WA Supreme Court rejects liquidators' bid to move metal fabricator into administration over independence concerns

The Supreme Court of Western Australia has refused to allow the liquidators of Steelcape Nominees Pty Ltd, trading as Star Metal, to appoint themselves as voluntary administrators, finding that significant failures to disclose relevant information and their connections to parties involved in a related Family Court dispute raised concerns about their independence. Justice Lundberg ruled that the circumstances justified refusing an application under section 436B of the Corporations Act 2001, notwithstanding the relatively low threshold ordinarily applicable to such appointments.

Steelcape, an architectural and industrial metal fabrication business operating from premises in Welshpool and Belmont, entered members' voluntary liquidation on 6 October 2026. The company, which operated as trustee of the Yallco Trust, has approximately $1.14 million in secured debt and $8.5 million in unsecured liabilities, including $1.415 million owed to the Australian Taxation Office, $4.659 million owed to Beach Nominees Pty Ltd and $1.33 million owed to TPDV Pty Ltd. The liquidators attributed the company's financial difficulties to its poor financial position and a board deadlock involving directors Christian Chapman and Annette Byrne, who are married and involved in ongoing Family Court proceedings.

The liquidators sought permission to transition Steelcape from liquidation into voluntary administration to allow creditors to consider a deed of company arrangement proposed by shareholder Russell Chapman, Christian Chapman's father. They argued that the proposal could preserve the company's operations, workforce, customer relationships and ongoing projects. However, Justice Lundberg identified numerous material omissions in their urgent, initially ex parte application, including the failure to disclose that Ms Byrne had received no notice of the shareholders' meeting appointing the liquidators, that she had sought to restrain insolvency proceedings through the Family Court, and that the liquidators' solicitors also represented Mr Russell Chapman, the DOCA proponent, and other interested parties in the Family Court proceedings.

Justice Lundberg found that the omissions were substantive rather than technical and that the liquidators and their advisers had sufficient time to disclose the relevant matters before seeking urgent orders. Although the liquidators were experienced insolvency practitioners and the proposed DOCA warranted consideration, the Court concluded that the circumstances presented a threat to their independence. Justice Lundberg said there should be greater separation between those administering the company and those proposing the DOCA, finding that such separation would better serve creditors and the company.

The Court also declined to immediately appoint the liquidators as receivers of the Yallco Trust, finding insufficient evidence that delaying the appointment would cause serious financial harm. Justice Lundberg expressed concern that the company's directors and shareholders had sought to "steal a march" on Ms Byrne through the undisclosed liquidation appointment and subsequent urgent application. The receivership application was adjourned until after the Family Court considered Ms Byrne's competing application, with the matter eligible to be relisted.

Read the full decision here.

Dan Butler of MPH Lawyers acted for Ms Annette Byrne, a director of the company.

Jonathan Cook and Boika Panov (instructed by Mendelawitz Morton) acted for the liquidators, Greg Prout and Jimmy Trpcevski of WA Insolvency Solutions.