Re Civils Australia Pty Ltd

[1999] WASC 94

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   RE CIVILS AUSTRALIA PTY LTD; EX PARTE GLENN FEATHERBY (As Administrator  of CIVILS AUSTRALIA PTY LTD) (Receiver and Manager Appointed) (Subject to Deed of Company Arrangement) & ANOR [1999] WASC 94

CORAM:   ANDERSON J

HEARD:   12 JULY 1999

DELIVERED          :   12 JULY 1999

FILE NO/S:   COR 182 of 1999

MATTER                :Sections 445G, 447A & 1322 of the Corporations Law of Western Australia

and

CIVILS AUSTRALIA PTY LTD (RECEIVER AND MANAGER APPOINTED) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 009 289 105)

EX PARTE

GLENN FEATHERBY (As Administrator of CIVILS AUSTRALIA PTY LTD) (Receiver and Manager Appointed) (Subject to Deed of Company Arrangement) (ACN 009 289 105)
MARK REILLY (As Administrator of CIVILS AUSTRALIA PTY LTD) (Receiver and Manager Appointed) (Subject to Deed of Company Arrangement) (ACN 009 289 105)
Applicants

FILE NO/S              :COR 183 of 1999

BETWEEN              :GLENN FEATHERBY (As Administrator of INKORN PTY LTD) (Subject to Deed of Company Arrangement) (ACN 009 236 337)

MARK REILLY (As Administrator of INKORN PTY LTD) (Subject to Deed of Company Arrangement) (ACN 009 236 337)
Applicants

Catchwords:

Companies - Administrators - Deed of company arrangement - Execution of deed - Manner of - Whether administrators can execute deed as agents of the company

Legislation:

Corporations Law s 437A, s 437(c)(3), s 444(B)(3), (4)

Result:

Declaration of due execution granted

Representation:

COR 182 of 1999

Counsel:

Applicants:     Mr K L Christensen

Solicitors:

Applicants:     Tottle Christensen

COR 183 of 1999

Counsel:

Applicants:     Mr K L Christensen

Solicitors:

Applicants:     Tottle Christensen

Case(s) referred to in judgment(s):

MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 30 ACSR 705

Case(s) also cited:

Nil

1. ANDERSON J: These are two applications made pursuant to s 445G(2) of the Corporations Law for declarations that deeds of company arrangement entered into between the applicants as administrators of the companies and the companies are not void. 

2. The applications are made necessary by the fact that the deeds of company arrangement in question, which are reproduced as exhibits to the affidavit of Mark David Reilly, one of the applicants, sworn 28 June 1999 at pages 205 and 221 respectively, were executed in a manner which may be described as unorthodox. 

3. Each of the deeds of company arrangement were executed by the administrators, as indeed they are required to be by s 444B(5) of the Corporations Law and they are each also executed by the affixing to them of the common seal of each company and by the appearance beneath the sealing clause adjacent to the common seal of each company of the signatures of Ivan John Mrsa and each of the administrators, Mr Featherby and Mr Reilly. 

4. The format of that particular execution would suggest that the company had executed or purported to execute the deed of company arrangement in each case by affixing its common seal; and by a single director witnessing the affixing of the common seal.  The implication on the face of it is that each company had authorised the common seal of the company to be affixed.  The constitution of neither company provides for the fixing of the common seal to be witnessed by a single director and the evidence is that there was in fact no formal meeting of directors authorising the fixing of the common seal. 

5. Insofar, therefore, as the execution of the document on the part of or on behalf of the company comprises the affixing of the common seal the execution is defective.  However, there is beneath the signature of Mr Mrsa, as I have said, the signatures of each of the administrators.  Now, on the face of the documents they plainly signed each deed purporting to do so on behalf of the company.

6. The provisions of the Corporations Law empower them to execute a deed of company arrangement in their capacity as administrators acting on behalf of the company. Their power to do that is to be found in s 437A and s 437C(3). Those sections are to be read with s 444B(3) and (4). There was once doubt as to whether those sections gave an administrator or administrators power to bind the company to a deed of company arrangement by execution of the deed as agents of the company. The contrary view was that the company itself had to in some way, otherwise than by execution of the deed by the administrators, become bound to the deed.

7. However, since the decision of the High Court in the case which has been referred to by Mr Christensen - that is, the case of MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 30 ACSR 705 - I am satisfied that the administrators do indeed have the power to bind a company to a deed of company arrangement by executing that deed on behalf of the company.

8. As I have said, in this case, the signature of the administrators appears both in their capacity as administrators required to sign so as to bind the administrators and in their capacity as agents of the company, their agency being derived from their office as administrators of the company. 

9. Therefore, although the deed has also been purportedly executed by an affixation of the common seal of the company, it seems to me that the provisions of the Law have been complied with and although there are deficiencies in form in the execution clauses in the deed it is plain beyond doubt that the deed has been entered into by the company.

10. I am therefore prepared to make a declaration in terms of par 1 of the application in each case; that is, a declaration that the deed of company arrangement in question in each case made between the applicants as administrators and the company in each case is not void by reason of the manner of the execution of the deed.