Investa Properties Pty Ltd v Nankervis (No 7)

[2015] FCA 1004

FEDERAL COURT OF AUSTRALIA

Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004

Citation:

Investa Properties Pty Ltd v Nankervis (No 7) [2015] FCA 1004

Parties:

INVESTA PROPERTIES PTY LTD (ACN 084 407 241) and INVESTA RESIDENTIAL GROUP PTY LTD (ACN 098 527 390) v ASHLEY COLIN NANKERVIS, ADAM KIMBERLY BARCLAY and OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)

File number:

QUD 231 of 2011

Judge:

COLLIER J

Date of judgment:

10 September 2015

Catchwords:

EQUITY – whether senior employee owed fiduciary duties to property developer employer – fiduciary relationship – principles in Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 considered – duty to avoid conflict of duty and interest – principles in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 and ABN Amro Bank NV v Bathurst Regional Council (2014) 309 ALR 445 considered – whether properties sold at undervalue – where senior employee allegedly misrepresented nature of development site to property developer employer – where senior employee allegedly failed to inform property developer employer of design work to flatten development site – where senior employee allegedly failed to disclose agreement with third party and the individual real estate agent acting on behalf of employer – where senior employee allegedly performed services for third party purchaser of property outside employment relationship – where senior employee allegedly knew of real estate agent purchasing property subject of agency

EQUITY – whether sales office moved without authority – whether removal of sales office by senior employee constituted breach of fiduciary duty or breach of term of employment

EQUITY – nature of fiduciary relationship between real estate agent and principal – whether limited to obligation of disclosure – where applicants claimed against real estate agency company and individual real estate agent – potential liability of both real estate agency company and individual real estate agent where property sold to company controlled by spouse of individual real estate agent – attribution of knowledge of individual real estate agent to real estate agency company – alleged fraud by individual real estate agent on real estate agent company – whether individual real estate agent breached duty of full and frank disclosure and duty of good faith

EQUITY – principles in Barnes v Addy (1874) LR 9 Ch App 244 – accessorial liability – “knowing assistance”

REAL PROPERTY – whether applicants failed to comply with regulations 7(1), 11, 14 and 16 Property Agents and Motor Dealers (Property Developer Practice Code of Conduct) Regulations 2001 (Qld) (the PAMDA Regulations) – where applicant and real estate agency company entered into an agreement pursuant to Form 22a Property Agents and Motor Dealers Act 2000 (Qld) (PAMDA) in respect of one property but not the other property – whether individual real estate agent or real estate agency company owed obligations in respect of residential property where there was an absence of formal agreement – where the PAMDA Regulations similar to obligations imposed in equity

AGENCY – nature of fiduciary relationship between real estate agent and principal – whether real estate agent was in fiduciary relationship with alleged principal when not appointed pursuant to Form 22a PAMDA in respect of one property – where individual real estate was signatory to the agreement – whether real estate agency company breached express and implied terms of agreement – where individual real estate agent was director and employee of real estate agency company – s 133 and s 134 PAMDA – principles in Yong Internationals Pty Ltd v Gibbs [2011] QCA 161 considered – breach of duty by individual estate agent to real estate agency company where failure to disclose that spouse of individual real estate agent purchased client’s property – Real Estate Agency Practice Code of Conduct

EVIDENCE – expert valuation evidence – properties sold during global financial crisis – Court not obliged to accept expert evidence – methodology – weight attributed by Court to valuation opinion of third party – credibility of witnesses

CORPORATIONS – s 182 and s 183 Corporations Act 2001 (Cth) – whether senior employee owed duties to property developer employer in respect of sale of two properties – s 1317H – compensation under Corporations Act – authority – directing mind and will of company

Legislation:

Corporations Act 2001 (Cth) ss 182, 183, 1317H
Land Titles Act 1994 (Qld) s 81
Property Agents and Motor Dealers Act 2000 (Qld) ss 133, 134, 134(1), 134(3), 140, 154
Valuation of Land Act 1944 (Qld) s 93
Property Agents and Motor Dealers (Property Developer Practice Code of Conduct) Regulations 2001 (Qld) regs 7(1), 11, 14, 16
Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 (Qld) Pt 2, ss 2(1), 4, 6, 7, 8, 9, 10, 11, 12, 14, 17, 21

Cases cited:

ABN Amro Bank NV v Bathurst Regional Council (2014) 309 ALR 445 considered
Arcus Shopfitters Pty Ltd v Planning Commission (WA) [2002] WASC 174 cited
Attorney-General v Blake [2001] 1 AC 268 cited
Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd (2015) 318 ALR 302 cited
Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd (2015) 228 FCR 225 cited
Australian Securities and Investments Commission v Australian Property Custodian Holdings Limited (Receivers and Managers appointed) (in liquidation) (Controllers appointed) (No 3) [2013] FCA 1342 cited
Australian Securities and Investments Commission v Mariner Corporation Limited (2015) 106 ACSR 343 cited
Bacnet Pty Limited (ACN 115 594 075) v Lift Capital Partners Pty Limited (in liquidation) (2010) 266 ALR 666 cited
Bank of New South Wales v Adams [1984] 1 NSWLR 285 cited
Barnes v Addy [1870] LR 9 Ch App 244 cited
Bayley and Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 cited
Beach Petroleum NL v Johnson (1993) 43 FCR 1 cited
Blackmagic Design Pty Ltd v Overliese (2011) 276 ARR 646 cited
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 cited
Boardman v Phipps [1967] 2 AC 46 cited
Bray v Ford [1896] AC 44 cited
Breen v Williams (1996) 186 CLR 71 cited
Brickenden v London Loan & Saving [1934] 3 DLR 465 cited
Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 cited
Canadian Aero Service Ltd v O’Malley (1973) 40 DLR (3d) 371 cited
Chan v Zacharia (1984) 154 CLR 178 cited
Chew v The Queen (1992) 173 CLR 626 cited
Chirnside v Fay [2007] 1 NZLR 433 cited
Colour Control Centre Pty Limited v Ty [1995] NSWSC 96 cited
Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 cited
Commonwealth Bank of Australia v Barker (2014) 312 ALR 356 cited
Concut Pty Ltd v Worrell (2000) 176 ALR 693 cited
Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 cited
Cook v Deeks [1916] 1 AC 554 cited
Currabubula Holdings Pty Ltd v DRE Downtown Real Estate Pty Ltd [1998] 135 NSW 47 cited
Dalecoast Pty Ltd v Guardian International Pty Ltd [2003] WASCA 142 cited
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 cited
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 cited
Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413 cited
Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 cited
Furs Ltd v Tomkies (1936) 54 CLR 583 cited
Garraway v Territory Realty Pty Ltd [2010] FCAFC 9 cited
Gathergood v Blundell & Brown Ltd [1991] 1 NZLR 405 cited
Gonsalves v Debreczeni [1998] NSWSC 588 cited
Grantwell Pty Ltd v Franks (1993) 61 SASR 390 cited
Griffiths & Beerens Pty Ltd v Duggan (2008) 66 ASCR 472 cited
Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 considered
Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 cited
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 considered
Huang v Wang [2015] NSWSC 510 cited
Hydrocool Pty Limited v Hepburn (No 4) (2011) 279 ALR 646 cited
Investa Properties Pty Ltd v Nankervis (No 2) [2013] FCA 468 cited
John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 206 ALR 462 cited
K & S Corporation Ltd v Sportingbet Australia Pty Ltd (2003) 86 SASR 312 cited
Kelly v Cooper [1993] AC 205 cited
Maguire & Tansey v Makaronis (1997) 188 CLR 449 cited
McCann v Switzerland Insurance (2000) 203 CLR 579 cited
McKenzie v McDonald [1927] VLR 134 cited
McNamara v Flavel (1988) 13 ACLR 619 cited
Minlabs Pty Ltd v Assaycorp Pty Ltd (2001) 37 ACSR 509 cited
Moffa v Newmark Commercial Pty Ltd (No 2) [2003] SADC 148 cited
Nicholls v Michael Wilson and Partners Ltd [2012] NSWCA 383 cited
Nottingham University v Fishel [2000] ICR 1462 cited
Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd (2011) 285 ALR 63 cited
Orchard Holdings Pty Ltd v Paxhill Pty Ltd as Trustee for Paxhill Trust Trading as Property People [2012] WASC 271 cited
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 cited
Pedersen v Larcombe [2008] NSWSC 1362 cited
Pilmer v Duke Group Ltd (In Liq) (2001) 207 CLR 165 cited
Power v Ekstein [2009] NSWSC 130 cited
Premium Real Estate Ltd v Stevens [2009] 2 NZLR 384 cited
QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 QdR 41 cited
R v Byrnes (1995) 183 CLR 503 cited
Re Coomber [1911] 1 Ch 723 cited
re Fitzroy Bessemer Steel etc Co Ltd (1884) 50 LT 144 cited
re Hampshire Land Co Ltd [1896] 2 Ch 743 cited
Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191 cited
Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378 cited
Registrar of Aboriginal and Torres Strait Islander Corporations v Ponto (2012) 208 FCR 346 cited
Robins v Incentive Dynamics Pty Ltd (in liq) (2003) 45 ACSR 244 cited
Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 cited
Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143 cited
Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013) 295 ALR 760 cited
Sultana Investments Pty Ltd v Cellcom Pty Ltd [2009] 1 QdR 589 cited
Tesco Supermarkets Ltd v Nattrass [1972] AC 153 cited
The Bell Group Ltd (In Liq) v Westpac Banking Corporation [2001] WASC 315 cited
Turner v Sigglekow [2010] NZHC 1825 cited
Tyler v Thomas (2006) 150 FCR 357 cited
University of Western Australia v Gray (2009) 259 ALR 224 cited
Warman International Ltd v Dwyer (1995) 182 CLR 544 cited
Weldon and Co v Harbinson [2000] NSWSC 272 cited
Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295 cited
Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) (2012) 301 ALR 1 cited
Yong Internationals Pty Ltd v Gibbs [2011] QCA 161 considered

Articles and Texts:

Austin RP and Ramsay IM, Ford, Austin & Ramsay’s Principles of Corporations Law (16th ed, LexisNexis Butterworths, 2015)
Dal Pont GE, Law of Agency (3rd ed, LexisNexis Butterworths, 2014)
Dal Pont GE, Equity and Trusts in Australia (6th ed, Lawbook Co, 2015)
Davies P, Accessory Liability (Hart Studies in Private Law, 2015)
Finn PD, Fiduciary Obligations (Law Book Company, 1977)
Austin RP, “Constructive Trusts” Chapter 11 in Finn PD, Essays in Equity (The Law Book Company Limited, 1985)
Batty R, “Examining the Incidence of Fiduciary Duties in Employment” (2012) 18 Canterbury Law Review 187
Finn PD, “Contract and the Fiduciary Principle” (1989) 12 UNSW Law Journal
Shankar T, “The Place of the ‘Dishonest and Fraudulent Design’ Requirement in Accessorial Liability for Assisting in a Breach of Trust or Fiduciary Duty” (2014) 40(3) Monash University Law Review 793

Date of hearing:

28 February, 2-6 June, 10-13 June, 16-19 June, 28 July, 18-22 August, 29-30 August, 2-3 October, 7-9 October, 14 October, 16-17 October 2014

Place:

Brisbane

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

415

Counsel for the First and Second Applicants:

Mr D Murr SC with Ms M Painter SC

Solicitor for the First and Second Applicants:

Lander & Rogers Lawyers

Counsel for the First Respondent and Cross-Claimant:

The First Respondent appeared in person

Counsel for the Second Respondent and Cross-Claimant:

The Second Respondent appeared in person

Counsel for the Fourth Respondent and Cross-Claimant:

Mr AP Collins with Mr C Curtis

Solicitor for the Fourth Respondent and Cross-Claimant:

Carter Newell Lawyers

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 231 of 2011

BETWEEN:

INVESTA PROPERTIES PTY LTD (ACN 084 407 241)
First Applicant

INVESTA RESIDENTIAL GROUP PTY LTD (ACN 098 527 390)
Second Applicant

AND:

ASHLEY COLIN NANKERVIS
First Respondent

ADAM KIMBERLY BARCLAY
Second Respondent

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Fourth Respondent

and between:

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Cross-Claimant

and:

ADAM KIMBERLY BARCLAY
Cross-Respondent

AND BETWEEN:

ASHLEY COLIN NANKERVIS
Cross-Claimant

AND:

ADAM KIMBERLY BARCLAY
First Cross-Respondent

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Second Cross-Respondent

AND BETWEEN:

ADAM KIMBERLY BARCLAY
Cross-Claimant

AND:

VERO INSURANCE LIMITED (ABN 48 005 297 807)
Cross-Respondent

AND BETWEEN:

ADAM KIMBERLY BARCLAY
Cross-Claimant

AND:

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Cross-Respondent

AND BETWEEN:

ADAM KIMBERLY BARCLAY
Cross-Claimant

AND:

ASHLEY COLIN NANKERVIS
Cross-Respondent

JUDGE:	COLLIER J
DATE OF ORDER:	10 SEPTEMBER 2015
WHERE MADE:	BRISBANE

IN RESPECT OF THE AMENDED APPLICATION FILED ON 17 OCTOBER 2013 THE COURT DECLARES THAT:

1.Ashley Nankervis breached his fiduciary duties to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, in respect of Lot 191 and Lot 170 (as defined in the attached reasons for judgment).

2.Ashley Nankervis breached his statutory obligations to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, under section 182 and section 183 of the Corporations Act 2001 (Cth) in respect of Lot 170.

3.Adam Barclay breached his fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 191.

4.Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 breached its fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 191.

5.Otherwise:

(a)Ashley Nankervis did not breach his statutory obligations to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, under section 182 and section 183 of the Corporations Act 2001 (Cth), in respect of Lot 191;

(b)Ashley Nankervis was not subject to, and did not breach, any fiduciary duties to either of the applicants in respect of the decommissioning and relocation of a sales office, formerly located on the Brentwood Site (as defined in the attached reasons for judgment);

(c)Ashley Nankervis was not subject to, and did not breach, any fiduciary duties or statutory obligations to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 191 or Lot 170;

(d)Adam Barclay was not subject to, and did not breach, any fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 170;

(e)Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 was not subject to, and did not breach, any fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 170;

(f)Adam Barclay was not subject to, and did not breach, any fiduciary duties to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, in respect of Lot 191 or Lot 170;

(g)Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 was not subject to, and did not breach, any fiduciary duties to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, in respect of Lot 191 or Lot 170.

AND THE COURT ORDERS THAT:

1.The cross-claim of Ashley Nankervis against Adam Barclay and Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 filed 15 November 2013 be dismissed.

2.The cross-claim of Adam Barclay against Ashley Nankervis filed 18 November 2013 be dismissed.

3.The cross-claim of Adam Barclay against Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 filed 15 December 2012 be dismissed.

4.The cross-claim of Adam Barclay against Vero Insurance Limited ABN 48 005 297 807 filed 15 December 2012 be dismissed.

5.The cross-claim of Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 against Adam Barclay filed 10 December 2012 be upheld.

6.Costs be reserved.

7.The matter be listed for further directions at 9.30 am on 21 October 2015 in respect of:

(a)remedies of the applicants under the amended application filed 17 October 2013;

(b)remedies of Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 in respect of its cross-claim filed 10 December 2012;

(c)costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION	QUD 231 of 2011

BETWEEN:

INVESTA PROPERTIES PTY LTD (ACN 084 407 241)
First Applicant

INVESTA RESIDENTIAL GROUP PTY LTD (ACN 098 527 390)
Second Applicant

AND:

ASHLEY COLIN NANKERVIS
First Respondent

ADAM KIMBERLY BARCLAY
Second Respondent

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Fourth Respondent

and between:

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Cross-Claimant

and:

ADAM KIMBERLY BARCLAY
Cross-Respondent

AND BETWEEN:

ASHLEY COLIN NANKERVIS
Cross-Claimant

AND:

ADAM KIMBERLY BARCLAY
First Cross-Respondent

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Second Cross-Respondent

AND BETWEEN:

ADAM KIMBERLY BARCLAY
Cross-Claimant

AND:

VERO INSURANCE LIMITED (ABN 48 005 297 807)
Cross-Respondent

AND BETWEEN:

ADAM KIMBERLY BARCLAY
Cross-Claimant

AND:

OLIVER HUME SOUTH EAST QUEENSLAND PTY LTD (ACN 128 863 230)
Cross-Respondent

AND BETWEEN:

ADAM KIMBERLY BARCLAY
Cross-Claimant

AND:

ASHLEY COLIN NANKERVIS
Cross-Respondent

JUDGE:	COLLIER J
DATE:	10 SEPTEMBER 2015
PLACE:	BRISBANE

REASONS FOR JUDGMENT

Overview of the proceedings

1. The claims in these proceedings arise from the sale of two parcels of land in south east Queensland, namely:

   ·“Lot 191”, which formed part of a residential property development called “Brentwood” or “Brentwood Site”, and which is located on Augusta Parkway at Bellbird Park, near the city of Ipswich in Queensland; and

   ·“Lot 170” (referred to at various times as the “Fossil Site”, “Brittains Road” and “The Outlook”).

2. The applicants, which are companies forming part of the Investa Property Group, claim that the two properties were sold at an undervalue as a result of the actions of:

   ·Mr Ashley Nankervis (the first respondent), a former senior employee;

   ·Mr Adam Barclay (the second respondent), an individual real estate agent who had an involvement in the sales; and

   ·Oliver Hume South East Queensland Pty Ltd (the fourth respondent) (“Oliver Hume SEQ”), the real estate agency company of which Mr Barclay was at material times director and general manager.

3. The details of the applicants’ claims against the respondents are set out in the amended application and the third version of the statement of claim, both filed on 17 October 2013. However, stated succinctly, the applicants claim that they have suffered losses in respect of the sales of Lot 170 and Lot 191 because Mr Nankervis and Mr Barclay, in breach of their respective duties to the applicants, and for their own benefit, caused those properties to be sold to entities with which they were associated, at an undervalue. Any liability of Oliver Hume SEQ in these proceedings arises solely because of the actions of Mr Barclay.

1. As is already clear, several iterations of the pleadings have been filed in these proceedings. Currently before the Court are the following applications:

   ·the amended application filed on 17 October 2013 (“amended application”);

   ·the statement of claim (version 3) filed on 17 October 2013 (“amended statement of claim”);

   ·a cross-claim brought by Mr Nankervis against Mr Barclay and Oliver Hume SEQ filed 15 November 2013;

   ·a cross-claim brought by Mr Barclay against Mr Nankervis filed 18 November 2013;

   ·a cross-claim brought by Mr Barclay against Oliver Hume SEQ filed 15 December 2012;

   ·a cross-claim brought by Mr Barclay against Vero Insurance Limited ABN 48 005 297 807 filed 15 December 2012; and

   ·a cross-claim brought by Oliver Hume SEQ against Mr Barclay filed 10 December 2012.

2. In the circumstances it is both logical and efficient to deal with the claims of the applicants against the respondents before turning to the cross-claims in this case.

3. Finally, I note that the applicants have elected to claim equitable compensation because of the sale of the relevant properties at an undervalue, rather than claiming an account of profits. To that extent, it is necessary that I should consider whether Lot 191 and Lot 170 were sold at an undervalue. An estimate of equitable compensation payable (if any), as well as any award of costs is, however, an issue for consideration following further submissions from the parties.

   The parties

   The Investa Group

4. The Investa Property Group owns and manages real estate in Australia. “Investa Land” is a name used to refer to the sub-group of companies which manages property developments, and includes the two applicant companies. The first applicant, Investa Properties Pty Ltd (“Investa Properties”), acted as the land development division of the Investa Property Group (and in that capacity was also known and referred to as “Investa Land”). The second applicant, Investa Residential Group Pty Ltd (formerly known as Clarendon Residential Group Pty Ltd) (“Investa Residential”) is a wholly-owned subsidiary of Investa Properties and was the registered proprietor and vendor of the land forming the subject of these proceedings.

5. In the amended statement of claim, the applicants plead that for the purposes of carrying out land development, Investa Properties:

   a)        employed all staff of the Investa Property Group;
   b)        maintained offices and equipment;

   c)engaged architects, planners, engineers, other professional consultants, builders and contractors;

   d)provided or arranged finance for the purpose of acquiring and developing land;

   e)incorporated or acquired subsidiaries for the purposes of acquiring land at its direction, holding the legal title to land on its behalf, selling land at its direction, and remitting the proceeds of sale at its direction; and

   f)through its directors, officers and employees, implemented the policy decisions of Investa Property Group Holdings Pty Ltd and made all managerial level decisions relating to the acquisition, development and sale of land.

6. It is uncontentious that Investa Residential, at the direction of Investa Properties, was responsible for contracting with real estate agents in relation to the sale and marketing of the land the subject of these proceedings.

   Investa Land’s managers and employees

7. Investa Land’s operations were managed by a Group Executive, who at times material to these proceedings was Mr Lloyd Jenkins. As Group Executive, Mr Jenkins was responsible for approving the acquisition, sale and development of land or referring decisions to the Chief Executive Officer, depending on the amount of money involved. The general managers in New South Wales, Queensland, Victoria and Western Australia reported to Mr Jenkins as Group Executive. At various times, the Queensland general managers were Mr Mark Waters, Mr Gavin Stubbs, Mr Lloyd Jenkins (in addition to his responsibilities as Group Executive) and Mr Cameron Holt.

   Ashley Nankervis

8. The first respondent, Mr Ashley Nankervis, was employed by Investa Properties from around 5 April 2006 pursuant to a written contract of employment dated on or about 8 March 2006. Initially he was employed in the role of Development Manager and later as Senior Development Manager. Mr Nankervis was responsible for the overall management of the Brentwood Site and for signing off on all relevant “stage releases” of the Brentwood Site.

9. The applicants pleaded that Mr Nankervis was employed by the first applicant in a senior role between 5 April 2006 and 26 May 2010. These dates were not disputed by Mr Nankervis.

   Oliver Hume South East Queensland Pty Ltd and Adam Barclay

10. The fourth respondent, Oliver Hume SEQ, was a licensed real estate agency under the now-repealed Property Agents and Motor Dealers Act 2000 (Qld) (“PAMDA”) during the relevant period.

11. The second respondent, Mr Adam Barclay, was at material times a director and employee of Oliver Hume SEQ and a licensed real estate agent under PAMDA. In 2006, Mr Barclay became Oliver Hume SEQ’s general manager. In relation to both sites the subject of these proceedings, Mr Barclay was the primary contact in Oliver Hume SEQ in dealings with either or both of the applicants.

12. The roles of Oliver Hume SEQ and Mr Barclay so far as concerns the two properties were the subject of dispute. It is not in dispute that Oliver Hume SEQ was formally engaged in accordance with a “Form 22a - appointment of real estate agent” under PAMDA for a period of time in relation to the marketing and sale of Lot 191. It is equally common ground that no equivalent form was ever completed by the parties in relation to Lot 170.

    The properties

    Lot 191

13. Lot 191 is the smaller of the two lots of land the subject of these proceedings. It is a 1,079 square metre parcel located within the Brentwood development, being part of the Stage 2A development of the Brentwood site.

14. On or about 16 July 2009, Investa Residential appointed Oliver Hume SEQ as a real estate agent using the PAMDA Form 22a. It was an exclusive agency appointment, relating to Stage 2A (that is, Lots 173 to 215) and Stage 2B (Lots 216 to 249) of the Brentwood Site.

15. On or about 21 October 2009, a delegated authority approval submission for the development and sale of Stage 2A lots at the Brentwood Site was prepared by Mr Damian Long, and recommended by Mr Nankervis and others, in terms recommending that lots be sold at an average lot price of $194,000. Specifically, Mr Long’s submission recommended a sale price of Lot 191 of $210,000, being the listed price of $225,000 less a rebate of $15,000.

16. On or about 23 December 2009, Investa Residential entered a Deed of Put and Call giving call rights to Queensland Property Centre Pty Ltd (“Queensland Property Centre”) for the purchase of Lot 191 with an exercise price of $195,000. In that deed, Queensland Property Centre was described as “the grantee”.

17. Materially, the Deed of Put and Call executed by Investa Residential and Queensland Property Centre permitted the Call Option to be exercised by a nominee of the grantee. This in fact occurred. By contract of sale between Investa Residential and another entity, Spencer Projects Pty Ltd (“Spencer Projects”) dated 25 June 2010, Lot 191 was sold to the nominee, Spencer Projects, for a contract price of $290,000, settling on 28 June 2010.

18. It appears that Queensland Property Centre was a company under the control of Mrs Kym Barclay, the wife of Mr Adam Barclay. Further it appears that Spencer Projects was a company of which Mrs Barclay was initially the sole director and shareholder, however on the day of registration Mrs Barclay appointed her daughter, Ms Jaide Spencer Crosbie as sole director, and transferred to her all of the company’s shares.

19. The applicants submitted that they only retained $190,497.14 of the settlement monies and paid $96,000 to Queensland Property Centre pursuant to the terms of the Deed of Put and Call. The main allegation of the applicants in relation to Lot 191 is that it was sold at an undervalue and without full disclosure to a company owned and controlled by Mr Barclay’s wife, Mrs Barclay. The applicants’ case is that the true value of Lot 191 at the time of the deed was $290,000.

20. The applicants also say that Mr Nankervis and Mr Barclay took steps to subdivide Lot 191 without disclosing that they were doing so and that, as a result, a sale price was approved for the property which did not reflect its true value.

    Lot 170

21. Lot 170 was the larger of the two lots, being a 7.25 hectare parcel of land situated near the western boundary of the Brentwood Site. It is not in dispute that, in its raw state, the land was steep, and could be described as challenging for developers. It was sold as an en globo site, in that although it was intended for subdivision, it was sold as a single lot.

22. On or about 20 February 2009, Investa Residential entered into a deed of Put and Call, giving rights to a company, Two Eight Two Nine Pty Ltd (“Two Eight Two Nine”), with an exercise price of $1,454,545. A formal contract of sale was entered into between these parties on 25 June 2009. The sole shareholder of Two Eight Two Nine was Mr David Tonuri.

23. The applicants’ position in the amended application was that the value of Lot 170 at this time was $3 million. This position appeared to vary during the proceedings, such that the applicants claimed in the amended statement of claim that Lot 170 was worth $4 million. During the proceedings the applicants’ case was that the true value of Lot 170 was $4 million.

24. The applicants referred to two diagrams showing Lot 170 in its surrounding area, both before and after its subdivision.

25. The basis of the claims made by the applicants in respect of Lot 170 is that, at some time prior to 20 January 2009, Mr Nankervis and Mr Barclay entered into an agreement with Mr Tonuri pursuant to which Mr Nankervis and Mr Barclay would participate in and derive profits from the sale to Mr Tonuri or his nominee and the subsequent development of Lot 170. The existence of such an agreement is contested by Mr Nankervis and Mr Barclay.

    The sales office

26. The sales office owned by Investa Residential was located on the Brentwood Site. The applicants claim that in or around March 2010, it was removed and relocated to the site of a project owned by Mr Tonuri, at the instigation of Mr Nankervis, and that this was done without the authorisation of either applicant. The applicants claim that the cost of replacing the sales office is approximately $100,000.

27. The applicants seek relief against only Mr Nankervis in respect of the sales office.

    DETAILS OF THE APPLICANTS’ CLAIMS

28. The claims of the applicants against the respondents as set out in the pleadings may be summarised as follows.

    As against Mr Nankervis

29. In the amended application the applicants plead:

    1.        Against the first respondent, Ashley Colin Nankervis

    1.1.     In respect of the land known as Lot 191, Brentwood Site:

    (a)Mr Nankervis must account as a defaulting fiduciary to the applicants, Investa Properties and Investa Residential, for the value of Lot 191 at the time of sale. The value of the property was $290,000, but Investa Residential received only $195,000.

    (b)Alternatively, Mr Nankervis must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them, for the sale of Lot 191 at an undervalue.

    (c)Alternatively, Mr Nankervis must compensate Investa Properties pursuant to s 1317H of the Corporations Act 2001 (Cth). Pursuant to s 1317H(2), the damage suffered includes profits made by any person resulting from the contraventions of s 182 and 183 alleged (in paragraph 136 of the amended application), and includes the profit of $95,000 to Queensland Property Centre on completion of the sale to Spencer Projects.

    1.2.     In respect of the land known as Lot 170, Brentwood Site:

    (a)At the election of Investa Properties or Investa Residential or both of them, Mr Nankervis must account as a defaulting fiduciary to Investa Properties or Investa Residential or both of them for either:

    (i)Any profit he or any entity that was associated with him, or that he controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine Pty Ltd, or from the development or resale of Lot 170; or:

    (ii)The value of Lot 170 at the time of sale. The value of the property was $3,000,000 but Investa Residential received only $1,454,545.

    (b)Alternatively, Mr Nankervis must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them, for the sale of Lot 170 at an undervalue.

    (c)Alternatively, Mr Nankervis must compensate Investa Properties pursuant to s 1317H of the Corporations Act 2001. Pursuant to s 1317H(2), the damage suffered includes profits made by any person resulting from the contraventions of s 182 and 183 alleged (in paragraph 194 of the amended application).

    1.3.Further, Mr Nankervis must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Residential, for the decommissioning and relocation of a sales office, formerly located on the Brentwood site.

30. In the amended statement of claim, the applicants plead further, in summary:

    ·Investa Properties employed Mr Nankervis initially in the position of Development Manager and then in the position of Senior Development Manager (reporting to the Queensland General Manager) pursuant to a contract of employment signed by Mr Nankervis on 8 March 2006.

    ·Mr Nankervis’ duties included:

    (a)preparing financial and feasibility reports and reporting to internal management, including making recommendations on relevant matters;

    (b)project management including managing project negotiations and ensuring all contracts were accurately prepared and delivered in accordance with Investa Properties’ obligations;

    (c)managing all projects to ensure compliance with all relevant regulatory, legislative and corporate policy requirements and obligations;

    (d)managing land sales including tracing of land sales on a weekly basis;

    (e)managing project negotiations and ensuring the accurate preparation of contracts and liaising with and appointing contractors and planners on behalf of Investa Properties; and

    (f)approving and/or recommending sales prices for lots within the Brentwood site.

    ·By reason of the positions he held, the responsibilities he discharged, and the relationship between the applicants, Mr Nankervis was an employee of Investa Properties and owed fiduciary obligations to Investa Properties and Investa Residential.

    ·Mr Nankervis also owed obligations to Investa Properties pursuant to s 182 and s 183 of the Corporations Act 2001 (Cth) (“the Corporations Act”).

    ·From at least 19 October 2009 to 29 October 2009 Mr Nankervis and Mr Barclay were involved in taking steps to subdivide Lot 191 into two lots. This was before recommending to Investa Properties that Lot 191 be sold at $210,000 (after rebate), and without disclosing to Investa Properties or Investa Residential that he was involved in taking steps to subdivide Lot 191 into two lots.

    ·On or about 18 December 2009 Mr Nankervis approved the sale price in respect of a Deed of Put and Call for Lot 191 to Queensland Property Centre in the amount of $195,000, being $15,000 less than the price after rebate that Investa Properties had approved on 23 October 2009. Mr Barclay’s wife, Mrs Barclay, incorporated Queensland Property Centre on 21 October 2009, and for all intents and purposes, was the sole director and sole shareholder. At no time did Mr Nankervis disclose to Investa Properties or Investa Residential that Queensland Property Centre was owned and controlled by Mr Barclay’s wife.

    ·On 10 June 2010, Mrs Barclay incorporated Spencer Projects. On or about 18 June 2010, Mr Damian Long, another development manager employed by Investa, approved the sale price of Lot 191 to Spencer Projects as trustee for the Spencer Trust in the amount of $290,000. The relevant contract was executed on 25 June 2010 and the contract settled on 28 July 2010. At no time did Mr Nankervis disclose to Investa Properties or Investa Residential that Spencer Projects was owned and controlled by Mr Barclay’s wife.

    ·In respect of Lot 191, Mr Nankervis was in breach of s 182 and s 183 of the Corporations Act because, inter alia, he improperly used his position as an employee to gain an advantage for himself, or for Mr Barclay, or for companies controlled by Mr Barclay’s wife in that, in the course of his duties, he obtained information including as to the potential subdivision of Lot 191, the identity of the company which had a Deed of Put and Call, and the ownership and control of Spencer Projects.

    ·By letter of 16 July 2008, and/or by email of 27 November 2008, Mr Nankervis, acting for either Investa Properties or Investa Residential (or both of them), offered Oliver Hume SEQ the commission for the en globo sale of Lot 170. Thereafter Oliver Hume SEQ, in particular through Mr Barclay, performed numerous services in connection with the sale and marketing of Lot 170, including weekly reports provided by Mr Barclay at the end of 2008 and the beginning of 2009.

    ·On or about 22 July 2008, Ipswich City council conditionally approved an application made on behalf of Investa Properties and Investa Residential to reconfigure Lot 170 from one lot into 77 lots, and provided preliminary approval for building works to be carried out, subject to development permits in respect of any operational works being received before such works were commenced. An application was made on behalf of Investa Properties and Investa Residential on or about 11 August 2008, to obtain further development permits in respect of operational road works.

    ·Some time before 26 November 2008, Investa Residential had entered into a contract to sell Lot 170 to Brittains Road Pty Ltd. It was apparent from the beginning of November 2008 however, that Brittains Road Pty Ltd would probably not complete the contract.

    ·By letter of 26 November 2008 to Mr Barclay, Citimark Properties Pty Ltd (“Citimark”) offered to purchase the Fossil Site for $3.7 million (“the Citimark offer”).

    ·The contract between Investa Residential and Brittains Road Pty Ltd terminated on or about 30 January 2009.

    ·On or about 5 November 2008, CB Richard Ellis prepared a valuation report for ANZ Banking Group in respect of Lot 170, valuing it at $4 million exclusive of GST (“the CB Richard Ellis report”). A copy of this report was received by Mr Nankervis on 16 December 2008.

    ·The CB Richard Ellis report described Lot 170 as follows:

    Moderately sloping site subject to a Difficult Topography Overlay with approximately 14% of the site sloping between 20% and 25% along the eastern boundary.

    Requirement for substantial retaining wall works.

    Majority of lots on the eastern side of the state [sic] will require benching and a split level house design.

    ·On or about 16 December 2008, Mr Nankervis met with Mr Daryl Walker, director of Projex North Pty Ltd (“Projex North”) to discuss the redesign of Lot 170. On the same date, Mr Walker provided Mr Nankervis initial engineering advice in relation to the redesign of Lot 170, and Mr Nankervis emailed that engineering advice to Mr Barclay and Mr Tonuri. On or about 16 December 2008, Mr Nankervis received a letter from Mr Walker containing a design amendment proposal, which relevantly provided:

    Assessment of the existing design with Mr Ashley Nankervis revealed that a design which provided significantly flatter allotments could be achieved by adjusting the levels of Road 2 and Road 3.

    ·From about December 2008, Mr Nankervis was involved in submitting an amended Operational Roads Works Approval to the Ipswich City Council which sought levelling and retaining of Lot 170 to create flat lots.

    ·At a time unknown to Investa Properties and Investa Residential, but before 20 January 2009, an agreement was entered between Messrs Nankervis, Barclay and Tonuri, pursuant to which Mr Nankervis and Mr Barclay would participate in and derive profits from the sale to Mr Tonuri, or his nominee and the subsequent development of Lot 170.

    ·On or about 6 February 2009, Mr Nankervis prepared a Delegated Authority Approval proposing the sale price for Lot 170 in the amount of $1,454,545 exclusive of GST. This recommendation was on the basis that:

    The site is irregular in shape and heavily vegetated with steep topography, rising from the southeast to the northwest and is unattractive to our target market as only speciality [sic] custom built housing can be built on the site. The housing product made to accommodate steep slope of 10% to 15%. No slap on ground product will be achieved and this is compounded by the tree retention Council require and also approval limitations in association with the degree of earthworks allowed on the site, there is no ability to level the site.

    ·The price of $1,454,545 did not reflect the potential market value of Lot 170, taking into account the CB Richard Ellis report, the design amendment proposal of Projex North, and the amended Operational Road Works Approval Application to the Ipswich City Council. It is also clear that, in light of the proposed works in respect of Lot 170, statements in Mr Nankervis’ Delegated Authority Approval submission concerning:

    (a)“only speciality custom built housing can be built on the site”;

    (b)“the housing product needs to accommodate steep slope of 10% to 15%”;

    (c)“no slap on ground product will be achieved”; and

    (d)“there is no ability to level the site”;

    were incorrect.

    ·On or about 10 February 2009, Investa Properties and Investa Residential approved the sale of Lot 170 at $1,454,545.

    ·On or about 20 February 2009, Investa Residential and Two Eight Two Nine entered into a Deed of Put and Call in respect of Lot 170, for the sum of $1,454,545.

    ·On a date prior to 4 March 2009, Mr Nankervis commissioned Projex North to assess the design for Lot 170, and on 6 March 2009, Mr Walker emailed Mr Nankervis and Mr Barclay an engineering report for Lot 170, dated 12 January 2009, and slope analysis plans prepared by Hyder Consulting Pty Ltd (“Hyder Consulting”).

    ·On 25 June 2009, Investa Residential entered into a contract for the sale of Lot 170 to Two Eight Two Nine for $1,454,545. The contract was completed on 31 July 2009.

    ·At a time when Mr Nankervis was an employee of Investa Properties, he was engaged by or performed services and duties for and on behalf of Mr Tonuri/Two Eight Two Nine, and provided information to him/it. This included:

    (a)preparing financial and feasibility reports;

    (b)project management including managing project negotiations;

    (c)managing land sales, including tracking land sales on a periodic basis;

    (d)managing project negotiations, preparing contracts and liaising with and appointing contractors and planners; and

    (e)approving and/or recommending sales prices for lots.

    ·A sales office owned by Investa Residential was located on the Brentwood Site, however in or around March 2010, it was removed and relocated to the site of a project owned by Mr Tonuri. This was done without the authorisation of Investa Properties or Investa Residential. The cost of replacing the sales office is approximately $100,000.

    ·Mr Nankervis breached his fiduciary obligations to Investa Properties and Investa Residential and his statutory obligations under s 182 and s 183 of the Corporations Act in that he:

    (a)entered into the agreement with Mr Barclay and Mr Tonuri in respect of Lot 170;

    (b)made incorrect statements to Investa Properties in relation to Lot 170;

    (c)recommended a sale price of $1,454,545 without taking into account or disclosing to Investa Properties or Investa Residential factors which meant the site was not as difficult to develop as he claimed;

    (d)provided services to Mr Tonuri and Two Eight Two Nine; and

    (e)relocated and decommissioned a sales office.

    As against Mr Barclay

1. In the amended application the applicants plead:

   2.        As against the second respondent, Adam Kimberly Barclay:

   2.1.     In respect of Lot 191:

   (a)Mr Barclay must account as a defaulting fiduciary to Investa Residential Group for the value of Lot 191 at the time of sale. The value of the property was $290,000, but Investa Residential received only $195,000.

   (b)Alternatively, Mr Barclay must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Residential for the sale of Lot 191 at an undervalue.

   2.2.     In respect of Lot 170:

   (a)At the election of Investa Properties or Investa Residential or both of them, Mr Barclay must account as a defaulting fiduciary to Investa Properties or Investa Residential or both of them for either:

   (i)any profit that he or any entity that was associated with him, or that he controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine Pty Ltd, or from the development or resale of Lot 170; or

   (ii)the value of Lot 170 at the time of sale. The value of the property was $3,000,000, but Investa Residential Group received only $1,454,545.

   (b)Alternatively, Mr Barclay must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them for the sale of Lot 170 at an undervalue.

2. In the amended statement of claim, the applicants plead further, in summary:

   ·By reason of the arrangements entered into between Investa Residential on the one hand, and Oliver Hume SEQ on the other, and in circumstances where Mr Barclay had been the instrument of Oliver Hume SEQ in respect of the entry into those agreements, Mr Barclay had fiduciary obligations to Investa Residential while providing real estate services in relation to Lot 191. Those duties included an obligation not to assist any associated person or entity purchase Lot 191 without full disclosure to and the informed consent of Investa Residential.

   ·From at least 19 October 2009 to 29 October 2009, Mr Nankervis and Mr Barclay were involved in taking steps to subdivide Lot 191 into two lots.

   ·When a Deed of Put and Call in respect of Lot 191 was executed by Queensland Property Centre, Mr Barclay did not disclose to Investa Residential or Investa Properties that, in effect, the sole director and sole shareholder of that company was his wife, Mrs Barclay.

   ·At no time did Mr Barclay disclose to Investa Properties or Investa Residential that Spencer Projects was owned and controlled by his wife.

   ·Mr Barclay had fiduciary obligations to Investa Properties and Investa Residential in relation to Lot 170, in that he was employed to perform Oliver Hume SEQ’s obligations as real estate agent and was involved in a significant way in providing Oliver Hume SEQ’s services to Investa Properties and Investa Residential.

   ·Mr Barclay had a fiduciary obligation to Investa Properties and Investa Residential to tell them that Citimark had made an offer on 26 November 2008 in respect of Lot 170, and the details of the offer (in particular that the offer to purchase was for the amount of $3.7 million).

   ·At a time when Mr Barclay was employed by Oliver Hume SEQ and providing services to Investa Properties and Investa Residential in respect of the marketing and sale of Lot 170, he was engaged by or performed services and duties for and on behalf of Mr Tonuri/Two Eight Two Nine, and provided information to him/it. This included:

   (a)preparing financial and feasibility reports;

   (b)project management including managing project negotiations;

   (c)managing land sales, including tracking land sales on a periodic basis;

   (d)managing project negotiations, preparing contracts and liaising with and appointing contractors and planners; and

   (e)approving and/or recommending sales prices for lots.

   ·Mr Barclay breached his fiduciary obligations to Investa by entering into the agreement with Mr Nankervis and Mr Tonuri in relation to Lot 170 and providing services to Mr Tonuri and/or Two Eight Two Nine.

   As against Oliver Hume SEQ

3. In the amended application, the applicants plead:

   3.        Oliver Hume SEQ

   3.1.     In respect of Lot 191:

   (a)Oliver Hume SEQ must account as a defaulting fiduciary to Investa Residential for the value of Lot 191 at the time of sale. The value of the property was $290,000, but Investa Residential received only $195,000.

   (b)Alternatively, Oliver Hume SEQ must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Residential Group for the sale of Lot 191 at an undervalue.

   3.2.     In respect of Lot 170:

   (a)At the election of Investa Properties or Investa Residential, or both of them, Oliver Hume SEQ must account as a defaulting fiduciary to Investa Properties or Investa Residential, or both of them for either:

   (i)any profit that it or any entity that was associated with it, or that it controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine Pty Ltd, or from the development or resale of Lot 170; or

   (ii)the value of Lot 170 at the time of sale. The value of the property was $3,000,000, but Investa Residential received only $1,454,545.

   (b)Alternatively, Oliver Hume SEQ must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them, for the sale of Lot 170 at an undervalue.

4. In the amended statement of claim, the applicants plead further, in summary:

   ·On or about 1 October 2008, Investa Residential entered into an agreement with Oliver Hume SEQ, being an Appointment of Real Estate Agent – Sales and Purchases (Form 22a) pursuant to PAMDA.

   ·Mr Barclay, on behalf of Oliver Hume SEQ, signed a further agreement on or about 16 July 2009 with Investa Residential called “Appointment of Real Estate Agent – Sales and Purchases (Form 22a) pursuant to PAMDA. That agreement contained the following notice:

   When performing this service, the agent must comply with the code of conduct for agents as set out in the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 (Qld).

   ·The terms of this notice were incorporated into the agreement as a contractual term. It followed that the agreement of 16 July 2009 contained an express term to the effect that, when performing the services that the agreement provided for, Oliver Hume SEQ must comply with the code of conduct for agents as set out in PAMDA (amended statement of claim para 102G).

   ·In those agreements, Investa Residential appointed Oliver Hume SEQ as real estate agent in connection with the sales and marketing of the development of the Brentwood site.

   ·At material times, Mr Barclay was a director and employee of Oliver Hume SEQ, and was its agent with actual or ostensible authority act for it in relation to providing real estate agent services to Investa Residential. Mr Barclay was also the signatory on behalf of Oliver Hume SEQ in relation to the agreements, the individual in charge of its business and the individual who dealt with the people at Investa Properties in relation to development and sale of land. In particular, Mr Barclay reported to Mr Nankervis and Mr Long.

   ·Oliver Hume SEQ did not disclose to Investa Residential or Investa Properties that Lot 191 was the subject of a Deed of Put and Call in favour of Queensland Property Centre, a company controlled by Mr Barclay’s wife, or that Lot 191 was sold to Spencer Projects, being another company controlled by Mr Barclay’s wife. In this respect, Oliver Hume SEQ did not act with good faith, breached fiduciary obligations to Investa, and breached express and implied terms of its agreements with Investa.

   ·Oliver Hume SEQ had fiduciary obligations to Investa Properties and Investa Residential while providing services in relation to Lot 170.

   ·Oliver Hume SEQ had a fiduciary obligation to Investa Properties and Investa Residential to tell them that Citimark had made an offer on 26 November 2008 in respect of Lot 170, and the details of the offer (in particular that the offer to purchase was for the amount of $3.7 million).

   ·Oliver Hume SEQ breached its fiduciary obligation to Investa Properties and Investa Residential in relation to Lot 170, as a result of Mr Barclay entering into the agreement with Mr Nankervis and Mr Tonuri in relation to Lot 170 and providing services to Mr Tonuri and/or Two Eight Two Nine.

   Remedies claimed against the respondents

5. The remedies claimed by the applicants against the respondents can be summarised as follows.

   Mr Nankervis

6. In respect of Lot 191:

   ·account by Mr Nankervis as a defaulting fiduciary to Investa Properties and Investa Residential for the value of Lot 191 at the time of sale, on the basis that the value of the property was $290,000, but Investa Residential received only $195,000.

   ·alternatively, equitable compensation for the sale of Lot 191 at an undervalue.

   ·alternatively, compensation payable to Investa Properties pursuant to s 1317H of the Corporations Act.

7. In respect of Lot 170:

   ·At the election of Investa Properties or Investa Residential, or both of them, Mr Nankervis must account as a defaulting fiduciary to either or both applicants for either:

   oany profit he or any entity that was associated with him or that he controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine, or from the development or resale of Lot 170; or

   othe value of Lot 170 at the time of sale. The value of the property was $4 million, but Investa Residential received only $1,454,545.

   ·Alternatively, equitable compensation for the sale of Lot 170 at an undervalue.

   ·Alternative, compensation payable to Investa Properties pursuant to s 1317H of the Corporations Act.

   ·Equitable compensation for the decommissioning and relocation of the sales office.

   Mr Barclay

8. In respect of Lot 191:

   ·Account by Mr Barclay as a defaulting fiduciary to Investa Properties and Investa Residential for the value of Lot 191 at the time of sale, on the basis that the value of the property was $290,000, but Investa Residential received only $195,000.

   ·Alternatively, equitable compensation for the sale of Lot 191 at an undervalue.

9. In respect of Lot 170:

   ·At the election of Investa Properties, or Investa Residential, or both of them, Mr Barclay must account as a defaulting fiduciary to either or both applicants for either:

   oany profit he or any entity that was associated with him or that he controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine, or from the development or resale of Lot 170; or

   othe value of Lot 170 at the time of sale. The value of the property was $4 million, but Investa Residential received only $1,454,545.

   ·Alternatively, equitable compensation for the sale of Lot 170 at an undervalue.

   Oliver Hume SEQ

10. In respect of Lot 191:

    ·Account by Oliver Hume SEQ as a defaulting fiduciary to Investa Properties and Investa Residential for the value of Lot 191 at the time of sale, on the basis that the value of the property was $290,000, but Investa Residential received only $195,000.

    ·Alternatively, equitable compensation for the sale of Lot 191 at an undervalue.

11. In respect of Lot 170:

    ·At the election of Investa Properties, or Investa Residential, or both of them, Oliver Hume SEQ must account as a defaulting fiduciary to either or both applicants for either:

    oany profit it or any entity that was associated with it or that it controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine, or from the development or resale of Lot 170; or

    othe value of Lot 170 at the time of sale. The value of the property was $4 million, but Investa Residential received only $1,454,545.

    ·Alternatively, equitable compensation for the sale of Lot 170 at an undervalue.

    DEFENCES OF THE RESPONDENTS

12. The defences of the respondents to the claims of the applicants can be summarised as follows.

    Mr Nankervis

13. Mr Nankervis relied on a second amended defence filed on 15 November 2013.

14. In summary, Mr Nankervis says as follows:

    ·The description of his duties during the period of his employment in paragraph 5 of the amended statement of claim is incorrect.

    ·He did not owe to Investa Properties and Investa Residential the fiduciary obligations in paragraph 16(a) of the amended statement of claim.

    ·He denied that he was responsible for signing off on all relevant stage releases in the Brentwood site (amended statement of claim para 19(b), second amended defence para 12(c)).

    ·He admitted that he signed the approval submission in respect of the Delegated Authority Approval proposing Lot 191 be sold for the amount of $210,000 (after rebate), but otherwise says that it was actually prepared by the development manager, Mr Long, and reviewed and revised by the Chief Financial Officer and the Group Executive before he signed it (second amended defence para 60).

    ·He denied that he was involved in taking steps to subdivide Lot 191 into two lots as alleged in paragraphs 103(a) and 104 of the amended statement of claim.

    ·He denied the allegation at paragraph 110 of the amended statement of claim that he had approved the sale price in respect of a Deed of Put and Call for Lot 191 to Queensland Property Centre in the amount of $195,000. Rather, at paragraphs 68(c) and 69(d) of his second amended defence, Mr Nankervis said that:

    othe Sales Advice Vacant Land (referred to in the particulars) was a summary of the deed of Put and Call Option proposed to be entered into in respect of five lots in Brentwood Stages 2A and 2B;

    othe document was prepared by the sales agent for the Brentwood Development;

    othe proposed sale of five lots to Queensland Property Centre was a bulk sale;

    oduring the Global Financial Crisis, and especially during 2009, the applicants were willing to discount prices significantly to achieve bulk sales;

    othe bulk sales of lots in Brentwood Stage 2A included pre-sales to Garrick Bull, DHA, Broadsword and Queensland Lifestyle Company, which are referred to in the “Contract Status Report” attached to the Approval Submission for Brentwood Stage 2A;

    odiscounted pricing for bulk sales was approved by the Board or the Project Control Group for the Brentwood site; and

    olot 191 was subsequently sold by Investa Residential for $290,000, well in excess of the approved net price of $210,000.

    ·He did not know that Mr Barclay had the interest alleged by the applicants in Lot 191 arising from the Deed of Put and Call, and in any event, was not under a duty to disclose this fact to the applicants.

    ·He had no knowledge of Spencer Projects which was not incorporated until 10 June 2010, and in any event ceased his employment with Investa Properties on 26 May 2010.

    ·In relation to the allegations of the applicants concerning the CB Richard Ellis report prepared for ANZ Banking Group in respect of Lot 170, at paragraph 105(b) of his second amended defence, Mr Nankervis says:

    oa valuation report had been prepared for the applicants by Jones Lang Lasalle, in or about June 2008, which provided an indicative assessment in the range of $2.1 million to $2.3 million;

    oin or about early July 2008, after taking this valuation into consideration, the Group Executive approved disposal of Lot 170 under a “wholesale sell off” with a minimum sale price of $1.8 million with the objective of achieving a sale of the property by 31 December 2008;

    oin or about early August 2008, the Group Executive approved a reduction in the minimum sale price to $1.75 million;

    oin or about August 2008, the second applicant entered into a contract for sale of Lot 170 with Brittains Road Pty Ltd for $1,613,636 (excluding GST);

    othe CB Richard Ellis report was prepared for the ANZ Banking Group Ltd based upon instructions, inputs and assumptions provided by Brittains Road Pty Ltd;

    oon or shortly after 16 December 2008, Mr Nankervis went through the costings in the CB Richard Ellis report with Ms Nicole Prout, the applicants’ Project Accountant in Queensland, and they considered that the costings were unrealistic;

    oat or about the same time Mr Nankervis also received a copy of the CB Richard Ellis report from Mr Waters, who had been the Queensland General Manager until in or about November 2008 (when he was appointed Queensland Manager of Clarendon Homes) and he continued to have responsibility for the contract with Brittains Road Pty Ltd with Mr Stubbs, the new Queensland General Manager; and

    oMr Nankervis discussed the CB Richard Ellis report with Mr Waters and they were both of the opinion that it was overly optimistic in its assumptions given the market conditions.

    ·In relation to the allegations of the applicants at paragraphs 169-173 of the amended statement of claim concerning Mr Nankervis’ meeting with Mr Walker on or about 16 December 2008 to discuss the redesign of Lot 170, and Mr Nankervis’ interactions with Mr Tonuri, he says at paragraph 106 of his second amended defence:

    oin late 2008 and 2009 during the Global Financial Crisis, the Investa Property Group was under intense financial pressure and was attempting to sell assets wherever possible;

    oin or about November 2008 it was apparent to Mr Waters and Mr Stubbs that the contract with Brittains Road Pty Ltd was unlikely to complete;

    oduring the period from in or about November 2008 to in or about February 2009, Mr Stubbs instructed Mr Nankervis to the effect that he should do anything and everything he could to ensure that a sale of Lot 170 was achieved;

    oduring November and December 2008, Mr Stubbs, Mr Long and Mr Nankervis undertook an extensive off-market campaign to find a buyer for Lot 170;

    othe only sale that achievable at the times was the sale to Two Eight Two Nine for $1.6 million (including GST).

    ·In relation to the allegations of the applicants at paragraph 174 of the amended statement of claim concerning Mr Nankervis’ involvement in submitting an amended Operational Roads Work Approval to the Ipswich City Council which sought levelling and retaining of Lot 170 to create flat lots, he says at paragraph 107 of his second amended defence:

    ohe was involved in submitting a request for amendment of the development approval for reconfiguring one lot into 77 lots in respect of Lot 170;

    othe principal purpose of the request was to address road design to meet safety concerns raised by the Ipswich City Council and compliance with the Council’s Master Plan for the Brentwood Site on interface issues;

    othe levelling and retaining of the site to create flatter lots was incidental but necessary to make Lot 170 more saleable;

    othe person who was most interested in purchasing Lot 170 was Mr Tonuri, who told Mr Nankervis in or about November 2008 that he wanted a permit that was unconditional. The plan amendments were undertaken to obtain a permit that was unconditional;

    odesign changes to allow for flatter allotments were undertaken to satisfy Mr Tonuri’s concern about the saleability of steep allotments;

    oall of this information was known to Mr Stubbs because of his direct involvement in the marketing campaign for Lot 170 and in negotiations with Mr Tonuri, and the progress of plan amendments were reported to the Project Control Group.

    ·In relation to allegations of the applicants at paragraph 176 of the amended statement of claim concerning the basis of Mr Nankervis’ recommendation that Lot 170 be sold for $1,454,545, Mr Nankervis says at paragraph 109 of his second amended defence that he basis of the recommendation that Lot 170 be sold at that price was:

    othe comparative price analysis undertaken by Jones Lang LaSalle;

    othe need of Investa Properties to achieve a sale to gain revenue;

    othe sale to Two Eight Two Nine was the only achievable sale at the time; and

    othe proposed sale price was just below the price previously agreed by Investa Residential to sell to Brittains Road Pty Ltd and the Jones Lang LaSalle valuation obtained by Investa Residential in June 2008.

    ·In relation to allegations of the applicants at paragraphs 186 and 187 of the amended statement of claim to the effect that Mr Nankervis was engaged by or provided services for and on behalf of Mr Tonuri or provided information to Mr Tonuri or a person or persons associated with Two Eight Two Nine, Mr Nankervis says at paragraphs 114-116 of his second amended defence that:

    oMr Tonuri worked for a bank and was not experienced in property development;

    oMr Tonuri told Mr Nankervis in early 2009 that he would need help in getting the right consultants and getting the Lot 170 project up and running, and Mr Nankervis said that he would assist Mr Tonuri if Mr Tonuri purchased Lot 170;

    oMr Nankervis was motivated to do so in order to achieve the sale, and because it was in the interests of Investa Residential for him to be involved so as to most effectively resolve the interface issues between Lot 170 and the balance of the Brentwood site and requirements of the Brentwood Master Plan, including sewer alignment, pathway connections and the road frontage works;

    ohe did not provide services alleged by the applicants including preparation of financial and feasibility reports, project management, land sales management and project negotiation management – rather the assistance Mr Nankervis provided to Mr Tonuri was that:

    §he provided introductions to consultants and contractors;

    §he attended a meeting between Mr Tonuri and a finance broker;

    §he ran a feasibility model using inputs provided by Mr Tonuri; and

    §the project was managed by Projex North which was engaged by Two Eight Two Nine;

    othe assistance he provided to Mr Tonuri was generally given outside business hours in return for no payment, and did not conflict with his responsibilities to Investa Properties.

    ·In relation to allegations of the applicants at paragraphs 191-193 of the amended statement of claim concerning the sales office, Mr Nankervis says at paragraphs 119-122 of his second amended defence that:

    oby late 2009, when Investa Residential was pre-selling and preparing for the delivery of Stages 1D, 1E and 1F of the Brentwood site, the relevant sales office had not been used for approximately two years, had been vandalised and was in disrepair. The estimated cost of repairing and removing the sales office from the site exceeded $50,000.

    oin or about December 2009, Mr Holt, the Queensland General Manager, instructed that the sales office was to be removed from the site at no cost to Investa Residential. Subsequently, in or about January or February 2010, Mr Barclay proposed to Mr Nankervis that the sales office be relocated to the Outlook Project at no cost to Investa, and Mr Nankervis agreed.

    ·He did not profit from transactions involving either Lot 191 or Lot 170.

    Mr Barclay

1. Mr Barclay relies on a defence filed on 18 November 2013. In summary, he says as follows:

   ·Investa Properties was the relevant party at all times, not Investa Properties. At paragraph 1A(c)(ii) of his defence, Mr Barclay says:

   (i)the land the subject of this proceeding was not held beneficially by Investa Residential for Investa Properties;

   (ii)if funds were provided by Investa Properties to Investa Residential those funds were by way of a loan on commercial terms; and

   (iii)Investa Residential was the registered owner of the subject land from any beneficial holding and was the party who contracted with real estate agents and entered into land contracts.

   Further at paragraph 1B(a) of his defence, Mr Barclay says that it was Investa Residential which contracted for the purchase and sale of land within the Brentwood site, and the entity which entered into agreements with real estate agents.

   ·In relation to the allegations of the applicants at paragraph 27 of the amended statement of claim concerning the appointment of Oliver Hume SEQ as real estate agent by Investa Residential, Mr Barclay admits that Oliver Hume SEQ agreed to conduct sales and marketing of certain lots but says further at paragraph 8 of his defence that:

   othe applicants acted on their own behalf for the sale of all land at the Brentwood Site as well as negotiated or dealt with at least 10 different agencies involving more than 100 different purchasers;

   ono agent was appointed for the sale of Lot 170; and

   ounless an appointment is in the approved form 22a pursuant to PAMDA an appointment is ineffective.

   ·The claim of the applicants in paragraph 102G of the amended statement of claim, that the notice on the agreement entered by the applicants and Oliver Hume SEQ on 26 July 2009 meant that there was incorporated a condition that the agent must comply with the code of conduct for agents in PAMDA, was wrong in law.

   ·Neither he nor Oliver Hume SEQ owed obligations to Investa Residential pursuant to the provisions of PAMDA.

   ·In relation to the claims of the applicants in paragraph 102L of the amended statement of claim that Mr Barclay owed fiduciary obligations to Investa Residential, Mr Barclay denies that such fiduciary obligations are owed.

   ·In relation to the claim of the applicants at paragraph 107 of the amended statement of claim that he did not, at any time prior to Mr Nankervis recommending to Investa Properties the sale of Lot 191 at $210,000 (after rebate), disclose to the applicants that he was taking steps to subdivide Lot 191, Mr Barclay says at paragraph 34 of his defence that:

   ohe verbally informed the applicants through Mr Nankervis, who consented to and encouraged the sale;

   oby email on or about 19 October 2009, Mr Barclay emailed the applicants asking whether or not there would be any issues with subdividing Lot 191, and the applicants (through Mr Nankervis) consented and encouraged the sale; and

   oMr Barclay initiated the proposal to the applicants for them to subdivide the larger lots in stage 2A and 2B of the Brentwood Site to achieve lower priced lots for sale during the Global Financial Crisis, however the applicants responded, inter alia, that they did not have the budget allowance or cash resources to carry out the subdivisions and they needed to increase cash flow by sales of existing lots.

   ·In relation to the claim of the applicants in paragraph 108 of the amended statement of claim that the price of $210,000 for Lot 191 did not reflect its potential market value (given that it could be subdivided), Mr Barclay says at paragraph 35 of his defence that:

   othe actual price paid was the market value of Lot 191 with or without the knowledge of the potential to subdivide;

   othe applicants were informed of the potential to subdivide Lot 191 but declined the opportunity to do so;

   othe Global Financial Crisis resulted in the applicants deciding to sell the Brentwood Site as a whole and there being less demand for larger lots;

   othe applicants breached s 93 of the Valuation of Land Act 1944 (Qld) and s 81 of the Land Titles Act 1994 (Qld) by not disclosing rebates and therefore distorting the real market value of lots in the Brentwood Site and the surrounding area;

   othe applicants failed to comply with regs 7(1), 11, 14 and 16 of the Property Agents and Motor Dealers (Property Developer Practice Code of Conduct) Regulations 2001 (Qld) by, inter alia, conduct whereby board list prices and list prices were artificially and misleadingly distorted, because of rebates given by the applicants in respect of lots sold;

   othe applicants sold other lots greater than 900 m to their own employees at similar prices;

   oLot 190 was valued by Bank of Queensland on 2 August 2010 at $200,000 being the best comparative sale;

   oin Delegated Authority Approval papers of the applicants dated 3 March 2009 the applicants authorised lots to be sold at an average of $190,000 per lot;

   omarket conditions were deteriorating in 2009 as a result of the Global Financial Crisis, and were affecting nearby developments operated by Stockland as well as sales rates of the Brentwood Site; and

   osubdivision of Lot 191 required complex steps and associated costs.

   ·In relation to the claim of the applicants in paragraph 111 of the amended statement of claim that the price of $195,000 for Lot 191 approved by Mr Nankervis on or about 18 December 2009 in the Deed of Put and Call was $15,000 less than the price of $210,000 approved by Investa Properties on 23 October 2009, Mr Barclay says that $195,000 was the market price, Lot 191 was sold as part of a bulk sale of other lots, the sale price of $195,000 was approved by the applicants and in any event the prices of Investa land were distorted by the applicants as a result of rebates which were not disclosed to the market.

   ·In relation to the claim of the applicants at paragraph 120 of the amended statement of claim that Mr Barclay did not disclose to the applicants that the other party to the Deed of Put and Call was a company controlled by his wife, Mr Barclay says at paragraph 46 of his defence that he verbally informed Mr Nankervis of this fact and that Mr Nankervis encouraged these actions.

   ·In relation to the sale price of $290,000 achieved for the sale of Lot 191 to Spencer Projects, Mr Barclay at paragraph 58 of his defence, says that the real value of Lot 191 was not $290,000, and the only reason Investa Residential achieved that sale price was because the transaction between Spencer Projects and Queensland Property Centre was a related party transaction.

   ·In relation to the allegations of the applicants at paragraphs 162A-162G of the amended statement of claim concerning Lot 170, Mr Barclay says at paragraph 60 (inter alia):

   ohe undertook no activities set out in a letter of 16 July 2008 whereby Investa Residential offered Oliver Hume SEQ the commission for the en globo sale of Lot 170;

   oas at 16 July 2008, Oliver Hume SEQ had not been appointed as the sales agent for any Lots within the Brentwood development;

   othe applicants were actively marketing Lot 170 internally while at the same time contacting real estate agents including Oliver Hume SEQ to consider selling Lot 170;

   oBrittains Road Pty Ltd was sourced as buyer internally from the marketing activities by the applicants;

   oMr Barclay undertook no marketing activities of Lot 170 on behalf of the applicants, or at all

   othe email of 27 November 2008 from Mr Nankervis to Oliver Hume SEQ specifically stated that the applicants would not formalise the engagement of Oliver Hume SEQ until Oliver Hume SEQ advised. No agreement was ever formalised in fact or pursuant to PAMDA because there was no agreement to formalise;

   obetween 27 November 2008 and February 2009, Mr Barclay and Mr Nankervis (on behalf of the applicants) agreed that Oliver Hume SEQ would seek its commission from Two Eight Two Nine through the sales of the developed sites or vacant land sales of Lot 170 by Two Eight Two Nine. However, Oliver Hume SEQ did not receive any commission from the applicants for the sale of Lot 170 to Two Eight Two Nine in accordance with that agreement;

   oin or about mid 2008, Mr Barclay on behalf of Oliver Hume SEQ was requested by Mr Geoff McWilliam, on behalf of Citimark, to source potential sites for development. In or about November 2008, Mr Barclay identified Lot 170 as such a site and Citimark made an offer on 26 November 2008 in respect of Lot 170, however the offer was withdrawn within several days; and

   othe marketing report relied upon by the applicants in paragraph 162C of the amended statement of claim with reference to the Fossil Site was actually produced by Oliver Hume SEQ in relation to the Brentwood Site, and not Lot 170.

   ·In relation to the offer of $1,454,545 for Lot 170, Mr Barclay says at paragraph 63 of his defence, inter alia, that at or about 10 February 2009 when the Delegated Authority Approval prepared by Mr Nankervis and signed by Mr Nankervis, Mr Stubbs (the General Manager Queensland) and Mr Jenkins (Group Executive), it was recognised that:

   othe Brittains Road contract had terminated. In that contract Investa Residential had previously agreed to sell Lot 170 to Brittains Road Pty Ltd for $1,613,636 excluding GST;

   oa sales and marketing campaign had been undertaken by Oliver Hume SEQ off market, at no cost to Investa;

   othere was no interest in the site by corporate players and only five persons at a local level had been interested; and

   oit was agreed that Oliver Hume SEQ would be acting on the buyer’s behalf and not that of Investa Residential and would seek its commission from the buyer not the applicants.

   ·He admits he provided services for and on behalf of Mr Tonuri and Two Eight Two Nine and provided information and assistance to them from August 2009.

   ·In relation to the relocation of the sales office, at paragraph 85 of his defence, Mr Barclay denies that neither applicant authorised the relocation because Mr Nankervis agreed for it to be removed from the Brentwood site at Mr Barclay’s cost. At paragraph 87 of his defence he denies that the applicants could have reused the sales office because:

   othe applicants were using display homes for sales offices in subsequent stages in the Brentwood Development;

   othe sales office was damaged and required extensive cash payments to improve;

   othe sales office was not modern or presentable to a standard required by the applicants for their sales display;

   othe applicants required increases in cash flow and saved cash flow by not having to refurbish a damaged sales office and keeping it in storage for subsequent use in subsequent stages of the Brentwood Development; and

   othe applicants made the commercial decision to have the sales office removed at no cost, therefore saving approximately $50,000 in cash outlays.

   Oliver Hume SEQ

2. Oliver Hume SEQ relies on a defence filed on 15 November 2013. In summary, it says as follows:

   ·In respect of the claims of the applicants concerning the execution of contract for the sale of Lot 170, Oliver Hume SEQ says at paragraph 4 of its defence:

   oan appointment of a person as a purported real estate agent is ineffective unless it is in the approved form in accordance with provisions of PAMDA, being Form 22a;

   oa Form 22a was not executed by either applicants, or Mr Barclay, or Oliver Hume SEQ in relation to Lot 170; and

   othis may be compared with the Form 22a prepared by Mr Barclay and executed by Investa Residential and Oliver Hume SEQ on 30 September 2008 in relation to other lots, and a subsequent Form 22a signed by Mr Nankervis on behalf of Investa Residential and Mr Barclay on behalf of Oliver Hume SEQ on 16 July 2009 in relation to Lots 173-215 and 216-249 Whipstick Boulevard in the Brentwood Development.

   ·In relation to Mr Barclay, Oliver Hume SEQ says at paragraph 6 of its defence:

   oMr Barclay was employed on 15 March 2004 as Sales Manager, and his title changed to General Manager – Queensland Land and New Homes in September 2006;

   oon 1 November 2006, Mr Barclay signed an employment contract, and subsequently on 27 August 2008 he signed another employment contract to become the General Manager – Queensland Land and New Homes for Oliver Hume SEQ. In both contracts he agreed, inter alia, that he would not engage in any private business activities or provide any commercial or professional services to a person or organisation without prior written consent of Oliver Hume SEQ;

   oon 1 July 2009 AKB Qld Pty Ltd of which Mr Barclay was the sole shareholder and director became a shareholder of Oliver Hume SEQ, and was the only Queensland based shareholder of Oliver Hume SEQ at the material time;

   oMr Barclay was nominated as the officer in effective control of Oliver Hume SEQ’s Corporate Licence from 2006;

   oon 14 April 2011, Mr Barclay’s employment with Oliver Hume SEQ was terminated and he was removed as a director;

   ofrom 11 December 2007 to 14 April 2011 Mr Barclay was authorised by Oliver Hume SEQ to sign the following categories of documents on its behalf as the only director of Oliver Hume SEQ based in Queensland:

   §PAMDA forms;

   §lease agreements with a second director;

   §capital expenditure up to $5,000;

   §employment agreements for staff;

   §consultancy agreements;

   §all other agreements together with a second director; and

   oother than in these respects, Mr Barclay had no actual or apparent authority to act for Oliver Hume SEQ in matters relating to the provision of real estate agent services to Investa Residential.

   ·It denies that any agreement between it and either of the applicants contained terms imported by the notice on the Form 22a as claimed by the applicants. The contents of the Real Estate Agency Practice Code of Conduct were not terms or conditions of the contract.

   ·It denies that any fiduciary obligation which consisted of the duties or obligations particularised at paragraphs 102J and 102L of the amended statement of claim arose as between either of the applicants and Oliver Hume SEQ.

   ·At paragraph 22 of its defence, Oliver Hume SEQ says that it was to provide real estate agent services in accordance with the terms of the Form 22a signed on 16 July 2009 which included the sale and marketing of Lot 191, but that was all.

   ·Oliver Hume SEQ had no knowledge concerning the entry into the Deed of Put and Call by Queensland Property Centre.

   ·Oliver Hume SEQ had no knowledge of the steps taken by Mr Nankervis and Mr Barclay to subdivide Lot 191 into two lots, and says at paragraph 41 of his defence that it that conduct was engaged in it was not undertaken with the knowledge, consent or approval of Oliver Hume SEQ. Such conduct or knowledge could not be imputed to Oliver Hume SEQ.

   ·In relation to steps taken by Mr Nankervis and Mr Barclay pursuant to the subdivision of Lot 191 pleaded by the applicants at paragraph 139 of the amended statement of claim, Oliver Hume SEQ, at paragraph 41 of its defence, denies that it breached any express or implied terms of any agreement and any fiduciary obligation.

   ·It denies that there was any contract of engagement with the first or second applicant in relation to Lot 170 as pleaded in paragraph 162C of the amended statement of claim. Any services provided by Mr Barclay were not performed on behalf of, or with the authority of, or as agent for Oliver Hume SEQ.

   ·It denies the claim of the applicants in paragraph 162D of the amended statement of claim that Oliver Hume SEQ was in a position of confidence in relation to Investa Properties and Investa Residential, and further denies the claims in paragraphs 162E and 162F of the amended statement of claim that it owed any fiduciary obligations in relation to Lot 170.

   ·In relation to the claims of the applicants at paragraphs 164A-167 of the amended statement of claim, Oliver Hume SEQ says at paragraph 51 of his defence, inter alia:

   oon 13 June 2008, after the preparation of an “Indicative Assessment” for the second applicant by Jones Lang LaSalle, the second applicant’s business plan valued Lot 170 at $3,100,000;

   oon 3 July 2008, however the State Manager of the second applicant recommended that Lot 170 be disposed of under a “wholesale sell off” with the minimum sale price to exceed $1,800,000. This recommendation was approved by Mr Maurice Felizzi, the Group Executive for the second applicant on or about 7 July 2008. That recommendation was followed up on 11 August 2008 with a further recommendation that Lot 170 be sold with the minimum price to exceed $1,750,000, which recommendation was again approved by Mr Felizzi;

   oon 11 August 2008, the second applicant entered into a contract to sell Lot 170 to Brittains Road Pty Ltd for $1,775,000 (inclusive of GST). Oliver Hume SEQ was not identified in the contract as being the vendor’s agent for the sale;

   oon or about 19 August 2008, Mr Barclay sought a quotation from CB Richard Ellis to provide a report for Lot 170. CB Richard Ellis prepared a report, for the ANZ Banking Group, on the instruction of Brittains Road Pty Ltd, valuing the land at $4,000,000;

   oby letter dated 26 November 2008 to Mr Barclay, Citimark offered to purchase Lot 170 for $3,700,000 including GST. Oliver Hume SEQ had no knowledge of this offer;

   oon 27 November 2008 Mr Nankervis emailed Mr Barclay to the effect that the Brittains Road Pty Ltd contract looked precarious and that Investa Residential wanted Oliver Hume SEQ to procure a back-up sale contract for around $1,800,000, but would not formalise Oliver Hume SEQ’s engagement until Mr Barclay advised them;

   oby 2 December 2008 Mr Barclay had made contact with Mr Tonuri in relation to purchasing Lot 170;

   oa further memorandum was prepared by Mr Nankervis to the Group Executive of Investa Residential on 28 January 2009 recommending that Lot 170 be sold for $1,600,000, followed by a Delegated Authority Approval Submission prepared by Mr Nankervis on 6 February 2009, recommending that it be sold under a “wholesale sell off” for $1,454,545 exclusive of GST;

   oon 13 February 2009 Ms Prout, an employee of one of the Investa companies, wrote to Mr Andrew Murray (Legal Counsel of the Investa property group) and Mr Duncan Peacock (the Chief Financial Officer of the Investa Property Group) and stated, inter alia, that it appeared that the book value for Lot 170 was $2.976 million, and having regard to the loan amount referable to the site she had arrived at a debt of $1,361,923; and

   oCB Richard Ellis prepared a report of Lot 170 on 6 May 2009 on the instructions of Mr Tonuri for mortgage security purposes, and CB Richard Ellis valued Lot 170 at $4 million.

   ·The second applicant subsequently sold Lot 170 to Two Eight Two Nine for $1,454,545 on 25 June 2009 by a contract of sale, in which no selling agent was identified. Oliver Hume SEQ received no commission in relation to the sale of Lot 170.

   ·Oliver Hume SEQ says at paragraph 64 of its defence that it provided no services to Mr Tonuri and/or Two Eight Two Nine.

   ·At all material times, Mr Nankervis was the servant or agent of the applicants, and in so far as any loss was suffered by the applicants in respect of the Lot 191 contract or the Lot 170 contract it was caused by the applicants by their agent, Mr Nankervis.

   RELEVANT ISSUES FOR DETERMINATION

1. Costings relevant to these line items were not insignificant. However other than in relation to the Council bus stop contribution and land holding costs which total $242,094:

   ·the evidence that such costs had been incurred was unsatisfactory;

   ·the respondents had not made a case that Mr McEvoy had not taken relevant costs into account or that relevant costs had not been incurred after the valuation date.

2. In respect of the costings raised by the respondents, I consider that only the Council bus stop contribution and the land holding costs should have been taken into account by Mr McEvoy. These costs total approximately 8% of the total value of the land as ascribed to it by Mr McEvoy. In the circumstances I do not consider this to be a major cause for concern in respect of Mr McEvoy’s valuation opinion.

3. In the circumstances, I am not persuaded that Lot 170 was sold at an undervalue. While Investa may have seriously reconsidered the sale of Lot 170 had they had knowledge of the development options offered by the Projex North proposal, and indeed it may be that these options could have affected the asking price for the property, there is nothing before me to support a finding that, in the economic environment at the time of sale, it had a greater value than $1,454,545 exclusive of GST paid for it by Two Eight Two Nine.

   Measure of compensation

4. The measure of compensation either in equity or under the Corporations Act is a mater for further submissions by the parties.

   CROSS-CLAIMS

5. I now turn to the five cross-claims in this matter.

6. Unfortunately, the submissions in respect of all cross-claims range from non-existent to thin. Part of the reason for this is the lack of representation of Mr Nankervis and Mr Barclay, and the absence of lawyers to provide proper submissions in respect of their various cross-claims, or positions in respect of cross-claims brought against them. It is clear, however, from the limited submissions filed in respect of the cross-claims in this case tthat the parties anticipate determination of the cross-claims by the Court on the basis of the existing material.

   1.        Mr Nankervis against Mr Barclay and Oliver Hume SEQ

7. Mr Nankervis’ statement of cross-claim filed 15 November 2013, brought against Mr Barclay and Oliver Hume SEQ, relevantly provides:

   4.        If:

   (a)Mr Nankervis and Mr Barclay entered into the Agreement with Mr Tonuri (which is denied); and

   (b)as a consequence, the Applicants succeed in their claims against Mr Nankervis, Mr Barclay and/or Oliver Hume for breach of fiduciary duty,

   then Mr Nankervis claims equitable contribution by those other parties on the basis of their co-ordinate liability as defaulting fiduciaries.

   5.        Alternatively, if:

   (a)Mr Nankervis and Mr Barclay entered into the Agreement with Mr Tonuri (which is denied);

   (b)as a consequence, the Applicants succeed in their claim against Mr Nankervis for breach of fiduciary duty; and

   (c)the Applicants do not succeed in their claims against Mr Barclay and/or Oliver Hume for breach of fiduciary duty,

   then Mr Nankervis claims equitable contribution by those other parties on the basis of their co-ordinate liability as knowing participants in his breach of fiduciary duty as set out in the following paragraphs.

   6.Entering into the Agreement constituted a dishonest and fraudulent design on the part of Mr Nankervis in breach of his duties as a fiduciary.

   7.        At all material times, Mr Barclay knew that:

   (a)Mr Nankervis was employed by the First Applicant as Senior Development Manager;

   (b)       the Fossil Site (Lot 170) was worth more than $1,454,545.
   ...

   8.Mr Barclay knowingly participated in this breach of fiduciary duty by Mr Nankervis.

   8A.     Oliver Hume benefited from Mr Barclay’s entry in to this Agreement by:

   (a)the receipt of commission from TETN (Two Eight Two Nine Pty Ltd) or Mr Tonuri upon the purchase of the Fossil Site from the Second Applicant; and/or

   (b)the receipt of commission as the seller’s real estate agent upon the sale of lots in the development undertaken by TETN on the Fossil Site, which became known as the Outlook.

   9.… Oliver Hume knowingly participated in this breach of fiduciary duty by Mr Nankervis.

   Mr Barclay’s defence to Nankervis’ statement of cross-claim

8. In his defence to Mr Nankervis’ statement of cross-claim, Mr Barclay largely repeats his pleaded defence to the applicant’s claims and denies participating in any breach of fiduciary duty by Mr Nankervis.

   Oliver Hume SEQ’s defence to Mr Nankervis’ statement of cross-claim

9. Oliver Hume SEQ denies that Mr Nankervis is entitled to any equitable contribution from it, and says that any dishonest or fraudulent conduct by Mr Barclay was not within the ordinary scope of his duty or authority as a director or employee or agent of Oliver Hume SEQ. It also claims that it had no knowledge of the alleged conduct of Mr Nankervis or Mr Barclay.

10. Oliver Hume SEQ also denies having received any benefit from Mr Barclay’s entry into the agreement with Mr Tonuri and Mr Nankervis as it did not receive any commission from any person or entity at all upon the purchase of Lot 170 from Investa Residential and was not engaged as the seller’s real estate agent upon sale of lots in the development undertaken by Two Eight Two Nine on Lot 170 or receive any commission for such sales.

    Consideration

11. The cross-claim of Mr Nankervis is referable to Lot 170 and any breach of fiduciary obligation by him in respect of that property. I have found that Mr Barclay and Oliver Hume SEQ were not in a fiduciary relationship with either of the applicants in relation to Lot 170, and therefore neither respondent breached any fiduciary obligation to either of the applicants in that respect. However, Mr Nankervis was in a fiduciary relationship with the applicants in relation to Lot 170, and breached relevant fiduciary obligations. Mr Nankervis claims equitable contribution by Mr Barclay and Oliver Hume SEQ on the basis of their co-ordinate liability as knowing participants in his breach of fiduciary duty.

12. Mr Nankervis does not specifically plead “knowing assistance” by Mr Barclay and Mr Nankervis in his breach of fiduciary obligation in terms of the liability contemplated by the well-known case Barnes v Addy [1870] LR 9 Ch App 244. Although this appears to be the basis of his cross-claim. He does not particularise his claim by reference to relevant facts. For this reason Mr Nankervis’ cross-claim cannot be substantiated and should be dismissed. There is no claim, so far as I can tell, that Mr Barclay has “received trust property” as is generally understood when parties make claims pursuant to the principles articulated in Barnes v Addy.

13. The issue of accessorial liability in equity has been vexed since the decision in Barnes v Addy. In light of that decision, for many years accessorial liability would only be imputed where a person had assisted with knowledge in a dishonest and fraudulent design on the part of the trustees (per Lord Selbourne LC in Barnes v Addy at 252). A modern interpretation was accorded to these principles however in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, where the Privy Council found that accessorial liability did not depend on knowledge in a dishonest and fraudulent design.

14. Authoritative explanations of relevant principles can be found in the decisions of the High Court in Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 and Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, and the decision of the Full Court of this Court in Grimaldi.

15. In Farah, Gleeson CJ and Gummow, Callinan, Heydon and Crennan JJ discussed the “second limb” of Barnes v Addy in the following terms:

    160.As conventionally understood in Australia, the second limb makes a defendant liable if that defendant assists a trustee or fiduciary with knowledge of a dishonest and fraudulent design on the part of the trustee or fiduciary.

    161.Several points of a general nature should be made here. The first concerns the scope of the second limb. This was not expressed by Lord Selborne LC as an exhaustive statement of the circumstances in which a third party who has not received trust property and who has not acted as a trustee de son tort nevertheless may be accountable as a constructive trustee. Before Barnes v Addy, there was a line of cases in which it was accepted that a third party might be treated as a participant in a breach of trust where the third party had knowingly induced or immediately procured breaches of duty by a trustee where the trustee had acted with no improper purpose; these were not cases of a third party assisting the trustee in any dishonest and fraudulent design on the part of the trustee.

    162.Secondly, the distinction has been recognised in the Australian case law but, on one reading of Royal Brunei Airlines Sdn Bhd v Tan, may have been displaced by the Privy Council in favour of a general principle of “accessory liability” expressed as follows:

    A liability in equity to make good resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation. It is not necessary that, in addition, the trustee or fiduciary was acting dishonestly, although this will usually be so where the third party who is assisting him is acting dishonestly. “Knowingly” is better avoided as a defining ingredient of the principle.

    163.Thirdly, whilst the different formulations of principle may lead to the same result in particular circumstances, there is a distinction between rendering liable a defendant participating with knowledge in a dishonest and fraudulent design, and rendering liable a defendant who dishonestly procures or assists in a breach of trust or fiduciary obligation where the trustee or fiduciary need not have engaged in a dishonest or fraudulent design. The decision in Royal Brunei has been referred to in this Court several times but not in terms foreclosing further consideration of the subject in this Court, in particular, further consideration of the apparent necessity to displace the acceptance in Consul Development Pty Ltd v DPC Estates Pty Ltd of the formulation of the second limb of Barnes v Addy were Royal Brunei to be adopted in this country. Until such an occasion arises in this Court, Australian courts should continue to observe the distinction mentioned above and, in particular, apply the formulation in the second limb of Barnes v Addy.

    (footnotes omitted.)

16. Further, in Grimaldi the Full Court observed in summary:

    ·So-called Barnes v Addy liabilities expose a person to in personam liabilities.

    ·Liability both for knowing receipt and knowing assistance turns on what the third party knew, or had reason to know, of the circumstances constituting the breach of “trust” (recipient liability) or the “dishonest and fraudulent design” (assistance liability) (at [259]).

    ·For the purposes of the “knowing assistance” liability, the decision of the High Court in Farah has indicated beyond question in this Court that “knowledge/notice” falling within the following categories represents Australian law: that is “actual” knowledge, the wilful shutting of eyes to the obvious, wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make and knowledge of circumstances which would indicate the facts to an honest and reasonable man. Knowledge of circumstances which would put an honest reasonable man on inquiry (“constructive knowledge”) does not constitute “knowing assistance” for these purposes (at [262]).

17. In this case, Mr Nankervis’ fiduciary obligations included avoiding placing himself in a position where his personal interest and duty conflicted, and further included informing Investa of information relevant to the disposition or otherwise of Lot 170. Mr Barclay was an experienced real estate agent, and had had extensive dealings with Investa. He knew of the position Mr Nankervis held with the first applicant. I consider it most likely that Mr Barclay knew that Mr Nankervis should not be party to any arrangement involving the acquisition of Lot 170, and that Mr Nankervis had not informed Investa of his arrangement with Mr Barclay and Mr Tonuri. Mr Nankervis has not submitted that Mr Barclay was aware of other aspects of his breach of fiduciary obligation, for example withholding information from Investa concerning the work undertaken by Projex North.

18. Indeed the absence of points of pleading necessary to establish accessorial liability in terms of the principles in Barnes v Addy inevitably must be fatal to a cross-claim in these terms.

19. Further, I note that more than simple knowledge – however arrived – of Mr Nankervis’ breach of fiduciary obligation is necessary to render a third party accessory to his breach, otherwise circumstances where he merely informed third parties of the circumstances of his breach of fiduciary obligation to Investa would be sufficient to render them liable. I also note that a mere dealing is generally not considered to be assistance (see Bank of New South Wales v Adams [1984] 1 NSWLR 285 and the discussion of this point by Austin RP, “Constructive Trusts” Chapter 11 in Finn PD, Essays in Equity (The Law Book Company Limited, 1985) at pp 232-233). The third party must have performed some act (or refrained from performing some act, although there is doubt as to whether refraining from acting can constitute “assistance”: see cases cited by Paul Davies in Accessory Liability (Hart Studies in Private Law, 2015) at 107 to actively assist him, in order to achieve some level of accessorial liability. The conduct of the third party must have been in furtherance of the design of the breaching fiduciary (note Power v Ekstein [2009] NSWSC 130 at [105]; The Bell Group Ltd (In Liq) v Westpac Banking Corporation [2001] WASC 315 at [93], and the discussion in Shankar T, “The Place of the ‘Dishonest and Fraudulent Design’ Requirement in Accessorial Liability for Assisting in a Breach of Trust or Fiduciary Duty” (2014) 40(3) Monash University Law Review 793).

20. As is noted by author Paul Davies in Accessory Liability at 106:

    Assistance has been interpreted widely. It is difficult to define other than by example, and many examples could be given. As Peter Gibson J said in Baden v Societe Generale, it is ‘a simple question of fact whether or not there has been assistance … the assistance … must not be of minimal importance.
    (footnotes omitted.)

21. While it may be that Mr Barclay had knowledge of the breach of fiduciary obligation by Mr Nankervis, in the circumstances of the pleaded case I am unable to find that, by entering into an arrangement with Mr Nankervis and Mr Tonuri, Mr Barclay knowingly assisted Mr Nankervis in respect of, or participated in, Mr Nankervis’ breach of fiduciary obligations. It may be that Two Eight Two Nine, as the acquirer of Lot 170, assisted Mr Nankervis in respect of his breach of fiduciary duty to the applicants, however this was not pleaded and I am unable to make any finding as to whether this may or may not have been the case.

22. Mr Nankervis’ cross-claim against Oliver Hume SEQ is, in my view, even less persuasive than his claim against Mr Barclay. Again the manner in which the case has been pleaded by Mr Nankervis does not support findings in terms of the principles in Barnes v Addy. There is not a shred of evidence to suggest that anyone at Oliver Hume SEQ other than Mr Barclay knew anything of the arrangements involving Mr Nankervis, Mr Barclay and Mr Tonuri. No knowledge resided in Oliver Hume SEQ in respect of any design of Mr Nankervis, and, in the absence of submissions in this respect, I am not persuaded that any knowledge of Mr Barclay could be imputed to Oliver Hume SEQ for the purposes of considering accessorial liability. Further, I am not persuaded that Oliver Hume SEQ performed any act, or in any way benefited, from the arrangement whereby Two Eight Two Nine acquired Lot 170. Oliver Hume SEQ denied that it received any commission from the sale. No case to the contrary has been established.

23. The appropriate order is that Mr Nankervis’ cross-claim against Mr Barclay and Oliver Hume SEQ be dismissed.

    2.        Mr Barclay against Mr Nankervis

24. Materially, Mr Barclay’s statement of cross-claim brought against Mr Nankervis provides:

    4.        If:

    (a)the Cross-Claimant and Cross-Respondent entered into the Agreement with Tonuri (which is denied); and

    (b)as a consequence, the Applicants succeed in their claims against the Cross-Claimant and Cross-Respondent for breach of fiduciary duty,

    the Cross-Claimant claims equitable contribution by the Cross-Respondent.

    5.        Further or alternatively:

    (a)if the Cross Claimant, on behalf of the Fourth Respondent, accepted the Applicant’s offer from the First Respondent by email dated 27 November 2008 to act for the Applicants in relation to the Fossil Site (which is denied); and

    (b)as a consequence, the Cross Claimant relied on the Cross-Respondent’s email dated 27 November 2008 in sourcing a buyer for a contract price on the same terms as the previous contract to Brittains Road Pty Ltd; and

    (d)as a consequence the Applicants succeed with their claims against the Cross-Claimant and Cross-Respondent for breach of fiduciary obligations and breach of confidence; then

    (e)the Cross Claimant has suffered loss and damage as a result of the Cross-Respondent’s breach of employment and/or breach of fiduciary obligations;

    (f)the loss and damage is the amount the Cross Claimant is liable to the Applicants for.

    Mr Nankervis’ defence to Mr Barclay’s statement of cross-claim

25. In his defence to Mr Barclay’s statement of cross-claim to which he is named as the cross-respondent, Mr Nankervis says, materially, that he objects in point of law to the allegations therein and says that no relevant obligation was owed by him to Mr Barclay to give rise to the alleged cross-claim for damages.

    Consideration

26. This cross-claim is premised upon the success of the applicants against Mr Barclay for breach of fiduciary duty in respect of the arrangement with Mr Tonuri. Again, this claim appears to be limited to matters concerning Lot 170.

27. As the applicants were unsuccessful in their primary claim against Mr Barclay, determination of this cross-claim is presumably not required.

28. The appropriate order is that the cross-claim be dismissed.

    3.        Mr Barclay against Oliver Hume SEQ

29. In his statement of cross-claim brought against Oliver Hume SEQ, Mr Barclay says, materially:

    4.On 24 August 2011 the Applicants made a claim on the Second Respondent for damages alleged to arise from the Second Respondent’s breach of contract and negligent breach of duty to the Applicants whilst the Second Respondent was acting in his professional capacity as employee, director or servant or agent of the Cross-Respondent.

    5.In the premises, if insofar as any liability is held to rest upon the Second Respondent, the Cross-respondent is liable to indemnify the Second Respondent.

    Oliver Hume SEQ’s defence to Mr Barclay’s statement of cross-claim

30. In its defence to Mr Barclay’s statement of cross-claim brought against it, Oliver Hume SEQ says, materially:

    4.        As to paragraphs 4 and 5 of the cross-claim the fourth respondent:

    a.Says that any conduct giving rise to a claim for breach of contract or breach of duty alleged against the second respondent:

    (i)did not arise from matters which were within the scope or authority of the second respondent’s duties as a director, employee or agent of the fourth respondent;

    (ii)was, in breach of the duties which the second respondent owed the fourth respondent by reason of his position as a director and employee of the fourth respondent;

    b.Otherwise repeats and relies on the matters contained in the fourth respondent’s cross-claim against the second respondent as filed herein;

    c.In the premises denies there is any obligation on the fourth respondent to indemnify the second respondent as pleaded or at all.

1. In the absence of submissions from Mr Barclay as to the basis upon which Oliver Hume SEQ is liable to indemnify him in respect of any breach of contract or duty by him to the applicants, I am unable to identify any basis upon which such right of indemnity exists. I am satisfied that Mr Barclay owed a fiduciary obligation to the second applicant in relation to Lot 191, and that he breached that fiduciary obligation.

2. Mr Barclay was a senior employee of Oliver Hume SEQ, engaged in providing services as a real estate agent to the second applicant. As I noted earlier in this judgment, Mr Barclay was subject to an obligation of disclosure in respect of the acquisition of Lot 191 by corporate bodies associated with his spouse. I accept the evidence of Mr Dearlove that for a real estate agent acting for a property developer to sell a property to party with whom the real estate agent is associated, without disclosing that association to the property developer, is “perhaps best described as a cardinal sin in the real estate world” (transcript 9 October 2014 p 2790 ll 25-26). I am satisfied that conduct of this nature was a breach of Mr Barclay’s duty to Oliver Hume SEQ as an employee, and also as a director in that he had placed his personal interests ahead of his duty to Oliver Hume SEQ.

3. I am satisfied that this cross-claim must fail.

   4.        Mr Barclay against Vero Insurance Limited

4. In his statement of cross-claim brought against Vero Insurance Limited (“Vero”), Mr Barclay pleads that:

   4.… at all relevant times the Second Respondent was acting within the authority of his relevant positions referred to at paragraph 3 above.

   5.On 30 September 2010 the Fourth Respondent agreed with the Cross-respondent that the Cross-respondent would provide professional indemnity insurance cover to the Fourth Respondent in consideration for the Fourth Respondent paying the premium specified in policy number LPP011343415 (“Policy of Insurance”).

   6.        Relevantly, the Policy of Insurance provided:

   (a)       Definitions

   (i)“Claim” means any demand made by a third party upon the insured for compensation, however conveyed, including a writ, statement of claim, application or other legal or arbitral process;

   (ii)       “Insured” means:

   A.the legal entity or entities specified in the Schedule; and/or;

   B.past and/or present employees of the legal entity or entities specified in the Schedule, but only in his or her capacity as such;

   (iii)“Insurer” means Vero Insurance Limited ABN 48 005 297 807;

   (iv)“Insured Costs” means all necessary and reasonable costs and expenses incurred by the insurer, or by the Insured with the Insurer’s prior written consent, in defending, investigating, or settling and Claim or Claims (not being Inquiry Costs or claimant’s costs and expenses);

   (v)“Principal” means a sole practitioner, a partner of a firm or a director of a company;

   (vi)“Professional Services” means the professional business described in the Schedule, and no other, of the legal entity or entities specified in the Schedule;

   (b)       Insurance Preamble

   The Insured and the Insurer agree that the Insurer will provide insurance on the terms of this Policy.

   (c)       Insuring Clause

   The Insurer will indemnify the Insured against civil liability for compensation and claimant’s costs in respect of any Claim or Claims first made against the Insured and notified to the Insurer during the Period of Insurance resulting from the conduct of the Professional Services but not in respect of any such Claim or Claims resulting from any act, error or omission occurring or committed prior to the Retroactive Date.

   (d)       Insured Costs

   The Insurer will, in addition to the Limit of Indemnity, pay Insured Costs, provided that if the total amount of compensation and claimant’s costs and expenses required to dispose of the Claim or Claims exceeds the Limit of Indemnity, the liability of the Insurer for such Insured Costs shall be only that proportion which the Limit of Indemnity bears to the total amount of compensation and claimant’s costs and expenses required to dispose of the Claim or Claims.

   (e)       Claims Notifications

   Every claim made against the Insured shall be notified to the Insurer as soon as practicable and in any event prior to expiry of the Period of Insurance, and every letter, demand, writ summons and legal process pertaining to such Claim shall be forwarded to the Insurer as soon as practicable after receipt.

   7.By the Schedule to the Policy of Insurance, Insured includes OHA (Oliver Hume Australia Pty Ltd) and the Fourth Respondent.

   8.        …the Second Respondent is an insured under the Policy of Insurance.

   …

   11.On 12 August 2011 the Second Respondent, by letter from Warlow Scott Lawyers to Carter Newell Lawyers on behalf of the Cross-respondent, claimed from the Cross-respondent coverage under the Policy of Insurance.

   12.In breach of the Policy of Insurance, the Cross-respondent, by letter dated 8 November 2011 from Carter Newell Lawyers on its behalf to Warlow Scott Lawyers on behalf of the Second Respondent, has refused to indemnify the Second Respondent in terms of the Policy of Insurance.

   13.In the premises, if insofar as any liability is held to rest upon the Second Respondent, the Cross-respondent is liable to indemnify the Second Respondent.

   Vero Insurance Limited’s defence to Mr Barclay’s statement of cross-claim

5. Vero denies that it is liable to indemnify Mr Barclay. In its defence to Mr Barclay’s statement of cross-claim brought against it, Vero materially states that:

   ·Mr Barclay’s conduct was contrary to and in breach of the obligations which he owed to Oliver Hume SEQ;

   ·not conduct engaged in as an agent, employee, or director of Oliver Hume SEQ within the meaning of those terms as used in the policy of insurance;

   ·in the premises, Mr Barclay is not an ‘insured’ for policy purposes;

   ·pursuant to the Dishonest, Fraudulent or Criminal Acts exclusion of the Policy, Vero is not liable to indemnify for any liability “arising directly or in respect of any dishonest, fraudulent, criminal or malicious act or omission by the Insured”;

   ·Mr Barclay’s conduct was dishonest and fraudulent within the meaning of those terms as used in the policy of insurance;

   ·it is not in breach of the terms of the insurance policy;

   ·it has declined to indemnify Mr Barclay;

   ·it has provided Mr Barclay with reasons for so declining; and

   ·in the premises, it is not liable to indemnify Mr Barclay.

6. Only very brief submissions were filed by Vero in respect of this cross-claim, and no submissions by Mr Barclay. Further:

   ·Mr Barclay has led no evidence about this aspect of the case;

   ·Mr Barclay has not proven the relevant contract of insurance upon which he relies;

   ·Mr Barclay has not established the basis upon which Vero could be liable in this cross-claim.

7. On the material before me, for the reasons I have just given, and for similar reasons to those for which I have dismissed Mr Barclay’s cross-claim against Oliver Hume SEQ, I consider that this cross-claim should be dismissed.

   5.        Oliver Hume SEQ against Mr Barclay filed 15 November 2013

8. There are in fact two statement of cross-claims filed in these proceedings by Oliver Hume SEQ and brought against Mr Barclay. The first was filed on 10 December 2012 and the second on 15 November 2013. They are both substantially similar, however differ slightly in their terms.

9. The most recent statement of cross-claim (filed 15 November 2013) materially provides:

   3.The fourth respondent says that, if it is liable to the applicants on the grounds alleged by the applicants (which is denied) then:

   (a)the second respondent by his conduct purported to act as the agent of the fourth respondent;

   (b)the second respondent by reason of his position as a director and employee or agent of the fourth respondent owed duties to the fourth respondent to conduct his activities with due skill and care and having regard to the interests of the fourth respondent;

   (c)the second respondent whilst a director of the fourth respondent had an obligation to exercise his powers and discharge those duties in good faith in the best interests of the fourth respondent and for a proper purpose;

   (d)the second respondent had a duty not to engage in conduct which was outside the scope of his authority as a director or employee or agent of the fourth respondent;

   (e)if such conduct as alleged by the applicants has been engaged in by the second respondent then such conduct was:

   (i)contrary to and in breach of the obligations which the second respondent owed to the fourth respondent; and

   (ii)undertaken without the knowledge or approval of the fourth respondent.

   4.Further, as a consequence of the matters pleaded in paragraphs 2 and 3 aforesaid, if:

   (a)The fourth respondent is found to be liable to the applicants in accordance with the matters alleged in the statement of claim, then;

   (b)Such liability has been caused or contributed to by the conduct of the second respondent as particularised aforesaid;

   (c)The second respondent has acted in breach of the duties which he owed to the fourth respondent;

   (d)The second respondent has engaged in such activities for an improper purpose, namely for the benefit of the second respondent;

   (e)in the premises, the second respondent is liable to indemnify or otherwise pay damages to the fourth respondent for any liability which the fourth respondent has to the applicants.

   5.Further or in the alternative to the matters pleaded in paragraph 4 aforesaid, the fourth respondent:

   (a)Has suffered loss and damage as a consequence of the conduct, breach of contract and/or breach of fiduciary duty of the second respondent as particularised aforesaid;

   (b)The nature and extent of that loss is such amount as the fourth respondent shall be found to be liable to the applicants.

   Mr Barclay’s defence to Oliver Hume SEQ’s statement of cross-claim

10. In his defence to Oliver Hume SEQ’s statement of cross-claim filed 15 November 2013, Mr Barclay says, materially, that:

    3.The cross-respondent does not know and cannot admit the allegations contained in paragraph 3 of the cross-claim and says further that such matters are a question of law to be determined by the Court.

    4.As to the allegations contained in paragraph 4 of the cross-claim the cross-respondent:

    (a)does not admit the allegations in paragraphs 4(a) and says such matters are a question of law to be determined by the Court;

    (b)       denies the allegations in paragraph 4(b), (c), (d), and (e); and

    (c)repeats and relies on the matters pleaded herein and in the cross-respondent’s defence to the applicant’s statement of claim filed 17 October 2013.

    5.The cross-respondent denies all the allegations in paragraph 5 of the cross-claim for the reasons set out herein and in the cross-respondent’s defence filed 15 November 2013.

    6.Save as aforesaid the cross-respondent denies each and every allegation contained in the cross-claimant’s cross-claim and repeats and relies on the cross-respondent’s defence filed on 15 November 2013.

11. In my view this cross-claim can be dealt with swiftly.

12. In the absence of submissions of any detail in relation to these pleadings, I will treat the second statement of claim filed by Oliver Hume SEQ on 15 November 2013 as superseding (and, in effect, amending) the first statement of claim filed on 10 December 2012.

13. As a matter of law, I have found that Oliver Hume SEQ is liable to the second applicant in respect of the conduct of Mr Barclay concerning Lot 191. However it has not been established in the circumstances of this case that, other than Mr Barclay himself, anyone at Oliver Hume SEQ had any knowledge of the conduct of Mr Barclay which gave rise to the breach of fiduciary obligation by both Oliver Hume SEQ and Mr Barclay.

14. For reasons I canvassed earlier in this judgment, it cannot seriously be disputed that, by his conduct in respect of Lot 191, Mr Barclay breached not only his duty to the second applicant, but his duty to his employer Oliver Hume SEQ, of which he was also a director.

15. In my view this cross-claim succeeds and Oliver Hume SEQ is entitled to orders to that effect.

I certify that the preceding four hundred and fifteen (415) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

Associate:

Dated:       10 September 2015