Cribb v Kingsbury (No 2) [2021] FCA 1397

FEDERAL COURT OF AUSTRALIA

Cribb v Kingsbury (No 2) [2021] FCA 1397 File number: WAD 87 of 2019

Judgment of: MCKERRACHER J

Date of judgment: 11 November 2021

Catchwords: CORPORATIONS – recovery proceedings against former director – claims for insolvent trading, breach of directors duties, voidable transactions and debt recovery – where company incorporated as business venture by the two directors who are also the only shareholders – where the first director has day-to-day control of the business and the second director provides financial support to the company – where the first director deliberately concealed the company's tax and superannuation liabilities from the second director – whether the second director breached his statutory or fiduciary duties by failing to inform himself of the company's position independently of the first director CORPORATIONS – insolvent trading – whether company was insolvent at the relevant times – where company received financial support from one of its directors and a related company – whether there was the necessary degree of assuredness that the director would continue to support the company to enable it to pay its debts as and when they fell due CORPORATIONS – voidable transactions – payments by company to one of its directors and a related company pursuant to a lease agreement and hire agreements – whether the transactions are unreasonable director-related transactions pursuant to s 588FDA of the Corporations Act 2001 (Cth) – whether a reasonable person in the company's circumstances would not have entered into the transactions

Legislation: Corporations Act 2001 (Cth) ss 9, 79(c), 95A, 180, 180(1), 181, 182, 183, 588FB, 588FDA, 588FDA(1)(a), 588FDA(1)(b), 588FE, 588FF, 588G, 588G(1), 588G(1)(c), 588G(2), 588H(2), 588M, 1317E, 1317H