McDonald v Dare - [2001] QSC 405

SUPREME COURT OF QUEENSLAND

CITATION: McDonald v Dare [2001] QSC 405

PARTIES: WARWICK MCDONALD
(first applicant)
and
WILLIAM DOOLAN
(second applicant)
v
TRACEY JOY DARE
(first respondent)
and
PHILLIP ARTHUR HENNESSEY
(second respondent)

FILE NO: S7863 of 2001

DIVISION: Trial Division

DELIVERED ON: 31 October 2001

DELIVERED AT: Brisbane

HEARING DATE: 9 October 2001

JUDGE: Mullins J

ORDER: The application be dismissed.

CATCHWORDS: CORPORATIONS – WINDING UP – REMOVAL OF LIQUIDATORS – application by creditor and contributory to remove liquidators – whether applicants have standing to remove liquidator – standing of creditor where creditor as a result of assignment of debt – whether underlying debt assignable when proof of debt has been lodged – standing of contributory when there is possibility of surplus assets

CORPORATIONS – WINDING UP – liquidators concede appearance of bias as a result of relationship of accounting partnership with major creditor – whether appointment of additional liquidator to investigate claim against and deal with proof of debt of major creditor appropriate

Bankruptcy Act 1966 (Cth) Corporations Act 2001 (Cth) Property Law Act 1974

2

Advance Housing Pty Ltd (in liq) v Newcastle Classic
Developments Pty Ltd (1994) 14 ACSR 230
Commissioner of Taxation v Macquarie Health Corporation
Ltd (1999) 88 FCR 451
Re Corbenstoke Ltd (No 2) [1990] BCLC 60
Deloitte & Touche AG v Johnson [1999] 1 WLR 1605
Re Kolback Group Ltd (1991) 4 ACSR 165
Mamone v Pantzer (2001) 36 ACSR 743
Re Obie Pty Ltd (in liq) (No 4) (1984) 2 ACLC 663
Re Rica Gold Washing Company (1879) 11 ChD 36
Sydlow Pty Ltd (in liquidation) v TG Kotselas Pty Ltd (1996)
65 FCR 234

COUNSEL: CEK Hampson QC with IA Erskine for the applicants
PL O’Shea SC with DA Kelly for the respondents

SOLICITORS: Thompson Hannan Lawyers for the applicants
Allens Arthur Robinson for the respondents

[1] MULLINS J: This is an application for the removal of the first and second respondents, Tracy Joy Dare and Philip Arthur Hennessy, as liquidators of Doolan Properties Pty Ltd (in liquidation) (“Doolan Properties”) pursuant to s 503 of the Corporations Act 2001 (“the Act”). The first applicant, Mr Warwick McDonald, asserts that he is a creditor of Doolan Properties. The second applicant, Mr William Doolan, is a shareholder of Doolan Properties. The first and second respondents are partners of chartered accountants KPMG.

[2] The applicants allege that the grounds for the removal of the respondents are the prospect, existence, or appearance of bias or of a conflict of interest in light of Supreme Court proceeding S9643 of 2001 (“the Supreme Court proceeding”).

Facts

[3] Commercial property known as the Watergarden Convenience Centre (“the Watergarden”) was owned by Berrima Properties Pty Ltd (“Berrima”). Doolan Properties held 50% of the shares in Berrima the other 50% of the shares was held by Landvest Construction Pty Ltd (“Landvest”). McLaughlins Nominee Mortgages Pty Ltd (“McLaughlins”) advanced $3.48m to Berrima in October 1997 by way of deed of loan which was secured by first registered mortgage over the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading McDonald v Dare

Details

AGLC: McDonald v Dare [2001] QSC 405
Case: [2001] QSC 405
Decision Date: 31 October 2001

CaseChat Overview and Summary

This case concerns an application by Warwick McDonald and William Doolan to remove Tracy Dare and Philip Hennessy as liquidators of Doolan Properties, a company in liquidation. The applicants allege that the liquidators' removal is necessary due to the prospect, existence, or appearance of bias or conflict of interest, particularly in light of a Supreme Court proceeding filed against the respondents. The case focuses on two main legal issues: the applicants' standing to remove the liquidators and the appropriateness of appointing a third liquidator to address the perceived bias. The court found that the applicants have standing, with McDonald having been assigned a debt by Marilane, and Doolan having a real interest in the outcome of the liquidation due to the possibility of surplus assets. However, the court dismissed the application for removal, noting that the respondents had acknowledged the appearance of bias and proposed the appointment of a third liquidator to handle specific matters, a suggestion that aligned with legal precedents supporting cost-efficiency in liquidation proceedings. The court ultimately found that the applicants had not shown sufficient cause for removal, particularly considering the advanced stage of the liquidation and the potential cost savings of appointing a third liquidator instead of replacing the existing ones. The application was dismissed, with the court reserving the right to hear submissions on costs.

Orders