Owen as Liquidator of Davey SG Pty Ltd (in liq) v Davey, in the matter of Davey SG Pty Ltd (in liq) [2021] FCA 200

Owen as Liquidator of Davey SG Pty Ltd (in liq) v Davey, in the matter of Davey SG Pty Ltd (in liq) [2021] FCA 200

Because Mr Davey failed to appear and failed to comply with pre-trial programming orders, he was in default. The plaintiffs' evidence established that the relevant taxation and payroll tax debts were incurred during the insolvency period, that Mr Davey was the sole director including as a person acting in the position of director after disqualification, that the company was insolvent throughout the relevant period, that Mr Davey was aware of grounds for suspecting insolvency, and that no dividend would reduce the creditors' loss. The plaintiffs were therefore entitled to judgment under ss 588G and 588M for the recoverable debts, pre-judgment interest, and costs including indemnity costs...

Jurisdiction
Australia
Judgment Date
08 March 2021
Procedural Posture
Corporations Insolvent Trading Compensation Claim Under S 588 M of the Corporations Act 2001 (cth) / Default Judgment Application After Defendant Failed to Appear and Failed to Comply With Pre Trial Programming Orders
Outcome
Judgment for the plaintiffs.
Legal Topics
["director's Liability for Insolvent Trading" 'compensation for Debts Incurred During Insolvency' 'default Judgment' 'de Facto Director' 'pre Judgment Interest' 'indemnity Costs After Offer of Compromise']
['corporations' 'corporate Insolvency' 'civil Procedure'] ["director's Liability for Insolvent Trading" 'compensation for Debts Incurred During Insolvency' 'default Judgment' 'de Facto Director' 'pre Judgment Interest' 'indemnity Costs After Offer of Compromise']

Case Brief

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Procedural Posture

Corporations Insolvent Trading Compensation Claim Under S 588 M of the Corporations Act 2001 (cth) / Default Judgment Application After Defendant Failed to Appear and Failed to Comply With Pre Trial Programming Orders

Legal Issues

  1. 1 ['Whether the defendant was in default under r 5.22 of the Federal Court Rules 2011 (Cth) and whether default judgment should be entered under r 5.23(2)(b) or (c).' 'Whether Mr Davey was a director of Davey SG Pty Ltd when the relevant debts were incurred, including after his ASIC disqualification.' 'Whether Davey SG Pty Ltd was insolvent when the debts were incurred or became insolvent by incurring them.' 'Whether there were reasonable grounds for suspecting insolvency and whether Mr Davey was aware of those grounds or a reasonable person in his position would have been aware.' 'What amount was recoverable under s 588M of the Corporations Act 2001 (Cth), including interest and costs.']

Ratio Decidendi

Because Mr Davey failed to appear and failed to comply with pre-trial programming orders, he was in default. The plaintiffs' evidence established that the relevant taxation and payroll tax debts were incurred during the insolvency period, that Mr Davey was the sole director including as a person acting in the position of director after disqualification, that the company was insolvent throughout the relevant period, that Mr Davey was aware of grounds for suspecting insolvency, and that no dividend would reduce the creditors' loss. The plaintiffs were therefore entitled to judgment under ss 588G and 588M for the recoverable debts, pre-judgment interest, and costs including indemnity costs...

Court Disposition

Judgment for the plaintiffs.

Orders

  • ['Judgment for the plaintiffs in the amount of $931,024 plus pre-judgment interest in the amount of $70,718.32.' 'The defendant pay costs on a party and party basis until 14 October 2020, and on an indemnity basis from 15 October 2020.']