Sozou (liquidator) v ACN 608 767 942 Pty Ltd, in the matter of SSG NSW Pty Ltd ACN 637 378 333 (in liq) [2026] FCA 531

Sozou (liquidator) v ACN 608 767 942 Pty Ltd [2026] FCA 531 is a Federal Court decision about procedure in insolvency recovery litigation. The liquidators filed one proceeding against many defendants to recover money said to be owed back to a company in liquidation. The question before Lee J was not whether the money was actually recoverable. The question was whether the Court should allow the defendants to be joined in the one case.

Lee J granted leave nunc pro tunc to join the second to forty-sixth defendants. His Honour did so in light of earlier authority suggesting that rule 9.02 of the Federal Court Rules may not, by itself, authorise a single proceeding against multiple separate defendants in this kind of insolvency setting. The judgment is important because it shows the Court using broader procedural powers and the overarching purpose of efficient case management to allow the combined proceeding to continue.

The plaintiffs were liquidators connected with SSG NSW Pty Ltd (in liquidation). They sought to recover money from multiple recipients. Lee J noted that this kind of proceeding is well familiar in insolvency practice. Liquidators often bring claims under section 588FF of the Corporations Act to recover unfair preferences, although the available relief is not limited to that category.

The matter came before Lee J as duty judge because the plaintiffs wanted leave to join multiple defendants to one proceeding. That request reflected an existing procedural practice. Earlier cases had created concern that, if a liquidator simply filed one proceeding against many separate defendants, the proceeding might later be challenged as improperly constituted. To avoid that risk, liquidators commonly sought joinder orders under rule 9.05.

Lee J said this matter was somewhat unusual. Based on oral submissions, the proceeding involved 46 claims concerning money allegedly 'flushed out' of the company to various recipients. Thirty-six claims involved allegations of an underlying uncommercial transaction, with statutory relief sought together with relief for moneys had and received. For the balance of the defendants, there was no allegation of an underlying uncommercial transaction, but the plaintiffs still sought relief for moneys had and received.

That distinction matters. The claims were not all identical. Some were framed as statutory insolvency claims plus a restitutionary claim. Others were framed only as restitutionary claims. Lee J also observed that, unlike some multi-defendant insolvency cases, this was not obviously a case with one clear common issue spanning every claim, such as a dispute about the date of insolvency.

The legal background came from earlier authority, especially Dudley (Liquidator) v RHG Construction Fitout & Maintenance Pty Ltd and Jahani v Alfabs Mining Equipment Pty Ltd. Those cases reflected the view that rule 9.02 of the Federal Court Rules did not authorise a single proceeding against multiple defendants where the alleged payments, and the agreements or arrangements under which they were made, were unique to each defendant.

The key wording in rule 9.02 concerns whether the rights to relief arise out of the same transaction or event or series of transactions or events. Lee J noted that the current rule refers to an 'event' or 'events', which differs from older wording considered in earlier authorities. His Honour also pointed out that the civil justice reforms introduced section 37M of the Federal Court of Australia Act, which requires civil practice and procedure provisions to be interpreted and applied in a way that best promotes the overarching purpose of resolving disputes justly, quickly, inexpensively and efficiently.

Even so, Lee J considered it necessary to follow Jackson J's decision in Dudley. His Honour said there may be room to think differently about the proper construction of the current rules, especially given section 37M(3), but the existing authority had shaped the present practice and was likely to continue to be followed unless changed by later authority or by rule reform.

Lee J was openly critical of the cost generated by this procedural position. His Honour described it as unsatisfactory that parties continue to spend money on applications of this type and suggested the issue should be looked at by the Court's Rules Committee.

Lee J granted the plaintiffs leave nunc pro tunc to join the second to forty-sixth defendants listed in the schedule to the originating process. The proceeding was also referred to the National Operations Registry for allocation to a docket judge.

The reasoning is important. Although the plaintiffs sought relief under rule 9.05, Lee J said he also proposed expressly to rely on rules 1.31 and 1.32. Rule 1.31 allows the Court to make orders having regard to the nature and complexity of the proceeding. Rule 1.32 allows the Court to make any order the Court considers appropriate in the interests of justice. His Honour considered those powers, together with rule 9.05, sufficient to support the order.

A significant factor was the absence of likely prejudice to the proposed defendants. Lee J stressed that the matter had only come before him as duty judge and would later be docketed to another judge. Nothing in his order would fetter the docket judge's discretion in managing the proceeding. Individual defendants could still seek separate trials or make other applications about the effect of the joinder order. The order had been made ex parte, but that did not stop later case-management steps tailored to particular defendants.

Lee J also explained why one combined proceeding might save time and cost. For example, a liquidator might be able to rely on one affidavit in evidence-in-chief setting out amounts allegedly paid to many individuals, and that evidence could then be used across multiple claims. His Honour said it was easy to imagine significant savings in court time and party cost if one mother proceeding were allowed to continue, even if separate trials of individual issues later became necessary.

This is the most important limit on the case. The judgment did not decide the merits of the underlying claims. It did not determine whether any payment was an unfair preference. It did not determine whether any alleged uncommercial transaction occurred. It did not determine whether any defendant was liable for moneys had and received. It did not decide whether there was, in the end, a common issue of law or fact that would justify one final hearing for all claims.

Instead, the decision is about whether the proceeding could be constituted and managed as one case at the outset. That is why the judgment is commercially important but legally narrow. It affects how litigation may be organised, not whether the liquidators are right on the substance.

For business owners, this distinction matters. A procedural loss on joinder does not mean a defendant has lost the real case. Equally, a liquidator's success in getting defendants joined together can still create practical pressure, because it may reduce the liquidator's costs and allow the claims to move forward in a coordinated way.

If your business received money from a company that later entered liquidation, this case shows that you may be sued as part of a broader combined proceeding rather than in a stand-alone action. That can affect the pace of the dispute, the way evidence is organised and the commercial pressure to respond quickly.

The case also shows that liquidators may frame claims in more than one way. Here, some claims involved alleged uncommercial transactions plus moneys had and received, while others involved only moneys had and received. In practical terms, that means a defendant should not assume the claim will fit neatly into one familiar insolvency category. The pleading may combine statutory and non-statutory causes of action.

For directors, founders and finance teams, the strongest practical response is usually documentary. Keep and preserve contracts, invoices, proof of supply, board or management approvals, payment instructions, correspondence explaining the transfer and any evidence showing what value was given in return. If the payment was unusual in timing, amount or purpose, the explanation should be especially clear.

This decision also suggests that procedural objections alone may not stop a liquidator from grouping claims together. Even where earlier authority creates uncertainty under the joinder rule, the Court may still rely on broader powers to allow the combined proceeding to continue. That means businesses should prepare both a procedural response and a merits response, rather than assuming a technical point will end the matter early.

The judgment itself does not decide the merits, but it gives a clear practical signal about the kinds of material that become important when a liquidator pursues recovery claims across many defendants. Because a combined proceeding can be run efficiently, defendants may need to explain their position early and clearly.

Useful documents commonly include the contract or arrangement under which the payment was made, invoices, delivery records, timesheets, remittance advices, bank records, internal approvals, board minutes, emails and messages explaining the purpose of the transfer, and any reconciliation showing how the amount was calculated. If the payment was made to a related party, consultant or intermediary, the commercial rationale should be especially well documented.

Conduct also matters. Round-dollar transfers, urgent last-minute payments, undocumented reimbursements, payments inconsistent with ordinary trading terms, or transfers made while the payer was under obvious financial stress may attract closer scrutiny. That does not mean the payment is automatically recoverable. It means the business should be ready to explain the transaction with evidence, not assumption.

The judgment was delivered by Lee J on 17 April 2026 in the Federal Court of Australia. It was an ex tempore judgment revised from the transcript. The orders granted leave nunc pro tunc to join the second to forty-sixth defendants and referred the proceeding to the National Operations Registry for allocation to a docket judge.

Because the reasons deal only with the joinder application, the public record described here does not provide a final outcome on the underlying recovery claims. The proceeding was allowed to continue, but the merits remained to be determined later, subject to whatever case-management directions the docket judge considered appropriate.

This page is based on the Federal Court judgment in Sozou (liquidator) v ACN 608 767 942 Pty Ltd, in the matter of SSG NSW Pty Ltd ACN 637 378 333 (in liq) [2026] FCA 531. The reasons identify the procedural issue, the orders made, the authorities discussed and the Court's explanation for allowing the joinder order.

The reasons do not provide a full narrative of each underlying transaction or a final determination of liability. For that reason, this page explains the procedural significance of the case and the practical implications for businesses, rather than presenting it as a final merits decision.