Supreme Court New South Wales Medium Neutral Citation: In the matter of Ledir Enterprises Pty Limited [2013] NSWSC 1332 Hearing dates: 11-14 June, 18-21 June, 23, 26 July 2013 Decision date: 17 September 2013 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Judgment that breaches of specified statutory directors' duties established and oppression established. Questions of relief to be determined after delivery of judgment. Catchwords: CORPORATIONS - share capital - shares - whether voting rights attached to relevant shares - whether valid votes were cast for removal of plaintiff as director - whether conversion of specified convertible preference shares occurred - whether representational or conventional estoppel prevents denial that shares were converted. CORPORATIONS - management and administration - duties and liabilities of officers of corporation - directors' duties - claim for breach of fiduciary duties and breach of directors' duties at general law - whether defendants as directors of second plaintiff owe a duty to the holding company of the second plaintiff. CORPORATIONS - management and administration - duties and liabilities of officers of corporation - claim for breach of ss 180(1) and 181(1) Corporations Act 2001 (Cth) - duty to act in good faith in the company's best interests - claim that payments were unauthorised - whether payments should be characterised as distributions or as loans - where in the context of a family group and family trust - whether resolution of directors occurred authorising payments - whether meeting of minds of directors occurred as to matters necessary to give rise to informal authorisation of payments - where alternate claim for unjust enrichment established - whether a demand for repayment had been made. CORPORATIONS - management and administration - duties and liabilities of officers of corporation - oppression - whether the affairs of the company were being conducted in a way contrary to the interests of the members as a whole - whether the first plaintiff was excluded from the management of the group - whether there was an expectation of participation in management - whether the first plaintiff was deprived of information - whether the court should exercise its discretion to deny relief to the first plaintiff on the basis that her conduct brought about the behaviour relied upon as oppression. CORPORATIONS - winding up - application for winding up on just and equitable ground - whether the companies can effectively function where personal relationships have broken down. EQUITY - general principles - equitable fraud - claim that defendants acted together to obtain control of companies and for other ends in equitable fraud against the first plaintiff - whether abuse and fraud on power of attorney - whether alleged scheme was an imposition or deceit and voidable on grounds of public policy. Legislation Cited: - Companies (NSW) Code s 320 - Corporations Act 2001 (Cth) ss 53, 53(a), 53(c), 53(f), 53(g), 180, 180(1), 181, 181(1), 187, 201M, 232, 232(d), 232(e), 233, 233(1)(a), 233(1)(d), 237, 247A, 249D, 260, 461(1)(k), 1274, 1322 - Corporations Law s 260 - Corporate Law Economic Reform Program Act 1999 (Cth) - Evidence Act 1995 (Cth) - Family Provision Act 1982 (NSW) - Income Tax Assessment Act 1997 (Cth) Div 7A - Powers of Attorney Act 2003 (NSW) s 11(1), Pt 4 Div 2 - Uniform Civil Procedure Rules 2005 (NSW) r 14.26 Cases Cited: - Angas Law Services Pty Ltd (in liq) v Carabelas [2005] HCA 23; (2005) 226 CLR 507; (2005) 53 ACSR 208 - Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; (2009) 75 ACSR 1 - Australian Securities and Investments Commission v Vines [2007] NSWCA 75; (2007) 73 NSWLR 451; (2007) 62 ACSR 1 - Banque Commerciale SA v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 - Barnes v Addy (1874) LR 9 Ch App 244 - Beck v LW Furniture Consolidated (Aust) Pty Ltd [2011] NSWSC 235 - Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239; (2008) 39 WAR 1; (2008) 70 ACSR 1 - Birch v Cropper (1889) 14 App Cas 525 - Briginshaw v Bringinshaw (1938) 60 CLR 336 - Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667 - Cambridge Electronics v McMaster [2005] NSWSC 198 - Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359 - Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 - Chew v R (1991) 4 WAR 21; (1991) 5 ACSR 473 - Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 - Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 - Commonwealth Bank of Australia v Hamilton [2012] NSWSC 242 - CSG Ltd v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335 - Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 - David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 - Dynasty Pty Ltd v Coombs (1995) 59 FCR 122; (1995) 138 ALR 64 - Earl of Chesterfield v Janssen (1751) 2 Ves Sen 125; (1751) 28 ER 82 - Ebrahimi v Westbourne Galleries Ltd [1973] AC 360; [1973] 2 All ER 492 - Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1998) 28 ACSR 688 - Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 - Galea v Bagtrans Pty Ltd [2010] NSWCA 350 - Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 - Grant v John Grant & Sons Pty Ltd (1950) 82 CLR 1 - Gray v Gray [2004] NSWCA 408 - Harding Investments Pty Ltd v PMP Shareholdings Pty Ltd (No 2) [2011] FCA 567; (2011) 282 ALR 229 - Heydon v Perpetual Executors Trustees and Agency Co (WA) Ltd [1930] HCA 26; (1930) 45 CLR 111 - IceTV Pty Ltd v Ross & Ors [2008] NSWSC 1321 - Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206; (2008) 73 NSWLR 653 - John J Starr (Real Estate) Pty Ltd v Robert R Andrew (A'Asia) Pty Ltd (1991) 6 ACSR 63 - Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467 - Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 - Krecichwost v R [2012] NSWCCA 101; (2012) 88 ACSR 339 - Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 - Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; (2006) 59 ACSR 444 - Liosatos v Kefalinian Brotherhood "O Kefalos" of NSW [2000] NSWSC 1138 - Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 - Macleod v R [2003] HCA 24; (2003) 214 CLR 230 - McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 - McGrath & Anor (in their capacity as liquidators of HIH Insurance Ltd) [2010] NSWSC 404; (2010) 78 ACSR 405 - McWilliam v LJR McWilliam Estates Pty Ltd (1990) 20 NSWLR 703; (1990) 2 ACSR 757 - Mancini v Mancini [1999] NSWSC 799 - Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2001] NSWSC 448; (2001) 38 ACSR 404 - Mills v Mills (1938) 60 CLR 150 - Mopeke Pty Ltd v Airport Fine Foods [2007] NSWSC 153; (2007) 61 ACSR 395 - Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 - Nasser v Innovative Precast Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 - New South Wales Rugby League Ltd v Wayde (1985) 1 NSWLR 86 - NM Superannuation Pty Ltd v Hughes (1992) 27 NSWLR 26; (1992) 7 ACSR 105 - Ogilvie v Adams [1981] VR 1041 - O'Neill v Phillips [1999] 2 All ER 961 - Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 - Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187; (1994) 14 ACSR 109 - Poliwka v Heven Holdings Pty Ltd (1992) 7 ACSR 85 - Re A Company (No 00709 of 1992) [1997] 2 BCLC 739 - Re Back 2 Bay 6 Pty Ltd (1994) 12 ACSR 614 - Re Colorbus Pty Ltd [2004] VSC 486; (2004) 51 ACSR 677 - Re Dernacourt Investments Pty Ltd (1990) 20 NSWLR 588; (1990) 2 ACSR 553 - Re DG Brims & Sons Pty Ltd [1995] QSC 53; (1995) 16 ACSR 559 - Re Driffield Gas Light Company [1898] 1 Ch 451 - Re HIH Insurance Ltd and HIH Casualty and General Insurance Ltd; Australian Securities and Investments Commission v Adler [2002] NSWSC 171; (2002) 41 ACSR 72 - Re Hollen Australia Pty Ltd [2009] VSC 95 - Re London School of Electronics Ltd [1985] 3 WLR 474 - Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535 - Re Norvabron Pty Ltd (No 2) (1986) 11 ACLR 279 - Re Sullivans Cove IXL Nominees Pty Ltd [2011] TASSC 9; (2011) 82 ACSR 224 - Roden v International Gas Applications (1995) 125 FLR 396; (1995) 18 ACSR 454 - Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 - Royal Bank of Canada v The King [1913] AC 283 - Schmierer v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 - Sheahan v Londish [2010] NSWCA 270, (2010) 80 ACSR 377 - Showa Shoji Australia Pty Ltd v Oceanic Life Ltd (1994) 34 NSWLR 548 - Shum Yip Properties Development Ltd v Chatswood Investment and Development Co Pty Ltd [2002] NSWSC 13; (2002) 166 FLR 451; (2002) 40 ACSR 619 - Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2010] NSWSC 776 - Swiss Screens (Australia) Pty Ltd v Burgess (1987) 11 ACLR 756 - Temples Wholesale Flower Supplies Pty Ltd v Commissioner of Taxation (1991) 29 FCR 93 - Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610 - Toll (FGCT) v Alphapharm [2004] HCA 52; (2004) 219 CLR 165 - Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 - Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104, (2011) 84 ACSR 121 - Turnbull & Ors v NRMA [2004] NSWSC 577; (2004) 50 ACSR 44 - Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428; (2009) 74 ACSR 282 - Walker v Wimborne (1976) 1 CLR 1 - Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 - Waterman v Gerling Australia Insurance Company Pty Ltd & Anor [2005] NSWSC 1066; (2005) 65 NSWLR 300 - Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459 - Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604 - Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 89 ACSR 1 - Wilson HTM Investment Group Ltd v Pagliaro [2012] NSWSC 1068 - Winlyn Developments Pty Limited [2011] NSWSC 1218; (2011) 86 ACSR 197 Texts Cited: - Austin Ford & Ramsay, Company Directors: Principles of Law and Corporate Governance, 2005 - Mason, Carter and Tolhurst, Mason & Carter's Restitution Law in Australia, 2nd ed Category: Principal judgment Parties: Rosemary Ellen Aboud (First Plaintiff) Ledir Investments Pty Limited (Second Plaintiff) Ledir Enterprises Pty Limited (First Defendant) David Louis Aboud (Second Defendant) Ian Samuel Aboud (Third Defendant) Ethel Aboud (Fourth Defendant) Mandala Pty Ltd (Fifth Defendant) Representation: Counsel: R. Brender, G.A. Elliott (First and Second Plaintiff) A.R. Zahra (First and Second Defendant) A. Fernon (Third and Fifth Defendants) Solicitors: Michael Michell & Associates (First and Second Plaintiffs) DLA Piper Australia (First and Second Defendant) Slater & Gordon (Third and Fifth Defendants) File Number(s): 10/123392 Judgment Parties and other relevant entities 1These proceedings were commenced by Originating Process filed on 18 May 2010. The Fifth Amended Statement of Claim ("5FAS") was filed, by leave, on 14 June 2013. In the course of the hearing, and on the parties' request, I ordered that all questions of the Plaintiffs' entitlement to relief be determined prior to the determination of what relief was appropriate on terms that all evidence, including all cross-examination, on both matters was to be led - with the exception of valuation evidence as to a particular property - at the hearing and not be the subject of a separate hearing. 2The First Plaintiff is Ms Rosemary Aboud (to whom I will refer, without disrespect, as "Rosemary"), who is the daughter of the late Louis Aboud (to whom I will refer, without disrespect, as "Louis") and Mrs Ethel Aboud and the sister of Mr David Aboud and Mr Ian Aboud. The Second Plaintiff is Ledir Investments Pty Limited ("Investments"), in whose name Rosemary brings derivative claims pursuant to leave previously granted under s 237 of the Corporations Act 2001 (Cth). The First Defendant is Ledir Enterprises Pty Limited ("Enterprises"). The Second and Third Defendants are Mr David Aboud (to whom I will refer, without disrespect, as "David") and Mr Ian Aboud (to whom I will refer, without disrespect, as "Ian") who are Rosemary's brothers. The Fourth Defendant is Mrs Ethel Aboud (to whom I will refer, without disrespect, as "Ethel") who is Louis' wife and David's, Ian's and Rosemary's mother. She is presently under a guardianship order made on 29 January 2010 and has filed a submitting appearance in the proceedings. The Fifth Defendant, Mandala Pty Limited ("Mandala"), is a company of which Ian is the sole shareholder and director. 3The name "Ledir" stands for Louis, Ethel, David, Ian and Rosemary (Ian 8.11.2012 [22]). The shares in Investments are held by Enterprises as to 2 ordinary shares and 19 special shares, by Ledir General Insurance Pty Limited as to 10 redeemable preference shares and by a third party as to one special share. There is no evidence as to whether that third party holds that share beneficially or as nominee and, if so, for whom. Five A class and five B class shares in Enterprises are held by Ethel; forty-one B class shares in Enterprises are held by Comserv (No 1650) Pty Limited ("Comserv") (which is not party to the proceedings) as the trustee of the Ledir Trust, which is a discretionary trust settled pursuant to a deed of settlement dated 19 September 1983; forty E class shares in Enterprises are held by David; twenty F class shares held by Rosemary and there are several other classes of shares. A wholly-owned subsidiary of Enterprises, Pluteus (No 81) Pty Limited ("Pluteus") owns a rural property "Adair" on which David and his family lived. Other assets of the Aboud Family were, at relevant times, held in the LA Aboud Family Trust established in New Zealand ("New Zealand trust"). 4Rosemary is the daughter of Louis and Ethel and the sister of David and Ian. She was employed by an entity within the Ledir Group for about a year as manager of a children's newspaper in around 1982 and again as a manager in an affiliate's office in London between 1987 and 1995, while Louis and Ethel lived in London (David 12.11.12 [27]-[28]). Rosemary was also a director of Investments and Enterprises from December 1986 until her removal as a director in December 2006. She resided for several years with her parents and, after Louis' death, for a period with Ethel. 5David also spent a substantial time working for the family businesses. He was the General Manager of General Publishers, the primary operating entity within the Ledir Group, between 1975 and 1981, was in charge of its New Zealand operations between 1993 and 1997 and was a director of other companies within the Ledir Group from 1973 (David 12.11.12 [8]-[9], [13]-[14], [20]). Until 2003, when he fell out with Louis in circumstances to which I will refer below, he was maintaining the business records of the Ledir Group and dealing with the company's accountants (David 12.11.12 [40]-[41]. On the other hand, Ian ceased to have involvement with the Ledir Group's businesses in about 1973, when he was about 24 years old, as a result of issues in relation to the then divorce between Louis and Ethel, although he was a director of General Publishers, one of the companies within the Ledir Group, for about 18 months commencing in 2001 before resigning (Ian 8.11.2012 [20]). 6As I noted above, Comserv is not party to the proceedings. David submits that the Court may not make findings in respect of Comserv where it has not been joined as party to the proceedings. It does not seem to me that that is a correct analysis of the position; rather, any findings made in respect of Comserv do not bind it, where it has not been joined as party, and the Court should not grant relief against it (which is not sought) where it has not had an opportunity to be heard. It is, of course, commonplace for the Court to make findings as to events involving third parties, notwithstanding that they are not joined as party to the proceedings, although it will exercise caution in doing so where they have not had an opportunity to be heard. Preliminary matter and witnesses 7I should first address several preliminary matters. As will emerge below, Rosemary's pleading was complex and, in some respects, convoluted, with some allegations (for example, breach of directors' duties) pleaded in very wide terms; others (for example, oppression) cross-referenced to numerous paragraphs appearing elsewhere in the pleading; and factual allegations combined in different combinations to give rise to multiple alternative pleadings. The structure of Rosemary's case has given rise to some difficulty in structuring this judgment, since, for example, many of the matters relevant to dealing with the allegations of breach of directors' duties are also relevant to the allegations of oppression and of a fraudulent scheme liable to be set aside in equity. I have generally sought to cross-refer in this judgment to earlier findings in respect of later allegations to which they are relevant, but my findings and analysis in respect of each issue should generally be treated as relevant to each other issue. 8Second, the parties provided detailed written submissions that addressed a wide range of factual matters, including some issues that ultimately did not need to be determined in order to decide the proceedings, and many factual disputes that were, at best, subsidiary or collateral to other factual disputes. I have had close regard to those submissions and to the parties' oral submissions, although I have sought to record my findings as to the matters that are significant for the determination of the issues in dispute in this judgment. Notwithstanding the length and detail of the parties' submissions, there was limited reference in them and in oral submissions to the relevant case law, and it has therefore been necessary for me to refer to cases that were not addressed in the parties' submissions. I could see no practical alternative to that course where it would not otherwise have been possible to identify the relevant legal principles in order to decide the case. 9Third, I consider that the proper course is for me to determine these proceedings on the basis of the pleaded case, where Rosemary has not sought to amend the pleadings (beyond an amendment made early in the hearing) so as to raise several matter put in submissions. The role of pleadings is, of course, to define the issues in the proceedings and, importantly, to ensure the basic requirements of procedural fairness, namely that a party should have the opportunity to meet an identified case against him or her: Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664; Banque Commerciale SA v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279 at 286, 296, 302-303. In Ingot Capital Investments Pty Limited v Macquarie Equity Capital Markets Limited [2008] NSWCA 206; (2008) 73 NSWLR 653, Ipp JA reviewed the case law and summarised the relevant principles as including (at [424]) that the rule that, in general, relief is confined to that available on the pleadings secures a party's right to a basic requirement of procedural fairness; and, apart from cases where the parties choose to disregard the pleadings and to fight the case on additional issues chosen at the trial, the relief that may be granted to a party must be founded on the pleadings. His Honour also noted that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground an inference that the parties have chosen a different basis to the pleaded issues for the determination of their respective rights and liabilities, and acquiescence giving rise to a departure from the pleadings may arise from a failure to object to evidence that raises fresh issues. Nonetheless, his Honour noted: "While cases are to be decided upon a basis that embraces the "real controversy" between the parties, the real controversy has to be determined in accordance with the principles stated." 10The Defendants did not acquiesce in this case to a determination of the case other than on the pleadings, and made clear both in opening submissions (T66-67, 412) and in closing that they were defending the pleaded case. I do not consider that approach was unreasonable, where allegations of conduct amounting to contraventions of provisions in the Corporations Act subject to civil penalty provisions and equitable fraud was alleged against them. In my view, any attempt to decide the range of unpleaded matters raised, particularly in Rosemary's submissions, would not afford procedural fairness to the Defendants and would also not be consistent with the just resolution of the matters in dispute, where Rosemary's pleaded case was already very complex. 11Although Rosemary was a key participant in the relevant events, she did not give evidence, although she was present in Court throughout the hearing (T335). Ian and David submit that I should drawn an inference that her evidence would not have assisted her case in accordance with the principle in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298. That principle applies where a party is "required to explain or contradict" a matter and its basis is "plain commonsense": Jones v Dunkel per Windeyer J at 320-322. In Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 at [63], Heydon, Crennan and Bell JJ observed in their joint judgment that: "The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party's case." That principle does not compel the drawing of such an inference: Galea v Bagtrans Pty Ltd [2010] NSWCA 350 at [2]; CSG Ltd v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335 at [82]; Commonwealth Bank of Australia v Hamilton [2012] NSWSC 242 at [204]. In my view, Rosemary's failure to give evidence in support of her case gives rise to an inference that her evidence would not have assisted her in respect of several significant matters in contest, and that inference is of some importance in the findings that I reach below. 12David and Ian each gave evidence and were cross-examined at length. Each plainly felt strongly about the events in issue and their evidence was at least to some extent coloured by that matter. Rosemary submits that I should make adverse credit findings, particularly in respect of Ian. There were several unsatisfactory aspects of Ian's dealings with his mother's assets while he held her power of attorney which have been addressed in other proceedings, and Ian accepted in cross-examination in these proceedings that, from March 2007, he used his mother's power of attorney for his own purposes including paying himself money and paying money for the benefit of his wife, his children and legal fees (T326ff, T329). I have not found it necessary to make such credit findings in order to determine the proceedings. The majority of issues turn upon the legal characterisation of events and corporate actions that are not disputed and do not depend on David's and Ian's evidence. 13Rosemary contends that a Jones v Dunkel inference should be drawn in respect of several witnesses. She contends that Mr Fergusson of BDO, a firm of accountants that advised the Ledir Group over the relevant period, was available to give evidence and David may recently have obtained some advice from him in December 2012 (T201). She also contends that David and Ian could have called Mr Motta, who is an accountant with BDO who appears to have been involved with changes to Enterprises' constitution made prior to Louis' death, to which I will refer below. She contends that Messrs Fergusson and Motta were in David's and Ian's "camp" and could have given relevant evidence as to the advice given by BDO, the Ledir Group's accounts, the estoppel case (to which I will refer below) and the arguments justifying Rosemary's removal as a director of Enterprises. I would not draw such an inference, since I do not consider that any evidence which is it suggested they could have given would have been of sufficient relevance to warrant drawing that inference. Factual background - the earlier period 14I should now set out a brief chronology of relevant events. The parties led substantial evidence of the relationship between family members and events surrounding various other proceedings between them. Rosemary alleged that David and Ian had acted inappropriately and unreasonably and David and Ian similarly alleged that Rosemary had acted inappropriately and unreasonably. David and Ian contended that Rosemary procured Ethel to commence proceedings under the Family Provision Act 1982 (NSW) at a time that Ethel's will had been changed in Rosemary's favour and sought to exclude Ian from any benefit from the family's wealth. Rosemary contended that, on an occasion when David and Ian removed corporate records of the Ledir Group from a property previously occupied by Ethel and Rosemary and then occupied by Rosemary, they also removed personal records of Rosemary. Each of David and Ian on the one hand and Rosemary on the other criticise the circumstances in which Rosemary and subsequently Ian obtained powers of attorney from Ethel. I largely admitted evidence dealing with these matters, leaving their ultimate relevance to be determined in this judgment. Some aspects of these disputes seem to me to be tangential to the matters in issue in the proceedings, although it will be necessary to address some of that evidence below. 15Ian, David and Rosemary are the three children of Louis and Ethel. Ian was born in 1948, David in 1951 and Rosemary in 1953. Louis and Ethel lived at various times in England and New Zealand and from 2001 at a property, "Montoro", in Orange, New South Wales. Rosemary lived with her parents for parts of her adult life and, after Louis' death, with Ethel at Montoro until September 2006 when Ethel left to live with Ian in circumstances that I will set out below. 16The Ledir Group acquired a company known as General Publishers in 1974 (David 12.11.12 [16]) and David started work with General Publishers in 1975 (David 12.11.12 [9]). Pluteus, a subsidiary of Enterprises, acquired a property known as "Adair" in 1984, and additional land was subsequently acquired, and David and his family lived and continue to live on that property (David 12.11.12 [12]-[13]). A conflict arose between Louis and David in June 2003, when Louis instructed David to dismiss his cousin as director of General Publishers and David declined to do so, properly, on the basis that a director of a listed company could only be removed by the company in general meeting. Louis then directed that monthly distributions cease to be paid from the Ledir Group to David and directed David to hand over the business records of the Ledir Group to Rosemary (David 12.11.12 [38]-[40]). Rosemary subsequently maintained those business records, with BDO's assistance, from June 2003 until October 2006 (David 12.11.12 [43]). 17Louis obtained advice from BDO concerning proposed changes to the structure of the Ledir Group at various times, including in late 2003 (CB 29-30) (References in this form are to tabs contained in the Court Book). I will refer to that advice and the implementation of such charges in greater detail below. 18Rosemary contends, and I accept, that she, David and Ian all received substantial assistance from the Ledir Group or Louis during his lifetime. Ethel's evidence in earlier proceedings was that all of the children received fair and substantial amounts (CB 66). Louis funded, in part or whole, the purchase of an apartment in London for Rosemary in 1989 (David 12.11.12 [29]). David, Ian and Rosemary each received $1 million from a New Zealand trust established by Louis in the year ended 31 March 2004 (T192). David and Ian also received other payments or help at other times from their father (David 12.11.12 [12]-[13], [22], [59]). 19Louis died in April 2004 (David 12.11.12 [15], Ian 8.11.12 [21]). By his will dated 3 April 2002, admitted to probate in August 2005, Louis appointed Ethel, Rosemary and David as executors and left the whole of his estate to Ethel (CB 23). At the time of Louis' death, Ethel's will provided for her estate be left to Ian and Rosemary in approximately equal shares (David 12.11.12 [48]). Ethel, while living with Rosemary at Montoro, subsequently changed her will so that Rosemary would become the sole beneficiary of Ethel's estate (David 12.11.12 [46]-[48]) and also gave a power of attorney to Rosemary (CB 35, 35a). 20In October 2005 Ethel commenced proceedings under the Family Provision Act ("FPA proceedings") in respect of, inter alia, assets of the New Zealand trust that would otherwise have been available to other family members who are beneficiaries of that trust (CB 49). These proceedings clearly contributed to a deterioration, or further deterioration, in the relationship between Rosemary on the one hand and Ian and David on the other and generated a significant amount of intemperate correspondence, both from Rosemary and from Ian. David gave evidence of matters relating to the conduct of the FPA proceedings (David 12.11.12 [52.1]-[52.6]) which was admitted as evidence of his understanding and subject to relevance. 21There was a dispute between the parties as to whether Ethel or Rosemary was the primary driver of the FPA proceedings. David submits that the obvious intent of, or at least the result sought from, the FPA proceedings was that any additional assets acquired by means of those proceedings were likely to benefit Rosemary, so long as Rosemary was the sole beneficiary of Ethel's will. There is uncontested evidence that Rosemary advised David, after the commencement of the FPA proceedings, that they were intended to achieve "Zip for Ian, not one cent" (David 12.11.12 [50]). I understand that reference to indicate that those proceedings were intended to achieve the result that Ian would at least not receive any benefit from the New Zealand trust. 22Mr Zahra, who appeared for David, undertook a detailed review in oral submissions of documents held in the file maintained by Ethel's solicitors in respect of the FPA proceedings which had subsequently been made available to Ian as Ethel's representative (CB 256). I do not consider it is necessary to review all the documents contained in this file to which the parties directed attention in submissions, with David typically contending that the relevant documents disclosed aggression on the part of Rosemary and Rosemary contending that they disclosed a reasonable approach to the FPA proceedings. I am satisfied that a number of file notes which refer to communications with "Aboud" record communications with Rosemary, a matter which emerges from the content of the communications, and it is clear that Rosemary was the primary source of instructions to Ethel's solicitors in those proceedings. The extent of Rosemary's involvement in these matters has some significance, not only because of Rosemary's reluctance, at least initially, to acknowledge it in submissions in these proceedings, but because it indicates that the solicitor who received a settlement proposal put by David and Ian (to which I will refer below) was, if not acting for Rosemary, nonetheless communicating regularly with her and receiving instructions from her. The communication of that proposal to that solicitor would therefore have brought it to Rosemary's attention. 23The communications between Rosemary and the solicitor who later acted for Ethel in the FPA proceedings commenced in August 2004, more than a year before the FPA proceedings were commenced in Ethel's name (CB 256, p 1592). Consideration appears to have been given, in correspondence addressed both to Ethel and Rosemary, to a possible challenge to amendments made in 2002 to the articles of association of Enterprises (CB 256, p 1598) (to which I will refer below) although it appears the FPA proceedings were ultimately primarily directed to the position in respect of the New Zealand trust. In a conversation on 14 February 2005, Rosemary sought advice from that solicitor as to whether the (Australian) Ledir Trust "can be broken" and expressed the view that she did not wish to have David's wife to have "rights over Ethel" and was concerned about the trusts and companies if Ian was divorced (CB 256, p 1607). Rosemary subsequently took an active role in the conduct of the FPA proceedings, although she had filed a submitting appearance in them, including attending conferences with Ethel's legal representatives together with Ethel and giving instructions to Ethel's solicitors as to the basis on which "we" (which, in his context, could only refer to Rosemary and Ethel) would be prepared to settle the FPA proceedings (CB 96). 24The fact that most communications with the solicitor acting in the FPA proceedings involved Rosemary meant that Ethel would have been dependent, at least to some extent, on information communicated by Rosemary for her understanding of those proceedings, although I have not neglected that there were other communications by the solicitor directly to and with Ethel. Rosemary has, of course, not given evidence of the extent of any such communication of information by her to Ethel. In these circumstances, the Court should be less ready to infer that the distress that Ethel later expressed as to the conduct of the FPA proceedings (CB 99) was not genuine or, as was implicit in Rosemary's case, was a position forced upon Ethel by Ian. These matters provide context for Ethel's subsequent role in Rosemary's removal as a director of companies within the Ledir Group, to which I will refer below. 25On about 18 September 2006, Ian met with Ethel and Rosemary at Montoro. There is uncontradicted evidence that, at that meeting, Rosemary called Ethel "a liar"; Ian offered Ethel the opportunity to live with him and Rosemary told Ethel "I'll pack your bags and you can get out of the house" and then packed a bag for Ethel containing her clothing and told Ethel to "get out of the house, get out"; and Ethel then left Montoro and lived with Ian until 2009 when she moved to an aged care facility (Ian 8.11.12 [46]-[51]). 26Shortly after Ethel left Montoro, she terminated the retainer of the solicitors acting for her in the FPA proceedings (CB 99), then sought to instruct David's solicitors to discontinue the proceedings (CB 101) and subsequently instructed other solicitors who attended to terminating the proceedings. By deed dated 28 September 2006, Ethel revoked the power of attorney that she had previously given to Rosemary (CB 105). By a handwritten note also dated September 2006, Ethel also authorised Ian to remove financial records and personal effects from Montoro (CB 108). David and Ian then entered Montoro, when Rosemary was absent, and removed company records and also personal records of Rosemary, which were (at least in substantial part) subsequently returned to her (David 12.11.12 [45], Ian 8.11.12 [69]-[71]). On 4 October 2006, Ethel signed a handwritten authority authorising the sale of Montoro (CB 107). 27Also shortly after Ethel had left Montoro, David opened a new bank account in the name of Investments at a different bank, with the address of that account recorded as care of David at Adair. An amount of $1.65 million received on the sale of General Publishers was deposited in that account (CB 98). David did not then tell Rosemary about opening the new account or about his causing that amount to be deposited into that account and then being transferred to another account (T178). David accepted in cross-examination that these steps gave him complete control over $1.65 million of Investment's money without having to tell Rosemary (T178) and that Rosemary did not know about the existence of that account (T179). 28On 24 October 2006, Ethel made a new will in favour of her grandchildren, Ian's and David's children (CB 111) and, in late October 2006, she gave a power of attorney to Ian (CB 112). The FPA proceedings were dismissed by consent on 26 October 2006 (CB 114, 167). On 29 November 2006, Ethel appointed Ian as her enduring guardian (CB 121). Mr Brender, who appears for Rosemary, made clear in his opening that Rosemary did not seek to establish that Ethel lacked capacity when she gave Ian the power of attorney and took other associated actions in September and October 2006 (T27), although her later submissions were not wholly consistent with that position. 29Rosemary commenced proceedings in the Guardianship Tribunal in respect of her mother's affairs on 4 October 2006 (CB 109) which were unsuccessful, then brought proceedings in the Supreme Court Protective List which were also unsuccessful, largely because they sought to relitigate issues that had already been determined in the earlier Tribunal proceedings. Ethel by her tutor Ian brought proceedings against Rosemary in the Supreme Court for possession of Montoro, in the Local Court for recovery of a debt and in the District Court for recovery of furniture. In later proceedings in the Guardianship Tribunal proceedings, the Tribunal revoked the power of attorney that Ethel had granted to Ian and made a guardianship and financial management order, appointing the New South Wales Trustee in that capacity. 30In November 2006, David's solicitors wrote to the solicitors acting for the trustee of the New Zealand trust stating that David and Ethel now sought to distribute the assets of that trust to appropriate beneficiaries (CB 116). On 14 December 2006, David and Ethel signed an authority for the trustee of the New Zealand trust to distribute in the income and capital of that trust (of about $NZ2.5 million) to Ian (CB 136, T182.27). That distribution was delayed for a substantial period since the trustee did not implement it over Rosemary's objection, and the distribution was ultimately made to several beneficiaries of the trust, including Rosemary, rather than only to Ian. 31Ian's evidence is that, in late 2006, he and David decided to remove Rosemary as a director of the companies within the Ledir Group (Ian 8.11.12 [59]). David's evidence is that, in December 2006, he formed the belief that it was necessary to wind up the Ledir Group and distribute its assets between Ian, Rosemary and himself, to avoid wasted administration costs, loss on its share portfolio and because the company was no longer trading (David 12.11.12 [60]). The process that was subsequently implemented did not include any substantial distribution of assets to Rosemary as was contemplated by that approach. 32On 4 December 2006, David made a payment of $360,000 to himself from Investments (5FAS [40]-[43]). It appears that that amount reflected the amount of distributions that had not been paid to David since Louis' decision to end such distributions to him in April 2002, as a result of the difference of opinion to which I referred above. David accepted in cross-examination that that payment was made without discussion with Rosemary (T180) and that he did not wait until Rosemary ceased to be a director of Enterprises in late December 2006 (in circumstances to which I will refer below) before making that payment (T182). 33On 6 December 2006, notices of general meetings of Enterprises, Investments and other companies in the Ledir Group was sent to Rosemary and other shareholders indicating that it was proposed that Rosemary be removed as a director of the relevant companies (CB 126 - 130). By letter dated 18 December 2006, the solicitors acting for Rosemary objected to the proposed meetings (CB 138). On 22 December 2006, Ian was purportedly appointed a director of Enterprises by written resolution of its sole voting member, Ethel, pursuant to the power of attorney granted to him. Rosemary challenges the validity of that appointment on the basis that Ethel did not have voting rights (and, implicitly, no shareholder in Enterprises had such voting rights). Rosemary also contends that the use of the power of attorney amounted to equitable fraud. I will address those contentions below. 34At a general meeting of the members of Enterprises held on 29 December 2006, Rosemary was removed as a director of Enterprises (David 12.11.12 [64]), CB 141, 146). That meeting was attended by David, by Ian and Ethel by telephone and by Mr Motum, then a partner with Phillips Fox, the firm of solicitors acting for David (Motum 12.11.12 [9]). David's evidence is that Ethel said that she understood the purpose of the meeting (David 12.11.12 [64]). Ian's evidence is that Ethel did not say anything during the meeting other than to confirm that she could hear David (Ian 8.11.12 [66]). Mr Motum's affidavit evidence in these proceedings was that Ethel was present by telephone at this meeting and that he recalled that "each of David, Ian and Ethel assented to each resolution as proposed" (Motum 12.11.12 [9.4]). However, Mr Motum had previously given evidence in other proceedings (Ex P2) that Ethel did not say anything in opposition to either resolution, and did not mention that she said anything else other than that she could hear David. Mr Motum acknowledged in cross-examination that his evidence in these proceedings may be incorrect (T123). I prefer Ian's evidence and Mr Motum's earlier evidence to David's and Mr Motum's more recent evidence, and find that Ethel did not orally approve but also did not voice any opposition to the use of the power of attorney to remove Rosemary as a director at that meeting. 35The directors of Enterprises comprising David and Ian then resolved to appoint David as its corporate authorised representative for meetings of several companies within the Ledir Group to consider a resolution that Rosemary be removed as a director of those companies (David 12.11.12 [64], CB 148). David thereafter signed resolutions as corporate authorised representative removing Rosemary as a director of other companies within the Ledir Group, namely Investments, Pluteus and Ledir Estates (David 12.11.12 [64]-[65]), CB 148). 36Ian was purportedly appointed as a director of Investments by written resolution of its directors signed by David on 25 January 2007 and by Ethel (by Ian as her attorney) on 29 January 2007, and was also purportedly appointed a director of Pluteus and Ledir Estates from the same date (David 12.11.12 [65], CB 152, 154). I will refer to a challenge to the validity of Ian's appointment as a director of Investments in paragraph 61 below. 37The position of the Ledir Group was subsequently discussed at a meeting between its accountants, BDO, and David's solicitors on 29 January 2007, which noted that Ethel then had all the voting rights in Enterprises and on her death the voting rights would be shared 2/3 to David and 1/3 to Rosemary; that a resolution of Enterprises of 1 April 2002 provided that David and Rosemary would receive $9,000 per month each and the excess would be divided 70/30; that Ian was exercising his power of attorney, Rosemary had been removed as a director and David and Ian would now make all board decisions; that Louis had not indicated any desire to distribute any wealth out of Ledir Group to Ian but that David could gift after tax amounts out of his distribution; that the broad approach for the future would be interim dividends to David and Rosemary in the ratio of 2/3, 1/3; and that Adair could be transferred to David in exchange for a promissory note given by David and thereafter the Ledir Group companies could be placed in voluntary liquidation (CB 155). The observation in this meeting that Louis had not indicated any desire to distribute any wealth out of Ledir Group to Ian needs to be qualified by the fact that, as I will note below, Louis' intentions changed from time to time and he had indicated such an intention on at least two occasions. Distributions from the Ledir Group to David and Ian were not subsequently made in the proportions contemplated by that meeting, as will emerge below. 38On 21 February 2007, BDO prepared a complex distribution strategy which contemplated that Investments would pay a cash dividend to Enterprises; Enterprises would pay a cash dividend to Comserv as trustee for the Ledir Trust and would also make a loan to the Ledir Trust; the Ledir Trust would make distributions and lend money to selected beneficiaries without indicating who would be selected; Enterprises would later declare a dividend that would be offset against the amounts owing by the Ledir Trust and the Ledir Trust would apply that offset against the loans owing by the beneficiaries; Investments would sell its listed shares and lend some of the proceeds to Enterprises which would in turn lend them to the Ledir Trust which would lend them to selected beneficiaries; Investments would declare a franked dividend in favour of Enterprises and offset it against its loan to Investments; Enterprises would declare a franked dividend and offset it against its loan to the Ledir Trust; the Ledir Trust would make a distribution and offset it against the loan owing by selected beneficiaries; and Adair would be transferred to David at valuation in exchange for a promissory note for the transfer price. The intended effect of this approach was that about $1.216m would be paid to selected beneficiaries of the Ledir Trust as a distribution from the Trust, about $1.56m would be lent to selected beneficiaries, a further $360,623 would be paid as a distribution from the Trust to selected beneficiaries and about $1.420m would be lent to selected beneficiaries and, on completion of liquidation, a final distribution could be made (CB 162). At least part of this approach was later implemented, with substantial distributions and loans being made to David and Ian but not to Rosemary. 39In March 2007, agreement was reached between David and Ian that payments of about $2 million and $2.5 million would be made to Ian and David respectively (Ian 8.11.12 [100]) and, on 28 March 2007, Ian's solicitors advised David's solicitors that David had told Ian that a distribution of $2 million was to be made to Ian from the Ledir Trust (CB 182). By letter dated 5 June 2007, David's solicitors wrote to David calculating the total amount for distribution by franked and unfranked distributions and loans as $3,939,273 and seeking instructions as to the identity of the beneficiaries, and calculating that Rosemary would or could receive either 20/60th ($2,699.910) or 20/70th ($2,314.208.00) on such a distribution (CB 199). That calculation appears to reflect an assumption that such a distribution should be made by reference to Rosemary's entitlements on a winding up of Enterprises, to which I will refer below, rather than any assessment of what could or should be distributed by Comserv as the trustee of a discretionary trust. As I noted above, the distribution was ultimately not made on that basis. 40A payment of $2,439,273 was made to David from the Ledir Trust on 27 June 2007, initially as a loan, which was later extinguished when Comserv made a trust distribution to David of $2,547,273 in 2008, comprising the previous loan amount and monthly distribution for that year totalling $108,000. Payments were made to Ian of $500,000 on or about 7 May 2007 and $1,500,000 on about 27 June 2007, initially as a loan, which were extinguished in the year ended 30 June 2008 when Comserv resolved to make a distribution of $2 million to Ian. I will refer further to these payments below. A further payment of $50,000 was made to Ian or Mandala on 24 September 2008 and $1 million was paid to Ian or Mandala about 23 December 2008. I will also refer further to these payments below. 41On 4 September 2009, David and Ian met as directors of Comserv and ratified distributions made between 27 June 2007 and 23 December 2008, the loan of funds on 27 June 2007 to David in the sum of $2,439,273 interest fee and repayable on demand, and a loan to Ian in the amount of $560,861 also interest free and repayable on demand (CB 341). An issue arose in the course of the hearing as to whether Ian had properly been appointed as a director of Comserv in order to vote on that resolution. I will address that issue and any impact of that ratification below. 42In late 2009, the trustee of the New Zealand trust determined to make a final distribution totalling $2.43 million to be paid one-third to Ethel, one-third to David and one-ninth to each of David, Ian and Rosemary and Ian, David and Ethel (by Ian as her attorney) agreed to that distribution (CB 331, 332, 342). It appears that distribution was subsequently made. Allegation that Rosemary's removal as a director was unlawful 43Rosemary pleads that her removal as a director of Enterprises was 29 December 2006 was "invalid and unlawful" (5FAS [47A]). This allegation is particularised on the basis that Ethel's B class converting preference shares had not been converted to B class shares, no other shares carried any entitlement to vote in Enterprises and no valid votes were cast for Rosemary's removal as a director 44Rosemary contended in submissions that her removal as a director of Enterprises in December 2006 was unlawful because she was removed by the exercise of Ethel's vote as a "B" class shareholder in Enterprises and, she contended (and pleaded in 5FAS [16]) that Ethel had not converted her shares from B convertible preference shares to B class shares and did not have such a vote. This question seems to me to be of little practical significance, so far as Rosemary's removal as a director was concerned, since article 64 of Enterprises' articles of association (CB 2) provided that each director shall retire from office and be eligible for re-election at any ordinary general meeting of Enterprises. Rosemary did not contend that the general meeting of Enterprises held on 29 December 2006 was not an ordinary general meeting for the purposes of that article. I accept David's submission that Rosemary ceased to be a director of Enterprises by operation of that article at that general meeting and the resolution for her removal was not necessary to that result. (I should add that it is not necessary for me to address any possibility that David and Ian also ceased to be directors of Enterprises at that meeting for the same reason, leaving Enterprises without directors since December 2006, since Rosemary did not advance that submission. Even if that were the case, their acts as directors may well be validated by s 201M of the Corporations Act, to which I will refer below, or an application brought under s 1322 of the Corporations Act.) 45I should, however, indicate my findings as to the question of the voting rights attached to Ethel's shares, against the contingency that an appellate court were to take a different view as to the effect of article 64 of Enterprises' articles of association, and because that question is relevant to the validity of the appointment of Ian as a director of Enterprises on 22 December 2006 by written resolution of Ethel, executed by Ian in reliance on the power of attorney that Ethel had granted to him. The articles of association of Enterprises initially set out the rights attaching to B convertible preference shares in subparagraphs (f)(i)-(vi) of article 2(b)(3). Those paragraphs were replaced by an amendment to Enterprises' articles of association made by circulating resolution dated 1 April 2002 (David 12.11.12 [35.3], CB 20), with new provisions which provided, inter alia, that: "the said "B" preference shares shall be entitled to 100% of the voting rights of the company after the death of Louis Alexander Aboud, but the said "B" preference shares shall cease to have voting rights in the company upon the death of Ethel Aboud." 46David and Ian submitted that that circulating resolution either recognised an earlier conversion of Ethel's convertible preference shares to B class shares conferring the specified rights or alternatively implemented that conversion, and rely on the reference in those provisions to the shares as B preference shares rather than convertible preference shares and to correspondence prior to the passage of the resolution (to which I will refer below) which contemplated that the amendment would have that effect. 47The principles applicable to the construction of commercial contracts apply, with qualification, to the construction of a company's constitution. Attention must be given to the language used by the parties and the purpose and object of the transaction and, at least where there is uncertainty or ambiguity in the text of the document, the Court may have regard to the surrounding circumstances known to the parties: Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 350; McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 at 589; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Toll (FGCT) v Alphapharm (2004) 219 CLR 165 at 179; Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604. The same principles are generally applicable in the construction of a company's constitution, albeit that caution is required in their application in that context: Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; (2006) 59 ACSR 444. 48I do not consider that the amendment made in April 2002 can be construed as itself effecting a conversion of the "B" class convertible preference shares. The terms of the resolution expressly replaced subparagraphs (f)(1)(i)-(vi) of article 2b(3) of Enterprises' articles of association, and not the introductory words of that paragraph which dealt with the manner of conversion, and set out new rights attaching to B preference shares, where those rights had previously not been set out in Enterprises' constitution. That amendment does not itself necessitate or imply a conversion of those shares and would operate effectively and in accordance with its terms if read as defining the rights attaching to those shares once converted by a separate act of conversion. A reading of that amendment as itself effecting such a conversion would, as Rosemary points out, be inconsistent with the introductory words of the article which only permitted such conversion after Louis' death. 49David and Ian alternatively submit that the circulating resolution dated 1 April 2002, as signed by Louis, satisfies the requirements of article 2b(3)(e) of Enterprises' articles of association which permitted Louis, during his lifetime, to amend the voting rights attached to the B convertible preference shares by notice in writing to the company. I cannot accept this submission, because the resolution, in its terms, provides for the rights attaching to the B preference shares (which would come into existence on conversion) rather than the rights attaching to the B convertible preference shares. 50David and Ian also rely on a notice of the conversion of the B class shares on 1 April 2002 that was given to ASIC on 30 November 2006 (CB 137). The ASIC records of Enterprises also record Ethel as being a "B" class shareholder (CB 400, pp 2750-2752) and, by reason of s 1274 of the Corporations Act, those documents are prima facie evidence of the matters stated in them: Winlyn Developments Pty Ltd [2011] NSWSC 1218; (2011) 86 ACSR 197 at [37]. However, it seems to me that prima facie evidence is rebutted by the analysis of the effect of the amendments to which I have referred above, subject to the question of estoppel to which I now turn. 51In paragraphs 16A-16B of his Defence to the Fifth Amended Statement of Claim, David pleads an estoppel, contending that Enterprises is estopped from denying that Ethel has converted her B convertible preference shares to B class shares and therefore had voting rights in Enterprises following Louis' death. The pleading extends to a conventional estoppel, by reason that Enterprises and Ethel have acted on an alleged common basis and common assumption that Ethel had converted those shares. Ian advances a corresponding defence in paragraphs 16A-16B of his Defence to the Fifth Amended Statement of Claim. 52The pleading is put, first, as a representational estoppel. I should briefly identify the elements of such an estoppel, although the parties devoted little attention to this matter in submissions. In Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, Brennan J observed that to establish an equitable estoppel the first thing it was necessary for the plaintiff to prove was that (at 428): "... the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship." In Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394, Deane J observed (at 444) that the law does not permit an unconscientious departure by one party: "from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation." In Summer Hill Business Estate Pty Ltd v Equititrust Ltd [2010] NSWSC 776 at [42]ff, Pembroke J identified three key elements of a representational estoppel as being that the defendant's words or conduct must be clear and unambiguous; the defendant's conduct in relying to its detriment on those words or conduct must be reasonable; and the defendant must know or intend that the plaintiff will act or abstain from acting in reliance on those words or that conduct or, in effect, have some reasonable expectation that its words or conduct will induce some detrimental reliance by the plaintiff. 53In the present case, it seems to me that Enterprises made a representation to Ethel that she had converted and was entitled to vote the relevant shares by a letter dated 1 April 2002, signed by Louis, which indicated that its purpose was to inform Ethel that the rights attached to her shares in Enterprises had been varied and that the new rights were, relevantly, that the B preference shares were entitled to exercise all of the voting rights upon Louis' death. The fact that Ethel in fact held that understanding is demonstrated by a letter dated 28 July 2006 (CB 79) from her solicitors in the FPA proceedings (which may or may not have reflected instructions from Rosemary to those solicitors) to David's solicitors advising of her understanding that the conversion of the B preference shares had previously occurred. I would readily infer that Ethel's conduct in not taking further steps to convert her shares so as to allow her to receive the dividends she in fact received from Enterprises and confer voting rights after Louis' death took place on the basis of the advice she had been given by Enterprises that she already had such rights; her conduct in that regard was reasonable in the light of that advice; and Enterprises would have known that, by reason of that advice, Ethel was very likely to assume that her shares had been converted to B class shares on the basis of its advice to that effect and assume that no further conversion was necessary to secure her right to dividends or voting rights in respect of the B class shares. I consider an estoppel is therefore established as between Enterprises and Ethel, which is sufficient to support Ethel's exercise of voting rights at the December 2006 general meeting. 54For completeness, I should add that David also gave evidence of matters which led him to hold an understanding that Ethel's "B" class shares entitled her to vote as a member of Enterprises, and to his having acted on that belief including in connection with the meetings of the companies in December 2006, in his third supplementary affidavit dated 14 June 2013. David was cross-examined as to that evidence, and Rosemary sought to rely on later correspondence in which BDO left open the question whether the B preference shares had been converted at some earlier time. I do not find it necessary to consider what understanding David had as to these matters, which does not seem to me to be relevant to whether an estoppel would prevent Enterprises denying the exercise of the relevant voting rights by Ethel (by her attorney Ian) rather than by David. 55David and Ian also rely on a pleading of conventional estoppel. The elements of a conventional estoppel require that the party asserting that estoppel has adopted an assumption as to the terms of its legal relationship with the party to be estopped; that party has adopted the same assumption; the parties have conducted their relationship on the basis of the mutual assumption; each party knew or intended the other to act on that basis; and the departure from that assumption will occasion detriment to it: Waterman v Gerling Australia Insurance Company Pty Ltd & Anor [2005] NSWSC 1066; (2005) 65 NSWLR 300 at [83]. 56This claim for conventional estoppel is supported, as between Enterprises and Ethel, by the letter dated 1 April 2002 from Enterprises to Ethel to which I have referred above. Correspondence from the Ledir Group's accountants, BDO, to Louis, Ethel, Rosemary and David was to similar effect to that letter. A letter dated 30 April 2001 from BDO to Louis attached amending documents that were described as having the result that Ethel's B preference shares would, after Louis' death, have 100% voting rights (CB 15). A letter dated 19 September 2003 from BDO to Louis records the structure of Enterprises following the changes that were implemented on 1 April 2002, and describes the shares held by Ethel as 5 B preference shares (rather than as convertible preference shares) and also notes that, as part of the changes, the rights attached to the shares in Enterprises were amended so that, if Ethel survives Louis, she was entitled to 100% of the voting rights in Enterprises following his death. A letter dated 24 August 2004 from BDO to Ethel and Rosemary attached a diagram setting out the Ledir Group structure, reflecting information contained in the letter dated 21 November 2003 from BDO to Louis, and recorded the shares held by Ethel as 5 B class preference shares and that, on Louis's death, Ethel was entitled to 100% of the voting shares in Enterprises. By letter dated 18 April 2005, BDO provided information as to the structure of the Ledir Group to the solicitors representing Ethel in the FPA proceedings, and again recorded that Ethel held 5 B class preference shares and that Ethel was entitled 100% of voting rights in Enterprises following Louis' death (CB 36). Ethel also proceeded on the basis that she held 5 B class preference shares, rather than B class convertible preference shares, in her affidavit in the FPA proceedings (CB 66, [5]). 57David also refers to advice given by BDO to him concerning the notification to ASIC of the conversion of the B convertible preference shares into B class preference shares, the notification given to ASIC on 30 November 2006 that Ethel held B preference shares and the preparation of a share register of Enterprises recording Ethel's holding of such shares. A conventional estoppel is also supported by Enterprises' conduct in paying dividends to Ethel pursuant to her rights as a holder of B class preference shares, in excess of the more limited dividends which she could have received as a holder of B class convertible preference shares, including dividends paid pursuant to a resolution passed by Rosemary and David as directors of Enterprises on 30 June 2005. If Ethel's shares had not been converted to B class preference shares, she would only have been entitled to a minimal dividend at a rate of 5% on the capital paid up on the shares of $10 each, rather than the dividend that she actually received for the years ending 30 June 2003 (CB 25) and thereafter. 58I should add that Rosemary also appears to have previously understood, contrary to the position she now advances in these proceedings, both that Ethel had all the voting rights in Enterprises in general meeting and also that Ethel's right to receive a dividend of $5,000 per month from Enterprises arose from her holding B class preference shares in Enterprises. Her solicitors advised the New South Wales Trustee and Guardian of that matter by letter dated 9 March 2012, the relevant paragraphs of which were admitted as admissions against Rosemary's interests in the proceedings. Rosemary also understood, and her solicitors advised the New South Wales Trustee and Guardian by that letter, that Louis had intended to leave, and had in fact left, a situation where Ethel retained a controlling shareholding in Enterprises in her lifetime, and that statement was also admitted as an admission against Rosemary's interests in the proceedings. 59In the present case, at least Ethel and Enterprises (but also Rosemary, David and Ian) had acted on the assumption that Ethel held B class preference shares (or, at least, shares having the rights conferred by the April 2002 amendments) and have conducted their mutual relationship on that basis and knew or intended that the other would act on that basis, and departure from that assumption would occasion detriment at least to Ethel so far as it would deprive her of the rights apparently conferred in April 2002, and to David and Ian so far as they have proceeded on that basis in respect of the meetings held in December 2006. I therefore find that a conventional estoppel is established. 60David and Ian also submit that the effect of article 58 of Table A to the Companies Ordinance 1962 (in respect of Enterprises) and article 88 of Table A to the Companies Ordinance 1936 (in respect of Investments) would prevent any objection now being taken by Rosemary to Ethel's entitlement to vote for the appointment of any director. The former provision provides that: "58. No objection shall be raised to the qualification of any voter except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the chairman of the meeting, whose decision shall be final and conclusive." I do not consider it necessary to determine this further submission, which was not the subject of substantive submissions by any party, where I have held that representational and conventional estoppels would support the exercise of voting rights at that meeting. 61It also does not seem to me that Rosemary was successful in an attack on the exercise of the power of attorney given by Ethel to Ian, to the extent that underpinned the exercise of Ethel's vote at the general meeting of Enterprises on 29 December in support of Rosemary's removal as a director. I noted above that Rosemary had previously obtained a corresponding power of attorney from Ethel and thereby placed herself in a position to use it if she wished to do so. Rosemary accepted in opening that she could not establish that Ethel lacked capacity at the time the power of attorney was granted in favour of Ian; she did not plead that Ian exercised any undue influence or otherwise acted unlawfully in obtaining that power of attorney; she did not establish that the grant of the power of attorney did not in fact reflect Ethel's wishes; and she did not establish that her removal as a director was inconsistent with Ethel's wishes. 62Rosemary also pleads that, since December 2006, she has been wrongfully excluded from the deliberations of persons acting as directors of Enterprises (5FAS [48B]). That allegation is also not established since Rosemary ceased to be a director of Enterprises in December 2006 by reason of article 64 of its articles of association and, alternatively, was validly removed as a director of Enterprises for the reasons noted above. 63Rosemary also pleads that her removal as a director of Investments and other companies and the appointment of Ian as a director of Investments and other companies was "unlawful" (and, implictly, also legally ineffective) (5FAS [48A]). That allegation is particularised by the fact that Rosemary's removal depended on the deliberations of David and Ian, to the exclusion of Rosemary who remained a director of Enterprises, that Rosemary did not receive notice of any such meetings, and would have opposed such decisions had she received notice, when Ethel was not acting or was not capable of acting as a director of Enterprises. This allegation is not established. First, Rosemary's removal as a director of Investments and the other companies was effected by David's acts as corporate representative appointed by Enterprises in respect of Investments and those companies. Those appointments were not ineffective by reason of the matters particularised, where I have accepted David's submission that she ceased to be a director of Enterprises at the meeting in December 2006 under article 64 of Enterprises' articles of association; she did not contend that David or Ian had similarly ceased to be directors and their actions would potentially be validated by s 201M of the Corporations Act in any event; and I have held that Ethel was entitled, at least by reason of an estoppel, to vote (as she did, by Ian, as her attorney) at the meeting of Enterprises. Rosemary did not identify any basis for an entitlement to notice of any meeting of Investments or the other companies, arising under their articles of association or otherwise; she was not a shareholder of those companies and has identified no basis on which she could have effectively "opposed" that removal, when it was effected by the corporate representative of the holder of their voting shares; and it was not necessary for Ethel to act as a director of Enterprises either at its general meeting, where she was acting as holder of B class shares, or in respect of Investments, where Enterprises rather than Ethel held the relevant shares. 64Rosemary also submitted that Ian's appointment as a director of Investments, by written resolution of the directors of the company with effect from 29 January 2007, was invalid, because it relied on the use of Ethel's power of attorney in respect of the exercise of her powers as a director rather than a shareholder. David and Ian in turn rely on the fact that Enterprises (being the shareholder in Investments) ratified that appointment on 13 June 2013 (David 14.6.13, [7] and Annexure K). The parties, as often occurred in this case, did not advance substantive submissions in respect of the applicable legal principles and I must address the issue without the assistance of such submissions. It does not seem to me that this challenge can have any impact on the outcome of the proceedings, since it is plain that there was a purported appointment of Ian as a director of Investments. If that appointment were invalid by reason of a non-compliance with the company's constitution or the Corporations Act (because, if Rosemary were correct, the necessary resolution to make it was not effectively passed), the acts taken by Ian in his capacity as a director of Investments were nonetheless effective, so far as Investments' internal affairs including the payment of dividends were concerned, by reason of s 201M of the Corporations Act: Grant v John Grant & Sons Pty Ltd (1950) 82 CLR 1; Re Colorbus Pty Ltd [2004] VSC 486; (2004) 51 ACSR 677. This is not a case, by contrast with Sheahan v Londish [2010] NSWCA 270, (2010) 80 ACSR 377, where no such purported appointment was made. It is not necessary to determine several other matters arising in respect of this contention, including whether it was sufficiently pleaded or particularised to permit Rosemary to advance it; whether, as Rosemary contend, David and Ian could not then rely on the subsequent ratification of that appointment, which they had also not pleaded; whether the limits to a directors' ability to perform his or her duties by an attorney (to which I refer below) extend to the act of signature of a written resolution of directors; and whether that ratification was otherwise effective. Derivative claims - The pleaded breaches of fiduciary and statutory duties and the applicable legal principles 65Rosemary brings derivative claims by Enterprises and Investments for breach of fiduciary duty and directors' duties at general law. The relevant pleadings are somewhat complex. I will first address Rosemary's pleaded case and the applicable legal principles and then deal with the several transactions that Rosemary seeks to attack, each on several grounds. 66Rosemary first pleads that: 63. "By reason that: a. Ledir Investments was solvent; and b. Ian Aboud and David Aboud were directors of Ledir Investments by reason of Ledir Enterprises' control and ownership of Ledir Investments; Ian and David's actions as directors of Ledir Investments were at all relevant times actually or substantially subject to their fiduciary duties as directors of Ledir Enterprises and are to be treated on the same basis as though they were actions as directors of Ledir Enterprises." 67It is, of course, well-established that a director owes certain fiduciary duties to the company of which he or she is a director. For example, in Mills v Mills (1938) 60 CLR 150 at 195, Dixon J observed that "[d]irectors of a company are fiduciary agents, and a power conferred upon them cannot be exercised in order to obtain some private advantage or for any purpose foreign to the power". Traditionally, the fiduciary duties of directors include at least a duty to avoid situations where there is a conflict between the interest of the director and the interest of the company; and, probably, a duty to act in good faith and to exercise powers conferred on a director as a result of his or her office for proper purposes. In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 89 ACSR 1, the majority held that the duties owed by company directors to act in good faith in the company's best interests and to exercise their powers for a proper purpose were also fiduciary in character (per Lee AJA at [918]-[933], per Drummond AJA at [1956]-[1978]), and Carr AJA also observed that he was not prepared to hold, on the present state of authority, that those duties were not fiduciary duties (per Carr AJA at [2733]). 68However, the fiduciary duties pleaded by Rosemary in 5FAS [63] do not appear to be duties of that orthodox character, which do not depend on a company's solvency or its control of another company. Rosemary does not here plead that David and Ian owed fiduciary duties in their capacity as directors of Investments to Investments, or in their capacity as directors of Enterprises to Enterprises, although those propositions would plainly be correct. She instead pleads that, because David and Ian owed their control of Investments to Enterprises' control of Investments, their conduct as directors of Investments was subject to their fiduciary duties to Enterprises or, as she puts it, that their actions as directors of Investments are subject to the same duties owed to Enterprises as would be owed in respect of their duties as directors of Enterprises. I should add that, although the parties did not draw my attention to the particulars (CB 9), David's legal representatives appears to have understood the allegation in this way since, by letter dated 29 October 2010, they requested particulars of the facts matters and circumstances relied upon in alleging that David's and Ian's conduct respectively "as a director of Ledir Investments gave rise to fiduciary duties owed to Ledir Enterprises". Rosemary's solicitors responded by letter dated 16 November 2010 (CB 9) by reference to the matters pleaded in paragraphs 63(a) and (b) of the Statement of Claim, to which I have referred, and paragraphs 10, 11 and 48 of the Statement of Claim and the particulars to those paragraphs. Paragraphs 10 and 11 of the Statement of Claim referred to Enterprises' ownership of shares in Investments and its entitlement to vote at a general meeting of Investments and paragraph 48 referred the exercise of the voting power of Enterprises as a shareholder of other companies in the Ledir Group to bring about Rosemary's removal as directors of those companies. 69Rosemary's written submissions did no more than assert the existence of a duty of the kind pleaded, without identifying any reasoning process that would support it. It does not seem to me that the pleaded duty is established, so as to cause David and Ian in their capacity as directors of Investments to owe a fiduciary duty to Enterprises, the holding company of Investments, or to be subject in acting as directors of Investments to the duties which they would owe to Enterprises in acting as directors of Enterprises. My attention was not drawn to any authority to suggest that a director of a subsidiary is treated in acting in that capacity as though he or she were in fact acting as director of its holding company or that he or she, at least in the ordinary course, owes fiduciary duties to its holding company while acting in that capacity. There is a significant difficulty with those propositions, namely that, in acting as directors of Investments, Ian and David were in the ordinary course required to act in the interests of that entity rather than solely in the interests of its holding company: see, for example, Walker v Wimborne (1976) 137 CLR 1 at 6-7; Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd [2001] NSWSC 448; (2001) 38 ACSR 404; McGrath & Anor (in their capacity as liquidators of HIH Insurance Ltd) [2010] NSWSC 404; (2010) 78 ACSR 405 at [39]. The constitution of Investments was not amended in accordance with s 187 of the Corporations Act so as to permit its directors to act in the interests of its holding company, and it seems that such an amendment would not have been effective where Enterprises did not hold all the shares in Investments. There would be no reason to impose upon David and Ian duties, as directors of Investments, requiring them to act in the interests of Enterprises or not contrary to the interests of Enterprises or as though they were directors of Enterprises where such duties would potentially conflict with their duties to act in the interests of Investments. I do not find that the pleaded fiduciary duty owed by David and Ian is established. 70Rosemary in turn alleges that Ian and David breached their fiduciary duties owed to Enterprises pleaded in 5FAS [63] (which I have not held to be established) and to Investments (which are not pleaded) in taking certain pleaded actions (5FAS [64]). Rosemary pleads that: "64. In causing Ledir Investments or Ledir Enterprises to make: a. The David Aboud Payments; b. The Ian Aboud Payments; and c. Lawyers Payments and in causing Ledir Enterprises to appropriate franking credits to dividends as pleaded in paragraph 61A which were ultimately received by them as pleaded in paragraph 61B, David Aboud and Ian Aboud acted: d. In their own interests; e. To prefer their own interests to the interests of Ledir Enterprises and that company as a whole; f. Contrary to the interests of the members of Ledir Enterprises as a whole and the plaintiff in particular; and g. In breach of their fiduciary duties to Ledir Enterprises; or h. In breach of their fiduciary duties to Ledir Enterprises and Ledir Investments." The term "David Aboud Payments" is in turn defined as the amount of $204,000 of the December 2006 payments; a first monthly payment of $9,000 to David and subsequently monthly payments so far as they exceeded $4,000 per month, a reimbursement of costs previously paid by David to his solicitors in respect of the FPA proceedings, and the amount of $2,439,273 paid to David on or about June 2007. The term "Ian Aboud Payments" is defined as the amounts of $500,000 paid to Mandala on 7 May 2007, $1.5 million paid to Mandala on 27 June 2007; $50,000 paid to Ian on or about 24 September 2008 and $1 million paid to Mandala on or about 23 December 2008. The term "Lawyers Payments" is defined as payments to David's, and on one occasion Ian's, legal advisers. I will address these transactions below. 71Rosemary then adds a further breach of a fiduciary duty owed to Enterprises in 5FAS [65], after a pleading of breach of statutory duties to which I refer below, namely that David and Ian, in undertaking the same conduct: "improperly used their powers in breach of their fiduciary duties f. not in good faith; g. in their own interests to gain an advantage for themselves and each other to the corresponding detriment of Ledir Enterprises; and h. contrary to the interests of Ledir Enterprises as a whole." Presumably, the fiduciary duties referred to in this paragraph are the duties owed to Enterprises pleaded in 5FAS [63] (which I have not held to be established) or, possibly, the unpleaded fiduciary duty to Investments assumed in 5FAS [64]. 72The allegation of breach in these paragraphs depend, first, on the fiduciary duty pleaded in paragraph 63, which I have not found to be established. Second, they depend on the unpleaded fiduciary duty owed to Investments. I do not consider that I can find a breach established on the basis of that unpleaded duty, particularly where Rosemary's case is already complex and these allegations received little attention in submissions. To find such a breach, I would first have to formulate the content of the duty to Investments that Rosemary has not articulated, which may be an orthodox application of the no conflict or no profit rules; or may be a more specific duty of directors of Investments not to act in their own interests, or a positive duty of good faith or an unarticulated combination of these or other elements. The fundamental difficulty with my taking that course is that it would deprive the defendants of an opportunity to address the formulation of the duty which the Court, not Rosemary, had developed. That course seems to me to be inconsistent with the role of pleadings, to which I have referred above, in defining the issues in the proceedings and, importantly, ensuring the basic requirements of procedural fairness. 73Rosemary also pleads that (at 5FAS [65]): "65. In causing Ledir Investments or Ledir Enterprises to make: a. The David Aboud Payments; b. The Ian Aboud Payments; and c. The Lawyers Payments; and in causing Ledir Enterprises to appropriate franking creditors to dividends as pleaded in paragraph 61A which were ultimately received by them as pleaded in paragraph 61B, David Aboud and Ian Aboud have exercised their powers as directors of Ledir Enterprises: d. in breach of the obligation of care and diligence in section 180(1) of the Corporations Law [sic]; e. Not in good faith in the best interests of Ledir Enterprises and for an improper purpose, in breach of their duty pursuant to section 181(1) of the Corporations Act ..." 74This paragraph refers, first, to the duty of care and diligence under s 180(1) of the Corporations Act, which requires a director or officer of a corporation to exercise his or her powers and discharge his or her duties with the degree of care and diligence which a reasonable person would exercise if he or she was a director or officer of a corporation in the corporation's circumstances; and occupied the office within that corporation held by the director or officer, and had the same responsibilities within the corporation as the director or officer. 75The parties paid little attention to the relevant case law in submissions. The statutory duty of care and diligence overlaps with directors' duty of care arising at general law: Australian Securities and Investments Commission v Vines [2007] NSWCA 75; (2007) 73 NSWLR 451; (2007) 62 ACSR 1. In Australian Securities and Investments Commission v Rich [2009] NSWSC 1229; (2009) 75 ACSR 1 at [7201], Austin J observed that the reference to a corporation's circumstances in s 180(1) required that consideration be given to the type of company involved, the size and nature of its business, the provisions of its constitution, the composition of the board and the distribution of the work between the board and other officers. The circumstances of Investments and Enterprises include that they were family companies with directors who would not necessarily have corporate experience and their affairs might be conducted in a relatively informal way; the structure of the Ledir Group contemplated the payment of dividends by the companies and the making of distributions by Comserv as trustee of the Ledir Trust to family members; and those companies were not otherwise conducting an ongoing business. 76This paragraph refers, second, to a breach of s 181(1) of the Corporations Act which requires a director or other officer of a corporation to exercise his or her powers and discharge his or her duties in good faith in the best interests of the corporation and for a proper purpose. The allegation of breach of that section of the Corporations Act is an allegation of breach of a civil penalty provision and the Court must have regard to the seriousness of the allegations in determining it has been established: Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362; Wilson HTM Investment Group Ltd v Pagliaro [2012] NSWSC 1068 at [102]. The alleged breach of s 181 of the Corporations Act involves both a breach of the duty to act in good faith and an allegation of conduct for improper purposes. 77The parties again paid little attention to the relevant case law in submissions. The statutory duty under s 181 of the Corporations Act reflects directors' duties at general law to act in good faith in the interests of and for the benefit of the company as a whole. In Chew v R (1991) 4 WAR 21; (1991) 5 ACSR 473 at 499, Malcolm CJ summarised the requirements of that duty as including that directors must exercise their powers in the interests of the company, and must not misuse or abuse their power and must not misappropriate the company's assets for themselves. The interests of a company as a whole, for the purposes of this formulation, include at least its shareholders and, possibly, other stakeholders: Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239; (2008) 39 WAR 1; (2008) 70 ACSR 1 (Owen J) at [4388], [4395]. It is, of course, more difficult to apply the criterion of the "interests of the company" where classes of members have inconsistent interests: Mills v Mills above, where Latham CJ noted that the question which may arise in that situation is not a question of the company's interest, but "a question of what is fair as between different classes of shareholders". 78In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3), the Court of Appeal of the Supreme Court of Western Australia unanimously held that the first element of that duty, the duty to act in good faith in the company's best interests, was subjective and would be complied with if directors honestly believed they acted in the company's best interests (per Lee AJA at [1923], per Drummond AJA at [1988], [2027], per Carr AJA at [2772], [2795]). The authors of Austin, Ford and Ramsey, Company Directors: Principles of Law and Corporate Governance, 2005 observe at [7.4] that a failure to comply with that duty can tend to arise, relevantly, "when circumstances induce directors to believe that the company's interests correspond with their own interests" and "[m]aking that unreflective assumption, they then act in the company's affairs without considering its interests as a separate entity with its own shareholders and creditors". 79The second limb of s 181(1), requires that directors' powers may be exercised only for the purpose for which they were conferred and not for any improper purpose: Mills v Mills above at 185, where Dixon J noted that a power conferred upon directors "cannot be exercised in order to obtain some private advantage or for any purpose foreign to the power"; Permanent Building Society (in liq) v Wheeler (1994) 11 WAR 187 at 218; (1994) 14 ACSR 109. There is authority that whether a director acted for a proper purpose within s 181 is to be determined objectively: Re HIH Insurance Ltd and HIH Casualty and General Insurance Ltd; Australian Securities and Investments Commission v Adler [2002] NSWSC 171; (2002) 168 FLR 253; (2002) 41 ACSR 72 at [738]-[739]. In Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) above, the majority held that whether a director acts for an improper purpose is determined objectively involving an assessment by the Court of what was reasonable in the circumstances (per Lee AJA at [933], per Drummond AJA at [1988], [2027], [2073]). By contrast, Carr AJA held that the test whether directors had acted for an improper purpose was primarily subjective, although a decision would be voidable if directors acted in good faith for a purpose that was beyond their powers or for a collateral purpose (at [2903]). The application of a company's funds, without regard to its separate identity and without considering whether it was in the interests of the company and its members, was held to constitute a breach of that section in Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428; (2009) 74 ACSR 282 at [42], where Davies J noted that, even where a director had authority to make the relevant payments, the exercise of that authority required the director to turn his mind to whether the relevant transfer of funds was in the interests of the company. 80Rosemary also pleads that: "65A. Further, the David Aboud payments, the Ian Aboud Payments and the Lawyers Payments were not authorised by Ledir Enterprises or, in the alternative, the Lawyers Payments were not authorised by Ledir Investments. The payments were authorised by David Aboud and Ian Aboud wrongfully acting as directors to the exclusion of Rosemary Aboud." This pleading is, at best, confusing since it appears to allege both that the payments were not authorised and that they were in fact authorised, but wrongfully, without any indication that the two propositions are alternatives or otherwise as to how they are to be reconciled. Doing the best I can, I read the allegation as intended to convey that the payments were not authorised because their purported authorisation by David and Ian was wrongful and liable to be disregarded, because David and Ian were wrongfully acting as directors to Rosemary's exclusion. That reading is consistent with the manner in which a corresponding allegation in 5FAS [67B] is particularised by reference to the allegation that: "The Payments were authorised by David Aboud and Ian Aboud wrongfully acting as directors to the exclusion of Rosemary Aboud." 81In her written submissions, Rosemary submits that the allegedly unauthorised character of the 2006 payments, the 2007 payments, the 2008 payments and the Lawyers Payments establish a breach of fiduciary and statutory duties. She submits that: "Unauthorised payments are the paradigm abuse of a fiduciary position and breach of fiduciary duty. They are a breach of the fundamental duty to have regard to the corporate constitution (see Austin Ford & Ramsay, Company Directors: Principles of Law and Corporate Governance 2005 paragraph 7.17). To make such payments is also a breach of the statutory duties under section 181 to act in good faith for the best interests of the company or for a proper purpose. Ian and David acted in their own and each other's interests and contrary to the interests of the company in breach of both fiduciary duties and statutory duties as pleaded." The 2006 payments and monthly distributions to David 82I now turn to each of the actions alleged to constitute the breach of the pleaded fiduciary and statutory duties. 83Rosemary pleads that the payment of $360,000 to David made in December 2006 was not authorised by the directors of Enterprises or Investments (5FAS [42]). In my view, this allegation has not been established, since the $360,000 paid to David represents the amount of dividends authorised in April 2002 but not paid. It seems to me that the payment of the amounts to David was, in substance, authorised by the April 2002 resolution, notwithstanding that Louis had not acted in accordance with that authority after his falling out with David, and the payments were made (as were lesser payments to Rosemary) as distributions from the Ledir Trust rather than as dividends from Enterprises. The failure to reverse the reduction in Rosemary's dividends (or, more precisely, distributions) implemented by Louis in a similar way is a matter that will be relevant to Rosemary's claim in oppression, but does not, in my view, affect the authority to make the payments to either David or Rosemary in accordance with the resolution. 84I have not neglected that the resolution of 1 April 2002 was not implemented in its terms since subsequent payments to David and Rosemary were made as distributions from the Ledir Trust rather than as dividends from Enterprises. I did not understand Rosemary to attack the payments made to David on the basis that the April 2002 resolution had authorised dividends from the companies not distributions in the same amount from the Ledir Trust, where such an attack would have impugned the monthly distributions made from the Ledir Trust to her as well as to David. It seems to me that it would be somewhat artificial to treat the distributions as unauthorised on that basis, in the context of a family company and family trust where the distinction between dividends from Investments and distributions from the Ledir Trust was not generally been recognised in the past. 85Rosemary's claim that the payments were also unauthorised because they depended on David and Ian acting wrongfully as directors to Rosemary's exclusion must fail, because Rosemary had ceased to be a director under article 64 of Enterprises' articles of association at the 2006 meeting; I have held that Enterprises is estopped from denying Ethel's voting power in respect of the B class shares; for reasons that I will address below, it has not been established that the use of Ian's power of attorney to appoint Ian as a director amounted to equitable fraud; and it therefore has not been established that Rosemary's removal as a director, to the extent that it had any effect, was not valid. 86Alternatively, Rosemary pleads that the December 2006 payment, if authorised by the directors of Enterprises or Investments, was authorised pursuant to the resolution of the directors of Enterprises dated 1 April 2002 which provided for dividends to be paid at a rate of $9,000 per month to each of David and Rosemary as the holders of class "E" and "F" shares respectively, and for the balance of any further dividends to be made in the proportion of 70% to the holder of class "E" shares (David) and 30% to the holder of class "F" shares (Rosemary) (5FAS [43]). It seems to me that this analysis of the transaction is correct, but it does not have the consequence that dividends that had been authorised to be paid to David could not be paid, as distinct from potentially supporting a claim by Rosemary (which has not been made) for dividends that had been authorised to be paid to her to the extent they had not been paid. 87Rosemary also contends that the payment made to David in December 2006, at least to the extent of $204,000 (being the amount by which the payment to David was in excess of the amounts paid to Rosemary in the period prior to December 2006) and subsequent monthly distributions to David (which fall within the defined terms "David Aboud Payments) involve a breach of fiduciary duties (5FAS [64], [65], a breach of ss 180 and 181 of the Corporations Act (5FAS [65]) and were unauthorised (5FAS [65A]). I need not address the alleged breach of fiduciary duties, since the only pleaded fiduciary duty in 5FAS [63] has not been established. 88It also does not seem to me that the claim for breach of ss 180 and 181 of the Corporations Act is established in respect of the 2006 payment and subsequent monthly payments to David, where those payments were in amounts that had previously been authorised by the board of Enterprises, although the payments were made (as were monthly distributions as to Rosemary in a lesser amount) by way of distributions from the Ledir Trust rather than as dividends by Enterprises. The structure of the Ledir Group and the facts that distributions were historically made (including to Rosemary) in this manner tends against a finding of breach of a duty of care or the duty to act in good faith or for proper purposes in respect of those payments. It has not been established that David in respect of the 2006 payment, or David and Ian in respect of subsequent monthly distributions, did not subjectively consider that making the payments to Comserv in the amounts previously authorised by the board of Enterprises, so it could make corresponding distributions to David, was not in the interests of Enterprises and a contravention of the duty to act in good faith under s 181 is not established. I also do not consider that it has been established that that conduct, or corresponding payments to Rosemary, could not reasonably have been undertaken so as to give rise to a breach of the proper purposes duty under s 181. It is not necessary or appropriate to determine whether there was a breach of statutory duty in failing to make corresponding payments to Rosemary, since that failure is not the pleaded breach. I will, however, return to that issue in respect of the oppression case below. 2007 payments 89Rosemary pleads that the 2007 payments (which fall within the definitions of "David Aboud Payments" and "Ian Aboud Payments") involve a breach of fiduciary duties (5FAS [64], [65]), a breach of statutory duties (5FAS [65]) and were unauthorised (5FAS [65A]). I need not address the alleged breach of fiduciary duties since the only pleaded fiduciary duty in 5FAS [63] has not been established for the reasons noted above. 90The first step in the 2007 payments was the payment of dividends and other payments by Investments. On 25 and 26 June 2007, Investments resolved to pay an unfranked dividend of $2,238,232 and a franked dividend of $578,516 to Enterprises and to lend $1,433,411 to Enterprises (CB 205). Article 89(3) of Investments' articles of association confers an absolute discretion on its directors as to the rate of dividend to be paid upon shares constituting any one or more of the relevant classes. The second step in the 2007 payments was the payment of dividends and other payments by Enterprises. Enterprises resolved to retain a portion of the unfranked dividend from Investments and pay a franked dividend of $578,516 and an unfranked dividend of $360,523 to Comserv as trustee of the Ledir Trust, to borrow $1,433,411 from Investments and lend $3,000,134 to Comserv as trustee of the Ledir Trust. Article 98 of Enterprises' articles of association of Enterprises provides that, relevantly, subject to the provisions of article 2b, Enterprises' directors have an absolute discretion in the determination of the rate of dividend (if any) to be paid in respect of shares in the relevant classes. 91The final step was the making of certain distributions and payments by Comserv as trustee of the Ledir Trust. Clause 4(a) of the Trust Deed of the Ledir Trust (CB 8) confers a discretionary power on Comserv: "to pay or apply the whole or any part of the Trust Fund to or for the maintenance, education, benefit or advancement in life of all or such one or more to the exclusion of others or other of the Beneficiaries and if more than one in such shares and in such manner generally as the Trustee shall in its absolute discretion from time to time think fit ...". On 27 June 2007, Comserv resolved to pay a fully franked distribution of $578,516 and an unfranked distribution of $360,623 to Ian (although it appears these payments were also initially treated as loans and only later extinguished by distributions) and to lend the amounts of $2,439,273 and $560,861 to David and Ian respectively (David 12.11.12 [73], Matthews 13.11.12 [221.3], CB 207). David accepted in cross-examination that the 2007 payments were loans in the first year and then they became "dividends" in the second year (T220). (David's acceptance that the payments became "dividends" in 2008 seems to me to have been in error, in response to a question that mischaracterised the relevant payments, which were in fact trust distributions made by the Ledir Trust in 2008.) On 27 June 2007 David was paid the amount contemplated by that resolution (T183). On 28 June 2007, Mandala received a transfer of $1.5m from Ledir Investments (CB 237). 92The loan to David was extinguished in 2008 when Comserv made a trust distribution to David of $2,547,273, comprising the previous loan amount and a distribution for that year of $108,000 (Matthews 13.11.12 [21.6], CB 275). The financial report for the Ledir Trust for the year ended 30 June 2007 records a loan of $2 million from the Ledir Trust to Ian (Matthews 13.11.12 [18.3], [21.3.3], CB 218), which was extinguished in the year ended 30 June 2008 when Comserv resolved to make a distribution of $2 million to Ian (Matthews 13.11.12 [21.6], CB 275). The payments to David and Ian and ongoing distributions to Rosemary were ratified by resolution of Comserv on 4 September 2009 (CB 341). 93David's evidence is that the distribution made in the 2007 payments was based upon the advice of BDO and in accordance with his intention to distribute the assets fairly between Ian, Rosemary and himself (David 12.11.12 [74]). He acknowledged in cross-examination that the advice given by BDO related to the means of making a tax effective distribution and not to which beneficiaries or shareholders would receive the money (T192). His evidence also has the difficulty that no corresponding distribution was sought to be made to Rosemary at that time. 94The primary basis on which Rosemary contends that David and Ian acted in breach of directors' fiduciary and statutory duties in making the 2007 payments (or, more accurately, resolving to authorise the payment of dividends by Investments and Enterprises) is that that conduct was, in substance, part of a "winding up" of the Ledir Group and was inconsistent with her rights on a winding up of Enterprises. This contention is also critical to Rosemary's oppression claim. 95Rosemary pleads that, in the event of a winding up of Enterprises, she, by reason of her holding of 20 "F" class shares in Enterprises, is entitled to one-third of the surplus assets of Enterprises (5FAS [7]). Rosemary's claimed entitlement to one-third of those assets is on the basis that the only shares entitled so to share are David's 40 E class shares and Rosemary's 20 F class shares and that the B convertible preference shares owned by Ethel do not have such an entitlement. Alternatively, Rosemary claims to be entitled to two-sevenths of the surplus assets of Enterprises on a winding up (5FAS [8]). Rosemary's claim to an entitlement to no less than two-sevenths is on the basis that the other shares entitled to share in surplus assets are Ethel's 5 B class shares. 96I accept that it is likely that Rosemary was entitled to one-third, or two-sevenths, of the surplus on the winding up of Enterprises, and it is not necessary to determine which given the findings that I have reached below. That entitlement arose as follows. The E and F class shares held by David and Rosemary were originally issued as E and F convertible preference shares and articles 2b(6)(b) and 2(b)(7)(b) of Enterprises' articles of association, which were not affected by the 1 April 2002 amendments, conferred a preferential right to participate in a distribution of the surplus on the holders of those convertible preference shares. Rosemary contends, and I accept, that the E and F class convertible preference shares were converted to E and F class shares by no later than 1985 (T448). A form lodged by Enterprises with the National Companies & Securities Commission on 11 March 1985 and the attached special resolution signed by Louis indicated that the share capital of Enterprises then included, relevantly, 40 E class shares and 20 F class shares, which were then held by Louis and Ethel and later transferred to David and Rosemary respectively (CB 10). The annual return of Enterprises for the financial year ended 1 July 1984 lodged with the National Companies & Securities Commission in turn recorded that Enterprises had on issue 40 E class shares and 20 F class shares. An ASIC form subsequently prepared by BDO and signed by David recorded those shares as having been converted (CB 137). The resolution for the payment of dividends passed on 1 April 2002 also necessarily assumes that the E and F convertible preference shares had been converted to E and F class shares. 97The articles of association of Enterprises initially did not deal with the rights of E and F class shares on conversion, but the amendments made on 1 April 2002 specified the rights attached to E and F class shares once converted. Those rights did not expressly confer a preferential right to any surplus in a winding up on E and F class shares, by contrast with E and F class convertible preference shares. Although it is not necessary to reach a final conclusion as to this matter at this stage, it appears that that the B class preference shares held by Ethel had the same rights as the E and F class shares if converted or, if as I have held, an estoppel was established to prevent Enterprises (or Ethel) denying the conversion of those shares. Enterprises' articles of association, as amended on 1 April 2002, provide that the D, G, I, L, M and N class shares were only entitled to a return of subscribed capital (and, by exclusion, not to a share of any surplus) on a winding up of Enterprises, and a somewhat differently worded provision in respect of the X class shares had the same effect. Although the B, D and F class shares did not expressly confer a right to participate in the surplus on a winding up on the B, D and F class shares, they would have such a right according to their proportionate interests in the share capital, measured according to the nominal amount, and on the basis that the other classes of shares to which I have referred above did not have such a right under the company's constitution: Birch v Cropper (1889) 14 App Cas 525 at 543; Re Driffield Gas Light Company [1898] 1 Ch 451 at 455; Beck v LW Furniture Consolidated (Aust) Pty Ltd [2011] NSWSC 235 at [206] (which observations do not appear to be affected by the subsequent appeals); Re Sullivans Cove IXL Nominees Pty Ltd [2011] TASSC 9; (2011) 82 ACSR 224 at [48]. 98However, it does not seem to me to follow from the fact that Rosemary had an entitlement to two-sevenths or one third of the surplus on a winding up of Enterprises that she also had an entitlement to expect that two-sevenths or one-third of dividends from Enterprises, still less of distributions from the Ledir Trust, would be paid to her prior to a winding up. While the structure of the family companies and the trust would confer a benefit on Rosemary on a winding up, her ability to receive dividends from the Company depended on a decision of its directors and her ability to receive distributions from the Trust depended on the exercise of the trustee's discretion. The allocation of D class shares in Enterprises to Comserv as trustee of the Ledir Trust provided, and was plainly intended to provide, a means to make distributions by Enterprises to Comserv as trustee of the Ledir Trust and then to family members at its discretion and in accordance with the terms of the Trust. 99Rosemary also submitted that the 2007 payments were contrary to Louis' wishes as to how the family assets, shares in Enterprises and distributions should be treated after his death. The evidence as to that matter indicates that Louis' intentions changed from time to time. He generally contemplated that Rosemary and David would hold an interest in Enterprises and from time to time, including in the period shortly before his death, he also contemplated that Ian would hold such an interest. 100Rosemary relies on Louis' memorandum of wishes dated 28 June 1997, although it primarily related to the New Zealand trust and was nearly 7 years prior to his death. That memorandum of wishes recognised that the trustee of the New Zealand trust was not bound by Louis' wishes and had full discretion to make decisions as they saw fit, and referred to Louis's intention to transfer the shares in Enterprises to David as to a two thirds share and Rosemary as to one third share prior to his death, and gave reasons for not transferring any of the shares in Enterprises to Ian, on the basis that Ian had already received his share of the benefit of ownership of those shares (CB 17). A further memorandum of wishes dated 20 November 2000 in relation to the New Zealand Trust indicated Louis ' wish that, on his death, that trust would vest and be distributed to Rosemary as to NZ $1 million and 10 percent of any excess over that amount with the balance to be distributed to David and Ian equally (CB 18, 275). 101A letter dated 21 February 2001 from BDO to Louis records his then wish that Enterprises should be owned as to 70% (directly or indirectly) by David and 30% (directly or indirectly) by Rosemary, subject to several qualifications, and that income should be distributed to David and Rosemary up to $9000 per month to each and the balance over that amount as to 70% to David and 30% to Rosemary (CB 14). On 1 April 2002, the directors of Enterprises (at a meeting attended by Louis, Ethel, David and Rosemary) similarly resolved that distributions would be paid monthly at the rate of $9000 to David and Rosemary and the balance of any distributable profits in the ratio of 70:30 to David and Rosemary (CB 22). It appears that resolution was not implemented, at least for any extended period, since Louis ceased payment of dividends to David in 2003 after the disagreement concerning General Publishers to which I referred above (David 12.11.2012 [39]) and also reduced Rosemary's distributions to $4000 per month, and the distributions made to Rosemary were made from the Ledir Trust rather than as dividends paid by Enterprises. Further correspondence concerning Louis' intentions from time to time followed. For example: * A letter dated 19 September 2003 from BDO to Louis records his then intention that David was to receive 49% of the dividends of Enterprises, Rosemary was to receive 31% of the dividends and Ian was to receive 20% of those dividends. Rosemary rightly notes that her anticipated share in such dividends was not substantially reduced by that letter. * A subsequent letter dated 21 November 2003 from BDO to Louis records Louis's then intention that each of David, Rosemary and Ian would be entitled to one-third of the dividends paid by Enterprises (CB 30). It appears that proposal was not implemented before Louis' death in April 2004. * A letter dated 24 August 2004 from BDO to Rosemary and Ethel in turn referred to a 70:30 distribution split between David and Rosemary, which appears to have reflected the earlier rather than the later wishes expressed by Louis (CB 34). * A letter dated 18 April 2005 from BDO to Rosemary's lawyers again referred to a 70:30 distribution split between David and Rosemary (CB 36). 102It does not seem to me that inconsistency with the wishes expressed by Louis supports a finding of breach of directors' duties in respect of the 2007 payments, because those wishes changed significantly over the period and were not implemented in Louis' lifetime by the payment of dividends from those companies as distinct from distributions from the trust and would be a matter to which the directors of Investments, Enterprises and (more, relevantly) Comserv could or should have regard in the exercise of their powers rather than a matter which dictated the exercise of the powers in a particular way. 103David's submissions emphasise that he and Rosemary were not paid dividends from Enterprises but were paid discretionary trust distributions from the Ledir Trust, implemented by the declaration of a dividend by Investments to its sole ordinary shareholder, Enterprises and payment of that dividend; the declaration of a dividend by Enterprises to Comserv as trustee of the Ledir Trust and payment of that dividend; and a determination by Comserv of the distribution it would make to beneficiaries of the Ledir Trust and the making of that distribution. David also contends in his opening submissions (also adopted by Ian and Mandala) that the particular payments made to David and Ian: "were not payments to shareholders of Enterprises. They were discretionary trust payments made to beneficiaries of the Ledir Trust by the corporate trustee of that trust, Comserv." Rosemary responds that it is: "artificial to say that dividends were paid by Ledir Investments and [Ledir] Enterprises and that there was a totally separate decision, divorced from the affairs of the company, as to who they should be paid to by the Trust. The decisions were taken together as part of a "distribution strategy", conceived by advisors for tax benefit. The identity of the recipients of the strategy were determined by David and Ian. The cash flowed to whom they decided (largely themselves). The accountants then accounted for it via the "dividend strategy" months later, in the case of the large 2007 Payments, via a 2 year exercise, first via loans in year 1, repaid in the second year by declaring dividends and making distributions to repay those loans, in each case through 3 legal entities." 104I accept that there was a coordinated set of steps, reflecting the advice given by BDO as to how a distribution could be implemented, and that David and Ian determined that substantial distributions should be made from the Ledir Trust to themselves and not to Rosemary. Nonetheless, some of those steps involved actions taken by Ian and David as directors of Investments, some as directors of Enterprises, and some by David as a director of Comserv in its capacity as trustee of the Ledir Trust. A claim for breach of directors' duties in respect of a particular company must be determined by reference to the steps taken by the director in respect of that company, albeit also in its wider factual context. There is, as I will note below, a difficulty with Ian's purported exercise of Ethel's powers as a director of Comserv as her attorney. However, I did not understand Rosemary to contend that that could in itself establish any breach of duty by David or Ian as directors of Investments or Enterprises in 2007. I would not have accepted such a contention, since the propriety of the actions in that capacity is not to be determined by the validity of Ian's actions as a director of Comserv. 105As I noted above, Rosemary contends that, if Ian and David were authorised to act as directors of Enterprises so as to determine the dividends paid by it, what was done went beyond the bound by constraints of fairness recognised in Mills v Mills above. The first difficulty with this proposition seems to me to be that all that as done by David and Ian as directors of Enterprises was to authorise distributions and loans to Comserv, which involved no inherent unfairness. Whether the ultimate outcome was "unfair" or inappropriate depended on the exercise of Comserv's discretion as to whom distributions and loans were made. Whether the distributions made by Comserv as trustee of the Ledir Trust were a proper exercise of Comserv's discretion would in turn depend upon a range of matters, which could include the level of payments received by Rosemary on the one hand and David and Ian on the other over a wider period than addressed in the evidence in these proceedings. Rosemary's submissions in reply submit that there was no need for her to make claims in respect of Comserv that were (in the words of those submissions) "bound to fail" in Rosemary's capacity as discretionary beneficiary of the Ledir Trust; however, that highlights the difficulty in her establishing that the decision of David and Ian to authorise the payment of dividends by Investments to its shareholder, Enterprises, and by Enterprises to one of its shareholders, Comserv, was a breach of directors' duties because they would fund a distribution from the Trust which Rosemary did not seek to show, and concedes that she could not show, was wrongful. 106Rosemary's claim for breach of directors' fiduciary and statutory duties is also not supported by any analysis of the matters that would be relevant to whether Comserv properly exercised its discretion to make the distributions and loans to David and Ian in 2007. David points in submissions to matters which may be relevant to the exercise of Comserv's discretion as to the making of distributions, including the relevant needs of the beneficiaries; the fact that Ian and David have families and dependents and Rosemary does not; benefits that had previously been conferred on the beneficiaries; and the relative contributions that the beneficiaries had made to the growth and profitability of the Ledir Group businesses. An exercise of Comserv's discretion could also have had regard to Rosemary's personal assets. Ian's understanding of that matter (which is not evidence of the fact) as at August 2007 was set out in a letter dated 23 August 2007 from his solicitor to the trustee of the New Zealand Trust, CB 239) which indicated his understanding that Rosemary then had estimated assets in excess of $5 million, including money is held in her bank account of $1,350,000, an apartment in London with an estimated value of nearly $2.4 million and amounts derived from distributions from the New Zealand and Australian trusts. The evidence does not allow me to reach a finding as to the level of Rosemary's assets as a matter of fact. However, where Rosemary did not give evidence, I should and do infer that her evidence as to the level of her assets would not have assisted her in establishing that there was any substantive unfairness in the making of distributions by Comserv as trustee of the Ledir Trust to David and Ian in 2007, rather than to her. 107Rosemary has also not sought to establish that the exercise of Comserv's discretion to make distributions to David and Ian in 2006 and 2007 had the result that David and Ian in fact received a disproportionate share of the Ledir Group's assets or the family assets over any longer period or indeed over the whole of the period in which Rosemary, David and Ian benefited from the assets accumulated by Louis and the Ledir Group. Rosemary disavows such a contention in her submissions in chief: "It is no part of this case to analyse who might have received more prior to Louis' death. The Court should proceed on the basis that they all received fair and substantial amounts." Each of David, Ian and Rosemary received amounts from Louis, the Ledir Group and/or the Ledir Trust in the earlier period; there is not, however, any evidence as to the total of those amounts that would allow a conclusion as to whether they were approximately equal or proportionate by any other identified standard. There is evidence, admitted as an admission by Rosemary, that her father gave considerable financial assistance to Ian, David and Rosemary; that she generally received payments from Louis from the Ledir Trust; that she received £200,000 towards her purchase of the London apartment, although the total purchase price of that apartment is not disclosed; and that she received $1 million in 2003-2004, when amounts were also paid to David and Ian (Ex D1, [7]-[8], Ex D3, [8], [91]-[100]). Where the level of benefits received by Rosemary in earlier years was within her knowledge and she did not give evidence about it, I infer that evidence would also not have assisted her in establishing that the distributions made to Ian and David in 2007 were inappropriate. 108In her written submissions in reply, Rosemary refers to David's and Ian's submission that she made no attempt to establish what she received from the family assets and companies over the years and responds that: "This formed no part of the case. It was quite clear that prior to Louis' death, all siblings were treated generously. A precise accounting was quite irrelevant to the proceedings:" In oral submissions, Mr Brender submitted that Rosemary did not "concede" any proposition that she had not received less than David and Ian over the whole of their respective dealings with the Ledir Group, the Ledir Trust and family interests. However, it does not seem to me that the question is whether Rosemary concedes that matter, but whether she has established the case she advances. 109Alternatively, Rosemary submitted that the question whether the distributions were substantively unfair could be determined from 2002 onwards, because Rosemary had rights and expectations as a shareholder at least from the point of the amendments in April 2002. Although I have held above that Rosemary has established an entitlement to two-sevenths or one-third of the surplus assets of the Ledir Group on a winding up, I have not accepted that Comserv as trustee of the Trust was only entitled to make distributions on that basis. 110Rosemary also contends, correctly, that the payments made by Enterprises to Comserv in 2007 reduced its assets. However, Rosemary has not established that the payment of those amounts in 2007 would have prevented the making of further distributions to Comserv, sufficient to fund a later distribution by Comserv in accordance with her claimed entitlements in a winding up, at least absent the various proceedings which followed and the payment of legal costs of David and Ian from the funds of the Ledir Group, a matter which I will address below. David's evidence is that, as at 1 July 2007, following the payments to Ian of $500,000 and $1,500,000 in May and June 2007, and the payment to himself of $2,439,273 on or about 27 June 2007, an amount in excess of $5.2 million was available in Investments' accounts (David 10.6.2013 [9]), although it appears this figure does not take account of tax subsequently payable by Enterprises and Investments in respect of the 2007 transactions. As at 30 June 2007, Investments retained $4,739,283 on deposit, reflecting an opening balance of $9,282,887 less the payment to David of $2,439,273 and the two payments to Ian totalling $2m (CB 216). There should be added to this the value of Adair (held by Pluteus) then estimated as in the order of $3.2 million (CB 199). (I note the correspondence referring to that estimate was not admitted as proof of the asserted fact, but does establish David's undersanding as to that matter.) It does not seem to me that the proposition that the dividends paid in 2007 to Enterprises and Comserv, so as to fund the distributions to David and Ian, were contrary to the interests of the members of Investments or Enterprises as a whole, or even to Rosemary's interests individually, can be established where it is not shown that the payment of those dividends would have prevented the making of a distribution from the trust to Rosemary, at least at that time, to the extent of one-third or two-sevenths of the surplus assets of Enterprises on a winding up. 111Turning now to the alleged breach of s 180 of the Corporations Act in respect of the 2007 payments, I raised a question with the parties as to whether Rosemary's pleading raised an attack on the process by which such payments were made, as distinct from the outcome by which those payments were made to David and Ian to Rosemary's exclusion. Rosemary contended that the pleaded claim extended to both the process for and the outcome of the payments and David and Ian contended that it was limited to, in effect, an attack on the fact of the payments rather than the process by which they were made. It may be that a distinction between the process of the payments and their outcome is not readily drawn, since the two plainly overlap; in any event, it seems to me that the breadth of Rosemary's pleadings, largely unconfined by particulars, meant that both aspects of the claim were open to her. I do not, however, consider that claim is established in respect of the 2007 payments. In my view, the outcome of those payments has not been shown to have contravened that duty, where they placed Comserv in a position to make payments that were not contended to be improper. The process adopted for those payments included obtaining detailed advice from BDO as to their structure and appropriate tax treatment; they were authorised by resolutions of the relevant companies; and they were consistent with the structure of the Ledir Trust which contemplated that benefits could be conferred on family members and with the fact that the family companies and that trust had, for many years, conferred benefits on family members. I do not consider that process gave rise to a contravention of s 180 of the Corporations Act in respect of the 2007 payments. 112It has also not been established that David or Ian did not subjectively consider that making the relevant loans and paying the relevant dividends, so that Comserv could make corresponding loans and distributions to David and Ian, was not in the interests of Investments or Enterprises and a contravention of the duty to act in good faith under s 181 of the Corporations Act is not established on that basis. For the reasons noted above, I do not consider that it has been established that making the relevant loans and paying the relevant dividends could not reasonably have been undertaken so as to give rise to a breach of the proper purposes duty under s 181 of the Corporations Act. In particular, as I noted above, those payments involved making loans and paying dividends to Enterprises and Comserv as trustee of the Trust so as to fund loans and distributions by Comserv as trustee of the Ledir Trust and Rosemary did not seek to establish that the loans and distributions made by Comserv were not properly made. 113Rosemary submits that one cannot break up each element of the loans and payment of dividends by Investments and Enterprises and the loans and payment of distributions by Comserv as trustee of the Trust and consider it in isolation. I accept that one cannot consider each element of the transaction in isolation, without reference to the other elements of the transaction and the overall circumstances. However, whether the making of a loan or payment of a dividend by a particular company is breach of duties by the director of that company must be considered by reference to that company, and unfairness by reference to all the circumstances, including the character of the Trust and the fact that the loans and distributions made by the Trust in 2007 were not impugned. The 2008 payments to Ian or Mandala 114Rosemary pleads a characterisation of the 2008 payments to Ian or Mandala (which fall within the definitions of "Ian Aboud Payments") as distributions from the Ledir Trust, and pleads that this presupposed a similar dividend from Enterprises (5FAS [55A] - [55B]), and alternatively pleads a characterisation of those payments as a payment direct from Investments (5FAS [57A]). Rosemary also pleads that the 2008 payments involve a breach of fiduciary duties (5FAS [64], [65]) a breach of statutory duties (5FAS [65]) and were unauthorised (5FAS [65A]). It is again not necessary to address the alleged breach of fiduciary duties since the only pleaded fiduciary duty in 5FAS [63] has not been established for the reasons noted above. 115In order to determine the claim for breach of ss 180 and 181 of the Corporations Act in respect of the 2008 payments, it is necessary first to determine the character of those payments, whether as a distribution or as a loan or as neither. The proper characterisation of those payments is also relevant to an alternative claim brought by Rosemary (on Investments' behalf) in respect of the 2008 payments to which I will refer below. 116The minutes of a meeting of the directors of Comserv as trustee for the Ledir Trust held on 24 September 2008, attended by David and purportedly by Ethel (by her attorney Ian) record a resolution that an interim distribution of $50,000 be paid to Ian (Matthews 13.11.12 [22.5], CB 300). A cheque was drawn on the account of Investments for that amount, which was deposited into Mandala's account by Ian on 30 September 2008 (CB 300, 301, 303, 305; David 12.11.12 [75]). 117A further amount of $1 million was paid to Ian or Mandala about 23 December 2008. The minutes of a meeting of directors of Comserv as trustee for the Ledir Trust held on 23 December 2008, attended by David and purportedly by Ethel (by her attorney Ian) record a resolution for an interim distribution to be made to Ian of $1 million (Matthews 13.11.12 [22.5], CB 307). The payment of $1 million on or about 24 December 2008 was made by electronic funds transfer from the account of Investments to the account of Mandala. 118The minutes purportedly authorising distributions by Comserv on 24 September 2008 and 23 December 2008 were later prepared by BDO following discussions with David (T238, 259-261). No formal resolutions were passed by Investments or Enterprises to authorise corresponding dividend payments, although it is common ground between the parties that Comserv could not have made such distributions without receiving corresponding dividends from Enterprises. The distributions were purportedly ratified by Comserv on 4 September 2009 (CB 341), following discussion between David and BDO (T239). 119David's evidence in cross-examination was that he thought at the time the payments were a distribution, but they were going to be characterised initially as a loan (T219); he did not turn his mind to the question of payment of tax by Investments or Enterprises (T220) and neither company had paid tax on that dividend because it stands as a loan (T221); and he considered the 2008 payments to be loans to Ian and he had not sought repayment of the $1 million and did not know whether he intended to seek repayment of that loan (T222-223). David accepted a suggestion put in cross-examination (T219) that what probably happened in 2008 was that he said to Ian "You can have the money and the lawyers and accountants can work out how we will characterise it later" David's evidence, under cross examination by Mr Fernon (who appears for Ian), was also that his earlier affidavit evidence that the 2008 payments were distributions to Ian was given on the basis of the resolutions of Comserv to that effect (T238) and there were no other resolutions that he is aware of concerning the payments of $50,000 or $1 million to Ian (T239). 120Ian's evidence is that, in mid 2008, he requested a further $50,000 payment by reason of financial difficulties and David agreed that such a payment should be made (Ian 8.11.12 [120]). Ian's evidence is that he did not notice the entries in Investments' 2009 accounts referring to a loan of $1,050,000 for 2009 and he understood those monies had been paid to him by the Ledir Trust rather than by Investments. His evidence is that he did not know why that amount was reduced in the financial records of Investments to $923,951 in the accounts for 30 June 2010 and that he has no recollection of any conversation in which he agreed to those amounts being recorded as a loan in the accounts of Investments or agreed that they would be repaid by him; that he had received no document recording any terms of the alleged loans; and had received no demand from Investments for repayment of those amounts. Ian's evidence is also that he has no recollection of any conversation in which he agreed that the amounts that he received should be repaid by him (Ian 8.11.12 [166]). 121Ian conceded in cross-examination that the $1 million received in December 2008 would (or should) have been included in his 2009 tax return if it was a dividend and, if franking credits were not available, he would have had to pay tax on the $1 million if it was a dividend (T311). (This concession may have been wrongly given if the payment was properly treated as made to Mandala rather than to Ian personally). Ian also conceded that he had not paid tax on the $1 million in the 2009 tax year because, he claimed, he was under the impression he did not have to. Ian's evidence on cross-examination was also that he does not remember what was said about the character of the $1 million in 2008 and, although his feeling was that it was said to be a distribution, he is not sure (T313). Ian's evidence in cross-examination was also that he did not recall one way or the other whether there were any formal meetings in December 2008 as directors of Investments to declare a dividend to Enterprises or as directors of Enterprises to declare a dividend to Comserv (T314). 122Ian contends that it must follow as a matter of necessary implication from the resolutions purportedly authorising a distribution by Comserv as trustee of the Ledir Trust that there was a corresponding dividend from Investments to Enterprises and from Enterprises to Comserv. Ian also contends that the Court should infer that that there was a meeting of minds of David and Ian, sufficient to give rise to informal resolutions of the directors of Investments and Enterprises to approve such dividends. Ian relied on the proposition that directors could make decisions informally and by a "meeting of the minds": Swiss Screens (Australia) Pty Ltd v Burgess (1987) 11 ACLR 756 at 758; Roden v International Gas Applications (1995) 125 FLR 396; 18 ACSR 454. On the other hand, in Poliwka v Heven Holdings Pty Ltd (1992) 7 ACSR 85 at 90-91, Anderson J noted that, while latitude is given to directors of private companies in relation to the formalities that should attend their corporate activities, a directors' meeting would require at least an intention that an occasion be a directors' meeting and an awareness by the relevant persons that they were concurring in the management of the company's affairs. In my view, the evidence does not establish that David and Ian turned their minds to the question whether there should be a dividend paid by Investments to Enterprises and by Enterprises to Comserv or the amount of such a dividend or any of the associated issues (such as the tax implications of such a dividend) so as to give rise to such a corporate decision and plainly no consensus was reached as to that matter. 123There is also a difficulty with both meetings of directors of Comserv held on 24 September and 23 December 2008, in that Ian is recorded as attending both meetings as Ethel's attorney, whereas a director's responsibilities cannot be discharged by a person acting in that capacity: Mancini v Mancini [1999] NSWSC 799 at [30]-[31]. The meeting of directors was therefore invalid if the quorum for the relevant directors meetings was two directors. The articles of association of Comserv (CB 7) adopted Table A to the Companies Code and did not exclude clause 57 of Table A, which provided that the number of directors is to be determined by the subscribers to the memorandum of association. David and Ian contend that there is no evidence that a minimum number of directors was set for Comserv and David was therefore entitled to act as its sole director at those meetings. I do not accept that submission since, even if no minimum number of directors was set, both David and Ethel were directors of Comserv at the relevant time, so it was not a single director company. Article 73 of Table A, which is also not excluded by the articles, in turn set a quorum of two for a directors meeting which would not be satisfied in respect of the meetings in September and December 2008. Accordingly, I find that those meetings did not validly authorise the payment of the relevant distributions. No application was brought by David or Ian to seek to validate those distributions under s 1322 of the Corporations Act. I will return to a later purported ratification of the distribution by a meeting of the directors of Comserv in September 2009 below. 124There is other evidence that would support a characterisation of the 2008 payments as loans to Ian rather than as distributions from the Trust. The 2009 accounts of Investments (CB 321) record a liability by Ian to Investments of $1,050,000 and the 2010 accounts of Investments (CB 368; Matthews 13.11.12 [22.2]) record that the liability described as "Ian Aboud 2009" has reduced, but a new liability described as "Ian Aboud 2010" is recorded. It appears that these accounts are consistent with what would have occurred had a loan agreement complying with Division 7A of the Income Tax Assessment Act been entered into, with the 2010 amount corresponding to the amount which would have been due for repayment in the 2010 year on that basis. The recording of the payments as loans in the accounts of Investments for FY09 and FY10 significantly postdated the making of the payments, since those accounts were apparently prepared in May and June 2011. Mr Matthews of BDO, the Ledir Group's accounting advisers, accepted in cross-examination that, when BDO was reviewing the 2008 payments of $50,000 and $1 million, after they had occurred, Enterprises had no franking credits and the payments would have been subject to tax in the hands of the recipient of they were a dividend and his understanding was that the payments were a loan (T243). Mr Matthews also accepted that the accounts for the 2009 year recorded loans to Ian of $50,000 and $1 million and that was his view of the correct accounting treatment (T245). Mr Matthews also noted that there were calculations and figures in the accounts consistent with the amount of $1 million being a loan within Division 7A of the Income tax Assessment Act (T245-246). Mr Matthews' evidence was also that Enterprises did not have franking credits so if the money was treated as a distribution it would be fully taxable, and treating it as a loan made in non taxable but created an issue under Division 7A, and he was not aware of any transaction or documents recording a Division 7A loan (T261-262). A Division 7A loan repayment schedule for Ian (Ex P8) calculates the opening balance of $1,050,000 and the minimum payments and principal reductions were the loan to comply with Division 7A. A BDO working paper for Investments in turn also undertakes calculation on the basis of a Div 7A loan for the 2011 year (Ex P9). The weight of Mr Matthews' evidence is reduced by the fact that he had no direct involvement in the preparation of the relevant accounts although he had some responsibility for them (T249-250). 125Rosemary contends that the distribution contemplated by the resolutions purportedly passed by Comserv in September and December 2008 did not occur because Investments did not resolve to pay, and did not pay, the relevant money to Enterprises; Enterprises did not resolve to pay, and did not pay, the money to the Ledir Trust, and ultimately the Ledir Trust did not distribute the money to Ian. It does not seem to me that the 2008 payments by Investments to Ian can properly be characterised as trust distributions from the Ledir Trust to Ian. First, there were no board resolutions by David and Ian as directors of Investments or Enterprises to either pay dividends or make loans by Investments to Enterprises or by Enterprises to Comserv to fund those distributions. Second, the evidence to which I have referred above indicates that David or Ian did not then reach any consensus as to how the payments would be funded by Investments or Enterprises, whether by payment of dividends or inter-company loans or how any tax arising from them would be funded. I have found that informal board decisions to pay dividends by Investments and Enterprises were not established, for the reasons noted above. It does not seem to me that the payment made directly by Investments to Ian or Mandala, in the absence of any applicable board decision by Investments, can take its character from the then resolution by Comserv, which was in any event ineffective for the reasons noted in paragraph 123 above. 126It also does not seem to me that the 2008 payments by Investments to Ian can properly be characterised as a loan from Investments to Ian, whether for the purposes of Division 7A of the Income Tax Assessment Act 1997 (Cth) or otherwise, because David and Ian, as directors of Investments, did not either pass a resolution or reach any consensus to that effect, and the later characterisation of the transaction in that way by Investments' accountants, and in Investments' accounts, does not seem to me to be sufficient to support that characterisation where it has not in fact been adopted by Investments' directors (although I recognise that Ian signed the relevant accounts) and, indeed, Ian continues to reject that characterisation. Any treatment of the 2008 payments as a loan within the meaning of Division 7A of the Income Tax Assessment Act is not supported by contemporaneous transactional documents, including a written loan agreement as required by that Division (T239, 252, 261). Where there was no corporate decision of Investments to make a loan to Ian, whether formally by the board of by a meeting of minds of the directors, including in respect of the approval of Investments' accounts, the description of the payments as loans in Investments' accounts cannot alter the substance of the transaction: Temples Wholesale Flower Supplies Pty Ltd v Commissioner of Taxation (1991) 29 FCR 93. 127David and Ian also rely on a meeting of the directors of Comserv held on 4 September 2009 attended by David and Ian (purportedly in his capacity as a director of Comserv) which ratified the making of various distributions, including the interim distributions of $50,000 paid to Ian on or about 24 September 2008 and $1 million paid to Ian on 23 December 2008. A preliminary issue arises as to whether Ian had been validly appointed as a director of Comserv so as to vote in that resolution. 128Ian's evidence is that his solicitors sent him an email on 1 September 2009 attaching draft ratifying resolutions to be passed by Comserv as well as a consent for him to act as a director of Comserv, that he signed the consent to act as a director on that date in that form and caused his solicitors to send that consent to David's solicitors, and that it was contemplated that David's solicitors would notify Ian's solicitors when he was appointed as a director of Comserv. There is no evidence that he was notified of such an appointment. David's evidence is that, to the best of his recollection, he signed a resolution appointing Ian as a director of Comserv prior to 4 September 2009 which was the date on which Ian and David met at the Guardianship Tribunal and passed the ratification resolution (David 13.6.2013 [3]-[6]). There is contemporary correspondence reporting a statement made by Ian's and David's solicitors to the Guardianship Tribunal in September 2009 that Ian had been appointed as a director of Comserv (although I recognise and proceed on the basis that letter was subject to a limitation under s 136 of the Evidence Act 1995 (Cth) that it was not proof of the disputed facts). 129The minutes of Comserv of 4 September 2009 proceed on the basis that such an appointment had occurred and it would be surprising if David and Ian had proceeded with passing such a resolution, without David first taking the simple step of appointing Ian as a director so that that resolution would have effect. A director of Comserv may appoint a person to fill a casual vacancy or as an addition to the existing directors (Article 3, CB 7) and David had power to make that appointment by that date on the basis that Ethel lacked capacity to act as a director by at least that date (which is consistent with the orders then made by the Guardianship Tribunal) and was automatically removed as a director, leaving David as the only remaining director and entitled to appoint Ian to fill a casual vacancy. On the other hand, the signed resolution for that appointment was not produced in original or copy form; that appointment was not notified to ASIC; and a company search for Comserv as at 8 November 2012 records its current directors as David and Ethel (CB 407); and that record is prima facie evidence of the matters contained in it. 130On balance, although with real hesitation, I consider that the prima facie evidence of the identity of the current directors of Comserv is displaced by the evidence as to Ian's consent and David's recollection that he had appointed Ian as a director of Comserv, notwithstanding that the signed resolution for the appointment was not produced and that appointment was not notified to ASIC when it occurred. No point was taken by Rosemary that such ratification, had it occurred, could not be effective by reason of any issue as to retrospective ratification of the kind noted in NM Superannuation Pty Ltd v Hughes (1992) 27 NSWLR 26; (1992) 7 ACSR 105 and Showa Shoji Australia Pty Ltd v Oceanic Life Limited (1994) 34 NSWLR 548 and, accordingly, it is not necessary for me to consider that question. I therefore proceed on the basis that the payments of $50,000 and $1 million were ratified by the resolutions passed by Comserv in September 2009, at least so far as they had the character of distributions from the Ledir Trust to Ian. However, a ratification by the directors of Comserv of those payments - which were in fact made by Investments, not by Comserv - does not seem to me to permit a payment which was, at the relevant time, neither a dividend nor a loan by Investments to Ian to be later treated as having a different character, or to have any effect on the question whether there was a breach of duty by the directors of Investments or Enterprises in respect of the transaction. 131I turn now to the question whether the 2008 payments amounted to a breach of the pleaded duties under ss 180 and 181 of the Corporations Act. I have held above that Rosemary's pleading of the breach of s 180 of the Corporations Act was sufficiently wide to raise a challenge both to the fact of the payments and the process by which they were made, to the extent that a distinction can be drawn between the two. In submissions in reply, Rosemary attacks the process adopted for the making of the 2008 payments, submitting, inter alia, that no care was taken properly to record the character of the payment. That submission has real force so far as there was an absence of documentation of, or indeed consideration of, the character of the payments made by Investments and (to the extent that Enterprises had a notional involvement in the transaction) Enterprises. In my view, the 2008 payments by Investments to Ian involved a breach by David and Ian of the statutory duty of care under s 180 of the Corporations Act owed by them to Investments, by reason of their failure to give adequate consideration to the nature of the transaction, how any applicable tax was to be paid, or whether the transaction was in the interests of Investments. Even in the context of a family group, a director of Investments who exercised his or her powers and discharged his or her duties with the degree of care and diligence which a reasonable person would exercise in those circumstances would have had to address those matters before authorising the relevant payment by Investments. 132The payment of the amounts to Ian, without proper consideration of the matters noted above, seems to me necessarily to involve a failure to act for proper purposes in contravention of s 181 of the Corporations Act. In particular, David or Ian did not then turn their minds to the interests of Investments or Enterprises as its shareholder. Their evidence goes no further than that Ian asked for or David offered substantial amounts of money to Ian, which were paid by Investments to Ian without a directors' meeting of Investments, further discussion between the directors or any consideration of Investments' interests in respect of whether such a payment should have been made. In my view, David's and Ian's failure to give any real consideration, in their capacity as directors of Investments and Enterprises, to whether to make the 2008 payments was a matter of substance. The fact that the only relevant decision was made in respect of Comserv meant that they did not give separate consideration to the interests of either Investments or Enterprises or their respective shareholders. In my view, it was also not a proper purpose of Investments to confer a substantial gift on Ian, who was not a shareholder, where the relevant payments were neither a dividend by Investments to its shareholder nor a distribution from the Trust or a properly authorised loan to Ian, for the reasons that I have noted above. 133It does not seem to me that the result would differ, where a subjective or an objective test were applied in respect of the proper purposes requirement under s 181 of the Corporations Act. For the reasons noted above, it may have been open to David and Ian to form a view in 2008 that a distribution or further loan could properly have been made by Investments to Enterprises, and by Enterprises to Comserv so as to fund a further distribution or loan from the Trust. Comserv, in its capacity as trustee of the Ledir Trust, would then have had to form a view as to the persons to whom any such distribution or loans should be made and the amount of any such distributions or loans. That did not occur since, whether formally or informally, David or Ian did not in fact give any, or any proper, consideration to the interests of Investments, or Enterprises as its shareholder, in determining whether to make the further payments to Ian or their amount or their basis. 134David contends that the making of the 2008 payments would not then have prevented a further distribution to Rosemary of the amount to which she claims to be entitled on a winding-up. Even if that proposition were established, it does not provide affirmative justification for the conduct of David and Ian as directors of Investments in permitting that payment to be made without any consideration of the matters to which I have referred. 135It seems to me that Rosemary has also established that the relevant payments by Investments to Ian or Mandala were unauthorised, in that there was, for the reasons noted above, no resolution of the directors of Investments authorising them and no meeting of minds of those directors as to the matters which would be necessary to give rise to an informal authorisation of those payments. 136David and Ian rely on a ratification by Enterprises of their actions as directors of Investments, which occurred in the course of the hearing. I do not find it necessary to determine whether that self-interested ratification would be effective in respect of any breach of fiduciary duty since the pleaded fiduciary duty was not established. It does not seem to me that a subsequent ratification would be effective to extinguish an earlier breach of statutory duty: Macleod v R [2003] HCA 24; (2003) 214 CLR 230 at [30]-[34]; Angas Law Services Pty Ltd (in liq) v Carabelas [2005] HCA 23; (2005) 226 CLR 507; (2005) 53 ACSR 208 at [32]; Krecichwost v R [2012] NSWCCA 101; (2012) 88 ACSR 339 at [81]. In particular, where the relevant breach was the payment of a substantial amount of money to Ian, without consideration of the matters noted above, a subsequent ratification does not deprive the earlier payments of their character as payments not made, at the relevant time, for a proper purposes, and that is sufficient to establish the relevant breach. 137Rosemary also pleads (5FAS [67A]) further breaches of directors' equitable, fiduciary and statutory duties if the 2008 payments were made directly to Ian by Investments without passing through Enterprises as dividends paid by it. This characterisation contemplates a direct payment by Ian to Investments without Enterprises' involvement, and is consistent with the findings I have reached above that the 2008 payments were neither a distribution from the Comserv trust nor a loan by Investments to Ian. I have held that that transaction gave rise to a breach of the duty of care and diligence and the proper purposes duty under ss 180 and 181 of the Corporations Act for the reasons noted above. 138Alternatively, Rosemary pleads breaches of directors' equitable, fiduciary and statutory duties if an alleged "recharacterisation" of the Ian Aboud 2008 payments (pleaded in 5FAS [57A]) as loans to Ian by Investments is found to be the true characterisation. This pleading is in turn supported by lengthy particulars. In her written submissions, Rosemary submits that, if the payments made to Ian in 2008 were loans, they were imprudent and not for a proper purpose, as follows: "The Ian Aboud payment, if a loan, was an improvident one and for no purpose of Ledir Investments. (If it was a dividend from Ledir Enterprises, a further breach arises in that there has been a lack of care and diligence of the directors in relation to the taxation liability which will arise in Ledir Enterprises.)" 139This submission relies on the proposition that, Rosemary contends, Ian would not have had sufficient assets to repay the loan. I do not consider that the payments to Ian can properly be characterised as a loan to him. It is not strictly necessary to address the lengthy and somewhat discursive particulars provided to the pleading, since they cannot expand the pleaded allegation. However, I would not have found the suggestion in the particulars that any "subsequent characterisation" of the Ian Abound 2008 payments as loans by Investments was in substance a forgiveness or compromise of a prior breach of fiduciary duties to be established, if the payments were properly characterised as loans. So far as the particulars repeat the allegations in respect of the "scheme", I address those allegations below. 140Rosemary then pleads (5FAS [67B]) that the Ian Aboud 2008 payments were not authorised by Investments, because they were authorised by David and Ian wrongfully acting as directors to Rosemary's exclusion (5FAS [48A]). That claim cannot succeed as pleaded, because I have held that Rosemary ceased to be a director of Investments in December 2006 by the operation of article 64 of its articles of association and Ian was properly appointed as a director of Investments. Lawyers' payments 141Rosemary pleads that the Lawyers Payments (as defined) also involve a breach of fiduciary duties (5FAS [64], [65]) a breach of statutory duties (5FAS [65]) and were unauthorised (5FAS [65A]). In her written submissions, she also submits that: "The Lawyers payments were not for the purposes of the companies. They were for the sectional purposes of David Aboud and Ian Aboud." 142In particular, Rosemary attacks a payment of approximately $44,232 made by Investments to David to reimburse him for an amount previously paid by him to his solicitors (5FAS [51(a)]); two further payments by Investments to David's solicitors (5FAS [51(b)-(c)]); and other payments made to those solicitors and one payment to Ian's solicitors (5FAS [51(i)]). Rosemary alleges that these payments were procured by means of the control that the directors of Enterprises had of other companies in the Ledir Group, that they were not for any purpose or proper purpose of the companies in the Group and that they were for the furtherance of the purposes of Ian and David pleaded at 5FAS [44] and were also within the allegedly oppressive conduct. 143I have referred above to the several proceedings between the parties. Rosemary contends that none of those proceedings were company business and notes that Enterprises and Investments were not party to any of the proceedings. Rosemary contends that those payments support claims for oppression and breach of directors' duty because David and Ian caused Enterprises or Investments to pay their legal fees for those private actions out of company assets. Rosemary also criticises the manner in which copies of invoices were redacted by David and his solicitors when produced. I do not propose to address the latter criticism, which seems to me to be collateral to the substantive issues in the proceedings and a matter that the parties should properly have addressed in the interlocutory stages of the proceedings. 144In his further supplementary affidavit, David acknowledged that $15,274.44 out of the amount of $44,252.18 that was reimbursed to him (5FAS 51(a)) related to legal services provided in relation to the FPA proceeding and indicated that he proposed to reimburse Investments for that amount (David 13.6.2013 [8.1], [11]). David was unable to identify in cross-examination how the amount of $15,274.44 was calculated (T164). David's evidence was that a further amount of $25,161.87 paid in respect of the final bill of four bills comprising the payment made to David's solicitors on 17 April 2007 related to the first Guardianship Tribunal Proceedings and that he also proposed to reimburse Investments for that amount (David 13.6.2013 [[10.1], [11]). It appears those reimbursements have now been made. No such offer is made in respect of those portions of the three bills that did not, on David' evidence, relate to either the FPA proceedings or the Guardianship Tribunal proceedings. 145David initially accepted in cross-examination that it was an "error" for Investments to have reimbursed him for the costs of the FPA proceedings (T165) and that it was also an "error" for Investments to have paid for the costs of the proceedings in the Guardianship Tribunal up to March 2007 of $25,161.87 (T165). David was then unable to identify any relevant distinction between the first and second Guardianship Tribunal proceedings (T166) and he then suggested that he may have been hasty in offering to repay the $25,274.44 (T167) paid by Investments relating to the first Guardianship Tribunal proceedings. David did not accept an obligation to pay back further costs of Guardianship Tribunal proceedings in April 2007 on the basis he had too readily agreed to repay the $25,274.44 (T168) and his evidence was that he would not pay back any more money in relation to further costs from the first Guardianship Tribunal proceedings or the second Guardianship Tribunal proceedings unless ordered to do so by the Court since he had received different advice since he swore his affidavit the previous weekend (T168-169). David's evidence, in answer to a question from the Court, was that his role and Ian's role in respect of the Guardianship Tribunal was a matter relating to the affairs of Investments and Enterprises but Rosemary's role was "one of selfishness" and was not the same as his or his brother's (T232). I do not consider this subjective and self-interested assessment of the merits of the respective parties' positions provides a rational basis to treat some but not all family members' participation in those proceedings as relating to company affairs. 146David also gave further evidence that he would also repay several additional amounts paid by Investments to David's solicitors totalling $6,256 which relate to the Protective List proceedings (David 17.6.2013 [17], [19], [22]). David conceded that he should not have caused Investments to pay for the Protective List proceedings, because it was not company business. However, he could not explain what the difference was between the Protective List proceedings (as to which that concession was made) and the Guardianship Tribunal proceedings (as to which that concession had implicitly been made as to the first proceedings and then withdrawn as noted above) in this respect (T171). He then said he may also have been in error in agreeing to repay the costs referable to the Protective List proceedings (T172). David also identified several other relatively small amounts paid by Investments to his solicitors that he indicated he would reimburse, being an amount of $299.75 relating to his father's estate (David 17.6.2013 [25]), an amount of $201.30 relating to the grant of probate (David 17.6.2013 [29]), an amount of $536.80 relating to a "personal matter" (David 17.6.2013 [44]) and an amount of $201.30 relating to another personal expense (David 17.6.2013 [54)]. David otherwise supports the payment of the other solicitors' Invoices on the basis that they related to the company affairs of the Ledir Group. David had considerable difficulty, in cross-examination, in articulating a coherent position as to the basis on which payments were properly made by Investments in respect of earlier proceedings. For example, he adhered to the view that costs referable to the second Guardianship Tribunal case were properly payable by the companies, but did not articulate any better reason for that position than that he had previously taken that view, and had not been advised otherwise (T175). 147A bill totalling $66,789.45 issued by Ian's solicitors for unsuccessful proceedings brought by Ethel (by Ian, as her tutor) seeking to recover furniture retained by Rosemary from Montoro was also paid by Enterprises or Investments. David's affidavit evidence concerning this invoice is only that, to the best of his recollection, it relates to legal services provided to Ian. Ian accepted in cross-examination that none of the companies within the Ledir Group was party to those proceedings and they were not company business, although contending that they were part of a complex litigation that sought to resolve the issues that the family faced (T320). I do not accept that proceedings brought in Ethel's name against Rosemary in respect of furniture from Montoro would have assisted in a resolution of wider issues, to the extent those wider issues involved Enterprises or Investments. Ian also accepted in cross-examination that he did not consider whether it was a proper exercise of his duty as a director to have Enterprises or Investments pay for the litigation that he commenced as tutor against Rosemary in connection with his mother's furniture (T321). 148David submits, first, that there was no breach of duty in respect of the expenditure of monies by Investments towards his costs of the FPA proceedings and the Guardianship Tribunal proceedings because, in summary, there was a history of use of company funds to pay family-related expenses and Rosemary herself had spent funds on legal expenses in the 12 month period to September 2005. I do not accept this proposition. The fact that Rosemary applied company funds to personal legal expenses may have amounted to a breach of directors' duty on her part, if that was either not properly reflected in a loan account with the relevant company or not authorised by the directors or the body of shareholders, but that would not exclude a corresponding breach by David in taking the same course. 149David submits, second, that the FPA proceedings involved matters relating to the Ledir Group, including an attempt to challenge the 1 April 2002 amendments to Enterprises' constitution as a prescribed transaction. I do not accept that proposition, because the true interests at stake in the FPA proceedings were those of family members; Enterprises itself had, for example, no corporate interest in defending the April 2002 restructuring, if there was a dispute between its shareholders as to its validity; and, in any event, the FPA proceedings primarily involved issues in respect of the New Zealand Trust rather than the April 2002 restructuring. 150David submits, third, that the Guardianship Tribunal proceedings involved matters relating to the guardianship of the sole voting member of Enterprises, Ethel. I also do not accept that proposition, because the fact that proceedings involve a shareholder in a company does not mean that the company itself has an interest in them. While the question of the validity of the power of attorney granted by Ethel to Ian would, no doubt, have practical consequences for the management of Enterprises' affairs, it does not follow that Enterprises itself had an interest in whether one or other of its shareholders prevailed in a challenge to its validity. The fact that Enterprises was directed to produce documents relating to the Ledir Group in the second Guardianship Tribunal proceedings, or that those proceedings might also have indirect implications for the control of the Ledir Group, also does not seem to me to establish that Enterprises had a proper interest in paying the legal costs of one but not both of its shareholders involved in those proceedings. 151It appears that legal costs have also been incurred in respect of questions relating to the distribution of assets of the Ledir Group; notwithstanding the challenge to the propriety of the particular distribution made, it seems to me that those costs are properly incurred by Enterprises, including in respect of any advice obtained as to Enterprises' role in respect of any disposition or transfer of Adair to David. 152Rosemary accepted in opening that any challenge to the costs incurred by Enterprises or Investments may depend on the outcome of the proceedings and David also drew attention to provisions in Enterprises' articles of association that will allow him a right of indemnity against Investments in respect of the costs of these proceedings in certain circumstances. Rosemary accepted, in submissions in reply, that the legitimacy of the payment of the costs in respect of these proceedings will depend upon their outcome and she acknowledged that David may have a claim, under Enterprises' articles of association to indemnity, if judgment is given in his favour. There is at least arguably a basis for Enterprises or Investments to incur costs in defending the oppression proceedings, where relief was sought against it including orders amending its constitution, an order that it be wound up and an order that it indemnify Rosemary in respect of legal costs, and where Enterprises and/or Investments was required to give discovery in the proceedings and was issued several notices to produce in the course of the proceedings, including in the course of the hearing. 153In my view, Rosemary has established a claim for breach of s 181 of the Corporations Act by David and Ian to the extent that Investments and Enterprises made payments to David's solicitors in respect of the two Guardianship Tribunal proceedings and the Protective Division proceedings and to Ian's solicitors on respect of the proceedings seeking to recover furniture at Montoro, other than for legal services provided in respect of a direct involvement in the proceedings such as production of documents on their behalf). The extent of that breach and the amount of any compensation recoverable may ultimately require a detailed scrutiny of particular attendances recorded in the invoices to determine whether or not those attendances related to a direct involvement of the companies in those proceedings. I do not consider it necessary or appropriate for me to undertake a review of individual attendances in those invoices to reach the finding that I have reached above. If a review of invoices or such attendances is necessary for the purposes of relief, than I will, subject to hearing from the parties, refer that question to a referee so that scarce Court time and resources are not diverted to that exercise, particularly where the parties have not led evidence in a form that would assist in its efficient determination. Application of franking credits 154Rosemary also pleads that the application of franking credits to distributions made to David and Ian was a further detriment to Investments and Enterprises and a benefit to them (5FAS [61A] - [61C]). Rosemary clarified that claim in her submissions in reply, with effect that she: "do[es] not claim that using franking credits per se was unfair. The unfairness arises from the extent to which they were appropriated to the dividend payments which ultimately reached Ian and David and which were themselves unfair." 155David agreed in cross-examination that the franking credits he received in 2007 and thereafter were of benefit to him (T215) and that the benefits in the Ledir Group available to be distributed to all the shareholders as at the date he and Ian became directors included both cash and franking credits (T215). He accepted that he received the benefit of franking credits on amounts paid to him as recorded in his 2008, 2009 and 2010 tax returns (T216). Ian also accepted in cross-examination that the franking credits of about $709,000 claimed in his 2008 tax return reduced the tax he would otherwise have to pay and that was a benefit received by reason of decisions he made as a director of the Ledir Group (T310). 156This claim seems to me to stand or fall with the corresponding claims in respect of the payments to which the franking credits related. So far as the 2007 distributions from the Trust were concerned, the relevant franked dividends were paid by Investments to Enterprises and by Enterprises to Comserv as I noted above and Rosemary has not challenged the exercise of Comserv's discretion in respect of the distributions from the Ledir Trust. While David and Ian received a large benefit from franking credits in respect of those payments, Rosemary has not established that the payments, and by extension the franking credits associated with them, were a breach of directors' duties for the reasons noted above. 157It may be that an issue arises in respect of franking credits in respect of the 2008 payments to Ian, given the findings that I have reached above in respect of those payments. I will hear the parties in respect of those payments in respect of the question of relief. Unpleaded claim against Ian for breach of s 180 of the Corporations Act 158In written submissions, Rosemary also sought to develop a claim for breach of s 180 of the Corporations Act against Ian by reason of his lack of active involvement in the affairs of the companies. Ian's evidence was that he relied upon David to seek and obtain the necessary advice as to how assets in the family companies and trusts could be distributed; and that he had little knowledge of the assets of any of the Ledir companies (Ian 8.11.2012 [88]-[89]). Ian also gave evidence that, between the time Ethel came to live with him in September 2006 until she left to move into a nursing home in 2009, he was her full-time carer and he had "little time to think about the business operations of the various Ledir companies" to which he had been appointed as director and, given his lack of prior involvement in those companies and David's long involvement and detailed knowledge of them, he "relied upon and considered it appropriate to rely upon David to arrange for the finalisation of the affairs of those companies and for the ultimate distribution of their assets" (Ian 8.11.2012 [119]). 159In cross-examination, Ian's evidence was that he was not able to be more active as a director because he was Ethel's full-time carer, his business was becoming unworkable, his wife was ill and he had a family to care for, and he also claimed that he was subject to harassment by Rosemary (T296). He acknowledged in evidence that he had left it to David to run the companies after he was appointed as director and was a "passive" director (T296) and had, to the best of his recollection, not done anything else in the affairs of the companies in his capacity as a director in the financial year ended 30 June 2007, other than facilitating the payments made to himself, David, Rosemary and Ethel (T297-298). Ian's evidence was also that he assumed that anything that was done in the name of the companies was done with an appropriate level of care by his brother, lawyers, accountants or other persons responsible (T314). 160It does not seem to me that such an allegation was within Rosemary's pleaded case in 5FAS [65], which was directed to an allegation of improperly authorising certain payments not to an allegation of inactivity as a director of the relevant companies in that or other aspects. There seems to me to be a real prospect that Ian would have conducted his case differently, had this issue been squarely raised by the pleadings, and that the Court should not reach findings against him on this basis where it was not. Claim for unjust enrichment in respect of 2008 payments 161Rosemary brings an alternative claim on behalf of Investments against Ian in respect of the 2008 payments (5FAS [67C]-[67C.11]). Rosemary alleges that, regardless of whether any breaches of duty by Ian and David are established, the amount of $1.05 million is repayable by Ian to Investments on the basis of one or other of three common money counts. In summary, Rosemary pleads (5FAS [67C.1]-[67C.11]) that: * The 2008 payments were not in discharge of any legal obligation by Investments; were not a gift by Investments; were paid at Ian's request; and were paid to Ian or alternatively to Mandala. * Ian has acknowledged that he is liable to repay the 2008 payments to Investments. That allegation is particularised by the accounts of Investments for the years ended 30 June 2009 and 2010 signed by Ian. * It would be unjust if the 2008 payments were not repaid to Investments. * Those payments have not been, or have not fully been, repaid to Investments. * Ian is liable to Investments in the amount of the 2008 payments, or that amount less any repayments that have been made on account of them, as money lent by Investments to Ian, or money paid by it to Mandala at Ian's request, or money had by Ian to Investments' use. 162I have held above that the 2008 payments made by Investments to Ian or Mandala are not properly characterised as either a distribution made by Comserv as trustee of the Ledir Trust to Ian or as loans by Investments to Ian, where no resolution and no consensus to that effect was formed between the directors of Investments. 163In my view, Investments' claim in unjust enrichment in respect of the 2008 payments falls within a well-established class of claims for monies had and received. In Royal Bank of Canada v The King [1913] AC 283 at 296, Viscount Haldane LC observed that: "It is a well-established principle of the English common law that when money has been received by one person which in justice and equity belongs to another, under circumstances which render the receipt of it a receipt by the defendant to the use of the plaintiff, the latter may recover as for money had and received to his use. The principle extends to cases where the money has been paid for a consideration that has failed." A claim for monies had and received is available where a defendant has obtained a benefit at the expense of a plaintiff and a recognised vitiating factor is present: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 378-379; see also the detailed review of the case law by Gummow J in Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 at [62]ff. In particular, a claim for monies had and received may be established in respect of monies paid over without authority, which remain the property of the payer, unless a third party has received the money in good faith and for valuable consideration: Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 at 572. 164The Australian position appears to be that, if a payment is made at a person's request and for his benefit, there is no implied obligation to repay that amount, by contrast with the position in the United Kingdom: Heydon v Perpetual Executors Trustees and Agency Co (WA) Ltd [1930] HCA 26; (1930) 45 CLR 111; Gray v Gray [2004] NSWCA 408; Schmierer v Taouk [2004] NSWSC 345; (2004) 207 ALR 301 at [59]-[60]; Cambridge Electronics v McMaster [2005] NSWSC 198 at [10]. However, where there is no other proper basis for the payment, a claim for restitution may be established where a payment is made by a company to its director or shareholder and no inference of a gift arises. In Schmierer v Taouk above at [59]-[60], White J observed that: "The onus of establishing that all or part of the moneys paid by the company to the defendant was lent to the defendant, or was received by him to the use of the company, lay upon the plaintiffs. That onus is not discharged by mere proof of payment. (Cary v Gerrish (1801) 4 ESP. 9, 170 E.R 624; Aubert v Walsh (1812) 4 Taunt. 294, 128 E.R 342; Welch v Seaborn (1816) 1 Stark 474 , 171 ER 534; Heydon v Perpetual Executors Trustees and Agency Co (WA) Ltd (1930) 45 CLR 111 at 113; Joaquin v Hall [1976] VR 788; Jenkins v Wynen [1992] 1 QdR 40 at 43-44; Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 23 ACSR 647 at 660; Coshott v Sakic (1998) 44 NSWLR 667 at 671-672). However the plaintiff has discharged the onus of showing that the payment was not a gift. ... Where a payment is made at the request of the defendant and for his benefit, even if there is no implied contract of loan, restitution lies where it appears that the plaintiff did not intend to make a gift." 165In Cambridge Electronics v McMaster above at [11], McDougall J referred to that decision and observed that: "... where there is no obvious purpose for a payment made by a company to its director or shareholder, one should not infer that there is a gift. The better inference, in his Honour's view, in those circumstances, is that there was an implied obligation to repay." Similarly, in K. Mason, J.W. Carter & G.J. Tolhurst, Mason & Carter's Restitution Law in Australia, 2nd ed, [841], the authors observe that: "Where the payment is made at the defendant's request, there will usually be a contract. If there is not, restitution lies unless it appears that the plaintiff intended to make a gift." 166I have held above that the 2008 payments were not paid to Ian as a trust distribution by Comserv as trustee of the Ledir Trust to a beneficiary of that trust, or under a formal or informal resolution to make a loan by Investments to Ian. There is no basis to treat those payments as a gift nor did David and Ian seek to characterise them in that manner. Those payments therefore seem to me to fall within a recognised class of claim falling within the descriptive category of "unjust enrichment", as monies received by Ian or Mandala to the use of Investments. I consider that Investments' claim in respect of the 2008 payments is established on that basis. I can see no basis on which a prior demand is necessary for Investments to establish a claim for unjust enrichment on the basis set out above in respect of the 2008 payments. 167In these circumstances, it is not strictly necessary to determine the further question whether a demand for repayment had been made, which would have arisen if the 2008 payments were properly characterised as loans payable on demand. I nonetheless address that question against the contingency that an appellate court were to take a different view from that which I have reached as to the character of the transactions. Ian relies on the absence of such a demand as excluding any current obligation of repayment of the 2008 payments. There is authority that, where a loan is properly characterised as being repayable on demand, the lender may recover that money without making an anterior demand: Ogilvie v Adams [1981] VR 1041 at 1049. However, that proposition at least depends upon the proper characterisation of the loan, as a matter of construction, as payable on demand. The treatment of the loans in the accounts of Investments for the years ended 30 June 2009 as non-current liabilities is inconsistent with such a characterisation. 168Rosemary contends that the claim made in these proceedings constitutes a demand. It may be that the commencement of proceedings by Investments, authorised by its directors, would constitute such a demand. However, I do not consider that a derivative claim, commenced by a single shareholder in Investments' name pursuant to leave granted by the Court, involves any decision by a corporate decision-making body so as to give rise to such a demand. Rosemary, as a former director of the companies, has no authority to make a decision that the loan should be repaid and the Court did not have a statutory or other jurisdiction to make that decision, to the exclusion of the directors' powers, and did not purport to do so in granting leave for the derivative claim to be brought. The leave to bring such proceedings allows Rosemary to conduct proceedings in Investment's name to assert existing rights, rather than bringing new rights into existence. 169Since I have held that Investments' claim for repayment on the 2008 payments is established on the basis of unjust enrichment, a question then arises as to the identity of the party under an obligation to make the relevant repayment. Rosemary alleges that the first payment of $50,000 was made from funds held in the name of Investments on or about 24 September 2007 to Ian (5FAS [51(g)]). Rosemary contends that Ian admits (in Defence [51]) that the payments alleged (in 5FAS [51]) to Ian and Mandala were made and that Ian has admitted that the payment of $50,000 was made to him by Investments on or about 24 September 2007, notwithstanding his later denial of this (Defence [67C.4]). The relevant cheque was drawn on Investments' account in favour of Ian dated 24 September 2008 (CB 301) and banked by Ian into Mandala's account (CB 303, 305). In my view, the minute of Comserv to which I have referred (which purportedly, but invalidly, authorised a distribution to Ian) and the cheque made out in favour of Ian indicate that this payment was made to Ian and that the claim in respect of unjust enrichment is in respect of this payment is established against him, irrespective of where the cheque was banked. 170The payment of $1 million was made on or about 24 December 2008 by electronic funds transfer from Investments' bank account to Mandala's account at David's direction (CB 308). Ian admits (at Defence [51], [67.5]) that this payment was made from Investments to Mandala and he denies that the payment was made to him. Rosemary advances an alternative claim that the payment was made to Mandala at Ian's request. Ian's evidence (Ian 8.11.12 [110]) is that: "Over the years as I ran the resort business, all of my banking went through Mandala's bank account. I did not even think to ask David to arrange the deposit of the money into my personal bank account, because I was so used to dealing with Mandala's bank account which I used for most transactions." A payment by cheque was then made from Mandala's account to Irlange Aboud, Ian's former wife, of $850,000 by cheque dated 27 December 2008 (CB 309). It appears that the financial statements of Mandala for the year ended 30 June 2009 (CB 27) do not record the receipt of the $1,050,000 from Investments or the payment to Irlange Aboud and those amounts are also not disclosed in Mandala's 2009 tax return (CB 328). 171In my view, the claim for unjust enrichment in respect of this payment also lies against Ian in respect of the payment of $1 million made on or about 24 December 2008, although that payment was made to Mandala at his direction. That finding is supported by the minute of Comserv to which I have referred (which purportedly, but invalidly, authorised a distribution to Ian) and the manner in which the earlier payment was made. It does not seem to me to be displaced by the fact that the payment was made into Mandala's account, payment in that manner is consistent with a payment made at Ian's direction. Oppression 172Section 232 of the Corporations Act provides that the Court may make an order under s 233 if: "(a) the conduct of a company's affairs; or (b) an actual or proposed act or omission by or on behalf of a company; or (c) a resolution, or a proposed resolution, of members or a class of members of a company; is either: (d) contrary to the interests of the members as a whole; or (e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity." 173Section 53 of the Corporations Act in turn identifies the "affairs" of a company for the purposes of s 232 as including the "promotion, formation, membership, control, business, trading, transactions and dealings of the body" (s 53(a)), "the internal management and proceedings of the body" (s 53(c)), the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the body or to dispose of, or to exercise control over the disposal of, such shares (s 53(f)) and also "matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the body or are or have been able to control or materially to influence the policy of the body" (s 53(g)). The orders that may be made under s 233 include, relevantly, an order that the company be wound up (s 233(1)(a)) and an order for the purchase of any shares by any member (s 233(1)(d)). 174Rosemary's oppression case was the primary, if not exclusive, focus of Rosemary's oral submissions although she maintained all other claims pleaded and addressed in her written submissions. Rosemary's oppression claim is pleaded as follows: "68. Since December 2006, Ian and David Aboud, have: a. Excluded Rosemary Aboud from the management of Ledir Enterprises and the Ledir Group; b. Failed to hold annual general meetings of Ledir Enterprises; c. Deprived Rosemary Aboud of reasonable information concerning the affairs of Ledir Enterprises; d. Concealed, until required by orders of the Guardianship Tribunal of NSW in 2009 which they opposed, the true state of affairs of Ledir Enterprises and their dealings with the External Assets of the Ledir Group; e. By reason of the Ian Abound Payments and the David Aboud Payments and the Lawyers Payments, substantially depleted the External Assets of the Ledir Group and thereby the value of the assets of Ledir Enterprises." 175That pleading also refers to and incorporates the matters pleaded in 5FAS [70]-[92] and [94], which in turn pleaded an alleged "scheme" and a claim against Mandala to which I will refer below. The cross-reference to these paragraphs in turn incorporates a wide range of other allegations, including the alleged disposition of the External Assets (as defined) of the Ledir Group to David and Ian, the proceeds of which would otherwise be available solely as dividends or distribution of the surplus assets of Enterprises (5FAS [70]-[71]); the use of a power of attorney given by Ethel, Ethel's Voting Power (as defined) and her power to appoint or remove the directors of Comserv (5FAS [73]); and the making of distributions to Ian and David by means of the power of attorney that it is alleged were not in Ethel's interests, were contrary to her interests, were a use of the power of attorney beyond its terms, an abuse of the power of attorney and a fraud on the power of attorney (5FAS [75]). I will address those allegations below in dealing with the alleged "scheme". In her written submissions, Rosemary contends that David's conduct in opening a new bank account in late 2006 (to which I have referred in paragraph 25 above) and Ian's and David's conduct in taking control of the affairs of Enterprises and Invesments in a de facto manner prior to Rosemary's purported removal establishes oppression from October 2006 and that the oppressive conduct on which she relies otherwise commenced in December 2006. 176Rosemary also contends that the Lawyers Payments, or at least that part of them which was devoted to David or Ian's sectional interests such as costs of the FPA proceedings, Guardianship Proceedings and the Protective Division proceedings and acquisition of Adair, and the other payments were contrary to the interests of the members as a whole and within the scope of s 232(d) of the Corporations Act. Rosemary contends that, so far as other payments and actions involve decisions concerning competing interests of the company, the question whether they are in the interests of the members of the company as a whole is determined by whether the power to take such actions was used fairly. 177I should first refer to the genesis of s 232(d) of the Corporations Act. Amendments to s 320 of the Companies (NSW) Code made in 1983 introduced a reference to orders in respect of oppression where the affairs of the company were being conducted in, or an act or omission was, "contrary to the interests of the members as a whole", and s 260 of the Corporations Law continued that reference, which then appeared in the same section as the other bases for relief in oppression. In New South Wales Rugby League Ltd v Wayde (1985) 1 NSWLR 86 at 96, the Court of Appeal noted that that formulation "reflects recognition of a long established principle of company law". The language of the section was amended by the Corporate Law Economic Reform Program Act (Cth) 1999 to separate the concepts which now appear in s 232(d) and (e) respectively. In Turnbull & Ors v NRMA [2004] NSWSC 577;(2004) 50 ACSR 44, Campbell J noted that an action may be "contrary to the interests of the members as a whole" in ways other than by being commercially unfair, and expressed the view that that concept was intended to be an independent alternative to the ground of "being oppressive to, unfairly prejudicial to, or unfairly discriminatory against a member or members in that section". Conduct that is in breach of directors' duties, including in contravention of s 181 of the Corporations Act, may but will not necessarily, amount to oppression on this basis or under s 232(e) of the Corporations Act, to which I will refer below: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [2001] NSWCA 97; (2001) 37 ACSR 672 per Priestley JA at [527]; Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640; (2002) 42 ACSR 534 per Barrett J at [41]; Campbell v Backoffice Investments Pty Ltd [2008] NSWCA 95; (2008) 66 ACSR 359 per Basten JA at [214]; Re Hollen Australia Pty Ltd [2009] VSC 95. 178Rosemary also contends that that the relevant conduct was "oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members" within s 232(e) of the Corporations Act. That paragraph is directed to conduct which involves "commercial unfairness" or a departure from the standards of fair dealing, or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair: Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692 at 704; Wayde v New South Wales Rugby League Ltd [1985] HCA 68; (1985) 180 CLR 459; Dynasty Pty Ltd v Coombs (1995) 59 FCR 122; 138 ALR 64 at 72; Liosatos v Kefalinian Brotherhood "O Kefalos" of NSW [2000] NSWSC 1138. All parties accept that that, in a family situation, fairness must be considered against the background of the fair treatment of the whole body of shareholders, in the light of the history of the company and the family and the purpose for which the company was formed: Thomas v HW Thomas Ltd [1984] 1 NZLR 686; (1984) 2 ACLC 610; McWilliam v LJR McWilliam Estates Pty Ltd (1990) 20 NSWLR 703 at 708; (1990) 2 ACSR 757; Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535; Byrne v AJ Byrne Pty Ltd [2012] NSWSC 667 at [46]. The terms of the companies' constitutions and the Ledir Trust, to which I referred above, are also relevant. 179In Thomas v HW Thomas Ltd above, Richardson J observed (at 618) that "Fairness cannot be assessed in a vacuum or simply from one member's point of view. It will often depend on weighing conflicting interests of different groups in the company. It is a matter of balancing all the interests involved in terms of the policies underlying the companies legislation in general and sec 209 [the NZ provision] in particular; thus to have regard to the principles governing the duties of a director in the conduct of the affairs of a company and the rights and duties of a majority shareholder in relation to the minority; but to recognise that sec. 209 is a remedial provision designed to allow the Court to intervene where there is a visible departure from the standards of fair dealing; and in the light of the history and structure of the particular company and the reasonable expectations of the members to determine whether the detriment occasioned to the complaining member's interests arising from the acts or conduct of the company in that way is justifiable." 180In Wayde v New South Wales Rugby League Ltd above at 472-473, Brennan J noted that the oppression provisions may apply where directors make a decision which is unfair, on an objective test, by the standard of reasonable directors possessed of any special skill, knowledge or acumen possessed by the directors and that: "The Court must determine whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision." 181In Morgan v 45 Flers Avenue Pty Ltd above at 704, Young J formulated this aspect of the test for oppression by reference to the nature of the business carried on by the company and the nature of the relations between its participants and as: "whether objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair." That test adopted was in turn applied in Dynasty Pty Ltd v Coombs above at FCR 130, and, in John J Starr (Real Estate) Pty Ltd v Robert R Andrew (A'Asia) Pty Ltd (1991) 6 ACSR 63 at 66-67, Young J somewhat expanded his statement in Morgan v 45 Flers Avenue Pty Ltd by noting that unfairness may result from conduct which is not of a commercial character. 182In Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd above, Spigelman CJ observed that the statutory formulation of "oppression" confers a wide-ranging remedial jurisdiction on the court and that jurisdiction should not be confined by technical distinctions. His Honour noted that the individual elements of oppression, unfair prejudice and unfair discrimination referred to in the statutory formulation in s 232(e) of the Corporations Act illuminate each other and each reflect the essential criterion of commercial fairness. In Joint v Stephens [2008] VSCA 210; (2008) 26 ACLC 1467 at [134]-[136], the Court of Appeal of the Supreme Court of Victoria observed that the expression "oppressive or unfairly prejudicial or unfairly discriminatory against" was a compound expression, concerned with "commercial unfairness", which was to be assessed in the context of the particular relationship in issue, and would not infrequently involve a balancing exercise between competing considerations. Unfairness is in turn assessed by reference to whether the relevant conduct was so unfair that reasonable directors who considered the matter would not have thought the decision fair and can be established by matters such as wrongful exclusion from participation in a company's management even if the person undertaking that conduct thinks he or she is acting properly: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [176]; Harding Investments Pty Ltd v PMP Shareholdings Pty Ltd (No 2) [2011] FCA 567; (2011) 282 ALR 229 at [10]. 183The principles applicable to a claim for oppression were summarised by Austin J in Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152 at [39], and the Court of Appeal noted the parties did not challenge that summary of the applicable principles in Tomanovic v Global Mortgage Equity Corporation Pty Ltd [2011] NSWCA 104, (2011) 84 ACSR 121 at [140]. His Honour observed that: "(a) consistent with the principle that the purpose of relief is to terminate the effects of oppression, relief will generally be inappropriate as a matter of discretion if there is no continuing oppression: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304, at [182]; [2009] HCA 25; (b) unfairness is assessed by reference to whether "objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair": eg, Campbell v Backoffice Investments Pty Ltd (2008 66 ACSR 359, per Basten JA at [181]; [2008] NSWCA 95; (c) while it is recognised that conduct may be oppressive if inconsistent with the "legitimate expectations" of shareholders, expectations are not immutable. The non-fulfilment of expectations will not establish oppression, if there has been some good reason for the extinguishment of the expectation: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672, at [85], [86], [175]; [2001] NSWCA 97; Nassar v Innovative Precasters Group Pty Ltd (2009) 71 ACSR 343, at [96]; [2009] NSWSC 342 per Barrett J; (d) "it is important when assessing corporate activities to see if there has been oppression that judges do not remain in their ivory tower": Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1988) 28 ACSR 688, Young J at 739; [1998] NSWSC 413; (e) a particular matter which will be taken in account in assessing the gravity of any allegation of oppression, is the extent to which the minority shareholder has "baited" the majority shareholder to act in an oppressive manner: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1988) 28 ACSR 688, at 741; [1998] NSWSC 413 ..." 184I have also borne in mind the observation in Tomanovic v Global Mortgage Equity Corporation Pty Ltd above that each case has to be considered on its own facts and circumstances, and by reference to the conduct as a whole; and that, as French CJ noted in Campbell v Backoffice Investments Pty Ltd above at [72], the language and history of the sections indicate that they should be read broadly and the imposition of judge-made limitations on their scope should be approached with caution. I will address each of the matters on which Rosemary relies separately and will then assess their collective impact. Exclusion from management 185Exclusion from management can support a claim for oppression, at least where there is an expectation of participation in management, and that principle has its origin, and is most obvious application, in respect of companies that are, in effect, incorporated partnerships or quasi-partnerships: Ebrahimi v Westbourne Galleries Ltd [1973] AC 360; [1973] 2 All ER 492, Re A Company (No 00709 of 1992) [1997] 2 BCLC 739; O'Neill v Phillips [1999] 2 All ER 961 and Mopeke v Airport Fine Foods [2007] NSWSC 153; (2007) 61 ACSR 395. at [40]ff; Campbell v Backoffice Investments Pty Ltd above. Relevant factors to whether such an expectation exists include the company's constitution and, if it does not support the claimed expectation, the understandings of the parties on entry into the corporate relationship; and the impact on the party claiming to be oppressed. However, as Spigelman CJ observed on appeal in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd above at [61], one cannot infer a right to have a status quo continue merely from the fact that it is the status quo, and something more is needed to establish a right or expectation that it would continue, usually an agreement or understanding between the parties or an expectation induced by the conduct of the business. Exclusion from management will also not necessarily amount to oppression where the differences between the parties are such that participation by a shareholder in management is no longer possible: Nasser v Innovative Precast Group Pty Ltd [2009] NSWSC 342; (2009) 71 ACSR 343 at [96], [117]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (Court of Appeal) above at [90]. 186It is, of course, plain that David and Ian initiated and implemented the removal of Rosemary as a director of Enterprises and other companies within the Ledir Group, although that removal was effected by the exercise of Ethel's voting power in general meeting of Enterprises and I have found above that Ethel at least did not object to it. As I noted above, the steps taken to remove Rosemary as a director of Enterprises ultimately had little (if any) practical impact because she retired from office as a director of Enterprises (although not other companies within the Ledir Group) at the general meeting held in December 2006, by operation of article 64 of Enterprises' articles of association (CB 2), and was not re-elected as a director. While this matter is not a complete answer to a claim in oppression, it is relevant to the assessment of the significance of the relevant actions. David also acknowledged in cross-examination that the transfer of funds to the new account at a different bank (to which I referred in paragraph 25 above) gave him complete control of the cash resources of Investments to the exclusion of Rosemary, although rightly pointing out that Rosemary had previously been in the corresponding position (T224). 187In my view, the evidence did not establish an understanding or basis for an expectation that Rosemary would necessarily remain as a director of Enterprises or the other companies within the Ledir Group. Enterprises was established by Louis, and there is no evidence for any understanding that any of David, Ian or Louis would be its directors; and the company was not a quasi-partnership, at least so far as David, Ian and Rosemary are concerned, where Louis exercised a dominant role prior to his death. Rosemary was previously a director of Enterprises, and she had been involved in maintaining company records and some dealings with the companies' accountants, because Louis appointed her to that position and requested her to take that role, but that was no more than what Spigelman CJ described as the "status quo". Enterprises' articles of association did not reflect any right of Rosemary or any other member of the family to continue as a director. To the contrary, the provision for retirement of directors in the Company's articles provided for her (and other directors) to cease to be a director at a general meeting at which she was or they were not re-appointed. 188The emergence of irreconcilable differences may also cause the Court to conclude that an understanding or expectation as to participation in management should cease, in a manner not entitling the person excluded from such participation to relief under the statutory provisions, including where the person excluded is responsible for the breakdown in the relationship: Fexuto v Bosnjak at [90] and the authorities there referred to. In this case, it could not be said that Rosemary was blameless in respect of the differences that had arisen between the parties, although it is plain that at least Ian also contributed to those differences. 189Rosemary's removal as a director of Enterprises was made in general meeting of that company, attended by Ethel, at which Ian exercised Ethel's power of attorney. I have held above that Ethel had the necessary voting power to pass that resolution, at least by reason of an estoppel preventing Enterprises from denying her voting rights. Rosemary initially did not seek to establish that Ethel lacked capacity to make that decision at that time; so far as she later sought to advance submissions raising questions of capacity in closing submissions, the evidence is not sufficient (as she had conceded in opening) to support a finding of lack of capacity at that time, although it is clear that some time thereafter Ethel's capacity deteriorated. The resolution to remove Rosemary as a director was passed not long after, on the uncontested evidence, Rosemary had accused Ethel of being a liar and Ethel had left her home at Montoro in the circumstances to which I referred above. Objectively, it would not have been unfair or unreasonable for Ethel to have voted for Rosemary's removal as a director of Enterprises and the other companies in the Ledir Group in those circumstances. There is also uncontested evidence that, while Rosemary was a director of Enterprises, she took the view that the Company's accountants, BDO, had no right to speak to David (who was also a director) about Enterprises' affairs, when BDO sought David's assistance in providing material to complete the Company's accounts. There was, in my view, no justification for that view. 190Rosemary, on or her own or Ethel's behalf, had previously paid personal expenditures from Investments' accounts. The amounts involved were not trivial, amounting to household expenses of $33,119, including legal expenses of $7,274, and "personal" expenses (which are not further identified) of $81,286 over a 10 month period, and annual expenses of $114,405 (CB 256, p1625). Ethel's affidavit filed in the FPA proceedings also refers to an amount of personal expenses of $103,472 paid from Investments included an amount of $29,460 for legal fees payable in respect of those proceedings (CB 66). I accept that the payment of personal expenses by Investments may be legitimate if it were reflected in Ethel's or Rosemary's loan account, with the significant qualification that the payment of such expenses must also be properly authorised. Conversely, in Shum Yip Properties Development Pty Ltd v Chatswood Investment and Development Co Pty Ltd [2002] NSWSC 13; (2006) 166 FLR 451; (2002) 40 ACSR 619 at [172], Austin J observed that a director was not entitled to charge private expenses to a company's account simply because those expenses were debited to a loan account with the company and that unauthorised use of the company's funds to pay personal expenses was a misappropriation of the company's property even if a director undertook an obligation to reimburse the company. There is uncontested evidence that Rosemary responded to David's request that she should not use company cheques for personal expenses, at least without his consent, in terms that: Rosemary: "I don't see why I should have to come you for every fucking cent I spend". There is also evidence that David sought to initiate a discussion with Rosemary about reinstating his dividends, which had previously ceased in the circumstances noted above, and Rosemary responded "don't be ridiculous" and left the room. I infer that, where Rosemary did not give evidence, her evidence would not have assisted her in respect of these matters. 191In my view, Rosemary's refusal to acknowledge David's role as a director and his concern about the use of company funds for personal expenses and her unreasoned and unequivocal refusal to discuss or consider the reinstatement of dividends which had been authorised by the earlier resolution of Enterprises passed in April 2002 would also indicate that that the exercise of Ethel's voting power to remove her as a director of Enterprises would not be objectively unfair or unreasonable. More generally, the breakdown of the relationship between at least Rosemary and David also meant that the exercise of Ethel's voting power to remove either one or both of them as a director of Enterprises would not be unfair or unreasonable. Conversely, the fact that both David and Rosemary had both previously been directors of Enterprises did not mean (as Rosemary's position implies) that it would be oppressive for Ethel to exercise her voting power to remove either of them and that she was bound to allow a position where the directors would not deal with each other in a constructive (or, on David's uncontested evidence, a civil) manner to continue. 192David and Ian also sought to justify the removal of Rosemary as a director of Enterprises on the basis of difficulties with her dealings with company records and other matters. David and Ian relied on Rosemary's application of company funds for personal expenditures. On the other hand, Rosemary points in submissions to a historical pattern of some personal expenses having been met by the Company while it was under Louis' management. The particular matters on which David and Ian relied were attacked by Rosemary's Counsel in submissions and were the subject of documentary evidence. However, Rosemary did not give evidence to address the wider belief expressed by David that she was not properly handling the Group's day-to-day affairs and was not properly maintaining the Group's records, and I infer that her evidence in that regard would not have assisted her. 193Accordingly, I do not consider that Rosemary's removal from management supports the oppression claim. Provision of information and absence of general meetings 194Denial of access to information or a repeated or persistent failure to hold meetings required under the Corporations Act or a company's constitution can also constitute oppression in an appropriate case: Re Back 2 Bay 6 Pty Ltd (1994) 12 ACSR 614; Shum Yip Properties Development Ltd v Chatswood Investment and Development Co Pty Ltd above at [193], [205]. Rosemary complains that the information provided to her since 2006 has largely resulted from production of documents in compulsory court procedures (CB 314, 334). David acknowledged in cross-examination that, after he and Ian removed company records from Montoro in late September 2006, he kept control of all the company records to the exclusion of Rosemary and that he gave Rosemary no information between that day and when she was removed as a director on 29 December 2006 (T177). Ian's evidence in cross-examination was that, so far as he knows, David kept control of those records and that he was not aware of any information given to Rosemary by himself or David between the removal of the documents and 29 December (T 286-287). However, David's evidence is that he instructed BDO, some time after 2007, to provide Rosemary with the documents to which she was entitled (David 12.11.2012 [67]). David accepted in cross-examination that, after Rosemary was removed as a director, any information about the company's affairs that David gave her was provided formally to her or through advisors (T177). 195After Rosemary ceased to be a director of Enterprises in December 2006 - whether by retirement under article 64 of its articles of association or removal - her rights to access to information were those of a shareholder in Enterprises rather than a director. I can see no basis for criticism of the provision of information by formal means given the breakdown in the parties' relationship and the obvious difficulty with personal interactions between them, which is plain from the terms of at least the correspondence sent by Rosemary and Ian that is in evidence in the proceedings. I accept, as David contends, that the extent of information provided to Rosemary concerning Enterprises' affairs must be considered by reference to her statutory rights as a member to information, including her right to apply to the Court under s 247A of the Corporations Act to inspect Enterprises' books. Nonetheless, it seems to me that the absence of provision of information to a shareholder is of greater significance in a closely held company than, for example, in a public company with numerous shareholders. 196It appears that Rosemary was at least provided with financial statements and taxation documents for Investments, Enterprises and Ledir Trust from time to time (for example, CB 37-CB 42) and that the Ledir Group's accountants, BDO, also provided information to Rosemary and Ethel in respect of the FPA proceedings. Rosemary seeks to have the Court find that the information provided to her was insufficient, by scrutiny of a bundle of that information produced on notice to produce by the Defendants. I am not prepared to reach that finding on that basis, which would require me to speculate as to which information Rosemary required and for what purpose, whether that information is contained in that bundle, and whether the information provided was inadequate on that basis, without any evidence of Rosemary as to any of those matters. 197However, it is also clear that David and Ian were less than forthcoming as to the fact of and the circumstances surrounding the payments made in 2007 and 2008. David acknowledged in cross-examination that he did not tell Rosemary of the decision to reinstate his dividends at $9,000 a month between late 2006 and mid-2007 and also did not tell Rosemary of the distribution made to him in June 2007 or the payments to Ian or Mandala at about the same time (T185-186). David was also not forthcoming in responding to a concern expressed by Rosemary in earlier proceedings that he or Ian had been able to access funds of companies within the Ledir Group, in stating that: "[s]hareholders and entitlements of the companies have not changed or been affected in any way as a result of the change in directorship". 198David also accepted in cross-examination that no notices of general meetings have been sent to Rosemary since December 2006 (T188) and there is no evidence that such meetings were held. The absence of formal meetings within a family company does not necessarily amount to oppression. In the period prior to Louis' death, it appears that Louis dominated the Ledir Group's affairs and meetings were either not held, or were only held for formal purposes. However, it seems to me that there was greater need for such meetings once informal relationships between the shareholders had deteriorated, Rosemary had ceased to be a director of Enterprises, particularly given the limits to the information she obtained by other means. Such meetings would provide a proper avenue for Rosemary to be informed of Enterprises' affairs, and to ask questions or raise concerns, notwithstanding that she did not have a vote at a general meeting, and notwithstanding that s 249D of the Corporations Act would not permit her unilaterally to call that meeting because she held no voting shares. 199I do not consider that the lack of transparency in David's and Ian's dealings with Rosemary and the absence of general meetings are consistent with commercial fairness in the context of a family company plainly set up as part of a structure intended to benefit all of Louis' children including Rosemary. This matter supports the oppression claim. The 2007 and 2008 payments and the Lawyers Payments 200David submits that the payments to Ian and David were not part of the conduct of the affairs of Investments or Enterprises as defined in s 53 of the Corporations Act and the Court's jurisdiction to make orders under ss 232-233 of the Corporations Act is not established unless any oppressive or unfair conduct occurred in the conduct of the relevant company's affairs. On the other hand, Rosemary draws attention to the decision in Re Norvabron Pty Ltd (No 2) (1986) 11 ACLR 279, 5 ACLC 184. In that case, complaint was made as to the conduct of the affairs of a wholly-owned subsidiary of Norvabron. Derrington J observed that: "It has been argued that this conduct upon which the application relies is limited to the affairs of [the subsidiary], whereas the application is necessarily directed at Norvabron, and the suggestion is that the directors of Norvabron have not been shown to be at fault in the affairs of that company in the same way as they were in respect of [the subsidiary]. However, such an approach is artificial in the extreme. The technical answer is that the directors of Norvabron knew very well what was happening in respect of [the subsidiary] because they were the persons involved." 201Similarly, in Re Dernacourt Investments Pty Ltd (1990) 20 NSWLR 588 at 605; (1990) ACSR 553, Powell J observed that: "The words 'affairs of the company' are extremely wide and should be construed liberally: (a) in determining the ambit of the 'affairs' of a parent company for the purposes of s320, the court looks at the business realities of a situation and does not confine them to a narrow legalistic view; (b) 'affairs' of a company encompass all matters which may come before its board for consideration; (c) conduct of the 'affairs' of a parent company includes refraining from procuring a subsidiary to do something or condoning by inaction an act of a subsidiary, particularly when the directors of the parent and the subsidiary are the same." 202The proposition that a company's affairs extend to the affairs of a wholly owned and controlled subsidiary was accepted by Brereton J in IceTV Pty Ltd v Ross & Ors [2008] NSWSC 1321 at [13]. I will assume, although it does not seem to me necessary to decide for the purposes of this case, that that proposition can be applied to Investments where it was not strictly a wholly-owned subsidiary of Enterprises, but Enterprises held both of its ordinary shares and all but one of the special shares on issue. 203The case law to which Rosemary refers does not provide a complete answer to David's submission that the payments were not within the affairs of Enterprises so far as, as I have held above, the 2007 payments were distributions made by Comserv as trustee of the Ledir Trust. Although Comserv plainly played a role in the distribution of assets to family members, it was not a related company of Enterprises or Investments; Rosemary acknowledges that, since Louis' death, Ethel has held all the issued shares in Comserv (5FAS [21]). I do not consider that the affairs of Comserv were affairs of Enterprises, for the purposes of the oppression remedy. However, I accept Rosemary's submission that, as I have noted above, the payment of dividends and making of loans by Investments (which was a subsidiary of Enterprises) and Enterprises were plainly part of a connected series of actions to bring about the distributions from the Trust. I therefore consider that the distributions from the Ledir Trust in 2007 must be taken into account in determining whether the conduct in Investments and Enterprises was oppressive, although those distributions were not themselves part of the affairs of Enterprises. 204I have referred above to the circumstances surrounding the 2007 payments and subsequent monthly dividend payments to David. David and Ian respond that Rosemary never asked for the amount paid to her to be increased; I do not accept that this is a complete response to the differential treatment of David and Rosemary, since any decision whether to reverse the view previously taken by Louis needed at least to have regard to Rosemary's interests as a shareholder in Enterprises and a discretionary beneficiary in the Trust. 205Rosemary's pleaded case is that the 2007 (and 2008) payments were oppressive because they substantially depleted the External Assets (as defined) of the Ledir Group and Enterprises' assets. Rosemary contends, and it is obviously the fact, that the payments made to David and Ian in 2007, the payments made to Ian or Mandala in 2008 and the Lawyers Payments depleted the assets of the Ledir Group and the value of its assets of Enterprises. In oral submissions, Mr Brender contended that the distributions to David and Ian involved, in effect, a de facto winding up strategy that did not give Rosemary her entitlements on a winding up. 206I cannot accept that oppression is established merely because the 2007 payments reduced the assets of the Ledir Group. As I noted above, the structure established by Louis contemplated that distributions from the Trust could be made to benefit family members, necessarily reducing Enterprises' and the Ledir Group's assets. I accept that the distributions were steps that could logically have taken place anterior to a winding up of the Company and this was contemplated by BDO's advice as to the means by which a distribution of the Group's assets could be affected. It does not follow that the 2007 distributions from the Ledir Trust could properly be described as, in substance, themselves amounting to a winding up, given the extent of the assets remaining in the Group after.they had occurred. 207I do consider that the 2008 payments to Ian support a claim for oppression, given the failure of David and Ian to have proper regard to the nature of the payments or the interests of Investments or its members at the time they were made, to which I referred in holding that those payments amounted to a breach of ss 180 and 181 of the Corporations Act on the part of David and Ian. It also seems to me that a narrower finding of oppression would be supported by the fact that David chose to reverse the position that distributions had not been made to David at the rate specified in the April 2002 resolution without making any similar change in respect of Rosemary. That matter was squarely in issue in the proceedings, was addressed by the evidence and I consider that I can properly have regard to it in determining that claim. 208I have also considered whether oppression could be established by the fact that the dividends and loans made by Investments and Enterprises in 2007 (and 2008) and consequent distributions from the Ledir Trust were not consistent with Louis' intention held up to the point of his death further to benefit his children including Rosemary (which appears to have been consistent, although the intended proportions changed from time as I noted above). Although the oppression case pleaded in 5FAS [68] does not plead the relevant conduct of David and Ian as acting inconsistently with Louis' intentions, those intentions were emphasised by Mr Brender in his opening and have received considerable attention in evidence. I have concluded that I cannot find oppression to be established on that basis in respect of the 2007 payments, because any inconsistency with Louis' intentions arises at the point at which distributions were made by Comserv as trustee of the Ledir Trust and, as I noted above, the exercise of Comserv's discretion was not attacked by Rosemary or shown to be unjustified on the evidence. It is not necessary to address this matter in respect of the 2008 payments, given that I have already found those payments give rise to oppression on other grounds. 209I also raised with the parties, in oral submissions, whether the dividends and loans made by Investments and Enterprises in 2007 and 2008 could support a claim for oppression where they (and distributions funded from them) were not followed through with any distribution to Rosemary beyond a monthly $4000 distribution, notwithstanding David's and Ian's expressed intent at the relevant time (frequently emphasised in their affidavit evidence and cross-examination, although not implemented) to bring about a further distribution to Rosemary. Under cross-examination, Ian repeatedly pointed to a wish to obtain an equitable settlement in respect of the family assets (T278, 283-284, 288, 305); this evidence faces the difficulty that neither David nor Ian took any active step in respect of paying distributions to Rosemary at the time they were paid to David and Ian. In submissions, Mr Zahra, who appeared for David, responded to a rhetorical question raised in Rosemary's submissions, why David and Ian did not pay Rosemary the amount which would have been available following the 2007 distributions to them by submitting that, in effect, Rosemary was not interested in the wider resolution of the dispute or in compromise and had not accepted the suggestion of a larger amount in an earlier proposal put by David's solicitors (to which I will refer below) and that Rosemary have would have use the money as a "fighting fund". I do not accept that these matters provide a reason why David and Ian could not, if they wished, have made such a distribution or an offer of such a distribution to Rosemary. However, I have concluded that I cannot reach a finding of oppression on this basis, because an oppression case on that basis was not pleaded and David and Ian might well have led further evidence or conducted their case differently had a case of that kind been advanced. 210In written submissions, Rosemary also complains that David received the benefit of interest-free loans made to Pluteus, involving a loan of $100,000 in 2008, $200,000 in 2009 and $100,000 in each of 2010 and 2011. Rosemary conceded, in submissions, that this matter was not pleaded although there was some reference to Adair in David's evidence and he was cross-examined as to this matter. I do not consider that I should have regard to this matter where it was not raised by an already very complex pleading. In any event, I do not consider that oppression would have been established on this basis, since the evidence is not sufficient to demonstrate that those loans were not commercially justifiable in preserving Enterprises' asset in its shares in Pluteus and its indirect interest in "Adair". 211The making of the Lawyers' Payments at least in respect of the FPA proceedings, the Guardianship proceedings and the furniture proceedings, and the failure to make any real effort at the time those payments were made to segregate payments for the benefit of the companies and payments for the benefit of David and Ian, also indicates that David and Ian had difficulty in distinguishing Enterprises' interests from their own, so far as corporate expenditures are concerned. I have had regard, in determining the oppression claim in respect of these expenses, to the fact that both Louis and Rosemary appear to have previously authorised the payment of legal expenses, including, in Rosemary's case, for her or Ethel's personal benefit, from Investments. David and Ian contend that the same principles must apply to both; while that may be correct, the payments by David and Ian were substantial in quantum, and I do not consider the fact that Louis and Rosemary may have applied corporate assets for personal purposes provides justification for Louis and Ian to do so, particularly where there was then and is now no consensus of shareholders supporting that course. 212The payment of David's and Ian's legal costs in these proceedings would also be capable of constituting oppression, if it is ultimately established that it went beyond protecting the company's discrete interests so as to advance David's interests as a shareholder in Enterprises and David and Ian's interest as directors, and if David were not otherwise entitled to payment of those costs in the exercise of a right of indemnity under Enterprises' articles of association. The balance of authorities indicate that it is not necessarily improper or inappropriate for a company to incur legal costs in defending an oppression suit, but it may be oppressive for it do so where its defence goes beyond merely protecting its discrete interests so as to advance the majority's interests, to have their legal work done at the Company's expense: Re DG Brims & Sons Pty Ltd [1995] QSC 53; (1995) 16 ACSR 559; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413; (1998) 28 ACSR 688 at 732-734 (Young J); Mopeke v Airport Fine Foods Pty Ltd above at [27]. That question cannot be determined now and may need to be addressed at the relief stage for the reasons noted in paragraph 149 above. Discretionary factors 213David and Ian contend that there is a discretionary basis for declining relief to Rosemary, arising out of her conduct in respect of the FPA proceedings, her expressed intent to achieve a result of "zip for Ian" in those proceedings, her failure to accept or take forward a resolution of the FPA proceedings and wider disputes proposed by David's solicitors in May 2006 and, on their case, the fact that her conduct "baited" David and Ian and brought about the matters on which she relies. 214In Morgan v 45 Flers Avenue Pty Ltd above at 706, 708, Young J expressed his agreement with the approach adopted in Re London School of Electronics Ltd [1985] 3 WLR 474 at 482, that conduct of the applicant in an oppression case may either render the conduct by the other party not unfair or may affect the relief which the Court considers should be granted, but also observed there is no overriding requirement in such a case that the plaintiff should come to the Court with clean hands. At first instance in Fexuto v Bosnjak Holdings (1998) 28 ACSR 688 at 741, Young J observed that: "One particular matter that judges take into consideration in this type of case is that the minority will often bait the majority to act in an apparently oppressive manner. This is done so that the minority can free their capital from a venture in which it is otherwise locked away. When this occurs, and there is a reaction from the majority, the Court both notes what happened and the reason for it happening". His Honour also noted that, although there was no now no overriding requirement of "clean hands" in order to obtain relief in the oppression, the court needed to be in mind the principle of proportionality in granting relief in oppression and importantly, that "[t]he majority must respect the rights of the minority no matter how difficult or trying they might consider that to be" and that the question was whether the majority's conduct "does step over the mark". 215In Tomanovic v Argyle HQ Pty Ltd above at [140], Austin J referred to that decision and observed that: "a particular matter which will be taken into account in assessing the gravity of any allegation of oppression, is the extent to which the minority shareholder has 'baited' the majority shareholder to act in an oppressive manner." His Honour's observation, consistent with Fexuto, treats that matter as a factual circumstance relevant to the exercise of the court's discretion. 216So far as David and Ian rely on Rosemary's role in the FPA proceedings, the findings that I have made above indicate that Rosemary at least had a substantial role in respect of those proceedings. It would, in the absence of Rosemary's evidence, be open to the court more readily to draw an inference that she acted in her own interests, rather than in Ethel's interests in that regard; however, the principle in Jones v Dunkel does not require the court to draw such an inference, and I do not consider it appropriate to do so, where that finding is a relatively serious one and it seems to me not to be necessary to a determination of the proceedings for the reasons which I will note below. 217A file note of a conversation between Rosemary and the solicitor who later acted for Ethel in the FPA proceedings (CB 256, p 1592) records Rosemary's position that there is "no issue about mounting a challenge vis a vis family rupture". Mr Brender contended that that note should be read as indicating that Rosemary did not expect or intend the commencement of the FPA proceedings to cause a family rupture. That is one possible reading of that file note; another is that Rosemary was indifferent to whether the FPA proceedings had that result, so there was no issue about commencing them. Rosemary contends, and I have not neglected, that another file note (CB 256, p 1643) records that Ethel and Rosemary wanted to proceed with filing and serving the FPA proceedings "to try and bring parties to the table to settle" and the focus of those proceedings would be on the New Zealand Trust. I accept, as Rosemary contends, that that statement does not suggest that Rosemary had a positive preference for litigation over a settlement of the FPA proceedings consistent with her or Ethel's objectives. 218Ian contends, and I accept, that Rosemary's expression of an attitude that there should be "zip for Ian" was contrary to the way in which the family affairs were conducted for the benefit of all of the children, and it was also contrary to the views expressed by Louis late in his life, to which I have referred in paragraph 99. I accept that the natural outcome of the FPA proceedings (if successful) would have been that Ethel, and Rosemary as the then beneficiary of her will, would have benefited from the New Zealand trust either exclusively or to a greater extent, and the distributions which would have been available to Ian (who was not a shareholder in Enterprises) or other family members from the New Zealand trust would have been reduced. Rosemary submits, in reply, Louis' clear intention in relation to Ian, the Ledir Group and the Ledir Trust was that Ian should receive nothing further from it. Ian submits, and I accept, that that proposition is inconsistent with his being a discretionary beneficiary of the Ledir Trust, and it is also inconsistent with Louis' expressed intentions to which I referred in paragraph 99 above. 219The attempts made by the parties to bring about a resolution of matters may also be relevant in an oppression claim, and the parties devoted considerable attention to this matter. Ethel's solicitors in the FPA proceedings initially suggested mediation by letters to David and Ian; that suggestion was rejected by David's solicitors on the basis that that there were insufficient particulars of the claim and the evidence had not yet been filed (CB 59-61). It appears there was a discussion between the solicitors acting for Ethel in the FPA proceedings and Rosemary, on 15 May 2006, as to a possible approach to David from Ethel and Rosemary in respect of a settlement of those proceedings, although it appears this was a suggestion made by the solicitor which Rosemary merely indicated that she would consider (CB 256, p 1661). 220David relies on a "without prejudice" letter dated 22 May 2006 (admitted without objection) sent by his solicitors to the solicitors who were acting for Ethel in the FPA proceedings (although, as I noted above, it appears they were substantially taking their instructions from Rosemary, whether acting on her own or Ethel's behalf). That letter put forward a proposal to resolve the disputes and distribute assets of the Ledir Group, the Australian and New Zealand trusts and family assets, including a suggestion that Ethel change her will to benefit Ian's children, David retain Adair and that the assets be divided between David in the amount of $8 million, Rosemary in the amount of $6 million and Ian in the amount of $6 million, and that Rosemary and David lend $750,000.00 to Ethel (CB 69). That letter also proposed that: "... the wealth of the Ledir Group and/or the Ledir Trust be fully distributed after the sale of the shares in GPL and of the share portfolio and all assets in the following ratio: 2/3 to David Aboud and 1/3 to Rosemary Aboud. This is consistent with the current shareholding in the Ledir Group." Mr Brender submits, and I accept, there is by no means clear that the reference in that letter to Rosemary receiving $6 million from a distribution of a third interest of the Australian group was correct. Nonetheless, I accept that, as David contends, the letter involved a genuine attempt to resolve the range of disputes as to the family assets. 221Rosemary contends that, even if that letter was directed to Rosemary (which she does not accept), it was not an offer, its implementation would have required Ethel to change her will and the New Zealand trustee to exercise discretion in the manner contemplated by it, and the offer was not renewed after the FPA proceedings were discontinued. The submission that the letter was not an offer capable of acceptance is plainly correct, but, as David submits, the likely complexity of any resolution of the parties' differences meant that it was likely to be necessary to commence with a proposal in principle and then develop the detail of its implementation. The fact that the letter contemplated Ethel changing her will and the exercise of discretion of the New Zealand trustee meant that it could not be implemented without Ethel's and the trustee's cooperation, but that that does not indicate that it was incapable of implementation if such cooperation was obtained. There is greater force in Rosemary's submission that David and Ian did not pursue this offer once they had obtained control of Enterprises, although I will refer below to another offer made by them and a proposal made by Rosemary at a later stage. 222By a file note dated 29 June 2006 (CB Tab 256, p1673), the solicitor acting for Ethel in the FPA proceedings recorded a discussion of a response to the 22 May proposal from David's solicitors; I infer that the other party to that discussion was Rosemary, who advised that she "would not agree to anything" at that point and instructed the solicitor to indicate that letter provided a framework and there would be a reply after advice was obtained from BDO and New Zealand accountants. I do not consider that was an unreasonable position for Rosemary to have taken, at least initially, given the complexity of the relevant matters. That file note also recorded that Rosemary opposed Ian "getting any $'s as [Louis] had given him money in life", although it also appears to acknowledge that she would recognise a payment to Ian if Louis wanted that course. The first statement is consistent with David's evidence of Rosemary having indicated that there should be "zip to Ian" to which I have referred. The latter statement may suggest a less intransigent approach to Ian receiving any benefit than that expressed by Rosemary to David, although the lack of clarity as to Rosemary's position as to what Louis wanted is puzzling. It is in any event difficult to draw any inference as to the extent of any change in her attitude from that file note, where Rosemary has not herself given evidence as to her position. 223The 22 May proposal from David's solicitors was also discussed between Ethel's solicitors, David's solicitors and BDO in June 2006, but appears then to have gone no further, partly when Ethel and/or Rosemary requested further investigations by BDO which David considered related to information that had already been provided or would be costly to obtain and he would not authorise the costs of that investigation unless Ethel and Rosemary agreed in principle to that proposal (CB 72). 224By a facsimile to Rosemary dated 11 August 2006, Ian further clarified (or, in truth, sought to alter) the 22 May proposal in his favour by requiring that he receive the proceeds from the New Zealand trust and his children be the sole beneficiary of Ethel's will, with the suggested result that, after distributions, David would have individual wealth of $8 million, Rosemary $6 million and Ian $3.5 million and his family would receive benefits under Ethel's will of $1.5 - $2 million (CB 83). That proposal appears to have been further discussed between Rosemary and the solicitor acting in the FPA proceedings on 23 August 2006 (CB 256, p1700), where Rosemary indicated that she would accept a two-third/one-third split of Enterprises, although there is no evidence that that position was thereafter conveyed to David or Ian. 225There is uncontested evidence that, in September 2006, David asked Rosemary about the response to that proposal, and she responded that: "... oh that, I haven't read it all yet, I'm not interested in it. I'm not even going to read it." That statement may well have been untrue, given the extent of communications between Rosemary and the solicitor acting in the FPA proceedings in respect of that proposal; however, David and Ian did not have the opportunity to put that proposition to Rosemary, where she did not give evidence in these proceedings. In any event, Rosemary's expressed position would have given no encouragement to David or Ian to pursue further settlement efforts. 226On 11 September 2006, Rosemary advised the solicitor acting in the FPA proceedings of a facsimile and telephone call from Ian advising of errors in the 22 May proposal, which must refer to Ian's facsimile dated 11 August 2006 (CB 256, p1074). Also by letter dated 11 September 2006, BDO responded to a letter from Ethel's solicitors seeking further information about the Ledir Group by indicating that David had advised that Investments was not prepared to pay for such advice (CB 89). It also appears that neither Ethel nor Rosemary were prepared to obtain such advice at their own cost. 227By letter dated 18 September 2006 (CB 96), about the time Ethel left Montoro with Ian, Rosemary gave instructions to the solicitor acting in the FPA proceedings in respect of a proposal to resolve the proceedings including that the Australian trust was to be broken up "in accordance with [Louis'] wishes, ie a two-thirds/one-third split between David and [Rosemary]" on the basis that any proposals made by David and Ian prior to that proposal "shall not be considered". I accept that, as Rosemary contends, the reference in this proposal to the "Australian trust" is likely to be a reference to both the Ledir Group and the Ledir Trust, since the relevant assets were held in Investments, Enterprises and Pluteus and not in the Trust itself, and there would therefore be little of value in the Trust itself to be split. I therefore do not accept David's criticism that that proposal would not have addressed the position of the Ledir Group. It appears that this proposal, whatever its merit, was not communicated by those solicitors to David and Ian, possibly because their retainer was shortly thereafter terminated by Ethel. However, as Rosemary points out, that letter in fact became available to David and David's solicitors by 4 October 1996, in circumstances that it is not necessary to address, and it was therefore open to David and Ian to take the approach contemplated by that letter further if they wished to do so. They did not do so. 228Rosemary appears to have made at least one subsequent attempt to reach a resolution of matters, when a letter dated 17 June 2008 from her solicitors suggested that it would be "sensible to determine an equitable basis for distribution of family funds" and if that was not possible, to agree on dissolution or winding up of family funds or companies "so that the financial affairs of the family are disentangled" or to having an independent person manage the funds and make distribution decisions (CB 263). Ian's solicitors responded to that letter by letter dated 30 June 2008 referring to an earlier offer made to Rosemary that was not accepted (and which is not in evidence) and indicating that it was not Ian's intention to liquidate the family assets and that: "he intends to continue the operation of these assets, with the cooperation of his brother David, for the benefit of the entire family. Further, we are instructed that [Ian] wishes to assure [Rosemary] that he will honour [Louis'] wishes by providing [Rosemary] with an annual dividend of $48,000 while the assets continue to operate" That letter indicates that lan then considered that an equitable distribution of assets did not include any distribution to Rosemary beyond an annual distribution of $48,000, notwithstanding the substantial distributions that had already been made to David and Ian in 2007. 229David and Ian contended that the 22 May offer and Rosemary's failure to take forward any distribution of the assets of the Ledir Group in response to it disentitled her to a remedy in oppression. I do not accept that submission, where Ian's attempted variation of the offer in his favour undermined its status and, in any event, Rosemary had sought to reopen a resolution of matters in June 2008 and Ian had responded to that offer in a manner that clearly indicated he did not consider that the continued operation of the Ledir Group's assets "for the benefit of the entire family" was likely to benefit Rosemary beyond the annual distribution of $48,000 made to her. 230I accept that there are indications in facsimiles from Rosemary that her attitude was hostile and unconstructive, although the same could be said of Ian's attitude also demonstrated in his communications to Rosemary. I have referred above to the evidence that Rosemary does not appear to have intended, at least at times, that Ian should obtain any further benefit from the New Zealand trust, and possibly also the Ledir Group and the Ledir Trust. I accept that these matters should be taken into account; I do not, however, considers that those matters are sufficient to warrant declining relief on discretionary grounds, where otherwise justified. 231David also contends that the last of the substantial payments made to David and Ian was made on 23 December 2008 and the proceedings were not commenced until 18 May 2010 and contends that relief would generally be inappropriate as a matter of discretion if there is no ongoing oppression: Tomanovic v Argyle HQ Pty Ltd above at [39]; Byrne v AJ Byrne Pty Ltd above at [49]. In Campbell v Backoffice Investments above, the plurality observed at [182], without needing to reach a final decision, that: "Because the current form of the oppression provisions in Pt 2F.1 was introduced with a view to making it clear that the Court may make orders even if the act, omission or conduct complained of has yet to occur or has ceased, it may very well be the fact that there was no continuing oppression when this case came to trial does not entail that the Court had no power to make any of the orders for which s 233 provides." 232To the extent that these matters involve past conduct (although it could have readily been pleaded that aspects of that conduct was continuing), that matter should be treated as relevant to the exercise of discretion and not as depriving the court of jurisdiction to make orders in respect of that conduct. In the present case, notwithstanding that the payments to Ian - which I have found, inter alia, support a claim for oppression - occurred in 2008, they have a continuing effect upon the assets available to Enterprises and this is a matter which may support the grant of relief for oppression. There is also no reason to think that the position will change in respect of the limits to the information that Rosemary receives in respect of the affairs of Enterprises and there is no suggestion that the failure to hold meetings has ceased. 233Rosemary has been unsuccessful in several aspects of her oppression claim. Nonetheless, I have ultimately formed the view, for the reasons set out above, that oppression is established in all the circumstances, albeit on narrower grounds than those for which Rosemary contended. The Court would therefore have power to grant relief under s 233 of the Corporations Act. Whether such relief is ultimately justified and the nature of such relief is matter to be addressed at the second stage of the proceedings. The alleged scheme 234Rosemary pleads that David and Ian "acted together" to obtain control of Enterprises and other Ledir Group companies, remove her as a director of Enterprises and other Ledir Group companies, exclude her from the management of Enterprises and other Ledir Group companies, and deprive her of reasonable information concerning the affairs of Enterprises and other Ledir Group companies (5FAS [44]). Rosemary also contends that David and Ian "acted together" to obtain the distribution to themselves of a substantial proportion of the assets of the Ledir Group in circumstances that amounted to a partial or preliminary winding up of Enterprises and without regard to Rosemary's entitlement in a winding up of Enterprises and to the prejudice of that entitlement (5FAS [45]). Rosemary also relies on the appointment of Ian and removal of Rosemary as directors of the companies, by means of the power of attorney given by Ethel to Ian and Ethel's actual or purported voting power as a B class shareholder in Enterprises (5FAS [46]-[48A]) and pleads that she has since wrongly been excluded from the deliberations of directors or purported directors of companies with the Group (5FAS [48B]). 235Rosemary pleads that, in acting together to make the payments pursuant to the purposes pleaded in 5FAS [28] and [44]-[45], David and Ian gave effect to a scheme, the effect of which was to make dispositions of the External Assets of the Ledir Group to David and Ian, the proceeds of which otherwise were available solely as dividends or distribution of the surplus assets of Enterprises (5FAS [70]-[71]). Rosemary contends that that "scheme" could not have been carried out but "for the use, including tacit use by not acting to the contrary" by Ian of the power of attorney given to him by Ethel, Ethel's voting power (as defined) and her power to appoint or remove the directors of Comserv (5FAS [73]). She pleads that the Payments (as defined) were, in substance, gifts to Ian and David by means of the power of attorney and were not in Ethel's interests, were contrary to Ethel's interests, were a use of the power of attorney beyond its terms, an abuse of the power of attorney and a fraud on the power of attorney (5FAS [75]). She also pleads that the "scheme" was variously, a fraudulent and dishonest design within the meaning of Barnes v Addy (1874) LR 9 Ch App 244, an imposition within the terms of the fourth limb of Earl of Chesterfield v Janssen (1751) 2 Ves Sen 125; (1751) 28 ER 82 and to the prejudice of Ethel, Rosemary and Enterprises (5FAS [78]-[79]). Rosemary also pleads that, by reason that the "scheme" was an imposition or deceit, the payments were void or voidable on grounds of public policy and the scheme and the payments amount to an equitable fraud against Rosemary (5FAS [80]-[81]). 236Rosemary submits that the alleged scheme: "relied on use and abuse of the power of attorney granted by Ethel to Ian to make what were in substance gifts to Ian and David ... when the power of attorney proscribed gifts, that this was an abuse of and fraud on the power of attorney which Ian and David concealed as best they could." Rosemary further submits that: "... the scheme was an imposition and deceit upon Ethel, as the donee of the power, and Ledir Enterprises and Rosemary as parties likely to be affected by the misuse and abuse of the power. This entitles Ledir Enterprises in particular, (and, mutatis mutandis, Ledir Investments) to relief from the actions taken in furtherance of and by means of the imposition and deceit, so that the Payments should be set aside. It also should be taken into account in considering whether the affairs of the company have been conducted unfairly, and as inconsistent with the actions of Ian and David as directors constituting a bona fide exercise of their powers." 237Rosemary submits that the steps taken by Ian and David, as part of the wider chronology from the commencement of the FPA proceedings by Ethel until the end of 2006: "demonstrate a concerted plan or scheme for them to take control of the Ledir Group and seek to exercise their powers in a way which would lead to and did lead to them securing the lion's share of the Ledir Group assets (as well as the New Zealand assets and their mother's future estate)." Rosemary places particular weight on a challenge to Ian's conduct in obtaining Ethel's power of attorney and his "using it to control the general meeting and the board of directors of the companies" and upon the fact that David and Ian "clearly acted together". 238In her submissions in reply, Rosemary contends that the relevant breach of public policy is the use and abuse of Ethel's power of attorney, independent of questions of Ethel's capacity. Rosemary also relies on a claimed admission by David and Enterprises of an allegation that, by 14 February 2006, Ian was acting on the basis that Ethel was incapable (5ASC [39]) under Uniform Civil Procedure Rules 2005 (NSW) r 14.26, where David and Enterprises did not plead to that paragraph of the Statement of Claim. I do not consider that such an admission is established, where that allegation was made in respect of Ian's conduct, not that of David and Enterprises, and, in any event, Rosemary opened her case on the basis that she did not seek to establish Ethel's lack of capacity. 239Rosemary relies on the decision in Earl of Chesterfield v Janssen above at 100 where Lord Hardwicke LC referred the fourth type of equitable fraud, which "may be collected or inferred in the consideration of this court from the nature and circumstances of the transaction, as being an imposition and deceit on the other persons not parties to the fraudulent agreement. It may sound odd, that an agreement may be infected by being a deceit on others not parties; but such there are, against such there has been relief." His Lordship also observed that: "These cases shew what courts of equity mean, when they profess to go on reasons drawn from public utility....Particular persons in contracts shall not only transact bona fide between themselves, but shall not transact mala fide in respect of other persons, who stand in such a relation to either as to be affected by the contract or the consequences of it; and as the rest of mankind beside the parties contracting are concerned, it is properly said to be governed by public utility." 240This category of equitable fraud was recently considered by the Court of Appeal of the Supreme Court of Western Australia in Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) above, where Lee AJA observed (at [762]) that the common features of transactions that were treated as equitable fraud were that they were contrary to public policy and that the formation of the transactions involved underhand or improper conduct so as to justify the intervention of equity to make remedial orders and restore, if possible, the transacting parties to their original positions and remove disadvantages imposed on third parties. His Honour also noted (at [765]) that conduct contrary to public policy had continued to be treated as equitable fraud notwithstanding that express jurisdiction to grant corrective orders may be provided by legislation for such conduct. 241Drummond AJA there observed (at [2594]) that the essential elements of equitable fraud, as summarised in Earl of Chesterfield v Janssen above, involved a transaction in bad faith in respect of other persons who stand in such a relation to the parties to the transaction as to be effected by the contract or the consequences of it, with the effect of the transaction on third parties to be judged by reference to standards of "public utility". His Honour noted (at [2597]) that fraud or deceit was not an essential element of a case falling within the fourth head of fraud in that decision, but that conflict with some identifiable public policy was essential, and again emphasised (at [2598]) that an essential feature of all elements caught by that head was that they "infringed some head of public policy". His Honour summarised the position at [2601] as that: "The elements that must be established to bring a case within the fourth head of equitable fraud are first, there must be an agreement that works and imposition or deceit on persons not parties to the agreement but who are in such a relationship with one or other of the parties that they will be affected by the agreement. There being no need to prove an actual intention to deceive, it is the impact of the contract upon third parties who are in that kind of relationship with the contracting parties that constitutes transacting mala fide in respect of third parties. It follows from this, I think, that it is not necessary to show that the fraudulent agreement has been kept secret from the third parties affected by it. The second and additional element is that the agreement must infringe some head of public policy so as to require equitable intervention". 242I accept that, as David contends, the Briginshaw standard must be applied in respect of the "scheme" pleaded in 5FAS [70]-[81]. Turning now to the elements of the pleaded "scheme", Rosemary pleads that David and Ian had the purpose of securing distributions to themselves inconsistent with and to the prejudice of Rosemary's entitlement in a winding up of Enterprises (5FAS [45], [70]) and that the effect of the "scheme" was to deplete the assets of the Ledir Group in a manner prejudicial to, relevantly, Rosemary as a shareholder entitled to a shares of the surplus assets on the winding up of the Ledir Group (5FAS [72]). Plainly, the distributions reduced the assets of the Ledir Group. The allegation in 5FAS [73] that Ethel's power of attorney and voting power was used to appoint or remove directors of Comserv is not established, where it appears that Ian was appointed as a director of Comserv in 2009 by the exercise of David's powers as a director after Ethel no longer had capacity to act as a director of that entity. 243Rosemary also pleads that the distributions made to David and Ian were "in substance" gifts by means of the power of attorney (5FAS [74]). Rosemary relies on Part 4 Div 2 of the Powers of Attorney Act 2003 (NSW) and particularly s 11(1) of that Act, which she submits expresses the general law which is based on considerations of public policy. She submits that the "scheme" circumvented the operation of law because "by the use of the power of attorney, Ian and David gave themselves what were in substance gifts". I do not consider that this claim is established, so far as the 2007 payments were dividends made by a company or distributions made by a trust, consequential upon the shareholder's interest in the company or the beneficiary's status as a beneficiary of the trust, and the 2008 payments were unauthorised payments by Investments. As David points out, the concept of "gift", so far as the power of attorney was concerned, appears to contemplate a gift of property of Ethel and dividends paid by Investments and Enterprises (or, indeed, unauthorised payments by Investments) or distributions from the Ledir Trust were derived from those entities' property, not from Ethel's property. The use of a power of attorney by a shareholder to exercise votes in a general meeting to elect or remove directors to a company does not, in my view, constitute every subsequent distribution from or payment by that company approved by those directors, or every distribution from a trust that is funded by a dividend or loan made by the company, a "gift" made by means of the power of attorney. This submission also seems to me inappropriately to aggregate steps that could properly be taken by the exercise of Ethel's voting power under the power of attorney, namely the removal of Rosemary as a director of Enterprises (which was of lesser significance for the reasons I have noted above) and the appointment of Ian as a director, and other steps which were taken, not contemporaneously, in the exercise or purported exercise of the powers of directors of Investments, Enterprises and Comserv as trustee of the Ledir Trust. 244Rosemary also pleads that Ian's use of Ethel's power of attorney was not in, or contrary to, Ethel's interests or an abuse of or fraud upon the power of attorney (5FAS [75]). So far as the power of attorney was used to remove Rosemary as a director, it does not seem to me to be to have been established that removal was contrary to Ethel's interests, or that Ethel did not acquiesce in it, for the reasons noted above. In any event, as I have noted above, that removal was of limited impact because Rosemary in fact ceased to be a director in accordance with article 64 of Enterprises' articles of association in December 2006. Rosemary also contends that that the appointment of Ian as a director of Comserv involved what is described as a "tacit use" of the power of attorney given by Ethel to Ian. I also cannot accept that proposition, because, as I noted above, any appointment of Ian is a director of Comserv was made in the exercise of David's power, as a director of that company, to appoint a director to fill a casual vacancy in circumstances of Ethel's incapacity, not in the exercise of Ethel's voting power. 245The allegation in 5FAS [78]-[79] that Ethel was deceived was not supported by evidence of Ethel, given her incapacity, but was also not supported by any evidence which Rosemary might have, but did not, give. It is also difficult to see how Ethel could have been deceived as to the use of her power of attorney, when she attended the meeting on 29 December 2006 at which it was used and did not dissent from its use. 246I do not consider that the pleaded allegations in respect of the "scheme" are established. In these circumstances, and given the findings which I have reached in respect of other aspects of Rosemary's claim, it is not necessary to determine whether, if the factual basis of this claim had been established, it would have amounted to equitable fraud under the applicable principles. Claim against Mandala 247Rosemary also brings a claim (5FAS [82]-[85]) against Mandala, described as follows in her written submissions: "If it is found that there was a breach of fiduciary duties or of statutory duties of directors, Mandala is liable as a knowing assistant or recipient. So far as the constructive trust claim is pleaded, Mandala may be liable as a recipient. All the Ian Aboud payments were paid to Mandala's bank account. Ian Aboud maintains a loan account with Mandala which is in credit. To the extent that that account is in credit, it is held by Ian Aboud on constructive trust and Mandala should correspondingly be enjoined from paying it to Ian Aboud. These go to questions of remedy." 248The claim for knowing assistance in a breach of fiduciary duty or knowing receipt based on such a duty cannot succeed, since I have not found the single pleaded fiduciary duty to be established, and therefore have not found any breach of that duty or any such trust to be established. Principles of knowing receipt and knowing assistance are not applicable in respect of the breach of statutory duties under ss 180 and 181 of the Corporations Act that I have found to be established. Ian's superannuation entitlement 249A claim in respect of this matter (5FAS [86]-[89], is no longer pressed. Claim to winding up on just and equitable ground 250Rosemary also brings a claim to wind up Enterprises on the just and equitable ground (5FAS [98]-[105]). That claim is also pleaded in a somewhat complex manner, as follows: "98. The share structure of Ledir Enterprises and the structuring of the manner in which external assets were held by companies in the Ledir Group were established by Louis Aboud or, in the alternative, Louis Aboud and Ethel Aboud, as a means of holding those of the Aboud Family Assets which were owned by the Ledir Group and to give effect to Louis' or Louis' and Ethel's intentions concerning the transmission of those assets to their children and further descendants. 99. In relation to Ledir Enterprises and the Ledir Group, the elements of that structure were that, following the death of Louis Aboud: a. The External Assets of the Ledir Group were to be preserved, subject to the control of Ledir Enterprises by Ethel Aboud or directors who could be appointed or removed by her; b. That, subject to Ethel Aboud's discretion to make payments to herself or to cause monthly payments to David Aboud and Rosemary Aboud out of income derived from those External Assets, David Aboud and Rosemary Aboud were respectively entitled to two thirds and one thirds of the proceeds of surplus assets of Ledir Enterprises, being the External Assets of the Ledir Group or their proceeds or value less or after payment of the External Liabilities of the Ledir Group; c. That Ethel Aboud would exercise her powers of control over the Group consistent with the respective entitlements of David and Rosemary Aboud pleaded above; d. That Ethel Aboud would exercise her powers in her lifetime personally; e. That during Ethel Aboud's lifetime, the directors of Ledir Enterprises would not exercise their powers inconsistently with the respective entitlements of David and Rosemary Aboud pleaded above; f. That following the death of Ethel Aboud, the directors and shareholders of Ledir Enterprises would not exercise their powers inconsistently with the respective entitlements of David and Rosemary Aboud pleaded above; or g. In the alternative to (b) above, the entitlement of Rosemary Aboud was not less than: i. thirty percent; or ii. Two sevenths of the proceeds of the surplus assets of Ledir Enterprises, being the External Assets of the Ledir Group or their proceeds or value less or after payment of the External Liabilities of the Ledir Group. 100. Rosemary Aboud had and has a reasonable expectation that the elements of the structure pleaded above would be respected, and observed and adhered to. 101. By reason of the incapacity of Ethel Aboud, she is no longer able to exercise her powers personally. 102. The conduct of the affairs of the company and the conduct of David Aboud and Ian Aboud in making the Payments and executing the Scheme have a. subverted; c.frustrated; and c. prevented the achievement of the purposes the purposes for which the structure referred to at paragraph 99 was established and Rosemary Aboud's reasonable expectations. 103. By reason of her incapacity, Ethel Aboud: a. is no longer capable of acting as a director of Ledir Enterprises; and b. is no longer a director of Ledir Enterprises. 104. By reason of the matters aforesaid in connexion [sic] with the conduct of the affairs of the Ledir Enterprises [sic] and by reason of the other matters complained of herein in respect of the conduct of Ian Aboud and David Aboud in connexion [sic] with the affairs of the Ledir Group and the Power of Attorney, the Payments and the Schemes, the plaintiff has justifiably lost confidence in the directors of Ledir Enterprises or in the director, David Aboud, and Ian Aboud acting as a director. 105. In the premises, Ledir Enterprises should be wound up on the just and equitable ground." In the factual circumstances of this case, it might well have been possible to plead a more straightforward claim for a winding up on the just and equitable ground. 251The Court may make an order for winding up under the just and equitable ground under, inter alia, s 461(1)(k) of the Corporations Act by reason of mismanagement, misconduct or lack of confidence in the conduct and management of the company's affairs. An order for winding up may also be made on the just and equitable ground if a company was based on an association formed on the basis of a personal relationship involving mutual confidence, and that confidence has broken down or where a shareholder has been denied access to information or excluded from major decisions: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd above; Nassar v Innovative Precasters Group Pty Ltd above at [322]. The reference to "just and equitable" in this section permits the Court to have regard to considerations "of a personal character arising between one individual and another, which make it unjust, or inequitable, to insist on legal rights, or to exercise them in a particular way": Ebrahimi v Westbourne Galleries Ltd above; Thomas v HW Thomas Ltd above at ACLC 617. 252It seems to me that a number of the elements of the pleaded claim are not established. First, the claim that the External Assets of the Ledir Group were to be preserved is qualified, as it must be, by a recognition of the powers of directors appointed to Enterprises. Second, the claim that David and Rosemary were entitled to two-thirds and one-thirds of the proceeds of surplus assets of Enterprises (or the alternative proportions pleaded in paragraph 99(g)) is directed to the position on a winding up, but does not have regard to the fact that, as I noted above, the structure of the Ledir Group permitted dividends to be paid to Conserve as the trustee of a discretionary trust and distributions to be made from that trust. The proposition that Ethel would exercise her powers of control over the Ledir Group on that basis is inconsistent with her rights as the only voting shareholder in a general meeting of Enterprises, to the extent that the estoppel that I have held to be established would prevent Enterprises denying those rights. No basis has been established for the proposition that Ethel would exercise her powers in her lifetime personally, where a shareholder may appoint an attorney or proxy to vote on their behalf in general meeting. The proposition that the directors of Enterprises would not exercise their powers inconsistently with the asserted entitlements of David and Rosemary fails to distinguish between, on the one hand, the position while Enterprises was ongoing, when distributions could be made to the Ledir Trust and through it to beneficiaries of the trust and the position on a winding up. 253On the other hand, as I noted above, David accepted in cross-examination that directors' meetings have not taken place since 2009 and he has not taken any steps together with Ian to produce accounts, although the accountants have prepared minutes of meetings that he has been asked to sign and he has signed them (T191). David was not satisfied with Ian's conduct in respect of Ethel's affairs and has not since 2009 made any attempt to contact Ian and has attempted to avoid contact with him. As I noted above, Ian's evidence was that he left it to David to run the companies and he was a "passive" director (T296), and he accepted in cross-examination that to the best of his recollection he did not do anything else in the affairs of the companies in his capacity as a director in the financial year ended 30 June 2007, other than facilitating the payments made to himself, David, Rosemary and Ethel (T297). Ian also accepted that, other than facilitating payments to those persons, he did not do anything else in the period 1 July 2007 to the end of 2008 in his capacity as a director (T298). He assumed that anything that was done in the name of the companies was done with an appropriate level of care by his brother, lawyers, accountants or other persons responsible (T314). 254Rosemary contends, and I accept, that these matters, and the other matters to which I have referred in respect of the oppression claim may well support a finding that the companies cannot effectively function and an order for their winding up on the just and equitable basis. That is a matter to be addressed in the relief stage of the proceedings. Relief 255The parties agreed that questions of relief should be determined after the delivery of this judgment. David has foreshadowed, in his submissions, that he is amenable to the winding up of the Ledir Group and the Ledir Trust "on a fair and equitable basis" and raises the possibility that orders may be made for the purchase of Rosemary's shares in Enterprises. Rosemary raises the possibility that the shares of other parties in Enterprises should be transferred to her for no consideration. As I have noted, subject to hearing from the parties and absent any agreement between the parties as to other more appropriate orders, it may be that the breakdown of the relationship between the parties will in any event warrant an order that Enterprises be wound up on just and equitable grounds. 256I will hear the parties as to the relief that should be granted and as to costs once they have had the opportunity to consider 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: 25 September 2013