Hill v Fisher & Paykel Australia Pty Limited [2001] FCA 1880

Hill v Fisher & Paykel Australia Pty Limited [2001] FCA 1880

Clause 8 of the Part X Deed did not require payment sufficient to return 100 cents in the dollar to creditors before the debtors could be released. The 'final payment' referred to in Clause 8 was a payment pursuant to Clause 3 only, and Clause 3 confined the source of such payments to net profits from DHED's future trading. Where no such profits or payments would be made without default by the appellants, and where the deed contained express words releasing the debtors from all provable debts consistently with Recital A, the primary judge's construction could not be sustained. Because the sequestration orders depended on the contrary construction, the appeal was allowed and the...

Jurisdiction
Australia
Judgment Date
21 December 2001
Procedural Posture
Bankruptcy Appeal Concerning a Part X Deed of Arrangement Under the Bankruptcy Act 1966 (cth) / Appeal From Orders Terminating the Part X Deed and Making Sequestration Orders
Outcome
Appeal allowed; primary judge's orders set aside; application at first instance dismissed; first respondent ordered to pay the appellants' costs at first instance and on appeal, including reserved costs.
Legal Topics
['part X Deed of Arrangement' 'termination of Deed of Arrangement' 'sequestration Orders' 'release of Provable Debts' 'construction by Reference to Surrounding Circumstances']
['bankruptcy' 'insolvency' 'contract Interpretation'] ['part X Deed of Arrangement' 'termination of Deed of Arrangement' 'sequestration Orders' 'release of Provable Debts' 'construction by Reference to Surrounding Circumstances']

Case Brief

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Procedural Posture

Bankruptcy Appeal Concerning a Part X Deed of Arrangement Under the Bankruptcy Act 1966 (cth) / Appeal From Orders Terminating the Part X Deed and Making Sequestration Orders

Legal Issues

  1. 1 ['Whether Clause 8 of the Part X Deed released the appellants from all provable debts only upon payment sufficient to return 100 cents in the dollar to creditors.' 'Whether the primary judge erred in terminating the Part X Deed under s 236(1)(b) of the Bankruptcy Act 1966 (Cth).' "Whether the primary judge erred in making sequestration orders against the appellants' estates."]

Ratio Decidendi

Clause 8 of the Part X Deed did not require payment sufficient to return 100 cents in the dollar to creditors before the debtors could be released. The 'final payment' referred to in Clause 8 was a payment pursuant to Clause 3 only, and Clause 3 confined the source of such payments to net profits from DHED's future trading. Where no such profits or payments would be made without default by the appellants, and where the deed contained express words releasing the debtors from all provable debts consistently with Recital A, the primary judge's construction could not be sustained. Because the sequestration orders depended on the contrary construction, the appeal was allowed and the...

Court Disposition

Appeal allowed; primary judge's orders set aside; application at first instance dismissed; first respondent ordered to pay the appellants' costs at first instance and on appeal, including reserved costs.

Orders

  • ['The appeal be allowed.' 'The orders made by the primary judge on 27 June 2001 in proceeding N 7163 of 2001 be set aside.' 'In lieu thereof the application in proceeding N 7163 of 2001 be dismissed.' "The first respondent pay the appellants' costs of the proceedings at first instance and of the appeal, including...