POWELL & DUNCAN as joint liquidators of NOELEX YACHTS AUSTRALIA PTY LTD (In Liquidation) (Respondents) v FRYER & PERRY (Appellants) [2001] SASC 59
Full Court: Olsson, Duggan and Williams JJ
OLSSON J
Introduction
The appellants in this matter were defendants at first instance. They separately appeal against a judgment entered against them in this Court on 14 April 2000, as amended on 28 June 2000. That judgment required them, jointly, to pay to the plaintiffs a total sum of $277,342.23 plus $62,657.77 for interest.
The notices of appeal each raise similar issues. They are expressed at some length and do not here require recitation in extenso. Suffice to say that they seek to join issue with the conclusions of the learned trial judge that the appellants were in contravention of s 588G of the Corporations Law, so as to give rise to liability pursuant to s 588M of that statute, that they had not made out any statutory defences pursuant to s 588H, and that it was not appropriate to excuse them pursuant to the discretionary power conferred by s 1318.
The respondents are the joint liquidators of Noelex Yachts Australia Pty Ltd (In Liquidation) (“Noelex”).
It was common ground between the parties that Noelex carried on the business of a manufacturer and wholesaler of yachts from 28 August 1987 to 2 April 1995 on premises which it owned at Goolwa. On 9 June 1995 a resolution for winding up was passed by a meeting of creditors.
The present liquidators were appointed on 27 March 1997. They replaced a single liquidator, one Irving, previously appointed at the time of the winding up resolution.
Irving had earlier, on 2 April 1995, been appointed as administrator of Noelex. On 4 April 1995 the National Australia Bank appointed a receiver and manager of Noelex. The latter ceased to act on 20 April 1996. Noelex was plainly insolvent as at the date of appointment of Irving as administrator.
By virtue of the provisions of s 588E(3) of the Corporations Law, read in conjunction with s 513B, s 513D and the definition of “relation-back day” in s 9, if it is proved or presumed that Noelex was insolvent at a particular time during the period of 12 months ending on 2 April 1995, it must be presumed that it was insolvent throughout the period beginning at that time and ending on that day. That presumption is, of course, rebuttable by virtue of s 588E(9).
The appellant Fryer (“Fryer”) was a non executive director of Noelex during the period from 10 May 1989 until 2 April 1995. He is in practice as an oral surgeon. The appellant Perry was, at all relevant times, the managing director and responsible for the detailed conduct of the operations of the Noelex at Goolwa.
The present proceedings were commenced on 26 March 1998. By the statement of claim, the respondents alleged that, subsequent to 23 June 1993, Noelex incurred…
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.
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AGLC
Powell v Fryer [2001] SASC 59
Case
[2001] SASC 59
Decision Date
CaseChat Overview and Summary
Powell, Duggan and Williams JJ of the South Australian Supreme Court dismissed the appeal of Fryer and Perry against a judgment entered against them by the Court on 14 April 2000. The respondents, the joint liquidators of Noelex Yachts Australia Pty Ltd, alleged that Fryer and Perry were in contravention of s 588G of the Corporations Law, which imposes liability on directors for incurring debts while insolvent. The liquidators sought to recover the loss or damage caused by the alleged contraventions of s 588G(2) and/or s 588G(3) of the Corporations Law. The court found that Noelex was insolvent from at least mid 1992, and that Fryer and Perry were aware of this fact. The court rejected the appellants' arguments that Noelex was not insolvent at the time of incurring the debts, and that there were reasonable grounds to expect solvency. The court concluded that the appellants had contravened s 588G, and dismissed the appeals.