Decon Australia Pty Ltd v TFM Epping Land Pty Ltd (No 2) [2021] FCA 32

Federal Court of Australia

Decon Australia Pty Ltd v TFM Epping Land Pty Ltd (No 2) [2021] FCA 32 File numbers: NSD 684 of 2020 NSD 817 of 2020

Judgment of: MCKERRACHER J

Date of judgment: 29 January 2021

Catchwords: CORPORATIONS – application to set aside Deeds of Company Arrangement (DOCAs) pursuant to s 445D of the Corporations Act 2001 (Cth) – where plaintiff is a creditor for a judgment debt under the Building and Construction Industry Security of Payment Act 1999 (NSW) against two single purpose companies in relation to a property development – where both companies entered into numerous financial agreements and facilities with related and unrelated entities after completion of the development – where both companies contest the plaintiff's judgment debt and seek to fund a cross-claim through the DOCAs – whether the companies' administrators' reports contained materially misleading information – whether omissions from the administrators' reports were material to the decision whether to support the DOCAs – whether the terms of the DOCAs are oppressive, unfairly prejudicial or unfairly discriminatory – whether the DOCAs are contrary to the interests of creditors as a whole – whether the DOCAs are detrimental to commercial morality – in circumstances where it was not demonstrated that further investigation into certain transactions by liquidators under a winding up would provide a better return to creditors than the DOCAs CORPORATIONS – application to set aside creditors' resolutions to approve DOCAs pursuant to s 75-41 of the Insolvency Practice Schedule – where but for the votes of related creditors approval of the DOCAs would have been decided by the casting vote of the administrators – where the administrators gave evidence that they would have cast their vote to approve the DOCAs in any event – in circumstances where the administrators' reports had recommended the DOCAs on the basis that they would achieve a better return to creditors than a winding up