The Duke Group Limited, a company to which John Sheahan was appointed liquidator in July 1989, was mentioned in the July 2012 issue of the Insolvency Practitioners’ Association of Australia’s Insolvency Journal. That article is as follows:

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The liquidation of the Duke Group Ltd has a long history in insolvency case law. Very briefly, Duke was wound up in 1989 under the Companies (South Australia) Code. It had debts of $35 million and no assets. The liquidator successfully brought two sets of proceedings which resulted in the payment in full of the creditors’ claims. There were in fact surplus funds in the liquidation, against which there were claims for post-liquidation interest, which were paid. There were also shareholder claims to those surplus funds. These were made following the 2007 High Court decision in Sons of Gwalia Ltd v Margaretic [2007] HCA 1 (Sons of Gwalia). Other legal developments followed.

The liquidator then applied for directions as to how those shareholder claimants were to be notified of their rights to make their claims. There were over 20,000 current and former shareholders of Duke and as at September 2011, 1,036 proofs of debt making claim for approximately $2.2 million had been received by the liquidator.

The Court cited Re ION Ltd [2010] FCA 1119 at [51] that, as a general proposition,

“a liquidator is obliged to inquire into all claims. He or she has a duty to invite proofs of claims from persons with claims, even if they have not responded to the advertisement, if the liquidator is aware of creditors who have not proved.”

But in this case, the liquidator did not have to go that far. While the potential shareholder claimants ought to be provided with further information, the liquidator did not have to advise them each individually. Nor did he have to follow up those shareholders whose previous notices had been returned unopened or undeliverable. The remaining shareholders had to be re-circularised, indicating that they may have a claim in the liquidation and that additional information to assist in completing formal proof of debt was available on the liquidator’s website. The detailed overview of the legal background to the matter on the liquidator’s website had to be updated. In particular, the legal advice received relating to Sons of Gwalia-type claims was to go on the website, with the caveat that the shareholders should seek their own legal advice. To try to avoid the need to respond to individual shareholder requests for information, Duke’s share register as at the date of liquidation was also directed to be put on the website: Gerah Imports v The Duke Group (in liq) [2012] SASC 63.