In Grant v Commissioner of Inland Revenue, the Court of Appeal took little time to uphold a High Court decision that a deed of company arrangement (DOCA) under Part 15A of the Companies Act 1993 was void.
At the creditors meeting, the DOCA had been approved by the majority of creditors in number. Nevertheless, this did not constitute 75% of creditors in value. Mr Grant, as chair of a creditors' meeting, purported to exercise a casting vote in favour of the DOCA in order for it to be approved.
The Court held that the statutory scheme allowed for the use of a casting vote by the chair only when there was a deadlock in numbers for and against the resolution, and not to make up a shortfall in relation to the value of the creditors voting. The Court stated that, despite some overall similarities with the Australian scheme, it was evident that Parliament had not opted to incorporate the technical provisions found there in relation to deadlock-breaking.
It is understood that a further appeal is contemplated.
See Court decision here.