In the matter of Franklyn Scholar (Australia) Pty Ltd; In the matter of Performance Development Group Pty Ltd [2020] NSWSC 1902

In the matter of Franklyn Scholar (Australia) Pty Ltd; In the matter of Performance Development Group Pty Ltd [2020] NSWSC 1902

Although the liquidators had a commercially understandable reason for wanting to defer proceedings while the utility of proofs of debt and recovery from insolvent, deregistered or bankrupt potential defendants remained uncertain, granting the longer extension sought would be inconsistent with the policy of s 588FF, which promotes timely resolution of voidable transaction claims and commercial certainty for defendants. Because alternative mechanisms were available, including commencing proceedings within time and seeking to defer their progress, the Court refused the longer extension but granted a three-month extension to allow the Plaintiffs to consider steps to preserve their claims.

Jurisdiction
Australia
Judgment Date
05 November 2020
Procedural Posture
Application for Leave Pursuant to S 588 Ff(3)(b) of the Corporations Act 2001 (cth) Extending Time to Bring Voidable Transactions Claims / Principal Judgment on Originating Processes Filed on 16 October 2020
Outcome
The longer extension sought was refused, but the period during which the Plaintiffs may make an application pursuant to s 588FF of the Corporations Act 2001 (Cth) was extended to 5 February 2021 in each proceeding.
Legal Topics
['extension of Time Under S 588 Ff(3)(b)' 'voidable Transactions' 'proofs of Debt' "liquidators' Claims"]
['corporations' 'insolvency'] ['extension of Time Under S 588 Ff(3)(b)' 'voidable Transactions' 'proofs of Debt' "liquidators' Claims"]

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Procedural Posture

Application for Leave Pursuant to S 588 Ff(3)(b) of the Corporations Act 2001 (cth) Extending Time to Bring Voidable Transactions Claims / Principal Judgment on Originating Processes Filed on 16 October 2020

Legal Issues

  1. 1 ['Whether the period in which the liquidators and companies may make any application under s 588FF of the Corporations Act 2001 (Cth) should be extended to 20 October 2023 or another date.' 'Whether it was just and fair to grant an extension where the liquidators sought to defer proceedings and first pursue claims through the proof of debt process because potential defendants were insolvent, deregistered or bankrupt.' 'Whether a shorter extension should be granted to allow the liquidators to consider steps to preserve claims.']

Ratio Decidendi

Although the liquidators had a commercially understandable reason for wanting to defer proceedings while the utility of proofs of debt and recovery from insolvent, deregistered or bankrupt potential defendants remained uncertain, granting the longer extension sought would be inconsistent with the policy of s 588FF, which promotes timely resolution of voidable transaction claims and commercial certainty for defendants. Because alternative mechanisms were available, including commencing proceedings within time and seeking to defer their progress, the Court refused the longer extension but granted a three-month extension to allow the Plaintiffs to consider steps to preserve their claims.

Court Disposition

The longer extension sought was refused, but the period during which the Plaintiffs may make an application pursuant to s 588FF of the Corporations Act 2001 (Cth) was extended to 5 February 2021 in each proceeding.

Orders

  • ['Order that the period during which the Plaintiffs may make any application pursuant to s 588FF of the Corporations Act 2001 (Cth) be extended to 5 February 2021.' 'Order that the costs of this application be costs in the liquidation of the Plaintiff.' 'The exhibits be returned.']