In the matter of Metal Storm Ltd (subject to Deed of Company Arrangement) [2014] NSWSC 813

In the matter of Metal Storm Ltd (subject to Deed of Company Arrangement) [2014] NSWSC 813

ANZ Trustees was not obliged under the Security Trust Deed and Convertible Notes Trust Deed to comply with the directions given by ASOF to release the Charge or to vote in respect of the deed of company arrangement or variation proposals, as the relevant directions were, in the trustee's opinion, especially prejudicial to a class of note holders and thus required class approval. Furthermore, only ANZ Trustees, not individual note holders, is entitled to vote on claims in administration. ANZ Trustees' failure to appoint a controller in the decision period post-administration was not actionable as liability was excluded under the terms of the trust deed, and ASOF failed to show causation or...

Parties
First Plaintiff: Adam Shepard (in his capacity as deed administrator of Metal Storm Ltd); Second Plaintiff: Metal Storm Ltd (subject to a deed of company arrangement); First Defendant: ANZ Trustees Ltd (formerly ANZ Executors & Trustee Company Ltd); Second Defendant: The Australian Special Opportunity Fund, LP
Jurisdiction
Australia
Judgment Date
19 June 2014
Procedural Posture
Corporations/trusts/interlocutory Application / Principal Judgment on Relief and Directions, Prior to Determination of Quantification of Damages
Outcome
Orders to be brought in to give effect to the judgment appointing receivers; refusal of ASOF's claim for damages; order for repayment by Deed Administrator of $92,584.53; parties to be heard as to costs; all other relief refused or stood over.
Legal Topics
Trustee Duties and Liabilities, Deed of Company Arrangement, Appointment of Receiver, Corporate Administration, Voting Rights of Creditors
Corporations Law Equity Trusts Insolvency Trustee Duties and Liabilities Deed of Company Arrangement Appointment of Receiver Corporate Administration +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 6 Authorities cited 60 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Adam Shepard (in his capacity as deed administrator of Metal Storm Ltd)

First Plaintiff

Metal Storm Ltd (subject to a deed of company arrangement)

Second Plaintiff

ANZ Trustees Ltd (formerly ANZ Executors & Trustee Company Ltd)

First Defendant

The Australian Special Opportunity Fund, LP

Second Defendant

Procedural Posture

Corporations/trusts/interlocutory Application / Principal Judgment on Relief and Directions, Prior to Determination of Quantification of Damages

Legal Issues

  1. 1 Whether ANZ Trustees was obliged to comply with ASOF's written directions;
  2. 2 Whether the deed of company arrangement was an 'enforcement' entitling release of the Charge;
  3. 3 Entitlement to vote at creditors' meetings;

Ratio Decidendi

ANZ Trustees was not obliged under the Security Trust Deed and Convertible Notes Trust Deed to comply with the directions given by ASOF to release the Charge or to vote in respect of the deed of company arrangement or variation proposals, as the relevant directions were, in the trustee's opinion, especially prejudicial to a class of note holders and thus required class approval. Furthermore, only ANZ Trustees, not individual note holders, is entitled to vote on claims in administration. ANZ Trustees' failure to appoint a controller in the decision period post-administration was not actionable as liability was excluded under the terms of the trust deed, and ASOF failed to show causation or...

Court Disposition

Orders to be brought in to give effect to the judgment appointing receivers; refusal of ASOF's claim for damages; order for repayment by Deed Administrator of $92,584.53; parties to be heard as to costs; all other relief refused or stood over.

Orders

  • Parties to bring in agreed short minutes of order within 14 days; in default, draft orders and submissions as to differences.
  • Appointment of Messrs Darin and Malanos as receivers of Metal Storm Ltd under s 283HB of Corporations Act.