Welcome Homes Real Estate Pty Ltd v Ziade Investments Pty Ltd

Welcome Homes Real Estate Pty Ltd (the appellant) appealed a decision of the Supreme Court of New South Wales concerning the winding up of Ziade Investments Pty Ltd (the respondent). The dispute centred on transactions entered into by Ziade Investments prior to its liquidation, which the liquidator alleged were voidable as uncommercial or unreasonable director-related transactions under the *Corporations Act 2001* (Cth).

The primary legal issues before the Court of Appeal were whether the transactions in question constituted "uncommercial transactions" within the meaning of s 588FB of the *Corporations Act*, and whether they were "unreasonable director-related transactions" under s 588FDA. The court was also required to consider the insolvency of the company at the time these transactions occurred, a prerequisite for relief under ss 588FE and 588FF.

The Court of Appeal affirmed the findings of the primary judge, holding that the transactions were indeed uncommercial and unreasonable director-related transactions. The court applied the principles established in case law regarding the assessment of whether a transaction is uncommercial, focusing on whether a reasonable person in the company's position would have entered into the transaction in the circumstances. The court found that the evidence demonstrated a lack of commercial justification for the transactions and that they were entered into for the benefit of directors rather than the company, thereby meeting the criteria for voidable transactions under the *Corporations Act*.

The appeal was dismissed, and the appellant was ordered to pay the costs of the respondent.