Gold Fields Mining LLC v Tucker & Anor

Where a voluntary arrangement provides alternative exceptions for late claims, the exceptions should be construed according to their ordinary terms unless the document clearly requires otherwise. A provision allowing a late claim where the creditor’s failure was not due to wilful default or lack of reasonable diligence may apply to all creditors whose claims were lodged after the primary claims date. It is not appropriate to imply an exclusion merely because a separate alternative applies to creditors who lacked notice of the creditors’ meeting, particularly where that would produce unequal treatment. The supervisors must therefore consider whether the late submission resulted from wilful default or lack of reasonable diligence before rejecting the claim as out of time.

Gold Fields Mining LLC, as assignee of a creditor of Energy Holdings (No.3) Ltd, applied under section 7(3) of the Insolvency Act 1986 concerning a creditors’ voluntary arrangement. The supervisors rejected Gold Fields’ claim because it was submitted after the contractual claims date and more than 28 days after Gold Fields became aware of the creditors’ meeting.

The central issue was whether paragraph 23.5 of section 2 of the arrangement created mutually exclusive exceptions, so that the wilful-default and reasonable-diligence exception was unavailable to a creditor who had not received notice of the meeting but submitted its claim outside the alternative 28-day period.

1. The Chancellor held that paragraph 23.5 of section 2 of the voluntary arrangement dealt with two categories of late claim: claims by creditors who received notice of the creditors’ meeting and claims by creditors who did not. The two exceptions to the primary claims-date requirement were alternatives, not mutually exclusive provisions.

2. The comparable wording in Part G, paragraph 4.3, supported that construction. The court rejected the supervisors’ proposed interpolation of words excluding from the first alternative creditors who fell within the second. That interpolation was not justified by the language of paragraph 23.5.

3. The court also considered the resulting difference in treatment. The supervisors’ construction would give creditors who received notice of the meeting a more favourable regime than creditors who did not. The provision should instead be construed according to its terms and without interpolation.

4. Accordingly, the first alternative applied to all creditors who had failed to submit their claims within the primary claims date. A creditor who had not received notice of the meeting was not excluded from relying on the wilful-default and reasonable-diligence alternative.

5. The supervisors were therefore wrong to exclude Gold Fields’ claim solely because it was late. The claim was out of time against the primary claims date, but could not be rejected on that ground unless and until the supervisors or the court determined whether the late submission resulted from wilful default or lack of reasonable diligence. Argument on that further issue was adjourned.

First-instance decision. The judgment does not state any prior appellate decision.