Liquidator’s defence “sharp” and “artificial”

What’s the world come to when a dispenser of justice prefers the evidence of a recruitment consultant over that of a registered liquidator? End of times is what.

Probity. Integrity. Acting at times as officers of the court. Liquidators are rightly held to a high standard.

The reputation of recruitment consultants meanwhile has journalists and lawyers hastening to stand by their sides so their own soiled patinas will contrast favourably.

Yet let week a Magistrate in West Australia delivered a judgment that capsizes accepted wisdom, finding in a dispute between a recruitment consultant and the senior partner of a national accounting and insolvency firm that the recruiter’s evidence should be preferred.

The dispute revolved around the circumstances that preceded the placing of liquidator Tom Birch with the West Australian division of Cor Cordis in 2022.

Birch was a Ferrier Hodgson veteran absorbed by KPMG in the wake of its 2019 takeover.

But in 2020 Cor Cordis WA partner Jeremy Nipps was on the hunt for staff and turned to recruiter Nadine Lewis.

According to the September 8 judgment of West Australian Magistrate Martin Crawford, Lewis and Nipps met at The Reveley café on Perth’s Riverside Drive on August 5, 2020 to discuss placements, during which Lewis relayed her terms including her fee structure.

Under Lewis’s terms of business – which the court found she had provided to Nipps at the meeting – the success fee comprising 23 per cent of salaries in excess of $150,000 was to be paid within 14 days of a placement being accepted.

Nipps asked for eight candidates, interviewed six and offered employment to a Curtin University accounting graduate who accepted Nipps’ offer of an analyst’s role for $61,000 per annum.

According to Magistrate Crawford Nipps paid Lewis’s fee of $10,736, being 16 per cent of the value of package ($9,760) plus GST without objection.

In October 2021 Birch contacted Lewis and asked if she had any clients seeking to employ an experienced insolvency practitioner and registered liquidator.

On October 25 Lewis arranged for Birch to be interviewed by Nipps on the 27th. But on October 29 Nipps asked Lewis for Birch’s contact details, saying he preferred to conduct his own reference checks and make his own arrangements with the candidate.

Lewis obliged and heard nothing more until February 2022 when Birch told her Nipps had offered him a job with a salary of $250,000 per annum starting on March 1.

When Lewis sought to contact Nipps to confirm the salary and fee he told her he wasn’t employing Birch, he was employing Tacob (WA) Pty Ltd in its capacity as trustee for the Birch Family Trust.

On or around March 1 and in accordance with the Terms of Business, Lewis invoiced Nipps for $63,250.

Nipps refused to pay, arguing that even if it was found that he had been made aware of the recruiter’s terms of business her commission wouldn’t apply because Birch wasn’t being paid a salary, an argument the Magistrate described as “quite artificial and sharp”.

“Mr Nipps’ evidence in cross-examination as to whether the terms were produced and discussed went from unequivocal and adamant (unqualified answers of “no”) to equivocal and uncertain (“possibly”, “she could have” and “that’s a possibility”),” the Magistrate said.

He also said Nipps’ was “evasive” in his dealing with Lewis and his evidence in cross-examination “Vague” and “inconsistent”.

The Magistrate on the other hand was in no way evasive. Crawford said he preferred the recruiter’s version of events over the liquidator’s and invited submissions on interest and costs. Nipps did not respond to a request for comment.