Kassem v Zhang [2008] NSWSC 1287

Kassem v Zhang [2008] NSWSC 1287

Proceedings commenced under s 588FF(1) of the Corporations Act 2001 (Cth) after expiration of the s 588FF(3) limitation period are incompetent and must be dismissed; the court may not amend the process to substitute a new plaintiff seeking a different cause of action arising from the same facts, as the amendment provisions do not permit substitution where the original plaintiff's right is entirely lacking.

Parties
Plaintiff: Ozem Azzam Kassem; Plaintiff: Daniel Peter Juratowitch; Company in Liquidation: Delta Mortgage & Finance Pty Ltd; Defendant: Oliver Zhang
Jurisdiction
Australia
Judgment Date
04 December 2008
Procedural Posture
Corporations Winding Up Liquidation / Interlocutory Decision on Motions to Amend and to Dismiss Originating Process
Outcome
Application to amend dismissed; originating process dismissed; plaintiffs ordered to pay defendant's costs; plaintiffs denied indemnity from company assets for most costs.
Legal Topics
Voidable Transactions, Limitation Periods, Director's Duties, Liquidators' Personal Liability for Costs, Amendment of Proceedings
Corporations Law Civil Procedure Insolvency Voidable Transactions Limitation Periods Director's Duties Liquidators' Personal Liability for Costs Amendment of Proceedings

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Parties

Ozem Azzam Kassem

Plaintiff

Daniel Peter Juratowitch

Plaintiff

Delta Mortgage & Finance Pty Ltd

Company in Liquidation

Oliver Zhang

Defendant

Procedural Posture

Corporations Winding Up Liquidation / Interlocutory Decision on Motions to Amend and to Dismiss Originating Process

Legal Issues

  1. 1 Whether proceedings under s 588FF(1) of the Corporations Act 2001 (Cth) may be commenced after the expiration of the limitation period in s 588FF(3)
  2. 2 Whether amendment to substitute the company as plaintiff and pursue a breach of directors' duties claim based on same facts is within permissible scope of amendment provisions
  3. 3 Whether liquidators' legal costs are properly incurred and recoverable from company assets

Ratio Decidendi

Proceedings commenced under s 588FF(1) of the Corporations Act 2001 (Cth) after expiration of the s 588FF(3) limitation period are incompetent and must be dismissed; the court may not amend the process to substitute a new plaintiff seeking a different cause of action arising from the same facts, as the amendment provisions do not permit substitution where the original plaintiff's right is entirely lacking.

Court Disposition

Application to amend dismissed; originating process dismissed; plaintiffs ordered to pay defendant's costs; plaintiffs denied indemnity from company assets for most costs.

Orders

  • The plaintiffs' interlocutory process filed on 6 November 2008 be dismissed.
  • The originating process be dismissed.