Liquidators rebuked, Lawyer blamed

It’s an unofficial rule in news publishing that every error making it into print is the fault of the sub-editors, whose imperious and all-knowing eyeballs are expected to impose perfection upon the barely coherent scribblings of their inferiors, the reporters.

“I am of the view that this is one of those occasions where unreasonable conduct on the part of the plaintiffs or their solicitors makes it appropriate that an indemnity costs order be made.” Justice Katrina Banks-Smith.

After more than 10 years covering the world of registered liquidators it seems to iNO that lawyers occupy a similarly invidious position, one recently illustrated by the decision of Federal Court judge Katrina Banks-Smith in Modco Residential Pty Ltd (in liq) v Nextruss Steel Pty Ltd (No 2) [2026] FCA 283, which involved an application for summary dismissal.

The application was brought by three parties previously identified by the liquidators of Modco Residential Pty Ltd (Modco) as being recipients of unfair preferences.

Identified they were. Pursued with zeal they were not.

Despite commencing proceedings in 2024, progress stalled after the liquidators – Richard Albarran and Cameron Shaw – corrected a failure to obtain appropriate orders for joinder in May 2025. Regrettably, her honour did not in her judgment identify who was at fault for the lapse.

Seven months passed without event.

Then, on December 12 the defendants’ solicitors sought clarity, in her honour’s words emailing “the plaintiffs’ solicitor on the record, using the email address provided and on the court record, expressing concern about the delay in prosecution of the claims and reserving the defendants’ right to apply for dismissal of the proceedings”.

The plaintiff’s solicitor on record was Christine Kennedy, presently of RA Lawyers though when the proceedings were commenced Kennedy was at Dean Alexander’s Nicholas Black Lawyers.

An email iNO sent to Kennedy seeking comment was unresponded to as at time of publication.

Perhaps explaining why emails were not necessarily reaching their recipient at the time, Nicholas Black Lawyers was acquired by Rostron Carlyle Rojas Lawyers (RCR Lawyers) only to be regurgitated in mid-2025 so it could be folded into Paul Rojas’s spin off RA Law Group where Kennedy now resides as special counsel.

Her honour is mute on whether the defendants’ solicitors copied in Albarran and Shaw or whichever Hall Chadwick staffer was identified as the contact for the liquidators.

The December 12, 2025 email went unanswered. Further communications to a new email address for the lawyer sent in late January 2026 also went unanswered as did a phone message left with the receptionist at the solicitor’s office on January 28.

During the course of February both the defendants’ solicitors and the courts sought to give the plaintiffs and their lawyer notice via email that the application for summary dismissal was on foot and a hearing date of March 17 had been set. Crickets.

Then, on March 16 the plaintiffs’ lawyer filed a notice of change of solicitor. But her honour viewed it as something less.

“In fact, the solicitor on the record remained the same but had changed firms, and updated address details were provided. The updated email address for the solicitor was the email address utilised by the defendants’ solicitor and the Court from 6 February 2026 onwards,” she said.

On the day of the hearing Albarran and Shaw’s lawyer filed an affidavit intended to provide reasons for the delay. Her honour was not favourably inclined.

“The content of the affidavit was general in its nature. It referred to a member of staff of Hall Chadwick with daily carriage of the matter having left the firm in mid-2025,” she said.

“The second plaintiffs are partners of Hall Chadwick. That evidence says nothing about why the second plaintiffs, being liquidators and officers of the Court, did not diligently re-allocate the matter or indeed seek to assume the carriage of it themselves.

“After all, the liquidators would be expected to remain responsible for decisions relating to the proceeding. It says nothing as to the lack of any step in the proceeding between mid-2025 and 17 March 2026.”

The lawyer’s affidavit also referred to a partnership split in mid-2025 which had disrupted her work patterns. The judge took it as an invitation to opine on the adequacy of the arrangements put in place to deal with the split.

“I accept that this event may have caused some disruption, but I also assume that, as solicitors, the respective partners had contingencies in place to ensure their clients’ interests were protected. Such contingencies presumably included the checking and forwarding of emails. Otherwise, it is hard to imagine how clients’ interests were protected,” she said.

If the affidavit was unconvincing worse was to come, at least for Albarran and Shaw’s hapless representative.

At the hearing the judge asked her if the January 28 phone message from the defendants’ solicitors had been passed on. She admitted it had been. And the email from the defendants’ solicitor of February 6? Yep. Got that too.

No explanation however was offered for why there’d been no response to the defendant’s solicitors telephone call of January 28 and their email of February 6 until March 16, one day before the hearing, though the judge said “she properly apologised to the defendants’ solicitor and the Court in relation to the events I have described and acknowledged the position of the defendants”.

So what was that position? The defendants, and the court, had proceeded on the basis that there would be no appearance by the plaintiffs opposing the application for summary.

When the day came though, true to form the court heard the liquidators wanted the application dismissed and their costs.

The judge however concluded that Albarran and Shaw should be reminded that they live on the same planet as the rest of us by ordering that whilst the application for summary dismissal should itself be dismissed, the defendants’ costs should be payable by the liquidators, and on an indemnity basis. Their lawyer indicated she was in the court’s hands.

As the great American comic Jackie Gleason was wont to say: “How sweet it is!”