Lo Pilato, in the matter of Barrallier Street Holdings Pty Ltd (in liq) v Waters [2025] FCA 1170

[2025] FCA 1170

Federal Court of Australia|2025-09-23|Before: Cheeseman J

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Judgment (5 paragraphs)

[1]

For the reasons I have given, I am satisfied that the Settlement Deed is not binding on Barrallier, its liquidators, its sole shareholder or its creditors. I have considered whether the Settlement Deed should be varied or set aside. I have decided that in the present circumstances, there would be difficulties attendant in the Court making orders to vary the Settlement Deed. It would not be a simple matter of striking through the subordination clause. Nor would it be a simple matter to modify the mutual irrevocable releases given in the Settlement Deed. Complexities arise as to whether the Settlement Deed binds the liquidators in their capacity as receivers of the property of the Trust. In addition, I am not satisfied that it would be appropriate for the Court to vary the Settlement Deed and give it effect in circumstances where there has been a wholesale failure to comply with s 510 of the Act. It is not appropriate in the present circumstances to "cure" this by simply striking through cl 3 of the Settlement Deed. The Settlement Deed should be set aside.
The question then arises as to whether it should be set aside on terms. Relevant to that question are the undertakings that have been offered to the Court by the liquidators and Damien. The liquidators and Damien have in bringing this application formally given to the Court undertakings that they will not raise any defences that may otherwise have been available to them arising under the Limitation Act 1969 (NSW), the Act (in particular s 1317K) or the principles of res judicata or issue estoppel in answer to any fresh claim by Ms Waters in the District Court to recover her alleged debt of $495,000. It is appropriate to formally note the undertakings that have been given as they have assuaged the concern I would otherwise have had in relation to relevant prejudice occasioned by the defendants in the District Court proceeding executing the Settlement Deed and consenting to the District Court proceeding being dismissed.

Lo Pilato, in the matter of Barrallier Street Holdings Pty Ltd (in liq) v Waters [2025] FCA 1170

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