Perrine v Carrello

[2017] WASCA 151

Western Australia Court of Appeal

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Interrogate

Catchwords

1. Corporations
2. › Insolvent trading
3. › Director's duty to prevent insolvent trading
4. › Recovery of compensation by liquidator
5. › Loss or damage suffered by creditor
6. › Distinction between amount of debt and loss or damage in relation to debt because of insolvency
7. › Whether flexible payment arrangement affected quantum of loss
8. › Whether arrangement constituted forbearance or agreement that debts not due and payable
9. › Corporations Act 2001 (Cth), ss 588G, 588M
1. Corporations
2. › Insolvent trading
3. › Recovery of compensation by liquidator
4. › Causal inquiry under s 588M
5. › Hypothesis of solvency
6. › Whether creditor would have been paid on hypothesis company was solvent
7. › Corporations Act 2001 (Cth), ss 95A, 588M
1. Bankruptcy
2. › Stay of legal proceedings
3. › Appeal commenced by person who subsequently becomes bankrupt
4. › Effect of s 60 of Bankruptcy Act 1966 (Cth)
5. › Whether s 60 operates where case fully argued before bankruptcy
6. › Deemed abandonment where trustee does not elect to prosecute
7. › Bankruptcy Act 1966 (Cth), s 60

Quick Take

A flexible payment arrangement between related companies whereby the creditor forbears from demanding payment until the debtor's cashflow permits does not reduce the quantum of loss recoverable under s 588M of the Corporations Act 2001 (Cth). Such an arrangement constitutes forbearance on enforcement of the right to payment, not an agreement that debts are not due and payable. On the statutory hypothesis of solvency, the debtor company would have been able to pay all debts when due and payable, so the creditor's loss equals the face value of the unpaid invoices.