You might have thought that when Perth-based litigation funder GT Capital Partners imploded last year with its founders exchanging aspersions at 10 paces, whoever was appointed to clean up the mess would have their work cut out for them.
Well as it turns out, a DoCA’s been effectuated, new directors have taken over and the Supreme Court of West Australia has just buried concerns about the validity of the DoCA and the appointments of the administrators who recommended it.
Done, dusted and nothing to see. It’s the WA way.
Reading the judgment of Supreme Court off West Australia judge Jenni Hill in Graham -v- GT Capital Partners [2023] WASC 163 we learn that “On 6 December 2022, the provisional liquidators appointed (PwC’s) (Simon) Theobald and (Robert) Ditrich as voluntary administrators (VAs) of GT Capital pursuant to s 436B of the Act.
The ProvLiqs – RSM’s Greg Dudley and Jerome Mohen – had been appointed by the courts back in September, two months after one of GT Capital’s two warring directors – Mace Turco – had commenced proceedings to have GT Capital wound up.
Through his shareholding company M2 Assets Pty Ltd, Turco had indemnified Dudley and Mohen to the tune of $100,000. During their tenure they produced a report that was immediately designated confidential by order of the court, a necessity given the incendiary allegations of criminal misconduct that have emerged in the wake of the two founders’ falling out.
In true WA fashion Theobald and Ditrich issued a DIRRI on December 6 that outlined how they’d been referred the job by Kathleen McNally’s McNally & Co Litigation which was acting for Turco’s M2 Assets.
Despite the comments of the judge there’s no reference to the ProvLiqs. Then on January 13, 2023 the administrators issued a replacement DIRRI. Again no reference to the role of the ProvLiqs in appointing them. Instead, they’d removed the reference to M2 Assets as McNally’s client.
This is despite the Minutes of the second meeting of creditors identifying that the ProvLiqs had appointed Theobald and Ditrich as VAs.
Also removed is the entire comments section that was included in their first DIRRI. Not until the Part C section of relevant relationships do the administrators identify cause to add something.
As it turns out, Theobald and Sydney-based PwC operative Melissa Humann had previously been clients of GT Capital in their capacities as liquidators of Kingshill Holdings Pty Ltd.
GT had provided litigation funding to the pair. After they were appointed the former Kingshill director Anthony Heyns commenced proceedings against GT Capital and director Colin James Graham for alleged misleading and deceptive conduct “for allowing the liquidators to settle the proceedings that it had funded”. It’s not clear how Heyns obtained leave.
Because the Heyns proceedings didn’t involve Theobald, Humann or PwC, Theobald and Ditrich reasoned that the services GT provided in its capacity as a litigation funder wouldn’t influence their ability to discharge their obligations in an impartial manner in respect of GT Capital.
At the reconvened second meeting on January 24 creditors opted the the DoCA proposed by associates of Turco over Graham’s proposal. Within weeks Graham was contacting Theobald and Ditrich – now deed administrators – demanding they convene a meeting so creditors could vote on a proposal to amend the DoCA.
When they refused Graham commenced the proceedings to have the deed terminated, arguing among other things that Dudley and Mohen had delegated their responsibility to appoint VAs to Turco’s legal advisors.
Judge Hill said there was no evidence before her to make such a finding and dismissed the proceedings in their entirety. How could she? That’s the WA way.
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