IN THE SUPREME COURT OF VICTORIA	Not Restricted	
AT MELBOURNE
Commercial Court
CoRPORATIONS List
S ECI 2021 03635

IN THE MATTER of INTELLICOMMS PTY LTD (IN LIQUIDATION) (ACN 153 181 367)

BETWEEN:

GLENN JEFFREY FRANKLIN as joint and several liquidator of INTELLICOMMS PTY LTD (IN LIQUIDATION) (ACN 153 181 367) & ORS
(according to the attached Schedule)	Plaintiffs	
		
v  		
		
TECNOLOGIE FLUENTI PTY LTD (ACN 653 110 582)	Defendant	

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JUDGE:	Gardiner AsJ	
WHERE HELD:	Melbourne	
DATE OF HEARING:	30 May 2022	
DATE OF RULING:	3 June 2022 (revised 9 June 2022)	
CASE MAY BE CITED AS:	Re Intellicomms Pty Ltd (in liq) (No 2)	
MEDIUM NEUTRAL CITATION:	[2022] VSC 310	

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CORPORATIONS – Corporations Act 2001 (Cth) (the ‘Act’) – Reasons for declarations and orders made consequent to finding that sale of business agreement entered into by company was a creditor-defeating disposition under s 588FDB of the Act and a voidable transaction under s 588FE(6B) of the Act – Form and scope of relief available to plaintiff under s 588FF(1) considered. 

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APPEARANCES:
	Counsel	Solicitors	
For the Plaintiffs	Mr J Evans QC
with Ms V Bell	Madgwicks Lawyers	
			
For the Defendant	Mr H N G Austin QC 
with Mr D F McAloon	Strongman & Crouch	

HIS HONOUR:
1	On 11 May 2022, I published reasons (‘my first reasons’) for my determination that the sale agreement the subject of this proceeding (‘Sale Agreement’) was a creditor‑defeating disposition within the meaning of s 588FDB(1) of the Corporations Act 2001 (Cth) (the ‘Act’) and voidable pursuant to s 588FE(6B) of the Act.  These reasons should be read in conjunction with my first reasons.  
2	At the conclusion of my first reasons, I requested the parties to consult on a form of order designed to implement them.  On 30 May 2022, I heard argument from senior counsel for both parties on the question of what final relief should be ordered.  While there is agreement as to most matters, several matters are contentious and require resolution.  
3	The plaintiffs have proposed a form of order which was appended to their written submissions filed on 30 May 2022 and the defendant (‘TF’) has considered them and reacted to them.  
4	I consider that declarations and orders should be made in the following terms.  I will adopt the form of the order proposed by the plaintiffs and adapt it to incorporate certain amendments.  I will make certain declarations and then move to the orders to be made.  
5	First, by reason of the findings made in my first reasons, I will declare the Sale Agreement between Intellicomms and TF is a creditor‑defeating disposition within the meaning of ss 588FDB(1) and 588FE(6B) of the Act. 
6	I will also declare that the Sale Agreement was void at and after the time it was made. 
7	I now turn to the orders.
8	At the outset, I observe that the powers that are provided for in s 588FF(1) are broad but the Court’s jurisdiction is still prescribed by the terms of the sub-section. 
9	The plaintiffs seek an order (adopting the expression found in s 588FF(1)(b)) that TF is to deliver up to Intellicomms, all property of Intellicomms the subject of the Sale Agreement forthwith.  TF proposed a form of wording which replaced the words ‘the subject of’ with the words ‘sold to the defendant pursuant to.’  I prefer the plaintiffs’ formulation and I will so order.  
10	The plaintiffs next propose an order that TF is to deliver up to Intellicomms all its property forthwith.  In their written submissions, the plaintiffs contend that there will be property of TF which was not previously the property of Intellicomms but that such property has necessarily been ‘derived’ by TF as a result of the Sale Agreement and in circumstances where the Sale Agreement was void at all times, it can be seen to have been gained by it from the use of Intellicomms’ property (including its intellectual property) or from the proceeds of that property.  The plaintiffs say that it is an entirely reasonable inference that any property now held by TF ‘fairly represents the application and use of Intellicomms’ property that TF has had possession and control of since 8 September 2021.’  Further, under the Sale Agreement, Intellicomms’ intellectual property was transferred to TF and this specifically included confidential information (including the right to enforce an obligation to keep information confidential).  Reference is made to cl 4.1 of the Sale Agreement.  The plaintiffs submit that it is clearly open to the Court to infer that any new software licences entered into by TF and any new customer contracts have been obtained by TF using the intellectual property, know-how and confidential information of Intellicomms.  As such, it is contended that the Court is empowered to order the property of TF is to be transferred to Intellicomms pursuant to either s 588FF(1)(c) or s 588FF(1)(d) of the Act.  
11	Section 588FF(1)(c) provides that the Court may make:
… an order requiring a person to pay to the company an amount that, in the court’s opinion, fairly represents some or all of the benefits that the person has received because of the transaction; 
(emphasis added)
12	In my opinion, the Court does not have the power to make the order which is proposed pursuant to s 588FF(1)(c).  Section 588FF(1)(c) provides for the Court to award an amount which represents the benefits that TF has received.  There is no basis or evidence for the calculation of ‘an amount’ which represents the benefit which TF has received by which the Court would have jurisdiction to make such an order. 
13	 Section 588FF(1)(d) gives jurisdiction to the Court to make:
… an order requiring a person to transfer to the company property that, in the court’s opinion, fairly represents the application of either or both of the following:
(i)	money that the company has paid under the transaction;
(ii)	proceeds of property that the company has transferred under the transaction;
(emphasis added)
14	The only potential basis for making an order in respect of the matters to which I have referred would be pursuant to s 588FF(1)(d)(ii), and in my opinion that is not available to the plaintiffs to obtain the relief they seek.  I do not think that it is possible on the evidence to characterise what is proposed in the plaintiffs’ proposed order, i.e. the transfer of the entire business of TF as of today’s date, as constituting proceeds of property which ‘… fairly represents the application of … proceeds of property that the company has transferred under the transaction.’  What is proposed involves a requirement that the Court determine what fairly represents the application of the proceeds of the property transferred to TF under the Sale Agreement and I do not consider that there is an evidentiary basis to enable the Court to make such a determination.  I decline to make the order in respect of delivery up to Intellicomms of all of the property of TF as proposed by the plaintiffs. 
15	Next, the plaintiffs propose an order that TF transfer to the plaintiffs all items of intellectual property ‘utilised for the operation of the “Ezispeak” business.’  TF proposes instead that the order provide that TF transfer to the plaintiffs ‘all items of intellectual property sold to the defendant pursuant to the Sale Agreement’ including, but not limited to, identified items of intellectual property which included business names, domain names, email addresses, social media accounts, registered and unregistered designs, trademarks, copyright, telephone numbers and software licenses.
16	The identity of the intellectual property listed in the proposed order is not contentious but it will be seen that the parties differ on the form of chapeaux which introduces the proposed order concerning it.  TF submits that the formulation put up by the plaintiffs is ‘untethered’ to the actual intellectual property identified and sold under the Sale Agreement and could be construed to include any intellectual property which is currently used by TF regardless of whether it was ever the property of Intellicomms or when it came into existence.  As noted in my remarks concerning paragraph 4 of the plaintiffs’ proposed order which sought an order to transfer to Intellicomms all TF’s property, I consider that the statutory power under s 588FF(1) is confined to making orders in respect of the property transferred under the impeached transaction.  I propose to make an order with the chapeaux as follows:
[TF] is to do all things necessary to transfer to the plaintiffs forthwith, all items of intellectual property transferred to [TF] pursuant to the Sale Agreement including but not limited to: …
17	At the hearing of this matter on 30 May 2022, the telephone number ‘1300 385 828’ was the subject of discussion.  Mr Austin, senior counsel for TF, indicated that that was the telephone number presently being used by TF.  For the reasons I have provided above, I do not consider that I have the power to order its transfer as proposed by the plaintiffs.  The other number, ‘1800 796 518’ was apparently the former number used by Intellicomms and I will order its transfer. 
18	I consider that, for clarity, it is appropriate, as TF proposes, to identify the various categories of intellectual property as they are respectively identified in the items in attachment D to the Sale Agreement.
19	Next, the plaintiffs propose that TF is to do all things necessary to transfer the  shares in Intellicomms NZ Ltd to the plaintiffs forthwith.  TF had proposed minor amendments to this proposed order, seeking the insertion of the words ‘sold to [TF] pursuant to Sale Agreement,’ but after discussion at the hearing it was indicated that there is no question that there are any other shares in existence in respect of Intellicomms NZ Ltd which were not the subject of the Sale Agreement.  Such an order would presumably be made under s 588FF(1)(b) which provides for an order that the property be transferred to ‘the company’ and not the plaintiffs collectively and I will order that TF is to do all things necessary to transfer the shares in Intellicomms NZ Ltd to Intellicomms forthwith.  
20	The plaintiffs next propose several orders in relation to contracts between TF and ‘any person who was, at any time previously, a customer of [Intellicomms] (‘affected third party’) in existence as at the date of this order.’  They seek that such contracts be varied so that ‘on and from 14 days from the date of this order:  (a) any clause prohibiting the assignment by [TF] is deleted; and (b) [TF] is replaced as a party to that agreement by [Intellicomms].’  
21	The plaintiffs then propose an order that ‘affected third parties have liberty to apply to the Court for an order that paragraph 7 of these orders (i.e. the immediately preceding order I have just referred to) will not apply to them, within 14 days from the date of this order, on giving two days’ notice in writing to the plaintiffs.’ 
22	Next the plaintiffs propose an order that ‘[TF] is to provide a list of affected third parties to the plaintiffs within two business days of the making of this order.’  Finally, the plaintiffs propose an order that ‘the plaintiffs are to serve a copy of this order, by email or other electronic communication, on each affected third party within one business day of receiving the list from [TF] under paragraph 9.’
23	TF, which was responding to a previous draft of the orders involving third parties, proposed a chapeaux which varied from that proposed by the plaintiffs.  It proposed:
Conditional upon the consent of the affected third party, any contract between [TF] and any person who was as at or prior to the date of the Sale Agreement, being 8 September 2021, [then omitting the words ‘any time previously’ which appeared in the plaintiffs’ draft under consideration] a customer of [Intellicomms] (affected third party) in existence as at the date of this order are hereby varied so that: 
(a)	any clause prohibiting assignment by [TF] is deleted; and 
(b) 	[TF] is replaced as a party to that agreement by [Intellicomms].
24	It will be seen that the order proposed by TF limits the operation of the ‘third party clause’ to … ‘ any contracts between [TF] and any person who was at or prior to the date of the Sale Agreement … a customer of the [Intellicomms].’  The plaintiffs’ proposal embraces contracts between TF and any person who was at any time previously a customer of [Intellicomms] (affected third party) [which was] in existence at the date of this order.  TF’s formulation is that, conditional upon the consent of the affected third party, any contracts between TF and any person who was at or prior to the date of the Sale Agreement, being 8 September 2021, a customer of [Intellicomms] (affected third party) [which are] in existence at the date of this order are captured.  
25	Since Intellicomms ceased trading as at the date of the Sale Agreement, it presumably ceased attracting new customers after the date of the Sale Agreement on 8 September 2021.  I cannot therefore discern a practical difference between the two formulations in that regard.  
26	It will be seen however that the plaintiffs propose a more elaborate mechanism in respect of what are described as ‘affected third parties,’ providing that such parties have liberty to apply to the Court that these orders ‘will not apply to them.’  
27	Sections 588FF(1)(h) and (i) provide that the Court may make:
(h)	an order declaring an agreement constituting, forming part of, or relating to, the transaction, or specified provisions of such an agreement, to have been void at and after the time when the agreement was made, or at and after a specified later time;
(i)	an order varying such an agreement as specified in the order and, if the Court thinks fit, declaring the agreement to have had effect, as so varied, at and after the time when the agreement was made, or at and after a specified later time; 
(emphasis added)
28	Section 588FF(1)(i) is to be read by reference to (h), that is to say the words ‘such an agreement’ in s 588FF(1)(i) should be read with reference to the words ‘an agreement constituting, forming part of, or relating to, the transaction’ in s 588FF(1)(h). 
29	I agree it is appropriate that as s 588FF(1)(i) requires that the variation take effect ‘at and after a specified later time,’ (in the plaintiffs’ proposal 14 days is nominated) and for there to be a mechanism notifying affected parties of this as the plaintiffs propose but I am not prepared to make an order that the third parties have to apply to the Court that the orders will not apply to them.  As discussed at the hearing of this matter on 30 May 2022, if the third parties in question do not wish to be involved in a contractual relationship with Intellicomms, the Court cannot impose an obligation on them to do so and I will not make an order which the plaintiffs propose in paragraph 8 of their proposed orders.  I think it is implicit that affected third parties agree to the variation being imposed on TF to vary the identity of the contracting party to Intellicomms and I do not consider it appropriate to add the words ‘conditional upon the consent of the affected third party’ put up by TF.  For clarity, the orders I will make in respect of the so-called affected third parties will be as follows:
[6]	On and from 14 days from the date of this order, any contracts between the defendant and any person who was at any time previously a customer of the third plaintiff (affected third party) which are in existence as at the date of this order are hereby varied so that:
a.	any clause prohibiting assignment by the defendant is deleted; and
b.	the defendant is replaced as a party to that agreement by the third plaintiff.
[7]	The defendant is to provide a list of affected third parties to the plaintiffs within two business days after the making of this order.  
[8]	The plaintiffs are to serve a copy of this order by email or other electronic communication on each affected party within one business day of receiving the list from the defendant under paragraph [7].
30	TF sought an undertaking from the plaintiffs to repay to it the purchase price of $20,727.18 ‘held on trust pending the outcome of the proceeding as referred to in paragraph [13] of the affidavit of Glenn Franklin sworn 28 October 2021.’  The plaintiffs accept that by reason of the Sale Agreement having been declared void, such monies should be repaid to TF.  In the course of argument at the hearing on 30 May 2022 I indicated that it might as well be in the form of an order and Mr Evans, senior counsel for the plaintiffs, did not resist that.  Accordingly, I will order that the plaintiffs pay to TF the sum of $20,727.18 held on trust pending the outcome of the proceeding as referred to in paragraph [13] of the affidavit of Glenn Jeffrey Franklin sworn 28 October 2021. 
31	The parties were essentially ad idem on the question of the appropriate order as to costs and in the course of the hearing on 30 May 2022 it was agreed that the appropriate order as to costs was that:
The defendant pay the plaintiffs’ costs of the proceeding from 15 October to date on a standard basis.
By way of explanation, the inclusion of the words ‘to date’ is designed to only include those costs of the proceeding incurred from the commencement of the proceeding on 15 October 2021 to date.  It may well be that the plaintiffs may at a future time pursue other forms of relief in respect of which they have reserved their position.
32	I will also order that there be liberty to apply.
33	For completeness, I will set out the orders made on 3 June 2022.
THE COURT DECLARES THAT:
1	The sale of business agreement between the third plaintiff and the defendant dated 8 September 2021 (‘Sale Agreement’) is a creditor-defeating disposition within the meaning of ss 588FDB and 588FE(6B) of the Corporations Act 2001 (Cth) (the ‘Act’).
2	The Sale Agreement was void at and after the time it was made.
THE COURT ORDERS THAT:
3	The defendant is to deliver up to the third plaintiff all of the property of the third plaintiff the subject of the Sale Agreement, forthwith.
4	Further to paragraph 3 above, the defendant is to do all things necessary to transfer to the plaintiffs forthwith, all items of intellectual property transferred to the defendant pursuant to the Sale Agreement including but not limited to:
(a)	each of the following business names listed in item 1 of Attachment D to the Sale Agreement:
(i)	EZISPEAK INTERPRETING ON DEMAND
(ii)	Ezispeak
(iii)	Interpreting on Demand – Chat
(iv)	Interpreting on Demand – Phone
(v)	Interpreting on Demand – Voice
(vi)	Interpreting on Demand – Web
(vii)	Language Line
(viii)	On demand interpreters
(ix)	On demand interpreting
(x)	On Demand Phone Interpreters
(xi)	On Demand Telephone Interpreters
(xii)	On Demand Telephone Interpreting
(xiii)	On Demand Video Interpreters
(xiv)	On demand video interpreting
(xv)	Real Time Interpreters – Voice
(xvi)	Real Time Interpreting – Voice
(xvii)	Real Time Phone Interpreters
(xviii)	Real Time Phone Interpreting
(xix)	Real Time Telephone Interpreters
(xx)	Real Time Telephone Interpreting
(xxi)	Real Time Video Interpreters
(xxii)	Real Time Video Interpreting
(xxiii)	TIS On Demand (Telephone Interpreting Service)
(xxiv)	TIS On Demand
(b)	the domain names listed in item 2 of Attachment D to the Sale Agreement:
(i)	www.ezispeak.com.au
(ii)	www.ezispeak.nz
(iii)	bi360ezispeak.com.au
(iv)	ezispeak.com
(v)	ezispeak.uk
(vi)	realtimeinterpreters.com.au
(vii)	reatimeinterpreting.com.au
(viii)	ondemandinterpreter.com.au
(ix)	ondemandinterpreters.com.au
(x)	ondemandinterpreting.com.au
(xi)	ezispeak.com.au
(xii)	languageline.com.au
(xiii)	loop-line.com.au
(xiv)	ezi-speak.com.au
(xv)	unifycx.com.au
(xvi)	myhealthinterpreter.com.au
(xvii)	interpretanywhere.com.au
(xviii)	language-loop.com.au
(xix)	localiz-cx.com.au
(xx)	interpreterzondemand.com.au
(xxi)	localizcx.com.au
(xxii)	localizcx.net.au
(xxiii)	localizeit.com.au
(xxiv)	interpretnow.com.au
(xxv)	myvirtualinterpreter.com.au
(c)	the email addresses listed in item 5 of Attachment D to the Sale Agreement:
(i)	@ezispeak.com.au
(ii)	@ezispeak.nz
(d)	any social media accounts as referred to in the definition of “Intellectual Property” in clause 1.1 of the Sale Agreement;
(e)	any registered and unregistered designs as referred to in the definition of “Intellectual Property” in clause 1.1 of the Sale Agreement;
(f)	any registered and unregistered trade marks as referred to in the definition of “Intellectual Property” in clause 1.1 of the Sale Agreement;
(g)	any registered and unregistered copyright as referred to in the definition of “Intellectual Property” in clause 1.1 of the Sale Agreement;
(h)	any telephone numbers used for the ezispeak business, including but not limited to 1800 796 518;
(i)	the software licences listed in item 10 of Attachment D to the Sale Agreement.
5	The defendant is to do all things necessary to transfer the shares in Intellicomms NZ Limited to the third plaintiff forthwith.
6	On and from 14 days from the date of this order, any contracts between the defendant and any person who was at any time previously a customer of the third plaintiff (‘affected third party’) which is in existence as at the date of this order are hereby varied so that:
(a)	any clause prohibiting assignment by the defendant is deleted; and
(b)	the defendant is replaced as a party to that agreement by the third plaintiff.
7	The defendant is to provide a list of affected third parties to the plaintiffs within two business days after the making of this order.
8	The plaintiffs are to serve a copy of this order by email or other electronic communication on each of the affected third parties identified by the defendant under paragraph 7 within one business day of receiving the list from the defendant under paragraph 7.
9	The plaintiffs are to pay to the defendant the sum of $20,727.18 held in trust pending the outcome of the proceeding as referred to in paragraph [13] of the affidavit of Glenn Jeffrey Franklin sworn 28 October 2021.
10	The defendant is to pay the plaintiffs’ costs of the proceeding from 15 October 2021 to date on a standard basis.
11	Liberty to apply.

SCHEDULE OF PARTIES

		
	S ECI 2021 03635	

BETWEEN:		

GLENN JEFFREY FRANKLIN as Joint and Several Liquidator of INTELLICOMMS PTY LTD (IN LIQUIDATION)
(ACN 153 181 367)	First Plaintiff 	
		
PETR VRSECKY as Joint and Several Liquidator of INTELLICOMMS PTY LTD (IN LIQUIDATION) 
(ACN 153 181 367)	Second Plaintiff	
		
INTELLICOMMS PTY LTD (IN LIQUIDATION) 
(ACN 153 181 367)	Third Plaintiff	
		
- v -		
		
TECNOLOGIE FLUENTI PTY LTD (ACN 653 110 582)	Defendant