After replacing David Ross on the liquidation of SSG NSW Pty Ltd in March last year, the McGrathNicol trio of Kathy Sozou, Anthony Connelly and Jamie Harris uncovered a plethora of preferences.
But as they recently discovered, that doesn’t have to mean commencing a plethora of proceedings.
“At the very least, it is unsatisfactory that costs continue to be expended in relation to making applications to a duty judge of this type which is said to be necessary by reason of what might fairly be described as a procedural vulgarity and where there may be some doubt the approach is mandated upon a proper construction of the current FCR.” Justice Michael Lee.
In Sozou (liquidator) v ACN 608 767 942 Pty Ltd, in the matter of SSG NSW Pty Ltd ACN 637 378 333 (in liq) [2026] FCA 531 Federal Court justice Michael Lee laid out how rule 9.02 of the Federal Court Rules 2011 (Cth) (FCR) “has not been understood to permit a plaintiff to commence a single set of proceedings against multiple separate defendants where proceedings are brought by a liquidator for the recovery of money said to be owed to a company in liquidation”.
This his honour reasoned was incompatible with the overarching purpose mandated by the “Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth), which introduced Pt VB into the Federal Court of Australia Act 1976 (Cth) (FCA Act)”.
Having previously attracted iNO’s attention with remarks about “wheel-spinning lawyers” it came as no surprise to learn that Justice Lee concluded that Sozou, Connelly and Harris should not be required to commence a set of proceedings in respect of every one of the 46 unfair preferences they’re seeking to recover.
“This is a somewhat unusual case of this type,” he said.
“It is not a case where there is an identifiable common issue spanning all claims, such as a potential contest over the date of solvency, which may arise where there are a number of defendants alleged to have received unfair preferences from a company.
“Rather, this case, as I understand it from oral submissions, involves 46 claims which have a commonality in the sense that they comprise money (to use counsel’s expression) “flushed out” of the company to various recipients.
“In this case, it is easy to imagine circumstances in which there would be a significant saving of the Court’s time for there to be one proceeding.
“For example, in the evidence-in-chief, the liquidator might read one affidavit disclosing the amounts alleged to have been paid to a large number of individuals, which could then be used in the claim against each.
“Further, it is easy to anticipate, depending upon how proceedings are managed, there might be significant savings in time and cost by having the one “mother proceeding” proceed, even if it is necessary to have separate trials of individual aspects of the case, as is very common when one is dealing with representative proceedings,” the judge said.
In the case of SSG NSW the multiple applications for joinder were to piggyback on the unfair preference proceeding the liquidators commenced two weeks ago against Empryl Pty Ltd, which changed its name to ACN 637 378 333 Pty Ltd late last year after Small Business Restructuring practitioners from dVT McLeods determined the company was ineligible for SBR protection.
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