Hall & Ors v Poolman & Ors [2007] NSWSC 1330

New South Wales Supreme Court

CITATION : Hall & Ors v Poolman & Ors [2007] NSWSC 1330 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 31 January, 1, 2, 5-19 and 26-28 February 2007, and written Outlines of Closing Submissions received from the Plaintiffs on 23.02.07, 27.02.07, 28.02.07, 31.05.07, 08.06.07 and 15.06.07, from Mr Irving on 23.02.07, 25.05.07, 28.05.07 and 26.06.07, from Mr Martini on 23.02.07, from the ATO on 23.02.07 and from Ms Yates on 23.02.07

JUDGMENT DATE : 23 November 2007

JURISDICTION : Equity DIvision

JUDGMENT OF : Palmer J

DECISION : See paragraphs 557 to 564.

CATCHWORDS : INSOLVENCY – Related companies – whether companies insolvent – whether solvency of company A independent of solvency of company B – whether disputed tax debt "due and payable" – whether companies insolvent because of trade debts. - INSOLVENT TRADING – Directors' liability – whether reasonable grounds to suspect insolvency – whether director aware of reasonable ground for suspecting insolvency. - INSOLVENT TRADING – DEFENCES – whether reasonable grounds to expect solvency – discretionary defences under s.1317S(2) and s.1318(1) Corporations Act 2001 (Cth) – whether s.1318 applies for contraventions of Corporations Act – whether director acted "honestly" – whether lack of Directors and Officers Insurance relevant to discretion – liquidator enters litigation funding agreement – liquidator knows almost all of proceeds will go to liquidator and litigation funder with negligible return to creditors – whether return to creditors relevant to discretionary defences – control by Courts of abuse of litigation funding – costs under s.98 Civil Procedure Act – liquidators' duty to seek direction of Court. - INSOLVENT TRADING – UNFAIR PREFERENCES – Where payments by ATO were unfair preferences – whether ATO entitled to indemnity from directors – whether directors entitled to indemnity and set off. - EQUITY – Cross claims between directors – whether directors entitled to equitable contribution to their common liability for insolvent trading. - FRAUD – Director transferred share in company to his wife – whether alienation of property with intent to defraud creditors – ambit of s.37A Conveyancing Act 1919 (NSW) – meaning of "alienation" – whether acts of person other than debtor can be avoided.