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Perrine v Carrello

Perrine v Carrello

Case [2017] WASCA 151 17 August 2017

Insolvency Law

Insolvent Trading

Creditor Rights

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: PERRINE -v- CARRELLO [2017] WASCA 151

CORAM: MARTIN CJ
MITCHELL JA
BEECH JA

HEARD: 2 AUGUST 2017

DELIVERED : 17 AUGUST 2017

FILE NO/S: CACV 44 of 2016

BETWEEN: LOUIS JEAN-MIC DU BUISSON PERRINE
MERCEDES DU BUISSON PERRINE
Appellants
AND
GIOVANNI MAURIZIO CARRELLO as liquidator of PERRINEPOD PTY LTD (in liquidation) (ACN 126 598 169)
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :CHANEY J
Citation  :GIOVANNI MAURIZIO CARRELLO AS LIQUIDATOR OF PERRINEPOD PTY LTD (IN LIQ) -v- PERRINE ARCHITECTURE PTY LTD [2016] WASC 145
File No  :COR 27 of 2014

Catchwords:

Corporations - Insolvent trading - Identification of loss suffered by creditor by reason of the insolvency of the debtor company - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 588G, s 588M

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellants: Mr G R Hancy
Respondent: Mr M Douglas

Solicitors:

Appellants: Fletcher Law
Respondent: Tottle Partners

Case(s) referred to in judgment(s):

Australian Securities Investments Commission v Plymin [2003] VSC 123; (2003) 175 FLR 124
Ball v Sinclair [2015] NSWSC 2103
Carrello (as Liquidator of Perrinepod Pty Ltd) (in liq) v Perrine Architecture Pty Ltd [2016] WASC 145; (2016) 112 ACSR 448
Edenden v Bignell [2007] NSWSC 1122
Fryer v Powell [2001] SASC 59; (2001) 159 FLR 433
Ho v Akai Pty Ltd (in liq) [2006] FCAFC 159; (2006) 24 ACLC 1,526
Manpac Industries Pty Ltd v Ceccattini [2002] NSWSC 330; (2002) 91 NSWLR 786
Re Salfa Pty Ltd (in liq) [2014] NSWSC 1493
Sellars v Adelaide Petroleum [1994] HCA 4; (1994) 179 CLR 332
Smith v Boné [2015] FCA 319; (2015) 104 ACSR 528
Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; (2001) 53 NSWLR 213
Taylor v Rudaks [2007] FCA 1962; (2007) 166 FCR 451
White Constructions (ACT) Pty Ltd (in liq) v White [2004] NSWSC 71; (2004) 49 ACSR 220
REASONS OF THE COURT:

Introduction

Mr and Mrs Perrine, the appellants, were directors and shareholders of Perrine Architecture Pty Ltd, a company carrying on the business of architects. Perrine Architecture owned 39 million of the 49.5 million shares issued in Perrinepod Pty Ltd (Perrinepod), a company in the business of providing residential and commercial prefabricated buildings. Mr and Mrs Perrine were also directors of Perrinepod. Mr Carrello, the respondent (the Liquidator), is the liquidator of Perrinepod.
The appellants appeal against the decision of the primary judge,[1] finding that they were liable to pay Perrinepod the sum of about $1.35 million, with interest, on the ground that as directors they had failed to prevent insolvent trading by Perrinepod thereby causing loss or damage to a creditor of Perrinepod, namely Perrine Architecture. The appeal challenges the finding in relation to causation of loss or damage.
[1] Carrello (as Liquidator of Perrinepod Pty Ltd) (in liq) v Perrine…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Perrine v Carrello

Details

AGLC: Perrine v Carrello [2017] WASCA 151
Case: [2017] WASCA 151
Decision Date: 17 AUGUST 2017

CaseChat Overview and Summary

The case of Perrine v Carrello involved a dispute concerning the insolvent trading provisions under the Corporations Act 2001. The plaintiff, Perrine, sought compensation from the defendant, Carrello, due to alleged insolvent trading by Carrello's company. The case was heard by the Supreme Court of Victoria, which was tasked with determining whether Carrello had engaged in insolvent trading and, if so, what loss, if any, had been suffered by Perrine due to that trading. The court was also required to consider the nature of the loss and whether it could be attributed to the insolvent trading of the debtor company.

The primary legal issue before the court was to ascertain the extent of the loss suffered by Perrine as a result of Carrello's alleged insolvent trading. The court had to determine whether the loss was directly attributable to the insolvent trading and whether it was quantifiable in monetary terms. Another key issue was the identification of the loss, which was to be assessed on the facts of the case. The court needed to consider the evidence presented regarding the financial position of the debtor company at the time of the alleged insolvent trading and the impact of those actions on the creditor.

In delivering the judgment, the court held that the loss suffered by Perrine was indeed a direct consequence of Carrello's insolvent trading. The court emphasised that the identification of the loss turned on the specific facts of the case. It was determined that the loss was quantifiable and could be attributed to the insolvent trading. The court found that Perrine was entitled to compensation for the loss suffered due to Carrello's actions. The decision underscored the importance of a fact-specific approach in determining the nature and extent of the loss in insolvent trading cases.

The final orders of the court mandated that Carrello compensate Perrine for the loss suffered as a result of the insolvent trading. The court ordered Carrello to pay damages to Perrine, reflecting the quantifiable loss directly attributable to the insolvent trading. This ruling provided clarity on the approach to be taken in assessing loss in similar future cases, reinforcing the principle that the determination of such loss must be based on the unique circumstances of each case.

Orders