McCann, in the matter of Walton Construction (Qld) Pty Ltd (In Liq) v QHT Investments Pty Ltd

Walton Construction (Qld) Pty Ltd (In Liq) brought an application against QHT Investments Pty Ltd concerning a deed of assignment of a debt owed to Walton Construction by another company. The applicant argued that the assignment of the debt was a voidable transaction under the Corporations Act 2001 (Cth). The central issue was whether the deed of assignment was an uncommercial transaction that could be set aside under the Act. QHT Investments defended that the transaction was valid and should not be set aside.

The court examined the nature of the deed of assignment and concluded that it was an uncommercial transaction. The deed involved the assignment of a debt valued between $204,284 and $6.18 million for a mere $30,000, a price that lacked any commercial rationale. The court found that the assignment was not an arms-length transaction and that QHT Investments had obtained a significant bargain, far greater than what could be justified by normal commercial practice. The court held that the assignment did not meet the criteria for being considered a reasonably commercial transaction. Additionally, the court found that QHT's argument regarding the administrator's conduct under s 451C of the Corporations Act did not protect the transaction from being set aside, as the conduct in question did not affect the rights, interests, or property of the company in administration.

The court declared the deed of assignment voidable under s 588FF of the Corporations Act and ordered QHT Investments to repay the amount of $679,453.80 to the applicant. The court left the matter of interest and costs to be determined in further proceedings.