Supreme Court New South Wales Medium Neutral Citation: In the Matter of Auzhair Supplies Pty Ltd (in Liq) [2013] NSWSC 1 Hearing dates: 14 August & 16 October 2012 Decision date: 25 January 2013 Jurisdiction: Equity Division - Corporations List Before: Brereton J Decision: Auzhair 1 holds its assets and undertaking upon trust for Auzhair Supplies, and is liable to account to Auzhair Supplies for such assets and undertaking. Auzhair Supplies' claim against the second, third and fourth defendants is not barred by statute - directly or by analogy - or by laches. The directors are liable in equity to compensate Auzhair Supplies for the loss it has suffered by reason of their breach of duty, being the amount that Auzhair Supplies is unable to recover from Auzhair 1. Catchwords: LIMITATION OF ACTIONS - Equitable claims - breach of trust - whether claim in respect of a fraudulent breach of trust - whether claim for breach of directors' duties is a claim in respect of a breach of trust - application in equity of statutory limitation period by analogy - whether claim for equitable compensation including profits for breach of general law directors' duties sufficiently analogous to claim for statutory compensation under Corporations Act, s 1317H that limitation period in s 1317K should apply - whether inequitable in particular circumstances of case to apply limitation period by analogy CORPORATIONS - Limitation of actions - whether running of limitation period against deregistered corporation can be suspended upon reinstatement under Corporations Act, s 601AH(3) - whether claim for equitable compensation including profits for breach of general law directors' duties sufficiently analogous to claim for statutory compensation under Corporations Act, s 1317H that limitation period in s 1317K should apply - whether inequitable in particular circumstances of case to apply limitation period by analogy Legislation Cited: (Cth) Companies Act 1981, s 229 (Cth) Corporations Act 2001, s 180, s 181, s 182, s 183, s 185, s 601AH, s 1317H, s 1317K (NSW) Companies Act 1961, s 124(1) (NSW) Limitation Act 1969, s 14(1)(d), s 23, s 47(1)(a), s 48, s 55(1)(b) (UK) Limitation Act 1939, s 26 (UK) Limitation Act 1980, s 21(1)(a) (VIC) Companies Act 1958, s 107 (VIC) Trusts Act 1896, s 29(1) Cases Cited: A-G for Hong Kong v Reid [1949] 1 All ER 1; 1 AC 234 Armitage v Nurse [1998] Ch 241; [1997] 2 All ER 705 Auzhair Supplies Pty Ltd (a deregistered company) and Auzhair 1 Pty Ltd, Re; Greenaway v Auzhair 1 Pty Ltd (2010) 80 ACSR 538; [2010] NSWSC 1339 Barker v Duke Group [2005] SASC 81; (2005) 91 SASR 167 Beaman v A.R.T.S. Limited [1949] 1 All ER 465 Belan v Casey [2003] NSWSC 159; (2003) 57 NSWLR 670 Brightwell & Ors v RFB Holdings Pty Limited (in Liquidation) [2003] NSWSC 7; (2003) 44 ACSR 186 Burdick v Garrick (1870) LR 5 Ch App 233 Cassis v Kalfus [2003] NSWSC 649 Chittick v Maxwell (1993) 118 ALR 728 Cia de Seguros Imperio v Heath (REBX) Ltd [2001] 1 WLR 112 Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91 Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707; [1999] 2 All ER 457 Crawley v Short [2009] NSWCA 410 Del Borrello v Australian Securities & Investments Commission [2008] WASC 48 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 Hicks v Trustees Executors and Agency Company Limited (1901) 27 VLR 389 Hovenden v Lord Annesley (1806) 2 Sch & Lef 607 In re City Equitable Fire Insurance Company Limited [1925] Ch 407 In re Sharpe; Masonic and General Life Assurance Company v Sharpe [1892] 1 Ch 154 In the matter of Liverpool Hotels Pty Ltd (in liq) [2010] NSWSC 72 KM v HM (1993) 96 DLR (4th) 289 Knox v Gye (1872) LR 5 HL 656; 42 LJ Ch 234 Maxwell v Chittick [1994] NSWCA 196 Norton v Lord Ashburton [1914] AC 932 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262, 274; 29 ACSR 148; 12 ACLC 1705 P&O Nedlloyd BV v Arab Metals Co & Ors [2007] 1 WLR 2288 Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187; 14 ACSR 109; 12 ACLC 674 R v McNeil [1922] HCA 33; (1922) 31 CLR 76 Savage v Lunn [1998] NSWCA 203 Seymour v Seymour (1996) 40 NSWLR 358 Smith v Clay (1767) 3 Bro CC 646; 29 ER 743 The Charitable Corporation v Sutton & ors (1742) 2 Atk 400; 26 ER 642 The Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415 The Metropolitan Bank v Heiron (1880) 5 Ex D 319 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 89 ACSR 1; [2012] WASCA 157 Williams v Minister, Aboriginal Land Rights Act 1983 and Another (1994) 35 NSWLR 497 Texts Cited: ICF Spry (1997) Equitable Remedies, 5th Edition, LBC Information Services Meagher, Heydon & Leeming (2002) Meagher, Gummow & Lehane's Equity - Doctrines & Remedies, 4th Edition, LexisNexis Butterworths Paterson, Ednie & Ford (1982-1990) Australian Company Law, 3rd Edition, Vol 2, Butterworths Young, Croft & Smith (2009) On Equity, Lawbook Co Category: Principal judgment Parties: Auzhair Supplies Pty Ltd (in liq) (plaintiff) Auzhair 1 Pty Ltd (first defendant) Roy Gerace (second defendant) Ilario Gerace (third defendant) Domenico Gerace (fourth defendant) Representation: Counsel: Mr JT Johnson (plaintiff) Mr DPM Ash (defendants) Solicitors: Carroll & O'Dea (plaintiff) Sachs Gerace Lawyers (defendants) File Number(s): 2012/ 80701 Judgment 1The plaintiff Auzhair Supplies Pty Limited, now in liquidation, imported hair colour product for use in the hairdressing industry in which its shareholders and directors, the second defendant Roy Gerace, the third defendant Ilario Gerace and the fourth defendant Domenico Gerace - all brothers - were engaged. In July 2002, Warren Thomas Greenaway and Elizabeth Gay Greenaway advanced $200,000 to Auzhair Supplies, which was applied to discharge other indebtedness of the company. Between 30 June 2003 and 2 July 2003, the Greenaways advanced a further $400,000 to the company. 2Meanwhile, on 17 June 2003, another company Auzhair 1 Pty Ltd was incorporated with Roy and Ilario Gerace as its directors, and the three Gerace brothers, their spouses, and the Greenaways as the shareholders, each holding one of eight shares. Thereafter, Auzhair Supplies transferred its assets and undertaking (including the proceeds of the $400,000 advanced by the Greenaways) to Auzhair 1. Before me, the only evidence that explained this transaction was that of Mr Roy Gerace, who said: We decided to establish a new company. We all discussed it, and decided to transfer everything to the new company. 3As I understand the effect of this evidence, in its context, it is that he and his brothers and the Greenaways agreed to establish a new company and to transfer the assets and undertaking of the old company to it. 4On 1 July 2004, a written loan agreement between Auzhair Supplies and the Greenaways recorded that they had advanced $600,000 to the company, which was repayable on 1 July 2007. 5On 6 June 2005, Auzhair Supplies was deregistered pursuant to Corporations Act, s 601AA. In connection with the application for deregistration, Mr Roy Gerace made a declaration that the company had no liabilities. Before me, he explained this on the basis that he believed that all its liabilities had been transferred to Auzhair 1, and that all the shareholders knew this to be so. While a lawyer knows that liabilities cannot be transferred in that way, it is not beyond comprehension that laypeople engaged in such a transaction might honestly hold such a belief. 6The Greenaways received payments of interest on their loan, of $10,000 on 1 July 2003, a further $10,000 on 3 January 2004, $30,000 on 30 June 2004, another $30,000 on 2 July 2004, a further $30,000 on 30 June 2005, $25,000 on 5 July 2005, and $87,800 between 3 July 2007 and 4 September 2009. However, the principal was not repaid. 7In proceedings 2010/17300, the Greenaways sought orders reinstating Auzhair Supplies and winding it up in insolvency. On 19 November 2010, Ward J (as her Honour then was) made an order that ASIC reinstate the registration of Auzhair Supplies, and that the company be wound up in insolvency: Auzhair Supplies Pty Ltd (a deregistered company) and Auzhair 1 Pty Ltd, Re; Greenaway v Auzhair 1 Pty Ltd (2010) 80 ACSR 538; [2010] NSWSC 1339. 8In the present proceedings, the company in liquidation seeks relief against Auzhair 1 and the directors in respect of the transfer to Auzhair 1 of Auzhair Supplies' assets and undertaking. The first defendant Auzhair 1 admits that it holds the assets and undertaking received from Auzhair Supplies upon trust for Auzhair Supplies, subject to any just allowance for expenses incurred by Auzhair 1 in the period of the trusteeship. The third defendant Ilario Gerace and the fourth defendant Domenico Gerace say that they left the management of the company and the business entirely to the second defendant Roy Gerace, who in turn admits that in authorising the transfer of the assets and undertaking he acted wrongfully and mistakenly. He also says, and I accept, that he discussed the proposed transfer with his brothers and that all agreed to it. It is therefore plainly established that in procuring and authorising the transfer of the company's assets and undertaking to Auzhair 1 for no consideration, the directors were in breach of their duties to exercise their powers and discharge their duties in good faith and the best interests of Auzhair Supplies, and with the degree of care and diligence that a reasonable person would exercise as a director in the circumstances. This was not seriously, if at all, in dispute. (In the Statement of Claim, Auzhair Supplies also alleged that the directors misused information obtained in the course of their duties, to gain an advantage for themselves or cause detriment to Auzhair Supplies, and that in contravention of Corporations Act, s 344(1), they did not take all reasonable steps to ensure compliance with the company's obligations to maintain financial records as required by Corporations Act, s 286. However, it does not appear that such breaches, if established, would have any relevant consequences additional to those which flow from the breaches to which I have already referred.) 9In issue in this case are the civil legal consequences of the established breaches by the directors of their duties as such. The company seeks to have them held liable to account to it for the assets and undertaking that were subtracted from it. The directors contend that such a claim is statute barred, having arisen not later than February 2005, whereas the proceedings are, for relevant purposes, to be taken to have been instituted in December 2011, more than six years later. In an endeavour to avoid this consequence, the plaintiff has deliberately prosecuted its claim, not for a statutory remedy by way of compensation pursuant to (Cth) Corporations Act 2001, s 1317H, for contravention of the provisions of s 180, s 181, s 182 and/or s 183 (as it is accepted that s 1317K would operate to bar such a claim), but instead, for equitable remedies for breaches of the general law equitable duties owed by directors to their company (as specifically preserved by Corporations Act, s 185). Fraudulent breach of trust? 10Initially, the argument proceeded on the assumption that the plaintiff's claim was one in respect of a breach of trust, so that (NSW) Limitation Act s 47(1)(a) (which provides a twelve-year limitation period in respect of a fraudulent breach of trust), and s 48 (which provides a six-year limitation period in respect of a breach of trust generally) were the governing provisions. If the six-year period were applicable, the action would be statute barred. Accordingly, the question was posed whether the action was one "in respect of a fraudulent breach of trust", the hypothesis being that if so, the twelve-year period would apply with the consequence that the proceedings were commenced within time. 11The issue thus raised was, what characterises a "fraudulent" breach of trust. The answer is informed by a number of authorities. In Hicks v Trustees Executors and Agency Company Limited (1901) 27 VLR 389, the Full Court of the Supreme Court of Victoria was concerned with (VIC) Trusts Act 1896, s 29(1), and said that the equivalent exception to the six year limitation period applied only in cases in which the trustee was guilty of some improper conduct, and not in cases where the trustee's conduct amounted to no more than an honest or innocent breach of trust (at 394): The plaintiff's substantial cause of action here is undoubtedly certain breaches of trust, by reason of which she says that the value of the estate has been greatly depreciated. These breaches of trust were in not having sold certain lands forming part of the estate within a reasonable time after the testator's death, in consequence of which the lands were greatly depreciated in value, and for that depreciation the plaintiff seeks to be compensated by the trustee. Now, that is the plaintiff's substantial cause of action, and we do not think it falls within any of the exceptions of s 29 of the Trusts Act 1896, and so the Statute of Limitations applies. We think that the exception is confined to and comprises cases where the trustee has done something wrong or improper, something in which he is not innocent, and does not include the case of an innocent breach of trust such as took place in this case. It is admitted that the trustees may have made a mistake, that they acted honestly and innocently. The breaches of trust were honest and innocent. We do not think that the exceptions should apply except where the trustees have acted fraudulently or where the trustees have converted the trust property or have detained it and wilfully refuse to give it up. In other words the exception of the section only covers cases in which the trustee is guilty of some improper conduct with respect to the trust matter, but does not cover a case of this description where the trustee's conduct amounts only to an honest or innocent breach of trust at the worst. 12In Beaman v A.R.T.S. Limited [1949] 1 All ER 465, the Court of Appeal was concerned with (UK) Limitation Act 1939, s 26, which provided that in the case of an action for which a period of limitation is prescribed and either (a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent, or (b) the right of action is concealed by the fraud of any such person as aforesaid, the period of limitation shall not begin to run until the plaintiff has discovered the fraud or could will reasonable diligence have done so. The Court of Appeal held (at 467C) that for an action to be "based upon the fraud of the defendant" within s 26(a), it was necessary that the action be one in which fraud was a necessary allegation to constitute the case of action. (In distinction to this, in s 26(b) fraudulent concealment was not confined to "fraud in the ordinary sense" such as could give rise to an independent cause of action but was satisfied by conduct regarded in equity as sufficiently dishonest to prevent the statute of limitations from coming into operation. In New South Wales, however, the position is that while "fraudulent concealment" sufficient to attract this exception (under (NSW) Limitation Act 1969, s 55(1)(b), which provides that time does not run in respect of a limitation period where a cause of action is "fraudulently concealed"), is not confined to simple common law fraud but extends to conduct beyond that, it is insufficient merely that for the defendant to take advantage of the statute of limitations would be unconscionable or inequitable in the wide sense of these terms; it must generally involve a consciousness that what is being done is wrong or that to take advantage of the relevant situation involves wrongdoing [Seymour v Seymour (1996) 40 NSWLR 358, 372E, 373B]. This distinction is of some relevance later.) 13In Armitage v Nurse [1998] Ch 241; [1997] 2 All ER 705, the Court of Appeal held that the reference to "fraudulent breach of trust" in s 21(1)(a) of the (UK) Limitation Act 1980 was limited to cases of fraud or fraudulent breach of trust properly so called, and therefore to cases involving dishonesty. Millett LJ, as his Lordship then was, said (at 260): Two questions have been argued. The first is whether s21(1)(a) is limited to cases of fraud or fraudulent breach of trust properly so called, that is to say to cases involving dishonesty. The judge held that it is. In my judgment, he was plainly right for the reasons which he gave. I have explained the meaning of the word "fraud" in a trustee exemption clause, and there is no reason to ascribe a different meaning to the word where it appears in s21(1)(a) of the Limitation Act 1980. Moreover, the meaning of the subsection is not free from authority. Its predecessor, s26 of the Limitation Act 1939, was held to "mean what it says" and to be limited to cases where fraud was an ingredient of the wrong: see Beaman v. A.R.T.S. Ltd [1949] 1 K.B. 550, 558, per Lord Greene M.R. The meaning of the words "fraud" and "fraudulent" in s21(1)(a) is not distorted by the meaning of the expression "concealed fraud" formerly used in s26 of the Act of 1939 and which was given a very special meaning but has been replaced in the Act of 1980 by the more accurate expression "deliberate concealment." 14His Lordship had earlier observed that although trustees might deliberately commit a breach of trust by consciously acting beyond their powers, their conduct was not fraudulent if they did so in good faith and in the honest belief that they were acting in the interests of the beneficiaries (at 250-251): The common law knows no generalised tort of fraud. Derry v Peek, 14 App Cas 337 was an action for damages for deceit, that is to say, for fraudulent misrepresentation. In such a case fraud must be proved by showing that the false representation was made knowingly, that is to say, without an honest belief in its truth, or recklessly, that is to say, not caring whether it was true or false. Care needs to be taken when these concepts are applied not to a representation but to a breach of trust. Breaches of trust are of many different kinds. A breach of trust may be deliberate or inadvertent; it may consist of an actual misappropriation or misapplication of the trust property or merely of an investment or other dealing which is outside the trustees' powers; it may consist of a failure to carry out a positive obligation of the trustees or merely of a want of skill and care on their part in the management of the trust property; it may be injurious to the interests of the beneficiaries or be actually to their benefit. By consciously acting beyond their powers (as, for example, by making an investment which they know to be unauthorised) the trustees may deliberately commit a breach of trust; but if they do so in good faith and in the honest belief that they are acting in the interest of the beneficiaries their conduct is not fraudulent. So a deliberate breach of trust is not necessarily fraudulent. ... It is the duty of a trustee to manage the trust property and deal with it in the interests of the beneficiaries. If he acts in a way which he does not honestly believe is in their interests then he is acting dishonestly. It does not matter whether he stands or thinks he stands to gain personally from his actions. A trustee who acts with the intention of benefiting persons who are not the objects of the trust is not the less dishonest because he does not intend to benefit himself. 15In Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89, the High Court (at [165]) described what was required to establish liability under the second limb of Barnes v Addy for knowing assistance in a dishonest and fraudulent design on the part of the trustees, as "consciousness of those elements of the transaction which makes participation transgress ordinary standards of honest behaviour". 16In the present case, relevant facts indicative of dishonesty are that the company's assets and undertaking were assigned away for no consideration and no apparent benefit to the company, and that Roy Gerace made the declaration in connection with its deregistration to the effect that it had no liabilities, when it remained indebted to the Greenaways. At first sight, these matters appear stark. However, seen in context, that is less clear. Mr Gerace believed (albeit incorrectly) that the liability to the Greenaways had been assigned along with the assets and undertaking. Thus he did not know the declaration to be false, nor was there an intention to defeat the claims of creditors. To the contrary, the creditors (the Greenaways) were shareholders in the assignee, whereas they were not in the assignor. The evidence before me was that they and the other shareholders all agreed to the transaction. After the transfer, the Greenaways continued to be paid interest. This was in the context that, on the evidence before me, all stakeholders had agreed to establish a new company in which they all had a share to take over the business. In those circumstances, the requisite moral turpitude or dishonesty to found a conclusion that the transaction was relevantly fraudulent is absent. 17Moreover, the Statement of Claim did not explicitly plead a fraudulent breach of trust. At the highest, it alleged that the directors had "wilfully shut their respective eyes to their obligations to comply with duties as directors". As Millett LJ explained in Armitage v Nurse (at 256-257), fraud must be distinctly alleged and as distinctly proved; although it is not necessary to use the word "fraud" or "dishonesty" if the facts which make the conduct complained of fraudulent are pleaded, it is not sufficient to allege fraud to sprinkle a pleading with words like "wilfully" and "recklessly" (but not "fraudulently" or "dishonestly"). The pleading here did not meet that requirement. 18Accordingly, I would not find that the plaintiff's cause of action was one in respect of a fraudulent breach of trust, so as to fall within the longer limitation period allowed by s 47(1)(a). Suspension of limitation period? 19The plaintiff next contended that, as the company had been deregistered between June 2005 and November 2010, the court could make an order that had the effect of suspending the running of any relevant limitation period during that interval, pursuant to Corporations Act, s 601AH(3), which empowers the court to make "any other order it considers appropriate", if it makes an order for reinstatement under s 601AH(2), as Ward J has done. 20In Del Borrello v Australian Securities & Investments Commission [2008] WASC 48, Beech J said (at [19]) that the authorities (to which his Honour did not refer) made it clear that this power extended to making orders to the effect that the period of deregistration would not count for the purpose of a limitation period. That was said in circumstances where the reinstatement of the relevant company was sought to enable it to be a defendant in proceedings. For present purposes, I assume (without deciding) the correctness of that proposition in that context. It might have therefore been permissible, if it were necessary, to order pursuant to s 601AH(3) that the period of deregistration not count in respect of a cause of action against the company. 21However, in my view the power to make such an order could arise only - as it did in Del Borrello - in respect of causes of action against the company, as distinct from causes of action by the company against others. I cannot see that there is a sufficient nexus between the deregistration and reinstatement of the company Auzhair Supplies and a cause of action against its directors that an order that time not run in respect of a cause of action against the directors while the company was deregistered could be supported as ancillary to its reinstatement. The alternative view would expose not only former officers, but also complete strangers, to the resurrection of apparently time-barred suits by a company following reinstatement, potentially very many years after those causes of action had prima facie become barred. This far-reaching consequence is not to be attributed to an ancillary provision such as s 601AH(2). Applicability of Limitation Act 22Ultimately, however, there is a question whether s 47 or s 48 of the Limitation Act applies to a claim of this kind at all. 23As framed, these proceedings were not in respect of a breach of trust, but proceedings for equitable compensation for breach of fiduciary duty. Although, like trustees to beneficiaries, directors stand in a fiduciary relationship to their company, directors are not trustees. As Romer J put it in In re City Equitable Fire Insurance Company Limited [1925] Ch 407 (at 426): It has sometimes been said that directors are trustees. If this means no more than that directors in the performance of their duties stand in a fiduciary relationship to the company, the statement is true enough. But if the statement is meant to be an indication by way of analogy of what those duties are, it appears to me to be wholly misleading. I can see but little resemblance between the duties of a director and the duties of a trustee of a will or of a marriage settlement. 24A claim for equitable compensation arising from breach of fiduciary duty is not a claim in respect of a breach of trust, and does not fall within the ambit of Limitation Act 1969, ss 47 and 48 [Chittick v Maxwell (1993) 118 ALR 728, 741-2; Maxwell v Chittick [1994] NSWCA 196 (Mahoney JA, with whom Priestley and Powell JJA agreed); Brightwell & Ors v RFB Holdings Pty Limited (in Liquidation) [2003] NSWSC 7; (2003) 44 ACSR 186, 202 [63]]. The cause of action invoked in this case is not one that falls within s 47 or s48 of the Limitation Act. 25A similar contention - that a claim against directors was excepted from the operation of the South Australian equivalent of s 47 by a provision that corresponded with s 48 - failed before Doyle CJ in The Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415. His Honour said: 107 Mr Karkar, QC for the plaintiff, submits that s 32(1) of the [(SA) Limitation of Actions Act 1936] applies to the present case. The effect of that provision is to apply time limits to certain claims against a trustee: "...except where the claim is founded on any fraud or fraudulent breach of trust to which the trustee was party or privy, or is to recover trust property, or the proceeds thereof still retained by the trustee, or previously received by the trustee and converted to his use... 108 Mr Karkar submits that a director is, for the purposes of s 32(1), to be regarded as a trustee, and then argues that the present case is within the exception just referred to. The result would be that no time limit is imposed on such a claim. 109 I do not agree. The contemporary understanding is that a company director is not a trustee: Clay v Clay and Others [2001] HCA 9; (2001) 202 CLR 410 at [41]. I doubt whether it is appropriate to read s 32(1) with the eyes of the past, even if, as suggested by Millett LJ in Paragon Finance, directors were treated by equity like trustees for the purposes of the equitable principle that claims against an express trustee were never barred by lapse of time: Paragon Finance at 408. But even if the submission is correct, it simply leads to the result that I have already reached, that there is no statutory time limit which is applicable on its own terms. 26His Honour's judgment in this respect was upheld by the Full Court: Barker v Duke Group [2005] SASC 81; (2005) 91 SASR 167, [70]-[78]. Accordingly, pursuant to s 23, the Limitation Act applies to this cause of action, if at all, only by analogy. Limitation in equity by analogy 27The plaintiff submits that a claim for equitable compensation for breach of the fiduciary duties owed by directors to their company, not amounting to fraud at common law, is one in respect of a purely equitable right, and that there is therefore no analogous limitation period capable of application to it. The directors submit that if they have breached their fiduciary duties, there is an analogue with the statutory duties imposed on directors by the Corporations Act, and that the limitation period imposed by s 1317K should apply by analogy. 28It is important to recognise that Limitation Act, s 23, is not the source of or authority for the application by analogy in equity of limitation periods fixed by statute; it merely recognises the longstanding principle that Courts of Equity follow the law in this respect [see Belan v Casey [2003] NSWSC 159; (2003) 57 NSWLR 670, [146]]. The following authorities illustrate its operation. 29In Smith v Clay (1767) 3 Bro CC 646; 29 ER 743, Lord Camden said that equity would not countenance laches beyond the period for which a legal remedy had been limited by statute, and that where the legal right had been barred, the equitable right to the same thing was also barred (at 646; 744): "Expedit reipublicae ut sit finis litium", is a maxim that has prevailed in this court at all times, without the help of parliament. But, as the Court has no legislative authority, it could not properly define the time of bar, by a positive rule, to an hour, a minute, or a year; it was governed by circumstances. But as often as parliament had limited the time of actions and remedies, to a certain period, in legal proceedings, a Court in Chancery adopted that rule, and applied to similar cases in equity. For when the Legislature had fixed the time at law, it would have been preposterous for equity (which, by its own proper authority, always maintained a limitation), to countenance laches beyond the period, that law had been confined to by parliament. And therefore in all cases where the legal right has been barred by parliament, the equitable right to the same thing has been concluded by the same bar. 30In Hovenden v Lord Annesley (1806) 2 Sch & Lef 607, the Lord Chancellor of Ireland considered a claim for possession of land by a person whose title derived from a papist, Thomas, the son of John, whose land was forfeited in the rebellion of 1641. Thomas made a successful application to the commissioners comprising the court of claims established in the restoration. The case was within equity's auxiliary jurisdiction: as Lord Redesdale said (at 611), "... these acts of [the plaintiff's] ancestors affecting their legal rights are the foundation of the plaintiff's coming into a Court of equity; for otherwise his claim would be wholly at law". In this context, Lord Redesdale said (at 630): But it is said that Courts of Equity are not within the statutes of limitations. This is true in one respect: they are not within the words of the statutes, because the words apply to particular legal remedies: but they are within the spirit and meaning of the statutes, and have been always so considered. I think it is a mistake in point of language, to say that Courts of Equity act merely by analogy to the statute; they act in obedience to it ... Equity, which in all cases follows the law, acts on legal titles, and legal demands, according to matters of conscience which arise, and which do not admit of the ordinary legal remedies: nevertheless, in thus administering justice, according to the means afforded by a Court of Equity, it follows the law. 31After referring to what Lord Camden had said in Smith v Clay, Lord Redesdale added (at 632): I have looked at a great number of cases for the purpose of seeing how far this rule has been adopted at different times; and I think it is impossible not to see that courts of equity have consistently guided themselves by this principle, that wherever the legislature has limited a period for law proceedings, equity will, in analogous cases, consider the equitable rights, as bound by the same limitation. 32In effect, his Lordship said that in its auxiliary jurisdiction equity obeyed the law in respect of limitation statutes, and in its exclusive jurisdiction would, in analogous cases, follow the law. 33In Knox v Gye (1872) LR 5 HL 656; 42 LJ Ch 234, Lord Westbury said that where the suit in Equity corresponded with an action at Law which is included in the words of the statute of limitations, a Court of Equity adopted the enactment of the statute as its own rule of procedure (at 674): For where the remedy in Equity is correspondent to the remedy at Law, and the latter is subject to a limit in point of time by the Statute of Limitations, a Court of Equity acts by analogy to the statute, and imposes on the remedy it affords the same limitation. This is the meaning of the common phrase, that a Court of Equity acts by analogy to the Statute of Limitations, the meaning being, that where the suit in Equity corresponds with an action at Law which is included in the words of the statute, a Court of Equity adopts the enactment of the statute as its own rule of procedure. 34In The Metropolitan Bank v Heiron (1880) 5 Ex D 319, the issue arose in the context of directors' liability: a company brought an action against a former director to recover £250, on the ground that the defendant had received it as a bribe from a debtor of the company, as an inducement for the director to use his influence to obtain a favourable compromise. Counsel for the plaintiff appellant, Phillimore, characterised the claim as "an equitable action on the ground of breach of trust", so that the statute provided no bar [Argument, 321], citing The Charitable Corporation v Sutton & ors (1742) 2 Atk 400; 26 ER 642, in which the Lord Chancellor had considered the liability of 50 committeemen of a company whose malfeasance and nonfeasance had permitted a fraud on the company by five persons; in holding that many of these committeemen - analogous to modern day directors - were liable, the Lord Chancellor had observed (at 406), that "By accepting a trust of this sort, a person is obliged to execute it with fidelity and reasonable diligence; and it is no excuse to say that they had no benefit from it, but that it was merely honorary ... and therefore they are within the case of common trustees". Phillimore sought to distinguish Hovenden v Lord Annesley on the basis that that case was in the auxiliary jurisdiction, adding that a director was, according to Lindley's Partnership, "a quasi-trustee" [Argument, 322]. The court was of the view that the principal could recover the bribe from the fiduciary but that the action would be one for "equitable debt" (as per James LJ at p. 323) or "a suit founded on breach of duty or fraud" (as per Cotton LJ). The court applied the statute of limitations by analogy and thus held that the plaintiff's claim was statute-barred, treating the rule of analogy as applicable in the exclusive jurisdiction. James LJ summarised the position (at 323): ... it must be borne in mind that [the liability arising from the bribe] is a debt only differing from ordinary debts in the fact that it is merely equitable, and in dealing with equitable debts of such a nature Courts of Equity have always followed by analogy the provisions of the Statute of Limitations, in cases in which there is the same reason for making the length of time a bar as in the case of ordinary legal demands. 35As Waller LJ identified in Cia de Seguros Imperio v Heath (REBX) Ltd [2001] 1 WLR 112 (at 123), discussed below, in A.-G. for Hong Kong v Reid [1949] 1 All ER 1; 1 AC 234 Lord Templeman disapproved Metropolitan Bank v Heiron in so far as it decided that a bribe was not held on trust for the principal, commenting (at 335F-G) as follows:- The decision in Metropolitan Bank v Heiron is understandable given the finding that the fraud was made known to the company more than six years before the action was instituted. But the same result could have been achieved by denying an equitable remedy on the grounds of delay or ratification. 36But as Waller LJ went on to explain: That comment may be understandable in the context of holding that a bribe is held on trust, but of greater relevance, nothing in Lord Templeman's speech indicates that there was anything surprising in the Court of Appeal in Metropolitan Bank v Heiron applying by analogy the statutes of limitation to a claim founded on breach of duty for fraud in the context of a fiduciary relationship. In my view, accordingly, Mr Gross' submission is right that this is an example of the court of equity actually applying statutes of limitation by analogy to a dishonest breach of fiduciary duty, where no proprietary remedy is claimed. 37In Burdick v Garrick (1870) LR 5 Ch App 233, the Court of Appeal held (at 240 (Lord Hatherley LC)) that an agent who stood in a fiduciary relationship to his principal could not set up the bar on a suit for an account, in circumstances where the agency was the holding of money on trust to be employed "in a particular manner". This is to be understood as a case of breach of fiduciary obligation in the exclusive jurisdiction, for which there was no analogue, as was explained in Norton v Lord Ashburton [1914] AC 932, where Viscount Haldane LC said that a claim for compensation for breach of fiduciary duty, being one in Equity's exclusive jurisdiction, stood outside the statute of limitations (at 956-957): ... a Court of Equity had jurisdiction to direct accounts to be taken, and in proper cases to order the solicitor to replace property improperly acquired from the client, or to make compensation if he had lost it by acting in breach of a duty which arose out of his confidential relationship to the man who had trusted him. This jurisdiction, which really belonged to the exclusive jurisdiction of the Court of Chancery, had for the client the additional advantage that, as is illustrated by the judgment of Lord Hatherley LC in Burdick v Garrick, the Statute of Limitations would not apply when the person in a confidential relationship had got the property into his hands. 38It needs to be recognised that these were cases of proprietary claims to property in the hands of the fiduciary, in equity's exclusive jurisdiction, for which there is no corresponding legal remedy. 39Meanwhile, however, the issue arose again in the context of directors' liability in In re Sharpe; Masonic and General Life Assurance Company v Sharpe [1892] 1 Ch 154, where the directors of a company had approved the payment of dividends when there was no profit. The appellant directors pleaded the statutory bar, the analogy to the bar, and laches. Lindley LJ (with whom Bowen and Fry LJJ generally agreed), described the position of a director as follows (at 167): Now a director of a company is certainly no mere agent. It is his duty, among other things, to protect the company and to enforce its rights even against himself, and the conflict between his interest and his duty where he has misapplied the company's money prevents the Statute of Limitations from applying to an action brought against him by the company in order to recover such money. 40His Lordship (at 167) reiterated the distinction, drawn in Metropolitan Bank v Heiron, between an action to recover a debt, and one to recover trust property: In that case an action to recover money to which the plaintiff had a right, although it had never been his property, was held barred by the statute; but the difference between such an action and an action to recover trust money held by a trustee and misapplied is pointedly alluded to. The statute applies to actions to enforce a mere obligation to pay, but not to actions to recover trust property from a trustee who has misapplied it. 41(The last proposition in that passage depends, of course, on the terms of the statute in question: in this State, breaches of trust are expressly caught by Limitation Act, ss 47 and 48.) 42In R v McNeil [1922] HCA 33; (1922) 31 CLR 76, Isaacs J said that in its auxiliary jurisdiction, on a claim for a superior remedy to that available for the same cause of action at law, a Court of Equity was bound by the limitation statute; but in its exclusive jurisdiction was at large, though it usually applied its own equitable doctrine of laches and adopted the measure of time which Parliament had indicated in analogous cases (at 100): The position may be shortly stated. Where a Court of equity finds that a legal right, for which it is asked to give a better remedy than is given at law, is barred by an Act of Parliament, it has no more power to remove or lower that bar than has a Court of law. But where equity has created a new right founded on its own doctrines exclusively, and no Act bars that specific right, then equity is free. It usually applies, from a sense of fitness, its own equitable doctrine of laches and adopts the measure of time which Parliament has indicated in analogous cases, but, when a greater equity caused by fraud arises, it modifies the practice it has itself created and gives play to the greater equity. 43Thus in the exclusive jurisdiction, the analogy will not be applied where a greater equity outweighs it. 44In Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91, Dixon J (as he then was) discussed the bar in a context where the defendant husband "was accountable in equity" for property he had received on the plaintiff wife's behalf, holding in effect that the statute of limitations could not be applied by analogy to an equitable claim when there was no legal analogue (at 99-100): The Statute of Limitations, by its terms, does not operate directly upon equitable remedies ... But such remedies are barred in Courts of equity by analogy to the statute. The analogy is found in the case of constructive trusts, where the equity is fastened upon the trustee not because he intended to become the fiduciary of property but because of the character of his dealings and in spite of his intention to take the property for himself. But Courts of equity have refused to see any analogy when a person, intending to act in a capacity which is fiduciary, has received, as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit. Such a person is either an express trustee, or, if that name does not in strictness belong to him, he stands in the same position as a direct or express trustee ... [His Honour then referred to, inter alia, Burdick v Garrick as an example and authority] 45Again, notably, this was a proprietary claim to property in the hands of the fiduciary. 46In Equitable Remedies (1997, 5th Edition), Dr Spry wrote (at 419-420): . . . a statute of limitations may be raised by analogy in defence to a claim that is brought in the exclusive jurisdiction of a court of equity, such as in proceedings for the enforcement of a trust, rather than in its auxiliary or concurrent jurisdictions. Here there is no question of merely recognising and giving effect to an abrogation of a right at law or of acting in obedience to a statute that relates to rights at law. Hence it must be seen first whether there is a special statutory provision that affects directly, whether expressly or by implication, the particular equitable right that is in question. But if there is no such provision, the court may decide that the material equitable right is so similar to legal rights to which a limitation period is applicable that that limitation period should be applied to it also. In this latter case the limitation period is said to be applied by analogy, and the principles that govern cases of this kind are that if there is a sufficiently close similarity between the exclusive equitable right in question and legal rights to which the statutory provision applies a court of equity will ordinarily act upon it by analogy but that it will so act only if there is nothing in the particular circumstances of the case that renders it unjust to do so. What is regarded by courts of equity as a sufficiently close similarity for this purpose involves a question of degree, and reference must be made to the relevant authorities. The basis of these principles is that, in the absence of special circumstances rendering this position unjust, the relevant equitable rules should accord with comparable legal rules. 47This passage also reflects the exception, referred to by Isaacs J in R v McNeil, that the analogy will not be applied in a case in the exclusive jurisdiction if greater equities outweigh it. 48In Cia de Seguros Imperio, the Court of Appeal considered whether a claim for equitable compensation arising from a dishonest breach of fiduciary duty was barred. Waller LJ (at 120) cited the above extract from Dr Spry's work, and (from 121), rejected the view that the dichotomy between the exclusive and auxiliary jurisdictions was determinative of whether a statutory limitation period would be applied by analogy, holding that the application of the analogy rule depended upon the commonality of the elements of the legal and equitable causes of action, and the nature of the remedy sought - in particular, whether the equitable remedy was analogous (or to use the language of Knox v Gye, "correspondent") to that provided at law: Mr Gross referred us to various authorities in which equity had applied the statutes by analogy and some where it had not, and suggested that the dividing line was between those cases where the court was giving remedies against trustees or fiduciaries dissimilar from remedies at law e.g. a proprietary or restorative remedy against someone already a trustee or a fiduciary, and those in which it was providing a remedy analogous to that which would have been available at law. He submitted the distinction had nothing to do with whether equity was exercising its "exclusive" jurisdiction. The authorities included Hovenden v Lord Annesley (1806) 2 Sch & Lef 607; Burdick v Garrick (1870) LR 5 Ch 233; Friend v Young [1897] 2 Ch 421 and North American Land v Watkins [1904] 1 Ch 242 (where many other authorities were reviewed). In my view the authorities cited by Mr Gross and the broad principles set out in the above quotations support the submission that equity would have taken the view that it should apply the statute by analogy to a claim for damages or compensation for a dishonest breach of fiduciary duty. I say that because what is alleged against Heaths as giving rise to the dishonest breach of fiduciary duty are precisely those facts which are also relied on for alleging breach of contract or breach of duty in tort. It is true that there is an extra allegation of "intention" but that does not detract from the fact that the essential factual allegations are the same. Furthermore, the claim is one for "damages". The prayer for relief has now been amended with our leave to add a claim for "equitable compensation", but the reality of the claim is that it is one for damages, the assessment of which would be no different whether the claim was maintained as a breach of contract claim or continued simply as a dishonest breach of fiduciary duty claim. Mr Flaux however sought to persuade us that the above conclusion was fallacious. His argument was that the line to be drawn between those cases where equity did apply the statutes of limitation by analogy and those where it did not, was defined by the question whether equity was exercising its "exclusive" jurisdiction or its "concurrent" jurisdiction. In the former case, so Mr Flaux submitted, the court would not apply the statutes by analogy, and in the latter it would. Thus, he submitted, one would find no authority where the court was exercising its exclusive jurisdiction where the statute had been applied by analogy. This does not seem to accord with the above quotation from Spry, but for this distinction he placed reliance on the following. First he relied on the passage in Viscount Haldane's speech in Nocton already quoted in which he suggested that the main head of claim "is barred in equity by the acquiescence of the plaintiff, and at law by the statute of limitations." He submitted that Viscount Haldane was drawing a distinction between a claim within equity's exclusive jurisdiction and a claim within its concurrent jurisdiction. As Langley J pointed out, the difficulty for Mr Flaux was that limitation was not in issue; limitation by analogy was not under consideration and thus Knox v Gye was not cited; furthermore, previously in his speech Viscount Haldane had referred to the statutes of limitation not applying "when the person in a confidential relationship had got the property in his hands." Second, Mr Flaux relied on the judgment of Millett LJ in Paragon Finance v Thakerar & Co [1999] 1 All E.R. 400, in which Millett LJ explained how the statute of limitations would be applied by analogy so as to bar a proprietary claim against a "constructive trustee" (improperly so called as he would say) alleged to be such by virtue of his conduct where no pre-existing fiduciary relationship existed; whereas it would not be applied in relation to a proprietary claim against a constructive trustee (properly so called as he would say) where the constructive trusteeship flowed from a pre-existing fiduciary or trust relationship. In my view, it is fundamentally to misunderstand the judgment of Millett LJ to suggest that he would have approved the view that a claim for damages brought against a fiduciary, even alleging a dishonest breach of that duty, would be free from limitation altogether. In my view, Millett LJ's treatment of Nelson v Rye [1996] 2 All ER 186 demonstrates that point and demonstrates beyond peradventure that the question whether equity was exercising its exclusive as opposed to its concurrent jurisdiction does not supply the definitive answer as to whether equity applied the statute by analogy. In Nelson v Rye Laddie J held that claims to an account in relation to a fiduciary were outside the scope of the Limitation Act 1980. But he did not consider section 36 and whether there should be any application of the statutes of limitations by analogy. Of that decision Millett LJ said this in Paragon at p. 415h:- The law on this subject has been settled for more than a hundred years. An action for an account brought by a principal against his agent is barred by the statutes of limitation unless the agent is more than a mere agent but is a trustee of the money which he received: see Burdick v Garrick (1870) LR 5 Ch App 233, Knox v Gye (1872) LR 5 HL 656 and Re Sharpe, Re Bennett, Masonic and General Life Assurance Co v Sharpe [1892] 1 Ch 154. A claim for an account in equity, absent any trust, has no equitable element; it is based on legal, not equitable rights: see How v Earl Winterton [1896] 2 Ch 626 at 639 per Lindley LJ. Where the agent's liability to account was contractual equity acted in obedience to the statute: see Hovenden v Lord Annesley (1806) 2 Sch & Lef 607 at 631 per Lord Redesdale. Where, as in Knox v Gye, there was no contractual relationship between the parties, so that the liability was exclusively equitable, the court acted by analogy with the statute. Its power to do so is implicitly preserved by s 36 of the 1980 Act (re-enacting in simpler terms the tortuous provisions of s2(2) and (7) which were subjected to critical analysis by Megarry V-C in Tito v Waddell (No 2), Tito v A.-G. [1977] 3 All ER 129 at 248-250, [1977] Ch 106 at 250-252). Thus Millett LJ made clear that even where equity was acting in its exclusive jurisdiction the statute was applied by analogy. 49His Lordship also referred to Metropolitan Bank v Heiron as a further obstacle in the way of the contrary view. 50In Meagher, Gummow & Lehane's Equity - Doctrines & Remedies (4th Edition, 2002) the authors wrote (at [34-075]): In Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 at 415-6, the Court of Appeal distinguished between the liability of an agent to account and the liability of an agent for funds held as a constructive trustee. The former, whether it was based in contract or arose from the fiduciary relationship, became statute barred either directly or by analogy; however there was no legal analogy for the latter and so it could not be statute-barred... Similarly, the same Court in Companhia de Seguros Imperio (REBX) Ltd [sic] [2001] 1 WLR 112; [2000] 2 All ER (Comm) 787 considered that a claim for equitable compensation resembled sufficiently a common law action for damages for breach of contract to enable the Statute of Limitations to be applied by analogy. All this was clear to Dixon J when he held in Cohen v Cohen (1929) 42 CLR 91; [1929] ALR 204 that where a husband received insurance moneys on behalf of his wife as trustee for her, under a duty to pay her those very moneys (and not merely an equivalent amount), no limitation could be applied by analogy since there was no legal analogue. 51In The Duke Group Ltd (in liq) v Alamain Investments Ltd & ors, Doyle CJ (at [113]) expressed the issue in terms whether the equitable right that is asserted - in that case, a claim for compensation for loss sustained through breach of a fiduciary duty in which breach the defendants were alleged to have dishonestly assisted - is so similar to a legal right or claim which is subject to a statutory time limit that the time limit should be applied to the equitable claim. His Honour added - citing the above-quoted passages from Spry and from Isaacs J in R v McNeil (at [114]): It is important to emphasise that when a time limit is applied by analogy to a claim in the exclusive jurisdiction of equity, the decision whether the time limit is to be applied is made in light of all the circumstances. It is necessary to consider whether, despite the similarity, it would be unjust to enforce the analogy. 52His Honour continued: 115 Mr Karkar argued that in a claim invoking the exclusive jurisdiction of equity, such as the present claim, equity will not apply a time limit by analogy, but will apply the doctrine of laches. He relied upon remarks to that general effect by Kirby P in Williams v Minister, Aboriginal Land Rights Act 1983 and Another (1994) 35 NSWLR 497 at 509-510, with whom Priestley JA agreed. Powell JA decided the matter on a basis that made it unnecessary for him to consider this particular point. In what he said, Kirby P adopted the approach taken by the Supreme Court of Canada in KM v HM (1993) 96 DLR (4th) 289. Kirby P referred to remarks there made by LaForest J, with whom a majority of the Court agreed. There, LaForest J said at 330: "While there is no doubt that in some cases equity will operate by analogy and adopt a statutory limitation period that does not otherwise expressly apply, in my view this is not such a case. And this for several reasons. First, equity has rarely limited a claim by analogy when a case falls within its exclusive jurisdiction, as in this claim for breach of fiduciary duty. Moreover, even if it is appropriate to analogize from the common law, the analogy will be governed by the parameters of the equitable doctrine of laches." He added at 332-333: "The present case involves a breach of fiduciary duty, which falls solely within the realm of equity. As such, it is not in my view readily amenable to limitation by analogy to some common law action. However, even if an analogy could be drawn that is not to say that it must be applied. As I noted earlier, equity retains a residual discretion on this point, which is the point of distinction from acting in obedience to the statute. In this respect the analogy takes on the character of laches, a point explicitly recognized by Brunyate. A more detailed consideration of laches follows, but for now it is enough to note the following proposition advanced by Brunyate, at p.17: "Where a Court of Equity is applying the statute as part of the law of laches it may reasonably allow any exceptions that are allowed in the law of laches. ... since delay by a plaintiff who has been ignorant of his right of action will not amount to laches, we should expect that, where the Court is acting by analogy to the statute, time will not run until the plaintiff is aware of his right of action." 116 As I understand it, Kirby P was intending to approve these statements of principle. That is, that a claim for compensation for breach of fiduciary duty will rarely be subject to a statutory time limit by analogy, and the doctrine of laches accommodates any and all of the factors that would fall to be considered in deciding whether or not a statutory limit should be applied by analogy. That is not to say that equity will never, in such a case, apply a statutory time limit by analogy. 53The foregoing passage - and in particular, the extract from Brunyate - illuminates that, in the exclusive jurisdiction, the application of the analogy rule is an aspect of the law of laches, and is subject to such exceptions as are allowed in respect of laches. 54After referring, inter alia, to Waller LJ's reasons in Cia de Seguros Imperio, his Honour said (from [130]): 130 These decisions support the submission by Mr Hilton. As I have said, in each case the Court took a fairly broad approach to the question. It gave considerable weight to the point that the facts relied on would support the common law and equitable claims. It seemed not greatly concerned with distinctions between the causes of action. I agree that the application of a time limit by analogy cannot depend on a minute comparison between the claim in equity and the claim that is said to be similar and is said to be statute barred. It is to be expected that there will always be differences in the elements of the claim in equity and the claim which is said to be statute barred. However, differences in the elements of the respective causes of action must be relevant, and possibly significant. 131 A similar broad approach was taken by Campbell J in Belan v Casey [2003] NSWSC 159 at [149]-[152], although the observations there made were not essential to the decision. That Judge referred with approval to the two English decisions to which I have just referred. It might be said that in Cubillo O'Loughlin J also took a fairly broad approach: at [1430]. 132 Nevertheless, I am mindful of the need for careful consideration of all the facts, in accordance with the underlying equitable principle that applies. And, as Mr Karkar pointed out, the English cases were decided after the relevant facts had been fully ventilated. 133 I agree that authority supports the contention by Mr Hilton that there are causes of action in tort against the directors sufficiently similar to the claim against the directors for breach of fiduciary duty, and which are subject to a six year time limit, to warrant in principle the application of that time limit to a claim against the directors for breach of fiduciary duty. I also accept the submission that in principle the claim against the present defendants for dishonest assistance in the directors' breach of fiduciary duty should be subjected to the same time limit as applies to the claim against the directors. 134 However, for the following reasons I am not prepared to hold, on this application for summary disposition of the claim by the plaintiff, that the claim should be struck out on the basis that it is barred by the application by analogy of the statutory time limit. 55Those reasons concerned, essentially, the difficulty of being satisfied, on an interlocutory summary dismissal application, that it was just in all the circumstances to apply the time limit by analogy, a relevant consideration being when the liquidator first became aware of the facts giving rise to the claim, as in exercising the court's discretion to apply a statutory time limit by analogy, a court of equity takes account of the plaintiff's knowledge of the plaintiff's rights and in particular of the impact of fraud, as equity will not apply a time limit in a case of "concealed fraud" (at [135]-[138]). 56In dismissing the appeal from Doyle CJ's judgment [Barker v Duke Group] Perry J, with whom Duggan J concurred, said that application of the principle was limited to cases where there is a sufficiently close similarity between the exclusive equitable right in question and the legal rights to which the statutory provision applies: 79 This principle is of application where a claim is brought within the exclusive jurisdiction of a court of equity, as opposed to cases which fall within what sometimes has been described as its "auxiliary jurisdiction". I reject the argument of Mr Wells QC, of counsel for the Autocure defendants, to the contrary. 80 This is a claim which is, within the meaning of that distinction, brought in the exclusive jurisdiction of equity. 81 In such a case, if there is a statutory period of limitation of action which applies by force of the statute, no question arises as to resort to the principle of that application by analogy. 82 However, if there is no statutory limitation which applies to the equitable right in question, the court may take the view that the equitable right is so similar to a legal right to which a statutory limitation period is applicable, that a similar limitation period should be applied to the enforcement of the equitable right. 83 In such cases, the limitation period is said to be applied by analogy. Application of the principle is limited to cases where there is a "sufficiently close similarity between the exclusive equitable right in question and legal rights to which the statutory provision applies". 84 However, a court of equity will not apply a statutory period of limitation by analogy, if in the circumstances of the case it would be unjust to do so. 85 Authorities which support the principles to which I have so far referred are set out in the reasons for judgment of Doyle CJ, and it is unnecessary to repeat references to them here. 57The reference to the doctrine applying in the exclusive jurisdiction as distinct from the auxiliary jurisdiction is, I think, not intended to mean that the analogy rule has no application in the auxiliary jurisdiction, but rather as a rejection of the proposition that it applies only in the auxiliary jurisdiction. 58As to Doyle CJ's remarks in relation to an analogy between tort and fiduciary duty, Perry J said: 95 With respect to Doyle CJ, I am not sure that I would agree with the reasoning which led him to the conclusion which he reaches in that passage in his reasons. 96 While I accept that there will always be differences in the elements of the claim sought to be pursued and the cause of action which is said to be analogous, and while in that sense there is always a question as to the degree of difference or similarity, in my view, the elements of a claim in tort against the directors differ so substantially from a claim against the directors for breach of fiduciary duty, that I have some hesitation in thinking that it is appropriate to adopt the analogy. 97 However, it is unnecessary to express a concluded view as to that aspect of the matter, as I agree with Doyle CJ that even if a six year time limit applies by analogy, it would not be proper to yield to the defendants' application to dispose of the matter summarily. 59The English Court of Appeal has subsequently endorsed the principle that there needs to be correspondence between the remedies available at law and in equity before the analogy rule will be applied. In P&O Nedlloyd BV v Arab Metals Co & Ors [2007] 1 WLR 2288, Moore-Bick LJ, with whom Buxton LJ and Jonathan Parker LJ agreed, said (at [38] and [43]): 38 ... if a statutory limitation provision, properly interpreted, applies to the claim under consideration, equity will apply it in obedience to the statute, as indeed it must. However, even if the limitation period does not apply because the claim is for an exclusively equitable remedy, the Court will nonetheless apply it by analogy if the remedy in equity is "correspondent to the remedy at law". In other words, where the suit in equity corresponds with an action at law, a court of equity adopts the statutory rule as its own rule of procedure. ... 43 It is not surprising that equity should apply by analogy the limitation periods applicable to claims at law for an account and for damages for breach of duty, whether in contract or tort, to claims for an account and for equitable compensation. In each case the same facts give rise to a claim, whether at law or in equity, and the same kind of relief is obtainable. A claim for specific performance raises different considerations, however, both because relief comparable to that available from the courts of equity was not available from the common law courts and because the facts needed to support a claim for specific performance are not in all respects the same as those necessary to support a claim for breach of contract. The latter point is demonstrated by the case of Hasham v Zenab [1960] AC 316. ... 60In Young, Croft & Smith, On Equity (2009), the learned authors say: ... depending on the facts of the case, in a claim for breach of fiduciary duty, the limitation period applicable to a common law action for fraud, or to a claim in tort or contract for breach of professional duty, may be applied by analogy. This is not to say that these limitation periods will always be applied by analogy to breaches of fiduciary duty - whether or not a limitation period will be applied turns very much on the specific facts of the claim before the court... 61In my view, the authorities to which reference has been made establish the following. 62First, in equity's auxiliary jurisdiction, where the Court is asked to give a superior remedy for a legal right, Equity applies the legal limitation period: it obeys the law. 63Secondly, even in equity's exclusive jurisdiction, where the cause of action is Equity's own creature, then if there is an analogue between the equitable claim and a legal or statutory right to which a limitation period applies, a court of equity will ordinarily apply the limitation period: in this, equity follows the law, and applies the limitation period as an aspect of the doctrine of laches. The existence of an analogue can only be determined by considering each of the equitable claim, the legal or statutory right and their respective remedies in the context of the facts and circumstances of the case; but it does not depend on a minute comparison between the claim in equity and the supposed analogue; while differences in the elements of the respective causes of action are relevant, and possibly significant, not every difference justifies not applying the statute by analogy. Further, because, in this context, application of the analogous limitation period is an aspect of laches, it is also subject to exceptions where the greater equity outweighs it; thus it is relevant to consider the plaintiff's knowledge of the plaintiff's rights and in particular of the impact of fraud, as equity will not apply a time limit in a case of "concealed fraud". The relevant enquiry is therefore to consider, first, whether the equitable claim and the corresponding legal right are so similar that the time limit applicable to the latter should be applied to the former; and, secondly, where such a similarity exists, whether it would nevertheless be inequitable to apply the analogous limitation period. 64Originally, the fiduciary obligations of directors to their company were exclusively the creature of equity, as illustrated by The Charitable Corporation v Sutton. In In re City Equitable Fire Insurance Company Ltd, where the summons alleged, against a number of directors, misfeasance, negligence, breach of trust and breach of duty, Romer J himself used the word "negligence" as a general descriptor, but this was not negligence in its common law sense: the duty of a director to exercise reasonable care is equitable in origin [Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187, 238; 14 ACSR 109; 12 ACLC 674; (Ipp J, with whom Malcolm CJ and Seaman J agreed); approved in O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262, 274; 29 ACSR 148; 12 ACLC 1705; (Spigelman CJ, with whom Priestley and Meagher JJA agreed); see also Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 89 ACSR 1; [2012] WASCA 157, [840] (Lee AJA)]. In the present case, the plaintiff claims an equitable remedy - equitable compensation including profits - in respect of an equitable obligation, namely the obligations owed by directors to their company. Thus the claim is one within equity's exclusive jurisdiction. 65Accordingly, it is next necessary to consider whether the plaintiff's claims for equitable compensation for breach of directors' general law fiduciary duties are sufficiently analogous to claims for compensation under Corporations Act, s 1317H, in respect of breaches of directors statutory duties under ss 180-183 that the limitation period imposed by Corporations Act, s 1317K, should be applied by analogy to the plaintiff's causes of action in these proceedings. This too requires some examination of the legislative history. 66The equitable duties of directors were first given statutory force in (VIC) Companies Act 1958, s 107, which was the progenitor of the provisions now to be found in Corporations Act, ss 180, 181, 182 and 183. As the authors of Paterson, Ednie & Ford, Australian Company Law (3rd Edition, Vol 2), observed (at [229/1]), s 107 was declaratory of the law at the time of its enactment and may well have been inspired by the language of Romer J in Re City Equitable Fire Assurance Co Ltd. Similar provisions were introduced elsewhere; thus in New South Wales, (NSW) Companies Act 1961, s 124(1), provided that a director shall at all times act honestly and use reasonable diligence in the discharge of the duties of his office. The balance of the section was substituted and amended, and by 1972 provided: (2) An officer of a corporation shall not make improper use of information acquired by virtue of his position as such an officer to gain directly or indirectly an advantage for himself or for any other person or to cause detriment to the corporation. (3) An officer of a corporation who commits a breach of a provision of this section is- (a) liable to the corporation for- (i) profit made by him; and (ii) damage suffered by the corporation, as a result of the breach; and (b) guilty of an offence against this Act. Penalty: Two thousand dollars. (4) This section has effect in addition to and not in derogation of any other enactment or rule of law relating to the duty or liability of a director or officer of a corporation, but a person is not liable to the corporation under this section, or guilty of an offence against this Act, in respect of a breach of the provisions of this section that is an offence under section 75A of the Securities Industry Act 1970. 67No limitation period was imposed by the Companies Act; however, at least from 1969, (NSW) Limitation Act 1969, s 14(1)(d), imposed a six-year limitation period in respect of "a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture"; and, by s 14(3), this was (at least purportedly) applicable to Commonwealth enactments. 68The (Cth) Companies Act 1981 and the cognate state Codes, saw the introduction, in s 229(1), (2), (3) and (4) of the four statutory duties that correspond to the general law duties invoked in the current matter, and that are preserved in similar though not identical terms in Corporations Act, s 180, 181, 182 and 183. Sections 229(6) and 229(7) dealt with compensation for breaches. Notably, s 229(7) permitted recovery of profits or damages, with the corporation entitled to recover from the relevant person, as a debt due to the corporation, by action in any court of competent jurisdiction: if that person or any other person made a profit as a result of the contravention or failure - an amount equal to that profit; and if the corporation has suffered loss or damage as a result of the contravention or failure - an amount equal to that loss or damage. 69Thus equitable (profits) as well as legal (loss or damage) notions were captured, as remains the case under the present Corporations Act, in which s 1317H(2) makes clear that damage includes profits. 70Section 229(10) provided, like its predecessor, that the statutory duties were in addition to "any rule of law relating to the duty or liability of a person by reason of his office...". This too is repeated in the current legislation, in s 185. 71Again, no limitation period was imposed by the companies legislation, so that, if there was any statutory bar, it continued to be s 14(1)(d) of the Limitation Act. 72In the 1989 legislation, s 232 superseded former s 229, to substantially the same effect. The Act continued to contain no limitation provision in respect of civil proceedings, although a criminal action had to be brought within five years: s 1316. 73Part 9.4B (headed "Civil consequences of contravening civil penalty provisions") was introduced only in 1992. Paragraph 139 of the Explanatory Memorandum to the Corporation Law Reform Bill of that year stated only: Proposed section l3l7EC - Time limit for application This section establishes a limitation period for the bringing of actions under proposed section 1317EA. It provides that an application for a civil penalty order may be made within 6 years after the contravention. 74Section 1317K now provides that proceedings for a declaration of contravention, a pecuniary penalty order, or a compensation order, may be started no later than 6 years after the contravention. In In the matter of Liverpool Hotels Pty Ltd (in liq) [2010] NSWSC 72, Austin J said (at [65]): Section 14(1)(d) sets a 6-year limitation period, running from the date on which the cause of action first accrues, where the cause of action is to recover money recoverable by virtue of an enactment. That provision may have no application to civil penalty proceedings for a compensation order for breach of the statutory duties of a director under the Corporations Act, where the limitation period is prescribed by a federal statute, namely s 1317K of Corporations Act. It does not in terms apply to a cause of action based on fiduciary duties under the general law. It is unnecessary to make any final decision as to the application of this provision, because the principal cause of action in which the liquidator is likely to be interested is an action for recovery of property in the hands of the entities who have received it. 75The directors owed the company statutory duties, being those contained in Corporations Act, ss 180 to 183, which correspond with the duties pleaded in paragraph 33 of the Statement of Claim. The relevant remedy for a contravention of those provisions is a compensation order under s 1317H, in connection with which "compensation for damage suffered" includes profits. This statutory remedy is admittedly barred, by operation of s 1317K, and it is to circumvent this consequence, the plaintiff invokes the directors' "general law" fiduciary obligations, and claims equitable compensation for breach thereof. 76However, the causes of action are not merely analogous but practically indistinguishable. The material facts constituting the statutory cause of action and the equitable claim are the same: the relevant offices, duties and alleged breaches are identical. The duties pleaded in paragraph 33 of the Statement of Claim are indistinguishable from the statutory duties: indeed, the particulars to that paragraph state: The duties arose at general law existing also by virtue of respectively s. 180, s. 181, s. 182, s. 183 and continuing in existence at general law pursuant to s. 185 of the Corporations Act 2001 arising from their position as director or officer of Auzhair Supplies. 77The conduct pleaded in paragraph 34 of the Statement of Claim, which is said to constitute the relevant breaches of duty, falls squarely within the parameters of ss 180 to 183: if it amounts a breach of a general law duty, it must also be a breach of the corresponding statutory duty. 78So too are the respective equitable and statutory remedies. While the cases discussed above show that there is no legal analogue to an equitable proprietary claim to property in the hands of a defaulting trustee or fiduciary, the same cannot be said of claims for equitable compensation, which are analogous to claims for damages at law. Thus as Campbell J explained in Belan v Casey (at [149]), equity applies, by analogy, to an allegation of breach of fiduciary duty based on facts which would also have sustained a common law action for fraud, the same statutory limitation period as applies to the common law action for fraud [Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707, 730; [1999] 2 All ER 457, 478]; and to a claim for breach of fiduciary duty founded upon the same facts as would support a claim in tort or contract, the limitation periods applicable for an action tort or contract [Cia de Seguros Imperio]. Similarly, a claim against a solicitor for an innocent breach of retainer does not avoid the bar by invoking the fiduciary relationship, as Limitation Act, s 14, is applied by analogy [Cassis v Kalfus [2003] NSWSC 649, [80]-[82]]. The plaintiff submitted that the remedy sought in respect of the claim for breach of fiduciary duty was not "correspondent" to the equivalent remedy for the statutory causes of action, in particular because the plaintiff sought an account of profits, which was said to be a solely equitable remedy with no equivalent at common law or under the statute. However, as explained above, the statutory remedy under section 1317H of "compensation for damage suffered" includes profits, and is conceptually indistinguishable from the remedy of equitable compensation. 79In my view, the analogy between the statutory cause of action and remedy, and the equitable claim and remedy, is a very strong one; indeed, this is as close an analogy as one can conceive. Application of the analogous limitation period is indicated by identity of the causes of action, and identity of the remedies. The plaintiff argued that the analogous limitation period should not be applied on account of Corporations Act, s 185, which provides as follows: Sections 180 to 184: (a) have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and (b) do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a). This section does not apply to subsections 180(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 180(1). 80Section 185 plainly preserves the general law duties, and the entitlement of a plaintiff to commence civil proceedings for a breach of a general law duty, notwithstanding the introduction of the statutory duties - as did its predecessors, before the introduction of any limitation period for the statutory causes of action. This permits the incremental development of the general law, unconstrained by a statutory straightjacket. But in my view this does not exclude the application by analogy of the statutory limitation period. Apart from the potential impact of the limitation period, the plaintiff remained entitled to sue for equitable remedies for breach of the general law duties instead of or in addition to statutory remedies for breach of the corresponding statutory duties. Application by analogy of the statutory limitation period imposed by s 1317K does not involve prevention by anything in ss 180 to 184 of the commencement of proceedings; such prevention flows if at all from s 1317K - and then only by analogy - and not from ss 180 to 184. It would be application of the equitable doctrine of laches, albeit informed by s 1317K, that would have the effect of preventing the commencement of proceedings. 81To hold that the limitation provision of s 1317K could not be applied by analogy in cases of breaches directors' duties at general law would circumvent its object - since it is difficult to conceive of a case of a contravention of ss 180 to 183 that would not also be a contravention of a director's general law duties - and thus practically deprive s 1317K of effect, since whenever it would operate, it could otherwise always be outflanked by framing the claim as one for breach of the (identical) equitable duties rather than of the statutory duties. Accordingly, I conclude - for the purposes of the first limb of the test articulated above (at the end of [63]) that the equitable claim and the corresponding statutory right are so similar that the time limit applicable to the latter should be applied to the former. 82The question then remains whether, for the purpose of the second limb of that test, it would nevertheless be inequitable to apply the analogous limitation period. The plaintiff argued that it would, as the conduct complained of occurred just before an application for voluntary de-registration of the Plaintiff was lodged with ASIC; until reinstated any right of action would have been vested in ASIC (by operation of Corporations Act, s 601AD); and proceedings were brought promptly at the instance of the liquidator after reinstatement. 83It is necessary to recall, in addressing this argument, that in the present context one is not directly applying the statute of limitation; rather, it serves as an analogy to inform equity's application of the doctrine of laches in the exclusive jurisdiction [KM v HM (1993) 96 DLR (4th) 289, 330-333 (La Forest J, with whom a majority of the Court agreed); cited with approval in Williams v Minister, Aboriginal Land Rights Act 1983 and Another (1994) 35 NSWLR 497, 509-510 (Kirby P, with whom Priestley JA agreed)]; this is why the judgment whether, despite the similarity of the causes of action, it would be unjust to enforce the analogy must be made "in light of all the circumstances" [R v McNeil, 100; Spry, Equitable Remedies (5th Edition), 419-420; The Duke Group Ltd (in liq) v Alamain Investments, [114]; Barker v Duke Group, [84]]. Because the principles being applied are those of laches, considerations such as the plaintiff's knowledge of its rights, and its ability (or incapacity) to enforce them, remain relevant (though, apart for fraudulent concealment, they would not be relevant to a legal limitation period), as appears from the abovementioned passage from Brunyate [cited by La Forest J in KM v HM, 333] and from the observations referred to above of Doyle CJ [Duke Group, [135]-[138]], to the effect that a relevant consideration was when the liquidator first became aware of the facts giving rise to the claim, as in exercising the court's discretion to apply a statutory time limit by analogy, a court of equity takes account of the plaintiff's knowledge of the plaintiff's rights. 84The strength of the plaintiff's case in this respect is that the wrongdoers remained in control of the company from the time when the cause of action arose (in or before February 2005) until they procured it to be (wrongly) deregistered (in June 2005) by a false declaration that it had no liabilities - albeit that I am unconvinced that it was knowingly false. While deregistered, the plaintiff was for all practical purposes incapable of bringing proceedings to enforce its equitable rights, and it was only upon reinstatement (which was initially, though not ultimately, opposed by the defendants) and the consequent appointment of a liquidator (which was also opposed), in November 2010, that enforcement of those rights became possible. These proceedings are taken to have been instituted in December 2011. There is no evidence of prejudice to the second, third and fourth defendants from any delay. 85The essential elements of laches include knowledge of the facts and the rights to justify the commencement of proceedings [Crawley v Short [2009] NSWCA 410, [163]; Savage v Lunn [1998] NSWCA 203]. Here, the plaintiff is - correctly - not the liquidator, but the company in liquidation. It is not just the liquidator's knowledge and ability to act, but that of the company prior to liquidation, that is relevant. As the present proceedings, though brought by the company in liquidation, are in substance in the interests of the Greenaways as its creditors - indeed, so far as appears, its only creditors - I consider that their knowledge could be relevant to this inquiry. 86The circumstance that the wrongdoers remained in control of the plaintiff is not of itself decisive, as in many such cases it would be open to the minority to bring a derivative action; however, in respect of Auzhair Supplies, the Greenaways were creditors, not shareholders, and while they might have had standing to bring an application to set aside a disposition that defeated creditors, they would not have had standing to complain of a breach of directors' duties. 87Nor is the fact of deregistration conclusive, it being open to a person aggrieved to bring an application for reinstatement, as ultimately occurred in this case. I accept that, in considering the whole of the facts and circumstances of the case, it is relevant to consider whether proceedings for reinstatement and winding-up - which were necessary preconditions to the present claims - could and should have been brought earlier. This is because, had the commencement of such proceedings been shown to be warranted earlier, the argument that it would not be inequitable to apply the analogous limitation period would be strengthened. 88It is clear that the trigger for the reinstatement and winding-up proceedings was the non-repayment to the Greenaways of their loan, which under the 1 July 2004 agreement was repayable on 1 July 2007, although interest in respect of it continued to be paid until 2009. As I have concluded above, the Greenaways agreed to the transaction that is now said to constitute a breach of the directors' duties - the effect of the evidence before me being that the directors and the Greenaways agreed to the establishment of Auzhair 1, in which they were to have a stake, and the transfer to it of the assets and undertaking of Auzhair Supplies. However, that does not amount to knowledge of their rights for the purposes of the law of laches: the Greenaways themselves had no right to commence proceedings against the directors. Even if it might be said that the Greenaways knew the facts that are now said to amount to a breach of the directors' duties from their occurrence, they did not know - and did not have the means to know - that they had rights to complain of any such breach, because they themselves had no such rights. They could not reasonably have been expected to commence antecedent proceedings for reinstatement and winding-up until they learned that the company had been deregistered and had ceased to make payments in respect of their loan. 89Accordingly, while I accept that the knowledge of the Greenaways is a relevant consideration, they could not themselves have commenced proceedings against the directors for breach of duty, and I do not accept that it has been shown that they had the requisite knowledge to warrant the commencement of the antecedent proceedings for reinstatement and winding-up before interest payments ceased in September 2009. There was, as a matter of practical reality, no means by which the company could bring proceedings against the directors until those steps had occurred. It would not do so while it remained under the control of the wrongdoers. It could not do so while deregistered. Thus the control and acts of the wrongdoers rendered it practically impossible for the company to enforce its equitable claim against them, until it was reinstated. 90In those circumstances, despite the close analogy with the statutory cause of action, I conclude that it would be inequitable to apply the analogous limitation period. That is because while that limitation period prima facie informs the application of the doctrine of laches, equity would not bar the proceedings on account of laches where the plaintiff was not able to enforce its rights, as from the time when the cause of action arose until the company was reinstated and a liquidator appointed, it was rendered unable to do so - initially because it remained under the control of the wrongdoers, and subsequently because it had been wrongly deregistered at their instance - and the present proceedings were instituted in December 2011, promptly after those conditions came to an end. That is all the more so in the absence of evidence of prejudice to the defendants from any delay. 91For those reasons, in my judgment the plaintiff's claim against the second, third and fourth is not barred by statute - directly or by analogy - or by laches. Conclusion 92Auzhair 1 holds its assets and undertaking upon trust for Auzhair Supplies, and is liable to account to Auzhair Supplies for such assets and undertaking. 93The plaintiff's cause of action against the second, third and fourth defendants was not one in respect of a fraudulent breach of trust, such as to fall within the longer limitation period allowed by (NSW) Limitation Act 1969, s 47(1)(a). 94There is no sufficient nexus between the deregistration and reinstatement of the company Auzhair Supplies and a cause of action against its directors that an order that time not run in respect of a cause of action against the directors while the company was deregistered could be supported as ancillary to its reinstatement under (Cth) Corporations Act 2001, s 601AH(3). 95Auzhair Supplies' claim against the second, third and fourth defendants was not one in respect of a breach of trust at all. Pursuant to Limitation Act, s 23, a statutory limitation period applies to this cause of action, if at all, only by analogy. 96Auzhair Supplies' equitable claim against the directors, and the corresponding statutory causes of action under Corporations Act, ss 180 to 183, are so similar that prima facie the time limit applicable to the latter should be applied to the former. However, it would be inequitable to apply the analogous limitation period, because while it prima facie informs the application of the doctrine of laches, equity would not bar the proceedings on that account where the plaintiff was not aware of or able to enforce its rights, as from the time when the cause of action arose until the company was reinstated and a liquidator appointed, either the defendants remained in control of the plaintiff, or it had been deregistered at their instance, and the present proceedings were instituted in December 2011, promptly after those conditions came to an end. That is all the more so in the absence of evidence of prejudice to the defendants from any delay. 97Accordingly, Auzhair Supplies' claim against the second, third and fourth defendants is not barred by statute - directly or by analogy - or by laches. The directors are liable in equity to compensate Auzhair Supplies for the loss it has suffered by reason of their breach of duty, being the amount that Auzhair Supplies is unable to recover from Auzhair 1, against which it has a proprietary remedy. 98In principle, the appropriate relief is: (1)A declaration that Auzhair 1 holds its assets and undertaking upon trust for Auzhair Supplies; (2)An order that Auzhair 1 account to Auzhair Supplies for such assets and undertaking; (3)An inquiry into the amount by which the value of the assets and undertaking of Auzhair Supplies when transferred by Auzhair Supplies to Auzhair 1 exceeded the present value of the assets and undertaking of Auzhair 1 referred to in order 2; (4)Judgment that the directors pay Auzhair Supplies the amount so certified; (5)An order that the defendants pay the plaintiff's costs. 99However, the evidence identified only the proceeds of the advance of $400,000 by the Greenaways as having been transferred to Auzhair 1. In those circumstances, as a matter of practicality it seems to me that it might be possible to give effect to my conclusions without further inquiry and expense by giving judgment jointly and severally against all defendants for $400,000 and interest. To the extent that the judgment is satisfied by Auzhair 1, that would diminish the exposure of the directors. However, this is a matter which the parties should be afforded an opportunity to address, as further evidence on the inquiry might establish that the value of what was transferred was more, or less, than $400,000. 100I direct that the plaintiff bring in short minutes to give effect to this judgment. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 January 2013