In the matter of A.C.N. 157 853 908 Pty Limited (in liquidation) [2020] NSWSC 522

In the matter of A.C.N. 157 853 908 Pty Limited (in liquidation) [2020] NSWSC 522

The evidence established that the Company paid Mr Inthavong $90,000 between 18 February 2014 and 19 October 2015, that he had no entitlement to those payments as wages or dividends, that the Company received no benefit and suffered detriment, and that Mr Inthavong benefited. The payments were therefore uncommercial transactions. The Company was insolvent when the payments were made, principally because its failure to maintain adequate books and records gave rise to an unrebutted presumption of insolvency, reinforced by evidence of unpaid trade creditors and tax liabilities. The transactions were made within two years of the relation-back day and were voidable, justifying relief under s...

Jurisdiction
Australia
Judgment Date
11 May 2020
Procedural Posture
Equity Corporations List; Application Under Ss 588 Fb, 588 Fc, 588 FE and 588 FF of the Corporations Act 2001 (cth) and Alternative Claim for Monies Had and Received / Interlocutory Process Seeking Summary Judgment Under Rule 13.1 of the Uniform Civil Procedure Rules 2005 (nsw)
Outcome
Judgment for Plaintiffs for $90,000, interest in the amount of $5,667, and costs as agreed or assessed.
Legal Topics
['summary Judgment' 'voidable Transactions' 'uncommercial Transactions' 'insolvent Transactions' 'presumption of Insolvency From Failure to Keep Adequate Books and Records' 'liquidator Recovery Proceedings' 'unjust Enrichment']
['civil Procedure' 'corporations' 'insolvency'] ['summary Judgment' 'voidable Transactions' 'uncommercial Transactions' 'insolvent Transactions' 'presumption of Insolvency From Failure to Keep Adequate Books and Records' 'liquidator Recovery Proceedings' 'unjust Enrichment']

Case Brief

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Procedural Posture

Equity Corporations List; Application Under Ss 588 Fb, 588 Fc, 588 FE and 588 FF of the Corporations Act 2001 (cth) and Alternative Claim for Monies Had and Received / Interlocutory Process Seeking Summary Judgment Under Rule 13.1 of the Uniform Civil Procedure Rules 2005 (nsw)

Legal Issues

  1. 1 ['Whether the Plaintiffs had evidence of the facts on which their claim was based and evidence of belief that the Defendant had no defence so as to justify summary judgment under UCPR r 13.1.' 'Whether payments made by the Company to the Defendant totalling $90,000 were uncommercial transactions within s 588FB of the Corporations Act 2001 (Cth).' 'Whether the payments were insolvent transactions and voidable transactions under ss 588FC and 588FE of the Corporations Act 2001 (Cth).' 'Whether the Court should make an order under s 588FF of the Corporations Act 2001 (Cth).' 'Whether it was necessary to determine the alternative claim for money had and received.']

Ratio Decidendi

The evidence established that the Company paid Mr Inthavong $90,000 between 18 February 2014 and 19 October 2015, that he had no entitlement to those payments as wages or dividends, that the Company received no benefit and suffered detriment, and that Mr Inthavong benefited. The payments were therefore uncommercial transactions. The Company was insolvent when the payments were made, principally because its failure to maintain adequate books and records gave rise to an unrebutted presumption of insolvency, reinforced by evidence of unpaid trade creditors and tax liabilities. The transactions were made within two years of the relation-back day and were voidable, justifying relief under s...

Court Disposition

Judgment for Plaintiffs for $90,000, interest in the amount of $5,667, and costs as agreed or assessed.

Orders

  • ['Judgment for the Plaintiffs against the Defendant in the amount of $90,000 and interest in the amount of $5667.' "The Defendant pay the Plaintiffs' costs of the proceedings as agreed or as assessed."]