Blaga Kulakovski v Peter Kulakovski

Legislation Cited: Civil Procedure Act 2005 (NSW)
Corporations Act 2001 (Cth)

Cases Cited: Armstrong World Industries (Australia) Pty Ltd v Parma (2014) 101 ACSR 150
Australian Securities and Investments Commission (ASIC) v Financial Circle Pty Ltd (2018) 353 ALR 137
Australian Securities and Investments Commission (ASIC) v Mapstone (2006) 59 ACSR 214
Australian Securities and Investments Commission v Mauer-Swisse Securities Ltd (2002) 42 ACSR 605
Jordan v Avram (1997) 141 FLR 275 at 279
Re Golden Gate Petroleum Ltd [2010] FCA 40

Category: Principal judgment

Parties: Blaga Kulakovski (first plaintiff)
M&B Investments NSW Pty Limited (second plaintiff)
MK Business Holdings Pty Limited (third plaintiff)
Peter Kulakovski (first defendant)
Kurmond Homes Pty Ltd (second defendant)
Kurmond Properties Pty Limited (third defendant)
MPK Commercial Pty Ltd (fourth defendant)
Kurmond Group Holdings Pty Limited (fifth defendant)
Peter Investments NSW Pty Limited (sixth defendant)
Kurmond Complete Pty Ltd (seventh defendant)

Representation: Counsel:
J Hynes with B Millington (plaintiffs)
B DeBuse (defendants)
Solicitors:
MinterEllison (plaintiffs)
Marsdens Law Group (defendants)

File Number(s): 2025/00016216

Publication restriction: Nil

JUDGMENT

1. The first plaintiff, Blaga (Belinda) Kulakovski was married to Michael Kulakovski, who died in 2022. In this judgment, I refer to the parties by their first names without meaning any disrespect.

2. Michael and his brother, Peter Kulakovski, ran a construction business through several corporate entities, known as Kurmond Homes.

3. After Michael died in August 2022, Belinda was appointed director as his replacement in various Kurmond Homes corporate entities, and took over his role in the business.

4. In June 2023, Belinda obtained letters of probate in relation to Michael’s estate, which she asserted included his 50% shareholding in Kurmond Homes Pty Ltd. However, Peter considered Michael’s shares were his, relying on a July 2013 agreement purportedly signed by Michael and Peter, in which they agreed that if one of them died, the surviving brother would receive “automatically and without the need for any further action or approval” the deceased brother’s shares. Belinda denied that Michael signed that agreement.

5. In August 2024, Belinda commenced proceedings in the Federal Court of Australia against Peter and corporate Kurmond Homes entities, alleging oppressive conduct inter alia. She also sought declarations that the 2013 agreement had no effect and that she was entitled to the “beneficial ownership” of Michael’s shares.

6. The matter settled just before the trial commenced, without a determination of who was entitled to Michael’s shares. On 21 October 2024, the parties signed a heads of agreement, stated to be immediately binding on them. Amongst other things, the agreement provided:

7. The parties were to execute a deed of settlement, which would replicate the agreement’s terms and provide mutual releases.

8. Peter was to “purchase” the shares held by Michael’s estate for a “purchase price” calculated by:

(a) $450,000 in cash; (b) 50% of debts owed to Kurmond Homes; (c) 50% of the proceeds of sale of properties owned by Kurmond Homes; (d) Loan balances as defined.

3. Upon payment, Belinda was to provide to Peter “executed share transfer forms to Peter”.

4. Kurmond Homes (under the control of Peter) was to enter into certain lease back agreements.

5. Belinda was to immediately resign as director.

6. Peter was to procure the release of Belinda and Michael’s estate from all guarantees and indemnities given in connection with the business and indemnify them for any loss caused by the companies’ liabilities.

7. Peter gave an undertaking to “do all things necessary to preserve the business of Kurmond Homes” and “not to take any steps to place” the corporate entities into external administration until the Share Purchase had completed.

8. It was not in dispute that Peter immediately took over the control of the relevant Kurmond Homes corporate entities, with Belinda resigning as director and Peter becoming the sole signatory on the relevant bank accounts.

9. On 24 October 2024, Peter’s accountant, without Belinda’s consent, lodged a Form 484, which stated that the shares in Kurmond Homes Pty Ltd held by Michael were reduced by 7,500 to zero and the shares held by Peter were increased by 7,500 to 15,000. Obviously at that time, Belinda had not received the payment contemplated in the agreement and she had not provided Peter with a signed transfer. Belinda only became aware of the alteration of the ASIC register in December 2024.

10. The parties started negotiating the lease back agreements and an independent agent was appointed to sell the properties.

11. In December 2024, the deed of settlement was executed to “supplement” the heads of agreement. It contained detailed provisions concerning the split of Michael and Peter’s business interests consistent with the agreement.

12. Importantly, the issue of the true ownership of the shares was not agreed, as is evident from the “Background” to the deed, which relevantly provides:

E A dispute arose between Peter and Belinda from around at least March 2023, including as to Belinda’s involvement in the business … and her entitlement to the shares held by the Estate in Kurmond Homes. …

…

H The Parties deny liability to one another in respect of the various claims made in the Proceedings.

12. The deed again contemplated Peter purchasing the “Sale Shares”, which was defined as Michael’s shares. The “Purchase Price” was again made up of the elements identified in the agreement. It was agreed that within two days of Belinda receiving the entirety of the “Purchase Price”, she was required to provide to Peter “signed and properly completely Share Transfer Forms”.

13. Peter did not immediately provide signed lease back agreements, and despite requests and demands from Belinda’s lawyers, Peter did not attempt to withdraw the Form 484 or restore Michael’s name to the ASIC register.

14. After threatening to do so in December 2024, in January 2025, Belinda commenced these proceedings seeking specific performance of the settlement deed, in particular the execution of the lease back agreements. Belinda also sought the following order:

An order requiring [Peter] to cause the records for Kurmond Homes Pty Ltd to be amended to reverse the effect of the Form 484…

15. In submissions, an amended form of order was sought:

Within 3 days of the date of this order, [Peter] is to take all steps necessary to cause the records of [Kurmond Homes] held with the Australian Securities and Investments Commission to be corrected to reflect the shareholding position of [Kurmond Homes] immediately prior to the lodgment on 24 October 2024 of the Form 484...

16. On 10 April 2025, the lease back agreements sought by Belinda were executed. Therefore, Belinda did not press any order for specific performance in that regard. Belinda only agitated her complaint about the ASIC register.

17. According to the independent agent appointed pursuant to the settlement deed, it is likely Belinda will be paid the total amount due under the deed before Christmas this year. There is no dispute Peter has already paid Belinda the $450,000 he was required to under the deed.

18. For the reasons that follow, I do not consider it appropriate to make a mandatory injunction requiring Peter to take any step in relation to the ASIC record. The parties have sought time to make submissions on costs following the publication of this judgment.

Ought Peter take steps to change the ASIC register?

19. Belinda sought a mandatory injunction pursuant to ss 1322 or 1324 of the Corporations Act 2001 (Cth) (the Act) to have Peter “correct” the register.

Section 1322

20. I do not accept an order ought be made under s 1322.

21. Section 1322 confers a broad discretion to cure both procedural and substantive contraventions of the Act: Re Golden Gate Petroleum Ltd [2010] FCA 40 at [40]-[41] (McKerracher J), citing Jordan v Avram (1997) 141 FLR 275 at 279 (Gillard J). Under that provision the Court relevantly has power to, on the application by any interested person, order an act done “is not valid by reason of any contravention of a provision of [the Act]”, even though there may have been an offence committed: s 1322(4)(a) and 1322(5), and to direct the rectification of any register kept by ASIC: s 1322(4)(b). Belinda did not provide detailed submissions on s 1322. I am not satisfied that the order sought by Belinda properly falls within s 1322(4). And in any event, it would not be appropriate to make an order under s 1322 as I consider substantial injustice would be caused to Peter and Kurmond Homes now were relief to be granted, as detailed below.

Section 1324

22. A final, mandatory injunction may be granted under ss 1324(1) or (2) if it has some utility or serves some purpose contemplated by the Act: Brusa v Brusa [2020] WASC 362 at [31]-[32] (Hill J).

23. When an injunction application is made by ASIC rather than a private litigant, the Court is likely to give greater weight to the question of whether the injunction will serve a purpose contemplated by the Act: Mauer-Swisse at [36] (Palmer J); Australian Securities and Investments Commission (ASIC) v M101 Nominees Pty Ltd (No 3) (2021) 153 ACSR 230 at [410] (Anderson J). Belinda did not refer me to any authorities where a private litigant had obtained an injunction similar to that sought by her.

Is there utility because the register is “false or misleading”?

24. Belinda’s submissions focussed on s 1308 of the Act, which provides it is an offence for a person to lodge a document with ASIC where the person knows that the document is materially false or misleading. The submission was that Peter had breached s 1308 by lodging the Form 484, and while there was no ASIC prosecution on foot, the Court ought to order the “serious ongoing breach of the Act” to be remedied. Further, it was submitted that there were “serious ongoing contraventions” of s 346C, which makes it an offence not to correct the register. It was also submitted that there was an ongoing “misleading of ASIC, of NAB of the home warranty insurance”.

25. Belinda’s lawyers warned Peter’s lawyers they considered there had been a breach of s 1308. Belinda’s counsel originally asked that I make a finding that Peter “knowingly” breached the legislation, but later submitted that I did not need to determine whether there was a breach of s 1308. I would not be prepared to determine that Peter had breached the legislation or “knowingly” misled anyone, particularly in circumstances where he was not cross-examined about his knowledge of the legislation or any breach and such knowledge could not be lightly inferred.

26. Counsel further submitted that I did not need to determine who in fact “owned” the shares at the time of the settlement deed, because the settlement deed prevailed and concerned a process for mutual releases. The submission was that until Belinda signed the transfer forms any change in the register from Michael’s name to Peter was “false” and ought to be undone.

27. At all times, Peter had asserted that Michael had agreed on his death, his shares would “automatically” transfer to Peter. If Peter was correct, then there had been an “automatic” transfer, and there was no substantive error on the ASIC register, even though there was no signed transfer held by the company.

28. The deed provided for mutual releases of “claims” when Belinda provided Peter a signed share transfer, after she had received her full consideration. Therefore, the parties had agreed that at that point, Belinda would no longer be able to agitate that Michael’s estate (or Belinda as beneficiary) was the true owner of the shares at his death. Conversely, Peter would not be able to agitate that there had been an automatic transfer of Michael’s shares to Peter on his death. Belinda’s release of Peter would be complete upon him receiving the share transfer document, which would prevent Belinda challenging his ownership thereafter.

29. Further, the heads of agreement and settlement deed required Peter to continue the business and pay out Michael and Belinda’s guarantees. He became the sole director and bank signatory. Peter’s uncontested evidence was that he needed funding to carry out the promises in the deed and to obtain the cash to pay Belinda. It appears that National Australia Bank lent money on the basis of Peter being the sole shareholder and director. The bank recently indicated to Peter that:

… if any part of the shareholding of Kurmond Homes Pty Ltd is transferred back to an entity with a deceased individual such as Michael Kulakovski or his estate under Michael Kulakovski Family Trust, this will impact upon our ability to provide new accounts, operate existing ones and lending facilities.

30. It makes commercial sense that the bank would reconsider its position if half of the shares in the company were “owned” by a deceased person and the corresponding guarantees had been discharged. I accept that there will likely be ramifications for Peter and his entities if the register concerning shareholding is now changed in some way.

31. Therefore, I do not accept that the ASIC register is “materially false or misleading”, or that Belinda has established Peter ought to undo his change in the shareholding on the register. Peter has now complied with all that he can do under the deed, and in a matter of mere weeks Belinda will be obliged to sign a transfer to regularise any issue.

Discretionary reasons to refuse the injunction

32. There are other discretionary reasons why I would refuse the injunction sought.

33. First, if the ASIC register was returned to recording that Michael owned the shares, that would be false. There is therefore no utility in making such an order. Further, I do not accept that the injunction would serve some purpose contemplated by the Act: Mauer-Swisse at [36] (Palmer J). There is no public utility, as where ASIC brings a prosecution. There is no appreciable risk of future contraventions by Peter.

34. Belinda does not suggest she has suffered any loss. Belinda’s counsel submitted that Michael’s estate “may” suffer a loss if the ATO enquired as to the timing of the transfer for the purposes of, for example, capital gains tax. However, Belinda does not bring the proceedings in her capacity as executrix of Michael’s estate. In any event, I consider any loss caused by an ATO enquiry to either the estate or Belinda unlikely in circumstances where Belinda is armed with the deed, evidence of payments, and this judgment.

35. Secondly, both parties anticipate that in a matter of weeks the independent agent will complete the distribution of funds, so that Belinda will have received all her entitlements under the deed. Belinda’s counsel accepted that at that time, what is recorded in the register would be accurate, save as to the date of the transfer. In those circumstances, it is unclear why the parties have spent large amounts of money litigating this issue and taking up the Court’s time.

36. Thirdly, as noted above, I accept Kurmond Homes and Peter may well suffer harm if the injunction were made.

37. Lastly, Peter proffered an undertaking to correct the date of the transfer currently recorded as 24 October 2024 to 8 September 2025, being the date Peter transferred the $450,000 to Belinda, which was the last action he was required to do under the deed; the independent agent must carry out the remaining task of distributing sale proceeds. I accept that undertaking, which I consider will provide Belinda and the estate with any protection, should it be necessary. No injunction is otherwise necessary or appropriate.

Conclusion and orders

38. For those reasons, I am not prepared to grant a mandatory injunction as sought by Belinda.

39. The parties sought time to consider these reasons and make brief submissions on costs, to be determined on the papers if appropriate. I will accede to that request.

40. I make the following orders:

41. Prayer for relief 1 in the plaintiffs’ summons filed 14 January 2025 is dismissed.

42. Defendants to file, serve and provide to the Chambers of Peden J evidence and submissions on costs of no more than 4 pages within 7 days of today's date.

43. Plaintiffs to file, serve and provide to the Chambers of Peden J evidence and submissions on costs of no more than 4 pages within 7 days of receipt of the defendants’ material.

44. The Court will determine any such alternative costs application on the papers, if appropriate.

45. The Court notes and accepts the undertaking of the Defendants to take steps to amend the ASIC register of Kurmond Homes Pty Ltd to record the date of the transfer of Michael’s shares to Peter to 8 September 2025.

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