In the matter of ZH International Pty Ltd (in liquidation)

In the matter of ZH International Pty Ltd, the liquidators sought to recover a series of transactions that were deemed to be voidable under the Corporations Act, with the aim of recovering funds for the company's creditors. The dispute involved the directors, who were also the husband and wife shareholders of the company, who had acquired four properties through the company. The net equity in these properties was approximately $2 million. The couple subsequently separated, and the company faced a lawsuit for building defects amounting to $3 million. The company became insolvent, and the couple agreed to a partial property settlement in relation to the properties owned by the company. This settlement was intended to be an 'asset strip' to defeat prospective creditors, and the company was not a party to the Family Court proceedings or orders. The couple subsequently discharged the mortgages and the company transferred the properties to the husband and wife.

The legal issues that arose from this case centred on whether the Family Court orders constituted a "transaction of the company" under the Corporations Act, and whether the subsequent transfer of the properties by the company was also a "transaction." The court considered the case of Mateo and section 588FF of the Corporations Act, and determined that the Family Court orders did not constitute a transaction of the company. The court also considered the case of Higgins and sections 90AC and 90AE of the Family Law Act, and determined that the relief sought was not inconsistent with the Family Court orders. The court further considered section 588FF of the Corporations Act, and determined that an order to transfer the property could not be made due to insufficient evidence of reliance on legal advice and the benefits conferred by the directors on the company.

The court's reasoning was based on the evidence presented and the legal principles that applied to the case. The court found that the Family Court orders did not constitute a transaction of the company, and that the subsequent transfer of the properties by the company was also not a transaction. The court considered the legal advice given to the directors and the benefits conferred by them on the company, but found that there was insufficient evidence to support a finding that the directors had acted improperly. The court ultimately determined that the relief sought by the liquidators was not inconsistent with the Family Court orders, and that the transfer of the properties could not be undone due to the lack of evidence. The court's decision was based on a careful consideration of the evidence and the applicable legal principles, and was consistent with the outcomes sought by the parties.