Ford v Commissioner of Taxation, in the matter of Careers Australia Group Limited (in liq) (No 2) [2022] FCA 1151

Ford v Commissioner of Taxation, in the matter of Careers Australia Group Limited (in liq) (No 2) [2022] FCA 1151

The overarching purpose of civil practice and procedure under s 37M of the Federal Court of Australia Act 1976 (Cth) is best promoted by first requiring discovery on the issue of insolvency in both proceedings, then referring the issue of insolvency of the plaintiff companies for inquiry and report to a referee in accordance with s 54A, as this process is efficient, cost-effective, and suitable for the largely accounting-based issues of insolvency.

Parties
First Plaintiff: Martin Francis Ford as Liquidator for Careers Australia Group Limited (in liquidation) ACN 122 171 840; Second Plaintiff: Careers Australia Group Limited (in liquidation) ACN 122 171 840; Third Plaintiff (vid 238/2020), Fourth Plaintiff (vid 749/2021): Australian School of Management Pty Ltd (In Liquidation) ACN 138 545 605; Fourth Plaintiff (vid 238/2020), Sixth Plaintiff (vid 749/2021): Global Learning Support Group Pty Ltd (In Liquidation) ACN 169 155 480; Fifth Plaintiff (vid 238/2020), Seventh Plaintiff (vid 749/2021): ACN 097 871 933 Pty Ltd (In Liquidation) formerly Workstar Pty Ltd ACN 097 871 933; Third Plaintiff (vid 749/2021): Careers Australia Education Institute Pty Ltd (in Liquidation) (ACN 120 675 505); Fifth Plaintiff (vid 749/2021): Careers Australia Institute of Training Pty Ltd (in Liquidation) (ACN 122 082 204); Defendant (vid 238/2020): Commonwealth Commissioner of Taxation; Respondent (vid 238/2020), Second Defendant (vid 749/2021): Patrick McKendry; First Defendant (vid 749/2021): Mr Robert Mansfield; Third Defendant (vid 749/2021): Mr Jonas Martin-Lof; Fourth Defendant (vid 749/2021): Mr Nicholas Watkins; Fifth Defendant (vid 749/2021): Ms Louise Svanberg; Sixth Defendant (vid 749/2021): Mr Michael Jasansky; Seventh Defendant (vid 749/2021): Mr Richard Gati; Eighth Defendant (vid 749/2021): Mr Errol Clark; Ninth Defendant (vid 749/2021): Mr Walter Gilmore; Tenth Defendant (vid 749/2021): Mr Richard Pepper; Eleventh Defendant (vid 749/2021): White Cloud Capital Advisors Limited (previously White Cloud Capital Partners Limited) (UK Company No#0663914); Twelfth Defendant (vid 749/2021): BXR Advisory Partners LLP (UK Company No#OC420050)
Jurisdiction
Australia
Judgment Date
28 September 2022
Procedural Posture
Corporations/commercial Liquidation/preference/director Liability / Case Management: Directions for Discovery and Referral to Referee on Insolvency
Outcome
Order for parties to confer and propose orders for discovery and for referral of the insolvency issue to a referee, with referral to follow completion of discovery. Further case management to follow. Costs reserved.
Legal Topics
Insolvency, Voidable Transactions, Unfair Preferences, Insolvent Trading, Directors' Duties, Referral to Referee
Corporations Law Civil Procedure Insolvency Voidable Transactions Unfair Preferences Insolvent Trading Directors' Duties Referral to Referee

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Parties

Martin Francis Ford as Liquidator for Careers Australia Group Limited (in liquidation) ACN 122 171 840

First Plaintiff

Careers Australia Group Limited (in liquidation) ACN 122 171 840

Second Plaintiff

Australian School of Management Pty Ltd (In Liquidation) ACN 138 545 605

Third Plaintiff (vid 238/2020), Fourth Plaintiff (vid 749/2021)

Global Learning Support Group Pty Ltd (In Liquidation) ACN 169 155 480

Fourth Plaintiff (vid 238/2020), Sixth Plaintiff (vid 749/2021)

ACN 097 871 933 Pty Ltd (In Liquidation) formerly Workstar Pty Ltd ACN 097 871 933

Fifth Plaintiff (vid 238/2020), Seventh Plaintiff (vid 749/2021)

Careers Australia Education Institute Pty Ltd (in Liquidation) (ACN 120 675 505)

Third Plaintiff (vid 749/2021)

Careers Australia Institute of Training Pty Ltd (in Liquidation) (ACN 122 082 204)

Fifth Plaintiff (vid 749/2021)

Commonwealth Commissioner of Taxation

Defendant (vid 238/2020)

Patrick McKendry

Respondent (vid 238/2020), Second Defendant (vid 749/2021)

Mr Robert Mansfield

First Defendant (vid 749/2021)

Mr Jonas Martin-Lof

Third Defendant (vid 749/2021)

Mr Nicholas Watkins

Fourth Defendant (vid 749/2021)

Ms Louise Svanberg

Fifth Defendant (vid 749/2021)

Mr Michael Jasansky

Sixth Defendant (vid 749/2021)

Mr Richard Gati

Seventh Defendant (vid 749/2021)

Mr Errol Clark

Eighth Defendant (vid 749/2021)

Mr Walter Gilmore

Ninth Defendant (vid 749/2021)

Mr Richard Pepper

Tenth Defendant (vid 749/2021)

White Cloud Capital Advisors Limited (previously White Cloud Capital Partners Limited) (UK Company No#0663914)

Eleventh Defendant (vid 749/2021)

BXR Advisory Partners LLP (UK Company No#OC420050)

Twelfth Defendant (vid 749/2021)

Procedural Posture

Corporations/commercial Liquidation/preference/director Liability / Case Management: Directions for Discovery and Referral to Referee on Insolvency

Legal Issues

  1. 1 Whether the issue of insolvency should be referred to a referee for inquiry and report in accordance with s 54A of the Federal Court of Australia Act 1976 (Cth)
  2. 2 Whether discovery should be given on the issue of insolvency by all parties
  3. 3 Whether the issue of insolvency should be determined at trial on the basis of lay and expert evidence

Ratio Decidendi

The overarching purpose of civil practice and procedure under s 37M of the Federal Court of Australia Act 1976 (Cth) is best promoted by first requiring discovery on the issue of insolvency in both proceedings, then referring the issue of insolvency of the plaintiff companies for inquiry and report to a referee in accordance with s 54A, as this process is efficient, cost-effective, and suitable for the largely accounting-based issues of insolvency.

Court Disposition

Order for parties to confer and propose orders for discovery and for referral of the insolvency issue to a referee, with referral to follow completion of discovery. Further case management to follow. Costs reserved.

Orders

  • The parties are to confer as to orders for the completion of discovery by all parties on the issue of insolvency and file: (a) agreed or, failing agreement, competing orders by 28 October 2022; (b) for competing orders, outline submissions of no more than 2 pages.
  • The parties are to confer as to referral of the issue of insolvency to a referee (referee selection, questions, timetable) and file: (a) agreed or, failing agreement, competing orders by 28 October 2022; (b) for competing orders, outline submissions of no more than 3 pages.