In re Cussen & Greig as administrators of Heavy Plant Leasing Pty Ltd (Receivers & Managers Appointed) & Ors [2013] NSWSC 834

Supreme Court New South Wales

Medium Neutral Citation: In re Cussen & Greig as administrators of Heavy Plant Leasing Pty Ltd (Receivers & Managers Appointed) & Ors [2013] NSWSC 834 Hearing dates: 18 June 2013 Decision date: 18 June 2013 Jurisdiction: Equity Division - Duty List Before: White J Decision: Counsel to bring in short minutes of order in accordance with reasons. Catchwords: CORPORATIONS - voluntary administration - creditor's meeting - meeting of creditors pursuant to s 439A of the Corporations Act 2001 (Cth) - period available for holding meeting pursuant to s 439B and reg 5.6.18(2) - whether period should be extended under s 447A - balance between efficiency of administration and maximising return for creditors Legislation Cited: Corporations Act 2001 (Cth) Building and Construction Industry Payments Act 2004 (Qld) Cases Cited: Re Collective Olive Groves Limited [2009] FCA 177 Category: Interlocutory applications Parties: Neil Robert Cussen (1st Plaintiff) John Lethbridge Greig (2nd Plaintiff) Representation: Counsel: J Darams (Plaintiffs) Solicitors: Eakin McCaffery Cox (Plaintiffs) File Number(s): 2013/186024

Judgment 1HIS HONOUR: This is an application under s 447A of the Corporations Act 2001 (Cth) to extend the period for the holding of an adjourned second meeting of creditors in accordance with s 439B and reg 5.6.18(2). Pursuant to those provisions a meeting convened under s 439A cannot be adjourned for more than 45 business days. The second meeting of creditors of the applicant companies was held on 26 April 2013. Creditors resolved that the meeting then be adjourned for 45 days. That period would expire on 1 July 2013. 2On 6 June 2013 the administrators gave notice to creditors of their intention to apply for an order extending what they called the "convening period". A meeting of the committee of creditors held on 28 May 2013 had resolved to support the administrators' decision to apply for the extension. No creditor or employee has given notice to the administrators of opposition to this application. 3The reason for the application is that there is presently considerable uncertainty about the assets available to at least the first applicant. It had entered into a subcontract agreement with McConnell Dowell Aust Pty Limited ("Mac Dow") for the completion of a civil engineering project at Roma in Queensland. It has made a number of progress claims against Mac Dow and has received certain adjudication certificates pursuant to the Building and Construction Industry Payments Act 2004 (Qld). It claims to be entitled to judgment on those adjudication certificates in the amount of approximately $36 million. Proceedings are pending in the Supreme Court of Queensland which challenge the certificates obtained or in which a stay is sought of any judgment to which the first applicant might be entitled pursuant to the adjudication certificates. The evidence on this application is that it will not be until at least late November 2013 that there may be any certainty as to the total amount that may be recoverable by the first applicant against Mac Dow which might then be available for payment to the secured creditor and for the payment of unsecured debts. 4At present no deed of company arrangement has been proposed. The administrator deposes that the uncertainty surrounding the outcome of the resolutions of the progress claims, including the quantum to be recovered, is affecting the director's ability to consider and formulate a deed of company arrangement. 5In Re Collective Olive Groves Limited [2009] FCA 177, Jacobson J, in discussing the jurisdiction to make orders under s 447A to permit a further adjournment of the date of the second meeting of creditors, said that it was necessary to strike an appropriate balance between the expectation that the administration would be relatively speedy in a summary matter and the requirement that undue speed not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return to shareholders (at [18]). These are similar to the considerations applicable to the decision whether to extend the convening period pursuant to s 439A (6). 6I am satisfied that in this case the balance should be struck by amending the operation of the Act and regulations so as to permit a further adjournment of the meeting for the period of 180 days as sought. I recognise that this is a lengthy extension, particularly as the companies went into administration on 14 March 2013. However, in the absence of such an extension the creditors are likely to have insufficient information on which to make an informed judgment as to what resolution they should pass pursuant to s 439C. It is unlikely that any deed of company arrangement could be proposed until the resolution of the progress claims has been determined, or at least clarified. 7Further time is also required for receivers and managers who have been appointed to the assets of the first applicant to realise items of plant or equipment so as to determine whether there is any surplus funds from that source which may be available to unsecured creditors or whether the secured creditor will have a debt that will still be outstanding. The administrator also deposes that if the second meeting were held on 1 July 2013 and the creditors resolved that the company be wound up, that this could prejudice the ability of the receivers and managers to collect any monies payable by Mac Dow. 8I therefore propose to make the orders substantially as sought. There should, however, be leave given to any person claiming to be interested, including any creditor of the applicants, to apply for a variation of the order on reasonable notice to the applicant and to the Court. The orders to be made, including the reservation of that leave, should be communicated to the creditors known to the administrators. 9I will stand the matter down in order for counsel for the applicant to prepare additional short minutes of order to provide for the reservation of that leave and for the publication or advertisement of the orders so that creditors or other affected persons will know of their right so to apply. 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. Decision last updated: 25 June 2013