Mulvaney Holdings Pty Ltd v Thorne
[2012] QSC 127
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- Unreported Judgment
- Mulvaney Holdings Pty Ltd v Thorne[2012] QSC 127
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Mulvaney Holdings Pty Ltd v Thorne[2012] QSC 127
Mulvaney Holdings Pty Ltd v Thorne[2012] QSC 127
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Trial |
ORIGINATING COURT: | |
DELIVERED ON: | 21 May 2012 |
DELIVERED AT: | Rockhampton |
HEARING DATE: | 21 March 2012 |
JUDGE: | McMeekin J |
ORDER: | 1.I order that the defendant pay equitable compensation to the first plaintiff in the sum of $1,955,884.05 together with interest pursuant to s 47 Supreme Court Act 1995. 2.I dismiss the second plaintiff’s claim. 3.I order the defendant to pay the costs of the first plaintiff on the indemnity basis. 4.There will be no order as to the costs of the second plaintiff. |
CATCHWORDS: | EQUITY – FIDUCIARY DUTY – BREACH – REMEDIES – whether fiduciary relationship exists – whether breach of fiduciary duty – whether equitable compensation should be awarded Birtchnell v Equity Trustees, Executors and Agency Co Ltd 42 CLR 384 Breen v Williams (1996) 186 CLR 71 Canson Pty Ltd v Boughton & Co (1991) 85 DLR (4th) 129 Catt & Ors v Marac Australia Ltd & Ors (1986) 9 NSWLR 639 Day v Mead [1987] 2 NZLR 443 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221 Maguire v Makaronis (1997) 188 CLR 449 Markwell Bros v CPN Diesels [1983] 2 Qd R 508 O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 Target Holdings Ltd v Redferns [1996] 1 AC 421 United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1 Warman International Ltd v Dwyer (1995) 182 CLR 544 Uniform Civil Procedure Rules r 509 |
COUNSEL: | Mr PO Land for the Plaintiffs No appearance for the Defendant |
SOLICITORS: | Kelly Legal Solicitors for the Plaintiffs No appearance for the Defendant |
[1] McMeekin J: The plaintiff companies, Mulvaney Holdings Pty Ltd (“Mulvaney”) and Ozibar Pty Ltd (“Ozibar”), claim equitable compensation for alleged breaches of fiduciary duty by the defendant, Brett Thorne.
[2] The Northern Judge ordered that interlocutory judgment be entered against the defendant with compensation to be assessed on the plaintiffs’ respective claims on 27 February 2012. The judgment came about as a result of the defendant’s failure to attend at a mediation ordered by the Court and his continued failure to comply with his disclosure obligations under the Rules. The Northern Judge fixed the assessment to occur at the sittings of the circuit court in Mackay commencing 12 March 2012.
[3] Upon the calling on of the matter on 21 March 2012 the defendant did not appear. The defendant caused an email to be sent to the Registrar of the Court on the morning of 21 March advising “I have filed for bankruptcy and submitted a debtor’s petition …”. Later searches revealed that a petition was in fact filed but on 26 March.
[4] The defendant’s solicitors had earlier sought leave to withdraw, the defendant having indicated that he had withdrawn his instructions to them, and obtained that leave on the morning of the hearing. The date for hearing was set a week prior to the hearing with the defendant appearing personally by telephone and advising that alternative solicitors had been retained. No alternative solicitors in fact appeared or filed any address for service.
[5] I determined to proceed and hear the matter in the defendant’s absence.
[6] The rules give no particular guidance to the method of assessment save that the assessment is to be “conducted as nearly as possible in the same way as a trial”: r 509(1) UCPR. The plaintiffs placed before me several affidavits at the hearing the deponents thereof deposing to facts which the plaintiffs assert justify an assessment of compensation for Mulvaney at $1,955,884.05 plus interest and for Ozibar at $180,000 plus interest.
MULVANEY’S CLAIM
The Basis of Mulvaney’s Claim
[7] The guiding minds of Mulvaney are Mr and Mrs Long. That company sues in its capacity as the trustee of their family trust. Mr Long is now the sole director of Ozibar. Formerly, and at material times, the defendant was its director and controlling mind.
[8] Mrs Long is the aunt of the defendant. The Longs say that they have had a close relationship with the defendant effectively treating him as their son since the death of his mother in 1988. In more recent times they respected him as a businessman. Outwardly he was a successful one. He had three real estate agencies, considerable experience as a valuer and had been involved in other businesses with the Longs. There is no reason to doubt their claims that they trusted the defendant.
[9] The case concerns representations made to the Longs by the defendant in late 2007 concerning the suitability of the purchase of shares in Ozibar, a company then under the control of the defendant. The Long’s son Gary was then a director and minority shareholder of Ozibar.
[10] Mulvaney’s complaint, essentially, is that the Longs were persuaded to invest a substantial amount of its monies into Ozibar by the defendant portraying Ozibar as a sound investment; that the true financial position of Ozibar was at that time far from sound and in fact it was losing money and was insolvent; no proper financial accounts were then available; that the true financial position of Ozibar was thus concealed from the Longs but was well known to the defendant; and that the defendant being aware of the trust and confidence that the Longs placed in him took advantage of that trust.
[11] It is not necessary in my view to detail the evidence given the failure of the defendant to appear and contest the claim – suffice to record that the affidavits of Mr and Mrs Long establish that significant representations were made to them by the defendant about Ozibar’s financial affairs, that they believed those representations, that the representations were false and misleading, and those representations induced them to act. I am conscious that the defendant denied the Longs’ claims in his Further Amended Defence but the entry of default judgment against the defendant precludes any curial examination of the issues raised. In any case the defendant’s non appearance and so the lack of any countervailing evidence has the result that I am required to accept the Longs’ assertions unless, perhaps, inherently improbable.
[12] The Longs claim that had they been aware of the true financial position of Ozibar they would not have invested in the company at all. The true financial position and the facts not related to them included:
(a) That Ozibar had had total operating losses since its inception and up to that time of $555,725;
(b) Total current liabilities of $419,666;
(c) Was insolvent and had no value;
(d) Had no prospect of returning $60,000 to $120,000 per annum or of netting $120,000 to $150,000 or of justifying a capitalisation rate of four to five times earnings as had been represented.
[13] I see nothing improbable in the notion that the statements mentioned in (d) were capable of inducing the Longs to invest in Ozibar nor any improbability in the assertion that had they known the true position they would not have so invested.
[14] The end result of the defendant’s representations was that Mulvaney entered into a Deed of Agreement on 3 December 2007 whereby it acquired 35% of the shares of Ozibar in exchange for the payment of $357,000.
[15] The true state of affairs took some time to emerge by which time the plaintiff had invested further monies and their case is that they had became so enmeshed that it was impossible to withdraw. As mentioned Mr Long now controls Ozibar. The further monies invested were in the form of loans to Ozibar. The plaintiff pleads that a total of $1,598,884.08 was advanced over the ensuing four years.[1] The fact of the making of the advances is not contested.[2]
A Fiduciary Relationship?
[16] The premise underlying the plaintiff’s claim is that the relationship between the parties is properly characterised as fiduciary. This issue is not addressed in the plaintiff’s written submissions but rather it appears to be assumed as established as a result of the granting of the interlocutory judgment. It was put in issue by the defendant’s pleading.[3]
[17] Where, as here, interlocutory judgment has been entered for compensation to be assessed there has been no curial determination that any such relationship existed. When the relationship pleaded falls into an accepted category of relationship where it has been held that fiduciary duties are owed there is no difficulty. Where, however, the relationship does not fall so readily into such a category, matters are not so clear.
[18] Those accepted categories, and the categories are not closed, were described by Gaudron and McHugh JJ in Breen v Williams as “trustee and beneficiary, agent and principal, solicitor and client, employer and employee, director and company and partners.”[4] Gibbs CJ added tenant for life and remainderman in Hospital Products Ltd v United States Surgical Corporation.[5] None of those apply here. The question is whether I should make any enquiry into the fundamental premise.
[19] The entry of judgment plainly has the effect that the defendant cannot contest his liability to the plaintiffs and the defendant’s rights were thereby restricted to contesting the assessment of compensation. But it would be an odd result if the plaintiff became entitled to a level of compensation, and a level that might well exceed any compensation available under tortious or contractual principles,[6] on the basis of an assumed state of affairs – viz that there was a fiduciary relationship between the parties - when the plaintiff’s own facts disclosed no such thing. The defendant surely is entitled to say to the Court: “Accepting all that the plaintiff has proved, the relationship between us was not fiduciary in nature.”
[20] There is a further problem. To say that a man stands in a fiduciary relationship to another does not advance matters greatly. As the majority observed in Pilmer v Duke Group Ltd (in liq):
“The words of Frankfurter J in Securities and Exchange Commission v Chenery Corporation[7] bear repetition. His Honour said:
‘But to say that a man is a fiduciary only begins analysis; it gives direction to further inquiry. To whom is he a fiduciary? What obligations does he owe as a fiduciary? In what respect has he failed to discharge these obligations? And what are the consequences of his deviation from duty?’”[8]
[21] In my view it is necessary to examine these issues.
[22] Where parties embark on a joint venture it is possible that their relationship is fiduciary in character. So much was decided in United Dominions Corporation Ltd v Brian Pty Ltd[9] where Mason, Brennan and Deane JJ said:
“The term “joint venture” is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots’ law, “adventure”) will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership. The borderline between what can properly be described as a “joint venture” and what should more properly be seen as no more than a simple contractual relationship may, on occasion, be blurred. Thus, where one party contributes only money or other property, it may sometimes be difficult to determine whether a relationship is a joint venture in which both parties are entitled to a share of profits or a simple contract of loan or a lease under which the interest or rent payable to the party providing the money or property is determined by reference to the profits made by the other. One would need a more confined and precise notion of what constitutes a “joint venture” than that which the term bears as a matter of ordinary language before it could be said by way of general proposition that the relationship between joint ventures is necessarily a fiduciary one (but cf per Cardozo CJ, Meinhard v Salmon (1928) 164 NE 545 at 546). The most that can be said is that whether or not the relationship between joint venturers is fiduciary will depend upon the form which the particular joint venture takes and upon the content or the obligations which the parties to it have undertaken. If the joint venture takes the form of a partnership, the fact that it is confined to one joint undertaking as distinct from being a continuing relationship will not prevent the relationship between the joint venturers from being a fiduciary one. In such a case, the joint venturers will be under fiduciary duties to one another, including fiduciary duties in relation to property the subject of the joint venture, which are the ordinary incidents of the partnership relationship, though those fiduciary duties will be moulded to the character of the particular relationship (see, generally, Birtchnell v Equity Trustees, Executors and Agency Co Ltd (1929) 42 CLR 384 at 407–9).
In the present case, it is apparent that the relationship between the participants in the shopping centre venture was a fiduciary one, at least from the time when the formal agreement was executed. Under the agreement, the participants were joint venturers in a commercial enterprise with a view to profit. Profits were to be shared. The joint venture property was held upon trust. The participants indemnified the managing participant (SPL) against losses. The policy of the joint enterprise was ultimately a matter for joint decision. Apart from the absence of any reference in the agreement to “partnership” or “partners”, the relationship between the participants under the agreement exhibited all the indicia of, and plainly was, a partnership (cf Canny Gabriel Castle Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321 at 326–7; 3 ALR 409 at 411–2). ….
….To the extent that that submission involves a general legal proposition that the relationship between prospective partners or joint venturers cannot be a fiduciary one until a formal agreement is executed, it is clearly wrong. A fiduciary relationship can arise and fiduciary duties can exist between parties who have not reached, and who may never reach, agreement upon the consensual terms which are to govern the arrangement between them. In particular, a fiduciary relationship with attendant fiduciary obligations may, and ordinarily will, exist between prospective partners who have embarked upon the conduct of the partnership business or venture before the precise terms of any partnership agreement have been settled. Indeed, in such circumstances, the mutual confidence and trust which underlie most consensual fiduciary relationships are likely to be more readily apparent than in the case where mutual rights and obligations have been expressly defined in some formal agreement. Likewise, the relationship between prospective partners or participants in a proposed partnership to carry out a single joint undertaking or endeavour will ordinarily be fiduciary if the prospective partners have reached an informal arrangement to assume such a relationship and have proceeded to take steps involved in its establishment or implementation.
…. To transpose the words of Dixon J in Birtchnell (42 CLR at pp 407–8), the participants in each of the then proposed joint ventures were ‘associated for … a common end’ and the relationship between them was ‘based … upon a mutual confidence’ that they would ‘engage in [the] particular … activity or transaction for the joint advantage only’. It matters not, for present purposes, whether that relationship is seen as that which may exist between prospective partners or joint venturers before the terms of any partnership or joint venture agreement have been settled or whether it is seen as a limited preliminary partnership or joint venture to investigate and explore the possibilities of an ultimate joint venture or ventures. On either approach, it was a fiduciary one.”[10]
[23] What then are the features of the relationship between the parties here that should result in the imposition of fiduciary obligations? In Hospital Products Ltd v United States Surgical Corporation Mason J observed[11] that the critical feature of those relationships which I have earlier mentioned as accepted categories was the undertaking or agreement by the fiduciary to act for or on behalf of or in the interests of another person in the exercise of power or discretion which will affect in a legal or practical sense the interests of that other person. His Honour went on:
“The relationship between the parties is therefore one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position. ...
It is partly because the fiduciary's exercise of the power or discretion can adversely affect the interests of the person to whom the duty is owed and because the latter is at the mercy of the former that the fiduciary comes under a duty to exercise his power or discretion in the interests of the person to whom it is owed”.[12]
[24] Gaudron and McHugh JJ pointed out in Breen[13] that "the existence of a relation of confidence”[14] and “a dependency or vulnerability on the part of one party that causes that party to rely on another”[15] have been found to be indicia of such a relationship.
[25] Here I think that it can be said that the arrangements between the parties was akin to that of partners. They were engaged on a “joint venture” using that term in its broadest sense. They happened to choose a corporate vehicle in which to engage in the joint venture. Their purpose was to acquire the property and business of Ozibar and to secure further properties and businesses all of which would be owned by the joint venturers in the chosen corporate entity and from which profit was to be derived. Profits were to be shared in accordance with their shareholdings. The Longs were at a disadvantage due to their ignorance of the financial position of Ozibar. Proper financial accounts were not available. The Longs were dependent on the defendant and the defendant knew that the Longs relied on him for accurate information. He was well acquainted with Ozibar’s affairs. He knew that the Longs trusted him because of their long standing relationship. Hence the Longs, and their corporate vehicle Mulvaney, were vulnerable in the sense discussed by Mason J in Hospital Products.
[26] Again the words of Dixon J in Birtchnell v Equity Trustees, Executors and Agency Co Ltd are apt to describe the situation here where the parties to the then proposed joint venture were ‘associated for … a common end’ and the relationship between them was ‘based … upon a mutual confidence’ that they would ‘engage in [the] particular … activity or transaction for the joint advantage only’.[16]
[27] The decision in United Dominions establishes that the fact that the crucial representations were made before any agreement was signed and the fact that a corporate vehicle was chosen to carry out their purpose do not preclude the finding that fiduciary duties can be owed.
[28] In the premises I am satisfied that the parties’ relationship is properly characterised as fiduciary.[17]
Breach
[29] That being so and given the entry of judgment and the lack of countervailing evidence it is apparent that the defendant breached the duties owed.
[30] In United Dominions Gibbs CJ held that “…the obligation to perfect fairness and good faith … extends to persons negotiating for a partnership, but between whom no partnership as yet exists”.[18] The reasoning of the Chief Justice was in accordance with the majority in that case. Hence the defendant owed a duty to the Longs, and to their corporate vehicle Mulvaney, to act with complete integrity and honesty. He was not permitted to prefer his interests to those of the Longs. As McHugh, Gummow, Hayne and Callinan JJ observed in Pilmer:
“…the fiduciary is under an obligation, without informed consent, not to promote the personal interests of the fiduciary by making or pursuing a gain in circumstances in which there is ‘a conflict or a real or substantial possibility of a conflict’ between personal interests of the fiduciary and those to whom the duty is owed.”[19]
[31] In breach of those duties the defendant effectively preferred his interests to those of the Longs, and hence Mulvaney, by misrepresenting the true state of Ozibar’s finances. Ozibar was a company that he then controlled and in which he had a significant interest. It was to his considerable advantage to sell shares which were essentially valueless to the Longs for a substantial sum.
Equitable Compensation
[32] I turn then to the last of the questions posed by Frankfurter J. What are the consequences of his breach? There is no doubt on the facts presented by the plaintiff that by reason of his breach of duty the defendant induced the Longs to have Mulvaney acquire shares in Ozibar.
[33] Again I am conscious of the defendant’s pleading that the Longs’ decision to invest in Ozibar was brought about by other factors, not least that their son Gary was a director of Ozibar and had the day to day management of the business of the company, along with Mrs Long, for a year before the relevant discussions were held between the defendant and the Longs.[20] Again there is a lack of any countervailing evidence and what is more the matter, it seems to me, is not justicable, given the entry of judgment.
[34] The only real difficulty in the case is that upon discovering that the financial affairs of Ozibar were not as represented the Longs did not withdraw but rather committed considerably more monies to the business. Is the defendant liable to compensate them for the monies that they have expended over the years when well aware of the falsity of his misrepresentations? At its heart the issue is whether the breach of duty has caused the loss claimed or whether it is the product of the independent judgment of the Longs and, if the latter, can nonetheless it be claimed?
[35] First, I observe that I do not see any difficulty in applying the principles relevant to the assessment of equitable compensation to the case. The nature of the case it has been said “will determine the appropriate remedy available for selection by the plaintiff”: Maguire v Makaronis.[21]
[36] In Warman International Ltd v Dwyer[22] the Court[23] explained that the equitable remedies available were of “general application”:
In Nocton v Lord Ashburton Viscount Haldane LC described the three primary remedies consequent upon a breach of a fiduciary obligation between a solicitor and client: "Courts of Equity had jurisdiction to direct accounts to be taken, and in proper cases to order the solicitor to replace property improperly acquired from the client, or to make compensation if he had lost it by acting in breach of a duty which arose out of his confidential relationship to the man who had trusted him."
Although the Lord Chancellor was addressing the fiduciary relationship which arises between a solicitor and client, his words are of general application.
[37] Thomas J, as he then was, in Markwell Bros Pty Ltd v CPN Diesels (Qld) Pty Ltd[24] while acknowledging that the origin of equitable damages “may be controversial” considered that the power to award such compensation was “commonly exercised by courts of equity in industrial property cases and in breach of fiduciary duty cases.” He considered the power to be “part of the long established power of the court of equity to award compensation for breach of trust, and a manifestation of the Court’s power over a fiduciary”.[25]
[38] To like effect is the earlier judgment of McLelland J in United States Surgical Corporation v Hospital Products International Pty Ltd[26]:
“Apart from the limited power to award damages in addition to or in substitution for equitable relief, conferred by the Supreme Court Act 1970, s 68 (following Lord Cairns' Act) which is of no present relevance, the court has an inherent power to grant relief by way of monetary compensation for breach of a fiduciary or other equitable obligation; see Nocton v Lord Ashburton [1914] AC 932 at 946, 956, 957; McKenzie v McDonald [1927] VLR 134 at 146; Holmes v Walton [1961] WAR 96. …The nature and extent of this remedy have been discussed by I E Davidson in an illuminating article entitled ‘The Equitable Remedy of Compensation’ in 13 Melbourne University Law Review 349. This remedy differs from an account of profits in that the loss to the plaintiff rather than the gain to the defendant is the measure of relief. The principles of assessment of equitable compensation do not necessarily coincide with those applicable to common law damages.”
[39] Further support for the availability of the remedy where there has been a breach of fiduciary duty can be found in Catt & Ors v Marac Australia Ltd & Ors[27] per Rogers J. The learned authors of Meagher Gummow and Lehane’s Equitable Doctrines & Remedies say the remedy is available “against all forms of fiduciary or other equitable behaviour.”[28]
[40] I conclude that the remedy of equitable compensation is available generally to relieve against loss occasioned by breach of fiduciary duty if the nature of the case demands it.
[41] Here there is no point to ordering that the defendant account for any profits – there were none. Nor can rescission be ordered – matters are far too complicated to unravel and restore parties to the positions they once enjoyed. The only proper approach, it seems to me, is to apply the remedy that the plaintiff seeks, namely to identify what loss it has suffered and for which it should be justly compensated.
What Principles Apply?
[42] There is plainly a distinction between a claim in contract for rescission for fraudulent misrepresentation and damages and a claim in equity against a fiduciary for compensation. In the former the loss claimed would need to be directly caused by the misrepresentation but not in the latter. The majority in Maguire v Makaronis, a case concerning a solicitor fiduciary, discussed that distinction:
“Where the subject matter of the transaction is, for example, the sale of a business, intervening changes may render more complex the decree for rescission. In some circumstances, the purchaser seeking rescission by reason of fraudulent misrepresentations by the vendor, may be entitled to an indemnity for trading losses incurred, both before the purchaser disavowed the transaction and thereafter whilst the business was maintained for the benefit of the vendor; but the indemnity will extend only to that part of the trading losses which were "directly occasioned" by the falsity of the vendor's misrepresentations. To this extent issues of "causation" may arise in cases of rescission for fraudulent misrepresentation. But that is not this case.
Different considerations arise where the plaintiff seeks one or other of the further remedies referred to by the Lord Chancellor in Nocton v Lord Ashburton, namely an account of profits, as a personal rather than proprietary remedy, or, as another personal remedy, compensation for that which the plaintiff has lost ‘by [the fiduciary] acting’, to use the Lord Chancellor's phrase, in breach of duty. Likewise where what is sought is a proprietary remedy in the nature of a constructive trust. In these instances, there directly arises a need to specify criteria for a sufficient connection (or ‘causation’) between breach of duty and the profit derived, the loss sustained, or the asset held.”[29]
[43] The majority went on to consider the issue, relevant here, of the “sufficient connection (or ‘causation’) between breach of duty and … the loss sustained” by first considering the cases concerned with trustee fiduciaries and then, citing Lord Browne-Wilkinson in Target Holdings Ltd v Redferns:[30]
“If specific restitution of the trust property is not possible, then the liability of the trustee is to pay sufficient compensation to the trust estate to put it back to what it would have been had the breach not been committed ... Even if the immediate cause of the loss is the dishonesty or failure of a third party, the trustee is liable to make good that loss to the trust estate if, but for the breach, such loss would not have occurred”[31]
concluded that “there is no translation into this field of discourse of the doctrine of novus actus interveniens”[32] and “until restitution is made, it is presumed that the default continues.”[33]
[44] In O'Halloran v RT Thomas & Family Pty Ltd[34] Spigelman CJ essayed an examination of the relevant principles that apply to the assessment of equitable compensation:
“The object of equitable compensation is to restore persons who have suffered loss to the position in which they would have been if there had been no breach of the equitable obligation. (Nocton v Lord Ashburton (1914) AC 932, 952 per Viscount Haldane LC. See the discussion by Justice Gummow writing extra-judicially in "Compensation for Breach of Fiduciary Duty" in Youdan (ed) Equity Fiduciaries and Trusts (1989) 57-61; See also Meagher, Gummow and Lehane "Equity: Doctrines and Remedies" 3rd ed para552-para553; Davidson "The Equitable Remedy of Compensation" (1982) 13 Melb Uni L Rev 349 esp 372; Davies "Equitable Compensation: Causation Forseeability and Remoteness" in Waters (ed) Equity Fiduciaries and Trusts (1993) 304-305; Tilbury "Equitable Compensation" in Parkinson (ed) The Principles of Equity (1996) para 2202-para2207, para2211.)
In Target Holdings Ltd v Redferns (1996) 1 AC 421, Lord Browne-Wilkinson said:
"At common law there are two principles fundamental to the award of damages. First, that the defendant's wrongful act must cause the damage complained of. Second, that the plaintiff is to be put 'in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation' Livingston the Rawyards Coal Co (1885) App Cas 25, 39 per Lord Blackburn. Although, as will appear, in many ways equity approaches liability for making good a breach of trust from a different starting point, in my judgment those two principles are applicable as much in equity as at common law. Under both systems liability is fault-based: the defendant is only liable for the consequences of the legal wrong he has done to the plaintiff and to make good the damage caused by such wrong. He is not responsible for damage not caused by his wrong or to pay by way of compensation more than the loss suffered from such wrong. The detailed rules of equity as to causation and the quantification of loss differ, at least ostensibly, from those applicable at common law. But the principles underlying both systems are the same." (supra 432 E-H)
His Lordship's ultimate conclusion was:
"Equitable compensation for breach of trust is designed to achieve exactly what the word compensation suggests. To make good a loss in fact suffered by the beneficiaries and which, using hindsight and commonsense, can be seen to have been caused by the breach. " (439)
In Canson Pty Ltd v Boughton & Co (1991) 85 DLR (4th) 129, her Ladyship Justice McLachlin, who was in the minority, said:
"In summary, compensation is an equitable monetary remedy which is available when the equitable remedies of restitution and account are not appropriate. By analogy with restitution, it attempts to restore to the plaintiff what has been lost as a result of the breach, ie the plaintiff's lost opportunity. The plaintiff's actual loss as a consequence of the breach is to be assessed with the full benefit of hindsight. Foreseeability is not a concern in assessing compensation, but it is essential that the losses made good are only those which on a commonsense view of causation, were caused by the breach. (163 e-g)
In my opinion this also represents the law in Australia.”[35]
[45] While Kirby J was in the minority in Pilmer his exposition of the principles that apply to equitable remedies is not, I think, exceptional:
“[150] The fiduciary must make good any breaches arising from its default in discharging the fiduciary obligations. It must account for any profits it has made as a consequence. The overall purpose of the law of fiduciary obligations is to restore the beneficiary to the position it would have been in if the fiduciary had complied with its duty. To attain this end, the beneficiary is entitled to invoke a range of remedies much broader than those typically available at common law. They are also remedies devoid of many of the common law limitations and technicalities. As well, presumptions are available that facilitate proof of a claim. Amongst the applicable remedies is the broad power to award equitable compensation.
[151] In affording remedies for a fiduciary's breach of its obligations, equity is seen, depending on one's point of view, at its ‘flexible pragmatic best (or worst)’. There are, of course, limits. They are those appropriate to enforcing the obligations of conscience. In a proper case, they will require just counter-entitlements to be set off, or deducted, where this can be done with accuracy. The purpose of equity's relief is not punishment but restoration. The "cardinal principle of equity [is] that the remedy must be fashioned to fit the nature of the case and the particular facts".
[152] The rule governing the calculation of equitable compensation is that stated by McLachlin J in Canson Enterprises Ltd v Boughton & Co:
‘The basis of the fiduciary obligation and the rationale for equitable compensation are distinct from the tort of negligence and contract. In negligence and contract the parties are taken to be independent and equal actors, concerned primarily with their own self-interest. Consequently the law seeks a balance between enforcing obligations by awarding compensation and preserving optimum freedom for those involved in the relationship in question, communal or otherwise. The essence of a fiduciary relationship, by contrast, is that one party pledges itself to act in the best interest of the other. The fiduciary relationship has trust, not self-interest, at its core, and when breach occurs, the balance favours the person wronged ... In short, equity is concerned, not only to compensate the plaintiff, but to enforce the trust which is at its heart.’
McLachlin J's exposition has been cited in this Court, in the United Kingdom and in other decisions and texts.
[153] It is because equitable relief has large objectives that the measure of equitable compensation will often differ from the measure of common law damages. Often, it will be greater. Thus, the mere fact that no property can be restored, or other order of restitution fashioned which is apt to the circumstances, will not relieve a fiduciary, in breach of its duties, from fulfilling both the compensatory and prophylactic objectives that equity upholds. Equitable relief will self-consciously favour the beneficiary by "holding trustees to their duties and thereby protecting the interests of beneficiaries".
[154] The foregoing rule is given effect by the differing approaches of equity and the common law to assessing the consequences of the wrong, and to whom that wrong is properly attributed. I explained some of those differences in Maguire. I remain of the views stated.”[36]
[46] It follows, I think, from these cases that I should favour the plaintiff in my assessment by protecting its interests, that I need not be concerned that other factors may have played their part in bringing about the significant losses sustained or that the Longs may have been in breach of their own duties to the plaintiff in undertaking the investment in Ozibar,[37] and that given the failure to make restitution the loss continues. Considerations of remoteness, causation and foreseeability of loss, all associated with contractual and tortious remedies, are not here relevant.
The Issues Agitated
[47] The issues raised by the defendant in response to the claim are that the making of the advances were “improvident”, “not commensurate with sound commercial practice”, made in breach of the Longs’ duties to the plaintiff owed as its directors and imposed by s 181 of the Corporations Act 2001 (Cwth), and were “so unreasonable that no reasonable director ... would have authorised or committed the additional funds…”.[38] Further it was pleaded that it was unconscionable for the plaintiff to set up the “Deed and/or the warranties and engagements made and given” against the “neglect and… failure of the [Longs] to enquire or cause due and diligent enquiry to be made into the true financial position of Ozibar” before committing funds.[39]
[48] These issues, as I understand them, are properly seen as going to the issue of causation. The question that needs to be addressed, to adapt the words of Kirby J in Pilmer, is: What would have happened if the defendant, as fiduciary, had adhered to his obligations?[40] The answer that the plaintiff gives is that it would never have entered into the investment in the first place and hence the various sums advanced would not have been advanced. It follows, the plaintiff contends, that the Court should order that the sums be repaid.
[49] There are two issues. Exercising common sense and with the benefit of hindsight, are these losses caused by the breach? And, if I so ordered, would I restore the plaintiff to the position in which they would have been if there had been no breach of the equitable obligation?
[50] The defendant also pleads[41] that the plaintiff has stood possessed of knowledge of the facts asserted against the defendant for three years before commencing proceedings, had not brought its claim in a timely way “and by that prolonged, inordinate and inexcusable delay acquiesced in the matters of which it own complains or caused or permitted the defendant to believe” that it did not intend to make the claim. This pleading raises issues of laches and acquiescence.
Causation
[51] The causation question is not straight forward.
[52] Before embarking on a brief review of the facts I observe that it is a peculiar plea for the defendant to make that the plaintiff’s actions were “so unreasonable that no reasonable director … would have authorised or committed the additional funds…” when he himself injected funds during 2008, his knowledge being much greater than that of the Longs.
[53] I turn then to the facts. It is obvious that the Longs were aware at a fairly early stage that the statements made to them by the defendant could not have been accurate. The representations complained of were made in October 2007 and the Deed entered into in December 2007. On 23 May 2008 Mr Long sent an email to his fellow directors of Ozibar in which he asserted that “it is apparent that all three businesses are operating at a net loss”. Each he said was “falling well short in revenue terms when fixed costs … are taken into account.” He expressed the opinion that a minimum of four months would be needed to effect a turn around. He expected losses to total $120,000 over those four months. He required an input of equity funds from shareholders of a total of $160,000 – including $56,000 from he and his wife.[42]
[54] A few days later on May 27th Mr Long warned his fellow directors that without an injection of funds they may be trading whilst insolvent. That same day Mr Long wrote to the defendant describing the company as being in a “mess”. He said in that email “The share price that we all paid for Aqua Mackay (approx $400K) was seriously over valued and clearly in terms of its actual trading performances, it is worth only a fraction of that value”.[43]
[55] From that time on there were regular calls for further injection of funds. Minutes of a director’s meeting in August 2008 recorded that “Ozibar is at huge risk of trading insolvent”.[44] By September 2008 better accounts had been prepared and Mr Long advised the directors that “we are (technically) continuing to trade while insolvent”.[45] By December 2008 a resolution was tabled, but not acted upon, to have a liquidator appointed. Rather, an urgent sale of assets was embarked upon.[46] In July 2009 accountants supplied income tax returns for the Ozibar Unit Trust for the years 2007 and 2008. Losses of $377,495 were disclosed for the 2007 year.[47] Subsequently promises were made and Deeds of Agreement entered into by the defendant by which monies were to be paid. None were forthcoming. Eventually litigation ensued to endeavour to enforce some of those promises. By January 2010 a default judgment had been obtained. It has not been met.
[56] I have said enough of the facts to show that the bulk of the monies advanced to Ozibar were paid after the Longs were well aware of the fraudulent conduct of the defendant. Hence it follows that monies were advanced by reason of some cause other than those misrepresentations. That cause is not sworn to by either of the Longs. However I think it obvious that there were two motivations. The first was that their only choice was either to let the company go into liquidation with the consequent loss of the $357,000 initially invested (and $600,000 more by September 2008 when better accounts had been prepared) or alternatively inject funds. The second emerges fairly clearly from the exhibits to their affidavits. In the email of 3 September 2008 Mr Long put his position succinctly – if the company was found to have been trading whilst insolvent, which would follow if the Long interests did not inject funds, that “would be a very substantial problem for the current directors and …can lead to major fines, liquidation of the company, and bankruptcy of the directors.”[48]
[57] The question then is whether as a matter of commonsense and hindsight it can be said that the further injection of capital to Ozibar was a result of the breach of duty by the defendant. In my view there is the necessary causal link. The Longs were in an invidious position into which they had been led by the breach of duty. With each injection of funds their way out became more fraught with difficulty and attendant with ever greater losses. Perhaps with hindsight they may have cut their losses much sooner. But it hardly lies in the mouth of the defendant to complain that they endeavoured to battle on. There is certainly no hint in the exchanges that took place that he ever suggested to them that the better course was to abandon the enterprise. I cannot see that it is not in accordance with good conscience that he makes good their losses.
[58] The defendant effectively asserts that the incompetence or misjudgment of the Longs is the cause of the loss. The difficulty with that argument is to be found in the passage earlier quoted from Lord Browne-Wilkinson in Target Holdings Ltd v Redferns[49] and the non applicability of the concept of novus actus interveniens. While the immediate cause of the loss may be as the defendant alleges, and I make no finding to that effect, that is of no moment.
[59] In Canson Enterprises, to which reference has already been made, McLachlin J said that “losses resulting from clearly unreasonable behaviour on the part of the plaintiff will be adjudged to flow from that behaviour”.[50] I have difficulty characterising the plaintiff’s behaviour as so unreasonable. By the time more complete accounts were available the plaintiff had invested nearly $1M in Ozibar. To that time the defendant too had also contributed as asked. As I have observed his knowledge was greater than that of the Longs. Contemporaneous emails suggest that the parties then hoped the turnaround would be only a matter of months away. In those circumstances and having committed so much what then were the Longs to do? As I have said they were in an invidious position.
[60] Nor does it matter that their actions might be seen to amount to negligence for which Mulvaney should be seen as responsible. While what fell from the Court in Pilmer was obiter, it is plain that notions of contributory negligence have no part to play in this area of discourse. The majority there said:
“[86] With respect to question (c), concerning "contributing fault", it is sufficient to say that the decision in Astley v Austrust Ltd indicates the severe conceptual difficulties in the path of acceptance of notions of contributory negligence as applicable to diminish awards of equitable compensation for breach of fiduciary duty. Astley affirms:
"At common law, contributory negligence consisted in the failure of a plaintiff to take reasonable care for the protection of his or her person or property. Proof of contributory negligence defeated the plaintiff's cause of action in negligence."
Contributory negligence focuses on the conduct of the plaintiff, fiduciary law upon the obligation by the defendant to act in the interests of the plaintiff. Moreover, any question of apportionment with respect to contributory negligence arises from legislation, not the common law. Astley indicates that the particular apportionment legislation of South Australia which was there in question did not touch contractual liability. The reasoning in Astley would suggest, a fortiori, that such legislation did not touch the fiduciary relationship.”[51]
[61] This approach can be contrasted with the New Zealand case of Day v Mead[52] the facts of which bear some resemblance to the facts here. It was there held that plaintiff had been neglectful of his own interests and had his compensation reduced. That approach is not in conformity with Australian law.
[62] I am satisfied that the causal link necessary for this form of action has been established.
Laches & Acquiescence
[63] What has been described as the most “distinct and definite” statement of the doctrine of laches[53] is to be found in Lord Selborne LC’s[54] judgment in Lindsay Petroleum Co v Hurd:
“Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.”[55]
[64] It follows that mere delay is not sufficient, at least in cases of the present kind. Something more must be shown. That is usually identified as the plaintiff having acquiesced in the defendant’s conduct; or having caused the defendant or a third party to alter their position in reasonable reliance on the plaintiff’s acceptance of the status quo or otherwise permitted a situation to arise that would be unjust to disturb.[56]
[65] Here the delay is not particularly great. Better accounts, although far from complete accounts, were available by September 2008. By then nearly $1M had been injected. It would be only then, in my view, could it be said that the plaintiff was in a position to make some reasonable assessment of its predicament. That it seems to me is the earliest point in time where it can be said the plaintiff became aware of facts that give rise to the availability of equitable relief. Their “delay” should be judged from then.[57] Proceedings were launched within two years, hardly an inordinate delay in a reasonably complex matter. And it might be argued that the plaintiff was entitled to see how bad the true situation was before launching proceedings that would merely require continuing amendment.
[66] Far from standing by and acquiescing in the defendant’s conduct the plaintiff has complained, through Mr Long, bitterly about that conduct and from well before September 2008. There has been a long search for a way out of the problems that the defendant created. Nor has the defendant pointed to, let alone proved, any adverse change in position or other detriment in reliance on any assumption that the plaintiff was content with the share sale and his misrepresentations. In fact the evidence suggests the contrary – by reason of the plaintiff’s injection of funds the defendant avoided the prospect of being held accountable as a director permitting a company to trade whilst insolvent and Ozibar is now returning a small profit. The defendant’s position has been improved. He is still a shareholder (to the extent of 30%) in Ozibar. A company that was probably insolvent when he sold down his shareholdings to the plaintiff has now some value.
[67] In my view it would not be “practically unjust to give a remedy”, to quote Lord Selborne LC in Lindsay Petroleum, in the circumstances. No defence of laches is made out.
[68] In any event, as Mr Land who appeared for the plaintiff contended, laches is a defence which bars the remedy. Where as here, judgment has been entered then it is too late for the defendant to raise the issue.
Any Just Counter Entitlements?
[69] The final issue is, as Kirby J pointed out in Plimer, that equity requires “just counter-entitlements to be set off, or deducted, where this can be done with accuracy”. Are there any?
[70] My concern is that the plaintiff will end up with both the monies it has expended and a viable company. That is, it is not evident that the monies have been thrown away. Is there some element of ‘double dipping’?
[71] By reason of the injection of funds over the years and no doubt Mr and Mrs Longs’ expertise and management Ozibar is now returning a profit. According to Mr Murphy, an experienced accountant who has examined the internal books of account, that profit was $211,933.85 for the year ended 30 June 2011 and $224,612.23 for the period 1 July 2011 to 29 February 2012.
[72] In the end I am not persuaded that there is any just cause to reduce the plaintiff’s entitlement.
[73] First, the defendant did not ask for that and the defendant was aware during the currency of the proceedings that the company did return to profit in more recent times.
[74] Secondly, the representations that induced the original investment promised returns of $60,000 to $120,000 per annum initially with the prospect of growing the business. That was, of course, without the injection of the bulk of the monies now claimed. While the present profit reflects an adequate return on the monies now invested it is nowhere near the levels promised in 2007. It is unlikely that these returns will ever be achieved despite the expenditure of these monies.
[75] Thirdly, the continued viability of the business is hardly assured. As Mr Murphy reports the profits may not be able to be maintained in the longer term as they are subject to uncertainties such as possible competition and a need to expend monies on further improvements.
[76] Fourthly, the present level of profits is well below a level that would, if maintained, result in the monies paid being repaid in the foreseeable future. Mr Murphy has calculated that the minimum annual repayment needed to repay the outstanding balance within 20 years, assuming a 10% interest rate, is $295,248.[58] Even assuming an interest rate at more commercial levels the profits will need to be maintained for a very long time to result in full repayment. And that is without any allowance for the Longs expertise in their skill and management.
[77] In my view it is just that the plaintiff’s claim be allowed and assessed as claimed.
OZIBAR’S CLAIM
The Basis of the Claim
[78] The claim here is for the loss incurred by Ozibar during an enforced closure of the business for one month during August –September 2009.
[79] At the time the defendant was a director of Ozibar. He was also a director of another company Showbar Properties Ltd (“Showbar”) and through his corporate holdings a majority shareholder in that company.
[80] Sometime in the period from October to December 2008 Showbar obtained a late trading permit from the Queensland Licensing Commission permitting Showbar to operate a nightclub immediately adjacent to and in direct competition to a nightclub operated by Ozibar. This was done without the knowledge or consent of the Longs.
[81] No doubt if Ozibar was able to demonstrate that its profits had been reduced by this direct competition from Showbar’s adjacent nightclub some legitimate complaint could be made. The claim however is put on quite a different basis.
[82] The plaintiff complains that the defendant procured a serving police officer effectively to harass Ozibar’s operations by way of conducting searches and charging the company with offences against the Liquor Act and by, eventually, having an apparently responsible officer attached to the Office of Liquor Gaming and Racing issue a closure order effective from 29 August 2009. That closure order provided that certain works were required to be completed in order to meet concerns raised in relation to “the cleanliness and maintenance of the premises and the potential risk to public health”[59] and in relation to workplace health and safety.[60] The notices suggest that inspection had been undertaken by authorised inspectors of certain relevant government departments.
[83] As a result of the closure order the business was shut for a month. It can be accepted that the closure of the business for a month caused losses and there is evidence that those losses totalled $176,065.[61]
Discussion
[84] The case is brought on the same principles as discussed under Mulvaney’s claim.
[85] The difficulty with the plaintiff’s claim is in its characterising a need to comply with the law as involving a breach of a fiduciary’s duty. In my view each of the directors of the plaintiff were under an obligation to ensure that the premises complied with relevant regulations – such as those under the Workplace Health and Safety Act 1995 or the Public Health Act 2005. To bring deficiencies to the notice of relevant authorities, assuming that the defendant did so much, was in conformity with the directors’ duties not in breach of them, assuming that fellow directors were not minded to comply with the law.
[86] Either the closure order was a lawful one or it was not. If not, then there was no lawful obligation to comply with it. If lawful, then the costs were not incurred because of any action of the defendant in procuring the authorities to inspect the premises but because when those authorities inspected they found the plaintiff to be in breach of the law.
[87] In either case the claim fails at the first hurdle. No action of the defendant, even assuming it to be shown that he has procured the closure which is far from clear, is the cause of the loss. Rather it was the act of the plaintiff in permitting the premises to become so dilapidated as to warrant the closure order, or in the alternative, expending monies complying with an unlawful notice, that brings about the “loss” claimed. In the latter case such expenditure, I think, falls into the class of “unreasonable behaviour” discussed by McLachlin J in Canson Enterprises[62] to which reference has already been made.
Order
[88] I order that the defendant pay equitable compensation to the first plaintiff in the sum of $1,955,884.05 together with interest pursuant to s 47 Supreme Court Act 1995.
[89] I dismiss the second plaintiff’s claim.
[90] I order the defendant to pay the costs of the first plaintiff on the indemnity basis.
[91] There will be no order as to the costs of the second plaintiff.
Footnotes
[1] See para 43 of the Statement of Claim.
[2] See paras 43(c) and 46.2 of the Further Amended Defence.
[3] Albeit that there was a change of position: see para 82.2 of the original Defence admitting a relationship of trust and confidence subsequently deleted from the Further Amended Defence.
[4] (1996) 186 CLR 71 at 106-107 referring to Hospital Products (1984) 156 CLR 41 at 96.
[5] (1984) 156 CLR 41 at 68.
[6] E.g. see Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; (2001) 180 ALR 249; (2001) 75 ALJR 1067; [2001] HCA 31 at [85] per McHugh, Gummow, Hayne and Callinan JJ; at [150] per Kirby J.
[7] (1943) 318 US 80 at 85-86.
[8] (2001) 207 CLR 165 at [77].
[9] (1985) 157 CLR 1; (1985) 60 ALR 741; (1985) 59 ALJR 676; [1985] HCA 49.
[10] At pp 10-13 (emphasis added).
[11] (1984) 156 CLR 41 at 96-97.
[12] Ibid at p 97.
[13] (1996) 186 CLR 71 at 107.
[14] Quoting Hospital Products (1984) 156 CLR 41 at 69 in turn citing Tate v Williamson (1866) LR 2 Ch App 55 at 61; Coleman v Myers [1977] 2 NZLR 225 at 325.
[15] Citing Johnson v Buttress (1936) 56 CLR 113 at 134 -135.
[16] 42 CLR 384 at pp 407–8.
[17] For a decision in not so different circumstances and to similar effect see Harrison & Anor v Schipp [2001] NSWCA 13 at [33].
[18] At p 5 .
[19] At [78] quoting Mason J in Hospital Products at p 103.
[20] See generally para 5.2 of the Further Amended Defence.
[21] (1997) 188 CLR 449; (1997) 144 ALR 729; (1997) 71 ALJR 781; [1997] HCA 23 per Brennan CJ, Gaudron, McHugh and Gummow JJ.
[22] (1995) 182 CLR 544 at 556.
[23] Mason CJ, Brennan, Deane, Dawson and Gaudron JJ.
[24] [1983] 2 Qd R 508.
[25] Ibid at 523.
[26] [1982] 2 NSWLR 766 at 816.
[27] (1986) 9 NSWLR 639 at 659-660.
[28] 4th edn at p 834 [23-014].
[29] (1997) 188 CLR 449 at pp 467-468 per Brennan CJ, Gaudron, McHugh and Gummow JJ.
[30] [1996] 1 AC 421 at 434.
[31] See (1997) 188 CLR 449 at p 470.
[32] Citing Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 426-427.
[33] Citing Bartlett v Barclays Trust Co (No 2) [1980] Ch 515 at 543.
[34] (1998) 45 NSWLR 262.
[35] At p 272-273 Priestley and Meagher JJA agreeing.
[36] (2001) 207 CLR 165 - omitting authorities cited. And see the majority at [85].
[37] See s 180 Corporations Act 2001 (Cwth) and para 37(d) of the Further Amended Defence.
[38] See para 43(d) of the Further Amended Defence.
[39] Para 64(a) of the Further Amended Defence. And to like effect see para 71.2.
[40] At p 226 [156].
[41] See paras 115A – 115D of the Further Amended Defence.
[42] See pp 20-21 of Ex “GCL1” to his affidavit.
[43] See p 24 of Ex “GCL1” to his affidavit.
[44] Ibid at p 29.
[45] Ibid at p 30.
[46] Ibid at p 41.
[47] Ibid at p 160.
[48] Ibid at p 30.
[49] See [43] above; [1996] 1 AC 421 at 434.
[50] (1991) 85 DLR (4th) 129 at 163.
[51] (2001) 207 CLR 165 at [86].
[52] [1987] 2 NZLR 443.
[53] Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 at 1279 per Lord Blackburn.
[54] Wrongly attributed to Sir Barnes Peacock – see errata referred to in Orr v Ford (1989) 167 CLR 316 at 341 noted in Meagher, Gummow & Lehane’s Equitable Doctrines & Remedies (4th edn) at [36–025].
[55] (1874) LR 5 PC 221 at 239-240.
[56] See Meagher, Gummow & Lehane’s Equitable Doctrines & Remedies (4th edn) at [36–005].
[57] See Meagher, Gummow & Lehane’s Equitable Doctrines & Remedies (4th edn) at [36–085]; Savage v Lunn [1998] NSWCA 203 at pp 59–60 (per Handley and Sheller JJA and Sheppard AJA).
[58] See p 5 of Ex 7 - report of John James Murphy dated 20 March 2012.
[59] See p 184 of Ex “GCL1” to the affidavit of Mr Long.
[60] Ibid at p 187-188.
[61] See executive summary at p 4 of Ex 7.
[62] (1991) 85 DLR (4th) 129 at 163 and see f/n 50 above.