Decon Australia Pty Ltd v TFM Epping Land Pty Ltd

Decon Australia Pty Ltd sought interim relief to restrain meetings of creditors and the execution of Deeds of Company Arrangement (DOCA) in relation to TFM Epping Land Pty Ltd and KRI Constructions Pty Ltd. The plaintiff claimed that the administrators of the defendant companies had failed to properly investigate and consider the companies' affairs, had provided misleading information to creditors, and had denied the plaintiff its proper voting rights. The court was required to determine whether the administrators had breached their duties under the Corporations Act 2001 (Cth), and whether the balance of convenience favoured granting interim relief to the plaintiff. The court found that the plaintiff had raised serious questions to be tried, but that the balance of convenience did not justify the court's intervention at that stage. The court noted that the administrators had determined to admit the plaintiff's claims against each of TFM and KRI for only $1 for the purpose of voting, which was surprising. However, the court found that the cross-claim by the companies against the plaintiff did not prevent the debt owed being immediately due and payable. The court also found that the plaintiff had not demonstrated that it would suffer significant prejudice if the creditors meetings went ahead and the DOCAs were executed. The court therefore dismissed the plaintiff's application for interim relief, but ordered that the matter be brought back for urgent case management to determine the plaintiff's final relief with expedition.
The court also noted that the relief sought in order 6 of the originating process, which was to say the relief dealing with the provision of documents, was not required to be dealt with immediately. The court found that the parties had not made oral submissions in relation to this relief, and that it could be adjourned to be dealt with at a later date. The court reserved the costs of the application for interim relief, noting that the outcome of the creditors meetings and the final relief may have a bearing on them. The court listed the matter for case management at 4:15pm on 29 July 2020, and noted that entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.