Australco Industries P/L v Weinstock, D.I

IN THE MATTER OF YABE CONSTRUCTIONS PTY LIMITED (In Liquidation) and AUSTRALCO
INDUSTRIES PTY LIMITED v. DANIEL ISAAC WEINSTOCK, GREGORY VAUGHAN POOLEY and
WILLIAM ERIC COPP
No. NG3288 of 1993
FED No. 966/94
Number of pages - 11
Corporations

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
DAVIES J

CATCHWORDS

Corporations - liquidation - debt owed by liquidated company with no assets - whether directors liable for payment of debt - whether there were reasonable grounds to expect that the company would be able to pay its debts - no point of principle.

Corporations Law, s.592(1)

HEARING

SYDNEY, 23 November 1994
#DATE 13:12:1994
#ADD 15:5:1995

Counsel for the Applicant: D.J. Hammerschlag

Solicitors for the Applicant: Rosenblum and Partners

Counsel for the Respondents: D.L. Ronzani

Solicitors for the Respondents: Abbott Tout

ORDER

THE COURT ORDERS THAT:

1. There be judgment for the applicant against the respondents in the sum of $68,509.50.

2. The respondents pay the applicant's costs of the proceedings.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

DAVIES J In this application, Australco Industries Pty Limited ("Australco"), which has judgment against Yabe Constructions Pty Limited (In Liquidation) ("Yabe") for $54,083.46 in respect of building works carried out and materials supplied by Australco to Yabe between October 1990 and February 1991, seeks an order under s 592 of the Corporations Law that the respondents, Daniel Isaac Weinstock, Gregory Vaughan Pooley and William Eric Copp, who were directors of Yabe, pay the debt.

1. Section 592(1) of the Corporations Law provides:-
   

"Where:

(a) a company has incurred a debt before the commencement of Part 5. 7B;

(b) immediately before the time when the debt was incurred:

(i) there were reasonable grounds to expect that the company will not be able to pay all its debts as and when they become due; or

(ii) there were reasonable grounds to expect that, if the company incurs the debt, it will not be able to pay all its debts as and when they become due; and

(c) the company was, at the time when the debt was incurred, or becomes at a later time, a company to which this section applies;

any person who was a director of the company, or took part in the management of the company, at the time when the debt was incurred contravenes this subsection and the company and that person or, if there are 2 or more such persons, those persons are jointly and severally liable for the payment of the debt."

I need not set out the defence provided by s 592(2), as that defence was not relied upon.

1. Australco is a company which specialises inter alia in the manufacture of aluminium framework, windows and fittings. The debt arose out of an agreement entered into between Australco and Yabe on 28 September 1990 whereby Australco agreed to supply and to install aluminium framing and to provide the glazing to an industrial factory…