Donnellon Childcare Holdings Pty Limited (in liq), in the matter of Donnellon Childcare Holdings Pty Limited (in liq) v Donnellon

The Liquidator of Donnellon Childcare Holdings Pty Limited sought an extension of time to bring proceedings against Andrew Prince under section 588FF(3)(b) of the Corporations Act 2001 (Cth). The Liquidator sought the extension to bring proceedings relating to impugning various transfers made from the company's bank accounts between December 2014 and June 2015, as well as declarations that Ms Donnellon had breached her duties as a director of the company and that Mr Prince was involved in those breaches. The court had to determine whether the significant delay in commencing the proceedings could be sufficiently explained, whether the proposed claim was so devoid of merit that it would be unfair to allow the extension, and whether any likely prejudice would be suffered if the extension were granted.

The court found that most of the delay was due to the failures of Mr Prince and Ms Donnellon to respond to the Liquidator's queries in a timely fashion. The court rejected Mr Prince's claims that he had consistently attempted to assist the Liquidator in his investigations, finding his claims to be belied by various aspects of the history. The court also found that the proposed claim was not so devoid of merits that it would be unfair to extend the period of Mr Prince's exposure to it, and that Mr Prince would not suffer any relevant prejudice by the extension of time being granted. The court therefore granted the extension of time which the Liquidator had sought.

The court made an order extending the time within which the plaintiffs may make an application under section 588FF(1) against Andrew Prince to 14 November 2019, the date on which Mr Prince was joined as a defendant in the proceeding. The court noted that entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.