Wallace-Smith, in the matter of National Express Group Australia (Bayside Trains) Pty Ltd [2003] FCA 21 (17 January 2003)

Last Updated: 24 January 2003

FEDERAL COURT OF AUSTRALIA

Wallace-Smith, in the matter of National Express Group Australia

(Bayside Trains) Pty Ltd [2003] FCA 21

IN THE MATTER OF NATIONAL EXPRESS GROUP AUSTRALIA (BAYSIDE TRAINS) PTY LTD (ACN 087 425 287), NATIONAL EXPRESS GROUP AUSTRALIA (SWANSTON TRAMS) PTY LTD (ACN 087 494 997), NATIONAL EXPRESS GROUP AUSTRALIA (V/LINE PASSENGER) PTY LTD (ACN 087 425 269), NATIONAL EXPRESS (BAYSIDE TRAIN MAINTENANCE) PTY LTD (ACN 088 510 589) (ALL RECEIVERS AND MANAGERS APPOINTED) (ALL ADMINISTRATORS APPOINTED) AND SIMON ALEXANDER WALLACE-SMITH AND ROBERT WILLIAM WHITTON

V 3008 of 2003

GRAY J

17 JANUARY 2003

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 3008 of 2003

IN THE MATTER OF:	NATIONAL EXPRESS GROUP AUSTRALIA (BAYSIDE TRAINS) PTY LTD ACN 087 425 287 NATIONAL EXPRESS GROUP AUSTRALIA (SWANSTON TRAMS) PTY LTD ACN 087 494 997 NATIONAL EXPRESS GROUP AUSTRALIA (V/LINE PASSENGER) PTY LTD ACN 087 425 269 NATIONAL EXPRESS (BAYSIDE TRAIN MAINTENANCE) PTY LTD ACN 088 510 589 (ALL RECEIVERS AND MANAGERS APPOINTED) (ALL ADMINISTRATORS APPOINTED)
	SIMON ALEXANDER WALLACE-SMITH AND ROBERT WILLIAM WHITTON PLAINTIFFS
JUDGE:	GRAY J
DATE OF ORDER:	17 JANUARY 2003
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The convening period for the meetings of creditors under s 439A of the Corporations Act 2001 (Cth) of:

(a) National Express Group Australia (Bayside Trains) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 087 425 287;

(b) National Express Group Australia (Swanston Trams) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 087 494 997;

(c) National Express Group Australia (V/Line Passenger) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 087 425 269; and

(d) National Express (Bayside Train Maintenance) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 088 510 589

be extended up to and including 19 March 2003.

2. The costs of the application are costs in the administrations.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 3008 of 2003

IN THE MATTER OF:	NATIONAL EXPRESS GROUP AUSTRALIA (BAYSIDE TRAINS) PTY LTD ACN 087 425 287 NATIONAL EXPRESS GROUP AUSTRALIA (SWANSTON TRAMS) PTY LTD ACN 087 494 997 NATIONAL EXPRESS GROUP AUSTRALIA (V/LINE PASSENGER) PTY LTD ACN 087 425 269 NATIONAL EXPRESS (BAYSIDE TRAIN MAINTENANCE) PTY LTD ACN 088 510 589 (ALL RECEIVERS AND MANAGERS APPOINTED) (ALL ADMINISTRATORS APPOINTED)
	SIMON ALEXANDER WALLACE-SMITH AND ROBERT WILLIAM WHITTON PLAINTIFFS

JUDGE:	GRAY J
DATE:	17 JANUARY 2003
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1 The plaintiffs in this application have been appointed as voluntary administrators of four corporations. The four corporations have responsibility for the operation of various parts of the public transport system in Victoria. Their financial failure has apparently led to the appointment of receivers and managers by the State of Victoria and also to the appointment of the plaintiffs as voluntary administrators.

2 Under the scheme set down in the Corporations Act 2001 (Cth) ("the Corporations Act"), the administrators were required to call first meetings of creditors within five business days after the beginning of the administrations. Those meetings were called, and were conducted on 2 January 2003, in respect of all of the four corporations. Four committees of creditors were appointed in order to oversee the administrations. Section 439A of the Corporations Act now obliges the administrators to convene a second meeting of the creditors of each corporation within the period specified in that section. The period is calculated as expiring on 19 January 2003. Section 439A(6) provides that the Court may extend that period on an application made within the period.

3 The purpose of this application, therefore, is to seek an extension of that period. Although it appears that service of the application on any person is not strictly necessary, I note that the plaintiffs have taken steps to give notice to all of the creditors who are members of the committees of creditors. Nobody has appeared in response to that notice to oppose the making of the application. The granting of the application is obviously in the discretion of the Court, but it does appear that the discretion ought to be exercised, having regard to the interests of the creditors in particular.

4 The primary ground for the granting of the application is that the Corporations Act requires the administrators to supply to each creditor, with the notice convening the second meeting of creditors, a considerable amount of information. Currently, the administrators do not have that information available to them. If they were to convene the meetings it would now be necessary for them to propose that the meetings be adjourned until the requisite information is available.

5 There are a number of reasons why the administrators do not have that information. On the evidence available to me, it does not appear that those reasons include any dilatoriness on the part of the administrators. The fact is that the administration of the four corporations is a very complex matter. The corporations' operation is a large business, employing more than 2500 employees. So far as is known to the administrators at the moment, there are at least 894 creditors, who are owed at least $55,000,000. There is the need to comply with at least 244 contracts and there are people still searching to ascertain whether there are further contracts binding the corporations. The administrators have had to deal with the receivers and managers who are in possession of many of the assets and books of the corporations themselves. The receivers and managers are still considering whether to adopt or not adopt contracts. There are no up-to-date accounts of the corporations prepared. There are, as yet, no reports as to the affairs of the corporations from the directors, some of whom are overseas. There is a proposal for a deed of company arrangement, which may well prove to be more beneficial to the creditors than the instant liquidation of the corporations. The protection of the interests of the employees is a matter that has yet to be clarified.

6 In the circumstances, the administrators seek an extension of sixty days of the time for convening the second creditors' meetings. This appears to me to be a reasonable period.

7 Accordingly, I propose to grant the orders sought by the plaintiffs. The order of the Court will be that:

1. The convening period for the meetings of creditors under s 439A of the Corporations Act 2001 (Cth) of:

(a) National Express Group Australia (Bayside Trains) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 087 425 287;

(b) National Express Group Australia (Swanston Trams) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 087 494 997;

(c) National Express Group Australia (V/Line Passenger) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 087 425 269; and

(d) National Express (Bayside Train Maintenance) Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) ACN 088 510 589

be extended up to and including 19 March 2003.

2. The costs of the application are costs in the administrations.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Associate:

Dated:

Counsel for the plaintiffs:	Mr JP Moore
Solicitor for the plaintiffs:	Blake Dawson Waldron
Date of Hearing:	17 January 2003
Date of Judgment:	17 January 2003