The operator of a Sunshine Coast strawberry farming business in Australia has been ordered by the Supreme Court to pay more than US$730,000 to a labour hire company following the farm's liquidation.
In a decision delivered on December 12, Judge John Muir ruled in favour of Star Recruitment Service Pty Ltd, which supplied workers to pick and pack strawberries at a farm near the Glass House Mountains. The ruling followed hearings held in May and July.
Star entered into a service agreement with GG Group (QLD) Pty Ltd in February 2020 to provide labour to the farm. The company claimed that invoices worth more than US$1.08 million remained unpaid between August 2020 and November 2021, prior to GG Group entering liquidation in December 2021.
The proceedings focused on Star's claim that GG Group, directed by Leonard Smith, continued trading while insolvent when the debts were incurred. Mr Smith disputed both liability and the amounts claimed.
Court documents state that GG Group had been growing and supplying strawberries since about 2017. The business leased land from SS Group Pty Ltd, also directed by Mr Smith, and operated by planting strawberry runners, harvesting and packing fruit, and leasing vehicles and equipment through finance arrangements. Around two-thirds of the runners were funded by South Australian supplier Ceravolo Orchids Pty Ltd, which marketed and sold most of the harvested crop to Coles supermarkets.
Judge Muir noted that strawberry harvesting in southeast Queensland runs from May to November and relies on a large seasonal workforce. "The defendant's evidence, which I accept, is that it is difficult to hire workers directly to pick and pack a strawberry crop across the season," the judgment stated.
Star employs around 70 people, mainly working holiday visa holders. In November 2021, the company issued a formal payment demand for outstanding invoices before liquidators were appointed the following month.
The liquidator was told that the business failed due to rising labour costs during the pandemic, limited access to finance, and delays in runner supply. Preliminary investigations found the company appeared insolvent from at least July 2020, with liabilities exceeding assets by about US$3.6 million.
Invoices worth around US$346,000 were excluded from the insolvent trading claim as they were incurred during a pandemic-related safe harbour period. The remaining US$730,000 was found to fall outside that period.
Judge Muir concluded that by early 202,1 GG Group was unable to pay its debts as they fell due, and that Mr Smith knew or should have known the company was insolvent. The court awarded Star US$730,000 in unpaid invoices, plus around US$212,000 in interest and costs.
Source: Sunshine Coast News
