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Australian Motor Finance Limited (Receivers and Mangers appointed) v Angeleri (No 3) [2010] FCA 1431

by Hilary Kincaid 13. January 2011 10:54

Facts

The case concerns allegations of breaches of ss 180, 181 and 182 of the Corporations Act 2001 (Cth) arising out of a fictitious loan scheme. The plaintiffs sought summary judgment as a result of the defendants’ admissions during the course of public examinations, investigations by receivers and managers, material obtained through warrants by police and other evidence.

 

The third defendant, O’Brien, denied being an officer of the company as defined in s 9 of the Corporations Act. He was not a director or secretary of the companies involved. In [41-2], the court discussed O’Brien’s level of involvement in the creation of the fictitious loans (he created them, signed off on them, had it not been for his actions the company would not have entered into the loans) and it was held that he was an officer.

 

In relation to s 181, the court noted the ongoing debate as to whether subjective dishonesty is required to be proven, and found the weight of authority was in favour of that approach: [51]. In determining whether the conduct caused loss, the court is to undertake a “common sense factual inquiry”: [53]. The judgment at [62-4] lists a number of admissions made by the defendants in the examination regarding their conduct. The defendants did not deny their actions caused the companies loss.

 

The defendants took issue with the amount of compensation claimed due to the accounting treatment of the fictitious loans such as interest calculations after funds were advanced. The court held that the calculations did not change the amount actually advanced for those loans.

 

Outcome

Ultimately, the court found the defendants had no reasonable prospects of defending the s 181 or s 182(1)(a) and (b) cases. The court made declarations of the breaches under s 1317E and awarded compensation under s 1317H for the amount advanced as a result of the fictitious loans.

 

Relevant paragraphs of Ford

[1.390], [3.390], [3.400], [3.410], [3.420], [7.191], [8.065], [8.280], [8.310], [8.360],

[8.080], [8.385],[8.400], [9.280], [9.288], [9.560], [9.690], [10.320], [10.323],

[10.600], [12.120], [16.080], [16.170],[16.310], [20.080], [20.150], [22.430],

[22.450], [24.380], [24.480], [24.600],[24.750] [25.121]

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Ford's Principles of Corporations Law



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