Wily re Wire Lagoon - [2003] NSWSC 997

No judgment structure available for this case.

Reported Decision:
48 ACSR 86

Supreme Court

CITATION: Wily re Wire Lagoon [2003] NSWSC 997

HEARING DATE(S): 29/09/03 (and written submissions 13/10/03)

JUDGMENT DATE:
5 November 2003

JURISDICTION:
Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: No order

CATCHWORDS: CORPORATIONS - winding up - compromise or arrangement with certain creditors - attempt to implement scheme affecting all creditors by deed between liquidator and some creditors - deed purports to give one party creditor benefits comparatively more favourable than benefits of non-party creditors - deed containing provisions apparently unworkable and of uncertain operation - direction that liquidator justified in giving effect to deed not made

LEGISLATION CITED: Corporations Act 2001 (Cth), ss.446A, 477, 501, 506, 563C

CASES CITED: British Eagle International Air Lines Ltd v Compagnie Nationale Air France [1975] 1 WLR 758
Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460
Horne v Chester & Fien Property Pty Ltd (1986) 11 ACLR 485
Isles v Daily Mail Newspaper Ltd (1912) 14 CLR 193
Mercantile Investment and General Trust Company v International Company of Mexico [1893] 1 Ch 484n
Re Slade Constructions Pty Ltd [1970] SASR 561
United States Trust Company of New York v Australia and New Zealand Banking Group Ltd (1995) 37 NSWLR 131

PARTIES :
Andrew Hugh Jenner Wily as Liquidator of Wire Lagoon Pty Ltd (in liq) - Applicant

FILE NUMBER(S): SC 4830/03

COUNSEL: Mr J.K. Chippindall - Plaintiff

SOLICITORS: Bowles Lawyers Pty Ltd - Plaintiff

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

BARRETT J

WEDNESDAY, 5 NOVEMBER 2003

4830/03 – ANDREW HUGH JENNER WILY RE WIRE LAGOON PTY LTD (IN LIQUIDATION)

JUDGMENT

The application

1 The plaintiff is the liquidator of Wire Lagoon Pty Limited (“the Company”) under the form of creditors’ voluntary winding up that arises by virtue of s.446A of the Corporations Act 2001 (Cth) as a sequel to Part 5.3A administration. In that capacity, he seeks, by originating process filed on 12 September 2003, a direction that he is justified in making and giving effect to a deed between the Company, the plaintiff as its liquidator, three companies designed by the deed “Admitted Merchant Creditors”, three members of the Mackey family of Narrabri and H. Mackey Pty Ltd.

2 The liquidator says in his affidavit that the Company’s creditors fall mainly into two classes. One, confined to the Admitted Merchant Creditors, consists of named companies which provided various services to the Company including cotton ginning, the Company being a cotton grower in the Wee Waa district. The other main class of creditors is “Admitted Local Creditors”, being “ordinary unsecured creditors” which are “small businesses located primarily in the same regional area as the Company who had provided goods and services to the Company”. The purpose of the proposed deed, briefly stated, is to cause the claims of the Admitted Merchant Creditors and those of the Admitted Local Creditors in the winding up to be treated differently, so far as distribution of net assets in the hands of the plaintiff as liquidator is concerned. Those net assets are insufficient to allow all creditors to be paid in full. Admitted Local Creditors are to participate on a more favourable footing than Admitted Merchant Creditors and one member of the Mackey family is to participate to the extent of 100 cents in the dollar for her admitted debt.

3 The liquidator’s affidavit makes it clear that the deed has already been executed by all parties. It contains, however, a clause saying that none of its provisions is to be binding until five things have happened. One of these is the making by a court of competent jurisdiction of an order to the effect that the liquidator would be justified in proceeding in the way stipulated in the deed. Hence the liquidator’s present application.

The deed

4 Summarised in greater detail, the provisions of the deed are as follows:

1. A specific amount is referred to as to be paid to one of the Admitted Merchant Creditors which holds security by way of crop lien. That sum, it is said, will fully satisfy that creditor’s “priority claim as secured creditor under the 2002 crop lien”.

2. There are then provisions under which the liquidator will establish what is called “Fund A”. This is to consist of $275,000 from the property of the Company held by the liquidator, together with $50,000 to be paid to the liquidator by Mr Bruce Mackey. Fund A is to be applied in paying a dividend to creditors named in a schedule to the deed. These are the local trade creditors to whom I have referred. They are designated “Admitted Local Creditors”. The aggregate of the claims ascribed to them in the schedule is $507,449.06. The deed says that if any such creditor, having received the entitlement under the deed by cheque, does not present the cheque within three months, his or her entitlement upon Fund A (and under the deed) is deemed “forfeited” and the relevant amount will accrue instead to “Fund C” to be mentioned presently. Fund A is the only source from which creditors of this class will receive payments on account of their debts.

3. There is also provision for the establishment of “Fund B” by setting aside $15,000 from the property of the Company held by the liquidator. It is then stated that Ms Claire Mackey has been admitted by the liquidator as an unsecured creditor in the sum of $15,000. She is declared to be entitled to a “dividend” from “Fund B” subject to the same exclusionary provision for diversion of the relevant amount into “Fund C” in the event of her failing to present the relevant cheque. It is provided that Ms Mackey is entitled to payment from Fund B only. The effect of the deed is that she will receive 100 cents in the dollar for her admitted claim.

4. “Fund C” is to consist of the balance of the property in the liquidator’s hands after the setting aside of Fund A and Fund C and after payment of or allowance for the liquidator’s fees and expenses. It is then stated that the Admitted Merchant Creditors have agreed that Fund C is to be divided among them in specified proportions and that they shall be entitled to “dividends” from Fund C accordingly, subject to forfeiture of entitlement if the relevant cheque is not presented within three months. (The destination of the funds represented by any such unpresented cheque does not seem to be specified.)

5. The liquidator’s remuneration, fees and costs are to be drawn from Fund B and Fund C, although how these imposts are to be borne as between the two is not stated.

“Acceptance by Admitted Creditors of their entitlements under the Deed will constitute the full satisfaction and complete discharge of all claims (if any) which they have or claim to have against the Company, its directors and the Trust and further each creditor will, if called on by the Liquidator or the Company so to do, execute and deliver such forms of release of any claim against the Company as the Liquidator or the Company reasonably requires (provided that [the creditor with the crop lien] shall not be obliged to provide documentation evincing the release of the 2002 crop lien or obliged to provide any documentation evincing any release of the bill of sale).”

(a) a provision purporting to confer on a party a right, in respect of a decision of the liquidator, to “commence a proceeding in a court nominated by the liquidator appealing against the liquidator’s decision”;

(c) a provision purporting to empower the liquidator to convene a meeting of “the Admitted Creditors of the Company” (an expression apparently not defined) “in accordance with the Corporations Act 2001”;

(d) provisions purporting to release various claims;

(e) a provision stating that “the Arrangement” may be varied by a resolution passed at a meeting of “Admitted Creditors”.

5 The aim of the deed, clearly enough, is to create a special regime in the winding up under which creditors will be dealt with according to the classes associated with Fund A, Fund B and Fund C, with each such class participating only in so much of the property available to the liquidator as is included in the particular fund with which the class is associated. This aim is pursued in circumstances where, according to a recital, all claims of employees afforded priority under s.556 of the Corporations Act have been paid. Although the deed does not expressly say so, it is presumably intended that the group or class of creditors associated with a particular fund will be entitled to participate in that class rateably according to the amounts of their debts as recognised by the liquidator.

6 As I have said, the parties to the proposed deed include the three Admitted Merchant Creditors and Ms Claire Mackey. A recital referring to them says:

“The Admitted Merchant Creditors and Claire agree with and acknowledge that the group of creditors referred to in this Deed as Admitted Local Creditors will receive a cents in the dollar of debt recovery from Fund A significantly greater than the cents in the dollar recovery that Claire and the Admitted Merchant Creditors and will receive from funds B and C respectively.”

7 Also mentioned in the recitals is Mr Bruce Mackey. There is reference to the contribution of $50,000 to be made by him to Fund A, as well as to his having paid certain of the company’s debts. The relevant recital reads:

“All the parties to this Deed acknowledge that Bruce is to contribute $50,000 to Fund A. In addition all parties to this Deed acknowledge that Bruce reduced the unsecured claims against the Company by paying out the Company’s debts of $700,000 to the Primary Industry Bank of Australia (PIBA) and $130,000 to the NSW Rural Assistance Authority. Whilst Bruce agrees he will not seek to be admitted as a creditor in relation to these amounts, he does seek an undertaking from all parties to this deed that they release H Mackey Pty Ltd, Mackey Equipment Pty Limited and The Trust from all further claims and recovery actions in respect of the Company, subject to Bruce making the $50,000 payment in accordance with clause 4.3.”

8 I mention finally a recital cast in the form of an acknowledgment by the parties to the deed:

“All parties to this deed acknowledge that this Deed varies the normal priority of distribution to unsecured creditors under the Corporations Act 2001 and that to the best of their knowledge and belief no creditor who is not a party to this deed is disadvantaged in any way, and that this deed offers to the Admitted Local Creditors a significantly improved distribution income.”

The liquidator’s powers

9 The first question for consideration in relation to the liquidator’s present application concerns the power of the liquidator both to enter into the deed and to do the things the deed requires or enables him to do.

10 Section 506 is headed “Powers and duties of liquidator”. It appears in Division 4 of Part 5.5. That division is headed “Voluntary winding up generally” and applies in this case. Section 506(1) provides:

“The liquidator must pay the debts of the company and adjust the rights of the contributories among themselves.”

11 In light of s.506(1)(b), it is appropriate to note the powers conferred by the Act on a liquidator in a winding up in insolvency or by the court. These are, for the most part, stated in s.477(1) and (2):

Bankruptcy Act 1966

12 There are, of course, other provisions concerning particular powers of liquidators. Those I have quoted are, however, the provisions relevant to the present case so far as the power of the liquidator to enter into the deed in question is concerned.

13 Mr Chippindall of counsel, who appeared for the liquidator, submitted that the liquidator’s power to enter into and give effect to the deed derives from s.477(1)(c), via s.506(1)(b). It is said that the liquidator, by means of the deed, will effect a compromise with various classes of creditors so as to benefit one class at the expense of another class or other classes.

14 The relevant power is a power to “make any compromise or arrangement with creditors or persons claiming to be creditors”. It is thus clear, first, that it must be possible to identify the persons “with” whom the liquidator proposes to treat, second, that the result of the liquidator’s treating with those persons amounts to a “compromise or arrangement” and, third, that the persons concerned are either creditors or persons claiming to be creditors of the company. This third matter need not be further pursued since it is clear that all conceivably relevant persons are creditors.

15 Turning then to the first matter, it is seen that the persons “with” whom the liquidator will deal are, with some possible exceptions (being Mr Bruce Mackey, Mr Hugh Mackey and H Mackey Pty Ltd), creditors who have proved in the winding up, including the Admitted Merchant Creditors but not including the Admitted Local Credtiors. Apart from Ms Claire Mackey (who is to receive 100 cents in the dollar upon the admitted amount of her debt, being $15,000 as referred to in clause 5.2), each such creditor party will receive under the deed a smaller amount in respect of the creditor’s debt as proved and admitted than would have been received had the deed not been made and implemented.

16 That leads to the second question, namely, whether what is effectively a covenant to accept the smaller sum in satisfaction of each such creditor’s entitlement is properly regarded as entailing “a compromise or arrangement with” the creditor concerned. Having regard to the meaning of “compromise” recognised by Lindley LJ in Mercantile Investment and General Trust Company v International Company of Mexico [1893] 1 Ch 484n, I doubt that there is a compromise. The concept is one involving the settlement of some dispute and there is no dispute here. It does seem, however, that the agreement of the relevant creditors to accept less than would otherwise come to them on the basis of the equality mandated by s.501 of the Corporations Act amounts to an “arrangement”: see, in particular, the discussion of the meaning of “arrangement” by Griffith CJ and Isaacs J in Isles v Daily Mail Newspaper Ltd (1912) 14 CLR 193.

17 I am satisfied, therefore, that the making and implementing of the deed by the liquidator will, in an overall sense, represent an exercise of the power arising from s.477(1)(c) vis-à-vis the Admitted Merchant Creditors who are parties to the deed.

18 But the deed does not finish there. The next matter for consideration is identification of the power that will enable the liquidator to implement and give effect to clause 5 under which $15,000 will be available to meet the claim of Ms Claire Mackey (another party to the deed) whose position as a creditor must be taken to be as stated in clause 5.2:

“Claire as an unsecured creditor of the Company has submitted a claim to the Liquidator and the Liquidator has finally admitted Claire as an unsecured creditor of the Company in the amount of $15,000.”

19 It is not clear to me that the concept of “arrangement” in s.477(1)(c), broad as it is, enables a liquidator to single out one creditor for payment of 100 cents in the dollar upon that creditor’s admitted debt while at the same time paying less than 100 cents in the dollar in respect of all other admitted debts. The “arrangement” concept and the power conferred by s.477(1)(c) cannot allow the principle of equality under s.501 to be departed from to the advantage, in a comparative sense, of one creditor in respect of that creditor’s admitted debt where the consequence is to visit a corresponding disadvantage, in the same comparative sense, upon other creditors in respect of their admitted debts, at least in the absence of some arrangement “with” those other creditors whereby they assented to that preferred treatment. Such a curtailment in respect of those other creditors could not, it seems to me, be imposed upon them simply by an “arrangement” between the liquidator and the preferred creditor and in the absence of some appropriate assent of the affected creditors. There would have to be, in addition, an arrangement “with” the disadvantaged creditors. In the present case, there is such an arrangement with the Admitted Merchant Creditors who are parties to the deed. That arrangement is embodied in the deed itself. But there is no such arrangement “with” the Admitted Local Creditors. They are not parties to the deed.

Section 563C

20 It is submitted on behalf of the liquidator that s.563C of the Corporations Act assists in reaching a conclusion that the proposed deed may properly be made and implemented by the liquidator. That section is as follows:

“(1) Nothing in this Division renders a debt subordination by a creditor of a company unlawful or unenforceable, except so far as the debt subordination would disadvantage any creditor of the company who was not a party to, or otherwise concerned in, the debt subordination.

will not be repaid until other specified debts that the company owes are repaid to a specified extent.”

21 Section 563C does not, of course, confer power upon a liquidator. It merely preserves the effect of provisions within its terms which might otherwise be considered inconsistent with Division 4 of Part 5.6, including the provisions in s.566 as to priority of claims and those in s.559 as to equal ranking among debts within each class of priority.

22 For present purposes, I think it is sufficient to say two things about s.563C. First, the proposed deed does not appear to me to involve “debt subordination” as defined since the deed’s effect is not that a debt or part of a debt will not be paid until other debts are paid to a specified extent. Second, the section applies, as I have said, for the purposes of Division 4 of Part 5.6, whereas the statutory provision the operation of which the deed seeks, in effect, to modify is s.501 which is in Division 4 of Part 5.6.

23 I therefore put s.563C to one side as providing no relevant guidance in the present case.

The subordination cases

24 Mr Chippindall also referred to cases in which courts have considered the efficacy of contracts entered into by companies not in liquidation to afford any ultimate claim of the contractual counterparty in a winding up a status or priority causing it to rank after other claims. The Australian cases include Horne v Chester & Fien Property Developments Pty Ltd (1986) 11 ACLR 485 and United States Trust Company of New York v Australia and New Zealand Banking Group Ltd (1995) 37 NSWLR 131.

25 The basic message in those cases, which dealt with principles discussed by the House of Lords in British Eagle International Air Lines Ltd v Compagnie Nationale Air France [1975] 1 WLR 758, is, I think summed up in the observation of Sheller JA in United States Trust Company:

“There is no public policy or good sense which prohibits one creditor deferring payment of a debt in favour of payment of a debt of another creditor if the rights or entitlements of other creditors for payment remain unaffected.”

26 The relevance of this in the present context is, I think, merely to confirm that there is no fixed legislative policy precluding in all circumstances contractual departures from the rule of equality that generally prevails among non-preferred creditors in a winding up.

Extinguishment of creditors’ entitlements where cheques not presented

27 Several provisions of the proposed deed proceed on the footing that a sum otherwise payable to a particular person as contemplated by the deed will cease to be payable (and the person’s entitlement to be paid will apparently be extinguished) if the cheque is not banked within three months after “the date of payment”.

28 A provision to this effect not only applies in relation to payments to persons who are parties to and therefore bound by the deed but is also expressed to apply in relation to payments to non-parties: see clause 4.5. There is thus an attempt (it can be no more) to modify the entitlements of non-parties in ways that are potentially disadvantageous to them.

29 This problem is, I think, compounded by the fact that clause 4.5 is arguably enforceable as among the parties to the deed even if it cannot be effective to modify rights of the non-parties to whom it refers. Thus, a party might seek redress against the liquidator if he failed to give effect to clause 4.5 in relation to a non-party within the contemplation of that clause, even though, from the non-party’s perspective, the clause was ineffective to extinguish his or her statutory right to be paid.

Purported releases by “Admitted Creditors”

30 The Admitted Creditors include the Admitted Local Creditors, none of whom are parties to the deed. Yet clause 9.1, quoted above, says that acceptance by those non-parties of their “entitlements” under the deed “will constitute the full satisfaction and complete discharge of all claims (if any) which they have or claim to have against the Company, its directors and the Trust”, being the Mackey Farming Trust of which H Mackey Pty Ltd, a party to the deed, is the trustee.

31 This provision cannot, for obvious reasons, have against those non-parties the effect that it is expressed to have. Release of a claim an Admitted Local Creditor may have against, say, a director of the Company can arise only from conduct engaged in by that creditor vis a vis the director or by operation of law. The same comment applies to the similar provision in clause 18.

32 Another matter to be referred to here is the recital set out above referring to Mr Bruce Mackey. That recital says, among other things, that Mr Mackey has paid substantial debts of the Company and that he “agrees he will not seek to be admitted as a creditor in relation to those amounts”. The way in which this agreement by Mr Mackey is to become binding on him, if it is to become binding at all, is not stated. The deed itself does not seem to be the intended vehicle, given that the reference to Mr Mackey’s agreement appears only in a recital and does not take the form of an operative covenant given to any of the deed’s parties. The question whether Mr Mackey remains legally entitled to assert a claim against the Company in respect of moneys outlaid by him in paying debts of the Company (which, in turn, encompasses the not altogether straightforward question of the effect of the voluntary payment of one person’s debt by another) is thus left at large and unresolved, so far as the operative contractual content of the deed is concerned.

Alteration of entitlements of non-party creditors

33 Clause 10.1(a) of the deed says that the liquidator has admitted the claims of Admitted Local Creditors as set out in Schedule A which contains 44 names and an amount in respect of each, the total of the amounts being, as I have said, $507,449.46. Clause 12 then purports to empower the liquidator to amend that list in certain circumstances without reference of any kind to the creditor concerned thus, it seems, changing the basis on which the relevant Admitted Local Creditor (a non-party to the deed) will be dealt with in the winding up.

34 Again, such a contractual provision cannot be effective to modify or supplement the statutory rights of a non-party creditor.

Attempt to confer jurisdiction on a court

35 Clause 14 is a curious provision. I set it out in full:

“A creditor who receives a notice from the Liquidator under clause 10 may, within 21 days of the date of such notice or such further time as the Court allows, commence a proceeding in a Court nominated by the Liquidator appealing against the Liquidator’s decision. Unless a creditor commences such a proceeding within 21 days, or such further time as the Court allows, the Liquidator’s decision shall be final. If the creditors appeal is upheld, the creditor will be a participating creditor for the purposes of the Deed for the amount of its Admitted Claim.”

36 The reality is, of course, that a provision of this kind cannot confer jurisdiction on any court: compare, in the case of schemes of arrangement, the observations of Mitchell J in Re Slade Constructions Pty Ltd [1970] SASR 561. A party to the deed might, of course, rely on its provisions as a basis for seeking relief of a kind that a court is capable of granting in the ordinary exercise of its ordinary jurisdiction. That jurisdiction would not, however, extend to the “appeal” procedure the deed envisages. And the circumstances in which and extent to which an Admitted Local Creditor, being a non-party to the deed, might resort to a court by reference to provisions of the deed are very limited: see for example Coulls v Bagot’s Executor & Trustee Co Ltd (1967) 119 CLR 460.

37 Again, therefore, the deed thus purports to do something that, upon examination, is seen to be ineffective. The dispute resolution machinery it appears to create for the benefit of non-parties is simply illusory.

Paramountcy of “the Law”

38 Clause 26 of the deed is as follows:

“If there is any inconsistency between the terms of this Deed and the Law, then the Law shall, only to the extent of the inconsistency, prevail and the Arrangement shall be interpreted accordingly.”

39 I can find in the deed no definition of either “Arrangement” or “Law”. It seems reasonably clear, however, that “Arrangement” is used as a synonym for “this Deed” so as to refer to the totality of the deed’s operative provisions. If one were to hazard a guess as to the intended meaning of “the Law”, the conclusion might be that it refers either to all principles of common law and equity plus all statutory provisions (in other words, legal prescription in its entirety) or to the Corporations Act 2001 (Cth) on the footing that there may still be a tendency in commercial circles to use “Corporations Act” and “Corporations Law” interchangeably, with “the Law” (with a capital “L”) being recognised, in those circles, as a shorthand reference to the Corporations Law.

40 According to each of these possible meanings, “the Law” includes s.501 of the Corporations Act 2001 (Cth). That section prescribes a principle of equal participation and entitlement on the part of non-preferred creditors in a voluntary winding up of this kind. The whole object of the deed is to displace that regime of equality. Yet the effect of clause 26, by causing the terms of the deed to yield to “the Law” in case of inconsistency, seems to be that the principle of equality prevails despite the elaborate and detailed provisions adopted with a view to effecting a contractual substitution.

41 There is here an aspect which, taken at face value, renders virtually the whole of the scheme envisaged by the deed legally unworkable.

Summation

42 The parties to the deed, which include the Company, the liquidator and some (but by no means all) of the creditors, are attempting, by means of the deed, to alter and add to the statutory framework applicable to this winding up. The attempt involves the active assent of some creditors but non-participation by most. It proceeds on the assumed footing that the non-participating creditors are advantaged by the substituted scheme and thus need not be consulted. In a broad sense, that is so but, upon closer examination, there are aspects which operate (or purport to operate) in a way which may be disadvantageous to those non-participating creditors. I refer in particular to the proposal that Ms Claire Mackey receive 100 cents in the dollar in respect of her admitted claim of $15,000 while the Admitted Local Creditors, with admitted claims of $507,449.06 will share in Fund “A” consisting of $325,000. I refer also to the various provisions that purport to do in relation to non-party creditors things that a deed having no more than inter partes operation simply cannot do. Those and other provisions create what can only be described as a misleading and illusory impression of the deed’s efficacy.

43 In making these observations, I do not mean to deprecate the efforts of the liquidator and other persons who have played a key role in formulating and seeking to implement a scheme considered by them to be advantageous to creditors generally. It is clear that the proposal has been developed with the best of motives and intentions and after considerable thought, with members of the family apparently associated with the failed concern showing a willingness to accept a measure of financial responsibility going beyond legal liability. From the perspective of external creditors, that is an attitude meriting approbation. The problem here is with implementation. The proponents are seeking to achieve, by the particular contractual means, ends which cannot be wholly achieved in that way; and in so doing they have adopted a number of provisions that are confusing, unworkable, apparently at odds with the underlying intention and likely to be productive of serious misapprehensions on the part of anyone who takes them at face value.

44 I merely mention in conclusion that the Corporations Act makes provision for various means bringing into effect schemes of this general kind. Reference may be made to Division 10 of Part 5.3A (coupled with s.436B), to Part 5.1 and to s.510. In each of those areas, the statute itself can, by resort to specified procedures, be made the source of a sustaining and binding force that overcomes the limitations inherent in contract-based schemes not founded on the active assent and participation of every creditor.

Decision

45 It is not appropriate that the court make any order upon the liquidator’s originating process filed on 12 September 2003.

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Last Modified: 11/11/2003

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Citations

Wily re Wire Lagoon [2003] NSWSC 997

Cases Citing This Decision

0

Cases Cited

3

Statutory Material Cited

1

Isles v Daily Mail Newspaper Ltd [1912] HCA 18

Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54

CITATION:	Wily re Wire Lagoon [2003] NSWSC 997
HEARING DATE(S):	29/09/03 (and written submissions 13/10/03)
JUDGMENT DATE:	5 November 2003
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	No order
CATCHWORDS:	CORPORATIONS - winding up - compromise or arrangement with certain creditors - attempt to implement scheme affecting all creditors by deed between liquidator and some creditors - deed purports to give one party creditor benefits comparatively more favourable than benefits of non-party creditors - deed containing provisions apparently unworkable and of uncertain operation - direction that liquidator justified in giving effect to deed not made
LEGISLATION CITED:	Corporations Act 2001 (Cth), ss.446A, 477, 501, 506, 563C
CASES CITED:	British Eagle International Air Lines Ltd v Compagnie Nationale Air France [1975] 1 WLR 758 Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460 Horne v Chester & Fien Property Pty Ltd (1986) 11 ACLR 485 Isles v Daily Mail Newspaper Ltd (1912) 14 CLR 193 Mercantile Investment and General Trust Company v International Company of Mexico [1893] 1 Ch 484n Re Slade Constructions Pty Ltd [1970] SASR 561 United States Trust Company of New York v Australia and New Zealand Banking Group Ltd (1995) 37 NSWLR 131
PARTIES :	Andrew Hugh Jenner Wily as Liquidator of Wire Lagoon Pty Ltd (in liq) - Applicant
FILE NUMBER(S):	SC 4830/03
COUNSEL:	Mr J.K. Chippindall - Plaintiff
SOLICITORS:	Bowles Lawyers Pty Ltd - Plaintiff