Sev.en Gamma a.s v IG Energy Holdings (Australia) Pty Ltd

In the Federal Court of Australia, Sev.en Gamma a.s brought a case against IG Energy Holdings (Australia) Pty Ltd. The plaintiff claimed that the defendant had not repaid money owing under a credit facility and that administrators had been appointed to the defendant. The plaintiff argued that the defendant must execute a general security deed under a clause of the credit agreement. However, the security deed would only be valid if entered into under an order of the Court under s 437D(2)(c) of the Corporations Act 2001 (Cth). The plaintiff argued that the defendant entering the security deed would benefit the company as a whole or creditors generally.

The court had to determine whether the plaintiff had proved that the defendant entering the security deed would benefit the company as a whole or creditors generally. The court also had to determine whether the promise to provide "any adequate" security in the credit agreement was sufficiently certain to be enforceable. The court found that the credit agreement did not identify the secured property, the circumstances it may be exercised, and the rights that attach to its exercise. The court held that the promise to provide "any adequate" security in the credit agreement was uncertain and therefore unenforceable.

The court held that the plaintiff had not proved that the defendant entering the security deed would benefit the company as a whole or creditors generally. The court found that the security deed would be void unless entered into under an order of the Court under s 437D(2)(c) of the Corporations Act 2001 (Cth). The court held that the promise to provide "any adequate" security in the credit agreement was uncertain and therefore unenforceable. The court dismissed the plaintiff's claim.