened at 4 pm on 16 April 2010 at Mr Chamberlain’s office. Mr Chamberlain is concerned, however, that the notice reconvening the meeting may be regarded as inadequate. Under s 439A(3) of the Act, five days’ notice is required for the second meeting of creditors.
Five days’ notice was given for the meeting held on 10 February 2010. However, the only notice given of the reconvening of the second meeting on 16 April 2010 was the notice given on 14 April 2010. If five days’ notice was required of the reconvening of the meeting, that notice was not given. It may, of course, be arguable that the resolution passed at the meeting of 10 February 2010 was sufficient indication to the creditors that the adjourned meeting would need to be reconvened no later than 16 April 2010. However, for more abundant caution, Mr Chamberlain now seeks an order, under s 447A of the Act, that Part 5.3A of the Act is to operate in relation to the Company as though the meeting was not invalid by reason of any defect in the giving of notice in respect of it.
The notice reconvening the meeting for 16 April 2010 gave notice of three resolutions as follows:
(1)That in circumstances where the orders of the Federal Court were made on 14 April 2010 allowing further time within which to hold the adjourned meeting of creditors and the time to convene the adjourned meeting expires on 16 April 2010, it is agreed that this meeting may be held on 16 April 2010 at 4 pm even though it has not been convened in accordance with the regulations.
(2)That in circumstances where the orders of the Federal Court were made on 14 April 2010 allowing further time within which to hold the adjourned meeting of creditors and the time to convene the adjourned meeting otherwise expires on 16 April 2010, it is agreed that there be one days notice of this meeting.
(3)The meeting be further adjourned to 45 business days from 16 April 2010.
On 15 April 2010 Mr Chamberlain received proxies in favour of those three resolutions from nine creditors.
When the meeting was opened at 4 pm on 16 April 2010, Ms Fran Graham, holding a proxy for Mr Graeme Ware, and Mr Brett Dodson, holding proxies for five creditors were present. Mr Chamberlain was also present, holding proxies for four other creditors. Mr Chamberlain informed those present at the meeting of the nature of the meeting, and invited them to ask questions. No questions were posed. Each of the three resolutions described above was then proposed and carried unanimously. The meeting was closed at 4.20 pm.
At the meeting, there were 8 out of a total of 57 unsecured creditors represented by proxy. That represents 14% of the unsecured creditors. However, Mr Chamberlain does not consider that number to be low in circumstances where 39 of the unsecured creditors, representing 68% of the total, are owed less than $1000. That was the same percentage of creditors in number who attended the meeting on 10 February 2010. In Mr Chamberlain’s experience, it is unusual for many creditors owed less than $1000 to attend a meeting of creditors. The percentage of debt represented by the 8 unsecured creditors attending the meeting was 29%, excluding the debt owed to B&P Smart, the directors of the Company, of $197,087.00. Mr Chamberlain valued that debt as $1 for the purpose of voting on the resolutions. The percentage of debt represented by the creditors who attended the meeting, excluding B&P Smart on 10 February 2010, was 28%.
I am satisfied that all unsecured creditors received notice of the meeting. The largest creditor, Westpac Banking Corporation, which is secured, attended the meeting and voted in favour of the resolutions. The proportion, in terms of value and number of unsecured creditors who attended and voted in favour, is consistent with those who attended the meeting on 10 February 2010. As at the time when Mr Chamberlain swore his affidavit in support of this present application, no complaint has been received from any creditor concerning the shortness of the notice of the reconvening of the adjourned meeting.
If the meeting were invalid, that could have the consequence that Mr Chamberlain ceased to be administrator. As indicated in my reasons of 14 April 2010, Mr Chamberlain is engaged in negotiation for the sale of the business of the Company as a going concern. Those negotiations may be prejudiced if the administration had come to an end.
Mr Chamberlain considers that it was in the best interests of the creditors for the meeting to be held on 16 April 2010, as a valid adjourned meeting of the second meeting of creditors. In all of the circumstances, it is appropriate to make an order under s 447A in relation to the reconvening of the second meeting of creditors on 16 April 2010, and an order under s 447D of the Act directing that Mr Chamberlain was justified in proceeding with, and acting in accordance with, the resolutions passed at that meeting. Mr Chamberlain’s costs and expenses of this application should be costs and expenses of the administration of the Company.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 11 May 2010
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