In the matter of Kevin Jacobsen Pty Limited (in liquidation) [2016] NSWSC 538

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Kevin Jacobsen Pty Limited (in liquidation) [2016] NSWSC 538 Hearing dates: 5 April 2016 Decision date: 29 April 2016 Jurisdiction: Equity - Corporations List Before: Black J Decision: Stand over application to allow liquidators an opportunity to lead further evidence of any inquiries as to proposed assignee's capacity to fund proceedings. Catchwords: CORPORATIONS — Winding up — Liquidators — Deed of assignment — Application for approval of deed of assignment under s 477(2B) of the Corporations Act 2001 (Cth) – where liquidators by way of deed assigned certain causes of action of company on basis that assignee would pay a percentage of recoveries upon successful litigation to the company – where there were no other alternatives available to liquidators that offered prospects of return to creditors – whether the Court should approve entry into deed – whether the Court should assess assignability of causes of action before granting approval – whether the Court should refuse approval given insufficiency of evidence as to assignee's ability to prosecute proceedings to completion – whether assignment will result in vexatious and improper litigation – whether liquidators should have assessed merits of relevant claims prior to entry into deed in circumstances of unfunded liquidation – whether the Court should give approval nunc pro tunc where liquidators failed to obtain approval prior to entry into deed – whether leave should be granted under s 477(2B) of the Corporations Act 2001 (Cth). Legislation Cited: - Australian Securities and Investments Commission Act 2001 (Cth), ss 12GF, 12GM - Corporations Act 2001 (Cth), ss 477, 506, 545, 588FB, 1041I, 1322 - Trade Practices Act 1974 (Cth), ss 82, 87 Cases Cited: - Anderson v McPherson (No 2) [2012] WASC 19 - Aquatic Air Pty Ltd v Siewert [2015] NSWSC 928 Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110 - Australia and New Zealand Banking Group Ltd v Dzienciol (by his guardian ad litem Dzienciol) [2001] WASC 305 - Chamberlain v RG & H Investments Pty Ltd (No 2) [2009] FCA 1531; (2009) 76 ACSR 415 - Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher [2011] FCAFC 89; (2011) 85 ACSR 38 - Gerard Cassegrain & Co Pty Ltd [2013] NSWSC 257 - Hutchison v Hillcrest Litigation Services Ltd [2010] NSWSC 934 - Jones, Saker, Weaver and Stewart (liquidators), Re; Great Southern Ltd (in liq) (recs and mgrs apptd) [2012] FCA 807 - Leigh; Re AP & PJ King Pty Ltd (in liq) [2006] NSWSC 315 - Owners of Strata Plan 5290 v CGS & Co Pty Ltd [2011] NSWCA 168 - Pascoe; Re Matrix Group Ltd (in liq) [2011] FCA 1117 - Re 7 Steel Distribution Pty Ltd (in liq) (recs and mgrs apptd) [2013] NSWSC 669 - Re ACN 076 673 875 Ltd [2002] NSWSC 578; (2002) 42 ACSR 296 - Re Addstone Pty Ltd (in liq) (1998) 83 FCR 583; 16 ACLC 1320 - Re Colorado Products Pty Ltd (in prov liq) [2013] NSWSC 1613 - Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 - Re FAI Film Distribution Pty Ltd [2014] NSWSC 1904 - Re Gerard Cassegrain & Co Pty Ltd (in liq) [2014] NSWSC 1292 - Re Harris Scarfe Ltd (in liq) [2007] SASC 209 - Re HIH Insurance Ltd [2004] NSWSC 5 - Re McGrath (in their capacity as liquidators of HIH Insurance Ltd) [2010] NSWSC 404; (2010) 78 ACSR 405 - Re SCW Pty Ltd [2013] NSWSC 578 - Re Spedley Securities Ltd (in liq) (1992) 9 ACSR 83 - Trendtex Trading Corporation v Credit Suisse (1982) AC 679 - Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 Category: Principal judgment Parties: John Sheahan & Ian Russell Lock as Joint and Several Liquidators of Kevin Jacobsen Pty Limited (in liquidation) (First Plaintiff) Kevin Jacobsen Pty Limited (in liquidation) (Second Plaintiff) Representation: Counsel: K.L. Andronos SC/A Kaufmann (Liquidators) R Scruby/P Sharp (Creditors – Time of My Life Pty Ltd and Zoulos Pty Ltd)