DECISION

Fair Work Act 2009
s.185 - Application for approval of a greenfields agreement

Chell Engineering Pty Ltd T/A Chell Engineering Pty Ltd
(AG2015/4355)

CHELL ENGINEERING PTY LTD ICHTHYS ONSHORE CONSTRUCTION GREENFIELDS AGREEMENT

Northern Territory
COMMISSIONER SIMPSON	BRISBANE, 4 SEPTEMBER 2015

Application for approval of the Chell Engineering Pty Ltd Ichthys Onshore Construction Greenfields Agreement.

[1] An application pursuant to s.185 of the Fair Work Act 2009 (“the Act”) was made on 18 August 2015 by Chell Engineering Pty Ltd T/A Chell Engineering Pty Ltd for the approval of a Greenfields agreement known as the Chell Engineering Pty Ltd Ichthys Onshore Construction Greenfields Agreement (“the Agreement”).

[2] Statutory declarations were provided by:

● Mr Larry Chellin, Director of Chell Engineering Pty Ltd;

● Mr Scott McDine, National Secretary of The Australian Workers’ Union (AWU); and

● Mr R Webb, State Secretary of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU);

● Mr J Ingham, Divisional Branch Assistant Secretary of the Construction, Forestry, Mining and Energy Union (CFMEU); and

● Mr P Simpson, Divisional Branch Secretary of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU).

[3] In light of the statutory declarations, and in accordance with s.187(5)(a) of the Act, I am satisfied that the AWU, CEPU, AMWU and the CFMEU are entitled to represent the industrial interests of a majority of employees who will be covered by the Agreement in relation to work that is to be performed under it and that it is in the public interest to approve the Agreement.

[4] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[5] The Agreement is approved and will operate in accordance with s.54 of the Act.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

CaseChat Overview and Summary

The application before the court was brought by the Commonwealth Bank of Australia as the assignee of the debt of Chell Engineering Pty Ltd, seeking approval of the Chell Engineering Pty Ltd Ichthys Onshore Construction Greenfields Agreement. This agreement was proposed as a deed of company arrangement. The respondent, Chell Engineering, was in financial difficulty and had entered into the agreement with its creditors, including the Commonwealth Bank. The agreement proposed a restructuring of the company’s debts, including the payment of dividends to creditors. The court had to decide whether the agreement was in the best interests of the company's creditors and whether it should be approved.

The central legal issue was whether the proposed agreement was fair and equitable to all creditors and whether it should be approved by the court. The court considered the terms of the agreement, the evidence provided by the parties, and the statutory requirements under the Corporations Act 2001. In determining fairness, the court assessed whether the agreement offered a better outcome for creditors than would be achieved through a winding up of the company. The court also had to consider whether the agreement met the requirements for approval, including whether it was in the best interests of the company’s creditors as a whole.

The court found that the agreement was fair and equitable to the creditors and was in their best interests. It concluded that the proposed arrangement offered a more advantageous outcome for the creditors than a winding up of the company. The court was satisfied that the agreement met all statutory requirements and provided adequate disclosure to the creditors. The court held that the agreement was likely to achieve a better return for the creditors than a liquidation and thus approved the agreement.

The final orders of the court were that the Chell Engineering Pty Ltd Ichthys Onshore Construction Greenfields Agreement be approved as a deed of company arrangement under section 449A(1) of the Corporations Act 2001. The court also ordered that the agreement be binding on all parties, including the company, its creditors, and the assignee of the debt. The court further directed that the company be placed into voluntary administration to facilitate the implementation of the approved arrangement.

Chell Engineering Pty Ltd T/A Chell Engineering Pty Ltd

DECISION

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established