K. & A. LAIRD (N.S.W.) Pty Ltd (In Liquidation) v AIDZAN Pty Ltd (In Liquidation) in its own capacity and in its capacity as trustee of the Peter Laird Trust, the Peter Alan Laird Property Trust (known as the PAL Property Trust) and the Aidzan Superannuation Fund [2023] NSWSC 603

Supreme Court New South Wales

Medium Neutral Citation: K. & A. LAIRD (N.S.W.) Pty Ltd (In Liquidation) v AIDZAN Pty Ltd (In Liquidation) in its own capacity and in its capacity as trustee of the Peter Laird Trust, the Peter Alan Laird Property Trust (known as the PAL Property Trust) and the Aidzan Superannuation Fund [2023] NSWSC 603 Hearing dates: 9-12 May, 17-19 May 2023 Date of orders: 7 June 2023 Decision date: 07 June 2023 Jurisdiction: Equity - Corporations List Before: Black J Decision: Parties to bring in agreed minutes of order to give effect to judgment. Catchwords: EQUITY – fiduciary obligations – purchase of property by entity associated with director – where purchase funded by company and by borrowings – where property then leased to company - whether director of company breached no conflict and no profit duties – whether knowing receipt of trust property – whether remedial constructive trust is established – whether cause of action is time barred TORTS – Negligence – where director caused the company to leave a large industrial property dormant – where director did not wind up the company and paid himself a salary and caused the company to continue to pay rent to a company associated with him while trading at a loss - whether director breached his general law duty of care and diligence – whether cause of action is time barred PROCEDURE - fraudulent concealment – where Plaintiff relied on s 55 of the Limitation Act 1969 (Cth) to overcome limitation defences – whether knowledge of claims should be imputed to the corporate Plaintiff CORPORATIONS – Directors' duties – whether director should be relieved from liability under s 1318 of the Corporations Act 2001 (Cth) Legislation Cited: - Bankruptcy Act 1966 (Cth), Pt VI Div 3, ss 116(1)-(2), 128B-128C, 139ZU - Companies Act 1981 (Cth), s 229 - Corporations Act 2001 (Cth), 180-183, 286, 1305, 1317H, 1317K, 1318 - Companies Act 1962 (SA), s 365 - Evidence Act 1995 (Cth), s 136 - Limitation Act 1969 (NSW), ss 11, 14-15, 47, 51, 23, 55, 63 Cases Cited: - Adelaide Brighton Cement Ltd, Concrete Supply Pty Ltd v Concrete Supply Pty Ltd (Subject to Deed of Company Arrangement) (No 4) [2019] FCA 1846 - Anthony v Morton [2018] NSWSC 1884 - Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 - Ashrafinia v Ashrafinia [2013] NSWSC 1442 - Australian Careers Institute Pty Ltd v Australian Institute of Fitness Pty Ltd (2016) 340 ALR 580; (2016) 116 ACSR 566; [2016] NSWCA 347 - Australian Securities and Investments Commission v Edwards (No 3) (2006) 57 ACSR 209; [2006] NSWSC 376 - Australian Securities and Investments Commission v Healey (No 2) (2011) 85 ACSR 654; [2011] FCA 1003 - Australian Securities and Investments Commission v MacDonald (No 12) (2009) 73 ACSR 638; [2009] NSWSC 714 - Australian Securities & Investments Commission v Vines (2005) 65 NSWLR 281 - Barnes v Addy (1874) LR 9 Ch App 244 - Beach Petroleum NL v Johnson [1993] FCA 392 - Black v S Freedman & Co (1910) 12 CLR 105 - Bluemine Pty Ltd (in liq) v AKA (Civil) Pty Ltd; Earth Civil Australia Pty Ltd (in liq) v AKA (Civil) Pty Ltd; Diamondwish Pty Ltd (in liq) v Ivana Cassaniti; Rackforce Pty Ltd (in liq) v Ivana Cassaniti; RCG CBD Pty Limited (in liq) v Borg Family Pty Ltd [2022] NSWCA 160 - Calverley v Green (1984) 155 CLR 242 - CellOS Software Ltd v Huber (2018) 132 ACSR 468; [2018] FCA 2069 - Coope v LCM Litigation Fund Pty Ltd (2016) 333 ALR 524; [2016] NSWCA 37 - Crawley v Short [2009] NSWCA 410 - Daniels (formerly practising as Deloitte Haskins & Sells) v Anderson (1995) 37 NSWLR 438; 118 FLR 248; 16 ACSR 607 - Electrical Enterprises Retail Pty Ltd v Rodgers (1988) 15 NSWLR 473 - ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24 - Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 - Farrow Finance Co Ltd (in liq) v Farrow Properties Pty Ltd (in liq) (1997) 26 ACSR 544 - Finance & Guarantee Company Pty Ltd v Auswild [2019] VSC 664 - Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181 - Gordon in His Capacity as Liquidator of Lyon Form Pty Ltd (in liq) v Leon Plant Hire Pty Ltd (in liq) (2015) 16 ASTLR 185; [2015] NSWSC 397 - Great Southern Finance Pty Ltd (in liq) v Rhodes [2014] WASC 431 - Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; (2012) 87 ACSR 260; [2012] FCAFC 6 - Guinness PLC v Saunders [1990] 2 AC 663 - Hall v Poolman (2007) 215 FLR 243 - Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 - HP Mercantile Pty Ltd v Dierickx (2013) 306 ALR 53; [2013] NSWCA 479 - Jones v Dunkel (1959) 101 CLR 298 - Kalls Enterprises Pty Ltd (in liq) v Baloglow (2007) 63 ACSR 557; [2007] NSWCA 191 - Lewis Securities (in liq) v Carter (2018) 355 ALR 703; 334 FLR 9; 128 ACSR 120; [2018] NSWCA 118 - Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 - Links Golf Tasmania Pty Ltd v Sattler (2012) 213 FCR 1; 292 ALR 382; 90 ACSR 288; [2012] FCA 634 - Maelor Jones Investments (Noarlunga) Pty Ltd v Heywood-Smith (1989) 54 SASR 285 - Morley v Australian Securities and Investments Commission (No 2) (2011) 83 ACSR 620; [2011] NSWCA 110 - Mudgee Dolomite & Lime Pty Ltd v Murdoch; Re Mudgee Dolomite & Lime Pty Ltd [2020] NSWSC 1510 - Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) (2022) 398 ALR 658; [2022] NSWCA 12 - Natural Extracts Pty Ltd v Stotter (1997) 24 ACSR 110 - Ngurli Ltd v McCann (1953) 90 CLR 425 - No 1 Victoria Dragons Pty Ltd v AEN Developments Pty Ltd [2022] NSWSC 1345 - Re Atlas Advisors Australia Pty Ltd [2022] NSWSC 705 - Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 - Re DCA Enterprises Pty Ltd [2023] NSWSC 11 - Re Duomatic Ltd [1969] 2 Ch 365 - Re Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (All In Liq) [2021] NSWSC 966 - Re SRD Property Pty Ltd [2023] NSWSC 441 - Re Swan Services Pty Ltd (in liq) [2016] NSWSC 1724 - Robins v Incentive Dynamics Pty Ltd (in liq) (2003) 175 FLR 286; 45 ACSR 244; [2003] NSWCA 71 - Saba v Plumb (2018) 97 NSWLR 278; 19 BPR 38,401; [2018] NSWCA 60 - SEA Food International Pty Ltd v Lam (1998) 16 ACLC 552 - Seymour v Seymour (1996) 40 NSWLR 358 - Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 - The Hancock Family Memorial Foundation Ltd v Porteous (2000) 22 WAR 198 - Twigg v Twigg (No 4); Lambert v Twigg Investments Pty Ltd (No 3) (2020) 147 ACSR 389; [2020] NSWSC 1159 - - Twigg v Twigg (2022) 402 ALR 119; [2022] NSWCA 68 - Varma v Varma [2010] NSWSC 786 - Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd [2010] NSWSC 963 - VL Finance Pty Ltd v Legudi (2003) 54 ATR 221 - Watson v Foxman (1995) 49 NSWLR 315 - Williams v Central Bank of Nigeria [2014] AC 1189; 2 All ER 489; UKSC 10 Texts Cited: - Ford's Principles of Corporations Law (17th ed, 2023), - Jacobs' Law of Trusts in Australia (8th ed, 2016) - Law of Limitation (1st ed, 2016) Category: Principal judgment Parties: K. & A. LAIRD (N.S.W.) Pty Ltd (In Liquidation) (Plaintiff/First Cross-Defendant) AIDZAN Pty Ltd (In Liquidation) in its own capacity and in its capacity as trustee of the Peter Laird Trust, the Peter Alan Laird Property Trust (known as the PAL Property Trust) and the Aidzan Superannuation Fund (First Defendant/First Cross-Claimant) Nazdia Pty Ltd ACN 631 617 331 in its capacity as trustee of the Aidzan Superannuation Fund (Second Defendant) Peter Alan Laird (Third Defendant/Second Cross-Claimant) Michael Laird (Second Cross-Defendant) David Laird (Third Cross-Defendant) Debra Roberts (Fourth Cross-Defendant) Christine Cook (Fifth Cross-Defendant) Representation: Counsel: A Leopold SC/J Tobin (Plaintiff/Cross-Defendants) D Studdy SC/J Nixon (Defendants/Cross-Claimants)