Carter (Liquidator), in the matter of Australian Vocational Learning Institute Pty Ltd (in liq)

In the matter of Australian Vocational Learning Institute Pty Ltd (in liq), the liquidator sought an extension of time to make an application under s 588FF(1) of the Corporations Act 2001 to void transactions involving AVLI and several related parties. The liquidator had previously obtained approval to enter into a funding agreement to facilitate further investigations into AVLI’s affairs, which were inadequate and insufficient upon her appointment. The Court was required to determine whether the principles of natural justice mandated that the prospective defendants be given an opportunity to be heard on the application for an extension of time. The Court also had to consider whether the liquidator had provided an acceptable explanation for the delay in taking action under s 588FF(1) within the specified time period, and whether the likely prejudice consequent upon the extension of time was limited.

The Court concluded that the principles of natural justice did require that the prospective defendants be given an opportunity to be heard on the application for an extension of time. However, the Court found that the liquidator had provided an acceptable explanation for the delay in taking action, as she had been appointed for a significantly shorter period than the length of the winding up, the investigations into the affairs of AVLI that had taken place prior to her appointment were of a preliminary nature only, and it had taken time to negotiate and obtain approval to enter into a funding agreement. The Court also found that the likely prejudice consequent upon the extension of time was limited, as the liquidator sought an extension of time of only six months, and the liquidator did not identify any particular prejudice that might result from the extension of time. The Court further found that the public interest in the investigations being undertaken and in recoveries being pursued if those examinations revealed a proper basis to do so, and that the funding agreement was the only mechanism by which prospective recoveries may be pursued. Accordingly, the Court granted the liquidator’s application for an extension of time.

Pursuant to s 588FF(3)(b) of the Corporations Act 2001, the time for making an application under s 588FF(1) of the Act is extended up to and including 1 June 2020 with respect to any voidable transaction involving AVLI and each or any of: Paul Lange; International Training and Development Private Limited; Accredited Online Training Pty Ltd; LFI Holdings Pty Ltd; LFI Trading Pty Ltd; and/or LFI Ventures Pty Ltd. The plaintiff’s costs of the proceedings be costs in the liquidation of AVLI.