In the context of working out the extent of a requirement that a creditor pay the costs of “convening” a meeting of creditors, the Victorian Supreme Court has determined that “convening” means “calling and holding“, not just “calling” – BH Apartments v Sutherland Nominees [2015] VSC 381.
After undertaking a lengthy, careful and thorough review of the submissions, the authorities, and the historical approach both in Australia and abroad, the court concluded:
Section 445F(1) of the Corporations Act 2001 confers an obligation on the administrator of a company under a deed of company arrangement to convene a meeting of its creditors at the request of a high-value creditor. Regulation 5.6.15(1)(b) of the Corporations Regulations 2001 provides that the requesting person must ‘pay the costs of convening the meeting’.
At the request of BH Apartments (a high-value creditor) under s 445F(1), the administrators of a company under a deed of company arrangement convened a meeting of its creditors. In the Magistrates’ Court of Victoria, they obtained an order that, pursuant to reg 5.6.15(1)(b), BH Apartments was liable for the payment of the full costs of convening the meeting, not just the calling costs, less the amount of a lodged deposit.
BH Apartments appealed to this court on a question of law, which was whether the expression ‘the costs of convening the meeting’ in reg 5.6.15(1)(b) was confined to the costs of calling, or included the costs of holding, the meeting. I have concluded that the magistrate correctly decided that the expression included the costs of both calling and holding the meeting. The appeal will therefore be dismissed.
The court was careful to make clear that this interpretation applies to the use of “convene” in the particular regulation, not to the use of the same word in section 439A (where “convene” is clearly limited to the act of calling the meeting, and does not include holding it).
As a result if this decision it is now settled that a DOCA creditor who requisitions a meeting of creditors may be required to pay for the costs of both calling and holding the meeting. The decision is also a useful reference point for students of statutory interpretation.
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