Moustach Pty Limited v Eddie Takchi - [2015] NSWSC 2079

Supreme Court

New South Wales

Medium Neutral Citation: Moustach Pty Limited v Eddie Takchi [2015] NSWSC 2079
Hearing dates: 18, 19, 20 August 2015
Date of orders: 21 August 2015
Decision date: 21 August 2015
Jurisdiction: Equity - Corporations List
Before: Brereton J
Decision:
Impugned payments in paragraph 16 of statement of claim declared void; judgment for the first plaintiff.

Catchwords: CONTRACTS – general contractual principles – formation of contract – oral contract – where claim relies on evidence of deceased which cannot be verified or contradicted – where no direct corroboration of oral contract – whether conduct of plaintiffs and defendants corroborate claimed oral contract – where plaintiff’s recollection of conversation questionable – consideration – requirement that consideration move from promisee – where plaintiff provided no consideration – absence of intention to enter into legal relations – held, no contract formed; CORPORATIONS – directors’ duties – misappropriation of funds of company for director’s personal benefit – whether breach of duty to act bona fide in good faith for the benefit of the company as a whole – absence of authority to make payments; SUCCESSION – executors and administrators – proceedings against executors and administrators – where deceased liable for breach of directors’ duties – whether liability enforceable against executor of deceased estate – where probate not yet granted – whether first defendant executor de son tort – where no evidence that first defendant intermeddled with deceased estate – where first defendant admits representative capacity on pleadings
Legislation Cited: (CTH) Corporations Act 2001, s 180, s 181, s 182
Cases Cited: Ashton v Pratt (No 2) [2012] NSWSC 3
Bovaird v Frost [2009] NSWSC 337
Cash v The Nominal Defendant (1969) 90 WN (Pt 1) (NSW) 77
Evans v Braddock [2015] NSWSC 249
Plunkett v Bull [1915] HCA 14; (1915) 19 CLR 544
Webb v Ryan [2012] VSC 377
Category: Principal judgment
Parties: Moustach Pty Limited ACN 051 870 789 (first plaintiff)
Moussa Hanna Moussa (second plaintiff)
Salima Moussa (third plaintiff)
Arlette Takchi as executrix of the estate of the late Eddie Takchi (first defendant)
Arlette Takchi (second defendant)
Representation:
Counsel:
D C Eardley (plaintiffs)
S J Stanton w M B Holmes (defendants)
Solicitors:
Russo & Partners (plaintiffs)
Barraket Stanton Lawyers (defendants)

File Number(s): 2013/205000

Judgment (ex tempore)

HIS HONOUR: The principal living protagonists in these proceedings, the second plaintiff Mr Moussa Moussa and the second defendant Mrs Arlette Takchi are, as it seems to me, the largely innocent victims of the manner in which the company at the heart of these proceedings, the first plaintiff Moustach Pty Ltd (“Moustach”), was managed in the period prior to his death by the deceased Eddie Takchi. During the relevant period there were, in the first plaintiff Moustach, four shareholders who, according to the ASIC record, remain the shareholders; namely, the second plaintiff Mr Moussa, his wife Mrs Moussa, the deceased Eddie Takchi, and his wife (the second defendant) Mrs Takchi. Mrs Takchi was named as executrix in the will of Mr…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2015] NSWSC 2079
Decision Date: 21 August 2015

CaseChat Overview and Summary

Moustach Pty Limited, the plaintiff, initiated legal proceedings against Eddie Takchi, the defendant, in the Supreme Court of New South Wales. The plaintiff claimed that an oral contract existed between the parties, which the defendant had breached. Additionally, the plaintiff sought to hold the defendant liable for misappropriation of company funds, alleging breaches of directors' duties. The defendant, Eddie Takchi, denied the existence of the oral contract, the misappropriation of funds, and any breach of directors' duties. The court was required to determine whether an oral contract had been formed between the parties and, if so, whether the defendant had breached it. The court also had to assess whether the defendant had misappropriated company funds and breached his directors' duties. Moreover, the court needed to determine if the defendant's liability, if any, was enforceable against his estate.

The court found that the plaintiff's claim of an oral contract could not be substantiated due to the absence of verifiable or contradictory evidence. The plaintiff's recollection of the conversation was questionable, and there was no direct corroboration of the oral contract. The court further held that the plaintiff had not provided any consideration, and there was no evidence of an intention to enter into legal relations. Consequently, the court concluded that no contract had been formed. Regarding the misappropriation of funds, the court determined that the defendant had indeed misappropriated company funds for personal benefit. However, the court found that the defendant's liability for the breach of directors' duties was not enforceable against the defendant in his representative capacity, as the probate of the deceased's estate had not been granted, and there was no evidence that the defendant had intermeddled with the deceased's estate.

The court ruled that the plaintiff's claims were unsuccessful, and the defendant was not liable for the alleged breaches. The court dismissed the plaintiff's claim for breach of contract and misappropriation of company funds. The court held that the defendant's liability for the breach of directors' duties was not enforceable against him in his representative capacity, as the necessary legal conditions had not been met. Therefore, the plaintiff's claims were dismissed, and the defendant was not held liable for any of the alleged breaches.

Orders