Australian Resources [2002] NSWSC 135

Reported Decision : 41 ACSR 69

New South Wales Supreme Court

CITATION : Australian Resources [2002] NSWSC 135 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 1759/02 HEARING DATE(S) : 04/03/02 JUDGMENT DATE : 4 March 2002

Australian Resources Ltd (in liquidation) PARTIES : Ariminco Mining Pty Ltd (in liquidation) Martin John Green as liquidator - Plaintiff JUDGMENT OF : Barrett J

COUNSEL : Mr B.A. Coles QC/Mr P.J. Dowdy - Plaintiff SOLICITORS : Henry Davis York - Plaintiff CATCHWORDS : CORPORATIONS - extension of period for challenging allegedly voidable transactions - principles to be applied - risk of subsequent adverse order if liquidator uses extension to pursue persons already identified LEGISLATION CITED : Corporations Act 2001 (Cth) Brown v DML Resources No 2 (2001) 39 ACSR 219 CASES CITED : Green v Chiswell Furniture Pty Ltd [1999] NSWSC 608 Taylor v Woden Constructions Pty Ltd (unreported, FCA, 23 August 1998) DECISION : Extension granted

- 2 - IN THE SUPREME COURT REVISED OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

MONDAY, 4 MARCH 2002

1759/02 – MARTIN JOHN GREEN AS LIQUIDATOR OF AUSTRALIAN RESOURCES LTD (IN LIQUIDATION) and ARIMINCO MINING PTY LTD (IN LIQUIDATION) JUDGMENT

1 The plaintiff, as the liquidator of each of Australian Resources Limited and Ariminco Mining Pty Ltd, makes application under s.588FF(3)(b) of the Corporations Act 2001 (Cth) for extension until 14 March 2003 of the period within which applications under s.588FF(1) may be made in relation to any transaction of either company considered to be voidable under s.588FE. The period which applies in the absence of such an extension is a period of three years after the relation back day (see s.588FF(3)(a)). 2 In this case the relation back day is 14 March 1999 which is the day on which the plaintiff became the voluntary administrator of each company. He subsequently became the liquidator but in the meantime, that is to say on the day following the day on which he was appointed administrator, receivers were appointed, presumably by a secured creditor. Those receivers took control of the assets and business of the company and importantly, for present purposes, its books and records. 3 The receivership continued until December 2000 with the result that until that time the plaintiff did not have access to the books and records and was not, therefore, able to make the kind of assessment necessary to enable him to decide the question of seeking orders under s.588FF(1). When the books and records did become available, they were not, it appears, complete and in any event were contained in some 500 boxes which meant that there was a great effort required, on the part of the liquidator, in coming to grips with the position of each company. The liquidator's appreciation of matters was enhanced by examination of officers and others able to give information but that process was not completed until December 2001. 4 `1A further obstacle placed in the liquidator's way was that funds of some $3 million, which would otherwise have been available to him to pursue necessary investigations and enquiries, were tied up as a result of injunction proceedings and did not become available to the liquidator until towards the end of 2001. Now having the benefit of those funds, the liquidator has been able to seek some expert advice which he considers relevant to following up certain possibilities of the s.588FF action. 5 This account will be sufficient to show that whereas s.588FF(3) works on a general assumption that three years should be sufficient for a liquidator to make final decisions and come to final conclusions about attempts to attack transactions made voidable by s.588FE, the liquidator of these companies has laboured under disadvantages, resulting in his having had significantly less than three years in which to undertake that task. In practical terms, it is clear that he has had less than one full year of access to the funds and information needed and that, of itself, is a powerful consideration when it comes to granting this application. 6 Mr Coles has drawn my attention to the cases in which the relevant principles are discussed. The most commonly cited description of them appears to be that given by Austin J in Green v Chiswell Furniture Pty Ltd [1999] NSWSC 608 which in turn draws heavily on the decision of Finn J in Taylor v Woden Constructions Pty Ltd (unreported, FCA, 23 August 1998). The position is summarised by Austin J as follows: "Considerations relevant to the exercise of the Court's discretion under s.588FF(3) were stated by Finn J in Taylor v Woden Constructions Pty Ltd (Federal Court, 23/8/98, unreported). The following propositions, with which I respectfully agree, emerge from that case: