Khoury v Zambena Pty Ltd

CITATION:	Khoury v Zambena Pty Limited [1999] NSWCA 402
FILE NUMBER(S):	CA 40253/97
HEARING DATE(S):	12/07/99 13/07/99
JUDGMENT DATE:	28 October 1999
PARTIES :	Joseph Khoury & Sons Zambena Pty Limited
JUDGMENT OF:	Beazley JA at 1; Fitzgerald JA at 6; Davies AJA at 89

LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	2680/96
LOWER COURT JUDICIAL OFFICER:	Young J

COUNSEL:	Appellant: P King/ K Hawes Respondent: R B S Macfarlan QC/ M Wigney
SOLICITORS:	Appellant: Cropper Parkhill Respondent: P A Somerset & Co
CATCHWORDS:	Deed of arrangement; Resolution of creditors failure to give notice of meeting; Termination of deed; Unexplained delay; Lack of financial benefit
DECISION:	Appeal Dismissed

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40253/97
CD 16285/92
CD 50385/93

BEAZLEY JA
FITZGERALD JA
DAVIES AJA

Thursday, 28 October 1999


KHOURY v ZAMBENA PTY LTD

JUDGMENT

1    BEAZLEY JA: I have had the advantage of reading in draft the judgments of Fitzgerald JA and Davies AJA. I agree with the reasons of Davies AJA save in respect of his Honour’s concluding comments in relation to delay and the lack of financial benefit to be gained by setting aside the deed. It follows that I do not agree with the orders proposed by his Honour.

2    Whilst it is true that some four years has now passed since the Deed was entered into, a part only of that time was due to delay in commencement of proceedings. The resolution approving the Deed was passed on 6 June 1995. Proceedings were commenced on 9 July 1996 seeking to have the Deed of Arrangement set aside, some thirteen months into the effective life of the Deed. There was no evidence as to when the appellants received notice of the meeting. The most that can be said is that it was after 6 June 1995. To that extent, the appellants have failed to explain their delay.

3 Delay is relevant to the exercise of the Court’s discretion: Molit (No 55) Pty Ltd v Lam Soon Australia Pty Ltd (1996) 19 ACSR 160 at 171. However, the delay or lapse of time relied upon to defeat the appellants’ claim is the delay up to the time of the hearing of the appeal. Only about twenty five per cent of that time is directly attributable to delay at the hands of the appellants. The remainder of the length of time was due to the exigencies of the court process. It is extraordinary to me that parties who invoke the court process to either assert their rights or to vindicate a wrong done to then are defeated by delay within the court system itself.

4    In this case, as Davies AJA has identified, there were serious deficiencies in this Deed. I consider those deficiencies to be of such magnitude that the appellants should not be defeated by the delay in commencing proceedings. I am also unconvinced that Zambena would necessarily be put into liquidation if the order…