Lewis (as liquidator of Doran Constructions Pty Ltd (in liq) & Anor v Doran & Ors [2005] NSWCA 243

Reported Decision : 54 ACSR 410 (2005) 23 ACLC 1666

New South Wales Court of Appeal

Lewis (as liquidator of Doran Constructions Pty Ltd (in liq) & Anor v Doran & Ors [2005] NSWCA 243 CITATION: This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 21 & 22 April 2005

JUDGMENT DATE: 18 August 2005

JUDGMENT OF: Giles JA at 1; Hodgson JA at 162; McColl JA at 163

DECISION: Appeal dismissed with costs.

CATCHWORDS: Related companies - debt restructuring - resolutions that debt owed to company A by company B be replaced by debt owed by company C - journal entries later made - whether transaction in breach of directors' statutory and fiduciary duties - whether an uncommercial transaction within s 588FB of Corporations Law - whether company A became insolvent because of the transaction - whether transaction given effect by making the journal entries and company A insolvent at that time - consideration of whether voluntary assistance from related companies material to insolvency - and of scheme for avoidance of insolvent transactions within s 588FC of the Law. D

re a Company (1986) BCLC 261; re Adnot Pty Ltd (1982) 1 ACLC 307; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2003) 57 NSWLR 321; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 215 ALR 385; Bank of Australasia v Hall (1907) 4 CLR 1514; Demondrille Nominees Pty Ltd v Shirlaw (1997) 25 ACSR 535; Doran Constructions Pty Ltd v Beresfield Aluminium Pty Ltd [1999] NSWSC 499 (Brownie AJ, 21 May 1999); Doran Constructions Pty Ltd v Beresfield Aluminium Pty Ltd (2001) 17 BCL 215 (Brownie AJ, 8 February 2001); Doran Constructions Pty Ltd v Beresfield Aluminium Pty Ltd (2002) 54 NSWLR 416 (CA, 8 May 2002); Environment Agency (formerly National Rivers Authority) v Empress Car Co (Abertillery) Ltd (1999) 2 AC 22; Equiticorp Finance Ltd (In Liquidation) v Bank of New Zealand (1993) 32 NSWLR 50; CASES CITED: re Kerisbeck Pty Ltd (1992) 10 ACLC 619'; Kinsela v Russell Kinsella Pty Ltd (in liq) (1986) 4 NSWLR 722; Lewis v Cook [2000] NSWSC 191; (2000) 18 ACLC 490; Linton v Telnet Pty ltd (1999) 30 ACSR 465 March v E & M H Stramare Pty Ltd (1991) 171 CLR 506; Nicholson v Permakraft (NZ) Ltd (in liq) (1985) 3 ACLC 453; Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146; re RHD Power Services Pty Ltd (1991) 9 ACLC 27; Sandell v Porter (1966) 115 CLR 666; Southern Cross Interiors Pty Ltd (in liquidation) v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; Tosich Construction Pty Ltd (in liq) v Tosich (1997) 78 FCR 363; Walker v Wimbourne (1976) 137 CLR 1.