Hawcroft General Trading Co Pty Ltd v Edgar, Anthony MacInnes & Anor [1996] FCA 439

Hawcroft General Trading Co Pty Ltd v Edgar, Anthony MacInnes & Anor [1996] FCA 439

As at 26 March 1993, the directors had reasonable grounds to expect ISP would not be able to pay its debts as and when they became due, given the company’s financial position, lack of inquiries into available funds, and awareness of shortfalls in expected payments. Neither director established a defence under s592(2); thus, both are jointly and severally liable for the debt and costs.

Jurisdiction
Australia
Judgment Date
04 June 1996
Procedural Posture
Corporations Law Application / Final Judgment
Outcome
Application granted; respondents found liable.
Legal Topics
['director Liability' 'insolvent Trading' 'section 592 Corporations Law']
['corporations Law'] ['director Liability' 'insolvent Trading' 'section 592 Corporations Law']

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Procedural Posture

Corporations Law Application / Final Judgment

Legal Issues

  1. 1 ['Whether directors had reasonable grounds to expect the company would not be able to pay its debts as and when they became due under s 592(1) of the Corporations Law' 'Whether directors could establish a defence under s 592(2)']

Ratio Decidendi

As at 26 March 1993, the directors had reasonable grounds to expect ISP would not be able to pay its debts as and when they became due, given the company’s financial position, lack of inquiries into available funds, and awareness of shortfalls in expected payments. Neither director established a defence under s592(2); thus, both are jointly and severally liable for the debt and costs.

Court Disposition

Application granted; respondents found liable.

Orders

  • ['Respondents have contravened s 592(1) of the Corporations Law.' 'Directors are jointly and severally liable to pay the debt.' 'Respondents to pay applicant the sum of $23,580 with interest.' "Respondents to pay applicant's costs."]