Bruce Gleeson.
Creditors of controversial and assetless ex-formworker Dalma Form Specialist Pty Ltd (DFS) breathe easy, unless you’re a related party creditor who opposed the application to terminate the DFS DoCA, the creditor who made the application or the creditor who supported it. One way or another you lot just got stung.
Such was the outcome when the parties in the DFS deed termination proceedings turned up before Justice Brigitte Markovic yesterday to learn what her honour had made of their submissions on costs.
No less than five counsel were on hand to hear her decision. John Gooley and Peter Gray SC appearing for the Chief Commissioner of State Revenue, Karen Petch for supporting creditor the Deputy Commissioner of Taxation, Daniel Krochmalik for DFS liquidators Bruce Gleeson and Daniel Soire and John Anderson for DFS and the related party creditors whose votes had put the company into DoCA in the first place, despite Gleeson and Soire recommending that it be wound up.
First up her honour said she was mindful that the costs incurred in the proceedings which saw the DFS deed of company arrangement (DoCA) set aside didn’t significantly lower the reservoir of funds potentially available to creditors for a distribution.
What she did not say was that the level of the reservoir was conditional on its capacity to slake the thirst for fees and disbursements of the former deed administrators and their lawyers.
If the Jones Partners pair hadn’t declined to admit the Chief Commissioner’s proof of debt for full value in the first place a lot of expense could’ve been avoided but the Chief Commissioner has some responsibility to bear there given the tardy way it responded to the administrators’ queries about the status of the amounts claimed in the proof prior to the second meeting.
In the face of such uncertainty Gleeson and Soire acted in accordance with legal advice sourced – at some expense it should be said – from Polczynski Robinson Lawyers and Wentworth Chambers’ Danielle Woods.
For Gleeson and Soire, their key concern in respect of the termination application was reputational.
Both Commissioners had made allegations in respect of the administrators’ treatment of the Chief Commissioner’s proof of debt and her honour ordered that the commissioners pay the costs Gleeson and Soire incurred in responding to those allegations, which were not pressed at the hearing.
Petch’s client was also ordered to pay its own costs.
Outside of that Gleeson and Soire’s costs of the applicaiton will be costs in the liquidation.
The clients of Anderson’s instructor – all related entities linked to or controlled by the individuals associated with DFS and its wider corporate group – were ordered to pay the Chief Commissioner’s costs. Maybe Gillis Delany managing partner David Newey will offer to waive his fee?
Further reading:
Dalma DAs reach winding up the hard way
Estimate or Assessment key to proof of debt dispute
ATO told to stop riding on Revenue NSW’s coat tails
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