Deeds Of Company Arrangement - Hidden Dangers For Landlords.Henaford v Strathfield Group [2009] NSWSC NSWSC New South Wales Supreme Court (Australia) 539 In a recent NSW NSW New South Wales Noun 1. NSW - the agency that provides units to conduct unconventional and counter-guerilla warfare Naval Special Warfare decision a landlord was prevented from recovering future rent and outgoings from a tenant who had been placed into voluntary administration. Background In January 2009, the tenant was placed in voluntary administration and, at the second meeting of creditors One of the first steps in federal Bankruptcy proceedings whereby the creditors of a debtor meet in court to present their claims against him or her and a trustee is named to handle the application of the debtor's assets to pay his or her debts. in March 2009, the creditors voted in favour of a deed of company arrangement (DOCA DOCA desoxycortosterone acetate. ) to enable the tenant to continue trading. The landlord did not attend this meeting or vote in favour of the DOCA. The tenant remained in occupation of the premises but did not pay rent or outgoings after the DOCA was signed. The tenant claimed that its liability for future rent and outgoings was extinguished ex·tin·guish tr.v. ex·tin·guished, ex·tin·guish·ing, ex·tin·guish·es 1. To put out (a fire, for example); quench. 2. To put an end to (hopes, for example); destroy. See Synonyms at abolish. 3. by the DOCA. Landlord's Argument The landlord argued that the DOCA did not bar its claims for future rent and outgoings because: the right to future rent and outgoings had not arisen when the tenant entered voluntary administration; the right to rent was protected from the DOCA under the Corporations Act; and it would be unfair to deprive the landlord of future rent and outgoings where the tenant continues to use and occupy the premises after the DOCA took effect. Outcome The Court held that the landlord's entitlement to rent and outgoings arose when the lease was entered into and so it had been dealt with by the DOCA. Further, the Court held that the Corporations Act only preserved a landlord's right (if any) to recover possession of the premises after the administration ends. It did not protect the landlord's right to rent and other payments under the lease. Consequently, the tenant was entitled to remain in occupation of the premises without paying any further rent or outgoings to the landlord. Why The Decision Is Important This decision is a timely reminder to landlords to: ensure that your lease provides that the appointment of an administrator, liquidator Liquidator Person appointed by an unsecured creditor in the United Kingdom to oversee the sale of an insolvent firm's assets and the repayment of its debts. , receiver and/or manager to a tenant is a breach of the lease; include in a proof of debt for an insolvent INSOLVENT. This word has several meanings. It signifies a person whose estate is not sufficient to pay his debts. Civ. Code of Louisiana, art. 1980.. A person is also said to be insolvent, who is under a present inability to answer, in the ordinary course of business, the responsibility tenant all arrears owed by the tenant and all future rent and other lease payments under the lease; and seek legal advice before voting in favour of a DOCA. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Mr Cameron Graham Barry & Nilsson Level 21 215 Adelaide Street Brisbane Queensland 4000 AUSTRALIA Fax: 073231 6399 E-mail: robert.samut@bnlaw.com.au URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : www.bnlaw.com.au Click Here for related articles (c) Mondaq Ltd, 2009 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com |
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