Connelly (liquidator), in the matter of CIMC Rolling Stock Australia Pty Ltd (in liq) v One Rail Australia (FLA) Pty Ltd

The applicant, One Rail Australia (FLA) Pty Ltd (Freightliner), applied for leave to proceed against the liquidated company, CIMC Rolling Stock Australia Pty Ltd (CIMC), pursuant to s 500(2) of the Corporations Act 2001 (Cth). This application was made in relation to a cross-claim that Freightliner sought to bring against CIMC. The liquidators of CIMC had commenced an action against Freightliner, seeking to recover certain payments and assets as unfair preferences under s 588FF(1)(c) of the Act. The liquidators alleged that CIMC was insolvent immediately prior to entering into a settlement deed with Freightliner and that the terms of that deed constituted an unfair preference. Freightliner argued that it was not required to obtain leave to pursue its cross-claim against CIMC, citing certain authorities. However, the court held that the application for leave was more appropriately dealt with on the basis that leave was required. The court considered the relevant matters in exercising its discretion to grant leave under s 500(2) of the Act. Ultimately, the court granted leave for Freightliner to proceed with its cross-claim against CIMC.

The key legal issue in this case was whether Freightliner was required to obtain leave to proceed with its cross-claim against CIMC. Freightliner argued that it was not required to obtain leave, relying on certain authorities. However, the court held that leave was required in these circumstances. The court considered the relevant matters in exercising its discretion to grant leave under s 500(2) of the Act, including whether the claim had a solid foundation, the degree and complexity of the legal and factual issues involved, the prospects that a proof of debt would be rejected, and the stage to which the proceedings may have progressed. The court found that these matters were not compelling enough to deny leave and ultimately granted leave for Freightliner to proceed with its cross-claim against CIMC.

The court granted leave for Freightliner to proceed with its cross-claim against CIMC. The court ordered that the cross-claimant's and first cross-defendant's costs of the interlocutory application be those parties' costs in the cause. The court also ordered that the first cross-defendant was to file and serve its defence to the cross-claim by a specified date, and that the cross-claimant was to file any application for substituted service on the second and third cross-defendants by a specified date. The court vacated a previous order and ordered the plaintiffs to file and serve an expert report as to the solvency of the second plaintiff by a specified date. The court also ordered the fourth cross-defendant to file and serve its defence to the cross-claim by a specified date and listed the matter for a case management hearing. The court's decision allows Freightliner to proceed with its cross-claim against CIMC, which may have implications for the outcome of the liquidators' action.

The court made several orders in relation to the cross-claim. The court granted leave for Freightliner to proceed with its cross-claim against CIMC and ordered that the cross-claimant's and first cross-defendant's costs of the interlocutory application be those parties' costs in the cause. The court also ordered that the first cross-defendant was to file and serve its defence to the cross-claim by a specified date, and that the cross-claimant was to file any application for substituted service on the second and third cross-defendants by a specified date. The court vacated a previous order and ordered the plaintiffs to file and serve an expert report as to the solvency of the second plaintiff by a specified date. The court also ordered the fourth cross-defendant to file and serve its defence to the cross-claim by a specified date and listed the matter for a case management hearing. These orders facilitate the progression of the cross-claim and the liquidators' action, and may have implications for the outcome of both proceedings.