Dalma Form Specialist - Case Update

Revenue NSW has succeeded in its bid to have a DOCA entered into by embattled construction firm Dalma Form terminated, with the Federal Court finding the DOCA — which would have precluded further investigation into potential claims for insolvent trading and unfair preferences — to be contrary to the interests of creditors as a whole.

Dalma Form was placed into administration in December 2023, with Bruce Gleeson and Daniel Robert Soire of Jones Partners appointed as voluntary administrators (Administrators). The company and its principal Igor Cikes have been the subject of negative press and are being investigated by the ATO in connection with an alleged $180 million tax fraud (which, if proved, could amount to the biggest tax fraud in Australian corporate history).

On 12 April, at the reconvened second creditors’ meeting, the creditors of Dalma Form passed a resolution approving an amended proposal for a DOCA, the proponents of which were Dalma Constructions Pty Ltd, Incline Hire Pty Ltd and Jason Ivan Andrijic (collectively, DOCA Proponents). The DOCA Proponents are all related to Dalma Form and Mr Cikes. The Chief Commissioner of State Revenue (Chief Commissioner) voted against the resolution, but his proof of debt, which was for over $11 million, had been admitted for $1 for voting purposes, with the Administrators treating it as a contingent claim based on legal advice received on the matter. The decision to approve the DOCA was made in spite of a recommendation by the Administrators that the company be wound up to allow further investigations into potential claims for insolvent trading, unfair preferences and the like.

The Chief Commissioner sought orders setting aside the decision to admit his claim for $1 and terminating the DOCA. The Administrators argued that it was not necessary to determine the latter issue (whether the decision to admit the Chief Commissioner’s claim for $1 should be set aside), and that the critical issue was the fate of the DOCA. The Court agreed, and determined that the DOCA should be set aside on the basis that it was contrary to the interests of the creditors as a whole. While the DOCA remains in place, a liquidator will not be appointed, Dalma Form’s affairs will not be subjected to investigation and there will be no possibility of recovery proceedings against alleged wrongdoers for insolvent trading, unfair preferences or other available relief.

The Administrators were appointed liquidators of the company. Read the decision HERE.

Professionals involved:

• Counsel for the Chief Commissioner: Peter Gray SC and John Gooley of 153 Phillip Barristers 

• Counsel for the Administrators: Daniel Krochmalik of 3 St James' Hall Chambers

• Solicitor for the Administrators: Polczynski Robinson

• Counsel for Dalma Form and the DOCA Proponents: John Anderson of Eight Selborne and Mr B Hord

• Solicitors for Dalma Form and the DOCA Proponents: Gillis Delaney Lawyers

• Counsel for the First Supporting Creditor: Karen Petch of New Chambers

• Solicitors for the First Supporting Creditor: Craddock Murray Neumann