Macintosh, Alexander Robert Mackay v Minprop Australia NL & Ors [1995] FCA 1104

IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No NG3289 of 1995 ) GENERAL DIVISION ) BETWEEN: ALEXANDER ROBERT MACKAY MACINTOSH Applicant AND: MINPROP AUSTRALIA NL (ADMINISTRATOR APPOINTED) First Respondent BLACK HILL MINERALS LTD (ADMINISTRATOR APPOINTED) Second Respondent MONARCH SANDS PTY LTD (ADMINISTRATOR APPOINTED) Third Respondent MONARCH SAND (LYTTON) PTY LTD (ADMINISTRATOR APPOINTED)

CORAM: HILL J PLACE: SYDNEY DATED: 26 JUNE 1995

REASONS FOR JUDGMENT

The applicant, Mr Alexander Robert Mackay Macintosh, applies to the Court for an order that a meeting of creditors of the respondents be adjourned to a date to be determined, being a day on or before 31 July 1995, and of which Mr Macintosh is to give not less than three business days notice to the creditors of the respondents. Mr Macintosh was appointed administrator of the second, third and fourth respondents on 24 March 1995 and the first respondent on 18 May 1995. Pursuant to s439A(1) of the Corporations Law, Mr Macintosh convened a meeting of the creditors of the second respondent to be held on 28 April 1995. The convening of that

meeting occurred on 20 April 1995, that is to say less than 28 days from the date of Mr MacIntosh's appointment. At the meeting of 28 April 1995, the creditors resolved to adjourn until 23 June 1995. At the adjourned meeting, Mr Macintosh presented a report to creditors and there was discussion concerning an offer that had been received from Strategic Industry Investments. Mr Macintosh expressed the view to creditors that if the offer proceeded they would receive 50 cents in the dollar, if it did not, they would be unlikely to receive 20 cents in the dollar. Further time was necessary to bring the arrangement to fruition. He said that if a deed were not formulated in another 60 days from 15 June 1995, he was of the view that no arrangement would ever be implemented. The meeting of 23 June 1995 resolved to adjourn to a date to be fixed by the Court, hence Mr Macintosh's application. The application immediately comes into conflict with s439B(2) of the Corporations Law, which provides specifically that a meeting convened under s439A, while able to be adjourned from time to time, cannot be adjourned to a day that is more than 60 days after the first day on which the meeting was held, that is to say 60 days after 28 April 1995. This was a difficulty considered by Young J in the Supreme Court of New South Wales in Cawthorn v Keira Constructions Pty Limited (1994) 12 ACLC 396 in a judgment subsequently cited by Lindgren J of this Court in the matter of Double V Marketing Pty Limited (In Administration) (unreported, 24 March 1995). Their Honours have accepted that s447A of the Corporations Law empowers the Court to make such orders as it thinks appropriate as to how Part 5 is to operate in relation to a particular company, and that it confers power to extend the maximum period fixed by subsec439B(2) notwithstanding the express words of that section. Lindgren J, in so following what had been held by Young J, referred to the need for uniformity in judicial decisions in matters arising under the Corporations Law. I would take a similar view. The present seems to be an appropriate case for the making of such an order. The period is necessary to enable an arrangement to be finalised, if it can be, which would be of considerable benefit to the creditors. It is not a case where the period has been extended for some other purpose such as keeping creditors at bay. I would follow the course that Lindgren J adopted of reserving leave to interested persons to make application to vary the orders I make, upon 24 hours notice to the administrator. The orders that I would make accordingly are: 1. I grant leave to the applicant to file the application and supporting affidavit dated 26 June 1995 in Court on the undertaking that the appropriate fees will be paid by or through the solicitor for the applicant. 2. I order that the time provided for in subsec439B(2) for the adjournment of a meeting convened under s439A be extended to a date to be determined by the applicant, being a date on or before 31 July 1995 and of which the applicant is given not less than three business days notice to the creditors of the respondent. 3. I order that leave be reserved to any person claiming to be interested, including any creditor of the second respondent, Black Hill Minerals Ltd in administration and the Australian Securities Commission to make such application as he, she or it may be advised, to vary these orders upon 24 hours notice to the applicant. 4. I order that the costs of the applicant be paid out of the proceeds of administration of the company. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Hill.