Kimberley Stuart Wallman as Liquidator of Graffiti Holdings Pty Ltd (in Liq) v Milestone Enterprises Pty Ltd

This case involved an application by the defendant, Milestone Enterprises Pty Ltd, to set aside an ex parte order extending the time within which the plaintiff, Kimberley Stuart Wallman as liquidator of Graffiti Holdings Pty Ltd (in Liq), could make an application under section 588FF(1) of the Corporations Act 2001 (Cth). The court had to decide whether the ex parte order should be set aside and if the application was fully disposed of if the ex parte order was set aside or if it remained on foot. The court also had to consider the considerations on an application to extend time.

The court held that the ex parte order should not be set aside as it was made with the defendant's right to apply to set it aside reserved. The application was adjourned for further hearing to allow the defendant to be heard, following service of the papers. The court held that the defendant was, for all relevant purposes, in the same position as it would have been in had it been present to make submissions on 4 August 2006. The court also held that if the order were set aside on the ground that the defendant had not been given an opportunity to be heard, the plaintiff's application would remain on foot and it would be necessary to deal with the substance of the application.

On the question of the merits of the application, the court held that the plaintiff had proper grounds for enquiring into the matter and should not be precluded from doing so. The court held that there were matters which warranted further investigation and at this stage it did not consider that the contemplated proceeding could be regarded as so devoid of prospects that it would be unfair, by granting the extension, to expose the defendant to the continuing prospect of suit.

The court granted an extension of time for a period of 12 months, but restricted the terms of any order to the contract with the defendant for the construction of the seven units. The court would hear the parties on the precise form of orders and on the question of costs.