In the matter of Sunnya Pty Ltd [2024] NSWSC 403

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Sunnya Pty Ltd [2024] NSWSC 403 Hearing dates: 28 November and 1, 4–8, 11–15, 18 and 20–21 December 2023 Date of orders: 19 April 2024 Decision date: 19 April 2024 Jurisdiction: Equity - Corporations List Before: Williams J Decision: See below at [1039]-[1047] Catchwords: CORPORATIONS – Directors – Duties under Corporations Act 2001 (Cth), ss 180, 181, 182 – Involvement of third parties in contraventions of ss 180, 181, 182 CORPORATIONS – Directors - Fiduciary duties owed to company during directorship – Circumstances in which former director continues to owe fiduciary duties to company after resigning as a director EQUITY – Fiduciaries – Conflict rule – Profit rule – Liability of fiduciaries and third parties under the rule in Barnes v Addy – Alter ego doctrine PROPERTY – Conveyancing Act 1919 (NSW), s 37A – alienation of property with intent to defraud creditors CORPORATIONS – Whether affairs of company conducted in a manner that is contrary to interests of members as a whole, and oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member Legislation Cited: Conveyancing Act 1919 (NSW) s 37A Corporations Act 2001 (Cth) ss 79, 135, 140, 180, 181, 182, 201G, 232I, 233, 237, 248C, 249H, 250E, 248E, 250J-250M, 1317H, 1317S, 1318, 1322 Evidence Act 1995 (NSW) ss 136, 140, 166, 169 Cases Cited: Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 265 CLR 1; [2018] HCA 43 Australian Careers Institute Pty Ltd v Australian Institute of Fitness Pty Ltd (2016) 340 ALR 580; [2016] NSWCA 347 Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) (2015) 235 FCR 181; [2015] FCA 342 Australian Securities and Investments Commission v Flugge (2016) 342 ALR 1; [2016] VSC 779 Australian Securities and Investments Commission v Geary (2018) 332 FLR 201; [2018] VSCA 103 Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17 Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373; [2006] NSWSC 1052 Baden v Société Générale pour Favoriser le Développement du Commerce et de l'Industrie en France SA [1993] 1 WLR 509 Barnes v Addy (1874) LR 9 Ch App 244 Barton v Deputy Commissioner of Taxation (1974) 131 CLR 370; [1974] HCA 43 BCI Finances Pty Ltd (in liq) v Binetter (2018) 362 ALR 597; [2018] FCAFC 189 Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 Breen v Williams (1996) 186 CLR 71; [1996] HCA 57 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Canadian Aero Service Ltd v O'Malley [1974] SCR 592 Cannane v J Cannane Pty Ltd (in liq) (1998) 192 CLR 557; [1992] HCA 26 Cardile v LED Builders Pty Ltd (1999) 198 CLR 300; [1999] HCA 36 Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421; [2016] FCAFC 186 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 83; [1991] HCA 54 DSHE Holdings Ltd (receivers and managers apptd) (in liq) v Potts (2022) 405 ALR 70; [2022] NSWCA 165 Duncan v Independent Commission Against Corruption [2016] NSWCA 143 Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12 Edmonds v Donovan (2005) 12 VR 513; [2005] VSCA 27 Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 Foster Bryant Surveying Ltd v Bryant [2007] EWCA Civ 200 Friend v Booker (2009) 239 CLR 129; [2009] HCA 21 Giorgianni v R (1985) 156 CLR 473; [1985] HCA 29 Grimaldi v Chameleon Mining NL (2012) 200 FCR 296; [2012] FCAFC 6 Gunasegaram v Blue Visions Management Pty Ltd (2018) 129 ACSR 265; [2018] NSWCA 179 Hancock v Rinehart (2015) 106 ACSR 207; [2015] NSWSC 646 Harstedt Pty Ltd v Tomanek (2018) 55 VR 158; [2018] VSCA 84 Hart Security Australia Pty Ltd v Boucousis (2016) 339 ALR 659; [2016] NSWCA 307 Hasler v Singtel Optus Pty Ltd (2014) 87 NSWLR 609; [2014] NSWCA 266 Hill v Zuda Pty Ltd (2022) 275 CLR 24; [2022] HCA 21 Howard v Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 Hunter Kane Ltd v Watkins [2002] EWHC 186 (Ch) Hyland v Hyland (1971) 18 FLR 461 In the matter of Sunnya Pty Ltd [2023] NSWSC 1104 In the matter of Sunnya Pty Ltd [2023] NSWSC 1286 Island Export Finance v Umunna [1986] BCLC 460 Jagatramka v Wollongong Coal Ltd [2021] NSWCA 61 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Kim v Wang (2023) 298 FCR 337; [2023] FCAFC 115 Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11 Laundy Hotels (Quarry) Pty Ltd v Dyco Hotels Pty Ltd (atf Parras Family Trust) (2023) 407 ALR 613; [2023] HCA 6 Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3 Massoud v Nationwide News Pty Ltd; Massoud v Fox Sports Australia Pty Ltd (2022) 109 NSWLR 468; [2022] NSWCA 150 Munstermann v Rayward; Rayward v Munstermann [2017] NSWSC 133 Murdoch v Mudgee Dolomite & Lime Pty Ltd (in liq) (2022) 398 ALR 658; [2022] NSWCA 12 Nicholls v Michael Wilson & Partners Ltd [2012] NSWCA 383 OLI 1 Pty Ltd (in liq) v OLG 1 Pty Ltd (2022) 164 ACSR 171; [2022] NSWSC 1199 Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31 Pittmore Pty Ltd v Chan (2020) 104 NSWLR 62; [2020] NSWCA 344 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10 R v Byrnes (1995) 183 CLR 501; [1995] HCA 1 Re Colorado Products Pty Ltd (in prov liq) (2014) 101 ACSR 233; [2014] NSWSC 789 Re IW4U Pty Ltd (in liq) (2021) 150 ACSR 146; [2021] NSWSC 40 Re Sirrah Pty Ltd (in prov liq) (2021) 152 ACSR 212; [2021] NSWSC 413 Re Sunnya Pty Limited [2023] NSWSC 225 Realestate.com.au v Hardingham (2022) 406 ALR 678; [2022] HCA 39 Rheem Australia Pty Ltd v McInnes [2020] NSWSC 1313 Rishmont Pty Ltd v Tweed City Medical Centre Pty Ltd [2002] 2 Qd R 222; [2001] QSC 372 Roberts-Smith v Fairfax Media Publications Pty Ltd (No 41) [2023] FCA 555 Saba v Plumb (2018) 97 NSWLR 278; [2018] NSWCA 60 Schmidt v AHRKalimpa Pty Ltd [2020] VSCA 193 Strategic Communications Management Pty Ltd v Techfront Australia Pty Ltd [2020] NSWSC 847 Super Vision Resources Ltd BVI Registered No 1810534 v AC Holdings Co Pty Ltd [2020] NSWCA 319 Termite Resources NL (in liq) v Meadows (2019) 370 ALR 191; [2019] FCA 354 Troulis v Vamvoukakis [1998] NSWCA 237 Twigg v Twigg (2022) 402 ALR 119; [2022] NSWCA 68 Tzavaras v Tzavaras & Sons Pty Ltd [2023] NSWCA 168 VicBeef Holdings Pty Ltd v Chen [2021] VSC 546 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Watson v Foxman (1995) 49 NSWLR 315 Xiao v BCEG International (Australia) Pty Ltd (2023) 111 NSWLR 132; [2023] NSWCA 48 Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 Zibara v Ultra Management (Sports) Pty Ltd (2021) 283 FCR 18; [2021] FCAFC 4 Texts Cited: Ford, Austin & Ramsay's Principles of Corporations Law (16th ed, 2015, Lexis Nexis Butterworths) J. D. Heydon, Heydon on Contract: The General Part (2019, Lawbook Co) J. D. Heydon, Cross on Evidence (14th ed, 2024, LexisNexis) Category: Principal judgment Parties: 2022/329426 Sunnya Pty Ltd (First Plaintiff/Cross-Defendant on First Cross Claim/Cross-Defendant on Second Cross Claim) Jatcorp Limited (Second Plaintiff) Yinghan He (First Defendant/First Cross-Claimant on Second Cross Claim) Yanxia Lu (Second Defendant/Second Cross-Claimant on Second Cross Claim) Guangzhou Aotea Biological Technology Pte Ltd (Third Defendant/Cross-Claimant on First Cross Claim) Guangzhou Niurui Trading Co., Ltd (Fourth Defendant) Sunlife Healthfood Pty Ltd (Fifth Defendant) Yaqing He (Sixth Defendant) HLW Investments Pty Ltd (Seventh Defendant) Supermega Market Ltd (Eighth Defendant) Megadairy Ltd (Ninth Defendant) NZFDA Limited (NZ) (Tenth Defendant)