News

High Court Dams Mighty River and Challenge to “Holding” DOCA Dismissed

After hearing arguments presented by parties’ counsel for a full day, the High Court sitting in Perth on 19 June 2018 adjourned for about 5 minutes and in a majority decision (with reasons to follow later) dismissed Mighty River’s challenge to the validly of “holding” DOCA which was previously upheld by Supreme Court of Western Australia Court of Appeal in Mighty River International Limited v Hughes [2017] WASCA 152.

Bennett + Co acted for and successfully represented Mineral Resources Limited in this case from trial which was conducted in February 2017 in the Supreme Court of Western Australia through to the High Court. Bennett + Co instructed Mr Justin Gleeson SC, former Solicitor General of the Commonwealth and Dr Ben Kremer as counsel for Mineral Resources Limited.

Although the High Court is yet to publish its reasons for its decision, we think it is probable the key points which will be made when the reasons are published will be:

  1. A “holding” or “investigative” DOCA complies with Part 5.3A of the Corporations Act 2001 (Cth).
  2. A “holding” or “investigative” DOCA will be valid if an administrator forms an opinion that such a DOCA is in the interest of the creditors.
  3. The administrators’ opinion as to the holding” or “investigative” DOCA must be properly recorded, reported to the creditors and sufficiently explained.
  4. A “holding” or “investigative” DOCA cannot be used solely for extending the convening period.
  5. It is for the body of creditors as a whole (and not the Court) to decide what is in their interests as to the future of the company in voluntary administration.

Dalitso Banda, says “I would like to thank and congratulate the Bennett + Co lawyers (past and present) that worked with me to successfully resist Mighty River’s appeal including Nathan Ebbs (Managing Principal), Kassie Comley, Reece Vogels and Amanda Templeton”.

 

Disclaimer: The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.

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