Trinco (NSW) - Case Update

A de facto director has been ordered to pay over $10 million after allowing a company to incur significant debts while insolvent.

Trinco (NSW), the company in question, operated as a management company for Trinity Construction, a construction company. Anthony Azizi was the sole director of Trinity but never formally appointed a director of Trinco. Robin Azizi, Mr Azizi’s sister, was the sole director of Trinco. She is now bankrupt so a claim against her cannot be pursued.

Melanie Schneider of Vincents was appointed liquidator of Trinco in December 2021. The liquidator ultimately sought to recover over $11.5 million in debts from Mr Azizi, arguing he was a de facto director who allowed the company to incur debts while insolvent.

Although he was never formally appointed at Trinco, the Court found that Mr Azizi effectively acted as its ultimate decision-maker. Evidence showed he negotiated with creditors, managed disputes, and exercised authority over subcontractors and suppliers. The Court concluded he was a director within the meaning of s 9AC(1) and therefore subject to the insolvent trading provisions.

The Court accepted expert evidence that Trinco was insolvent from at least 1 July 2018. It depended entirely on Trinity for funding, which consistently failed to provide enough to meet Trinco’s obligations. Creditors went unpaid, accounts payable aged well beyond terms, and Trinco had no independent capacity to generate revenue. Mr Azizi, as the person in control, continued causing Trinco to incur debts despite the company’s inability to pay them, effectively using subcontractors and suppliers to finance Trinity’s operations.

On the quantum, the Court excluded certain claims (such as debts incurred after administration, or amounts arising from settlement deeds that merely acknowledged existing liabilities, but accepted over $10 million as properly falling within s 588M. As a result, the Court ordered Mr Azizi to pay $10,059,175.52 to Trinco.

Read the decision HERE.

Professionals involved: Susan Cirillo of PG Hely Chambers (instructed by Henry William Lawyers) for Trinco (NSW) Pty Ltd (in liq) and Henry McKenna of Vincents as liquidator