Vardy v Linz, in the matter of Bondi Pizza Pty Ltd (in liq) [2021] FCA 530

Vardy v Linz, in the matter of Bondi Pizza Pty Ltd (in liq) [2021] FCA 530

The Deed of Settlement and Release should be approved under ss 477(2A) and 477(2B) as it is commercially reasonable and in the best interests of creditors, given the liquidator’s justifiable assessment of recovery prospects, financial position, and absence of funding. Suppression orders are appropriate to facilitate settlement and prevent prejudice to administration of justice for ongoing proceedings against the remaining defendant.

Parties
First Plaintiff: Darren John Vardy in his capacity as Liquidator of Bondi Pizza Pty Ltd (in liquidation) ACN 134 544 317; Second Plaintiff: Bondi Pizza Pty Ltd (in liquidation) ACN 134 544 317; First Defendant: Gary Michael Linz; Second Defendant: Mark Jeremy Ruck; Third Defendant: Michaela Samcikova; Fourth Defendant: Miriam Toro; Fifth Defendant: Casual Dining Concepts (Holdings) Pty Ltd ACN 142 135 206; Sixth Defendant: Bondi Pizza Parramatta (Holdings) Pty Ltd ACN 605 153 982
Jurisdiction
Australia
Judgment Date
18 May 2021
Procedural Posture
Corporations Liquidation Approval of Settlement by Liquidator / Interlocutory Application for Court Approval and Suppression Orders
Outcome
Application granted. Approval granted to liquidator to enter into Deed of Settlement and Release; suppression orders made.
Legal Topics
Liquidator Approval of Settlement, Suppression Orders, Court Approval of Agreements Under Corporations Act
Corporations Insolvency Civil Procedure Liquidator Approval of Settlement Suppression Orders Court Approval of Agreements Under Corporations Act

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Parties

Darren John Vardy in his capacity as Liquidator of Bondi Pizza Pty Ltd (in liquidation) ACN 134 544 317

First Plaintiff

Bondi Pizza Pty Ltd (in liquidation) ACN 134 544 317

Second Plaintiff

Gary Michael Linz

First Defendant

Mark Jeremy Ruck

Second Defendant

Michaela Samcikova

Third Defendant

Miriam Toro

Fourth Defendant

Casual Dining Concepts (Holdings) Pty Ltd ACN 142 135 206

Fifth Defendant

Bondi Pizza Parramatta (Holdings) Pty Ltd ACN 605 153 982

Sixth Defendant

Procedural Posture

Corporations Liquidation Approval of Settlement by Liquidator / Interlocutory Application for Court Approval and Suppression Orders

Legal Issues

  1. 1 Whether the liquidator should be authorised to enter into a Deed of Settlement and Release pursuant to ss 477(2A) and 477(2B) of the Corporations Act 2001 (Cth)
  2. 2 Whether suppression orders should be made under s 37AF of the Federal Court of Australia Act 1976 (Cth) to prevent disclosure of the settlement agreement to a non-settling defendant

Ratio Decidendi

The Deed of Settlement and Release should be approved under ss 477(2A) and 477(2B) as it is commercially reasonable and in the best interests of creditors, given the liquidator’s justifiable assessment of recovery prospects, financial position, and absence of funding. Suppression orders are appropriate to facilitate settlement and prevent prejudice to administration of justice for ongoing proceedings against the remaining defendant.

Court Disposition

Application granted. Approval granted to liquidator to enter into Deed of Settlement and Release; suppression orders made.

Orders

  • Pursuant to s 477(2B) of the Corporations Act 2001 (Cth), first plaintiff authorised nunc pro tunc to enter into Deed of Settlement and Release.
  • Suppression orders made under s 37AF of the Federal Court of Australia Act 1976 (Cth) regarding specified exhibits.