The Supreme Court of Queensland has made an order for Perpetual Trust Company to take possession of the buildings previously owned by Mackay Spare Parts.
The Supreme Court of Queensland has made an order for Perpetual Trust Company to take possession of the buildings previously owned by Mackay Spare Parts. Campbell Gellie

Warrant issued to take CBD property

A 70-YEAR-OLD Mackay business might be forced to close after losing a dispute over a $1million bank loan.

The Supreme Court issued a warrant for a bank to take possession of Mackay Spare Parts, in the CBD, after a dispute over the loan due to be repaid in 2012.

Issued on Monday, the warrant comes after the court awarded the business to the bank when it found company directors hadn't paid back the $1million. The decision, delivered in November by Honourable Justice Martin Daubney, came more than three years after a claim by Perpetual Trustee Limited for the company to hand over

properties at 8-10 Brisbane St and 21 Sydney St.

The Daily Mercury understands Mackay Spare Parts directors David Ross Hodge and Lynette Margaret Hodge plan to appeal the judge's decision.

Justice Daubney's decision notice stated that during the case in September, Mr and Mrs Hodge's lawyer pulled out, leaving them to defend themselves.

"The defendants have confirmed, having consulted again with their former solicitor, that there is no evidence to be led in the case on their behalf and the matter is one of what they described as a technical argument about the loan documentation," he said.

The debate followed an original loan in 2000 of $504,000 which was due to be paid in 2007 but the directors refinanced for a total of $1million, which had to be paid back in 2012.

Justice Daubney's decision notice stated two business names were used to operate Mackay Spare Parts.

In 2000 Mackay Spare Parts (Trading) took out the original loan but was wound-up by the Deputy Commissioner of Taxation in 2004.

"Prior to that (2003), however, another company called Mackay Spare Parts Pty Ltd (MSP) was set up," the decision reads. "MSP bore all the hallmarks of what is colloquially known as a 'phoenix activity'."

In 2014 the second business was also wound up by the Deputy Commissioner of Taxation. Despite the two loans being made to different companies, Mackay Spare Parts and MSP, Justice Daubney said that was an error not picked up by the financier but that didn't matter as a signed letter by the Hodges acknowledged the new loan was now $1million, not the additional $496,000.

This meant the property, which was used as collateral on the previous loan, carried over to the new loan, Justice Daubney found.

On Friday, the shop and mechanic workshop were operating and Mr Hodge told The Daily Mercury the situation was ongoing and that the decision was going to be appealed.



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