Slaven v Menegazzo

[2009] ACTSC 94

MICHAEL EDWARD SLAVEN v CLINTON JOHN MENEGAZZO
[2009] ACTSC 94 (14 August 2009)

No. SC 926 of 2008

Judge:              Mansfield J
Supreme Court of the ACT

Date:               14 August 2009

IN THE SUPREME COURT OF THE       )
  )          No. SC 926 of 2008
AUSTRALIAN CAPITAL TERRITORY    )          

BETWEEN:MICHAEL EDWARD SLAVEN

First Plaintiff

R & R NOMINEES PTY LTD

(IN LIQUIDATION)

ACN 081 759 766

Second Plaintiff

AND:

CLINTON JOHN MENEGAZZO

Defendant

ORDER

Judge:  Mansfield J
Date:  14 August 2009
Place:  Canberra

THE COURT DECLARES THAT:

1. The contract entered into between the second plaintiff and the defendant on 4 August 2006 relating to property known as Unit 5, 30 Pacific Street, Batemans Bay in the State of New South Wales is void.

THE COURT ORDERS THAT:

1. Within 28 days the defendant take all such steps as are necessary to discharge Caveat AC640779E lodged by him over the property known as Unit 5, 30 Pacific Street, Batemans Bay in the State of New South Wales.

1. The defendant pay to the plaintiffs the costs of the proceeding.

THE ISSUE

1. This application under s 588FF of the Corporations Act 2001 (Cth) (the Act) seeks to have declared void a contract made between R & R Nominees Pty Ltd (In Liquidation) (the company) as vendor and Clinton Menegazzo (Mr Menegazzo) as purchaser, made on 4 August 2006 (the Contract). The Contract related to certain real property at Lot 5 in Strata Plan 79102, a property known as Unit 5, 30 Pacific Street, Batemans Bay in New South Wales (the property). The foundation for the claim is that the Contract is an unreasonable director-related transaction for the purposes of s 588FDA of the Act. Michael Slaven is the liquidator of the company.

THE FACTS

1. There is no real dispute between the parties about the facts.

1. At material times, the shareholders and directors of the company were John Menegazzo and Raymond Schofield.  John Menegazzo is the father of Mr Menegazzo. 

1. At the time of the Contract, the company was in the process of completing the construction of a development at 30 Pacific Street, Batemans Bay, comprising 10 units (the development).  In fact, the project was well advanced.  On 5 October 2006, the accountant for the company provided a document setting out the “Projected Net Profit” position for the development, based on actual costs to 30 June 2006 and estimates thereafter.  It shows projected gross revenue on sales of the 10 units, based on a real estate agency’s listing price, of $4.604M.  After allowing for the incurred and estimated completion costs, the land cost, and the sales costs, the estimated net fund available for distribution to the “unit holders” is shown as $971,903.  The estimated completion costs at 30 September 2006 were only $156,935.

1. The accountant’s “Projected Net Profit” document indicates that the company is a trustee company for the “R & J Development Trust”.  I assume (although there is no direct evidence of it) either that (and more probably) each of the directors’ family trusts were…