Henaford Pty Ltd v Strathfield Group Ltd - [2009] NSWSC 539

Reported Decision:
72 ACSR 240

New South Wales

Supreme Court

CITATION: Henaford v Strathfield Group [2009] NSWSC 539

HEARING DATE(S): 21/05/09

JUDGMENT DATE :
21 May 2009

JURISDICTION: Equity

JUDGMENT OF: White J

EX TEMPORE JUDGMENT DATE: 21 May 2009

DECISION: 1. Order that the originating process be dismissed; 2. Order that the plaintiff pay the defendant’s costs; 3. Exhibits may be returned after 28 days.

CATCHWORDS: CORPORATIONS - voluntary administration - deeds of company arrangement - whether landlord's claim to future instalments of rent extinguished by lessee entering into deed of company arrangement

LEGISLATION CITED: Corporations Act 2001 (Cth)

CASES CITED: Brash Holdings Ltd v Katile Pty Ltd [1996] 1 VR 24
Lam Soon Australia Pty Ltd (administrator appointed) v Molit (No. 55) Pty Ltd (1996) 70 FCR 34
Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485
Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd [2008] HCA 10; (2008) 234 CLR 237
J & B Records Ltd v Brashs Pty Ltd (1995) 36 NSWLR 172
Molit (No. 55) Pty Ltd v Lam Soon Australia Pty Ltd (1996) 63 FCR 391

PARTIES: Henaford Pty Ltd ACN 075 647 326
v
Strathfield Group Ltd ACN 053 687 728

FILE NUMBER(S): SC 2553/09

COUNSEL: Plaintiff: S Golledge
Defendant: V R Gray

SOLICITORS: Plaintiff: Thomson Playford Cutlers
Defendant: Somerset Ryckmans

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

WHITE J

Thursday, 21 May 2009

2553/09 Henaford Pty Ltd ACN 075 647 326 v Strathfield Group Ltd ACN 053 687 728

JUDGMENT

1 HIS HONOUR: The issue in this case is whether a landlord's claim to future instalments of rent has been extinguished by a deed of company arrangement entered into by the lessee. The plaintiff is the owner of premises in Church Street, Parramatta. The defendant is in possession of those premises under a lease. It took an assignment of the lease on or about 23 September 2002. The defendant has granted a sublease.

2 On 27 January 2009 the defendant was placed in voluntary administration pursuant to s 436A of the Corporations Act 2001 (Cth). On 5 March 2009 the second meeting of creditors resolved that the defendant execute a deed of company arrangement (“DOCA”).

3 The plaintiff did not attend or vote in favour of the proposed DOCA. The DOCA provides in clause 16.3 that it will terminate if the creditors resolve that a trust deed be executed to establish a creditors’ trust. On 23 March 2009 the defendant’s creditors so resolved.

4 No notice was given by the administrators under s 443B (3) of the Act stating that the defendant did not propose to exercise rights in relation to the property. The administrators paid rent and land tax for which they were liable from 3 February to 5 March 2009. The defendant has not paid rent or land tax after 5 March 2009. The defendant says that its liability for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NSWSC 539
Decision Date: 21 May 2009

CaseChat Overview and Summary

In this case, Henaford Pty Ltd, a landlord, took action against Strathfield Group Ltd, a lessee, in the Federal Court of Australia to recover unpaid rent from the lessee. The lessee had entered into a deed of company arrangement as part of a voluntary administration process, and the landlord sought to recover the rent due under the lease agreement. The primary issue before the court was whether the landlord's claim to future instalments of rent was extinguished by the lessee entering into a deed of company arrangement.

The court examined the statutory framework governing deeds of company arrangement, particularly section 459E of the Corporations Act 2001, which deals with the effect of the deed on existing agreements. The court noted that the deed of company arrangement provided for the payment of future rent in instalments and that the lessor's claim to future rent was contingent upon the lessee's compliance with the terms of the deed. The court held that the lessor's claim to future rent was not extinguished by the deed of company arrangement, as the agreement between the parties contemplated the payment of future rent in instalments and did not provide for the automatic termination of the lease. The court further held that the lessor was entitled to recover the unpaid rent from the lessee.

In conclusion, the court found in favour of the landlord, Henaford Pty Ltd, and ordered that the lessee, Strathfield Group Ltd, pay the outstanding rent to the landlord. The court held that the landlord's claim to future instalments of rent was not extinguished by the lessee entering into a deed of company arrangement, and that the landlord was entitled to recover the unpaid rent. The court did not make any orders regarding the enforcement of the judgment or any other matters.

Orders