Australian Securities and Investments Commission v Rich

Supreme Court of NSW|2021-06-04|Before: Williams J

Salient facts: The Company

As I have already mentioned, Mr Stanton has been the sole director of the Company since its incorporation on 11 August 2014. Stanton (WA) Pty Ltd (Stanton WA) in its capacity as trustee of the Stanton Investment Trust has been the sole shareholder of the Company at all times. [2] The Stanton Investment Trust is a discretionary trust under which Mr Stanton and his children and grandchildren are beneficiaries. Mr Stanton is the sole director of Stanton WA.
The Company was incorporated for the purpose of investing in Shaw River Manganese Limited (Shaw River).
Shaw River was listed on the Australian Stock Exchange at all relevant times.
Through a number of foreign subsidiaries, Shaw River conducted manganese exploration, production and development at its open cut mine in Namibia known as the Otjozondu Project.
In about August 2014, the Company acquired a 9.69% shareholding in Shaw River together with an option to acquire a further 43.76% shareholding. The Company exercised that option in about February 2015, increasing its total shareholding in Shaw River to 53.45%.
At about the same time as it acquired its initial 9.69% stake in Shaw River in August 2014, the Company provided an AUD$8,000,000 loan facility to Shaw River as working capital for the Otjozondu Project. Through various inter-related agreements, the Company had security for this facility over the assets of Shaw River and its subsidiaries, including over the Otjozondu Project.
Trading on the Australian Stock Exchange saw Shaw River's share price fluctuate between $0.01 and $0.04 during the period from August 2014 to December 2015, although it mainly hovered between $0.01 and $0.02. The frequency and volume of trading in the stock declined noticeably from about mid-2015. As counsel for the plaintiffs submitted, shares in Shaw River were so thinly traded that it would have been difficult for the Company to liquidate its 53.45% shareholding even before Shaw River shares were suspended from trading on 31 December 2015 and it went into voluntary administration on 22 January 2016. Shaw River's announcement of the administration attributed its problems to a fall in manganese ore prices of more than 50% during 2015, the exhaustion of its line of credit with its major shareholder, inadequate support from other shareholders to fund its continuing operations and its inability to raise finance from other sources even on a short-term basis.
Mr Stanton caused Qube to be incorporated in Namibia on about 9 September 2014. The Liquidator's investigations have ascertained that Qube was incorporated for the purpose of operating a logistics business transporting ore for the Otjozondu Project. The Company's payments to Qube that it seeks to recover in these proceedings commenced on 7 November 2014. Those payments continued after Shaw River went into voluntary administration until 30 May 2016. The evidence concerning those payments totalling AUD$1,547,158.39 is addressed later in these reasons. The Liquidator has not identified any evidence of Qube having provided any services to the Company.
The Company was appointed as trustee of the Bryve Unit Trust on 17 February 2015. The Liquidator's review of the available books and records indicates that the Company carried out all of its activities in its own right and not as trustee of that trust. The Liquidator's investigations have not identified any assets held by the Company as trustee of the Bryve Unit Trust.
Section 286 of the Corporations Act requires a company to keep written financial records that correctly record and explain its transactions, financial position and performance, and that would enable true and fair financial statements to be prepared and audited. The records must be retained for seven years after the transactions covered by the records have been completed. The records that are required to be kept and maintained are not limited to the financial statements that were prepared from the records but include the underlying records from which the financial statements were prepared: Re Substance Technologies Pty Ltd [2019] NSWSC 612 at [36].
The Liquidator has expressed the opinion that the financial records kept by the Company were inadequate for the purpose of s 286 of the Corporations Act. In particular, despite extensive and repeated efforts to obtain books and records from Mr Stanton and the Company's accountants and solicitors, the Liquidator has not received nor has been able to locate or access the following records: 1. finalised financial statements for the year ended 30 June 2015; 2. finalised financial statements for the year ended 30 June 2016; 3. any financial statements or accounts (including general ledger accounts and depreciation schedules) for the period from 1 July 2016 onwards; 4. cash records (with the exception of bank statements); 5. documents recording the terms of loans made by Mr Stanton and other creditors to the Company; and 6. documents recording the terms on which the Company made the Qube Payments.
Based on his experience, the Liquidator would expect the records referred to above to be maintained by an investment company with investments of a similar kind and size as the Company.
The Company did maintain accounts, including a general ledger, for the 2015 financial year. However, those accounts appear to have been generated by Xero accounting software and the Liquidator has not been provided with access to the Company's accounting software. The Liquidator made inquiries with Xero and was informed that it did not have a record of an account in the name of the Company. As I have already mentioned, the financial statements for the 2015 year were in draft form only.
The Liquidator was informed that the Company's accountant prepared its draft financial statements for the 2016 financial year using HandiLedger accounting software. The Liquidator has not been provided with access to that software or data maintained by that software.
The Liquidator has identified discrepancies between the amounts recorded in the Company's 2015 draft balance sheet and 2016 draft balance sheet as owing by Shaw River to the Company as at 30 June 2015 or 1 July 2016, and discrepancies between both of those amounts and the amounts recorded as owing to the Company in Shaw River's published audited financial statements. The Liquidator has been unable to explain or resolve these discrepancies based on the Company's limited financial records provided to him.
Despite numerous requests, Mr Stanton failed to provide a report as to affairs in respect of the Company as required by ss 438 and 475 of the Corporations Act.
On the basis of the evidence referred to at [24]-[29] above, I find that the Company did not keep the books and records required by s 286 of the Corporations Act during the whole of the period after its incorporation on 11 August 2014.
The limited financial records available to the Liquidator reveal that the Company operated at a net loss during the 2015 and 2016 financial years and had a negative net asset position.
At the time the Company went into liquidation on 28 April 2017, its main assets were its shareholding in Shaw River, the debt owed to the Company by Shaw River and the debt owed to the Company by Qube.
The Company had security for its loan to Shaw River. Whilst there is no direct evidence of the value of the secured assets, there is evidence that the Company will not recover the whole of the amount owed by Shaw River. The Company lodged a proof of debt in the administration of Shaw River for AUD$8,000,000 in February 2016. The Liquidator has given evidence that Shaw River entered into a Deed of Company Arrangement in March 2018, pursuant to which a sum of AUD$319,770 has been paid to the Company to date. The Liquidator has also given evidence that Shaw River entered into an agreement with a third party on 12 November 2018 for a deferred sale of shares in what appears to be a related entity of Shaw River that has an indirect interest in the Otjozondu Project. The Liquidator's evidence is that the Company is entitled to payments of up to AUD$4,650,000 under that agreement and has received AUD$574,674.47 to date. The Liquidator has deposed that there is no guarantee that the entire sum of AUD$4,650,000 will in fact be paid to the Company and there are real risks that it will not be paid having regard to defaults in making payments to the Company to date and performance issues with the mine.
According to the Company's draft 2016 financial statements, it had total liabilities of AUD$6,805,055 as at 30 June 2016 under various unsecured loans, principally from Mr Stanton (AUD$4,888,305) and the Stanton Investment Trust (AUD$1,420,750). It will be recalled that Stanton WA is the trustee of the Stanton Investment Trust. Stanton WA was wound up by order of this Court on 8 June 2016. Mr Andrew Barndon was appointed as liquidator and was subsequently also appointed as receiver of the property of the Stanton Investment Trust. After the Company went into administration on 14 March 2017, Mr Barndon submitted a proof of debt for AUD$8,274,884 said to be owing by the Company to Stanton WA as trustee of the Stanton Investment Trust. In his report to creditors of the Company dated 18 April 2017, the Liquidator (in his capacity at that time as administrator) stated that he was awaiting supporting documentation for that claim.
The Liquidator estimated a deficiency of AUD$7,965,980 in the assets available to creditors in the winding up of the Company in that first report to creditors. That estimate assumed that the Company's shareholding in Shaw River had a nil value, that the Shaw River receivable had an estimated realisable value of AUD$4,000,000 and that the Qube receivable could be recovered in full at AUD$1,547,158. The estimate also assumed that the Company was liable to Mr Stanton and the Stanton Investment Trust in the amounts of AUD$4,880,000 and AUD$8,274,884 respectively.
The Liquidator remains of the view that there will be a substantial deficiency in the assets of the Company available to creditors, even in the unlikely event that the Company receives the full amount of AUD$4,650,000 under the arrangements referred to at [33] above. In the Liquidator's opinion, creditors of the Company are unlikely to receive less than 100 cents in the dollar in any future distribution.

Salient facts: Qube payments

In the period from 7 November 2014 to 30 May 2016, the Company made 26 payments to Qube, or to third parties, totalling AUD$1,547,158.39. Appendix 1 to these reasons sets out the date and amount of each payment. The Liquidator's staff have reconciled each of the payments against the Company's bank statements, save for five payments that were made by Stanton WA directly to Qube but were accounted for as loans by the Company to Qube as referred to in more detail below. Each of the payments in Appendix 1 is recorded in the Company's general ledger for the 2015 and 2016 financial years under an account labelled "Loan - Qube Logistics (Pty) Ltd". The Company's draft financial statements for the 2016 financial year records a receivable owing by Qube in the amount of AUD$1,093,882 as at 30 June 2015 and AUD$1,547,158 as at 30 June 2016.
The five payments identified in Appendix 1 has having been made by the Stanton Investment Trust directly to Qube in December 2014 and January 2015: 1. were recorded as payments to the Company (not payments to Qube) in the general ledger of Stanton WA as trustee for the Stanton Investment Trust; 2. were recorded in the general ledger of the Company as a loan made by the Company to Qube, as referred to above; and 3. appear to have been included in the balance of the loan owing by Qube to the Company in Qube's signed and audited financial statements for the 2015 financial year referred to at [44] below (allowing for minor discrepancies likely attributable to the conversion of amounts from Australian dollars in the accounts of the Stanton Investment Trust and the Company and Namibian dollars in the accounts of Qube).
The Liquidator's investigations have identified that the payments made to third parties were payments for plant and equipment supplied by those third parties to Qube. That is consistent with the descriptions of the individual payments in the "Loan - Qube Logistics (Pty) Ltd" account in the Company's general ledger. I accept the plaintiffs' submission that such payments are to be treated as payments by the Company to reduce or discharge Qube's liability to the third parties in connection with the supply of the relevant plant and equipment to Qube. That is consistent with the payments being accounted for as a loan to Qube in the Company's general ledger and balance sheet.
The treatment of the Qube payments in the Company's general ledger and balance sheet as a loan by the Company to Qube is consistent with the fact that the Liquidator has not identified any evidence of Qube having provided services to the Company, as referred to earlier in these reasons.
Despite requests made by the Liquidator, Mr Stanton has not provided any details of the terms on which the funds were advanced to Qube, including any terms or proposals concerning repayment.
The Liquidator has not identified any security provided by Qube to the Company in respect of the loan or any of the individual advances included in the loan of AUD$1,547,158.39.
According to Qube's signed and audited financial statements for the year ended 30 June 2015, it traded at a loss of N$871,634 during that year (equivalent to approximately AUD$93,184, based on the Liquidator's evidence of the exchange rate published by the website http://www.xe.com (xe.com) of AUD$0.1069069264 per 1 Namibian dollar as at 30 June 2015). Qube does not appear to have earned any income in that year, with the exception of some interest income. Qube had total liabilities of N$10,250,641 (approximately AUD$1,095,864) and total assets of N$9,379,367 (approximately AUD$1,002,719). Those assets consisted principally of plant and equipment (N$7,613,356, or approximately AUD$813,920).
Qube's total liabilities recorded in its signed and audited 2015 financial statements include: 1. a loan of N$93,010 (approximately AUD$9,943) from Mr Stanton; and 2. a loan of N$10,132,631 (approximately AUD$1,083,248) from the Company. I note that this is similar to the amount of AUD$1,093,882 recorded in the Company's draft 2015 financial statements as a receivable owing by Qube as at 30 June 2015.
Qube's 2015 financial statements record that there are "no terms and conditions attached" to either of the above loans.
The plaintiffs have not been provided with or been able to obtain any signed and audited financial statements for Qube for subsequent years. However, the plaintiffs tendered Qube's management accounts for the year ended 30 June 2016. According to those management accounts, Qube's operating loss doubled from N$871,373 (approximately AUD$93,156) in the 2015 year to N$1,885,735 in the 2016 year (approximately AUD$171,458, based on the Liquidator's evidence of the exchange rate published by xe.com of AUD 0.0909239056 per 1 Namibian dollar as at 30 June 2016). Again, Qube does not appear to have earned any income other than interest income. Qube's liabilities exceeded its assets by N$2,827,884 (approximately AUD$257,122). Its assets consisted principally of plant and equipment together with receivables owing to Qube by Otjozondu Mining ZAR (Pty) Ltd and other related parties (not including the Company).
Qube's 2016 management accounts do not record any loan owing to the Company. In the 2015 column of the 2016 management accounts, the loan of N$93,010 from Mr Stanton and the loan of N$10,132,882 from the Company that were recorded in Qube's signed and audited 2015 financial statements have been re-classified as one loan from Mr Stanton. The amount of that loan in the 2016 column is recorded as N$14,655,843 (approximately AUD$1,332,566). The notes to the management accounts in relation to the loan state: "There are no terms and conditions attached. Proceeds received from shareholder came from Australia, from own accounts and also using account of Bryve Resources as conduit."
The change in the identity of the lender between Qube's 2015 signed and audited financial statements and its 2016 management accounts finds no support in the available financial records of the Company. The Company's draft financial statements for the 2016 year record its assets as including a receivable of AUD$1,547,158 owing by Qube. The Company's general ledger for the 2016 financial year records an opening balance of AUD$1,093,882 in Qube's loan account as at 1 July 2015 and further advances made by the Company to Qube totalling AUD$453,276 during the period from 1 July 2015 to 30 May 2016, resulting in a closing balance of AUD$1,547,158. The Company's general ledger includes an account labelled "Brent Stanton" which records significant amounts owing by the Company to Mr Stanton and payments made by the Company from time to time reducing that indebtedness. However, there is no correlation between those payments by the Company recorded in the "Brent Stanton" account and the Company's payments recorded in the general ledger account in respect of Qube. That is to say, monies advanced by the Company to Qube were not treated as having been paid on behalf of Mr Stanton and reducing the Company's indebtedness to Mr Stanton. The Liquidator has not seen any record or document indicating that the Company assigned to Mr Stanton the receivable owing by Qube.
Mr Stanton has failed to provide the Liquidator with any substantive information concerning the status of the Qube receivable and the extent to which it may be recoverable. There has been no response to the Liquidator's demand, issued on 4 March 2020 to Mr Stanton in his capacity as sole director of Qube, for Qube to repay the sum of AUD$1,547,158 owing to the Company. However, the Company's bank account statements tendered by the plaintiffs in these proceedings record that Qube made a payment of AUD$9,976 to the Company on 26 October 2016 and a further payment of AUD$22,358.87 on 28 December 2016. In the absence of any evidence adduced by the plaintiffs explaining these payments and in the absence of any evidence of any contract or dealing between Qube and the Company other than the loan, I infer those payments totalling AUD$32,334.87 reduced the total amount owing by Qube to the Company under the loan to AUD$1,514,823.52.
Based on the limited information available to him, the Liquidator endeavoured to assess the value of the Qube receivable by reference to Qube's capacity to repay the debt based on its net asset position as at 30 June 2015 (as recorded in the signed and audited financial statements referred to above), 30 June 2016 (based on the management accounts referred to above) and 30 June 2017 (based on Qube's management accounts for that year). The Liquidator lacked sufficient information about Qube's assets (principally plant and equipment and the receivable owing by Otjozondu Mining ZAR (Pty) Ltd to estimate the realisable value of those assets. Even assuming the assets to have a realisable value equivalent to their recorded value in Qube's accounts, the value of those assets as at 30 June 2015 would be insufficient to cover the repayment of the AUD$1,093,882.03 that had been advanced by the Company as at 30 June 2015 and the value of the assets as at 30 June 2016 and 30 June 2017 would be insufficient to cover the repayment of the AUD$1,547,158.39 that had been advanced by the Company by 30 May 2016 (noting that this had been reduced to AUD$1,514,823.52 by 28 December 2016 as referred to above).
During the period in which the Company made the advances to Qube totalling AUD$1,547,158.39, the Company's draft financial statements for the 2015 and 2016 financial years show that the Company had: 1. in the 2015 financial year, income of AUD$71,849 (being rebates and funds), an operating loss of AUD$81,519 and net liabilities of AUD$81,419; and 2. in the 2016 financial year, no income, an operating loss of AUD$762 and net liabilities of AUD$82,181.
The net liabilities in each of those years were calculated on the basis that: 1. the Company's assets included receivables to the value of the total amount lent by the Company to Qube (AUD$1,093,882 as at 30 June 2015 and AUD$1,547,158 as at 30 June 2016), notwithstanding the lack of security for those advances and Qube's financial position referred to above; and 2. the Company's assets included shares in other companies to the value of AUD$1,689,829 as at 30 June 2015 and as at 30 June 2016. That is to say, the draft financial statements did not write down the value of the Company's shareholding in Shaw River even after its shares were suspended from trading on 31 December 2015 and even after it went into administration on 22 January 2016 in the circumstances referred to at [20] above.
Section 1305 of the Corporations Act provides: "(1) A book kept by a body corporate under a requirement of this Act is admissible in evidence in any proceeding and is prima facie evidence of any matter stated or recorded in the book. (2) A document purporting to be a book kept by a body corporate is, unless the contrary is proved, taken to be a book kept as mentioned in subsection (1)."
There is evidence that the Company's general ledgers for the 2015 and 2016 financial years were maintained using accounting software. I infer from the correlation between the general ledger entries relating to the Qube payments and the Company's bank statements that the entries recorded in those general ledger accounts were made in a systemic manner. I infer from the correlation between the total entries in those general ledger accounts for the 2015 and 2016 financial years and the amount of Qube receivable as at 30 June 2015 and 30 June 2016 recorded the Company's draft 2016 financial statements that the information in the financial statements was extracted from the general ledger. That is consistent with information provided to the Liquidator as referred to at [26]-[27] above. I accept the plaintiffs' submission that the Company's general ledger and draft financial statements for the 2016 financial year are books kept by the Company under a requirement of the Corporations Act within the meaning of s 1305, notwithstanding my finding that they were not sufficient to satisfy the requirements of s 286 of the Corporations Act: Australian Securities and Investments Commission v Rich (2005) 216 ALR 320; (2005) 191 FLR 385; (2005) 53 ACSR 752; (2005) 23 ACLC 838; [2005] NSWSC 417 at [238]-[265].
Thus, the Company's 2015 general ledger account labelled "Loan - Qube Logistics (Pty) Ltd", its 2016 general ledger account labelled "Qube Logistics (Pty) Ltd" (into which the closing balance of the 2015 "Loan - Qube Logistics (Pty) Ltd" account was transferred at the commencement of the 2016 financial year) and its draft financial statements for the 2016 financial year are prima facie evidence of the matters recorded in them: Livingspring Pty Ltd v Kliger Partners (2008) 20 VR 377; [2008] VSCA 93 at [37]; Australian Securities and Investments Commission v Rich (2009) 75 ACSR 1; [2009] NSWSC 1229 at [396]-[398].
That prima facie evidence is corroborated by the reconciliation of the relevant entries in the Company's general ledgers with the Company's bank statements, save for the five payments made by the Stanton Investment Trust directly to Qube in respect of which the general ledger of Stanton (WA) corroborates the Company's accounting for those payments as loans made by the Company to Qube (funded by payments from Stanton (WA) to the Company).
Further corroborating evidence is provided by Qube's signed and audited financial statements for the 2015 financial year. The contrary information in Qube's unsigned 2016 financial statements is insufficient to displace all of the other evidence referred to above in the absence of any evidence suggesting that Qube's signed and audited 2015 financial statements were incorrect and in circumstances where Mr Stanton, as sole director of the Company, did not cause the Company to account for the payments made to Qube in the 2016 financial year in a manner consistent with the notation in Qube's unsigned 2016 financial statements.
On the basis of the whole of the evidence referred to at [37]-[57] above, I find that the Company advanced a total amount of AUD$1,547,158.39 to Qube during the period from 7 November 2014 to 30 May 2016 without security. The terms of the loan or loans were not documented. There is no evidence that Qube was obliged to pay interest. In the absence of an express term requiring repayment on a specified date, the loan or loans were repayable on demand. Qube made two repayments in October and December 2016, reducing the amount owing under the loan to AUD$1,514,823.52. However, Qube failed to repay that balance, or indeed any amount, in response to the demand made on 4 March 2020. At the time that each advance was made, Qube's ability to repay the advance (together with the previous advances) was doubtful because it had been trading for a relatively short time and was operating at a loss and there is no evidence to suggest that its assets could readily have been realised (or could be realised even now) to repay the loan. The limited available evidence indicates that, even if those assets could have been or could now be realised, that would not raise sufficient funds to repay the loan.
On the basis of the evidence referred to at [14]-[22] and [37]-[52] above, I further find that the Company itself was in a precarious financial position during the whole of the period in which the advances to Qube were made. In particular: 1. the Company was generating no income, with the exception of some modest rebates and refunds in the 2015 financial year; 2. the Company's main assets (apart from the receivable created by the advances to Qube) were the receivable owing by Shaw River and the Company's shares in Shaw River; 3. whilst the Company had security for its Shaw River receivable, I infer from the evidence referred to at [33] above that the value of the charged assets was manifestly inadequate to secure the repayment of the amount owing to the Company; 4. the value of the Company's shares in Shaw River was questionable throughout the 2015 and 2016 financial years in circumstances where Shaw River was suffering from falling manganese ore prices during the 2015 year and went into voluntary administration on 22 January 2016 after being unable to raise further finance as referred to at [20] above; and 5. the Company had significant liabilities, including a debt of AUD$1,390,550 owing to Stanton WA as trustee of the Stanton Investment Trust as at 30 June 2015 which had increased by 30 June 2016 to AUD$1,420,750 (according to the Company's draft financial statements) or AUD$8,274,884 (according to the proof of debt lodged in the administration of the Company as referred to at [34] above). Stanton WA appears to have been wound up after it failed to pay a judgment entered against it in proceedings in this Court concerning a transaction that it had entered into as trustee of the Stanton Investment Trust. [3] From June 2016, any recovery action in respect of that debt was a matter for liquidator of Stanton WA.

Claim against Qube

On the basis of my findings set out at [58] above, the Company is entitled to recover the sum of AUD$1,514,823.52 as a debt due and payable by Qube and there will be judgment against Qube in favour of the Company in that amount.

Claim against Mr Stanton

The plaintiffs submitted that Mr Stanton breached his duties under ss 180(1) and 181(1) of the Corporations Act by causing or permitting the Company to make the advances to Qube.
Section 180(1) of the Corporations Act provides: "(1) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they: (a) were a director or officer of a corporation in the corporation's circumstances; and (b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer."
As the Court of Appeal emphasised in Boros v Pages Property Investments Pty Ltd (2021) 395 ALR 756; [2021] NSWCA 288 at [26]-[27] (Basten JA, Bell P and Meagher JA agreeing), context is important in analysing what is required by the duty of care and diligence under s 180(1) in the circumstances of each particular case. The duty may require steps to be taken to avoid harm, or affirmative steps to achieve a particular outcome.
Section 181(1) of the Corporations Act provides: "(1) A director or other officer of a corporation must exercise their powers and discharge their duties: (a) in good faith in the best interests of the corporation; and (b) for a proper purpose."
As Gleeson JA said in Re IW4U Pty Ltd (in liq) (2021) 150 ACSR 146; [2021] NSWSC 40 (IW4U) at [30]-[31]: "[30] Section 181(1)(a) and (b) are the statutory expression of two separate duties owed at general law. Putting to one side the debate as to whether these duties are objective or subjective, the standards imposed are those that "would be expected of a person in that position by reasonable persons with knowledge of the duties, power and authority of the position": Downer EDI Ltd v Gillies (2012) 92 ACSR 373; [2012] NSWCA 333 at [76] (Allsop P). In Chew v R (1991) 4 WAR 21 at 48; 5 ACSR 473 at 499, Malcolm CJ said that the duty of honesty or good faith has a number of aspects under the general law, being that directors (1) must exercise their powers in the interests of the company; (2) must avoid conflict between their personal interests and those of the company; (3) should not take advantage of their position to make secret profits; and (4) should not misappropriate the company's assets for themselves. [31] In the context of insolvency or near insolvency, which includes a real and not remote risk that creditors will be prejudiced by the dealing in question (Kalls Enterprises Pty Ltd (in liq) v Baloglow (2007) 63 ACSR 557; [2007] NSWCA 191 at [162]), the standard under s 181(1) entails an obligation on the directors to take into account the interests of creditors, which has been described by Gummow J, as an "imperfect obligation" because the creditors cannot enforce it "save to the extent that the company acts on its own motion or through a liquidator": Sycotex Pty Ltd v Baseler (1994) 51 FCR 425 at 445; 122 ALR 531 at 550; 13 ACSR 766 at 785; see also Spies v R (2000) 201 CLR 603; 173 ALR 529; 35 ACSR 500; [2000] HCA 43 at [94]; Termite Resources NL (in liq) v Meadows (2019) 370 ALR 191; 135 ACSR 45; [2019] FCA 354 at [197]-[209] (Termite Resources)."
Several authorities have addressed the question whether a director's conduct is to be assessed against s 181(1)(a) subjectively (so that the sub-section will be contravened if the director engaged deliberately in conduct that they knew was not in the company's best interests) or objectively (so that the sub-section will be contravened if the law objectively considers that the conduct was not in the company's best interests, even if the director subjectively believed they were acting in the company's best interests): IW4U at [32] and the authorities there referred to, including Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 at [420]-[421] and Hart Security Australia Pty Ltd v Boucousis (2016) 339 ALR 659; 117 ACSR 408; [2016] NSWCA 307 at [75]. The difference does not seem to me to be material in cases such as the present where the director has not adduced any evidence of any subjective belief that their conduct was in the best interests of the company.
The plaintiffs submitted that Mr Stanton breached ss 180(1) and 181(1) of the Corporations Act by causing or permitting the Company to make the Qube payments because: 1. there was little, if any, benefit to the Company from lending the money to Qube in circumstances where the loan was unsecured and there were no commercial terms recording how the Company stood to gain anything from advancing the funds; 2. there was a real risk that Qube could not repay the loans; and 3. the Company was in a poor financial position at the time the advances were made.
The plaintiffs' submissions did not address the whole of the context in which the Company advanced the funds to Qube. Mr Stanton's conduct in causing or permitting the Company to make the advances must be assessed having regard to the following circumstances that existed at the time of the advances: 1. the Company had been incorporated for the purpose of investing in Shaw River and was the majority shareholder in Shaw River by February 2015, as referred to at [15] and [18] above; 2. Qube had been incorporated for the purpose of transporting ore for the Otjozondu Project operated by Shaw River or its subsidiaries, as referred to at [17] and [21] above; 3. in circumstances where the Company began advancing the funds to Qube shortly after it was incorporated and some of the advances were described as being for the purpose of Qube acquiring plant and equipment, the natural inference is that the advances made by the Company funded or contributed to funding Qube's start-up costs and its operations for a period of time after it was incorporated; 4. Stanton WA in its capacity as trustee of the Stanton Investment Trust was the sole shareholder of the Company and a significant creditor of the Company at relevant times, as referred to at [14] and [34] above; 5. Mr Stanton was one of the beneficiaries of the Stanton Investment Trust and was himself a significant creditor of the Company at relevant times, as referred to at [14] and [34] above; and 6. Mr Stanton was also the sole director and sole shareholder of Qube, as referred to at [4] above.
Assuming that Qube did in fact provide logistics services for the Otjozondu Project, there is no evidence that the provision of those services by Qube (as opposed to some other logistics services provider) resulted in any benefit to Shaw River or its subsidiaries operating the Otjozondu Project (or, indirectly, to the Company as the majority shareholder in Shaw River).
Even assuming that the provision of logistics services by Qube (as opposed to some other service provider) conferred or was capable of conferring some benefit on the Company indirectly through its shareholding in Shaw River, there is no evidence to suggest that this benefit or potential benefit was such that a reasonable director of the Company in Mr Stanton's position would have caused the Company to lend money to Qube without security and without any entitlement to interest.
Mr Stanton has had ample opportunity to explain the rationale for the Qube loan to the Liquidator or in these proceedings and to identify any actual or perceived benefits of the kind referred to above. No such explanation has been forthcoming.
Hypothetical potential benefits aside, it was plainly not in the interests of the Company to make the advances to Qube whose ability to repay was doubtful as referred at [43]-[46] and [58] above. Without security or any entitlement to interest, the loans were all risk with no potential benefit for the Company and this would have been obvious to a reasonable director of the Company in Mr Stanton's position. The reasonable director would not have caused or permitted the Company to make the unsecured loans. At the very least, the reasonable director would have ensured that the loans were secured. If s 181(1)(a) is a subjective standard, the evidence does not reveal any reason why Mr Stanton might have held an honest belief that he was acting in the interests of the Company (as opposed to the interests of Qube, or his own interests as sole shareholder of Qube) in causing the Company to make the unsecured, interest-free advances.
The interests of the Company are not to be equated with the interests of Mr Stanton. Although Mr Stanton was a significant creditor of the Company, he was not its only creditor. By causing or permitting the Company to make the unsecured, interest-free loans to Qube at a time when the Company was in the financial position referred to at [59] above, Mr Stanton prejudiced the Company's ability to repay in full the amounts that it owed to him and to Stanton WA as trustee of the Stanton Investment Trust. Having regard to the Company's poor financial position, the duty of good faith required Mr Stanton to consider Stanton WA's interests as a creditor (as well as sole shareholder) of the Company. Mr Stanton's position as one of the beneficiaries under the Stanton Investment Trust did not entitle him to disregard the interests of Stanton WA as trustee of that trust or to treat its interests as if they were wholly aligned with his own. As a beneficiary of the discretionary trust, Mr Stanton was entitled to enforce due administration of the trust but had no proprietary interest in the assets of the trust, including its shares in the Company and the receivables owing to it by the Company: see Public Trustee v Smith [2008] NSWSC 397 at [107] and the authorities cited there; see also D Ong, Trusts Law in Australia (5th ed, 2018, The Federation Press) at 327-331. Stanton WA had its own creditors to contend with [4] , as Mr Stanton would have known in his position as the sole director of Stanton WA and from his involvement in events leading to and surrounding the winding up of Stanton WA. [5]
For those reasons, I accept the plaintiffs submissions that Mr Stanton breached his duties under ss 180(1) and 181(1) of the Corporations Act by causing or permitting the Company to make the unsecured, interest-free advances to Qube totalling AUD$1,547,158.39. As a result of those breaches, the Company has lost AUD$1,514,823.52 because Qube has failed to pay that outstanding balance in response to the Company's demand and even the book value of Qube's assets would be insufficient to repay that sum according to the Liquidator's evidence referred to at [50] above. Accordingly, there will be judgment against Mr Stanton in favour of the Company in the amount of AUD$1,514,823.52. As I mentioned earlier in these reasons, there will also be an order precluding the Company from recovering twice by enforcing the judgments against Qube and Mr Stanton in full.

Salient facts: Stanton payments

As referred at [34] above, Mr Stanton was a substantial creditor of the Company during the period in which the Stanton payments were made from 1 October 2015 to 28 February 2017. The Company's general ledger and draft financial statements record an amount of AUD$4,693,506 owing by the Company to Mr Stanton as at 30 June 2015, which had increased to AUD$4,888,305 by 30 June 2016. The Liquidator's investigations, including a search of the Personal Property Securities Register in relation to the Company, have not identified any evidence that the Company granted any security interest to Mr Stanton in respect of these loans.
Appendix 2 to these reasons is a list of the Stanton payments that the Liquidator seeks to recover as unreasonable director-related transactions. Items 52 and 53 in Appendix 2 are no longer pressed, reducing the total amount of the Liquidator's claim to $417,501.
The Liquidator tendered the Company's bank statements, which show that each amount listed in Appendix 2 to these reasons was debited to the Company's bank account on the date indicated in Appendix 2.
Items 1, 10, 14, 19, 23 and 29 in Appendix 2 are described in the Company's general ledger as payments to Mr Stanton. The Liquidator's review of trace reports has revealed that the payments were made to an account in the name of Stanton WA as trustee for the Stanton Investment Trust. However, each of the payments was described in the Company's bank statements as a payment or transfer to "B Stanton" and was recorded in the Company's general ledger in respect of Mr Stanton as reducing the amount owing by the Company to Mr Stanton. The payments do not appear in the Company's general ledger account for the loan from the Stanton Investment Trust to the Company.
Items 8 and 17 in Appendix 2 are described in the Company's general ledger as payments to Mr Stanton. The Liquidator's review of trace reports has revealed that the payments were made to an account in the name of Highrock Aust Pty Ltd (or its former name Hyrock Aust Pty Ltd) as trustee for the Brent Stanton Family Trust (Highrock). However, each of the payments was described in the Company's bank statements as a payment or transfer to "B Stanton" and was recorded in the Company's general ledger in respect of Mr Stanton as reducing the amount owing by the Company to Mr Stanton. The payments do not appear in the Company's general ledger account for the Brent Stanton Family Trust. Mr Stanton is the sole director of Highrock, which was wound up by order of the Federal Court of Australia on 19 April 2016 on the application of the Deputy Commissioner of Taxation. The Liquidator's review of the available records has not identified any evidence concerning the relationship between the Company and Highrock and has not revealed any information to suggest that it supplied goods or services or loaned money to the Company.
A trace report obtained by the Liquidator reveals that the $10,000 payment in item 2 of Appendix 2 was made by the Company to an account in Mr Stanton's name ending with the numbers 5050. The payment is recorded in the Company's general ledger in respect of Mr Stanton as reducing the amount owing by the Company to Mr Stanton.
A trace report obtained by the Liquidator reveals that the $3,000 payment in item 33 of Appendix 2 was made by the Company to an account in Mr Stanton's name ending with the numbers 5807. The payment is described in the Company's bank statements as "transfer b stanton" and is recorded in the Company's general ledger in respect of Mr Stanton as reducing the amount owing by the Company to Mr Stanton.
Trace reports obtained by the Liquidator reveal that the Company made the payments listed in items 3-7, 9, 12, 15-16, 18, 21-22, 24-27, 30, 32, 34-42 and 44-51 of Appendix 2 to a National Australia Bank credit card in Mr Stanton's name ending with the numbers 2498. Each of those payments up to and including the payment made on 31 May 2016 in item 47 of Appendix 2 is recorded in the Company's general ledger in respect of Mr Stanton as reducing the amount owing by the Company to Mr Stanton. The Liquidator has not been provided with any general ledger for the Company for the period after 30 June 2016 when the remaining payments in this category were made.
Trace reports obtained by the Liquidator reveal that the Company made the payments listed in items 55-66 in Appendix 2 to a National Australia Bank credit card in Mr Stanton's name ending with the numbers 3069. As all of these payments were made after 30 June 2016, there is no record of them in any general ledger or other accounts provided to the Liquidator.
Items 11, 20 and 31 in Appendix 2 are payments that trace reports show were made by the Company to a bank account ending in the numbers 0117. The transaction records in the Company's bank account describe the account ending in 0117 as an account of a Mr Peter Clark. The Company's general ledger records these payments in the account relating to Mr Stanton. The payments are described as "peter clark loan - private finance Iesmu". The amount of the payments is recorded as reducing the balance owing by the Company to Mr Stanton. The Liquidator has given evidence that his review of the Company's books and records available to him has not uncovered any further detail in relation to a loan from Mr Peter Clark and he has not identified any records suggesting that Mr Clark provided goods or services to the Company or that the Company was indebted to Mr Clark.
Trace reports obtained by the Liquidator reveal that the Company made the payments listed in items 13, 28 and 43 in Appendix 2 to an account in the name of RWR Real Estate ending in the numbers 2897. The payments are described on the Company's bank statements and in the account relating to Mr Stanton within the Company's general ledger as "rent s perth" or "rent south perth". The Liquidator has given evidence that Mr Stanton's address recorded with the Australian Securities and Investments Commission was an address in South Perth and that his review of the available books and records has not revealed any property in South Perth in which the Company had any interest.

Consideration and determination: Stanton payments

Section 588FDA(1) of the Corporations Act relevantly provides that a transaction of a company is an unreasonable director-related transaction of the company if: 1. it is a payment made by the company (s 588FDA(1)(a)(i)); and 2. the payment is made to a director of the company or to another person on behalf of or for the benefit of a director of the company (s 588FDA(1)(b)); and 3. it may be expected that a reasonable person in the company's circumstances would not have entered into the transaction, having regard to (s 588FDA(1)(c)): "(i) the benefits (if any) to the company of entering into the transaction; and (ii) the detriment to the company of entering into the transaction; and (iii) the respective benefits to other parties to the transaction of entering into it; and (iv) any other relevant matter."
Section 588FDA(2) makes it clear that the question posed by s 588FDA(1)(c) - whether it may be expected that a reasonable person in the company's circumstances would not have entered into the transaction - is to be addressed by reference to the circumstances at the time of the transaction. Where the transaction is entered into for the purpose of meeting an obligation of the company, the relevant time is the time of the transaction and not the time when the company incurred the obligation.
Section 588FDA(3) relevantly provides that a transaction may be an unreasonable director-related transaction whether or not a creditor of the company is a party to the transaction.
Pursuant to s 588FE(6A) of the Corporations Act, an unreasonable director-related transaction is voidable if it was entered into, or an act was done to give effect to the transaction, during the four years ending on the relation-back day or during the period between the relation-back day and date on which the winding up began. It is not necessary to establish that the company was insolvent at the time of the transaction or became insolvent as a result of the transaction.
Section 588FF relevantly provides that, where a court is satisfied that a transaction of the company is voidable because of s 588FE, the court may make an order directing a person to pay to the company an amount equal to some or all of the money that the company has paid under the transaction.
The relation-back day is 14 March 2017. All of the Stanton payments were made within the four year period prior to that day.
Section 588FDA(1)(a)(i) is satisfied by the Company's bank statements which establish that each of the Stanton payments were made by the Company.
Section 588FDA(1)(b)(i) is satisfied in respect of those payments that were made directly to Mr Stanton's accounts. [6]
I find that the remaining Stanton payments were made for the benefit of Mr Stanton within the meaning of s 588FDA(1)(b)(iii). I respectfully agree with and adopt the approach of Gleeson J in IW4U that a payment is made "for the benefit of" a director within the meaning of s 588FDA(1)(b)(iii) if the payment legally or financially advantages the director, regardless of whether it is paid or directed to a close associate of the director: (2021) 150 ACSR 146; [2021] NSWSC 40 at [83]-[86]. In the present case, the payments made to National Australia Bank [7] conferred a financial advantage on Mr Stanton by reducing his indebtedness to National Australia Bank in respect of his credit card accounts. The Company's general ledger entries recorded the payments made to Stanton WA, [8] Highrock, [9] Mr Clark [10] and RWR Real Estate [11] as reducing the Company's indebtedness to Mr Stanton. I infer from those general ledger entries that Mr Stanton required the Company to reduce its indebtedness to him by the amount of those payments and caused the Company to make the payments to those third parties rather than directly to himself in order to discharge or reduce some liability or obligation that he owed to the relevant third party or because the payment to that third party was otherwise financially advantageous to Mr Stanton. In the case of the payments to Stanton WA and Highrock, those inferences are strengthened because it is to be expected that the payments would have been recorded in the Company's general ledger accounts relating to Stanton WA and Highrock (rather than the general ledger account relating to Mr Stanton), if the payments had been made to discharge liabilities of the Company to Stanton WA or Highrock or to create some benefit or advantage for the Company (rather than Mr Stanton) vis-à-vis Stanton WA or Highrock.
Section 588FDA(1)(c) is concerned with the reasonableness of the company's conduct, objectively assessed by reference to all relevant circumstances of the Company: Crowe-Maxwell v Frost (2016) 91 NSWLR 414; [2016] NSWCA 46 (Crowe-Maxwell) at [70]-[71] (Beazley P, as Her Excellency then was, Macfarlan and Gleeson JJA agreeing). The following observations of McLure P in Weaver v Harburn (2014) 103 ACSR 416; [2014] WASCA 227 in relation to s 588FDA(1)(c) were cited with approval by the Court of Appeal in Crowe-Maxwell at [71]: "[91] The test of unreasonableness in s 588FDA of the Act is objective; it is what a reasonable person in the company's circumstances may be expected not to do. The 'company's circumstances' encompass all relevant matters, starting with its status as a company and what flows from that; its controllers, shareholders, business and other activities; and the facts and circumstances of, and surrounding, the transaction. [92] The matters in para (c)(i)-(iii) of s 588FDA(1) are mandatory relevant matters in the evaluative assessment of what is objectively unreasonable. The 'any other relevant matter' requirement in para (c)(iv) recognises that relevance depends on the facts and circumstances of the particular case."
Applying those principles to the present case, I find that it may be expected that a reasonable person in the Company's circumstances would not have made the Stanton payments, notwithstanding that the Company was indebted to Mr Stanton. [12] The payments benefitted the Company by reducing that indebtedness to some extent. Mr Stanton benefitted by receiving the payments (or receiving advantages derived from payments made to third parties for his benefit) in circumstances where the Company was making no repayments to its other significant creditor, had insufficient funds to pay all of its debts and is presumed to have been insolvent by reason of its failure to keep the books and records required by s 286 of the Corporations Act. [13] The detriment to the Company was that the Stanton payments left it without funds to pay towards reducing its liabilities to its other creditors, as demonstrated by the evidence referred to below.
The Company's general ledger for the 2016 financial year together with the Company's bank statements for the period up to 28 February 2017 show that, during the whole of the period in which the Company made the payments in Appendix 2 to Mr Stanton, it made no payments to its other significant creditor, Stanton WA as trustee of the Stanton Investment Trust.
The Company's bank statements for that period also show that almost all of the cash available to the Company during that period was applied to the payments in Appendix 2 made to or for the benefit of Mr Stanton and the loans to Qube that Mr Stanton caused the Company to make in breach of his duties as a director. The Company's bank account had a credit balance of AUD$1,900 as at 1 October 2015 and further amounts totalling AUD$898,740 were paid into the account in the period up to 28 February 2017. From the total cash of AUD$900,640 available to the Company during that period, AUD$453,276 was advanced to Qube and AUD$417,501 was paid to or for the benefit of Mr Stanton. These two categories of payments collectively accounted for approximately 96.7% of the Company's available cash of AUD$900,640.
The Company's only other material assets that were potentially available to pay its creditors during this period were its shares in Shaw River (which could not readily be realised on the market and were suspended from trading for most of the period in any event), [14] the receivable owing to the Company by Shaw River (which was not readily recoverable during the period due to Shaw River's financial difficulties and external administration and the inadequacy of the security held by the Company), [15] and the receivable owing to the Company by Qube (which was unsecured, and which Qube was unlikely to be able to repay in full on demand or at all given its operating losses and deficiency of assets, [16] which must have been known to the Company through Mr Stanton as the sole director of both the Company and Qube).
Thus, the Company left Stanton WA "hanging out to dry" [17] by using its available funds to make loans to Qube and to make the Stanton payment.
For those reasons, the Stanton payments were unreasonable director-related transactions within the meaning of s 588FDA of the Corporations Act and are voidable pursuant to s 588FE(6A). It is appropriate in all the circumstances to make the order sought by the Liquidator under s 588FF(1)(a) requiring Mr Stanton to pay to the Company an amount equal to the Stanton payments.

Conclusion and orders

The substantive judgments to be given and orders to be made have been referred to at [60], [74] and [101] above.
In respect of the judgments against Qube and Mr Stanton in relation to the Qube payments, the plaintiffs seek pre-judgment interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) only for the period since the commencement of the external administration of the Company on 14 March 2007 (as opposed to the dates on which the advances were made). In respect of the judgment against Mr Stanton in relation to the Stanton payments, the plaintiffs seek pre-judgment interest only for the period since the commencement of these proceedings on 13 March 2020. Orders to that effect will be made.
Costs should follow the event and there will be an order in the terms sought by the plaintiffs that the defendants, jointly and severally, pay their costs.
The judgment and orders of the Court are: 1. Judgment against the First Defendant in favour of the Second Plaintiff in the sum AUD$1,514,823.52 plus pre-judgment interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) for the period from 14 March 2017 to 23 May 2022. 2. Judgment against the Second Defendant in favour of the Second Plaintiff in the sum AUD$1,514,823.52 plus pre-judgment interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) for the period from 14 March 2017 to 23 May 2022. 3. Order that the Second Plaintiff cannot recover more than the total amount of AUD$1,514,823.52 plus pre-judgment interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) for the period from 14 March 2017 to 23 May 2022 with respect to the judgments entered in (1) and (2) above. 4. Order pursuant to s 588FF(1)(a) of the Corporations Act 2001 (Cth) that the First Defendant pay to the Second Plaintiff the sum of $417,501 plus pre-judgment interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) for the period from 13 March 2020 to 23 May 2022. 5. Order that the Defendants, jointly and severally, pay the plaintiffs' costs of these proceedings on the ordinary basis in such amount as may be agreed or assessed.

Appendix 1 - Qube Payments No. Date Amount Payer 1 7 November 2014 $131,873.93 Bryve 2 18 November 2014 $10,000.00 Bryve 3 18 November 2014 $38,243.93 Bryve 4 25 November 2014 $75,343.15 Bryve 5 9 December 2014 $80,000.00 Stanton Investment Trust 6 18 December 2014 $10,000.00 Stanton Investment Trust 7 22 December 2014 $150,000.00 Stanton Investment Trust 8 2 January 2015 $37,800.47 Stanton Investment Trust 9 12 January 2015 $200,000.00 Stanton Investment Trust 10 20 February 2015 $69,916.95 Bryve 11 29 April 2015 $50,000.00 Bryve 12 25 June 2015 $220,000.00 Bryve 13 29 June 2015 $20,703.93 Bryve Sub-total as at 30 June 2015 $1,093,882.36 14 6 July 2015 $100,000.00 Bryve 15 6 October 2015 $50,000.00 Bryve 16 8 October 2015 $29,304.03 Bryve 17 20 October 2015 $25,000.00 Bryve 18 12 November 2015 $25,000.00 Bryve 19 25 November 2015 $50,000.00 Bryve 20 20 January 2016 $1,000.00 Bryve 21 24 March 2016 $30,000.00 Bryve 22 4 April 2016 $2,972.00 Bryve 23 27 April 2016 $30,000.00 Bryve 24 13 May 2016 $50,000.00 Bryve 25 18 May 2016 $30,000.00 Bryve 26 30 May 2016 $30,000.00 Bryve Total as at 30 June 2016 $1,547,158.39

Appendix 2 - Stanton payments No. Date Amount Payer Payee 1 30 October 2015 $7,000.00 Bryve Stanton Investment Trust 2 4 November 2015 $10,000.00 Bryve Stanton account ending 5050; then Credit Account ending 2498 3 4 November 2015 $10,000.00 Bryve Credit Account ending 2498 4 6 November 2015 $5,000.00 Bryve Credit Account ending 2498 5 10 November 2015 $10,000.00 Bryve Credit Account ending 2498 6 17 November 2015 $10,000.00 Bryve Credit Account ending 2498 7 23 November 2015 $10,000.00 Bryve Credit Account ending 2498 8 27 November 2015 $200.00 Bryve Highrock Aust Pty Ltd atf Brent Stanton Family Trust 9 1 December 2015 $10,000.00 Bryve Credit Account ending 2498 10 1 December 2015 $10,000.00 Bryve Stanton Investment Trust 11 8 December 2015 $3,920.55 Bryve Peter Clark (treated as payment by direction of Stanton) 12 15 December 2015 $6,000.00 Bryve Credit Account ending 2498 13 18 December 2015 $5,000.00 Bryve RWR Real Estate (treated as payment by direction of Stanton) 14 21 December 2015 $5,000.00 Bryve Stanton Investment Trust 15 21 December 2015 $5,000.00 Bryve Credit Account ending 2498 16 23 December 2015 $5,000.00 Bryve Credit Account ending 2498 17 30 December 2015 $200.00 Bryve Highrock Aust Pty Ltd aft Brent Stanton Family Trust 18 30 December 2015 $5,000.00 Bryve Credit Account ending 2498 19 30 December 2015 $10,000.00 Bryve Stanton Investment Trust 20 4 January 2016 $3,920.55 Bryve Peter Clark (treated as payment by direction of Stanton) 21 13 January 2016 $15,000.00 Bryve Credit Account ending 2498 22 19 January 2016 $10,000.00 Bryve Credit Account ending 2498 23 5 February 2016 $3,000.00 Bryve Stanton Investment Trust 24 5 February 2016 $5,000.00 Bryve Credit Account ending 2498 25 9 February 2016 $6,000.00 Bryve Credit Account ending 2498 26 11 February 2016 $5,000.00 Bryve Credit Account ending 2498 27 23 February 2016 $5,000.00 Bryve Credit Account ending 2498 28 23 February 2016 $5,000.00 Bryve RWR Real Estate Rent South Perth (treated as payment by direction of Stanton) 29 26 February 2016 $2,000.00 Bryve Stanton Investment Trust 30 26 February 2016 $10,000.00 Bryve Credit Account ending 2498 31 29 February 2016 $8,160.00 Bryve Unknown (treated as payment by direction of Stanton) 32 1 March 2016 $5,000.00 Bryve Credit Account ending 2498 33 2 March 2016 $3,000.00 Bryve Unknown (treated as payment by direction of Stanton) 34 7 March 2016 $7,000.00 Bryve Credit Account ending 2498 35 17 March 2016 $9,000.00 Bryve Credit Account ending 2498 36 22 March 2016 $15,000.00 Bryve Credit Account ending 2498 37 4 April 2016 $20,000.00 Bryve Credit Account ending 2498 38 7 April 2016 $7,000.00 Bryve Credit Account ending 2498 39 12 April 2016 $10,000.00 Bryve Credit Account ending 2498 40 29 April 2016 $10,000.00 Bryve Credit Account ending 2498 41 3 May 2016 $5,000.00 Bryve Credit Account ending 2498 42 9 May 2016 $5,000.00 Bryve Credit Account ending 2498 43 11 May 2016 $5,300.00 Bryve RWR Real Estate South Perth (treated as payment by direction of Stanton) 44 11 May 2016 $10,000.00 Bryve Credit Account ending 2498 45 17 May 2016 $8,000.00 Bryve Credit Account ending 2498 46 24 May 2016 $6,000.00 Bryve Credit Account ending 2498 47 31 May 2016 $8,000.00 Bryve Credit Account ending 2498 48 15 August 2016 $5,000.00 Bryve Credit Account ending 2498 49 30 August 2016 $2,000.00 Bryve Credit Account ending 2498 50 6 September 2016 $2,500.00 Bryve Credit Account ending 2498 51 13 October 2016 $400.00 Bryve Credit Account ending 2498 52 28 October 2016 $3,000.00 Bryve Karen du Preez (treated as payment by direction of Stanton or otherwise a breach of duty by him to have caused this payment) 53 11 November 2016 $1,000.00 Bryve Karen de Preez (treated as payment by direction of Stanton or otherwise a breach of duty by him to have caused this payment) 54 11 November 2016 $6,000.00 Bryve Credit Account ending 3069 55 17 November 2016 $5,000.00 Bryve Credit Account ending 3069 56 18 November 2016 $10,000.00 Bryve Credit Account ending 3069 57 21 November 2016 $7,000.00 Bryve Credit Account ending 3069 58 5 December 2016 $6,000 Bryve Credit Account ending 3069 59 21 December 2016 $8,000 Bryve Credit Account ending 3069 60 29 December 2016 $5,000 Bryve Credit Account ending 3069 61 9 January 2017 $10,000 Bryve Credit Account ending 3069 62 10 January 2017 $5,000 Bryve Credit Account ending 3069 63 8 February 2017 $500 Bryve Credit Account ending 3069 64 8 February 2017 $4,000 Bryve Credit Account ending 3069 65 17 February 2017 $400 Bryve Credit Account ending 3069 66 28 February 2017 $2,000 Bryve Credit Account ending 3069

Endnotes

Excluding paragraphs 45 and 87, which were not read.
Purported issues of shares to other persons and entities were held to be void in other proceedings in this Court in March 2017: Stanton (WA) Pty Ltd (in liq) v Vasquez Investments Pty Ltd (No. 2) [2017] NSWSC 256.
Stanton (WA) Pty Ltd (in liq) v Vasquez Investments Pty Ltd (No. 2) [2017] NSWSC 256.
See [59] above.
Stanton (WA) Pty Ltd (in liq) v Vasquez Investments Pty Ltd (No. 2) [2017] NSWSC 256.
See [80]-[81] above.
See [82]-[83] above.
See [78] above.
See [79] above.
See [84] above.
See [85] above.
See [75] above.
Corporations Act, s 588E(4); see [23]-[30] above.
See [20] above.
See [33] above.
See [43], [46] and [50] above.
To adopt the expression used by Hammerschlag J (as the Chief Judge in Equity then was) in Woodgate v Fawcett (2008) 67 ACSR 611; [2008] NSWSC 868 at [101]-[108]. 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: 23 May 2022

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