In the Matter Of Gold Valley Holdings Pty Ltd (ACN 619 798 588) (In Liquidation)
[2024] WASC 302
•20 AUGUST 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: IN THE MATTER OF GOLD VALLEY HOLDINGS PTY LTD (ACN 619 798 588) (IN LIQUIDATION) [2024] WASC 302
CORAM: STRK J
HEARD: 24 MAY 2024
DELIVERED : 24 MAY 2024
PUBLISHED : 20 AUGUST 2024
FILE NO/S: COR 80 of 2024
EX PARTE
RICHARD SCOTT TUCKER as joint and several liquidator of GOLD VALLEY HOLDINGS PTY LTD
First-named First Plaintiff
JOHN ALLAN BUMBAK as joint and several liquidator of GOLD VALLEY HOLDINGS PTY LTD
Second-named First Plaintiff
GOLD VALLEY HOLDINGS PTY LTD (IN LIQUIDATION)
Second Plaintiff
Catchwords:
Corporations law - Application for extension of time under s 588FF(3)(b) of the Corporations Act 2001 (Cth) - Extension sought to allow liquidators further time to commence proceedings against potential defendants in circumstances where any proceeding now commenced may become nugatory if a settlement deed completes - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 588FF(3)(b)
Rules of the Supreme Court 1971 (WA) O 67B r 5
Result:
Application granted
Category: B
Representation:
Counsel:
| First-named First Plaintiff | : | JR Shepherd |
| Second-named First Plaintiff | : | JR Shepherd |
| Second Plaintiff | : | JR Shepherd |
Solicitors:
| First-named First Plaintiff | : | Blackwall Legal LLP |
| Second-named First Plaintiff | : | Blackwall Legal LLP |
| Second Plaintiff | : | Blackwall Legal LLP |
Case(s) referred to in decision(s):
89 Burswood Road Pty Ltd v William James Harris and Robert Michael Kirman as joint and several liquidators of GH1 Pty Ltd (in liquidation) (ACN 099 191 714) [2021] WASCA 178
BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322
Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2015] HCA 10; (2015) 254 CLR 489
Grant Samuel Corporate Finance Pty Ltd v Fletcher [2015] HCA 8; (2015) 254 CLR 477
Green v Chiswell Furniture Pty Ltd (in liq) [1999] NSWSC 608
Greig v Stramit Corporation Pty Ltd [2003] QCA 298; [2004] 2 Qd R 17
Marsden (liquidator) v CVS Lane PV Pty Ltd, In the matter of Pentridge Village Pty Ltd (in liq) (receiver and manager apptd) (controller appointed) [2018] FCA 102; (2018) 124 ACSR 100
Matthew David Woods as joint and several liquidator of Brierty Limited (ACN 095 459 448) (In Liquidation) [2022] WASC 310
Mohen as Liquidator of MBP (WA) Pty Ltd [2023] WASC 81
Parker, In the matter of Worldwide Specialty Property Services Pty Ltd (in liq) v Worldwide Specialty Property Services Pty Ltd (in liq) [2017] FCA 687
Re Clarecastle Pty Ltd (in liq) (2011) 255 FLR 435
Robert Michael Kirkman as liquidator of ACN 142 745 337 (in liq) [2020] WASC 129
Sydney Recycling Park Pty Ltd v Cardinal Group Pty Ltd (in liq) [2016] NSWCA 329
Walker and Moloney v CBA Corporate Services (NSW) Pty Limited [2012] FCA 328
Table of Contents
Overview
Evidence
Background
Examinations
Report to creditors and the appointment of the liquidators
Ongoing investigations
Global settlement involving TransAsia, Mr Xie and the Xie related entities
Completion under the Settlement Deed
Decision to defer the commencement of proceedings
Urgency
Position of the potential defendants
Applicable principles
Disposition
Explanation for the delay
Preliminary review of the merits of the proposed proceedings
Prejudice
Disposition
Confidentiality
Conclusion and orders
Sch A - Orders made on 24 May 2024
STRK J:
Overview
Richard Scott Tucker and John Allan Bumbak are the joint and several liquidators of Gold Valley Holdings Pty Ltd (in liquidation). By a proceeding commenced on 21 May 2024, the liquidators applied to the court for an urgent ex parte order pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth) extending the time for the making of an application under s 588FF(1) up to and including 16 March 2025, against:
(a)TransAsia Private Capital Limited;
(b)Yuzheng Xie;
(c)Xie Corporation Pty Ltd;
(d)LSG Resources Pty Ltd;
(e)Steven William Bernard Parnell;
(f)Black Range Mining Pty Ltd;
(g)Infinity Metals Group Pty Ltd;
(h)Eureka Holdings (WA) Pty Ltd;
(i)Mine Builder Pty Ltd; and
(j)Northgate Resources Pty Ltd,
(together the potential defendants). The potential defendants were not parties to the proceeding seeking an extension of time, but were served with notice of the application and were interested persons.
The liquidators also sought orders pursuant to O 67B r 5 of the Rules of the Supreme Court 1971 (WA) to restrict access to one of the five affidavits filed in support of the application, and for the costs of and incidental to the application to be costs in the winding up of Gold Valley Holdings.
Satisfied of the urgency of the application, it was listed for hearing on 24 May 2024, and after hearing counsel for the liquidators, the application was granted with reasons to follow. Set out below are my reasons for making the orders reproduced at sch A.
Evidence
Five affidavits were read in support of the application.[1]
[1] ts 2, 13 (24 May 2024).
The first was the affidavit of Mr Tucker sworn on 21 May 2024 to which he attached 42 documents marked RST1 to RST42. Among other things, the documents attached to Mr Tucker's first affidavit included various Australian Securities and Investments Commission (ASIC) company extracts; reports issued to the creditors of Gold Valley Holdings; a settlement deed executed on 17 May 2024; and consents to primary relief sought by this application.
The second was a further affidavit made by Mr Tucker on 21 May 2024, marked confidential. In his second affidavit, Mr Tucker deposed to confidential funding arrangements, and attached two documents marked RST1 and RST2. These reasons have been prepared so as to not disclose the substance of the confidential information before the court.
The third was the affidavit of Jonathan Rex Shepherd sworn on
22 May 2024 to which Mr Shepherd attached one document marked JRS1, which recorded the consent of TransAsia Private Capital Limited to the application. Mr Shepherd is an employee of Blackwall Legal, the liquidators' solicitors.The fourth was the affidavit of Anthea Rae Scaddan sworn on
23 May 2024, to which Ms Scaddan annexed six documents marked ARS1 to ARS6. Ms Scaddan is also an employee of Blackwall Legal. In summary, Ms Scaddan deposed to notice of the hearing of the application having been given to various interested parties.The fifth was the second affidavit made by Mr Shepherd. Mr Shepherd's second affidavit was sworn on 24 May 2024, to which he attached one document marked JRS2, which recorded the consent of Infinity Metals Group Pty Ltd to the application.
A written outline of submissions was also filed on 23 May 2024 in support of the application.
Background
Gold Valley Holdings is a part of a corporate group with mining operations in Western Australia, Queensland, New Zealand, the Northern Territory and the Philippines. It was established to be the ultimate holding company of a number of subsidiaries which held assets relating to the mining industry including shares, mining tenements, properties, a processing plant, equipment and mining rights. Gold Valley Holdings also undertook a treasury function for a number of these entities by raising equity; raising debt; funding operations of subsidiaries; funding acquisitions; providing security; dealing with secured parties; and acquiring subsidiaries.
On 28 May 2019, TransAsia Private Capital Limited provided to Gold Valley Holdings a US$14 million loan, and Gold Valley Holdings provided to AMAL Security Services Pty Ltd, as security trustee, various assets as security under a security agreement.
On 2 February 2021, TransAsia Private Capital Limited (through AMAL Security Services Pty Ltd, the security trustee) took control of certain assets of Gold Valley Holdings pursuant to security interests registered on the Personal Property Securities Register.
On 26 May 2021, Messrs Tucker and Bumbak were appointed as joint and several administrators of Gold Valley Holdings. On appointment, they assumed control of Gold Valley Holdings' operations and assets, excluding those controlled by TransAsia Private Capital Limited.
At the time of Messrs Tucker and Bumbak's appointment as administrators, Mr Yuzheng Xie was a director of Gold Valley Holdings. While acting as a director of Gold Valley Holdings, Mr Xie was also a director of Xie Corporation Pty Ltd and LSG Resources Pty Ltd (together the Xie related entities). Xie Corporation Pty Ltd is the sole shareholder of Gold Valley Holdings, which along with Gold Valley Holdings, is part of a group ultimately controlled by Mr Xie.
Between 16 June 2017 and 9 November 2020, Mr Steven Parnell was a director of Gold Valley Holdings. While acting as a director of Gold Valley Holdings, Mr Parnell was also a director of Black Range Mining Pty Ltd; Infinity Metals Group Pty Ltd; Eureka Holdings (WA) Pty Ltd; Mine Builder Pty Ltd; and Northgate Resources Pty Ltd (together the Parnell related entities). Mr Parnell was also a shareholder of Gold Valley Holdings. His shares in Gold Valley Holdings were transferred to Xie Corporation Pty Ltd as part of an arrangement for him to exit the business.
On two occasions, Messrs Tucker and Bumbak successfully applied to the court to extend the timeframe within which the administrators were required to issue their report to creditors and to convene the second creditors' meeting. By the second application, orders were made extending the convening period to 24 June 2022.
Examinations
On 4 February 2022, by a proceeding known as COR 18 of 2022, Messrs Tucker and Bumbak applied to conduct examinations with respect to a transaction that Gold Valley Holdings had entered into with TransAsia Private Capital Limited.
On 27 April 2022 and 19 May 2022, Messrs Tucker and Bumbak issued a letter to:
(a)Mr Xie setting out various claims alleged against Mr Xie and the Xie related entities; and
(b)Mr Parnell setting out various claims alleged against Mr Parnell and the Parnell related entities.
Report to creditors and the appointment of the liquidators
On 24 June 2022, Messrs Tucker and Bumbak issued a report to creditors under s 439A of the Corporations Act which, amongst other things, detailed their investigations into claims against the potential defendants. As was noted in that report, the investigations undertaken had focused on breaches of duty and other offences under the Corporations Act by the director (Mr Xie) and former director (Mr Parnell) of Gold Valley Holdings; the pre‑appointment transfer of assets to related parties; pre-appointment novations of related party loans; pre‑appointment payments made to third parties; and an insolvent trading claim against the director. The administrators' recommendation was that it would be in the creditors' interests for Gold Valley Holdings to be wound up.
At the second meeting of creditors held on 1 July 2022, the creditors resolved to wind-up Gold Valley Holdings; and Messrs Tucker and Bumbak were appointed joint and several liquidators of Gold Valley Holdings.
Ongoing investigations
Mr Tucker deposed that the investigations undertaken had indicated that Gold Valley Holdings was likely to have been insolvent from at least 30 May 2020. Mr Tucker also deposed that as part of the external administration of Gold Valley Holdings, the liquidators had undertaken and were continuing to undertake investigations in relation to a number of claims that Gold Valley Holdings may have against third parties. On 30 September 2022, the liquidators issued a report to creditors which, amongst other things, detailed the further investigations undertaken with respect to claims against the potential defendants.
In his first affidavit, Mr Tucker described the claims that Gold Valley Holdings may have against the potential defendants, which the liquidators sought to preserve by the application for an extension of time. That is, claims against:
(a)TranAsia Private Capital Limited (at pars 39 - 47);
(b)Mr Xie (at pars 48 -50 and pars 51 - 57);
(c)Xie Corporation Pty Ltd (at pars 62 - 67);
(d)Xie Corporation Pty Ltd and Infinity Metals Group Pty Ltd (at pars 68 - 74);
(e)Xie Corporation Pty Ltd and LSG Resources Pty Ltd (at pars 75 ‑ 79);
(f)Mr Parnell (at pars 80 ‑ 83 and pars 100 ‑ 106);
(g)Black Range Mining Pty Ltd (at pars 84 - 93);
(h)Infinity Metals Group Pty Ltd (at pars 94 - 99); and
(i)Black Range Mining Pty Ltd, Infinity Metals Group Pty Ltd, Eureka Holdings (WA) Pty Ltd, Mine Builder Pty Ltd and Northgate Resources Pty Ltd (at pars 100 ‑ 106).
Global settlement involving TransAsia, Mr Xie and the Xie related entities
Mr Tucker deposed that he was aware that a number of parties associated with Gold Valley Holdings had been in discussions for a period of at least eight months in an effort to resolve the issues between them and to determine the future of Gold Valley Holdings. As the parties had had commercial dealings with each other that extended beyond the affairs of Gold Valley Holdings, the discussions had included matters extraneous to its affairs.
A settlement deed was executed on 17 May 2024, the parties to which were Gold Valley Investment Pty Ltd; Xie Corporation Pty Ltd; TransAsia Private Capital Security Agent Ltd; TransAsia Private Capital Limited; Tennant Consolidated Mining Group Pty Ltd; Peter Robert Main; Mr Xie; and Gecko Mining Company Pty Ltd (the Settlement Deed). Neither Gold Valley Holdings nor the liquidators are parties to the Settlement Deed.
Among other things, the Settlement Deed contemplates that:
(a)Gold Valley Holdings will be placed back into voluntary administration to allow a deed of company arrangement to be proposed;
(b)TransAsia Private Capital Limited will vote in favour of the deed of company arrangement;
(c)TransAsia Private Capital Limited will not receive any return under the deed of company arrangement and will agree to release the security granted to it by Gold Valley Holdings; and
(d)following effectuation of the deed of company arrangement, control of Gold Valley Holdings will be returned to its director, Mr Xie.
Mr Tucker deposed that he has participated in discussions with the parties to the Settlement Deed in relation to its subject matter, including the potential willingness of Messrs Tucker and Bumbak to be appointed as external administrators of various companies, to give effect to the terms of the Settlement Deed.
Completion under the Settlement Deed
Mr Tucker deposed that there was some completion risk with the Settlement Deed. He also noted that if completion was to occur and control of Gold Valley Holdings was returned to Mr Xie, the liquidators would be unable to pursue claims against the potential defendants that were subject to the limitation in s 588FF(3) of the Corporations Act (that is, the claims sought to be preserved by this application).
Mr Tucker deposed that accordingly, the liquidators had been reluctant to incur the costs associated with instituting proceedings against the potential defendants to pursue the claims in circumstances where the claims would not be able to be pursued if the steps contemplated by the Settlement Deed were taken.
Decision to defer the commencement of proceedings
Mr Tucker described in his first affidavit the matters that he weighed in the balance when deciding whether to commence proceedings against the potential defendants. Among other things, he deposed at par 28 that while it was difficult to speculate as to whether the Settlement Deed would successfully complete, it had been necessary for him to turn his mind to that matter to weigh the prejudice to Gold Valley Holdings of incurring costs in pursuit of claims that it and the liquidators may not be able to pursue after effectuation of the proposed deed of company arrangement; and the associated risk that the deed of company arrangement proposal may fail or not proceed, and Gold Valley Holdings and the liquidators may, in the meantime, have lost the ability to pursue the claims against the potential defendants due to the expiry of the relevant limitation period.
He deposed that the liquidators had formed the view that:
(a)instituting proceedings to pursue all of the claims would be a significant burden on Gold Valley Holdings, and it would be preferable to avoid that in circumstances where the Settlement Deed had been executed;
(b)it would be imprudent to allow the period of time contemplated by s 588FF(3) of the Corporations Act to pass without seeking an extension of the period to preserve the claims; and
(c)if the liquidators' application was not successful, it may be necessary for the liquidators to institute proceedings against some or all of the potential defendants, notwithstanding the undesirability of that course of action for the reasons referred to in paragraph (a) above.
Urgency
As Messrs Tucker and Bumbak were appointed as administrators to Gold Valley Holdings on 26 May 2021 in circumstances where there was no winding up application on foot, absent a court order, proceedings pursuant to s 588FF(1) of the Corporations Act had to be commenced by 26 May 2024. This application, filed on 21 May 2024, therefore required an urgent hearing.
Position of the potential defendants
Although the application was made ex parte, the potential defendants consented to the primary relief sought by the liquidators, and all had been given notice of the application. No potential defendant sought to be heard.
Applicable principles
Section 588FF(1) of the Corporations Act provides that where, on the application of a company's liquidator, a court is satisfied that a transaction of the company is voidable because of s 588FE, the court may make one or more of the orders specified in sub‑sections (a) to (j) of s 588FF(1). A time limit on the making of an application to the court under s 588FF(1) is prescribed by s 588FF(3), which provides as follows:
(3) An application under subsection (1) may only be made:
(a)during the period beginning on the relation-back day and ending:
(i)3 years after the relation-back day; or
(ii)12 months after the first appointment of a liquidator in relation to the winding up of the company;
whichever is the later; or
(b)within such longer period as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period.
The bringing of an application within the time required by s 588FF(3)(a) or (b) is a precondition to the court's jurisdiction under s 588FF(1).[2]
[2] Grant Samuel Corporate Finance Pty Ltd v Fletcher [2015] HCA 8; (2015) 254 CLR 477 [17].
The principles to be considered when asked to extend time under s 588FF(3)(b) of the Corporations Act are well settled. The general approach of a court in exercising the discretion under s 588FF(3)(b) of the Corporations Act is to examine what is fair and just in all of the circumstances.[3] Further, a liquidator must satisfy the court positively that the extension of time sought should be granted.[4]
[3] BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322 [187], cited with approval by the Court of Appeal in 89 Burswood Road Pty Ltd v William James Harris and Robert Michael Kirman as joint and several liquidators of GH1 Pty Ltd (in liquidation) (ACN 099 191 714) [2021] WASCA 178 [16].
[4] BP Australia Ltd v Brown [183], again cited with approval by the Court of Appeal in 89 Burswood Road Pty Ltd v William James Harris and Robert Michael Kirman as joint and several liquidators of GH1 Pty Ltd (in liquidation) (ACN 099 191 714) [17].
Section 588FF(3) reflects a balancing of competing interests as between the general body of creditors and those who have had previous dealings with the company.[5] It does not specify any factors or considerations which confine the court's discretionary power to extend time, nor does it state that an extension of time should not be granted unless the extension is required to enable a liquidator to decide whether to commence proceedings under s 588FF(1).[6]
[5] Sydney Recycling Park Pty Ltd v Cardinal Group Pty Ltd (in liq) [2016] NSWCA 329 [144].
[6] As observed by the Court of Appeal in 89 Burswood Road Pty Ltd v William James Harris and Robert Michael Kirman as joint and several liquidators of GH1 Pty Ltd (in liquidation) (ACN 099 191 714) [66].
In considering whether or not to grant the extension of time sought by a liquidator, the court will usually take into account three matters. First, the court must consider the explanation for the delay in commencing the proposed proceedings within the three year period provided for by the statute. Secondly, it is necessary, subject to what follows, for the court to undertake a preliminary review of the merits of the proposed proceeding. Thirdly, the court must consider any prejudice likely to be suffered in the event the extension sought is granted.[7]
[7] Walker and Moloney v CBA Corporate Services (NSW) Pty Limited [2012] FCA 328 [43]; Marsden (liquidator) v CVS Lane PV Pty Ltd, In the matter of Pentridge Village Pty Ltd (in liq) (receiver and manager apptd) (controller appointed) [2018] FCA 102; (2018) 124 ACSR 100 [54] - [55].
Importantly, a review of the merits may be unnecessary if the purpose of the application for an extension of time is to allow the liquidator time in which to properly decide whether or not to bring the proposed proceeding.[8]
[8] See Green v Chiswell Furniture Pty Ltd (in liq) [1999] NSWSC 608 [15].
While an extension order under s 588FF(3)(b) will generally specify the transactions and persons in respect of which it is made, it is now clear that where a liquidator cannot by the end of the three year period identify all transactions and parties to be pursued under s 588FF, the court can grant 'an extension in general terms without notice or reference to any particular or identified defendant or any particular
s 588FF(1) transaction' - that is, a 'shelf order'.[9][9] Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2015] HCA 10; (2015) 254 CLR 489 [26] ‑ [27]; Robert Michael Kirkman as liquidator of ACN 142 745 337 (in liq) [2020] WASC 129 [10].
Disposition
By s 588FF(3) of the Corporations Act, an application under s 588FF(1) may only be made during the period specified in s 588FF(3)(a), or within such longer period as the court orders on an application under s 588FF(3)(b) made by the liquidator during the period prescribed by s 588FF(3)(a).
As noted above, Messrs Tucker and Bumbak were appointed as administrators to Gold Valley Holdings on 26 May 2021 in circumstances where there was no winding up application on foot. Absent a court order, an application under s 588FF(1) of the Corporations Act had to be made by 26 May 2024. This application was filed on 21 May 2024 and heard on 24 May 2024. I was therefore satisfied that the application to extend time was made within time.
Explanation for the delay
I weighed in the balance the proffered explanation for delay, cognisant of the relevance of delay to assessing what is fair and just in all of the circumstances. That is, I proceeded cognisant of the public policy underlying the imposition of limitation periods generally and in relation to s 588FF(3)(b) in particular.[10]
[10] Parker, In the matter of Worldwide Specialty Property Services Pty Ltd (in liq) v Worldwide Specialty Property Services Pty Ltd (in liq) [2017] FCA 687 [19], summarising the principles that emerged from the cases and statements about delay collected and discussed in Re Clarecastle Pty Ltd (in liq)(2011) 255 FLR 435 [129] ‑ [142].
As to the explanation proffered for the delay, Mr Tucker deposed to the circumstances which informed the liquidators' decision not to commence proceedings against the potential defendants within the timeframe prescribed by the Corporations Act, and the matters that were weighed in the balance when making that decision. Among other things, he deposed to having turned his mind to the prejudice that Gold Valley Holdings may suffer if proceedings were commenced against the potential defendants, and the costs incurred in doing so, to pursue claims that the liquidators would cease to be able to pursue if Gold Valley Holdings were to cease to be in liquidation but became subject to a deed of company arrangement, as contemplated by the Settlement Deed.
The explanation for the delay was a cogent one and I was satisfied that the liquidators had demonstrated adequate reasons for the delay in commencing proceedings pursuant to s 588FF(1) of the Corporations Act.
Preliminary review of the merits of the proposed proceedings
As was observed by counsel, this was not a case in which the purpose of the application for an extension of time was to allow the liquidators time in which to properly decide whether or not to bring proceedings against the potential defendants. Indeed, the court was informed that the liquidators considered that they had strong claims against the potential defendants,[11] which view had been formed after significant investigations had been undertaken (which had included public examinations).
[11] Submissions filed in support of the application on 23 May 2024 par 30; ts 11 (24 May 2024).
It was therefore possible, and appropriate, in this case to undertake a preliminary review of the merits of the proposed proceedings. In doing so, I proceeded on the basis that it was not necessary for the court to make findings, to undertake a preliminary trial, or to attempt to forecast the ultimate result of the proposed proceedings. The phrase 'preliminary review of the merits' involves considerably less.[12]
[12] Matthew David Woods as joint and several liquidator of Brierty Limited (ACN 095 459 448) (In Liquidation) [2022] WASC 310 [23], citing Green v Chiswell Furniture Pty Ltd (in liq) [1999] NSWSC 608 [15]. See also Mohen as Liquidator of MBP (WA) Pty Ltd [2023] WASC 81 [13].
In his first affidavit, Mr Tucker described the claims that Gold Valley Holdings may have against the potential defendants. The matters deposed to there were sufficient for the court to undertake a preliminary review of the merits of the proposed proceedings, and having had regard to the same, I formed the view (for the purposes of this application only), that the claims articulated as against the potential defendants were arguable.
Prejudice
As to prejudice, I noted that the potential defendants had consented to the extension of time sought by the liquidators. The absence of prejudice to the potential defendants was not however decisive of the application,[13] nor was it the only type of prejudice that ought be weighed in the balance. There was of course a general public interest in ensuring that litigation is brought and prosecuted in a timely fashion, which ought be weighed in the balance.
[13] BP Australia Ltd v Brown [192] ‑ [193].
I also weighed in the balance that if the requested extension of time was refused, the liquidators would be forced to make an immediate election as to whether to commence and prosecute proceedings, and would incur costs in doing so, with respect to claims that the liquidators would cease to be able to pursue if Gold Valley Holdings were to cease to be in liquidation but became subject to a deed of company arrangement, as contemplated by the Settlement Deed.
Given the consents proffered and the potential risk to creditors, I did not consider the general public interest to materially weigh against the grant of additional time, whereas I did consider the potential prejudice to creditors to be a matter that weighed in favour of the grant of additional time.
Disposition
In weighing all of these matters in the balance, I was mindful that where a liquidator is in a position to commence proceedings immediately under s 588FF(1) against a known defendant in respect of known transactions before the expiry of the limitation date, those factors will ordinarily, as a matter of fact, be significant in the court's evaluation of whether it should exercise its discretion to extend time under s 588FF(3)(b).[14]
[14] Greig v Stramit Corporation Pty Ltd [2003] QCA 298; [2004] 2 Qd R 17 [100], cited with approval by the Court of Appeal in 89 Burswood Road Pty Ltd v William James Harris and Robert Michael Kirman as joint and several liquidators of GH1 Pty Ltd (in liquidation) (ACN 099 191 714) [67].
However, in this case, the potential for any proceeding now commenced to become nugatory if Gold Valley Holdings were placed back into voluntary administration to allow a deed of company arrangement to be proposed, as is contemplated by the Settlement Deed, was a factor that weighed heavily in favour of the grant of an extension of time.
I also considered the length of the extension proposed, noting that what is either a reasonable or an unreasonable prolongation of uncertainty and the scope of such uncertainty, is appropriately considered on a case‑by‑case basis.[15]
[15] Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [24].
As the Settlement Deed provides for a 'sunset date' of 31 January 2025, I did not consider the requested extension to 16 March 2025 to be unreasonable or excessive in all of the circumstances. As was explained by counsel, that additional time would be used to complete the adjourned examinations, sign a funding arrangement and attend to the commencement of the proceedings.[16] I considered the length of extension proposed to be no more than what was reasonable in the circumstances.
[16] ts 8 (24 May 2024).
Weighing all of these matters in the balance, I considered it fair and just in all of the circumstances to grant the application.
Confidentiality
The liquidators applied for an order restricting access to the second confidential affidavit of Mr Tucker pursuant to O 67B r 5(1)(b) of the Rules of the Supreme Court on the basis that the affidavit contained information and documents that by contractual obligation, were confidential. Counsel moved for an order that no one other than the liquidators or a judge or master be permitted access to the confidential affidavit.
I was satisfied that Mr Tucker's second affidavit contained confidential information, and that it was appropriate to restrict access to it. I made an order pursuant to O 67B r 5(3) of the Rules of the Supreme Court restricting access to the affidavit.[17]
[17] See sch A to these reasons, order 2.
Conclusion and orders
A liquidator must satisfy the court positively that the extension of time sought under s 588FF(3)(b) should be granted.[18] In all of the circumstances of this case, I was positively satisfied that the justice of the case favoured the making of an order extending time, and that it was appropriate to exercise the discretion under s 588FF(3) of the Corporations Act to grant the liquidators' application.
[18] BP Australia Ltd v Brown [183].
Further, I was satisfied that confidential information was disclosed in Mr Tucker's second affidavit sworn on 21 May 2024, and that it was appropriate to restrict access to that document.
Finally, as to the costs of the application, there was no basis on the evidence to conclude that the liquidators ought to personally bear the costs of the application, and I considered it appropriate that the costs of and incidental to the application be costs in the winding up of Gold Valley Holdings.
Sch A - Orders made on 24 May 2024
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KO
Associate to the Honourable Justice Strk
20 AUGUST 2024
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