JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: NIPPS -v- FEATHERBY [No 2] [2024] WASC 236
CORAM: HILL J
HEARD: 26 JUNE 2024
DELIVERED : 26 JUNE 2024
PUBLISHED : 28 JUNE 2024
FILE NO/S: COR 161 of 2023
BETWEEN: JEREMY JOSEPH NIPPS
Plaintiff
AND
NATHAN JOHN FEATHERBY
First Defendant
SAXON TRAVIS BALL
Second Defendant
MICHAEL RUSSELL DELIU
Third Defendant
MADE SUMARYA
Fourth Defendant
NUEVO ROYALTY LIMITED
Fifth Defendant
MICHAEL GEORGE FREDERICK POVEY
Sixth Defendant
CHARLES DAVID ROSS STRAW
Seventh Defendant
Catchwords:
Corporations law - Application for extension of time under s 588FF(3)(b) of the Corporations Act 2001 (Cth) - Extension sought to allow liquidator further time to consider whether to commence proceedings against the defendants - Whether shelf order appropriate - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 588FF(1), s 588FF(3)(a), s 588FF(3)(b)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | R Young SC |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
| Fourth Defendant | : | No appearance |
| Fifth Defendant | : | No appearance |
| Sixth Defendant | : | No appearance |
| Seventh Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Mills Oakley |
| First Defendant | : | In person |
| Second Defendant | : | In person |
| Third Defendant | : | In person |
| Fourth Defendant | : | In person |
| Fifth Defendant | : | Hall & Wilcox (Perth) |
| Sixth Defendant | : | Hall & Wilcox (Perth) |
| Seventh Defendant | : | Hall & Wilcox (Perth) |
Cases referred to in decision:
BP Australia Ltd v Brown & Ors [2003] NSWCA 216
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541
Cussen, in the matter of Monarch Towers Pty Ltd (in liquidation) [2023] FCA 192
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
Griffiths v Nillumbik Shire Council [2022] VSCA 212
Matthew David Woods as joint and several liquidator of Brierty Limited (In Liquidation) [2022] WASC 310
Mohen as Liquidator of MBP (WA) Pty Ltd [2023] WASC 81
Nipps (Liquidator), in the matter of Ochre Group Holdings Limited (in liq) (No 3) [2023] FCA 1404
Onefone Australia Pty Ltd v One.Tel [2007] NSWSC 268
Walker and Moloney v CBA Corporate Services (NSW) Pty Limited [2012] FCA 328
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript).
The plaintiff was appointed as liquidator of Ochre Group Holdings Ltd (Ochre) on 14 October 2020 pursuant to a resolution of members.[1] On this basis, the deadline for the commencement of any actions or proceedings under s 588FE of the Corporations Act 2001 (Cth) (Act) was 14 October 2023.
[1] Affidavit of Jeremy Joseph Nipps filed 13 October 2023, 'JJN-1'.
On 13 October 2023, the plaintiff filed an originating process seeking orders pursuant to s 588F(3)(b) of the Act to extend the time for making an application under s 588FF(1) of…
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- AGLC
- Nipps v Featherby [No 2] [2024] WASC 236
- Case
- [2024] WASC 236
- Decision Date
CaseChat Overview and Summary
The legal issues before the court included the court's discretion to grant an extension of time under section 588FF(3)(b) of the Corporations Act 2001 (Cth), including the power to make a 'shelf order' without specifying particular transactions. The court also considered whether the application was brought within the three-year period and the factors that the court must take into account in exercising its discretion. These factors include the reasons for the delay in bringing the application, the complexity of the liquidation, and the resources devoted to other matters.
The court found that the application was brought within the statutory period, and the power to grant an extension of time, including a shelf order, is at the discretion of the court. The court took into account the reasons for the delay, including significant difficulties in obtaining the books and records of the company, the absence of any statement of Ochre's financial position after a draft financial report of 2017, and the absence of books and records adding to the complexity of the liquidation. The court also noted that the liquidator had devoted significant resources to an application to remove him as liquidator of Ochre and had filed proceedings in the Federal Court to examine a number of people, including each of the first to fourth, sixth, and seventh defendants.
The court concluded that the application for an extension of time was brought within the three-year period specified by the Act, and the court had the power to grant an order extending the time period. The court also found that the application was brought within the statutory period, and the three factors that the court must take into account in considering whether or not to exercise its discretion favoured the grant of an extension of time. The court granted the liquidator's application for an extension of time to consider whether to commence proceedings against the defendants.
The court made an order extending the time period for the liquidator to consider whether to commence proceedings against the defendants. The order specified that the liquidator had until 13 October 2024 to consider whether to commence proceedings against the defendants. The court also noted that the liquidator had until 29 July 2024 to examine the sixth and seventh defendants and had obtained arrest warrants for Mr Featherby and Mr Sumarya.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
There is no question that the court has power make an order extending time without specifying the particular transaction or transactions to which it would apply, which is commonly known as a 'shelf order'.[9] The plurality of the High Court in Fortress Credit Corporation explained the policy which underpins the provision and their conclusion in relation to the power to make such orders at [24] and [27] of their reasons. [9] Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2015] HCA 10; (2015) 254 CLR 489, 496 [3], [27] (French CJ, Hayne, Kiefel, Gageler and Keane JJ). As with any order under s 588FF(3)(b) of the Act, the power to make an order, including a shelf order, is at the discretion of the court.[10][10] Cussen, in the matter of Monarch Towers Pty Ltd (in liquidation) [2023] FCA 192 [16] (O'Callaghan J). In this case, I am satisfied on the evidence before me that the application for an extension of time was brought within the three year period specified by the Act. This requirement required any proceedings to be commenced by 14 October 2023. The originating process was filed on 13 October 2023. Where an application is brought within time, the court has power to grant an order extending the time period, notwithstanding the fact that the three year time limit has since expired.[11][11] Onefone Australia Pty Ltd v One.Tel [2007] NSWSC 268 [36]. I turn then to the three factors that the court must take into account in considering whether or not to exercise its discretion. I summarise these and my views in relation to them as follows. Senior counsel for the plaintiff emphasised at the hearing before me that this is a complex liquidation. The evidence of the plaintiff is that there are, essentially, five primary reasons for the delay. First, he has had significant difficulties in obtaining the books and records of the company, despite numerous requests having been made from December 2020. In particular, this includes the absence of any statement of Ochre's financial position after a draft financial report of 2017. The plaintiff's evidence is that he has, to date, been unable to reconstruct the books and records of Ochre. Second, the absence of books and records has added to the complexity of the liquidation, as it has been necessary for him to spend time on tasks that would not ordinarily be required. Third, in March 2023, an application was commenced to remove him as liquidator of Ochre, which was ultimately resolved in September 2023. Senior counsel for the plaintiff emphasised that this application required significant resources to be devoted to this application, and not in a singular pursuit of other matters in relation to the liquidation. Fourth, in February 2023, the plaintiff filed proceedings in the Federal Court to examine a number of people, including each of the first to fourth, sixth, and seventh defendants to these proceedings. Public examinations were conducted in late July 2023 of the second, third, sixth and seventh defendants. However, not all of these have been completed at this stage. The evidence before the court is that the examination summonses of the sixth and seventh defendants have been extended to 29 July 2024.[12] At the time of filing the application, the plaintiff had not received signed copies of the sixth and seventh defendants' transcripts of their initial examination proceedings. In addition, to date, the plaintiff has not been able to examine two key people, namely Mr Featherby and Mr Sumarya, and arrest warrants have been issued by the Federal Court in November 2023.[13][12] Exhibit A.[13] Nipps (Liquidator), in the matter of Ochre Group Holdings Limited (in liq) (No 3) [2023] FCA 1404.