Y Primavera v T Bakos

[2019] NSWSC 825

Supreme Court

New South Wales

Medium Neutral Citation:

Y Primavera v T Bakos & Anor [2019] NSWSC 825

Hearing dates:

30 April; 1 – 3 May and 8 – 10 May 2019 (last submissions 7 June 2019)

Decision date:

03 July 2019

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

The Plaintiff be entitled to recover from the First Defendant amounts in respect of overpaid salary and unauthorised transfers.

 Orders made directing the parties as to conduct for giving effect to this judgment.

Catchwords:

CORPORATIONS – directors – fiduciary duties – overpayment of salary – where director transfers salary payments to themselves personally and to their associated company – quantification.

 

CORPORATIONS – directors – fiduciary duties – unauthorised transfers – where director transfers funds to associated company – whether such transfers made in good faith in the company’s best interests and for proper corporate purposes – quantification.

  CIVIL PROCEDURE – pleadings – content of pleadings – where additional specified payments claimed to have been transferred in breach not particularised – whether claim should be extended to include additional unparticularised transfers.

Legislation Cited:

- Civil Procedure Act 2005 (NSW) ss 56-58, 100
- Evidence Act 1995 (NSW) s 140

Cases Cited:

- Australian Growth Resources Corp Pty Ltd (recs and mgrs apptd) v Van Reesema (1988) 13 ACLR 261; 6 ACLC 529
- Banque Commerciale SA (en liqn) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279
- Briginshaw v Briginshaw (1938) 60 CLR 336
- Chew v R (1991) 4 WAR 21; 5 ACSR 473
- Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658
- Downer Connect Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2008] VSC 77
- Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd [2011] FCA 1154; (2011) 86 ACSR 393
- JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20; (2016) 329 ALR 625
- Kirby v Sanderson Motors Pty Ltd [2002] NSWCA 44; (2001) 54 NSWLR 135
- McGuirk v University of New South Wales [2009] NSWSC 1424
- Ngurli Ltd v McCann (1953) 90 CLR 425
- Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063; (2015) 333 ALR 674
- Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233
- Re Punters Show Pty Ltd [2017] NSWSC 605
- Taylor v Lederman [2013] VSC 99

Category:

Principal judgment

Parties:

Yelena Primavera (Plaintiff)
Tanya Bakos (First Defendant)
Andrew Hugh Jenner Wily in his capacity as liquidator of Best in Pressure Care Pty Ltd (in liquidation) (Second Defendant)

Representation:

Counsel:
L Gor (Plaintiff)
H Grace (First Defendant)

  Solicitors:
WMD Law (Plaintiff)
One Group Legal (First Defendant)

File Number(s):

2017/90542

Judgment

1. The Plaintiff, Ms Yelena Primavera seeks a range of relief against the First Defendant, Ms Tanya Bakos, in respect of the affairs of Best in Pressure Care Pty Ltd (in liq) (“BIPC”). Ms Primavera is the aunt of Ms Bakos and also the aunt of Ms Stephanie Cerovac, who was involved in the matters in dispute but is not party to the proceedings. The Second Defendant, Mr Andrew Wily, was the liquidator of BIPC, but no relief is presently sought against him and he did not take an active part in the proceedings. Ms Primavera brings these proceedings as the assignee of claims that BIPC has or may have against Ms Bakos, pursuant to an Assignment Agreement dated 11 April 2014, entered into with the former liquidator of BIPC. There is no contest in the proceedings as to the efficacy of that assignment or the nature of the rights assigned. The proceedings continued over several days, with extensive cross-examination, the tender of voluminous documentary records, and substantial submissions by both parties, although the amounts involved were modest at the commencement of the proceedings, and the range of claims pressed and the amounts likely to be recovered were further reduced by developments during the course of the hearing.

Background facts and affidavit evidence

2. Several background facts are common ground between the parties. Until 1 April 2011, a predecessor entity of BIPC, First In Pressure Care Pty Limited (“FIPC”) carried on the business of selling and hiring medical equipment to hospitals and others under the name “Bosshard Medical Equipment” (“Bosshard Medical”) (Statement of Claim (“SOC”) [1]; Second Further Amended Defence (“Defence”) [1]). On or about 1 April 2011, BIPC purchased the Bosshard Medical business from FIPC for a purchase price of $800,000 (SOC [3]; Defence [3]). Ms Bakos contends that completion of the sale and purchase of the Bosshard Medical business by BIPC did not occur until 15 April 2011, pointing to the contract date of 1 April 2011 and the specification of the completion date in the Sale Agreement as 14 days after the contract date. It appears that the conduct of the business was simply informally assumed by BIPC, rather than by a formal completion of the Sale Agreement, and the balance of the purchase price payable under the Sale Agreement was paid in early April 2011 (Primavera 13.10.17 [123]). BIPC then carried on that business until it was wound up by this Court on 5 March 2013 and Mr Wily was appointed as its liquidator (SOC [2]; Defence [2]).

3. Mrs Primavera and Bakos were both directors of BIPC (SOC [6]–[7]; Defence [6]–[7]). The two shareholders in BIPC were Say Yes to Pressure Care Pty Ltd (“SYPC”), of which Ms Primavera was the sole director and sole shareholder, and Pressure Care Solutions Pty Ltd (“PCS”). It is common ground in the pleadings that Ms Bakos was the sole director of PCS and held a 20% shareholding in PCS and owed fiduciary obligations to that company; and Ms Bakos was also a director and secretary of FIPC from 11 February 2011 until 21 January 2015, was the sole shareholder of FIPC and, at least by reason of her role as a director of FIPC, owed fiduciary obligations to FIPC (SOC [7]; Defence [7]). In late March 2011, PCS and SYPC entered into a Shareholders Deed with respect to BIPC, which provided that all decisions on any matter set out in Schedule 2 of the Shareholders Deed must be made by a majority resolution of shareholders and, in particular, required such a resolution for the entry into an agreement or arrangements with a shareholder or related party of a shareholder (as defined) and the payment of directors’ fees, expenses and remuneration or other benefits.

4. For completeness, a number of the corporate entities involved in these proceedings have since been deregistered. PCS was deregistered in May 2014, FIPC was deregistered in January 2015 and SYPC was deregistered in July 2015.

Plaintiff’s affidavit evidence

5. I now turn to the parties’ affidavit evidence and cross-examination, although substantial parts of that evidence and cross-examination are now of limited relevance, given the narrowing in the scope of the matters in issue in the proceedings. There were a significant number of contests of fact between the parties as to matters addressed in that evidence, which it is largely not necessary to resolve in order to determine the matters in issue.

6. Ms Primavera relied on her first affidavit dated 13 October 2017, which exhibited a substantial volume of documents (Ex P1). Ms Primavera referred to the circumstances in which her nieces, Ms Bakos and Ms Cerovac, and Ms Cerovac’s husband, had acquired the Bosshard Medical business through FIPC in about 2009. She also referred to discussions in September 2010 between Ms Primavera and Ms Bakos as to Ms Cerovac’s and her husband’s exit from that business, which led to an agreement that Ms Primavera would pay $400,000 to acquire a shareholding in FIPC, which would equate to half of the Bosshard Medical business. Ms Primavera’s evidence is that Ms Bakos informed her that she would receive a wage of at least $120,000 per year and a company car and other expenses from the business. By letter dated 27 October 2010 (Ex P1, Tab 8), Ms Cerovac, on Bosshard Medical letterhead, advised the ANZ Bank that:

“I would like to confirm that Yelena Primavera would join the partnership along with working within the company. It is expected that her annual salary will be a minimum of $120,000 nett.”

7. Ms Primavera refers to subsequent discussions with Ms Bakos, in which Ms Bakos advised her of her accountant’s advice that BIPC should be established to purchase the Bosshard Medical business from FIPC for a purchase price of $800,000 (Primavera 13.10.17 [106]) and to discussions relating to the shareholdings in BIPC (Primavera [109]). Ms Primavera also refers to her having obtained a loan from ANZ Bank in the amount of $495,000 to assist with funding the purchase of Bosshard Medical by BIPC from FIPC, which was secured, inter alia, by the property she owned with her husband and by an individual guarantee and indemnity from her husband (Primavera 13.10.17 [112]). Ms Primavera also refers to several payments that she made in connection with the purchase of BIPC. Ms Primavera led evidence as to BIPC’s operations and the conduct of its bank accounts, which I need not address where there is now no contest as to that issue in the proceedings. Ms Bakos also responded, in that affidavit, to Ms Primavera’s affidavit sworn 13 October 2017.

8. Ms Primavera’s affidavit also addressed the allegations of overpayment of salary to Ms Bakos and of unauthorised transfers of funds from BIPC’s account to the account of PCS. I will address that evidence in dealing with the claims in respect of those matters below. Ms Primavera also led evidence as to payments made to FIPC by customers of the Bosshard Medical business. I need not address that evidence where Ms Primavera’s claim in respect of that matter was abandoned at the hearing.

9. Ms Primavera relied on a further affidavit dated 7 September 2018. Ms Primavera there addressed evidence which was then expected to be led by the Defendants as to conversations with Ms Bakos’ accountant, on which Ms Bakos no longer relied at the hearing, and the process adopted for payment of her salary. Ms Primavera also referred to discussions in respect of the salary payable to her and other amounts that were payable to her in respect of the storage of goods, which are relevant to Ms Bakos’ allegation that she removed funds from BIPC to PCS in order to protect them from unauthorised withdrawals by Ms Primavera. Ms Primavera also led evidence in respect of the claim for unauthorised transfers from BIPC to PCS, and replied to Ms Bakos’ evidence in response to Ms Primavera’s first affidavit.

10. Ms Primavera was cross-examined at some length. It seemed to me that Ms Primavera was generally attempting to give honest evidence, although that evidence was influenced by her conviction that she had been unfairly treated by Ms Bakos, Ms Cerovac and Ms Cerovac’s husband. She was cross-examined as to the circumstances in which she acquired an interest in the Bosshard Medical business, and fairly accepted the significance of Ms Bakos to that business and the limits of her own experience at the time she joined the business. She accepted that Ms Bakos continued to perform her duties with the business after Ms Primavera acquired an interest in BIPC, although Ms Primavera then hoped to be trained to do the same things as Ms Bakos. Ms Primavera also accepted that she had never worked in a medical supplies business before she started working for Bosshard Medical; that Ms Bakos was then more experienced than her and Ms Bakos had more responsibilities in the business and more involvement with clients than her, although she did not necessarily accept that Ms Bakos did more work than her; and that Ms Bakos was more important to BIPC’s success than her (T123). Nonetheless, Ms Primavera maintained her position that Ms Bakos was entitled to be paid $54,080 per annum, although Ms Primavera had been offered a substantially higher salary (T124). It seems to me that Ms Primavera likely did believe that she would receive that salary, since that would be necessary to support the payments on the amounts she had borrowed to invest in the business and she rightly pointed to the disadvantage to her and her family in her borrowing that amount, secured on her family home, and losing that house when she could not repay it (T126). In any event, Ms Bakos now does not contest the proposition that her salary was $54,080 per annum before tax.

11. Ms Primavera accepted in cross-examination that she did not prepare the table that appeared in paragraph 154 (page 17) of her first affidavit, which was prepared by her lawyers on her instructions, from figures she had obtained from banking records, and that a table of payments to PCS in paragraph 98 (page 32) of her first affidavit was also prepared by her lawyers (T137-138). The fact that those tables were prepared in that manner was neither particularly surprising nor damaging to Ms Primavera’s credit. Ms Primavera was cross-examined at some length to her knowledge of matters underlying the table to PCS, although the questioning and her answers was of little assistance, where the nature of the relevant payments depended on documentary evidence and was largely not within her personal knowledge (T139).

12. Ms Primavera was also cross-examined as to the circumstances in which she had made payments from BIPC to herself and claimed that on at least one occasion she had done so with the approval of Ms Cerovac’s husband and characterised that amount as a “dividend” from BIPC and referred to the fact that Ms Bakos or Ms Cerovac had taken larger amounts (T144-145). Ms Primavera was cross-examined about and offered explanations for other payments she had made from BIPC to her, including payment of an amount to her husband who had worked at BIPC while she and Ms Bakos were away, and payment of an amount that she claimed Ms Bakos had previously invited her to take if she needed money following her return from overseas (T146). Ms Primavera also accepted in cross-examination that she had withdrawn monies from BIPC as she needed them, but claims that she had asked Ms Cerovac’s husband for permission to do so at the beginning, and later ceased to do so when Ms Bakos, Ms Cerovac and her husband would not give her that money and she knew there was money in the account (T150). She contended, in cross-examination, that she was taking those monies because she was owed that money and more by BIPC (T151), implicitly because of BIPC’s failure to pay the salary to which I referred above. It is not necessary to reach findings as to whether any of those transactions were justified or informally authorised by Ms Bakos or Ms Cerovac or Ms Cerovac’s husband, given the findings that I reach below on other grounds.

13. Ms Primavera was also cross-examined, at some length, as to payments made by PCS which appear to relate to expenses of BIPC or the Bosshard Medical business by reference to a bundle of documents tendered by Ms Bakos (Ex D1). That cross-examination added little to what appeared from the face of the documents, since Ms Primavera had little personal knowledge of the payments which had been made by Ms Bakos and not by her. Ms Primavera was also cross-examined as to payments made to FIPC in respect of transactions with customers that had previously been FIPC’s customers and became BIPC’s customers after the sale transactions. That aspect of Ms Primavera’s claim is no longer pressed and I need not address that cross-examination.

14. Ms Primavera also relied on the affidavit dated 9 April 2019 of her solicitor, Ms Fleet, which identified the source of documents on which Ms Primavera relied in the proceedings, including documents provided to Ms Primavera at a conference in July 2012, with Ms Bakos and her representatives, and documents produced by third parties on subpoena. Those documents were exhibited to Ms Fleet’s affidavit (Ex P2). Ms Primavera also tendered two affidavits of Ms Bakos dated 6 November 2012 (Ex P6) and 17 April 2019 (Ex P3).

First Defendant’s affidavits

15. Ms Bakos relies on her affidavit dated 1 June 2018. Significant parts of that affidavit which sought to justify payments to Ms Bakos by reference to advice given by BIPC’s accountant were not read. Ms Bakos led affidavit evidence responding to the allegations of overpayment of salary to her and of unauthorised transfers of funds from BIPC’s account to the account of PCS. I will address that evidence in dealing with the claims in respect of those matters below. Ms Bakos also led evidence as to payments made to FIPC by customers of the Bosshard Medical business. I need not address that evidence where, as I noted above, Ms Primavera’s claim in respect of that matter was abandoned at the hearing. Ms Bakos also led evidence in response to Ms Primavera’s first affidavit.

16. Ms Bakos was cross-examined at substantial length. In significant parts of her cross-examination, particularly in dealing with Ms Primavera’s claim in respect of payments made to FIPC for services provided prior to completion of the sale, Ms Bakos gave responsive and persuasive evidence, which appeared to be supported by the documentation in evidence. That may reflect the existence of a strong defence to that claim, which was ultimately not pressed. Ms Bakos’ evidence was less convincing in respect of other areas of the case, including overpayments of salary and payments to PCS, where her position was more difficult. I accept that Ms Bakos was cross-examined as to matters of considerable complexity, given the complex schedules of transactions which both parties had prepared. I also recognise that Ms Bakos was repeatedly taken to single documents in different volumes of the Court Book in cross-examination, often at the same time, in order to seek to address particular transactions, and that would have made addressing those transactions more difficult. She was also cross-examined about a large number of individual transactions of which she would be expected to have little specific recollection, and to be able to do little more than to guess at an explanation of them from the documents that had been placed before her. The difficulties with that approach in cross-examination were exacerbated by the fact that, as emerged in her re-examination, the documents that were put before her were sometimes incomplete (likely by inadvertence rather than design) and her ability to explain transactions was likely undermined by the incompleteness of what she was shown. Other propositions were put to Ms Bakos which were based on incorrect factual premises, for example that she was overseas on the date on which she claimed to have prepared a reconciliation that was addressed in her evidence. It was not surprising that she found it difficult to explain that matter, which was inconsistent with her understanding and, in fact, not the case.

17. Ms Bakos was cross-examined at some length about payments to FIPC in relation to customers which later became customers of BIPC. As I have noted above, Ms Primavera no longer presses her claim in respect of that matter. Ms Bakos was cross-examined at some length as to her position as a director and shareholder of FIPC and denied that she was ever a shareholder in FIPC (T245). Little turns on that matter given the findings that I have reached below. Ms Bakos accepted in cross-examination that she caused BIPC to make direct wage payments to her personal account and also caused BIPC to make payments to PCS, which in turn made salary payments to her personal account (T286). There were occasions on which Ms Bakos gave apparently convincing explanations of transactions that Ms Primavera contended were wage payments to her personally, for example, by reference to a notation to a transaction that indicated that it was a reimbursement for a wage paid to another staff member (T286). On other occasions, she could not explain transactions, where documents that might have explained them either were not in evidence or at least were not drawn to her attention (for example, T288). There were occasions on which Ms Bakos appeared to be reluctant to give a direct answer to questions that might cause difficulty for her case, including the straightforward question whether Mr Sabbagh, an accountant who had been subpoenaed to give evidence in her case but was ultimately not called, had prepared her 2012 tax return on her behalf (T291).

15. Ms Bakos was cross-examined at length (T323ff) as to her explanation that she made transfers of funds to PCS in order to protect them from unauthorised withdrawals by Ms Primavera. Ms Bakos maintained the evidence that she had given in chief in that respect. It is not necessary to reach any credit finding in respect of that evidence in order to assess the propriety of those transactions. It is preferable that I do not do so where her difficulties in responding to some of the questions asked may be explicable by their complexity; the fact that she was being shown specific documents without necessarily having a full understanding of their context; and the substantial demands that the number of documents which she was shown and the manner they were presented would have placed on any witness’s recollection and endurance.

Ms Primavera’s claim against Ms Bakos in respect of overpaid salary

The pleaded case and affidavit evidence

19. I will now turn to the claims that are pressed by Ms Primavera. I have sought below to address the numerous changes in the parties’ positions in the course of hearing and to determine the matters which remain in issue between the parties, as I understand them. There is a substantial degree of complexity in that process. While it was undoubtedly desirable that the parties seek to narrow the issues between them, given the complexity of those issues and the relatively small amount in issue in the proceedings, that process continued throughout the hearing, throughout closing submissions, and by further schedules of transactions between BIPC and PCS submitted after closing submissions, at my invitation. That has narrowed the matters in issue, to some extent, but has made it more difficult to identify, with clarity, the final position of each party. I also note that both parties’ evidence and submissions extended well beyond the matters that I will address below. This arose because substantial parts of those submissions were addressed to matters that are now no longer in dispute, given the narrowing of both Ms Primavera’s claims and Ms Bakos’ defence in the course of the hearing. It is preferable that I do not reach findings as to matters that do not need to be determined in order to resolve the narrower matters that remain in issue, and I will not do so.

20. Ms Primavera’s first claim against Ms Bakos relates to allegedly overpaid salary. The parties referred in evidence and submissions to both “wages” and “salary” and did not distinguish between them, and I will generally take the same course. Ms Primavera pleads and Ms Bakos admits (SOC [8]; Defence [8]) that Ms Bakos owed several duties to BIPC, namely:

“(a)   a duty to act in good faith in the best interests of [BIPC];

(b)   a duty to exercise powers and discretions, including over [BIPC’s] bank accounts, for proper corporate purposes;

(c)   a duty not to prefer or promote her own interests or those of third parties in preference to those of [BIPC];

(d)   a duty not to misuse her position within [BIPC] to promote or prefer her own interests or those of third parties; and

(e)   a duty not to misappropriate [BIPC’s] property or funds for her own benefit or those of third parties.”

21. The duties pleaded by Ms Primavera are general law duties, rather than statutory duties, consistent with her status as assignee of the relevant claims. Ms Primavera did not expressly plead the two most basic fiduciary duties owed by a director of a company, namely to avoid a real and sensible conflict of interest, and not to make an undisclosed profit without the company’s fully informed consent. Little turns on the absence of those pleadings in the relevant circumstances.

22. Ms Primavera pleads, and Ms Bakos denies, that at 1 April 2011, Ms Bakos was employed by BIPC for an annual gross salary of $54,080 paid by net payments of $1,684 per fortnight (SOC [13]; Defence [13]). Ms Primavera pleads, and Ms Bakos denies that, from about 1 April 2011, Ms Primavera had sole access to and control of BIPC’s bank account and was able to transfer funds from it; Ms Bakos responds that both she and Ms Primavera had access to and control over BIPC’s bank account and were able to transfer funds from that account (SOC [14]; Defence [14]). It is common ground that, from 1 April 2011 to 5 March 2013, there was no general or extraordinary meeting of the shareholders in BIPC to consider or approve a salary increase for Ms Bakos, although Ms Bakos contends that BIPC was a closely held family business and was managed informally without the need for such meetings (SOC [15]; Defence [15]).

23. The gravamen of the pleaded breach appears in paragraph 16 of the Statement of Claim where Ms Primavera pleads that:

“In breach of the duties pleaded in paragraph 8, during the period June 2011 and February 2013, [Ms Bakos] exercised her right of access and control over [BIPC’s] bank account to overpay $96,036.90 on account of her annual net salary entitlement.”

24. By paragraph 16 of her Defence, as amended in the course of the hearing, Ms Bakos altered her previous position and admitted that, in breach of the several duties that she owed to BIPC, she exercised her right of access and control over BIPC’s bank account to overpay amounts on account of her annual net salary entitlement between June 2011 and February 2013; however, she denied that the amount of that overpayment was, as Ms Primavera contended, $96,036.30. In closing submissions, reflecting the alteration of Ms Bakos’ case in the course of hearing, Mr Grace, who appears for Ms Bakos, acknowledged that Ms Bakos did not dispute that she was entitled to an annual salary of $54,080, and that she breached the pleaded duties when she caused herself to be paid more than her fortnightly entitlement on account of her salary. The only remaining issue in respect of this claim is therefore the quantification of the overpayment of salary made to Ms Bakos, on the basis that that overpayment is conceded to have involved a breach of duty by Ms Bakos.

25. In her first affidavit dated 13 October 2017, Ms Primavera referred to the alleged salary overpayments to Ms Bakos, although it was plain that her solicitors rather than she had prepared the table set out in her affidavit which reflects the claim brought in the Statement of Claim. Ms Bakos in turn gave evidence, in her affidavit dated 1 June 2018, of Ms Primavera’s access to BIPC’s bank account and that Ms Bakos was required to attend to payment of wages and salary. Her evidence was that, as monies were not always available in the bank account, she would first attend to payment of BIPC’s and Bosshard Medical’s business expenses and then attend to payment of wages, and that her wage would often be paid on an irregular basis or part payments made (Bakos 1.6.18 [23]). Her evidence, by way of assertion, was also that all payments made to her, or PCS on her behalf, or Ms Cerovac’s husband, Mr Branko Cerovac, had been “payments in respect of wages owing to [her] or Branko Cerovac” (Bakos 1.6.18 [25]). Ms Bakos included in her affidavit several tables summarising hours which she claimed to have worked and payments she had received from BIPC over relevant periods.

26. Ms Bakos’ evidence was that her gross annual salary was $54,080 from April 2011 (Bakos 1.6.18 [12]). There is evidence that her salary continued on the same terms after the acquisition of the Bosshard Medical business by BIPC, where the Sale Agreement for the Bosshard Medical business required BIPC to make an offer of employment to each employee on terms no less favourable than those with FIPC (Ex P1, Tab 5). Special condition 16 of that Sale Agreement acknowledged a schedule of employees and salary information contained in Schedule 5 to the Sale Agreement, which in turn identified Ms Bakos as General Manager of the business on a gross annual salary of $54,080. Ms Bakos’ salary equated to a gross fortnightly salary of $2,080, from which tax of between $396 and $398 was deducted fortnightly, with a net payment of $1,682 or $1,684 being made to Ms Bakos (Ex D2, Tab 5, 158–162).

Quantum

27. Schedule A to the Statement of Claim sets out amounts that Ms Primavera claims are overpayments of Ms Bakos’ annual salary entitlements, in wage periods ending between 29 June 2011 and 27 June 2012 totalling $55,358.50; in wage periods ending between 11 July 2012 and 12 December 2012, totalling $30,007.30; and in wage periods ending between 26 December 2012 and 6 February 2013 totalling $10,674. Several of the specified amounts were negative, relating to underpayments rather than overpayments of Ms Bakos’ salary. The total claimed overpayments between June 2011 and February 2013 was $96,036.30 as pleaded in paragraph 16 of the Statement of Claim.

28. Ms Bakos responded to Schedule A to the Statement of Claim in Schedule 1 to the Defence, which admitted some but not others of the payments she received. The amounts admitted in Schedule 1 to the Defence totalled $108,379 (MFI 4). Ms Bakos contended that payments of $13,941 on 2 May 2012, $4,845 on 16 May 2012 and $10,030 on 27 June 2012 were received by PCS, but were not paid to Ms Bakos on account of salary and overlapped with unauthorised payments to PCS claimed in Schedule B of the Statement of Claim. In respect of an amount of $470 paid on 11 July 2012 to PCS, Ms Bakos admitted that amount was paid to PCS, but also did not admit that it was paid on account of her salary. In closing submissions, Mr Grace submitted that Ms Bakos was entitled to be paid $89,343.13 during the period from 14 June 2011 until 7 February 2013, by reference to her annual gross salary, reducing the amount of any overpayment to a maximum of $19,035.87.

29. Mr Grace also submitted that Ms Primavera must prove, on the standard recognised in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361–362 and in accordance with s 140 of the Evidence Act 1995 (NSW), that the amounts which Ms Bakos has not admitted were paid to her on account of her salary and were in excess of the amount to which she was otherwise entitled. That standard has effect that, in a civil proceeding, the Court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities and that, without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account the nature of the cause of action or defence, the nature of the subject-matter of the proceeding and the gravity of the matters alleged. It does not seem to me that the application of the Briginshaw standard, or the standard contemplated by s 140 of the Evidence Act, would alter the result in the present circumstances as to whether particular amounts have or have not been established as paid to Ms Bakos in addition to her wage entitlements.

30. After the conclusion of the hearing, I directed the parties each to provide a summary of their respective positions as to damages. Those summaries indicate that Ms Primavera contends that Ms Bakos was overpaid $101,784.50 for salary (being amounts paid to her of $174,192.50 less her net salary entitlement of $72,408), although she also accepts that the amount of the overpayment claimed in the Statement of Claim was calculated to be $96,036.30 and she can recover no more than that amount, as I noted above. Ms Bakos calculates the amount of that overpayment as $19,036, as I also noted above, by reference to a lesser quantification of the payment to her by way of salary of $108,379, less a gross salary entitlement of $89,343.

31. The first step in quantifying this claim of this claim is to determine the amount that Ms Bakos received by way of salary. Ms Primavera contends that Ms Bakos received payments made directly by BIPC to Ms Bakos of $37,698; payments made indirectly by BIPC to PCS and then by PCS to Ms Bakos of $104,872.80; and “indirect receipts” paid by BIPC to PCS of $31,621.70, totalling $174,192.50 as I noted above. If (as I will hold below) the transactions that are also included in her claim relating to transfers to PCS should not be classified as salary payments, then the amount Ms Bakos received by way of salary is reduced to $145,882.50 ($174,192.50 minus $28,310) and (as Mr Gor, who appears for Ms Primavera acknowledged in closing submissions) the amount of the overpayment is reduced to a maximum of $73,474.50 ($101,784.50 minus $28,310). As I noted above, Ms Bakos contends she was paid the lesser amount of $108,379 in respect of salary.

32. After closing submissions, my Associate sent a further email dated 24 May 2019 to the parties as follows, with the intent of clarifying and narrowing the differences between the parties as to these figures:

“His Honour wishes to avoid the need to refer any issue as to quantification to a referee or appoint a Court-appointed expert, if it is possible to do so, given the likely costs involved.

His Honour notes that the remaining issue which is likely to cause difficulty in that respect is, as to claim 1 (overpaid wages), the difference between the Plaintiff’s total receipts figure of $174,192.50 and the Defendant’s calculation of that figure of $108,379. His Honour recognises that part of that difference is the amount of $28,310 being the overlap between claims 1 and 2.

His Honour requests the parties to provide a further agreed schedule, by 4pm next Tuesday 28 May, identifying each transaction that makes up the remaining difference between those figures, the parties’ respective positions as to that transaction and the relevant evidentiary references (by affidavit paragraph number, page of the Court Book or exhibit or transcript page) or, if they cannot reach agreement, their respective schedules. His Honour appreciates that there have been references to these matters in submissions but requires such a schedule so as to determine whether these are matters he can decide, rather than referring them to an expert.”

33. The parties’ legal representatives were then allowed several extensions of time to provide the agreed schedule, and then advised on 6 June 2019 that they could not agree and provided their respective schedules identifying 52 disputed transactions, one of which had a value of $5 and another of which had a value of $10, comprising the difference between their quantifications of this claim. The difference between the figures for which the parties contended was $65,813.50; the transactions addressed in the schedule totalled $65,613.20; and the Plaintiffs indicated that the unexplained amount of $200.20 was an error. I will, with considerable hesitation, address those 52 transactions below, since the costs of referring them to a referee or expert are likely to be disproportionate to the amounts in issue. It will be convenient to address these transactions in categories, some of which raise common issues, although the parties largely did not take that approach.

Ms Primavera’s additional claims in respect of unpleaded transactions

34. The differences between the amounts quantified by the parties reflect, first, additional claims put by Ms Primavera in closing submissions in respect of transactions and claims that were not pleaded in Ms Primavera’s Statement of Claim. Mr Grace submits that there would be a breach of procedural fairness by permitting Ms Primavera to raise new allegations of overpayment in closing submissions, where those allegations had not previously been particularised and Ms Bakos had not had an opportunity to address them by evidence.

35. It is possible to address this question briefly, having regard to the role of pleadings in providing procedural fairness to the parties and the requirements for the conduct of the proceedings so as to promote their just, quick and cheap resolution under ss 56-58 of the Civil Procedure Act 2005 (NSW). The role of pleadings is, of course, to define the issues in the proceedings and provide the basis upon which evidence may be ruled admissible or inadmissible at trial upon the ground of relevance: Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664. It is, of course, also well-established that pleadings should state with sufficient clarity the case that must be met by a defendant so as to define the issues for decision and ensure the basic requirements of procedural fairness, namely that a party should have the opportunity to meet a case against him or her: Banque Commerciale SA (en liqn) v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286, 296, 302–303; Kirby v Sanderson Motors Pty Ltd [2002] NSWCA 44; (2001) 54 NSWLR 135 at 142–143. In Downer Connect Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2008] VSC 77 at [2]–[4], Harper J (as he then was) observed that “one of their primary purposes [of pleadings] is to reveal to the opposite party how the party pleading puts its case”, and then dealt with a common response to criticism of a pleading:

“A complaint that the pleadings do not achieve this end is often met with the response that the opposite party knows very well, from documents and perhaps other sources, what the case against it is. This is no answer at all, at least unless the relevant documents are properly incorporated into the pleading. It is, as a general proposition, true to say that each pleading should be sufficient in itself. And although an element in an adversarial process, pleadings are themselves intended to be the opposite of adversarial, at least to the extent that they must, if they are to perform one of their proper functions, inform the opposite party of the case that party will have to meet at trial.

But pleadings have another important audience: the Judge or Magistrate. In most cases, the opposite party will have the assistance of some knowledge of the factual background — some knowledge, in other words, of the facts against which the pleadings can be assessed. The tribunal of fact will never be in that position. The pleadings must therefore be drawn so as to allow the impartial and uninformed reader to know what the case is about. This end cannot be achieved unless the pleadings form a coherent narrative, of material fact, with the necessary detail included as particulars. They must be drawn with a careful eye to the evidence that will necessarily be called if the case is to be made out. If the party pleading does not have that evidence, then the case ought not go to trial. Indeed, it is generally true to say that it ought not to proceed beyond the point at which the party pleading appreciates, perhaps because the very act of pleading reveals it, that there is and will remain a gap in the evidence upon which the cause of action or defence is based and without which that cause of action or defence will fail.”

36. That passage was in turn approved by Ferguson J in Taylor v Lederman [2013] VSC 99 at [3]. The relevant authorities were summarised in McGuirk v University of New South Wales [2009] NSWSC 1424 at [21]–[35], where Johnson J noted that the function of pleadings is to state with sufficient clarity the case that must be met by a defendant; and pleadings serve to define the issues for decision and ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her; and that proper pleading is of fundamental importance in assisting courts to achieve the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings, as prescribed by s 56 of the Civil Procedure Act: McGuirk above at [21], [24]. I adopted the same approach in Re Punters Show Pty Ltd, Re [2017] NSWSC 605 at [67]ff on which I have drawn for these observations. I recognise there are limited circumstances where a Court may reach findings in respect of matters raised in the hearing that were not pleaded, where that would promote the interests of justice: JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20; (2016) 329 ALR 625. This is not such a case for the reasons noted below.

37. Here, a complex case, involving a multitude of single transactions of modest value, was brought by Ms Primavera and defended by Ms Bakos, over several days. Each party has significantly shifted the case with which it commenced by abandoning parts of its claim or defence in the course of the hearing. Ms Bakos has not consented to the case being conducted on a basis that extends beyond the claims pleaded and particularised against her, and an extension of the claims to matters not pleaded or particularised would increase the difficulties, which are already acute, in determining what remains in issue given the extent to which the parties have changed their positions in the course of the hearing. Ms Primavera should not be permitted to extend her claim to matters that have not been pleaded or particularised, where she has not sought to amend that claim to address those matters.

The unpleaded transactions

38. Turning now to the transactions within this category, transactions number 2-3 are payments of $2,880, which were not pleaded in the Statement of Claim or Schedule 1 to it and are not recoverable by Ms Primavera on the approach to the pleaded case that I have noted above. Transaction number 7 relates to the balance of a payment of $7,491 made from BIPC to PCS, after an amount of $4,611 (or the lesser amount of $3,380) which Ms Primavera alleged, and Ms Bakos admitted that she received. The balance of that amount was not pleaded in the Statement of Claim or Schedule 1 to it and is not recoverable by Ms Primavera on the findings that I have reached above. The evidence does not establish that it is attributable to Ms Bakos’ wage or salary in any event.

39. Transaction number 35 relates to a transfer of $350 from BIPC to Ms Bakos’ bank account described as “BM Wages” on 1 August 2012. Transaction number 36 relates to a transfer of $900 from BIPC to PCS and a further transfer from that account to Ms Bakos’ bank account, also described as “Bm Wages”, on 16 August 2012. Ms Bakos points out that these transactions were addressed in Ms Bakos’ affidavit but not addressed in her Defence and not included in her calculation of the total amount of the wage she had received. Ms Bakos responds that Ms Primavera did not plead any allegation in respect of these amounts and should not be permitted to claim additional amounts as part of her “overpayment of wages claim” that were not pleaded. I am conscious that these claims are not complex in themselves and were addressed, at least in part, in Ms Bakos’ affidavit. However, on balance, it seems to me that Ms Bakos cannot fairly be held liable for unpleaded transactions, given the wider issues as to the difficulty in identifying the matters in issue and the conduct of the case to which I have referred above.

40. Transaction number 37 relates to a further unpleaded claim for $540 arising from a complex series of payments, based on Ms Primavera’s attempt to reconstruct several transactions in a manner that she did not plead. Ms Primavera claims transfers from BIPC to PCS of $600 on 20 September 2012, $2,500 on 26 September 2012 and $1,000 on 27 September 2012, totalling $4,100. She contends that the payment of $2,500 is part of a grouped transaction on 26 September 2012 for $4,500 and the payment of $1,000 is part of a grouped transaction on 27 September 2012 for $1,500. She points out that $3,100 was deposited to Ms Bakos’ account from PCS on 26 September 2012 described as “BM Wages arrears” and a further $1,000 was deposited to that account from PCS on the same date and also described as “BM Wages arrears.” She submits that Ms Bakos admitted all three payments of $600, $2,500 and $1,000 (totalling $4,100) in her affidavit but has only admitted to receiving $3,560 in her Defence (I interpolate, presumably because that was the claim made against her) leaving a difference of $540 that has not been included in her calculation of the total amount she received. Ms Bakos responds that Ms Primavera had pleaded that she was paid $3,560 on 19 September 2012, which Ms Bakos had admitted receiving, and not that she was paid the larger amount of $4,100 at or around this time. She again submits that Ms Bakos should not be permitted to claim additional amounts as part of her “overpayment of wages claim” that were not pleaded. For the reasons noted above, it seems to me that Ms Bakos cannot fairly be held liable for unpleaded transactions.

Amounts paid by BIPC to Ms Bakos or PCS

41. I will deal with these claims together, although Ms Bakos and PCS are of course different legal entities. Some but not all of these claims raise an issue of overlap with Ms Primavera’s second head of claims which I address below. Ms Primavera acknowledges that, of the transactions claimed to be paid to PCS for Ms Bakos’ salary, transactions totalling $28,310 are also included in Schedule B to Ms Primavera’s Statement of Claim for her second claim for transfers to PCS. The alleged overpayments of Ms Bakos’ wage or salary in the period ending 2 May 2012 in the amount of $13,941 (as stated in submissions) are also claimed as items 28–34 in Schedule B to the Plaintiff’s Statement of Claim, as amounts paid to PCS; the alleged overpayments of her wage or salary in the amount of $4,845 (correcting a transcription error in submissions) in the period ending 16 May 2012 are also claimed in items 35–42 of that Schedule as amounts paid to PCS; and the alleged overpayments of her wage or salary in the amount of $9,660 in the period ending 27 June 2012 are also claimed as items 45–48 in that Schedule as amounts paid to PCS. Mr Grace submits that the Court would not be satisfied that these amounts were paid on an account of Ms Bakos’ wage or salary and, in any event, Ms Primavera is not entitled to recover these amounts twice.

42. Ms Bakos’ practice seems to have been regularly to record payments as having the character of wages or salary in the narrative descriptions of the relevant transfers, and there is no basis for a finding that she adopted that practice selectively rather than generally. It seems to me that Ms Primavera has not established an evidentiary basis for a finding that payments made to PCS that are not described as having the character of wages or salary in those narrative descriptions in fact had that character so as to be recoverable in respect of this claim. These amounts should be excluded from this claim and treated as part of Ms Primavera’s second claim.

43. Turning now to the specific payments that potentially fall within this category, transaction number 1 is a payment of $800 from BIPC to Ms Bakos made on 25 July 2011 with the unilluminating description “LB WE x2 RIM Best in Pressure.” It is part of a pleaded transaction as to $2,532, as to which Ms Bakos admitted liability for $1,684. Ms Bakos admits that this amount was transferred from BIPC’s account to her personal account but denies it was paid to her on account of her wages (T286). Ms Primavera does not identify any evidence to indicate the payment had the character of wages or salary, and any lack of specific evidence of Ms Bakos as to this transaction (alone or together with many other transactions) does not fill that evidentiary gap, where she could not reasonably be expected to explain a transaction of this small size undertaken many years ago beyond the narrative recorded in the bank statements.

44. Transaction number 9 relates to an amount of $500 transferred from BIPC to PCS on 9 March 2012. A corresponding amount was transferred to Ms Bakos’ bank account on 12 March 2012 with the description “BM Wages”. Ms Bakos admits that she received this amount on account of wages and the amount she conceded she was overpaid should be increased by that amount.

45. Transaction numbers 11-12 relate to amounts of $370 and $250 transferred from BIPC to PCS with the unilluminating description “Fnds Tfr Trans PCS”. Ms Bakos admits that these monies were paid to PCS but denies that they were paid to her on account of her wages or at all, and she submits that there is no evidence that they were paid to her on account of her wages or at all. Ms Primavera does not identify any evidence to indicate the payments were received by Ms Bakos or had the character of wages, and any lack of specific evidence of Ms Bakos as to these transactions (alone or together with many other transactions) again does not fill that evidentiary gap, where she could not reasonably be expected to explain transactions of this small size undertaken many years ago beyond the narrative recorded in the bank statements. These amounts also fall within Ms Primavera’s second claim and, given the findings I have reached above, they are not recoverable under this claim.

46. Transaction number 13 relates to an amount of $2,515 transferred on 3 May 2012 from BIPC to PCS and also described as “Fnds Tfr Trans PCS”. Ms Primavera points out that there are then two withdrawals from the PCS account on that day, one for $953 described as “BM Wages” and the other for $2,495.65 described as “Bm Wages Packp” and an amount of $1,488.30 is deposited to Ms Bakos’ account from PCS on 3 May 2012 described as “BM Wages Backp”. Ms Bakos admits that these monies were paid to PCS but denies that the amount of $2,515 was paid to her on account of her wages or at all, and submits that there is no evidence that these were paid to Ms Bakos on account of her wages or at all. Ms Primavera did not identify any evidence that the amount of $2,515 that is claimed was paid to Ms Bakos as wages or salary and any lack of specific evidence of Ms Bakos as to these transactions (alone or together with many other transactions) again does not fill that evidentiary gap, for the reasons noted above. I do not address any question as to the amount of $1,488.30 where the case was not put on that basis. These amounts also fall within Ms Primavera’s second claim in any event.

47. Transaction number 14 relates to an amount of $3,940 transferred on 8 May 2012 from BIPC to PCS again described as “Fnds Tfr Trans PCS”. An amount of $2,100 was then withdrawn from PCS’s account with the description “BM Wages Backp” and a deposit of $1,100 was made from PCS to Ms Bakos’ account with the same description on 9 May 2012. Ms Bakos admits that these monies were paid to PCS but denies that the amount of $3,940 was paid to her on account of her wages or at all and submits that there is no evidence that these were paid to Ms Bakos on account of her wages or at all. Ms Primavera did not identify any evidence that the amount of $3,940 that is claimed was paid to Ms Bakos as wages or salary and any lack of specific evidence of Ms Bakos as to these transactions (alone or together with many other transactions) again does not fill that evidentiary gap, for the reasons noted above. I do not address any question as to the amount of $1,100 where the case was not put on that basis. This amount again falls within Ms Primavera’s second claim in any event.

48. Transaction number 15 relates to an amount of $195 transferred from BIPC to PCS on 9 May 2012 with the description as “Fnds Tfr Trans PCS”. Transaction 16 relates to the even smaller amount of $136 transferred from BIPC to PCS on 10 May 2012 with the same description. Transactions 17-18 relate to the amounts of $475 and $6,060 transferred from BIPC to PCS on 11 May 2012 with the same description. Ms Primavera points out that an amount of $587.50 was transferred from PCS to Ms Bakos’ bank account on 14 May 2012 described as “Bm Wages + Exp” and another deposit of $2,600 was made to Ms Bakos’ bank account from PCS that same day described as “BM Exp Reimb”. Ms Bakos admits that these amounts were paid to PCS but denies that they were paid to her on account of her wages or at all. Ms Primavera does not identify any evidence that the claimed amounts were paid to Ms Bakos or had the character of wages and the limits to Ms Bakos’ evidence cannot fill that gap for the reasons noted above. The subsequent payments by PCS to Ms Bakos are in different amounts for which no claims were pleaded. These claims must fail on this basis, but again fall within Ms Primavera’s second claim in any event. I add, for completeness, that claims for $195 or $136 could not conceivably have warranted the amount of legal representatives’ time or Court time that has been devoted to them.

49. Transaction number 19 relates to an amount of $780 transferred from BIPC to PCS on 16 May 2012 with the description “Fnds Tfr Trans PCS” and transaction 20 relates to the amount of $100 transferred from BIPC to PCS on 17 May 2012 with the same description. Transaction number 21 relates to an amount of $450 transferred from BIPC to PCS on 18 May 2012 with the description “Fnds Tfr Trans PCS”, and transactions 22-23 relate to the amounts of $630 and $200 transferred from BIPC to PCS on 21 May 2012 with the same description. Ms Primavera points out that an amount of $700 was transferred from PCS to Ms Bakos’ bank account on 21 May 2012 described as “Bm Wages Arrears.” Ms Bakos again admits that these amounts were paid to PCS but denies that they were paid to her on account of her wages or at all. Ms Primavera did not identify any evidence that the claimed amounts were paid to Ms Bakos or had the character of wages and the limitations to Ms Bakos’ evidence cannot fill that gap for the reasons noted above. The subsequent payment of $700 by PCS to Ms Bakos is in a different amount for which no claim was pleaded. These claims must fail on this basis, but again fall within Ms Primavera’s second claim in any event. I add, for completeness, that a claim for $100 could not conceivably have warranted the amount of legal representatives’ time or Court time that has been devoted to it.

50. Transactions number 24-26 relates to amounts of $1,660, $690 and $335 transferred from BIPC to PCS on 23 and 24 May 2012, again with the description “Fnds Tfr Trans PCS”. Ms Bakos again admits that these amounts were paid to PCS but denies that they were paid to her on account of her wages or at all. Ms Primavera did not identify any evidence that the claimed amounts were paid to Ms Bakos and the limitations to Ms Bakos’ evidence do not fill that gap for the reasons noted above. These claims must fail on this basis, but again fall within Ms Primavera’s second claim in any event.

51. Transaction number 28 relates to an amount of $1,900 transferred from BIPC to PCS on 22 June 2012 with the description “Payment trans PCS”. Transaction number 29 relates to an amount of $2,390 transferred from BIPC to PCS on 26 June 2012 with the description “Payment bm pcs”. Ms Bakos again admits that these amounts were paid to PCS but denies that they were paid to her on account of her wages or at all. Ms Primavera again does not identify any evidence that the claimed amounts were paid to Ms Bakos or were in the nature of salary or wages and the limits to Ms Bakos’ evidence do not fill that gap. The claim in respect of these transactions must fail on that basis.

52. Transaction number 30 relates to an amount of $4,900 transferred from BIPC to PCS on 26 June 2019 described as “Payment Trans PCS”. Ms Primavera points out that two deposits of $1,000 each were made to Ms Bakos’ bank account from PCS on 27 June 2019 and were described as “Bm Wages”. She also points out that there is a corresponding withdrawal of $3,932.37 on 26 June 2012 described as “Payment Bills and Wages” and another withdrawal of $2,177.59 described as “Payment BM Bills and Wages.” She submits that “[t]his appears to be a grouped transaction, of which payments of $1,000 and $1,000 were transferred to [Ms Bakos’] bank account.” Ms Bakos admits that the amount of $4,900 was paid to PCS but denies that this payment was made to PCS on account of her wages and points out that Ms Primavera did not plead any allegation in respect of the two payments of $1,000 to her account on 27 June 2012. The larger claim must fail because the amounts are not shown to be paid to Ms Bakos or to be in the nature of salary or wages, and the smaller claim is not open because it was not pleaded. The larger claims again fall within Ms Primavera’s second claim in any event.

53. Transaction number 31 relates to a transfer of $470 on 27 June 2012 from BIPC to PCS which was described as “Payment Trans PCS”. Ms Bakos admits that the amounts were paid to PCS but denies that they were paid to her on account of her wages or at all. This claim must fail because the amount is not shown to be paid to Ms Bakos or to be in the nature of salary or wages.

54. Transaction number 32 relates to a transfer of $370 also on 27 June 2012 from BIPC to PCS which was also described as “Payment Trans PCS”. Ms Primavera points out that, on 29 June 2012, there is a deposit of $530 to Ms Bakos’ account from PCS described as “BM Wages Arrears” and points to a withdrawal of $3,258.62 on 28 June 2012 described as “Payment Bills and Wages”. Ms Primavera submits that this appears to be a grouped transaction, of which $530 was transferred to Ms Bakos’ bank account. Ms Bakos responds that:

“Ms Bakos admits that the amount of $4,900 was paid to PCS but denies that this payment was made to PCS on account of her wages ...

[Ms Primavera] did not plead any allegation in respect of the payment in the amount $530 to Ms Bakos’ [bank] account on 29 [June 2012].

In any event, if the Court were to account for these payments as part of the “overpayment of wages” claim, this Court would deduct the amount of $370 from the amount claimed by [Ms Primavera] in respect of Schedule B [addressed below] in order to avoid any double counting.”

The larger claim must fail because the amounts are not shown to be paid to Ms Bakos or to be in the nature of salary or wages, and the smaller claim is not open because it was not pleaded.

55. Transaction number 33 relates to a transfer of $470 on 12 July 2012 from BIPC to PCS described as “Fnds Tfr Trans PCS.” Ms Bakos admits that this amount was paid to PCS but denies that it was paid to her on account of her wages or at all. This claim must also fail because the amount was not shown to be paid to Ms Bakos or to be in the nature of salary or wages. This claim also falls within Ms Primavera’s second claim in any event.

56. Transaction number 41 is a complex claim for $3,400 arising from transactions on 14 November 2012. Ms Primavera claims that Ms Bakos received $1,000 paid directly to her bank account on 14 November 2012 and $3,000 was paid to PCS on 23 November 2012 (described as “BM Wages Arrears”) and $400 was paid to PCS on 23 November 2012 (described as “BM Wages”), totalling $4,400 (ignoring, I interpolate, the fact that Ms Primavera and PCS are separate legal entities). Ms Primavera points out that $395 was transferred from PCS to Ms Bakos’ bank account on 26 November 2012 and $3,000 was transferred from PCS to Ms Bakos’ bank account on 27 November 2012. Ms Primavera in turn refers to admissions made by Ms Bakos and the allocation of payments to specific wage periods, which does not appear to be material to a calculation of the total claim. Ms Bakos responds that she has already admitted that she received $4,400 on account of her wage during this period and this amount has already been taken into account in the total amount Ms Bakos admitted she received (MFI 4). There appears to be a dispute between the parties as to whether these amounts or part of them have or have not been included in the amount admitted by Ms Bakos. That dispute is properly a matter for forensic accounting evidence, so far as it requires a reconciliation of the amounts in issue between the parties in the relevant wage periods, although the amount in issue would likely not warrant the cost of such evidence. Absent such evidence, Ms Primavera has not established this claim.

Amounts admitted by Ms Bakos

57. It appears that transactions number 6 and 8 are admitted by Ms Bakos and have been included in the amount she concedes is payable in Schedule 2 to the Defence. Ms Primavera did not include the amount of this transaction in the total claimed by the schedule she provided and it need not be addressed further.

58. Transaction number 10 relates to an amount of $1,390 transferred from BIPC to PCS and then transferred to Ms Bakos’ bank account, for which Ms Bakos admitted liability in Schedule 1 of the Defence. Transaction number 27 relates to a transfer of $1,727 from PCS to Ms Bakos’ bank account described as “BM Wages Arrears”, which is alleged to be made on the same day as a withdrawal of $3,380.39 described as “BM Bills @ Wages”. Transaction number 34 relates to a transfer of $870 from PCS to Ms Bakos’ bank account described as “BM Wages arrears”. It appears that Ms Bakos has already admitted these payments and they have been taken into account in the total amount that Ms Bakos admitted she received (MFI 4). Ms Primavera does not appear to contest that matter and no additional amount is due to her on that basis.

57. Transaction number 39 is a claim for $1,200 transferred from BIPC to Ms Bakos’ account on 7 November 2012 described as “BM Wages”. Ms Primavera submits this transaction was admitted in Ms Bakos’ affidavit and in Ms Bakos’ Defence for a subsequent wage period. Transaction number 40 is a claim for $1,000 transferred on 9 November 2012 from BIPC to Ms Bakos’ bank account and described as “Bm Wages”. Ms Primavera notes that Ms Bakos admitted to receiving $900 on this day in her affidavit and to have admitted receipt of this amount in the subsequent wage period in her Defence. Ms Bakos points out that she has already admitted these payments and they have already been taken into account in the total amount Ms Bakos admitted she received (MFI 4). I need not address these amounts further.

58. Transaction number 42 is a claim for $700 transferred from BIPC to PCS and then to Ms Bakos’ bank account on 13 December 2012 and described as “BM Wages”. Ms Primavera submits that Ms Bakos has not admitted this payment in the Defence and has not included it in her calculation of the total amount received, despite admitting to the payment in her affidavit. Ms Bakos admitted, in her final summary schedule, that this amount was paid to her on account of her wages and it should be included in calculating the total amount she received on that account.

59. Transaction number 43 relates to a payment of $2,680 on 18 December 2012 from BIPC to PCS and then to Ms Bakos’ bank account. Transaction number 44 relates to a payment of $2,425.30 made on 19 December 2012 from BIPC to PCS and then to Ms Bakos’ bank account. Transaction number 45 relates to transfers of $3,380 from 21–24 December 2012 from BIPC to PCS and then to Ms Bakos’ bank account. Transaction number 46 relates to a transfer of $400 on 31 December 2012 from BIPC to PCS and then to Ms Bakos’ bank account. Transaction number 47 relates to a transfer of $1,350 on 22–23 January 2013 from BIPC to PCS and then to Ms Bakos’ bank account. Transaction number 48 relates to a transfer of $3,400 on 25 January 2013 from BIPC to PCS, and then to Ms Bakos’ bank account on 29 January 2013. Transaction number 49 relates to a transfer of $1,000 from BIPC to PCS on 25 January 2012 (as part of a larger transfer of $1,874) and then transferred to Ms Bakos’ bank account on 29 January 2013. Transaction number 50 relates to an amount of $1,000 transferred from BIPC to PCS and then to Ms Bakos’ bank account on 30 January 2013. Transaction number 51 relates to an amount of $1,380 transferred from BIPC to PCS on 31 January 2012 and then to Ms Bakos’ bank account on 1 February 2013. In her final summary schedule, Ms Bakos admits that these amounts were paid to her on account of her wages and they should be included in calculating the total amount she received on that account.

Two claims that should properly have been abandoned by Ms Primavera

62. Transaction number 38 is a claim for $10 (and that is not a misprint in this judgment) arising from a transaction on 5 October 2012. Ms Primavera submits that $500 was transferred from BIPC to PCS and described as “BM Wages arrears”; $490 was transferred from PCS to CBA, and that transfer is admitted by Ms Bakos, leaving a difference of $10. The mathematics of that proposition, and its lack of economic significance, are equally incontestable. Ms Bakos submits that this amount should be deleted from the Schedule because it would be an undue waste of the Court’s time to adjudicate on an issue worth $10.

63. Transaction number 52 relates to a claim for $5 (again, not a misprint) in relation to transfers on 7 February 2013. Ms Primavera submits that $1,000 was transferred from BIPC to PCS as part of a grouped payment of $1,500 and described as “BM wages part”; $995 was transferred from PCS to Ms Bakos and described as “BM Wages part” and Ms Bakos admits to receiving $995, leaving a difference of $5. Ms Bakos admits the amount paid to her ($995) was paid to her on account of her wages; but, denies that the balance, which was not paid to her ($5), was paid to her or PCS on account of her wages. That response seems to me to be well founded.

64. It seems to me that these two claims should properly have been abandoned by Ms Primavera and her legal representatives, having regard to their obligations under s 56 of the Civil Procedure Act. I do not determine them and would strike them out as an abuse of the Court’s processes if it were necessary to do so.

Total wages or salary paid to Ms Bakos

65. In the result, the amount of wages or salary paid to Ms Bakos was $126,594.30, being the amount that she admitted in her closing submissions, $108,379, plus an amount of $18,215.30 arising from transactions number 9 and 42-51 above, which were largely admitted in her final summary of the parties’ positions.

The amount of wages or salary to which Ms Bakos was properly entitled

66. Having determined the amount of the wages or salary paid to Ms Bakos “on account of her annual net salary entitlement”, for the purposes of paragraph 16 of the Statement of Claim, it is now necessary to deduct the amount to which she was properly entitled to determine the amount of any overpayment. Ms Primavera contends that, during the period 29 June 2011 to 6 February 2013, Ms Bakos was entitled to receive a net salary totalling $72,408 (as set out in the total of the third column from left of Annexure A to Ms Primavera’s closing submissions). Ms Bakos contends she was entitled to receive a gross salary of $89,343 for the same period. The different figures in turn reflect Ms Bakos’ gross wage entitlement of $2,080 per fortnight or alternatively her net wage entitlement of $1,684 per fortnight. The parties were at issue as to whether the net or gross amount of the salary to which Ms Bakos was entitled should be deducted for that purpose, and each adopted the position that would advance their respective economic interests in maximising (in Ms Primavera’s case) or minimising (in Ms Bakos’) case the recovery claimed.

67. Mr Gor submits that this claim should be quantified by reference to Ms Bakos’ net salary, because the tax payable on the gross salary was an entitlement of the Commonwealth and not Ms Bakos, and Ms Bakos cannot quantify the amount of the overpayment by treating the amount that was required to be remitted to the Australian Taxation Office as belonging to her. Mr Grace contends that it is wrong to calculate any overpayment of Ms Bakos’ wages or salary by reference to the net wages or salary that Ms Bakos was entitled to be paid, as distinct from the gross wages or salary she was paid and that, as against BIPC, Ms Bakos was entitled to be paid her gross wages and the fact that BIPC was required to withhold certain monies for taxation purposes is irrelevant.

68. I do not accept Ms Primavera’s submission that the amount of the overpayment to Ms Bakos should be quantified on a net rather than a gross payment. The difficulty with that approach can be simply demonstrated. If BIPC failed to pay Ms Bakos’ salary, and likely also failed to withhold PAYG tax from the salary that had not been paid, then Ms Bakos would be entitled to bring proceedings against it to recover the entirety of her salary but, so far as she recovered damages referable to her salary, they would be taxable in her hands. Conversely, any loss suffered by BIPC by the overpayment of wages does not include the amount of tax which it would have been obliged to remit to the Australian Taxation Office in respect of those wages, which is a loss that is suffered by the Commonwealth rather than by BIPC, and only if Ms Bakos has not already paid such tax as she was obliged to pay on the amount of any overpaid wages to her.

69. Ms Primavera is therefore entitled to recover, in respect of wages overpaid to Ms Bakos, the amount of $37,251.30, calculated as the amount paid to Ms Bakos as wages, $126,594.30, less the amount of her entitlement to wages for the relevant period on a gross basis, $89,343.

Ms Primavera’s claim in respect of unauthorised transfers to PCS

The pleaded case and affidavit evidence

70. Ms Primavera’s second claim relates to unauthorised transfers to PCS, which she contends were in breach of the duties pleaded in paragraph 8 of the Statement of Claim. Ms Primavera initially submitted that 50 transfers of amounts totalling $82,172 from BIPC to PCS, made in the period 27 January to 29 June 2012, were not authorised by Ms Primavera and were not for any business or corporate purpose of BIPC.

71. This claim also relies on Schedule 2 of the Shareholders Deed which required a majority resolution of all shareholders to enter into an agreement or arrangements with a shareholder, or enter into any transaction that is not proposed on a commercial arm’s length basis or of any unusual or onerous nature which is outside the ordinary course of business. Ms Primavera contends, and Ms Bakos admits, that there was no general or extraordinary meeting of PCS and SYPC or meeting of Ms Primavera and Ms Bakos from 1 April 2011 to 5 March 2013 to consider or approve payments to PCS. Ms Bakos also admits that matter, at least so far as certain transactions set out in Schedule B of the Plaintiff’s Statement of Claim are concerned.

72. In her Defence [20], Ms Bakos accepted that she caused BIPC to make the 50 transfers particularised in Schedule B of the Plaintiff’s Statement of Claim to PCS. She denies that she caused BIPC to make those transfers to her in breach of the pleaded duties (Defence [20]). In paragraph 20A of her Defence, introduced when that was filed on 8 May 2019, Ms Bakos contended that she caused PCS to restore $51,617.65 to BIPC, offsetting the funds referred to in Schedule B that had been transferred to PCS. Ms Bakos particularised the suggested payments in Schedule 2 to her Defence, which comprised some 33 separate transactions said to total that amount. Ms Bakos also contends that she caused PCS to pay BIPC’s bills and expenses from the remainder of the funds transferred to her, although she was only able to identify transfers with a value of $10,256.97 falling in that category.

73. In her first affidavit dated 13 October 2017, Ms Primavera set out a summary of funds paid to PCS, Ms Bakos and others from 18 December 2012, although it was again likely that her solicitors rather than she had prepared that summary which reflects the claim brought in the Statement of Claim.

74. Ms Bakos gave evidence, in her affidavit dated 1 June 2018, that she would, on “some occasions”, transfer monies from BIPC’s bank account to PCS’s account, and she would attend to payment of wages from PCS’s account. She claims to have taken that course because she saw monies taken out of the account by Ms Primavera and the balance of the account was regularly low following such transfers (Bakos 1.6.18 [24]). Ms Bakos also led evidence to seek to establish unauthorised withdrawals from Ms Primavera from BIPC’s account (Bakos 1.6.18 [38]ff). A table of those withdrawals contained in that affidavit referred to 28 transactions, largely in relatively small amounts, totalling $34,266.17.

75. Ms Bakos claimed to have used PCS’s account to save money for wages and expenses of BIPC from August 2011, because BIPC’s bank account was regularly low following transfers by Ms Primavera and there were insufficient funds to attend to payment of expenses of BIPC and the Bosshard Medical business. Her evidence was that she would initially transfer money back from PCS’s account to BIPC’s account, when BIPC was required to attend to payment of bills and expenses. Ms Bakos’ affidavit included a table referring to the transfer of monies back to PCS’s account (Bakos 1.6.18 [57]), which was the genesis of reliance on repayments back to that account in paragraph 20A of her Defence to which I refer below. Ms Bakos also maintained, in cross-examination, that she made the relevant payments to PCS in order to secure funds to pay the expenses of the business and “to make sure that the bills were paid and the company was looked after” (T326, 331, 341).

76. Ms Bakos’ evidence was that, from May 2012, she transferred monies from BIPC’s bank account to PCS’s account but did not transfer monies back to BIPC. Her evidence (admitted as evidence of her understanding only) was that she did that as a result of Ms Primavera continuing to withdraw funds from BIPC’s account without authority, and not for expenses of BIPC or the Bosshard Medical business. Her evidence was that she would then pay for “some of the expenses” of BIPC and Bosshard Medical from PCS’s account (Bakos 1.6.18 [58]). Ms Bakos in turn led evidence of numerous payments that had been made for expenses of BIPC and Bosshard Medical from PCS’s account (Bakos 1.6.18 [60]).

77. Ms Bakos’ evidence was also that she caused PCS to pay the balance of funds, not otherwise repaid to BIPC or paid to identified expenses on behalf of BIPC, towards bills and expenses on BIPC’s behalf. However, her evidence asserting that matter was admitted by way of submission only, and does not establish the asserted fact. Ms Bakos’ evidence is that she has not located all of the records of the expenses paid from the PCS account on behalf of BIPC and Bosshard Medical. She refers to descriptions which use the phrase “BM Bills” in bank account records, in asserting that other payments were made on behalf of BIPC or Bosshard Medical.

The parties’ submissions

78. Mr Gor submits that Ms Bakos’ explanation for the movement of funds between BIPC and PCS between August 2011 and August 2012 should be rejected, and that Ms Bakos has failed to establish that the transactions made by Ms Primavera about which she complains were improper; and he advances lengthy submissions in defence of the transactions made by Ms Primavera. He also submits that the suggested retransfer of funds by PCS to BIPC would have exposed it to the risk that Ms Bakos claims to have sought to avoid, of Ms Primavera appropriating the funds. He submits that a number of the transfers made to PCS were for low amounts, for example $191.45, which could scarcely have had the purpose of protecting BIPC from unauthorised withdrawals by Ms Primavera, and that there were other occasions when significant balances were left in BIPC’s account, after transfers had been made to Ms Primavera. Mr Gor submits that the Court should reject Ms Bakos’ explanation that she engaged in transfers between BIPC and PCS to protect BIPC’s funds and that, if the Court rejects that explanation, there is no proper corporate purpose for the transfers between the two companies, the transfers were not made in good faith and amounted to Ms Bakos preferring the interests of PCS over those of BIPC.

79. Mr Gor also submits that Ms Bakos’ explanation for the claimed change of practice in May 2012 is difficult to accept when, on her own evidence, there were no unauthorised withdrawals made by Ms Primavera between 2 April and 3 July 2012. Mr Gor also submits that that explanation is illogical, so far as the suggested practice of returning funds by PCS to BIPC in the early part of the period would have exposed BIPC to the risk that Ms Bakos claimed she was seeking to avoid, of unauthorised withdrawals by Ms Primavera. Mr Gor also points to difficulties with Ms Bakos’ reliance on the risk of overdrawn fees and dishonoured cheques, where there is little evidence of that occurring, and the first dishonour fee appears on 5 March 2012, some 8 months after Ms Bakos commenced the practice of withdrawing funds from BIPC’s account, and the second occasion on which a dishonour fee was charged occurred after Ms Bakos had made a withdrawal.

80. In opening submissions, Mr Grace acknowledged Ms Bakos’ admission that she caused BIPC to transfer the funds referred to in Schedule B but pointed to her denial that she breached the pleaded duties in doing so (Defence [20]). He submits that the primary issue is whether the transfers were in BIPC’s interests or for a proper corporate purpose; that Ms Bakos caused those transfers to be made out of a concern that, if the monies were left in BIPC’s bank account, Ms Primavera would transfer them to herself for her own use and benefit and there would be insufficient funds in BIPC’s bank account to meet its financial obligations; and that Ms Bakos transferred those funds to PCS to quarantine them from unauthorised access by Ms Primavera. Mr Grace submits that, on that basis, the Court would not be satisfied that the transfers were not in BIPC’s interests or for proper corporate purposes. Mr Grace also advanced elaborate submissions as to the principles of causation applicable to a breach of fiduciary duty. It seems to me that there is no controversy as to causation, if Ms Bakos paid out BIPC’s funds to PCS in breach of fiduciary duty, and only a question of quantification arises.

81. In closing submissions, Mr Grace submits that the Court would find that Ms Bakos, in transferring funds from BIPC’s bank account to PCS’s bank account, was acting for a proper purpose in attempting to preserve BIPC’s funds so that its outgoings could be met. Mr Grace points out, and I accept, that Ms Primavera’s evidence in cross-examination was that she caused several amounts to be transferred to herself, and did not tell Ms Bakos before doing so (T146–149). Mr Grace accepted that there may have been better ways of dealing with the issue, for example by setting up a separate bank account for BIPC to which Ms Primavera did not have access, but contended that Ms Bakos addressed the issue “in the best way [she] knew how”, as she had said in cross-examination (T326). I do not accept, for the reasons noted below, that Ms Bakos was in fact acting for the subjective purpose of preserving BIPC’s funds, as distinct from preserving her own access to BIPC’s funds against the risk that Ms Primavera might access those funds. Even if I had accepted that Ms Bakos was acting for that purpose, it seems to me that the approach she adopted was so inconsistent with BIPC’s interests that it could not be characterised as being undertaken for a proper purpose. I will return to that question below.

82. Mr Grace also submits that it was in fact in BIPC’s interests that its funds be preserved so that its expenses could be met. I accept that proposition, but that does not assist Ms Bakos since her conduct did not preserve BIPC’s funds but in fact caused them to be transferred to PCS, and placed at risk that they would not be recovered, either on the insolvency of PCS or because (as has emerged) it would be very difficult to establish the balance of the account between the two companies.

Determination as to breach of duty

83. It is ultimately not necessary to address the substantial detail of the parties’ submissions in order to determine the question of liability in respect of this claim, which is straightforward. However, in deference to the detail of those submissions, I should record that I would generally accept Ms Bakos’ evidence that she regarded the withdrawals by Ms Primavera as unauthorised and those withdrawals were in fact unauthorised, although Ms Primavera likely made them because of BIPC’s and Ms Bakos’ failure to make the level of payments to Ms Primavera that would be necessary to support the borrowings she had made to acquire an interest in BIPC. I do not accept Ms Bakos’ evidence that she made the relevant withdrawals for the purpose of protecting BIPC from unauthorised withdrawals by PCS where, as Mr Gor pointed out, there are significant gaps in time between the unauthorised withdrawals by Ms Primavera and the unauthorised withdrawals by Ms Bakos; the withdrawal of small amounts by Ms Bakos is consistent with the appropriation of BIPC’s funds for her and PCS’s use, rather than with protecting BIPC’s funds from withdrawals by Ms Primavera; and the unsystematic character of the withdrawals, leaving substantial balances in BIPC’s account, is more consistent with Ms Primavera accessing those funds as needed, rather than engaging in any strategy to protect BIPC’s funds.

83. It seems to me that Ms Bakos’ conduct in transferring those funds to PCS plainly breached the duties pleaded in paragraph 8 of the Statement of Claim. Ms Primavera there at least pleads the general law duty of Ms Bakos, as a director of BIPC, to act in good faith in the best interests of BIPC. Although Counsel paid little attention to the applicable legal principles, the case law at least establishes that the directors of a company are under a duty to act in good faith for the benefit of the company as a whole: Ngurli Ltd v McCann (1953) 90 CLR 425; Australian Growth Resources Corp Pty Ltd (recs and mgrs apptd) v Van Reesema (1988) 13 ACLR 261 at 268; 6 ACLC 529. In Chew v R (1991) 4 WAR 21; 5 ACSR 473 at 499, Malcolm CJ noted that the duty of honesty or good faith had a number of aspects under the general law, namely that directors must exercise their powers in the interests of the company, and must not misuse or abuse their power; they must avoid conflict between their personal interests and those of the company; they must not take advantage of their position to make secret profits; and they should not misappropriate the company’s assets for themselves. That summary was followed in, inter alia, Holyoake Industries (Vic) Pty Ltd v V-Flow Pty Ltd [2011] FCA 1154; (2011) 86 ACSR 393 at [149] and in Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 at [419] and a similar view was expressed in Prestige Lifting Services Pty Ltd v Williams [2015] FCA 1063; (2015) 333 ALR 674 at [201].

84. It seems to me that the transfers of funds from BIPC to PCS were not made in good faith in the best interests of BIPC, or for a proper corporate purpose, where they had the consequence that BIPC was deprived of its own funds, exposed to the risk that those funds would be unrecoverable on an insolvency of PCS and also exposed to the risk, amply demonstrated by the difficulties that have arisen in these proceedings, that it would later become very difficult to establish the amount that was owed by PCS to BIPC at any point in time. It also seems to me that, quite apart from the difficulties with Ms Bakos’ evidence explaining the transfer of funds from BIPC to PCS, that transfer could not be justified objectively, because BIPC’s funds could readily have been protected from any unauthorised withdrawals by Ms Primavera by means other than diverting them to PCS. If self-help was necessary, it could have been exercised by simply transferring those funds to another account in the name of BIPC as to which Ms Primavera had sole transactional authority. That course was obvious and would not have exposed BIPC to the risks of PCS’s insolvency or to the difficulties of establishing the amount due by PCS to BIPC to which I have referred above.

85. It also seems to me that these transfers also breached Ms Bakos’ duty to act in good faith in the best interests of BIPC where they were plainly made in circumstances that Ms Primavera faced a fundamental conflict of interest between her personal interests, PCS’s interests and BIPC’s interests, and conferred a profit on PCS, and indirectly on herself, without the consent of BIPC by all of its shareholders. Those transactions also breached the pleaded duty not to prefer or promote Ms Bakos’ interests or those of PCS in preference to those of BIPC for the same reasons.

Quantum

87. As I noted above, after the conclusion of the hearing, and given the changes in the parties’ positions in the course of the hearing and closing submissions, I directed the parties each to provide a summary of their respective positions as to damages. It is also convenient to address the quantification of Ms Primavera’s claim under this head by reference to those summaries.

88. The parties agree that $82,172 (the total amount claimed in the Statement of Claim [20]) was transferred from BIPC to PCS during the period 27 January 2012 to 29 June 2012. This includes $28,310 (referred to in paragraphs 31–32 and 41 above) paid to PCS that is also included in Ms Primavera’s claim relating to the overpayment of Ms Bakos’ salary, which I have held should be addressed in respect of this claim.

89. As I noted above, Ms Bakos seeks to rely on repayments of amounts to BIPC and payments made on its behalf. I will refer to the detail of those amounts below. Ms Primavera contends that Ms Bakos has not established that she repaid those amounts to BIPC and that the amounts that Ms Bakos says she caused PCS to transfer back to BIPC cannot be classified as repayments to BIPC. Ms Primavera contends it would be necessary to evaluate all transfers between the two companies to determine whether those amounts were repaid. Mr Gor submits that Ms Bakos bears the legal and evidential burden of establishing and demonstrating that she made BIPC whole, and submits that that required she demonstrate that funds transferred from PCS to BIPC were not otherwise transferred back to PCS or otherwise improperly applied. Mr Gor in turn has contended that, within short periods of the alleged transfer of funds back from PCS to BIPC, other funds had been taken out of BIPC, and that there were other transfers between BIPC and PCS which also needed to be taken into account. This submission does not assist Ms Primavera, because she had both the legal and evidentiary onus of establishing the amount of any overpayment to Ms Bakos, having regard to all relevant transactions and, if she did not account for all relevant transactions, she would not discharge that onus. However, it seems to me that I can properly proceed on the basis that the parties have between them identified all relevant transactions to which reference needs to be made in this claim.

90. Ms Primavera submits that, if the Court takes the view (as I do) that such transfers or payments can constitute repayment to BIPC, there is an issue as to which of the three sums identified in paragraphs 57, 60, and 69 of Ms Bakos’ affidavit should be taken into account. The reference to paragraph 57 of Ms Bakos’ first affidavit is to her evidence of 33 transactions during the period 30 January 2012 to 27 April 2012, totalling $51,617.65, which she claimed amounted to repayments by PCS to BIPC. Ms Bakos ultimately did not press a claim to a credit for that figure in the summary of her position submitted and the parties agreed that the figure in paragraph 57 of Ms Bakos’ first affidavit (relating to amounts retransferred to PCS) should be reduced to $39,600.15, in a document headed “Agreed Schedule 2 to the Second Further Amended Defence excluding transactions where there are matched (or substantially matched) transfers between BIPC and PCS”, submitted to my Associate on 15 May 2019. I understand that document, in the context of the closing submissions and the covering email from the Plaintiff’s solicitors recording the parties’ agreement as to that matter, to indicate that the parties had agreed that the relevant adjustments addressed the issue of monies transferred back and forth between BIPC and PCS, so as to avoid the possibility that the parties might incur the further costs of an expert being appointed by the Court to inquire into that issue. I proceed on that basis. The effect of that schedule was to reduce the amount of several claims by Ms Primavera, where amounts which she had originally contended were withdrawn from BIPC’s account had subsequently been repaid to BIPC, often by credits in substantially similar amounts to BIPC’s account. The agreed amount of $39,600.15 should be deducted from Ms Primavera’s claim in this respect.

91. The reference to paragraph 60 of Ms Bakos’ first affidavit is to her evidence that she paid BIPC and Bosshard Medical expenses from PCS’s account, and she identifies 16 transactions totalling $10,256.97 during the period 9 May 2012 to 28 June 2012 which she says were paid from PCS’s account for BIPC and Bosshard Medical’s purposes. These expenditures are supported by documentation and should be deducted from Ms Primavera’s claim in this respect.

92. The reference to paragraph 69 of Ms Bakos’ first affidavit is to her evidence that she caused PCS to pay the balance of funds, not otherwise repaid to BIPC or paid to identified expenses on behalf of BIPC, towards bills and expenses on BIPC’s behalf. As I noted above, her evidence asserting that matter was admitted by way of submission only, and does not establish the asserted fact. I also referred above to Ms Bakos’ evidence that she has not located all of the records of the expenses paid from the PCS account on behalf of BIPC and Bosshard Medical. She refers to descriptions which use the phrase “payment BM” or “BM Bills” in bank account records, in asserting that other payments were made on behalf of BIPC or Bosshard Medical. I am not satisfied that that description in the bank records is sufficient to establish that matter, alone or in connection with Ms Bakos’ assertion to that effect, without evidence to corroborate the nature of those payments. This amount should not be deducted from Ms Primavera’s claim.

93. The amount payable by Ms Bakos to Ms Primavera in respect of this claim, after allowing the two deductions set out in paragraphs 90–91 above, is $32,314.88. Ms Primavera also claims interest on this claim in accordance with s 100 of Civil Procedure Act 2005. It will be necessary for her to calculate that interest on the amount that I have held to be recoverable under this claim.

Ms Primavera’s claim for funds received by FIPC

94. Ms Primavera’s third claim initially related to a failure to account for funds incorrectly received by FIPC, which it was contended relate to medical equipment sold or hired by BIPC. It emerged, in the course of the hearing, that many of those payments were correctly received by FIPC for goods sold or hired by FIPC when it conducted the Bosshard Medical business prior to the sale of that business, where payment was made to it after the completion of that sale. Ms Primavera then abandoned all aspects of that claim, other than a claim for the amount of $43,147.38 transferred from BIPC’s bank account to FIPC on or about 4 July 2011. In closing submissions, Ms Primavera ultimately also abandoned that claim. It is therefore not necessary to say anything further in respect of this claim.

Orders

95. I direct the parties to bring in agreed orders to give effect to this judgment, including as to costs, within 14 days or, if there is no agreement between them, their respective short minutes of order and short submissions as to the differences between them.

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Decision last updated: 04 July 2019