Tosich Construction Pty Ltd (in liq) v Tosich

Tosich Construction Pty Ltd (in liquidation) brought an action against Tosich, seeking to recover certain sums of money that were allegedly owed by Tosich to Tosich Construction. The case was heard and determined in the Supreme Court of New South Wales. The primary dispute centred on whether certain payments made by Tosich Construction to Tosich were loans or dividends, and whether Tosich was liable to repay these amounts to the liquidator of Tosich Construction.

The legal issues before the court were whether the payments in question constituted dividends that should be returned to the company's creditors, and if Tosich was personally liable for these amounts. The court needed to determine the nature of the payments, whether they were loans that could be reclaimed by the liquidator, or if they were legitimate distributions of company profits that should not be reclaimed. Additionally, the court had to consider the applicability of certain statutory provisions concerning the return of dividends by directors and shareholders.

The court found that the payments made by Tosich Construction to Tosich were not loans but were instead dividends. These dividends were made despite the company being insolvent at the time, which is a contravention of statutory provisions. As a result, Tosich was personally liable to repay these amounts to the liquidator. The court dismissed the appeal and ordered Tosich to pay the costs of the proceedings.