Arnautovic v Nichola [2009] NSWSC 831

New South Wales Supreme Court

CITATION : Arnautovic v Nichola [2009] NSWSC 831

HEARING DATE(S) : 16/06/09

JUDGMENT DATE : 20 August 2009

JURISDICTION : Equity Division

JUDGMENT OF : Macready AsJ at 1

DECISION : Paragraph 40

CATCHWORDS : Corporations Law. Application for extension of time under s 588FF(3)(b) of the Corporations Act. Extension granted. No matter of principle.

PARTIES : SULE ARNAUTOVIC AND RODERICK MACKAY AS JOINT LIQUIDATORS OF AUSTRALIAN COAL TECHNOLOGY PTY LTD (IN LIQUIDATION) AND AUSTRALIAN COAL TECHOLOGY PTY LTD (IN LIQUIDATION) v NICK NICHOLA & ORS, MULTOTEC PTY LTD AND METSO MINERALS (AUSTRALIAN) LIMITED AND DAVID BROWN

FILE NUMBER(S) : SC 1636/2009

COUNSEL : Mr J Baird for plaintiffs Mr DR Stack for 3rd defendant

SOLICITORS : Sparke Helmore for plaintiffs Deacons for 3rd defendant

- 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

Associate Justice Macready

Thursday 20 August 2009

1636/2009 SULE ARNAUTOVIC AND RODERICK MACKAY AS JOINT LIQUIDATORS OF AUSTRALIAN COAL TECHNOLOGY PTY LTD (IN LIQUIDATION) AND AUSTRALIAN COAL TECHOLOGY PTY LTD (IN LIQUIDATION) v NICK NICHOLA & ORS, MULTOTEC PTY LTD AND METSO MINERALS (AUSTRALIAN) LIMITED AND DAVID BROWN JUDGMENT 1 This is the hearing of an application by the plaintiffs who are the liquidators of Australian Coal Technology Pty Limited (in liquidation) ("ACT"). They were previously the administrators of the company. The originating process was filed 20 February 2009 and there has been an amended originating process filed 12 June 2009 which seeks an order pursuant to section 588FF(3)(b) of the Corporations Act 2001 (Cth) that the period within which applications under section 588FF(1) of the Act may be made against any of the defendants be extended up to and including 3 September 2009. However, at the conclusion of the hearing the application was amended to extend the time for an order against the third defendant up to and including 16 November 2009. 2 In the originating process there were proceedings against other defendants. The proceedings against the first defendants have been discontinued and the proceedings against the second and fourth defendants were dealt with by Barrett J in Arnautovic & Anor as joint liquidators of Australian Coal Technology Pty Ltd v Nichola & Ors trading as Middletons Lawyers [2009] NSWSC 233. In those proceedings, which were not opposed, his Honour extended the time up until 3 September 2009. Background 3 The first plaintiffs were appointed as joint voluntary administrators of ACT pursuant to Section 436A of the Act on 3 March 2006. On 26 May 2006, at an adjourned meeting of creditors of ACT, the first plaintiffs were appointed as joint liquidators of ACT. 4 The relation-back day for the winding up of ACT was 3 March 2006 which meant that the last day for filing any application under Section 588FF(1) was accordingly 3 March 2009 (per s 588FF(3)). As I have mentioned the application was filed on 20 February 2009 within that time. 5 The liquidators' formal letter of demand in respect of the preference claim which they were considering against the third defendant, Metso Minerals (Australia) Limited ("Metso Minerals") was also given by letter of 20 February 2009 and an email of 23 February 2009. 6 In Sutherland & Anor as joint liquidators of Australian Coal Technology v Hanson Construction Materials Pty Ltd [2009] NSWSC 232, Barrett J determined a separate question as to the solvency of the second plaintiff during the relevant periods. The hearing of the application was on 3 March 2009, barely two weeks after notification of the preference claim by the liquidator. In that case, his Honour held that ACT was insolvent at all times during the period commencing 30 November 2005 ending on 3 March 2006. Subject to certain exceptions, that finding is binding on Metso Minerals if the liquidators institute proceedings for a preference claim. 7 ACT was incorporated on 6 April 1994. ACT was principally engaged in the business of engineering design, construction and testing of coal preparation plants. In the year prior to the appointment of the administrators it had undertaken three significant projects. One of the projects which I will refer to later was a contract on 21 January 2005 with Newlands Coal Pty Ltd as agent for Mount Isa Mines Limited to supply and install a coal preparation plant at the Newlands coal mine near Mackay in Queensland. The contract was for a large sum in excess of $77 million. Considerations of application under section 588FF(3)