In January this year we reported on the decision of Stevenson J in Fitz Jersey Pty Limited v. AtlasConstruction Group Pty Limited (in liquidation) & Ors[2021] NSWSC 1692 in which the Court held that:
- an amount received by Atlas pursuant to an adjudication determination under the Building and
Construction Industry Security of Payment Act 1999(NSW) was required to be recognised in Atlas’ accounts as revenue, with a corresponding liability recorded as “deferred revenue”; - the actions of Atlas’ directors in declaring and paying dividends using the amount of the adjudication determination constituted an alienation of property with the intention to defraud Fitz Jersey as creditor within the meaning of s.37 of the Conveyancing Act 1919(NSW);
- by doing so, the directors had also breached their duties owed under the Corporations Act 2001(Cth) and to Atlas; and
- accordingly the dividends were to be restored by Atlas’ shareholders and their related persons and entities to Atlas for distribution by Atlas’ liquidator.
Stevenson J’s decision has been appealed to the NSW Court of Appeal, and a hearing of that appeal has been scheduled for March 2023.
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