In the matter of TLC Marketing Worldwide Pty Ltd (subject to a deed of company arrangement)

In this matter, TLC Marketing Worldwide Pty Ltd is the subject of a deed of company arrangement. The company sought relief from creditors pursuant to the Corporations Act, which was granted by the Court. Subsequently, a creditor, who had not participated in the creditors’ meeting, applied to set aside the resolution approving the deed of company arrangement. The creditor’s application was made late, but it was supported by an affidavit alleging that the resolution was improper because certain creditors had been misled as to the value of the company’s assets. The application was brought in the Supreme Court of New South Wales, Equity Division.

The legal issues that arose in this case were whether the late application could be accepted and, if so, whether the public interest in the early determination of the application warranted the acceptance of the late application. The creditor argued that the public interest in the early determination of the application was paramount, and that the lateness of the application was excusable given the circumstances. The company, on the other hand, argued that the creditor’s application was not made within a reasonable time and that the delay would cause injustice to the company and other creditors.

The Court held that the creditor had demonstrated exceptional circumstances that justified the late application. The Court found that the public interest in the early determination of the application was significant, given that the resolution approving the deed of company arrangement was a significant step in the restructuring of the company’s debt. The Court also found that the creditor had acted reasonably and in good faith in bringing the application, and that the delay was not attributable to any fault or neglect on the part of the creditor. The Court therefore accepted the creditor’s application and set aside the resolution approving the deed of company arrangement.

The Court ordered that the deed of company arrangement be set aside and that the company be placed into liquidation. The Court also ordered that the creditor’s costs of the application be paid by the company. The Court emphasised that the decision was based on the exceptional circumstances of the case, and that it should not be taken as a general approval of late applications in insolvency matters.