Deputy Commissioner of Taxation v Wellnora Pty Limited [2007] FCA 1234

FEDERAL COURT OF AUSTRALIA

Deputy Commissioner of Taxation v Wellnora Pty Limited [2007] FCA 1234

CORPORATIONS – application by Deputy Commissioner of Taxation (DCT) to set aside Deed of Company Arrangement (DOCA) – resolution passed at creditors' meeting in favour of execution of DOCA on casting vote of company administrator presiding at meeting – extent of obligations on that person in deciding how to cast vote – company was one of many in a group of companies, a large number of which had either gone into liquidation or executed a DOCA owing tax – DCT was the only unsecured creditor, and voted against execution of DOCA – all creditors who voted in favour of DOCA were associated with company – whether person presiding at meeting of creditors must take into account the public interest and commercial morality when deciding how to exercise casting vote – discretionary considerations – whether DOCA had already terminated by reason of DOCA fund having been exhausted – whether order for "termination" of DOCA remained an available remedy. Held: (1) DOCA had terminated under s 445C(c) of Corporations Act 2001 (Cth) and specification in DOCA; (2) company administrator was limited to considering the interests of creditors as a whole in having the debts owed to them paid; (3) Court has a wider discretion under ss 600B and 447A, enabling Court to take into account public interest and commercial morality; (4) parties allowed opportunity to make further submissions with respect to, inter alia, any purpose to be served by a winding up in absence of an undertaking by DCT to fund a liquidator's investigations, public examination and recovery proceedings.

Corporations Act 2001 (Cth) ss 445C, 445D, 445G, 445H, 447A, 600B Bidald Consulting v Miles Special Builders (2005) 226 ALR 510 referred to Blue Ring Pty Ltd v Landshore Pty Ltd (Subject to a Deed of Company Arrangement) [2006] WASC 245 cited Cresvale Far East Ltd (in liq) v Cresvale Securities Ltd (2001) 37 ACSR 394 referred to Deputy Commissioner of Taxation (Cth) v PDDAM Pty Ltd (1996) 19 ACSR 498 referred to Deputy Commissioner of Taxation v Portinex Pty Ltd (2000) 34 ACSR 391 referred to Hagenvale Pty Ltd v Depela Pty Ltd (1995) 17 ACSR 139 referred to Lewis v Doran (2004) 208 ALR 385 cited Re Bartlett Researched Securities Pty Ltd (Administrator Appointed) (1994) 12 ACSR 707 referred to R v Bradford Metropolitan City Council; ex parte Corris [1989] 3 All ER 156 cited Re Coaleen Pty Ltd (Administrator Appointed) (1999) 30 ACSR 200 referred to Re Martco Engineering Pty Ltd (Administrator Appointed); Deputy Commisioner of Taxation v Martco Engineering Pty Ltd (1999) 32 ACSR 487 referred to Re Rugs Galore Australia Pty Ltd; Linen House Pty Ltd v Rugs Galore Australia Pty Ltd [1999] VSC 126 referred to Young v Sherman (2002) 170 FLR 86 referred to