PMF Legal - Amending the Corporations
Re Crawford House Press Pty Ltd - 13 ACLC 874. Creditors
with debts incurred during a deed of company arrangement
were not entitled to receive any dividend if the deed
failed and the company went into liquidation. This
case led to the amendment that brought s553(1A)
into the Corporations Law to ensure that creditors
of a failed DCA could participate for a dividend on
a winding up.
McDonald v ASIC - 15 ACLC 1. ASIC’s
view was that the report sent by administrators
in a voluntary administration should contain
information on the "affairs form". This would have
increased the costs of administrators
and reduced the funds available to the creditors of
companies. The Supreme Court of New South Wales ruled
invalid the Corporations Regulation that purported
to prescribe that the administrator's report under
s439A had to be in Form 507 Report as to "affairs".
McDonald v Deputy Commissioner
of Taxation. There appears to be a major
loophole in the Corporations Act that prevents creditors
bring winding-up applications before the Court from
recovering their legal costs if the company goes into
liquidation through a voluntary administration and
not an order of the court. If there is this defect
then it will be important for the parliament to rectify
this gap. Some winding-up applications can cost tens
of thousands of dollars. It does not produce a fair
result if these creditors are unable to recovery their
costs from the liquidation.
PMF Legal - Innovation:
Berjaya Group (Aust) Pty Ltd v Ariff  NSWSC 569. This case involved an agreement being entered into between a deed administrator and the principal creditors of the company subject to administration to agree to cap his fees to monies in a nominated deed fund account. This effected a variation of the deed of company arrangement without the formal processes of the Corporations Act being required to be followed – by having recourse to principles of estoppel and the extremely wide powers conferred by s.447A if the Corporations Act.
Employers' Mutual Indemnity v JST Transport - 15 ACLC
314. This case ruled that an administrator could use
special proxies to vote in favour of a Deed of Company
Arrangement. Workers Compensation insurers wanted to
challenge the Deed because it left them exposed for
continuing liability for an insurance policy where
only a portion of the dividends were going to be paid
under the Deed. If the proxies had not been able to
be used the proposal for the deed would have failed
to the detriment of the other creditors.
Re Genasys II Pty Ltd - 14 ACLC
729. This case allowed directors of a company in
receivership to appoint an
administrator – giving better outcomes for the
unsecured creditors of the company than if the receivership
had merely continued for the benefit of the secured
Re Dionys Civil Engineering Pty Ltd 28 ACSR 83. This
case allowed a deed of company arrangement to be completed
even though some of the creditors had decided to try
and have the company go into liquidation even though
all of the money due under the deed of company arrangement
had been paid to the deed administrator.
Melbase Corp Pty v Segenhoe Ltd - 13
ACLC 823. This was the first case to grant leave to
to bring a winding-up application against a company.
Re Kalblue Pty Ltd - 12 ACLC 1,057. This
case allowed the unheard of to happen - a debtor had
Re Spargold Enterprises Pty Ltd - 32
ACSR 363. An administrator had a court advise that
where a company
under a Deed of Company Arrangement appeared to be
insolvent, then he had an obligation to all creditors
and standing to apply to have the company wound-up.
Re A & D Hagan Pty Ltd – 46
ACSR 434. The Court determined that administrators
had to personally
chair the second creditors meeting under a voluntary
administration. They could not appoint someone else
to chair the meeting for them.
PMF Legal - Fighting to Win:
Telstra 2009 – we had to launch urgent litigation (including urgent injunctive relief) for a client who had been given notice by Telstra that their contract was going to be terminated. This case involved some cutting edge law to preserve and protect the client’s contract, the use of complex computer technology and resources to process over half a million documents and to come to grips with Telstra’s systems and procedures. The result of the litigation was to give Telstra, and the client, the opportunity to come to a better understanding of each other’s position and to leave them in a contractual relationship going forward.
Stuart Ariff –
PMF Legal has acted on behalf of the major owners of the CarLovers Group since 2005. Our engagement was in relation to issues that that Group had with Mr Ariff as the deed administrator of the deeds of company arrangement that the CarLovers Group had entered into with him in late 2003. On our application ASIC had appointed the owners’ nominee an eligible applicant to undertake examinations of Mr Ariff and others to investigate matters that we had reported to ASIC. Over the following years my clients had to engage in many court cases with Mr Ariff. In November 2007 Mr Ariff, in the course of a court case seeking his removal, Mr Ariff agreed to resign. Since then court cases have continued by my clients against Mr Ariff. On 18 August 2009, in proceedings brought by ASIC in 2008 in relation to the CarLovers Group and a number of other major insolvency administrations, Mr Ariff consented to a life ban from acting as a corporate insolvency practitioner in various capacities as official, registered, provisional or other liquidator, voluntary administrator, administrator or controller. This firm played a key role in bringing this important matter to a head and providing critical evidence from the examinations that enabled ASIC to bring about this result.
A director of a company
that went into liquidation, had been fighting to have
a claim that the company had against a secured creditor
brought so that the monies could be recovered and returned
Notwithstanding the client’s usually
helpless position as the director of a failed company,
PMF Legal succeeded in having ASIC exercise its rarely
called on power to appoint him as an eligible applicant
conduct examinations of key people with the secured
creditor to investigate the circumstances that led
to the company being put into liquidation. The examinations
established that there was a very good case against
the secured creditor. We then succeeded in having the
Court allow our client to bring the company’s
action against the secured creditor.
A client who had no hope of reversing
the secured creditors’ alleged wrongful action
was able to bring that action.