Pearce v Gulmohar Pty Ltd [2017] FCA 660

FEDERAL COURT OF AUSTRALIA

Pearce v Gulmohar Pty Ltd [2017] FCA 660 File number: QUD 749 of 2013

Judge: RANGIAH J

Date of judgment: 23 June 2017

Catchwords: CORPORATIONS – alleged voidable transactions within s 558FE of the Corporations Act 2001 (Cth) – whether company insolvent at the time of making payments to related parties – extent of company's debts – whether directors or related companies were likely to offer financial support – whether transactions were insolvent transactions within s 588FC – whether transactions were unfair preferences within s 588FA – whether transactions were uncommercial transactions within s 588FB – whether transactions were "unreasonable director-related transactions" within s 588FDA – whether benefit of the transaction was received in good faith – whether directors breached statutory duties under ss 181-183 and fiduciary duties – relief

Legislation: Corporations Act 2001 (Cth) ss 9, 133, 181, 182, 183 and 588 Evidence Act 1995 (Cth) s 140(2) Federal Court of Australia Act 1976 (Cth) s 51A Trade Practices Act 1974 (Cth) s 51A and 52

Cases cited: Air Services Australia v Ferrier (1996) 185 CLR 483 Ashala Model Agency Pty Ltd (in liq) & Anor v Featherstone & Anor (2016) 309 FLR 321 ASIC v Edwards (2009) 264 ALR 723 ASIC v Edwards [2005] NSWSC 831 ASIC v Plymin (No 1) (2003) 46 ACSR 126 Australian and New Zealand Banking Group Ltd v Frost Holdings Pty Ltd [1989] VR 695 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Bank of Australasia v Hall (1907) 4 CLR 1514 Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) (2008) 39 WAR 1 Benedetti v Sawiris [2014] AC 938 Bluestone Property Services Pty Ltd (in liq) v First Equilibrium Pty Ltd [2013] FCA 876 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221 Briginshaw v Briginshaw (1938) 60 CLR 336 Capital Finance Australia Ltd v Tolcher (2007) 164 FCR 83 Chan v First Strategic Development Corp Ltd (in liq) [2015] QCA 28 Chew v The Queen (1992) 173 CLR 626 Coshott v Lenin [2007] NSWCA 153 Cussen v Sultan [2009] NSWSC 1114 Demondrille Nominees Pty Ltd v Shirlaw (1997) 15 ACLC 1716 Deputy Commissioner of Taxation v Barblance Pty Ltd (2010) 80 ATR 468 Emanuel Management Pty Ltd (in liq) v Foster's Brewing Group Ltd (2003) 178 FLR 1 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Ex parte Russell; Re Butterworth (1882) 19 Ch D 588 Expo International Pty Ltd (in liq) v Chant [1979] 2 NSWLR 820 First Strategic Development Corporation Ltd (in liq) v Chan [2014] QSC 60 Flett v Deniliquin Publishing Co Ltd [1964-5] NSWR 383 Great Wall Resources Pty Ltd [2013] NSWSC 354 Grove v Favel (1986) 43 SASR 410 Hall v Poolman (2007) 65 ACSR 123 Hawkins v Bank of China (1992) 26 NSWLR 562 Hertz Australia Pty Ltd (1994) 14 ACSR 209 Horton v Jones (No 2) (1939) 39 SR (NSW) 305 Hussain v CSR Building Products Limited, in the matter of FPJ Group Pty Ltd (in liq) (2016) 246 FCR 62 Hymix Concrete Pty Ltd v Garritty (1977) 13 ALR 321 Iezzi Constructions Pty Ltd v Watkins Pacific (Qld) Pty Ltd (1995) 2 Qd R 350 International Cat Manufacturing Pty Ltd v Rodrick (2013) 97 ACSR 200 Kalls Enterprises Pty Ltd (in liq) v Baloglow (2007) 63 ACSR 557 Lee Kong v Pilkington (Australia) Ltd (1997) 25 ACSR 103 Lewis (as liquidator of Doran Constructions Pty Ltd (in liq)) v Doran (2005) 219 ALR 555 Mann v Sangria Pty Ltd (2001) 38 ACSR 307 May and Butcher Ltd v the King [1934] 2 KB 17 McDonald v Hanselmann (1998) 144 FLR 463 McLellan v Carroll (2009) 76 ACSR 67 Mulherin v Bank of Western Australia Ltd [2006] QCA 175 New South Wales Lotteries Corporation Pty Ltd v Kuzmanovski (2011) 195 FCR 234 Olifent v Australian Wine Industries Pty Ltd (1996) 19 ACSR 285 Panasonic Australia Pty Ltd v Wily (1997) 23 ACSR 266 Pegulan Floor Coverings Pty Ltd v Carter (1997) 24 ACSR 651 Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266 R v Byrnes (1995) 183 CLR 501 R v Donald [1993] 2 Qd R 680 Re a Company [1986] BCLC 261 Re Damilock; Lewis v VI SA Australia Pty Ltd (2008) 252 ALR 533 Re Macadam (1913) 13 SR(NSW) 206 Re Solfire Pty Ltd (in liq) [1998] 2 Qd R Re Timbatec Pty Ltd [1974] 1 NSWLR 613 Rees v Bank of New South Wales (1964) 111 CLR 210 Richardson v Commercial Banking Co of Sydney Ltd (1952) 85 CLR 110 Rothmans Exports Pty Ltd v Mistmorn Pty Ltd (in liq) (1994) 125 ALR 442 Sandell v Porter (1966) 115 CLR 666 Smith (in his capacity as liquidator of Action Paintball Games Pty Ltd) (in liq) v Starke (No 2) (2015) 109 ACSR 145 Smith v Bone (2015) 104 ACSR 528 Smith v Deputy Federal Commissioner of Taxation (No 2) (1997) 15 ACLC 687 Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation (2001) 53 NSWLR 213 Spedley Securities Ltd (in liq) v Western United Ltd (in liq) (1992) 10 ACLC 357 Spies v The Queen (2000) 201 CLR 603 Thorby v Goldberg (1964) 112 CLR 597 Tosich Construction Pty Ltd (in liq) v Tosich (1997) 78 FCR 363 Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 Vasudevan v Becon Constructions (Australia) Pty Ltd (2014) 41 VR 445 Walker v Winborne (1976) 137 CLR 1 Walsh v Natra Pty Ltd (2000) 1 VR 523 Welcome Homes Real Estate Pty Ltd v Ziade Investment Pty Ltd (in liq) [2007] NSWCA 167 Williams v Peters [2010] 1 Qd R 475 Williams v Scholz [2008] QCA 94