Resolution
69 The Liquidators accept that there has been significant delay, and that the extensions they seek are at the outer edges, if not beyond, the length of extensions that have previously been granted by this Court. It cannot be gainsaid that the Liquidators have been aware of a number of the claims they wish to continue to investigate, with a view to potential prosecution, for some time. But being aware of the existence of a potential claim is one thing; such claims had to be investigated, and their prospects assessed, before the Liquidators could responsibly commence proceedings. I also accept that the Liquidators have been faced with a momentous and complicated task, the magnitude and difficulty of which has only been compounded by the directors disappearing (and therefore offering no assistance in untangling the companies' complicated affairs). While aware of many potential claims, they have not been able to complete their investigations due to the need to respond to the vast range of matters and enquiries to which Mr Nipps deposed. The Liquidators have not been sitting on their hands, which is a significant point of distinction from the circumstances addressed by Ward J (as her Honour then was) in Re Clarecastle.
70 As the Liquidators are seeking an extension to put themselves in a position where they can properly decide whether or not to bring proceedings, it is not necessary to conduct a preliminary enquiry into the merits: see, eg, Green at [15] (Austin J); Chin, Re Agatha Trading Pty Ltd (in liq) [2020] FCA 991 at [35] (Markovic J); Langdon, Re Phoenix Institute of Australia Pty Ltd [2021] FCA 180 at [33] (Markovic J); Walker at [44] (Nicholas J). The question is whether the Liquidators should be granted an extension in which to pursue potential claims. The Liquidators have set out, in some detail, the potential claims they have identified, and have detailed the enquiries they consider they need to make, and the advice they will require, in order to finalise their views on whether or not particular claims should be pursued.
71 With the exception of some specific prejudice being experienced by Mr Landerer's firm, extending the time for the pursuit of voidable transactions will not occasion specific prejudice, although I accept that any extension necessarily occasions presumptive, or general, prejudice through the passage of time.
72 I am mindful that Parliament has set a limitation period of three years. That limit was set for the policy reasons I have referred to above. Nevertheless, Parliament also saw fit to provide for Liquidators to have the capacity to obtain a single extension from the Court. In my view, while mindful of purposes which limitations serve and the fact that the statutory regime anticipates that sometimes the best course is for loss to lie where it falls, the Court should not shy away from exercising the power to extend the period in appropriate cases. The default three year limit may well be sufficient in most liquidations, but these liquidations involve the affairs of multiple companies and have been beset by difficulties arising on numerous fronts. In my view, interests of justice do not lie in foreclosing the possibility of further investigations, and potential litigation of claims.
73 Ultimately, I must consider what is fair and just in all the circumstances. In my view, the time period for commencing voidable transaction proceedings should be extended for the potential claims that the Liquidators have identified. I include in this the potential claims against the Gong and the Landerer parties. While the Liquidators did pause their preparations in respect of the intended public examinations of Mr Landerer and Mr Gong, the need to prioritise work and the allocation of funding was a feature of the circumstances they faced; it was not tantamount to a decision to simply let the clock run down on a limitation period. Moreover, Mr Gong and Mr Landerer were both, as referred to above, involved in the affairs of the i-Prosperity group in ways that set them apart from the general body of persons dealing with a company that subsequently enters liquidation.
74 The potential claims involve a significant aggregate quantum. With the exception of some claims - which are of such a modest quantum that it would not make sense to pursue them independently of other claims against the same entities - most of the claims identified by the Liquidators are also each of significant quantum. Of course, it must be recognised that the claims are, at this stage, merely potential claims, but in my view the Liquidators ought to have time in which to pursue their investigations of those claims, to see if they have merit and ought to be pursued. Pursuit of substantial claims presents the only prospect of unsecured creditors receiving any dividend.
75 For these reasons, I consider that it is appropriate to grant the Liquidators extensions in respect of the claims identified in Annexure A and Annexure B to the originating application. I am not, however, satisfied that there should be a general "shelf order" for two reasons. First, the evidence of Mr Nipps shows that, over the last three years, the Liquidators have obtained an extensive knowledge of the affairs of the i-Prosperity group. While the Liquidators have been unable to pursue and finalise the investigation of numerous identified potential claims, they have identified a large number of potential claims. In my view, it is unlikely that the Liquidators have, in the course of all their work over the past three years, simply failed to notice a significant potential claim.
76 Secondly, with the exception of those who may face the claims specified in items 1 and 2 of Annexure A to the originating application (and potentially claims in relation to the Chatswood Central Shopping Centre claims specified in item 5 of Annexure B), other potentially affected persons have been notified of the Liquidators' application, which was made prior to the expiration of the original three year period. The objective of certainty in commercial affairs is more powerful in respect of this group of potential defendants; unlike Mr Gong, Mr Landerer and the other interested parties, they know nothing of any potential that claims may be advanced beyond the default three year time frame. Nor, in the absence of any compelling reason to think that significant claims have remained unidentified, are there any strong countervailing factors.
77 While counsel for the Liquidators noted that, if some presently unknown claim were uncovered, it cannot be pursued for the benefit of creditors of the companies if there is no shelf order, that is a function of the statutory regime; it is not, of itself, a factor that warrants extending the time limit when there is nothing to suggest that there is a real chance that material claims have, in all the work done to date, simply been overlooked.
78 The final question is how long the extensions should be. The present application was filed in June 2023. At that stage, the extension sought in respect of the claims in Annexure A was the later of 15 January 2025, or 18 months from the date of orders being made. In the case of the claims in Annexure B, it was the later of 15 July 2025 or the date that is 24 months from the date of orders being made. In submissions, counsel for the Liquidators accepted that the passage of time since the application was filed is relevant, but submitted that the Liquidators have been in a state of uncertainty since the Gong parties, and then the Landerer parties, indicated they wished to oppose the application. Counsel also noted that the hearing of the application has been significantly delayed by the inability of the Gong and the Landerer parties to comply with the court ordered timetables.
79 I accept that the time that has passed since the application was filed should not simply "come off the top" of the extensions sought. However, to allow 24 months (in the case of the Annexure B claims) would extend the period until late November 2025, which is an exceptionally long period. As a benchmark, doubling the statutory three year period would take the date to 15 July 2026 (or 17 September 2026 in the case of IPG Chats SPV). In my view, balancing the competing considerations, the appropriate course is to:
(a) limit the extension in respect of the claims in Annexure A to 15 March 2025, which allows for two end of year periods being encompassed in the period of the extension;
(b) limit the extension to the specific date sought by the Liquidators in respect of the Annexure B claims, being 15 July 2025, which is just short of 20 months from the date of my orders.
I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Button.