Dracoma Pty Ltd v Changela [2025] NSWSC 83

Dracoma Pty Ltd v Changela [2025] NSWSC 83

The fifth defendant did not act in the position of director and is not liable as such; the third and fourth defendants were directors for the purposes of the Corporations Act 2001 (Cth). The assignment of claims by the liquidator to the plaintiff was effective for claims under Part 5.7B, and for breach of fiduciary and general law directors' duties. Advances made to the company were loans, not equity. The company was insolvent from no later than 31 December 2017. Certain payments were voidable as unfair preferences or unreasonable director-related transactions.

Parties
Plaintiff: Dracoma Pty Ltd; First Defendant: Radhika Rajan Changela; Second Defendant: Sweta Prashant Changela; Third Defendant: Vijay Chandrashanker Pandya; Fourth Defendant: Prashant Girishbhai Changela; Fifth Defendant: Rajan Girishbhai Changela; Sixth Defendant: Changela Food Pty Ltd; Seventh Defendant: Vijay Pandya Pty Ltd
Jurisdiction
Australia
Judgment Date
21 February 2025
Procedural Posture
Equity Commercial List / Principal Judgment
Outcome
Certain assigned claims succeed; certain payments declared voidable; other claims, including under fiduciary duty and s 37A, not established or not determinative; relief and form of orders to be agreed between parties.
Legal Topics
Assignment of Causes of Action, Voidable Transactions, Directors and Officers, De Facto Directors, Breach of Fiduciary Duty, Unfair Preferences, Unreasonable Director Related Transactions, Company Insolvency
Equity Corporations Assignment of Causes of Action Voidable Transactions Directors and Officers De Facto Directors Breach of Fiduciary Duty Unfair Preferences +2 more

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Parties

Dracoma Pty Ltd

Plaintiff

Radhika Rajan Changela

First Defendant

Sweta Prashant Changela

Second Defendant

Vijay Chandrashanker Pandya

Third Defendant

Prashant Girishbhai Changela

Fourth Defendant

Rajan Girishbhai Changela

Fifth Defendant

Changela Food Pty Ltd

Sixth Defendant

Vijay Pandya Pty Ltd

Seventh Defendant

Procedural Posture

Equity Commercial List / Principal Judgment

Legal Issues

  1. 1 Are the causes of action regarding voidable transactions, fiduciary duties, statutory and general law directors' duties capable of assignment under the Corporations Act 2001 (Cth)?
  2. 2 Did the third, fourth, and fifth defendants act in the position of directors of the company?
  3. 3 Were the loans advanced to the company properly characterised as loans or equity?

Ratio Decidendi

The fifth defendant did not act in the position of director and is not liable as such; the third and fourth defendants were directors for the purposes of the Corporations Act 2001 (Cth). The assignment of claims by the liquidator to the plaintiff was effective for claims under Part 5.7B, and for breach of fiduciary and general law directors' duties. Advances made to the company were loans, not equity. The company was insolvent from no later than 31 December 2017. Certain payments were voidable as unfair preferences or unreasonable director-related transactions.

Court Disposition

Certain assigned claims succeed; certain payments declared voidable; other claims, including under fiduciary duty and s 37A, not established or not determinative; relief and form of orders to be agreed between parties.