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De Vries, Antony & Tayeh, Riad v Timbercorp Finance P/L (in liquidation) (ACN 054 581 190) [2021] VSCA 265

CORPORATIONS, CONTRACT
Victorian Court of Appeal
Judge(s): 
Kyrou and McLeish JJA and Lyons AJA
Parties: 

De Vries, Antony & Tayeh, Riad v Timbercorp Finance P/L (in liquidation) (ACN 054 581 190)

Judgment Date: 
21 September 2021
Catchwords: 

CORPORATIONS - Managed investment scheme - Initial loans by lending entity to members in respect of scheme application fees due to responsible entity - Lending entity seeking recovery of loans from scheme members - Application fees required to be held in trust - Book entries recorded payment of fee amounts by lending entity to responsible entity - Money paid from holding company account to trust company to hold on behalf of responsible entity - Further book entries recorded that amount as owed by responsible entity to holding company - Whether responsible entity borrowed money from holding company in contravention of Corporations Act 2001 (Cth) s 601GA(3) - Holding company in position of net indebtedness to responsible entity at all relevant times - No borrowing within meaning of s 601GA(3) - Loans recoverable.

CONTRACT - Inferred contract - Stage loans in respect of ongoing managed investment scheme costs - Lending entity seeking recovery of loans from scheme members - Ongoing costs due from members allegedly paid by lending entity to related responsible entity by means of book entries in accounts - Whether failure of consideration on part of lending entity by virtue of it making no payment to responsible entity - Whether agreement inferred between related companies to make payment by book entries - Whether inference of agreement open without movement of money - No requirement of movement of money - Inferred agreement to pay by book entries - Loans recoverable - White v Timbercorp Finance Pty Ltd (in liq) (2017) 123 ACSR 284, applied - P'Auer AG v Polybuild Technologies International Pty Ltd [2015] VSCA 42, applied - Timbercorp Finance Pty Ltd (in liq) v Tomes [2019] VSC 519, followed - Leave to appeal refused.

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