Reported Decision : 54 ACSR 696 New South Wales Supreme Court CITATION : CarLovers Carwash Ltd & Ors [2005] NSWSC 879 HEARING DATE(S) : 12/08/05 JUDGMENT DATE : 2 September 2005 Equity Division JURISDICTION : Corporations List JUDGMENT OF : Barrett J DECISION : Detailed orders at paragraph 41 CATCHWORDS : CORPORATIONS - deed of company arrangement - remuneration of deed administrator - ineffective delegation of remuneration fixing power to committee of inspection - application for s.447A order validating part of remuneration already paid - like application to allow committee of inspection to fix further remuneration - regime to avoid undue cost in notifying creditors of proposal for remuneration to be fixed by meeting of creditors or by court Corporations Act 2001 (Cth), ss.447A, 449E(1) LEGISLATION CITED : Supreme Court (Corporations) Rules 1999, 9.2(2) Re Ansett Australia Ltd (2002) 40 ACSR 409 Re Clynton Court Pty Ltd (2005) 53 ACSR 432 Re Henry Walker Eltin Group Ltd [2005] FCA 994 CASES CITED : Re Regis Towers Real Estate Pty Ltd (2004) 51 ACSR 628 Re Stockford Ltd; Korda (2004) 52 ACSR 279 Webster v McIntosh (1980) 49 FLR 317 CarLovers Carwash Limited The Carwash Kings Pty Limited CarLovers Carwash (Aust) Pty Limited PARTIES : CarLovers (Maroochydore) Pty Limited Stuart Karim Ariff - Plaintiffs Berjaya Group (Aust) Pty Ltd Berjaya Group (Cayman) Ltd - Granted leave to be heard without becoming parties FILE NUMBER(S) : SC 3665/03 Mr C.R.C. Newlinds SC/Ms R. Francois - Plaintiffs COUNSEL : Mr F. Gleeson - Parties granted leave to be heard without becoming parties Clayton Utz - Plaintiffs SOLICITORS : Dibbs Abbott Stillman - Parties granted leave to be heard without becoming parties LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST BARRETT J FRIDAY, 2 SEPTEMBER 2005 3665/03 CARLOVERS CARWASH LTD & 4 ORS JUDGMENT 1 The plaintiffs are CarLovers Carwash Limited ("CCL"), The Carwash Kings Pty Limited ("CK"), CarLovers Carwash (Aust) Pty Limited ("CCA"), CarLovers (Maroochydore) Pty Limited ("CM") and Mr S.K. Ariff who is the deed administrator under each of four deeds of company arrangement, one executed by each of those companies. The deeds were executed on 3 December 2003 following the passing of the relevant resolutions at meetings of creditors of the companies on 3 November 2003. Before his appointment as deed administrator under each deed of company arrangement, Mr Ariff had been the administrator of each company by virtue of an appointment made on 10 July 2003. 2 By an application filed on 22 June 2005, the plaintiffs seek certain orders in relation to Mr Ariff's remuneration. In that connection, the court made an order as follows on 28 July 2003: "Pursuant to s447A of the Corporations Act that Pt 5.3A of the Act is to operate in relation to the Plaintiffs as if s449E(1)(a) also provided that the Voluntary Administrator is entitled to such remuneration as is fixed by a resolution of the Plaintiffs' committees of creditors passed after the members of those committees have received no less than seven days prior written notice of the amount of remuneration claimed, together with details of the manner in which the amount claimed is comprised and calculated." 3 That order related only to the remuneration of the voluntary administrator. It did not extend to remuneration of the administrator of the deeds of company arrangement which, of course, had not been promulgated when the order was made. The distinction between the two forms of remuneration is clearly drawn by s.449E(1): "(1) The administrator of a company under administration, or of a deed of company arrangement, is entitled to: (a) such remuneration as is fixed by a resolution of the company's creditors passed at a meeting convened under section 439A, or under section 439A or 445F, as the case may be; or (b) if no remuneration is so fixed—such remuneration as the Court fixes on the application of the administrator. " 4 Each meeting of creditors resolving upon the execution of a deed of company arrangement also passed the following resolution: "That the Deed Administrator's remuneration be approved in accordance with the Stuart Ariff Insolvency Administrators rates of charge, by the Creditors or a Committee of Inspection, if appointed." 5 Each deed of company arrangement made provision for the appointment and proceedings of a committee of inspection. Such a committee was appointed in all but one case (the exception being CM). The committee's functions were, in each case, stated to be to "consult with and assist the Administrator in matters relating to this Arrangement" and to "receive and consider reports by the Administrator". There was no conferral of any function concerning the deed administrator's remuneration. 6 Following execution of the deed of company arrangement of each company, Mr Ariff proceeded to perform the functions given to the deed administrator. Believing that, in all cases except CM, the resolution passed at the meeting of creditors of 3 November 2003 was effective to allow determination of his remuneration by the committee of inspection, Mr Ariff sought from the committees of inspection of CCL, CK and CCA approval of remuneration for the periods between 5 December 2003 and 31 August 2004 (plus, in the case of CK, 1 September 2004 to 28 February 2005). Such approval was granted as to a total of $869,273.23 for all three companies combined. Relying on what he understood to be approvals by the committees, Mr Ariff transferred from a trust account to his office account a sum of $824,765.59, leaving a balance of $44,508.64 of the supposedly approved remuneration unpaid. 7 No remuneration has been approved or paid in respect of services rendered by Mr Ariff as deed administrator of CM. Nor, in the case of the other three companies, has there been any purported approval of remuneration for periods beyond 31 August 2004 (or 28 February 2005 in the case of CK). As regards the three last-mentioned companies, this was not for want of trying on Mr Ariff's part. He made requests of the committees of inspection but tensions that had developed between him and the two major creditors of the companies (also the major shareholders) meant that there was no response from committee members associated with that party, so that no progress was made with the requests for approval of further remuneration. The two parties to which I refer are Berjaya Group (Aust) Pty Limited and Berjaya Group (Cayman) Limited. 8 Mr Ariff has now discontinued his attempts to have the committees of inspection approve further remuneration. This is because, on 19 April 2005, he became aware of the decision of Finkelstein J in Re Stockford Ltd; Korda (2004) 52 ACSR 279 from which he understood, with the assistance of legal advice, that a meeting of creditors cannot validly delegate to a committee of inspection the function of fixing the remuneration of an administrator or deed administrator. The Stockford case (decided on 21 December 2004) was drawn to Mr Ariff's attention by a consultant to his firm. On 21 April 2005, Mr Ariff received a letter from ASIC (in a form apparently sent to insolvency practitioners generally) alerting him to the Stockford case and asking whether he was administrator under any Part 5.3A administrations or deeds of company arrangement in which remuneration had been fixed otherwise than in accordance with s.449E or under a regime put in place by s.447A. Mr Ariff acted promptly and, by reply to ASIC dated 29 April 2005, identified the CarLovers deeds of company arrangement as within that category, adding that he had instructed his solicitors to prepare an appropriate application to the Supreme Court. 9 The foregoing is a perhaps over-long explanation of the background against which the plaintiffs now seek the following substantive relief: (a) an order under s.447A which has the effect of adding to s.449E(1) a paragraph as follows: "(c) the remuneration for work performed in the period 5 December 2003 to 30 June 2004 in relation to deed administrations of the First, Second and Third named Plaintiffs be $529,603.91." (b) an order under s.447A which has the effect of adding to s.449E(1) a paragraph as follows: "(c) such remuneration for work performed in relation to deed administrations of the First, Second and Third named Plaintiffs as is fixed by a resolution of the First, Second and Third named Plaintiffs' committees of inspection passed after the members of those committees have received no less than seven days prior written notice of the amount of remuneration claimed by the Deed Administrator, together with details of the manner in which the amount claimed is comprised and calculated." (c) an order referring out to a referee for inquiry and report the question whether the remuneration claimed by Mr Ariff for the period 1 July 2004 to 30 April 2005 (or, in the case of CM, 5 December 2003 to 30 April 2005) is fair and reasonable and, if not, what is fair and reasonable remuneration. 10 In seeking the first two orders, the plaintiffs aim to by-pass s.449E(1) and the effects of the Stockford decision by having the court create retrospectively a right to a fixed sum for the period 5 December 2003 to 30 June 2004 and a right otherwise to such remuneration as the committees of inspection may fix. The fixed sum of $529,603.91 referred to in the first order represents that part of the total of $869,273.23 already approved by the committees of inspection which, in Mr Ariff's view, was approved on the basis of information meeting what he regards as the high standard arising from the Stockford judgment. The premise underlying the first two orders is that the court should, by means of orders under s.447A, not only endorse the decision already purportedly made by the committees of inspection with respect to the period 5 December 2003 to 30 June 2004, as to the sum of $529,603.91, but also make exercisable by the committees of inspection, as an alternative to a meeting of creditors or the court, the power which s.449E(1) confers upon a meeting of creditors or the court. 11 The third order is proposed on the basis that, if the court does not create the mechanisms contemplated by the first two orders (or if the second of those mechanisms, although created, does not function), the court should exercise the power given to it by s.449E(1)(b) by directing that the relevant determination be committed, in the first instance, to a referee but, of course, on the basis that the referee's report would, in the usual way, be placed before the court which could then adopt, vary or reject it in whole or in part and, in so doing, make its own determination of remuneration. 12 I have not to this point mentioned that the major creditors already referred to (Berjaya Group (Aust) Pty Limited and Berjaya Group (Cayman) Limited) appeared by leave upon the hearing of the plaintiffs' application. They did not oppose the making of the first order (although making no admissions) and consented to the making of the second order. In relation to the alternative proposal represented by the third order, those creditors say that a reference out is inappropriate and that the ordinary processes under which the court fixes remuneration in such cases should be left to operate according to their terms. 13 The application, in both its branches, should be considered in the light of the nature and extent of the power given to the court by s.449E(1). Section 449E(1)(b) empowers the court to fix remuneration on the application of the administrator "if no remuneration is so fixed" – obviously a reference to the fixing of remuneration by a resolution of the company's creditors passed at a meeting of the kind referred to in s.449E(1)(a). When s.449E(1)(a) refers to "a meeting convened under section 439A, or under section 439A or 445F, as the case may be", it is distinguishing the case of an administrator of a company under administration (where a meeting under s.439A is the sole possibility) from the case of an administrator of a deed of company arrangement (where each of a meeting under s.439A and a meeting under s.445F is recognised as a meeting at which remuneration may be fixed). In the present case involving the administrator of a deed of company arrangement where the s.439A meeting in the antecedent administration has already occurred, the only possibility, from the point of view of s.449E(1)(a), is that a meeting of creditors convened under s.445F may fix remuneration. Because, as things stand, there is no other present or foreseen reason for such a meeting, resort to s.449E(1)(a) would entail a meeting convened under s.445F exclusively and specially for the purpose of dealing with the deed administrator's remuneration. 14 There is a question whether the power of the court under s.449E(1)(b) is exercisable only if a proposal for the fixing of remuneration has been submitted to, but not accepted by, the creditors at a meeting of the kind referred to in s.449E(1)(a). In other words, do the words "if no remuneration is so fixed" refer only to the case where such a meeting, although invited to do so, has not fixed remuneration, thereby excluding the case where a meeting has not fixed remuneration because there has been no meeting at which a proposal to fix remuneration has been considered? This is a question that was recognised by Goldberg J in Re Ansett Australia Ltd (2002) 40 ACSR 409 (at [22]). There was no need, however, for his Honour to answer it. 15 Rule 9.2(2) of the Supreme Court (Corporations) Rules 1999 appears to reflect an assumption that the court's power under s.449E(1)(b) is not exercisable unless and until a meeting has considered (and presumably not approved) a proposal for the fixing of the administrator's remuneration. That provision is as follows: "The administrator must not apply for the order until after the date of the meeting of creditors mentioned in paragraph 449E (1) (a) of the Corporations Act ." 16 Rule 9.2(2) does not say, in terms, that no application may be entertained until after a meeting has been held but, by precluding an application by the administrator until that condition has been met, it purports to have that effect. 17 There is nothing in s.449E justifying such an approach. A situation where "no remuneration is so fixed" clearly exists where a remuneration-fixing proposal has never been placed before a meeting. There may, in a particular case, be valid reasons for thinking that it would be undesirable or counter-productive to place such a proposal before a meeting and that the matter would be more suitably dealt with by the court in the first instance. I do not think that s.449E shows any intention to preclude such a direct approach to the court. Rule 9.2(2) cannot affect the construction of s.449E. As Brennan J said with the concurrence of Deane and Kelly JJ in Webster v McIntosh (1980) 49 FLR 317, "the intention of Parliament in enacting an Act is not to be ascertained by reference to the terms in which a delegated power to legislate has been exercised". That observation is all the more applicable here where the statute in question is a Commonwealth enactment and the subordinate legislation is made under a State Act. 18 I therefore conclude that the s.449E(1)(b) power of the court is available in this case despite the fact that no meeting under s.439A or s.445F has considered a proposal to fix the deed administrator's remuneration. The question which then arises is whether the court should, in this case, exercise that power (or, as is contemplated by the first two orders sought, the quite separate power under s.447A) when no attempt has been made by the deed administrator to have remuneration fixed by resolution passed at a meeting of creditors. 19 It is relevant, at this point, to refer to certain aspects of the evidence. Each of CCA, CK and CM is a wholly owned subsidiary of CCL, in that CCL owns all shares in each of CCA and CM, while CCA owns all shares in CK. The shares in CCL are owned as to 57.75% by Berjaya (Aust) Pty Limited and as to 39.11% by Berjaya (Cayman) Limited. The report as to affairs relating to CCL shows total debts of some $8.106 million, of which about $7.258 million is owed to the Berjaya companies. In the case of CCA, total debts are shown as $2.033 million of which $2.031 million is owed to CCL. In the case of CK, debts total $1.634 million and CCL accounts for $1.595 million. In the case of CM there are debts of $180,000 of which $178,000 is owed to CCL. 20 It is thus clear that CCL is by far the largest creditor of each of the other three companies and that the Berjaya companies account for approximately 90% of the debts of CCL. The deeds of company arrangement work on the basis that recoveries within each of CCA, CK and CM are fed into deed funds established under the CCL deed, one for employees and the other for other creditors, on the basis that all creditors of all companies will participate in the CCL funds, but with the Berjaya companies participating on a deferred basis that affords priority to other creditors. In these circumstances, the main focus of the present application is upon CCL. 21 It was submitted on behalf of the deed administrators that there is no real point in the matter of fixing remuneration now being submitted for decision by a meeting of creditors, at least in the case of CCL (which is the company to which the very substantial bulk of the work relates). Any such meeting would be a meeting under s.445F. By virtue of regulation 5.6.11(2)(b) of the Corporations Act 2001 (Cth), regulations 5.6.12 to 5.6.57 would apply in relation to each such meeting. Under regulation 5.6.21(2), the passing of a resolution on a poll would require affirmative votes by a majority in number of creditors voting (in person or by proxy) and affirmative votes (in person or by proxy) by creditors accounting for a majority in value of debts. If one of these elements was lacking, the person presiding at the meeting would be permitted (but not bound) to exercise a casting vote either for or against and, if that casting vote were exercised, the resolution would be passed or not passed accordingly. This is the effect of regulation 5.6.21(4). Having regard to regulation 5.6.17(1), the deed administrator (or a person nominated by the deed administrator) would chair the meeting, assuming that it was convened by the deed administrator. 22 It was submitted on behalf of the deed administrator that, in light of these provisions, there is no practical point in having a meeting of creditors of CCL consider the remuneration question. This, it is said, is because, having regard to the position occupied by the Berjaya creditors, the outcome of such a meeting might well be that whatever remuneration sum is proposed by the deed administrator will be opposed by the Berjaya creditors, so that, whatever other creditors think, the majority by value required by regulation 5.6.21(2)(b) is not obtained, so that the matter then falls to be determined by the casting vote of the chairperson; and if the chairperson is the deed administrator whose remuneration is in issue, a positive casting vote will raise difficult questions of duty versus interest which are likely to end up in court anyway, while a negative casting vote will see the matter of fixing remuneration come before the court by default under s.449E(1)(b). 23 It was next submitted on behalf of the deed administrator that, in relation to the elements of remuneration already considered and approved by the committees of inspection, there has been sufficient scrutiny already and, moreover, that that scrutiny occurred under a regime expressly approved by creditors at the s.439A meeting, albeit a regime which, as the deed administrator now accepts, was not a regime consistent with the legislative provisions concerning the fixing of remuneration. 24 Both these submissions (plus the further submission that the committees of inspection should be allowed to fix remaining remuneration) are accompanied by submissions as to the cost that would be entailed in convening and holding a meeting of creditors. Reference is made, in that connection, to the part of the judgment of Finkelstein J in Stockford (above) concerning the information that must be given to creditors for the purposes of any proposed resolution fixing an administrator's remuneration. His Honour made a broad-ranging review of opinions about the appropriate bases for calculating insolvency practitioners' remuneration. He concluded (at [48]): "To have his fees fixed it will be necessary for the administrator to do more than simply state the amount of time spent and the rate to be charged for that time, as happened in this case. The amount of detail to be provided in support of a claim must be proportionate to the size of the estate and the amount of time spent." 25 He also observed (at [49]): "If the administrator is to ask the creditors to fix his fees then the information in support of that claim may need to be more detailed than in an application to the court." 26 In his affidavit of 22 June 2005, Mr Ariff refers to the expected cost of convening meetings of creditors for all four companies. He refers to the fact that there are 370 creditors. He says that, if each was sent a copy of all the material relating to assessment of his remuneration from 3 November 2003 to date, the cost of convening and holding meetings would be approximately $455,000. It is said that the material would fill at least five lever-arch folders. The cost without providing all that material (but, presumably, forwarding a notice of meeting and very brief explanatory material) would, he says, be approximately $32,500. Those estimates represent approximately $1,230 per head and approximately $87 per head respectively. If one were to separate out $10,000 for fixed overheads in relation to the holding of the meeting itself, the respective averages would be of the order of $1,202 and $60. 27 It is submitted that it is counter-productive for these expenses to be borne by the respective bodies of creditors. A more cost-effective way of fixing remuneration, it is said, is for the committee of inspection or the court to perform the function. 28 I do not accept that considerations of cost should, in the abstract, be seen as a reason for deciding not to seek a resolution of creditors fixing a deed administrator's remuneration. Nor, in my view, should an administrator be heard to say, in effect, that the task involves consideration of such a volume of material that it is too difficult for creditors and should be undertaken by the court. If the expense of posting all relevant materials to all creditors is unduly high, alternative and less expensive means should be found of ensuring that all creditors know what the material is and that those who want it can be given it. 29 While, as I have said, s.449E(1) does not provide that there can be no application to the court unless the matter has first been submitted to creditors, the general expectation should be that creditors are asked to determine remuneration in the first instance. I must confess to some scepticism about the cost estimates given by Mr Ariff. But even if it would cost more than $1,200 per head to send comprehensive materials to all 370 creditors, the deed administrator may well think that they could obtain the assistance of the court under s.447A to facilitate a procedure by which a document of a few pages was actually sent with the notice of meeting in order to alert creditors to the issues, at the same time allowing them to obtain, upon request, a copy of the detailed materials and directing their attention to a website where it might be downloaded. 30 Having said that, however, I am bound to refer to features of this case that set it apart from most others, so far as CCL is concerned. I refer to the fact that the Berjaya companies own some 97% of the shares in CCL and account for some 90% of its debts. They are, moreover, postponed to other creditors under the CCL deed of company arrangement. In these circumstances, the Berjaya companies have an overwhelming interest in seeing funds within CCL husbanded and protected: returns in respect of their postponed debts will be prejudiced if such funds are wasted, as will the worth of their residual interests as the 97% shareholders. 31 In such a context, it is significant not only that the Berjaya companies have taken part in the argument of the present applications but also that they have seen fit both to indicate non-opposition to the making of an order as to the fixed sum of $529,603.91 and to indicate positive consent to the making of an order having the effect that the balance of the deed administrator's remuneration may be fixed by the committee of inspection after appropriate materials have been provided to the committee. I am, I think, entitled to regard these expressions as reflective of an attitude that may be assumed to correspond with (and perhaps be more stringent than) that of the general body of creditors of CCL. 32 There have been several cases in which the court has made orders under s.447A enabling a committee of creditors to fix an administrator's remuneration. A recent example is Re Henry Walker Eltin Group Ltd [2005] FCA 994, a decision of Hely J. As in that case, this has generally been in situations where the convening period for the second meeting of creditors has been significantly extended so that a forum for the fixing of remuneration by creditors has been significantly deferred. It would, in those cases, have been possible for the court to fix the remuneration. The court has nevertheless acquiesced in the proposition that remuneration should be fixed by the committee. The ability of such a committee to act in place of the general body of creditors has been recognised in those cases. 33 I see no reason why the ability of the CCL committee of inspection to act in place of the body of creditors should not be recognised in the same way in this case. I have said that I am somewhat sceptical about the evidence about the cost of convening a meeting of creditors. But I do not doubt that it would be significantly greater than the cost of convening a meeting of the committee of inspection. I am also conscious of the position of the Berjaya companies and the incentive they have to keep remuneration within proper limits. Those factors, coupled with the facts that creditors have already indicated a willingness to see the committee act in their place (even though their indication was not effective to produce any legal result), persuade me that, in the special circumstances of this case, it is appropriate both to validate by s.447A order the decision as to $529,603.91 and to empower the CCL committee of inspection by s.447A order regarding the fixing of the balance of the remuneration. 34 As to the latter matter, however, I consider it desirable to incorporate a feature that commended itself to Campbell J in Re Regis Towers Real Estate Pty Ltd (2004) 51 ACSR 628, one of the cases in which a s.447A order created a power for a committee of creditors to fix remuneration where the time for the holding of the s.439A meeting was greatly extended. His Honour made an order under s.447A conferring a remuneration fixing power upon the committee of creditors, but on the basis that, to be passed, a resolution required both a majority in number and a majority in value of the creditors represented on the committee. That feature should be adopted here, given the position occupied by the Berjaya interests. 35 The acquiescence of the Berjaya companies in the general proposition that a committee of inspection should be empowered to fix remuneration does not mean, of course, that the matter will necessarily be resolved at committee level. It is therefore necessary to consider the way in which the power of the court should be exercised, if and when it proves necessary for the deed administrator to seek a fixing of his remuneration by the court. The deed administrator's application raises squarely, in that context, the question whether the matter should be referred out to a referee. 36 The position of the Berjaya companies on this is that there is no need for a reference out and that any application for the fixing of remuneration should be dealt with by a Registrar according to the normal procedure – although the Berjaya companies do suggest some refinements for this case. 37 The deed administrator's main contention here is that some other experienced insolvency practitioner is better equipped, by knowledge and experience, than is a Registrar of the court to determine the proper remuneration of the deed administrator. That, in fact, is really the only consideration advanced in support of the reference out to a referee. The Berjaya position is that such a contention cannot be supported and that a reference out would entail cost (by way of the referee's remuneration) that would not be attracted if the matter was dealt with by a Registrar in the ordinary way. 38 The Berjaya parties refer, in that connection, to the decision of Finkelstein J in Re Clynton Court Pty Ltd (2005) 53 ACSR 432. In that case, a deed administrator whose remuneration had purportedly been fixed by arrangement later shown to be defective because it was inconsistent with the Stockford decision applied to the court for an order fixing remuneration. Finkelstein J held that the task was most appropriately performed by a registrar of the Federal Court – a course which, in the context of Federal jurisdiction, was implemented by means of a s.447A order both empowering a registrar and setting procedures. Decisive in his Honour's decision to prefer this to the appointment of what he called "an independent assessor" was the question of cost. 39 In this court, Registrars may exercise the court's power under s.449E(1)(b). Rule 9 of the Supreme Court (Corporations) Rules 1999 prescribes various matters of procedure in relation to applications for the exercise of that jurisdiction. I am prepared to accept that, in the present case, there is good reason to modify the operation of some of the procedural rules, but I do not accept that any good or sufficient reason has been shown for having the substantive matter dealt with by a specially appointed referee, rather than in accordance with the ordinary processes and procedures entailing a Registrar. 40 The final matter to be dealt with briefly concerns the adequacy of service of the present application. All the creditors were not served. The plaintiffs served ASIC and the members of the committees of inspection of CCL, CK and CCA. In fact, each committee is made up of the same persons. The Berjaya companies are represented on the committees. For reasons I have stated, I regard the Berjaya companies' interests to reflect those of creditors generally and, indeed, to be likely to be more stringent. In view of the part the Berjaya companies played in the proceedings, I am satisfied that failure to serve all creditors should not stand in the way of the grant of relief. 41 The orders of the court are as follows: 1. Order pursuant to s.447A of the Corporations Act 2001 (Cth) that Part 5.3A of that Act is to operate in relation to CarLovers Carwash Limited, The Carwash Kings Pty Limited, CarLovers Carwash (Aust) Pty Limited and CarLovers (Marooychydore) Pty Limited as if (a) a sum of $529,603.91 had been fixed pursuant to s.449E(1) as remuneration of S.K. Ariff as administrator of the deeds of company arrangement of CarLovers Carwash Limited, The Carwash Kings Pty Limited and CarLovers Carwash (Aust) Pty Limited for the period commencing on 5 December 2003 and ending on 30 June 2004; (b) the said Part 5.3A provided that, if and to the extent that the remuneration of the deed administrator of a deed of company arrangement of CarLovers Carwash Limited, a deed of company arrangement of The Carwash Kings Pty Limited or a deed of company arrangement of CarLovers Carwash (Aust) Pty Limited in respect of any completed period commencing after 30 June 2004 has not been fixed in accordance with s.449E(1)(a) or s.449E(1)(B) (whether or not an attempt at fixing under either of those provisions has been made), the deed administrator shall be entitled to such remuneration in respect of any such completed period as is fixed by a resolution of the committee of inspection appointed under that deed of company arrangement, being a resolution agreed to by members of the committee who (i) constitute a majority in number of the members of the committee voting on the resolution; and (ii) account for a majority by value of the debts of the creditors who are (or are represented by) the members of the committee voting on the resolution; (c) the reference in s.449E(2) to remuneration fixed under s.449E(1)(a) included a reference to remuneration so fixed by any such committee of inspection. (d) the said Part 5.3A provided in relation to a resolution of the creditors of any of CarLovers Carwash Limited, The Carwash Kings Pty Limited, CarLovers Carwash (Aust) Pty Limited and CarLovers (Maroochydore) Pty Limited under s.449E(1)(a) fixing the remuneration of the deed administrator in respect of any completed period that the resolution is not invalid or ineffective merely because the information intended by the deed administrator to be placed before creditors to enable them to make an informed decision in relation to the resolution did not form part of or accompany the written notice of the meeting at which the resolution was passed, provided that (i) that notice specified (A) the amount that the meeting was to be invited to fix as remuneration; (B) the completed period to which the amount relates; and (C) in summary form, the principles and methods applied in calculating the amount; (ii) that notice also specified how a creditor might, not less than 10 business days before the meeting, make application (by post, telephone or email, at the creditor's option) for a document containing the information intended by the deed administrator so to be placed before creditors; and (iii) not less than 7 business days before the meeting, there was sent by prepaid post or email to every creditor from whom such an application was received at least 10 business days before the meeting (A) a copy of that document; or (B) a written statement explaining how the document could be accessed on and downloaded from the internet; and (e) the number of business days referred to in s.445(2) in relation to any meeting at which such a resolution is proposed to be passed were 20 instead of 5. 2. Order pursuant to s.14 of the Civil Procedure Act 2005 that, in relation to any application for the fixing under s.449E(1)(b) of the remuneration the deed administrator of a deed of company arrangement executed by CarLovers Carwash Limited, a deed of company arrangement executed by The Carwash Kings Pty Limited, a deed of company arrangement executed by CarLovers Carwash (Aust) Pty Limited or a deed of company arrangement executed by CarLovers (Maroochydore) Pty Limited, the following requirements imposed by the Corporations (Supreme Court) Rules 1999 be dispensed with: (a) the requirement imposed by rule 9.2(2); and (b) the requirement imposed by rule 9.2(3)(a). 3. Direct pursuant to rule 1.8 of the Supreme Court (Corporations) Rules 1999 that, at least 21 days before filing an originating process or interlocutory process making an application referred to in order 2, the deed administrator send by post to each creditor of the company concerned at the last known address of the creditor a notice (a) stating that the application is to be made; (b) specifying (i) the amount that the court will be asked to fix as remuneration; (ii) the completed period to which the amount relates; and (iii) in summary form, the principles and methods applied in calculating the amount; and (c) specifying how a creditor may apply for a copy of the originating process or interlocutory process and a copy of any affidavit on which the applicant intends to rely and the deed administrator shall promptly serve the items mentioned in paragraph (c) on every creditor who applies for them. ********** 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.