Angas Law Services Pty Ltd (In liquidation) v Carabelas [2005] HCA 23

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, KIRBY, HAYNE AND HEYDON JJ

ANGAS LAW SERVICES PTY LTD (In liquidation)

& ANOR APPELLANTS

AND

GEORGE CARABELAS & ANOR RESPONDENTS

Angas Law Services Pty Ltd (In liquidation) v Carabelas

[2005] HCA 23

27 April 2005

A49/2004

ORDER

1. Remit the matter to the Full Court of the Supreme Court of South Australia to consider the amendment to the statement of claim foreshadowed in this Court and to deal with any issue arising out of any amendment that may be permitted. 2. Except as provided in order 1, appeal dismissed with costs.

On appeal from the Supreme Court of South Australia

Representation:

G Griffith QC with L G de Ferrari for the appellants (instructed by Cowell Clarke Commercial Lawyers)

R J Whitington QC with M B Manetta for the respondents (instructed by von Doussas)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Angas Law Services Pty Ltd (In liquidation) v Carabelas

Company law – Duties of directors – Claims against directors for contraventions of Companies (South Australia) Code, s 229 – Respondents directors and sole shareholders of company – Directors caused company to grant mortgage to secure director's liability to bank – Bank exercised rights under mortgage – Resulting debt of director to company – Alleged novation of the debt owed so as to reduce director's liability to the company – Novation not shown to have occurred – Whether directors exercised due care and diligence – Whether directors improperly used position to gain personal advantage or cause detriment to corporation – Consideration of circumstances in which shareholders may ratify or excuse breaches of duties owed by directors – Relationship of offences under the Code to common law duties of directors and officers.