Low (Liquidator) v Hughes (No 2)

This case came out of the collapse of Titan Interactive, a company said in the pleadings to have provided website and related IT services, including digital marketing, social media and search engine marketing services, and website hosting. The liquidator and the company in liquidation sued Titan's directors and also two Pitcher Partners entities in Western Australia that were alleged to have acted as Titan's external accountants and tax advisers.

The pleaded commercial picture was not a one-off missed payment. It was a longer pattern. Titan was alleged to have managed some tax liabilities by entering payment arrangements with the Commissioner of Taxation, while expecting future tax refunds, research and development offsets and employee share scheme loans to help clear overdue liabilities. The plaintiffs said this was not just a cashflow management strategy. They alleged it was part of a broader insolvency problem and that Titan had been insolvent from at least 30 November 2013.

The directors were alleged to have allowed Titan to incur more than $5.5 million in debts between 21 April 2016 and 20 December 2018 while insolvent. The accounting defendants were not alleged to be directors. Instead, the plaintiffs alleged they failed to warn Titan of actual or likely insolvency, failed to properly advise on the legal effect of tax payment arrangements, and were knowingly concerned in, or party to, or aided and abetted, the directors' contraventions of sections 180(1) and 588G(2) of the Corporations Act.

The Court heard a separate question. That means it dealt with one legal issue in advance of any full trial on liability. The question was whether, assuming the facts alleged in the further amended statement of claim were established, the plaintiffs could obtain any of the relief sought against the fifth and sixth defendants in paragraphs 5 to 10 of the amended originating process, or any relief under section 1324 of the Corporations Act against those defendants at all.

That framing is important. This was not a final merits decision. It was a threshold question about statutory power and available remedies. The Court had to work out whether the pleaded accessorial case against the accounting defendants could support the particular injunctions and damages the plaintiffs had asked for, and whether section 1324 could operate at all against those defendants in the circumstances alleged.

The orders sought against the accounting defendants included injunctions restraining them from negotiating payment arrangements with the Commissioner for Titan and requiring them, when negotiating payment arrangements for clients or providing services in relation to those arrangements, to disclose the effect of the relevant tax administration provision. The plaintiffs also sought damages under section 1324(10), framed as amounts equal to the damage suffered by Titan resulting from the directors' contraventions of sections 180 and 588G.

The extract shows why the statutory structure mattered so much. Sections 180(1) and 588G(2) impose duties on directors, and section 180(1) also applies to other officers. The accounting defendants were alleged to have been involved in the directors' contraventions, not to have been the primary duty-holders under those provisions.

The Court set out section 1324 in detail. That section is not limited to direct contraventions. It also refers to conduct involving aiding, abetting, counselling or procuring a contravention, and being directly or indirectly knowingly concerned in, or party to, a contravention. If the section is engaged, the Court may grant injunctions and, where it has power to grant an injunction, may also order damages in addition to, or in substitution for, the injunction under section 1324(10).

The extract also explains an important historical point. At the time relevant to the pleaded conduct, a person involved in a contravention of sections 180(1) or 588G(2), as defined in section 79, was not taken automatically to have contravened those provisions. That mattered because compensation under section 1317H for civil penalty contraventions was not available against just anyone alleged to be involved. The Court noted that this position changed after legislative amendments that took effect on 13 March 2019, but the pleaded conduct in this case pre-dated that change.

That statutory background helps explain why the plaintiffs were trying to use section 1324 against the accounting defendants. The case was not simply about whether the directors could be liable. It was about whether an alleged accessory could be reached through section 1324, and if so, what kind of relief that section could support.

The Court answered the separate question in two parts. First, assuming the pleaded facts were established, the plaintiffs could not be granted any of the relief sought against the fifth and sixth defendants in paragraphs 5 to 10 of the amended originating process. Secondly, assuming those same facts, the plaintiffs could be granted relief under section 1324 of the Corporations Act against the fifth and sixth defendants.

That answer needs to be read carefully. It does not mean the plaintiffs won the remedies they had asked for. They did not. The Court expressly said the specific forms of relief sought in paragraphs 5 to 10 were not available. But it also did not accept that section 1324 was entirely unavailable. Some relief under section 1324 could be granted, at least in principle, on the assumed facts.

Because the available court text is incomplete, the full reasoning for that distinction is not fully set out here. So the safe reading is a limited one: the Court rejected the pleaded relief as framed in paragraphs 5 to 10, while leaving open that section 1324 relief in some form could still be available against the accounting defendants. Anyone wanting to rely on the case for the exact scope of section 1324 damages or injunctions should check the full judgment.

For directors, the case is a reminder that tax debt management and solvency management are not the same thing. A company may be negotiating with the ATO, expecting refunds or offsets, and still face serious questions about whether it can pay debts as and when they fall due. If your business is relying on payment arrangements, delayed remittances or hoped-for future inflows, that should trigger a real solvency review, not just a tax administration discussion.

For accountants and tax advisers, the case shows how quickly ordinary advisory work can become part of later insolvency litigation. The extract does not establish liability against the Pitcher entities. But it does show that plaintiffs may try to frame adviser conduct as accessorial involvement in directors' contraventions, especially where the adviser is said to have failed to warn about insolvency or failed to explain the legal effect of tax arrangements accurately.

For liquidators and claimants, the decision is also a pleading lesson. The statutory route matters. The Court's answer was strictly about legal availability of relief, not the merits. If the wrong form of order is sought, or if the relief is framed too broadly, that can fail even if the underlying factual allegations are assumed to be true.

The pleaded allegations in this case turned heavily on what was said, not said, and documented over time. That is a practical point for any business under pressure. If a company is entering payment arrangements with the Commissioner, the file should show what the arrangement actually covered, whether any deferral was granted, what assumptions were being made about future refunds or offsets, and what the board understood about the company's ability to pay debts generally.

For advisers, the same applies. If the retainer includes tax debt discussions, the records should show the scope of the engagement, the limits of the advice, any warnings given about insolvency risk, and whether the client was told to obtain legal or insolvency advice. Good records do not guarantee a defence, but poor records make later disputes much harder.

This is especially important where a client appears to be using tax arrangements as a substitute for broader restructuring. A payment arrangement may help with administration and timing, but it does not automatically answer the separate legal question of solvency. Businesses should make sure their internal documents and external advice reflect that distinction clearly.

The judgment was delivered by Vandongen J in the Federal Court of Australia on 10 February 2026. The hearing of the separate question took place on 15 October 2025. The case citation is Low (Liquidator) v Hughes (No 2) [2026] FCA 71.

This page explains the decision at the level supported by the available court text. Because that text is incomplete, the page should be read as a careful public explainer of the separate question, the pleaded case and the orders made, rather than a complete account of all reasoning in the judgment.