BESANKO J:
1 On 12 November 2019, I delivered my reasons for judgment in this proceeding (Adelaide Brighton Cement Limited, in the matter of Concrete Supply Pty Ltd v Concrete Supply Pty Ltd (Subject to Deed of Company Arrangement) (No 4) [2019] FCA 1846 (substantive reasons)). I adjourned the matter to 13 November 2019 to enable Adelaide Brighton Cement Ltd (ABCL) to give an indication to the Court and the other parties of the precise orders it was seeking. On that date, ABCL and the first, fourth, fifth and sixth defendants (the Concrete Supply defendants) put forward competing minutes of order as to the final orders which they sought.
2 I expressed the following conclusions in my substantive reasons (at [1420]):
(1) Concrete Supply is indebted to ABCL in the amount of $12,457,472.22.
(2) Concrete Supply failed to keep written financial records which complied with s 286 of the Corporations Act.
(3) The claim against the Concrete Supply defendants for misleading or deceptive conduct contrary to s 18 of the Australian Consumer Law must be dismissed.
(4) The claim against the Concrete Supply defendants for breach of trust or fiduciary duty must be dismissed.
(5) The Deed of Company Arrangement executed on 21 December 2017 must be terminated pursuant to s 445D of the Corporations Act.
(6) The resolution passed at the second meeting of creditors of Concrete Supply held on 19 December 2017 that Concrete Supply enter into the proposed Deed of Company Arrangement should be set aside.
3 ABCL seeks orders in the following terms:
1. The first defendant is indebted to the plaintiff in the amount of $12,457,472.22.
2. The first defendant failed to keep written financial records which complied with s 286 of the Corporations Act 2001 (Cth) between April 2009 and November 2017.
3. The resolution that the first defendant execute a deed of company arrangement, passed on the casting vote of the second defendant, be set aside.
4. The Deed of Company Arrangement executed on 21 December 2017 be terminated.
5. [Not pressed].
6. The first defendant be wound up.
7. Messrs Martin Lewis and David Kidman be appointed as joint and several liquidators of the first defendant.
8. The second to sixth defendants forthwith deliver, convey or surrender the first defendant's books to the liquidators of the first defendant.
…
4 The Concrete Supply defendants submit that the appropriate orders, having regard to my substantive reasons, are as follows:
1. The first defendant is indebted to the plaintiff in the amount of $12,457,472.22.
2. The first defendant failed to keep written financial records which complied with s 286 of the Corporations Act 2001 (Cth) by virtue of a failure to record a major liability of the company.
3. The Deed of Company Arrangement executed on 21 December 2017 be terminated pursuant to s 445D of the Corporations Act 2001 (Cth).
4. Messrs Martin Lewis and David Kidman be appointed as joint liquidators of the first defendant.
5. Orders 3 and 4 be stayed until 17 December 2019.
6. Order 1 of the order[s] made on 12 November 2019 be varied such that the date 13 November 2019 be replaced with the date 17 December 2019.
…
5 With respect to the indebtedness of Concrete Supply Pty Ltd (Concrete Supply), both ABCL and the Concrete Supply defendants proposed a declaration in the following terms:
1. The first defendant is indebted to the plaintiff in the amount of $12,457,472.22.
6 I will make a declaration in terms of the above.
7 With respect to the conclusion that Concrete Supply failed to keep written financial records which complied with s 286 of the Corporations Act 2001 (Cth), ABCL sought the following declaration:
2. The first defendant failed to keep written financial records which complied with s 286 of the Corporations Act 2001 (Cth) between April 2009 and November 2017.
8 The Concrete Supply defendants proposed the following declaration:
2. The first defendant failed to keep written financial records which complied with s 286 of the Corporations Act 2001 (Cth) by virtue of a failure to record a major liability of the company.
9 There are two relevant points of difference. The first is whether the declaration should make reference to the period of time during which the first defendant failed to keep written financial records which complied with s 286 of the Corporations Act. Counsel for ABCL submitted that the declaration should make reference to the period between April 2009 and November 2017 in accordance with [184] and [568] of the substantive reasons. Counsel for the Concrete Supply defendants submitted that the declaration should not make reference to a period of time because: (1) there had been no argument about the length of the period; (2) there was an issue under s 286 as to whether or not the period is continuous; and (3) there was concern about the period because of a possible insolvent trading claim brought by a liquidator of the first defendant.
10 In reply, counsel for ABCL submitted that the Concrete Supply defendants' submission was "vague and unclear" and that the inclusion of the period of time between April 2009 and November 2017 was in accordance with the evidence. It submitted that there is clear evidence that there were deficiencies throughout the period and that that was made clear by the evidence of Mr Brian Morris with which no other witness ultimately disagreed.
11 The second point of difference was whether I should include in the declaration a reference to the failure to record a major liability of Concrete Supply.
12 I said the following at [971] of the substantive reasons:
… The failure to record a major liability of the company (perhaps any liability other than one which is de minimis) would be a contravention of the section. That raises the prospect of the presumption of insolvency arising.
(see also [571] of the substantive reasons.)
13 Counsel for the Concrete Supply defendants submitted that the inclusion of such a statement should be preferred because it "picks up" this statement in the substantive reasons.
14 As I understood it, counsel for ABCL did not submit that such a statement should not be included in the declaration, although I note the difference in the respective proposed declarations.
15 In my opinion, ABCL's submissions are correct and the declaration sought by it should be made. The issue of the period of time was fully ventilated before me and it is appropriate to include a reference to the period in the declaration. There is no need to include a reference to a major liability of the company which, without further detail (which neither party is proffering) does not seem to achieve a great deal.
16 With respect to the termination of the Deed of Company Arrangement (DOCA) pursuant to s 445D of the Corporations Act, ABCL sought the following order:
4. The Deed of Company Arrangement executed on 21 December 2017 be terminated.
17 The Concrete Supply defendants proposed the following order:
3. The Deed of Company Arrangement executed on 21 December 2019 be terminated pursuant to s 445D of the Corporations Act 2001 (Cth).
18 The only point of difference between these orders is whether the order should make reference to s 445D of the Corporations Act as the basis on which the DOCA is terminated. Counsel for the Concrete Supply defendants submitted that it is appropriate to include a reference to s 445D in the order because there are a number of "deeming provisions" in the Corporations Act.
19 Counsel for ABCL indicated that ABCL had no issue with such an addition and I consider that it is appropriate. I will make an order in terms of the order proposed by the Concrete Supply defendants.
20 In addition to my conclusion at 1420 of the substantive reasons, I said the following (at [1418] and [1419]):
Unless there is no need for an order, or to make an order would be inconsistent with the order I will make under s 445D(1), an order should be made setting aside the resolution of 19 December 2017 that the company enter into the DOCA.
…
An order should be made under s 445D terminating the DOCA. In addition, and if necessary, an order should be made setting aside the resolution passed on the exercise of Mr Cantone's casting vote on 19 December 2017.
21 ABCL seeks the following order:
3. The resolution that the first defendant execute a deed of company arrangement, passed on the casting vote of the second defendant, be set aside.
22 The Concrete Supply defendants did not put forward any competing order nor did they make a submission as to whether or not such an order should be made.
23 The second and third defendants (the administrators) opposed the making of such an order. Counsel for the administrators advanced a number of arguments in support of this opposition. First, he submitted that such an order would not be appropriate in the circumstances. Secondly, he submitted that it would be inconsistent with making an order pursuant to 445D that the DOCA be terminated. Thirdly, he submitted that such an order would not be necessary because an order appointing alternative liquidators is entirely sufficient. Finally, he submitted that to make both orders might lead to confusion.
24 Counsel for ABCL submitted that there is no scope for confusion. He also submitted that making such an order is appropriate, not inconsistent with making an order under s 445D, and makes clear the effect of argument that was propounded and set out in ABCL's Originating Process.
25 In Cresvale Far East Ltd (in liq) v Cresvale Securities Ltd [2001] NSWSC 89; (2001) 37 ACSR 394 an application was made under s 445D and s 600B (the predecessor to s 75-42 of the Insolvency Practice Schedule (Corporations) 2016 (Sch 2 to the Corporations Act)). Although Austin J concluded that the challenged DOCA ought to be terminated under each section, his Honour declined to make orders under both sections. His Honour said (at [235]) that:
I have found that the grounds exist for me to set aside, under s 600B(3), the resolution of the second meeting of creditors to approve the proposed DCA. Subject to any submissions that may be made by the parties, I see no point in making an order under that section. As I have mentioned, acts already done are preserved by s 600E notwithstanding the making of an order under s 600B. That seems to be [sic] to be in substance the same outcome as flows from s 445H where an order is made under s 445D. The principal difference is that if the order is made under s 445D, the company passes "automatically" into liquidation. That is an outcome which seems to be desirable.
26 I am similarly of the view that it is not necessary to make an order under s 75-42 and an order under s 445D. I do not think that it is necessary to make the order that ABCL seeks where I will, as I have indicated, make an order that the DOCA be terminated pursuant to s 445D, which has the effect of the company passing "automatically" into liquidation by operation of s 446AA of the Corporations Act.
27 With respect to the order sought by ABCL in paragraph 8 of its proposed minutes, the Concrete Supply defendants submit that the proposed order is unnecessary because of the powers of a liquidator in s 530B of the Corporations Act. I agree with that submission and I will not make that order.
28 I am prepared to order a stay of the order terminating the DOCA and of the order appointing Messrs Lewis and Kidman as joint and several liquidators of Concrete Supply on a relatively short term basis. I will do so until 17 December 2019. That will afford the Concrete Supply defendants sufficient time to decide whether they wish to appeal and to bring a formal application for a stay (assuming that they do appeal) which ABCL has indicated will be opposed.
29 Finally, I consider it appropriate to reflect in the orders that ABCL failed in its claims for misleading or deceptive conduct, unconscionable conduct and breach of trust or fiduciary duty. I will order that the claims in paragraphs 11-14 inclusive of the Originating Process be dismissed.
30 For completeness, I record that the issue of the costs of the proceeding is the subject of a separate regime of orders and will be the subject of oral submissions on 11 December 2019.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko.