The evidence does not disclose what the Alexandria property might have been.
49 Thus, the finance application appears to have claimed the St Leonards property as an asset, but not to have claimed any mortgage over the St Leonards property as an asset. The only mortgage stated as being in existence was one to RAMS, for $100,000. Alongside the question enquiring whether the applicant/guarantor 1 had ever been bankrupt, the "No" box was ticked. The Kotara property was offered as security for the loan.
50 That application form did not nominate the amount of the loan which was sought. However, on 10 July 2002 Colin Biggers & Paisley, the solicitors for St George Bank, issued a solicitor's certificate relating to a loan to "James Court & Associates Pty Ltd ATF MRB Trust", concerning which there would be security over the Kotara property, relating to a loan of $350,000, and stating the money was required on 11 September 2002. There is an offer of finance, by St George Bank to the second defendant, in the sum of $350,000. A letter from Colin Biggers & Paisley to St George Bank dated 10 September 2002 confirms that the loan transaction was in order for settlement, and stated that settlement was to be effected on 11 September 2002.
51 There is a St George Bank statement as at 31 January 2003, relating to an account in the name of "James Court & Associates Pty Ltd ATF MRB Trust" addressed to "MRB Trust" care of the Bankrupt at the Kotara property. That statement shows a facility limit of $350,000, and a debit balance of a little more than $112,000. The account number on the statement is the same as the loan account number stated in the heading of the letter from Colin Biggers & Paisley to St George Bank dated 10 September 2002. From that, I infer that the mortgage to St George Bank was granted, and that drawings were made on the facility which, as at 31 January 2003, totalled a little over $112,000.
52 Though the loan application (and certain other documents which officers of the Official Trustee have seen in the course of administering the estate of the Bankrupt) referred to the "MRB Trust" the Bankrupt has stated at his public examination that he has not heard of that trust, only the "Buffier Family Trust". After enquiries by an officer of the Official Trustee, it has not obtained any copy of documents relating to the "MRB Trust". Whether any such trust exists is, to put it at its lowest, doubtful.
53 On 19 February 2003 the second defendant started proceedings number 1520 of 2003 against RAMS Mortgage Corporation Limited and Andrew Buffier, claiming a declaration that as against Andrew Buffier the plaintiff was an equitable mortgagee of the St Leonards property, and seeking orders connected with obtaining a discharge of a mortgage held by RAMS over the St Leonards property. The solicitor acting in those proceedings for the second defendant (who was the plaintiff in those proceedings) was Mr Zwar, the same solicitor who acts for the second defendant in the present application. It is apparent, from an affidavit which Mr Zwar swore in those proceedings, that he was acting in those proceedings on instructions given to him by the Bankrupt. In connection with obtaining the discharge of the RAMS mortgage, the St George Bank statement dated 31 January 2003 to which I have earlier referred, was produced, as it demonstrated that the second defendant had an approved credit limit of $350,000, of which over $237,000 was still available, and that amount was more than ample to discharge the RAMS mortgage. The RAMS mortgage over the St Leonards property has now been discharged.
54 The mortgage which the second defendant holds over the St Leonards property is undated, but stamp duty was paid on it on 21 May 2003. An annexure to the mortgage refers to the mortgage (incorrectly) as being dated 19 May 2003. That annexure, which appears to be signed by Mr Andrew Buffier, is a very short document, which makes clear that the mortgage relates to a principal sum of $630,000, that no interest is payable on that principal unless and until there is a demand to repay and default in payment, and that the principal sum is repayable at any time. That document does not identify any transaction by reason of which the $630,000 became owing.
55 That mortgage was registered on the title of the St Leonards property on 23 June 2003.
56 On a date in October 2003 Mr Zwar, purporting to act on behalf of the second defendant, executed a notice addressed to Andrew Buffier under section 57(2)(b) Real Property Act 1900. That notice asserted that the total amount owing was in excess of $757,000, and that interest had been accruing at 9% per annum from 1 August 2001. There is no evidence of service of that notice, but Raine & Horne, St Leonards, were instructed to place the home unit on the market in September 2003 at a price of $740,000. Though Raine & Horne advertised the property, and produced a brochure relating to the home unit which put a price of $750,000 on it, no buyer at an acceptable price was found.
57 On 12 December 2003 the Official Trustee wrote to the company secretary of the second defendant, care of the firm which provided the registered office of the second defendant, seeking to have the 100 shares in the second defendant which were held by the Bankrupt transferred to the Official Trustee. No reply was received to that letter. The registered office of the second defendant was changed to a different address on 23 December 2003.
58 The Bankrupt sent a letter dated 27 May 2004 to the Governor of a prison at Windsor, requesting that certain enclosed documents should be signed by Andrew Buffier, and returned. Those documents included a mortgage for $50,000 to be granted by Andrew Buffier over the St Leonards property to James West, and a loan agreement relating to a loan of $50,000 from James West to Andrew Buffier. A search of the title of the St Leonards property on 16 June 2005 showed a caveat by James West over that property.
59 The letter from the Bankrupt to the Governor of the prison was on a letterhead which stated "Bouffiere Family Trust. Certified Practicing Accountants. Business Service & Advice. Financial Consultant", and which gave the address of the Kotara property.
60 On 17 September 2004 a mortgage was executed by the second defendant over the Kotara property in favour of Permanent Custodians Limited. That mortgage was executed on behalf of the second defendant under seal, attested by Mr Service, who stated he was "sole director/secretary". The stamp of the Office of State Revenue on that mortgage, indicating the situation concerning stamp duty, shows that it was stamped to secure up to $450,000. That is, of course, an increase beyond the $350,000 facility limit which had previously existed with St George Bank, and was secured over the Kotara property.
61 On 15 July 2005, at 5.45pm, David Landa Stewart, the firm which Mr Zwar is a member, caused over 300 pages of documents to be delivered to the office of the Official Trustee. Those documents were in response to notices to produce books and documents which had been issued to David Landa Stewart by the Official Trustee on 8 February 2005 and 21 April 2005. The officer handling the file at the Official Trustee's office did not have the opportunity to read that documentation before the hearing of the case started on Monday, 18 July 2005. When he had read it, the Official Trustee sought, and was granted, leave to re-open evidence, to tender that material.
62 The material discloses that all the instructions given to Mr Zwar concerning the refinance of the Kotara property were given by the Bankrupt, save for one communication where Mr Service returned signed mortgage documents. They disclose that an amount of $361,871 had, by the time of the refinance, become owing to St George on its mortgage. Of the amount which was not paid to St George from the refinancing, a cheque for $51,049.92, payable to the second defendant, was sent by Mr Zwar to the Bankrupt. Mr Zwar's firm received $33,282.25 from the refinance proceeds, made up of a little over $18,000 in relation to legal fees connected with the RAMS home mortgage, and a further $15,000 which was to be held in trust for a matter called "Buffier - James West 70333".
63 The documentation also showed that Mr Zwar had in his files two copies of the ASIC order made on 27 January 1999, which prohibited the Bankrupt from being involved in the running of a corporation without the leave of the court.
64 After that additional material was tendered, counsel for the second defendant sought, and was granted, an adjournment to enable him to take instructions concerning it. When the matter resumed, on 5 August 2005, counsel for the second defendant was instructed not to tender any further evidence. That leads to draw more strongly the inference available from the evidence that the Bankrupt has been actively involved in the running of the second defendant and making commercial decisions relating to its assets, notwithstanding that Mr Service is, nominally, its director.
65 Winding up on the just and equitable ground can occur when there are serious grounds for lack of confidence in the directors of companies in the conduct and management of the affairs of the company (Australian Securities Commission v AS Nominees Ltd (1995) 18 ACSR 459 at 519), or when there is a lack of straightforward dealings between the company and the public (Re Producers Real Estate and Finance Company Ltd [1936] VLR 235) or its clientele (Macquarie Bank Ltd v TM Investments Pty Ltd [2005] NSWSC 608 at [13] per Barrett J), or its shareholders. In the present case, I cannot conceive of a proper reason why Mr Service (even if he had been validly appointed) should seek to remain as a director of the company, in direct opposition to the wishes of the totality of the shareholder body. He presents none in evidence. The dealings of the company, though the medium of the Bankrupt and notwithstanding both his bankruptcy and his disqualification, are not ones that seem calculated to advance the interests of the Official Trustee, who is now the sole shareholder, and has had the right to become the sole shareholder since the bankruptcy occurred. This is an appropriate case to wind the company up.