Deputy Commissioner of Taxation v Pddam Pty Ltd

The Deputy Commissioner of Taxation sought to set aside a deed of company arrangement under Part 5.3A of the Corporations Law which was entered into by Pddam Pty Ltd on 22 June 1994. The applicant claimed that the deed should be set aside for a number of reasons, including that the administrator of the deed had failed to comply with certain statutory requirements. The court was required to determine whether the deed should be set aside or upheld, and to consider the applicant's claims that the administrator had failed to comply with the Corporations Law.

The court found that the administrator had not complied with certain statutory requirements, including providing a report about the company's business, property, affairs and financial circumstances, and setting out his opinions as to whether it would be in the creditors' interests for the company to execute a deed of company arrangement or for the administration to end or for the company to be wound up. The court also found that the administrator had failed to disclose a deed between the company and its secured creditor, the National Australia Bank, which was material to any decision by the other creditors. However, the court found that there was no basis for concluding that setting aside the deed and consequent liquidation would confer any practical benefit on any creditor, including the applicant. The court also considered the hardship that would be caused to the former employees of the company if the deed was set aside. The court found that the deed was supported by some creditors and was not opposed by any other creditor apart from the applicant. The court exercised its discretion not to set aside the deed.

The application was dismissed, and there was no order as to costs.