Re Central Stone

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST

S ECI 2022 00674

IN THE MATTER OF CENTRAL STONE PTY LTD (ACN 137 684 514)

MY HIENG TAING (AS TRUSTEE OF THE
MY HIENG TAING FAMILY TRUST)

Plaintiff

MARINTHA LAO

(and others according to the attached Schedule)

Defendants

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JUDGE:	ATTIWILL J
WHERE HELD:	Melbourne
DATE OF HEARING:	15 April, 17 April, 18 April, 22 April, 3 May, 23 May and 28 May 2024
DATE OF JUDGMENT:	24 December 2024
CASE MAY BE CITED AS:	Re Central Stone
MEDIUM NEUTRAL CITATION:	[2024] VSC 822

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CORPORATIONS – Oppression – Company established as special purpose vehicle to carry out property investment project – Where company trustee of a trust – Whether conduct of company’s affairs contrary to the interests of the members as a whole – Whether conduct oppressive or unfairly prejudicial to member – Where plaintiff voluntarily withdrew from participation in management of company – Held oppression established - Corporations Act 2001 (Cth) ss 232, 233.

FIDUCIARY RELATIONSHIP AND DUTIES – Whether the company secretary of the company, who was also a shareholder of the company, owed a fiduciary duty to a shareholder and unitholder – Held no fiduciary relationship existed and no fiduciary duties arose.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D F McAloon	Piper Alderman
For the First and Second Defendants	Mr C R Northrop	Scammell Black Mileo

HIS HONOUR:

INTRODUCTION

This proceeding concerns a dispute between two related families arising from an investment in land.

Central Stone Pty Ltd (the Company) was incorporated by the Taing and Lao families to undertake the acquisition and development of land at 251 Hutton Road, Keysborough (the Land). The plaintiff, My Hieng Taing (My), holds 40% of the shares in the Company. The first and second defendants, Marintha Lao (Marintha) (also referred to as ‘Mal’) and Heng Kim Ou (Kim) (also referred to as ‘Auntie Kim’ and also ‘Ou’), each hold 10% of the shares. The balance of the shares are held by relatives of Marintha and Kim.

The Company is the trustee of the Keysborough Village Unit Trust (the Trust), of which the beneficiaries are the Taing and Lao families in the same proportions as their respective interests in the share capital of the Company. Unless otherwise specified, a reference in these reasons to ‘the defendants’ is a reference to Marintha and Kim.

My contends there has been oppressive conduct by Marintha and Kim in relation to the sale of the Land. In broad terms, she alleges that Marintha and Kim took steps to conceal certain aspects of the transaction (including the sale price) and otherwise improperly caused parts of the sale proceeds to be distributed. On these grounds, My sought the following substantive relief (together with interest and costs) at the trial:

(a)A declaration that Marintha and Kim have conducted the affairs of the Company contrary to the interests of its members as a whole and in a manner oppressive and unfairly prejudicial to My (in her capacity as a member of the Company) pursuant to s 232 of the Corporations Act 2001 (Cth) (Corporations Act).
(b)An order pursuant to s 233(1)(d) of the Corporations Act that Marintha and Kim are to purchase My’s shares in the Company and My’s units in the Trust for a total amount of $1,092,526.53 and in proportions reflecting the amounts specified below as being payable by each of Marintha and Kim, such amount representing the total of:
(i)$800,000.00 to be paid by Kim[1]/Marintha,[2] comprising 40% of $2,000,000.00 (being the quantum of the payment defined in My’s amended points of claim filed on 31 May 2024 as the ‘YHL Payment’);
(ii)$135,058.32 to be paid by Marintha, comprising 40% of $337,645.80 (being the quantum of the payment defined in My’s amended points of claim as the ‘AuDirect Payment’);
(iii)$153,482.73 to be paid by Kim (being the quantum of the funds defined in My’s amended points of claim as the ‘Preserved Funds’); and
(iv)$3,985.48 to be paid by Kim, comprising 40% of $9,963.70 (being the difference between the amounts defined in My’s amended points of claim as the ‘Retained Balance’ and the ‘Preserved Funds’).

(c)Marintha is to pay equitable compensation to My in the sum of $1,092,526.53, which compensation will only be payable by Marintha if, within 45 days of the Court’s order, Marintha and Kim do not complete the purchase of My’s shares in the Company and My’s units in the Trust for a total amount of $1,212,526.53.
[1]If the Court determines that the entry into the YHL Heads of Agreement was oppressive for the purposes of s 232 of the Corporations Act.
[2]If the Court determines that the entry into the YHL Heads of Agreement was not oppressive for the purposes of s 232 of the Corporations Act but that the making of the YHL Payment was oppressive.

WITNESSES AND KEY PERSONS

My gave evidence at trial and also called her brother Huy as a witness. Marintha and Kim both gave evidence in support of their joint defence. All witnesses were cross- examined.

The proper course for the consideration of competing evidence was outlined in 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd,[3] where M Osborne J said:

144.… The more appropriate course in evaluating competing evidence is ‘to place primary emphasis on the objective factual surrounding material and the inherent commercial probabilities, together with the documentation tendered in evidence’, and make ‘inferences drawn from the documentary evidence and known or probable facts’. Such a preference in approach has been stated on many occasions in various judgments of a weighty nature among them that of Lord Goff in Grace Shipping Inc v CF Sharpe & Co (Malaya) Pty Ltd, where in delivering the judgment of the Privy Council, His Lordship endorsed an earlier passage from the House of Lords in Armagas Ltd v Mundogas SA:
Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witness’s motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth …
That observation is, in their Lordships’ opinion, equally apposite in a case where the evidence of the witnesses is likely to be unreliable; and it is to be remembered that in commercial cases, such as the present, there is usually a substantial body of contemporary documentary evidence.[4]
[3](2023) 167 ACSR 401.
[4]Ibid 427–8 [144] (citations omitted).

Chong Huy Taing (Huy)

Huy is My’s brother. He is also the fourth defendant. He was joined as a defendant pursuant to s 24L of the Wrongs Act 1958 (Vic). Huy assisted his father Khay in relation to the Land. Huy was not an impressive witness. First, his recollection of events was very poor. This is understandable, in part, given it related to some events over ten years ago. As Huy said: ‘…that’s quite a while ago’. He could not, however, remember attending a number of important meetings or even what was discussed in general terms. He often said in response to a question that it was too long ago and he cannot recall.

Second, some of his evidence was contradictory. For example, when asked whether the sale of the Land was discussed at meetings, he said he did not think so but then shortly afterwards said they did have meetings at which they discussed the sale of the Land.

Third, I also find that he was deliberately untruthful on a number of occasions. First, he received an email on 1 June 2016 that disclosed that, if it were payable, GST on the sale price of the Land would be $1,000,000. The obvious inference is that the Land was therefore sold for $11,000,000. Confronted with this in cross-examination he said that he was not aware of this as he read the email ‘quickly’. This evidence was deliberately untruthful. It was clear that he had no memory of receiving the email or reading it quickly. He made up this account to address contemporaneous evidence that showed that the sale price of the Land was, in effect, disclosed to him as early as 1 June 2016. He sought to address an obvious flaw in his version of events that he did not know about the sale price of the Land until much later. Second, confronted with why he did not raise the $11 million price for the sale of Land with the Lao family on discovering this in early 2019, Huy said that he made a forensic decision with his father, Khay, not to raise it with the Lao family in order not to ‘rock the boat’. I reject this evidence. It was deliberately untruthful. This is evident from the fact that he did ‘rock the boat’ on other issues. I refer to his email on 17 November 2020 to Marintha which is demanding and confrontational and plainly rocks the boat. Huy’s explanation that this was different to confronting the Lao family about the sale price was implausible and unconvincing. He said that in his email of 17 November 2020 he was really just ‘questioning Mel’. Also, making a simple enquiry about the sale price is not ‘rocking the boat’. Confronted with this in cross-examination, Huy said that it was not raised as ‘the damage was already done already in 2016.’ This does not explain why a simple question about the sale price was not asked if he did not know it. Huy also knew on 14 March 2016 that the Land sold for more than $8 million. I address this later in these reasons.

My Hieng Taing (My)

My is the plaintiff and sues as trustee of the My Hieng Taing Family Trust. My gave unequivocal evidence that she has seen a copy of the trust deed of the My Hieng Taing Family Trust but otherwise does not have a copy of it. She also said that she knows nothing about the terms or operation of the My Hieng Taing Family Trust. She also gave evidence that there is no document that shows that the My Hieng Taing Family Trust actually exists. I find that there is a trust deed as she has seen, and the My Hieng Taing Family Trust exists, but otherwise she does not have a copy. This is a fair reading of her evidence. She was an honest witness. My’s involvement in the relevant events was very limited. My described her role after 2009 as ‘[b]asically nothing’ as she was a ‘silent shareholder’ and a ‘silent investor’. My said that she did attend a meeting of the unitholders of the Trust on 7 August 2012 but no subsequent meetings. My said that she was not given much information but she did receive updates from Khay now and then. My had no involvement in the sale of the Land. My gave evidence that she ‘basically left it all to them [i.e. Khay and Huy] to handle’. This remained the position even after the Land was sold in 2015. My gave evidence that everything was done by either Huy or Khay. As a result, My’s evidence did not advance an understanding of the important factual matters.

Marintha Lao (Marintha)

Marintha is the first defendant. Marintha is Kim’s daughter. Marintha has been a secretary of the Company since 17 July 2015. Marintha has never been a director of the Company. Marintha assisted the Company and Trust from around April 2015. She was the person primarily responsible for effecting transactions on the Company’s bank accounts. She liaised with Bramich Legal about the settlement of the Land in 2016. She was the person responsible for ensuring that if settlement funds were applied to expenses at the Company, those expenses were properly incurred as payable by the Company. On most issues she was an impressive witness, answering questions directly and recalling important events. In stark contrast to this, she was a very unimpressive witness in relation to the YHL Payment. In relation to the YHL Payment her evidence was vague and contradictory. I address this later in these reasons.

Heng Kim Ou (Kim)

Kim is the second defendant. Kim is Marintha’s mother. Kim was a director of the Company in the period 19 May 2014 to 27 June 2015 and was re-appointed and has been a director from 30 April 2019. She has also been an ‘alternate director’ since 17 July 2015. Kim was not an impressive witness. Her account of a purported conversation in early 2016 about the disclosure of the sale price of the Land was deliberately untruthful. I address this later in these reasons. It was clear that she understood questions but had some difficulty in expressing herself as a result of English being her second language. I have taken this into account in assessing her credit. She sometimes did not answer questions directly. She also could also not recall some important events.

Hakly Lao (Hakly)

Marintha’s brother and Kim’s son, Hakly, was a director of the Company between 16 June 2009 and 19 May 2014 and between 1 March 2015 and 30 April 2019. He was also a secretary between 16 June 2019 and 30 April 2019. He holds 20 shares in the Company. He was not called to give evidence at trial. He had substantial involvement in most of the transactions and events that form the subject matter of this proceeding. The defendants informed the Court this was because Hakly suffers from chronic mental health issues which precluded his attendance at trial. Huy gave evidence that Hakly has mental health issues and has had for some time. Kim gave evidence that Hakly has depression, has been in out of hospital and has not been told of these proceedings. Kim gave evidence:

WITNESS: … ---Because when he – he know if court case coming, he got stress, he very, like, can’t do much, and then he start not sleep and he start very, ah, like, just stay in the – the room, and then, ah, he don’t know me and he start not sleep and then I have to call the, ah, case manager to get him to the hospital.

This was addressed by My in closing submissions:

MR McALOON: Now, the role of Hakly in all this is unclear. We had a bizarre, in my submission, situation where evidence about his state of mind or capacity to give evidence was being sought to be adduced from my client’s witnesses during cross-examination, which is entirely unsatisfactory, really. Your Honour has no conventional evidence about his incapacity at all. Just there’s just a complete lacuna as to why he wasn’t here, apart from some references to his variable state of mental health, but Your Honour doesn’t have conventional medical evidence about why he can’t or couldn’t give evidence.
HIS HONOUR: You don’t make anything of that as far as I can tell, really, in relation to any particular …
MR McALOON: Well, we don’t have to, save to say that Your Honour should proceed on the basis that such evidence as he may have been able to give won’t have assisted the defendants.

The following additional exchange then took place:

HIS HONOUR: Yes. That’s right. I’m just asking in relation to Hakly not giving evidence, if you’re going to rely upon that, then I need you to identify with particularity how you rely upon that in relation to any issue in particular that I’m going to decide in the case, that’s all. And all I’m saying is you haven’t done that yet.
MR McALOON: Well, in a sense, we say we haven’t done it because we haven’t needed to.

My did not rely upon Hakly’s non-attendance in relation to any particular issue to be determined.

Khay Taing (Khay)

Khay, My and Huy’s father, also had a substantial involvement in some of the transactions and events concerned in this proceeding. He is deceased, having died on 12 September 2022. Khay and Kim were second cousins in law.

BACKGROUND

Relationship between the parties

The Taing and Lao families over a number of years have, from time to time, jointly engaged in various commercial enterprises, typically in the nature of property development. My is a member of the Taing family. For the most part, the members of the Taing family actively involved in these ventures were Huy and Khay. Marintha and Kim are members of the Lao family. Together with Hakly, Marintha and Kim were closely involved in the management of the families’ investments.

Incorporation of the Company and acquisition of the Land

In early 2009, the Taing and Lao families identified the Land as a potential development site. The Company was then incorporated on 16 June 2009 to carry out the joint investment in the Land. It was agreed that costs associated with the venture would be funded 40% by the Taing family and 60% by the Lao family. Khay was primarily responsible for overseeing the development of the Land on behalf of the Taing family. He was assisted by Huy.

Upon its incorporation, Hakly was appointed as the sole director and secretary of the Company and the share capital was allocated as follows to reflect the agreed proportions between the Taing and Lao families:

(a)My: 40 shares.
(b)Kim: 10 shares.
(c)Marintha: 10 shares.
(d)Hakly: 20 shares.
(e)Sayalin Chea: 10 shares. This is Kim’s sister.
(f)Chheng Hord Lao: 10 shares. This is Kim’s husband.

This remains the shareholding. No member of the Taing family has been a director or secretary of the Company.

On 15 February 2023 the Court was advised of the following (which is recorded in an order in ‘Other Matters’ made that day):

B. The Court has been advised that the first and second defendants will not resist the plaintiff’s claim for an order that one or both of the first and second defendants purchase the plaintiff’s units in the Keysborough Village Unit Trust (KVUT) (such relief being sought at paragraph 3 of the plaintiff’s proposed amended originating process) on the ground that the first and second defendants are not (and never have been) holders of units in the KVUT.
This is set out in the correspondence.

On 27 June 2009, the Company entered into a contract to purchase the Land at a price of $3 million. That contract was executed by Hakly on behalf of the Company.

It was common ground that Hakly operated businesses through various companies which shared the name ‘AuDirect’ and that on 9 November 2010, AuDirect Property Group Pty Ltd (AuDirect Property Group) (initially named Direct Property Investment Group) was incorporated. From its incorporation and at all times until it was deregistered on 1 April 2022, Hakly was the sole director and secretary of AuDirect Property Group. On 6 May 2011, AuDirect Group Pty Ltd (AuDirect) was incorporated. From its incorporation and at all subsequent times Hakly was the sole director and secretary of AuDirect.

On 9 May 2011, Keysborough Village Management Group Pty Ltd (KVMG) was incorporated as a wholly owned subsidiary of AuDirect. Upon its incorporation, Thanh Thao Nguyen was appointed that company’s secretary and sole director. On 18 November 2011, Ms Nguyen ceased to be a director and company secretary, and Sophanary You (also known as ‘Jenny You’) was appointed sole director and company secretary until KVMG was deregistered on 9 October 2016.

On 15 October 2011, AuDirect Property Group issued an invoice to the Company for an amount of $364,750 plus GST for ‘Progress Consulting and Organising Fees for all the works at 251 Hutton Road, Keysborough for the period 1 April 2010 to 31 December 2010’. It issued further invoices on 15 January 2012 and on 15 April 2012 with an identical description of the works but concerning different periods of time.

On 2 July 2012, the Trust was established. The Company was appointed trustee, and the initial unitholders were Hakly as trustee for the LCO 251 Family Trust with 60 units and My as trustee for the ‘My Taing Family Trust’ for 40 units. Under cross- examination, My was pressed as to the terms and existence of the My Taing Family Trust but was unable to explain the terms of the trust or confirm the circumstances of its formation. The defendants submitted this evidence casts doubt on whether such a trust even exists, which they said calls into question the credibility of the Taing family. As I have already said, I find that there is a trust deed as My has seen it, and the My Hieng Taing Family Trust exists.

It was otherwise common ground between the parties that the Taing family held a 40% interest in the Trust and the Lao family held 60% interest in the Trust.

On 6 July 2012, the Company settled the purchase of the Land.

Marketing the Land for sale

On 7 August 2012, there was a meeting of the unitholders of the Trust. The attendees at this meeting included My, and the minutes are signed by Hakly and Huy. Huy gave evidence that he vaguely remembers the meeting. The minutes also record that Ms You was appointed Project Coordinator for KVMG at a fee of $10,000 per month, and that Pointon Partners were appointed to provide legal services in connection with the project. This was the only meeting of the unitholders attended by My and Huy accepted that the interests of the Taing family were thereafter represented by Huy and Khay in connection with the dealings of the Company and the Trust. Khay oversaw the dealings and Huy assisted Khay. My’s involvement was limited to holding the shares in the Company for the family.

Huy gave evidence that Ms You was employed by a company within the ‘AuDirect Group’ and that the group was entitled to be paid for services provided to the Company.

Further meetings of unitholders were held on 5 March 2013 and 12 August 2013, at the latter of which Khay reported that: one investor had expressed interest in the land at a price of $5 million and that negotiations were ongoing with a second investor, with a view to increasing the sale price from $7.5 million to $8 million, and that the commission in relation to this investor was 3%, being $240,000 on $8 million.

On 21 October 2013, Ms You sent an email to Huy, copied to Hakly and Marintha, in which she stated:

Good afternoon Huy,
Your father contacted me earlier advising that William was able to source a buyer for the land at 251 Hutton Road.
Just so there is no confusion on what the offer was (I may have mis-interpreted something he said) do you mind emailing through what they have requested?
Also, your dad asked me to check to see if there will be any GST associated with the sale. I contacted Phil and his understanding is YES . Because Central Stone Pty Ltd is registered for GST then the buyer will be liable to pay . Of course they will be able to claim if back afterwards . But just to be sure Phil will double check and get back to me by tomorrow morning.
In the meantime, please send through the offer so Hakly and Mel can relay it to the other unit-holders and we can discuss it further at the meeting tomorrow evening.
Moving forward, can we please have all communication/offers sent through by yourself on writing? This way ALL unitholders are informed, nothing is left out when relaying messages and there is something for us to refer back to in future .
Thanks Huy.
…

On 21 October 2013, Huy responded to Ms You by email and stated:

Hi Jenny
William has a potential Chinese purchaser.
The price mention is $7Million and is asking if it's including GST? They will pay a deposit now and balance when the permit is finalised. This is all preliminary , we will need to discuss and confirm on what terms we are happy with. Then will advise William and if all OK will meet with the purchaser to confirm all.
…

On 22 October 2013, there was a meeting of the unitholders of the Trust. The minutes are signed by Marintha and Huy. The minutes record a consensus among unitholders that, based on the holding costs and expenses incurred on the Land, along with the comparable sales in the area, a reasonable sale price would be $8 million with a settlement term of 3 to 4 months. The unitholders resolved unanimously for Khay to market the property at $8 million to buyers who were in a position to settle within three to four months, and it was further resolved that in order for the unitholders to consider any offers made they need to be put in writing or, alternatively, at a face to face meeting.

On 29 January 2014, there was a meeting of the unitholders of the Trust. This was common ground. There is are handwritten minutes of the meeting but they are unsigned. Marintha said that the handwriting was that of Ms You. It is a very detailed six page note. Huy said that he could possibly have attended this meeting. Huy had no recollection of it. Huy said it was too long ago. There is also a transcript of the meeting which Huy described as ‘very unusual’. Huy said that he did not remember this meeting but did not state that the meeting was not held or that the minutes are inaccurate. Huy said he accepted the transcript of the meeting on ‘face value’ but that he cannot verify it ‘100 per cent’. The minutes record that Khay informed the unitholders of matters concerning two potential buyers from China who were interested in purchasing the Land and that one potential buyer was currently looking at a price in the vicinity of $8 million with a permit. The minutes also record that the unitholders resolved to keep the commission basis simple and that for a sale price less than $8 million there would be zero commission and for a sale price above $8 million the ‘[r]eferrer’ would retain the difference, being anything above $8 million. Further, the transcript of this meeting recorded the following statement attributed to Huy:

‘Commission for Richard – If is able to sell at $8m then he isn’t entitled to any commission. Whatever price above that he can keep’. Huy gave evidence that the reference to ‘Richard’ is a reference to Richard Wu, who was an agent. Under cross- examination, Huy accepted that this was an accurate document.

On 15 April 2014, Mr Corey (Khoi) Le, an estate agent at The C Real Estate, sent a letter to the Company in which he stated his opinion that a sale price of $6.8 million would be achievable.

On 19 May 2014, Hakly ceased to be a director of the Company, and Kim was appointed a director.

On 18 June 2014, Kim executed a sale authority appointing Sunking Group Pty Ltd in relation to the Land. It provided for a vendor’s price of $7.5 million and recorded an agent’s estimation of the selling price between $7 and $7.5 million. It also provided for the payment of commission calculated as ‘[a]nything above $7.5 million’. The document included an estimated commission of $500,000 (including GST) on an assumed sale price of $8 million. No sale resulted from this appointment.

On 19 June 2014, there was a meeting of the unitholders of the Trust. There are handwritten minutes of this meeting. Marintha gave evidence that the handwriting is that of Ms You. They are not signed but there is no dispute as to their correctness. Those minutes record that the commission for ‘Sunny’, being a reference to the director of Sunking Group Pty Ltd, as ‘anything below $7.5 million - no commission’ and ‘anything above is commission’.

On 25 August 2014, there was a meeting of the unitholders of the Trust. There are handwritten minutes of this meeting. They are not signed. Those minutes record that Kim referred to a commission equivalent to any sale proceeds in excess of $8 million, and subsequently queried whether more commission should be offered in order to entice agents. Huy said that he cannot recall whether the notes were made by Ms You. Huy gave evidence that he was not suggesting that the document was concocted.

On 5 December 2014, the Company received a letter from Gem Management Group Pty Ltd (Gem Management), another entity controlled by the Taing and Lao families. Gem Management was the trustee of the VKK Investments Unit Trust (VKKUT). It had borrowed funds from a third party, Woodlane Pty Ltd (Woodlane), in connection with a separate land development project at 64 Hutton Road, Keysborough (64 Hutton Road). The letter set out terms on which the Company would advance funds to Gem Management. Under cross-examination, Huy accepted that there was a ‘desperate’ need for funds in order to discharge Gem Management’s obligations to Woodlane in order to avoid a mortgagee sale.

On 11 December 2014, there was a meeting of the unitholders of the VKKUT. The minutes record that the loan from Woodlane was initially due for repayment in September 2014 but that an extension was granted until the end of December 2014. It is further recorded that the board had experienced difficulty procuring funding because the VKKUT did not have income and was therefore unable to satisfy prospective lenders of its capacity to service loan repayments. The minutes record that a loan from the Company was identified as the only viable alternative. The board approved and adopted a document titled ‘Heads of Agreement’, which set out terms on which the Company would loan funds to Gem Management (Gem Management HOA).

On 11 December 2014, Gem Management as trustee for the VKKUT and the Company as trustee for the Trust executed the Gem Management HOA. The Gem Management HOA contemplated that the Company would lend Gem Management no more than $9 million to be applied for the sole purpose discharging Gem Management’s obligations to Woodlane. Huy executed the document on behalf of Gem Management and Kim executed it on behalf of the Company.

Huy gave evidence that, at this time, Gem Management was desperate for funds and that the source of the provision of funds by the Company to Gem Management was to be from the proceeds from the sale of the Land.

On 18 January 2015, Hakly ‘executed’ a document titled ‘Heads of Agreement’. My disputed this document. It was also ‘signed and [sealed]’ by Kim. Hakly was not a director at this time, despite the Heads of Agreement recording this. The recitals to that document relevantly stated:

A.This agreement reduces in writing what both parties verbally agreed upon in around early 2015.
B.Hakly grants his full authority as Director of Central Stone to [Kim] to act in his capacity as Director/Alternate Director and/or also as an Agent (‘Which ever required’) to assist with the marketing and sale of 251 Hutton Road $8,000,000.00 AUD to its Unit Holders as agreed.
C.[Kim] agreed to represent Hakly with the marketing and sale of the Property as indicted.
D.Hakly and [Kim] enter into this Heads of Agreement to regulate the rights and obligations towards each other and agree to be bound by the terms and conditions recited therein.

It otherwise had no other terms. My disputed that the Heads of Agreement was entered into on 18 January 2015. I find it was. This is recorded on the document and there is no reason to find that it was not made on that day. It was also signed by Kim.

The defendants produced minutes of a meeting of the members of the Company dated 11 February 2015. My disputed this. Kim gave evidence that she remembers this meeting. Marintha gave evidence that she cannot recall preparing this document. She said she ‘vaguely’ recalls a meeting in February 2015 in which resolutions were passed in the terms of the minutes. She said in cross-examination that she would have handwritten notes of the meeting but subsequently said that she cannot recall exactly. The listed attendees are Hakly, Kim, Sayalin Chea, Chheng Hord, Marintha and Khay (on behalf of My). The minutes of the meeting are signed by Kim only, and record that the members resolved to market the Land for sale at the agreed price of $8 million. Huy said he cannot recall seeing these minutes but also gave evidence that it was a long time ago. Huy said it was unusual not to have a member of the Taing family sign the minutes. Huy said he was ‘questioning’ the minutes. He also referred to their crumpled appearance. The following exchange took place during the cross- examination of Huy:

Mr NORTHROP: Well, can you produce - - -?--- - - - happening on that day. Can you produce such documents that - after Jenny You left - - -?
WITNESS: ---Yep.
Mr NORTHROP: - - - can you produce a document that answers that description?
WITNESS: ---Can I produce?
Mr NORTHROP: Yes. Any documents after Jenny left where the process of preparing minutes and typing them and sending them out was followed?
WITNESS: ---Well, well, the thing is, is that, um, after Jenny left the minutes wasn’t very, wasn’t done very well, I must admit. Ah, we, we - I don’t think that we got minutes or much minutes at all if, if there was. I mean, there could be some but it just wasn’t, yeah. We, we didn’t get much communication or, sorry, minutes.
Mr NORTHROP: You didn’t ask for minutes, did you?---
WITNESS: Well, it should be sent because she’s the project manager. She should have the, um, you know, that, that’s the, that’s the obligation. That’s her job. Her job role is to, you know, do, you know, do what she’s being paid to do, and, and that’s to keep the minutes up to date. But she didn’t do that, so that’s, you know, that’s not right.

My submitted that this minute and the handwritten notes of Marintha made on 16 March 2016 (and on 30 December 2016) must be ‘treated with considerable caution’ and are not an ‘accurate record’. My submitted that she does not submit that the handwritten notes are a ‘false record deliberately done by Marintha’. My submitted that they have a ‘strange self-serving, curated quality about them’. My relied upon there not being any handwritten notes by Marintha concerning the following matters:

(a)the meeting on 11 February 2015;
(b)discussions with YHL Global;
(c)discussions with the director of XPW Investment Consulting Pty Ltd (XPW);
(d)meetings with Mr Wang at the café.

With exception of the meeting on 11 February 2015, Marintha was never asked whether she took notes of meetings of any of these matters. In addition, when challenged on what her practice was in taking notes, Marintha gave the following evidence:

MR McALOON: All right, and what’s the explanation for when you do and when you don’t - - -?
WITNESS: ---I think sometimes, when I’m just sitting there, I just write everything I can, sometimes, if I’m in a hurry, I – I don’t.
MR McALOON: All right?
WITNESS: ---Yep.
MR McALOON: And in relation to 11 February 2015 – I’m going back to that, now – as I understood your evidence a moment ago, you may have a note of that meeting, but you’re not sure?
WITNESS: ---Yeah, I – I can’t recall, exactly.
MR McALOON: All right, and where would that be, if it did exist?
WITNESS: ---Well, it would be together with these ones, but I don’t have the rest of these.
MR McALOON: And where are they?
WITNESS: ---And I can explain, so, basically, after the projects sort of all ceased in either nine – 2019, or 2020, I did put all my notes in Mum’s, um, study room. And our Keysborough office at the time, where all the meetings were also held, ah, we had to move all the files to Mum’s home as well, because we lease that property out, so Mum’s study room has all the documents, all the notes, everything. And at the time, when this sort of matter started arising, I think Mark at the time requested any documents that were – would relate to Central Stone, so what I do recall is that I went through so many folders, so many notes, Jenny’s notes, my notes, my brother’s notes, anything that I could find, and I put them all together for Mark and I dropped it off as his office. And after that, I sort of didn’t focus on it anymore, and I got married, I fell pregnant, I moved houses. And so, this was not on my mind.
MR McALOON: All right. So, as I understand the present position though, to the extent that there was a note of 11 February 2015, we wouldn’t be able to locate it now?
WITNESS: ---Well, I can’t find the rest of these SRs.
MR McALOON: Right?
WITNESS: ---Just there are events in my life that took precedence and - - -

I accept her evidence. It was plausible and cogent. I further address the meeting on 16 March 2016 later in these reasons. I also accept Kim’s evidence and find that the meeting on 15 February 2015 took place and that the minute is an accurate record.

On 1 March 2015, Hakly was re-appointed a director of the Company.

On 13 March 2015, Huy sent an email to Hakly, in which he stated:

Regarding the HK agent for 251 Hutton Road, I asked him what commission he wants before I gave him the price. He said 4-5%! That is quite high, if that is what he wants can I tell him he must get $8m if it’s $7.5m then we can only give him 3%?? What do you think? Please confirm with your mum and advise what your [sic] happy with so I can give him instructions.

Huy gave evidence that the Hong Kong agent did not sell the Land. He also could not remember the name of the Hong Kong agent.

On 27 March 2015, Huy sent an email to Kim to which he attached a document titled ‘Sales Advice’. My disputed the attachment. The document is dated 26 March 2015 and comprises an offer by a person identified as Ms Ruoxi Xie to purchase the Land at a sale price of $7.5 million with settlement 60 days from a permit being approved. It is signed by Ms Xie and authorised by a Ms Rachel Deng. I find the ‘Sales Advice’ was attached to the email. Shortly before this email, Huy and Ms Deng, who was identified as Project Manager of Ausunland Group Ltd, had been in communication concerning an offer in relation to the Land. This offer did not proceed further.

Marintha gave evidence that in around April 2015, Ms You ceased taking handwritten notes of meetings and that Marintha assisted in managing the affairs of the Trust but did not take on the role of Ms You. Marintha gave evidence that after April 2015, formal meetings of with agendas and board packs were no longer being held and formal minutes of meetings were not being prepared.

On 15 April 2015, the Company provided a general sale authority in respect of the Land to a company named ACN 167 288 466 Pty Ltd trading as ‘Ray White Noble Park/Springvale’. The document specifies a vendor’s price of $7.5 million and includes an agent’s estimate of selling price of between $6 million and $6.7 million. It refers to a commission of 3% (including GST).

On 15 May 2015, there was a meeting of the Company attended by Huy, Hakly, Kim and Khay. My disputed this. The only record of this meeting is a handwritten note prepared by Marintha as, by this time, Ms You had ceased her role as project manager. I find it is a record of the meeting. This informality was readily explained by Marintha. Ms You left in April 2015 and no formal board packs or minutes were being prepared. Marintha gave evidence that when she attended a meeting she took a note book and took evidence of the ‘key points’. Marintha gave evidence that her notes record the main points of discussion at the meeting. Huy gave evidence that, after Ms You left, Marintha took over her position, became the project manager and looked after the whole project. Marintha’s notes record that Huy said that a tentative sale process was on foot, with settlement expected to occur on 30 August 2015. The note also records that Hakly was ‘sourcing overseas network to market’ the Land for a price of ‘$8m net’. It also records that Hakly said that the referral fee is ‘anything above $8m if able to sell’. The notes further record that Khay and Kim agreed upon the need to ‘explore all [options]’, and that Khay was continuing to market the Land to Chinese investors.

Huy’s evidence was that he did not accept the note of this meeting as a true and accurate record because it had not been ‘sent to everybody … to … sign off on it’. Huy said that Marintha failed to circulate formal minutes of meetings as Ms You had previously done.

Marintha gave the following evidence concerning her note keeping practices:

WITNESS: ---When I attend a meeting, I bring my, um, my notepad. And I take notes of key - key points.

Under cross-examination, Marintha further explained:

WITNESS: …during that time, I – when I was involved in the three projects, I did carry the – the Filofax with me, yeah, at most meetings if not all meetings.
…
MR McALOON: Well, just on that, you agree with me that the date – there's no date for the meeting in black pen, do you agree with that?
WITNESS: ---Oh, right, yep.
MR McALOON: So, it’s possible that that meeting didn’t happen on 16 March, 2016, do you agree with that?

WITNESS: ---Normally if I attended a meeting on a different day, I would actually either note – note the day, or – so, in this case, I don’t recall whether it, ah, my recollection is a – it would be the same day.

I accept Marintha’s evidence. The reference to ’[r]eferral fee is anything above $8M if able to sell’ is consistent with the YHL Heads of Agreement (as defined below) which records an oral agreement in January 2015 on such terms. It is also consistent with the matters recorded in the minutes of the meeting of the members of the Company on 11 February 2015 at which the members agreed to market the Land for sale at $8 million.

On 26 June 2015, the Company entered into an agreement titled ‘Heads of Agreement’ (YHL Heads of Agreement) with an entity referred to as YHL Global Limited (YHL). My disputed this. The agreement was signed by Hakly in his capacity as a director of the Company and his signature was witnessed by Kim. The Taing family were not informed of the Company’s entry into this agreement and at it was submitted at trial that My did not accept that the date borne on the document was accurate. I accept that it was entered into on 26 June 2015. This is the date of the document. Kim gave evidence that she signed it. The recitals of the YHL Heads of Agreement provided:

A.YHL is in the business of consulting, sourcing, referring and marketing properties across Asia.
B.This agreement reduces in writing what all parties verbally agreed upon around January 2015.
C.All parties agreed for Socheat Cheng: Director of YHL Global, to act as the referral agent to help facilitate the Sale of 251 Hutton Road, Keysborough VIC 3173 ('the Property' ).
D.In consideration of successfully settling the sale of the Property, CS provides YHL with a success fee of anything over $8,000.000.00 AUD$ via a valid tax invoice.
EIn return, YHL agrees to diligently act, conduct, market, refer clients and assist CS and all its representatives where necessary and as requested by CS.
FThis agreement is strictly confidential and not to be disclosed to any other third party unless mutual consent is provided.
GThe parties enter into this Heads of Agreement to regulate the rights and obligations towards each other and agree to be bound by the terms and conditions recited herein.

At the time, Hakly and Kim were the directors of the Company. Kim ceased to be a director the following day.

There are no other express terms of the YHL Heads of Agreement apart from the recitals. Marintha gave evidence that Hakly provided this document to her but she cannot remember when, except that it was before she instructed Bramich Legal to pay $2.3 million from the sale proceeds of the Land to YHL’s nominee, XPW. This is addressed later in this judgment.

In her evidence, Kim stated that she recalled signing the YHL Heads of Agreement somewhere in Australia, and said that Socheat Cheng ‘always do the business [sic] with Hakly up and down Australia and Cambodia’. Kim gave evidence that Mr Cheng is based in Cambodia. Kim gave evidence that Mr Cheng was present when they all signed the YHL Heads of Agreement.

On 2 July 2015 Marintha sent an email to a Mr Bernard Eid to which she attached a copy of the concept plan for the Land, approved by the local council. Later that day, Mr Eid forwarded the email and attachment to a Mr Freddy Wang. Marintha gave evidence she met Mr Wang together with Kim in 2015 and that they had a subsequent meeting with Mr Wang and Mr Eid to discuss matters concerning Land including the works undertaken, the town planning and concept plans. Marintha also referred to a further meeting with Mr Wang at which discussions ensued about the possibility of engaging Mr Wang to act as the Company’s agent. Marintha gave evidence that they discussed a sale price of $10 million. Marintha gave evidence that she never told Mr Wang about the YHL Heads of Agreement. Kim gave evidence that she met with Mr Wang around July 2015 together with Marintha after the YHL Heads of Agreement. She also gave evidence that she mentioned a sale price of $10 million to Mr Wang. She gave evidence that she was told by Hakly to get $10 million prior to meeting with Mr Wang. Kim said that she did not inform Khay of this at that time.

On 17 July 2015, Kim was appointed as an alternate director of the Company in place of Hakly and Marintha was appointed company secretary.

My gave evidence that she did not know Khay was trying to find buyers of the Land prior to August 2015 and was not told about proposals to sell the Land.

On 1 August 2015, the Company entered into an exclusive sale authority with an agent identified as ‘Freddy Realty’ (Wang Exclusive Sale Authority). The Wang Exclusive Sale Authority is signed by Kim and provides for an exclusive authority period of 18 days and a continuing authority period of 14 days. Kim was not a director at this time but was an alternate director. The contact email for the Company is noted as ‘[email protected]’ which is Marintha’s email address. The vendor’s price and agent’s estimate of selling price are $10 million and the commission is described as ‘amount over $10,000,000’. The document includes an estimated commission of $500,000 (including GST) on an assumed sale price of $10.5 million.

Marintha agreed that the prospect of selling the Land for $10m was a significant and important development for the unitholders of the Keysborough Village Unit Trust. Marintha gave evidence that the fact that a vendor's price of $10 million was being sought by the Company was not relayed to any of the Taing family members until after the sale had settled in March 2016.

One week later, on 8 August 2015, Central Property Real Estate Group Pty Ltd trading as ‘Freddy Realty’ issued a receipt recording that Eastar Group Pty Ltd (Eastar Group) had paid a $50,000 deposit into the trust account of Freddy Realty. Freddy Realty has two directors (each also a 50% shareholder), one of whom was a person named Xin Wang (also known by the anglicised name ‘Freddy Wang’). Eastar Group was incorporated on 13 August 2015, some 5 days after Freddy Realty issued a receipt in respect of the deposit purportedly paid by Eastar Group. Upon its incorporation and at all subsequent times, Mr Wang was a director and shareholder of Eastar Group.

On 14 August 2015, Kim and Khay signed a handwritten document which includes Cambodian text, accompanied by an English translation. The English text states that Kim and Khay agreed to sell the Land for ‘$8 Mill with no commission’. Huy gave evidence that Khay only told him about this document many years later, towards the end of 2021. Kim gave evidence that she signed the document with Khay. Kim gave evidence that she did not tell Khay that the ‘asking price’ was $10 million.

On 17 August 2015, the Company and Eastar Group entered into a contract of sale in relation to the Land (Contract of Sale). The particulars of sale specified a price of $11 million with a settlement date of 10 March 2016. The Contract of Sale is signed by Kim on behalf of the Company. Kim is described as a ‘director’ and gave evidence that she must have been the director as she signed the document. Kim said that she was not told about the $11 million sale price before seeing in the Contract of Sale. At the time, Kim was not a director. She had ceased to be a director on 27 June 2015. She was not re-appointed until 30 April 2019. She was, however, an alternate director, having been appointed on 17 July 2015.

Huy gave evidence that it was difficult to find a buyer for the Land. He also gave evidence that he considered $8 million to be a reasonable price.

On 18 August 2015, Marintha sent the Contract of Sale to Mr Eid and to Kim. Mr Eid then sent it to Mr Wang.

Huy gave evidence that he initially learned of the sale of the Land after being informed by Khay that the sale had occurred at a price of $8 million. He could not recall when this was. He said that he was not told of the commission at this time. My gave evidence that she first learned of the sale of the Land for $8 million upon being told so by her father in or around August 2015.

On 4 September 2015, Marintha sent an email to Mr Eid to which she attached a copy of Kim’s passport. The email stated:

Hi Bern,
Please find a copy of Kim’s passport attached as requested. As explained by yourself, we understand that this is necessary to satisfy FIRB’s requirement. Thus, trust it is genuine and will not need to seek further legal advice.
…

Mr Eid forwarded Marintha’s email to Mr Wang on 6 September 2015, and stated:

Hi Freddy,
Please find attached a scanned copy of Kim’s passport.
Can you please send me to the email from FIRB requesting the passport so I can send to Mal and Kim so they are comfortable.
…

Preparations for sale of Land

On 8 September 2015, Freddy Realty issued a receipt to Eastar Group for a sum of $550,000, described as a 5% deposit for the Land.

On 9 November 2015, Freddy Realty issued a further receipt to Easter Group for an additional deposit amount of $660,000.

Huy gave evidence that, by the end of 2015, Gem Management was desperate for funds.

On 13 January 2016, Marintha sent an email to Mr Wang in which she asked him to complete two separate electronic funds transfers in the amounts of $400,000 to the Company and $100,000 to Kim. Marintha could not recall why she asked for these payments to be made.

On 22 January 2016, Freddy Realty released $200,000 from the deposit to the Company. However, Mr Wang was not prepared to release any further amount in excess of $75,000.

Kim gave evidence that she had a telephone conversation with Huy, Hakly and Khay in January or February in which she said words to the effect that ‘the agent can get $11m’:

MR NORTHROP: And when you were in Cambodia, do you recall having a telephone discussion with Khay about 251 Hutton?
WITNESS: ---In Cambodia.
MR NORTHROP: Yes?
WITNESS: ---Yeah, yes, yes. I remember once ah, during first year or around, around January or February, discuss yeah, Huy, Huy and Hakly and Uncle Khay and me together on the phone, discuss about ah, lend the money to VKK that time about to draft agreement or something. Yes, I remember.
Mr NORTHROP: And did you say to him, to Khay anything about the sale of 251 Hutton Road?
WITNESS: ---Ah, when they conference, I did take the phone and I say hi, at the ah, (indistinct), the land in ah, ah, ah, Central Stone, they, the agent can get $11m so like – he say oh.
MR NORTHROP: And is there any reason why you waited for so long to tell Khay about the $11m?
WITNESS: ---Oh, because I am in Cambodia and I never call him so the chance that I can tell him during the conference.

Kim further gave evidence:

MR McALOON: And did I understand your evidence that you were in Cambodia in January or February 2016?
WITNESS: ---Yes.
MR McALOON: And you were on the telephone with Hakly?
WITNESS: ---Sorry?
MR McALOON: You were on a telephone call with other people. Is that the evidence you gave?
WITNESS: ---The telephone call not exactly me and Hakly. Hakly and Huy the telephone call conference.
MR McALOON: So, a telephone – so, were you with Hakly in Cambodia?
WITNESS: ---Yes, I am.
MR McALOON: And you were having a telephone conversation, you and Hakly with someone else who was on the other end of the phone?
WITNESS: ---The telephone Huy and Hakly but during that I am behind and Uncle Khay behind Huy in Cambodia.
MR McALOON: I see. So, there was a telephone - - -?
WITNESS: ---And they are talking and I take the phone from them, I say, “Hello (foreign word) I talk in Cambodia. Our land it can get 11m.
MR McALOON: And you said that to who on your evidence?
WITNESS: ---To Uncle Khay.
MR McALOON: To Uncle Khay?
WITNESS: ---Yeah.
MR McALOON: And prior to then you had not told him that the likely sale price was $11m?
WITNESS: ---Sorry?
MR McALOON: That was the first time you had told him - - -?
WITNESS: ---Yeah.
MR McALOON: --- the sale price would be possibly $11m?
WITNESS: ---Yeah.

Huy gave evidence that Kim never told Khay that the Land was sold for $11 million. Huy gave evidence that in early 2016 he told Khay to talk to Kim and obtain a copy of the Contract of Sale, and that Khay subsequently told him that Kim refused and said it was confidential:

WITNESS: …my, my dad, um, asked Auntie Kim for a copy of the contract. Um, and it was refused because um, it was - she said it was confidential, um, and she can’t release it to my dad. She refused to release it.
Mr McALOON: Yes, and is your evidence that that’s what you were told by your father?
WITNESS: ---Yes.
Mr McALOON: And can you tell His Honour when that conversation between you and your father happened?
WITNESS: ---When it happened, um. It happened - well, it was - I can’t remember the exact day ‘cause it’s such a long time ago but um, it was - it was probably, um, after, after the contract was sold or signed, um. So it was probably about, was it two thousand and - I think it was early 2016, before the settlement at that, that time, yeah.

Huy denied that this evidence was deliberately untruthful. Huy gave evidence that he never personally requested a copy of the Contract of Sale. I address later in these reasons why I find that Kim’s evidence concerning this conversation about the disclosure of the amount of $11 million was deliberately untruthful.

In email correspondence on 3 February 2016, Marintha instructed Mr Wang to arrange the release of an additional $75,000 of the deposit to the Company and then by further email dated 4 February 2016 to pay those funds to her personal bank account with the Commonwealth Bank of Australia (CBA). On 4 February 2016, Freddy Realty released $75,000 from the deposit to the Company. On 16 February 2016, the Company paid $75,000 for a ‘referral fee’ to a ‘Karen Tran’. Marintha was unable to explain this transaction. Marintha accepted that she effected the payment.

On 19 February 2016, the Company engaged Bramich Legal to act in relation to the conveyance of the Land. The following day, Marintha sent an email to Bramich Legal, instructing that firm to prepare a confidential statement of advice. No members of the Taing family were included in this correspondence. The email stated:

Hi Mark,
Sorry to .be bothering you after hours, just thought I would send this to you before I fly out on Sunday (or forget!).
As previously discussed, we will require you to please help draft a letter/statement of advice confirming that you have sighted the particulars of the contract of sale.
It’s purpose is simply to serve as proof to resolve an issue concerning another project, without having to disclose or circulate the actual COS. The purchaser has strictly asked that their details be kept in confidence.
Melanie, I have cc’ed you here FYI as I noticed that Hakly has brought this upon you in the other email.
In this statement, we would need you to please state something along the lines of:
-I act as the solicitor for Central Stone regarding the sale of 251 Hutton Road, Keysborough VIC 3173.
-I confirm that the COS is unconditional and is pending settlement in early March 2016.
-The contract is to remain confidential for the purchaser.
-I can confirm the encumbrance/Mortgage is approximately $1.7M.
-I can confirm the net proceed from the sale less the Mortgage is around $6 - $6.3M (Sale proceed less agent fees and commission will be $8m. Hence $8m less mortgage of $1.7m = $6.3m approximately).

---
Mark/Melanie, we urge you to please let us know via reply all should there be any issues at all with the above.
We will require the above statement to present on Wed, thus if you could help prepare it by Mon/Tues morning, we can review and finalise by COB Tuesday.
Also, we trust that you please reserve the sensitivity of the COS and ensure it is not disclosed to any third parties without our prior consent.
Thanking you in advance.
…

Marintha’s evidence was that Mr Wang had advised her that the purchaser had requested confidentiality. She gave further evidence that the Lao family chose to withhold details of the sale in order to prevent various other persons, including Khay, from jeopardising the sale. Marintha gave the following evidence:

WITNESS: ---But the other reason why we also agreed with keeping everything confidential at that point in time was we were afraid there were a number of people who were keen on not buying but sort of taking this land um for instance, Wood Lane, Intrapac. He developed some of afield with the – which is neighbouring this lot and he was really keen on acquiring this block but at a very, very cheaper price and, at the same time Uncle Khay um he always tries and um take over a property as well at a lower price. So, we were quite fearful of many people involved or yeah, outsiders trying to jeopardise the deal or anything to that extent.
MR McALOON: So, you would agree then that one of the purchasers for having this letter was to enable you to provide some information about the sale in the context of what was happening with VKK, but in a way that meant you didn’t need to disclose the actual sale price?
WITNESS: ---Or any details relating to that particular sale. Yes.
MR McALOON: And one of the reasons you didn’t want to do that was because you didn’t want Khay Taing to become aware of the sale price?
WITNESS: ---Not just Khay Taing but everybody.
Mr McALOON: But he was one of the people, the Taing family was one of the people that you were seeking to ensure would not learn of the details that – of the purchaser and the sale price?
WITNESS: ---Yes.
Mr McALOON: And you knew that because, for instance, Huy Taing was a director of VKK. If there was a letter that included those details, there was some chance that he would have access to them?
WITNESS: ---Yes.
Mr McALOON: He’d probably tell his father and probably his sister perhaps?
WITNESS: ---I’m sure. Yeah.

Marintha gave evidence that she held this fear from around August 2015.

On 22 February 2016, Bramich Legal emailed Marintha and Hakly to request a copy of the written agreement in relation to the agent’s commission. That same day, Hakly responded in the following terms:

To simplify things, please help to just include the points below as Mal is not currently contactable:
-         Please refer to the sale price being more than $7.9M
-         The Sale of contract is unconditional
-         The Buyer is a genuine Buyer
-The current Mortgage is around $1.8M (as per the Citibank statement as at the date sent).

Regarding your question, ‘To Whom It May Concern’ is suffice. Otherwise, Michael Bishop @ Pointon Partners.

Marintha accepted that she was the primary person on behalf of the Company who liaised with Bramich Legal.

On 23 February 2016, Bramich Legal sent a letter to Mr Michael Bishop of Pointon Partners in which they stated, inter alia:

Re: Central Stone Pty Ltd
Sale of 251 Hutton Road Keysborough

We advise that we represent Central Stone Pty Ltd in relation to the sale of the above property. We are in receipt of an unconditional Contract of Sale [in] this matter which provides for settlement on 10 March, 2016.
We are instructed that the purchaser requires the Contract to remain conditional.
We can confirm that the sale price under the Contract is in excess of $7.9M and the property is presently encumbered by a mortgage of approximately $1.7M. On this basis we can confirm that the net sale proceeds will exceed $6.2M.

Pointon Partners, at this time, acted for Gem Management.

On 24 February 2016, Bramich Legal purportedly sent a further letter to Mr Bishop which stated, inter alia:

Re: Central Stone Pty Ltd
Sale of 251 Hutton Road Keysborough

We advise that we represent Central Stone Pty Ltd in relation to the sale of the above property. We have on file a fully signed and unconditional Contract of Sale in this matter which provides for settlement on 10 March, 2016.
We are instructed that the purchaser requires the Contract to remain confidential.

We can confirm that the sale price under the Contract is in excess of $7,900,000.00 and the property is presently encumbered by a mortgage of approximately $1,700,000.00. On this basis we can confirm that the net sale proceeds will exceed $6,000,000.00.
We are also instructed that the purchaser has paid a 5% deposit and a portion of same namely $275,000.00 has been released to our clients.

Subject only to minor differences, these letters are in substantially the same terms and it was not readily apparent nor adequately explained whether either or both were in fact sent.

On 24 February 2016, Hakly sent a letter, on behalf of the Company, to Gem Management, in which he stated:

Dear Michael/Directors of Gem Management Group,
Re: Gem Management Group (‘GMG’) and Central Stone (‘CS’) - Heads of Agreement
With reference to our last correspondence made to you on 4 February 2016, we enclose herewithin our solicitors’ letter confirming the particulars of the COS, in which to assist Gem Management Group in obtaining an extension with Woodlane.
Central Stone wishes to confirm its commitment to reinstate the executed HOA however, as previously indicated, we would require until at least mid March 2016, to formalise our funds arrangement to meet with the increased amount requested.
In the interim, we ask that GMG please confirm by 4pm on Friday 4 March 2016 that the HOA is still available, and that it is exclusively reserved for CS until early April 2016 (or upon settlement of the Woodlane loan whichever comes first) so that we can confidently continue to procure the funds.
We understand that time is of essence and will endeavour to settle this matter at our earliest.
Should you have any questions, please do not hesitate to contact me.
…

It is unclear which letter from Bramich Legal it enclosed but I find it was likely to be the letter from Bramich Legal dated 23 or 24 February 2016.

On 29 February 2016, an entity called YC Realty Pty Ltd issued a tax invoice to Freddy Realty for $150,000 with the description ‘251 Hutton Road, Keysborough Vic 3173’.

On 2 March 2016, Hakly, on behalf of the Company, executed a power of attorney pursuant to which Marintha was appointed as the Company’s attorney and to act on its behalf in relation to all matters specific to the Land.

On 2 March 2016, Eid Enterprises Pty Ltd issued a tax invoice to Freddy Realty for $150,000 (including GST), described as sales commission for the Land.

On 7 March 2016, an entity called API Land Limited (Hong Kong) issued a tax invoice to Freddy Realty for $98,182 with a description of ‘Buyer’s Referral for 251 Hutton Road, Keysborough, Melbourne, Australia’.

On 7 March 2016, XPW was incorporated with its sole director and secretary being an individual named Xiao Ping Wu. It emerged in the course of Marintha’s evidence that this was a person known to her from high school. The following day, XPW opened a bank account with CBA with Marintha as a signatory. Marintha gave evidence that Hakly asked her to be a signatory of this account ‘to help to assist to ensure the money doesn’t disappear or get into the wrong hands’. Marintha gave evidence that she was approached by Ms Wu about being a co-signatory, but she also said she was approached by Hakly. Marintha said she did not know whether Hakly had approached Ms Wu.

On 8 March 2016, Mr Wang sent an email to Marintha, which stated:

Hi Marintha
Congratulations to you for this deal is going to settle at this Thursday on time. Please find attached invoice for sale on above property.
Once again thanks for your business and we are looking forward more successful cooperation later on.

The attached invoice was issued by Freddy Realty to the Company for an amount of $1,000,000 (including GST), described as ‘Commission for 251 Hutton Road, Keysborough’.

That same day, Freddy Realty issued receipts in respect of payments by Eastar Group totalling $1.3 million, described as additional deposit amounts for the purchase of the Land.

On 8 March 2016, Marintha responded to Bramich Legal and attached a disbursement statement as follows:

SETTLEMENT DISBURSEMENT – 251 HUTTON ROAD KEYSBOROUGH

Purchase Price: $11,000,000.00

LESS $ 550,000.00 5% deposit

LESS $ 725,000.00 Central Property RE

PLUS $ 17,845.18 Outgoings

$ 1,257,154.85

Balance: $9,742,845.15
PLEASE DISBURSE THE BALANCE AS PER BELOW:

RUNNING BAL AMOUNT: ENTITY: PMT METHOD:

$ 9,742,845.15 1 $ 1,696,270.11 CITIBANK MORTGAGE CITIBANK

$ 8,046,575.04 2 $ 337,645.80 AUDIRECT GROUP PTY LTD Bank Cheque

$ 7,708,929.24 3 $ 2,000,000.00 XPW INVESTMENT
CONSULTING PTY LTD Bank Cheque

$ 5,708,929.24 4 $ 5,708, 929.24 CENTRAL STONE PTY LTD Bank Cheque

I also refer to the calculation of these amounts in page 1059 of the court book, being a statement of adjustments at 10 March 2016.

On 9 March 2016, Bramich Legal sent a further email to Marintha setting out an updated schedule of adjustments and disbursements:

Hi Mal,
It was lovely to meet you yesterday too. I decided to take my laptop with me today so that I could finalise the cheque details for settlement myself. Based on the adjustments prepared by Ausland Partners and your attached disbursement list, I confirm that the proposed cheque details are as follows:

South East Water $53.25

City of Greater Dandenong $10,848.18

State Revenue Office $40,268.60

Citigroup Pty Limited credit a/c 821232717 $1,697,307.60

AuDirect Group Pty Ltd $337,645.80

XPW Investment Consulting Pty Ltd $2,000,000.00

Bramich Legal $2,350.00

Central Stone Pty Ltd $5,654,331.72

Allowance to purchaser for extra bank cheques $40.00

Total (as per adjustments) $9,742,845.15

This does not identify the commission that was paid to Freddy Realty of $1,000,000.

Marintha gave evidence that that she was told by Hakly that the sum of $337,645.80 for AuDirect related ‘to the invoices relating to the inception of the company. So, it wasn’t exactly for the project management fees’. Marintha also agreed that the document at page 843 of the court book shows that the sum of $337,645.80 appears to be calculated in relation to the project management fees. Marintha gave evidence that Hakly told her to make the payment of $2 million to XPW.

That same day, Marintha sent a response to Bramich Legal in which the proposed disbursement schedule was amended to increase the amount payable to XPW from $2 million to $2.3 million. Marintha gave evidence that she did so acting upon the basis of Hakly’s instructions. Her email said:

Hi Melanie,
Please see my amendment in red below, other than that, we confirm that we are satisfied with the rest. Please kindly make this amendment and we will authorise the disbursements.

Bramich Legal responded:

Thanks Mal. I will amend the cheque to XPW Investment Consulting Pty Ltd to be $2,300,000 and will reduce the cheque payable to Central Stone Pty Ltd by the sum of $300,000.00 accordingly. The cheque to Central Stone Pty Ltd will now be $5,354,331.72.

On 9 March 2016, Mark Bramich sent an email to Marintha in which he stated:

Hi Mal,
Fiona has indicated that you are discussing GST issues with your accountant. Unfortunately we need to confirm cheque details with the purchaser’s lawyer as a matter of urgency to ensure that settlement proceeds tomorrow.

YHL issued an invoice to the Company dated 9 March 2016 for ‘Referring, marketing and sales CONSULTING’ (YHL Invoice). The invoice is for an amount of $2,000,000 and nominates XPW as recipient of the payment. Marintha gave evidence that Hakly would have provided the YHL Invoice to her.

On 10 March 2016, Marintha sent an email to Bramich Legal in which she provided bank account details for disbursements payable to AuDirect, XPW and the Company.

On 10 March 2016, the Company issued an invoice to Eastar Group for $11 million for the Contract of Sale but which refers to a date of 15 October 2015. The date is incorrect, as is the amount due as a deposit had been paid.

Settlement and distribution of sale proceeds

On 11 March 2016, the sale of the Land settled and the following disbursements were made:

(a)$2,300,000 to XPW;
(b)$337,645.80 to AuDirect; and
(c)$5,354,331.72 to the Company.

On 14 March 2016, Hakly and Huy exchanged email correspondence regarding the distribution of sale proceeds. Huy initially emailed Hakly at 9:39am that day, and said:

Hi Hakly
The funds from 251 Hutton Road, how are you wanting to split it?
Are you wanting to leave some for VKK and transfer part? If so when can the part be transferred, as we have some urgent bills to pay!

That same day, at 2:17pm, Hakly responded as follows:

Hi Huy,
As Phil is busy and rarely responds to emails promptly, I want to finalise this account and have engaged another accounting firm to complete the account submission for this so we are aware what tax we need to pay etc… and reimbursements and disbursements to clear any outstanding dues to each party with the remainder, partially paying ourselves back, taking into account the amount required for CS to pay Woodlane.
This whole exercise should take about 2 - 3 weeks, I will keep you posted.
If you need partial for the time being, if it isn’t anything major, we can look at partially pay ourselves some first, (bare in mind [sic], I am still awaiting Michael’s email to pay to Aviation3030 for the founders option as priority straight from CS)
…

Huy responded at 2:49pm, saying:

Hi Hakly
Yes we will need to get partial payment ASAP thanks. I will work out what we need first and get back to you. Just to confirm we are still doing Taing 40% and Lao 60% in CS contribution to VKK loan payout?

Hakly responded at 3:41pm:

Yes I am anticipating that, and just keep the current shareholdings. I was thinking, we need some funds urgently also, for the time being whilst we wait to finalise the accounts and prior to Woodlane payments, would you be happy with something below:
Central Stone Disbursement Mid March 2016

Taing Family $76,000.00 Paid to AVI

$124,000.00 Disbursed to Taing Family

$200,000.00 40% from Proceeds

Lao Family

$76,000.00

Paid to AVI

$224,000.00 Disbursed to Lao Family

$300,000.00 60% from Proceeds
Please do let me know and I will inform Mal as the funds have cleared.

In response, at 3:47pm, Hakly said:

Can you advise the break down from the total $8M settlement? Less pay out bank loan and deposit paid.

Hakly responded at 3:58pm in the following terms:

Hi Huy
Roughly, so far now:
$8M
- $1.7 (Citibank Loan)
- $337,645.80 (reimbursed for payment to ato for the $1.2M invoice that was lodged by AUDG and CS for obtaining the Citibank loan at the time)
= $5.9ish available.
We received invoices including GST from the respective agents and including the claim GST we are yet to receive, it is within the vicinity of the above $5.9M
Can you let me know if you are happy with the proposed disbursement below for this week?
Central Stone Disbursement Mid March 2016

Taing Family $76,000.00 Paid to AVI

$124,000.00 Disbursed to Taing Family

$200,000.00 40% from Proceeds

Lao Family

$76,000.00

Paid to AVI

$224,000.00 Disbursed to Lao Family

$300,000.00 60% from Proceeds

Huy gave evidence that he did not receive any invoices from any agents at this time. He said he did not request the invoices as he put trust in the Lao family to do the right thing. Huy also gave evidence that as a result of receiving this email he knew that there was more than one agent and that they were charging commission.

Huy responded at 4:21pm:

Hi Hakly
So we are splitting the first $1M, $400K to us and $600K to you.
Yes if this is the case please proceed with your suggestion for first payment.
Please note that we will need a further $500K by the end of March. If you can roughly work out and advise if there will be any issue? as we need to work out our finance?

Huy sent a further email at 5:35pm, saying:

Hi Hakly
After doing some expense figures can we do a $2M split so $800K to us and $1.2M to you? The rest we can work out later? There will be about $3.9M left.

Hakly replied at 5:53pm, saying:

Hi Huy,
I am ok with anything, just as long as there are sufficient funds for Woodlane in case more is required.
I thought a safe bet would be $500k first for this week, and depending how the loan progresses and the situation with Woodlane, if all good we do the remaining $1.5M end of next week? and more the week after once we have the loan indicatively approved with what is left.
Thoughts?

Huy replied at 6:04pm, saying:

As we need to pay the Vibol instalment plus others by the end of the month, I think it’s best to do $2M now and the balance can be left till the loan and accounts are sorted out.
If OK we we [sic] would prefer to do this?
Thanks!

At 6:31pm, Hakly replied:

Hi Huy,
I spoke to the family, and they are comfortable to just do $1M this week, and another $1M next week (which should still arrive in your account well before end of the month) just in case there are issues with Woodlane ?
Is that ok?

On 14 March 2016, Hakly forwarded Huy email correspondence from February 2013, setting out AuDirect invoices payable by the Company. In response, Huy sent the following email at 12:10pm:

Hi Hakly
So that we can understand what is being applied, can you please send through AuDirect invoices and a break up of payment and deductions?

Hakly responded at 5:51pm, saying:

Hi Huy,
It is being collated atm, but the AUDG invoices for CS has been sent to you in a separate email earlier today (the full payment wasn’t paid though, just the ato portion when we needed the loan at the time).

Huy responded at 6:05pm, saying:

OK, Thanks for advising!

Huy gave evidence that he did not receive any invoices from AUDG at this time. The following exchange took place during the cross-examination of Huy:

Mr NORTHROP: …Well, did you ever ask for the invoices again?
WITNESS: ---The invoices, I, I can’t recall whether I said, but, I, I, I, I checked my emails. Like, um, I looked at, you know, the, um, on those days, and I couldn’t find any invoices from Hakli, like for, for the, um break up.
Mr NORTHROP: Yes. I put it to you that you didn’t seek any more information because you were satisfied with the information that Hakli had provided to you?
WITNESS: ---No, not because I was satisfied, because I was waiting for him to send it, he didn’t send it. And, then, yes, of course I’m probably doing a lot of things and I probably didn’t follow up on him, on that.

Marintha gave evidence that she took notes of a meeting of the board of the Company held on 16 March 2016. My disputed this document. I accept Marintha’s evidence. Her evidence was direct and clear. No other record of this meeting was identified. The notes record the attendance of Huy, Hakly, Kim and Khay. The notes refer to discussions regarding, among other things, the sale of the Land for a price of $11 million, and the deduction of $3 million for commission and other costs. My does not accept that these notes constitute an accurate record and Huy, when pressed during cross-examination, said in response to the suggestion that there was not a discussion concerning a sale price of $11 million: ‘Oh, absolutely not, no. $11M was never, never been discussed at all’. My submitted in her closing address that the only matter she relies upon to submit that the notes made on 16 March 2016 are not an accurate record is the evidence of Huy. My submitted that the notes have a curated quality about them. I reject Huy’s evidence that he was not told about the sale price of $11 million or commission payable upon the sale of the Land. The notes made by Marintha are a contemporaneous record that Huy was told the Land sold for $11 million with commission payable of $3 million. The notes do not appear curated and appear, on their face, to be the type of notes a person would take at a meeting.

On 4 April 2016, Woodlane’s solicitors sent a letter to Pointon Partners stating, among other things, that Woodlane required the sum of $2.8 million to be paid directly into its account.

In addition to the payments to unitholders, a sum of $3.2 million from the sale proceeds was loaned to Gem Management. These funds were in turn used by Gem Management to pay out Woodlane. This loan was secured by a mortgage registered on 8 April 2016.

On 30 April 2016, Hakly resigned as a director of the Company and Kim was appointed a director.

On 1 May 2016, a sum of $300,000 was debited against XPW’s account and credited to the Company’s account. This is also shown as a credit to the Company’s account in its bank statement at page 1088 of the court book.

On 6 and 12 May 2016 and 7 September 2016, the Company paid the total sum of $650,000 to Sayalin Chea, who is Marintha’s aunt and a shareholder in the Company. Marintha said that this was the transfer of her portion of her investment.

On 17 May 2016, an amount of $1,992,940.00 was withdrawn from XPW’s bank account with CBA, by bank cheque payable to XPW and presented at an Australia and New Zealand Banking Group (ANZ) branch. There is no evidence that Marintha was a signatory to the account with the ANZ.

On 1 June 2016, the Company’s accountant, Mr Baker, sent the following email to Hakly and Marintha:

Hi Marintha and Hakly,
I have amended the BAS’s for Keysborough Village Unit Trust as discussed.
I have also advised the Tax Office investigator of the amendments in order for him to complete his review.
This is a favourable outcome, because if the investigator had required you to pay the GST, that would have been 1/11 of the sale price of the property which would have been approx. $1M. Therefore to only have to repay the $154K is financially the best position.
…
(emphasis added)

My accepted in closing addresses that the sale price of $11 million was able to be discerned from reference to GST of $1 million but that it required a careful and close reading. Huy gave evidence:

WITNESS: …unless you go and work it out and calculate it yourself, you wouldn’t know that the sale price was $11m. As I said, I was just reading through it quickly and then it’s like, all email, you just skim through it. But you know, it’s not –it wasn’t clear to me at that time, you know what I mean, and that’s why I didn’t question it. If it was clear, I would have questioned.
(emphasis added)

The following exchange took place during the cross-examination of Huy:

HIS HONOUR: It’s all right?
WITNESS: ---So I’m saying, you know, only if you actually sit down and look at it properly, yes, and calculate it then okay, maybe you can work out. But at the time, you know, I’m just doing – I’m just reading it quickly ‘cause I’ve got so many other emails. I’m just – okay, and then you were talking about the GST which is – um, which is – like, we’re being charged or trying to reclaim it - - -
HIS HONOUR: Is that your evidence before me, that you can recall that you just read this quickly? Is that your recollection, before me?
WITNESS: ---Ah - - -
HIS HONOUR: Is that what - - -?
WITNESS: ---Yeah, yeah, that’s what I’m telling you. I’m telling you now, yeah. Because, so the thing is it’s something that – ah, you know, an obvious item of these things here. As I said, we put it on Mal to do the right thing and to look after the accounts. Ah, I got that information. If I had all that information, the detail, then yes, I could work it out, I can do, but I’ve got nothing. I didn’t – I had no control over that account side.

I do not accept this evidence. It was clear that he had no recollection of this email. I find that his evidence that he read this email ‘quickly’ was deliberately untruthful. This evidence is in stark contrast to the rest of his evidence in which he often said that he could not recall details as it was so long ago. It is implausible that he can remember reading this particular email almost 8 years ago ‘quickly’. This is also because prior to being shown this email in cross-examination Huy said: ‘I can't recall talking about GST at all of $1m’. Further, the email clearly makes reference to $1 million in GST. It would therefore have been obvious to Huy that the sale price was $11 million. The fact that he raised no issue about this is consistent with him already knowing that the sale price was $11 million.

Second, Marintha was the person at the Company who was responsible for ensuring that if settlement funds were to be applied to the expenses, the expenses were properly checked and she was satisfied they had been properly incurred. Marintha was not a director but she was the secretary of the Company.

Third, I have taken into account that I have not found any breach of any particular statutory or fiduciary duty. None was alleged.

Fourth, I do not accept that it would be arbitrary and punitive to make an order that Marintha purchase My’s shares and units at a fair value by reference to the YHL Payment given the matters I have just addressed in paragraphs 446 to 448.

Fifth, I do not consider there has been such delay as should disentitle My from relief pursuant to s 233. I accept that delay in prosecuting an oppression claim is a relevant factor bearing upon the Court’s discretion to award relief.[37] Further, as the Western Australian Court of Appeal recently observed in Morara Pty Ltd v Kingslane Property Investments Pty Ltd,[38] the existence of prejudice arising from delay is not a necessary prerequisite to a defence of delay:

66.More fundamentally, the fact that Whelan JA in Falkingham eschewed academic distinctions between the equitable doctrine of laches and delay more generally does not suggest that the identification of prejudice is to be elevated to a rule in the application of s 233. That would be an impermissible fetter on the statutory discretion, and an unjustified gloss on the statutory text. The learned primary judge considered that in exercising the statutory discretion, fairness led to the view that Morara’s and Mr Weaver’s unexplained delay in all the circumstances ought to lead to a reduction of the remedy by the sum that would have been subject to a limitation period had Mr Weaver brought a claim. Other judges may have reached a different conclusion, but no error of principle is disclosed in her Honour’s reasons. For the same reasons, the submission made in the context of Ground 1 referred to in [45] to [46] above cannot be accepted.[39]

[37]Falkingham v Peninsula Kingswood Country Golf Club Ltd (2015) 318 ALR 140, [88] (Whelan JA).

[38][2024] WASCA 123 (Quinlan CJ, Hall JA and Solomon J).

[39]Ibid.

I accept that there has been a delay in bringing this claim. It is reasonable, however, that no complaint was made about the YHL Payment until 2021. This is because it is only at that time that the defendants provided the YHL Heads of Agreement and the YHL Invoice that gave rise to concerns about the commission. I reject that there has been delay in bringing this claim that has caused prejudice. There is no reason to consider that any evidence that might have given by Khay would have been relevant to the issues concerning the YHL Payment.

In addition, the defendants submit that the company, unitholders and the defendants have been prejudiced by My not making these claims in late 2020, before there was a distribution of the funds received upon repayment of the loan with Gem Management. The defendants submitted that if the claim was made it could have been satisfied from those proceeds. This does not identify any prejudice. This is because it assumes that the sum of $800,000 would have been paid to My at that time. The defendants do not identify why Marintha would be now prejudiced by having to make that payment now.

AuDirect Payment

I have found that the conduct of Marintha was contrary to the interests of the members as a whole pursuant to s 232(d) of the Corporations Act.

In the circumstances, I am satisfied that I should exercise my discretion to grant My relief against Marintha pursuant to s 233 of Corporations Act for directing the AuDirect Payment. This relief should be the purchase by Marintha of My’s shares and units at a fair value. The fair value should include 40% of the AuDirect Payment, being the sum of $135,058.32.

First, Marintha’s direction caused the Company to make a payment of $337,645.80 which it was not liable to pay. I refer to the matters I have set out earlier in these reasons concerning the circumstances in which she gave that direction. This is a very significant amount. I accept that she did not profit personally from the AuDirect Payment.

Second, as I have already said, Marintha was the person at the Company who was responsible for ensuring that if settlement funds were to be applied to the expenses, the expenses were properly checked and she was satisfied they had been properly incurred. Marintha was not a director but she was the secretary of the Company.

Third, I have taken into account that I have not found any breach of any particular statutory or fiduciary duty. None was alleged.

Fourth, I do not accept that it would be arbitrary and punitive to make an order that Marintha purchase My’s shares and units at a fair value by reference to the AuDirect Payment given the matters I have just addressed in paragraphs 455 to 457.

Fifth, I do not consider there has been such delay as should disentitle My from relief pursuant to s 233. I accept that there has been substantial a delay in bringing this claim. I reject that there has been delay in bringing this claim that has caused prejudice. There is no reason to consider that any evidence that might have given by Khay would have been relevant to the issues concerning the AuDirect Payment.

In addition, the defendants submitted that if the claim was made earlier it could have been satisfied from the funds received upon repayment of the loan with Gem Management. This does not identify any prejudice. This is because it assumes that the sum of $135,058.32 would have been paid to My at that time. The defendants do not identify why Marintha would be now prejudiced by having to make that payment now.

Unauthorised Debits

I have found that the conduct of Kim in making the Unauthorised Debits constituted conduct by Kim that was oppressive and unfairly prejudicial to My pursuant to s 232(e) of the Corporations Act. The conduct concerned the use of the Preserved Funds contrary to the escrow arrangement.

In the circumstances, I am satisfied that I should exercise my discretion to grant My relief against Kim pursuant to s 233 of Corporations Act for making the Unauthorised Debits. This relief should be limited to a declaration. The relief should not include an order that Kim purchase My’s shares for a ‘fair value’ based upon the use of the Preserved Funds.

First, $23,077.30 (being 50% of the amounts paid to Scammell Black Mileo and Ms You) was paid for the benefit of My and the Taing family. I have found that the amounts paid to Scammell Black Mileo benefitted both the Taing and Lao families.

Second, as I have already said, My’s claim was limited to the use of the Preserved Funds contrary to the escrow arrangement. This is because:

(a)The Preserved Funds comprise an amount slated to be distributed to My, subject to two adjustments sought to be applied by the defendants, namely:
(i)an amount of $125,482.73, characterised as referable to due diligence fees paid by Hakly Lao; and
(ii)an amount of $28,000, described as relating to a tractor that had been sold.

(the Proposed Adjustments).
(b)The Proposed Adjustments are the subject of disagreement between the parties but were not in dispute in this proceeding. My’s claim was limited to the use of the Preserved Funds contrary to the escrow agreement. My did not plead that the defendants’ (or the Lao family) had no claim to the Preserved Funds.

I do not accept My’s submission that the Preserved Funds were ‘payable to her’. This has not been established. As a result, I am not satisfied that Kim’s conduct in using the Preserved Funds contrary to the escrow arrangement caused any loss to My or that they should be taken into account in assessing a ‘fair value’ for the shares. No other relief was sought (i.e. restoration of the Preserved Funds). In addition, My also submitted, in effect, that she is entitled to relief for the ‘Unauthorised Debits’ as a result of the distributions to Sayalin Chea and that this represents a ‘conservative approach’. None of this is pleaded. The oppression, the subject of the pleaded claim that has been established, may be addressed by an appropriate declaration.

I am satisfied, however, that the amount comprising the difference between the Retained Funds and Preserved Funds, less amounts used to pay the expenses of the Company, should be taken into account on the ‘fair value’ of the shares to be purchased by Marintha. There was evidence given by Marintha that, between 15 July 2022 and 7 August 2022, an amount of $6,380 was paid towards the expenses of the Company. This evidence was not challenged. As I have already said, I accept this evidence. Forty per cent of difference between the Retained Funds ($163,446.43) and Preserved Funds ($153,482.73), less amounts used to pay the expenses of the Company ($6,380), should be taken into account on the ‘fair value’ of the shares. As a result, this is an amount of $1,433.48, which represents 40% of 3,583.70.

Sale Non-Disclosure

I have found that the conduct of Marintha and Kim for the Sale Non-Disclosure constituted conduct by Marintha and Kim that was not was contrary to the interests of the members as a whole pursuant to s 232(d) of the Corporations Act or oppressive to, unfairly prejudicial to, or unfairly discriminatory against My pursuant to s 232(e) of the Corporations Act.

In any event, if I am incorrect, I would have exercised my discretion to refuse My relief pursuant to s 233 of Corporations Act for the Sale Non-Disclosure. This is because:

(a)the non-disclosure was for a very a limited period to 16 March 2016;
(b)the non-disclosure was not to the financial detriment of My or the Taing family;
(c)the non-disclosure did not confer any financial benefit upon Kim or Marintha or the Lao family; and
(d)the conduct ceased on that date when the sale price was disclosed on 16 March 2016.

YHL Non-Disclosure

My is not entitled to any relief against Marintha or Kim based upon the YHL Non-Disclosure. This is because I have found that the YHL Non-Disclosure constituted conduct by Marintha and Kim that was not contrary to the interests of the members as a whole pursuant to s 232(d) of the Corporations Act or oppressive to, unfairly prejudicial to, or unfairly discriminatory against My pursuant to s 232(e) of the Corporations Act.

Ongoing Non-Disclosure

I have found that the conduct of Marintha for the Ongoing Non-Disclosure constituted conduct by Marintha that was unfairly discriminatory against My pursuant to s 232(e) of the Corporations Act.

In the circumstances, I am satisfied that I should exercise my discretion to grant My relief against Marintha pursuant to s 233 of the Corporations Act for the Ongoing Non- Disclosure. This relief should be limited to a declaration. This is because the Ongoing Non-Disclosure:

(a)evidences that the responses by Marintha were inadequate in relation to important matters;
(b)was not to the financial detriment of My or her family; and

(c) did not confer any financial benefit upon Marintha and/or the Lao family.
Shares and Units

The defendants made the following submission concerning the Company’s status as trustee of the Trust:

37.Where, as here, a company is the trustee of a trust, there is a divergence between courts of different states whether s.232 applies in respect of the affairs of the trust. The defendants accept that in Victoria decisions of single judges give the section a wide operation extending to the affairs of a trust. Nevertheless, where the company is the trustee of a trust its conduct must be considered having regard to the company’s primary obligations to the beneficiaries of the trust.

This submission was not further developed or in any substantive manner put forward in aid of any particular point.

There is no doubt that the ambit of the ‘conduct of a company’s affairs’ under s 232 of the Corporations Act extends to the affairs of trustee companies. As Davies J said in Vigliaroni & Ors v CPS Investment Holdings Pty Ltd (Vigliaroni):[40]

62.Section 53 is clear in its terms. The affairs of trustee companies are within the statutory meaning of ‘affairs of a body corporate’ for the purposes of s 232 and the scope of the statutory oppression remedy includes relief for conduct of the prescribed kind that affects a member of the trustee company in that member’s capacity as a beneficiary of the trust of which the company is trustee. In other words, the statute specifically provides for remedy under oppression provisions where the oppression relates to the operation of a trust which has a corporate trustee.[41]

[40][2009] VSC 428.

[41]Ibid [63] (citations omitted).

Her Honour further said:

68.…In my view, s 53 puts beyond any doubt that the Court’s jurisdiction and powers under the statutory oppression provisions are not circumscribed in respect of a trustee company and accordingly I conclude that I should depart from the view expressed by Young J in Kizquari and the cases which have supported that view, in view of s 53. I would also respectfully disagree with the view that Chesterman J expressed in Re Polyresins Pty Ltd which Young JA cited with approval in McEwan that the equitable interests in the trust cannot be dealt with by the Court under s 233. The only limitation imposed on the Court on the kind of order that it can make under s 233 is the requirement for the order to be one that that the Court considers appropriate ‘in relation to the company’. The phrase ‘in relation to’ requires a rational and discernible link between the remedy and the company in which the oppression has occurred. In other words, any remedy granted under s 233 must not be extraneous to achieving the object of relieving the oppression and must be appropriate to putting an end to the causes of oppression, including where the company acts as trustee and the oppression relates to the affairs of the trust. In appropriate cases the remedy may include orders dealing with the equitable interests in the trust, in my view.[42]

[42]Ibid [68] (citations omitted).

The reasoning in Vigliaroni was accepted in Wain v Drapac,[43] in which Ferguson J (as her Honour then was) said:

287.The words ‘in respect of’ have a very wide meaning. Bearing this in mind, and with respect, in my opinion Windeyer AJ’s construction of the legislation is too narrow. Were that interpretation to be accepted, then in cases such as the present, where there is a complex corporate structure that is a mixture of companies and trusts but in a real sense only one business is conducted by the corporate group, the legislation would be rendered virtually useless to remedy the real harm that has been caused by the oppressive conduct. It would strike me as odd if the Court could take into account oppressive or unfair conduct in the company’s affairs in determining whether relief may be granted but then could not give effective relief to redress the harm caused by that conduct. That this is not intended is, I think, clear from the terms of s 233 in respect of at least one form of order for which specific provision is made. In this regard, the section provides that the Court may make any order that it considers appropriate in relation to the company including an order regulating the conduct of the company’s affairs in the future. As noted above, the company’s affairs includes its business, transactions and dealings with others. In my view, it is clear that the legislative intent was to include the power to grant relief provided that (in the words of Davies J) there is a ‘rational and discernible link between the remedy and the company in which the oppression has occurred.’ In a complex corporate structure (such as the Drapac Group) there is such a link between the companies and the relevant trusts which together operate the business. In my opinion there is power to grant the relief sought and consideration needs now to be given to whether, as a matter of discretion, it should be given.

[43][2012] VSC 156, [287] (citations omitted).

I agree with these observations of Ferguson J.

I accept that a company that is trustee of a trust must conduct itself in accordance with the obligations that accompany that office. This is, however, a case in which the units in the Trust are held, in effect, for the benefit of the same persons and in the same proportions as the share capital in the Company. There is accordingly an obvious nexus between My’s standing and rights as a member and her entitlements as a beneficiary under the Trust.

Purchase of shares and units and fair value

The defendants submitted:

58.There is no evidence of the value of the plaintiff’s shares and units. Nor is there any reasoned basis for ordering the first and second defendants to purchase any shares or units at the price suggested by the plaintiff. Neither of them is alleged to have profited personally from the transactions the subject of this proceeding. Marintha has never been a director and Kim Ou was not a director in 2016. The defendants’ involvement was confined to giving effect to transactions that the company entered. They acted in accordance with instructions given by the director of the company.
59.To make an order as sought by the plaintiff would be quite arbitrary and punitive in circumstances, especially where it is not contended that the defendants breached obligations owed to the company.

The function of a valuation for an order under pt 2F.1 is not to ascertain an objective market value. In Wain v Drapac (No 2),[44] Ferguson J said:

39.At the heart of these principles is that the price to be paid is compensatory in nature and is aimed at redressing the wrong done (the oppressive conduct). Consequently, the price to be paid will not always reflect the actual or real worth of the shares that might be obtained on the open market. Whilst the valuation might be conducted on the basis of one of the traditional methods (including net tangible assets or capitalisation of maintainable earnings) the valuation will invariably take into account various adjustments that should be made to remove the effect of the oppression. For example, in United Rural Enterprises Pty Ltd v Lopmand Pty Ltd, a number of adjustments were made including an adjustment to the amount of management fees that had been charged. Adjustments might be made if assets or profits have been diverted, with the valuation to be conducted as if there had been no diversion. Yet another example is Dynasty Pty Ltd v Coombs. In that case, the Full Federal Court upheld the trial judge’s valuation orders where one of the acts of oppression was the dilution of the Plaintiff’s shares. The trial judge calculated the amount to be paid not on the basis of the shares actually held but rather on the basis of the shares that would have been held had there been no dilution.[45]

[44][2013] VSC 381.

[45]Ibid [39].

Her Honour went on to make orders on the basis that the plaintiffs ‘held their shares and units on the collective understanding that by virtue of those shares and units they had an interest in the’ whole corporate group and that ‘[w]ith some limited exceptions, their shares and units should be valued on the basis that the profits of the entities in the … Group were to flow through to the entities in which they hold shares and units’.[46]
[46]Ibid [70].

My contends that the value to be assigned to her interests in the Company and the Trust is relevantly referable to various payments made from the assets of the Company. There is extensive evidence concerning these payments. The value of the oppressed party’s interests may be calculated on the basis of the loss suffered on account of the oppression.[47] In addition, as admitted by the defendants, as at 30 September 2020, after distributions made to the unitholders, the Trust’s assets were limited to the sum of $163,446.43 in an ANZ bank account, but this is mostly constituted by the Preserved Funds subject to the escrow agreement. It has no other assets apart from cash. There is no evidence that it has any liabilities. The defendants accepted in closing submissions that the Trust has ‘no net present value’. The defendants submitted that, for example, if the YHL Payment had not be paid to YHL then one does not know what might have happened to it between 2016 and 2020 (i.e. upon settlement of the proceedings). In the event that such monies had been received by the Company then it is likely that it would have held them until being distributed. There is no evidence that it would have made any further investments. The value of My’s interests is to be calculated on the basis of the loss suffered on account of the oppression, being the amounts I have addressed above concerning the YHL Payment, the AuDirect Payment and the Unauthorised Debits.
[47]Re SRW Nominees Pty Ltd (No 2) [2020] VSC 323, [234] (Robson J).

Was there a fiduciary relationship between My and Marintha in respect of the affairs of the Company? If so, did Marintha owe the duties alleged in the Amended Points of Claim at [31]?
Pleadings

My makes the following allegations:

Additional claims against Marintha
30.Such was the relationship between the plaintiff and Marintha that the plaintiff placed trust and confidence in Marintha, where:
(a)the acquisition and subsequent sale of the Land was an investment jointly undertaken by the members of the plaintiff’s family (including the plaintiff) and the Lao family (including Marintha);
(b)Marintha acted on behalf of the persons having an interest in the Company and the Keysborough Village Unit Trust (including the plaintiff) by dealing with the property of the Company and Keysborough Village Unit Trust, including in connection with the sale of the Land and the application of the net proceeds generated upon the sale of the Land;
(c)Marintha was vested with the exercise of a power to deal with the property of the Company and the Keysborough Village Unit Trust, including the net proceeds generated upon the sale of the Land (including by providing instructions to the Company’s solicitors regarding the application of those proceeds);

PARTICULARS
Marintha provided instructions to the Company’s solicitors regarding the application of the net proceeds of the sale of the Land, via emails sent to Melanie Bramich (a Law Clerk employed by Bramich Legal), including the email sent at 12:25 pm on 9 March 2016, which instructions were given without the plaintiff’s knowledge or approval.

(d)the exercise by Marintha of the power to deal with the property of the Company and the Keysborough Village Unit Trust affected the interests of the plaintiff, where it impacted the value of the plaintiff’s interest in the Company and the Keysborough Village Unit Trust; and
(e)the plaintiff reasonably expected that, in dealing with the property of the Company and the Keysborough Village Unit Trust, Marintha would not act in a manner that would prefer Marintha’s personal interests over the interests of the plaintiff.

31.At all material times, by reason of the relationship between the plaintiff and Marintha (as set out in paragraph 30 above), Marintha owed to the plaintiff a fiduciary duty:
(a) not to use or apply property of the Company or property of the Keysborough Village Unit Trust in any way or for any transaction contrary to the interests of the plaintiff without the plaintiff’s consent; and
(b)not to secretly profit or benefit from dealing with, applying or authorising the disposal of, property of the Company or property of the Keysborough Village Unit Trust.

Submissions

My submitted that Marintha owed fiduciary obligations to My because:

(a)the Taing family reposed trust and confidence in her to attend to the sale of the Land and the conduct of the Company’s affairs; and
(b)Marintha had control of the Company’s bank accounts and its property.

My submitted that, by virtue of her fiduciary position, Marintha owed specific duties:

(a)not to use or apply property of the Company/the Trust (at least, such part of that property as reflected My’s 40% interest) in a manner contrary to My’s interest; and
(b)not to secretly profit or benefit from dealing with, applying or authorising the disposal of the property of the Company/the Trust (at least, such part of that property as reflected My’s 40% interest).

My was unable to identify any authority in which a company secretary had been found to owe direct fiduciary obligations to a shareholder or unitholder of the company/trust of which the company was a trustee.

The defendants submitted there was no fiduciary relationship.

Analysis

It is unnecessary to determine this claim as it was made in the alternative to the claims based upon 232(d) and (e) of the Corporations Act based upon the Payment Direction, the AuDirect Payment and the Unauthorised Debits. I have already found these claims have been established. Nonetheless, it is convenient to briefly address whether there was a fiduciary relationship between My and Marintha.

The legal principles governing fiduciary relationships were conveniently summarised by the Court of Appeal in Schmidt v AHRKalimpa Pty Ltd:[48]
[48][2020] VSCA 193.

89.Fiduciary relationships have been referred to as relationships of trust and confidence or confidential relations. As stated by the High Court in Hospital Products Ltd v United States Surgical Corporation, the critical feature of these relationships is that ‘the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense’. There is no comprehensive statement of the criteria by reference to which the existence of a fiduciary relationship may be established. The creation of a joint venture relationship is not, in itself, determinative of whether a fiduciary relationship exists.
90.Once a fiduciary relationship is found to exist, the duties of the fiduciary will vary according to the circumstances which generate the relationship. The scope of the fiduciary duty is dependent upon the nature of the relationship and the facts of the case. The scope of the fiduciary obligations may be determined by reference to the terms of the agreement giving rise to those obligations and also by reference to the course of dealings actually pursued by the parties.
91.A person who occupies a fiduciary position may not use that position to gain a profit or advantage for himself or herself, nor may he or she obtain a benefit by entering into a transaction in conflict with his or her fiduciary duty, without the informed consent of the person to whom the duty is owed. A fiduciary must account to the person to whom the duty is owed for any benefit or gain:
(a)which has been obtained or received in circumstances where a conflict or significant possibility of conflict exists between his or her fiduciary duty and his or her personal interest in the pursuit or possible receipt of such benefit or gain; or
(b)which was obtained or received by use or by reason of his or her fiduciary position or of opportunity or knowledge resulting from it.

92.A fiduciary may act in his or her own interests, and will not be required to account for any profits obtained, in matters falling outside the scope of the fiduciary relationship.[49]

[49]Ibid [88]–[92] (Kyrou, Hargrave and Emerton JJA).

There are established categories of relationship in which fiduciary duties inherently arise. Fiduciary relations can also arise on an ad hoc basis where, on the facts of the case, the ‘critical features of those established relationships are found to exist’.[50]
[50]Hospital Products v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 96 (Mason J), quoted in Re: Porter & Anor v Mulcahy & Co Accounting Services Pty Ltd & Ors [2021] VSC 572, [488].

As a general rule, a director of a company owes fiduciary duties to the company and not each individual shareholder. The rationale for this is the prevention of ‘the recognition of concurrent and identical duties to its shareholders covering the same subject matter.’[51] This has been qualified in a number of cases and it has been recognised that, if the circumstances support it, a director may owe fiduciary obligations to an individual shareholder.[52] This was the case, for example, in Brunninghausen v Glavanics.[53] In that case, a direct fiduciary relationship arose where the sole effective director and majority shareholder in a proprietary company exploited his special knowledge of a proposed third-party acquisition of the company’s business to acquire the shares of the only other shareholder at an undervalue. In Crawley v Short,[54] Young JA (with whom Allsop P and Macfarlan JA relevantly agreed) observed:

121There will be a variety of situations where a shareholder or director/shareholder holds a special position where he or she may owe duties to another shareholder.
122Without being an exhaustive list, this will occur where: one shareholder undertakes to act on behalf of another shareholder; where one shareholder is in a position to have special knowledge and knows that another shareholder is relying on her to use that knowledge for the advantage of another shareholder as well as herself; and where the company is in reality a partnership in corporate guise, nowadays termed a quasi partnership.[55]

[51]Brunninghausen v Glavanics (1999) 46 NSWLR 538, 549–50 [58] (Handley JA, with whom Priestley and Stein JJA agreed) (Brunninghausen).

[52]Wright v Lemon [2024] WASCA 19, [331] (Buss P). See also Brunninghausen (n 51); Jones v Jones [2009] VSC 292.

[53]Brunninghausen (n 51).

[54](2009) 262 ALR 654.

[55]Ibid [121]–[122].

I find that no fiduciary relationship arose between My and Marintha.

First, the parties carried out the acquisition and sale of the Land through the Company and the Trust. Marintha, as company secretary, owed duties to the Company. Marintha has never been a director. Marintha was not the trustee.

Second, My did not identify any factual basis to establish that Marintha undertook or agreed to act for or on behalf of or in the interests of My, as distinct from those of the Company and the Trust.

Third, the evidence establishes that My did not rely upon Marintha but upon her brother (i.e. Huy) and her father (i.e. Khay):

(a)My did not attend meeting of the unitholders of the Trust and, subject to one exception, it was invariably Huy and Khay who attended;
(b)My did not make decisions. My agreed to allow Huy and Khay to make the decisions and participate in the management of the Company;
(c)Huy and Khay provided updates to My ‘now and then’;
(d)Huy and Khay did not even update My as to significant developments. For example, they did not tell My about any proposals to sell the Land. She did not know of any plan to sell the Land. The only matter she was informed of was when the Land had, in fact, been sold. This demonstrates that she was, in effect, excluded from significant matters concerning the Company by her own family. This confirms that My’s role, as she said in her evidence, was ‘[b]asically nothing’ and that she had no involvement at all in the affairs of the Trust; and
(e)My gave evidence: ‘I don't know much about the land or things that they do I basically left it all to them [i.e. Huy and Khay] to handle’.

Fourth, My’s submissions were cursory and failed to identify any special circumstances capable of elevating her relationship with Marintha to that of a fiduciary relationship. The matters relied upon by My—namely Marintha’s power to deal with the property of the Company and the Trust, including the net proceeds generated upon the sale of the land—do not establish a direct fiduciary duty owed to her by Marintha. Those matters are merely incidental to Marintha’s role as company secretary and the role that she had within the Company concerning payments of expenses. This accords with the recent observations of the Western Australian Court of Appeal in Wright v Lemon:[56]

The case law does not establish that a director of a proprietary company owes a fiduciary duty to shareholders generally or to a particular shareholder merely because the director participates in the control and management of the company… in general and in the present case, “special circumstances” must exist before a fiduciary duty of that kind arises.[57]

[56]Wright (n 52).

[57]Ibid [350] (Buss P).

Fifth, the characterisation of the Company as a quasi-partnership was vague and unparticularised and does not support a finding that the parties had in effect conducted themselves as a partnership and assumed the duties and responsibilities attending that arrangement.

Finally, I accept there was an asymmetry of information arising from the closeness of Marintha and Hakly to the sale of the Land as opposed to the more passive role of My. However, My failed to demonstrate a degree of vulnerability or reliance as between her and Marintha exceeding that of an ordinary minority shareholder to a company officer. This is not sufficient to establish a fiduciary relationship.

If Marintha owed the plaintiff fiduciary duties, did Marintha breach any alleged fiduciary duty by:
(a)      giving the Payment Direction;
(b)     directing the AuDirect Payment to be made; and/or
(c)      making or directing to be made, the Unauthorised Debits?

This issue does not arise for determination.

Did Marintha in trade or commerce engage in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL by:
(a)      giving the Payment Direction;
(b)     directing the AuDirect Payment to be made; and/or
(c)      making or directing to be made, the Unauthorised Debits.

It is unnecessary to determine this claim as it was made in the alternative to the claims based upon s 232(d) and (e) of the Corporations Act based upon the Payment Direction, the AuDirect Payment and the Unauthorised Debits. As I have said, I have found these claims have been established.

If Marintha breached any alleged fiduciary duty or engaged in conduct in contravention of s 18 of the ACL:
(a) did the plaintiff suffer any loss or damage as a consequence; and
(b) if so, is the plaintiff entitled to:
(i)relief in the form, or substantially in the form, set out at paragraph 3 of the Proposed Orders; and
(ii)damages pursuant to s 236 of the ACL and/or an order for compensation under the ACL in the sum of $1,212,526.53 (or some other amount)?

These issues do not arise for determination.

If Marintha engaged in conduct in contravention of s 18 of the ACL which caused the plaintiff loss or damage, did Huy Taing and/or Khay fail to disclose to the plaintiff that:
(a)the Company proposed appointing a selling agent(s) to sell the property on the basis that any part of the sale price in excess of $8,000,000 would be retained by the selling agent(s); and
(b)the property had been sold for $11,000,000?

These issues do not arise for determination.

If Marintha engaged in conduct in contravention of s 18 of the ACL which caused the plaintiff loss or damage, did Huy Taing fail to disclose to the plaintiff that:
(a)the Company would make the AuDirect Payment;
(b)funds held by the Company would be used or were proposed to be used to pay expenses in respect of the Aviation 3030 proceeding?

These issues do not arise for determination.

If yes to any part of paragraphs 16 and 17 above:
(a)did Huy Taing or Khay Taing thereby engage in conduct that was misleading or deceptive in contravention of s 18 of the ACL; and
(b)did the acts or omissions of Huy Taing or Khay Taing (as referred to in paragraphs 16 and 17 above) cause the loss and damage caused by Marintha?

These issues do not arise for determination.

If yes to both (a) and (b) of paragraph 18 above, should the liability of Marintha pursuant to the ACL be limited to an amount reflecting that proportion of the loss or damage claimed that the Court considers just having regard to the extent of Marintha’s responsibility for the loss or damage pursuant to s 24AI of the Wrongs Act 1958?

This issue does not arise for determination.

CONCLUSION AND ORDERS

In summary, I have found that:

(a)The entry into the YHL Heads of Agreement was not conduct of the affairs of the Company that was contrary to the interests of the members a whole for the purposes of s 232(d) of the Corporations Act or oppressive to, or unfairly prejudicial to, My for the purposes of s 232(e) of the Corporations Act.
(b)Marintha’s direction concerning the YHL Payment was conduct of the affairs of the Company that was contrary to the interests of the members as a whole pursuant to s 232(d) of the Corporations Act and the appropriate relief is an order that Marintha purchase My’s shares and units in the Company and Trust at a fair value that should include 40% of the YHL Payment, being the sum of $800,000.
(c)Marintha’s direction concerning the AuDirect Payment was also conduct of the affairs of the Company that was contrary to the interests of the members as a whole pursuant to s 232(d) of the Corporations Act and the fair value of My’s shares and units in the Company and Trust should also include 40% of the AuDirect Payment, being the sum of $135,058.32.
(d)The conduct of Kim and Marintha in relation to the YHL Non-Disclosure and Sale Non-Disclosure was not conduct of the affairs of the Company that was contrary to the interests of the members as a whole pursuant to s 232(d) of the Corporations Act or oppressive to, unfairly prejudicial to, or unfairly discriminatory against My pursuant to s 232(e) of the Corporations Act.
(e)The Ongoing Non-Disclosure was conduct by Marintha of the affairs of the Company that was unfairly discriminatory against My pursuant to s 232(e) of the Corporations Act. This should be addressed by a declaration.
(f)The payment of the Unauthorised Debits was conduct by Kim of the affairs of the Company that was oppressive and unfairly prejudicial to My pursuant to s 232(e) of the Corporations Act. This should be addressed by a declaration.
(g)The fair value of My’s shares and units in the Company and Trust should also include 40% of the difference between the Retained Funds and Preserved Funds, less payments for the Company’s expenses, being an amount of $1,433.48.

In my view, it is appropriate to make:

(a)declarations concerning the conduct I have identified above; and
(b)orders for the purchase by Marintha of My’s shares and units based upon the amounts I have identified above.

I will hear from the parties on the precise form of order, including on costs and interest. I direct the parties to provide an agreed form of order, or separate orders if there is disagreement, by no later than 31 January 2025.

SCHEDULE OF PARTIES

MY HIENG TAING (AS TRUSTEE OF THE MY HIENG TAING FAMILY TRUST)

Plaintiff

-and-

MARINTHA LAO

First Defendant

HENG KIM OU

Second Defendant

CENTRAL STONE PTY LTD (ACN 137 684 514)

Third Defendant

CHONG HUY TAING

Fourth Defendant

*Purchase Price:*	*$11,000,000.00*
LESS	$ 550,000.00	5% deposit
LESS	$ 725,000.00	Central Property RE
PLUS	$ 17,845.18	Outgoings
*$ 1,257,154.85*
*Balance:*	*$9,742,845.15*

RUNNING BAL	AMOUNT:	ENTITY:	PMT METHOD:
$ 9,742,845.15	1	$ 1,696,270.11	CITIBANK MORTGAGE	CITIBANK
$ 8,046,575.04	2	$ 337,645.80	AUDIRECT GROUP PTY LTD	Bank Cheque
$ 7,708,929.24	3	$ 2,000,000.00	XPW INVESTMENT CONSULTING PTY LTD	Bank Cheque
$ 5,708,929.24	4	$ 5,708, 929.24	CENTRAL STONE PTY LTD	Bank Cheque

South East Water	$53.25
City of Greater Dandenong	$10,848.18
State Revenue Office	$40,268.60
Citigroup Pty Limited credit a/c 821232717	$1,697,307.60
AuDirect Group Pty Ltd	$337,645.80
XPW Investment Consulting Pty Ltd	$2,000,000.00
Bramich Legal	$2,350.00
Central Stone Pty Ltd	$5,654,331.72
Allowance to purchaser for extra bank cheques	$40.00
Total (as per adjustments)	$9,742,845.15

Taing Family	$76,000.00	Paid to AVI
$124,000.00	Disbursed to Taing Family
$200,000.00	40% from Proceeds
Lao Family	$76,000.00	Paid to AVI
$224,000.00	Disbursed to Lao Family
$300,000.00	60% from Proceeds

[2024] VSC 822

24 December 2024