Court refuses bid to offload costs onto creditors

A federal court judge who was prepared to invoke the S532(2) exception so as to allow a number appointments to remain under the control of members of the Hall Chadwick partnership was not prepared to allow the costs of the exercise to be borne by the affected creditors.

In Crispino (liquidator), in the matter of Universal Steel Pty Ltd (In Liquidation) [2026] FCA 711 Justice Roger Derrington was asked to approve the retirement of Hall Chadwick partner Rob Crispino from his role as liquidator of five entities and approve the appointment of Hall Chadwick’s Richard Albarran and Nick Wollinski as his replacements.

Crispino has defected to Worrells and the timing of his departure would seem related to the arrival at Hall Chadwick of Renee Di Carlo, who comes to the Victorian office Crispino’s vacated after an 18 month stint at Rodgers Reidy.

The application was brought before Justice Roger Derrington on May 26, three days prior to the date on which Crispino’s resignation from Hall Chadwick was to take effect.

Apart from the prohibition under S532(2) and the costs issue his honour wasn’t required to exercise his mind unduly.

In terms of S523(2), while it was true that Hall Chadwick had become, over the course of the five liquidations, a creditor in each for sums well in excess of the $5,000 threshold, Justice Derrington decided the urgency of the application overcame any reservations, of which one was overriding.

“It is unfortunate that, in the present case, there is a paucity of evidence as to the outstanding indebtedness,” he said.

“Whilst it was suggested that the hearing be adjourned to allow such evidence to be adduced, that did not seem appropriate in circumstances where (a) the cost of doing so would be borne by creditors, and (b) the application was made on an urgent basis.

“Ultimately, notwithstanding the absence of evidence as to the indebtedness, the exceptional urgency of this application justifies the appointment of Messrs Albarran and Wollinski as replacement liquidators.

“That course obviates the time and expense associated with convening creditors’ meetings. Moreover, Mr (Luke) Hyland submitted that the failure to adduce more fulsome evidence arose from inadvertence and that it is in the best interests of creditors that the application be granted. Though the position is finely balanced, those submissions may be accepted,” the judge concluded.

Emboldened perhaps Hyland also sought orders that the costs of the application be costs in the winding up of the five companies but that too rich even for a jurists as accommodating as Roger Derrington.

“…. although Mr Hyland initially sought an order that costs be in the liquidations, that is not the appropriate course,” the judge said.

“It is noted that in Re Michael, the costs order was to the effect that the applicants bear their own costs of the application, with no recourse to or indemnity from the property of the companies under administration. A similar order ought to be made in this case.”

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