In the matter of Meribel Invest FIR Pty Ltd

1. [1]

   By an amended originating process filed on 17 November 2025, Mr Raftery and Meribel Invest FIR Pty Ltd (Meribel FIR), as the first and second plaintiffs, seek relief concerning the ownership of shares in the third defendant, Firmus Grid Pty Ltd (Firmus Grid). The party seeking, or said to be seeking, substantive relief is Meribel FIR. Mr Raftery was initially the only plaintiff because Meribel FIR had been deregistered. It has since been reinstated, on Mr Raftery’s application. The principal targets and only active defendants in the proceedings are Mr James Madsen and Mr Benjamin Madsen, who are the fifth and sixth defendants.

2. [2]

   By an interlocutory process filed in Court on 17 March 2026, the Madsen parties seek an order that the amended originating process be dismissed with indemnity costs, and ancillary orders. The underlying basis of the application is that Mr Raftery has been managing Meribel FIR, including in relation to these proceedings, even though, unbeknown to the Madsen parties, on about 4 July 2025 Mr Raftery was disqualified by the Australian Securities and Investments Commission from managing corporations.

Mr Raftery’s disqualification

1. [3]

   There is no dispute that Mr Raftery was, and remains, disqualified from managing Meribel FIR (and any other corporation). Mr Raftery’s evidence is that he was labouring under a mistake as to the effect of the disqualification order, believing that the disqualification had been relevantly suspended by ASIC.

2. [4]

   An ASIC delegate made a decision on 30 June 2025 to make an order pursuant to s 206F of the Corporations Act 2001 (Cth) to disqualify Mr Raftery from managing corporations, without ASIC’s leave, for a period of two years and six months. The delegate was satisfied that Mr Raftery was the director of five failed companies and that he had breached his obligations to prevent insolvent trading under s 588G of the Corporations Act.

3. [5]

   The disqualification engaged s 206A of the Corporations Act, which provides:

4. [6]

   Notice of disqualification was served on Mr Raftery on 2 July 2025. Service was effected by emailing the notice to Mr Raftery’s solicitor, Mr Jonathan O’Loughlin, the principal of O’Loughlin Westhoff. On 4 July 2025, Mr O’Loughlin informed ASIC by email that Mr Raftery had received and read the notice of the decision.

5. [7]

   On 4 July 2025, applications were lodged with the Administrative Review Tribunal to review ASIC’s decision to disqualify Mr Raftery, and also to stay the decision. The application for a stay also sought confidentiality orders. Mr O’Loughlin sent a copy of the applications to ASIC by email on the same day.

6. [8]

   Mr O’Loughlin’s email to ASIC included the following statement:

7. [9]

   This communication from ASIC was the foundation for Mr Raftery’s stated belief that he could continue to manage corporations notwithstanding the disqualification order. It was a flimsy foundation. It is not contended by Mr Raftery now that the effect of this communication is that the disqualification had been postponed or suspended, or that ASIC had somehow consented to Mr Raftery continuing to manage corporations notwithstanding the disqualification. ASIC has power under s 206GAB of the Corporations Act to give written permission to a person who has been disqualified to manage a particular corporation or corporations. It was not suggested that written permission was given to permit Mr Raftery to manage Meribel FIR.

8. [10]

   On about 15 December 2025, ASIC served its written submissions on the application in the Administrative Review Tribunal for a stay and confidentiality orders. Those submissions made it clear that ASIC was not proceeding on the basis that Mr Raftery was permitted to manage any corporations pending the outcome of the any application in the Administrative Review Tribunal. Mr Raftery gave evidence that he was away skiing when he received ASIC’s submissions and read them quickly but did not come to appreciate that ASIC’s position was that he could not manage corporations.

9. [11]

   Mr Raftery’s evidence is that he only became aware that ASIC’s position was that he remained disqualified in late January or early February 2026. Mr O’Loughlin’s evidence is that he became aware of ASIC’s position when he read ASIC’s submissions “in the new year” and that ASIC’s position had come “as a considerable surprise” to him.

10. [12]

    Mr Raftery’s application for a stay and confidentiality orders was heard in the Administrative Review Tribunal on 10 February 2026. A decision was made by the Administrative Review Tribunal on 26 February 2026. The application failed. The substantive review application is yet to be heard.

11. [13]

    Mr Raftery’s evidence is that he took steps on 10 February 2026 to change ASIC’s records by removing his name as a current director of any company, including Meribel FIR.

12. [14]

    At some point, it appears that Ms Gillian Raftery was appointed as the sole director and secretary of Meribel FIR. Ms Raftery is Mr Raftery’s wife. The circumstances of her appointment are a little unclear on the evidence. It appears that there was some attempt to appoint her on 10 February 2026 but that it was not done properly. There is evidence that on 18 March 2026 at 3.30pm, Ms Raftery signed a consent to act as director and secretary of Meribel Capital Group Pty Ltd (Meribel Capital) and that the sole member of Meribel Capital, Ethele Pty Ltd (Ethele), resolved to appoint her as the sole director and secretary of Meribel Capital. Ms Raftery is the sole director and secretary of Ethele. Meribel Capital is the sole shareholder of Meribel FIR.

13. [15]

    On the same day apparently at 3.31pm, Ms Raftery signed a consent to act as director and secretary of Meribel FIR and Meribel Capital resolved to appoint her as director and secretary of Meribel FIR. Meribel Capital also purportedly resolved at the same time to ratify the removal, on 11 November 2025, of Mr B Madsen as a director of Meribel FIR and, alternatively, to remove Mr B Madsen as a director of Meribel FIR effective immediately.

14. [16]

    ASIC published a media release about Mr Raftery’s disqualification on 12 March 2026. That is how the Madsen parties found out about the disqualification.

15. [17]

    In cross-examination, Mr Raftery agreed that between the date of the hearing on 10 February 2026 and 12 March 2026, he did not instruct his solicitors to bring the disqualification to the attention of the Court or the Madsen parties, and that this was a deliberate decision made with knowledge on his part that it was the wrong thing to do.

Steps taken by Meribel FIR while under the control of Mr Raftery notwithstanding his disqualification

1. [18]

   These proceedings were commenced by Mr Raftery in his own name on 22 October 2025. As a first step in the proceedings, Mr Raftery applied to have Meribel FIR reinstated (having been voluntarily deregistered on 4 May 2023). Orders reinstating Meribel FIR were made by Black J on about 11 November 2025. In an affidavit relied on by Mr Raftery on that application, he swore that Mr B Madsen and himself were directors of Meribel FIR when it was deregistered. The affidavit included evidence that Meribel Capital had resolved to remove Mr B Madsen as a director on the reinstatement of Meribel FIR. The clear implication is that upon reinstatement, Mr Raftery would take control of Meribel FIR and the company would seek relief against the Madsen parties in these proceedings. That was the purpose of the reinstatement.

2. [19]

   There was no disclosure to Black J that Mr Raftery was disqualified from managing corporations. It was a material matter that should have been disclosed. It can readily be concluded that Black J would not have reinstated Meribel FIR if it had been made clear to him that it was to be managed by a person who was disqualified from doing so.

3. [20]

   Upon the reinstatement, Mr B Madsen had no role in the management of Meribel FIR and the ASIC register was updated to record that he ceased to be a director on 11 November 2025. As had been Mr Raftery’s intention, he took sole control of Meribel FIR.

4. [21]

   On about 14 November 2025, Mr Raftery caused Meribel FIR to retain O’Loughlin Westhoff to act for it in these proceedings. The firm has purportedly continued to act for the company since that time.

5. [22]

   Mr Raftery caused Meribel FIR to apply for a freezing order which restrained the Madsen parties (and the third and fourth defendants) from dealing with the shares of Firmus Grid. Black J made the freezing order on 17 November 2025. The order was supported an undertaking as to damages proffered by Meribel FIR. It was given on the instructions of Mr Raftery on behalf of Meribel FIR. Neither the Court nor any of the defendants were informed that Mr Raftery was disqualified from managing Meribel FIR at the time.

6. [23]

   Black J made other procedural directions on 17 November 2025. Black J fixed the matter to be heard (with other proceedings referred to as the AC Invest Proceedings) commencing on 13 April 2026, with an estimate of 5 days. The hearing date has since been altered. Pursuant to directions made by Black J, Mr Raftery caused Meribel FIR to file an Amended Points of Claim and Points of Reply. Meribel FIR has been getting the matter ready for hearing under the management (at least until recently) of Mr Raftery.

7. [24]

   Mr O’Loughlin gave evidence before me that, upon reflection, his understanding that Mr Raftery could continue to act as a director of Meribel FIR was incorrect and that the fact of the disqualification should have been brought to the attention of the Court at the time of the reinstatement application for Meribel FIR and at the time the company sought a freezing order. It was not suggested that Mr O’Loughlin deliberately misled the Court.

8. [25]

   In a letter dated 17 March 2026, ASIC was explicit in informing Mr Raftery that its position is that he has been disqualified from managing corporations since on or about 4 July 2025 and ASIC has done nothing to engage s 206GAB of the Corporations Act.

9. [26]

   When the current application first came before the Court, counsel for Meribel FIR indicated that to the extent it needs to be renewed, the undertaking as to damages is renewed.

The validity of steps taken in the proceedings

1. [27]

   Meribel FIR submitted that notwithstanding the operation of s 206A of the Corporations Act, steps taken by Mr Raftery as a director of Meribel FIR are not invalidated. It relied on the decision in MultitecFBM (Asia Pacific) Pty Ltd v Han [2008] NSWSC 1339; 69 ACSR 106 per Sackville AJ. In that case, a challenge to a solicitor’s retainer failed in circumstances where a person, who had been disqualified from managing a corporation, had been authorised by a company to retain the solicitors, see [30]-[39].

2. [28]

   Sackville AJ observed at [34] that Harry S Bagg’s Liquidation Warehouse Pty Ltd v Whittaker (1982) 44 NSWLR 421 is authority for the proposition that although the statutory prohibition on a disqualified person acting as a director created a criminal offence, it did not render such a person incapable of being validly appointed or acting as a director. In Harry S Bagg’s, Powell J observed as follows (at 424):

3. [29]

   In my view, the effect of s 206A(2) is clear. Once disqualified, a person ceases to be a director of any company. He or she will remain a director only if they have the requisite permission under s 206GAB or 206G. In cases where a person has been disqualified by ASIC, permission is only available under s 206GAB. That is because s 206G, which gives the court power to give leave to a person to manage a corporation, cannot be invoked where the person was disqualified by ASIC. It must also follow that a person who is disqualified from managing a corporation by ASIC can be appointed as a director of a corporation, but only if they have permission from ASIC under s 206GAB. Properly understood, I do not read Harry S Bagg’s or MultitecFBM as inconsistent with this conclusion.

4. [30]

   It may be correct that the mere fact that an action taken by Mr Raftery was in contravention of s 206A does not render that act invalid: see MultitecFBM at [34]-[36]; [52]-[56]. But an act undertaken by Mr Raftery without authority from Meribel FIR is not an act that can be attributed to Meribel FIR. Mr Raftery was not, and could not be, a director of Meribel FIR on and from about 2 July 2025 because he was disqualified and had no permission under s 206GAB. He did not, by virtue of holding office as a director, have authority to do anything on behalf of Meribel FIR. Nor was it shown that Mr Raftery otherwise had authority to take any step on behalf of Meribel FIR.

5. [31]

   It follows that Mr Raftery had no authority to retain O’Loughlin Westhoff on behalf of Meribel FIR and had no authority to instruct that firm to take any steps in the proceedings. That firm had no authority from Meribel FIR to take any step in the proceedings on behalf of Meribel FIR. Thus, every step purportedly taken in the proceedings by Meribel FIR (at least until Ms Raftery was appointed to be the director of Meribel FIR) was taken without authority. This conclusion is consistent with the reasoning of Fullerton J in Tara Communications Group Pty Ltd v Simons Ravden Pty Ltd [2012] NSWSC 862 at [9]-[11], which was relied on by the Madsen parties. The action can properly be described as a nullity: see MultitecFBM at [29].

Have the proceedings been adopted by Meribel FIR?

1. [32]

   Although the proceedings advanced in this Court by Meribel FIR can be described as a nullity, it was open to Meribel FIR to ratify the unauthorised acts by Mr Raftery and O’Loughlin Westhoff and to adopt the proceedings. The ordinary doctrine of ratification applies. Ratification is deemed to be equivalent to antecedent authority: MultitecFBM at [29].

2. [33]

   On 18 March 2026 at 3.34pm, a resolution entitled “resolution of single member company pursuant to clause 5.12 of the constitution and director resolution” was apparently made. The document was executed by Meribel Capital, Meribel FIR and Ethele, in each case by Ms Raftery as sole director and shareholder. The resolution was apparently made within minutes of Ms Raftery’s appointments as director of Meribel Capital and Meribel FIR and on the day after the Madsen parties brought the application now before me.

3. [34]

   The resolution purported to ratify (“to the extent that it is necessary”) a series of specific steps taken by Meribel FIR or Meribel Capital. The steps taken by Meribel FIR are recorded to be:

4. [35]

   The Court of Appeal stated the requirements necessary to establish ratification in Leybourne v Permanent Custodians Ltd [2010] NSWCA 78 at [131]-[134]. On the issue of knowledge, the Court of Appeal stated (at [134]):

5. [36]

   The difficulty is that there is virtually no evidence of the knowledge of Ms Raftery or Meribel Capital. Her knowledge is critical because on 18 March 2026, she purported to resolve to ratify steps taken by Meribel FIR in these proceedings, both as the sole director of Meribel FIR and also on behalf of its shareholder, Meribel Capital.

6. [37]

   Evidence was given by Mr Raftery and Mr O’Loughlin, but neither of them gave evidence of relevant matters communicated to Ms Raftery prior to the time she apparently executed the resolution that purported to ratify steps taken by Meribel FIR. The resolution itself records various matters by way of background. The background does little more than state that Meribel FIR was reinstated on 11 November 2025 pursuant to orders made by Black J and that it gave an undertaking as to damages in support of a freezing order on 17 November 2025.

7. [38]

   There is no evidence that Ms Raftery was aware on 18 March 2026 (or at any time) that in July 2025, Mr Raftery was disqualified by ASIC from managing any corporation and that in taking steps on behalf of Meribel FIR, Mr Raftery may have been committing an offence. In circumstances where neither Mr Raftery nor Mr O’Loughlin give evidence that they explained any of these matters to Ms Raftery, and she does not give evidence, I am not prepared to infer that she was aware of these matters.

8. [39]

   It was submitted for Meribel FIR and Mr Raftery that Ms Raftery should not have “to put on evidence to displace some patriarchal stereotype that she is nothing other than a puppet for her husband”. I am not proceeding on that stereotype. Rather, in circumstances where Ms Raftery could have given evidence of her knowledge but did not do so, I am not prepared to infer in Meribel FIR’s favour that Ms Raftery had any knowledge beyond matters that arise from documents that she apparently saw (including because she signed them). Having advanced ratification as a response to the challenge of want of authority, it was for Meribel FIR to establish that the purported ratification occurred with the requisite knowledge of the facts. Meribel FIR has not established any knowledge other than the possibility that certain steps by Mr Raftery and O’Loughlin Westhoff may require ratification.

9. [40]

   I am not satisfied that Ms Raftery had full knowledge of all the material circumstances. That is because I am not satisfied that she had knowledge of any of the following matters:

10. [41]

    For Ms Raftery to have full knowledge of material matters, she also needed to know that any decision she made as a director about ratification was one for her to make in the best interests of the company. The effect of s 206A(1)(c) of the Corporations Act (set out above) is that Mr Raftery was (and is) prohibited from communicating his instructions or wishes to Ms Raftery if he knew that Ms Raftery was accustomed to acting in accordance with his instructions or wishes or if he intended that she would act in accordance with them. There is no evidence of any communications between Mr Raftery and Ms Raftery, and I would not infer that he had communicated any instructions or wishes to her. But the prohibition serves to highlight the importance of Ms Raftery knowing that she was required to come to a conscientious decision about ratification and would need to guard against the risk that she was appointed to do her husband’s bidding.

11. [42]

    Nor am I satisfied that Ms Raftery (or Meribel Capital) intended to take the risk of ratification whatever the circumstances. The resolution is not couched in terms that reflect that intention. I do not infer such an intention.

12. [43]

    It follows that I am not satisfied that Meribel Capital (as shareholder) or Ms Raftery (as sole director) has ratified the steps taken in the proceedings by Meribel FIR by O’Loughlin Westhoff under instructions from Mr Raftery.

Consequences

1. [44]

   The Madsen parties submitted that the proceedings should be dismissed with an order for indemnity costs and leave to seek a third-party costs order. They submitted that neither Mr Raftery nor Meribel FIR should have any of the fruits of Mr Raftery’s conduct.

2. [45]

   Meribel FIR submitted that, if necessary, it could have the matter regularised under s 1322 of the Corporations Act. There was no debate before me about the merits of such an application.

3. [46]

   The appropriate response where a retainer is found to be invalid was considered by Parker J in Preston v Diaspora Holdings Pty Ltd; Diaspora Holdings Pty Ltd v Owners Corporation of Strata Plan 68608 [2019] NSWSC 651. His Honour noted at [222] that Powell J concluded in Harry S Bagg’s that where a retainer is found to be invalid, the proceedings should either be stayed or dismissed, with dismissal the more modern practice. Parker J observed that if the court is to dismiss the proceedings on the grounds of lack of authority, it should only do so in circumstances where the lack of authority has been finally established. His Honour also said it should be borne in mind that the dismissal is a summary one which does not involve a determination of the claims in the proceedings on their merits. Parker J also concluded (at [221]) that where proceedings are being conducted without authority but the unauthorised conduct could be ratified or, alternatively, validated by an order under s 1322(4), the proceedings should be adjourned for a sufficient time for any ratification to occur and any application under s 1322(4) to be made and dealt with.

4. [47]

   In this case, Meribel Capital, as sole shareholder of Meribel FIR, and Ms Raftery, as director of Meribel FIR, have taken steps to seek to ratify the conduct taken in the proceedings on Meribel FIR’s behalf. I have concluded the ratification was ineffective because it has not been established that Ms Raftery or Meribel Capital had the requisite knowledge. It may still be open to either or both Meribel Capital or Ms Raftery to ratify the conduct. Meribel FIR could also make an application under s 1322.

5. [48]

   In the circumstances, I consider that the appropriate course is to stay the proceedings for a short time. That will give Meribel Capital and Meribel FIR a short period to consider these reasons and take whatever course they consider appropriate to seek to regularise the proceedings, or not. The period of the stay, which is effectively an adjournment, should be short because the proceedings have some urgency and are presently fixed for final hearing to commence on 29 June 2026. If there is to be a hearing of the proceedings, that date should not be lost. If Meribel FIR does not take steps to regularise the proceedings they will stand dismissed.

6. [49]

   The freezing order made by Black J on 17 November 2025 is in a different category. I am satisfied that order was improperly obtained, because the application was made without authority and should be discharged. Meribel FIR is free to renew that application if it wishes. I will accede to an application for a short stay of that order to enable that to occur.

7. [50]

   As to costs, the Madsen parties have essentially succeeded on their application and prima facie are entitled to costs. If the proceedings are ultimately dismissed for want of authority, they would, prima facie, be entitled to their costs of the proceedings. A question would arise as to who should be ordered to pay those costs. Meribel FIR should not be ordered to pay costs of proceedings conducted in its name without authority. The appropriate course at this stage is to reserve costs.

8. [51]

   The Madsen parties submitted that there is a real risk that, despite any ratification, the proceedings may continue to constitute or facilitate an ongoing criminal offence, because of the prohibition in s 206A(1)(c). I accept that Mr Raftery will need to be cautious in communicating with Ms Raftery because of the prohibition in s 206A(1)(c). But I am not going to take any step against the possibility of an offence in circumstances where there is no evidence that an offence has been committed.

Orders

1. [52]

   I make the following orders:

   1. (1)

      Proceedings 2025/406702 are stayed until 5pm on 24 April 2026 to enable steps to be taken by Meribel FIR, if so advised, to bring an application under s 1322 of the Corporations Act or otherwise in respect of any steps taken in the proceedings by Meribel FIR to date.

   2. (2)

      Any application by Meribel FIR under order 1 must be filed and served, with supporting evidence, on or before 5pm on 13 April 2026.

   3. (3)

      If an application is made in accordance with order 2, the matter will be listed for directions on 15 April 2026 at 9:15am before me with a view to fixing an early date for the hearing of the application.

   4. (4)

      If no application is made in accordance with order 2, the proceedings will stand dismissed, subject to the question of costs.

   5. (5)

      Order 3 made by Black J on 17 November 2025 is discharged on and from midday on 9 April 2026.

   6. (6)

      Costs otherwise reserved.