International Skin Care Suppliers Pty Ltd v Whyte [2011] NSWSC 463

International Skin Care Suppliers Pty Ltd v Whyte [2011] NSWSC 463

Indio vacated its business field in favour of Industry Only via a plan that involved transferring its assets and profit-making apparatus. The transfer was made with intent to defraud creditors and violated the Bank's charge security. Industry Only received the property with notice of the Bank's interest, and the entire alienation is voidable under s 37A. Property must be restored and re-vested in Indio, and Industry Only is to be restrained from interfering with plaintiffs' possession of business premises.

Parties
First Plaintiff: Paul Andrew Billingham; Second Plaintiff: Gayle Louise Dickerson; Third Plaintiff: International Skin Care Suppliers Pty Ltd (receivers and managers appointed); First Defendant: Eileen Ann Whyte; Second Defendant: Industry Only Pty Limited
Jurisdiction
Australia
Judgment Date
24 May 2011
Procedural Posture
Equity – Corporations List / Principal Judgment
Outcome
Judgment for plaintiffs; declaratory and restorative orders.
Legal Topics
Avoidance of Alienation of Property With Intent to Defraud Creditors, Phoenix Company, Trusts, Corporate Control and Fiduciary Duties
Bankruptcy and Insolvency Corporations Law Equity Avoidance of Alienation of Property With Intent to Defraud Creditors Phoenix Company Trusts Corporate Control and Fiduciary Duties

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Parties

Paul Andrew Billingham

First Plaintiff

Gayle Louise Dickerson

Second Plaintiff

International Skin Care Suppliers Pty Ltd (receivers and managers appointed)

Third Plaintiff

Eileen Ann Whyte

First Defendant

Industry Only Pty Limited

Second Defendant

Procedural Posture

Equity – Corporations List / Principal Judgment

Legal Issues

  1. 1 Whether asset transfers from Indio to Industry Only Pty Ltd were voidable for intent to defraud creditors under s 37A Conveyancing Act 1919
  2. 2 Whether Industry Only Pty Ltd holds transferred property on trust for Indio
  3. 3 Whether such transactions breached the Bank's charge and equitable interest

Ratio Decidendi

Indio vacated its business field in favour of Industry Only via a plan that involved transferring its assets and profit-making apparatus. The transfer was made with intent to defraud creditors and violated the Bank's charge security. Industry Only received the property with notice of the Bank's interest, and the entire alienation is voidable under s 37A. Property must be restored and re-vested in Indio, and Industry Only is to be restrained from interfering with plaintiffs' possession of business premises.

Court Disposition

Judgment for plaintiffs; declaratory and restorative orders.

Orders

  • Plaintiffs are entitled to possession of 12-14 Macintosh Street, Mascot under lease agreements dated 1 May 2009 and 10 December 2009.
  • Industry Only Pty Ltd holds all assets, undertaking, fittings, fixtures, plant and equipment, intellectual property, goodwill and stock used in the 'Indio' business on trust for International Skin Care Suppliers Pty Ltd (receivers and managers appointed).