In the matter of THO Services Limited [2016] NSWSC 509

In the matter of THO Services Limited [2016] NSWSC 509

Although s 440D(1) does not of its own force apply to private arbitration, s 447A empowers the Court to alter the operation of Pt 5.3A in relation to a particular company so that s 440D(1) applies to the ICC arbitration. In the circumstances, including the short period until the second creditors' meeting, the burden on the administrators and the company's resources, the disputed and unliquidated nature of the Commonwealth's claim, and the likelihood that a stay would arise under a DOCA or creditors' voluntary winding up, the purposes of Pt 5.3A were better achieved by extending s 440D to the arbitration.

Jurisdiction
Australia
Judgment Date
21 March 2016
Procedural Posture
Corporations List Application Under (cth) Corporations Act 2001, S 447 a / Interlocutory Process Seeking Modification of the Operation of Pt 5.3 a During Voluntary Administration
Outcome
Application granted.
Legal Topics
['voluntary Administration Moratorium' 'stay of Proceedings Against Company in Administration' 'power Under Corporations Act 2001 (cth), S 447 A' 'private Arbitration and Proceedings in a Court']
['corporations' 'insolvency' 'arbitration'] ['voluntary Administration Moratorium' 'stay of Proceedings Against Company in Administration' 'power Under Corporations Act 2001 (cth), S 447 A' 'private Arbitration and Proceedings in a Court']

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Procedural Posture

Corporations List Application Under (cth) Corporations Act 2001, S 447 a / Interlocutory Process Seeking Modification of the Operation of Pt 5.3 a During Voluntary Administration

Legal Issues

  1. 1 ['Whether a private arbitration is a "proceeding in a Court" for the purposes of (CTH) Corporations Act 2001, s 440D(1).' 'Whether the Court has power under (CTH) Corporations Act 2001, s 447A to order that Pt 5.3A operate in relation to THO Services Limited as if s 440D(1) included an arbitration proceeding.' 'Whether, as a matter of discretion, the operation of s 440D(1) should be extended to the arbitration between THO Services Limited and the Commonwealth of Australia.']

Ratio Decidendi

Although s 440D(1) does not of its own force apply to private arbitration, s 447A empowers the Court to alter the operation of Pt 5.3A in relation to a particular company so that s 440D(1) applies to the ICC arbitration. In the circumstances, including the short period until the second creditors' meeting, the burden on the administrators and the company's resources, the disputed and unliquidated nature of the Commonwealth's claim, and the likelihood that a stay would arise under a DOCA or creditors' voluntary winding up, the purposes of Pt 5.3A were better achieved by extending s 440D to the arbitration.

Court Disposition

Application granted.

Orders

  • ['Pursuant to (CTH) Corporations Act 2001, s 447A, Part 5.3A of the Act is to operate in relation to THO Services Limited as if for the purposes of s 440D(1), a "proceeding in a court" included an arbitration proceeding, to the intent that s 440D(1) applies to the arbitration proceedings between the company and the...