Longley (deed administrator), in the matter of Dixon Advisory & Superannuation Services Pty Ltd (subject to deed of company arrangement)

The case involves Dixon Advisory & Superannuation Services Pty Ltd (DASS), a financial services provider, and its deed of company arrangement (DOCA). DASS provided advice to clients to invest in a US property fund, which underperformed, leading to regulatory and class action proceedings against DASS. The DOCA was executed while these proceedings were ongoing, with the aim of settling the class actions and distributing a deed fund to former clients. The current dispute seeks to amend the DOCA through a court order rather than a creditors’ resolution. The amendments primarily relate to the definition of "Settlement of the Representative Proceedings" and the removal of certain conditions for distribution.

The key legal issues the Court needed to address were whether the proposed amendments to the DOCA were in the best interests of the creditors and consistent with the objectives of the Corporations Act. The Court had to consider whether it was appropriate to modify the DOCA through court order under section 447A(1) of the Corporations Act 2001 (Cth), and whether the amendments would be consistent with the statutory framework governing company arrangements. The Court also needed to determine whether the amendments would prejudice the proper administration of justice and whether the creditors had been adequately informed and consulted.

The Court found that the proposed amendments to the DOCA were in the best interests of the creditors and consistent with the statutory objectives. The Court accepted that the amendments would facilitate the settlement of the class actions and the distribution of the deed fund in a manner that was fair and equitable. The Court also noted that the amendments had been fully discussed with the committee of inspection and that the creditors had expressed support for the changes. The Court concluded that the amendments would not prejudice the proper administration of justice and that the creditors had been adequately informed of the changes. The Court granted the orders sought, varying the DOCA as proposed and allowing the deed administrators to make the necessary amendments.

In summary, the Court granted orders varying the DOCA to allow for a broader definition of "Settlement of the Representative Proceedings" and to remove certain conditions for distribution. The Court also ordered that certain pages of an annexure be marked confidential and that the deed administrators provide copies of the orders to DASS's creditors. The deed administrators' costs were to be borne by the deed administration of DASS.