The liquidator of the authorised government auctioneer in the ACT said the company’s $1.1 million debt could not have been run up in ordinary trade, the ACT Magistrates’ Court was told yesterday.
The court was told of a burglary in which documents were stolen making it difficult for the liquidator to find out how much was owed to whom.
Magistrate Peter Dingwall adjourned applications for auctioneers licences by two former directors of the company, pending reports from the ACT Commissioner of Police.
The commissioner objected to the granting of the licences on the grounds that the applicants, John Cooper and Colin Lappa, were not fit and proper persons to hold licences.
The two were directors of Sale-O Pty Ltd, trading as Australian Capital Auctioneers, which went into liquidation earlier this year owing at least $1.1 million, most of it to Federal Government for cars and other goods sold at auction and not accounted for. They were seeking licences as individuals in the ACT.
Mr Cooper’s application was adjourned by consent. Mr Lappa objected to the adjournment. His counsel, Bob Crowe, told Mr Lappa’s story from the bar table.
Mr Lappa was in charge of the Dubbo operation of Sale-O until January when he took over the Canberra operation after buying out Mr Cooper. He sent in his book-keeper. By March his book-keeper started to find discrepancies. Requests for payment from clients who had not been paid for their goods came in. Mr Lappa met them. But after a time he became inundated. He went to his solicitor and the police.
The company went into receivership. In April a burglary took place at the Fyshwick premises. A safe and some containers containing documents were stolen. Counsel for the commissioner, Philip Walker, told the rest of the tale:
The liquidator found debts of at least $1.1 million. He concluded these could not have been run up as ordinary trade debts. Because of the missing documents it will take at least three months to sort out.
The liquidator has said government departments’ records are not as complete as he would like, so the supply side as well as the selling side of the story is incomplete.
“”A substantial number of people who gave their property to the company for sale have had their money taken or used by the company or people associated with the company,” Mr Walker said.
There might be a question of honesty; there was certainly a question of knowledge and ability.
Mr Crowe said Mr Lappa denied wrong-doing and was willing to face cross-examination about the company’s failure. A ground of objection by the commission that Mr Lappa was facing a charge in NSW should not be considered. Mr Lappa would defend the charge. He should be presumed innocent.
He had three employees and his livelihood in the ACT was at stake.
Just because the police said they had cause for suspicion about the failure of a company was no ground for delaying Mr Lappa’s licence.
Mr Dingwall, said directors of companies had equal responsibility. The legal formalities were there to protect creditors and people who deal with the company. The commissioner should inquire and make a report to the court by December 10. The cases should come back to court on October 19 for a progress report.
Another objector, Joe Harmer, an employee who said he was owed money withdrew his objection after Mr Walker said he would embrace Mr Harmer’s objection with the commissioner.
The Department of Administrative Services has advertised for pre-qualification pending tenders for a new authorised auctioneer. The qualification applications close on September 9.