In the matter of Horses for Harmony Ltd [2021] NSWSC 1180

Leave was granted to proceed against the Company in liquidation because that was common ground and could be conditioned so that no judgment would be enforced without leave. Leave was refused against Mr Hayes personally because the Plaintiffs had not pleaded or evidenced material facts showing that Slattery acted as agent for the liquidator personally, that the liquidator personally was bound by any auction contract, or that he personally induced a breach or delivered the vehicle unlawfully. Given the weakness and pleading difficulties of the claim, the limited or uncertain damages, and the risk of costs being borne by the liquidation estate, the Court's officer should not be required...

Jurisdiction: Australia
Judgment Date: 10 September 2021
Procedural Posture: Application for Leave to Bring or Continue Proceedings Against a Company in Liquidation Under S 471 B of the Corporations Act 2001 (cth) and Against a Court Appointed Liquidator / Ex Tempore Judgment on Application for Leave Nunc Pro Tunc and Consequential Strike Out of Amended Statement of Claim in Substantive Proceedings
Outcome: Leave granted by consent to proceed against the Company under s 471B; leave refused to proceed against the court-appointed liquidator personally; Amended Statement of Claim struck out with leave to replead; proceedings dismissed against Mr Hayes; costs ordered against the Plaintiffs on the ordinary basis.
Legal Topics: ['leave to Proceed Against Company in Liquidation' 'leave to Sue Court Appointed Liquidator' 'strike Out of Pleading' 'costs' 'auction Sale Dispute']

['corporations' 'equity' 'civil Procedure' 'insolvency'] ['leave to Proceed Against Company in Liquidation' 'leave to Sue Court Appointed Liquidator' 'strike Out of Pleading' 'costs' 'auction Sale Dispute']

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Procedural Posture

Application for Leave to Bring or Continue Proceedings Against a Company in Liquidation Under S 471 B of the Corporations Act 2001 (cth) and Against a Court Appointed Liquidator / Ex Tempore Judgment on Application for Leave Nunc Pro Tunc and Consequential Strike Out of Amended Statement of Claim in Substantive Proceedings

Legal Issues

1 ['Whether leave should be granted under s 471B of the Corporations Act 2001 (Cth) for the Plaintiffs to proceed against the Company in liquidation.' 'Whether leave should be granted to bring proceedings against Mr Hayes personally in his capacity as court-appointed liquidator.' "Whether the Plaintiffs' pleaded claims disclosed an arguable basis for personal liability of the liquidator in contract, conversion, equitable ownership, or inducement of breach of contract." 'Whether indemnity costs should be ordered against the Plaintiffs for the unsuccessful application to proceed against Mr Hayes.' 'Whether the Amended Statement of Claim in the substantive proceedings should be struck out with leave to replead.']

Ratio Decidendi

Court Disposition

Leave granted by consent to proceed against the Company under s 471B; leave refused to proceed against the court-appointed liquidator personally; Amended Statement of Claim struck out with leave to replead; proceedings dismissed against Mr Hayes; costs ordered against the Plaintiffs on the ordinary basis.

Orders

["In proceedings 2021/00172636, the Plaintiffs pay Mr Hayes' costs of the proceedings, as agreed, or as assessed." 'In proceedings 2021/54586, the Amended Statement of Claim be struck out.' 'Leave to the Plaintiffs to replead, omitting Mr Alan Hayes as liquidator of Horses for Harmony Foundation Ltd as a defendant...