Counterclaim Defeated, Recapture of $1.3 Million Debt

A potential $4 million liability looming on the horizon would be nothing short of stressful for any business. After all, the likelihood of bankruptcy or significant layoffs to pay such a claim could mean the end of the business.

Our client, an international hotel manager, faced a commercial dispute with an owner of a hotel that our client managed.

The owner accused our client of breaching duties and implied contractual terms, leading to alleged losses of nearly $4 million, including damage and loss of revenue.

Our client counterclaimed for $300,000 in unpaid fees. 

We successfully negotiated a settlement, resulting in

When running a business, trust is paramount.

Unfortunately, our clients found out the hard way that a director in their company had been misusing company funds to the tune of $2.5 million for his own personal gain and to benefit his private entities.

Time is of the Essence

When dealing with cases of financial misconduct, time is of the essence. We swiftly obtained freezing orders against the director personally and his shareholding entity which traded with his other businesses. This was essential in preventing assets from being dissipated, leaving our clients (as creditors) with little to recover.

Once we had

Tailored and well-structured standard form contracts are the bedrock of robust commercial relationships, for both business and consumer relationships. They provide clarity for all parties and ensure businesses are compliant with their legal obligations.

By proactively outlining and communicating equitable terms by way of a standard form contract, businesses not only mitigate the risk of customer actions in respect of the contract for uncertainty or unfair terms, but also cultivate trust, credibility, and enduring relationships with clients.

However, even the most robust contract will not prevent claims of unfair contract terms.

This was demonstrated in a case where we represented

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The recent Victorian Court of Appeal judgment in Cant v Mad Brothers Earthmoving Pty Ltd [2020] VSCA 198 clarifies the circumstances in which a payment from a third party may constitute an unfair preference. The decision is important to any creditors with potential exposure to unfair preference claims and for insolvency practitioners seeking to pursue such claims.

The voluntary administration regime is intended to maximise the chance of a company continuing or to provide a better return to creditors than an immediate winding up of the company. The regime offers great flexibility. This leaves it open to abuse by directors and related entities seeking to avoid legitimate debts, scrutiny of their conduct or to obtain a direct benefit for themselves.

The Results Legal team was recently engaged to assist one of our banking clients seize and sell land subject to first registered mortgage security.

A shipping container filled with specialised mining and drilling equipment was located on the secured property.

After taking possession of the property, our client was contacted by a third party who claimed ownership of the mining and drilling equipment.

After pursuing a long and hard fought Supreme Court claim, our client obtained judgment for an amount of $1.64 million. Shortly thereafter, the defendant company was placed into voluntary administration by its director.

Following the first meeting of creditors, it became apparent that related parties had sufficient voting power in both number and value to successfully put up a deed of company arrangement.

Secured recovery actions can often involve complex and contentious situations which require attention a focus on risk management.

This was evidenced in one particular matter where our client was the mortgagee of a deceased estate.

Our client, a large heavy equipment supplier, sold several used items of mining equipment for use at a mine site which required commissioning.  A separate contract was also entered into between the parties for the ongoing maintenance of the equipment.