Pentridge Village appeal fails as Court of Appeal cites years of delay, turnover of liquidators

Victoria’s Court of Appeal has upheld the dismissal of an $840 million claim brought by Pentridge Village Pty Ltd (in liquidation) and West Homes Australia, finding that the litigation’s collapse was the predictable result of years of turnover among liquidators, shifting legal teams, and chronic non-compliance with court timelines. The panel agreed that the scale and persistence of delay created serious prejudice for Capital Finance Australia Ltd (CFAL) and made a fair trial too risky to attempt.

The Pentridge Village joint venture was formed in 1999 to redevelop part of the former Pentridge Prison site in Coburg. By 2010 the project’s senior lender, CFAL, had refused to renew the facility on prior terms, leading to work stoppages, mounting defaults, and ultimately receivership in July 2014 and liquidation in August 2014. The receivers sold the site the following year, crystallizing the failure of a development that had once been funded through a facility that grew from $60 million to more than $167 million.

Once in liquidation, Pentridge Village cycled through six liquidators over the life of the lawsuit, while West Homes also changed representation several times. Each transition slowed or stalled progress as incoming appointees attempted to orient themselves in a sprawling record that stretched across decades, shifting ownership of CFAL, and thousands of documents. Those changes repeatedly interrupted momentum on pleadings, discovery, and witness preparation.

The applicants commenced the claim in June 2016 on the eve of the limitation deadline, then waited another year to serve the writ. It took nearly four years to settle a viable statement of claim. Discovery was delayed for months, witness statements were chronically late, and the applicants did not file their evidence until 11 p.m. the night before the dismissal hearing. Across liquidator changes, funding setbacks, solicitor resignations, and prioritisation of other litigation by key personnel, the Court identified more than five years of inordinate and inexcusable post-writ delay.

Although the Court of Appeal accepted that the primary judge erred by not expressly separating prejudice caused by the plaintiffs’ delay from prejudice that would have occurred regardless, it reconsidered the record and reached the same endpoint. By the time the matter could reach trial, witnesses would be tested on events 14 to 18 years old, one valuation witness had died, critical memories had eroded, and CFAL faced the ongoing burden of a massive claim tied to a project that had already failed a decade earlier. The Court also stressed that frequent interlocutory crises, driven by the applicants’ instability and delay, consumed disproportionate court resources, contrary to the Civil Procedure Act’s mandate.

Granting leave but dismissing the appeal, the Court concluded that justice required bringing the litigation to an end, given the compounding delays, the disruptive churn of liquidators and lawyers, and the significant prejudice to CFAL arising from the applicants’ protracted and disordered prosecution of the claim.

Read the decision here.

Wendy Anne Harris KC and Laila Hamzi (instructed by Gilbert + Tobin) represented CFAL, while Peter Collinson KC, Dr Charles Parkinson KC and Scott Cromb (instructed by Kingdon Lawyers) acted for Pentridge Village and West Homes.