Shafston Avenue Construction Pty Ltd v McCann

Shafston Avenue Construction Pty Ltd v McCann involved an application by the plaintiffs to set aside a Deed of Company Arrangement (DOCA) under section 445D of the Corporations Act 2001 (Cth). The plaintiffs argued that the creditors of the company would be better off if the DOCA were terminated and the company placed into liquidation. The Administrators had previously concluded that the DOCA was in the best interests of the creditors. The primary legal issues before the court were whether the DOCA was unfairly prejudicial or contrary to the interests of creditors as a whole, or if it could be set aside for some other reason. The plaintiffs also sought discretionary termination of the DOCA.

The court examined the evidence and found that the plaintiffs failed to establish any of the grounds for termination prescribed under section 445D(1)(f) or (g) of the Act. The court concluded that the Administrators had conducted a thorough review of the company's financial position and had reasonably determined that the DOCA was in the creditors' best interests. The court found no basis to interfere with the Administrators' decision and dismissed the application. The court exercised its discretion not to terminate the DOCA, given the lack of evidence supporting the plaintiffs' case.

The final orders of the court required the parties to consult and submit a draft set of orders reflecting the reasons for the judgment by close of business on 6 September 2019. Entry of orders was to be dealt with in accordance with Rule 39.32 of the Federal Court Rules 2011.