Farquhar v Rio Dorado Limited (in liquidation)

In the matter of Farquhar v Rio Dorado Limited (in liquidation), the plaintiff, Mr Farquhar, sought to bring defamation proceedings against the defendant company, Rio Dorado Limited, which was in the process of liquidation. The dispute centred on whether the court should grant leave under section 471B of the Corporations Act for Mr Farquhar to commence the defamation proceedings against Rio Dorado Limited, despite the imminent expiration of the relevant limitation period. The case was heard in the Supreme Court of Queensland.

The legal issues before the court were whether granting leave under section 471B would cause real prejudice to the company or its creditors, and whether it was necessary to grant leave to do justice between the parties. The court had to balance the interests of Mr Farquhar, who was seeking to enforce his legal rights, against the interests of the company and its creditors, who were in the process of liquidation. The court also had to consider whether granting leave would delay the liquidation process.

The court found that granting leave was necessary to do justice between the parties, as it was not likely to cause real prejudice to the company or its creditors, and it would not delay the liquidation process. The court noted that Mr Farquhar had been dilatory in bringing the proceedings and that the limitation period was about to expire, but it was in the interests of justice to grant leave so that the defamation claim could be heard. The court granted leave under section 471B of the Corporations Act for Mr Farquhar to commence the defamation proceedings against Rio Dorado Limited.