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Federal Court of Australia |
Last Updated: 13 February 2006
FEDERAL COURT OF AUSTRALIA
In the matter of E.Commerce Pty Limited (Administrator Appointed) ACN 073 417 580 [2006] FCA 75
IN
THE MATTER OF E.COMMERCE PTY LIMITED (ADMINISTRATOR APPOINTED) ACN 073 417
580
NSD 128 OF 2006
GRAHAM J
24
JANUARY 2006
SYDNEY
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DATE OF ORDER:
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WHERE MADE:
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THE COURT ORDERS THAT:
1. The meeting of creditors of E.Commerce Pty Ltd convened on 25 November 2005 for 2 December 2005 may be further adjourned beyond 31 January 2006 to no later than 4pm on 7 March 2006.
2. Liberty be granted to any creditor or the Australian Securities and Investments Commission to apply on 3 days’ notice in writing to the administrator for such relief as they be advised to seek.
3. A copy of the orders herein and of the reasons for judgment be served on the Australian Securities Investments Commission on or before 31 January 2006.
4. The costs of the application as from 2.30 pm today be costs in the administration, such costs to include the preparation of the originating process.
Note: Settlement and
entry of orders is dealt with in Order 36 of the Federal Court Rules.
REASONS FOR JUDGMENT
1 These proceedings were commenced today by an originating process filed in court and made returnable instanter. The Plaintiff is E.Commerce Pty Limited (Administrator Appointed) ACN 073 417 580.
2 On 29 September 2005 the Deputy Commissioner of Taxation instituted winding-up proceedings in relation to E.Commerce Pty Limited. Those proceedings, NSD 1842 of 2005, have been adjourned for further hearing on 10 February 2006.
3 Subsequent to the institution of the winding-up proceedings, an administrator was appointed to the Plaintiff on 7 November 2005 in accordance with s 436A of the Corporations Act 2001 (Cth) ("the Act"). The administrator, Mr Peter Krejci, prepared reports for the creditors and by notices of meeting dated 25 November 2005, convened a meeting of creditors of the company for Friday, 2 December 2005. At this meeting it was for the creditors to resolve that the company execute a Deed of Company Arrangement, or that the administration should end, or that the company be wound up, or that the meeting be adjourned for a period of up to 45 days. The meeting which was convened for 2 December 2005 was adjourned to 16 January 2006.
4 Under s 439B(2) of the Act, a meeting convened under s 439A, which relevantly applies to this meeting, may be adjourned from time to time, but cannot be adjourned to a day that is more than 60 days after the first day on which the meeting was held. The relevant 60 day period would expire on 31 January 2006. On 16 January 2006 a resolution was passed by the creditors in the following terms:
"That the meeting be adjourned for a minimum of up to fifteen (15) days and subject to seeking orders under section 447 of the Corporations Act 2001, to extend the Voluntary Administration beyond 60 days and that the meeting be adjourned to a date no later than 7 March 2006."
5 In the proceedings just instituted, the Plaintiff seeks an order under s 447A or s 1322(4)(d) of the Act that the period of time for the adjournment of the second meeting of creditors, that is to say the meeting with which we are presently concerned, be extended to 7 March 2006 at 4 pm.
6 The Administrator urges upon the Court that it would be in the interests of the creditors for relief to be granted which would permit the adjourned meeting to proceed in early March, but no later than 4 pm on 7 March 2006. The suggestion is that the company's major asset is the domain name "www.ecommerce.com.au". The domain name, if sold in conjunction with the company's interest in another company known as "No Office Pty Limited", may bring approximately $200,000. The Administrator has expressed the opinion that the Deputy Commissioner of Taxation may end up receiving a distribution of 80 cents in the dollar.
7 The Deputy Commissioner of Taxation has today recorded her consent to the relief proposed. I must say that I am troubled as to the power of the Court to alter the 60 day time limit for which the legislature provided in s 439B(2) of the Act. It does not seem to me that the relief presently sought is for an extension of the period for doing any act, matter or thing, nor is it an application for an order extending the period for instituting or taking any proceeding in relation to a corporation.
8 As to the operation of s 447A(1) of the Act, it could be said that that sub-section is concerned with the making of orders by the Court within the framework set by the legislature for the operation of administration matters, rather than for the Court to make orders which would effectively alter that statutory framework. The illustration provided by s 447A(2) of the Act seems to lend support for that proposition. Having said that, I note that in Re LOCM Pty Limited (1997) 25 ACSR 349, Goldberg J entertained a similar application to that presently before the Court. His Honour expressed the same concern that s 447A may not have been intended by the legislature to allow the statutory time limit of 60 days fixed by s 439B(2) to be amended.
9 However, his Honour referred to the numerous single Judge decisions which have taken a different approach to the construction of s 447A. Inter alia, his Honour referred to a judgment of Brownie J in Re Taylor (1995) 16 ACSR 774, where his Honour accepted that there was power to make an order extending the time fixed by s 439B(2), relying simply upon a judgment of Young J in Cawthorn v Keira Constructions Pty Limited (1994) 33 NSWLR 607. In that case Young J had described the provisions of s 447A as conferring plenary powers upon the Court.
10 On the premise that judges at first instance should construe the provisions of the Act in a uniform manner unless of the view that the interpretation offered was plainly wrong, I am disposed to fall into line with those judges who have previously found that the power exists under s 447A of the Act to alter the 60 day period. Having said that, it is plain that the legislature intended that administrations should not be open-ended. Accordingly, if any alteration of the 60 day time limit was to be allowed, it should be strictly limited.
11 In the case before Goldberg J, a three month adjournment was sought, but his Honour was only prepared to entertain an extension of time for a further 60 days. Given the nature of the time limit imposed by s 439B(2), I do not consider that the Court has power to grant relief in accordance with s 1322(4)(d) of the Act.
12 It may be that another way of approaching the matter favourable to the Administrator would be to construe the resolution, which was passed on 16 January 2006, as one purporting to adjourn the creditors' meeting to a day that was more than 60 days after the first day on which the meeting was held. It would then seem possible for relief to be granted under s 1322(4)(a) of the Act, with the Court declaring that the adjournment beyond the 60 day period was not invalid by reason of a contravention of s 439B(2) of the Act.
13 However, given my inclination to follow the approach adopted by Goldberg J in Re LOCM Pty Limited (Administrator Appointed), it is unnecessary for me to consider the operation of s 1322(4)(a) in the circumstances.
14 For the reasons indicated, I am of the opinion the Plaintiff should, in the special circumstances of this case, be granted relief generally in accordance with the originating process.
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I certify that the preceding fourteen (14) numbered paragraphs are a true
copy of the Reasons for Judgment herein of the Honourable
Justice Graham.
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Associate:
Dated: 24 January 2006
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Solicitor for the Plaintiff:
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T Hall of HAL Lawyers
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Date of Hearing:
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24 January 2006
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Date of Judgment:
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24 January 2006
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/75.html