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[2026] NSWSC 721
Supreme Court of NSW
2026-06-26
Sirtes J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: ELEM Investments Pty Ltd atf the Lisa Miller Family Trust v Starling [2026] NSWSC 721
Hearing dates: 15–16 June 2026
Date of orders: 26 June 2026
Decision date: 26 June 2026
Jurisdiction: Equity - Commercial List
Before: Sirtes J
Decision: See [198]
Catchwords: CONTRACTS – breach of contract – where plaintiffs claim that defendant guaranteed repayment of debt – where defendant denies signing documents – where several versions of each purported document exist – no explanation – whether any loan document genuine – whether signatures genuine
EQUITY – claim for breach of fiduciary duty, breach of trust, and fraud – where allegations traversed by defendant – where minimal evidence tendered – where no evidence of loss
PRACTICE AND PROCEDURE – where evidence suggests possible commission of several criminal offences in connection with proceedings – where court under duty to refer matter for investigation – no right for parties to be heard – parties ordered to show cause
Legislation Cited: Corporations Act 2001 (Cth), ss 127, 197, 198F, 601AH
Family Law Act 1975 (Cth), ss 79, 79A, 80
Trade Practices Act 1974 (Cth), s 52 (repealed)
Cases Cited: Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28
Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; 80 ACSR 670
Currie v Dempsey (1967) 69 SR (NSW) 116
Damjanovic v York Agencies Pty Ltd [2003] NSWCA 222
Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty Ltd (in liq) [2002] NSWCA 29
In the matter of Human Group Pty Ltd; In the matter of A.C.N. 137 384 662 Pty Ltd [2023] NSWSC 28
Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114
Normandy Woodcutters Ltd v Simpson [2002] NTSC 43
Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200; 98 ACSR 124
Simpson v Hodges [2007] NSWSC 1230
Texts Cited: Practice Note SC Eq 3
Category: Principal judgment
Parties: ELEM Investments Pty Ltd atf the Lisa Miller Family Trust (First Plaintiff)
Lisa Miller (Second Plaintiff/Cross-Defendant)
Darren James Starling (Defendant/Cross-Claimant)
Representation: Counsel:
H Altan (Plaintiffs/Cross-Defendant)
Defendant/Cross-Claimant (self-represented)
File Number(s): 2023/00238721
In these proceedings, Ms Lisa Miller and the trustee company of her family trust, ELEM Investments Pty Ltd (ELEM), bring a claim against Mr Darren Starling. The first part of the claim seeks recovery of debts the payment of which Mr Starling is said to have guaranteed. The second part of the claim seeks compensation for loss said to have been suffered by the Plaintiffs by reason of Mr Starling’s conduct when he was a director of ELEM. By cross-claim, Mr Starling says that Ms Miller is liable to indemnify him in respect of any judgment entered against him on the Plaintiffs’ claim.
At all relevant times Ms Miller and Mr Starling were married. They apparently separated in November 2018. Despite this, the status of their marriage is unclear. Paragraph 4 of the Plaintiffs’ opening outline of submissions states that they are “husband and wife”.
It is admitted on the pleadings that ELEM was incorporated on 9 July 1997. ELEM was incorporated for the purpose of acting as a trustee for the Lisa Miller Family Trust (the Trust). The Trust was settled pursuant to a deed dated 21 August 1997 (the Trust Deed). It is a discretionary family trust, the beneficiaries of which relevantly include Ms Miller, and any spouse, child, grandchild or great-grandchild of Ms Miller.
Ms Miller is the sole shareholder of ELEM. She was a director during the following periods:
from 9 July 1997 until 15 August 2015;
from 10 January 2017 until 28 February 2017; and
from 8 February 2019 until the present.
Mr Starling was a director of ELEM from 21 October 2013 until 8 February 2019.
On 23 June 2004, Wet Fix Pty Ltd (WetFix) was incorporated and operated as the trading entity of the Wet Fix Group, carrying on a water bottling business in Stapleton, Queensland. Wet Fix Holdings Pty Ltd (WetFix Holdings) was its ultimate holding company. Mr Starling was a director of WetFix, as was Ms Miller for a short time. The companies are now in liquidation.
Shortly prior to the incorporation of that company, Ms Miller commenced a relationship with Mr Starling. They married and had two children.
These proceedings were commenced by Statement of Claim filed on 21 July 2023.
The Plaintiffs filed an Amended Statement of Claim on 15 March 2024, and then a Further Amended Statement of Claim on 4 July 2024 (FASOC). A document styled “Further Amended Statement of Claim” but, in actuality, being a Second Further Amended Statement of Claim, was filed on 26 May 2025 (2FASOC). That iteration of the pleading added paragraphs 30–44 to the document but left intact paragraphs 1–29 of the FASOC filed on 4 July 2024.
The status of Mr Starling’s defence to the claim has become a significant issue.
On 3 September 2024, Mr Starling filed an Amended Defence to the 29 paragraphs in the FASOC. Because it was filed prior to the filing of the 2FASOC, it did not plead to the claims added in paragraphs 30–44 in that document, being the breach of trust, breach of fiduciary duty, and fraud claims. That is the latest version of Mr Starling’s defence that was included in the Court Book prepared by the Plaintiffs. That is the basis on which the Plaintiffs’ opening written submissions stated at paragraph 7:
“Mr Starling has not filed a defence to FASOC. Each of the allegations in paragraphs [30]-[44] of the FASOC must therefore be taken to be admitted: UCPR 14.26 and 14.27(4). Mr Starling has filed defences to earlier Statements of Claim relating to the loan agreements referred to in [6](l) above.”
After I reserved judgment, it became apparent that this was wrong.
On 23 May 2025, Stevenson J relevantly made the following orders:
“1. Grant leave to the plaintiffs to file the Further Amended Statement of Claim in the form attached to these orders and marked Annexure ‘A’.
2. Order that the plaintiffs pay the defendant’s costs thrown away, if any, by reason of the amendment.
…
5. Direct that the defendant file and serve a defence to the Further Amended Statement of Claim by 6 June 2025.”
Pursuant to those orders, Mr Starling, by his solicitors, did in fact file an Amended Defence to the 2FASOC on 6 June 2025. That document appears on the court file. That Amended Defence made no admissions in relation to paragraphs 30–44 of the 2FASOC, except that Mr Starling admitted that he owed ELEM fiduciary duties while he was a director.
The key themes of that Amended Defence are that Mr Starling:
denies signing or executing all three loan agreements and guarantees in any capacity;
asserts that Ms Miller lacked authority to execute those documents on behalf of ELEM or the WetFix Entities on the relevant dates;
claims that he was unaware of the existence of all three loan agreements and guarantees until about 2 August 2024;
denies receiving any notification of default on 11 or 15 March 2019;
despite these denials, admits non-payment of $4,325,000 (first loan), $486,500 (second loan), and the amount demanded in paragraph 27, namely, $9,182,969.19 plus interest; and
denies the Plaintiffs’ claim that he committed a breach of trust, breach of fiduciary duty, or fraud, in relation to his conduct as a director of ELEM.
Why this version of Mr Starling’s Amended Defence was not included in the Plaintiffs’ Court Book, or drawn to the Court’s attention, is inexplicable. The Court enquired of Mr Starling at the hearing why he had not filed a defence to the 2FASOC while he was still legally represented, particularly as he had filed an Amended Cross-Claim after that date. Mr Starling’s response was to the effect that his solicitors were acting for him at the time, and he was under the impression that they had filed such a defence. As it happens, he was correct. While it would have been advantageous had Mr Starling drawn the Court’s attention to that pleading, his status as a self-represented litigant probably explains this oversight.
The Plaintiffs conducted their case on the basis that the allegations in paragraphs 30–44 were not traversed and required no evidence to prove them. This was mistaken. I wish to record that I have no doubt whatsoever that Mr Altan of Counsel, who appeared for the Plaintiffs, was not made aware of this and that he conducted the case on the basis of his instructions.
Mr Altan indicated to the Court upon instructions that:
the Plaintiffs were abandoning the claims for declaratory relief in prayers 10, 11 and 12, and paragraphs 44(c), (d), and (e) (which are relevantly in the same terms), of the 2FASOC; and
no interest was being claimed by the Plaintiffs.
Furthermore, paragraph 1 of the relief claimed in the 2FASOC seeks damages of $1 million for breach of a loan contract dated 28 May 2015, which Mr Starling is said to have guaranteed. Paragraph 2 claims interest of 6.5%. Mr Altan did not formally abandon this claim, but he made no submissions about it and the 2FASOC does not plead the basis upon which the claim is made. I treat it as abandoned.
It is helpful to set out the context in which the matter proceeded.
When the Plaintiffs commenced the claim in 2023, they were not legally represented, although I note that Ms Miller is a paralegal. At some time thereafter, they retained solicitors to act for them. I gather that a barrister was also briefed to act for them pro bono at some stage.
However, by the time of the hearing, the Plaintiffs were not represented by a solicitor. It does not appear that ELEM was given leave to appear without a solicitor. As ELEM’s sole director and shareholder, Ms Miller had conduct of its case. The Plaintiffs briefed Mr Altan of Counsel to act for them directly for the hearing. I was informed by Mr Altan prior to the commencement of the hearing that the Plaintiffs had engaged a firm of solicitors in an ‘administrative capacity’ to assist in the preparation of the Court Book. Significantly for what follows in these reasons, Mr Altan informed the Court that he had no part in the preparation of the Court Book. I accept that without hesitation.
Mr Starling initially retained solicitors to act for him. They were responsible for his pleadings and much of his affidavit evidence. By the time of the hearing, however, they ceased to act for him and he was self-represented. Mr Starling is resident in Queensland. This fact alone would not have been sufficient to prevent his being required to attend the hearing in person. However, because he had sole parental responsibility for children, the Court granted Mr Starling leave to conduct the hearing via audiovisual link.
The hearing was conducted on the basis of a Court Book consisting of 2719 pages (CB). It spanned seven folders, but an identical electronic copy was also prepared. Because of the volume of documents in the case, I asked Mr Altan to provide the Court with a list of documents, cross-referenced to the CB pages, upon which the Plaintiffs relied. He helpfully provided that list at the beginning of the second day of the hearing.
The matter was initially said to require four hearing days. It was completed by lunchtime on the second day.
On the morning of 12 June 2026, one working day before the hearing, Mr Starling wrote to my chambers advising that ELEM had been deregistered on 5 May 2026. An extract from the Australian Securities and Investments Commission (ASIC) confirmed the deregistration, and Mr Altan accepted that fact at the directions hearing later that morning.
That evening, the Plaintiffs sent to my chambers a Notice of Motion, and an affidavit in support, seeking orders pursuant to s 601AH of the Corporations Act 2001 (Cth) (the Corporations Act) that ELEM be reinstated by ASIC forthwith, that all acts done by or on behalf of ELEM between its deregistration and reinstatement are valid, and that ELEM be permitted to participate in the proceedings.
The circumstances of ELEM’s deregistration were set out in Ms Miller’s affidavit in support. In the past, a firm of solicitors would forward correspondence from ASIC to Ms Miller. That practice ended some time before May 2026, when she attempted to change the registered address of ELEM. Once Ms Miller learned on 2 June 2026 that ELEM had been deregistered, she called ASIC and discovered that it was because of non-payment of fees, whereupon she paid the outstanding fees and filed an application with ASIC for ELEM to be reinstated.
Reinstatement by Court
(2) The Court may make an order that ASIC reinstate the registration of a company if:
(a) an application for reinstatement is made to the Court by:
(i) a person aggrieved by the deregistration; [and]
…
(b) the Court is satisfied that it is just that the company’s registration be reinstated.
(3) If:
…
(b) the Court makes an order under subsection (2);
the Court may:
(c) validate anything done during the period:
(i) beginning when the company was deregistered; and
(ii) ending when the company’s registration was reinstated; and
(d) make any other order it considers appropriate.
I am satisfied that Ms Miller, as a person who would benefit from ELEM bringing these proceedings, has standing to pursue an application for its reinstatement. The circumstances of ELEM’s deregistration show nothing inappropriate in the Plaintiffs’ conduct. The purpose of ELEM’s reinstatement, being, at least immediately, to maintain these proceedings, is appropriate. Further, there is no reason, in this matter or in the public interest generally, that ELEM ought not to be reinstated.
Accordingly, I will make the reinstatement orders sought by Ms Miller.
The Plaintiffs’ claim in debt against Mr Starling is founded on three loan agreements and three guarantees said to have been executed by Mr Starling. He denies that he is liable to the Plaintiffs for any of the claimed amounts because he did not sign any of the documents.
In light of this issue, both parties tendered an expert report from a forensic document examiner. The Plaintiffs relied on a report prepared by Mr John Heath dated 20 January 2025. Mr Starling relied on a report prepared by Ms Melanie Holt (the Holt Report) dated 14 February 2025.
At the outset, I note that Ms Miller was not a party to any of the loan agreements. She cannot obtain relief against Mr Starling on this claim.
Mr Altan made almost no submissions about the debt claim in his oral or written submissions. But it was not abandoned. This meant that the issue was not explored at the hearing as thoroughly as it otherwise might have been. However, all the relevant evidence has been tendered and is relied upon. I have had the opportunity to review that evidence closely. This part of the Plaintiffs’ case is significantly more complex than it first appeared.
ELEM bears the onus of establishing, on the balance of probabilities, that the agreements exist and that Mr Starling signed them. Although Mr Starling says he did not sign any of the documents, he does not need to prove that. The onus remains with ELEM to prove that he did.
As Walsh JA observed in Currie v Dempsey (1967) 69 SR (NSW) 116 at 125, where a fact alleged is an essential element in the cause of action, the legal burden to prove it remains with the plaintiff. It is true that where a party alleges that a signature is a forgery, the onus rests with that party to prove the allegation: Damjanovic v York Agencies Pty Ltd [2003] NSWCA 222 at [25] (James J, Meagher and Beazley JJA agreeing). However, Mr Starling has not made any positive allegation of that nature, and he does not need to. In merely denying the Plaintiffs’ pleading that he signed the documents, he has traversed their allegation and put them to proof thereof. Mr Starling does not advance a case that any person has forged his signature (even if that be the only available inference if his denial is to be believed).
On the question of forgery specifically, and fraud more generally, it is necessary to bear in mind the limitations which constrain the Court in making findings to that effect. Mr Starling’s defence did not plead that any person forged his signature. He made no submissions to that effect, and he did not put to Ms Miller in cross-examination that she had done so. In those circumstances, as a matter of natural justice, it is not open to the Court to make findings of dishonesty in this regard: Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 at 542 [100] – 545 [118] (Leeming JA, Beazley P and Sackville AJA agreeing). But, as made clear above, no such findings are required to determine this aspect of the case.
ELEM pleads that it entered into the first Loan Facility Agreement dated 1 June 2016 to provide WetFix a facility of $4,325,000 (the First Loan Agreement). It says that Mr Starling guaranteed that loan. ELEM’s case is that the loan was repayable on 31 March 2019 and has not been repaid, such that Mr Starling is liable to it.
The parties joined issue on the pleadings as to whether the signature said to be Mr Starling’s was in fact applied by him. A more significant problem has become apparent: which version of the First Loan Agreement is correct. There are three.
The first version of the First Loan Agreement (the 1FLA) is located at CB 1389–1402. It is included in the section of the Court Book headed “Loans”. This is the version upon which the Plaintiffs relied at item 6 of Mr Altan’s list of documents.
The 1FLA is curiously drafted.
First, the “Loan” is defined (as drafted) as “the outstanding principal amount and unpaid interest totalling $325,000, $2,200,000, $1,8000 and additional loans issues to the business from time to time”. The Plaintiffs plead that “Loan” in the First Loan Agreement includes the amounts of “$325,000.00, $2,200,000.00, $1,800,000.00”. But that is not what the loan document says. If “$1,8000” is a typographical error, the Plaintiffs have adduced no evidence to explain this discrepancy, nor have they sought rectification. The words “outstanding principal amount”, “unpaid interest”, “additional loans” and “the business” are undefined.
Secondly, cl 7.1 provides that WetFix must repay the Loan and other amounts on the earlier of “5 Business Day of delivery of written demand from the Lender following the Borrower committing a default under any Transaction Document” and “the Repayment Date”. The “Repayment Date” is defined as 31 March 2014, over two years prior to the execution of the document. Yet the Plaintiffs plead that “Repayment Date” means 31 March 2019. That is not what the document says.
Thirdly, cl 3.1 sets out certain conditions precedent. Clause 3.4(a) provides that the First Loan Agreement may be terminated if the conditions in cl 3.1 are not fulfilled by 31 December 2013. This date is also over two years prior to the execution of the agreement.
Fourthly, the Plaintiffs plead that cl 1.1 of the 1FLA defines “Guarantor” as “Darren James Starling” and “STAR HQ (ABN 86 132 641 680)”. It does not. Clause 1.1 defines “Guarantor” as “STAR HQ (ABN 86 132 641 680)” and “WETFIX Pty Ltd (45 109 687 381)”. Mr Starling is not a guarantor within that defined term.
Fifthly, in cl 4.1 the Borrower, being WetFix, is referred to with the male possessive pronoun “his”. Male pronouns are also used to refer to the Borrower in the Schedule headed “Representations and Warranties”.
Ms Miller purportedly executed that agreement on ELEM’s behalf in accordance with s 127 of the Corporations Act 2001 (Cth) as “Director/Secretary” and “Director”. She subscribed her name in print below her signatures. On behalf of WetFix there is a signature above the printed name “Daren Starling”. Neither signature is witnessed or dated.
That execution page appears as follows:
The following page includes a “Declaration of Purpose” pursuant to the National Credit Code. The loan amount is expressed as “$4,200,000.00”. A signature appears above the printed name “Daren Starling”. It is undated and not witnessed. That page appears as follows:
“My lawyers in this proceeding, Gear & Co Lawyers, also obtained a copy of an email from Lisa to Mr Pullen dated 28 November 2023, pursuant to a s 198F Request to Mr Pullen. At pages [663] to [932] is a copy of this email which attached, among other things:
(a) An alternative version of the Purported First Loan Agreement (at pages [898] to [925]) and the Purported Second Loan Agreement (at pages [926] to [928]). I did not sign either of these agreements and my purported signatures recorded on those documents are not my true signatures; and
(b) An unsigned Word version of what appears to me to be a version of the Purported Second Loan Agreement. The metadata of that document reveals that it was created by Lisa on 18 March 2019. At page [932] is a screenshot of that metadata for that document.”
No objection was taken to this paragraph of Mr Starling’s affidavit, and he was not cross-examined on it.
Mr Travis Jay Pullen was the liquidator of WetFix Holdings.
At paragraphs 19 to 20 of that affidavit, Mr Starling explains the reference to “a s 198F Request”:
“19. During the course of this proceeding, my lawyers in this proceeding (Gear & Co Lawyers), have on my behalf made requests to the liquidators of both these entities and the receiver of Wet Fix requesting documents pursuant to section 198F of the Corporations Act 2001 (Cth) (s 198F Requests).
- Pursuant to the s 198F Requests, Gear & Co Lawyers have received tranches of documents from the liquidators of both these entities and the receiver of Wet Fix.”
Pages 898–925 of the exhibit to that affidavit, referred to at paragraph 180(a), appear at CB 1145–1171. Some duplication appears to have occurred in the scanning of the 2FLA. However, it is clearly legible.
The terms of the 2FLA appear to be identical to those of the 1FLA. However, the document is not identically formatted. The bottom of page 1 of the 2FLA, which includes definitions provided in cl 1.1, includes the following definitions:
“Guarantor means STAR HQ (ABN 86 132 641 680)
Guarantor means WETFIX Pty Ltd (45 109 687 381)
ELEM Investments means (ABN 70 079 272 361).”
In the 1FLA, the definition of “ELEM Investments” appears instead at the top of page 2.
Similarly, the spacing of characters and words in the 1FLA seems to be wider than the 2FLA. This has the consequence that words in the respective documents commence on different lines.
The execution page of the 2FLA is markedly different from the 1FLA. ELEM purported to execute the document by Ms Miller signing as “Director/Secretary” and Mr Starling signing as “Director”. Both printed their names by hand beneath those signatures. In the 1FLA, Ms Miller signed the document as a director and secretary.
A signature is then applied above the printed name “Daren Starling” on behalf of WetFix. It is not witnessed. The two purported signatures of Mr Starling on the 2FLA appear divergent. They are conspicuously different from his purported signature on the 1FLA and, even on the 1FLA, the two purported signatures reveal some obvious differences.
The execution page of the 2FLA appears as follows:
An apparently identical “Declaration of Purpose” to that included in the 1FLA then follows. However, it is unexecuted, as compared to the 1FLA, where it purports to have been signed by Mr Starling. There is no explanation for these discrepancies in the Plaintiffs’ evidence.
“On 1 June 2016 Elem entered into a loan facility agreement with Wetfix Pty Ltd (First Loan Agreement). Annexed and marked ‘LM-D’ [pages 31 to 43] is a copy of the First Loan Agreement. The First Loan Agreement was signed by me and the Defendant as the Director of Wetfix, the Director of Star HQ and as a Guarantor, shown at page 35.”
Pursuant to cl 14 of Annexure 3 to Practice Note SC Eq 3, the parties were required to prepare a folder of affidavits, statements and reports to be relied upon at trial. That provision requires each lay affidavit which refers to documents to be annotated with that document’s location in the Court Book. The Plaintiffs prepared such a folder. Paragraph 9 of that affidavit was annotated in the right-hand margin with “CB 1389”. That is the location of the 1FLA upon which the Plaintiffs relied at the hearing.
I have accessed the court file to obtain Ms Miller’s affidavit filed on 23 July 2024. The filed version includes the annexures. ‘LM-D’ at pages 31 to 43 is not the same document as the 1FLA. It is an entirely different document to the 1FLA and the 2FLA. Quite how this has occurred is a matter that could, conceivably, have an innocent explanation.
The first page of the 3FLA is certified by a Justice of the Peace (apparently in Queensland) as being “the Annexure marked ‘A’ referred to in the Affidavit of Lisa Miller sworn 19 October 2023 before me”. That affidavit is not in evidence in these proceedings.
After I identified the 3FLA, I found that it was located at CB 2435–2447 (as noted above). There it forms Exhibit LM-08 to an affidavit of Ms Miller sworn on 23 August 2024 (CB 2307) in proceedings in the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA). It is obviously the same document as that labelled ‘LM-D’ because ‘LM-D’ appears on the front page and the numbering in the bottom right corner corresponds with the numbering of the annexures to Ms Miller’s 23 July 2024 affidavit.
There are many differences between the 1FLA and the 2FLA, on the one part, and the 3FLA on the other.
Mr Starling provided Ms Holt with the 3FLA. At paragraph 38 of her report, Ms Holt confirms that she has received Annexure LM-D and has labelled it “Q1A”. Mr Starling also provided her with the 2FLA obtained from the liquidators, which Ms Holt termed “Q1B”. For consistency, I will refer to them as the 3FLA and the 2FLA, respectively. I note that Ms Holt was not provided with the 1FLA. I do not know when, if ever, Mr Starling was provided with that version of the First Loan Agreement prior to Ms Miller’s including it in the Court Book.
The Holt Report sets out a comprehensive analysis of the differences between the 2FLA and the 3FLA. Most of them are plain to the naked eye. There are many slight differences in formatting between the documents in clauses which are otherwise in identical terms. However, some of the differences are more significant.
First, the identities of the guarantors in cl 1.1 are not the same. In the 2FLA, the guarantors are defined as “STAR HQ” and “WETFIX Pty Ltd”, but in the 3FLA they are “Darren James Starling” and “STAR HQ”.
“Q. Why is it then that the copies received by Melanie Holt were different to the copies filed with the Court?
A. There’s an original loan documents that are in the court book that were sent to Melanie Holt.
Q. They weren’t originals?
A. Sorry, is there a question?
Q. Why are there two different versions of these documents, one in the Court file and one sent from Mr Heath to yourself to Gear & Co to Melanie Holt, why are those versions different?
A. So, the original loan documents were sent to Gear & Co and to Melanie Holt for examination.
Q. But they are not the same as the ones filed in the Court documents, in the Court file?
A. I’m sorry, they are the same original documents in the court book.
Q. But they’re not.
A. Okay‑‑
Q. One of them even has a different address in it?
A. I am not sure how they are different. Is there a question?
Q. It is laid out. Have you read the report of Melanie Holt?
A. It is my understanding is that both the expert reports basically say it is inconclusive because your signature changes all the time.
Q. No, have you read the report?
A. That’s how I read the report.
Q. Melanie Holt explains that the documents in the Court file are different to the documents that she was given to examine. Why are there two different sets of documents?
A. I do not ‑ I don’t know why there’s two sets of documents. There’s the ‑ she had a ‑ I don’t know, Melanie Holt is not my expert, I just know I sent originals and it is tagged as originals, it is in the court book, it was sent to Melanie Holt, and that’s all I can say.
Q. Ms Miller, they’re not originals, they’re copies, and some of them are copies of copies, and they’re different in select areas that have been laid out by Melanie Holt, they are different documents. Why are there multiple versions of these documents?
A. Really there are three different loan documents. Maybe that’s what you’re confused with. I’m not sure what the question is.
Q. Why are there multiple versions of each of those documents?
A. Well, there’s the original signed version of the three loan documents. There’s also a loan document on 28 May 2015 with your signature on it signing a loan agreement with Wetfix to ‑ for Elem to sign. You signed it on behalf of Elem.”
Mr Starling put squarely to Ms Miller that there were multiple versions of the loan agreements in existence and that Ms Holt identified discrepancies between them. Ms Miller provided no satisfactory explanation as to how this was possible. Because of this, I have scrutinised the Court Book and the court file closely to determine which documents appear at various locations.
My impression of Ms Miller while she gave this evidence was unfavourable. Her demeanour was high-handed and dismissive. She was confronted with what has turned out to be a seemingly inexplicable fault in the Plaintiffs’ case. Instead of attempting to assist the Court, she waved it away and even went so far as to suggest that it was Mr Starling who was confused. At least on this point, he was not.
In the absence of a satisfactory explanation having been provided by Ms Miller, the Court is left to draw its own conclusions.
ELEM has not satisfied me on the balance of probabilities that WetFix entered into the First Loan Agreement.
First, the 1FLA (which is the version that ELEM relied upon at the hearing) does not on its own terms correspond with the pleaded claim. As set out at [44]–[47] above, almost all of its essential terms differ markedly from the terms pleaded in the 2FASOC. Even if I accepted the document as genuine, it is not evidence of the agreement that ELEM sues upon. On this basis alone, ELEM fails.
Secondly, even before turning to Mr Starling’s defence or the evidence he tendered, the Plaintiffs have bizarrely relied upon two completely different versions of what Ms Miller says is one document that she signed, being the 1FLA and the 3FLA. How this has come to pass is not explained. Both documents cannot be genuine. Perhaps neither of them is. Yet Ms Miller has said, perhaps unwittingly, that both are true.
Thirdly, I accept Mr Starling’s evidence that his then solicitors obtained a further version of the First Loan Agreement, being the 2FLA, which Ms Miller supplied to the liquidators of WetFix Holdings. I accept his evidence on this point, first, because it was not challenged and, secondly, because given that Ms Miller has in the Plaintiffs’ own case relied upon two different versions of the agreement, it strikes me as perfectly plausible that she provided a third version to another party.
I cannot be satisfied which version of the First Loan Agreement is genuine. At most, one of them may be, but I cannot know which.
The Plaintiffs plead that ELEM, Mr Starling and WetFix entered into a Deed of Guarantee on 1 June 2016 by which Mr Starling guaranteed WetFix’s obligation under the First Loan Agreement. As I cannot be satisfied that WetFix entered into the First Loan Agreement, no question of a guarantee now arises; there is no obligation to guarantee.
ELEM next pleads that it entered into a Loan Facility Agreement dated 30 June 2018 to provide WetFix Holdings a facility of $486,500.00 (the Second Loan Agreement). It says that Mr Starling also guaranteed that loan. Because the loan was repayable by 1 July 2023 and has not been repaid, ELEM claims that Mr Starling owes it the outstanding sum.
Mr Starling denies that he signed the Second Loan Agreement. But once again, this is not the most significant issue, because there are three versions of the document.
The first version of the Second Loan Agreement (the 1SLA) appears at CB 1410–1412, also in the “Loans” section of the Court Book. Mr Altan identifies this version as the Second Loan Agreement at item 7 of the list of documents relied upon.
The terms of the 1SLA are inconsistent with the terms pleaded in the 2FASOC.
The most significant discrepancy is the pleaded cl 5 at paragraph 17(c) of the 2FASOC. ELEM says that pursuant to cl 5, Mr Starling guaranteed the Borrower’s obligation under the Second Loan Agreement. Clause 5 of the 1SLA deals with the purpose of the agreement but says nothing about a guarantee. There are no guarantee provisions in the 1SLA. Indeed, Mr Starling is not a named party to the 1SLA.
The execution portion of the 1SLA appears as follows:
Mr Starling’s purported signature does not resemble the signatures applied to any version of the First Loan Agreement.
As set out at [53] above, Mr Starling deposes that his then solicitors obtained an alternative version of the purported Second Loan Agreement from the liquidators of WetFix Holdings which Ms Miller sent to them. He exhibits that document at pages 926–928 of the exhibit to that affidavit. The corresponding pages appear at CB 1173–1175. It is clear that this document is the 1SLA, except that it is unexecuted.
The second version of the Second Loan Agreement (the 2SLA) is found at CB 2456–2459. As with the 2FLA, its location has been obscured.
In her 23 July 2024 affidavit read in these proceedings, Ms Miller deposes at paragraph 16 that:
“On 30 June 2018, ELEM as Lender and Wetfix Holdings Pty Ltd as Borrower entered into a further loan agreement (Second Loan Agreement). Annexed and marked ‘LM-N’ [pages 83 to 86] is a copy of the Second Loan agreement. I signed this agreement as the Lendor [sic]. The Defendant signed this document as the Director of Wetfix Holdings and the Borrower as well as the Guarantor.”
In the folder of affidavits, statements and reports referred to at [66] above, paragraph 16 is annotated in the margin with “CB 1410”. But that is the location of the 1SLA. The court file reveals that Annexure LM-N is a very different document.
Annexure LM-N finds form as Exhibit LM-11 to Ms Miller’s 23 August 2024 affidavit in the FCFCOA proceedings at CB 2456–2459. I find that it is the same document as that labelled ‘LM-N’ because ‘LM-N’ appears on the front page and the numbering corresponds with the annexures to the 23 July 2024 affidavit.
While the loan amount and repayment date are the same between the 1SLA and the 2SLA, the differences between the documents are stark. Three are particularly relevant.
First, the 2SLA includes a cl 4.1(c) which provides that “[t]he Lender will be entitled to register a PPSR over the company, Wetfix Holdings Pty Ltd”. There is no corresponding provision in the 1SLA.
Secondly, and most significantly, cl 5 in the 2SLA has been recast as a “Personal Guarantee”. In summary, that clause provides that Mr Starling guarantees WetFix Holdings’ obligations. There is no guarantee of any kind in the 1SLA.
Thirdly, and relatedly, the execution page of the 2SLA includes a space for Mr Starling’s signature as guarantor, above which a signature has been applied. There are discrepancies between the signature applied below Mr Starling’s name and that which appears below WetFix Holdings, on the same page. On ELEM’s case, these signatures should be the same. The execution page appears as follows:
The execution page also has a justice of the peace stamp applied. However, unlike the 3FLA, this document contains a printed space for a justice of the peace or solicitor to sign the document. Below the signature line appears the instruction “witness to sign and provide name and qualification”. On the signature line appears a small signature, and below is the justice of the peace stamp. But a remarkable feature of this document is that the text providing a place for the signature to be applied, and the accompanying instruction, appear on a slant, whereas the name of the witness, Kellie Joanne Tesolin, has been printed in text generated by a computer and appears almost parallel to the bottom of the document. I do not know what to make of this.
The Plaintiffs did not put on any evidence from Ms Tesolin to attempt to discharge their onus of proving that Mr Starling signed the document. I have not been asked to draw any inference from this, and accordingly I do not do so. It is, however, noteworthy.
There is, somehow, a third version of the Second Loan Agreement (the 3SLA) located at CB 1420–1423. Its provenance is not explained.
There are minor formatting inconsistencies between the 2SLA and the 3SLA, but the terms are identical. The critical difference is the execution clause, which appears as follows:
It is immediately apparent that Mr Starling’s purported signature is nothing like that appearing on the 2SLA but is somewhat similar to the signature on the 1SLA. Even on this document, there are visible differences between Mr Starling’s two purported signatures. Only Ms Miller’s signature is consistent across the three versions of this document.
Ms Miller was plainly aware of this document, because she admitted to signing it under cross-examination by Mr Starling (at T30.50–31.37):
“DEFENDANT: Thank you. I go back to, I think, if you can help with the document, 13 June 2018, the agreement there, what page was that?
HIS HONOUR: It was 1420, my recollection is.
STARLING
Q. Whilst I’m searching for it, do you have it? I believe, from memory, you signed that document as director of Elem Investments.
HIS HONOUR
Q. Yes, 1420.
A. Thank you.
Q. This is a loan agreement which bears the date 30 June 2018.
A. Yes.
STARLING
Q. I’m working off memory here, but it will load. I’ll ask the question before I can see it, did you sign that document as director of Elem Investments Pty Ltd?
A. It says that it’s a lender, Elem Investments Pty Ltd.
Q. And you signed on behalf of Elem?
A. That is my signature, yes.
Q. When, in fact, you were not a director of Elem at that time?
A. I was put back as a director in January 2017, and I don’t know why I was removed again in February 2017.
Q. So you weren’t a director at that time?
A. No. Not directly a director of Elem Investments, but a beneficiary and a shareholder, yes.
Q. But you signed as a director?
A. I signed as a lender. That’s what it says on the document.”
As with the First Loan Agreement, and for substantially the same reasons, ELEM has not discharged its onus of establishing that WetFix Holdings entered into the Second Loan Agreement.
On their own case, the Plaintiffs have relied upon at least two different versions of what is said to be one document, being the 1SLA and the 2SLA. No explanation is provided. A yet further version, the 3SLA, has also been incorporated into the Court Book. I can have no confidence as to which of these versions, if any, is genuine.
It follows that ELEM has not proved that Mr Starling guaranteed any obligation under the Second Loan Agreement.
Finally, ELEM claims that it entered into a Loan Facility Agreement also dated 30 June 2018 to loan WetFix Holdings the sum of $4,371,469.19 (the Third Loan Agreement), the repayment of which it says Mr Starling personally guaranteed. It claims he is now liable to it for that sum.
Mr Starling denies that he signed the Third Loan Agreement. But there is more than one.
The first version of the Third Loan Agreement (the 1TLA) is located at CB 1413–1417, where it is identified at item 8 of Mr Altan’s list of documents.
The terms of the 1TLA are, with one fatal exception discussed at [124] below, consistent with what is pleaded at paragraph 25 of the 2FASOC.
Mr Starling’s purported “Personal Guarantee” appears on the penultimate page of the agreement as cl 14. That clause was executed as follows:
A facsimile of this page appears at CB 1419, but nothing turns on that.
The final page of the 1TLA provides for the execution of, I infer, the entire agreement. It appears as follows:
The glaring feature of this execution page is that WetFix Holdings is not included. All signatures are expressed to be on behalf of ELEM.
The second version of the Third Loan Agreement (the 2TLA) appears at CB 2465–2468. As above, that has only become apparent by reconstructing Ms Miller’s affidavit evidence by reference to the court file.
In Ms Miller’s 23 July 2024 affidavit, she deposes at paragraphs 21 and 22 that:
“21. On 30 June 2018, ELEM as Lender and Wetfix Holdings Pty Ltd as Borrower entered into a further loan agreement (Third Loan Agreement). The Third Loan Agreement is annexed and marked ‘LM-Q’ [pages 90 to 93].
22. A Guarantee (‘Third Guarantee’) from the Defendant was also signed for the Third Loan Agreement. Annexed and marked ‘LM-R’ [page 94] is a copy of the Third Guarantee. The Defendant signed the Third Guarantee as the Guarantor.”
The folder of affidavits, statements and reports annotated these paragraphs with references to CB 1413 and CB 1420, respectively. Neither is correct.
Annexure LM-Q is disguised as Exhibit LM-13 to Ms Miller’s 23 August 2024 affidavit in the FCFCOA proceedings at CB 2465–2468. The document is the same as ‘LM-Q’ because it is identified as such on the cover page, and the page numbering is consistent.
Apart from formatting discrepancies, the terms of the 2TLA are mostly identical to the previous version, except that, contrary to what was pleaded in the 2FASOC, indicated in the 1TLA, and sworn in paragraph 21 of Ms Miller’s affidavit above, the “Borrower” on the cover page is described as “WetFix Pty Ltd (ABN 45 109 687 381)”, as opposed to WetFix Holdings.
The other major inconsistency is that the 2TLA does not include any cl 14 personal guarantee. Mr Starling is not a party to it.
Despite the apparent change in the Borrower’s identity, a representative of WetFix Holdings, not WetFix, purportedly executed the document. That execution page appears as follows:
The signature said to be Mr Starling’s does not resemble the signature applied to the 1TLA.
Ms Miller deposes at paragraph 22 of her 23 July 2024 affidavit that Mr Starling guaranteed the Third Loan Agreement in Annexure LM-R. That document does not appear at CB 1420 as indicated, but at both CB 1418 and CB 2473.
This guarantee is identical to the guarantee clause in the 1TLA (CB 1416), apart from Mr Starling’s purported signature. It appears as follows:
It is self-evident that this signature looks nothing like either the signature applied to the 2TLA or (differently again) the 1TLA.
ELEM has not persuaded me on the balance of probabilities that WetFix Holdings entered into the Third Loan Agreement. It relies on two entirely inconsistent versions of the purported agreement. In the 1TLA, WetFix Holdings does not appear on the execution page. In the 2TLA, WetFix Holdings does appear on the execution page but is not the borrower. In these circumstances, I cannot be satisfied that either one is genuine.
Consequently, I cannot find that Mr Starling guaranteed any obligation under the Third Loan Agreement as pleaded.
Given my findings above, it is not necessary to make any findings about whether Mr Starling signed any of the documents, because I cannot be satisfied which, if any, of the documents themselves are genuine. Had it been necessary for me to do so, I would not have been satisfied that Mr Starling executed these documents.
The parties read the evidence of two opposing forensic document examiners, but neither of those experts was called for cross-examination. Quite how the Court is expected to reconcile the differences between these reports in the absence of, first, a joint conclave report having been prepared and, secondly, any examination of these witnesses, remains unexplained.
The Plaintiffs bear the onus of proof to succeed on a claim in excess of $9 million on the guarantees supposedly given by Mr Starling. He was steadfast in his Amended Defence and in his evidence that he did not sign those documents and had not even seen them until after the commencement of these proceedings. Remarkably, it was not put to him in cross-examination that he had in fact signed any of these documents.
No satisfactory guidance was provided to me as to how, in these circumstances, I should synthesise these opposing views. I should note that Ms Holt, in paragraph 30(a) of her report, expressed the opinion that:
“the evidence provides strong support for the alternative hypothesis (H2), that someone else, other than the writer of the specimen signatures attributed to Mr Starling wrote the signatures purporting to be his on the First Loan Agreement (Q1A), the First Guarantee (Q2), the Declaration of Purpose (Q3), the Second Loan Agreement (Q4), the Second Guarantee (Q5) and the Third Guarantee (Q7) compared to the first hypothesis (H1), that Mr Starling signed these documents…”
In the presence of competing reports which were not tested, and in the absence of any submissions made by the Plaintiffs as to why the Court should prefer the conclusions set forth in Mr Heath’s report (and why his opinions merit acceptance in preference to those of Ms Holt), I do not consider that the Plaintiffs have established, on the balance of probabilities, the authenticity of Mr Starling’s signature on any of those documents. Where Mr Starling put the authenticity of his signature in issue—which justified the Plaintiffs’ obtaining their own expert report—there is no reason any presumption should be made in the Plaintiffs’ favour.
The Plaintiffs have not discharged their onus in this respect.
Every critical document relied upon by the Plaintiffs to establish the debt claim had—on their own case—several versions, although I can only infer that they did not realise this. Those versions were inconsistent among themselves and with the pleaded case. Mr Starling’s purported signature was inconsistent among those versions. The only signature that appears consistent in every version of those documents is Ms Miller’s.
Ms Miller was given the opportunity in cross-examination to explain how this multiplicity of versions could exist. She did not give a satisfactory explanation. Indeed, she denied that there were several versions of these documents.
It is not necessary for me to make a positive finding that any signature has been forged, or that any person is responsible for forgery. The Plaintiffs have not established the existence of any of the pleaded loan agreements. Consequently, they have failed to establish that Mr Starling is liable to guarantee those purported obligations.
The debt claim fails.
Paragraphs 30–44 of the 2FASOC concern matters that took place between 2015 and 2020.
The Plaintiffs contend that on or around 17 September 2015, Ms Miller agreed to resign as a director of ELEM for a period of three months on the basis that she would thereafter be reinstated. Because of that resignation, the Plaintiffs say Mr Starling, who had been appointed as a director of ELEM on 21 October 2013, became its sole director from 17 September 2015 until 8 February 2019. I note that these pleaded dates are inconsistent with the ASIC records tendered in these proceedings and particularised at paragraph 6 of the 2FASOC. However, this discrepancy need not be resolved at this stage.
As at the date of Ms Miller’s resignation, ELEM held properties at 82, 85, 86, 87 and 88/7 Lavender Bay Road, Lavender Bay, as trustee for the Lisa Miller Family Trust pursuant to the Trust Deed. The Plaintiffs place significance upon the terms of certain meeting minutes, pleaded in paragraph 34 of the 2FASOC, which contain a condition that Mr Starling would not cause ELEM to sell any of the Lavender Bay properties or use them as security for any loans.
In paragraphs 35 to 37 of the 2FASOC, the Plaintiffs plead that:
on or around 14 September 2015, Mr Starling caused ELEM to enter into a loan with RAMS for $1.2 million and to mortgage 87 and 88/7 Lavender Bay Road as security: para 35;
on or around 27 November 2015, Mr Starling caused ELEM to enter into a loan with Macquarie Bank for $1.7 million and to mortgage 85 and 86/7 Lavender Bay Road as security: para 36; and
on or around 19 January 2016, Mr Starling caused the first plaintiff to enter into a further loan with RAMS for $300,000 using 82/7 Lavender Bay Road as security: para 37.
The gravamen of this claim is pleaded in paragraph 40. The Plaintiffs contend that by this conduct, Mr Starling, who owed ELEM fiduciary duties and, as a director, was liable for any breach of trust committed by it:
breached the temporary resignation condition and the shareholder agreement;
acted outside the scope of his authority as director;
did so to enable funds to be provided to the WetFix group of companies;
did not benefit ELEM or its shareholders;
acted for his own benefit and/or for the WetFix group;
breached his fiduciary obligations;
acted with knowledge of ELEM’s trustee status and the Trust;
caused ELEM to breach the trust, attracting personal liability under s 197 of the Corporations Act;
I wish to make it clear that even if the Plaintiffs’ assertion that Mr Starling had not pleaded to this claim were correct, and accordingly that these allegations must be taken to be admitted, their claim would still have failed.
Paragraph 43 of the 2FASOC pleads that the Plaintiffs have suffered loss and damage by reason of Mr Starling’s conduct in this claim. In paragraph 44(b), the Plaintiffs claim damages for loss of the use of the Lavender Bay properties and/or the value of the Lavender Bay properties.
There is no evidence that supports the claim for “damages” in relation to paragraphs 30–43 of the 2FASOC. Those damages are particularised in paragraph 43 as:
loss of rent from the Lavender Bay properties; and
loss of the value of the Lavender Bay properties.
No submissions were made, either orally or in writing, by the Plaintiffs in relation to the following issues:
the characterisation of damages in relation to the three different claims being pursued, namely breach of fiduciary duty, breach of trust, and fraud; and
what losses are being claimed by each of the Plaintiffs.
Dealing first with the different causes of action, relief is not axiomatically uniform between these different claims. There is, it is trite to note, a more extensive array of remedies available in equity to redress, for example, breaches of fiduciary duty, than the more limited remedy of damages at common law.
The 2FASOC does not, in terms, seek equitable compensation for the alleged fiduciary breach of Mr Starling. I shall nevertheless, beneficially in favour of the Plaintiffs, assume that this is what was sought, in contradistinction to the common law damages which are sought in relation to the debt claims. Ordinarily, a plaintiff must make an election, for a fiduciary breach, between equitable compensation and an account of profits. No such election was made and, again beneficially, I shall assume in the Plaintiffs’ favour that equitable compensation only is sought.
Despite these accommodations in favour of the Plaintiffs, there remains a fatal lacuna in their case in the absence of any evidence of loss. This much is conceded in both the Plaintiffs’ written closing submissions as well as in Mr Altan’s closing address. At paragraphs 12 and 13 of the Plaintiffs’ closing written submissions, the following is stated:
“12. The plaintiffs claim judgment in the sum of $9,696,469.19: FASOC [44](a).
13. Alternatively, the plaintiffs claim the loss of the value of the Lavender Bay properties (FASOC [44](b)), but will need leave to adduce evidence of the sale price of those properties.”
These submissions are, with respect, difficult to understand. The claims set forth in paragraphs 12 and 13 are not alternatives to each other. The claim identified in paragraph 12 is a debt claim for common law damages. The claim in paragraph 13 is for a different cause of action entirely, for fiduciary breach, breach of trust, or fraud.
In his closing submissions at T76.9–31, Mr Altan submitted the following:
“ALTAN: … That then leaves the question of damages and the amount claimed. I’ve indicated at 12, based on what’s claimed in the statement of claim, which a defence hasn’t been filed for, the amount is some $9.6 million. The‑‑
HIS HONOUR: That’s the principal not the interest?
ALTAN: Yes. The alternative, as I’ve set out in para 13 ‑ and this may be the more, on one view, more appropriate measure of damages ‑ is the loss of the value of the Lavender Bay properties. The unfortunate thing is that the court book at this point ‑ or the court book doesn’t contain any evidence about what those properties were sold for and when they were sold.
Ms Miller has just emailed to me and she’s gathered letters of ‑ settlement letters from her solicitors who were acting for her at the time, setting out the sale dates and the prices. And they come to a total of about $4.3 million. Yes, about $4.3 million. If your Honour’s not minded to give judgment in the amount of 9.6 million that’s in the statement of claim, then given the stage at which I’m telling your Honour about this, the only thing I would seek, your Honour, is that if your Honour finds liability and stands the matter over for evidence to be provided on quantum.
HIS HONOUR: I understand the submission.”
Mr Altan quite properly conceded that there was no evidence in relation to any loss associated with the sale of the Lavender Bay properties. As I have already noted, the notion that there is any point of intersection between the common law damages claim concerning the first, second and third loan agreements, and the breach of duty, breach of trust and fraud claims, is misconceived. The Plaintiffs’ submission that they were entitled to $9.6 million for these claims conflates two completely different causes of action. Not only are they different, but they occurred at different times.
This difference is also conceded in paragraph 30 of the 2FASOC, which states that the first loan agreement and first guarantee, the second loan agreement and second guarantee, and the third loan agreement and third guarantee were entered into as an alternative to the Plaintiffs suing Mr Starling in relation to the alleged breaches of trust, breach of fiduciary duty, and fraud. This of itself is a relatively startling assertion, and one that could have considerable legal consequences for the viability of any claims against Mr Starling. But in the way I have dealt with this matter, it is not necessary to address that issue further. Relevantly, paragraph 30 confirms that the two claims are different and do not share any similarity in relation to the damages sought for each.
I reject the relatively faint submission made by Mr Altan that the Court should have made a finding of liability and then granted the Plaintiffs leave to put on evidence in relation to damages. These proceedings were not bifurcated. All issues concerning liability and damages were set down for hearing. In addition, there have been significant delays in bringing this matter to trial, in relation to which Mr Starling made lengthy oral submissions. In particular, Mr Starling submitted that these delays caused him significant financial harm and were the reason why he could no longer afford legal representation when this matter came on for hearing before me.
If the Plaintiffs did not prepare and present evidence to the Court to support these claims, they cannot succeed. Even if the pleaded allegations were taken to be admitted on the pleadings, in the absence of any evidence of loss, the equitable claims fail.
On 6 June 2025, Mr Starling filed an Amended Cross-Claim. The Amended Cross-Claim relies upon an indemnity contained in orders made by Judge Purdon-Sully of the FCFCOA on 29 November 2021. Those orders (located at CB 2280–2288) were made in proceedings between Mr Starling and Ms Miller.
Because I have found that Mr Starling is not liable to the Plaintiffs, his Cross-Claim has fallen away. However, I address it in the alternative, albeit in a more abbreviated manner and without making conclusive findings.
The orders contained the following defined terms:
“Wet Fix Group includes:
i. Wet Fix Pty Limited;
ii. Wet Fix Equipment Pty Limited;
iii. Wet Fix Holdings Pty Limited;
…
Wife’s Entities includes:
i. Elem Investments Pty Ltd;
ii. Lisa Miller Family Trust.”
“THE COURT ORDERS ON A FINAL BASIS:
Indemnities
19. By this Order, the Wife irrevocably indemnifies the Husband in respect of any action, claim or demand made against him by any person, corporation or entity howsoever arising, including but not limited to:
(a) as a consequence of him having been a director or office-holder of any company within the Wet Fix group or the wife’s entities;
(b) as a consequence of his shareholding or interest in any company within the Wet Fix group or the wife’s entities;
(c) by reason of him having guaranteed the payment of any monies or the performance of any duties by him on behalf of any company within the Wet Fix group or the wife’s entities;
(d) in respect of any liability of the parties in relation to any financiers and creditors of the companies within the Wet Fix group or the wife’s entities in existence at the date hereof; and
(e) in respect of any liability to pay any tax to the Australian Taxation Office or to any other revenue collection authority, in respect of any income derived by financiers and creditors or in respect to any property owned by any company or any trading by any company within the Wet Fix Group or the Wife’s Entities.”
Mr Starling says that if he were found liable to either or both of the Plaintiffs, Ms Miller would be liable to indemnify him on the basis of this order. Ms Miller seeks to outflank it.
In order to address these submissions, it is necessary, first, to make an important observation. There is a large and well-understood corpus of legal principle that informs the interpretation of contractual indemnities. Those principles are often pressed into action in circumstances where there is ambiguity that is alleged in relation to the drafting of the indemnity in question.
The indemnity relied upon by Mr Starling is not a contractual indemnity; it is a court order. Moreover, it is a court order made without the consent of the parties. It did not merely give effect to an underlying agreement which then merged in the order. There is no underlying agreement for Ms Miller to indemnify Mr Starling. This alters, considerably in my view, the application of the established body of legal principle, some of which is relied upon by Ms Miller in seeking to sidestep the operation of the indemnity.
There are many and obvious differences between a contractual indemnity and an indemnity imposed by court order, whether it be by consent or otherwise. A contractual indemnity is a primary obligation which has been voluntarily assumed by the parties, supported by consideration (unless made by deed), to hold another harmless against a defined loss or set of losses or liabilities. By comparison, a court-ordered indemnity is not a promise. It is the exercise of jurisdiction imposed on the parties whether they consent or not. In the case of orders made here, the source of power to make such an order was ss 79 and 80 of the Family Law Act 1975 (Cth) (the FLA).
Because there was no bargain between the parties, there is an issue as to how the occurrence of fraud, by the party protected by the indemnity, is dealt with. There is legal principle that a party cannot contract to be indemnified against the consequences of its own fraud. Of course, the parties can specifically address this in the indemnity but, if they have not, fraud may not protect the indemnified party.
For these reasons, great caution must be exercised in applying principles concerning the construction of contractual indemnities to an indemnity imposed by a court as part of orders which are intended, as was the case here, to finalise a property redistribution between a husband and wife.
Ms Miller did not raise any jurisdictional objection to Mr Starling pleading this indemnity by way of Cross-Claim in these proceedings. However, I consider that this question may have merited closer consideration had the determination of the Cross-Claim been necessary.
If this were a contractual indemnity, there would have been no question that Mr Starling could plead it as he did. I think that position likely holds if there were a contractual basis for an indemnity the obligations of which subsequently merged in orders made by consent in another court.
However, as stated above, this indemnity has no contractual basis. Ms Miller did not agree to indemnify Mr Starling in respect of any claims. She was ordered to do so, and not by this Court but by the FCFCOA. I am not certain that the indemnity ordered conferred Mr Starling with an independent chose in action capable of enforcement in a court of competent jurisdiction. It may be that, properly construed, Ms Miller’s obligation to indemnify Mr Starling is a matter of compliance with court orders, rather than a liability at general law.
In this respect, I consider that there may have been a question as to whether this Court would have jurisdiction to enforce the indemnity. If it did not, and assuming that Mr Starling’s demand to be indemnified for any judgment sum went unanswered, Mr Starling may have been required to move the FCFCOA for orders to enforce compliance with the indemnity it ordered. In that case, those proceedings would be the forum in which the scope of the indemnity was construed.
This is not a straightforward question, and it was not the subject of argument between the parties. I raise these observations for completeness and do not express any concluded view. The below analysis proceeds on the assumption that this Court could enforce the indemnity, but may apply equally if the question fell for determination in another forum.
Ms Miller does not advance any submissions to the effect that the indemnity set forth above does not extend to and include the claims made by the Plaintiffs in relation to the debt claims. The Defence to the Amended Cross-Claim, filed by Ms Miller on 27 June 2025, also fails to identify any proper basis as to why the indemnities do not apply to the debt claims.
Paragraph 5(a) of the Defence to the Amended Cross-Claim states that the final orders, which contain the indemnity, are the subject of proceedings in the FCFCOA for the variation and/or setting aside of those orders under s 79A of the FLA. There is no evidence that those orders have ever been varied, nor was any such submission made. On that basis, I consider that the s 79A issue (which was not, in any event, a defence) falls away.
The indemnity is drafted using broad language, including “any action, claim or demand made against him by any person, corporation or entity”, and “howsoever arising”.
The expression “howsoever arising” is exemplified specifically by reference to Mr Starling “having guaranteed the payment of any monies or the performance of any duties by him on behalf of any company within the WetFix Group or the Wife’s Entities”. This is hardly a surprising inclusion. The guarantees, if entered by Mr Starling, pre-date the orders made in the FCFCOA by a number of years and would have been known by the parties. Not only would it have been known, but it was a matter that was specifically identified as being covered by the indemnity. It is difficult to divine how Ms Miller could have argued that the very debt claims now pursued by ELEM were not covered by the indemnity, which on its terms covers them precisely and unambiguously.
Even if I were otherwise satisfied that the Plaintiffs established, on balance, that Mr Starling was liable to ELEM in relation to the pleaded guarantees (which I am not), I consider that this liability would likely be covered by the indemnity. If so, Ms Miller would be liable to indemnify Mr Starling for the judgment sum.
I have already found that these claims must fail owing to the absence of any evidence of liability or established loss. Nevertheless, if I were wrong about this, the question arises as to whether the indemnity would extend to the conduct pleaded in paragraphs 30–43 of the 2FASOC. The Plaintiffs’ closing written submissions referred to and relied upon case law to advance the proposition that the claims alleged against Mr Starling are not covered by the indemnity, such that if the Plaintiffs succeeded, Ms Miller would not be required to indemnify Mr Starling in relation to such claim.
Gatsios Holdings Pty Ltd v Nick Kritharas Holdings Pty L**td (in liq*)* [2002] NSWCA 29 concerned a claim whereby, in the conduct of the business of a trading trust, the trustee made certain representations which were found to have been in breach of s 52 of the Trade Practices Act 1974 (Cth). The trustee was ordered by the Federal Court to pay damages. In the Supreme Court, it sought indemnity for the damages it was ordered to pay pursuant to its right of indemnity. This case concerns a trustee’s right of indemnity rather than a court-ordered indemnity. I do not consider that it is relevant or even of assistance by analogy.
Reliance is also placed on the High Court’s decision in Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; [2004] HCA 28, which is authority for the uncontroversial proposition that indemnities are construed strictly.
I do not consider that authorities which deal with the effect of fraud or breaches of trust provide illumination of the extent to which a court-ordered indemnity would apply in the presence of fraud. It seems to me that if Ms Miller, who was ordered to give the indemnity, sought to argue that the indemnity was, in the circumstances, vitiated by fraud, she would have to apply to the FCFCOA, under s 79A or otherwise, to vary the terms of the order. At present, I consider that Ms Miller would encounter significant difficulties in arguing that the terms of the indemnity do not extend to Mr Starling’s alleged conduct in this respect, particularly as it appears plain enough, even from the terms of the 2FASOC itself, that Ms Miller was well aware of that conduct as at the date the order was made. Paragraph 30 of the 2FASOC states:
“Each of the First Loan Agreement and First Guarantee, Second Loan Agreement and Second Guarantee and Third Loan Agreement and Guarantee were entered into as an alternative to ELEM and Ms Miller suing Mr Starling and/or companies controlled by him after Ms Miller discovered that Mr Starling had acted beyond the scope of his authority as the temporary sole director of ELEM / in breach of Trust / in breach of his fiduciary duties as director and/or fraudulently (as pleaded below) in causing ELEM to enter into various other loan agreements and using ELEM’s assets as security for such loans for his own benefit and/or the benefit of companies controlled by him (as pleaded below).”
It should be apparent from the matters canvassed in these reasons for judgment that I have grave concerns that several criminal offences may have been committed in connection with these proceedings. It is not my role to determine that question, and I do not do so.
If a judicial officer believes that an offence or a possible offence has been committed in connection with the proceedings before the Court, they are under a duty to refer the proceedings to the appropriate authority for investigation: Normandy Woodcutters Ltd v Simpson [2002] NTSC 43 at [53] (Mildren J); Simpson v Hodges [2007] NSWSC 1230 at [268] (Hall J).
Strictly speaking, because a referral does not constitute a finding of misconduct or the exercise of judicial power, a party has no right to be heard before a decision to refer the matter is taken. However, in this matter I am minded to give the parties the opportunity to address the Court as to why the matter should not be so referred. I adopt this course because, apart from a brief but critical portion of Mr Starling’s cross-examination of Ms Miller, the question of the multiple versions of documents was not at the centre of the trial. The scale of this issue has only become apparent after judgment was reserved.
Accordingly, I will list the matter for further directions for this purpose. Any party who wishes to attend and make submissions as to why this matter should not be referred to the authorities for investigation may do so. I indicate that if the Court ultimately makes a referral, those submissions will constitute part of the record available to the authorities for investigation.
The Plaintiffs have failed entirely. There is no reason why costs should not follow that event. Ordinarily, I would make orders to that effect. However, given what has come to light about the Plaintiffs’ conduct of the case, including their preparation of the Court Book, I am going to require the parties to address me on the question of costs and whether a special costs order should be made.
The Court makes the following orders:
Judgment for the Defendant on the Plaintiffs’ claim.
The Cross-Claim is dismissed.
Pursuant to section 601AH(2) of the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission (ASIC) is to reinstate the registration of ELEM INVESTMENTS PTY LTD (ACN 70 079 272 361) forthwith.
Pursuant to section 601AH(3) of the Corporations Act 2001 (Cth), order that all acts done by or on behalf of ELEM INVESTMENTS PTY LTD (ACN 70 079 272 361) between its deregistration and reinstatement are valid.
Grant ELEM INVESTMENTS PTY LTD (ACN 70 079 272 361) leave, nunc pro tunc, to participate in the hearing of these proceedings and order that all acts performed by ELEM INVESTMENTS PTY LTD (ACN 70 079 272 361) in doing so are valid pending its reinstatement by ASIC.
The proceedings are listed for directions at 9 am on 10 July 2026 to:
(a) hear the parties on the question of costs; and (b) allow the parties to show cause why this matter should not be referred to the authorities for investigation.
**********
ELEM Investments Pty Ltd atf the Lisa Miller Family Trust
Starling
(2004) 217 CLR 424
(2017) 94 NSWLR 518
The provenance of the 1FLA is unexplained.
Secondly, the amounts comprising the “Loan” are different. In the 2FLA, the Loan includes the amounts “$325,000, $2,200,000, $1,8000”, whereas in the 3FLA, the amounts are described as “$325,000.00, $2,200,000.00, $1,800,000.00”.
Thirdly, the “Repayment Date” varies between the versions. The 2FLA defines the “Repayment Date” as 31 March 2014, but the 3FLA defines it as 31 March 2019.
Fourthly, in cl 4.1, the 2FLA states that the “Lender agrees to release the Borrower from his obligations under the loan facility agreement dated 4 December 2012”. In the 3FLA, the corresponding clause gives the date “4 December 2015”.
Fifthly, cl 7 differed materially between the versions. In the 3FLA, cl 7 had three subclauses, namely, “7.1 Repayment”, “7.2 Early Repayment”, and “7.3 Default on Repayment”. In the 2FLA, the “Early Repayment” subclause was renumbered “7.3”, and there was no “Default on Repayment” provision or subclause 7.2.
Sixthly, in cl 12.3 of the 2FLA, the address of the Lender for the service of notices was given as “Suite 3A, 211 Ben Boyd Road Neutral Bay NSW 2089” for the attention of “Ms L Starling”. In the 3FLA, that same provision gives the address “31 Euryalus Street Mosman NSW 2088”.
Seventhly, the execution page is different yet again. I have set out at [63] above how that page appears in the 2FLA. In the 3FLA, it appears as follows:
It is obvious that Mr Starling’s purported signature on the 3FLA is conspicuously different to the signature applied to the other versions. These signatures are supposedly witnessed, but the witness is not identified. Instead, Mr Starling’s name is printed under the witness signature (which differs from that said to be his own).
The 3FLA also exhibits a faint stamp of a justice of the peace with an illegible identification number handwritten on it. Quite why this stamp appears on this version of the document, or what purpose it serves, is unclear. Spaces are provided on the execution page for a witness to sign the document. The witness is identified as Mr Starling, but that is plainly wrong. If a justice of the peace had signed the document as a witness, I expect they would have identified their signature with their name. Relatedly, the stamp applied to the document does not have an accompanying certification of any kind. It merely sits there. It does not tell the reader anything about the purpose of its application to the document. It may be that this stamp has been applied to give the 3FLA a veneer of authenticity, although no such finding is necessary.
concealed the mortgages from Ms Miller without her knowledge or approval; and
thereby committed fraud on ELEM and/or its shareholders and the trust and/or its beneficiaries.
At the hearing, the Plaintiffs sought these findings in the purported absence of any defence being filed that answers these allegations. As explained above, such a defence was filed. It denies the allegations. Because the Plaintiffs marshalled almost no evidence to prove Mr Starling’s liability in this respect (apart from bare assertion from Ms Miller in an affidavit), and made no submissions on it, the claims must fail.
For completeness I record that Mr Starling filed evidence on 18 May 2026 that concerned the minutes of the meeting pleaded by the Plaintiffs in paragraph 34 of the 2FASOC. That pleading particularises that the temporary resignation agreement and the so-called shareholder agreement were recorded in the minutes of a meeting of ELEM held on 17 September 2015 and dated 20 September 2015. In addition to this evidence, Mr Chapman, who was the former accountant of the Plaintiffs and who was purported to have signed the document, gave evidence in Mr Starling’s case in answer to a subpoena ad testificandum issued at Mr Starling’s request. Mr Chapman denied executing those minutes and also raised concerns as to the regularity of their contents.