IN a further setback to Rockhampton construction boss, Geoff Murphy, the District Court at Brisbane has ordered he pay all court costs in a trial that effectively ended when his company went into voluntary liquidation last year.
Mackay businessman, Michael Barfield claimed his labour hire business was owed $350,000 plus legal costs by JM Kelly Project Builders, a claim Mr Murphy, as sole director, contested.
The case was being heard in the District Court in June last year and five days after evidence closed, Mr Murphy wound up his company admitting details of serious insolvency.
On August 9 liquidators consented to an order dismissing the counter claim against Mackay Labour Hire, however in April this year, Mr Barfield advised the costs application had not been withdrawn.
In the judgment, handed down on May 2, Judge Leanne Clare found that according to Mr Murphy's own Form 509, summarising the company's affairs, JM Kelly Project Builders was "hopelessly insolvent" on June 20, 2016.
She found that "such a serious insolvency was unlikely to arise overnight" and the strong inference was that "the defendant was insolvent for a significant time before the trial".
Mr Barfield started Mackay Labour Hire more than 10 years ago and said he had to sell equipment to finance his legal action against JM Kelly Project Builders, now known as Collhart Investments Pty Ltd.
His barrister, Michael de Waard contended that Mr Murphy had actively concealed his decision to wind up the company and thus Mr Barfield had paid further legal costs on an unenforceable claim.
In an affidavit on April 28, 2017 Mr Murphy said he had not made the decision to wind up the company "until the very last moment" but Judge Clare found that did not address the real issue of insolvency.
"If he genuinely believed he could avoid liquidation, it was hopeless optimism," she found.
"The liquidator's report... represented that as at June 20, 2016 the defendant company had debts of $4.5 million and assets worth less than a tenth of that... assets given a book value of $7.2 million had a market value of less than $426,000."
Judge Clare concluded there was compelling evidence of insolvency at the time the litigation was conducted and in the absence of any alternate explanation, must have been for three months prior to the day it ceased trading.
This was the second time the courts have ruled in favour of Mr Barfield who had his right to freedom of speech upheld in the District Court during a defamation case in September last year.
Mr Barfield had displayed four signs on trucks in Rockhampton, Yeppoon and Mackay, which said sub-contractors were owed money by Mr Murphy.
Mr Murphy said today he respectfully disagreed with the judgment and will lodge an appeal.
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