Reed Constructions Australia Ltd v DM Fabrications Pty Ltd - [2007] NSWSC 1190

CITATION: Reed Constructions Australia Ltd v DM Fabrications Pty Ltd [2007] NSWSC 1190

HEARING DATE(S): 19/10/07

JUDGMENT DATE :
23 October 2007

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: See paragraphs [25] and [48]

CATCHWORDS: CORPORATIONS - voluntary administration - deed of company arrangement - where deed refers to obviously incorrect date - whether correct date may be substituted as a matter of constructiion - statutory force and effect of deed indicate rectification by order under s.447A - CORPORATIONS - deed of company arrangement - substantive application for order terminating or avoiding deed - application for interlocutory injunction restraining enforcement of judgment against subject company - where company had judgment created by Building and Construction Industry Security of Payment Act - where judgment debtor asserted greater claim provable under deed of company arrangement - operation of s.553C

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999, s.25
Corporations Act 2001 (Cth), Parts 5.3A, 5.6 Division 6, ss.444A(4)(i), 444B(2), 444B(6), 444D, 444G, 445D, 445G, 447A, 553C

CASES CITED: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Bidald Consulting Pty Ltd v Miles Special Builders Pty Ltd (2006) 226 ALR 510
Brandrill Ltd v Newmont Yandal Operations Pty Ltd (2006) 24 ACLC 1179
Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230
Fitzgerald v Masters (1956) 95 CLR 420
Gye v McIntyre (1991) 171 CLR 601
Kruger; Re Kruger Engineering Pty Ltd (2006) 60 ACSR 191
Mondello Farms Pty Ltd v Annatom Pty Ltd [2007] SASC 296
MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636
North Circular Properties Ltd v Internal Systems Organisation Ltd, unreported, UKChD, 26 October 1984
Re Co-ownership Land Development Pty Ltd (1987) 11 ACLR 527
Stein v Blake [1996] AC 243
Veolia Water Solutions & Technologies Pty Ltd v Kruger Engineering Australia Pty Ltd [2007] NSWSC 459

PARTIES: Reed Constructions Australia Limited - Plaintiff
DM Fabrications Pty Limited - First Defendant
Nicholas Craig Malanos and Ian James Purchas - Second Defendants

FILE NUMBER(S): SC 4497/07

COUNSEL: Mr B.A, Coles QC/Mr B. Debuse - Plaintiff
Mr M.A. Ashhurst SC - Defendant

SOLICITORS: Home Wilkinson Lowry - Plaintiff
PMF Legal - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY, 23 OCTOBER 2007

4497/07 REED CONSTRUCTIONS AUSTRALIA PTY LIMITED v DM FABRICATIONS PTY LIMITED 2 ORS

JUDGMENT

1 I am dealing with two interlocutory applications in a proceeding commenced by originating process filed on 12 September 2007.

2 By that originating process, the plaintiff (which I shall call “Reed”) seeks relief under the Corporations Act 2001 (Cth) directed towards termination or avoidance of a deed of company arrangement executed by the first defendant, DM Fabrications Pty Ltd (“DM”). I shall come in due course to the basis for that claim which is advanced by reference to s.445D dealing with termination of a deed of company arrangement by the court and s.445G authorising the court to declare such…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] NSWSC 1190
Decision Date: 23 October 2007

CaseChat Overview and Summary

The matter involved Reed Constructions Australia Ltd, as the plaintiff, and DM Fabrications Pty Ltd, as the defendant. The dispute centred around the enforceability of a deed of company arrangement and the implications of a judgment entered against DM Fabrications under the Building and Construction Industry Security of Payment Act. The case was heard in the Federal Court of Australia. The court was tasked with determining whether a date incorrectly stated in a deed of company arrangement could be corrected and whether an interlocutory injunction could be granted to prevent enforcement of a judgment against DM Fabrications. The plaintiff argued that the judgment debtor claimed a greater provable debt under the deed of company arrangement.

The court considered the legal principles surrounding the interpretation of statutory documents, specifically the deed of company arrangement, and the applicability of section 553C of the Corporations Act. The primary issue was whether the date in the deed, which was clearly erroneous, could be amended to reflect the correct date. Additionally, the court needed to assess whether an interlocutory injunction should be granted to halt the enforcement of the judgment against DM Fabrications, given the contention that the judgment debtor's claim was greater than what was provable under the deed of company arrangement. The court also had to determine the operation of section 553C in the context of these proceedings.

The court held that the date in the deed of company arrangement could be corrected as a matter of construction to reflect the intended date, as the statutory force and effect of the deed supported rectification under section 447A of the Corporations Act. In relation to the interlocutory injunction, the court found that an injunction would be inappropriate because the application was not made within a reasonable time, and there was a significant risk that the judgment creditor would suffer irreparable harm if the injunction was granted. The court concluded that section 553C did not permit the judgment debtor to assert a greater provable debt than that stipulated in the deed of company arrangement.

As a result, the court dismissed the application for an interlocutory injunction and ruled that the date in the deed of company arrangement could be rectified to reflect the intended date. No further orders were made as the court found that the application for rectification was sufficient to address the issues raised in the case.

Orders