Hastie Group Limited (in liq) v Multiplex Constructions Pty Ltd (Formerly Brookfield Multiplex Constructions Pty Ltd) (No 3) [2022] FCA 1280

Hastie Group Limited (in liq) v Multiplex Constructions Pty Ltd (Formerly Brookfield Multiplex Constructions Pty Ltd) (No 3) [2022] FCA 1280

Section 553C set-off applies automatically to mutual claims between the Hastie Entities (in liquidation) and the respondents, does not require proving in the winding up, and is not dependent on liquidator determination. Respondents are not required to relinquish the proceeds of bank guarantees, as the contractual arrangements and the autonomy of bank guarantees (as established by longstanding authority) confer proprietary rights in their favour. The drawdowns on bank guarantees are not dispositions or dealings with company property voided by ss 437D or 468. No orders can be made directing the liquidator to assess claims or require return of funds; quantification and any balance due remain...

Jurisdiction
Australia
Judgment Date
02 November 2022
Procedural Posture
Commercial and Corporations / Corporations and Corporate Insolvency / Post Liability Trial Determination Regarding Liability, With Quantification/balance to Follow
Outcome
Relief sought by applicants/directions to liquidator refused. Respondents entitled to retain proceeds of bank guarantees drawn down and to apply statutory set-off under s 553C.
Legal Topics
['statutory Set Off (s 553 C)' 'bank Guarantees and Performance Bonds' 'property of Company in Liquidation' 'voidable Transactions and Dispositions' 'limitation of Actions' 'role and Powers of Liquidator']
['bankruptcy and Insolvency' 'corporations' 'limitations'] ['statutory Set Off (s 553 C)' 'bank Guarantees and Performance Bonds' 'property of Company in Liquidation' 'voidable Transactions and Dispositions' 'limitation of Actions' 'role and Powers of Liquidator']

Case Brief

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Procedural Posture

Commercial and Corporations / Corporations and Corporate Insolvency / Post Liability Trial Determination Regarding Liability, With Quantification/balance to Follow

Legal Issues

  1. 1 ['Whether the applicants (companies in liquidation) are entitled to recover debts (receivables) and/or proceeds of bank guarantees drawn down by respondents after the appointment of administrators/liquidators.' 'Whether s 553C of the Corporations Act operates to allow set-off as asserted by the respondents.' 'Whether parties have proprietary interests in bank guarantees or the proceeds after drawdown, specifically whether the retention by respondents is voided by ss 437D or 468 of the Corporations Act, and/or otherwise restrained by the Act or the principle of pari passu.' 'Whether the claims are statute-barred under limitation principles.']

Ratio Decidendi

Section 553C set-off applies automatically to mutual claims between the Hastie Entities (in liquidation) and the respondents, does not require proving in the winding up, and is not dependent on liquidator determination. Respondents are not required to relinquish the proceeds of bank guarantees, as the contractual arrangements and the autonomy of bank guarantees (as established by longstanding authority) confer proprietary rights in their favour. The drawdowns on bank guarantees are not dispositions or dealings with company property voided by ss 437D or 468. No orders can be made directing the liquidator to assess claims or require return of funds; quantification and any balance due remain...

Court Disposition

Relief sought by applicants/directions to liquidator refused. Respondents entitled to retain proceeds of bank guarantees drawn down and to apply statutory set-off under s 553C.

Orders

  • ['Parties to confer and file any agreed minutes of orders by specified date; case management listed if required.' 'Unless otherwise ordered, future orders to be determined on the papers.' 'Application for order for winding up by the court (in winding up proceeding) refused for want of utility.' 'Application for...