ACN 087 803 174 Pty Limited (Subject to Deed of Company Arrangement) formerly known as Madison Constructions (NSW) Pty Limited v Anthony and Robin Ferguson [2004] NSWSC 1124

New South Wales Supreme Court

CITATION : ACN 087 803 174 Pty Limited (Subject to Deed of Company Arrangement) formerly known as Madison Constructions (NSW) Pty Limited v Anthony and Robin Ferguson [2004] NSWSC 1124 HEARING DATE(S) : 8/11/04 JUDGMENT DATE : 29 November 2004

JURISDICTION: Equity Division Technology and Construction List JUDGMENT OF : Brownie AJ DECISION : Motion to dismiss summons dismissed

CATCHWORDS : Construction of deed - No question of principle. LEGISLATION CITED : Conveyancing Act 1919 (NSW) Corporations Act 2001 (Cwth) PARTIES : ACN 087 803 174 Pty Limited (Subject to Deed of Company Arrangement) formerly known as Madison Constructions (NSW) Pty Limited (Plaintiff) Anthony and Robin Ferguson (Defendants) FILE NUMBER(S) : SC 55031/03 COUNSEL : Ms E Olsson SC, Mr M Walsh (Plaintiff) Mr R McKeand SC (Defendants) SOLICITORS : Meyer Clapham (Plaintiff) Holman Webb (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST

Brownie AJ

Monday 29 November 2004

55031/03 ACN 087 803 174 Pty Limited (subject to Deed of Company Arrangement) formerly known as Madison Constructions (NSW) Pty Limited v Anthony and Robin Ferguson JUDGMENT 1 The parties have argued only paragraphs 1 and 2 of the further amended notice of motion dated 8 November 2004. By paragraph 1 of the motion the defendants seek a declaration that the plaintiff's causes of action, mentioned in the summons, were assigned before the summons was filed, within the meaning of section 12 of the Conveyancing Act 1919, and by paragraph 2 they seek an order the plaintiff's claim be dismissed under Part 13 Rule 5, by reason of this assignment. It is agreed that the balance of the notice of motion is to be adjourned for later consideration. 2 To summarise a lengthy document very shortly, the summons asserts that the plaintiff and the defendants entered into a contract, pursuant to which the plaintiff was to construct a dwelling for the defendants. The plaintiff says that the defendants breached the terms of the contract, by failing to make certain payments, leading to the plaintiff rescinding the contract. On the plaintiff's case, one of the results of the defendants' breaches was that the plaintiff became insolvent, and an administrator was appointed pursuant to the provisions of section 436A of the Corporations Act 2001. 3 A Deed of Company Arrangement dated 11 March 2003 was executed, and the present questions depend, first, on the terms of that deed. The parties to the deed were the administrator, the company, and a director of the company. 4 After some formal matters, the deed provided in clause 3 for creditors of the plaintiff to lodge claims with the administrator. Clause 4 provided for the establishment of a litigation fund, that is a fund to be used for the purposes of the "Litigation", as defined, meaning the present litigation against the defendants. Contributions to the fund were only to be made by "Litigation Creditors" as defined. 5 Clause 5.1 of the deed provided: