Treloar Constructions Pty Ltd v McMillan

Case [2017] NSWCA 72

Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Treloar Constructions Pty Limited v McMillan [2017] NSWCA 72
Hearing dates: 9 February 2017
Decision date: 06 April 2017
Before: Beazley P;
Gleeson JA;
Emmett AJA
Decision:

(1)   Appeal allowed;

 

(2)   Set aside the orders made in the District Court and, in lieu thereof, direct the entry of judgment for the plaintiff in the sum of $418,991.77 together with interest and order the defendant to pay the plaintiff’s costs;

(3) The respondent to pay the appellant’s costs of the appeal and to have a certificate under the Suitors’ Fund Act 1951 (NSW) if so entitled.
Catchwords:

CONTRACTS – payment term in contract for construction and project management services – stipulation that suppliers and contractors organised and paid by contractor to be charged at cost plus management fee – whether effect of the word “paid” meant that contractor not entitled to render invoices until it had paid underlying suppliers and contractors

 

CORPORATIONS – recovery of compensation from director pursuant to Corporations Act 2001 (Cth), s 588M for insolvent trading contrary to s 588G – requirement of insolvency at time debts incurred – factors relevant in determining whether company unable to pay its debts as and when they become due and payable – relevance of non-binding offer of funding – relevance of availability of informal overdraft facility – relevance of unpaid tax debts – relevance of trade debtors of related companies

 

CORPORATIONS – recovery of compensation from director pursuant to Corporations Act 2001 (Cth), s 588M for insolvent trading contrary to s 588G – requirement of insolvency at time debts incurred – where party seeking recovery relied on report and expert evidence of insolvency practitioner to establish insolvency at relevant times – whether respondent director bore evidentiary onus to contradict expert’s evidence

CORPORATIONS – recovery of compensation from director pursuant to Corporations Act 2001 (Cth), s 588M for insolvent trading contrary to s 588G – requirement that person to whom debt owed has suffered “loss or damage” in relation to the debt because of the company's insolvency – whether non-payment of invoices sufficient to establish “loss or damage”
Legislation Cited: Corporations Act 2001 (Cth), s 95A, 588G, 588H, 588M
Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27; [2009] HCA 41
Australian Securities and Investments Commission v Edwards (2005) 220 ALR 148; [2005] NSWSC 831
Australian Securities and Investments Commission v Plymin (2003) 46 ACSR 126; [2003] VSC 123
Certain Lloyd’s Underwriters v Cross (2012) 348 CLR 378; [2012] HCA 56
Chan v First Strategic Development Corporation Limited (In liq) [2015] QCA 28
Charter Reinsurance Co Ltd v Fagan [1997] AC 313
Edenden v Bignall [2007] NSWSC 1122
Edwards v Australian Securities and Investments Commission (2009) 264 ALR 723; [2009] NSWCA 424
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Emanuel Management Pty Ltd v Foster’s Brewing Group Ltd [2003]…

Continue reading Treloar Constructions Pty Ltd v McMillan

Sign in free to access the full text

Details
AGLC
Treloar Constructions Pty Ltd v McMillan [2017] NSWCA 72
Case
[2017] NSWCA 72
Decision Date

CaseChat Overview and Summary

The appeal in *Treloar Constructions Pty Ltd v McMillan* concerned a dispute over payment terms in a construction and project management services contract, and a claim for compensation against a director for insolvent trading under the *Corporations Act 2001* (Cth). The primary legal issues before the Court of Appeal of New South Wales were whether the word "paid" in the contract's payment clause meant that the contractor was not entitled to render invoices until it had actually paid its own suppliers and contractors, and whether the company was insolvent at the time the debts were incurred, thereby entitling the plaintiff to recover compensation from the director under sections 588M and 588G of the *Corporations Act*. Further issues included the evidentiary onus on the director to contradict expert evidence of insolvency, and whether the non-payment of invoices constituted "loss or damage" for the purposes of section 588M.

The Court of Appeal found that the word "paid" in the contract did not prevent the contractor from rendering invoices before it had discharged its own payment obligations to suppliers and contractors. The court also determined that the company was indeed insolvent at the relevant times, applying principles that consider factors such as the availability of informal overdraft facilities and the relevance of unpaid tax debts, while noting that a non-binding offer of funding was not a reliable indicator of solvency. The court held that the respondent director bore an evidentiary onus to contradict the expert evidence of insolvency, and that the non-payment of invoices was sufficient to establish the requisite "loss or damage" under section 588M.

Consequently, the Court of Appeal allowed the appeal, set aside the orders of the District Court, and directed the entry of judgment for the plaintiff in the sum of $418,991.77, plus interest, with costs ordered against the defendant. The respondent was also ordered to pay the appellant's costs of the appeal.

Orders

Orders of the court

(1) Appeal allowed;

(2) Set aside the orders made in the District Court and, in lieu thereof, direct the entry of judgment for the plaintiff in the sum of $418,991.77 together with interest and order the defendant to pay the plaintiff’s costs;

(3) The respondent to pay the appellant’s costs of the appeal and to have a certificate under the Suitors’ Fund Act 1951 (NSW) if so entitled.

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.