Case: Re Daisytek Australia Pty Ltd [2003] FCA 575 ; (2003) 45 ACSR 446
Outcome: cited
overlapping considerations affecting the exercise of the discretion whether to extend the convening period may be summarised as follows: (a) the Court should recognise the objective of speed of administration that was associated with the introduction of Part 5.3A by the Corporate Law Reform Act 1992 (Cth) as from 23 June 1993. The Court should also recognise the objectives stated in para 507 of the explanatory memorandum associated with the Bill for that Act, that it was expected that the power to extend the period would be exercised infrequently since it is an important objective of Part 5.3A that creditors be fully informed about the company's position as early as possible and have an opportunity to vote on its future as soon as possible: Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611 (Young J) at 612; Re Geraldton Building Co Pty Ltd (Administrators Appointed); ex parte Trevor [2000] WASC 320 (Owen J) at [5]; (b) the function of the Court is to strike an appropriate balance between the legislature's expectation that the administration will be a relatively swift and summary procedure, and the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders: Re Diamond Press Australia Pty Limited [2001] NSWSC 313 (Barrett J) at [10]; Re Pan Pharmaceuticals Ltd [2003] FCA 598 ; (2003) 46 ACSR 77 (Lindgren J) ( Pan Pharmaceuticals ) at [42]; Re New Horizons Corporation; ex parte De Vries [2004] NSWSC 253 (Austin J) at [5]; (c) the prospects of a better outcome for creditors through a longer period of administration may outweigh the general expectation of a prompt resolution of the administration : Re Fincorp Group Holdings Pty Ltd (2007) 62 ACSR 192 (Barrett J) ( Fincorp ) at [18]; (d) a particular consideration against the too ready grant of an extension is the fact that while the voluntary administration continues there is an embargo or moratorium on the enforcement of remedies by secured creditors, lessors and others: Fincorp 62 ACSR 192 at [4]; Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 (Jacobson J) at [9]; (e) the application is to be assessed by reference to whether an extension is necessary to enable the administrators to prepare and provide the report and statements, and, in particular, to arrive at the opinion referred to in s 439A(4), in order to inform creditors adequately so that they will be in a position to decide whether to terminate the administration, execute a deed of company arrangement or place the company in liquidation : Pan Pharmaceuticals [2003] FCA 598 ; (2003) 46 ACSR 77 at [41] ; ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No.7) [2009] FCA 454 (Emmett J) ( ABC Learning Centres) at [28]; (f) it is often desirable that any extension be accompanied by an order under s 447A, permitting the meeting to be held at any time during the convening period as extended: see the order made in Re Daisytek Australia Pty Ltd [2003] FCA 575 ; (2003) 45 ACSR 446 ( Daisytek ) at [10] [18]. In Daisytek [2003] FCA 575 ; 45 ACSR 446 , I noted that the granting of an extension of time left untouched the problem that s 439A(2) required that the meeting be held within five business days after the extended convening period. The 2007 Act altered the position to require that the meeting be held within five business days before or within five business days after the end of the convening period or that period as extended. The plaintiffs seek an order under s 447A of the Act that would permit the holding of the meeting at any time within the period of the extended convening period and five business days thereafter. It was my opinion that such a " Daisytek order" should be made. Such an order has often been made; cf Lombe [2009] NSWSC 110 , In the matter of Global Food Equipment Pty Ltd (Under Administration); Carter v Global Food Equipment Pty Ltd (2007) 25 ACLC 1173 ; [2007] NSWSC 901 (White J); In the matter of LED Builders Pty Ltd (Administrators Appointed) [2008] NSWSC 633 (Austin J).