Case: Hayes, in the matter of Estate Property Group Ltd (Administrators Appointed) [2007] FCA 935
Outcome: referred to
In Hayes, in the matter of Estate Property Group Ltd (Administrators Appointed) [2007] FCA 935 , Gyles J took a slightly different approach from that which was adopted in the cases referred to above. His Honour made orders extending the convening period for up to 60 days but he reserved consideration of any application to further extend the period if a case were made out for such a further extension. His Honour said he would then exercise the power provided for by s 447A. (See also Hall, in the matter of Australian Capital Reserve Ltd (Administrators Appointed) [2007] FCA 1328 at [1] ). The effect of the approach taken by Gyles J, if adopted in the present case, would be for an extension of time to be dealt with in stages and that is a matter I have considered carefully in considering the application that was made to me this morning. 25 It seems to me that there are three reasons why I ought to grant the extension of up to 90 days as sought by the administrators rather than to adopt the staged process suggested by Gyles J. 26 The first reason is that the cases indicate that an extension of two and a half to three months is not unusual where there is a relatively complex sale process. Bearing in mind the intervention of the holiday period, it seems to me that the effect of the orders which are presently sought is to grant an extension of up to two and a half months, because the Christmas and New Year holiday period intervenes and it is not unusual for a period of up to two working weeks to be lost as a result of that holiday period. 27 Second, I have taken into account that Mr McMaster considers that if the sale process is completed in a shorter period of time than is currently anticipated, the administrators will immediately look to convene a meeting of creditors because there is no value in prolong the process for any longer than is necessary. That is the importance of the extension for 'up to' 90 days rather than for a fixed period of 90 days. It allows a degree of flexibility, which would not otherwise be available in accordance with the process contemplated by s 439A(2) , (5) and (6). I accept Mr McMaster's opinion and I note that the statements made by the two creditors who oppose an extension for up to 90 days seem to proceed upon the basis that there will actually be an extension to 30 March 2009, whereas in truth, what is proposed is that the extension be for up to 90 days. Accordingly, as Mr McMaster has said, if he is able to do so, he will convene the meeting of creditors earlier than 30 March 2009. 29 It seems to me that there is a benefit to the administration in extending the convening period only once rather than adopting the staged process suggested by Gyles J. That is not to say that in an appropriate case the process contemplated by Gyles J would not be suitable. But in this case where the administrators are of the view that the company will be able to meet post-appointment cash flow, in effect, obtaining the benefit of the moratorium period provided for in Pt 5.3A , the staged process would not be of any utility. Indeed, it would be costly in the administration and would divert resources from the completion and attention to the details of the sale process which is now being undertaken. 30 I have already referred to the fact that extension is not for a fixed period, but is for a period of up to 90 days, and that Mr McMaster says if he is able to do so, he will convene the meeting of creditors at the earliest possible time. He does not wish to prolong the process unnecessarily. Mr McMaster is an experienced administrator and I consider that I ought to act upon the statement set out in [43] of his affidavit. 31 For these reasons, I propose to make the orders set forth in [1] to [7] of the short minutes of order which I have signed and dated and placed with the Court papers. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 20 January 2009 Counsel for the Plaintiffs: I M Jackman SC Solicitor for the Plaintiffs: Baker &amp; McKenzie Date of Hearing: 16 December 2008 Date of Judgment: 16 December 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1933.html