JTS Property & Investments No 1 Pty Ltd (In Liq) v Sadri [2010] NSWSC 1384

New South Wales Supreme Court

CITATION : JTS Property & Investments No 1 Pty Ltd (In Liq) v Sadri [2010] NSWSC 1384

HEARING DATE(S) : 8, 9 &10 September 2010 8 October 2010

JUDGMENT DATE : 6 December 2010

JUDGMENT OF : Bryson AJ at 1

DECISION : Judgment for the plaintiffs for $520,000 together with $221,919.80 interest, a total of $741,919.80 and with costs.

CATCHWORDS : CORPORATIONS - winding up -uncommercial transactions - liquidator sued under Corporations Act s588FB to recover sum paid to defendant in uncommercial transaction - defendant obtained refinancing for company's mortgage finance which was in default but required company to obtain $520,000 more than was required for refinancing, lend that sum to the sole director's brother-in-law and join in arrangements for that sum to be paid to the defendant out of the mortgage advance so as to discharge an unsecured debt owed by brother-in-law to defendant which had been in default for several years - extended consideration of facts relating to solvency - HELD, the company was insolvent and the $520,000 was paid in an uncommercial transaction - judgment for repayment of $520,000 and interest.

LEGISLATION CITED : Bankruptcy Act 1924 (Cth) Corporations Act 2001 (Cth)

CATEGORY : Principal judgment

Cussen v Sultan (2009) NSWSC 1114 Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 CASES CITED : Rees v Bank of New South Wales (1964) 111 CLR 210 Sandell v Porter (1966) 115 CLR 666 Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation (2001) 53 NSWLR 213

Michael John Morris Smith in his capacity as Liquidator of JTS Property & Investments No.1 Pty Ltd (In Liquidation) PARTIES : JTS Property & Investments No.1 Pty Ltd (In Liquidation) Roostam Sadri