Smith, Graeme Lloyd as Administrator of Tracker Software (Australia) Pty Ltd Engineers Pty Ltd

[1997] FCA 453

CATCHWORDS

CORPORATIONS LAW - second meeting of creditors - application by administrator for extension of convening period for second meeting of creditors -
principles relevant to extension of convening period discussed - extension of time desirable where it will enable the administrator to make an informed recommendation to creditors

Corporations Law ss 439A

Echuca Insured Housing Loans Pty Limited v Leon Alfred Lumsden, unreported, Supreme Court of Victoria, Harper J, 4 February 1994

GRAEME LLOYD SMITH as Administrator of TRACKER SOFTWARE (AUSTRALIA) PTY LTD ENGINEERS PTY LTD (ADMINISTRATOR APPOINTED) (ACN 055 798 153)
VG 3129 of 1997

Before:  MARSHALL J
Place:  MELBOURNE
Date of hearing:       16 MAY 1997
Date of judgment:    16 MAY 1997

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
  No. VG 3129 of 1997

IN THE MATTER of Sections 439A and 447A of the Corporations Law

and

IN THE MATTER of TRACKER SOFTWARE (AUSTRALIA) PTY LTD (ADMINISTRATOR APPOINTED) (ACN 055 798 153)

GRAEME LLOYD SMITH as Administrator of TRACKER SOFTWARE (AUSTRALIA) PTY LTD ENGINEERS PTY LTD (ADMINISTRATOR APPOINTED) (ACN 055 798 153)

BEFORE:     MARSHALL J
PLACE:       MELBOURNE
DATE:          16 MAY 1997

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The convening period of a meeting of creditors of Tracker Software (Australia) Pty Ltd (Administrator Appointed) (ACN 055 978 153) under section 439A of the Corporations Law be extended to 8 July 1997.

1. The directions hearing be adjourned to 9.30 am on 30 June 1997 before a Registrar of the Court.

Note:  Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
  No. VG 3129 of 1997

IN THE MATTER of Sections 439A and 447A of the Corporations Law

and

IN THE MATTER of TRACKER SOFTWARE (AUSTRALIA) PTY LTD (ADMINISTRATOR APPOINTED) (ACN 055 798 153)

GRAEME LLOYD SMITH as Administrator of TRACKER SOFTWARE (AUSTRALIA) PTY LTD ENGINEERS PTY LTD (ADMINISTRATOR APPOINTED) (ACN 055 798 153)

BEFORE:     MARSHALL J
PLACE:       MELBOURNE
DATE:          16 MAY 1997

REASONS FOR JUDGMENT

Delivered ex tempore - revised from the transcript

This is an application pursuant to section 439A of the Corporations Law to extend the period of time within which a second meeting of creditors can take place.

The application arises in the following way. The company, Tracker Software Australia Pty Limited, appointed Mr Smith as an Administrator on 29 April 1997. On 6 May 1997 the first meeting of creditors occurred and a committee of creditors was formed. Under the Corporations Law a second meeting of creditors is necessary to decide the company's future.

The administration having commenced on 29 April 1997 and the convening period thus concluding on 19 May 1997, the meeting to decide the future of the company would ordinarily have to occur within five days of 19 May 1997, unless an extension of time is granted on or before 19 May 1997.  Mr C. Northrop, counsel for the Administrator, referred the Court to various authorities dealing with previous applications for extension of time in circumstances similar to the present matter. 

In the matter of Echuca Insured Housing Loans Pty Limited v Leon Alfred Lumsden, an unreported judgment of Harper J of the Supreme Court of Victoria on 4 February 1994, his Honour said at page 4 of the judgment:

Speed is important because the interests of the body of creditors as a whole may be adversely affected by delay.  On the other hand, the interests of the creditors would also be adversely affected if meetings were called only to be necessarily adjourned, because adequate information is not available upon which the creditors can make an informed decision.

There is evidence before the Court today from Mr Smith which indicates that there are complexities in respect to the particular circumstances of this company.  There are various proposals being considered in order to assist with its future and Mr Smith deposes that he needs more time to make a recommendation regarding the company's future and effectively to allow the various matters he is investigating to unravel.

It is particularly significant in my opinion that if those investigations are not allowed to continue and an informed decision not able to be made in light of them, that employees of the company may be severely adversely affected in the future.  Notwithstanding the desire of the legislature that there be speed, in my view speed unaccompanied by any useful gathering of intelligence to guide the company into the future is undesirable, and speed for its own sake is something that should not be paramount.

In any event, the suggested extension of time raised before me today in the application, that is to 8 July 1997, in the circumstances is not an inordinate period of time for the deferral of the meeting which ordinarily would take place earlier under the Corporations Law. In my view, having regard to the factors earlier referred to and also to the fact that there is evidence before me that the committee of creditors consent to the application, the application should be allowed. This would enable greater time for the Administrator to investigate and report and form an opinion which is truly informed and likely to assist all connected with the company in the future, especially its current employees.

I am also guided by the fact that Mr Smith is currently not able to form such an opinion with any certainty because of various developments referred to in his affidavit having yet to unravel.  In the circumstances, the Court is prepared to make orders substantially in the form proffered by counsel, Mr C. Northrop, and the Court thanks Mr Northrop for his helpful submissions.  The orders of the Court are as follows:

1. The convening period of a meeting of creditors of Tracker Software (Australia) Pty Ltd (Administrator Appointed) (ACN 055 798 153) under section 439A of the Corporations Law be extended to 8 July 1997.

1. The directions hearing be adjourned to 9.30 am on 30 June 1997 before a Registrar of the Court.

I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment of his Honour Justice Marshall as recorded in the transcript and revised by his Honour.

Associate:  
Date:  

APPEARANCES

Counsel for the Administrator:  Mr C Northrop
Solicitors for the Administrator:  Cornwall Stodart

Date of hearing:  16 May 1997
Date of judgment:  16 May 1997