Gladman a sad man after court orders his ousting

Gladman
Hall Chadwick’s Steve Gladman.

It has taken time but this week the NSW Supreme Court of Appeal delivered its verdict in respect of a contentious casting vote exercised by Hall Chadwick’s Steve Gladman at the second meeting of creditors of Glenfyne Farms, back on October 9, 2018.

That vote, which for practical purposes defeated an attempt by Glenfyne’s major creditor to replace Gladman as liquidator, was challenged at the beginning of this year by a major creditor who wanted an appointee without Gladman’s connection to the referrer, who had also been Glenfyne’s accountant.

On February 27, primary judge Kelly Rees of the NSW Supreme Court found no reason to criticise Gladman’s handling of the meeting, declared the application ill-founded and declined to make the orders sought.

Her reasoning is contained In the matter of Glenfyne Farms International AU Pty Ltd (in liquidation); In the matter of GI Commercial Pty Ltd [2019] NSWSC 161.

Justice Rees’ decision was however subsequently appealed and on Wednesday the Court of Appeal ruled that her honour had erred.

This meant the October 9, 2018 resolution seeking the appointment of SV Partners pair Jason Porter and Fabian Micheletto as liquidators should be upheld.

We made enquiries of Porter and Micheletto this morning in respect of whether their consent was still in force but had received no response by deadline.

The Court of Appeal’s reasons can be found at: Glenfyne International Holding Limited v Glenfyne Farms International AU Pty Ltd (in liq); Glenfyne International Limited v GI Commercial Pty Ltd (in liq) [2019] NSWCA 304 (11 December 2019).

Part of the appeals court’s deliberations canvas the actions of two creditors associated with Glenfyne director Graham Flynn.

One of them – Nick Moustacas of Strategic Wealth Management Pty Limited – had been the company accountant and was also a referrer of work to Gladman and Hall Chadwick.

Moustacas lodged a proof of debt with Gladman for $1,100.00 and declined an offer from the applicant creditor to sell it for 100 cents in the dollar.

The director’s lawyer Tony Crilly lodged a PoD for an identical amount and was similarly disinclined to sell for full value prior to the meeting.

Justice Andrew Bell of the Court of Appeal referred to the issue in his reasons.

“… in my opinion, and without suggesting anything untoward on the part of Mr Moustacas or Mr Gladman, it is tolerably clear that the various matters referred to by Mr Rayment relating to the adjustment of accounts and the reimbursement of business expenses of the partnership would, prima facie, call for the investigation of a liquidator,” he said.

“That investigation may produce perfectly clear explanations as to each of the transactions referred to but, that having been said, I agree with the submission that it would obviously be preferable if those investigations were not carried out by somebody who had a professional history or association with Mr Moustacas.”

Further reading:

Casting Vote Challenged After Creditors Reject 100c/$

Casting Vote Error Not Enough To Replace Liq.

About the Author

Peter Gosnell
Insolvency News Online illuminates the practice of insolvency Australia-wide, highlighting the triumphs and travails of the nation’s registered practitioners and the accounting and legal professionals who work with them. INO is produced by Peter Gosnell, former business editor and senior business reporter at The Daily Telegraph newspaper. During a decade-long career, your correspondent reported on such notable corporate collapses as HIH, One.Tel, Westpoint and Fincorp as well as some of the nation's highest profile bankruptcies and the investigations and prosecutions arising from Australia's most notorious instances of white-collar crime.

Be the first to comment on "Gladman a sad man after court orders his ousting"

Leave a comment

Your email address will not be published.


*