Parbery & Ors v QNI Metals Pty Ltd & Ors - [2020] QSC 143

SUPREME COURT OF QUEENSLAND

CITATION:

Parbery & Ors v QNI Metals Pty Ltd & Ors [2020] QSC 143

PARTIES:

STEPHEN JAMES PARBERY IN HIS CAPACITY AS LIQUIDATOR OF QUEENSLAND NICKEL PTY LTD (IN LIQ) ACN 009 842 068

(first plaintiff)

QUEENSLAND NICKEL PTY LTD (IN LIQ)
ACN 009 842 068
(second plaintiff)

JOHN RICHARD PARK, KELLY-ANNE LAVINA TRENFIELD & QUENTIN JAMES OLDE AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQ) ACN 009 842 068
(third plaintiffs)

v

QNI METALS PTY LTD ACN 066 656 175
(first defendant)

QNI RESOURCES PTY LTD ACN 054 117 921
(second defendant)

QUEENSLAND NICKEL SALES PTY LTD
ACN 009 872 566
(third defendant)

CLIVE FREDERICK PALMER
(fourth defendant)

CLIVE THEODORE MENSINK
(fifth defendant)

IAN MAURICE FERGUSON
(sixth defendant)

MINERALOGY PTY LTD ACN 010 582 680
(seventh defendant)

PALMER LEISURE AUSTRALIA PTY LTD
ACN 152 386 617
(eighth defendant)

PALMER LEISURE COOLUM PTY LTD
ACN 146 828 122
(ninth defendant)

FAIRWAY COAL PTY LTD ACN 127 220 642
(tenth defendant)

CART PROVIDER PTY LTD ACN 119 455 837
(eleventh defendant)

COEUR DE LION INVESTMENTS PTY LTD
ACN 006 334 872
(twelfth defendant)

COEUR DE LION HOLDINGS PTY LTD
ACN 003 209 934
(thirteenth defendant)

CLOSERIDGE PTY LTD ACN 010 560 157
(fourteenth defendant)

WARATAH COAL PTY LTD ACN 114 165 669
(fifteenth defendant)

CHINA FIRST PTY LTD ACN 135 588 411
(sixteenth defendant)

COLD MOUNTAIN STUD PTY LTD ACN 119 455 248
(seventeenth defendant)

EVGENIA BEDNOVA
(eighteenth defendant)

ALEXANDER GUEORGUIEV SOKOLOV
(nineteenth defendant)

ZHENGHONG ZHANG
(twentieth defendant)

SCI LE COEUR DE L’OCEAN
(twenty-first defendant)

DOMENIC MARTINO
(twenty-second defendant)

FILE NO:

BS6593 of 2017

DIVISION:

Trial Division

PROCEEDING:

Trial

DELIVERED ON:

3 June 2020

DELIVERED AT:

Brisbane

HEARING DATES:


16-17, 22-26, 30-31 July, 2, 5, 8, 19-21, 23, 27-28 August, 2-3, 30 September, 1-2, 4, 16-17 October 2019

JUDGE:

Mullins J

ORDERS:

1.   The plaintiffs’ claims against the seventh defendant are dismissed.

2. It is declared that the fixed and floating charge executed by the second plaintiff in favour of the sixteenth defendant on 13 January 2016 (the China First charge) is voidable under s 588FE of the Corporations Act 2001 (the Act).

3. Pursuant to s 588FF of the Act it is declared that the China First charge is void ab initio against the second plaintiff.

4. The question of what, if any, relief should be ordered in respect of the finding that the share subscription argument between the second plaintiff and the sixteenth defendant executed on 13 January 2016 is an uncommercial transaction within the meaning of s 588FE of the Act is adjourned to a date to be fixed.

5. It is declared that the fixed and floating charge executed by the second plaintiff in favour of the fifteenth defendant on 13 January 2016 (the Waratah Coal charge) is voidable under s 588FE of the Act.

6. Pursuant to s 588FF of the Act, it is declared that the Waratah Coal charge is void ab initio against the second plaintiff.

7. It is declared that the security deed executed by the fifteenth defendant, the second plaintiff and the first and second defendants on 13 January 2016 (the security deed) pursuant to which the fifteenth defendant agreed to make its mining tenements EPC 1040 and EPC 1079 available as security for credit or facilities provided by creditors of the second plaintiff and the first and second defendants is voidable under s 588FE of the Act.

8. Pursuant to s 588FF of the Act, it is declared that the security deed is void ab initio against the second plaintiff.

9.   The application for the declarations in paragraphs 522(b) and (c) of the third further amended consolidated statement of claim is refused.

10. The question of any further orders ancillary to the preceding orders or to give further effect to, or as a consequence of, these reasons and the question of costs of the proceeding are adjourned to a date to be fixed.

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – EXPRESS TRUSTS CONSTITUTED INTER VIVOS – CONTRACTS AND COVENANTS – where two companies which owned a nickel refinery entered into a joint venture agreement for the operation of the refinery – where the joint venturers appointed a manager to conduct the operations of the refinery – where the manager was a company wholly owned by the joint venturers and a party to the joint venture agreement – where the powers and responsibilities of the manager were extensively set out in the joint venture agreement – where a clause of the joint venture agreement specified that it should not be construed as constituting an association, corporation, trust, mining partnership or any other kind of partnership – whether the parties to the joint venture agreement manifested an intention to create an express trust of the joint venture property with the manager as the trustee and the joint venturers as beneficiaries

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – PARTIES – GENERAL PRINCIPLES – where two companies which owned a nickel refinery entered into a joint venture agreement for the operation of the refinery – where the joint venturers appointed a manager which was a subsidiary of both joint venturers to conduct the operations of the refinery as their agent – where the manager conducted bank accounts in its name for the purpose of the joint venture – where a related company to the joint venturers borrowed funds that were paid by the manager from the joint venture accounts – where under the joint venture agreement the funds in the accounts belonged to the joint venturers – whether the joint venturers or the manager was the lender to the related company

CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – WHAT CONSTITUTES INSOLVENCY – GENERALLY – EVIDENCE OF INSOLVENCY – where the company was the operator of a nickel refinery conducted as a joint venture by two related companies – where the falling nickel price meant the costs of production exceeded the revenue from sales of product – where the company was predicting a substantial cash shortfall for about nine months – where the company was unsuccessful in securing financial assistance from government, creditors and financiers – where no related party committed funds or realistic financial support – where debts to a major creditor were overdue, but the creditor had allowed a few weeks for payment of the debt and gave notice of its intention to suspend its services if payment were not made – whether the company was insolvent before the time nominated by the major creditor for suspension of services

CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – EFFECT OF WINDING UP ON OTHER TRANSACTIONS – PREFERENCES AND VOIDABLE TRANSACTIONS – UNCOMMERCIAL TRANSACTIONS – where the company was on the verge of entering into voluntary administration – where the company entered into an agreement to purchase two billion shares for $135 million in a related private company that had rights under a mining right agreement to develop a coal mine where the project was in the pre-development stage – where the payment for the shares was deferred and secured by a fixed and floating charge – where there was independent expert evidence that at the time the transactions were entered into the project had a nil valuation – where the company also entered into a security deed with another related company that agreed to allow its mining exploration permits to be used as security for credit or facilities provided by creditors to the company – where the company entered into a fixed and floating charge to secure the prospective amount of security to be provided by the company holding the exploration permits – whether the transactions were uncommercial

CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – DUTIES AND LIABILITIES – DUTIES – GENERALLY – where the appointed controller purported to act in that capacity – where order declaring appointment as a controller invalid was made by consent of the relevant parties – where controller gave an undertaking to the court not to further act under the appointment – where plaintiffs seek a declaration that the controller’s actions breached duties of good faith and not to act so as to sacrifice the interests of the company – whether the definition of “controller” under the Corporations Act 2001 (Cth) extended to include those acting as controllers while invalidly appointed – whether there was utility in making the declaration sought by the plaintiffs


Corporations Act 2001 (Cth), s 95A, s 418, s 419, s 588FB, s 588FC, s 588FE, s 588FF, s 588FG, s 588FJ

In re Canadian Land Reclaiming and Colonizing Company (1880) 14 Ch D 660, considered
Chan & Ors v First Strategic Development Corporation Limited (in liq) & Anor[2015] QCA 28, considered
Corporate Affairs Commission v Drysdale (1978) 141 CLR 236; [1978] HCA 52, considered
Corumo Holding Pty Ltd v C Itoh Ltd (1991) 24 NSWLR 370, cited
Croton v The Queen (1967) 117 CLR 326; [1967] HCA 48, cited
Featherstone v Ashala Model Agency Pty Ltd (in liq) [2018] 3 Qd R 147; [2017] QCA 260, cited
Gibson v Barton (1875) LR 10 QBD 329, considered
In re Goldburg (No 2) [1912] 1 KB 606, cited
Hall v Poolman (2007) 65 ASCR 123; [2007] NSWSC 1330, considered
Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271; [1988] FCA 419, considered
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64, cited
Hussain v CSR Building Products Ltd (2016) 246 FCR 62; [2016] FCA 392, cited
Jessup v Queensland Housing Commission [2002] 2 Qd R 270; [2001] QCA 312, considered
Korda v Australian Executor Trustee (SA) Limited (2015) 255 CLR 62; [2015] HCA 6, considered
Lee Kong v Pilkington (Australia) Ltd (1997) 25 ACSR 103, cited

Lewis v Doran (2004) 50 ACSR 175; [2004] NSWSC 608, considered
Lewis v Doran (2005) 54 ACSR 410; [2005] NSWCA 243, considered
Montgomerie v United Kingdom Mutual Steam Ship Association Limited [1891] 1 QB 370, cited
Parbery v QNI Metals Pty Ltd [2019] QSC 207, related
QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167, considered
Queensland Nickel Pty Ltd (in liq) v Martino [2017] QSC 95, related
Queensland Nickel Pty Ltd (in liq) v Queensland Nickel Sales Pty Ltd [2018] 3 Qd R 133; [2017] QSC 305, cited
Sandell v Porter (1966) 115 CLR 666; [1966] HCA 28, considered
Sino Iron Pty Ltd v Palmer (No 3) [2015] 2 Qd R 574; [2015] QSC 94, considered
Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; [2001] NSWSC 621, considered
Tosich Construction Pty Ltd (in liq) v Tosich (1997) 78 FCR 363, cited
United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49, cited
Walker v Wimborne (1976) 137 CLR 1; [1976] HCA 7, cited
Williams v Peters [2010] 1 Qd R 475; [2009] QCA 180, considered

COUNSEL:

G J Gibson QC, S L Doyle QC, T Sullivan QC, J P Moore QC, C G Curtis, M J Doyle and N J Derrington for the second and third plaintiffs
C Ward SC, M Karam (on 22-24 July 2019) and T March for the first, second, seventh, fifteenth and sixteenth defendants
K S Byrne (to 30 July 2019) and E L Robinson (from 31 July 2019) for the twenty-second defendant

SOLICITORS:

HWL Ebsworth Lawyers for the second and third plaintiffs
Jonathan Shaw for the first, second, seventh, fifteenth and sixteenth defendants
Robinson Nielsen Legal for the twenty-second defendant

The third plaintiffs are the general purpose liquidators (GPLs) of the second plaintiff Queensland Nickel Pty Ltd (in liquidation) (QNI). The first plaintiff who was the special purpose liquidator (SPL) of QNI was also a party to this proceeding, but settled the claims he was pursuing on behalf of QNI with the defendants. That resulted in orders made on 5 August 2019 that had the effect of leaving the second and third plaintiffs and the first, second, seventh, fifteenth, sixteenth and twenty-second defendants as the active parties in the proceeding. The twenty-second defendant is Mr Martino. I will refer to the other active defendants as the corporate defendants.
The final versions of the pleadings on which the trial was ultimately conducted were the third further amended consolidated statement of claim filed on 21 August 2019 (with one additional amendment that paragraph 181 was struck out), the defence filed on 28 August 2019 and the second further amended reply filed on 1 October 2019.
The first defendant QNI Metals Pty Ltd (Metals) and the second defendant QNI Resources Pty Ltd (Resources) are joint venture companies which own the Yabulu nickel refinery and conduct the Queensland Nickel Joint Venture pursuant to a joint venture agreement under the deed dated 17 September 1992 (the JVA) (exhibit HAL.001.001.0547). QNI was also a party to the JVA and the general manager of the joint venture pursuant to the JVA and an administration agreement dated 17 September 1992 (HWL.004.001.0094). Metals owns 20 per cent of the shares in QNI and Resources owns 80 per cent of the shares in QNI. The shares in each of Metals and Resources are held by Nickel Consolidated Pty Ltd (49 per cent), Nickel Processing Pty Ltd (49 per cent) and Nickel House Pty Ltd (2 per cent). Each of those companies in turn is owned by the fourth defendant Mr Palmer. Mr Palmer purchased the joint venture companies in July 2009.
On 18 January 2016 QNI entered voluntary administration due to insolvency. The third plaintiffs, together with Mr Stefan Dopking, were appointed as administrators and then on 22 April 2016 as the general purpose liquidators (GPLs). (Mr Stefan Dopking resigned as liquidator on 28 July 2017. Reference to the GPLs in these reasons in relation to events prior to that date includes Mr Dopking.)
QNI continued to operate as general manager until 11 March 2016, after it was notified on 7 March 2016 by letter dated 6 March 2016 that Metals and Resources had on 3 March 2016 appointed a replacement manager, Queensland Nickel Sales Pty Ltd (QN Sales) (at Transcript 6-83).
When the trial commenced there were a large number of unsecured creditors of QNI listed in schedule E to the statement of claim. At the outset, the purpose of this proceeding by the plaintiffs was to recover funds which they alleged were owed by, or recoverable from, the defendants, in order to pay the creditors of QNI. As most of the schedule E creditors were paid, as a result of the settlement reached with the SPL, the remaining defendants sought a stay of the proceeding, as they argued that the purpose of the second and third plaintiffs’ continuing with the proceeding was for the purpose of recovering the GPLs’ costs of the proceeding and the funding premium payable under the litigation funding agreement the GPLs entered into with Vannin Capital Operations Limited, and not for the benefit of creditors. The application for a stay was refused: Parbery v QNI Metals Pty Ltd [2019] QSC 207.
The claims pursued by the second and third plaintiffs are those set out in parts NA, U and W of the statement of claim.
Part NA deals with the claims against the seventh defendant Mineralogy Pty Ltd. From about 8 October 2009, the shares in Mineralogy were held by Mr Palmer (as to 0.42 per cent), River Crescent Pty Ltd (being wholly owned by Mr Palmer) as to 98.77 per cent, and Closeridge Pty Ltd (being substantially owned by Mr Palmer) as to 0.81 per cent.
Part U sets out the claims against the fifteenth and sixteenth defendants (Waratah Coal Pty Ltd and China First Pty Ltd) arising from transactions that took place on 13 January 2016, including the entry by QNI into a deed of charge in favour of China First (China First charge) that was registered on 14 January 2016. Waratah Coal has Mineralogy as its ultimate holding company. Prior to the issue of shares in China First to QNI on 13 January 2016, China First was a wholly owned subsidiary of Waratah Coal.
Part W concerns the plaintiffs’ claims in respect of the transactions involving accountant Mr Martino who was appointed on 4 May 2017 by China First as the agent of QNI pursuant to the China First charge.
There are some critical issues to be decided that will affect whether the plaintiffs can establish their claims. They include:
(a)     the nature of the relationship between QNI and the joint venture companies, ie. whether the funds in QNI’s bank accounts that were used in the operation of the refinery were held by QNI on an express trust for the benefit of Metals and Resources, as contended by the plaintiffs, or as the agent only of Metals and Resources under the JVA, so that QNI held the funds as a bare trustee, as contended by the corporate defendants;
(b)     whether payments made from QNI’s bank accounts to or at the request, or on behalf, of Mineralogy were loans by QNI to Mineralogy;
(c)     whether QNI was insolvent on 13 January 2016;
(d)     whether the China First and Waratah Coal transactions were uncommercial transactions.

The nature of QNI’s relationship with Metals and Resources under the JVA

The JVA is the replacement agreement for the former joint venture agreement that was under the deed dated 14 December 1988 identified in recital A to the JVA. When the JVA commenced, the joint venturers were Resources and Nickel Resources North Queensland Pty Limited for and on behalf of NRNQ a limited partnership (NRNQ). Apart from QNI, another company Ore Purchase and Shipping Pty Limited (OPS) was also a party to the JVA and had the role of ore purchase and shipping manager. The term “Manager” is used in the JVA to refer to either of QNI and OPS and their respective successors. It was apparent from the lack of reference to OPS as ore purchase and shipping manager in this proceeding that OPS was not performing that role and that QNI was doing so (and that is consistent with clause 5.2(d) of the JVA).
The purposes of the joint venture are set out in clause 2.1. They include mining, developing and otherwise exploiting the joint venture area (as defined in the JVA) so as to produce lateritic ore, transporting such ore to, and processing such ore at the Yabulu treatment facility to produce nickel oxide and nickel and cobalt sulphide products for delivery to, or as directed by, each of the joint venturers, purchasing ore from third parties, processing ore supplied by or on behalf of the joint venturers at the treatment facilities to produce products for delivery to, or as directed by, each of the joint venturers (provided such supply of ore is in proportion to the respective participating interests of the joint venturers) and exercising the rights, titles, interests, claims and benefits comprised in the joint venture property (as defined in the JVA). Clause 2.2 specifies that the purposes are to be carried out by the joint venturers in conformity with the Queensland Nickel Agreement Act 1970 (Qld) (the Agreement Act) and the agreement that was entered into by the State of Queensland dated 17 December 1970 (as amended from time to time) with MEQ Nickel Pty Ltd and Greenvale Queensland Nickel Inc.
Clause 3.1 of the JVA relevantly provides:
“All the Joint Venture Property shall at all times be made available for the purpose and duration of the Joint Venture and during such duration shall not be used for any other purpose. All the Joint Venture Property and, subject to Clause 3.3, all estate and interest in Products produced at the Treatment Facilities shall be beneficially owned by the Joint Venturers as tenants in common, and all liabilities of the Joint Venture shall be severally borne by such Joint Venturers, in the following percentages (such percentages being the parties’ respective Participating interests as at the Effective Date):
Joint  Participating
                  Venturer  Interest
QNR  80%
NRNQ  20%”
Metals acquired NRNQ’s interest in the joint venture on 31 January 1995 (exhibit FTI.002.011.3508).
The term “Joint Venture” is defined in clause 1.1 of the JVA to mean “the unincorporated joint venture constituted by the Former Joint Venture Agreement and confirmed and continued pursuant to this Deed”. A comprehensive definition of “Joint Venture Property” is set out in clause 1.1 of the JVA. It includes specified mining leases and other rights and titles pursuant to the Agreement Act or the Mineral Resources Act 1989 (Qld), specified land, Yabulu treatment facilities, all technology and know-how developed or to be developed on behalf of the joint venture and all other rights, titles, interests or property of whatsoever kind held, constructed or acquired for the purpose of the joint venture.

The definition of “Products” and “Subject Products” in clause 1.1 of the JVA are respectively:
“ ‘Products’ means the nickel oxide and nickel and cobalt sulphide products (whether mixed or separated) produced or to be produced at the Treatment Facilities and any other products which may be produced from time to time at the Treatment Facilities;.”
…
“ ‘Subject Products’ means in relation to a Joint Venturer:
(a) all that Joint Venturer’s right, title and interest, both present and future, as tenant in common in Products produced at the Treatment Facilities and not yet received in kind by any Joint Venturer; and
(b) all that Joint Venturer’s right, title and interest, both present and future, in Products produced at the Treatment Facilities and received in kind by that Joint Venturer;”
Clause 3.2 of the JVA deals with the holding of titles to the joint venture property in the manager’s name as the nominee for both joint venturers:
“For purposes of convenience, title to any of the Joint Venture Property may be held at the request of the Joint Venturers solely in the name of either of the Managers as nominee for both Joint Venturers in proportion to their respective Participating Interests; provided, however, that all Real Property Titles and Mining Titles shall be held in the names of both Joint Venturers in accordance with their Participating interests. If at any time any of the Joint Venture Property is not vested at law in the names of the Joint Venturers in proportion to their Participating Interests, the Joint Venturer or Joint Venturers in who names such Joint Venture Property is vested shall hold such Joint Venturer Property for the use and benefit of the Joint Venturers in proportion to their Participating Interests and, if requested to do so by the Manager or the other Joint Venturer (as the case may be), but at the expense of the Joint Venture, shall take all such steps as may be necessary to vest the Joint Venture Property in question in the names of the Joint Venturers in proportion to their Participating Interests.”
The plaintiffs place significance on the reference in clause 3.1 of the JVA to the joint venture property being “beneficially owned” by the joint venturers as tenants in common as an acknowledgment that some of the joint venture property may be legally owned by another party (which was then contemplated by clause 3.2). It is equally arguable that the same reference in clause 3.1 is also consistent with an express trust not being created, as there is no reference in clauses 3.1 and 3.2 of the JVA to a trust being created by the joint venturers in respect of the joint venture property and clause 3.2, in fact, contemplates that one joint venturer may hold the legal title of some joint venture property for the benefit of all joint venturers. The provision that all liabilities of the joint venture will be “severally borne by such Joint Venturers” in proportion to their respective participating interests is inconsistent with the notion of a trustee holding the legal title to the property.
Clause 3.3 of the JVA provides that “[e]ach of the Joint Venturers shall have the right to, and shall, receive in kind its Subject Products on production thereof at the Treatment Facilities and separately disposed of or market such share”. Each joint venturer is then made solely responsible for the payment of any royalties on account of the marketing or disposal of its subject products.
Clause 4 of the JVA sets out detailed provisions concerning the establishment, powers, membership and operation of the Joint Venture Owners Committee (JVOC) (made up of representatives of the joint venturers) which has the responsibility and authority for the conduct of the joint venture, including determining general policy and strategic matters for the joint venture. Clause 4.10 specifies the matters on which neither the JVOC nor the managers have power to make any decision about and, where a decision is required on those matters, it requires the approval of each joint venturer.
The appointment of QNI as the general manager of the joint venture was confirmed in clause 5.1(a).
Clause 5.2 sets out the responsibilities of the general manager in extensive detail. Clause 5.2(a) provides:
“The General Manager shall, subject to the directions of the JVOC, be in charge of and responsible for:
(i)     the overall management, operation and administration of the Joint Venture;
(ii)     managing the funds of the Joint Venture;
(iii)    maintaining the accounting records of the Joint Venture and, to the extent set out herein, the Joint Venturers;
(iv)    in conjunction with the Ore Purchase and Shipping Manager, co-ordinating the supply of ore for the Joint Venture;
(v)     conducting planning, engineering feasibility and project evaluation and managing design and construction for the Joint Venture and its Development Programmes;
(vi)    medium and long term planning for the Joint Venture; and
(vii)   the management and control of the Joint Venture Property and all operations hereunder as agent for, and for the account of, the Joint Venturers.
In the exercise of such rights and duties the General Manager shall act subject to and consistently with the provisions of this Deed. The General Manager shall be subject to the supervision of the Joint Venturers acting through the JVOC and shall carry out all directions and decisions of the JVOC. Subject to the provisions set out herein, the General Manager shall use its best endeavours to produce Products at the lowest possible unit cost and to keep working capital at the lowest possible level consistent with prudent management.
The General Manager shall also have such other duties and responsibilities as are set out in Clause 5.2(b) and (c), as well as the obligation to perform the ‘Management Services’ as described in the Administration Agreement.”
The detailed activities required of the general manager to be undertaken either itself or through independent contractors in connection with the operation of the joint venture are specified in clause 5.2(b). One of the activities under clause 5.2(b)(xiii) is the proper disbursing of all funds provided by the joint venturers to carry out the operation of the joint venture, including the paying of all sums payable by the general manager with respect to its acquisition of all services and supplies, materials, equipment and other property necessary or appropriate in connection with the operation of the joint venture. Clause 5.2(b)(xvi) contemplates that the general manager will, at the request of a joint venturer, pay on behalf of that joint venturer any costs or expenses payable by that joint venturer in relation to the joint venture.
Under clause 5.2(b)(xvii), the general manager must undertake:
“the preparation and maintenance, in accordance with accounting principles generally accepted in Australia, of complete books and accounting records describing each Joint Venturer’s financial involvement in the Joint Venture.
…
Such books and records shall be prepared so as to enable each Joint Venturer to meet its reporting, accounting, statutory and taxation requirements.”
Under clause 5.2(c) of the JVA, the general manager is required to act as the agent of the joint venturers in the purchase and shipping of nickel ore from overseas sources for processing at the Yabulu refinery. Under clause 5.2(g) of the JVA, it is specified that the duties and responsibilities of the general manager shall not include any activities relating to the sale or marketing of any Products.
Under clause 5.3(a) of the JVA, the general manager is required to furnish to each joint venturer within 14 days at the end of each month a reasonably detailed financial and performance report concerning activities undertaken pursuant to the JVA and the administration agreement since the previous report. The requirements for the report are then set out:
“The report shall summarise Joint Venture operations during such month and shall include an unaudited statement reflecting in reasonable detail, but in summary form, all charges and credits incurred or accrued to the Joint Venture and showing the financial position of each Joint Venturer (with respect to its involvement in the Joint Venture), as well as a comparison thereof with the relevant programmes, budgets, estimates and schedules adopted by the JVOC.”
Paragraphs (h) to (j) of clause 5.3 of the JVA deal with the obligations of the general manager to keep the books, accounts and records of the operations and business of the joint venture and to arrange the audits of the accounts of the joint venture:
“(h)   A Manager shall maintain, in accordance with accounting principles generally accepted in Australia, consistently applied, complete books, accounts and records of and relating to the operations and business of the Joint Venture (including all costs incurred pursuant to this Deed) and the Joint Venture Property. A Manager shall provide to each Joint Venturer from time to time such information from such books, accounts and records as the Joint Venturer reasonably requires in order to enable it to carry out the procedures, and file and otherwise distribute the information, as is necessary to meet the reporting, accounting and taxation requirements imposed on the Joint Venturer concerned. Each Joint Venturer shall have the right, at all reasonable times and after giving reasonable notice to the Manager, to inspect such books, accounts and records and all or any of the Joint Venture Property.
(i)     The General Manager shall keep such other records and accounts in respect of the Joint Venture as any Joint Venturer may be reasonably require.
(j)     The General Manager shall cause annual audits of the Joint Venture accounts to be carried out, at the cost of the Joint Venture, by the General Manager’s auditor. If by reason of a particular Joint Venturer having a financial year which is different from that covered by the annual audit of the Joint Venture accounts, it is necessary for a supplementary audit of the Joint Venture accounts to be conducted, the General Manager shall cause the General Manager’s auditor to carry out such supplementary audit at the cost of the Joint Venture. Copies of such audits shall be furnished by the General Manager to each of the Joint Venturers within 45 days of the end of the relevant financial year.”
Clause 5.5(b) of the JVA prohibits the general manager from carrying on, or being interested in, any other business or activity or other operation. Clause 5.5(i) precludes the general manager from mortgaging, pledging, charging, encumbering or creating any lien over or trust in respect of the Joint Venture Property (except for liens arising in the normal and ordinary course of business).
Clause 5.6 of the JVA deals with the replacement of the general manager.
Under clause 6.1 of the JVA, the general manager is responsible for the preparation of all financial reports and budgets relating to the joint venture.
Clause 6.2 then sets out in detail the requirement imposed on the general manager to submit to the JVOC annually for review and approval as provided in clause 4.1 a proposed financial plan for the operations of the joint venture for the next cost year. Clause 6.2 also requires the general manager to prepare and submit to the joint venturers for their approval a new business plan for the forthcoming five year period. Clause 6.3 then imposes on the general manager an obligation to submit to the JVOC a proposed budget for development capital expenditures for any development programme approved by the JVOC pursuant to clause 4.1.
Pursuant to clause 6.4(a) of the JVA, a manager which is entitled to make calls on the joint venturers for funds to meet joint venture expenses (being all costs, liabilities and expenses of the joint venture properly incurred including funds to meet financial plans approved under clause 6.2 and approved development budgets) which includes the general manager is referred to as the “Calling Manager”. The timing of calls is dealt with in Clauses 6.4(b) to (e). Clause 6.4(f) of the JVA provides:
“The Calling Manager shall deposit Called Sums and other moneys received from or for the account of the Joint Venturers in a working capital bank account and shall not deposit any other moneys in such account. Such account shall be in the name of the Calling Manager but the moneys standing to the credit of the account shall belong to the Joint Venturers in proportion to the amounts respectively paid to such account by or on behalf of them and the Calling Manager shall keep sufficient records as will enable the respective entitlements of the Joint Venturers to such moneys (and to any interest or income accrued on those moneys) from time to time to be determined. Payments shall be made from such account to meet Joint Venture Expenses payable or accrued or to become payable or to be accrued in respect of the Joint Venturer concerned. Moneys standing to the credit of the account may be invested by the Calling Manager in a prudent manner for a term not exceeding one week (in the case of moneys paid pursuant to a weekly call and any interest thereon) or one month (in the case of moneys paid pursuant to a monthly call and any interest thereon). All bank interest and other income derived from the investment of the moneys paid by or attributable to a Joint Venturer shall be for the account of that Joint Venturer. Such moneys, bank interest and other income shall be applied promptly to meet Joint Venture Expenses to the intent that calls made under paragraphs (b) or (d) of this Clause 6.4 be reduced to the maximum extent possible.”
It is of note, where clause 6.4(f) applies to the moneys standing to the credit of a bank account conducted by the general manager for the joint venture, it expressly provides those moneys “shall belong to the Joint Venturers in proportion to the amounts respectively paid to such account by or on behalf of them” and refers to the manager keeping sufficient records “as will enable the respective entitlements of the Joint Venturers to such moneys”. This is consistent with the moneys in the account belonging to the joint venturers rather than an expression of intention to create a trust in respect of the moneys. Under clause 6.4(g), a manager may make a call for funds other than in accordance with the timing schemes set out in clauses 6.4(b) and (d), provided the manager has the consent of each of the joint venturers.
Under clause 6.5 of the JVA, the calling manager is given express authority to make unbudgeted operating expenditures on behalf of the joint venture in respect of rail freight charges, the purchase of imported ore for processing and the purchase of fuel oil (where the purchase of fuel oil remains subject to the requirement under clause 4.10(j) for the approval of each joint venturer to decisions specified in that paragraph). Those expenditures are for items that are critical to the operation of the refinery.
Clause 13 of the JVA provides:
“The full extent of the joint venture between the Joint Venturers is set forth in this Deed and such other agreements relating to the Joint Venture as are executed and, where applicable, delivered on the date hereof or on the Effective Date. Nothing in this Deed shall be construed to constitute a Joint Venturer an agent or representative of the other Joint Venturer, and no Joint Venturer shall have any authority to act for or to assume any obligation, liability, indebtedness or responsibility on behalf of the other Joint Venturer except as set forth in this Deed. The rights, duties, obligations and liabilities of the Joint Venturers arising out of this Deed shall be several in proportion to their respective Participating Interests and not joint or collective, it being the expressed purpose and intention of the Joint Venturers that their ownership of their respective interests shall be as tenants in common and that this Deed shall not be construed as constituting an association, corporation, trust, mining partnership or any other kind of partnership.”
The original parties to the administration agreement were Resources, NRNQ and QNI. QNI is referred to as QNPL in the administration agreement. Clause 5 of the administration agreement requires the administration agreement to be construed subject to the terms and conditions of the JVA and, if there is any inconsistency between them, the JVA prevails to the extent of the inconsistency. Consistent with clause 13 of the JVA, recital A noted that the joint venturers under the JVA “have associated themselves in an unincorporated joint venture for the purpose of (inter alia) mining lateritic ore and processing such ore at the Treatment Facilities to produce Products for sale by each of them”. The expression “Management Services” is defined in clause 1.1 of the administration agreement to mean the management services described in clause 3.
Clause 3.1 and 3.2 of the administration agreement provide:
“3.1   QNPL is hereby severally appointed by the Joint Venturers to perform the Management Services for and on behalf of the Joint Venturers in relation to the participation and involvement of each of the Joint Venturers in the Joint Venture.
3.2    The Management Services which QNPL shall perform on behalf of the Joint Venturers are as follows:
(a)The management of all debtors of the Joint Venturers in relation to the sale of their Subject Products, including the:
(i)collection by payment to the credit of such bank account of the relevant Joint Venturer as that Joint Venturer may direct;
(ii)satisfaction; or
(iii)discounting,
of those debts.
(b)The promotion of nickel and cobalt products in world markets on behalf of the Joint Venturers, including participation in the Nickel Development Institute and other similar bodies.
(c)The preparation of annual consolidated profit and loss and cashflow budgets for each Joint Venturer which shall include estimates of the following items:
(a)the costs and expenses payable by the Joint Venturer to Queensland Nickel Sales Pty. Ltd. (‘QNS’) acting in the capacity as the Sales Agent of the Joint Venturer;
(b)the costs and expenses payable by the Joint Venturer to QNPL:
(i)acting in its capacity as General Manager of the Joint Venture; and
(ii)pursuant to this Agreement;
(c)the costs and expenses payable by the Joint Venturer to OPS acting in its capacity as Ore Purchase and Shipping Manager of the Joint Venture;
(d)the capital expenditure and other Joint Venture expenses payable by the Joint Venturer;
(e)charges and/or interest payable in respect of any financing for the Joint Venturer’s involvement in the Joint Venture, and drawdowns to be made by the Joint Venturer in relation to any such financing; and
(f)the proceeds of the sale of the Joint Venturer’s Subject Products.
(d)In conjunction with QNS, the negotiation in consultation with and on behalf of the Joint Venturers of Sales Contracts for each Joint Venturer’s Subject Products.
(e)The provision of treasury, tax planning and risk management advice and functions in connection with each Joint Venturer’s involvement in the Joint Venture.”
Clause 4.2 of the administration agreement reinforces the restriction set out in clause 5.5(b) of the JVA and provides:
“Other than the performance of its role as the General Manager of the Joint Venture and the provision of Management Services as contemplated by this Agreement, QNPL shall not directly or indirectly carry on or be interested in any other business or activity or other operation.”
Neither the JVA nor the administration agreement provides for QNI to be paid for its services as general manager. That is not surprising, as from the commencement of the appointment of QNI as general manager under the JVA, it was wholly owned by the relevant joint venture companies, according to their respective interests in the joint venture (exhibit QNK.025.001.1042).

The Yabulu refinery was operated by QNI by sourcing ore from overseas third parties to be used at the refinery. The ore was unloaded at QNI’s material handling facility at the Port of Townsville and then delivered by rail to the refinery. The joint venture also sourced ore from its own mine in central Queensland. The domestic ore and coal were also transported by rail to the refinery. The ore was processed at the refinery where nickel was separated from cobalt and nickel products and cobalt produced by the refinery were transported by rail to Townsville or Brisbane for export. QNI operated the bank accounts in its name into which it deposited the revenues generated by the refinery business and met the liabilities incurred in operating the refinery business from the revenues deposited into its bank accounts. During the period from the acquisition of the refinery by the Palmer interests until 18 January 2016, it was common ground that QNI did not receive any income for the services it provided as general manager to the joint venture (at Transcript 8-34 and 18-15).
The parties make very different submissions about the effect of the JVA (and the administration agreement) on the nature of the relationship between QNI on the one hand and Metals and Resources on the other. The issue arises in an unusual way of pleading, as a result of the settlement with the SPL. It was the SPL, and not the GPLs, who had originally alleged in the statement of claim that from the creation of the joint venture QNI by acting as the general manager of the joint venture for the benefit of the joint venturers acted as trustee of the joint venture property for the purpose of carrying on the joint venture with the joint venturers as the beneficiaries. It was alleged the trust was an express trust that was manifested by express terms of the JVA and the conduct of the joint venturers that was particularised. Those allegations that were in part K of the statement of claim were not part of the GPLs’ claims made under part NA of the statement of claim and ultimately did not form part of the GPLs’ claims made in the statement of claim. The corporate defendants plead in their defence that QNI managed and controlled the joint venture property and all operations under the JVA as agent for, and for the account of, the joint venturers and that the JVA did not create, and was not to be construed as creating, a trust. That gave the GPLs the opportunity to reinstate in the reply the allegations that had originally been made in part K of the statement of claim.
The corporate defendants submit that on a proper construction of the JVA the Products that were produced were not joint venture property, but were owned separately by Resources and Metals, all funds from the sale of the Products were the property of Resources and Metals individually and QNI received such funds as agents for and on behalf of Resources and Metals, and otherwise all the property of, and held, constructed or acquired in respect of or for the purposes of the joint venture was owned by Resources and Metals as joint venturers as tenants in common in accordance with their respective percentage interests in the joint venture. The corporate defendants also submit that QNI, on the proper construction of the JVA, was, subject to the directions of the JVOC, responsible for the management and control of joint venture property as manager of the joint venture, and QNI was, as agent of Metals and Resources, required to act subject to the supervision, directions and decisions of Metals and/or Resources as principals in respect of funds received from the sale of Subject Products.
There are two aspects to the plaintiffs’ trust claim. The first is based on a construction of the JVA. The second aspect of the plaintiffs’ trust claim is also based on the construction of the JVA, but seeks to rely on the conduct of the joint venturers both before and after NRNQ ceased to be a joint venturer in the requests made of QNI to hold assets, incur liabilities and enter contracts on behalf of the joint venturers. The plaintiffs clarified in their oral closing submissions (at Transcript 26-62) that the second aspect of their trust claim did not depart from their contention that the trust was created under the JVA, but relied on the conduct of the joint venture over time as augmenting the trust property.
The question of construction has to be determined by reference to the JVA itself and the same conclusion on construction must apply in respect of the operation of the joint venture under the JVA before or after the involvement of the Palmer interests.
A joint venture is not a term with a defined meaning and the observation of Mason, Brennan and Deane JJ in United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1, 10 remains applicable:
“The term ‘joint venture’ is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill.”
Those members of the court then went on to observe at 10 that a joint venture will often be a partnership, but the term of joint venture is apposite “to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership”. It is a matter of construing the terms of a written joint venture agreement to determine the intention of the parties as to whether they intended their relationship to be one of the recognised legal relationships that may be used for the purpose of a joint venture.
The plaintiffs’ submissions endeavoured to deal with the fact that many of the provisions of the JVA are directed at the general manager being the agent of the joint venturers by submitting that the JVA and the administration agreement provided for a framework for the joint venture that was not tied to one particular legal concept, but instead provides different legal relationships to be used for different purposes. The plaintiffs seek to construe the JVA as creating a trust in respect of the joint venture property held in the name of QNI on behalf of the joint venturers and agency with respect to QNI’s ability to manage the affairs of the joint venture. The plaintiffs recognise that the words “on trust” are not used in the JVA in relation to the joint venture property held in the name of QNI, but rely on construing the JVA, having regard to its text, context and purpose, to reveal the parties’ intention to create a trust of the joint venture property. In this regard, the plaintiffs rely on the approach to the analysis of a commercial document to reveal whether or not a trust was intended by the parties undertaken by Jackson J in Sino Iron Pty Ltd v Palmer (No 3) [2015] 2 Qd R 574. In particular, the plaintiffs rely on the statement at [86] where Jackson J expressed the view that “the failure to expressly provide that there is a trust is the occasion for ascertaining whether an intention to create a trust is to be inferred, not a reason, per se, to reject the inference”.
The High Court reviewed the essential requirements for an express trust in Korda v Australian Executor Trustee (SA) Limited (2015) 255 CLR 62. That case was concerned with documents that set up a pine plantation investment scheme where funds had been raised from investors called covenantholders. The respondent was the trustee for the covenantholders under a trust deed between it and the company that carried on the business of managing the pine plantation investment scheme on land owned or leased by it (the manager). There was another deed, referred to as the tripartite deed between the respondent, the manager and the company that did the felling, milling and selling of the trees (the miller). Under the tripartite deed, the miller was to pay the balance of the proceeds of the sale of the timber (after deducting certain amounts) to the manager and the manager was then obliged to pay those proceeds (after deducting all expenses incurred by it) to the respondent for distribution amongst the covenantholders under the trust deed. The manager sold the land on which it had operated the plantations and the manager and the miller sold the trees under a tree sale agreement for an amount that was payable to the miller. The respondent sought declarations that the proceeds of the tree and land sales were held by the manager and the miller subject to an express trust in favour of the covenantholders. All members of the court in Korda found the documents constituting the investment scheme, considered separately or together, did not indicate an intention that either the manager or the miller were to hold the timber and land sale proceeds on trust for the covenantholders.
French CJ at [5] approved the observation in the 7^th edition of Jacobs’ Law of Trusts in Australia (with is now found in the 8^th edition at paragraph 3-06):
“The author of the trust has meant to create a trust, and has used language which explicitly or impliedly expresses that intention, either orally or in writing. The fact that a trust was intended may even be deduced from the conduct of the parties concerned but if there is any uncertainty as to intention, there will be no trust.” (footnote omitted)
French CJ at [7] noted that there are “three certainties necessary to an express trust” which are certainty of intention, certainty of subject matter and certainty of object (ie. beneficiaries) and that in the case of a written text an express trust depends upon the construction of the written instrument.
Gageler J observed at [109]:
“… where parties to a contract have refrained from contractual use of the terminology of trust, an intention to create a trust will be imputed to them only if, and to the extent that, a trust is the legal mechanism which is appropriate to give legal effect to the relationship, between the parties or between a party and a third party, as established or acknowledged by the express or implied terms of the contract.” (footnote omitted)
In considering the textual considerations from the terms of the documents themselves, Keane J identified at [225] that a significant textual consideration was that no provision in any of the relevant documents required either the manager or the miller to create and maintain an account separate from its general funds to safeguard the timber proceeds from the vicissitudes of their business. Keane J found the approach to the construction of a funding agreement in Jessup v Queensland Housing Commission [2002] 2 Qd R 270 of assistance in relation to the significance of the obligation to keep accounting records to determine an entitlement (at [227]) and the omission of the reference to the imposition of a trust amongst other detailed obligations (at [228]).
In Jessup, the Queensland Housing Commission (QHC) had made grants to an association pursuant to a detailed funding agreement for the purposes of assisting eligible persons in obtaining advice and services for home maintenance and repairs. The issue was whether the association was trustee for QHC of the money standing to the credit of the nominated account into which the funds had been paid. The funds were received from QHC to pay the wages of the association’s employees and other administrative expenses in carrying out the purposes for which the grants were made. The association also paid into the nominated account funds from another entity for a different granting program. It was held by McPherson JA (with whom Davies JA and Philippides J agreed) at [9] that the extensive obligations in the funding agreement (some of which were characteristic of obligations imposed on trustees) “tell against rather than in favour of the existence of a trust”, as if QHC had intended to create a trust, it could have said so, instead of descending to the detail it did in the agreement. It was held at [12] that, even though there was an obligation under the funding agreement to pay the funds into a nominated account, the fact there was not an obligation to keep the grant funds separate and not to mix them with money from other sources (which would be expected if there were a trust) was a strong indication that no trust was intended. It was also held at [12] that the requirement for an accounting system that identified the QHC funding was inconsistent with the funds being held on trust.
Other cases such as Jessup, Korda and Sino Iron are useful for illustrating the process of construction of an agreement in order to discern whether the contracting parties intended to create a trust. Statements in those cases about the significance or otherwise of a particular obligation or the failure to refer to the term “trust” must be considered in the context of the particular case, including the relationship between the parties and the purpose and the terms of the relevant agreement. What is called for in the case of the JVA is to construe the entire document in the circumstances in which, and the purpose for which, the agreement was entered into.
The JVA is a carefully drafted commercial document that was intended to regulate all aspects of the relationships between the joint venture companies and the managers. It is a telling, but not necessarily decisive, consideration that, as explained in Jessup at [8], in a lengthy and detailed agreement, there is no express reference whatsoever to the creation of a trust of the joint venture property with the general manager as the trustee and the joint venture companies as the beneficiaries. In fact, the express provision dealing with the responsibility of the general manager for the joint venture property in clause 5.2(a)(vii) requires the manager to be in charge of, and responsible for, the management and control of the joint venture property as agent for the joint venturers. The express provision in the JVA that deals with the relationship of parties is clause 13 and it is concerned with the relationship between the joint venturers. The joint venture is the undertaking of the joint venturers. They are the primary parties. It is noteworthy that clause 13 expressly states that “this Deed shall not be construed as constituting an association, corporation, trust, mining partnership or any other kind of partnership”. The joint venturers were expressly avoiding the legal relationships specified in clause 13 that are commonly used to conduct a joint venture.
Apart from regulating the relationship between the joint venturers, the JVA sets out the means by which the joint venturers as the primary parties propose to conduct their undertaking. The joint venturers have provided for managers to operate their business and manage the joint venture property for that purpose. Clause 13 of the JVA is inconsistent with the proposition that the JVA created a trust of the joint venture property where the legal title was vested in QNI of which the general manager was the trustee and the joint venturers were the beneficiaries. That is confirmed by appointment of the managers under clause 5.1 as managers and that under clause 5.2 the general manager is subject to the supervision of the joint venturers acting through the JVOC. The JVA does not contemplate that the general manager will be dealing with trust funds in managing the operations of the joint venture, but is responsible for disbursing the funds provided by the joint venturers in meeting the expenses of conducting the business of the joint venture. The nature of the role of the general manager as an agent of the joint venturers, rather than as the trustee of a trust, is also confirmed by the express appointment under clause 5.2(c) of the JVA in respect of the purchase and shipping of nickel ore from overseas sources. In the context of the structure for operating the joint venture under the JVA, the prohibition on the general manager depositing any other moneys to the bank accounts into which the general manager pays the moneys received from or for the account of the joint venturers does not have the significance that the plaintiffs assert. That is because the general manager which is wholly owned by the joint venturers is prohibited otherwise from carrying on any other business or activity. In addition, clause 6.4(f) of the JVA facilitates the ascertainment of the funds belonging to each of the joint venturers in respect of the bank accounts operated by the general manager. The administration agreement is subsidiary to the JVA, but is consistent with no express trust being created under the JVA in respect of the joint venture property.
Although not repeated in the closing submissions, the plaintiffs did plead in paragraph 31D(a)(viii) of the reply as a fact relevant to manifesting the intention to create an express trust that there is no term of the JVA that excluded a trust relationship existing between QNI as trustee and the joint venturers as beneficiaries, because the express provisions against creating a trust, including clauses 5.5(i), 12.1(a) and (c), 12.3 and 13, were not directed to that particular trust relationship. That approach misses the point that the purpose of construing the JVA is to ascertain if there was an intention to create an express trust. It is not established by listing provisions of the JVA and submitting that they do not preclude the ascertainment of an intention to create an express trust.
It defies the clear language and purpose of the JVA and the structure and mode of operation of the joint venture under the JVA to strain to find that the JVA created the express trust of the joint venture property asserted by the plaintiffs. On the basis of the terms of the JVA, QNI was the general manager of the joint venture and its relationship with Resources and Metals and the conduct of the business of the refinery was a contractual relationship of agency. That is not to say the relationship did not have fiduciary aspects by virtue of the nature of the obligations imposed on QNI under the JVA as the agent of the joint venturers, but those fiduciary obligations do not alter the nature of the relationship created under the JVA from an agency to a trust relationship: Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41, 68, 96, 141.
In carrying out its duties and responsibilities under the JVA, QNI contracted with third parties and incurred liabilities. The fact that QNI may have made the contract with a third party in its own name (as it was entitled to do under the JVA) may have affected the liability and rights of QNI under the contract to the third party, but could not alter the relationship between QNI and the joint venturers under the JVA as a result.
The proposition that the liability and rights of QNI under a contract with a third party depended on the terms of the contract with the third party is illustrated by a decision that arose out of QNI’s liquidation: Queensland Nickel Pty Ltd (in liq) v Queensland Nickel Sales Pty Ltd [2018] 3 Qd R 133. Glencore had entered into a contract with QNI, Metals and Resources for the purchase of nickel product from the refinery. After QN Sales replaced QNI as the general manager, Glencore paid the money into court that it owed for nickel product. The question was whether it should be paid to QNI or to QN Sales. The contract recited that QNI was the agent of Resources and Metals, but designated QNI as the seller of the nickel product. Bond J at [31] applied the principle that, even where a contracting party is identified as having a role as agent of other contracting parties, the question of the rights and liabilities of the contracting parties between themselves is to be determined by the application of principles of construction to the relevant contract. That resulted in the conclusion at [47] that QNI had the legal right to recover from Glencore the amounts owing by it under the contract.

The basis on which QNI held the funds of the joint venture in its bank accounts

Mr Wolfe was employed in various roles within the finance department of QNI for 26 years from 1989 until 11 March 2016. He had worked at the refinery since graduating with his Commerce degree in 1989 and held various accountant roles, before becoming senior management accountant, senior business analyst, group leader Business Analysis and Manager Finance. From July 2009 to March 2013, he was employed by QNI in various roles including Manager Finance and Finance Director. In these roles, he had oversight of payments and receipts, management of QN Group bank accounts and assisted with the preparation of audited financial statements of the QN Group. From March 2013 to 11 March 2016, Mr Wolfe was employed as the Chief Financial Officer of the QN Group. Both as Finance Director and Chief Financial Officer, Mr Wolfe had oversight of the corporate governance of the QN Group which included an average of 360,000 financial transactions per annum (or approximately 30,000 transactions per month).
Apart from the relationship between QNI and each of Resources and Metals that is regulated by the terms of the JVA, it is necessary to have regard to how the joint venture operated. I have been greatly assisted by the evidence of Mr Daren Wolfe. Mr Wolfe is now a management consultant. He consults for entities controlled by Mr Palmer, but he also consults for other entities. The plaintiffs endeavoured to attack his credit during the cross-examination, but were unsuccessful in showing that his evidence generally should not be accepted. Notwithstanding Mr Wolfe’s continuing relationship with Mr Palmer and that he had been an employee of QNI when Mr Palmer was its ultimate owner, his evidence was given in the context of his in-depth knowledge of the operations of the QN Group of companies comprising Resources, Metals, QNI and QN Sales (both before and after the QN Group was acquired by Mr Palmer) and his professional experience in accounting and finance and was consistent with the documents generated over many years in respect of the operations of the joint venture and the refinery.
PricewaterhouseCoopers (PWC) were the tax accountants for the QN Group and Ernst & Young (EY) were the auditors from July 2009.
Mr Wolfe explained the setup of the finance and accounting team based at the refinery as follows. Prior to January 2016, the finance department comprised 16.5 full time equivalent finance and accounting staff. QNI employed Mr Michael Fitzsimmons in the role of financial controller to facilitate preparation of the annual financial statements, including coordination of the audit process. In his role as CFO, Mr Wolfe would review the financial accounts of each company prior to their execution by the directors of the company and participated in audit review meetings with EY in relation to preparation and audit of accounts across the QN Group. QNI employed Mrs Alexandra Carlyle in the role of tax adviser to facilitate preparation of the annual income tax returns for Resources and Metals and managed all indirect taxation matters. Mrs Carlyle would liaise directly with PWC and the Australian Taxation Office on tax matters and reported directly to Mr Wolfe in his role as CFO.
Although Mr Wolfe was familiar with the mechanism under clause 6.4 of the JVA for QNI to make calls on the joint venturers, he was able to say (at paragraph 22 of exhibit QNM.002.018.0001/exhibit 59) that he was not aware of any calls being made under the JVA by QNI during the Palmer controlled period for funds from Resources or Metals. (That was confirmed by the SPL in paragraph 64 of his third affidavit (exhibit SUP.015.006.5679) who reviewed the hard copy books of QNI and did not identify any call notices issued by QNI to the joint venture companies before it entered administration.) Mr Wolfe described the practice during that period at paragraph 24 of his same affidavit, as QNI receiving the proceeds of sale of Products for and on behalf of the joint venture partners. Mr Wolfe in paragraph 20 of his affidavit (exhibit 63) pointed out that during the period from 1 August 2009 until 18 January 2016 more than 99 per cent of funds in the bank accounts of QNI were derived from the sale of the Joint Venture Products, with the remaining funds derived from receipts for bank interest, rent, disposal of surplus joint venture equipment and sale of by-products generated through joint venture operations.
It was common ground that during the Palmer controlled period, QNI sold the products from the refinery and deposited the proceeds into its bank accounts, rather than each of Resources and Metals being responsible for the sale of its respective share of the products, as was anticipated by the JVA. That explains why QNI did not need to make calls on the joint venturers, as the funds from the sale of the products deposited to the bank accounts were available to QNI in meeting the expenses of the joint venture. Funds from the sale of Products fall within the description in clause 6.4(f) of the JVA of other moneys received from or on account of the joint venturers which were able to be deposited by QNI in the bank accounts it operated for the joint venture.
Mr Wolfe accepted that the employees, including him, were employed by QNI which made QNI liable to pay the employees’ salary and entitlements, but he explained (at Transcript 20-46) that from a financial accounting perspective all the liabilities of the joint venture rested with the joint venture partners.
Mr Wolfe explained (at paragraph 14 of exhibit 36) that SAP was the enterprise system where transactions of the QN Group were recorded, that supported the preparation of monthly management reports for the QN Group and the audit of accounts. Ms Packer who is a chartered accountant employed by FTI Consulting as a managing director and who works with the GPLs became familiar with the books and records of QNI relating to the refinery during the administration and then liquidation of QNI. Although Ms Packer’s affidavit (exhibit SUP.015.011.0001) referred to QNI using the SAP system as its electronic financial record-keeping system, she conceded that the 5710 company code used in the SAP system referred to the QN Group and the company code was in the name of QNI, because it owned the SAP licence (at Transcript 8-21). This was confirmed by exhibit QNM.007.001.0002 which was a document used to train finance staff at QNI that showed that the 5710 code was “Queensland Nickel P/ L (main entity - for refinery operations) For entries shared exactly 80/20 between the JV owners”. Ms Packer agreed (at Transcript 8-21) that 5710QNPL was the profit centre in the SAP system for all transactions of the refinery. It is consistent with QNI’s obligations under clause 5.3(h) of the JVA that it maintained books, accounts and records relating to the operations and business of the joint venture and the joint venture property. The recording of the entries for the profit centre 5710QNPL is therefore not evidence that an asset or liability was that of QNI, rather than being an asset or liability of the joint venturers.
Mr Wolfe explained (at Transcript 20-44) that the month end accounting process included a specific task called profit centre balancing that was one of the steps undertaken in the monthly account preparation process to ensure that reports for each legal entity were correct. There was a procedure document for profit centre balancing after other reports had been run (exhibit 37). The instructions showed what adjustments had to be made, so that a transaction was attributed to the correct profit centre and for the correct amount. There was a profit centre for Resources that had the code “5710QNIR” and a profit centre for Metals with the code “5710QNIM”. There was an instruction for what to do “If 5710QNIR has purchased something that was unique to it and not to be shared 80/20 with 5710QNIM” and an example was given as to the type of entries that needed to be raised as a result. There was also the possibility of use being made of a blank profit centre or a default profit centre that was given the code 5999ZZZZ (at Transcript 8-27).
The plaintiffs in their written closing submissions on the topic “QNI was recorded in the SAP System as the Party with the Entitlement to Recover” endeavour to make a number of points by reference to records in the SAP system to discredit Mr Wolfe’s evidence on how the SAP System recorded transactions and the process of the monthly reconciliation and profit centre balancing. The plaintiffs did not cross-examine Mr Wolfe on some of the records relied on in these submissions, namely the instructions for reconciliation to produce the trial balance for the 2012 financial year and the instructions for the loan receivable balances with the external partner of the Styx Basin Joint Venture. The submissions are therefore unhelpful without the substance of them being tested by being put to Mr Wolfe and, in any case, do not attempt to address Mr Wolfe’s actual evidence as to what QNPL stood for in the SAP system and the process of monthly reconciliations and profit centre balancing.
Mr Wolfe was cross-examined (at Transcript 21-38 and 21-39) on why QNPL was used for convenience in the SAP system instead of Resources and Metals. Mr Wolfe responded that there was a limitation in the SAP system as to the number of characters allowed in a general ledger account description and so for convenience QNPL was used. When Mr Wolfe was then asked was he saying that there was not space to write QNR and QNM instead of QNPL, he responded:
“I’m suggesting that to be properly correct, you’d therefore have to [write] QN R80 per cent, QN M20 per cent. QNPL, in the way that the accounting team treated those entries, was split 80 per cent/20 per cent to the joint venture partners. That’s the understanding.”
Without further testing that proposition, the plaintiffs’ closing submissions submit that Mr Wolfe was “clearly mistaken” in saying the loan account could not correctly describe Resources and Metals, as if “QNPL” had been replaced with “QNR-80% & QNM-20%”, the full loan account name for the loan with Mineralogy would have had 43 characters and there were other accounts in the SAP system that had up to 55 characters.
First, if the plaintiffs wished to make such a submission by reference to the numbers of characters used in naming accounts in the SAP system, Mr Wolfe should have been cross-examined about it. Second, the submission is made on the basis that the plaintiffs interpreted Mr Wolfe’s answer as relating only to the length of the account name for the loan with Mineralogy. It is not apparent that Mr Wolfe was giving his answer on that limited basis, when there were many loan accounts that would have been affected by substituting a reference to both Resources and Metals and their respective interests for QNPL. The plaintiffs needed to explore this topic further with Mr Wolfe, before they could submit that his evidence was “clearly mistaken”.
Mr Wolfe exhibited to his affidavit affirmed on 21 August 2017 (exhibit QNM.002.009.0001/exhibit 58) the audited accounts for each of Resources and Metals for the financial years ended 2011 to 2015 and the consolidated accounts for the QN Group for the financial years ended 2011 to 2015. Mr Wolfe also at paragraph 24 of that affidavit exhibited a table as exhibit DW-03 (exhibit QNM.002.009.0594) that analysed the consolidated accounts and showed that the beneficial ownership of all assets of the joint venture was disclosed in the accounts of Metals and Resources and that QNI had no net assets.
As Metals and Resources were private companies and the directors were of the opinion that there were unlikely to be users who existed who were unable to command the preparation of reports to satisfy their information needs, the annual financial reports prepared by PWC in the relevant years were Special Purpose Financial Reports for distribution to the members of the companies. A statement to that effect is included in each of the Special Purpose Financial Reports in paragraph (b) of note 1. See p .9486 of exhibit QNK.002.008.9477 as an example.
At the end of each financial year and at other times during the year, Mr Wolfe and members of his team would confer with PWC and EY in respect of transactions and the accounting treatment for transactions. One topic for discussion was the forgiveness of loans between the companies under Mr Palmer’s common ownership.
At paragraphs 15 and 16 of exhibit 36, Mr Wolfe explained that in preparing the Special Purpose Financial Reports (for Resources and Metals), a number of different reports were generated in SAP and exported to Microsoft Excel to analyse the underlying transactional data prior to consolidation and incorporation in the annual financial statements. That meant the annual financial statements were prepared outside the SAP system, using templates created in Microsoft Word and later Microsoft Excel.
Mr Sorensen who is an accountant and at the relevant time was a tax partner at PWC had been the principal tax adviser for Mr Palmer since 2007 and advised Mr Palmer about the acquisition of the QN group. By letter dated 9 August 2017 (exhibit QNM.002.008.0076), Mr Sorensen summarised for Mr Palmer the tax implications relating to deeds of debt forgiveness entered into by Resources and Metals and the associated section 245-90 agreements under the Income Tax Assessment Act 1997 (Cth) (ITAA). Mr Sorensen was subpoenaed to give evidence in this proceeding by the corporate defendants. He confirmed (at Transcript 18-18) that the advice he gave in the letter dated 9 August 2017 was correct at the time it was given and remained correct.
Mr Sorensen explained in that letter the provisions of the ITAA that made it lawful for Resources and Metals to have been a party to various deeds of debt forgiveness during the years ended 30 June 2013 and 30 June 2015 for which section 245-90 agreements had been completed. For the years ended 30 June 2010 to 30 June 2015 inclusive, both Resources and Metals were in a non-taxable position and had substantial carried forward losses, but had a nil franking account balance for those years. All the deeds of debt forgiveness entered into by Resources and Metals were with entities under common ownership throughout the period from the time the respective debt was incurred until it was forgiven. Mr Sorensen explained that companies under common ownership may enter into an agreement under which the commonly owned creditor company may forgo an entitlement it would otherwise have to a capital loss, as a result of forgiving the debt or a deduction in the forgiveness year for a bad debt. The creditor’s capital loss or deduction is reduced by the amount forgone and a corresponding amount is deducted from the debtor company’s net forgiven amount. The tax impact of the commercial debt forgiveness between the commonly owned companies is disregarded. In the letter, Mr Sorensen did a calculation of the gross dividends required to be paid by Resources and Metals to provide funds to the other Palmer controlled companies equivalent to the aggregate net forgiven amount or to provide for on payment from those companies as dividends to Mr Palmer as the sole shareholder. The equivalent amount of dividends would have required a minimum grossing up of 30 per cent of the amount of the debt forgiven.
Mr Sorensen’s evidence in chief (at Transcript 18-13 to 18-18) can otherwise be summarised as follows. All the assets were held by the joint venturers Resources and Metals. Mr Sorensen had also acted for the QN Group from around 1995 up to 2001 and the position had been the same that all assets were treated as being owned by the joint venturers. In the period 2010 to 2015, all income received by the joint venture was accounted for as being the income of Resources (as to 80 per cent) and Metals (as to 20 per cent). No tax returns were filed in that period by QNI, because it was the joint venture operator, was acting merely as the nominee or agent of the joint venture and did not derive any assessable income. That was also consistent with what occurred in the previous period for which Mr Sorensen had acted for the QN Group. As Resources and Metals were generating profits, loans that had been made throughout the year by Metals and Resources to other areas of the Palmer group would be the subject of deeds of forgiveness entered into by Metals and Resources. That was treated as a means for the profits to be distributed to other Palmer entities. A section 245-90 agreement would be entered into by each of Resources and Metals with the relevant Palmer company which had the effect that the debt forgiveness between commonly owned companies could be documented in the deed of forgiveness and ignored for tax purposes. Each section 245-90 agreement was in common form and was a notice required by taxation law that had to be completed by the time the tax return was due to be lodged. An example is exhibit QNM.005.001.0743. That agreement was signed by Mr Palmer as the public officer of Resources and the public officer of Mineralogy, dated 14 April 2014 and is headed “Section 245-90 Agreement between companies under common ownership for creditor to forgo capital loss”. The operative part of the agreement provides:
“QNI Resources Pty Ltd and Mineralogy Pty Ltd, being under common ownership throughout the period from the time that the relevant debts were incurred until the time that the debts were forgiven, agree that QNI Resources Pty Ltd will forgo so much of the capital loss under Division 104 that would have arisen for the 2013 year of income in respect of the forgiveness of the debts due by Mineralogy Pty Ltd to QNI Resources Pty Ltd and which does not exceed the provisional net forgiven amounts and as stated below:
Amount of capital loss forgone: $10,162,497
$38,400,000
$48,562,497”
Mr Sorensen explained that the forgiveness of debts was not shown in the tax returns filed on behalf of Metals and Resources as the debt forgiveness was credited directly to an equity account for each company called the reorganisation reserve. There was no requirement to make any adjustment in the tax return for any debt forgiveness amount, because the debt forgiveness was not reflected in the profit and loss of Metals or Resources. The section 245-90 agreements were retained with the tax returns. Mr Sorensen identified the reorganisation reserve at note 24 of the Special Purpose Finance Report for the year ended 30 June 2015 for Resources (exhibit QNK.002.008.9477).
During cross-examination, Mr Sorensen confirmed (at Transcript 18-21) that where the section 245-90 agreement was entered into, the debt forgiveness was dollar for dollar which meant that each dollar that was received under the loan could be effectively kept, whereas if a dividend was paid, it would have to be grossed up by a minimum of 30 per cent and potentially 49 per cent to cover all income tax liabilities, because Resources and Metals could not pay any franked dividends. Mr Sorensen explained (at Transcript 18-22) that when the Palmer interests acquired Resources and Metals, those companies had an existing cost base for the assets that advantaged them and, further, it was sensible for the owner of a private company group for loans to be made, rather than dividends paid, and doing so was within the law.
Mr Sorensen was shown the loan agreement dated 29 June 2011 between QNI and Mineralogy (exhibit QNK.014.001.0223) whereby QNI as lender promised to provide a loan of up to A$10m to Mineralogy as the borrower and said that he had not seen that document before (at Transcript 18-26). That would only be relevant, if it were an operative loan agreement.
Mr Sorensen was cross-examined on the manner in which he and his team provided tax advice to the Palmer controlled companies. He was asked to look at one document on QN Group structural changes (exhibit QNK.013.022.1479) that appeared to have been prepared by the QN Group that included comments in respect of issues raised by PWC (exhibit QNK.013.022.1478). It was not a document that had been prepared by Mr Sorensen, but he accepted the proposition that was put to him (at Transcript 18-37) that PWC would receive instructions from the client, assume the instructions were correct and then provide advice based on those instructions. Mr Sorensen was then cross-examined on a bundle of documents that included deeds of debt forgiveness for the purpose of division 245 of the ITAA and settlement notices requiring completion of other transactions dated variously in July 2012 and a written sale agreement between Mr Palmer and QNI for a Cessna aircraft dated 6 July 2012 (exhibit QNM.001.002.6400) that was forwarded from one of Mr Sorensen’s team on 28 October 2013 (exhibit QNM.001.002.6399) to Ms Carlyle on whether he would investigate whether each of the documents were actually executed on the date the document was dated. In respect of the sale of the Cessna, Mr Sorensen responded (at Transcript 18-38) that he did query that with Mr Palmer who asserted that was correct and Mr Sorensen confirmed with the auditors they were happy with the transactions as documented.

The corporate defendants pleaded a defence under s 588FG of the Act that would preclude the court making orders under s 588FF(1) of the Act. Section 588FG(2) provides:
“A court is not to make under section 588F an order materially prejudicing a right or interest of a person if the transaction is not an unfair loan to the company, or an unreasonable director-related transaction of the company, and it is proved that:
(a) the person became a party to the transaction in good faith; and
(b)at the time when the person became such a party:
(i)the person had no reasonable grounds for suspecting that the company was insolvent at that time or would become insolvent as mentioned in paragraph 588FC(b); and
(ii)a reasonable person in the person’s circumstances would have had no such grounds for so suspecting; and
(c)the person has provided valuable consideration under the transaction or has changed his, her or its position in reliance on the transaction.”
The defence under s 588FG(2) required China First and Waratah Coal respectively to prove that each became a party to the transactions to which each company were parties in good faith and, as at 13 January 2016, each of China First and Waratah Coal had no reasonable grounds for suspecting that QNI was insolvent at that time and a reasonable person in the circumstances of each of China First and Waratah Coal would have had no such grounds for so suspecting. These were not matters on which any person with relevant knowledge gave evidence that would assist China First and Waratah Coal in discharging the onus each bears respectively in relation to the defence. See Williams v Peters [2010] 1 Qd R 475 at [55]-[57].
The corporate defendants did not make any written or oral closing submissions on the application of s 588FG(2). There was no formal abandonment of the defence, but the failure to make any submissions was implicit acknowledgement, and I find, that China First and Waratah Coal could not discharge the onus each bore in relation to the defence.
In the statement of claim, the plaintiffs sought to have all agreements entered into by QNI as part of the China First transaction declared void ab initio. In the written closing submissions, however, the plaintiffs did not seek that relief in respect of the share subscription agreement on the basis that, as a consequence of the settlement with the SPL, China First had released the claims it had against QNI. The plaintiff submitted this extended to QNI’s obligation to pay the subscription fee due under the share subscription agreement. The submissions on the effect of the settlement with the SPL on QNI’s liability under the share subscription agreement are found at paragraphs 881 to 883 of the plaintiffs’ written closing submissions. This was not a matter that was referred to in oral submissions by either the plaintiffs or the corporate defendants. In fact, all that was referred to by senior counsel for the plaintiffs in the oral closing submissions was that the plaintiffs set out the relief sought in respect of the uncommercial transactions in that section of their written submissions (at Transcript 27-22) and the fact that the plaintiffs were no longer seeking an order to set aside the share subscription agreement was not highlighted.
The plaintiffs did seek in paragraph 884(b) of their written closing submissions an order that China First not seek to recover any payments from QNI under the share subscription agreement (as reflecting the settlement with the SPL), but that order is not based on the claims of the plaintiffs in this proceeding. I therefore do not consider I could make such an order without at least hearing from China First.
I have difficulty with the fact that the matters in paragraphs 881 to 883 were not addressed in oral submissions, as if the share subscription agreement is not set aside, that leaves QNI with the two billion shares in China First for which the plaintiffs now assert QNI has been released from its obligation to pay. This can be contrasted with the case the plaintiffs pursued in the proceeding (until the closing submissions) that the share subscription agreement was an uncommercial transaction and should be set aside as being void ab initio. If the share subscription agreement were set aside, it would have the result that there would be no obligation on QNI to pay for the shares in China First, but the shares issued to QNI would have to be relinquished. I therefore propose not to make any orders at this stage in relation to the share subscription agreement, but will reserve the question of what orders are appropriate until after these reasons are published, in order to give both parties the opportunity to make further submissions on the appropriate relief in view of my conclusion it was an uncommercial transaction.
In view of the findings that I have made that the China First charge, the Waratah Coal charge and the security deed are uncommercial transactions, each is voidable under either or both of s 588FE(2) and (3) of the Act. It is appropriate that declarations be made that each of the transactions is voidable. It is therefore necessary to consider what orders are appropriate to be made pursuant to s 588FF(1) of the Act. China First and Waratah Coal have been on notice from the statement of claim that the plaintiffs claim orders that each of the transactions be declared void ab initio. Because of the timing of the transactions when it was inevitable QNI would enter into voluntary administration, I am satisfied that it is appropriate to make the orders sought by the plaintiffs in relation to these transactions.
It is therefore not necessary to consider the plaintiffs’ alternative claim under s 588FJ of the Act, but for completeness sake I will do so. That provision provides that a circulating security interest created within six months of the relation back date is void, except so far as an exception applies. That means the China First charge and the Waratah Coal charge are void under this provision, unless one of the exceptions in s 588FJ(2) applies. The corporate defendants plead that by virtue of the exceptions in paragraphs (a) and (d) of s 588FJ(2), both the Waratah Coal charge and the China First charge are not void. In addition, the defendants plead that, by virtue of s 588FJ(2)(c), the China First charge is not void against the liquidators of QNI, because it secures the amount of QNI’s obligations pursuant to the share subscription agreement which were obligations undertaken at, or about the time of entry, into the China First charge for the benefit of QNI.
On its terms, the exception in paragraph (a) does not apply to either charge, as neither China First nor Waratah Coal paid an advance to the company that was secured by the relevant charge. Paragraph (d) provides an exception where the charge secures an amount payable for property supplied to the company. That exception does not apply to the Waratah Coal charge but prima facie applies to the China First charge which secured the amount payable by QNI for the shares in China First issued to QNI under the share subscription agreement. Section 588FJ(5) states that paragraph (d) does not apply in relation to an amount payable for property in so far as the amount exceeds the market value of the property, when supplied to the company. In view of Mr Marston’s opinion that at the date of the transaction the China First Coal Project had no market value and that was the only asset of China First, it means that the exception in paragraph (d) does not apply to the total amount for the purchase price of the shares secured the China First charge. China First also sought to rely on the exception in paragraph (c), but that does not, on its terms, apply to the China First charge. Paragraph (c) applies to the extent the charge secures “the amount of a liability under a guarantee or other obligation undertaken at or after that time on behalf of, or for the benefit of, the company”. QNI’s obligation to pay China First for the shares is not an obligation that is “on behalf of, or for the benefit of” QNI. That means that both the China First charge and the Waratah Coal charge were also void under s 588FJ(2) of the Act.

Martino transactions

The conclusion that the China First charge was voidable and should be declared void ab initio against the second plaintiff means, on any view, Mr Martino had no authority whatsoever to act in the manner in which he did, upon being appointed pursuant to the China First charge. It is therefore not strictly necessary to deal with the claims in part W of the statement of claim, but as Mr Martino participated in the trial as a party to the end of the trial, I will address the submissions made by the parties in respect of the issues that remained outstanding between the plaintiffs and Mr Martino during the trial of the proceeding.
Apart from the proceeding to set aside the China First and Waratah Coal transactions, QNI had commenced another proceeding in this court against Mineralogy seeking to recover about $105m from Mineralogy (which is also now incorporated into this proceeding).
The transactions involving Mr Martino took place in early May 2017. On 3 May 2017 Mr Palmer on behalf of China First signed a deed appointing Mr Martino as the agent of QNI pursuant to the China First charge. Mr Martino accepted the appointment on 3 May 2017. Then on the same day Mr Martino on behalf of QNI entered into a deed dated 3 May 2017 with China First whereby, in consideration of the releases provided for in clause 11 of the deed, China First agreed to reduce the debt owed by QNI from $135m to $125m. Clause 11 provided:
“Upon this deed being duly executed by each of the required signatories and upon receipt by CF of notice that the proceeding has been formally discontinued, withdrawn or dismissed, QN and CF mutually release and discharge each other from all claims, actions, suits, causes of action, demands, complaints, damages and costs which each may have had, have now or may have in the future, concerning the proceeding and the carriage of the proceedings, but for the execution of this deed. Furthermore, the consideration of the matters set out herein QN releases all directors and related parties as defined under the Corporation Act 2001 (of CF) from all claims, actions, suits, causes of action, demands, complaints, damages and costs that have accrued to the date hereof.”
Although recital A to the deed referred to QNI’s proceeding against Mineralogy, Mineralogy was not a party to the deed.
On 4 May 2017 a substitute deed was prepared for signature by Mr Martino where Mineralogy was now also a party to the settlement deed, and clause 9 of the deed referred specifically to the agreement by QNI to discontinue the proceeding against Mineralogy and not make future claims against Mineralogy which have been the subject of the proceeding. Clause 11 was also amended so that the mutual releases involved QNI, China First and Mineralogy and QNI specifically released all directors and related parties of Mineralogy and China First as defined under the Act (of China First) from all claims, actions, suits, causes of action, demands, complaints, damages and costs that had accrued to the date of the deed.
Mr Martino signed a notice of party acting in person on behalf of QNI and a notice of discontinuance in respect of QNI’s proceeding against Mineralogy on 8 May 2017. The notice of discontinuance was signed on behalf of Mineralogy on 9 May 2017. Both documents were filed in the court on 9 May 2017. The GPLs on behalf of QNI immediately applied for an interim injunction restraining Mr Martino and China First from taking any steps pursuant to his appointment on 3 May 2017 as the controller of QNI or the China First charge. The interim injunction was granted by Bond J and an interlocutory injunction was granted first until 25 May 2017 and then until the trial or earlier order: Queensland Nickel Pty Ltd (in liq) v Martino [2017] QSC 95.
The claims against Mr Martino were incorporated into this proceeding.
Mr Martino was an active defendant in the proceeding and represented throughout the trial. When Mr Robinson of counsel was invited to open the case for Mr Martino on 21 August 2019, he indicated that Mr Martino would abide the court’s decision in respect of the validity of his appointment as the controller of QNI.
On 27 August 2019, the corporate defendants abandoned the defence based on the Mineralogy settlement deed which Mr Martino had entered into on 4 May 2017 and no longer sought to rely on evidence from Mr Martino (at Transcript 18-40). Mr Martino remained a defendant in the proceeding and continued to appear by counsel and solicitors.
By letter dated 10 October 2019 from Mr Martino’s solicitors to the plaintiffs’ solicitors (exhibit 67), Mr Martino has unconditionally and permanently undertaken not to act further on his appointment, or purported appointment, as controller of QNI. That undertaking reflected the terms of the interlocutory injunction made by Bond J on 18 May 2017. The letter stated:
“Our client hereby permanently undertakes not to – whether by his servants, agents or otherwise – take any step pursuant to his appointment or purported appointment on or about 3 May 2017 as agent and controller to property of Queensland Nickel Pty Ltd (in liquidation) (QNI) including (without limitation):
1.     Filing any documents in court proceedings on behalf of QNI;
2.     Purporting to dispose of or otherwise deal with any property of, or held in the name of, QNI; and
3.     Executing or entering into any deed, agreement or other instrument purporting to bind QNI.”
Mr Martino’s position changed in respect of the validity of his appointment by the time his written closing submissions were provided to the other parties. In the written submissions on his behalf, the position was advanced that, as Mr Martino was not a registered liquidator and his appointment was effectively as a receiver, his appointment was invalid, as pursuant to s 418(1)(d) of the Act a person who is not a registered liquidator is not qualified to be appointed as receiver of property of a corporation. Although the plaintiffs did not accede to that submission and asserted other reasons for the invalidity of Mr Martino’s appointment, the plaintiffs’ position was that, as long as a declaration was made about the invalidity of Mr Martino’s appointment, the basis on which it was made did not need to be determined.
During closing submissions on 17 October 2019, Mr Martino gave an undertaking to the court in the terms which had been proposed in the letter dated 10 October 2019. The plaintiffs did not oppose that aspect of their relief being dealt with by Mr Martino’s undertaking to the court. In addition, an order was made with the concurrence of the parties in another proceeding in this court involving the plaintiffs, Mr Martino and China First (BS4902 of 2017) that disposed of a notice that Mr Martino had purported to issue to the GPLs under s 430 of the Act on 3 May 2017. A declaration was also made in that proceeding in terms that the purported appointment of Mr Martino as controller of QNI was invalid and of no effect. Costs were reserved.
The issue that remains in relation to Mr Martino is whether, in light of the declaration made by consent that his appointment as controller of QNI was invalid and of no effect and his undertaking given to the court on 17 October 2019, any further relief that was sought by the plaintiffs against Mr Martino in paragraphs 522(b) and (c) of the statement of claim should be ordered.
The relief sought in paragraph 522(b) was a declaration that the Mineralogy settlement deed and the two notices signed and filed by Mr Martino in proceeding BS3202 of 2017 were not legally effective to bind QNI or to discontinue the proceeding. There is no utility in making the declaration that is sought in paragraph 522(b) of the statement of claim after the corporate defendants abandoned reliance on the Mineralogy settlement deed and the undertakings given by Mr Martino to the court. The determination of this proceeding will bring to an end the interlocutory injunction ordered by Bond J on 18 May 2017 which in the meantime had restrained any action on the settlement deed and notices signed by Mr Martino. The making of the declaration that those documents were ineffective has been overtaken by the making of the declaration that Mr Martino was invalidly appointed. The application for the declaration in paragraph 522(b) of the statement of claim is therefore refused.
The plaintiffs pressed for a declaration in terms of that sought in paragraph 522(c) of the statement of claim that Mr Martino’s conduct in purporting to bind QNI to the deed of settlement entered into between QNI, China First and Mineralogy dated 4 May 2017 and the two notices given to the court in proceeding number BS3202 of 2017 amounted to a breach of Mr Martino’s obligation to act in good faith for the purpose of obtaining repayment of an amount owing to China First and not to act so as to sacrifice the interests of QNI. The plaintiffs submitted there was utility in making the declaration sought in paragraph 522(c), as it may have relevance on the question of costs. The corporate defendants did not make submissions on the substantive issue raised by the declaration, but submitted that the declaratory relief sought by the plaintiffs was of no utility. Mr Martino asserts there is no utility in making the declaration sought in paragraph 522(c), as no party is relying on the Mineralogy settlement deed or the notice of discontinuance. Mr Martino did, however, also submit against the making of the declaration sought in paragraph 522(c) on the basis that he did not owe the obligations imposed upon a controller, if he were not validly appointed as a controller.
The issue the plaintiffs seek to have determined between them and Mr Martino in respect of the declaratory relief sought in paragraph 522(c) is therefore whether, even though it is now common ground that Mr Martino was not validly appointed, he owed the duties alleged by the plaintiffs on the basis he purported to assume the position of a controller of QNI.
First, it should be noted that the declaration sought in paragraph 522(c) was by way of further or alternative relief.
Second, the plaintiffs relied on three authorities which dealt with whether persons who were not validly appointed as directors (or like officers) owed the duties that a validly appointed director (or like officer) owed.
Gibson v Barton (1875) LR 10 QBD 329 concerned circumstances that would now be considered quite unusual. The appellant Mr Gibson was the secretary of Steam Stoker Company Ltd. An information was brought against him by the respondent who was a member of the company that Mr Gibson as the manager had not forwarded to the registrar of joint stock companies a copy of the list of persons who, at the 14^th day after the holding of the ordinary general meeting of the company, were members of the company as required by s 26(1) of the relevant legislation. Section 27 of the legislation made it an offence for every director and manager of the company who knowingly and wilfully authorised or permitted default in complying with s 26(1). The respondent gave evidence that he knew of the appellant as the manager of the company. No person had been appointed by the board of directors of the company as manager or managing director. The default was alleged to have occurred in respect of the general meeting of the shareholders due to be held in 1873 which was not held. The court by a majority (Blackburn and Lush JJ) found there was evidence that the appellant was permitted by the board of directors to be the manager of the company, as if he had been legally appointed. He was therefore described by Blackburn J at 338 as a “manager de son tort”. It was held at 340 that the appellant wilfully and knowingly permitted default in not causing the company to call a meeting in 1873 which was the condition precedent to sending in the list of shareholders, so that he knowingly and wilfully permitted the default of the company in not sending in the list and was liable to the penalty for not doing so.

In In re Canadian Land Reclaiming and Colonizing Company (1880) 14 Ch D 660 two persons were not validly appointed as directors as they did not hold the requisite shares for eligibility for appointment as a director. They acted as directors. The company was wound up and the liquidator sought damages from each of them for misfeasance equivalent to the value of the shares required for appointment as a director. The liquidator was successful at first instance, but unsuccessful on the appeal on the basis there was no misfeasance. The liquidator had proceeded against the appellants on the basis of the statutory provision that permitted the liquidator to recover from a director or any officer of the company any moneys of the company or damages for misfeasance or breach of trust in relation to the company. For the purpose of the appeal, it was noted at 670 that the following admission and submission was made:
“It was admitted by the Appellants that these persons, as de facto directors, would be liable for any act of commission or any omission on their part in the same manner and to the same extent as if they had been de jure as well as de facto directors. They were, so to say, directors de son tort, and liable in that character, but not otherwise, and you must shew something that they did which resulted in loss to the company, and for which, if they had been duly appointed directors of the company, the company would have been entitled to a remedy against them.”
The admission was consistent with the provision of the relevant legislation that “all appointments of directors shall be deemed to be valid, notwithstanding any defect that may afterwards be discovered in their appointments or qualifications” and one of the articles of association of the company to similar effect that all acts done by any person acting as a director shall be valid, as if every such person had been duly appointed and was qualified to be a director. It was not shown that the de facto directors had done anything wrong in the course of acting as directors that caused loss to the company.
In Corporate Affairs Commission v Drysdale (1978) 141 CLR 236, Mr Drysdale was appointed to fill the casual vacancy on the board of a company. The company’s articles of association provided that a director appointed to fill a casual vacancy should hold office only until the next following annual general meeting and should then be eligible for re-election. Mr Drysdale was not re-elected and therefore ceased to hold office, but he continued to attend meetings of the board, to vote on resolutions and to participate in the management of the company as a director. He was later charged with failing to act honestly in the discharge of the duties of his office as a director and failing to use reasonable diligence in the discharge of the duties of that office in the period that post-dated the annual general meeting at which he was not re-elected and ended with his resignation as a director. He was convicted of both charges, but on a case stated to the New South Wales Court of Criminal Appeal, it was determined that he was not a director within the meaning of s 124 of the Companies Act 1961 (NSW). The High Court reversed that decision.
Even though Mr Drysdale’s case was not one of invalid appointment (as he continued acting as a director after his valid appointment was terminated), the court relied on authorities including Gibson and Canadian Land Reclaiming to hold that s 124 of the NSW Act applied to a de facto director. Mason J (which whom Gibbs J agreed) held at 243 that a de facto who holds over after his appointment as a director has terminated accords with the assumptions that s 124(1) makes, as he continues to occupy the office of director (although without lawful authority) and discharges the duties attached to that office. Murphy J agreed at 245 that a director may occupy an office, although wrongfully. Aickin J (with whom Gibbs J also agreed) observed at 252 in relation to Gibson that:
“Although that case deals only with ‘managers’ which is not an office recognized by the Act as a necessary part of the internal government of a company, as the office of director, it is clear that the majority thought that the reasoning applied to de facto directors.”
Aickin J then analysed the decision in Canadian Land Reclaiming and noted at 253:
“That case cannot be regarded as a direct decision concerning the liability under a misfeasance summons of a de facto director, although the members of the Court appeared to agree with the concession made by counsel for the appellants.”
Aickin J concluded at 255-256 that these and like authorities meant that it was too late to say that the word “director” in the relevant statutory provisions was confined to directors properly so called and duly appointed to such office.
In contrast to the authorities that treat a de facto director as a director, an invalidly appointed receiver was treated as a trespasser: In re Goldburg (No 2) [1912] 1 KB 606, 611. That distinction is reflected by the current definitions in the Act respectively for “director” and “controller”. The definition of “director” in s 9 of the Act expressly extends to a person who is not validly appointed as a director who acts in the position of a director or the directors of the company are accustomed to act in accordance with that person’s instructions or wishes. No such extended definition applies to “controller” which is consistent with express provision being made in s 419(3) of the Act for dealing with the liability of a controller who was not properly appointed. The scheme for regulation of the conduct of controllers under the Act is arguably different to the scheme for the regulation of the conduct of directors (or like officers) of corporations.
Where there is no real utility between the parties in making the declaration that is sought in paragraph 522(c), because of the undertaking given by Mr Martino to the court on the last day of the trial and the order to which he consented about the invalidity of his appointment, it is not necessary, and I am therefore not inclined, to decide the substantive issue pursued by the plaintiffs of whether Mr Martino was subject to the obligations that would have applied, if he were validly appointed, to the acts he purported to perform as controller of QNI. This is particularly so, when the authorities relied on by the plaintiff for imposing the obligation are not necessarily definitive of the issue. The question of costs of the proceeding as between the plaintiffs and Mr Martino is not going to be determined by whether or not a declaration is made that has no utility, as a result of the late concessions made by Mr Martino in relation to the invalidity of his appointment and the undertakings given by him to the court. The application for the declaration in paragraph 522(c) of the statement of claim is therefore refused.

Orders

There are some orders that can be made on the publication of these reasons, as a result of the conclusions that I have reached in the course of these reasons. The dealings that were the subject of these proceedings were complex and it may be that the parties consider that further orders ancillary to those made or to give effect to, or as a consequence of, these reasons should be made. No doubt the parties will wish to make written submissions on the question of the costs of the proceeding and other outstanding related questions of costs, such as the costs reserved in respect of proceeding BS4902 of 2017. I therefore propose to make an order adjourning those questions to a date to be fixed. That course will accommodate the parties agreeing on a timetable for further submissions on the terms of any additional orders and costs and any further hearing that may be necessary to dispose of those questions. The orders that I will make in the meantime are set out at the commencement of these reasons.

CITATION:	Parbery & Ors v QNI Metals Pty Ltd & Ors [2020] QSC 143
PARTIES:	STEPHEN JAMES PARBERY IN HIS CAPACITY AS LIQUIDATOR OF QUEENSLAND NICKEL PTY LTD (IN LIQ) ACN 009 842 068 (first plaintiff) QUEENSLAND NICKEL PTY LTD (IN LIQ) ACN 009 842 068 (second plaintiff) JOHN RICHARD PARK, KELLY-ANNE LAVINA TRENFIELD & QUENTIN JAMES OLDE AS LIQUIDATORS OF QUEENSLAND NICKEL PTY LTD (IN LIQ) ACN 009 842 068 (third plaintiffs) v QNI METALS PTY LTD ACN 066 656 175 (first defendant) QNI RESOURCES PTY LTD ACN 054 117 921 (second defendant) QUEENSLAND NICKEL SALES PTY LTD ACN 009 872 566 (third defendant) CLIVE FREDERICK PALMER (fourth defendant) CLIVE THEODORE MENSINK (fifth defendant) IAN MAURICE FERGUSON (sixth defendant) MINERALOGY PTY LTD ACN 010 582 680 (seventh defendant) PALMER LEISURE AUSTRALIA PTY LTD ACN 152 386 617 (eighth defendant) PALMER LEISURE COOLUM PTY LTD ACN 146 828 122 (ninth defendant) FAIRWAY COAL PTY LTD ACN 127 220 642 (tenth defendant) CART PROVIDER PTY LTD ACN 119 455 837 (eleventh defendant) COEUR DE LION INVESTMENTS PTY LTD ACN 006 334 872 (twelfth defendant) COEUR DE LION HOLDINGS PTY LTD ACN 003 209 934 (thirteenth defendant) CLOSERIDGE PTY LTD ACN 010 560 157 (fourteenth defendant) WARATAH COAL PTY LTD ACN 114 165 669 (fifteenth defendant) CHINA FIRST PTY LTD ACN 135 588 411 (sixteenth defendant) COLD MOUNTAIN STUD PTY LTD ACN 119 455 248 (seventeenth defendant) EVGENIA BEDNOVA (eighteenth defendant) ALEXANDER GUEORGUIEV SOKOLOV (nineteenth defendant) ZHENGHONG ZHANG (twentieth defendant) SCI LE COEUR DE L’OCEAN (twenty-first defendant) DOMENIC MARTINO (twenty-second defendant)
FILE NO:	BS6593 of 2017
DIVISION:	Trial Division
PROCEEDING:	Trial
DELIVERED ON:	3 June 2020
DELIVERED AT:	Brisbane
HEARING DATES:	16-17, 22-26, 30-31 July, 2, 5, 8, 19-21, 23, 27-28 August, 2-3, 30 September, 1-2, 4, 16-17 October 2019
JUDGE:	Mullins J
ORDERS:	1. The plaintiffs’ claims against the seventh defendant are dismissed. 2. It is declared that the fixed and floating charge executed by the second plaintiff in favour of the sixteenth defendant on 13 January 2016 (the China First charge) is voidable under s 588FE of the Corporations Act 2001 (the Act). 3. Pursuant to s 588FF of the Act it is declared that the China First charge is void ab initio against the second plaintiff. 4. The question of what, if any, relief should be ordered in respect of the finding that the share subscription argument between the second plaintiff and the sixteenth defendant executed on 13 January 2016 is an uncommercial transaction within the meaning of s 588FE of the Act is adjourned to a date to be fixed. 5. It is declared that the fixed and floating charge executed by the second plaintiff in favour of the fifteenth defendant on 13 January 2016 (the Waratah Coal charge) is voidable under s 588FE of the Act. 6. Pursuant to s 588FF of the Act, it is declared that the Waratah Coal charge is void ab initio against the second plaintiff. 7. It is declared that the security deed executed by the fifteenth defendant, the second plaintiff and the first and second defendants on 13 January 2016 (the security deed) pursuant to which the fifteenth defendant agreed to make its mining tenements EPC 1040 and EPC 1079 available as security for credit or facilities provided by creditors of the second plaintiff and the first and second defendants is voidable under s 588FE of the Act. 8. Pursuant to s 588FF of the Act, it is declared that the security deed is void ab initio against the second plaintiff. 9. The application for the declarations in paragraphs 522(b) and (c) of the third further amended consolidated statement of claim is refused. 10. The question of any further orders ancillary to the preceding orders or to give further effect to, or as a consequence of, these reasons and the question of costs of the proceeding are adjourned to a date to be fixed.
CATCHWORDS:	EQUITY – TRUSTS AND TRUSTEES – EXPRESS TRUSTS CONSTITUTED INTER VIVOS – CONTRACTS AND COVENANTS – where two companies which owned a nickel refinery entered into a joint venture agreement for the operation of the refinery – where the joint venturers appointed a manager to conduct the operations of the refinery – where the manager was a company wholly owned by the joint venturers and a party to the joint venture agreement – where the powers and responsibilities of the manager were extensively set out in the joint venture agreement – where a clause of the joint venture agreement specified that it should not be construed as constituting an association, corporation, trust, mining partnership or any other kind of partnership – whether the parties to the joint venture agreement manifested an intention to create an express trust of the joint venture property with the manager as the trustee and the joint venturers as beneficiaries CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – PARTIES – GENERAL PRINCIPLES – where two companies which owned a nickel refinery entered into a joint venture agreement for the operation of the refinery – where the joint venturers appointed a manager which was a subsidiary of both joint venturers to conduct the operations of the refinery as their agent – where the manager conducted bank accounts in its name for the purpose of the joint venture – where a related company to the joint venturers borrowed funds that were paid by the manager from the joint venture accounts – where under the joint venture agreement the funds in the accounts belonged to the joint venturers – whether the joint venturers or the manager was the lender to the related company CORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – WHAT CONSTITUTES INSOLVENCY – GENERALLY – EVIDENCE OF INSOLVENCY – where the company was the operator of a nickel refinery conducted as a joint venture by two related companies – where the falling nickel price meant the costs of production exceeded the revenue from sales of product – where the company was predicting a substantial cash shortfall for about nine months – where the company was unsuccessful in securing financial assistance from government, creditors and financiers – where no related party committed funds or realistic financial support – where debts to a major creditor were overdue, but the creditor had allowed a few weeks for payment of the debt and gave notice of its intention to suspend its services if payment were not made – whether the company was insolvent before the time nominated by the major creditor for suspension of services CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – EFFECT OF WINDING UP ON OTHER TRANSACTIONS – PREFERENCES AND VOIDABLE TRANSACTIONS – UNCOMMERCIAL TRANSACTIONS – where the company was on the verge of entering into voluntary administration – where the company entered into an agreement to purchase two billion shares for $135 million in a related private company that had rights under a mining right agreement to develop a coal mine where the project was in the pre-development stage – where the payment for the shares was deferred and secured by a fixed and floating charge – where there was independent expert evidence that at the time the transactions were entered into the project had a nil valuation – where the company also entered into a security deed with another related company that agreed to allow its mining exploration permits to be used as security for credit or facilities provided by creditors to the company – where the company entered into a fixed and floating charge to secure the prospective amount of security to be provided by the company holding the exploration permits – whether the transactions were uncommercial CORPORATIONS – RECEIVERS, CONTROLLERS AND MANAGERS – DUTIES AND LIABILITIES – DUTIES – GENERALLY – where the appointed controller purported to act in that capacity – where order declaring appointment as a controller invalid was made by consent of the relevant parties – where controller gave an undertaking to the court not to further act under the appointment – where plaintiffs seek a declaration that the controller’s actions breached duties of good faith and not to act so as to sacrifice the interests of the company – whether the definition of “controller” under the Corporations Act 2001 (Cth) extended to include those acting as controllers while invalidly appointed – whether there was utility in making the declaration sought by the plaintiffs Corporations Act 2001 (Cth), s 95A, s 418, s 419, s 588FB, s 588FC, s 588FE, s 588FF, s 588FG, s 588FJ In re Canadian Land Reclaiming and Colonizing Company (1880) 14 Ch D 660, considered Chan & Ors v First Strategic Development Corporation Limited (in liq) & Anor[2015] QCA 28, considered Corporate Affairs Commission v Drysdale (1978) 141 CLR 236; [1978] HCA 52, considered Corumo Holding Pty Ltd v C Itoh Ltd (1991) 24 NSWLR 370, cited Croton v The Queen (1967) 117 CLR 326; [1967] HCA 48, cited Featherstone v Ashala Model Agency Pty Ltd (in liq) [2018] 3 Qd R 147; [2017] QCA 260, cited Gibson v Barton (1875) LR 10 QBD 329, considered In re Goldburg (No 2) [1912] 1 KB 606, cited Hall v Poolman (2007) 65 ASCR 123; [2007] NSWSC 1330, considered Herdegen v Federal Commissioner of Taxation (1988) 84 ALR 271; [1988] FCA 419, considered Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64, cited Hussain v CSR Building Products Ltd (2016) 246 FCR 62; [2016] FCA 392, cited Jessup v Queensland Housing Commission [2002] 2 Qd R 270; [2001] QCA 312, considered Korda v Australian Executor Trustee (SA) Limited (2015) 255 CLR 62; [2015] HCA 6, considered Lee Kong v Pilkington (Australia) Ltd (1997) 25 ACSR 103, cited Lewis v Doran (2004) 50 ACSR 175; [2004] NSWSC 608, considered Lewis v Doran (2005) 54 ACSR 410; [2005] NSWCA 243, considered Montgomerie v United Kingdom Mutual Steam Ship Association Limited [1891] 1 QB 370, cited Parbery v QNI Metals Pty Ltd [2019] QSC 207, related QNI Resources Pty Ltd v Queensland Nickel Pty Ltd (in liq) [2017] QCA 167, considered Queensland Nickel Pty Ltd (in liq) v Martino [2017] QSC 95, related Queensland Nickel Pty Ltd (in liq) v Queensland Nickel Sales Pty Ltd [2018] 3 Qd R 133; [2017] QSC 305, cited Sandell v Porter (1966) 115 CLR 666; [1966] HCA 28, considered Sino Iron Pty Ltd v Palmer (No 3) [2015] 2 Qd R 574; [2015] QSC 94, considered Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; [2001] NSWSC 621, considered Tosich Construction Pty Ltd (in liq) v Tosich (1997) 78 FCR 363, cited United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA 49, cited Walker v Wimborne (1976) 137 CLR 1; [1976] HCA 7, cited Williams v Peters [2010] 1 Qd R 475; [2009] QCA 180, considered
COUNSEL:	G J Gibson QC, S L Doyle QC, T Sullivan QC, J P Moore QC, C G Curtis, M J Doyle and N J Derrington for the second and third plaintiffs C Ward SC, M Karam (on 22-24 July 2019) and T March for the first, second, seventh, fifteenth and sixteenth defendants K S Byrne (to 30 July 2019) and E L Robinson (from 31 July 2019) for the twenty-second defendant
SOLICITORS:	HWL Ebsworth Lawyers for the second and third plaintiffs Jonathan Shaw for the first, second, seventh, fifteenth and sixteenth defendants Robinson Nielsen Legal for the twenty-second defendant