Re Tames involved an application for the Court to approve a debtor's proposal to creditors under section 333 of the Insolvency Act. The applicant was the provisional trustee for the proposal and sought the Court's approval of the proposal's terms. If the proposal was accepted, Ms Tames (the debtor) would only pay $0.05 on the dollar to her unsecured creditors. The application for approval was opposed by ASB, one of Ms Tames' unsecured creditors.
One of the grounds (amongst others) on which ASB opposed the proposal was that it did not have the requisite 75% approval of creditors by value. As a result, the Court had to look into whether it actually had the power to examine the value of the debtors' debts to see whether the 75% threshold had been met. The provisional trustee argued that once a trustee had accepted a creditor's claim at a certain value, it was not the role of the Court on an application for approval to unravel the trustee's decision.
The Court found that it could review compliance with the voting requirements, particularly if non-compliance affected the outcome of the vote. However, on the evidence, the Court could not determine conclusively whether or not the 75% threshold had been reached. Instead, this was one factor of many going towards the Court's discretion to approve the proposal. Ultimately the Court refused to approve the proposal as it was not expedient and its terms were not reasonable.
See court decision here.