Schmierer & Anor v Taouk [2004] NSWSC 345

New South Wales Supreme Court

CITATION : Schmierer & Anor v Taouk [2004] NSWSC 345 HEARING DATE(S) : 27/04/04, 28/04/04 JUDGMENT DATE : 7 May 2004

JUDGMENT OF : White J DECISION : See Conclusion Page 29

CATCHWORDS : CORPORATIONS - Winding-up - Plaintiff liquidator seeking recovery of two payments to director under s 598(2) and (4) of Corporations Act 2001 (Cth) - Alleged negligence, default and breach of fiduciary duty - Whether duty of director not to prefer personal interest to company's interests - Whether money recoverable on other basis - Whether sum recoverable as loan - Plaintiff's onus of proof in showing nature of money advanced to defendant - Nature of loan - Nature of restitutionary obligation to repay - Whether and from when interest payable - Whether withdrawal of funds from bank constituted breach of defendant's director's duties - Whether amount consequently recoverable by liquidator under s 598(2) of Corporations Act - Whether shareholders can ratify director's breach where latter leads to company's insolvency - Whether defendant entitled to relief under s 1318 Corporations Act. - (CTH) Corporations Act 2001 ss 598, 1318. Corporations Law s 233, s 461 (k) LEGISLATION CITED : Corporations Act 2001, s 598 (2), s 1318 Supreme Court Act, s 92 Walker v Wimborne (1976) 137 CLR 1 at 37 Re New World Alliance Pty Ltd Sycotex Pty Ltd v Baseler (1994) 51 FCR 425 at 444-445 Ferguson v O'Neill [1943] VLR 30 at 32 Pannam, The Law of Moneylenders Australia & New Zealand (1965) Heydon v Perpetual Executors Trustees and Agency Co (WA) Ltd (1930) 45 CLR 111 at 113 Oubert v Walsh (1812) 4 Taunt. 294 128 E.R. 342 Joaquin v Hall [1976] VR 788 Jenkins v Wynen [1992] 1 QdR 40 at 43-44 Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 23 ACSR 647 at 660 Coshott v Sakic (1998) 667 at 671-672 Mason & Carter, Restitution Law in Australia Seldon v Davidson (1968) 2 All ER 755 at 757, 759. CASES CITED : Cary v Gerrish (1801) 4 ESP. 9 170 E.R. 624 Welsh v Seabourne (1816) 1 Stark. 474 171 E.R. 534 Baltic Shipping Company v Dillon (1993) 176 CLR 344 at 356-357 Roxborough v Rothmans of Pall Mall (2001) 208 CLR 516 at 525, 540, 550-551 Bullen & Leake, Precedents of Pleadings, 3 Ed Moses v McFerlan 2 Burr. 1005, 1110 97 E.R. 676 Halsbury's Laws of England, 4 Ed, Para 672 Star v O'Brien (1996) 40 NSWLR 695 at 701 Goff & Jones, The Law of Restitution, 5 Ed p 848 Baker v Courage [1910] 1 KB 56 Maskell v Horner [1915] 3 KB 106 Torrens Aloha Pty Ltd v Citibank NA (1997) 72 FCR 581 Trevor John Schmierer & Anor PARTIES : v Fahd Taouk FILE NUMBER(S) : SC 005721/2001 COUNSEL : Plaintiff: Mark Ashhurst Defendant: Robert Tregenza SOLICITORS : Plaintiff: Levitt Robinson Solicitors Defendant: Malouf Solicitors