Your JavaScript is currently disabled. For the best experience viewing this website please enable JavaScript as described here.

Authorised Reports & Unreported Judgments

Exit Distraction Free Reading Mode

Please Note: You are about to print a copy of the onscreen version of this judgment. For court use, a full PDF copy of the judgment is required or preferred. Please return to the case for PDF printing options.

Word Highlighter:
0of0
Change Font and Font Size
Font:
Font Size:
CITE

Unreported Judgment

Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd[2012] QSC 157Applegarth J
Add to List

Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd[2012] QSC 157

SUPREME COURT OF QUEENSLAND

CITATION:	Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd & Ors [2012] QSC 157
PARTIES:	SUNCOAST PASTORAL COMPANY PTY LTD ACN 010 414 847 (plaintiff) v COBURG AG (NO 2) PTY LTD ACN 136 746 373 (first defendant) and NEXIS HOLDING PLC (UK Company No. 06616015) (second defendant) and RAHOUL RAY (third defendant) and ERWIN WALTER FILLER (fourth defendant)
FILE NO:	8674 of 2011
DIVISION:	Trial Division
PROCEEDING:	Claim
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	15 June 2012
DELIVERED AT:	Brisbane
HEARING DATE:	4, 5, 6, 8 and 12 June 2012
JUDGE:	Applegarth J
ORDER:	Judgment for the plaintiff.
CATCHWORDS:	TRADE PRACTICES AND RELATED MATTERS – MISLEADING OR DECEPTIVE CONDUCT – Trade Practices Act 1974 (Cth) – where plaintiff entered into various agreements with the first and second defendant – where plaintiff transferred land to the first defendant – where part consideration for the transfer comprised shares in the second defendant – where third and fourth defendants made various representations on behalf of the first and second defendants about the nature of, and the value of shares in, the second defendant – whether representations were misleading or deceptive in contravention of s 52 Trade Practices Act 1974 (Cth) CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – VITIATING FACTORS – Fraudulent misrepresentation – whether representations about the nature of, and the value of shares in, the second defendant were fraudulent – whether contract for the sale of land and other agreements void ab initio Supreme Court Act 1995 (Qld) s 47 Trade Practices Act 1974 (Cth) ss 51A, 52, 82, 87 Akerhielm v De Mare [1959] AC 798, cited Argy v Blunt and Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112, cited Elders Trustee and Executors Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193, cited Gould v Vaggelas (1995) 157 CLR 215, cited Henville v Walker (2001) 206 CLR 459, cited I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 MAM Mortgages Ltd v Cameron Bros [2002] QCA 330, cited Parkdale Custombuilt Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191, cited Pavich v Bobra Nominees Pty Ltd (1988) ATPR (Dig) 46-039, cited Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 27 FCR 14, cited Sutton v AJ Thompson Pty Ltd (in liq) (1987) 73 ALR 233, cited
COUNSEL:	G A Thompson SC and S M Gerber for the plaintiff M D Foley (Solicitor) for the defendants
SOLICITORS:	Sykes Pearson & Miller for the plaintiff Foleys for the defendants

The plaintiff (“Suncoast”) sold a farming property known as “Yalanga” to the first defendant (“Coburg”), which is a wholly owned subsidiary of the second defendant (“Nexis”). Suncoast alleges that it was induced to do so by fraudulent representations and conduct that contravened the Trade Practices Act 1974 (Cth) (“the Act”). This conduct is alleged to have been engaged in by the third defendant (“Ray”) and the fourth defendant (“Filler”) who were directors of Coburg and Nexis. Suncoast also relies on additional representations which induced it to enter additional agreements and to complete the sale of Yalanga on 16 December 2010. It seeks orders rescinding the various contracts, orders that will result in it again being the registered proprietor of Yalanga and orders for the payment of damages.

The substantial issues in the proceedings are:

The representations;

Reliance;

The falsity of the representations;

Fraud;

Remedies.

The representations

Suncoast’s directors are Wilhelmus Jacobus van Zetten and Maureen Joy van Zetten. Their family company, Suncoast, acquired Yalanga in 1993 in conjunction with brothers named Roberts. Yalanga Station ran cattle and grew crops. Suncoast acquired the interest of the Roberts brothers. Mr van Zetten had been involved in a construction company named Suncoast Pipelines, which was a successful business. He and his wife owned two apartments in Brisbane, an industrial parcel at Noosaville, a home in the United States of America and their principal place of residence at Noosa Heads. In anticipation of retiring and reducing his and his wife’s overall indebtedness, Mr van Zetten approached a real estate agent about selling Yalanga. An expression of interest marketing campaign was planned for the end of 2008. He hoped to be able to sell Yalanga for $25 million. Herron Todd White valued it at $20.7 million as at 17 December 2007 in a valuation report prepared for Suncoast’s bank (“Westpac”).

In June 2008 the real estate agent, Mr Boulter, introduced Filler to Mr van Zetten and they inspected the property. Filler provided literature to Mr van Zetten about Nexis and told him about the company. He said that Nexis manufactured extruded panel for affordable style housing. This was described as its “core business”. Filler showed Mr van Zetten some panels. Filler proposed a sale on the basis that the purchase price comprise 50 per cent of a bank valuation paid in cash and the balance as shares in Nexis. The van Zettens had never owned shares and this proposal was a major departure from anything that they had done before. Mr van Zetten rejected the proposal.

The April 2010 representations

Mr van Zetten met Filler again in April 2010. The meeting was arranged by Mr Boulter and occurred at the BP service station at Burpengary. It was attended by Mr van Zetten, Mrs van Zetten, Mr Boulter and Filler. After the formalities were over, Filler set about telling the van Zettens how he could purchase Yalanga. He had no issue with the asking price of $25 million. He proposed that the property would be purchased on the basis of a bank valuation, with 50 per cent of the bank valuation being paid in cash and the balance in shares in Nexis.

I accept Mr van Zetten’s evidence that the following was said by Filler:

“He said that if we were to go ahead with it, they – he was in a position to give us a substantial discount on the then value of the shares and I believe, from memory, they were somewhere around 1 Euro, 1 Euro 5, something to that effect.”

Filler represented that this was the value of the shares at the time.

Filler described the business of Nexis, and the clear effect of what he said was that it was a substantial company. This was the effect of statements that the shares were floated in 2009 with 1.5 billion shares and that its shares had reached €1.05 at the time of the meeting. This suggested that it had a market capitalisation of 1.5 billion Euros. Filler encouraged the van Zettens to look at Nexis’ internet site, and they later did so.

This served to corroborate what they had been told by Filler. One document that was read and relied upon by Mr van Zetten reported that Nexis’ share price at 31 January 2010 was €0.80. Photographs of production lines were headed by the statement:

“NEXIS’ PROPRIETARY ‘GREEN’ TECHNOLOGY PRODUCES HIGH VOLUMES OF HOUSES WITH BUILDING PANELS THAT MEET STRICT (EU) STANDARDS”.

The document also stated:

“[Recyclable materials ... are used to produce commercial building panels and affordable houses in high volumes;

Nexis builds and owns the plants that processes such raw material to produce building products, and has JV arrangements for the distribution of Nexis building systems in each region; and

The largest Nexis plants process up to 750,000 tonnes of waste per year and produces sufficient building panel output to deliver 60,000 completed dwellings per year. Nexis continues to grow its business base and currently negotiations are under way in a number of countries for additional manufacturing plants.” (emphasis added)

This and similar documents served to confirm what Filler had said at the meeting on 26 April 2010, namely that Nexis was in the business of producing panels.

Filler gave Mr van Zetten and Mrs van Zetten to understand that Nexis was already in production, had contracts to fill (including a contract to build 300,000 houses in China) and was in the process of establishing another factory in China.

In addition to representing that Nexis had an existing business which manufactured panels for affordable housing and that its shares had value, Filler made express representations about the growth in its share price. I accept that he represented to Mr and Mrs van Zetten that by 2011 the shares would be worth between €4 - €5 and in five years time they would probably be worth €10.

His representations about the value of its shares and their future growth were confirmed by the material which Mr van Zetten later read from Nexis’ website. That material made impressive claims about shareholder wealth and growth in the company’s shares. In addition to a graph which charted Nexis’ “Market Value” under a heading:

“NEXIS HAS WEATHERED THE GFC WITH STRONG MARKET SUPPORT: TODAY IT IS A EURO 1 BILLION COMPANY”,

the document stated:

“During 2008, when major stock markets had fallen by over 40%, shareholder wealth in Nexis continued to grow by 50%. In 2008, the Nexis business was restructured to realise increased shareholder value. Since its initial listing in 2007, shareholder value has grown by over 500%. In January 2010, market capitalisation for Nexis was over €1 billion.

Nexis continues to outperform major markets such as the US Dow Jones Index and German DAX.”

In determining what was said at the meeting on 26 April 2010, I remind myself that human memory of what was said in a conversation is fallible for a variety of reasons and that the processes of memory are overlaid, often subconsciously, by perceptions or self-interest.^[1] However, I am satisfied that Filler on 26 April 2010 made the representations pleaded in subparagraphs 10(e)(i) to (viii) of the amended statement of claim.

Mr van Zetten’s evidence was convincing and credible. His recollection of the relevant conversation, and other dealings with the defendants, was reliable. His evidence about the representations made by Filler on 26 April 2010 was supported by the evidence of Mrs van Zetten. Her recollection did not include certain points of detail about the share price. She was not experienced in business matters and deferred to her husband. Mrs van Zetten relevantly corroborated Mr van Zetten’s evidence. She impressed me with her clear recollection of being told by Filler about Nexis’ product. Filler represented that the company produced panels, was a global company and was very successful in its business. He spoke of its share price and that it would be worth a lot more in a few years. He said that he was prepared to offer the shares at a discount price. This was described as a discount on their present value.

This is not a case in which I am inclined to reject or discount Mr van Zetten’s recollection of what was said, or Mrs van Zetten’s recollection, because their recollections do not accord with contemporaneous documents or are otherwise questionable. As noted, Nexis’ website, which Filler encouraged the van Zettens to view, clearly represented that Nexis was engaged in the business of producing large volumes of building panels and that it had existing plants. Statements in the document that reported a share price of €0.80 as at 31 January 2010 tended to confirm what Filler said about the value of the shares that he was proposing to offer as part of the purchase price for Yalanga.

Despite having provided a witness summary which contested making some of the representations alleged in paragraph 10(e) of the amended statement of claim, Filler chose not to give evidence.

I find that he made representations to the effect alleged in paragraph 10(e)(i) to (viii). These representations implied that:

(a)
Nexis was a public company with substantial net assets;
(b)
shares in Nexis were and could be freely traded; and
(c)
there was a market for shares in Nexis.

These matters were implied from what Filler said about Nexis shares, the fact that they were floated in 2009 and the expected growth in their value. His representations about the expected rapid increase in the value of the shares in the following year and in the next five years implied that he had a reasonable basis for making those representations.

The July 2010 representations

On 5 July 2010 Ray sent an email to Mr van Zetten which canvassed the basis upon which Nexis/Coburg was prepared to “move forward”. He explained Nexis’ position as follows:

“(a)
All assets sold by you are on the basis of 50% cash (on bank valuation) balance of purchase price shares
(b)
We will pay legals and 50% of the stamp duty
(c)
You fund broker fees and finance application fees
(d)
You put the following properties into the deal – Yalanga, 2 units at Riparian Plaza, Bunnings land industrial unit (we will pay your asking price)
(e)
You lease back the properties on the basis of $900K/yr for Yalanga and 7% yield on the purchase price of the other properties. Leases will be for 5+5 years.
(f)
We will allot shares to parties nominated by you in any jurisdiction (incl offshore). We will allot the shares at Euro 85cents per shares (being 33% discount to the current market) and guarantee to buyback 20% of these shares in 2 years at an amount that is 40% higher than your allotment price. The remaining shares are subject to market prices. All shares are subject to standard comoany (sic) escrow arrangements. We can only hold the share price at this level if we enter into a heads of agreement by the end of this week. Otherwise, the shareprice will need to be reset weekly.” (emphasis added)

This email implied that as at 5 July 2010 shares in Nexis had a market value of €1.275 and were being traded at that price. This implication arises from the discounted value of €85 cents and the unqualified reference to market prices. In conjunction with the April 2010 representations, which included reference to the issue of 1.5 billion shares, the 5 July 2010 email implied that Nexis had a market capitalisation of €1.785 billion. The last sentence that I have quoted from the email injected a degree of urgency and implied that Nexis would only keep the offer open until the end of the week at the nominated share price because the share price (which reflected the market value of the shares) was increasing.

Mrs van Zetten did not read the email of 5 July 2010. She relied upon her husband to attend to such correspondence and negotiate matters on behalf of Suncoast. I will later address the issue of reliance. However, for the reasons to be given I find that Suncoast relied upon the April 2010 representations and the representations conveyed by the 5 July 2010 email in entering into a contract for the sale of Yalanga dated 4 August 2010. Simply put, Mr van Zetten relied upon what Filler had told him at the 26 April 2010 meeting, as did Mrs van Zetten. Mr van Zetten in particular relied upon the representations conveyed by the 5 July 2010 email in relation to the market value of shares in Nexis. The representations were made by Filler and Ray respectively in their capacities as directors of Nexis and Coburg.

The contract

The contract for sale dated 4 August 2010 included the following terms:

(a)
Coburg was described as the purchaser of the property;
(b)
the purchase price of the property was $25,000,000 [Item N of the Item Schedule];
(c)
the deposit was $1.00 [Item O of the Item Schedule];
(d)
Suncoast, at its expense, was to arrange for a valuation of the property to be undertaken within 14 days of the date of the contract [special condition 10.1];
(e)
the purchase price was payable in accordance with special conditions 13 and 14:

“13.
Purchase Price
13.1
The parties agree that the purchase price will be paid as follows:

(a)
the Buyer will pay to the Seller an amount equal to 50% of the Valuation in cash to be paid by bank cheque as the Seller directs;
(b)
the balance will be provided by payment of shares in Nexis Holdings Ltd in accordance with the calculation in Special Condition 13.2.

13.2
The parties agree that the number of shares will be calculated as follows:

S = BPP ÷ SV

Where:

S = Number of shares

BPP = Balance Purchase Price after deducting the deposit and the amount at Special Condition 13.1(a).

SV = Value of one share in Australian Dollars with the share being agreed as having a price of €0.85 at the Exchange Rate.

13.3
The shares are to be transferred to the Seller or such other party as nominated by the Seller prior to the Date for Completion.
13.4
In this clause ‘Exchange Rate’ means the mid point of the buy rate and sell rate for Euro compared to the Australian Dollar published by the Commonwealth Bank of Australia at midday 5 business days prior to the settlement date.
14.
Shares to be Held in Escrow

The Seller agrees that the Shares as referred to in Special Condition 12 shall be escrowed for a period of 12 months from the Date of Completion and during that period the Seller or its nominee shall not do any of the following:

14.1
Dispose of or agree or offer to dispose of the said Shares;
14.2
Create or agree to offer to create, any security interest in the said Shares;
14.3
Do or remit to do any act if the act or remission would have the effect of transferring effective ownership or control of the said Shares; and
14.4
Participate in the return of capital made by Nexis Holdings Limited (NHL).

The Seller warrants that it shall hold the said Shares beneficially and no other party shall have any interest therein. If it appears to NHL that the Seller may breach the provisions of this Special Condition, NHL may take steps necessary to prevent the breach or to enforce the provisions of this Special Condition.

If the Seller breaches the provisions hereof the following applies:

14.5
NHL shall take the steps necessary to enforce the provisions hereof or to rectify the breach;
14.6
NHL must refuse to acknowledge, deal with, accept or register any sale, assignment, transfer or conversion off any of the said Shares.
14.7
The Seller shall cease to be entitled to any dividends, distributions or voting rights while the breach continues.”

(f)
if the valuation was less than $20,000,000, Suncoast could at its election terminate the contract by notice in writing to Coburg [special condition 10.3];
(g)
the contract was subject to Coburg obtaining finance from the Commonwealth Bank of Australia (“CBA”), within 42 days of the contract date, for an amount equivalent to 50% of the valuation [Items S, T and U of the Item Schedule];
(h)
Suncoast would lease back the property from Coburg for a period of 5 years from the date of completion at a rent of $700,000.00 per annum plus outgoings for the first year [special conditions 15.1 and 15.2];
(i)
the proposed lease would include a term that Suncoast would provide Coburg with ‘a 12 month Bank Letter of Credit in the amount of the total rent and outgoings’ payable by Suncoast in the ensuing year, such letter of credit being in a form and on terms reasonably acceptable to Coburg [special condition 15.4].

On or about 11 August 2010 the contract was varied to provide that the CBA would arrange for the valuation to be undertaken at the expense of Suncoast. Herron Todd White valued the property at $14 million in a written valuation dated 16 August 2010 prepared for the CBA.

The brokerage fee representation

Nexis/Coburg had approached the CBA to finance the acquisition of Yalanga. Nexis had an existing relationship with the CBA, the CBA having assisted with finance in connection with the acquisition of macadamia nut farms near Gympie that had been acquired by a Nexis subsidiary.

There is no evidence that Nexis or Coburg used a finance broker to approach the CBA in connection with providing finance for the acquisition of Yalanga. Despite this, Ray on behalf of Nexis and Coburg orally represented to Mr van Zetten that:

(a)
Coburg and Nexis were incurring finance brokering and bank lending costs of approximately $250,000.00;
(b)
Coburg could not proceed with the contract to purchase the property unless this amount was paid by Suncoast or deducted from the purchase price;
(c)
Coburg and Nexis would compensate Suncoast for this payment by transferring to Suncoast further shares in Nexis at a price of €0.85 per share.

The making of these representations is admitted on the pleadings. The defendants also admit that prior to settlement:

(a)
on 2 December 2010 Ray sent an email to Mr van Zetten which stated that the “Brokerage is 3.5% of the finance amt of $7m”.
(b)
on 9 December 2010 Coburg caused to be submitted to Suncoast a copy of an invoice purporting to be from “Internationale Finanz-Makler” for the sum of $245,000 for finance brokerage services.

Mr van Zetten’s evidence, which I accept, is that Ray told him by telephone that they were incurring around $250,000 worth of brokerage costs and that if the van Zettens did not pay those costs the contract would be terminated. Ray said words to the effect that the brokerage fee was necessary because only a finance broker had the capacity to source that amount of money through an Australian bank in the current economic climate.

By letter dated 10 December 2010 Coburg’s then solicitors forwarded a copy of an invoice dated 9 December 2010 purporting to be from “Internationale Finanz-Makler” for the sum of $245,000.00 for finance brokerage services. That invoice stated:

“We permit you to pay us our fee for the undertaking of broker referral services, packaging of submissions for finance, negotiation, delivered to your subsidiary company [Coburg AG (No 2) Pty Ltd] on the acquisition of the ‘Yalanga’ farm in Queensland Australia

3.5% of loan negotiated AUD$7,000,000.00

[Australian dollars Two Hundred forty five Thousand] AUD245.000.00

Finanz-makler kontakt:

Johannes Petersen

[email protected]”.

The amount of $245,000 was paid on settlement by Suncoast. I find that the amount of $245,000 was paid on settlement in reliance upon the brokerage fee representation, and also in reliance on the April 2010 and July 2010 representations.

The 2 October 2010 representations

Suncoast alleges, and the defendants deny, that on or shortly prior to 2 October 2010, during a telephone conversation between Ray and Mr van Zetten, Ray on behalf of Coburg and Nexis represented to the effect that:

(a)
Nexis would permit shares to the value of $9 million (of the shares in Nexis to be allotted to Suncoast as part of the consideration for the purchase of the property) to be sold by 2 March 2011 if those shares were placed into a “share pool” operated by Nexis;
(b)
shares placed in the “share pool” could be readily sold;
(c)
to place the shares into the “share pool”, Suncoast had to first become a member of the “share pool”;
(d)
the minimum number of Nexis shares required to be held to qualify as a member of the “share pool” was 110,000 shares;
(e)
if the contract for sale of the property was to proceed, Suncoast would have to purchase 110,000 Nexis shares and become a member of the “share pool”;
(f)
if Suncoast immediately purchased 110,000 Nexis shares, it could do so for a price which represented a discount of 20 per cent below the current Nexis share price of €2.11;
(g)
if Suncoast did not purchase 110,000 Nexis shares, the contract for sale of the property would be terminated.

Mr van Zetten gave evidence supporting this claim. I accept his evidence. It is uncontradicted by any evidence from Ray.

Mr van Zetten gave convincing evidence that Ray explained to him that in order to sell AUD$9 million worth of shares by 2 March 2011 Suncoast had to be part of a share pool arrangement which was run by Nexis and this required Suncoast to purchase 110,000 Nexis shares at a discount of 20 per cent below the price at which shares in the company were then trading.

On 2 October 2010 Nexis wrote to Suncoast. The letter was on the letterhead of “Nexis Holdings, Ltd.” and stated at the foot of each page: “Global Corporate Office: Lv 15 Nexis House, 41 Connaught Road, Central, Hong Kong” and “Frankfurt - Hong Kong – London – New York – Sydney”. The letter was signed by Filler as “Executive Chairman” and by Ray as “CEO/President”.

The letter was in the following terms:

“‘Yalanga’ – notice of proposed contract termination (week beginning 4 Oct)

This letter follows our recent telephone conversations and to advise that Nexis intends to seek a termination of the contract this coming week commencing 4 October 2010 unless it is satisfied that acceptable arrangements are made to achieve discharge of security for settlement.

Our bank (CBA) has informally advised Nexis that it has placed additional staff on this project in order to achieve a finance clause date of 17 October and is also expecting to be in a position to settle the transaction in late October/early November. In addition, we have made formal notification to the FIRB and do not envisage any objections.

However, from our telephone conversation with you we understand that your bank (Westpac) will now only permit settlement if it retains a second mortgage on the property. We understand from you that Westpac is alternatively seeking credit-backed surety that Nexis shares to the value of A$9 million held by you will be sold in the market by 2 March 2011.

Of significant concern in Westpac’s proposal is a shift in risk under which Nexis would be required to pay you a further A$6m in cash above that contracted with you, as noted below:

The contract parameters (assuming a valuation of A$20m) provided for Nexis to pay you $10m out of which you would pay stamp duty ($1.3m) and the balance ($8.7m) being to your account with your bank and incidentals. Under these parameters all your shares would have been in escrow for a period of 12 months.

With a bank valuation of A$14m having being received by CBA (we have this advice in writing from CBA but yet to receive a copy of the report), your bank is now seeking a change to commercial terms, under which Nexis would be required to make payments (excluding stamp duty) of A$14.7; this amount comprises $5.7 at settlement and a further $9m within 3 months thereafter.

Given the above, we presently do not have confidence that your bank is acting in good faith to support a settlement of the transaction.

Notwithstanding the above, we have suggested a number of alternatives this past week in order to achieve a financial close.

Our final position on the particular matter raised above (failing your acceptance of which we would treat as a repudiation of the contract) is as follows:

Nexis’ bank (CBA) will not permit a second mortgage on the property

Although shares allotted to you are subject to a 12 month market trading escrow, Nexis will provide a written undertaking to you on the sale of A$9m of your shares on the following basis:

(a)
A parcel of shares (with a market value of A$5m) will be placed (via a fund) with buyers in the market by 2 March 2011. This will allow you to achieve a cash outcome in excess of that possible with a valuation of $20m.
(b)
A parcel of shares (with a market value of A$4m) will be placed for sale in the market (via a fund).

In order for us to proceed with 2 above, you must take up a subscription of shares in Nexis immediately; this will be for a minimum of 110,000 shares (we will offer you a discount of 20% to the current market price on the basis that these shares remain in escrow for 12 months). Based on a current share price of Euro €2.11, this subscription will be Euro €185.680.

You will need to return the attached subscription form (duly completed for the nominee holder of the above 110,000 shares) by cob 5 October 2010 send the attached share subscription form to Richard Walker via email ([email protected]) and copies to our CEO (details below). Payment on this subscription must be received in the Nexis bank account prior to 12noon (Sydney time) on Friday 8 October 2010.

The other matters agreed recently (eg $250k cap on broker and finance fees, rental guarantees etc) remain.

If either the subscription form or the subscription amount are not received by the due date, we will consider this as your repudiation of the contract in its entirety and will instruct our bank and legal advisers accordingly forthwith.

If you have any queries on this matter, please contact either of the undersigned.” (emphasis added)

Mr and Mrs van Zetten gained the impression from the form of the letterhead that Nexis owned the building in which its Global Corporate Office was situated, which the letter described as Nexis House. It did not occur to them that the building may not be owned by Nexis and that it had acquired naming rights to the building. Other correspondence referred to the building as “Nexus House”. In any event, the form of the letterhead tended to reinforce the representations that had previously been made that Nexis was a substantial corporation that operated on a global scale. The letter clearly indicated that it had offices in major cities around the world. For reasons to be given, this was false.

I am satisfied that the telephone conversation between Ray and Mr van Zetten on 2 October 2010 and the letter dated 2 October 2010 signed by Ray and Filler represented that:

Nexis was a substantial corporation and had offices in major cities worldwide;

there existed a “share pool” through which shareholders of Nexis traded shares;

membership of the “share pool” required Suncoast to subscribe for 110,000 Nexis shares;

there existed a market for Nexis shares to a value of $9 million;

that the shares to be allotted to Suncoast had a value of not less than $9 million;

if Suncoast subscribed for 110,000 Nexis shares, Nexis could and would arrange for a buyer to purchase such of Suncoast’s Nexis shares so as to cause Suncoast to be paid A$9 million or alternatively, A$5 million, by 2 March 2011;

that Nexis shares had a market value at that time of €2.11;

impliedly, by reason of the April 2010 representations, that Nexis had a market capitalization of €2.954 billion.

In reliance on the 2 October 2010 representations, Suncoast paid the subscription price of €185,680 for the 110,000 Nexis shares.

Bridging loan representations

Mr van Zetten gave evidence of having received a telephone call from Ray in October 2010 in which Ray outlined that the CBA had changed its lending guidelines. Ray explained to him:

“That the Commonwealth Bank was no longer in a position to loan 50 per cent as we understood it was going to be, that they'd tightened their lending criteria and they weren't prepared to loan any more than 40 per cent. The only way we could get the 50 per cent was by a bridging loan or a back up loan and that loan had to be repaid in seven months and they were payments of 200,000 to be made by my wife and I. Three payments were to be made and then there was a parcel of 890,000 shares to be sold by Nexis in order to facilitate the repayment of us - to us of that 600,000 and the payment of the balance of the $1.4 million bridging loan. The alternative to that was that the contract, if we didn't agree to that, that the contract would be terminated”.

On 20 October 2010 Ray sent an email to Mr Van Zetten setting out an agenda for proposed discussions, and stated that:

“1
The settlement can happen within about 3 weeks, but there is a minor restructuring we will need to put in place to make it happen (see below) …

3
CBA have agreed to do the funding (we are waiting for their formal letter of offer), but they have had tighter credit lend criteria just come into place:

They can no longer lend at 50% on deals, but have agreed (in principle) to allow this deal to proceed provided we put arrangements in place to meet their new criteria

This means that Nexis can take the 50% lend upfront (by packaging in a supplementary loan behind it) but adjust the overall loan to a 40% lend (against valuation) within 6 months

4
There are 3 alternatives:

Nexis proceeds with the transaction, pays you the 50% of valuation plus the shares. The proposed change is that you would pay Nexis an amount of $200k per month for 7 months – we would issue you shares to compensate – we will allow these to be sold 6 months after issue to you

Nexis only pay you 40% of the valuation now (however this may not work for you)

Deal does not proceed”. (emphasis added)

By these communications Ray represented that:

the CBA was now only offering to advance Nexis 40 per cent of the valuation, being $5.6 million;
the CBA would provide a bridging loan of $1.4 million to make up the balance of the $7 million cash component of the purchase price;
the bridging loan would have to be repaid by way of seven payments of $200,000 to be paid monthly in arrears.

Secondary market representations

In an email from Ray dated 27 October 2010 to Mr Boulter and Mr Van Zetten, Ray stated:

“Nexis has an established secondary market in place, whereby it places shares with buyers that wish to acquire larger parcels of stock. Attached is a document that explains its operation”.

Mr van Zetten said in evidence: “Mr Ray assured me that within the timeframe that was allowed, which was the - our parcel of shares were to be sold by the 2nd of March, that that was quite achievable”.

Suncoast alleges the defendants represented that:

an established market existed whereby Nexis placed shares with buyers that wished to acquire larger parcels of Nexis shares;
in the context of the 2 October 2010 representations, impliedly Nexis shares held by Suncoast to the value of AUD$9 million would and could be sold by Nexis by 2 March 2010 in the market referred to in subparagraph (a) above;
impliedly, a reasonable basis existed for making each of the representations in subparagraphs (a) and (b) above.

I accept Mr van Zetten’s evidence and find that these representations were made.

Bank guarantee representations

By letter dated 3 November 2010, Coburg’s then solicitors wrote to Suncoast’s solicitors stating, amongst other things, that:

“Finance Approval

The requirement is for your client’s bank, Westpac Banking Corporation to provide an unconditional Bank Guarantee for $900,000.00 reflecting the amount of the final year Lease obligation, with such guarantee to be endorsed with the following wording:

‘This bank Guarantee is being provided as security for facilities provided to Coburg AG (No: 2) Pty Ltd by HSBC Bank Australia Limited’

Would you please arrange for a draft of such Westpac Bank Guarantee to now be made available to us as this is fundamental for the Commonwealth Bank of Australia to provide its loan approval herein.”

By letter dated 5 November 2010, Suncoast’s solicitors sent to Coburg’s solicitors a draft bank guarantee headed “Banker’s Undertaking” complying with the requirement stated in the letter dated 3 November 2010.

On 18 November 2010, Ray sent an email to Mr van Zetten which stated:

“A quick update:

We are still bogged down in the process of converting the bank guarantee. The issue, as you know, has been that CBA cannot accept a third party guarantee (after their experience with Storm Financial) and HSBC are being painfully slow.

CBA has suggested a temporary solution to us, to avoid running out of time on the finance approval (and hence preventing us from being back at square one). This would involve Nexis putting up a cash component of $900k (in lieu of the guarantee) until the guarantee issue is fixed. This would enable settlement to take place on 2 Dec as planned.

However to do this there would have to be an adjustment of the settlement as follows:

At settlement Nexis would pay you $7.0m less 900k (being the amount retained by the CBA)

Once the BG is sorted, the BG replaces the $900k deposit – which will then be paid across to you.

I know this is not ideal, but I believe this approach at least avoids the whole finance falling over. Please let me know if you wish to pursue this. In the meantime, can you also advise your solicitor to accept a request from Slater & Gordon for an extension”.

On 23 November 2010 Ray sent to Mr van Zetten an email which stated:

“I spoke with CBA yesterday. You are absolutely correct – none of the banks appreciate or understand simplicity.

All the suggestions (from you and Mark) are sensible and commercial. However, we are back to either taking CBA’s suggested way forward (the alternative is for us to ‘can the deal’). The fundamental problem is that any variation in security is going to require CBA to resubmit the deal for approval.

At the moment, they are ready for a 2 Dec settlement (we have already booked in drawdowns etc).

Let me know – do we proceed or not?”

Mr van Zetten’s evidence is:

“We were asked to put up a bank guarantee as security for the lease and we were asked for a draft copy of a bank guarantee from Westpac which we furnished and that would then satisfy the requirements of the lease and 900,000 would be released to us”.

Mr van Zetten also said:

“On many occasions we approached Ray to get some sort of determination on why they wouldn't accept our bank guarantee. He said it had something to do with the CBA and their relationship with Storm Financial making it not possible for us to - the Commonwealth to accept a Westpac Bank guarantee and that that would have to be done by their personal bankers, HSBC, and we never ever quite understood the workings of that and we ended up very frustrated by a lot of communication with them”.

Mr van Zetten continued:

“We were to get 7 million in cash, less costs and at the - late in proceedings, in an effort to move forward, Mr Ray said that the only way we could move forward is by the Commonwealth Bank holding 900,000 while the issue of the bank guarantee was sorted out”.

Suncoast alleges that by the correspondence and communications, the defendants represented that:

the CBA was not satisfied or would not accept the draft bank guarantee;
the CBA required a deposit of $900,000.00 to be held as security until the terms of a bank guarantee could be resolved to the CBA’s satisfaction;
upon the provision of a bank guarantee by Suncoast, the deposit of $900,000.00 would be paid to Suncoast; and
impliedly, there was a reasonable basis for the representations made in subparagraphs (a) to (c) above.

I accept Mr van Zetten’s evidence regarding what was said to him about the bank guarantee and that these statements and the written communications, conveyed what Suncoast describes as “the bank guarantee representations”.

Conclusion – representations

Suncoast has established that the representations alleged by it were made.

Reliance

Issues of reliance, or inducement, arise in respect of Suncoast’s claims in relation to contravention of the Act and its claim for deceit.

In the context of the Act, Suncoast must prove that it suffered loss or damage or is likely to suffer loss or damage “by” the contravention alleged by it. This word connotes a causal relationship between the contravention of s 52 of the Act and the loss or damage referred to in s 82(1) or s 87. It is not necessary that the contravention be the sole cause of the loss or damage.^[2] It is sufficient to show that the contravention was a cause of the loss or damage.^[3] The contravention must have materially contributed to the loss or damage.^[4] Other factors may have contributed, even significantly, to entry into the transaction. This does not mean that the contravention was not also a cause of the loss and damage.

In the context of a claim for deceit in which, as here, the plaintiff alleges that it was induced to enter into a transaction as a result of fraudulent representations, similar principles apply. The principles were authoritatively stated in Gould v Vaggelas.^[5] The plaintiff has the onus of proving that it was induced to enter into the relevant transaction by the fraudulent misrepresentation. An inference of inducement may be drawn when a party enters into a transaction after a material representation has been made to it. The inference may be displaced by the facts of the case. The relevant question for the Court, based on all the evidence, is “whether the misrepresentation alone, or with or notwithstanding other things that accompanied it, was a real inducement, or one of the real inducements to the plaintiff to do whatever caused his loss”.^[6] Wilson J stated the applicable principles as follows:

“1.
Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case.
2.
If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation.
3.
The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation.
4.
The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract.”^[7]

Later authorities have followed these principles.

The defendants submit that regard should be had to a number of factual matters in reaching a conclusion about Suncoast’s reliance on the representations. I will return to these factual matters. The defendants did not plead that Suncoast’s conduct in failing to protect its own interests was a ground of defence. The defendants did not plead that, although Suncoast in fact relied upon the representations, its unreasonable conduct justified the conclusion that its loss and damage was not caused by any contravention of the Act.

Nevertheless, the defendants’ solicitor referred to authorities that address whether the Act was intended to benefit persons who fail to take reasonable care for their own interests. He cited a passage from the judgment of Gibbs CJ in Parkdale Custombuilt Furniture Pty Ltd v Puxu Pty Ltd that the “heavy burdens which the section creates cannot have been intended to be imposed for the benefit of person who fail to take reasonable care of their own interests”.^[8] Although this passage has been cited in later authorities, including by Gummow J in Elders Trustee and Executors Ltd v EG Reeves Pty Ltd,^[9] it has not found favour in the 30 years since it was expressed and is not supported by later decisions of the High Court and other courts which have considered the issue. This body of authority supports the proposition that the purpose of the Act was “to protect the imprudent as well as the prudent”,^[10] “the trusting as well as the suspicious”.^[11]

A number of authorities establish that in s 52 cases the plaintiff ought not to be “deprived of his remedy because of his failure to check the accuracy” of the impugned representations.^[12] A defence which enabled a plaintiff’s damages to be reduced by showing that it did not take reasonable steps to detect the misleading and deceptive conduct might have undermined the protection the Act was intended to give.

One is not dealing in this context with the related question which arises at the contravention stage of considering the “minimum standard to be expected of persons to whom the alleged misleading or deceptive conduct is addressed”.^[13] Instead, one is dealing with a “causation” question in asking whether a plaintiff who has been misled and who failed to take reasonable care of its own interests should be disentitled completely or in part^[14] from recovering the amount it lost. In its starkest form in a s 52 case, it involves a defendant saying:

“Although I misled you, you shouldn’t recover your loss and damage. You should not have relied on what I said to you. You should have checked on me and what I said and, if you had, you would have found that what I said was untrue.”

The authorities may be based on an understanding that, as a matter of policy, the Act does not require claimants^[15] to check on the accuracy of what they have been told. The persons who the Act was intended to protect were assumed to include trusting, gullible or naïve persons who fail to take reasonable steps to protect their own interests. The policy of the Act was not advanced by requiring them to prove, in order to establish their cause of action, that they had taken reasonable care of their own interests, and so a failure to take reasonable care did not necessarily break the causal nexus between the contravention and the claimant’s loss.

A large body of case law under s 52 establishes that a failure to check and to detect the inaccuracy of impugned representations does not break the causal connection. Before the High Court in I&L Securities ruled out any possibility of apportionment, no cases had even suggested that an unreasonable failure to check justified a reduction in the plaintiff’s damages.

In order to defeat the plaintiff’s claim the defendant must show that the plaintiff’s conduct was of a character that warrants the defendant being relieved from any legal responsibility so that the plaintiff carries responsibility for its own losses. Fairly extreme conduct by a plaintiff is required to reach such a judgment in the context of an Act that is intended to protect consumers from conduct, including conduct which may breach a norm in circumstances in which the defendant acted reasonably. The conclusion that the plaintiff’s own conduct disentitles it from recovering its losses may be expressed in the language of causation. In Argy v Blunts and Lane Cove Real Estate Pty Ltd, Hill J stated:

“A case may perhaps be imagined when an applicant is so negligent in protecting his own interests that there will be a finding of fact that the representation complained of was not in the circumstances a real inducement to his entering into a contract. In such a case the element of causation between misrepresentation and damage will have been severed by the intervention of the negligence of the applicant.”^[16]

In I&L Securities, McHugh J cited observations of French J (as his Honour then was) in Pavich v Bobra Nominees Pty Ltd^[17] that “there comes a point where the applicant’s own conduct is so dominant in the causal chain as to constitute a novus actus interveniens”. An example of the kind of conduct that was so dominant in the causal chain so as to constitute a novus actus interveniens was given:

“Intentionally refusing to make proper enquiries when advancing loan funds will usually be held to be a voluntary act that breaks the chain of causation between the breach of the Act and the lender’s loss. A loss caused by the intentional conduct of the applicant will not ordinarily be characterised as a loss caused “by” the contravening conduct of the respondent.”^[18]

His Honour noted that in a number of cases courts have been able to find that part of the loss sustained by an applicant was not attributable to the contravening conduct of the respondent but to some other cause. But in a case such as I&L Securities where there was “one indivisible loss”^[19] the policy behind the Act was said to be furthered “if the party whose conduct contravenes the legislation bears the entire loss”.^[20]

Given this body of authority, it is unsurprising that the defendants’ pleading did not allege that Suncoast’s conduct in failing to protect its own interests, and in unreasonably relying upon the representations that were made to it, meant that its loss or damage was not suffered “by” the alleged contraventions.

The defendants did not seek to engage the provisions of s 82(1B) to reduce any damages ordered under s 82. One of many possible reasons not to do so is the availability of alternative remedies under s 87. Another is that the subsection is only engaged if the defendant did not fraudulently cause the loss or damages.

In the context of Suncoast’s fraud claim, a failure by Suncoast to protect its own interests by undertaking reasonable due diligence and its unreasonable reliance upon the representations is not a ground of defence. The learned authors of The Law of Actionable Representations observed:

“A man who has told even an innocent untruth, by which he has induced another to alter his position, much more one who has fraudulently lied with that object and result, has debarred himself from ever complaining in a court of justice, any more than he could in a court of morals, that the representee acted on the faith of his misstatement in a manner in which he, the representor, intended that he should. He can never be heard to resent the fact that another believed the lie that was told for the very purpose of inspiring that belief, or plead as an excuse that, if the representee had not been such a fool as to trust such a knave, no harm would have been done. The representee never owed any duty to the representor to be circumspect, or to be active in suspicion, or diligent in detective research; and, even if he ever had been under such a duty, it was the very office and effect of the misrepresentation to discharge him of it, and to put his mind at rest.”^[21]

The same point was made in Gould v Vaggelas by Brennan J:

“Why, then, would the Goulds have ‘entered into a highly onerous contract’ if they had had nothing on which to make an assessment? The only suggestion made on behalf of the Vaggelas interests is a too-willing desire on the part of Mrs Gould to own the resort, aided by a misplaced confidence that it could be built up into profitability. Those matters had to be taken into consideration, but they cut both ways. On the one hand, those matters may be relied on to suggest that Mr Vaggelas' representations as to profitability of the business were irrelevant to the decision to buy; on the other, they suggest that Mrs Gould was predisposed to buy, and therefore readier to give some credence to and to act on a representation even if there were grounds to suspect its truth. If the desire for ownership be sufficiently intense, a prospective purchaser is wont to discount the doubts and suspicions that might otherwise hold him back from acting on anything contained in a vendor's representation and, by giving credence to at least part of what he has been told, to tip the scales in favour of buying. If the representor leads the representee to believe any part of the representation which is, and is known by the representor, to be untrue and the representee acts on that belief and suffers damage, the representor does not escape liability because the representee did not believe the representation in full. If the representee's desire to own what was for sale leads to the giving of some credence to the representation which would not otherwise have been given, the representee's self-induced gullibility is no defence to the representor. A knave does not escape liability because he is dealing with a fool. The fact that Mrs Gould wanted to buy South Molle Island resort and the fact that she did not believe everything she or Mr Ingles was told by Mr Vaggelas does not mean that his representations did not induce the Goulds' decision to buy.”^[22] (emphasis added)

The issue of fact for determination is whether the alleged representations were one of the real inducements to Suncoast to enter into the relevant transaction, as a result of which it suffered loss or damage.

I am satisfied that the directors of Suncoast relied on the representations that have been proven. The representations were intended to be relied upon. The inference that they were in fact relied upon is supported by the facts of the case. I accept the evidence of Mr van Zetten and Mrs van Zetten that they relied upon the representations. There is no basis to conclude, and the defendants do not submit that I should conclude, that the inference of reliance should be rebutted because Suncoast was possessed of actual knowledge of the true facts and knew the representations to be untrue. It was not put to Mr and Mrs van Zetten that they engaged lawyers, accountants or financial advisers to undertake inquiries and due diligence in relation to the transactions, including matters such as the value of Nexis shares and the capitalisation of the company. In fact, they were cross-examined on the topic and the evidence clearly establishes that no such due diligence was undertaken.

The defendants’ submissions make the point that Suncoast’s bank, Westpac, allowed the transaction to complete and was prepared to accept the Nexis shares as security for the remaining indebtedness of Suncoast. The extent of inquiries undertaken by Westpac is unproven, including its assessment of the value of the Nexis shares and the information upon which this was based. It is unnecessary to speculate whether Westpac was misled by apparently plausible material about Nexis’ financial position and the value of its shares, or whether it placed a relatively small value on the Nexis shares over which it was to obtain security. The issue is not whether Westpac was misled or not, and failed to undertake adequate due diligence in relation to the value of Nexis shares. The present issue is whether Suncoast, by its directors, relied upon the representations that it has proven. I am satisfied that it did.

The fact that Suncoast’s reliance was unreasonable because it failed to undertake adequate due diligence does not alter the fact of its reliance.

The fact that commercial negotiations were undertaken between the parties over an extended period of time, and Suncoast engaged its solicitors in relation to the transaction, does not mean that the representations were not a cause of its entry into the relevant transactions. The fact that Suncoast had the opportunity to terminate the contract does not alter the fact of reliance. It suggests that it continued to be influenced by the representations that had previously been made and continued to believe that Nexis shares had the substantial value that had been represented.

The defendants submit that Suncoast was “clearly motivated by greed and its expectation of making very significant amounts on the sale of the shares”. They further submit that Suncoast was clearly hoping to obtain “a massive benefit for those Nexis shares that it was receiving for virtually no consideration whatsoever (i.e. in respect to that part of the purchase price that represented the difference between $14 million and $25 million)”. The assumption in this submission that Suncoast was motivated by greed and expected to make very significant amounts on the sale of the shares does not undermine Suncoast’s case on inducement/reliance. In fact, it tends to support it. Suncoast did not believe that the property was worth only $14 million. I accept that Mr van Zetten believed that it was worth much more than this due to its development potential. His belief in the property’s value was not diminished by the absence of serious offers at the price he hoped to obtain from parties that had the capacity to complete.

In any event, in the absence of other offers, Suncoast entered into the contract to sell Yalanga and the other agreements that were induced by the representations that I have found, and did not terminate the entire arrangement, because it continued to rely upon the representations that had been made to it.

The defendants submit that one of the principal reasons for Suncoast entering into the arrangement was that it was under pressure from Westpac. There is no reliable evidence of this. Mr and Mrs van Zetten gave evidence that they were not under pressure from Westpac.

Mr and Mrs van Zetten placed Yalanga on the market and entered into the impugned transactions because they wished to sell the property. Mr van Zetten wished to retire. The sale of Yalanga would reduce the amount the van Zettens and Suncoast owed to Westpac. These factors played a role in Suncoast’s decision to enter into the sale of the property to Coburg and the other transactions. However, the existence of these other factors does not mean that the representations were not also a real inducement to enter into the transactions and to complete them. I find that they were.

Indications from the defendants that they would terminate the contract if Suncoast did not enter into additional transactions had their effect. They, along with the representations that I have identified, induced Suncoast to complete the transaction and make additional commitments.

A significant reason why Suncoast did not terminate the contract and a significant reason why it entered into additional agreements was that it believed what it was told by the defendants and trusted them.

I have regard to the “entire agreement” clauses in some of the agreements. I have regard to them in deciding whether Suncoast was misled or deceived and also in determining the factual question of whether it in fact relied upon the representations.

I am satisfied that it did.

I conclude that Suncoast was induced by the representations that I have found to enter into the contract, to enter into the facility deed, to enter into the deed of variation, to enter into a lease dated 10 December 2010, to settle the contract on 16 December 2010, to pay the amounts that it has proven it paid and to not terminate the contract for sale. It relied upon the representations. The representations materially contributed to its entry into these transactions, and the loss and damage that it suffered as a result of doing so.

Falsity of the representations

Simply put, Suncoast’s case is that the representations upon which it relied were part of a scam engaged in by Ray and Filler in which each of them would make representations to induce Suncoast to enter into the sale of Yalanga and related transactions in which the consideration was shares in Nexis that were practically worthless. Before turning to whether the representations were made fraudulently and as part of a fraudulent scheme it is necessary to address issues of falsity in connection with the representations.

The falsity of the representations is established by the evidence given by:

Mr Van Homrigh, a highly qualified and experienced forensic accountant;
Mr Pienaar, an officer of the CBA, who gave evidence establishing the falsity of the brokerage fee representation, the bridging loan representations and the bank guarantee representations; and
Mr Walker, who relevantly corroborated the evidence of Mr Van Homrigh and also gave an insider’s account of Nexis’ business.

Whilst some evidence indicates that Nexis had a pilot plant in Europe from which it produced panels, and panels were brought into Court, Nexis was not engaged in the business of manufacturing and extruding panels for housing construction using waste products. It was simply untrue to represent that it was.

Filler and Ray may have intended that it would engage in this business, establish plants around the world and be associated with the construction of hundreds of thousands of houses in China and elsewhere. I am not in a position to conclude whether they have such a dream, and if they do not, when it disappeared. Relevantly, in April 2010 and at all material times thereafter Nexis was not in the business of manufacturing and extruding panels for housing construction using waste products. The representations made to Mr and Mrs van Zetten, and the contents of documents on Nexis’ website to the same effect about Nexis’ business were untrue. As with Filler’s oral “hard sell”, those documents described Nexis’ activities in the present tense. They referred to the fact that each “fully operational plant generates EBIT of €144m per year.” One such document stated:

“Nexis derives its revenues from three key areas:

Fees at factory gate from supplies of waste and recyclable materials

Sales of building panels by the manufacturing business to distribution arm

Sales of 5StarGreen building panels to the market

Nexis also derives a ‘one-off’ licence fee from its JV licensee.”

None of these things were true. Nexis was not producing “high volumes of houses with building panels”. Apart from a pilot plant (and there is no evidence that it was in production at the relevant time) it had no other plants. There were no plants under construction. Mooted projects in China and India “never went anywhere”. It did not derive revenue in the way alleged. There is no evidence that it had a contract for construction of 300,000 houses that were to be built in China.

The representations made by Filler on behalf of Nexis/Coburg at the meeting on 26 April 2011 in relation to these matters were false.

Contrary to the representations that Filler made that day, Nexis was not a substantial company. The shares that he proposed to provide as part consideration for the purchase price of Yalanga were practically worthless. They could not be freely traded. There was no market for them. They certainly did not have a market value of €1.275 or any substantial value. Nexis may have allotted 1.5 billion shares, but its market capitalisation could not be based upon a value of €1.275 per share. Very small volumes of shares were being traded on the “open market” of the Frankfurt Stock Exchange,^[23] and the prices at which those shares were traded did not reflect the value of the shares that had been allotted. Filler had no basis for making the representations that have been pleaded and proven by Suncoast in relation to Nexis, its shares and their value. Nor did Ray.

Mr Van Homrigh

Mr Van Homrigh provided a substantial and comprehensive expert report. It is unnecessary to recite the numerous findings made by him in relation to matters that bear upon the falsity of the representations. The factual assertions contained in Mr Van Homrigh’s report were not contested by competing evidence. Some criticism was made of Mr Van Homrigh’s report on the basis that he did not make inquiries of the defendants in relation to secondary markets upon which Nexis shares were said to have traded. I doubt whether anything that Filler and Ray might have told Mr Van Homrigh about secondary markets would have been reliable. Mr Van Homrigh cannot be reasonably criticised for not pursuing the matter further when the defendants through their then solicitors refused, despite requests, to provide particulars of “off market transactions”. Mr Van Homrigh explained why he did not inquire further about secondary markets in reaching the conclusions that he did.

He explained that he did not pursue the issue of off market share trades because “in any normal sort of significant company off market trades are not all that relevant”. If information had been available to him it would have been necessary to consider a number of issues, including the relationships between the parties entering into the transactions, whether they were at arm’s length and many other matters that would be difficult to ascertain. Mr Van Homrigh thought that it was very unlikely that such an exercise would have affected his opinion about the value of the shares. His opinions were based not only on financial information about the company but other information about it. Mr Van Homrigh cast “a very wide net” for such information.

I accept the evidence of Mr Van Homrigh, including the opinions expressed by him.

Nexis was established some time in 2001. Filler was a Director.

Nexis’ intellectual property appears to have been earlier owned, and agreed to be sold to Nexis, by Phoenix Technology Corporation (“Phoenix”). Filler was a Director of Phoenix. While held by Phoenix, the amounts attributed to these assets varied from $1 million to almost $500 million.

In December 2001 Phoenix announced to the market that it had received an offer to purchase their assets and intellectual property for an amount of $20 million by Nexis Holdings Limited. Phoenix went into administration and no information could be located to show that any of the payments for the technology were made.

An analysis of the financial statements of Nexis demonstrates a rapid increase of total assets over the last three available years of financial statements. This was predominantly due to a very large increase in the amount attributed to intangible assets, which from 2008-2010 represent the vast majority of Nexis’ total assets.

Nexis Holdings Limited became Nexis Holdings PLC and was listed on the Frankfurt open market exchange, which is a non-EU regulated exchange, designed for small-to-medium companies.

From February 2009 until November 2011, approximately 600,000 shares were traded on the Frankfurt Stock Exchange.

In the audit report that accompanies the 2010 financial statements, the auditors provide a disclaimer of opinion in relation to whether the values attributed to the company’s intellectual property was true and fair, as insufficient basis had been provided by Nexis in order to support these figures. The audit report also identifies that the company had not commenced trading.

The auditor remarked that one reason it could not adequately assess the value of investments in other companies and intellectual property was the “low volume traded in the market”.

Remarkably, the auditor was not given access to contracts supposedly relating to Nexis plant projects.

Nexis told the auditor that it had a bank balance of €4.3 million held on its behalf by a third party, but the auditor was unable to verify this.

The audit report identifies a fundamental lack of support for various elements of the financial statements provided by Nexis, to the point that the auditors were unable to form an opinion as to the validity of the information contained within the financial statements. It is extraordinary that a reputable company with a reported equity of this magnitude would have qualifications of this nature in its audit report.

According to Mr Van Homrigh, it is extremely unusual that the qualification regarding its cash balances was not resolved, or indeed that a company of this reported size would be in a position where it had cash held “on behalf” of them without supportable and, more importantly, legally binding evidence of that transaction or relationship.

In cross-examination Mr Van Homrigh went further in relation to the qualified audit report:

“Yes. So, they disclaimed the accounts; they didn't reject them?-- That's as close to a rejection as I can ever recall seeing in an audit report”.

The audit report is directly contrary to the public statements being made by Nexis at the relevant time. For example:

“The company’s business revenues are derived from manufacturing operations … Nexis derives its revenue from three key areas’; and

Nexis Holdings builds market share by establishing plants and marketing organizations in different geographic regions … Each fully operational plant generates EBIT of Euro €144m per year.”

Mr Van Homrigh identified nothing to support the proposition that Nexis shares could be freely traded. Its shares were very thinly traded, and according to Nexis’ own press releases did not have market depth and were subject to general market trading restrictions.

Mr Van Homrigh has not identified any information to support that there was a true market for Nexis shares.

Mr Van Homrigh has not identified any information which would indicate that a “share pool” or “secondary market” existed for Nexis shares.

Coburg is the largest shareholder of Nexis.

Documents filed by Nexis with UK Companies House provide an address for Coburg of Suites 1601-1603, Kinwick Centre, 32 Hollywood Road, Central Hong Kong. This is also the address of a trust and a corporate services provider, Sovereign Trust (Hong Kong) Limited and the address provided by Filler and Ray in their UK corporate filings. Mr Walker identified Coburg AG as a vehicle for Ray and Filler.

The combined Nexis shareholdings of Habitat-Fidelite De Technologies Confiance GmbH, Aberdeenium High Growth GmbH, Easmann Investitonen GmbH and Stuttgardt Entwinklung comprises 1.48 billion shares, or 42.93 per cent of Nexis’ total shares. All four companies:

were incorporated on 22 February 2011 in Sarnen Switzerland;
are based at the same address - Grundacher 5, 6060 Sarnen, Switzerland;
have Norbert Buchbinder as their manager. Norbert Burchbinder is the managing director of the Switzerland office of Sovereign Group. Mr Walker identified him as an associate of Filler and Ray.

The 3.8 billion Euro investment in “5 Stargreen Pty Ltd” (“Stargreen”) is the major asset on the balance sheet of Nexis as at 31 October 2010.

Stargreen is the company to which Nexis was reported to have transferred its consolidated IP during the restructure of Nexis. It does not appear to be a registered company.

Share trading of Nexis shares was extremely thin. In 2009, 0.002 per cent; in 2010, 0.010 per cent. Share trading volume is such a small percentage of total shares on issue shows that there is virtually no market on the Frankfurt Stock Exchange for a large parcel of shares.

Mr Van Homrigh was unable to identify any analysis by third parties such as brokers or analysts that he would expect to have seen for an entity purporting to be of the size of Nexis. What was “really striking” was that there was almost nothing about the company from research houses or other sources about the company, its activities and its supposed intellectual property.

Mr Van Homrigh is unable to attribute any significant value to Nexis’ shares at any point and there is no basis to determine a market capitalisation.

Mr Walker

Mr Richard James Walker is a corporate adviser who first met Filler in 2004. He took up a role as a non-executive director of Nexis in mid-2008 and was involved in its listing. The executive directors of the company were Filler and Ray, and Mr Walker did not have access to underlying financial documents. Mr Walker had a falling out with Filler in December 2010 and resigned as a director. For a few months thereafter he continued to undertake work for it. Mr Walker was cross-examined about the circumstances under which he left and whether the approximately 200 million shares that he and his associates held in the company were “paper” shares that could not be freely traded or “electronic” shares that could be. Mr Walker says that he held electronic shares, and Ray acknowledged this after Mr Walker had a dispute with Filler. It was put to Mr Walker that the shares in question were taken by him when they were supposed to be in escrow. Mr Walker denied this. Incidentally, Mr Walker said that he sold a million of the shares and received about €1000 for them.

This and other disputes between Mr Walker and his former associates do not particularly detract from the evidence which he gave on matters of fact relevant to the issues in these proceedings, and about which Mr Walker was not cross-examined.

As to the credibility and reliability of Mr Walker’s evidence on matters that are relevant to the issues in these proceedings, I consider that Mr Walker’s evidence should be accepted. In many respects, it confirms Mr Van Homrigh’s findings and it is not contradicted by documents that became exhibits, either by consent at the start of the trial or in the course of the trial.

The demeanour and tone of Mr Walker’s evidence under cross-examination was unsatisfactory in some respects. Part of it may be due to his jetlag, having returned from overseas on the morning he gave evidence and having not slept. However, he adopted a somewhat precious tone in responding to many of the questions that were asked of him. That said, he was entitled to be annoyed by repeated questions that suggested that he had certain responsibilities which he did not have as a non-executive director. It was suggested that he had duties in that role to find buyers for Nexis shares. He denied that this was his responsibility, and said that buyers of large quantities of the shares could not be found by Nexis.

Mr Walker is familiar with the listing of shares and their trading on European stock exchanges, and with the absence of any relevant trading in Nexis shares. As he explained, as much as Ray and Filler may have hoped to find large, institutional buyers of Nexis shares there were never any such buyers. Apart from corroborating Mr Van Homrigh’s evidence and providing additional evidence to establish the falsity of the pleaded representations, Mr Walker’s evidence is relevant to the issue of fraud to which I will later turn. I accept that Mr Walker became increasingly concerned about Filler’s preparedness to make representations to investors about the price to which Nexis shares would rise. Investors were given an inflated idea of future share prices and the money that was taken off them was used by Nexis to fund its expenses.

The cornerstone of Nexis’ business was that the shares issued to the shareholders would be held in escrow to prevent them from being traded. Certain other shares described as “treasury shares” which belonged to the company were sold onto the market, and it was the quoted prices of these thinly-traded shares that were represented by Nexis to be the current market value of its shares.

The following parts of his evidence, which are particularly relevant to the issue of falsity, were not relevantly contested under cross-examination or by any other evidence.

Mr Walker did not see any plants under construction during the period he was a non-executive director of Nexis. He had asked Filler and Ray for evidence to satisfy him that some of the plants were being constructed or houses being built. He explained in his evidence:

“… it was always going to happen and we were very close to the things being happened, and I think I made the sort of a constant reference that investors had signed up, and, you know, the best thing we could be doing is digging dirt and starting construction.”

However, no construction ever happened.

Nexis had two offices, including one in Hong Kong which was often referred to as an operational office. Mr Walker said:

“To me that was just one of those accounts offices where they put your name plaque on the door and there is, you know, 300 names on the door, just being, I guess, a registered office.”

The other office was Universal House in London, where, according to Walker, “They manufactured shelf companies and stored shelf companies ...”.

Mr Walker saw no evidence that Nexis was generating any income or earnings from activities associated with the manufacture of panels or the construction of houses. He saw no evidence that there was a contract for construction of 300,000 houses that were being built in China.

He confirmed that the 2009 financial accounts contained false statements. He saw no evidence of the existence of plant and equipment, and he did not see any substantive evidence of the existence of the intellectual property of the Nexis.

According to Mr Walker, “Nexis did not have the cash at that stage to make any substantial deposits; so if there was an amount, it would be very small.” He saw no evidence of the cash reserves claimed to exist in the financial statements.

Ray had asked him to attempt to obtain a false bank statement to show the existence of cash reserves. It was not put to Mr Walker that this evidence was untrue.

Mr Walker explained that the largest Nexis shareholder, Coburg, is an entity associated with Filler and Ray. Norbert Buchbinder, referred to in the report of Mr Van Homrigh, is an associate of Ray and Filler.

Mr Walker said that the statement that Suncoast had to buy 110,000 shares to participate in the share pool was false. There was no “share pool”. He explained:

“… the share pool scheme was basically just a spreadsheet concept. In order for someone to buy shares - sorry, in order for someone to sell shares there has to be a buyer”.

Certain investors were given what Mr Walker described as “inflated views of the share – potential share prices and future share prices.”

Mr Walker had reviewed Mr Van Homrigh’s report and said that in relation to the factual matters (relationships between parties and the issue of shares, and the value of shares and similar matters) that he did not see anything “glaringly inaccurate”. The factual matters found by Mr Van Homrigh generally accorded with his knowledge of the company's operations.

Mr Walker said in relation to supposed contacts in China and India:

“Basically, the projects never went anywhere.”

I accept the evidence of Mr Walker that I have summarised.

Mr Pienaar

Mr Pienaar was the relationship officer of the CBA at its Maroochydore branch. The CBA received an application from the defendants to borrow $8.6 million at a loan to value ratio (“LVR”) of 60 per cent. The bank indicated that it would be prepared to lend at a LVR of 50 per cent. Contrary to the representations made to Suncoast, the CBA did not indicate that it would only lend to 40 per cent.^[24]

Mr Pienaar knew nothing about a bridging loan. There was no bridging loan. His evidence demonstrates the falsity of the bridging loan representations.

The lending transaction was not introduced by a finance broker, and Mr Pienaar had not heard of Internationale Finanz-Makler. The CBA’s file was produced and the defendants did not suggest that any documents on the CBA’s file recorded the involvement of a finance broker in relation to the transaction, let alone the finance broker in respect of whom $245,000 was paid at settlement on the basis of the finance broker representation.

As to the bank guarantee, there is no evidence that the CBA had any difficulty with the form of bank guarantee that was proposed to come from Westpac. It was Ray who informed the CBA that the legal department of Hong Kong Shanghai Bank was involved in the process, resulting in the process taking longer than first expected. There is no evidence that this is the case and I infer that this information was untrue and part of a plan by Ray to have Suncoast pay $900,000 at settlement in lieu of a bank guarantee.

Conclusion – falsity

I am satisfied that each of the representations that have been proven by Suncoast was false and likely to mislead or deceive. Insofar as any representation related to a future matter, it was made without reasonable grounds and is deemed by s 51A of the Act to be false or misleading or likely to mislead or deceive. For reasons to be canvassed more fully in relation to the issue of fraud, the person or persons making the representations and the corporate defendants on whose behalf they were made did not have reasonable grounds for making them.

The representations about the business of Nexis and its shares, and the matters that were implied by those statements about the market value of its shares and the company’s market capitalisation, were untrue.

Neither Nexis nor Coburg incurred finance brokering costs and bank lending costs of approximately $250,000. Although there are documents with the letterhead “Internationale Finanz-Makler”, including documents that were procured at the time of settlement to facilitate payment of $245,000 on account of its supposed brokerage fees, there is no evidence that such a company in fact exists. If it does exist, there is no evidence that it brokered or had any involvement in procuring finance from the CBA. The evidence from the CBA is that no broker was involved. No basis existed for making the brokerage fee representation. I later conclude that it was a fraudulent representation made by Ray on behalf of the other defendants.

The 2 October 2010 representations about the share pool and the requirement to purchase 110,000 Nexis shares in order to enter it were also false. The only “share pool” that existed was a spreadsheet of shareholders who were interested in selling their shares. The “share pool” that those individuals constituted did not have as a condition of entry into it a requirement to purchase shares.

The representation that Nexis would permit shares to the value of $9 million to be sold by 2 March 2011 was false because the shares in question did not have a value of $9 million on 2 October 2010, and no basis existed for a representation to be made on 2 October 2010 that they would have a value of $9 million by 2 March 2011. The shares could not be readily sold. There was no market for them at the time and no reasonable basis to conclude that there would be a market that would yield $9 million, $5 million or anything like it, for the shares to be sold. In addition, if any buyers existed for shares in the share pool then shareholders who were already in the share pool would have priority over Suncoast. The share pool representations that were made on or about 2 October 2010 were false and made without any reasonable grounds for supposing that the parcels of shares could be sold for a substantial value prior to 2 March 2011 or soon thereafter.

The share pool representations were designed to have Suncoast part with a substantial amount of cash in exchange for practically worthless shares in Nexis.

As to the secondary market representations, there is no satisfactory evidence that an established market existed whereby Nexis placed shares with buyers that wished to acquire large parcels of Nexis shares. Mr Van Homrigh and Mr Walker was each shown a document which was made MFI-J, but this document did not become an exhibit. It is impossible to discern, and neither witness could reliably say, what transactions the document purports to record. It may relate to the allotment of shares. The evidence does not establish that there was an established secondary market in place, let alone a secondary market that would enable Nexis shares held by Suncoast to the value of AUD$5 million to be sold by 2 March 2010.

The defendants did not have reasonable grounds for making representations to the effect that parcels of shares held by Suncoast could be sold so as to yield a total of $9 million. They had no reasonable basis to conclude that the value of the 110,000 shares being offered had any substantial value, let alone a value approaching what was represented to be the then current market value of the shares based upon a share price of €2.11.

Each of the representations that I have found to have been made, and relied upon by Suncoast, was false.

Contravention of the Trade Practices Act

The representations were misleading or deceptive, or likely to mislead or deceive.

The representations were made in trade or commerce. They were made by or on behalf of the corporate defendants. They were made by Filler or Ray, or both of them, in their capacities as employees or directors of the companies and were made in the course of their employment or within the scope of their actual or apparent authority as directors.

The representations, individually and collectively, constituted conduct that contravened s 52 of the Act.

The evidence indicates that Filler and Ray worked closely together and both were involved in dealings with Suncoast in relation to the purchase of Yalanga and the other transactions that Suncoast was induced to enter.

For the reasons to be addressed in connection with the issue of fraud, I conclude that Ray and Filler knew that the representations being made on behalf of the companies were false. They were knowingly concerned in the contraventions.

I conclude that Suncoast has established its claims for contravention of the Act against each of the defendants.

Fraud

Suncoast seeks a finding that the representations were made fraudulently, knowing that they were false or were made recklessly, not caring whether they were true or false. Such a serious allegation requires proof to the standard discussed in Briginshaw v Briginshaw.^[25] Conclusions about the state of mind of the directors who made the representations on behalf of the corporate defendants, and the state of mind of the directors whose knowledge is taken to be that of the company, depend upon inferences. It is not sufficient that there are conflicting inferences of equal degree of probability. The circumstances appearing in the evidence must give rise to a reasonable and definite inference which is the more probable inference in favour of what is alleged.

It is necessary to consider the representations separately and to decide whether, when the representation was made, it was made knowing it to be false or recklessly not caring whether it was true or false. A resort to fraudulent representations in late 2010 does not mean that representations made many months earlier were also fraudulent. However, the circumstance that fraudulent representations were made after the contract was entered into may be relevant in determining whether it is more probable than not that an earlier representation in relation to the same transaction was fraudulent. The assessment of whether a representation was made fraudulently depends upon an assessment of what was known at the time the representation was made.

A finding that the maker of a representation did not have grounds to make it (or in the earlier context of the Act that a representation was made without reasonable grounds) must be based on the information that was known at the time it was made. I accept the defendants’ submission that “It is wrong to look back with the benefit of perfect hindsight at what eventually happened.”

In his witness summary, Filler stated that “the representations alleged to have been made in paragraph 46 of the amended statement of claim^[26] were not made and that the representations actually made:

were not false;
were not made fraudulently or recklessly and indifferently ...”

This paragraph is nicely worded and does not precisely assert that the representations alleged in paragraph 46 of the amended statement of claim (if made) were not false, and were not made fraudulently or recklessly and indifferently. Still, this passage of his witness summary was apt to preview a denial of Suncoast’s fraud case in respect of the representations that were found to have been actually made. To place that previewed denial in some better context, Filler’s witness statement indicated that he would give evidence that he did not make the representations alleged in paragraphs 10(e)(i) to (viii) on 26 April 2010, but rather that he said that:

“a)
Nexis had developed a new building material technology which, when implemented, would produce extruded panels and complete housing systems using waste as raw materials;
b)
Nexis had preliminary arrangements in China in relation to its technology that Filler hoped would lead to agreements for the construction of 300,000 houses per annum;
c)
agreements in China could lead to an increase in the price of Nexis shares to between €4 and €5; and
d)
Nexis was also in discussions with people in India”.

Filler chose not to give evidence in support of those contentions, or any other evidence previewed in his witness summary. I have found that he made the representations alleged by Suncoast.

In some instances, a person may make a representation and use words that are understood according to their ordinary meaning, but the maker of the statement did not intend it to be understood in that sense. If fraud is alleged in such a case, the question is not whether the defendant “honestly believed the representation to be true in the sense assigned to it by the Court or an objective consideration of its truth or falsity, but whether he honestly believed the representation to be true in the sense which he understood it albeit erroneously when it was made”.^[27] Although no reliance is placed upon this principle in the defendants’ submissions, it is necessary to consider its application even in the absence of evidence from Filler and evidence from Ray about the meaning which they intended their words to convey. However, in many instances, the words used do not admit of a variety of meanings.^[28] For example, in respect of the broker fee representations, the words used and the provision of an invoice purporting to be from Internationale Finanz-Makler in the sum of $245,000 for finance brokerage services clearly conveyed the representation that Coburg/Nexis had incurred finance brokerage fees to that entity in respect of the transaction in the specified amount. The relevant representation is admitted. The representation was false. There is no evidence that Internationale Finanz-Makler or any other finance broker introduced the defendants to the CBA and was entitled to a brokerage fee as a result. I have found that it did not.

No documents were tendered by consent as part of the trial bundle, or by the defendants as part of their case, to rebut the proposition that the representation about brokerage fees of $250,000 was a fabrication by Ray and was entirely fictitious. Ray’s witness summary simply did not address the admitted representation. He elected not to give evidence. As a result, he did not give evidence in support of the matters previewed in his witness statement dated 23 May 2012 or submit himself to cross-examination in relation to matters relating to Suncoast’s fraud case.

The defendants’ oral and written submissions did not provide any convincing basis to not conclude that the brokerage fee representation was made fraudulently. I find that Ray made the brokerage fee representation, knowing it to be false or with reckless indifference as to its truth or falsity. Given Filler’s close association with Ray and personal involvement in the transaction, I think it likely that Filler also knew that no finance brokerage costs had been incurred and was party to a fraudulent scheme to induce Suncoast to pay alleged finance brokering costs on settlement to Coburg in circumstances in which the alleged finance broker had not been involved in introducing Coburg to the CBA.

The bridging loan representations were clearly false. The CBA did not reduce its offer to 40 per cent of the valuation and there was never an arrangement for the CBA to provide a bridging loan of $1.4 million to make up the balance of the $7 million cash component of the purchase price. This was a fiction. In making the bridging loan representations Ray knew that there was no bridging loan and that Coburg was not required to, and did not in fact obtain, a bridging loan of $1.4 million, or indeed, any other bridging loan from the CBA. I am satisfied that the bridging loan representations were made fraudulently, knowing them to be false.

As to the bank guarantee representations, there is no evidence that the CBA was not satisfied with and would not accept the draft bank guarantee submitted by Suncoast’s solicitors to the defendants’ solicitors. The requirement for Suncoast to deposit $900,000 as security until the terms of bank guarantee could be resolved to the CBA’s satisfaction was something that Ray was apparently instrumental in arranging. The requirement for a deposit of $900,000 did not originate with the CBA. Ray’s conduct in this regard appears to have been motivated by a desire to obtain a cash deposit to which Coburg/Nexis could have access. I find that his representation that the CBA was not satisfied or would not accept the draft bank guarantee was made either knowing it to be false or with reckless indifference as to its truth or falsity. A simple inquiry of the CBA probably would have established that it was prepared to accept Westpac’s unconditional bank guarantee for $900,000.

I turn to the representations made by Filler and Ray on behalf of Nexis and Coburg that induced Suncoast to enter into the contract for sale dated 4 August 2010.

Filler made the representations which Suncoast alleges. I am satisfied that he did not qualify what he said so as to suggest that panels would only begin production when the technology was implemented. I am satisfied that no such qualification was made and that, consistent with the representation on Nexis’ website, Filler represented that Nexis was in the business of manufacturing building panels and was doing so on a large scale. This was false, as Filler must have known. He represented that production was already underway on a large scale at existing plants and that there were existing contracts. On 26 April 2010 he made reference to some further development that was due to occur in China in three weeks, but this was not said to be the first production that had taken place in China. Mr Walker’s evidence indicates that no production was in prospect and there were no contracts in China that would lead to the construction of 300,000 houses. Nexis was not setting up factories in China to perform the contracts to which Filler alluded in his conversation with Mr and Mrs van Zetten.

According to its own auditors, Nexis had not commenced commercial operations.

No substantial, let alone persuasive submissions were made on behalf of the defendants as to why I should find that Filler had an honest belief in the representations that Suncoast has proven were made by him. I have regard to the possibility that Filler’s exuberance or enthusiasm for the product led him to choose his words badly and misrepresent innocently the nature and extent of Nexis’ business. I do not regard this as a realistic conclusion to reach. The oral representations made on 26 April 2010 reflect similar representations made by Nexis on its website which Filler encouraged Mr and Mrs van Zetten to review. Filler made the representations which he did in order to induce Suncoast to transact on the basis that it would receive Nexis shares as part payment. I find that in doing so Filler made representations about the company and its business which he knew to be false, including that Nexis was already engaged in the business of manufacturing panels and was in the process of producing the same in China and other parts of the world.

Filler’s representations about the company being publicly floated, the issuing of shares in it and the value of shares were intended to represent, and in fact represented, that Nexis was a public company with substantial net assets, with shares that were and could be freely traded and that there was a market for shares in Nexis. These representations were false, and Filler knew them to be false. He was certainly reckless as to their truth or falsity. The real state of affairs is addressed in the evidence of Mr Van Homrigh and Mr Walker that I have previously canvassed.

Filler had no reasonable basis to claim that because of its contracts in China, or for any other reason, shares in Nexis would increase and be worth between €4 and €5 by the end of 2011 and €10 in five years time. There is simply no evidence identified by the defendants, or indeed any submissions, that justify such a representation being made. In fact, the cross-examination of Mr Van Homrigh confirmed that there could be no reasonable grounds for making such predictions.

I take account of the possibility, even in the absence of evidence from Filler, that he was the perennial optimist. However, on the facts known to him Nexis had issued 1.5 billion shares and, particularly when shares such as those proposed to be allotted to Suncoast came out of escrow, they would flood the market. No large buyers of shares were in prospect that could justify what he said and implied about trading in Nexis shares, their value or his prediction about the increase in their value. The price at which Nexis shares were being quoted was the result of a small number of trades, including bids posted by Mr Walker on behalf of Nexis. I accept Mr Walker’s evidence that Filler’s personality killed off most potential buyers. The company’s accounts did not support the representations made by Filler about the company’s shares or their likely future value.

I conclude that the April 2010 representations were made by him either knowing them to be false or with reckless indifference as to their truth or falsity.

As to the July 2010 representations that were conveyed by Ray’s email of 5 July 2010, I take account of the possibility that Ray intended his email to refer to the price at which certain shares were being traded, not the value of the shares that he and Filler proposed to allot as the balance of the purchase price for Yalanga. However, I find that Ray intended his email to convey the representations which were in fact conveyed and which an ordinary person in Mr van Zetten’s position would have understood them to convey. This is that Nexis shares had a market value of €1.275 at the time and were being traded in the kind of volumes that might be expected for a substantial, publicly-listed company. The email cleverly injected some degree of urgency into the matter on the basis that the defendants could only hold the share price at the quoted level if heads of agreement were entered into by the end of the week. This served to reinforce the impression about trading activity and an increase in the market value of the shares to be acquired.

Neither Ray nor Filler made any distinction between, on the one hand, the types of shares that had been issued to investors and which they were proposing Suncoast should take up and, on the other hand, the shares that were being traded at the prices quoted by the defendants in their emails and other documents. The distinction was all-important and Ray and Filler were careful to conceal it. The use of expressions such as “being 33% discount to the current market” were deliberately used to suggest that there was a substantial market for the shares and they were being traded. As Mr Van Homrigh explained, the actual trading that occurred was at such thin volumes that it could not be taken to represent the market value of shares in Nexis. Ray and Filler must have known this. Similar phrases in later communications, such as the letter of 2 October 2010 which referred to “market value of A$5M” and “current market price” were also calculated to deceive.

As to the July 2010 representations, I am satisfied that these representations were made by Ray intending that they be understood as describing the then market value of shares, knowing that his email would be understood as referring to trades in a substantial public company in which the current share price reflected the market value of shares. Ray knew this to not be the case. He had access to financial records. Although the damning auditor’s report came later, both Ray and Filler must have known that Nexis shares did not have a market value of €1.275 at 5 July 2010, or anything like it. The later representation on 2 October 2010 that its share price was €2.11 was equally misleading.

These and similar representations were part of a concerted plan between Ray and Filler to induce Suncoast to enter into an agreement with Coburg. Ray and Filler each knew that representations of this kind were likely to mislead or deceive because they were false in fact and deliberately concealed information which, if disclosed, would have alerted Suncoast to the real value of shares in Nexis. The July 2010 representations were part of a fraudulent scheme by which the defendants intended to induce, and in fact induced, Suncoast to transfer Yalanga to Coburg for a consideration which comprised, in part, shares in Nexis which had no real value. The July 2010 representations were made fraudulently by Ray as part of this scheme.

My conclusion in relation to Ray’s fraudulent intent is supported by my conclusions in relation to other fraudulent representations that he made or in which he was knowingly concerned.

The representations that followed entry into the contract were also made fraudulently, save perhaps for the secondary market representations. I have earlier found that there is no evidence that there was an established market, let alone one that would yield AUD$9 million or AUD$5 million, as previewed in the 2 October 2010 representations. I am strongly inclined to conclude that the secondary market representations were also fraudulent because Ray must have known that Nexis had not established such a secondary market. However, I decline to reach a conclusion about whether this representation was fraudulent. Taken in isolation, Ray’s email of 27 October 2010 may have been intended to mean that Nexis had established a “market” in which it placed shares with “buyers” that wished to acquire larger parcels of stock, but not intended to convey that the market was active or that there were actual buyers. I think this unlikely, but it is a possibility. If taken in conjunction with the 2 October 2010 representations, the 27 October 2010 email was probably fraudulent, for the reasons I have given about the absence of an actual market that could trade the volume of shares that were proposed to be sold at prices that would yield Suncoast a total of AUD$9 million.

It is unnecessary in the circumstances to reach a conclusion about whether the 27 October 2010 email was fraudulent, when taken in isolation, or when read in the context of the 2 October 2010 representations. The representations by Ray that preceded and followed the email of 27 October 2010 were fraudulent, as were those made by Filler. Had the 27 October 2010 email not been sent, then Suncoast would still have completed the transactions in reliance upon the other representations.

I conclude that the brokerage fee representation, the 2 October 2010 representations, the bridging loan representations and the bank guarantee representations were made fraudulently and as part of the fraudulent scheme that I have earlier described.

I should add that even if these post-contract representations had not been fraudulent, the fraudulent representations which had earlier been made, and which induced Suncoast to enter into the contract continued to have their effect, and induced Suncoast to enter into additional contracts and to pay substantial sums upon settlement. Nothing said by the defendants after the contract pointed out the falsity of the representations that had been made in April and July 2010. Instead, the later representations tended to reinforce the representations that had earlier been made about Nexis and the value of its shares.

Conclusion on liability

Suncoast has established that Coburg and Nexis engaged in conduct that was misleading or deceptive, or was likely to mislead or deceive, in contravention of s 52 of the Act. The conduct consisted of the April 2010 representations, the July 2010 representations, the brokerage fee representations, the 2 October 2010 representations, the bridging loan representations, the secondary market representations and the bank guarantee representations. Each of the representations was false in fact. Insofar as the representations included representations as to future matters, Suncoast relies upon s 51A of the Act and has established that the representations were made without reasonable grounds.

Filler made some of the representations and did so knowing of their falsity or recklessly. Ray made other representations, either knowing them to be false or recklessly. Ray was knowingly concerned in the contraventions constituted by the representations made by him. Filler was knowingly concerned in the contraventions constituted by the representations made by him.

The representations induced Suncoast to enter into the contract for sale of Yalanga and later agreements. Suncoast was also induced to pay a supposed “brokerage fee” of $245,000 as a result of the brokerage fee representation. It paid $265,257 for 110,000 Nexis shares as a result of representations commencing with the April 2010 representations which misled it in relation to the value of Nexis shares, and also as a result of the 2 October 2010 representations concerning the acquisition of an additional 110,000 Nexis shares. The representations, both individually and collectively, induced Suncoast to settle the contract for sale on 16 December 2010, pay $245,000 on account of the supposed “brokerage fee” and pay $900,000 to the CBA. The sum of $900,000 would not have been paid had the bank guarantee representations not been made. However, Suncoast’s settlement of the contract and payment of various amounts on settlement was the result of each of the representations that had been found. The separate representations that I have found, being misrepresentations in which Ray or Filler, or both of them, were knowingly concerned, were a cause of the loss and damage that Suncoast suffered by settling the contract for sale and paying the amounts that it did upon settlement.

In summary, Suncoast has established a course of conduct consisting of separate representations that were each in contravention of the Act. The conduct collectively amounted to conduct that was in contravention of the Act.

For the reasons that I have given, the representations were also fraudulent, save for the secondary market representations which I have declined to find were fraudulent. The fraudulent representations, commencing with Filler’s representations on 26 April 2010, were part of a concerted plan by Ray and Filler to induce Suncoast to enter into an agreement with Coburg which involved part of the consideration for the sale of the property consisting of shares in Nexis. Ray and Filler each intended that Suncoast would act in reliance on the representations that each of them made. Their intentions were realised because Suncoast did rely on those representations. The representations amounted to a fraudulent scheme by which Coburg was to acquire the property for consideration which included shares in Nexis, which Ray and Filler knew had no real value and which had a market value that was far less than the value which they represented to Suncoast. The collective deceit of the defendants entitles Suncoast to remedies under the general law, in addition to remedies under the Act.

Remedies

If the fraudulent representations had not been made and if the defendants had not acted in contravention of the Act, then Suncoast would not have entered into the contract and would not have entered into the further agreements. It would not have settled the contract and paid money away.

The fraud that was perpetrated by the defendants makes the transactions voidable. The entitlement of an innocent party to rescind is subject to the proviso that equity will not grant relief unless it can achieve justice by all relevant parties, including an innocent third party which, without notice of the fraud and for good consideration, obtains title. The CBA has a mortgage over the property. However, rescission and orders effecting a reconveyance of the property to Suncoast would not affect its registered mortgage over the property. The CBA also has its contractual rights against Coburg. Restitutio in integrem will be achieved by ordering a transfer of the property to Suncoast and the re-transfer of the shares that Suncoast acquired upon the sale of the property to Coburg.

In addition to relief under the general law, Suncoast has established its entitlement to relief under s 87 of the Act. No matter has been raised in the pleadings or in the defendants’ submissions as to why, in granting remedies, I should not exercise the power conferred by s 87 to declare the contract of sale and the later agreements made in December 2010 void ab initio.

In addition, Suncoast should be compensated so as to place it in the position it would have been in had the contract and other agreements not been made and carried into effect. Compensation should be assessed on a “no transaction” basis.

The defendants admit that:

Suncoast paid at or prior to settlement a total of $1,514,803.90, being:

the sum of $67,303.90 to the Department of Environment & Resource Management in respect of the land transfer fee;
the sum of $245,000.00 to Coburg to be paid to “Internationale Finanz-Makler” in respect of alleged brokerage fees;
the sum of $27,500.00 to its solicitors, Sykes Pearson Miller, in respect of legal costs and outlays;
the sum of $110,000.00 (plus GST) to Rob Keam Real Estate Pty Ltd in respect of commission;
the sum of $165,000.00 (plus GST) to Babfold Pty Ltd in respect of commission;
the sum of $900,000.00 to the CBA as a deposit pending the provision of a bank guarantee;

on 13 December 2010, Suncoast paid the sum of $1,298,175 to the Commissioner of State Revenue in respect of stamp duty on the contract and transfer;
on 6 October 2010, Suncoast paid the sum of $265,257 to Nexis for 110,000 Nexis shares;
Suncoast has paid the following bridging loan repayments to Coburg and Nexis:

Date	Details	Amount
12.01.11	Paid to Coburg	$75,000
12.01.11	Paid to Nexis	$125,000
11.02.11	Paid to Coburg	$200,000
08.03.11	Paid to Coburg	$100,000
09.03.11	Being part payment of the sum of $200,000.00, less $65,000.00 being agreed compensation for interest incurred by the Suncoast as a result of the second defendant’s failure to sell the shares in accordance with clause 3 of the deed of agreement.	$35,000
	Total	$535,000

Suncoast paid the following Lease payments to Nexis:

(i)	16.12.10	$31,048.38
(ii)	23.12.10	$64,166.67
(iii)	01.02.11	$64,166.67
(iv)	01.03.11	$64,166.67
(v)	01.04.11	$64,166.67
	Total	$287,715.06

It is also admitted that the amount owing to the CBA as at 23 May 2012, secured by a mortgage over the property, is $7,995,316.45 and that interest on that sum is accruing at $3,316.77 per day. Since that date, interest has accumulated for 20 days at $3,316.77 per day, being $66,335.40. Accordingly, the amount owing to the CBA as at 12 June 2012 was $8,061,651.85.

It is also admitted that the sum of $5,454,018.82 was received by Suncoast at settlement and applied to discharge a mortgage over Yalanga held by Westpac as mortgagee.

As at 12 June 2012, the difference between the amount which discharged the Westpac mortgage and the present mortgage liability to the CBA was therefore $2,607,633.03.

Adding $2,607,633.03 to the amounts listed above ($3,900,950.96) aggregates $6,508,583.99.

It appears that the CBA applied the $900,000 deposit held by it to reduce its mortgage debt in November 2011 and that this amount is taken into account in current debt to the CBA of $8,061,651. Therefore the $900,000 should be deducted from the $6,508,583.99, giving a damages amount of $5,608,583.99.

Interest should be calculated on the amounts outlaid by Suncoast ($3,900,950.96) at 10 per cent per annum pursuant to s 47 of the Supreme Court Act 1995. This totals $579,061.00 calculated as follows:

Interest on stamp duty paid by Suncoast in the amount of $195,613.00, calculated as follows:

Interest on $1,298,175.00 at 10 per cent from 13 December 2010, being 550 days at $355.66 per day.

Interest on $265,257.00 paid by Suncoast for the 110,000 Nexis shares in the amount of $44,910.06, calculated as follows:

Interest on $265,257.00 at 10% from 6 October 2010, being 618 days at $72.67 per day.

Interest on the bridging loan payments:

Date	Details	Amount	Interest calculation	Interest
12.01.11	Paid to Coburg	$75,000	520 days x $20.55 per day	$10,686.00
12.01.11	Paid to Nexis	$125,000	520 days x $34.25 per day	$17,810.00
11.02.11	Paid to Coburg	$200,000	490 days x $54.80 per day	$26,852.00
08.03.11	Paid to Coburg	$100,000	465 days x $27.40 per day	$12,741.00
09.03.11	Being part payment	$35,000	464 days x $9.59 per day	$4,449.76
	Total	$535,000		$72,538.76

Interest on the lease payments:

Date	Amount	Interest calculation	Interest
16.12.10	$31,048.38	547 days x $8.51 per day	$4,654.97
23.12.10	$64,166.67	540 days x $17.58 per day	$9,493.20
01.02.11	$64,166.67	500 days x $17.58 per day	$8,790.00
01.03.11	$64,166.67	472 days x $17.58 per day	$8,297.76
01.04.11	$64,166.67	441 days x $17.58 per day	$7,752.78
Total	$287,715.06		$38,988.71

Interest on $1,514,803.96 from settlement to date (547 days) $227,010.47.

Suncoast seeks damages totalling $5,608,583.99 and interest totalling $579,061.00 aggregating $6,187,644.99.

These amounts are calculated as follows:

Amounts outlaid:

Amounts outlaid		Interest thereon
(a) Paid at settlement	$1,514,803.90	$227,010.47
(b) Stamp duty	$1,298,175.00	$195,613.00
(c) 110,000 Nexis Shares	$265,257.00	$44,910.06
(d) Bridging loan repayments	$535,000.00	$72,538.76
(e) Lease payments	$287,715.06	$38,988.71
Total	$3,900,950.96	$579,061.00

Mortgage liability:

CBA Liability	$8,061.651.85
Less Westpac payout	$5,454,018.82
Sub-total	$2,607,633.03
Less Deposit with CBA	$900,000.00
Total	$1,707,633.03

Total damages:

Damages	$5,608,583.99
Add Interest	$579,061.00
Total	$6,187,644.99

Suncoast’s damages should be reduced by the amount of interest which it would otherwise have paid to Westpac on the amount of $5,454,018.82 which was paid to the Westpac mortgage on settlement. At 8.5 per cent per annum for 547 days that interest amount would be $694,690.00. Suncoast submits that, against this, it lost the opportunity of selling the property to another purchaser, which may have realized sufficient funds to completely pay out Suncoast’s liability to Westpac, which (including the $5,454,018.82) aggregated approximately $11 million. Moreover, the current CBA interest rate is a default rate of approximately 15.5 per cent, which continues to accrue. However, I consider that compensation should take account of the amount that would have been paid to Westpac. Taking this and also the matters relied upon by Suncoast into account, I will reduce the foregoing amount by $694,690.00.

There will be judgment for the plaintiff against the first, second, third and fourth defendants in the sum of $5,492,954.99, inclusive of interest pursuant to s 47 Supreme Court Act 1995.

I noted in the course of argument that with the contracts being rescinded and being declared void ab initio, the sum of $1,298,175 paid on settlement to the Commissioner of State Revenue in respect of stamp duty may be refunded. If it is, but Suncoast is unable to recover the damages assessed by me from the defendants, then the refund will partly compensate it for its loss. If, however, in the unlikely event that the defendants pay the damages which I have assessed, and Suncoast is also refunded the stamp duty which it paid then it will be over-compensated. To address this possible, though unlikely scenario, it is appropriate to condition my judgment for damages to be assessed upon an undertaking from Suncoast to pay any sum refunded to it in respect of stamp duty to the defendants in the event that the judgment sum is paid to Suncoast. I will hear the parties as to the form of judgment. However, I propose to give judgment for the plaintiff substantially in the form of the draft judgment submitted by counsel for Suncoast at the conclusion of the hearing.

Suncoast sought an order that the defendants pay its costs of and incidental to the proceedings, including reserved costs, on an indemnity basis. Given my findings of fraud, I consider that this is an appropriate exercise of my discretion.

In addition to orders for payment of compensation and costs, there will be declarations in the form sought for the rescission of the contract and other agreements, and orders pursuant to s 87 of the Act declaring them to be void ab initio. There will be consequential orders for Coburg to deliver to Suncoast a registrable transfer of the property and any other necessary documents to enable the property to be reconveyed to Suncoast. In exchange, Suncoast should deliver documents that are required to reconvey the Nexis shares that it acquired upon settlement of the sale of the property. In the event that Coburg fails to sign and deliver the necessary documents to effect a transfer then there will be consequential orders for the Registrar to sign such transfer or other necessary documents on behalf of Coburg.

There will also be an order for the guarantee provided by Suncoast as security for costs to be returned to it.

The lease having been entered into in the circumstances that I have described, and having been declared void ab initio, the first defendant has no proper basis to claim monies alleged to be due and owing under it, or to claim damages for breach of it, the facility deed or the deed of agreement. These agreements were the result of fraud and contravention of the Act.

The defendants submit:

“The payment by the Plaintiff of the unconditional rental stream was fundamental to the arrangement continuing. The later intentional refusal of the Plaintiff to continuing paying that income is the root cause of this commercial arrangement failing. All the other matters of complaint, could have (should have) been settled as part of a commercial settlement without resort to litigation (eg. the provisions of the Side Agreement which provided that in the event of a failure on the part of Nexis to sell the shares by 10^th March 2011 for a certain amount then the parties would enter into negotiations in ‘good faith’ to find a suitable commercial resolution in that event).”

The payment of rent under the lease may have been important to Coburg/Nexis in order to service obligations to the CBA. However, the lease was obtained as a result of conduct by the guiding minds of Coburg and Nexis which justifies the lease being rescinded and declared void ab initio. Suncoast should not have been expected to pay rent under a lease that had been procured in the circumstances that I have found, and thereby increased its loss and damage. To continue to do so might be interpreted as affirming the lease and other transactions that it is entitled to have set aside.

By March 2011 it was apparent that the defendants had not sold the shares, and there was no prospect that they could do so and raise the funds that Suncoast expected to receive. Mr van Zetten had pursued the matter with the defendants. There is no basis to conclude that his pursuit of “good faith” negotiations after April 2011 would have achieved a suitable commercial resolution. The obligation to pursue such negotiations was imposed by the deed of agreement that was induced by fraud and a contravention of the Act. Because it and the other contracts should be set aside and treated as void ab initio the claims for damages for breach of them should be dismissed.

The first defendant’s counterclaims which are based upon these agreements will be dismissed, with costs to be assessed on the indemnity basis.

Footnotes

[1] Watson v Foxman (1995) 49 NSWLR 315 at 319.

[2] Henville v Walker (2001) 206 CLR 459 at 469 [14], 497 [119] and 509 [163].

[3] I &L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at 128 [57] per Gaudron, Gummow and Hayne JJ; MAM Mortgages Ltd v Cameron Bros [2002] QCA 330 at [10] per McPherson JA.

[4] I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (supra) at 130 [62].

[5] (1985) 157 CLR 215.

[6] Ibid at 250-251 per Brennan J.

[7] Ibid at 236.

[8] (1982) 149 CLR 191 at 199.

[9] (1987) 78 ALR 193 at 241.

[10] Parkdale Custombuilt Furniture Pty Ltd v Puxu Pty Ltd (supra) at 214-215 per Murphy J.

[11] Ibid at 215.

[12] Sutton v AJ Thompson Pty Ltd (in liq) (1987) 73 ALR 233 at 239-41 per Foster, Woodward and Wilcox JJ (Full Fed Crt). See also Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 at 558-9 Lockhart J (Full Fed Crt); Neilson v Hempston Holdings Pty Ltd (1986) 65 ALR 302 at 309 per Pincus J; Trade Practices Com v Optus Communications Pty Ltd (1996) ATPR 41-478 at 41,891-2 per Tamberlin J.

[13] Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14 at 17.

[14] Section 82(1B) of the 2004 amendments refers to damages being reduced, but the possibility exists of them being reduced to nil in an appropriate case.

[15] Who the framers of the Act may have assumed would typically be individual consumers, rather than sophisticated corporations with the resources to verify the accuracy of representations made to them.

[16] (1990) 26 FCR 112 at 138.

[17] (1988) ATPR (Dig) 46-039.

[18] Supra at para [104].

[19] Ibid at para [102].

[20] Ibid at para [104].

[21] 3^rd ed, 1974 at pp 218-219.

[22] Supra at 250-251, emphasis added.

[23] The evidence was that there are four markets (prime, general, entry and open) on that stock exchange and that the listing requirements for listing on the open exchange were far less onerous than on an Australian exchange. It was a low entry board and listing was based on an information memorandum.

[24] There is a typographical error in the transcript at 3-70 line 26 which should be read 40%.

[25] (1938) 60 CLR 336 at 362.

[26] These are the April 2010 representations, the July 2010 representations, the brokerage fee representations, the 2 October 2010 representations, the bridging loan representations, the secondary market representations and the bank guarantee representations.

[27] Akerhielm v De Mare [1959] AC 789 at 805-806; John McGrath Motors (Canberra) Pty Ltd v Applebee (1964) 110 CLR 656 at 659-660.

[28] cf John McGrath Motors (Canberra) Pty Ltd v Applebee (supra) where the words “new car” were used so as to mean “not second-hand”.

Editorial Notes

Published Case Name:
Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd & Ors
Shortened Case Name:
Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd
MNC:
[2012] QSC 157
Court:
QSC
Judge(s):
Applegarth J
Date:
15 Jun 2012

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited List of Cases Cited by this judgment

Case Name	Full Citation	Frequency
Akerhielm v de Mare	View on:ICLRUK[1959] AC 789	1 citation Jump To Cite 1 - [1959] AC 789
Akerhielm v De Mare	View on:ICLRUK[1959] AC 798	1 citation Jump To Cite 1 - [1959] AC 798
Argy v Blunts & Lane Cove Real Estate Pty Ltd	(1990) 26 FCR 112	2 citations Jump To Cite 1 - (1990) 26 FCR 112 Cite 2 - (1990) 26 FCR 112
Briginshaw v Briginshaw	View on:JADE(1938) 60 C.L.R 336	1 citation Jump To Cite 1 - (1938) 60 C.L.R 336
Elders Trustee & Executor Co Ltd v E G Reeves Pty Ltd	(1987) 78 ALR 193	2 citations Jump To Cite 1 - (1987) 78 ALR 193 Cite 2 - (1987) 78 ALR 193
Gould v Vaggelas	View on:JADE(1985) 157 CLR 215	1 citation Jump To Cite 1 - (1985) 157 CLR 215
Gould v Vaggelas	View on:JADE(1995) 157 CLR 215	1 citation Jump To Cite 1 - (1995) 157 CLR 215
Hawker de Havilland v Fernandes	(1996) ATPR 41	1 citation Jump To Cite 1 - (1996) ATPR 41
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd	(1988) 39 FCR 546	1 citation Jump To Cite 1 - (1988) 39 FCR 546
Henville v Walker	View on:JADE(2001) 206 CLR 459	2 citations Jump To Cite 1 - (2001) 206 CLR 459 Cite 2 - (2001) 206 CLR 459
I & L Securities Pty Ltd v HT W Valuers (Brisbane) Pty Ltd	View on:JADE(2002) 210 CLR 109	2 citations Jump To Cite 1 - (2002) 210 CLR 109 Cite 2 - (2002) 210 CLR 109
John McGrath Motors (Canberra) Pty Ltd v Applebee	View on:JADE(1964) 110 CLR 656	1 citation Jump To Cite 1 - (1964) 110 CLR 656
MAM Mortgages Ltd (in liq) v Cameron Bros	[2002] QCA 330	2 citations Jump To Cite 1 - [2002] QCA 330 Cite 2 - [2002] QCA 330
Neilsen v Hempston Holdings Pty Ltd	(1986) 65 ALR 302	1 citation Jump To Cite 1 - (1986) 65 ALR 302
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd	View on:JADE(1982) 149 CLR 191	2 citations Jump To Cite 1 - (1982) 149 CLR 191 Cite 2 - (1982) 149 CLR 191
Pavich v Bobra Nominees Pty Ltd	(1988) ATPR (Dig) 46	2 citations Jump To Cite 1 - (1988) ATPR (Dig) 46 Cite 2 - (1988) ATPR (Dig) 46
Siddons Pty Ltd v The Stanley Works Pty Ltd	(1991) 27 FCR 14	1 citation Jump To Cite 1 - (1991) 27 FCR 14
Siddons Pty Ltd v The Stanley Works Pty Ltd	(1991) 29 FCR 14	1 citation Jump To Cite 1 - (1991) 29 FCR 14
Sutton v A J Thompson Pty Ltd (in liq)	(1987) 73 ALR 233	2 citations Jump To Cite 1 - (1987) 73 ALR 233 Cite 2 - (1987) 73 ALR 233
Watson v Foxman	View on:NSWLR(1995) 49 NSWLR 315	1 citation Jump To Cite 1 - (1995) 49 NSWLR 315

Cases Citing List of cases on Queensland Judgments citing this Judgment

Case Name	Full Citation	Frequency
Ducksbury v Cairns Plywoods Pty Ltd	[2024] QSC 296	2 citations
Gympie Regional Council v Pye	[2016] QPEC 65	2 citations

Exit Distraction Free Reading Mode

Change Font and Font Size

Suncoast Pastoral Company Pty Ltd v Coburg AG (No 2) Pty Ltd[2012] QSC 157