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Taylor runs a business selling car parts and accessories. He decides to form a company to take over the business. Taylor sells his business to

Taylor runs a business selling car parts and accessories. He decides to form a company to take over the business. Taylor sells his business to the new company, Aussie Car Parts Pty Ltd (Aussie) at an inflated price, Taylor lends the company $60,000 to cover the cost of the purchase. Taylor secures his loan with a security interest over all the assets of Aussie. Taylor is the sole shareholder and sole director and is employed as the Manager of Aussie. The company has a worker's insurance policy.

Unfortunately, whilst installing new tyres Taylor is badly injured and requires extensive surgery and time in hospital. Aussie is forced into liquidation. The liquidator reports that there is only $150,000 available to pay over $300,000 in creditor claims.

With reference to the separate legal entity concept and relevant case law explain whether Taylor is entitled to workers compensation whilst he is off work and to be repaid the $60,000 he loaned to Aussie?

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