Low (Liquidator) v Hughes [2026] FCA 71 | Case summary

[2018] FCA 385Low (Liquidator) v Hughes [2026] FCA 71 | Case summary | Zoe

[83]

(3) Where an application for an injunction under subsection (1) or (2) has been made, the Court may, if the Court determines it to be appropriate, grant an injunction by consent of all the parties to the proceedings, whether or not the Court is satisfied that that subsection applies.

(4) Where in the opinion of the Court it is desirable to do so, the Court may grant an interim injunction pending determination of an application under subsection (1).

(5) The Court may discharge or vary an injunction granted under subsection (1), (2) or (4).

(6) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised:

(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; and

(b) whether or not the person has previously engaged in conduct of that kind; and

(c) whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person engages in conduct of that kind.

(7) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised:

(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; and

(b) whether or not the person has previously refused or failed to do that act or thing; and

(c) whether or not there is an imminent danger of substantial damage to any person if the first‑mentioned person refuses or fails to do that act or thing.

(8) Where ASIC applies to the Court for the grant of an injunction under this section, the Court must not require the applicant or any other person, as a condition of granting an interim injunction, to give an undertaking as to damages.

(9) In proceedings under this section against a person the Court may make an order under section 1323 in respect of the person.

(10) Where the Court has power under this section to grant an injunction restraining a person from engaging in particular conduct, or requiring a person to do a particular act or thing, the Court may, either in addition to or in substitution for the grant of the injunction, order that person to pay damages to any other person.

[84]

I will say more about this provision later in these reasons. For now, it is enough to note the following. Firstly, s 1324(1) operates where a person has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute at least one of the forms of conduct in paras (a) to (f) of that section. That conduct includes conduct amounting to a contravention of the Corporations Act (s 1324(1)(a)), but it also includes, relevantly, conduct that amounts to 'aiding' and 'abetting' a person to contravene the Corporations Act (s 1324(1)(c)), as well as 'being in any way, directly or indirectly, knowingly concerned in, or party to' such a contravention (s 1324(1)(e)). Proof that a person has, is, or is proposing to engage in such conduct enlivens a Court's power to grant the injunctive relief referred to in s 1324(1), against that person.
Secondly, s 1324(10) provides that where a Court has power under s 1324 to grant an injunction, the Court may, 'either in addition to or in substitution for the grant of the injunction, order that person to pay damages to any other person'. A Court has the power to grant an injunction under subss (1), (2) and (4) of s 1324. Respectively, those subsections confer power on a Court to grant an injunction to restrain a person from engaging in certain conduct (together with an ancillary power to require the person to also do any act or thing), to require a person to do an act or thing that the person is required to do by the Corporations Act, and to grant an interim injunction pending determination of an application for an injunction under s 1324(1).
The Court also has the power to grant an injunction under s 1324(3) where, on an application for an injunction under subss (1) or (2) of s 1324, all parties to the proceedings consent and where the Court determines that it is appropriate.
Based on allegations that the Pitcher Parties engaged in the sort of conduct referred to in paras (c) and (e) of s 1324(1), the plaintiffs seek the following relief against the Pitcher Parties under subss (1) and (10) of s 1324, as set out in paras 5 to 10 of the amended originating process (originating process):

[87]

In circumstances in which Titan has been in liquidation since February 2019, it is obvious that the plaintiffs are not pursuing the Pitcher Parties in these proceedings with the sole objective of obtaining the injunctive relief that is the subject of paras 5 to 8 of the originating process. Injunctive relief, of itself, would provide the plaintiffs and Titan's creditors with cold comfort. Instead, it may be inferred that the plaintiffs' real objective is to obtain the orders that are set out in paras 9 and 10 of the originating process, requiring the Pitcher Parties to pay damages to Titan 'that resulted from each of the contraventions of ss 180 and 588G of the [Corporations Act]'.
It will be noted from the above extracts that ss 180(1) and 588G(2) are both 'civil penalty provisions'. The civil consequences under the Corporations Act for contravening a civil penalty provision are set out in Pt 9.4B of that Act. I will say more about Pt 9.4B of the Corporations Act later in these reasons. For now, it is enough to note that one of the civil consequences provided for by that Part is that a Court may make an order under s 1317H requiring a person to compensate a corporation for damage suffered by the corporation where the person contravened a civil penalty provision and the damage resulted from the contravention.
However, and as the plaintiffs appear to accept, Titan cannot obtain a compensation order under s 1317H for any damage resulting from the Titan directors' alleged contraventions of ss 180(1) and 588G(2) against anyone other than those directors. At the time the Pitcher Parties are alleged to have aided or abetted, or to have been directly or indirectly, knowingly concerned in, or party to, a contravention of either ss 180(1) or 588G(2), a person who was 'involved in a contravention' of those sections, as defined in s 79 of the Corporations Act, was not taken to have contravened those sections. Section 79 provides that a person is 'involved in a contravention' if, and only if, the person:

[97]

Several preliminary observations can be made about the separate question.
Firstly, the separate question proceeds on the assumption that all of the facts alleged in the statement of claim have been proved. However, while the plaintiffs' case against the Pitcher Parties is based on an allegation that they were 'complicit' in contraventions by the Titan directors of ss 180(1) and 588G(2), for the purposes of paras (c) and (e) of s 1324(1), the plaintiffs have not expressly pleaded the relevant state of the Pitcher Parties' corporate minds necessary to establish that they were so complicit. I will say more about this issue later in these reasons. For now, it is enough to note that the plaintiffs are required to establish that the Pitcher Parties intentionally participated in the Titan directors' alleged contraventions: Yorke v Lucas (1985) 158 CLR 661 at 667 to 668 (Mason ACJ, Wilson, Deane and Dawson JJ).
This deficiency in the pleadings was pointed out to counsel for the plaintiffs at the hearing of the separate question. However, as the plaintiffs plead, in a conclusionary way, that the Pitcher Parties were, directly or indirectly, knowingly concerned in, or party to, or that they aided and abetted, the Titan directors' contraventions of s 588G(2) (at paras 60 and 61 of the statement of claim), and that the Pitcher Parties were, directly or indirectly, knowingly concerned in, or party to, the Titan directors' contraventions of s 180(1) (at paras 124 to 128 of the statement of claim), I will proceed on the assumption that the necessary state of mind has been pleaded. I also note that the Pitcher Parties did not, in any event, suggest that the separate question should be answered adversely to the plaintiffs because the necessary state of mind has not been expressly pleaded.
Secondly, it is evident that the power to make an order under subss (1) and (10) of s 1324 is discretionary. However, the separate question does not ask whether the Court 'would' or 'should' grant that relief in the exercise of its discretion. Instead, the separate question asks whether the plaintiffs could be granted any of the relief referred to in the question. In that regard, and as the plaintiffs correctly submitted, the separate question is concerned with whether, based on the facts pleaded by the plaintiffs, the Court has the power to grant that relief.
Thirdly, although the separate question is expressed as one question, there are in fact two questions to be answered. In that regard, the separate question is better expressed in the following way:

[107]

Secondly, an application for an order under s 1324(1) must be made by either the Australian Securities and Investments Commission (ASIC) or by 'a person whose interests have been, are or would be affected by the conduct'.
The first precondition that I have identified may be dealt with in short order. For the purposes of answering the separate question only, there is no real dispute that this precondition would be satisfied if the pleaded facts in the statement of claim were to be established. Although the plaintiffs have not expressly pleaded that the Pitcher Parties had the state of mind necessary to prove that they were relevantly 'complicit' in any of the Titan directors' alleged contraventions of ss 180(1) and 588G(2), they have pleaded conclusionary facts that are sufficient for the purposes of answering the separate question.
The second precondition raises a question about whether either or both plaintiffs are 'persons whose interests have been, are or would be affected by' the relevant conduct. Section 1324(1A) provides that contraventions of certain specific provisions of the Corporations Act are, in effect, deemed to affect the interests of a creditor or a member of a company for the purposes of s 1324(1). However, it is not suggested that s 1324(1A) applies in the circumstances of this case.
In McCracken v Phoenix Constructions (Qld) Pty Ltd [2012] QCA 129; (2013) 2 Qd R 27 at [34], Fraser JA (with whom White JA and Applegarth J agreed) observed that the weight of authority supports a broad construction of the expression 'persons whose interests have been, are or would be affected by the conduct' in s 1324(1): citing Broken Hill Proprietary Co Ltd v Bell Resources Ltd (1984) 8 ACLR 609 at 613 to 614; QIW Retailers Ltd v Davids Holdings Pty Limited (No 2) [1992] FCA 344; (1992) 37 FCR 57 at 59 to 61; Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd [2009] FCAFC 147; (2009) 180 FCR 11 at [109] to [111] (Sundberg and Dowsett JJ); and Oates v Hawkins [2010] NSWSC 491 at [65] to [69].
In Broken Hill Hampel J said, at 613, that he was of the view that the 'interests' that were referred to in s 574(1)(b) of the Companies Act 1981 (Cth), a predecessor to s 1324(1), are the interests of any person, including a corporation, that go beyond the mere interests of a member of the public. Further, his Honour said that it is not necessary that personal rights of a proprietary nature, or analogous rights, are or may be affected, and it did not need to be shown that any special injury had occurred. This 'test' was applied by Sundberg and Dowsett JJ in Brookfield Multiplex at [110] to [112], and it has subsequently been applied by other courts: see, for example, BPESAM IV M Limited v DRA Global Limited [2020] FCA 738 at [231] to [235]; and Brusa v Brusa [2020] WASC 362 at [49].
On the assumption that the Pitcher Parties' alleged conduct does fall within paras (c) or (e) of s 1324(1), and they were therefore relevantly complicit in contraventions by the Titan directors of ss 180(1) and 588G(2), then Titan is clearly a person whose interests have been, are or would be affected by that conduct.
The plaintiffs submit that Ms Low is also a person whose interests have been, are or would be affected by the Pitcher Parties' complicit conduct. It is argued that this is because she has statutory obligations to investigate breaches of duties committed by those in charge of Titan before it went into liquidation, to report contraventions of the Corporations Act to ASIC, and to bring in the assets of Titan. I also note that it might be argued that Ms Low's interests are being affected because her interests in effecting recovery from the Titan directors under s 588M(2), for any loss and damage suffered by Titan as a consequence of insolvent trading, continue to be affected by the Pitcher Parties having been complicit in the alleged contraventions of s 588G(2) by the Titan directors.
As I am of the view that Titan has, in any event, 'standing' to apply for an injunction under s 1324(1), and bearing in mind the broad construction that has been preferred in relation to the expression 'persons whose interests have been, are or would be affected by the conduct', I will proceed on the assumption that Ms Low has a right that is independent of Titan's right to apply for an injunction under s 1324(1). As will be seen, it is unnecessary to finally determine this issue in answering the separate question.
If the plaintiffs have standing to make an application for an injunction under s 1324(1) then it necessarily follows that they also have standing to apply for an order under s 1324(10). This is at least because s 1324(10) provides, in effect, that a Court may order that a person pay damages to any other person 'in addition to or in substitution for the grant of an injunction' under s 1324(1).

[115]

Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342; (2015) 235 FCR 181 (ActiveSuper) may be added to the 'ample authority' to which Reeves J referred. In ActiveSuper, White J referred to Storm Financial as well as to Re Idylic Solutions [2013] NSWSC 106 at [66] and [69] and observed that the Court may grant a permanent injunction even when a winding up order has already been made against a corporate defendant. His Honour also noted, at [623] that an injunction granted in those circumstances under s 1324(1) may serve to mark the Court's disapproval of conduct and operate as a deterrent to others. Those observations have been subsequently referred to and applied in Australian Securities and Investments Commission v M101 Nominees Pty Ltd (No 3) [2021] FCA 354 at [410] and, more recently, in Australian Securities and Investments Commission v NGS Crypto Pty Ltd (No 5) [2025] FCA 1611 at [157], [160] to [162].
However, the Pitcher Parties submit that for various reasons the authorities on which the plaintiffs rely provide inadequate support for a conclusion that an injunction may be granted under s 1324(1) in circumstances in which there is no likelihood of similar conduct occurring in the future, at least where the application for an injunction has not been made by ASIC. I do not accept that submission.
In ActiveSuper at [622], White J said that the jurisdiction the Court exercises under s 1324 is statutory and the Court's power is not confined by the considerations that would be applicable if it were exercising its traditional equity jurisdiction. I understand that one of the considerations to which White J alluded included that an injunction will not ordinarily be granted in circumstances in which the making of such an order would likely be futile and serve no purpose. However, as Austin J said in ASIC v Parkes [2001] NSWSC 377 at [9], the text of s 1324 makes it clear that an injunction may be granted in the exercise of the Court's discretion even if there is no threat of repetition of the contravention. In that regard, s 1324(6)(a) expressly provides that the power of the Court to grant an injunction restraining a person from engaging in conduct with which s 1324 is concerned may be exercised whether or not it appears to the Court that the person 'intends to engage again, or to continue to engage, in conduct of that kind'. The obvious purpose of s 1324(6)(a) is to make it clear that the power conferred by s 1324(1) to restrain certain conduct may be exercised by a Court in its discretion, regardless of whether the person sought to be enjoined intends to again engage in, or to continue to engage in conduct of that kind.
Nevertheless, a Court should have regard to whether an injunction will have some utility or whether it will serve some purpose within the contemplation of the Corporations Act in considering whether to exercise its discretion under s 1324(1): ActiveSuper at [622]; Australian Securities and Investments Commission v Macro Realty Developments Pty Ltd [2016] FCA 292 (Macro Realty) at [53] to [54]. Of course, if granting an injunction under s 1324 would mark the Court's disapproval of certain relevant conduct or operate as a deterrent to others, then it may have that necessary utility or purpose.
However, the separate question is concerned only with the issue of whether the Court has the power to make the orders sought by the plaintiffs, not with the question of whether the Court should or would exercise its discretion to make those orders. While the prospect of the Pitcher Parties engaging in the conduct that the plaintiffs seek to enjoin is a matter that may ultimately be relevant to whether the Court should exercise its discretion, it does not mean that the Court does not have power to make an order under s 1324(1).
The Pitcher Parties also submit that if the Court has the power to grant an injunction against a person under s 1324(1) where there is no prospect that the person will ever again engage in the conduct sought to be enjoined, then it can only do so on an application being made by ASIC. However, that construction has no foothold in the text of s 1324. Specifically, there is nothing in the words used in s 1324 that support a conclusion that, where there is no risk that relevant conduct will be repeated, injunctive relief may only ever be granted on an application made by ASIC. Nevertheless, it may be accepted that when an application is made by ASIC rather than a private litigant under s 1324(1), to restrain conduct that is unlikely to be repeated, the Court may be more likely to give greater weight to the question of whether the injunction will serve a purpose within the contemplation of the Corporations Act: ActiveSuper at [622]; and Macro Realty at [53].
As I have already said, the power to grant an injunction under s 1324(1) is enlivened upon proof that a person 'has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute' at least one of the forms of conduct referred to in paras (a) to (f) of that provision. In that context, it is important to note that by paras 5 and 7 of the originating process the plaintiffs seek orders restraining the Pitcher Parties from 'negotiating payment arrangements with the [CoT] for and on behalf of [Titan]'. Accordingly, the issue that arises is whether the negotiation of such payment arrangements is 'conduct' in respect of which the power in s 1324(1) could be exercised to grant the injunction sought.
In Australian Securities & Investments Commission v McDougall [2006] FCA 427 (McDougall), Young J dealt with an application made by ASIC in which it sought relief in respect of an unregistered managed investment scheme. Amongst the various forms of relief sought, ASIC applied for injunctions under s 1324(1). In addition to orders permanently restraining the defendants in that case from further operating or promoting the scheme, ASIC also sought broader orders restraining them from carrying on a business in relation to financial products or financial services, carrying on any business related to, concerning or directed to a managed investment scheme, and being in any way, directly or indirectly, knowingly concerned in, or party to, the promotion or establishment of, or the carrying on of the business of, a managed investment scheme.
After observing that the orders sought by ASIC extended beyond the conduct of the managed investment scheme that was the subject of the proceedings, and noting that s 1324(1) was expressed in wide terms, Young J said the following at [64]:

[122]

The plaintiffs contend that, to the extent Dowsett J's statements suggest that s 1324(1) only authorises the restraint of 'unlawful conduct', those statements are wrong. The plaintiffs are forced to take this position because the negotiation of payment arrangements with the CoT is of course not, of itself, unlawful conduct.
I accept that s 1324(1) does not only authorise a grant of injunctive relief restraining a person from engaging in conduct that is unlawful. In my view, the power conferred by s 1324(1) is broader, authorising the making of orders restraining a person from engaging in the conduct referred to in paras (a) to (f) of s 1324(1), irrespective of whether such conduct also happens to be 'unlawful'. Section 1324(1) does not, of itself, render conduct unlawful, although it is obvious that conduct of the sort referred to in paras (a) to (f) will usually also have that quality. Nevertheless, and for the following reasons, I do not accept that the Court has power to grant the injunctions sought by the plaintiffs to restrain the Pitcher Parties from negotiating payment arrangements with the CoT for and on behalf of Titan.
Section 1324(1) relevantly provides that a Court may grant an injunction 'restraining the first‑mentioned person from engaging in the conduct' (emphasis added). The reference to the 'first‑mentioned person' in s 1324(1) is a reference to the person who 'has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute' one of the various forms of conduct in paras (a) to (f) of s 1324(1).
The phrase 'engage in conduct' is defined in s 9 of the Corporations Act to mean: (a) do an act; or (b) omit to perform an act. This definition reflects the definition of the same phrase that appears in s 4.1 of the Criminal Code 1995 (Cth), which is concerned with identifying what are known as the 'physical elements' of an offence under the Criminal Code, which relevantly focus on a person's acts and omissions. Therefore, based only on the statutory definition of 'engage in conduct', it may appear at first blush that when s 1324(1) speaks of a person engaging in conduct, it is referring only to that person's acts or omissions. However, s 6(1) of the Corporations Act provides that the provisions in Pt 1.2 of that Act, of which s 9 is one, have effect for the purposes of the Act except so far as the contrary intention appears in the Act.
In my view, the contrary intention does appear in s 1324(1), with the result that the phrase 'engage in conduct', and its analogues, must be given a broader meaning for the purposes of that provision. On that broader meaning, 'engage in conduct' refers to a person's acts and omissions, as well as any relevant state of mind that must accompany those acts and omissions to 'constitute' the various forms of conduct referred to in paras (a) to (f) of s 1324(1). That the phrase 'engage in conduct' must be understood in this way is made apparent by the immediate context in which it appears. To explain why, it is necessary to begin with Yorke v Lucas, a case to which I have already referred, in which the High Court had occasion to construe s 75B of the Trade Practices Act. That section provided that a reference to a person 'involved in a contravention' of that Act was required to be read as a reference to a person who:

[126]

In that regard, reference may also be made to Giorgianni v The Queen [1985] HCA 29; (1985) 156 CLR 473, a case involving culpable driving, in which Wilson, Deane and Dawson JJ held, at 500, that to aid, abet, counsel or procure a principal offence a person must have intentionally participated in the principal offence and so must have had knowledge of the essential matters which went to make up the offence.
It was also held in Yorke v Lucas, at 670, that the proper construction of the words 'has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention', which appeared in s 75B(c) of the Trade Practices Act, and which relevantly mirrors s 1324(1)(e) of the Corporations Act, 'requires a party to a contravention to be an intentional participant, the necessary intent being based upon knowledge of the essential elements of the contravention'. It may be noted that in Gore v Australian Securities and Investments Commission [2017] FCAFC 13; (2017) 249 FCR 167 at [6] to [8], [16] (Dowsett and Gleeson JJ) and at [165] to [166] (Rares J) the Full Court confirmed that accessorial 'liability' under s 1324(1)(e) requires proof of the relevant person's knowledge.
Having regard to the obvious textual similarities between s 1324(1) of the Corporations Act and s 75B of the Trade Practices Act, it is clear that a person will also only engage in conduct that constitutes aiding or abetting a contravention of the Corporations Act, and that constitutes being directly or indirectly, knowingly concerned in, or party to, such a contravention, if they do or omit to do an act with the requisite intention and knowledge, as explained in Yorke v Lucas.
As the plaintiffs properly accept, the future negotiation of payment arrangement with the CoT by the Pitcher Parties for and on behalf of Titan would not, on its own, amount to a contravention of the Corporations Act, or to conduct constituting aiding or abetting, or being directly or indirectly, knowingly concerned in, or party to, such a contravention. Nevertheless, the plaintiffs submit that when that conduct is put in its 'proper and complete context' it does fall within paras (c) and (e) of s 1324(1). However, and as I have sought to explain, for the act of negotiating payment arrangements to amount to conduct that constitutes aiding or abetting a contravention by a Titan director of ss 180(1) or 588G(2) of the Corporations Act, or being directly or indirectly, knowingly concerned in, or party to, such a contravention, the 'proper and complete context' that is relevant in the circumstances of this case is that the negotiation of payment arrangements must be those carried out by an intentional participant in such a contravention.
By paras 5 and 7 of the originating process, the plaintiffs seek to restrain the Pitcher Parties from the act of negotiating payment arrangements with the CoT for and on behalf of Titan, irrespective of whether the Pitcher Parties carry out such an act as an intentional participant in a relevant contravention by a Titan director of ss 180(1) or 588G(2). Accordingly, those orders would, if made, enjoin the Pitcher Parties from engaging in conduct that would not fall within either paras (c) or (e) of s 1324(1). It follows that the Court does not have the power to make the orders sought in paras 5 and 7 of the originating process.
It may be seen that the above analysis does not depend on the conduct that is the focus of s 1324(1) being characterised as 'unlawful'. This is because the critical question is whether the particular conduct relied upon, and which is sought to be restrained, is 'conduct that constituted, constitutes, or would constitute' the conduct referred to in any of paras (c) or (e) of s 1324(1), irrespective of whether that conduct may also bear the quality of unlawfulness. To the extent that the reasons of Dowsett J in Cassimatis (No 9) may suggest otherwise, I respectfully disagree. However, it appears to me that the real effect of what was said in Cassimatis (No 9) is that s 1324(1) confers on a Court the power to grant an injunction to restrain a person from engaging in the range of conduct enumerated in paras (a) to (f) of s 1324(1), and that conduct alone. In other words, it does not confer a power to restrain other conduct even if it has a 'sufficient nexus' with any of the species of conduct referred to in paras (a) to (f) of s 1324(1).
I note that Cassimatis (No 9) was referred to by the Full Court in Mawhinney at [22] to [23]. However, the issue to which I have just referred was not considered.
The plaintiffs also rely on s 1324(1) as the source of this Court's power to make the orders in paras 6 and 8 of the originating process. However, and as I have already sought to explain at [56] of these reasons, an order may only be made under s 1324(1) requiring a person to do any act or thing if a Court also grants an injunction restraining that person from engaging in relevant conduct. As I have concluded that the Court does not have the power to grant the injunctions sought in paras 5 and 7 of the originating process, it follows that it also does not have the power to grant the injunctions sought in paras 6 and 8 of the originating process.
There is a further consequence of my conclusion that the Court does not have the power to grant the injunctions sought in paras 5 and 7 of the originating process. As the plaintiffs accept, s 1324(10) does not create a freestanding right to an award of damages. The express terms of s 1324(10) make it clear that the power to make an order that a person pay damages is enlivened only if the Court has power under s 1324 to grant an injunction. As Bryson J said in GE Capital Australia v Davis [2002] NSWSC 1146 at [61], where there is no prospect of the grant of an injunction under s 1324(1), there is no room under s 1324(10) for an order requiring the payment of damages.
As the Court does not have the power to grant the injunctions sought by the plaintiffs, it follows that a necessary precondition to the exercise of the power in s 1324(10) does not exist. This means that the Court also does not have the power to make the orders sought in paras 9 and 10 of the originating process.
The conclusions I have reached to this point are a sufficient reason to answer the first part of the separate question in a manner adverse to the plaintiffs. However, there is a further and independent reason why I am of the view the Court does not have power to make the orders sought in paras 9 and 10 of the originating process, irrespective of whether it has the power to grant the injunctions sought in paras 5 to 8. This reason is based on what I consider to be the proper construction of s 1324(10), an issue the parties addressed in detail.
The well-established general principles that apply to the task of statutory construction were recently reiterated by the Full Court in Charlie v Queensland [2025] FCAFC 55; (2025) 309 FCR 345 at [27] to [32]. Those principles emphasise that statutory construction is concerned with the attribution of meaning to statutory text while, at the same time, having regard to the context in which the relevant provision appears and its purpose. In Charlie, reference was also made to the following regularly cited passage taken from the joint judgment of Kiefel CJ, Nettle and Gordon JJ in SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 at [14]:

[128]

According to its text, s 1324(10) confers a discretion to make an order that a person pay damages to any other person. That discretion is enlivened when the Court has the power under s 1324 to grant an injunction, including an injunction under s 1324(1) 'restraining a person from engaging in particular conduct, or requiring a person to do a particular act or thing'. The power to grant an injunction under s 1324 is plainly remedial in character.
In this case the plaintiffs seek an order under s 1324(10) that the Pitcher Parties pay to Titan 'an amount equal to the damage suffered by [Titan] that resulted from each of the contraventions after 1 July 2017 of sections 180 and 588G of the [Corporations Act]'. However, the Pitcher Parties submit that on the proper construction of s 1324(10), the Court does not have the power to make such an order. More specifically, the Pitcher Parties say that even if they did aid or abet, or were directly or indirectly, knowingly concerned in, or party to, a relevant contravention of ss 180(1) or 588G(2), the Court does not have the power to make an order under s 1324(10) that they pay the damages sought. In support of that argument, the Pitcher Parties draw attention to the fact that the Corporations Act regulates, and limits, in various ways the claims that may be made for damages for contraventions of ss 180(1) and 588G(2). Specifically, they refer to Pt 9.4B of the Corporations Act, which deals with the civil consequences of contravening a civil penalty provision, including ss 180(1) and 588G(2). Under s 1317H, which appears in Pt 9.4B, a person may be ordered to compensate a corporation for 'damage suffered' by the corporation if the person has contravened a relevant civil penalty provision and the damage 'resulted from the contravention'.
However, the Pitcher Parties refer to the fact that s 1317J(4) provides that only ASIC and the corporation may apply for such a compensation order. Further, s 1317K imposes a time limit of six years for making an application for a compensation order. The Pitcher Parties then emphasise that at the time they are alleged to have been complicit in the Titan directors' breaches of ss 180(1) and 588G(2), a compensation order could not have been made under s 1317H against a person found to have aided or abetted, or to have been directly or indirectly, knowingly concerned in, or party to, a contravention of either of those provisions, a matter that I have already alluded to at [21] to [26] of these reasons. It is on this basis that it is contended, in effect, that a deliberate legislative choice was made to exclude the possibility of compensation being paid under the Corporations Act by a person found to have been complicit in a contravention of ss 180(1) or 588G(2), including damages being awarded under s 1324(10).
The Pitcher Parties argue that their contentions are supported by authority, placing particular reliance on the decision of the Queensland Supreme Court of Appeal in McCracken, as well as on subsequent first instance decisions, namely, In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 (Colorado Products) at [401] to [402]; Seaman v Silvia [2018] FCA 97 at [48] to [53]; and Saffari v Latitude Financial Services Australia Holdings Pty Ltd [2024] FCA 573 at [43].
On the other hand, the plaintiffs submit that the Pitcher Parties' construction of s 1324(10) should not be accepted. They say, in effect, that Pt 9.4B is not a code for awarding compensation for contraventions of civil penalty provisions and that s 1324(10) should not be read down in the way the Pitcher Parties contend. In that regard, the plaintiffs rely on the decision of the Full Court of the Supreme Court of South Australia in Macks v Viscariello [2017] SASCFC 172; (2017) 130 SASR 1, in which it was relevantly concluded, at [749] that the provisions in Pt 9.4B of the Corporations Act did not impliedly exclude the Court's power under s 31 of the Supreme Court Act 1935 (SA) to grant declaratory relief to the effect that civil penalty provisions such as ss 180 to 182 have been contravened. The plaintiffs also submit that the notion that Pt 9.4B is a code is at odds with what was actually decided in McCracken.
The plaintiffs contend that the Pitcher Parties have misunderstood what was actually decided in McCracken and in the subsequent decisions citing that case. The plaintiffs say that McCracken does not assist the Pitcher Parties because it was a case that was concerned with whether a director of a company could be ordered under s 1324(10) to pay damages to a creditor of that company for breach of duties owed to the company, in circumstances in which the creditor's claimed loss was found to have been 'merely derivative' of the company's loss.
It is necessary to examine the reasoning employed in McCracken in some detail because of the importance of that case in determining whether this Court has the power to make the orders sought by the plaintiffs in paras 9 and 10 of the originating process.
McCracken was a decision of an intermediate state Court of Appeal concerning the interpretation of Commonwealth legislation. Accordingly, I should not depart from that decision unless I am convinced the Court's interpretation of s 1324(10) is 'plainly wrong' or 'unless there is a compelling reason to do so': Hill v Zuda Pty Ltd [2022] HCA 21; (2022) 275 CLR 24 (Zuda) at [25]. Accordingly, it will be necessary to identify the Court's preferred construction of s 1324(10) in McCracken with some care. Further, although I am not bound to follow any obiter dicta in the reasons of the Queensland Supreme Court of Appeal, I must proceed on the basis that they are ordinarily expected to be given 'great weight': Zuda at [26].
To understand what was actually decided in McCracken it is necessary to begin with a brief overview of the relevant factual context in which that case was determined.
The appellant in McCracken was the sole director of a company called Coastline Constructions Pty Ltd (Coastline). Coastline had been in a joint venture with the appellant's wife to develop residential units on land she owned. Under the joint venture agreement, Coastline acquired rights over and in respect of the land such that it was arguable that it had a beneficial interest in the land.
Coastline entered into a construction contract with the respondent to build a unit complex on the land. However, the relationship between the parties to that contract broke down and the respondent took proceedings against Coastline seeking damages for breach of contract. The appellant subsequently took steps to divest Coastline of its contractual entitlements to profit from the unsold units in favour of his wife.
The respondent then joined the appellant in the proceedings against Coastline alleging that he had breached his duty as the director of Coastline, contrary to s 182(1) of the Corporations Act, and claimed damages from him on that basis. It was essentially alleged that the appellant had misused his position to strip Coastline of its assets. The relief sought by the respondent was in the following terms:

[131]

It may be noted that the injunction sought to compel the appellant to do an act. However, although it seems that this order was sought under s 1324(1), a further order seeking to restrain the appellant was deleted. It appears that the question of whether it was open to make the order sought by the respondent in those circumstances was not raised on appeal.
The trial judge found the appellant had contravened s 182(1) by improperly using his position as director to cause detriment to Coastline and to gain an advantage for his wife. The trial judge also found the respondent, as a creditor of Coastline, was a person whose interests were affected by the appellant's contravention of s 182(1). Accordingly, the trial judge apparently found that not only did the respondent have standing to apply for an injunction under s 1324(1), it was also entitled to an award of damages under s 1324(10). The award of damages equated the respondent's loss resulting from the appellant's contravention of s 182(1) with the amount of the respondent's contractual claim against Coastline.
The appellant appealed against the primary judge's orders. Relevantly, the appellant argued that s 1324(10) does not confer upon a creditor of a corporation a right to be paid damages for the creditor's loss suffered by reason of a contravention of s 182 by a director of that corporation. In support of that argument the appellant relied on a construction of the identically worded predecessor of s 1324(10), namely s 574(8) of the Companies Act, which was preferred by Perry J in Executor Trustee Australia Ltd v Deloitte Haskins & Sells [1996] SASC 5874; (1996) 135 FLR 314 at 323 to 324. According to that construction, the word 'damages' that now appears in s 1324(10) did not identify damages other than with respect to a legal obligation already created by some other provision of the Companies Act or possibly by some other statute or at common law.
On the other hand, the respondent in McCracken argued that the trial judge's reasons were correct and that its entitlement to damages under s 1324(10) was supported by authority. Amongst the various arguments upon which it relied, the respondent contended that s 1324 should not be construed as requiring that a claimant possess a pre-existing right to damages.
The Court of Appeal allowed the appeal, holding that s 1324(10) did not empower the Court to make an order that a director of a corporation pay damages to a creditor of that corporation for a breach by the director of s 182(2) of the Corporations Act where those damages are merely derivative of the corporation's loss. The Court's reasons for reaching that conclusion were delivered by Fraser JA, with both White JA and Applegarth J agreeing.
After recording the arguments on which the parties had relied, Fraser JA noted that s 1324(10) appears in Pt 9.5 of the Corporations Act, which is headed 'Powers of Courts'. In that context, Fraser JA referred with approval at [24], to an observation made by Perry J in Executor Trustee Australia that the focus of s 1324(10) is upon the power to grant injunctions and its exercise rather than on the creation of rights to damages. I will return to that observation later in these reasons. However, Fraser JA also noted a further point made by Perry J, namely that the construction of s 1324(10) propounded by the respondent 'would produce the incongruous result that damages might be awarded only where the Court's power to grant an injunction was engaged and where the claimant had applied for an injunction rather than for damages'. In order to understand the further point made by Perry J to which Fraser JA referred, it is necessary to interrupt the examination of the reasons in McCracken to briefly consider Executor Trustee Australia.
In Executor Trustee Australia, a third party applied to strike out part of a third-party statement of claim, to the extent that reliance was sought to be placed on s 574(8) of the Companies Act for an order that the third party pay damages for breaches of duty. The third party argued that the Court did not have jurisdiction to entertain a claim for damages under s 574(8) because no application for an injunction under subss (1) or (2) of s 574 had been made. His Honour accepted that argument and struck out the damages claim. However, Perry J went on to explain that even if he was wrong in reaching that conclusion, there was a 'different and rather more fundamental reason' to allow the application.
In Executor Trustee Australia it was alleged that the third party breached duties owed to the plaintiff under to s 158 of the Companies Act and pursuant to the terms of a trust deed. More particularly, it was alleged that the third party owed a duty to take reasonable care in and about the provision of reports that were required to be furnished under s 158 and also as to the preparation of certain other reports and certificates required under various clauses of the trust deed. There was no specific power in the Companies Act to award damages for a contravention of s 158 or for any of the alleged breaches of duty. It may be inferred that this is why damages were sought under s 574(8). However, it was in this context that Perry J made the following further point, at 323 to 324, to which Fraser JA referred in McCracken:

[136]

Returning to McCracken, Fraser JA noted that the provisions under which there is an entitlement to claim compensation for contraventions of s 182(1), as well as other 'civil penalty' provisions, are in Pt 9.4B of the Act, which is headed 'Civil consequences of contravening civil penalty provisions'. His Honour also noted that in relation to a contravention of s 182(1), a Court can make three different kinds of orders, namely a 'declaration of contravention' (s 1317E(1)), an order that a person pay the Commonwealth a pecuniary penalty (s 1317G(1)), and a compensation order (s 1317H).
After reproducing the text of s 1317H, Fraser JA observed at [26] that s 1317J relevantly provides that only ASIC and a corporation that has suffered damage as a result of a contravention of a civil penalty provision may apply for a compensation order. Further, his Honour noted that Pt 9.4B includes other provisions that regulate proceedings for such orders. One of those provisions is s 1317K, which relevantly provides that proceedings for a compensation order may be started no later than six years after the contravention.
It was against this background that Fraser JA identified at [27] to [29], three reasons why it was difficult to reconcile Pt 9.4B of the Corporations Act with a construction of s 1324(10) under which any person whose interests are adversely affected by a contravention of a civil penalty provision might be awarded damages for that adverse effect where the Court has the power to grant an injunction.
Firstly, his Honour said that such a construction would make a 'dead letter' of the provisions in Pt 9.4B that create and regulate the power to award compensation, including s 1317J, which denies any entitlement to claim compensation to anyone except ASIC and a corporation that has suffered damage as a result of a contravention of a civil penalty provision.
Secondly, the respondent suffered no loss justifying an award of damages claim because 'the respondent's claimed loss was 'merely derivative of [Coastline's] recoverable loss'. The respondent's case was that because of the appellant's contravention of s 182(1), the assets of Coastline had been stripped. The respondent claimed that it had therefore been denied recourse to Coastline's assets. In that context, Fraser J characterised the claimed loss as 'derivative' on any claim Coastline had against the appellant, ultimately drawing attention to the fact that the respondent did not in fact suffer any loss that was attributable to the appellant's contravention of s 182(1). As Fraser JA explained, citing Gould v Vaggelas (1984) 157 CLR 215 at 291 to 220, 245, 253, and 269, the conventional view is that a creditor in the respondent's position suffers no loss that justifies an award of damages because the diminution in the value of the corporation's assets is replaced by a chose in action of at least equal value. In the case of Coastline, that chose in action was a claim for compensation under s 1317H for damage that resulted from the appellant's contravention of s 182(1).
Against that background, Fraser JA observed that if the respondent's claimed losses were recoverable under s 1324(10) then it would produce the 'very surprising result' that, despite the derivative nature of a creditor's claim, there might be recovery of the same loss from the officer who contravened s 182(1) by both the creditor and the corporation to whom the duty in s 182(1) was owed. Alternatively, a creditor might recover damages at the expense of the corporation to whom that duty was owed.
Thirdly, Fraser JA said that another surprising result of the respondent's construction of s 1324(10) would be that it would:

[149]

In this passage, Fraser JA effectively concluded that it was not necessary to deal with the parties' respective contentions about whether a pre-existing entitlement to damages in the claimant for an injunction is a prerequisite for an award of damages under s 1324(10) in all cases. This is because, in circumstances where there was a clear legislative intention to limit awards of compensation for contraventions of civil penalty provisions to those made under s 1317H, a Court is not empowered under s 1324(10) to award damages to a creditor for losses which are merely derivative of the corporation's loss.
I will return to this aspect of the reasoning in McCracken later in these reasons.
As the plaintiffs in this case submit, McCracken was concerned with a creditor's claim that was merely derivative on the relevant corporation's loss. A similar point can be made about the authorities which the Pitcher Parties say 'approved' McCracken. In that regard, both Colorado Products and Seaman concerned applications for orders under s 1324(10) made by third parties who sought damages for contraventions of statutory duties. A similar point was made in Day v Woolworths Ltd [2016] QCA 337 at [75], where Jackson J with the agreement of Margaret McMurdo P and Philippides JA observed that in the circumstances of that case there was no statutory cause of action conferring a right of damages or compensation upon a third party for breach of an officer's duties owed to a corporation under ss 180(1) or 181(1) of the Corporations Act. In Saffari, while McCracken was referred to for the proposition that the power to award damages conferred by s 1324(10) is available only in substitution for, or supplementation of, an injunction, that case concerned an applicant who had failed to plead that there had been a relevant or likely contravention of the Corporations Act.
In this case, a third party does not seek to invoke the power in s 1324(10). Titan itself seeks damages from the Pitcher Parties for their alleged complicity in the Titan directors' breaches of their duties under ss 180(1) and 588G(2). However, and contrary to the plaintiffs' submissions, McCracken did not only determine that it is not open to a creditor to make a claim under s 1324(10) for damages that are merely derivative of a corporation's loss. Instead, as I have already said McCracken is authority that s 1324(10), properly construed, confers power to award damages only as a substitute remedy, or supplementary remedy, for an injunction to remedy, or partly remedy, the adverse effect upon interests which are protected by a provision of the Corporations Act.
To understand this construction, it is necessary to recall that, as Fraser JA said at [24] in McCracken (by reference to Executor Trustee Australia), the focus of s 1324 is on the power to grant injunctions and on the exercise of that power, rather than on the creation of rights to damages. This is confirmed by the text used in s 1324, its structure, as well as its immediate statutory context including that it appears in Pt 9.5 of the Corporations Act, which is headed 'Powers of Courts'.
The specific powers to grant injunctive relief in subss (1), (2), (3) and (4) of s 1324 are, as might be expected, powers to either restrain a person from engaging in future conduct or to require a person to do any act or thing in the future. The evident purpose of those powers is to enable a Court to make orders with a view to preventing future contraventions of, and to ensure future compliance with the Corporations Act, or to compel a person to do any future act or thing. In that context, s 1324(10) must be understood as conferring on a Court an additional and flexible discretionary power to do complete justice 'to any other person' where a Court decides to refuse to grant such injunctive relief in the exercise of its discretion, by making, in appropriate circumstances, an award of damages as compensation for that refusal, or where a Court considers that such injunctive relief will be an inadequate remedy, by making an award of damages to compensate for that inadequacy.
That this is the way in which s 1324(10) must be understood is made clear by the way in which Fraser JA explained how s 1324(10) may have operated in McCracken, in circumstances in which a mandatory injunction was sought:

[164]

I note that in relation to the power to award damages 'in addition to' an injunction, Reed LJ said at [43] that historically this power enabled the Court of Chancery to award damages which could otherwise have been awarded by the common law courts, but that it had lost its significance since the fusion of the administration of law and equity. However, given the more recent legislative history of s 1324(10), it may be safely concluded that its purpose has little to do with expanding the powers of the Court of Chancery.
The construction of s 1324(10) on which the plaintiffs rely, by which the meaning of the word 'damages' that appears in that provisions extends to and includes damage suffered by Titan that resulted from each of the contraventions of ss 180(1) and 588G in which the Pitcher Parties are alleged to have been complicit, would also create a conflict between ss 1317H and 1324(10) that would be avoided by adopting the construction adopted in McCracken.
I have already referred to what was said at [33] of McCracken at [131] of these reasons. There, Fraser JA noted that under s 1317H, a Court may order that a person compensate a corporation for damage suffered by that corporation if the damage relevantly resulted from a contravention of a civil penalty provision that protects the corporation's interests. However, such an order under s 1317H can only be made on an application by ASIC or the corporation, to the exclusion of any other interested person: s 1317J. In those circumstances, it was said in McCracken that s 1324(10) does not empower the Court to award damages to one such other interested person, namely, a creditor who seeks damages from a corporation for losses that are merely derivative of the corporation's loss. While Fraser JA did not expressly say so, it is plain that this reasoning sought to harmonise the respective operations of ss 1317H and 1324(10).
The terms of the orders in paras 9 and 10 of the originating process, by which the plaintiffs seek an award of damages under s 1324(10) in Titan's favour, very closely reflect the remedy available under s 1317H. However, and as I have already noted, an order cannot be made under s 1317H in respect of the Pitcher Parties. At the relevant time the Pitcher Parties are alleged to have been complicit in the Titan directors' contraventions of ss 180(1) and 588G(2), compensation orders could not have been made against the Pitcher Parties under s 1317H. A legislative choice was made to confer power on a Court under s 1317H to order a person who was found to be complicit in contraventions of some civil penalty provisions to compensate a corporation for damage resulting from such contraventions, but not for damage resulting from complicity in contraventions of other civil penalties.
To borrow loosely from what was said by Perry J in Executor Trustee Australia at 323, it would be strange that if in those circumstances, 'as though by some kind of side wind', a general power to award damages for contraventions of the Corporations Act was created by s 1324(10), which damages the legislature intended would not be recoverable under s 1317H, and that would only be recoverable if the Court had the power to grant an injunction under s 1324 in addition to or in substitution for such an injunction.
The construction of s 1324(10) that emerges from McCracken avoids those peculiarities and allows s 1317H, and the other provisions that appear in Pt 9.4B, to operate harmoniously with s 1324(10).
I am required to adopt the construction of s 1324(10) in McCracken unless I form the view that it is plainly wrong or unless there is a compelling reason to do so. In my view that construction is plainly correct and must be followed. Consequently, and for these further reasons, I conclude that the first part of the separate question must be answered adversely to the plaintiffs.
In my view, the Court does not have the power to grant any of the relief sought in paras 5 to 10 of the originating process
Before leaving this part of the separate question it is necessary to note that the plaintiffs submitted that the Pitcher Parties contended that Pt 9.4B codified the remedies that are available for contraventions of civil penalty provisions. However, at the hearing of the separate question the Pitcher Parties disclaimed any reliance on such a contention. For the avoidance of doubt, my reasoning to this point does not depend upon reaching any conclusions about whether Pt 9.4B of the Corporations Act is a code. Accordingly, it is unnecessary for me to deal with the parties' submissions about that issue, including their submissions about the effect of what was held by the Full Court of the Supreme Court of South Australia in Macks v Viscariello.

Low (Liquidator) v Hughes

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Judgment (173 paragraphs)

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Legislation Cited (9)

Cases Cited (16)