Supreme Court New South Wales Medium Neutral Citation: In the matter of Stephen James Parbery, Christopher Clarke Hill and Alan Lee Walker (in their capacity as joint and several voluntary administrators) [2014] NSWSC 763 Hearing dates: Wednesday, 4 June 2014 Decision date: 04 June 2014 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Time for convening s439A meeting extended. Catchwords: CORPORATIONS - voluntary administration - creditor's meeting - extension of convening period. Legislation Cited: (Cth) Corporations Act 2001, s 436A, 439A(4), 447A Category: Interlocutory applications Parties: Stephen James Parbery, Christopher Clarke Hill and Alan Lee Walker (in their capacities as joint and several voluntary administrators of Hewatt Pty Ltd ACN 120 060 095 (Administrators Appointed), Hewatt Grader Hire Pty Ltd ACN 164 508 196 (Administrators Appointed), Carmelina Management Pty Ltd ACN 135 296 338 (Administrators Appointed), Hewatt Constructions Pty Ltd ACN 008 623 309 (Administrators Appointed), Hewatt Earthmoving Pty Ltd ACN 109 628 766 (Administrators Appointed) (plaintiffs) Representation: Counsel: D L Cook (plaintiffs) Solicitors: Norton Rose Fulbright Australia (plaintiffs) File Number(s): 2014/166006 Judgment (ex tempore) 1HIS HONOUR: The plaintiffs Stephen James Parbery, Christopher Clarke Hill and Alan Lee Walker are the joint and several voluntary administrators of five companies: namely Hewatt Pty Ltd, Hewatt Grader Hire Pty Ltd, Carmelina Management Pty Ltd, Hewatt Earth Moving Pty Ltd and Hewatt Constructions Pty Ltd, which together constitute the Hewatt Group of Companies, which is engaged in the construction industry, particularly in large earthworks, in the Australian Capital Territory. The plaintiffs were appointed administrators of the companies on 8 May 2014, pursuant to (Cth) Corporations Act 2001, s 436A, and the first meeting of creditors was held on 20 May 2014, when a committee of creditors was established. The convening period for the second meeting of creditors will expire, unless extended, on 5 June 2014. By originating process filed on 3 June 2014 the administrators seek an extension of that period to 18 July 2014, a period of 30 business days. 2The administration is a relatively complex one. The administrators have been engaged in negotiations with the other parties to various construction contracts to which the companies or some of them are party, and have secured the continuation or extension of at least some of those contracts, the benefit of which is to avoid incurring liability for damages to the other parties and to secure an ongoing stream of income for the companies as well as maintaining some of the employees of the group in employment. Other employees have been terminated through redundancy. The plaintiffs have also had to investigate the status of approximately 140 items of plant which are or may be assets of the companies but are or may be also subject to finance arrangements or PPSA securities. 3The complexities involved mean that the plaintiffs have not yet been able to form the requisite opinion referred to in Corporations Act, s 439A(4) to make an appropriate recommendation to creditors at the second creditors meeting. There is some indication that the directors wish to propose a deed of company arrangement, but that has not yet been able to be formulated and put in any formal way to the plaintiffs. 4The creditors' committee supports the extension sought. The only landlord in respect of property of the group is a related party who does not object to the extension. 5Secured creditors are being paid for equipment that is being used to complete the ongoing contracts. One major secured creditor supports the extension sought, and another has indicated that it does not object. The plaintiffs are not aware of any secured creditor who opposes the extension. 6The extension will not only permit the administrators to form a proper opinion on the matters referred to in s 439A(4) and thus make an informed recommendation to creditors, but will also enable the continued generation of revenue from the ongoing contracts and mitigate the claims for damages which would otherwise be incurred. 7Employees who have been made redundant will not be able to commence their claims for payments under GEERS, which involves some hardship to them. Against that, in the absence of an extension, other employees who remain in employment would likely lose their ongoing employment, with hardship to them. 8In those circumstances, it seems to me that notwithstanding the potential hardship to the employees who have been made redundant by deferring the time at which they may make a claim under GEERS, nonetheless the interests of creditors as a whole favours the grant of the extension sought. 9Accordingly, the court orders: (1)The period within which the plaintiffs must convene the second meeting of creditors of: (a)Hewatt Pty Ltd, ACN120060095 (b)Hewatt Grader Hire Pty Ltd, ACN164508196. (c)Carmelina Management Pty Ltd, ACN135296338. (d)Hewatt Constructions Pty Ltd, ACN008623309. (e)Hewatt Earth Moving Pty Ltd, ACN109628766, ("the companies") be extended up to and including 18 July 2014. (2)Pursuant to Corporations Act, s 447A, the second meeting of creditors of the companies may be held at any time during the convening period as extended by order 1 above or the period of five business days thereafter. (3)The plaintiff's costs of the application be costs in the administration of the companies on a joint and several basis. (4)These orders are to be entered forthwith. ********** 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: 12 December 2014