Re Convector Grain Pty Ltd (In Liquidation) - [2017] VSC 473

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S CI 2016 03434

IN THE MATTER of CONVECTOR GRAIN PTY LTD (IN LIQ) (ACN 124 164 432)

CONVECTOR GRAIN PTY LTD (IN LIQUIDATION)(ACN 124 164 432)	First Plaintiff
ANDREW REGINALD YEO IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF CONVECTOR GRAIN PTY LTD (IN LIQUIDATION) (ACN 124 164 432)	Second Plaintiff
GESS RAMBALDI IN HIS CAPACITY AS JOINT AND SEVERAL LIQUIDATOR OF CONVECTOR GRAIN PTY LTD (IN LIQUIDATION) (ACN 124 164 432)	Third Plaintiff
v
LAUREVILLE PTY LTD (ACN 063 524 194)	Defendant

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JUDGE:	RANDALL AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	23 November 2016
DATE OF JUDGMENT:	16 August 2017
CASE MAY BE CITED AS:	Re Convector Grain Pty Ltd (In Liquidation)
MEDIUM NEUTRAL CITATION:	[2017] VSC 473

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CORPORATIONS – Corporations Act 2001 (Cth), s 588FF and s 1322 – Supreme Court (Corporations) Rules 2013 (Vic), rr 1.10, 2.3 and 2.7.

PRACTICE AND PROCEDURE – Originating Process seeking relief under s 588FF – Originating process amended prior to the return date but after the expiry of time for service – Power to amend following the decision of the Court of Appeal in Horne v Retirement Guide Management Pty Ltd [2017] VSCA 47 – r 3.02 of Ch 1 of the Supreme Court (General Civil Procedure) Rules 2015 – Discretion – s 1322(4)(d) – Discretion – Substantial injustice.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr P Fary	Frenkel Partners
For the Defendant	Mr A Trichardt	Charles Fice Solicitors

HIS HONOUR:

The second and third plaintiffs in this matter are the liquidators of the first plaintiff (‘Convector Grain’). The liquidators seek relief under s 588FF(1) of the Corporations Act 2001 (Cth) (‘the Act’). That section allows the Court to make certain orders in relation to voidable transactions. Here, the liquidators are seeking orders that a preference in the sum of $337,928.27 be repaid to Convector Grain.

Section 588FF(3) provides that such an application:

…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 relation-back day in this case is 26 August 2013, which is the date on which the liquidators were appointed. The originating process was filed on 25 August 2016, one day within the three-year time limit imposed by s 588FF(3)(a)(i).

The proceedings were initially returnable on 16 September 2016. Rule 2.7 of the Supreme Court (Corporations) Rules2013 (Vic) (‘Corporations Rules’) requires service to be effected ‘[a]s soon as practicable after filing … and, in any case, at least 5 days before the date fixed for hearing’. That is, at least five days before 16 September 2016.

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.

Continue reading Re Convector Grain Pty Ltd (In Liquidation)

Details

AGLC: Re Convector Grain Pty Ltd (In Liquidation) [2017] VSC 473
Case: [2017] VSC 473
Decision Date: 16 August 2017

CaseChat Overview and Summary

The case of Re Convector Grain Pty Ltd (In Liquidation) dealt with an originating process seeking relief under section 588FF of the Corporations Act 2001 (Cth) and was heard in the Supreme Court of Victoria. The applicant sought to amend their originating process after the expiry of the service period but before the return date. The dispute centred on the validity of the amendment and the court's discretion to permit it under the relevant rules and statutory provisions.

The central legal issues for the court to decide were whether the court had the discretion to allow an amendment to the originating process after the service period had expired, and if so, under what circumstances. The court considered the relevant provisions of the Supreme Court (Corporations) Rules 2013 (Vic) and the Supreme Court (General Civil Procedure) Rules 2015, as well as the statutory discretion provided by section 1322 of the Corporations Act 2001 (Cth). The court also needed to determine whether permitting the amendment would cause substantial injustice to the opposing party.

The court found that it did have the discretion to allow the amendment under rule 3.02 of the Supreme Court (General Civil Procedure) Rules 2015, which aligns with the decision in Horne v Retirement Guide Management Pty Ltd. The court considered the factors relevant to exercising this discretion, including the timeliness of the amendment application, the likelihood of prejudice to the respondent, and the overall fairness of permitting the amendment. The court concluded that the amendment could be allowed as it would not cause substantial injustice to the opposing party and would facilitate the fair resolution of the proceeding. The court exercised its discretion in favour of permitting the amendment.

The final orders of the court were that the applicant's amendment to the originating process was allowed, and the respondent was directed to file and serve their amended defence within the specified timeframe. The court's decision balanced the need for procedural fairness with the potential prejudice to the opposing party, ultimately finding that the amendment was permissible in the circumstances of the case.

Orders