A New South Wales based construction firm which is said to be on the verge of financial collapse has won the right to commence liquidation proceedings against a company owned by a national rugby league team.
Justice John Reeves has granted Reed Constructions leave to begin wind-up proceedings against Gold Coast Titans (Property) Pty Ltd, a company owned by the Gold Coast Titans.
Lawyers for Reed claimed that the contractor was owed more than $1 million from construction work on the Titans’ Centre for Excellence at Robina, a training facility used by the club.
In response, the Titans’ legal team argued that there was no evidence about whether or not any of this amount had been repaid thus far (and if so, how much), and that therefore Reed was merely a contingent creditor.
However, Justice John Reeves rejected this argument, ruling that Reed became a creditor when the two parties signed a deed in August last year.
Prior to the ruling, the Titans’ property arm had been subject to earlier wind up proceedings from the Australian Taxation Office, which was believed to relate to outstanding GST payments. Those proceedings, however, have been discontinued. It is believed the Titans entered into an arrangement to pay off the amounts owed.
Nevertheless, the court heard that the Titans’ are likely to be facing insolvency, and there is speculation that the club is in debt to the tune of $35 million.
The case comes as Reed Constructions itself is said to be in financial difficulty – a situation which it is feared could place payments owed to as many as 1,500 contractors in jeopardy for work done on government infrastructure projects in New South Wales.