5G Developments Pty Ltd (in liq) v Massie, in the matter of 5G Developments Pty Ltd (in liq) [2021] FCA 791

5G Developments Pty Ltd (in liq) v Massie, in the matter of 5G Developments Pty Ltd (in liq) [2021] FCA 791

The applicants failed to discharge the onus of showing error in the special purpose liquidator’s decision. The payments by Denham Constructions to Macquarie Bank were made as a guarantor (not as a principal debtor) and discharged the debts of Denham Wyndham, creating a debt from DW to DC. The financial statement adjustments were not supported by actual transactions. No credible joint venture existed to transfer liabilities. The claim was not time-barred. Accordingly, the proof of debt was correctly admitted.

Parties
First Plaintiff / First Cross Respondent / Third Respondent: 5G Developments Pty Ltd (formerly known as Denham Wyndham Pty Ltd) (in liq); Second Plaintiff / Second Respondent: Alan John Hayes; Interested Person / First Respondent: Glenn Livingstone in his capacity as special purpose liquidator of 5G Developments Pty Ltd (formerly known as Denham Wyndham Pty Ltd) (in liquidation); First Defendant / First Applicant: Hugh Hamon Robert Massie; Second Defendant / Second Applicant / Second Cross Respondent: 5G Capital Investments Pty Ltd; Third Defendant / Second Cross Claimant: Pepperfield Holdings Pty Ltd; Fourth Defendant / Fourth Applicant: 5G Capital SPV27 Pty Ltd; Fifth Defendant / Third Applicant / Cross Claimant: SPV28 Pty Ltd; Sixth Defendant: 5G Capital Management Pty Ltd; Seventh Defendant / First Cross Claimant: Sapsford Financial Services Pty Ltd; Second Cross Respondent: Denham Constructions Pty Ltd (in liq); Third Cross Respondent: Steven James McGrath; Fourth Cross Respondent: Master Reception Pty Ltd (formerly Denham Constructions Project Company 910 Pty Ltd) (in liq); Fifth Cross Respondent: PC 940 Pty Ltd (formerly Denham Constructions Project Company 940 Pty Ltd) (in liq); Sixth Cross Respondent: MHI Hire Pty Ltd (in liq); Seventh Cross Respondent: Australian Securities and Investments Commission; Solicitor for the Second Respondent: Colin Biggers & Paisley
Jurisdiction
Australia
Judgment Date
13 July 2021
Procedural Posture
Corporations – Insolvency, Interlocutory Application to Set Aside Proof of Debt / Judgment on Interlocutory Application
Outcome
Application dismissed
Legal Topics
Proof of Debt, Liquidator's Adjudication, Directors' Duties, Guarantee and Suretyship, Joint Venture, Financial Statements, Limitation Period
Corporations Law Insolvency Law Contracts Proof of Debt Liquidator's Adjudication Directors' Duties Guarantee and Suretyship Joint Venture +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 19 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

5G Developments Pty Ltd (formerly known as Denham Wyndham Pty Ltd) (in liq)

First Plaintiff / First Cross Respondent / Third Respondent

Alan John Hayes

Second Plaintiff / Second Respondent

Glenn Livingstone in his capacity as special purpose liquidator of 5G Developments Pty Ltd (formerly known as Denham Wyndham Pty Ltd) (in liquidation)

Interested Person / First Respondent

Hugh Hamon Robert Massie

First Defendant / First Applicant

5G Capital Investments Pty Ltd

Second Defendant / Second Applicant / Second Cross Respondent

Pepperfield Holdings Pty Ltd

Third Defendant / Second Cross Claimant

5G Capital SPV27 Pty Ltd

Fourth Defendant / Fourth Applicant

SPV28 Pty Ltd

Fifth Defendant / Third Applicant / Cross Claimant

5G Capital Management Pty Ltd

Sixth Defendant

Sapsford Financial Services Pty Ltd

Seventh Defendant / First Cross Claimant

Denham Constructions Pty Ltd (in liq)

Second Cross Respondent

Steven James McGrath

Third Cross Respondent

Master Reception Pty Ltd (formerly Denham Constructions Project Company 910 Pty Ltd) (in liq)

Fourth Cross Respondent

PC 940 Pty Ltd (formerly Denham Constructions Project Company 940 Pty Ltd) (in liq)

Fifth Cross Respondent

MHI Hire Pty Ltd (in liq)

Sixth Cross Respondent

Australian Securities and Investments Commission

Seventh Cross Respondent

Colin Biggers & Paisley

Solicitor for the Second Respondent

Procedural Posture

Corporations – Insolvency, Interlocutory Application to Set Aside Proof of Debt / Judgment on Interlocutory Application

Legal Issues

  1. 1 Whether the special purpose liquidator erred in admitting the proof of debt of Denham Constructions Pty Ltd (in liq) against 5G Developments Pty Ltd (in liq)
  2. 2 Whether financial statements were impermissibly altered
  3. 3 Whether payments by DC to Macquarie Bank Ltd create a debt owed by DW to DC

Ratio Decidendi

The applicants failed to discharge the onus of showing error in the special purpose liquidator’s decision. The payments by Denham Constructions to Macquarie Bank were made as a guarantor (not as a principal debtor) and discharged the debts of Denham Wyndham, creating a debt from DW to DC. The financial statement adjustments were not supported by actual transactions. No credible joint venture existed to transfer liabilities. The claim was not time-barred. Accordingly, the proof of debt was correctly admitted.

Court Disposition

Application dismissed

Orders

  • The interlocutory process filed on 24 February 2020 be dismissed.
  • The parties file and serve written submissions of no more than three pages as to costs, within 7 days and 7 days in reply.