Joe is the sole director and shareholder of Homes Building Pty Ltd, a company that builds prestigious homes in Perth, Western Australia by mainly using sub-contractors and a few employees. Joe knew that due to the downturn in the building industry, the companys business was in trouble. For the last 6 to 8 months, Joe had been making late payments to his sub-contractors and had accrued $200,000 in overdue payments. Joe had also missed some payments to the Australian Taxation Office (ATO) for taxes deducted from employees pay as well as superannuation contributions.

Joe sought advice from his accountant, Bill from Water & Young. Bill advised Joe that he should to take urgent steps to stop the company from collapsing. Bill introduced Joe to Ken, a pre-insolvency adviser who offered to restructure Homes Building Pty Ltd for $25,000, which Joe accepted.

Ken advised Joe to register a new company Homes Building (WA) Pty Ltd, with Joe still remaining the sole director and shareholder of the newly formed company. This name was chosen so as not to alert the building industry that there had been a change. Ken also advised Joe that the newly formed company should purchase the most valuable asset of Homes Building Pty Ltd, being its future business projects. This was formally done by drawing up a Purchase Agreement and obtaining a valuation through a friend to give an impression that everything was above board. However, the amount paid for the future business projects was below market value.

After the restructure, Homes Building Pty Ltd had no assets left, but had an abundant amount of outstanding liabilities. Ken appointed a friendly liquidator to wind up Homes Building Pty Ltd and deregister that company. By doing this, the creditors, the sub-contractors and the ATO have no means of being paid for their outstanding debts from Homes Building Pty Ltd.

With reference to the concept of the veil of incorporation and lifting the veil of incorporation, discuss if Joe could be held liable for the debts of Homes Building Pty Ltd.