SK Foods LP v SK Foods Australia Pty Limited (in Liquidation) (No 3) [2013] FCA 526

SK Foods LP v SK Foods Australia Pty Limited (in Liquidation) (No 3) [2013] FCA 526

The US Bankruptcy Court’s judgment determined the legal and beneficial ownership of the SK Foods Australia shares and the intercompany loan as between the parties to the US proceeding, which are the same (except the Ninth Defendant) as the opposing parties to this Australian case. That judgment gives rise to a res judicata, or in the alternative, issue estoppel preventing the other defendants from relitigating these matters. There has been no abuse of process by the plaintiffs in seeking to rely on the American judgment. Accordingly, the plaintiffs are entitled to summary judgment; any further submissions regarding the Ninth Defendant may be advanced.

Parties
First Plaintiff: SK Foods LP, a California Limited Partnership (under Chapter 11); Second Plaintiff: Bradley D Sharp, as Trustee in Bankruptcy of SK Foods LP (under Chapter 11); First Defendant: SK Foods Australia Pty Ltd (in Liquidation) (ACN 009 245 735); Second Defendant: Cedenco JV Australia Pty Ltd (in Liquidation) (ACN 075 836 010); Third Defendant: SS Farms Australia Pty Ltd (in Liquidation) (ACN 107 746 716); Fourth Defendant: John Sheahan and Ian Russell Lock as Joint and Several Liquidators of SK Foods Australia Pty Ltd (in Liquidation) (ACN 009 245 735), Cedenco JV Australia Pty Ltd (in Liquidation) (ACN 075 836 010), SS Farms Australia Pty Ltd (in Liquidation) (ACN 107 746 716); Fifth Defendant: SK PM Corporation; Sixth Defendant: Frederick Scott Salyer (aka Scott Salyer) as Trustee of the Scott Salyer Revocable Trust; Seventh Defendant: Monterey Peninsula Farming LLC; Eighth Defendant: Fast Falcon LLC; Ninth Defendant: SS Farms LLC; Tenth Defendant: Robert Pruett in his capacity as Trustee for the SSC&L 2007 Trust; Eleventh Defendant: Neal Alexander in his capacity as Trustee for the SSC&L 2007 Trust; Twelfth Defendant: SSRT Holding Pty Limited (ACN 162 384 045) as Trustee of the Scott Salyer Revocable Trust; Thirteenth Defendant: SSC&L 2007 Pty Limited (ACN 162 383 940) as Trustee of the SSC&L 2007 Trust
Jurisdiction
Australia
Judgment Date
30 May 2013
Procedural Posture
Civil / Interlocutory Application for Summary Judgment
Outcome
Interlocutory application for summary judgment by plaintiffs granted (except as to Ninth Defendant, pending further submissions).
Legal Topics
Res Judicata, Issue Estoppel, Foreign Judgments, Summary Judgment, Abuse of Process
Civil Procedure Res Judicata Issue Estoppel Foreign Judgments Summary Judgment Abuse of Process

Case Brief

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Parties

SK Foods LP, a California Limited Partnership (under Chapter 11)

First Plaintiff

Bradley D Sharp, as Trustee in Bankruptcy of SK Foods LP (under Chapter 11)

Second Plaintiff

SK Foods Australia Pty Ltd (in Liquidation) (ACN 009 245 735)

First Defendant

Cedenco JV Australia Pty Ltd (in Liquidation) (ACN 075 836 010)

Second Defendant

SS Farms Australia Pty Ltd (in Liquidation) (ACN 107 746 716)

Third Defendant

John Sheahan and Ian Russell Lock as Joint and Several Liquidators of SK Foods Australia Pty Ltd (in Liquidation) (ACN 009 245 735), Cedenco JV Australia Pty Ltd (in Liquidation) (ACN 075 836 010), SS Farms Australia Pty Ltd (in Liquidation) (ACN 107 746 716)

Fourth Defendant

SK PM Corporation

Fifth Defendant

Frederick Scott Salyer (aka Scott Salyer) as Trustee of the Scott Salyer Revocable Trust

Sixth Defendant

Monterey Peninsula Farming LLC

Seventh Defendant

Fast Falcon LLC

Eighth Defendant

SS Farms LLC

Ninth Defendant

Robert Pruett in his capacity as Trustee for the SSC&L 2007 Trust

Tenth Defendant

Neal Alexander in his capacity as Trustee for the SSC&L 2007 Trust

Eleventh Defendant

SSRT Holding Pty Limited (ACN 162 384 045) as Trustee of the Scott Salyer Revocable Trust

Twelfth Defendant

SSC&L 2007 Pty Limited (ACN 162 383 940) as Trustee of the SSC&L 2007 Trust

Thirteenth Defendant

Procedural Posture

Civil / Interlocutory Application for Summary Judgment

Legal Issues

  1. 1 Whether the US Bankruptcy Court's judgment gives rise to res judicata or issue estoppel in this Australian proceeding between these parties;
  2. 2 Whether pursuing the US litigation and seeking to deploy its result in Australia constitutes an abuse of process;
  3. 3 Whether summary judgment should be granted to the plaintiffs on the ownership issues based on the US judgment.

Ratio Decidendi

The US Bankruptcy Court’s judgment determined the legal and beneficial ownership of the SK Foods Australia shares and the intercompany loan as between the parties to the US proceeding, which are the same (except the Ninth Defendant) as the opposing parties to this Australian case. That judgment gives rise to a res judicata, or in the alternative, issue estoppel preventing the other defendants from relitigating these matters. There has been no abuse of process by the plaintiffs in seeking to rely on the American judgment. Accordingly, the plaintiffs are entitled to summary judgment; any further submissions regarding the Ninth Defendant may be advanced.

Court Disposition

Interlocutory application for summary judgment by plaintiffs granted (except as to Ninth Defendant, pending further submissions).

Orders

  • The parties bring in Short Minutes of Orders to give effect to these reasons within 21 days.