There may well have been terse words, a chilling silence, or even diverse and inclusive profanity when KordaMentha’s Craig Shepard learned last week that Hastie Group liquidator Craig Crosbie had wrangled a decisive grant of leave.
Shepherd – in his capacity as deed administrator of the Grocon Group – has been resisting efforts by PwC’s Crosbie to recover $3.66 million in drawdowns that two Grocon Group member companies made from bank guarantees provided by various Hastie Group entities.
“I am mindful of the evidence given by Mr Craig Peter Shepard (one of the Deed Administrators of the Grocon companies) that he will be unreasonably distracted from his duties to creditors and that the creditors will be prejudiced because of the costs incurred in defending these proceedings.” Justice John Middleton.
Most recently Crosbie made application in the Federal Court for leave to proceed under section 444E(3) of the Corporations Act against Grocon Constructors (NSW) Pty Ltd and Grocon Constructors Pty Ltd, each of which are currently whilst subject to the Grocon DoCA.
In spite of Shepard’s protests, which were the most interesting element of Federal Court judge John Middleton’s judgment in Hastie Group Limited (in liq) v Multiplex Constructions Pty Ltd (Formerly Brookfield Multiplex Constructions Pty Ltd) (No 2) [2021] FCA 1344 his honour last week gave Crosbie the green light.
Shepard’s protests centred around the characterisation of the liquidator’s action as a nuisance that would distract him in his functions as Grocon deed administrator and from more important duties, as his honour explained.
“I am mindful of the evidence given by Mr Craig Peter Shepard (one of the Deed Administrators of the Grocon companies) that he will be unreasonably distracted from his duties to creditors and that the creditors will be prejudiced because of the costs incurred in defending these proceedings. Mr Shepard says that:
“(a) the expenditure of funds and conduct of the litigation will diminish the return to creditors;
“(b) the Deed Administrators have been required to approach these proceedings as if it were commenced afresh and that a “substantial portion” of the steps to trial have not yet been completed, such that the Deed Administrators are concerned that they will be unreasonably distracted; and
“(c) he expects that the review and collation of the evidence is likely to be costly and time-consuming as the Deed Administrators have a “limited number of documents” collated in the file maintained for the purposes of this litigation and he believes that there will be significant difficulties in obtaining evidence and instructions from former officers of the Grocon companies.
“However, in view of the interlocutory orders made on 1 October 2021 and 27 October 2021, and the terms of the leave imposed, I consider this distraction, burden and expenditure of funds will be minimised.”
From Shepard’s perspective all wasn’t well and it’s ended worse.
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