Two NSW court decisions* in early 2012 considered whether a creditor’s claim was caught by a DOCA. In both decisions, the question of whether the ‘circumstances giving rise to the claim’ occurred before the company went into administration turned on the nature of the claim itself. It was held that if all the elements of a claim exist prior to a company entering administration, that claim will be provable even if there has not been a formal adjudication of the claim by a court or arbitrator.
*BE Australia WD Pty Ltd (subject to a Deed of Company Arrangement) v Sutton [2011] NSWCA 414 and Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd [2011] NSWSC 1567
For more information see: http://www.aar.com.au/pubs/insol/foinsol21feb12.htm?html=true&c=A119005336197
Adrian Hunter 