It was a year that tested businesses to the limit and as expected 2020 had its fair share of heavy-hitting Queensland business bust ups and defections.
It was a year that tested businesses to the limit and as expected 2020 had its fair share of heavy-hitting Queensland business bust ups and defections.

State's biggest business bust-ups of 2020

In a year that tested businesses like no other, 2020 saw plenty of executives switching allegiances, long-term business buddies breaking up and some major legal disputes hit the headlines.

 

SURF'S OUT

One of the biggest lawsuits of the year came when Billabong founder Gordon Merchant sued top tier tax firm EY for $58m.

Mr Merchant, the Gold Coast surf lover who founded Billabong in 1973, filed a Supreme Court action outlining how following tax advice for a company sale in 2015 had allegedly ended with him being pursued by the tax office, penalised about $13m and banned from running his self managed super fund.

Billabong's annual general meeting at its West Burleigh HQ. Gordon Merchant. Picture Glenn Hampson
Billabong's annual general meeting at its West Burleigh HQ. Gordon Merchant. Picture Glenn Hampson

He, and former Billabong director Colette Paull, were seeking damages for advice from EY and EY partner Ian Burgess after an audit by the tax office has ended with Mr Merchant being disqualified for "recklessly contravening" superannuation laws, as well as owing $45m in back tax.

Mr Merchant also claimed damages for breach of contract and negligence alleging EY should have known he was "vulnerable to suffering economic loss if EY failed to use reasonable care and skill" in structuring his affairs.

Several months on from the claim hitting court in August, EY has not filed a defence, the file has no other documents or upcoming court dates and EY declined to comment on the matter when contacted on Monday.

 

 

DIAMOND DUST UP

Two months later, another veteran businessman, diamond trader Charles Bentley, launched legal action against his advisers for advice that allegedly left him being pursued by the tax office for $650,000.

 

Charles Bentley of Diamonds International. Picture: Adam Smith
Charles Bentley of Diamonds International. Picture: Adam Smith

As a diamond merchant for 35 years, Diamonds International chief executive Mr Bentley regularly travelled the world in search of the most exclusive jewellery for his Brisbane stores.

However, he claimed his tax and accounting experts never told him to keep a travel diary which was just one error that came to light when the ATO launched an audit of his business in August last year.

Diamonds International filed a claim for $547,045 in damages for negligence and breach of contract against his former long-time advisers John J Dixon and Johnathan Geoffrey Martin of JCK Business Services.

The claim, filed in the Brisbane District Court, states Mr Bently advised that the travel expenses incurred were for business purposes but had not maintained a travel diary because he was "unaware that it was required to do so".

Both defendants, John J Dixon Pty Ltd and JCK Business Services Pty Ltd have since filed defences to the action claiming, among other things, that they did ask Mr Bentley if he had documentation to support his travel claims and he said his "book keeper has it all".

The case will continue in 2021

 

 

TOP JOB

Another Brisbane bust up involved the husband of one of Queensland's most polarising politicians and his long-time business partner.

Damien van Brunschot, better half to former Deputy Premier Jackie Trad, took on the role of acting managing director of law firm DWF (Australia) in about September.

He filled the seat held by his legal partner of 12 years, Jamie McPherson, who had been in the position since late 2017 and has now left the firm.

 

Jackie Trad with husband Damien van Brunschot during a press conference at Parliament House in Brisbane. Picture: Steve Pohlner
Jackie Trad with husband Damien van Brunschot during a press conference at Parliament House in Brisbane. Picture: Steve Pohlner

 

Mr McPherson declined to comment at the time beyond saying he was on "gardening leave'' but sources described his exit as akin to a "political coup" which left staff "shocked and pretty upset''.

Mr van Brunschot and Mr McPherson first joined forces under the banner of MVM Legal back in 2008 focusing on insurance, industrial relations and occupational health and safety, as well as construction, hospitality and real estate.

The pair later traded as Kaden Boriss before merging three years ago with DWF, one of the world's biggest law firms.

As of December 21, Mr McPherson was still listed as managing director (Australia) on DWF website but his LinkedIn page was changed a couple of days ago to say he was a former managing director now freelancing.

DWF listed Mr van Brunschot as its head of insurance and principal lawyer.

Emails and phone calls to the firm and parties on Monday resulted in the following statement as the firm announced Mr van Brunschot would move into the role fully, rather than as interim MD.

"Global legal services firm DWF has announced that Managing Director (Australia), Jamie McPherson would leave the firm and that Damien van Brunschot had been appointed as Managing Director (Australia)," it said.

 

Former DWF Australian managing director Jamie McPherson said he is now pursuing new opportunities.
Former DWF Australian managing director Jamie McPherson said he is now pursuing new opportunities.

 

"Commenting on the announcement Jamie McPherson said: It has been a privilege to hold the role of Managing Director and I am thankful for the time in the role.

"I will be pursuing new opportunities shaped by what I have learned over the many years growing the Brisbane team with my colleagues there.

"I am proud of the growth of DWF in Australia over the last three years, but more so, immensely proud of each of the individuals and teams who have joined the journey over that time."

"Damien van Brunschot, who also leads DWF's Australian Insurance Group, commended Jamie for his efforts and stewardship of the firm.

"I thank Jamie for his contribution as the inaugural Managing Director of the Australian operation of DWF.

"Many colleagues and I have worked with Jamie for many years and can attest to his commitment and hard work, all too apparent in the start-up operation of the Australian business.

"Jamie can be rightly proud of his leadership in the establishment of the DWF in Australia, and we wish him all the best in his future career,".

"Mr Brunschot continued: Despite a tumultuous year for clients, overall business performance of DWF, including its Australian operations, is sound and we're moving into 2021 on solid footing."

 

 

PENTHOUSE VIEWS

More a falling out among potential neighbours than business associates but given the high-powered status of many of the players in this New Farm development stoush, that could redefine the value of Story Bridge views, it is a worthy contender of a case to watch.

Several bizoids, who also happen to be New Farm penthouse owners, have joined the fight to stop their sweeping views being "wiped out" by a proposed luxury development next door.

 

The five story older building, on the left, that developers want to replace with a taller, luxury building much which neighbouring penthouse owners have objected to. Picture: Annette Dew
The five story older building, on the left, that developers want to replace with a taller, luxury building much which neighbouring penthouse owners have objected to. Picture: Annette Dew

Lawyer Jim Peterson, a partner at law firm Baker McKenzie, and wife Catherine were some who have objected to a 7-storey complex going ahead on a prime riverfront parcel in Moray St.

They argued views of Story Bridge in particular should be classed as more than "secondary" and they wouldn't have bought their $3.15m unit almost 10 years ago if not for the iconic sight which wows guests who come to their home in the CIEL complex.

Veteran Brisbane entrepreneur Norris Coughlan has also objected saying "incredible" views from his home, purchased for $5.7m about 13 years ago, will be affected by the "over development".

Plans to knock down an old 5-storey block and replace it with a 7-storey boutique tower including rooftop pool, suspension bridge and car lift are that of boutique Brisbane developer Spyre Group which is run by Daniel Laruccia and Andrew Malouf.

Checks with Brisbane City Council's development tracker show the project's official period for assessment has now been halted until June 2021 at the request of the developer.

 

BROMANCE ENDS

How to deal with COVID rent relief for their strip club tenant was just one of many issues that led to the business break up of Queensland strip club king Tony Shead and former law firm director Robert Hynes.

 

Robert Hynes. Picture: Tara Croser.
Robert Hynes. Picture: Tara Croser.

Mr Shead, of Paddington, and Mr Hynes, of Ascot, had known each other since 1995 and together were directors of a company that owned the Bad Girls nightclub building at Maroochydore.

 

Strip club baron's bromance ends in company winding up

 

The Supreme Court was recently asked to winding up the company, Thorpevale Pty Ltd, which although solvent was "paralysed" by the men's inability to continue to work together, documents stated.

"Tony, we have five income producing properties and one business together," Mr Hynes said in a document filed with the court.

"We used to catch up weekly to discuss and agree how to handle the various and continuous issues that arise in relation to those."

The application to wind-up the company was eventually made by consent by both parties.

 

 

SOURING RELATIONS

A legal fight between the co-owners of the Big Pineapple on the Sunshine Coast has the $150 million redevelopment of the icon in doubt.

Peter Kendall and Brad Rankin, are two of the men behind plans to renovate the landmark and restore it to its former glory as a major tourism drawcard.

 

Co-owners behind plans to redevelop the Big Pineapple site have taken a dispute to court. Picture: Brad Fleet
Co-owners behind plans to redevelop the Big Pineapple site have taken a dispute to court. Picture: Brad Fleet

The project secured a $2.5m state government grant last year and planning approval for a $150m master plan which includes a new main building, high ropes course, zoo, theme park, eco camping and concert hall and breweries.

However, a recent Supreme Court judgment reveals cracks in the relationship late last year with Mr Kendall accusing Mr Rankin of breaching their property agreement by sending a series of emails that caused the development to halt.

Emails between the two show that Kendall, who is the managing director of construction company CMC Group, disagreed about how Rankin was intending to pay another party, Jim Costello, who was involved in getting the development approval and grant.

 

Big Pineapple co-owner Peter Kendall, manager Dean Croyden, co-owner Brad Rankin, and renewal project manager Jim Costello pictured at Sunshine Coast Daily’s Future Sunshine Coast event.
Big Pineapple co-owner Peter Kendall, manager Dean Croyden, co-owner Brad Rankin, and renewal project manager Jim Costello pictured at Sunshine Coast Daily’s Future Sunshine Coast event.

Mr Kendall set out his grievances in an email late last year that included saying he "did not like being played for a fool" and "to say I am disgusted is an understatement".

Mr Rankin then forwarded Mr Kendall's email to others including real estate agents, architects and NAB bank from where they were chasing $3m in funding and asked them to stop work on the project.

Mr Kendall said Mr Rankin's email was in breach of the property agreement which was followed by Mr Rankin launching legal action to challenged the breach notices.

The Supreme Court last week sided with Mr Kendall and dismissed Mr Rankin's appeal, although he can now appeal that decision.

A company spokesman last week said while the owners worked out "the future of their partnership" it was business as usual for tenants and the tourist attraction.

The State Government has confirmed the $2.5 million grant had lapsed.

 

LEGAL SHOWDOWN

Another legal battle which involved some of Brisbane's best-known business identities was that which included former airport boss Julieanne Alroe, serial company director Tony Bellas, legal eagle Brett Heading, former ERM Power chief Jon Stretch and father-and-son team Trevor and Philip St Baker.

ERM Power CEO Jon Stretch in Brisbane. Picture: Glenn Hunt
ERM Power CEO Jon Stretch in Brisbane. Picture: Glenn Hunt

They were named as respondents in a lawsuit filed in the Supreme Court in June by former ERM Power executive Kent Quinlan, who claimed to have paid a price for acting as a whistleblower.

He alleged in court documents that he was turfed out of the company after discovering a raft of corporate wrongdoing, including insider trading and bogus deals, and is now seeking an unspecified dollar figure for damages.

All of the respondents, who were key figures at ERM before its $607m acquisition by Shell late last year, were collectively defending the case.

Quinlan did not return a call seeking comment at the time and his LinkedIn page said that he was currently "doing nothing'' and has been "taking a break'' since early 2015.

It remains as such today.

His lawyer, Leon Bertrand, told The Courier-Mail Quinlan's career opportunities had been "blighted'' by the ERM issue and he expected to prevail in the court case.

According to the file, the matter is listed for a hearing in February 2021.

 

 

SHAKE UP

There was a quiet exodus at the Eagle Street offices of Dentons, one of the world's biggest law firms in the middle of the year with four partners upping stumps and defecting to the Brisbane bunker of rival outfit Thomson Geer in arguably the city's most dramatic legal shake-up.

 

Thomas Greer partner Matthew Rollason.
Thomas Greer partner Matthew Rollason.

Jumping ship were Matthew Rollason, Scott Guthrie, Jeff Baker and Kirsten Pike. Another Dentons lawyer, Melbourne-based Joe Ip, will also join the Brisbane outpost of Thomson Geer as a partner.

They were among 21 legal eagles and support staff at Dentons poached by Thomson Geer in a reshuffle largely driven by COVID-19 pressures.

Somewhat ironically, the five new Thomson Geer partners were among a 17-strong contingent that had only joined Dentons two years ago in a mass exodus that triggered the demise of DibbsBarker.

Thomson Geer, headed by long-time boss Adrian Tembel, said the move would strengthen its national real estate and banking capability.

While a spokeswoman for Dentons at the time described the talent drain as "amicable,'' and that an internal "growth committee'' had been established to support existing clients and rebuild its presence in the state.

 

Originally published as Qld's biggest business bust-ups of 2020


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