In the matter of GR Capital Group Pty Ltd (In Liquidation) (Receivers and Managers Appointed)

[2025] NSWSC 834

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of GR Capital Group Pty Ltd (In Liquidation) (Receivers and Managers Appointed) [2025] NSWSC 834

Hearing dates:

21 July 2025

Date of orders:

21 July 2025

Decision date:

21 July 2025

Jurisdiction:

Equity - Corporations List

Before:

Nixon J

Decision:

1. An order pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth), the time under s 588FF(3)(a) within which the plaintiffs may bring applications under s 588FF(1) be extended by 6 months to 21 December 2025.

2. An order pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), on the ground that such order is necessary to prevent prejudice to the proper administration of justice, that, until further order of the Court, pages 377-385, 819-931 and 975-981 (inclusive) of the exhibit marked Exhibit JLP-1 to the affidavit of Jason Lloyd Porter sworn on 20 June 2025 be marked confidential and not made available to any person other than the plaintiffs, their legal representatives, or a Judge of this Court, and that those pages of the exhibit be placed in the Court’s file in a sealed envelope marked “Confidential Exhibit not to be provided to any person other than the plaintiffs, their legal representatives, or a Judge of this Court”.

3. The plaintiffs’ costs of this application be costs in the liquidation of the second plaintiff.

4. There be liberty to apply to any person who can demonstrate sufficient interest to modify Order 2 on not less than 3 days’ notice to the Plaintiffs.

Catchwords:

CORPORATIONS – Application for leave pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth) extending the time to bring voidable transaction claims – where delay caused by complexity of liquidation – where liquidator’s investigations incomplete – extension granted

Legislation Cited:

Corporations Act 2001 (Cth) ss 445D, 446AA, 530B, 588FF

Court Suppression and Non-publication Orders Act 2010 (NSW) s 7

Cases Cited:

BP Australia Ltd v Brown (2013) 58 NSWLR 322; [2003] NSWCA 216

Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489; [2015] HCA 10

Gordon v Tolcher (2006) 231 CLR 334; [2006] HCA 62

Green v Chiswell Furniture Pty Ltd (in liq) [1999] NSWSC 608

New Cap Reinsurance Corp Ltd (in liq) v Reaseguros Alianza SA [2004] NSWSC 787

Re Octaviar Pty Ltd [2012] NSWSC 1460

Yan v The Won Capital Pty Ltd [2024] NSWSC 758

Category:

Principal judgment

Parties:

Jason Lloyd Porter in his capacity as liquidator of GR Capital Group Pty Ltd (In Liquidation) (Receivers and Managers Appointed) (First Plaintiff)
GR Capital Group Pty Ltd (In Liquidation) (Receivers and Managers Appointed) (Second Plaintiff)

Representation:

Counsel:
J Pokoney

Solicitors:
Mills Oakley (Plaintiffs)

File Number(s):

2025/235872

Publication restriction:

Nil

REVISED EX TEMPORE JUDGMENT – 21 JULY 2025

1. By Originating Process filed on 20 June 2025, the First Plaintiff, Mr Jason Porter in his capacity as Liquidator of the Second Plaintiff, GR Capital Group Pty Ltd (Company), seeks an order pursuant to section 588FF(3)(b) of the Corporations Act 2001 (Cth) (Act), extending the time within which the Plaintiffs may bring any application under s 588FF(1) by six months, to 21 December 2025.

2. The relation-back day is 18 October 2018. The Liquidator was appointed on 21 June 2024.

3. Pursuant to s 588FF(3) of the Act, any application under s 588FF(1) may only be made:

1. during the period beginning on the relation-back day and ending on the later of:

1. 3 years after the relation-back day (that is, 18 October 2021); or

2. 12 months after the first appointment of a liquidator in relation to the winding up of the Company (that is, 21 June 2025); or

2. within such longer period as the court orders on an application under s 588FF(3)(b) which is made by the Liquidator during the period set out in paragraph (a) above.

4. As the application for an extension pursuant to s 588FF(3)(b) was filed on 20 June 2025, it has been brought within time.

5. For the reasons set out below, I have concluded that the extension should be granted.

6. Factual Background

7. The Company was incorporated in December 2013. At that time, Mr Wensheng Liu was its sole director and shareholder.

8. The principal activity of the Company was the development of an eleven-storey residential building located at 1-5 Treacy Street, Hurstville, NSW, which was known as “The One” (the Development).

9. The Company was part of a corporate group which included The One Capital Group Pty Ltd and The Won Capital Pty Ltd. Mr Liu was the director of each of those entities from the time of their incorporation.

10. In October 2014, the Company lodged a development application with Hurstville City Council for the Development. The circumstances surrounding the granting of this development application have been the subject of an investigation by the Independent Commission against Corruption (ICAC). It is unnecessary to address the scope of that investigation, or the findings made for the purposes of this application.

11. In November 2014, the Company made an electronic payment from its bank account with National Australia Bank (NAB) to WDL International Investments Pty Ltd in the sum of $400,035, with the transaction description “Treacy DA Return to Wdl Internation In”. The director and shareholder of WDL is Ms Lan Liu, who is Mr Liu’s wife.

12. In early 2016, the Company entered into a building contract with Gencorp Pty Ltd in relation to the Development for a fixed price of $31m. The sole director of Gencorp was Mr Ching Wah (Phillip) Uy. The proposed commencement date for the Development was 26 February 2016 and it was expected to be complete in October 2017.

13. In June 2016, The One Capital Group entered into a $10m facility agreement with Xinfeng Australia International Investment Pty Ltd. The Company appears to have guaranteed the obligations of The One Capital Group under that agreement.

14. On 6 June 2016, Ms Liu became a director of the Company.

15. In June 2017, the Company entered into two further facility agreements:

1. a loan agreement with WDL for a sum of $3m; and

2. a loan agreement with Everest Private Pty Ltd, for loans in excess of $27.5m.

16. On 1 December 2017, the Xinfeng facility fell due for repayment, resulting in recovery proceedings in this Court.

17. The Development remained incomplete at that time as a result of various matters which are unnecessary to address for present purposes.

18. Having regard to the liability of the Company under the facility agreements referred to at paragraphs [12] and [14] above, the Liquidator has formed the view that the Company was insolvent from at least 30 December 2017.

19. Between 17 April and 5 September 2018, the Company made payments to its creditors which total $2,591,940.62, as follows:

1. $342,973.89, by “Bpay” from the Company’s NAB account to Citibank, with the description “Citibank Creditcards”, apparently in reduction of credit card debt owing by the Company;

2. $1,698,966.73 by cheque from the Company’s CBA account to Gencorp;

3. $50,000 by way of electronic transfer from the Company’s NAB account to Mr Uy; and

4. $500,000 to Mr Jianhua Yan by way of:

1. a cheque for $350,000 from the Company’s CBA account to Mr Yan, and

2. a sum of $150,000 by way of electronic transfer from the Company’s NAB account to The One Capital Group, which was then forwarded to Mr Yan by cheque.

20. In addition, on 28 June 2018, The One Capital Group made a payment of $100,000 to Dragon Throne Pty Ltd, an entity of which Mr Uy is the sole director. The Liquidator has also been appointed as liquidator of The One Capital Group. One of the matters which the Liquidator is continuing to investigate is whether this payment by The One Capital Group to Dragon Throne was made on behalf of the Company.

21. I will refer to each of the payments set out above as the Relevant Payments.

22. On 18 October 2018, the Company was placed into voluntary administration with Mr Peter Krejci and Mr Brian Silvia of BRI Ferrier being appointed as administrators.

23. On 26 October 2018, Everest appointed receivers and managers to the Company (Receivers).

24. In February 2019, the Company executed a “holding” Deed of Company Arrangement (DOCA), in order to enable the completion of the Development for the benefit of creditors. The Deed Administrator was Mr Porter.

25. The DOCA provided that its object was that the Receivers would complete the Development and sell the residential units; that Mr Porter, as Deed Administrator, would monitor the status of the Development and the sale of the units; and that upon completion of such sale, Mr Porter would convene a meeting of creditors to determine the future of the Company.

26. In late 2021, Mr Liu presented a debtor’s petition under the Bankruptcy Act 1966 (Cth).

27. The Development was subsequently completed and all units in the Development were sold by June 2024.

28. On 21 June 2024, this Court ordered that the DOCA be terminated pursuant to s 445D of the Act: Yan v The Won Capital Pty Ltd [2024] NSWSC 758 (Pike J). As a consequence, the Company was taken to have passed a special resolution for its winding up on 21 June 2024: see s 446AA(1) of the Act.

29. Since his appointment, the Liquidator has undertaken investigations into the affairs of the Company. The detail of those investigations is set out in the Liquidator’s affidavit. By way of brief overview, the Liquidator and his staff have taken the following steps.

1. The Liquidator issued notices pursuant to s 530B of the Act to the former administrators of the Company and to the trustee of the bankrupt estate of Mr Liu.

2. The Liquidator and his staff have reviewed the materials produced by the former administrators, including financial reports of the Company for the years 2015 to 2018, previous reports to creditors, bank statements for various accounts for the period 2014 to 2018, loan agreements and documentation relating to the Development.

3. The Liquidator engaged in correspondence with Mr Liu’s trustee in bankruptcy.

4. The Liquidator obtained funding for, and in October 2024 commenced, proceedings against Ms Liu for insolvent trading, seeking recovery of a sum in excess of $21m. There was some urgency in commencing those proceedings, due to the looming expiry of a limitation period. Accordingly, these proceedings were a particular focus of the Liquidator’s attention in the first few months following his appointment.

5. The Liquidator sought information from each of CBA, NAB and Westpac in relation to various bank cards, signatories and account applications in connection with the Company’s bank accounts.

6. The Liquidator identified, following a review of the Company’s bank records, a series of withdrawals, cheques or other transactions, in respect of which the Liquidator has made tracing enquiries with those banks.

7. The Liquidator received and reviewed responses to those requests in the period March to June 2025.

30. The following is the current state of matters in respect of the Liquidator’s investigations in relation to the Relevant Payments.

1. First, in June 2025, the Liquidator issued letters of demand to Citibank and Mr Uy, seeking repayment of the moneys paid to them in 2018. No response has been received from Citibank. I will address Mr Uy’s response below.

2. Secondly, the Liquidator has sought an explanation from the solicitors for Mr Yan, regarding the sum of $500,000 received by him in 2018. No such explanation has been provided to date.

3. Thirdly, the Liquidator is continuing to investigate whether, in addition to the payments of around $1.699m which were made to Gencorp by the Company in 2018, any further payments were made by The One Capital Group for or on behalf of the Company. In particular, the Liquidator is continuing to investigate the payment of $100,000 made from the bank account of The One Capital Group to Dragon Throne, including whether that payment was made on behalf of the Company.

4. Fourthly, the Liquidator is also continuing to investigate the circumstances surrounding the payment of $400,035 to WDL, including whether any benefit was obtained by the Company in consideration for that transaction.

31. The Liquidator has formed the view that he will be able to complete his investigations and commence any proceedings under s 588FF(1) by 21 December 2025. Accordingly, the Plaintiffs have brought the present application seeking that the period within which such proceedings must be brought be extended to that date.

32. Each of the persons who received the Relevant Payments has been served with this application. No response has been received from Citigroup, Mr Yan or Gencorp.

33. On 4 July 2025, Ms Liu sent, on behalf of WDL, a letter to the solicitors for the Plaintiffs in which she expressed dissatisfaction with the time taken by the Liquidator and expressed opposition to an extension, stating as follows:

“I want to say something for WDL. I don’t think court should give more time with long history and big unfairness to us. Too long has gone.”

34. Ms Liu also complained that the Liquidator had spent time on preparing his affidavit in support of this extension application, rather than on bringing claims.

35. Ms Liu, while asserting “unfairness”, did not identify any specific prejudice which would flow from the grant of a six-month extension. She asked that her letter be provided to the Court, which the Plaintiffs have done.

36. On 9 July 2025, Mr Uy sent an email to the Plaintiffs in which he stated that his bank records do not show that he received the Relevant Payment of $50,000 which is said to have been made to him.

37. Mr Uy subsequently sent further correspondence asserting that there is no evidence that the Relevant Payment made to Dragon Throne was a payment on behalf of the Company. (As noted above, this is a matter which the Liquidator is continuing to investigate.)

38. Mr Uy expressed dissatisfaction with the Liquidator’s responses to these issues and asked that his correspondence be provided to the Court (which the Plaintiffs have done). He did not otherwise identify any particular prejudice which would flow from the six-month extension that is sought by the current application.

39. Each of Ms Liu and Mr Uy has been notified of this hearing. Neither attended the hearing on 21 July 2025 in order to advance any submissions in response to the Plaintiffs’ extension application.

Relevant Principles

40. The relevant principles governing such an application are well known and were summarised in the helpful submissions of Counsel for the Plaintiffs.

41. Section 588FF(3)(b) permits the Court to make an order which extends time generally, rather than solely in relation to a particular transaction or transactions. In Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489; [2015] HCA 10, the High Court observed as follows:

”The function of s 588FF(3)(b), which reflects its immediate purpose, is to confer a discretion on the court to mitigate, in an appropriate case, the rigours of the time limits imposed by para (a). That is a discretion to be exercised having regard to the scope and purposes of Pt 5.7B, characterised in the Harmer Report as the continuing ‘policy’ which underpinned its recommendations. That policy included the avoidance of transactions by which an insolvent company has disposed of property in circumstances that are regarded by the legislature as unfair to the general body of unsecured creditors. It is, however, a policy qualified in its application by the requirement that liquidators be placed under a reasonable time limitation for taking action under the voidable transaction provisions. A purpose of that qualification, expressed in ‘clear and emphatic’ terms, is to favour certainty for those who have entered into transactions with the company during the periods in respect of which designated transactions may be voidable. There is, however, no independent basis for the assertion that any extension of time which does not identify a particular transaction or transactions must be an unreasonable prolongation of uncertainty militating against a construction which would allow such an order to be made. The section provides for the exercise of discretion by the court. Questions of what is a reasonable or an unreasonable prolongation of uncertainty and the scope of such uncertainty are more appropriately considered case-by-case in the exercise of judicial discretion than globally in judicial interpretation of the provision.”

42. The time limitations imposed by s 588FF(3) of the Act are an “essential aspect” of the voidable transactions regime: Gordon v Tolcher (2006) 231 CLR 334; [2006] HCA 62 at [40]. Those limitations recognise that the quality of justice may deteriorate where there is delay and recognise the need to place potential defendants on notice of claims which may be made against them within a reasonable time: Re Octaviar Pty Ltd (2021) 271 FLR 413; [2012] NSWSC 1460 at [64].

43. Nonetheless, the “requirement for commercial certainty on the part of those who have had past dealings with the corporation is to be balanced against the conflicting interest of the creditors of the company”: BP Australia Ltd v Brown (2003) 58 NSWLR 322; [2003] NSWCA 216 at [171] (Spigelman CJ, with Mason P and Handley JA agreeing).

44. Section 588FF(3)(b) does not prescribe any mandatory factors which must be considered or any specific criteria which must be satisfied in order for an extension to be granted. The general approach has been described as requiring an assessment of what is “fair and just in all of the circumstances”: BP Australia at [187].

45. In New Cap Reinsurance Corp Ltd (in liq) v Reaseguros Alianza SA (2004) 186 FLR 175; [2004] NSWSC 787 at [52], White J observed that an application under s 588FF(3)(b) would ordinarily require:

1. an explanation for the delay;

2. a preliminary view of the merits of the proposed proceedings, as to whether they are “so devoid of prospects that it would be unfair, by granting an extension, to expose the other party to the continuing prospect of suit”; and

3. an assessment of whether any likely actual prejudice resulting from the grant of an extension is sufficient substantially to outweigh the case for granting an extension.

46. As regards the second of those matters, where the liquidator’s purpose in seeking the extension of time is to put the liquidator into a position where he or she can properly decide whether or not to bring proceedings, a preliminary inquiry into the merits of any consequent proceedings may not always be necessary: Green v Chiswell Furniture Pty Ltd (in liq) [1999] NSWSC 608 at [15] (Austin J).

Determination

47. Having regard to the evidence before the Court on this application and the submissions of the Plaintiffs, I am satisfied that it is fair and just, in all the circumstances of this case, for the extension that is sought to be granted.

48. First, the Liquidator has provided an explanation as to why proceedings under s 588FF(1) have not been commenced within the 12 months since his appointment.

49. I am satisfied that the Liquidator has, since his appointment, diligently taken steps to investigate the affairs of the Company in this period, which are outlined in his affidavit. However, the work of the Liquidator and his staff has been hampered by the lack of reliable books and records of the Company. In the course of his investigations, the Liquidator has needed to make enquiries of various third parties, including banks, and has not had control over the time taken by those third parties to respond to such requests.

50. Secondly, in circumstances where the extension of time is sought in order for the Liquidator to put himself into a position where he can properly decide whether or not to bring proceedings, it may not be necessary to undertake a review of the merits of any such claim. That is particularly the case where the Liquidator is seeking time to investigate the circumstances surrounding various payments, including whether they were made on behalf of the Company or (in the case of the payment of $400,035 to WDL) whether the Company received any benefit as a result of any such payment being made.

47. Nonetheless, insofar as potential claims have been identified (leading to the demands made to, for example, Citibank and Mr Uy), the material before the Court does not indicate that those claims are “so devoid of prospects that it would be unfair, by granting an extension, to expose the other party to the continuing prospect of suit” (New Cap Reinsurance at [52]). For example, it appears from the evidence before the Court that each of the payments to Citibank and Mr Uy was a payment within the six months prior to the relation-back date, which was made to a person who was not a secured creditor and which (in light of the Liquidator’s view that the Company was insolvent from at least 30 November 2017) was made at a time when the Company was insolvent. It also appears that, by the payment, each of Citibank and Mr Uy has received more than they would have received if these transactions were set aside and they proved in the liquidation of the Company. In this regard, the Liquidator’s report of September 2024 indicates that the Company has negligible assets and more than $95m of liabilities.

48. Thirdly, there is no evidence of any specific prejudice which would be occasioned as a result of such an extension. Although there is a degree of presumptive prejudice arising from any application for an extension, I do not consider that such prejudice, from an extension of six months, would substantially outweigh the case for granting an extension.

Application under CSNPO Act

53. The Plaintiffs sought an order pursuant to s 7 of the Court Suppression and Non-Publication Orders Act 2010 (NSW) that the exhibit to the Liquidator’s affidavit not be made available to any person other than the Plaintiffs, their legal representatives or a Judge of this Court. The Plaintiffs did not seek such an order in relation to the whole or any part of the affidavit itself.

54. I was not satisfied that such an order should be made in respect of the whole of the contents of the exhibit to the Liquidator’s affidavit. A large number of the documents in the exhibit have no particular sensitivity, and many are publicly available. For example, the exhibit includes company searches, the DOCA, court orders and reports to creditors.

55. I indicated that the Plaintiffs should identify any specific material in the exhibit which would, if disclosed, cause prejudice to their investigations or otherwise prejudice the proper administration of justice. Counsel for the Plaintiffs subsequently identified a limited number of pages of the exhibit which, if disclosed, would potentially prejudice the Liquidator’s investigations or which contain confidential information of third parties. It has been necessary for the Liquidator to put this confidential material before the Court in order to provide the Court with an explanation of the steps taken to date and the information that has been gathered as a result of those investigations. I am satisfied that it would prejudice the proper administration of justice for this material to become publicly available as a result of being put before the Court in such circumstances. I will accordingly make an order in respect of those specific parts of the exhibit.

56. I will grant liberty to any person who can demonstrate sufficient interest to apply to modify such order on not less than three days’ notice to the Plaintiffs.

ORDERS

57. For those reasons, I make the following orders.

1. An order pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth), the time under s 588FF(3)(a) within which the plaintiffs may bring applications under s 588FF(1) be extended by 6 months to 21 December 2025.

2. An order pursuant to s 7 of the Court Suppression and Non-publication Orders Act 2010 (NSW), on the ground that such order is necessary to prevent prejudice to the proper administration of justice, that, until further order of the Court, pages 377-385, 819-931 and 975-981 (inclusive) of the exhibit marked Exhibit JLP-1 to the affidavit of Jason Lloyd Porter sworn on 20 June 2025 be marked confidential and not made available to any person other than the plaintiffs, their legal representatives, or a Judge of this Court, and that those pages of the exhibit be placed in the Court’s file in a sealed envelope marked “Confidential Exhibit not to be provided to any person other than the plaintiffs, their legal representatives, or a Judge of this Court”.

3. The plaintiffs’ costs of this application be costs in the liquidation of the second plaintiff.

4. There be liberty to apply to any person who can demonstrate sufficient interest to modify Order 2 on not less than 3 days’ notice to the Plaintiffs.

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Decision last updated: 28 July 2025