Perpetual Nominees Ltd v DY2 Pty Ltd [2005] NSWSC 1072

New South Wales Supreme Court

CITATION : Perpetual Nominees Ltd v DY2 Pty Ltd [2005] NSWSC 1072

HEARING DATE(S) : 19 October 2005

JUDGMENT DATE : 19 October 2005

JURISDICTION : Equity

JUDGMENT OF : Hamilton J

DECISION : Period within which application for winding up must be determined extended for three months.

CATCHWORDS : CORPORATIONS [340] - Supervision, regulation and correction - Irregularities in proceedings - Extension of time - For winding up application - Meaning of special circumstances - Public interest.

Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 54 ACSR 228 Expile Pty Ltd v Jabb's Excavations Pty Ltd (2002) 194 ALR 138 CASES CITED : Re DIM Furniture Wholesale (NSW) Pty Ltd (1998) 28 ACSR 407 Switz v Glowbind [1999] NSWSC 1296

Perpetual Nominees Limited (P) PARTIES : DY2 Pty Limited (D)

FILE NUMBER(S) : SC 2506/05

M Hustler, Solicitor (P) COUNSEL : K Britton, Solicitor (Consenting Supporting Creditor)

Gadens (P) SOLICITORS : Sally Nash & Co (Consenting Supporting Creditor)

LOWER COURT JURISDICTION :

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

HAMILTON J

WEDNESDAY, 19 OCTOBER 2005

2506/05 PERPETUAL NOMINEES LIMITED v DY 2 PTY LIMITED JUDGMENT 1 HIS HONOUR: This is an application under s 459R(2) of the Corporations Act 2001 (Cth) for extension of the period within which an application for winding up must be determined. The circumstances are somewhat unusual. The defendant owes the plaintiff more than $5 million, in respect of which debt it holds first and second mortgages over land in Hawkesbury Avenue, Dee Why. Building work is taking place on that land, but the building works have not been completed. 2 The plaintiff is in possession of the land and commenced a marketing campaign to sell it, but did not receive any offers acceptable to the plaintiff. The expressions of interest received highlighted problems with certifying the building work on the partially constructed building on the land. 3 In light of that problem, the defendant has made and the plaintiff is considering an application for finance from the defendant which, if granted, would permit the construction of the buildings to be completed by the defendant. This might lead to a dissolution of the defendant's debt and the affidavit in support of the application submits that this course may be in the best interests of creditors. Certainly, the only supporting creditor which is represented in Court supports the application made on behalf of the plaintiff. 4 Today is the last day of the six month period stipulated in s 459R. The extension applied for is for three months from today, that is, until 19 January 2006. 5 For the application to be granted, the Court must find special circumstances. "Special circumstances" is an expression which has been construed in many statutory contexts. Subject to the exigencies of particular statutes, in general terms it bears its ordinary meaning, namely, circumstances which are not ordinary or are out of the general run of cases. That is the meaning that it has in this context. In Expile Pty Ltd v Jabb's Excavations Pty Ltd (2002) 194 ALR 138 I said at [5], [6]: "5 The word 'special' is an ordinary English word. The relevant definition of it as used in the present context appears to me to be that given in the Macquarie Dictionary , 3rd ed, 1997, as follows: '6 Distinguished or different from what is ordinary or usual: a special occasion …' The thrust of that definition is that 'special' is used in contradistinction to 'ordinary' or 'common'. 'Special circumstances' is an expression that has been used in other statutes. One must always bear in mind in an exercise of statutory interpretation that one is interpreting the particular words in the context of the particular statute. However, cases decided on other statutes, whilst they cannot govern the situation, indicate that, where 'special circumstances' is used in contexts like the present, it is used in the sense of the definition which I have quoted from the Macquarie Dictionary . Its essential meaning is that it denotes a particular situation which can be regarded as distinguished from the ordinary or common runs of situations. It has been found to bear this meaning in a number of other statutory contexts of a widely varying nature: for example, Re Norman (1886) 16 QBD 673 at 677 per Lopes LJ; Re Hunter (a bankrupt), Ex parte Exclusive English Imports Ltd (in liq) [1954] NZLR 747 at 754 per F B Adams J; Clarks of Hove Ltd v Bakers' Union [1978] 1 WLR 1207 at 1215 per Geoffrey Lane LJ; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217; 110 ALR 685 at 225 per Wilcox J; Lyon v Wilcox [1994] 3 NZLR 422 at 431 per Casey J (CA); Peninsula Watchdog Group (Inc) v Minister of Energy [1996] 2 NZLR 529 at 536 per Richardson P (CA).

6 The other thing that may be said about the meaning of the words 'special circumstances' in this context is that there should be no exhaustive attempt to define or list the matters which may come within the rubric 'special circumstances' as used here: Re Norman ; Springfield Nominees . The discretion is a discretion to be exercised by the judge on the view that he or she takes of all the circumstances of each case. Having said that, I should emphasise that one feature of s 459R(2) is that an order may only be made under the subsection if the Court is satisfied that special circumstances exist and justify the extension. If no special circumstances exist, then that is an end of the matter. If there is nothing that can be characterised as special circumstances, the discretion cannot be exercised. If, however, special circumstances are found to exist, that does not compel or even necessarily authorise the exercise of the discretion. Those special circumstances must be found to justify the extension and whether or not an extension is granted is still within the general discretion of the Court, as emphasised by the word 'may', which is the third word in s 459R(2)." 6 In Re DIM Furniture Wholesale (NSW) Pty Ltd (1998) 28 ACSR 407, Master Mahony of the Supreme Court of Victoria said at 421: "The proceedings before me afford more than ample proof that, where the applicant finds himself unable to proceed with the application but in circumstances in which the court will conclude that the immediate termination of the application may be unfair to him, personally or as the representative before the court of all the creditors, an order or orders extending the time for determination of the application will be made and the situation of the applicant will constitute the 'special circumstances' required by s 459R(2)."

See also the judgments of Austin J in Switz v Glowbind [1999] NSWSC 1296 at [44] and of Barrett J in Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2005) 54 ACSR 228 at [22]. 7 The circumstances here are as follows. There are partially constructed buildings upon the company's land, which is subject to the mortgages securing the debt relied on. The partial construction of those buildings makes the land difficult to sell in its present state. A prospect has arisen that the plaintiff may be prepared to afford the defendant finance for it to complete the buildings as the best solution for all concerned. On any view these considerations are out of the ordinary and constitute special circumstances which ought lead me to grant the extension sought and I propose to do so.

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