J Aron Corporation v Newmont Yandal [2005] NSWSC 238

New South Wales Supreme Court

CITATION : J Aron Corporation v Newmont Yandal [2005] NSWSC 238

HEARING DATE(S) : 14-16 March 2005

JUDGMENT DATE : 24 March 2005

JURISDICTION : Equity

JUDGMENT OF : Austin J

DECISION : Question 1 for separate determination answered "yes"; questions 2-8 answered "does not arise"

CATCHWORDS : CORPORATIONS - voluntary administration - creditors' meeting to resolve that the company execute a deed of company arrangement - 14 companies in corporate group - concurrent meetings - whether creditors entitled to vote with respect to each company by virtue of deed of cross-guarantee - single resolution passed - whether effective in respect of each of the 14 group companies - effect of chairman's abstention from voting of proxies

Corporations Act 2001 (Cth) s 439A LEGISLATION CITED : Corporations Regulations, regs 5.6.20, 5.6.21, 5.6.23

Barclays Bank Ltd v TOSG Trust Fund Ltd [1984] 1 AC 626 Bovis Lend Lease Pty Ltd v Wily (2003) 45 ACSR 612 Codelfa Construction Pty Ltd v State Rail Authority (1982) 149 CLR 337 Expile Pty Ltd v Jabb's Excavations Pty Ltd [2004] NSWSC 284 J Aron Corporation v Newmont Yandal [2004] NSWSC 1145 Jarbin Pty Ltd v Clutha Ltd (in liq) (2004) 208 ALR 242 CASES CITED : Mentha v GE Capital Ltd (1997) 27 ACSR 696 Myer Queenstown Garden Plaza Pty Ltd v City of Port Adelaide (1975) 11 SASR 504 Re Buckleys Earthmoving Pty Ltd (in liq) (1995) 15 ACSR 732 Re JN Taylor Holdings Ltd (in liq) (1991) 6 ACSR 187 Selim v McGrath (2003) 47 ACSR 537 Vincent, White & Associates Pty Ltd v Vouris (1998) 28 ACSR 93 Westpac Banking Corporation v Gollin & Co Ltd [1988] VR 397

The J Aron Corporation and The Goldman Sachs Group Inc (P/XD1) Newmont Yandal Operations Pty Ltd (D/XC1) Mark Anthony Korda and Mark Francis Xavier Mentha (XD2) Clynton Court Pty Ltd (Subject to a Deed of Company Arrangement) (XD3) Australian Metals Corporation Pty Ltd (XC2) Eagle Mining Pty Ltd (XC2) Great Central Holdings Pty Ltd (XC2) Great Central Investments Pty Ltd (XC2) PARTIES : Great Central Mines Pty Ltd (XC2) Hunter Resources Pty Ltd (XC2) Matlock Castellano Pty Ltd (XC2) Newmont Wiluna Gold Pty Ltd (XC2) Newmont Wiluna Metals Pty Ltd (XC2) Newmont Wiluna Mines Pty Ltd (XC2) Quotidian No 117 Pty Ltd (XC2) Newmont Australia Ltd (XC3)

FILE NUMBER(S) : SC 2407/04

V R Gray (P) COUNSEL : T Bathurst QC & M Henry (D) J Beach QC, R Dick & V Whittaker (XD2, XD3)

Abbott Tout (P) Arnold Bloch Leibler (D) SOLICITORS : Gadens Lawyers (XD2, XD3)

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

AUSTIN J

THURSDAY 24 MARCH 2005

2407/04 THE J ARON CORPORATION & ANOR V NEWMONT YANDAL OPERATIONS PTY LTD JUDGMENT (Revised for typographical errors 24 March 2005) 1 HIS HONOUR: Consequent upon my judgment handed down on 29 November 2004 (J Aron Corporation v Newmont Yandal [2004] NSWSC 1145, "my 29 November judgment"), I have made orders for the separate determination of eight questions, set out in Appendix A to my 29 November judgment. Questions 2 to 8 do not arise unless I answer Question 1 in the negative. 2 Question 1 is in the following terms: "1. At the second meeting of creditors held on 29 August 2003 under s 439A of the Corporations Act, did the creditors of each of the following NYOL Group companies ('Companies') pass resolutions pursuant to s 439C that each of the Companies execute deeds of company arrangement: Clynton Court Pty Ltd ('Clynton') Quotidian No.117 Pty Ltd Australian Metals Corporation Pty Ltd Great Central Holdings Pty Ltd Great Central Investments Pty Ltd Great Central Mines Pty Ltd Matlock Castellano Pty Ltd Matlock Mining Pty Ltd Newmont Wiluna Metals Pty Ltd?" 3 Question 1 is primarily a question of fact, whereas Questions 2 to 8 are questions of law, all premised on a negative answer to Question 1. At the hearing for the determination of the separate questions on 14, 15 and 16 March 2005, I heard evidence and submissions going to Question 1, but not Questions 2 to 8. I did this on the basis that if I reached the conclusion that the correct answer to Question 1 were "yes", then it would not be necessary to hear argument on the answers to the other questions, because in each case the correct answer would be "the question does not arise". 4 At the conclusion of the hearing with respect to Question 1 on 16 March, I reached the conclusion that the correct answer to Question 1 is "yes". Consequently I did not proceed to hear argument on Questions 2 to 8. With the concurrence of the parties, I announced my decision on Question 1, and reserved my reasons for decision. I now publish those reasons. NYOL Group structure and business 5 Newmont Australia Ltd is the Australian holding company in a group of companies which conduct gold mining operations in Western Australia. The ultimate holding company is Newmont Mining Corporation, Inc, a United States company. Newmont Yandal Operations Pty Ltd, the defendant, is a subsidiary of Newmont Australia, and is in turn the holding company for 13 other companies, including Clynton Court Pty Ltd. I shall refer to Newmont Yandal Operations as "NYOL" and to that company and its subsidiaries, together, as "the NYOL Group". 6 The business of the NYOL Group concerned gold exploration and gold mining at three operative gold mines, namely Jundee, Bronzewing and Wiluna. The deed of cross-guarantee 7 On 18 June 1998 each of the Companies of the NYOL Group executed a deed of cross-guarantee to enable them to obtain the benefit of the Australian Securities and Investments Commission's class order (then Class Order No 95/1530) permitting lodgement of consolidated financial statements. The trustee named in the deed was NYOL, which was also the Holding Company. The deed included the following provisions:

"'Creditor' means a person (whether now ascertained or ascertainable or not) other than a Group Company to whom now or at any future time a Debt (whether now existing or not) is or may at any future time be or become payable;"

"'Debt' means any debt or claim which is now or at any future time admissible to proof in the winding up of a Group Company and no other claim;"

"2.1 This Deed of Cross Guarantee will be of no force and effect until the Holding Company has submitted an original of this Deed of Cross Guarantee for lodgement at the Commission and has obtain the approval of the Commission for this Deed of Cross Guarantee."

"3.1 Each Group Company covenants with the Trustee for the benefit of each Creditor that the Group Company guarantees to each Creditor payment in full of any Debt in accordance with this Deed of Cross Guarantee. 3.2 Each Group Company agrees that this Deed of Cross Guarantee becomes enforceable in respect of the Debt of a Group Company ('the Group Company'): (a) upon the winding up of the Group Company under subsection 459A or paragraph 461(a) or (h) or (j) of the Corporations Law or as a creditors' voluntary winding up under Part 5.5 Division 3 of the Corporations Law; or (b) in any other case - if six months after a resolution or order for the winding up of the Group Company any Debt of a Creditor of the Group Company has not been paid in full. 3.3 Subject to clause 3.4 [relating to the appointment of an Alternative Trustee], the Trustee and each Group Company acknowledge that the Trustee (including the Alternative Trustee) holds the benefit of the covenants and commitments of each Group Company made pursuant to this Deed upon trust for each Creditor."

"6.1 As a separate covenant by way of Deed Poll each Group Company agrees with each Creditor that the Group Company will guarantee to each Creditor payment of any Debt due to the Creditor from any other Group Company in accordance with this Deed of Cross Guarantee."

"7.1 The only obligations of the Trustee (including the Alternative Trustee if applicable in respect of the Trustee where the Trustee is the Holding Company for a Group Company) are: (a) to act as bare Trustee for the benefit of each Creditor of the Covenants of each Group Company contained in this Deed of Cross Guarantee; (b) upon request to assign to any Creditor the benefit of this Deed of Cross Guarantee insofar as it benefits that Creditor (such assignment to be at the cost of the Creditor who must fully indemnify the Trustee); (c) to permit its name to be used in any demand or notice made or given by or legal proceedings brought by any Creditor seeking to enforce the benefit of this Deed of Cross Guarantee (but the Creditor must fully indemnify the Trustee and provide the Trustee with any reasonable security for costs which the Trustee may require); (d) upon request to lodge in its name on behalf of any Creditor or Creditors a proof of Debt in the winding up of a Group Company of a claim under this Deed of Cross Guarantee (such a proof to be at the cost of the Creditor or Creditors who must fully indemnify the Trustee); and (e) to execute a release pursuant to clause 4.4 or 4.7 when required to do so. 7.2 The Trustee has no duty to supervise or monitor any Group Company or to claim or pursue any Debt or (except as provided in clause 7.1) to enforce this Deed of Cross Guarantee." 8 Thus, each company in the NYOL Group was liable under the guarantee given in clause 3 and by virtue of the agreement set out in clause 6, to each Creditor of each other company in the NYOL Group, if the conditions in the deed of cross-guarantee were satisfied. Additionally, under the general law of indemnity, any of the NYOL Group companies that was required to honour the guarantee in favour of a Creditor of another NYOL Group company would be entitled to be indemnified by that other NYOL Group company for the amount paid to the Creditor. This contingent entitlement to indemnity was referred to in the evidence of Mr Korda as "the Inter-Company Guarantee". 9 Shortly after executing the deed, the NYOL Group companies made an application under s 313 of the Corporations Law for order relieving them from compliance with certain requirements of the Corporations Law with respect to financial statements and audit. According to Mr Korda's evidence, the NYOL Group companies complied with the requirements of the Commission's class order. As from the 1998/99 financial year, the NYOL Group, relying on the class order, prepared accounts on a consolidated basis and did not prepare separate statutory accounts in respect of each company in the Group. The deed of cross-guarantee remained in place on 29 August 2003, the date of the meeting of creditors to which Question 1 refers. NYOL Group history and financing arrangements 10 The structure of the NYOL Group in 1998, when the deed of cross-guarantee was executed, was essentially the same as it was in August 2003. However, in about April 2000, Normandy Mining Ltd acquired all the shares in NYOL, through an intermediary company, Normandy Australia Ltd. Then in about April 2002, Newmont Mining Corporation acquired all the shares in Normandy Australia from Normandy Mining, thereby in effect acquiring the NYOL Group. It renamed Normandy Australia as Newmont Australia. 11 In around 1998 the NYOL Group entered into some financing arrangements, which should be briefly noted. First, NYOL issued some debt securities referred to as "senior notes" redeemable in April 2008, on which interest was payable to the noteholders in two instalments per year. Secondly, NYOL entered into ISDA Master Agreements for hedging transactions with various counterparties, and made hedge contracts pursuant to those master agreements, for the purpose of reducing the uncertainty and commercial risk associated with fluctuations in gold and currency prices. 12 At the time when Newmont Mining Corporation acquired the NYOL Group, April 2002, the Group had recorded substantial losses for the preceding two years. The Group's accounts for the financial year ending 30 June 2002, disclosed in a filing to the US Securities & Exchange Commission, showed a loss of A$488.1 million. That filing also disclosed that the NYOL Group's future gold sale obligations under the hedge contracts exceeded expected future production by about 2.4 million ounces at 30 June 2002. 13 The plaintiffs were counterparties to a master agreement and hedge contracts with NYOL. They gave notice in April 2003 that a "material adverse effect termination event" (as defined in the ISDA master agreement) had occurred, and in May 2003 they advised NYOL that they were terminating the contract and would require payment by it of the outstanding hedge position in full. The plaintiffs determined that the amount of NYOL's indebtedness was US$57.3 million. 14 In May 2003 a company in the Newmont Mining group called Yandal Bond Company Ltd ("Bondco") offered to acquire the positions of each of the counterparties to hedging contracts and to purchase the senior notes from the noteholders, in each case for 50% of their nominal value. Almost all of the noteholders, and all of the counterparties to hedge contracts other than the plaintiffs, had accepted Bondco's offers. The result was that, by 3 July 2003 (the deadline for acceptance of Bondco's offers) Bondco had become a very substantial creditor of the NYOL Group in substitution for almost all of the external financing creditors other than the plaintiffs. 15 During the course of negotiations between the plaintiffs and Bondco, each side obtained valuations of the NYOL Group's assets. Newmont Mining obtained a valuation report from Ferrier Hodgson fixing a valuation range of A$150-198 million. The plaintiffs obtained valuations of much higher amounts, in the range A$497-854 million. The voluntary administration, the report to creditors, and the Newmont Mining proposal 16 On 3 July 2003 Mark Korda and Mark Mentha, the third cross-defendants, were appointed administrators of each of the companies in the NYOL Group. Mr Korda gave evidence that he formed the view after investigation that the voluntary administration was precipitated by the dispute between Bondco and the plaintiffs as to the value of the NYOL Group's assets. The administrators commissioned Ernst & Young to provide a valuation. 17 Based on the history of the Group briefly described above, the administrators decided that for the purposes of conducting the voluntary administration, the Group should be treated as a single commercial and economic entity. They took particular account of the effect of the deed of cross-guarantee and the fact that since 1998 the Group's statutory accounts had been prepared on a consolidated basis. They decided to continue to operate the business of the Group, and Mr Mentha took charge of the business operations while Mr Korda took charge of the conduct of the statutory procedures of the administration and the assessment of creditor claims. 18 Mr Korda gave evidence that he separated the claims of creditors into five categories. The first category was employees (approximately US$2.9 million). The second was trade creditors (approximately US$20.6 million). 19 The third category, described by Mr Korda in his evidence as "other third party creditors" included: · the plaintiffs in respect of their claim under the terminated hedge contracts (a claim estimated by the administrators at US$56.5 million); · the holders of senior notes not acquired by Bondco, totalling approximately US$200,000; · the insurers of a company called Brandrill Ltd in respect of a property damage claim against NYOL; and · Mark Creasy, a prospector who had substantial claims arising out of the terms of sale to and occupation by NYOL of a mining tenement contiguous to the NYOL Group's mining activities. 20 The fourth category, described by Mr Korda as "Newmont Subsidiary Creditors", comprised certain Newmont Mining subsidiaries outside the NYOL Group, which claimed to be owed debts by the NYOL Group companies. Some of these claims were in respect of the supply of goods and services, but there was also the claim by Bondco by virtue of its acquisition of the senior notes and the rights of hedge counterparties. These claims totalled approximately US$437.7 million, 85% of the total indebtedness of the NYOL Group. 21 The fifth category was described by Mr Korda as "NYOL Inter-Group Creditors". This category comprised entities in the NYOL Group shown by the Group accounts to be creditors of other NYOL Group companies by virtue of transactions and loan accounts. In addition, according to Mr Korda's evidence, this category included each NYOL Group company in respect of the Inter-Company Guarantee. Mr Korda said he took the view during the administration that the deed of cross-guarantee created what he called a contingent liability of each NYOL Group company to each other NYOL Group company. 22 Shortly after the commencement of the administration, Newmont Mining Corporation's solicitor told Mr Korda that Newmont Mining intended to propose a deed of company arrangement, under which employees and trade creditors of the NYOL Group would receive a distribution of 100 cents in the dollar on their admitted claims, and the third party creditors (by far the largest being the plaintiffs) would receive a distribution of approximately 40 cents in the dollar. 23 Ernst & Young submitted their final valuation report on 19 August 2003, in which they value the NYOL Group assets at A$234-260 million. 24 On 20 August 2003 Mr Korda and Mr Mentha finalised their report to creditors for the purposes of s 439A(4) of the Corporations Act ("the Report"). The Report summarised the history of the Group, reported on the administrators' investigation into the financial position and affairs of the Group, set out the terms of the proposal by Newmont Mining for a deed of company arrangement, compared the position of creditors under that proposal with their prospective position in a liquidation, and made recommendations. 25 Mr Korda gave evidence that at the time he dispatched the Report to creditors he believed that the deed of cross-guarantee was operative, and that consideration of the financial position of the NYOL Group, for the purpose of forming his opinion under s 439A(4)(b), should be undertaken on a Group basis rather than a company-by-company basis. 26 Consistently with that view, the Report included the following matters: · in the summary of the history of the NYOL Group, the statement was made (page 7) that on 18 June 1998 each of the companies in the Group entered into a deed of cross-guarantee whereby each of them guaranteed payment in full of the debts of all others, and the Australian Securities Investment Commission subsequently approved their application to file consolidated group financial reports; · the summaries of the trading results and financial position of the NYOL Group (section 4) were given on a consolidated basis, and no attempt was made to set out the financial position of each entity in the Group separately; · similarly, the summaries of the claims of creditors (section 6) and asset values (section 7), and the liquidation analysis (section 8), were prepared on a consolidated basis; · the Newmont Mining proposal was explained as a proposal in respect of the Group, without any distinctions being drawn between individual entities in the Group (except the special position of Clynton Court as the administration company); · the administrators said that the implied value of the mine assets under the Newmont Mining proposal was A$295-305 million, which compared favourably with the valuation range in Ernst & Young's report. 27 The main points of the proposal by Newmont Mining Corporation, which involved a Principal Deed of Company Arrangement and various Secondary Deeds, may be broadly and approximately summarised as follows: · the NYOL Group would continue in existence and employees would remain in their current employment; · some of the NYOL Group assets together with cash from Newmont Australia would be provided to Clynton Court as the administration company for distribution to creditors; · other Group assets would be transferred to Newmont Australia; · certain "assumed claims" against NYOL Group companies would be novated to Clynton Court and thereupon the other NYOL Group companies would be free of those liabilities and would be returned to the directors; · Clynton Court would be released from the deed of cross-guarantee; · employees and trade creditors would receive 100 cents in the dollar for admitted claims; · the plaintiffs would participate in a fund of US$22.98 million for other creditors; and · if the distribution to a creditor was less than the likely amount that the creditor would have received in the winding up of the NYOL Group, Newmont Australia would meet the shortfall. 28 The administrators concluded the Report by expressing their opinion that would be in the creditors' interest for the deed of company arrangement proposed by Newmont Mining to be executed, and it would be not in the creditors' interest for the administrations to end or for the companies to be wound up. The notice of meeting and accompanying documents 29 The Report was sent to creditors with a covering circular of the same date. The heading of the circular referred to NYOL Group, identifying them as "the Companies". It said that "the second meetings of creditors" would be held (emphasis supplied), and enclosed the Report "concerning the affairs of the Companies" together with formal notice of the meetings, proxy forms and proof of debt forms. 30 The Notice of Meeting was headed "Notice of Second Meeting of Creditors of Companies under Administration" (emphasis supplied), the names of the 14 companies in the NYOL Group were set out, which were defined the purposes of the notice as "the Companies". Notice was given of "the second meetings of creditors of the Companies" (emphasis supplied). Under the heading "Agenda", the Notice said: "1. The purpose of the meetings is: (a) to review the report of the Administrators in connection with the business, property, affairs and financial circumstances of the Companies; and (b) for the creditors of each of the Companies to resolve: i. that the Company execute a deed of company arrangement; or ii. that the administration should end; or iii. that the Company be wound up. 2. A resolution will be considered to hold the meetings concurrently." 31 Other agenda items were then set out, relating to the administrators' remuneration and any other business. The Notice of Meeting said: "Creditors wishing to vote at the meetings, who will not be attending in person or are a company, must complete and return a Proxy Form by no later than 4 p.m. on the last business date prior to the meeting, by post to KordaMentha." 32 The enclosed proxy form made provision for insertion of "the Company name you are a creditor of". The proxy form did not, on its face, take into account the effect of the deed of cross-guarantee, or invite creditors to appoint their proxy in respect of the claims they might have against other NYOL Group companies in respect of their debts. 33 Mr Korda's evidence was that the requirement in the proxy form for the creditor to state the name of the company was a requirement to identify the NYOL Group company that was "principally" liable to the creditor, so that Mr Korda and his staff "could most efficiently cross-reference the proxy form to the creditor's proof of debt". 34 The enclosed proof of debt form was based upon Form 535 under reg 5.6.49(2). The heading of the form referred to the NYOL Group of companies and a full list of the Group companies was attached. The form made provision for the creditor to insert the "relevant Company name", and contained the assertion that the company was on 3 July 2003, and still was at the date of the proof of debt, justly and truly indebted to the creditor identified on form. Provision was made for particulars of the debt to be given. The proof of debt form made no provision to take into account the effect of the deed of cross-guarantee. 35 The administrators had also sent creditors a proof of debt form in advance of the first meeting of creditors held pursuant to s 436E(1) of the Corporations Act. The circular to creditors stated that they only needed to complete a proof of debt form for the purpose of the Second meeting if they had not completed one for the purpose of the first meeting. The Report said: "Creditors are required to have lodged proofs of debt by no later than 4 p.m. on Thursday, 28 August 2003, failing which they may be excluded from voting at the meeting." 36 Mr Korda gave evidence that the proof of debt form provided for the creditor to state the name of the company in the NYOL Group that he claimed was "principally" liable, so that Mr Korda and his staff could "most efficiently cross-reference the proof of debt to the books and records of the NYOL Group". He gave the following important evidence in his affidavit: "58. Accordingly, during this period [the period between dispatch of the Report and the holding of the second meeting of creditors] my staff (under my direction) and I: 58.1 reviewed each of the proofs of debt lodged by creditors and decided whether to admit, reject in part or reject in full each proof of debt, for the purpose of voting by each creditor at the Second Meeting, in respect of the NYOL Group company principally liable to each creditor; 58.2 where a creditor had been admitted in respect of a NYOL Group company principally liable to that creditor as described in paragraph 58.1 above, I also admitted that creditor as a contingent creditor of each other company in the NYOL Group by reason of the terms and effect of the Creditor Guarantee contained in the DOCG [the deed of cross-guarantee]; 58.3 made a just estimate of the amount of that contingent debt, for the purpose of regulation 5.6.23(2) of the Corporations Regulations ('the Regulations'), in the full amount of the claim as admitted …". 37 He also said that he admitted each NYOL Group company as a creditor of each other company in the NYOL Group for voting purposes. Where one Group company was a creditor of another Group company under an inter-company loan account, the creditor company was admitted for voting purposes for the full amount of the loan. Where there was no inter-company loan account between any two Group companies, the "creditor" company was admitted as a contingent creditor of the "debtor" company by reason of the Inter-Company Guarantee. In the latter case, he said, he made a just estimate of that contingent liability in each case in the sum of $1.00. The evidence includes forms of proof of debt lodged by the administrators on behalf of NYOL in the administration of several other NYOL Group companies, each in the sum of $1.00 for "indemnity under cross-guarantee". 38 Mr Korda decided, as administrator, that for voting purposes each NYOL Group company should provide a proxy to the chairman of the meeting for voting in the administration of each other NYOL Group company. Proxy forms were accordingly prepared. It appears from Mr Korda's evidence that there were proxy forms for a total of 182 votes (being 14 companies each admitted to vote as creditors of the other 13 companies). The development of alternative proposals 39 At the time the dispatch of the Report to the creditors, the administrators had not received any proposals other than the Newmont Mining proposal. However, two additional, alternative proposals emerged through discussions and correspondence between the administrators and other parties in the period from 20 to 29 August 2003. One of the proposals was formulated by Mr Creasy, who was represented by Freehills, solicitors. The other proposal was formulated by the plaintiffs, represented by Marc Ryckmans of Abbott Tout, solicitors. 40 It is unnecessary to explain the content of the alternative proposals or the manner of their development, for the purposes of this judgment. It is worth recording, however, that in a letter dated 22 August 2003, Freehills made some comments about the Report. The gist of the comments was that the Report dealt with the NYOL Group as a group of companies and did not separately set out the assets and liabilities of each of the 14 companies in the Group. They pointed out that the recommendation given by the administrators in their conclusions in the Report failed to distinguish between the separate interests of creditors of each of the 14 companies and therefore, they contended, the Report did not comply with s 439A(4). 41 On 25 August 2003 Mr Korda replied to Freehills. He said that references in the Report to the Group companies (described in the Report as the Yandal Group companies) were references to each company severally. He said that Freehills seemed to have missed the point that the assets and liabilities of each company were identical, and he drew attention to the part of the Report in which he referred to the deed of cross-guarantee. He asserted that the liabilities of each and every one of the Group companies were as set out in the summary of the financial position in the Report, and the assets of every Group company were available to meet those liabilities. 42 According to Mr Korda, neither Freehills nor Mr Creasy made further reference to these matters. Mr Creasy participated in the second meeting of creditors and put forward his alternative proposal shortly prior to the meeting. 43 It is also noteworthy that, when Mr Ryckmans wrote to the administrators on 28 August 2003 raising various objections to the voluntary administration and the Report, he did not complain that the Report treated the NYOL Group companies on a consolidated basis. Indeed, the plaintiffs' proposal contemplated that each of the NYOL Group companies would execute a single deed of company arrangement, and treated the NYOL Group as effectively a single consolidated entity, contemplating a regime for the pooling of all assets and liabilities of the NYOL Group. 44 The administrators were faced with the difficulty that there were three alternative proposals for creditors to consider, but only one had been received in time to be dealt with in their Report. The solicitors for Newmont Mining had informed them that their client would not agree to extend the time for acceptance of the Newmont Mining proposal. Mr Korda held meetings with the three parties to discuss how the second meeting of creditors should proceed in light of the fact that there were three competing proposals. He adopted a procedure, agreed by all parties, that he would put to the creditors a resolution that the second meeting be adjourned for up to 60 days to allow creditors time to consider the proposals by the plaintiffs and Mr Creasy. If the motion to adjourn was not carried, he would put the three proposals to the meeting in the order in which they had been received, so that the Newmont Mining proposal would be voted on first. The successful proposal would be the first proposal that the creditors voted in favour of. Preparations for the meeting 45 Before the meetings began, those attending were required to sign and complete an attendance register. The register was divided into 14 parts, under headings for each NYOL Group company. Each part was set out in the form of a table with headings for "Name of Creditor", "Amount of proof lodged", "Represented by" and "Proxy received Y/N". Information under the first three headings had already been completed by representatives of KordaMentha, so that in most cases a creditor needed only to sign the appropriate part of the register in the space provided, and correct any in error in the information. 46 Mr Korda said in his affidavit that creditors were listed in the attendance register according to "the company principally liable to each creditor". He said this was done so that creditors could quickly and efficiently locate their entry in the attendance register and sign it. He did not want to make it necessary for creditors to sign 14 times, once for each Group company. 47 Mr Korda also said in his affidavit that prior to the meeting, he was aware that, by reason of the decisions he had made when reviewing proxy forms, each external creditor was admitted for voting purposes as a creditor of every Group company, and each NYOL Group company had in effect the same liabilities to external creditors as every other Group company. He said he therefore decided, prior to commencement of the meeting, that all motions to be put to creditors at the second meeting could be put as one motion, provided that the meetings of creditors for all NYOL Group companies were held concurrently. He said that creditors would vote on one resolution applying to all NYOL Group companies, the results of which would apply to all NYOL Group companies as if a separate motion had been put and a vote taken separately in respect of each company. For the reasons I shall explain, the evidence of what actually happened seems to me consistent, on balance, with Mr Korda's evidence on this matter. 48 Mr Korda also gave evidence that, before the meeting, he considered the manner in which polls were to be taken on any resolutions, noting that under reg 5.6.20 of the Corporations Regulations it was for the chairman to decide the manner in which a poll would be taken. He was concerned to ensure that a process was devised that would be capable of recording and tallying the votes of creditors quickly and efficiently, so the results could be tallied and read out to the meeting without waiting for a full audit of the results. His staff devised a procedure according to which each creditor or proxyholder would be handed voting slips at the time they registered for the meeting, and those voting slips would be used when a motion was put to the meeting for decision. I shall describe the voting procedure more fully below. The second meeting of creditors, 29 August 2003 49 The creditors met at 11 a.m. on 29 August 2003 in Perth. Mr Korda gave evidence that he requested that each creditor that was a company should complete the proxy form that I have described. 50 The precise decisions made at that time are the matter for determination in Question 1. There are two main accounts of what occurred, one in the minutes filed with the Australian Securities and Investments Commission, and the other in a transcript of the proceedings. The minutes and the transcript are to the same general effect, and it is unnecessary for the purposes of this judgment to prefer one account to the other. 51 According to the minutes, the proceedings were second meetings of the creditors of each of the 14 companies in the NYOL Group. Mr Korda was chairman of the meetings. It was noted that, based on the proxies received and the persons present, a quorum was present for each of the Group companies. The minutes then recorded the following: "In the absence of any objection from any creditor, the Chairman advised that he intended to hold the fourteen meetings of the Companies in the Yandal Group concurrently and to allow observers to be present at the meetings. The Chairman noted that formal resolutions would be put later in the meeting approving the concurrent holding of the meetings and the attendance of observers." 52 This appears to me to correspond, closely enough, with the transcript, which records Mr Korda as saying: "In regard to concurrent meetings, there are 14 group companies, so rather than have 14 separate meetings and be here all day, we are running them concurrently and I will get the approval of the creditors at the end in a formal resolution." 53 According to the transcript, Mr Korda announced early in the meeting that every creditor attending the meeting who wished to vote should have lodged a proxy or proof of debt. 54 Mr Korda invited an employee of Mr Creasy to speak to Mr Creasy's proposal, and then Mr Ryckmans, the plaintiffs' solicitor, spoke to the plaintiffs' proposal and suggested an adjournment. Then representatives of Newmont Mining spoke. Questions were taken and there was discussion, which it is unnecessary to explore here. The minutes and the transcript are substantially consistent on these matters. 55 Mr Korda announced that voting would be by poll in respect of the adjournment and any resolution to accept a deed of company arrangement, and that the polls would be carried out using the voting slips which were provided to creditors at the meetings. The evidence includes a single page comprising three blank voting slips. Each voting slip provided for · the resolution being voted on to be identified; · the person voting to insert "the Company name you are a creditor of (refer to handout for full listing of companies)"; · the name and organisation of the person voting; · the amount owed; and · circling one of the three words, "for", "abstain" and "against". 56 Mr Korda gave evidence that the identification of the debtor company in the voting slip was identification of the company "principally liable" to the creditor. He said that the reason why the voting slips recorded the name of the NYOL Group company principally liable to the creditor was "to enable my staff to quickly and efficiently reconcile the vote cast against the listing of the creditor in the spreadsheet" prepared in the manner described below. He said the voting slips were not designed to state only the company in respect of which the creditor was casting a vote, and accordingly the vote cast by the creditor using the voting slip was a vote cast in respect of each and every company in the NYOL Group. 57 According to the transcript, an employee of KordaMentha, David Scoullar, said the following about the voting slips: "… just as a procedural issue, if you could have a look at your voting slip you will see that the name for whom you are voting appears in the top right corner of the first voting slip. Can you ensure that before you rip off the first voting slip that you ensure you put the name for whom you are voting on subsequent slips as well." 58 A formal adjournment motion was moved by Mr Ryckmans, seconded on behalf of Mr Creasy. The minutes say that the Chairman put the following to the meetings: "That the second meetings of the creditors of the Companies in the Yandal Group be adjourned to 22 September 2003 or such further period as the Administrators determine, but not longer than sixty (60) days from this date." 59 The minutes say that a poll was conducted and after a short break, the Chairman announced that the resolution had been lost. The transcript indicates that Mr Korda put the adjournment motion to the creditors as a single motion and took votes on a show of hands, but he informed the creditors that he would then count the votes in terms of value as well as number, to the extent of determining the wishes of the majority in number and value. This is, effectively, conducting a poll, as the minutes say. 60 According to Mr Korda's evidence, each of the creditors or proxyholders completed a voting slip and presented it to staff of KordaMentha, who tallied the votes cast on spreadsheets in the manner described below. 61 The transcript says that after a short adjournment, Mr Korda announced that there were 10 votes totalling $92 million in favour of the adjournment and 23 votes totalling in excess of $670 million against it. He declared that on that basis, "the meetings" were not adjourned. 62 He then accepted a motion in favour of the Newmont Mining proposed deed of company arrangement. The motion was put to the vote on a poll, according to Mr Korda's evidence, by each creditor and proxyholder completing a voting slip. When completed, the voting slips were handed to KordaMentha staff and were processed in the manner described below. 63 According to the minutes of the meeting (the transcript of proceedings being substantially the same), the substantive resolution carried by the creditors was as follows: "That each of the Yandal Group Companies in administration execute the Newmont Deed of Company Arrangement which reflects the proposed Newmont Deed made available on the KordaMentha website as amended on 29 August 2003 and which was outlined in the Second Creditors' Report dated 20 August 2003 pursuant to section 439A(4)(c) of the Corporations Act and Mark Korda and Mark Mentha be appointed Administrators of the Newmont Deed of Company Arrangement." 64 It appears from the transcript of proceedings and Mr Korda's evidence that Mr Korda took the view, after consulting Mr Ryckmans and Mr Creasy, that, the creditors having supported the Newmont Mining proposal, which was the first to be proposed, there was no point putting the plaintiffs' proposal or Mr Creasy's proposal to the vote of the creditors. 65 The minutes record that the Chairman put the following resolution to the meetings: "That the creditors of the Companies in the Yandal Group reflected in Appendix A of the Report by Administrators to creditors of the Yandal Group of Companies which was distributed to all Yandal Group creditors prior to this meeting and copies of which is [sic] available to all parties in the meeting, consent to persons other than creditors of that company being present at their meeting and that the meetings of the Companies in the Yandal Group outlined by the Chairman be held concurrently." 66 This is consistent with the transcript, which says that Mr Korda proposed, "as a procedural point", that the creditors of all 14 companies should consent to persons other than creditors of their company being present at their meeting, and that the meetings of the 14 NYOL Group companies be held concurrently. The motion was carried, apparently on a show of hands. 67 The creditors then dealt with the administrators' fees, and after a short adjournment, Mr Korda announced that the votes of creditors on the motion in favour of Newmont Mining's proposed deed of company arrangement were 379 in favour, to a total value of $706,346,846, and 2 against, totalling $83,636,670, with two abstentions. He declared the motion carried. He did not announce separate voting results on a company-by-company basis. Mr Korda's abstention 68 The evidence is that Mr Korda decided to abstain in relation to proxies held by him in respect of inter-company debts. In his affidavit of 8 September 2003 he said: "At the meeting I held as chairman proxies to vote on behalf of each of the companies in the NYOL Group in respect of inter-company debts owing between the various companies in the group. As each company in the NYOL Group has guaranteed the payment of the debts of each other company in the group, I abstained from voting on those proxies in either of the resolutions set out above [the adjournment resolution in the resolution for the Companies to execute the Newmont deed of company arrangement]." 69 Mr Korda gave evidence that the reason he abstained was to ensure that only external creditors had a say in determining the future of the NYOL Group for the purposes of deciding whether to enter into a deed of company arrangement. He was concerned that if he voted in respect of inter-company indebtedness his vote might determine the outcome of the proposals. He said that if he had been made aware, prior to or at the meeting, that anyone would subsequently argue that there had been no vote on the Newmont Mining proposal by the nine subsidiaries which had no external creditors, he would in all likelihood have voted the proxies in favour of the motion that the Newmont Deed be executed. The voting calculations and the post-meeting audit 70 When KordaMentha staff collected voting slips at the meeting they handed them to other staff, who were operating computers located at the rear of the meeting room. Those staff entered the details shown on the voting slips into a spreadsheet ("the first spreadsheet") that had been set up for the recording of votes. Mr Korda gave evidence that this spreadsheet listed each admitted creditor and its representative, by reference to the Group company principally liable to the creditor, and made provision for recording votes in the "for", "against" and "abstain" columns of the spreadsheet, in respect of the Group company identified in the voting slip. 71 Once all the votes cast had been entered into the first spreadsheet, the "Grand Total" of votes cast was tallied for each company. These "Grand Total" results for each company were then transposed by KordaMentha staff into another spreadsheet designed to consolidate the company-by-company results into NYOL Group results ("the second spreadsheet"). This was done, according to Mr Korda, to recognise that by reason of the deed of cross-guarantee, the votes cast by creditors had been cast in respect of each company in the NYOL Group. Mr Korda said that the second spreadsheet enabled him to determine the final poll result for each of the NYOL Group companies, without requiring creditors to cast 14 separate votes. 72 The second spreadsheet listed the Grand Totals for each Group company and then tallied those Grand Totals to produce the "Gross Total Results". This showed the total number of votes and the dollar value of those votes cast by all creditors of all NYOL Group Companies on a consolidated basis. 73 Then the Gross Total Results were adjusted to ensure that only one vote was attributed to each creditor, thereby producing "Net Total Results". This adjustment was necessary because some creditors were "principal" creditors of more than one Group company, and the adjustment was necessary so as to ensure that these creditors did not vote twice. Thus, for example, Cockburn Cement Ltd was owed $83,628.03 by NYOL and $56,115.19 by Newmont Wiluna Gold. The effect of the adjustment to the aggregate figures was to ascribe one vote to Cockburn Cement for a total amount of $139,743.22. 74 Similarly, the Gross Total Results with respect to abstentions were adjusted to ensure that on a consolidated basis, each NYOL Group company only abstained once by virtue of Mr Korda's decision not to vote the proxies given to him by the Group companies with respect to their claims under the Inter-Company Guarantee. This produced figures referred to in the second spreadsheet as the "Net 3rd Party Results". 75 Once these calculations had been made, Mr Korda used them to announce the results of the polls on the meeting, respectively on the adjournment motion and the motion concerning the Newmont Mining proposal. His two announcements of results were set out above. 76 Within three or four days of the meeting, representatives of KordaMentha conducted an audit of the voting. This led to some minor adjustments of the "Net 3rd Party Results" figures, but no substantial changes. The final figures for the vote on the Newmont Mining proposal were as follows: Total Claims Present (values): $801,120,799.91 Total Claims Present (numbers): 424 For the resolution (value): $706,346.846.86 For the resolution (numbers): 377 Against the resolution (value): $83,636,670.01 Against the resolution (numbers): 2 Abstaining (value): $11,137,283.04 Abstaining (numbers): 45. 77 It is significant for present purposes that in the first spreadsheet the audited poll figures in respect of nine of the 14 companies (the nine companies listed in Question 1 of the questions for separate determination) zero votes are recorded for and against the resolution, with 13 abstentions. This shows that Mr Korda abstained from voting in respect of the inter-company indebtedness and there was no other separate creditor voting in respect of any of those companies. 78 Oren Zohar was a partner in KordaMentha's Perth office. In the course of reviewing the voting summaries for the meeting, on 2 September 2003, he looked at the issue of inter-company debts and abstentions by the chairman. After a discussion with Mr Scoullar, he sent an e-mail dated 2 September and copied to Mr Korda, in which he queried the effect of the chairman's abstentions, particularly as regards the subsidiary companies in the NYOL Group that did not have external trade creditors, "in which event no creditor would be taken to have voted for or against the respective resolutions if these companies are looked at on a stand-alone basis". He referred to the cross-guarantees, but said he was not sure whether they had any direct bearing on the issue that he raised. He concluded, "I just don't want to get caught out on a technicality". 79 Mr Korda did not recall this specific e-mail (though it was his practice to read e-mails copied to him), but he gave evidence that he recalled that early in September 2003 somebody raised with him the potential significance of his abstention from voting, and he continued (T 54): "I said, well, they are creditors, the creditors are creditors of every company, so I don't think it was pertinent". The deeds of company arrangement 80 The plaintiffs commenced proceeding No 4666 of 2003 in this court on 3 September 2003. They obtained an interlocutory injunction enjoining the administrators from executing the Newmont Mining deed of company arrangement, until 8 September 2003. On that date Barrett J refused to extend the injunction. 81 Deeds of company arrangement in respect of each of the 14 NYOL Group companies were executed on 8 September 2003. Clynton Court became the administration company for the purposes of the deeds, and Messrs Korda and Mentha became the deed administrators. The deed of company arrangement for Clynton Court was referred to as the "Principal Deed of Company Arrangement", and the deeds for the other 13 companies were "Secondary Deeds of Company Arrangement". 82 Each of the deeds contained a provision (clause 3.1) to the effect that the deed was conditional on the execution of the principal deed and each secondary deed by everyone named as a party, and a provision (clause 3.2) that if, as a result of clause 3.1, the deed had not come into full force and effect by 5 p.m. on 22 September 2003, it would automatically terminate. Issues about the effect of these clauses, which I considered more fully in my 29 November judgment and previous judgments, would arise if I were to answer Question 1 in the negative, but they do not now arise. 83 Recital D in the Secondary Deeds of Company Arrangement, including the deeds for the nine companies in respect of which no votes for against were recorded, states that at the second meeting of creditors of the company, a majority in number and value of the creditors resolved that the company execute a deed of company arrangement substantially on the terms set out in that deed. 84 On 10 September 2003, after the steps contemplated by the secondary deeds had been carried out (essentially, assumption of liabilities by novation to Clynton Court), they were terminated pursuant to their terms, and control of the NYOL Group companies, except for Clynton Court, was restored to their respective directors. The companies have continued to operate their business and have proceeded to sell the Bronzewing and Wiluna mines to third parties. 85 Mr Korda and Mr Mentha, as administrators of the principal deed, have collected and paid out over A$24 million, applied over A$18 million in payment of the administrators' liabilities, and remitted funds of over A$54 million to Newmont Australia. They hold a fund of more than US$22.9 million on trust for claimants including the plaintiffs, Mr Creasy, the insurers of Brandrill and the remaining external holders of senior notes. 86 Mr Korda has given some evidence, which it is not necessary to explore in view of my answer to Question 1, identifying the very considerable difficulties that would arise if the plaintiffs' challenge to the validity of the deeds of company arrangement were to succeed. Mr Korda's evidence 87 Aspects of Mr Korda's evidence were challenged in cross-examination. In particular, he was challenged on his assertions that he determined, before the meeting, that each external creditor of any Group company was a creditor of every Group company, and that he and his staff prepared the proof of debt forms, proxy forms, voting slips and attendance register on the basis that where a creditor identified a Group company as debtor, the form operated merely to identify the principal debtor and not the sole debtor. Evidence in the latter category was subject to an order under s 136 of the Evidence Act that it be used only as evidence of Mr Korda's belief and understanding and not as evidence of the truth of what he asserted. 88 I have decided, having heard Mr Korda's oral evidence and having observed his demeanour in the witness box, that there is no good ground for rejecting his evidence on these matters, or any of his other evidence. The fact that, as he admitted, the part of the affidavit relating to his decision to admit external creditors as creditors of each Group company for voting purposes and to estimate their debts was drafted by a solicitor does not, of itself, justify my rejecting or discounting the evidence. It was evident from his oral evidence that Mr Korda has had substantial experience in insolvency matters and there was no reason to suspect that he did not adopt the solicitor's draft freely and with full understanding. 89 The absence of any written record of Mr Korda's decisions is troubling and suggests some sloppiness in the administration, but is not fatal, bearing in mind that inter-company proofs of debt evidently based on the deed of cross-guarantee were prepared and executed and some of them are in evidence. 90 Though self-serving, Mr Korda's evidence is not implausible. The consequences of recognising external creditors as creditors of every Group company do not appear to have been thought through as rigorously and with as much attention to formal detail as they might have been, but in my view the evidence survives the plaintiffs' attack on it. I shall have occasion to refer, below, to some specific aspects of the challenge to Mr Korda's evidence. Compliance with Corporations Regulations 91 Regulation 5.6.23 of the Corporations Regulations applies to a meeting of creditors convened by a voluntary administrator under Part 5.3A: reg 5.6.11(2). Regulation 5.6.23(1) and (2) provide as follows: "(1) A person is not entitled to vote as a creditor at a meeting of creditors unless: (a) his or her debt or claim has been admitted wholly or in part by the liquidator or administrator of a company under administration or of a deed of company arrangement; or (b) he or she has lodged, with the chairperson of the meeting or with the person named in the notice convening the meeting as the person who may receive particulars of the debt or claim: (i) those particulars; (ii) if required - a formal proof of the debt or claim. (2) A creditor must not vote in respect of: (a) an unliquidated debt; or (b) a contingent debt; or (c) an unliquidated or a contingent claim; or (d) a debt the value of which is not established; unless a just estimate of its value has been made." 92 It will be seen that entitlement to vote as a creditor at a meeting of creditors of a company in administration depends upon establishing either of two alternatives, recently described by Palmer J as "portals" (Expile Pty Ltd v Jabb's Excavations Pty Ltd [2004] NSWSC 284, at [86]), which I would explain in their application to the present case as follows: · first, if the administrator has required a formal proof of debt, the creditor has lodged a formal proof of debt with the chairperson of the meeting or the designated person, but if the administrator has not required a formal proof of debt, the creditor has lodged particulars of the debt with the chairperson of the meeting or the designated person; or · secondly, the creditor's debt has been admitted wholly or in part by the administrator. 93 There is evidence that in the present case, the administrators required formal proofs of debt to be lodged for the purposes of voting at the meeting. There are statements requiring proofs of debt both in the Report and in the accompanying circular, which I have set out above. The documents sent to creditors included a form of formal proof of debt, Form 535. Creditors responded by completing the form and identifying the NYOL Group company that was, to use the language of Mr Korda, the "principal" debtor. There is no evidence that any external creditor of an NYOL Group company lodged a proof of debt identifying each other Group company as a debtor by virtue of the deed of cross-guarantee. 94 However, it seems to me that the administrators' requirement for formal proofs of debt related to what Mr Korda has called the "principal" debts. That is evidenced in the text of the form, which made no provision to nominate the companies liable to the creditor under the deed of cross-guarantee. I do not construe the statements in the Report and the circular, requiring the lodgement of formal proofs of debt, as relating to any debt other than the principal debt designated in the form. 95 In my opinion, the position with respect to the creditors' claims against companies other than the "principal" debtor was that no formal proof of debt had been required by the administrators, and so an entitlement to vote under the first alternative could be established by the lodgement of "particulars of the debt". As Barrett J remarked in Selim v McGrath (2003) 47 ACSR 537, at [92], the structure of reg 5.6.23(1)(b) indicates that a system of informal proof is contemplated. What the creditors supplied was particulars of the "principal" debt. But the administrators were already well aware of the provisions of the deed of cross-guarantee and had formed a view as to their effect. Supply of a form of proof of the principal debt, in the context of this awareness of other matters, constituted supply of particulars of the debts of the NYOL Group companies other than the "principal" debtor company. 96 Consequently, by lodging their proofs of debt in respect of the "principal" debts, in this special context, the creditors became entitled to vote with respect to the debts owed to them by all of the NYOL Group companies by virtue of the deed of cross-guarantee. It was not necessary, as a condition precedent to the entitlement to vote under reg 5.6.23(1)(b)(i), for the administrators or the chairperson of the meeting to make a ruling to accept the particulars and thereby confirm the entitlement to vote, although the chairperson (Mr Korda) had the power to reject the particulars of the debt under reg 5.6.26(1), read in conjunction with reg 5.6.11(1) (definition of "proof of debt or claim"): see Selim v McGrath at [94]. 97 That would be sufficient to warrant the conclusion that each external creditor of an NYOL Group company who had lodged a proof of debt was entitled to vote as a creditor of each NYOL Group company. But in my opinion, the external creditors were entitled to vote on the second ground as well. 98 The second ground is that the administrator has admitted a debt wholly or in part. What is admitted under this provision is the creditor's debt or claim, not a proof of debt or claim (compare reg 5.6.26(1)). This ground does not, having regard to its terms, depend upon the lodgement of any proof of debt or particulars of debt, or the lodgement of some other form of claim to an entitlement to vote: see Selim v McGrath, at [89]; Expile Pty Ltd v Jabb's Excavations, at [92]-[96]. Regulation 5.6.23(1)(a) concentrates on whether the administrator has made a decision to admit the debt, not on whether the creditor has lodged a claim of some kind. 99 Mr Korda has given evidence that where an external creditor was admitted in respect of an NYOL Group company, he also admitted the creditor as a contingent creditor of each other NYOL Group company by reason of the deed of cross-guarantee. The plaintiffs urged me to reject that evidence on the ground that it was unsubstantiated, and that proof of admission of a creditor's debt requires some documents or action or oral recitation (presumably to some external party) to that effect. The plaintiffs compared the absence of evidence of a decision to admit external creditors to vote as creditors of each Group company with the fact that there was evidence that proofs of debt were lodged in respect of the Inter-Corporate Guarantee, and asked me to infer that the administrators made no such decision, given the lack of evidence. 100 However, since it was open to the administrators to admit debts under the deed of cross-guarantee without the creditors having made any particular claim, I have decided that I should accept Mr Korda's evidence. It establishes that, on behalf of the administrators, he admitted against all NYOL Group companies, relying on the deed of cross-guarantee, the debts identified in the proofs of debt that were lodged by external creditors. A written record of Mr Korda's decision would have been helpful but it is not necessary that a decision to admit a debt be taken or recorded in writing, or by recourse to any other formality: Expile Pty Ltd v Jabb's Excavations, at [95]-[96]. The absence of any proofs of debt by external creditors based on the deed of cross-guarantee is not fatal because reg 5.6.23(1)(a) is, as I have said, an alternative to an entitlement to vote arising out of the lodgement of a proof of debt or particulars by the creditor. 101 The plaintiffs submitted that the claims of external creditors against NYOL Group companies under the deed of cross-guarantee were, at best, contingent. I am not sure that this is correct. Clause 6.1 of the deed of cross-guarantee operates as a separate covenant by way of the deed poll by each NYOL Group company with each Creditor, as defined. By that covenant the Group company guarantees to the Creditor payment of any Debt due to the Creditor from any other Group company. If it were not for the last eight words the clause, "in accordance with this Deed of Cross Guarantee", clause 6.1 will operate as an unqualified guarantee without any contingent element. It is not clear that the last eight words qualify that operation, beyond confirming the condition in clause 2.1, which appears on the facts to have been satisfied in about 1998. It is arguable that the last eight words have the effect of importing into clause 6.1 the restrictions in clause 3.2, so that the guarantee would not be "enforceable" except in the circumstances of winding up specified in clause 3.2. Whether clause 3.2 makes the obligation arising either under clause 3.1 or under clause 6.1 a contingent obligation is also open to debate, since the restriction is only one the enforceability of the covenant which, in each case, seems to be unqualified in its terms. 102 These considerations suggest that the guarantee obligations of the NYOL Group companies under the deed of cross-guarantee, or at least the obligation under clause 6.1, should not be classified as contingent. But it is unnecessary for me to reach a conclusion on this point. 103 Assuming that the claims are contingent claims (a view shared by the plaintiffs and Mr Korda), the question arises whether a just estimate of their value was made for the purposes of reg 5.6.23(2). Under that provision, there must be an estimate of the value of the claim, and the estimate must be "just". If the contingent claim cannot be quantified by a just estimate, then the contingent creditor should not be permitted to vote: Vincent, White & Associates Pty Ltd v Vouris (1998) 28 ACSR 93, 101 per Hodgson CJ in Eq; Bovis Lend Lease Pty Ltd v Wily (2003) 45 ACSR 612, 677-8. 104 The first question is whether Mr Korda made estimates of the values of the external creditors' claims under the deed of cross-guarantee before the voting at the meeting. Mr Korda gave express evidence that he did so, valuing the claims at their full amounts. The plaintiffs compared those decisions with the decisions to admit NYOL Group companies to vote with respect to their indemnity entitlements only in the nominal amount of $1. They said this comparison suggested that no effort or inquiry, however summary in nature, had in fact been made by Mr Korda to estimate the external creditors' claims. 105 I disagree with this submission. It seems to me there is an important difference between the claims of external creditors and indemnity claims of Group companies. Even if, strictly, the external creditors' claims under the deed of cross-guarantee are contingent, the contingency is relatively proximate, namely the winding up of the principal entity or the other similar matters in clause 3.2. In contrast, the contingencies underlying the inter-company indemnity claims are more remote, namely the failure of the principal debtor to meet the claim made by the external creditor and recovery by the external creditor from another Group company under the deed of cross-guarantee. In my opinion it is not implausible that Mr Korda may have reached the conclusion that the correct just estimate in the latter case is $1, while in the former case the correct just estimate is the full amount of the external debt. This is what he said he did. 106 The second question is whether Mr Korda's estimates were "just". The plaintiffs submitted that they were plainly not. The issue is whether it was just for Mr Korda to assign to the external creditors' entitlements under the deed of cross-guarantee a value equivalent to the full value of the debts, when recovery depended upon non-payment by the principal debtor and the commencement of the winding up of the Group company against which to guarantee was sought to be enforced. In circumstances where the financial welfare of each NYOL Group company was interdependent with the financial welfare of every other Group company by virtue of the indemnity arising by their guarantee of external debts, the making of a winding up order or a creditors' resolution for winding up might reasonably be regarded as a likely event should the principal debtor fail to pay, with the result that estimation of the value of the external creditors' claims at the full value of their debts would seem to be justifiable and reasonable. Findings as to the creditors' decision 107 Regulation 5.6.19 provides that a resolution put to the vote of a creditors' meeting must be decided on the voices unless a poll is demanded in the proper way. In the present case a poll was demanded by Mr Korda as chairperson for the taking of the vote concerning the Newmont Mining proposal. Under reg 5.6.20(1) Mr Korda, as chairperson, had the discretion to determine the manner in which the poll was to be taken. He determined that it was to be taken by the use of the voting slips and spreadsheets to which I have referred. 108 Under reg 5.6.21(2): "A resolution is carried if: (a) a majority of the creditors voting (whether in person, by attorney or by proxy) vote in favour of the resolution; and (b) the value of the debts owed by the corporation to those voting in favour of the resolution is more than half the total debts owed to all the creditors voting (whether in person, by proxy or by attorney)." 109 In the present case the creditors of the companies in the NYOL Group resolved that the meetings of the Group companies be held concurrently. Although it appears that this resolution was passed after the resolution with respect to the Newmont Mining proposal, it was proposed in the notice of meeting and Mr Korda announced at or near the beginning of the meeting that he would later put "formal resolutions" approving the concurrent holding of the meeting and the attendance of observers. In these circumstances, there were 14 meetings, being held concurrently, at the time of voting on the resolution with respect to the Newmont Mining proposal. 110 The questions posed by reg 5.6.21(2) are whether a majority of the creditors voting at each of those 14 meetings voted in favour of the resolution, and whether the value of their debts satisfied the criterion in subparagraph (b). This raises the question whether the creditors who voted on the resolution with respect to the Newmont Mining proposal voted, in the circumstances of the conjoint meetings, in respect of the debts owed to them by each of the 14 NYOL Group companies. They were entitled to do so, for the reasons I have given. 111 The plaintiffs submitted that only the external creditors themselves, or their proxies when they had appointed proxies, could determine the manner of exercise of their votes. They said that assuming, contrary to their submission, that the creditors were entitled to vote in all 14 concurrent meetings, it was open to them or their proxies to choose whether to do so, or to vote only at the meeting of the principal debtor. On the facts, they voted only at the principal debtor's' meetings, according to this submission; but Mr Korda took it upon himself to treat their votes as votes in respect of all 14 meetings as though he were their proxy, which he was not. 112 The plaintiffs placed heavy reliance on the first of the two spreadsheets that I have described. In an affidavit sworn on 8 September 2003 for the purposes of resisting the plaintiffs' application for an interlocutory injunction to restrain the administrators from executing the deeds, Mr Korda exhibited the first spreadsheet without the second. The plaintiffs relied on the fact that according to the first spreadsheet, which disclosed the votes on a company-by-company basis, there were no votes for or against the resolution on the Newmont Mining proposal in the case of nine of the NYOL Group companies. These were companies with no external "principal" creditors, and Mr Korda abstained from voting the inter-company proofs. That, said the plaintiffs, clearly demonstrated that none of those nine companies resolved to execute the deed of company arrangement. 113 The administrators' answer to this submission was that the external creditors of any Group company were, under the deed of cross-guarantee, creditors of each Group company, and at the meeting they voted as creditors of all 14 companies, with the result that the outcome of the vote in respect of the nine companies identified by the plaintiffs was the same as in respect of each other Group company. In his affidavit of 3 March 2005, prepared for the purposes of the "separate questions" hearing, Mr Korda identified both of the spreadsheets and explained that the individual company figures on the first spreadsheet were transferred to the second spreadsheet where they were converted into Group figures and adjusted in the matter that I have described. He said these calculations were done before he announced the result of the poll on the Newmont Mining proposal. That evidence is plainly correct because of the strong similarity between the final, audited second spreadsheet and the figures announced at the meeting. Mr Korda explained that his affidavit of 8 September 2003 was prepared under pressure at a time when the issue now raised by the plaintiffs had not been ventilated, and he or his staff omitted to exhibit the second spreadsheet by mistake. 114 It follows from Mr Korda's evidence that the process of calculating the votes was consistent with the proposition that each external creditor was treated as voting for the purposes of each of the 14 meetings. But is that what happened, in fact? 115 The question is difficult to answer, partly because the drafting of various documents does not reflect any recognition that there were to be 14 concurrent meetings and a decision with respect to a separate deed of company arrangement for each of the 14 companies. I have identified some of this ambivalent drafting in my description of the Notice of Meeting and other documents sent to the creditors. Sometimes the documents refer to "meetings" and sometimes to a "meeting". 116 Putting that drafting ambivalence to one side, there are some indications in the evidence that individual external creditors voted only in respect of their principal debtors, and there are other indications that they voted in respect of the NYOL Group companies as a whole and therefore, by implication, in respect of each of the 14 concurrent meetings. A finding on what in fact occurred will, in these circumstances, necessarily be a finding on the balance of the evidence. 117 The indications favouring the view that the external creditors voted only in respect of their principal debtors are as follows: (P1) the Notice of Meeting identified, as a purpose of the meetings, "for the creditors of each of the Companies to resolve that the Company execute a deed of company arrangement ..."; (P2) the enclosed proxy form required the creditor to identify "the Company name you are a creditor of"; (P3) the enclosed form of proof of debt made provision for the creditors to insert the "relevant Company name"; (P4) the attendance register for the meeting was divided into 14 parts, each headed by the name of an NYOL Group company, and the creditor signed as a creditor of only the principal debtor; (P5) the voting slip provided for voters to identify "the Company name you are a creditor of", and that was the instrument upon which they expressed their votes; (P6) Mr Scoullar's statement at the meeting drew the attention of those present to the top right corner of the voting slip where they would see "the name for whom you are voting"; (P7) neither Mr Korda nor anyone else told those present at the meeting that their votes would be taken to be votes in respect of all 14 companies, although it was made clear that there were 14 concurrent meetings; (P8) in his e-mail dated 2 September 2003 Mr Zohar, a KordaMentha partner who was present at the meeting, expressed concern at the voting procedure, and it was obviously not evident to him that the external creditors had voted in respect of all 14 companies. 118 The indications favouring the view that the external creditors voted in respect of each of the 14 concurrent meetings are as follows: (D1) by virtue of the deed of cross-guarantee, the external creditors of each NYOL Group company were also creditors of each other Group company; (D2) Mr Korda admitted the debts of the external creditors in respect of each of the 14 companies and made a just estimate of their claims; (D3) the NYOL Group's financial statements had been prepared, since 1998/99, on a Group basis and no individual financial statements had been prepared; (D4) after their appointment, the administrators took particular account of the effect of the deed of cross-guarantee, and when Mr Korda reviewed the debts of the NYOL Group he identified a category of "NYOL Inter-Group Creditors" which included each NYOL Group company in respect of the Inter-Company Guarantee; (D5) the Report was prepared consistently with Mr Korda's view that the NYOL Group companies were to be considered on a consolidated basis, and it specifically drew the attention of creditors to the effect of the deed of cross-guarantee; (D6) when Freehills challenged the administrators because of the absence of separate financial information for each company in the Report, Mr Korda replied defending the Report by specifically relying on the deed of cross-guarantee, and Freehills did not respond; (D7) Mr Korda arranged for proofs of debt and proxy forms to be prepared to reflect the inter-company claims arising out of the right indemnity generated in consequence of the deed of cross-guarantee; (D8) Mr Korda gave evidence that, where the external creditors' proofs of debt, proxy forms and voting slips referred to a single NYOL Group company, they identified (as a matter of his belief) the principal debtor and not the sole debtor, and the forms were prepared in that way for reasons of administrative convenience; (D9) Mr Korda gave evidence that he decided, prior to the commencement of the meeting, that all motions to be put to creditors could be put as a single motions provided the 14 meetings were held concurrently, and the results of the voting would apply to all NYOL Group companies as if separate motions had been separately put; (D10) it was resolved that the meetings of the 14 companies be held concurrently, and as a practical matter the proceedings were conducted as a single meeting relating to all 14 companies; (D11) the method of counting the votes at the meeting, by use of the two spreadsheets, showed that the votes of the external creditors were treated as votes in respect of all NYOL Group companies; (D12) no-one at the meeting objected to the way the meeting was being conducted, or the voting procedure that was adopted, or the text of the resolution concerning the Newmont Mining proposal; (D13) most importantly, the text of the resolution on the Newmont Mining proposal supported the view that by voting on that resolution, the external creditors were voting in respect of all 14 companies. 119 Obviously an important component of deciding whether the creditors voted in respect of each of the 14 companies, when the resolution about the Newmont Mining proposal was passed, is the proper construction of the text of the resolution. The resolution, in its terms, authorised "each of" the NYOL Group companies (for consistency, I shall continue to use "NYOL Group" rather than "Yandal Group", as used in the resolution itself) to execute the Newmont deed of company arrangement as identified on the KordaMentha web site and outlined in the Report, and that Mr Korda and Mr Mentha be appointed administrators of the deed. This was put as a single resolution, but in the context that there were 14 concurrent meetings. It was as if the resolution were repeated 13 times, in identical language, applicable on each occasion to a different concurrent meeting. For example, at the NYOL meeting, the creditors who voted resolved that each of the NYOL Group companies execute the Newmont deed of company arrangement; and that the Clynton Court meeting, the very same creditors, by the same vote, resolved that each of the NYOL Group companies execute the Newmont deed of company arrangement. Since NYOL and Clynton Court were both NYOL Group companies, the resolution applied to those two companies respectively at their respective meetings. 120 Significantly for present purposes, it was a single resolution purporting in its terms to apply to each of the NYOL Group companies. When, therefore, external creditors who had identified themselves in proofs of debt, proxy forms and voting slips by reference to their principal debtor, voted on a resolution in those terms, they voted on a proposition applicable to all of the 14 companies, concurrent meeting by concurrent meeting. So construed, the text of the resolution supports the conclusion that the external creditors voted in respect of each of the 14 companies. On this analysis, the reference to "the Newmont Deed of Company Arrangement" in the resolution was a reference to the applicable deed for each company, meeting by meeting. 121 It seems to me that in resisting this construction of the resolution, the plaintiffs were forced to adopt a construction that did not give proper effect to the words "each of" as part of the text of the resolution. On the plaintiffs' construction, it was as if the chairman had announced that a resolution would be put in respect of each company in the NYOL Group, and then the resolution voted on was "that the company execute the Newmont Deed of Company Arrangement …". That construction does not accord with the evidence of what occurred at the meeting, or the text of the resolution as adopted. 122 Although the matter is complex, I regard the resolution as unambiguous. In my view, the plaintiffs' position on the construction of the resolution is unsustainable. As far as one can tell from the evidence (principally the minutes and transcript, and Mr Korda's evidence of his preparation), this was not a case where the text of the resolution was formulated on the spur of the moment, in the heady cut and thrust of debate (compare Myer Queenstown Garden Plaza Pty Ltd v City of Port Adelaide (1975) 11 SASR 504, 520 per Wells J). That is confirmed by the text of the resolution itself, not the kind of text that would be created "on the spot" without reflection. When, therefore, the resolution said, in the context of 14 concurrent meetings, that "each of" the NYOL Group companies execute the deed, the words are to be taken as carefully chosen, and they have the meaning that I have explained. 123 It is therefore unnecessary, for the purpose of construing the resolution, to rely on extrinsic circumstances to the extent permissible under the principles in Codelfa Construction Pty Ltd v State Rail Authority (1982) 149 CLR 337, at 352. A fortiori, it is unnecessary for me to rely, for the purposes of construction, on evidence of the subjective intention of any of the creditors who voted at the meeting, or to decide whether that evidence is admissible as an aid to construction (a proposition for which the administrators relied on some merely incidental observations by Williams J in Re Buckleys Earthmoving Pty Ltd (in liq) (1995) 15 ACSR 732, at 745). 124 However, the matrix of external circumstances, and evidence as to creditor intentions, are relevant in their own right, rather than as aids to construction. The question to be decided in this case is not simply what the resolution meant, but whether resolutions were passed in respect of each of the 14 companies (and, in particular, the nine companies which had no principal external creditors) - that is, whether the external creditors participated in decisions in respect of all the companies. The answer to the question depends not only on what they said in the resolution, but on such things as what they were entitled to say, the context in which the resolution was passed, how they voted as a mechanical matter, and how their votes were processed. To answer the question, it is relevant, in my view, to add to the proper construction of the resolution all the other factors set out at (D1)-(D12) and (P1)-(P8) above. 125 It seems to me, having regard to all those factors, that a reasonable person in the shoes of a creditor or proxyholder at the meeting, having received and read the Report, would have understood that the companies were being considered on a group basis, that the external creditors had rights against all of the NYOL Group companies because of the deed of cross-guarantee (as explained in the Report), and that he or she was being asked to vote in respect of 14 concurrent meetings as a Group creditor. If that was understood to be the position, then such a person would have perceived Notice of Meeting as giving notice of decisions to be taken on a group basis; and the identification of the debtor company in the proof of debt and proxy forms, the attendance register and the voting slips as a step that was consistent with the general position - that is, not as a step identifying the sole debtor, but only the principal debtor. 126 It is more difficult to deal with the statements by Mr Scoullar and Mr Zohar. While, according to the evidence, Mr Scoullar was a senior employee, and Mr Zohar was a partner of KordaMentha, I am inclined to think that they may not have understood what should have been plain to them from a reading of the Report and the manner of conduct of the meeting. Further, in the case Mr Scoullar, his statement was introduced as "a procedural issue", he was summarising the voting slip which identified, on its face, only one debtor, and he appears to have been speaking impromptu. I therefore do not regard his statement as countermanding the overall effect of the other factors that I have identified. There is no evidence that Mr Zohar expressed his views in the course of the meeting in a manner that might have influenced the conduct or intentions of creditors. It would probably have been helpful if Mr Korda had made an express statement that votes would be taken to be votes in respect of all 14 companies (although care would have to be taken not to make the position more confusing), but the absence of such a statement does not prevent the inference from being drawn that this is what occurred. 127 In the course of submissions I was taken to the decision of Finkelstein J in Korda, in the matter of Stockford Ltd (Subject to Deed of Company Arrangement) [2004] FCA 1682, especially at [13]ff (see also Mentha v GE Capital Ltd (1997) 27 ACSR 696. It seems to me that his Honour's obiter observations about the irregularity of the concurrent running of 84 meetings were directed specifically to the facts before him, and I do not regard them as having any direct application to the facts of the present case. 128 Evidence of the subjective belief and understanding of creditors in filling out and lodging their voting slips seems to me to be relevant to my decision. The only evidence of subjective intention is the evidence given by Mr Ryckmans on behalf of the plaintiffs. Mr Ryckmans' evidence 129 Mr Ryckmans did not object to the method of conduct of the meeting or the voting procedure on the day of the meeting. He explained (T 21) that on 8 September 2003 he had a conversation with Mr Korda, Mr Stretch (Mr Korda's solicitor) and Mr Zwier (Newmont Mining's solicitor), after he had received Mr Korda's affidavit of that date. He told them that, looking at the schedule of the poll results of the vote on 29 August, it appeared that nine companies had not passed any resolutions for the execution of deed of company arrangement. Mr Stretch disagreed and said his clients relied on the deed of cross-guarantee. Mr Ryckmans said they could not rely on the deed of cross-guarantee and that the execution of the deed of company arrangement would be invalid. 130 Mr Ryckmans said in cross-examination that he was aware, on 29 August 2003, that he was attending 14 concurrent meetings (T 26), but he disagreed with the proposition that as a proxy for the plaintiffs he attended each of the 14 meetings, saying his understanding was that he was attending, as proxy, only the meeting of NYOL, of which the plaintiffs were a creditor (T 27). He rejected the proposition that he knew he was voting on a single resolution that was applying to 14 companies (T 29), and he agreed that on his version of events, he was not entitled the cast a vote on a resolution that applied to any company other than NYOL. He emphatically disagreed with the proposition that at the meeting, he had observed that every creditor was proceeding on the basis that the questions to be decided could be dealt with by the passing of a single resolution without distinction as to which company was principally indebted (T 36). 131 However, in cross-examination Mr Ryckmans gave the following evidence which suggested that his understanding of the effect of the vote, as given in evidence, may not have been the same at the time of the meeting: · he understood that the Report put forward the financial position of the NYOL Group on a consolidated basis, and he did not write to the administrators asking for individual company accounts (T 20-21); · he was aware, on reading the Report, that the administrators were treating the plaintiffs and all other creditors as creditors of the Group as distinct from individual entities in the Group, and he did not write to the administrators asking for a statement of the asset and liability position of the separate entity, NYOL (T 22-23); · he agreed that the plaintiffs' proposal was for a deed of company arrangement involving the pooling of assets and liabilities (T 25), put forward on a Group basis without inquiry as to the individual creditor position of the various companies (T 33); · he agreed that on his version of events, he would have expected to see different voting results for each of the 14 companies, rather than one set of results for the vote applying to the Group, but he did not ask Mr Korda for the individual voting results when the poll was declared at the meeting (T 30). 132 That evidence would not, of itself, be sufficient for me to reject Mr Ryckmans' evidence as to his understanding of the purpose and effect of his vote at the meeting. But it must be considered together with two other matters that arose in his cross-examination. The Amended Statement of Claim for the 2003 proceedings, to which there is attached a certificate by Mr Ryckmans under s 198L of the Legal Profession Act 1987 (NSW), refers to the motion to adjourn the meeting of 29 August 2003. It asserts (paragraph 67) that if the votes of Bondco and Newmont Mining, being related creditors, had been disregarded, the adjournment resolution would have passed. Particulars of that paragraph refer to the results of the poll on the adjournment. These assertions in the pleading proceed on the basis that the adjournment resolution was a single resolution applicable in respect of all 14 meetings. 133 When the relevant part of the pleading was brought to his attention, Mr Ryckmans said (T 34) that the adjournment motion would have been successful for NYOL, as a separate entity, because the plaintiffs had the majority debt in that company, and he thought it reasonable that all 14 meetings should be adjourned because it made sense to him that the meetings should be held concurrently. But he was challenged on that evidence, and his attention was drawn to his affidavit sworn on 3 September 2003. There, he had noted that "a resolution to adjourn the second meeting" was put to the creditors but was voted down. He agreed that the explanation he gave in cross-examination did not appear in his affidavit. 134 Secondly, Mr Ryckmans gave oral evidence (T 39) that where references were made in the Amended Statement of Claim to the meeting of 29 August 2003, he understood (subject to a qualification not presently relevant) that the pleading referred to the meeting of the creditors of NYOL. Mr Ryckmans' attention was then drawn to paragraph 65 of the pleading, which says that "at the second meeting of creditors of the NYOL Group companies held on 29 August 2003, a resolution was put that the meeting be adjourned …". He agreed that there was no possible basis upon which that paragraph could be read as referring to one of the Group companies, and therefore that his earlier evidence was incorrect. 135 It seems to me, taking into account all of these matters, that Mr Ryckmans' evidence that at the time of the meeting, he understood that he was voting only in the meeting of NYOL, was, on the balance of probabilities, a reconstruction made after he read Mr Korda's affidavit of 8 September 2003 rather than an accurate recollection of his understanding at the time of the meeting. The rule against double proofs 136 The plaintiffs submitted that the proposition that each external creditor was entitled to vote at all 14 meetings, by virtue of the deed of cross-guarantee, infringed the rule against double proofs, citing Westpac Banking Corporation v Gollin & Co Ltd [1988] VR 397, and Jarbin Pty Ltd v Clutha Ltd (in liq) (2004) 208 ALR 242 (see also Barclays Bank Ltd v TOSG Trust Fund Ltd [1984] 1 AC 626, 667). In the Jarbin case the plaintiff-creditor acquired convertible notes issued under a trust deed. The liquidator rejected the plaintiff's proof of debt because under the trust deed, the company was primarily indebted to the trustee for the underlying debts evidenced by the convertible notes, and the trustee had lodged a proof of debt. The court held that the liquidator's decision was "clearly correct". 137 The plaintiffs submitted that under the deed of cross-guarantee (referring especially to clauses 3.1, 3.3 and 7.1(d)), the NYOL Group companies were made liable to the Trustee (NYOL) rather than to the Creditors directly for the Debts, and the Trustee retained the right of first action in respect of the Debts. The evidence shows that NYOL lodged proofs of claim for $1 based on the indemnity arising in consequence of the deed of cross-guarantee, and the plaintiff said this must have been done by it in its capacity as trustee on behalf of all external creditors. Then the defendant submitted that, NYOL having done so, no external creditor could be admitted for voting purposes at the meetings without infringing the rule against double proofs. 138 In my opinion, this submission fails on at least two factual grounds. First, it disregards the effect of clause 6.1 of the deed of cross-guarantee, which is a covenant operating as a deed poll by each NYOL Group company for the benefit of Creditors, without the interposition of any trustee. Secondly, NYOL's proofs of debt lodged in the administration of other NYOL Group companies are, in their terms, based on an asserted indemnity right rather than the terms of the deed of cross-guarantee, which does not itself give a Group company that has paid a Creditor any right of recoupment from the principal debtor company. 139 I note that in a footnote to their submission dated 12 March 2005, the plaintiffs also raised a question as to the effect of the deed of cross-guarantee, citing Re JN Taylor Holdings Ltd (in liq) (1991) 6 ACSR 187. They contended that a deed of cross-guarantee has no effective operation where all of the relevant companies are insolvent and in administration. In the present case the deed of cross-guarantee operates as between the NYOL Group companies and external creditors, and then under the general law rights of indemnity and contribution arise out of any performance of guarantee obligations in favour of those creditors. In my opinion the reasoning in the Taylor case does not stand in the way of the operation of the deed as an effective instrument creating guarantees in favour of the external creditors, notwithstanding that at the relevant time (29 August 2003) the companies were in administration. Conclusion 140 My answers to the eight questions for separate determination are as follows: 1. Yes. 2-8. In view of my answer to Question 1, these questions do not arise. 141 My decision is an answer to a specific question on particular and rather special facts. It should not be interpreted as adopting any view on the desirability or otherwise of multiple concurrent creditors' meetings. The practice of holding concurrent meetings was not, per se, under challenge in this case (see, generally, A Keay, "Voluntary Administrations: the Convening and Conducting of Meetings", (1996) 4 Insolvency LJ 9). 142 The case shows, however, that if multiple concurrent meetings are to be held, those involved in convening and holding them should carefully bear in mind, and act according to do, the conceptual foundation of the proceedings. And they should ensure that all the documents (including reports to creditors, notices of meeting, proof of debt forms, proxy forms, attendance registers and voting slips) are consistent with that foundation. Some of the difficulties raised in the present hearing, and perhaps the hearing itself, might have been avoided if a more rigorous approach to these matters had been adopted by and on behalf of the administrators.

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