Queensland’s Court of Appeal has ended a legal litigation dispute involving an heir to the Aristocrat gaming machine empire which lasted more than a decade.
The appeal court ruled in favour of landmark Cairns venue Gilligan’s Backpacker Hotel & Resort and its former owner Christian Ainsworth in the long running litigation dispute with a now defunct catering company.
Creevey Russell Lawyers Principal Dan Creevey said the firm represented Mr Ainsworth, the youngest son of gaming star and Aristocrat founder Len Ainsworth, in the decade long saga which was resolved when the Court of Appeal sitting in Brisbane upheld the appeal by Gilligan’s and Mr Ainsworth against Mad Dogs Pty Ltd.
“This Court of Appeal decision was a tremendous victory for Gilligan’s and Mr Ainsworth as well as great reward for their trust in Creevey Russell’s advice that their legal position was sound,” Mr Creevey said.
Gilligan’s had entered an agreement with Mad Dogs in 2005 to provide catering and food for the resort but Mad Dogs became insolvent and was unable to uphold the agreement.
The Supreme Court originally found in favour of Mad Dogs and later awarded damages after a civil trial, ruling the company had only been temporarily insolvent.
But the Court of Appeal overturned the original judgment after finding Mad Dogs was fully insolvent and not entitled to make any claims for damages because it was unable and unwilling to uphold the agreement with Gilligan’s.
Mr Creevey said the appeal involved detailed legal consideration of the effect of insolvency on a company carrying on a business.
“We raised to the Court of Appeal significant public policy issues and submitted that to award damages would be endorsing companies acting illegally or in breach of the Corporations Act,” he said.
“The appeal also considered the reasoning of insolvency and now gives guidance to companies concerned about that issue. Of interest to the Court of Appeal was the default of paying the Australian Taxation Office as a true indicator of insolvency.
“In this matter the court of appeal found the future of solvency was uncertain and the result being that the company was not able to perform the agreement.”
Mr Ainsworth said: “I am delighted with this outcome and the legal U-turn vindicates the stand taken by Creevey Russell Lawyers after a long and hard fought battle.”