This week’s TGIF considers the decision in Mujkic Family Company Pty Ltd v Clarke & Gee Pty Ltd [2018] TASFC 4, which concerns a rather novel issue – whether a solicitor acting for a shareholder might also owe a duty of care to the company in liquidation.

What happened?

In 2015, the Supreme Court of Queensland ordered that the corporate trustee of a family trust be wound up.

Summary

Parties that withhold from serving a Statement of Claim and then seek an extension of time to do so, without a 'good reason' for an extension being granted, run the risk of the claim not being renewed and being dismissed in its entirety.

This is a lesson learned the hard way by a liquidator in three recent concurrent, interrelated proceedings in the Supreme Court of Queensland.

Background to the claims

InLongley v Chief Executive, Department of Environment and Heritage Protection [2018] QCA 32, the Queensland Court of Appeal has clarified the ability of liquidators to disclaim onerous property, including obligations that arise in respect of that property under State environmental legislation.

In our March 2012 Insurance Update we considered the potential widening of the scope for creditors to claim damages against a director personally for contravention of the Corporations Act 2001 (Act). The Supreme Court of Queensland awarded Phoenix Constructions over $1.2 million in damages against Mr McCracken for contravention of s 182 of the Act. This decision, a first of its kind, was appealed by Mr McCracken.

Key Points: The High Court held there was no variation in the terms of the Charge and therefore no registration was required.

On 1 September 2010 the High Court handed down its much anticipated decision in the appeal from the Queensland Court of Appeal in Re Octaviar Ltd (No 7) [2009] QCA 282, unanimously dismissing the appeal in Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd [2010] HCA 29.

The fixed and floating charge

Court of Appeal Clarifies the Tension Between Disclaimed Property and State Based Laws

On 9 March 2018, the Queensland Court of Appeal overturned the controversial first instance decision of the Supreme Court in the matter of Linc Energy Pty Ltd (In Liquidation).[1]

The Court of Appeal’s judgement is significant, as it clarifies the position regarding:

The Queensland Court of Appeal has upheld an appeal by the liquidators of Linc Energy Limited (In Liquidation) (“Linc”) and given full effect to their disclaimer of contaminated mining property and onerous obligations the subject of an environmental protection order (“EPO”) issued by the Queensland Department of Environment and Science (“DES”).[1]

The Queensland Court of Appeal has unanimously allowed an appeal by the liquidators of Linc Energy Limited (Linc Energy), holding it was possible to use a disclaimer notice to avoid the consequences of an environmental protection order (EPO) issued under the Environmental Protection Act 1994 (Qld) (EPA).

This week’s TGIF considers the decision of Simpson & Anor v Tropical Hire Pty Ltd (in liq) [2017] QCA 274 in which the Queensland Court of Appeal considered whether a disposition of property by a company after the commencement of its winding up was void

BACKGROUND

Mr Simpson was the sole director and shareholder of Tropical Hire Pty Ltd (company). It had operated a successful business until that business was sold in 2009. After the sale, the company did not trade.

Since the landmark decision in Re Solfire Pty Ltd (In Liq) (No. 2) [1999] 2 Qd R 182, the Queensland Supreme Court has often marched to its own tune when reviewing applications for insolvency practitioner remuneration and disbursements. In two related decisions arising from the insolvency of LM Investment Management and managed investment schemes of which it is responsible entity, the Court has now turned its attention to the controversies in this area over proportionality and access to trust assets with which its counterparts in New South Wales have grappled over the last 18 months.