One.Tel liquidator may sue Packer and Murdoch again

One.Tel's special purpose liquidator, Paul Weston, is considering fresh proceedings under the law of equity to sue allegedly conflicted directors including James Packer and Lachlan Murdoch. He told creditors this approach could potentially recover a higher sum than his earlier claim.

The NSW Supreme Court dismissed the first $250 million suit in May because extensions to the statutory limitation period for bringing the case should not have been granted, according to Justice Julie Ward’s judgment.

Yes. Paul Weston has filed an appeal against the May ruling that dismissed his initial $250 million claim.

Equitable claims are remedies available under the law of equity rather than common law. In the One.Tel context they could include alleged breaches of fiduciary duty, accessorial liability by companies connected to directors, and claims for unconscientious conduct — and a key argument is that such equitable claims may not be subject to the same statutory limitation period, potentially allowing larger recoveries.

The dismissed suit named former One.Tel directors and companies associated with them, including Consolidated Media Holdings and News Ltd. The liquidator has also identified allegedly conflicted directors such as James Packer and Lachlan Murdoch in his report to creditors.

The case related to One.Tel’s cancelled $132 million rights issue, which Consolidated Media Holdings and News Ltd had agreed to underwrite before the offering was abandoned — a central fact in the liquidator’s claims.

Justice Julie Ward dismissed the original suit because she found the extensions to the statutory limitation period should not have been granted. However, she accepted a submission that fresh equitable claims might arguably be outside those statutory limits.

For creditors and investors, the liquidator’s appeal and possible new equitable proceedings mean there may be further attempts to recover money on behalf of creditors. Those efforts could increase recoveries if successful, but outcomes remain uncertain until the appeal and any fresh claims progress through the courts.