McMillan v Coolah Home Base Pty Ltd

[2024] NSWCA 138

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

McMillan v Coolah Home Base Pty Ltd [2024] NSWCA 138

Hearing dates:

18 and 19 March 2024

Date of orders:

5 June 2024

Decision date:

05 June 2024

Before:

Ward P at [1]; Leeming JA at [480]; Stern JA at [481]

Decision:

1.   Appeal dismissed with costs.

Catchwords:

REAL PROPERTY – caravan park with entitlement to exclusive long-term sites through share in company which owned the land – at first instance, claim by purchasers of shares to equitable interest in sites – no challenge to finding that no equitable interest in the sites was acquired – challenge to rejection of allegation that alleged representations made that the purchasers were buying sites as land, as well as shares – claim for specific performance – company placed into liquidation caravan park sold to company – indefeasibility of title

CORPORATIONS – oppression – company placed into voluntary administration and caravan park land sold to company owned by same directors – where primary judge found that certain other conduct of affairs of company was oppressive – whether primary judge failed to find sale of caravan park itself amounted to oppressive conduct – whether relief ordered was sufficient to remedy oppressive conduct

CONSUMER PROTECTION – misleading or deceptive conduct – where appellants did not challenge primary judge’s finding that there had been no reliance on the representations said to constitute misleading and deceptive conduct – whether primary judge erred in failing to find misleading or deceptive conduct by the making of representations as to sale of sites as land – whether misleading or deceptive conduct in relation to assurances that caravan park could not be sold without shareholder approval and/or as to whether cabins were fixtures – whether adequate reasons

CONSUMER PROTECTION – unconscionable conduct – where alleged unconscionable conduct was constituted by a “course of conduct” of disparate acts – alleged failure of primary judge properly to address the pleaded claim – adequacy of reasons

CONSUMER PROTECTION – harassment or coercion – whether correspondence following sale of caravan park amounted to harassing or coercive conduct – where primary judge had found that no damage had resulted from the alleged misconduct

Legislation Cited:

Australian Consumer Law, Sch 2 of the Competition and Consumer Act 2010 (Cth), ss 18, 20, 21, 22A, 50, 237

Australian Securities and Investments Commission Act 2001 (Cth), Part 2 Div 2, ss 12CA, 12CB

Conveyancing Act 1919 (NSW), s 66G

Corporations Act 2001 (Cth), ss 232, 233, 442C, 1324

Defence Service Homes Act 1918 (Cth), s 4

Local Court Act 2007 (NSW), s 34A

Real Property Act 1900 (NSW), s 42

Residential (Land Lease) Communities Act 2013 (NSW), s 8

Retirement Villages Act 1999 (NSW), s 40

Trade Practices Act 1974 (Cth), s 51AC

Uniform Civil Procedure Rules 2005 (NSW), r 14.8

Cases Cited:

ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90

ACCC v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40

ACCC v Retail Food Group Ltd [2022] FCA 961

Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Argy v Blunts (1990) 26 FCR 112

ASIC v Accounts Control Management Services Pty Ltd [2012] FCA 1164

ASIC v AGM Markets Pty Ltd (in liq) (No 3) (2020) 275 FCR 57; [2020] FCA 208

ASIC v Kobelt (2019) 267 CLR 1; [2019] HCA 18

Australian Competition and Consumer Commission v Valve Corporation (No 3) [2016] FCA 196

Baltic Shipping Co v Dillon (1993) 176 CLR 344; [1993] HCA 4

Barnes v Addy (1874) LR 9 Ch App 244

Breskvar v Wall (1971) 126 CLR 376; [1971] HCA 70

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14

Coolah Home Base Pty Ltd v Tait [2022] NSWCATAP 324

Coolah Home Base Pty Ltd v Tait [2023] NSWCATAP 3

Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70

Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193

Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486; [2012] HCA 39

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

Frazer v Walker [1967] 1 AC 569

Giasoumi v Hutton [1977] VR 294

Guest v Guest [2022] UKSC 27; [2023] 1 All ER 695

Henville v Walker (2001) 206 CLR 459; [2001] HCA 52

Jarvis v Swan Tours [1973] 1 All ER 71

John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19

Jonval Builders Pty Ltd v Commissioner for Fair Trading (2020) 104 NSWLR 1; [2020] NSWCA 233

LPD Holdings (Aust) Pty Ltd v Phillips [2013] QSC 225

Lukaszewicz v Polish Club Ltd [2019] NSWSC 446

Mayer v Coe [1968] 2 NSWR 747

McMillan v Coolah Home Base Pty Ltd (No 4) [2022] NSWSC 584

McMillan v Coolah Home Base Pty Ltd (No 5) [2022] NSWSC 1589

McMillan v Coolah Home Base Pty Ltd [2023] NSWCA 172

Monroe Topple and Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110; [2002] FCAFC 197

Moore v Scenic Tours Pty Ltd (No 2) [2017] NSWSC 733

Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114

Nawar v Newcrest Mining Ltd [2022] FCA 424

NSW Lotteries Corporation Pty Ltd v Kuzmanovski (2011) 195 FCR 234; [2011] FCAFC 106

Productivity Partners Pty Ltd (t/as Captain Cook College) v ACCC (2023) 297 FCR 180; [2023] FCAFC 54

Re Bacchus Distillery Pty Ltd (Administrators Appointed) [2014] VSC 111

Re Smith (2006) 58 ACSR 410; [2006] NSWSC 780

Scott v Port Hinchinbrook Services Ltd [2017] QSC; 320 FLR 46

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8

Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19

Story v Advance Australia Bank (1993) 31 NSWLR 722

Suttor v Gundowda Pty Ltd (1950) 81 CLR 418

Ta Lee Investment Pty Ltd v Antonios [2019] NSWCA 24

Tait v Coolah Home Base Pty Ltd [2021] NSWCATCD (5 July 2021)

Taylor v Dickens [1998] 1 FLR (Eng) 806

Unique International College Pty Ltd v ACCC (2018) 266 FCR 631; [2018] FCAFC 155

Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459; [1985] HCA 68

White v Tomasel [2003] 2 Qd R 438

Texts Cited:

ASIC’s disclosure requirements in Regulatory Guide 67

Janice Gray et al, Property Law in New South Wales (LexisNexis, 5th ed 2022)

Lockhart, The Law of Misleading or Deceptive Conduct (LexisNexis, 6th edn 2023)

M Jebeile, ‘Local Court Amendment (Company Title Home Unit Disputes) Act’ 2013 (2013) 27(7) Australian Property Law Bulletin 144

Miller, Australian Competition and Consumer Law Annotated (Thomson Reuters, 46th edn 2024)

The Encyclopaedic Australian Legal Dictionary (published by LexisNexis Australia)

The Essential Guide to Mortgage Law in Australia (2013, 2nd ed, Lexis Nexis Australia) set out at [1.42]

Category:

Principal judgment

Parties:

Geoffrey Ian McMillan (First Appellant)
David Arthur Darch (Second Appellant)
Helen Dawn Waugh (former Third Appellant)
Margaret Joy Vale (Fourth Appellant)
Jill Cook (Fifth Appellant)
Lee Marilyn Tait (Sixth Appellant)
Jennifer Sue Axtel (Seventh Appellant)
Sietske Elisabeth Brown (Eighth Appellant)
James Terence James (Ninth Appellant)
Neville John Kelly (Tenth Appellant)
Susan Anne Kelly (Eleventh Appellant)
Christine Margaret McMillan (Twelfth Appellant)
Janne Marnie Robertson (Thirteenth Appellant)
John Daniel Sheahan (Fourteenth Appellant)
Richard Jim Squire (Fifteenth Appellant)
Susan Janet Squire (Sixteenth Appellant)
Leslie Townsend (Seventeenth Appellant)
Allana Mary Townsend (Eighteenth Appellant)
Coolah Home Base Pty Ltd (First Respondent)
Coolah Tourist Park Pty Ltd (Second Respondent)
Janet Marilyn Kelly (Third Respondent)
Graeme George Booker (Fourth Respondent)
Cameron Hamish Gray (former Fifth Respondent)
Ronald Dean-Willcocks (former Sixth Respondent)
Home Base Solutions Pty Ltd (Seventh Respondent)

Representation:

Counsel:
Mr P Vogel (Solicitor) (Appellants)
Mr AJ Macauley (Second, Third, Fourth and Seventh Respondents)

Solicitors:
The People’s Solicitors (Appellants)
Sullivan Fernan Lawyers Pty Ltd (First Respondent)
Bridges Lawyers (Second, Third, Fourth, Seventh Respondents)
Brown Wright Stein Lawyers (Fifth and Sixth Respondents)

File Number(s):

2022/00383423; 2023/00119823

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity Division

Citation:

[2022] NSWSC 584

Date of Decision:

13 May 2022

Before:

Parker J

File Number(s):

2020/0044327

HEADNOTE

[This headnote is not to be read as part of the judgment]

Commencing in 2012, the third and fourth respondents (Ms Kelly and Mr Booker (the directors)) established a “home base” for “grey nomads” (people who are retired or semi-retired and live for all or most of the time out of a caravan or motorhome) in Coolah in central western NSW. The directors incorporated the first respondent (CHB) to purchase and hold the caravan park land, and the seventh respondent (HBS) to operate the caravan park (the Park). The venture was set up as a company title arrangement, with residents buying a share in CHB entitling the holder the right exclusively to occupy a specific site or allotment in the Park. Some of those sites had cabins already erected on them. On others, shareholders themselves erected cabins.

By 2016, disputes had arisen between certain of the appellants (residents at the Park) and the directors. In August 2019, while litigation was still ongoing between certain of the residents and the directors seeking access to documents of the company, CHB was placed into voluntary administration by the directors. CHB’s creditors were the directors themselves along with CHB’s professional advisors. The administration resulted in the unanimous approval by CHB’s creditors of a deed of company arrangement prepared by the directors (the DOCA), pursuant to which the Park was sold to the second respondent (CTP), another company owned by the directors. CTP continued to own and operate the Park, and the appellants continued to occupy their sites, there were disputes as to ownership of the cabins and whether the appellants were required to enter into new site arrangements with CTP in order to remain at the Park.

A suite of claims was brought by the appellants against CHB, CTP, the directors, HBS, and the administrators of CHB. The relief sought included declarations that the appellants had equitable ownership interests in their sites, orders rescinding the transfer of the Park to CTP, and compensation for alleged breaches of directors’ duties and corporate oppression as well as for alleged unconscionable conduct, harassment and coercion.

The primary judge dismissed most of the appellants’ claims, but did find that certain conduct was oppressive. The only relief deemed appropriate was to permit the appellants the opportunity to seek an order for the winding up of CHB which relief was duly granted. CHB is now in the course of liquidation.

Meanwhile the appellants secured relief in NCAT in that CTP is hold to be bound by the terms of the previous site arrangements between CHB and the appellants.

The appellants appealed, alleging error in: the findings as to whether the appellants had been promised ownership of the land; the rejection of the contentions raised as to the sale of the Park to CTP; and the dismissal of the claims as to misleading or deceptive conduct, unconscionable conduct, and harassment and coercion. The administrators were originally parties to the appeal as respondents, but a settlement was reached between them and the appellants. The only active respondents were the directors and CTP.

Held dismissing the appeal with costs (Ward P, Leeming JA, Stern JA):

1. There was no error in the primary judge’s finding that the appellants were not promised ownership of the sites as land (Ward P at [285], Leeming JA at [480], Stern JA at [481]). In particular, the primary judge had correctly identified that the appellants did not seek relief which would overcome the practical problems posed by the need to subdivide the Park if the appellants sought specific performance of the alleged promise of ownership; further, none of the exceptions to indefeasibility had arisen (Ward P at [278], [313]; Leeming JA at [480]; Stern JA at [481]).

   Frazer v Walker [1967] 1 AC 569; Breskvar v Wall (1971) 126 CLR 376; Ta Lee Investment Pty Ltd v Antonios [2019] NSWCA 24 considered.

2. The primary judge did not err in finding that the sale of the Park did not constitute oppressive conduct, as it was not the directors that caused the sale but, rather, the administrators (who were not bound by the CHB Constitution), who recommended that CHB’s creditors approve the Deed of Company Arrangement pursuant to which the Park was sold (Ward P at [307], Leeming JA at [480]; Stern JA at [481]). There was no error in the failure to order recission of the transfer of the Park, as the claim was not brought as a derivative suit on behalf of CHB, and it was not evident that CHB was capable of paying back the purchase price (Ward P at [308], Leeming JA at [480]; Stern JA at [481]).

3. Allegations of misleading or deceptive conduct based on representations must identify with particularity the representations said to have been made. There was no error in the primary judge addressing the claim by reference to the stated particulars (Ward P at [335], Leeming JA at [480]; Stern JA at [481]). There was no challenge to his Honour’s findings that the appellants had not established reliance on the alleged representations, which were fatal to a claim for damages for misleading or deceptive conduct (Ward P at [343], Leeming JA at [480]; Stern JA at [481]).

   Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25; Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8 considered.

4. The years-long course of behaviour by the respondents (comprising several disparate aspects not directly connected with each other) could not be classified as a course of “conduct” for the purposes of s 21 of the Australian Consumer Law, nor could it be classified as a “system” of conduct under s 21(4)(b) (Ward P at [430], Leeming JA at [480]; Stern JA at [481]); nor was the allegation of unconscionable conduct in respect of each of the alleged acts made out (Ward P at [431]-[434], Leeming JA at [480]; Stern JA at [481]).

   ASIC v Kobelt (2019) 267 CLR 1; [2019] HCA 18; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 at 461; [1983] HCA 14; ACCC v Quantum Housing Group Pty Ltd (2021) 285 FCR 133; [2021] FCAFC 40; ACCC v Lux Distributors Pty Ltd [2013] FCAFC 90; Unique International College Pty Ltd v ACCC (2018) 266 FCR 631; [2018] FCAFC 155; Productivity Partners Pty Ltd (t/as Captain Cook College) v ACCC (2023) 297 FCR 180; [2023] FCAFC 54 considered.

5. There was no error in the conclusion that the directors’ (and the solicitors’) correspondence regarding entry into new Residential Site Agreements and incorrect assertions as to the ownership of cabins after sale of the Park did not amount to harassment or coercion; nor was there error in the finding that, in any event, no damage was shown to have resulted from that correspondence (Ward P at [453], Leeming JA at [480]; Stern JA at [481]).

6. The primary judge did not err in refusing a separate hearing as to damages, nor in dismissing the appellants’ contention that damages for disappointment and distress would have been in the order of $200,000 per plaintiff (Ward P at [476]-[477], Leeming JA at [480]; Stern JA at [481]). Separately, there was no merit to the complaint that the primary judge should have fashioned relief to give the practical outcome sought by the appellants, based on some kind of idiosyncratic notion of justice (Ward P at [476], Leeming JA at [480]; Stern JA at [481]).

JUDGMENT

1. WARD P: This appeal concerns a dispute between a number of residents (or in some cases former residents – see AT 54.35) of a caravan park in Coolah, New South Wales (the Park) on the one hand (the appellants) and, on the other hand, the former registered proprietor of the land on which the caravan park is located (the first respondent, Coolah Home Base Pty Ltd, now in liquidation, to which I will refer as CHB), the current registered proprietor of the land (the second respondent, Coolah Tourist Park Pty Ltd, to which I will refer as CTP), the two directors of those companies (Ms Janet Kelly and her partner, Mr Graeme Booker, the third and fourth respondents) and another company controlled by Ms Kelly and Mr Booker (Home Base Solutions Pty Ltd, to which I will refer as HBS), which held a management role at the Park.

2. Each of the appellants holds an A Class share in CHB, entitling the appellant, relevantly, to exclusive use and occupation of a particular allotment within the Park. In some cases, there was already a cabin on the shareholder’s allotment; in other cases, the shareholder erected a cabin on the allotment.

3. When the appeal proceedings were commenced, there were two further respondents, Mr Cameron Gray and Mr Ronald Dean-Willcocks, those being the administrators of a Deed of Company Arrangement entered into after CHB went into voluntary administration in 2019 (the Administrators). The Court was informed that settlement was reached with those parties (leading to the filing of one of a number of amended notices of appeal) (see AT 2.37). Those respondents therefore played no role in the hearing of the appeal. Nor did CHB, which is in the course of being wound up pursuant to orders made by the primary judge on 8 July 2022 following delivery of reasons for judgment in this matter on 13 May 2022 (McMillan v Coolah Home Base Pty Ltd (No 4) [2022] NSWSC 584 (the principal judgment)). A submitting appearance was filed on behalf of CHB.

4. The only active respondents on the appeal therefore were the second to fourth and seventh respondents, to which I will refer collectively as the Kelly-Booker respondents. Where I refer only to Ms Kelly and Mr Booker, jointly, I will generally refer to them as the directors.

5. Apart from the order made for CHB to be wound up (Order 2) by way of remedy for the oppressive conduct that the primary judge found had occurred, the appellants’ claims against CHB and the Kelly-Booker respondents were dismissed on 8 July 2022 (Order 4). The appellants’ claims against the Administrators had earlier been dismissed (on 23 June 2022).

6. Costs orders were made on 22 November 2022 (McMillan v Coolah Home Base Pty Ltd (No 5) [2022] NSWSC 1589, to which I will refer as the costs judgment). The appellants only appeal from those costs orders if the appeal succeeds. A sum of $10,000 was paid into Court as security for the Kelly-Booker respondents’ costs of the appeal following an order made by Mitchelmore JA (McMillan v Coolah Home Base Pty Ltd [2023] NSWCA 172).

7. At the commencement of the hearing of the appeal, the appellants sought leave to file a Third Amended Notice of Appeal. A notice of motion seeking that relief had been filed on 26 February 2024. The amendments in question were as to the relief sought if the appeal were to succeed (three additional orders being sought, namely Orders 3A, 3B and 3C – see below at [187]).

8. The Kelly-Booker respondents opposed the grant of leave for the filing of the Third Amended Notice of Appeal, essentially on the basis that the claims for relief the subject of the proposed amendments had no merit and could not succeed. They also pointed to the lack of explanation as to why the matters were only now sought to be raised and to the significant delay in propounding this latest notice of appeal. As to the question of delay, the Kelly-Booker respondents noted that substantial indulgence has already been afforded to the appellants in these proceedings, in particular as to the extension of time in which to file the Notice of Appeal (referring to Mitchelmore JA’s judgment in this regard).

9. The appellants nevertheless maintained that the amendment should be allowed, citing Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [14] (per French CJ), on the basis that the amendments were necessary to determine the real question in controversy. The only explanation for the late application for further amendment to the notice of appeal was that the additional relief claimed by the proposed Orders 3A-3C had been omitted from the notice of appeal (an omission apparently not appreciated until the Kelly-Booker respondents in their submissions raised the issue that there were matters raised in the appeal for which no corresponding order was sought from the Court – see AT 2.44-47).

1. The appellants further argued that it would be open to the Court to grant the relief sought in the proposed additional orders even were leave for the requested amendment to the notice of appeal to be refused, maintaining that no prejudice would be occasioned to the Kelly-Booker respondents by the amendments.

2. In turn, in the event that such leave were to be granted, the Kelly-Booker respondents sought leave to rely on a Notice of Contention, on the basis that it arises in response to the proposed Order 3A (which seeks an order that CTP transfer the land back to CHB). Remarkably, given that the appellants were belatedly seeking an indulgence to amend their notice of appeal so as to include a claim for the very relief to which the Notice of Contention responds, the appellants opposed leave being given to the Kelly-Booker respondents to rely on the Notice of Contention. The appellants argued that if such leave were to be granted the point sought to be raised (indefeasibility of title) would not succeed on the basis that the appellants disavow any challenge to the indefeasibility of CTP’s title to the land. The appellants maintain that they merely seek orders for CTP (i.e., the current registered proprietor) to transfer the land back to CHB (a company in liquidation) (a proposition that I deal with in due course).

3. After hearing short oral argument, the Court granted leave for the filing of both the Third Amended Notice of Appeal and the Notice of Contention by 4pm 18 March 2024. While the explanation by the appellants for their delay in seeking the amendment was hardly satisfactory, the amendments to the grounds of appeal in essence go simply to the proposed relief if the appeal were to succeed; and no relevant prejudice was identified by the Kelly-Booker respondents if that additional relief were articulated in the notice of appeal provided that they were permitted to rely on the Notice of Contention. The complaint by the appellants as to the application for leave to file the Notice of Contention was unmeritorious given that it arose out of a belated application on their part.

4. That said, from my review of JusticeLink, it does not appear that the appellants have filed the Third Amended Notice of Appeal. In those circumstances, either the appellants should be taken as having chosen not to exercise the grant of leave to amend (without notifying the Court of that position) or they have failed to comply with the direction that the amended document be filed by 4pm on 18 March 2024. Given that the appellants made submissions as to the additional relief sought in the amended document, it must be assumed that they have simply failed to comply with the direction as to filing. That non-compliance should be remedied by the appellants without further delay. Directions of the Court are not aspirational. They are orders compliance with which is expected.

Background

Acquisition by CHB of the Park

14. The caravan park at Coolah (the Park) was purchased by CHB in April 2012 (see [3], [33] of the principal judgment). CHB was incorporated by Ms Kelly and Mr Booker for the purpose of the acquisition of that land. The primary judge noted that the directors’ plan was “to offer grey nomads a permanent dwelling-place in or near a regional town, readily accessible by road, which would function as a home and to which they could return during breaks in their travels” (see principal judgment at [2]).

15. Relevantly, what was put in place was a “company title” arrangement (see [4] of the principal judgment) whereby the land was held by the company (CHB), the registered proprietor; and individuals who subscribed for A Class shares in CHB (either individually or jointly) had the right to use exclusively a designated “Allotment” within the Park (corresponding with their particular share number), together with the right to use, in conjunction with others, the common property within the Park (see cl 3.1(c) of Sch 2 of CHB’s Constitution; [4], [48], [135], [147] of the principal judgment). “Allotment” is defined in the CHB constitution as meaning “a portion of land, including any buildings constructed thereon, and being one of the sites designated by numbers 1 to 60 inclusive in the plan set out in Schedule 4”.

16. Clause 2.2 of the CHB Constitution provided that “Notwithstanding any other provision in this Constitution, any proposal to sell, subdivide, mortgage, charge or otherwise encumber (including lodging of a caveat) the land, the Building, or any part thereof, shall not be put into effect without with the prior written consent of 80% of Share Holders” (see [118] of the principal judgment). The appellants place emphasis on this “80% rule” as a basis for various of their grounds of appeal, as will be explained in due course.

17. The appellants contended unsuccessfully before the primary judge that what they had acquired was a legal interest in the respective portion of the land comprising their “Allotment”; a contention which they no longer press on appeal. What they also contended (which is the subject of various of their appeal grounds) was that it was represented to them by Ms Kelly and Mr Booker (and in promotional material by which the Allotments were marketed) that they would be acquiring legal title (“real estate security”) to their Allotments.

Promotional material

18. The promotion of the Park to “grey nomads” commenced prior to settlement of the acquisition of the land by CHB in April 2012. Ms Kelly produced in evidence a PowerPoint presentation which she deposed was made at a CMCA (Campervan and Motorhome Club of Australia) Solo Network rally in Yarram, Victoria in March 2012. Ms Kelly deposed that “[w]e did two presentations of these slides at Yarram and another two at the CMCA’s Sale Rally which is for all members, not just solo travellers”. Ms Kelly deposed that the CMCA had approximately 70,000 members and that there were “about 800 solos in the Solos Network”.

19. The appellants point to the following statements contained in the PowerPoint presentation slides: “You own the property”; “all allotments are sold on a square meterage basis – pre-settlement is $65” [a clear indication that the document was prepared prior to completion of the sale in April 2012]; “Buy a site and build your own cabin”; “large sites suitable for ensuites and/or storage sheds averaged $17,000”; “Deposit to hold discount – available for vacant land only”.

20. However, it is relevant to note that there were a number of versions of the PowerPoint presentation slides, with some differences in their content. The date of those slides and other promotional material cannot be determined with precision. However, it is clear, from the content of some of the promotional materials, the approximate time at which they were created. For example, presentations that included a statement as to a discounted price before 22 April [2012] must logically have been before that date. There appear to be at least two versions of the slide show presentations used in around March 2012, the appellants quoting it seems from the latter; and a further version in late 2014/early 2015.

21. As to the difference in content, in some there is a statement that “you own the property” and in others the statement is that “you own your share of the property”. This highlights the difficulty that arises in relation to the question of reliance on any representations contained in the material, given the uncertainty as to which version of the promotional material, if any, was seen or read by which of the appellants. The first of the appellants to acquire a share in CHB was Mr Sheahan on 26 March 2012, followed by Mr and Mrs Kelly. Clearly enough, when purchasing their respective shares they cannot have seen (or relied on) later versions of the promotional material that were not then in existence. Other appellants (such as Mr McMillan on 27 July 2014 and Mr Darch on 2 February 2015) could have seen later versions of the promotional material but they might perhaps have seen one of the earlier versions of that material.

22. A promotional pamphlet was prepared by Ms Kelly in March or April 2013, and apparently continued to be used by the directors to promote the Park in 2014, which referred to the venture or arrangement there being promoted as an “unique housing solution”. In that document, there was a reference to two companies, the first of which was described as “The ownership company – Coolah Home Base Pty Ltd – [which] owns the property and issues shares to shareholders” (see principal judgment at [166]); the second being HBS, the management company. That pamphlet referred to people acquiring “an ASIC registered share in the real estate”, which “share gives you…exclusive use of your chosen allotment”. The last page of this document refers to purchasers getting shares in the company that owns the land. The document also contains statements that “You own a share of the land – a share in the whole park!” and that buying the “ASIC registered share in the real estate … gives you … “proportional ownership of the whole property””.

23. I interpose here to note that the first annual general meeting of CHB was held on 6 August 2013. At that meeting, Ms Kelly provided written detail as to the legal structure of CHB, including drawing attention to the fact that CHB was the “company [that] owns the property (the real estate)”, being “the company in which you have shares”.

24. The brochure used by the directors to promote the Park in 2014 also contained the following statements that: “Cabin and land ownership from under $90,000”; “The land is priced per square metre”; “Starting with blocks around $12,000”; and “Invest in real estate for future capital gain”; as well as references to “Real estate security”.

25. Ms Kelly deposed that in 2015 they (the directors) advertised in Caravan World magazine and that they emailed two documents to people who enquired. The appellants note that those documents include statements that: “Coolah Home Base has homes available from $45,000 to $155,000 INCLUDING real estate security”; “You own a share in the entire property”; “Proportional ownership of the real estate – your area of land is shown on your Share Certificate plus you get an equal share of the communal property”; “You have an asset that you can on-sell”; reference to “Sites for sale” (or “Selling site and cabin for $135,000”); “That share gives you exclusive access to your allotment”; and that “You have real estate security”.

26. The appellants also refer to other advertisements by CHB containing statements such as: “Where else can you buy a place to live for $65 per square metre. It is so affordable”; “[y]our investment is secure in real estate and legally protected”; “What sort of home base can I buy? From powered sites, starting at $7,020, to a cabin for $58,000. Site sizes vary but all sites are priced on $65 per square metre and a fair value is added for any building on it”; “Smaller blocks, 156 to 230 square metre sites, where you can build ensuites and/or storage sheds, range from $10,140 to $14,950”; “Large sites, 240 to 400 square metre sites overlooking the river, start at $17,550 to $26,000. You can build an ensuite and/or storage sheds on these blocks”; “affordable housing with share/real estate security”; “The following allotments are currently for sale by Management”; “You buy a share in the property that you like”; “An investment in real estate”; and “large home sites from $20,000 and cabins from $25,000”.

27. The primary judge accepted that the promotional materials had a dual evidentiary significance (see principal judgment at [169]), namely that, to the extent that it could be inferred that they had been provided to the appellants, they were direct evidence of representations made to them; and they were also evidence of how the directors were promoting the venture at the time, and therefore indirect evidence of what it was likely that the directors had said in promoting the venture.

28. The purchases by the appellants in the present case occurred over a period from 26 March 2012 (Mr Sheahan) through to 13 March 2017 (Mr and Mrs Townsend) (see principal judgment at [155]). However, the majority of the appellants acquired their shares in the period from March 2012 to November 2014.

29. There was in evidence a document entitled the “CHB Dream Explained” which was prepared in around late 2015 (see principal judgment at [175]), after most of the appellants had acquired their shares. It was issued on CHB letterhead under Ms Kelly’s signature. It was distributed to at least some of the shareholders of CHB. The document was signed by Ms Kelly but was drafted with the involvement of some of the appellants who were on the Shareholders’ Advisory Group, including Mr McMillan (who had acquired his share in CHB in July 2014 and became the secretary of the Shareholders Advisory Group) (see 2/08/2021; T 415.7-11).

30. The CHB Dream Explained document stated that CHB was a “duly registered, tightly held private company that owns all of The Park” and went on to say that, under the “Commonwealth Corporations Act” [sic], the company “is treated as “Real Estate Company” that subdivides specified Allotments or Sites in The Park to individual Shareholders by way of “Company Title””. The document said that “This is the company that we, the Shareholders, own – this company owns the Park”.

31. The document went on to explain the position of shareholders, including that each share was “tied to an individual Powered Site or Dwelling Allotment” (of which there were 62); that all shares in the company were owned by people “who own Sites or Allotments”; and that shareholders were entitled to “exclusive use and enjoyment” of their Site/Allotment – they own it by virtue of Company Title. The document stated that a shareholder “sells their Site/Allotment by selling their share in The Company”; and that a shareholder “owns their Site/Allotment plus what’s on it, plus their proportion of the Park “common property””. The section explaining the position of shareholders concluded by stating that “Thus, the people who own the Sites/Allotments own the whole of the Park, there is no developer or investor behind the scenes seeking to maximise their return on investment”.

32. The CHB Dream Explained document included a section explaining the Constitution of CHB (including reference to special clauses that stipulate that the Park can only be sold if agreed to by way of a Special Resolution at a General Meeting of the Company with an 80% majority, referring to this as the 80% Rule).

33. The CHB Dream Explained document included an answer to the question “What is Company Title?” as follows:

Company Title is a two stage process whereby a company will own a parcel of real estate by way of Torrens Title; and the constitution and rules of the company establish how portions of the real estate are sub-divided between the company’s shareholders. Strata Title was invented around 1970 to cater for the explosion of high-rise development in Sydney. Before Strata Title these developments were covered by Company Title, which still applies and is still in use today – Strata and Company Titles both have their advantages, it is a case of using the title system best suited to your needs.

34. The appellants place emphasis on a number of the statements contained in the CHB Dream Explained document referring to people owning their Sites or Allotments, including that they own their Site/Allotment “by virtue of Company Title” and the reference to the Constitution stipulating that the company is a “Real Estate Company” with the primary purpose of subdividing the Park by way of “Company Title”. The appellants also note that the document provided the following questions and answers: “Do I get title to my site? Yes” and “Can I sell my Site? Yes”. There were statements in the CHB Dream Explained document that “the constitution and rules of the company establish how portions of the real estate are sub-divided between the company’s shareholders”; that “vacant Dwelling Allotments available for purchase direct from The Company”; and reference to “all shareholders of The Company are those who own Sites/Allotments”.

35. Although the CHB Dream Explained document post-dates the acquisition by most of the appellants of their shares in CHB (and, as his Honour noted at [175], the last of the “sales” by CHB of shares, as opposed to on-sales of shares by existing shareholders), its evidentiary significance appears to have been as to the relevant parties’ understanding of the arrangement by which shareholders acquired rights in relation to their Allotments. Although the document that Mr McMillan helped to prepare indicates a reasonable understanding by him of what is meant by company title, his evidence was that he did not know about company title at the time of purchase of his share in CHB. That said, it does not appear that he made complaint about this at the time of the CHS Dream Explained document.

Allotment agreements

36. Most of the appellants acquired their shares in CHB directly but in two instances appellants (Mr and Mr Townsend in March 2017; and Mr Darch in February 2015) acquired their shares in CHB from an existing shareholder. (The appellants point out that HBS was a party to the Townsends’ agreement, although the relevance of this is moot, since HBS was not an owner of the shares in question and nor was it the owner of the land.)

37. All of the appellants acquired what were referred to as LTS (long term site) shares as opposed to STS (short term site) shares. The primary judge pointed out that in legal terms, the shareholders subscribed for shares in CHB ([35]) rather than purchasing them, as such. Nevertheless, the various allotment agreements were framed in terms of purchase. (Similarly, his Honour noted at [40] that references to “buyback” transactions appear to have ignored the statutory prohibition on a company buying back its own shares other than through compliance with the statutory procedure for so doing. Nothing, however, turns on this.)

38. The contracts by which the appellants bought their shares in CHB (to which I refer generally as the allotment agreements) varied (and, in one case, there was no written contract – that being the agreement with Ms Vale). There were three main categories of contract.

39. First, there were formal share sale deeds. These were entered into by the earliest of the appellant purchasers (Mr Sheahan, the 14^th appellant, on 26 March 2012; and Mr Neville Kelly and Mrs Susan Kelly, the 10^th and 11^th appellants, on 22 April 2012 (10th and 11th appellants)). These agreements referred in terms to the sale and purchase of shares (an A-Class share in CHB which conferred rights of exclusive use to a particular allotment). The agreements also contained a term that the “purchase price” may be used for the purchaser of the Park (see cl 3.1) and an express acknowledgment by the purchaser that “funds paid for the Shares may be used at completion as funds toward the purchase price of the Caravan Park and will be paid into the Trust Account of the Vendors Solicitor (the details of which form schedule 2) until settlement of the purchase of the Caravan Park when they may be used for that said purpose”. Clearly enough, these allotment agreements were premised on the acquisition of shares in CHB prior to it holding legal title to the Park.

40. Second, there were allotment agreements that provided for the purchase and sale of a particular “Allotment” identified by number (Allotment [X]) and stating the size of the allotment in square metres. In this category were agreements entered into by: Mr Tait (now deceased) and Mrs Tait (6^th appellant); Ms Waugh (formerly the 3^rd appellant); Ms Cook (5^th appellant) in respect of her first allotment; and Ms Brown (8^th appellant). Ms Brown’s contract also stated that “[T]he Allotment is sold as a share in Coolah Home Base Pty Ltd”. These contracts were entered into over the period from 26 March 2013 (Mr and Mrs Tait) through to 24 August 2013 (Ms Brown). The sites of the various allotments were not disclosed in the contracts but were as defined in the CHB Constitution.

36. Third, there were allotment agreements that referred to the purchase and sale of “the share for” an identified allotment. In this category were the agreements entered into by: Mr and Mrs Squire (the 15^th and 16^th appellants) on 7 November 2013; Ms Robertson (13^th appellant) on 25 November 2013 for one allotment and 14 March 2014 for another allotment; Mr and Mrs McMillan (1^st and 12^th appellants) on 28 July 2014; Ms Cook (5^th appellant) in relation to her second allotment on 5 November 2014; and Mr Darch (2^nd appellant), acquiring from an existing shareholder on 2 February 2015. This version of the allotment agreements included terms that the purchaser will purchase and the vendor will sell “the share for” the specified allotment; stated the total size of the allotment in approximate square metres; made provision for the purchase price; stated that payment for the purchase of the Allotment was to be made on the signing of the agreement or within a specified time of the signing of the agreement; stated that the purchase price for the specified allotment included a particular numbered A Class Share in CHB; and stated that the Constitution and the By-Laws of CHB applied to the ongoing possession of the Allotment.

37. At the time that Mr and Mrs Squire entered into their allotment agreement, Ms Kelly sent an email to Mr Squire answering queries he had raised, and which stated (inter alia) that “I understand the law does not provide for a cooling off period for the purchase of shares however we have demonstrated in the past that if someone does not fit or is unhappy with their purchase, we [will] buy their share back”. I pause here to note that, in response to a concern expressed by Mr Squire that the controlling shareholding of the directors “could be a stumbling block later on”, Ms Kelly stated that this was not their intention; that the company was “designed to go into perpetuity as a company controlled by shareholders” and that she did not see a right of veto being exercised in the future (stating that “The overall plan is to have a group of fair minded, similar thinking people as shareholders, so future management and decision making should be easy”).

38. In relation to Mr McMillan (who helped prepare the CHB Dream Explained document), it may also be noted that after he and his wife acquired their share in CHB he prepared and executed (on 24 October 2014) a document entitled “Memo of Understanding” (MOU), which included the statement that Mr and Mrs McMillan agreed that they “do not ‘own’ Lot 52 as such, they simply own a share in CHB which owns all of the real estate”.

39. As to the remaining forms of agreement, they were as follows.

40. The agreement by which Mr and Mrs Townsend (the 17^th and 18^th appellants) purchased an identified “Allotment [x]” from Ms Parsell on 13 March 2017 was found by the primary judge to be “nothing more than an agreement by the Townsends to buy a share in CHB from Ms Parsell” (see principal judgment at [411]). The appellants treat this as an agreement within the second category (i.e., for sale of a particular Allotment). CHB was not a party to this agreement (though, again, HBS was). The contract stated that the purchase price of $80,000 was for the “Vendor’s agree[ment] to sell the share” and stated that the terms of CHB’s “Constitution” and “By-Laws” applied to the “ongoing possession of [the] Allotment”.

41. Mr James (9^th appellant) entered into a contract on 3 January 2013 to buy “Cabin [X], a Kitome Retreat Modified”. The contract stated that the purchase price included an “A-Class Share, Number A[X], in [CHB] for Allotment [X]”. The appellants treat this as an example of the second category of allotment agreements (i.e., for the sale of a particular Allotment). It should be noted that prior to entering into his contract there was an enquiry by Mr James as to the applicability of the first home owner’s grant and Mr Booker sent him an email stating that his transaction was a “share transaction”, and that he was “buying a share in the company that owns the property”. (The appellants point out that, nevertheless, Mr James applied for and obtained the grant (AT 106.36-37).)

42. Ms Axtell (7^th appellant) gave evidence that she had entered into a written contract but that this had been lost. Ms Axtell acquired her share in late 2012. From a chronological point of view, it might be more likely that this contract was in the form of the second category of allotment agreements (since it post-dated the settlement of CHB’s acquisition of the Park and was closest in time to the early 2013 contracts (of Mr James and Ms Tait) but that is mere speculation). The Kelly-Booker respondents note that Ms Axtell did not seek to prove the terms of that agreement by secondary evidence (as she could have done), referring to Giasoumi v Hutton [1977] VR 294 at 298 per Fullagar J. The primary judge (see the principal judgment at [414]) said that there was no reason to think that the terms of this agreement were any more favourable to Ms Axtell than the written agreements which were in evidence and noted that she bore the onus of demonstrating what the terms of the contract were. At [415], his Honour noted that evidence from Ms Axtell about representations allegedly made by Ms Kelly was not evidence of the terms of the written agreement itself.

43. Finally, as adverted to above, the 4^th appellant, Ms Vale, who acquired her share on 12 October 2012, had no written contract. His Honour said at [416] that on Ms Vale’s evidence the contract may have been entirely oral; and noted that evidence of pre-contractual negotiations did not establish the terms of that contract.

Share certificates

49. His Honour noted (at [159]-[160]) that there were at least two forms of wording used for the long term site shares and short term site shares (STS) issued by CHB: the shorter form stating that “This Class A Share value [sic] represents exclusive use of Allotment XX being XX square metres of land” and the longer form stating that “This Class A Share value [sic] represents exclusive use to the following: Allotment XX, being XX square metres of land, and the building situated on Allotment XX, known as Cabin X” (there is inconsistency in the share certificates with capitalisation of “The Building” but nothing turns on this).

April 2014 acquisition of 19 STS shares by HBS

50. In April 2014, the directors caused CHB to “sell” (presumably, issue) 19 of the 20 STS shares to HBS ([38]) (conduct that the primary judge found to be oppressive). This enabled the directors to control the company as they then held the majority of the shares. Later, the directors transferred the CHB share they held through HBS to another company owned by them, Residential Cluster Pty Ltd (RC) (see principal judgment at [39]). This is significant in terms of the relief ultimately sought by the appellants, since RC was not joined as a party to the proceedings.

Shareholders Advisory Group

51. In September 2014, at the company’s AGM, a Shareholders Advisory Group was formed, for the stated purpose of acting in the interests of shareholders and resolving any disputes between shareholders and CHB. His Honour referred to this group as operating as a liaison group (see [46]). As noted above, Mr McMillan became the secretary of the Group after his acquisition of a share in CHB in July 2014; Mr Darch joined the group after his acquisition and became chairman of the group in September 2015.

Disputes

52. By 2016, disputes had arisen between some of the appellants and Ms Kelly and Mr Booker in relation to the management of the Park and the affairs of CHB (see principal judgment at [7]). This culminated in litigation in 2018 in which access was sought (by two of the appellants, Mr McMillan and Mr Darch) to documents of CHB (referred to by the primary judge as the s 247A proceedings). Access to the documents was resisted by the directors.

Amendment to Constitution

53. Meanwhile, in November 2017, a resolution was unanimously passed for the amendment of the CHB Constitution in order to remove reference to subdivision in cl 18 (on the basis that it was inappropriate in the context of company title).

Voluntary administration and subsequent DOCA

54. In August 2019, before final submissions had been made in the s 247A proceedings, Ms Kelly and Mr Booker placed CHB in voluntary administration. They, and various professional advisers to CHB, were the company’s unsecured creditors. The primary judge noted that nearly all of the claims in the administration related to expenses associated with the s 247A proceedings and prior disputes with shareholders (see [56]; [539]; [552] of the principal judgment). Mr Gray and Mr Dean-Willcocks were appointed as administrators and (significantly in terms of the allegations of oppressive or unconscionable conduct) they assumed control of the company from that point.

55. In November 2019, Ms Kelly and Mr Booker put forward a proposal for a Deed of Company Arrangement (DOCA). This contemplated the sale of the Park (the land and improvements thereon owned by the company) to CTP for $430,000 plus GST (a sum in excess of the valuation of the Park obtained by the Administrators).

56. On 14 November 2019, the Administrators sent a notice to shareholders advising that they would be recommending the DOCA to creditors. The letter noted that if the DOCA proposal was approved by creditors (which was said to be likely), the DOCA would include in part, among other things, that: the contract would provide that cabins owned by shareholders would be on the land at completion (and it would be up to individual shareholders and CTP to make arrangements as [sic] the continued occupation of shareholder cabins on the land); that it would be a condition of the contract that the directors of CTP covenant that CTP would offer to all shareholders with a cabin on the land the residential tenancy agreement attached to the letter. The Administrators stated that the proceeds of sale of the Park would be insufficient to meet all of the administration expenses and creditors’ claims so that there would be nothing for shareholders (see [320] of principal judgment).

57. The Administrators issued a supplementary report to creditors on 18 November 2019 (see principal judgment at [322]), recommending the DOCA to creditors. The Administrators in that report stated their view that CHB had been insolvent when they were appointed but that there was no question of insolvent trading because it only became insolvent when the directors decided to stop funding the litigation.

58. On 27 November 2019, there was a meeting of creditors. There was unanimous approval for execution of the DOCA (see principal judgment at [338]). The DOCA was signed by Ms Kelly and Mr Booker that day, both in their personal capacity and as directors of HBS.

Correspondence with shareholders

59. On 14 November 2019, the same day that the Administrators wrote to shareholders advising that they would be recommending the DOCA, Ms Kelly and Mr Booker wrote to shareholders on HBS letterhead, advising that the Administrators were entering into a DOCA and the land and improvements owned by CHB would be sold (and that the “Dream” is no longer). The letter asserted that CHB was put into voluntary administration “as a direct result of court action taken by McMillan and Darch”.

60. The 14 November 2019 letter included the statement that “Graeme and I are purchasing the land with a new company [CTP]” and that this meant that “the legal structure changes and the home base becomes a standard caravan park”. The letter stated that, instead of being company title and controlled by a company constitution “we will come under the Residential (Land Lease) Communities Act 2013”. Among other things, the letter advised that a standard Department of Fair Trading Disclosure Statement would be emailed to shareholders two weeks before the settlement date, to which a standard Department of Fair Trading Residential Site Agreement (RSA) would be attached and that “On or before the settlement date the RSA is to be signed and returned to us”. The letter noted that if the shareholders did not wish to enter into the RSA they could remove their cabin from the community (and a bond would be required). The letter advised that Ms Kelly and Mr Booker were currently investigating a fair market value for the site fees and seeking advice from a specialist solicitor; and that initial feedback was that the “going rate in the area is around $190 per week”. At that time, the weekly site fee at the Park was $65.00.

61. This is the first letter relied upon as particulars of both the misleading and deceptive conduct claim ([25(I)] of the Fourth Amended Statement of Claim) (in relation to the claim that McMillan and Darch were responsible for CHB being put into voluntary administration) and also the harassment claim ([28(I)] of the Fourth Amended Statement of Claim) (on the basis that the letter was “harassing and coercing” members to sign an RSA).

62. On 2 December 2019, the directors sent a letter on CTP letterhead (the second letter relied upon in the particulars of misleading and deceptive conduct and harassment, respectively) advising, among other things, that on settlement of the sale (contemplated for 18 December 2019), CHB’s shareholders’ rights to use the land would cease but that each shareholder was being offered the continued use of the allotment occupied by the shareholder under an RSA. The letter stated that failure to sign the RSA meant that the shareholder would have no right to occupy, enter or remain on the land after 18 December 2019; and, again, that this situation had arisen as a direct result of the court action taken by McMillan and Darch against CHB.

63. This letter is relied on as a further particular of the misleading and deceptive conduct claim on the basis that it is said to have made the misleading and deceptive claim that if the member did not sign a new RSA the ongoing occupation of their allotments would be unlawful (see [25(II)] of the Fourth Amended Statement of Claim). The letter of 2 December 2019 was also said to have made the misleading and deceptive representation that an attached disclosure statement was the Department of Fair Trading’s standard Disclosure Statement and that members were not entitled to a cooling off period (see [25(III)] of the Fourth Amended Statement of Claim).

64. By email on 8 December 2019, Mr Booker sent an email referring to a disclosure statement being emailed on 2 December 2019 and sought confirmation by return mail as to whether the member wished to enter into an RSA with CTP. The email stated that no response by the stipulated time would be taken to mean that no site agreement was requested; and that no site agreement meant no right of access to the allotment or the park after 18 December 2019. The email confirmed that any debt to HBS was to be paid prior to entry into a site agreement. This is not relied on as a particular of the misleading and deceptive or harassment claims but is said to be relevant as part of the context (AT 90.49-50).

65. Prior to completion of the sale of the Park, shareholders were advised on 11 December 2019 by email from Ms Kelly and Mr Booker, as directors of HBS, of legal advice received (from Mr Vrisakis) as to the status of the dwellings on the sites as fixtures. Ms Kelly and Mr Booker informed members that CTP, following completion of the purchase, intended to put the caravan park (both land and business) on the market for sale; and that the sale would be on the basis that a future purchaser would take over the residents’ site agreements in place at that point in time. The email stated that “Any resident who has not signed a site agreement may be treated by Coolah Tourist Park Pty Ltd as having no right to occupy a site at Coolah Caravan Park”.

66. The letter of advice from Mr Vrisakis of Mid-West Law Practice, which was attached to the above email, was to the effect that dwellings erected on the allotments of shareholders in CHB would be taken to be fixtures and as such would be acquired by CTP on completion of its purchase of the Park; but that once a person entered into a site agreement with CTP, the dwelling on the site ceased to be a fixture by force of s 46(6) of the Residential (Land Lease) Communities Act 2013 (NSW) and was owned by that person. Pausing here, there is no account taken in this advice of special condition 51 of the sale contract that acknowledged ownership by residents of their cabins.

67. The 11 December 2019 email is relied on as a particular of the misleading and deceptive conduct claim ([25(IV)] of the Fourth Amended Statement of Claim) on the basis that it is said to have made the misleading and deceptive representation that dwellings erected on allotments of the members of CHB would be acquired by CTP on acquisition of the land; and as a particular of the harassment claim ([28(III)] of the Fourth Amended Statement of Claim) by saying that unless the recipient signed a new site agreement CTP would own their cabin.

Sale

68. The Park was ultimately sold to CTP, of which Ms Kelly and Mr Booker are directors, by a sale contract entered into by the Administrators on behalf of CHB on 27 November 2019 pursuant to the DOCA approved by the creditors on that date. Ms Kelly and Mr Booker signed personal guarantees for the performance of obligations under that contract.

69. Prior to completion of the sale, the appellants’ solicitor (Mr Vogel) lodged caveats on the title on behalf of Mr McMillan and Mr Darch, claiming proprietary interests in the sites occupied by them in the Park (see principal judgment at [62]). Ultimately, the sale completed on 17 December 2019 (see principal judgment at [9]-[11], [59]-[65], [341], [483] notwithstanding the caveats remaining on title). The Administrators received the balance of the sale proceeds after discharge of the mortgage over the property; and surrendered control of CHB back to Ms Kelly and Mr Booker (see principal judgment at [63]). Further caveats were lodged after completion of the sale (principal judgment at [65]). In February 2020, after proceedings had been commenced, all caveats were withdrawn or permitted to lapse (principal judgment at [65]).

Further correspondence with shareholders

70. On 18 December 2019, the solicitor acting for CTP (Mr Vrisakis) wrote to the appellants’ solicitor (Mr Vogel) stating that “The Purchase was completed yesterday and CTP is entitled to possession of Coolah Caravan Park as against, and to the exclusion of your clients. This letter serves as notice that CTP requires that Messrs McMillan and Darch leave Coolah Caravan Park by no later than 10am on Monday, 23 December 2019”.

71. The particulars to the harassment claim include ([28(IV)] of the Fourth Amended Statement of Claim) that on or about 18 December 2019, Mr Booker approached the appellants “and others” and harassed and coerced them to sign a new site agreement.

72. In a letter to shareholders on 24 December 2019 after completion of the sale, the directors, on CTP letterhead, stated:

The question has been asked, how can the Coolah Caravan Park land have been sold when the CHB Constitution provided that it could only be sold with the consent of 80% of Share Holders? The answer is that CHB was placed into voluntary administration as a result of the court action against it taken by Messrs McMillan and Darch and it was the voluntary administrators of CHB who sold the land in exercise of their power to do so conferred by the Corporations Act 2001. [emphasis as per original]

73. Also on 24 December 2019, Ms Kelly advised one of the shareholders (Ms Waugh, formerly the 3^rd appellant) that HBS had ceased trading at 5pm on 17 December 2019 following the sale to CTP.

74. The next particular of both the misleading and deceptive conduct claim ([25(V)] of the Fourth Amended Statement of Claim) and the harassment claim ([28(V)] of the Fourth Amended Statement of Claim) is a letter sent on 14 January 2020 from Mr Vrisakis to Mr Vogel (not to the shareholders as particularised in the pleading). This is relied on as a particular of the misleading and deceptive conduct claim on the basis that it is said to have made the misleading and deceptive representation that members’ rights to use the Park ceased when the land was sold to CTP. It is relied on as a particular of the harassment claim on the basis that it was saying that unless the recipient signed a new site agreement CTP would own their cabin.

73. The 14 January 2020 letter from Mr Vrisakis to Mr Vogel asserted, among other things, that the shareholders’ right to use the Park came to an end on sale of the Park to CTP and also proceeded on the basis that unless a new RSA was signed the home located on that site would belong to CTP under the general law.

74. The two final particulars of the misleading and deceptive conduct claim are: (per [25(VI)] of the Fourth Amended Statement of Claim), a letter of 21 February 2020 from Mr Vrisakis to NCAT “misleading and deceiving the recipients into believing that the Court had ordered that the First, Third and Fourth Defendants should make an application for a stay of certain NCAT applications”; and (per [25(VII)] of the Fourth Amended Statement of Claim), a letter of 28 February 2020 from Ms Kelly, as director of CTP, to all members of CHB, “misleading and deceiving the recipients into believing that the NSW Supreme Court had ordered that they must pay [CTP] money”. Those letters are referred to in a letter dated 29 February 2020 from Mr Vogel to Mr Vrisakis. Neither of these letters appears to be reproduced in the Blue Book but both are referenced in the letter from Mr Vogel.

75. The appellants complain that in some instances, when residents were away from the park, Ms Kelly and Mr Booker “seized their premises and rented them out to tourists” referring to statements that, as the shareholder had not made any payment for site fees “Coolah Tourist Park has taken possession” of the particular allotment and cabin on it and that if the shareholder wished to regain possession the shareholder “must pay the full amount owing”. Certainly, there are letters where it is stated that possession has been taken of the allotments (for non-payment of site fees) (though I note that I can find no reference in these letters to renting the cabins or the allotments out to others). It does not appear that any of the appellants were actually evicted from the Park.

76. In March 2020, shareholders were sent a letter stating that “You will not be permitted to continue in occupation at the Park, in a cabin that is a fixture on land owned by CTP, without making appropriate payment”.

Primary proceedings

79. The proceedings that culminated in the principal judgment were commenced on 11 February 2020 in the names of six of the appellants (Mr McMillan, Mr Darch, Ms Waugh, Ms Vale, Ms Cook and Mr Tait).

80. The procedural history of the matter, and the various iterations of the pleading have been summarised by the primary judge (see from [66]). Insofar as it appears that counsel for the appellants informed the primary judge that the form of the statement of claim (in its then iteration) had been “approved” by the judges who had previously been handling the matter (one of whom was me), that is an overstatement at least insofar as it extends to me. What I dealt with at an early stage, as part of the case management of the proceedings at first instance, were the interlocutory applications referred to by the primary judge in the principal judgment at [72]-[75]. It is incorrect to suggest that the pleading was “approved” by me. Refusing to strike out a pleading or permitting an amended pleading to be filed is not the same as “approving” the pleading.

81. The matter was heard by the primary judge from 30 August 2021 in a hearing spanning some 14 days in total.

82. It is convenient at this stage to note the way in which the appellants pleaded their claims at first instance, since part of their complaint in this appeal as to the way that the primary judge dealt with their claims involves a contention that his Honour misapprehended certain of those claims (in particular, the unconscionable conduct claim which in submissions they elevate to the central claim, describing the misleading and deceptive conduct and harassment claims as “fallback” positions). The statement of claim which came before the primary judge was lengthy, replete with cross-references, and fell far short of the obligation in r 14.8 of the Uniform Civil Procedure Rules 2005 (NSW) to be “as brief as the nature of the case allows”. In light of the submissions made on appeal, it is necessary to summarise it in some detail, as I have done below.

83. The iteration of the pleading at the time of the hearing before the primary judge (as adverted to above) was the Third Amended Statement of Claim. However, at the time of making final orders, his Honour granted leave for the filing of a Fourth Amended Statement of Claim (to which there was neither opposition nor consent by the relevant respondents). The only relevant amendment appears to have been to include as a claim for relief the claim (R20) pursuant to s 233(1)(a) of the Corporations Act 2001 (Cth) (Corporations Act) for CHB to be wound up and that a nominated person be appointed as liquidator of that company (relief that had not been sought in the previous iterations of the statement of claim). Thus, it is not correct for the appellants here to suggest (as they did) that winding up was not relief sought by them and to submit that his Honour was therefore in error in granting that relief. The more accurate position is that the relief was only sought by them at the conclusion of the hearing (no doubt because of the indications that had been made by his Honour in the course of final submissions indicating that such relief would be available).

84. References below to the pleading are to the Fourth Amended Statement of Claim.

85. The structure of the pleading is that there are a number of allegations grouped under headings which one would think are intended to identify the relevant claim or allegation but which are somewhat misleading in that aspects of the claims pleaded against some of those headings (in particular, see the section headed “Claims against Administrators”) are then picked up in particulars to claims against other of the defendants. The various claims may be summarised as follows.

86. Under the heading “Purchase of Land and Shares”, [5], [5A], [5B], [6] to [7] plead the entry by the respective appellants into agreements, it being alleged that those agreements “by their terms provided that for payment of consideration” each of the appellants purchased allotments of land and one A class share in CHB. It is alleged that the appellants thereby acquired an equitable interest in the “Land” (defined by reference to the certificate of title for the whole of the Park); and that CHB held the appellants’ equitable interests in the land on resulting, or in the alternative constructive, trust for the appellants. The relief sought in this regard was a declaration (R4) that the land was held on trust with respect to the allotments sold; and an order (R10C) for specific performance of the respective agreements by selling each plaintiff the agreed allotment of land.

87. Pausing here, an immediate difficulty with the order sought for specific performance (apart from the fact that the allotment agreements had already been completed and hence were no longer executory) is that a sale of a particular allotment of land to any one or more of the appellants would have required the subdivision of the Park into separate titles. The appellants here seek to overcome this difficulty by arguing that there could be a transfer of a fractional interest in the whole of the land (to be held as tenants in common) to each appellant proportionate to the size of the individual appellant’s allotment (see AT 4.10-18). On no view, however, is that what the appellants contend was promised to them (and which they pleaded had been acquired by them). The appellants’ response to this is in effect to say that it was incumbent on the primary judge to fashion the best relief he could in order to give them the closest to that which they were promised. That comes dangerously close to invoking palm tree justice (the framing of relief by idiosyncratic notions of fairness or good conscience – see, albeit in a different context, the observations of Weeks J in Taylor v Dickens [1998] 1 FLR (Eng) 806 at 820; as endorsed by Lord Leggat in Guest v Guest [2022] UKSC 27; [2023] 1 All ER 695 at [163]). Moreover, and as was pointed out at the hearing (see AT 4.7), a fractional interest in the whole of the land is well removed from exclusive possession of the individual lots.

88. The next section of the pleading is headed “Promissory Estoppel” ([7A]-[7F]). Under this heading, it is alleged that the Kelly-Booker respondents promised that the appellants would receive an interest in the land as well as a share in CHB by buying allotments at Coolah Home Base ([7A]); and that the appellants, in reliance on the terms of the agreements and the conduct pleaded and particularised in [24] (see at [105] below), made life-changing decisions to enter into the agreements, pay the consideration, erect cabins and other improvements on the allotments, enter and take possession of, and reside on, the allotments ([7B]). This invokes the language of proprietary estoppel cases (see, for example, Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19 re life-changing decisions).

89. Paragraph 7C pleads the alleged detriment suffered as a consequence of that reliance as being the loss suffered by reason that: the appellants’ proprietary interests were not recorded in writing or registered; and the land was sold to CTP free of their proprietary interests. Paragraph 7D then goes on to plead (albeit still under the heading “Promissory Estoppel”) that:

Premised on the conduct pleaded in paragraphs A21-A42, 28, 35 and 38, the First, Third, Fourth and Seventh Defendants [the Kelly-Booker respondents and HBS] engaged in conduct that was unconscionable within the meaning of the unwritten law.

90. It is relevant here to note that the claim of unconscionable conduct at this point of the pleading ([7D]) thus encompasses conduct pleaded later in the pleading (under a heading “Claim Against Administrators”, at [A21]-[A42], albeit there listing alleged breaches of duty by the directors not the Administrators themselves) as well as conduct particularised under the headings “Harrassment [sic] and Coercion” [28] and “Unconscionable Conduct” ([35]; [38]). Given that the particulars to [35] themselves include references back to conduct “particularised” in [5]-[8], [24]-[25] and [28]-[32], there is an unfortunate element of circularity throughout the pleading.

91. Paragraphs 7E and 7F then plead against the Kelly-Booker respondents and CHB (by reason of the Kelly-Booker respondents being directors), respectively, that they are estopped from denying the appellants’ respective interests in the land according to their promises to the appellants.

92. Under the heading “Sale of Property Held in Trust” ([8]-[10A]), it is alleged that the sale by CHB of the land (under the DOCA) to CTP was in breach of CHB’s fiduciary duties as trustee; and that, as parties to the DOCA and as directors of CTP, the Kelly-Booker respondents have breached their fiduciary duties as trustees. The pleading contends that (see [10A]), premised on the conduct pleaded at [5], [5A], [5B], [6], [8], [9] and [10], CTP holds the appellants’ interests in the land on constructive trust for them; a declaration is sought to that effect (R10A(a)) as well as the order at R10C.

93. What then follows, under the primary heading “Claim Against the Administrators”, is the pleading (at [A11]-[A64]) of various allegations under different sub-hearings.

94. First, allegations relating to the entry into administration, under the sub-heading “Relevant factual background”. Second, allegations of breach by the directors of fiduciary and statutory duties owed to CHB and the appellants ([A21]-[A42]). Third, allegations of oppressive conduct by the Administrators in breach of s 232 of the Corporations Act ([49]).

95. Fourth, allegations of involvement of the Administrators in the directors’ unconscionable conduct ([A50]), that involvement being said to be in particular respects (recommendation of entry into the DOCA, which is alleged to have had the effect of stripping CHB of all its assets and its undertaking without adequate compensation to CHB, for the benefit of the directors and not the company or members; sale of the land and undertaking allegedly at an undervalue due to erroneous instructions to the valuer; and knowingly assisting the directors’ breaches of duty and trust), each cross-referenced to other parts of the pleading.

96. Fifth, the allegation that the Administrators sold property which the company did not own in breach of s 442C(1)(b) of the Corporations Act ([A51]).

97. Sixth, allegations of breach of a duty of care by the Administrators to the appellants ([A52]-[A54]).

98. Seventh, the allegation of knowing assistance by the Administrators in breaches by the directors of their fiduciary, equitable and statutory duties as set out in ([A11]-[A42]) ([A55]-[A56]).

99. Eighth, the allegation of knowing assistance by the Administrators in the breach of trust by CHB and/or the directors by facilitating the DOCA which resulted in the sale of the land interests equitably owned by the members and held on trust by CHB for the appellants ([A57]-[A59]) (identified as a second limb Barnes v Addy (1874) LR 9 Ch App 244 (Barnes v Addy) claim). Finally, there is an allegation of the Administrators’ liability for knowing assistance in unlawful conduct ([A60]).

100. Paragraphs [A61]-[A64] then set out the claim for compensation for losses: an allegation that the Administrators are jointly and severally liable with the other defendants to pay equitable compensation ([A61]); a claim made, additionally or in the alternative, that orders be made compensating the plaintiffs for losses arising from the Administrators’ breach of duty of care and diligence in common law and equity and breaches of their statutory duties (with particulars of the “causes of loss” cross-referenced back to other allegations in the “Claim Against the Administrators” section of the pleading) ([A62]); and a claim for orders “having the effect of putting the Plaintiffs back into the position they would be in but for the misconduct of the Administrators” ([A63]).

101. At [A64], it is pleaded that, additionally or in the alternative, the Court should make the order for relief set out at R12-14 (there being an overlap between that relief and the relief claimed in the substantive part of the pleading). Prayer 14 claims broadly an order for compensation and/or damages pursuant to the Australian Consumer Law (ACL), in Sch 2 of the Competition and Consumer Act 2010 (Cth), including economic and non-economic losses, disappointment, distress and injury, other statutory provisions, damages for breach of contract and in tort, and/or equitable compensation.

102. The pleading then (somewhat confusingly) reverts to the numbering that preceded the section on the “Claim Against Administrators”.

103. After some deletions (in respect of the original [11]-[15]), there is a heading “Second Defendant’s liability” (i.e., CTP’s liability). Under this heading, it is alleged (at [16]) that CTP was a party to fraud being in knowing receipt of trust property (the appellants’ equitable interests in the land and their rights or interests as shareholders); and at [17] that CTP is a constructive trustee who holds the members’ interests in the land in trust for them. At [18], the relief sought at R10 is claimed, namely, a declaration that the agreement for the sale of land from CHB to CTP (under the DOCA) is void ab initio and of no effect or, in the alternative, an order that CTP transfer all of its rights, title and interest in the land to CHB; and in either of those scenarios, an order that CHB transfer to each of the appellants, as tenants in common, a fraction of the land calculated by dividing the area of land specified for each appellant’s allotment at the time of purchase by the total area of the land. (This last claim for relief would require subdivision of the land, if what is contemplated is that the appellants would each have separate title to a fractional interest in the land corresponding to their allotments).

104. There next follows a section headed “Residential Site Agreements” ([19]-[23]), in which it is alleged that the Residential Site Agreement entered into at the time of the purchase of “their allotments” is enforceable against CTP as well as CHB; that any attempts to evict members are unlawful and in breach of contract, and attempts to force members to enter into new Residential Site Agreements are unlawful (such that declarations R1 and R2 and the order in R5 should be made); and that, if CHB has breached, terminated or repudiated the Residential Site Agreement, Ms Kelly and Mr Booker are liable in tort for inducing CHB to do so (such that a declaration to that effect as sought under R3 should be made).

105. The next section, under the heading “Misleading and Deceptive Conduct” ([24]-[27]) alleges that the Kelly-Booker respondents have misled and deceived the appellants “and [unspecified] others” in breach of various statutory provisions. Particulars of that conduct identify representations at presentations, publication of written materials, and oral representations that by buying an allotment purchasers would receive an interest in the land as well as a share in CHB ([24]).

106. Paragraph 25 then alleges that, notwithstanding conduct in relation to the land, the Kelly-Booker respondents have misled and deceived the appellants (and again unspecified others) in breach of s 18 of the ACL or Part 2 Div 2 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). Particulars of that allegation identify a number of letters (14 November 2019, two on 2 December 2019, 11 December 2019, 14 January 2020 from one or more of the Kelly-Booker respondents, a letter of 21 February 2020 from the solicitors for the Kelly-Booker respondents to NCAT; and a letter of 28 February 2020 from Mr Booker as director of CTP) ([25]).

107. There is a bare assertion of loss and damage (at [26]); and the relief sought is that claimed in R6, R8, R10, R10C, R11, R13, R14 and R15 ([27]).

108. This is followed by a section headed “Harrassment [sic] and Coercion” ([28]-[30]). The allegation there pleaded is that the Kelly Booker respondents, in breach of s 50 of the ACL or Part 2 Div 2 of the ASIC Act, harassed and coerced the appellants (and unspecified others) in relation to the supply or possible supply of goods or services or the payment for goods or services or the sale or grant or possible sale or grant of an interest in land or the payment for an interest in land. The particulars of this allegation again identify a series of letters (including some of those particularised for the allegation of misleading and deceptive conduct – 14 November 2019, one of the 2 December 2019 letters, 11 December 2019, 14 January 2020 from one or more of the Kelly-Booker respondents) and conduct of Mr Booker on 18 December 2019 relating to the proposed new Residential Site Agreements.

109. Again, the allegation is that loss and damage has been suffered by reason of that conduct ([29]); and the relief claimed is the same as that for the misleading and deceptive conduct allegation ([30]).

110. The next heading is “Oppression”. The allegations of oppression under that heading are: first, the allegation of breach of ss 232(a) and (e) of the Corporations Act (at [31]), particularised by reference to matters relating to the issue of the 19 STS shares to Ms Kelly and Mr Booker to attain a majority shareholding (at less than such shares were selling to others); entry into the exclusive management agreement with HBS; cessation of the provision of annual accounts to members after the 2015 financial year; refusal to provide accounts; the s 247A proceedings; entry into voluntary administration; entry into the DOCA; and letters relating to the requirement to sign a new Residential Site Agreement and as to the homes becoming the property of the new owner after the sale and statement by the lawyer that the first and second plaintiffs had to leave the park by 23 December 2019; and, second, the allegation that Ms Kelly and Mr Booker “further defrauded” CHB by failing to pay site fees and misappropriating money received for purchase of shares “and otherwise” ([32]). The relief sought was that specified in R7, R8, R10, R10C, R11 and R13 ([34]).

417. Section 21(4)(b) of the ACL relates to a “system” or “pattern” of behaviour, stating the intention of Parliament that:

this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

423. The Full Court of the Federal Court in Unique at [104] clarified the difference between a “system of conduct” and “pattern of behaviour”, also emphasising the fact-dependent nature of the application of sub-s (4)(b):

A “system” connotes an internal method of working, a “pattern” connotes the external observation of events. These words should not be glossed. How a system or a pattern is to be proved in any given case will depend on the circumstances.

424. The natural meaning of “system” or “pattern” appears to target a specific repeated behaviour, with cases brought on the basis that the same conduct has been repeated in respect of several consumers (see Unique [106]-[110], [127], [140]; Productivity Partners Pty Ltd (t/as Captain Cook College) v ACCC (2023) 297 FCR 180; [2023] FCAFC 54). This can be contrasted with the present allegation, which involves a disparate variety of behaviours, all involving the same group of consumers (the appellants). Despite this, the appellants’ submission is that these disparate behaviours should be characterised as a “pattern” within the meaning of sub-s (4)(b).

425. That the intention of sub-s (4)(b) is to target a repeated behaviour or a particular operating methodology which operates as regards multiple consumers (as opposed to a range of disparate behaviours) can also be inferred from the approach taken by courts to determining whether there is a pattern. The focus of this enquiry is on whether the evidence of a few consumers can be taken to be representative of the experience of consumers more generally (see Unique at [84], [110]-[111], [208]; ACCC v Retail Food Group Ltd [2022] FCA 961 at [42]-[48] (Katzmann J); ASIC v AGM Markets Pty Ltd (in liq) (No 3) (2020) 275 FCR 57; [2020] FCA 208 at [387] (Beach J)), such that the impugned behaviour can correctly be characterised as a “system” or “pattern”. The necessary implication of this question is that the sub-section is intended to target particular behaviour which operates as regards multiple consumers. That is something quite different to the disparate behaviours contended by the appellants to constitute a system here.

426. This Court was not taken to any authority specifically considering whether a set of otherwise unconnected acts can together constitute statutory unconscionable conduct. The case law typically involves a specific act or behaviour, or operating methodology, that has effect as regards multiple consumers.

427. That said, it is worth again noting the definition of statutory unconscionable conduct, as set out in Miller’s at [ACL.21.60] citing Kobelt: “conduct that is not in good conscience, irreconcilable with what is right and reasonable; conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience”. While it is clear that the Kelly-Booker respondents’ conduct over the relevant period cannot be characterised as a “system” or “pattern” of behaviour, there is nothing in either the statute or the relevant case law to the effect that a course of conduct taken over many years could not be “so far outside societal norms of acceptable commercial behaviour as to warrant condemnation” for the purpose of s 21.

428. The question is whether, for the purposes of s 21(1), the entirety of the impugned behaviour can be described as “engag[ing] in conduct” for the purposes of s 21(1). Given how disconnected some of the acts are (for example, the initial promotion of the allotments and the subsequent placing of the company into voluntary administration), it is difficult to reconcile that lack of cohesion with a characterisation of all the conduct being part of an overall course of conduct that was unconscionable. Noting what was said in at the hearing at AT 46.44-47.41, the submission is that the course of conduct includes essentially all behaviour commencing with the promotion of the Park to the residents, through to the present day. The appellants’ position, however, appears to be that while it would be open to find “any number of contraventions” it was not open to his Honour to find no contravention at all (AT 47.33-34).

429. The Kelly-Booker respondents’ submission (see commencing at AT 83.40) is that the words “in connection with”, requiring that the unconscionable conduct be linked to the supply of goods or services, implicitly import a temporal element as it is only the conduct in connection with said supply that can be considered. Counsel for the Kelly-Booker respondents cited Monroe Topple and Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) 122 FCR 110; [2002] FCAFC 197 at [114]-[115] (Heerey J, Black CJ agreeing), which involved consideration of s 51AC(1) of the Trade Practices Act 1974 (Cth) (equivalent to s 21(1) of the ACL):

114 As a matter of language s 51AC(1) is directed not to conduct in trade or commerce generally, but rather to conduct in trade or commerce in connection with a particular kind of transaction, namely the supply or acquisition of goods or services to or from a person (other than a listed public company). This may be contrasted with s 52(1) which simply provides that a corporation shall not in trade or commerce engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

430. While the context of that case (being significantly different to the facts of this case) does have bearing on its application in a wider context, the emphasis on the importance of “in connection with” does lend credence to the respondents’ contention. In my opinion the years long course of behaviour by the Kelly-Booker respondents (comprising a number of disparate aspects not directly connected with each other) cannot be classified as “conduct” for the purposes of s 21.

431. Looking then at the impugned conduct individually, I do not consider that the allegation of unconscionable conduct in respect of each of the alleged acts is made out. As to the promise (and later denial) that the appellants would obtain a legal title in the land, the appellants have failed in their challenge to the representations alleged in this regard, which is fatal to the allegation that the making (and later departure) from the representations was unconscionable conduct. As to the “misappropriation” of company income and share capital for themselves and the charging of unreasonable fees, his Honour dealt with these complaints (as noted above) and I see no error in his Honour’s conclusions. As to the taking over of CHB by selling themselves shares for nominal sums, his Honour found this to be oppressive conduct (by reference to the failure to consider the interests of other members). In those circumstances a finding of unconscionable conduct in relation to the same conduct would not take matters further. Again, as to the refusal to provide accounts, this was accepted to amount to oppressive conduct. A finding of unconscionable conduct would not have led to a different outcome in terms of the relief sought.

432. As to the appointment of the Administrators, while his Honour considered this to be in highly suspicious circumstances, he was not prepared to conclude that the defence of the s 247A proceedings as a whole was oppressive conduct or in breach of directors’ duties, and it was essentially the costs of those proceedings that led to the debt position in which CHB was placed. The decision of the directors to withdraw financial support for the proceedings led, in the Administrators’ opinion, to the company becoming insolvent. (In this context, his Honour’s observation in hindsight as to whether the s 247A proceedings were well conceived is apt.)

433. As to the sale of the land and business being at an uncommercial price in breach of the 80% promise, the complaint as to the sale of the land at an undervalue does not accord with the valuation of the Park that the Administrators obtained – and turns largely on acceptance of the proposition as to the value of the business itself (in circumstances where it appears to have been influenced by the management agreements with HBS). In any event, as his Honour made clear, complaints as to the sale were properly directed to the liquidators or directors on behalf of the company. The fact remains that the members of the company still retain their shares (and their entitlement to occupy their allotments). Although the complaint is that the shares are now worthless, there was no evidence to support that assertion. Although it is true that there are prohibitions on sales of shares once a company is in the course of winding up (a transfer of shares in a company in voluntary administration or liquidation will only be effective if the liquidator/administrator gives written consent, or if the Court permits), the benefit of occupation under the terms of the site agreements with CHB remains (as CTP has been found to be bound thereby) and there has been no real consideration of any limitations on the transfer of those benefits in due course. The complaint that breach of the 80% rule was itself unconscionable conduct suffers from the problem that the sale was by the Administrators who were not bound by the Constitution; and the propounding of the DOCA was in circumstances where the company had been placed in administration and was not in a position to pay its debts (without financial support from the directors). In my opinion it is not unconscionable conduct in those circumstances (i.e., where the company was no longer a going concern) for the directors to propound a DOCA that did not fulfil the 80% rule.

434. Finally, as to the threats to evict residents unless new agreements were entered into with significantly higher site fees and the assertion that the cabins were fixtures, one obstacle to a conclusion that this was unconscionable conduct is that it was based on legal advice. While legal advice is not a panacea to an allegation of unconscionable conduct, the giving of that advice places in context Ms Kelly’s evidence, on which the appellants rely, that it was not her opinion that ownership of the cabins (as fixtures) would pass to CTP. The real difficulty, however, is that any disappointment or distress caused by this aspect of the conduct was transitory. Although there were letters referring to the taking of possession of the allotments, it is relevant to note that these were based on non-payment of site fees and that no one was evicted in any event.

435. Thus Ground 18 is not made good.

436. Ground 19 again turns on the alleged failure to take into account evidence and compelling inferences. That cannot be sustained for the reasons given earlier (see [342]-[348]).

437. Turning back then to ground 14, it will be recalled that this is a complaint as to the failure to give reasons why the sale of the land was not unconscionable, in circumstances where members had been assured many times, over several years, in print and orally, that the land could not be sold unless 80% of members agreed. True it is that his Honour dealt with the complaint as to the sale of the Park under the heading “Sale of Park to CTP” (see at [555]-[559]) as part of his consideration of the numerous allegations of conduct said to be oppressive. His Honour identified the two difficulties with that claim: first, that the restrictions on sale of the Park imposed by the Constitution no longer applied; second that entry into the sale was mandated by the DOCA.

438. His Honour did not separately address the complaint about sale in breach of the 80% rule in the section of his reasons dealing with unconscionable conduct. However, his Honour had dealt with not unrelated allegations: the (unpleaded) sham administration claim (see [553]-[554]) and, as noted above, the allegation that the sale was oppressive conduct. Reading his Honour’s reasons as a whole, it is tolerably clear that his Honour did not consider the sale of the Park, in the circumstances in which they had occurred as part of the administration of CHB by the Administrators to be unconscionable conduct. That conclusion must be correct. Once the company was in administration, the scenario of a shareholder majority decision to sell the Park had in effect evaporated. The company was in the control of the Administrators and the sale of the Park (as mandated by the DOCA) was a matter for resolution by the creditors. Hence any failure to give separate reasons on this aspect of the conduct under the unconscionable conduct head leads nowhere; and, in fairness to his Honour, the convoluted way in which the unconscionable conduct claim was pleaded (by way of particulars harking back through various parts of the pleading) was likely to have led to the fact that it was addressed compendiously and not separately. Ground 14, even if established, would not warrant a remittal of the matter for re-trial; and would certainly not warrant orders granting final relief of the kind claimed in favour of the appellants.

Ground 20 – Harassment and coercion

439. This ground (also relating to a claim described in submissions as a “fallback position” – see AT 48.5-6) is as follows:

Harassment and coercion

20 The primary judge erred by failing to properly consider the Plaintiff’s claim of harassment and coercion in breach of ACL s50 (TASOC 28), dismissing it (J1.591- 594) without giving reasons why the Plaintiffs submissions were rejected.

Appellants’ submissions

440. The appellants contend that the primary judge erred by failing properly to consider the claim of harassment and coercion in breach of s 50 of the ACL (at [28] of the pleading); and that his Honour dismissed it ([591]-[594]) without giving reasons why their submissions were rejected.

441. The appellants say that the harassment and coercion comprised many instances over two years after the sale of land to CTP where the residents were threatened with eviction and loss of their cabins unless they signed new RSAs which increased the weekly site fees from $65 to about $190. The appellants refer to the correspondence in December 2019 (set out above) as examples of such harassment and coercion.

442. It is noted that NCAT subsequently confirmed that CTP was required under s 40 of the Retirement Villages Act to continue to provide accommodation at the park on the terms of the existing site agreements and CTP had no right to insist on new agreements (citing Coolah Home Base Pty Ltd v Tait [2022] NSWCATAP 324 (CHB v Tait)).

443. The appellants say that, had the primary judge properly considered the claim of harassment and coercion, breach of s 50 should have been found with a consequential order for compensation for economic and non-economic losses including disappointment and distress (R14).

Kelly-Booker respondents’ submissions

444. The Kelly-Booker respondents point out that the pleaded case of harassment and coercion focussed on particularised conduct between 14 November 2019 and 14 January 2020 (noting [28] of the pleadings); and that it did not span “many instances over two years”. They say that that conduct comprised communications informing the appellants of the financial demise of CHB, the sale of the Park to CTP, and proposed RSAs to be entered into with the appellants. The particularised written communications were: a letter dated 14 November 2019; a letter dated 2 December 2019; an email dated 8 December 2019; an email dated 11 December 2019, which enclosed a letter of legal advice received from the solicitor, Mr Vrisakis, as to the status of the appellants’ cabins; and a letter dated 14 January 2020.

445. It is noted that detailed submissions were directed to this conduct (recorded at [591] of the principal judgment); and his Honour accepted them, noting (at [592]) that there had been no reply of substance to those submissions. His Honour said that:

where the relevant conduct involves asserting a legal conclusion, that conduct does not become misleading or deceptive (or become a form of harassment or unconscionable) just because the conclusion is ultimately rejected by the court: compare Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 at [35]-[43]. The assertions made by Ms Kelly and Mr Booker were made in an adversarial context. It was not alleged that Ms Kelly and Mr Booker lacked a bona fide belief that they were entitled to make the assertions.

446. The Kelly-Booker respondents say that the pleaded case focussed on a debate about the necessity of the appellants to enter into new RSAs with CTP, and the status of the appellants’ cabins after the sale of the Park. They say that the parties were genuinely at odds on this issue; and that the fact that NCAT subsequently held that the appellants continued to enjoy rights of occupation under the Retirement Villages Act, does not render the preceding correspondence unduly harassing or coercive. Further, they maintain their submission that no loss has arisen.

Reply submissions

447. In their reply submissions the appellants appear to accept that the events of March 2020 were not particularised in the pleading at [25] but they say that these were squarely part of their case at first instance (referring to their submissions made at first instance) and they say that it cannot be said that the Kelly-Booker respondents were taken by surprise or did not know the case they were required to answer. The appellants say that, at first instance, the Kelly-Booker respondents engaged with the March letters in their submissions, without complaining that these letters were not explicitly pleaded.

448. The appellants say that it was in error for the primary judge to conclude (at [592]) that the assertions made by Ms Kelly and Mr Booker were made in an adversarial context because the offending conduct went well beyond “asserting a legal conclusion”.

449. As to his Honour’s observation that it was not alleged that Ms Kelly and Mr Booker lacked a bona fide belief that they were entitled to make the assertions, the appellants say that Ms Kelly admitted in cross-examination that she lacked a bona fide belief that they were entitled to make the assertion that the cabins were fixtures and therefore belonged to CTP, referring to Ms Kelly’s acceptance of the proposition that she conveyed an advice to the appellants that was not her genuine opinion (8/09/2021; T 625.41-626.43). The appellants also note that personal guarantees were signed by Ms Kelly and Mr Booker for the performance of the sale and purchase agreement, which included terms that the shareholder/residents’ cabins were not part of the sale (see cll 51.3; 51.5).

450. The appellants also point to the fact that the Administrators’ report to creditors states that CHB owned “land, buildings and improvements … but excluding the shareholders’ dwellings erected thereon”; and that the Constitution of CHB also contained an acknowledgement that any dwelling on the shareholder/residential site was the property of the shareholder.

451. The appellants also maintain that the primary judge erred by saying (at [593]) that “In this regard the claims based on the letters written by Mr Vrisakis are particularly problematical. It is questionable whether those letters, and particularly the letter to NCAT, were even conduct “in trade or commerce”.” The appellants say that s 50 of the ACL does not require that the conduct be “in trade or commerce” and, in any event, Mr Vrisakis was not a party to the proceeding. The appellants say that it the use to which the directors put his advice that formed part of the harassing and coercive conduct.

452. The appellants maintain that the directors must have known that the cabins belonged to the shareholders and that any assertion to the contrary could not have been a mere assertion of a legal conclusion. It is submitted that the conduct was intended to harass and coerce, and that it had the desired effect. The appellants note that whether conduct is unduly harassing or coercive depends not on a line-by-line analysis but on the overall impression (citing ASIC v Accounts Control Management Services Pty Ltd [2012] FCA 1164 per Perram J at [17]) and they maintain that the conduct in this case “crosses the line”.

Determination

453. In my opinion, his Honour did not err in concluding that the correspondence as to entry into the RSA’s and as to ownership of the cabins after the sale of the Park was not harassment or coercion but in any event no damage has been shown to have resulted from that correspondence. Insofar as complaint is made that the appellants suffered distress or the like, it must be remembered that by this time they were in the midst of a dispute with the Kelly-Booker respondents which of itself must have been distressing. I am not persuaded that in the context of the situation as at the end of 2019 (where the directors had obtained what subsequently transpired to be incorrect legal advice as to ownership of the cabins) there was a breach of s 50 of the ACL by reference to the impugned correspondence.

Grounds 21-23 – Compensation

454. Finally, the grounds challenging the finding as to compensation are:

Compensation

21 The primary judge erred (J1.575-576) by misconstruing the Plaintiff’s claim for compensation as being limited to the “damage flowing from the Plaintiffs’ acquisition of shares in CHB, and the consequential right of occupation which they obtained” and asking (J1.580) “Can all of this be blamed on the initial purchase by the Plaintiffs? If it cannot, can the extent to which it can be blamed on the initial purchase be somehow segregated and quantified?” because the Plaintiffs claim compensation (TASOC R14) for economic and non-economic loss, disappointment and distress arising from misleading and deceptive conduct, harassment and coercion, unconscionable conduct, and oppressive conduct under the Corporations Act which does not flow solely from the initial share purchase.

22   The primary judge failed to sufficiently consider [sic] the Plaintiffs’ submissions supporting their claim for compensation under the ACL and otherwise or give reasons for rejecting these submissions.

23.   The primary judge found (J1.591) that because the Plaintiffs had not taken any action in reliance on any of the conduct there was accordingly no damage, erroneously considering reliance in circumstances where causation is sufficient and reliance not relevant.

Appellants’ submissions

455. The appellants say that their claim for compensation (R14) was for economic and non-economic loss, disappointment and distress arising from misleading and deceptive conduct, harassment and coercion, unconscionable conduct, and oppressive conduct under the Corporations Act, which did not necessarily flow from the initial share purchase.

456. Further, the appellants argue that reliance is not relevant to the claims for undue harassment or coercion (s 50 of the ACL) or unconscionable conduct (s 21 of the ACL). In relation to the claim of misleading and deceptive conduct (s 18 of the ACL), the appellants say that there was ample evidence that they would not have bought their allotments or built their homes if they had not been promised they were somehow buying their allotments and that the land could not be sold from under them.

457. The appellants contend that his Honour failed to consider their submissions supporting their claim for compensation under the ACL, Corporations Act and otherwise or to give reasons for rejecting these submissions. They note that in their submissions before the primary judge, the heads of loss were identified as including: disappointment and distress; loss of value of shares (the shares in CHB, for which shareholders paid around $10,000 to $20,000, now being said to be worthless); loss of value of their homes (ranging from $50,000 -$300,000) (those having been incorrectly constructed on site rather than as transportable homes as required by the DA, or having been damaged or destroyed by floods); and monetary loss such as legal costs (including the shareholder/residents’ solicitor/client costs of the s 247A proceedings before Black J of over $100,000 and legal costs of the NCAT proceedings).

458. The appellants note that compensation for oppression can be awarded under s 233 of the Corporations Act for acts or omissions in the conduct of affairs which is “unfairly prejudicial to, or unfairly discriminatory against, a member or members” rather than merely “oppressive” and that this includes discrimination against a member in a capacity other than as a member. The appellants say that in the present case, the oppression was in the capacity both as members and also as residents of the retirement village operated by the directors. Reference is made to Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459 at 471; [1985] HCA 68 per Brennan J as to the scope of the 1983 amendments to the predecessor oppression provision, extending to conduct which was “burdensome, harsh and wrongful”.

459. The appellants contend that it would be appropriate for this Court to make orders under s 237 of the ACL or s 233 of the Corporations Act and to order an enquiry into damages.

Kelly-Booker respondents’ submissions

460. As to the first category of claimed misleading and deceptive conduct (that the appellants were promised they would receive interests in their Allotments), the Kelly-Booker respondents note that the appellants did not at trial seek to rescind their purchase agreements; rather, they all wanted to retain their A-Class shares (30/08/2021; T 2.8-43). They point to the observation by the primary judge at [573] that:

As to economic loss, the obvious basis for a claim would be if the price paid by the plaintiffs for their shares exceeded the true value of the shares at the time of purchase. The plaintiffs presented no evidence, however, that that was the case.

461. In relation to any claim for non-economic loss arising from the same asserted representations (that the appellants would receive an interest in land as well as their A-Class shares), the primary judge said (at [581]):

It must be remembered that the pleaded allegation is that the plaintiffs would receive an interest in land as well as the shares they were buying in CHB. The problem for the plaintiffs is that there is no obvious link between the state of affairs which has resulted in the disappointment, distress and anxiety which they complain about on the one hand, and any falsity in that particular representation on the other. If the plaintiffs had obtained ownership of their allotments as well as ownership of the shares, they would still have been dependent upon CHB, as the owner of the Park, providing them access to their lots and the services required to live there. In these circumstances, had I concluded that there had been misleading and deceptive conduct by Ms Kelly and Mr Booker on behalf of CHB, I would still have rejected the plaintiffs’ claim for damages as too remote.

462. The Kelly-Booker respondents note that the primary judge also observed (at [579]) that the present case is much more complicated factually than the cases where damages have been awarded to plaintiffs for disappointment or distress as a result of a ruined holiday (referring to Jarvis and Baltic Shipping) or having received a notification of having won a prize in a lottery which turns out to be incorrect (referring to Kuzmanovski). The Kelly-Booker respondents say that the present case bears no resemblance to such cases and the limited circumstances in which damages for disappointment and distress (not consequent upon personal injury) can be awarded.

463. As to all the claims for damages for non-economic loss, the Kelly-Booker respondents say that: the appellants enjoyed years of exclusive occupation of their allotments and use of the Park; none of the appellants was evicted from the Park by the directors and that the appellants continue to have the use and enjoyment of their allotments; none of the appellants entered into new RSAs; and NCAT has now held, pursuant to s 40 of the Retirement Villages Act, that CTP is bound to perform and observe the obligations and terms arising from the By-Laws and CHB’s Constitution (Tait v Coolah Home Base Pty Ltd [2021] NSWCATCD (5 July 2021) at [166], [168]-[169]; upheld on appeal in CHB v Tait).

464. Accordingly, the Kelly-Booker respondents argue that the appellants still possess the same rights of occupation and use of their allotments, and the Park, as existed prior to its sale to CTP; and now owe their corresponding obligations to CTP.

465. Further, the Kelly-Booker respondents argue that a sum of $200,000 for each appellant could not be appropriate compensation for non-economic loss arising from any of the conduct complained about (whether individually or collectively). They note that only $5,000 was awarded for the disappointment and distress of a pleasure cruise that was prematurely ended by the shipwrecking of the cruise-liner, which amount was described as “very generous” (Baltic Shipping at 387) and that only $2,000 was awarded in Moore v Scenic Tours Pty Ltd (No 2) [2017] NSWSC 733 at [920] (Garling J) for an aborted European river cruise that had to proceed by bus. The Kelly-Booker respondents say that in the present case, while the administration of CHB, the sale of the Park, and the ensuing litigation may have been stressful, the appellants still enjoy exclusive use of their allotments.

466. As to the other two categories of misleading and deceptive conduct (the 80% rule and the requirement to enter into new RSAs), the Kelly-Booker respondents say that, again, no evidence was led as to economic loss; and that, for the above reasons, no damages for non-economic loss are recoverable.

467. The Kelly-Booker respondents submit that the same reasoning applies in relation to the claims of unconscionable conduct, as well as the claims for harassment and coercion.

468. In relation to the other losses referred to in the appellants’ submissions, the Kelly-Booker respondents say that: no claim was brought for the loss of value of the appellants’ A-Class shares (nor are the allegations of misappropriation maintainable in light of the unchallenged findings made by the primary judge); no claim was brought for the loss of value of the appellants’ dwellings constructed at the Park (and the directors took no dwellings); and the costs of the NCAT proceedings were not agitated in the proceedings at first instance before the primary judge nor was compensation sought (or evidence adduced) for the same. It is noted that costs were refused by NCAT (Coolah Home Base Pty Ltd v Tait [2023] NSWCATAP 3).

469. As to the proposed enquiry into damages under s 237 of the ACL or s 233 of the Corporations Act, the Kelly-Booker respondents say that this is not relief formally sought on appeal; nor were the proceedings conducted on the basis that any enquiry or assessment of loss would be postponed (referring to the principal judgment at [85]-[89]); and no account was sought (referring to [86], [507]). The Kelly-Booker respondents say that the proposed orders O4 and O5 were not sought below and cannot now be raised on appeal (citing Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438 (Latham CJ, Williams and Fullagar JJ); [1950] HCA 35). It is noted that the appellants did not seek to postpone the assessment or quantification of damages or monetary compensation.

470. Finally, as to the additional relief sought on the appeal, the Kelly-Booker respondents submit as follows.

471. As to proposed Order 3A, that recission of the sale of the land by CHB to CTP is not possible where restitutio in integrum is impossible (citing [441] of the principal judgment). The Kelly-Booker respondents say that this is an essential pre-condition to such relief (Nadinic v Drinkwater (2017) 94 NSWLR 518; [2017] NSWCA 114 at [27]-[29] (Leeming JA, Beazley P and Sackville AJA agreeing)) and that the proposed order also does not grapple with CTP’s otherwise indefeasible title to the land (the subject of their Notice of Contention).

472. As to proposed Order 3B, that this is not a remedy consistent with the rights the appellants assert they believed they had acquired in respect of the land. The Kelly-Booker respondents point out that the appellants assert no error in what the primary judge held (at [424]-[433]) in rejecting this claim for relief at trial. Further, it is noted that such relief would affect CHB, which has otherwise filed a submitting appearance in the appeal.

473. As to proposed Order 3C, that while relief for shareholder oppression under s 233 of the Corporations Act, or possibly under s 1324(10) of that Act, can entail making compensation orders in favour of the relevant company (citing LPD Holdings (Aust) Pty Ltd v Phillips [2013] QSC 225 at [44]-[53] (McMurdo J)), it has been held that “the oppression remedy does not exist to compensate [a shareholder] for legal or equitable wrongs nor does it contemplate an order for payment of compensation for a shareholder’s loss by a director’s breach of statutory duty” (citing Nawar v Newcrest Mining Ltd [2022] FCA 424 at [46] (Cheeseman J); and also referring to Lukaszewicz v Polish Club Ltd [2019] NSWSC 446 at [271] (Black J)). The Kelly-Booker respondents point to the lack of evidence as to damage or loss; and say that no claim for an enquiry as to damages or account was formally pleaded or sought at trial (referring to [86], [507] of the principal judgment). It is noted that the primary judge rejected the appellants’ application to bifurcate the proceedings between liability and damages ([85]-[89]), which decision is not the subject of appeal.

Reply submissions

474. The appellants, in their reply submissions say that an enquiry was sought in the case at first instance, (referring to the transcript at 9/11/2021; T 1245.43-49), where counsel for the appellants said that “…the appropriate course is to give case management directions, having the effect of ensuring that there be a further hearing on the issue of quantum, or alternatively equitable compensation, or alternatively an account, or alternatively damages including statutory compensation”. The appellants say that this was captured by R8(c), R13, R14, and R17.

475. The respondents further submit that it is open to this Court to make such orders even if not sought in the Notice of Appeal. It may be noted that leave has been granted for the amendment of the notice of appeal to include such orders.

Determination

476. The complaint that his Honour should have ordered an enquiry as to damages (and that this Court should now do so) ignores the fact that his Honour made clear before and during the trial that there would not be a separate hearing as to damages (see [86]-[89] of the principal judgment). Given the lengthy time that the appellants had to prepare and prosecute their claims there can be no error in refusing a separate hearing as to damages. As to the complaint that the primary judge should have fashioned relief to give the practical outcome sought by the appellants, I have already expressed my view as to the inappropriateness of the suggestion that some kind of idiosyncratic notions of justice should have informed the relief to be granted for the oppressive conduct that was found.

477. As to the suggestion that damages for disappointment and distress would have been in the order of $200,000 per plaintiff, that is ludicrous. It takes no account of the benefits of occupation they have had and still have; and the suggestion that it was some sort of arithmetical calculation extrapolated from other decisions (as opposed to being a figure plucked out of the air) is not supported by any cogent reasoning.

478. Otherwise, the claimed relief does not arise given the disposition of the grounds of appeal as set out above.

Conclusion

479. For the above reasons, I consider that the appeal should be dismissed. There is no reason that costs should not follow the event. Thus I propose that the following order be made:

(1)   Appeal dismissed with costs

480. LEEMING JA: I agree with Ward P.

481. STERN JA: I agree with Ward P.

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Amendments

07 June 2024 - Amendment to text noted at [274]

26 June 2024 - Amendment to Parties on coversheet

Decision last updated: 26 June 2024