Re Cape View Developments WA Pty Ltd
[2009] WASC 384
•15 DECEMBER 2009
RE CAPE VIEW DEVELOPMENTS WA PTY LTD; EX PARTE CRIBB [2009] WASC 384
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2009] WASC 384 | |
| 15/12/2009 | |||
| Case No: | COR:181/2009 | 30 NOVEMBER 2009 | |
| Coram: | MASTER SANDERSON | 30/11/09 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | Time extended | ||
| B | |||
| PDF Version |
| Parties: | NEIL RAYMOND CRIBB And GREGORY BRUCE DUDLEY As Administrators Of CAPE VIEW DEVELOPMENTS WA PTY LTD (ADMINISTRATORS APPOINTED) (ACN 109 689 643) |
Catchwords: | Corporations law Application to further extend time for convening creditors meeting Turns on own facts |
Legislation: | Nil |
Case References: | Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270 Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99; (2000) 156 FLR 453 Re Evans & Tate Ltd; Ex parte Jones [2007] WASC 235 Re Henry Walker Eltin Group Ltd [2005] FCA 984; (2005) 54 ACSR 383 Re Lombe; Australian Discount Retail Pty Ltd [2009] NSWSC 110 Re Mentha; Hans Continental Smallgoods Pty Ltd (Administrators Appointed) [2008] FCA 1933 Re Palandri Ltd; Ex parte Cussen [2008] WASC 68 Re South Burnett Wines Limited (Administrators Appointed) [2004] NSWSC 1239 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
NEIL RAYMOND CRIBB And
GREGORY BRUCE DUDLEY As Administrators Of CAPE VIEW DEVELOPMENTS WA PTY LTD (ADMINISTRATORS APPOINTED) (ACN 109 689 643)
Plaintiffs
Catchwords:
Corporations law - Application to further extend time for convening creditors meeting - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Time extended
Category: B
Representation:
Counsel:
Plaintiffs : Mr T K Zaffino
Solicitors:
Plaintiffs : McKenzie Moncrieff Lawyers
Case(s) referred to in judgment(s):
Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270
Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99; (2000) 156 FLR 453
Re Evans & Tate Ltd; Ex parte Jones [2007] WASC 235
Re Henry Walker Eltin Group Ltd [2005] FCA 984; (2005) 54 ACSR 383
Re Lombe; Australian Discount Retail Pty Ltd [2009] NSWSC 110
Re Mentha; Hans Continental Smallgoods Pty Ltd (Administrators Appointed) [2008] FCA 1933
Re Palandri Ltd; Ex parte Cussen [2008] WASC 68
Re South Burnett Wines Limited (Administrators Appointed) [2004] NSWSC 1239
(Page 3)
1 MASTER SANDERSON: This was an application to further extend the period within which the meeting of creditors of Cape View Developments WA Pty Ltd (administrators appointed) (the company) had to be convened. As matters stood prior to this application, the meeting had to be convened by Wednesday 2 December 2009. The plaintiffs sought a further extension of the convening period to 31 January 2010. Based upon the materials filed including submissions on behalf of the plaintiffs, I made certain orders extending the convening period. I will detail those orders below.
2 The application was made pursuant to s 439A(6) and s 447A(1) of the Corporations Act 2001 (Cth) (the Act). It was also brought pursuant to the liberty to apply granted in orders Kenneth Martin J made on 24 September 2009. Effectively, the application sought to modify the operation of pt 5.3A of the Act pursuant to s 447A so as to permit a further application to extend the convening period and consequential modifications to s 439A so as to permit the second meeting of creditors to be held other than within five business days before or after the end of the convening period.
3 From time to time doubts have been expressed about the court's power to order further extensions of the convening period pursuant to s 439A(6) of the Act. However, it now seems generally accepted that the court does have power to order an extension pursuant to s 447A of the Act: see Re Lombe; Australian Discount Retail Pty Ltd [2009] NSWSC 110 [29]; Re Henry Walker Eltin Group Ltd [2005] FCA 984; (2005) 54 ACSR 383 [2]. Although the court will expect that administrators will adhere to the specific time limits, the need to extend time in a particular case is recognised by the power of the court to grant a necessary extension. Exercise of the power should be approached with the objects of pt 5.3A of the Act in mind: see Re Evans & Tate Ltd; Ex parte Jones [2007] WASC 235 [20], [21].
4 The objects of pt 5.3A of the Act are set out in s 435A. The part aims to have the business, property and affairs of an insolvent company administered in a way that maximises the chances of the company, or as much as possible of its business, continuing in existence. If that is not possible then the aim is to produce the best possible return to the company's creditors and members in the winding up. There do not need to be special grounds for the extension being sought. The matter is one for decision on the evidence in a particular case. However, one factor for consideration is whether or not an extension of time is necessary to enable
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- the administrator to provide the report and recommendations required under s 439A(4) of the Act: see Re Evans & Tate (supra) [21].
5 The authorities show that an extension of the convening period is appropriate where an administrator requires time to consider an offer to purchase the assets of the insolvent company or where the sale process for the assets is complex. The possibility that an offer may provide a more favourable outcome to creditors than if there is winding up in insolvency is also a relevant consideration: see Re Palandri Ltd; Ex parte Cussen [2008] WASC 68 [12], [13], [18].
6 The wishes of creditors as to whether or not an extension ought be granted are relevant but not determinative. If the evidence does not point to significant prejudice to creditors beyond prejudice invariably suffered as a result of delay and provision of information generally, then the extension ought be granted. Liberty for an interested party to apply to have the orders amended should generally be included: see Re South Burnett Wines Limited (Administrators Appointed) [2004] NSWSC 1239; and Re Palandri Ltd (supra) [17].
7 Section 447A is a most unusual provision. It gives the court broad power to alter what would otherwise be the operation of pt 5.3A in relation to a particular company. That was made clear by the High Court in Australasian Memory Pty Ltd v Brien [2000] HCA 30; (2000) 200 CLR 270, 279 - 280. The courts have interpreted s 447A as a provision conferring upon them an extremely wide jurisdiction to make any order considered appropriate for the operation of the regime. In Deputy Commissioner of Taxation v Portinex Pty Ltd [2000] NSWSC 99; (2000) 156 FLR 453 (subject to CCA), a number of propositions concerning the section were set out. These propositions include the following:
(a) the power is not to be read down or confined to curing defects or remedying consequences of departures from other provisions of pt 5.3A;
(b) the section permits the court to make orders with respect to a particular provision of pt 5.3A, altering the operation of that provision, even where the provision would on its separate construction exclude such an order; and
(c) the section is not confined to filling in the gaps in the legislative scheme of pt 5.3A.
(Page 5)
8 In a number of cases s 447A has been used as a basis for a further application to extend the convening period and to modify the operation of s 439A(2) so as to permit the second meeting of creditors to be held before the end of the convening period. Perhaps the clearest illustration of this point is the decision of Re Mentha; Hans Continental Smallgoods Pty Ltd (Administrators Appointed) [2008] FCA 1933.
9 This application was supported by an affidavit of Neil Raymond Cribb sworn 27 November 2009. The reasons why the plaintiffs sought an extension of the convening period until 31 January 2010 can be summarised as follows. There is in existence a proposal to complete development of various lots of land owned by the company. That proposal is being considered and cannot be negotiated or agreed until the party considering the proposal has decided whether or not it will in fact make the proposal. The party considering the proposal has to determine whether it will submit a deed of company arrangement in relation to the completion of the land owned by the company. If a proposal is made the party making it will not be in a position to do so until on or about the day that the presently applicable convening period expires.
10 This delay in considering whether or not to submit a deed of company arrangement has not been due to idleness or neglect. St George Bank Ltd, a secured creditor, had to advise whether or not it would generally support completion of the development of the company's land. That decision could not be made until a valuation of the company's land was received. For one reason or another, the valuer was not until recently in a position to provide his complete and detailed valuation. Once that was received negotiations commenced. The evidence makes it plain there has been no avoidable delay on behalf of the plaintiffs.
11 The plaintiffs say they are not in a position to advise how long it might be before a decision is made as to whether or not a deed of company arrangement will be advanced. The plaintiffs are of the view there is a real prospect that waiting for the possible deed of company arrangement might provide a greater return to creditors than would otherwise be received in a winding up of the company. In light of that possibility the plaintiffs seek the extension.
12 It must be acknowledged that Mr Cribb in his affidavit is guarded. Such negotiations which have taken place with the party contemplating offering a deed of company arrangement are tentative at best. It remains to be seen how far the bank will be prepared to accommodate any proposed arrangement. But it is also clear that the administrators have the
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- best interests of the creditors and the members in mind. In my view, there is nothing to be lost in attempting to put in place a deed of company arrangement. Time is needed to conduct negotiations and attempt to resolve issues that may stand in the way of the deed of company arrangement. It is in the best interests of all concerned that the time for the convening period be extended.
13 For these reasons I made orders as follows:
1. The period within which the plaintiffs must, by s 439A of the Corporations Act 2001 (Cth) (the Act), convene a meeting of the creditors of Cape View Developments WA Pty Ltd ACN 109 689 643 (administrators appointed) (Company) be extended to 31 January 2010.
2. Section 439A(2) of the Act is to operate to permit the convening and holding of the meeting of creditors of the Company required by s 439A of the Act at any time during the convening period as extended by order 1 above, provided the requirements of s 439A(3) and s 439A(4) of the Act are complied with and provided the plaintiffs give notice of the meeting to creditors at least five business days before the meeting.
3. Exhibit NRC6 to the affidavit of Neil Raymond Cribb sworn 27 November 2009 be retained by the court in a sealed envelope to be opened only by the order of a judge.
4. The plaintiffs have liberty to apply for an extension of the convening period extended by order 1 above.
5. The plaintiffs' costs of this application be paid from the assets of the Company.
6. Any interested person has liberty to apply to modify or discharge order 1 and 2 above.
7. The plaintiffs give notice of these orders to the Company's creditors by means of a circular to be posted to the Company's creditors by ordinary post, no later than seven days after the date of these orders.
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