Skouloudis Group Pty Limited v Planet Enterprizes Pty Limited [2002] NSWSC 239

Skouloudis Group Pty Limited v Planet Enterprizes Pty Limited [2002] NSWSC 239

The plaintiffs bore the onus of establishing that the sale was uncommercial. On the incomplete evidence, although the company was insolvent and the transaction was not at arm's length, it was not shown that a reasonable person in the company's circumstances would not have entered into the transaction. The purchaser's assumption and discharge of business liabilities could benefit the company, and the evidence did not establish that a higher price was available at the relevant time or that the company was worse off. The transaction was therefore not proved to be an uncommercial transaction.

Jurisdiction
Australia
Judgment Date
28 March 2002
Procedural Posture
Corporations; Winding Up; Alleged Insolvent and Uncommercial Transaction / Summons Seeking to Set Aside the Sale of the O Kosmos Newspaper Business as a Voidable Transaction
Outcome
Summons dismissed with costs.
Legal Topics
['winding Up' 'insolvent Transactions' 'uncommercial Transactions' 'voidable Transactions' 'sale of Company Business']
['corporations Law' 'insolvency'] ['winding Up' 'insolvent Transactions' 'uncommercial Transactions' 'voidable Transactions' 'sale of Company Business']

Case Brief

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Procedural Posture

Corporations; Winding Up; Alleged Insolvent and Uncommercial Transaction / Summons Seeking to Set Aside the Sale of the O Kosmos Newspaper Business as a Voidable Transaction

Legal Issues

  1. 1 ['Whether the sale of the O Kosmos newspaper business was an insolvent transaction within the meaning of the Corporations Act 2001.' 'Whether the sale was an uncommercial transaction under s588FB of the Corporations Act 2001 and therefore voidable under s588FE.' 'Whether the Court should make orders under s588FF(1) of the Corporations Act 2001.']

Ratio Decidendi

The plaintiffs bore the onus of establishing that the sale was uncommercial. On the incomplete evidence, although the company was insolvent and the transaction was not at arm's length, it was not shown that a reasonable person in the company's circumstances would not have entered into the transaction. The purchaser's assumption and discharge of business liabilities could benefit the company, and the evidence did not establish that a higher price was available at the relevant time or that the company was worse off. The transaction was therefore not proved to be an uncommercial transaction.

Court Disposition

Summons dismissed with costs.

Orders

  • ['The summons be dismissed with costs.']