Liu v Miller-Kovacs, in the matter of Privato Enterprises Pty Limited

Liu v Miller-Kovacs, in the matter of Privato Enterprises Pty Limited [2025] FCA 1296 is a Federal Court dispute about an informal sale of a company that operated a Hornsby massage and adult services business. The parties disagreed about the most basic commercial points: who the real buyers were, whether the price was $300,000 or $50,000, how much had actually been paid, and whether later ASIC changes validly removed the buyers as shareholders.

The Court accepted the plaintiffs' account of the January 2024 transaction. It declared that a later Form 484 lodged on 27 March 2024 was ineffective to transfer the plaintiffs' shares, ordered the first and second defendants to repay $100,000 to each plaintiff with pre-judgment interest, required proper transfer instruments and a valid ASIC filing to be completed, and awarded costs to the plaintiffs. The fourth defendant's cross-claim was dismissed.

Privato Enterprises Pty Ltd was registered in December 2022 and leased premises in Hornsby from which it operated a business known as 187 Hornsby. By mid-December 2022, Jordan Miller-Kovacs, Yuan Tian and Ruixiang Xin were the directors, and each held 400 shares.

In January 2024, Jinlan Liu and Aixiu Yu moved to acquire the business by buying shares in the company. The Court described the purchase as largely undocumented. On 11 January 2024, Amanda met Jordan, Hong and Anna at the premises. A handwritten Mandarin document titled “Deposit for Contract of Business Sale” was signed, and Amanda paid $30,000 in cash. That document referred to a $30,000 deposit and a $20,000 balance, but the parties later gave completely different explanations of what it meant.

The plaintiffs said the real arrangement was a $300,000 purchase of all shares in Privato, involving Amanda, Lily and Anna. They said $30,000 was paid on 11 January and the balance was paid on 15 January in cash and by an RMB transfer to China. Hong and Anna said the price was only $50,000, that only the deposit had been paid, and that the plaintiffs later defaulted.

On or about 15 January 2024, the parties met at an accountant's office in Burwood. Board resolutions were passed so that Anna and Hong ceased being directors, Jordan remained sole director and secretary for the time being, and the shareholding changed to 792 shares for Amanda, 396 shares for Lily and 12 shares for Jordan. A Form 484 was lodged with ASIC that day. The extract also records that 250,000 RMB was transferred to a Chinese bank account of Hong's son.

After that, Amanda and Lily conducted the business and lived in accommodation at the rear of the premises. But Jordan retained practical control in important ways. The agreed facts say he did not disclose the banking passwords for the company account to Amanda or Lily, did not pay money to them from that account, and paid himself money from it.

The arrangement then collapsed. On 23 March 2024 there was a disagreement at the premises, Amanda and Lily were asked to leave, and they did not return to the business. On 27 March 2024, a further Form 484 was lodged. After that filing, ASIC recorded Hong, Anna and Jordan as directors and each as holding 400 shares. The plaintiffs said this later filing had been made without their consent or knowledge and unlawfully removed them from ownership.

The extract makes clear that the Court did not decide the case by looking only at what witnesses said in court. Halley J said the key factual disputes had to be resolved by weighing the conflicting evidence against contemporaneous documents, especially WeChat text messages and banking records, and against the inherent logic of events.

That approach mattered because the parties' accounts were fundamentally inconsistent. The judge noted that trial courts should be cautious about relying too heavily on witness demeanour, especially where evidence is given through interpreters and documents have been translated from Mandarin to English. Instead, the Court tested each version against objective material.

The 11 January deposit document was one important piece of evidence, but not the only one. The defendants relied on it as proof that the purchase price was $50,000. The plaintiffs said it did not reflect the true commercial arrangement. The Court accepted that Amanda's evidence about the document was not perfectly consistent, but found her explanation was consistent with the later logic of events, especially the payments made around 15 January.

The Court also examined WeChat messages exchanged before and on 15 January 2024. Those messages were used to assess who was contributing money, whether funds were being advanced, and how the parties themselves were describing the transaction at the time. The extract also refers to photographs showing a large amount of cash being counted at the 15 January meeting. In a case with no formal written sale agreement, those surrounding materials became central.

Witness credibility was also important. The judge said Amanda and Lily generally answered questions directly and that their evidence was, with one exception, internally consistent and consistent with contemporaneous objective evidence and the inherent logic of events.

By contrast, the judge said neither Anna nor Hong was a satisfactory witness, treated their evidence with considerable caution, and placed little, if any, weight on it except where it matched the logic of events, contemporaneous documents or admissions against interest.

On the extract, the Court accepted the plaintiffs' version of the January 2024 transaction rather than the defendants' account. Halley J said the plaintiffs' contentions about the terms on which they acquired the shares in Privato and the amounts paid for those shares had to be accepted. The judge rejected the defendants' attempt to characterise the deal as a $50,000 purchase with only the deposit paid.

The formal orders are especially important for business readers. First, the Court declared that the Form 484 lodged with ASIC on 27 March 2024 was ineffective in transferring title in the shares held by each plaintiff to the first, second and third defendants. That means the later ASIC filing did not itself validly strip the plaintiffs of title to their shares.

Second, the Court ordered the first and second defendants to pay $100,000 to each plaintiff, together with $14,666.08 to each by way of pre-judgment interest from 15 January 2024. Third, the Court ordered the plaintiffs to execute instruments of transfer of their shares to the first, second and third defendants so that each of those defendants would hold 400 shares, and ordered the defendants to lodge a validly executed Form 484 recording those transfers.

Fourth, the defendants were ordered to pay the plaintiffs' costs of the proceeding. The fourth defendant's cross-claim was dismissed, and the fourth defendant was ordered to pay the cross-defendants' costs of and incidental to the cross-claim, as taxed or agreed.

The catchwords also show that the case involved oppression under sections 232 and 233 of the Corporations Act and an unconscionable conduct claim under section 21 of the Australian Consumer Law, with damages sought under section 236. The extract indicates that relief for oppressive conduct was granted. However, the full reasoning on those statutory claims is not fully reproduced here, so anyone relying on the case for detailed doctrinal analysis should check the complete judgment.

This case is a practical warning about informal share sale deals. Many owners assume that once money has changed hands, the buyer has started operating the business and ASIC has been updated, the transaction is effectively complete. The judgment shows that those steps do not remove the need for a clear underlying agreement and proper transfer documents.

It also shows the difference between operating a business and controlling the company that owns it. Amanda and Lily were said to be conducting the business after 15 January 2024, but Jordan still controlled the company bank account passwords and paid himself from the account. That mismatch between day-to-day operation and legal control created obvious risk.

If you are buying shares in a company, settlement should deal with ownership, management authority, banking access, passwords, accounting systems, records and ASIC filings together.

Another lesson is that unusual funding arrangements must be documented. The extract suggests there were issues about who contributed funds, whether one person retained an interest informally, and whether money was advanced or loaned. If a person is contributing purchase money, holding an interest on trust, acting as nominee, or expecting repayment later, that should be written down clearly. Otherwise, the Court may have to reconstruct the arrangement from messages and conduct after the event.

The case also shows the danger of relying on cash. Cash can be legal, but it is much harder to prove. If a dispute arises, the Court will want objective evidence of who paid what, when, to whom and for what purpose. Receipts, transfer records and signed settlement statements are far safer than later recollections.

The judgment was delivered by Halley J in the Federal Court of Australia on 24 October 2025. The hearing took place from 11 to 13 June 2025. The orders required the plaintiffs to execute transfer instruments by 7 November 2025 and the defendants to lodge a validly executed Form 484 by 14 November 2025.

This explainer is suitable for public reading, but there is one important limit. The published extract contains the orders, agreed background facts, witness findings and substantial reasoning on the disputed January 2024 agreements, but it does not reproduce every part of the reasons in full. In particular, the detailed reasoning on oppression and unconscionable conduct should be checked against the complete judgment if you need to rely on the case for technical legal analysis.