7 figures, safe harbours, and cash flow: What Star Recruitment v Smith means for directors
What happened
In December 2025, the Queensland Supreme Court handed down a judgment that will have immediate implications for directors who traded through the pandemic, write Roy Kim, Jason Wang, and Seunghyun Jin. Star Recruitment Service Pty Ltd v Smith QSC 334 resulted in a director being held personally liable for over $1. This matters for Professional Services & HR because capacity and lead-time signals can move supplier prioritization, award timing, and contingency lanes with 2025, 334, 1.1 as the clearest commercial anchors; buyers should plan for rate card updates
Buyer takeaway
For Professional Services & HR, this is mainly an availability and execution signal; sequencing, fallback coverage, and supplier responsiveness may matter more than list price
Cost / money
Tighter availability often shows up later as expediting, standby, or substitution cost. The immediate job is to see where delays could become avoidable spend
Supplier / commercial
Capacity pressure usually strengthens supplier leverage. Check who can still commit on timing, what backup coverage exists, and whether current contract language protects against slippage
Safety / operations
Where supplier availability tightens, schedule pressure can spill into safety or quality risk if teams start accepting late substitutions or compressed mobilization windows
What to watch
Watch lead times, crew or vessel allocation, and whether suppliers are quietly narrowing commitment windows before the next sourcing gate
Key facts
- In December 2025, the Queensland Supreme Court handed down a judgment that will have immediat
- Star Recruitment Service Pty Ltd v Smith QSC 334 resulted in a director being held personally
- 1 million in insolvent trading debts – a stark reminder that while the COVID-19 safe harbour
- The debate over section 588GAAA You’re out of free articles for this month To continue readin
Source excerpts
For directors, the message is clear: the COVID-19 safe harbour served its purpose, but those who continued trading beyond its expiry without addressing underlying solvency issues now face substantial personal exposure
The CERPO Act was introduced amid the most severe economic disruption in living memory, with parliament expressly intending to "keep Australians in jobs and businesses in business" by providing "temporary relief for directors from any personal liability for trading while insolvent
Roy Kim is a partner, Jason Wang is a counsel, and Seunghyun Jin is a solicitor at Baystone Legal
