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Wife of former Queensland property magnate's application for annulment of bankruptcy dismissed

An application to annul the bankruptcy of Jacqueline Mulhearn, the wife of former Queensland property magnate Richard Mulhearn and co-director of the Mulhearn Group, has been dismissed.

After one unsuccessful attempt to have her bankruptcy put aside in 2012, Mulhearn again attempted to have her bankruptcy annulled. The Bank of Queensland applied to have her annulment dismissed on the grounds that it was an abuse of process, in a case that was heard simultaneously in the Federal Court.

Jacqueline Mulhearn’s husband, Richard Mulhearn, once headed the Mulhearn Group, employing around 250 staff. Their properties included a Gladstone shopping centre and the Dicey Reilly pub chain.  As a client of the Bank of Queensland, the Mulhearn Group’s debts at one stage neared $57 million.

In May 2010, five days before the Bank of Queensland appointed receivers to the Mulhearn Group, Jacqueline Mulhearn withdrew $480,000 from the group’s accounts, placing the money in her personal account. The Bank of Queensland froze Mulhearn’s assets, an order which Mulhearn unsuccessfully fought in the courts.

That year, the Bank of Queensland also appointed receivers to the assets of Richard Mulhearn, and he was bankrupted.

A warrant was issued for Richard Mulhearn’s arrest in 2011, following his alleged failure to co-operate with bankruptcy trustees, leaving the country twice without permission. Mulhearn has commented in court and to the press that the trustees were “invalidly” appointed. At the time, allegations were also raised that Mulhearn used an alias, “Derek O’Malley”, which Mulhearn denied.

Jacqueline Mulhearn also left the country in May of that year, living in New York for around 12 months before moving to Northern Ireland to obtain medical treatment.

In January 2012, Richard Mulhearn was arrested at Sydney Airport. His passports were confiscated, causing Mulhearn to miss his father’s funeral in Ireland. That year, Jacqueline Mulhearn was ordered to pay the legal costs of the receivers of the Mulhearn Group after they successfully applied to recover the money she withdrew from the group. As a result of the $24,181 payment, she was rendered bankrupt.

According to the Bank of Queensland, she was served the bankruptcy notice at her New York address and by email. But Mulhearn argued that she had left New York by that date, and no longer used that email address. As a result, she did not comply with the notice, committing an act of bankruptcy.

In October 2012, Mulhearn applied to have the bankruptcy annulled, arguing that the notice was not properly served to her. She also argued that she did not reside in Queensland, so the state’s courts had no jurisdiction to make an order against her, as a non-resident of Australia. The judge dismissed her application at that time, noting that the Mulhearns provided no verifiable details of their financial assets to the courts. He also commented that in June 2012 (around three weeks after the date of bankruptcy), Mulhearn had provided a Queensland address as her place of business, placing her under the state’s jurisdiction.

In the most recent hearing before the Federal Court, which took place late last year, Mulhearn again attempted to have her bankruptcy annulled. However, the court found that she presented no new evidence, and, by attempting to have a “second bite of the same cherry”, had committed an abuse of process.

In his concluding statements, the judge noted that Mulhearn’s application for annulment “could not have succeeded on its merits and in any event was doomed to failure as an abuse of process.”

jrichardson@propertyobserver.com.au

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