The prohibition against insolvent trading is not novel or new. Traditionally, it has been open to liquidators to identify the debts by reference to the proofs lodged which has been the usual manner of pleading. In circumstances where there are insufficient books and records, the presumption of insolvency arising from that has provided an easy way home for pleading a case against a director. In 2018, Parker J delivered his decision in Devine v Liu; Devine v Ho [2018] NSWSC 1453, in which his Honour struck out pleadings that failed to identify the dates of debts and the manner in which the absence of books and records gave rise to the presumption. Until recently, Parker J’s decision has not been considered by a superior court. In Copeland in his capacity as liquidator of Skyworkers Pty Limited (in Liquidation) v Murace [2023] FCA 14, Halley J endorsed Parker J’s findings. Tonight’s CPD will look at the critical elements of those two decisions, how they will impact pleading by both a liquidator and director defendant in insolvent trading claims, how liquidators can safeguard their positions and open the question to the floor as to the correctness of the two decisions.
- 1 CPD Point in Substantive Law
- Insolvent trading claims CPD Slides
