Waters v Diesel Holdings Pty Ltd

[2024] VSCA 77

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2023 0088

JOSHUA ROY WATERS	First Applicant
and
JRW ENTERPRISES PTY LTD (ACN 622 752 943) as trustee for THE J R WATERS FAMILY TRUST	Second Applicant
v
DIESEL HOLDINGS PTY LTD (ACN 145 993 326) AS TRUSTEE FOR THE DANIEL BAXTER FAMILY TRUST	First Respondent
AND
DANIEL JOHN BAXTER	Second Respondent

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JUDGES:	FERGUSON CJ, WALKER JA and GINNANE AJA
WHERE HELD:	Melbourne
DATE OF HEARING:	10 April 2024
DATE OF JUDGMENT:	29 April 2024
MEDIUM NEUTRAL CITATION:	[2024] VSCA 77
JUDGMENT APPEALED FROM:	[2023] VSC 455 (M Osborne J)

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CORPORATIONS – Directors – Automatic disqualification pursuant to s 206B(1)(b)(ii) of Corporations Act 2001 – Whether director had committed ‘offence involving dishonesty’ – Director convicted of family violence offences and bail offences – Whether offence ‘involves dishonesty’ depends on offence provision or common law rule not circumstances of offending – Dishonesty must be ‘inherent’ in offence but does not need to be element of offence – Offences in present case did not ‘involve dishonesty’ – Appeal dismissed.

Corporations Act 2001 ss 206A, 206B.

Australian Securities Commission v Lord (1991) 33 FCR 144; Pollard v DPP (Cth) (1992) 28 NSWLR 659; ABC v Victims of Crime Assistance Tribunal [2021] VSC 730; Barber v Law Society of New South Wales [No 2] [2001] NSWSC 861; DPP v Verigos [2007] VSC 97; Re Magna Alloys & Research Pty Ltd (1975) 1 ACLR 203; R v Barlow (1997) 188 CLR 1; Peters v The Queen (1998) 192 CLR 493, discussed.

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Counsel
Applicants:		Mr H Heuzenroeder with Ms S Weinberg
Respondents:		Mr B J Murphy
Solicitors
Applicants:	AXM Law
Respondents:	Velocity Legal

FERGUSON CJ:

1. I agree with Walker JA.

WALKER JA:

1. The second respondent, Mr Baxter, is the director of the first respondent (‘Diesel Holdings’). He was previously also a director of another company, Rock Solid Structural Developments Pty Ltd (‘Rock Solid’). The applicant, Mr Waters, was also a director of Rock Solid. In 2021 and 2022 Mr Baxter was convicted of various offences, including causing injury intentionally, contravention of a family violence intervention order, contravening a conduct condition of bail and committing an indictable offence whilst on bail.

2. Section 206B(1)(b)(ii) of the Corporations Act 2001 (Cth) provides that a person is disqualified from managing corporations if the person is ‘convicted of an offence that involves dishonesty and is punishable by imprisonment for at least 3 months’. ‘Dishonest’ is defined in s 9 of that Act to mean ‘dishonest according to the standards of ordinary people’.

3. After Mr Baxter’s convictions, Mr Waters caused documents to be filed with the Australian Securities and Investment Commission (‘ASIC’) notifying it that Mr Baxter had ceased to be a director of Rock Solid. Mr Waters also caused Rock Solid to sell property and pay the entirety of the proceeds of sale to JRW Enterprises Pty Ltd (‘JRW Enterprises’), which Mr Waters controlled, by the issue of certain special units.…