By Victoria Young
Aug. 9 (BusinessDesk) - Bob Jones has lost a Supreme Court appeal over rental payments to one of his companies for the
firm formerly known as Blue Chip.
The property magnate has fought for years with the liquidators for Blue Chip, which is now called Northern Crest. The
finance company had leased a building owned by Jones.
Back in 2017 at the High Court stage, liquidators Anthony McCullagh and Stephen Lawrence argued Jones's company Robt
Jones Holdings skipped the queue when it received payments ahead of other creditors.
The liquidators sought to make about $800,000 in payments made to Jones's company voidable.
Liquidators can apply to void a transaction if they believe it has left other creditors at a disadvantage and can meet a
statutory test. Doing so puts the money back into the liquidators’ pool to be distributed among creditors.
Having lost in the High Court and Court of Appeal, lawyers for Jones went to the Supreme Court in April this year to
argue the transaction was not voidable under the Companies Act.
There were two payments made to satisfy the rent owing, one made by a third party Columbus, and the other by a Northern
Crest subsidiary. While the case originally concerned both payments, at the Supreme Court stage the fight was only over
about $200,000 paid by the Northern Crest subsidiary.
The Supreme Court allowed the appeal on the question of whether a transaction was only voidable if it actually lowered
the amount available to creditors. The other aspects of the test were already met.
Robt Jones Holdings argued the payments were effectively a loan so didn’t actually reduce the pool to creditors.
The lawyer for the liquidators said the voidable transactions regime should be simple and cost-effective, and taking
Robt Jones Holdings' approach and analysing the source of payments would create lengthy litigation, as it had in the
After reviewing the law in Australia, Canada and the United Kingdom, Justices Susan Glazebrook, Mark O’Regan, Ellen
France, Terence Arnold and Stephen Kos found in favour of the liquidators.
In a unanimous decision, the judges wrote that even if the payment from the Northern Crest subsidiary was a loan, it was
still an insolvent transaction. Liquidators do not need to establish anything more than that there was a payment, the
According to their most recent report, the liquidators have already received about $731,000 from Jones's company which
was being on trust pending the outcome of the case.