Diakos v Pacific Steel Constructions Pty Ltd, in the matter of Pacific Steel Constructions Pty Ltd [2022] FCA 645

Diakos v Pacific Steel Constructions Pty Ltd, in the matter of Pacific Steel Constructions Pty Ltd [2022] FCA 645

Leave was granted under s 444E as no prejudice would result and orders under s 447A would achieve the objectives of Pt 5.3A by allowing for variation of the DOCAs to enable timely refinancing and distribution, with creditors not disadvantaged from the original arrangements; Court has power under s 447A to vary the deed arrangements in these circumstances.

Parties
First Plaintiff: Con Diakos; Second Plaintiff: Nicholas Christou; Third Plaintiff: Paul Bonadio; Fourth Plaintiff: Nikola Sabo; Fifth Plaintiff: Fiona Diakos; Sixth Plaintiff: Vanessa Bonadio; Seventh Plaintiff: Wendy Christou; Eighth Plaintiff: Kathy Sabo; First Defendant: Pacific Steel Constructions Pty Ltd (ACN 100 940 145) (Subject to Deed of Company Arrangement); Second Defendant: Boom Lift Pty Ltd (ACN 163 723 439) (Subject to Deed of Company Arrangement); Third Defendant: Equipment Plus Pty Ltd (ACN 111 202 441) (Subject to Deed of Company Arrangement); Fourth Defendant: Maxim Steel Pty Ltd (ACN 618 755 534) (Subject to Deed of Company Arrangement); Fifth Defendant: PRB Fabrication Pty Ltd (ACN 149 985 357) (Subject to Deed of Company Arrangement); Sixth Defendant: PSC Property Management Pty Ltd (ACN 100 935 037) (Subject to Deed of Company Arrangement); Seventh Defendant: Sydney Management Pty Ltd (ACN 149 985 348) (Subject to Deed of Company Arrangement); Eighth Defendant: Andre Lakomy & Neil Robert Cussen in their capacities as joint & several deed administrators of the deeds of company arrangement made in relation to the first to seventh defendants
Jurisdiction
Australia
Judgment Date
31 May 2022
Procedural Posture
Corporations Application / Application for Leave and Variation of Deeds of Company Arrangement
Outcome
Leave granted to proceed; variation of the DOCAs as sought; orders made under s 447A; creditors and interested persons have liberty to apply.
Legal Topics
Deeds of Company Arrangement, Variation Under S 447 a, Leave to Proceed Under S 444 E, Creditors' Interests, Corporate Insolvency
Corporations Deeds of Company Arrangement Variation Under S 447 a Leave to Proceed Under S 444 E Creditors' Interests Corporate Insolvency

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Parties

Con Diakos

First Plaintiff

Nicholas Christou

Second Plaintiff

Paul Bonadio

Third Plaintiff

Nikola Sabo

Fourth Plaintiff

Fiona Diakos

Fifth Plaintiff

Vanessa Bonadio

Sixth Plaintiff

Wendy Christou

Seventh Plaintiff

Kathy Sabo

Eighth Plaintiff

Pacific Steel Constructions Pty Ltd (ACN 100 940 145) (Subject to Deed of Company Arrangement)

First Defendant

Boom Lift Pty Ltd (ACN 163 723 439) (Subject to Deed of Company Arrangement)

Second Defendant

Equipment Plus Pty Ltd (ACN 111 202 441) (Subject to Deed of Company Arrangement)

Third Defendant

Maxim Steel Pty Ltd (ACN 618 755 534) (Subject to Deed of Company Arrangement)

Fourth Defendant

PRB Fabrication Pty Ltd (ACN 149 985 357) (Subject to Deed of Company Arrangement)

Fifth Defendant

PSC Property Management Pty Ltd (ACN 100 935 037) (Subject to Deed of Company Arrangement)

Sixth Defendant

Sydney Management Pty Ltd (ACN 149 985 348) (Subject to Deed of Company Arrangement)

Seventh Defendant

Andre Lakomy & Neil Robert Cussen in their capacities as joint & several deed administrators of the deeds of company arrangement made in relation to the first to seventh defendants

Eighth Defendant

Procedural Posture

Corporations Application / Application for Leave and Variation of Deeds of Company Arrangement

Legal Issues

  1. 1 Whether leave should be granted to the plaintiffs under s 444E to proceed against the defendants
  2. 2 Whether the Court should vary deeds of company arrangement under s 447A of the Corporations Act 2001 (Cth)
  3. 3 Whether plaintiffs have standing as 'interested persons' under s 447A

Ratio Decidendi

Leave was granted under s 444E as no prejudice would result and orders under s 447A would achieve the objectives of Pt 5.3A by allowing for variation of the DOCAs to enable timely refinancing and distribution, with creditors not disadvantaged from the original arrangements; Court has power under s 447A to vary the deed arrangements in these circumstances.

Court Disposition

Leave granted to proceed; variation of the DOCAs as sought; orders made under s 447A; creditors and interested persons have liberty to apply.

Orders

  • Order granting leave, nunc pro tunc, to plaintiffs to proceed against first to seventh defendants under s 444E.
  • Variation of DOCAs and related trust deeds for seven companies as set out, with specified clause number changes.