Mansfield v Townend [2017] NSWDC 370

District Court New South Wales

Medium Neutral Citation: Mansfield v Townend [2017] NSWDC 370 Hearing dates: 25, 26 and 29 May 2017. Submissions closed 19 June 2017 Date of orders: 20 December 2017 Decision date: 20 December 2017 Jurisdiction: Civil Before: Wilson SC DCJ Decision: (a) verdict for the first defendant against the plaintiff; (b) the plaintiff to pay the first defendant's costs of the proceedings; (c) I note that the proceedings against the second and third defendants have previously been discontinued; (d) I order that the First Cross Claim be dismissed with no order as to costs; (e) I order that the Second Cross Claim be dismissed with no order as to costs; (f) I grant the parties liberty to apply within 28 days to vary the costs order referred to in paragraph (b) above, if necessary; (g) I direct that the Exhibits be returned after 28 days. Catchwords: CORPORATIONS LAW – trading whilst insolvent – duties of directors – whether the first defendant was a director – whether company was insolvent – whether the first defendant contravened sub-section 588G(2) of the Corporations Act 2001 – whether the first defendant failed in her duty to prevent insolvent trading by company – whether the first defendant was aware that there were grounds for suspecting insolvency – whether a reasonable person in a like position in the company's circumstances would be so aware. Legislation Cited: Corporations Act 2001 Unfair Contracts Act 1980 (NSW) Cases Cited: Australian Securities and Investment Commission v Edwards (2005) 54 ACSR 583, [2005] NSWSC 831 Commonwealth Bank of Australia v Freidrich Australian Securities and Investments Commission v Plymin (No 1) (2003) 46 ACSR 126 Credit Corp Australia Pty Limited v Atkins (1999) 30 ACSR 727, [1999] FCA 335 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 Hedges v New South Wales Harness Racing Authority Club Limited and Ors (1991) 5 ACSR 291 at [293] Knight v Bulic (1994) 13 ACSR 553 at [560] Metal Manufacturers Ltd v Lewis (1986) 11 ACLR 122 Morley v Statewide Tobacco Services Ltd [1993] 1 VR 423 at 448 Powell v Fryer (2001) 37 ACSR 589; [2000] SASC 59 Queensland Bacon v Rees (1996) 115 CLR 266 at 303 Smith v Bone (2015) 104 ACSR 528, [2015] FCA 319 Swan Services Pty Limited (in Liquidation) [2016] NSWSC 1724 Category: Principal judgment Parties: David Ian Mansfield as Official Liquidator of Camperdown Bowling & Recreation Club Limited (in Liquidation) ACN 000 248 215 (Plaintiff) Leanne Maree Townend (First Defendant) Paul James McDonald (Second Defendant) Ronald Lewis (Third Defendant) Representation: Counsel: Mr D Krochmalik (Plaintiff) Mr A Martin (First Defendant)