Yeo, in the matter of AES Services (Aust) Pty Ltd (ACN 111 306 543) (Administrators Appointed)

[2010] FCA 1

FEDERAL COURT OF AUSTRALIA

Yeo, in the matter of AES Services (Aust) Pty Ltd (ACN 111 306 543) (Administrators Appointed) [2010] FCA 1

Citation:	Yeo, in the matter of AES Services (Aust) Pty Ltd (ACN 111 306 543) (Administrators Appointed) [2010] FCA 1
Parties:	IN THE MATTER OF AES SERVICES (AUST) PTY LTD (ACN 111 306 543) (ADMINISTRATORS APPOINTED) v ANDREW REGINALD YEO, DAVID RAJ VASUDEVAN and GESS MICHAEL RAMBALDI
File Number:	VID 932 of 2009
Judge:	TRACEY J
Date of Judgment:	5 January 2010
Catchwords:	CORPORATIONS – Meetings – Time for second meeting of creditors – Extension of time – Need for further investigation
Legislation:	Corporations Act 2001 (Cth), ss 439A(4), (5) and (6)
Date of hearing:	5 January 2010
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	13
Solicitor for the Plaintiffs:	Arnold Bloch Leibler
Counsel for the Plaintiffs:	Mr S Dollard

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 932 of 2009
GENERAL DIVISION

IN THE MATTER OF AES SERVICES (AUST) PTY LTD (ACN 111 306 543) (ADMINISTRATORS APPOINTED)

ANDREW REGINALD YEO, DAVID RAJ VASUDEVAN AND GESS MICHAEL RAMBALDI
Plaintiffs

JUDGE:	TRACEY J
DATE OF ORDER:	5 JANUARY 2010
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.Subject to further order, and pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (“the Act”), the convening period for the meeting of the creditors of AES Services (Aust) Pty Ltd (“AES”) to be convened pursuant to s 439A(1) of the Act, be extended to 13 March 2010.

2.Leave be reserved to the plaintiffs to make further application at any time within the convening period as extended under Order 1 hereof for orders further extending the convening period.

3.Leave be reserved to any person claiming to be interested in the affairs of AES to make such application as they may be advised to vary these orders upon five business days notice to the plaintiffs.

4.The costs of this application be costs in the administration of AES.

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
VICTORIA DISTRICT REGISTRY	VID 932 of 2009
GENERAL DIVISION

IN THE MATTER OF AES SERVICES (AUST) PTY LTD (ACN 111 306 543) (ADMINISTRATORS APPOINTED)

ANDREW REGINALD YEO, DAVID RAJ VASUDEVAN AND GESS MICHAEL RAMBALDI
Plaintiffs

JUDGE:	TRACEY J
DATE:	5 JANUARY 2010
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 29 October 2009 the Australian Taxation Office (“the ATO”) commenced a proceeding in the Supreme Court of Victoria against AES Services (Australia) Pty Ltd (“AES”).  In that proceeding the ATO sought recovery of allegedly unpaid tax, penalties and interest from AES.  Before commencing the proceeding the ATO had sought, by other means, to recover some of the outstanding taxation liabilities of AES.  One of these means was the issuing of garnishee notices to creditors of AES.  On 16 September 2009 an agreement was reached between AES and the ATO under which the ATO agreed not to issue any further garnishee notices prior to 16 December 2009 if AES took certain action to provide security for AES’s liability for income tax.  AES did not provide that security.

2. On 6 December 2009, and, in anticipation that the ATO might issue further garnishee notices on and after 16 December 2009, the directors of AES resolved to appoint voluntary administrators. 

3. The voluntary administrators who were appointed were Mr David Vasudevan, Mr Gess Rambaldi and Mr Andrew Yeo.  They are the plaintiffs in the present application.

4. The first meeting of AES creditors was convened by the administrators, pursuant to s 436E of the Corporations Act 2001 (Cth) (“the Act”), on 16 December 2009.

5. Unless relieved of the obligation to do so the administrators are required to convene a second meeting of creditors on or before 13 January 2010: see s 439A(5) of the Act.

6. The administrators have applied to the Court for an order, under s 439A(6) of the Act, that what the Act refers to as a “convening period” be extended to 13 March 2010. The principal creditors, including the ATO, support the application.

7. The administrators seek the extension because they are presently unable, and anticipate being unable prior to 13 January 2010, to perform their obligations under s 439A(4) of the Act. That sub-section requires that the notice convening the second creditors’ meeting must be accompanied by:

   “(a)a report by the administrator about the company’s business, property, affairs and financial circumstances; and

   (b)a statement setting out the administrator’s opinion about each of the following matters:

   (i)whether it would be in the creditors’ interests for the company to execute a deed of company arrangement;

   (ii)whether it would be in the creditors’ interests for the administration to end;

   (iii)whether it would be in the creditor’s interest for the company to be wound up;

   and also setting out:

   (iv)his or her reasons for those opinions; and

   (v)such other information known to the administrator as will enable the creditors to make an informed decision about each matter covered by sub-paragraph (i), (ii) or (iii); and

   (c)if a deed of company arrangement is proposed – a statement setting out details of the proposed deed.”

8. Since their appointment the administrators have concentrated their attention on ensuring that AES continues to perform its contractual obligations to various clients.  They have taken a number of steps which are designed to ensure that AES’s business remains viable so that, in due course, it may be possible to sell the business as a going concern.  In the time available they have not had the opportunity of conducting a thorough investigation of AES’s financial affairs to determine whether or not AES  is obliged to make the payments to the ATO which are claimed in the Supreme Court proceeding.  In the course of these enquiries the administrators will need to examine over 7,500 transactions over a four and a half year period.

9. In addition, the administrators will need to investigate other matters including:

   ·Whether there are any voidable transactions which might be attacked by a liquidator subsequently appointed;

   ·Whether there have been any breaches of duty by directors or officers of AES;

   ·Whether there have been any unlawful transactions involving persons associated with the directors;

   ·The amount of the accrued entitlements owed to AES’s 240 employees; and

   ·The amount that may be needed to meet AES’s obligations to employees who may need to be retrenched in the near future.

10. Mr Yeo has deposed, and I accept, that the administrators will not be in a position to report to creditors on the matters required by s 439A(4) of the Act on or before 13 January 2010. This is the last date on which notice can be given of a second meeting to be held on 20 January 2010.

11. Having regard to the extensive investigations which remain to be conducted and need to be conducted, I consider it appropriate to enlarge the time for the holding of the second creditors’ meeting to 13 March 2010.

12. The principal order of the Court will be that, subject to further order, and pursuant to s 439A(6) of the Act, the convening period for the meeting of the creditors of AES Services (Aust) Pty Ltd, which is required to be convened, pursuant to s 439A(1) of the Act, be extended to 13 March 2010.

13. There will also be orders that leave be reserved to the plaintiffs to make further application at any time within the convening period for orders further extending the convening period, that leave be reserved to any person claiming to be interested in the affairs of AES to make application to vary these orders and that the costs of this application be costs of the administration of AES.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey.

Associate:

Dated:        5 January 2010