FEDERAL COURT OF AUSTRALIA Priest as liquidator of S J Buller Pty Ltd (in liq) v Algeri as liquidator of ACN 004 348 207 Pty Ltd (in liq), in the matter of ACN 004 348 207 Pty Ltd (in liq) [2014] FCA 773 Citation: Priest as liquidator of S J Buller Pty Ltd (in liq) v Algeri as liquidator of ACN 004 348 207 Pty Ltd (in liq), in the matter of ACN 004 348 207 Pty Ltd (in liq) [2014] FCA 773 Parties: STEVEN PRIEST AS LIQUIDATOR OF S J BULLER PTY LTD (IN LIQUIDATION) (ABN 96 141 399 957) v SALVATORE ALGERI AS LIQUIDATOR OF ACN 004 348 207 PTY LTD (IN LIQUIDATION) ACN 004 348 207 File number(s): NSD 752 of 2014 Judge(s): FARRELL J Date of judgment: 24 July 2014 Catchwords: CORPORATIONS – external administration – liquidation – application under reg 5.6.54 of the Corporations Regulations 2001 (Cth) – extension of time to appeal against rejection of proof of debt – related entities – application made within limitation period – reason for extension Legislation: Corporations Act 2001 (Cth) Corporations Regulations 2001 (Cth) Cases cited: Derwinto Pty Ltd v Lewis (2002) 42 ACSR 645 Date of hearing: 24 July 2014 Date of last submissions: 24 July 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 8 Counsel for the Plaintiff: Mr MJ Dawson Solicitor for the Plaintiff: Tresscox Lawyers Counsel for the Defendant: Mr T Cavanagh Solicitor for the Defendant: HWL Ebsworth Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 752 of 2014 IN THE MATTER OF ACN 004 348 207 PTY LTD (IN LIQUIDATION) BETWEEN: STEVEN PRIEST AS LIQUIDATOR OF S J BULLER PTY LTD (IN LIQUIDATION) ABN 96 141 399 957 Plaintiff AND: SALVATORE ALGERI AS LIQUIDATOR OF ACN 004 348 207 PTY LTD (IN LIQUIDATION) Defendant JUDGE: FARRELL J DATE OF ORDER: 24 July 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The time within which the plaintiff may file an appeal under the Corporations Regulations 2001 (Cth) reg 5.6.54(2) from the defendant's notification of rejection of the plaintiff's proof of debt dated 10 July 2014 be extended to 29 August 2014. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 752 of 2014 IN THE MATTER OF ACN 004 348 207 PTY LTD (IN LIQUIDATION) BETWEEN: STEVEN PRIEST AS LIQUIDATOR OF S J BULLER PTY LTD (IN LIQUIDATION) (ABN 96 141 399 957) Plaintiff AND: SALVATORE ALGERI AS LIQUIDATOR OF ACN 004 348 207 PTY LTD (IN LIQUIDATION) Defendant JUDGE: FARRELL J DATE: 24 July 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application made under reg 5.6.54(3) of the Corporations Regulations 2001 (Cth) (Corporations Regulations) for an extension of time in which to appeal the rejection by the defendant of the plaintiff's proof of debt lodged on 16 January 2014. The notification of the rejection of the plaintiff's proof of debt is dated 10 July 2014. The plaintiff seeks an extension of the period in which to lodge an appeal until 29 August 2014. I granted leave to the plaintiff to proceed against the defendant, who is the liquidator of a company associated with the plaintiff. 2 An affidavit of Mr Steven Priest (Mr Priest) sworn on 23 July 2014 was read in support of the application. A representative of the defendant attended the hearing of the application to indicate that the defendant did not oppose the order being made. consideration 3 Mr Priest was appointed as liquidator of the plaintiff (SJB) on 22 October 2013 under a creditors' voluntary winding up. The defendant (Mr Algeri) is the liquidator of ACN 004 348 207 Pty Ltd, formerly known as RL Buller & Son Pty Ltd (RLBS), and was appointed on 26 July 2013 under a creditors' voluntary winding up. SJB conducted business as a purchaser of grapes which it supplied to RLBS pursuant to an agreement entitled "Processing Agreement" dated 9 January 2010. 4 Mr Priest's investigation into the affairs of SJB suggested that RLBS had invoiced SJB for wine management and storage, which Mr Priest considered that RLBS was not entitled to do under the Processing Agreement. On 16 January 2014 Mr Priest caused SJB to lodge a proof of debt in the liquidation of RLBS for $531,244, being the amount of the invoice and some other repayment adjustments. 5 On 30 May 2014, Mr Algeri rejected the proof of debt. He subsequently withdrew the rejection but issued a further letter dated 10 July 2014 rejecting the proof of debt for a second time. This letter allowed a period of 14 days in which an appeal could be brought and noted that Mr Algeri did not have power to extend the period for SJB to appeal the rejection. 6 Mr Priest says he needs to obtain advice regarding Mr Algeri's assertion that the invoices the subject of SJB's proof of debt were sham paper transactions. Mr Priest says he will need to access RLBS's books and records in order to conclusively determine whether there is merit in filing an appeal. 7 Having regard to the principles set out by Austin J in Derwinto Pty Ltd v Lewis (2002) 42 ACSR 645 at [46]-[48], I consider the extension to be in the interests of justice. I note in particular that: The debt is the only asset of significance in the liquidation of SJB; The application has been made in a timely manner within the period specified by the 10 July 2014 letter for appealing Mr Algeri's decision; The extension sought is a brief one (28 days); The extension will allow Mr Priest the opportunity to investigate the merits of an appeal rather than a notice of appeal being lodged hastily and without due regard to its prospects of success; There is no relevant prejudice to RLBS if the extension is granted; and The defendant does not oppose the orders being made. conclusion 8 For these reasons, I consider it appropriate to make the orders sought by SJB. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell. Associate: Dated: 25 July 2014