Academy Construction [2024] NSWSC 808
DOCAs facilitate voluntary administration by binding the company and others to certain procedures in the administration. This DOCA termination case raises how they are to be read. Black J (at [97]) said they are to be ‘construed as statutes or, more precisely, as subordinate legislation’ rather than as contracts14.
DOCAs derive their ‘operative force’ from the Corporations Act, not by the action of agreement by parties. One problem is that DOCAs ‘are frequently ill-drafted and certainly fall short of the standards of excellence of statutory draftspersons’. A solution suggested is severance of any problematic parts if their original purpose can still be preserved15.
This principle is from Episode 111 of interpretation NOW!
Footnotes:
14 Lehman [2009] FCAFC 130 [5-9], cf Antquip [2020] NSWSC 487 [66-71].
15 Antquip [71], Herzfeld & Prince [13.210], Harrington 190 CLR 311 (328).