Steven Naidenov trading as in his capacity as Liquidator of Tyres for Less Pty Ltd (in liquidation) and Anor v Unique Motor Group Pty Ltd [2024] NSWDC 406

Steven Naidenov trading as in his capacity as Liquidator of Tyres for Less Pty Ltd (in liquidation) and Anor v Unique Motor Group Pty Ltd [2024] NSWDC 406

The Court held that the two vehicles were transferred by the Company to the Defendant for no consideration, causing detriment to the Company and conferring no benefit on it, so no reasonable person in the Company's circumstances would have entered into the transfers. The objective facts in the Liquidator's report and records, including unpaid creditors outside trading terms, dishonoured payments, failed ATO payment arrangements, legal demands, round-sum payments and inadequate financial records, proved that the Company was insolvent at the time. The transfers were therefore uncommercial and insolvent transactions and voidable under s 588FE, justifying an order under s 588FF for the...

Jurisdiction
Australia
Judgment Date
19 August 2024
Procedural Posture
Civil Claim by Liquidator and Company in Liquidation for Voidable Transaction Relief and Unpaid Loan Debt / Principal Judgment; Ex Tempore Judgment After Hearing
Outcome
Judgment for the Plaintiffs against the Defendant.
Legal Topics
['winding Up' 'voidable Transactions' 'uncommercial Transactions' 'insolvent Transactions' 'proof of Insolvency' 'relation Back Period' 'outstanding Loan Debt' 'interest' 'costs']
['corporations Law' 'insolvency' 'debt Recovery' 'civil Procedure'] ['winding Up' 'voidable Transactions' 'uncommercial Transactions' 'insolvent Transactions' 'proof of Insolvency' 'relation Back Period' 'outstanding Loan Debt' 'interest' 'costs']

Case Brief

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Procedural Posture

Civil Claim by Liquidator and Company in Liquidation for Voidable Transaction Relief and Unpaid Loan Debt / Principal Judgment; Ex Tempore Judgment After Hearing

Legal Issues

  1. 1 ['Whether the transfer of two motor vehicles to the Defendant was an uncommercial transaction under s 588FB of the Corporations Act 2001 (Cth).' 'Whether the Company was insolvent at the time of the transfers so that the transactions were insolvent transactions under s 588FC of the Corporations Act 2001 (Cth).' 'Whether the transactions were voidable transactions under s 588FE of the Corporations Act 2001 (Cth) and what order should be made under s 588FF.' 'Whether the Defendant owed the Company an outstanding loan amount and whether any offsetting payments were proved.' "Whether the Defendant should pay the Plaintiffs' costs on the ordinary basis and then on an indemnity basis."]

Ratio Decidendi

The Court held that the two vehicles were transferred by the Company to the Defendant for no consideration, causing detriment to the Company and conferring no benefit on it, so no reasonable person in the Company's circumstances would have entered into the transfers. The objective facts in the Liquidator's report and records, including unpaid creditors outside trading terms, dishonoured payments, failed ATO payment arrangements, legal demands, round-sum payments and inadequate financial records, proved that the Company was insolvent at the time. The transfers were therefore uncommercial and insolvent transactions and voidable under s 588FE, justifying an order under s 588FF for the...

Court Disposition

Judgment for the Plaintiffs against the Defendant.

Orders

  • ['Order the Defendant pay the first Plaintiff the sum of $43,155.73 inclusive of interest calculated at the Court rates up to today.' 'Order the Defendant pay the Company the sum of $411,521.44 again inclusive of interest up to today.' "Order that the Defendant pay the Plaintiffs' costs on the ordinary basis up to...