Pages Property Investments Pty Ltd v Attila Boros & Ors

• Carr v Finance Corp of Australia Ltd (No 1) (1981) 147 CLR 246; [1981] HCA 20 - Cassimatis v Australian Securities and Investments Commission [2020] FCAFC 52; (2020) 376 ALR 261; (2020) 144 ACSR 107 - Charlton v Baber [2003] NSWSC 745; (2003) 47 ACSR 31; 21 ACLC 1671 - Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 - Coope v LCM Litigation Fund Pty Ltd [2016] NSWCA 37; (2016) 333 ALR 524 - Daniels v Anderson (1995) 37 NSWLR 438 - Dhami v Martin [2010] NSWSC 770; (2010) 79 ACSR 121; 241 FLR 165; BC201004930 - Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 - Fox v Percy (2003) [2003] HCA 22; 214 CLR 118 - Gerace v Auzhair Supplies Pty Ltd (in liq) [2014] NSWCA 181; (2014) 87 NSWLR 435; 100 ACSR 465 - Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431; (2014) 103 ACSR 137 - Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296; 287 ALR 22; 87 ACSR 260 - Hart Security Australia Pty Ltd v Boucousis [2016] NSWCA 307 - Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380 - Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd [2011] FCA 1154; (2011) 86 ACSR 393 - Howard v Commissioner of Taxation [2014] HCA 21; (2014) 309 ALR 1 - Howard Smith Ltd v Ampol Petroleum Ltd [1974] AC 821; [1974] 1 NSWLR 68; [1974] 1 All ER 1126; (1974) 3 ALR 448 - Hurford Hardwood Kempsey Pty Ltd v Kempsey Timbers (Sawmilling) Pty Ltd (No 5) [2020] NSWSC 287 - JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 - John Shaw and Sons (Salford) Ltd v Shaw [1935] 2 KB 113; [1935] All ER Rep 456 - Jones v Dunkel (1959) [1959] HCA 8; 101 CLR 298 - Jones v Jones [2009] VSC 292 - JZ Lee Interiors Pty Ltd v Smith [2015] VSC 693 - Kenna & Brown Pty Ltd v Kenna [1999] NSWSC 533; (1999) 32 ACSR 430; 17 ACLC 1183 - Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 - Lewis Securities Ltd (in liq) v Carter [2018] NSWCA 118; (2018) 355 ALR 703; 128 ACSR 120 - Loch v John Blackwood Ltd [1924] AC 783 - Love v ASC [2000] WASCA 404; (2000) 36 ACSR 363 - Manning v Cory [1974] WAR 60; (1974) CLC 40-140 - McCrohan v Harith [2010] NSWCA 67 - Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 - Morley v Australian Securities and Investments Commission (No 2) [2011] NSWCA 110; (2011) 83 ACSR 620 - MSPR Pty Ltd v Advanced Braking Technology Ltd [2013] NSWCA 416 - Munstermann v Rayward [2017] NSWSC 133 - NRMA v Parker (1986) 6 NSWLR 517; 11 ACLR 1; 4 ACLC 609 - Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 - Netglory Pty Ltd v Caratti [2013] WASC 364 - Notaras v Waverley Council [2007] NSWCA 333 - Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd [2011] FCAFC 166; (2011) 285 ALR 63; 86 ACSR 674 - One.Tel Ltd (in liq) v Rich [2005] NSWSC 226; (2005) 190 FLR 443 ; 53 ACSR 623 - Pages Property Investments Pty Ltd v Boros [2019] NSWSC 1778 - Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768 - Primacy Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158; (2007) 25 ACLC 160 - Queensland Independent Wholesalers Ltd v Coutts Townsville Pty Ltd [1989] 2 Qd R 40 - Queensland Press Ltd v Academy Investments No 3 Pty Ltd [1988] 2 Qd R 575; (1987) 11 ACLR 419; 5 ACLC 175 - Ramsay v BigTinCan Pty Ltd [2014] NSWCA 324; (2014) 101 ACSR 415 - Re Bicher & Son Pty Ltd [2020] NSWSC 711 - Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 - Re Cumberland Holdings Ltd (1976) 1 ACLR 361 at 375; (1975-76) CLC 40-250 - Re FAL Healthy Beverages Pty Ltd [2017] NSWSC 476 - Re Global Advanced Metals Pty Ltd [2019] NSWSC 1804; (2019) 141 ACSR 222 - Re Hair Industrie Penrith Pty Ltd, Hair Industrie Merrylands Pty Ltd [2015] NSWSC 1578 - Re HIH Insurance Ltd and HIH Casualty and General Insurance Ltd; Australian Securities and Investments Commission (ASIC) v Adler [2002] NSWSC 171; (2002) 168 FLR 253; 41 ACSR 72 - Re Hillsea Pty Limited [2019] NSWSC 1152 - Re ICB Medical Distributors Pty Ltd [2018] NSWSC 1315 - Re JGS Investment Holdings Pty Ltd [2014] NSWSC 1532 - Re Lawrence Waterhouse Pty Ltd (in liq) [2011] NSWSC 964 - Re Motasea Pty Ltd [2014] NSWSC 69; (2014) 97 ACSR 589 - Re National Discounts Ltd (1951) 52 SR (NSW) 244; 69 WN (NSW) 115 - Re Pages Equipment Holdings Pty Ltd (admin apptd) [2020] NSWSC 959 - Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914 - Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724 - Re Weedmans Ltd [1974] Qd R 377 - Re William Brooks & Co Ltd and Companies Act [1962] NSWR 142; (1961) 79 WN (NSW) 354 - Rose v Trend Designs Pty Ltd [2020] NSWSC 675 - Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 - Sevilleja v Marex Financial Ltd [2020] UKSC 31 - Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd [2003] QSC 402; [2004] 2 Qd R 207; (2004) 22 ACLC 724 - State of New South Wales v Moss (2000) 54 NSWLR 536 - Strategic Communications Management Pty Ltd v Techfront Australia Pty Ltd [2020] NSWSC 847 - Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 - Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104; (2011) 84 ACSR 121 - Troulis v Vamvoukakis [1998] NSWCA 237 - Uszok v Henley Properties (NSW) Pty Ltd [2007] NSWCA 31 - Van Reesema v Flavel (1992) 7 ACSR 225; 10 ACLC 291 - Vanguard Financial Planners Pty Ltd v Ale [2018] NSWSC 314 - V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC 16; (2013) 296 ALR 418; 93 ACSR 76 - Vrisakis v Australian Securities Commission (1993) 9 WAR 395; 11 ACSR 162 - Waterman v Gerling Australia Insurance Company Pty Ltd [2005] NSWSC 1066; (2005) 65 NSWLR 300 - Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459 - Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1 Texts Cited: - Mason and Carter, Restitution Law in Australia (LexisNexis Butterworths, 2nd ed, 2008) Category: Principal judgment Parties: Pages Property Investments Pty Ltd (Plaintiff) Attila Boros (First Defendant) Pages Equipment Holdings Pty Ltd (prov liq apptd) (Second Defendant) Pages Sales Pty Ltd (prov liq apptd) (Fifth Defendant) Phire Pty Ltd (prov liq apptd) (Sixth Defendant) Pages Austructures Pty Ltd (Seventh Defendant) Representation: Counsel: M White/R Gration (Plaintiff)

Solicitors: WMD Law (Plaintiff) A Boros (self-represented) File Number(s): 2016/357782

Introduction

1. The Plaintiff ("PPI") seeks a range of relief in these proceedings against several individuals and companies within the group of companies operating the Pages event hire business ("Pages Group"). The First Defendant, Mr Boros, has appeared and contests the relief sought in the proceedings. PPI has settled its claims against the Third and Fourth Defendants, Mr Thatcher and Mrs Boros, and several corporate defendants are now in provisional liquidation and have taken no active role in the proceedings. The Seventh Defendant ("Austructures") is not in provisional liquidation, but did not participate in this hearing. Although it had foreshadowed that it would seek to be heard in respect of the relief sought against it, namely an order that it be wound up for oppression or on the just and equitable ground, it ultimately did not seek to do so, and Mr Boros addressed that question in closing submissions.
2. There is a significant degree of common ground between the parties as to the background facts. PPI is the trustee of The Page Family Discretionary Trust and owns shares in several of the corporate Defendants, which operated a hire business established by the late Mr Greg Page. From about 2003 until her death in 2018, Mr Page's widow, Mrs Mary Terese ("Tess") Page was the sole shareholder of PPI. PPI alleges that the First Defendant, Mr Boros, was its chief executive officer from July 2003 to March 2008 and effectively controlled PPI and its decision making in that period. It is not necessary to determine that question since the claims to be determined in these proceedings arise subsequently. It is common ground that Mr Boros was PPI's sole director and sole company secretary from 3 March 2008 until 12 September 2016, when Mrs Page removed him from those positions and appointed her son, Mr Timothy Page, as PPI's sole director and secretary.
3. The Second Defendant ("PEH") was placed in voluntary administration on 3 July 2020, and the Court subsequently appointed provisional liquidators to it. Mr Boros is, and has been since 17 December 1999, a director of PEH, and Mr Thatcher was the other director of PEH since that date. The shareholders of PEH are, and have been since 29 October 2003, PPI as to 50%; Hun Enterprises Pty Ltd ("Hun"), a company associated with Mr Boros and Mrs Boros, as to 25%; and Thatcher Group Pty Ltd ("Thatcher Group"), a company associated with Mr Thatcher, as to 25%. The Fifth Defendant ("Sales") was also placed in voluntary administration on 3 July 2020, and the Court also subsequently appointed provisional liquidators to it. Mr Boros was also, from 21 November 2014 until 25 August 2015, a director and the sole company secretary of Sales. Mr Thatcher is and has been since 21 November 2014 a director of Sales and its sole company secretary from 25 August 2015. The shareholders of Sales are, and have been since 21 November 2014, PPI as to 26.667%; Hun as to 26.667%; Thatcher Group as to 26.667%; and two other entities each as to a 10% interest in that company.

Affidavit evidence and credit

1. Before turning to the affidavit evidence on which the parties rely, I should address the principles to which the Court should have regard in assessing the affidavit and oral evidence. To the limited extent that there is any direct contest as to events, and given the passage of time between the events and the hearing, I have placed primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence: Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 at [15]; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 129; Re Hillsea Pty Limited [2019] NSWSC 1152 at [16]ff. I also have regard to the gravity of the matters alleged against Mr Boros in determining whether those matters are proved to the civil standard, under s 140 of the Evidence Act 1995 (NSW), reflecting the principle in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; see also Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 170-171. In the event, Mr Boros gave little evidence in admissible form of several earlier arrangements for which he contended and, as I note below, Mr Timothy Page had limited knowledge or understanding of relevant events.
2. PPI relies on several affidavits of Mr Timothy Page, who is a confined space rescue officer by occupation, and the son of the late Mr and Mrs Page and now the sole director of PPI. In his affidavit dated 28 November 2016, Mr Page refers to PPI's ownership of an industrial property at Punchbowl, to which I refer below, and the lease of that property to PEH and PEH's then operation of an event hire business from that property. His evidence is that the late Mr Greg Page started the business in 1957 and that Mr Boros and Mr Thatcher worked for the business from the 1980s. Mr Page leads evidence of PPI's then shareholding in several of the Pages Group companies, and refers to the circumstances in which he became aware of a suggestion that Mr Boros had listed the Punchbowl property for sale in August 2016. Mr Page also refers to several transactions involving PPI, to which I refer further below, to requests for the books and records of PPI made to Mr Boros and to correspondence between solicitors in respect of those requests. The issues in respect of access to documents are relevant to the oppression claims, although orders for production of documents were made in the proceedings and the Court will determine the proceedings on the basis of the documents now produced in them.

PPI's claim for breach of director's statutory and general law duties

1. PPI pleads that Mr Boros owed it statutory and fiduciary duties (5FASC [45]-[46]) which he breaches in several respects. Paragraph 45 pleads the relevant statutory duties as follows: "45. From 28 July 2003 until 12 September 2016, [Mr Boros] owed PPI the following statutory duties: (a) a duty to exercise his powers and discharge his duties with the degree of care and diligence that a reasonable person would exercise: s 180(1) of the Act; (b) a duty to exercise his powers and discharge his duties in good faith in the best interests of PPI, and for a proper purpose: s 181(1) of the Act; (c) a duty not to improperly use his position to gain an advantage for himself or someone else, or cause detriment to PPI: s 182(1)(a) and (b) of the Act; and (d) a duty not to improperly use information obtained in his role as director of PPI to gain an advantage for himself or someone else, or cause detriment to [PPI]: s 183(1)(a) and (b) of the Act."
2. This paragraph is a broadly accurate pleading of the relevant duties. Section 180 of the Corporations Act requires a director or other officer of a corporation to exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they were a director or officer of a corporation in the corporation's circumstances and occupied the office held by, and had the same responsibilities within the corporation as, the director or officer. The statutory duty of care and diligence under that section overlaps with directors' duty of care arising at general law. I summarised the applicable principles in Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 ("Re Colorado") at [408] as follows: "In Australian Securities Commission v Gallagher above at 52-3, Pidgeon J observed that the test whether the statutory duty of care and diligence had been contravened was an objective one, that a director need not exhibit a greater degree of skill in the performance of his or her duties than may reasonably be expected for a person of his or her knowledge and experience, in the relevant circumstances, and that it was relevant to consider the way in which the work of the company was distributed between its directors and other officers, provided that distribution was reasonable. In Australian Securities and Investments Commission v Adler above at [372] (upheld by the Court of Appeal in Adler v Australian Securities and Investments Commission (2003) 46 ACSR 504; 179 FLR 1; [2003] NSWCA 131), Santow J noted that the duties imposed by the section are essentially the same as directors' duties at general law; that, in determining whether a director had exercised reasonable care and diligence, the test was what an ordinary person, with the director's knowledge and experience, might be expected to have done in the circumstances if he or she was acting on his or her own behalf; and that the duty of care and diligence would require special vigilance in a situation of potential conflict, requiring scrupulous concern on the part of those officers who become aware of that transaction to ensure that any necessary corporate approvals are obtained and safeguards put in place. That decision has been cited with approval in recent case law, including Parker v Tucker (2010) 77 ACSR 525; [2010] FCA 263 at [70] per Gordon J and Diamond Hill Mining Pty Ltd v Huang Jim Mining Pty Ltd (2011) 84 ACSR 616; [2011] VSC 288at [90] per Croft J."

Claim to set aside the Second Lease PPI's pleaded case and evidence

1. On or about 15 June 2016, PPI and PEH executed the Second Lease of the Punchbowl property from PPI to PEH for a period of five years commencing on 1 July 2016 until 30 June 2021, with options to renew for two further periods of five years each. The rent payable by PEH under the Second Lease was $33,000 per month (inclusive of GST) payable monthly in advance on the 1st day of each month, under cl 3 of the Second Lease and Item 6 of the Reference Schedule. The rent payable by PEH under the Second Lease is reviewed annually during the terms of the lease on the first and each subsequent anniversary of the commencement date of the lease by a specified formula under cl 4 of the Second Lease and Item 7 of the Reference Schedule. PEH is obliged to pay, within 20 business days after receiving an itemised statement from PPI after the end of each 12-month period of the lease, specified operating costs for the property under cll 5.1 and 5.2 of the Second Lease. PEH is obliged to pay interest to PPI on any rent, operating costs or other money payable by PEH to PPI and unpaid for 10 business days at a rate equal to 2% per annum above the highest overdraft rate charged as at the due date for payment by PPI's bank for commercial loans in excess of $100,000, from the date the relevant payment was due under cl 13.3 of the Second Lease.
2. PPI pleads (5FASC [43]-[44]) that the market rent for the Punchbowl property as at 15 June 2016 was about $42,090 per month plus GST (about $46,300 per month inclusive of GST) and that the rent payable by PEH under the Second Lease is substantially below market rent. PPI pleads that Mr Boros breached his statutory and fiduciary duties by causing PPI to enter into the Second Lease at a rent substantially below market rent (5FASC [47]). In particular, PPI pleads that Mr Boros did not exercise his powers and discharge his duties as the director of PPI in good faith in its best interests, contrary to s 181 of the Act; that he improperly used his position as a director of PPI to gain an advantage for himself by reason of his indirect interest in PEH, or to gain an advantage for PEH, contrary to s 182 of the Act; and that he breached the pleaded fiduciary duties owed to PPI in that respect.
3. The rent payable under the Second Lease is $360,000 per annum, excluding outgoings which were to be paid by PEH; including land tax, which was not an additional charge to PEH; and exclusive of GST. Mr Boros referred, in his affidavit dated 30 January 2018, to a market valuation of the Punchbowl property obtained by ANZ from a third party valuer, Jones Lang LaSalle ("JLL") in the sum of $5,500,000 (Ex J1, 8021-8065). Mr Boros also referred to his decision to set a gross rent at the amount of $360,000 per annum, which he contended was in PPI's best interests (Boros [76]) and referred to the execution of the Second Lease. Mr Boros also relied on enquiries he had made of a local real estate agent prior to entry into the Second Lease and, in oral evidence given by leave, his evidence was that he was advised of the price range that would be achieved on a sale of the property and the rent per square metre that would be paid on a nearby property, if someone wanted to rent such a property (T209-210). Mr Boros also relied on a consent to lease by ANZ, which he contended involved ANZ's assessment of whether the lease was at an appropriate rental, although the evidence did not establish that contention.

Failure to ensure that PPI kept proper financial records PPI's pleaded case and evidence

1. PPI pleads (5FASC [53]) its obligation under s 286 of the Act to keep written financial records that correctly record and explain its transactions and financial position and that would enable true and fair financial statements to be prepared and audited and to retain those records and then pleads (5FASC [54]ff) matters relating to its difficulty in obtaining access to those records from Mr Boros in the period from September 2016. PPI then pleads (5FASC [63]ff) a failure to keep written financial records required by s 286 of the Act from 3 March 2008 until 12 September 2016 and that Mr Boros, by failing to cause PPI to keep such records, contravened his duty to exercise his powers and discharge his duties with a degree of care and diligence that a reasonable person would exercise under s 180 of the Act. PPI claims that it has suffered loss and damage and is entitled to compensation by reason of this contravention (5FASC [64]-[64A]), but the only particularised loss and damage which is the subject of any evidence is the cost of engaging Ms Bateman to review the financial records of PPI and its related companies to ascertain PPI's true financial position.
2. Ms Bateman addressed aspects of the alleged failure to keep proper books and records of PPI in her reports dated 1 March 2018 and 27 June 2019 at the time those reports were prepared (Ex P8 and P9) and in paragraphs 175-186 of her report dated 30 August 2019 (Ex P10), which were admitted with limiting orders under s 136 of the Evidence Act 1995 (NSW) as I noted above. Her evidence in those reports appears partly to reflect inadequacy in the Defendants' production of documents in the proceedings, at the time those reports were prepared, which may not involve a failure to keep or maintain financial records for PPI as required by the Act. Ms Bateman also there advanced several specific criticisms of the accounting of particular matters by Pages Group companies, although only matters relating to the financial records of PPI are relevant to this allegation. Ms Bateman referred to the treatment of investments in other companies and the share premium reserve in those companies' financial records, and her evidence was that those matters should be disclosed as an asset in PPI's balance sheets. Ms Bateman also advanced other criticisms of accounts of other companies, which I address below in respect of the oppression claim.

Claim as to rent and outgoings under the First Lease PPI's pleaded case and evidence

1. By way of background to this claim, PPI purchased the Punchbowl property in 2001 and, in June 2004, PPI executed the First Lease which provided for a lease of that property to PEH for a period of five years commencing on 15 June 2004 until 14 June 2009, with options to renew for two further periods of five years each. The rent payable by PEH under the First Lease was $20,000 per month (inclusive of GST) payable in advance on the 15th day of each month, under cl 3 of the First Lease and Item 6 of the Reference Schedule. That rent was "reviewed annually" on the first and each subsequent anniversary of the commencement date of the lease in accordance with cl 4 of the First Lease and Item 7 of the Reference Schedule. On balance, it seems to me that "review" took place without the need for further action of the parties to initiate it, since the new rent was determined by the formula specified in the First Lease. PEH was also obliged to pay, within 20 business days after receiving an itemised statement from PPI after the end of each 12-month period of the lease, specified Operating Costs for the Punchbowl property under cll 5.1 and 5.2 of the First Lease. Clause 13.3 of the First Lease provides that PEH is obliged to pay interest to PPI on any rent, Operating Costs or other money payable by PEH to PPI and unpaid for 10 business days at a rate equal to 2% per annum above the highest overdraft rate charged as at the due date for payment by PPI's bank for commercial loans in excess of $100,000, from the date the relevant payment was due.
2. It is common ground that, after the First Lease expired without the option to renew it being exercised on 14 June 2009, and until the Second Lease was executed, PEH continued to occupy the property under the holding over provision in cl 2.2 of the First lease (Defence [66A]). That clause provides that, during any holdover term after 14 June 2009 (which does not include if parties enter a new lease pursuant to exercise of an option), PPI may increase the monthly rent by giving the tenant one month's written notice, but if it does so, the rent review mechanism applying the Consumer Price Index increases will not apply. It seems to me that term necessarily assumes that the rent review mechanisms under cl 4 of the First Lease continued to apply to bring about an annual rent increase during that period, where that did not occur, since the exclusion of its operation if that occurred would otherwise be superfluous.

Monies paid by PPI to the benefit of PEH PPI's pleaded case and evidence

1. Paragraphs 75-78 of the Fifth Further Amended Statement of Claim plead an increase in the indebtedness of PPI to ANZ between March 2008 and November 2016. PPI pleads that Mr Boros caused the amount of PPI's secured borrowings to increase in that time, by causing PPI to secure loans and facilities for its associated entities against the Punchbowl property, and Mr Boros pleads a somewhat convoluted defence to this claim. In his affidavit dated 30 January 2018, Mr Boros referred to PPI's Fixed Rate Commercial Bill Facility with ANZ which he characterised as "part of the package of cross-collateralised facilities advanced by ANZ to the Pages Group of companies". He referred to a letter of offer dated 22 April 2009, by which ANZ renewed the Page Group facilities totalling $9,933,500 comprising $4,314,000 advanced to PEH; $1,519,500 advanced to Phire and $4,100,000 advanced to PPI, and to the securities provided in that respect. PPI no longer presses the claims for any breach of duty arising from these matters, which are now relied on only as background to other pleaded claims.
2. PPI also brings a claim for breach of statutory and fiduciary duties against Mr Boros in respect of monies allegedly paid by PPI to the benefit of PEH (5FASC [116]-[123]). PPI pleads that, on 10 March 2016, Mr Boros caused the limit of PPI's (then) Cash Advance Facility with ANZ to be increased by $1,705,000 from $3,860,000 to $5,565,000; PPI pleads that his purpose in increasing PPI's facility limit was to allow money to be drawn from that facility and used to repay an Asset Finance Facility provided by ANZ to PEH; and, on 21 March 2016, ANZ drew $1,658,931.43 on PPI's Cash Advance Facility on Mr Boros' direction and used those funds to repay the balance then owing by PEH to it under PEH's Asset Finance Facility.
3. Mr Boros also pleads (Defence [116A]) the circumstances of this transaction, which he contends reflected ANZ's requirement that the Pages Group pay down its facilities following the appointment of voluntary administrators to Phire; a consequential refinancing which increased the amount of PPI's Cash Advance Facility beyond the amount previously available under a previous facility, with the additional amount being applied to repay PEH's Asset Finance Facility; and that the transaction did not increase PPI's combined liabilities as principal and guarantor (although, I interpolate, the transaction significantly increased the principal amount borrowed by PPI) and reduced the Pages Group's monthly recurring costs by $100,000 since ANZ accepted interest only payments on the loan to PPI.

Failure to maintain PPI's GST registration

1. Paragraphs 129-135 of the Fifth Further Amended Statement of Claim plead that Mr Boros failed to maintain PPI's registration for GST between December 2005 and 1 September 2016. PPI relies on paragraphs 177 and 192 of Ms Bateman's report dated 1 March 2018 (Ex P8) and paragraphs 58-59 and 125 of her report dated 30 August 2019 (Ex P10). Mr White accepts that this matter has had no consequence, since the Australian Taxation Office has not imposed any penalty or sought to recover any interest in respect of unremitted GST on PPI. It is not necessary to determine the allegation of breach of statutory duty in respect of this matter, or Mr Boros' convoluted defence to it, where it has no consequence to any claim for damages or compensation against Mr Boros and where PPI's oppression and winding up claims may be determined on other grounds.

Claim for loan of $124,000 by PPI to PEH PPI's pleaded claim and evidence

1. Paragraphs 136-139 of the Fifth Further Amended Statement of Claim plead an entry in PEH's financial records referring to a loan made by PPI to PEH in the financial year ending 30 June 2015 and plead that Mr Boros failed to keep adequate written financial records for PPI that correctly recorded and explained that transaction in contravention of his director's duty. PPI relies on paragraphs 136-139 of Ms Bateman's report dated 1 March 2018 (P8), paragraphs 84-89 of her report dated 30 August 2019 (Ex P10) and paragraphs 282-284 of her report dated 4 June 2020 (Ex P11) in respect of this claim. Ms Bateman's 30 August 2019 report refers to inconsistencies in the treatment of the loan of $124,000 as at 30 June 2015, as being either a loan from PEH to PPI or a loan from PPI to PEH. While that matter raises a further concern as to the accuracy of PPI's accounts, it also undermines PPI's claim as to the existence of a loan owed to it of this amount. Ms Bateman's report dated 4 June 2020 refers to the record of that loan in PEH's 2015 financial statements as a liability owed by PEH to PPI, and to the absence of a record of that loan in PPI's financial statements as at 30 June 2015, and notes the absence of any reference to a carpark repair (to which Mr Boros refers in evidence) in those financial statements.
2. Mr Boros' evidence in his affidavit dated 17 April 2020 is in turn that: "My recollection is that the $124,000 loan in PEH's accounts at the end of FY 2015 was or the cost of resealing the carpark of the [Punchbowl] Premises and that this was mistaken because this was a repair liability of PPI, not PEH, under the [First] Lease." That evidence was admitted with a limiting order under s 136 of the Evidence Act as evidence of his understanding only, and is not proof of the fact asserted. Mr Boros was cross-examined as to documentation recording a $124,000 to PPI (T386ff), and his evidence was that the loan was no longer recorded in PPI's accounts because it was "applied", although it is not apparent what he intended by that term, and also that the financial records showed that that loan had been "applied or repaid" (T389).
3. Mr Boros' submissions in response to this claim refers to his affidavit evidence; denies the allegations; he submits that he, as a director, relied on the Pages Group's accounts department to ensure all entries were made correctly and in good faith and that he did not carry out any entries of his own and "always relied on qualified accounting staff"; and he also submits that the amount of $124,000 was fully accounted for. I have addressed the question of reliance on accounting staff above.

Claim for false financial record in Sales' financial records PPI's pleaded claim and evidence

1. PPI pleads (5FASC [140]-[141]) matters relating to a loan by Sales to PPI recorded in the financial statement for Sales for the year ended 30 June 2016 in the amount of $4,436,879 and an associated record in Sales' general ledger of a payment of "rent in advance" to PPI in respect of the Second Lease as at 30 June 2016 in the same amount. PPI then pleads (5FASC [142]) that the "loan" or "rent in advance" amounts were not received by PPI (5FASC [143]-[146]) and that: "143. [Mr Boros] was aware that Pages Sales had recorded a false transaction of $4,436,879 in its financial records to the benefit of Pages Sales and the detriment of PPI. 144. [Mr Boros] had an indirect interest of 26.67% in Pages Sales through his interest in Hun. 145. In breach of his fiduciary duty referred to in paragraph 46(d) above, the [Mr Boros] failed to avoid a situation in which there was a conflict between his own interests and the interest of PPI. 146. By reason of the breach referred to in paragraph 145 above, [PPI] has suffered loss and damage." The reference in paragraph 145 to the "fiduciary" duty pleaded in paragraph 46(d) is here to the pleaded duty to avoid a conflict between PPI's interests and Mr Boros' personal interests. As I noted above, the law does not recognise such a duty, although Mr Boros was obliged to avoid a conflict between his duty to PPI and his personal interest, or between his duty to PPI and his duty to Sales.
2. PPI relies on paragraphs 19-21, 96-99, 130-131, 180 and Schedule 1 of Ms Bateman's first report dated 1 March 2018 (Ex P8) in respect of these claims, which was prepared at a time when she did not have the full range of financial records discovered in the proceedings. Ms Bateman's evidence is there that she has found no evidence of payments to Mrs Page that could be considered loan repayments, and payments by the companies to or on behalf of Mrs Page should properly have been treated as dividends or shareholder loans. There is evidence that payments were in fact made to Mrs Page, so this finding appears to reflect Ms Bateman's view as to the proper characterisation of those payments or possibly the inadequacy of the information that had then been provided to her. Ms Bateman also comments ([96]-[99] on a spreadsheet on which Mr Boros relied, which was addressed as a submission only; paragraphs 130-131 of her report seek to establish the content of subpoenaed documents, which is not a matter as to which Ms Bateman can properly lead expert accounting evidence; and paragraph 180 of her report criticises the treatment of an item recorded as "Contributed Equity - Tess Loan" in accounts produced on subpoena. PPI also relies on aspects of Ms Bateman's report dated 30 August 2019 (Ex P10). Ms Bateman there notes ([94]) a loan recorded in Sales' financial statements for $4,436,879 in 2016 and 2017; and she notes ([102]-[104]) the absence of work papers supporting these entries in the documents then produced to Ms Bateman. She also expresses views ([142]-[161], plainly outside the scope of proper expert accounting evidence, as to the suggested absence of support in the financial records for matters then pleaded in paragraphs 66B and 82A of the Defence to the Further Amended Statement of Claim in respect of the alleged financial arrangements with Mrs Page.

Claim in respect of payments to PPI

1. Paragraph 147 of the Fifth Further Amended Statement of Claim pleads that: "The Financial Statements for PPI for the period to 12 September 2016 do not record the matters required by s 286 of the Act in respect of payments of $1,358,366 alleged by [Mr Boros] to have been made by Phire and Pages Sales to PPI since January 2006, including correctly recording and explaining those transactions and whether those amounts were loans, reimbursements, dividend distributions or expenses incurred by Phire or Pages Sales." PPI also pleads a breach of Mr Boros' duty of care and diligence under s 180 of the Act in that regard.
2. This claim is directed to payments totalling $1,358,366 listed in a spreadsheet contained at pages 201-214 of Exhibit AB-1 to Mr Boros' affidavit affirmed 30 January 2018. The facts of those payments has not been established where that spreadsheet was admitted as a submission only and the payments were not otherwise proved. This claim therefore fails because its premise is not established. It is therefore not necessary to determine the balance of the claim or Mr Boros' defence to it.

Failure to record PPI's assets in its books PPI's pleaded claim and evidence

1. PPI pleads (5FASC [150]-[153]) a failure to record certain of its assets in its financial records. The pleaded claim relates to PPI's shareholding in companies within the Pages Group and to PPI's share of the share premium reserve of Phire and Sales, and Mr White cross-examined Mr Boros to seek to establish that the value of share premium accounts in those companies should have been recorded in PPI's financial records.
2. PPI relies on paragraphs 16-32 of Ms Bateman's report dated 27 June 2019 (Ex P9), paragraphs 178-180 of her report dated 30 August 2019 (Ex P10) and paragraphs 195-197, 297-298, 359 and 497 of her report dated 4 June 2020 (Ex P11) in respect of the pleaded failure to record shareholdings and share premium reserves in PPI's financial records. Ms Bateman's 27 June 2019 report refers to a failure to record an investment in Pages Exhibition Hire Pty Ltd and Austructures in PPI's financial records. In paragraph 178 of her report dated 30 August 2019, Ms Bateman expresses the view that PPI's investments in several companies in the Pages Group should be disclosed as an asset in PPI's balance sheet and that there is no record of those investments in PPI's financial records, and expresses the view that PPI's investment in Phire and PEH should also show the share premiums paid, without identifying any specific accounting standard or other professional practice to support that conclusion in respect of the share premium account. A substantially similar view is expressed in Ms Bateman's report dated 4 June 2020, again without reference to any accounting standard or professional practice which requires the suggested treatment in respect of the share premium reserve. That issue is of particular difficulty where the status of such an account may be uncertain following the abolition of par value for shares, which underpinned the recognition of a share premium. Unfortunately, it seems to me that Ms Bateman's evidence as to these matters does not rise beyond a bare ipse dixit as to the proper treatment of these matters.
3. Mr Boros' evidence, admitted with a limiting order under s 136 of the Evidence Act, is that the treatment of the share premium reserves held by Phire and Sales is a "question of accounting treatment" where he relied on the Pages Group's internal and external accounting personnel, and that PPI's shareholdings in the relevant companies were recorded in the books and records of those companies (Boros 17.4.20 [151]). Mr Boros was also cross-examined as to the suggested failure to record PPI's interests in share premium reserves in its accounts (T359ff) and contended that the position would reflect adjustments made by the Pages Group's accounts staff, which would have been reviewed by the company's auditor (T360). Determination

Use of Sales' assets to pay Mr Boros' debt in respect of the Phire DOCA PPI's pleaded case and evidence

1. Paragraphs 154-157 of the Fifth Further Amended Statement of Claim plead a diminution of the value of PPI's interest in Sales by the use of its assets to pay a personal debt of Mr Boros, arising in respect of the DOCA relating to Phire. Ms Bateman addresses this issue in paragraph 198 of her report dated 4 June 2020 (Ex P11), which notes that the DOCA records that the director of Phire, Mr Boros, was to pay $320,000 and that amount is recorded as paid by Sales in its financial records. Ms Bateman there expresses the view, which I disregard so far as it is outside her professional expertise, that that debt should have been paid by Mr Boros in his own right.
2. In his affidavit dated 17 April 2020, Mr Boros claims that the payment for which he assumed liability under cl 5.1 of the DOCA for Phire, of $320,000, "was for the benefit of [Sales] in that it had assumed Phire's business", and he relies on an indemnity provision in Sales' constitution for any expense, loss or liability incurred in a relevant capacity. That indemnity provision had no application, and does not justify the payment of that liability by Sales, since the liability was not incurred by Mr Boros as an officer of Sales. In cross-examination, Mr Boros in turn suggested (T291) that Sales was obliged to pay that amount "through my commitment the funds agreed to by Pages Sales to take over all the trade creditors and trade debtors of Pages Hire Centre." It does not seem to me that the treatment of Phire's creditors by Sales, which raised difficulties which I address in paragraphs 179ff, created any such obligation in favour of Mr Boros.
3. PPI alleges (5FASC [156]) several breaches of duty by Mr Boros in this respect, pleaded as follows: "By failing as the sole director of PPI (or in the alternative failing to attempt) to exercise PPI's rights as a 26.67% shareholder of Pages Sales to prevent the payment of his personal debt by Pages Sales, [Mr Boros]: (a) did not exercise his powers and discharge his duties as the director of PPI in good faith in the best interests of PPI, contrary to s 181 of the Act; (b) improperly used his position as a director of PPI to gain an advantage for himself, contrary to s 182 of the Act; and (c) breached his fiduciary duties owed to PPI referred to in paragraphs 46(a), 46(b), 46(c) and 46(d) above."

Sale of "triple storey structure" by PEH to Phire PPI's pleaded case and evidence

1. Paragraphs 162-167 of the Fifth Further Amended Statement of Claim plead the sale of an asset, being a "triple storey structure", by PEH to Phire, about three months before Phire was placed under administration. The pleaded breach is a failure by Mr Boros as the sole director of PPI to exercise PPI's "rights as a 50% shareholder of PEH" to prevent the asset transfer from PEH to Phire. PPI again does not plead, as a material fact, the manner in which it would or should have exercised such rights to prevent that asset transfer.
2. This issue is addressed in paragraphs 8(k), 83-87, 204-205 and 273-281 of Ms Bateman's report dated 4 June 2020 (Ex P11). Ms Bateman summarises her opinion ([8(k)]) as being that the transfer of the "triple storey structure" from Phire to Sales: "[r]esults in the loss by [Phire] to claim on the $4.3 loan to PEH prior to entering voluntary liquidation. Further, based on the audited financial statements [Phire] was not in financial difficulty as at 30 June 2015 and held net assets of $5.3m."
3. Ms Bateman notes ([83]) that the largest asset held by Phire at 30 June 2015 was its loan to PEH of $4,269,085 and refers to Phire's "purchase" of the triple storey structure for $4,115,569.51 and to Mr Boros' evidence that that purchase price was based on future revenues from that structure, although Phire then ceased to trade on 30 June 2015 and Sales took over its business. Ms Bateman notes the absence of documents supporting that calculation of that "value" and that the effect of the sale was to substantially extinguish Phire's loan to PEH in exchange for an asset which it did not receive. There is substantial force in those comments, although it should be noted that that transaction had an adverse effect upon Phire and its creditors, rather than on PPI which was a shareholder in PEH and indirectly benefited from it in that capacity.
4. In his affidavit dated 17 April 2020, Mr Boros refers to the history of the use of the "triple storey structure", to its book value recorded in the general ledger of PEH of $1,024,763.60 as at 30 June 2015 and to the sale of that structure to Phire for $4,115,569.51 on 1 July 2015, which Mr Boros contends was a value "based on the future revenues it was anticipated to generate" and he contends that the triple storey structure remained in PEH's possession when Phire went into voluntary administration and Phire was unable to pay for it (Boros [123]). Mr Boros' evidence is that the triple storey structure was subsequently sold for scrap (Boros [127]). Submissions and determination

Transfer of PEH's shares in HHA to Mrs Boros PPI's pleaded case and evidence

1. Paragraphs 168-171 of the Fifth Further Amended Statement of Claim plead the transfer of PEH's shares in Hospitality Hire (Aust) Pty Ltd ("HHA") to Mr Boros' wife, Ms Jean Boros, for a nominal price of $12. PPI pleads that: 168. From about 29 October 2003 until 12 July 2007, PEH owned 100% of the share capital in [HHA], a company of which [Mr Boros] had been the sole director and secretary from incorporation on 9 August 2001 until 12 July 2007, and of which his wife, the fourth defendant has been the sole director since 12 July 2007. 169. On or about 12 July 2007, [Mr Boros] and [Mr Thatcher] caused (or in the alternative permitted) PEH's shares in [HHA] to be transferred to [Mr Boros'] wife, the fourth defendant, for a nominal price of $12, which was less than the true value of those shares at that time. 170. The transfer of those shares from PEH to [Mrs Boros] for a price of $12 was not in the best interests of PPI (as a 50% shareholder of PEH). 171. By failing (or in the alternative failing to attempt) to exercise PPI's rights as a 50% shareholder of PEH to prevent the transfer of PEH's interest in [HHA] to his wife at a nominal price of $12, [Mr Boros]: (a) did not exercise his powers and discharge his duties as an officer of PPI in good faith in the best interests of PPI, contrary to s 181 of the Act; (b) improperly used his position as an officer of PPI to gain an advantage for his wife, contrary to s 182 of the Act; and (c) breached his fiduciary duties owed to PPI referred to in paragraphs 46(a), 46(b), 46(c) and 46(d) above by engaging in a dishonest and fraudulent design.
2. This matter is addressed in paragraphs 285-296 of Ms Bateman's report dated 4 June 2020 (P11). Ms Bateman there expresses the view that relevant accounting standards, which she does not identify, with regard to the transfer of ownership and control in HHA were not met. She also expresses views, which were not properly founded in any expertise as an accountant, as to the extent to which shareholders in PEH had been properly informed of the financial position of HHA at the time of transfer, and also advances a criticism, equally outside her accounting expertise, of the purpose of the transaction. She comments as to the conclusions to be reached from Mr Boros' evidence and also expresses further views as to the appropriateness of the transaction which are plainly not proper matters for expert accounting evidence. Ms Bateman's comments as to this transaction are of limited assistance.

Transfer of Phire's business to Sales PPI's pleaded case and evidence

1. Paragraphs 184-195 of the Fifth Further Amended Statement of Claim plead the circumstances of a transfer of Phire's business to Sales, in a somewhat complex pleading. The first aspect of that pleading identifies the relevant steps in the transaction. PPI pleads (5FASC [184]) that, on 21 November 2014, Mr Boros caused Sales to be incorporated with PPI owning 100 of its 300 shares. Next, PPI pleads (5FASC [185]) that, as at 30 June 2015, Phire had surplus assets of $5.3m, including unappropriated profits of $4.7m. I am unable to reach that finding, where this claim involves PPI accepting, for its perceived advantage, the accuracy of information contained in accounts which it has otherwise demonstrated are unreliable in substantial respects.
2. PPI then pleads (5FASC [186]-[187]) that, on 8 September 2015, Mr Boros caused the company previously known as "Pages Hire Centre (NSW) Pty Ltd" to change its name to "Phire Pty Ltd", likely in preparation for its voluntary administration and, on 9 September 2015, as the then sole director of that company, he appointed voluntary administrators to that company under s 436A of the Act. PPI then pleads (5FASC [188]) that, on 16 September 2015, Mr Boros caused 20 of the 100 shares owned by PPI in Sales to be transferred for no consideration, leaving PPI with 80 of the 100 shares (although mathematically it may mean 80 of the 300 shares) (26.67%) of Sales. It also pleads (5FASC [189]-[190]) that, from 21 November 2014 to about 25 August 2015, Mr Boros caused the business of Phire to be transferred to Sales for no consideration and, on 25 August 2015, Mr Boros resigned as the director and company secretary of Sales and appointed Mr Thatcher as its company secretary, leaving Mr Thatcher as then the sole director and company secretary of Sales.
3. PPI pleads (5FASC [191]-[195]) the result of these transactions and the alleged breach of duty involved in them as follows: "191. As a result of the actions of [Mr Boros] described in paragraphs 184 to 190 above, PPI went from a position of owning a 50% interest in the business operations of the Pages group of companies through its 50% interest in Phire, to owning only a 26.67% interest in the business operations of the group after that business was transferred to Pages Sales. 192. By failing to protect PPI's 50% interest in the business, [Mr Boros]: (a) did not exercise his powers and discharge his duties as the director of PPI in good faith in the best interests of PPI, contrary to s 181 of the Act; (b) improperly used his position as a director of PPI to gain an advantage for himself, his wife the fourth defendant, and Mr Thatcher, contrary to s 182 of the Act; and (c) breached his fiduciary duties owed to PPI referred to in paragraphs 46(a), 46(b), 46(c) and 46(d) above. 193. As a result of the contraventions and breaches referred to in paragraph 192 above, PPI has suffered loss and damage equivalent to 23.3% of the value of the business operations of the Pages group. 194. By reason of the contraventions by [Mr Boros] referred to in paragraph 192(a) and 192(b) above, PPI is entitled to an order under s 1317H of the Act that [Mr Boros] compensate PPI for the damage suffered by PPI as a result of those contraventions. 195. By reason of the breaches by the first defendant referred to in paragraph 192(c) above, PPI is entitled to equitable damages for the loss and damage suffered by PPI as a result of those breaches."

Oppression and winding up on the just and equitable ground in respect of PEH, Phire and Sales PPI's oppression claim as to PEH, Phire and Sales

1. PPI pleads that several of the matters which I have addressed above and a failure by PEH, Phire and Sales to keep proper financial records (5FASC [197], [201], [204], [208], [211], [215]), which I address below, were conduct contrary to the interest of the members of PEH, Phire and Sales as a whole and oppressive to, and unfairly prejudicial to, PPI's interests as a member of those companies. PPI's pleading (5FASC [216]) claims for oppression under s 232 of the Act and for winding up on the just and equitable grounds under s 461(1)(e) and (k) of the Act on that basis. PPI also seeks declarations that the affairs of PEH, Sales and Phire have been and are being conducted in a manner that is oppressive or unfairly prejudicial to it, or unfairly discriminatory against it, or contrary to the interests of the members as a whole within the meaning of s 232 of the Act and/or in a manner that is unfair and unjust to other members, including PPI, within the meaning of s 461(1)(e) and (k) of the Corporations Act (5FASC, Relief, [12C]-[12E]).
2. I first turn to the applicable legal principles, as to which I have drawn upon in my summary of these principles in Re Pure Nature Sydney Pty Ltd [2018] NSWSC 914 and Re ICB Medical Distributors Pty Ltd [2018] NSWSC 1315 at [65]ff. Section 232 of the Corporations Act provides that the Court may make an order under s 233 if, relevantly, the conduct of a company's affairs is either contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity. That section and its predecessors extend to conduct involving "commercial unfairness" or where the conduct complained of involves a visible departure from the standards of fair dealing and a violation of the conditions of fair play, or a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 704; Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459. In Morgan v 45 Flers Avenue Pty Ltd above at 704, Young J observed that the phrases "oppressive, unfairly prejudicial or unfairly discriminatory" in a predecessor to s 232 of the Corporations Act should be construed as "a composite whole and the individual elements mentioned in the section should be considered merely as different aspects of the essential criterion, namely commercial unfairness". His Honour also there noted that whether oppression was established was to be determined by reference to the nature of the business carried on by the company and the nature of the relations between its participants and: "whether objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair."

PPI's claim in respect of dividends from Phire

1. Paragraphs 217-218 of the Fifth Further Amended Statement of Claim plead a failure to ensure PPI received dividends due to it from Phire, as follows: "217. Between 2007 and 2013 Phire declared dividends totalling approximately $4,913,729, of which PPI was entitled to 50% of that amount, namely approximately $2,456,865. 218. Despite PPI's entitlement to dividends from Phire of approximately $2,456,865, and payment of the dividends being recorded in the purported audited financial statements of Phire, it actually received $1,076,104 less than that amount."
2. PPI relies on paragraphs 8(e), 24-26, and 490-495 of Ms Bateman's report dated 4 June 2020 (Ex 11) in respect of this issue. Paragraph 8(e) identifies a shortfall of dividend payments to PPI totalling $1,076,104 in the years 2007-2013, and notes that Phire's financial records treat those dividends as paid, although PPI's financial statements do not record it receiving them. This matter is further addressed in paragraphs 24-26 and 490-495 of that report, which compare the amount of dividends recorded as received in PPI's financial statements and the amount of dividends recorded as paid in Phire's financial statements. Ms Bateman describes the dividends as "interim" dividends, although Mr Boros' position in closing submissions was that, if final dividends were not paid due to Phire's financial position, this would have affected all shareholders, and they would have been notified at the time. Neither party tendered any board resolution approving the payment of dividends at any time.
3. In cross-examination on another topic, Mr Boros at one point appeared to suggest that dividends recorded in the companies' accounts "would not necessarily be moving forward and the proposal for the payment of dividends would be taken out because [of] whatever issues the company had" (T227). As Mr White points out in closing submissions, Mr Boros accepted in cross-examination that PPI was entitled to 50% of the dividends paid by Phire and conceded a duty owed to PPI in this regard, as follows: "Q. If you assume for a moment it is correct, would you agree that in your position as a director of PPI, being aware of these dividends having been recorded in the financial statements at Pages Hire, declared and paid that it would have been a failure of your duty to act in the interest of PPI by not insuring (sic) that they were paid? A. If they - if the - if this statement is correct, yeah, I would have to agree with that, yes." (T357-358)

Claims in respect of Austructures Pleadings and evidence

1. PPI pleads (5FASC [225]-[237]) a failure to ensure that Austructures kept proper financial records and also pleads certain transactions involving Austructures, which are relied on to support a claim for oppression in respect of Austructures.
2. First, PPI pleads (5FASC [226]-[228]) that, as at 30 June 2015, PEH's balance sheet recorded a loan from PEH to Austructures of $506,646.50; on 7 July 2015, the PEH general ledgers record that the loan to Austructures was increased by $300,000 to $806,646.50; and the loan of $806,646.50 from PEH to Austructures was not recorded in the financial records of Austructures as required by s 286 of the Act. Ms Bateman's report dated 8 July 2020 refers to this loan to Austructures, increasing from $506,646.50 to $806,646.50 between 30 June 2015 and 7 July 2015, before that loan was written off in the books of PEH on 31 December 2015, and to the absence of reference to that loan in Austructures' financial records of Austructures.
3. Second, PPI pleads (5FASC [229]-[232]) that, between 24 July 2015 and 23 January 2020, Austructures made payments to Sales totalling a net amount of $539,861.19 (relying on paragraph 521 of Ms Bateman's expert report dated 4 June 2020 and page 5 of her expert report dated 8 July 2020); in 2016, HHA provided a loan to Austructures of $100,000; and those payments were also not recorded in the written financial records of Austructures as required by s 286 of the Act. PPI pleads (5FASC (233]) that Austructures has failed to produce any board resolutions or loan agreements recording the terms or purpose of the loans from PEH to it, or any evidence of the application of the loan moneys, or any explanation as to why the loans from PEH were written off.
4. Third, PPI pleads (5FASC ([234]-[236]) that, between January and March 2020, assets with a total value of $473,965 were transferred from an undisclosed source on to the balance sheet of Austructures, together with accumulated depreciation of $376,885; that at least some of the assets transferred to the ownership of Austructures are items of equipment and vehicles owned by PEH and used in the Pages event hire business, which have been placed into the possession and purported ownership of Austructures without an arms-length agreement to assign the assets for proper consideration; and that written financial records have not been kept that explain the asset and accumulated depreciation transfers recorded on Austructures' balance sheet as required by s 286 of the Act. Ms Bateman's report dated 8 July 2020 identifies an increase in assets of Austructures between January and March 2020, which she infers reflect assets transferred into Austructures from a related entity at cost less accumulated depreciation.

Declaratory relief and claims for compensation

1. PPI seeks a declaration under s 1317E of the Corporations Act that Mr Boros has contravened ss 181, 182 and/or 183 of the Act (5FASC, Relief, [1]). That section provides that, if the Court is satisfied that a person has contravened a civil penalty provision, the Court must make a declaration of contravention. Subsection 1317E(2) requires that that declaration specify the conduct that constituted the contravention. No declaration of a contravention of those provisions of the Act can be made under that section, since the balance of authority indicates that that section only applies to proceedings in which relief is sought by the Australian Securities and Investments Commission: One.Tel Ltd (in liq) v Rich [2005] NSWSC 226; (2005) 190 FLR 443; 53 ACSR 623 at [69]-[70]; Primacy Underwriting Agency Pty Ltd v Kilborn [2007] NSWSC 158; (2007) 25 ACLC 160 at [6]-[8].
2. PPI also seeks an order that Mr Boros pay compensation to it under s 1317H of the Corporations Act (5FASC, Relief, [2]), which permits the Court to order a person to compensate a corporation for damage suffered by the corporation if the person has contravened a corporation civil penalty provision in relation to the corporation, and damage resulted from the contravention. Section 1317J(2) of the Act provides that, relevantly, the corporation may apply for a compensation order. PPI has standing to seek such an order, but only in respect of a breach of a statutory duty owed to PPI and not in relation to a breach of a statutory duty owed to any other entity. In the alternative, PPI seeks an order that Mr Boros pay equitable damages to it for breach of a fiduciary duty owed to it (5FASC, Relief, [3]).
3. I have found that Mr Boros breached his fiduciary duty by reason of a conflict of interest in respect of the entry into the Second Lease, but no loss and no profit accruing to PEH or to him has been established by reason of that breach. I have found that Mr Boros is liable to pay compensation to PPI in respect of a contravention of s 180 of the Act, referable to unpaid rent and interest from 4 April 2011 to 12 September 2016. I have found that Mr Boros also breached his statutory duty in respect of the failure to keep true and fair accounts of PPI, but not that the entire cost of Ms Bateman's work is recoverable by reason of that breach, and PPI should be left to recover its reasonable costs of Ms Bateman's reports as costs of the proceedings. I have also found that Mr Boros also breached his fiduciary duty by reason of a conflict of interest in respect of the additional borrowing from PPI to pay down amounts owed by PEH and addressed the quantification of its loss above. PPI's other claims for compensation have not been established.

Mr Boros' claims for relief under s 1317S and s 1318 of the Corporations Act

1. As I noted above, Mr Boros pleaded claims for relief under ss 1317S and 1318 of the Corporations Act, which should be addressed in respect of his conduct as a whole. The Court has power to grant relief from a contravention of a civil penalty provision under s 1317S of the Act if, in "eligible proceedings" brought against a person, it appears to the Court that that person has or may have contravened a civil penalty provision, but that he or she had acted honestly and, having regard to all the circumstances of the case (including those connected with his or her appointment as an officer of a corporation), the person ought fairly to be excused for the contravention. Section 1318 in turn allows a Court to relieve, relevantly, an officer of a corporation from liability in civil proceedings for negligence, default, breach of duty or breach of trust, if he or she establishes that he or she acted honestly, and that he or she ought fairly to be excused for the negligence, default, breach of duty or breach of trust having regard to all of the circumstances of the case including those connected with his or her appointment.
2. In Daniels v Anderson (1995) 37 NSWLR 438 at 525, Clarke and Sheller JJA observed that a corresponding section allows the Court: "to excuse company officers from liability in situations where it would be unjust and oppressive not to do so, recognising that such officers are businessmen and women who act in an environment involving risk in commercial decision-making."
3. Matters relevant to relief under these sections include whether the defendant acted honestly; a value judgment whether, having regard to all the circumstances of the case, the defendant ought fairly to be excused for the contravention; and whether, as a matter of discretion, the Court should exercise its power to relieve the defendant from any liability: Australian Securities and Investments Commission v Edwards (No 3) [2006] NSWSC 376; (2006) 57 ACSR 209 at [10]; Australian Securities and Investments Commission v Healey (No 2) [2011] FCA 1003; (2011) 85 ACSR 654 at [83]-[84]; Great Southern Finance Pty Ltd (in liq) v Rhodes above at [60]; Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724 at [236]-[237]. Whether relief from liability should be granted under these sections depend not only on subjective honesty but also on the degree to which the relevant conduct fell short of the required standard, the seriousness of the contravention and its actual or potential consequences, any element of impropriety such as deception and personal gain and any contrition of the applicant and the need for general deterrence is also relevant: Morley v Australian Securities and Investments Commission (No 2) [2011] NSWCA 110; (2011) 83 ACSR 620 at [44], [49]-[50].

Mr Boros' other defences including his defence based on payments to Mrs Page and PPI

1. Mr Boros pleads (Defence [238]) a defence under s 85 of the Trustee Act 1925 (NSW) in answer to the claims made against him as an officer of PPI. He does not clearly identify the acts to which he claims that defence applies or the material facts on which he relies to establish it. The gravamen of that defence is that those unidentified acts amounted to a breach of trust by PPI for which it is or may be liable; PPI, through Mr Boros' act or acts, acted honestly and reasonably, and ought fairly be excused for the breach of trust; the Court ought to relieve PPI wholly or partly from its personal liability for the breach pursuant to s 85 of the Trustee Act; and liability would not then be imposed on Boros. That defence cannot succeed, because no claim for breach of trust is made or established against PPI, as to which any relief is required; and, to the extent that I have found Mr Boros to have breached his duties, he did not act reasonably in that regard; and this defence also cannot succeed where Mr Boros' claims for relief under ss 1317S and 1318 of the Corporations Act fail, for the reasons noted above.
2. By paragraphs 239-240 of his Defence, Mr Boros purportedly reserved an entitlement to rely on provisions of the Trust Deed for the Pages Family Discretionary Trust and PPI's constitution. Mr Boros made no further submission in that respect and no basis for relief under any such provision is established.
3. I should also address a more substantial defence raised by Mr Boros, repeated throughout his Defence to the Fourth Further Amended Statement of Claim, referable to payments made by companies in the Pages Group to PPI and Mrs Page. This issue overlaps with PPI's claim in respect of an accounting entry in respect of the loan of $4,436,879 recorded in Sales' financial records which I have addressed above. In paragraph 66B of his Defence to the Fourth Further Amended Statement of Claim, Mr Boros now pleads, in answer to PPI's claim in respect of the First Lease, that: (a) In the period from Mr Page's death on 27 July 2003 until Mr Boros' removal as director of PPI on 12 September 2016, being the combined period of Mrs Page's directorship of PPI and Mr Boros' directorship of PPI, there was a financial arrangement in place between PPI and PEH to the effect that PEH would make payments to or on behalf of PPI to ensure that (among other things) PPI met all of its financial obligations, including loan repayments to the ANZ Bank; (b) Pursuant to the foregoing financial arrangement, PPI received from PEH, in addition to the payment of rent and operating costs, in the period from 1 January 2006 to 31 December 2016, further amounts total[ing] $1,358,366 ("Further PPI Payments"); (c) In the premises, PEH is entitled to rely on and/or set off the Further PPI Payments against any deficiency or shortfall of its obligations under the First Lease (which is denied).

Costs and orders

1. I am therefore satisfied that PPI has established aspects of its case against Mr Boros, and that PEH, Sales, Phire and Austructures should each be wound up by the Court.
2. PPI sought an order for costs and interest on costs under s 101(4) of the Civil Procedure Act 2005 (NSW) from the date that the costs concerned were paid by it. PPI has been successful in part and there should at least be an order that Mr Boros pay a portion of its costs of the proceedings. My preliminary view is that Mr Boros should not be ordered to pay all of PPI's costs of the proceedings, where PPI has pursued several claims that were not likely to succeed as a matter of law; several claims that could recover no more than, at best, Ms Bateman's costs which were likely to be recoverable as costs of the proceedings in any event; and other claims for which it concedes it could establish no loss. It seems to me that the case would have been significantly shorter had PPI exercised greater rigour in determining which claims should have been pursued. I will hear the parties in that regard.
3. Accordingly, I make the following orders: 1 Mr Peter Gothard and Ms Robyn Duggan of KPMG be appointed liquidators jointly and severally of Pages Equipment Holdings Pty Ltd (in prov liq); Pages Sales Pty Ltd (in prov liq); Phire Pty Ltd (in prov liq) and Pages Austructures Pty Ltd. 2 The parties otherwise bring in agreed short minutes of order to give effect to this judgment, including as to costs, within 14 days or, if there is no agreement between them, their respective draft minutes of order and short submissions as to the differences between them. 3 These orders be entered forthwith.

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