CATCHWORDS Practice and procedure - motion seeking leave to amend application - application to amend made after the conclusion of the hearing - judgment reserved - whether the amendment sought is too much too late - desirability of ensuring that public resources are used efficiently - proposed amendments raise difficult questions and would require substantial additional argument Corporations - orders sought to vary deed of company arrangement - whether amendments would result in a deed substantially different from that voted for by creditors - relevance thereof - extent and nature of power in s 447A of the Law Corporations Law s 447A IN THE MATTER OF KISORO PTY LTD (ADMINISTRATOR APPOINTED) (A.C.N. 002 202 084) WILLIAM JAMES HAMILTON AND PINO FIORENTINO in their capacity as joint administrators of KISORO PTY LIMITED (ADMINISTRATOR APPOINTED) v NATIONAL AUSTRALIA BANK LIMITED & ANOR No. NG 3095 of 1996 CORAM: Lehane J PLACE: Sydney DATE: 23 April 1996 IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) No. NG 3095 of 1996 IN THE MATTER OF KISORO PTY LTD (ADMINISTRATOR APPOINTED) (A.C.N. 002 202 084) BETWEEN: WILLIAM JAMES HAMILTON AND PINO FIORENTINO in their capacity as joint administrators of KISORO PTY LIMITED (ADMINISTRATOR APPOINTED) (A.C.N. 002 202 084) Applicants AND: NATIONAL AUSTRALIA BANK LIMITED (A.C.N. 004 044 937) First Respondent IVANS BUTCHERY (NSW) PTY LIMITED (A.C.N. 070 093 202) Second Respondent CORAM: Lehane J PLACE: Sydney DATE: 23 April 1996 MINUTE OF ORDERS THE COURT ORDERS: 1. THAT the motion to amend the application is dismissed. 2. THAT costs are reserved. 3. THAT, under s 444B(2) of the Corporations Law, the period within which the deed of company arrangement is to be executed is the period expiring at 5:00 pm on 10 May 1996. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) GENERAL DIVISION ) No. NG 3095 of 1996 IN THE MATTER OF KISORO PTY LTD (ADMINISTRATOR APPOINTED) (A.C.N. 002 202 084) BETWEEN: WILLIAM JAMES HAMILTON AND PINO FIORENTINO in their capacity as joint administrators of KISORO PTY LIMITED (ADMINISTRATOR APPOINTED) (A.C.N. 002 202 084) Applicants AND: NATIONAL AUSTRALIA BANK LIMITED (A.C.N. 004 044 937) First Respondent IVANS BUTCHERY (NSW) PTY LIMITED (A.C.N. 070 093 202) Second Respondent CORAM: Lehane J PLACE: Sydney DATE: 23 April 1996 EXTEMPORE REASONS FOR JUDGMENT LEHANE J: The applicants seek leave to amend the application by adding two further, alternative, orders. They are orders, first, that the deed of company arrangement be varied in accordance with a document annexed to the amended application, and secondly, that the deed be varied in such manner as the Court thinks fit so as adequately to protect any interest the first respondent may have in property of the company as the second registered charge holder. The application to amend has been made after the conclusion of the hearing of the matter and therefore, of course, at a time when judgment was already reserved. It is vigorously opposed by the first respondent on a number of grounds. It is unnecessary for me to deal with all of the matters canvassed in argument this morning: in my view the amendment sought can fairly be characterised it, as Mr Thomson sought to characterise it, as too much too late. I have in mind a number of particular factors when I say that. One is the desirability of ensuring that public resources are used efficiently, a matter referred to in several authorities to which my attention was drawn. Another is that the suggested amendments would, if made, result in a deed which, while it might be possible to characterise it as no less advantageous to creditors than the deed as it stands, is nevertheless a deed substantially different from that in favour of which the creditors voted. That is important in at least two ways: one is simply as a matter going to the Court's discretion; another is that it may be relevant to the extent of the Court's power under section 447A of the Corporations Law to make an order the effect of which is to amend a proposed deed which has already been approved by creditors. As to that latter matter, I accept that there are authorities, including authorities in this Court, to the effect that the power under that section does extend to ordering an amendment of a deed or proposed deed. It seems to me, however, that there may be a considerable difference between, on the one hand, an amendment which preserves in substance the deed which the creditors have approved and is made merely as a necessary consequence of other substantive orders which the Court might make and, on the other hand, an amendment which introduces into a deed the possibility of an administration of a significantly different character. That brings me to a further matter. It seems to me clear that the proposed amendments raise a number of quite difficult issues in statutory territory which, to use a phrase I have used previously in these proceedings, is largely uncharted and may, therefore, require for their resolution substantial additional argument. Other issues were canvassed this morning about which that comment might equally be made. For example, Mr Thomson suggested that there might be a considerable difference between the position of a liquidator, as it appears to emerge from the authorities, seeking to compel a mortgagee of a company's property to account for its activities as mortgagee in possession and, on the other hand, the position, so far as I know untouched by authority, of the administrator of a deed of company arrangement seeking similar relief. In short, it may be possible - and certainly I am not prepared to say that it is impossible - to structure a deed substantially as proposed which in particular circumstances might be thought to give secured creditors, such as the Bank in this case, adequate protection. To seek at this stage, however, to introduce provisions for such a scheme into this deed does, I think, inevitably give rise to issues which would need to be considered and argued; and at a time when the hearing has already come to an end and judgment has been reserved, that, it seems to me, is an inappropriate course for the Court to sanction. Accordingly, it is unnecessary for me to deal with three particular matters which formed a significant part of Mr Thomson's argument. One is a number of considerations from which he sought to draw the conclusion that legally the proposed amended deed would not work. The second is a series of arguments from which he sought to draw the conclusion that commercially it would not work. The third concerns comments which Mr Thomson made, reflecting evidence given on behalf of the first respondent, as to the independence or otherwise of Mr Hamilton as administrator. I should in any event say no more about that third matter now, because it arose during the hearing and therefore is relevant to conclusions I may reach in the judgment which is at present reserved. It follows that the motion to amend the application must be dismissed. The question of costs may stand over to be dealt with at the time I deliver judgment. I order under s 444B(2) of the Corporations Law that the period within which the deed of company arrangement is to be executed is the period expiring at 5.00 pm on 10 May 1996. I certify that this and the preceding 3 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane. Associate: Dated: 13 May 1996 Heard: 23 April 1996 Place: Sydney Decision: 23 April 1996 Appearances: Mr J T Svehla of counsel appeared for the applicants. Mr J E Thomson of counsel instructed by Dibbs Crowthers & Osborne appeared for the first respondent.