Duncan as Liquidator of WDR Iron Ore Pty Ltd (In Liquidation) v SMA Industries Pty Ltd

The case of Duncan as Liquidator of WDR Iron Ore Pty Ltd (In Liquidation) v SMA Industries Pty Ltd involved the liquidator of WDR Iron Ore Pty Ltd (WDRIO) suing SMA Industries Pty Ltd (SMA) for preference payments and voidable transactions. The dispute centred on whether SMA had made unfair preferences to WDRIO during its insolvency, particularly in relation to contracts for services and materials supplied during the construction of an iron ore mine at Roper Bar. The case was heard in the Supreme Court of South Australia.

The key legal issues the court had to decide included whether SMA had actual or ostensible authority to bind WDRIO to contracts, whether SMA was acting as an agent for WDRIO in entering into those contracts, and whether the February 2014 agreement between SMA and WDRIO's managing director, Norm Gardner, constituted a new contract that superseded the earlier agreements. The court also needed to determine whether WDRIO had made any unfair preferences to SMA.

The court found that SMA did not have actual or ostensible authority to bind WDRIO to the contracts in question. It was determined that the August and November 2013 contracts were entered into directly between SMA and WDRIO, and not as agents for WDRIO's parent company, Western Desert Resources Ltd (WDRL). Furthermore, the February 2014 agreement did not supersede the earlier contracts but rather referred to them as the basis for ongoing dealings. The court concluded that SMA was not acting as an agent for WDRIO and that WDRIO had made unfair preferences to SMA by entering into those contracts.

The court ordered that SMA repay the preference payments made to it by WDRIO, along with interest. The liquidator was granted leave to amend the pleadings to include claims outside the limitation period, but only to the extent necessary to establish the facts relevant to the unfair preferences.