Taxa Australia Pty Ltd v G Wang & Anor [2018] NSWSC 1412

Taxa Australia Pty Ltd v G Wang & Anor [2018] NSWSC 1412

Mr Wang, as director, breached statutory and general law duties (ss 180-182) by permitting and directing the diversion of Taxa’s funds to an account solely controlled by Ms Yao, exposing company funds to risk and misappropriation without company approval. Likewise, Ms Yao breached her duty of fidelity as an employee by using her control of the account to receive company payments, even in the context of unpaid entitlements, rather than using legitimate means. There was an enforceable (albeit informal) contract for Ms Yao’s salary at $60,000 per annum, but not for a higher sum or for Mr Wang. Offsets for proven salary unpaid to Ms Yao are allowed against her liability for misappropriated...

Parties
Plaintiff/cross Defendant to First Cross Claim/first Cross Defendant to Second Cross Claim: Taxa Australia Pty Ltd; First Defendant/cross Claimant to Second Cross Claim: Gang Wang; Second Defendant/cross Claimant to First Cross Claim: Xue Hua Yao; Second Cross Defendant to Second Cross Claim: Keming Diao; Third Cross Defendant to Second Cross Claim: Luca Borghese
Jurisdiction
Australia
Judgment Date
14 September 2018
Procedural Posture
Principal Judgment / Final Judgment After Trial
Outcome
Plaintiff succeeds against Mr Wang (entirely) and against Ms Yao (subject to offset). Mr Wang’s and Ms Yao’s cross-claims for greater sums rejected. Cross-claims for oppression or breach of duty by Diao and Borghese dismissed. Parties to bring agreed orders within 21 days. The amount recoverable by Taxa against Ms...
Legal Topics
Directors’ Duties, Fiduciary Duties, Breach of Employment Contract, Consideration, Employee Entitlements, Oppression, Misappropriation of Company Assets
Corporations Law Contract Law Employment Law Directors’ Duties Fiduciary Duties Breach of Employment Contract Consideration Employee Entitlements +2 more

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Parties

Taxa Australia Pty Ltd

Plaintiff/cross Defendant to First Cross Claim/first Cross Defendant to Second Cross Claim

Gang Wang

First Defendant/cross Claimant to Second Cross Claim

Xue Hua Yao

Second Defendant/cross Claimant to First Cross Claim

Keming Diao

Second Cross Defendant to Second Cross Claim

Luca Borghese

Third Cross Defendant to Second Cross Claim

Procedural Posture

Principal Judgment / Final Judgment After Trial

Legal Issues

  1. 1 Whether Mr Wang breached directors’ duties under the Corporations Act 2001 (Cth) ss 180, 181, 182 and general law duties
  2. 2 Whether Ms Yao breached duties as an employee and misappropriated company funds
  3. 3 Whether there was an enforceable agreement for payment of salary and entitlements to Ms Yao

Ratio Decidendi

Mr Wang, as director, breached statutory and general law duties (ss 180-182) by permitting and directing the diversion of Taxa’s funds to an account solely controlled by Ms Yao, exposing company funds to risk and misappropriation without company approval. Likewise, Ms Yao breached her duty of fidelity as an employee by using her control of the account to receive company payments, even in the context of unpaid entitlements, rather than using legitimate means. There was an enforceable (albeit informal) contract for Ms Yao’s salary at $60,000 per annum, but not for a higher sum or for Mr Wang. Offsets for proven salary unpaid to Ms Yao are allowed against her liability for misappropriated...

Court Disposition

Plaintiff succeeds against Mr Wang (entirely) and against Ms Yao (subject to offset). Mr Wang’s and Ms Yao’s cross-claims for greater sums rejected. Cross-claims for oppression or breach of duty by Diao and Borghese dismissed. Parties to bring agreed orders within 21 days. The amount recoverable by Taxa against Ms...

Orders

  • Plaintiff succeeds in its claim against Mr Wang, whose Cross-Claim fails in its entirety.
  • Plaintiff succeeds in its claim against Ms Yao, subject to offset of $85,845.15 for her unpaid salary, reducing liability to $74,295.37, and interest.