In the matter of A.F.G. Insurances Limited (subject to deed of company arrangement) [2013] NSWSC 1295

Supreme Court New South Wales

Medium Neutral Citation: In the matter of A.F.G. Insurances Limited (subject to deed of company arrangement) [2013] NSWSC 1295 Hearing dates: 29 April 2013 Decision date: 29 April 2013 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Order made for appointment of a joint and several deed administrator. Catchwords: CORPORATIONS - management and administration - orders sought for appointment of administrator of a deed of company arrangement - where a current joint administrator of the deed has resigned - whether the Court's power to appoint a deed administrator falls under s 449D or s 447A of the Corporations Act 2001 (Cth). Legislation Cited: Corporations Act 2001 (Cth) ss 447A, 449D, 449D(1) Cases Cited: - Condon v Watson [2009] FCA 11; (2009) 174 FCR 314; (2009) 69 ACSR 350 - Free and Ors [2010] NSWSC 1079 - Re Application of Vouris [2004] NSWSC 384; (2004) 49 ACSR 543 - Re Porter and Mansfield [2012] NSWSC 220 Category: Interlocutory applications Parties: John Raymond Gibbons as deed administrator of A.F.G. Insurances Limited (subject to deed of company arrangement) (First Plaintiff) Kieran William Hutchison as deed administrator of A.F.G. Insurances Limited (subject to deed of company arrangement) (Second Plaintiff) Representation: Counsel: A. Rao (Plaintiffs) Solicitors: Henry Davis York (Plaintiffs) File Number(s): 2013/125424

Judgment - EX TEMPORE 1By originating process filed 23 April 2013, the plaintiffs, John Raymond Gibbons and Kieran William Hutchison as deed administrators of A.F.G. Insurances Limited (subject to deed of company arrangement) ("Company") seek orders for the appointment of Mr Campbell-Wilson as joint and several administrator of a deed of company arrangement concerning the Company upon the resignation of Mr Gibbons taking effect on 30 April 2013. 2The application is supported by an affidavit of Mr Gibbons, who indicates that his resignation is prompted by his retirement from his role as a partner of Ernst & Young on 30 April 2013. The application is also supported by an affidavit of Mr Hutchison, who is presently one of the joint administrators of the deed, and was previously resident in Sydney, but is now located in the Cayman Islands. In these circumstances, Mr Gibbons expresses the sensible view that it is considered prudent and desirable to appoint a Sydney based partner of Ernst & Young to replace him as joint deed of administrator, on his retirement, where most of the work to be undertaken to finalise the deed administration will be undertaken, subject to supervision, by Ernst & Young staff located in its Sydney office. The application is also supported by an affidavit of Mr Campbell-Wilson, who is proposed to be appointed as joint administrator together with Mr Hutchison. His evidence is that he is generally familiar with the background of the A.F.G. administration as he previously worked as case manager on that administration and was part of the original Ernst & Young team which worked on the matter in the first six months after appointment in 2002. Mr Campbell-Wilson is qualified for appointment, so far as he is a registered liquidator, and gives evidence that he is not aware of any issues, circumstances, relationships or conflicts of interest that would preclude his appointment as a deed administrator of A.F.G. 3It is plain that the Court has power to make orders in the form sought, although the question of the source of the Court's power is one which involves a little complexity. On one view, which appears to have been adopted by Barrett J in Re Application of Vouris [2004] NSWSC 384; (2004) 49 ACSR 543 at [19], the Court may make such an appointment, in the event of the resignation of a joint administrator, because the reference to "the administrator of a deed of company arrangement" in s 449D(1) of the Corporations Act 2001 (Cth) can be read as applying to one of several administrators. On another view, s 449D(1) of the Corporations Act should be understood as permitting one of the multiple administrators of a deed of company arrangement to resign and, upon that resignation, for the remaining administrator or administrators to continue in office and function accordingly, so that there is no need to read a reference to "the administrator" under s 449D(1) as comprising one of several administrators, because the remaining administrators will remain in office. That approach appears to find some support in Condon v Watson [2009] FCA 11; (2009) 174 FCR 314; (2009) 69 ACSR 350 and in Free and Ors [2010] NSWSC 1079 at [17]. 4In my decision in Re Porter and Mansfield [2012] NSWSC 220 at [10] I noted that the Court had power to replace a joint deed administrator, either under s 449D of the Corporations Act on the basis noted in Re Vouris, or otherwise under s 447A of the Corporations Act, which was the approach adopted by Barrett J in Free and Ors above. 5I do not consider that it is necessary to determine whether the Court's power arises under s 449D or alternatively under s 447A, since the Court plainly has such a power under s 447A. In the present circumstances, it seems to me that there is a compelling case for the exercise of such a power, where Mr Campbell-Wilson is qualified to be appointed as administrator and where there is obvious practical convenience in the appointment of a second joint administrator resident in Sydney to the company. 6For these reasons, I make the following order: 1. An order pursuant to s 449D, or alternatively s 447A of the Corporations Act, that Mr Philip Campbell-Wilson be appointed as a joint and several deed administrator of A.F.G. Insurances Limited (subject to Deed of Company Arrangement) with effect from 30 April 2013.