Woodgate v Davis [2002] NSWSC 616

Woodgate v Davis [2002] NSWSC 616

A corporate partner may incur a debt for the purposes of s.588G of the Corporations Act 2001 (Cth) when a partner or authorised person acts within the scope of the partnership business so as to create a partnership debt; neither partnership law, insolvency rules concerning joint and separate estates, nor Part 5.7 of the Corporations Act manifests an intention excluding s.588G and related provisions from applying to directors of corporate partners in respect of partnership debts.

Jurisdiction
Australia
Judgment Date
12 July 2002
Procedural Posture
Corporations Claim for Director Liability for Insolvent Trading Involving Companies Carrying on Business in Partnership / Determination of Separate and Preliminary Questions Pursuant to Part 31 Rule 2 of the Supreme Court Rules
Outcome
Question 1 answered No; Question 2 does not arise.
Legal Topics
['liability of Directors for Insolvent Trading' 'partnership Debts Incurred by Corporate Partners' 'creditors Voluntary Winding Up' 'part 5.7 Bodies' 'joint and Separate Estates in Insolvency']
['corporations Law' 'partnership Law' 'insolvency Law'] ['liability of Directors for Insolvent Trading' 'partnership Debts Incurred by Corporate Partners' 'creditors Voluntary Winding Up' 'part 5.7 Bodies' 'joint and Separate Estates in Insolvency']

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Procedural Posture

Corporations Claim for Director Liability for Insolvent Trading Involving Companies Carrying on Business in Partnership / Determination of Separate and Preliminary Questions Pursuant to Part 31 Rule 2 of the Supreme Court Rules

Legal Issues

  1. 1 ['Whether paragraph 17 of the Defence provided a complete defence to the Statement of Claim.' 'Whether, on their proper construction, sections 588G and 588M of the Corporations Act 2001 (Cth) are unavailable where the debts sued upon are debts incurred by a partnership in which one or more partners is a company.' 'Whether a company that is a partner in a partnership incurs a debt for the purposes of s.588G when a partnership debt is incurred.' 'Whether partnership, bankruptcy or Part 5.7 provisions disclose a legislative intention that s.588G not apply to partnership debts incurred by a corporate partner.']

Ratio Decidendi

A corporate partner may incur a debt for the purposes of s.588G of the Corporations Act 2001 (Cth) when a partner or authorised person acts within the scope of the partnership business so as to create a partnership debt; neither partnership law, insolvency rules concerning joint and separate estates, nor Part 5.7 of the Corporations Act manifests an intention excluding s.588G and related provisions from applying to directors of corporate partners in respect of partnership debts.

Court Disposition

Question 1 answered No; Question 2 does not arise.

Orders

  • ['Question 1: No.' 'Question 2: Does not arise.']