Re Seventeen Baker Pty Ltd
[2025] VSC 547
•4 September 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S ECI 2024 06212
IN THE MATTER of Seventeen Baker Lilydale Pty Ltd (ACN 636 700 073)
BETWEEN:
| YES YEAH PTY LTD (ACN 630 122 020) | Plaintiff |
| v | |
| SEVENTEEN BAKER LILYDALE PTY LTD (ACN 636 700 073) | First Defendant |
| JJS ASSET FUND PTY LTD (ACN 632 985 847) | Second Defendant |
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JUDGE: | Croft J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 20–21 August 2025 |
DATE OF JUDGMENT: | 4 September 2025 |
CASE MAY BE CITED AS: | Re Seventeen Baker Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2025] VSC 547 |
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CORPORATIONS — Oppression proceeding — Company a special purpose vehicle for property development — Property sold by mortgagee in possession — Whether affixing signatures on loan documents and removing director from ASIC register amounts to oppressive conduct against a member — Conduct admitted by director of defendant company — Application to wind up — No assets held — Unable to pay debt owing to lender — Relief granted — Re Dawning Investments Pty Ltd (2022) 68 VR 226 — Trafalga West Investments Pty Ltd v Superior Lawns Australia Pty Ltd(No 6) (2014) 102 ACSR 130 — Liu v Gan (No 2) [2025] VSC 372 — Briginshaw v Briginshaw (1938) 60 CLR 336 — Re SRW Nominees Pty Ltd [2019] VSC 547 — Corporations Act 2001 (Cth), ss 232, 233, 461, 467.
EVIDENCE — Evaluation of witness evidence — Most compelling evidence is contemporaneous documentation — Assessment of credit — Indicators of unsatisfactory witness evidence — LL Up Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | N Guenther of Counsel | Jeremy Johnson & Associates Lawyers |
| For the First Defendant | - | - |
| For the Second Defendant | L Cheok, Director of the Second Defendant, in person | - |
HIS HONOUR:
Introduction
This proceeding was commenced by Originating Process on 20 November 2024 by the plaintiff under the Court’s Oppression Proceeding Program. By affidavit accompanying the Originating Process, the plaintiff deposed that the conduct of one of the directors of the first defendant, being Seventeen Baker Lilydale Pty Ltd (Seventeen Baker or the Company), engaged in conduct that was oppressive, unfairly prejudicial and/or unfairly discriminatory against the plaintiff and, accordingly, seeks an order that Seventeen Baker be wound up under the provisions of the Corporations Act 2001 (Cth) (Corporations Act) and the Court’s powers pursuant to s 233 of the Corporations Act.
Seventeen Baker was incorporated on 9 October 2019 as a special purpose vehicle for the sole purpose of purchasing and developing the property at 17 Baker Street, Lilydale, Victoria (the Property). It was intended the Company would be used to facilitate a ‘joint venture’ between Mr Rambert Hoe Lam Yap (the Plaintiff or Mr Yap) and Ms Lucille Cheok (the Second Defendant or Ms Cheok), who are each 50% shareholders of the Company via an equal allocation of 40 fully paid ordinary shares to Yes Yeah Pty Ltd (controlled by Mr Yap) and 40 fully paid ordinary shares to JJS Asset Fund Pty Ltd (of which Ms Cheok is the sole director and shareholder). For reasons which are set out below, the anticipated development of the Property never took place. The Company ultimately defaulted on its mortgage repayments and the property was repossessed and subsequently sold, by mortgagee in possession, on 23 November 2024. Accordingly, Seventeen Baker does not presently hold or have any assets.
Mr Yap, in his capacity as director of Yes Yeah, submitted that the conduct of Seventeen Baker, as a consequence of Ms Cheok’s actions in her capacity as director of the Company, were oppressive, unfairly prejudicial and/or unfairly discriminatory against Yes Yeah. In particular, Mr Yap highlighted three discrete actions which it is said constitute oppressive conduct, namely:
(a) the removal of Mr Yap as a director of Seventeen Baker on the Australian Securities and Investments Commission (ASIC) record, on 26 October 2022, which he deposed was without notice to him, or his knowledge or consent;
(b) the Company entering into a loan agreement and subsequent deed of variation recording Mr Yap as a guarantor, without his knowledge or consent; and
(c) the Company’s use of the funds obtained under that loan agreement for a purpose which Mr Yap says was unrelated to the business of Seventeen Baker.
Accordingly, the Plaintiff, in its Originating Process, seeks:
(a) a declaration under s 232 of the Corporations Act that the conduct of the affairs of the Company in question was contrary to the interests of the members of the Company as a whole; or oppressive to; unfairly prejudicial; or unfairly discriminatory against the Plaintiff in its capacity as a member of the Company;
(b) an order pursuant to any of s 233(1)(a), (d) or (e) of the Corporations Act;
(c) to give effect to an order made pursuant to s 233(1)(d) or (e), that a valuer be appointed to conduct a valuation of the Plaintiff’s shares in the Company;
(d) further, or in the alternative, an order under s 461(1)(e), (f) or (k) of the Corporations Act; and
(e) together with costs and interest.
Ultimately at trial, an order under s 233(1)(a) of the Corporations Act was sought, that the Company be wound up.
Background
To give context to the present dispute, the following background, including the parties’ historical dealings, is provided.
Ms Cheok is aptly described as an experienced property developer. Through various entities, she has purchased, developed and sold a number of residential properties and, accordingly, has established a sizeable network of lenders, financiers and building contractors. It is through Ms Cheok’s property developments that Mr Yap first became acquainted with her. Mr Yap’s family members, including his mother, aunt, and uncle, are also investors of at least two development projects led by Ms Cheok (the Tyne Project and Kidgell Project). Mr Yap was employed by Ms Cheok to assist with various property developments, from about 2019 to 2023, first as a clerical assistant, and later as an onsite manager.
On 17 November 2018, Mr Yap signed a contract of sale for the purchase of the Property. The purchase price was $880,000, and a 10% deposit of $88,000 was paid by Mr Yap on 21 November 2018 to secure the purchase. The Property was originally purchased by Mr Yap, with him signing the contract of sale. It was Mr Yap’s intention that his family would live at the Property before later undertaking developments. The contract of sale was conditional, subject to finance, which Mr Yap obtained from the Commonwealth Bank of Australia. On 5 December 2018, the contract of sale became unconditional. Settlement occurred on 18 November 2019. Ultimately, the Property was purchased in the name of the Company, following execution of a nomination form.
The circumstances leading to the decision to invest in the Property together, between Mr Yap and Ms Cheok, via the Company, is in dispute. In particular, the timing of the parties’ first meeting to discuss the formation of the Company. On or around 10 December 2018, Mr Yap and Ms Cheok met at Ms Cheok’s office in Box Hill. Mr Yap said that this meeting was scheduled to discuss the status of two development projects that his family had invested in: the Tyne and Kidgell Projects. Mr Yap says that during this meeting he and Ms Cheok had discussed the purchase of the Property, and Ms Cheok informed him that she had also made an unsuccessful offer to purchase the Property. It is Mr Yap’s evidence that Ms Cheok proposed that she could manage the development of the Property and split the profits with him as joint 50:50 investors. It is important here to note that Ms Cheok owned, and was in the process of developing, the neighbouring property at 19 Baker Street, Lilydale (19 Baker Street) and, thus, a presumed level of developmental synergy could likely be achieved between the two properties. Ms Cheok, contrastingly, says that Mr Yap approached her to develop the Property with him, as he was facing difficulties obtaining sufficient funding for the remainder of the purchase price. On either account, it is clear that the parties discussed and later agreed to establish the Company for the purpose of developing the Property.
The terms of the joint venture were not recorded in writing and, therefore, were also subject to considerable dispute. Mr Yap deposed that the following was agreed:
(a) the deposit and his family’s contributions to the Tyne and Kidgell Projects, which totalled $316,191.82, would be his financial contribution to the purchase of the Property;
(b) Ms Cheok would be responsible for the balance of the purchase price and related costs; and
(c) settlement would be fulfilled in cash.
On Mr Yap’s own evidence, his role in the Company would be a passive one, with Ms Cheok retaining unilateral control over the management and development of the Property owing to her considerable experience. Accordingly, Mr Yap deposed that, as a consequence of Ms Cheok’s control, he was ‘completely reliant’ on her.
The Company was incorporated on 9 October 2019, and both Mr Yap and Ms Cheok were appointed directors. One day later, on 10 October 2019, a nomination form was signed, nominating the Company as purchaser of the Property (Nomination Form).
On around 11 November 2019, Mr Yap and Ms Cheok attended a meeting with Mr Jay Wijethilake of MJ Legal and executed a ‘Mortgage Linked Loan Agreement’ with Albert and Colleen Te Hennepe as Trustee of the Te Hennepe Superannuation Fund as the lender. The loan agreement signed during that meeting recorded both Mr Yap and Ms Cheok as personal guarantors. However, Mr Yap’s evidence is that he was never aware he was signing the loan agreement on the basis he would be a personal guarantor and he says he never agreed to this. At that meeting, Mr Yap recalls signing a single unnumbered document titled ‘Execution Page’ and various other loose‑leaf pages. This version of the loan agreement was, it is said by Ms Cheok, subject to a ‘last‑minute’ change of lender, and a further version of the loan agreement was executed on 15 November 2019 naming Vivian Anthony as trustee for the Anthony Family Trust as lender. Ms Cheok says she attended the office of Mr Wijethilake to sign a further version of the loan agreement document. The evidence concerning the execution of this further version of the loan agreement is in issue, as the earlier version executed on 11 November 2019 and the version signed on 15 November 2019 have identical execution pages. It is Mr Yap’s evidence that this could have only occurred by Ms Cheok affixing his electronic signature to the loan agreement.
The final version of the loan agreement purportedly executed on 15 November 2019 was secured by a mortgage over the Property which required the repayment of the principal sum of $595,000 within 18 months at a rate of 8.5% per annum (Loan Agreement). When the term of the Loan Agreement expired, Ms Cheok arranged for the loan to be refinanced. A Deed of Variation was executed on 11 May 2021, which extended the term of the Loan Agreement by a further 18 months, to 10 October 2022. The rate was also reduced to 7.2% per annum. Mr Yap disputes that he signed the Deed of Variation, and deposed that his electronic signature was affixed to the document by Ms Cheok without his knowledge or consent.
Between November 2019 and July 2022, a planning permit was issued for works to occur at the Property, but they were never carried out. No evidence was adduced during trial of any building contracts or architectural drawings of the proposed development. Consequently, a building permit was never issued and the planning permit expired in December 2021. A subsequent planning permit was issued in January 2024, however, no works were ever performed.
In around mid-2022, the parties’ relationship began deteriorating drastically. From a quasi‑familial relationship where Mr Yap referred to Ms Cheok as ‘mum’, the parties’ relationship was evidently hampered by the lack of progress in the development, which each blamed the other for. It was around this time that Mr Yap first proposed to Ms Cheok that the ‘joint venture’ be terminated and that his shares and interests in the Company be sold to Ms Cheok. Mr Yap deposed that Ms Cheok initially agreed to this proposal, but no documentation was provided to formalise this agreement. The relationship between Mr Yap and Ms Cheok reached its fateful conclusion on 26 October 2022, when Mr Yap was removed from the ASIC register as a director of the Company. Ms Cheok admits to unilaterally removing Mr Yap as a director, without Mr Yap’s knowledge or consent, and which Ms Cheok attributed to Mr Yap’s failure to arrange development funding and refusing to answer her calls.
A Further Loan Variation was entered into by Ms Cheok in November 2022, who signed as the sole director of the Company. This Further Loan Variation increased the loan amount from $595,000 to $840,000 and increased the interest rate back to 8.5% per annum. The increased loan amount was sought to further fund the project and to reimburse Ms Cheok for personal contributions that she had made to the Company, which she deposed amounted to $330,610.49. As Mr Yap was, at this time, not listed as director of the Company, Ms Cheok was the sole guarantor of the Further Loan Variation.
As a consequence of the development not having been completed, or commenced, and the debts owing under the Loan Agreement, as amended by the Deed of Variation and the Further Loan Variation, not having been repaid to the lender, the Company defaulted on its loan in late 2024. The lender took possession of the Property in accordance with the terms of the Loan Agreement, and the Property was subsequently sold on 23 November 2024 for $888,000. Ms Cheok deposed that this represented a shortfall of the debt owing to the lender, and that she presently owes the balance of approximately $100,000 as guarantor under the Further Loan Variation.
Self-Representation
Ms Cheok represented herself during the course of the two‑day trial. Her previous solicitors, Hunt & Hunt, ceased to act on 27 June 2025. The difficulties which hinder a self‑represented litigant’s ability to properly and fairly participate in complicated commercial litigation, wherein a myriad of legal and factual questions are posed, have been well documented. These difficulties, however, are substantially alleviated by the fact that Ms Cheok was not unrepresented during the course of the entire proceeding, and that the evidence which she sought to rely on, filed by way of affidavit material, was prepared whilst she retained legal representation.
Notwithstanding this, I arranged for my Associates to provide Ms Cheok with the contact details of the Court’s Self‑Represented Litigant Coordinator who is able to give general assistance to individuals without legal representation. Ms Cheok, in her capacity as sole director, was also granted leave to represent the Second Defendant, JJS Asset Fund Pty Ltd,[1] which was not opposed by the Plaintiff. During the course of the trial, I ensured that I adequately explained the process and conduct of the trial and the allegations being put against the Defendants. At times, Ms Cheok’s oral submissions and her cross‑examination of the Plaintiff’s witnesses erred into the territory of her giving evidence and, whilst a degree of latitude was provided, I had to, on a number of occasions, remind her of what she could and could not do. The trial was adjourned early on the first day to provide Ms Cheok with the opportunity to review and consider the Plaintiff’s written closing submissions prior to its recommencement on the second day. I am appreciative to Mr Guenther, Counsel for the Plaintiff, who exercised a degree of patience and did not hastily object or interject during Ms Cheok’s cross‑examination of the Plaintiff’s witnesses, especially with respect to procedural matters or the manner in which questions were being asked.
[1]Supreme Court (General Civil Procedure) Rules 2015, r 1.17.
On this basis, and having regard to Ms Cheok being an experienced business person with directorship roles in a number of corporate entities, I am satisfied that procedural fairness was afforded to her.
Documents relied upon
A significant proportion of each party’s evidence in chief was filed by way of affidavit. These affidavits were read into evidence without objection by either party.
The following documents were relied upon:
(a) the affidavit of Rambert Hoe Lam Yap affirmed 18 November 2024 and the accompanying exhibit RY-1 (First Yap Affidavit);
(b) the affidavit of Lucille Cheok affirmed 30 April 2025 and the accompanying exhibit LC-1 (Cheok Affidavit);
(c) the affidavit of Rambert Hoe Lam Yap affirmed 20 June 2025 and the accompanying exhibit RY-2 (Second Yap Affidavit);
(d) the affidavit of Rambert Hoe Lam Yap affirmed 14 August 2025 and the accompanying exhibit RY-3 (Third Yap Affidavit); and
(e) a consent of liquidator dated 12 August 2025 filed by Yes Yeah.
Relevant legal principles
The foundation for the finding of oppressive conduct is contained in s 232 of the Corporations Act and, if established, enables a plaintiff to seek relief under s 233 of that Act.
Section 232 of the Corporations Act provides the test for finding oppressive conduct having occurred (being the gateway for orders under s 233) and provides:
The Court may make an order under section 233 if:
(a) the conduct of a company’s affairs; or
(b) an actual or proposed act or omission by or on behalf of a company; or
(c) a resolution, or a proposed resolution, of members or a class of members of a company;
is either:
(d) contrary to the interests of the members as a whole; or
(e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity.
Section 233 of the Corporations Act provides:
Orders the Court can make
(1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order:
(a) that the company be wound up;
(b) that the company’s existing constitution be modified or repealed;
(c) regulating the conduct of the company’s affairs in the future;
(d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;
(e) for the purchase of shares with an appropriate reduction of the company’s share capital;
(f) for the company to institute, prosecute, defend or discontinue specified proceedings;
(g) authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
(h) appointing a receiver or a receiver and manager of any or all of the company’s property;
(i) restraining a person from engaging in specified conduct or from doing a specified act;
(j) requiring a person to do a specified act.
…
Order that the company be wound up
(2) If an order that a company be wound up is made under this section, the provisions of this Act relating to the winding up of companies apply:
(a) as if the order were made under section 461; and
(b)with such changes as are necessary.
Section 461 of the CorporationsAct provides additional grounds that the Court must be satisfied of in the context of shareholder oppression and unjust treatment of shareholders in circumstances where a winding up order is sought:
(1) The Court may order the winding up of a company if:
…
(e) directors have acted in affairs of the company in their own interests rather than in the interests of the members as a whole, or in any other manner whatsoever that appears to be unfair or unjust to other members; or
(f) affairs of the company are being conducted in a manner that is oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members or in a manner that is contrary to the interests of the members as a whole; or
(g) an act or omission, or a proposed act or omission, by or on behalf of the company, or a resolution, or a proposed resolution, of a class of members of the company, was or would be oppressive or unfairly prejudicial to, or unfairly discriminatory against, a member or members or was or would be contrary to the interests of the members as a whole; or
…
(k) the Court is of opinion that it is just and equitable that the company be wound up.
The Plaintiff helpfully highlights there are two bases upon which oppression may be found. The first basis was summarised by Hetyey AsJ in Re Dawning Investments Pty Ltd (Dawning Investments):[2]
Section 232 of the Corporations Act contemplates conduct that occurs within or in relation to a company that, according to accepted standards of corporate behaviour, is burdensome, harsh and wrongful, productive of unfair prejudice, or contrary to the interests of the members as a whole.[3]
[2](2022) 68 VR 226.
[3](2022) 68 VR 226, [30].
The second basis is contained in s 232(e) of the Corporations Act. Associate Justice Hetyey set out this basis, in Dawning Investments, as follows:
The words ‘oppressive to’, ‘unfairly prejudicial to’, and ‘unfairly discriminatory against’ as they appear in s 232(e) of the Corporations Act should be viewed as ‘a composite whole and … as different aspects of the essential criterion, namely commercial unfairness’. Unfairness has historically been regarded as the touchstone in assessing oppression.[4]
[4](2022) 68 VR 226, [31].
Section 467 of the Corporations Act sets out the Court’s powers on hearing an application for the winding up of a company:
(1)Subject to subsection (2) and section 467A, on hearing a winding up application the Court may:
(a)dismiss the application with or without costs, even if a ground has been proved on which the Court may order the company to be wound up on the application; or
(b)adjourn the hearing conditionally or unconditionally; or
(c)make any interim or other order that it thinks fit.
(2)The Court must not refuse to make a winding up order merely because:
(a)the total amount secured by one or more security interests in the property of the company is equal to or greater than the value of the property subject to the interest (or interests); or
(b)the company has no property.
(3)The Court may, on the application coming on for hearing or at any time at the request of the applicant, the company or any person who has given notice of intention to appear on the hearing of the application:
(a)direct that any notices be given or any steps be taken before or after the hearing of the application; and
(b)dispense with any notices being given or steps being taken that are required by this Act, or by the rules of court, or by any prior order of the Court; and
(c)direct that oral evidence be taken on the application or any matter relating to the application; and
(d)direct a speedy hearing or trial of the application or of any issue or matter; and
(e)allow the application to be amended or withdrawn; and
(f)give such directions as to the proceedings as the Court thinks fit.
(4)Where the application is made by members as contributories on the ground that it is just and equitable that the company should be wound up or that the directors have acted in a manner that appears to be unfair or unjust to other members, the Court, if it is of the opinion that:
(a)the applicants are entitled to relief either by winding up the company or by some other means; and
(b)in the absence of any other remedy it would be just and equitable that the company should be wound up;
must make a winding up order unless it is also of the opinion that some other remedy is available to the applicants and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.
(5)Notwithstanding any rule of law to the contrary, the Court must not refuse to make an order for winding up on the application of a contributory on the ground that, if the order were made, no property of the company would be available for distribution among the contributories.
(7)At any time after the filing of a winding up application and before a winding up order has been made, the company or any creditor or contributory may, where any action or other civil proceeding against the company is pending, apply to the Court to stay or restrain further proceedings in the action or proceeding, and the Court may stay or restrain the proceedings accordingly on such terms as it thinks fit.
The Court’s discretion in relation to finding oppressive conduct has occurred and the remedy that ought be granted, including the relief sought (here, that the Company be wound up) is broad. Chapter 2F of the Corporations Act is drafted broadly to afford members the maximum protection against commercially unfair conduct carried out against them by those who are in control of a company. To this end, in Trafalga West Investments Pty Ltd v Superior Lawns Australia Pty Ltd (No 6),[5] it was said that s 232 should not be hedged about by implied limitations. Justice M Osborne, in Liu v Gan(No 2),[6] helpfully summarised the operation of these provisions, having regard to ‘commercial unfairness’:
[5](2014) 102 ACSR 130.
[6][2025] VSC 372, [45]–[49].
The phrase’s individual elements ‘should be considered merely as different aspects of the essential criterion, namely, ‘commercial unfairness’.[7] ‘Commercial unfairness’ is assessed objectively from the perspective of a reasonable commercial bystander and, in the case of the conduct of a director, the perspective of a reasonable director in the circumstances.[8]
[7]Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, 704 (Young J).
[8]Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459, 473 (Brennan J).
The presence, or absence, of a reasonable commercial justification is relevant in assessing commercial fairness,[9] but the offending party’s motive is irrelevant.[10] It is the effect of the relevant acts that is material.[11] ‘The test is objective and focusses on the impact of the conduct on the victim. There is no mental element required’.[12] Thus it is not necessary for a plaintiff to demonstrate a lack of probity, want of good faith or breach of contract.[13] Further, a plaintiff may make its case by reference both to individual items of conduct and the cumulative effect of that conduct.[14]
[9]Re Spargos Mining NL (1990) 3 ACSR 1, 44 (Murray J).
[10]Campbell v Back Office Investments Pty Ltd (2009) 238 CLR 304, 360 [176] (Gummow, Hayne, Heydon and Kiefel JJ).
[11]Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55, [9] (Siopis, Rares and Davies JJA).
[12]Parker v Auswild [2022] VSCA 8, [130] (Ferguson CJ, Kennedy JA and Garde AJA).
[13]Knight’s Quest Pty Ltd v Daiwa Can Company (2018) 366 ALR 557, 588 [130] (Beach, Kyrou and Hargrave JJA).
[14]John J Starr (Real Estate) Pty Ltd v Robert R. Andrew (A’asia) Pty Ltd (1991) 6 ACSR 63, 67 (Young J); Youlden Enterprises Pty Ltd v Health Solutions (WA) Pty Ltd (2006) WAR 1, [29] (Martin CJ).
Fairness is not to be assessed in a vacuum, but in the context where the relevant conduct occurred. This includes not only the business, but the nature of the relationship between the people participating in it. In many cases, there will be an agreement or understanding between those engaged in the business:
Such an agreement or understanding will often be important in assessing whether the conduct in question constitutes oppression. Such agreements or understandings may result in the aggrieved party having a ‘legitimate expectation’ about the basis upon which he or she should participate in the management of the company.
In determining whether conduct is commercially unfair, regard may be had to the following principles:
(a)fairness is not assessed in a vacuum, and depends on context, which context includes the nature of commercial relationships;[15]
(b)fairness is assessed in relation to what is known at the time of the conduct and not to what subsequently transpires;[16]
(c)the court will balance competing interests rather than solely assessing the matter from one member’s point of view;[17]
(d)the concept of fairness, as a criterion for relief, confers a wide power in the courts to do what is just and equitable;[18]
(e)some courts have viewed fairness through the lens of equitable considerations including by referring to ‘legitimate expectations’ of members of the company;[19] and
(f)in assessing unfairness, it is appropriate to consider the behaviour of the person making the allegation of oppression.[20]
While the language of ‘legitimate expectation’ may require caution,[21] it remains useful[22] recognising that an applicant under s 232 does not have to show a breach of promise or unlawful conduct by the company or its directors; the denial of a legitimate expectation arising from the parties’ dealings may suffice.[23] Such dealings may include understandings or agreements between them as well as a course of conduct adopted by them over time.[24]
[15]O’Neill v Phillips [1999] 2 All ER 961.
[16]Chase Corp (Aust) Ltd v North Sydney Brick and Tile Co Ltd (1994) 35 NSWLR 1, 26 (Cohen J).
[17]Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692; Thomas v HW Thomas Ltd [1984] 1 NZLR 686.
[18]O’Neill v Phillips [1999] 2 All ER 961.
[19]Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667, [49] (Black J); Hunter v Organic and Natural Enterprise Group Pty Ltd (2012) 92 ACSR 183; [2012] QSC 383, [120] (Dalton J).
[20]Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, [388] (Priestly JA), [676] (Fitzgerald JA); Hunter v Organic and Natural Enterprise Group Pty Ltd (2012) 92 ACSR 183, [105] (Dalton J); Exton v Exton Pty Ltd (2017) 53 VR 520, [50] (Sifris J) citing Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692, 706.
[21]Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 288 ALR 310, [166]–[171] (Campbell JA).
[22]Re SRW Nominees Pty Ltd [2019] VSC 547, [52] (Robson J).
[23]Mopeke Pty Ltd v Airport Fine Foods Pty Ltd (2007) 61 ACSR 395, [45] (Brereton J).
[24]See Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, 683 [59] where Spigelman CJ said: ‘it may be that the longevity of a particular mode of decision making will, of itself, create something in the nature of an expectation, the frustration of which may constitute oppression or unfair prejudice’.
His Honour, in Liu v Gan (No 2), went on to discuss the legitimate expectations in the context of excluding a member or officer of the company:
Many instances of oppression involve exclusion from a company’s management of a person with a legitimate expectation of being involved in it. Courts have held that exclusion or removal of a person from a ‘management role’ may constitute oppression where that exclusion or removal:
(a)is in breach of a shareholders’ agreement;[25]
(b)takes place otherwise than in accordance with ‘agreed processes by which minority shareholders were to participate in management’;[26] and/or
(c)where it is inconsistent with a common understanding between members outside the company’s constitution which gives rise to a member’s legitimate expectation of participating in management.[27]
Following the House of Lords decision of Ebrahimi v Westbourne Galleries Ltd,[28] courts have held that failure to meet the ‘legitimate expectations’ of a member or shareholder of a company formed as a ‘quasi partnership’ could amount to oppression in circumstances where the corporation was formed based upon one such understanding and it would be inequitable to permit departure therefrom.[29]
The terminology of both ‘quasi partnership’ and ‘legitimate expectations’ has been questioned, but continues to be in use in judicial decisions. In context:
(a)a quasi-partnership has been described as ‘a majority controlled business requiring mutual cooperation and a level of trust between the members;[30] and
(b)the term ‘legitimate expectation’ refers to ‘an understanding or expectation of a member which, because of equitable considerations, can make it unfair for a party to exercise legal rights.’[31]
[25]Re Courtesy Real Estate (NSW)Pty Ltd (2013) 96 ACSR 593; [2013] NSWSC 1666, [19] (Black J); Campbell v Back Office Investments Pty Ltd (2009) 238 CLR 304 (Campbell JA).
[26]Allways Resources Holdings Pty Ltd v Samgris Resources Pty Ltd (2017) 121 ACSR 1; [2017] QSC 74.
[27]Re Treadtel International Pty Ltd (No 2) [2016] NSWSC 791, [103] (Robb J).
[28](1973) AC 360.
[29]Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343; McMillan v Teleo Enterprises International Pty Ltd (1995) 18 ACSR 683, 614; Tomanovic (2011) 288 ALR 310, [199].
[30]MMAL Rentals Pty Ltd & Ors v Bruning (2004) 63 NSWLR 167, [71] (Spigelman CJ).
[31][2025] VSC 372, [50]–[52].
Evidence
The Plaintiff’s witnesses, who gave oral testimony, were:
(a) Mr Jay Wijethilake, who was subpoenaed to give oral evidence and provide documents; and
(b) Mr Yap.
The Second Defendant called no witnesses, however, was cross-examined.
Mr Yap
Mr Yap gave oral evidence first. In examination in chief, Mr Yap’s evidence was that he met Ms Cheok through his uncle, Kevin, who had invested in previous developments with Ms Cheok — Mr Yap’s uncle introduced his family to Ms Cheok.[32] Mr Yap said he was employed by Ms Cheok, and was not initially provided with an employment contract, but that the time he worked for Ms Cheok was between March 2019 and July 2023. Mr Yap said his role was clerical in the beginning, however, he eventually progressed to the role of ‘onsite manager’.[33]
[32]T16.2–5.
[33]T16.13–15.
Mr Yap’s evidence is that he had arranged solely, for his own benefit, the purchase of the Property and paid the deposit for the purchase in the amount of $88,000, having received conditional finance from the Commonwealth Bank of Australia in the amount of $760,000. Mr Yap further said that if he had not been involved with Ms Cheok, he had means available to him to pay the purchase price in full. Mr Yap said he would have financed the purchase with funds in the bank and, as he was purchasing the Property for his family and himself, the funds would be pooled from his parents and himself. He indicated he was supported by his parents at this time. Mr Yap confirmed, upon being asked, that he did not ‘need’ Ms Cheok to complete the purchase of the Property.
Mr Yap’s evidence was that following the purchase, there was a decline in activity in the development of this Property. Mr Yap indicated that nothing significant occurred during 2020 and come March 2021 there was slightly more activity. Mr Yap said, at this point, he approached Ms Cheok requesting documentation reflecting the agreement and the Company’s investments to date, however, this did not progress ‘whatsoever’ and he continued prompting her for about a year. On about 22 June 2022, Mr Yap met with Ms Cheok and they discussed terminating the joint venture. Mr Yap’s evidence is that following the meeting, Ms Cheok showed some intent to consent to the termination of the ‘joint venture’.[34]
[34]T17.22–18.2.
Regarding his character with respect to the project, and developing the Property, Mr Yap said that he was of the understanding that:
[Ms Cheok] had unilateral control of the development in general, um, given her various, um, endeavours in the past and her portfolio. So, I was completely reliant on her and I did not know what else besides contributing in the funding at the start would be my role to be fair.[35]
[35]T18.9–14.
Mr Yap said that he engaged solicitors in September 2023 and ceased communication with Ms Cheok.
Mr Yap was then questioned about Ms Cheok’s losses in the joint venture. Mr Yap said that he is aware Ms Cheok claims to have lost more money in the project compared with Mr Yap, however, he disagrees. Mr Yap said that Ms Cheok’s actions do not reflect that they were for the benefit of the development and, in his view, it was all orchestrated. Mr Yap said that he understands the funding for the project came from his family and himself, including funds that had been paid into other developments which Ms Cheok managed. Mr Yap said that he and his family had ‘previously invested in and to her other corporate entities and then, for lack of better word, [were] recycled as her contribution for this project.’[36]
[36]T19.2–5.
Ms Cheok then cross-examined Mr Yap. Ms Cheok asked Mr Yap if he took a commission from the trade workers, because the quote was so high when he introduced those trade workers who came to finish the project. Mr Yap responded by stating ‘no, I did not take any commission.’[37] Ms Cheok then asked why Mr Yap threatened to quit if she did not agree to take on those particular trades people. Mr Yap responded by stating ‘I do not recall that occurring’.[38] It was unclear whether Ms Cheok was questioning Mr Yap about the development of the Property or another property. She then asked, ‘how did you resign the job [sic] then?’[39] Mr Yap responded stating ‘I resigned following our various disputes as to how proper construction methods would be utilised on site.’[40]
[37]T19.27–20.1.
[38]T20.2–5.
[39]T20.6.
[40]T20.6–8.
The cross-examination then turned to a discussion of the property next door, 19 Baker Street — a property which Ms Cheok was also developing. Ms Cheok then asked, and Mr Yap responded:
I can use your WeChat conversation before you left a message say if you don’t use this tiler, I’m going to resign the job and that tiler call me $100,000 to finish the 19 Baker Street next door. So, most of tradie introduce by you, they all expensive than the tradie I find trade from the public. Why is that?---As I recall it, I did not introduce any tradies. They were all found by you, Ms Cheok.
Okay. Then if you deny that I couldn’t say anything more. And the main reason if you resign - you threaten me - if you don’t use this tradie, I’m going to resign the job. I’m going to stuff up all project. That’s what you threaten me?---I deny that. That never occurred.
So, because Baker Street you only managed it two project, three project at a time. Why are you jacking onto five, six years not completing the project?[41]
This line of questioning ultimately stopped, as it concerned 19 Baker Street and not the Property.
[41]T20.9–24.
Finally, Ms Cheok asked:
You pay $88,000 (indistinct words) to the agent by yourself and put a conditional with a long approval with Commonwealth Bank, and you say that Commonwealth Bank approve you without trouble. Then why you come to me for helping you complete the purchase?---I did not come to you seeking for help.
Mr Wijethilake
Mr Wijethilake’s evidence followed. Mr Wijethilake is a sole trading solicitor. In examination in chief, he was taken through the subpoena which he was answering when attending to give evidence in the proceeding.
Mr Wijethilake confirmed he does not possess the original loan agreement document, as it was sent to the solicitors for the lender. Mr Wijethilake confirmed he was only able to find an email copy of the loan agreement signed at his office on 11 November 2019. Mr Wijethilake was taken to a copy of the loan agreement between Albert and Colleen Te Hennepe as Trustee of the Te Hennepe Family Superannuation Fund, as lender, and Seventeen Baker, as borrower. This version contained Mr Yap and Ms Cheok’s signatures, however, was not executed by the lender. Mr Wijethilake confirmed that he understands he witnessed the signing of this document, by Mr Yap and Ms Cheok, on about 11 November 2019, but said that he could not recollect this event from memory. Mr Wijethilake stated that the document was brought to him by his client, namely, Ms Cheok.
When directly asked if it is likely that, at the time of signing this version of the loan agreement, Mr Yap may have only been handed the signing pages, his response was that:
[I]t should - the standard practice is they read all the documents ah and there is a standard um advice template with me, so the full document should have been presented before I witness.
All right. But you don’t have specific?---I don’t have the specific ah, on this I read my file note, so I can’t recollect that.[42]
The examination in chief continued, and Mr Wijethilake’s evidence was that it is possible Mr Yap may have only been provided with the signing pages:
You can’t recollect. So, it is possible that only the signature pages had been removed from the document? ---Ah it could be possible after signing, because at the time of signing, the full document must have with me, otherwise I won’t have witnessed that document.[43]
[42]T26.31–27.6 (emphasis added).
[43]T27.7–11 (emphasis added).
Mr Wijethilake could not recollect whether Mr Yap said he was content to be guarantor under the loan agreement and stated:
Do you recall whether Mr Yap said anything at the meeting about whether he would be willing to be a guarantor to any loan provided to the company?---Ah if I have provided the ah source of that rights to the guarantor (indistinct words), given full understanding of the (indistinct) obligations at that time.
Did you give us - we haven’t seen a copy?---No, I can’t recollect from this document that I have.
All right. I suggest to you that you didn’t give a solicitor advice to Mr Yap in relation to this?---I can’t comment on that without looking at the file note on that.
HIS HONOUR: Have you got the file note?---The files is with my former practice, Your Honour. I started my own practice recently.[44]
The point of whether Mr Wijethilake could consult his file note again was not pressed.
[44]T27.22–28.5.
The examination continued and Mr Wijethilake indicated that he was in fact not acting for the guarantor, Mr Yap:
And if you were not engaged to provide the solicitor advice to Mr Yap, is it the case that you would have perhaps been less concerned as to whether the full document had been produced or not, if you were just merely acting as a witness?---Can you repeat the question, I - - -
If you were not asked to provide a full solicitor’s certificate and advice in relation to this particular document? ---Yep.
And you were not acting on behalf of the guarantor?---M’hmm.
Would you have still insisted on seeing a full copy of the loan agreement prior to execution?---Yes. Yes, as it’s standard practice, the full loan agreement should be there to witness loan agreement.
I just want to confirm once again that this is your standard practice, you don’t have a specific recollection? ---No, I don’t have any specific recollection, yes.[45]
Mr Wijethilake said at numerous points in his evidence that it was standard practice that a person signing documents of this nature would be taken through the entire document prior to signing.
[45]T28.14–29.
Mr Wijethilake was also asked about the handwriting on this first version of the loan agreement, which was ultimately not executed in full:
Do you recall either Mr Yap or Ms Cheok making any other annotations or handwritten marks other than signing the execution pages of that document?‑‑‑Not at the time of the signing, no. The document that I produced, that’s the only document that I have in my outcome, so I can’t comment anything about further annotations to it.[46]
[46]T28.7–13.
Mr Wijethilake was then taken to the fully executed version of the Loan Agreement between Vivian Anthony as trustee for the Anthony Family Trust, as lender, and Seventeen Baker, as borrower.[47] Mr Wijethilake confirmed that his handwriting was on the execution pages of the Loan Agreement, as the ‘witness’ to this document. He was then taken to the two versions of the loan agreements and a comparison of those pages was undertaken, using physical copies of the signing pages. Mr Wijethilake indicated that both versions of the loan agreement and signing pages for each agreement appeared to be identical.
[47]CB41–7 (execution pages).
It is not in dispute that the change in the name of the lender in this second version of the loan agreement was amended by handwriting. This version of the loan agreement was initialled by an ‘LC’ and ‘RY’ on 15 November 2019 in the same handwriting.
When asked to explain why there would be two versions of the loan agreement containing his signature, Mr Wijethilake said:
Yeah, yeah, I can see that they’re two different documents. Um the one that I produced, that’s the one that I found in my emails, so it should be the one - the one that I am talking.[48]
[48]T31.8–11; CB253–60 (document produced by Mr Wijethilake).
Concluding the examination in chief, the following exchange took place:
I put it to you that the document appearing at p41 may have been altered without your knowledge, what do you say to that?---I can’t comment on that one, but that be the situation around the same day, again brought it back, but (indistinct words) I can’t comment anything. Either this was later altered, could be a possibility, as you said.
But - sorry, I don't mean to cut you off - but you agreed with me earlier that the signature page is for each of the documents for identification?---Yes, signature. Looks like the same.[49]
[49]T31.18–28.
Ms Cheok did not cross-examine Mr Wijethilake, despite being given the option to do so.
Ms Cheok
Prior to her giving oral evidence, I explained the following to Ms Cheok:
We can clear the signature pages on p48 and 260. The evidence is they’re exactly the same. All right. Ms Cheok, now that’s the end of the case against you. So, it’s now - this is a stage where you run your - provide your evidence and I think the position seems to be, as I understand it, that your affidavit will stand as your evidence-in-chief so to speak, your main evidence …[50]
[50]T34.3–10.
Ms Cheok, following making her affirmation, confirmed the contents of her affidavit dated 30 April 2025 are true and correct, and she indicated she wished to rely upon this affidavit.
In cross-examination, Ms Cheok confirmed that she first spoke to Mr Yap about the Property on about 10 December 2018, after Mr Yap signed the contract of sale and paid the deposit. She said that Mr Yap approached her to be part of the development and noted that she was ‘trying to help to save the project, to save his $88,000 plus to continue the project and make profit.’[51]
[51]T36.13–4.
Ms Cheok confirmed she was not aware that Mr Yap had already obtained finance for the purchase through the Commonwealth Bank of Australia. She was then asked whether Mr Yap authorised her to seek funding at a higher interest rate than that of the Commonwealth Bank funding. Ms Cheok said ‘he was aware [of] everything’, and that Mr Yap ‘was in front of the solicitor with me and sign all document [sic].’[52]
[52]T36.29–30.
The following exchange regarding funding for the project then took place:
I’m talking about in December 2018, almost a year before the property settled, Mr Yap simply didn’t need your finance to settle the project. Do you accept that? ---No. How come he come $88,000, he can complete the purchase. He think he can make money the development of six townhouses for $88,000 only.
You’re aware that Mr Yap and his family have made multiple real property investments in Victoria, aren’t you? I’m sorry, I’ll reframe that. At the time of the meeting, Mr Yap and his family had made multiple property investments in Victoria, hadn’t they?---Yes, they do.
Some of those investments were by entities formerly operated by you, yes?---Yes.
So, you would’ve understood that Mr Yap had options available to him to settle the property that did not involve you? ---No, I don’t think they have the capability to do that, otherwise he will not come to me and you owe me doing that, and he in condition he asked for job in our operation because he think he bringing a project and let me to go through that with him together and he will get a job at the same time, he will make money for just $88,000. He set up all this, I didn’t know until now I realise (indistinct).[53]
[53]T36.31–37.22.
At this point, Ms Cheok stated ‘how can you roll the fund to this project without complete to the previous two projects? That project is before this project, we already put deposit, and we running that and during the development process [sic].’[54] I take this to be a reference to the property at 19 Baker Street, which Ms Cheok was developing prior to Mr Yap purchasing the Property. Ms Cheok clarified her evidence is that she said to Mr Yap that it may be possible to roll in the contributions from the other projects into this one.[55] There was some back and forth around the initial conversations regarding the possibility for Ms Cheok to come on board with Mr Yap’s purchase and the development of the Property. Ultimately, Ms Cheok confirmed that during those meetings and discussions, it was initially always discussed as an option. Ms Cheok confirmed that once the Nomination Form was signed, Mr Yap was eager to progress the development of the Property compared with her other developments. Ms Cheok then confirmed that Mr Yap’s family had invested significant amounts into various other property developments managed by her, totalling approximately $228,000.
[54]T37.27–30.
[55]T38.5–11.
The cross-examination continued, and Ms Cheok was asked about Mr Yap’s responsiveness and work done on this development:
Ms Cheok, your evidence is that from the time at which you became to be involved in this project that Mr Yap was unresponsive to your requests, is that right? ---He resigned work and broke all my WeChat or broke message, broke my phone and not responds to my email.
So, is it correct to say you began to be quite frustrated with Mr Yap’s involvement with the project?---No. I’m happy to involve because he, he – I agree him to be my assistant, to manage all projects and I understand if he involve, he can do more. He can do the project quicker and can make the project turn to profit with me together.
Your evidence is that you had a good working relationship with Mr Yap at that time?---Yeah, he call me ‘mum.’[56]
[56]T40.31–41.12.
Turning to the Nomination Form, Ms Cheok’s evidence was that Mr Yap physically signed that document. It was then put to her:
[T]hat it’s not true because we can see from the form that those signatures are identical copies to one another. Look closely at the form and tell me what you think about that conversation.
…
So, Ms Cheok, I put it to you that those two signatures for Mr Yap are identical?---Yes.
But you stated a moment earlier that you and Mr Yap were together and physically signed the documents. Do you remember giving that evidence?---Can’t remember for long, um, but he definitely signed one. Probably he didn’t sign two. Then I completed.
Ms Cheok, I put it to you that those are electronic signatures that you copied and pasted onto the document?---But he agree with that transfer to our company right.
HIS HONOUR: So, that’s correct. You did apply the electronic signatures?---Possibly.[57]
[57]T42.5–21 (emphasis added).
Regarding signing the various versions of the loan agreement, Ms Cheok’s evidence was:
You were the person who arranged the loan as opposed to Mr Yap, is that right?---I had to arrange that, yes.
Yes?---Because he didn’t get the loan from Commonwealth Bank.
All right. So, Mr Yap wasn’t involved in preparing the loan documents?---The solicitor involved, yes, I give both ID to them and we form the company and he sign, yeah agree with ASIC.
…
Yes, I organise it.
Yes, and he didn’t, Your Honour, he didn’t have the connection to doing that. He didn’t have - he just went to Commonwealth Bank, but he didn’t get the bank loan, and I was trying to help to save his money.
Would you accept that he was reliant on you at that point in time to deal with him honestly?---Yes.
And in the process of lining up this potential loan, you didn’t mention to Mr Yap that he was going to be listed as a guarantor on a loan, did you?---Well, he graduate from university, he’s at that age. He saw the loan document. How come he didn’t understand?
…
When you were lining the loan up, you didn’t mention to Mr Yap that he would be required to be a guarantor, did you?---Yes, I do, he saw on document. I didn’t write up the loan document, but every loan document they need to (indistinct) guarantor by directors.
…
So, at the meeting with the solicitor, you simply told Mr Yap to sign some corporate documents and handed him the 1 sheets of paper for signing, didn’t you?---No, he got the electronic, I email as well before he come to the office, he read through it, he understood, he (indistinct) was a student, he had the fully education and understand English, all this. No one can muck around with this document.
One of the papers that you handed him at the meeting was a loose execution page for what ultimately was attached to the loan agreement. Do you agree with that?---No. The whole set of document, and explained by the solicitor, and he come with the father together, with three people in front of the solicitor.[58]
[58]T43.9–45.13.
It was then put to Ms Cheok the similarities in the signing pages of the various documents:
I put it to you that you altered the document which starts at p253 to be in the form of the document starting at p41?---No. No, because the lender, Albert, they didn’t come up with the funding, and the broker told me we had to arrange you another lender, so we went back to the solicitor sign a second time. I remember they went after work hour, we went to the office and two times appointment to sign.
I put it to you that that’s not true, Ms Cheok, that’s not in your affidavits, is it?---No, I told (indistinct) about this, he asked many times, I said this document was void already, because they didn’t come up with the lending - funding.
And Mr Wijethilake, when he was in the witness box earlier, confirmed that he’d only seen one copy of the document. Sorry, I don’t want to verbal his evidence. He was only aware of one copy of that document being in his file? ---Who’s he? Who realised that one copy?
The solicitor who was giving evidence before?---Yeah, because the old document, it’s void, we told them we had to go back there to sign other document, definitely he went back there, went a second time to sign, but because he thinks the loan over seven years, he won’t remember so many, but this one, this file, was void.
And what date do you allege that you went back and signed the second document?---Ah about two days after we signed the first one.
I put it to you that you made those amendments without Mr Yap’s knowledge?---I won’t do that, why - why (indistinct) amend like this, I don’t understand, you – what’s the purpose of doing this? We just get funding and settlement, why amend all this document for?
At no point did you disclose to Mr Yap that you had amended the document?‑‑‑No, I didn’t amend it. It’s from the later, solicitor to doing that, and they – I’m sure they got electronic copy by email as well.[59]
[59]T46.3–47.7.
Ms Cheok then gave evidence that the handwriting at the top of the first page of the Loan Agreement, being both ‘L.C. 15/11/2019’ and ‘R.Y. 15/11/2019’, was written by her. She was then questioned regarding the seriousness of these matters:
I put it to you that you’re lying and that you did amend that document after the meeting with the solicitor?---I don’t, I don’t know any why I do that. I don’t know. Why, why you come up with these, ah, question? No idea. We just leave the funding to settle the, the property because otherwise he will lose $88,000.
If you had amended this document, you would accept that would be quite a serious matter, wouldn’t you?---No, this is require by the lender’s solicitor to hand over on the day before they release the funding. So, he understand all of this. We, we were so good relationship at the time.
…
Because you wanted to ensure that there were no hiccups in terms of settling the property, you amended the loan document?---No, I didn’t amend it. I just initial over that because they need initial because the lender, the original lender couldn’t come up the funding. So, we had to come back. They did come back second time with the solicitor for sure and I not lying. Probably they’re missing to do the initial for that part. But others, all his signature.
You didn’t mention in your affidavit that there were two meetings?---I didn’t mention. That means probably we just thinking it’s not, not really important for the part.
It’s not important?---Yeah. I did mention to the solicitor. He ask me (indistinct words) I come in the picture because I told him that, ah, Herman wasn’t commit to release the funding and that’s why, why’s this document. But that’s, that funding from Herman never happened when we sign. So, we have to replace this document and that’s draw by, um, in the solicitor. I think was (indistinct) lawyer. You can go to write email to them. It was, it was from lawyer or (indistinct). Only two lawyer had our, ah, the lender’s document.
…
When you say Herman, are you speaking about Albert Tehennepe and Colleen Tehennepe?---Yeah, that’s, that’s Herman Albert. Yeah, that’s the one. Yeah.
…
Yes. Now, if you had amended this loan document, you’d accept it’d be a quite serious matter, wouldn’t you?---No, I didn’t amend it.
This is - - -?---You put additional issue in that because that’s before they released the, the document, they have to issue the understand that’s from Vivian. Not from Albert.
Because this is a document which on its face would potentially make Mr Yap liable to guarantor. You would agree?---Yes, we both have guarantor. That’s a loan document of course. He’s one of the director, 50 per cent shareholder.[60]
[60]T48.1–50.5.
Ultimately, Ms Cheok confirmed:
Those pages aren’t the same, are they?---Not the same because you, you, you copy reverse way. They all separate pages. They were all separate pages. The long document not allowed to have front and back copy. But you see the instructions put in - - -
So, they were loose pages?---I believe so.
We’ve got various loose pages and again, I’ll ask you to go back to pp260 and p48. So, the end page of each of those documents.
…
Yeah, we go back there the next day or two. I forgot the next day or the day after we go back there. They sent the documents still there.
Ms Cheok, as I understand your evidence before, it was that you signed a document on one day?---Yep.
And then because that lender couldn’t lend, you signed a different document on another day?---Yes.
So, you’ve signed twice on two separate occasions?---Yes.
I put it to you that these signature pages, 48 and 260, are identical. I encourage you to closely examine them. This isn’t a trick, Ms Cheok. I’m just merely making reference to the fact that when one signs a document, your signature is not identical every single time?---Of course.
There will be slight variations. Would you accept that? ---Accept, yeah.
…
HIS HONOUR: Ms Cheok, you’ve accepted as I understand it that pages court book 48 and 260 are exactly the same?---I probably say yes. Ah, yeah, yeah, I think so. But probably the solicitor using to save paper.
…
They’re exactly the same, aren’t they?---Yes.
Yes, all right. So, why would you go back and sign a second time if these are exactly the same and the execution page is on two separate documents?---Yeah. I think maybe the, the lender only request some pages to be signed because of we change the lender, the others the same.
Is that a serious answer?---I’ve got no idea, because seven years, it’s over seven years’ time.
…
I’m going to cut to the chase, Ms Cheok?---Yeah.
You applied his signature to this document, didn’t you?---Yes.
…
HIS HONOUR: But your evidence is, as I understand it, that he didn’t agree to a variation of the loan? You’ve just given that evidence?---Yes, I think so, I don’t - I can’t remember.[61]
Following this, Ms Cheok was asked if she wished to change her evidence, to which she responded ‘No’.[62]
[61]T51.11–54.3.
[62]T55.3–10.
The questioning then turned to the further amendment of this version of the loan agreement in May 2021, whereby the term and interest rates were increased. Ms Cheok said that this was at a time when Mr Yap ‘refused to sign’.[63] She confirmed that Mr Yap refused to talk to her and, at that time, they had started arguing.
[63]T50.7–13.
Ms Cheok’s evidence was that by June 2022 the relationship had deteriorated significantly and the parties were fighting a lot. It was put to Ms Cheok that this was what led to the removal of Mr Yap as a director by Ms Cheok unilaterally. This was not an issue in dispute, as Ms Cheok admitted she did this and that it was improper.[64]
[64]T58.4.
It was then put to Ms Cheok that after Mr Yap was removed as a director, the funding arrangements were further increased from $595,000 to $840,000.
Finally, Ms Cheok was then asked whether she wished for the Company to be wound up. Ms Cheok indicated that she wished for the Company to remain registered, because a ‘wind up is not really good for directors or shareholder[s]’.[65] Despite this, Ms Cheok admitted that the Company has a large amount of debt owing to the lender still and she indicated they have been chasing her for repayment. Ms Cheok then conceded that the Company does not hold any assets at present to meet its debts.[66]
[65]T60.24–25.
[66]T61.20–1.
Submissions and analysis
The Plaintiff filed written opening submissions; made oral opening submissions; filed written closing submissions; and made oral closing submissions.
The Second Defendant, via the Company’s director (Ms Cheok), made oral opening submissions (although, they were more akin to evidence); provided written closing submissions; and made very brief oral closing submissions (which were more akin to evidence).
Plaintiff’s submissions
The Plaintiff submitted, in all of the circumstances, the only appropriate remedy in this proceeding is an order to wind the Company up under the provisions of the Corporations Act (specifically s 461(1)(e) and (k)), as this is the only remedy available where there is no remedy less drastic that would do justice between the parties. In my view, the evidence supports this position. The Plaintiff submits this is in circumstances where the Company has no other assets and is most likely insolvent. It is important to note here that Ms Cheok gave evidence that the Company still owes a debt to the lender in the approximate amount of $100,000. The Court, however, is not required to make findings about this. It is also noted again that the Company holds no other assets, as the Property has been sold by mortgagee in possession.
Further, the Plaintiff submitted the Company was established for the sole purpose of the property development venture, and that the Company is not currently trading and therefore has no business to be continued. The Plaintiff submitted this, despite Ms Cheok’s remarks at the conclusion of the hearing indicating her position that she would like the Company to remain registered. The Plaintiff highlighted, in this regard, that there are only two shareholders and submitted that neither party has a willingness to continue working with the other given the events that have transpired and the acrimony between the parties.
The Plaintiff submitted that it has complied with the requirements under the Corporations Act in a winding up application, and confirmed it published notice of the application on ASIC’s website and provided notification to ASIC in the required form on 11 August 2025. The Plaintiff has further filed with the Court, on 12 August 2025, a Consent of Liquidator, proposing to appoint Craig Bolwell of Bolwell Corporate Advisory.
At this juncture, it is particularly important to note s 467(4), in light of the evidence given in the proceeding and the admissions made by Ms Cheok regarding the management of the affairs of the Company. Specifically, it appears here, there is no other remedy available to the parties, where Ms Cheok’s evidence is that the Company does not have any assets available to meet the remaining debt outstanding to the lender, and where she is not in a position to provide funds to enable the Company to continue its registration. It is also important to note the sole purpose of the Company’s incorporation was to be a special purpose vehicle for the purchase and development of the Property, and then presumably the sale, in order to make a profit. It is not in contention that the Property has already been repossessed by the lender and sold. Despite this, Ms Cheok’s evidence is that the amount of approximately $100,000 remains payable to the lender. Having regard to these facts alone, I am of the view that the appropriate remedy is to wind up the Company under the provisions of the Corporations Act. It is further important to note that, despite suffering a significant loss in its investment in the Company and the joint venture, the only orders the Plaintiff now seeks (set out in the Schedule to the Plaintiff’s Opening Submissions) is that the Company be wound up with a costs order in favour of the Plaintiff.
The crux of the Plaintiff’s submissions are that the director of the Second Defendant, Ms Cheok, engaged in four acts of oppression, namely that Ms Cheok:
(a) ‘forged’ Mr Yap’s signature on the Nomination Form without his knowledge or consent;
(b) altered the Loan Agreement;
(c) ‘forged’ Mr Yap’s signature on the Deed of Variation to extend the loan term; and
(d) removed Mr Yap as a recorded director on ASIC’s records without his knowledge or consent.
The Plaintiff’s submissions regarding each of these purported acts of oppression are discussed further below.
Acts of oppression
Signature on the Nomination Form dated 10 October 2019
The Plaintiff made the following submissions regarding the Nomination Form:
(a) Despite Mr Yap having been named as purchaser in the contract of sale, it is clear that the Company was nominated to purchase the Property. It is said the evidence demonstrates that the Nomination Form, which appeared on its face to have been signed by Mr Yap (as nominator and representative of nominee) and Ms Cheok (as representative of nominee), was on the file of the former solicitor for the Company. The Plaintiff highlighted the following passage from Mr Yap’s Second Affidavit:
Although I had a contract with the vendor for the purchase of the Property and already had finance arranged, Lucille handled the settlement of the Property. The purported nomination form for the purchase dated 10 October 2019 [page 46 of ‘RY‑2’] records my signature but I did not sign this document. I was not aware of this document until about 14 July 2024 after Jay, acting for the Company, provided material in response to the May 2024 Affidavit.[67]
[67]CB175 [41].
(b) Ms Cheok, after initially resisting the propositions put to her in cross‑examination regarding whether she applied Mr Yap’s signature to the Nomination Form, stated later during the course of her cross-examination that she ‘possibly’ did.[68]
[68]T42.20–21.
(c) Mr Yap’s evidence, coupled with Ms Cheok’s evasive answers, were such that the Court should conclude that Mr Yap did not sign the Nomination Form; but rather, that Ms Cheok applied Mr Yap’s signature to this document without his knowledge or consent.
(d) The Nomination Form is not a matter of controversy in itself, as the parties did intend for the Company to acquire the Property for the purpose of the joint venture. However, it was improper of Ms Cheok to have applied Mr Yap’s signature to the Nomination Form, rather than simply speaking to Mr Yap and asking him to sign it.
(e) Although the consequences of this unauthorised affixing of Mr Yap’s signature were not particularly problematic, it is the act itself which is a ‘cause for concern’ and set the tone for the relationship between the parties and how Ms Cheok would deal with Mr Yap going forward.
Having regard to Mr Yap’s consent to the nomination, and the uncertainty around who signed this document in light of the oral evidence, I do not consider this to be a real issue in dispute.
Alteration of Loan Agreement
The Plaintiff made the following submissions regarding changes made to the Loan Agreement:
(a) Firstly, that the Court should prefer the evidence of Mr Yap as opposed to Ms Cheok regarding the circumstances surrounding entry into the Deed of Variation.
(b) Ms Cheok’s evidence was inconsistent and difficult to follow, with which I agree. Ms Cheok stated at various times that the initial loan agreement, signed at Mr Wijethilake’s office, was signed as one document with the signature pages together.[69] However, later in her evidence, Ms Cheok spoke of separate loose pages and of two separate attendances at Mr Wijethilake’s office to, firstly, sign the loan agreement with the Albert and Colleen Te Hennepe as Trustees of the Te Hennepe Family Superannuation Fund as lender and, secondly, a couple of days later, to supposedly sign the Loan Agreement recording Vivian Anthony as trustee for the Anthony Family Trust as lender.
[69]T45.08–18.
(c) Ms Cheok accepted that it was only her handwriting which appeared at the top of the fully executed Loan Agreement where she initialled both ‘L.C.’ and ‘R.Y.’.
(d) Ms Cheok was further unable to explain in cross-examination why the signature pages, which appeared at Court Book pages 48 and 260, were identical, other than to suggest that the solicitor must have used the signature page from the first time they signed for the second time they signed, opposed to requiring the parties to sign again. It is submitted that this is completely implausible. It is said that should the Court accept Ms Cheok’s evidence on this issue, it would require the Court to ignore the fact that the signatures at Court Book pages 47 and 259 also appear to be identical, despite each clearly recording different counterparties.
(e) Finally, it was submitted that the Court should find:
(i) that Ms Cheok arranged the financing of the loan with the broker, which was used to fund the purchase of the Property, without Mr Yap’s involvement;
(ii) there was only a single meeting attended by Ms Cheok and Mr Yap with Mr Wijethilake on or about 11 November 2019;
(iii) at that meeting Mr Yap signed the execution pages of the initial loan agreement as loose-leaf pages;[70]
[70]Being the versions at CB259–60.
(iv) sometime after this meeting, Ms Cheok created the Loan Agreement recording Vivian Anthony as trustee for the Anthony Family Trust as lender, which was done by altering the loan agreement signed at Mr Wijethilake’s office on 11 November 2019 which recorded Albert and Colleen Te Hennepe as Trustee for the Te Hennepe Family Superannuation Fund as lender; and
(v) that this alteration was not approved or consented to by Mr Yap and, indeed, that he had no knowledge of it at the time it occurred.
Signature on Deed of Variation
The Plaintiff submitted, with respect to signing the Deed of Variation to extend the loan term, that:
(a) Mr Yap’s evidence, in the First Yap Affidavit, on execution of the initial loan agreement, which occurred in May 2021, is as follows:
Again, without my knowledge or consent, on about 11 May 2021, Lucille caused Seventeen to enter into a deed of variation to the loan agreement with the Mortgagor in a document called ‘Deed of Variation of Loan Agreement’ (Deed) [pages 34–39 of RY‑1]. The Deed:
(a) records me again, in my personal capacity, as a guarantor. I did not agree to guarantee the mortgage in that capacity or any other capacity; and
(b) includes on the execution page signatures that are recorded to be mine. I did not sign these pages or any other pages of the Deed.[71]
[71]First Yap Affidavit, CB10, [24].
(b) Ms Cheok gave evidence, in cross-examination, that Mr Yap would not have agreed to an extension to the loan, so she applied his signature to the Deed of Variation in May 2021 which extended the term of the Loan Agreement.[72]
(c) Ms Cheok then gave conflicting evidence about how the Loan Agreement was executed.[73] It is submitted that, ultimately, what should be taken from Ms Cheok’s evidence is that she did indeed affix Mr Yap’s signature to the Loan Agreement without his consent. It is also highlighted that Mr Yap’s evidence was not undermined and, in light of Ms Cheok admitting, during cross‑examination, that she affixed Mr Yap’s signature to the first loan deed.
Removal of Mr Yap as Company director with ASIC
[72]T53.18–30.
[73]T55.3–22.
The Plaintiff submitted that the removal of Mr Yap as a director with ASIC, without his knowledge, is an act of oppression for the following reasons:
(a) Ms Cheok lodged the ‘change to company details’ form with ASIC resulting in the removal of Mr Yap as a director of the Company on 26 October 2022.
(b) No evidence was adduced that the Company had adopted a company constitution. Therefore, the replaceable rules under the Corporations Act applied to the governance of the Company. Section 203C of the Corporations Act provides that the members of a company may, by resolution, remove a director from their office. No such resolution was passed.
(c) Mr Yap’s evidence was that he was removed as a director of the Company without notice to him. Ms Cheok’s evidence, under cross‑examination, was that she did sign the ASIC form to remove Mr Yap as director, and admitted that this was not appropriate for her to do so unilaterally.
(d) Finally, it was submitted that the Court should find it was clearly wrong for Ms Cheok to have done this. The importance of directors not submitting false information with ASIC was highlighted, and the basis for this reasoning includes ensuring that people dealing with companies have a level of confidence that the ASIC records properly identify those who are directors of a company at a relevant time.
It was held, in Re SRW Nominees Pty Ltd,[74] that removing a member as a director, in the case of a quasi‑partnership, constitutes oppression. Notwithstanding this, it is the accumulation of events and circumstances which must be considered by the Court on a case by case basis.
[74][2019] VSC 547.
Second Defendant’s Submissions
The Second Defendant, via Ms Cheok (in her capacity as director), made oral opening submissions which were more akin to evidence, and therefore have been treated as evidence, rather than opening submissions.
Ms Cheok submitted, in written closing submissions, that:
(a) She denies any wrongdoing or irregularity in relation to the preparation; execution; or custody of the initially signed loan agreement dated 11 November 2019. Further, that document was retained by the lender.
(b) Regarding the authenticity of signatures and initialling, Ms Cheok stated she ‘cannot vouch for handwriting or witnessing, as these are matters for the solicitors or witnesses who supervised execution’.[75] Further, once the documents were executed, they were returned to the broker and solicitors who arranged the funding. Ms Cheok stated that she cannot speak to what was done, if anything, to the documents thereafter. It is submitted by Ms Cheok, there is no evidence of any material change to the commercial terms of the agreement, save for the substitution of the name of the mortgagee, which she submitted is consistent with ordinary practice where an initial proposed funder withdraws and another steps in.
[75]Second Defendant’s Written Closing Submissions (21 August 2025), [2.1].
(c) With respect to Mr Yap’s knowledge of these matters, she denies that Mr Yap did not have knowledge of the transactions. It is said that at all times Ms Cheok acted in her capacity as director to secure funding necessary for the Company’s benefit. Ms Cheok submitted it was the Company’s responsibility, through its directors, to manage its financial affairs. Finally, it is submitted that Ms Cheok did not act outside her authority, and the Company received the benefit of the funds advanced under the Loan Agreement.
(d) Generally, it is submitted by Ms Cheok that:
(vi) the preparation, witnessing, and safekeeping of the loan documents was the sole responsibility of the lender’s solicitors;
(vii) in standard conveyancing practice, once documents are signed, directors are not custodians of the originals. Solicitors hold originals, brokers coordinate lenders, and changes (such as naming the ultimate mortgagee) are confirmed by the lender’s representatives; and
(viii) accordingly, any issue as to the authenticity of signatures or notations must be addressed by the parties who retained and managed the documents — not by Ms Cheok.
(e) Regarding the relief sought, Ms Cheok submitted there is ‘no basis’ for the relief. It is said the Plaintiff has not demonstrated any quantifiable loss flowing from the ‘alleged irregularities’. On this point of loss, it was also submitted that even if the Plaintiff’s case and position is accepted by the Court, the Plaintiff has not established any net financial loss; the mortgagee has already recovered capital through its power of sale in February 2025; and any further claim is speculative, unsupported by calculation, and falls within the responsibility of the lender — not the second defendant. For the reasons below, and having regard to the forms of relief available following a finding of oppression, especially having regard to the broad discretion of the Court in matters such as this, I reject this submission.[76]
(f) Finally, it is submitted regarding credibility that, any attempt to impugn Ms Cheok’s credibility by suggesting ‘collusion’ or fabrication, should be rejected. It is said Ms Cheok acted in good faith and within the scope of her duties as a director (relying on professional advisers and standard legal practice). It is submitted that any allegation of ‘collusion’ is unsupported by the evidence.
[76]See above, [72]–[75].
Admissions
During her oral evidence, Ms Cheok freely made the following admissions:
(a) that she affixed Mr Yap’s signature to the Deed of Variation; and
(b) that she unilaterally removed Mr Yap as a director of the Company without his consent, authorisation, or otherwise any meeting of members or officers and an accompanying minute of meeting.
The characterisation of these matters as admissions should not be in contention, given Ms Cheok openly admitted to doing so. An admission is a representation (including one inferred from conduct) made by a party to a proceeding which is adverse to the maker’s interest in the outcome of the proceeding. Here, Ms Cheok admitted to affixing Mr Yap’s signature to the second loan agreement on multiple occasions and, despite being confused when questioned repeatedly about this conduct, she did not wish to change this evidence. Ms Cheok also openly admitted that she unilaterally removed Mr Yap as a director with ASIC, which she conceded was the wrong thing to do. The balance of proof in determining an admission is whether it is reasonably open for the Court to find that the admission was made.
Credibility
It is important here to discuss issues of credibility and the inherent probability that an event may or may not have occurred according to a witnesses oral testimony. The correct approach to the assessment on what probably occurred, requires significant weight being placed on the contemporaneous documents which were created at the time the events took place.
In LL Up Pty Ltd v Kegland Distribution Pty Ltd (Kegland),[77] I referred to Lander J in Brookfield v Yevad Products Pty Ltd who said, in relation to the importance of documents in terms of testing credibility:
Often, especially in commercial causes, the best evidence of the events the subject of the inquiry in the trial is contained in the contemporaneous documents. Usually, documents are created in circumstances where parties do not expect the documents to surface in a trial. They often, therefore, contain the true account of the contemporaneous event.[78]
[77][2024] VSC 651, [23].
[78][2004] FCA 1164, [416].
Further, in Painter v Hutchinson,[79] Lewison J identified a non‑exhaustive list of indicators of unsatisfactory witness evidence, including:
[79][2007] EWHC 758 (Ch), [3].
(a) evasive and argumentative answers;
(b) tangential speeches avoiding the questions;
(c) blaming legal advisers for documentation (statements of case and witness statements);
(d) discovery and evidence shortcomings;
(e) self-contradiction;
(f) internal inconsistency;
(g) shifting case; and
(h) selective disclosure of documents or information.
In Webb v Getswift(No 5),[80] Lee J referred to the reasoning of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Limited[81] (which has been cited with approval in this Court):
[80][2019] FCA 1533, [17]–[18].
[81][2013] EWHC 3560 (Comm), [15]–[23].
As Leggatt J said in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) at [15]‑[23], there are a number of difficulties with oral evidence based on recollection of events given the unreliability of human memory. Moreover, considerable inference with memory is also introduced in civil litigation by the procedure of preparing for trial. As his Lordship noted, a witness is asked to make a statement, often when considerable time has already elapsed since the relevant events. The statement is usually drafted by a solicitor who is inevitably conscious of the significance for the case of what the witness does nor does not say. The statement is often made after the memory of the witness has been ‘refreshed’ by reading documents. The documents considered can often include argumentative material as well as documents that the witness did not see at the time and which came into existence after the events which the witness is being asked to recall. It may go through several iterations before it is finished. As Lord Buckmaster famously said, the truth ‘may sometimes leak out from an affidavit, like water from the bottom of a well’. This may be overly cynical, but the surest guide for deciding the case will be as identified by Leggatt J at [22]:
… the best approach for a judge to adopt in the trial of a commercial case, in my view, to place little if any reliance at all on the witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.[82]
In Gestmin SGPS SA v Credit Suisse (UK) Limited,[83] Leggatt J continued:
This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross‑examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.
[82]White v Woodward [2020] VSC 258, [14] (John Dixon J); 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd (2023) 167 ACSR 401, [144] (M Osborne J).
[83][2013] EWHC 3560 (Comm), [22].
Similarly, in Armagas Ltd v Mundogas SA (The Ocean Frost),[84] Robert Goff LJ made the following observation:
It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence … reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.
[84][1985] 1 Lloyd’s Rep 1, 57.
Having regard to the indicators identified in Painter v Hutchinson, Ms Cheok’s confusion when answering questions, and her tendency to change her evidence or to move from one position to another, her evidence must be evaluated having critical regard to the documentary evidence which supports her oral testimony.[85] There were multiple instances when the Court was required to clarify the evidence Ms Cheok wished to give,[86] particularly when that evidence appeared to be in contrast to earlier evidence. For example, Ms Cheok stated the loan documents were signed as one document, however, this position changed when she later gave evidence that separate loose pages were provided for signature. Having regard to these inconsistencies, the preferred oral evidence is the evidence of Mr Yap and Mr Wijethilake. Concerning Ms Cheok’s evidence, the documentary evidence, including the various signed documents when compared with one another, is preferred, and supplemented by Ms Cheok’s oral evidence. This oral evidence of Ms Cheok includes confirmation that she did initial the first loan agreement for Mr Yap, and that she had at times affixed Mr Yap’s signature to documents, including the Nomination Form and loan agreements without his knowledge or authority.
[85]Plaintiff’s Written Closing Submissions, [3].
[86]See above, [61]–[65].
Briginshaw
It is also important to discuss the principles laid out in the High Court decision of Briginshaw v Briginshaw.[87] The case is significant as it provides the test for evaluating evidence in the context of serious allegations. Given the serious nature of the allegation that Ms Cheok affixed Mr Yap’s signature to the loan documentation, and its possible characterisation, it is necessary to keep in mind the standard of proof in civil proceedings, and the operation of s 140 of the Evidence Act 2008.
[87](1938) 60 CLR 336.
The Court of Appeal in GP Building Holdings Pty Ltd v Voitin[88] affirmed the importance of the principles in Briginshaw:
[88](2022) 69 VR 299 (Niall, Sifris and Walker JJA), [81], [83]–[85] (citations omitted).
The judge referred to s 140 of the Evidence Act and the decision of Dixon J in Briginshaw, citing the following passage:
When, in a civil proceeding, a question arises whether a crime has been committed, the standard of persuasion is, according to the better opinion, the same as upon other civil issues. But, consistently with this opinion, weight is given to the presumption of innocence and exactness of proof is expected.
…
In relation to the respondent’s knowledge, the judge said that given the gravity of the allegations, there was a need for ‘clear proofs’ and the giving of ‘appropriate weight to the presumption of innocence’.
The ordinary standard of proof required of a party who bears the onus in civil proceedings is on the balance of probabilities.
In Re Day, Gordon J summarised the principles in the following way:
However, the seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether an issue has been proved to the reasonable satisfaction of the tribunal. Where, as here, fraud is alleged, ‘reasonable satisfaction’ is not produced by inexact proofs, indefinite testimony, or indirect inferences. This does not mean that the standard of persuasion is any higher than the balance of probabilities. It does mean that the nature of the issue necessarily affects the process by which the reasonable satisfaction is reached.
Why? There is a conventional perception that members of society do not ordinarily engage in fraudulent conduct and a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.
The nature of the allegation requires, as a matter of common sense, the careful weighing of testimony, the close examination of facts proved as a basis of inference and, on appeal, a comfortable satisfaction that the tribunal reached both a correct and just conclusion.
The tribunal must feel an actual persuasion of the occurrence or existence of a fact before it can be found. Where direct proof is not available and satisfaction of the civil standard depends on inference, ‘there must be something more than mere conjecture, guesswork or surmise’ — there must be more than ‘conflicting inferences of equal degrees of probability so that the choice between them is [a] mere matter of conjecture’. An inference will be no more than conjecture unless some fact is found which positively suggests, or provides a reason in the circumstances particular to the case, that a specific event happened or a specific state of affairs existed.
It has been established that where the allegation is one of fraud, the allegation must be distinctly pleaded and proved, and that a court should not make a finding of fraud on inexact proofs, indefinite testimony, or indirect inferences. Balancing this, in Henderson v Queensland,[89] Gageler J observed that the process of inferential reasoning involved in drawing inferences from facts proved by evidence adduced in a civil proceeding cannot be reduced to a formula and is informed by a number of principles, including Briginshaw, and that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.
[89](2014) 255 CLR 1.
Importantly, in this proceeding, no allegation of fraud is pleaded in the Originating Process. Bearing this in mind, it is sufficient to note the seriousness of the oppressive conduct, which has been established; particularly having regard to Ms Cheok’s admissions to signing documents on behalf of Mr Yap, her co‑director and 50% shareholder, without his knowledge or consent.
Conclusion and orders
For the preceding reasons, I find, and declare for the purposes of s 232 of the Corporations Act, that Ms Cheok has engaged in several acts of oppressive conduct, specifically by affixing Mr Yap’s signature on the second loan agreement and removing him as a director of the Company, and then proceeding to vary the loan, for which Mr Yap was a guarantor, in all respects in the absence of Mr Yap’s knowledge or consent.[90] Accordingly, pursuant to the Court’s powers under s 233(1)(a) of the Corporations Act, I will make an order that the Company be wound up.
[90]Cf Corporations Act, s 1307.
I otherwise reserve the question of costs.
The parties are to confer and bring in orders which give effect to these reasons.
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