Investwell Pty Ltd (in liquidation) v Daryl Leon Roberts [2011] NSWSC 783

Investwell Pty Ltd (in liquidation) v Daryl Leon Roberts [2011] NSWSC 783

The Roberts' payment was recoverable as a voidable unfair preference because Mr Roberts was a related entity, the payment was made within the relevant relation-back period, the company was insolvent at the time of payment, and the debt owed to Mr Roberts was unsecured. Clause 21 did not create security because it required Mr Roberts to request security and he never did so. The company's assets of $169,261.83 were substantially less than debts of $523,144.21, and after the payment it had no cash to pay its debts.

Jurisdiction
Australia
Judgment Date
28 June 2011
Procedural Posture
Application by Company in Liquidation and Liquidator for Orders Under S 588 Ff(1)(a) of the Corporations Act 2001 (cth), With Cross Claim for Indemnity / Ex Tempore Principal Judgment After Hearing
Outcome
The liquidator and company succeeded against Mr Roberts; orders were made for payment to the company of $164,306.83 plus interest and costs, and for Mr Normoyle and Ms Huxley to pay Mr Roberts $45,807 under the indemnity.
Legal Topics
['winding Up' 'unfair Preference' 'voidable Transaction' 'insolvent Transaction' 'unsecured Debt' 'director Payment' 'indemnity']
['corporations Law' 'insolvency'] ['winding Up' 'unfair Preference' 'voidable Transaction' 'insolvent Transaction' 'unsecured Debt' 'director Payment' 'indemnity']

Case Brief

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Procedural Posture

Application by Company in Liquidation and Liquidator for Orders Under S 588 Ff(1)(a) of the Corporations Act 2001 (cth), With Cross Claim for Indemnity / Ex Tempore Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the payment of $164,306.83 to Mr Roberts was an unfair preference and voidable transaction under the Corporations Act 2001 (Cth).' "Whether the company was insolvent as at the date of the Roberts' payment." "Whether Mr Roberts' debt was unsecured notwithstanding cl 21 of the Directors & Shareholders Agreement." 'Whether Mr Normoyle and Ms Huxley were liable to indemnify Mr Roberts under cl 22 of the agreement.']

Ratio Decidendi

The Roberts' payment was recoverable as a voidable unfair preference because Mr Roberts was a related entity, the payment was made within the relevant relation-back period, the company was insolvent at the time of payment, and the debt owed to Mr Roberts was unsecured. Clause 21 did not create security because it required Mr Roberts to request security and he never did so. The company's assets of $169,261.83 were substantially less than debts of $523,144.21, and after the payment it had no cash to pay its debts.

Court Disposition

The liquidator and company succeeded against Mr Roberts; orders were made for payment to the company of $164,306.83 plus interest and costs, and for Mr Normoyle and Ms Huxley to pay Mr Roberts $45,807 under the indemnity.

Orders

  • ['Orders against the defendant under s 588FF(1)(a) of the Corporations Act 2001 (Cth) for the payment to the company of $164,306.83 plus interest and costs.' 'Orders for the payment by the first and second respondents to the defendant of $45,807 under the indemnity given by them to him.' 'The plaintiffs and Mr...