Alora Davies Developments 104 Pty Ltd (in liq) & Ors v Raphael & Anor [2024] NSWSC 547

Alora Davies Developments 104 Pty Ltd (in liq) & Ors v Raphael & Anor [2024] NSWSC 547

Mrs Raphael was a de facto director of the Company from 12 January 2018 to 6 May 2020; she and Mr Raphael breached directors' duties by allowing and participating in transactions that were unreasonable director-related and uncommercial, causing loss to the Company; both were liable for insolvent trading in respect of debt incurred while the Company was insolvent; APG was liable as recipient of voidable transactions; compensation and orders for payment were made accordingly.

Jurisdiction
Australia
Judgment Date
10 May 2024
Procedural Posture
Originating Process / Principal Judgment
Outcome
Declarations and orders in respect of directors' duties and under Part 5.7B of the Corporations Act 2001 (Cth) made against Defendants.
Legal Topics
["directors' Duties" 'de Facto and Shadow Directors' 'insolvent Trading' 'uncommercial Transaction' 'unreasonable Director Related Transaction' 'breach of Fiduciary Duties' 'compensation Order']
['corporations' 'equity'] ["directors' Duties" 'de Facto and Shadow Directors' 'insolvent Trading' 'uncommercial Transaction' 'unreasonable Director Related Transaction' 'breach of Fiduciary Duties' 'compensation Order']

Case Brief

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Procedural Posture

Originating Process / Principal Judgment

Legal Issues

  1. 1 ['Whether Second Defendant was a de facto or shadow director of the Company' 'Whether directors breached duties under ss 180–182 of the Corporations Act 2001 (Cth)' 'Whether directors caused company to enter uncommercial transactions' 'Whether directors caused funds to be transferred to related entity absent any benefit to the company' 'Whether directors procured loan to the company while it was insolvent' 'Whether transactions amount to unfair preferences, uncommercial transactions, unreasonable-director related transactions and insolvent transactions under Part 5.7B of the Corporations Act 2001 (Cth)']

Ratio Decidendi

Mrs Raphael was a de facto director of the Company from 12 January 2018 to 6 May 2020; she and Mr Raphael breached directors' duties by allowing and participating in transactions that were unreasonable director-related and uncommercial, causing loss to the Company; both were liable for insolvent trading in respect of debt incurred while the Company was insolvent; APG was liable as recipient of voidable transactions; compensation and orders for payment were made accordingly.

Court Disposition

Declarations and orders in respect of directors' duties and under Part 5.7B of the Corporations Act 2001 (Cth) made against Defendants.

Orders

  • ['First Defendant to pay Company $300,000 for Keshian Debt' 'Second Defendant to pay Company $300,000 for Keshian Debt' 'Third Defendant to pay Company $75,757.48 (APG 11 July Payment)' 'First Defendant to pay Company $75,757.48 under s 1317H' 'Second Defendant to pay Company $75,757.48 under s 1317H' 'Third...