White Constructions (ACT) Pty Ltd (in liq) v White

White Constructions (ACT) Pty Ltd, in liquidation, sued White, a director, regarding alleged breaches of directors' duties. The liquidator claimed that White acted fraudulently, divesting company assets to leave no asset to meet future claims. The Federal Court of Australia examined whether White acted as a de facto director, the necessity of actual knowledge for fraudulent breach, and if the transactions were intended to leave no assets for creditors. The Court also addressed whether there were reasonable grounds to expect insolvency, whether unliquidated damages were debts due and payable, and if White failed to consider the interests of unsecured creditors.

The central legal issues involved whether actual knowledge was required for a fraudulent breach of directors' duties, whether White acted as a de facto director, and the purpose behind the divestiture of assets. The Court also needed to decide if there were reasonable grounds to expect insolvency, if unliquidated damages were debts due and payable, and if White had failed to regard the interests of unsecured creditors. Furthermore, the Court considered whether the liquidator's case extended to non-intentional breaches of duty, and whether the case was opened beyond the pleadings and if the plaintiff should be held to the pleaded case.

The Court found that White acted as a de facto director and that fraudulent breaches of directors' duties do not necessarily require actual knowledge. The Court held that the purpose of the transactions was to leave no assets to meet future claims. It was determined that there were reasonable grounds to expect insolvency and that unliquidated damages were debts due and payable. The Court also concluded that White failed to have regard to the interests of unsecured creditors. The Court ruled that the liquidator's case did not extend to non-intentional breaches of duty and that the plaintiff should be held to the pleaded case. The Court did not open the case beyond the pleadings.

The Court ordered White to compensate White Constructions (ACT) Pty Ltd for the losses suffered due to the breaches of directors' duties. Additionally, the Court directed that White pay unliquidated damages as debts due and payable. The Court did not award any relief beyond the scope of the pleaded case.