In the matter of SSET Construction Pty Ltd (in liq) - Sims v Khattar [2010] NSWSC 102

New South Wales Supreme Court

CITATION : In the matter of SSET Construction Pty Ltd (in liq) - Sims v Khattar [2010] NSWSC 102

HEARING DATE(S) : 4, 10 December 2009

JUDGMENT DATE : 23 February 2010

JURISDICTION : Equity

JUDGMENT OF : Austin J

1. Declaration that each defendant contravened s 588G(2) of the Corporations Act 2001 (Cth) by failing to prevent the Company from incurring debts in the sum of $563,821 in the period from 1 July 2005 to 30 January 2006. DECISION : 2. Declaration pursuant to s 588M(2) of the Corporations Act that the first plaintiff is entitled to recover from each defendant, as a debt due to the Company, the loss or damage suffered by the creditors whose debts are referred to in Order 1, being the amount of the debts less any gross recovery of assets of the Company but without regard to any statutory recoveries that he has made, and that the defendants are jointly and severally liable to pay the amount so calculated. 3. Order the defendants to pay the first plaintiff the amount calculated in accordance with Order 2, namely $507,439. 4. Order defendants to pay plaintiffs' costs of the proceedings, as agreed or assessed.

CATCHWORDS : CORPORATIONS - insolvent trading - liability of directors - presumed insolvency arising from failure to keep and retain financial records - actual insolvency arising from deficiency of working capital - whether reasonable grounds for suspecting insolvency - whether directors aware of such grounds - whether a reasonable person in like position in a company in the company's circumstances would be so aware - when debts were incurred

LEGISLATION CITED : Corporations Act 2001 (Cth), ss 9, 513A, 588E, 588G, 588M

Anthony Milton Sims in his capacity as liquidator of SSET Construction Pty Ltd (in liq) (First Plaintiff) SSET Construction Pty Ltd (in liq) (Second Plaintiff) PARTIES : Simon Khattar (First Defendant) Edmond Khattar (Second Defendant) Tony Khattar (Third Defendant)