Cameron Woodcroft.
When lawyers succeed in replacing a resistant liquidator look out. The prospect of indemnity costs occupies the frontal lobes so completely avidity flows like venom.
“Any suggestion by the plaintiffs that the liquidator defended the proceeding in his own interests, rather than those of the creditors is rejected. There is no evidence to bear out that suggestion or submission. As the liquidator submits, he took the position he did because he considered his decision was correct.” Justice Brigitte Markovic.
And of course, not just any indemnity costs. Emboldened by the magnitude of the victory that a removal order represents, it’s also certain the lawyers for the successful party will ensure that their instructions are to press for orders requiring those indemnity costs to be paid personally by the outcast practitioner, without recourse to the assets which secured his or her indemnity.
Happily for liquidator Cameron Woodcroft, his pursuers in the case of Sunshine Contracting Group Pty Ltd (SCG) have fallen short and like so many such outcomes, it all turns on the timing.
Woodcroft was removed as liquidator of SCG in December after certain creditors commenced proceedings in the Federal Court challenging adjudications of their proofs of debt ahead of a meeting of creditors held on July 5, 2025.
Had those proofs been admitted for their full amount and voted as intended the resolution put at the meeting to replace Woodcroft would have succeeded.
Woodcroft then chose to defend the proceedings, lost and the plaintiff creditors got the result they, or at least their lawyer wanted, being the appointment as liquidators of SCG of Ed Narayan and Domenic Calabretta of Mackay Goodwin. Incidentally, Calabretta’s brother Stefano is the plaintiff’s lawyer.
During the proof of debt proceedings the plaintiffs produced additional evidence demonstrating the legitimacy of the amounts claimed.
But in Zong v Woodcroft (liquidator), in the matter of Sunshine Contracting Group Pty Ltd (in liquidation) (Costs) [2026] FCA 150 Federal Court judge Brigitte Markovic this week decided that while the successful plaintiffs should get their costs the Pilot Partners partner shouldn’t be stripped of his indemnity because the circumstances were insufficiently exceptional to warrant such an order.
“The plaintiffs submit that this is a case where the liquidator provoked the litigation by rejecting their proofs of debt and requiring them to correct the incorrect decisions he made via the commencement, and ultimately resolution, of the proceeding,” the judge said.
“In my view this is not a case where the liquidator provoked the litigation such that he should not be afforded the protection of the need on the part of the plaintiffs to show “exceptional circumstances” before there is a departure from the usual rule.
“The liquidator made his initial decision on the plaintiffs’ proofs of debt based on the material that was before him at the time. The resolution as to his removal and replacement did not pass at the meeting. That is, other creditors did not vote in favour of the resolution.
“The plaintiffs then commenced this proceeding. They filed more complete evidence in support of their claim to that first relied on before the liquidator.
“In those circumstances it cannot be said that the liquidator provoked the proceeding. The fact that the liquidator did not call for additional material at the time of the meeting to support the claims made in the proofs of debt does not change my view. It was for the plaintiffs to provide sufficient material to support the debts claimed in their proofs of debt.”
Her honour concluded that a liquidator chairing a meeting isn’t at fault if he or she doesn’t encourage creditors to provide further evidence to shore up a claim in a proof of debt.
Such an obligation could create a new potential avenue of dispute in respect of how long an adjournment should be granted, or how often.
And as the SCG matter shows, creditors don’t necessarily become easier to deal with just because their nominee gets appointed, as demonstrated by the February 2, 2026 Outcome of a Proposal without a Meeting notice lodged recently by Narayan and Calabretta.
The pair sought creditor approval for $150,000 in future remuneration. The creditors refused.
Further reading:
The fact that creditors refused the remuneration claim by the previous liquidator does not mean he is without the ability under Div 60 IPSC to make application to the Court for approval.
The judgment is consistent with previous authorities.