MYT ENGINEERING PTY LTD and ORS v MULCON PTY LTD [No 2] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY JA 4 December 1997 [1997] NSWCA 215 Handley JA REASONS The Court published its reasons for judgment and by majority pronounced orders dismissing this appeal on 6 August 1997. The majority, Powell JA and myself, held that the Deed of Arrangement between the company and its creditors had not been executed by the company within 21 days of the resolution of the meeting of creditors as required by s444B(2) of the Corporations Law, and the Court should not make a validating order under s445G. Powell JA also held that the power of the Court under s447A to "make-such order as it thinks appropriate about how this Part is to operate in relation to a particular company" only authorised the making of orders to operate in the future. Dunford AJA reached the opposite conclusion and would have made a validating order under that section, holding that the trial Judge's exercise of discretion against making such an order had miscarried. I expressed no view on these issues. The appellant filed an application for special leave to appeal to the High Court, and by notice of motion dated 26 September, applied for the hearing of the appeal to be reopened on the s447A issues. The evident purpose of the motion was to obtain my reasons for refusing the appellant relief under s447A. This did not require the participation of the other members of the Court, and counsel agreed that I could deliver supplementary reasons without hearing further argument from the parties. I agreed to this course. The proper scope of the power conferred by s447A is a matter of importance in the operation of Pt5.3A of the Corporations Law dealing with the voluntary administration of corporations. In Cawthorn v Keira Constructions Pty Ltd (1994) 33 NSWLR 607, Young J held that the section authorised the making of an order having retrospective effect. Such orders have also been made in other cases. The absence of any discussion of this and associated issues in my reasons, although the result of a slip on my part, reflected a view that the power, if it existed, should not be exercised in this case. It did not reflect my silent agreement with the views of either of the other Judges on the scope of the power. The trial Judge said on this issue: "Tt was also contended that an order to the same effect might be made under s447A but in my opinion that is not appropriate. The plaintiff did not support the decision of the creditors to require the Deed of Company Arrangement and it is clear from the evidence that the plaintiff did not vote on the question whether there should be a Deed of Company Arrangement. The steps taken towards resolving to enter into the deed and executing the deed were no more than mere gestures, the plaintiff has clearly established their lack of effect, and it is not appropriate for the Court to make any special order conferring effect on them". 2 UNREPORTED JUDGMENTS With respect to the contrary view, I can discern no error of fact or principle in this reasoning, and I was not persuaded that the Judge's exercise of discretion had miscarried. S445B(2)(a) required the company to execute the deed on or before 19 October 1994. In my original reasons I expressed the view that its failure to do so within that period automatically terminated the voluntary administration and placed the company into liquidation. The attempt by the directors to execute the deed on 1 June 1995 was necessarily ineffective, since their powers ceased when the company went into voluntary liquidation. The proceedings heard and determined by Bryson J were commenced by the respondent by summons on 31 October 1995. The appellant did not file a cross-claim seeking relief under s447A, but it appears made an oral application at the hearing in June 1996. In my view, this was not a proper case for the exercise, at that late stage, of any power the Court might have to make a retrospective order under the section. I therefore confirm the orders supported by me on 6 August 1997 and dismiss the motion. There will be no order as to costs.