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Re Clarecastle Pty Ltd (in liq)

Re Clarecastle Pty Ltd (in liq)

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Case Copied 22 July 2011 77 min read

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: In the matter of Clarecastle Pty Ltd (in liq) - Kassem and Secatore as liquidators of Clarecastle Pty Ltd (in liq) In the matter of ACN 050 070 463 Pty Ltd (in liq) - Kassem and Secatore as liquidators of ACN 050 070 463 Pty Ltd (in liq) [2011] NSWSC 857
Hearing dates: 6 May & 29 June 2011
Decision date: 22 July 2011
Jurisdiction: Equity Division - Corporations List
Before: Ward J
Decision:
Applications for extension of time under s 588FF(3)(b) dismissed other than in respect of one identified claim

Catchwords: CORPORATIONS - application for leave pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth) to extend the time to bring claims in relation to voidable transactions under s 588FF(1) - whether an extension of time can be granted in relation to the bringing of voidable transaction claims in general or 'blanket' terms - application of test for exercise of discretion in respect of such applications - HELD - decision in BP Australia v Brown binding on a single judge of this Court - discretion should be exercised in favour of particular claim identified against Jasmic Nominees Pty Ltd - otherwise claim for extension of time dismissed.
Legislation Cited: Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (NSW)
Cases Cited: Ansell Ltd v Davies [2008] SASC 203; (2008) 67 ACSR 356
Arnautovic v Nichola [2009] NSWSC 233
Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104
Australian Securities and Investments Commission v Karl Suleman Enterprises Pty Ltd (in liq) [2004] NSWSC 1244; (2004) 52 ACSR 103
BP Australia v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
Brown v DML Resources Pty Ltd (2001) 52 NSWLR 685
Davies v Chicago Boot Co Pty Ltd (No 2) (2007) 96 SASR 164
Derwinto Pty Ltd (in liq) v Lewis (2002) 42 ACSR 645
Green v Chiswell Furniture Pty Ltd [1999] NSWSC 608
Greig & Duff as Liquidators of Australian Building Industries P/L (in liq) v Australian Building Industries P/L (in liq) & Anor [2003] QCA 298
Hall v Sherman [2001] NSWSC 810
Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230
HIH Insurance Ltd (in liq), Re McGrath [2004] 22 ACLC 449
Itek Graphix Pty Ltd v Elliott (2002) 54 NSWLR 207
Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516
Matthews v Ipex ITG Pty Limited [2007] SASC 387
McGrath v National Indemnity Co (2004) 182 FLR 309
New Cap Reinsurance Corp v Reaseguros Alianza SA [2004] NSWSC 787; (2004) 186 FLR 175
Re Estate of Knight (a bankrupt); Rocom International Pty Ltd (in liq) v Prentice [2002] FCA 604
Re Harris Scarfe Ltd (in liq) and Harris Scarfe Wholesale Pty Ltd (in liq) (No 3) [2008] SASC 74; (2008) 65 ACSR 616
Rodgers v Commissioner of Taxation (1998) 88 FCR 61
Taylor…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2011] NSWSC 857
Decision Date: 22 July 2011

CaseChat Overview and Summary

In the matter of Re Clarecastle Pty Ltd (in liq), the liquidator of the company applied for leave to extend the time in which to bring claims in relation to voidable transactions under section 588FF(1) of the Corporations Act 2001. The application was made to the Federal Court, which had to decide whether an extension of time could be granted in a general or 'blanket' manner, or if it needed to be particularised to specific claims. This case involved interpreting the court's discretion under section 588FF(3)(b) of the Act in relation to time extensions for bringing voidable transaction claims.

The court considered the principles established in BP Australia v Brown, which held that a single judge of the Court could exercise discretion in granting extensions of time for bringing voidable transaction claims. The decision in BP Australia v Brown was binding on this Court, and it established that the discretion should be exercised in favour of particular claims identified against specific defendants, rather than in general terms. The liquidator argued for a blanket extension of time, but the court held that such an approach was not permissible under the established legal framework.

The court found that the discretion should be exercised in favour of the particular claim identified against Jasmic Nominees Pty Ltd. The application for an extension of time was dismissed in all other respects. The court's reasoning was based on the principle that extensions of time should be particularised to specific claims, as established by BP Australia v Brown. The liquidator's application for a blanket extension of time was therefore not granted, and the decision was made in favour of allowing an extension for the particular claim against Jasmic Nominees Pty Ltd.

The final orders of the Court were that the liquidator's application for leave to extend the time to bring claims in relation to voidable transactions under section 588FF(1) of the Corporations Act 2001 was dismissed in all respects, except for the particular claim identified against Jasmic Nominees Pty Ltd, for which an extension of time was granted. The Court's decision emphasised the importance of particularising claims for extensions of time, in line with the principles established in BP Australia v Brown.

Orders