Lendlease Corporation Limited ACN 000 226 228 & Anor v David William Pallas and Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund & Anor

The High Court of Australia heard an appeal concerning a dispute between Lendlease Corporation Limited and another entity (the appellants) and David William Pallas and Julie Ann Pallas, as trustees for the Pallas Family Superannuation Fund, and another entity (the respondents). The core of the dispute involved the interpretation of certain provisions within a deed of company arrangement and related agreements, specifically concerning the calculation of distributions to creditors.

The central legal issue before the High Court was whether the appellants were entitled to receive distributions from the Pallas Family Superannuation Fund in priority to other creditors, or whether such distributions were to be made on a pari passu basis. This required the Court to consider the proper construction of the deed of company arrangement and the interplay between its terms and the general principles of insolvency law regarding the distribution of assets.

The High Court, in a unanimous decision, found in favour of the respondents. The Court reasoned that the deed of company arrangement did not create a priority for the appellants' claim. Instead, the terms of the deed, when read as a whole and in conjunction with the relevant statutory provisions governing deeds of company arrangement, mandated that distributions to creditors, including the appellants, were to be made on a *pari passu* basis. The Court emphasised that any intention to create a priority would need to be expressed with far greater clarity and specificity within the deed itself. The appeal was accordingly dismissed.