FEDERAL COURT OF AUSTRALIA National Investment Institute Pty Ltd (Administrator Appointed) (ACN 098 189 863); Kaye v National Investment Institute Pty Ltd [2004] FCA 100 CORPORATIONS – administration – proposed deed of company arrangement – application for order to extend the period, fixed by s 439B(2) of the Corporations Act 2001 (Cth) ("the Act"), within which to hold meeting of creditors – where application brought by the proposer of the deed of company arrangement – whether grounds sufficient to warrant exercise of power under s 447A or s 1322(4)(d) of the Act by the Court. Corporations Act 2001: ss 439B(2) and 447A Pt 5.3A Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607, referred to Re LOCM Pty Ltd (Administrators Appointed) (1997) 79 FCR 35, followed Re Taylor (1995) 16 ACSR 774, followed IN THE MATTER OF NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) HENRY KAYE v NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) & ANOR V 128 of 2004 GOLDBERG J 16 FEBRUARY 2004 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 128 of 2004 IN THE MATTER OF NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) BETWEEN: HENRY KAYE Plaintiff AND: NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) First Defendant ANDREW STEWARD REED HEWITT (in his capacity as administrator of NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) Second Defendant JUDGE: GOLDBERG J DATE OF ORDER: 16 FEBRUARY 2004 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 128 of 2004 IN THE MATTER OF NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) BETWEEN: HENRY KAYE Plaintiff AND: NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) First Defendant ANDREW STEWARD REED HEWITT (in his capacity as administrator of NATIONAL INVESTMENT INSTITUTE PTY LTD (ADMINISTRATOR APPOINTED) (ACN 098 189 863) Second Defendant JUDGE: GOLDBERG J DATE: 16 FEBRUARY 2004 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The plaintiff, Henry Kaye, seeks the following order: "Pursuant to s 447A and/or s 1322(4)(d) of the Corporations Act 2001, an order that the period fixed by s 439B(2) of the Corporations Act 2001, within which the meeting of creditors of National Investment Institute Pty Ltd (AdministratorAppointed)ACN 098 189 863whichconvened on 22 December 2003 be extended from 18 February 2004 to a date after 12 March 2004." In the course of submissions, counsel for Mr Kaye indicated that the date in respect of which the extension was sought was 20 April 2004. 2 National Investment Institute Pty Ltd (Administrator Appointed) ("the company") was placed in voluntary administration pursuant to Pt 5.3A of the Corporations Act 2001 (Cth) ("the Act") on 25 November 2003. On that day the company appointed Andrew Stewart Reed Hewitt ("the administrator") as administrator of the company pursuant to s 436A(1) of the Act. The company is one of a group of companies of which the holding company is Provident Group Pty Ltd. Mr Kaye owns all the shares in that company. Another company in the group is Property Corporate Services Pty Ltd which provides administrative, corporate and financial services to other companies in the Group. 3 The first meeting of creditors of the company was held pursuant to s 436E of the Act on 2 December 2003. A committee of creditors was appointed on that day. There are approximately 3,500 creditors of the company. 4 The second meeting of creditors, convened pursuant to s 439A(1) of the Act, was held on 22 December 2003 and was adjourned to 19 January 2004. On that day it was further adjourned to 18 February 2004. 5 The Australian Securities and Investments Commission ("the Commission") filed an application in the Court on 2 December 2003 seeking orders including the appointment of a receiver to the property of Mr Kaye and the property of Property Corporate Services Pty Ltd. That application came before Merkel J on 3, 4, 15 and 23 December 2003. Orders were made and undertakings were given by Mr Kaye and Property Corporate Services Pty Ltd in relation to dealings with property and the use of Mr Kaye's passport and the proceeding was adjourned to 29 January 2004. On 30 January 2004 the application was further adjourned to 12 March 2004. Undertakings given on behalf of Mr Kaye and Property Corporate Services Pty Ltd were extended to 12 March 2004. 6 The application and supporting material in this proceeding has been served upon the administrator, the Commission and members of the committee of creditors. There was no appearance by or on behalf of any member of the committee of creditors. The administrator appeared through his solicitor and said that he neither consented to or opposed the application and would abide the order of the Court. The Commission opposed any order adjourning the meeting but took the view that whether or not the meeting should be adjourned was a matter for the creditors. Ultimately, the Commission adopted the position that it did not make any submission as to whether I should exercise power under s 447A or s 1322(4)(d) of the Act to extend the period of sixty days provided for in s 439B(2), although it submitted that there were reasons why such an order should not be made. 7 The application for the extension of time within which the creditors' meeting may be adjourned was supported by an affidavit of Mr Kaye who is the sole director of the company. He also relied upon an affidavit sworn by him in proceeding No V115 of 2004 in which he is applicant and Ms Denise Brailey is respondent ("the injunction proceeding"). That proceeding, filed on 9 February 2004, has been brought by Mr Kaye against Ms Brailey claiming that she has made misleading and deceptive representations in a letter dated 10 January 2004 sent to creditors of the company in which she has solicited proxies from them in respect of their votes at the meeting to be held on 18 February 2004. 8 Mr Kaye raised the following examples of statements by Ms Brailey which he claimed were false or misleading: "● [Over the past few weeks] you are surely aware that you have been deceived by Mr Kaye; · I am certain you have been deceived once again; · Henry has milked every available asset and stashed those funds elsewhere; · It [the proposed deed of company arrangement] tells you that Kaye is giving his 'personal guarantees …' His guarantees have been proved to be worthless; · The only way to stop Henry Kaye continuing to spruik for business under other company names, is to liquidate NII; · In order to ensure that Henry Kaye is brought to a stop and his 'other' real assets frozen [implying that Mr Kaye has other assets not disclosed to the administrator]." Mr Kaye denied the truth of these statements. There were other statements in the letter alleged in the statement of claim to be false and misleading. These were: · the administrator had misled the creditors; · the administrator's purpose in preparing and circulating the second report to creditors was to make the proposed deed of company arrangement "look tempting"; · there is little equity to be distributed to the creditors under the proposed deed of company arrangement, even if the properties held by the Provident Group were sold over the next three years; · the forecasting by the administrator was "hopelessly flawed"; · the only persons to gain from the proposed deed of company arrangement would be the administrator, the applicant and "co‑developers" of the applicant; · the figures reported by the administrator and underlying the administrator's recommendations to the creditors were "unsubstantiated"; · the administrator's report that the proposed deed of company arrangement enjoyed the support of committee of creditors was "false"; and · the creditors' prospects of recovery in a liquidation of NII are similar to those under the proposed deed of company arrangement. Mr Kaye became aware of the existence of this letter shortly after 10 January 2004. 9 Ms Brailey did not specifically address a number of the statements complained of by Mr Kaye in the affidavit she filed. However she did explain her concerns about the administrator's reports. In particular she referred to the absence of valuations as at 16 December 2003 of the "orphan properties" (being those properties outside the control of the company) the quantification of the equity in those properties and the nature of the developments comprising those properties. There is an issue as to which report of the administrator was available to Ms Brailey at the time she perused it, but nothing turns on this issue for present purposes. I should also note that on 13 January 2004 the administrator wrote to creditors in response to Ms Brailey's letter, as did Mr Kaye on 10 February 2004. 10 In the injunction proceeding, Mr Kaye has sought an interlocutory injunction restraining Ms Brailey from casting the proxies against any resolution to adjourn the meeting. Initially Mr Kaye sought interlocutory relief restraining Ms Brailey until the hearing and determination of the proceeding from: · communicating to any creditor of the company any statement or opinion concerning the administrator's reports or the proposal that the company execute a deed of company arrangement; · voting as a proxy of any creditor at the meeting of the company to be held on 18 February 2004; · soliciting for proxies for the purposes of voting at the meeting. Mr Kaye also sought an interlocutory order requiring Ms Brailey to write to the creditors to whom she had sent her letter of 10 January 2004 stating that when she sent the letter she had no basis for her statements that the administrator had misled the creditors, that the figures supplied by the administrator as to the likely return to creditors under the proposed deed of company arrangement were unsubstantiated and that the creditors stood a similar chance of recovery to that under the proposed deed by voting to liquidate the company. 11 When counsel for Mr Kaye commenced his submissions he limited the plaintiff's application for interlocutory relief against Ms Brailey (as set out in written submissions filed that morning) to an injunction restraining her from casting any proxy votes at a meeting of creditors of the company "for any resolution other than a resolution adjourning the creditors' meeting". Counsel made it clear that that relief was sought in lieu of the interlocutory relief set out in the initiating application because it appeared that the relief initially sought was tantamount to final relief. That view was well‑founded. 12 After the luncheon adjournment and at the end of the primary submissions for Mr Kaye, his counsel altered and confined the interlocutory relief even further and more narrowly, by limiting it to an interlocutory injunction restraining Ms Brailey from casting any proxy votes at a meeting of creditors of the company "against any resolution adjourning the creditors' meeting". 13 The grounds on which Mr Kaye seeks to give the creditors the opportunity to adjourn the creditors' meeting to be held on 18 February 2004 can be explained by the following background. 14 Mr Kaye prepared and propounded a draft deed of company arrangement which was received by the administrator on 12 December 2003. In short, the proposed deed provided for the establishment of a pool of funds to which a contribution would be made by Property Corporate Services Pty Ltd. Property Corporate Services Pty Ltd was to provide security to the company over its interest in what have been called "orphan properties". In his report to creditors dated 15 December 2003, the administrator recommended creditors accept the proposed deed of company arrangement. The administrator prepared and sent to creditors a supplementary report dated 12 January 2004. At that stage the creditors' meeting which had been held on 22 December 2003 had been adjourned to 19 January 2004. 15 The deed which carried the administrator's recommendation was dated 9 January 2004. Clause 3.18.1 of that deed provided that the proposal in the deed was conditional upon, inter alia: · a Court appointed receiver not being appointed to Property Corporate Services Pty Ltd; · undertakings given by Mr Kaye to the Court in proceeding No V3273 of 2003 being discharged; · the Commission consenting to orders discontinuing its proceedings with consequential orders. 16 On 16 January 2004 Finkelstein J, on the application of the Commission, granted an injunction restraining the administrator from putting to the creditors at the meeting any resolution other than one to adjourn the meeting to 18 February 2004. The result was that the creditors voted to adjourn the meeting to 18 February 2004. Finkelstein J made this order on the basis that there was inadequate information in a number of respects in the deed and the report and that further information was required to be given to creditors. 17 Consequently the administrator prepared and sent to creditors a further supplementary report dated 9 February 2004. There are a number of significant points to note about this report: · It was more comprehensive and contained more detailed information than previous reports; · the administrator noted that the deed of company arrangement proposed by Mr Kaye was extremely complex but that he, (the administrator) had sought to provide creditors with a detailed explanation of the proposal including all the key elements and the likely impact on creditors, the sole director of the company Mr Kaye, and the other companies in the Kaye Group; · the proposal provided for a contribution from Property Corporate Services Pty Ltd; · the administrator noted that the proposal was conditional upon a number of matters, including a Court appointed receiver not being appointed to Property Corporate Services Pty Ltd and the Commission agreeing to discontinue proceedings against Mr Kaye and the Group of companies; · the administrator noted that the obligations of Mr Kaye and related parties under the deed would be completed upon the administrator receiving a total of $20 million or the higher of $5 million and a percentage of realisations of Property Corporate Services Pty Ltd's properties and the orphan properties (whichever was the higher). 18 In Section 12.1 of his report the administrator recommended that it was in the best financial interest of the creditors to accept the proposed deed for the reasons he had outlined in his previous reports and in Section 12.1 of his current report. The administrator set out in some detail the key factors that supported his recommendation and the key factors given up under the proposed deed that might be available in a liquidation. 19 Importantly, and relevantly, the administrator noted that he had received a letter from the Commission on 6 February 2004 outlining its comments in respect of the draft of the report he had provided the Commission. The administrator set out a number of passages from the Commission's letter and his response to those matters raised in it. In particular, the administrator noted that the final matter raised by the Commission related to one of the conditions of the proposed deed. The Commission had said: "ASIC notes the DOCA [deed of company arrangement] proposal is conditional on ASIC agreeing to discontinue legal proceedings it has commenced against Henry Kaye and PCS. ASIC has commenced proceedings against PCS [Property Corporate Services Pty Ltd] seeking the appointment of a receiver and manager or a liquidator to PCS by the Court. Given ASIC's concerns about the viability of PCS, and based on presently available information, ASIC is unlikely to continue this action." The administrator noted that this issue was significant because if creditors accepted the deed and this condition was not met it might mean that the deed may be unable to be executed or completed. The administrator then informed creditors that Mr Kaye was proposing to remove the condition precedent and replace it with a further amendment which was described in the course of the hearing as a condition subsequent. The administrator's report stated: "Kaye's legal advisers have confirmed Kaye will amend the draft DOCA proposal removing this condition and accordingly this issue is no longer a condition precedent in the DOCA proposal. As a consequence of this Kaye has advised there will be a further amendment to the proposal whereby if a Receiver or a Liquidator is appointed to PCS on the application of ASIC, the security provided to the Deed Administrator over the Orphan Properties will be automatically released." 20 The following summary concluded the section of the report on the administrator's recommendation: "After consideration of all matters I have reviewed during the course of my investigations, listening to the thoughts of creditors and considering the matters raised by ASIC, I consider that it is in the creditors' best financial interest to accept the proposed DOCA for the reasons outlined in my previous reports and in Section 12.1 of this report." 21 The report, excluding appendices and a copy of the deed of company arrangement comprised 56 pages. 22 Mr Kaye pointed out in his affidavit that the only significant change in the proposed deed of company arrangement considered in the administrator's 9 February 2004 report, which was not considered in the administrator's report of 12 January 2004, was that he has informed the administrator that he would dispense with the condition precedent and conditions 3.18.1.3, 3.18.1.4 and 3.18.1.5. Those provisions made the proposal in the deed conditional upon: · a Court appointed receiver not being appointed to Property Corporate Services Pty Ltd; · the undertakings given to the Federal Court by Mr Kaye and Property Corporate Services Pty Ltd in proceeding No V3273 of 2003, namely the application by the Commission to appoint a receiver to Mr Kaye's property and to the property of Property Corporate Services Pty Ltd, being discharged; · the Commission consenting to orders discontinuing the two proceedings it has brought in the Federal Court, namely the proceeding to appoint receivers and proceeding No V3217 of 2003 relating to other complaints by the Commission with a right of reinstatement should the deed not complete due to a breach, with no order as to costs. 23 However, Mr Kaye added a proviso to that dispensation, namely that if a receiver or liquidator was appointed to Property Corporate Services Pty Ltd on the application of the Commission, the security provided to the deed administrator over the orphan properties would be automatically released. 24 Mr Kaye expressed the following belief in his affidavit in support of the application for the enlargement of the time within which the creditors' meeting may be adjourned: "On reflection, I now believe that the interests of creditors of NII and of myself would be better served by the meeting being adjourned to a date after the hearing and determination of ASIC's said application. (a) If PCS successfully resists ASIC's application for the appointment of a receiver, neither the condition precedent nor the indicated change will be necessary; (b) If a receiver be appointed to PCS, the receiver's attitude to compliance with the proposed DOCA will be crucial. (Although the proposed DOCA would operate to reduce significantly the debt owed by PCS to NII, it would also oblige PCS to carry out an ordinary realisation of its assets)." 25 This view was expanded in oral submissions in which Mr Kaye submitted that it would be in the best interests of the creditors if, before the meeting was finalised: · the question of final relief in the injunction proceeding was determined so that everyone knew the final position in relation to the exercise of the proxies held by Ms Brailey; · the action taken by the Commission in its receivership application before Merkel J was known. 26 To the extent to which Mr Kaye is relying on his interests as the propounder of the deed for the purpose of the application under s 447A and s 1322(4)(d) of the Act, I reject that interest as a proper basis for exercising the power. In my opinion, the power should be exercised if it is in the interests of the creditors of the company. The interests of creditors and the interests of Mr Kaye are quite different and I do not consider that any account should be taken of the interests of the propounder of the deed in exercising the power sought to be exercised. Although the application has been made pursuant to s 447A and s 1322(4)(d) of the Act, I consider it should be treated as being made in a context where it is necessary to vary a time period found in Pt 5.3A of the Act, namely in s 439B(2). Accordingly, I consider the matter should be approached by asking whether the power under s 447A should be exercised. No different considerations should arise if the matter is approached by reference to s 1322(4)(d). 27 The nature of an administration under Pt 5.3A of the Act is that a relatively expeditious decision is to be made by the creditors as to whether there is a basis for maximising the chances of the company continuing to operate or, if that is not possible, having the company administered in a way which brings about a better return for creditors by having the company continue under administration than would result if the company is put into liquidation: cf s 435A of the Act. 28 It is inherent in the scheme in Pt 5.3A that there will frequently be a situation where there are commercial alternatives available and where decisions have to be made between competing considerations and competing outcomes. At the present time, the administrator is in a position where he is prepared, after consideration of all the matters referred to in his various reports, to make a recommendation that the creditors resolve that the company execute a deed of company arrangement. 29 It is necessary to consider whether any of the grounds advanced on behalf of Mr Kaye for the extension of the period within which the meeting may be adjourned, warrant the exercise of power under s 447A to extend the time within which a meeting may be adjourned. It is quite insufficient to say simply that it is in the interests of creditors. Of course, Mr Kaye goes further and I turn to consider the grounds raised on his behalf. 30 Before doing so I note that it is tempting to resolve the matter by saying "leave it to the creditors". That is, leave it to the creditors to decide whether or not they think the meeting should be adjourned on any of the grounds raised by Mr Kaye or on any other ground. The scheme of Pt 5.3A is to put the future of a company under administration in the hands of its creditors. If they want to adjourn the meeting for longer than the sixty day period provided in s 439B(2) then why not facilitate that result, by the Court creating the opportunity for them to do so? The answer is that such an extension of the sixty day period should not be automatic, even if time is running out and the creditors are faced with a conflict or difficult alternative courses or outcomes. The statutory scheme provides for the sixty day period and good cause must be shown before a court extends it. Grounds or reasons must be established and evaluated by reference to the interests of creditors. 31 At the present time there is no evidence that any creditor wishes to move a motion that the meeting adjourn. The administrator does not propose to do so. Mr Kaye does not say in his affidavits that he proposes to move such a motion although such an intention might be inferred from his counsel's submissions. 32 There is no doubt that I have the power to extend the sixty day period specified in s 439B(2): Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607; Re LOCM Pty Ltd (Administrators Appointed) (1997) 79 FCR 35. However, in order for such an order to be made there must be a proper ground which supports the application. 33 I am troubled by the fact that the applicant for the extension of the time for the holding of the meeting is the proponent of the deed of company arrangement. No creditor has indicated that he, she or it is contemplating such an adjournment. Neither does the administrator make or give any indication that he wishes there to be an adjournment. The administrator has now prepared and made available to creditors three reports each of which is more comprehensive than the last in relation to the matters the subject of the administration. 34 The first ground advanced by Mr Kaye was that the attitude of the Commission had changed. He submitted that when the matter of the appointment of a receiver came before Merkel J, on at least two occasions counsel representing the Commission advised Merkel J that if the proposed deed of company arrangement was agreed to by the company's creditors "ASIC would be unlikely to proceed with its application in Federal Court proceeding No V3273 of 2003". In that proceeding, in addition to other relief, the Commission is seeking the appointment of a receiver to Mr Kaye's property and a receiver to the property of Property Corporate Services Pty Ltd. The proceeding is fixed for hearing before Merkel J on 12 March 2004. The plaintiff submitted that in the letter dated 6 February 2004 from the Commission to the administrator, part of which is extracted in Section 12.2 of the administrator's report to creditors dated 9 February 2004, the Commission said that: "Given ASIC's concerns about the viability of PCS, and based on presently available information, ASIC is unlikely to discontinue this action". Mr Kaye contended that this demonstrated a change in the position of the Commission toward the appointment of a receiver in the event that a deed of company arrangement was entered into. 35 Mr Kaye said that it was the realisation on 6 February 2004, when he was advised of the contents of the Commission's letter, saying that the Commission's position in relation to the continuance of proceeding No V3273 of 2003 in the Federal Court had changed in a way in which he described as "dramatically", that prompted him to specify the proviso referred to in par [23] above. 36 What is claimed to be a dramatic change in the position of the Commission cannot be sustained. Unfortunately there was no transcript available for the hearings before Merkel J. Counsel for the Commission contended that what had been said was not so much that the Commission was unlikely to proceed, but rather that it reserved its position. However, in the circumstances of this case, the distinction between those two expressions is a distinction without a difference. The Commission did not commit itself to any particular course of conduct in the event of a meeting of creditors resolving that the company execute a deed of company arrangement or a deed being executed. Even if the Commission did say that if the deed was entered into it was unlikely that it would continue with its application for the appointment of receivers, it was always open to it to do otherwise, particularly in a situation where the development of the administration of the company and the raising of issues was, and is, in an ongoing state. 37 Mr Kaye may believe that there has been a change in the Commission's position but that belief does not warrant an exercise of power under s 447A in relation to s 439B(2). Any perceived or purported change in the Commission's position may result in Mr Kaye altering his position as to the terms upon which he is prepared to have the company enter into the deed, but that does not mean that any further time is needed. Nor does it mean that it is desirable that the receivership situation be known before there is a final decision to enter into the deed of company arrangement. That matter involves a financial, commercial and practical decision for the creditors. They are well aware of the possible outcomes of any vote at the meeting on 18 February 2004. If they resolve that the company go into liquidation, that is the end of the matter. If they resolve that the company execute a deed of company arrangement they know a situation may arise, if the Commission proceeds with its application for the appointment of a receiver and the Court orders the appointment of a receiver, that the assets available to the fund to be built up under the deed will be diminished. The creditors are also aware that if the application for the appointment of a receiver is dismissed, or if the Commission does not proceed with that application, then there will be a greater fund available for them than would otherwise be if a receiver of Property Corporate Services Pty Ltd was appointed. 38 Further, any suggestion or proposal that the creditors' meeting be adjourned until the final conclusion of the receivership application presently to be heard on 12 March 2004, is open‑ended, having regard to the nature of the proceeding before Merkel J and the possibility of appeals after his decision is handed down. The open‑ended nature of the period of time involved militates against an order that there be an opportunity for the creditors to extend the time for the adjournment of the meeting. 39 The second ground advanced for the order sought to be made to enable the creditors to adjourn the meeting beyond 18 February 2004 was based upon what was said to be the inappropriateness of Ms Brailey's obtaining and seeking to use proxies from creditors on the basis of the material she had. This submission is based on the letter dated 10 January 2004 which Ms Brailey sent to the creditors of the company, referred to in par [7] above, in which she set out a number of statements about the company, Mr Kaye and the administrator. In the letter Ms Brailey invited the recipients of the letter to appoint her as a proxy to vote on their behalf. 40 Mr Kaye submitted that there needs to be a resolution of the issues raised in the injunction proceeding whether Ms Brailey in her letter made statements which were misleading and likely to mislead creditors into giving her proxies on the basis of false information. The difficulty with that ground is that the matter before the Court at the present time in the injunction proceeding is an application for interlocutory relief. If an order was made granting an injunction restraining the exercise of the proxies on any basis, the matter could not come on for final hearing for some time because of the need for the matter to be prepared, evidence to be filed, discovery obtained and other interlocutory steps taken. Accordingly, the period of time for the resolution of this issue would be open‑ended and would extend the period for the final decision by creditors as to whether or not the company should enter into a deed of company arrangement or go into liquidation to an unreasonable degree or amount of time. 41 This second ground gives rise to further considerations. Counsel for Mr Kaye limited substantially the form of interlocutory relief sought. Recognising the difficulties of obtaining interlocutory relief which was in effect tantamount to final relief, the injunction sought rather late in the hearing was to restrain Ms Brailey from casting the proxies against any resolution for adjournment of the meeting. However, the limitation of the nature of the interlocutory relief sought in this way does not eliminate the proposition, or vice, that the relief is tantamount to final relief. If the creditors were in a position to adjourn the meeting further as a result of the exercise of the power by the Court under s 447A in relation to the time period specified in s 439B(2) of the Act, any restraint on Ms Brailey voting on the resolution for adjournment would be final relief in its terms. If the motion was passed and the adjournment occurred, Ms Brailey could never retrieve the position at the end of any trial, if her votes or use of the proxies was crucial to the outcome, of having the vote on the adjournment lost and the decision made by the creditors on 18 February 2004 as to the future of the company. 42 In any event, for the reasons given in the injunction proceeding (Kaye v Brailey [2004] FCA 101), I would not have been disposed to grant the relief sought even if I had extended the period within which the meeting could be adjourned under s 439B(2). In particular, I have taken into account the fact that both the administrator and Mr Kaye sent a letter to the creditors in response Ms Brailey's letter of 10 January 2004. The administrator sent a letter to creditors dated 13 January 2004 in which he expressed concern about inaccuracies in the letter, the manner in which it denigrated his report and the suggestion that the creditors disregard his report. In the letter he sent out details of his role. In relation to the values of the assets relevant to the deed, the administrator said: "In this instance the main assets are property related and I have ensured that these properties have been independently valued by a licensed valuer of my choice. In addition, I have obtained confirmation from all mortgage holders as to the balances outstanding. I am confident that my assessment of the equity in the properties is reasonable and my forecasts are not inaccurate or flawed, as asserted by Ms Brailey. My report details my in depth investigations and the basis of calculations provided and I am satisfied as to its accuracy. This is a complex administration however I have endeavoured to fully inform you of all relevant information through my detailed report as to the options available to you. I suggest that you take the time to understand it prior to the creditors meeting on Monday 19 January 2004. Should the complexities of the proposed Deed of Company Arrangement as compared to Liquidation be confusing to you then please do not hesitate to seek clarification by contacting my office prior to that time. I urge you where possible to attend the meeting so that you may experience and participate in any debate first hand and make your own informed decision as to which way you wish to vote. In the event you are confused about the proxy process please contact my office for a full explanation of your rights." 43 Mr Kaye also took advantage of the opportunity to write to the creditors but he delayed in so doing. He became aware of Ms Brailey's letter shortly after 10 January 2004 but only sent a letter to creditors on 10 February 2004. His explanation for the delay is that it was only in recent discussions he had with the administrator (to which he deposed on 9 February 2004) that the administrator told him that Ms Brailey was holding a significant number of proxies from creditors in her favour directing her to vote at her discretion in relation to the proposed deed of company arrangement. 44 However, it must have been readily apparent to Mr Kaye when he saw Ms Brailey's letter shortly after 10 January 2004 that a distinct probability was that Ms Brailey would obtain proxies from creditors which might be used contrary to the interests of Mr Kaye. Mr Kaye tried to arrange a meeting with Ms Brailey to discuss her concerns but he only sought to do so by letter dated 30 January 2004. Ms Brailey did not respond positively to Mr Kaye's suggestion that they meet and on 3 February 2004, Mr Kaye informed Ms Brailey that he proposed to institute legal proceedings to prevent her from acting as a proxy for creditors. 45 Although there have been cases where a much longer period of delay has not been held against an applicant for interlocutory relief, I consider that in the particular circumstances of this case Mr Kaye's delay in instituting the proceeding for interlocutory relief should be a ground of its own for refusing to grant the relief sought, having regard to the effect of the relief, the final nature of the relief if granted and the consequence of the disenfranchisement of the creditors who gave proxies to Ms Brailey on the issue of the adjournment. 46 The ground advanced of the general level of unusual complexity of the administration is not supported by the administrator. Rather, the administrator has increasingly, during the various reports he has given to creditors, expanded on the material which is available to him and has become available to creditors. Mr Kaye submitted that this administration went significantly beyond the norm as evidenced by the increasing bulk of the administrator's reports and the level of detail and information which was occurring on a continuing basis. 47 I am prepared to accept the proposition that the administration of the company is a complex administration. However, I pressed counsel for the plaintiff to supply further and better particulars of the nature of the complexity which was relevant to the exercise of the power sought under s 447A in relation to s 439B(2). Counsel was not in a position to point to any direct evidence beyond pointing to the fact of the various increasingly detailed reports from the administrator. However this means that the creditors have become better informed than they were hitherto. 48 The reports of the administrator have grown in size and in detail and it is apparent from the reports, particularly the latest report of 9 February 2004, that the administrator is of the view that there is sufficient material and information before the creditors to enable them to make an informed decision on the future of the company. I reject the submission by Mr Kaye that there has not been enough time or opportunity for all creditors generally, and not just those creditors who have given proxies to Ms Brailey, to consider truly their financial interests. They have had the benefit of the reports by the administrator, most recently the report of 9 February 2004, the administrator's letter of 13 January 2004, Ms Brailey's letter of 10 January 2004 and Mr Kaye's letter of 10 February 2004. 49 Although grounds have been advanced for the extension of the sixty day period provided for in s 439B(2), I consider those grounds do not justify or warrant such an extension for the reasons to which I have referred. I therefore do not consider that it should be put in to the power of the creditors to extend the meeting beyond the statutory period. I share (as I did in Re LOCM Pty Ltd (Administrators Appointed) (supra) at 44) the concern voiced by Brownie J in Re Taylor (1995) 16 ACSR 774 at 776: "What does trouble me is that I am asked to double the period fixed by the statute, when, in my view, the statute makes it clear that expedition in relation to the resolution of the affairs of a company under administration is an important object. To extend the period of 60 days fixed by s 439B(2) is permissible, but the extension ought not ordinarily to be anything like the further 60 days now sought". As I have already concluded, I do not consider there are any valid grounds to extend the period to the extent sought by Mr Kaye. 50 The application will be dismissed. I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate: Dated: 16 February 2004 Counsel for the plaintiff: G Bigmore SC and P J Cosgrave Solicitor for the plaintiff: Maddocks Counsel for the Australian Securities and Investments Commission: M L Sifris SC Solicitor for the Australian Securities and Investments Commission: Australian Securities and Investments Commission Counsel for the administrator: A Hanger Solicitor for the administrator: Madgwicks Date of Hearing: 13 February 2004 Date of Judgment: 16 February 2004