Vero Insurance Ltd v Kassem

Vero Insurance Ltd appealed to the Court of Appeal of New South Wales against a decision concerning a deed of company administration (DOCA) and its rights as a creditor. The dispute involved Vero's entitlement to vote at a creditors' meeting and its application to terminate the DOCA.

The primary legal issues before the Court of Appeal were whether the primary judge erred in finding that Vero was a creditor for only a nominal sum, and consequently, whether the DOCA should have been terminated. Vero contended that it was a creditor for a substantial amount, which should have been given greater weight in the decision to terminate the DOCA. The court was also required to consider whether the primary judge had provided adequate reasons for refusing to terminate the DOCA.

The Court of Appeal considered Regulation 5.6.23 of the Corporations Regulations 2001 (Cth), which dictates how a creditor's vote is valued when a just estimate of their claim has not been made. The primary judge had found that the chairman of the creditors' meeting correctly determined that Vero was entitled to vote only for a nominal sum, as no just estimate of its claim had been made. The Court of Appeal agreed with the primary judge's reasoning that the chairman was not in error in rejecting Vero's proxy and that the DOCA was not oppressive or unfairly prejudicial. The court noted that Vero was not appealing the finding that a "just estimate" of its debt at the time of the meeting would have been a nominal sum, but rather that the court itself should have found Vero to be a creditor for a substantial amount.

Leave to appeal was granted, but the appeal was ultimately dismissed with costs. The Court of Appeal upheld the primary judge's decision that Vero was a creditor for a nominal sum and that the DOCA should not be terminated.