Federal Court of Australia

Sozou (liquidator) v ACN 608 767 942 Pty Ltd, in the matter of SSG NSW Pty Ltd ACN 637 378 333 (in liq) [2026] FCA 531

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to rules 1.31, 1.32 and 9.05 of the Federal Court Rules 2011 (Cth), the plaintiffs have leave nunc pro tunc to join the second to forty-sixth defendants listed in the schedule to the originating process as defendants to the proceedings.

2.    The proceedings be referred to the National Operations Registry for allocation to a docket judge.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

A    INTRODUCTION

1    An originating process has been filed before me, as duty judge, which is now well-familiar. It arises because r 9.02 of the Federal Court Rules 2011 (Cth) (FCR) has not been understood to permit a plaintiff to commence a single set of proceedings against multiple separate defendants where proceedings are brought by a liquidator for the recovery of money said to be owed to a company in liquidation. Usually, of course, those proceedings are brought, pursuant to s 588FF of the Corporations Act 2001 (Cth), for recovery of unfair preferences, but are not limited to that relief.

B    CONSIDERATION

2    There have been a series of cases in this Court which have held, or assumed, that it is necessary for leave to be granted under r 9.05 of the FCR to permit the joinder of persons to proceedings. To avoid any contention that the proceeding might be regarded as improperly constituted, liquidators have commonly sought such leave.

3    In Jahani v Alfabs Mining Equipment Pty Ltd [2020] FCA 752, Stewart J explained, referring to the decision of Jackson J in Dudley (Liquidator) v RHG Construction Fitout & Maintenance Pty Ltd [2019] FCA 1355, that the need for the application arose because, absent an order permitting joinder, it was possible that a single proceeding commenced against multiple defendants would later be held to be improperly constituted. His Honour said (at [11]–[12]):

The need for this application arises because, absent an order permitting joinder, it is possible that a single proceeding commenced against each of the proposed defendants would later be held to be improperly constituted. In Dudley (Liquidator) v RHG Construction Fitout & Maintenance Pty Ltd [2019] FCA 1355, the plaintiff liquidators commenced a proceeding for the recovery of alleged preferential payments against 17 defendants by way of a single originating process under r 2.2 of the Federal Court (Corporations) Rules 2000 (Cth). That proceeding was, as Jackson J said at [2]:

“ … proceedings of the kind that is sometimes called a ‘mother proceeding’ (Dean-Willcocks v Air Transit International Pty Ltd [2002] NSWSC 525, (2002) 55 NSWLR 64 at [14], Martin Bruce Jones as Liquidator of Forge Group Ltd (Receivers and Managers Appointed) (In Liquidation) v Sun Engineering Qld Pty Ltd [2017] WASC 195 at [62]) or a ‘mothership proceeding’ (Re Bias Boating Pty Ltd [2017] NSWSC 1524 at [18]). That is, they are unfair preference claims in respect of the same insolvent company (or group of companies) that have been commenced against multiple defendants in relation to separate payments made by the company to each defendant.”

The issue in that case was whether the commencement of that proceeding against all defendants in one cause was authorised without more, by the rules, and in particular, r 9.02. Jackson J concluded, at [26], that:

“…r 9.02 did not authorise the liquidators to commence a single set of proceedings in this Court against multiple defendants where the alleged preferential payments, and the agreements or arrangements with the company under which they were made, were unique to each separate defendant.”

4    In Dudley (at [13]), Jackson J referred to the fact that there did not appear to be any authority in this Court since the introduction of the FCR in 2011 which established whether a single set of proceedings making unfair preference claims against unrelated defendants is authorised by the rules of court.

5    His Honour also identified (at [14]) that the “key question” in the construction application of r 9.02 of the FCR is whether all rights to relief claimed in the proceedings: “arise out of the same transaction or event or series of transactions or events”.

6    Jackson J explained (at [17]) that:

The possible qualification is that the introduction of the current Federal Court Rules in 2011 resulted in a difference between the wording of r 9.02 and the wording of the comparable rules, such as the rule that was the subject of Dean-Willcocks. The difference is that r 9.02 refers to “the same transaction or event or series of transactions or events” (emphasis added). The reference to an “event” or “events” is new. The liquidators here contend that their rights to relief arise primarily out of the event of the winding up of the company, which is a necessary prerequisite for their claim against each of the defendants.

(Emphasis in original)

7    The reference to an “event” or “events” means the current rule is not in the same terms as Pt 8, r 2 of the Supreme Court Rules 1970 (NSW) (repealed), which were the subject of the decision of Austin J in Dean-Willcocks v Air Transit International Proprietary Limited [2002] NSWSC 525; (2002) 55 NSWLR 64. That decision, which was applied by Jackson J, referred to the fact that the then Supreme Court rule was equivalent to the rule of the High Court of Australia which was considered in Payne v Young [1980] HCA 54; (1979) 145 CLR 609.

8    In Dean-Willcocks (at [22]–[27]), Austin J set out his reasoning as to why multiple unfair preference claims against unrelated defendants could not be said to arise out of the same transaction or series of transactions. Those conclusions have informed the subsequent approach to this issue, including in this Court.

9    At the very least, it is unsatisfactory that costs continue to be expended in relation to making applications to a duty judge of this type which is said to be necessary by reason of what might fairly be described as a procedural vulgarity and where there may be some doubt the approach is mandated upon a proper construction of the current FCR.

10    The decisions which have led to this practice being adopted notably pre‑date the civil justice reforms introduced by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth), which introduced Pt VB into the Federal Court of Australia Act 1976 (Cth) (FCA Act).

11    As hardly needs remarking, that part includes s 37M, which provides that the overarching purpose of the “Civil Practice and Procedure Provisions” (including the FCR) is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. One of the objectives of the overarching purpose is the efficient use of judicial and administrative resources available for the purposes of the Court and the efficient disposal of the Court’s overall caseload.

12    Why this is relevant is that s 37M(3) requires that all Civil Practice and Procedure Provisions, including the FCR, “must be interpreted and applied” in a way that best promotes the overarching purpose.

13    Notably, as long as 45 years ago, Murphy J, who dissented in Payne, noted (at 623) that the relevant rule:

…is remedial, intended to overcome the difficulties in the old English rule and should be given a beneficial and not a restrictive interpretation. If it is to be read narrowly, it should be amended to encompass claims such as this. In this case, the rights to relief arise out of a series of transactions… If the plaintiffs brought separate proceedings, a common question of law would arise [and]… [T]he appellants are entitled to join in one proceeding.

14    Of course, having said this, it is necessary that I follow the decision of Jackson J in Dudley. This remains so even though it does not appear to have been argued before his Honour that, by reason of the 2009 reforms, the argument, which his Honour described as “arguable” (at [18]), might be regarded as the preferable construction given the approach to interpretation mandated by s 37M(3).

15    This is a somewhat unusual case of this type. It is not a case where there is an identifiable common issue spanning all claims, such as a potential contest over the date of solvency, which may arise where there are a number of defendants alleged to have received unfair preferences from a company. Rather, this case, as I understand it from oral submissions this morning, involves 46 claims which have a commonality in the sense that they comprise money (to use counsel’s expression) “flushed out” of the company to various recipients.

16    Allegations are made that thirty-six of these payments involved an underlying uncommercial transaction and statutory relief is sought, together with relief by way of a common money count for moneys had and received. In respect of the balance of the defendants, there is no allegation of an underlying uncommercial transaction, but relief is sought by way of moneys had and received. Accordingly, and without prejudging the issue, unlike most cases of this type, it may be less pellucid as to whether a single issue of law or fact can be identified which is common to the claims of all defendants.

17    But whether there is a common issue in the strict sense is not determinative to the resolution of this application.

18    The Court is now well familiar with the procedural flexibility of dealing with both common and individual claims in the same proceedings. That is a fundamental aspect of Pt IVA of the FCA Act and, obviously enough, has been a feature of representative proceedings in Chancery over a very long period. It strikes me as odd that the degree of flexibility that one sees in other aspects of the Court’s business cannot be applied in circumstances such as the present.

19    In this case, it is easy to imagine circumstances in which there would be a significant saving of the Court’s time for there to be one proceeding. For example, in the evidence-in-chief, the liquidator might read one affidavit disclosing the amounts alleged to have been paid to a large number of individuals, which could then be used in the claim against each. Further, it is easy to anticipate, depending upon how proceedings are managed, there might be significant savings in time and cost by having the one “mother proceeding” proceed, even if it is necessary to have separate trials of individual aspects of the case, as is very common when one is dealing with representative proceedings.

20    Although relief is sought under r 9.05 of the FCR, and I am prepared to make that order, I also propose to first expressly rely upon the Court’s powers, under r 1.31 of the FCR, to make any order in a proceeding to have regard to the nature and complexity of the proceeding, and secondly, r 1.32 of the FCR which allows the Court to make any order the Court considers appropriate in the interest of justice.

21    One of the factors which informs my discretion to make the order sought is that it is unlikely to occasion any prejudice to any of the proposed defendants. As I have noted, this matter came to me as duty judge, and it will, in due course, be docketed to a judge of the Court. That judge will be in a position to form his or her own views about the future progress of the proceedings. Nothing that I have done can impose upon or fetter the discretion of the docket judge in managing the proceeding in the way that that judge best considers will facilitate the overarching purpose. More specifically, nothing will prevent any individual defendant from seeking a separate trial of the claim made against them, nor will it prevent that party from making any other application they wish to make concerning the effect on them of my order, given that the order is made ex parte.

C    CONCLUSION

22    It seems to me that given that the position under the new rules has been resolved by Jackson J, in the way that it has, and given the careful nature of his Honour’s reasons, it is likely that that case will continue to be followed. This is despite the issue of interpretation to which I have referred which appears not to have been raised before his Honour. The issue, by its nature, is unlikely to be one which is the subject of Full Court authority.

23    It also appears that the current position just seems to occasion unnecessary cost. In my respectful view, it is the sort of issue which should be looked at by the Rules Committee of the Court, given the requirement that the rule-making power is to be conducted in a way that promotes the overarching purpose.

24    Accordingly, I order the plaintiffs have leave nunc pro tunc to join the second to forty-sixth defendants listed in the schedule to the originating process as defendants to the proceedings, and that the proceedings be referred to the National Operations Registry for allocation to a docket judge.

Associate:

Dated: 29 April 2026