Mentha, in the matter of ACN 009 758 258 Pty Ltd (Administrators Appointed)
[2009] FCA 603
•5 May 2009
FEDERAL COURT OF AUSTRALIA
Mentha, in the matter of ACN 009 758 258 Pty Ltd (Administrators Appointed) [2009] FCA 603
Corporations Act 2001 (Cth)
MARK FRANCIS XAVIER MENTHA, BRIAN KEITH MCMASTER AND JOHN RICHARD PARK IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF ACN 009 758 258 PTY LTD (ADMINISTRATORS APPOINTED) (FORMERLY KNOWN AS HANS CONTINENTAL SMALLGOODS PTY LIMITED (ACN 009 758 258) AND ORS
NSD 1939 of 2008
EMMETT J
5 MAY 2009
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1939 of 2008
MARK FRANCIS XAVIER MENTHA,
BRIAN KEITH MCMASTER AND JOHN RICHARD PARK IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF ACN 009 758 258 PTY LTD (ADMINISTRATORS APPOINTED) (FORMERLY KNOWN AS HANS CONTINENTAL SMALLGOODS PTY LIMITED (ACN 009 758 258)SWICKER’S KINGAROY BACON FACTORY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 009 678 693)
SUN PORK FOODS PTY LTD (ADMINISTRATORS APPOINTED) (ACN 100 494 264)
Plaintiffs
JUDGE:
EMMETT J
DATE OF ORDER:
5 MAY 2009
WHERE MADE:
SYDNEY
THE COURT GRANTS LEAVE:
1.To the Plaintiff to file the Interlocutory Process in the form initialled and dated with today’s date to be returnable before Emmett J at 10:15 am today.
2.To the Plaintiff to file in Court the Affidavit of Brian Keith McMaster sworn 4 May 2009.
THE COURT ORDERS THAT:
3.Pursuant to s 1322(4) of the Corporations Act 2001 (Cth) (the Act), the meeting of creditors of each of ACN 009 758 258 Pty Ltd (administrators appointed) (formerly Hans Continental Smallgoods Pty Limited), Swicker's Kingaroy Bacon Factory Pty Limited (administrators appointed) and Sun Pork Foods Pty Ltd (administrators appointed) (Companies and each a Company) to be held on 6 May 2009 is not invalid by reason of any defect in causing notice of the meetings of the Companies to be published in accordance with s 439A(3)(b) of the Act.
4.With respect to each Company, pursuant to s 447A(1) of the Act, Part 5.3A of the Act is to operate in relation to the convening of the second meeting of creditors of that Company as though it required the meeting of the Company to be convened by causing notice of the meeting to be published at least 4 business days before the meeting.
5.Grants to the Plaintiffs liberty to apply.
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 eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 1939 of 2008
MARK FRANCIS XAVIER MENTHA, BRIAN KEITH MCMASTER AND JOHN RICHARD PARK IN THEIR CAPACITIES AS JOINT AND SEVERAL ADMINISTRATORS OF ACN 009 758 258 PTY LTD (ADMINISTRATORS APPOINTED) (FORMERLY KNOWN AS HANS CONTINENTAL SMALLGOODS PTY LIMITED (ACN 009 758 258) AND THE OTHER COMPANIES LISTED IN THE SCHEDULE
SWICKER’S KINGAROY BACON FACTORY PTY LTD (ADMINISTRATORS APPOINTED) (ACN 009 678 693)
SUN PORK FOODS PTY LTD (ADMINISTRATORS APPOINTED) (ACN 100 494 264)
Plaintiffs
JUDGE:
EMMETT J
DATE:
5 MAY 2009
PLACE:
SYDNEY
REASONS FOR JUDGMENT
On 28 November 2008 the plaintiffs (the Administrators), were appointed, pursuant to the Corporations Act 2001 (Cth) (the Act), joint and several administrators of each of three companies, namely Hans Continental Smallgoods Pty Ltd (Hans), Swicker’s Kingaroy Bacon Factory Pty Ltd (Swicker’s) and Sun Pork Foods Pty Ltd (Sun Pork).
Hans has been a producer of smallgoods products, including processed hams and salami products, with production at plants in Queensland and New South Wales, and various storage facilities and other operations elsewhere in Australia. Since the appointment of the Administrators, the majority of the assets of Hans have been sold to a nominee company of P & M Smallgoods Pty Limited which operates under the trading name “Primo”. The terms of the sale to Primo required the change of the name of Hans and it is now known as ACN 009 758 258 Pty Ltd.
Hans owned 65% of the issued share capital of Swicker’s. Swicker’s owns and operates an abattoir in Kingaroy, Queensland. As a by-product of the abattoir process, offal is sold by Sun Pork, which is a wholly owned subsidiary of Swicker’s. Sun Pork operates from the premises of Swicker’s. The majority of the creditors of the companies, including their employees, are based in Queensland. The Administrators therefore consider that Queensland is the most convenient place, for the majority of persons entitled to receive notices of meetings, for the holding of meetings.
The first meeting of the creditors of Swicker’s was held in Kingaroy, Queensland, on 8 December 2008, the first meeting of the creditors of Sun Pork was held in Brisbane on 10 December 2008 and the first meeting of creditors of Hans was held in Brisbane on 10 December 2008. The meeting of Swicker’s creditors was attended by more than 115 creditors and the meeting of Hans creditors was attended by more than 400 creditors. Sun Pork has only one creditor, namely Japan Tobacco Inc, which owns 100% of the issued share capital of Hans. Japan Tobacco attended the meeting of creditors of Sun Pork by proxy.
On 16 December 2008 the Court ordered that the convening period for the second meeting of creditors of each of the companies be extended to midnight on 30 March 2009 pursuant to s 439A of the Act. On 20 March 2009 the Court made further orders extending the convening period for the second meeting of creditors of the companies to midnight on 29 April 2009.
Since the making of those further orders, the Administrators have taken a number of further steps. First, they have executed an asset sale agreement with CHM Alliance Pty Limited (CHM), in relation to the sale of the assets of Swicker’s, including the assets of Sun Pork and other assets of Hans. They have also negotiated further contractual arrangements with CHM to structure the sale of Swicker’s and Sun Pork as a sale of shares rather than a sale of assets.
Second, they have completed the sale to Primo of the majority of the assets of Hans. They have also finalised their investigations into the affairs of the companies and have formed the view that it would be in the best interests of the creditors of each of the companies to execute deeds of company arrangement to enable the Administrators to continue to trade in order to complete the sale to CHM as a going concern. The negotiations with CHM to date indicate a strong likelihood that the sale will proceed by way of a sale of shares. The proposed deeds of company arrangement are to be considered at the second meeting of creditors.
The Administrators have finalised their report to creditors and have decided that the second meeting of creditors of the three companies should be held on 6 May 2009 in Brisbane. They have taken steps to convene the second meetings of creditors. However, there have been some deficiencies in the steps taken to convene the meetings and hence the application today for orders to remedy the deficiencies.
Steps were taken by staff of the Administrators to convene the second meeting of the creditors of Hans. First, on Tuesday, 28 April 2009, a notice of the meeting was posted to creditors, together with a proxy and proof of debt form and the Administrators’ report to creditors pursuant to s 439A. The notice and accompanying documents was sent to all known creditors.
Also on Tuesday, 28 April 2009, Mr Umang Mittal, a member of the staff of the Administrators located in their Perth office, emailed to the Courier Mail newspaper, which circulates in Queensland, a request that notice of the second meeting of the creditors of Hans be published in the edition of the Courier Mail of 29 April 2009. An attempt was also made by Mr Mittal to arrange for notice of the meeting to be published in the Australian newspaper on 29 April 2009. At 10am on 28 April 2009 Australian Western Standard Time, Mr Mittal telephoned the Australian to inquire as to the deadline and was informed that the cut off time was 10am Australian Eastern Standard Time, a time that had expired some two hours previously. Mr Mittal then emailed to the Australian a request that notice of the second meeting of the creditors of Hans be published in the edition of the Australian for 30 April 2009. The notices were published in the Courier Mail on 29 April 2009 and in the Australian on 30 April 2009.
The Administrators’ staff also posted notices of meeting and accompanying documents to the known creditors of Swicker’s on 29 April 2009. In addition, arrangements were made for notice of the second meeting of the creditors of Swicker’s to be published in the Courier Mail on 29 April 2009 and the notice duly appeared in the edition of the Courier Mail published on 29 April 2009.
Finally, in relation to Sun Pork, the Administrators’ staff also posted notices of the second meeting of creditors of Sun Pork and the accompanying documents to all known creditors on 28 April 2009. In addition, Mr Mittal arranged for notice of the second meeting of the creditors of Sun Pork to be published in the Courier Mail on 29 April 2009 and that notice was in fact published in the Courier Mail on 29 April 2009.
Thus the net effect of the arrangements made is that notices of the meetings were dispatched to all known creditors on 28 April 2009. A notice of the second meeting of creditors appeared in the Courier Mail on 29 April 2009 and, in relation to Hans, in the Australian on 30 April 2009. The difficulty is that, when calculating the time period for when notices were required to be published, one of the Administrators inadvertently counted Monday, 4 May 2009 as one of the five business days required. He overlooked the fact that Monday, 4 May 2009 is a public holiday in Queensland. As a consequence of that inadvertence, the notice of the second meetings of creditors, which appeared in the Courier Mail, was published only four business day before the meeting rather than the requisite five, as is required by s 439A(3)(b) of the Act.
Similarly, as a result of the inadvertence in relation to the public holiday in Queensland and the mistiming on the part of Mr Mittal, the notice that appeared in The Australian was published in Queensland three business days before the meeting and in the rest of Australia only four business days before the meeting, rather than five business days. The Administrators have received no complaints from any creditor of the companies concerning the lateness of notification by advertisement. Further, the Administrators have received proofs of debt and proxies in terms of volume commensurate with what their expectation would be. It appears, therefore, that no person has been prejudiced by the inadvertence.
The Administrators seek two orders. First, they seek an order, pursuant to s 1322(4) of the Act, that the meetings of the creditors are not invalid by reason of any failure to cause notice of the meetings to be published in accordance with s 439A(3)(b) of the Act. Section 1322(4) provides that the Court may make an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken under the Act in relation to a corporation is not invalid by reason of any contravention of a provision of the Act.
Under s 1322(6) the Court must not make such an order unless it is satisfied that the act, matter or thing, or the proceeding in question is essentially of a procedural nature, or that person or persons acted honestly, or that it is just and equitable that the order be made. The Court must also be satisfied that no insubstantial justice has been or is likely to be caused to any person.
The first three prerequisites are alternatives. I am satisfied that the failure to comply with the requirements of s 439A(3)(b) is essentially of a procedural nature. I am also satisfied that no insubstantial justice has been or is likely to be caused to any person. Accordingly, it is appropriate to make an order as contemplated by s 1322(4)(a) of the Act.
By way of boiler-plating, the Administrators also seek an order pursuant to s 447A of the Act, which provides that the Court may make such order as it thinks appropriate about how Part 5.3A of the Act is to operate in relation to a particular company. In order to remove any doubt concerning the validity of the meetings, the Administrators ask for an order, pursuant to s 447A(1), that Part 5.3A is to operate in relation to the convening of the second meeting of creditors as though it required the Company to convene by causing a notice of the meeting to be published at least four days before the meeting. In the circumstances, I consider that it is appropriate to make such an order.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. Associate:
Dated: 4 June 2009
Counsel for the Plaintiff: Mr I Jackman Solicitor for the Plaintiff: Baker & McKenzie Date of Hearing: 5 May 2009 Date of Judgment: 5 May 2009
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