Since BP Australia Pty Ltd v Brown, there has been a practice of Courts across Australia granting "shelf orders", whereby time for voidable transaction recovery actions by a Liquidator under section 588FF is extended "at large". The Court's power to grant these "shelf orders", however, is to be scrutinised by the High Court in December 2014, in the course of the Octaviar group liquidation.
The Courts of Appeal in Queensland, New South Wales and South Australia have each concluded that "shelf orders" are permitted by the power to extend time for recovery actions, contained in section 588FF(3)(b) of the Corporations Act. That approach, however, has for some time been under a cloud - the High Court has previously attempted to consider the point (in Ansell Ltd v Davies, as part of the Harris Scarfe group liquidation), but the appeal settled before a hearing.
Pending determination by the High Court of the appeal being brought in the Ocatviar liquidation, which is expected sometime in 2015, Liquidators and their advisors ought to carefully consider how to approach applications for time extensions under section 588FF(3)(b) - while the current approach might remain intact, success on the appeal would render the existing approach to "shelf orders" ineffective.
Practitioners should also keep in mind that this appeal will follow closely behind two related appeals brought in the Octaviar group winding up, which challenge the existing approach to granting variations of existing time extensions under section 588FF(3)(b) - that is, orders that further extend an existing extension. Those related appeals are to be heard in November 2014, with judgment also expected some time in 2015 - again, pending the outcome, practitioners ought to exercise caution in relying on the existing practice in this area of the law as it applies to time extensions.