Weston v Publishing and Broadcasting Ltd

By amended notice of motion, the special purpose liquidator of One.Tel Limited applies under rule 1.12 of the Uniform Civil Procedure Rules 2005 for an order extending time, being the time limited by rule 6.2(4)(a) for the service of originating process in these proceedings. The originating process is the statement of claim filed on or about 25 May 2007. In the absence of an extension of time, the last day for service will be a day towards the end of the current month.

The decided cases make it clear that the court's discretion in this respect is broad and that the court need see no more than "good reason" to make the extension sought: see, for example, Buzzle Operations Pty Ltd v Breirl [2007] NSWSC 922, FAI Insurances Ltd v Mainprize [2006] NSWSC 554, Kleinwort Benson Ltd v Barbrak Ltd [1987] AC 597, Rich v Packer & Ors; Rich v Long & Ors [2007] NSWSC 1290 and Zhang v Semin [2007] NSWSC 229.

The reasons the special purpose liquidator puts forward as "good reasons" in this case are set out in his affidavit sworn on 14 November 2007. He says that further investigations are required before he will be in a position to make final recommendations to creditors of One.Tel whether to proceed to serve the statement of claim on any of the named defendants and, if so, which claims against which defendant.

To that end he has it in mind to pursue further examinations of two particular persons, Mr Miller and Mr Green, and he sets out in his affidavit steps that have been taken towards further examinations of those persons, including attempts made to obtain documents.

Another matter requiring further investigation as referred to in the affidavit, is financial analysis of One.Tel. The special purpose liquidator points to matters upon which completion of the financial analysis is dependent, including access to and review of an Adept accounting system, and other financial information yet to be obtained by him. He gives examples of documents he still needs but has not yet obtained being essentially accounting information or documents. He expects that it will take until mid-February 2008 to restore the Adebt system and to analyse the data produced by it.

The special purpose liquidator also wishes to investigate what evidence is available to be tendered in the proceedings and to analyse that evidence to determine as confidently as possible what the probable outcome of the proceedings would be – something he will obviously do with the assistance of his legal advisers. Having received final opinions of counsel, he will need to make final recommendations to creditors about service of the statement of claim and the persons upon whom and claims in respect of which it should be progressed, if any. It may be that this process of further consideration entails examination of the possibility of amending the claims in the statement of claim.

Another important matter referred to in the affidavit is funding of the litigation. A large amount of money has been spent already. That of itself indicates that there is a substantial financial investment which, one would say, should not be allowed to be lost without good reason. If it can be preserved towards some future benefit by an extension of time rather than evaporating merely by the effluxion of time, that is a relevant consideration.

The special purpose liquidator makes it clear in his affidavit that funding sources are not, to his mind, limited to the resources available within the confines of the winding up of One.Tel. He says that a number of commercial litigation funders have expressed a firm interest in funding the proceedings but that, given the volume of material involved, it is unlikely that any of them would be in a position to put forward a formal proposal for funding until about February 2008. At this stage, of course, the quantum of funding required could not be reliably predicted. That will depend upon completion of the further investigations to which reference has already been made.

The choice is, at a practical level, between forcing the special purpose liquidator to serve the statement of claim as it stands in the next week or ten days and giving him further time in which to make the further investigations and assessments to which he refers. There can to my mind be no doubt that the further steps he intends taking will be beneficial in the sense of refining the litigation strategy, perhaps even to a point where it appears that no strategy is left. Further time will mean that a more complete and more mature proposal can ultimately be considered by the Committee of Inspection, the role of which, in this particular sub-administration, is particularly important for reasons I have expressed on other occasions.

It would be short-sighted to force service in the next week or ten days or, failing that, to see the investment to date yield nothing because service was not effected within the prescribed period of six months. There is good reason to grant the extension sought so that the further steps envisaged may be taken.

I order pursuant to rule 1.12 of the Uniform Civil Procedure Rules that the time under rule 6.2(4) for service of the statement of claim or any amended versions of it permitted by the rules or the leave of the court be extended to 25 May 2008.

I order that the original date for directions in the proceedings of 15 November 2007 be adjourned to 26 June 2008.

I order that the proper costs and expenses of the special purpose liquidator of the amended notice of motion be paid out of the assets of One.Tel Ltd.