Minco Holdings Pty Ltd (in liq) v Moran - [2020] WADC 97

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   MINCO HOLDINGS PTY LTD (in liq) -v- MORAN [2020] WADC 97
CORAM:   DEPUTY REGISTRAR HARMAN
HEARD:   28 FEBRUARY 2020, 1 APRIL 2020 & 18 JUNE 2020
DELIVERED          :   1 JULY 2020
FILE NO/S:   CIV 2432 of 2019
BETWEEN:   MINCO HOLDINGS PTY LTD (in liq)
Plaintiff
AND
RUSSELL HAROLD MORAN
Defendant

Catchwords:

Practice - Western Australia - Practice under the Rules of the Supreme Court 1971 (WA) - Order 14 of the Rules of the Supreme Court 1971 (WA) - Application of the plaintiff for summary judgment - Turns on its facts

Legislation:

Rules of the Supreme Court 1971 (WA)

Result:

Summary judgment awarded in favour of the plaintiff

Representation:

Counsel:

Plaintiff	:	Mr N Steinsvaag
Defendant	:	Ms E Carlean

Solicitors:

Plaintiff	:	Valenti Lawyers
Defendant	:	Not applicable

Case(s) referred to in decision(s):

Nil

DEPUTY REGISTRAR HARMAN:

The plaintiff is presently in liquidation. It has brought the action to recover amounts due under two loan agreements. By the application now before the court it seeks summary judgment. The application has been brought within the scope of O 14 r 1 of the Rules of the Supreme Court 1971 (WA). It is opposed.
According to the statement of claim the plaintiff was placed in liquidation on 15 January 2020; the defendant is the sole director, the secretary and sole shareholder of the plaintiff; each agreement was entered into on 30 June 2016; on the same day under what the plaintiff describes as the first loan agreement, it advanced $314,508 to the defendant; by 30 June 2017 the principal sum outstanding had been reduced to $250,871; on 30 June 2016, under what the plaintiff describes as the second loan agreement it advanced $245,000 to the defendant; by 30 June 2017 the balance of the principal sum outstanding had been reduced to $214,974; in the year to 30 June 2018 the defendant paid neither the minimum repayment due under each agreement nor interest; the interest due in the financial year to June 2018 under the first loan is $13,120.55 and under the second loan agreement, $11,243.14; in the financial year to 30 June 2019 interest accrued on the first loan agreement in the amount of $13,095.46 and $11,221.64 on the second; the defendant is in breach of each agreement and accordingly the plaintiff is entitled to demand payment of the balance of each principal sum and interest; the plaintiff demanded payment of the balance of each principal sum along with interest. The plaintiff claims interest from 1 July 2019 to date on the balance outstanding under each agreement.
The plaintiff carries the persuasive onus that under each agreement there is a clear case for an exercise of discretion in its favour. Although I am aware of authority otherwise, in my opinion, as a matter of principle, there is no reason to consider that onus on the defendant is any different to that generated under any other interlocutory application: to ensure that any submission that he cares to make is supported by evidence.
Having filed two affidavits subsequent to the first affidavit of the defendant, the plaintiff requires a grant of leave to rely upon their content. The scope for a grant of such leave is narrow, being limited to what would be regarded as sufficiently conclusive evidence that is inconsistent with content of an affidavit produced by the defendant. To the extent that the plaintiff drew upon the content of those affidavits, it did not establish ground for a grant of leave. I would add that it is in the interests of administration of justice that applications of this nature are kept within proper bounds.
The defendant has filed three additional affidavits, the last was filed on 27 March 2020, four clear days prior to the resumption of the adjourned hearing. As the hearing had commenced on 28 February 2020 the defendant would require a grant of leave to rely upon its content. Leave was opposed. Because of the nature of the application and the view that I expressed at the conclusion of the hearing on 1 April 2020, not wishing to unnecessarily disadvantage the defendant, I will allow it into evidence.
By his first affidavit sworn 2 December 2019, on the basis of the content of the plaintiff's records the liquidator deposes to the truth of the material facts pleaded. He attaches copies of the loan agreements, the letters of demand issued by him and also those issued by the plaintiff's solicitors.
According to the terms of each agreement the interest rate applicable to each loan is a particular rate specified by the Reserve Bank of Australia. The deponent attaches to the affidavit:
A true copy of an extract of the Reserve Bank of Australia (RBA) Benchmark Interest Rates - Bank Variable Housing Loan published by the RBA which identifies the interest rates pleaded in … the Statement of Claim.
The relief sought by the plaintiff in the action is put at pars 11 and 12 of the affidavit as follows:
11.As at 29 November 2019, the defendant is indebted to the Plaintiff under the First Loan Agreement in the sum of $277,087.01, comprising:
(a)$250,871.00 being the First Principal Sum Owing (as that term is defined in the Statement of Claim) under the First Loan Agreement;
(b)$13,120.55, being interest accrued on the First Principal Sum Owing from 1 July 2017 to 30 June 2018; and
(c)$13,095.46 being interest accrued on the First Principal Sum Owing from 1 July 2018 to 30 June 2019.
12.As at 29 November 2019, the Defendant is indebted to the Plaintiff under the Second Loan Agreement in the sum of $237,438.78, comprising:
(a)$214,974, being the Second Principal Sum Owing (as that term is defined in the Statement of Claim) under the Second Loan Agreement;
(b)$11,243.14, being interest accrued on the Second Principal Sum Owing from 1 July 2017 to 30 June 2018; and
(c)$11,221.64, being interest accrued on the Second Principal Sum Owing from 1 July 2018 to 30 June 2019.
The defendant accepts those figures.
By his affidavit sworn 17 February 2020 the defendant deposes to his directorship of the plaintiff over the relevant period of time. Under the heading 'Repayments under the loan agreements in financial year ending June 2017' in part he deposes as follows:
38.The Plaintiff correctly asserts in paragraph 10 of the Claim, that between 30 June 2016 and 30 June 2017, I made payments to the Plaintiff such that the amount of the consolidated loan in respect of the First Loan Agreement was reduced from $314,508.00 to $250,871.00 (the First Loan Repayments).
39.The Plaintiff correctly asserts in paragraph 11 of the Claim (albeit that erroneously refers to the 'First Loan Agreement'), that between 30 June 2016 and 30 June 2017 I made payments to the Plaintiff such that the amount of the consolidated loan in respect of the Second Loan Agreement was reduced from $245,000.00 to $214,974.00 (the Second Loan Repayments).
40.…
Under the heading 'Plaintiff has not has not Consolidated Loan Accounts After YEJ17', the defendant deposes as follows:
41.As a Director of the Plaintiff, it was usual practice to consolidate loan accounts as part of the preparation of the end of financial year tax returns and I did so for both the Loan Agreements for the YEJ17.
42.As Director of the Plaintiff, I arranged for the preparation of the YEJ17 annual tax returns which were lodged by Aylmore & Associates as the Plaintiff's registered tax accountants.
43.On 15 January 2019, the Plaintiff was placed into liquidation (Liquidation Date) and Mr Malcolm Field was appointed as liquidator (Liquidator).
44.Up until the Liquidation Date, it was my intention and consistent with my usual practice as Director of the Plaintiff, to file annual tax returns for the YEJ18 and YEJ19 financial years (Outstanding Returns).
45.At the Liquidation Date, the annual tax returns for the year ending June 2018 (YEJ18) and the year ending June 2019 (YEJ19) financial years were still outstanding and due to be prepared and lodged.
Under the heading 'Repayments under the loan agreements in subsequent financial years', the defendant deposes as follows:
46.I verily believe it to be true that the Plaintiff has not filed annual tax returns for either or both the YEJ18 and the YEJ19 financial years and has therefore not appropriately accounted for reductions in the consolidated loans under the Loan Agreements between 1 July 2017 and the Liquidation Date.
47.I verily believe it to be true that the Outstanding Returns, if they are prepared, will show that there is no breach by the relevant borrower, that no amounts are owing under the Loan Agreements and that the Plaintiff is in fact indebted to myself and the Trust, in part for unpaid Services as deposed to at paragraphs 5 to 32 above.
48.Should the matter proceed to trial, I intend to provide witness evidence from both Mr David Aylmore of Aylmore & Associates and Ms Stevenson who has performed ad hoc bookkeeping duties for myself and the Plaintiff, in support of my defence to the Claim.
The term 'consolidated loan' reflects terminology that appears in the statement of claim and in each agreement.
Although the heading that precedes pars 46 - 48 suggests that repayments had been made in each of the financial years ending 30 June 2018 and 30 June 2019, there is no evidence either under that heading or elsewhere in any of the defendant's affidavits of any payment being made under either agreement other than in the financial year to June 2017.
At par 48 the defendant states his intention to bring evidence at trial from of an accountant and a bookkeeper in support of his defence. To the extent that his defence to the claim would draw upon payment having been made, because the only evidence of payment relates to the financial year to June 2017, I take it that the bookkeeper and accountant would be able to do no more than confirm what had then transpired. The plaintiff pleads that the defendant paid each amount due under each agreement in that period.
According to the terms of each agreement, in the financial year to 30 June 2018 the defendant had been required to pay both a minimum amount of the principal sum outstanding and interest. Despite the content of the affidavit that I have cited, the defendant did not submit that by the date of each demand he had not been in breach of each agreement.
I am satisfied that any proposition that any greater payment has been made under either agreement than has been accounted for by the plaintiff in each case would not be established. Accordingly, the defendant has made no impact upon the plaintiff's case that by the time the letters of demand issued, the defendant had been in breach of each agreement and that the plaintiff had then been entitled to demand repayment of the balance of the principal sums owing and interest then due.
Before moving on to consider other aspects of the defendant's case I will consider what bearing the evidence that I have cited has on the clarity of each case put by the plaintiff.
The prospect that no amount is presently due to the plaintiff would rest on the proposition that had the defendant followed his usual practice the plaintiff would have consolidated the loan accounts. Thereby it would account for 'reductions in the consolidated loans'. That practice is part of the process of the plaintiff preparing its tax returns.
The evidence of the defendant's practice is limited to the timing of the particular activity. It gives no insight into the process by which the plaintiff would account reductions in the consolidated loans. There being no evidence to the contrary, it is irresistible that the plaintiff would keep a record of payments received in any financial year to enable such accounting. It is open to consider that a process to the end of accounting for reductions in the consolidated loans could be undertaken other than at a time determined by the defendant's usual practice. Accordingly, it is unclear whether any particular significance ought to attach to the fact that the returns for the particular years have not been generated.
But for one part of his evidence that relates to another feature of his opposition to the application, the defendant provides no evidence that suggests he would have any difficulty in presenting evidence of relevant payments. That instance is at par 34 of his affidavit dated 27 March 2020 where he states as follows:
… I do not have access to the Plaintiff's financial accounts for the last two financial years because I do not have online banking access.
Whatever the actual disadvantage portrayed by that evidence may be, there is no evidence that suggests that the defendant's only evidentiary resource would be some record of the plaintiff. Taking into account the terms of pars 38 and 39 by which he accepts figures put by the plaintiff that relate to the financial year to June 2017, there is at least a reasonable prospect that the defendant has kept his own record of payments.
Taking into account not only the quantum of those payments but also the measure of default asserted by the plaintiff in the subsequent years, in my opinion it would be more likely than not that the defendant would at least remember some detail relating to any payment made. For the same reason, in making any payment it is likely that the defendant utilised the services of a third party and that he would be in a position to obtain access to its records. Had the payments due been made from a reserve of cash, human nature would suggest that it is likely that the defendant would have made and kept a record.
The defendant was at liberty to address the claims put against him in the application as he chose. The opportunity for the defendant to respond to the application was clearly expressed and he has filed four affidavits. On at least each of those occasions he reflected upon the sufficiency of the case that he would put in response. In my opinion in such circumstances it ought to be difficult for the court to justify drawing any inference favourable to the defendant.
In my opinion the quantum of the amounts payable provide scope to draw inferences adverse to the defendant. If the defendant had not kept a record of any payment and does not remember any detail I am satisfied that the quantum of the payments due would render more likely the prospect that he had utilised a third party for the purpose and he would have access to its records. The defendant has chosen not to give evidence of payments that he suggests have been made.
Scope for perceiving any want of clarity in the context established by the application emerges from the manner in which the defendant has given evidence. Evidence that he has not harnessed to any submission put against the plaintiff's claims.
To this point, I have not referred to the content of par 40 of the defendant's affidavit of 17 February 2020 where with reference to payments made in the financial year to June 2017 the defendant deposes as follows:
40.However, the Second Loan Repayments were made by me in my capacity as a Director of the Trustee and on behalf of the Trust and not in the capacity of the trustee of the Trust, as alleged by the Plaintiff in the Claim.
Putting aside the fact that the plaintiff simply alleges that the defendant made payments to the plaintiff, that evidence is a facet of a broader case that the evidence suggests: that Talos Mining Pty Ltd is the party liable under the second loan agreement.
According to the copy of the relevant loan agreement attached to the plaintiff's affidavit, the borrower is Talos Mining Trust. The words 'Signed by/for and on behalf of the borrower' are printed above the defendant's signature as borrower. Under his signature are printed his name and the designation 'Trustee'.
By his affidavit of 17 February 2020 the defendant deposes as follows:
33.The Plaintiff asserts in Item 3 of the Plaintiff's Statement of Claim filed 2 July 2019 (Claim), that I am the trustee of the Talos Mining Trust (Trust).
34.This is not correct. I have never been a trustee of the Trust, instead, I am a Director of the trustee of the Trust, namely Talos Mining Pty Ltd (Trustee): …
35.The Plaintiff alleges at paragraph 5 of the Claim that I entered into the following two loan agreements:
35.1.….
and
35.2.The second being between the Plaintiff as lender and myself in the capacity as trustee of the Trust, as borrower …
36.This is not correct. Instead, I entered into the following two loan agreements (together, Loan Agreements) in writing with the Plaintiff, both dated 30 June 2016 as follows:
36.1.…
36.2.The Second Loan Agreement (Second Loan Agreement) was between the Plaintiff as the lender and the Trustee on behalf of the Trust. I signed the agreement in my capacity as a Director of the Trustee.
37.I am not and have never been a trustee of the Trust and I did not enter into the Second Loan Agreement in the capacity of trustee of the Trust.
In his affidavit of 27 March 2020 he continues as follows:
5.Further to the evidence I have provided in paragraphs 33 to 37 of my Source Affidavit [17 February 2020] pertaining to my relationship with Talos Mining Trust and the Second Loan Agreement, I provide the following additional evidence:
6.On 30 June 2016 Talos Mining Pty Ltd (Trustee) as trustee for the Talos Mining Trust (Trust) entered into the Second Loan Agreement.
7.I signed the Second Loan Agreement and under my signature it states 'Russell Harold Moran - Trustee'.
8.The Plaintiff's accountant prepared the Second Loan Agreement and I intend to provide evidence at trial that:
8.1the intent at the time of execution of the Second Loan Agreement was that I was signing on behalf of the Trustee, because I am a Director of the Trustee;
and
8.2I am not capable of signing the Second Loan Agreement as the trustee in my personal capacity because the Trust deed states that the trustee of the Trust is Talos Mining Pty Ltd.
Although the passages that I have cited suggest that at the time that the defendant signed the agreement as borrower he did so as director of the trustee, the defendant brings no such evidence.
It may be considered that the content of the passages would provide scope to draw an inference that when the defendant so signed the agreement he did so for and on behalf of Talos Mining Pty Ltd. In the process of considering whether to draw any such inference it would be appropriate to reflect upon the fact that it had been open to the defendant to give unequivocal evidence of his intention at the particular time and the proposition that he would have the capacity to provide some evidence consistent with such intent.
As the terms of the agreement would only be engaged upon an advance under the agreement, had both parties been aware that the defendant had signed the agreement in his capacity as director of the trustee prior to any such advance, a course open to them would have been to revisit the process of execution of the agreement to ensure that the record reflected that he had done so. There is nothing to indicate that the parties had been so engaged.
After the advance was made, the defendant could only be released from the agreement by the plaintiff. If upon any such release the advance would remain a loan, usual business practice would dictate that some other party would be substituted in the role from which the defendant would be released. There is no evidence that the parties engaged in any such process or of the engagement of any other party.
Being the director of the plaintiff, the defendant would be aware of the existence of any record held by the plaintiff that relates to the advance. Upon his receipt of each letter of demand the defendant would have been prompted to consider that record. Had there been some feature that would establish his release, it is likely that he would have drawn it to the plaintiff's attention. There is no evidence to suggest that he then made contact with the plaintiff.

Otherwise the scope of evidence relevant to the advance would extend from the instructions provided by the plaintiff to its accountant for preparation of the agreement to the issue of the writ.
Being the director of Talos Mining Pty Ltd the defendant would have access to its record of the transaction. That record would extend from any recording of its liability to the plaintiff to the defendant's receipt of each letter of demand and may include references to the payments due to the plaintiff in the financial year to June 2017; that the defendant had made those payments on its behalf; that it owed the amount of each such payment to the defendant; and its receipt of the amount advanced.
Events to which the defendant has not deposed that I am satisfied did actually occur within that period were his receipt of the advance; his disposition of the amount advanced; the events or circumstances that resulted in payment by him rather than Talos Mining Pty Ltd of each amount due to the plaintiff in the financial year to June 2017; the instructions provided by the plaintiff to its accountant relating to 'reductions in the consolidated loan' in the financial year to June 2017; and from time to time deciding not to then either institute or engage in the process of generating tax returns in the financial years to June 2018 and to June 2019.
In my opinion the defendant had resources available to him upon which he could draw for support had he wanted to do more than suggest that Talos Mining Pty Ltd was liable to the plaintiff under the second loan agreement. It is open to infer that by the content of the passages that I have cited the defendant intended to do no more than suggest that Talos Mining Pty Ltd was liable to the plaintiff under the second loan agreement.
Be that as it may, the only reason for drawing any such inference would be to remedy the defendant's failure to support a submission that Talos Mining Pty Ltd is the party liable under the second loan agreement. No such submission was made by the defendant.
The passages may also be taken to suggest the proposition that because the agreement specified the Talos Mining Trust as the borrower and the defendant was the director of the trustee of the trust, when he signed the agreement, he would have done so for and on behalf of the trustee.
From the perspective of the defendant that proposition may engage some logic however there is no evidence that the plaintiff had been aware that the defendant had then been the director of the trustee of the trust; indeed there is no evidence that it was aware of the existence of Talos Mining Pty Ltd.
Whether within the context established by the application the plaintiff has established a sufficiently clear case to allow for an exercise of discretion in its favour involves reflection upon each case pleaded by the plaintiff, the content of its affidavit and that of each affidavit of the defendant.
Despite the fact that the plaintiff pleads that the defendant is the trustee of the trust, at the hearing the plaintiff accepted that was not the case. In effect it abandons an allegation of material fact and I take it that it does so because, for the purposes of the application, it accepts the defendant's evidence that Talos Mining Pty Ltd, not the defendant is the trustee of the trust. The plaintiff relies on the allegations that the defendant had signed the agreement as borrower and that it loaned him the advance.
I take it that the printing to which I have referred appeared on the agreement prior to its execution by the defendant. There is no evidence that would suggest that in following the plaintiff's instructions the accountant had made any mistake. In the circumstances, it is likely that the plaintiff had instructed its accountant that the defendant was the trustee of the trust. As it is likely that the instruction had been given by the defendant perhaps neither the defendant nor the plaintiff had then been aware that the defendant had not then been the trustee of the trust.
It is reasonable to consider that the defendant did read the agreement as it was for the benefit of the plaintiff and he did execute the agreement on behalf of the plaintiff.
As the borrower that the plaintiff designated in the agreement is not a legal entity and the amount it loaned having been $245,000, it is open to consider that the identity of the party making the commitment to repayment would have some significance for the plaintiff. At the time the loan was advanced the defendant had been engaged by the plaintiff to the end of it earning significant income. The financial strength of Talos Mining Pty Ltd revealed to the court is that it operates at least as trustee of the Talos Mining Trust and has minimal 'paid-up' capital. Whether at the time the advance was provided the plaintiff had been aware of the existence of Talos Mining Pty Ltd there is no evidence. I take it to be the case that the plaintiff had been prepared to advance each loan to the defendant and thereby had satisfied itself that he had the financial resources to meet the commitments generated by the advances made under each agreement.
The fact that the obligations generated by an advance to the trust do not attach to the beneficiaries of the trust, but rather to the trustee would allow for the perception that the plaintiff had appreciated that upon a loan being provided under the agreement, the benefit would be immediately detached from the obligations created under the agreement. However, such an appreciation would not necessarily convey that the plaintiff had been interested to ensure that the beneficiaries of Talos Mining Trust did actually benefit from the advance. By designating the trust as the borrower the plaintiff could not achieve that result because a trust is not an entity. There is nothing within the terms of the agreement and otherwise there is no evidence to suggest that the plaintiff had any greater interest in the location of the benefit than would any commercial lender.
Talos Mining Pty Ltd is the legal entity responsible to the settlor of the Talos Mining Trust for administering the trust according to the terms of the deed by which it is established. Had the defendant received the amount loaned by the plaintiff in his capacity as director of Talos Mining Pty Ltd then at least as between Talos Mining Pty Ltd and each of the settlor, the defendant and the beneficiaries it would be responsible for accounting for that fund.
There is no evidence of receipt by Talos Mining Pty Ltd or of any such accounting. I am satisfied that the defendant would be aware of the existence of any such record. It would be in the interests of the defendant to produce such a record.
The defendant does not provide any record of Talos Mining Pty Ltd that would reflect the proposition that it is liable to the plaintiff.
The defendant does not explain the reason for making the payments due under the agreement on behalf of the trust in the financial year to June 2017. He provides no evidence of either the financial strength of Talos Mining Pty Ltd at the time that he made those payments or that Talos Mining Pty Ltd is aware that he made the payments due under the agreement on its behalf.
At par 48 the defendant states his intention to bring evidence at trial from of an accountant and a bookkeeper in support of his defence. That evidence suggests that the defendant had turned his mind to matters to which each potential witness could depose although he does not disclose any particular evidence each would bring.
The obligations owed to the plaintiff were established by execution of the agreement by the defendant and became operative upon the advance being made. There is neither evidence that when he signed the agreement as borrower the defendant did so as director of Talos Mining Pty Ltd nor that the plaintiff had released him from his obligations under the agreement.
The operative part of the agreement is as follows:
The Lender and Borrower agree that if the Borrower borrows any money from the Lender under this agreement, it will be on the following terms:
A significant feature of the agreement is that the borrower agrees that any advance made under the agreement is a loan. The defendant does not contest that on the date that he executed the agreement, under the agreement the plaintiff advanced $245,000 to him.
Ultimately it is open to consider that the agreement produced to the court speaks for itself. The parties to the agreement recorded their agreement by the process of execution of the agreement. Regardless the locus of any benefit provided by the advance, the defendant accepted the obligations generated by the advance under the terms of the agreement.
Taking into account the agreement produced in the application; that there is no evidence of any particular information having otherwise been conveyed to the plaintiff; and the addressee of the letters of demand, it is open to consider that the plaintiff had not been aware of the defendant's contention until it received his affidavit dated 17 February 2020, some 3 ½ years after the event; and significantly, after the plaintiff had commenced proceedings upon the cause.
At the conclusion of the hearing on 1 April 2020, in reflecting upon the defendant's case I was sufficiently challenged by what I then perceived his case to be, to consider whether it would be appropriate to impose a condition upon any leave to defend. For that reason I ordered that the defendant file an affidavit of his means. My reasoning was that it would not be appropriate for the court to impose a condition unless satisfied that the defendant could comply. The response of the defendant is to the effect that his means are irrelevant to a determination of the issues in the application. Although not represented by a solicitor the defendant has engaged the services of a barrister for the hearing and I am satisfied that in reporting to her client, counsel would have informed the defendant of the purpose for which the evidence had been required.
Having embarked upon the task of preparing written reasons for disposal of the application I find myself in a position where the plaintiff's case has been rendered more clearly. A significant reason for that result is that having re-read the transcript of the defendant's submissions it is now apparent that he neither submitted that payments had been made in the financial years to June 2018 and June 2019 nor that Talos Mining Pty Ltd was the party liable under the second loan agreement. In my opinion each case brought by the plaintiff in the action is sufficient to allow for judgment to be entered against the defendant.
I will move on to consider what may be characterised as a series of cross‑claims that the defendant would put against the plaintiff upon which he relies to avoid interlocutory judgment being entered against him.
The first is that the defendant undertook work on behalf of the plaintiff for which he has not been paid. The claim draws upon evidence that discloses the business of the plaintiff, and the work undertaken by the defendant.
In his affidavit of 17 February 2020 the defendant specifies the services for which typically the plaintiff would charge its clients between $1,200 ‑ $1,300 per day as follows:
7.1.providing executive function to the Clients and performing commercial and administrative services and tasks;
7.2.assuming and exercising the powers and perform the duties from time to time vested in or assigned to me by the Clients or any officer or employee authorised by it for that purpose;
7.3.faithfully serving the Clients and using best endeavours to promote their interest and welfare; and
7.4.devoting sufficient time and attention to the business of the Clients during the normal working hours and at such other times as may be reasonably necessary.
He also specifies some 'specific tasks and director duty tasks in performing the services' for which the plaintiff would charge its clients $3,000 - $4,000 per month as follows:
8.1.assisting in the management of the business of the Clients including, without limitation, implementing strategic and tactical plans and managing operational functions to achieve their goals and outcomes;
8.2.reviewing and initiating continuous improvement in support and administrative functions;
8.3.implementing employment policies and development of an effective and valued performance management framework;
8.4.using best endeavours to achieve the corporate objectives of the Clients;
8.5.performing services and using best endeavours to ensure that the business of the Clients is conducted in accordance with their policies, procedures and/or directions, and in accordance with the requirements of any approved budget or business plan;
8.6.complying with the reasonable directions of the Board of the Clients from time to time including to undertake any activity for their benefit;
8.7.formulating strategies to promote and improve the financial performance of the Clients;
8.8.advising the Board in relation to all relevant issues affecting the Clients and its performance, including relevant corporate governance and risk issues;
8.9.ensuring the proper implementation of the Clients' policies, procedures and systems;
8.10.developing new opportunities and expanding the Clients' current activities and market share; and
8.11.reviewing and initiating continuous improvement in support and administrative functions.
The defendant adds that where provision of the latter category of tasks was coextensive with the former, then the charge for the latter may be in addition to the charge for the former.
At pars 12 - 14 of his affidavit, the defendant states:
12.The payment for my Services was rendered directly from the respective Client to the Plaintiff's account, for the respective Services which I provided, following the issuing of an invoice by the Plaintiff.
13.In return for rendering the Services to the Clients, I would be paid by the Plaintiff in accordance with an agreement with the Plaintiff. I did not receive the moneys for the Services, or any part thereof, from the Clients.
14.The Services would often be provided to the Client under a formal engagement letter or contract, but this was not always the case. Either way, it was usual practice for the Plaintiff to pay me for providing the Services, regardless of the form of the particular agreement with the Client.
Under a heading 'Unpaid Consulting Services Provided to MetalsTech Limited', at pars 15 - 18 of his affidavit the defendant deposes to the provision of services to that entity. The particular services are characterised as those in par 8 of the affidavit and he deposes that on the basis of information received from the company secretary and chief financial officer of MetalsTech Limited, the plaintiff was paid an approximate amount of $364,380 over a period of the financial years to June 2018 and June 2019.
At par 17 he states:
To date, I have received some, but not all payments from the Plaintiff for the Services which I rendered pursuant to the MetalsTech agreement.
At pars 19 - 29 inclusive under the heading 'Unpaid Consulting Services Provided to 3G Coal Limited', the defendant gives similar evidence in relation to a client of the plaintiff named as 3G Coal Limited.
At par 26 he deposes as follows:
I verily believe that the Plaintiff is entitled to invoice 3G Coal in relation to the Services during the YEJ18 and YEJ19 financial years in the sum of up to $165,500, and has not done so as at the Liquidation Date.
At par 28 he deposes as follows:
However, to date, I have not received payment from the Plaintiff either wholly or in part for the Director Services or the Consultancy Services rendered pursuant to the 3G Coal Agreement for the period of YEJ18 and YEJ19 financial years up until the Liquidation Date.
Under the heading 'Unpaid Consulting Services Provided to Zinciferous Limited', the plaintiff gives similar evidence of the provision of services by the plaintiff to Zinciferous Limited to the value of approximately $36,000 and deposes at par 31 as follows:
I have not been paid by the Plaintiff either wholly or in part to date.
In his affidavit of 27 March 2018 the defendant deposes to matters of a financial nature that bear upon the evidence given in his affidavit of 17 February 2020 relating to unpaid consultancy fees. The evidence is inconclusive because there is no evidence at all that relates to the defendant's entitlement vis-a-vis the plaintiff and particularly, whether any entitlement would accrue to the defendant in relation to services that have not been invoiced by the plaintiff and paid by its client.
Whilst it is open to consider that the defendant has an entitlement to be paid by the plaintiff for services rendered by the defendant to its clients, any claim based on such an entitlement would be established by the terms on which the plaintiff had so engaged the defendant. The defendant carries the evidentiary onus to found the submission that he presently has any entitlement to payment. The agreement with the plaintiff to which the defendant refers would be fundamental to the defendant establishing any entitlement to payment. There is no evidence of the agreement or of the reason for the defendant's failure to provide such evidence.
The second cross‑claim is for a loan or loans made by the defendant to the plaintiff in a context where the plaintiff had been obliged to pay particular legal fees and the defendant paid those fees on its behalf.
The evidence is provided at pars 49 - 61 of his affidavit of 17 February 2020. Under the heading 'Federal Court Proceedings and Loans to the Plaintiff' the defendant deposes that from around October 2015 the plaintiff, the defendant, Mr Gino D'Anna, BC Anthracite NL and an unspecified overseas subsidiary of BC Anthracite NL had been co‑defendants in proceedings in the Federal Court that were concerned with a claim by Atrum Coal Limited for breach of an implied non‑compete arrangement pertaining to certain coal exploration licences in British Columbia, Canada. In those proceedings the plaintiff had been represented by Lawfirst Pty Ltd and he provided security for the costs of that representation upon which Lawfirst Pty Ltd had realised when the proceedings were settled in or around July 2016.
The defendant gives evidence of an agreement with his fellow defendants under which he would provide a loan for payment of legal fees. By the terms of that agreement the plaintiff and BC Anthracite NL are responsible for repayment of the loan to the defendant. In that affidavit the defendant deposes that in effect repayment is not now due.
After the plaintiff lodged submissions on 25 February 2020 in which it raised the issue as to whether repayment is now due, on 28 February 2020 the defendant filed an affidavit in which he deposed that he was one of three people engaged in a conversation that occurred after the Federal Court proceedings had been concluded during which it had been agreed that repayment of the loan was due.
The defendant does not give evidence of the capacity in which he had engaged in that conversation.
The next cross‑claim is for money due to the defendant by the plaintiff for various personal loans that are associated with what I take to be the same Federal Court proceedings.
In his affidavit of 17 February 2020 the defendant deposes:
59.In addition, in my personal capacity, I provided a series of further loans to the Plaintiff including for the purpose of funding additional legal expenses associated with defending the Federal Proceedings (Personal Loans).
60.In my capacity as Director of the Trustee and on behalf of the Trust, I provided significant loan funds to the Plaintiff, including for the purpose of funding legal expenses associated with defending the Federal Proceedings (Trust Loans).
61.Neither the Legal Fees Loan Agreement, the Personal Loans nor the Trust Loans have been repaid to date and no repayments have been made to me by the Plaintiff towards any of these loans.

The defendant offers no detail of the amount of any such loan, the date upon which it was made, the terms upon which it is repayable and whether repayment is due.
The defendant deposes at par 34 of his affidavit of 27 March 2020 that the advances made:
… would be in the order of $30,000 to $50,000 however more specific estimation is difficult because I do not have access to the Plaintiff's financial accounts for the last two financial years because I do not have online banking access.
It is open to consider that funds of the magnitude indicated, even over a series of transactions, would have been advanced other than by means of cash; in which event the defendant would be likely to have access to his own banking records and in all likelihood, those of a third party.
In his affidavit sworn 27 February 2020 the defendant deposes to the fact that he has not filed a proof of debt. That statement brings me to an observation that applies to each of the cross‑claims. In my opinion as much as the liquidation of the plaintiff would preclude the court from setting off any amount found to be owing to the defendant by the plaintiff; in the context of the application it would preclude the result that judgment in favour of the plaintiff be withheld pending determination of any cross‑claim. It is for the defendant rather to file a proof of debt, so that the liquidator can rank any such debt considered to be owing by the plaintiff to the defendant, to ensure that to the extent of any amount claimed by the defendant, he does not receive a preference.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
DH
Court Officer
1 JULY 2020