Dead man’s ledger tells no tales

Three BDO partners have had zero luck gambling on a scantily supported claim, with the Federal Court dismissing their application for recovery of an alleged inter-company debt and ordering them to pay the defendant’s costs.

In Marsden, in the matter of Empire Consortium Group Pty Ltd (in liq) v Nationwide Plant Hire Pty Ltd [2026] FCA 911 Justice Roger Derrington found that the evidence put before him was insufficient to prove that ledger entries recording transactions between Empire Consortium Group Pty Ltd (Empire) and related entity Nationwide Plant Hire Pty Ltd (NWPH) did not reflect the true position.

“Ultimately, the liquidators appear to have made a forensic decision to advance a relatively slim case and, whilst that course may be understandable having regard to costs, it resulted in a paucity of evidence which could not be remedied by any Jones v Dunkel inference.” Justice Roger Derrington.

BDO’s Duncan Clubb, Jeff Marsden and Matthew Blum had argued that NWPH was indebted to Empire in the sum of $2,642,565.96, though this figure represented a downward revision of almost half, presented to the court at the end of the hearing in the form of an amended aide memoire.

But to advance their claim the trio had to satisfy Justice Derrington that certain entries made after the relation back date had wrongly “zeroed off” NWPH’s liability to Empire and advancing that assertion without cross examining the sole common director of Empire and NWPH ultimately meant what the ledger said stood, as the judge explained.

“the difficulty is that, save for the Ledger, there is very little direct evidence of the arrangements between the two companies,” the judge said.

“There is no written evidence of any loan agreement, nor any record of how the loan account was to operate or the terms circumscribing the indebtedness between them.

“Moreover, as mentioned, the only person with knowledge of those arrangements, Mr (Christopher) Hodgers, is deceased, and Empire also failed to keep adequate financial records,” the judge said.

The liquidators were advised by Anders Mahoney’s Century Legal, which may explain the choice to go in light, as his honour observed.

“”Ultimately, the liquidators appear to have made a forensic decision to advance a relatively slim case and, whilst that course may be understandable having regard to costs, it resulted in a paucity of evidence which could not be remedied by any Jones v Dunkel inference.”