Manpac Industries Pty Ltd v Ceccattini [2002] NSWSC 330

Manpac Industries Pty Ltd v Ceccattini [2002] NSWSC 330

ICM was insolvent at all relevant times, including between September 1994 and May 1995. The defendants failed to prove that they had reasonable grounds to expect solvency, failed to establish the s 588H(3) defence based on Mr Turner's role and information, and failed to show that they ought fairly to be excused under s 1318. As directors of ICM when the plaintiff's debt was incurred, the first and second defendants were jointly and severally liable to the plaintiff for the agreed amount.

Jurisdiction
Australia
Judgment Date
23 April 2002
Procedural Posture
Claim Under S 588 M of the Corporations Act 2001 for Insolvent Trading Liability / Judgment After Hearing
Outcome
Verdict for the plaintiff against the first and second defendants jointly and severally for $399,090.50 and costs.
Legal Topics
['personal Liability of Directors' 'company Insolvency' 's 588 H Defences' 'reliance on Competent and Reliable Person' 'relief From Liability Under S 1318']
['corporations Law' 'insolvent Trading'] ['personal Liability of Directors' 'company Insolvency' 's 588 H Defences' 'reliance on Competent and Reliable Person' 'relief From Liability Under S 1318']

Case Brief

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Procedural Posture

Claim Under S 588 M of the Corporations Act 2001 for Insolvent Trading Liability / Judgment After Hearing

Legal Issues

  1. 1 ['Whether Industrial Concrete Manufacturing Pty Ltd was insolvent between 30 September 1994 and 18 April 1995 when debts to the plaintiff were incurred.' 'Whether the first and second defendants had reasonable grounds to expect, and did expect, that ICM was solvent and would remain solvent.' 'Whether the defendants could rely on information from Mr Goran Turner as a competent and reliable person for the purposes of s 588H(3).' 'Whether the defendants ought fairly to be excused from liability under s 1318 of the Corporations Act.']

Ratio Decidendi

ICM was insolvent at all relevant times, including between September 1994 and May 1995. The defendants failed to prove that they had reasonable grounds to expect solvency, failed to establish the s 588H(3) defence based on Mr Turner's role and information, and failed to show that they ought fairly to be excused under s 1318. As directors of ICM when the plaintiff's debt was incurred, the first and second defendants were jointly and severally liable to the plaintiff for the agreed amount.

Court Disposition

Verdict for the plaintiff against the first and second defendants jointly and severally for $399,090.50 and costs.

Orders

  • ['Verdict for the plaintiff against the defendants jointly and severally for $399,090.50 and costs.' 'The exhibits may be returned after 28 days unless there is an appeal, in which case they should be retained until the finalisation of the appeal.']