Arogen Pty Ltd & Ors v O'Meley & Anor

Judgment 1Essentially this is a dispute within the O'Meley family as to who owns three proprietary companies. There has been a falling out between some of the principal members of the family and this means that whatever the result of the case, some members of the family will find that their hard work over many years has gone to the benefit of the other members of the family. Unfortunately in this type of dispute there is no room for discretionary orders; everything must be done according to law. 2The dramatis personae can be briefly summarised as follows. I will without meaning any disrespect use first names only as the surname in each case is O'Meley, unless I have indicated a different surname. 3The first three plaintiffs are companies owned by the family or some members of it. The fourth plaintiff, Roslyn, is the mother of Rodney, Stephen and Anthony, sometimes called Tony. Roslyn is married to Trevor. Ellie is Anthony's current wife. Kane is Anthony's son. Michelle is Roslyn's niece. Mark is a cousin. Other persons who feature in this case are Ermelinda Clark, a financial person, Annette West likewise, David Paton, a former manager, Samantha (Dever), former partner of Rodney, and Scott Puxty, a solicitor. 4Prior to 2005 Rodney and Anthony were involved as principals in a construction company which got into dispute with a larger company, the result of which was their bankruptcy. Both became bankrupt on 12 December 2005, their bankruptcies came to an end on 14 March 2009. 5Arogen, the first plaintiff, was incorporated on 17 August 2004. It was initially named "Pacific Administration Australia Pty Ltd". It changed its name to Arogen Pty Ltd on 18 October 2005. The uncontradicted evidence is that Samantha chose the name Arogen to which the others agreed as representing A (Anthony), R (Rodney), O (O'Meley), Gen (generation). 6The first director was Michelle but in 2005 Samantha was approached and told (by Anthony) that it was desirable to have a person whose name was not O'Meley as a director and Samantha agreed to be a director and took over from Michelle. Roslyn became a director on 16 October 2009. It would seem that apart from the subscriber shares, the first 100 shares were originally held by Michelle and these were later transferred to Samantha. The ASIC register states that each of these ladies held beneficially (see volume 4, page 167). At present, there are 10, 000 shares all held by O'Meley Investments Pty Ltd. 7O'Meley Investments Pty Ltd, the second plaintiff, was incorporated on 6 February 2006. The fourth plaintiff, Roslyn was its sole director from its incorporation, she says that she remains a director however ASIC's records show that she was displaced by Anthony as the sole director between 5 August 2012 and 17 January 2013. What happened here will be detailed later. There are ten shares all of which are held by Roslyn. 8O'Meley & Partners Pty Ltd was incorporated on 8 April 2004 in Queensland. Roslyn became a director on 26 May 2004 but was a joint director with Michelle until the latter resigned on 27 May 2005 leaving Roslyn as the sole director. She claimed to continue as sole director. However ASIC's records show Anthony as the sole director from 7 August 2012 to 17 January 2013 a matter to which I will return. Originally there were 100 shares, Michelle held 97 and Elizabeth Davis held 3. At some stage a further 100 were issued and Anthony held 197 and Ms Davis 3. The 197 shares were passed to Roslyn at some stage and she later arranged with Ms Davis for a transfer to her of those 3 shares so that she now holds all 200 shares. This company is the third plaintiff. 9After Anthony emerged from bankruptcy he claimed that the shares in Roslyn's name were held on trust for him. In 2012, documents were filed with ASIC changing the sole directorship from Roslyn to Anthony and a transfer of shares was produced transferring shares from Roslyn to Anthony. Roslyn says all these are forgeries. 10The plaintiffs commenced these proceedings on 25 January 2013. There have been 28 listings of the case dealing with these interlocutory matters. The case was expedited by consent and came on for hearing before me on 30 July 2013. Mr M K Condon SC and Ms S Clemmett appeared for the plaintiffs. Mr B Levet appeared for the defendant. The case continued until 2 August 2013. 11On the first day of hearing Mr Levet applied for an adjournment. He said that the case was inadequately prepared as a result of a number of factors, the most serious being Anthony's dyslexia which had the effect of preventing him from reading documents thus slowing down the preparation and also changes of legal representation, the current solicitors having only recently come into the matter as he had. 12Mr Condon SC strenuously objected to the application and pointed out that the case had been expedited by consent and had had a large number of listings before the first day of hearing. He thought that the plaintiff would be prejudiced far more than costs if an adjournment was granted and that it would not appear that even if an adjournment was granted with a costs penalty that those costs could be paid. 13I did not consider in all the circumstances that the case was sufficient to grant an adjournment. However, I ruled that I would spend the rest of that day reading the affidavits and exhibits (there were seven volumes of them) subject to all just objections and that the hearing would be commenced on the following day. Mr Levet appeared to accept this and co-operated in that he provided his list of objections to the plaintiff's affidavits by 5 pm that day. 14The hearing began the following day (Wednesday) without further objection. I ruled on the objections to the affidavits, admitted documents and Roslyn went into the witness box. She gave her evidence fluently and was cross-examined and I have no doubt that I should accept her evidence completely. She was not shaken in cross-examination and indeed many of the key points in her evidence were not made the subject of cross-examination. 15The evidence continued through to the end of the Thursday and I heard submissions on Friday 2 August 2013 when I reserved my decision. 16There was from time to time during the hearing some suggestion that because the defendants had been hurried they had not put forward the material that they would have done had they had sufficient time. Apart from acknowledging that there is some force in this suggestion, it is not possible to adjust the evidence or the weight of evidence to any significant extent because of this. In any event it must be said that there were at least six months in which the case could have gotten ready. Further it is not in the mouths of those who have consented to expedition to then protest that because the case came on so quickly they did not get themselves completely ready. 17I now turn to the relief sought. 18The Amended Statement of Claim seeks a series of declarations. It is not usually good practice to make declarations rather than final executive orders though in some cases, and this litigation might be one, it may be appropriate and useful to make declarations if the evidence supports it. 19The principal orders and declarations sought by the plaintiffs are: 1. A declaration that Anthony was not, and Roslyn was, a director of the first three plaintiffs; 2. A declaration that the purported transfer of shares in O'Meley Partners Pty Ltd was invalid; 3. Rectification of the companies register accordingly; 4. Injunctions to prevent Anthony from asserting that he is a director of any of the first three plaintiffs or from passing off his business as being connected with the first plaintiff or from using the Arogen name; 5. Orders for remedy various alleged breaches of fiduciary duties owed by Anthony to the first three plaintiffs; 6. Orders against Ellie for as a volunteer accepting property which she knew was illegally obtained including her home unit at Woolloomooloo; 7. An order that there be a charge over the Woolloomooloo property for monies due by Anthony or Ellie to the first three plaintiffs; 8. An order that Anthony and Ellie give equitable compensation for their breaches of fiduciary duty; 9. An order that Anthony deliver up to the plaintiff's solicitors all books and records of the three companies in its possession, custody, or control. 20Although the ultimate issues were as I have listed, the ultimate issues really depend to a great extent on whether the beneficial ownership of shares in the various companies vested in Roslyn, as she and the other plaintiffs allege, or with Anthony as he alleges. Anthony alleges that at all material times the legal interest in the shares were vested in Roslyn on trust for him. By a late amendment to his cross-claim he alleged alternatively that the shares were held on trust by Roslyn for Anthony and Rodney equally. 21An obvious problem with Anthony's allegations are that if he had a beneficial interest in shares before he went bankrupt, those shares would have vested in his Trustee in Bankruptcy. The Trustee in Bankruptcy never dealt with any such shares in his administration of the bankrupt estates. Recently, he executed a document assigning his interest in the shares to Commercial Mortgage Trade Pty Ltd. That company was added as a third defendant to the proceedings (Anthony and Ellie are the first two). The third defendant has submitted. 22Anthony alleges that Commercial Mortgage Trade Pty Ltd purchased the interest from the Trustee in Bankruptcy as his agent. There is no evidence of this apart from the fact that Ellie in her affidavit sworn on the first day of the hearing, said that the property was acquired as Anthony's agent. I will come back to this. 23The key plank in Anthony's case is two alleged deeds, one bearing the date 12 July 2005 relating to O'Meley & Partners Pty Ltd and the other bearing date 16 June 2006 relating to O'Meley Investments Pty Ltd. The two documents are in almost identical terms. Essentially in them the fourth plaintiff, Roslyn, says that she holds the shares on trust for Anthony and will transfer them to him on demand. Roslyn strenuously denies signing either "Deed". 24The original of either "Deed" has never been produced. A photostat was tendered to show what was the document relied on and I admitted it but not as formal proof that the "Deed" was actually delivered. Accordingly in this judgment I have put the word "Deed" in inverted commas to show that it is alleged to be a deed: it was never formally proved as such. 25Ellie gave evidence that she found the photostat "Deeds" in a file marked "Anthony O'Meley personal" at about the time the litigation commenced. The file was not produced and as the documents had been removed from it, it is no longer possible to work out whether they were in the correct chronological order within that file. 26Courts are extremely suspicious when deeds or copy deeds are produced after a person has gone into or come out of bankruptcy. As my co-authors and I noted in "On Equity" (Young, Croft, Smith, On Equity (2009) Law Book Co. at [6.340]) a typical case of "sham trust" is "where the settlor fears bankruptcy and so executes a declaration of trust which they send to their accountant with a covering letter and which can be produced later if insolvency ensues, but otherwise can be disregarded. In such cases, there is no trust". We cited Midland Bank PLC v Wyatt [1995] 1 Fam LR 697 (Eng.), Hyhonie Holdings Pty Ltd v Leroy [2004] NSWCA 72, and the general discussion in Official Assignee in Bankruptcy v Wilson [2007] NZCA 122 at [26]-[58]. 27As Anthony bore the onus of proof on this particular issue it was important that he demonstrate the validity of the task that he said was contained in the "Deeds". Each "Deed" acknowledged that the shares were held in trust for Anthony and would convey them to him at his request. The evidence adduced in support of the "Deeds" was slim. Ellie says they were found, or copies were found, in Anthony's personal file. The "Deeds" were all the mark of having been prepared by someone with legal training. Mr Puxty the family's usual solicitor at Moray & Agnew in Newcastle denies preparing them. The originals have never been produced. Roslyn denies executing them. 28The "Deeds" are witnessed by David Paton. His evidence as to their execution was rather confused. In his affidavit of 12 February 2013 he says that he remembers that on or about 12 July 2005 he was asked by Anthony to witness a document, he remembers that Roslyn was present at Wyee. He returned the "Deed" of 12 July 2005 and confirms that his signature was there as a witness however he never read the document and had no specific memory. He gives similar evidence for the "Deed" of 16 June 2006, but he does not say where that was signed. He also says that he would never have witnessed a document purportedly signed by Roslyn unless he had seen Roslyn sign the document. 29In cross-examination (T163) Mr Paton says that he recalls that he was at Kurri Kurri although his evidence vacillated a little and he recalled going to Roslyn's house at Wyee to fix her computer. He said (T164): I remember a document, coming up to ask me, it could have been at the house or, I can't remember, at Wyee or Kurri either one. I think it was at Kurri in the office. They come up to the office so I could witness it. I wasn't there at the office just for the purpose of witnessing it and they asked me to witness a document. Q. You say it was at the Kurri office and not at Wyee. A. No it was at Kurri. Q. You are certain about that. It would be wrong to suggest it was at Wyee. A. I can't remember whether it was at Wyee, I was at both places quite often, one was quite near our home and one was at Kurri. 30Later on he was asked: Q. Do you say to his Honour you simply can't recall if it was at Wyee or Kurri. A. I can't remember no. 31He had very little recollection of the "Deed" of 2006 but again acknowledged his signature. 32Anthony gave evidence that the documents of June 2005 were signed at Wyee. He said (T148) that originally he thought that the "Deed" was signed at the "top house" (that is Anthony's house) at Wyee but, on further recollection "I recall going down to the bottom house at mum and dad's and Dave was there working on the computer he is a computer technician and that is when I recall signing it and I don't know what the date was sir it is hard to get us all together at the same time". He acknowledged he gave evidence before Registrar Gray that the document was signed at his house rather than his parent's house at Wyee. 33Samantha gave evidence that it was not uncommon practice for herself or others to sign Roslyn's name on formal documents. She also gave evidence that it was Mr Paton's habit to sign his name as the witness to documents in the office where the persons who had seemingly signed the document were not seen by him and indeed in some cases where a person other than Roslyn had signed. Mr Paton strenuously denied this. 34In my view I should not accept Mr Paton's evidence. His memory was poor, his evidence kept changing. Likewise, Anthony's version is very sketchy and has changed. Samantha on the other hand was a really impressive witness. She has no motive to be untruthful. Samantha was a long term life partner of Rodney, they had two children together. Their association ceased about the time of the bankruptcy and she has since remarried. There does not appear to be any motive for her to favour one side or the other, though her evidence did give the flavour of being very much aligned away from the case against Tony. 35However Samantha gave her evidence definitely and clearly. The evidence that she gave would see herself sign Roslyn's name from time to time was against her interest. Of course it must be said that there are in everyday office procedures a number of proper situations where employees sign their employer's name with full authority. Nonetheless it would not appear that Roslyn knew at the time that people were signing her name to documents, though Samantha says she told Roslyn later and Roslyn has never made any objection. 36Thus in my view Mr Paton's evidence does not establish the "Deeds". 37However there is a further problem for Anthony with respect to the "Deeds". In mid-2005, Roslyn was on an extended holiday. She kept a travel diary. This is in evidence as Exhibit PX13. The entry for Tuesday 12 July 2005 (day 48) reads so far as relevant: Left Lake Maraboon (Fairburn Dam) Emerald 9.30am. ... Stopped Emerald took photo BIG ETCH & went to RTA (boat licence). Left Emerald 12.00pm. Stopped Blackwater. ... Got to Yeppoon 4.00pm - Dolphin C Park ($16). 38No attack was made on the authenticity of the diary. Thus, on 12 July 2005, Roslyn was in Central Queensland: nowhere near Wyee. 39It was faintly suggested that from time to time Roslyn would come back to Wyee and then return to her holiday. There is no supportive note for that suggestion in the diary and it is to my mind quite fanciful. It is almost certain that Roslyn did not sign the "Deed" if she signed it at all on 12 July 2005. Of course it could have been signed at some other time but Anthony's case was that it was signed on 12 July 2005 and he gave evidence as I have said as to its signing at the bottom house at Wyee. 40Accordingly the evidence satisfies me that the "Deed" of July 2005 was not as it appears. 41There is some circumstantial corroborative evidence which leads to the same result. Ms Clark who was the chief financial officer of the plaintiff companies says that she constantly attended management meetings. At these meetings Anthony and Rodney both contributed and no decision was made unless it was unanimous. At no stage did Ms Clark ever hear Anthony say that the company was his and she was not cross-examined on this. It would seem odd that if Tony was the sole proprietor of the business because of the "Deeds" he would not have at some stage asserted his ownership at these meetings. 42Then there is the problem for Anthony that in the mid of the first decade of this century he was involved in both the bankruptcy and a divorce with his former wife, Liza. He made no mention of being a proprietor of shares in any Statement of Affairs in bankruptcy. Question 29 of the Statement of Affairs asked "Do you own, or are you entitled to any shares, options, rights, convertible notes or other securities?". Anthony has ticked the "no" box. 43Anthony completed the prescribed financial statement in connection with his divorce from Liza. He said he was employed by Arogen Pty Ltd. Question 41 asked whether he had any interests in a business. He answered "N/A". He made no reference to any shares and indeed the only assets he disclosed was his interest in his matrimonial home, contents, tools and a few odds and ends. 44As on two occasions Anthony was required to disclose his assets. He says he complied with the requirements, yet on neither occasion did he make any claim to own the business or the shares in the companies beneficially. 45Furthermore ASIC's records show that various holders of the shares always held them beneficially. There can be some doubt as to whether Michelle ever held the shares beneficially and Samantha acknowledges she was a mere nominee, but ASIC was never told that there was any other person holding a beneficial interest in the shares. 46Turning now to Anthony's evidence, he says in paragraph 65 of his affidavit: In or about January 2011 I had a conversation with my mother and my father as follows: Roslyn said: We had enough, we just want to be retired and travel in our motor home and not have to worry about any business things, can you take you (sic) mothers name off the businesses? I said: Of course I will, alright I will take the shares and everything back into my name no problems, can you just hold off a little longer until the bankruptcy is up and I can transfer everything over. Roslyn said: Ok. 47At paragraph 66, Anthony says: I recall another conversation with my father around this period as follows: Trevor said: Get your mother's name off that bloody director thing it's too much trouble and she worries too much, and she can't get the pension because her name is on the bloody thing. I said: I know. Look could you just hold out a little longer then I will be out of bankruptcy and I can take my position again. 48At paragraph 67, Anthony says: Conversations similar to this continued for the next nineteen months, until August 2012. 49Roslyn denies this conversation and cross-examination was sparse on it. 50However even if I accepted that some such conversation took place, there are a number of problems. If the conversation took place in January 2011 or thereabouts, the reference to bankruptcy is odd as Anthony came out of bankruptcy on 14 March 2009. 51Anthony sought to explain this by saying that he thought he only emerged from bankruptcy in the last twelve months, which I found very difficult to accept. 52Anthony suffers from dyslexia. Everyone agrees that this is so. However he is also a very successful businessman. It is hard to reconcile a leader of a business that is constantly putting out tenders and negotiating them and entering into complex commercial transactions that he is as debilitated from understanding documents as he claims. It is as I said hard to understand how he could say a conversation took place in 2011 well after he had emerged from bankruptcy. One would have thought that coming out of bankruptcy could be something that one would have very definite recollections when he was making conversations. 53However there are other oddities in this case. Why did Roslyn become a director in 2009 about the time the bankruptcies were over? Why in any event from the beginning were shares put in the names of Michelle and Samantha? Why was Samantha chosen because her surname was not O'Meley? All in all, one gets the flavour that there was always some worry that the business would fail and that the shares unless they were properly warehoused were likely to pass to strangers. 54However the mere fact, if it be the fact, that the shares were being warehoused does not put Anthony in the situation where he is the sole beneficial owner. The majority of the evidence is that the business was run by Anthony and Rodney equally. They made joint decisions. Anthony was in the office and negotiated the contracts. Rodney was in the field supervising the actual drilling. The name of the company reflects both the names of Anthony and Rodney. It would seem that there was some favour of it being a family business and there is as much to be said for the proposition that Roslyn the matriarch, who came across in evidence as a very acute person, would hold the shares and that she would in her will make sure that everything was done right as opposed to the other scenarios that Roslyn was the mere nominee for Anthony and Rodney or for Anthony alone. 55There is another odd bit of evidence in that Roslyn in her sixth affidavit (paragraph 22-24) says: In about 2009 Rodney, Tony and I had a conversation in the kitchen at the farm in Wyee in which words to the following effect were said: They said: We'd like to put ["Arogen" or "the companies"] (she couldn't remember which) in your name. I said: That's fine. ... The shares in Arogen then were put in the name of O'Meley Investments (the shares in which were held by me)." 56That piece of evidence has some flavour of the fourth plaintiff, Roslyn, being a nominee of Rodney and Anthony, but it does not seem to be strong enough to outweigh the other evidence in the case. 57Accordingly in my view the so called "Deeds" do not lead to me making a declaration that the shares in Roslyn's name are held on trust for Anthony. The evidence of the diary makes it almost certain that the first "Deed" was not created in July 2005. The circumstances of the production of the "Deed" are extremely suspicious and in my view Anthony has not proved that the shares are held on trust for him. 58That was the major matter of fact in the case but of course it was not actually the matter that went particularly to any of the orders that were sought by the parties. I will now turn to them. 59Of course it must be said that even if Anthony's proposition is correct, the result may not be that he is currently entitled to the shares. If he did in fact own the shares beneficially before his bankruptcy the shares would have passed to the Trustee in Bankruptcy. Despite the non-disclosure they would still be there. However, as I have mentioned earlier, the trustee has assigned any interest he may have had to Commercial Mortgage Trade Pty Ltd. 60The documents tend to suggest that Anthony was negotiating some deal with that company and that the company acquired the Trustee in Bankruptcy's interest in connection with that deal. The consideration for the assignment was said to be one dollar but there is no evidence that that was ever paid or received. 61There was some desultory discussion about the significance of this document. It is a little unclear whether what the Trustee in Bankruptcy had was some shares, some cause of action, or, alternatively, some property in equity. There was a little confusion as to whether there had been compliance with section 12 of the Conveyancing Act 1919 if it were relevant as to whether notice had been given to the relevant person. Further, there was some question as to whether the assignment had any validity in view of the fact that there was no evidence that the one dollar had been paid. Neither sets of counsel were really prepared to argue these questions and they were left up in the air. 62I do not feel inclined to make a decision on them in the absence of informed submissions. If the assignment is of any validity, then the third defendant company has the property, whatever that property is, not Anthony. Anthony seeks to overcome this by saying as per Ellie's affidavit that the company was acting as his agent. It is not really useful to say that X is acting as Y's agent. One has got to consider what was the ambit of the agency and also deal with the situation that sometimes agents act in their own interests, sometimes only in the principal's interest. The flavour from the fact that the assignment was taken in connection with some business deal would tend to suggest that any assignment was taken by the agent for its own purposes. 63When the facts of a matter are within a party's knowledge and the court is given a mere outline, the inference can be drawn that the full facts would not assist. Even if one treated it as evidence and gave weight to Ellie's statement in her affidavit that the third defendant was acting as agent, there would still be such a paucity of factual material on this issue, which Anthony may think was vital that the court could or should not find that matter favourably to Anthony. 64 Accordingly, it does not seem to me that this material is sufficient to show that the business revested in Anthony. 65It was put by Anthony that it was significant that Roslyn had very little to do with the management of the companies. I was asked to infer that such lack of involvement showed that she could not be more than a mere nominee in the case of ownership of the shares. 66It is true that this does tend to show what is claimed by Anthony but it is also true that one must always distinguish between management of the company and directorships. The mere fact that the day to day management of the company was in the hands of Anthony and Rodney who each received a salary for being managers does not negate the possibility or probability that the directorship and the policymaking abilities were vested in another person. 67Turning now to the particular remedies that are being sought, the first is, a declaration that Anthony is not, but Roslyn is, a director of the first three plaintiffs. This is allied with the second, namely a declaration that the supported transfer of the beneficial interest in the shares in O'Meley Partners Pty Ltd is invalid. 68Although I have rejected Anthony's case based on the "Deeds" it does not necessarily follow that these questions must be answered in Roslyn's favour. 69Anthony's case is, in part, based on the share transfer of August 2012. 70In her seventh affidavit paragraph 3, Roslyn annexes a document "Standard Share Transfer Share" bearing date 5 August 2012. This purports to be a transfer of 10 shares in O'Meley Investments Pty Ltd from Roslyn to Anthony for consideration of $10. Roslyn says she never signed that share transfer and never saw it until it was produced to the court on 28 June 2013. She says that she was in Queensland leaving in May 2012 and returning on 2 November 2012 and produced photostat diary entries from her travel diary to authenticate that statement. 71Lodged with ASIC with the notification of that transfer was a notice that Roslyn had ceased to be the sole director of Arogen as at 7 August 2012 and Anthony's appointment as sole director on the same date. 72Roslyn says at no time prior to the filing of this form did Anthony discuss or notify her of this action, she did not resign as a director and was not notified of any meeting of the directors or shareholders of Arogen to remove her. 73Oddly Anthony does not in his affidavit make any specific mention of the circumstances in which the share transfer and other documents sent to ASIC were brought about, he just contents himself with denying what Roslyn says. Likewise and presumably because there was so little evidence given as to the circumstances there was no meaningful cross-examination on the matter. 74Roslyn expanded her evidence in her sixth affidavit. She then gives evidence of various forms lodged by Anthony with ASIC inter alia claiming that when O'Meley Investments Pty Ltd was said to hold all its shares in Arogen beneficially that was an error and various forms were purporting to remove her as a director and appointing Anthony as a director in her stead. Roslyn says that at no time did she participate in any of these documents. I accept that that is so. 75At least in the de facto sense, the companies were run by Anthony from August 2012 until January 2013. However, during the latter part of 2012, they suffered from a considerable drain to satisfy Anthony's personal demands. Roslyn complains in her first affidavit of considerable expenditure by Anthony in sending himself and his family to Los Angeles to watch his son, Troy, compete in World Series Boxing and the purchase of various new cars and a family holiday in Perth. 76Certainly matters came to a head in January 2013 when Roslyn resumed active control of the companies. On that day Anthony formed four new companies, namely, O'Meley & Sons Pty Ltd, O'Meley Projects Pty Ltd, O'Meley Property Pty Ltd, O'Meley Investment Company Pty Ltd. Two days later he formed four more, Arogen International Pty Ltd, Arogen IV Pty Ltd, Arogen Resources Pty Ltd, and Arogen Holdings Pty Ltd. The plaintiffs fear that the latter four companies were formed in order to abstract the goodwill of the Arogen name into Tony's hands. None of these companies have any assets except Arogen Resources which holds nine motor vehicles. 77Furthermore, about this time, Anthony and Ellie cleared out virtually all the funds from the companies' bank accounts and transferred those funds to accounts in Ellie's name. 78In these circumstances including bearing in mind the forging of Roslyn's name on the "Deeds" and the fact that Roslyn was not in New South Wales at the time of the signature of the alleged documents, I would not be satisfied that they are genuine. 79Accordingly in my view the plaintiffs are entitled to a declaration that Anthony is not, but Roslyn is, a director of the first three plaintiffs and the purported transfer of shares of O'Meley Partners Pty Ltd was invalid and also entitled to rectification of the companies' register accordingly. 80The fourth order sought is an injunction to prevent Anthony from asserting that he is a director of the plaintiffs. The evidence shows that he is not for the reasons I have given and there is also material to show even after these proceedings were commenced that Anthony, or alternatively solicitors instructed by him, have asserted his directorship. There is a sufficient threat there to warrant the grant of such an injunction. 81The fifth order sought is the plaintiff seeks orders to remedy various alleged breaches of fiduciary duties owed to the first three plaintiffs. 82It is clear that in January 2013, Anthony and Ellie virtually cleaned out all the assets and liquid reserves of the plaintiffs and the cash went into Ellie's bank account. Of the cash $140,000 was used as a deposit on the Woolloomooloo home unit in which Anthony and Ellie now reside. 83The plaintiffs were asked by me, whether they wanted an account or some other remedy. The authorities show that when one asks for an account there can only be one account and the court cannot order that accounts be taken piecemeal. After consideration Mr Condon SC elected to take equitable compensation. 84There does not seem to be any real dispute as to the breaches for which compensation must be paid, these are: (a) the withdrawal of $140,000 on 18 November 2012; (b) the withdrawal of $199,665.82 on 11 January 2013; (c) a further withdrawal on the same day for $72, 231.80; (d) a further withdrawal on the same day of $13, 772.88; (e) a further withdrawal on the same day of $6,853. 23; (f) monies used to buy vehicles $81,738.00; (g) wages $54,009.60. 85The above items total $568,271.33. Anthony is liable for these sums. Ellie is liable for $432,523.73 being the total except the last two items. Ellie's liability is because she is clearly a person who had knowledge of the affairs of the companies when she received the money and put it in her own bank account. She is liable as a volunteer who knowingly accepts the fruit of Anthony's breaches. 86Ellie is the registered proprietor of the home unit at Woolloomooloo. She purchased it with $140,000 extracted from the business and the balance on mortgage. The plaintiffs claim that there be a charge over the unit for $140,000. It seems to me that this is quite appropriate as the monies were wrongfully extracted from the company and can be traced into the Woolloomooloo unit. As it would appear that Anthony and Ellie are unable to pay the mortgage the point may be academic as the first mortgagee may wish to take action. However, the plaintiffs are entitled to the charge. 87In personam orders are sought against Anthony in respect of the four companies he formed in January 2013 using the name Arogen. The plaintiffs say that the whole of the evidence shows that these companies were formed with the clear intention of passing off Anthony's companies as companies associated with the first plaintiff. Little evidence was given as to why they were formed. The only inference I can draw from all the circumstances is that Anthony was protecting himself against losing "his" business to the plaintiffs in this litigation and putting himself in a position where the new companies could just carry on. In my view it is appropriate to order that Anthony proceed to wind up each of these four companies within 90 days. 88Paragraph 16 of the prayers for relief in the Statement of Claim, list a series of documents which the plaintiffs seek an order that they be delivered to them. This I think follows as night follows day from the orders that I've already made and an order should be made that Anthony deliver up to the plaintiffs' solicitors on behalf of the first, second and third plaintiffs all books and records of them in his possession, custody or control, including those specified in paragraph (a)-(p) in paragraph 16 of the prayers to the Statement of Claim. 89The only other matter remaining is the cross-claim. The cross-claim was put on two bases (a) that the companies were beneficially owned by Anthony. That cross-claim must be dismissed for the reasons that have already appeared. However (b) as an after thought, a declaration was sought that the companies be held in equal partnership between Anthony and Rodney. 90Mr Condon SC strenuously opposed this claim on the basis that it was quite inconsistent with Anthony's main claim. The application to have this second claim was made after I had already read the evidence and it seemed to me that its likelihood of succeeding was so small that I should not waste time in dealing with technicalities to deal with it on the merits. 91Mr Levet made a series of submissions about there being a quasi partnership between Anthony and Rodney. Unfortunately this is really quite contrary to Anthony's main case. Right up to the last, Anthony has been saying that this has been his company and his company alone and indeed has sworn in his affidavit that Rodney was merely an employee. 92Although Anthony did not recognise it, Rodney in fact appears to have worked in the business just as many hours as Anthony. Rodney operated the fieldwork side of the business. That would seem to be of no less importance to the administrative side which Anthony controlled. 93However, there is no suggestion that Rodney was ever a co-owner of the business. The involvement of Rodney as the "R" in Arogen is equally consistent with him being (with Anthony) a manager or even a potential beneficiary of the family business, as it is with him being a part owner. 94Thus, putting to one side the issue as to whether Anthony is guilty of abuse of process by making this alternative claim, the claim fails on the evidence and on the merits 95It follows that the cross-claim must be dismissed with costs. 96Thus the plaintiffs are entitled to the relief they seek and their counsel should bring in Short Minutes of Order to set out in definitive form the orders that must be entered. 97I will conclude by remarking that at the end of the submissions it became quite clear that Anthony and Ellie realised that the verdict would probably go against them. Their reaction was to sack their barrister and solicitor (they had already sacked earlier lawyers and indeed had attempted to sack their present lawyers on a previous occasion) because it would appear the lawyers were not carrying out their instructions fully. Unfortunately those instructions would appear to be to run a case that could not be won. After lunch on the final day of the hearing, I received an email from Ellie which I understand was circulated through the Court and subsequently there was another email from Anthony complaining about injustice. I later received an apology. Although it is almost impossible to stop emails from litigants in person, they serve no useful purpose. They have been placed in the file, but have otherwise had no effect on this judgment whatsoever. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 December 2013