New South Wales Supreme Court CITATION : Vision Pursuit Pty Ltd v Vision Publishing Pty Ltd [2004] NSWSC 637 HEARING DATE(S) : 13/07/04 JUDGMENT DATE : 13 July 2004 JURISDICTION: Equity Division Corporations List JUDGMENT OF : Young CJ in Eq DECISION : Application under s 440A of the Corporations Act dismissed. CATCHWORDS : CORPORATIONS [176]- Administration- Administrator seeking adjournment of winding up application- Director said to be ill and unable to formulate proposal for creditors for some weeks- Adjournment refused. LEGISLATION CITED : Corporations Act 2001, ss 440A, 459P CASES CITED : Creevey v Deputy Commissioner of Taxation (1996) 19 ACSR 456 Deputy Commissioner of Taxation v Bradley Keeling Management Pty Ltd (2003) 44 ACSR 377 PARTIES : Vision Pursuit Pty Limited (P) Vision Publishing Pty Limited (D) FILE NUMBER(S) : SC 2729/04 COUNSEL : H Stowe (P) Ms D Glass (S) (D) SOLICITORS : Gillis Delaney Brown Lawyers (P) Middletons Lawyers (D) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST YOUNG CJ in EQ Tuesday 13 July 2004 2729/04 – VISION PURSUIT PTY LIMITED v VISION PUBLISHING PTY LTD JUDGMENT 1 HIS HONOUR: On 6 May 2004 the plaintiff filed originating process applying to wind up the defendant company under s 459P of the Corporations Act 2001. That originating process was returnable before Registrar Berecry on 4 June 2004. The court record for that day shows that a director of the company appeared in person (it is more likely than not that was Mr Cooper) and that the learned Registrar recorded that the defendant is to file and serve an affidavit of solvency by 18 June 2004 and the matter was stood over to his list on 25 June 2004. 2 On 22 June 2004 Mr Peter Ngan was appointed as voluntary administrator of the company by resolution of the directors, the only director of the company apparently being Mr B Cooper. 3 On 25 June 2004 the Registrar referred the matter to me. On that occasion Miss D Glass, solicitor, sought an adjournment on the basis that the administrator had only just been appointed. That was opposed by Mr Stowe for the plaintiff. I granted an adjournment for approximately 18 days on the basis of certain conditions being met. I do not know whether they have been met or not. 4 Today I have had filed in court a formal application under s 440A(2) of the Corporations Act by the company under administration and I have been asked by Miss Glass, who appears for the administrator, to adjourn that application, preferably for four weeks. The basis of that application is that Mr Cooper is in such a state of health that he is unable to give the administrator sufficient material for the administrator to put meaningfully before the creditors a proposal which might give the creditors a better result than if the company were to go into liquidation. 5 Mr Stowe again opposes that application and says that the adjournment application of the 440A application should really be treated as if it were a 440A application. Under s 440A(2) of the Corporations Act the Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up. 6 Mr Stowe has very kindly distilled the applicable law in five pages of written submissions, which I must say I will keep by me in future because it is so well digested. Miss Glass agrees that the principles, as digested, correctly set out the authorities. 7 The company, in order to succeed, needs to satisfy the Court that it is not only under administration but also that it is in the interests of the company's creditors that that administration continue rather than be wound up. The authorities show that there must be persuasive evidence of that second matter: see Creevey v Deputy Commissioner of Taxation (1996) 19 ACSR 456. There is not that sort of material available at the moment, Miss Glass says, because of the state of health of Mr Cooper. 8 It is agreed that where there is an application for a short period of adjournment at an early stage of the proceedings the company need not and maybe cannot produce sufficient material to get over a higher test and that comparatively little material might justify an adjournment: see Deputy Commissioner of Taxation v Bradley Keeling Management Pty Ltd (2003) 44 ACSR 377 at 380. However, as Mr Stowe points out, "comparative little material" means at least that there must be some material. 9 In the instant case it does not seem to me that the administrator is able to present sufficient evidence to get over the lesser test, even if he were asking for a short adjournment. This is no reflection on him. It is, on his case, the alleged inability of the director to give him the appropriate information. However, the section does not justify the Court in adjourning the matter in situations such as that at least unless there is some fairly clear outline of some proposal so that the court can see that there might well be a benefit to the creditors in the adjournment. The position is not made easier for the administrator in that it would appear that the director, Mr Cooper, is himself by far and away the largest creditor. 10 Accordingly, in my view I cannot adjourn either the application under s 440A or the winding up of the summons itself. I formally dismiss the section 440A application. MATTER STOOD DOWN [The legal representatives of the parties later announced that there had been an interim arrangement between the parties and by consent the winding up application was stood over to the Registrar's list on 20 July at 11 am and other orders were made in accordance with the short minutes handed up] ********************** Last Modified: 07/26/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.