Couve v J Pierre Couve Limited (In Liquidation)

The appeal concerned Joson Pierre Couve, the managing director of J. Pierre Couve Limited (in liquidation), and the respondent liquidator. The dispute arose after a petition for the company's winding up was presented. Couve caused substantial quantities of the company's goods to be delivered to his own businesses, claiming this was to offset undrawn salary owed to him. The Supreme Court of New South Wales had ordered Couve to repay the value of these goods to the company.

The High Court was required to determine whether Couve's actions constituted misfeasance or breach of trust under section 162 of the *Companies Act 1899* (N.S.W.). It also needed to consider whether the liquidator could maintain such proceedings when the company's assets were insufficient to satisfy a debenture holder, meaning any recovery would primarily benefit that secured creditor. Finally, the court had to assess the correct measure of loss to the company.

The court reasoned that Couve's conduct, in taking the company's goods after the presentation of a winding-up petition and in purported satisfaction of a debt, amounted to a fraudulent preference and a misfeasance. This was because the transaction was intended to give him an advantage in the event of liquidation, and he acted with knowledge of the pending petition. The court held that the contention that the proceedings would only benefit a secured creditor was not a valid defence for Couve, as his liability to the company was direct. The measure of loss was determined to be the value of the goods at the time the liquidation order was made.

The appeal was dismissed, affirming the decision of the Supreme Court of New South Wales.