FEDERAL COURT OF AUSTRALIA

McGrath, in the matter of HWE Civil Pty Limited (Subject to Deed of Company Arrangement) (ACN 106 551 302) [2005] FCA 1883

CORPORATIONS – administration – remuneration – deed of company arrangement

Corporations Act 2001 (Cth), s 447A

Re Motor Group Australia Pty Limited (Administrators Appointed (No 3) (2005) 55 ACSR 34 followed 

IN THE MATTER OF HWE CIVIL PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 106 551 302) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO (ALL SUBJECT TO DEED OF COMPANY ARRANGEMENT)

ANTHONY GREGORY MCGRATH, SCOTT BRADLEY KERSHAW, JOSEPH DAVID HAYES AND SHAUN ROBERT FRASER (IN THEIR CAPACITY AS VOLUNTARY ADMINISTRATORS OF HWE CIVIL PTY LIMITED) (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 106 551 302) AND THE COMPANIES LISTED IN SCHEDULE 1 (ALL SUBJECT TO DEED OF COMPANY ARRANGEMENT) AND ACN 009 366 036 PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT AND HWE CIVIL PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 106 551 302) AND THE COMPANIES LISTED IN SCHEDULE 1 (ALL SUBJECT TO DEED OF COMPANY ARRANGEMENT) AND ACN 009 366 036 PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)

NSD 2367 OF 2005

GYLES J

22 DECEMBER 2005

SYDNEY

IN THE MATTER OF HWE CIVIL PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 106 551 302) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO (ALL SUBJECT TO DEED OF COMPANY ARRANGEMENT)

THE COURT ORDERS THAT:

1.         Pursuant to s 447A of the Corporations Act 2001 (Cth) (the Act) Pt 5.3A of the Act is to operate in relation to each of the second plaintiffs and the third plaintiff, as if s 449E of the Act read:

(1)        For the purposes of advising and assisting the administrator of a company under a Deed of Company Arrangement, there must be a Committee of Inspection (the committee) to which the rules set forth in the Corporations Regulations Schedule 8A, paragraph 11, sub-paragraphs (a)–(g) inclusive shall apply, and are incorporated by reference as if fully set out herein, but with sub-paragraph (b) amended to include the words ‘or a meeting held pursuant to s 439A of the Act’ and sub-paragraph (d) amended by deleting the words ‘under this Deed’.

(2)        Subsection 548(3) and ss 549, 550 and 551 of the Act apply, with such modifications as are necessary, to a committee established under subs (1) as if the references to the liquidator were references to the administrator of a company under a deed of company arrangement and the references to contributories were deleted.

(3)        Subsections 473(3), (4), (5) and (6) of the Act shall apply, with such modifications as are necessary, to a company under administration or under a deed of company arrangement and to a committee of inspection established under sub-section (1), as if references to a liquidator were references to an administrator of a company or administrator under a deed of company arrangement.

(4)        This section shall operate in relation to a committee already appointed under a Deed of Company Arrangement.

2.         Pursuant to s 447A of the Act, Pt 5.3A  of the Act is to operate in relation to each of the second plaintiffs and the third plaintiff such that liberty be granted to any person who can demonstrate sufficient interest to modify or discharge these orders upon appropriate notice having been given to the applicants.

3.         The first plaintiffs shall cause notice of these orders to be given to all parties claiming to be creditors of a plaintiff company.

4.         The costs of the application be a cost under the Deeds of Company Arrangement of the second plaintiffs and the third plaintiff.

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

IN THE MATTER OF HWE CIVIL PTY LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT) (ACN 106 551 302) AND THE COMPANIES LISTED IN SCHEDULE 1 HERETO (ALL SUBJECT TO DEED OF COMPANY ARRANGEMENT)

REASONS FOR JUDGMENT

1                     The second plaintiffs have each executed a Deed of Company Arrangement (DOCA) the effect of which has been described as a ‘pooling’ DOCA.  The third plaintiff has executed a DOCA which is a ‘stand alone’ DOCA.  The first plaintiffs are the voluntary administrators in relation to each DOCA. 

2                     The purpose of the application is to enable the administrators’ remuneration under each DOCA to be fixed by a committee of inspection provided for by each DOCA in the first instance.  The effect of the proposed orders is to institute a process which mirrors that for remuneration for Court appointed liquidators pursuant to s 473 of the Corporations Act 2001 (Cth) (the Act).  The application is made pursuant to s 447A of the Act. 

3                     The power to make these orders and the circumstances which might justify such orders were discussed by Hely J in Re Motor Group Australia Pty Limited (Administrators Appointed (No 3) (2005) 55 ACSR 34.  The orders sought in this application are modelled on the orders made in that matter.  I am informed that Finkelstein J made similar orders in Re Ion Limited (Administrators Appointed) (VID 92 of 2005) on 15 February 2005 without reasons. 

4                     In the present case, the creditors resolved at the meetings pursuant to s 439A to establish a committee of inspection for each DOCA and that the committee of inspection be charged with power to fix the remuneration of the administrators.  I also note that the overriding discretion of the Court is not affected by the orders proposed. 

5                     I am satisfied that the orders sought are appropriate with one addition.  The liberty to apply reserved preserves the position of any opposing creditor but, in order to make this effective, it is necessary to give notice to creditors of the making of the order.  The orders should be made as sought with the addition of the following order:

‘The first plaintiffs shall cause notice of these orders to be given to all parties claiming to be creditors of a plaintiff company.’

This is not the occasion to deal with the manner in which the orders will operate in practice.

Associate:

Dated:              22 December 2005

SCHEDULE 1

All subject to Deed of Company Arrangement

Company                                                                                         ACN

Bulumba Pty Limited ..................................................................  008 060 240

Capnorth Developments Pty Limited........................................... 009 640 251

Castlemaine Wastewater Treatment Pty Limited .........................  081 417 030

HWE Finance Pty Limited

HWE Land Pty Limited ..............................................................  009 593 668

HWGL Services Pty Limited....................................................... 009 614 788

HWIO Pty Limited ....................................................................  009 615 436

Inventive Pty Limited................................................................... 072 445 179

LSM Projects Pty Limited........................................................... 009 639 310

Northaust Auto Hire Pty Limited................................................. 106 580 134

Simon Engineering (Australia) Holdings Pty Ltd........................... 009 639 490

Simon Engineering (Australia) Pty Limited.................................... 000 142 165

Bridge Autos Pty Limited............................................................ 000 117 000

Dover Investments Pty Limited.................................................... 009 625 816

Castleton Pty Limited.................................................................. 009 637 914

Eltin International Pty Limited...................................................... 009 210 664

Eltin Open Pitt Operations Pty Limited........................................ 009 211 456

                                                                                                    008 918 278