Suspended insolvency laws too late for Logan developers Trinity Green and Arshad Developments
A six-month suspension of insolvent trading laws came too late for two Logan-based companies which have been wound up recently but it may have saved a popular homewares chain.
Logan
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A six-month federal government reprieve for insolvency declarations came too late for two Logan-based development companies.
But it may have saved Ishka, a much-loved homewares chain, which has an outlet at Logan’s Hyperdome.
The chain closed seven stores in June after the fallout from the coronavirus made trading difficult.
However, it was able to keep open five stores at Morayfield, Carindale, Browns Plains, Hyperdome and Robina.
This week, the chain closed its stores in Victoria to the public but they will still sell online.
An assistant at the store, who cannot be named, said the Hyperdome and Robina stores were operating on a week-to-week basis but were likely to shut for good if further trading restrictions were introduced.
In March, the government suspended insolvent trading laws for six months to temporarily relieve directors of personal liability for any debts incurred while trading when their company was insolvent.
The relief only applies to debts incurred in the ordinary course of a company’s business and does not apply to cases of egregious activity such as dishonesty and fraud, which are still subject to potential criminal penalties.
Any relevant debts incurred by a company will still be payable by the company.
But the reprieve came too late for Arshad Development and Trinity Green Developments.
Both companies were involved in projects in Logan but all activities were finalised by 2016.
Arshad, which developed land in Berrinba, had an unsuccessful application to the Supreme Court in 2002 over a failed land contract.
The court dismissed Arshad Development’s application which was to determine whether the vendor of some land had the right to terminate the contract on the due diligence date.
The case involved determining whether “by” the due diligence date meant “before” or “on or before”.
Trinity Green Developments, which went into liquidation in July, took over plans for a 450-lot subdivision on a 90 hectare site in Drewvale between Brisbane and Logan in 2012.
The project, in the growing southwestern corridor, was subject to a failed appeal in the Planning and Environment Court in 2014.
The appeal was brought after residents complained that the land to be developed was already zoned as an environmental protection area and was designed to be green space to act as a buffer and border separating Brisbane and Logan.
The residents said the land was also home to rare and protected eucalypts and koalas.
The appeal was lost because the time for filing the notice of appeal had expired.
Liquidator for both Arshad and Trinity Green Jarvis Lee Archer said both companies were involved in property development and had been dormant since 2016.
Although both companies were on the brink well before coronavirus restrictions, their demise has been noted in Logan, where the council has reported a slump in development applications since before March.
The council spent $631,000 on COVID-19 measures such as hand sanitisers and deep cleanses before the end of the last financial year and has reported revenue plummeting as many money-making sporting venues were forced to close.
Revenue from development applications was also down with no major applications lodged in April.