TCN Channel Nine Pty Ltd v Scotney, R.S. [1995] FCA 250

TCN Channel Nine Pty Ltd v Scotney, R.S. [1995] FCA 250

The applicant failed to prove on the balance of probabilities that as at 24 April or 3 May 1991, there were not reasonable grounds for a director to expect the company could pay all its debts as and when they became due. At the time the relevant debts were incurred, there was evidence—including prior successful...

Source-derived case information.

Parties
Applicant: TCN Channel Nine Pty Limited; Respondent: Roslyn Shirley Scotney
Jurisdiction
Australia
Judgment Date
26 April 1995
Procedural Posture
Civil / Final Judgment After Hearing
Outcome
Application dismissed with costs (except any costs awarded to applicant in interlocutory proceedings)
Legal Topics
Directors' Liability, Insolvent Trading, Reasonable Grounds to Expect, Section 592 Corporations Law
Corporations Law Directors' Liability Insolvent Trading Reasonable Grounds to Expect Section 592 Corporations Law

Source-derived case record

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Parties

TCN Channel Nine Pty Limited

Applicant

Roslyn Shirley Scotney

Respondent

Procedural Posture

Civil / Final Judgment After Hearing

Legal Issues

  1. 1 Whether as at 24 April or 3 May 1991 there were reasonable grounds to expect that the company would not be able to pay all its debts as and when they became due under s 592(1) of the Corporations Law.
  2. 2 Whether the anticipated immediate revenue from advertising could be considered in assessing directors' liability under s 592(1).

Ratio Decidendi

The applicant failed to prove on the balance of probabilities that as at 24 April or 3 May 1991, there were not reasonable grounds for a director to expect the company could pay all its debts as and when they became due. At the time the relevant debts were incurred, there was evidence—including prior successful advertising campaigns and immediate cash flows in May 1991—providing reasonable grounds for such an expectation. Unforeseen later adverse publicity cannot retrospectively establish insolvency at the earlier relevant times.

Court Disposition

Application dismissed with costs (except any costs awarded to applicant in interlocutory proceedings)

Orders

  • The application be dismissed.
  • The applicant pay the costs of the respondent, with the exception of any costs awarded to the applicant in interlocutory proceedings.