FEDERAL COURT OF AUSTRALIA
Adia Venture Ltd v Traffic Technologies Ltd [2025] FCA 564
File number(s): VID 667 of 2025 Judgment of: O’CALLAGHAN J Date of judgment: 28 May 2025 Date of publication of reasons: 30 May 2025 Catchwords: PRACTICE AND PROCEDURE – application by plaintiffs for an order pursuant to s 588FM of the Corporations Act 2001 (Cth) (Act) extending the time for registration of a security interest in defendants’ assets for the purposes of s 588FL(2)(b)(iv) of the Act – where failure to register was due to inadvertence – where granting relief would not prejudice the position of creditors or shareholders – where no basis for adjournment – relief granted Legislation: Corporations Act 2001 (Cth) ss 440D, 442C, 447A, 447C, 588FL and 588FM Cases cited: Bevillesta Pty Ltd v Imagine UN Ltd [2009] VSC 50; (2009) 69 ACSR 574
Bluewaters Power 1 Pty Ltd v Griffin Coal Mining Company Pty Ltd [2019] WASC 438
Re Accolade Wines Australia Ltd [2016] NSWSC 1023
Re Amotran Pty Ltd [2017] VSC 637
Re Appleyard Capital Pty Ltd [2014] NSWSC 782; (2014) 101 ACSR 629
Re Cardinia Nominees Pty Ltd [2013] NSWSC 32
Re Guardian Securities Ltd [1984] 1 NSWLR 95
Re Psyche Holdings Pty Ltd [2018] NSWSC 1254
Re Transurban CCT Pty Ltd [2014] NSWSC 1909
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 47 Date of hearing: 28 May 2025 Counsel for the Plaintiffs: Ms V E Bell Solicitor for the Plaintiffs: Thomson Geer Counsel for the Defendants: Mr J L Evans KC Solicitor for the Defendants: Madgwicks Lawyers ORDERS
VID 667 of 2025 BETWEEN: ADIA VENTURE LIMITED (HONG KONG REGISTRATION NUMBER 76722321)
First Plaintiff
SEASON COMPONENTS COMPANY LIMITED (HONG KONG REGISTRATION NUMBER 130050)
Second Plaintiff
AND: TRAFFIC TECHNOLOGIES LTD (ADMINISTRATORS APPOINTED) ACN 080 415 407
First Defendant
GLENN JEFFREY FRANKLIN & JASON GLENN STONE IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF TRAFFIC TECHNOLOGIES LTD (ADMINISTRATORS APPOINTED) ACN 080 415 407
Second Defendants
ORDER MADE BY:
O’CALLAGHAN J
DATE OF ORDER:
28 MAY 2025
THE COURT ORDERS THAT:
1.The name of the First Plaintiff is amended to ADIA VENTURE LIMITED (HONG KONG REGISTRATION NUMBER 767223321).
2.The Plaintiffs’ have leave pursuant to section 440D of the Corporations Act 2001 (Cth) (the Corporations Act) to commence and proceed with the proceeding against the First Defendant.
3.Pursuant to section 588FM of the Corporations Act, 18 November 2024 is fixed as the time for registration of the Plaintiffs’ security interest pursuant to registration number 202411180056932.
4.The Second Defendants are to take steps to cause notice of these orders to be given, within one business day of the making of these Orders to:
(a)Where the First Defendant has an email address for a creditor, by notifying each such creditor, via email of the making of the Orders;
(b)Where the First Defendant does not have an email address, by publishing the Orders on the website maintained by the…
Continue reading Adia Venture Ltd v Traffic Technologies Ltd
Sign in free to access the full text
- AGLC
- Adia Venture Ltd v Traffic Technologies Ltd [2025] FCA 564
- Case
- [2025] FCA 564
- Decision Date
CaseChat Overview and Summary
The court considered whether the failure to register the collateral earlier was accidental or due to inadvertence, and whether the orders sought would not prejudice the position of creditors or shareholders. The court found that the failure was due to inadvertence, and that the orders would not prejudice creditors or shareholders. The court also noted that the solvency of the company and the likelihood of its solvency being maintained into the foreseeable future are factors to be taken into consideration. The court exercised its discretion to grant the order.
The court made the following orders: 1) the name of the First Plaintiff was amended to ADIA VENTURE LIMITED (HONG KONG REGISTRATION NUMBER 767223321); 2) the plaintiffs have leave to commence and proceed with the proceeding against the First Defendant; 3) 18 November 2024 is fixed as the time for registration of the plaintiffs’ security interest; 4) the Second Defendants are to take steps to cause notice of these orders to be given to creditors, the Australian Securities and Investments Commission, and others; 5) any person who can demonstrate a sufficient interest to vary or discharge Order 2 has liberty to apply to the Court within 28 days of the date of these orders; and 6) the defendants’ costs be costs in the administration of the First Defendant.
Orders
Orders of the court
1. The name of the First Plaintiff is amended to ADIA VENTURE LIMITED (HONG KONG REGISTRATION NUMBER 767223321).
2. The Plaintiffs’ have leave pursuant to section 440D of the Corporations Act 2001 (Cth) (the Corporations Act) to commence and proceed with the proceeding against the First Defendant.
3. Pursuant to section 588FM of the Corporations Act, 18 November 2024 is fixed as the time for registration of the Plaintiffs’ security interest pursuant to registration number 202411180056932.
4. The Second Defendants are to take steps to cause notice of these orders to be given, within one business day of the making of these Orders to:
(a) Where the First Defendant has an email address for a creditor, by notifying each such creditor, via email of the making of the Orders;
(b) Where the First Defendant does not have an email address, by publishing the Orders on the website maintained by the Second Defendants; and
(c) The Australian Securities and Investments Commission, by its email address.
5. Any person who can demonstrate a sufficient interest to vary or discharge Order 2 of these Orders (including any creditor of the First Defendant) has liberty to apply to the Court within 28 days of the date of these orders and on two business days’ written notice to the parties to these proceedings.
6. The Defendants’ costs be costs in the administration of the First Defendant.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Section 588FM of the Act provides:Extension of time for registration(1) A company, or any person interested, may apply to the Court (within the meaning of section 58AA) for an order fixing a later time for the purposes of subparagraph 588FL(2)(b)(iv).(2) On an application under this section, the Court may make the order sought if it is satisfied that:(a) the failure to register the collateral earlier;(i) was accidental or due to inadvertence or some other sufficient cause; or (ii) it is not of such a nature as to prejudice the position of creditors or shareholders; or (b) on other grounds, it is just and equitable to grant relief.(3) The Court may make the order sought on any terms and conditions that seem just and expedient to the Court. The power conferred under s 588FM is discretionary. Factors which may impact the exercise of the court’s discretion include delay and the presence or absence of prejudice to creditors or shareholders. In order for an extension of time to be granted, the solvency of the company under administration and the likelihood of its solvency being maintained into the foreseeable future are factors to be taken into consideration. See Bluewaters Power 1 Pty Ltd v Griffin Coal Mining Company Pty Ltd [2019] WASC 438 at [54] (Vaughan J); Re Cardinia Nominees Pty Ltd [2013] NSWSC 32 at [20] (Black J); Re Guardian Securities Ltd [1984] 1 NSWLR 95 at 97–98 (McLelland J); Bevillesta Pty Ltd v Imagine UN Ltd [2009] VSC 50; (2009) 69 ACSR 574 at 579 [28] (Robson J); and Re Appleyard Capital Pty Ltd [2014] NSWSC 782; (2014) 101 ACSR 629 at 638 [25]–[26] (Brereton J). Absent evidence of solvency, steps are usually taken to preserve the interests of unsecured creditors by reserving liberty to apply to any external administration appointed within six months of the date on which registration for the security interest is fixed. In this case, Ms Bell relied on two grounds under s 588FM to support the plaintiffs’ application, viz:(1)the failure to register the collateral earlier was accidental and due to inadvertence (s 588FM(2)(a)(i)); and(2)the orders sought will not prejudice the position of creditors or shareholders of the defendants (s 588FM(2)(a)(ii)). Inadvertence The cases have in some instances sought to define the meaning of the ordinary English word “inadvertence”. In Re Accolade Wines Australia Ltd [2016] NSWSC 1023 at [14], Brereton J said that “‘inadvertence’ includes failure to advert to or understand the requirement for registration within the specified period, and innocent error in the sense of failure to register through ignorance of the legal requirement to do so, or of the consequences of not doing so”. In Bluewaters at [40], Vaughan J observed that “inadvertence … is concerned with human error or oversight or being ‘not properly attentive’”.No prejudice to creditors or shareholders The cases say that the relevant type of prejudice is the prejudice attributable to the delay in registration, rather than prejudice from making the order. See, for example, Accolade Wines at [18] (Brereton J). Further, as Brereton J said in Appleyard Capital at 640 [30], “relevant prejudice is not necessarily established merely by showing that the dividend to unsecured creditors will be less if the security interest does not vest in the company”.