The case of JM World Au Pty Ltd (in liq) v Kim (No 2) NSWSC 1199, heard in the Supreme Court of New South Wales on 13 October 2025, involved the liquidator of JM World Au Pty Ltd (the first plaintiff) and Barry Anthony Taylor (the second plaintiff) taking action against Eun Hee Kim (the first defendant) and Yeong Jeen Bak (the second defendant). The case followed an earlier judgment delivered on 3 September 2025, which found that the claims by the plaintiffs against both defendants were successful, though not entirely. This subsequent judgment dealt with the parties’ attempts to agree on orders to give effect to the primary judgment, particularly concerning costs and other remaining issues.
Here are the key details of the case:
* **Case Name:** JM World Au Pty Ltd (in liq) v Kim (No 2)
* **Medium Neutral Citation:** NSWSC 1199
* **Court:** Supreme Court of New South Wales
* **Date of Decision:** 13 October 2025
* **Judges:** Pike J
* **Parties:**
* **Plaintiffs:** JM World Au Pty Ltd (in liquidation) (ACN 124 797 629) and Barry Anthony Taylor (liquidator)
* **Defendants:** Eun Hee Kim (first defendant) and Yeong Jeen Bak (second defendant)
* **File Number:** 2022/00282297
* **Relevant Legislation:** Uniform Civil Procedure Rules 2005 (NSW) rr 20.26 and 42.14(2)(b)(i), Corporations Act (Cth) 2001
* **Background:** The case stemmed from a previous judgment where the court found breaches of duty by the defendants as directors of JM World Au Pty Ltd. This judgment focused on implementing the prior decision, including determining final orders for declarations, payments, interest, and costs.
Summary of the judgement
The court, presided over by Justice Pike, delivered its final orders following an earlier judgment. The primary judgment had established that both Eun Hee Kim and Yeong Jeen Bak, as directors, had breached their duties to JM World Au Pty Ltd. This current judgment addressed several specific points that the parties hadn’t fully agreed upon.
Firstly, the court declined to make a declaration that the first plaintiff was indebted to SDC, as SDC was not a party to the proceedings and the declaration wasn’t sought in the initial pleadings. Secondly, regarding breaches related to a building contract for the Killara Property, the court adopted the defendants’ preferred wording for the orders. A request for leave to register a charge on the Killara Property was also refused, as the court found no compelling reason for expedition.
A significant part of the judgment concerned the calculation of interest. The court distinguished between claims related to building works and those concerning payments and retention. Simple interest was ordered for the building works claims, with a start date of 23 December 2020, aligning with the registration of a District Court judgment. For the payment and retention claims, compound interest at annual rests was ordered, starting from 5 May 2021, when the funds were paid away by the first plaintiff. The court found that compound interest was appropriate here due to funds being paid to third parties, including companies controlled by Mr Bak, whereas simple interest was deemed sufficient for the building works claims as no company funds had been fully paid out to satisfy a debt. The total interest awarded was substantial, with simple interest on building works claims amounting to $161,221.71 and compound interest for payment and retention claims reaching $342,420.89.
In relation to costs, the plaintiffs sought indemnity costs from certain dates, while the defendants argued for a 50% reduction in costs. The court ruled that indemnity costs should apply from 26 September 2023, based on an unaccepted offer of compromise. However, the court did allow a 20% reduction in the plaintiffs’ costs due to their lack of success on the “cash proposition” issue, which had taken up a significant portion of the hearing. The final order was that the defendants would pay 80% of the plaintiffs’ costs on the ordinary basis up to 25 September 2023 and on the indemnity basis thereafter.
Finally, the court declared that the first defendant should not be excused from liability under certain sections of the Corporations Act. While the plaintiffs sought the appointment of a receiver over the Killara Property, the court found no sufficient basis to grant this at that stage, given that it was the defendants’ family home and there was a prospect of the judgment amounts being paid. Liberty to apply was granted for future applications. The defendants’ request for a stay of the substantive orders was refused, as the court found no grounds for it, and an application for a stay would be better directed to the Court of Appeal. The final orders detailed declarations regarding breaches of duty, voidable transactions under the Corporations Act, and specific payment orders against both defendants, totalling over $1.3 million.
Questions and Answers
* Is it legal to award compound interest in NSW Supreme Court cases?
Yes, it is legal to award compound interest in NSW Supreme Court cases, particularly in equity matters where justice demands it to compensate for losses or to prevent a fiduciary from profiting from misuse of funds. The decision in this case, *JM World Au Pty Ltd (in liq) v Kim (No 2) NSWSC 1199*, highlights its application in situations involving payments and retention claims.
* What are the general duties of directors in Australia?
Directors in Australia have both general law and statutory duties, including acting in good faith in the best interests of the company, exercising powers for a proper purpose, avoiding conflicts of interest, and acting with care and diligence. Breaches of these duties can lead to personal liability, as seen in this case with both Ms Kim and Mr Bak.
* When might a court order costs on an indemnity basis?
A court may order costs on an indemnity basis when a party has unreasonably refused a reasonable offer of settlement, such as a *Calderbank* offer or an offer of compromise under the UCPR. In this case, the refusal of an offer of compromise led to an order for indemnity costs from a specific date.
* Can a liquidator claim for uncommercial transactions?
Yes, a liquidator can apply to the court to recover money or property involved in uncommercial transactions or voidable transactions under the *Corporations Act 2001* (Cth), such as those made when the company is insolvent or are creditor-defeating. This was a key element in the plaintiffs’ success in this case.
* What is the difference between simple and compound interest in a legal context?
Simple interest accrues only on the principal amount, whereas compound interest accrues on the principal amount plus any accumulated interest. In legal judgments, compound interest is often awarded in equity to make good a loss or to ensure a fiduciary does not profit from misconduct, as opposed to simple interest which is more common for straightforward monetary judgments.
* Can a company enter into a contract for a property it has no interest in?
While a company can enter into various contracts, doing so in a way that is detrimental to the company, such as entering a building contract for a property it has no interest in, could constitute a breach of directors’ duties if it’s not in the company’s best interests or is an uncommercial transaction. The court declared such a contract a breach in this case.
* What is an equitable charge over property?
An equitable charge is a right granted over a property to secure the payment of a debt or the performance of an obligation. It is distinct from a legal mortgage and can be created by a court order, as happened in this case where the Killara Property was charged to secure the judgment amount.
* What are the consequences of a director breaching their duties?
Consequences can include personal liability for losses caused to the company, disqualification from acting as a director, and orders to repay money or return property. In this case, the directors were held personally liable for significant sums.
* What is a Calderbank offer?
A *Calderbank* offer is a formal settlement offer made by one party to another outside of court rules. If the offer is not accepted and the offering party subsequently achieves a better outcome at trial, the court may award costs on an indemnity basis from the date the offer was made.
* What is the Corporations Act 2001 (Cth) and why is it relevant here?
The *Corporations Act 2001* governs companies in Australia and sets out directors’ duties and powers, as well as provisions for dealing with insolvent companies and voidable transactions. Several sections of the Act were invoked in this case concerning uncommercial and creditor-defeating dispositions.
* Can a court refuse to appoint a receiver?
Yes, the appointment of a receiver is a discretionary remedy. A court will consider various factors, including whether there is a proper basis, the impact on the parties, and whether other remedies are available. In this case, the court declined to appoint a receiver, finding no sufficient basis at that time.
* What happens if a company is in liquidation?
When a company is in liquidation, its assets are realised, and distributed to creditors and then shareholders, under the supervision of a liquidator. The liquidator has powers to pursue legal claims on behalf of the company, including those against former directors.
* What is a “voidable disposition” under the Corporations Act?
A voidable disposition is a transaction that a company entered into that can be set aside by a court, typically if it occurred when the company was insolvent or was an uncommercial transaction that disadvantages creditors. Examples include unfair preferences and unreasonable director-related dispositions.
* What does it mean for an appeal to be “rendered nugatory”?
An appeal is rendered nugatory if the orders made by the court below, if upheld, would have no practical effect or would be impossible to undo by the time the appeal is heard and decided. This can be a ground for seeking a stay of proceedings pending appeal.
* Is it legal to order a stay of execution on a monetary judgment?
Yes, a court has the power to order a stay of execution on a monetary judgment, usually to allow a party time to pay or to appeal the decision. However, stays are not automatically granted and require sufficient grounds to be shown. In this case, the stay was refused.
You can find more simplified cases from the Supreme Court of NSW and other courts on our website, including cases dealing with director’s duties and company liquidations: [https://medigosa.com/category/nsw-supreme-court-cases/](https://medigosa.com/category/nsw-supreme-court-cases/)