Dean-Willcocks v ACG Engineering Pty Ltd (in liq)

Reported Decision: (2003) 45 ACSR 290
(2003) 21 ACLC 1226

Supreme Court

CITATION:	Dean-Willcocks v ACG Engineering [2003] NSWSC 353
HEARING DATE(S):	28 April 2003
JUDGMENT DATE:	29 April 2003
JURISDICTION:	Equity
JUDGMENT OF:	Austin J
DECISION:	Declaration that the plaintiff holds the Administration Fund in trust for the Deed Creditors
CATCHWORDS:	CORPORATIONS - liquidation and voluntary administration - administration under deed of company arrangement - fund is established under deed but not distributed before company goes into liquidation - whether fund is held solely for deed creditors, or for all creditors including post-deed creditors
LEGISLATION CITED:	Corporations Act 2001 (Cth) ss 444D, 444G Corporations Regulations Reg 5.3A.07 and Schedule 8A
CASES CITED:	Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 Carreras Rothmans Ltd v Freeman Matthew Treasure Ltd (in liq) [1995] 1 All ER 155 Re Australian Elizabethan Theatre Trust (1999) 30 FCR 491 Re GB Nathan Pty Ltd (in liq) (1991) 24 NSWLR 674 Re Spargold Enterprises Pty Ltd; ex parte McDonald [1999] NSWSC 63 Tito v Waddell (No 2) [1977] 3 All ER 129 Twinsectra Ltd v Yardley [2002] 2 All ER 377
PARTIES :	Ronald John Dean-Willcocks (P) ACG Engineering Pty Ltd (in liquidation) (D)
FILE NUMBER(S):	SC 2091/03
COUNSEL:	Mr G Cussen (Solicitor) (P)
SOLICITORS:	Kemp Strang (P)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

AUSTIN J

TUESDAY 29 APRIL 2003

2091/03 RONALD JOHN DEAN-WILLCOCKS V ACG ENGINEERING PTY LTD (IN LIQ)

JUDGMENT

1 HIS HONOUR: This case raises a novel point about the nature of funds in the hands of a deed administrator, collected for the purpose of a distribution to pre-deed creditors but not paid to them before the company goes into liquidation.

2 The plaintiff was appointed voluntary administrator of the company on 26 November 2001. The company continued to trade during the period of administration. On 24 December 2001 the company executed a deed of company arrangement ("the DCA"), which provided for the plaintiff to be the Deed Administrator. The following are the pertinent provisions of the DCA:

(1) By clause 1.1, "creditors" were defined to mean all unsecured creditors of the company whose claims arose prior to 26 November 2001, excluding the Deferred Creditors (the directors and their associated entity, who entered into a deed of deferral);
(2) By clause 4, the Deed Administrator was required to follow a procedure to invite proofs of debt to be submitted by Creditors (as defined), and to adjudicate on those claims so as to settle a list of Participating Creditors;
(3) By clause 5, the company and the directors were required to pay or procure the payment to the Deed Administrator of an amount of $112,730 on account of ordinary unsecured creditors other than the Deferred Creditors, and also to pay amounts to cover the Administrator's costs, unremitted tax instalment deductions, and amounts payable to Priority Creditors (those with claims having priority under s 556(1)(e)-(h) of the Corporations Act), and the Deed Administrator was required to…