Akierman Holdings Pty Ltd v Akerman (No 2) - [2020] NSWSC 970

Supreme Court

New South Wales

Medium Neutral Citation: Akierman Holdings Pty Ltd v Akerman (No 2) [2020] NSWSC 970
Hearing dates: 6, 9 April 2020; further written submissions ending 15 June 2020
Date of orders: 30 July 2020
Decision date: 30 July 2020
Jurisdiction: Equity - Corporations List
Before: Parker J
Decision:
See [223]-[227]

Catchwords:
CORPORATIONS — directors and officers —unauthorised transfer by director of company’s share of real property to himself – liability of director as trustee – liability as recipient to make restitution – liability for breach of director’s duties
RESTITUTION – ineffective transaction – transfer of company’s share of real property – void for want of authority but registered – whether company entitled to share of increase in value in property and share of net income from property since date of transfer – equitable proprietary relief
EQUITY – jurisdiction in aid of rights at law – transfer of company’s share of real property – void for want of authority but registered – rescission – account of value of property and income derived from it – interest
CORPORATIONS – director and officers – invalid resolution by director to pay director’s fees to himself – liability as recipient to make restitution – whether director entitled to counter-restitution by way of quantum meruit – whether incontrovertible benefit
CORPORATIONS – director and officers –unauthorised payment by director to himself as solicitor – liability as recipient to make restitution – whether director-solicitor entitled to counter-restitution by way of quantum meruit – whether incontrovertible benefit

Legislation Cited:
Civil Procedure Act 1995 (NSW), s 100(1)
Companies (Winding up) Act 1890, 53 & 54 Vict, c 63, s 10
Companies Act 1936 (NSW), ss 148, 308
Conveyancing Act 1919 (NSW), s 66G
Corporation Act 2001 (Cth), ss 140(1) 180(1), 181(1), 182(1), 237, 260A, 1317H
Grants of Life Annuity Act 1776, 17 Geo 3, c 26
Real Property Act 1900 (NSW), ss 42, 118

Cases Cited:
Alati v Kruger (1955) 94 CLR 216
Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560
Bank of New South Wales v Fiberi Pty Ltd (1992) 8 ACSR 790
Barnes v Addy (1874) LR 9 Ch App 244
Belmont Finance Corporation v Williams Furniture Limited (No 2) [1980] 1 ALL ER 393
Bromley v Holland (1802) 7 Ves Jun 3; 32 ER 2
Cassegrain v Gerard Cassegrain & Co Pty Ltd (2014) 254 CLR 425
Commonwealth Bank of Australia v Hatfield (2001) 53 NSWLR 614
Commonwealth of Australia v SCI Operation Pty Ltd (1998) 192 CLR 285
Coshott v Lennin [2007] NSWCA 153
Craven-Ellis v Canons Ltd [1936] 2 KB 40
Criterion Properties PLC v Stratford UK Properties LLC [2004] 1 WLR 1846
Cullerne v The London and Suburban General Permanent Building Society (1890) 25 QBD 485
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89
Feret v Hill (1854) 15 CB 206; 139 ER 400
Great Investments Ltd v Warner (2016) 243 FCR 516
Guinness PLC v Saunders [1990] 2 AC 663
Hagan v Waterhouse (No 2) (1991) 34 NSWLR 308
Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600
Kalls Enterprises Pty Ltd v Baloglow [2007] NSWCA 191
Lahoud v Lahoud [2010] NSWSC 1297
Langman v Handover (1929) 43 CLR 334
Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635
Mulkana Corporation Ltd v Bank of New South Wales (1983) 8 ACLR 278
O’Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Portsea Island Building Society v Barclay [1894] 3 Ch 8
Portsea Island Building Society v Barclay [1895] 2 Ch 298
President of the India v La PintadaCompaniaNavigacion SA [1985] AC 104
R v Byrnes (1995) 183 CLR 501
Re Canadian Land Reclaiming and Colonizing Company (1880) 14 Ch D 660
Re Dawson [1966] 2 NSWR 211
Re Ferguson (1969) 14 FLR 311
Re International Vending Machines Pty Ltd [1962] NSWR 1408
Re Iris McLaren (No 2) [2019] NSWSC 1894
Re Lands Allotment Company [1894] 1 Ch 616
Re Sharpe [1892] 1 Ch 154
Richard Brady Franks Ltd v Price (1937) 58 CLR 112
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516
Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552
Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 ALL ER 1073
Smits v Roach (2004) 60 NSWLR 711
Steen v Law, Liquidator of International Vending Machines Pty Ltd (1963) 63 SR (NSW) 511; [1964] AC 287
Svanosio v McNamara (1956) 96 CLR 186
Torrens Aloha Pty Ltd v Citibank Na (1997) 72 FCR 581
Trimis v Mina [1999] NSWCA 140
WestdeutscheLandesbankGirozentrale v Islington London Borough Council [1996] AC 669

Texts Cited:
Austin, R P, H A J Ford and I M Ramsay, Company Directors Principles of law & Corporate Governance (1st ed, 2005, LexisNexis Butterworths)
Birks, P, Unjust Enrichment (2nd ed, 2005, Oxford University Press)
Campbell, S, ‘Usury and Annuities of the Eighteenth Century’ (1928) 44 LQR 473
Edelman, J and E Bant, Unjust Enrichment in Australia (2nd ed, 2016, Oxford: Hart Publishing)
Heydon, J D and M J Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths)
Heydon, J D, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths)
Mason, K, J W Carter and G J Tolhurst, Mason & Carter’s Restitution Law in Australia (3rd ed, 2016, LexisNexis Butterworths)
Mitchell, C, P Mitchell and S Watterson, Goff & Jones The Law of Unjust Enrichment (9th ed, 2016, Sweet & Maxwell)
O’Sullivan, D, S Elliott and R Zakrzewski, The Law of Rescission (2nd ed, 2014, Oxford)
Restatement of the Law Third: Restitution and Unjust Enrichment (American Law Institute Publisher, 2011)

Category: Consequential orders (other than Costs)
Parties:
Akierman Holdings Pty Ltd (Plaintiff)
Steven Akerman (Defendant)
Cross-claim
Steven Akerman (Cross-claimant)
Akierman Holdings Pty Ltd (First Cross-defendant)
Emilia Marr (Second Cross-defendant)
Gillian Dar (Third Cross-defendant)
Representation:
Counsel:
G Curtin SC/E Cowpe (Plaintiff/ First and Third Cross-Defendants)
M Condon/N Bentley (Defendant/Cross-Claimant)
Solicitors:
Harris Freidman Lawyers (Plaintiff/First and Third Cross-Defendants)
Holman Webb (Defendant/Cross-claimant)

File Number(s): 2015/323943
Publication restriction: Nil

Judgment

I delivered my principal judgment in these proceedings on 31 October 2019: Akierman Holding Pty Ltd v Akerman [2019] NSWSC 1486. In that judgment I set out my conclusions on the liability issues in the proceedings but did not make any final orders. The proceedings were adjourned at the parties’ request to enable them to consider how they wished to proceed with determining the remedial consequences of my conclusions.
This judgment now determines what orders should be made to give effect to my liability findings. The judgment assumes familiarity with, and uses the abbreviations in, my principal judgment. Paragraph references in my principal judgment are denoted “J1”.
The process of presenting the parties’ respective positions on the remedial consequences of my first judgment took longer than had been expected. As mentioned at J1 [37], at the time of the hearing which led to my principal judgment Mr Akerman’s wife was gravely ill. She has since died. Mr Akerman has been badly affected by her death. Although he obtained some assistance from counsel on a direct access basis, that assistance was limited to interlocutory steps. It was not until February this year that he retained new solicitors and counsel to act for him.
Following the preparation of a detailed spreadsheet containing the calculation of the amount claimed by the Company, and the exchange of detailed written submissions, the matter came before me for hearing on 6 April. A number of loose ends were addressed in a further hearing on 9 April, and in supplementary submissions which were received on 27 April, 12 May, 20 May and 15 June.
The Company succeeded in its challenge to three steps taken by Mr Akerman in the purported exercise of his powers as a director of the Company. The steps were:

the transfer to Mr Akerman of the Company’s one-quarter share of a property at 9 Miller Street, Bondi (in fact the transfer involved other members of Mr Akerman’s family, but no point was taken about this and for convenience I will for the purposes of this judgment ignore it);
the payment of director’s fees to Mr Akerman, and consequential superannuation contributions;
the payment of legal fees to Mr Akerman’s firm, Sowden Akerman, and to counsel retained by him, for work purportedly done on the Company’s behalf.
1. The Company failed in its challenge to another step taken by Mr Akerman, namely the transfer of the Company’s one-quarter shares of two properties at 5 and 7 Miller Street, Bondi. In the course of the supplementary submissions, counsel for the Company sought to have me re-open my conclusions on this claim. That was opposed by counsel for Mr Akerman and I address it below.
2. It will not be possible in this judgment to place final figures on the Company’s entitlements under the claims on which the Company succeeds. The parties are at issue, among other things, about the way in which the calculations should be carried out. My aim is to resolve the issues of principle so that the amounts due can be calculated by the parties and final orders can then be made.
3. It will also be necessary to deal with the costs of these proceedings, and orders are sought varying the costs order made by Black J in the application under s 237 of the Corporations Act 2001 (Cth) which resulted in these proceedings (see J1 [14]). Counsel for Mr Akerman asked to have this task deferred until final orders are made, and there was no opposition to that course from counsel for the Company.
4. It is convenient to deal first with the quantification of the Company’s entitlement with respect to its share of 9 Miller Street. I then deal with the reopening of the claim concerning the Company’s shares of 5 and 7 Miller Street. Next I address the Company’s entitlements with respect to the director’s fees and legal fees. Finally I deal with the question of interest on the Company’s monetary entitlements.

Transfer of Company’s share of 9 Miller Street

In May 2005 Mr Akerman and Ms Dar agreed (without contractual effect) for Mr Akerman to buy the Company’s one-quarter share of 9 Miller Street for $1.25 million: J1 [95], [173]. This represented one-quarter of the agreed value of the property, $5 million.
Later Mr Akerman drew up and signed a one-page written agreement (set out at J1 [173]) reflecting the oral understanding. The agreement was dated 1 July 2005 (although probably prepared after that date) and signed by Mr Akerman both on his own behalf and purportedly on behalf of the Company. It provided, among other things, that the purchase was to be completed in 2006, but Mr Akerman was entitled to extend the completion date, in which event he was required to pay interest. The interest was to be calculated at a nominated bank rate, or the net income from the property, whichever was the greater.
At the time of this agreement, Mr Akerman and Ms Dar each owned one-eighth of the property in their own right and half was owned by their aunt and uncle, the Marrs. In February 2006 Mr Akerman completed the purchase of the Marrs’ half share and Ms Dar’s one-eighth share, taking his share to three-quarters: J1 [102]. Thereafter he received the rental income, and paid the expenses, attributable to the property. He also, at considerable expense, renovated it.
The transfer of the Company’s one-quarter share was carried out pursuant to a formal contract of sale in standard Law Society form which was dated January 2010. The transfer took place on 19 March 2010: J1 [131].
The purchase price under the contract was not paid at the date of the transfer. Rather, Mr Akerman, relying on his purported entitlement under the 2005 agreement, deferred payment until 24 April 2013. On that day he paid the sum of $2.2 million: J1 [139]. This amount was intended to cover the purchase (including interest) of the Company’s share of 9 Miller Street and also of the Company’s one-quarter shares of 5 and 7 Miller Street, which had been the subject of a similar deferred purchase agreement, made in February 2007: J1 [204].
I found that Mr Akerman had no authority from the Company to enter into the one-page agreement dated 1 July 2005, the January 2010 standard form contract, or the transfer. Each agreement or assurance was therefore void: J1 [283]. In the circumstances, I considered that no question of breach of fiduciary duty (which had also been alleged against Mr Akerman by the Company) could arise: J1 [305].

Valuation evidence

The report from the valuer called by the Company, Mr Bird (see J1 [28]), was dated 23 April 2018. In that report, Mr Bird put the current value of 9 Miller Street, as a whole, at $13.6 million. He also gave valuations at various past dates including 19 January 2010, approximately two months before the transfer of 9 Miller Street took place. Mr Bird’s opinion was that the property had a value at that time of $7.5 million.
In his report, Mr Bird was also asked to consider whether the market value of the Company’s 25 per cent share of the property would be different from 25 per cent of the value of the property as a whole. His response was:

My professional opinion is that this 25% share should have a discounted value if it were to be sold, given this must be considered an encumbered share which would not be readily accepted by the market in general, nor is a marketable commodity for which there is a range of comparable sales evidence, as is the case with a typical full share of an unencumbered Torrens Title residential property. Under any circumstances, the 25% share holder has no autonomy in terms of decision making over the property, renovation of units, upgrading of common areas or future redevelopment, which must, in any reasonable assessment, require a discount to be applied to the simple 25% of total value figure. This is mitigated somewhat by the type of property the subject comprises, being a an investment block of units, and if a strata subdivision is contemplated, a division of strata units equal to a 25% holding could be more easily determined. That is, a property such as this is perhaps far easier and more attractive a proposition to hold a share in, than say your typical family home.

Mr Bird stated that in the absence of comparable sales evidence concerning shares in properties, determining the discount would “come down to a very subjective judgment”. He stated that he “would hypothesise that this discount may well be in the order of ten to twenty-five per cent of the simple quarter of the whole value”.
In cross-examination, Mr Bird was asked about the precision of the valuation figures in his report. He said that valuation is not an exact science; the true value would lie in a range around the figures he had given. He agreed that a five to ten per cent range was reasonable.
Mr Bird was also asked about the state of the market since he had undertaken his valuation (the cross-examination took place on 13 November 2018). He said that in broad terms the market had quietened somewhat, but he could not be specific about the state of the market in the Bondi area and was unwilling to hypothesise in the witness box without having undertaken a proper and detailed analysis. Mr Bird was not asked about his evidence concerning the ten to twenty-five per cent discount factor.

Issues for determination

In its Statement of Claim, the Company sought declarations of invalidity of, and orders setting aside, the transfers of its respective shares of the Miller Street properties to Mr Akerman. But in opening submissions at the trial in 2018 counsel for the Company indicated that it no longer pursued that form of relief. Instead the Company sought money judgments against Mr Akerman for the capital value of its shares of the properties, and for a corresponding share of the income derived from them.
The parties agreed that, on my findings, Mr Akerman must make recompense for the Company’s one-quarter share of 9 Miller Street, subject to a credit for the appropriate proportion of the $2.2 million payment made in April 2013. He must also make recompense for a one-quarter share of the income received from that property, at least up to the date of transfer.
There are three issues to be determined:

the basis (equitable or common law) on which the amount payable by Mr Akerman should be calculated;
how the capital value of the Company’s one-quarter share of the property should be assessed;
what proportion of the $2.2 million payment should be attributed to 9 Miller Street.

Entitlement to equitable restitutionary relief

The Company’s position was that the amount payable by Mr Akerman should be determined on what I will refer to as an “equitable restitutionary basis”. This is the basis upon which an award of compensation is made against a defaulting trustee; the trustee’s obligation is to restore the trust estate, so the measure of compensation is the amount required to replace the trust assets at the date of judgment: see Re Dawson [1966] 2 NSWR 211.
Applying this principle, the Company claimed $3.4 million for the capital value of its share of 9 Miller Street, being one-quarter of the April 2018 valuation of $13.6 million (this was the latest date for which a valuation is in evidence). The Company also claimed one-quarter of the net income derived from the property after it was transferred. Figures for the net income from the property for the period 1 March 2006 to 11 December 2019 were in evidence. A one-quarter share of the net income totalled $838,749.93.
For the purposes of determining the net income, the Company accepted the expenditure Mr Akerman said he had made on the property, without troubling about whether that expenditure was of a capital or revenue nature. Strictly speaking (and for the purposes of determining the tax payable on the award of compensation to the Company) it may be that capital expenditure should be applied against the capital value of the Company’s share of the property. But no point was taken about this by either party, and I put it to one side for the purposes of this judgment.
In response, counsel for Mr Akerman argued that, given my finding that the transaction was unauthorised, the Company’s entitlement was to restitution at common law. The liability on this basis, so counsel submitted, would be calculated by reference to the value of the property at the date of transfer ($1.875 million, being one-quarter of $7.5 million) and would not include anything for income after that date, although it would carry interest from the date of transfer.
In reply, counsel for the Company contended that even if its cause of action was for common law restitution, it was still possible to obtain equitable restitutionary relief. Alternatively, counsel argued that I had been wrong in saying in my judgment that questions of breach of fiduciary duty did not arise. I was asked to reconsider this aspect of my judgment. This provoked further submissions about whether such a reconsideration was permissible, and if so, what the outcome should be.
Director as trustee: The first argument from counsel for the Company was that, on the authorities, a director who causes a company to enter into an unauthorised transaction is treated in the same way as a trustee who commits a breach of trust. Equitable restitutionary relief is therefore available. Counsel relied upon four authorities in particular in support of this argument.
The first authority was an English case, Re Lands Allotment Company [1894] 1 Ch 616. The Lands Allotment Company (which, from its name, appears to have been involved in land development) had previously been owed £35,000 by a builder. The builder promoted a company, called the Building Securities Company, and £35,000 of shares in the new company were issued to the Lands Allotment Company in satisfaction of the debt. Later the Lands Allotment Company invested a further £5,200 by way of subscription in the Building Securities Company.

The Building Securities Company failed and so did the Lands Allotment Company. The liquidator of the Lands Allotment Company brought proceedings claiming compensation from the directors in office at the time of the transactions. One summons concerned the £35,000 share issue and the other the subsequent subscription of £5,200.
The trial judge, Wright J, concluded that it had been ultra vires of the Lands Allotment Company to subscribe for the shares in the Building Securities Company. This was because the Lands Allotment Company had no power to invest its assets in shares of another company whose business was outside the business of the Lands Allotment Company as specified in its memorandum (see at 624).
On appeal it was suggested that the £35,000 transaction might be seen as a compromise, which the directors would have had power to effect. However, the Court of Appeal was content to deal with that transaction on the assumption that it was ultra vires. There was no dispute that the £5,200 transaction had been ultra vires.
It was common ground that the conclusion that the purchases of shares in the Building Securities Company were ultra vires made the directors responsible for those purchases personally liable. Lindley LJ said (at 631):

[I]f it was an improper transaction, all those directors who were parties to this improper investment … would naturally and obviously be liable to make good the money.

The question so far as the £35,000 issue was whether the claim against the directors was statute barred. The Court of Appeal held that it was, because the limitation provisions applicable to trustees applied to the directors.
Lindley LJ said (at 631):

Although directors are not properly speaking trustees, yet they have always been considered and treated as trustees of money which comes to their hands or which is actually under their control; and ever since joint stock companies were invented directors have been held liable to make good moneys which they have misapplied upon the same footing as if they were trustees.

Kay LJ said (at 638):

[C]ase after case has decided that directors of trading companies are not for all purposes trustees or in the position of trustees, or quasi trustees, or to be treated as trustees in every sense; but if they deal with the funds of a company, although those funds are not absolutely vested in them, but funds which are under their control, and deal with those funds in a manner which is beyond their powers, then as to that dealing they are treated as having committed a breach of trust.

There was no limitation issue so far as the £5,200 investment was concerned. That investment was made pursuant to a resolution passed in July 1889 by two of the directors, Mr Banks and Mr Dresser. The minutes of that meeting were confirmed at a later meeting of the directors in October 1889 at which two other directors, Mr Brock (who was the chairman of directors) and Mr Theobald, were also present.
At first instance, Wright J found Mr Banks and Mr Dresser liable and there was no appeal by them. He dismissed the claims against Mr Theobald and Mr Brock. On appeal, the claim against Mr Theobald failed because on the evidence he had nothing to do with the transaction at any point and by the time he approved the minutes in October 1889 the transaction had already been carried to completion. But Mr Brock was found liable, on the ground that as chairman of directors he had been aware of the proposed purchase, and had approved it, before the directors’ meeting of July 1889 although he did not actually attend that meeting.
The significance of the case for present purposes is that Mr Brock was found liable despite the fact that it was not suggested that there had been any breach of fiduciary obligation, or negligence, on his part. Lindley LJ (at 636) described Mr Brock, in giving his approval to the proposal, as:

[E]xercising his judgment upon it. Believing perfectly honestly it was intra vires, but making a mistake as to the powers of directors in investing money.

The next case to which I refer was not directly cited by counsel for the Company, but was referred to in other cases on which counsel relied. It is Re International Vending Machines Pty Ltd [1962] NSWR 1408, a decision of Jacobs J sitting at first instance in this Court.
In that case the directors of International Vending Machines Pty Ltd (“IVM”) caused it to lend £200,000 to a new company which used those funds to purchase the shares of the existing shareholders of IVM and to subscribe £50,000 for further shares in IVM. IVM failed and the liquidator claimed recovery of the £200,000 from the directors, alleging that the transaction contravened the statutory prohibition on a company providing financial assistance for the acquisition of its own shares (Companies Act 1936 (NSW), s 148; see now Corporations Act 2001 (Cth), s 260A).
Jacobs J found that the statutory prohibition applied. It was then argued on behalf of the directors that they could not be liable on the ground that they had acted bona fide and without negligence.
Jacobs J said (at 1419-1420):

It seems to me that it serves no useful purpose to debate whether or not a director is in the position of a trustee. The number of occasions in which he has been so described in the authorities may be matched, I think, by an equal number of occasions when the courts have gone to some pains to point out that he is not truly a trustee. Except to the extent to which any property of the company is vested in him he is not on the usual definition of a trustee properly described as one. However, that still leaves open the question whether his duties and obligations either wholly or in part are the same as those of a trustee.

His Honour continued (at 1420):

It seems to me that the duties of directors in many instances differ from the duties of trustees; particularly is this difference noticeable in regard to the type of careful conduct which may be expected of a director compared with a trustee. A trustee in the ordinary way is obliged, primarily to keep the trust property safe. However, a director of a company is a commercial man and any duty of his in regard to dealings with the property of the company on its behalf must be looked at in the light of his position in commerce. Therefore, I think it is true to say that the tests of prudence which have been applied by the courts in the case of trustees are not the same tests as must be applied in the case of directors of a company.

His Honour posed the question in the case as being “whether a director who disposes of property of a company in an ultra vires manner is liable in the same way as a trustee would be liable for disposing of trust property in a manner beyond the powers conferred on him by the trust instrument” (at 1420). On the authorities he answered the question in the affirmative. He ordered the directors to pay compensation of £150,000, representing the difference between the £200,000 lent and the £50,000 which was subscribed back for new shares.
The case went on appeal to the Privy Council which upheld Jacobs J’s decision: (1963) 63 SR (NSW) 511; [1964] AC 287. The issues on appeal concerned the application of the legislation and the quantum which should have been awarded. His Honour’s conclusion that, once it was decided that the legislation applied, the directors were personally liable, was not questioned. Using the same reasoning, directors involved in the provision of financial assistance by companies for the purchase of their own shares were also found liable in equity to compensate those companies in Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 ALL ER 1073 (English Chancery Division, Ungoed-Thomas J) and Re Ferguson (1969) 14 FLR 311 (Federal Court of Bankruptcy, Gibbs J).
In Re International Vending, Jacobs J assumed that no recovery of the monies provided by way of financial assistance was available from the recipient, because of the illegality of the transaction: see [1962] NSWR at 1422. In Selangor, Ungoed-Thomas J thought that illegality barred not only an action in debt but also an action in restitution: at 1150I-1151B. But he held that it did not bar a claim against the recipient as constructive trustee according to the principles in Barnes v Addy (1874) LR 9 Ch App 244: at 1152C-G. In Ferguson, where the recipient was the director himself, Gibbs J questioned the unavailability of a restitutionary action at law but concluded that the director was liable in equity in any event: at 320-321.
The English Court of Appeal decision in Belmont Finance Corporation v Williams Furniture Ltd (No 2) [1980] 1 All ER 393 was another financial assistance case. In Selangor, the transaction had been orchestrated by a purchaser who had no funds of his own to pay for the shares. In Belmont the transaction was an honest one. The directors believed that the price being paid was a fair one, and were provided with counsel’s advice that the transaction was lawful. Nonetheless, it was found to have contravened the statutory prohibition.
The Court of Appeal concluded that the parties’ subjective honesty made no difference. The Court considered that the contravention of the statutory prohibition necessarily meant that the provision of financial assistance was a misapplication of the company’s funds and a breach of the directors’ duties, and the relevant facts were known to the recipient. In reaching this conclusion the Court of Appeal relied upon nineteenth century authorities such as Re Lands Allotment in support of the proposition that the directors’ participation in the transaction was a breach of trust. This breach of trust made the recipient liable on Barnes v Addy principles.
The second decision upon which counsel for the Company relied was Mulkana Corporation Ltd v Bank of New South Wales (1983) 8 ACLR 278. That was a case (strictly speaking, two cases, but the facts of each case were relevantly the same) where a controlling interest in the company in question changed hands. As part of the change of control, the board of the company changed from what were described in the judgment as the “old directors” to the “new directors”. Before the payment associated with the change in control had taken place, the old directors passed resolutions appointing the new directors to the company, and then resigned. The new directors then caused cheques to be drawn on the company’s bank account which were used to complete the purchase.
The allegation was again that the payment of these monies contravened the statutory prohibition on financial assistance. The liquidator caused proceedings to be brought against the bank on the footing that it knew, or ought reasonably to have known, of the illegal nature of the transaction. The bank then cross-claimed against the old directors. The bank’s allegation was that the old directors were trustees of the company’s monies and had handed control of those monies to the new directors before the payment was made, being on notice of the illegal purpose of the new directors. The old directors moved to strike out the bank’s cross-claim, contending that they were not trustees.
Powell J (as he then was) undertook a review of the authorities on the treatment of company directors as trustees of the company’s property. His conclusion was (8 ACLR at 279):

[W]hile directors are not, properly speaking, trustees, but fiduciary agents, the range of duties and obligations to which they are subject, or which are imposed upon them, include duties or obligations which place them, in relation to moneys or property which are in their possession, or over which they have control, in a position analogous to, although not identical with, that of trustees.

His Honour continued (also at 279):

Their position is not identical, since, for example, directors are not subject to the limitations on investment to which trustees normally are subject, but it is analogous since, just as, in such a case, trustees would be liable to recoup the trust for any loss, directors who misapply, or are parties to the misapplication of, the funds or other property of the company, are, subject to the court's power to relieve them from so doing, liable to recoup the company for any loss thereby sustained.

In support of these propositions, his Honour cited Re International Vending and Re Ferguson.

Powell J decided that, although the description of the old directors as trustees was not strictly accurate, the claim was maintainable. He said (at 285):

[I]f, as is alleged in the first cross-claim, the “old directors”, while remaining directors of the relevant plaintiff, in effect abdicated control over the relevant plaintiff's funds in its current account to the “new directors” — whether validly appointed as such, or not — in circumstances in which they knew, or ought to have known, that some, or all, of those funds were to be applied to the fulfilment of some illegal purpose, the “old directors” could properly be held liable for a breach of their fiduciary duty to the relevant plaintiff, and liable to recoup it in respect of any consequent loss.

The third authority relied upon by counsel for the Company was O’Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262. That case concerned a parcel of shares owned by the plaintiff company (“Thomas”) in another company (“Jeffries”), whose shares were listed on the stock market. The directors of Thomas wished to sell the shares. Mr O’Halloran, who was a director of Thomas and also a director of Jeffries, wanted the Jeffries shares to be in friendly hands. He arranged for Thomas to sell the shares to a purchaser (“Bowes & Brown”) who he thought would be suitable.
Bowes & Brown lacked ready funds to complete the purchase. But Mr O’Halloran arranged for Jeffries to register the transfer of the shares from Thomas to Bowes & Brown anyway. He retained control of the old share certificate, the transfer form and the new share certificate. Other directors of Thomas and Bowes & Brown became involved and attempted to have Bowes & Brown complete the transaction by raising finance, or alternatively to have the register of Jeffries rectified by restoring Thomas as the owner. Mr O’Halloran obstructed these efforts. By the time a concerted effort was made to sell the shares to a third party Jeffries’ share price had gone into terminal decline and the shares were unsaleable.
There was no doubt that Mr O’Halloran’s conduct involved frequent, and flagrant, breaches of his duties as a director of Thomas. The issue for the Court of Appeal was the basis on which compensation should be assessed for breach of a director’s fiduciary duties, and in particular what test of causation should be used.
Spigelman CJ, speaking for the Court, stated (at 277):

The authorities establish, with respect to fraudulent (in the equity sense of

“fraud”) misappropriation or misapplication of property, that the duties of a director are equivalent to that of a trustee.

In support of this proposition, his Honour referred to (among other cases) Re Lands Allotment, Re International Vending and Mulkana.

It was argued that the real cause of the loss was the failure by Bowes & Brown to complete the transaction. But the Court concluded that Mr O’Halloran was liable on the basis that his conduct had prevented the company from selling the shares to a third party. Spigelman CJ said at 279:

The act of registration meant that Thomas lost the capacity to deal with the property by way of a sale to a third party. It is of no avail to O'Halloran to say that there was another cause of its failure to make such a sale — namely Thomas' attempt to enforce the contract with Bowes & Brown.

The affirmation of the contract with Bowes & Brown may, in a common law action, have been characterised as a novus actus interveniens. But this concept has no role to play in case of a breach of a fiduciary obligation involving disposition of property which disposition is fraudulent in equity. That is the present case.

Counsel for the Company fourthly relied on the Court of Appeal decision in Kalls Enterprises Pty Ltd v Baloglow [2007] NSWCA 191. That case concerned a Barnes v Addy claim against a third party (Mr Baloglow) for money received by him from a company, allegedly involving a breach of duty by a director of the company.
Shortly before the appeal was heard, the High Court handed down judgment in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, in which the Court pointed out (at [113]) that it had been “assumed, but rarely if at all decided” that the first limb applies to persons dealing with fiduciaries other than trustees. It was argued for Mr Baloglow that there was no Barnes v Addy liability because a company director is not a trustee.
Giles JA, speaking for the Court of Appeal, rejected that argument. He pointed out (at [153]) that Farah involved a partner’s breach of fiduciary duty, not a company director’s. He referred to Belmont (at [154]-[155]) and cited (at [157]) numerous other cases in which a third party had been made liable on a Barnes v Addy basis for company property received as a result of a director’s breach of duty. He also quoted (at [156] and [158]) from Re Lands Allotment and O’Halloran. He stated (at [159]) that “this line of authority should be followed until the High Court says otherwise”.
Counsel for the Company argued that in saying that “this line of authority should be followed”, Giles JA was referring to the broad proposition that a director is treated as a trustee of the company’s property. But in my view the context indicates a narrower meaning. What his Honour was referring to was the proposition that a Barnes v Addy claim lies against a third party who receives company property through a breach of fiduciary duty by a director.
These authorities show that company directors have been treated as if they were trustees of the company’s property for four purposes:

in making directors liable to compensate the company for ultra vires transactions to which they were party (Re Lands Allotment);
in making directors liable to compensate the company for illegal transactions to which they were party (Re International Vending; Selangor);
in imposing Barnes v Addy liability on third parties who receive company property as a result of an illegal transaction or one involving the breach of fiduciary duty (Selangor; Belmont; Mulkana; Kalls);
in determining whether, in an action against a director for compensation for breach of fiduciary duty, losses suffered by the company are too remote to be recovered (O’Halloran).

It is the first of these situations which is of most direct relevance for present purposes.

Counsel for Mr Akerman referred to the passages from Lindley LJ and Kay LJ in Re Lands Allotment which I have quoted at [36]-[37] above. Counsel pointed out that those passages were directed to whether the trustee limitation period was applicable. But the ratio of the decision is not limited to that question. The Court also imposed liability on Mr Brock. The case is a direct authority as to the liability of directors for ultra vires transactions. To similar effect are two other decisions of the English Court of Appeal shortly before Re Lands Allotment was decided, namely Cullerne v The London and Suburban General Permanent Building Society (1890) 25 QBD 485 and Re Sharpe [1892] 1 Ch 154.
It is, however, important to note the nature of the proceedings in which liability was imposed on directors in Re Lands Allotment. A claim against a trustee for breach of trust is one which derives from equity’s exclusive jurisdiction. But Re Lands Allotment was a misfeasance case. It was brought under the Companies (Winding up) Act 1890, 53 & 54 Vict, c 63, s 10. That enactment relevantly provided:

Power of court to assess damages against delinquent directors, officers, and promoters.
(1) Where in the course of the winding up of a company under the Companies Acts it appears that any person who has taken part in the formation or promotion of the Company, or any past or present director, manager, liquidator, or other officer of the company, has misapplied or retained or become liable or accountable for any moneys or property of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the court may, on the application of the official receiver, or of the liquidator of the company, or of any creditor or contributory of the company, examine into the conduct of such promoter, director, manager, liquidator, or other officer of the company, and compel him to repay any moneys or restore any property so misapplied or retained, or for which he has become liable or accountable, together with interest after such rate as the court thinks just, or to contribute such sums of money to the assets of the company by way of compensation in respect of such misapplication, retainer, misfeasance, or breach of trust as the court thinks just.
1. Re International Vending was also a misfeasance case. It was brought under the Companies Act 1936 (NSW), s 308. That enactment was relevantly identical to s 10(1) of the 1890 UK Act.
2. An enactment in the form of s 10(1) of the 1890 UK Act did not alter the general law liability of directors and other officers: Re Canadian Land Reclaiming and Colonizing Company (1880) 14 Ch D 660 at 670. What such an enactment did was to provide a statutory procedure, when the company was in liquidation, for enforcing the company’s common law and equitable claims against them.
3. For this purpose, the enactment had two limbs. The first limb applied where a director, or other officer, had misapplied, or retained, or become liable or accountable, for moneys or other property of the company. The second limb applied where the director or officer had committed “misfeasance or breach of trust”. The enactment also contained two remedies. Under either limb the director or officer could be ordered to pay compensation. In the case of misapplication or retention etc of a company asset, the court had an additional power to order the director to restore the asset.
4. Although this was not expressly stated, it seems clear enough that both Re Lands Allotment and Re International Vending were decided under the “misfeasance or breach of trust” limb of the statute. This meant that in each case the statutory remedy was limited to “compensation”, and that was what was awarded.
5. Whether “compensation” would have extended to compensation calculated on an equitable restitutionary basis is open to question. In O’Halloran, Spigelman CJ emphasised that the approach to remoteness under a “specific statutory regime” was not necessarily the same as that which applied in equity (see 45 NSWLR at 272D-E). Certainly the compensation awarded in Re Lands Allotment and Re International Vending was not calculated on an equitable restitutionary basis. The decisions are thus not direct authorities on the issue before me. Nor did O’Halloran involve a claim for compensation on an equitable restitutionary basis.
6. The legal landscape has changed markedly since the nineteenth century cases on ultra vires were decided. Although common law and equitable liability for breach of director’s duties continue to exist, they have largely been replaced by statutory provisions defining a director’s duties and providing remedies for breach. The separate misfeasance procedure available to companies in liquidation has disappeared.
7. The legislature has also sought to do away with the doctrine of ultra vires. The most recent provisions to this effect were enacted in 1998. The explanatory memorandum for the legislation stated that one of the reasons for abolishing the doctrine was to eliminate the strict liability of directors which had been established under the previous law (although Austin, Ford & Ramsay, Company Directors: Principles of Law & Corporate Governance (1^st ed, 2005, LexisNexis Butterworths) argue that the legislation may not in fact have succeeded in this objective: see at [11.9]).
8. The nineteenth century legal landscape was different for another reason. In Re Lands Allotment a claim against the directors for compensation was the only practicable avenue for recovery because the recipient of the ultra vires payment was in liquidation. But even where the recipient was available to be sued, under the old law recovery against the recipient was limited by the doctrine that moneys paid under mistake of law were irrecoverable: see Re Sharpe at 169.
9. The mistake of law doctrine has now been swept away: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 376. A payment of a company’s money which is made without authority will now usually give rise to a restitutionary cause of action enabling the company to recover the money from the recipient, unless the defendant is protected by the indoor management rule: see generally Mason, Carter & Tolhurst, Mason & Carter’s Restitution Law in Australia (3^rd ed, 2016, LexisNexis Butterworths) at [1017]. If the money is recovered, then (leaving aside questions of costs), even if there would otherwise be a claim against the director, the company has suffered no loss.
10. In the present case Mr Akerman was responsible as director for the disposal of the Company’s share of 9 Miller Street and was also the recipient of that share. Claims are available against him, at least potentially, in both capacities. In the circumstances, I propose to defer dealing with Mr Akerman’s liability as a director until after I have considered what relief is available against him as a recipient.
11. Equitable restitutionary relief against recipient: The starting point for the argument by counsel for Mr Akerman was that the invalidity of the transfer of the Company’s share of 9 Miller Street gives the Company a right of restitution at common law against Mr Akerman as recipient. Counsel submitted that this entitled the Company to recover judgment against Mr Akerman for the value of its share of the property at the date of transfer.
12. Restitution was formerly regarded as the domain of various common law writs. One of the recognised areas in which the writs would lie was where property had been transferred under a transaction which was invalid at common law. In such a case, different writs would be available depending upon what had been transferred. If money had been paid, the action was for money had and received. If services had been provided, the action was in quantum meruit. If goods had been supplied (and the right to re-possess the goods had been lost, or was waived), the action was in quantum valebat.
13. There was no equivalent writ which covered the completed transfer of real property. But the forms of action have been abolished and no longer constrain the courts. Modern doctrine recognises a right to restitution at common law wherever the facts of the case fit within an established category under the “unifying legal concept” of unjust enrichment: Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256-257. The conferral of a benefit under a transaction which is legally invalid is such a category. There would be no justification for refusing to recognise an entitlement to restitution where what is transferred is real property.
14. An entitlement to common law restitution in the present case has a particularly close analogy with the former action of quantum valebat where goods were supplied without a contractual entitlement to payment. In such a case, the goods would often be irrecoverable (or the plaintiff would not want them back) and the action would allow the plaintiff to recover their value. In the case of land under the Real Property Act such as 9 Miller Street, title passes on registration despite the invalidity of the transfer. A common law action to recover the value of the property would be precisely analogous. It was not suggested that the Real Property Act 1900 (NSW), s 118, had any application: compare Cassegrain v Gerard Cassegrain & Co Pty Ltd (2014) 254 CLR 425.
15. Counsel for the Company appeared to accept that the Company would have a common law right of restitution in the circumstances of this case. As a matter of principle, this seems to me to be sound.
16. The second step in the argument by counsel for Mr Akerman is more controversial. Counsel submitted that this common law remedy was the only one available. According to counsel, for the Court to grant equitable relief on such an action would involve a “fusion fallacy”: see Heydon, Leeming & Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5^th ed, 2015, LexisNexis Butterworths) at [2-140].
17. In response, counsel for the Company contended that exclusive focus on common law remedies was incorrect. Counsel pointed to statements of high authority to the effect that, in this area, equitable notions have become incorporated into the common law: see, for example, Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 554-555 [100], per Gummow J. Counsel submitted that this analysis had been definitely adopted by the main judgment of the High Court in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 597 [78], which spoke of the defence of change of position to a claim for money had and received being determined “by reference to equitable principles”.
18. Counsel for the Company also relied upon academic writings which treat equitable restitutionary remedies for the loss of property as part of the law of restitution. This approach has been adopted by, among others, Mitchell, Mitchell & Watterson, Goff & Jones: The Law of Unjust Enrichment (9^th ed, 2016, Sweet & Maxwell) at [4-34]-[4-35] and Edelman & Bant, Unjust Enrichment in Australia (2^nd ed, 2016, Oxford: Hart Publishing) at 24.
19. Counsel for Mr Akerman submitted in reply that, at High Court level, the governing principle for a claim to recover monies paid by mistake (and, by implication, other restitutionary claims) remains as stated by the Court in Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673:

[N]otwithstanding that the grounds of the action for recovery are framed in the traditional words of trust or use and that contemporary legal principles of restitution or unjust enrichment can be equated with seminal equitable notions of good conscience, the action itself is not for the enforcement of a trust or for tracing or the recovery of specific money or property. It is a common law action for recovery of the value of the unjust enrichment.

Counsel for Mr Akerman also submitted that, whatever the general state of High Court authority, I was bound by specific Court of Appeal authority to reject the award of equitable proprietary relief in this case.
The authority on which counsel relied was Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552. In that case a director of a family company used monies standing to the credit of the company with its bank to pay off a mortgage debt owed to that same bank to a third party who was regarded by the director and his wife as their surrogate daughter. The company brought proceedings against the daughter to recover the monies, claiming that the payment was unauthorised. The company did not make any claim against the director. He was however named as a cross-defendant to a cross-claim brought by the recipient seeking declaratory relief. He was also named as a respondent to the appeal, but no relief was sought against him.
The leading judgment was given by Barrett JA, with whom Bathurst CJ and Ward JA agreed. Ultimately his Honour upheld the trial judge’s finding that the director, Mr Gould, was authorised to draw on the company’s bank account for the sum in question. But his Honour also considered that no claim would have been available against the recipient in any event.
The company had pleaded that Mr Gould had failed to consult or to have regard to the interests of the company as a whole or its creditors. But on appeal counsel accepted that the basic challenge was to lack of authority, and this allegation was therefore irrelevant. Barrett JA considered that it was significant the company did not maintain any allegation of breach of duty by Mr Gould. He stated (at [18]):

[T]he highest the allegation against Mr Gould is put is that he acted without the Company’s authority — in other words, that there was a lack of power, not an abuse of power.

His Honour continued at [27]:

If, as the Company contends, the payment by the Company occurred through

an unauthorised act of Mr Gould, the payment was made without the Company’s assent. The situation is therefore the same as others in which someone receives another person’s property in a non-voluntary transaction — for example, through mistake, duress or theft, although without any of the overtones of dishonesty that will commonly be present in those cases. The remedy potentially available to the Company is accordingly by way of common law restitutionary action for money had and received in which a money judgment is sought against the defendant.

His Honour proceeded to state that no common law claim was available unless the monies could, in accordance with common law rules of tracing, be followed into the assets of the recipient. That was not possible. His Honour noted the possibility that equity’s rules were wider, but as no equitable claim was being made this did not assist the company. The company therefore had no claim.
Counsel for Mr Akerman relied upon the last sentence of [27], which I have quoted at [91] above. Counsel submitted that it compelled me to conclude that no equitable relief was available against Mr Akerman for receipt of property from the Company under a transaction which was invalid for want of authority.
Counsel for the Company responded by pointing out that Barrett JA was expressly dealing with a case where there was no allegation that the transaction was in some way improper. Counsel submitted that that was not this case. But while it is true that this case potentially involves additional features, I am concerned at the moment with a claim against Mr Akerman as recipient, not as director.
That does not, however, mean that I necessarily accept the submission made on Mr Akerman’s behalf about the limitations on equitable relief. As will become clearer below, what the Company is seeking is rescission. This is a collection of equitable remedies which can be used to undo a transaction and return the parties to the status quo ante, provided that substantial restitution on both sides (“restitutio in integrum”) can be achieved. Depending on the nature of the case, rescisison may involve:

an order setting the transaction aside;
an order for the delivery up and cancellation of the transactional instruments; or
orders for financial benefits transferred under the transaction, and subsequent profits or losses, to be quantified by means of an account and the net balance paid.
1. It is conventional to recognise rescission as being available under separate heads of equitable jurisdiction, one being equity’s exclusive jurisdiction and the other equity’s jurisdiction in aid at rights of common law: Meagher, Gummow & Lehane at [25-035]; but cf O’Sullivan, Elliott & Zakrzewski, The Law of Rescission (2^nd ed, 2014, Oxford) at [10.45]. In equity’s exclusive jurisdiction, rescission may be granted on grounds such as undue influence, equitable fraud, breach of fiduciary obligations or other unconscionable conduct.
2. In equity’s jurisdiction in aid of rights at law, rescission is available where a transaction is procured by common law fraud or duress. At law such a transaction is voidable and the innocent party must take action to avoid it. But once that is done, it is treated as having been void ab initio.
3. In such a case, equity may make its rescissionary remedies available if they are required (subject to the qualification that, rather than making an order setting the transaction aside, as in the exclusive jurisdiction, equity would make a declaration that the transaction is void). The reason for equity’s intervention is the inadequacy of legal remedies in some cases. I will illustrate this by reference to a case of common law fraud.
4. Where the defrauded party discovers the fraud and avoids the transaction before it has been carried to completeness, no difficulty arises. The invalidity of the transaction will be a defence to any action brought on it for damages at law.
5. Even if the transaction has been completed, remedies at law may be sufficient. If money has been paid by the innocent party, it can be recovered by a common law restitutionary action (for money had and received). If goods have been transferred then at common law the defrauded party retains the right to immediate possession of the goods and may sue in conversion (or, presumably, detinue). But the law had a very strict notion of what was required for restitutio in integrum, and this could be an obstacle to relief in more complicated cases.
6. In cases where land has been transferred under the contract, there is a more fundamental problem. If the innocent party lets the other party into possession but avoids the contract before completion, he or she may sue for trespass. But once the land has been conveyed, there is no common law mechanism to recover it; all the innocent party can do is sue for damages. The authority most often cited in support of this proposition is Feret v Hill (1854) 15 CB 206; 139 ER 400; see O’Sullivan, Elliot & Zakrzewski at [14.24]-[14.27] for a more extensive discussion for that case and how the principle came to be established.
7. This gap in the available legal remedies can be filled by equity intervening and decreeing the re-conveyance of land which has been transferred. Equity can also order the delivery up and cancellation of the contractual documents. And equity also has a less strict view of what is required to achieve restitutio in integrum. If property has been transferred which had resulted in the receipt of income or the incurring of expenditure (for instance, in the case of the sale of a business), then accounts can be taken or compensation ordered. See generally Alati v Kruger (1955) 94 CLR 216; Meagher, Gummow & Lehane at [25-065].
8. A transaction which is undertaken without corporate authority is void, rather than voidable, at law. But the analogy with a transaction procured by fraud is a very close one. At law, the invalidity of an unauthorised transaction can be relied on as a defence to any action to enforce it, if it has not been carried to completion. In a simple case, monies or the value of goods or services transferred under the unauthorised transaction may be recovered. But the same limitations to achieving restitution at law exist as for transactions which are avoided for fraud. There is every reason in principle why equity should play the same role in such a case.
9. There is also a body of authority, admittedly obscure, which apparently shows equity granting rescissionary relief in the case of transactions which were void ab initio and relief at law was insufficient. The cases in question (which are referred to by O’Sullivan, Elliot & Zakrzewski at [3.40]) date from the late 18^th and early 19^th century and followed the passage in the United Kingdom of the Grants of Life Annuity Act 1776, 17 Geo 3, c 26.
10. The Act was a response to the use of annuities to evade the legal restrictions, under usury legislation, on the level of interest which could be charged on loans. The historical background and the operation of the Act is described by Campbell, ‘Usury and Annuities of the Eighteenth Century’ (1928) 44 LQR 473, and by Rich & Dixon JJ in Langman v Handover (1929) 43 CLR 334 at 353-354. Instead of lending money to the “borrower”, the “lender” would purchase an annuity granted by the “borrower” on the “borrower’s” life. The annuity payments in effect represented the repayment of principal and interest. Often security would be obtained for the “borrower’s” payment obligations. The Act sought to regulate the trade, and provided that non-compliance with its requirements rendered the annuity, and any associated securities, void.
11. Where an annuity transaction was rendered void by the Act, the “borrower” could bring an action for money had and received to recover the annuity payments he or she had made. It became the practice in the common law courts to allow recovery of the annuity payments, less the “principal” amount paid by the “lender” for the purchase of the annuity together with interest on that “principal” at the maximum rate fixed by law. The Act also conferred on the common law courts specific powers to order the delivery up of the annuity and security instruments.
12. This allowed most cases to be dealt with in the common law courts. But in Bromley v Holland (1802) 7 Ves Jun 3; 32 ER 2 the plaintiff failed twice at common law for technical reasons and then commenced proceedings by way of bill in equity. The case ultimately came, on appeal, before Lord Eldon LC. His Lordship confirmed equity’s jurisdiction in such a case. He ultimately decreed that an account be taken of the purchase price of the annuity and interest on that purchase price at legal rates; that an account be taken of the payments made under the annuity; that the two figures be set off against each other; and that (on payment of the amount, if any, due to the annuity holder after set-off) the indenture of annuity and associated securities be delivered up for cancellation. Other instances of the equitable jurisdiction being exercised in such cases are referred to by Rich & Dixon JJ in Langman at 355-356.
13. Lord Eldon was at pains to point out (7 Ves Jun at 26; 32 ER at 11) that the instrument of annuity was void and therefore equity was not intervening by way of decreeing redemption pursuant to that instrument. Although his Lordship did not use the term, the case appears to be a clear instance of rescission being ordered in equity where a transaction was void ab initio, but adequate relief could not be obtained at law, and this is the way in which it was put by Rich & Dixon JJ in Langman at 352.
14. Another relevant body of authority is found in the law of vendor and purchaser. Usually once the conveyance had taken place it cannot be undone unless there is fraud. But in some cases equity was prepared to intervene and decree reconveyance. This equitable jurisdiction was described in the judgment of Dixon CJ & Fullagar J in Svanosio v McNamara (1956) 96 CLR 186 at 198:

[E]quitable relief after conveyance was granted in Bingham v. Bingham; Hitchcock v. Giddings; Cooper v. Phibbs, and Hart v. Swaine. In every case of this type, however, which has been found, the position simply was that the vendor had no title at all to the property sold. In Bingham v. Bingham the land was actually the property of the purchaser himself. In such cases a court of equity is not called upon to undo anything. The conveyance is simply devoid of legal effect, and, if it were not for the fact that adjustments and allowances will generally have to be made, one would think that the money paid could be recovered at law. Apart from this very special type of case, it is clearly established that equity will not undo a sale of land after conveyance unless there has been fraud or there is such a discrepancy between what has been sold and what has been conveyed that there is a total failure of consideration.

Their Honours clearly accepted that there was, and is, an equitable jurisdiction to grant rescission which extends beyond rescission of contracts which are voidable, and have been avoided, for fraud at common law. That jurisdiction can be exercised either where the vendor has no title at all, or where there has been a total, or virtually total, failure of consideration.
In this regard the reference to the transaction in the first type of case as being “devoid of legal effect” is telling. It suggests the same rationale for equitable intervention as had been identified in Alati v Kruger (which was decided the previous year), namely the inadequacy of legal remedies where the transaction is void at law. The explanation of the other type of case as involving “failure of consideration” likewise suggests a transaction which would usually attract a common law entitlement to restitution if only the payment of money were involved.
Closer to the present case are the nineteenth century ultra vires cases. As we have seen, the statutory misfeasance procedure applied where a claim was being made by a liquidator. But there are signs of ordinary equitable relief at work also.
In Joint Stock Discount Company vBrown (1869) LR 8 Eq 381, the directors of the Joint Stock Discount Company invested £30,000 of the company’s money in another company which conducted a banking business. The shares in the other company were issued to the company’s secretary and assistant manager to be held on its behalf, and the directors issued letters of indemnity from the company in favour of the directors and managers.
Proceedings were later brought in the name of the company to challenge the transaction. Those proceedings were brought, not by way of misfeasance summons, but by bill in equity. James VC held that the transaction was ultra vires and the directors were liable for the £30,000.
The company also sought delivery up and cancellation of the letters of indemnity in favour of the secretary and assistant manager. But James VC accepted an argument on behalf of the secretary and assistant manager that, although the letters were ultra vires the company, they should be allowed to retain the letters for the purpose of exercising personal rights against the directors who had signed them. He therefore declined to order delivery up and instead made a declaration that the letters were not binding on the Company (see at 406).
It is clear that, but for the possibility of enforcing the letters of indemnity against the directors personally, James VC would have decreed that they be delivered up and cancelled. And in Portsea Island Building Society v Barclay [1894] 3 Ch 86, Romer J made an order that an ultra vires memorandum of deposit be delivered up and cancelled. That was a post-judicature action heard in the Chancery Division; an appeal was dismissed by the Court of Appeal: [1895] 2 Ch 298.
The same pattern is seen in Australia. In Richard Brady Franks Ltd v Price (1937) 58 CLR 112, a pre-judicature equity case from New South Wales involving debentures allegedly executed by a company without authority, the relief sought (unsuccessfully) was a declaration that the debentures were void, an inquiry as to dealings with the debentures, and an account: see at 113. In post-judicature systems, it seems to be accepted as a matter of course that the equitable remedy of a declaration of invalidity is available: see for example Bank of New South Wales v Fiberi Pty Ltd (1992) 8 ACSR 790.
In Criterion Properties PLC v Stratford UK Properties LLC [2004] 1 WLR 1846, Lord Nicholls of Birkenhead said (at 1848 [4]):

If a company (A) enters into an agreement with B under which B acquires benefits from A, A’s ability to recover these benefits from B depends essentially on whether the agreement is binding on A. If the directors of A were acting for an improper purpose when they entered into the agreement, A’s ability to have the agreement set aside depends upon the application of familiar principles of agency and company law. If, applying these principles, the agreement is found to be valid and is therefore not set aside, questions of “knowing receipt” by B do not arise. So far as B is concerned there can be no question of A’s assets having been misapplied. B acquired the assets from A, the legal and beneficial owner of the assets, under a valid agreement made between him and A.

His Lordship continued:

If, however, the agreement is set aside, B will be accountable for any benefits he may have received from A under the agreement. A will have a proprietary claim, if B still has the assets. Additionally, and irrespective of whether B still has the assets in question, A will have a personal claim against B for unjust enrichment, subject always to a defence of change of position. B’s personal accountability will not be dependent upon proof of fault or “unconscionable” conduct on his part. B’s accountability, in this regard, will be “strict”.

There are two significant aspects of this passage for present purposes. First, Lord Nicholls was referring to a restitutionary liability independent of liability based on knowing receipt under the principles in Barnes v Addy. Second, his Lordship specifically stated that if property was transferred and was still in the recipient’s possession, it could be recovered.
The first proposition was accepted for the purposes of Australian law by a Full Court of the Federal Court (Jagot, Edelman & Moshinsky JJ) in Great Investments Ltd v Warner (2016) 243 FCR 516. In particular, at [54] the Full Court rejected a submission, based on the judgment of the High Court in Farah Constructions (230 CLR at [134]), that a restitutionary liability could not co-exist with the knowing receipt principles of Barnes v Addy.
The Full Court also stated that in the case of a transaction involving want of authority, equitable proprietary relief is available. At [65] the Full Court cited the following passage from the Restatement of the Law Third: Restitution and Unjust Enrichment (American Law Institute Publisher, 2011) at § 17:

A transfer by an agent, trustee, or other fiduciary outside the scope of the transferor’s authority, or otherwise in breach of the transferor’s duty to the principal or beneficiary, is subject to rescission and restitution. The transferee is liable in restitution to the principal or beneficiary as necessary to avoid unjust enrichment.

This passage specifically refers to relief by way of rescission. The Full Court also accepted the availability of rescission, although noting at [58] an issue about whether an order for rescission must be made before a recipient can be treated as a constructive trustee.

The Great Investments case concerned bonds transferred by a director of a company to a third party. The transfer was purportedly made pursuant to a power of attorney, but the director was held to have lacked authority. The transfer of the bonds had been registered, and orders had been made at first instance for the rectification of the register and the delivery up and reissue of the bond certificates. The Full Court regarded this as a form of equitable relief, and upheld it on the basis that pecuniary relief at law would be inadequate: see at [70]-[76].
In my view, therefore, both principle and authority support the proposition that equitable proprietary relief is available to rescind a completed, or partially completed, disposition of company property which is unauthorised and void at law. Of course, if the indoor management rule applies the disposition will be valid as against the recipient despite the lack of authority, but it was not suggested that Mr Akerman could rely on that rule in this case. Nor was any issue raised about indefeasibility of title (Real Property Act 1900, s 42).
I do not think that the Russell Gould case stands in the way of this conclusion. That case concerned the allegedly void disposition of money. As Barrett JA observed at [27], quoted at [91] above, the money was recoverable by means of an action for money had and received. The question of ordering rescission in aid of legal rights did not arise. And the present case does not involve any question of tracing.
For these reasons, I conclude that the Company is entitled to equitable restitutionary relief with respect to the transfer of its share of 9 Miller Street from Mr Akerman as recipient. In particular, the Company is entitled to recover a share of the income derived from the property since the transfer, and a share of its current value. This conclusion can be reached through the usual application of equity’s jurisdiction in aid of legal rights, and does not require some sort of reclassification of equitable rescissionary remedies as part of an overarching law of restitution: compare Birks, Unjust Enrichment (2^nd ed, 2005, Oxford University Press) at 299-300; the text books referred to at [85] above; and Great Investments at [68].
Claim for breach of director’s duties: Counsel for the Company submitted that in saying that questions of breach of fiduciary duty did not arise if the transfer of the Company’s share of 9 Miller Street was unauthorised, I had misunderstood the Company’s position, which had only been that it was logical to consider lack of authority first. Counsel further submitted that it was incorrect to say that there could be no breach of fiduciary duty in a transaction undertaken without authority, and that I ought in any event to have considered the pleaded allegations of breach of statutory duty.
Counsel for Mr Akerman submitted that these questions should not now be reconsidered. But if such reconsideration were permitted, counsel argued that on my findings there had been no breach of duty.
My conclusion that equitable restitutionary relief is available against Mr Akerman as a recipient means that the Company has suffered no loss as a result of his conduct as a director. It is unnecessary to consider questions of liability for breach of director’s duties. But I will make some observations so as to clarify what I said in my first judgment about the availability of such relief.
The first point to make is that I did not in my first judgment consider Mr Akerman’s potential liability for breach of his statutory duties as a director. Those duties included a duty to act with reasonable care and diligence (Corporations Act 2001, s 180(1)), a duty to act honestly (Corporations Act 2001, s 181(1)) and a duty not to make improper use of his position (Corporations Act 2001, s 182(1)). Breach of those duties gives rise to a statutory action for compensation (Corporations Act 2001, s 1317H). Mr Akerman might also have been liable (although this was not pleaded) for breach of the Company’s constitution as a “statutory contract” in accordance with the Corporations Act 2001, s 140(1).
For the purposes of the statutory duties, the question is whether the director’s conduct in taking the action satisfied the statutory standard and if not, whether compensable loss resulted. Whether or not the director’s action was authorised does not affect whether there has been a breach, although it might be a factor in the award of compensation. Indeed the High Court has specifically decided that acting without authority can itself be an improper use of a director’s position for the purposes of s 182(1): R v Byrnes (1995) 183 CLR 501 at 515-516.
In the present case, if the Company’s share of 9 Miller Street had been transferred to a third party and could not be recovered because of the indoor management rule, then the Company might have recovered statutory compensation, provided that there had been a contravention of s 180(1), s 181(1) or s 182(1). But there would still have been a debate about whether the measure of compensation would have reflected the value of the share of the property at the date of trial, or only at the date of transfer. Had a claim been made based on breach of the Company’s constitution as a “statutory contract”, there would also have been a debate about whether the value of the share at the date of trial could be recovered as contractual damages.
This leaves the possibility of a claim against Mr Akerman for equitable proprietary relief based on breach of his equitable duties as director which I put aside in my first judgment. It remains the case, as Barrett JA stated in Russell Gould, that equity is generally concerned with abuse of power rather than absence of power. And if a transaction is invalid and does not have any effect at law, then generally it cannot prejudice the company and no relief against it can be obtained: see Selangor [1968] 2 All ER at 1148I.
But on reflection, this does not necessarily exclude an equitable claim in the present case. Although the transfer was void, upon registration it had the effect of vesting the Company’s title in Mr Akerman. It may be that if Mr Akerman acted with fraudulent intent (as that is understood in equity), equitable relief would be available.
It may also be that, despite a disappearance of the doctrine of ultra vires, a director is still regarded, so far as custody of the Company’s assets are concerned, as a trustee, and is strictly liable for an application of company assets without authority. It would be necessary, however, to consider whether this proposition would be maintainable in this Court in the light of the Court of Appeal’s decision in Russell Gould, and, if so, whether equitable proprietary relief, as distinct from compensation assessed on ordinary principles, would be available.
I have not made final orders and in these circumstances I would usually be inclined to reconsider aspects of my first judgment to the extent that there are claims or contentions which have not been addressed. But given the complexity of the issues which arise in connection with a breach and given my conclusions that those issues are not determinative in the present case, I do not propose to take them any further.

Assessment of compensation

As already noted, counsel for the Company sought judgment on the claim concerning 9 Miller Street for a sum of money calculated on an equitable restitutionary basis. This was to include one-quarter of the net income derived from 9 Miller Street since the date of transfer, and one-quarter of the current value of the property (as determined by Mr Bird’s April 2018 valuation).
Counsel characterised the Company’s pecuniary entitlement as an award of equitable compensation. Counsel said repeatedly that the Company was not seeking an account, although counsel also indicated that the compensation would be “equal to what would be payable if there were an account”.
I am not sure that, strictly speaking, it is correct to see the Company as having a “freestanding” right to equitable compensation independently of an account. In Commonwealth Bank of Australia v Hatfield (2001) 53 NSWLR 614, the Court of Appeal explained that a claim by a mortgagor against a mortgagee for compensation for loss suffered as a result of a wrongful exercise of the mortgagee’s power of sale is properly understood as an item in the account between the mortgagee and the mortgagor: see at [35]-[48].
It should also be recognised that an account may involve items of property other than money. In the ordinary process involving an account by a trustee, the trustee is first required to enumerate the trust assets which were in his or her possession. Then the trustee must vouch for those assets by demonstrating that he or she still has custody of them. If the trustee is unable to vouch for an asset, the trust estate must be replenished. If the trust assets include a non-cash asset such as a parcel of shares, and the trustee is unable to vouch for those shares, then the value of the shares will be included in the account as an item of equitable compensation.
In these circumstances, I think that, despite counsel’s protestations, what the Company is really seeking is to have an account taken of the net benefits received by Mr Akerman as a result of the transfer of the Company’s share of 9 Miller Street to him, and to include the value of 9 Miller Street as at April 2018 as an item of equitable compensation in that account.
Initially I wondered whether it is appropriate in this case to put a value on the Company’s share of 9 Miller Street at all: the property is still owned by Mr Akerman and arguably the correct remedy would be simply to order it to be retransferred. But neither party invited me to do this. Rather than impose the costs of doing so on the parties, I am content to include in the account in favour of the Company a sum of money representing the value of the property.
Counsel for Mr Akerman submitted, however, that for the purposes of determining the value of the Company’s one-quarter share of 9 Miller Street, a discount should be made. This submission was based on Mr Bird’s evidence about the Company’s minority interest (see [138] above). Building on Mr Bird’s tentative range of ten per cent to twenty-five per cent, and taking into account Mr Bird’s evidence that his valuation figure for the property lay in a ten per cent range (see [18] above), counsel submitted that the appropriate overall discount was twenty-five per cent.
Counsel for Mr Akerman submitted that Mr Bird’s evidence about the need for a discount was “uncontested”. This is true in the sense that Mr Bird was the Company’s witness. Counsel for the Company was not in a position to cross-examine Mr Bird and was required to tender his report as a whole. Counsel for Mr Akerman understandably did not ask any questions about it. But it seems to me that ultimately the question of the proper approach is one for the Court.
Mr Bird’s argument as reflected in the passage from his report which I have set out at [17] above has some analogy with the discount which is often made in valuing a minority shareholding in a company. But I think that there is a significant difference. A minority shareholder in a company ordinarily has no right to have the company wound up and its value distributed to its shareholders. While the company continues, the value of a minority shareholder’s interest cannot be equated to a proportionate share of the value of the company as a whole.
The holder of a share of a piece of real property, on the other hand, can always seek an order for sale from the Court under the Conveyancing Act 1919 (NSW), s 66G. Such an order is available virtually as of right, and will result in the property being sold and the net proceeds being distributed amongst the owners in accordance with their respective shares.
In the present case, there is no reason to think that if the Company’s one-quarter share of 9 Miller Street were transferred back to it, the Company would not be able to use the s 66G procedure to recover a one-quarter share of the value of the property as a whole. In my view there is no occasion to discount the value of that share for the purposes of determining the quantum of compensation to which the Company is entitled.
There is however one further point to be considered. Had I been making orders in November 2018 it might have been appropriate simply to use the April 2018 valuation. As we have seen, when Mr Bird gave evidence he was unclear whether there had been any change in the state of the market, but no alternative evidence was put before the Court on behalf of Mr Akerman.
But more than two years have now passed since the valuation was done. In that time the Covid-19 crisis has had huge effects on financial markets. I have no way of knowing whether the April 2018 valuation still reflects a proper valuation of the property. It is clear that what the Company is actually entitled to is one-quarter of the value of the property at the time the account is taken and judgment is given. I think that justice demands that Mr Akerman have an opportunity, should he wish, to put further evidence before the Court on the current value of the property before the Court finalises the amount due.

Amount of credit from $2.2 million payment

As already mentioned, the $2.2 million payment made in April 2013 included payment for 5 and 7 Miller Street as well as for 9 Miller Street. The principal amount payable for 5 and 7 Miller Street was $377,056. Mr Akerman also included interest on that amount in the sum of $115,050.08. This amount was calculated at the rates specified in the one-page agreement of August 2007 (see [11] above).
There is no dispute that the principal amount due on the purchase of 5 and 7 Miller Street must be excluded from the credit to Mr Akerman for 9 Miller Street. Mr Akerman’s contention before me, however, was that the interest should not be. Counsel for Mr Akerman submitted that (contrary to the approach in fact adopted by Mr Akerman at the time) the obligation to pay interest only applied if the sale of the Company was deferred until the Company was liquidated. The Company was not liquidated in April 2013 and indeed is not in liquidation today.
Counsel’s argument was based on the wording of the one-page agreement of February 2007. That agreement provided for interest to be paid on the winding up of the Company. The obligation to pay interest was one which applied, as a matter of language, only if payment was made when the winding up took place. But this agreement was supplemented in a further one-page agreement dated 1 August 2007 (J1 [221]). The terms of that agreement gave Mr Akerman a discretion to pay the purchase price “at any time up to” the winding up of the Company. On the terms of that agreement the interest was undoubtedly payable.
The one-page February agreement was signed by Ms Dar as shareholder and I expressly found that it was sustained by the doctrine of unanimous assent. The August agreement, however, was not signed by Ms Dar; it was signed by Mr Akerman both as purchaser and purportedly on behalf of the Company.
At the hearing before me, Mr Akerman alleged that the written agreement reflected a prior oral agreement with Ms Dar. He also said that he sent her a copy in due course. Ms Dar denied both that there was any prior oral agreement and that she received a copy (J1 [222]-[223]). I was satisfied that there had been an agreement and did not think it necessary to decide whether the document had been sent to Ms Dar.
I think my finding that Ms Dar agreed to the document is enough for present purposes. The Company is constrained by my finding that the February 2007 agreement was enforceable against it as a matter of unanimous assent. Within that constraint, the Company can rely upon the variation in its favour constituted by the August 2007 agreement. In effect the Company is ratifying the August 2007 agreement for that purpose.
It follows in my view that the $115,050.08 included in the $2.2 million should be attributed to 5 and 7 Miller Street. The amount to be credited against Mr Akerman’s liability for 9 Miller Street is therefore $1,707,893.92.

Transfer of the Company’s shares of 5 and 7 Miller Street

Counsel for the Company contended in their written submissions that, in concluding that the Company’s claim with respect to 5 and 7 Miller Street failed, I had failed to deal, or failed to deal adequately, with points made by the Company in its submissions in April 2019. In particular, counsel argued that I had failed to deal adequately with the Company’s contention that any unanimous content was vitiated by a failure to make adequate disclosure.
I have already stated, in the context of the claim concerning 9 Miller Street, that in general I think it is better to correct an error or omission in reasoning, if that can be done conveniently, before proceeding to judgment. But the application to re-open the claim concerning 5 and 7 Miller Street falls on the other side of the line. I think that the arguments presented by counsel were addressed in the first judgment. Whether my coverage of them was adequate will be a matter to be determined if there is an appeal. But having decided the claim I do not think that reconsideration at this stage is appropriate.

Director’s fees and superannuation

The resolution which the Company successfully challenged was recorded in a minute signed by Mr Akerman in March 2013. Its text is set out at J1 [141]. It purported to authorise the Company to pay Mr Akerman $30,000 per year in director’s fees from 2001 onwards, together with statutory superannuation contributions referable to those fees.
In the financial year ended 30 June 2013, Mr Akerman caused the Company to pay him the sum of $180,000, and to make a contribution to his superannuation fund referable to that payment of $16,200. The payment apparently represented Mr Akerman’s purported entitlement under the March 2013 resolution for the 2013 financial year and the previous five financial years. No payment appears to have been made for the years going back before that, to 2001. The evidence did not reveal the precise date during the 2013 financial year when the payments were made. But the parties agreed to proceed on the basis that they were made on 24 April 2013.
In his evidence at the main hearing, Mr Akerman stated that he caused the Company to pay him a further $30,000 in the 2014 financial year pursuant to the purported resolution. At the hearing on 6 April, counsel for the Company sought to include this amount in the Company’s claim. Mr Akerman sensibly did not resist this, on the basis that the same argument in response, based on counter-restitution (see [167] below), would apply.
Although I have concluded that Mr Akerman was not entitled to act as sole director of the Company under its Articles of Association, he appears to continue to be in de facto control of the Company’s affairs. There is no evidence before me about whether he continued to pay director’s fees to himself after the 2014 financial year.
At the hearing on 6 April, counsel sought a declaration that the purported resolution was invalid. I think that I should make such a declaration. Then (subject of course to appeal) if any further payments have been made pursuant to the purported resolution, it should be possible to repay them without the need for any further litigation. Counsel for Mr Akerman did not resist this course.
So far as repayment of the fees and superannuation were concerned, counsel for the Company formulated the primary basis for the Company’s claim as being by way of a conventional action for restitution. A payment made without proper authority is a well-established instance where a common law restitutionary action, in the form of a claim for monies had and received, is available. This was not disputed by Mr Akerman.

But Goff & Jones states (at [31-01]):

A claimant who seeks restitution of an unjust enrichment must make counter-restitution of benefits received from the defendant in exchange.

…

… It is … a precondition for recovery that the amount recovered by a claimant should be reduced by the amount of the benefits he received from the defendant.

Mr Akerman’s defence to the Company’s claim for restitution of the director’s fees and associated superannuation contributions rested on this counter-restitution principle. The Company did not dispute the existence of the defence in principle. Mr Akerman’s contention was that he had a right of counter-restitution for the value of his services as a director which exceeded the amount of the payments made to him or for his benefit.
Goff & Jones goes on at [31-05] to discuss a theoretical question about counter-restitution. On one view there are two claims, one by the plaintiff against the defendant and the other a cross-claim against the plaintiff, and the two judgments are set off against each other. On the other view, there is only one claim, which is a claim for the net benefit conferred on one or other of the parties. Counsel referred to this debate but on the view I take it is not necessary to say anything about it.
In his affidavit of August 2017, which was read as part of the evidence of the main hearing, Mr Akerman said that following his mother’s death in September 2001 and discussions with the Company’s accountants he had a conversation with Ms Dar to the following effect:

Akerman: I am spending quite a lot of time on company matters such as dealing with the accountants regarding the loan accounts and tax issues, managing the company’s investments, dealing with everything relating to realising the assets in addition to the usual requirements of companies. I propose to pay a director’s fee to me for my time since 2001 and ongoing. I will speak with the accountants to determine a reasonable fee.

Dar: I have no problem with that.

Mr Akerman went on to state that between 2001 and “about 2009” he had “about three” further conversations with Ms Dar to the same effect. Ms Dar denied these conversations took place in her affidavit and adhered to her evidence in cross-examination.
In his affidavit Mr Akerman estimated that since September 2001 the work performed by him as a director of the Company had occupied about six hours per week on average. He said that this “included”: instructing the Company’s accountants; managing the Company’s “investment portfolio”; complying with ASIC and ATO requirements; managing the Company’s bank accounts, insurance, income tax and expenses; corporate activities such as attending meetings, maintaining minutes and records, and attending to payment of dividends; meetings with “partners and joint venturers” concerning jointly held assets (presumably a reference to the various properties identified at J1 [69]-[72]); instructing real estate agents concerning the sale and lease of the properties; “attendances regarding instructing the lawyers regarding various disputes and claims including those with shareholders and partners and joint venturers”; and “frequent and regular attendances upon shareholders to discuss various issues”. Mr Akerman was not asked about any of this in cross-examination.
Mr Guthrie, the Company’s then accountant (see J1 [26]), stated that he had a conversation with Mr Akerman in 2013 in which Mr Akerman asked what Mr Guthrie thought would be a director’s fee. In Mr Guthrie’s experience, family companies paid a range of director’s fees and he thought a fee of $30,000 was appropriate. Some of his clients paid anything from $10,000 to $100,000 a year for similarly sized companies. This evidence was not challenged in cross-examination.
Counsel for Mr Akerman argued that $30,000 per year for six hours a week equated to approximately $48 per hour. Counsel submitted by reference to Mr Guthrie’s evidence that this was a reasonable rate of remuneration, and indeed probably less than Mr Akerman should have received. Accordingly, counsel submitted, Mr Akerman’s entitlement to counter-restitution eliminated the Company’s claim.
Neither counsel for Mr Akerman nor counsel for the Company referred to any authority on Mr Akerman’s right to counter-restitution. But the well-known case of Craven-Ellis v Canons Ltd [1936] 2 KB 403 is clearly in point.
The plaintiff in that case, Mr Craven-Ellis, was a real estate agent. Sir Arthur du Cros and his son Phillip du Cros established the defendant company to develop a substantial parcel of land. They recruited the plaintiff to be the company’s managing director. The company and the plaintiff executed a deed appointing him as managing director and providing for him to be remunerated for his services. None of the directors of the company, however, obtained the share qualification which they were required to have under the company’s articles of association.
As a result, the plaintiff’s appointment was invalid and he had no contractual right to remuneration. Nevertheless the English Court of Appeal held that he was entitled to recover reasonable remuneration by way of quantum meruit.
The basis for the decision is controversial. A restitutionary entitlement to reasonable remuneration for services requested, where it is understood that the services are not being provided for free but there is no binding agreement to fix the remuneration, is well recognised: Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635. But in Craven-Ellis, the company had no directors and there was no-one with authority to request the provision of the plaintiff’s services.
The decision has been explained on two bases: see Mason & Carter at [1027]. One is that a request was effectively made on the company’s behalf despite the lack of a board of directors (presumably by Sir Arthur du Cros and Mr Phillip du Cros as the company’s majority shareholders and effective controllers). The other is that Mr Craven-Ellis’ services were essential to the conduct of the company’s business, and the case was one where there was an entitlement to restitution, even without a request, on the ground of “incontrovertible benefit”.
I do not think the first explanation can be applied in the present case. Even if I were to accept that Ms Dar agreed in principle for Mr Akerman to pay director’s fees, on Mr Akerman’s account he was to consult the Company’s accountants, and he gave no evidence of having done so following the conversations in question. It may be accepted Mr Akerman did eventually consult Mr Guthrie in April 2013, but by that time he had been in dispute with Ms Dar about the Company for more than three years.
In his dispute with Ms Dar generally, and in passing the purported resolution of April 2013 in particular, Mr Akerman was relying on his belief (an incorrect belief, as it turns out) that as the only remaining director of the company he was entitled to act on its behalf without reference to her. Had Mr Akerman done what was required under the articles and put the resolution to the shareholders of the Company in general meeting, I have no doubt that it would have failed. I think it is impossible to see the purported resolution as embodying some sort of request by the Company.
What of the second explanation of Craven-Ellis? In considering that explanation, it is important to note that the work done by Mr Craven-Ellis was highly specialised. He appears to have given up his work as a real estate agent to take on the position.
The present case is different. In referring to some of the “services”, such as meetings with, and reporting to “partners” and “shareholders”, Mr Akerman seems to have been referring to informal family discussions with his sister and his uncle. In referring to the instruction of lawyers, he would appear to have been referring to “instructing” himself. Furthermore, as explained below, it is far from clear whether the Company derived any benefit from these “instructions”. In any event, all of the services seem to have involved fairly routine company administration. Mr Akerman did not claim that he had given up any professional work in order to carry them out.
I do not doubt that there may be closely held family companies which pay substantial fees to their directors for doing the sort of work done by Mr Akerman in this case. But equally there will be other companies where such fees are not paid and the directors manage the company out of a sense of family obligation or in the expectation of reaping the benefit as shareholders.
To my mind this shows that in a closely held family company of the present type the payment of director’s fees is very much a matter for those whose company it is. This only underscores the importance in this case of the requirement for approval by the Company’s shareholders, which was not obtained. In my view it would be going much too far to say that there was a need to pay substantial fees to Mr Akerman, such that payment of fees at the rates claimed amounted to an “incontrovertible benefit”.
There is a further, more fundamental, problem with Mr Akerman’s counter-restitutionary claim. If there is a contract between the parties which provides, expressly or impliedly, that there will be no remuneration for services provided in certain circumstances, then that allocation of risk must be respected and a restitutionary claim is not available in the circumstances covered by the contract: Smits v Roach (2004) 60 NSWLR 711 at [82]-[83]; see also Trimis v Mina [1999] NSWCA 140 at [54]; Mason & Carter at [1228].
In Craven-Ellis, the plaintiff never became a director of the company and his service as managing director was never governed by a binding contract. But in the present case Mr Akerman was validly appointed as a director; he simply lacked authority as a single director, after his mother’s death, to operate the Company as he thought he could.
As a director, Mr Akerman was bound by the statutory contract to abide by the Company’s constitution. It seems to me that it was implicit in that contract that if Mr Akerman was to be remunerated for his services as director, that had to be done pursuant to the procedure laid down in the articles, namely, by resolution of the shareholders in general meeting. Furthermore, Mr Akerman was obliged as a director not to profit from his directorship except to the extent permitted by the articles. In those circumstances there is no room for a quantum meruit or some sort of allowance in equity: Guinness PLC v Saunders [1990] 2 AC 663, especially at 693C-E.
For these reasons, I consider that Mr Akerman’s claim of counter-restitution fails. The full amount of the director’s fees and superannuation payments should be allowed against him.

Payment of legal fees

The payments of legal fees which are the subject of the claim in these proceedings total $84,573.50. This is made up of $69,300 paid to Mr Akerman’s firm, Sowden Akerman, and $15,273.50 paid to Mr Cashion SC, who had been retained by Mr Akerman under his firm’s auspices. The payment to Sowden Akerman was made on 24 April 2013: (see J1 [139]). The payment to Mr Cashion was apparently made in the 2012 financial year but the parties agreed that it should be taken to have been made on the same date.
The only evidence before me about the retainer of Sowden Akerman is Mr Akerman’s memorandum of fees dated 24 April 2013. It recorded Mr Akerman’s total time engaged at 157.5 hours. The charge-out rate was $400 per hour.
The fee note from Sowden Akerman contains a narrative consisting of three paragraphs. Attached to the fee note (although not mentioned in J1 [135]) is an itemised list of work for which payment was claimed. The work in question consisted of “telephone calls and attendances” concerning three matters.
The first was the winding up of the Company and the tax consequences thereof. The fee note covered Mr Akerman’s discussions with an accountant, Mr Brown, in July 2007. It also covered his discussions with Ms Gosper in November/December 2009 (see J1 [125]).
The second matter was the sale of the Kingsford property. The work in question began with a letter from ADP in May 2010. The work for which Mr Akerman claimed payment continued on at least until December 2012 (the Kingsford property was sold in 2015: J1 [5]).
The third matter arose out of correspondence with Ms Dar’s solicitor, Mr Stack, which began in December 2011: see J1 [138]. Mr Stack wrote to Mr Akerman asking questions and seeking information (including any retainer agreement with Sowden Akerman) about the transfer of the Company’s shares in the Miller Street properties. He asserted that Ms Dar had not consented to the transfers, and noted that Ms Dar had not received any proceeds (at the time, of course, Mr Akerman had not yet paid anything to the Company). Mr Stack also sought financial information about the Company’s dealings going back to 2001 and information concerning the sale, or prospective sale in the case of the Kingsford property, of its other property holdings.
It was this letter which resulted in Mr Cashion SC being briefed. The work for which Mr Cashion billed was performed between December 2011 and March 2012. The main response to Mr Stack came by letter from Mr Akerman in March 2012, and correspondence continued thereafter. The work for which Mr Akerman claimed payment in the fee note continued on into 2013.
As with the Company’s claim against Mr Akerman to recover the director’s fees, his answer was based on counter-restitution. I understood the argument to be that the fees claimed by Mr Akerman under the auspices of Sowden Akerman, and the liability to pay Mr Cashion’s fees, represented reasonable charges for proper professional work on behalf of the Company, and again, therefore, there was nothing owing.
A preliminary difficulty with this argument, so far as it concerns the Sowden Akerman fees, is that the evidence does not establish that, at the time the work was done, Mr Akerman understood that he would be paid for it. Nothing even purporting to be a retainer agreement between the Company and Mr Akerman was in evidence. The fee note does not carry a matter number. It has all the hallmarks of having been prepared after the event to reduce the amount Mr Akerman was paying for the Company’s share of 9 Miller Street.
Even if this problem could be overcome, there was no request on behalf of the Company to undertake the work. Mr Akerman did not suggest that he ever sought Ms Dar’s consent to charge professional fees for his work on the insolvency issue, or the sale of the Kingsford property, or his work on responding to her solicitor’s correspondence, or the retainer of Mr Cashion SC. Most of the work in question came after Mr Akerman had fallen out with Ms Dar, when consent from her to the Company incurring such liabilities would have been out of the question.
There are also multiple problems with contending that the fees represented an “incontrovertible benefit” to the Company. It is convenient to deal first with the parts of Mr Akerman’s fees concerning the sale of the Kingsford property. There is no doubt that the Kingsford property was sold and to that extent the work done by Mr Akerman may have been to its benefit. But there is nothing to indicate that anything Mr Akerman did required any expertise as a solicitor. The evidence contains a number of items of correspondence written by Mr Akerman to the Company’s accountants. But the fact that such letters were written on a solicitor’s letterhead does not mean that they necessarily involved any legal work. So far as they concerned the Kingsford property, the “services” claimed by Mr Akerman appear to have been nothing more than the undertaking of the administrative work that he was doing as a director.
The same point applies to the fees for dealing with the Company’s accountants concerning its winding up. But there is an additional point. The winding up never took place. The Company in fact never received any benefit from whatever Mr Akerman did.
I also consider that there is a fundamental difficulty with the claim so far as it concerns the costs of responding to the correspondence from Ms Dar. Again it is not clear that it was necessary for Mr Akerman to retain lawyers rather than just responding himself. But if Mr Akerman thought it necessary to respond through lawyers, and with Mr Cashion’s assistance, there was no need to do so under the auspices of the Company.
Mr Akerman purported to deal with Mr Stack as the solicitor for the Company. Mr Stack did raise a question about there being a conflict of interest in Mr Akerman acting as the solicitor for the Company when it was Mr Akerman’s own conduct which was in issue. It did not apparently occur to him that Mr Akerman lacked power to appoint himself as the Company’s solicitor. But the question of “incontrovertible benefit” must be assessed objectively.
In my view, the main issues raised by Mr Stack on Ms Dar’s behalf concerned Mr Akerman’s actions on behalf of (or purportedly on behalf of) the Company. They did not concern the relationship between the Company and Ms Dar as shareholder. Mr Akerman chose to interpret the challenge to his conduct as an attack on the Company. But this reaction was only a result of his fallacious idea that he was the sole director and represented the Company for all purposes.
For these reasons, I reject Mr Akerman’s claim for counter-restitution. The claim against him to recover the unauthorised legal fees should be allowed in full.

Interest

It was agreed between the parties that the money judgment in favour of the Company should include an allowance for interest on the amount outstanding from time to time after February 2006 (when Mr Akerman started appropriating the income from 9 Miller Street to himself: see [12] above). The rate of interest was, however, disputed.
Counsel for the Company contended for three alternatives, which, in order of preference, were:

compound interest at CBA monthly term deposit rates;
simple interest at statutory rates;
simple interest at CBA monthly term deposit rates.

The significance of CBA monthly term deposit rates is that at the relevant time the Company in fact invested surplus monies on monthly term deposit with the CBA.

Counsel for Mr Akerman argued for the opposite position: namely that the Court should award simple interest, either at CBA monthly term deposit rates (counsel’s preferred position) or at statutory rates.
It will be remembered that there was no dispute that Mr Akerman would have to account for the Company’s share of the net income from 9 Miller Street from February 2006 up to the transfer in March 2010. That would carry interest in favour of the Company. So too would Mr Akerman’s liability to account for the Company’s share of the net income from the property from March 2010 down to judgment, in accordance with the conclusions I have reached above. But as a consequence of my conclusion that the value of the quarter share in 9 Miller Street is to be brought to account as at the date of judgment, that component of the judgment will attract no interest. Because of the $1.7 million from Mr Akerman’s payment in April 2013, from then until judgment is given the running balance on which interest is to be calculated will actually be in favour of Mr Akerman. The result will be that the interest allowance overall will be a credit in his favour.
The result is that the parties’ respective positions on the interest rate issue are actually contrary to their own pecuniary interests. But when I pointed this out in a memorandum to counsel following the hearing, both parties indicated that they desired the interest rate to be determined on the merits of the positions taken by them in argument.
Statutory pre-judgment interest is governed by the Civil Procedure Act 1995 (NSW), s 100(1). That enactment provides:

Interest up to judgment

In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit—
(a) on the whole or any part of the money, and
(b) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect.”
1. A judgment in a common law action for restitution is a money judgment and so is an award of equitable compensation. No interest can however be awarded under s 100 until a cause of action has “accrued”. But, as Ward J (as her Honour then was) demonstrated in Lahoud v Lahoud [2010] NSWSC 1297 at [117]-[149], the course of decision in this State establishes that there is a non-statutory or “free-standing” general law right to interest on amounts repayable by way of restitution. The key authority is Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600, which is binding in this Court despite the observations of McHugh & Gummow JJ in Commonwealth of Australia v SCI Operations Pty Ltd (1998) 192 CLR 285 at 316-317 casting doubt on the existence of such a “free-standing” right.
2. I interpolate that in Re Iris McLaren (No 2) [2019] NSWSC 1894 I had to consider the award of interest on a payment made by a litigant in satisfaction of a judgment that was later set aside. I thought that interest ran under s 100 from the date the payment had been made. In doing so I overlooked what appears in Mason & Carter at [2723]. The authors argue that, for limitation purposes, a restitutionary cause of action for repayment of monies paid in satisfaction of a judgment does not accrue until the judgment has been set aside. If the date of accrual for the purpose of s 100 is the same as the date of accrual for limitation purposes, then I was wrong in the view that s 100 allowed the award of interest between the date on which the judgment was satisfied and the date on which it was set aside, and the award of interest for that period should have been based on the “free-standing” right.
3. No similar problem arises in the present case. A restitutionary cause of action for repayment of monies paid by mistake accrues, for limitation purposes, when the monies are received: Torrens Aloha Pty Ltd v Citibank NA (1997) 72 FCR 581 at 596; see also Coshott v Lenin [2007] NSWCA 153 at [17], where a cause of action for goods and services provided at the defendant’s request accrued, for limitation purposes, when the goods and services were provided. By parity of reasoning, a cause of action for restitution of monies paid without authority should accrue, for limitation purposes, when the monies are received. On any view, therefore, the Company has an entitlement to pre-judgment interest at statutory rates.
4. Counsel for the Company, however, argued, consistently with the position it took elsewhere, that equitable relief is available and this should extend to the award of interest on equitable principles. Those principles were said to require the award of compound interest.
5. I have already concluded that equitable relief in the nature of rescission is available in the present case. There is thus an established basis for the award of interest on equitable principles in these proceedings. But that does not necessarily mean that interest should be awarded on a compound basis.
6. In President of the India v La Pintada Compania Navigacion SA [1985] AC 104, Lord Brandon of Oakbrook, speaking for the House of Lords, said (at 116):

The Chancery courts, again differing from the common law courts, had regularly awarded simple interest as ancillary relief in respect of equitable remedies, such as specific performance, rescission and the taking of an account. Chancery courts had further regularly awarded interest, including not only simple interest but also compound interest, when they thought that justice so demanded, that is to say in cases where money had been obtained and retained by fraud, or where it had been withheld or misapplied by a trustee or anyone else in a fiduciary position.

Lord Brandon’s statement of the law, and in particular the proposition that compound interest is only awarded in cases of fraud or breach of trust, was applied by the majority of the House of Lords in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 to deny an award of compound interest in a case of restitution for an ultra vires payment. That decision was in turn treated as authoritative by McHugh & Gummow JJ in SCI Operations.
In my view these statements of principle, while not strictly speaking binding, have the highest persuasive value. I do not think they are affected by the decision in Heydon v NRMA. No question of compound interest arose in that case, and the “free-standing” interest awarded was at statutory rates.
Even if compound interest were available in a case of this type, whether to award it would be a matter of discretion. It is notable that in Alati v Kruger, interest was awarded at the “mercantile” rate in equity but on a simple, rather than compounding, basis: see the order at 94 CLR at 230; for a discussion of the “mercantile” rate: see Heydon & Leeming, Jacobs’ Law of Trusts in Australia (8^th ed, 2016, LexisNexis Butterworths) at [22-07].
There is another reason why I consider that the award of compound interest at the CBA monthly bill rate would be inappropriate. Had Mr Akerman accounted to the Company for a quarter share of the proceeds of the net income of 9 Miller Street, and had the Company placed that money on deposit, then the interest received would have been taxable. Any award of interest I make in this case will be taxable, but if I made an award of compound interest without taking account of the taxation liability before compounding it, then the Company would be overcompensated.
For these reasons, I reject the Company’s claim to interest at a compounding CBA rate. But nor do I think that it would be realistic to award simple interest at the CBA deposit rate. No doubt the Company did keep its surplus monies on deposit. But account must be taken of the fact that the Company has in effect been paralysed by the present litigation. Since it completed the sale of its property holdings in 2015 the Company has undertaken no business activity. Had Mr Akerman accounted to the Company for the full value of its share of 9 Miller Street, as I have found he was always obliged to do, then the probability is that the Company would have been wound up, and its monies would have been released for use for other purposes.
In these circumstances I think that the appropriate interest rate is the statutory rate, which has the merit of being standardised: Heydon v NRMA Ltd (No 2) at [30], and which I consider to be equivalent to the equitable “mercantile” rate: Hagan v Waterhouse (No 2) (1991) 34 NSWLR 308 at 392C. I therefore conclude that interest should be calculated at that rate on a simple interest basis.

Conclusions and orders

I have concluded that:

the Company is entitled to recover from Mr Akerman the current value of its one-quarter share of 9 Miller Street, together with one-quarter of the net income from that property from March 2006 to date;
the value of the Company’s one-quarter share of 9 Miller Street is to be assessed as one-quarter of the value of the property as a whole without any discount;
the credit to which Mr Akerman is entitled as a result of his payment to the Company in April 2013 is $1,707,893.92;
the Company is also entitled to recover from Mr Akerman, in full, $226,200 paid by way of director’s fees and superannuation contributions in the 2013 and 2014 financial years pursuant to the resolution by Mr Akerman to that effect, purportedly on the Company’s behalf, in March 2013, and to a declaration that that purported resolution was void and of no legal effect;
the Company is also entitled to recover from Mr Akerman, in full, $84,573.50 paid without authority to Mr Akerman and Mr Cashion SC purportedly for work done for the Company;
the Company’s entitlements, and the credit to which Mr Akerman is entitled, will carry simple interest on a running account basis, calculated at statutory rates.
1. It will be necessary for Mr Akerman to decide whether he wishes to obtain updated valuation evidence for 9 Miller Street. Either Mr Akerman or the Company may also wish to update the figures for the net income from 9 Miller Street. Once these issues are resolved, it will be necessary to calculate the amount of the judgment against Mr Akerman, including interest, down to the date of judgment.
2. Should the parties wish, I will hear argument on the costs issues at the same time as the account is being finalised. Otherwise I will deal with that afterwards.
3. I will therefore stand over the proceedings for a short period of time to allow the parties to consider how the remaining steps should be dealt with.
4. The order of the Court is:
Adjourn the proceedings for further directions in seven days’ time, or at such other time as may be arranged with my Associate.

**********

Decision last updated: 30 July 2020

Medium Neutral Citation:	Akierman Holdings Pty Ltd v Akerman (No 2) [2020] NSWSC 970
Hearing dates:	6, 9 April 2020; further written submissions ending 15 June 2020
Date of orders:	30 July 2020
Decision date:	30 July 2020
Jurisdiction:	Equity - Corporations List
Before:	Parker J
Decision:	See [223]-[227]
Catchwords:	CORPORATIONS — directors and officers —unauthorised transfer by director of company’s share of real property to himself – liability of director as trustee – liability as recipient to make restitution – liability for breach of director’s duties RESTITUTION – ineffective transaction – transfer of company’s share of real property – void for want of authority but registered – whether company entitled to share of increase in value in property and share of net income from property since date of transfer – equitable proprietary relief EQUITY – jurisdiction in aid of rights at law – transfer of company’s share of real property – void for want of authority but registered – rescission – account of value of property and income derived from it – interest CORPORATIONS – director and officers – invalid resolution by director to pay director’s fees to himself – liability as recipient to make restitution – whether director entitled to counter-restitution by way of quantum meruit – whether incontrovertible benefit CORPORATIONS – director and officers –unauthorised payment by director to himself as solicitor – liability as recipient to make restitution – whether director-solicitor entitled to counter-restitution by way of quantum meruit – whether incontrovertible benefit
Legislation Cited:	Civil Procedure Act 1995 (NSW), s 100(1) Companies (Winding up) Act 1890, 53 & 54 Vict, c 63, s 10 Companies Act 1936 (NSW), ss 148, 308 Conveyancing Act 1919 (NSW), s 66G Corporation Act 2001 (Cth), ss 140(1) 180(1), 181(1), 182(1), 237, 260A, 1317H Grants of Life Annuity Act 1776, 17 Geo 3, c 26 Real Property Act 1900 (NSW), ss 42, 118
Cases Cited:	Alati v Kruger (1955) 94 CLR 216 Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 Bank of New South Wales v Fiberi Pty Ltd (1992) 8 ACSR 790 Barnes v Addy (1874) LR 9 Ch App 244 Belmont Finance Corporation v Williams Furniture Limited (No 2) [1980] 1 ALL ER 393 Bromley v Holland (1802) 7 Ves Jun 3; 32 ER 2 Cassegrain v Gerard Cassegrain & Co Pty Ltd (2014) 254 CLR 425 Commonwealth Bank of Australia v Hatfield (2001) 53 NSWLR 614 Commonwealth of Australia v SCI Operation Pty Ltd (1998) 192 CLR 285 Coshott v Lennin [2007] NSWCA 153 Craven-Ellis v Canons Ltd [1936] 2 KB 40 Criterion Properties PLC v Stratford UK Properties LLC [2004] 1 WLR 1846 Cullerne v The London and Suburban General Permanent Building Society (1890) 25 QBD 485 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 Feret v Hill (1854) 15 CB 206; 139 ER 400 Great Investments Ltd v Warner (2016) 243 FCR 516 Guinness PLC v Saunders [1990] 2 AC 663 Hagan v Waterhouse (No 2) (1991) 34 NSWLR 308 Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600 Kalls Enterprises Pty Ltd v Baloglow [2007] NSWCA 191 Lahoud v Lahoud [2010] NSWSC 1297 Langman v Handover (1929) 43 CLR 334 Lumbers v W Cook Builders Pty Ltd (2008) 232 CLR 635 Mulkana Corporation Ltd v Bank of New South Wales (1983) 8 ACLR 278 O’Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Portsea Island Building Society v Barclay [1894] 3 Ch 8 Portsea Island Building Society v Barclay [1895] 2 Ch 298 President of the India v La PintadaCompaniaNavigacion SA [1985] AC 104 R v Byrnes (1995) 183 CLR 501 Re Canadian Land Reclaiming and Colonizing Company (1880) 14 Ch D 660 Re Dawson [1966] 2 NSWR 211 Re Ferguson (1969) 14 FLR 311 Re International Vending Machines Pty Ltd [1962] NSWR 1408 Re Iris McLaren (No 2) [2019] NSWSC 1894 Re Lands Allotment Company [1894] 1 Ch 616 Re Sharpe [1892] 1 Ch 154 Richard Brady Franks Ltd v Price (1937) 58 CLR 112 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 Russell Gould Pty Ltd v Ramangkura (2014) 87 NSWLR 552 Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 ALL ER 1073 Smits v Roach (2004) 60 NSWLR 711 Steen v Law, Liquidator of International Vending Machines Pty Ltd (1963) 63 SR (NSW) 511; [1964] AC 287 Svanosio v McNamara (1956) 96 CLR 186 Torrens Aloha Pty Ltd v Citibank Na (1997) 72 FCR 581 Trimis v Mina [1999] NSWCA 140 WestdeutscheLandesbankGirozentrale v Islington London Borough Council [1996] AC 669
Texts Cited:	Austin, R P, H A J Ford and I M Ramsay, Company Directors Principles of law & Corporate Governance (1st ed, 2005, LexisNexis Butterworths) Birks, P, Unjust Enrichment (2nd ed, 2005, Oxford University Press) Campbell, S, ‘Usury and Annuities of the Eighteenth Century’ (1928) 44 LQR 473 Edelman, J and E Bant, Unjust Enrichment in Australia (2nd ed, 2016, Oxford: Hart Publishing) Heydon, J D and M J Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) Heydon, J D, M J Leeming and P G Turner, Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th ed, 2015, LexisNexis Butterworths) Mason, K, J W Carter and G J Tolhurst, Mason & Carter’s Restitution Law in Australia (3rd ed, 2016, LexisNexis Butterworths) Mitchell, C, P Mitchell and S Watterson, Goff & Jones The Law of Unjust Enrichment (9th ed, 2016, Sweet & Maxwell) O’Sullivan, D, S Elliott and R Zakrzewski, The Law of Rescission (2nd ed, 2014, Oxford) Restatement of the Law Third: Restitution and Unjust Enrichment (American Law Institute Publisher, 2011)
Category:	Consequential orders (other than Costs)
Parties:	Akierman Holdings Pty Ltd (Plaintiff) Steven Akerman (Defendant) Cross-claim Steven Akerman (Cross-claimant) Akierman Holdings Pty Ltd (First Cross-defendant) Emilia Marr (Second Cross-defendant) Gillian Dar (Third Cross-defendant)
Representation:	Counsel: G Curtin SC/E Cowpe (Plaintiff/ First and Third Cross-Defendants) M Condon/N Bentley (Defendant/Cross-Claimant) Solicitors: Harris Freidman Lawyers (Plaintiff/First and Third Cross-Defendants) Holman Webb (Defendant/Cross-claimant)
File Number(s):	2015/323943
Publication restriction:	Nil