Cook's Construction Pty Ltd v Brown & Anor [2004] NSWCA 105

Cook's Construction Pty Ltd v Brown & Anor [2004] NSWCA 105

The appellant bore the onus of proving that it had no reasonable grounds for suspecting DML's insolvency at the time of the 30 May 1997 payment. The relevant corporate knowledge was not confined to Mrs Trende, because persons at the Gladstone office made numerous verbal requests for payment and received promises to pay. The appellant did not call those persons, and there was no evidence that they were unavailable. In those circumstances the primary judge was entitled not to infer, from indirect and second-hand evidence, that the appellant had no reasonable grounds for suspecting insolvency. Because the appellant failed to satisfy the subjective requirement of s 588FG(2)(b)(i), its defence...

Jurisdiction
Australia
Judgment Date
22 March 2004
Procedural Posture
Corporations Appeal Concerning Alleged Preference Under S 588 FF of the Corporations Act 2001 / Appeal From the District Court of New South Wales
Outcome
Appeal dismissed with costs.
Legal Topics
['unfair Preference' 'voidable Transactions' 'defence Under S 588 Fg' 'reasonable Grounds for Suspecting Insolvency' 'corporate State of Mind' 'jones V Dunkel Inference' 'onus of Proof']
['corporations' 'insolvency' 'evidence'] ['unfair Preference' 'voidable Transactions' 'defence Under S 588 Fg' 'reasonable Grounds for Suspecting Insolvency' 'corporate State of Mind' 'jones V Dunkel Inference' 'onus of Proof']

Case Brief

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Procedural Posture

Corporations Appeal Concerning Alleged Preference Under S 588 FF of the Corporations Act 2001 / Appeal From the District Court of New South Wales

Legal Issues

  1. 1 ['Whether the appellant proved that, at the time it received payment from DML, it had no reasonable grounds for suspecting that DML was insolvent or would become insolvent within s 588FG(2)(b)(i).' "Whether a reasonable person in the appellant's circumstances would have had no reasonable grounds for suspecting insolvency within s 588FG(2)(b)(ii)." "Whether the primary judge wrongly applied the rule in Jones v Dunkel or otherwise erred by taking account of the appellant's failure to call witnesses from its Gladstone office." 'How the relevant state of mind or knowledge of a corporation is to be assessed for the purposes of the s 588FG defence.']

Ratio Decidendi

The appellant bore the onus of proving that it had no reasonable grounds for suspecting DML's insolvency at the time of the 30 May 1997 payment. The relevant corporate knowledge was not confined to Mrs Trende, because persons at the Gladstone office made numerous verbal requests for payment and received promises to pay. The appellant did not call those persons, and there was no evidence that they were unavailable. In those circumstances the primary judge was entitled not to infer, from indirect and second-hand evidence, that the appellant had no reasonable grounds for suspecting insolvency. Because the appellant failed to satisfy the subjective requirement of s 588FG(2)(b)(i), its defence...

Court Disposition

Appeal dismissed with costs.

Orders

  • ['Appeal dismissed with costs.']