developments in deeds of company arrangement - DibbsBarker

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4. Recent cases relating to court intervention4.1 Refusal to terminate ab initioIn Parkview Constructions Pty Ltd v Tayeh and Ors 14 the New South Wales SupremeCourt dismissed an application to terminate a DOCA under section 445D(1) of theCorporations Act where it was alleged that the DOCA was “unjust, oppressive,discriminator and unfair”.FactsSydney Civil Excavation Pty Ltd (Sydney Civil) entered into a DOCA and appointedDeed Administrators with the deed providing for termination upon creation of a schemecomprising of the creditors under the deed. The scheme was created immediately after thedeed was executed, and the DOCA subsequently terminated. Parkview sought to have theDOCA terminated ab initio in a way that would render the subsequent scheme invalid.IssueThe Court was asked to determine whether or not the DOCA could be terminated abinitio, in a way that the DOCA could be regarded as never having had any effect.14 [2009] NSWSC 18611899717 v1 Brisbane 05 08 0914
DecisionThe Court found that the DOCA was validly terminated after the arrangement of thescheme by virtue of section 445C(c) of the Corporations Act, which provides that a deedwill terminate on occurrence of circumstances specified in a DOCA.The Court held that termination under section 445C(c) was termination of precisely thesame kind and quality as that which can be achieved through an order of the Court undersection 445D. The Court held that such an order would have no utility, and for this reasonwas not made.Section 445H of the Corporations Act provided that “termination or avoidance, in wholeor in part, of a deed of company arrangement does not affect the previous operation ofthe deed”. Parkview claimed that section 447A of the Corporations Act provided a basisfor voiding a DOCA ab initio.The Court conceded that there was a possibility that such an order could be granted,referring to obiter discussions of the issue in Kyle House Pty Ltd v ACN 000 016 213 PtyLtd 15 . Parkview could not rely on section 447A however because they had not advancedtheir case for reliance on that provision in its submissions.The Court held that there was a clear requirement that parties seeking relief under aparticular provision of the Act identify that provision at the outset. Parkview only everforeshadowed a case for termination of the DOCA based on section 445D of the Act and15 [2007] NSWSC 224.11899717 v1 Brisbane 05 08 0915
Page 1 and 2: DEVELOPMENTS IN DEEDS OF COMPANYARR
Page 3 and 4: DEVELOPMENTS IN DEEDS OF COMPANY AR
Page 5 and 6: inevitable disadvantage of potentia
Page 7 and 8: IssueThe Court was asked to decide
Page 9 and 10: The Administrators argued that even
Page 11 and 12: 3.3 Liquidation as an event termina
Page 13: If the administrator were required
Page 17 and 18: ecommended that Storm be wound up.
Page 19: 4.3 Opting for a DOCA instead of wi
Page 22 and 23: Courts have shown a willingness to

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