Vasudevan & Ors v Becon Const & Anor

(2014) 41 VR 445; [2014] VSCA 14

Victorian Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Winding up in insolvency
3. › Voidable transactions
4. › Unreasonable director-related transactions
5. › Disposition by company to creditor of director
6. › Whether disposition made 'for the benefit of' director
7. › Whether confined to direct benefits or equitable interests
8. › Corporations Act 2001 (Cth), ss 9, 588FDA, 588FE, 588FF, 588FG
1. Corporations
2. › Winding up in insolvency
3. › Voidable transactions
4. › Unreasonable director-related transactions
5. › Company assuming liability of director to third party
6. › Mortgage granted to secure assumed liability
7. › Whether reasonable person in company's circumstances would have entered into transaction
8. › Corporations Act 2001 (Cth), s 588FDA(1)(c)
1. Words and Phrases
2. › 'On behalf of'
3. › 'For the benefit of'
4. › Corporations Act 2001 (Cth), ss 9, 588FDA(1)(b)(iii)

Quick Take

The expression 'for the benefit of' a director in s 588FDA(1)(b)(iii) of the Corporations Act 2001 (Cth) bears its natural and ordinary meaning of 'for the advantage, profit or good' of the director, and is not confined to direct benefits or to cases involving the separation of legal and beneficial interests. A company's assumption of its director's guarantee liabilities and grant of a mortgage to the director's creditor constitutes a disposition 'for the benefit of' the director. The NSW Supreme Court decisions in Ziade Investments and Re Great Wall Resources, which confined 'benefit' to direct benefits or equitable interests, should not be followed on this point.