Gold Fields Mining Llc v Tucker & Anor

A company voluntary arrangement must be applied as a complete and universal code where its language so indicates. Supervisors cannot leave a creditor’s claim indefinitely in limbo while seeking a level of certainty appropriate to acceptance rather than rejection.

Where the supervisors have had a reasonable period to assess a claim, they must admit or reject it and, if rejecting it, give written reasons. Rejection preserves the creditor’s contractual right to elect between the dispute-resolution procedures specified by the arrangement. The court cannot require the claim to be determined on its merits outside those procedures merely because foreign proceedings may be more comprehensive or may create a risk of inconsistent conclusions.

Gold Fields Mining LLC claimed under the company voluntary arrangement of Energy Holdings (No. 3) Ltd, an English company in liquidation. The respondents were the company’s joint supervisors and liquidators.

Gold Fields lodged a substantial environmental indemnity claim in July 2007. The supervisors treated it as time-barred and later expressed provisional doubts about its merits, but did not formally admit or reject it or provide written reasons. Separate proceedings concerning related environmental liabilities were pending in Delaware.

The applications sought directions as to whether the supervisors should obtain further material, await the Delaware proceedings, join the company to those proceedings, or have the claim determined by the court. The central issue was how the claim had to be progressed under the CVA.

1. Directions and disposition. The supervisors were directed to admit or reject Gold Fields’ claim within 21 days of 19 March 2010. If rejecting it, they had to provide a written statement of reasons and thereafter treat it as a disputed claim under the CVA. The other proposed options were rejected, and the liquidators were not given the court’s liberty or imprimatur to join the Delaware proceedings.
2. The CVA conferred sole responsibility for the initial adjudication of CVA claims on the supervisors. The court could not require them to reject the claim, deem it rejected without written reasons, or determine its merits itself. The supervisors had to decide whether the material justified acceptance or rejection.
3. The threshold for rejection was lower than that required for acceptance. A supervisor could reject where there was at least a prima facie reasonable ground, because the creditor retained a full right to challenge the rejection before the English court or the CVA dispute tribunal. The supervisor could also rely on a different reason where doing so caused no injustice.
4. The claim could not remain indefinitely undecided. The supervisors had already had a reasonable period, and Gold Fields had indicated that it would provide no further material. Awaiting the Delaware proceedings would cause delay measured in years, would undermine the speedy and universal process established by the CVA, and would impose too high a threshold of certainty on the supervisors.
5. The CVA gave Gold Fields the right, after rejection, to elect between the English court and expert determination. That right could not be removed because Delaware proceedings were more extensive, because foreign law was involved, or because the CVA process might be less comprehensive.
6. The allegations of actual or apparent bias, abuse concerning documents, and disingenuous conduct were not determined because they would have required cross-examination. The supervisors and liquidators were ordered to pay Gold Fields’ costs on the indemnity basis.

The judgment records that the Chancellor previously directed the supervisors to adjudicate Gold Fields’ claim within the CVA process. The Court of Appeal subsequently dismissed the supervisors’ appeal, leaving that direction unchallengeable. The present court gave further directions for completing the adjudication.