Go Electrical Pty Limited v Neil Gregory McGarvey & Ors [2009] NSWDC 312

Go Electrical Pty Limited v Neil Gregory McGarvey & Ors [2009] NSWDC 312

The Debtor was insolvent from at least 30 June 2006 and remained insolvent when the plaintiff's debts were incurred. The Debtor's balance sheet, Report As To Affairs, aged debtors, trade creditor position, overdraft position, unrecoverable or disputed assets, and inability to obtain related-entity funding...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
04 November 2009
Procedural Posture
Civil Insolvent Trading Claim Under S 588 G(2) of the Corporations Act (2001) / Ex Tempore Judgment
Outcome
Judgment for the plaintiff against the defendants.
Legal Topics
['insolvent Trading' 'director Liability' 'proof of Insolvency' 'balance Sheet Analysis' 'cash Flow Analysis' 'liquidator Evidence' 'costs']
['corporations Law' 'insolvency' 'civil Litigation'] ['insolvent Trading' 'director Liability' 'proof of Insolvency' 'balance Sheet Analysis' 'cash Flow Analysis' 'liquidator Evidence' 'costs']

Source-derived case record

Summary, issues, holding and outcome

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Procedural Posture

Civil Insolvent Trading Claim Under S 588 G(2) of the Corporations Act (2001) / Ex Tempore Judgment

Legal Issues

  1. 1 ['Whether the Debtor was insolvent when it incurred debts to the plaintiff between 2 October 2006 and 18 January 2007.' 'Whether the defendant directors knew, or a reasonable person in their position would have known, that the Debtor was insolvent or that there were reasonable grounds for suspecting insolvency.' 'Whether the plaintiff was entitled to recover its unpaid debt from the defendant directors under the Corporations Act (2001).']

Ratio Decidendi

The Debtor was insolvent from at least 30 June 2006 and remained insolvent when the plaintiff's debts were incurred. The Debtor's balance sheet, Report As To Affairs, aged debtors, trade creditor position, overdraft position, unrecoverable or disputed assets, and inability to obtain related-entity funding demonstrated serious insolvency. The defendant directors knew, and in any event reasonable directors in their position would have known, of facts giving reasonable grounds to suspect insolvency. The plaintiff therefore proved its insolvent trading claim and was entitled to judgment for the unpaid debt and interest.

Court Disposition

Judgment for the plaintiff against the defendants.

Orders

  • ['Verdict in favour of the plaintiff against the defendants in the amount of $144,332.16.' 'The defendants are to pay the plaintiff interest in the amount of $39,289.99.' 'Judgment for the plaintiff against the defendants in the amount of $183,622.15.' "The defendants are to pay the plaintiff's costs of the...