Symbion Pty Ltd

In the matter of Symbion Pty Ltd, the Supreme Court of Queensland was asked to determine whether a company director, Cristy Condon, had breached her duties under the *Corporations Act 2001* (Cth) by failing to prevent the company from incurring debts when there were reasonable grounds to suspect it was insolvent. The dispute arose from allegations that Ms. Condon, as a director of Symbion Pty Ltd, allowed the company to continue trading and incur further debts despite the company's precarious financial position.

The central legal issue before the Court was whether Ms. Condon had breached section 588G of the *Corporations Act 2001*, which imposes a duty on directors to prevent a company from incurring debts if the company is insolvent or becomes insolvent by incurring the debt, and if there are reasonable grounds for suspecting insolvency. The Court was required to assess the evidence to determine if Ms. Condon had reasonable grounds to suspect insolvency and, if so, whether she took all reasonable steps to prevent the company from incurring the debts in question.

The Court considered the director's knowledge and the information available to her at the relevant times. It applied the principles established in case law regarding the standard of care and diligence expected of directors, particularly in circumstances where financial difficulties arise. The Court analysed the financial records and communications available to Ms. Condon, assessing whether a reasonable director in her position would have formed the suspicion of insolvency and what steps, if any, were taken to address the company's financial position. The Court's reasoning focused on the objective test of whether reasonable grounds for suspicion existed, rather than Ms. Condon's subjective belief.