In the matter of Blue Sennar Air Pty Ltd (in liq); In the matter of Eye Plantain Pty Ltd (in liq) [2016] NSWSC 772

In the matter of Blue Sennar Air Pty Ltd (in liq); In the matter of Eye Plantain Pty Ltd (in liq) [2016] NSWSC 772

The Conference Facilities Agreement was not property of Blue Sennar amenable to disclaimer because Blue Sennar was not a party to it, had not acceded to it, and had no contractual rights under it. As to Eye Plantain, the Conference Facilities Agreement consistently produced net income after deductions and the pleaded matters did not make it an unprofitable contract; the Conference Facilities Licence standing alone imposed no relevant onerous obligation. Because the CFA and CFL were not unprofitable contracts, leave under s 568(1A) was required and had not been obtained, so all three purported disclaimers were nullities and of no effect.

Jurisdiction
Australia
Judgment Date
15 June 2016
Procedural Posture
Corporations External Administration Liquidation Application Concerning Disclaimer of Contracts / Principal Judgment on Summons for Declarations That Disclaimers Were Null and Void, Alternatively to Set Aside Disclaimers Under S 568 B
Outcome
Declarations made that the CFA was not property of Blue Sennar, leave was required for Eye Plantain's disclaimers, and all purported disclaimers were nullities and had no effect; defendants ordered to pay the plaintiff's costs.
Legal Topics
['liquidation' 'disclaimer of Onerous Property' 'unprofitable Contracts' 'disclaimer Without Leave' 'corporations Act 2001 (cth) S 568' 'corporations Act 2001 (cth) S 568 B']
['corporations Law' 'insolvency' 'external Administration'] ['liquidation' 'disclaimer of Onerous Property' 'unprofitable Contracts' 'disclaimer Without Leave' 'corporations Act 2001 (cth) S 568' 'corporations Act 2001 (cth) S 568 B']

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Procedural Posture

Corporations External Administration Liquidation Application Concerning Disclaimer of Contracts / Principal Judgment on Summons for Declarations That Disclaimers Were Null and Void, Alternatively to Set Aside Disclaimers Under S 568 B

Legal Issues

  1. 1 ['Whether the Conference Facilities Agreement conferred contractual rights and imposed liabilities on Blue Sennar Air Pty Ltd so as to be property amenable to disclaimer under s 568.' 'Whether the Conference Facilities Agreement and Conference Facilities Licence were unprofitable contracts for the purposes of s 568(1A), allowing disclaimer without leave.' 'If the contracts were unprofitable, whether the disclaimers should be set aside under s 568B because of grossly disproportionate prejudice.']

Ratio Decidendi

The Conference Facilities Agreement was not property of Blue Sennar amenable to disclaimer because Blue Sennar was not a party to it, had not acceded to it, and had no contractual rights under it. As to Eye Plantain, the Conference Facilities Agreement consistently produced net income after deductions and the pleaded matters did not make it an unprofitable contract; the Conference Facilities Licence standing alone imposed no relevant onerous obligation. Because the CFA and CFL were not unprofitable contracts, leave under s 568(1A) was required and had not been obtained, so all three purported disclaimers were nullities and of no effect.

Court Disposition

Declarations made that the CFA was not property of Blue Sennar, leave was required for Eye Plantain's disclaimers, and all purported disclaimers were nullities and had no effect; defendants ordered to pay the plaintiff's costs.

Orders

  • ['The Conference Facilities Agreement (for the Sebel Manly Beach) dated 11 May 2006 was not property of Blue Sennar Pty Limited, and the first defendant was not entitled to disclaim it.' 'The second defendant required the leave of the Court under (CTH) Corporations Act 2001, s 568(1A), in order to disclaim the...