Ng v Van Der Velde

RIBY PTY LTD (ACN 081 153 219) IN LIQUIDATION AS TRUSTEE FOR THE JADE TRUST

JUDGES: DOWSETT, EDMONDS AND GORDON JJ DATE: 15 MARCH 2011 PLACE: BRISBANE

BACKGROUND 1 The first respondents (the "liquidators") and the second respondent ("Riby") commenced these proceedings on 12 December 2007. We will refer to the first and second respondents collectively as the "respondents". At first instance the respondents claimed relief against the appellant ("Ms Ng") and two other parties, the Official Trustee as trustee of the property of Ross Hastings (a Bankrupt) (the "Trustee") and Rams Mortgage Corporation Limited ABN 48 065 912 932 ("Rams"). The proceedings related to a house property located at 15 Brookvale Drive Underwood ("15 Brookvale Drive"). From 12 May 1999 until 17 May 2006 Riby was the registered proprietor of that property. It seems to be common ground that Riby had become registered proprietor as trustee of the Jade Trust, to which trust we will refer in more detail at a later stage. Ms Ng asserts that on 1 November 2005, Riby was replaced as trustee by another company, Meownco Pty Ltd ("Meownco"). However Riby remained registered as proprietor until 17 May 2006. At some stage Riby also held another property at 58 Brookvale Drive ("58 Brookvale Drive"). Again, it seems to be common ground that it held the property as trustee for the Jade Trust. That property is only marginally relevant for present purposes. On 17 May 2006 Ms Ng became registered as proprietor of 15 Brookvale Drive. However, on 26 April 2006, the Supreme Court of Queensland had ordered that, pursuant to the Corporations Act 2001 (Cth) (the "Corporations Act"), Riby be wound up on the ground of insolvency, the liquidators being appointed as such. At first instance the respondents sought to set aside the transfer to Ms Ng of 15 Brookvale Drive. 2 At all material times Mr Ross Hastings ("Mr Hastings") was the sole shareholder and Director of Riby. He was married to Ms Ng. On 21 February 2007 a sequestration order was made against his estate. The Trustee became his trustee in bankruptcy and, in that capacity, was a respondent in the proceedings at first instance. Rams advanced funds to Ms Ng at the time of her acquisition of 15 Brookvale Drive from Riby and became registered mortgagee of that property. In that capacity, it was joined as a party to the proceedings at first instance. Neither the Trustee nor Rams is a party to this appeal.

PLEADINGS 3 On 9 January 2008 the respondents filed a statement of claim in these proceedings. On 4 June 2008 they filed an amended statement of claim. Ms Ng filed a defence on 25 June 2008. The respondents filed a reply on 12 September 2008. On 10 March 2009 the respondents filed an amended application and a further amended statement of claim. On 30 June 2009 they filed a second further amended statement of claim. Ms Ng delivered an amended defence on 24 July 2009. On 28 October 2009 a third further amended statement of claim was filed. Ms Ng did not deliver a further defence.

THE TRIAL 4 On 18 November 2009 Collier J made orders as to the conduct of the trial, fixing it for 25 November 2009. Messrs Lillas Loel had been acting as Ms Ng's solicitors in the proceedings. However, on 18 November 2009, they were given leave to cease to act, subject to their continuing to accept service on her behalf. On 24 November 2009 certain parts of her Honour's order were vacated by order of Greenwood J. The trial was re-scheduled for 14 December 2009. His Honour made other directions. In particular, Ms Ng was directed to file and serve a notice of address for service within three days. Pursuant to the order of Collier J the parties had been obliged to file written submissions by 24 November 2009. Greenwood J extended time for compliance with that order to 10 December 2009. The liquidators and Riby filed their submissions on 11 December 2009. On 10 November 2009, Ms Ng had filed a statement of evidence. On 10 December 2009, she filed an affidavit. 5 On 11 December 2009, the respondents' solicitors sent an email to Ms Ng as follows: We have not been advised or contacted by you as to your requiring any witnesses to be available for cross-examination. Please advise if you do and also whether you will be attending the hearing on 14.12.09. If we do not hear from you by 4pm today, we will presume that you do not require any witnesses available for cross examination and that you do not intend to attend the hearing on 14.12.09 either by yourself or by a representative. 6 On 14 December 2009 at 8.33 am Ms Ng responded by email as follows: I refer to the email sent by Peter Mills of Friday 11 December 2009 at 12.46:51pm. I was not able to respond to this late lodgement due to my having to attend a funeral in Bundaberg. I filed my affidavit before 12pm on Thursday 10 December 2009 as directed by the Court. I perused electronically any lodgements made between 12 midday and 9pm on Thursday 10 December 2009 and found no new submissions. I considered therefore that no new lodgements had been made. On Friday 11 December 2009 between 6am and 10pm, I was travelling to, attending, and travelling from a funeral at Bundaberg and was not present to respond to this late submission. 7 On 14 December 2009, at 9.35 am, the respondents' solicitors sent a further email to Ms Ng as follows: Do you intend to appear today at Court? Please advise urgently by Reply All. 8 Ms Ng did not appear at the trial. At the request of the respondents Greenwood J proceeded to hear the matter on the material available to him. The respondents' material included: affidavit of Peter Mills filed on 1 February 2008; affidavit of David Stimpson filed on 12 December 2007; affidavit of Mr Stimpson filed on 23 June 2009; affidavit of Craig Lawson filed on 28 October 2009; and further affidavit of Mr Stimpson filed on 2 November 2009. 9 As to Ms Ng's affidavit of 10 December 2009, the respondents submitted that his Honour should not have regard to it, given that Ms Ng had not appeared. His Honour reserved his decision on that question and generally, delivering judgment on 22 December 2009. In his reasons Greenwood J indicated that notwithstanding the respondents' objection, he had considered Ms Ng's affidavit. Part of the proceedings involved challenges by the respondents to Rams' mortgage. His Honour ordered that those questions be resolved separately. He then gave his reasons for upholding the substance of the respondents' claim against Ms Ng. That decision is the subject of this appeal.

THE WINDING UP 10 On 26 April 2006 the Supreme Court of Queensland, on the application of a creditor, Drake Australia Pty Ltd ("Drake"), ordered that Riby be wound up in insolvency pursuant to the Corporations Act. The liquidators found that save for 15 Brookvale Drive, there were no unencumbered assets of any value. As at 11 December 2007, the following claims had been lodged by creditors: Martin Grant $ 7,463.39 Arand Quok $ 5,900.60 HPW Accountants $ 6,948.26 Australian Taxation Office $ 6,507.79 Westpac Banking Corporation Limited $118,244.68 Drake Australia Pty Ltd $ 46,630.09 Bendigo Bank $ 2,471.31 Australasia Property Holdings Pty Ltd $ 68,536.43 Total $262,702.55 11 Mr Stimpson, one of the liquidators, considered that Riby was unable to pay its debts from as early as 26 September 2005.

THE DEBTS 12 A certain amount of information was provided concerning Riby's debts. Prior to the winding up order Mr Martin and Mr Arand Quok had each recovered judgment by default against Riby as trustee for the Jade Trust, trading as Hastings Distribution. At the time of the winding up order those judgments had been set aside and the matters listed for trial. Once the order was made, the trial dates were vacated. The debt owed to Drake Australia was based upon a judgment against Riby trading as Hastings Distribution. 13 There is substantial documentation concerning debts claimed by Westpac Banking Corporation Limited ("Westpac") and Australasia Property Holdings Pty Ltd ("APH"). The APH debts were the subject of an affidavit by a Mr Ewart which was exhibited to one of Mr Stimpson's affidavits. It appears that during 2005, APH advanced money to Mr Hastings in connection with vehicle financing. A business being conducted by Solartech Solutions Pty Ltd, one of Mr Hastings's companies, used trucks leased by Riby. For this reason, in Mr Ewart's view, Riby's continued existence was essential to Mr Hastings' business interests. APH made loans to Mr Hastings, but at least some parts of the loans were applied in discharging Riby's obligations under mortgages over 15 and 58 Brookvale Drive. Other amounts were paid to the National Australia Bank, also in discharge of Riby's mortgage commitments. Further payments totalling $22,853.01 were paid to Westpac in connection with equipment finance. There are various documents concerning dealings said to be between APH and Riby as trustee for the Jade Trust and between Westpac and Riby in that same capacity. 14 One such document, dated 2 June 2003, is a commercial loan agreement between Westpac and Riby as trustee for the Jade Trust. The term of the loan is 60 months. It shows that a first registered bill of sale/chattel mortgage over chattels owned by the "grantor" (Riby) and described as "new Citroen C5 HDI Hatchback" and "used Toyota Tarago Station Wagon" was given as security for repayment of the loan. According to those documents, the vehicles were the property of Riby as Trustee. They were also listed as trust assets in the Family Court proceedings between Mr Hastings and Ms Ng, as were 15 and 58 Brookvale Drive. The "disbursement instructions" given to Westpac in connection with the commercial loan agreement shows that the relevant payee was John Cant Motors. We infer that the loan was for the acquisition of the Citroen, presumably from John Cant Motors. The Toyota was already owned by Riby as trustee. It seems that the Citroen was acquired by Riby as trustee. It may subsequently have been appropriated by Mr Hastings to his business. Any such appropriation may or may not have been pursuant to commercial arrangements between Riby as trustee and Mr Hastings and/or his companies. 15 There is a further bill of sale dated 18 January 2005 between Westpac and Riby in connection with the acquisition by Riby of a new IVECO Daily Cargo Chassis. The document does not, on its front page, identify Riby as trustee of the Jade Trust. The relevant commercial loan agreement seems not to be in evidence. Another commercial loan agreement dated 24 February 2005 concerns the acquisition of an IVECO Euro Cargo Cab Chassis fitted with crane. The grantor is Riby. The term is 60 months. On the first page of the agreement Riby is not described as a trustee. However, in a schedule to the agreement, it is described as "ATF the Jade Trust". Mr Hastings and Solartech Solutions are guarantors. We should add that many of the financial documents filed in the Family Court in connection with Ms Ng and Mr Hastings' property settlement strongly suggest that Riby was trading as trustee for the Jade Trust. All in all, it appears that in financing equipment acquisitions, Westpac dealt with Riby as trustee of the Jade Trust. Mr Hastings may, as Ms Ng seems to suggest, subsequently have dealt with such equipment in ways which were inconsistent with Riby's ownership. 16 Similarly, subject only to Ms Ng's broad assertions, unsupported by any evidence, there is no reason to doubt that funds borrowed from APH were applied for trust purposes, namely in discharging debts associated with the acquisition of trust assets. Ms Ng at least implied that the re-financing of the acquisition of 15 and 58 Brookvale Drive may have been carried out for improper purposes, but she offers no evidence. In any event, she does not suggest that Riby had effectively fully repaid the borrowings used to acquire the properties in one form or another. We infer that the payments referred to above went in reduction of them, at least to some extent. The veiled suggestion in Ms Ng's affidavit of 10 December 2009 that borrowed funds were applied other than for trust purposes is unconvincing, to say the least. This is particularly so given that in neither of her defences did Ms Ng make such an assertion. 17 It is true that at first instance, the respondents did not expressly address the link between trust assets and the liquidators. However the basis of the claim was clear enough, particularly as Riby was described in the title to the action as trustee for the Jade Trust and therefore sued in that capacity. In the earlier iterations of the statement of claim, Riby's ownership of 15 Brookvale Drive as trustee was expressly alleged. At the hearing of the appeal, we were concerned that the allegation had been removed from later versions of the statement of claim, including the version upon which the primary Judge relied. We were concerned that his Honour may have been misled into believing that the assets were beneficially owned by Riby. However such a possibility may be discounted in view of the continued identification of Riby as trustee in the title of the proceedings, similar references in the exhibits and an express reference to the trust in the respondents' written submissions at first instance.

THE TRUST 18 The Jade Trust is a discretionary trust of which the primary beneficiaries include: Mr Hastings and Ms Ng; any spouse of either of them; all of the children of either of them (already living or born before the vesting date); issue of such children (already living or born before the vesting date); the parents of either Mr Hastings or Ms Ng; and the spouses of any of their children (already living or born before the vesting date). 19 The list includes other, more remote family members including brothers, sisters, nephews, nieces, sisters-in-law and brothers-in-law, companies in which any primary beneficiary has a share and various other categories. Pursuant to cl 10, the trustee may, in its absolute discretion, transfer any part of the trust fund "… in or towards satisfaction of the share of any beneficiary in the trust fund". The part of the trust fund to be transferred, and the value to be attributed to it, "shall be determined by the trustee at its discretion". Pursuant to cl 15.1.12, the trustee has power, in its absolute discretion, to carry on any business. It may also borrow money pursuant to cl 15.1.18 and make advances to beneficiaries pursuant to cl 15.1.19. Pursuant to cl 20, the "Principal" (Mr Hastings) may change the trustee. We will deal with the trustee's right to indemnity at a later stage.

MS NG'S VERSION OF EVENTS 20 In this part of the judgment we consider primarily the evidence contained in Ms Ng's affidavit filed on 10 December 2009, which affidavit was before Greenwood J. We will consider separately certain additional evidence which she seeks to lead on appeal. Ms Ng said that she and Mr Hastings commenced living together in September 1989. Ms Ng then had assets amounting to approximately $40,000.00. Shortly after they commenced to cohabit Mr Hastings lost his job. Ms Ng supported him whilst he sought other employment. Ms Ng said that pursuant to their financial arrangements, Mr Hastings would "make the mortgage repayments, pay rates and utilities" and she would pay the remaining expenses - "food, clothing, entertainment and other incidentals". However Mr Hastings "regularly forced me to pay his share by simply not paying bills as they fell due". On occasions she paid bills in order to avoid the disconnection of services. She eventually assumed responsibility for making these payments. The couple became estranged in about 2002. Ms Ng claimed that in June 2005, "my situation reached the point that even I could no longer tolerate". The mortgagee was threatening to repossess both 15 and 58 Brookvale Drive. She claimed that she had recently realized that both properties had been re-mortgaged to enable Mr Hastings to lease a small fleet of trucks and stock for another business. Ms Ng borrowed money from her sister to meet the arrears under the mortgages. She sought and found more highly paid employment in Sydney, commuting to and from Brisbane in order to check on her belongings, the house and her pets. 21 In early October 2005 she commenced proceedings pursuant to the Family Law Act 1975 (Cth) (the "Family Law Act") for separation and a property settlement. She asserted that Mr Hastings, as sole director and secretary of Riby, agreed to, and signed terms of settlement dated 23 November 2005. Pursuant to those terms, Ms Ng was to receive both 15 and 58 Brookvale Drive. Consent orders were made in the Family Court on 20 December 2005. Ms Ng alleges that transfers of title were signed by Mr Hastings on 23 December 2005, and that her solicitor "accepted" the transfers on 5 January 2006 "with consideration pursuant to Family Court orders dated 20 December 2005". Ms Ng said that she then realised that she "could not afford 58 Brookvale Drive" and applied to the Family Court for a variation of the consent orders so that she would only receive 15 Brookvale Drive. It is a little difficult to understand why 58 Brookvale Drive should have been of no value to her. In her statement of evidence dated 10 November 2009 (which Greenwood J did not consider) she said that the intention was that she sell it in order to fund her acquisition of 15 Brookvale Drive. A somewhat different version is given in the evidence which she seeks to lead on appeal. In any event a further consent order was made. Ms Ng paid stamp duty on the transfer of 15 Brookvale Drive. She continued to pay mortgage repayments to Perpetual Trustees Victoria Limited ("Perpetual Trustees") until she borrowed money from Rams, which company then became mortgagee in place of Perpetual Trustees. She said at para 14: The Family Law Court settlement was for a $256,000.00 debt for a property valued at $320,000.00. Given that I had already lost $40,000.00 of my original assets, and had incurred a loan of $17,000.00 from my sister, I was going to make a net gain of $7,000.00. However, on the day of exchanging of mortgages, solicitors acting for Perpetual Trustees demanded that I pay Ross Hastings's [sic] debt of approximately $6,000.00 or they would not transfer the mortgage. I had to comply immediately. My net gain, before my legal costs was less than $1000.00 property settlement for twenty years of unmitigated hell, fear and intimidation. 22 The terms of settlement dated 23 November 2005 identify Riby as trustee for the Jade Trust as a party to those proceedings. However it was not a signatory. The terms of settlement provided relevantly as follows: The parties hereto mutually consent and agree to the following Orders being made between them in satisfaction of all matters in issue between the parties and it is the intention of the parties that full force and effect be given hereby to the provisions of section 81 of the Family Law Act. The Orders are made on the basis that each of the entities listed below have received a copy of the Orders and each entity has provided to the Husband and the Wife an irrevocable authorisation and direction confirming that each entity will do all acts and sign all such documents as are necessary of that entity to comply in all respects with the Orders. The entities are: (a) Riby Pty Ltd ACN 081 153 219 (b) Solartech Solutions Pty Ltd ACN 108 122 599 (c) The Trustee of the Jade Trust 23 The proposed consent orders were as follows: 1. That within 30 days of the date of these Orders the husband in his capacity as sole director and secretary and sole shareholder of Riby Pty Ltd do all acts and sign all documents as are necessary to cause the transfer to the wife ("the transferee") at the expense of the wife all of the right, title and interest of the Jade Trust ("the transferor"): 1.1 in the following property situate at: (a) 15 Brookvale Drive …; and (b) 58 Brookvale Drive … and 1.2 the Citroen No. 2 Coupe motor vehicle having registration number 765IKY … 2. Subsequent to and in consideration and exchange for the transfer referred to in Order 1 hereof the wife shall relinquish all of her right, title and interest in the following entities and the balance of assets of these entities then remaining: (a) The Jade Trust; (b) Riby … (c) Solartech … 3. To complete the transfer by the transferor to the transferee the following shall apply: 3.1 Settlement will take place on the settlement date. 3.2 The transfer documentation will be prepared by the transferee's solicitor and delivered to the transferor's solicitor for signature … 24 Other proposed "orders" provided that: Mr Hastings was to remove a caveat over 58 Brookvale Drive, using moneys to be lent to him by Ms Ng; such moneys were to "remain a debt due and owing to her by the husband and Riby …"; the loan was to be repaid within five years; Mr Hastings was to occupy 15 Brookvale Drive, apparently until settlement; and Ms Ng undertook to indemnify Mr Hastings against all claims made by Perpetual Trustees in connection with 15 and 58 Brookvale Drive and with respect to all rates, taxes and other outgoings from the settlement date. 25 There were other mechanical provisions. The document was signed by both Ms Ng and Mr Hastings but, as we have observed, not by Riby. We have seen no evidence of the "authorization and direction" of any of the entities referred to in the second paragraph of the terms of settlement quoted above and said to be the basis upon which the orders were made. However Mr Hastings no doubt had knowledge of such matters. His concurrence may have been on behalf of the entities (including Riby) as well as himself. 26 The order of 20 December 2005 provided: 1. By consent and pursuant to Part 10.4 of the Family Law Rules, Orders, Declarations and Notations be made in terms of the document entitled "Terms of Settlement" attached hereto. 2. This is not an Order to which Section 77A of the Family Law Act applies. 3. There are no Orders for Maintenance contained herein. 27 Further terms of settlement dated 3 April 2006 were incorporated into further consent orders made on 10 April 2006, using the same mechanism. Neither those terms of settlement nor those orders purported to vacate or vary the earlier terms of settlement and orders. The April terms of settlement were in similar form to those dated 23 November 2005, save that references to 58 Brookvale Drive were deleted. Again, Riby was shown as a party to the terms of settlement but again, it did not execute them. It is reasonable to infer that the parties intended that the April terms and orders revoke and replace the earlier terms and orders. The proposed date of settlement does not appear from the terms of settlement. The transfer was lodged and registered on 17 May 2006.

MS NG'S FURTHER EVIDENCE 28 On this appeal, Ms Ng seeks to lead further evidence. She has sworn three further affidavits, two filed on 29 January 2010 and one on 17 March 2010. Of the two affidavits filed on 29 January 2010, one seems to take the matter no further than does the other material in the case. There is also an affidavit by Ms de Guzman who is her solicitor. To one of the affidavits filed on 29 January 2010 is exhibited the trust deed constituting the Jade Trust. Some parts of the submissions made on behalf of Ms Ng rely upon the terms of the trust deed. It is therefore appropriate that we treat it as being in evidence on appeal for the purpose of considering the parties' submissions. In the affidavit Ms Ng asserts that the Jade Trust is a family trust of which she and Mr Hastings are the primary beneficiaries. The list of primary beneficiaries is much more extensive. Ms Ng's sister is one other primary beneficiary as is any company of which Mr Hastings is a director or shareholder. The trust deed is dated 23 December 1997. Ms Ng swears that Riby was incorporated on 24 December 1997, with Mr Hastings as sole director and secretary, and that it was incorporated for the purpose of acting as trustee of the family trust "which held the matrimonial home". In particular, Ms Ng asserts that "to my knowledge, Riby Pty Ltd did not otherwise trade". It is not clear whether the words "to my knowledge" mean that Ms Ng positively knew that Riby did not otherwise trade or merely that she was unaware of its having so traded. She returns to the matter at a later stage. Mr Hastings arranged finance for the acquisition of 15 Brookvale Drive. The property at 58 Brookvale Drive was acquired as an investment property by Riby as trustee. It was subsequently rented. In para 13 Ms Ng asserts that: It had always been my understanding that Riby Pty Ltd and the Jade Trust did not trade but were there just for the two properties. The only business of my husband that I was aware of was Solartech Solutions because he kept stock in the garage at 15 Brookvale Drive, Underwood. 29 Ms Ng then describes the circumstances surrounding negotiation of the property settlement and asserts in para 24 that: Since I was going to be solely responsible for both properties and since he had shown that he could not be relied upon to act responsibly as the trustee of the Jade Trust, I caused the change of trustee to Meownco Pty Ltd … my own company in November 2005. 30 Ms Ng could not, unilaterally, have changed the trustee. Clause 20 of the trust deed provides that the power of appointing a new trustee vests in "the Principal or should he die in his legal personal representatives". The Principal is, according to Item 7 of the Schedule, Mr Hastings. However there is a "deed of retirement of trustee and appointment of trustee" dated 1 November 2005 which purports to remove Riby and appoint Meownco. The terms of settlement, dated 23 November 2005, had provided for the transfer of the Brookvale Drive properties from the Jade Trust to Ms Ng and for her to relinquish all interest in that trust. The later terms of settlement were to similar effect. It seems to be inconsistent with those arrangements that she should have sought to have her own company appointed as trustee of the Jade Trust. However there may be some explanation for her having done so. Ms Ng asserts that settlement under the April terms of settlement occurred on 21 April 2006. 31 At para 25, Ms Ng asserts that her decision to "return" 58 Brookvale Drive to her husband was prompted by her discovery that her employment would not be long-term. It is difficult to see why Ms Ng should have considered such return to be more favourable to her financially than would be sale of the property as had previously been intended. See paras 17 and 18 of the affidavit. One would have thought that even a "fire sale" would have yielded something. 32 Concerning her failure to appear before Greenwood J, Ms Ng says that at about the end of January 2008 she had engaged Lillas Loel as her solicitors. By November 2009, the solicitors were demanding payment of outstanding fees for the period to 15 April 2009. She could no longer afford their services. Nonetheless, they continued to act until 18 November 2009. At para 40 she says: Because I could not pay my solicitor my legal bill and from all indications I felt that there was nothing I could do to help my situation, in desperation and hopelessness, I did not have a choice but to advise my solicitors that I could not afford their fees. 33 At paras 42-44 she continues: 42. On 16 December 2009, the date of the trial, I did not have legal representation. I did not attend the trial as I did not think I was required to attend as the order of Justice Collier of 18 November 2009 stated that "Evidenceinchief at the trial is to be given by affidavit except with the leave of the Court". Since I had submitted my affidavit by the due date of 10 December 2009, I thought this was what the order meant. … 43. At the trial, I did not have the benefit of having someone defend me or argue my case or present evidence on my behalf. Even if I had attended the trial, I would not have been able to defend myself and argue on the law anyway as I am not qualified and do not have the skills to do so. 44. As a result of not having legal representation, I lost in the proceedings. 34 Numerous documents are exhibited to the affidavit, some of which were also exhibited to the affidavit of 10 December 2009. There is a certificate of registration of the business name "Hastings Distribution" which shows Riby as proprietor without any reference to the Jade Trust. There are also documents headed "Riby Pty Ltd (as trustee)" (which appear to have formed part of financial accounts), showing both Brookvale Drive properties as assets, together with vehicles and equipment, some of which are subjects of the finance arrangements mentioned earlier. Westpac, National Australia Bank and Perpetual Trustees are shown as creditors. These documents were filed in the Family Court in connection with the terms of settlement. 35 In her affidavit filed on 17 March 2010, Ms Ng asserts that her former solicitors had not prepared for trial because of outstanding fees. She also exhibits an email dated 14 July 2008 from Mr Hastings to "James Loel" of Lillas Loel, Ms Ng's former solicitors. In it, Mr Hastings asserts that Riby, trading as trustee for the Jade Trust, did not trade and had no debts, other than mortgage debts. He also asserts that "Riby has no assets. All debts were incurred while trading as Hastings distribution", and that, "Riby always traded as Hastings distribution". The email deals with various numbered "items". The numbers appear to relate to similarly numbered paragraphs in counsel's advice to Mr James Loel of Lillas Loel which is also exhibited. The advice was said to be "in relation to three interconnected matters involving the affairs of Mr Hastings and Ms Ng". Fairly clearly, one of those matters was the respondents' claim against Ms Ng. The second matter was APH's claim against Riby. Counsel seems to have recognized the possibility that Riby's involvement was as trustee for the Jade Trust. The third matter was a claim by Solartech Solutions against Mr Hastings and Mr Ewart. In her affidavit Ms de Guzman says that her firm was retained to act on behalf of Ms Ng on 14 January 2010, taking over from previous solicitors, Davey Law. 36 At the hearing of the appeal counsel for Ms Ng was asked to identify the additional evidence upon which she sought to rely. In addition to the affidavits, she referred generally to various documents evidencing the financial dealings of entities associated with Mr Hastings. There was also reference to the affidavit of Mr Ewart to which we have referred. It was before the primary Judge and therefore is not fresh evidence. We have referred to the statement of evidence of Ms Ng filed on 10 November 2009. Greenwood J did not take it into consideration. As Ms Ng did not give oral evidence, and as the statement was not sworn, he could not properly have done so. In any event, it does not take the matter much further.

THE DECISION AT FIRST INSTANCE 37 Greenwood J summarized the issues as follows: 2 The [respondents] contend that a sole director of the company, Mr Ross Hastings, caused Riby to make a disposition of real property of the company to [Ms Ng] his wife, on 17 May 2006 pursuant to a transfer arrangement made with her on 21 April 2006, at a transfer price of $254,914.16 which was, they contend, approximately $76,000.00 below its true value of $330,000. … 3 … 4 The [respondents] contend that the disposition is void pursuant to s 468 of the Corporations Act … as it occurred after the commencement of the winding up by the Court on 26 April 2006. The winding up is taken to have commenced on that day: s 513A(e) of the Act. The applicants also say that the transfer; a document described as the "Terms of Settlement" relating to consent orders made by the Family Court of Australia on 10 April 2006, related to the transfer; and the ultimate transfer registration all represent transactions of the company (so defined by s 9 of the Act) rendered voidable by s 588FE(2) of the Act as insolvent transactions; s 588FE(3) as insolvent and uncommercial transactions; s 588FE(4) as insolvent transactions made with a related entity; s 588FE(5) as insolvent transactions of the company made for the purpose of defeating the rights of creditors; s 588FE(6) as insolvent transactions constituting an unfair loan to Ms Ng; and, s 588FE(6A) as unreasonable director-related transactions. 38 At [26]-[29] his Honour rehearsed certain factual matters, concluding at [30]: Having regarding to the unpaid arrears based on the default notice of 5 May 2005, the unpaid accelerated debt, the unpaid Drake debt and the loan arrangements with APH, Riby was unable to pay its debts from 26 February 2005. 39 The reference to 26 February 2005 may be an error. The relevant date is 26 September 2005. See [36] of his Honour's reasons. There is no challenge to his Honour's implicit finding of insolvency as at that date. 40 His Honour continued: 32 The Terms of Settlement became the subject of consent orders under the Family Law Act … of 10 April 2006. Mr Hastings was the sole director of Riby from 24 December 1997 and sole shareholder from 27 January 2004, when the arrangements with Ms Ng were struck. She was at that time his spouse. On 17 May 2006, Riby was the registered proprietor of the Underwood property. On that day, Riby transferred all its right, title and interest in the property to Ms Ng. The transfer was registered in the Queensland Land Title Office on 17 May 2006. Riby had been registered as the sole registered proprietor of the Underwood property since 12 May 1999. The transfer was for an amount of $254,914.16. The property was valued at $330,000.00 at the date of transfer. No other consideration was paid by Ms Ng. 33 The Terms of Settlement between Mr Hastings and Ms Ng and the consent order of 10 April 2006 reflects [sic] terms advantageous to both Mr Hastings and Ms Ng. Those arrangements conferred clear benefits upon them. No benefit was conferred upon Riby by those arrangements. The transfer was ultimately made in consideration of the discharge of the existing mortgage held by Perpetual of $254,914.16. The transfer took place at an undervalue of approximately $76,000.00. The creditors of Riby have been prejudiced by the disposition at an undervalue as, but for the disposition there would have been at least some dividend paid to the creditors of Riby. 34 Between 10 August 2005 and 26 September 2005, several loan agreements were made between Riby and APH. By September 2005, Riby was insolvent. On 31 October 2005, APH lodged a caveat over property at 58 Brookvale Drive, Underwood ("No. 58") previously registered in the name of Riby. That property was sold by the mortgagee. On 8 November 2005, Ms Ng lodged a caveat over the Underwood property (ie. No. 15). On 22 November 2005 Mr Hastings and Ms Ng entered into an agreement by which Riby agreed to transfer its interest in the Underwood property to Ms Ng. On 20 December 2005, consent orders were made in the Family Court of Australia at Southport. On 23 December 2005, Mr Hastings signed a transfer. The Terms of Settlement document by which Riby undertook to transfer the property to Ms Ng was signed by Mr Hastings and Ms Ng on 3 April 2006. The settlement of the transfer took place on 17 May 2006 with funds provided to Ms Ng by RAMS, of approximately $256,000.00. On 14 September 2007, the liquidator lodged a caveat against dealings in the Underwood property claiming an interest in the whole of the fee simple. 35 Under the Terms of Settlement of 22 November 2005, Ms Ng was to lend Riby money to pay out a caveat lodged by APH supporting its claims. Under the April 2006 settlement terms and consent order, Riby was to transfer its interest in the property to Ms Ng. Ms Ng acquired a beneficial interest in the Underwood property pending completion. The transfer on 17 May 2006 took place after the commencement of the winding-up. A non-exempt disposition of property occurred upon registration. 36 That registration occurred pursuant to events along a continuum consisting of the agreement of 22 November 2005; the consent orders of 20 December 2005; the execution of the Terms of Settlement on 3 April 2006; the consent orders of 10 April 2006; and, the transfer on 17 May 2006. All of those arrangements took place after 26 September 2005, being the date on which Riby was unable to pay its debts as and when they fell due. In any event, Riby was ordered to be wound up on 26 April 2006, based on an application of 24 March 2006. During the six-month period ending on the relation-back date of 24 March 2006, (that is, from 24 September 2005 to 24 March 2006), Riby entered into all of the above transactions as defined (s 9 of the Act, "Transaction") in circumstances where the transactions constituted insolvent transactions within s 588FC as the transactions conferred an unfair preference on Ms Ng to the prejudice of the creditors of the company who could not then be paid when debts fell due and owing, by transferring the whole of the value of the Underwood property to her in satisfaction of her claim both on Mr Hastings personally and, more importantly, in respect of the creditor aspects of her relationship with Riby. 37 The transaction consisting of the agreement to transfer and the transfer is an uncommercial transaction as a reasonable person in the circumstances of Riby would not have entered into a transaction to transfer the Underwood property to Ms Ng at an undervalue of $76,000.00 as Riby obtained no benefit from the transaction. 38 The agreement to transfer and the transfer of the Underwood property to Ms Ng are unreasonable director-related transactions as they constitute a disposition of property of the company brought about by Mr Hastings, to Ms Ng, a close associate of Mr Hastings; and, at the time those transactions were entered into, it was within the expectation of a person standing in the shoes of Riby, that Riby would derive no benefit from the disposition. A "close associate" of Mr Hastings is defined to include a "relative" of the relevant "director" and a "relative" in relation to a person includes the spouse of the person. 39 The agreement to transfer and the transfer of the Underwood property was [sic] entered into by Riby, through Hastings, for a purpose of removing the Underwood property from the reach of creditors and thus for a purpose of defeating the rights of creditors on a winding-up of the company, having regard to the circumstances of Riby at the time those transactions were struck. 40 The agreement to transfer and the transfer were insolvent transactions made with a spouse of a director of a company and thus transactions made between the company and a "related entity" as that term is defined in s 9 of the Act. 41 I am satisfied therefore that the agreements to transfer and the transfer of the Underwood property to Ms Ng involved contraventions of ss 588FE (2), (3), (4), (5) and (6A) of the Act. The "transaction" is thus rendered voidable by the operation of those provisions. 42 In addition, the transfer of the property to Ms Ng on 17 May 2006 is rendered void by operation of s 468 of the Act.

MS NG'S CASE 41 In argument, counsel for Ms Ng relied upon a number of propositions which, in our view, were incorrect or misleading. They included: that the winding up provisions of the Corporations Act do not apply to the winding up of a trustee company or to assets held in trust by such a company; that a trustee has no right to an indemnity from trust assets other than pursuant to the terms upon which trust property is held; that any breach of duty will deprive the trustee of the right to indemnity; and that the trustee's right to indemnity under the trust deed of the Jade Trust cannot be exercised against trust property in the possession of a beneficiary. 42 Much of Ms Ng's case also depends heavily upon assertions concerning Mr Hastings' conduct of Riby's affairs as trustee, which assertions were not supported other than by generalized references to documents. These assertions seemed to be matters of suspicion or opinion rather than reasoned submissions. We will address the grounds of appeal in more detail at a later stage.

WINDING UP 43 We should say something about our understanding of the operation of the winding up provisions of the Corporations Act. Pursuant to s 471A(1): While a company is being wound up in insolvency or by the Court, a person cannot perform or exercise, and must not purport to perform or exercise, a function or power as an officer of the company. 44 Section 471A(1A)(a) provides that this prohibition does not apply to a liquidator appointed for the purposes of the winding up. The liquidator's powers are primarily found in s 477. In effect, the liquidator assumes the power to conduct the affairs of the company in the course of its winding up. Property in the company's assets does not vest in the liquidator by force of the winding up order. However only the liquidator may deal with the property. Pursuant to s 474(1), the liquidator must take custody or control of all property to which the company is, or appears to be entitled. Pursuant to s 474(2), the Court may direct that all or any part of the property of the company vest in the liquidator. Pursuant to s 468, any disposition of the property of a company (other than an exempt disposition), made after the commencement of the winding up, is, unless the Court otherwise orders, void. Exempt dispositions are not presently relevant. Other transactions may be avoided pursuant to s 588FE which provides that certain transactions are voidable if entered into within stipulated periods prior to the "relation-back day". The relation-back day for present purposes is the date of filing of the application for winding up, 24 March 2006. The following transactions are voidable pursuant to the identified provisions: s 588FE(2) - an insolvent transaction (which must be either an unfair preference or an uncommercial transaction) if entered into, or if an act was done for the purpose of giving effect to it, during the six months ending on the relation-back day, or after that day, but on or before the day when the winding up began; s 588FE(3) - a transaction of the company which is both an insolvent transaction and an uncommercial transaction if entered into, or if an act was done for the purpose of giving effect to it, during the two years ending on the relation-back day; s 588FE(4) - an insolvent transaction of the company to which a related entity of the company is a party, if entered into, or if an act was done for the purpose of giving effect to it, during the four years ending on the relation-back day; s 588FE(5) - an insolvent transaction of the company to which the company became a party for the purpose of, or for purposes including the purpose of defeating, delaying or interfering with the rights of any or all of its creditors on the winding up, and the transaction was entered into, or an act was done for the purpose of giving effect to it, during the 10 years ending on the relation-back day; s 588FE(6) - an unfair loan to the company made at any time on or before the day when the winding up began; and s 588FE(6A) - an unreasonable, director-related transaction of the company, if entered into, or if an act was done for the purpose of giving effect to it, during the four years ending on the relation-back day or after that day, but on or before the day when the winding up began. 45 The term "transaction" is defined for the purposes of Pt 5.7B to mean: … a transaction to which the body is a party, for example (but without limitation): (a) a conveyance, transfer or other disposition by the body of property of the body; and (b) a charge created by the body on property of the body; and (c) a guarantee given by the body; and (d) a payment made by the body; and (e) an obligation incurred by the body; and (f) a release or waiver by the body; and (g) a loan to the body; and includes such a transaction that has been completed or given effect to, or that has terminated. 46 The terms "unfair preference", "insolvent transaction", "uncommercial transaction", "unfair loan" and "unreasonable director-related transaction" are defined in ss 588FA, 588FB, 588FC, 588FD and 588FDA. Section 588 provides that a court may make orders about voidable transactions, including orders for the transfer to the company of property or payment of money. Subsequent sections provide defences to proceedings of that kind.

THE STATUS OF TRUST ASSETS WHERE AN INSOLVENT TRUSTEE IS IN LIQUIDATION 47 This subject was discussed in some detail by the Full Court, (Ryan, Mansfield and Dowsett JJ) in Federal Commissioner of Taxation v Bruton Holdings Pty Ltd (In Liquidation) & Ors (2008) 173 FCR 472. That decision was reversed on appeal by the High Court but on grounds unrelated to questions which are presently relevant. At [35] to [37], the Court discussed a trustee's right to indemnity out of the trust estate and the trustee's lien securing such right of indemnity. At [47] to [58], the Court discussed the status of trust assets in a winding up. Subject to certain caveats, the following extract from Gronow M, McPherson's Law of Company Liquidations, (Thomson Law Book Co., subscription service) (update No 10) at 11.120 summarises the position: Assets held by the company on trust, although not available for the purposes of winding up, are nevertheless subject to the control of the liquidator acting through the company in the place of the directors. Moreover, the creditors of a trustee company the debts of which were incurred in the administration of the trust are entitled to be subrogated to the trustee company's claim to an indemnity out of the assets of the trust. The assets that are available in this way to the creditors by subrogation are not assets available for distribution among the general creditors of the company. In the absence of any statutory provision regulating the administration of trusts of which the company is the trustee, the liquidator is expected to act in a responsible way in the administration of the trust in the name of the company. This duty does not necessarily require the liquidator in all cases to apply to the Court for the appointment of a new trustee. Indeed, it is this involvement in the administration of the trust and the winding up of the trustee company that forms the basis of the liquidator's claim to be subrogated to the trustee company's right of indemnity from the trust assets in respect of remuneration, costs and expenses. Only where the liquidator's costs and expenses are necessarily incurred in performing the company's duties as trustee will it be possible for the liquidator's costs and expenses to be recouped from the trust assets. 48 Similar views are expressed in Heydon JD, Jacobs' Law of Trusts in Australia (7th ed, LexisNexis Butterworths, 2006) at para 2114, although the authors take a different view from that expressed in McPherson as to the extent to which a liquidator's costs may be recovered from trust assets. That is the first caveat upon the correctness of the above extract. The second caveat is as to whether the proceeds derived from such indemnity may be applied only in discharge of debts owed to trust creditors or those of all creditors. The third caveat is that the reference to the trust creditors' rights of subrogation does not detract from the fact that such rights and supporting liens are property of which the liquidator must take custody or control. These matters are discussed in more detail in Bruton where the authorities are also discussed.

GROUNDS OF APPEAL 49 We propose to deal with the grounds of appeal upon the basis of the evidence which was before Greenwood J. Where Ms Ng now seeks to lead further evidence relevant to a particular ground, we will refer to it. However we will leave the question of whether she should be allowed to lead that evidence for resolution at a later stage. 50 Ground 1 in the amended notice of appeal is that the Corporations Act "does not apply because the subject matter of the litigation was not a corporate property but a trust property and the appellant was an individual who was a beneficiary of a family trust." For reasons which we have given the ground is misconceived. First, the liquidator may have to perform the trustee's duties. Second, the liquidator of an insolvent trustee may enforce any right of indemnity out of trust assets held by the company as trustee and the trustee's lien over such assets. In the course of the winding up, it may emerge that the trustee has defaulted in some respect in connection with its duty as trustee, causing loss to the trust. In those circumstances, the right to indemnity may be exercised only after such default has been remedied. If it appears that the outgoings were not properly incurred in the administration of the trust, there will be no right to indemnity in respect of them. In the present case, there is evidence that Riby incurred liabilities as trustee of the Jade Trust. Ms Ng may wish to dispute its right to indemnity, but that does not detract from the liquidators' duty to take into their custody or control, property to which Riby appears to be entitled. At the very least, Riby as trustee appears to have borrowed from APH and Westpac and applied the proceeds in discharging trust debts. To that extent, Riby is prima facie entitled to an indemnity out of trust assets and a lien over them to enforce such indemnity. Ms Ng may have an opportunity, in the course of the liquidation, to advance some of her claims, although her conduct in connection with the proceedings before Greenwood J may pose problems in that regard. We should add that Ms Ng also submits that Riby had no right to indemnity or lien in respect of 15 Brookvale Drive because of the operation of cl 13.9 of the trust deed. We will discuss that submission at a later stage. 51 Ground 2 addresses his Honour's finding that the transfer was void pursuant to s 468. Ms Ng again asserts that the property was trust property, and that the transfer was "a valid distribution of the trust property to a beneficiary by the Trustee in its absolute discretion in accordance with the Trust Deed". For present purposes we accept that pursuant to cl 7 of the trust deed the trustee has such a power. However s 468 strikes at all dispositions, even if they are otherwise lawful. His Honour proceeded on the basis that the transfer lodged and registered on 17 May 2006 was a disposition for the purposes of s 468. The registration of the transfer undoubtedly effected a disposition of Riby's legal title and of the benefit of the trustee's lien. As such disposition occurred after the commencement of the winding up, it was void. That finding does not necessarily exclude persons having claims against Riby as trustee from asserting them in the winding up. Despite her assertions to the contrary, prior to the alleged distribution to her, Ms Ng was not presently entitled to any benefit under the trust deed other than in the discretion of the trustee. 52 Had the terms of settlement been agreed after the winding up order, they may, subject to the operation of the Family Law Act, have been avoided pursuant to s 468. However, in the events which happened, only lodgement and registration of the transfer clearly occurred after the making of the order. Ms Ng asserts that the transfer of 15 Brookvale Drive was effected to resolve matrimonial property settlement issues between her and Mr Hastings. No basis has been shown for exempting such a transaction from the operation of s 468. We will discuss the significance of the orders of the Family Court at a later stage. Ms Ng asserts that the "distribution of the trust property to [her] was executed on 23rd December 2005, the date Riby Pty Ltd as Trustee signed the Transfer document", and that Rams actually caused the transfer to be lodged and registered on 17 May 2006. The date of signing is of no significance for present purposes. The relevant disposition was the registration of the transfer. The legal title remained with Riby until 17 May 2006. Although terms of settlement were apparently executed on 23 November 2005, the terms of settlement executed on 3 April 2006 replaced those terms. There was no evidence before the primary Judge as to the date upon which the transfer was settled. Ms Ng now seeks to lead evidence that it occurred on 21 April 2006. Whether she should be allowed to do so is a matter to which we will return. However the point is that notwithstanding the terms of settlement, Riby remained as registered proprietor, and at least as a bare trustee, until 17 May 2006 and, in that capacity, retained its right to indemnity as against 15 Brookvale Drive and its lien over that property in respect of outgoings properly incurred by it in administering the Jade Trust, subject to any requirement that it make good losses suffered by the trust estate as the result of any breach of duty, and subject to our subsequent consideration of the Family Law Act and the significance of cl 13.9 of the trust deed. 53 Ground 3 of the amended notice of appeal attacks the primary Judge's finding that the terms of settlement signed on 3 April 2006 constituted an agreement for transfer rendered voidable by operation of s 588FE of the Corporations Act. Ms Ng asserts that the terms of settlement were "in satisfaction" of property settlement issues between Mr Hastings and her, and that the terms of settlement were reached "after a long drawn process including negotiations between the husband and wife which started way back in October 2005 …". Ms Ng alleges that the consent orders made by the Family Court on 10 April 2006 giving effect to the terms of settlement were "to give full force and effect to the provisions of s 81 of the Family Law Act". It is then asserted that the terms of settlement do not "constitute an agreement for transfer of the Underwood property rendered voidable by operation of s 588FE … but rather it was an agreement made pursuant to Family Law Act provisions". Once again, no clear basis was advanced for exempting the terms of settlement from the operation of s 588FE. As we have said, we will consider the effect of the Family Law Act at a later stage. 54 Ground 4 of the amended notice of appeal deals with Riby's entitlement to an indemnity out of the trust assets and to a lien over such assets. Ms Ng asserts that the trust deed "provided specifically that the Trustee does not have any right of indemnity or recoupment from the Trust Fund for liabilities incurred by the Trustee. A liquidator's right over a trust property only exists if the Trustee has a right of recoupment or indemnity from the trust property to pass on to the liquidators". This proposition is incorrect. First, his Honour did not have the trust deed before him. In those circumstances, he was entitled to infer that there was a right of indemnity conferred by ss 65, 71 and 72 of the Trusts Act 1973 (Qld) (the "Trusts Act"). Queensland law applied to the trust deed pursuant to cl 24 thereof. Section 72 seems to be a sufficient basis for a claim to a lien. By virtue of s 65, the rights conferred by ss 71 and 72 exist notwithstanding any contrary intention appearing from the relevant trust deed. Thus the respondents need not rely on any right of indemnity conferred by the trust deed. In any event cl 13.9.1 of the trust deed provides: 13.9.1 the Trustee or former Trustee shall not have any charge or lien or right of compensation, reimbursement, contribution or indemnity except out of property then in the Trustee's or former Trustee's actual possession and then only if the Trustee or former Trustee, as the case may be, acted in good faith, and only in respect of liabilities incurred relating to the execution of the Trustee's or former Trustee's powers, duties, authorities or discretions and only in respect of property in the possession of the Trustee or former Trustee at all times during the period when the events giving rise to the liability in question occurred; 13.9.2 no Trustee or former Trustee shall have any such charge or lien or right of compensation, reimbursement, contribution or indemnity whatsoever over or in respect of any present or former property of the Trust not then in that Trustee's or former Trustee's actual possession; and 13.9.3 a Trustee or former Trustee shall not have any right of compensation, contribution, indemnity or other claim against any unit holder or any other person, whether in respect of any property or former property of the Trust, by reason of the Trustee's or former Trustee's having accepted the office of Trustee or incurred any liability for the benefit of or at the request express or implied of that unit holder or other person. 55 Ms Ng submits that at all material times 15 Brookvale Drive was occupied by Mr Hastings and her, or by her alone, and not by Riby. Thus, she submits, Riby was not in actual possession of that property and therefore, pursuant to cl 13.9.1 and cl 13.9.2, it had no right of indemnity or lien in respect of such property. As we have said, this says nothing about Riby's entitlement pursuant to ss 71 and 72 of the Trusts Act which would seem to authorize a trustee to retain so much of the trust assets as is necessary in order to recoup outgoings properly incurred in its capacity as trustee. In any event the argument misconceives cl 13.9.1 and cl 13.9.2 and Riby's relationship with 15 Brookvale Drive. There will always be potential difficulty in identifying "possession" of real property by a company, as trustee or otherwise. Such possession will necessarily be evidenced by legal ownership, by the presence thereon of the company's officers and staff and/or other use of it for the purposes of the company, including any trust purposes. 56 In these proceedings, little attention has been paid to the arrangements pursuant to which Mr Hastings and Ms Ng have resided at 15 Brookvale Drive. There has been no suggestion of a tenancy agreement or lease. The terms of settlement dated 23 November 2005 indicate that as between Mr Hastings and Ms Ng, it was Mr Hastings who was, until settlement, to occupy those premises. Clause 3.4.1 of the Terms of Settlement dated 3 April 2006 was to similar effect. The terms of settlement of 23 November 2005 show Mr Hastings and Ms Ng as residing at 15 Brookvale Drive and 7 Short Street Southport, respectively. The terms of settlement of 3 April 2006 and the order of 10 April 2006 show them both as living at 15 Brookvale Drive. In any event it seems that as between Mr Hastings and Ms Ng, Mr Hastings was to occupy the premises. However the real question is the basis upon which he or they purported to occupy those premises as against Riby. There is no evidence on this matter. It was open to the primary Judge to infer that Riby, by its agent, Mr Hastings, was in possession of the premises, at least until settlement. If possession was given up after that time, it was, on the evidence before his Honour, arguably pursuant to a transaction which was void pursuant to s 468 or voidable pursuant to s 588FE. 57 Mr Ng also claims that Riby as trustee did not act in good faith, and that it was therefore deprived of its indemnity. We understand the principle to be that the indemnity is in respect of outgoings incurred bona fide in the execution of the trust. However such indemnity may not be enforceable until the trustee makes good any loss suffered as the result of any breach of trust. In both respects see RWG Management Ltd v Commissioner for Corporate Affairs [1995] VR 385 at 396-399, per Brooking J. Ms Ng alleges both that outgoings were incurred other than for trust purposes, and that there were other defaults which may have caused loss. However the allegations are imprecise and/or do not identify any loss. The evidence establishes that at least some of the moneys borrowed from APH was used to pay debts incurred by Riby in connection with the acquisition of assets as trustee, including 15 and 58 Brookvale Drive, vehicles and other equipment. There may have been transactions, including transactions concerning those assets, which were not in good faith and which caused loss to the trust. Riby may be obliged to make good such losses. Those possibilities are raised, but not resolved on the evidence, to put the case at its highest from Ms Ng's point of view. Generally, such matters would be ventilated in the course of the winding up. However, as we have said, Ms Ng may face difficulty in seeking so to do, given her failure to raise or prosecute these issues before Greenwood J. Ground 4 is misconceived. Our conclusions concerning cl 13.9 of the trust deed also remove one of the qualifications upon our view that grounds 1 and 2 were without merit. 58 By ground 5 of the amended notice of appeal, Ms Ng asserts that she was denied natural justice and procedural fairness in the proceedings before Greenwood J. She asserts that she was under the impression that she was not required to attend. That impression was quite correct. She was not obliged to attend, but she was entitled to do so and to be heard. There is no suggestion other than that she was aware of the trial date and chose not to attend. She may well have felt that there was no point in her attending because of her inability to make submissions on her own behalf. However it does not follow that she was denied procedural fairness. There is nothing in this point.

LEADING FURTHER EVIDENCE 59 We have, until this point, delayed dealing with Ms Ng's application to lead further evidence on appeal. We have rather sought to identify the case which was before Greenwood J, the way in which his Honour dealt with it and the validity of Ms Ng's grounds of appeal in connection with his Honour's decision. We have concluded that, subject only to the Family Law Act, all grounds of appeal should fail. We will now consider the extent to which it may be appropriate to permit further evidence on appeal, including the likely effect of such further evidence on the outcome of the appeal. 60 Although the Court may receive further evidence on appeal (Federal Court of Australia Act 1976 (Cth), s 30AI), in practice, appeals are generally decided on the evidence led at first instance. The discretion to receive such evidence is frequently exercised, having regard to whether it is likely to have influenced the decision at first instance, had it been led, and whether it is shown that for some good reason, it was not available at first instance to the party seeking to lead it. However the discretion to receive fresh evidence is at large. In exercising that discretion one consideration is the need for finality in litigation. Where the party in question has chosen not to appear at trial, the need for finality will generally loom large. The other party will have incurred substantial costs and complied with its obligations under the rules. Yet it will be faced with the prospect of a second hearing and a further appeal from any second decision. Such a party is entitled to expect that a party who has elected not to appear at trial will be held to that election. In our view only the clearest perception of grave injustice would generally be sufficient to justify the Court's receiving further evidence on appeal in such circumstances. 61 Ms Ng's additional "evidence" is fragmentary and lacking in specificity. Her submissions are imprecise and largely misconceived. The additional evidence primarily concerns her assertion that Riby as trustee of the Jade Trust was not intended to, and did not trade or carry on any activity other than ownership of the Brookvale properties. No such allegation was made in either of the defences filed by Ms Ng. In the affidavit of 10 December 2009, which was before the primary Judge, there was no such suggestion, although there was a suggestion that trust assets had been misapplied by Mr Hastings. Ms Ng's evidence to this effect must be assessed against her assertions that she knew little of the couple's financial affairs. The matter is not advanced much by the proposed further evidence. The trust deed demonstrates that the trustee had power to carry on business. Mr Hastings' assertions concerning Riby's trading history may support Ms Ng's case, but they are inconsistent with contemporary documents. There are other problems with Mr Hastings' assertions, the most significant being that he has not sworn to them. In general, the proposed further evidence may suggest areas which might justify further investigation, but it is not of great assistance to Ms Ng for present purposes. 62 Whether or not this is a correct evaluation of the proposed further evidence, the fact remains that Ms Ng had an opportunity to place it before Greenwood J and voluntarily chose not to do so. It is reasonable to infer that she was at least partly motivated in this decision by her perception that in the absence of legal assistance, she would not have been able to contribute much to her own defence. This is not an unusual situation. The reality is that our society does not generally fund legal proceedings by its citizens. Limited funds are available in a limited range of cases. The duty of the Court is to do justice to the parties in the matter before it. There is a significant public interest in litigation being conducted efficiently and in decisions being final. In the present case, the litigation at first instance was conducted by the liquidators in the course of winding up Riby, a company which is unable to pay its debts. There is a significant public interest in that process being concluded quickly and efficiently so that creditors may benefit to the greatest possible extent from the available assets. 63 A party is generally bound by decisions made in the course of litigation. Where a party chooses not to appear at a hearing, he or she necessarily accepts that the matter will be disposed of in accordance with the material properly before the Court. Where time has been spent in the conduct of a hearing and the associated costs incurred, good reason must be shown for allowing a party to depart from decisions made as to such conduct. Any departure is likely to cause further expense to innocent parties and loss of time. 64 Although Ms Ng suggests that some matters have recently come to her attention, it is by no means clear that any substantial evidence falls into that category. In any event, the evidence which she seeks to lead is unlikely to take her case any further than did her affidavit of 10 December 2009, although it may suggest that further inquiries might be helpful. Thus receipt of the evidence would almost inevitably involve further delay and, we suspect, a further hearing at first instance. In the circumstances, we conclude that it would not be in the interests of justice to allow Ms Ng to lead further evidence on appeal. 65 On 2 February 2010, before Reeves J, the respondents read and filed an affidavit by Terry Rose. On appeal they seek to rely upon it in opposing the application to lead further evidence. It is not necessary that we receive it for that purpose. Exhibited to it were various documents, some of which may not have been in evidence before Greenwood J. In their substantive submissions, the respondents have referred to some of those documents. In considering such submissions we propose to consider only those documents in evidence at first instance, namely those contained in Pt B of the Appeal Book. The respondents have made no application to lead further evidence on appeal.

FAMILY COURT PROCEEDINGS 66 The orders of the Family Court stand as orders of a superior court of record. They may only be set aside by that Court or by the High Court. Further, the Family Court is empowered to determine whether a matter is within its jurisdiction. Again, its decision in that regard may only be set aside by the Court itself or by the High Court. It must also be accepted that pursuant to certain provisions of the Family Law Act, the Family Court has power to make orders and injunctions binding parties other than the parties to the marriage. We should not interfere in the operation of those orders to the extent that they are binding on parties to the Family Court proceedings or others. 67 Pursuant to s 79 of the Family Law Act, the Family Court is authorised to make appropriate orders with respect to the property of the parties to the marriage or either of them, including orders which alter the interests of the parties in such property. There are special provisions relating to bankrupt parties to the marriage but, as far as we can see, no particular provisions relating to corporate insolvency. Sections 113 and 114 authorize the making of declarations and injunctions. Declarations may be made in proceedings of the kind referred to in para (b) of the definition of "matrimonial cause" in subs 4(1) of the Family Law Act. Injunctions may be made in proceedings of the kind referred to in para (e) of that definition. Paragraph (b) concerns proceedings for declarations as to the validity of a marriage, a divorce or an annulment. Paragraph (e) concerns: proceedings between the parties to a marriage for an order or injunction in circumstances arising out of the marital relationship (other than proceedings under a law of a State or Territory prescribed for the purposes of s 114AB) … . 68 Part VIIIAA deals with "orders and injunctions binding third parties". Section 90AA provides: The object of this Part is to allow the court, in relation to the property of a party to a marriage, to: (a) make an order under section 79 or 114; or (b) grant an injunction under section 114; that is directed to, or alters the rights, liabilities or property interests of a third party. 69 We note that Pt VIIIAA seeks to facilitate proceedings "in relation to the property of a party to the marriage", where the relevant order "is directed to or alters" third party property interests. The link to property of a party to the marriage is of some significance. Part VIIIAA does not simply confer jurisdiction to vary the property rights of third parties. 70 Section 90AC provides: (1) This Part has effect despite anything to the contrary in any of the following (whether made before or after the commencement of this Part): (a) any other law (whether written or unwritten) of the Commonwealth, a State or Territory; (b) anything in a trust deed or other instrument. (2) Without limiting sub-section (1), nothing done in compliance with this Part by a third party in relation to a marriage is to be treated as resulting in a contravention of a law or instrument referred to in sub-section (1). 71 Section 90AC may be difficult to reconcile with provisions contained in ss 588FA, 588FB and 588FDA of the Corporations Act. Section 588FA(1) provides that a transaction is an unfair preference if it satisfies the requirements of that section, "even if the transaction is entered into, is given effect to, or is required to be given effect to, because of an order of an Australian court or a direction by an agency". Similar provisions occur in s 588FB(2), concerning uncommercial transactions and in s 588FDA(3)(b), concerning unreasonable, director-related transactions. Resolution of these conflicting "paramountcy" provisions may not be easy. We have not had the benefit of submissions on the subject. Indeed, Ms Ng's grounds of appeal focus more on the terms of settlement than the Family Court orders. Her case seems to be that the terms of settlement do not constitute an agreement rendered void by s 468 or voidable by s 588FE of the Corporations Act. As far as we can see nothing in the Family Law Act purports to protect such agreements from the operation of other legislation. The operation of Pt VIIIAA, including s 90AC, seems to be limited to authorizing orders of the Court. As we have said, we accept that orders which have been made must stand and be obeyed until either the Family Court or the High Court sets them aside. We also accept that in this case, the terms of settlement have been incorporated into the Family Court orders. 72 The orders of 10 April 2006 were made in proceedings described as being between Ross Hastings and Ms Ng, both of whom are shown as living at 15 Brookvale Drive, Underwood. The orders were relevantly as follows: UPON application made to the Court this day, IT IS ORDERED: (1) That by consent and pursuant to Part 10.4 of the Family Law Rules, Orders Declarations and Notations be made in terms of the document titled "Terms of Settlement", marked as Exhibit "1" as attached hereto. (2) There are no Orders for maintenance contained herein. 73 We have previously set out relevant parts of the terms of settlement. Although those terms purport to be between Mr Hastings, Ms Ng and Riby, Riby appears not to have executed them. The terms of settlement record the assertion that Riby, Solartech Solutions and the trustee of the Jade Trust had received "a copy of the Orders" and that "each entity has provided to the Husband and the Wife an irrevocable authorisation and direction confirming that each entity will do all acts and sign all such documents as are necessary of that entity to comply in all respects with the Orders". However the orders are not directed to any of those "entities". Mr Hastings is ordered to: in his capacity as sole director and secretary and sole shareholder of [Riby] do all acts and sign all documents as are necessary to cause the transfer to [Ms Ng] at the expense of [Ms Ng] all of the right, title and interest of the Jade Trust … in … 15 Brookvale Drive … . 74 Apart from mechanical provisions, the only other relevant provision is para 3.4.1 which orders that Mr Hastings have sole right of occupation of 15 Brookvale Drive until settlement. The reference to "the trustee of the Jade Trust" in the introductory parts of the terms of settlement may be to Riby as trustee, the earlier reference being to Riby on its own behalf. Alternatively, the reference may be to the alleged new trustee, Meownco. In any event, cl 1 of the terms of settlement requires Mr Hastings, but not Riby, to cause the transfer. Further, the transfer was to be of such interest as the Jade Trust then held in the property. On Ms Ng's versions of events, that interest was split between Riby (the legal owner) and Meownco (the new trustee of the Jade Trust). However, in our view, Riby also held its right to indemnity in respect of any outgoings properly incurred in administering the Jade Trust, subject to its obligation to make good the loss caused by any default. It also held a lien to enforce that right of indemnity. Those rights were not trust assets. They were enforceable by Riby against trust assets. The order did not require the transfer to Ms Ng of either the right of indemnity or the lien. We conclude that the orders did not affect Riby's right to indemnity out of the trust assets or its right to a lien over those assets.

OTHER MATTERS 75 Because of our conclusion that the orders of 10 April 2006 were not directed to a third party (see [73] above) and because of our conclusion that those orders did not alter Riby's right to indemnity out of the trust assets or its right to a lien over those assets, we were inclined to the view that the orders of 10 April 2006 were not orders of the Family Court pursuant to s 90AE(2) and that, in consequence, the provisions of Pt VIIIAA, in particular s 90AC, were not engaged. However, as indicated in [71] above, we did not have the benefit of submissions on the subject. Consequently, through the associate to the presiding judge, by letter dated 26 November 2010, we invited the parties to make further submissions in writing addressing the following matters: • the proper construction of the Family Court orders; • the extent to which they bind Riby; and • the extent to which they bind the liquidators. The Court would expect the submissions to deal comprehensively with Part VIIIAA, the circumstances in which third parties may be bound by Family Court orders [including, for example, s 90AE of Part VIIIAA], the effect (if any) of that part for present purposes and with the apparent conflict between s 90AC of the Family Law Act and ss 588FA(1), 588FB(2)(b) and 588FDA(3)(b) of the Corporations Act, all of which are presently relevant. The Court suggests that Ms Ng deliver such submissions to the respondents on or before 5 December 2010 and that the respondents deliver their submissions within ten days of such receipt. Any reply should be delivered within two days and the submissions delivered to the Court immediately thereafter. Should either side consider that a further hearing is necessary, the relevant solicitor should advise me immediately. 76 As a result, further submissions were provided by the appellant on 30 November 2010, by the respondents on 14 December 2010 and in reply by the appellant on 16 December 2010. In their submissions, the respondents indicated at [52] that they proposed to make an application in the Family Court to set aside consent orders involving Mr Hastings and Ms Ng, and asked that the appeal in this Court be adjourned to a date to be fixed with liberty to apply, pending the outcome of that application. 77 Through the associate to the presiding judge, by letter dated 20 December 2010, we wrote: The Court is minded to allow this course, but only on the basis that the matter is dealt with expeditiously. The Court proposes that the proceedings be listed for further mention on 4 February 2011. We assume that it was the respondents' intention in asking for such adjournment that the reasons of the Court in the appeal would not be delivered in the meantime. 78 When the matter came before the presiding judge for mention on 4 February 2011, the Court was informed that the respondents did not propose to make any application to the Family Court and neither party proposed to make further submissions. 79 We are left then with the further submissions provided by the parties referred to in [76] above. 80 The only submission of substantive relevance in the appellant's further submissions was that Mr Hastings, the husband of the appellant in his capacity as sole director and secretary and sole shareholder of Riby, was a third party in relation to the marriage for the purposes of Pt VIIIAA and that O 1 of 10 April 2006 was therefore an order within s 90AE(2)(a) so that the provisions of Pt VIIIAA, specifically s 90AC, were engaged. The submission must be rejected. Having regard to the definition of "third party", in relation to a marriage in s 90AB, namely, "a person who is not a party to the marriage", Mr Hastings could never be a third party in respect of his marriage to Ms Ng irrespective of the capacity in which he was ordered to do some act or thing. 81 The appellant did not submit that O 1 of 10 April 2006 altered the rights, liabilities or property interests of a third party in relation to the marriage within s 90AE(2)(b) of the Family Law Act. 82 The respondents' further submissions are summarised at [46] to [48] thereof: 46. The Family Court Orders of 10 April 2006, on a proper construction, have effect only between Ms Ng and Mr Hastings, and do not bind Riby … or the liquidators. 47. First, Part VIII AA did not apply. This is because: (a) Riby never signed the "Terms of Settlement"; (b) Riby was never a Respondent Third Party and did not execute Part M of the Form 11 Application for Consent Orders; (c) No Affidavit was filed pursuant to rule 10.16A(2) [of the Family Court Law Rules 2004]; (d) There is no evidence that the prerequisites at s.90AE(3) and (4) … were adequately addressed, or at all, prior to the Family Court Orders being made. Secondly, given the absence of Riby … as a Respondent Third Party, the Family Court Orders of 10 April 2006, could not, and did not, act as an order to which Part VIII AA applied, because no order was made under s.90AE(2). 48. As there was no order under Part VIII AA, s.90AC did not have any application or operate in a way to render legal, transaction(s) that was/were otherwise illegal under the Corporations Act. 83 Nothing in the further submissions from either party causes us to alter the view we had come to without having the benefit of those submissions, namely, that the provisions of Pt VIIIAA of the Family Law Act, in particular s 90AC, were not engaged by the consent orders made on 10 April 2006. 84 Three other matters require comment. The first is that our reasons for dismissing the appeal are far more detailed than those at first instance, raising issues which were not dealt with in those reasons. Such a situation is unusual, simply because it is unusual for a party to appeal against a decision made after a hearing of which such party had notice, but at which he or she did not appear. In particular, there was no consideration at first instance of the complications arising out of Riby's position as trustee. Whilst Riby's status as trustee appeared from the material before Greenwood J and was referred to in the respondents' written submissions, the matter was of no real significance. In the title of the proceedings Riby was described as trustee of the Jade Trust. The respondents and Ms Ng seem consistently to have treated 15 Brookvale Drive as trust property. Prior to this appeal the parties seem not to have treated as relevant the status of Riby's debts as trust debts or otherwise. The first suggestion that Riby's debts may not have been properly incurred as trustee was in the statement of evidence filed by Ms Ng on 10 November 2009 where it was merely asserted that Riby "did not otherwise trade". This document was not before Greenwood J. There was evidence before his Honour which suggested otherwise. In the affidavit filed on 10 December 2009, which was before Greenwood J, Ms Ng alleged only that funds had been used to acquire trucks and stock for the purposes of another business. That allegation did not necessarily involve a mis-use of trust assets. Appropriate financial arrangements may have been made. In summary it is fair to say that the respondents conducted the proceedings upon the assumption that at least some debts were debts incurred by Riby as trustee, and the contrary was not clearly asserted prior to the judgment at first instance. 85 The second matter is that the first instance judgment is based upon a quite brief outline of the facts which, as his Honour concluded, engaged ss 468 and 588FE. Ms Ng has not challenged the factual basis of the decision, save to the extent that any challenge may be inherent in the grounds of appeal. Those grounds were quite limited in scope and did not invite any substantial challenge to factual findings. Hence it has not been necessary that we examine the evidence supporting such findings. 86 Finally, the amended application filed on 10 March 2009 sought an order for transfer of 15 Brookvale Drive to Riby. Paragraph 3 of his Honour's order was for "transfer" of "vacant possession" to the liquidators. It is not clear whether the order related to physical possession or the legal title. However para 3(e) provides for execution of a transfer by the Registrar in the event that Ms Ng does not do so, suggesting that the intention of the order was that she transfer title to the liquidators. 87 There is a passage in the decision of Needham J in Re Crest Realty Pty Ltd (in liquidation) (1977) 1 NSWLR 664 at 669 which might suggest that s 233(2) of the Companies Act 1961 (NSW) (the "Uniform Companies Act"), a predecessor of s 474(2) of the Corporations Act, did not authorize the Court to vest in a liquidator the legal title to property held on trust by the company in liquidation. This view appears to have been based on the specific reference in that subsection to property held on trust for the company and the absence of any reference to property held on trust by the company. In Octavo Investments Pty Ltd v Knight (1979) 144 CLR 360 at 372, the High Court suggested that it was inappropriate for the Court to order payment to a liquidator of moneys payable to a company in liquidation as trustee, at least in the absence of an order pursuant to s 233(2) of the Companies Act 1961 (Qld) which was in similar form to the relevant provision in Crest. 88 In the present case, there has been no formal application pursuant to s 474(2), but no point has been taken on appeal concerning the appropriateness of the order that 15 Brookvale Drive be transferred to the liquidators as opposed to Riby. That section differs from that considered in Crest in that there is now no reference to trust property. It is therefore possible to distinguish Crest and treat s 474(2) as authorizing the vesting of the legal title to trust property in the liquidator of a trustee company. In the absence of any ground of appeal concerning this aspect of the case, we see no reason to upset the order.

ORDERS 89 We order that: (1) the motion for leave to adduce further evidence on appeal be dismissed; (2) the appeal be dismissed; and (3) the appellant pay the respondents' costs of the appeal and of the motion. I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Dowsett, Edmonds and Gordon.