Rexel Electrical Supplies Pty Limited v Mentha (Administrator) in the matter of ACN 004 410 833 Limited (formerly Arrium Limited) [2018] FCAFC 229

Rexel Electrical Supplies Pty Limited v Mentha (Administrator) in the matter of ACN 004 410 833 Limited (formerly Arrium Limited) [2018] FCAFC 229

On the proper construction of the Override Deed, Required Consent Report and Deed Poll, read in their commercial context, the parties intended that receipt of the Moly-Cop Proceeds would not reduce the Financiers' Amount Owing or prejudice their right to prove for the Amount Owing as at 7 April 2016 unless and until the total Amount Owing was paid in full. The Documents preserved the Subject Finance Documents and the Financiers' position as holders of guarantees, and were not inconsistent with cl 19.1 of the Distribution DOCA. The deed administrators were therefore justified in admitting the Financiers' proofs without deducting the Moly-Cop Proceeds.

Jurisdiction
Australia
Judgment Date
20 December 2018
Procedural Posture
Appeal in Corporations Insolvency Proceeding Concerning Proofs of Debt Under Deeds of Company Arrangement / Appeal From Mentha V Epic Energy South Australia Pty Ltd, in the Matter of ACN 004 410 833 Limited (formerly Arrium Limited) [2017] FCA 1530
Outcome
Appeal dismissed; the trial judge's determination was correct.
Legal Topics
['proofs of Debt' 'deeds of Company Arrangement' 'rule Against Double Proof' 'contract Construction' 'guarantees' 'voluntary Administration']
['bankruptcy and Insolvency' 'corporations' 'contracts'] ['proofs of Debt' 'deeds of Company Arrangement' 'rule Against Double Proof' 'contract Construction' 'guarantees' 'voluntary Administration']

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Procedural Posture

Appeal in Corporations Insolvency Proceeding Concerning Proofs of Debt Under Deeds of Company Arrangement / Appeal From Mentha V Epic Energy South Australia Pty Ltd, in the Matter of ACN 004 410 833 Limited (formerly Arrium Limited) [2017] FCA 1530

Legal Issues

  1. 1 ['Whether, on the proper construction of the Override Deed, Required Consent Report and Deed Poll, the Financiers were entitled to prove under the Arrium Distribution Deed of Company Arrangement for the amount of their Arrium Group Claims without deducting their share of the Moly-Cop Proceeds.' 'Whether the deed administrators were justified in admitting the Financiers to proof without deducting the Moly-Cop Proceeds.' 'Whether the construction contended for by the Financiers was inconsistent with cl 19.1 of the Distribution DOCA or s 444D(1) of the Corporations Act 2001 (Cth).']

Ratio Decidendi

On the proper construction of the Override Deed, Required Consent Report and Deed Poll, read in their commercial context, the parties intended that receipt of the Moly-Cop Proceeds would not reduce the Financiers' Amount Owing or prejudice their right to prove for the Amount Owing as at 7 April 2016 unless and until the total Amount Owing was paid in full. The Documents preserved the Subject Finance Documents and the Financiers' position as holders of guarantees, and were not inconsistent with cl 19.1 of the Distribution DOCA. The deed administrators were therefore justified in admitting the Financiers' proofs without deducting the Moly-Cop Proceeds.

Court Disposition

Appeal dismissed; the trial judge's determination was correct.

Orders

  • ['Within 21 days hereof, the parties file and serve an agreed minute of proposed orders (including on the question of costs), or in the absence of agreement, the parties file and serve short submissions (limited to 3 pages) as to their preferred proposed orders (including on the question of costs).']