Costs order looming over disputed proof of debt

proof of debt
Hall Chadwick’s Ginette Muller.
Grant Thornton’s
Mike McCann.

iNO hears costs north of $50,000 are likely to be ordered against Hall Chadwick’s Ginette Muller and Marcus Watters after they took a tilt in the Supreme court of Queensland at Grant Thornton’s Mike McCann and Said Jahani over a rejected proof of debt.

Back in 2018 the Hall Chadwick pair, as liquidators of Rimfire Constructions Pty Ltd, submitted a proof of debt with McCann and Jahani, who are deed administrators of CRCG-Rimfire Pty Ltd.

As is detailed in Rimfire Constructions (Qld) Pty Ltd (in liq) v CRCG-Rimfire Pty Ltd [2020] QSC 92 (1 May 2020) the proof was based on the liquidators’ view of the uncommercial nature of a transaction entered into between the two companies.

Unfortunately for Rimfire’s liquidators, McCann and Jahani rejected the proof.

More unfortunately, the Supreme Court of Queensland last week dismissed their application for orders setting aside McCann and Jahani’s rejection and for orders requiring that the proof be admitted in full.

Further, in orders obtained by iNO, the judge ordered that “the applicants pay the respondents’ costs of the application on the standard basis”.

Our spies north of the Palaszczuk line have indicated that those costs will likely exceed $50,000.

From the judgment it appears that Supreme Court of Queensland judge Glenn Martin identified problems with the evidence submitted by the liquidators’ lawyers to support the liquidators’ view that the transactions underlying their proof of debt were uncommercial.

When we contacted Muller she said she would wait to hear from her lawyers so at this point an appeal can’t be categorically ruled out. Support INO’s continued chronicling of the insolvency sector.

1 Comment on "Costs order looming over disputed proof of debt"

  1. The biggest mistake an insolvency practitioner can make is listening to lawyers and not their gut instinct and own devices.

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