National Australia Bank v Premier Pork [1999] NSWSC 824

New South Wales Supreme Court CITATION : National Australia Bank v Premier Pork [1999] NSWSC 824 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 1929 of 1999 HEARING DATE(S) : 26 and 27 July 1999 JUDGMENT DATE : 27 July 1999

PARTIES : National Australia Limited (Plaintiff) Premier Pork Pty. Limited (Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr. S. Reeves (Plaintiff) Mr. J. Johnson (Defendant) SOLICITORS : Mallesons Stephen Jaques (Plaintiff) Garrett Walmsley Madgwick (Defendant) CATCHWORDS : CORPORATIONS - management and administration - winding up - order sought pursuant to s447A of the Corporations Law for extension of the convening period for the calling of a meeting of creditors - no sound basis for such an extension - administrator to take proper care - deficient report to creditors - order made for winding up of company ACTS CITED : Corporations Law ss439A(b), 447A and 1322 CASES CITED : Re: Ricon Constructions Pty. Limited (1997) 26 ACSR 55 DECISION : See paragraphs 15 to 18

1 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

TUESDAY 27 JULY 1999

1929/99 NATIONAL AUSTRALIA BANK LIMITED v PREMIER PORK PTY. LIMITED

JUDGMENT 1 HIS HONOUR: In this matter the defendant company, Premier Pork Pty. Limited (Premier Pork), which is under administration, seeks an order that the convening period for the calling of the second meeting of creditors in the administration be extended by one day. 2 The basic facts are that Mr. Andrew Wily was appointed administrator of Premier Pork on 30 June 1999. The respondent, National Australia Bank Limited (NAB) had filed a summons for the winding up of Premier Pork on 8 April 1999 founded on a statutory demand served on 13 December 1998 claiming a debt of $1,066,703.37 on an overdraft account. That summons was stood over to 26 July 1999 for the hearing of the notice of motion and was further stood over yesterday until today. 3 There were two supporting creditors, both seeking that a winding up order be made. In other words, those supporting creditors did not support the motion before the Court. 4 The first creditors meeting was held on 6 July 1999. At that meeting the creditors present (it appears all by proxy) resolved not to appoint a committee of creditors. Those creditors who voted against the appointment were represented by proxy by either Mr. Al Constantinidis or his wife Maria Constantinidis. The administrator on 20 July, sent a letter to creditors convening the second meeting of creditors on 28 July 1999. That was one day outside five days after the convening period. The notice of motion, therefore, seeks an order extending the convening period by one day. 5 As the application was not made within the convening period there is no power under s439A(b) of the Corporations Law to extend the time. The application is made under s447A of the Corporations Law, or perhaps, but this was not expressly stated, under s1322. While I might have had some doubts about the matter in considering the matter afresh without the benefit of authority it was held by Santow J in Re: Ricon Constructions Pty Limited (1997) 26 ACSR 55 that s447A gave power to extend time in circumstances such as this. In that case he gave a careful consideration to earlier decisions. I intend to follow his decision. I was not asked to do otherwise than to note that the respondent bank argued that there was no such power so as to preserve its rights on appeal if necessary. 6 While there is power under s447A to make an order on application of a company, I do not consider such a power can be exercised so as to extend the convening period unless the application is made by the administrator. It would seem to me that on that technical basis the motion must fail, although were it not for my conclusion on more important grounds, it would probably have been proper to have made an order adding the administrator as an applicant to the motion as this point had not been argued. Even that would perhaps require some further consideration as one has less sympathy with a last minute application to the court to exercise its discretion in favour of an incorrect applicant. 7 I turn to more substantial matters. The applicant says that the Court should be quick to assist in the case of a procedural mistake. That is partly true, but the periods fixed by law for the calling of meetings during an administration ought not to be regarded as guidelines only. Administrators must be expected to take proper care in the exercise of their functions. Proper care includes an ability to count. The respondent bank says that in the exercise of my discretion I should refuse to make the orders. 8 It says: