Taxa Australia Pty Ltd v G Wang & Anor

Supreme Court of NSW|2018-08-23|Before: Black J

Background facts and affidavit evidence

There is a degree of common ground as to the background facts. Taxa was incorporated on 30 January 2012 and sold sportswear, club wear and school uniforms and also, Mr Wang contends, provided other services. It is common ground that Mr Wang was a director of Taxa from its incorporation on 30 January 2012 until at least 1 November 2015; was its company secretary from 12 October 2015 to 1 November 2015; and was the managing director of Taxa, a senior employee of Taxa and had overall responsibility for its day-to-day operations in that period. Mr Wang owns 400 shares in the capital of Taxa.
The Second Cross-Defendant, Mr Diao, owns the other 600 shares in Taxa. Mr Diao was a director of Taxa from 12 October 2015 to date and the secretary of Taxa from 1 November 2015 to date. Mr Diao's evidence (Diao 20.10.17 [39]) is that he has worked in Taxa since becoming a director in October or November 2015 and he manages its day-to-day operations at its warehouse and is responsible for its sales and orders. Mr Diao was also a director and secretary of another company, Taxa International Pty Ltd ("Taxa International"), from 19 February 2016 to date; is the sole shareholder of Taxa International; and was a director of another company, JD3 Pty Ltd ("JD3"), from 19 November 2015 to 2 May 2016, and owned one-third of the shares in JD3 during that period. The parties also agreed certain facts as to business interests of Mr Diao in China (Ex J1), namely that Mr Diao is a shareholder and legal representative of an entity known as Onavel; Mr Diao's wife is the shareholder of Tianjin Ita-Fashion Tech Co Ltd ("Ita-Fashion"); an employee of Mr Diao is the shareholder of an entity known as Qiming; Mr Diao has a direct or indirect ownership interest in Qiming, Onavel and Ita-Fashion; and, by his direct or indirect ownership interest in those entities, Mr Diao exercises control over those entities.
The Third Cross-Defendant, Mr Borghese, was a director of Taxa from 23 March 2016 to date; has been employed by Taxa as a sales person from August 2014; and was a director of Taxa International from 19 February 2016 to date.

Claim in respect of Taxa Uniform

The primary allegation pressed by Taxa at the hearing relates to a business, or at least a business name and bank account, conducted by Ms Yao under the name "Taxa Uniform". There is little factual dispute as to this claim, which is largely addressed by admissions that were properly made by Mr Wang and Ms Yao as to the relevant facts. Those admissions are consistent with the evidence to which I referred above.
Taxa pleads, and Mr Wang admits, that Ms Yao caused a business name "Taxa Uniform" to be registered and has been the owner of Taxa Uniform (SOC [30]-[31]). Ms Yao admits that, on or about 12 July 2014, she caused the business name "Taxa Uniform" to be registered, but contends that she did so at Mr Wang's direction, and admits that she has been the owner of Taxa Uniform from 12 July 2014 to date. Taxa also pleads (SOC [32]) that the business name Taxa Uniform was not owned by Taxa or used in connection with any legitimate business operations of Taxa. Mr Wang and Ms Yao admit that Taxa Uniform was not a business name owned by Taxa and deny that Taxa Uniform was not used in connection with any legitimate business operations of Taxa. Taxa also pleads (SOC [33]) the existence of a bank account held or used by Taxa Uniform. Mr Wang responds that he was a director of Taxa, and that he advised Ms Yao to set up that account for reimbursing unpaid salary for Ms Yao and he had access and control of the account. Ms Yao admits that she caused the Taxa Uniform Bank Account to be opened on or about 14 July 2014; claims that bank account was held or used by Taxa Uniform; and pleads that that account was: "Not a bank account in the name of [Taxa], but as it was opened at the direction of [Mr Wang], a director of [Taxa] at the relevant time [Ms Yao] believed it was controlled by [Taxa] and does not admit that it was not controlled by [Taxa]." Putting aside the question of any subjective belief of Ms Yao, which would not be material to the determination of this case, it is plain that the Taxa Uniform Bank Account was not in fact controlled by Taxa. That is self-evident, so far as and Mr Wang and Ms Yao did not repay all the monies held in that account to Taxa when these proceedings were commenced, and do not now admit Taxa's claim to all of the monies held in that account.
Taxa pleads (SOC [34]-[35]) that, from 30 January 2012 to 1 November 2015, Mr Wang and Ms Yao directed customers of Taxa to make payments in respect of goods and services provided by it into the Taxa Uniform Bank Account or a credit card payment facility operated by Taxa Uniform and customers made such payments. Mr Elliott, who appears for Taxa, accepted in closing submissions that that allegation should be limited to the period after July 2014 when that account was established. Mr Wang responds that, from 16 July 2014 until 25 November 2015, he directed Ms Yao to direct customers of Taxa to deposit payments in respect of goods provided by Taxa to the Taxa Uniform Bank Account; and claims that Ms Yao has used the payments personally in lieu of her unpaid salary from Taxa allegedly in an amount of $155,971.01, unpaid annual leave from Taxa allegedly in the amount of $21,930.92, and unpaid superannuation from Taxa allegedly in the sum of $30,562.50 for the period between 1 March 2012 and 25 November 2015. That proposition is cross-referenced to and depends upon Ms Yao's Cross-Claim in the proceedings. Mr Wang also pleads that Taxa Uniform and its bank account have also been used for other matters unrelated to Taxa's business and accepts that an amount of approximately $136,000 banked into that account "possibly related to the [Taxa] payment had been banked to Taxa Uniform account". Ms Yao admits that, from 14 July 2014 until 25 November 2015, she directed Taxa's customers to make payments in respect of goods and services provided by it to the Taxa Uniform Bank Account or a credit card payment facility operated by Taxa Uniform, and says she gave that direction on Mr Wang's instructions and also admits that, from 14 July 2014 until 25 November 2015, Taxa's customers made payments to the Taxa Uniform Bank Account or a credit card payment facility operated by Taxa Uniform.
Taxa pleads (SOC [36]-[38]) and Mr Wang does not admit that the Taxa Uniform Payments (as defined) were in respect of goods supplied by Taxa to its customers, were properly payable to Taxa and, further or alternatively, that Mr Wang and Ms Yao directed specified customers of Taxa to make payments exceeding $107,546.93 to the Taxa Uniform Bank Account or a credit card payment facility operated by Taxa Uniform, where the payments were in respect of goods and services provided to those customers by Taxa, and in circumstances where monies payable for those goods and services were properly payable by those customers to Taxa, and thereby wrongly diverted funds in excess of $107,546.93 away from Taxa. Taxa also pleads [SOC [40]) that Mr Wang and Ms Yao have received the Taxa Uniform Payments and have not passed on those payments to Taxa or otherwise accounted for them to Taxa. Mr Wang does not admit those allegations.
Ms Yao admits both that the Taxa Uniform Payments were in respect of goods supplied by Taxa to its customers and that the Taxa Uniform Payments were monies properly payable to Taxa. Ms Yao also admits the amount of approximately $136,000 for the Taxa Uniform Payments; appears to admit that she received or had the benefit of that amount, although her pleading in that respect was somewhat unclear; says that amount is subject to an offsetting claim in respect of $146,137 for her unpaid salary, $14,743.85 for unpaid annual leave and $26,962.50 for unpaid superannuation; and pleads that she paid into Court the amount of $136,000 "which amount, if any, is to be paid out of Court subject to the determination of the Cross-Claim". Ms Yao specifically accepted (Yao Defence [40]) that Taxa was entitled to that amount of $136,000, subject to the determination of her offsetting claim in the Cross-Claim. Ms Yao confirmed in closing submissions that she accepted that the amount of $136,000 was due to Taxa in respect of the Taxa Uniform Bank Account, subject to her Cross-Claim, but contended that Taxa had not satisfied an onus of proof to establish that any greater amount was due to it from that account.

Claim for breach of duty by Mr Wang

Taxa pleads, and Mr Wang admits, that he owed directors' duties to Taxa under the Corporations Act 2001 (Cth), at common law and in equity, and Taxa pleads that those duties included duties to act with care, skill and diligence, to act in good faith in Taxa's interests, to act for a proper purpose, not to improperly use his position to gain an advantage or cause detriment to it, and not to breach his fiduciary obligations owed to it. Mr Wang does not address the specific formulation of those claims, and does not admit Taxa's formulation of the content of his duties under ss 180-182 of the Corporations Act. Taxa also pleads, but Mr Wang does not admit, that it was an implied term of his contract of employment with Taxa that he would act with good faith and fidelity towards Taxa, act with mutual trust and confidence, not misappropriate Taxa's property, including money, and not take steps to divert business or corporate opportunities away from Taxa. It will not be necessary to address that implied term given the findings that I reach on other grounds.
Mr Elliott submits, and I accept, that Mr Wang was subject to the duties imposed by ss 180-182 of the Corporations Act as a director of Taxa. There is no real issue as to the content of those duties in this case, as distinct from their application in the particular facts. Section 180 of the Corporations Act requires that a director or other officer of a corporation must 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. Mr Elliott submits, and I accept, that the statutory duty of care and diligence under that section overlaps with directors' duty of care arising at general law. He also refers to my summary of the applicable principles in Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 at [408] as follows: "In Australian Securities Commission v Gallagher above at 52-53, 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] NSWCA 131; (2003) 179 FLR 1), 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] FCA 263; (2010) 77 ACSR 525 at [70] per Gordon J and Diamond Hill Mining Pty Ltd v Huang Jim Mining Pty Ltd [2011] VSC 288; (2011) 84 ACSR 616 at [90] per Croft J."
Mr Elliott also submits, and I accept, that a question of breach can only be answered by balancing the foreseeable risk of harm against the potential benefits that could reasonably have been expected to accrue to the company from the conduct in question: Vrisakis v Australian Securities Commission (1993) 9 WAR 395 at 450; Australian Securities and Investments Commission v Cassimatis (No 8) [2016] FCA 1023; (2016) 336 ALR 209 at [479]; Re FAL Healthy Beverages Pty Ltd and FAL Retail Pty Ltd [2017] NSWSC 476 at [55].
Section 181 of the Corporations Act requires a director or officer of a corporation to exercise his or her powers and discharge his or her duties in good faith in the best interests of the corporation and for a proper purpose. There are differing views as to whether any part of that duty is to be assessed by a subjective standard, which it is not necessary to address for present purposes. Mr Elliott refers to my summary of the relevant principles in respect of that section and the broadly corresponding general law duty in Re Colorado Products Pty Ltd (in prov liq) above at [419]-[421] as follows: "In Chew v R (1991) 4 WAR 21; 5 ACSR 473 at 499, Malcolm CJ summarised the requirements of that duty as being that directors (1) must exercise their powers in the interests of the company, and must not misuse or abuse their power; (2) must avoid conflict between their personal interests and those of the company; (3) must not take advantage of their position to make secret profits; and (4) must not misappropriate the company's assets for themselves. The case law is divided as to whether a contravention of s 181(1)(a) of the Corporations Act requires that it be established that a director engaged deliberately in conduct which he or she knew was not in the company's best interests: for example, Forge v Australian Securities and Investments Commission [2004] NSWCA 448; (2004) 213 ALR 574 at [245] per McColl JA (with whom Handley and Santow JJA agreed); Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd above at [150], varied on appeal on another point in V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd above. In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1, the Court of Appeal of the Supreme Court of Western Australia unanimously held that the corresponding general law duty to act in good faith in the company's best interests was subjective and would be complied with if directors honestly believed they acted in the company's best interests (at [923] per Lee AJA, at [1988] per Drummond AJA, [2027], at [2772], [2795] per Carr AJA). The alternative view is that a contravention of that limb of s 181 can be established if the law objectively considers that what the director did was improper, even if the director subjectively believed that he or she was acting in the company's best interests: see, for example, Australian Growth Resources Corporation Pty Ltd v Van Reesema (1988) 13 ACLR 261 at 270-271; 6 ACLC 529 per King CJ; Mernda Developments Pty Ltd (in liq) v Alamanda Property Investments No 2 Pty Ltd [2011] VSCA 392; (2011) 86 ACSR 277 at [32]-[33]. The difference in those approaches does not seem to me to be material for the purposes of this case. The section may be contravened if a director promotes his or her personal interest in a situation where there is a conflict or real or substantial possibility of a conflict between those interests and the company's interests: Australian Securities and Investments Commission v Adler above at [735]; Parker above at [72]. A contravention of s 181(1)(b) may also be established if a director does not exercise his or her powers for the purpose for which they were conferred or exercised them for an improper purpose, and the bulk of authority indicates that question is to be determined objectively: Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187; 14 ACSR 109 at 137 per Ipp J (with whom Malcolm CJ and Seaman J agreed); Australian Securities and Investments Commission v Adler above at [738]-[739]; Parker above at [73]. In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) above, the majority held that whether a director acts for an improper purpose, for the purposes of the corresponding general law duty, is determined objectively involving an assessment by the Court of what was reasonable in the circumstances (at [933] per Lee AJA, at [1988], [2027], [2073] per Drummond AJA). By contrast, Carr AJA held that the test whether directors had acted for an improper purpose was primarily subjective, although a decision would be voidable if directors acted in good faith for a purpose that was beyond their powers or for a collateral purpose (at [2923])."
There is again no real controversy as to the content of that duty in this case and I proceed on the basis of that formulation of the duty. Mr Elliott also submits, and I accept, that the application of a company's funds, without regard to its separate identity and without considering whether it was in the interests of the company and its members, will likely constitute a breach of that section: Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428; (2009) 74 ACSR 282.
Section 182 of the Corporations Act prohibits a director, secretary, officer or employee of a corporation from improperly using his or her position to gain an advantage for himself or herself or someone else, or cause detriment to the corporation. Mr Elliott again refers to my summary of the applicable principles in Re Colorado Products Pty Ltd (in prov liq) above at [432]-[433] as follows: "An objective standard is to be applied in determining what amounts to an "improper" use of position, and impropriety is established by "a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case": R v Byrnes above at 514-515 per Brennan, Deane, Toohey and Gaudron JJ; R v Towey (1996) 132 FLR 434; 21 ACSR 46 at 57 per Gleeson CJ (with whom Allen and James JJ agreed). In Doyle v Australian Securities and Investments Commission [2005] HCA 78; (2005) 227 CLR 18, the High Court observed (at [35]) that the relevant conduct would be improper if it amounted to: "a breach of the standards of conduct that would be expected of a person in [the director's] position by reasonable persons with knowledge of the duties, powers and authority of his position as director, and the circumstances of the case, including the commercial context." It is not necessary that the relevant director gain an advantage for himself or herself or cause a detriment to the company in order to establish a contravention of the section: Chew v R [1992] HCA 18; (1992) 173 CLR 626 at 633 per Mason CJ, Brennan, Gaudron and McHugh JJ. An objective test was also applied to determine whether this section was contravened in Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd above and, in Hydrocool Pty Ltd v Hepburn (No 4) [2011] FCA 495; (2011) 279 ALR 646, Siopsis J followed R v Byrnes, above, in holding that impropriety for the purposes of this section was objective and did not require subjective knowledge of impropriety and followed Chew v R, above, in holding that a contravention could be established although the desired object was not achieved. …"
Mr Wang submitted that he decided to create the Taxa Uniform Bank Account in July 2014, so as to address unpaid wages for Ms Yao and to create a reserve fund to avoid transferring further funds to Mr Diao in China. He claims to have set up a policy that the amount of the fund should not, inter alia, exceed the amount owed to Ms Yao; and that any amount of transfer should be approved by him and implemented by changing the bank details on the relevant invoice, but not the title of the invoice which referred to Taxa rather than Taxa Uniform. Mr Wang submitted that the amounts transferred to Taxa Uniform had been used partly for payment of wages for a shop assistant in the West Ryde Shop and partly for "reimbursing" part of Ms Yao's wages.
Mr Elliott responds, and I accept, that: "There can be no legitimate explanation for Mr Wang during the time that he was a director of Taxa to cause Taxa's customers to make payments into the Taxa Uniform Bank Account - which was not owned or controlled by Taxa. Mr Wang pleads at paragraph 29 of the Defence that he had "access and control of the account" - however, he was not an authorised signatory on the account." I should add that, even if Mr Wang did personally have control of that account, that would have been no answer to the claim against him where Taxa did not have such control. As Mr Elliott also pointed out, the concerns of Mr Wang as to the transfer of more funds to Mr Diao and the payment of Ms Yao's wages could have been addressed by establishing a separate account controlled by Taxa, rather than placing funds in an account controlled by Ms Yao (T206).
Taxa's claim for breach of s 180 of the Corporations Act and the corresponding general law duty may well be unnecessary, where the matters alleged against Mr Wang, if established, would be a breach of the statutory duties in ss 181 and 182 of the Corporations Act and the corresponding general law duties. It is plain that Mr Wang at least permitted Ms Yao's conduct in respect of the Taxa Uniform Bank Account, and there is no suggestion that her conduct was without his knowledge or support. To the extent that it is necessary to determine that claim, it seems to me that a director's permitting the diversion of amounts due to Taxa for goods sold to an account under the control of his de facto spouse, exposing those amounts to the risk of misappropriation and his spouse's insolvency, is a breach of the duty of care and diligence under s 180 of the Corporations Act and the broadly corresponding general law duty.
The diversion of the relevant payments to the account of Taxa Uniform, under Ms Yao's control, was plainly not undertaken in Taxa's best interests and involved a misappropriation of Taxa's assets for the benefit of Mr Wang and Ms Yao, notwithstanding the concerns they claim to have had as to Ms Yao's salary and amounts remitted by Taxa to Mr Diao. That conduct therefore constituted a breach of s 181 of the Corporations Act and a breach of the corresponding general law duty. The diversion of the relevant payments to the account of Taxa Uniform under Ms Yao's control was also improper and advantaged at least Ms Yao and disadvantaged Taxa, and constituted a plain breach of s 182 of the Corporations Act and a breach of the corresponding general law duty. Mr Elliott also advanced submissions as to the duties applicable to Mr Wang, to the extent that he was an employee of Taxa. I do not consider it necessary to address that matter where it would add nothing to the findings that I have reached in respect of Mr Wang's breach of his director's duties. I will address Ms Yao's duties as an employee of Taxa below.
Turning to the quantification of the claim against Mr Wang in respect of the Taxa Uniform Bank Account, Mr Wang's evidence (Wang 9.7.18 [13(f)]) is that: "[Ms Yao] and I had reconciled the amount of $136,000 which was directed from business of [Taxa], and had been banked to Taxa Uniform for the reimbursement of [Ms Yao's] unpaid wages. In September 2016, [Ms Yao] voluntarily banked $136,000 to the Court's bank account." In my view, that paragraph amounts to an admission that the amount of $136,000 banked into the account of Taxa Uniform had been derived from Taxa's business, although Mr Wang was at times not prepared to accept that proposition in the course of the hearing. It is nonetheless necessary to address the evidence and submissions in respect of quantification of this claim, against the contingency that an appellate court may not treat Mr Wang's evidence as an admission as to that matter, and also to determine whether the total amount paid into the account, $184,099.96 (less concessions made by Taxa in closing submissions and several disputed transactions which I address below) or the lesser amount of $136,000 admitted by Mr Wang (and also Ms Yao) is recoverable in respect of this claim.
Taxa identified several diverted payments to the Taxa Uniform Bank Account in a schedule to its Statement of Claim, totalling $107,546.93. Mr Elliott emphasised, in submissions, that the list of payments comprised in that schedule comprised some but not all of the amount claimed by Taxa and that Taxa claimed that all payments into the Taxa Uniform Bank Account were its property. The total payments into that account were summarised in Ex P4 as totalling $184,099.96, prior to the four transactions noted below and an additional deduction of $21,935.45 conceded by Taxa in Mr Elliott's closing oral submissions, as set out in paragraph 47 below.
Taxa relies on the bank statements for the Taxa Uniform Bank Account (Ex J2 1619-1660) and Mr Elliott submits that, between 16 July 2014 and 6 October 2014, deposits of $184,099.96 were made into the Taxa Uniform Bank Account, comprising amounts described as "merchant settlements" totalling $33,418.24; a payment referable to International Cargo Express ("ICE") on 10 December 2015 of $24,085.70; payments described as the "West Ryde deposits" totalling $53,311.95; a payment described as "Top Ryde deposit" of $50.00; and payments described as "Rachel [Ms Yao]" of $5,348.21 and "other" of $67,885.86. A number of withdrawals in substantial amounts totalling $184,565.03 were also made from the Taxa Uniform Bank Account between 16 July 2014 and 6 October 2014, as set out in that summary (Ex P4). I do not understand Mr Wang or Ms Yao to have contested the factual accuracy of that summary, subject to the several adjustments which I address below. Ms Yao accepted in cross-examination that, aside from the minimal payments made in respect of her hobby business (T21, T174) and four individual transactions, all of the payments made into Taxa Uniform Bank Account concerned Taxa sales (T174-175), although she also identified several other duplications and adjustments which Taxa accepted and which I address below.
Mr Wang submitted that Taxa had only proved a claim for $6,872.80 in respect of the amounts paid into the Taxa Uniform Bank Account relating to three invoices issued by Taxa. I do not accept that submission. The admissions made by Mr Wang in his affidavit, by Ms Yao in her Defence and the evidence as to the manner in which the Taxa Uniform Bank Account was established and the fact that payments into that account were largely made by Taxa's clients in respect of its sales is sufficient to establish Taxa's claim to monies held in that account, subject to the adjustments noted below. Mr Wang also referred to amounts claimed by Taxa in respect of this claim that he said had in fact been paid to Taxa and to duplicated invoices or invoices that had not been sent to Taxa's customers. Two specific transactions to which Mr Wang referred, transactions 9 and 68 in Annexure A to Taxa's Statement of Claim, are no longer pressed by Taxa. Mr Wang's submissions did not further identify any adjustments which were required by reason of those matters, and I do not understand them to extend beyond those identified by Ms Yao and largely accepted by Taxa, which I now turn to address.
The first possible offset against Taxa's claim to the monies in the Taxa Uniform Bank Account arises from Ms Yao's submission that, between late August 2014 and November 2015, she received payments from a hobby business of supplying Australian products to her relatives in China, which she accepted were minimal, into the Taxa Uniform Bank Account. Ms Yao did not quantify those payments by evidence and, in my view, she had at least an evidentiary onus to establish the amount of any offset arising from those payments. That offset is not established.
Ms Yao also identified four transactions that she contended should be deducted from Taxa's claim to the amounts made into the Taxa Uniform Bank Account. First, she claims a payment by Taxa of $24,085.70 into that account is a reimbursement for a payment of invoice B00018756 issued by ICE (Ex J2, 5245). That invoice was not paid by Ms Yao from the Taxa Uniform Bank Account but by another entity, Schannel Pty Ltd ("Schannel"), apparently from funds that had originated from Taxa and were also under Mr Wang's or Ms Yao's control, on 12 August 2014 (Ex J2, 2366). Mr Wang's evidence in cross-examination was that Ms Yao had paid the ICE invoice from her own funds (T147). I do not accept that evidence, either in the literal sense or in the wider sense that Ms Yao rather than Taxa had the ultimate right to the funds in the account in Schannel's name. Ms Yao's evidence in cross-examination (T177) was that: "we borrowed the money from Schannel, and I repay back to Schannel to his personal account, reimbursed that. And then in December, [Taxa] reimbursed back that payment to me".
The Schannel bank statements do not establish that Ms Yao repaid any amount to Schannel from her own funds (Ex J2, 2328-2405) and there is no other evidence supporting the claim by Ms Yao that she repaid that amount to Schannel. In closing submissions (T221), I invited Ms Yao to identify any document that would establish that she had made a payment to Schannel in reimbursement of the amount paid by Schannel, including any document of Schannel that recorded the receipt of that payment from her or any record of her bank accounts which recorded her making that payment, and identified the possibility that evidence could be reopened prior to judgment and any such evidence tendered if it became available. No application to reopen to tender such evidence was made and no evidence of such a reimbursement was tendered before judgment was delivered. Mr Elliott submits, and I accept, that a basis for Taxa to reimburse the Taxa Uniform Bank Account (as distinct from, for example, Schannel) for that amount has not been established, and those funds are properly Taxa's funds.
Second, Ms Yao contends that a payment of $2,023.99 on 30 October 2015 to Ms An Li ought to be offset against this claim, and Taxa does not contest that offset on the basis that that payment was made for its benefit.
Third, Ms Yao contends that a reversal of a deposit on 3 July 2015 of $550 (Ex J2, 1638) ought to be deducted from this claim. Mr Elliott points out that payment and reversal has been included in Ex P4. Fourth, Ms Yao contends that a debit of $3,403.07 should be deducted as a refund of an overpayment made to Taxa Uniform. Mr Elliott points out that the Taxa Uniform Bank Account statements reveal that a credit of $4,218.17 was made on 2 October 2015 and a debit of $3,403.07 was made on 6 October 2015 (Ex J2, 1648) and that payment and reversal has also been included in Ex P4. No further adjustments are required in respect of these amounts.
Mr Elliott also accepted Ms Yao's submission that there should be several deductions from the amount claimed by Taxa in respect of Taxa Uniform, in respect of transactions numbered 9, 13, 31, 43, 46-47, 50, 61, 68, 77, 80, 82, 90, 93, 96, 101, 114-116 and 129 in Annexure A to Taxa's Statement of Claim, totalling $21,935.45. Ms Yao in turn accepted in oral submissions (T222) that those deductions fully addressed issues that she had raised in respect of duplications in the amounts claimed against her. Those deductions reduce the total of the identified diversions in the schedule to the Statement of Claim to $85,611.48 and the total of deposits into the Taxa Uniform Bank Account to $162,164.51, which are reduced further to $83,587.49 and $160,140.52 respectively after deducting the further amount of $2,023.99 in respect of Ms Li.
Mr Elliott submits, and I accept, that the Court should be satisfied that all of the funds paid into the Taxa Uniform Bank Account were in respect of goods supplied by Taxa to customers of Taxa, and were monies properly payable to Taxa. The amount recoverable on that basis against Mr Wang in respect of this claim is $160,140.52, after the deductions to which I have referred, and subject to his Cross-Claim in respect of salary and other entitlements which I address below. I also address the corresponding claim against Ms Yao, and her Cross-Claim, below. Taxa could not, of course, recover the amount claimed against Mr Wang, in respect of monies paid into the Taxa Uniform Bank Account, to the extent that it recovers any part of those funds against Ms Yao, where that would amount to double recovery. Although Taxa submitted a calculation of interest on this amount, I will address the question of interest in dealing with the orders to be made to give effect to this judgment.

Claim for breach of duty against Ms Yao

Taxa initially pleaded, but rightly did not press a claim that Ms Yao was an officer of Taxa as defined in s 9 of the Corporations Act and also did not press allegations she had contravened ss 180 and 181 of the Corporations Act which could not succeed where she was neither a director or officer of Taxa. Taxa presses allegations that Ms Yao was a senior employee of Taxa, its bookkeeper and had access to its books and records, its MYOB financial and accounting records and its bank accounts (SOC [11]). Although that allegation is not directed to Mr Wang, he does not admit that Ms Yao was a senior employee of Taxa or was its bookkeeper (although the latter was plainly the case) and contends that bookkeeping was only a small part of Ms Yao's work. He admits that Ms Yao had access to Taxa's books and records, its MYOB financial and accounting records and its bank account. Ms Yao admits that she was Taxa's bookkeeper, that she had access to its books and records and its MYOB financial and accounting records and its bank accounts, but does not admit she was a senior employee of Taxa. It has not been established that Ms Yao was a senior employee of Taxa, although nothing turns on that given the other findings that I reach below.
Taxa also pleads, and presses, an allegation that it was an implied term of the contract of employment between it and Ms Yao that she owed certain duties, and also contends that Ms Yao owed duties as an employee under s 182 of the Corporations Act, at common law and in equity (SOC [12]-[13]). Although that allegation is not made against Mr Wang, he denies it. Ms Yao does not admit the implied term of the contract of employment and does not admit that she owes duties to Taxa under s 182 of the Corporations Act, at common law or in equity. It is plain, however, that Ms Yao at least owed the duties that arose from her position as an employee of Taxa, and those duties are sufficient to support the claim against her in this case.
It is at least common ground that Ms Yao was an employee of Taxa. Ms Yao was Taxa's bookkeeper and assisted with many other aspects of Taxa's business. She accepted in cross-examination that she was responsible for maintaining Taxa's MYOB accounting system and making payments from Taxa's bank account (T164, 166). Mr Elliott submits, and I accept, that Ms Yao owed an implied duty of good faith and fidelity to Taxa not to engage in conduct which impeded the faithful performance of her obligations, or was destructive of the necessary confidence between employer and employee, and that duty included an obligation not to misappropriate Taxa's assets: Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 at 81 per Dixon and McTiernan JJ; Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 at [30] (French CJ, Bell and Keane JJ), [63]-[66] (Kiefel J). It is sufficient for present purposes to refer to Palmer J's summary of the applicable principles in Digital Pulse Pty Limited v Harris [2002] NSWSC 33 at [20ff] (varied in respect of other matters in Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298; (2003) 44 ACSR 390): "An employee has a duty to act in the interests of the employer with good faith and fidelity. That duty is implied in every contract of employment if it is not otherwise imposed by an express term. In addition, the duty is imposed upon every employee by the law of fiduciaries, the relationship of employer and employee being recognised as a paradigmatic fiduciary relationship. The obligations imposed by the duty are not coterminous with the employee's normal working hours: they govern all the activities of the employee, whenever undertaken, which are within the sphere of the employer's business operations and which could materially affect the employer's business interests. Whether a particular activity could materially affect the employer's business interests is a question of fact and degree. The duty of loyalty requires that an employee not place himself or herself in a position in which the employee's own interest in a transaction within the sphere of the employer's business operations conflicts with the employee's duty to act solely in the employer's interest in relation to that transaction. A fortiori, an employee may not take for himself or herself an opportunity within the sphere of the employee's business operations without the employer's fully informed consent. … The remedy for breach of the contractual duty of loyalty is damages. The remedy for breach of the fiduciary duty of loyalty is either an account of the profits derived by the employee from the breach or equitable compensation. The employer need not elect between these remedies until the time at which judgment is to be entered. …"
I have referred above to the evidence of diversion of amounts due to Taxa to the account controlled by Ms Yao under the "Taxa Uniform" name. In her opening submissions, Ms Yao addressed the circumstances in which the Taxa Uniform Bank Account was opened and how it was operated. She also referred to duplicated invoices and amounts that had been paid into Taxa's bank account, but accepts those matters have now been addressed by the amounts not pressed by Taxa in closing submissions. She also referred to the four specific transactions that I have addressed above, and to the receipt of "some payments" from her hobby business that I addressed above. Ms Yao noted that she had admitted in her Defence that the amount of $136,000 belonged to Taxa, and had paid that amount into Court, but submitted Taxa had not discharged its burden of proof for the larger amount of $184,099.96 that it claimed.
Mr Elliott submitted that: "… there can be no legitimate explanation for Ms Yao as an employee of Taxa to cause customers to make payments into the Taxa Uniform Bank Account, and utilise those funds for her benefit. The fact that Mr Wang provided her with a direction to make the relevant payments is irrelevant in circumstances where Ms Yao clearly had no legal entitlement to those funds. Ms Yao's transfer of funds to a bank account in which she was the sole beneficiary was a breach of the standards of conduct that would be expected of a person in the position in her position by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case."
In my view, the diversion of amounts due to Taxa for goods sold to an account under the control of Ms Yao, exposing those amounts to the risk of misappropriation and insolvency, is a breach of Ms Yao's duty of loyalty. That breach is not avoided or justified by Ms Yao's concerns as to unpaid salary or other claims against Taxa, which could have been pursued by legitimate means rather than by the appropriation by Ms Yao of monies due to Taxa, or by the fact that Mr Wang suggested or "directed" the improper course that Ms Yao pursued.
Taxa also pleads that, by reason of the matters relating to Taxa Uniform, Ms Yao failed to act for a proper purpose or improperly used her position as an employee to gain an advantage or cause detriment to Taxa and contravened s 182 of the Corporations Act and similarly claims its loss and damage against Ms Yao. That claim is established for the same reasons that the claim for breach of an employee's duties is established in respect of Ms Yao. As I noted above, Ms Yao admits liability for the amount of $136,000 which she has paid into Court, subject to her Cross-Claim. I have addressed the quantification of the claim against Mr Wang in respect of the Taxa Uniform Bank Account above and the claim against Ms Yao succeeds in the same amount of $160,140.52 and for the same reasons, subject to her Cross-Claim addressed below.

Allegations that were not pressed by Taxa

Taxa pleaded (SOC [29]) but did not press a claim that, from 30 January 2012 to 1 November 2015, Mr Wang and Ms Yao received cash payments from customers of Taxa; failed to bank some or all of those cash payments into Taxa's bank accounts; failed to record some or all of those cash payments in Taxa's financial records; and used some or all of those cash payments for their own personal purposes. There was in any event no evidentiary basis for the quantification of any cash payments received by Mr Wang and Ms Yao and that allegation, had it been pressed, could not have given rise to relief for Taxa. Taxa also pleaded but did not press allegations that, from September 2015, Mr Wang took steps to establish a new business in competition with Taxa and to divert business, income and profit away from Taxa. Taxa pleaded, but did not press, further allegations relating to dealings between Mr Wang and Ms Yao and Schannel, alleged dissipation of stock of Taxa and the alleged removal of certain items from Taxa's premises by Mr Wang and Ms Yao.

Ms Yao's Cross-Claim

By her First Cross-Claim Statement of Claim filed 8 July 2016, when she was represented by solicitors, Ms Yao brought a claim against Taxa for breach of employment contract, and to recover unpaid salary and employee entitlements in the sum of $188,403.35, plus interest and costs. That amount comprised amounts of $146,247 claimed for unpaid salary, $14,743.85 for unpaid annual leave and $27,412.50 for unpaid superannuation.
Ms Yao pleads that, in February 2012, Taxa employed her to perform the duties of a bookkeeper and other sales-related and general administrative and clerical duties. Taxa admits that, from 30 January 2012 to 1 November 2015, Ms Yao was an employee of Taxa and its bookkeeper but otherwise does not admit that allegation. Ms Yao pleads the terms of her employment contract, which is said to have been formed by a discussion between Mr Wang and herself at their home in January or February 2012, and to have included terms that Ms Yao would be remunerated by salary of $60,000 per annum; in addition to salary, she would be paid superannuation at a rate of 9%-9.5% of her salary in accordance with the Superannuation Guarantee (Administration) Act 1992 (Cth); and she would be entitled to 20 days annual leave per annum in accordance with the National Employment Standards in the Fair Work Act 2009 (Cth).
Ms Yao pleads, and Taxa does not admit, that her employment contract was varied in or about June 2013 in that Mr Wang and Ms Yao agreed to increase her annual salary from $60,000 to $90,000, exclusive of superannuation, effective from 1 July 2014. That allegation is particularised on the basis that: "The agreement to vary the Employment Contract was express, oral. It was made during a conversation between Mr George Wang, managing director of [Taxa], and [Ms Yao] in or about June 2013 at [Taxa's work address] during which Mr Wang told [Ms Yao] that her salary would increase to $90,000 effective from 1 July 2013." The increase in Ms Yao's salary has not been established. My attention was not drawn to any documentary evidence that corroborated that allegation, and Taxa did not conduct itself in a manner that was consistent with Ms Yao's salary having been increased, and such an increase is wholly inconsistent with correspondence between Mr Wang and Mr Diao in respect of Ms Yao's salary in 2015, to which I return below.
Ms Yao in turn pleads, and Taxa denies, that she is entitled to unpaid salary in the amount of $20,000 from 1 March 2012 until 30 June 2012; of $37,500.06 from 1 July 2012 until 30 June 2013, on the basis that a salary of $22,499.94 was paid in that period; of $90,000 in the period from 1 July 2013 until 30 June 2014, on the basis that no salary payments were made in that period; and she accepts that she was slightly overpaid by way of salary, against a base salary of $90,000 in the period from 1 July 2014 until 30 June 2015 and for the period 1 July 2015 until 25 November 2016.
Mr Wang referred, in his affidavit dated 11 December 2017 (relevantly admitted as submission only), to the amounts that were recorded by way of Ms Yao's paid salary in Taxa's MYOB accounting system and financial reports, and as to which PAYG information had been lodged with the Australian Taxation Office ("ATO"), in the amount of $22,499.95 for the 2013 financial year (which he described as "partially paid"); $91,153.88 for the 2015 financial year (which he described as "fully paid") and $22,500 for the period 1 July to 30 September 2015 (which he described as "fully paid"). Mr Wang's evidence, admitted as a submission only, was that Ms Yao's "fully paid" salary of $13,846 for the period 1 October 2015 to 25 November 2016 was also recorded into Taxa's MYOB accounting system. Mr Wang's evidence, admitted as a submission only, was that Ms Yao's "unpaid salaries" were not recorded in the MYOB accounting system and Taxa's financial report and had not been lodged with the ATO and that Ms Yao's unpaid salaries "were committed by [Taxa] to be reimbursed when [Taxa] is able to make the payments during the financial year 2015-2016".
In her affidavit dated 11 July 2017, Ms Yao referred to her employment by Taxa from 1 March 2012 as bookkeeper and office administrator. She sets out her job responsibilities which she performed during that period extending to her bookkeeper and accounting role, an officer administration role, sales support role, roles as purchase officer and retail buyer, a shop assistant, receptionist and marketing support role. Ms Yao's evidence of these matters appears to be directed to a proposition that she should have been paid a higher salary or, alternatively, if she was employed on award rates as Taxa contends, she would be entitled to be paid overtime. That question does not arise where I find below that she was employed on a contract providing for a salary greater than that which Taxa contended was the award for a bookkeeper. Ms Yao's evidence was also that she worked more than ten hours per day, and most weekends and public holidays during the period of 3 years when she worked with Taxa and never claimed payments for overtime or penalty rates for work undertaken outside normal working hours (Yao 11.7.17 [16]).
Ms Yao's evidence, admitted as a submission only with a limiting order under s 136 of the Evidence Act was that Taxa owed her outstanding wages and employee entitlements by way of unpaid salary in the amount of $186,082.20, unpaid annual leave in the amount of $21,930.92, unpaid superannuation in the amount of $30,562.5 [sic], for a total of $238,575.62. Ms Yao's evidence was that she was dismissed (with that characterisation being admitted with a limiting order under s 136 of the Evidence Act as a submission) on 25 November 2015, and it is common ground that she ceased employment with Taxa on that date. Ms Yao's evidence was that, due to cash flow issues, Taxa did not make superannuation payments for most employees; she voiced her concerns about that; but Mr Diao only agreed to pay superannuation for two other employees, Ms Guan and Mr Borghese (Yao 11.7.17 [47]). Ms Yao also accepts that she withdrew $20,000 from Taxa's account to pay salary to herself (Yao 11.7.17 [71]).
Ms Yao also relies on a loan agreement dated 30 September 2015 (Ex J2, 3468) between her and Taxa, signed by Ms Yao and by Mr Wang on Taxa's behalf. That loan agreement records that: "According to the regulations of Fair Work NSW, by October 2015, $138,103.17 AUD salaries plus $20,850 AUD totally [sic] $158,953.17 AUD, which have not been paid, should be paid to [Ms Yao]. 2. [Ms Yao] promises to loan $158,953.17 AUD to [Taxa] and [Taxa] promises to repay this principal amount to [Ms Yao], without interest payable on the unpaid principal. 3. Interest will be applied at 6% annual rate if [Taxa] default the payment [sic]." That loan agreement provides for repayment in full on 30 November 2015. That loan agreement appears to proceed on the basis that the specified amounts are due to Ms Yao, by reference to unspecified regulations of Fair Work NSW, and that proposition has not been established. I am not satisfied that that loan agreement gives rise to any entitlement of Ms Yao that does not arise from any underlying contractual entitlement to salary or any applicable award.
Mr Diao's evidence, in his affidavit dated 20 October 2017, was that Mr Wang had not spoken to him about Ms Yao's employment terms in 2012-2014 and he had not seen any employment contract between Taxa and Ms Yao. Mr Diao also referred (Diao 20.10.17 [7]) to a conversation in October 2015, where Mr Wang sought his agreement to changing Ms Yao's pay to $100,000 per annum so that Mr Wang and Ms Yao could borrow money for a house; and Mr Diao responded that Ms Yao should only be paid $60,000 per annum, which was what he and Mr Wang had agreed to. That conversation established that an agreement existed, at least between the directors, that Ms Yao should be paid $60,000 per annum, and supports an inference that agreement is likely to have been reached between Taxa and Ms Yao to that effect. By email dated 7 September 2015, to which I referred above, Mr Wang advised Mr Diao that Ms Yao had worked for Taxa for the last 3 years but had not been paid because of Taxa's cash flow problems; that Taxa should pay her $60,000 per year before tax from April 2012 to September 2015; and that she had been paid $59,396 and was owed $150,000. I have also referred above to a further email dated 9 September 2015 between Mr Wang and Mr Diao confirming agreement to a salary of $60,000 for Ms Wang.
Consistent with her pleaded case, Ms Yao relied in her closing submissions on an express, oral contract, made during conversations between Mr Wang and her in February 2012 at their home, which provided, inter alia, for a salary of $60,000 per annum. She contended that employment contract was varied in June 2013 so that she and Taxa (by Mr Wang) negotiated an increase in her annual salary to $90,000, effective from 1 July 2013. She contended the agreement to vary that contract was express and oral, although there was no admissible evidence of the conversations giving rise to the earlier contract or the suggested variation to it. She also made extensive submissions as to the extent of work which she had undertaken for Taxa and the range of her responsibilities, and contended that she should be paid the remuneration which was paid to other persons employed under class 457 visas, implicitly in addition to the salary paid to her for her bookkeeping duties. She also referred to long daily working hours and to working most weekends and public holidays, but not claiming payments for overtime or penalty rates, consistent with her affidavit evidence. She submitted her unpaid salary had not been recorded in Taxa's accounts because Mr Wang "tried to avoid accounting and taxation adjustments for the last three years" and that, in early July 2014, Mr Wang suggested "that gradually transfer some of [Taxa's] fund into [her] business bank account to compensate [her] unpaid salaries". In oral closing submissions, Ms Yao also emphasised the extent of work that she had done (T230). It seems to me that that does not take her claim further, since an agreement that she would be paid a higher salary cannot be established simply by showing that she could justifiably have been paid more for the amount of work she did.
Mr Elliott submitted that Ms Yao's claim was particularised as an express oral contract, reached during conversations between herself and Mr Wang in January or February 2012 and varied during conversations between her and Mr Wang in June 2013. Mr Elliott submits, obviously enough, that Ms Yao had the onus of establishing any oral contract for which she contended and pointed to the fact that Ms Yao had not adduced evidence of the conversations alleged to have occurred in February 2012 and June 2013. This seems to me to be too narrow a view, particularly in the case of a self-represented litigant. The function of pleadings is to afford procedural fairness and the Court is not strictly confined by them and should conduct the proceedings so as to promote a just outcome, and there would here be no relevant disadvantage to Taxa in addressing alternative legal bases which arise from the evidence led in the proceedings for Ms Yao's claim to remuneration and other entitlements: Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133 ; (2010) 189 FCR 356 at [55]; Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15; JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20 ; (2016) 329 ALR 625 at [410]-[411]. I also bear in mind that the terms of any contract between Taxa and Ms Wang are to be determined objectively: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]. I also proceed on the basis that strict requirements for the identification of an offer and acceptance may not be applicable where an ongoing relationship between the parties varies over time: Ormwave Pty Ltd v Smith [2007] NSWCA 210 at [68]-[75].
Mr Elliott submitted that an intention to create contractual relations is not established by the communications between Mr Diao and Mr Wang in September 2015 to which I referred above. I do not accept that submission, and it seems to me that such an intention can be inferred from agreement between Mr Wang and Mr Diao as to the amount of Ms Yao's salary and the continuance of the employment relationship between Taxa and Ms Yao.
Mr Elliott also submitted that any agreement between Taxa and Ms Yao arising from Mr Diao's and Mr Wang's agreement in September 2015 that she would be paid a salary of $60,000 per annum failed for lack of consideration. Mr Elliott relied for that submission on Anderson v Glass [1868] 5 WW&AB L 152, where the Supreme Court of Victoria held that an employer's promise to pay a wage increase both for the future and for a past period failed for lack of consideration in respect of the past period. In his judgment of three paragraphs, Stawell CJ accepted that the promise to pay the increased salary was without consideration, at law, because "[i]t was a promise to increase wages for services that had actually been performed before the promise was given" and that: "There is no doubt about what the parties honestly meant; but the law will not compel a man who wishes to withdraw from his word, to perform it, if he does not receive consideration for it."
I have not been able to locate any subsequent Australian decision which has referred to or approved that case, although it is cited in at least one commentary, CCH Australian Contract Law Commentary, for the proposition that past consideration is no consideration. That proposition itself requires qualification, since a later promise to pay an amount for services that were previously requested can be enforceable, either because that promise is evidence against the promisor of what is a reasonable amount, or because the original request and later promise together constitute a promise to pay a reasonable amount, as fixed by the agreement as to that amount. In Re Casey's Patents; Stewart v Casey [1892] 1 Ch 104 at 115-116, Bowen LJ observed that: "The fact of a past service raises an implication that at the time it was rendered it was to be paid for, and, if it was a service which was to be paid for, when you get in the subsequent document a promise to pay, that promise may be treated either as an admission which evidences or as a positive bargain which fixes the amount of that reasonable remuneration on the faith of which the service was originally rendered."
Similarly, in Pao On v Lau Yiu Long [1980] AC 614 at 629; [1979] 3 All ER 65 at 74, the Privy Council observed that: "An act done before the giving of a promise to make a payment or to confer some other benefit can sometimes be consideration for the promise. The act must have been done at the promisor's request: the parties must have understood that the act was to be remunerated either by a payment or the conferment of some other benefit: and payment, or the conferment of a benefit must have been legally enforceable had it been promised in advance." That analysis has been widely accepted in the Australian case law: Robertson v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29; QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 at [25]-[27]; Huntingdale Village Pty Ltd (recs and mgrs apptd) v Westgarth [2018] WASCA 90; (2018) 128 ACSR 168 at [83]-[84].
It seems to me that Ms Yao plainly provided services to Taxa at its request; Ms Yao and Taxa must have understood that those services were to be remunerated either by payment or the conferral of some other benefit on Ms Yao; the payment of a salary would have been legally enforceable had it been promised in advance; and that constituted sufficient consideration for an agreement between Taxa and Ms Yao, reflecting the terms agreed between Mr Wang and Mr Diao. On that basis, I consider that the agreement between Mr Wang and Mr Diao as to a salary of $60,000 per annum for Ms Yao then took effect, albeit informally, as an agreement between Taxa and Ms Yao, and Mr Elliott did not suggest the contrary if consideration for that agreement was established.
Mr Elliott also contends that the Court may also have regard to subsequent dealings between the parties to determine whether an oral agreement of the kind for which Ms Yao contended existed, as distinct from questions of construction as to such an agreement: Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 at [143]; see also Hightime Investments Pty Ltd v Adamus Resources Ltd [2012] WASC 295 at [98]-[99]. Mr Elliott refers to the absence of reference to liability for unpaid salary to Ms Yao in Taxa's balance sheets for the years 2013 to 2015. I give little weight to that matter given the manner in which Taxa's affairs were conducted in other respects. Mr Elliott also accepted that an award rate would have applied to Ms Yao, had no agreement as to salary been reached. I need not address that question, where I have held that such an agreement was reached in September 2015. Ms Yao did not plead an entitlement to overtime, although her evidence was that she worked extensive hours, including most weekends and holidays. It is not necessary to determine any claim as to overtime, where I have found that there was an agreement for Ms Yao to be remunerated by salary at higher than an award rate.
Mr Elliott helpfully calculated the amount of Ms Wang's salary entitlements at a salary of $60,000 per annum for the period from 1 March 2012 to 1 November 2015, which totalled $235,845.15. Mr Elliott submitted that that calculation had been undertaken on a basis of 52 weeks rather than 48 weeks and would therefore include any claim for annual leave on the basis that Ms Yao had not taken any leave (T210). I would approach the matter more simply, on the basis that that calculation reflected an agreement for a salary of $60,000 per annum, irrespective of whether Ms Yao worked for 48 or 52 weeks of the year.
Mr Elliott submits that the evidence establishes that Taxa paid Ms Yao salary in the amount of $179,542.82 for the period from 1 January 2013 to date. The evidence relied on for that proposition is largely PAYG payment summaries for the years ended 30 June 2013, recording payment of $22,499.94 (Ex J2, 4792); the year ended 30 June 2015, recording payment of $91,153.88 (Ex J2, 4793); the period 1 July 2015 to 30 September 2015, recording payment of $22,500 (Ex J2, 4794); and records of other payments made to Ms Yao between 24 September 2015 and 18 November 2015 totalling $53,389 (Ex J2, 1870-1872, 3506). Mr Elliott also notes that Taxa's payroll records recorded that Ms Yao was paid $136,153.83 in the period 31 January 2013 to 25 September 2015, and that was consistent with the PAYG payment summaries issued by Taxa to Ms Yao (Ex J2, 4792-4794).
Ms Yao accepted in cross-examination that she was paid $10,000 on 24 September 2015, $21,389 on 2 November 2015; $2,000 on 11 November 2015 and $20,000 on 18 November 2015 (T169-170), comprising the amount of $53,389 noted above. Taxa contends that those amounts were in addition to the payments of $136,153.83 recorded in the PAYG payment summary and in Taxa's payroll records for the period 31 January 2013 to 25 September 2015. Ms Yao's evidence in cross-examination was that those payments reflected amounts that had previously been recorded in the PAYG payment summary for $91,153.88 for the financial year to 30 June 2015 but had not in fact been paid to her in that period. Mr Elliott submits that that explanation should be rejected because the PAYG payment summary and Taxa's payroll records recorded gross payments made in that period and were signed by Mr Wang on 6 July 2015. I am not persuaded that the PAYG payment summary or payroll records should be given substantial weight in establishing the fact of payment of the full amount to Ms Yao, where the larger amount of $91,153.88 would properly have been recorded in the PAYG payment summary and payroll records if that amount had been derived by Ms Yao in the financial year to 30 June 2015 even if it had not been paid to her, because it was informally lent back to Taxa, not paid because of cash flow requirements, or not paid simply because Ms Yao was instead making withdrawals from the Taxa Uniform Bank Account.
The evidence as to this matter is unsatisfactory, because, as I noted above, neither Taxa nor Ms Yao tendered the bank records of Taxa which would record the amount of salary actually paid to Ms Yao during the period ended 30 June 2015 or the records of Ms Yao's personal bank account into which such a payment would be made. Those account records would likely have established whether the amount recorded in the PAYG payment summary and payroll records in the year ended 30 June 2015 had been paid in full, or the further amounts were paid in September and November 2015 to Ms Yao to complete the amount previously due but not paid for the earlier period. In oral submissions, I raised with the parties the desirability of tender of such evidence and the possibility that the case could be reopened to tender such evidence (T227-228). Ms Yao subsequently communicated with my Associate to identify some documents which she had found and other documents which she had difficulty in obtaining, but no agreement was reached between the parties as to the status of those documents and neither Taxa nor Ms Yao brought an application to reopen and tender those documents. It seems to me that Taxa had at least an evidentiary onus of establishing the amount it claims to have paid Ms Yao by way of salary, and Taxa has not discharged the onus of establishing that the amount of $53,389 was a further payment to Ms Yao rather than a late payment of part of the amount already recorded in the PAYG payment summary and payroll records. Taxa would be overcompensated for its loss if it recovered all of the payments from the Taxa Uniform Bank Account on an unproved assumption that the payments of $53,389 made in September and November 2015 were paid in addition to, rather than as late payment of, her salary for the year ended 30 June 2015.
Ms Yao accepted in cross-examination that she had also received weekly payments totalling $13,846.16 in the period from 25 September 2015 to 25 November 2015 (T168) which were not recorded in the MYOB ledger. In the result, there should be a deduction of $150,000, rounding up the total of $136,153.83 plus $13,846.16 by one cent, from the amount of salary due to Ms Yao over the period of $235,845.15, to reflect the amount she has been paid. The amount of salary owing to Ms Yao is therefore $85,845.15.
Ms Yao also claims that Taxa failed to pay her the value of her accrued entitlement to annual leave at or shortly after the date when her employment contract ended on 25 November 2015, and quantifies that amount as $74,794, on the premise that she took no annual leave during the relevant period. Mr Diao's evidence (Diao 20.10.17 [11]) was that he had not seen any records of Ms Yao's leave entitlements and (in evidence admitted with a limiting order under s 136 of the Evidence Act, as evidence of his understanding only) that he did not know if any leave records were maintained by Taxa. I am not persuaded by Ms Yao's evidence that that she took no leave over the period, even on an informal basis, and the evidence does not allow the quantification of that claim on the basis that she took any, unidentified, leave in that period.
Ms Yao also contends that Taxa failed to pay her any amount for superannuation and claims $27,412.50 on the basis. Mr Diao also refers (Diao 20.10.17 [10]) to an audit undertaken by the ATO on Taxa for the period 1 July 2012 to 31 December 2015, following which a debt was raised and paid by Taxa in respect of superannuation payments. Mr Elliott submits that the liability to pay a superannuation charge arises as a statutory obligation under s 16 of the Superannuation Guarantee (Administration) Act and that Ms Yao does not have standing to sue for unpaid superannuation: Shaddock v Cockburn Cement Ltd [2004] WAIRC 11726 at [6]; Oze-igiehon v Uber Technology Inc [2017] FCA 1024 at [10]-[17] (Gilmour J). It seems to me that, on any view, Ms Yao is unable to recover personally the amount of $27,412.50 for unpaid superannuation where that would subvert the statutory retention scheme for superannuation. Ms Yao did not formulate any other basis on which superannuation should be dealt with and her claim for unpaid superannuation must therefore fail.
Taxa in turn pleads, in answer to the Cross-Claim, that Ms Yao did not raise any issue with Taxa about any alleged underpayment of her salary, superannuation or annual leave in the period from 1 March 2012 to 1 November 2015; that she represented to Taxa that she was being paid her proper salary, superannuation and annual leave entitlements and had no entitlement to additional salary, superannuation or annual leave as now alleged; in reliance to such representations, Taxa managed its affairs and cashflow and continued to employ her to its detriment; and it is therefore unconscionable for Ms Yao to make the claims she now makes in the Cross-Claim and she is estopped from doing so. It does not seem to me that that defence is tenable. On the premise that Taxa, as employer, underpaid its employee her salary, superannuation and annual leave entitlements, the proposition that the employee represented that the salary, superannuation and annual leave was correct, by failing to recognise and take issue with that underpayment, verges on the absurd. In any event, there is no evidence that Taxa acted to its detriment in reliance on any such representation by Ms Yao, and there would be no unconscionability in requiring Taxa to comply with its contractual and statutory obligations in respect of superannuation and annual leave in the relevant circumstances.
The amount of salary which I have held is owed to Ms Yao, $85,845.15, is an off-set against the amount otherwise recoverable by Taxa against her in respect of the Taxa Uniform claim of $160,140.52. There should be judgment against Ms Yao for $74,295.37 and interest. She and Mr Wang have, as I noted above, already paid a larger amount of $136,000 into Court. In these circumstances, it seems to me that the freezing order previously made against Ms Yao should be discharged.

Mr Wang's Cross-Claim as to his entitlements

In a sprawling Cross-Claim filed on 22 February 2017, Mr Wang, who was self-represented at the time that Cross-Claim was filed and in the hearing, seeks relief against Taxa for breach of his employment contract, claiming unpaid salary and employee entitlements in the sum of $360,814.36, comprising $311,796.87 for unpaid salary, $18,062.49 for unpaid annual leave and $30,955.00 in unpaid superannuation. Mr Wang also seeks relief against Taxa, Mr Diao and Mr Borghese by way of damages for oppressive conduct under s 233 of the Corporations Act.
Mr Wang pleads (Second Cross-Claim [19]) that, in January 2012, Taxa employed him to perform the duties of a managing director and other business related activities such as sales, marketing, general administration and stock management ("Employment Contract"). That allegation is particularised on the basis that the Employment Contract was made by Mr Wang, as sole director of Taxa, and accepted by him as its managing director, at his home in November 2011. There is no explanation as to how that agreement was formed and there is no document that records its terms. Mr Wang also pleads (Second Cross-Claim [20]) the terms of the Employment Contract included that he would be remunerated by salary of $70,000 per annum, that he would be paid superannuation at a rate of 9% - 9.5% in accordance with the Superannuation Guarantee (Administration) Act, and that he would be entitled to 20 days annual leave per annum in accordance with the National Employment Standards in the Fair Work Act. That aspect of the Cross-Claim corresponds to the structure of Ms Yao's Cross-Claim. Taxa admits that Mr Wang was "employed" as its managing director and was a senior employee of Taxa from 30 January 2012 to 1 November 2015; pleads that it has not been provided with any written employment agreement and does not admit or denies the allegations as to the terms of that agreement and the salary payable to him.
Mr Wang pleads (Second Cross-Claim [21]) that, in June 2013, the Employment Contract was varied in that he and Taxa agreed to increase his annual salary from $70,000 to $90,000, exclusive of superannuation, effective from 1 July 2013. That agreement is particularised by reference to an increase in Taxa's income and by the statement that: "[Mr Wang] was the sole director and Managing Director of [Taxa], and [Taxa] in or about June 2013 at [its business address], [Mr Wang's] salary would increase to $90,000 effective from 1 July 2013." Presumably, those particulars were intended to include a reference to an agreement to the effect particularised, although they do not identify how that agreement was formed.
Mr Wang further pleads (Second Cross-Claim [22]) that, in or about June 2014, the employment contract was further varied to increase his annual salary from $90,000 to $100,000, exclusive of superannuation, effective from 1 July 2014. That claim is particularised by reference to an increase in Taxa's income over that period and a similar particular to that noted above. Mr Wang pleads that Taxa did not pay amounts of salary due, other than an amount of $23,999.94 in the financial year ended 30 June 2013, and did not pay amounts due for superannuation, and claims annual leave valued at $18,062.49, implicitly on the basis that he took no annual leave over the relevant period.
Mr Wang's evidence was that he did not have any written employment contract with Taxa (Wang 10.5.16 [9]) and, when he and Mr Diao established the business, they did not discuss any terms regarding the employment ending, confidentiality, any restraint, intellectual property or specific duties regarding his role, although he understood he was to operate Taxa and oversee all aspects of its business and to report to Mr Diao (Wang 10.5.16 [11]). Mr Wang's evidence, in his affidavit dated 11 December 2017, admitted with a limiting order under s 136 of the Evidence Act as submission only, was that: "During 2012 to 2015, the business income of [Taxa] had been increased from less than $3,000 to $1.47 million. I had carefully set up my salary $70,000 for financial year 2012 - 2013, $90,000 for financial year 2013 - 2014, and $100,000 for the financial year 2014 - 2015. During the period from 1 July 2012 to 30 June 2013, My salary had been paid partially $23,999.94, which had been recorded in the financial report of [Taxa] for financial year 2012 - 2013, as well as recorded in the BAS lodgement with ATO."
Plainly, Mr Wang could not establish that arrangement by merely asserting its existence in this manner and there is no other evidence of how any agreement for payment of the claimed salary came about. Importantly, Mr Wang does not there point to any other documentary evidence, or any other reference in the financial records of Taxa or in Taxa's dealings with the ATO, that would support any finding that he was entitled to salary beyond the amount paid to him in the financial year ended 30 June 2013. Mr Diao's evidence (Diao 20.10.17 [16]) was that Mr Wang did not speak to him about being paid a salary by Taxa and he had not seen any employment contract between Taxa and Mr Wang. Mr Wang's email dated 7 September 2015 to Mr Diao (Ex J2, 1834), to which I referred above, is inconsistent with any prior agreement as to that matter, stating that: "Maybe my workload can be as large as two persons would have. Therefore, even we calculate the salary for three years (unpaid), I totally deserve to have $300,000 let alone the relevant Australian laws, it would be totally reasonable for me to have a salary." That email plainly proceeds on the basis that no salary arrangement had then been agreed between Taxa and Mr Wang, or Mr Diao and Mr Wang, and seeks to persuade Mr Diao that there should be agreement to that amount. There is no evidence that Mr Diao assented to that proposition.
Mr Wang does not contend that there was, and there is no evidence of, an express agreement that he be paid a salary or as to its amount. Instead, Mr Wang seeks to recover salary allegedly due under an "implied contract" for the period 30 January 2012 to 25 November 2015 in the sum of $311,796.87. Mr Wang referred to the increase in the turnover of Taxa from the financial year ended 30 June 2012 to the financial year ended 30 June 2015, and to a further increase in turnover for the half year to 30 December 2015. I accept that an increase in turnover may be indicative of Mr Wang's success in growing the business, but that matter cannot in itself establish a contractual entitlement to remuneration by way of salary, still less in the amount claimed.
Mr Wang also supports that "implied contract" by reference to the duties he had performed as managing director of Taxa's business and also referred to the tasks he had performed as a working employee. He contrasted his position with the fact that a salary was apparently paid to Mr Diao since November 2015, and contended that he had "voluntarily stop[ped]" salary payments to him for the period 1 July 2012 to November 2015 due to Taxa's cashflow difficulties. I accept that the extent of Mr Wang's duties meant that he could reasonably have been paid a salary, and there may be a degree of unfairness in the fact that he has been treated differently from Mr Diao in that regard, but those matters also cannot establish a contractual entitlement to remuneration by way of salary, either generally or in the amount claimed. Mr Wang also submits that his employment contract could not provide less than what was set out in an applicable award. However, there is no evidence of any applicable award applying to managing directors of proprietary companies. Mr Wang accepts that he had only been paid an amount of $23,999.94 (which he characterises as "wages") in the period from 30 January 2012 to 25 November 2016, and the previous conduct of the business therefore does not support any entitlement of Mr Wang to the amount of wages he now claims. Mr Wang also accepts that the amount that he claims by way of unpaid wages had not been recorded into Taxa's accounting system.
Mr Elliott in turn refers to authority that directors of a company are not entitled to be paid remuneration for the services they provide as directors unless this is specifically provided for in the company's constitution or approved by shareholders: Hutton v West Cork Railway Co (1883) 23 Ch D 654; 52 LJ Ch 689; 49 LT 420; Re George Newman & Co [1895] 1 Ch 674; [1895-99] All ER Rep Ext 2160; Hawcroft v Jamieson [2017] NSWSC 1478 at [140]-[141]. That is not a complete answer to Mr Wang's claim, so far as the services he provided to Taxa appear to have extended beyond acting in the capacity as a company director. Mr Elliott fairly accepts that a company can enter into a contract of employment with a directors, including with a managing director who has two separate functions and capacities, namely that of director and that of manager. However, he submits that there is no evidence from which the Court could conclude that a concluded agreement was reached between Taxa and Mr Wang for the amount of remuneration claimed. Mr Elliott also submits that Mr Wang does not plead that a term ought to be implied in fact in order to give business efficacy to any employment agreement with him, or that it ought to be implied at law or as a matter of custom; that no evidence is led as to those matters; and that the Court cannot find that it was a term of the employment agreement that Mr Wang would be paid remuneration.
Mr Elliott also submits that Mr Wang was an equity participant in the business, and that the Court would conclude that his efforts were to be compensated by means other than salary, for example by an increase in the value of his shareholding or dividends. I do not accept that submission, and it seems more likely that Mr Wang would at least have intended to receive at least some payment for his services on an ad hoc basis, which would have properly been recorded to a director's loan account. However, the evidence does not establish any basis for finding an express or implied contract of employment, or a term as to remuneration of the amount for which Mr Wang contends.
In particular, I do not accept that Mr Wang has established an agreement to pay salary at the initial amount of $70,000 claimed, where there is no evidence as to how that agreement was formed, no documentation consistent with it, and Taxa did not conduct itself consistently with it, by the payment of salary, during the period under which it was under Mr Wang's control. By contrast with the position as to Ms Yao, there is no evidence that, over the relevant period, either Taxa or Mr Wang conducted their respective tax affairs on the basis that Mr Wang had received or accrued a right to receive salary in the relevant period. I also do not accept that Mr Wang has established an agreement to increase his salary from $70,000 to $90,000, or further to increase his salary from $90,000 to $100,000, where there is no evidence of the manner in which that agreement was formed, no documentation to corroborate it, and no evidence of any conduct that was consistent with it, including payment of salary by Taxa to Mr Wang over the relevant period, while Taxa was under Mr Wang's control.
Mr Wang's claim for salary and unpaid leave therefore fails because no contractual basis for it is established. Mr Wang's claim that he personally be paid unpaid superannuation fails both for that reason and for the reasons that Ms Yao's claim to the same effect failed.

Mr Wang's oppression claim

Mr Wang also brings claims against Mr Diao and Mr Borghese, seeking to establish damages recoverable by Taxa, by way of a claim for oppression. In a pleading that resembles Taxa's pleading of its case against him, Mr Wang pleads that Mr Diao and Mr Borghese owed duties under ss 180-183 of the Corporations Act, at common law and in equity, and owed specified fiduciary duties to Taxa. Mr Wang also pleads (Second Cross-Claim [71]) that Mr Diao and Mr Borghese contravened ss 180-183 of the Corporations Act and their fiduciary obligations to Taxa; improperly used and/or abused their power to gain an advantage or cause detriment to Taxa, failed to act with care, skill and diligence; failed to act in good faith in the best interests of Taxa; and failed to act for a proper purpose. In particular, Mr Wang pleads (Second Cross-Claim [29]ff) a claim for improper diversion of business and assets from Taxa to JD3 and Taxa International and that business of at least $293,863 had been diverted either to JD3 or Taxa International.
Turning now to the applicable legal principles, as Mr Elliott points out, s 232 of the Corporations Act provides that the Court may make an order under s 233 of the Act if 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 another capacity. Mr Elliott refers to the summary of the applicable principles in Munstermann v Rayward [2017] NSWSC 133 at [22], where Stevenson J observed (omitting citations): "(1) The test of oppression is an objective one of unfairness ... (2) The court must look to determine whether on the balance of probabilities the objective commercial bystander would be satisfied that the affairs of the company were being conducted unfairly … (3) A director may act oppressively in the sense relevant to the operation of s 232 and yet not breach any fiduciary or other duty owed as a director ... (4) Conduct of a company's affairs may be oppressive even though the conduct is otherwise lawful ... (5) Conduct that has the effect of paralysing a company in the operation of its business is properly characterised as conduct contrary to the interests of the members as a whole … (6) A shareholder of 50 per cent of the shares in a company can seek relief for oppressive conduct because they do not have control in the form of power to prevent the oppression, particularly where individual strong arm tactics are used … (7) The court must formulate an opinion about oppression or unfair prejudice as at the date of the institution of proceedings and the issue of relief under s 233 must be determined at the date of the hearing … (8) The discretion under s 233 is wide as to the appropriate remedy … (9) The nature of the remedy chosen by the court under s 233 will be dependent upon the conclusions drawn by the court as to the type of oppression with which the court is dealing and the court will choose the remedy which is least intrusive …. (10) The aim of any order under s 233 must be to put an end to the oppression …"
There is authority that a shareholder bringing an oppression claim can bring a claim for breach of general law duty and statutory duties owed to a company, without necessarily seeking a separate order for leave to bring a statutory derivative action under s 237 of the Corporations Act, although such a claim could only extend to loss which the company had suffered and not loss that the shareholder had suffered personally: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672; LPD Holdings (Aust) Pty Ltd v Phillips [2013] QSC 225; (2013) 281 FLR 227 at [53]; Re JGS Investment Holdings Pty Ltd [2014] NSWSC 1532; Taxa Australia Pty Ltd v Wang [2016] NSWSC 1913 at [23].
It is also well-established that a director or senior employee who takes up a business opportunity within the scope of the company's actual or potential line of business, without the company's consent, may breach his fiduciary and statutory duties by doing so: Cook v Deeks [1916] 1 AC 554 at 563; [1916-17] All ER Rep 285; Green v Bestobell Industries Pty Ltd [1982] WAR 1; (1982) 1 ACLC 1; Mordecai v Mordecai (1988) 12 NSWLR 58; 12 ACLR 751; 6 ACLC 370; Edmonds v Donovan [2005] VSCA 27; (2005) 12 VR 513; Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291 at [66]; Re Colorado Products Pty Ltd (in prov liq) above. Mr Elliott fairly accepts that oppression may be established by a director's or shareholder's diversion of business opportunities to another company which he or she controls, and in which other shareholders in the company have no interest: Re Bright Pine Mills Pty Ltd [1969] VR 1002; Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549; Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 at [19]; RP Austin & IM Ramsay, Ford's Principles of Corporations Law (13th ed), [10.460.3].

Claim for diversion of business from Taxa to JD3

Turning first to the claim in respect of JD3, that company was incorporated on 19 November 2015 and was deregistered on 13 April 2018 (Ex J2, 527-538); its directors were initially Mr Davidson, Mr Karayiannis and Mr Diao, although Mr Diao resigned on 2 May 2016; and its shareholders were A & E Davidson Pty Limited as to 4 ordinary shares, Mr Karayiannis as to 8 ordinary shares and Mr Diao as to 4 ordinary shares. Mr Davidson is also a director of a distributor of Taxa's products, Reliable Sportswear Pty Ltd ("Reliable Sportswear") (Ex J2, 518).
In his affidavit dated 14 July 2017, Mr Wang referred to the establishment of JD3 and referred, inter alia, to emails sent by Mr Davidson in relation to JD3's business and led evidence, admitted with a limiting order under s 136 of the Evidence Act as a submission only, that customers with which JD3 was dealing, as set out in a text message from Mr Davidson and in emails, were customers of Taxa. The identified customers included Northcote City Football Club, Monaro Panthers Football Club, Berwick City Soccer Club and Altona East Football Club. Mr Wang also led evidence, admitted as a submission only with a limiting order under s 136 of the Evidence Act, that JD3 contacted customers of Taxa and diverted business of Taxa to make payments in excess of $215,859.51 into its bank account. That calculation appears to proceed on the basis, not established by the evidence, that all payments into JD3's bank account related to sales to football and soccer clubs that were customers of Taxa and that all of those sales were diverted from Taxa.
Mr Wang also led evidence, in his affidavit dated 11 December 2017, admitted with a limiting order under s 136 of the Evidence Act as submission only, as to stock sold by Ita-Fashion to JD3, dealings between JD3 and Taxa in respect of a credit note and stock, income derived by JD3 and payments made by it to Taxa, and the processing of orders generated by JD3 which had allegedly been invoiced to and paid by Taxa, and customer payments received by JD3. By his affidavit dated 18 July 2018, Mr Wang also referred to the content of business activity statements lodged by Taxa in the quarters commencing July-September 2014 and concluding in January-March 2017. Mr Wang relied on these matters for a submission that, in the period from January 2015 to June 2016, Taxa's sales were reduced by a significant amount for each quarter and its business was diverted by the Cross-Defendants from January 2015 to date. Mr Wang also relies on invoices issued to various football clubs and payments made to JD3 as recorded in its bank statements (Ex J2, 3290-3327).
Mr Wang accepted in cross-examination that the several clubs that are the subject of this claim were also clients of Mr Davidson of Reliable Sportswear, but claimed that Reliable Sportswear was Taxa's "agent" and that those client relationships were held by it on behalf of Taxa (T153). However, as Mr Elliott pointed out, Mr Wang had elsewhere contended (Wang Defence [35]) that Reliable Sportswear was not a selling agent of Taxa and ordered sportswear and other products from Taxa for its own business purposes, and the evidence is otherwise consistent with that characterisation of the relationship between Taxa and Reliable Sportswear. I do not accept that agency was established in a legal sense, as distinct from a distributorship relationship.
Mr Diao's evidence (Diao 20.10.17 [19]) was that JD3 was incorporated on 19 November 2015 with Mr Davidson and Mr Karayiannis. Mr Diao denied any involvement or association with JD3 since 2 May 2016. His evidence was that all sales of JD3 were handled by Mr Davidson; Mr Diao did not know who the customers of Taxa were at the time JD3 was incorporated and Mr Wang did not give him a customer list when Mr Wang resigned from Taxa; and any common customers of JD3 and Taxa were customers of Reliable Sportswear. Mr Borghese's evidence (Borghese 20.10.17 [4]) was that he was not a director, shareholder or employee of JD3 and had never had any involvement in that company's operations.
As Mr Elliott points out, Mr Wang's claim in respect of JD3 refers to sales to several entities as set out in a summary table prepared by Mr Wang (Ex J2, 4188), namely Monaro Panthers Football Club (13 transactions totalling $75,711.10); Berwick City Soccer Club (6 transactions totalling $79,835.40); East Bentleigh Soccer Club (7 transactions totalling $58,110.98); St Monica's College ($1,430); Collingwood City Soccer Club ($679.80); Northcote City Football Club (3 transactions totalling $3,307.48) and another customer for a transaction in the amount of $1,784.75.
In closing submissions, Mr Wang also referred to invoices in the amounts of $25,875.05, $3,836.84 and $877.40 from Ita Fashion to Taxa that are said to relate to an order for Monaro Panthers Football Club (Ex J2, 4833, 4835, 4838), and contends that Monaro Panthers Football Club was Taxa's customer through another distributor, Foundation Sports Group (Ex J2, 4163-4167). Mr Wang also refers to a number of payments subsequently made by Monaro Panthers Football Club to JD3 (Ex J2, 3295, 3300, 3303, 3307, 3313). Mr Wang also contends that East Bentleigh Soccer Club was a customer of Taxa, because it issued invoices directly to that club (Ex J3, 4145, 4146, 4159) and that East Bentleigh Soccer Club subsequently made several payments to JD3's bank account (Ex J2, 3303-3304, 3310, 3313). Mr Elliott responds that East Bentleigh Soccer Club had made purchases from Taxa on two occasions in April and March 2015 and may have previously been a customer of Reliable Sportswear and Mr Davidson (Ex J2, 4147).
Mr Wang contends that Northcote City Football Club was Taxa's customer, because Taxa issued tax invoices to its "agent" Reliable Sportswear, in respect of sales to Northcote City Football Club, and that club subsequently made three payments to JD3's account (Ex J2, 3297, 3314). Mr Elliott responds that Northcote City Football Club appears to have been a customer of Reliable Sportswear and Mr Davidson (Ex J2, 4028, 4154-4158). Mr Wang submitted that Berwick City Soccer Club was Taxa's customer, because it issued invoices directly to that club, and that club also subsequently dealt with JD3. Mr Wang also submitted that Collingwood City Soccer Club was a customer of Taxa, because it had issued invoices to that club, and it subsequently made a single payment to JD3's account.
Mr Elliott responded that several of these entities, Monaro Panthers Football Club, Berwick City Soccer Club, East Bentleigh Soccer Club, St Monica's College and Collingwood City Soccer Club do not appear in the "Analyse Sales [Customer]" card extracted from Taxa's MYOB records (Ex J2 1067, 1068, 1069) although Northcote City Football Club does appear in that record in relation to a sale of $193.20 in the period July 2012 to June 2013 (Ex J2, 1069). Mr Wang at one point suggested that those records were incomplete, although that does not assist in establishing that those entities had any customer relationship with Taxa as distinct from with Reliance Sportswear or with Taxa's other distributors. Those clubs also did not appear in a 'Current List of Retail Customers' in Taxa's business plan (Ex J2, 2066).
I am not satisfied that direct sales to these clubs were in Taxa's actual or proposed line of business, where, with immaterial exceptions, it appears to have conducted its Victorian business through distributors and particularly Reliance Sportswear. I am also not satisfied that improper diversion of business to JD3 has been established, still less in the amount claimed by Mr Wang. The fragmented evidence as to these matters does not seem to me to go further than to establish a modest overlap between Taxa's and JD3's customer base, and falls well short of establishing any real conflict between Mr Diao's duties and interests as a director of Taxa and (for a relatively short period) JD3, or any course of conduct of diversion of Taxa's customers to JD3, particularly to the standard reflected by s 140 of the Evidence Act. The claim against Mr Diao in respect of JD3 must fail on that basis. The claim against Mr Borghese in respect of JD3 must fail on the more fundamental basis that he had no business connection with it.
I note, for completeness, that Mr Elliott also submitted that JD3 is now deregistered and relief will generally be inappropriate as a matter of discretion if there is no continuing oppression: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [182]. I am not persuaded that relief, by way of damages in favour of Taxa, could not have been ordered in respect of past conduct had the basis for it otherwise been established. However, it is not necessary to determine that question where the claim for improper diversion of business from Taxa to JD3 has not in any event been established.

Claim for diversion of business from Taxa to Taxa International

Mr Wang also pleads (Second Cross-Claim [43]ff) a claim in respect of diversion of business from Taxa to Taxa International. Mr Wang pleads that Mr Diao and Mr Borghese established Taxa International in February 2016; that, from February 2016, Mr Diao was a director and sole shareholder of Taxa International and Mr Borghese was a director and sales manager of Taxa International; that Taxa International is a company in the business of selling, on a wholesale and retail basis, sportswear, club wear and school uniforms, which is the same business as Taxa's business; that Taxa's business has been diverted to Taxa International; and that Taxa International is operated by the same employees as Taxa.
In his affidavit dated 14 July 2017, Mr Wang also gave evidence seeking to support the claim in respect of Taxa International. Mr Wang contended, in evidence admitted as a submission only, that Taxa International contacted customers of Taxa and diverted business of Taxa to make payments exceeding $218,214 into its bank account. That submission appeared to proceed on the basis, not established by the evidence, that all of the payments into Taxa International's bank account related to customers of Taxa or business diverted from Taxa. Significant parts of Mr Wang's evidence as to that matter were plainly inadmissible, and were not admitted.
Mr Diao (Diao 20.10.17 [30]-[31]) addressed the circumstances in which Taxa International was incorporated in February 2016 and Mr Borghese became a director of that company on 23 March 2016. Mr Borghese's evidence (Borghese 20.10.17 [8-9]) was that he is a director of Taxa International which is in the business of selling, on a wholesale and retail basis, sportswear and club wear, and does not hold stock but orders it from Taxa from time to time. His evidence is that he is responsible for the sales of Taxa International and receives and takes orders. His evidence is that he does not take orders from Taxa using Taxa International, and Taxa provides goods which customers order from it and invoices the relevant customer, and he did not invoice Taxa from Taxa International, or tell customers of Taxa to pay their accounts into the account of Taxa International. His evidence was that the prices at which Taxa sold stock to Taxa International were set by Mr Diao.
In his affidavit evidence, Mr Wang also refers to dealings with several schools and sporting clubs that are alleged to be customers of both Taxa and Taxa International. Mr Wang referred to King's School (Wang 14.7.17 [32]-[34]) and there is evidence that King's School placed orders with Taxa on six occasions between July 2014 and November 2016 (Ex J2, 4191-4197); Taxa also sold goods to another company, Aussie Sports Direct, which also appears to have dealt with King's School; and Mr Wang did not identify documentary evidence that Taxa International sold any sportswear or other items to King's School or had dealings with it or diverted its business away from Taxa. Mr Wang also refers to dealings with Carlingford West Public School (Wang 14.7.17 [35]) and there is evidence that Carlingford West Public School placed orders with Taxa on five occasions between October 2012 and November 2015 (Ex J2, 4197-4204); Taxa also sold goods to Aussie Sports Direct which dealt with Carlingford West Public School; and there is again no evidence that Taxa International sold any sportswear or other items to Carlingford West Public School or had dealings with it or diverted any business away from Taxa. Mr Wang also refers to a sale by Taxa to Taxa International (Wang 14.7.17 [36]-[37]), and it appears that Taxa sold stock to Taxa International for $25,960, with the payment due on 9 March 2016 (Ex J2, 4207-4215). On its face, this is consistent with a supplier-distributor relationship and it is not apparent why this establishes a diversion of business from Taxa, as distinct from dealings between Taxa and Taxa International as supplier and distributor.
Mr Wang also refers to dealings with Ryde Saints United Football Club (Wang 14.7.17 [40(a)]). As Mr Elliott points out, it appears that Ryde Saints United Football Club made purchases from Taxa on three occasions between February and August 2015 (Ex J2, 4527-4533). Mr Elliott points out that products later sold by Taxa International in the two invoices to Ryde Saints United Football Club in March and May 2016 appear to be different to the products previously sold by Taxa, although this does not necessarily displace a claim for diversion of business. Mr Wang also refers to dealings with Skye United Football Club (Wang 14.7.17 [40(b)]. Mr Elliott points out that the evidence does not establish that Skye United Football Club was a customer of Taxa although Mr Wang had provided quotes for the supply of goods that are not shown to have converted to sales (Ex J2, 4522-4526) and Mr Wang does not identify evidence that it made purchases from Taxa International or had dealings with or made payments to Taxa International. Mr Wang also refers to Foundation Sports Group (Wang 14.7.17 [40(c)]). As Mr Elliott points out, it appears that Foundation Sports Group made two purchases from Taxa in November 2013 and March 2014 (Ex J2, 4536-4537), although Mr Wang does not identify any evidence that it made any purchases from or had dealings with Taxa International.
Mr Wang also refers to Moss Vale Soccer Club (Wang 14.7.17 [40(d)]) which made a purchase from Taxa on one occasion in October 2015 (Ex J2, 4540) and to Polonia Football Club (Wang 14.7.17 [40(e)]) which made two purchases from Taxa in March 2015 (Ex J2, 4543-4544). Again, Mr Wang does not identify evidence that either entity made purchases from Taxa International, had dealings with Taxa International or that its business was diverted from Taxa to Taxa International. Mr Wang refers to Woy Woy Football Club (Wang 14.7.17 ([40(f)]) which made five purchases from Taxa between February and October 2015 (Ex J2, 4547-4551), but does not identify evidence that Woy Woy Football Club made any purchases from or had dealings with Taxa International or that its business was diverted from Taxa to Taxa International. Mr Wang refers to Wentworth Falls Football Club (Wang 14.7.17 [40(g)]) which made purchases from Taxa on four occasions between November 2014 and May 2015 (Ex J2, 4554-4557) but again does not identify evidence of diversion of its business from Taxa to Taxa International. Mr Wang also refers to Mortdale Public School (Wang 14.7.17 [40(h)]), but Mr Elliott points out there is no evidence it was a customer of Taxa although it was apparently a customer of Taxa International in respect of a sale of $220 on 30 June 2016 (Ex J2, 4558). Mr Elliott also pointed out that the clubs identified by Mr Wang in support of this claim generally do not appear in the "Analyse Sales [Customer]" card extracted from Taxa's MYOB records (Ex J2, 1067, 1068, 1069). As I noted above, Mr Wang at one point suggested that those records were incomplete, but that does not assist him in establishing that those entities had any customer relationship with Taxa.
In submissions, Mr Wang relied on the fact that Taxa International was in the business of selling sportswear and club wear on a wholesale and retail basis and contends that Mr Borghese's wages have been paid by Taxa International and that Taxa's employees were transferred to Taxa International and their wages paid by that entity. Mr Wang also referred to several clubs that he claims were customers of Taxa and subsequently dealt with Taxa International, including Ryde Saints United Football Club, Skye United Football Club, Moss Vale Soccer Club, Polonia Football Club, Woy Woy Football Club, Wentworth Falls Football Club and Mortdale Public School. Mr Wang extended that submission to other customers of Taxa and contended their business had been diverted from Taxa to Taxa International, without identifying the evidence relied on in respect of those other customers. Mr Wang also referred to the decrease in Taxa's sales over the period after he was dismissed.
It seems to me that the evidence as to these matters, although again somewhat fragmented, might be capable of establishing a breach of duty by Mr Diao and Mr Borghese in respect of their involvement with Taxa International, arising from the strict rule against conflict of interest applicable to fiduciaries including company directors. Although the evidence falls short of identifying any substantial business that was diverted from Taxa to Taxa International, Mr Diao and Mr Borghese were not merely non-executive directors of the two companies, engaged in oversight of activities largely undertaken by others, but Mr Diao (as I noted above) managed Taxa's day-to-day operations and was responsible for its orders and sales from late 2015 and also priced the products supplied by Taxa to Taxa International and Mr Borghese is closely involved in sales by both companies. In Streeter v Western Areas Exploration Pty Ltd (No 2) above at [76], McLure P (with whom Buss JA agreed) noted that a breach of duty may more readily arise where a fiduciary is under a positive duty to acquire or seek to acquire a particular benefit or property for a company and owes conflicting duties to another company. Here, both Mr Diao and Mr Borghese plainly have positive duties to promote the sale of sportswear and other products by Taxa and potentially conflicting duties in respect of Taxa International, with a real and sensible possibility of conflict between them.
That is not, however, sufficient to establish the basis for a claim for compensation by Taxa against Mr Diao or Mr Borghese, or oppression, where it seems to me that would require not merely a possibility of conflict, but an actualisation of that conflict in a manner that gave rise to loss to Taxa. The matters to which Mr Wang refers may be sufficient to raise a possibility that business has been shifted from Taxa to Taxa International, arising from Mr Diao's and Mr Borghese's roles with both Taxa and Taxa International, the suggestion that staff have been shifted from Taxa to Taxa International and the evidence of Taxa's declining sales. There is, however, no admissible evidence of substance that Mr Diao or Mr Borghese have actively diverted business from Taxa to Taxa International or preferred the interests of the former to the latter, and that seems to me that that is no more than a possibility, with other possibilities including that Taxa and Taxa International deal with customers in parallel markets and also with each other as supplier and distributor. The evidence as to these matters again falls short of establishing the fact of diversion of Taxa's customers to Taxa International particularly to the standard reflected by s 140 of the Evidence Act.
I therefore cannot reach the conclusion that business has in fact been actively diverted from Taxa to Taxa International or that Mr Diao or Mr Borghese have preferred the interests of the latter to the former so as to establish any basis for a claim for compensation by Taxa or a basis for relief in oppression.

Claim for transfer of trade mark to Mr Diao

Mr Wang also pleads (Second Cross-Claim [53]) that: "The trade mark "TAXA" was registered under the name of [Taxa] on 12 June 2012. [Mr Diao] has transferred the trademark "TAXA" to his personal name on 24 November 2015 to date, after [Mr Diao] became a director and took over the management of [Taxa]. [Taxa] has suffered loss of intangible asset."
In his affidavit dated 14 July 2017, Mr Wang led evidence, inter alia, to establish the transfer of a trade mark "Taxa", originally registered in the name of Taxa, to Mr Diao's personal name on 24 November 2015. Mr Diao acknowledged in his affidavit evidence that he transferred that trademark into his name, and he seeks to justify that conduct on the basis of a claim that the trademark is used in Italy, China and the United States and is registered in his name or companies associated with him. That evidence does not provide any justification for that transfer, so far as the Australian trademark was Taxa's property, irrespective of the position elsewhere. Mr Diao's evidence is also that he took that course because he was concerned about Taxa's financial position and wanted to ensure that the "Taxa" trademark was protected. That evidence does not provide any justification for that transfer, and a transfer for that reason might well amount to a fraud on Taxa's creditors or a voidable transaction under the Corporations Act.
However, as Mr Elliott points out, Mr Wang did not lead evidence to establish the value of that trademark which was also not recorded as an asset in Taxa's 2015 financial statements (Ex J2, 627-635) during the period during which Mr Wang was Taxa's managing director. Mr Elliott also submits that the transfer of the trademark was not oppressive to Mr Wang, where he had sought to disclaim his shareholding in Taxa in November 2015. I give little weight to that matter, where no steps were taken to give legal effect to that intention. Although the transfer of the trademark away from Taxa may well have amounted to a breach of Mr Diao's duties as a director of Taxa, there is no evidence of the value of that trade mark which could support any finding as to the materiality of that breach or any order for compensation in favour of Taxa in that respect or any other relief in oppression.

Claim in respect of class 457 visa holders

Mr Wang pleads (Second Cross-Claim [66]-[67]) and presses a claim for amounts alleged to have been improperly transferred to several persons who held class 457 visas (being temporary visas for skilled workers) sponsored by Taxa, namely Ms Guan, Ms Ge and Ms Fang, and that those persons had not worked at their nominated jobs or worked for Taxa, although wages were paid to them. Taxa responds that the relevant persons, Ms Guan, Ms Ge and Ms Fang, were employed by it when Mr Wang was its managing director and responsible for its day-to-day operations; says that Mr Wang was responsible for determining the amount of their wages; and says that Ms Fang ceased employment with Taxa in about January 2016, Ms Ge in about June 2016 and Ms Guan in about January 2017, and otherwise does not admit the allegations.
In his affidavit dated 14 July 2017, Mr Wang addressed Taxa's claimed loss by payment of wages to Ms Bai, Ms Guan and Ms Ge, who had been sponsored for visas by Taxa. Mr Wang refers to the payment of wages to those persons and his evidence, by way of bare assertion which was admitted with a limiting order under s 136 of the Evidence Act, is that Ms Bai and Ms Guan had not worked in the nominated positions and that they were paid amounts by Taxa and had paid amounts to Mr Diao. Mr Wang's evidence, admitted as submission only, is that Ms Ge had not worked for Taxa although Taxa had paid her amounts by way of wages, and he also alleged that Mr Diao had reached an agreement with Ms Ge's husband in China that an amount should be paid to Mr Diao in China.
Mr Diao's evidence (Diao 20.10.17 [45]) in response was that he was not a director of Taxa when Ms Guan was employed by Taxa in 2013 and was not involved in the process by which Taxa applied to be approved to sponsor employees for class 457 visas and that he did not employ Ms Ge or Ms Bai, who were dismissed by Taxa in June 2016 and January 2016 respectively. Mr Diao claims he paid Ms Guan money in November 2015 because she had not been paid her salary by Taxa and he needed her help to operate the company. Mr Diao claims that he did not transfer money into Ms Bai's bank account; and further evidence that addressed that issue was not in admissible form and was not admitted.
Mr Elliott submits that Mr Wang failed to adduce any admissible evidence in order to establish these allegations. Mr Wang's evidence as to these matters was admitted by way of submission only, given its form. These allegations are serious allegations, which would likely amount to a fraud on the Australian immigration system, and I have regard to the principle in Briginshaw v Briginshaw above and s 140 of the Evidence Act in determining whether they have been established. The evidence is not sufficient to establish these allegations on that basis.

Matters not pressed by Mr Wang

Mr Wang also initially sought, but did not press at the hearing, an order restraining directors and officers of Taxa, Mr Diao and Mr Borghese from contacting customers or former customers of Taxa for the purposes of soliciting their business or making arrangements for payment of money by those customers other than to Taxa. Mr Wang also initially sought, but also did not press at the hearing, an order that Taxa forthwith deliver to him financial statements for several financial years. That order would not have been made had the claim been pressed, where the financial statements for those years are already in evidence in the proceedings. Mr Wang also initially sought, but did not press at the hearing, an order that Taxa forthwith deliver to him specified property (Second Cross Claim [26]-[28]). There was no evidence that the identified property is Mr Wang's personal property, or even that Taxa possesses it, and that claim would have failed had it been pressed. Mr Wang also pleaded, and also did not press at the hearing, claims for excessive remuneration in respect of Mr Diao (Second Cross-Claim [55]-[57]), for denial of access to information (Second Cross-Claim [58]-[61]), for misuse of Taxa's funds in respect of the sale of a vehicle (Second Cross-Claim [62]-[64]) and a claim for funds transferred to Mr Karayiannis, including an amount of $24,000 and unidentified cash transfers (Second-Cross Claim [65]).
Mr Wang also pleaded (Second Cross-Claim [68]-[69]), but did not press, further claims described as relating to "phoenix activity" relating to the establishment of JD3 and Taxa International, that Taxa has not lodged business activity statements from July 2015 to date, has not paid employee entitlements, has not paid a small amount of accounting fees to a former accountant, has not issued PAYG payment summaries for earlier years and had removed stock to warehouses controlled by JD3, Taxa International, Mr Diao and Mr Borghese, and that Taxa had provided false or misleading information to the Department of Immigration and Border Protection.

Conclusion as to Mr Wang's Cross-Claim

Mr Elliott submits, and I accept, that the materials relied upon by Mr Wang do not establish, at least to the standard provided in s 140 of the Evidence Act, that either Mr Diao or Mr Borghese engaged in conduct that diverted the business of Taxa to JD3 or Taxa International or that they did so in order to damage or prejudice his interests as a shareholder of Taxa. The matters alleged in Mr Wang's Second Cross-Claim have not been established and his claims for oppression and breach of directors' duties must fail, and that Second Cross-Claim must be dismissed.
For completeness, I note that Taxa also pleads an estoppel arising from specified conduct in its Defence to Second Cross-Claim; advances allegations as to Mr Wang's conduct and contends that there has been no oppressive or unfairly prejudicial or unfairly discriminatory conduct against him in that context; and claims that Mr Wang has unclean hands and is not entitled to the relief claimed. I have referred to Taxa's estoppel defence, in respect of Ms Yao's claim above. It is otherwise not necessary to determine these matters given the conclusions that I have reached on other grounds.

Orders and costs

Ms Yao addressed the question of costs in her written submissions, but I deferred dealing with that matter until after judgment. It will be necessary to hear the parties as to whether Taxa should be ordered costs in respect of its claim against Mr Wang and Ms Yao, where the amount that it will recover is well below this Court's jurisdictional threshold. Rule 42.34 of the Uniform Civil Procedure Rules 2005 (NSW) relevantly provides that: "(1) This rule applies if: (a) in proceedings in the Supreme Court, other than defamation proceedings, a plaintiff has obtained a judgment against the defendant or, if more than one defendant, against all the defendants, in an amount of less than $500,000, and (b) the plaintiff would, apart from this rule, be entitled to an order for costs against the defendant or defendants. (2) An order for costs may be made, but will not ordinarily be made, unless the Supreme Court is satisfied that: (a) for proceedings that could have been commenced in the District Court - the commencement and continuance of the proceedings in the Supreme Court, rather than the District Court, was warranted …"
There may be a question whether these proceedings should properly have been brought in the District Court, even judging the matter at the time it was commenced rather than with hindsight. It may be no answer to say that the proceedings involved claims for breach of the Corporations Act which are within this Court's jurisdiction, since those claims were duplicative of claims for breach of corresponding equitable duties that could have been brought in the District Court. There is also a question whether Taxa could fairly be allowed costs of the numerous pleaded claims that were not pressed at the hearing or the costs that would have been incurred in preparation of the substantial expert report that was not read. My preliminary view is that Taxa should pay Ms Yao's costs of her Cross-Claim, which has succeeded in part, to the extent she has incurred legal and other costs that are properly recoverable, and Mr Wang should pay Taxa's costs of the Second Cross-Claim, which has failed in its entirety. However, I will hear the parties as to these matters and the question of costs generally.
I direct the parties to bring in agreed short minutes of order to give effect to this judgment, including as to interest and costs, within 21 days or, if there is no agreement between them, their respective draft short minutes of order and submissions not exceeding 10 pages in one and a half spacing as to the differences between them.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 September 2018

Corporations Act 2001(Cth)ss 180, 181, 182, s 182, ss 180, 181, 182, 183, 232, 233, 237

Evidence Act 1995(NSW)ss 136, 140

ales [2010] FCAFC 133 ; (2010) 189 FCR 356 - Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 - Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 - Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55; (2014) 314 ALR 62 - Cook v Deeks [1916] 1 AC 554; [1916-17] All ER Rep 285 - Edmonds v Donovan [2005] VSCA 27; (2005) 12 VR 513 - Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) 161 ALR 599 - Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 - Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 - Green v Bestobell Industries Pty Ltd [1982] WAR 1; (1982) 1 ACLC 1 - Hawcroft v Jamieson [2017] NSWSC 1478 - Huntingdale Village Pty Ltd (recs and mgrs apptd) v Westgarth [2018] WASCA 90; (2018) 128 ACSR 168 - Hutton v West Cork Railway Co (1883) 23 Ch D 654; 52 LJ Ch 689; 49 LT 420 - JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20 ; (2016) 329 ALR 625 - LPD Holdings (Aust) Pty Ltd v Phillips [2013] QSC 225; (2013) 281 FLR 227 - Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 - Mordecai v Mordecai (1988) 12 NSWLR 58; 12 ACLR 751; 6 ACLC 370 - Munstermann v Rayward [2017] NSWSC 133 - Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 110 ALR 449 - Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 - Pao On v Lau Yiu Long [1980] AC 614; [1979] 3 All ER 65 - Pennimpede v Gerard Pennimpede [2009] NSWSC 85 - QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 - Re Bright Pine Mills Pty Ltd [1969] VR 1002 - Re Casey's Patents; Stewart v Casey [1892] 1 Ch 104 - Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 - Re FAL Healthy Beverages Pty Ltd and FAL Retail Pty Ltd [2017] NSWSC 476 - Re George Newman & Co [1895] 1 Ch 674; [1895-99] All ER Rep Ext 2160 - Re JGS Investment Holdings Pty Ltd [2014] NSWSC 1532 - Robertson v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29 - Sanford v Sanford Courier Service Pty Ltd (1986) 10 ACLR 549 - Streeter v Western Areas Exploration Pty Ltd (No 2) [2011] WASCA 17; (2011) 278 ALR 291 - Taxa Australia Pty Ltd v Wang [2016] NSWSC 1913 - Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 - Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 - Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428; (2009) 74 ACSR 282 - Vrisakis v Australian Securities Commission (1993) 9 WAR 395 - Watson v Foxman (1995) 49 NSWLR 315 Texts Cited: - RP Austin & IM Ramsay, Ford's Principles of Corporations Law (13th ed) - CCH Australian Contract Law Commentary Category: Principal judgment Parties: Taxa Australia Pty Ltd (Plaintiff/Cross-Defendant to First Cross-Claim/First Cross-Defendant to Second Cross-Claim) Gang Wang (First Defendant/Cross-Claimant to Second Cross-Claim) Xue Hua Yao (Second Defendant/Cross-Claimant to First Cross-Claim) Keming Diao (Second Cross-Defendant to Second Cross-Claim) Luca Borghese (Third Cross-Defendant to Second Cross-Claim) Representation: Counsel: D F Elliott (Plaintiff/Cross-Defendant to First Cross-Claim/Cross-Defendants to Second Cross-Claim)

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