Gunderlong Mackay Pty Ltd v Simpkin - [2024] QSC 194

SUPREME COURT OF QUEENSLAND

CITATION:

Gunderlong Mackay Pty Ltd & Ors v Simpkin & Ors [2024] QSC 194

PARTIES:

GUNDERLONG MACKAY PTY LTD
ACN 010 210 456

(first plaintiff)

MACKAY CAPITAL PTY LTD ACN 659 710 826 AS TRUSTEE FOR THE SIMPKIN FAMILY TRUST

(second plaintiff)

FAYE EMILY SIMPKIN

(third plaintiff)

v

CRAIG NORMAN SIMPKIN

(first defendant)

CLP GROUP AUSTRALIA PTY LTD ACN 632 782 131
(second defendant)

FILE NO/S:

10018 of 2022

DIVISION:

Trial Division

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Mackay

DELIVERED ON:

27 August 2024

DELIVERED AT:

Rockhampton

HEARING DATE:

8, 9, 10, 11 July 2024
Submissions 24 July 2024

JUDGE:

Crow J

ORDER:

1. I will hear from the parties as to costs and the form of the orders to be made in consequence of these reasons.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATION – where the first plaintiff had commenced discussion regarding the splitting of its’ business operations amongst family members – whether a concluded agreement was made

CORPORATIONS – MANAGEMENT AND ADMINISTRATION – DUTIES AND LIABILITIES OF OFFICERS OF CORPORATION – LOANS TO DIRECTORS – where the first defendant was a director of the first plaintiff – where the first defendant purchased a boat with funds from the first plaintiff – whether the boat is an asset of the first plaintiff or an asset of the first defendant with the purchase funds to be construed as a director loan

CORPORATIONS – MANAGEMENT AND ADMINISTRATION – DUTIES AND LIABILITIES OF OFFICERS OF CORPORATION – FIDUCIARY AND RELATED STATUTORY DUTIES – REMEDIES AND PENALTIES FOR BREACH OF DUTY – COMPENSATION – where the plaintiffs allege that actions taken by the first defendant constitute breaches of the first defendant’s fiduciary and statutory duties – where first defendant while acting as a director for the first plaintiff issued a loan to the second defendant of which he was also a director – where the first defendant issued an invoice under the name of the second defendant for work completed by the first plaintiff – whether the defendant improperly used his position to gain an advantage for himself

BAILMENT – IN GENERAL – where the first plaintiffs allege the first defendant to have possession or to have sold various assets alleged to be owned by the plaintiffs – whether the first defendant had possession of the various assets – whether the plaintiffs or defendants have rights to the assets

Evidence Act 1977 (Qld), s 84, s 102
Corporations Act 2001 (Cth), s 180(1), s 180(2), s 182(1), s1305, s 1317E, s 1317H

V-Flow Pty Limited v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC

COUNSEL:

L Copley for the plaintiffs

M deWard for the respondents

SOLICITORS:

Results Legal for the plaintiffs

Macrossan & Amiet for the respondents

Background

Reginald (Reg) and Faye Simpkin were married and had three children, Craig, Troy and Cindy. For approximately 38 years from 1981 until 2019 the Simpkin family worked hard as a family unit to accumulate significant assets in…

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.

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Details

Case: [2024] QSC 194
Decision Date: 27 August 2024

CaseChat Overview and Summary

Gunderlong Mackay Pty Ltd, along with two other plaintiffs, filed a lawsuit against Craig Simpkin and another defendant. The plaintiffs claimed that Craig Simpkin, a director of Gunderlong Mackay, had breached his fiduciary duties by misappropriating corporate assets and issuing an unauthorised loan to himself. The plaintiffs sought compensation for these breaches and the return of specific assets that they claimed were wrongfully possessed by Craig Simpkin. The case was heard in the Supreme Court of Queensland.

The legal issues the court had to decide were whether a binding agreement had been reached regarding the division of Gunderlong Mackay’s business operations among family members, if a boat purchased by Craig Simpkin using company funds belonged to the company or if it should be considered a director’s loan, if Craig Simpkin had misused his position to benefit himself, and if certain assets were wrongfully possessed or sold by Craig Simpkin.

The court found that Craig Simpkin had indeed breached his fiduciary duties by using company funds to purchase a boat, which was to be considered a director’s loan. However, the court dismissed the claim for compensation for the alleged breach of duty because the loan was to be repaid. Regarding the specific assets, the court ruled that Gunderlong Mackay was entitled to recover certain items such as a tipping body, a half roll of Geo piping, a groover, and a cutting bar. The court also found that Gunderlong Mackay had a valid claim to half ownership of a Kedron caravan. Conversely, the court dismissed the claim for a go-kart trailer and contents as there was no evidence to support the plaintiffs' claim.

The court ordered that the plaintiffs be heard regarding costs and the form of orders to be made. The first plaintiff was awarded a judgment against the second defendant in the sum of $15,352.03, representing the outstanding loan amount. The court further ruled that Gunderlong Mackay was entitled to recover specific assets, including the tipping body, the half roll of Geo piping, the groover, the cutting bar, and half of the Kedron caravan. The claim for the go-kart trailer and contents was dismissed.

Orders

Orders of the court

1. I will hear from the parties as to costs and the form of the orders to be made in consequence of these reasons.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Item 97 is the go-kart trailer and contents. It is not in Gunderlong’s financial records. It is said to be shown in the photograph on page 174 of Exhibit 58, however, I cannot see the trailer in that photograph. The trailer is also said to be the subject of Exhibit 58 page 173, the cheque butt showing that on 20 June 2000, Ace Kart Racing was paid $4,760.90 out of the joint account of Reg and Faye Simpkin. It is therefore equally owned by the Estate of Reg Simpkin and Faye Simpkin. Craig Simpkin’s evidence at T4-49 is that there are no go-kart trailers at his property. I accept his evidence and the claim in respect of that item is dismissed.Conclusion In respect of the plaintiffs’ claims framed as a debt loaned to Craig Simpkin, I conclude on the basis of the findings at paragraphs 91-93 above that the second defendant is indebted to the first plaintiff in the sum of $15,352.03 and I give judgment for the first plaintiff against the second defendant in the sum of $15,352.03. I dismiss the claim by the first plaintiff against the first defendant, Mr Craig Simpkin, in respect of $15,352.03 as no damages has been incurred from breach of duty as a director, as the loan monies are to be repaid. In respect of the detinue conversion bailment claim, the first plaintiff succeeds in respect of Item 53D, the tipping body, on the admissions made in the defence that the tipping body is owned by Gunderlong and is located at the land. The first plaintiff also succeed is on Item 53K, 53M, 53O, 53P, 53Q, 53R, 53S, 53W, 53Y, 53AB, 53AV, a half a roll of Geo piping the subject of Item 53AF, one groover the subject of Item 53AI and the cutting bar, Item 53E. In respect of Item 67 the Kedron caravan, the third plaintiff’s claim to ownership of one-half of the caravan has succeeded. I will hear from the parties as to costs and the form of the orders to be made in consequence of these reasons.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Gunderlong Mackay Pty Ltd & Ors v Simpkin & Ors [2024] QSC 194
PARTIES:	GUNDERLONG MACKAY PTY LTD ACN 010 210 456 (first plaintiff) MACKAY CAPITAL PTY LTD ACN 659 710 826 AS TRUSTEE FOR THE SIMPKIN FAMILY TRUST (second plaintiff) FAYE EMILY SIMPKIN (third plaintiff) v CRAIG NORMAN SIMPKIN (first defendant) CLP GROUP AUSTRALIA PTY LTD ACN 632 782 131 (second defendant)
FILE NO/S:	10018 of 2022
DIVISION:	Trial Division
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court at Mackay
DELIVERED ON:	27 August 2024
DELIVERED AT:	Rockhampton
HEARING DATE:	8, 9, 10, 11 July 2024 Submissions 24 July 2024
JUDGE:	Crow J
ORDER:	1. I will hear from the parties as to costs and the form of the orders to be made in consequence of these reasons.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATION – where the first plaintiff had commenced discussion regarding the splitting of its’ business operations amongst family members – whether a concluded agreement was made CORPORATIONS – MANAGEMENT AND ADMINISTRATION – DUTIES AND LIABILITIES OF OFFICERS OF CORPORATION – LOANS TO DIRECTORS – where the first defendant was a director of the first plaintiff – where the first defendant purchased a boat with funds from the first plaintiff – whether the boat is an asset of the first plaintiff or an asset of the first defendant with the purchase funds to be construed as a director loan CORPORATIONS – MANAGEMENT AND ADMINISTRATION – DUTIES AND LIABILITIES OF OFFICERS OF CORPORATION – FIDUCIARY AND RELATED STATUTORY DUTIES – REMEDIES AND PENALTIES FOR BREACH OF DUTY – COMPENSATION – where the plaintiffs allege that actions taken by the first defendant constitute breaches of the first defendant’s fiduciary and statutory duties – where first defendant while acting as a director for the first plaintiff issued a loan to the second defendant of which he was also a director – where the first defendant issued an invoice under the name of the second defendant for work completed by the first plaintiff – whether the defendant improperly used his position to gain an advantage for himself BAILMENT – IN GENERAL – where the first plaintiffs allege the first defendant to have possession or to have sold various assets alleged to be owned by the plaintiffs – whether the first defendant had possession of the various assets – whether the plaintiffs or defendants have rights to the assets Evidence Act 1977 (Qld), s 84, s 102 Corporations Act 2001 (Cth), s 180(1), s 180(2), s 182(1), s1305, s 1317E, s 1317H V-Flow Pty Limited v Holyoake Industries (Vic) Pty Ltd [2013] FCAFC
COUNSEL:	L Copley for the plaintiffs M deWard for the respondents
SOLICITORS:	Results Legal for the plaintiffs Macrossan & Amiet for the respondents