BP Australia Ltd v Brown

Case [2003] NSWCA 216

Reported Decision:

 (2003) 46 ASCR 677
58 NSWLR 322
(2003) 21 ACLC 1535

Court of Appeal


CITATION: BP AUSTRALIA LIMITED v BROWN & ORS [2003] NSWCA 216
HEARING DATE(S): 23 and 24 April 2003
JUDGMENT DATE:
8 August 2003
JUDGMENT OF: Spigelman CJ at 1; Mason P at 215; Handley JA at 216
DECISION: Appeal allowed in part. Cross-appeal allowed in part. See par [214].
CATCHWORDS: CORPORATIONS LAW - Insolvency - Voidable preference payments - time limit for application to recover - whether time may be extended under Corporations Act 2001 (Cth), s 1322(4)(d) - CORPORATIONS LAW - Insolvency - Voidable preference payments - power to extend time within which to apply for recovery - whether extension may be granted in general terms - Corporations Act 2001 (Cth), s 588FF(3) - CORPORATIONS LAW - Insolvency - Voidable preference payments - power to extend time within which to apply for recovery - appropriate test for exercise of discretion to extend time - PROCEDURAL FAIRNESS - Ex parte orders - when permitted - right of affected party to have orders set aside - PRACTICE AND PROCEDURE - Joinder of parties - date of effect of joinder of defendant - whether provision of Corporations Act 2001 (Cth) governing time limit for commencing proceedings directs attention to commencement against a particular party.
LEGISLATION CITED: Acts Interpretation Act 1901 (Cth)
Bankruptcy Act 1924 (Cth)
Bankruptcy Amendment Act 1980 (Cth)
Companies Code 1981 (Vic)
Corporations Act 2001 (Cth)
Corporations Law
Supreme Court Act 1970
CASES CITED: ABB Power Plants Limited v Electricity Commission (NSW) (t/as Pacific Power) (1995) 35 NSWLR 596
Anthony Hordens & Sons Limited v Amalgamated Clothing & Allied Trades Union of Australia (1932) 47 CLR 1
Australasian Memory Pty Ltd v Brien (2000) 200 CLR 270
Beard v Baulkham Hills Shire Council (1986) 7 NSWLR 273
Brian Rochford Ltd (Administrator Appointed) v Textile Clothing & Footwear Union of NSW (1998) 47 NSWLR 47
Brisbane South Regional Health Authority v Taylor (1997) 186 CLR 541
Cameron v Cole (1944) 68 CLR 571
Dahozo Pty Ltd v Oz-US Film Productions Pty Ltd (1997) 24 ACSR 739
David Grant and Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 Downey v Trans Waste Pty Ltd (1991) 172 CLR 167
Demondrille Nominees Pty Ltd v Shirlaw (1997) 25 ACSR 535
Emanuele v Australian Securities Commission (1996-1997) 188 CLR 114
Ferrier and Knight (as Liquidators of Compass Airlines Pty Ltd) v Civil Aviation Authority (1994) 55 FCR 28
Greig v Australian Building Industries Pty Ltd (In liq) [2002] QSC 138
Greig v Australian Building Industries Pty Ltd (In liq) (2002) 171 FLR 41; 21 ACLC 324
Greig v Australian Building Industries Pty Ltd (In Liq) [2003] QCA 298
Hall v Nominal Defendant (1966) 117 CLR 423
Haynes' case (1614) 12 Co Rep 113, 77 ER 1389
Horsburgh v Strongman & Crouch [1998] 3 VR 896
Itek Graphix Pty Ltd v Elliott (2001) 54 NSWLR 207
John v Commissioner of Taxation (Cth) (1989) 166…

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AGLC
BP Australia Ltd v Brown [2003] NSWCA 216
Case
[2003] NSWCA 216
Decision Date

CaseChat Overview and Summary

BP Australia Ltd (the applicant) sought to recover payments made by a company in liquidation to Brown (the respondent), alleging they were voidable preference payments. The primary dispute concerned the applicant's entitlement to recover these payments, particularly in light of a statutory time limit for making such applications and the court's power to extend that time. The matter came before the Court of Appeal of New South Wales.

The central legal issues before the Court of Appeal were whether the time limit for an application to recover voidable preference payments under section 588FF(1) of the *Corporations Act 2001* (Cth) could be extended under section 1322(4)(d) of the Act, and if so, what test applied for the exercise of that discretion. Further, the court considered whether any such extension could be granted in general terms, and the implications of procedural fairness and the joinder of parties on the commencement date of proceedings.

The Court of Appeal considered the interplay between sections 588FF and 1322 of the *Corporations Act 2001* (Cth). It determined that section 1322(4)(d), which permits the court to extend time for doing an act, could apply to the time limit for commencing proceedings to recover voidable preference payments under section 588FF(1). The court held that the appropriate test for exercising the discretion to extend time involved considering the applicant's diligence, the reasons for delay, the prejudice to the respondent, and the merits of the application. The court also addressed the principles of procedural fairness, particularly in relation to ex parte orders, and the effect of joining a party on the commencement date of proceedings.

The appeal and cross-appeal were allowed in part, with specific orders detailed in paragraph [214] of the judgment.

Orders

Orders of the court

Appeal allowed in part. Cross-appeal allowed in part. See par [214].

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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