[2026] VSC 58
General information, not legal advice.
Supreme Court of Victoria
2026-02-20
Goulden AsJ
Original judgment source is linked above.
(a) named director, despite the prohibition on managing a corporation under s 206B(3) of the Corporations Act 2001 (Cth) ('Corporations Act'), and
(b) shareholder, despite all of his property and after acquired property vesting in his official trustee pursuant to s 58 of the Bankruptcy Act 1966 (Cth) ('Bankruptcy Act').
The validity of the series of transactions, impugned in this application by the first respondent, in which Mr Strangio has purported to engage as, variously, director and shareholder of various entities, turns on the application of the above described and related restrictions upon the interests and rights of a bankrupt.
(a) he became disqualified from managing any corporation upon his bankruptcy and remains disqualified for the period of his bankruptcy;[4]
(b) he ceased being a director of any corporation to which he had been validly appointed prior to his bankruptcy upon the making of the sequestration order;[5]
(c) he could not be appointed as a director of any corporation during the period of his bankruptcy unless permission was granted by ASIC or a Court;[6] and
(d) he could not engage in the conduct proscribed by s 206A following his disqualification without committing a criminal offence.[7]
(a) The validating effect of the provision is available only where the invalidity is caused by an invalidity in the appointment of the director.[14] That invalidity must be because 'the company or the director' did not comply with the constitution or a provision of the Corporations Act.[15]
(b) It is the act of an invalidly appointed director that is validated, not the appointment itself.
(c) The section refers to persons who act as directors and requires a purported appointment to that role.[16]
(d) 'Like its predecessor sections, it is not framed so as to render valid a resolution passed by any persons who without a shadow of title assume to act as directors of a company', nor will it have application where the purported appointment was made by a person or body not authorised to make the appointment.[17]
Despite this change, I think there are still reasons to carry the interpretation of the predecessor provision forward in s 201M(1). One is that s 201M(1) retains the reference to "appointment" which was the textual basis for the restrictive interpretation of its predecessors. This seems to have been the view of Lindgren AJA in Sheahan v Londish. The other is one of principle. The width of s 1322(4) is counter-balanced by the safeguards imposed by s 1322(6). Those safeguards ensure that a validating order cannot be made unless one or other of sub-paragraphs (a)(i) to (iii) is satisfied, and also provide a backstop (subparagraph (c) which prevents an order being made if that would result in any substantial injustice). The validation effected by s 201M is automatic; it applies in every case whether or not the outcome is "just and equitable", whether or not the persons concerned have acted honestly and whether or not it results in substantial injustice. There is every reason to read such a provision more narrowly than section 1322(4)(a).[21] (citations omitted)
Strictly speaking, that is not altogether correct. Section 201M is limited to cases in which a director has been purportedly appointed as such but the appointment is defective. Like its predecessor sections, it 'is not framed so as to render valid a resolution passed by any persons who without a shadow of title assume to act as directors of a company'. Arguably, it has no application either to cases in which the purported appointment of the director was made by a person or body not authorized to make the appointment. It also has no application to the invalid acts of a person who never claimed to be a director.
Furthermore, in contradistinction to its predecessor sections, s 201M(1) does not deal with the question of whether an effective act by a director binds the company in its dealing with other people or makes the company liable to another person. Consequently, even if s 201M(1) were otherwise applicable in this case, s 201M(2) would exclude its validating effect in relation to the issue of the ten further shares in 63 Buckley.[23]
(emphasis added)
In so doing, their Honours drew upon the long line of authority considering s 201M(1) and its predecessor provisions, including the case of Morris, in which Simonds LJ stated:
being designed as machinery to avoid questions being raised as to the validity of transactions where there has been a slip in the appointment of a director, [it] cannot be utilized for the purpose of ignoring or overriding, the substantive provisions relating to such appointment.[24]
In Gangemi, having determined that s 201M(1) did not apply, their Honours went on to hold that it was instead open to the Court to validate the share issue impugned in the case pursuant to the discretion conferred by s 254E of the Corporations Act, despite the fact that 'Lanciana was never a validly appointed director'.[25]
Section 201M(1) is qualified, relevantly, by the requirement that, at the time of the impugned act, the appointment, or the continuance of the appointment, of the director was invalid because the company or the director failed to comply with the company's constitution or a provision of the Act. However, in the present case, the effect of [the] bankruptcy was that, by operation of the Act itself, and without more, Mr Bartolotti ceased to be a director of the company at the commencement of his bankruptcy...The case does not present itself as one involving the act of a director whose appointment, or continuing appointment was invalid at the relevant time because the company or the director did not comply with the company's constitution or a provision of the Act.[28]
Legal and equitable title to shares upon bankruptcy
Chain of title to the shares in the applicant
(a) First, on 28 February 2013, the purported transfer, by Ilford Vic, of all the issued shares in the applicant to Mr Strangio to be held on trust for Mr Vida. The declaration of trust was also made on 28 February 2013.[41] The applicant relies on the Standard Share Transfer Form purportedly signed by Mr Strangio as director of Ilford Vic.[42]
(b) Second, on 20 August 2018, the purported appointment, by the members of Civilink,[43] of Mr Vida as the director of Civilink.[44]
(c) Third, on 20 August 2018, the purported transfer, by Mr Vida, of the legal title to all of the issued shares in the applicant to Civilink[45] as replacement for Mr Strangio as trustee.[46]
(d) Fourth, on 2 January 2021, the purported appointment of Mr Vida as a director of the applicant, by its sole-member Civilink.[47]
(e) Fifth, on 2 October 2025, the purported transfer, by Civilink, of all of its shares in the applicant to Nationhire.[48]
(f) Sixth, on 3 October 2025, the purported ratification, by Mr Vida, in his capacity as a director of the applicant as appointed on 2 January 2021 (see (d) above), of the commencement of this proceeding by the applicant.
(g) Seventh, on 3 October 2025 (but after the ratification described in (f) above[49]), the resignation of Mr Vida as a director of the applicant and his purported re-appointment, by resolution of Nationhire, as sole shareholder in the applicant.
Mr Strangio had no power to appoint Mr Vida as director of Civilink
No evidence that Mr Vida was appointed by Civilink as a director of the applicant
Shares in the applicant have vested in the Commonwealth
DONOJON 1325 PTY LTD (formerly ACN 119 219 840 PTY LTD) (ACN 119 219 840)
DONOJON PTY LTD ATF DONOJON UNIT TRUST (ACN 654 428 994)
[1] Transcript of Proceedings, Donojon 1325 Pty Ltd v Donojon Pty Ltd [2026] VSC 58 (Supreme Court of Victoria, S ECI 2025 04110, Goulden AsJ, 30 September 2025), T26.20-T27.9.
[2] This affidavit was refiled by the applicant on 8 December 2025 to include pages of the exhibits to that affidavit which were missing in the version filed 5 November 2025.
[4] Corporations Act 2001 (Cth) s 206B(3) ('Corporations Act').
[5] Ibid ss 203B(3), 206A(2).
[6] Ibid s 201B(2).
[7] Ibid s 206A(1).
[8] The applicant was then known as Parlam Pty Ltd.
[9] To confuse matters, the applicant was also known as Civilink Group Pty Ltd in the period from 2 January 2021 to 14 September 2023.
[10] From 26 May 2023 until 24 September 2023.
[11] From its registration on 14 May 1999 until 25 May 2023.
[12] Affidavit of Theo Zervas sworn on 5 November 2025, Exhibit "TZ-3", 155-168.
[13] This extract was obtained on 28 November 2025 and is annexed to the first respondent's submissions made on 2 December 2025.
[14] Official Trustee in Bankruptcy v Buffier [2005] NSWSC 839; (2005) 54 ACSR 767, [27] ('Buffier').
[15] Corporations Act (n 4) s 201M(1).
[16] Re Colorbus Pty Ltd (in liq); Mentha & Anor v Colorbus Pty Ltd [2004] VSC 486; (2004) 213 ALR 789.
[17] Gangemi v Osborne; Bloomingdale Holdings Pty Ltd v 63 Buckley Street Pty Ltd [2009] VSCA 297, [67] (Nettle & Harper JJA, Mandie JA agreeing) ('Gangemi').
[18] Preston v Diaspora Holdings Pty Ltd; Diaspora Holdings Pty Ltd v Owners Corporation of Strata Plan 68608 [2019] NSWSC 651 ('Diaspora').
[19] Morris v Kanssen [1946] AC 459 ('Morris').
[20] Grant v John Grant & Sons Ltd [1950] HCA 54; (1950) 82 CLR 1, 53 (Kitto J) ('Grant').
[23] Ibid [66]-[68] (Nettle and Harper JJA). This aspect of the trial judgment was not directly addressed by Mandie JA.
[24] Morris (n 19) 472 (Simonds LJ, speaking of legislation in the UK similar to s 226(1) of the Companies Act 1864 (Vic) upon which s 201M(1) of the Corporations Act is based) cited with approval in Grant (n 20) 53 (Kitto J).
[26] Calabretta v Redpen Developments Pty Ltd (in liq) (recs and mgrs apptd) [2010] FCA 81; (2010) 183 FCR 47 ('Calabretta').
[30] Bankruptcy Act 1966 (Cth) s 58(1)(a) ('Bankruptcy Act').
[31] Ibid ss 58(1)(b), (6).
[37] Ibid s 201F(3). See also Buffier (n 14) [34] in which the Court held that a 'director' under the extended definition in s 9AC(1)(b)(i) does not apply to s 201F.
[38] Cf affidavit of Bruno Strangio sworn on 12 December 2025, [3], which confuses the shares Mr Strangio owned in Ilford Vic with the shares Ilford Vic owned in the applicant.
[39] There is insufficient evidence before the Court to determine when he became the sole shareholder in Ilford Vic, save that he is listed as the most recent former shareholder of all 100 shares in the ASIC current and historical extract for Ilford Vic (which was obtained on 28 November 2025) annexed to the first respondent's submissions made on 2 December 2025.
[40] ACN 691 502 771. There is an ASIC current and historical extract dated 31 October 2025 exhibited to the affidavit of Theo Zervas sworn on 5 November 2025, Exhibit "TZ-3", 133-5 ('Zervas 5 November 2025 affidavit').
[41] Affidavit of Justin Vida sworn on 5 November 2025, Exhibit "JV-2", 2-5 ('Vida 5 November 2025 affidavit').
[42] Vida 5 November 2025 affidavit, Exhibit "JV-2", 1.
[43] At the time Civilink was known as Ilford Tower Pty Ltd.
[44] Vida 5 November 2025 affidavit, Exhibit "JV-2", 11.
[45] At the time Civilink was known as Ilford Tower Pty Ltd.
[46] Vida 5 November 2025 affidavit, Exhibit "JV-2", 6-9. It is to be noted that this purported transaction between trustees was not notified to ASIC until 15 October 2024, with the ASIC form 484 (Zervas 5 November 2025 affidavit, Exhibit "TZ-3", 121-2) then filed recording information that is inconsistent with the purported transaction in that the form identifies Mr Strangio as the beneficial owner of the shares being transferred, and Civilink as the new beneficial owner of the shares.
[47] There is no resolution of members effecting the appointment in evidence.
[48] Vida 5 November 2025 affidavit, Exhibit "JV-2", 12 comprises a form 484 lodged on 31 October 2025 which purports to show the change in shareholdings, however, the form shows a change to member details in the applicant as an increase of 0 in the shares held by Nationhire Pty Ltd.
[49] Affidavit of Justin Vida sworn on 12 December 2025, [5], clarifying the evidence given by his affidavit sworn on 5 November 2025 at [10].
[50] Zervas 5 November 2025 affidavit, Exhibit "TZ-3", 136, 150, clause 16.
[51] Corporations Act (n 4) s 259A. To this end, the current and historical extracts for Civilink in evidence in this proceeding (see Zervas 5 November 2025 affidavit, Exhibit "TZ-3", 155-219) show the 'Trustees for the Strangio Family Strangio' as the legal and beneficial owner of shares in Civilink. If this is the same as the Strangio Family Trust, then the shareholding breaches the prohibition in s 259A. If it is not the same trust, then the members resolution has not been passed on behalf of the members of Civilink as it purports to have been.
[52] Zervas 5 November 2025 affidavit, Exhibit "TZ-3", 155-168.
[53] Affidavit of Justin Vida sworn on 20 September 2025, Exhibit "JV-1", 1-3.
[54] Affidavit of Anthony Webb sworn on 22 September 2025, [4].
[55] Affidavit of Anthony Webb sworn on 5 November 2025, [4].
[56] Vida 5 November 2025 affidavit, [4].
Donojon 1325 Pty Ltd
Donojon Pty Ltd [2026] VSC 58