The April 2010 Rules made some subtle changes to the wording in the rules regarding what needs to be included in the notices convening meetings of creditors and also regarding eligibility to vote at meetings of creditors in CVLs, and we are finding that these can easily be overlooked.
The words “proof and” were inserted in rule 4.51(2), such that the notices convening the section 98 meeting, both those sent to creditors and gazetted, must now contain a last date and time by which a creditor must submit a proof to enable them to vote at the meeting, together with the existing requirement regarding lodging proxies. As with proxies, that last date and time for submission of a proof must be no later than 12.00 noon on the previous business day.
The requirement to include a last date and time for submission of proofs and proxies has also been extended to general meetings of creditors in CVLs by the insertion of a new rule 4.54(5). Previously it was only a requirement in compulsory liquidations. Again, both the notices sent to creditors and gazetted must now contain a last date and time by which a creditor must submit a proof and a proxy to enable them to vote at the meeting, which must be no later than12.00 noon on the previous business day.
The reason for these changes is made clear when you look at the revision made to rule 4.67(1), which has now been extended to apply to CVLs rather than just compulsory liquidations as previously. In order for a creditor to vote at a section 98 meeting or a general meeting of creditors they must now have lodged a proof of debt by the date and time stated in the notice, together with a proxy, unless of course they are attending the meeting in person.
Rule 4.68 gives the chairman discretion to allow a creditor to vote even if they do not lodge a proof by the date and time stated, but to do so they must be “satisfied that the failure was due to circumstances beyond the creditors’ control.” What this also means is that the practice we have occasionally seen of the chairman voting at a section 98 meeting as a creditor for their unpaid expenses in attending the meeting in order to ensure that there is a creditor voting at the meeting, whilst previously being a bit “iffy” is now definitely a non-runner.
As with all routine rule changes introduced by the 2010 Rules the transitional provisions mean that they only apply to cases that were commenced on or after 6 April 2010.
