FEDERAL COURT OF AUSTRALIA Oboru Pacific Engineering Services Pty Ltd v Gateway Partners Pty Ltd (in liquidation) [2014] FCA 1383 Citation: Oboru Pacific Engineering Services Pty Ltd v Gateway Partners Pty Ltd (in liquidation) [2014] FCA 1383 Parties: OBORU PACIFIC ENGINEERING SERVICES PTY LTD ACN 065 255 156, JOHN O'BRIEN and JACINTA FLATTERY-O'BRIEN v GATEWAY PARTNERS PTY LTD ACN 109 847 314 (IN LIQUIDATION), ABRAHAM GREENGARTEN and GIL ABRAS File number(s): NSD 1132 of 2014 Judge(s): YATES J Date of judgment: 3 December 2014 Catchwords: PRACTICE AND PROCEDURE – application under s 500(2) of the Corporations Act 2001 (Cth) for leave to commence proceedings against the first respondent Legislation: Corporations Act 2001 (Cth) ss 439A, 500, 556, 562 Date of hearing: Heard on the papers Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 7 Counsel for the Applicants: Mr CP O'Neil Solicitor for the Applicants: Hicksons Solicitor for the Respondent: Moray & Agnew (with Ms O'Keefe appearing) IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1132 of 2014 BETWEEN: OBORU PACIFIC ENGINEERING SERVICES PTY LTD ACN 065 255 156 First Applicant JOHN O'BRIEN Second Applicant JACINTA FLATTERY-O'BRIEN Third Applicant AND: GATEWAY PARTNERS PTY LTD ACN 109 847 314 (IN LIQUIDATION) First Respondent ABRAHAM GREENGARTEN Second Respondent GIL ABRAS Third Respondent JUDGE: YATES J DATE OF ORDER: 3 DECEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Leave be granted to the applicants under s 500(2) of the Corporations Act 2001 (Cth) to commence proceedings against the first respondent. 2. Save for the operation of s 562(1), any judgment or order obtained in the proceeding against Gateway Partners Pty Ltd (in liquidation) shall not be enforced by the applicants without the leave of the Court. 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 1132 of 2014 BETWEEN: OBORU PACIFIC ENGINEERING SERVICES PTY LTD ACN 065 255 156 First Applicant JOHN O'BRIEN Second Applicant JACINTA FLATTERY-O'BRIEN Third Applicant AND: GATEWAY PARTNERS PTY LTD ACN 109 847 314 (IN LIQUIDATION) First Respondent ABRAHAM GREENGARTEN Second Respondent GIL ABRAS Third Respondent JUDGE: YATES J DATE: 17 DECEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application under s 500(2) of the Corporations Act 2001 (Cth) (the Act) for leave to commence and proceed with proceedings against the first respondent, Gateway Partners Pty Ltd (in liquidation) (Gateway). Gateway was placed into liquidation by resolution of its creditors at a meeting convened under s 439A of the Act. 2 In the principal proceeding, the applicants claim damages against Gateway for, amongst other things, breach of contract, negligence and contraventions of consumer legislation with respect to the provision of accounting services in late 2008 and early 2009. The applicants also claim damages against a director of Gateway (the second respondent) and an employee of Gateway (the third respondent). 3 It is common ground that Gateway has the benefit of a professional indemnity policy underwritten by QBE Insurance (Australia) Limited that responds to the applicants' statement of claim. If an amount is received by Gateway under that policy in respect of the pleaded claims then, subject to the deduction of expenses, that amount must be paid by its liquidator to the applicants to the extent necessary to discharge its liability, in priority to all other payments under s 556 of the Act: s 562(1). 4 One firm of solicitors has been retained by the insurer to act for all three respondents. There is no positive opposition to leave being granted. 5 I have been assisted by written submissions, which have been placed on the Court file. 6 In my view, this is an appropriate case in which to grant the leave sought. I have no reason to doubt the genuineness of the applicants' claim against Gateway. Given the requirement of s 562(1) of the Act, the granting of leave should not interfere with the orderly winding up of the company, assuming liability against Gateway to be established. Certainly, no potential matter having that effect has been brought to my attention by the respondents' solicitors. 7 However, to guard against the possibility that the insurance might not be sufficient to discharge any liability against Gateway that may be found, I will order that, save for the operation of s 562(1), any judgment or order obtained in the proceeding against Gateway shall not be enforced by the applicants without the leave of the Court. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates. Associate: Dated: 17 December 2014