Voidable transactions When a company becomes insolvent, sections 588FA and 588FB of the Corporations Act 2001 (Cth) (Corporations Act) empower liquidators to investigate voidable transactions, including unfair preference and uncommercial transactions as well as unreasonable director-related transactions.

The facts  

The Plaintiffs were appointed joint and several liquidators to three separate companies (“Companies”) which were being wound up in insolvency.  

The three companies had previously traded in partnership (“Partnership”) in an accounting practice.  

Summary

The Supreme Court of Western Australia has recently held that a creditor’s claim against a guarantor was extinguished some years earlier, under the guarantor’s deed of company arrangement (DOCA).

The reasoning behind Le Miere J’s decision in Australian Gypsum Industries Pty Ltd v Dalesun Holding Pty Ltd is that a DOCA extinguishes future liabilities arising under an agreement made prior to the execution of the DOCA. This includes those arising under pre-existing guarantees.