By Simon Gallant and Blake O'Neill -
Snapshot
- High Court in Fortress affirms that shelf orders need not identify a particular transactions or party.
- High Court in Grant Samuel holds shelf orders can only be made within the initial 3 year limitation period, and the UCPR cannot be used to extend that time.
In Fortress Credit Corporation (Australia) II Pty Limited & Anor v Fletcher & Ors [2015] HCA 10 the High Court affirmed the decision of the New South Wales Court of Appeal that an application for a ‘shelf order’ under s 588FF(3)(b) of the Corporations Act 2001 (Cth) does not need to identify a specific transaction or party.
Fortress Credit Corporation (Australia) II Pty Limited and Fortress Investment Group (Australia) Pty Limited (‘Fortress’) were creditors of Octaviar Limited and Octaviar Administration Pty Ltd (‘the Companies’). The plaintiffs were Mr William Fletcher and Ms Katherine Barney, the liquidators of the Companies (‘Liquidators’).
The Liquidators obtained a blanket shelf order (extending the time to take action generally, rather than against named parties). Fortress had not been identified as one of the parties that may have been involved in a voidable transaction and so was not named in the order.
Fortress applied to the New South Wales Supreme Court for an order that a previous shelf order made by that Court be varied to exclude Fortress, or in the alternate be set aside in so far as it applied to Fortress.
If the application was successful, the Liquidators would be out of time to proceed against Fortress.
