Liquidator to pay NRL costs as summonses set aside

Sydney liquidator Andrew Needham may be ruing the day he consented to act as liquidator of a company with potential claims against the National Rugby League (NRL) in the wake of judgment In the matter of Newheadspace Pty Limited (in liq) [2020] NSWSC 173.

On Wednesday NSW Supreme Court judge Kelly Rees ordered that examination summonses issued to NRL chief executive officer (CEO) Todd Greenberg and Senior NRL Welfare and Education Manager Paul Heptonstall be set aside on the basis that the liquidation of Newheadspace Pty Ltd was an abuse of process.

Further, her honour indicated that the summonses born from that abuse were illegitimate.

Needham was ordered to pay the costs of the NRL’s application to have the summonses set aside and ordered to let the judge know within 14 days if he wants to continue as liquidator.

Further, if he wishes to continue he must, within 24 hours of notifying the judge, also advise ASIC that his removal is being considered by the Court and, within 28 days provide to the Court and ASIC any affidavits or submissions in respect of why he should not be removed under sections 90-15(3)(b) and (c) of the Insolvency Practice Schedule (IPS).

Emailing from Canada in response to iNO’s enquiries Needham said he was disappointed with the judgment but wouldn’t comment further until he had consulted with his legal team.

“the troubling and hopefully unique facts of this case have led me to conclude that, not only was the sole purpose of those standing behind the company to place it in liquidation in order to conduct, or threaten to conduct, public examinations of senior NRL officers and thereby to enhance the company’s ability to prevail upon the NRL to pay a claim, but Mr Needham does not appear to have independently turned his mind to whether the elements of section 596B of the Corporations Act 2001 (Cth) were satisfied or whether the summonses were issued for a proper purpose”. Justice Kelly Rees.

The judgment exposes a truly extraordinary saga which began in 2010 when Newheadspace first supplied NRL players with professional development training intended to help them transition to new careers and occupations after hanging up the boots.

Over time a series of misunderstandings evolved around how widely the the program would be embraced, who would pay for it and whether it had been unlawfully copied.

Before Needham was even approached Newheadspace director Jhanna Culver had conceived a claim against the NRL for $3 million comprising damages for unpaid invoices of $7,500, breaches of fiduciary duty, contract, negligence, loss of opportunity and injuries sustained to Ms Culver’s mental health.

Among those also touched in some way by this imbroglio include ex-NRL boss David Gallop and his wife Kathy, ex-Queensland Origin enforcer Michael Crocker from the Rugby League Players Association, litigation funder Doug Whelan, former News Corp journalist Mark Westfield and Clarence Stevens, a barrister who was disbarred in 2003 for neglecting to pay tax for 20 years.

Unfortunately for Needham, who was drawn in when the gig was referred to him in May 2018 by Whelan, then at Litigation Funding Solutions, he appears to be copping the worst of it with Justice Rees questioning his judgment in pursuing the summonses.

” …. the troubling and hopefully unique facts of this case have led me to conclude that, not only was the sole purpose of those standing behind the company to place it in liquidation in order to conduct, or threaten to conduct, public examinations of senior NRL officers and thereby to enhance the company’s ability to prevail upon the NRL to pay a claim, but Mr Needham does not appear to have independently turned his mind to whether the elements of section 596B of the Corporations Act 2001 (Cth) were satisfied or whether the summonses were issued for a proper purpose,” Justice Rees said.

“Rather, Mr Needham has left it to those interested in conducting public examinations, being Ms (Jhanna) Culver, the funder and legal representatives engaged before his appointment.

“He has not put his ‘stamp’ on this process but has effectively inherited the improper purpose of those who placed Newheadspace into liquidation, which has remained the predominant purpose of the processes which have continued under his name,” her honour said. Support INO’s continued chronicling of the insolvency sector.