Powell v Fryer

The case of Powell and Duncan v Fryer, Tonkin and Perry is a decision of Prior J in the Supreme Court of South Australia. The liquidators of Noelex Yachts Australia Pty Ltd sought to recover $227212.49 from three directors of the company on the basis that the company was insolvent and there were reasonable grounds to suspect that the company was insolvent when the debts were incurred. The directors denied liability and sought to prove that they had reasonable grounds to expect that the company was solvent. The court was required to decide whether the directors were aware of the company’s insolvency when the debts were incurred and whether there were reasonable grounds for suspecting insolvency. The court found that the directors were aware of the company’s insolvency and that there were reasonable grounds for suspecting insolvency when the debts were incurred. The court held that the directors were liable to repay the debts under s 588G and s 588M of the Corporations Law. The court also held that the liquidators were entitled to recover interest pursuant to s 30C of the Supreme Court Act 1935. Judgment was entered for the plaintiffs in the total sum of $240500.