Wow! The Supreme Court of Victoria has recently handed down a case that has some interesting obiter points on s588FF of the Corporations Act (the voidable transaction relief provision).
1. Although the Plaintiff was not seeking curial orders under s588FF; and
2. The liquidator itself had not applied for such orders;
3. The plaintiff was allowed to use either ss588FB (uncommercial transaction) or 588FDA (unreasonable director-related);
4. “As a platform … that opens the doorway to” s588FF(1)(d); but
5. Only as long as there was a prima facie case that ss588FB or 588FDA could be made out by a liquidator if such a claim was brought.
I have never seen s588FF used in this way before, has anyone else?
Farid Assaf – your book gets a mention at para 65.
His Honour accepted that s588FF could be a proprietary claim (as opposed to a personal claim).
One last thing that was interesting is that the Court limits s588FDA to transactions between the insolvent company and a related natural person.
This is very old school thinking. I favour the recent Pearce v Gulmohar [2017] FCA 660 decision, which broadens the reach of 588FDA to all related persons.
I will publish more about this case soon, in particular the equitable tracing issue.
