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On 30 June 2026, the financial services regulator ASIC laid its first-ever criminal charge under the relatively new “creditor-defeating disposition” provisions of the Corporations Act. A restaurateur is now facing charges carrying up to 15 years in prison under the creditor-defeating disposition provisions of the Corporations Act for allegedly redirecting over $1 million in sale proceeds away from his restaurant’s creditors before the company collapsed. It’s a NSW case, but the law behind it applies just as directly in Queensland. What happened? ASIC alleges that the defendant was an employee of a company that owned a restaurant in Camden, NSW. The company is now in liquidation. ASIC alleges that between August 2023 and April 2024, the defendant used his position to redirect $935,000 in proceeds from the sale of the business to himself, at the expense of company creditors. That conduct is charged under section 184(2) of the Corporations Act 2001, which carries a maximum penalty of 15 years’ imprisonment. A second charge alleges that he induced the company to redirect a further $96,793 in sale proceeds while the company was insolvent, contrary to section 588GAC(1) of the Act – a creditor-defeating disposition, carrying up to 10 years’ imprisonment. While this case is based in NSW, the Corporations Act applies in the same way in Queensland, and the conduct it targets is common wherever a business is under financial pressure, including on the Gold Coast. What is a creditor-defeating disposition? Under the Corporations Act, directors have many duties, including duties (in some circumstances) to prevent their company from entering into a transaction that prevents, hinders or significantly delays that property from being available to creditors if the company is wound up – called a creditor-defeating disposition This duty applies once a company is insolvent, or becomes insolvent because of the disposition itself. Common examples include selling business assets to a related entity at an artificially low price; transferring the business to a new company with a similar name shortly before the old one collapses; or moving stock, equipment or goodwill out of reach of creditors ahead of liquidation. This is the conduct commonly referred to as phoenix activity, or phoenixing. The business appears to shut down, then reopens under a different name with the same operations, while unpaid creditors are left with an empty shell to chase. In other situations, the activity simply involves stripping out assets of the company before it is liquidated, in circumstances where creditors suffer. Importantly, ASIC also warns that liability is not necessarily limited to directors. People who procure, induce, encourage or assist a creditor-defeating disposition, including pre-insolvency advisers and lawyers involved in structuring the transaction, may also face legal consequences. What has this case changed? Directors have long faced civil penalties, disqualification and personal compensation orders for creditor-defeating dispositions. What’s new here is that ASIC has, for the first time, laid criminal charges under the creditor-defeating disposition legislation. A civil penalty results in a fine and possibly disqualification. A criminal conviction results in a criminal record, and in some cases, the possibility of a prison sentence. For directors of Gold Coast businesses under financial pressure, this could be a warning that decisions made in the final months of a struggling business – about who gets paid, what happens to equipment and stock, and whether a “new” entity picks up where the old one left off – can now attract criminal prosecution, not just a civil enforcement. For creditors, the case is a reminder that if a business that owes you money has closed and a suspiciously similar operation has then opened, parties involved may still have liabilities. When should you get advice? If your business is under financial pressure, the time to speak to an insolvency lawyer is before any assets move, not after a liquidator or ASIC starts asking questions. A Gold Coast business lawyer and Gold Coast insolvency lawyer can advise on lawful restructuring options, including voluntary administration and small business restructuring and help directors document the reasoning behind decisions made during a downturn. This is an important step if those decisions are ever scrutinised later. If a director’s own property, or a family member’s, has been used as security for business debts, a Gold Coast property lawyer or property litigation lawyer can advise on what happens to that security if the business fails. If you’re a creditor – such as a subcontractor, supplier or landlord – owed money by a business that has ceased trading, a debt recovery lawyer can advise on statutory demands, winding-up applications and whether a related company might be pursued. If the dispute is heading to court, a civil litigation lawyer can advise on your prospects and the process ahead. What happens next? The prosecution is the first of its kind, but it is unlikely to be the last. ASIC has demonstrated that it is prepared to pursue criminal charges for alleged creditor-defeating dispositions where it believes the evidence warrants it. Gold Coast directors under financial pressure need to remember that the decisions made in the final months of a struggling business, about assets, entities and who gets paid, are no longer just commercially risky. They may be criminal. Whether you are a director managing a business through financial pressure or a creditor trying to recover money from one that has closed its doors, contact the team at QBM Lawyers to speak with an experienced insolvency lawyer on the Gold Coast. Early advice often provides the clearest path forward. Frequently Asked Questions Is phoenixing a company illegal in Queensland? Yes. Illegal phoenix activity breaches the Corporations Act 2001, which applies across Australia. It typically involves moving a company’s assets to a new entity at an artificially low price while the original company is insolvent, leaving creditors unpaid. Directors and, in some circumstances, other people involved in the transaction can face civil penalties, disqualification or criminal charges. Can a director go to jail for phoenixing a business? Yes, in some circumstances. Creditor-defeating disposition offences carry up to

Running a business on the Gold Coast involves much more than delivering a product or service. Every stage of the business lifecycle, from choosing a structure and negotiating contracts to managing employees and resolving disputes, carries legal obligations that can affect long-term success. Many legal issues arise not because an owner has acted improperly, but because agreements are unclear, risks were not identified early or legislation has changed. Seeking advice from a Gold Coast solicitor before problems develop can save significant time, expense and disruption later. Whether you are launching a start-up, purchasing an existing business or managing an established company on the Gold Coast, working with an experienced Gold Coast business lawyer can help protect your commercial interests. Commercial lawyer vs business lawyer: what’s the difference? The terms are often used interchangeably, but they can have slightly different areas of focus.A commercial lawyer generally assists with the day-to-day legal aspects of running a business, including commercial contracts, sales transactions, supplier agreements, leasing arrangements and negotiations. A business lawyer often provides broader advice covering entity formation, corporate governance, shareholder arrangements, employment issues, business sales and internal disputes. Commercial lawyer Business lawyer Typical focus Day-to-day operations The business as a whole Common work Contracts, sales transactions, trading terms, supplier and leasing arrangements Entity formation, corporate structure, governance, employment issues, internal disputes When you need one Negotiating and documenting deals Setting up, restructuring or resolving conflict within the business In practice, most businesses need both, which is why Gold Coast business lawyers such as QBM Lawyers advise across both areas. How a Gold Coast business lawyer protects your interests Choosing the right business structure One of the earliest legal decisions an owner makes is selecting an appropriate structure. Whether operating as a sole trader, partnership, company or trust, each has different legal, taxation and liability implications. Companies are separate legal entities, while sole traders remain personally responsible for business liabilities. Under the Partnership Act 1891 (Qld), partners can also be jointly liable for the debts of the business. Reviewing your structure as your business grows also helps ensure it continues to meet your objectives. A Gold Coast lawyer can advise on whether your structure suits both current needs and future plans. Contracts reduce business risk Contracts underpin almost every commercial relationship, and poorly drafted agreements create uncertainty around payment terms, responsibilities and termination rights. Agreements that benefit from review by a commercial lawyer on the Gold Coast include customer and supplier contracts, service agreements, confidentiality agreements, shareholder and partnership agreements and franchise agreements. Commercial leases involve long-term obligations, so review by solicitors for commercial leases before signing is worthwhile. Compliance matters too. The Australian Consumer Law, in Schedule 2 of the Competition and Consumer Act 2010 (Cth), regulates a wide range of business conduct, including misleading or deceptive conduct, unfair contract terms and consumer guarantees. Gold Coast franchises are also regulated by the Franchising Code of Conduct, with a new Code that commenced on 1 April 2025. Employment obligations continue to evolve Employing staff creates legal obligations covering recruitment, workplace policies, discrimination, safety and employee entitlements. Gold Coast businesses must comply with the national workplace relations system administered by the Fair Work Ombudsman, while also meeting obligations under the Work Health and Safety Act 2011 (Qld). Obtaining advice from a Gold Coast employment lawyer before implementing workplace changes, disciplinary action or terminations can help minimise the risk of costly disputes. Buying or selling a business Purchasing or selling a business involves more than agreeing on a price. Legal due diligence commonly includes reviewing contracts with customers and suppliers, employee arrangements, intellectual property, leases, licences and any existing disputes. A Gold Coast solicitor can also ensure sale contracts clearly document assets, liabilities, warranties and settlement obligations. Restraint of trade clauses are common in Queensland business sale agreements, protecting the goodwill a buyer pays for. They are generally only enforceable where they protect a legitimate business interest and are reasonable in duration, geographic area and restricted activities, so careful drafting is essential. Resolving disputes before they escalate Commercial disputes can arise between business partners, shareholders, suppliers, customers, landlords or employees. Many are resolved through negotiation or mediation, which is often practical and cost-effective. Where court action is required, a civil litigation lawyer can act in matters from the Magistrates Court through to the Supreme Court of Queensland. Unpaid invoices are a common trigger; debt recovery lawyers can often resolve these without proceedings, and an insolvency lawyer can advise where a customer fails. Building and construction businesses can also use the fast-track payment claim process under the Building Industry Fairness (Security of Payment) Act 2017 (Qld), although strict timeframes apply. Keeping pace with changing laws Legal compliance is not a one-off exercise. Legislation affecting employment, privacy, consumer protection and workplace safety continues to change, and regular reviews by a Gold Coast lawyer can identify outdated contracts and policies before they become significant risks. Protecting your business interests at every stage Legal advice plays an important role at every stage, from selecting the right structure and preparing contracts through to managing employees and resolving disputes. Whether you engage a commercial lawyer for day-to-day contracts and transactions or a business lawyer for structuring, employment issues and internal disputes, many legal problems can be addressed more efficiently when identified early, helping Gold Coast businesses reduce risk and make informed decisions. If you need advice about starting, operating, buying or selling a business, a Gold Coast lawyer at QBM Lawyers can review your contracts and business structure, explain your obligations under the Australian Consumer Law and relevant Queensland legislation, and assist with negotiation, dispute resolution or court proceedings where required. Contact our team to arrange a confidential discussion about your matter. Frequently Asked Questions What is the difference between a business lawyer and a commercial lawyer? The terms are often used interchangeably. Generally, commercial lawyers focus on day-to-day business operations, commercial contracts and sales transactions, while business lawyers often provide broader advice on business structures, corporate governance, employment

Entering into a commercial lease is one of the most significant legal and financial commitments a business can make. Whether you are leasing a retail shop in Southport, an office in Robina or an industrial warehouse in Burleigh Heads, the terms of your lease can have lasting consequences for your business. Commercial leases in Queensland are often lengthy, highly negotiated documents that allocate risk between landlords and tenants. A Gold Coast commercial leasing lawyer can help identify issues before the lease is signed, negotiate more favourable terms where appropriate and assist in resolving disputes if they arise. Why advice from commercial lease solicitors matters before signing Commercial leases give landlords and tenants far greater freedom to negotiate their own terms than residential tenancy agreements. Once signed, both parties are usually bound by those terms, so it is important to understand the legal and commercial implications from the outset. Experienced solicitors for commercial leases can assist by: Queensland commercial leasing is governed primarily by common law. Understanding the difference between retail and commercial leases In Queensland, leases of business premises generally fall into one of two categories: retail shop leases and non-retail commercial leases. The distinction matters because the Act provides additional protections for many retail tenants. Coverage depends on the type of premises and its intended use, so even a lease that does not appear retail at first glance may fall within the Act. Commercial lease solicitors can confirm how a lease is classified before anything is signed. Issue Retail shop lease Non-retail commercial lease Landlord’s legal costs of preparing the lease Generally cannot be passed on to the tenant Commonly paid by the tenant Land tax Cannot be recovered from the tenant Often recoverable as an outgoing Disclosure statement Required before the lease is entered into Not required Reminder of option to renew Landlord must give written notice 2 to 6 months before the option expires Only if the lease requires it Rent review Can only be by one method on each occasion Not restricted Key lease terms that should never be overlooked Many leasing disputes arise because parties focus primarily on rent while overlooking other important provisions that solicitors for commercial leases routinely review and negotiate. Rent reviews A lease should clearly explain when rent increases occur and how they are calculated, whether linked to CPI, fixed increases or market rent. Outgoings The lease should specify which expenses the tenant must pay, such as council rates, insurance, maintenance and utilities. Retail shop leases are subject to restrictions on recovery. For example, land tax and the landlord’s legal costs of preparing the lease cannot generally be passed on to the tenant. Options to renew Missing an option deadline can have serious consequences. An option must usually be exercised strictly in accordance with the lease, and a late or invalid notice may result in the loss of the right to continue occupying the premises. Retail shop landlords in Queensland must also give tenants written notice of the option period between 2 and 6 months before it expires, and a Gold Coast property lawyer can prepare and serve option notices correctly. Security Landlords commonly require a security bond, a bank guarantee or a personal guarantee from company directors, and the arrangement can often be negotiated. Gold Coast business lawyers often advise directors on guarantee risks before signing. Where a cash bond is held, registering a security interest on the Personal Property Securities Register (PPSR) can help protect those funds if the tenant becomes insolvent. Lease incentive agreements and confidential incentive deeds Commercial leasing often involves incentives and other landlord/tenant arrangements which are sometimes documented in separate deeds. Inconsistencies between the lease and the deed may create risks, including disputes over the true rent payable, misleading financiers or future purchasers about rental income and uncertainty if the property is sold. Clawback clauses also deserve scrutiny. In GWC Property Group Pty Ltd v Higginson & Ors [2014] QSC 264, the Supreme Court dismissed claims exceeding $1,000,000 for repayment of lease incentives, finding the provisions unenforceable as a penalty. QBM Lawyers acted for the guarantors in that matter, which continues to influence how incentive deeds are drafted in Queensland. What the Property Law Act 2023 (Qld) means for leases The Property Law Act 2023 (Qld) commenced on 1 August 2025, replacing the 1974 Act. Under the new Act, a tenant who assigns a lease entered into after commencement, along with that tenant’s guarantor, is generally released from liability for breaches occurring after the assignment, making tenant selection and security arrangements even more important for landlords. A commercial lawyer on the Gold Coast can advise how the new Act affects existing lease precedents. What the Property Law Act 2023 (Qld) means for leases The Property Law Act 2023 (Qld) commenced on 1 August 2025, replacing the 1974 Act. Under the new Act, a tenant who assigns a lease entered into after commencement, along with that tenant’s guarantor, is generally released from liability for breaches occurring after the assignment, making tenant selection and security arrangements even more important for landlords. A commercial lawyer on the Gold Coast can advise how the new Act affects existing lease precedents. Common commercial leasing disputes Disputes can arise before, during or after the lease term. Common issues include unpaid rent, which debt recovery lawyers are frequently engaged to pursue, disagreements over outgoings, failure to exercise an option correctly, make good obligations, alleged lease breaches, repairs, termination and personal guarantees. Many can be resolved through negotiation or mediation, and retail shop lease disputes are generally referred to the Queensland Small Business Commissioner (QSBC) for mediation before they may proceed to QCAT or, depending on the nature of the dispute, another court. Where proceedings cannot be avoided, lawyers for litigation can act in the tribunal or the courts, and early advice from a property litigation lawyer often prevents minor issues becoming costly disputes. How a Gold Coast commercial leasing lawyer protects both landlords and tenants Whether you own commercial property or

When buying a business, most people focus on the obvious: the revenue, the client list, the lease, the equipment and the goodwill. What they often don’t think to ask is whether they are also buying the seller’s unfinished work, unhappy customers and legal disputes. A Queensland District Court decision handed down in 2026 shows exactly what can happen when that question goes unasked. What happened in Lam v Wichgers? In Lam v Wichgers Family Pty Ltd [2026] QDC 74, a mechanic’s workshop known as JW Racing was engaged to restore a vintage car. Before the job was finished, the owner sold the business to a new company, Juliet Capital Pty Ltd, which took over the workshop and its jobs in progress. The customer, Mr Lam, did not realise the sale had been completed until early 2020. At that point, he continued dealing with Juliet and left the vehicle with them to complete the restoration. No formal dispute was on foot at the time of the sale. The work, however, was not finished to the required standard. When the matter came before the court, one of the key issues was what happened when the business changed hands. The new owner continued working on the restoration after the sale and Mr Lam continued dealing with the new business as though it had taken over responsibility for the project. The Court found JW Racing liable for $21,354 in damages, subject to further submissions on interest and costs. In reaching that conclusion, the judge discussed whether responsibility for the contract had effectively transferred from the seller to the buyer after the sale. That legal concept is known as novation and has important implications for anyone buying a business. In this particular instance, the judge did not find the buyer responsible for the seller’s errors in the services, but considered that in the usual course if a contract was novated, the buyer would be “obliged to complete the contract including, if necessary, to correct any prior work that did not comply with the terms of that contract” [see para 98]. What is novation and why does it matter to business buyers? Novation occurs when all parties to a contract agree – expressly or through their conduct – that a new party steps in to replace one of the original parties, taking on both the benefits and obligations of the original contract. In a business sale context, novation does not always need to be formally documented. As Lam v Wichgers demonstrates, it can happen through conduct alone, simply by continuing to perform a contract that was originally entered into by the seller. Once a court finds that novation has occurred, the incoming business owner is responsible for fulfilling that contract in its entirety, including correcting anything the outgoing owner got wrong. When you ask a Gold Coast business lawyer for advice, this is one of the first questions to address: what existing contracts and jobs in progress will I be stepping into buying this business? And what liability might follow? What obligations might continue after a business sale? While Lam v Wichgers focused on unfinished customer work, the broader lesson is that a buyer should identify all obligations connected to the business before settlement. Existing customer contracts, jobs in progress, warranty obligations, employee arrangements and known disputes should all be examined carefully during due diligence. The precise risks depend on the structure of the transaction and the terms negotiated between the parties. How can you avoid inheriting the seller’s problems? If you address these issues before settlement, rather than after, you may be able to avoid inheriting unexpected liabilities. This is where experienced Gold Coast business lawyers will be most important. Due diligence on contracts and disputes Before settlement, a buyer should receive full disclosure of all existing customer contracts, work in progress and any actual or threatened disputes. In Lam v Wichgers, the Court noted that the sale agreement contained no indemnity from JW Racing in favour of Juliet for claims arising from pre-sale work. Warranties and indemnities A well-drafted agreement should include seller warranties that there are no undisclosed disputes or defective works, and an indemnity clause requiring the seller to compensate the buyer if a pre-sale liability emerges after settlement. Treatment of existing contracts The sale agreement should address how existing customer contracts are handled, whether formally assigned, novated with the customer’s consent or wound up before completion. Employee entitlements Under Queensland’s Industrial Relations Act 2016 and the federal Fair Work framework, a buyer may inherit long service leave and other accrued entitlements. A proper disclosure schedule is essential. Gold Coast employment lawyers regularly assist buyers in auditing these obligations before contracts are signed. The cost of this thorough due diligence is modest compared to the potential cost of discovering a significant pre-sale liability after settlement, when the seller has long-since been paid and moved on. Asset sale vs share sale The structure of the sale matters significantly and is one of the most important decisions a buyer and seller make. This is a legal decision as much as a commercial one. In a share sale, the buyer acquires the company itself, together with its existing liabilities, obligations and legal risks, whether or not they have been fully identified during due diligence. In an asset sale, the buyer acquires specific assets of the business and liabilities generally remain with the seller. However, as Lam v Wichgers demonstrated, conduct after settlement can create new liabilities even in an asset sale, particularly where the buyer steps into existing customer relationships without clearly addressing the terms on which they do so. Both structures have advantages and risks. A commercial lawyer on the Gold Coast will work through the implications of each structure for the specific transaction before advising which approach is appropriate. Protect yourself before you sign Buying or selling a business is one of the most significant financial transactions most people will undertake, and the legal complexity goes well beyond what a standard contract