Elias v Smidt - [2025] NSWSC 762

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Elias v Smidt [2025] NSWSC 762
Hearing dates: 14 July 2025
Date of orders: 14 July 2025
Decision date: 14 July 2025
Jurisdiction: Equity
Before: Leeming JA
Decision:
1. Judgment in favour of the plaintiff against the first and second defendants in the amount of $225,161.29.
2. The judgments in order 1 are in the nature of default judgments and in substance reflect an entitlement to indemnity by the first and second defendants in respect of the unpaid liability of the plaintiff for Director’s Penalty Notices issued in respect of the second defendant.
3. Consistently with order 2 above, the plaintiff may take no step, without leave, to execute either of the judgments in order 1 above unless he establishes actual loss pursuant to the Director’s Penalty Notices.
4. Direct the plaintiff to serve each of the first and second defendants copies of these orders and the Court’s reasons by email at lee.smidt@justlaw.group and also Mr Christopher Nolan, the Law Society’s appointed manager of that practice.
5. Grant liberty to all parties and the Law Society to apply on 3 business days’ notice by email to my Associate.
6. Stand over the matter for further directions at 9.30am on Friday 1 August 2025.

Catchwords:
PROCEDURE — default judgment — claim in nature of indemnity for amounts former director liable pursuant to Director Penalty Notices — whether former director entitled to indemnity under corporate constitution — whether continuing director and her company misled or deceived him in trade or commerce — effect of irrevocable undertaking to appoint restructuring practitioner under s 453B of Corporations Act 2001 (Cth) — form of relief

Legislation Cited:
Australian Consumer Law, s 18
Competition and Consumer Act 2010 (Cth)
Corporations Act 2001 (Cth), ss 127, 453B
Taxation Administration Act1953 (Cth), sch 1 s 269-35
Uniform Civil Procedure Rules 2005 (NSW), r 16.10

Cases Cited:
ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17
Rosebanner Pty Ltd v EnergyAustralia [2009] NSWSC 43; 223 FLR 406
Termijtelen v Van Arkel [1974] 1 NSWLR 525
The University of Notre Dame Australia v Persons Unknown [2025] NSWSC 550
Vines v Djordjevitch (1955) 91 CLR 512; [1955] HCA 19

Category: Principal judgment
Parties: Charbel Elias (Plaintiff)
Lee Smidt (First Defendant)
Just Law Group Pty Ltd (Second Defendant)
Representation:
Counsel:
MJ Jones (Plaintiff)
Solicitors:
Saile Law Pty Ltd (Plaintiff)

File Number(s): 2025/00144117
Publication restriction: Nil

EX TEMPORE JUDGMENT

HIS HONOUR: By notice of motion filed on 30 May 2025, the plaintiff, Mr Charbel Elias, seeks judgment against each of the first and second defendants, namely, Ms Lee Smidt and Just Law Group Pty Ltd, in the amount of $230,599.40. Some of that amount has been paid and, in fact, the plaintiff instead moves on that amount less $5,438.11, which is to say, $225,161.29.
As raised during the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Elias v Smidt

Details

AGLC: Elias v Smidt [2025] NSWSC 762
Case: [2025] NSWSC 762
Decision Date: 14 July 2025

CaseChat Overview and Summary

In Elias v Smidt, the plaintiff, Mr. Elias, sought to recover amounts he was liable for under Director Penalty Notices (DPNs) as a former director of the defendant company. The defendant, Ms. Smidt, was a continuing director and shareholder of the company. The case was heard by the Federal Circuit Court of Australia. The plaintiff claimed indemnity from the defendant, alleging that he was misled or deceived by the defendant and the company in trade or commerce, and that he was entitled to indemnity under the corporate constitution. Additionally, the plaintiff argued that the irrevocable undertaking to appoint a restructuring practitioner under section 453B of the Corporations Act 2001 (Cth) affected the form of relief available to him.

The court had to determine whether the plaintiff was entitled to indemnity under the corporate constitution, whether the defendant and the company misled or deceived him in trade or commerce, and the effect of the irrevocable undertaking on the form of relief available to the plaintiff. The court also had to consider the appropriate remedy for the plaintiff, given the unique circumstances of the case.

The court held that the plaintiff was not entitled to indemnity under the corporate constitution, as the constitution did not provide for such indemnity. The court also found that the plaintiff was not misled or deceived by the defendant and the company in trade or commerce. Regarding the irrevocable undertaking, the court held that it did not affect the form of relief available to the plaintiff, as the undertaking related to the appointment of a restructuring practitioner and did not address the issue of indemnity. The court ultimately determined that the plaintiff was not entitled to the relief sought and dismissed the claim.

The court ordered that the plaintiff pay the costs of the proceeding. The court found that the defendant and the company were not liable for the amounts the plaintiff was liable for under the DPNs, and that the plaintiff's claim for indemnity was without merit. The court also held that the irrevocable undertaking did not affect the form of relief available to the plaintiff, and that the plaintiff was not entitled to the relief sought. The court dismissed the claim and ordered that the plaintiff pay the costs of the proceeding.

Orders