Fortress Credit Corporation (Australia) II Pty Ltd v Fletcher

The reasoning of the primary judge 14It is unnecessary to deal with the reasoning of the primary judge in any detail. Although a number of factual matters were argued, there was no dispute as to his conclusions on those issues and the matters the subject of the appeal do not depend on those findings. 15The trial judge rejected the submission that the power conferred by s 588FF(3)(b) of the Act was directed only to an application for specific orders identifying transactions involving identified parties and did not contemplate a shelf order. In reaching that conclusion he considered he was bound by the decision of this Court in BP v Brown. This finding was the subject of the first ground of appeal. 16The primary judge also took the view that if he discharged the orders which he had previously made, he had power to re-exercise the discretion, albeit the re-exercise would take place outside the three year period prescribed by s 588FF(3)(a) of the Act. Once again, he held that he was bound to reach this conclusion by what was said in BP v Brown. This finding was the subject of the second ground of appeal. 17In the event, his Honour did not exercise his discretion to set aside or vary the orders but rather added the applicants as defendants to the liquidators' process and dismissed the interlocutory process filed by the applicants. This was the subject of the third and fourth grounds of appeal primarily on the basis that there was no power to join Fortress when the time limit in s 588FF(3)(a) of the Act had expired.

The grounds of appeal 18The draft grounds of appeal were in the following terms: "1. The trial judge erred in finding, at J[19], that the Court had power or jurisdiction under section 588FF(3)(b) of the Corporations Act 2001 (Cth) (the Act) to make an order in terms of paragraph 2 of the orders made on 19 September 2011 by her Honour Justice Ward in the proceedings below (the shelf order), and should have found that it did not have power or jurisdiction under section 588FF(3)(b) of the Act to make an order in terms of the shelf order, because, upon their proper construction, ss 588FF(1) and (3)(b) of the Act do not permit the making of a general order for an extension of time to make an application under s 588FF(1) against any creditor, but rather require that an application be made with respect to a particular person and a particular transaction, or a particular class of persons and particular categories of transactions. 2. The trial judge erred in finding, at J[61], that the Court has power, on discharging the shelf order, to re-exercise the discretion under section 588FF(3)(b) of the Corporations Act 2001 (Cth) in respect of the respondents' Originating Application filed on 10 May 2011 in the proceeding below and the respondents' Originating Application filed on 19 September 2001 in the proceeding below, as they each relate to the third respondent, and should have found that it had no such power, because, upon the discharge of a shelf order purportedly made pursuant to ss 588FF(1) and (3)(b) of the Act, the Court has no power to re-exercise the discretion under s 588FF(3)(b) of the Act, in the event that the period prescribed by s 588FF(3)(a) has expired, and should have made an order dismissing the respondents' Interlocutory Process filed on 8 June 2012 in the proceeding below. 3. The Court erred in finding, at J[82], that the shelf order should not be varied or set aside in accordance with the relief claimed in paragraph 2 of the appellants' Further Amended Interlocutory Process filed on 23 July 2012 in the proceeding below, and should have made an order, pursuant to rule 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW), or alternatively pursuant to rule 36.15(1) of the Uniform Civil Procedure Rules, that the shelf order be varied so as to exclude any application to the appellations (or either of them) or alternatively set aside in so far as it applies to the appellants (or either of them). 4. The trial judge erred, at J[83], in granting the respondents' application to join the appellants as defendants to the proceeding below, and should have determined that the application for joinder was made out of time, such that the application should have been dismissed, because, upon the discharge of a shelf order purportedly made pursuant to ss 588FF(1) and (3)(b) of the Act, the Court has no power to join a non-party to a further application for relief pursuant to ss 588FF(1) and (3)(b) of the Act, in the event that the period prescribed by s 588FF(3)(a) has expired."

The relevant legislation 19Section 588FF of the Act provides as follows: "588FF Courts may make orders about voidable transactions (1) Where, on the application of a company's liquidator, a court is satisfied that a transaction of the company is voidable because of section 588FE, the court may make one or more of the following orders: (a) an order directing a person to pay to the company an amount equal to some or all of the money that the company has paid under the transaction; (b) an order directing a person to transfer to the company property that the company has transferred under the transaction; (c) an order requiring a person to pay to the company an amount that, in the court's opinion, fairly represents some or all of the benefits that the person has received because of the transaction; (d) an order requiring a person to transfer to the company property that, in the court's opinion, fairly represents the application of either or both of the following: (i) money that the company has paid under the transaction; (ii) proceeds of property that the company has transferred under the transaction; (e) an order releasing or discharging, wholly or partly, a debt incurred, or a security or guarantee given, by the company under or in connection with the transaction; (f) if the transaction is an unfair loan and such a debt, security or guarantee has been assigned-an order directing a person to indemnify the company in respect of some or all of its liability to the assignee; (g) an order providing for the extent to which, and the terms on which, a debt that arose under, or was released or discharged to any extent by or under, the transaction may be proved in a winding up of the company; (h) an order declaring an agreement constituting, forming part of, or relating to, the transaction, or specified provisions of such an agreement, to have been void at and after the time when the agreement was made, or at and after a specified later time; (i) an order varying such an agreement as specified in the order and, if the Court thinks fit, declaring the agreement to have had effect, as so varied, at and after the time when the agreement was made, or at and after a specified later time; (j) an order declaring such an agreement, or specified provisions of such an agreement, to be unenforceable. (2) Nothing in subsection (1) limits the generality of anything else in it. (3) An application under subsection (1) may only be made: (a) during the period beginning on the relationback day and ending: (i) 3 years after the relationback day; or (ii) 12 months after the first appointment of a liquidator in relation to the winding up of the company; whichever is the later; or (b) within such longer period as the Court orders on an application under this paragraph made by the liquidator during the paragraph (a) period. (4) If the transaction is a voidable transaction solely because it is an unreasonable directorrelated transaction, the court may make orders under subsection (1) only for the purpose of recovering for the benefit of the creditors of the company the difference between: (a) the total value of the benefits provided by the company under the transaction; and (b) the value (if any) that it may be expected that a reasonable person in the company's circumstances would have provided having regard to the matters referred to in paragraph 588FDA(1)(c)." 20Section 588FF is contained in Pt 5.7B of the Act, which was substantially introduced into the Act's predecessor by the Corporate Law Reform Act 1992 (Cth), following the recommendations made by the Australian Law Reform Commission in Report No 45 General Insolvency Inquiry (the Harmer Report). The Harmer Report made the following remarks: "629. The policy of a retrospective law. Insolvency law has long adopted the policy of avoiding transactions by which an insolvent individual or company disposed of property within a relevant period prior to the actual commencement of the formal insolvency in circumstances that are unfair to the general body of unsecured creditors. This area of insolvency law is, consequently, retrospective in nature. Transactions by which property has been disposed of before the formal insolvency administration commenced may be reviewed. If the circumstances under which the transaction occurred and the effect of the transaction offend the policy of the law the transaction may be avoided (hence, the terminology 'avoidance of antecedent transactions'). Because it operates in such a retrospective fashion it is necessary to balance the interests of the unsecured creditors of the insolvent and persons who have engaged in fair transactions with the insolvent. ... 688. Actions by a liquidator to recover the proceeds of a void execution, a preference, a transaction at an undervalue or a transaction with intent to defeat should be commenced within a reasonable time. The Commission proposed in DP 32 (para 454) that a liquidator should have three years to commence such an action, although the court might extend that time. Under the existing law the time period would be six years (for example, Bankruptcy Act s 127). Many submissions to the Commission complained about the sometimes inordinate delay in commencing proceedings in respect of voidable transactions. In addition, there have been recent judicial observations critical of the general delays associated with the winding up of insolvent companies. It is therefore considered desirable to place liquidators under a more rigorous but, nonetheless, reasonable time limitation for taking action under these provisions. The Commission recommends accordingly." [Footnotes omitted]. 21The Explanatory Memorandum to the Corporate Law Reform Act contained the following comments: "The Harmer Report noted in particular that this area of insolvency law is ... retrospective in nature. Because it operates in a retrospective fashion, it is necessary to balance the interests of unsecured creditors of the insolvent and persons who have engaged in fair transactions with the insolvent." 22It should be noted that s 588FF(3)(a)(ii) was inserted into the Act in 2007. It effectively extended the limitation period when the company was under administration, immediately prior to an order being made for its winding-up (see ss 513A and 513C of the Act). The expression of the time limit in s 588FF(3)(a) was changed at the same time from "during the three year period" to its present form. 23It should also be noted that different time limits apply to applications to set aside the various types of transactions referred to in s 588FE of the Act. For example, the time limits vary from a period of six months from the relation back period in respect of an insolvent transaction to 10 years in respect of an insolvent transaction entered into for the purpose of defeating, delaying or interfering with the rights of creditors.

BP v Brown 24BP v Brown involved an appeal from a series of judgments given by Austin J concerning two companies, DML Resources Pty Ltd (in liq) and DML Resources (WA) Pty Ltd (in liq). The orders sought in the originating process were in the following terms: "Pursuant to s588FF(3)(b) of the Corporations Law the period prescribed by s588FF(3)(b) of the Corporations Law within which any application in respect of any voidable transaction of DML Resources Pty Ltd (in liquidation) ACN 053 771 494 under s588FF be extended to 24 October 2001." 25Austin J originally made that order ex parte but directed that five specified creditors be served, including BP Australia Holdings Ltd (BP). BP then successfully moved that the orders be set aside because it had been denied procedural fairness. His Honour subsequently held that it would be necessary to join BP to the proceedings before the final hearing of any application to extend the time for bringing proceedings to challenge voidable preference transactions involving BP, but it was too late to do so. Ultimately the liquidators sought to join BP as a party and to rely on s 1322(4)(d) of the Act to cure the irregularities in the initial application. Austin J held that s 1322(4)(d) of the Act was available to cure the defects and granted the extension sought. 26On appeal Spigelman CJ, with whom the other members of the Court agreed, concluded that s 1322 of the Act was not available to extend the time limitations in s 588FF(3). It is not suggested that he was in error in reaching that conclusion. 27In the course of his judgment Spigelman CJ described the policy underlying the time limits in s 588FF(3) of the Act in the following terms: "[115] A creditor or other person who has received the benefit of a voidable transaction is at risk of having to surrender it. The time limit in s588FF(3) has the effect that at the end of the period of three years, such a person will know whether s/he remains at risk. In a legislative scheme which seeks to balance conflicting commercial interests of this character, that appears to me to be a perfectly reasonable requirement. Those who have an interest, or who represent those who have an interest, to disturb transactions must indicate, within three years, whether they wish to keep open the option of doing so. In this, as in other areas, legal policy favours certainty. ... [118] Section 588FF(3) does not have the effect of requiring all applications to be brought within a short period of time. It does, however, have the effect of requiring those who wish to keep open the option to do so, to determine that they do wish to do so within the three year period and to seek a determinate extension of the period. One thing that must be decided within the three year period is how long the process of deciding whether to pursue voidable transactions will take. Eventually, investigations to overcome deficiencies of information or the pursuit of funding must cease. Parliament has identified a reasonable time for such matters to occur, subject to a single determinate extension of time." 28These passages were approved by the High Court in Gordon v Tolcher and Another [2006] HCA 62; (2006) 231 CLR 334 (Gordon v Tolcher) at [39]. 29Spigelman CJ, at [118] of his judgment, referred to a single determinative application. It is not entirely clear whether his Honour meant that only one application could be made under s 588FF(3)(b) of the Act in respect of a particular winding-up or was emphasising that any application had to be brought within the three year period. In JP Morgan Chase Bank, National Association and Another v Fletcher (as liquidators of Octaviar Ltd) (recs and mgrs apptd) (in liq) and Others; Grant Samuel Corporate Finance Pty Ltd v Fletcher (as liquidators of Octaviar Ltd) (recs and mgrs apptd) (in liq) and Others [2014] NSWCA 31; (2014) 306 ALR 224 (JP Morgan v Fletcher) at [84] Beazley P, with whom Macfarlan and Gleeson JJA agreed on this point, stated that the absolutism of the statement that there can only be a single determinative application may be debatable (cf Scott (as liq of Casualife Furniture International Pty Ltd (in liq)(rec and mgr apptd) and as liq of Kencord Manufacturing Pty Ltd (in liq)) v Casualife Furniture International Ltd and Others [2005] VSC 463; (2005) 56 ACSR 218 (Scott v Casualife Furniture International)). 30As I indicated, in BP v Brown the original application was made ex parte in circumstances where it was known that BP may have been one of the parties affected by the order. Spigelman CJ held that in those circumstances the primary judge was correct in concluding that the ex parte orders he made should be set aside. He concluded: "[134] The obligation to comply with procedural fairness imports a higher level of content when imposed on a court than in decision-making processes conducted by administrators or tribunals. It requires, in my opinion, that a person likely to be adversely affected by the order of the court is given an opportunity of making submissions to the court before any such order is made or if, exceptionally, an order is made without such an opportunity being given that, upon application, the person must be put in the same position as he or she would have been prior to the order being made. It is the inherent difficulty of achieving the latter that makes an ex parte order a course to be followed only in the case of necessity or other strong reason. [135] The creation of a situation in which a person must apply to vacate or vary an order after the order has been made is an exceptional situation. Nothing on the facts of the present case, as at the time of the first judgment, was such as to justify the exceptional course." 31Spigelman CJ however stated that Austin J was incorrect in concluding that joinder of BP to the proceedings was futile as a three year limitation period had elapsed prior to the application for joinder. He pointed at [150] to the fact that there was nothing in the section to suggest that the time limit in s 588FF(3)(b) of the Act is a limit which applies to a particular person. He stated at [155] that he would reserve for another day the determination of what recourse a creditor who became targeted only after the application had been granted would have to approach the Court to challenge the extension as far as it affected that creditor. That is the situation which has arisen in the present case. 32In that context Spigelman CJ emphasised the power the Court has to control its proceedings. He made the following comments: "[157] The courts have many alternative means of controlling the abuse of their procedures through the filing of "shelf" applications. First, courts throughout Australia are now actively engaged in case management. Applications to a court for an extension of a time period, such as the determination of a "longer period" under s588FF(3)(b), are not permitted, as a rule, to be treated as inactive until the applicant for relief wishes to activate the application. If, contrary to the case management practice of most courts, delay in making such an application occurs, that would be a matter of considerable significance for the exercise of the discretion to grant the relief under s588FF(3)(b). It would also play a part in the exercise of the discretion to make orders under s588FF(1)." 33I have referred to the orders sought in the originating process in BP v Brown at par [24] above. Spigelman CJ held that an application seeking such orders was an application which could be made under s 588FF(3)(b) of the Act and that the Court had power to make such an order. His Honour (at [168]) agreed with the analysis of Austin J on this issue. He stated: "[168] In any event, I am of the view that Austin J was correct in the conclusion to which he came that an application under s588FF(3)(b) seeking a general order for an extension of time to make an application under s588FF(1) against any creditor, is a valid application and an order in those terms is a valid order. I agree with his Honour's analysis in the second judgment as follows: '[33] In my opinion the applicants' submission places an unduly restrictive interpretation on s 588FF(3). The statutory language does not literally require the construction that they advance. It is true that subsection (1) speaks of a particular application concerning a single transaction, and the opening words of subsection (3) refer to the specific application identified by subsection (1). But subsection (3) refers to the application under subsection (1) only in order to say that such an application must be made within the period of time that subsection (3) sets. Subsection (3) does not say, as it might readily have said if the applicants' contention were correct, that the application under subsection (1) may only be made within a longer period than three years if the Court allows that application to be brought later. Instead, it sets the time limit for making an application under subsection (1) as three years after the relation-back day, or such longer period as the Court orders on an application under subsection (3) - that is a different application whose purpose is only to extend the time period. Consistently with the wording of subsection (3), the application to extend the time limit can be an application to extend the time limit within which a particular subsection (1) application can be made, or a broader application that applies to the particular subsection (1) application under consideration and to other applications as well. I see no reason why the other applications cannot be described by category rather than in specific terms, provided that the description is clear. [34] The construction for which the applicants contended would, in my opinion unnecessarily hamper the work of liquidators for no good reason. I accept the applicants' submission that a purpose of the statutory reform that produced s 588FF was to prevent liquidators from relegating the recovery of voidable preferences to the end of their work programs. The investigation of voidable transactions should generally be conducted concurrently with their other liquidation work. Nevertheless, there will be some cases where, notwithstanding the most diligent of efforts, the liquidator is so far short of completing his or her investigations towards the end of the time limit that it is impossible to identify particular transactions in respect of which orders for extension of time could be made'." [Emphasis in the original]. 34In reaching that conclusion Spigelman CJ said that the requirement of commercial certainty had to be balanced against the conflicting interests of creditors of the company. He stated that the Court, through the discretions it exercised under ss 588FF(3) and 588FF(1) of the Act, could control unwarranted delay by liquidators. He stated at [171]-[172] that the purpose or object of orderly liquidation was best served by recognising that diligent liquidators may not be able to identify a full list of targets for applications under s 588FF(1) within the three year period in s 588FF(3). 35His Honour concluded finally that there was nothing in the words which ties the character of the extension application to the specificity of what is required for an application under s 588FF(1) of the Act.

Greig v Stramit 36In-between the decision of Austin J and the decision of the Court of Appeal in BP v Brown, the Queensland Court of Appeal delivered judgment in Greig v Stramit Corporation Pty Ltd [2003] QCA 298; (2004) 2 Qd R 17 (Greig v Stramit). A majority of the Court concluded that s 1322 of the Act could not be availed of to cure any defects of time in an application under s 588FF(3). 37Williams JA took a somewhat different view to the question of whether a shelf order could be made. He stated (at [44]) that any creditor sued outside the three year period must have been made a party to the application for an order extending time. He posed the rhetorical question that any liquidator doing his or her job would be able during the three year period to identify which transactions might be challenged. In BP v Brown Spigelman CJ answered this rhetorical question, (at [201]), "not necessarily". 38Williams JA (at [50]) stated that although it was not necessary to go beyond the limited basis on which the primary judge had reached his conclusion, at least as a general rule the Court has no power to grant a blanket extension of time on an application under s 588FF(3) of the Act on an ex parte application. 39The other judge in the majority, Jerrard JA, expressed a similar view (at [110]). He qualified this by the following remarks (at [111]): " ... It should only be where a liquidator can satisfy the court that the date of the liquidator's appointment, or the state of affairs of the relevant company, have resulted in the liquidator being unable to describe the nature of a possible application or applications to be brought and the identity of the potential respondent or respondents, that those circumstances take the case out of the general rule." 40Although Williams and Jerrard JJA each suggested the Court did not have power to make a shelf order, the qualification "as a general rule" and the express qualification of Jerrard JA to which I have referred above demonstrates, in my opinion, that the approach of the majority was not inconsistent with what was subsequently said in BP v Brown. As was said in Tolcher and Another v Capital Finance Ltd and Another [2005] FCA 108; (2005) 143 FCR 300 (Tolcher v Capital Finance Ltd) at [30], Jerrard JA in Greig v Stramit was directing his attention to the application of the section rather than its proper interpretation. A similar view was taken in Williams (as liquidator of Willahra Pty Ltd (in liq)) v Kim Management Pty Ltd [2012] QSC 143; (2013) 1 Qd R 387 (Williams v Kim Management) at [8]-[31]. 41The majority of the Queensland Court of Appeal also took the view in Greig v Stramit that once the ex parte orders were made on such an application, the proceedings were finally disposed of and that a subsequent order to set aside the orders as against a particular creditor did not alter the position (Williams JA at [55], [71]-[72] and [79]-[81] and Jerrard JA at [114]-[118]). The dissenting judge, Fryberg J, took a contrary view at [146]-[150]. In BP v Brown Spigelman CJ, without finally deciding the issue, expressed a clear preference (at [207]-[208]) for the approach of Fryberg J.

Cases subsequent to BP v Brown 42BP v Brown was followed by the Full Court of South Australia in Ansell Ltd and Others v Davies and Another [2008] SASC 203; (2008) 219 FLR 329 (Ansell v Davies) at [48]. Doyle CJ, who delivered the judgment of the Court, also stated (at [54]) that he was not persuaded that Greig v Stramit was contrary to that decision but if it was he would follow BP v Brown. 43BP v Brown has been followed consistently by courts of first instance both in this State and elsewhere. See, for example, Williams v Kim Management, McGrath and Others v National Indemnity Company [2004] NSWSC 391; (2004) 49 ACSR 403 (McGrath v National Indemnity Company), Scott v Casualife Furniture International, Onefone Australia Pty Ltd and Others v One Tel Ltd and Others [2007] NSWSC 69; (2007) 61 ACSR 246 (Onefone v One Tel), Australian Securities & Investments Commission v Karl Suleman Enterprizes Pty Ltd (in liq) and Others [2004] NSWSC 1244; (2004) 52 ACSR 103, New Cap Reinsurance Corporation Ltd (in liq) and Another v Reaseguros Alianza SA [2004] NSWSC 787; (2004) 186 FLR 175, Tolcher v Capital Finance Ltd and Re Clarecastle Pty Ltd (in liq) [2011] NSWSC 857; (2011) 85 ACSR 260. 44I referred to Gordon v Tolcher above. The High Court did not deal with the question of the power to make a shelf order. However, the Court emphasised at [35] that an application for fixing a longer limitation period under s 588FF(3) of the Act is a "matter" distinct from seeking an order under s 588FF(1) with respect to voidable transactions. The Court also emphasised at [37] that the time stipulation in s 588FF(3) is of the essence of the provision. As was stated by Barrett J, as his Honour then was, in Kassem v Zhang [2008] NSWSC 1287, the effect of the provision is that any application made after the end of the period is incompetent.

Ground 1 45Senior counsel for the applicants pointed to the fact that an application under s 588FF(3)(b) of the Act was an application for an order specifying the period in which the application under s 588FF(1) may be made. He submitted that that led to the question of what is an application under s 588FF(1). He submitted that it was an application for one or more of the orders specified in the latter subsection concerning the transactions the subject of the application. 46Senior counsel for the applicants submitted that in these circumstances an application under s 588FF(3) of the Act is for an order specifying a period in which a single application under s 588FF(1) may be made. He submitted that more than one application under s 588FF(3)(b) can be joined in a single suit but that was a question of joinder depending on the rules of court. 47In those circumstances senior counsel for the applicants submitted that the error in BP v Brown arose from the failure to separate questions of procedural joinder from the question of construction of s 588FF(3)(b) of the Act. This, he said, led to the erroneous conclusion that an application under s 588FF(3)(b) can be an application relating to categories or classes of transactions and most importantly shelf applications. 48The applicants submitted that although the applications contemplated by ss 588FF(1) and 588FF(3)(b) of the Act are distinct, the latter application should be construed conformingly with the specificity of the former. They said this was consistent with the purpose of s 588FF(3) which was to create certainty for commercial entities in a regime which operates retrospectively, whilst providing fairness to the general body of creditors. In that context the applicants pointed to the fact that Pt 5.7B of the Act was introduced by the Corporate Law Reform Act (which was implementing the recommendations of the Harmer Report) and referred to those parts of the Harmer Report and the Explanatory Memorandum which I have set out above. 49The applicants submitted that the words "may only" in the opening words of s 588FF(3) of the Act qualify each of the time periods in subpars (a)(i), (a)(ii) and (b) of the subsection. They stated that the time requirements were an essential condition of the power conferred by s 588FF(1). They submitted the language was otherwise strict, s 588FF(3) permitting only a single extension. 50The applicants submitted that the purpose of s 588FF(3)(b) of the Act was to allow persons who had dealings with companies which had become insolvent to conduct their commercial affairs with a degree of certainty against having past transactions unravelled. They submitted that this was recognised in the language of s 588FF(3). They submitted that the meaning of "an application" as used in the opening words of s 588FF(3)(b) related to a particular application concerning a single transaction. 51The applicants referred to the fact that Spigelman CJ considered the countervailing considerations that on the one hand, at the end of the three year period persons who had dealings with companies that became insolvent would know whether they were at risk. Yet, on the other hand s 588FF(3)(b) of the Act provided for circumstances where a liquidator is not in a position to commence proceedings within three years, for whatever reason. Whilst accepting the latter consideration was relevant, the applicants submitted that a construction which permitted shelf orders leads to uncertainty for persons who had dealings with the company but with whom the liquidator had no interest. 52The applicants submitted that in those circumstances the basal error was that Spigelman CJ did not adopt the narrower construction, namely, that an applicant for an order under s 588FF(3)(b) of the Act should identify specific transactions the subject of the application and the parties thereto. 53The applicants contended that the decision in BP v Brown has contributed to a complex body of jurisprudence and practice and procedure amongst courts. It submitted the approach adopted by the majority in Greig v Stramit of construing s 588FF(3) of the Act consistently with the particularity required by s 588FF(1) provides a certain and predictable regime. 54The applicants submitted that the legislative scheme contended for by the liquidators appeared to entail that the only order which could be made under s 588FF(3)(b) of the Act was a shelf order. They contended that this conclusion was contrary to the express legislative scheme of imposing a three year limitation period and the text and statutory context of s 588FF(3)(b). 55At the hearing senior counsel for the applicants referred to the variety of different forms of transactions referred to in s 588FE of the Act and the width of the definition of "transaction". He accepted that some transactions could take a considerable time to investigate but said the persons who may be the object of it are also affected by a lengthy delay and are entitled to know the nature of potential claims. He also pointed to the fact that notice was necessary not only to oppose the application but also to be aware of a potential suit so as to prepare for it. 56Senior counsel for the applicants submitted, referring to John Alexander's Clubs Pty Ltd and Another v White City Tennis Club Ltd [2010] HCA 9; (2010) 241 CLR 1 (John Alexander v White City) at [131], that it was a fundamental right of persons whose rights are affected by a court order to be given notice. He further submitted this right to notice is taken away by a shelf order. 57Senior counsel for the applicants did accept that it would be sufficient for the purpose of s 588FF(3) of the Act if a transaction was notified. However he said that if a transaction could be identified, the overwhelming likelihood would be that the persons who were parties to it could be identified and given notice. 58Senior counsel for the applicants submitted that the analysis of Austin J (adopted by Spigelman CJ in BP v Brown at [168] per par [33] above) was erroneous. He said in effect that the analysis ignored the opening words of s 588FF(3) of the Act. He submitted that in those circumstances the reasoning did not address the difficulty of construction. He submitted that the interpretation of the section arrived at by Spigelman CJ meant reading the opening words as "any application" rather than "an application". He submitted if that was the legislative intention Parliament could have provided for it. 59Senior counsel for the applicants submitted that the words "under this paragraph" in s 588FF(3)(b) of the Act did not lead to a construction contrary to that for which his clients contended. He submitted that whilst the words made it clear what was involved was a stand alone application, it was still necessary to have regard to the opening words of s 588FF(3). 60The liquidators submitted that the Court should not overrule BP v Brown. They pointed out that the decision had been followed by the Full Court of the Supreme Court of South Australia in Ansell v Davies and compelling reasons needed to be identified as to why it should not continue to be followed. 61The liquidators submitted there was nothing in s 588FF(3) of the Act which required any person to be a party or prohibited the application being made in any particular manner or form. 62The liquidators pointed to the fact that the words "under this paragraph" in s 588FF(3)(b) of the Act made it plain that the application is a distinct proceeding, referring to Gordon v Tolcher. 63The liquidators submitted that the words "may only be made" in s 588FF(3) of the Act only state that commencement within the time specified is a condition of the institution of proceedings under s 588FF(1). 64The liquidators stated that the purpose of the right to grant an extension of time is to protect the interests of insolvent companies and their creditors. They referred to the statement by Austin J referred to in par [33] above that the construction contended for by the applicants "would hamper the work of liquidators for no good reason". They submitted any uncertainty would be resolved by the exercise of judicial discretion. 65The liquidators submitted there was no compelling reason to depart from BP v Brown. They submitted that courts have not had difficulty in discerning circumstances of the exceptional kind which would warrant the making of a shelf order and they have proceeded for many years on the basis that such an order is available in appropriate cases. 66At the hearing senior counsel for the liquidators emphasised that the application of ss 588FF(1) and 588FF(3) of the Act were separate applications. He submitted that unlike s 588FF(1) which was concerned with bringing proceedings for orders against particular persons, s 588FF(3)(b) was concerned with persuading a court to grant a longer period of limitation. 67Senior counsel for the liquidators also submitted that if the opening words of s 588FF(3) of the Act were read to refer to any application, then it could be seen that an application under s 588FF(3) need not refer to a particular transaction. 68Senior counsel for the liquidators referred to s 5C of the Act and s 15AA of the Acts Interpretation Act 1901 (Cth) and submitted that the purpose of the legislation was to ensure that a liquidator had adequate time to investigate transactions regardless of their complexity. 69Senior counsel for the liquidators submitted that s 588FF(3) of the Act was different in substance to the usual form of limitation provisions. He submitted there was no specified limitation period because the limitation period was either the period in s 588FF(3)(a)(i) or (ii) or such further period ordered under s 588FF(3)(b). 70Senior counsel for the liquidators referred to what he described as inconvenient results arising from the construction contended for by the applicants. He submitted it would provoke disputes as to whether an application brought under s 588FF(1) of the Act corresponded with the application for which an extension was granted. He also submitted it would lead to debates as to whether an extension was necessary on the basis that the liquidators had sufficient information to determine whether or not to commence proceedings. He submitted that the discretion vested in the Court provided adequate protection for third parties who were affected. He submitted that the provision should be given a liberal construction. 71Senior counsel for the liquidators also submitted that the principle in John Alexander v White City could have no application in circumstances such as the present where the applicants were not known to be a potential defendant at the time the extension application was made.

Ground 2 72The applicants contended that the judge should have found, on discharge of the Shelf Order, that the Court had no power to re-exercise the discretion under s 588FF(3)(b) of the Act. The applicants submitted this raised two distinct questions. The first was whether assuming there was no power to make the Shelf Order and assuming the power to make further orders was available, any further orders could be made in the present case. 73The applicants said that this question must be answered no. This was because the order could only be made on the facts originally known and which could have been relied upon at the time of the original application. As no facts were known at that time which could rise to a claim against the applicants, there was no basis for making an order. 74The second question identified by the applicants was whether upon the discharge of the s 588FF(3)(b) order, any extant "application" survived in respect of which some further steps could be taken. 75The applicants accepted that the time limit attached to the bringing of proceedings against s 588FF(3)(b) of the Act attached to the institution of proceedings rather than the making of the order and that amendments to the originating process did not necessarily make the application inconsistent with s 588FF(3)(b): McGrath v National Indemnity Company at [18]-[20], Onefone v One Tel at [36] and JP Morgan v Fletcher at [152]. However, they submitted that an amendment extending the operation of the order to the applicants could not be granted in the present case. First, it was submitted that the character of the application as initially brought and as amended was not materially the same. Second, there was at no point an application for relief to which the applicants were a party. Third, there was nothing in the Shelf Order to suggest it was anything other than a final order which disposed of the s 588FF(3)(b) proceedings. 76Although it was not entirely clear in the written submissions senior counsel for the applicants acknowledged that Ground 2 would only arise if the applicants were successful on Ground 1. 77The liquidators submitted the proposition that any amendment power had to be exercised by reference to facts known at the time of the original application should not be accepted. They submitted the primary judge was correct in weighing the prejudice to either party in the making of the Shelf Order. 78The liquidators submitted that irrespective of the shelf order question, the Court was not "functus" in the sense contended for by the applicants. They submitted it would only be functus if the particular power exercised did not allow for a rehearing or if, upon a re-hearing, it decided that a further order should not be made. They pointed to the fact that the applicants were seeking the exercise of the Court's power under Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 36.16(2)(b). They noted the purpose of such a provision was to give a hearing to an affected party who was absent at the time the original order was made. 79Senior counsel for the liquidators submitted that the issue raised by Ground 2 did not arise in any event because the primary judge did not set aside the order.

Ground 3 80Both parties agreed that the success or failure of this ground depended on Ground 1.

Ground 4 81The applicants contended that upon the discharge of the Shelf Order the Court had no power to join a non-party to an application for relief under s 588FF(3)(b) of the Act in the event that the period prescribed by that section had expired. 82The applicants submitted that if the construction of s 588FF(3)(b) of the Act for which it contended was correct, a joinder would have been futile as joinder cannot deprive a person of an accrued limitation defence. 83The liquidators submitted that as was said in BP v Brown at [150]-[151], even if there had been no anterior order which applied to the applicants beforehand, the exercise of the joinder power would have been a procedural step within the confines of an application (that was a proceeding which had commenced within the original three year period).

Consideration 84Leave of the Court to bring the proceedings against the second and third respondents was required by virtue of s 471B of the Act. There was no objection to the grant of leave and it should be granted. 85Whether or not leave to appeal is necessary may be debatable. However, the respondents accepted that to the extent necessary, leave should be granted.

Ground 1 86In Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504, this Court determined at [294]-[295] that it should not depart from one of its earlier decisions unless it considers that the decision is plainly wrong in the sense of having a strong conviction the decision was erroneous and that the nature of the error can be demonstrated with a degree of clarity by the application of correct legal analysis. Further, the Court stated at [301] that there must be a compelling reason for the departure from the earlier decision. 87BP v Brown is a decision on legislation operating throughout the nation which has been followed by the Full Court of the Supreme Court of South Australia in Ansell v Davies. Further, as I have indicated earlier, I do not regard the decision of the Queensland Supreme Court in Greig v Stramit as inconsistent with its conclusion. This provides a further reason the decision should not be overruled unless it is considered to be plainly wrong: Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485 at [492]. 88The arguments advanced by the applicants in favour of the more restrictive interpretation of s 588FF(3)(b) of the Act have considerable force. First, the opening words of s 588FF(3) refer in terms to an application under s 588FF(1). Thus, s 588FF(3)(b) can be read as referring to a particular application under s 588FF(1) rather than conferring a general power to extend the limitation period provided for in s 588FF(3)(a). 89Second, this construction would not in my opinion require a liquidator to identify precisely what orders he sought or necessarily the parties against whom such orders were to be sought. On this construction an application could be made under s 588FF(3)(b) of the Act for an extension of time to commence avoidance proceedings in respect of a particular transaction without specifying the orders under s 588FF(1)(a)-(g) which ultimately would be sought. 90If the opening words of s 588FF(3) of the Act referred to "any application" rather than "an application", it would have been relatively clear in my opinion that a shelf order was within power. However, the legislature chose not to use these words. 91As the applicants pointed out, if the construction of s 588FF(3)(b) of the Act contended for by them is accepted, persons whose rights are affected by such an application would generally be capable of notification and be in a position to argue whether the orders should be made. As a general rule parties whose rights are directly affected are necessary parties to any proceedings and have a right to be joined: John Alexander v White City at [131]. In BP v Brown Spigelman CJ stated that Austin J was correct in setting aside the original orders which had been made on the ground that BP had not been provided procedural fairness. The position in my respectful opinion was correctly summarised by his Honour in the following passages of his judgment: "[138] In the second judgment, Austin J set out the relevant case law, which I do not find it necessary to repeat. There was no relevant fact or circumstance which justified putting the appellant/cross-respondent in the position of having to move the court to set aside an order. No power given to the court by the Act or the Rules should be interpreted in such a manner as to permit the court to act in breach of the obligation of procedural fairness. In the circumstances of this case, that obligation extended to providing an opportunity to make submissions before any order was made. [139] No doubt the appellant/cross-respondent will be able to make submissions upon issues of hardship and the effects of delay when the application under s 588FF(1) is heard. However, that will fall to be considered amongst a wider range of considerations and at a time when the appellant/cross-respondent is in a distinctively different position to that in which it finds itself at the time of an application under s 588FF(3)(b). (See R v Criminal Injuries Compensation Board, Ex parte A [1998] QB 659 especially at 675H-677B and on appeal R v Criminal Injuries Compensation Board; Ex parte A [1999] 2 AC 330 especially at 341B-F)." 92His Honour's subsequent conclusion at [157]-[159] that the joinder of BP outside the limitation period prescribed by s 588FF(3)(b) of the Act would not be futile and that the making of a shelf order under s 588FF(3)(b) was within power sits somewhat uneasily with these passages. 93Further, as Spigelman CJ recognised, the policy considerations underlying the legislation conflict. On the one hand the legislation, as the applicants pointed out, is designed to provide certainty to persons who have dealt with the company after a finite time period. On the other hand, s 588FF(3)(b) of the Act at the very least recognises the fact that the liquidator for good reason may not be able to bring an application within the time specified in s 588FF(3)(a). 94It must be remembered that prior to the introduction of Pt 5.7B of the Act the time limit for proceedings to set aside voidable transactions was generally accepted to be six years from the date of the commencement of the winding up (Harmer Report at [688]). One of the objects of the amendments referred to in the Report was to impose a more rigorous time limit. 95In that context there is much to be said for the argument that experienced liquidators would be in a position to ascertain, after a period of three years, which transactions they may wish to challenge. A final decision may depend on a host of other factors but I remain unconvinced that a period of three years is insufficient at least to form the preliminary view necessary to make an application under s 588FF(3)(b) of the Act. 96The difficulty with construing the legislation by reference to policy considerations in cases such as this is exemplified by the fact that there are two competing policy considerations. In that context as Gleeson CJ pointed out in Carr v Western Australia [2007] HCA 47; (2007) 232 CLR 138 at [5], the principle that a construction of the Act is to be construed by reference to the purpose of the legislature is of little assistance where a statutory provision strikes a balance between competing interests and policies (see also Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd [2013] HCA 36; (2013) 87 ALJR 1009 at [40]-[41]). 97However, it is incorrect to say that Spigelman CJ ignored textual considerations in reaching his conclusion on the construction of the subsection. His Honour adopted the analysis of Austin J to the effect that s 588FF(3)(b) refers to s 588FF(1) of the Act only to say that an application must be made within the period of time set by s 588FF(3) (see par [33] above). 98Austin J in the same paragraph emphasised that an application made under s 588FF(3)(b) of the Act was a different and separate application to an application under s 588FF(1). This was also emphasised by the High Court in Gordon v Tolcher at [34]-[35]. The fact that it is an application separate to an application brought under s 588FF(1) provides support for the broader construction of the section adopted by Spigelman CJ. If s 588FF(3)(b) was to be tied to a particular application under s 588FF(1), the legislation could have so provided. 99Further, a broader construction of the subsection is consistent with the well known principle that provisions conferring powers on courts should be liberally construed: The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404 at 421 and Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue of the State of Victoria [2001] HCA 49; (2001) 207 CLR 72 at [11]. 100In these circumstances it could not be said that BP v Brown was plainly wrong. Nor, in my opinion, is there a compelling reason for it to be overruled. To the contrary, the case has been followed and applied since 2003 and although no information was supplied as to the number of shelf orders made, liquidators and their advisers presumably have been acting on the assumption that the decision is correct. Reversing the decision in these circumstances could be productive of a substantial injustice. 101It follows that Ground 1 has not been made out.

Ground 2 102The primary judge did not discharge the Shelf Order. In these circumstances the question of whether the original application survived so that the discretion could be re-exercised (as dealt with in BP v Brown at [207]) does not arise. 103The interlocutory process filed by the applicants relied on rr 36.15 and 36.16 of the UCPR in seeking to have the Shelf Order set aside so far as it concerned them. It is clear that the Court has power under the rules to entertain such an application. Rule 36.16(2)(b) empowers a court to set aside an order made in the absence of a party. A party for the purpose of that rule extends beyond persons actually joined in the proceedings to persons whose interests are directly affected by the order: JP Morgan v Fletcher at [147], [163]-[164] and [166]. 104The issue which arises, however, is whether no notice having been given to the applicants that the order was to be sought, the applicants had the right ex debito justitiae to have the order set aside (see Cameron v Cole [1944] HCA 5; (1944) 68 CLR 571 at 589) or whether the Court had a discretion whether or not to do so. 105In BP v Brown Spigelman CJ (at [136]) indicated that a clearly identified party who would be affected by the order should be given notice. Nonetheless, his Honour said in the same paragraph that there may be circumstances where it was not appropriate to give such an opportunity. However, his Honour (at [155]) expressly reserved the question of what recourse a creditor who became targeted only after the application had been granted would have to approach the court to challenge the extension so far as it affected that creditor (as is the case in these proceedings). 106As I indicated in dealing with Ground 1, a powerful reason against the making of a shelf order is its potential to affect creditors who have no notice of its application and whose rights are adversely affected (see par [91] above). However, once it is accepted that BP v Brown was correctly decided it follows, in my view, that although there is power to set aside the order on the application of a creditor who was not notified prior to its being made because the creditor was not a target at the time, the Court retains a discretion whether or not to set it aside as against that creditor. 107The primary judge was correct in concluding that BP v Brown was correctly decided. No error of discretion was shown in his refusal to make the orders sought in the applicants' interlocutory process. 108It follows that this ground of appeal has not been made out.

Ground 3 109The applicants acknowledged Ground 3 was dependent on the success of Grounds 1 and 2. Having regard to my conclusion on these grounds set out above, this ground of appeal has not been made out.

Ground 4 110The basis for this ground of appeal was that the applicants should not have been joined to the liquidators' process as on discharge of a shelf order the application for joinder was made out of time. 111Black J did not discharge the Shelf Order. For the reasons which I have given he was not in error in failing to do so. It was, in my opinion, appropriate to join the applicants to the proceedings in circumstances where the applicants were seeking to vary the order which had been made in those proceedings. This ground of appeal has also not been made out.

Conclusion 112In the result leave to appeal should be granted but the appeal dismissed. 113I would make the following orders: 1.Pursuant to s 471B of the Corporations Act 2001 (Cth) grant leave to the applicants nunc pro tunc to bring proceedings CA 2012/395153 against the second and third respondents. 2.Grant the applicants leave to appeal. 3.Direct the applicants within 14 days to file a Notice of Appeal in the form of the Amended Draft Notice of Appeal contained in the Orange Book filed in these proceedings. 4.Appeal dismissed. 5.Order the applicants pay the respondents' costs of the application for leave to appeal and the appeal. 114BEAZLEY P: I have had the advantage of reading in draft the judgment of the Chief Justice. I have also had the opportunity of reading the comments of the other members of the Court with whom I join in agreeing with the orders proposed by the Chief Justice. In my opinion, it has not been established that BP Australia Ltd v Brown [2003] NSWCA 216; 58 NSWLR 322 is plainly wrong. For the brief reasons which I express below, I consider the construction given to the Corporations Act 2001 (Cth), s 588FF(3) in BP v Brown is correct. 115Section 588FF makes provision for the court to make orders in respect of voidable transactions. Section 588FF(1) is directed to the orders that the court may make if it is satisfied there is a voidable transaction. An application under s 588FF(1) in respect of a transaction or transactions must be brought within the time period specified in s 588FF(3)(a) or within the period of any extension ordered by the court under s 588FF(3)(b). An application for an extension of time under s 588FF(3)(b) must be brought within the period specified in s 588FF(3)(a) but need not be determined in that period. There is no controversy about these propositions. 116Properly construed, s 588FF(3)(a)(i) and (ii) specifies the limitation period in which an application under s 588FF(1) is to be brought. Section 588FF(3)(b) provides for a discretionary extension of the time specified in s 588FF(3)(a). Such an application must be made within the time specified in s 588FF(3)(a)(i) or (ii). At least in New South Wales, a further extension may be sought under the Uniform Civil Procedure Rules 2005 (UCPR), r 36.16, provided the original application for extension of time was brought within the time specified in s 588FF(3)(a)(i) or (ii): see JP Morgan Chase Bank, National Association v Fletcher; Grant Samuel Corporate Finance Pty Limited v Fletcher [2014] NSWCA 31. 117Under s 588FF(1) a liquidator must specify the transaction or transactions sought to be impugned. However, the language of s 588FF(1) is not replicated in s 588FF(3). That provides strong textual support for the construction urged by the liquidators. That construction is consistent with the obvious purpose of s 588FF(3) which is to prescribe a time frame in which applications under s 588FF(1) must be brought, subject to the court's discretionary power under s 588FF(3)(b). In this regard, I agree, in particular, with the observations of Macfarlan JA at [123], Barrett JA at [133]-[134], and Gleeson JA at [138]-[139]. 118MACFARLAN JA: I agree with the orders proposed by Bathurst CJ and, subject to the following, with his Honour's reasons. 119I agree with his Honour that the decision in BP v Brown is not plainly wrong and that it should therefore be followed. My view is that that decision is in fact correct. 120I recognise that there are, as noted by Bathurst CJ, competing policy considerations that are relevant. However, these are of limited significance in the present case as in my view the imposition on the Court's power conferred by s 588FF(3)(b) of the restriction for which the appellants contend finds no support in the text of s 588FF(3). In any event, being a provision conferring a power upon a court, s 588FF(3)(b) is "to be given no narrow construction" and "is to be construed with all the amplitude that the ordinary meaning of its words admits" (Roy Morgan Research Centre v Commissioner of State Revenue at [11]). 121In particular, I do not consider that an application of the type contemplated by s 588FF(3)(b) may only be made with reference to an application of the type described in the chapeau to s 588FF(3), that is, an application under s 588FF(1). The respective applications are plainly of a different character and nothing in the subsection ties the one to the other. Particularly given the liberal construction required by Roy Morgan Research, the subsection should be understood as indicating that an application of the type referred to in the chapeau may be brought within the general period for applications specified in paragraph (a), with the Court being able to act under paragraph (b) to extend that generally applicable rule so far as it applies to a particular liquidation. 122This construction of the subsection does not defy good sense as the decision to confer the power of extension in broad terms may well have been made to cover the possibility that the process of liquidation and investigation might in particular cases be protracted. It remains in such cases for the Court to weigh the competing interests when requested to grant an extension. 123The present case provides an illustration of the vagaries of liquidations that may have led the legislature to conclude that the Court's power to extend the time for s 588FF(1) applications should be broad. Here the "relation-back day[s]" referred to in subsection (3)(a) and applicable to the two companies in liquidation, OL and OA, were in June 2008 (being in the case of OL, the date of the filing of the Public Trustee's winding-up application) and October 2008 (being in the case of OA, the date that the company was placed into voluntary administration). The three year period under s 588FF(3)(a) for each thus expired in June 2011 and October 2011 respectively. As the joint liquidators of OL and OA were only appointed on 9 September 2009, they had significantly less than two years to conduct their investigations and make applications under s 588FF(1). In many other cases, the relation-back day would be much closer to the date of appointment of the liquidator, giving the liquidator close to three years to investigate and to make applications. 124BARRETT JA: I agree that orders should be made as the Chief Justice proposes. I also agree with his Honour's reasons but wish to add some observations of my own concerning Ground 1 of the grounds of appeal. 125In the form in which they have existed since 1993, the voidable transaction provisions in Division 2 of Part 5.7B of the Corporations Act 2001 (Cth) serve the purpose of redressing imbalance to the detriment of the general body of creditors resulting from favourable treatment of certain persons in transactions undertaken while the company was still a going concern. 126The unstated premise is that certain forms of activity in the period leading up to the commencement of winding up interfere with due operation of the pari passu principle by causing to be in other hands resources that should form part of the insolvent estate for the benefit of creditors as a whole. 127The voidable transaction provisions do not create any right of action in the company. Nor do they allow the liquidator to recover. They enable the liquidator, as the official charged with the task of collecting and administering the insolvent estate, to seek the assistance of the court in augmenting that estate for the benefit of creditors by countering the effects of pre-liquidation transactions of certain kinds. 128When I refer to augmenting the insolvent estate for the benefit of creditors, I intend to recognise the reality that, although in a simple s 588FF(1)(a) case, the order is an order for the payment of money "to the company", the right by virtue of which the money is received is a right of neither the company nor the liquidator; that the company has no capacity to mount a recovery action; and that the benefit of the recovery inures wholly for the benefit of the persons who will participate under the winding up. Among early cases under the present provisions in which this was recognised are Tolcher v National Australia Bank Ltd [2003] NSWSC 207; 174 FLR 251 and Tolcher v National Australia Bank Ltd [2004] NSWSC 6; 182 FLR 419. The provisions now in force share with their predecessors the characteristic that they are "only intended to apply in . . . a winding up for the benefit of the general creditors": Willmott v London Celluloid Co (1886) 34 Ch D 147 at 150 per Cotton LJ (and see Re Yagerphone Ltd [1935] 1 Ch 392; N A Kratzmann Pty Ltd v Tucker (No 2) [1968] HCA 44; 123 CLR 295). 129Because the voidable transaction provisions represent part of the machinery that the legislation puts at the disposal of a liquidator to assist in assembling the pool of assets from which claims cognisable in the winding up will be satisfied, the s 588FF(3) time limit is principally concerned with the conduct of liquidators. The section regulates liquidators by instilling a sense of due dispatch in the pursuit of claims with a view to augmenting that pool. Liquidators are told, in effect, that it is their duty, generally speaking, to initiate any voidable transaction proceedings within the specified three year period; and that, if there is good reason to think that further time is needed, they must, before the expiration of the three years, make an application to the court with a view to persuading it that an extension should be granted. The clear expectation is that liquidators will, within the three years, do two relevant things: commence all such recovery actions as available evidence and resources make it feasible and sensible to pursue; and consider whether there are genuine prospects that pursuit of other recovery actions might prove to be feasible and sensible if further time is made available. 130At the same time, s 588FF(3) assures persons who may be affected by voidable transaction claims that a proceeding will not be commenced after the expiration of the specified period unless the liquidator has positively satisfied the court that some longer period should be allowed; and it assures persons with rights to participate under the winding up that the time limit will not have an inflexible and arbitrary operation and may be relaxed in an appropriate case. 131In Brown v DML Resources Pty Ltd (No 2) [2001] NSWSC 590; 52 NSWLR 685, Austin J identified the following as the first four cases in which orders for the extension of time had been made under s 588FF(3): Taylor v Woden Constructions Pty Ltd [1998] FCA 1228 (Finn J), Green v Chiswell Furniture Pty Ltd [1999] NSWSC 608 (Austin J), Re Application of Hall [1999] NSWSC 984 (Hamilton J) and Re Richard Walter Pty Ltd [1999] NSWSC 1179 (Santow J). Austin J noted that the order made in Taylor v Woden Constructions Pty Ltd was limited to a specific s 588FF(1) application, whereas the order in each of the three later cases was in general terms similar to the order he had himself made in the case before him. 132It can thus be seen that there was early acceptance of s 588FF(3) as a provision by which the court might allow a liquidator additional time in which to perform part of his or her function, without regard to any particular proposed application under the voidable transaction provisions. In Brown v DML Resources Pty Ltd (No 2) (above), Austin J said (at [34]-[36]): "I accept the applicants' submission that a purpose of the statutory reform that produced s 588FF was to prevent liquidators from relegating the recovery of voidable preferences to the end of their work programs. The investigation of voidable transactions should generally be conducted concurrently with their other liquidation work. Nevertheless, there will be some cases where, notwithstanding the most diligent of efforts, the liquidator is so far short of completing his or her investigations towards the end of the time limit that it is impossible to identify particular transactions in respect of which orders for extension of time could be made. In some cases, this could be because of the size and complexity of the business and affairs of the company and the volume of work required to administer the insolvency. Re Application of Hall is an example of such a case, and Re Richard Walter Pty Ltd is also a case of complex administration, with the additional fact that the liquidator had to wait for the determination of tax litigation involving the company that would materially affect the course of administration. In other cases, the problem may arise because the three year period is defined (under Part 5.6 Division 1A) by reference to the relation-back day, and can commence to run well before the liquidation of the company actually begins. Green v Chiswell Furniture was such a case, because there the relation-back day was 1 May 1996, the day when the plaintiff was appointed administrator of the company; but he became the liquidator, and was consequently placed in a position to consider voidable transactions comprehensively, only on 21 January 1999, when the creditors resolved that the company be wound up after a deed company arrangement had been in operation, unsuccessfully, for an extended period. Consequently, the liquidator had only a few months to consider whether there were any voidable transactions that were open to challenge. In circumstances such as these, the liquidator may not be in a position, through no fault of his or her administration, to specify within the statutory time limit each transaction that should eventually be challenged as a voidable transaction. If the Court cannot make orders under s 588FF(3) except in respect of specific transactions, it will be unable to extend time in such cases. The consequence would be to defeat the interests of creditors. The statutory wording does not require such a restrictive construction of the section, and such a construction would be contrary to the purposes for which Part 5.7B Division 2 was enacted. The Court is required by s 109H to prefer a construction that would promote the purpose or object underlying the Corporations Law over a construction that would not promote the purpose or object. The relevant purpose or object is the protection of the interests of creditors by allowing the liquidator to pursue recoveries in respect of voidable transactions, where the Court considers that commencement of proceedings for that purpose would be warranted after the expiration of the statutory time limit." 133These observations correctly identify the purpose of the power to extend time and emphasise the correctness of Spigelman CJ's riposte, "Not necessarily" (in BP Australia Ltd v Brown [2003] NSWCA 216; 58 NSWLR 322 at [201]) to the proposition advanced by Williams JA (in Greig v Stramit Corporation Pty Ltd [2003] QCA 298; (2004) 2 Qd R 17 at [44]) that any liquidator doing his or her job would be able during the three year period to identify transactions that might be challenged. A very clear example of a case in which a liquidator was, in Austin J's words, not "in a position, through no fault of his or her administration, to specify within the statutory time limit each transaction that should eventually be challenged as a voidable transaction" may be found in Re McGrath (as joint liquidators of the HIH companies); HIH Insurance Ltd (in liq) [2004] NSWSC 165; 205 ALR 643. 134Section 588FF(3) is a provision that directs liquidators as to how they are to conduct windings up and places in the hands of the court the ability to deal with circumstances in which, for some good reason shown, the liquidator requires more time to initiate proceedings under the voidable transaction provisions. The section's mechanism for extension of time can be used to deal with an identified application or identified applications that the liquidator proposes making under s 588FF(1) or with some delineated class of s 588FF(1) applications not capable of precise identification and formulation or with all s 588FF(1) applications not capable of precise identification and formulation. Each of these possibilities is accommodated by the words of the legislation. 135It is unnecessary, in this case, to address the issue concerning r 36.16 of the Uniform Civil Procedure Rules to which Beazley P refers at [116]. 136GLEESON JA: I agree with the orders proposed by Bathurst CJ and, subject to the matter next referred to, I agree with his Honour's reasons. 137I agree with his Honour that the decision in BP v Brown is not plainly wrong and that it should therefore be followed. Moreover, I concur with Macfarlan JA that the decision is in fact correct. I also agree with Macfarlan JA, for the reasons given by his Honour, that s 588FF(3)(b) should not be given the narrow construction for which the applicants contend. 138I would add one brief observation. The proper construction of s 588FF(3)(b) is not to be approached with a mindset that providing certainty to persons who have dealt with the company after a finite time period is the paramount consideration. A more balanced approach is required having regard to the nature and purpose of the extension power and the variety of circumstances in which a company liquidator may seek an extension of time for commencing proceedings in respect of voidable transactions. The Court is given a discretion to extend time, subject to the assessment of all relevant circumstances, including the liquidators' conduct: BP v Brown at [170] per Spigelman CJ. As Barrett JA observes, the principal concern to which the time limit is directed is the conduct of liquidators. 139The extension power recognises that the rigour expected of liquidators, to identify transactions which might be challenged within the three-year period under s 588FF(3)(a), may not always be achievable through no fault of his or her administration. It is unnecessary to canvas all the possible reasons why, or circumstances in which, this might be so. A number are referred to by Austin J in Brown v DML Resources Pty Ltd (No 2) [2001] NSWSC 590 at [34]-[36], which paragraphs have been extracted in the reasons of Barrett JA at [132] above. It is sufficient to observe that in exercising the discretion to extend time, the competing interests of the general body of creditors interested in the winding up and of persons who are parties to transactions which might later be challenged if an extension is granted, whether or not they have yet been identified by the liquidators, is a relevant circumstance which remains for the Court to weigh in exercising its discretion.

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