Australia, June 16 -- New South Wales Land and Environment Court issued text of the following judgement May 16:

1. MITCHELMORE JA: I agree with Ball JA.

2. MCHUGH JA: I agree with Ball JA.

3. BALL JA: By a summons filed on 4 December 2024 the applicant, Jet Midwest, Inc. seeks leave to appeal from a decision of the primary judge (Stevenson J) delivered on 25 October 2024 refusing Jet Midwest leave to proceed against the first respondent, Regional Express Holdings Limited (Administrators Appointed) (Holdings), and a proposed second defendant in the proceedings below, Rex Investment Holdings Pty Ltd (Administrators Appointed) (Investment), the second respondent, under s 440D of the Corporations Act 2001 (Cth) (the Act) during the administration of both companies. The leave to proceed was sought on the basis that any judgment would not be enforced without leave. The summons for leave to appeal was heard concurrently with the appeal itself. It is convenient in this judgment to refer to Investment and Holdings together as "Rex".

Background

4. On 15 October 2019, Investment entered into an Aircraft Sale and Purchase Agreement (the ASPA) with Jet Midwest for the purchase of four SAAB 340B aircraft and their component parts for a total price of USD2 million. It was a term of the ASPA that Investment would pay a deposit of USD200,000 to be held by McAfee & Taft, a firm based in Oklahoma City, USA, pursuant to an escrow agreement. The Scheduled Delivery Date in the case of each aircraft was stated in the ASPA to be "October 31, 2019, or such other date as may be mutually agreed in writing between the Parties". Payment of the balance of the purchase price was to be made one day before the Scheduled Delivery Date. Title to the aircraft passed on delivery. Delivery was to occur at the facilities of Kingman Airline Services Inc. (KAS) in Kingman, Arizona, USA, where the aircraft was stored on behalf of Jet Midwest for a monthly storage fee.

5. Clause 4.2 of the ASPA states that "The Buyer acknowledges and agrees that the Deposit is non-refundable in all circumstances except as provided in Clause 4.3 (Refund of the Deposit) or as otherwise set out in this Agreement". Clause 4.3 relevantly states that the deposit is refundable if:

(i) the Buyer delivers a Termination Notice to the Seller in accordance with the provisions of this Agreement; or

(ii) Delivery of an Aircraft has not occurred by the Cut-Off Date through no fault of the Buyer.

"Cut-Off Date" means "the date falling thirty days (30) after its Scheduled Delivery Date, or such later date as the Buyer and the Seller may agree in writing".

6. There were delays in putting into place the escrow arrangements for the payment of the deposit and then further delays resulting from COVID-19. For reasons which are not apparent from the evidence, completion never occurred.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/196b2fddea8a9552d9d12bc4)

Disclaimer: Curated by HT Syndication.