Lau, in the matter of Blayney Crane Services Pty Limited (Administrators appointed)

[2013] FCA 696

FEDERAL COURT OF AUSTRALIA

Lau, in the matter of Blayney Crane Services Pty Limited (Administrators appointed) [2013] FCA 696

Citation:		Lau, in the matter of Blayney Crane Services Pty Limited (Administrators appointed) [2013] FCA 696
Parties:		MELISSA POH BEE LAU AND GEOFFREY PHILIP REIDY IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF BLAYNEY CRANE SERVICES PTY LIMITED ACN 003 730 256 (ADMINISTRATORS APPOINTED)
File number:		NSD 1334 of 2013
Judge:		FARRELL J
Date of judgment:		12 July 2013
Catchwords:		CORPORATIONS – application by administrators pursuant to s 439A(6) of the Corporations Act 2001 (Cth) – 8 day extension of convening period for meeting of creditors – error in calculating convening period
Legislation:		Corporations Act 2001 (Cth) ss 439A, 447A, 600G(6), Part 5.3A
Date of hearing:	12 July 2013
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	4
Counsel for the Plaintiff:	Mr T Lynch
Solicitor for the Plaintiff:	Wyndham Prem Commercial Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1334 of 2013

IN THE MATTER OF BLAYNEY CRANE SERVICES PTY LIMITED (ADMINISTRATORS APPOINTED)

BETWEEN: MELISSA POH BEE LAU AND GEOFFREY PHILIP REIDY IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF BLAYNEY CRANE SERVICES PTY LIMITED ACN 003 730 256 (ADMINISTRATORS APPOINTED)
Plaintiff

JUDGE:	FARRELL J
DATE OF ORDER:	12 JULY 2013
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.Pursuant to section 439A(6) of the Corporations Act 2001 (Act) the period within which the Plaintiffs must convene the meeting of creditors of Blayney Cranes Services Pty Limited ACN 003 730 256 (Administrators Appointed) (Company) as fixed by section 439A(5) of the Act be extended up to and including Thursday 18 July 2013.

2.Pursuant to section 447A(1) of the Act that the meetings of the creditors of the Company required by section 439A of the Act may be held at any time during, or within 5 business days after the end of, the convening period, as extended by Order 1, notwithstanding the provisions of section 439A(2) of the Act.

3.Leave is reserved to any person claiming to be interested, including any creditor of the Company to make an application to vary or discharge any or all of these Orders upon 24 hours notice to the Plaintiffs.

4.These Orders be entered forthwith.

The Court notes the undertaking of the Plaintiffs by their counsel that they will bear the costs of and associated with this application personally.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 1334 of 2013

IN THE MATTER OF BLAYNEY CRANE SERVICES PTY LIMITED (ADMINISTRATORS APPOINTED)

BETWEEN: MELISSA POH BEE LAU AND GEOFFREY PHILIP REIDY IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF BLAYNEY CRANE SERVICES PTY LIMITED ACN 003 730 256 (ADMINISTRATORS APPOINTED)
Plaintiff

JUDGE:	FARRELL J
DATE:	12 JULY 2013
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. The plaintiffs Melissa Poh Bee Lau and Geoffrey Philip Reidy are joint administrators (administrators) of Blayney Crane Services Pty Limited ACN 003 730 256 (administrators appointed) (Company). The administrators were appointed on 12 June 2013. By an application filed on 10 July 2013, the administrators seek orders under section s 439A(6) of the Corporations Act 2001 (Cth) (Corporations Act) extending the convening period for the second meeting of creditors under s 439A(5) to 18 July 2013. The convening period is due to end on 10 July 2013. The administrators also seek orders under s 447A(1) permitting the second meeting of creditors to be held at any time during or within 5 business days after 18 July 2013.

2. Ms Lau swore two affidavits (dated 10 and 11 July 2013 respectively) which were filed and read in these proceedings.  She deposes that:

   ·The administrators received a final deed of company arrangement proposal from the directors of the Company on Tuesday, 9 July 2013.  The administrators intend to recommend to creditors that the deed of company arrangement proposal should be accepted because it will provide a better return to creditors than liquidation. 

   ·At about 6 pm on 9 July, Ms Lau was preparing a notice to the Australian Securities & Investments Commission (ASIC) concerning the second meeting of creditors. According to the timetable for the administration on which the administrators had been relying, the second meeting should be held by 18 July at the latest. The timetable had been prepared by a staff member. Ms Lau realised that the timetable was in error and that upon a proper calculation of the convening period under s 439A(5), the convening period ended on 10 July (not 11 July as provided by the timetable) and the last day for holding the second meeting of creditors was 17 July. To meet the 5 business days notice period required by s 439A(3), the administrators’ report to creditors should have been sent by post no later than 9 July.

   ·Ms Lau filed the notice with ASIC specifying the date for the second meeting of creditors as 17 July, thinking that the report could be sent by email or fax to creditors.  A copy of the draft report appears at Tab 7 of Ms Lau’s affidavit of 10 July.

   ·On the morning of 10 July, Ms Lau realised that this would not be a solution. Under s 600G(6) of the Corporations Act, a report sent by fax or email on 10 July would be deemed to be sent on 11 July, which would be too late.

   ·As a result, Ms Lau initiated this application to the Court on the morning of 10 July.  She also notified creditors by email or fax of the application and the time of the hearing. Ms Lau believes that all creditors have supplied email or fax addresses.  She also caused her solicitors to notify ASIC. 

   ·The administrators do not intend to claim the costs of this application or time spent by the administrators or their staff in preparing this application as costs of the voluntary administration of the Company.

3. Written and oral submissions on behalf of the administrators note:

   ·An officer of ASIC has advised that it does not have a position on the application and that there is no obligation to advise ASIC of such applications (this was supported by an affidavit of a solicitor to the administrators).

   ·The error was inadvertent and discovered on the evening of 9 July.

   ·The application was made on the last day of the convening period, 10 July.

   ·The Company’s business operates predominantly throughout regional New South Wales and provides cranes and rigging for mining, quarrying, roofing, panel erecting and general building applications amongst other things.  It suffered a contraction in cash flows at least in part because of the downturn in the mining industry.  The administrators forecast that cash flows for the Company will be positive if some relatively minor efficiency upgrades are implemented.

   ·The deed of company arrangement proposal will rely on a deed fund of $360,000 to be paid by the Company over 12 months from its operating revenues.  The administrators believe that the Company will be in a position to comply with the deed fund payments. 

   ·The administrators will be recommending that creditors vote in favour of the deed of company arrangement proposal rather than proceeding with an immediate winding up because: (A) it will allow the Company to continue trading; (B) it will allow the Company to meet all of its superannuation guarantee charge obligations; and (C) it will return more to the other unsecured creditors than might be obtained in a winding up of the Company.

   ·There is no committee of creditors.

   ·The orders sought will preserve the right of any affected party to apply to discharge the orders.

4. I am satisfied that making the orders sought by the administrators will advance the purposes of Part 5.3A of the Corporations Act. The report of the administrators is ready to be sent to creditors so that the meeting can be held within 5 business days after the extended convening period. The application for extension has been made during the convening period. The extension is short, 6 business days. I am satisfied that the need for the extension arose through honest error in an overall context where the administrators appear to have been diligent and efficient. When the error was discovered, the administrators have taken immediate and appropriate action to address the issue, including giving notice of this application to creditors, none of whom appeared to oppose the application. Accordingly I will grant the application extending the convening period to 18 July 2013 and for the second meeting of creditors to be held during or within 5 business days after that date. I will grant leave for any affected person to apply with 24 hours notice to the administrators to vary or discharge any of the orders. I will not make any order as to costs and I note the administrators’ undertaking that they will bear all costs associated with making this application personally.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.

Associate:

Dated:       18 July 2013