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Judgment - ex tempore 1By application filed on 25 June 2013, the plaintiff, Mr John Kukulovski, as liquidator of Waterfront Investments Group Pty Limited (in liq) ("Company") initially sought orders under section 588FF(3)(b) of the Corporations Act 2001 (Cth) that the period within which an application may be brought against certain persons under sections 588FB, 588FDA, 588FF and any other sections in respect of voidable transactions be 12 July 2014. The named persons in respect of whom that order is sought are (1) Eddy Investments (NSW) Pty Limited ("Eddy Investments"); (2) Mr Edward Ahmajani; (3) NJ Investments (Aust) Pty Limited ("NJ Investments"); (4) Mrs Nicole Jammal; (5) Platnum Corporation Pty Limited ("Platnum") and (6) Mr Samir Jammal. An order was also sought extending the time, for the same period, in respect of the same sections and any other sections in respect of voidable transactions against such other persons as may be identified by the liquidator in his investigations of the financial affairs of the Company. 2By the time the liquidator filed written submissions in the proceedings, he had indicated that the extension sought would be reduced to 6 months. By the time of the hearing before me, agreement had been reached between the liquidator and six entities against whom the extension of time to bring proceedings was sought that an order could be made, by consent, extending the time for the commencement of the relevant proceedings to 23 December 2013; a period of little less than three months. Plainly, so far as the grant of orders under s 588FF of the Corporations Act involves an exercise of the Court's discretion, and so far as the order sought also extends to unnamed third parties, it is necessary for the Court to be satisfied that the order is properly made, although the consent of the six parties directly affected by it is a matter to be taken into account in forming that view. 3I should briefly refer to the relevant provisions of the Corporations Act which are the subject of this application. Section 588FB of the Corporations Act deals with the circumstances in which a transaction of a company in winding up is an uncommercial transaction (as defined) which involves consideration, on the one hand, of the benefits to the company of entering into the transaction and, on the other hand, the detriments to the company of entering into the transaction and benefits to other parties to the transaction of entering into it and any other relevant matter. Section 588FDA deals with the making of orders in respect of unreasonable director-related transactions of a company, as defined. Section 588FF(1) provides for the Court to make orders, on the application of a company's liquidator, if it is satisfied that a transaction of the company is voidable because of section 588FE, which in turn permits the making of orders in respect of voidable transactions, including, relevantly, uncommercial transactions and unreasonable director-related transactions of the company. Section 588FF(3)(a) in turn provides that an application for the Court to make such an order under section 588FF(1) may only be made during the period beginning on the relation-back day and ending three years after the relation-back day, or 12 months after the first appointment of a liquidator in relation to the winding of the company, whichever is the later. The first of those specified periods is relevant in the present case. Such an order may also be made, relevantly, within such longer period as the Court orders on an application under section 588FF(3)(b) made by the liquidator during, relevantly, the three-year period specified in section 588FF(3)(a). In the present case, the application was made, as I noted above, on 25 June 2013, which is within the three-year period after the relation-back day, where the liquidator was appointed on 13 July 2010. 4The application is supported by two affidavits of the liquidator dated 19 June 2013 and 1 October 2013 respectively. The liquidator's evidence is that he was appointed by resolution of the Company's creditors passed at a meeting on 13 July 2010 under section 497 of the Corporations Act, which deals with a meeting of creditors after the company has passed a resolution for its voluntary winding up. His evidence is that the Company's principal asset was a mixed use property development, comprising residential units and commercial property, at The Entrance, New South Wales. He identifies two transactions which may potentially be the subject of proceedings, for which the extension of time is now sought, namely a purchase by NJ Investments of Unit 11 in that property for a stated purchase price of $900,000, and a purchase by Eddy Investments of the commercial premises in that property for a stated purchase price of $2.9 million. He notes that the sole director of NJ Investments is Mrs Nicole Jammal, the wife of the Company's former director, Mr Samir Jammal, and the sole director of Eddy Investments is Mr Edward Ahmajani, who is Mr Samir Jammal's nephew. He notes that the settlement instructions in respect of the purchase of that commercial property provided for a payment to, another entity, Platnum of an amount in the order of $130,647 at settlement, and the sole director of that company is also Mrs Nicole Jammal. 5The liquidator's affidavit sets out the steps taken in the conduct of the voluntary liquidation since his appointment on 13 July 2010 and, specifically, steps taken to seek to obtain copies of Company's books and records since that date including its financial records. His evidence is that he has received only minimal books and records of the Company, in the course of public examinations in April 2013, and has not obtained the company's financial records or books of prime entry such as cash books. It appears that the liquidator has now obtained further complete copies of contracts in respect of the relevant transactions, since the date on which his first affidavit was sworn. He also refers to his efforts to obtain funding to carry out detailed investigations into the Company's financial affairs, including reaching an agreement in respect of examinations and the costs of this application with a funding creditor, pursuant to approval given by the Company's creditors generally. 6The liquidator notes that public examinations were conducted, initially on 11 April 2013, but only Mr Samir Jammal was examined on that first date and the examination of two other examinees, Mrs Nicole Jammal and Mr Edward Ahmajani, were adjourned for medical reasons to 10 May 2013 and ultimately took place on 17 July 2013. It will be noted that the date of those examinations was after the three-year period specified in section 588FF of the Corporations Act so that, if it is accepted that the information which might be available on those examinations is relevant, as it might well be, to the liquidator's decision whether to commence proceedings and his ability to fund them, then some extension of the time in which the proceedings would be commenced would be likely to be necessary. 7The liquidator also draws attention to certain matters which have come to his attention, again apparently in the course of this year, in respect of aspects of the relevant transactions. It appears that, so far as Unit 11 was sold to NJ Investments, the contract price of $900,000 was contracted to be paid in an amount of $400,759.52 by "BBX dollars", a form of barter currency and, as I have noted above, an amount of $130,647 of the purchase price payable at the settlement was paid to Platnum. The liquidator notes that he has not sighted any books or records to explain why that payment was made, or whether it was paid, on settlement. 8It also appears to be common ground between the parties that the amount of $400,759.52 payable by "BBX dollars" was not in fact paid, although the Company transferred title to the unit to NJ Investments without having received that payment. That position is made clear because NJ Investments has commenced proceedings against the Company which seek declarations that, inter alia, a payment of $500,000 was made on its behalf in respect of the purchase of unit 11 and that its only remaining obligation owed (I interpolate, some three years after the purchase took place) in respect of that contract is to pay or deliver the amount of $400,760 in BBX dollars. 9The liquidator in turn gives evidence of matters in respect of the transfer of the commercial premises to Eddy Investments, for a stated purchase price of $2.9 million, which involved a cash component of $1.6 million and a BBX dollars component of $1.3 million. He notes that a purported payment recorded in the Company's BBX dollars account of $1.5 million on 18 March 2010 was apparently reversed by a debit of $1.5 million on 11 June 2010. He also refers to evidence given by Mr Samir Jammal, in his public examination, that the commercial premises are currently occupied by companies controlled by Mr Jammal and his wife who operate restaurants from those premises. He also refers to certain aspects of the settlement instructions given in respect of that sale, including that the Company itself appears to have received no funds from the sale, and that there is a notation on the settlement instructions for the balance of funds to be paid to the purchaser, Eddy Investments. 10As I noted above, the application for an extension of time to 23 December 2013 is now consented to, so far as the named defendants are concerned. By his updating affidavit dated 1 October 2013, the liquidator notes that it is no longer necessary to resume public examinations in the period of that extension, because the examinations of Ms Jammal and Mr Ahmajani took place on 17 July 2013, but that he seeks the extension of time to complete analysis of documents and obtain legal advice and give further consideration to the merits of the proceedings; that he intends to complete analysis of evidence relating to the source and application of funds relating to the sale of the relevant premises; and that he will also explore the availability of funding to pursue actions in relation to the relevant transaction. He expresses the view that he anticipates those tasks would take some six months to complete; I infer, because of the consent position now reached between the liquidator and the named defendants, that he has formed the view that those tasks may be completed more quickly, within the period of a little less than three months that is now sought by way of extension. 11The relevant principles applicable to an order for extension of time under section 588FF(3)(b) of the Corporations Act are well established, and are identified in the submissions filed by Mr Sulan who appears for the liquidator in this application. In BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322 at 356-358; (2003) 46 ACSR 677, the Court of Appeal identified the question namely whether it is "fair and just in all of the circumstances" to grant the relevant extension, having regard to, on the one hand, the liquidator's explanation for delay and, on the other, the prejudice the defendant would suffer as a result of the extension. In New Cap Reinsurance Corp v Reaseguros Alianza SA [2004] NSWSC 787 at [52]; (2004) 186 FLR 175, White J observed that the matters raised in such an application would ordinarily include any explanation for the delay in bringing the proceedings; a preliminary review of the merits of the foreshadowed proceedings, directed to whether they were so devoid of prospects that it would be unfair, by granting an extension, to expose the other party to the continuing prospect of suit; and whether the likely or actual prejudice resulting from the grant of the extension was sufficient substantially to outweigh the case for granting an extension. His Honour also noted that, where the liquidator's purpose in seeking the extension of time was to further investigate to determine whether or not to bring proceedings, a preliminary enquiry into the merits of any consequent proceedings may not always be necessary. That factor is not relevant in the present case, where the liquidator's investigations appear to be well advanced and the nature of the possible proceedings is tolerably clear. 12His Honour's reference to those factors was approved by Barrett J in Arnautovic v Nichola [2009] NSWSC 233 and the relevant factors were summarised, in similar terms, by Ward J in Re Clarecastle Pty Ltd (in liq) [2011] NSWSC 857; (2011) 85 ACSR 260 at [22]. These factors were further approved by Nicholas J in Walker v CBA Corporate Services (New South Wales) Pty Ltd [2012] FCA 328; (2012) 88 ACSR 153 and by Foster J in Bowcher (liquidator); Re Meares Nominees Pty Ltd (in liq) [2013] FCA 631. 13Turning to the application to these factors in the present case, Mr Sulan draws attention to the evidence to which I have referred above as to the liquidator's explanation for the delay in commencing proceedings. In the present circumstances, the liquidator provides limited explanation of what was done in the early period of the liquidation, but the Court should recognise that liquidators, particularly of companies with limited funds, will inevitably face challenges in balancing, on the one hand, the need for investigation and, on the other hand, their ability to fund that investigation and that those challenges will be exacerbated where, as in the present case, the liquidators face difficulty in obtaining access to a company's financial and other records. The liquidator's evidence is more expansive as to the latter period, where he makes clear that there has been, and continues to be, difficulty in obtaining access to the Company's books and records, which, if they exist, would likely be in the possession of its former director, who is one of the proposed defendants to the proceedings or persons associated with him. The liquidator also points to the adjournment, without fault on his part, of the public examinations of Ms Jammal and Mr Ahmajani, so that they did not take place until after the three year period specified in s 588FF(3)(a) had elapsed in any event. It seems to me that these matters are sufficient to provide an explanation for the liquidator's delay, particularly in circumstances where, as I will note below, there is no suggestion that any real prejudice would be suffered by the potential defendants by the grant of the short extension which is sought. 14The second relevant factor identified in the case law is at least a preliminary review of the merits of the relevant proceedings. That review, in the present case, should be conducted relatively briefly, where the application is not opposed, and in circumstances that the proposed proceedings may well be heard in this Division. It is sufficient to note that a number of the features of the relevant transactions, including the use of BBX trade dollars as a form of payment in respect of the purchase of unit 11; the long delay in provision of that payment, so that it is still outstanding some three years after title to the relevant property had been delivered; and the payment on settlement directed, not to the Company, but to Platnum, all raise the possibility that the transaction was either "uncommercial" for the purposes of s 588FB of the Corporations Act. It is also arguable that the transaction was an unreasonable director-related transaction for the purpose of s 588FDA of the Corporations Act, subject to the question, which was not explored in submissions before me, whether it can be established that the relevant companies are close associates of a director for the purposes of that section. 15So far as the transfer of the commercial premises to Eddy Investments is concerned, the substantial proportion of the consideration that was payable in BBX trade dollars, the apparent reversal of the payment in BBX trade dollars some period after it occurred, a further direction indicating a payment to Platnum, and the provision for the surplus to be paid to Eddy Investments as purchaser, all raise the possibility that a claim may be available under s 588FB or s 588FDA of the Corporations Act. To put it in another way, it seems to me that there is no basis to suggest that, in respect of either of the transactions, the prospects of the potential proceedings are so poor that it would be unfair to expose the potential defendants to them to the continuing prospect of suit, within the language of White J in New Cap Reinsurance Corp above at [52]. 16The final question which arises is one of prejudice. Mr Sulan points out that, and there seems to me to be substantial force in the proposition that, the question of prejudice is of lesser relevance where, at least so far as the named defendants are concerned, they consent to an order granting an extension of the period of some three months that is now sought. To the extent that that question does arise, it seems to me that the element of prejudice in this matter would be outweighed by the factors supporting the grant of an extension. There is, obviously, in any application for an extension, at least a degree of prejudice, so far as proceedings may be brought later, or in the present case may be brought in circumstances where they otherwise could not be brought within time; in Agricultural and Rural Finance Pty Ltd v Kirk [2011] NSWCA 67; (2011) 82 ACSR 390, Tobias JA referred to a concept of "presumptive prejudice" arising from delay but also noted that it was a matter which should be given limited weight in balancing the various factors to which the court should have regard. 17In the present case, as in Bowcher (liquidator); Re Meares Nominees Pty Ltd (in liq), the parties involved appear, to put it broadly, to be related parties who are likely to have some knowledge of the circumstances in which the transaction took place; there is no suggestion that evidence which would have been available to them has been lost or destroyed, still less that their position in respect of available evidence will be worsened by the short extension of time that is sought; the difference between proceedings commenced prior to 13 July 2013 and proceedings commenced by late December 2013 is not substantial; and the possibility that proceedings may be brought at all, so that the liquidator has the opportunity to vindicate the Company's rights and the defendants have the opportunity to defend those proceedings, should not be treated as a relevant form of prejudice. For all these reasons, and particularly in circumstances where the extension sought is now not opposed by the named potential defendants, I do not consider that prejudice has been established such that the extension sought should not be granted. 18I am conscious that an application is also made for an order, in a more general form, extending the time for such proceedings to allow them to be brought against such other persons as may be identified by the liquidator in his investigations of the financial affairs of the Company. Mr Sulan points out, with considerable plausibility, that the persons against whom such action might be brought, who might be identified in circumstances such as this, are also most likely to be related parties, given the nature of the relevant transactions. The Court's power to grant such an extension, extending to persons who have not been specifically identified and named, is well-established on the authorities. The extension of time sought in the present case is short, and it seems to me that the factors to which I have referred above also support an extension of time in respect of such other persons. 19The liquidator seeks an order that the costs of his originating process be costs in the winding up of the Company. It seems to me that that order is properly made, since this application was a necessary application in the conduct of the winding up of the Company. 20For these reasons, I will make orders in accordance with the consent orders which were signed by the legal representatives of the parties and are initialled by me and placed in the file. I note that these orders contemplate that any proceedings might be commenced by 23 December 2013. The Court has listed associated proceedings brought by NJ Investments for directions on 3 February 2013. I will make a further order granting leave to the liquidator, if it commences proceedings in respect of the matters subject to this application, to have those proceedings listed for directions on the same date.