Thorne Developments Pty Ltd v Laird

Case [2022] QSC 85

SUPREME COURT OF QUEENSLAND

CITATION:

Thorne Developments Pty Ltd v Laird [2022] QSC 085

PARTIES:

THORNE DEVELOPMENTS PTY LTD

(Plaintiff)

v
GRAHAM DAVID LAIRD AS TRUSTEE FOR THE LAIRD FAMILY TRUST
(First Defendant)
and
RICK WILLIAMSON INVESTMENTS PTY LTD ACN 120 400 446
(Second Defendant)
and
GRAHAM DAVID LAIRD
(Third Defendant)
and
RICHARD JOHN WILLIAMSON

(Fourth Defendant)

FILE NO/S:

BS3570 of 2014

DIVISION:

Trial

PROCEEDING:

Trial of separate questions

ORIGINATING COURT:

Supreme Court of Queensland at Brisbane

DELIVERED ON:

16 June 2022

DELIVERED AT:

Brisbane

HEARING DATE:

3- 5 May 2022

JUDGE:

Bradley J

ORDER:

THE ORDER OF THE COURT IS THAT:

1. Pursuant to s 601AH(3)(c) of the Corporations Act 2001 (Cth) (the “Act”), the following things done during the period from 4 December 2011 to 4 September 2013 are validated:

(a)     The plaintiff making the share sale agreement with the first, second, third and fourth defendants and Brett John Thorne dated 28 February 2012 (the “SSA”);

(b)     The plaintiff receiving $95,000 paid to the trust account of Reardon & Associates solicitors on or about 12 December 2011, for or on behalf of the plaintiff or at its direction;

(c)     The plaintiff receiving $300,000 paid to trust account of Reardon & Associates solicitors on or about 28 February 2012, for or on behalf of the plaintiff or at its direction;

(d)     The plaintiff taking steps to perform its obligations under clause 4.2 and clause 5.1(a)(iii) of the SSA on or about 28 February 2012, including:

(i)      executing a transfer of one ordinary share in Transparent Enterprises Pty Ltd ACN 123 992 325 (“TEPL”) from the plaintiff to the first and second defendants;

(ii)     executing a transfer of one class B share in TEPL from the plaintiff to the first and second defendants; and

(iii)   delivering these executed transfers and the related share certificates to the first and second defendants;

(e)     The first and second defendants taking the steps to perform their obligations under clause 4.3(a) and clause 4.3(b) of the SSA on or about 28 February 2012;

(f)      The entry in the register of members of TEPL recording the first and second defendants as the joint holders of one ordinary share and one class B share in TEPL, which shares were formerly held by the plaintiff, on or about 28 February 2012; and

(g)     The plaintiff making the loan agreement with the first and second defendants on or about 28 February 2012.

2. Pursuant to s 601AH(3)(d) of the Act:

(a)     The receipt of payments validated by paragraphs 1(b) and (c) of this Order are deemed to be receipts of payments pursuant to the SSA made by the first and second defendants as the Buyers to the plaintiff as the Seller;

(b)     The steps validated by paragraph 1(d) of this Order are deemed to be acts of performance by the plaintiff as the Seller pursuant to the SSA; and

(c)     The steps validated by paragraph 1(e) of this Order are deemed to be acts of performance by the first…

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Details
AGLC
Thorne Developments Pty Ltd v Laird [2022] QSC 85
Case
[2022] QSC 85
Decision Date

CaseChat Overview and Summary

Thorne Developments Pty Ltd initiated legal proceedings against Laird and others, seeking orders under section 601AH of the Corporations Act 2001 (Cth) to validate certain actions taken during the period when the plaintiff was deregistered as a company. The dispute centred on whether the Court should validate specific acts carried out during the deregistration period and make associated deeming orders to confirm the nature and effect of these acts. The primary legal issue the court had to address was whether the Court should validate the plaintiff's acts during the deregistration period and make associated deeming orders to ensure these acts had legal effect.

The Court reasoned that the validation of the plaintiff's acts was necessary to address uncertainties and to restore the parties to the position that would have prevailed had the plaintiff not been deregistered. The Court found that the validation of the acts in question was appropriate given the circumstances, as it would align with the primary purpose of such orders, which is to ensure that the acts had the intended legal effect. The Court also noted that the validation and deeming orders would help to maintain the integrity of the transaction and to protect the interests of the parties involved.

The Court concluded that it was appropriate to validate certain acts done during the deregistration period and to make associated deeming orders. These included the validation of the share sale agreement, the receipt of payments, the transfer of shares, and the steps taken to perform obligations under the agreement. The Court further deemed the receipt of payments as being pursuant to the share sale agreement and the steps taken by the parties as acts of performance under the agreement.

The Court made several orders to validate specific acts and to deem certain actions as having been performed under the share sale agreement. These orders ensured that the acts carried out during the deregistration period would have legal effect, thereby restoring the parties to the position they would have been in had the plaintiff not been deregistered.

Orders

Orders of the court

THE ORDER OF THE COURT IS THAT:

1. Pursuant to s 601AH(3)(c) of the Corporations Act 2001 (Cth) (the “Act”), the following things done during the period from 4 December 2011 to 4 September 2013 are validated:

(a) The plaintiff making the share sale agreement with the first, second, third and fourth defendants and Brett John Thorne dated 28 February 2012 (the “SSA”);

(b) The plaintiff receiving $95,000 paid to the trust account of Reardon & Associates solicitors on or about 12 December 2011, for or on behalf of the plaintiff or at its direction;

(c) The plaintiff receiving $300,000 paid to trust account of Reardon & Associates solicitors on or about 28 February 2012, for or on behalf of the plaintiff or at its direction;

(d) The plaintiff taking steps to perform its obligations under clause 4.2 and clause 5.1(a)(iii) of the SSA on or about 28 February 2012, including:

(i) executing a transfer of one ordinary share in Transparent Enterprises Pty Ltd ACN 123 992 325 (“TEPL”) from the plaintiff to the first and second defendants;

(ii) executing a transfer of one class B share in TEPL from the plaintiff to the first and second defendants; and

(iii) delivering these executed transfers and the related share certificates to the first and second defendants;

(e) The first and second defendants taking the steps to perform their obligations under clause 4.3(a) and clause 4.3(b) of the SSA on or about 28 February 2012;

(f) The entry in the register of members of TEPL recording the first and second defendants as the joint holders of one ordinary share and one class B share in TEPL, which shares were formerly held by the plaintiff, on or about 28 February 2012; and

(g) The plaintiff making the loan agreement with the first and second defendants on or about 28 February 2012.

2. Pursuant to s 601AH(3)(d) of the Act:

(a) The receipt of payments validated by paragraphs 1(b) and (c) of this Order are deemed to be receipts of payments pursuant to the SSA made by the first and second defendants as the Buyers to the plaintiff as the Seller;

(b) The steps validated by paragraph 1(d) of this Order are deemed to be acts of performance by the plaintiff as the Seller pursuant to the SSA; and

(c) The steps validated by paragraph 1(e) of this Order are deemed to be acts of performance by the first and second defendants as the Buyers pursuant to the SSA.

3. Within seven days the parties are to file written submissions if they contend any order should be made as to the costs of and incidental to the separate hearing directed by Davis J on 18 October 2021.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The transfer of the plaintiff’s shares in TEPL and the resignation of Mr Thorne as a director of TEPL were related to concerns expressed by the OLGR about Mr Thorne’s association with the conduct of regulated businesses by the Showbar Group companies. The validation of the transfer would remove any uncertainty about the end of this association between Mr Thorne and those businesses. It would confirm that the concern of the public regulator had been addressed.Conclusion In the circumstances, I am satisfied that it is appropriate to make orders validating some of the acts done during the deregistration period, to the extent that it is necessary to do so for those acts to have legal effect, and that it is appropriate to make associated deeming orders confirming the nature and effect of those acts. This will restore the parties to the position that would have prevailed had the plaintiff not been deregistered, which is consistent with the primary purpose of such orders. To this end: (a)The plaintiff’s act in making the SSA and the LA should be validated; (b)The plaintiff’s receipt of $95,000 paid to the trust account of Reardon & Associates solicitors on or about 12 December 2011 and the plaintiff’s receipt of $300,000 paid to the same trust account on or about 28 February 2012 for the benefit of the plaintiff (or at its direction) should be validated and deemed to be receipts of payments pursuant to the SSA made by the defendants as Buyers to the plaintiff as the Seller;(c)The plaintiff taking steps to perform obligations under clause 4.2 and clause 5.1(a)(iii) of the SSA, on or about 28 February 2012, including executing a transfer of one ordinary share and a transfer of one class B share in TEPL from the plaintiff to Mr Laird and RWI, and delivering the executed transfers and the related share certificates to Mr Laird and RWI should be validated and should also be deemed to be acts of performance by the plaintiff as the Seller pursuant to the SSA; (d)Mr Laird as trustee for the LFT and RWI taking steps to perform obligations under clause 4.3(a) and clause 4.3(b) of the SSA, on or about 28 February 2012, should be validated and should also be deemed to be acts of performance by them as the Buyers pursuant to the SSA; and(e)The entry in the register of members of TEPL recording Mr Laird as trustee for the LFT and RWI as the joint holders of one ordinary share and one class B share in TEPL, which were formerly held by the plaintiff, on or about 28 February 2012, should be validated. The plaintiff does not press for an order about the mortgage granted by Mr Laird on 28 February 2012: see [72] above. The plaintiff seeks two further orders. One would validate the “payment of all dividends” by TEPL since 28 February 2012 to RWI and to Mr Laird as trustee for the LFT as joint holders of the shares formerly held by the plaintiff. The other would validate the “receipt of all taxation imputation credits attached or accruing to” those dividends.

Ratio Decidendi

Legal Principle Established

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