Federal Court of Australia

Gong v Nipps (liquidator), in the matter of i-Prosperity Pty Ltd (in liq) [2024] FCAFC 102

ORDERS

THE COURT ORDERS THAT:

1.    Leave to appeal is refused.

2.    The appellants pay the respondents’ costs to be agreed or, failing agreement, to be taxed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

THE COURT:

1    Mr David Hetao Gong, Gong Capital Pty Ltd and Sino Pt Pty Ltd (the Gong parties or the appellants) are dissatisfied with orders made by the primary judge on 22 November 2023, whereby separate extensions of time were granted pursuant to s 588FF(3)(b) of the Corporations Act 2001 for the commencement of any applications under s 588FF(1) against them. Those orders were made upon the application of Jeremy Joseph Nipps and Barry Wight in their capacity as joint and several liquidators of i-Prosperity Pty Ltd and eleven other corporations within the i-Prosperity Group (Group).

2    In these reasons each reference to a statutory provision is to the Corporations Act, unless otherwise stated.

3    Section 588FF(1) provides that orders may be made in relation to transactions which are voidable because of s 588FE. There is a time limit within which applications of that type may be commenced, being 3 years after the relation-back day or 12 months after the first appointment of a liquidator, whichever is the later: s 588FF (3). That period may be extended pursuant to s 588FF(3)(b). The primary judge was persuaded to extend time, as explained in her Honour’s reasons published on 22 November 2023: Nipps, in the Matter of i-Prosperity Pty Ltd (in liq) [2023] FCA 1446 (PJ).

4    The liquidators were initially appointed as joint and several administrators of a number of the Group entities on 15 July 2020 and were subsequently appointed as liquidators on 19 August 2020. Absent an extension of time, the liquidators were required to commence applications for relief in respect of voidable transactions either by 15 July or 17 September 2023 (the date varies by reference to the date of appointment of the liquidators). By an originating application accepted for filing on 15 June 2023, the liquidators applied for an extension of time. Subsequently, they relied upon an amended originating application filed on 20 November 2023. The application was unsuccessfully opposed by the Gong parties and by another group, which her Honour described as the Landerer parties. The Landerer parties have not sought to appeal the orders.

5    The primary judge described the business of the Group at PJ [1] as: “a fund management enterprise, whose activities related primarily to investment in Australian real estate for high net worth foreign investors, some of whom invested via the “Significant Investor Visa” program. The directors of the Group companies were Mr Menghong Gu and/or Mr Zhou Zhang Huang, each of whom departed Australia in mid-2020 and have not been heard of since.

6    At PJ [52], the primary judge summarised in tabular form the potential claims against the Gong parties and the Landerer parties:

7    Ultimately, the primary judge was persuaded to grant the application, despite the vigorous opposition of the Gong and Landerer parties. In summary, her Honour granted an extension of time until 15 March 2025 and 15 July 2025, respectively, for the transactions listed in annexures A and B to the orders. The reason for differing periods between the claim groups reflects the distinction drawn in the liquidators’ application. Broadly, group A comprises identified claims and ascertained counterparties requiring further investigation as to the prospects of success, and group B comprises claims where the liquidators are yet to determine the necessary defendants, and for that reason more time is required. The potential claims against the Gong parties fall within each group.

8    By their notice of appeal filed on 19 December 2023, the Gong parties challenge each of the orders made by the primary judge so far as the orders affect them and contend that the potential claims against them in annexures A and B should be deleted or, in the alternative, that the time for bringing those claims be extended to 30 June 2024. In oral argument, senior counsel for the Gong parties accepted that if the appeal were allowed on the alternative basis, the appropriate period of extension is three months from the date of the determination of the appeal.

9    A matter that the appellants did not initially address is whether the orders of the primary judge are interlocutory such that leave to appeal is necessary pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (FCA Act). The Court raised this issue with the parties prior to the commencement of the appeal and received supplementary submissions.

10    For the reasons that follow, we have concluded that leave to appeal is necessary, there is no merit in any of the appeal grounds, and for that reason leave should be refused.

The proceeding before the primary judge

11    The liquidators relied on affidavits made by Mr Nipps on 13 June and 3 November 2023, together with an affidavit of their solicitor Ms Hogarty made on 15 November 2023. The Gong parties relied on two affidavits made by their solicitor Mr Greenberg on 11 October and 13 November 2023, and an affidavit of Mr Gong made on 17 October 2023. Mr Nipps was cross-examined by counsel for the Gong parties. A very considerable quantity of documentation was placed before the primary judge. It is before us in the form of Part B of the Appeal Book comprising 10,305 pages and Part C comprising 422 pages, most of which is not germane to the issues. The appeal book should have been limited to the core documents relevant to each appeal ground. It should not be necessary to remind practitioners of the explicit requirement at r36.54 of the Federal Court Rules 2011 that Part B is an index, and only an index, and that Part C is limited to only the exhibits and evidence to which reference is made in the written submissions. It may also be observed that the manner of preparation of each of those parts in this appeal cannot be reconciled with the overarching purpose at ss 37M and 37N of the FCA Act.

12    Despite the volume of material adduced, and with commendable alacrity, the primary judge formulated and published comprehensive reasons six days after the completion of the hearing.

13    Her Honour summarised the evidence and made many findings of fact which are not challenged by the Gong parties’ grounds of appeal. It is convenient to reproduce relevant portions of her Honour’s reasons. Commencing at PJ [25] and concluding at [31] her Honour dealt with the liquidators’ explanation for the delay in the following terms:

25.     Mr Nipps’ evidence detailed, at great length, the challenges he and Mr Wight (the other liquidator) and their staff have experienced in untangling the affairs of the i-Prosperity group. According to Mr Nipps’ affidavits, the companies’ books and records were not organised in any logical manner, were incomplete, and untrustworthy (eg in relation to transactions being misdescribed in narrations). It is difficult, in any summary, to do justice to the extent of the difficulties encountered by the Liquidators. Since their appointment, the Liquidators have also been engaged in various pieces of litigation. Some of that litigation was initiated by the Liquidators — to avoid prejudicing interests in assets and to put another set of i-Prosperity companies (the Telco companies) into liquidation — but most of it was initiated by other parties, but required the involvement of the Liquidators for various reasons.

26.     The Liquidators have also been engaged in time-consuming tasks relating to engagement with creditors, providing information to creditors, other liquidators and some government regulators, as well as progressing statutory document requests, generally seeking information and progressing public examinations and related document request procedures. The Liquidators’ activities have been further hampered by live access to the relevant server having become unavailable after that server was seized by the Financial Crimes Squad of the New South Wales police force around 14 August 2020, and vast amounts of email data only becoming effectively searchable after being loaded into “Relativity” in June 2021.

27.     The Liquidators’ submissions summarised the ways in which their investigations have been hampered as follows:

(a)     The Companies’ affairs are very complex. Mr Nipps’ evidence is that some of the projects in which the Companies were involved entailed “extremely complicated structures”. The difficulties associated with obtaining an understanding of these commercial arrangements has been exacerbated by the counter-parties to the transactions being unco-operative in their responses to requests by the Liquidators for information and documentation.

(b)     The books and records of the Companies are intermingled and incomplete, requiring that the liquidators reconstruct records in order to be in a position to review them. The Companies did not deploy an adequate or consistent document management system. The characterisation of transactions in the Companies’ books and records is unreliable and requires independent verification. Particular difficulties have been encountered with the Companies’ recording of transactions denoted as “loans”, where the Liquidators are continuing to review 368 transactions (purportedly relating to different parties) processed through a “Director Loan Ledger” and 614 transactions processed through an “Investor Loan Ledger” for the two year period immediately prior to the liquidators’ appointment as administrators. The Liquidators have obtained documents from third parties relating to the affairs of the Companies, via subpoenas issued in proceedings in the Supreme Court of New South Wales, and have sought and obtained orders releasing the liquidators from the implied undertaking that would otherwise inhibit the use that could be made of those documents.

(c)     The format in which electronic data of the Companies is stored has made review of that data time-consuming. In addition, the server of IPP was confiscated by the Financial Crimes Squad of the New South Wales police force so that the Liquidators lost access (albeit remote access) to the server and could only access the information saved on it by requesting documents from a third party consultant who had imaged the server data at the appointment date.

(d)     The directors of the Companies have not been forthcoming with information that may have assisted or expedited the Liquidators’ investigations. Save for some preliminary communications immediately prior to, and following, the liquidators’ appointment, Mr Gu and Mr Huang have not been available to speak with the liquidators or the liquidators’ staff. The liquidators understand that both men left Australia in July or August 2020, following which neither has been contactable.

(e)     To assist with their investigation of the affairs of IPP and IPG Chats SPV, the Liquidators are conducting public examinations in the Supreme Court of Victoria. Examination summonses have resulted in the production of a large volume of documents to the Liquidators, the contents of which require review. The public examinations of the examinees is still pending, and the dates fixed for the examinations have been adjourned to a date to be fixed, but not before 29 September 2023.

(f)     Investigations into the Companies’ affairs have been delayed on account of the Liquidators needing to address the Companies’ ongoing involvement in various Court proceedings. As detailed in the Nipps Affidavit, one or other of the Companies was, or is, involved in three separate proceedings in the Supreme Court of New South Wales, applications for the appointment of receivers (in the Supreme Court of New South Wales and in this Court), a proceeding in the Supreme Court of Victoria and three other proceedings issued in this Court.

(g)     The Liquidators have undertaken the vast majority of their investigations with very limited funding. The Companies had very limited cash reserves at the time of the Liquidators’ appointment. Extensive efforts by the liquidators to obtain funding which are detailed in the Nipps Confidential Affidavit, have diverted the liquidators from investigative work.

28.     I accept those submissions as an accurate reflection of the evidence, and accept Mr Nipps’ evidence as to the material extent to which those impediments have hampered the Liquidators’ investigations.

29.     I also accept, based on Mr Nipps’ evidence, that the Liquidators and their staff have been diligently pursuing a range of tasks concerning the liquidations with which they are charged. The Liquidators have been, and are, faced with very difficult circumstances and it is in no way surprising that they have not been able to finalise their investigations and initiate claims without obtaining extensions. They have had to, and have, prioritised their work.

30.     In his first affidavit, Mr Nipps gave the following overview of the steps taken in the overall conduct of the administration and winding up of the Companies:

(a)     Undertaken a detailed review of the books and records of the Companies as produced to us on the date of our appointment;

(b)     Interviewed Michael Gu, the chief executive and director of the Companies;

(c)     Interviewed Harry Huang, the chief finance officer of the Companies and a former director of some of the Companies;

(d)     Undertaken interviews with a number of former employees and creditors of the Companies;

(e)     Prepared a detailed report to creditors for the purposes of s 439A of the Act and the second meeting of creditors;

(f)     Reviewed court documents relating to litigation that was on foot as against the Companies on the date of our appointment to the Companies;

(g)     Responded to subpoenas served on a number of the Companies;

(h)     Responded to a number of applications for leave under s 500(2) of the Act for proceedings to be commenced against one or more of the Companies;

(i)     Identified, preserved and realised a number of interests in assets available to one or more of the Companies, focusing in particular on possible proprietary interests held by the Companies and particularly those that were at risk if the Liquidators did not act swiftly;

(j)     Engaged with a number of potential funders on the possibility of those funders providing funding for the Liquidators to undertake further investigations and if warranted, litigation;

(k)     Engaged with creditors in response to queries made by them;

(l)     Served notices on a number of parties requiring the delivery of documents to the Liquidators;

(m)     Engaged in correspondence and attended meetings with creditors and the former advisors to the Companies to understand better the Companies’ affairs and to determine if there are any assets or claims to pursue;

(n)     Engaged in correspondence with Mr Gu’s trustee in bankruptcy, including submitting a proof of debt in the bankruptcy;

(o)     Provided regular written reports to the Committee of Inspection for IPP, convened a number of meetings of the Committee of Inspection for IPP and engaged with the other Committees of Inspection for the Companies as required;

(p)     Responded to numerous detailed requests for information from creditors both formally and informally, including pursuant to requests made under section 70-45 of the Insolvency Practice Schedule (Corporations). This required undertaking the following general steps for each request:

i.    engaging with creditors in respect of the request, including to address its scope, reasonableness and any funding we required to locate and provide the requested documents;

ii.    undertaking searches, and reviewing books and records, of the Companies to identify information responsive to the request, including where required, obtaining legal advice for matters such as privilege (by referring to this advice I do not waive any privilege attaching to such advice);

iii    preparing various flow of funds analyses (for example, the flow of funds between the Companies and/or the Companies and investors or investments) to assist creditors;

iv.    collating documents responsive to requests and providing them to creditors;

v.    preparing briefs to creditors; and

vi    attending meetings with creditors and, on occasions, their legal representatives;

(q)     Responded to a Notice to Produce issued by an Inspector appointed under section 20 of the Gaming and Liquor Administration Act 2007 (NSW) and a summons issued by Adam Bell SC appointed under the Casino Control Act 1992 (NSW) to provide information under section 8 of the Royal Commissions Act 1923 (NSW) to Mr Bell as part of his review of The Star and its Sydney Casino;

(r)     Responding to numerous requests made by, and otherwise engaging with, New South Wales (NSW) Police to provide information and otherwise deliver up books, records and equipment in the possession of the liquidators relating to the NSW Police’s ongoing investigations into persons associated with the Companies, and specifically Mr Gu and Mr Huang;

(s)     Responding to, and producing documents in accordance with a notification of review by the Australian Taxation Office (ATO) dated 28 May 2021 for the five financial years ending 30 June 2016 to 30 June 2020 in respect of the following entities: [list of entities omitted]

(t)     Responding to various requests made by other regulators and government bodies for information and/or to deliver up book and records of the Companies;

(u)     Undertaken recovery activities to recover funds relating to:

i.    a property registered in the name of Moli Ventures Pty Ltd (Moli Ventures) which had been purchased by G&H Partners Co. Pty Ltd using funds from IPP and was transferred to Moli Ventures without Moli Ventures paying sufficient consideration;

ii.    payments made by IPP and IPG Asset Services to repay part of a $17 million loan from Tor Asia Master Fund to IPG Chats SPV, which loan was guaranteed by a member of co-sureties;

iii    the payment by IPP of Stamp Duty for the acquisition of a development property in Rhodes, Sydney, which was registered to i-Prosperity Waterside Rhodes Pty Ltd;

iv    a property purchased off the plan by the company Elite Opera Holdings Pty Ltd, for which the deposit and FIRB fees were paid using IPP’s funds;

v.    a property purchased in the name of LZYH Pty Ltd for which IPP paid loan repayments to the registered mortgagee, National Australia Bank Ltd (NAB);

vi.    units held by IPP in the IPG Mortgage fund;

vii.    a voidable transaction against the ATO to recover preference payments made to the ATO;

viii.    funds held in bank accounts in the name of various Companies that were subject to freezing orders made by the Supreme Court of New South Wales prior to the Administrators’ appointment;

ix.    a loan advanced to John Landerer by IPP or IPG;

x.    a loan from IPP to Beef Life Burwood NSW Pty Ltd; and

xi.    realising units held by IPA in managed investment funds.

31.     In addition, the Liquidators have pursued public examinations in relation to their claims against Crown and Star. Those proceedings resulted in both casino entities producing substantial volumes of documents in response to orders for document production, an issue which is discussed further below.

14    None of those findings are directly challenged in the appeal grounds.

15    Returning to the findings of the primary judge, her Honour next dealt with the funding difficulties experienced by the liquidators and in general terms found that they were “largely unfunded”, that the total remuneration to date was in excess of $7.5 million, and that recoveries were in the order of $3.75 million. Some third-party funding had been secured to conduct compulsory examinations. The liquidators were then in discussions with funders and creditors in an endeavour to secure funding for the commencement of proceedings. Those discussions had not concluded by the time of the hearing before her Honour: PJ [32] – [33]. Some of those findings are challenged by reference to new evidence.

16    The primary judge then dealt with the funding that the liquidators had procured, commencing at PJ [34] and ending at [43]. Within that part of the analysis, the appellants specifically assert error at PJ [39]. Once again it is convenient to set out the entirety of her Honour’s analysis:

34.     One success that the liquidators did enjoy was “Fair Entitlements Guarantee” (FEG) funding that was secured in June 2022; the initial request for FEG funding was made in October 2021. As was stressed by the Gong parties, that funding was sought and obtained to conduct public examinations of Mr Gong, Mr Landerer, Crown and Star, but the Liquidators only proceeded to make public examination applications in respect of Star and Crown. In cross-examination, Mr Nipps explained that, as the work involved in the Star and Crown public examinations was more extensive than had been anticipated initially, the Liquidators made a “strategic decision” to pause on the Landerer and Gong public examinations and redirect all the funding to Crown and Star. Mr Nipps accepted that the work on the Landerer and Gong public examinations had been paused before it turned out that Crown and Star produced significant quantities of documents, putting pressure on the budget. Mr Nipps explained that the Liquidators focused on the Crown and Star investigations as the Gong and Landerer claims involved very complex transactions, whereas the casino claims involved a clearer forensic tracing exercise, which could be progressed more quickly.

35.     Mr Nipps’ evidence was that the Liquidators had continued to intend to proceed with public examination proceedings in respect of Mr Gong and Mr Landerer, while noting that, if sufficient documentation was produced, it may not be necessary to proceed with oral examinations. He rejected the suggestion that the Liquidators remained undecided about whether any public examination proceedings were necessary in respect of the Gong and Landerer parties. It appears from Mr Nipps’ evidence that the Liquidators’ solicitors were presently reviewing a package of material with a view to formulating public examination applications. Mr Nipps was otherwise not across the detail of the exact investigatory steps to be undertaken, as senior staff handled such matters.

36.     Mr Nipps rejected the suggestion that, with funding in mid-2022, public examination proceedings could have been initiated straight away. He pointed to the level of work needed to get to the point of actually issuing proceedings. Mr Nipps did not accept that the decision to focus on the casino claims was taken in July 2022:

Is it correct that in July of 2022 you made the decision to concentrate on the casinos and leave Mr Gong and Mr Landerer for the time being?---That’s not correct. It wasn’t July, and like I said I don’t recall specifically when between June and making that call — when Barry and I — Mr [Wight] and I had a discussion in consultation with our solicitors to focus on the casino claims. I don’t recall specifically when that decision was made.

37.     Returning to the funding in relation to the Star and Crown public examinations: while further funding was sought from the Attorney General’s Department (which administers FEG) in late October 2022, some further funding was not secured until February 2023. There was a lot of back and forth.

38.     I accept Mr Nipps’ evidence that the Liquidators have undertaken a great deal of work to secure third party funding (albeit they have so far enjoyed relatively modest success). I also accept that their lack of external funding has hampered the progress of the Liquidators’ investigations, although the degree to which that has slowed things down is hard to judge in view of the significant extent to which the liquidators have self-funded.

39.     In relation to the pausing of work on the Gong and Landerer investigations, the Liquidators ought not be criticised for devoting their FEG funding to seeing through the making of public examination applications in relation to Crown and Star, and reviewing the significant volume of material received from those entities. Accordingly, I do not accept that, as counsel for the Gong parties, urged, there was a decisive “fork in the road” in July 2022 and that the Liquidators’ election to focus their energies on the Crown and Landerer investigations was a strategic choice that should result in no extension being allowed. While the decision to focus on the Crown and Star investigations was indeed a strategic decision, it is one that has been satisfactorily explained. There was no decision to effectively abandon those investigations, which decision is sought to be reversed by an extension application late in the piece.

40.     Mr Nipps also explained the Liquidators’ view that the Gong and Landerer investigations would need to be progressed by compulsory court processes on the basis that they had seen how uncooperative Mr Gong and Mr Landerer were. The Gong parties drew out that much of the basis for this view of Mr Gong, as it was set out in Mr Nipps’ initial affidavit, concerned interactions with Mr Gong concerning his claims as a creditor in the liquidations, when the liquidators had had only one written exchange with him in relation to claims against the Gong parties over the period of the liquidation. In addressing this matter, Mr Nipps also observed that the Liquidators had had significant interactions with Mr Gong through litigation in which they were both involved.

41.     Having regard to these matters, the very limited attempts to engage with Mr Gong regarding potential claims against the Gong parties over the course of the liquidations is concerning. That said, given there was a great deal of interaction with Mr Gong in relation to other matters, there is a rational explanation for the Liquidators’ assessment that engagement needed to be pursued through compulsory processes.

42.     Counsel for the Landerer parties resisted the suggestion that Mr Landerer had been unhelpful in his dealings with the Liquidators. While, as counsel for the Landerer parties pointed out, Mr Landerer did provide some information and documents, some of his responses were decidedly unhelpful and flippant. For example, the Liquidators repeatedly asked Mr Landerer for details of amounts advanced in respect of the Regina Equities loan (which is further explained below). Instead of providing the details requested, Mr Landerer, a practising solicitor, said:

I am puzzled by your repeated request for a schedule of amounts advanced. If you do not have evidence of the advances, then perhaps I should get my money back and the balance credited.

43.     Mr Landerer was no more forthcoming when the Liquidators renewed their request in answer to this correspondence. Counsel for the Landerer parties suggested that, if the Liquidators were unhappy with Mr Landerer’s response, they could, and should, have commenced at that stage (first quarter of 2022) a public examination procedure to obtain the documents and information Mr Landerer was not providing. I do not accept that the Liquidators’ explanation for their delay in this case can be swept away on the basis that they should have commenced proceedings to obtain each discrete piece of information or documentation that the Landerer parties (or any other person, including the Gong parties) had not provided. That would be a deeply inefficient course to take and one that, not surprisingly, did not recommend itself to the Liquidators.

17    Having summarised the evidence and made these findings, the primary judge turned to the evidence regarding the potential claims at [44]-[59] in terms that are not challenged by the appeal grounds. It suffices for present purposes to observe that her Honour was satisfied that many of the claims involve substantial sums in multiples of millions of dollars, the sum of all potential claims exceeds $122 million, and there are potential claims against two casino operators: Crown Melbourne Ltd of $50 million and The Star Pty Ltd of $12.5 million: PJ [44] (the Casinos). Her Honour regarded the quantum of the claims as material for two reasons: first, that any unfairness which flows from creditor queue jumping is exacerbated where the amounts involved are large; and secondly, that recovering funds pursuant to claims is the only prospect that a dividend will be paid to the creditors: PJ [45]. The primary judge accepted that each group of claims in annexures A and B were the subject of continuing investigation, and that the liquidators were not then in a position to assess the prospects of success: PJ [46] – [47]. Her Honour accepted that the difference in the periods of extension sought by the liquidators for the identified group claims reflected the stage which the investigations had reached: PJ [49] – [50]. Further, at PJ [51] her Honour accepted the evidence of Mr Nipps that in order to “confidently determine whether to bring applications” the liquidators would need to undertake the following steps:

(1)     obtain further books and records from the companies;

(2)     conduct a review of any further recovered books and records from the companies;

(3)     complete the review of the documents that have been produced and are still to be produced in the Examination Proceedings for the Crown and Star claims;

(4)     consider whether there is a need to undertake any further public examinations of persons that may have information in relation to the examinable affairs of the companies and complete such examinations;

(5)     conduct a detailed investigation into a number of potential claims to substantiate the claims prior to taking any steps towards making the necessary application(s);

(6)     identify any further potential claims;

(7)     obtain advice as to the merits of any claims and the potential benefit to the companies in prosecuting the claim — including assessing the “risk-reward” ratio of the claim to determine whether the potential recovery (and the likelihood of succeeding in the prosecutions) warrants the time and cost of prosecuting the claim;

(8)     prepare court documents required for the commencement of proceedings to seek relief in respect of the impugned transactions; and

(9)     brief counsel in regards to prosecuting one or more of the potential claims.

18    At PJ [52] – [59], the primary judge addressed the potential claims against the Gong and Landerer parties. Relevantly, Mr Gong received payments exceeding $18 million in the months prior to the external administration of i-Prosperity, which he explained in his evidence as the repayment of various loans advanced to companies within the Group. Mr Gong has lodged a proof of debt with the liquidators of approximately $43 million. At PJ [54] her Honour referred to evidence from Mr Nipps that Mr Gong is not a detached third-party creditor in that he is referred to as the general manager of the Group in email correspondence in 2017 and 2018, his wife was an employee of one or more of the Group companies from 1 April 2019, and he was a director or had shareholder interests in several entities which formed “part of the broader i-Prosperity group of companies”. Overall, her Honour concluded at PJ [60] that:

In my view, the identified claims have sufficient apparent substance to warrant the Liquidators continuing to investigate them in order to ascertain whether they have sufficient merit, and prospects of recovery, to warrant litigation.

19    That finding is not challenged by the grounds of appeal.

20    The primary judge next dealt with the question of prejudice from PJ [61] to [68]. Other than general prejudice which ordinarily flows from delay, her Honour dealt with the specific claim of Mr Gong at PJ [64] – [67] as follows:

64.    Mr Gong claimed specific prejudice on a number of bases. First, he said that, in December 2022 he accepted a global settlement offer from Mr Landerer, which included the Regina Equities loan. Mr Gong deposed that, in deciding to settle with Mr Landerer, he took into account that the Liquidators had not, to that point, pursued a claim in respect of the Regina Equities loan, even though they had pursued another loan claim with some success. Mr Gong said he believed that there were “reasonable prospects” that the Liquidators had by then abandoned the Regina Equities loan, although he said in his evidence that he did appreciate the risk that the Liquidators may seek to challenge the loan.

65.    In my assessment, Mr Gong made a commercial decision to settle with Mr Landerer and was prepared to take the chance that the Liquidators would yet pursue the Regina Equities loan. He settled with Mr Landerer in December 2022, eight months before the expiry of the default period provided for in s 588FF(3)(a) of the Act. This was not a deal agreed to as the final days of that period ran down. I do not consider that the extension of the period during which Mr Gong remains exposed to a risk he had already decided to run constitutes a material prejudice on the facts of this case.

66.    Mr Gong also said that Mr Huang had stopped responding to his messages in February 2022 and he was of the view that, if the Liquidators obtained an extension of time, he will not be able to have Mr Huang assist him with any proceedings brought against him. Mr Gong thought that Mr Huang might have been more willing to assist him if proceedings had been commenced by the Liquidators earlier. It appears from Mr Gong’s evidence that Mr Huang stayed in touch with him until Mr Gong made it clear he would not be providing any more loans to Mr Huang. I do not consider the fact of Mr Gong’s continued lack of access to Mr Huang, who ceased contact for apparently commercial reasons — viz, Mr Gong making it clear that no more loans would be forthcoming — constitutes a material prejudice that ought to be taken into account.

67.    The third and final form of prejudice raised by Mr Gong was that his records are stored at two locations in Australia, but he now spends much of the year in China to attend to business concerns, which would make it more difficult to access documents and provide prompt instructions to his solicitors. Mr Gong’s living arrangements are a matter for him. If he wished to, no doubt he could arrange for such hard copy records as are presently in Australia, to be delivered to him in China. I do not accept this is a material form of prejudice that ought to be taken into account.

21    Those findings caused the primary judge to conclude at PJ [68] that specific prejudice had not been established. Those findings and that conclusion are not challenged by the grounds of appeal.

22    Finally, the primary judge explained the exercise of her discretion at PJ [69] – [79]. Although the appellants’ grounds of appeal only identify error within this part of the analysis at PJ [70], [73], and [78] – [79], in oral submissions senior counsel for the appellants added [75] and [76] to the list of complaints. A proper understanding of the entirety of her Honour’s reasoning within those paragraphs is necessary to the resolution of the appeal grounds, and for that reason we set out each relevant paragraph:

69.     The Liquidators accept that there has been significant delay, and that the extensions they seek are at the outer edges, if not beyond, the length of extensions that have previously been granted by this Court. It cannot be gainsaid that the Liquidators have been aware of a number of the claims they wish to continue to investigate, with a view to potential prosecution, for some time. But being aware of the existence of a potential claim is one thing; such claims had to be investigated, and their prospects assessed, before the Liquidators could responsibly commence proceedings. I also accept that the Liquidators have been faced with a momentous and complicated task, the magnitude and difficulty of which has only been compounded by the directors disappearing (and therefore offering no assistance in untangling the companies’ complicated affairs). While aware of many potential claims, they have not been able to complete their investigations due to the need to respond to the vast range of matters and enquiries to which Mr Nipps deposed. The Liquidators have not been sitting on their hands, which is a significant point of distinction from the circumstances addressed by Ward J (as her Honour then was) in Re Clarecastle.

70.     As the Liquidators are seeking an extension to put themselves in a position where they can properly decide whether or not to bring proceedings, it is not necessary to conduct a preliminary enquiry into the merits: see, eg, Green at [15] (Austin J); Chin, Re Agatha Trading Pty Ltd (in liq) [2020] FCA 991 at [35] (Markovic J); Langdon, Re Phoenix Institute of Australia Pty Ltd [2021] FCA 180 at [33] (Markovic J); Walker at [44] (Nicholas J). The question is whether the Liquidators should be granted an extension in which to pursue potential claims. The Liquidators have set out, in some detail, the potential claims they have identified, and have detailed the enquiries they consider they need to make, and the advice they will require, in order to finalise their views on whether or not particular claims should be pursued.

71.     With the exception of some specific prejudice being experienced by Mr Landerer’s firm, extending the time for the pursuit of voidable transactions will not occasion specific prejudice, although I accept that any extension necessarily occasions presumptive, or general, prejudice through the passage of time.

72.     I am mindful that Parliament has set a limitation period of three years. That limit was set for the policy reasons I have referred to above. Nevertheless, Parliament also saw fit to provide for Liquidators to have the capacity to obtain a single extension from the Court. In my view, while mindful of purposes which limitations serve and the fact that the statutory regime anticipates that sometimes the best course is for loss to lie where it falls, the Court should not shy away from exercising the power to extend the period in appropriate cases. The default three year limit may well be sufficient in most liquidations, but these liquidations involve the affairs of multiple companies and have been beset by difficulties arising on numerous fronts. In my view, interests of justice do not lie in foreclosing the possibility of further investigations, and potential litigation of claims.

73.     Ultimately, I must consider what is fair and just in all the circumstances. In my view, the time period for commencing voidable transaction proceedings should be extended for the potential claims that the liquidators have identified. I include in this the potential claims against the Gong and the Landerer parties. While the Liquidators did pause their preparations in respect of the intended public examinations of Mr Landerer and Mr Gong, the need to prioritise work and the allocation of funding was a feature of the circumstances they faced; it was not tantamount to a decision to simply let the clock run down on a limitation period. Moreover, Mr Gong and Mr Landerer were both, as referred to above, involved in the affairs of the i-Prosperity group in ways that set them apart from the general body of persons dealing with a company that subsequently enters liquidation.

74.     The potential claims involve a significant aggregate quantum. With the exception of some claims — which are of such a modest quantum that it would not make sense to pursue them independently of other claims against the same entities — most of the claims identified by the Liquidators are also each of significant quantum. Of course, it must be recognised that the claims are, at this stage, merely potential claims, but in my view the Liquidators ought to have time in which to pursue their investigations of those claims, to see if they have merit and ought to be pursued. Pursuit of substantial claims presents the only prospect of unsecured creditors receiving any dividend.

75.     For these reasons, I consider that it is appropriate to grant the Liquidators extensions in respect of the claims identified in Annexure A and Annexure B to the originating application. I am not, however, satisfied that there should be a general “shelf order” for two reasons. First, the evidence of Mr Nipps shows that, over the last three years, the Liquidators have obtained an extensive knowledge of the affairs of the i-Prosperity group. While the Liquidators have been unable to pursue and finalise the investigation of numerous identified potential claims, they have identified a large number of potential claims. In my view, it is unlikely that the liquidators have, in the course of all their work over the past three years, simply failed to notice a significant potential claim.

76.     Secondly, with the exception of those who may face the claims specified in items 1 and 2 of Annexure A to the originating application (and potentially claims in relation to the Chatswood Central Shopping Centre claims specified in item 5 of Annexure B), other potentially affected persons have been notified of the Liquidators’ application, which was made prior to the expiration of the original three year period. The objective of certainty in commercial affairs is more powerful in respect of this group of potential defendants; unlike Mr Gong, Mr Landerer and the other interested parties, they know nothing of any potential that claims may be advanced beyond the default three year time frame. Nor, in the absence of any compelling reason to think that significant claims have remained unidentified, are there any strong countervailing factors.

77.     While counsel for the Liquidators noted that, if some presently unknown claim were uncovered, it cannot be pursued for the benefit of creditors of the companies if there is no shelf order, that is a function of the statutory regime; it is not, of itself, a factor that warrants extending the time limit when there is nothing to suggest that there is a real chance that material claims have, in all the work done to date, simply been overlooked.

78.     The final question is how long the extensions should be. The present application was filed in June 2023. At that stage, the extension sought in respect of the claims in Annexure A was the later of 15 January 2025, or 18 months from the date of orders being made. In the case of the claims in Annexure B, it was the later of 15 July 2025 or the date that is 24 months from the date of orders being made. In submissions, counsel for the Liquidators accepted that the passage of time since the application was filed is relevant, but submitted that the Liquidators have been in a state of uncertainty since the Gong parties, and then the Landerer parties, indicated they wished to oppose the application. Counsel also noted that the hearing of the application has been significantly delayed by the inability of the Gong and the Landerer parties to comply with the court ordered timetables.

79.     I accept that the time that has passed since the application was filed should not simply “come off the top” of the extensions sought. However, to allow 24 months (in the case of the Annexure B claims) would extend the period until late November 2025, which is an exceptionally long period. As a benchmark, doubling the statutory three year period would take the date to 15 July 2026 (or 17 September 2026 in the case of IPG Chats SPV). In my view, balancing the competing considerations, the appropriate course is to:

(a)     limit the extension in respect of the claims in Annexure A to 15 March 2025, which allows for two end of year periods being encompassed in the period of the extension;

(b)     limit the extension to the specific date sought by the liquidators in respect of the Annexure B claims, being 15 July 2025, which is just short of 20 months from the date of my orders.

Is leave to appeal required?

23    As has been mentioned, the notice of appeal does not seek leave to appeal from the orders of the primary judge.

24    Section 24(1A) of the FCA Act provides that an appeal shall not be brought from an interlocutory judgment unless the Court or a Judge gives leave to appeal. If the judgment is final, there is no requirement to seek leave to appeal.

25    Prior to the hearing of the appeal, the Court asked the parties to consider whether the orders of the primary judge were interlocutory and, if so, whether the appeal was competent absent a grant of leave to appeal.

26    The appellants submitted that the orders of the primary judge were final orders, such that leave to appeal was not required. Alternatively, if the orders were interlocutory, the appellants made an oral application for leave to appeal and submitted that leave should be granted.

27    The respondents also submitted that the orders of the primary judge were final orders but that, if leave to appeal was required, leave should be refused.

28    The question whether orders are final or interlocutory for the purpose of the rules relating to appeals “is one productive of much difficulty”: Carr v Finance Corporation of Australia Limited [No 1] [1981] HCA 20; 147 CLR 246 at 248 (Gibbs CJ).

29    The test for determining whether an order is final or interlocutory is “whether the order, as made, finally determines the rights of the parties in a principal cause pending between them”: Re Luck [2003] HCA 70; 78 ALJR 177 at 178 [4]; 203 ALR 1 at 2 [4] (McHugh ACJ, Gummow and Heydon JJ), citing Bienstein v Bienstein [2003] HCA 7; 195 ALR 225 at 230 [25] (McHugh, Kirby and Callinan JJ); Hall v Nominal Defendant [1966] HCA 36; 117 CLR 423 at 443 (Windeyer J).

30    Whether the rights of the parties are finally determined by the order will depend on whether the legal, not the practical, effect of the judgment is final: Carr at 248 (Gibbs CJ); Re Luck at [4] (McHugh ACJ, Gummow and Heydon JJ). If it is open to the parties to bring another application then the legal effect is not final, even if the practical effect is to preclude the party from making a second application because it will inevitably fail: Carr at 248 (Gibbs CJ) and 256 (Mason J).

31    An order granting or refusing an extension of time to commence a proceeding for personal injuries in the context of limitation provisions has long been considered interlocutory as it does not finally determine any matter between the parties: Dousi v Colgate Palmolive Pty Ltd (1987) 9 NSWLR 374 at 379 (Kirby P and Glass JA); Paramasivam v Flynn [1998] FCA 1711; 90 FCR 489 at 493 (Miles, Lehane and Weinberg JJ); D. A. Christie Pty Ltd v Baker [1996] 2 VR 582 at 601 – 602 (Hayne JA) and 606 (Charles JA).

32    The question whether an order extending time under s 588FF(3)(b) is a final order, or an interlocutory order requiring leave to appeal such order, has not been the subject of extensive judicial consideration.

33    In a number of intermediate appellate decisions concerning extensions of time under s 588FF(3)(b), the question of leave to appeal has not arisen: see Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17 (Williams and Jerrard JJA, Fryberg J); and 89 Burswood Road Pty Ltd v Harris and Kirman as joint and several liquidators of GH1 Pty Ltd (in liq) [2021] WASCA 178 (Buss P, Mitchell JA, Tottle J).

34    The appellants identified two intermediate appellate authorities concerning extensions of time under s 588F(3)(b) which considered the question of whether leave to appeal is required: JP Morgan Chase Bank, National Association v Fletcher [2014] NSWCA 31; 85 NSWLR 644 (Beazley P, Macfarlan and Gleeson JJA) and Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2014] NSWCA 148; 87 NSWLR 728 (Bathurst CJ, Beazley P, Macfarlan, Barrett and Gleeson JJA). The appellants submit that these authorities support, or are not inconsistent with, the position that leave to appeal is not required.

35    In JP Morgan, the liquidators made an application for an extension of time under s 588FF(3)(b) and the court fixed a longer period for the making of an application under s 588FF(1). After the three-year period specified in s 588FF(3)(a) had expired but within the extended time ordered by the court, the liquidators applied for and were granted a variation of that order under r 36.16(2)(b) of the Uniform Civil Procedure Rules (UCPR) so as to substitute a later date by which the liquidators could make an application under s 588FF(1).

36    The liquidators commenced proceedings under s 588FF(1), which could only be brought if the extension order as varied was validly made. Applications were made to set aside the extension order as varied. The applications were dismissed. Appeals were commenced against the dismissal, for which leave was required and granted.

37    The New South Wales Court of Appeal granted leave, but dismissed the appeal (Macfarlan and Gleeson JJA, Beazley P dissenting). That decision was reversed in Grant Samuel Corporate Finance Pty Ltd v Fletcher [2015] HCA 8; 254 CLR 477 (French CJ, Hayne, Kiefel, Bell, Gageler and Keane JJ), to which we will return.

38    Although Macfarlan and Gleeson JJA came to a different conclusion on the appeal, at [149] (Macfarlan JA) and [166] (Gleeson JA), their Honours agreed with the statement of Beazley P at [3] that:

The appellants require leave to bring the appeals. Leave should be granted. The questions raised have a high degree of significance to the due administration of companies in liquidation. There are also substantial sums of money at stake for which the appellants may be liable to pay back as unfair preferences in the liquidation …

39    In Fortress Credit, the Court of Appeal considered whether s 588FF(3)(b) authorised the making of a “shelf order”, that is, an order generally extending time for a liquidator to make an application under s 588FF(1), rather than in relation to identified transactions. The Court (Bathurst CJ, Beazley P, Macfarlan, Barrett and Gleeson JJA) held that s 588FF(3)(b) authorised the making of shelf orders. The High Court agreed and dismissed the appeal: Fortress Credit Corporation Australia (II) Pty Ltd v Fletcher [2015] HCA 10; 254 CLR 489 (Fortress Credit (HCA)).

40    In Fortress Credit, Bathurst CJ observed at [85] that:

Whether or not leave to appeal is necessary may be debateable. However, the respondents accepted that to the extent necessary, leave should be granted.

41    Beazley P at [114] indicated that she had read the draft judgment of Bathurst CJ and agreed with the proposed orders.

42    The appellants in the present proceeding submitted that Beazley P’s approach in JP Morgan should not materially bear on the issue and the high point is the statement of Bathurst CJ in Fortress Credit, with which her Honour agreed. We agree that the issue was not considered in detail in those authorities and that the resolution of the issue must be determined by considering whether the orders of the primary judge were final or interlocutory.

43    The appellants submitted that the orders of the primary judge were final orders because:

(1)    the text of s 588FF(3)(b) forecloses the making of a subsequent application under that provision, as was made clear by the High Court in Grant Samuel;

(2)    the Court’s power to make an extension order under s 588FF(3)(b) cannot be supplemented or varied by rules of procedure: Grant Samuel at [23];

(3)    this is not an instance where the prospects of a subsequent application are constrained as a practical matter – it is an instance where there is no opportunity for a subsequent application as a legal matter;

(4)    the only, let alone principal, cause between the parties was the proceeding before the primary judge and the orders concluded that proceeding.

44    In Grant Samuel, the High Court considered whether a court, on an application made outside the s 588FF(3)(a) period, but within an extended period ordered under s 588FF(3)(b) on an application made in the s 588FF(3)(a) period, could exercise power under the UCPR to further extend time for the making of an application under s 588FF(1). This directed attention to s 79 of the Judiciary Act 1903 (Cth) and whether s 55FF(3) is the exclusive source of power to extend time for the purpose of s 588FF(1) such that it leaves no room for the operation of the UCPR.

45    The Court said at [22] – [24]:

22.    Section 588FF(3) provides that an application under s 588FF(1) "may only be made" within the periods set out in pars (a) and (b) of s 588FF(3). The phrase "may only be made" should be read with both paragraphs. So understood, the term "may only" has the effect of defining the jurisdiction of the court by imposing a requirement as to time as an essential condition of the right conferred by s 588FF(1) to bring proceedings for orders with respect to voidable transactions. An element of that right is that it must be exercised within the time specified. This is what is conveyed by Gordon v Tolcher.

23.    The only power given to a court to vary the para (a) period is that given by s 588FF(3)(b). That power may not be supplemented, nor varied, by rules of procedure of the court to which an application for extension of time is made. The rules of courts of the States and Territories cannot apply so as to vary the time dictated by s 588FF(3) for the bringing of a proceeding under s 588FF(1), because s 588FF(3) otherwise provides. It provides otherwise in the sense that it is inconsistent with so much of those rules as would permit variation of the time fixed by the extension order.

24.     The extension order made on 30 May 2011 was within power. As a result of that order, proceedings under s 588FF(1) could be brought by 3 October 2011, but no further extension could be granted once the par (a) period had elapsed. The UCPR could not be utilised to further extend the time within which proceedings under s 588FF(1) could be brought.

46    The High Court considered that Gordon v Tolcher [2006] HCA 62; 231 CLR 334 (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), which held that the procedural regulation of a matter after an application under s 588FF(1) was commenced may be left to State or Territory procedural law, was distinguishable: Grant Samuel at [13] – [15].

47    In BP Australia Ltd v Brown [2003] NSWCA 216; 58 NSWLR 322, Spigelman CJ at [118] referred to “a single determinate extension of time” under s 588FF(3)(b):

Section 588FF(3) does not have the effect of requiring all applications to be brought within a short period of time. It does, however, have the effect of requiring those who wish to keep open the option to do so, to determine that they do wish to do so within the three year period and to seek a determinate extension of the period. One thing that must be decided within the three year period is how long the process of deciding whether to pursue voidable transactions will take. Eventually, investigations to overcome deficiencies of information or the pursuit of funding must cease. Parliament has identified a reasonable time for such matters to occur, subject to a single determinate extension of time. [bold emphasis added]

48    The above passage was approved by the High Court in Gordon at [39].

49    In JP Morgan, Beazley P at [84], (Macfarlan and Gleeson JJA agreeing at [149] and [166]) said that s 588FF(3)(b) comprehensively governs the circumstances in which an application for an extension of time may be made and that:

In coming to that conclusion, I do not foreclose the possibility that more than one application for an extension may be brought, provided that each application is brought within the three-year period. I appreciate that this approach is not in accordance with the view taken by Spigelman CJ in BP Australia v Brown that there can only be a single determinate application. However, as the appellants recognised, the absolutism of that statement may be debatable. [bold emphasis added]

50    The passage in BP Australia at [118] (set out at paragraph 47 above) makes clear that Spigelman CJ referred to a “single determinate extension of time”, not a “single determinate application”.

51    Furthermore, in BP Australia, Spigelman CJ said in obiter at [208]:

Furthermore, the test of finality is the determination of the rights of the parties in a “principal cause”, not the determination of the application before the court. (See Hall v Nominal Defendant (1966) 117 CLR 423 at 443, per Windeyer J. See generally Southern Cross Exploration NL v Fire and All Risks Insurance Co Ltd (No 2) (1990) 21 NSWLR 200.) There may be cases where ancillary proceedings are appropriately characterised as the lis before the court. However, an application for an extension of time is not, in my opinion, able to be so characterised. The “principal cause” is the application under s 588FF(1).

52    As the High Court made clear in Grant Samuel, s 588FF(3)(b) is the only source of power to grant an order extending the time for an application under s 588FF(1) to be made, provided the application under s 588FF(3)(b) is made within the period specified in s 588FF(3)(a). We do not regard anything said in Grant Samuel or Gordon as indicating that only one application under s 588FF(3)(b) can be made. Consistently with Spigelman CJ’s reference to a “single determinate extension of time”, there can only be a single extension under s 588FF(3)(b) and, consistently with Grant Samuel, an extension order cannot subsequently be varied by procedural rules. However, that does not preclude a subsequent application if an application under s 588FF(3)(b) fails, provided the subsequent application is made in the s 588FF(3)(a) period. Therefore, s 588FF(3)(b) is not an instance where a subsequent application would be constrained as a legal matter. Nor do we regard an order in respect of an application under s 588FF(3)(b) as determining the rights of the parties in a principal cause pending between them for the reasons given by Spigelman CJ in BP Australia (at [208]).

53    Finally, the respondents relied on Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 69 at [66] where Barrett J observed that “[a]n application under s 588FF(3)(b) is not an interlocutory application in any proceeding” and so, the respondents submitted, leave to appeal is not required. We observe, however, that the respondents in Onefone had given undertakings not to raise a time bar by way of defence to any action commenced by the liquidator and agreed to consent to a variation order extending the s 588FF(3)(a) period. Barrett J considered that the extension order was an order that determined a “claim for relief” because it was a “claim … justiciable in the court”, such that the power of variation under the UCPR did not apply. We do not consider that the decision in Onefone is on point and, moreover, it was decided before Grant Samuel which makes clear that extension orders under s 588FF(3)(b) cannot be varied under court procedural rules. To the extent that the observation of Barrett J at [66] suggests that an application under s 588FF(3)(b) is not an interlocutory application in any proceeding, it tends to underscore that an order under s 588FF(3)(b) does not determine a “cause pending between [the parties]”.

54    For those reasons we consider that leave to appeal is required and, for the reasons that follow, leave should be refused.

The appellants’ contentions of error

55    The appellants accept that they must overcome the usual barrier to a successful appeal against the exercise of a discretion. The deferential standard of review applies, because the legal criterion on which s 588FF(3)(b) operates “tolerates a range of outcomes” unique to the circumstances of the individual case: Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541 at [49] (Gageler J). The grounds of appeal variously contend that the primary judge’s discretion miscarried in that she acted upon a wrong principle, took into account materially irrelevant considerations, mistook the evidence, failed to take account of materially relevant matters or that the outcome was unreasonable or plainly unjust. In other words, the appellants rely on the entire catalogue of errors set out in House v The King [1936] HCA 40; 55 CLR 499 at 505 (Dixon, Evatt and McTiernan JJ).

56    In addition, the appellants must establish on the leave question that the decision of the primary judge is attended by sufficient doubt to warrant reconsideration and that substantial injustice would result to the appellants if leave were to be refused: Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 at 398-399 (Sheppard, Burchett and Heerey JJ). On the first question, in some cases (this being one because the court received fulsome arguments on each appeal ground) it is appropriate to undertake more than an impressionistic evaluation of the merits: Tu’uta v Katoa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] HCA 28; 276 CLR 579 (Kiefel CJ, Gageler, Keane and Gleeson JJ).

57    More particularly, the appellants’ grounds of appeal are as follows:

1.    The primary judge erred, and the exercise of her discretion miscarried, at [39] and [73] by:

(a)    acting upon a wrong principle, in that her Honour proceeded on the basis that the Liquidators' strategic decision to focus on the investigations into claims against Crown and Star would not weigh against the grant of an extension of time, unless such a decision amounted to an effective abandonment of any investigation of inter alios the Gong Parties or a decision to simply let the clock run down on the Limitation Period(s); and

(b)    failing to take into account a material consideration against the grant of an extension of time, namely that the Liquidators made a decision to delay any investigations of inter alios the Gong Parties and/or the pursuit of claims against them.

2.    The primary judge erred, and the exercise of her discretion miscarried, at [70] by mistaking the evidence, such that her Honour concluded that the Liquidators had set out, in some detail, the potential claims they have identified, and have detailed the enquiries they consider they need to make, and the advice they will require, in order to finalise their views on whether or not particular claims should be pursued, where:

(a)    the Liquidators' affidavit material only made a series of generic assertions about what further steps needed to be undertaken;

(b)    Mr Nipps, in his oral evidence, professed ignorance of the state of the investigations and what was required to be done; and

(c)    the Liquidators had not undertaken any or any proper analysis so as to be able to provide any sufficient estimate as to how long any investigations into, or prosecution of, the claims in Annexure B against the Gong Parties would take or say whether such work would be undertaken at all.

3.    The primary judge erred, and the exercise of her discretion miscarried, at [73] by:

(a)    acting upon a wrong principle, in that her Honour proceeded on the basis that the public policy as to the importance of commercial certainty should be set at naught in relation to the claims set out in items 1 to 7 of Annexure B because inter alios Mr Gong was involved in the affairs of the i-Prosperity Group in ways that set him apart from the general body of persons dealing with a company that subsequently enters liquidation; and

(b)    failing to take into account a material consideration, namely the importance of certainty for those, including the Gong Parties, who have entered into transactions with the companies in the i-Prosperity Group during the periods in respect of which the identified transactions may be voidable.

4.    The primary judge mistook the evidence and/or failed to take into account relevant considerations, in finding at [39] that the pausing of the pursuit of the Gong Parties in or shortly after July 2022 was satisfactorily explained in circumstances where:

(a)    the Liquidators had full knowledge of the claims in items 1, 2, 3 and 4 of Schedule B by no later than 23 February 2022;

(b)    the Liquidators had never made any inquiry of the Gong Parties in respect of items 5, 6 and 7 of Schedule B during the Limitation Period(s);

(c)    the Liquidators had been granted funding to commence public examinations of inter alios the Gong Parties in July 2022 but, despite being in funds to do so, did not commence any public examination of the Gong Parties but instead decided to focus on and allocated that funding to the public examinations in respect of Crown and Star;

(d)    the Liquidators commenced the public examination process against Crown and Star in July 2022 but decided not to do the same against inter alios the Gong Parties, despite there being, at that time, no issue with the quantum of funding (which issue only emerged in October 2022); and

(e)    the claims against inter alios the Gong Parties were said in Mr Nipps’ oral evidence to have been more complex than the claims against Crown and Star which were said to have involved a clearer exercise which could be progressed more quickly.

5.    The primary judge's exercise of discretion miscarried at [79] because it was unreasonable or plainly unjust to grant an extension of just short of 20 months in respect of the Annexure B claims having regard to:

(a)    the matters referred to in grounds 4(a) to (e) above; and/or

(b)    the extent of her Honour's reasoning at [78]-[79].

In these grounds of appeal:

(a)    Annexure B means Annexure B to the Originating Process filed 14 June 2023 and amended on 20 November 2023;

(b)    Crown means Crown Melbourne Ltd (ACN 006 973 262), being the Sixth Interested Party in the proceedings below;

(c)    Star means The Star Pty Ltd (ACN 060 510 410), being the Seventh Interested Party in the proceedings below;

(d)    the Gong Parties means the Appellants:

(i)    Mr David Hetao Gong;

(ii)    Gong Capital Pty Ltd (ACN 618 474 623) in its own capacity and in its capacity as trustee for the IPG Sino Chatswood Central Fund; and

(iii)    Sino PT Pty Ltd (ACN 619 467 480),

being the First, Second and Third Interested Parties in the proceedings below;

(e)    the i-Prosperity Group refers to those companies over which the Liquidators had been appointed and in which capacity they are and have been acting as liquidators;

(f)    the Limitation Period(s) means the relevant periods during which the Liquidators would have been able to commence an application in respect of a voidable transaction under s 588FF(3) of the Corporations Act 2001 (Cth) here being:

(i)    in respect of IPG Chats SPY Pty Ltd (ACN 629 983 919) (in liquidation), the period from 17 September 2023 to 17 September 2023; and

(ii)    in respect of all remaining companies, the period from 15 July 2020 to 15 July 2023;

(g)    the Liquidators means the First to Twelfth Respondents; and

(h)    Mr Gong means the First Appellant, Mr David Hetao Gong.

THE application to lead fresh evidence

58    By an interlocutory application filed on 8 March 2024, the appellants seek leave to adduce evidence that was not before the primary judge, being the 2023 Annual Administration Return (2023 Return) for i-Prosperity dated 17 November 2023. The respondents do not oppose a grant of leave. We are satisfied that leave should be granted pursuant to s 27 of the FCA Act. The 2023 Return is relevant to other annual returns for earlier periods that were before the primary judge. In addition, the information contained in it is relevant to the grounds of appeal in that it bears upon what funding was available to the liquidators to investigate the transactions involving the Gong parties (primarily ground 4). It is therefore evidence which, had it been before the primary judge, may have been taken into account as relevant in the exercise of her Honour’s discretion.

59    The appellants contend that this document supports the broad contention that the liquidators had funds available that could have been used to advance investigations into transactions relevant to the Gong parties. In the affidavit of their solicitor in support of the application it is contended that the document discloses that an additional $3,018,379.97 was received within the period 19 August 2022 to 18 August 2023, that additional payments of $2,897,061.56 were made by the liquidators within that period (including approximately $929,000 for their fees and disbursements), the total effect of which was that the liquidators had received approximately $6.4 million since the date of their appointment and had made payments of approximately $6.18 million. The appellants go so far as to submit that if this evidence had been before the primary judge, the outcome “would very probably have been different”.

60    The respondents resist the drawing of this conclusion. In their submission the document simply confirms that the conduct of the liquidation has been constrained by a lack of funding which is demonstrated by the fact that, of approved liquidator remuneration of approximately $4.8 million, only approximately $2.4 million has been paid which is approximately 51% of the approved amount. It is further submitted that the document discloses that as at 18 August 2023 the cash held at bank was $210,270.48 which the liquidators will be required to apply to the continuing costs of the liquidation – noting that in the 12 months to 18 August 2023 the liquidators had paid out approximately $984,000 for that purpose.

61    We return to the competing considerations when addressing ground 4 of the proposed appeal.

The statutory scheme

62    Section 588FF(1) provides for orders that may be made upon the application of a company’s liquidator if a court is satisfied that a transaction is voidable because of s 588FE. Section 588FF(3) provides:

An application under subsection (1) may only be made:

(a)    during the period beginning on the relation - back day and ending:

(i)    3 years after the relation - back day; or

(ii)    12 months after the first appointment of a liquidator in relation to the winding up of the company;

whichever is the later; or

(b)    within such longer period as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period.

63    In Fortress Credit (HCA) the Court was concerned with whether the provision authorised the making of shelf orders: that is, whether the discretionary power can only be exercised in relation to identified transactions. The Court concluded that shelf orders may be made in appropriate cases. French CJ, Hayne, Kiefel, Gageler and Keane JJ addressed the discretion at [24] as follows:

The function of s 588FF(3)(b), which reflects its immediate purpose, is to confer a discretion on the court to mitigate, in an appropriate case, the rigours of the time limits imposed by par (a). That is a discretion to be exercised having regard to the scope and purposes of Pt 5.7B, characterised in the Harmer Report as the continuing "policy" which underpinned its recommendations. That policy included the avoidance of transactions by which an insolvent company has disposed of property in circumstances that are regarded by the legislature as unfair to the general body of unsecured creditors. It is, however, a policy qualified in its application by the requirement that liquidators be placed under a reasonable time limitation for taking action under the voidable transaction provisions. A purpose of that qualification, expressed in "clear and emphatic" terms, is to favour certainty for those who have entered into transactions with the company during the periods in respect of which designated transactions may be voidable [54]. There is, however, no independent basis for the assertion that any extension of time which does not identify a particular transaction or transactions must be an unreasonable prolongation of uncertainty militating against a construction which would allow such an order to be made. The section provides for the exercise of discretion by the court. Questions of what is a reasonable or an unreasonable prolongation of uncertainty and the scope of such uncertainty are more appropriately considered case-by-case in the exercise of judicial discretion than globally in judicial interpretation of the provision.

64    In BP Australia, Spigelman CJ (following a comprehensive review of the authorities) observed at [187] that the question is “what [is] fair and just in all of the circumstances” of the case. Approaching the matter that way, it is usual to consider three factors: (1) the explanation for the delay; (2) to the extent necessary (and in a preliminary way) the relative merit of the proposed proceedings; and (3) any prejudice likely to be suffered in the event that time is extended: Walker and Maloney v CBA Corporate Services (NSW) Pty Ltd [2012] FCA 328 at [43] (Nicholas J).

65    The primary judge understood these matters at PJ [16] – [24], and there is no suggestion of error on the part of her Honour in this regard.

DETERMINATION

Ground 1

66    The wrong principle contention of the appellants under this ground commences with the proposition at PJ [34] that by June 2022, the liquidators had secured funding pursuant to the Fair Entitlements Guarantee Scheme (FEG) following a request for funding that was made in October 2021. Although that funding was sought and obtained to conduct public examinations of Mr Gong, Mr Landerer and the Casinos, the liquidators elected to proceed only with a public examination of officers from the Casinos. This was described, and found, to be a “strategic decision” which resulted in a pause on the taking of steps to publicly examine the Gong and Landerer parties.

67    Then at PJ [73], having acknowledged the decision to pause the intended public examinations of Mr Gong and Mr Landerer, the primary judge concluded that they did so to prioritise their work and the allocation of their funding, and in consequence their decision “was not tantamount to a decision to simply let the clock run down on a limitation period”. Reasoning in that way, the appellants contend, was erroneous because her Honour failed to apply the “statement of principle” that Ward J set out in Re Clarecastle Pty Ltd (in liq) [2011] NSWSC 857; 255 FLR 435 at [141]. In that case the court largely dismissed an application to extend time pursuant to s 588FF(3)(b) for several reasons, including that very little was done to progress the investigations into the potential claims between April 2007 and October 2009 (at [161]), there had been “no real attempt” to progress an investigation until October 2009 (at [164]), the reason for delay in bringing the preceding was due largely to the “relative inactivity of the liquidators” for two and a half years of the three-year period (at [219]), and within that period the liquidators deliberately determined not to pursue further investigations for which “forensic decision” they must “bear the risk that there will be no extension granted” (at [219]).

68    From the entirety of the reasoning in Clarecastle, the appellants fix upon what Ward J said at [141] which they characterise as “a statement of principle” that has been applied on multiple occasions. That paragraph reads:

In Buzzle …[at [92]]…, Ipp JA expressed the view that a deliberate decision to allow a statutory limitation period to expire would be a powerful factor against the grant of leave, noting that any prejudice suffered in such circumstances, were the writ not to be extended, would be self-inflicted. Here, it is not suggested that there was a deliberate decision to allow the three-year period to lapse without bringing particular voidable transaction claims (and, indeed, some voidable transaction claims have been brought within the relevant period). However, what has occurred is that there was a seemingly deliberate decision (or one made as part of the liquidators' ordinary policy or practice in prioritisation of work) on the part of the liquidators not to pursue, in as timely a fashion as (with hindsight) it is clear that they could have done, the investigations for which an extension is now sought. That seems to me to be a deliberate decision of a similar kind to that considered in Buzzle, such that any prejudice occasioned by the making of that decision might be said to be self-inflicted.

69    The reference to Buzzle is to Arthur Anderson Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104 (Ipp, Tobias and McColl JA) , which was an appeal against a refusal to extend time for the service of writs claiming damages for professional negligence pursuant to the UCPR. The Court of Appeal granted leave to appeal and allowed the appeal. Ipp JA at [41] noted that a number of principles have been “developed by judicial decision” relating to the exercise of the discretion to renew a statement of claim: delay, and any explanation for it, the conduct of the parties generally, and any prejudice caused to the plaintiff by a refusal to renew and to a defendant by the grant of such an application, each of which his Honour described as matters that the court “should consider” in the exercise of the discretion: [43].

70    The passage referenced by Ward J at [92], appears under the heading: Error in not taking into account that Mr Wily deliberately decided to delay service, and notes:

The judge did not take into account the fact that Mr Wily made a deliberate decision to delay proceedings. In Itek Graphix Pty Limited v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207, with the concurrence of Spigelman CJ and Sheller JA, I observed at ([91], 225):

“A deliberate decision to allow a statutory limitation period to expire would be a powerful factor against the grant of leave. Were a deliberate decision to allow the period to expire has been made, ordinarily it would be difficult to provide an explanation for that decision sufficiently cogent to warrant the grant of leave.”

71    Mr Wily was the liquidator. That passage should not be read in isolation from what follows at [93] – [94]:

93.    In my opinion, for the reasons set out in Itek Graphix Pty Limited, a deliberate decision to allow a writ to become stale after a limitation period had expired would be a powerful factor against the grant of the order sought (see also Van Leer at 350). Any prejudice suffered, in such circumstances, were the writ not to be extended, would be self-inflicted.

94.     Mr Sheahan drew attention to the fact that in Tolcher, Tobias JA (at [50]) considered that the deliberate decision by the liquidator in that case not to attempt service of the statement of claim until “the litigation funding was in place” was “appropriate, prudent and responsible and not a decision for which the liquidator can be justifiably criticised”. Two points can be made in this regard. First, a deliberate decision to delay is not a factor that has an absolute effect on the discretion to be exercised. Each decision depends on its own circumstances. I would add that the delay in Tolcher was far shorter than that in the present case and the circumstances differed, substantially. Secondly, Rothman J’s error is his omission to take into account Mr Wily’s deliberate decision to delay in the particular circumstances that obtained. His error is not that he attached incorrect weight to that decision but that he ignored it.

72    In oral submissions, senior counsel for the appellants maintained that the appellants’ argument is that the statement at [141] of Re Clarecastle is relied on “heavily” as “setting a matter of principle” sometimes characterising it as “a threshold for self-infliction”.

73    We do not accept this submission. The inquiry commences with and ends with the statutory provision. A broad discretion is conferred in terms not susceptible to statements of immutable principle divorced from the facts of individual cases. Justice Ward did not say so and the appellants’ characterisation of her reasoning cannot be reconciled with how her Honour reasoned at [156]: “…a deliberate decision to delay is not a factor that has an absolute effect on the discretion to be exercised, each decision depending on its own circumstances…”, nor can it be reconciled with how her Honour approached this issue at [219]: that liquidators must bear the risk of forensic decisions. Correctly understood, in an orthodox manner, Ward J referenced matters relevant to the exercise of the discretion on the particular facts before her. That is the same as the approach of Ipp JA in Re Buzzle, as is apparent from the paragraphs we have extracted above.

74    Moreover, the appellants’ argument is inconsistent with what the High Court said in Fortress Credit HCA at [24]: the discretion is to be exercised on a case-by-case basis and not in accordance with a global principle applicable to all cases.

75    The primary judge properly took into account the strategic pause at PJ [34] and [39], but was ultimately satisfied that the decision was satisfactorily explained. Her Honour did not err in principle and there is no merit in this ground.

Ground 2

76    This ground contends error at PJ [70] where the primary judge concluded that the liquidators had set out “in some detail, the potential claims they have identified, and have detailed the enquiries they consider they need to make, and the advice they will require, in order to finalise their views on whether or not particular claims should be pursued.”

77    The submissions focus on matters of detail: the liquidators bore the onus of proof; the affidavit material comprised only “generic assertions” as to what further steps were required; Mr Nipps in cross-examination could not answer detailed questions about the state of the investigations (coupled with an asserted “ignorance” on his behalf as to what was required to be done) together with a contention that no or no proper explanation was provided as to how long the investigations into (or prosecution of) the claims may take. Particular attention was paid to an answer given by Mr Nipps to a question to the effect that he could not provide further detail beyond the content of his affidavit, to which he responded: “without having the file notes and bringing out our work papers, I can’t say what the status of each individual claim sits at”.

78    At one point in oral submissions, senior counsel for the appellants contended that error is to be found in that the primary judge did not afford discernible weight to the evidence relied upon by the appellants.

79    There is no merit in this ground. Counsel for the respondents is correct to describe it as “an unwarranted critique of the level of detail in the liquidators’ evidence”. Mr Nipps’ evidence that he could not go into greater detail, without reference to his file notes and working papers, must be viewed in the context of the evidence contained in his affidavit, which the primary judge set out in some detail at PJ [44] – [59] (referenced above), and that it is unrealistic to expect a liquidator to be across all of the detail of each and every liquidation. Necessarily, a liquidator must delegate tasks to employees, and although Mr Nipps requested that he be able to “have the material in front of me”, that opportunity was not afforded to him in cross-examination.

80    Ultimately, the primary judge reached a different conclusion on the evidence to that which was urged by the appellants in that she was satisfied with the level of detail provided by the liquidators. The criticism that the detail “was utterly bereft” is simply not made out. The appellants’ arguments are ultimately no more than a complaint that the primary judge erred in not giving the weight that the appellants contended ought to have given to aspects of the evidence, which is rarely a House v The King error: Gronow v Gronow [1979] HCA 63; 144 CLR 513 at 519 – 520 (Stephen J). There is no merit in this ground.

Ground 3

81    This ground concerns the reasoning of the primary judge at PJ [73]. Two errors are asserted. The first is that her Honour acted upon a wrong principle in that she effectively “set at naught” the importance of commercial certainty. The second is that she failed to take into account a material consideration (in reasoning that the involvement of Mr Gong in the affairs of the Group stood him apart from the general body of persons dealing with the Group companies) by ignoring or paying insufficient attention to the importance of certainty in commercial dealings with corporations that are subsequently externally administered: Fortress Credit HCA at [24], Grant Samuel at [21] and BP Australia at [113] – [114]; [118] – [119], [171].

82    The appellants’ criticisms are unfounded. The primary judge was clearly cognisant of the certainty principle, which her Honour expressed at PJ [16] – [17] and which her Honour then applied at PJ [76] – [78]. Correctly understood, the primary judge reasoned that the certainty purpose operated less powerfully in the case of the Gong parties than for other potential groups of defendants at PJ [76]. In this context there is no error at PJ [73] in that nothing flows from the purpose of the time limitation to mandate that in the exercise of the discretion a judge may not differentially consider the involvement of particular groups of defendants in the conduct of the business of a company that is subsequently externally administered, by way of comparison with other potential groups of defendants. Put another way, the certainty purpose does not preclude comparative assessments of conduct in its application in particular cases. The primary judge at PJ [61] – [68] assessed the potential prejudice to the Gong parties but was not satisfied that any extension of the period “during which Mr Gong remains exposed to the risk that he had already decided to run constitutes a material prejudice on the facts of this case”: PJ [65]. That conclusion was plainly open, as was the involvement conclusion at PJ [73] which flows from the findings at PJ [54] that Mr Gong’s involvement in the Group extended to performance of the role of general manager between mid-2017 to January 2018, the employment of his wife and the holding of directorships and share interests “in several entities which formed part” of the broader group of companies.

83    Further, the primary judge was correct to reason that, considered overall, the exercise of her discretion turned on “what is fair and just in all the circumstances” (PJ [73]): BP Australia at [187]; Clarecastle at [129] and Parker, in the matter of Worldwide Specialty Property Services Pty Ltd (in liq) [2017] FCA 687 at [15] and [19] (Lee J). In proceeding in that way on the facts as found it was not an error for her Honour to draw a distinction between the general body of potential defendants who might be the subject of voidable transaction claims on the one hand, and the Gong parties on the other.

84    There is no merit in this ground.

Ground 4

85    The gravamen of this ground is a complaint that the primary judge erred at PJ [39] in finding that the decision of the liquidators to focus their inquiries upon investigations into the Casino transactions, rather than the Gong parties, had been satisfactorily explained. It is contended that her Honour erred in making that finding, despite evidence to the effect that: the liquidators had “full knowledge” of the potential claims by no later than 23 February 2022; that they failed to make any inquiry of the Gong parties; that they deployed the funding otherwise than for the purpose of conducting public examinations of the Gong parties in circumstances where the potential claims against those parties were more complex than potential claims against the Casinos. The submission is put that there “was no basis in the evidence” for the finding of satisfactory explanation.

86    In oral submissions senior counsel for the appellants accepted that this ground “is a little more sprawling” in introducing detailed references to the evidence that was before the primary judge together with an analysis, by reference to the 2023 Return. The basal submission is that the liquidators failed to explain the strategic decision to pause investigation of the Gong parties in June 2022 when there was clearly “a fork in the road” and an election to focus inquiries on potential claims against the Casinos.

87    This ground fails to have regard to the entirety of the reasoning of the primary judge. Commencing at PJ [34], her Honour made findings that funding was requested pursuant to the FEG in October 2021 and which was not secured until June 2022. Whilst the request was made to conduct public examinations of the Gong and Landerer parties and officers of the Casinos, her Honour accepted the explanation of Mr Nipps in cross-examination that, because the work involved in relation to the Casinos “was more extensive than had been anticipated initially”, the decision was taken to pause the intended public examinations of the Landerer and Gong parties. At that point in time the liquidators considered that the potential claims against the Casinos were less complex as they involved “a clearer forensic tracing exercise” which they anticipated could be progressed more quickly. At PJ [35], the primary judge accepted the evidence of Mr Nipps where he rejected the suggestion that the liquidators “remained undecided” as to the conduct of public examinations for the Gong and Landerer are parties. At PJ [36], her Honour addressed directly the appellants’ submission that by mid-2022 it was open to the liquidators to proceed with a public examination of the Gong and Landerer parties. Her Honour did not accept that assertion, finding that the investigations were continuing and “there was a lot of back-and-forth”: PJ [37]. At PJ [38], her Honour also accepted the evidence of Mr Nipps that the lack of external funding had “hampered the progress of the liquidators’ investigations”.

88    It is true that the primary judge’s findings at [32] about the amount recovered to date of approximately $3.75 million and total remuneration of approximately $7.5 million was not made with the benefit of the 2023 Return. However, we reject the appellants’ submission that if the 2023 Return had been adduced in evidence, the result would probably have been different or that this evidence could have borne upon the exercise of the discretion. The submission is that the evidence in the 2023 Return demonstrates that the liquidators in fact had sufficient funding to investigate the Gong transactions and to commence recovery proceedings. That submission is framed by reference to various contentions made by Mr Greenberg in his affidavit of 8 March 2024. Counsel for the respondents did not object to the reading of that affidavit, despite the fact that the paragraphs relied on amounted largely to submissions.

89    Mr Greenberg at paragraph [33] asserted as follows:

The 2023 Return provides the following information in Annexure A of that document (page 21):

(a)    an additional $3,018,379.97 was received by IPPL in the period between 19 August 2022 to 18 August 2023 (row titled “Total receipts for the current period”, further detailed at pages 1 and 2 of Annexure B);

(b)    the Liquidators made additional payments of $2,897,061.56 in the period between 19 August 2022 to 18 August 2023 (row titled “Total payments for the current period”), which included:

(i)    $929,496.70 in their appointee fees and disbursements (row titled “Fees: Appointee Fees” further detailed at page 3 of Annexure B); and

(ii)    $898,691.36 in legal fees, disbursements, counsel fees and other legal services (the sum of the figures in the “Legal Disbursements”, “Legal Fees'”, “Counsel fees” and “Courier fees” rows, further detailed at pages 3, 4 and 5 of Annexure B);

(c)    the Liquidators have received total receipts of $6,395,164.88 since their appointment as liquidators commenced on 19 August 2020 (row titled “Total receipts from commencement to the end of the report”); and

(d)    the Liquidators have made total payments of $6,184,894.40 since their appointment as liquidators commenced on 19 August 2020 (row titled “Total payments from commencement to the end of the report”).

90    This information leads Mr Greenberg to the conclusion at paragraph [34] that the total receipts up to the date of the hearing before the primary judge was $6,645,164.88, inclusive of an amount of $250,000 described as an indemnity provided and paid to the respondents in their capacity as administrators. From those facts Mr Greenburg asserted at [43] (in part):

The receipts and payments reflect the extent of work and investigations conducted by the Liquidators as well as the funding available to them throughout that 3rd year and at other times in the winding up. Should the evidence be admitted by this Court, Mr Gong will submit in the appeal that the 2023 return shows the liquidators had sufficient funding available to pursue the Gong transactions prior to the expiry of the limitation period.

91    At [44], Mr Greenberg concludes with this:

The Liquidators' receipts as indicated in the 2023 Return have been significant. Those receipts are around $2.6 million more than what the Primary Judge found to be the “recoveries to date” in her Honour's judgment and steps were not taken by the Liquidators to alert the Gong Parties or the Court of these additional receipts before judgment was given on 22 November 2023.

92    We do not accept the analysis of, or the conclusion reached by, Mr Greenberg. The 2023 Return discloses the following:

(a)    the total amount of approved administrator remuneration was $390,186, which amount had been paid;

(b)    the total amount of liquidators’ remuneration was $4,877,651 of which $2,489,027 had been paid;

(c)    approximately $50,000 of disbursements (administration and liquidation) had been paid;

(d)    prior to the period of the return, that is up to 19 August 2022, the liquidators had received $3,376,784.91;

(e)    the period of the return, 19 August 2022-18 August 2023, the liquidators had received $3,018,379.97. Thus, for the entire period, the liquidators had received $6,395,164.88;

(f)    prior to the period of the return, $3,287,832.84 had been paid out and for the period of the return, $2,897,061.56 had been paid out. Thus, the total payments for the period the administration was $6,184,894.40;

(g)    the cash at bank for the period of the return was $210,270.48;

(h)    of the amounts received during the period of the return, the FEG funding received for legal costs was $409,073.53 and for liquidators’ costs $159,496.70, the amounts paid for legal disbursements within that period was $135,077.06 and for legal fees $760,641.99;

(i)    within the return period, there were recurring expenses for rent and rates of $856,972.90, document storage of $5,247, technology costs of $77,575.72 and professional services of $2,623.75, to name some.

93    What these figures relevantly demonstrate is that the liquidators have received only $2,489,027 out of a total approved remuneration of $4,877,651. That is, approximately 51% of their approved remuneration. Contrary to the submissions of the appellants, that is entirely consistent with the finding of the primary judge at PJ [32] that the conduct of the liquidations have been “largely unfunded” and the finding at PJ [39] that whilst pausing the investigations into the Gong and Landerer parties was a strategic decision, nonetheless it had been satisfactorily explained and the liquidators “ought not be criticised for devoting their FEG funding” to the Casino investigations. In our view the appellants’ submissions apply a hindsight analysis to the decision-making of the liquidators at the time with the result that it should be concluded that funds ought to have been deployed differently. The submission also glosses over the timing difference between when funds were received and disbursed. That is, it does not follow that simply because a total amount was received during the relevant period, greater than the amounts expended, funds were available in June 2022 that could have been deployed to further the investigation of the Gong parties.

94    The appellants fail to explain how it is that the resulting cash at bank balance of $210,270.48 at the close of the 2023 Return period makes any material difference to the outcome, or the way in which available funds should have been deployed for the purpose of investigating the Gong transactions, rather than being held in reserve to meet recurring expenditure.

95    Each of the findings made by the primary judge were open on the evidence before her and are not materially affected by the content of the 2023 Return. The appellants’ complaint is that her Honour ought to have made different findings, supported by other evidence. That is not a discretionary error.

96    There is no merit in this ground.

Ground 5

97    This ground amounts to a generalised complaint that the primary judge erred in the exercise of her discretion at PJ [79] in that the period of the extension granted in respect of the annexure B claims was unreasonable and plainly unjust. As particularised, the extension to 15 July 2025 was unreasonable having regard to the strategic decision of the liquidators, the statutory aim of certainty, the contention that the liquidators’ position was self-inflicted, and that, according to published decisions in other matters, the extension is the longest ever granted. In addition, there is a submission that her Honour’s reasons are insufficient.

98    Senior counsel for the appellants submits that the primary judge dealt with the period of the extension “in a perfunctory way” at PJ [78] – [79]. To a large extent, the arguments in support of this ground turn on the success of the contentions in one or more of grounds 1, 2, 3 and 4, which arguments fall consistently with our rejection of those grounds. What is left is that in light of the strategic decision of the liquidators not to undertake public examinations of the Gong parties following the receipt of funding in June 2022, and the objective of certainty in commercial affairs, it should be concluded that the period of the extension was unreasonable or unjust.

99    We do not accept this submission. Having determined the threshold question that an extension of time was justified in the circumstances in favour of the liquidators, the period of the extension was a matter for informed evaluative judgment. It is not correct to focus attention only upon PJ [78] – [79] and to ignore all of that which precedes those paragraphs. Having regard to the entirety the primary judge’s substantial and considered reasoning there is no error as alleged.

100    For similar reasons, there is no inadequacy in the reasoning of the primary judge. To characterise the period of the extension, as the appellants do, as “exceptionally long” and to draw comparisons between the period that her Honour considered justified in the circumstances with extensions granted in other cases, does not establish that the extension was unreasonable or plainly unjust.

101    There is no merit in this ground.

Conclusion

102    For these reasons we refuse leave to appeal. Costs should follow the event.

Associate:

Dated:    6 August 2024

SCHEDULE OF PARTIES