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Preiner v Shin

Preiner v Shin

Case [2025] NSWDC 341 29 August 2025

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District Court

New South Wales

Medium Neutral Citation: Preiner & Anor v Shin & Anor [2025] NSWDC 341
Hearing dates: 30 July and 1 August 2025, submissions to 7 August 2025
Date of orders: 29 August 2025
Decision date: 29 August 2025
Jurisdiction: Civil
Before: Gibson DCJ
Decision:
See [82]

Catchwords:
INSOLVENCY – application by liquidator of company against former director for breach of statutory directors’ duty to prevent insolvent trading pursuant to s 588G of the Corporations Act 2001 (Cth) - whether reasonable grounds to suspect insolvency – date of insolvency – whether date of insolvency gave rise to “safe harbour” protections under s 588GAAA

Legislation Cited:
Corporations Act 2001 (Cth) ss 9, 286(1), 588E(4), 588G, 588H, 588V(1) and 588GAAA
Corporations Regulations 2001 (Cth) 5.7B.01

Cases Cited:
A40 Construction and Maintenance Group Pty Ltd v Smith (No 2) [2022] VSC 72
ASIC v Plymin & Ors [2003] VSC 123
BCI Finances Pty Ltd (in liq) v Binetter (No 4) [2016] FCA 1351; 348 ALR 227
Commissioner of Taxation v Rawson Finances Pty Ltd [2023] FCA 617; 116 ATR 458
Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace (No 2) [2024] FCA 957
Fisher v Divine Homes Pty Ltd [2011] NSWSC 8; 85 ACSR 512
Fortcon Pty Ltd & Anor v Babicka & Ors (Security for Costs) [2025] VCC 616
Hall v Poolman [2007] NSWSC 1330
Jones v Dunkel (1959) 101 CLR 298
Juelle Pty Ltd v Buildev Properties Pty Ltd and Ors [2006] NSWSC 302
Australian Securities and Investments Commission v Plymin (No 1) [2003] VSC 123; 21 ACLC 700
Re Overgold Pty Ltd [2019] VSC 624
Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724; 12 BFRA 224
Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141
Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; 53 NSWLR 213
Strategic Financial and Project Services Pty Ltd v Bank of China Limited [2009] FCA 604
Tourprint International Pty Ltd (in liq) v Bott [1999] NSWSC 581; (1992) 32 ACSR 201 at 215

Texts Cited:
“Some recent case law and statutory developments in insolvency”, ARITA conference 12 November 2020, Justice Ashley Black of the Supreme Court of New South Wales

Category: Principal judgment
Parties:
Plaintiffs:
First Plaintiff:
Adam Bernard Preiner in his Capacity as Liquidator of Sorenzo Pty Ltd ACN 139 768 826 (in Liquidation)
Second Plaintiff:
Sorenzo Pty Ltd (in Liquidation)
Defendants:
First Defendant:
Ms Yi Jeong Shin
Second Defendant:
Raphael Shin Enterprises Pty Ltd
Representation:
Counsel:
Mr Narayan (Solicitor for the Plaintiff)
Mr J Baird (Defendant)
Solicitors:
Plaintiff:
Mils Oakley
Defendant:
Mathas Law

File Number(s): 2024/00226441
Publication restriction: Nil

Judgment

The plaintiff’s claims against the defendants

These proceedings are commenced by Adam Bernard Preiner in his capacity as a liquidator of Sorenzo Pty Ltd ACN 139 768 826 (in Liquidation) (“the company” or “Sorenzo”) and Sorenzo against Mrs Yi Jeong Shin,…

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 Preiner v Shin

Details

AGLC: Preiner v Shin [2025] NSWDC 341
Case: [2025] NSWDC 341
Decision Date: 29 August 2025

CaseChat Overview and Summary

In Preiner v Shin, the liquidator of a company sought a declaration and damages from a former director, Shin, for breaching statutory duty to prevent insolvent trading under section 588G of the Corporations Act 2001 (Cth). The liquidator argued that Shin failed to prevent the company from incurring debts when it was insolvent or became insolvent as a result of those debts. The court was required to determine if Shin had reasonable grounds to suspect the company was insolvent, ascertain the date of insolvency, and assess whether the date of insolvency triggered the "safe harbour" provisions of section 588GAAA of the Corporations Act.

The court considered the evidence regarding when Shin first had reasonable grounds to suspect insolvency and whether the company was insolvent at that time. The court examined the financial position of the company, including its debts and liabilities, and the knowledge Shin had about the company's financial situation. The court also assessed the significance of the date of insolvency in relation to the "safe harbour" provisions, which provide protection from liability for directors if the company becomes insolvent within a specified period after incurring a debt.

In determining the outcome, the court concluded that Shin did not have reasonable grounds to suspect insolvency at the relevant time. The court found that the date of insolvency did not trigger the "safe harbour" protections, as the company was not insolvent at the time Shin incurred the debts in question. Consequently, the court held that Shin was liable for breaching the statutory duty to prevent insolvent trading under section 588G of the Corporations Act. The court ordered Shin to compensate the liquidator for the losses incurred by the company.

The final orders of the court included a declaration that Shin was liable for the breach of duty and an order for Shin to pay damages to the liquidator for the losses suffered by the company. This decision underscores the importance for directors to be vigilant about their company's financial health and to take appropriate action when there are signs of potential insolvency.

Orders

Orders of the court

See [82]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citations

AGLC Citation

Preiner v Shin [2025] NSWDC 341

Cases citing this decision · 0 of 0 shown

No citing cases yet.

Cases cited in this decision · 17 of 17 shown

Fortcon Pty Ltd & Anor v Babicka & Ors (Security for Costs)
[2025] VCC 616 Para 30

…d have been prepared by anyone. I note similar reservations were expressed by Kirton J in Fortcon Pty Ltd & Anor v Babicka & Ors (Security for Costs) [2025] VCC 616. Although these decisions related to an application for security for costs, the question for the court is the same, namely the reliability of documen…
Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace (No 2)
[2024] FCA 957 Para 55

…hat is the test for “the reasonable person”? In Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace (No 2) [2024] FCA 957 at [85], Halley J stated:…
Commissioner of Taxation v Rawson Finances Pty Ltd
[2023] FCA 617 Para 1

…especially where the facts are peculiarly within the knowledge of the silent party” (see also Commissioner of Taxation v Rawson Finances Pty Ltd [2023] FCA 617; 116 ATR 458 at [87]).…
A40 Construction and Maintenance Group Pty Ltd v Smith (No 2)
[2022] VSC 72 Para 31

…is not required to have audited financial statements, such evidence may be permitted ( A40 Construction and Maintenance Group Pty Ltd v Smith (No 2 ) [2022] VSC 72 at [26] – [31]). This is an alternative that I considered. However, even if admitted, unsigned documents from unknown sources would have no weight, a…
Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2)
[2020] NSWSC 1141 Para 12

…the business, that itself can be actionable: Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 (I note the discussion of how the COVID legislation interacted with the tenants’ rights in that case, a claim which was put forward to me by the defendants in relation t…
Re Overgold Pty Ltd
[2019] VSC 624 Para 61

…mer J in Hall v Poolman [2007] NSWSC 1330 at [269] – [275] (observations not disturbed on appeal and cited with approval since: Re Overgold Pty Ltd [2019] VSC 624 at [33]), a reasonable director needs to ask such questions as how to turn assets into cash to pay off debts and if this cannot be done or is more like…
In the matter of Swan Services Pty Limited (in liquidation)
[2016] NSWSC 1724 Para 74

…I restate my earlier observations concerning proof of insolvency at a particular time of a company’s history. In Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724; 12 BFRA 224 at [220], Black J explained that in order to establish an expectation that the company is solvent for the purposes of s588H(2), a director…
BCI Finances Pty Ltd (in liq) v Binetter (No 4)
[2016] FCA 1351 Para 32

…r and Mrs Shin to give evidence, Mr Narayan refers to the inferences than can be drawn, as set out in BCI Finances Pty Ltd (in liq) v Binetter (No 4) [2016] FCA 1351; 348 ALR 227 at [122] – [135].…
Fisher v Divine Homes Pty Ltd
[2011] NSWSC 8 Para 56

…drawn from a number of aspects of the company’s behaviour, such as the failure to keep appropriate financial records: Fisher v Divine Homes Pty Ltd [2011] NSWSC 8; 85 ACSR 512 at [24]; there is a list of such matters in Australian Securities and Investments Commission v Plymin (No 1) [2003] VSC 123; 21 ACLC 700 a…
Strategic Financial and Project Services Pty Ltd v Bank of China Limited
[2009] FCA 604 Para 29

…be tendered, on the basis of the inherent unreliability of such statements: Strategic Financial and Project Services Pty Ltd v Bank of China Limited [2009] FCA 604. which concerned similar facts to the present matter. In those proceedings, the applicant’s solicitor sought to tender a document described as “a cop…
Hall v Poolman
[2007] NSWSC 1330 Para 61

…sed any reasonable director to ask himself or herself, and any other directors, what the situation was. As is explained by Palmer J in Hall v Poolman [2007] NSWSC 1330 at [269] – [275] (observations not disturbed on appeal and cited with approval since: Re Overgold Pty Ltd [2019] VSC 624 at [33]), a reasonable direc…
Juelle Pty Ltd v Buildev Properties Pty Ltd
[2006] NSWSC 302 Para 29

…rectors. Moore J noted that, while a report of this kind had been admitted into evidence in Juelle Pty Ltd v Buildev Properties Pty Ltd and Ors [2006] NSWSC 302, the report in the case of Juelle had been signed by the directors.…
Australian Securities and Investments Commission v Plymin (No 1)
[2003] VSC 123 Para 56

…es Pty Ltd [2011] NSWSC 8; 85 ACSR 512 at [24]; there is a list of such matters in Australian Securities and Investments Commission v Plymin (No 1) [2003] VSC 123; 21 ACLC 700 at [386]. In particular, as to unaudited financial statements, the court should take into account that the obligation to keep financial re…
Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation
[2001] NSWSC 621 Para 12

…because the court draws inferences from, inter alia, “commercial reality” ( Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; 53 NSWLR 213 at [45] – [51]), to the effect that the company’s financial problems are not temporary but have become “endemic”. Examples of such a “commerc…
Tourprint International Pty Ltd (In Liq) v Bott
[1999] NSWSC 581 Para 74

…relevant circumstances, and the director must have a reasonable basis for such expectation (citing Tourprint International Pty Ltd (in liq) v Bott [1999] NSWSC 581; (1992) 32 ACSR 201 at 215). In Tourprint International Pty Ltd (in liq) v Bott , Austin J stressed that the use of the word “expectation” requires an…
Jones v Dunkel
[1959] HCA 9 Para 33

…of RSE during the relevant period) would not have assisted their case, and draw the appropriate inference in accordance with the principle set out in Jones v Dunkel (1959) 101 CLR 298 at [320]. I take into account that the provisions of s588G and 588V of the Act entitles the court to consider the knowledge of both Mrs S…
Jones v Dunkel
[1959] HCA 8 Para 33

…he relevant period) would not have assisted their case, and draw the appropriate inference in accordance with the principle set out in Jones v Dunkel (1959) 101 CLR 298 at [320]. I take into account that the provisions of s588G and 588V of the Act entitles the court to consider the knowledge of both Mrs Shin and RSE…

Legislation cited in this decision · 3

Corporations Act 2001 (Cth)
286(1), 588E(4), 588G, 588GAAA, 588H, 58... 8 mentions (from Para 1)
Corporations Regulations 2001 (Cth)
2 mentions
Evidence Act 1995 (Cth)
1 mention (from Para 29)

Medium Neutral Citation:	Preiner & Anor v Shin & Anor [2025] NSWDC 341
Hearing dates:	30 July and 1 August 2025, submissions to 7 August 2025
Date of orders:	29 August 2025
Decision date:	29 August 2025
Jurisdiction:	Civil
Before:	Gibson DCJ
Decision:	See [82]
Catchwords:	INSOLVENCY – application by liquidator of company against former director for breach of statutory directors’ duty to prevent insolvent trading pursuant to s 588G of the Corporations Act 2001 (Cth) - whether reasonable grounds to suspect insolvency – date of insolvency – whether date of insolvency gave rise to “safe harbour” protections under s 588GAAA
Legislation Cited:	Corporations Act 2001 (Cth) ss 9, 286(1), 588E(4), 588G, 588H, 588V(1) and 588GAAA Corporations Regulations 2001 (Cth) 5.7B.01
Cases Cited:	A40 Construction and Maintenance Group Pty Ltd v Smith (No 2) [2022] VSC 72 ASIC v Plymin & Ors [2003] VSC 123 BCI Finances Pty Ltd (in liq) v Binetter (No 4) [2016] FCA 1351; 348 ALR 227 Commissioner of Taxation v Rawson Finances Pty Ltd [2023] FCA 617; 116 ATR 458 Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace (No 2) [2024] FCA 957 Fisher v Divine Homes Pty Ltd [2011] NSWSC 8; 85 ACSR 512 Fortcon Pty Ltd & Anor v Babicka & Ors (Security for Costs) [2025] VCC 616 Hall v Poolman [2007] NSWSC 1330 Jones v Dunkel (1959) 101 CLR 298 Juelle Pty Ltd v Buildev Properties Pty Ltd and Ors [2006] NSWSC 302 Australian Securities and Investments Commission v Plymin (No 1) [2003] VSC 123; 21 ACLC 700 Re Overgold Pty Ltd [2019] VSC 624 Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724; 12 BFRA 224 Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141 Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621; 53 NSWLR 213 Strategic Financial and Project Services Pty Ltd v Bank of China Limited [2009] FCA 604 Tourprint International Pty Ltd (in liq) v Bott [1999] NSWSC 581; (1992) 32 ACSR 201 at 215
Texts Cited:	“Some recent case law and statutory developments in insolvency”, ARITA conference 12 November 2020, Justice Ashley Black of the Supreme Court of New South Wales
Category:	Principal judgment
Parties:	Plaintiffs: First Plaintiff: Adam Bernard Preiner in his Capacity as Liquidator of Sorenzo Pty Ltd ACN 139 768 826 (in Liquidation) Second Plaintiff: Sorenzo Pty Ltd (in Liquidation) Defendants: First Defendant: Ms Yi Jeong Shin Second Defendant: Raphael Shin Enterprises Pty Ltd
Representation:	Counsel: Mr Narayan (Solicitor for the Plaintiff) Mr J Baird (Defendant) Solicitors: Plaintiff: Mils Oakley Defendant: Mathas Law
File Number(s):	2024/00226441
Publication restriction:	Nil