Embedded Claims Pty Ltd v Litigation Finance

background 4 On 4 March 2019 Mr Kapp was declared a bankrupt. 5 On about 23 March 2020 Embedded was incorporated. It was the joint venture vehicle through which Patrick Arthur Dale, the sole director and company secretary of each of the appellants, and Mr Kapp intended to investigate and pursue class actions involving allegations that retail lessors had overcharged their tenants for the use of electricity. 6 As set out at [1] above, Mr Kapp and Mr Dale's respective interests in the joint venture consisted of 50 shares in Embedded. 7 In about October 2020 Embedded applied to the National Australia Bank to open a bank account but was met with obstacles. In particular, in early November 2020 Mr Dale was informed that the account opening process had been delayed because there were compliance issues arising from the Bank's "know your customer" policies. 8 On 9 November 2020 Mr Kapp sent an email to Mr Dale, copied to Mrs Kapp, which provided: Patrick, Hi spoke to the NAB re what they need to get our account open. I can't fix Litigation Finance in time, so: 1. I have transferred the 50 shares to the James Trust (the ultimate holding trust) 2. Maryann is one of the trustees of the James Trust; accordingly she owns the shares non‐beneficially (as trustee) 3. I have managed to update the ASIC records accordingly ‐ so company records and ASIC records are correct 4. I moved the registered office of EC to 50 Clarence Street and have updated records 5. NAB wants a copy of the James Trust Share Certificate. Attached for your signature!! I will get M to sign before we go to NAB. … 9 Later that afternoon Mr Dale did as he was asked by Mr Kapp and returned a signed copy of the share certificate showing Mrs Kapp as the holder of 50 ordinary shares in Embedded. 10 As foreshadowed in Mr Kapp's email of 9 November 2020 the records of Embedded were updated by the lodgement of an ASIC Form 484 "Change to company details" on the same day which recorded: a reduction in the shares held by Litigation Finance in Embedded, which it had held beneficially, from 50 shares to nil; and an increase in shares held by Mrs Kapp in Embedded from nil to 50 shares which she did not hold beneficially. Both of these changes were recorded as having occurred on 6 November 2020. 11 As the primary judge observed (at J [9]), although the transactions giving rise to the change in shareholding in Embedded were recorded in the ASIC Form 484 as having taken place on 6 November 2020, the share certificate issued to Mrs Kapp was dated 9 November 2020. As set out above, Mr Kapp did not ask Mr Dale to sign the share certificate until 9 November 2020 which, as the primary judge also observed, he did by email sent within two hours of lodgement of the ASIC Form 484. 12 These changes did not satisfy the Bank. On 26 November 2020 Mr Dale spoke with Shrenik Bhandary, an officer with the Bank, who informed him that the Bank was still having problems opening the account. This was because it could not verify the ultimate beneficial ownership of the 50 shares in Embedded now held by Mrs Kapp in her capacity as the trustee of the James Trust. Later that day Mr Dale sent an email to Mr Kapp which included: Philip, NAB's KYC team has pulled up the EC account opening based on inconsistencies in the EC corporate records vs the James Trust docs. In order for NAB to approve the account they are saying that it is OK for Maryann to not beneficially hold the EC shares (as it is currently) however the James Trust would need to be amended to reflect her as the sole trustee - at the moment the James trust has three trustees. Alternatives would be to amend the trust to show Maryann as the sole trustee or to change the EC shareholding to simply be in Maryann's name as the beneficial owner (the easy and quick option IMO). Regardless it is probably best you and Maryann speak directly with the NAB - Shrenick at 255 George St on XX XXXX XXXX. My bit of the KYC process has been approved. So we're 50% of the way there. 13 By email also sent on 26 November 2020 Mr Kapp responded to Mr Dale, copying in Mrs Kapp, in the following terms: Patrick, Hi that's really irritating‐ the James Trust has had a number of amendments since 2013, including removing the then 3 trustees. I gave them a bound copy of the trust deed and a separate copy of amendments. The (idiots/ morons) have not read the amendments! I will call and try and fix! 14 There was a further exchange between Messrs Dale and Kapp on 26 November 2020. Mr Dale responded to Mr Kapp's email saying "[y]ep, you need to speak with them" and Mr Kapp acknowledged Mr Dale's email by writing "[y]up". Once again Mrs Kapp was copied into Mr Kapp's response. 15 That afternoon Messrs Kapp and Dale spoke by telephone. During the course of their conversation Mr Dale said words to the following effect to Mr Kapp: I don't mind whether you transfer the shares to Maryann or you provided that it gets the bank account opened as soon as possible. 16 Several hours later on 26 November 2020 Mrs Kapp sent an email to Mr Kapp in which she wrote: Wouldn't the quickest and easiest option be to simply amend the EC shareholding to be just in my name? 17 Mrs Kapp's shareholding in Embedded was not amended in the way she suggested. Rather, as recorded in an ASIC Form 484 lodged on 27 November 2020 (27 November Form 484), Mrs Kapp's non-beneficial ownership of 50 shares in Embedded was reduced to nil and Mr Kapp's shareholding in Embedded increased from nil to 50 shares. The 27 November Form 484 recorded that these transactions took place on 26 November 2020 and that Mr Kapp's shares were held by him beneficially. It is this transfer of shares that was in issue before the primary judge. 18 Emails exchanged between Messrs Dale and Kapp on 2 and 3 December 2020 show, as the primary judge observed, that the steps which had been taken were considered by the Bank to be sufficient to address its concerns. 19 On 17 February 2021 50 shares in Embedded were transferred from Mr Kapp to Litigation Finance as the legal and beneficial owner.

the primary judge's reasons 20 The primary judge identified two questions to be answered by him, only the first of which arises for consideration on the appeal: whether Mr Kapp became beneficially entitled to 50 shares in Embedded on 26 November 2020. If the answer to that question was yes then those shares vested in the trustees pursuant to s 58(1)(b) of the Bankruptcy Act 1966 (Cth) as after acquired property. However, the primary judge answered the question "no" and found, based on the evidence, which his Honour described as "sparse", that Mr Kapp did not become beneficially entitled to those shares on 26 November 2020. 21 After setting out the evidence the primary judge noted two things. First, that what actually occurred was not directly known but the evidence comprised of: the changes to Embedded's share register; and Mr and Mrs Kapp's intention that on 26 November 2020 the designated owner of the 50 shares should also be their beneficial owner. Secondly, that Embedded and Aeris did not seek to rely on the provisions of the Corporations Act 2001 (Cth) which relate to the evidentiary effect of ASIC records: see J [19]-[20]. 22 The primary judge identified (at J [21]) that there were three possibilities for what in fact occurred: (a) Mr Kapp was unconcerned by legal formalities and simply adjusted the corporate records to meet his convenience so that the alterations to the share register do not reflect any underlying reality; (b) Mrs Kapp, as trustee of the James Trust, renounced the trust's interest in the 50 shares and, having done so, transferred them to Mr Kapp; or (c) Mrs Kapp, as trustee of the James Trust, transferred the shares to Mr Kapp without limitation. 23 His Honour did so after making the following factual finding at J [18]: Leaving aside for now the legalities, it is clear that the NAB bank account could not be opened unless the Bank knew the identity of the beneficial owner of the 50 shares. From Mr Kapp's perspective, he could not solve the problem with which he was confronted without putting up a person who beneficially owned the 50 shares. If intention be a relevant issue in the legal analysis, it is clear that both Mr Kapp and, if necessary, Mrs Kapp knew and intended that whoever ultimately held the shares would need to do so beneficially. I am satisfied this was so in Mrs Kapp's case because she was copied into the emails and because in her email of 26 November 2020, she volunteered herself to be the beneficial owner. 24 Therefore, the primary judge found that as between Mrs Kapp and Mr Kapp the intention was to transfer the shares to Mr Kapp beneficially. The question posed by his Honour, with respect correctly, concerned the factual possibilities as to what might have occurred given that intention and the need for the Bank to know the identity of the beneficial owner of the shares in order to be able to open the bank account. 25 As has been noted, his Honour identified a universe of three possibilities "for what in fact occurred". Importantly, the third of those possibilities, scenario (c), was described as a transfer "without limitation". In the context of the reasoning by the primary judge, that must mean without limitation as to the interest enjoyed by Mr Kapp as transferee. In other words, his Honour had in mind a factual scenario where Mrs Kapp purported to simply transfer the shares to Mr Kapp beneficially. 26 His Honour then considered which of the three scenarios occurred. After finding that scenario (b) was unlikely to have occurred, his Honour said (at J [23] and [25]) in relation to scenarios (a) and (c) that: 23 … As to (a), there is evidence that Mrs Kapp had previously used the corporate records of Embedded Claims to effect changes which did not reflect any actual transactions. The evidence includes the reasons for judgment of Ward CJ in Eq in Re Embedded Claims Pty Ltd [2021] NSWSC 969 ('Re Embedded Claims'). At [7]-[9] her Honour concluded that Mrs Kapp had lodged forms with ASIC which did not reflect events which had actually occurred including, relevantly, a form notifying ASIC that Mr Dale had resigned as a director of Embedded Claims. This does not prove that Mr Kapp is unconcerned by such formalities, however. … 25 As to (c), if this were the case the transfer would not have resulted in Mr Kapp owning the shares beneficially. Since he would have been fully on notice of the interests of the James Trust, he would have been bound by that interest. On this view, the recording that he held the shares beneficially would be wrong in law. 27 The primary judge was of the view that it was more likely than not that either scenario (a) or (c) was correct but that it was not necessary to determine which because they both led to the same conclusion, namely that Mr Kapp was never beneficially entitled to the 50 shares in Embedded. In each case the reason for that conclusion was that Mrs Kapp held the shares as trustee, a finding which is not disputed on the appeal, and could not simply transfer trust property to a third party. At J [26]-[27] his Honour said: 26 … If he (or perhaps Mrs Kapp) simply adjusted the share register to meet his need to identify a beneficial owner of the 50 shares without actually transacting the transfer to which he was purporting to give effect, then the reduction to Mrs Kapp's shareholding never happened and Mr Kapp likewise never received the 50 shares which the register suggests he did. 27 If, on the other hand, a transfer was completed then it was not possible for Mrs Kapp to transfer her 50 shares in Embedded Claims, encumbered as they were by the interests of the James Trust, without Mr Kapp being fully on notice of that fact. In that circumstance, he could not own the shares beneficially. 28 The primary judge declined to make the declarations sought by Embedded and Aeris and the orders amending Embedded's share register.

the appeal 29 The appellants raise a single ground of appeal: The primary judge erred in failing to find that the 50 shares in [Embedded Claims] recorded in the register kept by [ASIC] as beneficially owned by [Litigation Finance] have vested in the [trustees] by operation of s 58(1)(b) of the Bankruptcy Act 1966 (Cth).

The appellants' submissions 30 The appellants contend that the primary judge ought to have found that on 26 November 2020 Mrs Kapp transferred the 50 shares in Embedded to Mr Kapp beneficially and that his Honour's failure to come to that conclusion was the result of assigning no, or no material, evidentiary weight to the 27 November Form 484. That is, the appellants submitted that scenario (c) identified by the primary judge actually happened successfully. They made submissions as to why that was so principally by reference to scenarios (a) and (c). 31 As to scenario (a): (1) the appellants observed that the primary judge considered scenario (a) to be a possibility because of the findings in In the matter of Embedded Claims Pty Ltd [2021] NSWSC 969 (Embedded Claims SC) where Ward CJ in Eq (as her Honour then was) found that Mrs Kapp purportedly lodged documents with ASIC, after she had resigned as a director of Embedded, notifying ASIC that Mr Dale had resigned as a director. They submitted that it was hard to see how the finding in Embedded Claims SC could support giving any probabilistic weight to scenario (a) because it was a finding about Mrs Kapp in a very different context, which the primary judge seems to have recognised given his statement at J [23]; (2) more generally, the appellants submitted that the primary judge regarded the evidence on the question of whether the transfer occurred as limited to the changes to the share register of Embedded and Mr and Mrs Kapp's intention that the legal and beneficial ownership in the shares be the same. In that context, they submitted that the primary judge did not appear to have considered the 27 November Form 484 or given it any evidentiary weight, having regard to the statutory framework in which it was lodged and, in particular, the effect of s 178A(1) and s 1308(1) of the Corporations Act; and (3) the appellants contended that the primary judge should have inferred that Mr and Mrs Kapp's actions were taken in the knowledge that the lodging of a document required under the Corporations Act that is false is an offence. That is, his Honour should have relied on the presumption of regularity to draw an inference that the steps anterior to the lodgement of the 27 November Form 484 were undertaken regularly and as required. 32 As to scenario (c): (1) the appellants submitted that scenario (c) was an obvious way to transfer the shares from Mrs Kapp to Mr Kapp. They submitted that the primary judge's assumption that such a transfer was, or was likely, a breach of trust was an error and that there were a number of ways in which one commonly sees transfers of trust property without there being any breach of trust. They set out four examples: the power to distribute trust capital conferred by trust instrument; the power to distribute capital by way of advancement conferred by trust instrument and also by statute; the power conferred by trust instrument of amendment or to permit trustees to accelerate the vesting date or to appoint new discretionary beneficiaries; and with the consent of all beneficiaries, a distribution of trust capital absent the conferral of power in the trust instrument or amendment; and (2) the appellants contended that Mrs Kapp made the suggestion in her email to Mr Kapp on 26 November 2020 that "the quickest and easiest option" would be to amend the Embedded shareholding to be in her name alone (see [16] above), in her capacity as trustee of the James Trust and the Court would infer that, in doing so, she had informed herself about the terms of the trust and therefore made the suggestion having regard to what was permitted by the governing trust deed. The appellants submitted that if Mrs Kapp thought a transfer to herself beneficially was possible then it follows that it must have been possible for her, without breach of trust, to transfer the shares to Mr Kapp beneficially. 33 As to scenario (b), the appellants submitted that his Honour's finding that "the tenor of Mr Kapp's correspondence is inconsistent with this level of attention to the law of trusts", on which this scenario was rejected as a possibility, was erroneous for two reasons. First, because the relevant intention is that of Mrs Kapp. Secondly, because such correspondence as there was suggested that Mr Kapp was familiar with the James Trust.

Consideration 34 In substance, the case advanced on appeal was that his Honour should have found that there was a further possibility, namely a distribution in specie of the shares by Mrs Kapp as trustee to Mr Kapp as a beneficiary (or as a beneficiary introduced by amendment) in accordance with the requirements of the trust instrument. We will refer to this further possibility as scenario (d). It was contended by the appellants that his Honour erred in failing to infer from the available evidence that scenario (d) was correct and that the transfer to Mr Kapp occurred in conformity with the terms of the trust. On that basis, it was submitted that the relief sought should have been granted. In the alternative, it was claimed that his Honour should have found that scenario (b) was a lawful possibility and should have been preferred by drawing an inference of lawful behaviour over a conclusion of impropriety. 35 The appellants' contentions place considerable reliance on various principles of fact finding that prefer an inference of lawful conduct over an inference of wrong doing. However, each of those principles apply where there is no evidence tipping the balance one way or another. 36 This was not a case where the evidence was equally in favour of a finding that the transfer of the shares to Mr Kapp was being effected as a distribution in accordance with the requirements of the trust (scenario (d)) or as a renunciation of the trust's interest (scenario (b)) as it was in favour of possibilities (a) or (c). Therefore, it was not an occasion for choosing between equally open inferences one of which would lead to the conclusion that the conduct was lawful and the other that the conduct was unlawful. Nor, as explained at [50]-[54] below, was it a case in which the evidentiary conclusion that the share transfer to Mr Kapp occurred in accordance with the trust instrument might be drawn on the basis of regularity in the absence of any evidence to the contrary. 37 Rather, the primary judge was correct to find that the evidence led to the conclusion that it was more likely than not that scenario (a) or (c) was correct and that in either case the relief sought should be refused. That was because, although the evidence was sparse, for the reasons which follow, it supported the reasoning of the primary judge in concluding that what had occurred was not a lawful transfer of a beneficial interest in the shares to Mr Kapp in accordance with the requirements of the trust. For the same reasons, his Honour was correct not to include scenario (d) in the list of possibilities. 38 First, faced with the difficulties in opening the bank account for Embedded, Mrs Kapp's immediate response was to send an email to Mr Kapp saying: Wouldn't the quickest and easiest option be to simply amend the [Embedded] shareholding to be just in my name? 39 This is not the response of a trustee acting properly and with due deliberation as to whether the shares, as trust property, could be transferred to Mr Kapp beneficially. It is a response that is focussing upon what is quick and easy rather than on what the trust instrument may permit. It is not suggesting any type of distribution in specie of the shares being transactions of a kind that would require resort to the trust instrument to determine the circumstances in which they may occur (especially in one of the cases posited by the appellants to the effect that there could be some amendment to the trust instrument or some advancement of interest to allow a distribution to Mr Kapp in conformity with the trust obligations). 40 Secondly, the unchallenged finding of the primary judge was that there was evidence that Mrs Kapp had previously used the corporate records of Embedded "to effect changes which did not reflect any actual transactions": at J [23]. That he did so by reference to the decision in Embedded Claims SC, which was in evidence before him, does not impugn his Honour's approach. His Honour acknowledged the limitation of the findings in that decision for his own purposes. 41 Thirdly, even though Mr Kapp provided a bound copy of the trust deed to the Bank, after problems with opening the bank account were raised by the Bank by reference to the trust, there was no indication in the email exchanges thereafter of any concern on the part of Mrs Kapp (or Mr Kapp) to give effect to the trust or that the alternatives being considered were informed by the terms of the trust. 42 Fourthly, although Mrs Kapp held the shares in Embedded as trustee and it was the shareholders who were dealing with the Bank in order to open the bank account, the evidence shows that it was only Mr Kapp who dealt with the Bank. 43 Fifthly, after Mr Dale sent his email to Mr Kapp (copied to Mrs Kapp) about what the Bank required if Mrs Kapp was not to hold the shares in Embedded beneficially, Mr Dale had a conversation with Mr Kapp in which he said he did not mind whether the shares were transferred to "[Mrs Kapp] or to you provided it gets that bank account opened as soon as possible". Mr Dale did not suggest that these communications occurred by reference to the trust obligations. 44 Sixthly, well after the relevant documents were lodged with ASIC, Mr Bhandary of the Bank sent an email to Mr Dale (apparently in response to an inquiry from Mr Dale) in the following terms: Please find attached the Equifax Report (company search) for Embedded Claims Pty Ltd as requested. The document is password protected. This report is dated 30/11/202 and was used to complete KYC verifications on the company. The beneficial owners as per this report were: Patrick Arthur Dale & Philip Kapp This was confirmed by the both of you. 45 There is no suggestion in this response that the Bank was told that there was some distribution of the shares to Mr Kapp or that there was some other communication explaining how the transfer occurred in accordance with the trust instrument. This is a significant absence given the evidence to the effect that the Bank was informed that Mrs Kapp held the shares as trustee. The email indicates that the account was opened solely on the basis of an ASIC search together with a report from Mr Dale and Mr Kapp that Mr Kapp was the beneficial owner of the shares. Mr Dale did not deal with the attribution in the email of the source of the confirmation of the report to "both of you" (that is, both Mr Dale and Mr Kapp). 46 Seventhly, none of the particular ways in which there may have been a distribution in specie of the shares that were advanced on appeal (see [32(1)] above) were put to the primary judge as a particular version of events that was possible. Submissions of that kind would have invited consideration of the terms of the trust instrument and an explanation as to whether steps had been taken to obtain a copy. A distribution to Mr Kapp could only occur if that was in conformity with the terms of the trust instrument and in circumstances where Mr Kapp was a beneficiary (or there was some permitted alteration to the trust instrument to allow that to occur). There could be no error by the primary judge in failing to advert to the various scenarios posited on appeal in circumstances where there was no evidence to suggest that any of them had occurred and no means of determining whether they were permitted by the trust instrument. 47 Finally, we do not understand his Honour, when identifying the three factual scenarios, to have been saying that there was no legal possibility that there could be a form of dealing by which Mrs Kapp as trustee might transfer the shares to Mr Kapp beneficially. Rather, his Honour did not include that outcome in the available factual possibilities. His Honour described scenario (c) by using the words "without limitation". Those words were used to indicate a dealing in the shares in a manner that was not encumbered by the trust interest. For reasons that have been explained, the evidence, properly considered, indicated that there had not been regard to what the trust instrument required in arranging the transfer of the shares to Mr Kapp. On the evidence, a dealing of that kind was not a factual possibility and the primary judge was right to exclude it from the list of possibilities. Even if, contrary to that view, his Honour should have considered scenario (d), for reasons that have been given, on the evidence, it was not a possibility that had been made out to the requisite standard such that it might be concluded to be what in fact happened or amongst the likely possibilities as to what happened. 48 The primary judge was also correct to reject the possibility that Mrs Kapp renounced the interest of the trust in the shares (that is, scenario (b)). The primary judge considered this scenario to be unlikely, although possible, but thought it more likely than not that scenario (a) or (c) occurred. The appellants suggested that scenario (b) should not have been rejected. However, in our view, his Honour's findings which led to his discounting of this scenario were open to him. 49 While the relevant intention may have been that of Mrs Kapp in terms of effecting a renunciation of the trust's interest in the shares, the evidence before the primary judge was that Mr Kapp was the person in control of meeting the Bank's requirements and was driving that transaction. For example, Mrs Kapp's suggestion that the shares be transferred to her was not taken up. As for the correspondence it suggests that all individuals involved, including Mr Kapp, who liaised directly with the Bank, were focussed on meeting the Bank's requirements as quickly and simply as possible. While Mr Kapp referred to the Bank having a copy of the trust deed for the James Trust and the amendments to it, he goes no further to disclose or display any more detailed knowledge of what the deed permitted in terms of achieving the transfer of the beneficial interest in the shares to him. The primary judge's observations about the tenor of the correspondence were open to him. 50 For completeness, we address two further matters: the appellants' argument as to the application of the presumption of regularity in light of the statutory context; and the effect of s 1274B of the Corporations Act. 51 The Corporations Act sets out the requirements for the establishment and maintenance of a register of members. Relevantly: (1) section 168 requires a company to set up and maintain a register of its members; (2) section 169 provides for the information which must be recorded in the register; (3) section 178A(1) provides that a proprietary company must notify ASIC within the time determined under s 178D, 28 days, and in the prescribed form if it is required to make a change to the particulars in the register it maintains under s 169. The particulars which must be notified are, among other things, the name and address of a member, the number of shares allotted to a member and whether any of the member's shares are held beneficially; and (4) section 178A(2) provides that a failure to comply with s 178A(1) is an offence of strict liability. 52 At the time of lodgement of the 27 November Form 484, s 1308(1) of the Corporations Act provided that a person committed an offence if a document was lodged with ASIC and the person made or authorised the making of a statement or omission that the person knew made the document materially false or misleading. Section 1308(2) provided that a person committed an offence if the person authorised the making of a statement or omission that made the document materially false or misleading and the person did not take all reasonable steps to ensure that the document was not materially false or misleading. 53 The evidentiary presumption relied on by the appellants is explained in McLean Bros & Rigg Ltd. v Grice (1906) 4 CLR 835. At 844 Griffiths CJ identified the fact to be proved for the purposes of that case to be whether ten or more members of the company, in person or by proxy holding in the aggregate not less than 10,000 shares, were present at a shareholders' meeting at which a resolution for the voluntary winding up of the company was passed. The plaintiffs set about proving that to be the case by direct evidence from people present at the meeting and by presumptive evidence arising from subsequent transactions. As to the latter, among other things, the plaintiffs relied on the presumptive evidence arising from records of transactions required to be kept by law. At 848 his Honour referred to s 54 of the Companies Act 1890 (Vic) which required that, when a special resolution was passed by a company, a copy of it was to be printed and forwarded to the Registrar-General and recorded by him and s 118 which required that notice of any special resolution or extraordinary resolution for the winding up of a company voluntarily was to be advertised in the Government Gazette. His Honour continued: It was proved that the resolution was recorded in writing, and signed by the chairman, and that a copy was sent to the Registrar-General and recorded by him, and that a copy was published in the Government Gazette. This, in my opinion, is prima facie evidence that all that took place at that meeting was done lawfully. The presumption against fraud may also be called in aid. Here was a duty to be performed, on failure to do which the company was liable to a penalty. If the chairman sent a document purporting to be a copy of such a resolution, and it was untrue that such a resolution had been passed, it was a fraud upon the law, whether it could be punished by criminal proceedings or not. It has been held by the Court of King's Bench in England that the registered copy of the resolution is sufficient evidence of the due passing of the resolution. I should be prepared so to hold without hesitation in the absence of any authority. … See too Dawson v Westpac Banking Corporation Limited (1991) 66 ALJR 94; [1991] HCA 52 at 99 (per Mason CJ). 54 There is nothing to suggest that the primary judge did not proceed having regard to such an evidentiary presumption. Indeed the contrary emerges from his Honour's reasons. At J [2], after referring to the 27 November Form 484, his Honour stated that "[o]rdinarily, it might be inferred that Mrs Kapp had simply transferred her shares to her husband" but continued noting that the matter was complicated "because the same document also records that Mrs Kapp did not own the shares beneficially". His Honour then set out the available evidence and made findings in relation to it before identifying and expressing views about the three scenarios. 55 His Honour was, it seems, not prepared to rely on the presumption of regularity given other known facts, including that Mrs Kapp did not hold the shares beneficially, to conclude that the transaction recorded in the 27 November Form 484 occurred. 56 Although they did not do so before the primary judge, on the appeal the appellants relied on the statutory presumption in s 1274B(2) of the Corporations Act which provides: In a proceeding in a court, a writing that purports to have been prepared by ASIC is admissible as prima facie evidence of the matters stated in so much of the writing as sets out what purports to be information obtained by ASIC, by using a data processor, from the national database. In other words, the writing is proof of such a matter in the absence of evidence to the contrary. 57 The appellants relied on an ASIC search which they had tendered and which recorded that Mr Kapp formerly held 50 shares in Embedded beneficially. They submitted that the statement that Mr Kapp was formerly beneficially entitled to 50 shares in Embedded purported to be "information obtained by ASIC". That information was the 27 November Form 484. 58 The effect of s 1247B(2) of the Corporations Act is that the writing prepared by ASIC, in this case the search of Embedded, is prima facie evidence of Mr Kapp having held 50 shares in Embedded beneficially and is evidence on which the Court is entitled to act as proof in the absence of evidence to the contrary: see Barboutis v The Kart Centre Pty Ltd [No 2] [2020] WASCA 41 at [42]-[45]. However, here there was evidence to the contrary. That was the information in the 27 November Form 484 itself that Mrs Kapp did not hold the 50 shares beneficially and on their transfer Mr Kapp held those shares beneficially, coupled with the evidence referred to by the primary judge at J [11]-[17] which led to the primary judge's finding (at J [18]) that Mr and Mrs Kapp intended that whoever ultimately held the 50 shares would need to do so beneficially. That is sufficient evidence to the contrary which displaces the 27 November Form 484 as prima facie evidence of Mr Kapp holding the shares in Embedded beneficially.

conclusion 59 The appeal should be dismissed with no order as to costs. 60 We will make orders accordingly. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Markovic, Colvin and Thawley.

SCHEDULE OF PARTIES NSD 742 of 2022 Appellants Second Appellant AERIS CAPITAL PTY LIMITED Respondents Fourth Respondent: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION