In the matter of Swan Services Pty Limited (in liquidation) [2016] NSWSC 1724

In the matter of Swan Services Pty Limited (in liquidation) [2016] NSWSC 1724

Ms Swan was not a de facto director of Swan Services or its associated companies during the relevant period. The presumption of insolvency applied throughout, and insolvency was also established as a matter of fact for all relevant entities. Reasonable suspicion of insolvency and awareness of such grounds existed throughout among the relevant actors (or, for Ms Swan, if she were a de facto director). The 2003 Loan Agreement did not create an enforceable charge due to uncertainty, and thus Ms Swan was not a secured creditor on repayment; repayment thus constituted a voidable preference. Defences based on expectation of solvency or reliance on others were not made out. For s 588M loss and...

Parties
Plaintiff/first Cross Defendant: Judith Louise Swan; Second Cross Defendant: Robert John Swan; Defendant/first Cross Claimant: Swan Services Pty Limited (in liquidation); Second Cross Claimant: Anthony Wayne Elkerton; Third Cross Claimant: Superior Cleaners WA Pty Limited (in liquidation); Fourth Cross Claimant: Cleaners ACT Pty Limited (in liquidation); Fifth Cross Claimant: Cleaners Vic Pty Limited (in liquidation); Sixth Cross Claimant: Cleaners SA Pty Limited (in liquidation); Seventh Cross Claimant: Cleaners Qld Pty Limited (in liquidation); Eighth Cross Claimant: Cleaners New South Wales Pty Limited (in liquidation)
Jurisdiction
Australia
Judgment Date
06 December 2016
Procedural Posture
Principal Judgment / Judgment After Trial/full Hearing
Outcome
Parties to bring in agreed orders to give effect to judgment, including as to costs, within 14 days, or (if no agreement) their respective draft orders and short submissions as to differences, indicating whether an oral hearing is required.
Legal Topics
Insolvent Trading, Voidable Transactions, De Facto Director Liability, Corporate Charges, Uncommercial Transactions, Security Interests, Director Related Transactions, Liquidation, Creditor Claims, Extension of Time for Registration of Charge
Corporations Law Insolvency Insolvent Trading Voidable Transactions De Facto Director Liability Corporate Charges Uncommercial Transactions Security Interests +4 more

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Parties

Judith Louise Swan

Plaintiff/first Cross Defendant

Robert John Swan

Second Cross Defendant

Swan Services Pty Limited (in liquidation)

Defendant/first Cross Claimant

Anthony Wayne Elkerton

Second Cross Claimant

Superior Cleaners WA Pty Limited (in liquidation)

Third Cross Claimant

Cleaners ACT Pty Limited (in liquidation)

Fourth Cross Claimant

Cleaners Vic Pty Limited (in liquidation)

Fifth Cross Claimant

Cleaners SA Pty Limited (in liquidation)

Sixth Cross Claimant

Cleaners Qld Pty Limited (in liquidation)

Seventh Cross Claimant

Cleaners New South Wales Pty Limited (in liquidation)

Eighth Cross Claimant

Procedural Posture

Principal Judgment / Judgment After Trial/full Hearing

Legal Issues

  1. 1 Whether Ms Swan was a de facto director of Swan Services and/or the associated companies during the relevant period
  2. 2 Whether Swan Services and the associated companies were insolvent during the relevant period and incurred debts in such circumstances
  3. 3 Whether there were reasonable grounds for suspecting or awareness of insolvency by Mr Swan and Ms Swan

Ratio Decidendi

Ms Swan was not a de facto director of Swan Services or its associated companies during the relevant period. The presumption of insolvency applied throughout, and insolvency was also established as a matter of fact for all relevant entities. Reasonable suspicion of insolvency and awareness of such grounds existed throughout among the relevant actors (or, for Ms Swan, if she were a de facto director). The 2003 Loan Agreement did not create an enforceable charge due to uncertainty, and thus Ms Swan was not a secured creditor on repayment; repayment thus constituted a voidable preference. Defences based on expectation of solvency or reliance on others were not made out. For s 588M loss and...

Court Disposition

Parties to bring in agreed orders to give effect to judgment, including as to costs, within 14 days, or (if no agreement) their respective draft orders and short submissions as to differences, indicating whether an oral hearing is required.