AE Charter Services and Rossair Charter - Case Update

A director of Australia’s longest running air charter provider has been ordered to pay nearly $1 million after failing to respond to insolvent trading claims brought by the company’s liquidators.

AE Charter Services and Rossair Charter, which had been in business for over 55 years, entered voluntary administration in July 2018, one year after one of their planes crashed, tragically killing three people in South Australia's Riverland in May 2017. The companies explained that they were forced to ground their fleet of aircraft as a precaution and that they struggled to rebuilt trust with the public after the accident.

In August 2018, the companies’ creditors resolved to wind the companies up and Henry Kazar of EY and Lachlan Abbott (now at KordaMentha) were appointed liquidators.

After conducting their investigations, the liquidators determined that both of the companies were insolvent from 20 November 2017 to 3 July 2018. During the relevant period when the companies were insolvent, AE Charter incurred debts totalling $487,827.54 and Rossair Charter incurred debts totalling $188,620.65. They also found that Duncan Gordon, a director of the companies, was aware (or should have been aware) that the companies were insolvent during this time.

Mr Kazar as liquidator commenced proceedings against Mr Gordon in June 2024. Mr Gordon failed to file a notice of appearance or a defence as required by Court orders. He also failed to attend the first case management hearing in November 2024. The liquidator ultimately sought default judgment against Mr Gordon.

The Court granted default judgment, finding that Mr Gordon had failed to defend the proceeding despite being properly served, and that he had provided no explanation for his numerous defaults. Concluding that Mr Gordon does not intend to take an active role in the proceedings, the Court decided to exercise its discretion to grant default judgment. Mr Gordon was ordered to pay approximately $930,000, plus costs.

Read the decision here.