Comlek Companies - Case Update

Joseph Hayes and Andrew McCabe of Wexted Advisors, the joint administrators of the Comlek Companies, have successfully defended a proceeding brought by the Queensland State Revenue Commissioner, who claimed that the administrators had erred in casting a tie-breaking vote in favour of a DOCA and sought to have the whole DOCA terminated.

The Court found that the Commissioner had not established that there were false and misleading statements in the Second Report to Creditors under ss 445D(1)(a) and 445D(1)(b) of the Corporations Act, but had proven that there was a material omission under s 445D(1)(c), being the failure to inform the creditors of the Commissioner’s allegation of deliberate tax defaults and tax evasion on the part of the Comlek Companies.

Nevertheless, the Court declined to exercise its discretion to terminate the DOCA, ultimately concluding that it was not in the public interest to appoint a liquidator, and that the Commissioner is statutorily empowered to continue with his investigations, should he wish to do so.

Read the decision here.