Carter, in the matter of Townsville Electronics Service Centre Pty Ltd (In Liquidation) v Sinclair [2020] FCA 547

Carter, in the matter of Townsville Electronics Service Centre Pty Ltd (In Liquidation) v Sinclair [2020] FCA 547

The evidence and pleaded facts did not support awareness of insolvency from 23 September 2013, but the imposition on 1 November 2013 of five penalties for failure to lodge activity statements supported the conclusion that by 30 November 2013 Mr Sinclair was either aware that the company was insolvent or that a reasonable person in a like position would have been aware of it. The plaintiffs were therefore entitled to judgment against him for debts incurred to the ATO on and from 1 December 2013 until 22 February 2016, with pre-judgment interest.

Jurisdiction
Australia
Judgment Date
24 April 2020
Procedural Posture
Corporations Proceeding Concerning Insolvent Trading Claim Against a Director / Amended Interlocutory Application for Judgment After Supplementary Submissions
Outcome
The plaintiffs were held entitled to judgment against Bradley James Sinclair for all debts incurred to the ATO on and from 1 December 2013 until 22 February 2016 together with pre-judgment interest calculated under s 51A of the Federal Court of Australia Act 1976 (Cth) to the date of entry of judgment.
Legal Topics
['insolvent Trading' 'director Liability' 'interlocutory Judgment' 'pre Judgment Interest']
['corporations' 'corporate Insolvency' 'civil Procedure'] ['insolvent Trading' 'director Liability' 'interlocutory Judgment' 'pre Judgment Interest']

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Procedural Posture

Corporations Proceeding Concerning Insolvent Trading Claim Against a Director / Amended Interlocutory Application for Judgment After Supplementary Submissions

Legal Issues

  1. 1 ['Whether the plaintiffs were entitled to interlocutory judgment against Bradley James Sinclair for alleged contraventions of s 588G of the Corporations Act 2001 (Cth).' "Whether the pleaded facts and evidence established when a reasonable person in Mr Sinclair's position would have been aware of grounds for suspecting that the company was insolvent." 'Whether judgment should be entered for debts incurred to the ATO and pre-judgment interest under s 51A of the Federal Court of Australia Act 1976 (Cth).']

Ratio Decidendi

The evidence and pleaded facts did not support awareness of insolvency from 23 September 2013, but the imposition on 1 November 2013 of five penalties for failure to lodge activity statements supported the conclusion that by 30 November 2013 Mr Sinclair was either aware that the company was insolvent or that a reasonable person in a like position would have been aware of it. The plaintiffs were therefore entitled to judgment against him for debts incurred to the ATO on and from 1 December 2013 until 22 February 2016, with pre-judgment interest.

Court Disposition

The plaintiffs were held entitled to judgment against Bradley James Sinclair for all debts incurred to the ATO on and from 1 December 2013 until 22 February 2016 together with pre-judgment interest calculated under s 51A of the Federal Court of Australia Act 1976 (Cth) to the date of entry of judgment.

Orders

  • ['The solicitors for the plaintiff submit to the Court within seven days proposed orders giving effect to the reasons for judgment published today.' 'Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for...