Anderson v Canaccord Genuity Financial Ltd
[2022] NSWSC 58
•07 February 2022
Supreme Court
New South Wales
- Summary available
Medium Neutral Citation: Anderson v Canaccord Genuity Financial Ltd [2022] NSWSC 58 Hearing dates: 11, 15 – 19, 22 – 23, 25 – 26 February 2021, 1 – 5, 8 – 12, 15 – 17, 22 – 26 March 2021 Date of orders: 7 February 2022 Decision date: 07 February 2022 Jurisdiction: Equity Before: Ward CJ in Eq Decision: 1. Order that each of the second and third defendants pay to the plaintiff nominal damages (of $100 each) for breach of the obligations of good faith and honesty arising as an incident of the common law employment relationship between the said defendants and the respective Ashington group entities (Ashington Capital Pty Ltd and Ashington Management Pty Ltd).
2. Otherwise dismiss the plaintiff’s claims in the third further amended statement of claim (with costs in the case of the claims against the first, third, fourth, fifth and sixth defendants).
3. Direct the parties to file written submissions on costs within 21 days with a view to costs being determined on the papers (but indicating whether an oral hearing is considered necessary for the costs submissions (and if so why)).
Catchwords: EQUITY – Assignment – Assignability of causes of action by liquidator – Whether respective causes of action reposed in new trustee or in companies in their own right – Whether bare right to litigate or personal chose in action assignable by liquidator
EMPLOYMENT AND INDUSTRIAL LAW – Whether binding contract of employment in absence of signed contract of employment – Obligations of good faith and honesty as incident of common law employment relationship
EQUITY – Fiduciary duties – Whether employees owed fiduciary duties – Where no powers or discretions delegated to or exercisable by employees – Whether finance company mandated to raise capital owed fiduciary duties – Whether knowing assistance in breach of fiduciary duty on part of various defenants
CORPORATIONS – Directors and officers – Attribution of knowledge to corporate entities – No attribution of knowledge where officer on frolic of his own
EQUITY – Equitable wrongs – Applicability of vicarious liability to equitable wrongs
EQUITY – Equitable remedies – Equitable compensation – Causation – Loss of opportunity – Where companies not a going concern at time – Value of lost opportunity to secure capital raising and overcome financial difficulties – Proportionate liability
DAMAGES – Nominal damages for breach of duties of good faith and honesty implicit in employment relationship
Legislation Cited: Civil Liability Act 2002 (NSW)
Conveyancing Act 1919 (NSW), s 12
Corporations Act 2001 (Cth), ss 9, 128, 129, 477(2)(c), 912A, 912B
Evidence Act 1995 (NSW), ss79, 135, 137, 140(2)
Partnership Act 1890 (UK), s 10
Partnership Act 1892 (NSW), s 10
Uniform Civil Procedure Rules 2005 (NSW), rr 6.12, 14.14(2), 31.17, 31.20, Sch 7
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Agip (Africa) Ltd v Jackson [1990] Ch 265; [1992] 4 AII ER 385
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Category: Principal judgment Parties: Daniela Alejandra Anderson (Plaintiff)
Canaccord Genuity Financial Ltd (First Defendant)
Nicola Lesleigh Garrett (Second Defendant)
Samuel Mark Renauf (Third Defendant)
PPB Pty Ltd (Fourth Defendant)
Acorn Capital Ltd (Fifth Defendant)
Albany Capital Investors Pty Ltd (Sixth Defendant)
Ashington Capital Pty Ltd (in liquidation) (Seventh Defendant)
Ashington Management Pty Ltd (in liquidation) (Eighth Defendant)Representation: Counsel:
Solicitors:
PS Braham SC with N Kabilafkas and A Bhasin (Plaintiff)
JA Redwood SC with E Bathurst (First Defendant)
M Painter SC with TC Bagley (Second and Third Defendants)
G Ng with R Sud (Fourth Defendant)
AS McGrath SC with JD Williams (Fifth Defendant)
JE Sexton SC with AA Cameron (Sixth Defendant)
A Edwards (Seventh and Eighth Defendants)
McLachlan Thorpe Partners (Plaintiff)
Clayton Utz (First Defendant)
Piper Alderman (Second and Third Defendants)
Corrs Chambers Westgarth (Fourth Defendant)
Moray & Agnew (Fifth Defendant)
Kennedys Law (Sixth Defendant)
Brown Wright Stein (Seventh and Eighth Defendants)
File Number(s): 2015/00285816 Publication restriction: Nil
INDEX
JUDGMENT – WARD JA
[1]
Parties
[11]
Plaintiff’s complaint
[18]
Chronology of Events
[32]
Formation of Ashington group – 1994-2005
[33]
Establishment of ADF – May 2006
[40]
Establishment of Cross+ Trust – 19 May 2006
[53]
Establishment of Potts Point Trust – 19 May 2006
[55]
St George Facility for Potts Point Trust – 30 May 2006
[57]
St George Facility for Cross+ Trust – 10 November 2006
[58]
Investec Facility re Wylde Street Property – March 2007
[59]
Information Memorandum for ADF2 – 2007
[60]
Establishment of ADF2 – 20 September 2007
[62]
Establishment of Project X Hotel Trust – 20 September 2007
[64]
Establishment of Noosa Trust – 12 March 2008
[65]
Establishment of Stonington Trust – 23 May 2008
[68]
Fees
[73]
Global Financial Crisis – 15 September 2008
[75]
Proposed third fund (ADF3)
[76]
Compliance breaches – 30 September 2008
[78]
Project X Hotel Trust finance – 30 September 2008
[79]
10 Wylde Street Trust finance – 2 October 2008
[88]
8th drawdown for ADF2 – 3 November 2008
[89]
Request for increase in fund equity in ADF2 – 10 November 2008
[90]
Superannuation fund investors’ response to $20 million capital call – November to December 2008
[92]
Westpac Stonington Facility – 18 November 2008
[95]
Hamton Vendor Finance – 12 December 2008
[96]
Ashington Capital Board meeting – 16 December 2008
[98]
Investec indicative term sheet – 23 December 2008
[99]
Applications for units in ADF2 pursuant to First Additional Equity Request – 23 December 2008
[102]
Email from Mr Steel to Mr Anderson – 27 December 2008
[105]
Ms Garrett approached re possibility of working with Ashington – late December 2008
[107]
HESTA Side Letter – January 2009
[111]
HESTA’s application for additional units in ADF2 – 4 February 2009
[127]
11th drawdown of ADF 2 – 18 February 2009
[128]
Stonington Property purchase – 25 February 2009
[129]
Investec Stonington Facility – 25 February 2009
[130]
Preparation of Stonington site for construction – February to June 2009
[139]
Ms Garrett and Mr Renauf’s employment with Ashington – 25 February 2009
[140]
Ashington Capital board meeting – 26 February 2009
[143]
Cashflow – March 2009
[144]
12th drawdown of ADF2 – 24 March 2009
[148]
Ms Garrett’s involvement with Ashington – April 2009
[149]
Ashington Capital and Ashington Group board meetings – 4 May 2009
[158]
Trip to Hong Kong – May 2009
[159]
Legal Advice re Investec Stonington Facility – 31 May 2009
[164]
The position of Ashington – mid-2009
[168]
Request for a further $15 million in equity – 1 June 2009
[170]
Communications between superannuation fund investors – early June 2009
[177]
Winding up application – 7 June 2009
[187]
Ms Garrett comments on business plan – 8 June 2009
[188]
Mr Anderson’s response – 10 June 2009
[189]
Meeting between investors/Mr Anderson – 12 June 2009
[197]
Steps taken after 12 June 2009 meeting with superannuation fund investors – mid June 2019
[205]
Ms Garrett’s planning for funds management decision – 18 June 2009
[209]
13th drawdown of ADF 2 – 19 June 2009
[210]
Information about Stonington – 19 June 2009
[211]
Further communications between asset consultants – 19 to 23 June 2009
[214]
Response to ADF2 investor information request – 25 June 2009
[218]
Meeting of asset consultants to discuss additional equity request
[221]
Asian road show – 26 June 2009
[222]
Response to Mr Anderson’s 25 June 2009 email – 26 June 2009
[223]
Cancellation of 13th capital drawdown – 26 June 2009
[226]
28 June 2009
[227]
Conference call between Ashington and superannuation fund investors – 29 June 2009
[228]
Military Super portfolio snapshot – 30 June 2009
[232]
Amended 13th capital call – 30 June 2009
[233]
Response to Mr Stagg’s email of 30 June 2009 – 1 to 4 July
[240]
Further cashflow difficulties – 1 July 2009
[246]
Concern re potential breach of obligations to investors – July 2009
[247]
Ms Garrett and Mr Renauf carpark – 3 July 2009
[251]
Financial issues re Hamton Vendor Finance – 3 July 2009
[252]
Superannuation fund investors meeting – 7 July 2009
[253]
Proposed meeting with asset consultants – 7 July 2009
[259]
Ms Garrett and Mr Renauf – 8 July 2009
[261]
LUCRF concerns – 8 July 2009
[263]
Board meeting of Ashington Capital – 9 July 2009
[264]
Military Super’s position – 10 July 2009
[268]
Ashington’s recognition of breach of covenants – 10 July 2009
[269]
Compliance and Communication Paper – 10 July 2009
[271]
Internal Ashington communications re investors – July 2009
[280]
PPB Mandate – July 2009
[286]
Signing of PPB Mandate – 16 July 2009
[291]
Meeting with asset consultant representatives – 16 July 2009
[296]
Initial meeting PPB/Ashington – 17 July 2009
[300]
PPB Confidentiality Agreement – 20 July 2009
[302]
Amended 13th drawdown notice – 21 July 2009
[305]
Advice sought from Mallesons – 21 July 2009
[306]
LUCRF report to HESTA’s board re appointment of PPB – 22 July 2009
[307]
Communications within Ashington re liquidity issues – 22 July 2009
[308]
Valuation Report for Stonington – 22 July 2009
[309]
Investec Security documents sent to PPB – 23 July 2009
[310]
Meeting of superannuation fund investors representatives/PPB – 29 July 2009
[311]
Concerns expressed by Mr Bouris (then chairman of Ashington) – 4 August 2009
[318]
Investors considering change of trustee – 5 August 2009
[321]
Variation of St George facility re Potts Point Trust – 6 August 2009
[322]
Ms Garrett – 8 to 9 August 2009
[323]
PPB communications – early August 2009
[324]
Mallesons advice on structuring of funds – 14 August 2009
[330]
PPB Strategy Report No 1 – 14 August 2009
[331]
The URGENT ATTENTION email – 16 August 2009
[342]
Meeting of Mr Gavin and Ashington – 17 August 2009
[345]
Investec calls on $6 million outstanding equity – 18 August 2009
[347]
14th drawdown on ADF 2 – 18 August 2009
[348]
Anderson’s email to superannuation fund investors – 18 August 2009
[349]
Update to LUCRF Investment Committee – 18 August 2009
[350]
Meeting of PPB, Ashington and superannuation fund investors – 18 August 2009
[351]
HESTA board report – 19 August 2009
[352]
Email from Mr Steel to Mr Bouris – 19 August 2009
[353]
Investec notice of default, demand for payment and cancellation of facility – 19 August 2009
[354]
Bouris resigns as chairman and director – 19 August 2009
[357]
Westpac response to request for extension of Westpac Stonington Facility – 19 August 2009
[358]
PPB draft mandate letter – 20 August 2009
[359]
Steel seeks advice as to his position – 20 August 2009
[360]
Anderson’s request for better communication of PPB’s role – 20 August 2009
[361]
Advice from Ms Briggs re entitlement to fees if new trustee appointed – 21 August 2009
[362]
PPB Strategy Report No 2 – 21 August 2009
[366]
Superannuation fund investors’ position – late August 2009
[372]
24 to 25 August 2009
[375]
PPB Mandate – 25 August 2009
[380]
Ashington liquidity issues – 26 August 2009
[384]
Request by Ashington for copy of Second PPB Report – 26 August 2009
[385]
Superannuation Fund Investors’ meeting – 26 August 2009
[387]
Ashington’s recommended short-term strategy – 27 August 2009
[390]
Response to Ashington’s recommendation – 28 August 2009
[394]
Westpac’s position – 28 August 2009
[399]
Draft letter to Investec – 28 August 2009
[400]
Expanded scope of PPB engagement – 31 August 2009
[401]
Ashington’s strategy – 31 August 2009
[402]
Liquidity issues – 31 August 2009
[403]
St George offer to vary Cross+ Trust facility – 31 August 2009
[404]
Letter from PPB to Investec – 31 August 2009
[405]
Ms Garrett commences with Ashington – September 2009
[407]
Investec’s position – early September 2009
[409]
HESTA consent to provision of PPB’s report to Ashington – 1 September 2009
[410]
Conference call superannuation fund investors – 2 September 2009
[411]
Letter to Investec from lawyers for superannuation fund investors – 3 September 2009
[412]
14th drawdown letter from Investec to unitholders – 7 September 2009
[415]
Investec breach notices – 7 September 2009
[416]
Investec reference to proposed appointment of receivers – 9 September 2009
[417]
HESTA “impaired” investments – 9 September 2009
[418]
Request for extension of time by Ashington – 9 September 2009
[419]
Ashington response to request by PPB for update – 10 September 2009
[420]
Meeting of superannuation investors/consultants – 10 September 2009
[425]
Proposed mandate for Patersons to raise $15 million for Stonington – 11 September 2009
[426]
Establishment by Mallesons of Stonington Data Room – 11 September 2009
[432]
Position in relation to Investec – 11 September 2009
[433]
Sunsuper write-down of investment – 11 September 2009
[439]
Proposed structure of mezzanine refinance deal – 13 September 2009
[440]
Stonington Data Room – 15 September 2009
[441]
Investec’s response to PPB’s proposal – 16 September 2009
[442]
Request for extension re Double Bay facility – 16 September 2009
[443]
Stonington Data Room – 16 September 2009
[444]
HESTA update – 16 September 2009
[445]
Westpac Stonington Facility in default – 17 September 2009
[446]
Letter from Norton Gledhill – 18 September 2009
[447]
14th drawdown notice issued by Ashington Capital – 21 September 2009
[448]
Legal advice on 14th drawdown – 21 September 2009
[451]
PPB proposed superannuation fund investors’ meeting – 21 September 2009
[452]
Ashington account overdrawn – 21 September 2009
[453]
Development of the Patersons Mandate – 21 September 2009
[454]
PPB email in relation to 21 September capital call – 22 September 2009
[459]
Proposed mandate re mezzanine finance – 22 September 2009
[460]
Investec advise no extensions to Investec facility for Wylde Street – 22 September 2009
[470]
Advice sought re use of funds from 21 September capital call – 23 September 2009
[471]
Draft proposal to Investec – 23 September 2009
[472]
Updates to Patersons Mandate – 23 September 2009
[479]
Signed Patersons Mandate – 23 September 2009
[486]
Valuation of Wylde Street – 23 September 2009
[503]
Communications with Investec – 23 September 2009
[504]
Modifications to Patersons Mandate and Investec Proposal – 24 September 2009
[505]
Stonington Capital Raising – 24 September 2009
[506]
Process re Wylde Street sale – 24 September 2009
[511]
Issues re 21 September 2009 capital call – 25 September 2009
[512]
PPB request advice as to Investec fixed charge and Garrett made point of contact – 25 September 2009
[513]
Review of refusal of development application re Double Bay – 25 September 2009
[517]
Draw request re Double Bay – 26 September 2009
[518]
Emails Ms Garrett/ Mr de Rooy – 27 September 2009
[520]
Draft proposal for investors re Stonington Capital Raising – 28 September 2009
[521]
Formal refusal of Double Bay development application – 28 September 2009
[525]
Direction that Ms Garrett generate Investor correspondence – 28 September 2009
[527]
Communications with superannuation fund investors – 28 September 2009
[528]
Ms Garrett organises meetings with investors – 29 September 2009
[529]
Emails Ms Garrett/Mr de Rooy – 29 September 2009
[531]
Updated Patersons Mandate – 29 September 2009
[532]
Meetings with superannuation fund investors – 29 to 30 September 2009
[535]
Patersons Stonington Term Sheet – 30 September 2009
[540]
Email to Mr Routley – 30 September 2009
[543]
Investec’s position on Stonington Capital Raising – 30 September 2009
[556]
HESTA’s position on Stonington Capital Raising – 30 September 2009
[558]
Initial advice on appeal of Double Bay development refusal – 30 September 2009
[559]
Creditors – 30 September 2009
[560]
Failure to meet $3 million uncalled capital call – 1 October 2009
[562]
LUCRF write-down of investment – 1 October 2009
[564]
Apex Capital Partners Pty Ltd – 1 October 2009
[565]
Emails refer to “plan” discussed with PPB – 2 October 2009
[567]
“Opportunity to invest into manager” – 2 October 2009
[574]
Investec update – 2 October 2009
[582]
Other potential investors – 2 October 2009
[583]
APEX Capital – 2 October 2009
[584]
NAB/St George default notices – 2 October 2009
[585]
Communications between Mr Steel and Ms Garrett – 3 October 2009
[586]
Debt schedule for ADF and ADF2 – 3 October 2009
[589]
Stonington model – 3 October 2009
[591]
Stonington PowerPoint – 3 October 2009
[593]
Stonington Data Room – 4 October 2009
[610]
Email Mr Steel to Ms Garrett and Mr Renauf – 4 October 2009
[611]
Meetings in Melbourne – 5 October 2009
[612]
Garrett provides update on Melbourne meetings – 6 October 2009
[625]
Investec update – 6 October 2009
[626]
Information provided by Albany – 6 October 2009
[627]
Mr Anderson’s position re Wingate and Icon Constructions – 6 October 2009
[628]
Confidentiality agreements sent to Acorn/Albany – 6 October 2009
[631]
Notices of default re Double Bay sent to PPB and asset consultants – 6 and 7 October 2009
[633]
PPB internal update re “Newco” opportunity – 6 October 2009
[636]
PPB email re CV’s – 6 October 2009
[638]
Garrett sends progress report to Investec – 6 October 2009
[640]
Meeting with St George – 6 October 2009
[641]
Conference call with Mr Ko and Mr Routley – 7 October 2009
[642]
Investec responds to progress report – 7 October 2009
[646]
Double Bay media release – 7 October 2009
[647]
Apex Capital – 7 October 2009
[648]
Rumours of insolvency – 7 October 2009
[649]
Wingate sign confidentiality agreement – 7 October 2009
[650]
Arnold Bloch Leibler advice – 7 October 2009
[651]
LUCRF write-down – 7 October 2009
[652]
PPB requests update of creditors – 8 October 2009
[653]
Acorn/Albany confidentiality agreement – 8 October 2009
[654]
Discussion between Mr Routley and Mr Ko – 8 October 2009
[659]
Swan Email – 8 October 2009
[660]
NAB/St George – 8 October 2009
[664]
PPB seek update re Stonington/Wylde Street – 8 October 2009
[669]
Ashington staffing issues – 8 October 2009
[670]
Valuation of Stonington – 8 October 2009
[671]
Investec update – 8 October 2009
[672]
Further developments with Albany – 8 and 9 October 2009
[673]
NAB formal notice of default – 9 October 2009
[678]
Offer re Wylde Street – 9 October 2009
[679]
Wylde Street progress report – 9 October 2009
[680]
Access to Stonington Data Room – 9 October 2009
[681]
Investec – 9 October 2009
[682]
Discussion with superannuation fund investors – 9 October 2009
[683]
Albany/Acorn seek additional documents – 10 October 2009
[686]
Garrett re update sought by Anderson – 10 October 2009
[688]
Response to Acorn/Albany’s request for documents – 11 October 2009
[690]
Stonington Tour – 12 October 2009
[692]
Investec update – 12 October 2009
[693]
Legal proceedings – 12 October 2009
[695]
Writedown of HESTA Investment – 12 October 2009
[696]
Thorney – 12 October 2009
[697]
Draft Albany/Acorn offer – 12 to 14 October 2009
[698]
Investigating accountant KordaMentha engaged by NAB – 12 October 2009
[701]
Sale of Stonington put “on hold” – 12 October 2009
[702]
Military Super – 12 October 2009
[703]
Ms Garrett updates Mr McCabe – 13 October 2009
[704]
Investec – 13 October 2009
[706]
Creditors – 13 October 2009
[707]
Smorgon access to Stonington Data Room – 13 October 2009
[709]
Ms Garrett’s “salary” – 13 October 2009
[711]
Acorn/Albany prepare letter to investors – 13 October 2009
[712]
Meeting of PPB, Investec and Albany – 13 October 2009
[713]
The Stonington Data Room – 14 October 2009
[714]
Stonington Project – 14 October 2009
[715]
Albany/Acorn letter of offer – 14 October 2009
[718]
Smorgon – 14 October 2009
[721]
Meeting of Albany/Investec/Ms Garrett – 14 October 2009
[722]
Application to extend – 14 October 2009
[723]
McCabe organises meeting in London – 15 October 2009
[724]
Media – 15 October 2009
[725]
Meeting with KordaMentha organised – 15 October 2009
[726]
Wingate sent Stonington PowerPoint – 15 October 2009
[729]
PPB/Albany/Acorn – 15 October 2009
[730]
Investec querying standstill arrangement – 15 October 2009
[735]
Albany list of issues – 15 and 16 October 2009
[736]
Albany/Acorn confirm interest in replacing Ashington – 16 October 2009
[738]
Wylde Street change of agent – 16 October 2009
[739]
Information to Albany – 16 October 2009
[740]
PPB Key Issues Paper – 16 October 2009
[744]
Westpac extension – 16 October 2009
[747]
Icon Constructions - creditor’s statutory demand – 16 October 2009
[748]
Investec update re Stonington Capital Raising – 18 October 2009
[749]
KordaMentha – 19 October 2009
[750]
PPB/Acorn/Albany – 19 October 2009
[754]
Investec/Albany/Acorn – 19 October 2009
[761]
Ms Garrett/Mr Renauf’s proposed new salary arrangements – 19 October 2009
[762]
NAB send Ashington the KordaMentha engagement letter – 19 October 2009
[765]
Investec update from Ms Garrett – 19 October 2009
[767]
PPB/Garrett/Albany/Acorn – 20 October 2009
[768]
PPB and Ashington – 20 October 2009
[774]
KordaMentha – 20 October 2009
[775]
Acorn/Albany indicative offer – 20 and 21 October 2009
[780]
Superannuation fund investor’s response to Acorn/Albany indicative offer – 21 October 2009
[785]
Garrett and Anderson discuss PPB involvement – 21 October 2009
[791]
Mr Renauf organises Albany site visit – 21 October 2009
[794]
Sale of Wylde Street moves to open market – 21 October 2009
[795]
Ko seeks advice on response to PPB – 22 October 2009
[796]
“Hit and Run” email – 22 October 2009
[799]
PPB update asset consultants – 22 October 2009
[802]
Ko details plan to Investec – 22 October 2009
[803]
PPB/Acorn/Albany – 22 October 2009
[805]
Ko responds to PPB – 22 October 2009
[806]
Ko/Garrett/Renauf – 22 October 2009
[809]
Sunsuper Investment Recommendation Form – 22 October 2021
[810]
Superannuation fund investors and PPB discussion – 23 October 2009
[811]
Garrett and Renauf – 23 October 2009
[813]
KordaMentha – 23 October 2009
[817]
DTZ sign confidentiality agreement – 23 October 2009
[819]
Update re Wylde Street – 23 October 2009
[820]
Acorn/Albany/PPB – 23 October 2009
[821]
Garrett/Renauf/PPB – 23 October 2009
[825]
Garrett and Renauf meet with McCabe in London – 24 October 2009
[828]
Wingate term sheet – 26 October 2009
[829]
Internal PPB – 26 October 2009
[830]
Response to Norton Gledhill – 26 October 2009
[831]
Acorn/Albany communications – 27 October 2009
[833]
Wylde Street – 27 October 2009
[834]
“Boutique incubator” model – 27 October 2009
[836]
Anderson seeks update on Alter family – 28 October 2009
[837]
Wingate extend Wylde Street offer – 28 October 2009
[838]
Acorn/Albany “conceptual plan” – 29 October 2009
[839]
Investec – 29 October 2009
[843]
Ashington unable to pay rent – 29 October 2009
[844]
HESTA – 29 October 2009
[845]
Wylde Street update – 30 October 2009
[846]
Acorn/Albany proposal – 30 October 2009
[847]
Anderson informs PPB of Wingate offer – 30 October 2009
[848]
Investec update – 30 October 2009
[849]
Quarterly investors’ report – 30 October 2009
[850]
Ashington’s auditor to contact ASIC – 30 October 2009
[851]
Garrett emails Investec – 1 November 2009
[852]
2 November 2009
[853]
3 November 2009
[859]
Investec notice of default – 4 November 2009
[861]
Preparation for meeting with superannuation fund investors – 4 November 2009
[862]
Mr Anderson collaborates with Mallesons – 4 November 2009
[865]
Wingate – 4 November 2009
[866]
Information sent to PPB – 4 and 5 November 2009
[867]
Ashington meets with auditors – 5 November 2009
[869]
Wylde Street sale progress – 5 November 2009
[870]
Garrett informs PPB of Investec notice – 5 November 2009
[871]
KordaMentha – 5 and 6 November 2009
[872]
Presentations to superannuation fund investors – 6 November 2009
[875]
Wingate developments – 6 November 2009
[882]
Wylde Street has positive response rate – 6 November 2009
[884]
Mr Carolan
[885]
Mr Anderson pressing for information – 6 November 2009
[888]
PPB weekly update – 6 November 2009
[889]
8 November 2009
[890]
Hamton winding up application – 9 November 2009
[893]
Superannuation fund investors/Investec – 9 November 2009
[895]
Ko sends draft term sheet to Investec –9 November 2009
[896]
Wingate Proposal – 9 November 2009
[897]
Auditor’s draft letter to ASIC – 9 November 2009
[898]
Ms Garrett/Mr Renauf’s trip to Melbourne – 10 November 2009
[899]
Parissen developments – 10 November 2009
[900]
Investec query re Wingate Proposal – 10 November 2009
[905]
Hamton proceeding adjourned – 10 November 2009
[906]
Draft letter to ASIC re Investec’s position – 10 November 2009
[908]
Anticipation of celebration – 10 November 2009
[909]
Norton Gledhill request information re Wingate – 10 November 2009
[910]
Ashington cashflow problems – 10 November 2009
[912]
Further steps re Acorn/Albany proposal – 10 November 2009
[915]
Land and Environment Court Appeal re Double Bay – 10 November 2009
[919]
St George records loan breaches by Ashington – 10 November 2009
[920]
Internal Ashington communications re consequences of removal as trustee – 10 November 2009
[921]
Wingate Proposal – 11 November 2009
[924]
Ashington cash flow problems – 11 November 2009
[928]
Acorn/Albany term sheet sent to PPB – 11 November 2009
[929]
LUCRF reference to proposal for Parissen to take over as trustee/manager – 11 November 2009
[930]
HESTA’s valuation of ADF2 investment – 11 November 2009
[931]
Possible AFR story – 11 November 2009
[932]
Wingate revise proposal re Wylde Street – 11 November 2009
[933]
Judgment entered for Savi Communications – 11 November 2009
[934]
St George to engage Grant Thornton – 11 November 2009
[935]
Internal Ashington concerns about liquidity – 12 November 2009
[936]
Events of 12 and 13 November 2009
[937]
Parissen funding developments – 14 November 2009
[946]
Mr Carolan’s “we will be shot” email – 16 November 2009
[951]
Ashington overdrawn accounts – 16 November 2009
[952]
Ms Garrett decides not to “formalise” her employment with Ashington – 16 November 2009
[953]
Investec – 16 November 2009
[955]
Alter – 17 November 2009
[958]
KordaMentha informed of Parissen Proposal – 17 November 2009
[960]
KordaMentha/Parissen Proposal – 18 November 2009
[964]
Concern re Ashington balance sheet – 18 November 2009
[968]
PPB position re Alter/Acorn proposal – 18 November 2009
[969]
Amendments to Wingate Proposal – 18 November 2009
[971]
PPB Strategy Update No 3 – 18 November 2009
[972]
Parissen Proposal accepted by superannuation fund investors – 19 November 2009
[977]
Parissen Group incorporated – 19 November 2009
[981]
20 November 2009
[982]
Shortfall in capital raising for ADFIT – 20 November 2009
[983]
Investec contemplate appointment of receiver – 20 November 2009
[984]
Mr Ko updates Investec of superannuation fund investors’ acceptance of Parissen Proposal – 22 November 2009
[985]
Acceptance of Wingate Proposal – 20 November 2009
[986]
Wingate establishment fee – 23 November 2009
[988]
Investec re 30 November deadline
[989]
Ashington updates PPB – 23 November 2009
[990]
Offer re Wylde Street – 23 November 2009
[992]
KordaMentha report – 23 November 2009
[993]
Meeting to be arranged with Ashington re its removal as trustee/manager – 24 November 2009
[994]
PPB Amended Report No 3 – 25 November 2009
[997]
Communications re Parissen Proposal – 25 November 2009
[1002]
Investec’s understanding of the position as at 25 November 2009
[1005]
Consent provided by LUCRF, Sunsuper and HESTA – 26 November 2009
[1007]
Parissen - 27 November 2009
[1007]
Further communications re ADF/ADF2 and Wingate Proposal – 27 November 2009
[1010]
PPB informs Mr Anderson of proposal to remove Ashington – 27 November 2009
[1012]
Superannuation fund investors formalise approval – 27 November 2009
[1013]
PPB update investors on removal of Ashington – 30 November 2009
[1016]
PPB communications with Mr Ko – 30 November 2009
[1017]
Termination of Mr Carolan’s employment with Patersons – 30 November 2009
[1018]
Ko sends Ashington’s documents to Baker McKenzie – 1 December 2009
[1019]
Wylde Street outstanding land tax – 1 December 2009
[1020]
Mr Anderson’s communication with superannuation fund investors – 2 December 2009
[1021]
LUCRF and Military Super approve removal of Ashington – 2 to 3 December
[1025]
Investec looking to appoint receiver – 3 December 2009
[1026]
Further steps re removal of Ashington – 3 to 4 December 2009
[1027]
Expression of interest re purchase of assets of ADF and ADF2 – 4 December 2009
[1029]
Valad assert consent required to change trustee of Noosa Trust – 4 December 2009
[1030]
Wingate Proposal – 7 December 2009
[1031]
Arnold Bloch Leibler deliver documents for Ashington’s removal – 7 December 2009
[1032]
Hamton judgment – 7 December 2009
[1033]
Sale of Wylde Street Property – 7 December 2009
[1034]
Arnold Bloch Leibler rejects Ashington’s assertions as to PPB’s conduct – 7 December 2009
[1035]
PPB prepare for court action against Ashington – 8 December 2009
[1036]
Communications between Mr Anderson and Mr King – 9 to 11 December 2009
[1037]
Parissen informed of Ashington’s proposal – 11 December 2009
[1040]
Rose and Jones negotiations – 14 December 2009
[1041]
Ashington considers elevating Wingate to head trust level – 14 December 2009
[1042]
Communications between Mr Steel and PPB – 14 and 15 December 2009
[1043]
Investec does not support Wingate Proposal – 15 December 2009
[1046]
Anderson signs variation of trust deeds – 15 December 2009
[1047]
Ko seeks banks’ consent for Parissen’s appointment – 16 December 2009
[1048]
Investec consider arrangement with Wingate – 17 December 2009
[1050]
Resolutions for Ashington’s retirement – 17 December 2009
[1051]
PPB update Investec – 18 December 2009
[1052]
Possible collaboration between PPB and Parissen – 20 December 2009
[1053]
Ashington confirms imminent retirement – 22 December 2009
[1054]
Ashington letter to investors – 22 December 2009
[1055]
KordaMentha questions Parissen Proposal – 22 December 2009
[1056]
Mr Ko meets with lenders – 22 December 2009
[1057]
PPB updates Investec – 22 December 2009
[1058]
NAB/ St George provide proposal to Parissen – 23 December 2009
[1059]
Arnold Bloch Leibler letter to Ashington – 23 December 2009
[1060]
Ashington retires as trustee of ADF and ADF2 – 23 December 2009
[1061]
Acorn sets out investment requirements – 31 December 2009
[1066]
Parissen due diligence progress – January 2010
[1067]
PPB Strategy Update No 4 – 13 January 2010
[1069]
Mr Shorrocks informed as to Acorn investment – 8 February 2010
[1070]
Parissen receive legal advice – 11 February 2010
[1071]
Further steps for removal of Ashington – 23 and 24 February
[1072]
PPB Strategy Report No 5 – 10 March 2010
[1075]
Presentation by Parissen to Acorn – 26 March 2010
[1076]
Further steps to transition – March to August 2010
[1079]
Liquidation of Ashington Capital and Ashington Management – 14 April 2011
[1087]
Mapeline Proceeding – 2013 to 2015
[1088]
Deed of Option Agreement – 29 September 2015
[1093]
Key Dates
[1099]
Most likely genesis of the “plan” to remove Ashington as trustee/manager
[1204]
State of ADF and ADF2 as at September 2009
[1224]
ADF
[1225]
ADF2
[1231]
Plaintiff’s claims
[1235]
Summary of conclusions
[1240]
Issues as to assignment of choses in action to plaintiff
[1265]
(i) Failure to comply with s 12 Conveyancing Act
[1269]
(ii) Inability to assign fiduciary duty/knowing assistance claims
[1271]]
(iii) Standing
[1288]
Plaintiff’s response
[1295]
Determination as to these issues
[1302]
Evidence
[1312]
Lay evidence
[1312]
Mr Anderson
[1312]
Ms Briggs
[1328]
Mr Shorrocks
[1333]
Representatives of the superannuation fund investors
[1335]
HESTA
[1335]
Military Super
[1340]
LUCRF
[1344]
Sunsuper
[1364]
Conclusions to be drawn from superannuation fund investors’ evidence
[1373]
Jones v Dunkel inferences
[1379]
Transcripts of liquidator’s examinations
[1397]
Ms Garrett – Ex A
[1974]
Mr Ko – Ex B
[1405]
Expert evidence
[1409]
Mark Wist and Stephen Gray – Evidence as to property market conditions
[1412]
Mr Wist
[1412]
Professor Gray
[1436]
Determination
[1446]
John Melluish and Peter Gothard – insolvency practitioners
[1449]
Brendan Halligan and Jeffrey Hall – valuation experts
[1455]
Expert Witness Code of Conduct
[1464]
Mr Halligan’s reports
[1477]
(i) The financial statements of Ashington Group and its controlled entities (which are unaudited, special purpose financial statements for the 2008 financial year and unaudited, consolidated management accounts for the 2009 financial year) present fairly the financial performance and financial position of Ashington Group and its controlled entities.
[1478]]
(ii) But for the “wrongful conduct”, the ADF and ADF2 development projects and associated funds in progress at the valuation date would have continued to run their course as stated in Mr Anderson’s affidavit of 19 December 2017
[1482]
(iii) The forecasts of the amounts and timing of development management fees, sales commissions, return on equity of the projects in ADF and ADF2 are as set out in the project cost reports dated June 2009 for each project are reasonable and appropriate
[1488]
(iv) But for the wrongful conduct, AOF3 would have been constituted in January 2010, with equity commitments of $200 million
[1489]
(v) After the creation of AOF3, the consolidated Ashington group would create a new development fund every 2 years with equity commitments of $200 million and a new opportunistic fund every 2 years with equity commitments of $250 million (the future funds).
[1501]
Conclusion as to Mr Halligan’s reports
[1504]
Mr Hall’s reports
[1505]
Determination
[1527]
Provisional and deferred evidentiary rulings
[1532]
Loss of trust and confidence in Ashington
[1534]
Defendants’ submissions on loss of trust and confidence
[1537]
The plaintiff’s submissions on loss of trust and confidence
[1543]
Findings as to loss of trust and confidence
[1562]
Perceived breaches of trust
[1564]
Use of the December 2008 capital raising for purposes other than the purpose in the subscription documents
[1573]
Failure to quarantine costs and assets within each sub-trust
[1576]
Entry into undocumented “loans” to ADF and Ashington Group
[1581]
Failure by Ashington Capital and Ashington Group to contribute capital in cash for the subscription price for units
[1584]
The double pledge of uncalled equity in relation to the 2008 Double Bay capital call
[1590]
Anderson’s personal guarantee over the Hamton Vendor Finance
[1593]
Payment of “bonuses” when Mr Anderson knew there was no entitlement to the funds
[1596]
Remaining breaches
[1597]
PPB’s breach of trust pleading
[1602]
Plaintiff’s response to allegations of breach
[1604]
Solvency issues
[1610]
Defendants’ claim Ashington insolvent as at 30 September 2009
[1610]
Solvency of Ashington Management
[1632]
Determination as to solvency
[1642]
Attribution of knowledge and vicarious liability issues
[1643]
Attribution of knowledge
[1646]
Patersons’ submissions as to attribution of knowledge
[1646]
Plaintiff’s submissions as to attribution of knowledge
[1663]
Patersons’ supplementary submissions as to attribution of knowledge
[1668]
Determination
[1676]
Vicarious Liability
[1685]
Patersons’ submissions – vicarious liability
[1686]
Plaintiff’s submissions – vicarious liability
[1694]
Patersons’ supplementary submissions – vicarious liability
[1712]
Determination
[1728]
Claims
[1774]
Fiduciary duties
[1775]
Ms Garrett and Mr Renauf
[1776]
Summary of the fiduciary duty claim against Ms Garrett
[1776]
Summary of the fiduciary duty claim against Mr Renauf
[1780]
Ms Garrett and Mr Renauf’s employment status
[1783]
Did Ms Garrett and Mr Renauf owe fiduciary duties?
[1806]
Ms Garrett and Mr Renauf’s submissions
[1820]
Nature of any fiduciary duties owed
[1831]
Determination
[1834]
Patersons
[1858]
Patersons’ submissions
[1863]
Determination
[1871]
Breach of fiduciary duties
[1872]
Ms Garrett and Mr Renauf – breach of fiduciary duty
[1873]
Submissions of Ms Garrett and Mr Renauf as to alleged breach
[1911]
Determination
[1937]
Patersons – breach of fiduciary duty
[1939]
Claim for breach of alleged term of good faith/confidentiality – Ms Garrett and Mr Renauf
[1946]
Determination
[1954]
Claim for breach of Patersons Mandate - Patersons
[1966]
Determination
[1985]
Knowing assistance claims
[1988]
Knowing assistance claims against Ms Garrett and Mr Renauf
[1993]
Determination
[1996]
Knowing assistance claim against Patersons
[1997]
The pleaded case
[1998]
Plaintiff’s submissions
[2009]
Mr Carolan’s knowledge and assistance
[2010]
Mr Doherty’s knowledge and assistance
[2015]
Patersons’ submissions
[2019]
Mr Shorrocks’ knowledge and assistance
[2022]
Mr Doherty’s knowledge and assistance
[2032]
Mr Carolan’s knowledge and assistance
[2063]
Determination
[2085]
Knowing assistance claim against PPB – Ms Garrett/Mr Renauf’s breaches of fiduciary duties
[2092]
Plaintiff’s submissions
[2093]
PPB’s submissions
[2101]
Determination
[2148]
Knowing assistance claim against Acorn – Ms Garrett and Mr Renauf’s/Patersons’ breaches of fiduciary duties
[2158]
Plaintiff’s submissions
[2163]
Acorn’s submissions
[2170]
The pleaded case as to knowledge
[2189]
Imputed knowledge
[2266]
Assistance
[2274]
Determination
[2280]
Knowing assistance claim against Albany – re Ms Garrett’s and Mr Renauf’s and Patersons’ alleged breaches of fiduciary duties
[2284]
Plaintiff’s submissions
[2285]
Albany’s submissions
[2288]
Assistance
[2385]
Determination
[2386]
Breach of contract and duty of confidence claims
[2394]
Claim for breach of contract against Patersons
[2400]
Determination
[2404]
Claim for breach of contract against PPB
[2407]
PPB’s submissions
[2416]
Determination
[2452]
Claim for breach of contract against Acorn
[2453]
Determination
[2462]
Claim for breach of contract against Albany
[2467]
Albany’s submissions
[2471]
Determination
[2492]
Relief claimed by the plaintiff
[2493]
Causation
[2496]
Principles of causation and loss in equitable compensation claims
[2496]
Principles of causation at common law
[2507]
Pleading
[2509]
Plaintiff’s submissions on causation
[2512]
Defendant’s position on causation
[2533]
The Stonington Capital Raising would have involved breaches of trust
[2538]
Funds raised by the Stonington Capital Raising would have been insufficient
[2567]
No evidence that the Stonington Capital Raising could have succeeded
[2594]
Financiers would have enforced securities
[2627]
No ongoing business capable of being “lost”
[2628]
Defendants did not cause reputation damage
[2631]
Defendants’ counterfactual scenario
[2640]
Ms Garrett and Mr Renauf’s pleading submissions – causation
[2656]
Determination – causation
[2660]
Loss
[2672]
Plaintiff’s submissions on loss
[2672]
Going concern and recapitalisation
[2682]
Lenders would not have exercised securities
[2689]
AOF3
[2698]
Ashington’s units in the trusts
[2709]
Fees to be earned by Ashington companies other than Ashington Capital or Ashington Management
[2610]
Value calculations
[2711]
Defendants’ submissions on loss
[2718]
Loss limited to Ashington Capital and Ashington Management
[2721]
Units
[2730]
Limited evidence of future funds
[2731]
Superannuation fund investors’ ability to remove Ashington Capital and Ashington Management
[2732]
Limitations of plaintiff’s expert evidence
[2733]
Ashington not a going concern/insolvent
[2734]
Appropriate valuation method
[2743]
Future fund and loss of opportunity
Determination – Loss
[2775]
Proportionate liability
[2792]
Patersons supplementary submissions – equitable contribution
[2796]
Acorn’s supplementary submissions on equitable contribution
[2804]
Plaintiff’s supplementary submissions as to proportionate liability in equity
[2810]
Determination – proportionate liability
[2819]
Costs
[2820]
Orders
[2821]
Judgment
-
HER HONOUR: This matter involves a dispute between several parties arising out of events occurring in 2009 as a result of which the plaintiff asserts that the defendants caused the destruction of the property acquisition, development and funds management business of the Ashington group of companies.
-
The background to the dispute (which I will set out more fully in due course) is not uncomplicated. In summary, the plaintiff (Mrs Daniela Anderson) brings the present proceeding as the assignee of causes of action from the liquidator of Ashington Capital Pty Ltd (Ashington Capital) and Ashington Management Pty Ltd (Ashington Management), two companies in the Ashington group of companies.
-
The Ashington group of companies at the relevant time included Ashington Group Pty Ltd (Ashington Group), Ashington Capital, Ashington Management and Ashington Real Estate Pty Ltd (Ashington Real Estate). As adverted to above, each of Ashington Group, Ashington Capital and Ashington Management is now in liquidation. Broadly speaking, the Ashington companies carried on a property development business through two wholesale unregistered unit trusts (Ashington Development Fund) (referred to here as ADF and ADF2) and associated sub-trusts, through which the core of the Ashington group business (the property development projects) was conducted.
-
Companies in the Ashington group held units in ADF and ADF2. Ashington Capital was the trustee of each of the trusts and sub-trusts; and it appointed Ashington Management as the development manager of each of the trusts and sub-trusts.
-
The primary equity investors in ADF and ADF2 trusts were large superannuation funds – Sunsuper Pty Ltd as trustee for Superannuation Fund (Sunsuper); LUCRF Pty Ltd as trustee for LUCRF Super (LUCRF); Commonwealth Superannuation Corporation as trustee for Military Superannuation and Benefit Fund No 1 (Military Super) and HEST Australia Pty Ltd as trustee for the Health Employees Superannuation Trust Australia (HESTA). I refer to those investors as the superannuation fund investors (in distinction to the minority Ashington unitholders in those unit trusts).
-
As noted, Ashington Capital acted as trustee for ADF and ADF2; and earned trustee and management fees in that role; and Ashington Management acted as development manager for the property development activities carried on within the funds and earned development management fees in that role. As at 2009, Ashington Capital and Ashington Management were respectively entitled to receive trustee fees of approximately $1.6 million and management fees of approximately $4.8 million annually for the property development projects undertaken through the respective unit trusts and associated sub-trusts.
-
Ashington Real Estate acted as a real estate agent for the sale or leasing of completed projects and collected sales commissions.
-
Another entity within the Ashington group, Ashington Capital Int. Pty Ltd (ACIL), was established to act as a trustee and manager for a proposed new investment fund (originally proposed to be called ADF 3 but which in due course became referred to as the Ashington Opportunistic Fund No 3, to which I will refer as AOF3). I understand the reference to an opportunistic fund, as its name indicates, to be one that invests “opportunistically” in properties or projects in, say, a distressed market.
-
The plaintiff here claims equitable compensation and damages from the various defendants, alleging that they wrongfully caused the destruction of the Ashington business. In particular, the plaintiff alleges that a “Consortium” was formed between various of the defendants in October and November 2009 with the objective of taking Ashington’s business (there referring to Ashington as a collective term to include both Ashington Capital and Ashington Management) for their own benefit. The plaintiff essentially alleges a conspiracy unlawfully to take Ashington’s business from it.
-
The value of the business is a matter in contention. The plaintiff’s expert, Mr Brendan Halligan, initially valued it as being some $140 million. However, in the course of the hearing Mr Halligan accepted that if the value of AOF3 and future funds was removed from that figure then the value of the business was reduced to somewhere in the range of $5.25 and $16.9 million (T 1259). By contrast, the defendants’ expert, Mr Jeffrey Hall, values the business at nil.
Parties
-
The plaintiff is the wife of Mr Craig Anderson (a discharged bankrupt) who was the founder and driving force behind the Ashington group. Mr Anderson is the principal protagonist in the proceeding and was cross-examined at some length. I will refer to his evidence in due course. Mr Anderson is a former director and shareholder of Ashington. Mr Craig Minahan, another director of Ashington, also gave evidence in the proceeding. The plaintiff was represented at the hearing by Mr Braham SC with Mr Kabilafkis and Mr Bhasin of Counsel.
-
The first defendant, Patersons Securities Ltd (Patersons) (now known as Canaccord Genuity Financial Ltd), is a stockbroking and financial services/corporate advisory firm. For ease of reference, I will continue to refer to it as Patersons (since that is the name by which it was known at the relevant time). Mr Raymond Shorrocks, who gave evidence in the proceeding, was a director of Patersons from 12 July 2004 to 30 January 2009 and an alternate director of Patersons from 17 March 2009 until around April 2018; and its Head of Corporate Finance – Sydney at the relevant time (Mr Shorrocks’ affidavit affirmed 7 September 2018 at [2]-[4]). Other employees of Patersons at the relevant time who feature in the relevant events were Mr Martin Carolan (Ms Garrett’s then husband) and Mr Paul Doherty. Patersons was represented at the hearing by Mr Redwood SC with Ms Bathurst of Counsel.
-
The second defendant, Ms Nicola Garrett (Ms Garrett) held a role within the Ashington group in the second half of 2009 until 16 November 2009. The third defendant, Mr Samuel Renauf (Mr Renauf), also held a role within the Ashington group from around July until on or about 22 December 2009. Whether Ms Garrett and Mr Renauf were employees or consultants of Ashington is a matter in dispute. Ms Garrett and Mr Renauf are, in essence with the fourth defendant (see below), alleged to have been the architects of the plan wrongfully to take Ashington’s business. It is alleged that they supplied confidential information with respect to Ashington’s business to the fifth and sixth defendants (see below) and facilitated contact between those defendants and the superannuation fund investors who were members of the ADF and ADF2 unit trusts. It is alleged that both Ms Garrett and Mr Renauf were to benefit from the taking of Ashington’s business as it was proposed that they would be employed by the new entity taking control of the business. Ms Garrett and Mr Renauf were jointly represented in the proceeding by Ms Painter SC with Mr Bagley of Counsel. Neither Ms Garrett nor Mr Renauf gave evidence at the hearing though there was no suggestion that they were incapable of so doing.
-
The fourth defendant, PPB Pty Ltd (PPB), is an insolvency firm. Mr Peter Block and Mr Brett Lord of PPB were involved in the relevant events. PPB was represented at the hearing by Mr Ng with Mr Sud of Counsel. No one from PPB gave evidence at the hearing.
-
The fifth defendant, Acorn Capital Ltd (Acorn), is an investment company. Relevant persons at Acorn were Mr Robert Routley and Mr Matthew Sheehan. Neither gave evidence at the hearing. Mr McGrath SC with Ms Williams of Counsel represented Acorn at the hearing.
-
The sixth defendant, Albany Capital Investors Pty Ltd (Albany), is a company engaged in funds management and associated with a well-known family in Victoria, the Alter family. Relevant persons at Albany were Mr Byron Ko and Mr Neil Tremaine. Neither gave evidence in the hearing. Albany was represented at the hearing by Mr Sexton SC with Ms Cameron of Counsel.
-
Ashington Capital and Ashington Management are the seventh and eighth defendants, respectively. No claims were made against those companies (both of which are in liquidation) and they took no part in the hearing.
Plaintiff’s complaint
-
In summary, the plaintiff complains that, as a result of the wrongful conduct of the respective defendants, the business of Ashington was destroyed; and that Ashington lost the opportunity of a successful outcome to what is referred to as the Stonington Capital Raising (that being the attempt to refinance existing mezzanine facilities in respect of the acquisition of the Stonington Property – see below), which was the subject of a mandate known as the Patersons Mandate). It is said that the Patersons Mandate was converted into a vehicle for advancing the defendants’ own plan to take over Ashington’s business; that this resulted in the loss of Ashington’s existing income stream in the form of trustee and management fees; and that it also destroyed Ashington’s ability to establish future funds (in respect of which it is noted that in 2009 plans were already in development) and to earn the associated management and trustee fees therefrom, including loss through the damage the defendants’ actions caused to Ashington’s reputation in the market.
-
The plaintiff accepts that, in the aftermath of the global financial crisis (in 2008), the Ashington business faced difficulties securing debt financing that it needed to finance the purchase of three properties (the Noosa, Double Bay, and Stonington properties) in respect of which it had exchanged contracts to purchase before the collapse of Lehman Brothers. The purchases of all three properties were completed in November 2008, December 2008, and February 2009, respectively. However, the plaintiff concedes that there were features of the finance in relation to the acquisition of the Double Bay and Stonington properties that led to problems in 2009.
-
The plaintiff also accepts that the request by Ashington in June 2009 for the mezzanine facilities to be repaid through the injection of additional equity by ADF2 unitholders created “disquiet” amongst the superannuation fund investors about the terms of the Investec Stonington Facility and as to the quality of communication by Mr Anderson with superannuation fund investors. However, the plaintiff maintains that at this stage there was still significant value in Ashington’s business (and it must be said that Mr Anderson himself appears to have been confident – although perhaps optimistically so – that the superannuation fund investors’ concerns could be adequately addressed or assuaged). It is said that Ashington’s business still involved (through ADF and ADF2) the management of a portfolio of high-quality assets with sound fundamentals; and that, provided that Ashington could resolve its immediate funding difficulties, it had strong prospects of restoring investor confidence and maintaining and developing its business.
-
In particular, the plaintiff says that the fortunes of Ashington depended upon it being able to refinance the Investec Stonington Facility (and it contends that the actions of Ms Garrett and Mr Renauf, with the knowing assistance of the other defendants, destroyed that prospect). The key aspects of Ashington’s strategy in that regard were identified as being to raise alternative mezzanine financing through a capital raising to be conducted by Patersons under the Patersons Mandate (and to “manage” the superannuation fund investors and financiers to gain time for this to occur).
-
Mr Anderson’s evidence is that he reposed considerable trust in Ms Garrett, who “formally commenced” as Head of Funds Management with Ashington in mid-September 2009, and gave her primary responsibility for managing the Stonington Capital Raising on behalf of Ashington. Ms Garrett’s responsibilities included liaising with Patersons, meeting with prospective investors, overseeing access to an electronic data room established for prospective investors, and keeping Investec informed of the progress of the capital raising.
-
The plaintiff says that, from late September until late November 2009, Mr Anderson relied almost entirely on Patersons, Ms Garrett and Mr Renauf to conduct communications with PPB and the superannuation fund investors, and to raise the finance to retire the Investec debt, recapitalise the Stonington Trust, and release the uncalled equity into the Double Bay (Project X Hotel) Trust. It is said that the Ashington business depended for its survival on those critical steps and that Mr Anderson had no reason to believe that Patersons, Ms Garrett and Mr Renauf were not “up to that task”.
-
The plaintiff accepts that Ashington was unable to repay the respective Stonington facilities when they fell due at the end of August 2009; and that Ashington Capital therefore fell into default. However, the plaintiff says that the lenders were willing to allow time for a refinancing solution to be found. In this regard, the plaintiff notes that, even though Investec issued notices of default when unitholders did not meet calls made in September 2009 for the remaining $6 million of uncalled equity from the unitholders in ADF2, Investec did not otherwise take steps to enforce its security while Ashington was exploring options to refinance the Investec Stonington Facility.
-
As to the prospect of Ashington being able to establish future funds and earn ongoing trust and management fees, the plaintiff emphasises that, in the months following the collapse of Lehman Brothers, Ashington continued successfully to raise bank debt project funding for its projects, raising approximately $206 million, comprising: (a) in relation to the Project X Hotel Trust, $50.375 million in senior debt from National Australia Bank (NAB) and St George Bank (St George) and $14.62 million from NAB in late September and early October 2009 (the Project X Facilities); (b) in relation to the Stonington Trust, $23 million in senior debt from Westpac (the Westpac Stonington Facility), and $10 million in mezzanine debt from Investec in December 2008 (the Investec Stonington Facility); (c) in relation to the Noosa Trust, $65.1 million in senior debt from Suncorp Metway in around October 2008; and (d) in relation to the 10 Wylde Street Trust, an offer in October 2008 of $37.44 million in senior debt from Westpac and $5.03 million in mezzanine debt from Investec.
-
The plaintiff says that Ashington’s strategy for the refinancing of the mezzanine facilities ultimately failed because, unbeknownst to him, Ms Garrett was pursuing her own venture (with the assistance of the other defendants). In particular, the plaintiff’s complaint is that, soon after Ms Garrett and Mr Renauf commenced working on the Stonington Capital Raising, PPB suggested to Ms Garrett and Mr Renauf that they would be better off working to replace Ashington (rather than to save it). It is said that, from no later than 2 October 2009, rather than performing their fiduciary obligations to Ashington, Ms Garrett and Mr Renauf took advantage of their unique position of trust within Ashington to work to establish a competing venture that would replace Ashington as manager of the developments and as trustee of the trusts (and which would effectively hand the management of the trusts to Ms Garrett and Mr Renauf themselves).
-
The plaintiff says that this scheme was dishonest both in concept and execution. It is said that, over the next eight weeks, Ms Garrett and Mr Renauf repeatedly lied to Mr Anderson as to their intentions, their actions, and the progress and likelihood of completing the original capital raising (which they had in fact abandoned). The plaintiff contends that Ms Garrett and Mr Renauf (and PPB) also lied to the existing superannuation fund investors by telling them that there was no interest in providing finance for the Stonington Trust unless the manager was replaced; and lied to the incoming investors (Acorn and Albany), at least initially, by telling them that the existing superannuation fund investors had unanimously decided to replace Ashington (when no such decision had been taken).
-
The plaintiff says that Ms Garrett and Mr Renauf were given critical assistance by employees of Patersons. In particular, it is said that Mr Carolan and Mr Doherty facilitated the scheme by arranging a crucial introduction for Ms Garrett and Mr Renauf with the potential replacement managers, and by quelling any interest in the Stonington Capital Raising that was, or would have been, expressed by the many potential financiers available to Patersons, and which would have provided superannuation fund investors with an alternative to changing managers. Indeed, as noted above, the plaintiff says that, after 2 October 2009, the Stonington Capital Raising was abandoned entirely.
-
The plaintiff contends that Ms Garrett and Mr Renauf were also assisted by PPB in important respects. It is said that PPB “pitched” the replacement manager scheme to Ms Garrett and Mr Renauf on 1 October 2009 (notwithstanding that PPB was aware that they were employees of Ashington and bound by fiduciary obligations owed to Ashington) and that PPB then arranged to provide Acorn and Albany with information they required to determine their interest in replacing Ashington (notwithstanding that to do so was in breach of obligations of confidence that arose in equity, and pursuant to their agreement with Ashington). It is said that PPB participated in misleading the superannuation fund investors in emails in the period from 6 to 9 October 2009, and subsequently in November 2009, when the superannuation fund investors relied on PPB to tell them the “pro’s and con’s” of the (competing) Parissen Proposal.
-
The plaintiff says that a key aspect of the development of the “Garrett plan” (to replace Ashington – see the pleading at [99]) was the disclosure of a significant amount of Ashington’s confidential information to Albany and Acorn, in breach of fiduciary, contractual and equitable obligations owed to Ashington. It is said that this included Albany and Acorn accessing information contained in a data room set up for the purpose of the Stonington Capital Raising, which access was facilitated by Patersons and Ms Garrett, despite it being clear that Albany and Acorn were not interested in pursuing the mandated Stonington Capital Raising. The plaintiff says that this also included the provision of a large volume of Ashington’s confidential information to Acorn and Albany by PPB in 33 emails sent on 16 October 2009 in response to Mr Routley’s request (in which he confirmed Albany and Acorn’s interest in replacing Ashington as the manager of ADF and ADF2).
-
Mr Anderson complains that he was kept in the dark as the “plan” to replace Ashington developed, believing throughout that Patersons, Ms Garrett and Mr Renauf were working on the Stonington Capital Raising in accordance with the Patersons Mandate (with Albany and Acorn as potential lenders for the mandated mezzanine facility), while PPB was advising the superannuation fund investors. Mr Anderson says that he was encouraged in that belief by Ms Garrett, including through periodic updates provided by her to the effect that discussions with potential investors for the mandated Stonington Capital Raising (including Albany and Acorn), were ongoing, without revealing that Ms Garrett was in fact pursuing an alternative agenda.
Chronology of Events
-
At this stage, suffice it to note that the persons associated with the superannuation fund investors and their advisers were as follows. Sunsuper (whose representatives included Ms Megan Chan and Mr David Hartley) was advised by Sovereign Investment Research (Sovereign) – Mr Ray King, Ms Helen Murdoch and Mr Danny Cohen; LUCRF (whose representatives included Mr David McCusker and Mr David Tieu) was advised by Arcadia Funds Management Ltd and Arcadia Advisory Pty Ltd (together, Arcadia) – Mr Hamish Flett and Mr Gerald Daly; HESTA (whose representatives were Mr Scott Hastings and Mr Robert Fowler) was advised by Frontier Investment Consulting Pty Ltd (Frontier) – Mr Leigh Gavin, Mr Jonathon Stagg and Mr Tom Frederick; and Military Super (whose representatives included Mr Paul Watson and Mr Peter Hodgson) was advised by Strategic Capital Management (SCM) – Mr Peter Dedes. A number of the advisers to the superannuation fund investors gave evidence at the hearing; relevantly, as to the superannuatin fund investors’ lack of confidence in Ashington and Mr Anderson towards the end of 2009. I refer to that evidence in due course.
Formation of Ashington group – 1994-2005
-
Mr Anderson founded the Ashington group and was the Managing Director of each of the companies in that group at all relevant times. In around 1994, Mr Anderson commenced his property development business with the redevelopment of a hotel and office block in Sydney’s CBD which was marketed as “Ashington House”. Mr Anderson redeveloped six other commercial and retail buildings in the Sydney CBD in the period up to 2003.
-
In 2003, Mr Anderson incorporated a number of companies in the Ashington group, including Ashington Management, which was established to employ staff necessary for the Ashington group’s property development business.
-
In 2005, the Ashington group decided to target industry superannuation funds to fund its property development projects. In November 2005, Ashington Capital was incorporated; and thereafter two wholesale unregistered property investment unit trusts were established: the Ashington Development Fund (ADF), which raised just over $50 million from investors, closing in May 2006 (see below); and the Ashington Development Fund No 2 (ADF2), which raised some $80 million from investors, closing in September 2007, for the purpose of acquiring and developing property assets on the eastern seaboard of Australia (also see below). ADF and ADF2 used a combination of unitholder equity and third-party debt to finance the acquisition and development of various properties.
-
A number of sub-trusts were established, each in respect of a particular property development project. Ashington Capital was the trustee of each of the various sub-trusts of ADF and ADF2. The sub-trusts below ADF were the Cross+ Trust; the Potts Point Trust; the 10 Wylde Street Trust; and the Project X Hotel Trust (in the last, ADF had a 25% interest) (see below). The sub-trusts below ADF2 were the Stonington Trust and the Noosa Trust (and ADF2 had a 75% interest in the Project X Hotel Trust) (see below).
-
Each of the sub-trusts of ADF was also an unregistered unit trust. Ashington Capital (as trustee of ADF) held 100% of the units in the Cross+ Trust, the Potts Point Trust and the 10 Wyle Street Trust, and 25% of the units in the Project X Hotel Trust. Ashington Capital (as trustee of ADF2) held the remaining 75% of the units in the Project X Hotel Trust.
-
The superannuation fund investors had ultimate control over the Ashington funds insofar as they had the ability to require the compulsory retirement of the trustee on a 75% vote (a matter admittedly known to Mr Anderson at all relevant times since inception of the funds).
-
Also, it is relevant to note that cl 16.4 of each of the constitutions of the respective sub-trusts provided that:
Control of Members
Subject to clause 16.5 the Trustee must act in accordance with the directions given from time to time by the sole Member (if any) or jointly by all Members, including in relation to the exercise of any discretion conferred on the Trustee by this deed or by law, so as to allow the Members acting together to have day to day control over the operation of the Trust. The Trustee may seek direction from the Members on any matter.
Establishment of ADF – May 2006
-
ADF was constituted on 19 May 2006. As noted above, Ashington Capital was appointed the trustee. The units in ADF were held by the following entities: Sunsuper (as to $20 million), LUCRF (as to $15 million), Military Super (as to $10 million), Ashington Group (as to $2 million), Ashington Capital as trustee for ADF Investment Trust (ADFIT) (as to $3 million), Lantern Super Pty Ltd (as to $100,000) and Henelait Pty Ltd (as to $100,000), totalling $50.2 million. Between them the superannuation fund investors held 90% of the units of ADF. Ashington Capital as trustee of ADFIT and Ashington Group were minority unitholders in ADF (between them holding approximately 10% of the units).
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Under ADF’s constitution, Ashington Capital was required to hold the Assets on trust for the Members (see cl 2.1) (“Assets” being defined in cl 27.1 as “all the property, rights and income of the Trust, but not application money or property in respect of which Units have not yet been issued, proceeds of redemption which have not yet been paid or any amounts in the distribution account or uncalled amounts on Partly Paid Units”); and any Assets held by Ashington Capital as trustee of ADF were required to be “clearly identified as property of the Trust and held separately from the assets of the Trustee and any other managed investment scheme” (cl 2.2). Clause 6 dealt with the application procedures in respect of the units: cl 6.1 provided that an applicant for units must complete an application in a form approved by the Trustee (if the Trustee so requires), the terms of the application form being approved by Ashington Capital; and, under cl 6.2, payment for the units was required to be in cash accompanying an application for units or “be received by, or made available to, the Trustee or the Custodian within such period before or after the Trustee receives the application as the Trustee determines from time to time”. Pursuant to cl 6.6, units were taken to be issued on the later of: (a) acceptance by the Trustee of the application; or (b) receipt by the Trustee of the application money.
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Clause 7 dealt with “Partly Paid Units”. Under cl 7.1, the Trustee was entitled to determine that any unit or class of units be partly paid. If it did so and there was an Uncalled Amount in respect of a unit, by giving 14 days’ notice, Ashington Capital could call on a Member to pay all or any part of the Uncalled Amount, subject to the rights, obligations and restrictions attaching to any units or Class (cl 7.3(a)). It should be noted that, under cl 7.3(b), Ashington Capital could only make such a call if it also made the same call on all other members who held units of that class which were similarly partly paid. (Complaint is here made that in relation to various calls on uncalled capital at least in relation to ADF2, the Ashington investors did not in fact contribute any capital themselves; rather, it appears that there was a retrospective book entry to offset management or other fees against uncalled capital contributions.)
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Clause 13 dealt with the powers of the Trustee. Clause 14 dealt with the retirement of the Trustee, providing, relevantly, that:
14.2 Voluntary retirement – Trust not a Registered Scheme
While the Trust is not a Registered Scheme, the Trustee may retire on three months’ notice to Members (or such shorter period as they agree)…
14.4 Compulsory retirement – Trust not a Registered Scheme
While the Trust is not a Registered Scheme, the Trustee must retire from the office it holds under this constitution if required by law or if directed to retire in writing by a Resolution where the “required majority” is 75%. The Trustee and its associates may not vote on such a proposal.
14.5 New responsible entity
Any proposed replacement Trustee must execute a deed by which it covenants to be bound by this Constitution as if it had originally been a party to it.
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Clause 19 of the constitution of ADF (mirrored in the later constitution of ADF2) provided, relevantly, that:
19.3 Liability limited to Assets
To the maximum extent permitted by law, the liability of the Trustee to any person other than a Member in respect of the Trust (including in respect of any contracts entered into as trustee of the Trust or in relation to any Assets) is limited to the Trustee’s ability to be indemnified from the Assets.
19.4 Indemnity in favour of Trustee
The Trustee is entitled to be indemnified out of the Assets for any liability incurred by it in properly performing or exercising any of its powers or duties in relation to the Trust.
…
19.6 Indemnity continues
This indemnity is in addition to any indemnity allowed by law. It continues to apply after the Trustee retires or is removed as trustee of the Trust.
19.7 Right of indemnity not affected by unrelated breach
Where a Liability is incurred pursuant to a proper exercise of the Trustee’s powers under this constitution or at law, the Trustee may exercise any of its rights of indemnification or reimbursement out of the Assets to satisfy that Liability to any creditor or the Trustee (in its capacity as trustee of the Trust), despite any loss the Trust may have suffered or any diminution in the value of Assets as a consequence of any unrelated act or omission by the Trustee or by any person or entity acting on behalf of the Trustee.
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Clause 21 dealt with the remuneration and expenses of the Trustee. Pursuant to cl 21.1, Ashington Capital, as trustee for ADF, was entitled to be paid a management fee of 1.25% per annum of Paid-up Equity (less any amounts of the Trust capital which had been returned to Members and less any realised capital losses of the Trust). Further, pursuant to cl 21.2, all expenses incurred by the Trustee in connection with the Trusts were payable or reimbursable out of the Assets but such reimbursement or payment was only available in relation to the proper performance of the Trustee’s duties as trustee of the Trust and could only be paid out of the Assets to the extent that such reimbursement was not prohibited by the Corporations Act 2001 (Cth) (Corporations Act). That included expenses connected with the fees of any development manager, including fixed fees and incentive-based fees paid pursuant to a development management agreement (cl 21.2(f)).
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Clause 27.4 provided that the constitution was legally binding and bound the Trustee as well as all of the Members.
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The Information Memorandum for ADF was issued in 2006 (see Ex M at 139). It included the following statements.
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First, that the “Primary Objective” of ADF was to “provide investors with a 20% pre-tax return on invested capital after fees and other costs” (although it noted that this was not a forecast). The fund structure and size was said to be up to $100 million and it was stated that “[n]o subscriptions will be accepted unless the Minimum Capital Commitment of $60 million is achieved”. (Patersons here points out that only $50 million of capital was committed.)
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Under the heading “Ashington Fees will Align with Investor Returns”, the Trustee Fee was described as per cl 21.1 of the constitution and the Development Management Fee was described as “2.75% for projects with a projected life of less than 2 years and 4.25% for projects with a projected life of more than 2 years”. There was also an “Incentivised Performance Fee” which was described as “50:50 sharing of profits after Investors have received a 15% pre-tax IRR after all fees and expenses”.
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Section 4 of the Information Memorandum dealt with “Project Investment Criteria”. Under the heading “Project Debt”, it stated:
To maximise equity returns to the investor, the Trustee will leverage each project to a maximum of 70% of LVR. On average the manager expects an LVR of approximately 65%.
Each acquisition and development will occur in a SPV which is a 100% subsidiary or sub-trust of the Trust. All borrowings and liabilities (with the exception of the likely tax liability) associated with each acquisition/development will occur at the SPV level.
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(For the later ADF2, the terms of the constitution and the Information Memorandum mirrored those of ADF as set out above.)
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The application form for units in ADF (and later ADF2) confirms the applicant’s knowledge and understanding of the Information Memorandum and binds the applicant to the terms of the ADF constitution (Ex M at 204).
Establishment of Cross+ Trust – 19 May 2006
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The Cross+ Trust was established by a Deed Poll dated 19 May 2006 in relation to the purchase and development of a property at Kings Cross Road, Potts Point (the former Millennium Hotel in Kings Cross) (Kings Cross Property). This property was redeveloped (by 2008) into a 78-room luxury boutique hotel, office suites, retail premises and a penthouse residential apartment.
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Ashington Capital held 100% of the units in the Cross+ Trust as trustee of ADF. Ashington Capital appointed Ashington Management as development manager of the Cross+ Trust.
Establishment of Potts Point Trust – 19 May 2006
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The Potts Point Trust was established also by a Deed Poll dated 19 May 2006 in relation to the purchase and development of a property at Macleay Street, Potts Point (the former Potts Point post office – Potts Point Property). This property was redeveloped, between 2006 and 2009, into an “Emporio” style neighbourhood retail market, seven high-end retail stores and 41 luxury strata office suites over five floors.
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Again, Ashington Capital held 100% of the units in the Potts Point Trust as trustee of ADF; and Ashington Capital appointed Ashington Management as development manager.
St George Facility for Potts Point Trust – 30 May 2006
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On 30 May 2006, St George Bank Ltd (St George) offered Ashington Capital a facility in the sum of $31.3 million for the Potts Point Trust (Ex M at 243).
St George Facility for Cross+ Trust – 10 November 2006
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On 10 November 2006, St George offered a facility in the sum of $39,107,000 for the Cross+ Trust (Ex M at 295).
Investec Facility re Wylde Street Property – March 2007
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On 15 March 2007, Investec Bank (Australia) Ltd (Investec) provided a term sheet to Ashington Group offering an initial facility of $10.78 million towards the purchase price of $15.5 million for a property at 10 Wylde Street, Potts Point (a 38 serviced apartment complex in Potts Point) (Wylde Street Property). The maturity date of the facility was 24 months from the initial drawdown date (Ex M at 320ff).
Information Memorandum for ADF2 – 2007
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In 2007, an Information Memorandum was issued for ADF2. Relevantly, it included the statement that:
Each material acquisition and development will occur in an SPV [Special Purpose Vehicle] which in the majority of cases will be a 100% subsidiary or sub-trust of the Fund. All borrowings and liabilities (with the exception of the likely tax liability) associated with each material acquisition/development will therefore occur at the SPV level.
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Investors were thus advised that all funding for development projects carried out through ADF2 would be obtained at the level of the sub-trusts, and that the liability for any borrowings would not be visited on Ashington Capital in its capacity as trustee of ADF2. This became an issue of no little contention with the superannuation fund investors, as I will explain in due course. Suffice it here to note that Ashington Capital did not honour the commitment made in the Information Memorandum insofar as the Information Memorandum represented that borrowings and liabilities (other than tax liability) would be confined to the sub-trust level. The structure of the trusts and sub-trusts also caused a potential problem in that regard (which the plaintiff contends explains references in various of the superannuation fund investors’ contemporaneous documents as to removal of the trustee – to which I refer in due course).
Establishment of ADF2 – 20 September 2007
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On 20 September 2007, ADF2 was constituted. Ashington Capital was appointed trustee. The units in ADF2 were held by the following: Sunsuper (as to $20 million), LUCRF (as to $15 million), Military Super (as to $15 million), Ashington Group (as to $2 million), HESTA (as to $25 million) and Ashington Capital as trustee for ADF Investment Trust (No 2) (as to $3 million), totalling $80 million. Between them the superannuation fund investors thus held 93.75% of the units of ADF2.
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As noted, the superannuation fund investors (HESTA, Military Super, Sunsuper and LUCRF) thus held the majority of the units in each of ADF and ADF2; and Ashington group entities held 10% of the units in ADF and 6.25% of the units in ADF2.
Establishment of Project X Hotel Trust – 20 September 2007
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The Project X Hotel Trust (sometimes referred to as the Double Bay Trust) was established by a Deed Poll in relation to the purchase of a property at Cross Street, Double Bay (the Sir Stamford Hotel) (Double Bay Property), for which development approval was sought for a mixed-use five-star boutique hotel of 60-80 rooms, 40-50 apartments and retail space (with a “fall-back” strategy to refurbish the building and convert it into strata apartments). The units in the Project X Hotel Trust were held as to 25% by Ashington Capital as trustee for ADF and 75% by Ashington Capital as trustee for ADF2. Ashington Capital was appointed trustee of the Project X Hotel Trust and it appointed Ashington Management as development manager.
Establishment of Noosa Trust – 12 March 2008
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The Noosa Trust was established by a Deed Poll dated 12 March 2008 in relation to the acquisition of a 50% interest in the Sheraton Noosa Hotel in Noosa (Noosa Property) (as part of a joint venture with the Valad Property Group (Valad) which held the other 50% interest in the property). There was a longer-term plan to demolish and rebuild the Noosa Property as a mixed-use project incorporating retail, a boutique hotel and apartments. Ashington Capital was appointed trustee of the Noosa Trust and appointed Ashington Management as the development manager of the trust.
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On 14 March 2008, Ashington Capital, Ashington Management and Trust Company Ltd entered into a Development Management Deed for the Noosa Trust (Ex M at 869).
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On 5 May 2008, Ashington Capital, as trustee of the Noosa Trust, entered into a Fee Agreement with Valad Funds Management Ltd (Valad Funds Management) (see Ex M at 19490). By this agreement, Ashington Capital was obliged to pay Valad Funds Management a fee of $20 million on the date five years after the completion of the acquisition of the Sheraton Noosa resort by a joint venture vehicle established by Ashington Capital and Valad “[i]n consideration of Valad introducing Ashington to the Project, by arranging for the issue of units in the Trust and shares in the Company to Ashington” (cl 2.1). The $20 million fee was not disclosed to the superannuation fund investors.
Establishment of Stonington Trust – 23 May 2008
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The Stonington Trust was established by Deed Poll on 23 May 2008 in relation to the purchase of a property at Glenferrie Road, Malvern, Victoria (the Stonington Property). Ashington Capital held 100% of the units in the Stonington Trust as trustee of ADF2. Ashington Capital was appointed trustee of the Stonington Trust and appointed Ashington Management as development manager.
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Ashington Capital issued an Information Memorandum in respect of the Stonington Trust. Consent had been obtained for the contemplated property development which included a master planned luxury residential development consisting of 14 apartments in a four-storey building, 12 duplex-style apartments over five mansion style dwellings and 50 townhouses and an existing heritage building known as “The Stables”.
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On the same day (23 May 2008), Ashington Capital, Ashington Management and Trust Company Ltd entered into a Development Management Deed for the Stonington Trust (Ex M at 1007).
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The vendor of the Stonington Property was Hamton JV (Malvern) Pty Ltd (Hamton). Ashington Capital, as trustee of the Stonington Trust, entered into a Contract of Sale with Hamton and The Trust Company Ltd (as Custodian) on 28 May 2008. That contract provided for a sale price of $46.5 million, a deposit of $4.65 million, and a settlement date of 3 November 2008. The contract of sale was then varied by a Deed of Variation of Contract dated 14 August 2008, pursuant to which, amongst other things, the purchase price was amended to $47,469,890 and the deposit varied to $4,546,989. A final set of variations to the contract was effected by means of a Second Deed of Variation of Contract dated 12 December 2008, pursuant to which, amongst other things, the deposit payable by Ashington Capital, as trustee of the Stonington Trust, was increased from $4,546,989 to $9,196,989 and the date for payment of the balance of the purchase price varied to 30 January 2009.
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In Timpar, a dispute concerning rights in real property and the operation of an easement, the question arose as to whether $1,000 could be characterised as nominal damages. At [111] Kennedy J (with whom Wheeler J agreed) said the following:
In the case of nominal damages, a token sum is awarded. The learned editor of McGregor on Damages noted that, in the United Kingdom, 5 pounds has become the norm for nominal damages — see Brandeis Goldschmidt & Co v Western Transport Ltd [1981] QB 864 at 874 and see also Michael Kellaway International Pty Ltd v Shark Bay Airport Pty Ltd, unreported; FCt SCt of WA; Library No 970604; 13 November 1997, in which nominal damages were fixed at $10. An award of $1,000 is clearly not an award of nominal damages, as that expression is understood … I would allow this ground of appeal and reduce the award to $10.
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In Stevens, McColl JA said the following regarding the award of $10,000 by way of nominal damages at [35]-[37]:
The amount the primary judge awarded for nominal damages of $10,000 can clearly not be characterised as a token award within the principles to which I have referred. Moreover, the matters her Honour took into account (at [73], set out at [8] above) in determining the quantum of her “nominal” damages award were appropriate to a case where a plaintiff was being awarded compensatory damages. They appeared, too, to be based on the premise that the plaintiff had proved that the breach of the Deed had caused her at least “stress”, a matter her Honour had already said (at [68]) was not caused by the appellant’s breach.
In my view, while the award of $10,000 damages involved a discretionary decision, in awarding that sum the primary judge misapprehended the principles concerning an award of nominal damages. Her assessment was wholly erroneous in a manner warranting appellate intervention: House v The King (1936) 55 CLR 499.
I would regard $100 an appropriate amount to award by way of nominal damages as a token of the appellant’s breach of the Deed. I would, accordingly allow the appellant’s second ground of appeal. …
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In Stevens at [68] Sackville AJA held that in Australia “the amounts awarded as nominal damages have not been uniform, but have always been minimal”. At [76] his Honour concluded:
While the primary judge was entitled to award the respondent nominal damages for the State’s breach of contract, her Honour fell into error in assessing nominal damages at $10,000. With respect, there is a clear inconsistency between the finding that the State’s breach caused no loss to the respondent and an award of damages based, in part at least, upon the humiliation and stress said to be sustained by the respondent as a consequence of the State’s conduct.
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Finally, in terms of the proposition that nominal damages may be a “peg” upon which costs are hung, McColl JA summarised the guiding principles in Stevens at [22] as follows:
… As Campbell J (as his Honour then was) explained in Mid-City Skin Cancer and Laser Centre v Zahedi-Anarak [2006] NSWSC 1149 at [47]–[52] “[i]n an action for breach of contract, if a plaintiff establishes liability, and obtains an order for payment of nominal damages, that plaintiff is usually not to be regarded as the successful party in the action”. His Honour repeated this passage of his reasons in his judgment in Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39 at [100] where it was approved by Handley AJA and myself. One aspect of this passage which warrants repetition is his Honour’s citation of Stephenson LJ’s explanation in Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394 at 401 that costs should be awarded against a plaintiff who has obtained an order for nominal damages because that award:
“... was not the event at which the plaintiffs were aiming. They were aiming at £82,500, and the mere fact that they ultimately got something—token or nominal damages—does not enable me to regard them as remaining successful plaintiffs.”
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This approach was followed by the Full Court of the Federal Court in Romero v Farstad Shipping (Indian Pacific) Pty Ltd (No 3) [2017] FCAFC 102 (Allsop CJ, Rares and McKerracher JJ) and Motium.
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In the present case I consider that nominal damages should be awarded for the breaches of contract by Ms Garrett and Mr Renauf and would set that amount at $100 for each defendant – on the basis that, although the loss cannot be adequately quantified or measured, it was a real loss of opportunity and the prospects of the future business foregone, hence the conduct of Ms Garrett and Mr Renauf in breaching their duties of good faith and honesty had serious, if not precisely quantifiable consequences, and should be reflected in a vindicatory award of damages. In this regard, I have had regard to the fact that most commonly the amount set in recent years for nominal damages appears to have been in the order of $100.
Proportionate liability
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Albany contends that, if it is found to be liable to pay equitable compensation to the plaintiff, then in the circumstances of the present case it is appropriate to mould the equitable relief so that Albany’s share of the compensation is less than the other defendants, other than Acorn. The basis of that submission is that, because (on the plaintiff’s case), Ms Garrett, Mr Renauf, PPB and Patersons are said to have owed fiduciary duties to Ashington Capital and Ashington Management, they are “more responsible” than Albany and Acorn (who are only alleged to have knowingly assisted Ms Garrett and Mr Renauf in breach of their fiduciary duties).
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Albany supports this principle by reference to the decision in George v Webb [2011] NSWSC 1608 (George v Webb). In that case, there was judgment for the plaintiff on a claim against the first and second defendants for equitable compensation for breach of a Quistclose trust and against the third defendant for accessorial liability in respect of that breach of trust. The first defendant (a firm of solicitors) had cross-claimed against the second defendant for misleading or deceptive conduct and equitable contribution. As was noted at [17], the cross-claim for equitable contribution was of relevance only if (as ultimately was found to be the case) the first defendant were to be found to be liable to the plaintiff and the finding of liability was such that this was not an apportionable claim under the Civil Liability Act 2002 (NSW) (Civil Liability Act).
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The claim for equitable contribution was considered at [337]-[354]. At [339], it was noted that, insofar as what was sought was contribution in equity, “a right to contribution generally arises where a wrongdoer pays more than his or her share of a judgment in satisfaction of a common obligation” but that there was debate as to whether that contribution could be other than equal. In summary: equitable contribution is available where two parties have an obligation or liability to make good the one loss (at [340]); the prima facie position is that in such a case each co-obligor should contribute equally (at [341]); the dicta of Kirby J in his dissenting opinion in Burke v LFOT Pty Ltd (2002) 209 CLR 282; [2002] HCA 17 (Burke v LFOT) at [119] suggests that the contribution of co-obligors may be apportioned in a “just and proportionate way” which may mean in unequal portions (at [343]-[344]); there are observations in other cases also favourable to the possibility that a court may apportion the contribution of co-obligors in unequal portions; however, that is a rare case (at [345]-[351]); in the article by Alison Gurr, “Accessory Liability and Contribution, Release and Apportionment” (2010) MULR 34, it was suggested that “there is some scope to argue for a proportionate approach to determining contribution claims involving accessories on the grounds that the equal contribution principle developed out of different relationships” and that the general rule (that each co-obligor should contribute equally) is a “rebuttable presumption” (at [352]).
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In that case there was no need to determine the issue as to equitable contribution as I found a liability on the part of the second defendant to indemnify the first defendant for the full amount of the loss on the basis that this was caused by reliance on his misleading or deceptive representation. However, I indicated that had the issue of equitable contribution arisen, I would have applied the principle that the loss should be apportioned pro-rata (at [354]).
Patersons supplementary submissions – equitable contribution
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Patersons says that the above analysis undoubtedly would be relevant had any of the defendants (including Albany) in fact brought a claim for equitable contribution against any of the other defendants in these proceedings. However, there are presently no such claims. In those circumstances, it is anticipated by Patersons that the plaintiff will submit that George v Webb is not authority for the proposition that, in the absence of pleaded claims for equitable contribution, the Court can mould relief in such a way that the defendants are liable to the plaintiff for unequal proportions of any equitable compensation ordered in amounts less than the full amount of the compensation awarded, and that, rather, the liability of the defendants should be joint and several. It is said by Patersons that whether relief could be moulded in the manner suggested by Albany would also be a further open question, even if claims for equitable contribution had been made. In reply, Albany submits that the Court is so empowered, irrespective of any pleading issue. Albany says its submission is made in reliance on the general equitable principles applicable to claims for equitable compensation. It says that while the principles of apportionment in the context of equitable contribution claims may inform how the Court ought to mould the relief in the present case, it is the Court’s general discretion upon which Albany here relies.
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Patersons says that there would seem to be a difference in principle and practical effect between apportioning contributions amongst the defendants according to principles of equitable contribution and moulding equitable relief so that the plaintiff is only entitled to pursue particular defendants for lesser amounts. At the same time, it is said that if there were real doubt as to whether equitable contribution was available in principle in these circumstances, this would tend to support the existence of a discretionary power to fashion equitable relief broadly along the lines of relative responsibility suggested by Albany.
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Patersons goes on to say that, even in the absence of claims for equitable contribution, it is not necessarily the case that the liability of errant fiduciaries and their knowing assistants should in all cases be joint and several, referring to the decision of the Full Federal Court (Finn, Stone and Perram JJ) in Grimaldi v Chameleon at [553] where it was said that there “are subsisting uncertainties as to whether and/or when the liabilities of the knowing assistant or recipient are only several, or are joint and several, with those of the delinquent fiduciary or trustee”.
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Reference was made in that context to the decision of Stevenson J in Edgewater Homes Pty Ltd v Donohoe [2019] NSWSC 44 at [22]ff. I do not here set out the passages from his Honour’s decision which I have had cause recently to consider in Earth Civil. The parties had there proceeded on the assumption that a defaulting fiduciary and an accessory to that default are jointly and severally liable. His Honour had referred to this as a vexed question but did not there need to resolve it because even if the general rule is that the liability of a knowing assistant or recipient to compensate the victim is merely several with that of the errant fiduciary, there is an exception where the fiduciary and the assistant acted “in concert to secure a mutual benefit” (see Grimaldi at [558]).
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Patersons says that, in the present case, there may be a need to “resolve this vexed question” because, at least insofar as Patersons is found to have knowingly assisted Ms Garrett and/or Mr Renauf’s breach of fiduciary duty, there cannot necessarily be reliance on the exception where the fiduciary and the assistant acted “in concert to secure a mutual benefit”. It is noted that Patersons did not receive, or more pertinently stand to receive, any benefit from the alleged activities of the “Consortium” (as that term is used in the plaintiff’s pleading). Patersons is said to be in a different position to the other defendants in that respect. On the plaintiff’s case, all of the other defendants stood to benefit from the alleged activities and the ultimate transaction. As submitted, Patersons by contrast stood to lose a substantial prospective benefit.
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Reference is made by Patersons in this context also to what was said in Grimaldi at [559]. Applying that reasoning to the present case, Patersons says that, in the event that Ms Garrett and Mr Renauf are found to have breached the alleged fiduciary duties they owed to Ashington Capital and/or Ashington Management, and Patersons (alone or with one or more of the other defendants) knowingly assisted in those breaches, the liability of Patersons may be several from at least that of the primary wrongdoers (Ms Garrett and Mr Renauf), with the result that any order for equitable compensation might only be ordered against those errant fiduciaries alone (and they would be left separately to pursue whatever rights to equitable contribution they may have against other defendants found to be liable if they first discharged their liability to the plaintiff). (Albany adopts Patersons’ submission in relation to the defendants’ liability being several only.)
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I interpose to note that at [263] in George v Webb, by reference to New Cap Reinsurance Corporation Ltd v General Cologne Re Australia Ltd [2004] NSWSC 781 at [34] per Young CJ in Eq (as his Honour then was) where his Honour referred to the observation in Ford and Lee “that the accessory is jointly and severally liable with the principal malefactor to pay the amount of equitable compensation required to restore the trust fund”. I noted that accessorial liability for knowing receipt/assistance rendered the third party jointly and severally liable with defaulting trustees and fiduciaries to pay equitable compensation for any loss suffered by the beneficiaries as a result of the breach. However, that issue was not the subject of considered submissions before me (and did not ultimately arise for consideration). Having since then considered in some detail the issues raised in what Stevenson J has referred to as a vexed question, I concluded that the liability was in fact several (subject to the two exceptions in Grimaldi) (see Earth Civil). I remain of that view.
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Returning to the issue at hand, Patersons noted that the result might depend on the characterisation of the facts and the findings as to whether Patersons itself owed a fiduciary duty to Ashington Capital and Ashington Management that it breached as alleged. Further, it is submitted that, even if Albany’s approach were accepted as consistent with principle and embraced, whether it would lead to the asserted conclusion that Patersons is “more responsible” than Albany and Acorn would also turn on the basis for Patersons’ accessorial liability. Patersons says that if that liability were only on the basis of Mr Doherty’s limited actions in rearranging a previously scheduled meeting with Mr Routley then arguably Patersons’ responsibility vis-à-vis Albany and Acorn would be very different to that postulated in [14] of Albany’s written closing submissions.
Acorn’s supplementary submissions on equitable contribution
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Acorn contends that it is open to the Court in a case such as this to mould relief so that the share of any equitable compensation to be paid by a defendant reflects that defendant’s proportionate responsibility for the loss. It bases this submission on the cardinal principle that “the remedy must be fashioned to fit the nature of the case and the particular facts” citing Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 at 559 per Mason CJ, Brennan, Deane, Dawson and Gaudron JJ. It is noted that in Cole v Miles [2002] NSWCA 150, Heydon JA, sitting in the Court of Appeal as his Honour then was (with whom Spigelman CJ and Hodgson JA agreed) said (at [63]):
Equitable remedies, including the remedy of equitable compensation, have a flexible character … The remedial response can vary very considerably depending on the circumstances: it turns on what the wrongdoer did at the time of the wrongdoing … And the remedial response is also controlled by the need to avoid injustice even to the wrongdoer.
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Acorn notes that in the context of equitable contribution, the relevant principle is that “persons who are under co-ordinate liabilities to make good one loss … must share the burden pro rata” (citing Albion Insurance Co Ltd v Government Insurance Office (NSW) (1969) 121 CLR 342; [1969] HCA 55 (Albion Insurance) at 349-350 per Kitto J; HIH Claims Support Ltd v Insurance Australia Ltd (2011) 244 CLR 72; [2011] HCA 31 at [36] per Gummow ACJ, Hayne, Crennan and Kiefel JJ. Acorn notes that, usually, liability will be apportioned between such persons equally, and unequal proportionate contribution will not be ordered but it is submitted that there is scope in the Court’s discretion to depart from that general rule. Acorn accepts that the scope to do so is not settled in cases where no statutory apportionment scheme applies (referring to the discussion in George v Webb at [337]-[354]); and it accepts that departures from the general rule of equal contribution will not be taken lightly or in an unprincipled manner. Nevertheless, Acorn says that what underpins equitable compensation is natural justice (referring to Lavin v Toppi (2015) 254 CLR 459; [2015] HCA 4 at [45] per French CJ, Kiefel, Bell, Gageler and Keane JJ, citing Friend v Brooker at [38]-[39]; Burke v LFOT at [22] per Gaudron ACJ and Hayne J). It is said that where the level of responsibility differs, that difference ought to be reflected in the burden of the remedy (and hence that where the amount of liability differs, contribution may be ordered proportionately to that liability (referring to Michael Wilson & Partners Ltd v Emmott [2019] NSWSC 218 at [40] per Ball J).
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However, Acorn says that the question is not one of equitable contribution in this case (since a right to equitable contribution arises when liability to pay more than one’s share arises or such payment is made, citing Albion Insurance at 351 per Kitto J). Acorn says that the submission that the Court should mould any orders for equitable compensation so as to reflect the different proportions of responsibility and liability at issue here invokes the Court’s general discretion to fashion equitable remedies to fit the circumstances and facts of the case. It is said that this may assume particular importance in a case involving defaulting fiduciaries and knowing assistants, given that it might be doubted whether equitable contribution is available between such parties (referring to Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [106] per Gummow ACJ, Hayne, Crennan and Bell JJ; DIF111 – Global Co-Investment Fund LP v Babcock & Brown International Pty Ltd [2019] NSWSC 527 at [185] per Ball J).
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Acorn submits that one should be slow to conclude that there is no power in equity to order that equitable compensation be paid by way of proportionate, yet unequal, shares by defendants to proceedings.
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It is noted by Acorn that it has been held that a claim for equitable contribution arising from the delivery of a judgment against two or more defendants does not in fact accrue until the delivery of judgment (referring to Trade Practices Commission v Manfal Pty Ltd (No 3) (in liq) (1991) 33 FCR 382 at 385 per Lee J; and GIO Finance Ltd v Cockburn [2000] NSWSC 362 at [41]-[42] per Foster AJ). Acorn submits that similar considerations should rule here.
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In the present case, to the extent that it might be asserted by the plaintiff that Acorn has not pleaded a basis on which to raise an argument that the Court should fashion the remedy of equitable compensation to fit the circumstances of this case, Acorn relies on [305] of its defence. Acorn says (and PPB agrees) that the application of the relevant principles to determine the appropriate proportions between defendants can await the findings upon judgment.
Plaintiff’s supplementary submissions as to proportionate liability in equity
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The plaintiff expresses no view on the question of equitable contribution, though accepts that it may have been relevant to these proceedings if the defendants had issued cross-claims for contribution or indemnity as between themselves (and, as Albany notes, subject to the principles set out by White J, as his Honour then was, in McNally v Harris (2008) 1 ASTLR 549; [2008] NSWSC 659 (McNally v Harris) at [148]).
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The plaintiff submits that the (obiter) observations made in George v Webb provide no support for the proposition that equity’s power to mould relief extends to applying the principle of proportionate (rather than solidary) liability to equitable compensation for the plaintiff’s loss as between erring fiduciaries and those found liable as accessories. The plaintiff points out that I there expressed no views on the question of the power to “mould relief” as between plaintiff and defendant; and that the context in which those remarks arose was solely that of claims for contribution between defendants. The plaintiff says that Albany’s submission elides the critical distinction between the proposition that contribution between defendants may be approached on a pro rata basis and a proposition (for which the plaintiff says there is no support in those reasons) that the Court has the discretion to disregard the principle of solidary liability between the plaintiff and the defendants, or at least between the plaintiff and Albany.
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The plaintiff says that there was no suggestion there that equity might, as a matter of discretion in moulding relief, modify this position as between plaintiff and defendant (rather than as between defendants), noting the consideration I had later given in the reasons to whether the proportionate liability provisions in Part IV of the Civil Liability Act might have that effect and the reference (at [324]) to what was said by Barrett J, as his Honour then was, in Reinhold v New South Wales Lotteries Corporation (No 2) (2008) 82 NSWLR 762; [2008] NSWSC 187 at [31]-[32].
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The plaintiff says that Albany has not pleaded a defence based on these provisions, in circumstances where such a defence would need to be pleaded (see also Ucak v Avante Developments [2007] NSWSC 367 at [33] per Hammerschlag J). It is submitted that if Albany wished to assert a pro rata liability it could only do so via a cross-claim against the other defendants, and that would not affect its liability to the plaintiff for the whole of the plaintiff’s loss. In reply, Albany says that this claim is reflected in [291(e)] of Albany’s defence (that Ashington Capital and Ashington Management does not have clean hands and that the relief sought by the plaintiff should, in the discretion of the Court, be refused or reduced so as to do equity between the parties) and the Court is empowered to mould the relief accordingly.
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The plaintiff further says that principles of equity are not to be applied at a high level of abstraction by reference to general maxims, nor is the power of the Court to mould relief a power to be wielded at large (reference being made to Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57 at [20] per Gleeson CJ, McHugh, Gummow, Hayne, and Heydon JJ; and George v Children’s Court of New South Wales (2003) 59 NSWLR 232; [2003] NSWCA 389 at [44] per Ipp JA (with whom Sheller and McColl JJA agreed) citing Jackson v Sterling Industries Ltd (1987) 162 CLR 612; [1987] HCA 23 at 620-621 per Brennan J). It is noted that equity’s power to mould relief must be guided by principle and authority just as any other application of equitable doctrine.
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In that regard, the plaintiff says that Albany has not cited any authority for the proposition that the principle of solidary liability with respect to equitable compensation for the same loss could be reversed by an exercise of the court’s discretion in fashioning relief; that the authority cited unambiguously affirms the orthodox position in this respect; and that absent the application of the statutory provisions such as Part IV of the Civil Liability Act, which is not here suggested, this submission of the sixth defendant fails in limine.
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The plaintiff submits that, having failed to plead the defence to the plaintiff’s claim for equitable compensation, Albany ought in any event now to be prohibited from doing so. It is noted that r 14.14(2)(a) of the UCPR requires that a defence must plead “that, if not pleaded specifically, may take the opposite party by surprise”. The plaintiff says that if such a defence were to be pleaded, the material facts upon which it is alleged that the liability of Albany is less or distinct from that of the other defendants would have needed to have been identified; and that if that were done, the entire landscape of the hearing would likely have been altered (in particular, the other defendants may well have made different decisions about calling evidence). It is said that this is irremediable prejudice to the plaintiff.
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In reply, Albany notes that, when giving judgment, such orders may be made or remedies granted as the nature of the case requires, whether or not the relief was pleaded or there was compliance with r 6.12(1) of the UCPR, provided that there has been procedural fairness. Albany says that it made this particular submission in its closing submissions served on 24 March 2021; that all parties have had a chance to respond to it; and that no prejudice has been identified. Albany thus says that any complaint about the absence of pleaded claims goes nowhere.
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Albany says that that general discretion comes from the principles applicable to the assessment and calculation of equitable compensation, which are still developing. It is noted that there are still open questions in Australia about “contributory fault” in the assessment of equitable compensation, the availability of equitable contribution between defaulting fiduciaries and knowing assistants, and the approach to issues of causation. It is said that none of the defendants has identified a single authority which concludes that this cannot be done in the appropriate case. Albany submits that its approach reflects the long-standing equitable principles applicable to a claim for equitable compensation.
Determination – proportionate liability
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The issue of contribution does not arise on the findings I have made. Had it arisen it would be relevant to note that in Michael Wilson & Partners Ltd v Emmott [2021] NSWCA 315, the Court of Appeal (Brereton JA, with whom Leeming and Emmett AJA agreed, each contributing their own reasons to the discussion of equitable contribution) recently considered the principles applicable to equitable contribution claims. Their Honours there made clear (see at [55]-[63]; [121]), having noted that the liabilities of the “knowing assistants” did not necessarily coincide in either nature or quantum with the liability of the defaulting fiduciary (see at [63]), that persons liable as knowing assistants in a dishonest breach of trust would not be entitled to claim contribution (referring to McNally v Harris at [150]-[152] per White J, as his Honour then was). In the present case, had the respective defendants been liable as knowing assistants in the alleged breaches of fiduciary duty that would suffice to preclude a claim for equitable contribution between them. In those circumstances, I do not consider that the capacity of equity to mould relief as appropriate so as to reach an outcome where the defendants are not equally liable is of great assistance (and I am concerned that, as between the various defendants, there was not a full opportunity to address submissions on this issue) but in any event the issue does not arise in light of the findings made above.
Costs
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The various defendants sought an opportunity to make submissions as to costs after judgment. Directions will be made to permit that to happen.
Orders
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For the above reasons I make the following orders:
Order that each of the second and third defendants pay to the plaintiff nominal damages (of $100 each) for breach of the obligations of good faith and honesty arising as an incident of the common law employment relationship between the said defendants and the respective Ashington group entities (Ashington Capital Pty Ltd and Ashington Management Pty Ltd).
Otherwise dismiss the plaintiff’s claims in the third further amended statement of claim (with costs in the case of the claims against the first, third, fourth, fifth and sixth defendants).
Direct the parties to file written submissions on costs within 21 days with a view to costs being determined on the papers (but indicating whether an oral hearing is considered necessary for the costs submissions (and if so why)).
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Decision last updated: 07 February 2022
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