Shergold vTanner M63/2001

The High Court of Australia heard an appeal in *Shergold v Tanner*. The dispute concerned the interpretation of a clause in a deed of company arrangement, specifically whether it conferred a right on the company to recover moneys paid by it to the respondent, Tanner, under a guarantee. The appellant, Shergold, was the liquidator of the company.

The central legal issue before the High Court was whether the liquidator, on behalf of the company, could recover payments made to Tanner pursuant to a guarantee, given that the company had subsequently entered into a deed of company arrangement. This involved determining the effect of the deed on the company's rights and obligations, and whether the payments made under the guarantee were recoverable as a preference or otherwise.

The Court considered the nature of the guarantee and the payments made under it. It was held that the payments made by the company to Tanner were not recoverable by the liquidator. The Court reasoned that the payments were made in discharge of the company's liability under the guarantee, and that the deed of company arrangement did not operate retrospectively to extinguish or alter this liability in a way that would render the payments recoverable. The principles of company law regarding deeds of arrangement and the recovery of payments were applied, with the Court finding that the payments were made in accordance with the company's obligations at the time.