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ARTICLE · 24 JULY 2026

Dig Deeper Before You Litigate – Evidence Lessons For Liquidators

Piper Alderman
Piper Alderman
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A Federal Court decision examines whether liquidators can rely on accounting entries alone to pursue debt recovery, or whether suspicious book entries require stronger evidence to overcome a nil balance shown in company records. The case highlights critical evidentiary thresholds for insolvency practitioners when challenging transactions made shortly before liquidation.

AustraliaInsolvency/Bankruptcy/Re-Structuring
Joanne Hardwick
Joanne Hardwick
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The facts

In Marsden, in the matter of Empire Consortium Group (in liq) v Nationwide Plant Hire [2026] FCA 911, liquidators pursued Nationwide for a substantial debt allegedly owed to Empire—despite the MYOB ledger recording a nil balance between the parties at the appointment date.

The liquidators argued that two book entries made close to the appointment date—when Empire was clearly insolvent—were not legitimate transactions. These “Zero Entries” (credits of $795,450 and $842,253.84) wiped out Nationwide’s indebtedness shortly before the appointment.

The outcome

Derrington J dismissed the claim. Despite the suspicious circumstances, the Court found there was insufficient evidence—beyond mere suspicion—that the transactions were not legitimate.

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