CORPORATIONS LAW – where now insolvent plaintiff company executed a mortgage over land in favour of the defendant to secure borrowings from the defendant by two other companies – where all three companies share two common directors – where each of the three companies also had other directors – where the two common directors had given personal guarantees guaranteeing the repayment of borrowings by the other two companies – whether by the grant of the mortgage the two common directors obtained a benefit by reducing their contingent liability under the terms of the personal guarantees – whether the transaction was an unreasonable director-related transaction within the meaning of s 588FDA of the Corporations Act 2001 (Cth) – whether the granting of the mortgage was made to a person on behalf of, or for the benefit of, a director – whether a reasonable person in the company’s circumstances would not have entered into the transaction – held transaction an unreasonable director-related transaction – whether the defendant should pay the plaintiff an amount that fairly represents some or all of the benefits that the defendant has received because of the transaction – assessment of benefit under s 588FF(4) of the Act – orders made
Original article available at: https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2024/2024fca0006
For more information, see the original judgement.
