In the matter of Franklyn Scholar (Australia) Pty Ltd; In the matter of Performance Development Group Pty Ltd

The applicants, Franklyn Scholar (Australia) Pty Ltd and Performance Development Group Pty Ltd, sought leave from the Court to extend the time in which they could bring claims for voidable transactions under the Corporations Act 2001 (Cth). They wished to bring these claims against various directors and companies associated with Franklyn Scholar. The applicants argued that the delay in bringing these claims was due to them initially pursuing their claims through a proof of debt process, which they only recently determined was not a suitable course of action. The case was heard in the Federal Court of Australia.

The primary legal issue before the Court was whether the applicants were entitled to an extension of time to bring their claims under section 588FF(3)(b) of the Corporations Act. The applicants needed to demonstrate that the delay was not unreasonable and that there was a reasonable excuse for the delay in bringing the claims. Additionally, the Court had to consider whether the applicants had acted with diligence in pursuing their claims and whether there was a genuine prospect of success in the claims they wished to bring.

In determining whether to grant the applicants leave to extend the time for bringing their claims, the Court considered the conduct of the applicants and the reasons for the delay. The Court found that the applicants had not acted unreasonably or without diligence in pursuing their claims. The Court acknowledged that the applicants had initially pursued their claims through a proof of debt process, which they only recently determined was not an appropriate course of action. The Court also noted that the applicants had acted promptly in seeking leave to extend the time for bringing their claims once they realised that the proof of debt process was not suitable. The Court concluded that the applicants had a reasonable excuse for the delay in bringing their claims and that there was a genuine prospect of success in the claims they wished to bring.

In light of the findings, the Court granted the applicants leave to extend the time for bringing their claims under section 588FF(3)(b) of the Corporations Act. The applicants were granted an extension of time to bring their claims against the directors and associated companies.