Lucas, in the matter of Filestock Pty Ltd (in liq) [2017] FCA 1425

Lucas, in the matter of Filestock Pty Ltd (in liq) [2017] FCA 1425

The extension was granted because the liquidator established good grounds for the favourable exercise of the discretion under s 588FF(3)(b): the application was filed within three years after the relation-back day, the delay was explained by lack of litigation funding in circumstances where a target of proposed litigation had impeded funding approval, the identified transactions had sufficient preliminary merit as potential voidable transactions, affected parties had been served but did not oppose or prove actual prejudice, and the lack of meaningful assistance from relevant persons justified a shelf order.

Jurisdiction
Australia
Judgment Date
13 September 2017
Procedural Posture
Application Pursuant to S 588 Ff(3)(b) of the Corporations Act 2001 (cth) to Extend Time to Commence Proceedings Concerning Alleged Voidable Transactions / Determination of Application
Outcome
Application granted.
Legal Topics
['extension of Time Under S 588 Ff(3)(b)' 'voidable Transactions' 'litigation Funding' 'shelf Order' "liquidator's Investigations" 'prejudice']
['bankruptcy and Insolvency' 'corporations and Corporate Insolvency'] ['extension of Time Under S 588 Ff(3)(b)' 'voidable Transactions' 'litigation Funding' 'shelf Order' "liquidator's Investigations" 'prejudice']

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Procedural Posture

Application Pursuant to S 588 Ff(3)(b) of the Corporations Act 2001 (cth) to Extend Time to Commence Proceedings Concerning Alleged Voidable Transactions / Determination of Application

Legal Issues

  1. 1 ['Whether the time for the liquidator and Filestock Pty Ltd (in liquidation) to make an application pursuant to s 588FF(1) of the Corporations Act 2001 (Cth) should be extended under s 588FF(3)(b).' 'Whether the absence of litigation funding, in circumstances where a director impeded attempts to obtain funding, provided an adequate explanation for delay.' 'Whether the foreshadowed voidable transaction proceedings had sufficient preliminary merit to justify continued exposure to potential claims.' 'Whether any actual prejudice from granting the extension outweighed the case for an extension.' 'Whether a broad shelf order should be made in light of incomplete investigations and limited assistance from relevant directors or persons involved in the transactions.']

Ratio Decidendi

The extension was granted because the liquidator established good grounds for the favourable exercise of the discretion under s 588FF(3)(b): the application was filed within three years after the relation-back day, the delay was explained by lack of litigation funding in circumstances where a target of proposed litigation had impeded funding approval, the identified transactions had sufficient preliminary merit as potential voidable transactions, affected parties had been served but did not oppose or prove actual prejudice, and the lack of meaningful assistance from relevant persons justified a shelf order.

Court Disposition

Application granted.

Orders

  • ['The period during which the first plaintiff and the second plaintiff are to make any application pursuant to s 588FF(1) of the Corporations Act 2001 (Cth) in relation to the second plaintiff against any person be extended until 12 March 2018.' "The plaintiffs' costs of and incidental to this application be costs...