DELTA RESOURCE MANAGEMENT PTY LTD (IN LIQUIDATION) -v- MCKAY [2024] WASC 423 (21 November 2024)

1. The plaintiff, which is a company in liquidation and which is now controlled by its appointed liquidators, seeks recovery of an amount which it says was loaned to the defendant. The plaintiff alleges in the statement of claim that a loan was recorded in the books and records of the plaintiff company, as at 20 July 2015, in the sum of $815,792.41.[1] The loan had also been recorded in earlier books and records maintained by the company, dating back to 2011.[2]
2. The loan is pleaded to be in favour of the defendant, who was a director of the plaintiff for over a decade, from 2 March 2006 until 8 August 2016.[3] The defendant has also been a shareholder of the plaintiff since 14 March 2012, holding some 120 fully paid ordinary shares.[4]
3. The loan is asserted to be the aggregate of the various amounts advanced, including amounts connected with the purchase of a house (such as $25,000 for a deposit and $624,884.36 for settlement on the purchase) and an amount described as being for 'Mesh Management' (in the sum of $125,300),[5] which the defendant has indicated is the private company through which she operated.
4. The plaintiff pleads that the loan amount was demanded in writing on 20 July 2023, but the defendant has failed, refused or neglected to pay the sum due or any amount in satisfaction thereof.[6]

1. Before I address the substance of the application, it is appropriate to set out the principles which the Court must apply in determining this matter.

1. The relevant principles for the determination of a summary judgment application such as this are well established, and were recognised by the plaintiff in its outline of submissions. The principles were summarised by the Court of Appeal in NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd.[7] I respectfully adopt the Court of Appeal's recitation of the principles. It is sufficient to emphasise the following matters for present purposes, noting that the summary below is drawn from my recent reasons in Iron Horse Machines Pty Ltd v Olmate Holdings Pty Ltd.[8]
2. First, the jurisdiction of the Court to award summary judgment should be exercised with great care and not be exercised unless it is clear that there is no real question to be tried. The Court should refuse leave to defend and grant summary judgment where the facts which are established are conclusive such that it is possible to say, without doubt, that there is no question to be tried: Fancourt v Mercantile Credits Limited.[9]
3. Second, a plaintiff who applies for summary judgment bears the onus of persuading the Court that the claim is a good one and that there is no defence. If the plaintiff's affidavit in support of the application makes out a prima face case, an evidentiary burden will pass to the defendant to show that there is a defence to the action. However, the overall legal burden remains with the plaintiff to persuade the Court that the relief should be granted: Westpac Banking Corporation v Anderson.[10]
4. Third, the question whether a defence is so untenable that it cannot possibly succeed may require extensive argument. Summary judgment is not to be confined to cases where it is apparent at a glance that the claim is untenable: NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd.[11]
5. Fourth, notice of a proposed defence or notice of the actual defence, will not disqualify a plaintiff from asserting the belief that there is no defence to the claim: Westpac Banking Corporation v Anderson. Whilst leave to defend ought to be given where there is a counterclaim that could be raised as an equitable set off, a counterclaim merely amounting to a cross‑action does not provide a defence to the plaintiff's claim so as to prevent the award of summary judgment: Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2].[12]
6. Fifth, if there is a conflict of evidence on the affidavits, the Court should approach the application for summary judgment on the assumption that the facts set out in the affidavits relied upon by the party resisting the application (in the present, the defendant) will ultimately be accepted at trial: Gerovich v Gerovich.[13]
7. I will approach the present application on this basis.

1. As noted earlier, the plaintiff is not able to point to a loan instrument or contract to support the allegation there was a loan. The liquidators point instead to the books and records of the company to demonstrate the existence of a loan to the defendant.
2. In this regard, the liquidators rely on the observations of Murphy JA in Central City Pty Ltd v Montevento Holdings Pty Ltd[14] to the effect that agreements are not necessarily only oral or written, and the existence of an agreement may be inferred from the acts and conduct of the parties as well as, or in the absence of, their words. This statement is undoubtedly correct. The plaintiff's claim is not fatally impaired merely because it cannot point to a written instrument or exchange of communications which expressly supports the existence of a loan. The absence of a written instrument will however require a close examination by the Court of the available material to ensure the appropriate findings can be made.
3. Further, the plaintiff relies on the further principles collected by Murphy JA in Central City Pty Ltd v Montevento Holdings Pty Ltd as to when a loan is repayable. At [36] - [38], Murphy JA (Buss JA agreeing) stated the principles as follows:

(a) At common law, where no time for repayment of a loan is specified, or where the loan is stated to be payable 'on demand', there is an immediate debt established by which the money is repayable immediately without the creditor first making a demand for payment.

(b) A loan payable 'on demand' in the above sense is to be distinguished from a loan only repayable on condition that a demand is first made. In the latter case, but not the former, the making of the demand is a condition precedent to liability to repay, and the cause of action does not arise until the demand has been made.

(c) Where the parties do not expressly fix a time for repayment, or agree that the repayment is to be conditional upon the making of a demand, implications as to such matters may be made or inferred in appropriate circumstances.[15]

Section 1305 of the Corporations Act 2001 (Cth)

1. Finally, I should say something about the effect and operation of s 1305 of the Corporations Act 2001 (Cth) (the Act). The plaintiff places considerable reliance on this provision to establish its claim. The section provides:

1305 Admissibility of books in evidence

(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).

1. This provision operates to dispense with the need to authenticate the books and records of the company, where those documents are kept pursuant to a requirement under the legislation. The provision does not make the company's books conclusive evidence of the matters they contain, in the sense of requiring the tribunal of fact to make a finding in terms of the content of the books in the absence of proof to the contrary by the opposing party.[16] Rather, the books are prima facie evidence of the matters stated in them, and the weight of that evidence is to be measured in accordance with the common sense of the tribunal of fact.[17]
2. For the purposes of the provision, a book is 'kept' if it is retained or held by the company under a requirement of the Act, or is a part of the documents or records maintained by the corporation in a systematic or periodic manner.[18] If a document purports to be a book 'kept' by the company then there is a rebuttable presumption that it is a book for the purposes of the provision.[19]
3. Importantly, this section permits, but does not require the court to 'accept documents admitted under the relevant provisions to prove the underlying transactions, and the section does not exclude the need to establish the efficacy of the underlying transactions recorded in a company's minutes in all cases.'[20]

1. The only evidence the Court has before it has been adduced by one of the liquidators, Mr Kirman, which he in turn has largely drawn out of the books and records of the plaintiff company. No responsive evidence has been filed by the defendant to counter this material. As the application thus rests on the findings of Mr Kirman and the documents he has identified, I should say something at the outset about Mr Kirman's role and the extent of the investigations he has undertaken.
2. Mr Kirman is a partner of the firm McGrathNicol. He is a registered liquidator with over 25 years' experience in restructuring, turnaround and insolvency management.[21]
3. Together with Mr Brauer, Mr Kirman was appointed as a joint and several liquidator of the plaintiff on 21 April 2023. Prior to that, Mr Kirman and Mr Brauer had been appointed as the provisional liquidators of the company, on 15 February 2022, and later joint and several administrators on 23 June 2022.[22] On 21 December 2022, Mr Kirman and Mr Brauer were appointed as joint and several deed administrators of the company, following the entry by the company into a deed of company arrangement.[23]
4. Mr Kirman has deposed to the investigations which he and his team have undertaken over the last two years. The investigations have included an analysis of the company's financial records, including:[24]

(a) the plaintiff's internal management accounts which include profit and loss statements and balance sheets prepared during the time leading up to his appointment;

(b) the plaintiff's records with respect to aged payables and aged receivables including invoices and payment records;

(c) the plaintiff's records with respect to its taxation obligations;

(d) the plaintiff's records with respect to correspondence and contracts with its suppliers, customers, and employees; and

(e) other financial records kept by the Company and provided to Mr Kirman and Mr Brauer including bank statements, charge documents and creditor correspondence.

1. As a result of those investigations, Mr Kirman deposes that he identified a record of a loan made by the company to the defendant. I have reviewed the material adduced by Mr Kirman in his affidavit, and I am satisfied that the accounts of the company, at least on their face, record the existence of a loan to the defendant.
2. The loan is recorded in the general ledger maintained by the company for the period from 1 July 2011 to 10 July 2023.[25] I will extract an image of the general ledger and incorporate it as part of these reasons, in Attachment A. I accept that the general ledger of the plaintiff is a document kept under a requirement of the Act. I refer in this regard to the substantive obligation in s 286 of the Act, and the definitions of 'books' and 'financial records' in s 9 of the Act.
3. As can be seen from the general ledger, the loan account was given the reference number 1-3101 in the internal records of the plaintiff, with the description 'Loan to M McKay'. The general ledger reveals an accumulating, advancement of funds by the plaintiff to the defendant over the period from 2012 to 2015, which is a period of time during which the defendant was both a director and a shareholder of the company. The amounts may be summarised as follows:

1. The loan itself is also recorded in the balance sheet of the plaintiff.[26] An image of the relevant portion of the balance sheet is extracted in Attachment B to these reasons. I also accept that the balance sheet of the plaintiff is a document kept under a requirement of the Act, as explained at [37] above.
2. Additionally, I have received evidence of the bank statements of the company's operating bank account with the Commonwealth Bank of Australia, which record payments made from the company's bank account to the benefit of the defendant. The bank statements retained by the plaintiff are records which are kept under a requirement of the Act, or at least purport to be such.[27] The payments were made over the period from 1 February 2012 to 31 July 2015. The payments are not described in a consistent manner. The payments are variously recorded as:

(a) 'Merc';

(b) 'Merc Loan';

(c) 'Merc Loan Rent';

(d) 'Mesh';

(e) 'Loan to Merc';

(f) 'Loans';

(g) 'Loans to directors';

(h) 'KK and MM';

(i) 'KK MM MF Loans';

(j) 'Loans to KK & MM';

(k) 'Loan to MM';

(l) 'Del MM';

(m) 'Dell KK MM';

(n) 'Delta MM';

(o) 'Merc Prepayment';

(p) 'Mercedes McKay';

(q) 'Mercedes Loan'; and

(r) 'Mercedes McKay Merc Loan'.[28]

1. Neither the general ledger nor the balance sheet refer to the payments as being 'drawings' or 'dividends' payable to the defendant. Nor do the bank account statements.
2. It should be noted that, in respect of several of the payments, the plaintiff has also attached a printout from the accounting software used by the company, which shows that the payment was made to more than one recipient. For example, the payment on 17 April 2014 of $7,000 in the bank statements, described as 'KK MM', is a payment of $5,000 to Ms Katie Kerruish and $2,000 to the defendant.[29]
3. Mr Kirman deposes that he issued a demand to the defendant seeking repayment of the loan within 14 days. I refer to his letter dated 20 July 2023.[30] Mr Kirman deposes that the defendant has failed to pay the amount demanded, or any amount thereof.
4. The defendant rejects the plaintiff's characterisation of any of the payments as being part of a loan arrangement. Although no affidavit evidence was filed by the defendant, the defendant made the following submissions at the hearing:[31]

(a) the defendant submits there was no loan arrangement in place at all;

(b) the defendant submits that the amounts she received in relation to her house were in effect drawings paid to her as a director of the company, and not loans; and

(c) the defendant submits that the other payments made to her were in effect prepayments against invoices that she would later issue for services provided to the company, and not loans even though they were described on occasion as loans.

1. I will now address the essential issues which arise on the plaintiff's summary judgment application, by reference to the evidence referred to above and the principles I have earlier set out. In each case, it is necessary to bear in mind that the plaintiff bears the onus on this application to establish each essential aspect of its claims to the requisite standard. That is, each aspect of the claim must be conclusively demonstrated by the plaintiff and there must be no real question to be tried.

First issue - Has the plaintiff established that a loan was made by the plaintiff to the defendant?

1. I am satisfied and, indeed, it is common ground, that there is no written instrument or contract which records a loan arrangement between the plaintiff and the defendant. Nevertheless, having regard to the balance sheet and general ledger of the plaintiff company, I am satisfied the plaintiff has conclusively demonstrated there was in existence a loan arrangement between the plaintiff and the defendant. Both the balance sheet and the general ledger record a loan having been made by the plaintiff company to the defendant. Indeed, it is apparent from the balance sheet that there were, over time, loans made by this company to nine individuals, being:

(a) the defendant herself;

(b) three other directors of the plaintiff (being Ms Katie Kerruish, Mr George Fotios and Mr Michael Fotios); and

(c) five other parties.[32]

1. The total amount of the loans recorded in the balance sheet of the plaintiff is significant, being a total of around $3.8m. The individual loans range in value from around $6,000 to $2.15m. I consider it highly unlikely that the business accounts of this company would inadvertently record such significant amounts as loans if they were properly characterised as drawings or payments for services, or something other than a loan. Put another way, I do not accept that the classification of these amounts, which includes the amount in relation to the defendant, can be explained away as simply misdescriptions in the accounts.
2. The general ledger also includes a provision for 'bad debts' and an entry for interest being payable on the amounts recorded (see Attachment A), both of which further support the contention that the amounts should be characterised as loans. For reasons explained below, I do not accept the amount claimed by way of accruing interest can be sustained on the present application, but that does not preclude the Court having regard to the fact of the interest charge to support the overall characterisation exercise.
3. In assessing this evidence, I am assisted by the prima facie evidence which can be found in the general ledger, the balance sheet and the bank statements, in accordance with s 1305 of the Act.
4. However, I have also had regard to the matters deposed to by Mr Kirman concerning the extent and thoroughness of the investigations undertaken by the liquidators and their team, to identify relevant documentation and trace the loan which forms the basis of this claim. Those investigations, which have identified the individual payments made to the defendant by the plaintiff over time, by reference to numerous bank account statements, helps to fortify the Court in reaching the conclusion that a loan arrangement was put in place with the defendant, which, for whatever reason, was never formally documented in writing. While in a larger, more sophisticated business, the absence of a written arrangement documenting a high value loan might tell against its existence, I do not consider it to be unusual for a company of this size and profile to have failed to formally document a loan arrangement with a director, or indeed with several directors.
5. For an example of a similar case, I refer to the decision of Banks-Smith J in Habitat 1 Pty Ltd v Formby [No 2].[33] In that case, there was no written loan instrument but her Honour was assisted by the terms of the company's constitution, which demonstrated the authority of the company to advance funds to its directors, in reaching her conclusion that the payments were loans, not dividends. Her Honour also received evidence that the account in that case was regularly referred to in day to day communications as a 'loan account' or as 'the Div 7A loan account'.[34] I do not have any similar evidence before me in the present case, although its absence is not fatal given the manner in which the payments have been recorded in the general ledger, in the balance sheet and in the bank statements. Each case of this nature will necessarily turn on its facts.
6. As the loan was not formalised, I cannot be satisfied as to the precise date on which the loan was established, but it was most likely in or prior to the 2011 financial year. I say that because the accounts of the plaintiff record the loan from as earlier as the 2011 financial year.

Second issue - Has the plaintiff established the terms of the loan?

1. The critical issue for the plaintiff to address on this application, as to the terms of the loan, is the agreed basis on which the loan was repayable by the defendant. In the absence of any loan instrument or contract, I find there was no express time for repayment of the loan by the defendant. It was, as a matter of law, a loan payable 'on demand'.
2. Certain matters flow from this finding, as a matter of law. One of those matters is that the loan created a debt by which the funds were repayable immediately without a formal demand for payment being a precondition to repayment. That is to say, the debt itself arose when the loan was first established, although the amount of the loan obviously increased over time.[35]
3. The plaintiff does not expressly contend that the loan arrangement was accompanied by any contractual term requiring payment of interest. Absent an identified contractual or statutory basis for a claim for interest, I cannot presently accept that the plaintiff has demonstrated an entitlement in this regard. This means that the amount of $15,632.12 which is claimed as interest on the loan, which appears as an entry on 30 June 2012 in the general ledger, cannot be sustained on this summary judgment application and I will reject that amount at this stage.
4. There is a claim for pre-judgment interest pursuant to s 32 of the Supreme Court Act 1935 (WA), which I will address below.

Third issue - Has the plaintiff established the amount of the loan?

1. I am satisfied the total amount of the funds paid by the plaintiff to the defendant was $815,792.41, less the amount which was charged to the defendant's account by way of accruing interest. The total amount is the amount recorded in the general ledger of the plaintiff and in the balance sheet, which are prima facie evidence of these facts.
2. That said, there is a question whether the material before me displaces the prima facie operation of s 1305 in certain respects. That is, does some of the material presented by the plaintiff point against the proposed finding, which the plaintiff contends should be made, that all amounts recorded in the general ledger against the loan account described as 'Loan to M McKay' should be found to be part of the loan arrangement. In my view, it is necessary for the Court to review this material carefully, having regard to the descriptions which appear in the general ledger and the bank statements.
3. I have thus considered, by reference to all of the material before the Court, whether the total amount recorded in the loan account has been demonstrated by the plaintiff, to the summary judgment standard, as being, in its entirety, referable to the loan arrangement. In this regard, I refer to:

(a) the various statements in the general ledger and in the bank statements to payments as 'prepayments' of invoices; and

(b) the instances where amounts are not expressly recorded in the general ledger entry or in the bank statements as being directly referable to a 'loan'.

1. I have carefully reviewed the bank statements and the general ledger references, and prepared a table which cross-references the entries. The table is set out in Attachment C to these reasons. By undertaking this review, I have reached the view that I can be affirmatively satisfied that various payments were advanced to the defendant by way of the loan arrangement, but I cannot reach that state of satisfaction in relation to all such payments.
2. In particular, where the general ledger or bank statement has included a description that the amount is a 'prepayment', I consider it is open to conclude at this stage that there is an arguable basis for the payment to have been advanced to the defendant under some other arrangement, not being for the purposes of the loan. For example, as a drawing paid to a director or as a prepayment of an invoice for services to the company. Further, where the bank statement does not expressly record the payment as being for a 'loan', I harbour some doubt as to whether the reference in the general ledger to the corresponding amount can be accepted on its face, to the confidence required on a summary judgment application, as being part of the 'loan' arrangement.
3. Adopting this analysis, I am satisfied to the requisite standard that the amount of $745,444.36 has been demonstrated by the plaintiff as having been advanced pursuant to the loan arrangement. In contrast, I cannot be satisfied at this stage that the balance, being $70,348.05, is referable to the loan arrangement and I am satisfied the defendant should be permitted the opportunity to present a defence to those amounts at trial.
4. I stress that the assessment at this stage must meet the high bar required for a summary judgment application. It must also be remembered that this is a case in which the plaintiff's claim rests upon no written instrument, but relies upon secondary material to demonstrate the existence of a loan. This is why a line by line assessment of the plaintiff's claim is required, rather than an en bloc characterisation.
5. In relation to those amounts where I cannot presently be satisfied the claim is made out, it may be at trial that the adduction of further evidence assists the Court to make a positive finding that the amount is referable to the loan arrangement. Equally, at trial, it may be that the amount is found to have been paid pursuant to a non-loan arrangement.

Fourth issue - Has the plaintiff demonstrated that the claim is not statute barred?

1. At common law, the plaintiff's cause of action will have accrued upon the funds being advanced to the defendant, by reason of the matters explained at [27] above. Ordinarily, this proposition might be thought to create a limitation period difficulty for the plaintiff in the present circumstances, given the proceedings were not commenced until March 2024 and the relevant funds were advanced to the defendant no later than around July 2015. That is, of course, much more than six years before the proceedings were commenced.
2. The answer to the foregoing (apparent) difficulty is to be found, according to the plaintiff, in the terms of s 59 of the Limitation Act 2005 (WA). This provision is peculiar to this State and was introduced as part of the overhaul of our limitation legislation some 20 years ago.
3. This particular reform followed the much earlier changes in England. In that jurisdiction, the common law rule was altered by statute such that time did not begin to run until the date on which a written demand for payment is made. See the Limitation Act 1980 (UK), s 6. That legislation implemented the recommendations of the Orr Committee Report issued in 1977.[36] The reforms in this respect were designed to avoid the unfairness which the common law rule created in non-commercial contexts. The Committee observed that a risk to lenders arose when loans were made within a family or between friends, that an 'inadvertent barring' of their claims might occur through, as was explained by Waite LJ in Boot v Boot:[37]

...an erroneous, though understandable assumption that there were no penalties for forbearance, and that the claim could be left outstanding without risk of extinguishment until repayment was formally demanded.

1. The reforms effected in the United Kingdom were not, in terms, confined to non-commercial settings. Similarly, the legislative provision introduced in Western Australia operates broadly, and is not confined to non-commercial circumstances.
2. Section 59 presently provides:
   1. Debts repayable on demand

A cause of action for the repayment of a debt repayable on demand accrues when there is a failure to comply with a demand for repayment.

1. This provision operates in relation to debts 'repayable on demand', which is a reference, not to debts in respect of which a demand is a precondition of repayment, but rather to debts where no time for repayment of a loan is specified or where the loan is stated to be payable 'on demand'. That will include a debt in the nature of the loan from the plaintiff to the defendant which is the subject of the present proceedings.
2. As noted above, there was no equivalent provision to s 59 under the predecessor regime in this State.[38] Section 59 operates to deem that the cause of action in such situations accrues only upon the failure to comply with a demand, and thus modifies the common law position. From a creditor's perspective at least, the provision has a beneficial operation in that it ameliorates the harshness of the common law position and the limitation period difficulties which otherwise arise.
3. In the present case, I find that an effective demand was made by the plaintiff by letter dated 20 July 2023. I am further satisfied that the cause of action accrued following the lapse of 14 days after receipt of this letter (being the time period for repayment stipulated in the letter). That is, upon the defendant failing to comply with that demand, the plaintiff's cause of action accrued, by reason of s 59 of the Limitation Act 2005 (WA).

1. I am satisfied the plaintiff has established that a loan of funds was made by the company to the defendant. I am satisfied on the evidence the total amount of the loan as demonstrated by the plaintiff on this application is $745,444.36. I am satisfied that this amount remains outstanding and has not been paid by the defendant despite demand being made upon her by the plaintiff's liquidators. I cannot be satisfied that the plaintiff is entitled to summary judgment on the balance of the claim.
2. I am therefore satisfied the plaintiff has demonstrated an entitlement to summary judgment on the claim as pleaded, albeit to a lesser sum than claimed, and there is no basis to conclude that the defendant has any defence to this aspect of the claim.
3. Finally, I am satisfied the extension of time for bringing the application should be granted, and the delay has been satisfactorily explained in the affidavit material[39] and by reference to the memorandum of conferral.
4. I will make orders in terms of the plaintiff's minute of proposed orders dated 12 November 2024, amended as follows:
   1. The plaintiff is granted an extension of time to bring the summary judgment application against the defendant.
   2. Judgment be entered in favour of the plaintiff against the defendant in the sum of $745,444.36, together with interest on that amount pursuant to s 32 of the Supreme Court Act 1935 (WA), on and from 3 August 2023.[40]
   3. The action will otherwise be adjourned to a directions hearing on a date to be fixed.
5. The purpose of order 3 is to, in effect, allow the plaintiff an opportunity to consider what further steps it wishes to take in relation to the balance of the action. I will hear from the parties as to the costs orders which should now be made, although my provisional view is that the plaintiff should have its costs of the application, and as the action has not concluded, no order as to the costs of the action itself should presently be made.

This is the beginning balance identified in the general ledger. Other than the fact the amount is recorded in the general ledger against the loan account, there is no detail as to payments which are represented by this amount.

Description as a prepayment is not consistent only with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description as a prepayment is not consistent only with the amount being characterised as part of the asserted loan to the defendant.

Description as a prepayment is not consistent only with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description as a prepayment is not consistent only with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

There is no corresponding bank statement for this general ledger reference. As explained in the reasons, there is no basis at present to sustain this aspect of the claim.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant.

The relevant entry in the bank statement is dated 11 March 2013, not 13 March 2013. This amount is recorded as a payment to the plaintiff from the defendant and so is a deduction against the plaintiff's claim. It is recorded in the bank statement as an 'error' and the Court can accordingly infer it represents an adjustment against the entry on 13 July 2012 concerning the payment labelled T&C Couriers.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

There is no corresponding bank statement for this general ledger reference. The amount in the general ledger is for a nil amount, in any event.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

The relevant entry in the bank statement is dated 19 July 2013, not 11 July 2013. Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant and to another director.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant and to another director.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant and to another director.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant and to another director.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant and to another director.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant and to another director.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Descriptions of the payment are not consistent only with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

The relevant entry in the bank statement is dated 13 June 2015, not 22 June 2015. Descriptions of the payment are not consistent with the amount being characterised as part of the asserted loan to the defendant, although there is some evidence that payments were made to the defendant.

Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

There is no corresponding bank statement for this general ledger reference. The amount in the general ledger is for $1,665.93. Descriptions of the payment are not consistent with the amount being characterised as part of the asserted loan to the defendant.

The relevant entry in the bank statement is dated 24 July 2015, not 20 July 2015. Description of payment is consistent with the amount being characterised as part of the asserted loan to the defendant.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[4] Statement of Claim [2] and [3]; Kirman Affidavit, Attachment RMK-1.

[5] Statement of Claim [4]; Kirman Affidavit [16].

[7] NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [2020] WASCA 107 [54]. See further the statement of principles by the Court of Appeal in Zaghloul v Bayly [2021] WASCA 125 [116] (Murphy, Mitchell and Vaughan JJA), referring to Sutton Investments Pty Ltd v Realistic Investments Pty Ltd [2017] WASCA 14 [24].

[8] Iron Horse Machines Pty Ltd v Olmate Holdings Pty Ltd [2024] WASC 383.

[9] Fancourt v Mercantile Credits Limited [1983] HCA 25; (1983) 154 CLR 87, 99.

[10] Westpac Banking Corporation v Anderson [2017] WASC 106 [102].

[11] NRW Contracting Pty Ltd v Cliffs Asia Pacific Iron Ore Pty Ltd [54] (Murphy JA).

[12] Field Camp Services Pty Ltd v Site Accommodation Pty Ltd [No 2] [2012] WASCA 27. See also HSBC Bank Australia Ltd v Mavaddat [2015] WASC 153 [89].

[13] Gerovich v Gerovich [2018] WASC 153 [32] and Hadouken Pty Ltd v D Comm Infrastructure [2024] WASC 330 [21].

[14] Central City Pty Ltd v Montevento Holdings Pty Ltd [2011] WASCA 5 [35] (Murphy JA, Buss JA agreeing).

[15] See also Netglory Pty Ltd v Caratti [2013] WASC 364 [275] (Edelman J, as his Honour then was).

[16] Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; (2009) 75 ACSR 1 [396] (Austin J); Australian Karting Association Ltd v Karting (New South Wales) Incorporated [2022] NSWCA 188 [128] - [140] (Gleeson JA, Meagher JA and Simpson AJA agreeing); and Stone v Mizzi [2024] FCA 696 [49] - [50] (Halley J). See also R P Austin & A Black, Austin & Black's Annotations to the Corporations Act, LexisNexis [9.1300].

[17] Australian Securities and Investments Commission v Rich [396] - [397] (Austin J).

[18]Australian Securities and Investments Commission v Rich [296] - [298] (Austin J).

[19] R P Austin & A Black, Austin & Black's Annotations to the Corporations Act, LexisNexis [9.1300]. For examples of documents that have been found admissible under s 1305, see Residues Treatment and Trading Company Ltd v Southern Resources Ltd [1989] SASC 1397; (1989) 52 SASR 54; 15 ACLR 416 and Linfox Transport (Aust) Pty Ltd v Arthur Yates & Co Ltd [2003] NSWSC 876; (2003) 47 ACSR 261.

[20] R P Austin & A Black, Austin & Black's Annotations to the Corporations Act, Lexis Nexis [9.1300], citing Advanced Holdings Pty Ltd as trustee for the Deminon Trust v Commissioner of Taxation [2021] FCAFC 135 and Carna Group Pty Ltd v Griffin Coal Mining Co (No 6) [2021] FCA 1214.

[24] Kirman Affidavit [14] - [15]. I have also reviewed Attachments RMK-8, RMK-9, RMK-10 and RMK-11 which assist to explain the extent of the investigative work undertaken by the liquidators.

[25] Kirman Affidavit [19], Attachment RMK-7.

[26] Kirman Affidavit [18], Attachment RMK-6.

[27] Corporations Act 2001 (Cth), s 1305(2).

[28] Kirman Affidavit [17], Attachment RMK-5.

[29] Kirman Affidavit, Attachment RMK-5, pg 91. See other examples at pages 92, 95, 97, 103, 104, 108, 111, 114 and 121.

[30] Kirman Affidavit [23], Attachment RMK-12.

[32] Kirman Affidavit, Attachment RMK-6, pg 127. There are also numerous loans to related entities. See also Attachment RMK-1, pg 9 for the list of directors.

[33] Habitat 1 Pty Ltd v Formby [No 2] [2017] WASC 331 [315] - [319].

[34] Habitat 1 Pty Ltd v Formby [No 2] [286] and [310].

[35] As explained by Murphy JA in Central City Pty Ltd v Montevento Holdings Pty Ltd.

[36] See the Twenty-First Report of the Law Reform Committee, Cmnd 6923 (1977), [3.19] - [3.26]. See also the article by Professor John Tarrant on the historical position and the need for reform in Australia: Tarrant J, 'Limitation Legislation and Loans Repayable on Demand' (2004) 1 UNELJ 249.

[37] Boot v Boot [1996] EWCA Civ 1352; (1996) 2 FCR 713 (Waite LJ).

[38] A point which was of some significance in Netglory Pty Ltd v Caratti. In that matter, the relevant debt was subject to the provisions of the Limitation Act 1935 (WA), not the Limitation Act 2005 (WA), and so the current s 59 had no saving operation: at [250]. See also, in a similar vein, Blenkinsop v Blenkinsop Nominees Pty Ltd as trustee of the Blenkinsop Family Trust [2015] WASC 254 [24] (Allanson J).

[40] Interest will accrue from the date on which the time period for payment in the plaintiff's demand expired, which was 3 August 2023.