CID Electrical Services Pty Limited v CNW Pty Limited [2006] NSWLC 17

Local Court of New South Wales

CITATION: CID Electrical Services Pty Limited v CNW Pty Limited [2006] NSWLC 17 JURISDICTION: Civil PARTIES: CID Electrical Services Pty Limited (in Liquidation) CNW Pty Limited FILE NUMBER: 10268/2005 PLACE OF HEARING: Downing Centre DATE OF DECISION: 04/18/2006 MAGISTRATE: Magistrate S Freund CATCHWORDS: Liquidator - Insolvent Transactions - Voidable Transactions - Insolvent - Company solvent at the time of payments - debt - Creditor LEGISLATION CITED: Corporations Act 2001 C'th Jones v Dunkel (1959) 101 CLR 298 CASES CITED: Commercial Union Insurance Co of Australia Ltd v Fercom Pty Ltd (1991) 22 NSWLR 389 Ho v Howell (2001) 51 NSWLR at 572 REPRESENTATION: S Golledge instructed by the Argyle Partnership J Jobson instructed by Nemes Thomas & Co ORDERS: I find in favour of the Plaintiffs and make the following orders: Judgment for the Plaintiff in the sum of $25,000 together with interest on that amount from 2 March 2004 (being the date of the letter of demand) to date to be calculated by the registry. In relation to costs, I propose that the usual order that costs follow the event in a sum agreed between the parties or as assessed. Parties may have liberty to apply in respect of the proposed order as to costs. If the matter is not relisted within 28 days by either party on the question of costs, the proposed order will be executed.

Reasons for Decision

1 These proceedings were commenced by the Second Plaintiff, Mark Roufeil the liquidator of the First Plaintiff ("the Liquidator") by way of Statement of Claim in the Supreme Court of NSW on 27 March 2005 and transferred to this court on or about 9 June 2005. The Liquidator has sought to recover from the Defendant ("CNW") 2 payments totalling the sum of $25,000 made by the First Plaintiff, CID Electrical Services Pty Limited (in liquidation) ("the Company") to the CNW on 24 March and 23 June 2003 respectively ("the Payments"). The liquidator claims inter alia that: a The Payments were Unfair Preferences pursuant to section 588FA Corporations Act, 2001 C'th; b The Payments are therefore Insolvent Transactions pursuant to s. 588FC Corporations Act, 2001 C'th; and c therefore the Payments are Voidable Transactions under s. 588FE Corporations Act, 2001 C'th. 2 CNW has defended the proceedings on the following grounds: a That the Liquidator has not satisfied on the balance of probabilities that the Company at the relevant time was insolvent; or alternatively b Pursuant to s.588FG(2) Corporations Act, 2001 C'th.