In the matter of AMBBB Pty Ltd

[2025] NSWSC 476

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

In the matter of AMBBB Pty Ltd [2025] NSWSC 476

Hearing dates:

7 May 2025

Date of orders:

15 May 2025

Decision date:

15 May 2025

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Two declarations and other orders made by consent; Court declines to make other declarations to which the parties consented.

Catchwords:

CORPORATIONS – Directors and officers – Appointment, removal and retirement of directors – whether director validly resigned – steps required to effect directors’ resignation – long delay in giving notice of resignation.

EQUITY – Trusts – Constructive trust – Where property acquired in name of defendant’s parents to effect “asset protection” scheme – Where defendant now asserts beneficial interest in property – Orders not made

Legislation Cited:

- Conveyancing Act 1919 (NSW) s 23C

- Corporations Act 2001 (Cth) ss 9, 9AC, 201A, 203AA, 203AB, 205A, 1322, 1661

- Corporations Law s 116

Cases Cited:

- Allen v Snyder [1977] 2 NSWLR 685

- Bell v Burton (1993) 12 ACSR 325

- Bokhari v Bokhari [2014] NSWSC 1474

- Dentown Pty Ltd v PWI Group Pty Ltd (2019) 141 ACSR 330; [2019] NSWSC 1032

- Hogg v Scott [1947] KB 759

- Hohol v Hohol (1981) VR 221

- Hurt v Freeman [2002] NSWSC 264

- Knight v Bulic (1994) 13 ACSR 553

- Marks v Commonwealth (1964) 111 CLR 549; [1964] HCA 45

- One Tree Agriculture Pty Ltd v Lye [2025] FCA 126

- Re Aero Marine Consulting Pty Ltd (2003) 133 FCR 1; [2003] FCA 1016

- Re Azzurri Group Holdings Pty Ltd [2023] NSWSC 566

- Re Centura Global Holdings Pty Ltd (2016) 111 ACSR 185; [2016] NSWSC 62

- Re Concreting and Formwork Personnel Pty Ltd (in liq) (2023) NSWSC 512

- Re JI Woo International Education Centre Pty Ltd [2016] NSWSC 1060

- Re Sam Beast Mask Pty Ltd [2024] NSWSC 941

- Re Seabay Kitchen Pty Ltd [2019] NSWSC 790

- Re Whitsunday Clean Sands Pty Ltd [2017] NSWSC 1199

- Tavitian v Commissioner of Highways [2010] SASC 206

- Thornton v Hyde [2004] NSWSC 125

- Yong v Zhong [2022] FCA 697

Texts Cited:

- Austin, Ford and Ramsay, Company Directors, Principles of Law and Corporate Governance, (LexisNexis, looseleaf)

- Halsbury’s Laws of Australia (LexisNexis)

Category:

Principal judgment

Parties:

Jim Horne (Plaintiff/First Cross-Defendant)
Alex Chrysoglou (First Defendant/Second Cross-Defendant)
AMBBB Pty Ltd (Second Defendant/Third Cross-Defendant)
Lemonia Hrysoglou (Third Defendant/Cross-Claimant)

Representation:

Counsel:
S J Burchett (Plaintiff/First Cross-Defendant)
A G Rogers/P Lin (First Defendant/Second Cross-Defendant)
A Ogborne (Third Defendant/Cross-Claimant)

Solicitors:
Jason Li Lawyers (Plaintiff/First Cross-Defendant)
Project Lawyers (First Defendant/Second Cross-Defendant)
H Danalis & Co (Third Defendant/Cross-Claimant)

File Number(s):

2024/302960

JUDGMENT

Nature of the proceedings

1. By a Statement of Claim filed on 30 October 2024, the Plaintiff, Mr Horne sought a range of relief against his brother, Mr Alex Chrysoglou, AMBBB Pty Ltd (“Company”) and his mother, Ms Lemonia Hrysoglou. The parties have since resolved their disputes between themselves and sought several consent orders from the Court to give effect to that resolution. Some of those consent orders are declarations in rem with potential impacts on third parties, which cannot be made unless the Court is satisfied that they have has a proper basis.

2. The affidavit evidence is largely directed to the particular orders sought by the parties. Mr Horne relies on several affidavits to seek to establish that he ceased to be a director of the Company on 30 June 2017. Mr Chrysoglou in turn relies on his affidavit dated 6 May 2025 in respect of his application for a declaration of a trust over a property situated in Earlwood, New South Wales (“Earlwood Property”). I will deal with that affidavit evidence in respect of the particular issues to which it relates.

Whether declarations and other relief should be granted on the basis that Mr Horne resigned as a director of the Company with effect from 30 June 2017

3. The first issue in the proceedings, as to which Mr Horne seeks declaratory and other relief, is whether he ceased to be a director of the Company and Mr Chrysoglou became the sole director of the Company (having at all times been a de facto director of the Company) from 30 June 2017. I now turn to the evidence on which Mr Horne relies in support of that relief.

4. Mr Horne relies on several affidavits and voluminous exhibits to those affidavits in this regard. In his first affidavit dated 18 August 2024, Mr Horne refers to an early involvement in a business run by his brother, Mr Chrysoglou and to his having become a director of the Company at Mr Chrysoglou’s invitation in 2004 or 2005, on the basis that Mr Chrysoglou was travelling a lot and Mr Horne would “run … the company day-to-day and [be] available to sign things, when required”. Mr Horne’s evidence (Horne 18.8.24 [9]) is that:

“I did not understand, that there was any impropriety or illegality intended by [Mr Chrysoglou] or in fact involved in his proposal and without taking legal advice, agreed to it. I had no prior experience of being a director of a company and assumed it was merely an administrative role and saw myself as Alex’s employee in the business.”

5. I proceed on the basis that Mr Horne had little or no understanding of the role of a company director at the time that he was appointed as a director of the Company. Nonetheless, he assumed the obligations that are imposed at general law, under the Corporations Act 2001 (Cth) (“Act”) and under Commonwealth and state revenue legislation on a company director at the point that he assumed that role.

6. Mr Horne’s evidence is then that (Horne 18.8.24 [10]):

“About 5-7 years later, [Mr Chrysoglou] told me, that he also wanted me to be the sole director of the Company, because he had some legal problems involving customs and border security in about 2001, which could have adversely affected the Company’s dealings with customs in the importation and sale of cigarettes, if he was then to be involved.”

7. By that point, on Mr Horne’s own account, Mr Horne remained as the Company’s purported sole director in order conceal Mr Chrysoglou’s continued involvement with the Company from a government body that had a proper interest in knowing of that matter. Mr Horne there acknowledges that he was appointed as the Company’s (purportedly) sole director, secretary and shareholder, purportedly in place of Mr Chrysoglou effective on 6 October 2005 (Horne 18.8.24 [11]). Importantly, there is no suggestion that Mr Horne did not consent to that appointment or was not validly appointed as a director of the Company at that time, although the consequences of his accepting that appointment may ultimately be adverse to him.

8. Mr Horne gives evidence of the subsequent administration of the Company’s affairs, to the effect that he signed documents at Mr Chrysoglou’s request and that Mr Chrysoglou exercised the substantive management of the Company’s affairs and made all final decisions as to the Company’s business (Horne 18.8.24 [18]). It will not be necessary to reach any finding as to that proposition, which may or may not be an issue in claims brought by third parties against Mr Chrysoglou, in order to determine these proceedings. Mr Horne in turn refers to the circumstances in which his wife, Ms Horne, was engaged as an employee of the Company and took over bookkeeping and invoicing responsibilities in respect of the Company (Horne 18.8.24 [18]). Mr Horne he accepts that he and his wife each received a salary from the Company (Horne 18.8.24 [22], [24]) and he refers to Mr Chrysoglou also having withdrawn monies from the Company’s account, and his evidence is that he (Mr Horne) did not receive a dividend as a shareholder of the Company. Mr Horne also addresses the circumstances in which other companies were incorporated although it is not necessary to address events in respect of those companies in order to determine the proceedings. He also refers (Horne 18.8.24 [34]) to the purchase of the Earlwood Property occupied by Mr Chrysoglou in his father’s and mother’s names, a matter that I address below.

9. Mr Horne in turn refers to circumstances in which shares were issued to two other investors in the Company (Horne 18.8.24 [36]) and to the circumstances in which Mr Horne was allocated at 1% share interest in the Earlwood Property, apparently in order to assist with a borrowing on that property (Horne 18.8.24 [40]) and to the subsequent sale of the Company’s business to a third party, which was proposed about October 2016 and did not complete until 30 June 2017. He also refers to discussions (Horne 18.8.24 [51]) in which Mr Chrysoglou indicated that Mr Horne would need to resign as director of the Company and other companies associated with Mr Chrysoglou once the sale of the business was implemented.

10. Mr Horne’s evidence (Horne 18.8.24 [61]) is that, in mid-June 2017, he telephoned the Company’s accountant and had a conversation in words to the following effect:

Horne:   “I will be resigning as director of Trojan Trading [the former name of the Company] effective 30 June 2017.”

Accountant:   “Please put it in writing, give it to [Mr Chrysoglou] and send me a copy by email.”

11. Mr Horne’s evidence is also that, on the same day, he drafted and signed a letter of resignation which he dated 29 June 2017 and noted the effective date of his resignation as 30 June 2017; that he sent an email to the accountant enclosing a copy of the letter, as requested; and that he no longer access to the Company’s email account from which that email was sent and did not retain a copy (Horne 18.8.24 [62]). I proceed on the basis that Mr Horne’s evidence in that respect is truthful, where it is not contested by Mr Chrysoglou and not intrinsically implausible, although I note below that there are many subsequent occasions where Mr Horne might have been expected to have referred to his earlier resignation as a director and did not do so.

12. Mr Horne’s evidence is further that (Horne 18.8.24 [64]):

“[On Mr Horne’s and his wife’s] last day with the Company, 29 June 2017, I handed an original, signed hard-copy of my resignation letter to [Mr Chrysoglou] in his office at “Seabridge House” [address omitted] which was also the “principal place of business” of the Company then recorded with [the Australian Securities & Investments Commission (“ASIC”)].

13. It is now apparent that evidence is incorrect, at least in part. In paragraph 22 of his second affidavit, dated 23 December 2024, Mr Horne corrected his evidence that he had hand delivered his resignation letter to the address at Seabridge House which was a serviced office used by the Company, and recognised that that address was merely an address for the receipt of mail. His evidence was that the serviced office used by the Company was at a different address, but he did not then give evidence that he had delivered the notice of resignation to that different address. Mr Burchett, who appears for Mr Horne, speculates that Mr Horne may simply have been mistaken as to the address as to which he delivered the notice of resignation, and, with considerable hesitation, I proceed on that basis.

14. Mr Horne exhibits a copy of the letter of resignation dated 29 June 2017 to his first affidavit, which reads as follows:

“To whom it may concern

I am writing to inform you that I am resigning from my position as Director from 30^th June 2017.

This includes any company bank accounts that I am associated with.

I would be glad to help with the transition. Please do not hesitate to ask.”

15. Mr Horne’s evidence (Horne 18.8.24 [65]-[66]) is that, also on 29 June 2017, he and his wife were removed as signatories to the Company’s bank accounts and they no longer had access to the Company’s records. His evidence (Horne 18.8.24 [67]-[68]) is also that Mr Chrysoglou told him that he would take care of a payroll tax assessment and then wind up the Company and that he felt confident that Mr Chrysoglou would honour his word and finalise the documentation and did not concern himself with it. However, Mr Horne plainly became aware that his suggested confidence as to those matters was misplaced.

16. Pausing here, it is important to note that Mr Horne then had the ability to give notice of his resignation as a director to ASIC under s 205A of the Act, so as to place third parties on notice that they could no longer look to him for compliance with the Company’s statutory obligations and place ASIC on notice that the Company was not operating in apparent breach of s 201A of the Act, with no statutory director. That section relevantly provides that:

(1)   If a director, secretary or alternate director retires or resigns, they may give ASIC written notice of the retirement or resignation. The notice must be in the prescribed form.

(2)   To be effective, a notice of resignation must be accompanied by a copy of the letter of resignation given to the company.”

17. Mr Horne and Ms Horne repeatedly complained in subsequent correspondence that Mr Chrysoglou had not caused the Company to give that notice to ASIC. That complaint is justified, so far as it goes, but does not address the fact that Mr Horne could readily have himself given that notice to ASIC. I will return below to the significance of that matter for the relief sought by Mr Horne.

18. Mr Horne’s evidence (Horne 18.8.24 [71]) is that, by mid-2018, he discovered that:

“[Mr Chrysoglou] had not discharged [Mr Horne’s] liability to the Company’s suppliers, wound up the Company or removed [Mr Horne] from its record as a director and had not refinanced the debt secured by the mortgage of the Earlwood Property.”

19. Mr Horne refers to several subsequent meetings between himself and Mr Chrysoglou to negotiate a written agreement, and to the signature and exchange of that written agreement, which comprises two separate documents, on 19 August 2018. In one of those documents, Mr Horne and his wife made several commitments in favour of Mr Chrysoglou in a document signed by them, and Mr Chrysoglou in turn agreed to several things, in a document signed by him, including:

“Remove Jim Horne as director of [the Company] [and two other companies] within 30 days.”

20. It will immediately be noted that that agreement and many subsequent communications proceed on the basis that Mr Horne had not previously been removed as a director of the Company, by an effective resignation as a director of the Company on or about 30 June 2017. Mr Burchett submits that that reflects Mr Horne’s lack of understanding of what was necessary to give effect to his resignation as a director of the Company, and I accept that is a possibility.

21. Mr Horne’s first affidavit also addresses subsequent communications with Mr Chrysoglou, the Company’s accountant, Revenue NSW and the Australian Taxation Office (“ATO”). By October 2019, Mr Horne received the first of several demands from revenue authorities, in this case from Revenue NSW, in respect of the Company’s liabilities. He sent that demand to his wife, who sent it to Mr Chrysoglou, in each case without any comment that he had previously resigned as a director of the Company on 30 June 2017, and he did not then advise Revenue NSW that he was not a director of the Company or that he had resigned over two years before (Horne 18.8.24 [74]ff; Ex P1, 113-122). Mr Horne subsequently advised Revenue NSW that Mr Chrysoglou was dealing with the matter on behalf of the Company (Horne 18.8.24 [77]), again without suggesting to Revenue NSW that he had resigned as a director of the Company on 30 June 2017.

22. Subsequent correspondence followed between Mr Horne, Ms Horne and the Company’s accountant. On 18 October 2021, Ms Horne emailed the Company’s accountant, at the time that she and Mr Horne were seeking to borrow funds from a bank, advising, inter alia:

“Please have Jim [Horne] removed as director effective immediately.”

Again, it is notable that neither Mr Horne nor Ms Horne then suggested that Mr Horne had in fact resigned as a director of the Company on 30 June 2017; or that his letter of resignation had then been provided to the Company’s accountant over four years before, as Mr Horne now contends. The Company’s accountant responded (Ex P1, 137-138), also without any suggestion that he had been provided with a copy of Mr Horne’s resignation as a director of the Company over four years before:

“Also we’ll have to check what to do re resignation.

Cant [sic] have a company with no directors.”

That comment did not recognise any resignation of Mr Horne as a director of the Company over four years before or the possibility that the Company had been without a properly appointed director since that time.

23. Subsequent communications between Ms Horne and the Company’s accountant followed to similar effect, including an email dated 2 November 2021, by which Ms Horne asked the Company’s accountant:

“Could you please contact [Mr Chrysoglou] to see who he wants to put as director of this company. If no director is chosen soon the company will have to be closed as Jim has resigned as director.” (Ex P1, 140)

24. This appears to be the first reference to Mr Horne’s resignation as a director in the correspondence which had followed that resignation. The position was not then resolved and, on 31 March 2022, Ms Horne advised Mr Chrysoglou, with a copy to the Company’s accountant:

“For your information please remove Jim [Horne] from Directorship for this company otherwise he will close it down. We will give you until the 1 May 2022 to remove him from Director.”

Again, that communication is inconsistent, as a matter of substance, with Mr Horne having previously ceased to as a director of the Company by resignation on 30 June 2017, and the proposition that he would “close [the Company] down” appears to assume that he had the capacity to do so as a continuing director of the Company. I will again, with hesitation, proceed on the basis that that also reflects a lack of understanding by Mr Horne and Ms Horne of what was necessary to give effect to his resignation a director of Company.

25. The position continued without resolution thereafter, although Mr Horne and his wife involved both their accountant, and ultimately a solicitor, to address the matter and claims then made by ASIC in respect of unpaid fees relating to the Company and by revenue authorities against Mr Horne. On 16 August 2022, Ms Horne advised Revenue NSW (Ex P1, 159-160) of Mr Horne’s defence to its claim against him, namely that:

“This company is owned and was started by [Alex] on 9/12/1994.

I was the Director from 6/10/2005 until my resignation 30/6/2017.

[Mr Chrysoglou remove myself & my wife from all bank accounts & anything to do with this company from that date with the exception of removing me as Director of which he was supposed to do immediately. I had thought he had removed me until I received the DPN [director penalty notice].

I have had nothing to do with this company since 30/6/2017.

None of the correspondence in relation to this company was sent to myself. All emails & address details either today with [Mr Chrysoglou] or [Mr Chrysoglou’s] accountant. “

I pause to note that the statement that Mr Horne had thought that Mr Chrysoglou had removed him as a director until he received a director’s penalty notice appears to be incorrect, at best, where it is plain enough from the communications to which I have referred above that Mr Horne had known, for a considerable time, that the Company had not given notice to ASIC of his resignation or removal as a director, and had also not himself given such notice to ASIC in that period. Communications also subsequently followed with the ATO, which appears to have taken the straightforward position that it would rely on the statutory records maintained by ASIC in respect of the Company, where Mr Horne had had the capacity to give notice of his resignation as a director of the Company, but did not do so (Ex P1, 217).

26. By his second affidavit dated 23 December 2024, Mr Horne addressed aspects of evidence led by the Third Defendant, Mrs Hrysoglou, by her affidavit dated 28 November 2024, and by Mr Chrysoglou by his affidavit dated 28 November 2024. Those affidavits were not read, presumably by reason of the consent position which had been reached between the parties, and Mr Burchett did not suggest that the bulk of that affidavit advanced Mr Horne’s case. I have referred above to Mr Horne’s evidence in that affidavit that undermined his earlier evidence as to delivery of his resignation letter to the Company.

27. By a third affidavit dated 11 April 2025, Mr Horne referred to documents relating to financial transactions involving the Company and the Earlwood Property and to Company records that still recorded him as having a connection with the Company, although those matters are not in issue in the proceedings.

28. Mr Horne also relied on his wife’s affidavit dated 23 December 2024 which referred to her involvement in the Company and sought to establish that Mr Chrysoglou controlled the Company. By a second affidavit dated 4 May 2025, Ms Horne referred to documents produced on subpoena. Mr Horne also relied on an affidavit dated 14 January 2025 of his accountant, Ms Bichler, who addressed events after she became involved in the matter on 23 May 2022, which are of limited relevance to the question whether Mr Horne had effectively resigned as a director of the Company nearly five years before she became involved.

29. Mr Horne also read affidavits dated 2 September 2024, 10 January 2025, 14 April 2025 and 4 May 2025 of his solicitor, Mr Li, which referred to communications with ASIC and the ATO in respect of the proceedings. Mr Li’s evidence is, inter alia, that, on 29 June 2023, Mr Horne lodged a Form 370 Notice with ASIC purporting to record his resignation as of 30 June 2017, but ASIC rejected that Notice, citing ss 203AA and s 203AB of the Act and noting that the effect of that resignation would be to leave the Company with no remaining statutory director. Mr Horne’s solicitors subsequently submitted to ASIC, and I accept, that those provisions do not apply where here, if Mr Horne had resigned at all, he had done so prior to the commencement of those provisions as set out by the transitional provisions in s 1661 of the Act. Mr Horne’s solicitors also then contended that AMBBB had a remaining director after Mr Horne’s resignation within the meaning of s 9 (and now s 9AC) of the Act, namely Mr Chrysoglou as a “de facto” or “shadow director” of the Company. I address that contention below.

30. Mr Horne also tendered (Ex P11) a document recording the registration of the Company which indicates that the Company was incorporated with a constitution which included the then proprietary company provisions contained in s 116 of the Corporations Law; had not adopted the articles set out in Table A; and the provisions relating to the treatment of the Company’s seal in the Company’s articles of association had specified effect. That document establishes that the Company had articles of association, and that excludes the application under s 135 of the Act of the replaceable rules (including the replaceable rule under s 205A of the Act dealing with the resignation of a director), where the Company was registered prior to 1 July 1998 and there is no suggestion that it has repealed its constitution after that date. However, Mr Horne has apparently been unable to obtain and has not tendered the Company’s constitution, so there is no evidence as to the content of any constitutional provision which defines what is necessary for him to resign as a director under the Company’s constitution. I can make no assumptions as to whether that constitution or any such provisions is in relatively standard or idiosyncratic form.

The declaration sought in paragraph 1 of the consent orders

31. First, the parties consent to a declaration that, as of 30 June 2017:

“(a)   [Mr Horne] ceased being a director of the Company, and

(b)   [Mr Chrysoglou] became the sole director of the Company (having at all times been a de facto director of the Company).”

32. Mr Burchett submits that the consent orders agreed between the parties indicate that there is now no dispute between the parties and that Mr Horne resigned as a director of the Company, effective on 30 June 2017, and that Mr Chrysoglou remains as a “director” of the Company, at least in the sense that he is a de facto or shadow director of the Company. I can proceed on the basis that the parties are content with the factual basis of that declaration, where they consent to it being made. I must nonetheless determine whether there is a proper factual and legal basis for the Court making that declaration. That depends, in part, on the extent to which Mr Horne could resign as a director of the Company without reliance on any constitutional provision authorising him to do so, where the terms of the Company’s constitution are not in evidence, and without relying on the replaceable rule in s 205A of the Act, which does not apply for the reasons noted above.

33. Mr Burchett in turn addresses the question what was necessary to bring about Mr Horne’s resignation as a director of the Company, without regard to the Company’s constitution, where its content is not known. He submits that a director is entitled to relinquish his or her office at any time by notice to the company of any kind, that is effective as a renunciation of the role, irrespective of its purported acceptance or rejection by the Company. Mr Burchett relies on Marks v Commonwealth (1964) 111 CLR 549 at 570-571; [1964] HCA 45 (“Marks”) for that proposition. That case is somewhat distant from the present facts, where it concerned the effectiveness of the resignation of a military officer, and the Court’s holding was that the officer’s resignation did not terminate his commission without the assent of the Governor General who was under no duty to assent. I recognise that Windeyer J (at 570) also there addressed the question of what was required to “resign” from a contractual relationship, or employment as an employee, or membership of a club or voluntary society, and that case has subsequently been applied in cases concerning directors’ resignations.

34. The decision in Knight v Bulic (1994) 13 ACSR 553 at 561 (“Knight v Bulic”) suggests that a director may resign by an oral resignation which is accepted by the company. That question does not arise here, because there is no suggestion that Mr Horne sought to resign by an oral resignation, or that that resignation was accepted by any act of an authorised officer of the Company. I accept that there was evidence here of discussions between Mr Horne and Mr Chrysoglou as to Mr Horne’s resignation prior to 30 June 2017, but I also note that Mr Chrysoglou had not then or now been appointed as a director of the Company, notwithstanding the evidence that he exercised control of it. I proceed on the basis that there is also authority that a director may resign without acceptance of that resignation by the company, unless an acceptance is required by the company’s constitution, Bell v Burton (1993) 12 ACSR 325 at 330; Re Aero Marine Consulting Pty Ltd (2003) 133 FCR 1; [2003] FCA 1016 (“Aero Marine”) at [41], where Goldberg J found that a director’s resignation was established by conduct that was accepted by the company

35. In Re JI Woo International Education Centre Pty Ltd [2016] NSWSC 1060, Brereton J addressed the position where a director did not resign in accordance with the requirements of the company’s constitution, although his Honour found that he had committed to do so. His Honour declined to make a declaration that that director remained in office, where that would be contrary to that commitment, and ordered that that director deliver his resignation as a director. Mr Burchett relies on that decision to support Mr Horne’s position, but it seems to me to be plainly to the contrary. Brereton J there proceeded, rightly in my view, on the basis that a resignation that was not in accordance with the requirements of the company’s constitution was not effective, and that underpinned his order that the director deliver a resignation as a director, which would implicitly comply with that constitution and have effect.

36. Mr Burchett in turn refers to the observations of Rees J in Dentown Pty Ltd v PWI Group Pty Ltd (2019) 141 ACSR 330; [2019] NSWSC 1032 (“Dentown”) at [111] and [196]-[199]. Her Honour there expressed the view directors may resign orally and the company may accept such a resignation and found that all directors of the company had there agreed the course of the relevant directors’ resignation. Her Honour there referred (at [196]) to the replaceable rule in s 203A of the Act, which provides a director may resign as a director of the company by giving a written notice of resignation to the company at its registered office. As I have noted above, the replaceable rule here has no application where the Company has a constitution, although that constitution is not in evidence. Her Honour also there referred to the provision of that company’s constitution (although without addressing the likelihood that that constitution would displace the replaceable rule), and held that that constitution did not require written notice to the company at its registered office, but simply written notice of the resignation, and did not suggest that that was the “only way” that a director may resign. As I have noted above, the Company’s constitution is here not in evidence. Her Honour also there referred to the view expressed in Austin, Ford and Ramsay, Company Directors, Principles of Law and Corporate Governance at [2.53], by reference to Marks above, that:

“In the absence of a provision in the Constitution on the matter, a director is entitled to relinquish office at any time the director pleases, by proper notice to the company … A resignation is not dependant on any acceptance by the company unless the constitution requires it. …” [emphasis added]

37. Rees J there noted, and I accept, that the facility then provided in s 205A of the Act for a director to give notice to ASIC of her resignation was not then necessary to the effectiveness of that resignation, although that position now appears to have changed by reason of s 203AA of the Act, which I have noted above does not apply in this case.

38. I also have regard to One Tree Agriculture Pty Ltd v Lye [2025] FCA 126 (“One Tree”), where Derrington J comprehensively reviewed the case law as to what was necessary to bring about a resignation of a director, although s 203AA of the Act applied in that case. Her Honour there accepted (at [53]) the view that a director may resign his or her office by tendering his or her resignation orally and the company subsequently accepting that resignation, referring to Knight v Bulic. However, her Honour went onto observe, at [54], that:

“The difficulty here is that there is a lacuna of evidence that [the relevant company] accepted any resignation that was tendered by Mrs Lye. Conceivably, in her position as sole director and shareholder of the company, she may have accepted her own resignation: see, eg, s 198E(1); Cain v Aero Marine Consulting Pty Ltd (2003) 133 FCR 1, 13 [50] (Cain): although there is an absence of evidence on her part of doing so, qua shareholder, and there is nothing to suggest when she did so. Of course, it is also true that the Corporations Act is largely silent about how a sole director and shareholder should evidence what they cause a company to do: Rowntree v Cmr of Taxation (2018) 125 ACSR 318, 328 [50] (Rowntree). But that observation pre-supposes the existence of some modicum of evidence. Here, for example, there was no suggestion that Mrs Lye passed a resolution, or made a declaration, accepting her proposed resignation on or before 1 July 2021: s 248B: or recorded any such documents in [the company’s minute books: s 251A.”

39. Her Honour also referred to the decision in Aero Marine, although her Honour cautioned (at [59]) that that finding should not be extrapolated to dissimilar circumstances and also observed, rightly in my view, that:

“Whilst there is no doubt that the management of the corporate affairs of small companies can be achieved with a degree of informality and casualness, it is inappropriate to devine the actions of a company by mere inference when conformity with the necessary processes — being those in the [Act] and Constitution — was not in the director’s contemplation at the time.”

40. Importantly, in One Tree, Derrington also observed (at [101]) that the relief sought in that case, namely a declaration as to whether the applicant had previously resigned as a director of the company, involved a determination of her status and “essentially an order in rem”, citing Halsbury’s Laws of Australia, [325-9015]. The matter is significant, where the declaration that Mr Horne now seeks would reverse the position that has been recorded on records maintained by ASIC for nearly eight years after his claimed resignation on 30 June 2017, on which at least Revenue NSW appear to have acted in the period by issuing demands to Mr Horne rather than to Mr Chrysoglou. I return to that matter below.

41. For completeness, I also note, but put aside, several decisions which have dealt with the position where a director has not consented to his or her appointment as a director, where there is no suggestion that Mr Horne had not consented to appointment as director: for example, Re Whitsunday Clean Sands Pty Ltd [2017] NSWSC 1199; Re Concreting and Formwork Personnel Pty Ltd (in liq) [2023] NSWSC 512; Re Sam Beast Mask Pty Ltd [2024] NSWSC 941. Those decisions also do not involve the difficulty, which arises here, of a failure to give notice of resignation as a director, since a person who was never validly appointed as a director could not logically resign as a director.

42. It seems to me that, in summary, the authorities do not establish that the mere execution of a letter of resignation by Mr Horne would be sufficient to bring about his resignation and I do not understand the decision in Marks to stand for that proposition. Absent an applicable constitutional provision, the content of which has not been established here, it seems to me that execution of a resignation together with proper delivery to the Company would be sufficient for a director’s resignation. I accept that, if Mr Horne’s resignation letter was in fact delivered to the Company’s principal office on 29 June 2017, despite the error in his original evidence as to that matter, that would likely amount to proper notice of the resignation to the Company. I also accept that, at least on the less demanding approach taken in Aero Marine, the previous discussions between Mr Horne and Mr Chrysoglou (although he was not a statutory director of the Company) and the provision of a copy of the resignation letter to the Company’s accountant, at the accountant’s request, may together amount to proper notice of the resignation to the Company. I do not understand the case law to require acceptance of a written resignation by the Company. If that was required, there is no suggestion that Mr Horne purported to accept his own resignation as a director of the Company by resolution; I do not accept that Mr Chrysoglou, even if he was purporting to act as a director of the Company without being properly appointed as such, had the authority to accept that resignation for the Company.

Delay

43. In submissions, Mr Burchett rightly acknowledges that there has been a “significant delay” in Mr Horne pursuing correction of the position shown in ASIC’s records that he is a director of the Company, although that may still understate the position as to a delay of some seven years in commencing the proceedings after the dates on which he says he resigned as a director of the Company. Mr Burchett suggests that Mr Horne was reluctant to bring proceedings against his mother and brother to force changes to the register, although his mother was not a necessary party to proceedings as to that issue, and no proceedings would have been necessary had Mr Horne taken the simple step of giving notice to ASIC of his resignation as a director under s 205A of the Act, prior to doing so on 29 June 2023. Mr Burchett points to Mr Horne’s evidence that he and his wife no longer had access to AMBBB’s records from 29 June 2017, but that provides no explanation of the delay where Mr Horne apparently retained a copy of his letter of resignation, which he tendered in these proceedings commenced more than seven years after the event. Mr Burchett also refers to the circumstances arising in each of 2018, 2019, 2021 and 2022 that indicated that ASIC’s records had not been changed, and I have referred above to the correspondence which indicates that Mr Horne knew that throughout the whole of that period. I am not persuaded that these matters provide an adequate explanation for Mr Horne’s not having given notice of his resignation to ASIC, within a reasonable time after it occurred or after the Company failed to do so.

44. Mr Burchett also rightly recognises that the Court may properly decline to make a declaration by reason of the plaintiff’s delay in seeking it, although he does not address the relevant case law.

45. In Hogg v Scott [1947] KB 759 at 767, Cassels J indicated that, independently of his decision on the merits of the plaintiff’s claim for a declaration, he would have dismissed the claim because of waiver, delay and the application of a statutory time limit. In Tavitian v Commissioner of Highways [2010] SASC 206, Kourakis J (as his Honour then was) cited that decision and observed (at [3]), albeit in a different context to this case, that:

“The making of a declaration is discretionary and, in the proper exercise of that discretion, the order may be refused on the grounds of undue delay.”

46. As I have noted above, Mr Horne did not commence these proceedings until more than seven years after he claims to have resigned as a director of the Company and that delay, combined with his failure to give earlier notice of his resignation to ASIC as he could have done under s 205A of the Act, plainly put third party interests at risk. That delay should be assessed in the context that, although s 203AA of the Act does not apply by reason of the transitional provisions, the register of directors maintained by ASIC has an important function in recording the identity of company directors in a manner that may be relied on by third parties, including, but not limited to, suppliers and revenue authorities. It was open to Mr Horne to give notice of his resignation to ASIC, although I accept the observation of Rees J in Dentown that he was not then under a statutory obligation to do so, and he ultimately did so on 29 June 2023. On the other hand, I recognise that the Court’s declining to make a declaration by reason of delay would leave Mr Horne in a position that he would remain exposed to third party claims in the then indeterminate future, unless he takes steps to wind up the Company on the just and equitable ground, since ASIC appears to be unwilling to accept a notice of his resignation by reason of s 201AB of the Act. In these difficult circumstances, but with hesitation, I have ultimately concluded that I should not withhold declaratory relief that would otherwise be appropriate by reason of delay.

47. For completeness, Mr Burchett submits, and I accept, that ASIC need not be joined as party to the proceedings, consistent with its published policy as to applications of this character. Mr Burchett acknowledges the commercial interests of the ATO in the proceedings, so far as it has issued a director penalty notice to Mr Horne, but contends that it need not be joined as party to the proceedings. It is not necessary to determine that question, given the conclusions which I reach on other grounds below. It appears that Revenue NSW no longer has an interest in the proceedings, where it has not pressed the claim which it originally identified against the Company and against Mr Horne.

Whether the declaration sought in paragraph 1(a) of the consent orders should be made

48. As I noted above, paragraph 1(a) of the proposed consent orders is a declaration that, as of 30 June 2017, Mr Horne ceased being a director of the Company. There initially seemed to be a question whether the declaration sought by Mr Horne in this paragraph of the proposed consent orders would provide a partial and misleading statement of the position, and I allowed the parties an opportunity to make further submissions after the hearing as to whether the Court could or should make a fuller declaration that:

“… with effect from 30 June 2017, the Plaintiff resigned as a director of the [Company]; from 30 June 2017, the Company failed to give notice of that resignation to [ASIC] and, from at least mid-2018, [Mr Horne] knew of that matter; from 30 June 2017 until 29 June 2023, [Mr Horne] also failed to give notice of that resignation to ASIC; and, in these circumstances, each of the [Mr Horne], [Mr Chrysoglou] and the Company throughout that period permitted a representation to be made to third parties that [Mr Horne] was a director of the [Company].”

49. Mr Burchett responded that a declaration in the form of paragraph 1(a) of the proposed consent orders may be a partial account of events but it is not a misleading one, and that such a declaration needs to focus on “relevant and proven events to the extent necessary to do justice; no more and no less”. Mr Burchett submitted that the declaration proposed by Mr Horne was, without more, a “true statement of the law and fact”. He accepted that it was also true that the Company failed to give notice of Mr Horne’s resignation as a director from 30 June 2017 and indicated that Mr Horne would not oppose a reference to that matter being added to the declaration, but opposed any other addition to the declaration. Mr Burchett also submitted that Mr Horne has had no opportunity to respond to the allegation that he knew of the Company’s failure to give notice of his resignation or that he could do anything relevant about it. I do not accept that submission, where I drew Mr Burchett’s attention indicating Mr Horne’s knowledge of that matter at the hearing and to Mr Horne’s ability to himself give notice of his resignation to ASIC under s 205A of the Act.

50. Mr Burchett also submits that the question whether any third party has been relevantly misled by the position shown in ASIC’s records is “entirely hypothetical”. I am not persuaded of that proposition where both Revenue NSW and the ATO issued demands to Mr Horne after 30 June 2017, apparently on the basis that he was the director of the Company as recorded in ASIC’s records. He submits that Mr Horne cannot be described as having “failed to give notice” of his resignation to ASIC where he was under no obligation to give that notice, although as I have pointed out, he had the ability to do so. It is arguable that the language “failed” may be inappropriate in that situation, and a more appropriate statement may have been that Mr Horne did not take advantage of his own ability to give notice of his resignation to ASIC until 29 June 2023. Mr Burchett also submits that, after 18 February 2020, ASIC would not have accepted such a notice by reason of s 203AA and s 203AB of the Act but does not address the position prior to that date.

51. Mr Chrysoglou and Mrs Hrysoglou make no submission as to this matter and maintain their consent to the order sought by Mr Horne in this respect.

52. It seems to me that, for the reasons noted in above, the declaration sought in paragraph 1(a) of the parties’ proposed consent orders is incomplete, but that it does resolve a matter which has been in dispute between the parties, and any incompleteness in it is cured by the more complete account of the facts that emerge from the findings which I have set out above. With considerable hesitation, I have concluded that I should make that declaration, where the evidence is (possibly barely) sufficient to demonstrate the likelihood that Mr Horne took the steps necessary to resign as a director of the Company on 29 June 2017, with effect from 30 June 2017, consistent with his ceasing involvement with the Company at the time. Although the Company failed to give notice of his resignation to ASIC, and there was then a long delay in his giving that notice, he ultimately did so on 29 June 2023. ASIC ought then to have recorded that resignation in its register, since s 201AB of the Act did not apply to it by reason of the transitional provisions to which I referred above. That is a sufficient basis to make the declaration sought.

Whether the declaration sought in paragraph 1(b) of the consent orders should be made

53. As I noted above, paragraph 1(b) of the proposed consent orders is a declaration that, as of 30 June 2017, Mr Chrysoglou became the sole director of the Company (having at all times been a de facto director of the Company). I am content to proceed on the basis that Mr Chrysoglou was at all times a de facto director of the Company, both because he accepts that proposition by consenting to the declaration, and because the evidence to which I have referred above supports that proposition.

54. I also allowed the parties an opportunity to make further submissions as to a question arising from this proposed order after the hearing as follows:

“[If his Honour is satisfied that Mr Horne resigned as director with effect from 30 June 2017], should his Honour decline to make the order sought in paragraph (1)(b) on the basis that (1) the question whether Mr Chrysoglou was a director or the “sole director” of the Company may differ depending on the purpose for which that question is asked; (2) Mr Chrysoglou was not a director or the sole director of the Company for the purposes of s 201A of the Act in the relevant period, and a declaration should not be made on a basis that would be inconsistent with a winding up of the Company in the just and equitable ground by reason of the fact that it has not complied with that section since 30 June 2017; and (3) Mr Chrysoglou was likely a de facto or shadow director of the Company for the purposes of statutory provisions that impose duties or liabilities on the Company, but he may not have been the “sole director” of the Company for that purpose, where the Company’s and Mr Horne’s failure to give notice of Mr Horne’s resignation to ASIC held out to third parties that Mr Horne was a director of the Company after his resignation on 30 June 2017; and (4) the Court should not make a declaration that is inconsistent with the possibility that, in a third party claim, Mr Horne would be treated as having remained a director of the Company after that date, which should be left for determination in any proceedings brought by that third party.”

55. In response, Mr Burchett submits that Mr Chrysoglou’s role as a “shadow” or “de facto” director under s 9 and s 9AC of the Act satisfied the requirements of s 201A of the Act and advanced further submissions as to the effect of that section. I do not accept that submission. It seems to me that the requirement in that section that the Company have at least one director should be read, in its context, as referring to a statutory director of a company, rather than a de facto or shadow director, where it can scarcely be thought that the legislature is there offering an option to proprietary companies to have their affairs conducted by persons not properly appointed to that role or identifiable from ASIC’s records. Mr Burchett submitted that the evidence is “overwhelming” that Mr Horne ceased being a director on and from 30 June 2017, and I have addressed that question above. He also submits that the possibility that Mr Horne would be found liable in a claim by a third party is “speculative and remote” and submits that a third party could be “misled” by the ASIC register to think that such a claim could be made. Mr Chrysoglou and Mrs Hrysoglou make no submission as to this matter and maintain their consent to the order sought by Mr Horne in this respect.

56. I have concluded that this declaration should not be made, because the answer to the question whether Mr Chrysoglou was a director or the “sole director” of the Company will differ depending on the purpose for which that question is asked. In my view, Mr Chrysoglou was not a director or the sole director of the Company for the purposes of s 201A of the Act in the relevant period, and a declaration should not be made on a basis that would be inconsistent with a winding up of the Company on the just and equitable ground by reason of the fact that it has not complied with that section since 30 June 2017. I recognise that Mr Chrysoglou was likely a de facto or shadow director of the Company for the purposes of statutory provisions that impose duties or liabilities on the Company, but that is not sufficient basis for the declaration sought. It is not necessary to address the further question whether Mr Horne’s long delay in giving notice of his resignation held out to third parties that he was a director of the Company after his resignation on 30 June 2017, which should be left for determination in any proceedings brought by that third party.

Declaration as to oral agreements of June 2017 and August 2018

57. Second, Mr Horne seeks a declaration that Mr Chrysoglou has at all times been bound by an oral agreement on 29 June 2017 and has, since 19 August 2018, been bound by his written agreement on that day. I will make that declaration, where it establishes only the rights as between Mr Horne and Mr Chrysoglou, and the matters necessary to establish the alleged agreements and those rights are necessarily admitted by Mr Chrysoglou’s consent to this declaration.

Order that Mr Chrysoglou lodge these orders etc with ASIC

58. Mr Horne seeks a third order that Mr Chrysoglou lodge a copy of these orders and declarations and also lodge forms recording the position that Mr Horne ceased to be a director of the Company on and from 30 June 2017 and that Mr Chrysoglou was a director of the Company on and from that date and certain replacement forms. I will not make that order, notwithstanding the parties’ consent to it. There is no suggestion that Mr Chrysoglou has been properly appointed as a director of the Company so as to properly cause it to undertake particular actions. Section 9AC of the Act, which expands the definition of “director” to include a de facto or shadow director, is not a permission to a de facto or shadow director to take the steps which could properly be taken by a person who was validly appointed as a director. The Court should not make an order that contemplates that Mr Chrysoglou, who is not validly appointed as a director of the Company, cause the Company to lodge notices with ASIC.

Order to correct ASIC’s records under s 1322 of the Act

59. Mr Horne seeks a fourth order, in default of the Company’s compliance with the third order he seeks, that ASIC rectify the records that it maintains to show that Mr Horne ceased to be a director of the Company on and from 30 June 2017 and consequential orders.

60. I recognise that orders for rectification of the register maintained by ASIC have been made under s 1322 of the Act where, for example, a person had not consented to act as a director, and had not validly been appointed as a director, or had been improperly removed as a director: for example, Re Centura Global Holdings Pty Ltd (2016) 111 ACSR 185; [2016] NSWSC 62 at [56]–[57]; Re Seabay Kitchen Pty Ltd [2019] NSWSC 790; Yong v Zhong [2022] FCA 697; and, in a different context, Re Azzurri Group Holdings Pty Ltd [2023] NSWSC 566.

61. I will make this order, in part, without the qualification directed to the Company’s non-compliance with the third order (which I have not made), where I have found above that ASIC ought to have recorded Mr Horne’s resignation as a director of the Company when he, belatedly, gave notice to it of that resignation on 29 June 2023. I will not extend that order to any statement that Mr Chrysoglou is a director of the Company where he has not been validly appointed to that role.

Order as to correction of the Company’s register of directors

62. Fifth, Mr Horne seeks an order that Mr Chrysoglou cause the Company to correct its register of directors to show that he had been replaced as director by Mr Chrysoglou on and from 30 June 2017. I would not make that order, first, because there is no evidence that the Company maintains a register of directors so as to be in a position to correct that register and, second, because the Company has no validly appointed director who could comply with it. Mr Horne did not seek to have a further order made to bring such a register into existence so as to correct it, and I would also not have made that order where the Company has no validly appointed director who could comply with it.

Order if s 203AA of the Act applies

63. Mr Horne seeks a sixth order, if s 203AA of the Act applies. It is not necessary to address that order, where I have accepted Mr Horne’s submission that that section does not apply by reason of the transitional provisions to which I referred above.

Earlwood Property

64. The parties had in turn agreed that a declaration should be made, as sought by Mr Chrysoglou, in the following terms:

“A declaration that at all times the interests held by [Mr Horne] and [Mrs Hrysoglou] in the [Earlwood Property] are on trust for [Mr Chrysoglou].”

65. Mr Chrysoglou relies on his affidavit dated 6 May 2025 in support of this order. Mr Chrysoglou there sets out a conversation with his parents on 6 May 2025 in which they offered to help him to buy a property, by making a contribution of up to $1 million for the purchase price of the property. He refers to steps that he subsequently took to identify a property for purchase and to a further conversation with his parents when he had located the Earlwood Property, in which he suggested that the property should be put in their names for “asset protection”, so as to avoid any claim against the property by a person he was then “seeing”, and his parents accepted that suggestion. Mr Horne and Mr Chrysoglou’s mother, Mrs Hrysoglou, do not now contest that evidence; it is not intrinsically implausible; and I proceed on the basis that it is true. I return to the significance of that evidence below.

66. Mr Chrysoglou accepts that his parents paid for all the costs of purchasing the Earlwood Property, but his evidence is that he has lived in the property and paid for the costs and expenses associated with it, including council rates, water rates, land tax and other expenses. He accepts that his mother became sole registered proprietor of the property on his father’s death on 7 January 2012; his evidence is that his mother subsequently transferred a one percent interest in the property to Mr Horne in March 2012, in connection with a borrowing made on the security of the property; that companies associated with him have since repaid that borrowing; and that he in turn caused and paid for a development application to be lodged in respect of the property in mid-September 2021 and subsequently funded proceedings in the NSW Land and Environment Court in relation to the refusal of that development application.

67. Mr Rogers, with whom Mr Lin appears for Mr Chrysoglou, recognises that Mr Chrysoglou’s claim needs to rely on an exception to s 23C of the Conveyancing Act 1919 (NSW), which relevantly provides that:

“(1)    Subject to the provisions of this Act with respect to the creation of interests in land by parol—

(a)    no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law,

(b)    a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will,

(c)    a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by the person's will, or by the person's agent thereunto lawfully authorised in writing.

(2)    This section does not affect the creation or operation of resulting, implied, or constructive trusts.”

68. Mr Rogers in turn relies on Allen v Snyder [1977] 2 NSWLR 685 (“Allen v Snyder”) as authority as to the matters which Mr Chrysoglou needs to establish in order to establish a trust within the exception to that section. Glass JA there observed (at 690) that:

“Constructive trusts arise where it would be a fraud for the legal owner to assert a beneficial interest. Unlike express and implied trusts, which reflect actual intentions, they are imposed without regard to the intentions of the parties, in order to satisfy the demands of justice and good conscience.”

69. His Honour also observed (at 693) that:

“The trust is enforced, because it is unconscionable of the legal owner to rely on the statute to defeat the beneficial interest. It could justifiably be called an express trust, as it was in Rochefoucauld v. Boustead [1897] 1 Ch. 196, at p. 208]. Or it might be called an implied trust, based upon presumed intentions which have been modified by evidence to accord with the actual intentions. But when it is called a constructive trust, it should not be forgotten that the courts are giving effect to an arrangement based upon the actual intentions of the parties, not a rearrangement in accordance with considerations of justice, independent of their intentions and founded upon their respective behaviour in relation to the [property].” (emphasis added)

70. Mr Rogers also refers to Hohol v Hohol (1981) VR 221 at 225 (“Hohol”) where O’Brien J treated the observations in Allen v Snyder as “highly persuasive” and expressed the view that:

“It seems to me that, if the parties expressed a common intention, it may be said that there is an express trust, whereas, if there was merely an implied or imputed common intention it may be said that there is an implied trust.”

71. His Honour in turn summarised the essential elements of the relevant trust as:

“first, that the parties formed a common intention as to the ownership of the beneficial interest. This will usually be formed at the time of the transaction and may be inferred as a matter of fact from the words or conduct of the parties. Secondly, that the party claiming a beneficial interest must show that he, or she, has acted to his, or her, detriment. Thirdly, that it would be a fraud on the claimant for the other party to assert that the claimant had no beneficial interest in the property…”

72. His Honour also observed (at 225-226) that:

“In my opinion, before the plaintiff can succeed in respect of any property it will be necessary for me to find that the parties had an actual common intention at the date when the property was purchased that it should become jointly owned or, at least, that the plaintiff should have a beneficial interest in it. The intention may be expressed between them or inferred. In Allen v Snyder, [1977] 2 NSWLR 685 Glass, JA, at pp. 693-694, dissented from the proposition that a court may impose or impute a trust on the legal owner in favour of a party making no contribution to the acquisition of the property whenever it is fair to do so. I respectfully agree with his views. The onus of proving that the parties had a common intention lies upon the plaintiff as claimant. It must also be established that the plaintiff has suffered some detriment and it would be a fraud on the plaintiff for the defendant to deny her beneficial interest in the property..”

73. Mr Rogers also refers to Hurt v Freeman [2002] NSWSC 264, where Santow J quoted the passage from Hohol which I have quoted above, and observed (at [219]) that:

“[i]n determining whether there is a common intention that a claimant was to have a beneficial interest in the property the Court will look firstly for direct evidence of any express communications between the parties or the making of admissions by them.”

74. Mr Rogers also referred to Thornton v Hyde [2004] NSWSC 125, where Burchett AJ in turn referred at [17] to Hohol.

75. I allowed the parties a further opportunity to make submissions as to this declaration after the hearing, as follows:

“Should his Honour decline to make order 7 sought by Mr Chrysoglou on the basis that, inter alia, (1) Mr Chrysoglou did not suggest in his evidence, and Mr Rogers did not suggest in submissions, that that the decision to place the Earlwood property in the names of Ms Chrysoglou’s parents was intended to allow Mr Chrysoglou and his parents dishonestly to deny that he held the whole beneficial interest in the property, which he in fact held, in order to defeat a third party’s claim against it; (2) there is no suggestion that such a claim would have been defeated merely because Mr Chrysoglou’s parents held the legal title to the property on trust for him; (3) the efficacy of the “asset protection” strategy which Mr Chrysoglou proposed and his parents accepted depended on their retaining, and his not acquiring, any proprietary interest in the property, including a beneficial interest in the property, so as to avoid the risk of that third party claim against the property; (4) that position is inconsistent with any common intention of Mr Chrysoglou and his parents that he acquire a beneficial interest in the property; and (5) where no such common intention existed, and Mr Chrysoglou accepts that he did not fund the acquisition of the Earlwood property, it is not apparent that it would have been unconscionable for Mr Chysoglou’s parents to assert their ownership of the property they had acquired, with the intent that it be a gift to him that he did not take up.”

76. Mr Rogers submitted, in response, that Mr Chrysoglou’s request to his parents reflected a “non-technical understanding of asset protection that, so long as property was registered in a person’s name, it was protected from potential claims against that person” and submitted that that “does not necessarily involve a person divesting both legal and equitable interest” and otherwise repeats aspects of his submissions in chief. Mr Rogers also refers to the decision in Bokhari v Bokhari [2014] NSWSC 1474, but that decision does not advance Mr Chrysoglou’s position. That case is distinguishable because, first, Mr Bokhari there paid the deposit for the property whereas Mr Chrysoglou here made no financial contribution at the time the Earlwood Property was acquired; and, second, because that decision turned on a finding that the property was acquired in the name of Mr Bokhari’s sister-in-law to be held on trust for Mr Bokhari, and I do not reach such a finding here for the reasons noted below. Mr Horne and Mrs Hrysoglou in turn made no submissions as to this matter and maintained their consent to the declaration sought by Mr Chrysoglou in this respect.

77. I recognise that the parties have here agreed to the form of declaration that is sought, so far as it would implement a position which they have agreed between themselves. However, Mr Chrysoglou’s evidence does not establish that it was more probable than not that he and his parents had a common intention to separate the legal ownership of the Earlwood Property (which would be in his parents) and its beneficial ownership (which would be in him), so as to create a trust, rather than a generalised understanding that his parents would own the entire interest in the Earlwood Property, he would be permitted to occupy it and expected to pay the outgoings on it, and there was likely an expectation that he could have the ownership of the property transferred to him in the future. On Mr Chrysoglou’s evidence, his parents had proposed to fund the acquisition of the property for him, plainly contemplating that it be acquired in his name; subsequently, he had proposed that it be held in their names, expressly for “asset protection” purposes and to avoid any risk of a claim by a third party against the property, relying on her relationship with Mr Chrysoglou; and Mr Chrysoglou’s parents had acquiesced in that course. It seems to me that the conversations set out by Mr Chrysoglou are at least as consistent with, and likely more consistent with, an informal arrangement that his parents retain the entire interest in the property than with a separation of legal and beneficial interest in a trust.

78. An informal arrangement that Mr Chrysoglou’s parents retain the entire interest in the property would also better serve his “asset protection” purpose as against a third party claim to the property, albeit at the cost that his parents, rather than he, would own the entire interest in the property, and arrangements of that kind are well-known in other contexts, where they are often described as “warehousing”. A trust arrangement would not have served that purpose, where there is no suggestion that a third party claim would have been defeated merely because Mr Chrysoglou’s parents held the legal title to the property on trust for him; and Mr Chrysoglou did not suggest in his evidence, and Mr Rogers did not suggest in submissions, that that transaction was intended to allow Mr Chrysoglou and his parents dishonestly to deny that he held the whole beneficial interest in the property, which he in fact held, in order to defeat a third party’s claim against it. The fact that the “asset protection” strategy which Mr Chrysoglou proposed, and his parents accepted, depended on their retaining, and Mr Chrysoglou’s not acquiring, any proprietary interest in the property, including a beneficial intertest in the property, so as to avoid the risk of the identified third party claim against the property, is inconsistent with any common intention of Mr Chrysoglou and his parents that he hold a beneficial interest in the property.

79. Where I am not satisfied that such a common intention is established on the balance of the probabilities, and Mr Chrysoglou accepts that he did not fund the acquisition of the Earlwood Property, it is also not apparent to me that it would have been unconscionable for his parents to assert their ownership of the property they had acquired with an intent that it be a gift to him that he, for his own reasons, did not take up.

80. As Mr Rogers rightly accepted in submissions, the fact that a subsequent loan was taken out in the name of Mrs Hrysoglou and Mr Horne on the Earlwood Property, for the benefit of Mr Chrysoglou or his companies, and then repaid by Mr Chrysoglou’s companies, does not advance Mr Chrysoglou’s claim to the Earlwood Property. The fact that Mr Chrysoglou’s companies repaid a loan of which he or they had the benefit does not give rise to any apparent basis on which they should have a proprietary interest in the land on which that loan was secured.

81. The third matter on which Mr Chrysoglou relies to claim that Mrs Hrysoglou and Mr Horne hold the property on trust for him is the fact that he paid outgoings on the property and incurred costs in respect of the development proposal of the property. I proceed on the basis that Mr Chrysoglou did pay such outgoings, where the other parties do not contest that proposition, although little documentation was tendered to establish them and no attempt was made to quantify them. I will assume, without deciding, that it would be unconscionable for Mrs Hrysoglou and Mr Horne to seek to retain the legal ownership of the Earlwood Property without compensating Mr Chrysoglou for the costs that he has incurred in maintaining it for the relevant period, after adjusting for the benefit he has obtained from occupying it over that period. I accept that may have supported an equitable charge or lien over the property, but the parties did not formulate the agreed relief in that form and Mr Chrysoglou makes no attempt to quantify a claim on that basis. I can see no basis on which those unquantified costs would support a constructive or other trust, particularly where Mr Chrysoglou has had the countervailing benefit of occupancy of the property.

82. I recognise that there is evidence that Mr Chrysoglou also incurred costs in respect of proceedings in the NSW Land and Environment Court in respect of the development proposal relating to the property. It is not suggested Mrs Hrysoglou or Mr Horne requested that he incur those costs or that he sought their agreement to do so; no attempt is made to establish that the development proceeded or that the incurring of those costs has increased the value of the Earlwood Property; and there is no suggestion that Mr Chrysoglou was under any mistaken impression that he was then the legal owner of the property at the time he incurred those costs. It is not apparent to me that it would be unconscionable for Mrs Hrysoglou or Mr Horne to deny that Mr Chrysoglou is entitled to recover from them, or against the Earlwood Property, costs which he incurred as a volunteer, without reference to them, which are not shown to have increased the value of that property.

83. For these reasons, I will also not make the seventh order that is sought by the parties. That, of course, does not prevent any agreed dealing between them as to the Earlwood Property which does not depend on the Court making an order that is not sufficiently supported by the evidence.

Other matters

84. The parties had agreed to an order granting liberty to relist the proceedings to seek an order for sale of the Earlwood Property. That order does not seem to be necessary where I have made no orders in respect of that property. They had agreed orders as to costs, which I can make by consent. They had agreed the matter should be relisted at a date in three months time to address issues as to implementation of these orders, but it is not necessary to make that order given the limited scope of the orders that I have made.

Orders

85. I therefore make the following orders:

1. Declare that, on and from 30 June 2017, the Plaintiff ceased being a director of the First Defendant (“Company”).   

2. Declare that the First Defendant has at all times:

(a)   Since 29 June 2017 been bound by his oral agreement that day, and

(b)   Since 19 August 2018 been bound by his written agreement that day,

to cause the Plaintiff to be removed as a director of the Company, including to the extent necessary for that purpose, causing himself (or another qualified person nominated by the First Defendant) to be registered as a director.

1. Order pursuant to section 1322(4)(b) of the Corporations Act 2001 (Cth) that the register kept by the Australian Securities and Investments Commission relating to the Company be rectified by the Australian Securities and Investments Commission to show that the Plaintiff ceased to be a director of the Company on and from 30 June 2017.

2. The First and Second Defendants pay the Plaintiff’s costs (as against each Defendant) of the proceedings, as agreed or assessed.

3. Subject to Order 4 above, each party to bear their own costs of the proceedings and all costs orders to date be vacated.

6.    The proceedings otherwise be dismissed.

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Amendments

03 June 2025 - Amendments made to paragraph 85.

Decision last updated: 03 June 2025