Key Points:
In McCracken, the Queensland Court of Appeal
comprehensively demolished the idea that section 1324 could be used
to order a director to pay damages to a creditor of his
company
Directors have dodged a bullet, thanks to a Queensland Court of
Appeal decision on Friday.
Former rugby league star – and company director
– Jarrod McCracken has won his appeal against a $1.5
million damages (plus interest) award (McCracken v Phoenix
Constructions (Qld) Pty Ltd [2012] QCA 129).
What took this case out of the ordinary was that the damages
were awarded to someone to whom Mr McCracken thought he owed no
legal duties – a creditor of his company.
Mr McCracken was originally ordered to pay the damages under a
little-noticed section at the back end of the Corporations Act.
That decision threatened directors with the possibility of personal
damages claims from creditors and even shareholders.
