- Notable Unreported Decision
- Appeal Determined (QCA)
SUPREME COURT OF QUEENSLAND
Hansen & Anor v Patrick & Ors  QSC 7
Allan John Hansen
Banchick Pty Ltd (ACN 011 066 018 as Trustee for the Hansen Family Discretionary Trust)
Robert William Patrick
Kathryn Louise Patrick
Firehose Pty Ltd ACN 054 417 757 (in its own right and/or as Trustee for the Patrick Family Discretionary Trust)
Patrick & Hansen Pty Ltd ACN 010 883 708 (in its own right and as Trustee for the Patrick & Hansen Unit Trust)
TS No 800 of 2006
Supreme Court at Townsville
24 January 2018
9, 10, 11, 14, 15, 16, 18 September 2015,
15 April 2016, further written submissions 22 April 2016.
MISLEADING AND DECEPTIVE CONDUCT – WHETHER REPRESENTATIONS MADE OR RELIED UPON – FIDUCIARY DUTY- WHETHER DUTY OWED TO SHAREHOLDER – WHETHER FIDUCIARY DUTY BREACHED – APPLICATION TO REOPEN CASE AND TENDER FRESH EVIDENCE – MONEY WITHHELD AT SETTLEMENT – MONEY HAD AND RECEIVED
Jones v Dunkel (159) 101 CLR 298
Leotta v Public Transport Commission (1976) 150 ALJR 666
Anderson v Gregory  QCA 419
Petchell v Du Pradal  QCA 132
Masters v Cameron (1954) 91 CLR 353
Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) to 27 NSWLR 326
Redhill Iron Pty Ltd v API Management Pty Ltd  WASC 323
Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd (2004) 2QdR 207
R v Birks (1990) 19 NSWLR 677
Australian Securities and Investment Commission v Hellicar & Ors (2013) 247 CLR 345
Hospital Products Ltd v United States Surgical Corporation & Ors (1984-1985) 156 CLR 41
Redhill Iron Pty Ltd the API Management Pty Ltd  WASC 323
News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410
Crawley v Short  NSWCA 410
Coleman v Myers (supra)
Coleman & Ors v Myers & Ors  2NZLR 225
Law v Law  1
Shermer v Baker (1970) 472 P (2d) 589
Roxborough v Rothmans of Pall Mall (2001) 208 CLR 516
Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1993) 182 CLR 51
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498
EB v CT (No 2)  QSC 306
Savage QC with Greggery for the Plaintiffs.
Griffin QC with Moon for the Defendants.
Connolly Suthers Lawyers for the Plaintiffs.
Roberts Nehmer McKee Lawyers for the Defendants.
- NORTH J: In about 1986 the first plaintiff and the first defendant formed a partnership which traded under the firm name or style as Patrick & Hansen. The partnership was formed for the purpose of acquiring earth moving equipment for lease to property developers and civil engineering contractors and, on the plaintiffs’ case, subsequently, for the purpose of land development and resale. On the plaintiffs’ case both attended to different duties in carrying out the business of the partnership. Broadly speaking it was alleged that Hansen attended to the outside field work, the purchasing and maintenance and operation of equipment, the supervision of works and post development maintenance while Patrick attended to the office administration and the marketing and sales of land. Patrick’s duties also included dealing with bankers, accountants, real estate agents and land purchasers both builders and private.
- On or about the 23rd February 1988 the fourth defendant, Patrick & Hansen Pty Ltd, was incorporated and became the successor to the business activities of the partnership Patrick & Hansen. Both the first plaintiff and the first defendant were issued with one ordinary fully paid share in the new company which in turn became the trustee of the Patrick & Hansen Unit Trust. In turn Banchick Pty Ltd, the second plaintiff, became the holder of ten units in the Patrick & Hansen Unit Trust which it held as trustee for the Hansen Family Discretionary Trust. At the same time Firehose Pty Ltd, the third defendant, became the holder of ten units in the Patrick & Hansen Unit Trust which it held as trustee for the Patrick Family Discretionary Trust.
- The second defendant is the wife of the first defendant and in turn a director, shareholder and (it is alleged) a directing mind of Firehose Pty Ltd, the third defendant, in its own right and as trustee for the Patrick Family Discretionary Trust. It is alleged that she is a beneficiary of the Patrick Family Discretionary Trust and a director and a directing mind and will of the fourth defendant Patrick & Hansen Pty Ltd in its own right and as trustee for the Patrick & Hansen Unit Trust.
- On the plaintiff’s case it was alleged that while the partnership subsisted Hansen, the first plaintiff, relied upon Patrick, the first defendant, for information and advice on matters peculiarly within Patrick’s range of duties and that Patrick knew that Hansen relied upon him for such information advice. Further it is alleged that the division of labour between Hansen and Patrick did not alter subsequent to the incorporation of the fourth defendant and the assumption of the business of the partnership by the fourth defendant in February 1988 so that consequently Hanson and also Banchick Pty Ltd, the second plaintiff, relied upon Patrick for information advice in much the same way as Hansen had relied upon Patrick when in partnership. It is alleged that the first defendant, Patrick, was effectively the managing director of the fourth defendant.
- As pleaded the plaintiffs’ case is that on or about the 23rd January 2004 Patrick telephoned Hansen to inform him of an interest acquiring the Hansen interests in the fourth defendant company and the associated unit trust and that as a consequence of that telephone conversation a meeting was held at the Rising Sun Hotel in Townsville on or about the 23rd January 2004 between the two men for the purposes of their discussion where, it is alleged, Patrick confirmed his interest in acquiring the Hansen interests and made certain representations. The representations alleged were:
“(a)The demand for land had been slow, continued to be slow and would remain slow for at least the next 3 to 5 years;
(aa)There had been only one telephone call inquiry about purchase of Patrick & Hansen Pty Ltd’s land in the previous four to five months;
- That due to the lack of demand for land at that time, the Patrick & Hansen Pty Ltd’s land would have to be held for at least 3 to 5 years before it could be sold;
- The sale price of the share and the units would have to reflect the lack of demand such that the value of the Patrick & Hansen Pty Ltd and/or the Unit Trust landholdings, warehouse and land held for development would have to be discounted;
- That an additional discount of $5,000.00 per lot would have to be allowed in order to offset the costs of holding the land for 3 to 5 years;
- The contract for Lot 41 at Wulguru had fallen through;
- That Lot 1 SP175572 was valued at $700,000.00; and
- That the warehouse at 9 Reward Court, Bohle was valued at $320,000.00 or if calculated by reference to Hansen’s one half share $160,000.00.”
- Further it is alleged that subsequent to this meeting there was a meeting between them on 6th February 2004 with accountants where values of various items of real property owned by the fourth defendant (and beneficially the unit trust) were discussed but where Patrick, is alleged, did not tell Hansen of certain matters. 
- The plaintiffs allege that the representations alleged to have been made at the meeting on the 23 January 2004 were false in that
“(i)The demand for land was not slow;
- The demand for land was in fact increasing;
- The land would not have to be held for 3 to 5 years before it could be sold;
- The Patrick & Hansen Pty Ltd land in fact had been sold and/or the subject of contracts and/or in the process of negotiation for sale at the very time the representations were being made, and that the total number of real property lots then under contract of sale, or the subject of an agreement with builders to buy such real property with a deferred settlement date, was nineteen (19) lots: (Particulars omitted)
- Land owned by Ochad Pty Ltd was in fact being sold and/or the subject of contracts and/or in the process of negotiation for sale at the very time that the representations were being made, and that the total number of real property lots then under contract of sale, or the subject of an agreement with builders to buy such real property with a deferred settlement date, was seventy-seven (77) lots; (Particulars omitted)
- It was therefore not necessary to discount the asking price for the land because of the slow demand or at all;
- It was therefore not necessary to further discount each lot by $5,000.00 for holding costs over 3 to 5 years;
- The contract for Lot 41 at Wulguru had not fallen through;
- Lot 1 SP175572 was valued at much more than 700,000.00;
- The warehouse at 9 Reward court, Bohle was valued at more than $320,000.00 or if calculated by reference to Hansen’s one half share $160,000.00; and therefore
- The land and assets were undervalued and understated in the books of account.”
- The plaintiffs’ allege that the representations were false and that that conduct together with the non disclosure of the matters complained of at paragraphs 29A to 29B was conduct in breach of the Trade Practices Act (as it was then in force) and that in reliance the plaintiffs entered into a share sale agreement and a unit sale agreement dated 13 February 2004. As a result of the alleged contraventions the plaintiffs alleged that they suffered loss and damage.
- The defendants in their defence join issue with the plaintiffs and set up a markedly different course of negotiations leading to the unit and share sales of 13 February 2004. They allege that the negotiations for the sale of the share and units by the Hansen interests in 2004 was preceded by a purchase on or about 31 March 2003, following negotiations between the first plaintiff and the first defendant, by the second plaintiff from the fourth defendant Patrick & Hansen Pty Ltd of that company’s earthmoving and related business for a price of $1,570,850 plus GST and that thereafter the second plaintiff commenced to operate the business under the name Hansen Constructions NQ Pty Ltd from premises at 4 Hogan Street, Stuart Townsville. This sale and purchase of the earthmoving business is not controversial. The defendants allege that subsequently in early October 2003 an employee (Ms Sue-Ellen Bannister), apparently authorised by the plaintiffs, telephoned Patrick and told him to the effect that Hansen wished to acquire from the fourth defendant all the land owned by the fourth defendant and also the interests of the Patrick family in the fourth defendant and the associated unit trust. The defendants allege that in that conversation Patrick informed Ms Bannister to the effect that he would not sell his interests but was willing to purchase the Hansen interests if Hansen wished to exit the fourth defendant. The defendants alleged that on 16 October 2003 Bannister handed to Patrick what purported to be a written estimate or valuation made by Hansen of the fourth defendants land and assets and that in response on 22 October 2003 Patrick forwarded to Hansen an estimate by Patrick of the value of part of the fourth defendants land and assets. Subsequently they allege that in November 2003 Hansen contacted Patrick by telephone and orally invited Patrick to meet with him at the Rising Sun Hotel in Townsville and that on a date shortly prior to 25 November 2003 Hansen and Patrick met at the Rising Sun Hotel. The defendants allege that, concerning the meeting they alleged occurred shortly prior to 25 November 2003 at the hotel that:
“11.11(1)During the meeting Patrick and Hansen discussed the documents which they had previously provided to each other being those documents referred to in paragraphs 11.6 and 11.8 hereof and discussed the values to be attributed to the respective landholdings referred to in those documents and Patrick, on behalf of Patrick and Firehose, offered to purchase the four main landholdings being Innes Estate residential land at $400,000 the Innes Estate shopping complex at $300,000 Brenton Circuit at $600,000 and Reward Court at $150,000.
11.11(2)Following the meeting and about 2 or 3 days later, Hansen telephoned Patrick and told him that Hansen and Banchick agreed to sell to Patrick and Firehose the interests of the former in PHPL at a price to be calculated by the accountants and for the purposes of calculating the final contract price the value he and Banchick agreed to be attributed to PHPL’s four main landholdings was as offered by Patrick Innes residential land $400,000, the Innes Estate shopping complex $300,000, Brenton Circuit $600,000 and Reward Court $150,000 whereupon a binding and enforceable contract came into effect (“the agreed sale”);”
(Under linings and strikings out omitted)
- The defendants further allege that subsequently on 25 November Patrick met with representatives of the fourth defendant’s accountants in order to take advice upon and bring into effect the sale and that the accountants suggested that for accounting purposes a cut off date for the accounts had to be agreed and that 30 November 2003 was appropriate. It is further alleged that on 1 December 2003 Hansen met with the accountants and that he agreed to the suggestion that 30 November 2003 was an appropriate date for accounting purposes and accordingly, it is alleged, it became a term of the agreed sale that the cut off date would be 30 November 2003.
- Earlier I alluded that the plaintiffs claim against the defendants not only for contraventions of the Trade Practices Act but also for breaches of fiduciary duties alleged to have been owed and claims for monies had and received. The foregoing is intended as a summary of the respective contentions of the parties focussing upon the alleged misleading and deceptive conduct and serves to identify the factual differences between the parties. In what follows is a summary of the evidence given by witnesses that bears upon these issues and an examination of the documentary evidence so far as it bears upon these issues. In proceeding this way I have not overlooked that it is necessary for me to consider the additional claims in light of the evidence and also to address the competing contentions and evidence with respect to the quantum of damage or entitlement to compensation as the case may be.
Evidence of witnesses
- In evidence Hansen said that he was responsible for the onsite direction of machinery operations and sub-contractors, and of organising the general engineering practices whereas Patrick was the office manager in charge of clerical and administrative duties including accounts dealings with real estate agents and attending to land sales. In early 2003 Hansen purchased the earth moving side of the fourth defendant’s business from Patrick’s interest which had become busy in contrast to the land sale side of the business where the market was at the time ‘dead’. In his evidence Hansen emphasised that he was very busy with machinery hire and civil earth moving and that shortly after the purchase of the earth moving part of the business he purchased new premises at Hogan Street where he established an office and provision for storage of machinery. Hansen gave evidence that after the purchase of the earth moving business and prior to October 2003 he spoke to Patrick infrequently.
- He identified the land the company owned in late 2003 and early 2002. The holdings included blocks of land at Innes, Wulguru, Woodland Gardens and Brenton Park. Some of the land was undeveloped and other parts had been developed by Hansen. Hansen gave evidence of a conversation he said he had with Patrick concerning these assets where the values were discussed and agreed. According to Hansen he received a call from Patrick in the week prior to 23 January 2004 in which Patrick asked Hansen if he Hansen was interested in selling his interest in the company. In response Hansen said that he suggested to Patrick that he “put something together” on the values of the land.
- Hansen said that he met Patrick at the Rising Sun Hotel on the 23 January 2004 and it was at that meeting where the values of the land parcels were discussed and agreed. According to Hansen Patrick valued the shopping centre site at Innes at $700,000. Hansen said he was unaware of any offers to purchase that land or any attempt to sell it or that a real estate agent had been retained to sell the land for between $2,500,000 and $3,000,000.
- Concerning the property at 9 Reward Court, Bohle Hansen said that Patrick told him it was valued at $320,000 and that he Patrick had been told by a real estate agent that is what it was worth. Concerning the property at Wulguru Hansen claimed that he was unaware that a contract for the sale of property had been terminated on 16 January and that a subsequent contract had been entered into on the same day for the sale of that land. Referring to the marketability and prospect of selling the land Patrick told Hansen that there was no interest or demand at the time for the company’s land and that Patrick wanted a reduction of $5,000 per lot for holding costs. In this context Hansen said Patrick told him that he would probably be stuck with the land for three to five years and that “we’ve had one phone call in the last four or five months and nothing has come of it.”
- Following the meeting on 23 January 2004 Patrick sent CE Smith, Hansen’s accountants, a ‘layout’ of the purchase price and on 6 February 2004 there was a meeting at the office of CE Smith attended by himself, Patrick and Messrs Engel and Wilson from CE Smith where there were discussions about the transaction. According to Hansen Mr Graham Wilson did much of the talking and there were discussions about a cut off date for accounting purposes only. Hansen said that the next meeting was on 13 February 2004 again held at the office of CE Smith. Those in attendance included Graham Wilson and Gary Engel from CE Smith, himself, Patrick, the bank manager from the National Bank and the lawyers acting for Hansen and Patrick respectively in the transaction. Hansen said that at that meeting arrangements were discussed so that settlement could be completed on 17th February consequently there were discussions about cheques to be drawn and the opening of any necessary bank accounts. He said that both the share sale and the unit sale agreements were signed or executed on 13 February 2004 with settlement occurring on 17 February 2004. Hansen said he relied upon, he trusted Patrick and he took everything Patrick told him as the truth and that what he was told “played every part in me signing the land”.
- Hansen gave evidence concerning his secretary, Sue-Ellen Bannister, who he said had been employed by Patrick when they both owned the civil construction operations. When Hansen purchased that part of the business she came to work for him in his office as a secretary. He said that he had not given her any instructions to communicate with Patrick about the sale of purchase of the land business and denied having any conversations with her about that in October, November or December 2003 as it “wasn’t a topic then”. Hansen agreed that he had met with his accountant, Gary Engel from CE Smith on 1 December 2003 but he said the purpose of the meeting was to discuss his personal and his company tax. He denied that he had any discussion in 2003 with Patrick concerning any purchase or sale of his interests in the company and the related unit trust.
- During cross examination, Hansen admitted to his involvement in the purchase of property by the company from 1991 to 1994 and their profits. But in more recent times he said he knew nothing.
- When cross examined however he stated he was making private home purchases. He was cross examined quite extensively on his dealings, that is the purchases and sales of undeveloped and developed land, with a number of properties purchased as recently as 2014 and he agreed he had purchased and developed these properties for the purposes of sale at a profit. He maintained that he had only limited involvement with Patrick estimating development costs and profits on properties, asserting Patrick was responsible for that and reiterated his role in the Company, that is, the civil earthmoving and building, and Patrick’s role in administration. He denied that on a weekly basis he was given brochures by Mr Neil Leader. He was cross examined about his knowledge of the contents of files relating to land sales. He agreed that some land sale records were brought to his office at Hogan Street following the purchase of the earth moving business but he denied that he had knowledge of the contents of files.
- Regarding the purchase of Hansen’s interests in the Company, Hansen denied the initial contact was by Sue-Ellen Bannister and that she contacted Patrick on his behalf prior to 16 October 2003 asking if Patrick was interested in selling his interest to Hansen. Hansen denied having any knowledge of the document styled as a fax dated 16th October 2003.
- Hansen described that a few weeks after settlement, he discovered the property he sold to Patrick had begun to be developed despite being told there was no movement in the market, and that there had been five sales before settlement in January Hansen was not aware of. Further, it was discovered that Patrick had sold about 50 blocks owned by Ochad Pty Ltd.
- Hansen denied having any meetings or discussions, or causing Bannister to have discussions, in 2003 regarding the sale of his interests in the Company to Patrick. Hansen proffered the meeting between himself and Gary Engel on 1 December 2003 at CE Smith was regarding his company tax and personal tax.
- He denied the Brenton land became unpopular from the late 1990’s due to the creation of a number of subdivisions closer to Townsville, instead claiming it was due to a general market collapse in Townsville.
- When asked whether he was influenced to accept the transaction by his own desire to abandon his business association with Patrick, Hansen said he was influenced only by the information provided to him by Patrick that there was no movement in the market. Hansen agreed there was a risk as to when the relevant properties could be sold, and denied making any inquiries of his own about the transaction. He agreed he did not get a valuation.
- In examination in chief, Patrick agreed his role in the business was mainly administrative, while Hansen’s role was on site. Patrick said Hansen didn’t have a lot to do with selling the land, but was aware of land sales from discussions both would have.
- Patrick said the first contact in regard to the purchase of Hansen’s interest was before 16 October 2003 in a call from Sue-Ellen Bannister, who told him that Hansen is going to buy him out of the partnership. Patrick said he told Bannister he had no interest in selling to Hansen, but that he would buy him out. This happened some time before the 16th October 2003. On around the 16th October 2003, Bannister gave Patrick a piece of paper from Hansen, naming four properties and their values. On 22 October 2003 he sent to Hansen by fax some calculation concerning “Stoney Creek”.
- Some days later in a telephone call from Hansen Patrick said he agreed to meet Hansen at the Rising Sun Hotel in late October or early November, where they discussed the four parcels of land and negotiated their values. Patrick told Hansen what he Patrick was prepared to offer for the land. Patrick was told by Hansen he would get back to him on the prices, and on some day before the 20th November 2003 he telephoned and accepted Patrick’s offer. The amounts that were agreed he said were the figures subsequently explained by a fax to the accountants of 27 January 2004.
- On the 20th November 2003, Patrick organised a meeting with CE Smith accountants for the 25th November regarding the purchase of Hansen’s interests. At the meeting, a cut-off date for the accounts was nominated as the 30th November 2011 and Patrick was told to set up separate bank accounts for the unit trust and land. These accounts were opened on the 8th December 2003.
- In cross examination, Patrick said that after the meeting at the Rising Sun Hotel in late October or early November, Hansen called Patrick to accept the offer Patrick had given him at the meeting. Patrick said he did not have another meeting with Hansen between the meeting at the Rising Sun Hotel and the settlement on 13th February 2004. There were some telephone calls between these dates regarding settlement but not about prices for the land.
- Patrick was cross examined about a property at Lot 41 in Wulguru and a contract for sale in September of 2003 that was terminated on 16th January 2004. Another contract with a different purchaser was entered into on the same day, for a higher sale price, $55,000. Some time after 16 January 2004 Patrick told the accountants that the contract of September had fallen over. Patrick said he was unsure whether he spoke to Hansen about the Wulguru property and the completion of the purchase around that time. The figures contained in the fax from Ochad to Hansen on 6th February 2004 were said to include the value of the Wulguru properties, including Lot 41, which was $45,000 for the half-share. On the 27th January 2004 in his email to the accountants, Patrick said he would be prepared to offer Hansen $45,000 for the Wulguru property. The balance sheet contained three provisions; Innes Woodlands, Wulguru and Innes Woodlands en globo. Innes Woodlands en globo is a reference to both the shopping centre and the residential estate at the Innes Estate, and was listed on the balance sheet as $1.4 million, which Patrick received on or before the 6th February 2004.
- Patrick was cross-examined extensively on the accounts of the Company, particularly the ‘number 2 account’, where he gave evidence that it was set up on the advice of his accountant to facilitate the ‘closing off date’ on 30th November 2003 and was set up for all incurred profits and expenses after that date.
- Graham John Wilson gave evidence that in 2003 he was the accountant for both men and their companies. He referred to the entry in his billing work sheets, dated 24th November 2003 which related to the Patrick and Hansen unit trust. Wilson then met with Patrick on 25th November 2003, when he discussed the share sale and the sale of the units in the trust. On 1 December 2003 he met with Hansen for one and a half hours concerning the sale of the shares and the units in the trust. Wilson gave evidence that 30 November 2003 was the cut-off date, and he gave Patrick advice to set up a ‘number 2 account’ for any income and expenses after that date. He explained that having been told of the potential for the sale to Patrick earlier in the month he advised Patrick that 30 November could be a cut-off date for the purpose of drafting the financial statements in order to determine the net asset position.
- Wilson gave evidence that after these initial meetings he gave instructions to Gary Engel to commence the normal accountancy work with a view to the settlement of the transactions. The work Engel did would have included obtaining information from the book keeper Sue-Ellen Bannister. Accounts were prepared on historical values and tax provisions and interim distributions were calculated in relation to the company and the unit trust. Settlement of the transaction occurred on 13 February 2004 and present at the transaction were Patrick, Hansen, Engel, a representative of the National Australia Bank and a solicitor acting on behalf of Hansen and the Hansen’s interest as well as himself. By reference to the billing worksheet Wilson identified conversations he had with Hansen and meetings he had with both Patrick and Hansen in early February concerning the transaction.
- In cross examination he agreed that without assistance from the only remaining contemporaneous historical records kept by the accountancy firm, the work in progress records and the billing worksheets, he had very little recollection of what occurred twelve years ago.
- Gary Engel gave evidence in Mr Patrick’s case. He was an accountant working for CE Smith in 2003 and 2004. He had carried out work for the Patrick and the Hansen entities and interests since about 1990 or 1991.
- On 20 November 2003 he received a telephone call from Patrick informing him that Patrick had met with Hansen and that Patrick was to acquire the Hansen interests in the companies and the trust that owned the land. Engel said that judging from the units of time assigned to the telephone call in the records the telephone conversation took approximately half an hour. The next day Engel spoke to Graham Wilson, his principal, about the telephone call and the issue. On 25 November 2003 Engel spent time preparing for discussions in a meeting with Patrick and Graham Wilson and attending that meeting which concerned the acquisition of shares and units. Coincidentally that day, 25 November, Engel identified an entry recording that he had a discussion with Hansen that day concerning the acquisition of a BMW motor vehicle.
- Subsequently on 1 December 2003 Engel attended a meeting with Hansen and with Graham Wilson where the proposed sale was discussed. His recollection refreshed from a reference to his time sheet is that the meeting took approximately two hours and he spent .8 of an hour preparing for the meeting. Engel said that his recollection is that discussions were in general terms as to what would be required of CE Smith to be able to come to a position where the firm could say what the value of the interests would be worth. Engel disagreed that the meeting was related to the question of the purchase of a BMW by Hansen. He said that an issue such as that would not require a meeting with two senior accountants for that period of time.
- According to the timesheet records Engel said that he spent time on 7 January working on “interim accounts to 30/11/03”.
- Engel was asked why 30 November 2003 was adopted as the date for the preparation of accounts. He said that it emerged as a result of the information from Patrick on 20th November of the intention in the mutual agreement that Patrick was to acquire the Hansen interests. The end of the month appeared to be a good time to prepare accounts given “the expediency that was required with the resolving of” issues. Then Engel’s attention was drawn to a timesheet for 9 January 2004. He said that it recorded a billing for work on the interim accounts which included going to the Hogan Street office to discuss queries he had with Sue-Ellen Bannister who was an administration secretary who worked at the Hogan Street office.
- Sue-Ellen Bannister was called in the defendant’s case. She worked from 2002 in an administration capacity for the Hansen and Patrick entities. Originally she worked at premises at Annandale helping Patrick with the administration of the office, taking phone calls, doing banking, updating QuickBooks, attending to sales, contracts and updating spreadsheets relating to sales and overseeing payments. Following the sale of the earthmoving side of the business she moved office to Magna Court and ultimately to the premises at Hogan Street. She continued to carry out the same work that she’d been doing. She said that all the folders and files went to Hogan Street. Because of staffing issues she took on the role of filing documents relating to land sales and settlements and any documentation like that including cheques. She cross referenced these records to the folders relevant to the estates. She confirmed that the files were kept at the offices ultimately at Hogan Street after the moves. She described the file keeping procedure and where current and older files were stored at Hogan Street. She confirmed that in the period from October 2003 until 13 February 2004 and thereafter until she left her duties in relation to record keeping, file administration and noting settlements and payments concerning land contracts continued as she described.
- She recognised boxes containing files and documentation that had been at Hogan Street and through her several files or folders were identified and tendered.
- She recalled being asked by Hansen to pass on a message to Patrick. Hansen told her that he wanted to buy Patrick out and told her to ring Patrick and tell him. She did that and Patrick told her to put it in writing and asked her to get Hansen to put it in writing. She identified the document of 16 October 2003 and said that it was written by her and that Hansen had told her what to write and he was with her when she wrote the document. Her recollection is that she faxed it to Patrick.
- In November 2003 Hansen asked Bannister to go through every folder with respect to all the estates to work out exactly how much money was there being what prices were on the land. She said that both she and Hansen went through all the files together. At times Gary Engel who was preparing balance sheets would seek information from her and she would give it to him.
- With respect to the facsimile of 22 October 2002 she recognised the document and she was asked to compare it with a corresponding copy contained in the file Exhibit 11. Concerning the copy in Exhibit 11 she confirmed that her handwriting appeared on parts of the document. The document concerned calculations prepared by Patrick concerning the land at Stoney Creek. She said that Hansen saw the document and that both he and she went through the files relevant to that estate and checked each lot.
- She was asked to say what Hansen’s involvement was in sales and settlement of land generally or the degree of his knowledge and involvement in such matters. She said that if there was any land upon which there was a contract she would inform him, that he knew when settlements were due on contracts and he’d ask her if a settlement had occurred. Sometimes she would ring him and tell him that a contract had settled. Hansen would check the state of bank accounts to confirm that settlement monies had been banked and that he had access to the bank accounts on the internet at home.
- Concerning the banking of money and receipts post 30 November 2003 she said that it was her practise to check with Gary Engel whether money should be banked which particular account. She said that she had discussions with Hansen about these matters and sometimes she would seek clarification from Patrick about these bankings. She was aware that 30 November 2003 was a cut off for the purposes of the impending sale by Hansen to Patrick.
- When cross examined she confirmed that she left employment in 2004 after the settlement of the sale by Hansen to Patrick. The first time she was asked to recall events was in 2014. All the files and her diary were left at the Hogan Street office. The first time she had an opportunity to look at the files was in 2015 some weeks before trial.
- For the plaintiff’s it was submitted that the events material to the causes of action occurred in the period from 23 January to 13 February 2004. Anticipating the defendant’s submission that discussions leading to an agreement had occurred in 2003 the plaintiff’s submitted that they were entitled to judgment if the evidence ultimately accepted was that representations had been made on a date other than the dates pleaded by the plaintiff’s. The plaintiffs submitted that there should be findings that representations were made as pleaded. Further the plaintiffs submitted that the credit of Mr Patrick was impugned by some of his evidence and that the evidence of Messrs Wilson and Engel and Ms Bannister affected neither the credibility or reliability of the evidence of Mr Hansen nor did it establish that the representations alleged were neither made nor that for material purposes the discussions leading to the agreement did not occur in the timeframe as alleged by Mr Hansen. The plaintiffs submitted, relying upon the “Rule in Browne v Dunn” and also invoking Jones v Dunkel that by reason of the pleadings and the conduct of the trial evidence from some of the defendant’s witnesses should be rejected or that findings should be made consistent with the case for the plaintiffs. The complaints involved the asserted failure of Patrick and Gary Engel to give evidence in support of the pleaded contentions concerning the bank accounts opened in December 2003. To the same effect they submitted that the failure to lead evidence concerning sales and contracts for lots, the documents having been put into evidence and in some cases the subject of deemed admissions should result in an inferential finding that the market for land between October 2003 and March 2004 was not slow and that it was false for Patrick to maintain that to Hansen. In the course of detailed submissions concerning the evidence and pleadings relating to Hansen’s case that representations were made by Patrick I was directed to the opening of the case for Patrick and apparent admissions that Patrick might well have said that the demand for land had been slow. This issue was developed at length in submissions. Detailed submissions were made that Patrick owed Hansen a fiduciary duty in the circumstances of the case including that they had been partners and that following the incorporation of the fourth defendant the division of duties continued and that representations continue while negotiations continue. Aspects of the law concerning remedies, co-extensive liability and causation in the context of a fiduciary obligation were made. Counsel for Hansen made extensive submissions in support of the claim for relief under the Trade Practices Act which included the reliability of Firehose Pty Ltd (the third defendant) for the actions of Patrick and as a consequence of which the co-extensive liability of both Patrick and Mrs Patrick (the second defendant). This included submissions in support of liability arising from the use of telephonic and like services. Separate detailed submissions in support of the liability of Firehose Pty Ltd by reason of the matters alleged in paragraphs 29A to 29P of the statement of claim were made. Submissions were also made concerning the valuation of the interest sold, the calculation of damages and compensation and in support of the claim for money had and received.
- The primary submission by the defendants was that the plaintiff’s case should be dismissed because the plaintiffs had not proven that the meeting alleged in the statement of claim occurred. It was submitted that the evidence demonstrated that Hanson was not a creditable witness and that the evidence tended to corroborate the evidence of Patrick. It was submitted that the evidence did not establish that any thing said by Patrick induced Hansen to enter into the agreements. Further it was submitted that when, on Patrick’s evidence, Hansen telephoned to say that he accepted Patrick’s offer that an agreement for the sale of the shares and units in the trust within the first category of Masters v Cameron came into existence. The defendants submitted that the Trade Practices Act did not apply to the dealings between the parties and the circumstances of this case and that the evidence did not establish that either of the parties to the sale and purchase of the share and the units in the trust were acting in trade or commerce. It was submitted that there was no evidence to support any finding that Mrs Patrick (the second defendant) was in any way involved with or had knowledge of or aided or abetted any contravention of the Trade Practices Act even if it did occur. It was submitted that Patrick’s evidence on this issue was unchallenged. Further extensive submissions were made direct to the evidence in support of the contention that the plaintiffs had not established actionable representations capable of invoking the Trade Practices Act. The defendants submitted that the evidence did not establish that Patrick owed Hansen and the second defendant a fiduciary duty in the circumstances. It was submitted that the evidence did not establish the circumstances of ascendancy, influence, vulnerability, trust, confidence or dependence necessary for the conclusion that such a duty was owed. Submissions were made upon the town planning and valuation evidence from which it was submitted that the experts called upon the defendant should be preferred to those who gave evidence or provided reports in the case for the plaintiffs. Concerning the plaintiff’s claim for monies had and received in respect of the provision for taxation liability the defendants submitted that the admitted pleading was vague, that the plaintiffs had not otherwise established a claim or entitlement and it was pointed out that no claim for the money or for interest on the money was advanced in the statement of claim. Finally the defendants made a submission with respect to the assessment of damages or compensation in the event the plaintiffs were successful.
Findings on Credit
- Both Mr Hansen and Mr Patrick impressed me as experienced and astute businessmen. Plainly they well knew each other and because of their long association it is likely both had an astute appreciation of the other’s strengths and vulnerabilities. The evidence suggests that by late 2003 they were not on particularly good terms. By the time of trial they were giving evidence of matters that had occurred some twelve years before. In evidence the demeanour of neither suggested that for that reason alone the evidence of either one was reliable or unreliable. But the time elapse between the events of late 2003 and early 2004 and trial must have affected the reliability of the memory of both, indeed all the witnesses relating to the events. To a greater or lesser extent each witness relied, in order to refresh memory, upon contemporaneous documents. But the documentary trail is in a sense fragmentary. I am not suggesting documents have been deliberately withheld or destroyed, but from them alone it is not possible to reliably reconstruct in detail the content of discussions between or involving Hansen or Patrick. Further, apart from events such as meetings with accountants and the settlement meetings in February 2004 the documents offer at best limited assistance in determining when or where meetings occurred between Hansen and Patrick. Nor do the telephone records offer significant, let alone decisive, assistance.
- In evidence on six occasions Hansen denied that anything relevant to the sale by him to Patrick of the land interests which personally involved him happened in 2003. “It wasn’t a topic then.” He emphatically insisted that nothing of relevance to the transaction involving him happened until January 2004. The evidence of Patrick supported by that of Wilson, Engel and Bannister and the documents they identified decisively contradicts that. Ultimately for reasons I will shortly explain, I have concluded that the evidence of Hansen should be rejected entirely, not only on the issue of when discussions and negotiations leading to the sale took place but also his evidence of the content of the discussions including what he was told and what he was not told and any assertion that either he relied upon anything that Patrick told him or that what he was told induced him or his company to enter into and sell the land interests to Patrick. But before that I will first explain why and which parts of the evidence of the witnesses Patrick, Wilson, Engel and Bannister I accept.
- Both Wilson and Engel were accountants for both Hansen and Patrick. They had acted for both and their joint and several interests for a long time. It was not suggested that either had any interest to assist or prefer the interests of either Patrick or Hansen. Time had affected the memory of both of the events of November 2003 to February 2004, perhaps Wilson more than Engel. But I accept that both, with the benefit of their respective time sheets and billing records, gave reliable evidence of the meetings they held, who attended, the matters the subject of discussion and advice given and the decisions made. I accept Engel’s account of his involvement in the preparation of the balance sheets with a cut off of November 2003 and his contacts with Bannister for information necessary to that preparation. I accept the evidence of Wilson and Engel of the reasons for the selection of 30 November 2003 as a cut off date.
- Sue-Ellen Bannister was an impressive witness who gave her evidence in a forthright way. She had worked closely with both Patrick and Hansen at different times. It was not suggested that she had a reason to favour or prefer one or the other. Her evidence in important respects contradicts that of Hansen. In two respects her recollection varies from Patrick’s. Her recollection is that she faxed the document of 16 October 2003 to Patrick. He says she handed it to him. Not a lot turns on that. But her evidence may suggest that the document of 16 October 2003 was an offer by Hanson to purchase from Patrick because, in her account of the telephone call she made to Patrick on the instructions of Hansen, she did not recall that Patrick had said he did not want to sell but he invited Hansen to make an offer. On this point I prefer the evidence of Patrick, his evidence about the hand writing on it and the subsequent events leads me to the view that the document when given to Patrick was an offer to sell based upon the values for the four land holdings being fixed at the amount suggested by Hansen. Subject to these issues I accept the evidence of Bannister. In passing I note that her evidence that Gary Engel sought information from her when preparing the balance sheets with a cut off at 30 November 2003 is consistent with his evidence.
- The combined effect of the evidence of Wilson, Engel and Bannister together with the documentary evidence such as those of 16 October 2003, 22 October 2003 and the records of CE Smith support Patrick’s account that it was Hansen who initiated the negotiations leading to his purchase of Hansen’s interests. I accept his evidence that the document of 16 October 2003 was, in effect, an offer by Hansen to sell his interests in the land business and holdings to Patrick for an amount to be determined by the accountants on the premise that the four land holdings were to be valued at the amounts attributed to them in the document. The evidence of Gary Engel that he had a telephone conversation with Patrick on 20 November 2003 lends some support to Patrick’s account that, whatever happened in between, by then the four essential values had been agreed and both Patrick and Hansen were in a position to instruct the accountants. On this issue I accept Patrick’s evidence.
- To meet the submission that Hansen’s account that matters occurred in 2004 rather than 2003 was incorrect it was submitted, on behalf of Hansen, that even if the representations occurred in 2003 he was entitled to succeed notwithstanding his pleaded case. But Hansen’s evidence cannot be viewed as merely based upon a mistaken recollection of dates. At several levels his evidence and reliability is undermined. He was wrong when he insisted the meeting at CE Smith on 1 December 2003 was only about his BMW. His evidence was false when he denied any knowledge of the document of 16 October 2003. Sue-Ellen Bannister’s evidence is that it was Hansen who told her what to put in the document of 16 October 2003 and that he was with her when she wrote it. Moreover the document and the evidence of Patrick and Bannister shows that he then had decided to sell and that he was confident enough of his knowledge of the value of the land holdings to put a value on them for the purposes of his offer. The evidence of Bannister was that Hansen kept himself informed of the land holdings, the contracts, settlements and payments. By his own admission he had long experience in land buying and selling. The evidence of Bannister confirms that the information necessary to make an informed decision about the land holdings and values was at his office at Hogan Street. Further Bannister’s evidence confirms that Hansen knew of the files and records and he went through them with her to ascertain the position and value.
- In evidence Hansen was at pains to present himself as ignorant of the affairs of the fourth defendant in so far as they concerned the land holdings, sales and values and in that context to be reliant upon Patrick and at a distinct disadvantage to Patrick. This evidence was, in my view, false and part of a deliberate attempt by Hansen to create a false impression and to deceive the court.
- For these reasons the evidence of Hansen is revealed as being not only unreliable but also deceptively false. I reject his evidence. I do not accept his evidence that Patrick made the representations alleged in the further amended statement of claim. Nor am I prepared to infer that Hansen relied upon anything Patrick might have said to him in deciding to commit to and to settle the transactions in February 2004. Hansen made his own assessment of values in the 16 October 2003 document. He had the experience to make such an assessment. He had access to all the records necessary to make an assessment and he had resort to them. He well knew the nature of and the values of the land assets owned by the fourth defendant. On the evidence of Bannister, he and Bannister went through the records to check matters after receipt of the fax of 22 October 2003. Further Hansen, as an experienced business man, must have known that the proposal concerning values in the document of 16 October 2003 must have put a cap upon the “price” to be attributed to the land.
- To remove any doubt, in making the aforementioned findings I have not overlooked the evidence of both Patrick and Hansen that for many years Patrick devoted his attention to the land sales aspect of the affairs of the fourth defendant and that Hansen concentrated his time, attention and energy upon the earth moving and property development affairs. Nor have I overlooked that a number of the documents passing between the accountants and the parties in late January and early February 2004 are capable of being viewed as consistent with an agreement negotiated in January 2004 and also suggesting that both Hansen and the accountants were seeking information from Patrick. But no document decisively undermines or falsifies the findings I have made. Further the information sought was for the purposes of preparation of the balance sheets the accountants were preparing to the knowledge of both Patrick and Hansen with a cut off of 30 November 2003.
- These findings are relevant not only to the issue of alleged misleading and deceptive conduct but also to the alleged fiduciary duty and its breach.
Lot 41 at Wulguru
- The finding I made that Hanson’s evidence should not be accepted and that consequently he failed to establish that Patrick had made the pleaded representations inducing him to enter into the agreement to sell the land interests must be revisited. Hansen alleged that Patrick represented to him that a contract for Lot 41 at Wulguru had fallen through. In the context of is statement of claim his allegation was that at the meeting he said occurred on 23 January 2004 this was said to him by Patrick. In his defence Patrick alleged that at some point in time after the contract for Lot 41 Wulguru had terminated Patrick so informed Hansen. Much was said at the trial about this so called admission. The documentary evidence shows that on 5 September 2003 a contract for the sale of this land was entered into. Patrick’s evidence was that the September contract was terminated on 16 January because the purchaser could not obtain finance. A different buyer was found and on 16 January 2004 a contract for the sale of the lot was entered into. In the context of Hansen’s statement of claim if a representation was made on 23 January that a contract in existence immediately prior to that had fallen over it might not be accurate. It might suggest there was no contract on the land on foot. But the statement of claim proceeds on a false premise, not established by the evidence, that there was a meeting between the two at the time and place alleged. Consistent with the advice given by the accountants for the cut off date at 30 November 2003 it is unsurprising that it appears to have occurred to Patrick that it was relevant for Hansen to know that a contract entered into prior to 30 November 2003 had been terminated subsequently. As Patrick’s evidence indicates a proposal was made by Patrick to attribute a value to the land of $45,000 consistent with the contract price for the first contract of September 2003. All this must have occurred sometime after 16 January. In the circumstances I am not prepared to hold that when the information concerning the termination of the first contract was passed on by Patrick to Hansen a materially false representation was made nor am I prepared to conclude that it induced the plaintiffs to enter into the contracts for sale.
Demand for Land
- The plaintiffs pleaded that a number of representations were made by Patrick concerning the market conditions for land at the time of the negotiations. Hansen gave evidence that representations in terms of the pleading were made by Patrick. For the reasons I have given I reject his evidence. But matters cannot rest there. In opening the case for the defendant’s senior counsel made admissions that Mr Patrick said that sales had been slow over the past two years and that he “could well have said that demand for land had been slow.”
- Thus the admission must be viewed in the context of the pleadings and the evidence and conduct at trial. Earlier I noted that Mr Hansen gave evidence consistent with paragraphs 22(ii)(a), (aa)(b). When cross examined it was put to him that nothing was said that demand would remain slow for the next three to five years but that holding costs would have to be taken into account was said. Mr Patrick was not asked any questions about these issues in his evidence in chief. Nor was he cross examined about this.
- The reason for this is partly explained by the pleadings and also some rulings I made at the trial. I made a ruling before Mr Patrick was called that while he could give evidence of the negotiations and what was said he could not give evidence that what he might have said about market conditions, if anything, to Mr Hansen was in fact true. As will be apparent from the reasons I gave for the ruling it followed because I held that although the making of the representations pleaded was denied in the pleadings the defence had not put in issue or raised the truth of any representation with the consequence that Mr Patrick could not give evidence of market conditions. This ruling applied also to the marketability of the land owned by the Patricks’ company Ochad Pty Ltd.
- Counsel for the plaintiffs directed my attention to the circumstance that the allegation in paragraph 27(iv) concerning the number of contracts of land owned by the fourth defendant either subject to contract or in the process of negotiation was not denied in the defence notwithstanding the truth or falsity of the making of the representations was an issue and paragraph 18.5 of the defence pleaded circumstances to explain the contract situation with respect to land owned by Ochad Pty Ltd. For the plaintiffs it was submitted that because of the number of contracts or contractual negotiations for the fourth defendant’s land and the number of contracts entered into or on foot during the relevant time of relating to land owned by Ochad Pty Ltd the inference should be drawn that the representation admitted to in the opening by senior counsel was false.
- It should be noted that the representations alleged in the statement of claim are much more detailed and elaborate than the narrow matter admitted to in counsel’s opening. The issue about the making of the representations, as pleaded, has been resolved against the plaintiffs for the reasons I have given. Evidence was not led because of the rulings I made concerning market conditions in the late 2003 and early 2004. In a sense because of the ruling I made Mr Patrick’s hands were tied, for example he was unable to give evidence of the comparative amenity or comparability or marketability of the land of the fourth defendant compared to that of Ochad Pty Ltd. Understandably, content with the admissions, counsel for the plaintiffs did not open up this issue in cross examination of Mr Patrick. Thus I am left with a circumstance where there were a number of contracts entered into sometime between 16 October 2003 and 13 February 2004 or potential land sales under negotiation, leading to contract, within that period. Some of the land was owned by the fourth defendant and some of the land was owned by the Patrick’s company. Many of the contracts alleged in paragraph 27(v) of the statement of claim appear to have no connection in time to the period in issue here. In the circumstances where the detailed representations actually alleged against Mr Patrick have been held to be false I am not prepared to infer merely upon the basis of a number of contracts or lots referred to in pleadings that the more limited representation admitted to was false.
Browne v Dunn & Jones v Dunkel issues
- In submissions plaintiff’s counsel made extensive submissions complaining of the conduct of the defence case in light of the pleadings, the failure to put matters or issues Mr Hansen in cross examination and the alleged failure to lead evidence on relevant matters from Patrick.
- The first issue complained of relates to the issue between the parties and the evidence led concerning the bank accounts opened by Patrick and his dealings with the bank accounts.
- In the defence Patrick expressly admitted that a bank account had been opened and that the accounts matters relevant had been sent to his private home address but he denied the allegation of an improper purpose. As the plaintiffs point out in their outline, Patrick’s contention was that the new accounts had been opened on the advice of his accountant for the purpose of the accounting exercise that the accountants were asked to perform, namely to create a balance sheet as at 30 November 2003. It was submitted that in accordance with Jones v Dunkel it was incumbent upon Patrick to give evidence explaining the banking records that had been put into evidence in accordance with the pleaded case of purpose. It was submitted that the combined failure of Mr Patrick to say anything in evidence in support of his pleaded contentions concerning the bank accounts by reference to the documents and the failure by Mr Engel to give evidence about the bank accounts should lead to an inference that Mr Patrick could not establish that there was a proper reason for the opening of the accounts and his use of the accounts.
- The plaintiff’s submissions appeared to involve contentions concerning the “Rule in Browne v Dunn” while comment culminating in a submission that an inference should be drawn contrary to Mr Patrick’s interest consistent with Jones v Dunkel. As was pointed out by Gleeson CJ in R v Birks Browne v Dunn involves a rule of professional practice designed to achieve fairness in a conduct of the trial. A breach of the “Rule in Brown v Dunn” may be addressed in a number of different ways including permitting a party to reopen its case and recall witnesses where possible. The principle established or evidenced by Jones v Dunkel is different. It also has roots or connections with obligations of fairness and can permit the drawing of an inference where a party for an unexplained reason fails to call an available witness who might give evidence upon an important issue or fails to give evidence when afforded the opportunity. Many of the cases concern the failure to call a witness but the operation of the rule is not that limited.
- The plaintiffs complain about the failure of Mr Engel to give evidence relating to his reconciliation or investigation of the bank accounts. He was called and gave evidence in the defendant’s case. Senior counsel for the plaintiffs did not cross examine Mr Engel. He explained it and his reasons citing that he had made a forensic decision. Nevertheless the plaintiff’s submissions overlook or do not give sufficient weight to the circumstance that both Messrs Wilson and Engel, particularly in the context of this issue Mr Engel, had been for many years accountants for both Mr Hansen and Mr Patrick. Both were their clients. In preparation for the trial Hansen would have had the same access to Wilson and Engel that presumably Patrick had for the purposes of conferences and taking statements. All relevant witnesses who might have been questioned were called. In the circumstances I am not prepared to draw the inference urged by counsel for the plaintiff. Fairness does not require that I daw any inference in these circumstances.
- A complaint is made with respect to the failure to call evidence relating to the dealings with the fourth defendant’s land and land of Ochad Pty Ltd. This issue relates to the matters I discussed earlier under the heading “Demand for Land”. The submissions made on behalf of the plaintiffs upon this issue do not persuade me that there was any infringement of either the “Rule in Browne & Dunn” or the conduct of the nature considered by the High Court in Jones v Dunkel. I am not persuaded that the defendants conduct at trial was unfair and that I should draw an inference or make a finding that it was false for the plaintiff to say that sometime in the relevant period (between 16 October 2003 and 13 February 2004) that the demand for land was slow.
- The case advanced for the plaintiffs in submissions and as pleaded was that Patrick, as a director of the fourth defendant, owed Hansen as a shareholder in the fourth defendant a fiduciary duty. For the defendants it was submitted that the evidence did not establish the relationship or circumstance necessary for one to owe the other a duty as a fiduciary, that ordinarily excepting limited circumstances a director (who does own a duty to the relevant company) will not owe a fiduciary duty to a shareholder. I was directed to Hospital Products Ltd v United States Surgical Corporation & Ors where Mason J said of the fiduciary relationship:
“The critical feature of these relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interest of another person in the exercise of a power or discretion which will affect the interest of that other person in a legal or practical sense.”
and to Redhill Iron Pty Ltd the API Management Pty Ltd where Beech J mentioned factors such as ascendancy, influence, vulnerability, trust, confidence or dependence as relevant when considering whether a fiduciary relationship existed.
- In address counsel for the plaintiff accepted the generality of the thrust of the submissions by the defendants but submitted that where there was a closely held corporation a director may owe a duty of disclosure when acquiring shares from a shareholder or advising them on shares. For Hansen emphasis was placed upon the judgment of Young JA in Crawley v Short where his Honour said:
“1.Merely because a person is a director of a company will not necessarily mean that he or she will owe fiduciary obligations to the members of the company as such.
- Proposition 1 must not be read as indicating that a person who is a director may never have a fiduciary obligation to a member.
- Where there are special circumstances arising on the facts of any particular case, a director may owe a fiduciary duty to a member.
- Without attempting to state an exhaustive list, the duty will arise where the member has expressly or impliedly sought the director’s assistance and the director has expressly or impliedly undertaken to act on the member’s behalf, where the director occupies a place of influence in the family, of which family member is also associated. These matters may be exacerbated if associated with other factors. (See eg Coleman v Myers (supra) at 330).
- If the Court considers that the corporate entity is sufficiently closely held to be akin to a partnership it may consider that it is appropriate to hold that the directors have the same obligations to their co-members as a partner would have had. Under the principle of Law v Law  1 Ch 140, this would be to put the vendor in possession of all material facts with reference to the partnership assets and not to conceal what the purchaser alone knows.
- Where there is a fiduciary duty it will encompass two things:
- The negative obligation not to make a profit at the vendor’s expense; and
- The positive obligation to make full disclosure of all material facts. In this connection a material fact is a fact to which a reasonable person would attach importance in determining his or her choice of action in the transaction in question (Shermer v Baker (1970) 472 P (2d) 589 at 594-5).”
- The preliminary issue is whether it is in the circumstances appropriate to hold Patrick to have, in relation to the subject transaction involving the sale of a share and the interest in the trust, an obligation to Hansen as a fiduciary similar to an obligation owed by one partner to another. Factors which suggest that it might be appropriate in this case are that Hansen and Patrick had been in partnership for almost two years from about 1986 and that from about February 1988 they had been directors of and shareholders in the fourth defendant company which was closely held. Both had for many years concentrated upon different duties according to the “division of labour” I discussed earlier in these reasons. But other factors or circumstances point the other way. Hansen was an astute and experienced businessman. He had experience in buying and selling real estate. He kept himself abreast of the landholdings, the state of negotiations, the contracts, sales and settlements. He was not just a shareholder but also a director of the company with rights of access to all the books and records of the company. He exercised those rights, by October 2003 all the files to do with current or pending contracts and sales were at his office at Hogan Street. And the evidence of Sue-Ellen Bannister persuades me that Hansen was familiar with the documents. The document of 16 October 2003 written by Bannister at Hansen’s direction shows that Hansen was confident enough of his own capacity to make an assessment of the value of the four land assets of the company or the unit trust. Without seeking help or advice from Patrick or anyone else he was prepared to make an offer to fix the value of the land. As an astute businessman he would have known that an opening offer to sell would put a ceiling on the value for the purposes of any negotiation. There is no evidence that Hansen asked Patrick “to act for or on behalf of or in [his] interest”. In the particular circumstances there are not features of “influence” or “confidence” or “ascendancy” or “vulnerability” or “dependence” apparent in the dealings between Hansen and Patrick in this transaction. Nor does the evidence satisfy me that Hansen trusted Patrick. By late 2003 the evidence suggests that relations between them were strained and had been for some little time.
- In the particular and perhaps rather unusual circumstances that apply in the case of this closely held company I am not persuaded that Patrick had a special opportunity to exercise power or discretion or to otherwise act or withhold information to the detriment of Hansen nor am I prepared to conclude that Hansen was vulnerable to such abuse by Patrick by reason of his position as a shareholder. The findings and observations I made earlier in these reasons are applicable upon this issue. I need not repeat them. I hold that Patrick did not owe Hansen a fiduciary duty of the nature or in the circumstances as alleged by the plaintiffs.
Breach of fiduciary duty and related issues – paragraphs 29A to 29P
- Other allegations are made against the Patrick interests in paragraphs 29A to paragraph 29P of the statement of claim. They are relevant because they lay the foundation for the alleged liability of the third defendant Firehose Pty Ltd and ultimately co-extensive liability of Mrs Patrick. Further paras 29A to 29J are significant in the claim for breach of fiduciary duty. At trial the counsel for the plaintiff advanced submissions in support of the allegations.
- In what follows reference should be made to my reasons concerning the credit of Hansen, my findings concerning the course of the negotiations, the advice given by the accountants and whether Patrick owed Hansen a fiduciary duty. The allegation made in paragraph 29B (and those flowing from it) that Patrick instructed the accountants to back date the closing off of the accounts to 30 November 2003 proceeds on a false premise asserted as to when the negotiations commenced. It is apparent from my reasons that the decision to adopt 30 November 2003 was on the advice of the accountants given to Patrick which, it is likely, was explained by the accountants to Hansen. While it is true that neither plaintiff had access to the accounts nor the operation of the accounts, relating to contracts entered into after 30 November 2003 this was consistent with the advice of the accountants. The allegation made in paragraph 29J that the information concerning the termination of the contract for Lot 41 at Wulguru was false is not borne out by the evidence. For the reasons I gave in relation to this issue this is not made out. I am not prepared to find in state of the evidence that Patrick was motivated at the time to conceal from Hansen the truth the “true state of the market”.
- Paragraph 29M concerns contracts well after the settlement date. It is alleged that Patrick was negotiating many contracts for the sale of land and that he concealed this from Hansen. There is simply no evidence concerning the course of the negotiations, the evidence does not enable me to make a finding that the negotiations commenced at a time material to the negotiations between Hansen and Patrick and the settlement that occurred in February. Paragraph 29N proceeds upon the negation of a representation which I have found was not made. In any event the value was one that Hansen put upon the complex as the document of 16 October 2003 demonstrates. The same can be said for the allegation in paragraph 29P which concerns land that was sold under a contract entered into on 30 September 2004 and settled on or about 30 June 2006.
Co-Extensive Liability of Mrs Patrick
- Mrs Patrick is the second defendant. She is a director and shareholder of Firehose Pty Ltd the third defendant and is a director of the fourth defendant Patrick & Hansen Pty Ltd. At the times material to the matters subject to this action she was a director and shareholder of Firehose Pty Ltd. I accept the submission on behalf of the defendants that there is no evidence that she was actively involved in any of the matters the subject of complaint by the plaintiffs in this action. There is no evidence that she was aware at the time of any of the conduct of which the plaintiffs complain. In elaborate and thoughtful submissions counsel for the plaintiffs advanced arguments why Mrs Patrick might be co-extensively liable for conduct alleged against her husband in breach of fiduciary obligations and why as a matter of law she might be liable for any misleading and deceptive conduct of her husband in his capacity as a director or shareholder in Firehose Pty Ltd. However because of my findings that the conduct alleged to be misleading and deceptive was not established and that it was not established that Patrick owed Hansen duties as a fiduciary it is not necessary for me to further consider these issues.
Expert evidence and related findings
- Valuation and town planning expert evidence was tendered. In view of my findings upon the issues of liability I will state my reasons and findings briefly.
- The town planning evidence related only to the land referred to as the shopping centre site forming part of the Innes Estate. For the defendants Mr Milford prepared a report dated 31 July 2014. For the plaintiffs Ms Everson made a report dated 30 May 2014. A joint report was in evidence prepared in December 2014. Ms Everson was called in the plaintiff’s case and was cross examined. Mr Milford was not required for cross examination. The issue between them was what, from a town planning perspective, was the highest and best use of the land, whether for a small commercial development or a significantly larger commercial supermarket development. The notional time for this assessment was between about October 2003 and February 2004. Both agreed that from a town planning perspective the particular date range made no difference. To support her opinion that from a town planning perspective a much larger commercial or shopping centre development was possible under relevant town plan and legislation Ms Everson referred to reports commissioned by fourth defendant and submissions made to council on behalf of the fourth defendant later in 2004 and to developments and approvals they’ve issued subsequently. Her evidence in effect was that those matters or proposals were within reasonable prospect from a town planning perspective at the time in question. Mr Milford questioned that and did not agree.
- This issue in my view is finely balanced. But my impression was from Ms Everson’s answers in cross examination that her opinion may have been affected or might be the subject of hindsight taking into account what did occur rather than being an objective expert opinion as to what might have been reasonably in prospect in later 2003 and very early 2004. In that circumstance and also taking into account the circumstance that Mr Milford was not cross examined I prefer his evidence to that of Ms Everson.
- It is apparent that written valuation reports had been authored by Mr GW Eales (Opteon) on behalf of the plaintiffs in November 2011. On behalf of the defendants written valuation reports were prepared by Mr J Searston (Herron Todd White). In May 2012 pursuant on order of the Court a schedule described as a joint position paper was prepared and signed by Mr Eales and Mr Searston identifying matters of difference and agreement between them. A joint expert report was subsequently prepared. It was as a consequence of a number of meetings between the valuers culminating in a meeting of 10 December 2013. It is signed by both Mr Eales and Mr Searston and records that those present were Mr Eales and Mr Alex Dickinson from Opteon and Mr Searston and Mr Schy from Herron Todd White. At trial Mr Eales was unavailable overseas and he was not called to give evidence. Mr Searston was not required for cross examination and was not challenged. Mr Dickinson was called in the plaintiff’s case. Mr Dickinson said that he had read the joint report and that he agreed with the opinions of Mr Eales. But he could not say that he was present at all the meetings and was prepared only to agree with comments made in the joint report relevant to the issues discussed when he was present. I was not impressed with Mr Dickinson when he gave evidence. He seemed hesitant and uncertain. I am not sure he fully understood the role of an expert witness. In one unguarded comment he said he was giving evidence on behalf of “Opteon the firm, the company.” He was extensively cross examined. It is apparent he was familiar with many of the land assets in issue but as a result of his evidence and presentation as a whole I was left with a sense of unease. I am unable to ascertain what was said or agreed at any one of the meetings or the basis for the agreement or the disagreement because he was not present at all the meetings. Moreover he seemed to be endorsing the opinion of Mr Eales without being able to identify the basis for his opinion. I reject his evidence. In addresses it was common ground, that contrary to the opinion jointly stated in the joint report, the two Wulguru lots that were valued should be valued at $70,000 not $90,000. With that exception, in the circumstances that Mr Searston was not challenged I accept his expert opinion valuation evidence and where the exhibits reveal a comprised position had been agreed between both Mr Eales and Mr Searston I accept that valuation.
Damages for contravention of Trade Practices Act or Compensation for breach of fiduciary duty
- In light of my findings concerning the town planning evidence and the expert valuation evidence the damages or compensation should be assessed informed by the opinion evidence of Mr Searston (subject to the parties agreement concerning the two Wulguru blocks) adjusted where he and Mr Eales have agreed or reached an agreed compromise.
- Further to the extent relevant the ascertainment of the value of the land and of damages or compensation should in relation to the part of the Innes Estate that had shopping centre or commercial potential be informed by the town planning evidence of Mr Milford.
- For the plaintiffs it was submitted that damages should be assessed in accordance with the elaborate reconstruction of the balance sheets submitted as part of their bundle of documents. But this exercise proceeds upon a premise contrary to my findings with respect to the expert evidence.
- For the defendants I was reminded that what was sold was one share in the company and ten units in the unit trust. The shareholding and unit trust holding was “closely held.” Moreover the company beneficially owned some land and other land was trust property. It was submitted that the assessment of damages should be approached not simply on the basis of calculations formed by comparing the difference between the values indicated by Mr Searston’s reports (or where agreed) and the values attributed by the accountants who prepared the balance sheets and calculated the payments in 2014. It was submitted on behalf of the defendants that the units would not have been readily saleable in the market and that only a nominal damages award should be made in respect of the unit sale.
- There is some validity in the submission that in assessing damages or compensation some allowance should be made for the circumstance that what was being sold was a share and a number of units in a closely held company and trust. No doubt a buyer independent of the parties would have bargained for a substantial discount to take account of the difficulties in realisation of the actual assets are controlled by a company the buyer did not control. But the circumstance that the purchaser was Patrick and the third defendant indicates that any discount for the circumstance that what was being sold was a share and units in the unit trust should be modest. The reason for this is that the Patrick interests were gaining ownership of the whole company and trust and with it control and all of the beneficial interest.
- In my view a discount in the assessment of damages of the values indicated by Mr Searston (or agreed by the parties or by Mr Searston and Mr Eales) should be 5%.
- In view of my findings with respect to the claims under the Trade Practices Act and breach of fiduciary duty it is unnecessary for me to perform the actual calculation.
- Paragraph 31 of the further amended statement of claim claims the sum of $344,285.84 which was withheld from Hansen or Banchick Pty Ltd at settlement to provide for taxation liability on the sale. It alleges that Hansen and Banchick Pty Ltd, having paid their respective taxation liabilities on the sale as assessed by the Australian Taxation Office that the withheld monies have been wrongfully retained and that are recoverable as money had been received. At trial I held that the defendants were deemed to have admitted paragraph 31 of the statement of claim and I refused the defendants application for leave to withdraw the admission.
- For the plaintiffs it was submitted that the admission by the defendants that the sum was withheld for a purpose which failed to materialise upon the plaintiffs having satisfied their taxation liability on a sale without recourse to the funds the basis for the retention of the funds had failed for lack of consideration and it was unjust for the defendants to retain the funds.
- In their submissions the defendants contended that the allegation was vague, unparticularised and that recovery should not be permitted in the circumstance where the plaintiffs had not claimed the money in any prayer for relief in either the claim or statement of claim or subsequent amended statements of claim.
- On 15 April 2016, after I had reserved my decision, the plaintiffs reapplied to open their case and tender some fresh evidence of an assignment in respect of the right to recover the $344,285.84. Evidently this was done because of some questions I asked in address with senior counsel for the plaintiffs as to, assuming an entitlement to recover, which of the plaintiffs was entitled to what part or how much of the sum in question. The defendants opposed the application to reopen the case and also submitted that the assignment was ineffectual. The evidence the plaintiffs sought to place before me was a Deed of Assignment dated 4 March 2016. Somewhat comically, because of questions I raised as to the terms of the Deed (Exhibit 3) the application was stood down and after a short adjournment the plaintiffs thought to place before me a Deed of Revocation dated 15 April 2016 (relating to the Deed of 4 March 2016) and a fresh Deed of Assignment dated 15 April 2016.
- On the hearing of the application the plaintiffs relied upon reasons of Applegarth J in EB v CT (No 2) where his Honour said of the relevant principles governing the exercise of a discretion as to whether to allow a party to re-open his or its case and tender fresh evidence:
“The guiding principle in deciding whether to grant leave to re-open is whether or not the interests of justice are better served by allowing or rejecting the application. Reference is made in Finborough Investments Pty Ltd v Airlie Beach Pty Ltd and in the cases referred to in it to need for finality in litigation.
In Smith v New South Wales Bar Association the High Court stated that different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. As to the former situation, the court said it was difficult to see why the primary consideration should not be that of embarrassment or prejudice to the other side.
In Reid v Brett the criteria governing the exercise of the discretionary power to re-open a case to admit further evidence where the hearing has concluded but judgment has not been delivered, were said to be as follows:
- The further evidence is so material that the interests of justice require its admission;
- The further evidence, if accepted, would most probably affect the result of the case;
- The further evidence could not by reasonable diligence have been discovered earlier; and
- No prejudice would ensue to the other party by reason of the late admission of the further evidence.
Reference by the High Court to prejudice to the other party, and the guiding principle of the interests of justice, require account to be taken of the strain that litigation imposes on personal litigants. The prejudice caused by delay in the delivery of an expected judgment at the end of stressful litigation cannot always be measured in terms of money or cured by an order for costs. The interests of justice are served by finality in litigation, particularly where prolonged litigation imposes a strain on personal litigants.”
- By the Deed, Exhibit 5, both Hansen and Banchick Pty Ltd as trustee purport to assign their respective entitlements to any part of the $344,285.84 to Hansen.
- The Deed is in a relevant sense fresh evidence. It came into existence after the close of evidence. But the guiding principle as to whether to give leave to reopen the case and tender the evidence is whether or not it is in the interests of justice to allow or to reject the application. In this context cases concerning the need for finality and litigation are important and also issues of possible prejudice to an opposed party.
- The circumstances that applied in this application were a little different from those that confronted Applegarth J, where the application was left until the morning when a reserve judgment was to be delivered. Considerations such as those do not apply in this case. Nevertheless considerations relating to a delay and finality are relevant particularly in the circumstance of the application concerns events such a long time ago and an aspect of the case that was far from the major focus of the trial concerning alleged misleading and deceptive conduct and breach of fiduciary duty.
- Nevertheless a sum of money in issue is considerable and was in terms of the deemed admission withheld from the plaintiffs.
- In the circumstances I consider that the exercise of my discretion should be informed by my determination as to whether the money is recoverable by the plaintiffs for monies had and received as claimed.
- The effect of the admission is that $344,285.84 which was otherwise payable by the Patrick interests was withheld from the plaintiffs at settlement on 17 February 2004. It was withheld to provide for potential taxation liability of the first and second plaintiffs. When resort is had to the Share Sale Agreement and the Unit Sale Agreement the latter provided that each of the second plaintiff and third defendants would be responsible for paying their own tax both parties acknowledging the trustee, the fourth defendant, did not pay tax. Whereas in the former Share Sale Agreement Patrick & Hansen Pty Ltd (the fourth defendant) acknowledged responsibility for paying all taxes. While the Agreement suggests the retention may have been to the benefit of the fourth defendant company, which acknowledged responsibility for tax liabilities, nevertheless the retention is likely to have distinctly benefitted both that company and the first defendant Patrick. Further Patrick would have had effective control over its disposition.
- Notwithstanding the criticisms made by the defendants about the drafting of the Deed of Assignment (Exhibit 5), clause 2 of the Deed plainly assigns both plaintiffs respective several or joint rights to the money retained to the first plaintiff.
- In the premises where the plaintiffs paid their own tax and money for that liability was retained at settlement for such liability it is unjust for it to be retained, the consideration for the promise to pay the tax from that fund having failed.
- The cases relied upon the plaintiffs support recovery as money had and received in the circumstances. Following my observations concerning who, among the defendants, may have benefitted from and controlled the retention I conclude that the first plaintiff, Hansen, as a signee should have judgement against the first and fourth defendants.
- Accordingly I would order that the plaintiffs have leave to reopen their case and to tender into evidence the Deed of 15 April 2016 (Exhibit 5).
- The plaintiffs have been successful on only one issue and as a consequence the first plaintiff is entitled to recover from the first defendant and the fourth defendant the sum of $344,285.84. There is the question of interest. I have already noted that recovery of this money was not included in the prayer for relief in either the pleadings or the claim as filed. Therefore strictly speaking it was not the subject of a separate claim for interest in any of the documents. Nevertheless it would be unjust for the first defendant and the fourth defendant to have had the benefit of the retention of such a large sum for many years depriving Hansen the benefit of its use.
- In the exercise of my discretion I have concluded that interest should be payable from the day of settlement, 17 February 2004 to the day of judgement, 24 January 2018 calculated at the relevant default pre-judgment rates in accordance with the courts interest calculator. That sum is $404,859.20. The total therefore of the judgment recovery and interest is $749,145.04.
- The orders I would make therefore are:
- Judgment for the first plaintiff against the first defendant and the fourth defendant in the sum of $749,145.04.
- Reserve the question of costs including those of the application to reopen.
- The parties have leave to make submissions concerning costs.
 See further amended statement of claim at para 22(ii).
 See para 25A and paras 29 to 29P of the further amended statement of claim.
 See para 27 of the further amended statement of claim.
 See the documents at Ex 1 folder 6, Nos 42 & 43.
 The plaintiffs’ claim is not limited to damages under s 82 of the Trade Practices Act claim for contraventions of the Trade Practices Act. They also claim damages for equitable monetary compensation for breach of fiduciary duty. There is also a claim for monies had and received. These will be addressed further later in these reasons.
 See third further amended defence filed 10 April 2014.
 See further para 11 of the third further amended defence.
 See para 11.11(1) of the third further amended defence.
 See fn 5 above.
 T 1-37.
 T 1-38, 1-39.
 T 1-39.
 T 1-40.
 T 1-41.
 T 1-41.
 T 1-45.
 T 1-51.
 T 1-46.
 T 1-46.
 T 1-46.
 T 1-48.
 T 1-48.
 T 1-52.
 T 1-52, 1-53.
 T 1-53.
 See Ex 1 Folder 6, Nos 42 & 43.
 T 1-57.
 T 1-58.
 T 1-58.
 T 1-59.
 See T 1-63-64; the property on the corner of Ross River Road, the Brenton Park property,Innes Estate, Wulguru Heights.
 T 1-65, L4-10.
 T 1-65.
 T 1-65.
 See T 1-65-72. Ex 5 – Queensland Valuations and Sales Search.
 T 1-72, L5.
 T 1-77.
 T 1-77-78.
 T 2- 6 to 8.
 See T 2-8 to 14.
 See T 2-8.
 See for example MFI1 at T 2-10 (later Ex 8 see T6-64) and MFI2 at T 2-12 (later Ex 9 at T6-65).
 T 2-16 to 17.
 T 2-18 (Ex 2 p1).
 T 2-24.
 T 2 -36.
 T 3-18.
 T 3-22-3.
 T 3-23-4.
 T 4-44.
 T 4-46.
 T 4-57.
 T 4-58.
 Ex 2 p1; T 4-60/61.
 Ex 2-2-4.
 T 4-67/68.
 T 4-68.
 T 4-73 and see Ex 2 p13.
 T 4-70.
 T 4-70.
 T 4-71.
 T 5-26.
 T 5-26.
 T 5-29.
 T 5-37. See Ex 1 Folder 8, No 48(2).
 T 5-39.
 T 5-46. See Ex 1 Folder 8, No 48(15).
 T 5-47.
 T 5-48.
 Ex 3-34.
 T 5-52.
 T 5-60.
 T 5-61.
 T 5-71.
 T 6- 6-7. Ex 2-238.
 T 6-8/9. See Ex 2-238.
 T 6-8/9. See Ex 2-238. Though care should be taken as the meeting may not have involved a one and a half hour meeting with Hansen. Some of the time that is attributed to this entry may reflect preparation time for the meeting, see further T6-14.
 T 6-9/10.
 T 6-11/13.
 T 6-13.
 T 6-15.
 T 6-15/16. See also Ex 2-246.
 T 6-16.
 T 6-16. See Ex 2-249.
 T 6-16. See also Ex 2-252.
 T 6-16. See also Ex 2-252.
 T 6-17.
 T 6-17. See also Ex 2-258 & 259.
 T 6-19.
 T 6-18. See Ex 2-264.
 T 6-18.
 T 6-59.
 T 6-59.
 T 6-60.
 T 6-60.
 T 6-60.
 T 6-67 L10.
 See T 6-65/67. See further Exs 9, 10 & 11. It should not be overlooked however that the contents of the files (Exs 9, 10 & 11) do not necessarily contain only documents relevant to the period in question from October 2003 to February 2004. Some documents relate to transactions in 2002 and some relate to transactions in 2004. See further the argument at T 6-62 to T 6-64.
 T 6-67 L21 to 30.
 Ex 2-1.
 T6-67 L44.
 T 6-68 and T 6-69 L1.
 T6-68 L1 and L43.
 T 6-69.
 T 6-69 L30.
 Ex 2-2.
 T 6-69.
 T 6-70 L40-47 and T 6-71 L1-5.
 T 6-71.
 T 6-72/73.
 T 6-73.
 T 6-73.
 T 6-73.
 See Leotta v Public Transport Commission (1976) 150 ALJR 666, Anderson v Gregory  QCA 419 at  to  and Petchell v Du Pradal  QCA 132 at  to .
 See paras 17 to 30 of the plaintiff’s outline of submissions, MFI 8.
 See further paras 37 to 56 of the plaintiff’s outline, MFI 8.
 (1959) 101 CLR 298.
 MFI 8 at paras 82 to 96.
 MFI 8 at paras 97 to 106.
 MFI 8 at paras 107 to 139.
 MFI 8 at para 139. See further T 3-30 L44-45 and T 3-32 L33.
 MFI 8 at paras 280 to 286.
 MFI 8 at paras 140 to 169.
 MFI 8 at paras 170 to 177.
 MFI 8 at paras 178 to 203.
 MFI 8 at paras 204 to 225.
 MFI 8 at paras 226 to 240.
 See paras 241to 252.
 MFI 8 at paras 287 to 322.
 As to the latter see MFI 8 at paras 323 to 333.
 MFI 7 at 1.1 to 4.15.
 MFI 7 at 5.1 to 5.28.
 (1954) 91 CLR 353. See also Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) to 27 NSWLR 326.
 MFI 7 at 6.1 to 6.16.
 MFI 7 at 9.2 to 9.14.
 MFI 7 at 9.15 to 9.17.
 MFI 7 at 9.18 to 9.39.
 MFI 7 at 10.1 to 10.11. See further Redhill Iron Pty Ltd v API Management Pty Ltd  WASC 323. See also Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd (2004) 2QdR 207.
 MFI 7 at 11.1 to 11.13.
 MFI 7 at 13.1 to 13.8.
 MFI 7 at 12.1 to 12.19.
 See T 2-18 L34; T 2-17 L44; T 2-24 L43; T 2-30 L15; T 2-34 L23 and T1-58.
 T 1-58.
 See Ex 2-1.
 Ex 2-1.
 Ex 2-2.
 See para  above and fn 114.
 See  above. This issue needs qualification because of the Lot 41 at Wulguru issue and an admission made by counsel for the defendants. These will be considered below.
 See T 6-69 L25. The reference to Brenton is to Stoney Creek.
 See for example para 22 (ii) and para 26 (iii) of the further amended / omitted statement of claim.
 See para 20.26 of the third further amended defence.
 See Ex 1 Folder 8, No 48(2).
 See Ex 1 Folder 8, No 48(15).
 See para  above and with particular emphasis on sub paras (a), (aa)(b).
 T 3-30 L44-45.
 T 3-32 L34-35.
 See for example T 1-47 L35-39 and T 1-48 L1-10.
 T 2-48 L39-44 and T 3-24 L6-8.
 T 4-21 L30 – T 4-23 L33.
 See also T 4-31 L10.
 See T 5-20 L12-35.
 See para 18 of the third further amended defence.
 Compare para 27(v) of the statement of claim with para 18.5 of the defence.
 See MFI 8 at paras 91-106.
 See MFI 8 at paras 91-96.
 See para 29.12 of the third further amended defence.
 (159) 101 CLR 298.
 It being Patrick’s evidence that the accounts bear the writing of Mr Engel.
 (1990) 19 NSWLR 677 at 686.
 See Australian Securities and Investment Commission v Hellicar & Ors (2013) 247 CLR 345 at ff.
 See further See Australian Securities and Investment Commission v Hellicar & Ors (2013) 247 CLR 345 at -.
 See for example T 6-27.
 See MFI 8 paras 97-106.
 See paras  to  above.
 See para 32(1) of the further amended statement of claim. The pleading alleged that Mrs Patrick owed Hansen a fiduciary duty but in submissions the focus was on Mr Patrick. Co-extensive liability for Mr Patrick’s conduct was advanced against Mrs Patrick.
 See Southern Cross Mine Management Pty Ltd v Ensham Resources Pty Ltd (2004) 2QdR 207 at  and .
 (1984-1985) 156 CLR 41 at 96-97.
  WASC 323 at . Citing News Limited v Australian Rugby Football League Ltd (1996) 64 FCR 410.
 See Coleman & Ors v Myers & Ors  2NZLR 225 at 330.
  NSWCA 410 at .
 In what follows reference might be made to what I said concerning credit at - above.
 See Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 97 per Mason J
 Culminating at para  and  above.
 See para 29 of the further amended statement of claim.
 See para 32(ix) of the further amended statement of claim.
 See for example MFI 8 at paras 287-322.
 See para .
 Ex 1, Folder 19, No 3.
 Ex 1, Folder 19, No 4.
 Ex 1, Folder 19, No 5.
 T 6-45.
 See Ex 1, Folder 19 No 1. Which contains the schedule and the 2011 valuation reports as attachments.
 See Ex 1, Folder 19 No 2.
 T 6-46.
 T 6-48 L1.
 T 6-47 L36-40.
 Ex 1, Folder 4, Nos 11, 12, 13 & 14.
 T 2-73 to 2-76.
 T 3-10 to 3-13.
 MFI 8 at para 328. Relying upon Roxborough v Rothmans of Pall Mall (2001) 208 CLR 516 at 524-525,  2 , Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1993) 182 CLR 51 at 75, Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 515  and 516 .
 See MFI 7 at paras 13.1-13.8.
 See for example Ex 1 being the plaintiff’s outline of submissions on the application and Ex 2 being the defendant’s outline of submissions on the application.
 See Ex 3 on the hearing of the application.
 See Ex 4.
 See Ex 5.
  QSC 306.
 In this respect I reject the defendant’s submission that it is not fresh evidence.
 Ex 1, Folder 6, No 42.
 Ex 1, Folder 6, No 43.
 Clause 9.1.
 Clause 9.1.
 See para  and fn 201.
- Published Case Name:
Hansen & Anor v Patrick & Ors
- Shortened Case Name:
Hansen v Patrick
 QSC 7
24 Jan 2018
- White Star Case:
|Event||Citation or File||Date||Notes|
|Primary Judgment|| QSC 7||24 Jan 2018||Plaintiffs’ claim for damages for fraud, negligent misstatement, breach of fiduciary duty and contraventions of the Trade Practices Act 1974 (Cth) dismissed; judgment for the first plaintiff against the first and fourth defendants for money had and received in the amount of $749,145.04: North J.|
|Appeal Determined (QCA)|| QCA 298||30 Oct 2018||Plaintiffs' appeal allowed; retrial ordered; defendants' cross-appeal dismissed: Sofronoff P and Fraser and Morrison JJA.|
|Appeal Determined (QCA)|| QCA 357||21 Dec 2018||Appeal Costs Judgment: Sofronoff P and Fraser and Morrison JJA.|