Connelly (liquidator) v Papadopoulos, in the matter of TSK QLD Pty Ltd (in liq) [2024] FCA 888

Connelly (liquidator) v Papadopoulos, in the matter of TSK QLD Pty Ltd (in liq) [2024] FCA 888

Judgment for the plaintiffs was warranted against the director, associated companies, and involved adviser, as the evidence established their liability for loss and damage under a scheme to strip company assets pre-liquidation. Deductions from the damages award included amounts already recovered and properly evaluated employee entitlements assumed by a third party. The court declined to structure or stay enforcement of judgment in favour of the adviser and his companies, finding no strong basis for such relief and ordering immediate judgment for specified amounts. Default judgment was entered against non-appearing defendants, and the orders sought by the plaintiffs were made with minor...

Parties
First Plaintiff: Anthony Norman Connelly and William James Harris as liquidators of TSK QLD Pty Ltd (in liquidation) ACN 605 921 506; Second Plaintiff: TSK QLD Pty Ltd (in liquidation) ACN 605 921 506; First Defendant: Savas Papadopoulos (also known as Savvas Papadopoulos); Second Defendant: Torquejobs Pty Ltd (ACN 648 846 520); Third Defendant: Leopho Pty Ltd (ACN 609 702 203); Fourth Defendant: Ciano St John Lopez; Fifth Defendant: Duncan Athol Bremner; Sixth Defendant: Rachel Helen Ruth Bremner (also known as Rachel Helen Ruth Davis); Seventh Defendant: Innovant Consulting Pty Ltd (ACN 637 244 930); Eighth Defendant: Innov Debt Co Pty Ltd (ACN 650 666 434); Ninth Defendant: Innov-D Pty Ltd (ACN 650 664 083) in its own capacity and in its capacity as trustee for the Innov Debt Trust; Tenth Defendant: Benjamin Paul Whitehouse; Eleventh Defendant: Rekover Pty Ltd (ACN 641 270 019)
Jurisdiction
Australia
Judgment Date
08 August 2024
Procedural Posture
Corporations—liquidators' Proceeding for Recovery of Company Assets/losses / Final Judgment After Trial and Application for Default Judgment Against Non Appearing Defendants
Outcome
Judgment for the plaintiffs, including entry of default judgment against non-appearing defendants and orders for payment of damages, compensation, and costs; quantum and interest for certain parties to be confirmed; plaintiffs' proposed orders, with minor modifications, made by the court.
Legal Topics
Asset Stripping, Breach of Director’s Duties, Equitable Compensation, Payment of Company Moneys, Default Judgment, Damages, Liquidators’ Claims, Agency, Assessment of Loss and Damages, Stay of Judgment/orders
Corporations Law Insolvency Bankruptcy Asset Stripping Breach of Director’s Duties Equitable Compensation Payment of Company Moneys Default Judgment +5 more

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Parties

Anthony Norman Connelly and William James Harris as liquidators of TSK QLD Pty Ltd (in liquidation) ACN 605 921 506

First Plaintiff

TSK QLD Pty Ltd (in liquidation) ACN 605 921 506

Second Plaintiff

Savas Papadopoulos (also known as Savvas Papadopoulos)

First Defendant

Torquejobs Pty Ltd (ACN 648 846 520)

Second Defendant

Leopho Pty Ltd (ACN 609 702 203)

Third Defendant

Ciano St John Lopez

Fourth Defendant

Duncan Athol Bremner

Fifth Defendant

Rachel Helen Ruth Bremner (also known as Rachel Helen Ruth Davis)

Sixth Defendant

Innovant Consulting Pty Ltd (ACN 637 244 930)

Seventh Defendant

Innov Debt Co Pty Ltd (ACN 650 666 434)

Eighth Defendant

Innov-D Pty Ltd (ACN 650 664 083) in its own capacity and in its capacity as trustee for the Innov Debt Trust

Ninth Defendant

Benjamin Paul Whitehouse

Tenth Defendant

Rekover Pty Ltd (ACN 641 270 019)

Eleventh Defendant

Procedural Posture

Corporations—liquidators' Proceeding for Recovery of Company Assets/losses / Final Judgment After Trial and Application for Default Judgment Against Non Appearing Defendants

Legal Issues

  1. 1 Whether the defendants (including a director, external adviser, and associated companies) are liable for loss and damage to TSK QLD Pty Ltd as a result of a scheme to strip assets from the company prior to its liquidation
  2. 2 Appropriate quantum of damages, including assessment of loss, allowance for settlements already received, and deduction of employee entitlements assumed by a third party
  3. 3 Effect of bankruptcy of first defendant (director) on proceeding and order (including necessity for leave)

Ratio Decidendi

Judgment for the plaintiffs was warranted against the director, associated companies, and involved adviser, as the evidence established their liability for loss and damage under a scheme to strip company assets pre-liquidation. Deductions from the damages award included amounts already recovered and properly evaluated employee entitlements assumed by a third party. The court declined to structure or stay enforcement of judgment in favour of the adviser and his companies, finding no strong basis for such relief and ordering immediate judgment for specified amounts. Default judgment was entered against non-appearing defendants, and the orders sought by the plaintiffs were made with minor...

Court Disposition

Judgment for the plaintiffs, including entry of default judgment against non-appearing defendants and orders for payment of damages, compensation, and costs; quantum and interest for certain parties to be confirmed; plaintiffs' proposed orders, with minor modifications, made by the court.

Orders

  • Leave granted to plaintiffs to obtain orders to the extent required under s 58(3)(b) Bankruptcy Act 1966 (Cth)
  • First defendant to pay plaintiffs $7,293,814.09 as a debt under s 588M(2) Corporations Act 2001 (Cth), as damages under s 1317H and as equitable compensation