Federal Court of Australia

Cussen, in the matter of Monarch Tower Pty Ltd (in liq) v Sinoace Holdings Ltd [2024] FCA 716

ORDERS

THE COURT ORDERS THAT:

1.    The first applicant’s application to amend his interlocutory process filed on 16 April 2024 be refused.

2.    The first applicant’s application pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) for the time for service of the originating process filed on 22 January 2024 and the affidavit in support thereof to be extended nunc pro tunc until 26 February 2024 in the case of the first respondent and until 21 February 2024 in respect of the second respondent be dismissed.

3.    The proceeding be summarily dismissed.

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

ORDERS

THE COURT ORDERS THAT:

1.    The first applicant’s application pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) for the time for service of the originating process filed on 22 January 2024 and the affidavit in support thereof to be extended nunc pro tunc until 19 February 2024 in the case of the first and second respondent be dismissed.

2.    The proceeding be summarily dismissed.

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

ORDERS

THE COURT ORDERS THAT:

1.    The first applicant’s application to amend his interlocutory process filed on 30 May 2024 be refused.

2.    The first applicant’s application pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) for the time for service of the originating process filed on 22 January 2024 and the affidavit in support thereof to be extended nunc pro tunc until the dates specified in that application in respect of the first to fifteenth respondents be dismissed.

3.    The proceeding be summarily dismissed.

4.    The summonses issued in proceeding VID 1027 of 2023 for the public examination of David Frederick Burr and May Wan Khor be permanently stayed.

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

ORDERS

THE COURT ORDERS THAT:

1.    The first applicant’s application pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) for the time for service on the respondent of the originating process filed on 22 January 2024 and the affidavit in support thereof to be extended nunc pro tunc until 19 February 2024 be dismissed.

2.    The proceeding be summarily dismissed.

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

ORDERS

THE COURT ORDERS THAT:

1.    The first applicant’s application pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) for the time for service of the originating process filed on 22 January 2024 and the affidavit in support thereof to be extended nunc pro tunc until 5 March 2024 in the case of the first respondent and until 21 February 2024 in respect of the second respondent be dismissed.

2.    The proceeding be summarily dismissed.

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

ORDERS

THE COURT ORDERS THAT:

1.    In so far as it applied to Sinoace Holdings Limited (British Virgin Islands Company Number 1474809), the order made on 9 March 2023 be set aside.

2.    The proceeding be dismissed.

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

REASONS FOR JUDGMENT

O’CALLAGHAN J

Introduction

1    Mr Neil Cussen was appointed the liquidator of Monarch Tower Pty Ltd (the company) in August 2019.

2    On 9 March 2023, on Mr Cussen’s application made in proceeding VID 410 of 2022 pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth) (the Act), I made the following order on the papers (the 9 March order):

2.    The time for making an application under s 588FF(1) of the Corporations Act 2001 (Cth) is extended up to and including 22 January 2024 with respect to any voidable transaction involving the Company, and including voidable transactions involving each of any of:

(a)    Jian Lin;

(b)    Li Shao;

(c)    Anthony Thomas Gilbert;

(d)    Shan Shui;

(e)    Zuccubarr Pty Ltd (ACN 006 062 719);

(f)    Timswee Pty Ltd (ACN 006 257 736);

(g)    Payton Capital Ltd (ACN 163 122 478);

(h)    NWC Finance (No 5) Pty Ltd (ACN 150 448 838);

(i)    Rill Trading Resources Inc (British Virgin Islands Company Number 448249);

(j)    Sinoace Holdings Limited (British Virgin Islands Company Number 1474809).

See Cussen, in the matter of Monash Tower Pty Ltd (in liquidation) [2023] FCA 192 (Cussen No 1).

3    By five separate originating processes filed on 22 January 2024, the liquidator now seeks to bring applications against some of the persons or entities named in the 9 March order, and sixteen other persons or entities not named in it, under s 588FF(1) of the Act for recovery of amounts as voidable transactions, viz:

(a)    VID 31 of 2024 (also called the Sinoace proceeding);

(b)    VID 32 of 2024 (also called the Zuccubarr proceeding);

(c)    VID 33 of 2024 (also called the Payton proceeding);

(d)    VID 34 of 2024 (also called the Timswee proceeding); and

(e)    VID 35 of 2024 (also called the Rill Trading proceeding),

(collectively, the 2024 proceedings).

4    Each of the 2024 proceedings was first made returnable before Anderson J on 2 February 2024, but the liquidator, for reasons I will turn to shortly, took it upon himself not to serve a copy of the originating processes and supporting affidavits on any respondent by that date.

5    Following various exchanges which are detailed below, at a case management hearing on 16 February 2024 before McElwaine J, some of the respondents indicated an intention to apply for orders, among other orders, seeking a permanent stay of the proceedings brought against them on the basis that the liquidator had failed to serve the originating processes and supporting affidavits in accordance with the applicable rules.

6    The liquidator then, and only then, made applications in each of the 2024 proceedings seeking orders pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) (Federal Court Rules) and r 1.10 of the Federal Court (Corporations) Rules 2000 (Cth) (Corporation Rules) for the time for service of the relevant originating processes and supporting affidavit to be extended nunc pro tunc until various different dates.

7    Each of the respondents (other than the respondents in the Rill Trading proceeding) then sought to have the proceedings brought against them set aside or permanently stayed on various overlapping grounds. Those applications and the 2024 proceedings were then allocated to my docket.

8    For the reasons I explain below, I will, among other orders, grant orders summarily dismissing each of the 2024 proceedings and dismissing VID 410 of 2022.

9    In short, the proceedings brought against Sinoace Holdings Ltd (Hong Kong) (Sinoace HK) (VID 31 of 2024), Zeninvest Pty Ltd (VID 32 of 2024), Capstone Pastoral Company Pty Ltd a/t Burr Family Trust, Dong-Anh Nguy, Jem Scanlon Pty Ltd, EPB Nominees Pty Ltd a/t Blake Super Fund, Edrob Pty Ltd a/t Fellows Family Trust, EylSuper Pty Ltd a/t Blaskett Superannuation Fund, Maahu Amble Pty Ltd a/t Maahu Amble Superannuation Fund, Judith Payton, Payton Nominees Pty Ltd, Payton Securities Pty Ltd, The Winepress Berwick Assembly of God Church Inc, May Wan Khor, David Frederick Burr and Harding Stenning & Co Pty Ltd (VID 33 of 2024) will be summarily dismissed because, on its proper construction, the 9 March order extending up to 22 January 2024 the time for making an application under s 588FF(1) of the Act with respect to voidable transactions involving the company did not extend to them. The order extended only to the entities and individuals named in the order. And, as the liquidator conceded, it is now too late to bring any other application against them, because any such application was required to be made during the period ending three years after the relation-back day (which ended on 22 July 2022).

10    Were it necessary to decide the points in respect of each of those persons or entities (which I will call collectively where convenient to do so the non-named parties), I would permanently stay the proceedings on the alternative ground that the liquidator arrogated to himself the decision not to serve them within the time provided for by the rules, and cannot now resile from that position.

11    In the case of Sinoace Holdings Ltd (BVI) (Sinoace BVI), I will also allow its application to set aside the 9 March order in so far as it applies to it. Although I was assured in the materials upon which I was asked to rely in making the 9 March order that Sinoace BVI had been served, it had not been; it had not otherwise been notified of the hearing; and it was given no opportunity to be heard — entitling it to have the order set aside as of right.

12    I will also summarily dismiss the proceedings in respect of four parties who were named in the 9 March order (Zuccubarr Pty Ltd, Payton Capital Ltd, Timswee Pty Ltd and Sinoace BVI) because the liquidator’s application for nunc pro tunc orders in respect of service of the originating process and the affidavit in support in those proceedings under the rules is to be refused. I will make the same order in each proceeding where the persons or entities not named in the 9 March order also seek refusal of the liquidator’s nunc pro tunc applications.

13    For reasons which I explain below, I also reject the liquidator’s contention that, having set aside the 9 March order in so far as it applied to Sinoace BVI, I have the authority to re-hear the extension application made under s 588FF(3)(b) of the Act in VID 410 of 2022. In my view, as I will explain, I have no power to do so because, by virtue of the decision of the majority in Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17, I am bound to find that that application is spent.

14    The respondents in the Rill Trading Proceeding did not appear, but it follows that that proceeding should also be dismissed because the liquidator’s application for nunc pro tunc orders in that proceeding must also be refused.

15    Proceeding VID 410 of 2022 was also before me on the hearing of each of the 2024 proceedings. Various persons and entities sought to be joined to that proceeding, including for the purposes of having the 9 March order set aside in so far as it affected them. In the view I take of the various applications in the 2024 proceedings, and the orders that are to be made in them, it is not necessary to deal separately with any application in VID 410 of 2022. The proceeding no longer has any utility, so it will be dismissed.

Background

The company and the winding up order

16    The company was incorporated on 1 July 2015, and at all relevant times had three directors — Anthony Gilbert, Jian Lin and Li Shao. It operated a property development business. Its only project involved the acquisition in May 2016 of land at 256–266 City Road, Southbank, Victoria. The company intended to construct a residential building on the land. It obtained funding from various parties in connection with the development of the land in the sum of approximately $34.9 million. The company ceased trading in January 2018. The land was subsequently sold in June 2018 for $38 million.

17    On 22 July 2019, Mr Chen Hu, a shareholder of the company, filed a winding up application against the company in the Supreme Court of Victoria, which on 28 August 2019 ordered that the company be wound up and appointed the liquidator for the purposes of the winding up.

18    The liquidator says that the current claims of creditors against the company total just over $41 million. In his view, the company exhibited signs of insolvency from as early as 30 June 2016, and it was insolvent from at least 3 August 2017.

Liquidator’s investigations

19    Upon the liquidator’s appointment, he issued letters to the company’s directors requiring the delivery up of all books and records of the company in their possession or control. The liquidator received a response from Mr Shao (in September 2019). Mr Lin and Mr Gilbert did not respond.

20    In the first three months of his appointment, the liquidator sought to obtain books and records of the company from a number of third parties, including from financial institutions, VicRoads, the Australian Taxation Office, the company’s former accountants and lawyers, and from searches of the Personal Property Securities Register and the Land Titles Office database.

21    The liquidator formed the view that the books and records obtained were insufficient for him to understand the particulars and purpose of many transactions undertaken by the company.

22    In May 2020, he obtained approximately 900 gigabytes of documents from the company’s former IT services provider, ComputerTalk.

23    Given the volume of the material received, the liquidator determined that it would not be commercial to embark on the process of reviewing the documents without receiving external funding.

24    From May 2020 to November 2020, he entered into negotiations with a funder to obtain funding to review the documents provided by ComputerTalk.

25    On 26 November 2020, the company, the liquidator and the funder entered into a funding agreement to enable him to be funded to conduct the review.

26    The liquidator and his staff commenced reviewing the documents. In his affidavit dated 24 April 2024, the liquidator deposed that while the documents obtained from ComputerTalk assisted his understanding of the transactions undertaken by the company, and the potential legal claims for recovery for the benefit of its creditors, he still did not have sufficient material to correctly and fully explain the nature and purpose of the transactions.

27    By June 2021 – three years ago – the liquidator had identified potential claims totalling more than $27 million against various persons, which he listed in his evidence as follows:

28    Between July 2021 and May 2022, the liquidator discussed with the funder the possibility of further funding to commence public examinations and proceedings against the company’s directors and potential respondents.

29    On 16 May 2022, a second funding agreement was entered into to provide such funding.

Extension application and orders

30    Section 588FF(3) of the Act provides:

(3)    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.

31    Here, the relation-back day is 22 July 2019, being the date on which the winding up application against the company was filed in the Supreme Court of Victoria.

32    It follows that, subject to any extension granted by a court under s 588FF(3)(b), any voidable transaction claim made under s 588FF(1) was required to be brought by the liquidator by 22 July 2022.

33    On 21 July 2022 – one day before the expiry of time – the liquidator filed an application under s 588FF(3)(b) seeking orders extending the time to issue voidable transaction claims against the potential respondents in VID 410 of 2022.

34    In his submissions in support of that application, the liquidator said that the extension of time sought under s 588FF(3)(b) of the Act should be granted because (in summary):

(a)    he had been hampered by a lack of co-operation from the directors of the company and a lack of funds;

(b)    his investigations took a long time because of the volume of documents that were required to be reviewed;

(c)    Zuccubar Pty Ltd, Zeninvest Pty Ltd, and Timswee Pty Ltd refused to provide documents in support of their response to the claims articulated by the liquidator;

(d)    the books and records he obtained were insufficient to enable him to fully understand the nature and purpose of the company’s transactions; and

(e)    he had not yet commenced the public examinations due to a lack of funding.

35    The liquidator sought an order in the originating process in these terms:

An order pursuant to section 588FF(3)(b) of the Act the time for making an application under section 588FF(1) of the Act is extended up to and including 22 January 2024, with respect to any voidable transaction involving the company and each or any of:

(a)    Jian Lin;

(b)    Li Shao;

(c)    Anthony Thomas Gilbert;

(d)    Shan Shui;

(e)    Zuccubar Pty Ltd (ACN 006 062 719);

(f)    Timswee Pty Ltd (ACN 006 257 736);

(g)    Payton Capital Ltd (ACN 163 122 478);

(h)    NWC Finance (No. 5) Pty Ltd (ACN 150 448 838);

(i)    Rill Trading Resources Inc (British Virgin Islands company Number 448249); and/or

(j)    Sinoace Holdings Limited (British Virgin Islands company Number 1474809).

36    I proceeded to consider the application, and I accepted the truth of the liquidator’s assertion that each of the respondents had been served.

37    The 9 March order (set out at [2] above) in VID 410 of 2022 was made in the form of a proposed order annexed to the liquidator’s submissions, which differed from the language of the order sought in the originating process. Counsel’s submissions, however, did not suggest that any material difference was intended between the order proffered by counsel in his written submissions and the order sought in the liquidator’s originating process.

38    In my reasons for making the 9 March order, I noted the following (see Cussen No 1 at [18]–[20]):

I am also satisfied that the evidence discloses that the merits of the potential actions against named entities, and the directors of the Company, involving unexplained payments and transfers without any apparent basis are sufficiently sound.

As to prejudice, I agree with the Plaintiff’s submission that, in circumstances where this application has been served on each putative respondent and none has raised an issue of material prejudice, and where numerous letters of demand have been sent – and there thus being no specific prejudice identified – the notion of “presumptive prejudice” should not tell against the making of the order sought. Cf Re Cohalan & Mitchell Roofing (in liq) at [57].

In those circumstances, I am satisfied that that the justice of the case favours the making of orders for the extension of time sought and that it is appropriate to exercise the discretion under s 588FF(3) of the Act in favour of the extension in time sought, and to make the orders in the form sought.

Additional delay

39    Following the making of the 9 March order, the liquidator did not start preparing documents in respect of the anticipated public examinations or voidable transaction proceedings until October 2023.

40    In his affidavit dated 20 May 2024, he attributed that six-month delay to three factors, namely his departure from the partnership of Cor Cordis on 31 May 2023; ongoing negotiations with a funder for further funding with respect to the voidable transaction proceedings and public examinations; and the transfer of the matter from his former solicitors, which he described in more detail as follows:

(a)    my departure from the partnership of Cor Cordis on 31 May 2023, and consequent difficulties with respect to obtaining and facilitating access to the file I maintained at Cor Cordis, and the time required for my staff at Olvera to be read into and versed with the matter. In this respect, I obtained access to my previous files from Cor Cordis on or around 17 July 2023. My staff at Olvera have told me and I believe that they had read into the matters relating to the Proceedings and the Related Proceedings during the period between July to August 2023;

(b)    ongoing and actively advanced negotiations with the funder for further funding with respect to the [voidable transaction proceedings] and public examinations proceeding prior to commencing litigation … I note that my negotiations with the funder about further funding were ongoing from about April 2023 and were continuing at the time that the [voidable transaction proceedings] were commenced; and

(c)    the transfer of the matter from my former solicitors, Hicksons Lawyers, to my current solicitors, Mills Oakley, and consequent issues with respect to retrieving and accessing the file maintained by Hicksons Lawyers due to a solicitors’ lien, to allow for investigations to be finalised and instructions provided to Mills Oakley. In this respect, the solicitor with carriage of the matters, Marc Rossi, moved from Hicksons Lawyers to Mills Oakley in January 2023. As a consequence, I engaged Mills Oakley to act in the matters in January 2023. Hicksons Lawyers have refused to release the file to Mills Oakley due to a solicitors [sic] lien. Mr Rossi has informed me and I believe that he still has not obtained access to the whole file maintained by Hicksons Lawyers, and has been in the process of obtaining access to the file of Hicksons Lawyers.

Commencement of public examinations

41    Between October and December 2023, the liquidator’s solicitors and counsel prepared initiating documents for the commencement of public examinations. An originating process was filed on 6 December 2023, seeking orders for the issue of summonses for examination and production of documents.

42    On 25 January 2024, orders were made for the issue of summonses for public examinations and for the production of documents against various proposed examinees.

43    Summonses were issued to: Mr Gilbert, Mr Shao and Mr Lin ; Mr Silvio Morello (of NWC Finance (No 5) Pty Ltd); Mr Domenic Morello (of NWC Finance (No 5) Pty Ltd); Mr Valentino Spyriadis and Ms Sophie Spyriadis (both of Zuccubarr Pty Ltd and Zeninvest Pty Ltd); Ms May Wan Khor; Mr David Burr; Mr Anthony Giustozzi; and Mr Haohua Chen.

44    Orders for production were made in respect of: Rill Trading Resources Inc (British Virgin Islands company number 448249); Rill Trading Resources Inc (Hong Kong company registration number 2813724); Sinoace BVI; Sinoace HK; NJS Investments (WA) Pty Ltd; Harding Stenning & Co Pty Ltd; Payton Capital Ltd; Timswee Pty Ltd; Zeninvest Pty Ltd and Zuccubarr Pty Ltd.

45    The summonses in the public examinations were returnable for document production on 4 March 2024.

46    On 4 March 2024, orders were made for the uplift of documents produced by Zeninvest Pty Ltd, Zuccubarr Pty Ltd, Harding Stenning & Co Pty Ltd, Payton Capital Ltd, and Timswee Pty Ltd. Orders were made otherwise adjourning the orders for production until 3 April 2024, and the conduct of the public examinations until 24 June 2024. They did not proceed on that date, in light of the applications made by the respondents in the 2024 proceedings, and have been vacated until further order.

Voidable transaction proceedings

Commencement of proceedings

47    Between October 2023 and December 2023, the liquidator’s solicitors and counsel also prepared the initiating documents for the commencement of various voidable transaction proceedings.

48    Originating processes and supporting affidavits were filed on 22 January 2024 in VID 31, 32, 33, 34 and 35 of 2024. That was the last day on which any application under s 588FF(1) of the Act could be brought pursuant to the 9 March order.

49    On 25 January 2024, Anderson J’s executive assistant notified the liquidator’s solicitor by email that the first case management hearing of the proceedings was listed before his Honour on 2 February 2024. His Honour directed the applicants promptly to notify the respondents of the email (because no representatives for the respondents were noted on file).

50    Pursuant to r 8.06 of the Federal Court Rules, an applicant must, as soon as practicable and at least 5 days before the return date fixed in an originating application, serve a copy of the originating application and each other document required to accompany the application personally on each respondent.

51    Similarly, pursuant to r 2.7 of the Corporations Rules, a plaintiff must serve a copy of the originating process and any supporting affidavit as soon as practicable after filing and, in any case, at least 5 days before the date fixed for hearing, on each defendant to the proceeding.

52    On 30 January 2024, the liquidator obtained advice from his solicitors and counsel about extending the time for service of the originating processes and supporting affidavits. Notwithstanding the rules to which I have referred, the liquidator’s lawyers proposed that, rather than comply with the rules for service, he should instead not serve the application until after the conclusion of the planned public examinations. The solicitor’s advice to the liquidator was relevantly in these terms:

[W]e propose notifying the respondents in accordance with the Court’s directions, however, for the reasons outlined below, we do not propose to serve the application until after the conclusion of the public examinations.

…

As discussed above and previously, we consider that we should refrain from serving the applications until after the conclusion of the Public Examinations. This is including for the following reasons:

1.    public examinations will be held on the week of 15 April 2024 which is relatively close in time;

2    no funding [h]as been agreed or provided by the Funder yet, and the additional time will allow us to come to some agreement;

3    as there is no funding, by refraining from proceeding with the applications, we can minimise the risk of adverse costs orders; and

4    we can minimise further costs incurred until we have further information furnished in the public examinations with respect to the claims.

53    In his affidavit dated 24 April 2024, the liquidator swore that he wanted to complete the public examinations before continuing with the voidable transaction proceedings for three reasons, namely:

(a)    The public examinations may reveal facts and documents that are relevant to the further conduct of proceedings, the relief sought in those proceedings, and the claims made in those proceedings;

(b)    It would be less onerous on the Applicants if the public examinations were completed first, prior to the continuation of [the voidable transaction proceedings]. In this respect, the administrative resources of the Applicants and their solicitors can be directed at the public examinations first, and then towards the continuation of proceedings after the conclusion of the public examinations;

(c)    Similarly, it would be less onerous on the Respondents, and their resources, and the resources of the Respondents’ legal representatives, if any, if the public examinations were completed first, prior to the continuation of [the voidable transaction proceedings].

54    The liquidator further deposed that he had been undertaking discussions with the funder for further funding in connection with the public examinations and the voidable transaction proceedings.

55    In a further affidavit sworn on 30 May 2024, the liquidator said that his reasons for providing the instructions were the reasons he gave in his 24 April affidavit (and not, if it matters, the reasons given by his legal advisers), as follows:

[M]y intention has always been to complete the public examinations prior to continuing with the [voidable transaction proceedings] for the reasons stated at paragraph [51] of my 24 April Affidavit.

…

My ongoing negotiations with the Funder were an ancillary consideration for me at the time I instructed my lawyers to apply to extend time for service of the Originating Processes and Affidavits in Support in the proceeding. The application to extend time for service until after the public examinations would have had the added benefit of allowing me further time to finalise my negotiations with the Funder before incurring further costs in the substantive proceeding. However, this was not my reason for providing instructions to apply to extend time for service. My reasons in providing the instructions were as stated in paragraph 51 of my 24 April Affidavit.

…

The terms of the funding agreement for [the voidable transaction proceedings] have now been finalised. The funding agreement has been signed by the Funder, and a copy of the signed agreement has been provided to my lawyers to hold in escrow. The total amount of the funding is not yet agreed, however. Final negotiations are ongoing in respect of the total amount of the funding.

…

[I]f the funding agreement is not finalised, I am resolved to proceed with the public examinations, [and the voidable transaction proceedings] regardless.

…

The finalisation of the funding agreement will not affect the way I intend to proceed. I still intend to finalise the public examinations before continuing with [the voidable transaction proceedings].

56    On 1 February 2024, Mr Jacky Lam of Mills Oakley (the liquidator’s solicitors) sent an email to Anderson J’s assistant expressing their client’s “position” that “they ought to refrain from serving the claims until after the conclusion of the [p]ublic [e]xaminations”; that “the claims [had] not been served on the respondents”; and that the respondents did “not yet have knowledge of the substance of the claims against them”. The email to the court was, omitting formal parts, as follows:

By way of background:

1.    On 9 March 2023, O’Callaghan J, in Federal Court proceedings number VID 410 of 2022, made an order that the time for making an application under s 588FF(1) of the Corporations Act 2001 is extended up to and including 22 January 2024 with respect to any voidable transaction involving the Company;

2.    On 6 December 2023, our client commenced Public Examination and Order for Production proceedings (Public Examinations), which remain on foot, in relation to claims the subject of these proceedings; and

3.    On 22 January 2024, in order to preserve their claims, our clients filed these proceedings while the Public Examinations remain on foot.

In light of the above, it is our client’s position that they ought to refrain from serving the claims until after the conclusion of the Public Examinations. Accordingly, we confirm that the claims have not been served on the respondents and as such the respondents do not yet have knowledge of the substance of the claims against them.

Notwithstanding the above, and in accordance with the directions of the Court, we confirm that, yesterday, we informed the parties (with exception to Sinoace Holdings Limited and Payton Capital Ltd for reasons set out below) by email of these proceedings by providing them a copy of the Court’s email.

We note as follows:

•    We were unable to provide a copy of the Court’s email to Sinoace Holdings Limited as we are not aware of their email address.

•    With respect to Payton Capital Ltd, we confirm that we no longer act in those proceedings, and a new solicitor will be taking carriage of those proceedings shortly. However, we understand from our client that Payton Capital Ltd was notified of the proceedings.

•    Of the respondents that we notified, only the solicitors for Zuccubarr Pty Ltd and Zeninvest Pty Ltd have responded by asking that we consent to a 1 week adjournment of the Case Management Hearing listed at 9:30am on 2 February 2024.

•    We understand that solicitors for Payton Capital Ltd also responded informing my client that as they have not been served, they are not in a position to obtain instructions, file a notice of acting, enter into consent orders or attend a case management hearing at this stage.

While our client intends to make an application to extend the time for service of the Originating Process and Affidavit pursuant to r 1.39 of the Federal Court Rules, given the request of Zuccubarr’s and Zeninvest’s positions and as a courtesy to them with respect to the Case Management hearing, our clients respectfully seeks orders by consent to adjourn the Case Management Hearing as set out in the attached draft short minutes.

57    The case management hearing was then adjourned to 16 February 2024 before McElwaine J. At that hearing, counsel for Zuccubarr Pty Ltd and Zeninvest Pty Ltd indicated to his Honour their intention to apply for orders, among others, for a permanent stay of the proceeding on the basis that the relevant originating process and supporting affidavit had not been served in accordance with the rules. In the course of doing do, counsel referred to the decision of the Victorian Court of Appeal in Horne v Retirement Guide Management Pty Ltd (2017) 54 VR 325, which recites the well-established principles, among others, that a decision not to serve, made by a plaintiff for forensic or strategic purposes, is antithetical to the duty to serve promptly; and a delay in service of a proceeding commenced under s 588FF, in contravention of the applicable rules, is particularly serious if it occurs after the expiration of the limitation period.

58    In his affidavit dated 24 April 2024, the liquidator deposed that his solicitors and counsel informed him that they had not been aware of the decision in Horne (and, it is to be assumed, the salient statements of principle summarised in it and the effect of the applicable court rules).

Service of proceedings

59    Following the case management hearing on 16 February, and in light of what he now understood, the liquidator instructed his solicitors to effect “service” of the originating processes and supporting affidavits on all the respondents in the voidable transaction proceedings, and to apply to adjourn the proceedings until after the conclusion of the public examinations. The documents were subsequently provided to the various respondents on various disparate dates in January, February and March 2024.

60    On 12 March 2024, the liquidator lodged interlocutory processes in each of the voidable transaction proceedings seeking orders extending the time for service of the relevant originating processes and supporting affidavit nunc pro tunc until various different dates.

61    The applicant’s interlocutory process in VID 31 of 2024 was accepted for filing on 16 April 2024, and the interlocutory process in VID 33 of 2024 was re-lodged and accepted for filing on 30 May 2024. For reasons which are not clear to me, the remaining interlocutory processes in VID 32, VID 34 and VID 35 do not appear ever to have been electronically filed, but were included, unsealed, in the court book.

62    Each of the respondents in the 2024 proceedings (other than the respondents in the Rill Trading proceeding) filed their own interlocutory processes, in which they sought to have the proceedings brought against them dismissed or permanently stayed on various, largely overlapping grounds.

Questions for determination

63    The following questions arise.

64    First, does the 9 March order, on its proper construction, permit the filing by the liquidator of any voidable transaction claim, including against the persons or entities not named in it, or does it extend only to the entities and individuals named in the order?

65    Secondly, if the 9 March order does on its proper construction extend to the persons or entities not named in it, were they denied procedural fairness?

66    Thirdly, was Sinoce BVI (a named party which falls into a category of its own) denied procedural fairness?

67    Fourthly, if the answer to that question is yes, can I then proceed to re-hear the extension application against Sinoace BVI in VID 410 of 2022, or do I have no power to do so because the application is spent?

68    Fifthly, should the liquidator’s nunc pro tunc application for an extension of the time for the service of the relevant originating processes and supporting affidavit in the 2024 proceedings be granted, or should I instead refuse those applications and summarily dismiss the proceedings?

69    The following table summarises the grounds on which each respondent relies. “Yes” means the point was taken by the named party. “No” means that it was not.

Brief description of the competing applications in the 2024 proceedings

VID 31 of 2024 – the Sinoace proceeding

70    By his interlocutory process filed on 16 April 2024, the liquidator sought orders:

(a)    extending the time for service of the relevant originating process and supporting affidavit until 26 February 2024 in respect of Sinoace BVI, and 21 February 2024 in respect of Sinoace HK; and

(b)    adjourning the proceeding until after the public examinations.

71    By their further amended interlocutory process filed on 30 May 2024, the respondents sought orders to the following effect:

(a)    an order setting aside the 9 March order is so far as it applied to them.

(b)    an order permanently staying or setting aside the proceeding brought against them on the ground that the liquidator failed validly to serve the originating process and supporting affidavit on the respondents within the time provided for in the rules.

VID 32 of 2024 – the Zuccubarr proceeding

72    By his interlocutory process lodged 12 March 2024, the liquidator sought orders:

(a)    extending the time for service of the originating process and supporting affidavit to 19 February 2024; and

(b)    adjourning of the proceeding until after the relevant public examinations.

73    By their amended interlocutory process filed on 2 May 2024, the respondents sought orders to the following effect:

(a)    summary dismissal of the proceedings brought against Zeninvest Pty Ltd on the ground that it was not named in the 9 March order;

(b)    a permanent stay of the proceeding against Zuccubarr on the ground that the liquidator failed validly to serve the originating process and supporting affidavit on the respondents within the time provided for in the rules; and

(c)    if the 9 March orders applied to parties other than those named in the order, and the respondents in the Sinoace proceeding or Payton proceeding successfully establish that the 9 March order should be set aside, that the 9 March order should be set aside as a whole.

VID 33 of 2024 – the Payton proceeding

74    By his interlocutory process filed on 30 May 2024, the liquidator seeks orders to the same effect as those in the Sinoace proceeding, namely:

(a)    an order extending the time for service of the originating process and supporting affidavits in respect of each of the 15 respondents; and

(b)    an order adjourning the proceeding until after the public examinations.

75    By an interlocutory process filed on 16 April 2024 by the first, third to twelfth, and fifteenth respondents, and an interlocutory process filed on 29 May 2024 by the second, thirteenth and fourteenth respondents, the respondents sought orders to the following effect:

(a)    the proceeding be dismissed against the second to fifteenth respondents on the ground that they were not named in the 9 March order (alternatively, order be set aside as against them because they had no notice of the application and were thus denied procedural fairness); and

(b)    the proceeding be permanently stayed in respect of each of the respondents on the ground that the liquidator failed validly to serve the originating process and supporting affidavit on the respondents within the time provided for in the rules.

76    The thirteenth and fourteenth respondents (May Wan Khor and David Frederick Burr respectively) were named in the liquidator’s summonses for public examinations. By way of their interlocutory process filed on 29 May 2024, they sought orders permanently to stay those summonses.

VID 34 of 2024 – the Timswee proceeding

77    By his interlocutory process lodged 12 March 2024, the liquidator sought orders:

(a)    extending the time for service of the originating process and supporting affidavit to 19 February 2024; and

(b)    adjourning the proceeding until after the relevant public examinations.

78    By its interlocutory process filed on 7 April 2024, Timswee Pty Ltd sought an order for the proceeding to be permanently stayed because it was not served with the extension application within time and on the additional ground that the case proposed to be brought against it was hopeless.

VID 35 of 2024 – the Rill Trading proceeding

79    By his interlocutory process lodged 12 March 2024, the liquidator seeks orders:

(a)    extending the time for service of the originating process and supporting affidavit to 5 March 2024 in respect of the first respondent, and 21 February 2024 in respect of the second respondent; and

(b)    the adjournment of the proceeding until after the public examinations.

80    The Rill Trading respondents did not appear.

Consideration

The construction question

81    Because it is the logically anterior question, I turn first to the question of the proper construction of the 9 March order.

82    As I have explained above, the liquidator commenced the 2024 proceedings against various entities and individuals not named in the 9 March order (or served with the originating process by which it was obtained), being Sinoace HK, Zeninvest Pty Ltd, Capstone Pastoral Company Pty Ltd a/t Burr Family Trust, Dong-Anh Nguy, Jem Scanlon Pty Ltd, EPB Nominees Pty Ltd a/t Blake Super Fund, Edrob Pty Ltd a/t Fellows Family Trust, EylSuper Pty Ltd a/t Blaskett Superannuation Fund, Maahu Amble Pty Ltd a/t Maahu Amble Superannuation Fund, Judith Payton, Payton Nominees Pty Ltd, Payton Securities Pty Ltd, The Winepress Berwick Assembly of God Church Inc, May Wan Khor, David Frederick Burr and Harding Stenning & Co Pty Ltd.

83    Each of the non-named parties contended that, on its proper construction, the 9 March order did not extend to them. They contended that the order extended only to the entities and individuals named in it. They seek, among other relief, a declaration that the proceedings against them have been commenced contrary to s 588F(3)(a) of the Act, and a permanent stay or dismissal of the proceedings on such basis.

84    The liquidator submits that on a proper construction of the 9 March order, it is what he called a “shelf order” that extends the limitation period for any voidable transaction involving the company, and is not confined to the transactions involving the persons named in it. On this construction, the liquidator submits that the 9 March order permitted the filing of any voidable transaction claim, including claims against the non-named parties.

85    However, counsel for the liquidator accepted, as he was bound to accept, that if, on its proper construction, the 9 March order does not extend to the non-named parties, the proceedings against them were commenced out of time because of the operation of s 588FF(3), and that the proceedings, in that event, would be liable to be dismissed or permanently stayed.

86    So, what is the proper construction of the 9 March order? Is it limited in its operation to the named parties, or does it extend to the non-named parties?

87    The proper construction of court orders is not a matter of fact but a question of law. See Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 at 116 [19] (Branson, Lindgren and Finkelstein JJ).

88    The principles governing the construction of court orders are well established. They were, with respect, helpfully summarised in Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd (No 2) [2023] WASCA 108 (Quinlan CJ, Beech and Vaughan JJA) at [157] as follows:

In determining the meaning of those orders, on their proper construction, it is permissible to have regard to context including surrounding circumstances (much the same as it is permissible to have regard to the surrounding circumstances known to the parties and to the purpose and object of a transaction when construing a commercial contract). However, in having regard to surrounding circumstances, it is relevant to keep in mind that orders are generally framed with a view to their being self-contained and self-explanatory. Also, the surrounding circumstances are not admissible to contradict the language of the orders where that language is unambiguous or susceptible of only one meaning. In this respect the position is no different to the position pertaining to the construction of a commercial contract.

(citations omitted)

89    In my view, the 9 March order is not ambiguous. By what their Honours called its “self-contained terms”, it does not on a plain reading extend beyond those parties named in it.

90    As respective counsel for the non-named parties submitted, and I agree, the words “involving the Company” qualify the phrase “any voidable transaction”, so that the transaction must involve the Company and must “includ[e] voidable transactions involving each of any of [the named parties]”.

91    It was submitted by the non-named parties that the words “and including” exclude all that is not included, citing the maxim expressio unius est exclusio alterius — that is, if one alternative is expressly and specifically mentioned, it rationally tends to exclude the implication of another or of any other. That may well be correct, but it seems to me that the better reason that the liquidator’s submission about the construction cannot be right is because, were it accepted, it would mean that all the words in the order from “and including” to the end of it would be superfluous, which is most improbable. Like contracts and statutes, in the process of construing court orders, sense must be made of the whole, so that “no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”. See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 [71] (McHugh, Gummow, Kirby and Hayne JJ); Jorgensen v Fair Work Ombudsman (2019) 271 FCR 461 at 469–470 [25] (Greenwood, Reeves and Wigney JJ) (rejecting a submission about the construction of a court order because it would have rendered certain words superfluous).

92    If I am wrong about that, and the order can be said to involve an ambiguity, it would be permissible to look at the surrounding circumstances.

93    Here, such circumstances all point the same way — in favour of what, in my view, is the plain meaning of the words of the 9 March order.

94    First, in the originating process for the extension application filed on 21 July 2022, the liquidator sought relief under s 588FF directed in terms only to specified parties, as follows:

An order pursuant to section 588FF(3)(b) of the Act the time for making an application under section 588FF(1) of the Act is extended up to and including 22 January 2024, with respect to any voidable transaction involving the Company and each or any of

a.    Jian Lin;

b.    Li Shao;

c.    Anthony Thomas Gilbert;

d.    Shan Shui;

e.    Zuccubarr Pty Ltd (ACN 006 062 719);

f.    Timswee Pty Ltd (ACN 006 257 736);

g.    Payton Capital Ltd (ACN 163 122 478);

h.    NWC Finance (No. 5) Pty Ltd (ACN 150 448 838);

i.    Rill Trading Resources Inc (British Virgin Islands Company Number 448249); and/or

j.    Sinoace Holdings Limited (British Virgin Islands Company Number 1474809).

(emphasis added)

95    Secondly, the affidavit materials relied on by the liquidator did not say that the liquidator sought orders addressed to any party other than those who had been served with the originating process.

96    As the liquidator submitted, and as I said in my reasons, the power to make an extension order is a discretionary one. In exercising that discretion, the court may consider a number of factors, which include forming a preliminary view of the merits of the proposed proceedings, and balancing the case for granting the extension against any actual prejudice to the respondents that is likely to arise from such an extension.

97    There was no evidence adduced, nor was any serious or substantial submission made, in Cussen No 1 about either issue as it might affect any party other than the named parties. And that fact is reflected in my reasons, including at [18]–[19], as follows:

I am also satisfied that the evidence discloses that the merits of the potential actions against named entities, and the directors of the Company, involving unexplained payments and transfers without any apparent basis are sufficiently sound.

As to prejudice, I agree with the Plaintiff’s submission that, in circumstances where this application has been served on each putative respondent and none has raised an issue of material prejudice, and where numerous letters of demand have been sent – and there thus being no specific prejudice identified – the notion of “presumptive prejudice” should not tell against the making of the order sought. Cf Re Cohalan & Mitchell Roofing (in liq) at [57].

(emphasis added)

98    As I said earlier, I made the 9 March order in the form of the draft order submitted by counsel for the liquidator. It was not in the same form as the order asked for in the originating process, but it was never suggested by counsel — nor could it have been — that the draft order he proffered was intended to operate in a way that was radically different to the terms of the order described in the originating process.

99    Further, the liquidator never made a submission in support of the order that he sought that he was unable to ascertain the identity of the recipients of benefits under possible voidable transactions of the company. On the contrary, he deposed, following his review of the books and records of the company, that he had “identified potential claims totalling $27,129,199.46 against various persons and entities”, being the persons and entities who came to be named in the 9 March order. Those claims were then summarised in 5 pages of written submissions.

100    At the hearing of the various applications now before me, the liquidator’s counsel pointed to a couple of passages in counsel’s submissions which were before me on the making of the 9 March order, in which he said that the case was put more broadly. One such paragraph read: “The [liquidator] anticipates receiving information from the intended public examination process, which may reveal further potential claims against other defendants.” The liquidator also relied on an assertion he made in an affidavit that he “[had] not been able to confirm from the books and records of the Company the names of the clients of Payton Capital.”

101    I reject the contention that by that submission and that evidence, the liquidator could be understood to have been seeking an extension order to permit him to bring relevant claims in respect of a whole class of unidentified putative defendants. They did no such thing. And the notion that a court would make an order extending the time to bring any unidentified transaction against any unidentified person or entity on the basis of such material is improbable in the extreme. As Spigelman CJ said in BP Australia Ltd v Brown (2003) 58 NSWLR 322 at 348 [134]–[136], an ex parte “shelf order” of that type would be made only in exceptional circumstances, and certainly not on the basis of the flimsy matters which the liquidator now seeks to invoke.

102    For all those reasons, it follows that the liquidator’s assertion that the 9 March order extended the limitation period in respect of any voidable transaction with any person or entity, named or unnamed, involving the company is not to be accepted. The order does not say that, and nor was any such order sought.

103    I should also say something about the use of the expression “shelf order”. It was touched on in the course of submissions, because the term was used by the liquidator in his submissions in support of the 9 March order, and I used it in my reasons in Cussen No 1.

104    The term “shelf order” originated from reasons delivered by Austin J in Brown v DML Resources Pty Ltd (in liq) (No 5) (2001) 166 FLR 1 at 8 [31]. See Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher (2015) 254 CLR 489 at 495 [1], where a “shelf order” was said by French CJ, Hayne, Kiefel, Gageler and Keane JJ “sometimes” to refer to an order made under s 588FF(3)(b) which applied “to transactions not able to be identified at the time of the order”. To that extent, the use of the term by the liquidator in his submissions and by me in my reasons in Cussen No 1 for making the 9 March order, was consistent with that definition, because the order sought and made was indefinite as to the transactions it covered with the named parties, upon whom (with the exception of Sinoace BVI) it had been served. (The term shelf order can also, of course, be used to describe an order made under s 588FF(3)(b) where a potential defendant is not identified).

105    But whatever shorthand expression may (or may not) be adopted to describe an order made under s 588FF(3)(b), the question that arises for determination here concerns the proper meaning of the 9 March order, not what shorthand descriptor may be invoked to describe it.

106    Accordingly, each of the proceedings brought by the liquidator against the non-named parties will be summarily dismissed, because the 9 March order on its proper construction did not permit the bringing of any proceeding against them.

Procedural fairness

107    Because I take the view that, on its proper construction, the 9 March order does not extend to the non-named parties, it is unnecessary to consider their additional submission that because they were not given notice of the making of the application that resulted in the 9 March order they were denied procedural fairness.

108    I should, however, deal with the particular facts concerning Sinoace BVI.

109    As I said earlier, I was told that the application made to obtain the 9 March order had been served on each named entity, and that none had raised an issue of material prejudice. See Cussen No 1 at [19]. That was, obviously, a highly relevant consideration. As it turned out, it was not entirely true, because the application had not been served on Sinoace BVI.

110    Sinoace BVI submitted that it is thus entitled to have paragraph 2 of the 9 March orders set aside in so far as it applied to it.

111    The application was never served on Sinoace BVI, nor was it provided to it informally. Instead, so it was later revealed, the liquidator merely attempted to email the documents to the email address “bvi@offshore-inc.com”, which was not Sinoace BVI’s official email address. It seems that the solicitors for the liquidator happened upon that email address in a 2017 Sinoace BVI filing with the corporate regulator in the British Virgin Islands, which email address belonged to the agent used in that year by Sinoace BVI to make the filing for that year.

112    Mr Yang and Mr Chen, both directors of Sinoace BVI, swore that they did not, and do not, have access to the email address “bvi@offshore-inc.com” and that they did not receive any letter or emails from their agent. That evidence was unchallenged.

113    Sinoace BVI therefore established that it did not have notice of the application against it in VID 410 of 2022, and the liquidator did not contend otherwise.

114    Sinoace BVI contended that by reason of that obvious denial of procedural fairness, it is entitled to have paragraph 2 of the 9 March order set aside against it as of right, citing Spigelman CJ in BP Australia Ltd v Brown at 348 [133] (“The power to make orders, and the power to extend time under s 588FF(1) and s 588FF(3) are conferred on a court. There can be no doubt that such a body must obey the rules of procedural fairness. An order of a superior court is not a nullity even if made in breach of this obligation. Nevertheless, a person affected is entitled as of right to have any such order which affects that person set aside”.)

115    Where a person is identified by a liquidator as someone who might be the target of an extension application under s 588FF(1), but is not given the opportunity to be heard on the s 588FF(3)(b) application, that person is entitled to have the order set aside. It is not necessary to show more than that the applicant is affected by the order and was not given an opportunity to be heard before it was made. See, for example, Williams (as liquidator of Willahra Pty Ltd (in liq)) v Kim Management Pty Ltd (2012) 1 Qd R 387 at 393 [22] (Dalton J).

116    Here, counsel for the liquidator only faintly resisted the proposition that Sinoce BVI is thus entitled to an order that paragraph 2 of the 9 March order be set aside in so far as it applied to it. The proposition is irresistible, and I will make an order accordingly.

117    Further, for reasons explained below, in my view I have no power to re-hear the application to join Sinoace BVI.

Is the extension application against Sinoace BVI to be re-heard or is it spent?

118    The question then arises whether I can then proceed to re-hear the extension application against Sinoace BVI in VID 410 of 2022, or whether I have no power to do so because the application is spent.

119    The liquidator seeks leave in VID 31 of 2024 to amend his interlocutory process filed on 16 April 2024 by adding a new paragraph 2A in these terms:

In the event that Order 2 made on 9 March 2023 in proceeding VID410 of 2022 is set aside against [Sinoace BVI or Sinoace Hong Kong], or either of them (Affected Respondents), then:

(a)    the Court re-hear the Applicants’ application in proceeding VID410 of 2022;

(b)    the Court give the Affected Respondents a right to be heard in respect to the Applicants’ application in proceeding VID410 of 2022;

(c)    the Court join the Affected Respondents to proceeding VID410 of 2022 for the purposes of the re-hearing; and

(d)    the Court reinstate Order 2 made on 9 March 2023.

120    He seeks the same relief against all the respondents (including Payton Capital Ltd) in VID 33 of 2024.

121    In so far as the application to amend is brought against all respondents in VID 33 other than Payton Capital Ltd, it must be refused, because (i) no application was ever brought against them; (ii) the 9 March 2023 order does not extend to them; and (iii) r 9.05(3) of the Federal Court Rules 2011 (Cth) provides that “[i]f a person is joined as a party under this rule, the start date of the proceeding for the person is the date on which the order is made.” As the liquidator accepts, that date in this case would mean that the claims would be time barred.

122    I am not sure why the liquidator’s application to amend includes seeking to add Payton Capital Ltd, because it was named in the original application and in the 9 March order, and (unlike Sinoace BVI) was served with the VID 410 of 2022 application.

123    In any event, Sinoace BVI contended that upon the making of an order setting aside the 9 March order, no part of the original application would remain undetermined against it (and is thus spent).

124    It follows, if those submissions are to be accepted, that there can be no re-hearing of the original application.

125    Greig v Stramit Corporation Pty Ltd [2004] 2 Qd R 17 stands for the proposition that once an application under s 588FF(3)(b) for an extension of time has been determined, it cannot be re-heard if an extension order made upon that application is later set aside (Williams JA, Jerrard JA, Fryberg J dissenting). That is the ratio of the case.

126    In that proceeding, on 7 September 2000 Mullins J had made an order on an ex parte application extending the time within which the liquidators might institute proceedings pursuant to s 588FF(1).

127    On 16 May 2002, Chesterman J set the order aside in so far as it applied to Stramit Corporation Pty Ltd (Stramit).

128    On 5 June 2002, the liquidators applied for an order joining Stramit in the proceedings and a consequential order extending the time for bringing proceedings until 30 June 2002.

129    On 1 October 2002, Mullins J on the original application filed on 31 August 2000 made an order adding Stramit as a party and extending the time pursuant to s 588FF(3)(b).

130    Stramit appealed and sought to have the 1 October order set aside.

131    By a majority (Williams and Jerrard JJA, Fryberg J dissenting), the Full Court held that the effect of Chesterman J’s order was that Stramit was not a creditor affected by the order made on 7 September 2000, making it necessary for the liquidators to commence a fresh proceeding seeking an extension of time — which, as is the case here, they could not do because the time limit had expired.

132    Because of the nature of the controversy raised before me, it is preferable that I set out in full the relevant parts of the respective judgments in that case dealing with the power to re-hear point.

133    Williams JA held at [71]:

Stramit was not identified as a party to the original application as at 7 September 2000 and … it is necessary to somehow have a proceeding against Stramit before an order binding upon it can be made. There was an application made to the court by the document filed 31 August 2000 and there was a final order of the court, disposing of all issues raised by that application, made on 7 September 2000. The fact that it was subsequently held that that order was not binding on Stramit, who was not a party to that application, does not mean that the proceeding commenced by the application has not been fully and finally determined by the order of 7 September 2000.

134    At [77]–[82], his Honour continued:

[77] Stramit’s appeal concentrated on the order for joinder made pursuant to s. 81. But her Honour’s conclusion that the application of 31 August 2000 remained “extant and undisposed of in respect of Stramit” was also strenuously attacked.

[78] The formal order of Chesterman J. of 16 May 2002 relevantly states: “That the order of 7 September 2000 that time be extended for the Respondent to make applications under s 588FF(1) of the Corporations Act be set aside in so far as it applies to Stramit Corporation Ltd.” The order itself does not contain his Honour’s remarks which I have called a “footnote” and quoted in para. [52] hereof; those remarks are clearly obiter. I have already pointed out that neither Chesterman J. nor Austin J. in Brown No. 2 cited any authority for the proposition that the original application would remain extant so far as the creditor held to be excluded from the operation of the order originally made was concerned. Mullins J. repeated those remarks. As I have already pointed out the original ex parte order was not set aside; it still stands so far as every creditor of the company, other than Stramit, is concerned. The order of 7 September 2000 is a final order of the court disposing of all the issues raised by the application filed 31 August 2000.

[79] In those circumstances counsel for Stramit submits that the matter is covered by s. 10(1)(d) of the Corporations (Ancillary Provisions) Act 2001. That section relevantly provides that a proceeding commenced under the Law may be continued as provided for by that Act provided that the proceeding “had not been concluded or terminated” before the enactment of the Corporations Act 2001 (Cth). The submission is that if the order of 7 September 2000 finally disposed of the application of 31 August 2000 then s. 10 did not apply to it.

[80] In my view there is merit in that submission. The effect of the order of Chesterman J. is a declaration that Stramit is not a creditor affected by the order of 7 September 2000. That order of 7 September still remains as a final order co-extensive with the relief sought in the application of 31 August 2000. In those circumstances one cannot say that by some process the application has been reopened so that the applicant liquidators can seek further orders on it.

[81] The consequence is that strictly the liquidators should have commenced a fresh proceeding after the order of Chesterman J seeking a relevant order pursuant to s 588FF with respect to Stramit. It is obvious that any such application was doomed to fail because on any view it was made outside the time periods prescribed therein, and as Mullins J has correctly held there was no provision in the Act (which would have been the legislation applicable at the time such fresh application was made) permitting an extension of a time period prescribed in that section. If the court was to regard the application filed 5 June 2002 … as a fresh application seeking relief pursuant to s 588FF(3)(b) against Stramit it would be bound to fail for the reason just given.

135    At [113]–[118] Jerrard JA reached the same conclusion, reasoning as follows:

[113] The critical point upon which those learned judges disagree is whether, as Chesterman J. stated and Mullins J. accepted, the order made by Chesterman J. resulted in the liquidator’s application to extend time filed 31 August 2000 remaining extant and undisposed of in respect of Stramit. Williams J.A. holds that there were no such extant proceedings, and Fryberg J. that there were. I respectfully agree with the reasons and conclusions of Williams J.A., and respectfully disagree with those of Fryberg J., and likewise respectfully disagree with those of Chesterman J., Mullins J., and Austin J. as expressed by the latter in Brown (No. 3) (2001) 188 A.L.R. 469 at [29] – [30]. My reasons are as follows.

[114] Fryberg J. describes the order made 16 May 2002 by Chesterman J. as resulting in the liquidators being no longer entitled to all of the relief for which they applied on 31 August 2000. His Honour holds that the question whether that application had been finally disposed of can be resolved only by examining what occurred at the hearing. He also holds that what occurred was not that Chesterman J. set aside the order as against Stramit with the intent of ensuring that the original application failed against that company, but rather that Chesterman J. did so to enable a hearing to take place, should the liquidator wish its application re-argued.

[115] With due respect to that view, the application filed 31 August 2000 did not apply for any order for relief against Stramit. It asked only for an order that the time within which “an application” might be brought pursuant to s. 588FF(1) of the Corporations Law be extended to end on 11 September 2001. No potential respondents were identified. The order made by Mullins J. on 7 September 2000 was in similar general terms (extending the time for bringing “applications”) and made no reference to Stramit or any respondent. That order enabled the liquidators to bring by 11 September 2001 pt 5.7B proceedings against any respondents they chose, on any s. 588FE ground.

[116] Had Mullins J. in her order made 7 September 2000 specifically excluded from the grant of leave both Stramit, and the other entity described in the evidence supporting the application before her Honour as a likely respondent to later s. 588FF proceedings, on the ground that neither entity had been served with the application and should have been, the liquidators would have had various choices of action. They could have immediately commenced proceedings within time, at least against Stramit, as the liquidators now depose they were in a position to do. They could have appealed the order by Mullins J. excluding Stramit. They could have brought an urgent s. 588FF(3) application on notice against Stramit, with the latter as a respondent. If the liquidators took none of those three steps, then whether or not they abandoned their original intention of possibly proceeding pursuant to s. 588FF(1) against Stramit, no further step would remain to be taken by the liquidators, and no further listing or order by the court would be required, to dispose of the application filed 31 August 2000. The order made 7 September 2000 excluding Stramit and that other entity would stand as the final order of the court. With respect to Fryberg J., that position is different from that prevailing in Re McLellan [1979] Qd.R. 392, cited by his Honour, in which an originating summons was not dealt with on the return day by the Chamber Judge, nor adjourned for a hearing to a later day. As held by Andrews J., as he then was, that summons had enlivened the jurisdiction of the Court and there had been a lapse in formal procedure. There had not been any order made on that summons, let alone a final order.

[117] The situation when the ex parte order actually made by Mullins J. was set aside on 16 May 2002 “in so far as it applies to Stramit Corporation Ltd” was the same, in my judgment, as the position that would have existed had the order made by Mullins J. on 7 September 2000 specifically excluded Stramit. That position is that subject to appeal, the proceeding on the ex parte application inasmuch as it was an application to which Stramit should have been a respondent, was concluded by the order of Chesterman J. but adversely to the liquidators. There was no extant but incomplete proceeding on that application in which some further step still remained to be taken, and no further order was required to dispose of that application, either against Stramit or as to the application made in general terms against all possible respondents.

[118] This has particular significance because of the nature of the application filed 31 August 2000, which needed to be made on or before 11 September 2000. Once that date had passed without any proper application by the liquidator against Stramit, no relevant application or order could be made. This distinguishes the position from that in, for example, the Family Court of Australia in the circumstances considered in Taylor v. Taylor, and those the then Court of Bankruptcy dealt with in Cameron v. Cole (1944) 68 C.L.R. 571.

136    Justice Fryberg dissented, reasoning at [146]–[150] as follows:

[146] Was the original application then finally disposed of? There is no doubt that even after 16 May 2002 so much of the order of 7 September 2000 as remained was a final order of the court. However that does not answer the question. Nor is it answered by the fact that the liquidators were no longer entitled to all of the relief for which they had applied. Both of these matters are relevant to the question, but they do not conclude it.

[147] When on an application a court makes a final order granting the applicant less relief than was sought in the application, the question whether the application has been finally disposed of can be resolved only by examining what occurred at the hearing. It may be that the court considered whether relief to the extent sought should be granted and decided that it should not. In that case the application has been disposed of, subject to an appeal by either (or any) party. On the other hand it may be that the court intended to deal with the application only in part and to leave part of it to be resolved at some future time. Often this will be reflected in an order adjourning the further hearing of the application to a date to be fixed, but an adjournment order is not essential. The same result follows when an appeal court sets aside an order in part and remits the matter to the court below. Where a court does not decide part of an application on the merits the application has not been fully disposed of.

[148] In the present case Chesterman J. did not set aside the order as against Stramit with the intent or for the purpose of ensuring that the original application fail against that company; in other words, on the merits. He did so to enable a hearing to take place. If there were any doubt about this his Honour expressly dispelled it in the penultimate paragraph of his reasons for judgment:

“[37] Accordingly, I order that the order in so far as it applies to Stramit be set aside. The purpose of this order is to leave extant the liquidators’ application to extend time but to remove from the order actually made the extension of time to commence proceedings against Stramit. The liquidators, if they so wish, must re-argue the application.”

This was no mere footnote to his Honour’s reasons. It was their culmination. It embodied the essence of his decision.

[149] It follows that when it came before Mullins J. on 13 June 2002 the liquidators’ application had not been fully disposed of. Her Honour so held. She was correct.

[150] That finding led her Honour to find that the case was covered by s. 1383(3) of the Corporations Act 2001. From that she concluded that by reason of ss 7 and 8(2) of the Corporations (Ancillary Provisions) Act 2001, the liquidators’ application which came before her on that date was to be treated as an application brought under s. 588FF of the Corporations Act, not the Corporations Law. As I understood it, that conclusion was not challenged on appeal.

(footnotes omitted)

137    It is necessary now to go to some subsequent cases that have considered Greig.

138    In BP Australia Ltd v Brown at 359–360 [205]–[208], Spigelman CJ (with whom Mason P and Handley JA agreed) said that he “saw considerable force in the dissenting opinion of Fryberg J” in Greig and for the view that a re-hearing of a s 588FF(3)(b) application could be ordered. But as the Chief Justice said expressly at 360 [209], it was unnecessary for him to decide the issue of whether the majority in Greig or the dissenting judgment was correct, because counsel for the unsuccessful appellant did not submit that a consequence of the character identified by the majority in Greig would flow, so that was not part of the case before the Court. It follows that his Honour’s observations about Greig, which I now set out, are obiter dicta:

[205] By majority, Williams JA and Jerrard JA, Fryberg J dissenting, the court [in Greig] allowed the appeal from Mullins J. Her Honour had made an order under s 81 of the Supreme Court of Queensland Act 1991 (Qld) which permits amendment of an application even though the amendment will add a new party or a relevant period of limitation has ended. Insofar as the decision turned on the terms of that section it is not directly applicable in New South Wales. (See further, Pt 20, r 4 of the Supreme Court Rules.)

[206] The majority in Greig rejected the basis on which Chesterman J and Mullins J proceeded, adopting that of Austin J, that the original proceedings remained in existence after the ex parte orders had been set aside against the creditors. (See at [56], [71]–[72], [79]–[82], per Williams JA and [114]–[118], per Jerrard JA; contra at [146]–[150], per Fryberg J.) The majority concluded that the ex parte orders had finally disposed of the proceedings on the original application and the subsequent order to set aside the order as against a particular creditor did not alter that position.

[207] I see considerable force in the dissenting opinion of Fryberg J that the effect of the subsequent order, which is in identical terms to that of Austin J in the present proceedings, had the consequence that the original proceedings were not finally disposed of. The events in Greig differ in that the original order extending time did not, as the orders made by Austin J did, reserve liberty to persons to apply to set aside or vary the order extending time. However, this express reservation only made clear what would in any event be the legal position: a person affected by an ex parte order may always apply to have the order set aside. (See Owners of the SS Kalibia v Wilson (1910) 11 CLR 689 at 694, per Griffith CJ.)

[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).

[209] It is, however, unnecessary to decide this issue. Although, in the course of oral submissions, Mr Coles QC did suggest that the original order was final, he did not submit that a consequence of the character identified by the majority in Greig would flow. That was not part of the case before this Court.

139    I was also taken to what Doyle CJ said in Ansell Ltd v Davies (2008) 219 FLR 329 at 337–338 [54], but his Honour’s observations about Greig were limited to endorsing the view that an application under s 588FF(3) is a valid application even though an order was sought against creditors who were not identified and who were not then parties to the proceedings, nor were they served with the proceedings. It was that aspect of BP Australia Ltd v Brown that his Honour agreed with, noting that, in any event, he was “not persuaded that the decision … in Greig …is to the contrary”.

140    In Re Octaviar Ltd (2012) 271 FLR 413 at 432–433 [61] Black J recorded a formal submission made by the defendant (a company called Fortress) that “the Court has no power, on discharging the orders previously made, to re-exercise that discretion …” and that the “view expressed by Williams JA in Greig v Stramit, that, on the discharge of orders obtained ex parte or irregularly, the proceeding is at that point concluded so that a fresh proceeding must be commenced by the Liquidators, which would be outside the period prescribed by s 588FF(3)(b) of the Corporations Act is correct and should be preferred”.

141    Justice Black said of that submission (at [61]): “A contrary view was taken by Fryberg J in Greig v Stramit. In BP v Brown, by which I am bound, Spigelman CJ (with whom Mason P and Handley JA agreed) referred to that contrary view …” and quoted what the Chief Justice said at [207]–[208] of his reasons (quoted above).

142    His Honour also said in Re Octaviar at 418–419 [17]–[19] that he was bound by BP Australia Ltd v Brown in so far as it stood for the proposition that an application under s 588FF(3)(b) seeking a general order for an extension of time to make an application under s 588FF(1) against any creditor is a valid application and an order in those terms is valid, which is the effect of the conclusion reached by Spigelman CJ at [168]. And he was, with great respect, correct to regard himself as bound by that proposition, as the High Court noted in Fortress Credit Corporation at 499 [9] (French CJ, Hayne, Kiefel, Gageler and Keane JJ). But it is not clear to me why his Honour also regarded himself as bound by Spigelman CJ’s separate observations in BP Australia Ltd v Brown about Greig at [207]–[208], because they were, in my respectful view, obiter observations, for the reasons that I have endeavoured to explain.

143    In Re Harris Scarfe Ltd (in liq) (No 3) (2008) 216 FLR 242 Debelle J at 250 [28] said that he preferred the reasoning of Spigelman CJ in BP Australia Ltd v Brown, as follows:

[28] The reasoning of the majority in Greig depends on the proposition that the effect of an order setting aside an ex parte order against a creditor is that the application has been determined and is no longer extant so that it is necessary for the liquidator to institute a fresh application under s 588FF(3) against that creditor: see Williams JA (with whom Jerrard JA agreed) at [81] and [82]. Such an application will be doomed to failure because it is a fresh application made outside the 3-year period prescribed by s 588FF(3). The conclusion that the effect of an order setting aside an ex parte order has the consequence that the application has been determined and is no longer extant is, in my view, wrong for the reasons already expressed. For that reason, I prefer the reasoning of Spigelman CJ in BP Australia Ltd.

144    In Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492 Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ reiterated the long-standing principle that “an intermediate appellate court – and all the more so a single judge – should not depart from an interpretation placed on [corporations] legislation by another Australian intermediate appellate court unless convinced that that interpretation is plainly wrong”. See too Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 151–152 [135] (“Intermediate appellate courts and trial judges in Australia should not depart from decisions in intermediate appellate courts in another jurisdiction on the interpretation of Commonwealth legislation or uniform national legislation unless they are convinced that the interpretation is plainly wrong”); and Rogers J in Hamilton Island Enterprises Pty Ltd v Commissioner of Taxation [1982] 1 NSWLR 113 at 119 (“In my view it is of cardinal importance in the proper administration of justice that single judges of State Supreme Courts exercising federal jurisdiction should strive for uniformity in the interpretation of Commonwealth legislation. Unless I were of the view that the decision of another judge of co-ordinate authority was clearly wrong I would follow his decision”).

145    In my respectful view, and notwithstanding the views expressed in Re Octaviar and in Harris Scarfe, I regard myself as being bound to follow the majority finding in Greig that once an application under s 588FF(3)(b) of the Act for an extension of time has been determined, it cannot be re-heard if an extension order made upon that application is later set aside

146    I do not regard that decision as plainly wrong.

147    On the contrary, in my respectful view, the conclusion reached by Williams JA and Jerrard JA was correct for the reasons their Honours gave.

148    For those reasons, in my view, it is not open to me to re-hear the original application, and I decline to do so.

149    But in any event, for reasons I will turn to shortly, in any event I would not allow the liquidator’s nunc pro tunc application with respect to Sinoace BVI.

150    Before turning to the liquidator’s nunc pro tunc applications, I need first to deal with an additional issue that concerns Sinoace HK.

Sinoace HK

151    Sinoace HK was one of the non-named parties.

152    It was not incorporated until 2020.

153    Quite how it was (and is) contended that it therefore entered into a voidable transaction with the company in 2017 was never satisfactorily explained.

154    Mr Miller valiantly tried to provide an explanation, but as this passage from the transcript demonstrates, it will not do:

MR MILLER: What Mr Brown puts, your Honour – and with respect, I understand the force of the submission – is that Sinoace Hong Kong was not incorporated at the time of the transactions.

That Sinoace Hong Kong could not possibly have been the recipient of those payments and therefore that the liquidator could never succeed in a claim against Sinoace Hong Kong. I agree, with respect, with those propositions except the last one. If, your Honour, it is the case that Sinoace BVI, upon receiving the payments, later transferred them or the proceeds of those payments or the benefits of those payments to Sinoace Hong Kong, then there is a basis for relief under Section 588FF. And I say that by reference to

HIS HONOUR: But the critical word in that proposition is “if”.

MR MILLER: If. And I accept that, your Honour, and I must accept that.

HIS HONOUR: Well, “if” means you’re speculating about it.

Three miscellaneous matters

155    I should also mention the submission put, albeit faintly, by the respondents in VID 32 of 2024 that the 9 March order should be set aside in its entirety against all parties (see paragraph 73(c)) above) because the 9 March order was not “severable” as between the parties named in it. It is an unlikely proposition, but, in any event, it does not arise because it was premised on there being a re-hearing of some or all of the applications for an extension of time against the various respondents named in VID 410 of 2022.

156    Another matter that I should mention, lest it be thought that I had also overlooked it, was that a number of parties submitted that I should dismiss the liquidator’s claims because they were hopeless. In some instances, Mr Miller relied on draft statements of claim in order to try to rebuff that contention. In the view I take of the other questions, I need not burden these reasons with discussion of the merits or otherwise of the proposed claims.

157    In VID 33 of 2024, the thirteenth and fourteenth respondents were included in the liquidator’s summonses for public examinations. By way of their interlocutory process filed on 29 May 2024, they sought an order that the summonses for their public examination be permanently stayed. In circumstances where the voidable transaction proceeding is to be dismissed, I assume, because it was not suggested to the contrary, that no purpose is to be served in any public examination of the thirteenth and fourteenth respondents. I accordingly will make the order they seek.

Liquidator’s application for nunc pro tunc extension to effect service

158    Rule 2.7 of the Corporations Rules provides that the originating process must be served “as soon as practicable” after filing the originating process and “in any case, at least 5 days before the date fixed for hearing”.

159    Similarly, pursuant to r 8.06 of the Federal Court Rules, an applicant must serve on each respondent an originating application as soon as practicable and at least 5 days before the return date fixed in the originating application.

160    In each of the 2024 proceedings, the time for service expired at the latest on 28 January 2024. The liquidator accepted that it had failed to serve the originating processes by the relevant date and therefore breached both r 2.7 of the Corporations Rules and r 8.06 of the Federal Court Rules.

161    As the Victorian Court of Appeal (Warren CJ, Tate and Beach JJA) said in Horne at 353–354 [108]–[111]:

[108] Moving to the third issue, namely whether r 2.7 fixes a time to which r 3.02 may apply, we reject the respondents’ submissions that ‘as soon as practicable after filing’ does not fix a time for effecting service. As the Court of Appeal said in Morgan, time may be fixed by requiring an act to be done ‘forthwith’. Similarly to the expression ‘as soon as practicable after filing’, the meaning of ‘forthwith’ is not certain when considered in abstract. The content of a time requirement of ‘forthwith’ or ‘as soon as practicable’ will vary depending on the facts of each case, but there is nevertheless a fixing of time. As the applicants submitted it is a way of fixing time not by direct specification of dates but by reference to facts which will establish what the time limit is.

[109] Our conclusion is reinforced by the words ‘and, in any case, at least 5 days before the date fixed for hearing’. Those words in r 2.7 set the outer limit of the ‘as soon as practicable after filing’ time requirement. We accept the applicants’ submission that the presence of the words ‘and, in any case’ indicates that both elements of r 2.7 do the same work and that the second element takes precedence over the first.

[110] Indeed, to refer to the words ‘as soon as practicable after filing’ as a central, overriding or mandatory command or standard is unhelpful. If a party effects service well after it became practicable to do so, the party being served may attempt to set aside service by establishing that in the circumstances of the case, it had become practicable to serve well before service was effected. It is a time requirement that will have either been met or not been met, depending on the facts of the case. It was not argued by the respondents that a party effecting service well after it had become practicable to do so but more than five days before the hearing date, would not be in breach of r 2.7. If a party could be found to have contravened the ‘as soon as practicable after filing’ element of r 2.7 while not having contravened the ‘at least 5 days before the date for hearing’ element, it is difficult to conceive how the former element does not fix a time.

[111] We note that the second element of r 2.7, ‘and, in any case, at least 5 days before the date fixed for hearing’, plainly fixes a time for the doing of an act or thing in relation to a proceeding.

162    Rule 1.10 of the Corporations Rules provides that rules of the court that provide for the extension of a period of time fixed for doing any act or thing in relation to a proceeding apply to a proceeding to which the Corporations Rules apply. Rule 1.39 of the Federal Court Rules relevantly provides:

The Court may extend or shorten a time fixed by these Rules or by order of the Court:

(a)    before or after the time expires; and

(b)    whether or not an application for extension is made before the time expires.

163    In order to obtain the nunc pro tunc extension that the liquidator seeks in the 2024 proceedings under that rule, he must give an explanation for the delay. See by way of example Flint v Richard Busuttil & Co Pty Ltd [2013] FCA 925 at [28] (Katzmann J).

164    As Ipp JA (Tobias and McColl JJA agreeing) said in Arthur Andersen Corporate Finance Pty Ltd v Buzzle Operations Pty Ltd (in liq) [2009] NSWCA 104 at [82] (cited with approval by the Court of Appeal in Horne at [53]):

In my view it would be inappropriate to allow an extension of time for the service of a writ or statement of claim where a significant cause of the delay has been the willingness of the plaintiff to do nothing about service while awaiting a decision from a litigation funder as to whether or not to provide the necessary funds. Were that to be regarded as a good reason to extend time, the Court would be allowing plaintiffs to arrogate to non-parties the right to decide the period by which the time for service of a writ should be extended. That would be fundamentally in conflict with the Court’s duty to exercise, alone, the discretion conferred upon it.

165    The Court of Appeal in Horne (at [55]) set out the following principles which emerge from the legislative provisions, rules and case law as follows (adopting them from what Judd J had said below):

(1)    The liquidators’ opportunity to extend the period within which to commence a proceeding under s 588FF is a once only opportunity.

(2)    An extension of time under s 588FF(3)(b) may be justified to enable a liquidator to complete investigations, and identify potentially voidable transactions and defendants.

(3)    The opportunity for extension under s 588FF(3)(b) covers the field, excluding other avenues to obtain further time within which to commence a proceeding.

(4)    An application for extension under s 588FF would ordinarily require notice to be given to putative defendants, who have ‘a substantive interest in the question to be determined’.

(5)    When deciding whether to extend time under s 588FF, the court must balance the interests of business certainty against the prospects for recovery to benefit creditors. Expedition is of the essence.

(6)    The Corporations Rules impose a mandatory obligation to serve the Originating Process as soon as practicable.

(7)    The regulatory context (statute and rules) informs the exercise of any discretion to extend time for service, including under r 5.12.

(8)    On commencement of a proceeding, the liquidators must verify a proper basis for the allegations made in the proceeding.

(9)    An extension under r 5.12 would not usually be granted to enable a plaintiff to further investigate the merits of the claims or obtain litigation funding.

(10)    It is the duty of a plaintiff to serve legal process promptly. The obligation is more acute in the case of a proceeding commenced under s 588FF, arising directly under r 2.7 in relation to an Originating Process, and more generally under s 25 of the Civil Procedure Act.

(11)    Even in the absence of a requirement under the rules to serve as soon as practicable, an applicant for an extension under r 5.12 would be required to demonstrate reasonable steps had been taken to serve the court process.

(12)    A decision not to serve, made by a plaintiff for forensic or strategic purposes, is antithetical to the duty to serve promptly.

(13)    An extension will not ordinarily be granted to facilitate a plaintiff’s decision not to serve process on a defendant, whose whereabouts were known and who might readily be served.

(14)    A delay in service of a proceeding commenced under s 588FF, in contravention of the applicable rules, is particularly serious if it occurs after the expiration of the limitation period.

166    In this case, it was submitted on behalf of all respondents who appeared that the liquidator deliberately and strategically took it upon himself not to take any steps to serve the originating process on the respondents; that he knowingly allowed the time for service required by r 2.7 of the Corporations Rules and r 8.06 of the Federal Court Rules to expire, including because it would be “less onerous” on him to delay service until after the completion of certain public examinations; and that in those circumstances, having arrogated to himself a decision to delay service that was not his to make, his application for nunc pro tunc orders to make good late service should be refused.

167    As Mr Fary SC put it in his written submission on behalf of his clients (which were adopted by the others):

This is made clear from the Liquidator’s state of knowledge as at 31 January 2024, expressed in the Lam email sent on that date, that he was required to make an application to Court under r 1.39 of the Rules for an extension of the time to comply with the Rules as to service. In full knowledge that the time for service had recently lapsed and an extension was needed, the Liquidator nevertheless stated in the Lam email “[n]otwithstanding the Court’s direction to notify you of these proceedings, we do not intend to serve the Application… until the conclusion of the Public Examinations which we anticipate will be held on or around 15 April 2024”.

The Liquidator repeated that service of the Originating Process on the Respondents was deliberately being withheld by him so that he could first complete the public examinations … which the Liquidator served on the Respondents and the Court on 15 February 2024 in furtherance of orders which the Liquidator sought to be made at the second case management hearing of the proceeding on 16 February 2024. In the Lam affidavit the Liquidator proposed he be allowed to complete the public examinations before serving the Originating Process on the Respondents including because “[t]he public examinations may reveal facts and documents that are relevant to the further conduct of [the proceedings], the relief sought in those proceedings, and the claims made in those proceedings”, echoing the reasons he had given to the Court in the Extension application for why he ought be granted the extension period.

The Liquidator added that “[i]t would be less onerous on the Applicants if the public examinations were completed first, prior to the continuation of [the proceedings]. In this respect, the administrative resources of the Applicants and their solicitors can be directed at the public examinations first, and then towards the continuation of [the proceedings] from June 2024 onwards.” The Liquidator sought orders be made at the second directions hearing that:

(a)    the time for service of the Originating Process and Affidavit in Support be extended pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) to five (5) days prior to the next return date; and

(b)    the proceedings be adjourned until a first available date after 31 June 2023 (sic) or a date suitable to the Court”.

The Lam email and Lam affidavit starkly reveal that the Liquidator deliberately determined not to serve the Originating Process on the Respondents and allow those documents to go stale for forensic and strategic purposes having regard to the Liquidator’s interests in the proceeding. By withholding service of the Originating Process, the Liquidator arrogated for himself control over when service should occur, with the clear intention to affect a stay of the proceedings, which he intended to be until at least 31 June 2024 [sic], so that he could first conduct and complete the public examinations which he had failed to diligently commence during the 18 month extension period he had previously been granted by the Court.

The Court should not extend the time for service of the Originating Process and affidavit in support pursuant to r 1.39 of the Federal Court Rules. It should order the proceeding be permanently stayed.

As Hodgson JA noted in Tolcher v Gordon, “[a] liquidator who does not commence proceedings until just before expiry of the limitation period should in my opinion be especially diligent in pursuing prompt service of the proceedings”, and any “delay in service of such proceedings, in contravention of the rules, is particularly serious if it occurs after the expiration of the 3-year limitation period.” The Liquidator in the present case has shirked diligent service and instead set in motion a scheme which was designed to obtain for him what was tantamount to a further extension to the extension period he had previously been granted in order for him to continue investigations into the 588FF(1) claims against the Respondents through conducting public examinations.

Delaying service of an originating process in order to conduct further investigations into the merits of a claim has been specifically rejected by the Court; in Pell v Hodges Handley AJA stated “[a] plaintiff who issues proceedings just before the limitation period and only then has the merits of the case investigated should not have any expectation of obtaining an extension of time to enable investigations to continue. There should also be no expectation that time spent in this way after the statement of claim has been issued, especially after it has become stale, will be accepted as an adequate explanation for such delays.”

Delaying service of an originating process in order to avoid costs and inconvenience in a liquidation, being the only other reason given by the Liquidator for his deliberate decision to withhold service, was specifically rejected by Judd J in Horne as founding a proper basis upon which to extend the date for service of a proceeding commenced under s 588FF of the Corporations Act.

In an application for an extension of time to affect service, the applicant is required to demonstrate reasonable steps have been taken to attempt to serve the court process. None [was] taken in this case.

In Buzzle Ipp JA stated that “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 [an extension]. Any prejudice suffered, in such circumstances, were the writ not to be extended, would be self-inflicted … the failure of the Liquidator to serve in this case was entirely deliberate. Any prejudice the Liquidator may [have] suffered as a result of his application for an extension of time being refused is, therefore, self-inflicted.

…

There was further a continued stark lack of diligence by the Liquidator in seeking to obtain an extension of the time to affect service. It was communicated to the Respondents that the Liquidator had instructed his lawyers not to make a formal application to extend time for service in an email sent on 15 February 2024, following Summer Lawyers’ proposal to Mills Oakley that this was the proper course to adopt. Despite orders made by the Court on 16 February 2024 requiring the Liquidator to make any application for an extension of time for service by 4pm on 8 March 2024, no formal application to extend time for service was made until 12 March 2024. This lack of diligence by the Liquidator occurred with the knowledge that the limitation period for the commencement of the proceedings set by the extension period had expired, the time for service of the proceedings had been allowed to expire, this was in contravention of the service requirements of the Court Rules and required the indulgence of an extension of time by the Court pursuant to r 1.39 the Rules, and of the authority of Horne, of which he was made aware on 16 February, that the Courts took a very dim view of such conduct by liquidators. As such, the Liquidator is not blameless for the dilatory conduct in this case.

168    I have set out the lengthy extract from counsel’s submission, and with respect adopt all of it, because I could not put it better myself. The extract explains precisely why the liquidator’s nunc pro tunc applications must be refused.

169    The liquidator’s conduct in arrogating to himself the role of deciding when to effect proper service on the respondents, flying in the face of the Rules and the applicable principles, is made even worse in light of the leisurely way he has approached his task since his appointment, and his unfortunate practice of making court applications on the final day of limitation periods.

170    I should mention one other point the liquidator made, namely that the discretion not to extend time should be exercised in his favour because he acted on the advice of solicitors, citing Re Convector Grain Pty Ltd (in liq) (2017) 323 FLR 147 and Tolcher v Gordon [2005] NSWCA 135; (2005) 53 ACSR 442. The facts in those cases are far removed from the facts here. As the liquidator’s own evidence demonstrated, from 30 January 2024, he was aware that the time for service had expired. With that knowledge, and for the strategic purposes to which he deposed, and which are set out above, he took it upon himself to decide for himself when service should occur, for a reason that could best be summed up as “because it suited me to do so”. That his solicitors and counsel were apparently unaware of the governing and well-established principles in cases like Horne in those circumstances is irrelevant and the cases on which he relied are of no avail.

171    The respondents in these proceedings are all facing claims in which the liquidator challenges transactions which took place in 2017. His explanations for the delay put in support of his nunc pro tunc applications are wholly inadequate, for the reasons I have detailed above.

172    I therefore refuse the liquidator’s nunc pro tunc applications in the 2024 proceedings.

Disposition

173    For those reasons, I will make orders refusing the liquidator’s application for nunc pro tunc orders; I will order in VID 31 and 33 that the liquidator’s application to amend his interlocutory process be refused; I will set aside the 9 March order in so far as it applies to Sinoace BVI; and I will order that each of proceedings VID 31, VID 32, VID 33, VID 34 and VID 35 of 2024 be summarily dismissed. Proceeding VID 410 of 2022 will be dismissed because, for the reasons I have explained above, no further relief can be granted in respect of it.

174    I also invite the parties to file brief submissions about costs.

Associate:

Dated:    4 July 2024

SCHEDULE OF PARTIES