Federal Court of Australia

Sozou (Liquidator), in the matter of Comm TC Pty Ltd (in liq) [2026] FCA 532

ORDERS

THE COURT ORDERS THAT:

1.    With respect to the first and second plaintiffs (Comm TC Pty Ltd (In Liquidation) and its liquidators), pursuant to s 588FF(3)(b) of the Corporations Act 2001 (Cth):

(a)    the time for the making of an application under s 588FF(1) of the Act in respect of the potential identified claims identified at paragraphs [53] to [64] and [67] to [69] of the affidavit of Katherine Sozou sworn 10 December 2025 be extended to 1 March 2027; and

(b)    the time for the making of an application under s 588FF(1) of the Act (other than an application identified in Order 1(a) above) be extended to 29 April 2028.

2.    With respect to the third and fourth plaintiffs (Zenith Workforce. NSW Pty Ltd (In Liquidation) and its liquidators), pursuant to s 588FF(3)(b) of the Act:

(a)    the time for the making of an application under s 588FF(1) of the Act in respect of the potential identified claims identified at paragraphs [74] to [76] of the affidavit of Katherine Sozou sworn 10 December 2025 be extended to 1 March 2027; and

(b)    the time for the making of an application under section 588FF(1) of the Act (other than an application identified in Order 2(a) above) be extended to 29 April 2028.

3.    Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that it is necessary to prevent prejudice to the proper administration of justice, and until the conclusion of the winding up of the plaintiff companies, the confidential affidavit of Katherine Sozou sworn 10 December 2025 and Confidential Exhibit KS-2 to that affidavit are not to be published, disclosed or accessed except pursuant to an order of the Court.

4.    The costs of these proceedings are to be the costs in the winding up of the plaintiff companies.

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

REASONS FOR JUDGMENT

CHEESEMAN J:

INTRODUCTION

1    These reasons concern an application for relief under s 588FF(3)(b) of the Corporations Act 2001 (Cth) to extend the time for making applications under s 588FF(1) of the Act in respect of voidable transactions.

2    The plaintiffs are Comm TC Pty Ltd (in liquidation) and Zenith Workforce. NSW Pty Ltd (in liquidation) (together, the Companies) and their respective Liquidators, Katherine Sozou, Anthony Norman Connelly, and William James Harris. The Companies comprise part of a substantial group of labour hire companies within the construction industry.

3    Although a number of interested persons previously indicated that they might oppose the application, by 10 April 2026 that opposition had fallen away. The application fell to be determined without opposition.

4    The Liquidators have previously obtained similar relief in respect of other companies to which they were appointed in the broader corporate group: Sozou (liquidator) v Touchline Pty Ltd, in the matter of Touchline Pty Ltd [2025] FCA 1516 (Markovic J). In Touchline, the extension granted was until 1 March 2027 in relation to identified claims and 29 April 2028 in relation to unidentified claims. Extension periods to the same effect are sought here. The evidence relied upon by the Liquidators in this application is the same or substantially similar to that relied upon in Touchline.

5    The plaintiffs also seek a confidentiality order under s 37AF of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) in respect of the confidential affidavit of Ms Sozou, sworn 10 December 2025 and Confidential Exhibit KS-2 to that affidavit on the basis that such an order is necessary to prevent prejudice to the proper administration of justice: s 37AG(1)(a).

6    I am satisfied that it is appropriate to grant relief substantially in the form the plaintiffs seek. My reasons are as follows.

EVIDENCE

7    The plaintiffs rely on the following evidence in support of the application:

(1)    the affidavit of Ms Sozou, Partner at McGrathNicol, sworn 10 December 2025 and Exhibit KS-1 to that affidavit;

(2)    the confidential affidavit of Ms Sozou, sworn 10 December 2025 and Confidential Exhibit KS-2 to that affidavit;

(3)    the four affidavits of Talysha Sabatino, Process Server instructed by Sharmans Investigations and Process Serving, sworn 21 December 2025 and the annexures to those affidavits;

(4)    the three affidavits of Ms Sabatino, sworn 2 February 2026 and the annexures to those affidavits;

(5)    the affidavit of Laura Jane Johns, Partner at Norton Rose Fulbright, sworn 4 February 2026 and Exhibit LJ-1 to that affidavit; and

(6)    the affidavit of Elizabeth Melkonian, Associate at Norton Rose Fulbright, affirmed 10 April 2026 and Exhibit EM-1 to that affidavit.

8    The confidential affidavit of Ms Sozou is relied on to further substantiate the plaintiffs’ contention that the liquidations are inherently complex, that in the time available since the Liquidators’ appointments there has been inadequate time to conduct sufficiently comprehensive investigations, and that a material prejudice will arise if the relief is not granted. The confidential evidence is also relied on to further explain why a not insubstantial period of time is sought in respect of the extension order under s 588FF(3)(b) of the Act.

BACKGROUND

9    Daniel Frisken was appointed liquidator of each of the Companies before the present Liquidators, who replaced him on 8 May 2025 pursuant to creditors’ resolutions. The evidence indicates that the administrations of the Companies were impeded by inadequate books and records, limited cooperation, and funding constraints. Since their appointment, the Liquidators have undertaken substantial investigative work and identified potential voidable transaction claims. They say that further time is required to complete investigations and determine whether additional claims should be brought. They seek an extension to 1 March 2027 in respect of the claims identified to date and 29 April 2028 in respect of any further claims that may emerge from their investigations.

APPLICABLE PRINCIPLES

10    Section 588FF(1) of the Act provides for the making of orders, on the application of a liquidator, in respect of voidable transactions, and s 588FF(3)(b) permits the Court to extend the period within which such an application may be brought.

11    An application under s 588FF(3)(b) must be made within the period prescribed by s 588FF(3)(a). If that occurs, the Court may make the extension order after the expiry of that period: Brereton, in the matter of ICT Century Pty Ltd (in liq) [2025] FCA 107 at [3(a)] (Owens J), referring to McGrath v National Indemnity Company [2004] NSWSC 391; 182 FLR 309 at [18] (Barrett J). It does not matter that the actual order granting the relief is made outside of the designated period: Onefone Australia Pty Ltd v Onetel Ltd [2007] NSWSC 268; 61 ACSR 429 at [36] (Barrett J).

12    Section 588FF(3)(b) confers a discretion of a broad kind to mitigate, in an appropriate case, the rigour of the statutory time limit: Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2015] HCA 10; 254 CLR 489 at [24] (French CJ, Hayne, Kiefel, Gageler and Keane JJ); see also Mansfield, in the matter of NR Complex Pty Ltd (in liq) (receiver and manager appointed) [2025] FCA 1349 at [8] (Jackman J).

13    The authorities recognise that the exercise of that discretion engages, at least in part, a balance between the commercial certainty to which persons dealing with the company are entitled and the interests of creditors in the pursuit of voidable transaction claims: Fortress Credit at [8], [24]; NR Complex at [8].

14    The liquidator bears the onus of showing that it is just and fair that the statutory time limit not apply in the circumstances of the case: Re Octaviar Ltd (recs and mgrs appted) (in liq) [2012] NSWSC 1460; 271 FLR 413 at [64] (Black J); New Cap Reinsurance Corp v Reaseguros Alianza SA [2004] NSWSC 787; 186 FLR 175 at [55] (White J).

15    Relevant considerations include the length of the delay, the explanation for that delay, a preliminary view of the merits of the proposed proceedings, and prejudice arising from the grant of an extension: New Cap at [54]-[55]; Walker and Moloney v CBA Corporate Services (NSW) Pty Ltd [2012] FCA 328; 88 ACSR 153 at [43]-[44] (Nicholas J).

16    Where the purpose of the extension is to permit investigation as to whether proceedings should be commenced, the merits of the proposed proceedings may carry less weight than in a case where fully formulated claims are already sought to be advanced: New Cap at [52]; Walker at [44].

17    The Court may also take into account whether the liquidator has acted with reasonable diligence in pursuing the administration and in making use of available procedures to avoid unnecessary delay: Re Octaviar at [64].

18    To the extent specific matters are relevant to the exercise of the discretion under s 588FF(3)(b) of the Act in the present circumstances, I address them below.

CONSIDERATION

19    The first matter that arises is to confirm that the present application was brought within time.

20    I am satisfied that the present application was brought within the period prescribed by s 588FF(3)(a) of the Act. Under s 491, a company may be wound up voluntarily by special resolution. Where that occurs, and none of the antecedent administration or deed circumstances in s 513B applies, the winding up is taken to have begun on the day on which the resolution was passed. Section 91 then provides that, in any other case, the relation-back day is the day on which the winding up is taken, because of Div 1A of Pt 5.6, to have begun.

21    In the present case, the evidence is that the sole member of Comm TC resolved on 15 December 2022 that it be wound up and that Mr Frisken be appointed liquidator, and the sole member of Zenith resolved on 19 January 2023 that it be wound up and that Mr Frisken be appointed liquidator. On that basis, and consistently with Ms Sozou’s evidence, the relation-back day for Comm TC was 15 December 2022 and the relation-back day for Zenith was 19 January 2023. The last day within which an application under s 588FF(1) could be made under s 588FF(3)(a)(i) was therefore 15 December 2025 in the case of Comm TC and 19 January 2026 in the case of Zenith.

22    The originating process commencing this proceeding was lodged on 10 December 2025 and accepted for filing on 11 December 2025. The application was thus brought before 15 December 2025 and 19 January 2026 respectively, and was therefore brought within time.

23    Having found that the application was brought within time, I turn to whether the plaintiffs have discharged their onus of establishing that orders should be made extending the period within which applications under s 588FF(1) of the Act may be brought.

24    It is convenient to consider first the length of the delay and the explanation for it, then the merits of the proposed proceedings, and finally the prejudice arising from the grant of an extension.

Delay and explanation

25    Since their appointment on 8 May 2025, the Liquidators have undertaken substantial work in a relatively short period, including gathering and reviewing the Companies’ books and records, conducting forensic analysis of transactions, identifying potential claims and recovery avenues, engaging legal advisers, and preparing for public examinations. That work has occurred against the background that the former liquidator, Mr Frisken, had encountered significant impediments in progressing the administrations, including inadequate books and records, limited cooperation from those involved in the Companies’ affairs, the need for substantial further investigations before viable claims could responsibly be advanced, and funding constraints.

26    In those circumstances, I accept that the Liquidators have provided an adequate explanation for the delay in seeking relief under s 588FF(3) of the Act. I am satisfied on the evidence that the delay was not the product of inactivity or a failure to progress the administrations with reasonable diligence, but was substantially occasioned by the state of the Companies’ records, the lack of cooperation available to the external administrators, and uncertainty as to funding. Those are matters which are recognised as capable of providing a reasonable and satisfactory explanation for delay of the present kind: New Cap at [70]; McCann v Mawson Restructures and Workouts, in the matter of Walton Construction (Qld) Pty Ltd (In Liq) [2016] FCA 1152 at [47] (Edelman J); Re Clarecastle Pty Ltd (in liq) [2011] NSWSC 857; 255 FLR 435 at [137] (Ward J); see also NR Complex at [9]-[10].

27    I also take into account that delay is of less significance where, as here, it is unlikely to occasion meaningful prejudice to those against whom claims may later be brought: BP Australia Ltd v Brown [2003] NSWCA 216; 58 NSWLR 322 at [188]-[189] (Spigelman CJ, Mason P and Handley JA agreeing at [215], [216]).

Merits of the proposed proceedings

28    The Liquidators seek the extension not only to preserve their ability to complete investigations already underway, but also, if warranted, to bring a number of identified voidable transaction claims and any further claims that may emerge from those investigations. Ms Sozou’s evidence is that the period since the Liquidators’ appointment has not been sufficient to complete the public examinations, gather further records, obtain merits advice and undertake the other work necessary to decide, on a properly informed basis, whether proceedings should be commenced.

29    The identified claims are not advanced at a high level of abstraction. In relation to Comm TC, the evidence identifies a proposed uncommercial transaction claim arising from a labour hire arrangement with Commercial TC Pty Ltd, under which Comm TC is said to have received materially less than the amounts contractually due for labour supplied, with a potential shortfall presently estimated to be up to $4 million, albeit subject to further investigation as to quantum and proper defendants. The evidence also identifies specific transactions recorded in Comm TC’s bank statements said to be outside the ordinary course of its business, including payments to Almira Kocic, Arthur Mitsoulis and Lusyn Mitsoulis, Senad Kocic, Rachid Zerouk, Michael Saad, and Empryl Pty Ltd, in respect of which the Liquidators presently contend that potential claims may arise under s 588FB or otherwise by way of relief under s 588FF. In relation to Zenith, the evidence identifies further transactions said to be outside the ordinary scope of its business, including payments to Andrew Saad, Nedzad Kocic, Nicolas Saad, Empryl, and Tridium Enterprises, said likewise to be capable of giving rise to uncommercial transaction claims or other claims for relief under s 588FF.

30    The labour hire claim in particular is not advanced in isolation. In Touchline, Markovic J accepted that a materially similar labour hire arrangement involving Commercial TC, Comm TC and Grow Surge Pty Ltd gave rise to a proposed claim with sufficient apparent substance to warrant further investigation, and held that such a claim could not be regarded as so devoid of prospects that it would be pointless to allow the liquidators to pursue it further. Her Honour also treated as sufficiently substantive the identified claims concerning payments for no apparent consideration and claims characterised as potential uncommercial transactions. While that decision does not determine the merits of any claim now foreshadowed on behalf of Comm TC or Zenith, it does support the conclusion that the identified causes of action are not merely speculative and have sufficient apparent substance to justify the continuation of investigations directed to whether proceedings should be commenced.

31    In relation to claims not yet identified with precision, no detailed review of merits is presently required. Where the extension is sought to permit further investigation so that an informed decision may later be made whether proceedings should be brought, the Court is not required at this stage to undertake a substantive assessment of the merits of presently unparticularised claims: Re Australian Resources Ltd (in liq) [2002] NSWSC 135; 41 ACSR 69 at [6] (Barrett J), quoting Green v Chiswell Furniture Pty Ltd (In Liq) [1999] NSWSC 608 at [15] (Austin J).

32    The position is different in relation to the claims already identified by the Liquidators. The evidence discloses a number of potential voidable transaction claims against identified entities, including a proposed uncommercial transaction claim arising from a labour hire arrangement said to have resulted in underpayments to Comm TC. That proposed claim is not advanced in isolation. Comm TC was a party to the labour hire arrangement considered in Touchline, where features of that arrangement were treated as relevant to a potential uncommercial transaction claim concerning another company in liquidation. While that does not resolve the merits of any claim presently foreshadowed, it supports the conclusion that the identified claim has sufficient apparent substance to justify further investigation: see Touchline at [16]-[20].

33    Without expressing a concluded view as to the ultimate merits of those claims, I am not satisfied that the identified claims are so lacking in apparent substance that it would be unfair to permit the Liquidators further time to investigate and, if advised, to commence proceedings. Rather, the present material supports the conclusion that the identified claims have sufficient apparent substance to justify the continuation of investigations directed to whether they should be brought. In that respect, this is not a case in which the proposed claims may fairly be characterised as so devoid of prospects that an extension would serve no legitimate purpose: Re Australian Resources Ltd at [6], quoting Green at [15].

Prejudice arising from the grant of an extension

34    The Liquidators submit that, unless an extension is granted, they will be unable to complete their investigations, conduct the proposed public examinations, and determine whether the potential identified claims, and any further claims that may emerge, should be brought for the benefit of creditors. That prejudice is real. The Companies have minimal assets available for distribution, and the identified claims are said to involve potentially significant recoveries. If time is not extended, the consequence may be that claims otherwise capable of being pursued under Pt 5.7B of the Act are lost before the investigations necessary to determine whether they should be commenced can be completed.

35    Against that, there is the ordinary prejudice which attends delay in the form of continuing exposure to possible suit. I accept that such prejudice is relevant. However, in the present case it is not shown to be substantial. No party ultimately maintained opposition to the application.

36    The Liquidators have endeavoured to give notice of the proceedings to as many of the potential defendants as possible. So much is made clear from Ms Sabatino’s affidavits which prove service on CBS Developments Pty Ltd, Commercial TC, Empryl, Tridium Enterprises, Arthur Mitsoulis, Lusyn Mitsoulis, and Michael Saad.

37    Further, Ms Johns deposes to the steps taken to serve each of the persons and entities identified on the Originating Process. This includes unsuccessful attempts to serve Almira Kocic, Nedzad Kocic, Senad Kocic, Andrew Saad (each of whom were later confirmed to be represented by McEvoy Legal), as well as Nicholas Saad and Rachid Zerouk. Ms Melkonian also deposes to attempted service on Nicholas Saad and Rachid Zerouk.

38    I am satisfied that all reasonable steps have been taken to notify those persons of the present application.

39    The Australian Securities and Investments Commission was also served and confirmed receipt of the relevant materials.

40    The absence of any maintained opposition does not itself determine the question of prejudice, but it is a relevant circumstance. In the present case, there is no evidence of any specific forensic prejudice of a kind which would make it unfair to permit the Liquidators further time. Nor is this a case in which the extension sought is unsupported by any account of the work remaining to be done. Ms Sozou has identified the further steps said to be necessary if time is extended and has given evidence of the estimated period required to complete those steps.

41    In those circumstances, I am satisfied that the prejudice to the Liquidators and creditors if the extensions are refused materially outweighs the presumptive prejudice to those who may later be exposed to suit if the extensions are granted. The likely or actual prejudice occasioned by an extension is not sufficiently substantial to outweigh the case for relief: New Cap at [52], [55]; NR Complex at [20].

42    Finally, I bear in mind that the evaluative nature of the discretion means that limited assistance is to be derived from the length of extensions granted in other cases: NR Complex at [21]. What is fair and just depends upon the circumstances of the particular administration, the work still required, the nature of the claims sought to be preserved, and the prejudice on each side. Here, for the reasons given above, I am satisfied that the balance favours the grant of relief substantially in the form sought.

Conclusion

43    I am therefore satisfied that, in all the circumstances, it is fair and just to extend the time for the making of applications under s 588FF(1) of the Act.

Confidentiality

44    The confidential affidavit of Ms Sozou contains commercially sensitive material concerning the Liquidators’ investigations and potential recoveries. I accept that wider disclosure of that material would create a real risk of prejudice to the conduct of those investigations and to the prospects of recovery. In those circumstances, and having regard to the public interest in the due and beneficial administration of insolvent companies for the benefit of creditors, I am satisfied that a confidentiality order is appropriate: Clark v Digital Wallet Pty Ltd [2020] FCA 877 at [21] (Abraham J); Krejci, in the matter of Union Standard International Group Pty Limited [2023] FCA 1054 at [31] (Cheeseman J).

CONCLUSION

45    For these reasons, I am satisfied that the plaintiffs have established that orders should be made under s 588FF(3)(b) of the Act, substantially in the form sought. I am also satisfied that orders should be made under s 37AF of the FCA Act. I will make orders accordingly.

Associate:

Dated:    1 May 2026

SCHEDULE OF PARTIES