[2025] SASC 154

First Applicant: ACN 081 014 208 PTY LTD (IN LIQUIDATION) (FORMERLY MILLENNIUM ELECTRONICS PTY LTD) ACN 081 014 208 Counsel: MR J WHITINGTON KC - Solicitor: ILES SELLEY LAWYERS Second Applicant: JOHN SHEAHAN AS LIQUIDATOR OF ACN 081 014 208 PTY LTD (IN LIQUIDATION) (FORMERLY MILLENNIUM ELECTRONICS PTY LTD) ACN 081 014 208) Counsel: MR J WHITINGTON KC - Solicitor: ILES SELLEY LAWYERS First Respondent: MILLENNIUM ELECTRONICS INTERNATIONAL PTY LTD ACN 144 482 299 No Attendance Second Respondent: MILLENNIUM ELECTRONICS INDUSTRIAL COMPANY LIMITED 931044 Counsel: MR R WILLIAMS SC - Solicitor: MILLS OAKLEY Third Respondent: EGO COMPONENTS LTD 979896 Counsel: MR R WILLIAMS SC - Solicitor: MILLS OAKLEY Fourth Respondent: ERIC TZE KIN AU Counsel: MS S MAGLIANI - Solicitor: NORMAN WATERHOUSE Fifth Respondent: ODERO CONCI Counsel: MR M DOUGLAS - Solicitor: PGC LEGAL Sixth Respondent: GARY TESCHER Counsel: MR S PHILLIPS - Solicitor: O’HALLORAN LAW Hearing Date/s: 13/08/2025 File No/s: CIV-21-009073 B SUPREME COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment 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 in which it was generated. ACN 081 014 208 PTY LTD (IN LIQUIDATION) (FORMERLY MILLENNIUM ELECTRONICS PTY LTD) & ANOR v MILLENNIUM ELECTRONICS INTERNATIONAL PTY LTD & ORS [2025] SASC 154 Reasons for Ruling of the Honourable Justice McIntyre 11 September 2025 PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - MOTIONS, INTERLOCUTORY APPLICATIONS AND OTHER PRE-TRIAL MATTERS PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - PARTICULARS - FURTHER AND BETTER This is an interlocutory application by the applicants for leave to file an amended statement of claim. This application concerns a second revision of the statement of claim. The first revision was filed in October 2023. -- 1 of 10 -- The application is opposed by the fifth and sixth respondents. The first, second, third and fourth respondents take no position on the application. Held: Application granted – the applicant has leave to file the amended statement of claim. Corporations Act 2021 (Cth) ss 180, 181, 588G, 588M, 1317H; Uniform Civil Rules 2020 (SA) r 67.2; Supreme Court Act 1935 (SA) s 67, referred to. Seeley International Pty Ltd v Millenium Electronics Pty Ltd (in liquidation) (No 3) [2021] SASC 63; Australian Securities and Investments Commission (ASIC) v Cassimatis (No 8) (2016) 336 ALR 209; Australian Securities and Investments Commission (ASIC) v Bettles [2020] FCA 1568, considered. -- 2 of 10 -- ACN 081 014 208 PTY LTD (IN LIQUIDATION) (FORMERLY MILLENNIUM ELECTRONICS PTY LTD) & ANOR v MILLENNIUM ELECTRONICS INTERNATIONAL PTY LTD & ORS [2025] SASC 154 Civil: Application McINTYRE J: 1 On 25 July 2025, the applicants filed an interlocutory application (FDN 157) seeking leave to file revision 2 of its statement of claim in the terms exhibited to the fourth affidavit of Charlotte Anne Thomas made on 25 July 2025 (FDN 158). The application is opposed by the fifth and sixth respondents. The other respondents do not take a position in relation to the application. 2 For the reasons that follow, I grant leave to the applicants to file the proposed amended statement of claim. Background 3 The first applicant commenced these proceedings on 13 August 2021 by way of an originating application seeking a freezing order against the first respondent and an injunction against the second respondent. On 31 May 2023, the first applicant filed revision 1 of the originating application (FDN 59) in which the third, fourth, fifth and sixth respondents were joined as parties to the proceedings. That application also included the second applicant as liquidator of the first applicant. On the same date, the applicants filed a statement of claim (FDN 60). 4 At a directions hearing on 18 October 2023, orders were made for the applicants to file and serve an amended statement of claim within seven days. Pursuant to those orders, on 27 October 2023, the applicants filed and served a statement of claim – revision 1 (FDN 87). There was email correspondence between the fourth and sixth respondent and the applicants concerning aspects of the amended statement of claim.1 The applicants agreed to circulate a further amended statement of claim to address those issues within 14 days of 7 February 2025. On 18 February 2025, the applicants’ solicitors sent an email to the solicitors for the respondents attaching the proposed statement of claim – revision 2. 5 On 15 May 2025, the parties participated in a private mediation which did not result in a resolution of the dispute. In June and July 2025, the fifth and sixth respondents sought further particulars of the proposed statement of claim – revision 2. As a result of that correspondence, further amendments were made by the applicants resulting in the version that is the subject of this application.2 1 Affidavit of Charlotte Anne Thomas sworn on 25 July 2025 (FDN 158) at 45 – 50. 2 Ibid at 9 – 33. -- 3 of 10 -- [2025] SASC 154 McIntyre J 2 6 The proposed amendments can be summarised as follows: 1. deletion of the reference to “further particulars” in paragraphs 13.2.2 and 13.4.2; 2. insertion of particulars at paragraph 36; 3. amendments to paragraphs 44, 67 and 68; 4. amendments to the particulars at paragraphs 70 and 71; and amendment to and insertion of particulars at paragraph 76; and 5. amendments to the annexure. Objections by fifth respondent 7 The fifth respondent originally sought to strike out specific paragraphs of the applicants’ statement of claim – revision 1. Rather than dealing with that application, I determined to consider the fifth respondents’ objections as part of the application to amend the statement of claim on the basis that it was necessary to be satisfied as to the whole pleading in order to establish whether the proposed pleading provides an appropriate framework for this matter to proceed. 8 The fifth respondent objects to the following: • paragraphs 27 to 30 contending that the allegation that the fifth respondent “caused” execution of 12 documents specified in those paragraphs is ambiguous. • paragraphs 36 to 38 are objected to on the basis that the allegations of a scheme are pleaded collectively as against all respondents. • paragraphs 40 to 42 are objected to on the basis that they assert an object, purpose or motive without stating the facts from which such intent is to be inferred. • paragraphs 74 to 78 are objected to on the basis that, whilst the fifth respondent is alleged to have breached ss 180 and 181 of the Corporations Act 2021 (Cth) (‘the Act’), the paragraphs do not identify any specific act or omission by the fifth respondent. • paragraphs 77 to 78 are objected to on the basis that the loss alleged to flow from the breaches is not particularised to show how it resulted from the fifth respondent’s conduct or whether the loss is claimed jointly against the respondents or separately against him. -- 4 of 10 -- [2025] SASC 154 McIntyre J 3 Objections by sixth respondent 9 The sixth respondent objects only to the proposed form of paragraph 76 of the statement of claim contending that this is insufficiently particularised. Brief overview of claim against the fourth, fifth and sixth respondents 10 The first applicant seeks compensation under s 1317H of the Act against the fourth, fifth and sixth respondents and each of them for damages of contravention of ss 180 and 181 of the Act. The second applicant seeks compensation under s 588M of the Act against the fourth, fifth and sixth respondents for damages for insolvent trading in s 588G of the Act. 11 The claims against the fourth, fifth and sixth respondents arise out of civil proceedings in the Supreme Court of South Australia between Seeley International Pty Ltd (‘Seeley’) and the first respondent.3 12 In a judgment delivered on 31 May 2021, Livesey J (as he then was) awarded Seeley damages assessed at $13,277,000 in addition to interest and costs.4 The nature of the claim and the basis for judgment are set out in the judgment. The applicant contends that it is plain from the judgment that Seeley’s case was exceptionally strong and that the defence foreshadowed by ME lacked merit and was bound to fail. 13 The statement of claim sets out the details of the various parties in paragraphs 7 to 13 inclusive. A shorthand terminology for the various parties is set out in paragraph 6. Relevantly, for present purposes the first applicant is referred to as ME, the first respondent as MEI, the second respondent as MEIHK and the third respondent as EGO. The remaining respondents are referred to by their surnames and the second applicant as the Liquidator. 14 The fourth and fifth respondents were directors of ME, MEI, MEIHK and EGO. The sixth respondent was a director of ME and MEI for certain periods set out in paragraph 13 of the statement of claim. It is further asserted that at other times the sixth respondent was acting in the position of director or in the alternative was a person with whose instructions or wishes the directors of ME and MEI were accustomed to act. Details of ME’s business are set out in paragraphs 14 to 19 and details of the Seeley proceedings are set out in paragraphs 20 to 25. This much appears uncontroversial. There is no objection by any party to the proposed amendment in revision 2 of the statement of claim to paragraphs 13.2.2 and 13.4.2. 15 The applicant contends that the fourth, fifth and sixth respondent sought advice from a solicitor from about July 2019. The result of that advice is said to be the scheme set out in paragraphs 36 to 37 of the statement of claim (‘the Scheme’). The applicant contends that the Scheme had a dual object, first to pass the assets, including the goodwill, plant and equipment and business 3 T23. 4 Seeley International Pty Ltd v Millenium Electronics Pty Ltd (in liquidation) (No 3) [2021] SASC 63. -- 5 of 10 -- [2025] SASC 154 McIntyre J 4 connections from ME before it went into liquidation, to a MEI a wholly owned subsidiary established for that purpose in a manner that enabled the fourth, fifth and sixth respondents to continue to operate the business for their future benefit and second, to leave the judgment debt to Seeley in ME as the only significant debt or trade liability not assumed or taken over by MEI. 16 I will deal with the objections in order noting that, on a pleading dispute, the court must strike a balance between fair notice to be given on the one hand and excessive demands for detail. Pleadings need only make clear the general nature of the case of the party pleading. Paragraphs 27 to 35 – transaction documents 17 The applicants plead in paragraph 38 that the Scheme was implemented, inter alia, by the entry into and execution of various documents set out in paragraphs 27, 28, 29, and 30 (‘the transaction documents’). The only amendments proposed in respect of the transaction documents relate to renumbering paragraphs 29B and 29E. I do not understand the fifth respondent to object to those amendments per se. Rather, the fifth respondent contends that these paragraphs as they currently stand are ambiguous and that the proposed amendments do not cure that ambiguity. The fifth respondent says that pleading that the fifth respondent “caused” execution of the 12 documents specified in those paragraphs does not state whether the fifth respondent signed the documents, directed execution of the documents, approved them or took steps in relation to them nor does it address when and how these activities are said to have occurred. It is said that the lack of specificity prevents the fifth respondent from knowing whether it is alleged that his involvement was only as a signatory, as a board level approver, a negotiator of terms or otherwise. The fifth respondent says that the applicants ought to provide further particulars of the acts or omissions relied upon. It is said that without this information he cannot identify relevant witnesses, board minutes, internal communications or determine whether the conduct alleged falls within his period of directorship. It is further contended that the pleadings omit material facts necessary to connect any identified act to each element of ss 180 or 181 of the Act contrary to UCR rr 67.2(2) and 67.2(3). 18 It is unnecessary, in my view, to plead more than has been set out in these paragraphs. There is no unfairness to the fifth respondent; the case against him is plain. The documents and the dates on which they are alleged to have been entered into are set out in the pleading. The documents have all been discovered. They are all apparently signed by the fifth respondent. If the appellants establish that he signed the documents in his capacity as director then he is presumed in the absence of evidence to the contrary, to have “caused” the companies to enter into them. I do not accept that the fifth respondent is prevented from knowing the nature of his alleged involvement. -- 6 of 10 -- [2025] SASC 154 McIntyre J 5 Paragraphs 36 to 38 – the Scheme allegations 19 The applicants seek to amend paragraph 36 of the statement of claim to add further particulars. The fifth respondent does not appear to object to those amendments but rather complains that the allegations are pleaded collectively against the fourth, fifth and sixth respondents in circumstances where it is said that the allegations amount to allegations of a species of dishonest conspiracy involving multiple actors. 20 The applicants deny that there is any claim in the tort of conspiracy and that it is necessary to plead more than has been set out in the existing pleadings and proposed amendments. Rather, they plead the Scheme and the execution of the documents in conjunction with the insolvency at the relevant time in order to justify the setting aside of the transactions. The applicants contend as follows:5 Further, it is easy enough for the Fifth Respondent to defend by denying his role in the execution of the instruments (as opposed to the relevant corporate entities’ involvement in the execution). It is noteworthy that Conci in his Defence (FDN 74) admits execution of the relevant documents but disingenuously avoids admitting that the execution was effected by him. If it was not, it is perfectly open to him to say so. Otherwise, the Applicants are entitled to rely on the reasonable inference of a Scheme based upon the instruments created, in the context both of their self-evident operation and the background circumstances pleaded in relation to the Seeley Proceedings. 21 The fifth respondent relies on two decisions in support of his position. The first is a decision of the Federal Court of Australia in ASIC v Cassimatis (No 8)6 (‘Cassimatis’) that a director’s mere passive status does not establish culpability for the dishonest or improper conduct of others, particularly in relation to s 180 of the Act. Further reliance is placed on the decision of ASIC v Bettles7 (‘Bettles’) where Greenwood ACJ said as follows:8 It is not sufficient to set out a collection of facts over a period of time and describe conduct falling within that large matrix of fact as “illegal phoenix activity” on the footing that the matrix of fact engages contraventions of ss 180, 181 and 182. The process of setting out or pleading a case that a person is a person involved in a contravention of the Act for the purposes of s 79 of the Act involves identifying the contravention with precision and identifying the facts and circumstances which demonstrate that the relevant person is a person “involved in” that contravention because the person has aided or abetted the particular contravention. Thus, framing the case involves asking what conduct, engaging the reorganisation of the group of companies, renders the conduct inherent in the reorganisation contravening conduct of a particular section and by whom, when and how? It involves then asking what facts demonstrate conduct on the part of Mr Bettles that demonstrates that he had knowledge of each essential integer of the contravention of, in each case, as framed by the document, ss 180, 181 and 182 which will involve setting out the steps constituting the aiding and abetting. 5 Applicant Written Submissions (FDN 166) at [34]. 6 (2016) 336 ALR 209. 7 [2020] FCA 1568. 8 Ibid at [101]. -- 7 of 10 -- [2025] SASC 154 McIntyre J 6 22 The difficulty with reliance upon Cassimatis is that the applicants are not alleging mere passive status. Rather the pleadings allege the fifth respondent as a director of four companies (ME, MEI, MEIHK and EGO) was actively involved in the transactions entered into between those companies. Likewise, the proposed amended statement of claim appears to comply with the requirements set out in Bettles. They do not merely plead a “scheme”, “conspiracy” or “phoenix activity”. The pleaded Scheme is a not a mere label. Rather the pleadings assert a number of matters such as causing the companies of which he was a director to execute 12 specified legal instruments on particular dates that, if proven, demonstrate the conduct that is alleged to be the fifth respondent’s involvement in the asserted contraventions of the Act. This pleading discloses sufficient facts in support of the applicants’ case which, assuming those facts to be proven, taken together, permits an implication that a scheme of the kind pleaded was devised and implemented. Paragraphs 40 to 42 – Purpose or motive 23 There is no application to amend paragraphs 40 to 42 rather the fifth respondent says that paragraphs 40 to 42 assert an “object”, “purpose” or “motive” without stating the facts from which such intent is to be inferred. The fifth respondent contends that such allegations are inherently prejudicial and imply dishonesty without affording the fifth respondent any opportunity to understand or meet the facts said to support the inference. In his written submissions the fifth respondent further contends:9 If intent is to be relied upon to prove breach of ss 180 or 181, the facts showing what he knew, inferred, or intended must be pleaded. If the Fifth Respondent’s knowledge at a particular time is to itself be inferred, then the facts on which the Court is asked to draw that inference must themselves be identified. The pleading must identify the events, communications, or surrounding circumstances from which the alleged state of mind is to be inferred. Absent such particulars, the Fifth Respondent cannot challenge the inference, identify contrary evidence, or test the credibility of witnesses on the matters said to support it. 24 The relevant paragraphs of the statement of claim – revision one are as follows: 40. The object and purpose of Au, Conci and Tescher in causing or procuring the MEI Securities was to encumber the assets of MEI transferred by ME under the APA with the burden of any liabilities incurred by ME to EGO and, more particularly, to MEIHK in the period between 23 July 2020 and the date of the APA and, in the case of liabilities incurred by MEI, incurred by MEI to those parties thereafter. Particulars A. This is to be inferred from the cumulative effect of the terms of each of the MEIHK/MEI Security, the EGO/MEI Security and the APA which Au, Conci 9 Fifth Respondent Written Submissions (FDN 163) at [46] – [47]. -- 8 of 10 -- [2025] SASC 154 McIntyre J 7 and Tescher jointly participated in drafting and/or the giving of instructions in relation to the same. 41. The object and purpose pleaded in paragraph 40 above were formulated in pursuance of the Scheme. 42. The further object and purpose of Au, Conci and Tescher in causing or procuring MEI to grant the MEIHK/MEI Security and the EGO/MEI Security was to render the sale of MEI or its assets unattractive to a party other than themselves or an associate of themselves. [emphasis in original] 25 There is no pleading relating to motive only as to object and purpose. The object and purpose pleaded relates only to the grant by MEI of securities to MEIHK and EGO. Again, it is my view that this pleading discloses sufficient facts in support of the applicants’ case from which it is said object and purpose is to be inferred. Paragraphs 74 to 78 – Breach of duty & loss 26 The amendments proposed by the applicants include further particulars of paragraphs 74 and 78. The fifth respondent again does not specifically object to these amendments but says that the loss alleged to flow from the asserted breaches is not particularised to show how it resulted from any conduct of the fifth respondent or whether the loss is claimed separately against him or jointly as against the respondents. It is said that without proper particulars in relation to the fifth respondent the pleading is ambiguous and causes substantial prejudice for trial preparation in a multi-party dispute. 27 The applicant, on the other hand, contends as follows:10 It is wrong to assert that specific acts are not identified. SOC [74] refers back to SOC [26]- [44] and [68]-[71] (and further reference might also be made to SOC [56]). Connection is pleaded by SOC [74] and it is not a case of the facts potentially being relied on distributively over the elements of the duty in s 180 and the duty in s 181. The facts pleaded are sufficient to give rise to breaches of both provisions. 28 It is plain that the applicants claim against each respondent for the entirety of the conduct and the entirety of loss. In other words the applicants contend that the fourth, fifth and sixth respondent are jointly and severally liable. That is a matter to be dealt with at trial. It is not necessary to address that issue further in the pleadings. The parties are on notice of the claim against them. In relation to causation of loss, it is again my view that these are adequately particularised. The pleadings in paragraphs 26 to 44 and 68 to 71 in combination assert that there would not have been a liquidation under the resolution of 9 October 2020 but for the Scheme embarked upon by the respondents to achieve a liquidation. 10 Applicant Written Submissions (FDN 166) at [41] – [42]. -- 9 of 10 -- [2025] SASC 154 McIntyre J 8 Loss 29 The sixth respondent does not take issue with the overall effect or structure of the proposed amendments, rather he submits that the pleading at paragraph 76 remains insufficiently particularised. The sixth respondent accepts that the applicants are not able to particularise future costs, but says that it is apparent that there are substantial costs already incurred and, to the extent that they have been incurred, they can be particularised by way of a schedule as an annexure to the statement of claim. 30 The applicants’ position is that the appropriate time for quantification of the winding up costs claim will be a time at which the applicant’s claims are determined and a referral is made in accordance with proposed amended paragraph 76B which reads as follows: The Applicants say that it is not possible to quantify the true nature and extent of the costs of the liquidation pending the determination of the within proceedings and that the question of the costs occasioned by the Scheme should be referred to an expert pursuant to section 67 of the Supreme Court Act 1935 and/or referred to a Master of the Court to conduct an account and inquiry in relation to the same, following the conclusion of the trial. [emphasis in original] 31 The applicants say that it is unnecessary and premature to particularise and quantify the costs of the winding up but that they would be prepared to provide a schedule of broad costs incurred to date in the liquidation. They say, however, that this is not a matter for the pleading, rather it is a question for discovery. I agree. The basis of the claim is made plain in the pleading. The question of quantification however is a complex one which will largely be dealt with in discovery. If there are disputes as to issues of privilege for example, these can be dealt with in relation to discovery. I further see nothing objectionable in the pleading concerning referral to an expert under section 67 of the Supreme Court Act 1935 (SA) or an Associate Justice of the Court to conduct an enquiry and account. Indeed, it seems a sensible manner of proceeding in the circumstances but that will ultimately be a matter for the Trial Judge in the event that the applicants are successful. -- 10 of 10 --