McGrath, in the matter of Henry Walker Eltin Group Limited (Administrators Appointed) (ACN 007 710 483) (with Corrigendum dated 10 November 2005) [2005] FCA 1479 (19 October 2005)

McGrath, in the matter of Henry Walker Eltin Group Limited (Administrators Appointed) (ACN 007 710 483) [2005] FCA 1479

CORRIGENDUM

IN THE MATTER OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO

ANTHONY GREGORY MCGRATH, SCOTT BRADLEY KERSHAW, JOSEPH DAVID HAYES AND SHAUN ROBERT FRASER IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 AND HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1
NSD 1935 OF 2005

GYLES J
19 OCTOBER 2005 (CORRIGENDUM 10 NOVEMBER 2005)
SYDNEY

IN THE MATTER OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO

	ANTHONY GREGORY MCGRATH, SCOTT BRADLEY KERSHAW, JOSEPH DAVID HAYES AND SHAUN ROBERT FRASER IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 FIRST PLAINTIFFS HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 SECOND PLAINTIFFS
JUDGE:	GYLES J
DATE OF ORDER:	14 OCTOBER 2005
WHERE MADE:	SYDNEY

I certify that the preceding one (1) numbered paragraph is a true copy of the Corrigendum to the Reasons for Judgment of the Honourable Justice Gyles.

McGrath, in the matter of Henry Walker Eltin Group Limited (Administrators Appointed) (ACN 007 710 483) [2005] FCA 1479

CORPORATIONS – voluntary administration – second creditors’ meeting – application for further extension of time to convene

Corporations Act 2001 (Cth), s 439A, s 447A

In the matter of Henry Walker Eltin Group Limited (Administrators Appointed) [2005] FCA 316 related
In the matter of Henry Walker Eltin Group Limited (Administrators Appointed) [2005] FCA 984 related and followed
Bernsteen Pty Ltd v Newmore Pty Ltd (1995) 13 ACLC 1608 cited
Re Bosnjak Holdings Pty Ltd & Ors [2005] NSWSC 527 referred to
Watson v Uniframes Ltd and Trumbull (1994) 55 FCR 556 cited

IN THE MATTER OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO

ANTHONY GREGORY MCGRATH, SCOTT BRADLEY KERSHAW, JOSEPH DAVID HAYES AND SHAUN ROBERT FRASER IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 AND HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1
NSD 1935 OF 2005

GYLES J
19 OCTOBER 2005
SYDNEY

IN THE MATTER OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO

	ANTHONY GREGORY MCGRATH, SCOTT BRADLEY KERSHAW, JOSEPH DAVID HAYES AND SHAUN ROBERT FRASER IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 FIRST PLAINTIFFS HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 SECOND PLAINTIFFS
JUDGE:	GYLES J
DATE OF ORDER:	14 OCTOBER 2005
WHERE MADE:	SYDNEY

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

IN THE MATTER OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO

ANTHONY GREGORY MCGRATH, SCOTT BRADLEY KERSHAW, JOSEPH DAVID HAYES AND SHAUN ROBERT FRASER IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1
FIRST PLAINTIFFS

HENRY WALKER ELTIN GROUP LIMITED (ADMINISTRATORS APPOINTED) (ACN 007 710 483) AND THE COMPANIES LISTED IN SCHEDULE 1
SECOND PLAINTIFFS

1 On 14 October 2005 I made an order pursuant to s 447A(1) of the Corporations Act 2001 (Cth) (the Act) permitting the adjournment by creditors of the second meeting of creditors required by s 439A to a date no more than 180 days after 8 July 2005 and ancillary orders. I should clarify the circumstances under which those orders were made.

2 The first plaintiffs are the voluntary Administrators of Henry Walker Eltin Group Limited (HWE) and 25 other companies which are members of the Henry Walker Eltin Group (the HWE Group). HWE is a listed public company. The companies in the group conduct mining operations, civil infrastructure projects and various non-core operations. The second plaintiffs conduct the mining operations of the HWE Group. Administrators were appointed to the HWE Group on 31 January 2005. On 1 February 2005 those Administrators resigned and the first plaintiffs were appointed joint voluntary Administrators in their stead.

3 On 16 February 2005, pursuant to s 439A(6) of the Act, Hely J ordered that the period in which the Administrators must convene meetings of creditors under s 439A of the Act be extended until 23 May 2005 (In the matter of Henry Walker Eltin Group Limited (Administrators Appointed) [2005] FCA 316). On 6 May 2005 Hely J ordered, pursuant to s 447A(1) of the Act, that the period within which the Administrators must convene meetings of creditors under s 439A of the Act be further extended up to and including 5 July 2005, together with ancillary orders including the granting of liberty to apply to any person who could demonstrate sufficient interest to modify or discharge the orders upon appropriate notice being given to the plaintiffs (In the matter of Henry Walker Eltin Group Limited (Administrators Appointed) [2005] FCA 984). In making those orders, Hely J held that, notwithstanding the limitations implicit in s 439A (cf Watson v Uniframes Ltd and Trumbull (1994) 55 FCR 556 and Bernsteen Pty Ltd v Newmore Pty Ltd (1995) 13 ACLC 1608), s 447A of the Act conferred the necessary power.

4 The basis for the application before Hely J, put shortly, was that more time was required to reach a position where the mining operations conducted by group entities could be realised and a Deed of Company Arrangement to be proposed once the basis for distribution had become clearer. It was not anticipated that that stage would be reached until beyond the extended date for the meeting. The evidence before Hely J included a good deal of detail about the HWE Group, including creditors and customers of the mining operations and the contractual rights that they had which impinged upon the disposition of the mining operations. It also set out in some detail the steps which had been taken by the Administrators to inform interested parties of what was proposed. Hely J had heard other applications in the Administration and was apparently familiar with the affairs of the Group and the conduct of the Administration.

5 The primary reason advanced for the extension now sought is to permit completion of the sale of the mining operations so that, when creditors come to vote on the proposed Deed of Company Arrangement, they will effectively be dealing with the disposal of the surplus cash proceeds of the realisation of the assets. The sale process is well-advanced but the timetable has had to be extended by several weeks.

6 The preferred position of the plaintiffs was that there should be an order adjourning the meeting to a date appointed by the first plaintiffs no more than 180 days after 8 July 2005. When the matter was called on I indicated to counsel that, because of the shortness of time available to consider the matter, I had not had the opportunity to absorb myself in the detail sufficiently to warrant an order of that kind that would bypass creditors and suggested a short adjournment to enable the application to be advertised and notice given to Australian Securities and Investments Commission (ASIC). Counsel then indicated that the matter needed to be resolved that day otherwise the meeting would need to be convened in any event. The plaintiffs therefore elected to seek the alternative order, which had been proposed in the initiating process, namely, an order that the meeting could be adjourned by creditors to a date appointed by the first plaintiffs not more than 180 days after 8 July 2005.

7 I indicated to counsel that I had some reservations about Administrators appointed pursuant to Pt 5.3A of the Act acting as de facto liquidators and taking steps to dispose of assets in a complex situation prior to the meeting of creditors to decide the company’s future, particularly if substantial delay is involved. However, I was prepared to make the alternative order, primarily because to do so was a natural consequence of previous orders made by Hely J, albeit made without any discussion of the point about which I have some reservations. Further, Young CJ in Eq of the Supreme Court of New South Wales granted an order in Re Bosnjak Holdings Pty Ltd & Ors [2005] NSWSC 527 with similar effect to that of Hely J in this case. Although it is not clear from the reasons, I know from my association with other aspects of that administration that the underlying basis for the extension of that meeting period was to further sale of the assets of a substantial group of companies.

8 Having considered the evidence as to the steps taken by the Administrators to inform creditors (particularly through the Committee of Creditors) and customers of the mining operations of what is occurring and having in mind the orders made to date, I regarded it as reasonable to enable the creditors to adjourn the meeting if they see fit. In addition to reserving the same liberty to apply to third parties as that reserved by Hely J, I also directed that notice of the substantive order and the liberty to apply be published in a national newspaper. Although counsel has indicated that ASIC has not shown any great inclination to join in applications to the Court concerning administrations, the plaintiffs’ solicitors should provide a copy of this judgment to ASIC. In so directing, I do not intend to imply that ASIC should take any position in the matter.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Counsel for the Applicant:	M Oakes SC

Solicitor for the Applicant:	Kemp Strang

Date of Hearing:	14 October 2005

Date of Reasons:	19 October 2005

1.	Pursuant to s 447A(1) of the Corporations Act 2001 (the Act), Pt 5.3A of the Act is to operate in relation to each of the second plaintiffs such that the meetings of creditors of each of the second plaintiffs held pursuant to s 439A of the Act may be adjourned by the creditors to a date appointed by the first plaintiffs which is no more than 180 days after 8 July 2005.
2.	Liberty to apply be granted to any person who can demonstrate sufficient interest to modify or discharge these Orders upon appropriate notice being given to the plaintiffs.
3.	Costs and expenses of this proceeding be costs and expenses of the administration of the second plaintiffs.

1.	The substance of orders 2 and 3 to be published together with notice of the adjourned hearing date of the application in a national newspaper.
2.	The matter be adjourned to Friday, 11 November 2005 at 9.30 am.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1935 OF 2005

JUDGE:	GYLES J
DATE:	19 OCTOBER 2005
PLACE:	SYDNEY

Federal Court of Australia

McGrath, in the matter of Henry Walker Eltin Group Limited (Administrators Appointed) (ACN 007 710 483) (with Corrigendum dated 10 November 2005) [2005] FCA 1479 (19 October 2005)