In the matter of New Cap Reinsurance Corporation Limited (in liquidation) (subject to a scheme of arrangement)

[2012] NSWSC 1648

Supreme Court

New South Wales

Medium Neutral Citation:	In the matter of New Cap Reinsurance Corporation Limited (in liquidation) (subject to a scheme of arrangement) [2012] NSWSC 1648
Hearing dates:	11 September 2012
Decision date:	11 September 2012
Jurisdiction:	Equity Division - Corporations List
Before:	Black J
Decision:	Order granted for extension of time for the convening of the next annual general meeting of the First Plaintiff's creditors with specified directions.
Catchwords:	CORPORATIONS - Winding up - Voluntary winding up - Order sought for extending the time for convening of annual general meeting of plaintiff's creditors under s 508(1)(b) Corporations Act 2001 (Cth) - Whether extension of time will save costs for creditors - Whether risk of injustice to any party.
Legislation Cited:	- Corporations Act 2001 (Cth) ss 447A, 508, 508(1)(b), 1322(4), 1322(4)(d)
Cases Cited:	- Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157 - NRMA Insurance Group Ltd v Spragg [2001] NSWSC 381; (2001) 38 ACSR 174
Category:	Interlocutory applications
Parties:	New Cap Reinsurance Corporation Limited (in liquidation) (subject to a scheme of arrangement) (First Plaintiff) John Raymond Gibbons in his capacity as liquidator of New Cap Reinsurance Corporation Limited (in liquidation) (Second Plaintiff)
Representation:	Counsel: J.L. Chambers (Plaintiff) Solicitors: Henry Davis York (Plaintiff)
File Number(s):	2012/283289

Judgment - EX TEMPORE

1. The Plaintiffs, New Cap Reinsurance Corporation Limited (in liquidation) (subject to a scheme of arrangement) ("NRCA") and Mr John Gibbons, in his capacity as liquidator of NCRA, apply for an order extending the time for the convening of the next annual general meeting of the first plaintiff's creditors required under s 508(1)(b) of the Corporations Act 2001 (Cth) to 31 October 2012. The Plaintiffs also seek certain ancillary directions in respect of that order.

1. Paragraph s 508(1)(b) of the Corporations Act provides for meetings of creditors in the case of a voluntary winding up which continues for a period of more than one year to be convened in the manner set out in that section. Section 1322(4) in turn provides that the Court may, on the application of any interested person, make an order extending the period for doing, relevantly, any act under the Corporations Act and make such consequential or ancillary orders as the Court thinks fit. Before the Court makes an order under that section, it must be satisfied that no substantial injustice has been or is likely to be caused to any person.

1. By way of background, Mr Gibbons was appointed as voluntary administrator of NCRA on 21 April 1999 and was subsequently appointed as its liquidator. In April 2008, NCRA's creditors approved a scheme of arrangement which became effective in that month and Mr Gibbons is also one of the scheme administrators under the terms of the scheme.

1. Mr Gibbons would presently be required to convene an annual meeting of creditors under s 508(1)(b) of the Corporations Act by 30 September 2012. Mr Gibbons' evidence is that he considers that meeting should be held in London, as that is the place where the majority of creditors are present and is likely to be the most convenient place for those creditors. In parallel to the meeting to be convened under s 508, it is intended to hold a further meeting under the scheme to consider whether to cause the liquidation to enter what is referred to, in the scheme documentation, as its cut off phase. The creditors' committee have resolved to approve the convening of a meeting to consider that matter, which will also be held in London for the same reason. Mr Gibbons' evidence is, not surprisingly, that it would be convenient and cost effective for the relevant meetings to be held on the same day in London. He also notes that a minimum of 28 days' notice is required for the convening of the scheme meeting, so it would not presently be possible to convene the scheme meeting prior to the latest date on which the meeting of creditors could presently be convened.

1. The application for an extension of time is primarily brought under s 1322(4)(d) of the Corporations Act. It is well established that the Court's power under that section is remedial in nature and to be construed liberally: Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157 at 160. Both NCRA and Mr Gibbons are interested persons who have standing to bring an application under that section, since each has a plain and proper interest in the cost-effective implementation of the winding up and the scheme. There have been several cases in which companies that have been required to convene meetings, on requisitions by their shareholders, have been treated as having standing in applications for extension of time to convene such meetings and, indeed, in which such extensions of time have been granted in circumstances similar to this case: for example, NRMA Insurance Group Ltd v Spragg [2001] NSWSC 381; (2001) 38 ACSR 174 at [27].

1. In the present case, Ms Chambers, who appears for the plaintiffs, identifies several reasons which are, I think, properly described as compelling for the grant of an extension of time to hold the meeting required under s 508 of the Corporations Act. First, particularly where it is desirable for the relevant meetings to be held in London, there will be significant additional costs incurred in holding two separate meetings, including the costs of separate travel to London for Mr Gibbons and necessary staff. A saving of those costs is plainly of benefit to creditors of NCRA. Second, there would be significant inconvenience in requiring the liquidator and his staff to undertake such travel twice, and equally in requiring NCRA's creditors to attend two separate meetings on two separate days when they could be afforded the opportunity of attending those meetings on a single day.

1. Mr Gibbons has given evidence of his view that no detriment, let alone substantial injustice, is likely to be caused to any person if the application for an extension of time to hold the meeting under s 508 of the Corporations Act is granted. I can see no reason to take a contrary view, and all the evidence before me suggests that this, like the application in NRMA Insurance Group Ltd v Spragg, is a case in which the overall justice to all parties favours the grant of the application, and no risk of injustice or substantial injustice to any party arises from the grant of the application. I am reinforced in that view, because as Ms Chambers points out, the additional time sought to hold the meeting under s 508 of the Corporations Act is relatively short, being in any event, less than a month. Any disadvantage of such delay is of little significance by comparison with the savings of cost and avoidance of inconvenience in convening the meetings on the same date. It is also significant that the application is not opposed by the members of NCRA's committee of inspection and creditors' committee who have been notified of the application.

1. In these circumstances, I am satisfied that this is a proper case for the making of an order under s 1322(4)(d) of the Corporations Act extending the time for the convening of the next annual meeting of NCRA's creditors required under s 508(1)(b) of the Corporations Act. On the basis that an order extending that time is made under that section, it is not necessary for me to make a further order under s 447A of the Corporations Act.

1. Accordingly, I make the following orders:

1. An order extending the time for the convening of the next annual general meeting of the first plaintiff's creditors required under s 508(1)(b) of the Corporations Act, to 31 October 2012.

2. A direction that the second plaintiff circulate a copy of the orders as made by the Court to each member of the first plaintiff's committee of inspection within 7 days of the orders being entered.

2. An order granting the plaintiffs and any member of the first plaintiff's committee of inspection liberty to apply on 7 days' notice.

4. An order that the Plaintiffs' costs of the proceedings be costs in the liquidation.

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