The High Court has published its reasons for dismissing two appeals against a decision of the Court of Appeal of the Supreme Court of Western Australia on deeds of company arrangement. Part 5.3A of the Corporations Act 2001 (Cth), which deals with the administration of companies with solvency issues, provides for companies and their creditors to enter into a deed of company arrangement to either prevent the company from becoming insolvent, or, at least, to provide creditors with a better return than would result from a winding up.
The appellant Mighty River and Mineral Resources Ltd (the first respondent in the second appeal) were both creditors of Mesa Minerals Ltd, which was placed into voluntary administration and had administrators appointed (the respondents Hughes and Bredenkamp). Mesa’s creditors voted in favour of the Administrators’ proposal to draw up a deed of company arrangement that placed a moratorium on creditors’ claims, required the administrators to conduct further investigations and then report on varying the deed within six months. Mighty River’s efforts to have the deed declared void were unsuccessful at first instance and before the WASCA.
After a hearing before the Full Court on 19 June, the High Court dismissed the appeals, with Kiefel CJ stating that the Court, ‘at least by a majority’, was of the view that the appeals be dismissed. On 12 September Continue reading