Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace [2023] FCA 14

Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace [2023] FCA 14

The statement of claim disclosed no reasonable cause of action because the insolvent trading claim depended on pleading and establishing specific debts incurred when the Company was insolvent, but paragraph 9 inadequately identified when and how the debts were incurred, and the presumed insolvency pleading failed to identify the relevant alternatives under the financial records requirement and the records relied upon. Summary dismissal was refused as premature because there was a reasonable prospect that at least some debts could be pleaded and particularised adequately. The statement of claim was struck out, with leave to re-plead conditional on compliance with the costs order.

Jurisdiction
Australia
Judgment Date
18 January 2023
Procedural Posture
Interlocutory Application for Summary Dismissal or Strike Out in Insolvent Trading Proceedings / Interlocutory Application Heard on 23 November 2022; Judgment and Orders on 18 January 2023
Outcome
Application for summary dismissal refused; statement of claim struck out; plaintiffs granted conditional leave to file and serve an amended statement of claim; plaintiffs ordered to pay the defendant's costs from commencement to 18 January 2023.
Legal Topics
['summary Dismissal' 'strike Out of Pleadings' 'insolvent Trading' 'presumption of Insolvency for Failure to Keep Financial Records' 'actual Insolvency' 'leave to Re Plead' 'costs']
['practice and Procedure' 'corporations' 'corporate Insolvency'] ['summary Dismissal' 'strike Out of Pleadings' 'insolvent Trading' 'presumption of Insolvency for Failure to Keep Financial Records' 'actual Insolvency' 'leave to Re Plead' 'costs']

Case Brief

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Procedural Posture

Interlocutory Application for Summary Dismissal or Strike Out in Insolvent Trading Proceedings / Interlocutory Application Heard on 23 November 2022; Judgment and Orders on 18 January 2023

Legal Issues

  1. 1 ['Whether it is necessary, pursuant to s 588G of the Corporations Act 2001 (Cth), to plead the date on which a debt relied upon is alleged to have been incurred and how the debt was created.' 'Whether the plaintiffs provided proper particulars of the presumed insolvency claim.' 'Whether the plaintiffs provided adequate particulars of the actual insolvency claim.' 'Whether the proceedings should be summarily dismissed or the statement of claim struck out.' 'What conditions, if any, should be imposed on any grant of leave to file an amended statement of claim.']

Ratio Decidendi

The statement of claim disclosed no reasonable cause of action because the insolvent trading claim depended on pleading and establishing specific debts incurred when the Company was insolvent, but paragraph 9 inadequately identified when and how the debts were incurred, and the presumed insolvency pleading failed to identify the relevant alternatives under the financial records requirement and the records relied upon. Summary dismissal was refused as premature because there was a reasonable prospect that at least some debts could be pleaded and particularised adequately. The statement of claim was struck out, with leave to re-plead conditional on compliance with the costs order.

Court Disposition

Application for summary dismissal refused; statement of claim struck out; plaintiffs granted conditional leave to file and serve an amended statement of claim; plaintiffs ordered to pay the defendant's costs from commencement to 18 January 2023.

Orders

  • ['The statement of claim filed on 21 July 2022 be struck out pursuant to r 16.21(1) of the Federal Court Rules 2011 (Cth).' 'The plaintiffs are to pay the costs of the defendant from the commencement of the proceedings to 18 January 2023, as agreed or if agreement is not reached by 4.30 pm on Friday, 10 February...