Shafston Avenue Construction Pty Ltd v McCann [2020] FCAFC 85

Shafston Avenue Construction Pty Ltd v McCann [2020] FCAFC 85

The appeal was dismissed because the appellants failed to demonstrate that there was a realistic prospect of achieving a better return for creditors in liquidation as compared to under the deed of company arrangement. The Court accepted the administrators' assessment of risks and likely recovery, found no material error in the discretionary exercise or factual findings of the primary judge, and refused to allow the appellants to raise new legal arguments on appeal about recognition of Australian judgments in China which had not been ventilated at trial.

Jurisdiction
Australia
Judgment Date
22 May 2020
Procedural Posture
Corporations Appeal / Full Federal Court Appeal From Single Judge Decision
Outcome
Appeal dismissed
Legal Topics
['deed of Company Arrangement' 'termination of Deed of Company Arrangement' 'enforcement of Deeds' 'insolvency Practice' "creditors' Interests" 'statutory Interpretation' 'practice and Procedure']
['corporations' 'insolvency'] ['deed of Company Arrangement' 'termination of Deed of Company Arrangement' 'enforcement of Deeds' 'insolvency Practice' "creditors' Interests" 'statutory Interpretation' 'practice and Procedure']

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Procedural Posture

Corporations Appeal / Full Federal Court Appeal From Single Judge Decision

Legal Issues

  1. 1 ['Whether the primary judge erred in refusing to terminate the deed of company arrangement under s 445D(1) of the Corporations Act 2001 (Cth)' 'Whether there was a likely prospect of creditors receiving a better outcome in liquidation than under the deed of company arrangement' 'Whether primary judge made factual or discretionary errors regarding estimation of returns and majority of creditor support' 'Whether new points on appeal based on Australian cases about recognition of Australian judgments in China could be raised']

Ratio Decidendi

The appeal was dismissed because the appellants failed to demonstrate that there was a realistic prospect of achieving a better return for creditors in liquidation as compared to under the deed of company arrangement. The Court accepted the administrators' assessment of risks and likely recovery, found no material error in the discretionary exercise or factual findings of the primary judge, and refused to allow the appellants to raise new legal arguments on appeal about recognition of Australian judgments in China which had not been ventilated at trial.

Court Disposition

Appeal dismissed

Orders

  • ['The appellants be refused leave to rely on [25]-[29] of their outline of submissions dated 16 January 2020 (raising new points on appeal).' "The fourth respondent's interlocutory application dated 23 January 2020 be dismissed." 'The appeal be dismissed.' "The appellants pay the respondents' costs of the appeal, as...