Liquidator sues lawyer over dismal documents

Whatever remained of any referral relationship that may have existed between Daniel Frisken and former Madison Marcus (MM) partner Gerard Breen breathed its last on June 9.

On that day lawyers acting for the O’Brien Palmer partner filed a statement of claim against Breen seeking damages in relation to the drafting of documentation for the E K Recruitment Pty Limited deed of company arrangement (DoCA).

“The DOCA and the Trust Deed are not well drafted. The present application seeks to resolve the drafting issues which have arisen, either by a process of construction or by Court orders varying their terms, or by a combination of those approaches.” Justice Ian Jackman.

Frisken had previously been appointed as administrator, then deed administrator and finally trustee of the EK Recruitment creditors trust.

But as the March 9, 2026 judgment of Federal Court judge Ian Jackman illustrates, the DoCA and Trust Deed were so poorly drafted they forced Frisken to court to seek a broad range of relief, and by that time the company had already passed from DoCA to effectuation, then back into administration and finally liquidation, with Rajiv Ghedia in control and of the opinion that funds Frisken was holding in the creditors trust needed to be paid to him.

The background – including the issues in respect of the drafting of the documentation – is contained in Frisken (Trustee) v E K Recruitment Pty Ltd (in liq), in the matter of E K Recruitment Pty Ltd (in liq) [2026] FCA 223.

With not inconsiderable restraint Justice Jackson says of the documentation at the centre of the dispute: “The DOCA and the Trust Deed are not well drafted.”

He then goes on to describe Frisken’s application to resolve the drafting issues which have arisen, as “either by a process of construction or by Court orders varying their terms, or by a combination of those approaches”

Unfortunately for Frisken those efforts imposed significant burdens on the other parties, burdens which on Tuesday Justice Jackson laid at Frisken’s feet, making adverse costs orders in the sum of $166,035.85c and further ordering that Frisken be denied recourse to the EK Recruitment Creditors’ Trust fund to pay those costs or his own. See: Frisken (Trustee) v E K Recruitment Pty Limited (in liq), in the matter of E K Recruitment Pty Ltd (in liq) (Costs) [2026] FCA 852.

Frisken however must have known or at least suspected that Justice Jackson’s ruling would be adverse and got busy suing Breen and for good measure Madison Marcus almost three weeks prior to the costs orders being delivered.

Ironically that’ll breathe new life into the relationship, only it won’t be a referral one.