Mothership proceedings alive and well in NSW and WA

Mothership proceedings for multiple voidable transaction claims are alive and thriving, thanks to a number of recent decisions.

For those unaware, if a liquidator has say 10 unfair preference claims that they wish to proceed against creditors, the liquidator can apply to court to run all 10 matters as (effectively) 1 matter. This can save on significant filing fees, and force lower quantum claims to settle faster.

One case in particular that I wanted to briefly touch on is the very recent Diploma Construction case from the WA Supreme Court.

Here you had 16 creditors that the Liquidator sought to commence 1 mothership proceeding against for alleged unfair preference transactions.

Despite the Defendants’ arguments around unfairness and inconvenience, and the liquidators arguments at [14], the Court (more than) favoured the mothership approach.

In applying Jones v Sun Engineering (2017 WASC) and Bias Boating (2017 NSWSC), the Court referred to the “line of national case authority” in favour of mothership proceedings and said that it was “significant, persuasive and binding”.

Breaking news: are unfair preference mothership proceedings dead?

So there you have it, WA and NSW are running leaps and bounds ahead when it comes to mothership proceedings, but we are still not yet sure about my own home State (QLD).

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