In the matter of PrimeSpace Property Investment Limited (in liq) [2017] NSWSC 386

In the matter of PrimeSpace Property Investment Limited (in liq) [2017] NSWSC 386

In light of detailed counsel's advice on prospects of recovery, the availability of insurance, the nature of losses claimed by PPIL for absence of limitation of liability in the Convertible Note Subscription Agreements, and the interests of creditors, the liquidators would be justified in commencing proceedings against the former solicitors. The proposed course of action is proper, reasonable, and advantageous to the liquidation.

Jurisdiction
Australia
Judgment Date
10 April 2017
Procedural Posture
Interlocutory Application for Judicial Advice in Liquidation / Judicial Direction Order
Outcome
Direction made that the liquidators would be justified in commencing proceedings against the former solicitors
Legal Topics
["liquidators' Powers" 'judicial Advice to Liquidators' 'trustee Liability' 'limitation of Liability of Responsible Entity' 'distribution of Trust Assets' 'directions Under Corporations Act S 511']
['equity' 'corporations Law' 'trusts'] ["liquidators' Powers" 'judicial Advice to Liquidators' 'trustee Liability' 'limitation of Liability of Responsible Entity' 'distribution of Trust Assets' 'directions Under Corporations Act S 511']

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Procedural Posture

Interlocutory Application for Judicial Advice in Liquidation / Judicial Direction Order

Legal Issues

  1. 1 ['Whether liquidators would be justified in commencing proceedings against former solicitors for negligence and breach of contract regarding the drafting of Convertible Note Subscription Agreements' "Whether PPIL's liability under Convertible Note Subscription Agreements constitutes a recoverable loss given absence of limitation of liability provisions" "Whether incurring costs to commence proceedings would be a proper exercise of liquidators' powers"]

Ratio Decidendi

In light of detailed counsel's advice on prospects of recovery, the availability of insurance, the nature of losses claimed by PPIL for absence of limitation of liability in the Convertible Note Subscription Agreements, and the interests of creditors, the liquidators would be justified in commencing proceedings against the former solicitors. The proposed course of action is proper, reasonable, and advantageous to the liquidation.

Court Disposition

Direction made that the liquidators would be justified in commencing proceedings against the former solicitors

Orders

  • ["Direction that liquidators be justified in pursuing a claim (including commencing proceedings) against PPIL's former solicitors in relation to the convertible notes issue" "Costs of paragraph 1(b) of the liquidators' interlocutory process to be costs in the winding up of PPIL, to be paid out of the assets of PAPF"]