Transonic Travel Pty Ltd & Anor v Tilakee Nominees Pty Ltd & Ors
[2024] VSC 86
•5 March 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2021 02302
| TRANSONIC TRAVEL PTY LTD (ACN 103 179 326) | First Plaintiff |
| and | |
| HELLOWORLD TRAVEL LIMITED (ACN 091 214 998) | Second Plaintiff |
| v | |
| TILAKEE NOMINEES PTY LTD (ACN 125 723 748) as trustee for the MSA TRUST (and others according to the Schedule) | Defendants |
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JUDGE: | GARDE J |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 7 June - 9 June 2023; 13 June -16 June 2023; 19 June - 21 June 2023; 17 July 2023; 1 August 2023 |
DATE OF JUDGMENT: | 5 March 2024 |
CASE MAY BE CITED AS: | Transonic Travel Pty Ltd & Anor v Tilakee Nominees Pty Ltd & Ors |
MEDIUM NEUTRAL CITATION: | [2024] VSC 86 |
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BREACH OF CONTRACT – Sale of 60% interest in travel agency business – Share sale agreement – Whether warranties given in share sale agreement were breached by vendor – Liability of vendor and vendor-guarantor.
MISLEADING OR DECEPTIVE CONDUCT – Whether representations concerning financial accounts of business and client funds held by business were made by vendor, sole director of vendor and vendor’s accountant – Whether representations were misleading or deceptive, or likely to mislead or deceive – Inability of software system to accurately determine amount of client funds held by travel business – Competition and Consumer Act 2010 (Cth) Part VIA ss 87CB, 87CD; sch 2 The Australian Consumer Law s 18 – APES 110 Code of Ethics for Professional Accountants (September 2017) (Accounting Professional and Ethical Standards Board).
ACCESSORIAL LIABILTY – Relevant principles – Whether knowing involvement by accountants in misleading and deceptive conduct by vendor.
EVIDENCE – Admissibility of spreadsheet prepared three years after business settlement date – Whether business record – Whether spreadsheet prepared in contemplation of a proceeding – Evidence Act 2008 (Vic) ss 48(4) and 69(1)-(3).
LOSS AND DAMAGE – No transaction case – Relevant principles – Whether losses incurred by purchaser were losses by conduct in breach of the relevant law – Effect of pandemic – Whether proportionate liability or contributory negligence – Whether failure by purchaser to take due care.
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APPEARANCES: | Counsel | Solicitors |
| For the First Plaintiff | Mr N De Young KC with Mr M Tehan | MinterEllison |
| For the First and Second Defendants | No appearance | |
| For the Third Defendant | Mr R J Harris | Barry Nilsson |
TABLE OF CONTENTS
Introduction........................................................................................................................................ 1
The parties........................................................................................................................................... 1
Effect of the pandemic...................................................................................................................... 2
Brief summary of issues and relief................................................................................................. 2
Share Sale Agreement....................................................................................................................... 3
Pleadings............................................................................................................................................ 11
Transonic and Helloworld’s breach of contract claims............................................................ 11
Transonic and Helloworld’s claim under s 18 of the ACL....................................................... 12
Shakespeare’s defence.................................................................................................................... 15
Shakespeare’s contributory negligence and proportionate liability claim.......................... 20
Helloworld’s letter of offer............................................................................................................ 22
Helloworld Board paper................................................................................................................. 24
APES 110 Code of Ethics for Professional Accountants........................................................... 26
APES 315 Compilation of Financial Information...................................................................... 27
Witnesses........................................................................................................................................... 27
Evidence of Stephen Coote............................................................................................................ 28
First witness outline – filed 15 July 2022........................................................................ 28
Second witness outline dated 15 November 2022........................................................ 30
Third witness outline dated 26 May 2023...................................................................... 31
Fourth witness outline of Stephen Coote dated 2 June 2023....................................... 31
Oral evidence..................................................................................................................... 32
Evidence of Des Fielding................................................................................................................ 36
Witness outline filed 15 November 2022........................................................................ 36
Oral evidence..................................................................................................................... 38
Evidence of Matthew Elliott.......................................................................................................... 40
Affidavit filed 30 May 2023.............................................................................................. 40
Elliott spreadsheet............................................................................................................. 41
Oral evidence..................................................................................................................... 41
Evidence of Mr Burnes.................................................................................................................... 42
Witness outline dated 13 July 2022................................................................................. 42
Oral evidence..................................................................................................................... 45
Evidence of Mr Mag........................................................................................................................ 49
First witness outline of 13 July 2022................................................................................ 49
Second witness outline of 15 November 2022............................................................... 51
Oral evidence..................................................................................................................... 51
Evidence of Mr Burnett................................................................................................................... 53
Witness outline of 13 July 2022........................................................................................ 53
Oral evidence..................................................................................................................... 56
Evidence of Owain Stone............................................................................................................... 57
First report dated 26 September 2022............................................................................. 57
Questions............................................................................................................................ 57
Preliminary observations................................................................................................. 59
Question 1........................................................................................................................... 61
Questions 2-4...................................................................................................................... 63
Question 5........................................................................................................................... 63
Question 6........................................................................................................................... 63
Second report dated 25 November 2022........................................................................ 64
Supplementary questions.................................................................................... 64
Question 7.............................................................................................................. 64
Question 8.............................................................................................................. 64
Question 9.............................................................................................................. 65
Oral evidence........................................................................................................ 65
Evidence of Peter Dolman.............................................................................................................. 67
Evidence of Stephen Thompson................................................................................................... 69
Introduction........................................................................................................................ 69
Calypso and FIPB.............................................................................................................. 70
TCF return.......................................................................................................................... 71
FIPB calculation................................................................................................................. 73
Calypso problems.............................................................................................................. 73
Compilation assignments................................................................................................. 75
FY2012 financial statements............................................................................................. 76
2014 Red Gum proposal................................................................................................... 78
2015 issues........................................................................................................................... 88
2016 issues........................................................................................................................... 90
2017 position....................................................................................................................... 95
Accounting notes............................................................................................................... 96
Helloworld’s proposal...................................................................................................... 98
Email chain on 15 March 2018............................................................................ 99
Dealings with Helloworld.............................................................................................. 100
Client funds balance........................................................................................................ 102
Email chain on 4 July 2018................................................................................ 104
Email chain of 5 July 2018................................................................................. 106
Failure to reconcile client funds....................................................................... 107
Shortfall in client funds..................................................................................... 108
Cross-examination........................................................................................................... 109
Shakespeare’s work......................................................................................................... 109
Calypso system................................................................................................................ 109
Vendor’s confirmation letter.......................................................................................... 110
Shakespeare’s defence..................................................................................................... 110
Email of 1 October 2014.................................................................................................. 110
Qualified audit report..................................................................................................... 110
Uncertainty as to Client Balances.................................................................................. 111
Email of 6 October 2014..................................................................................... 111
Disparity in figures.......................................................................................................... 112
Email of 1 October 2014.................................................................................................. 113
Asia Escapes financial statements for FY2017............................................................. 113
Financial year 2017.......................................................................................................... 115
Trial balance for Asia Escapes as at 31 January 2018................................................. 116
Use of client funds’ trust account by Mr Adams........................................................ 117
Due diligence balance sheet responses......................................................................... 117
Use of client funds to pay True North.......................................................................... 118
Warranties in the SSA..................................................................................................... 119
Advice by Mr Thompson to Mr Adams....................................................................... 120
Total balance as at 31 January 2018............................................................................... 121
Clause 4.6 of the SSA....................................................................................................... 121
Importance of client funds figure.................................................................................. 122
Trial balance for 31 May 2018........................................................................................ 122
Concerns about client funds in 2020............................................................................. 124
Correspondence with Mr Adams in April 2020.......................................................... 124
Conversation with Mr Coote in April 2021................................................................. 127
Re-examination................................................................................................................ 127
Calypso system................................................................................................................ 127
Work for Mr and Mrs Adams........................................................................................ 128
Use of the MYOB system................................................................................................ 128
Evidence of Greg Blashki dated 27 June 2023.......................................................................... 128
Questions............................................................................................................. 128
Question 1............................................................................................................ 129
Were the Completion Accounts prepared in accordance with the Completion Accounts principles in Part A of Schedule 2 to the SSA?............ 129
Question 2............................................................................................................ 129
Were the Completion Accounts prepared in accordance with the accounting policies, principles and practices used in the preparation of the financial statements for the year ended 30 June 2017?..................................................... 129
Question 3............................................................................................................ 129
Were the Completion Accounts prepared in accordance with the Accounting Standards?.......................................................................................... 129
Question 4............................................................................................................ 129
In what respect or respects did [Helloworld] not prepare the Completion Accounts in accordance with the matters identified in clause 7.2 of the SSA? 129
Question 1......................................................................................................................... 129
Question 2......................................................................................................................... 129
Question 3......................................................................................................................... 130
Question 4......................................................................................................................... 130
Other matters.................................................................................................................... 131
The witnesses.................................................................................................................................. 131
Lay witnesses................................................................................................................... 131
Expert evidence................................................................................................................ 131
Mr Thompson’s evidence............................................................................................... 132
Admissibility of the Elliott spreadsheet.................................................................................... 134
Shakespeare’s objection.................................................................................................. 134
Relevant statutory provisions........................................................................................ 134
Mr Elliott’s evidence....................................................................................................... 136
Analysis............................................................................................................................. 138
Business records exception to the hearsay rule........................................................... 139
Analysis............................................................................................................................. 141
Is the Elliott spreadsheet a business record?.................................................. 141
Previous representation made or recorded in the document in the course of for the purposes of the business................................................................... 141
Representations made on the basis of information directly or indirectly supplied by persons who had or might reasonably be supposed to have personal knowledge of the asserted fact........................................................ 142
Was the Elliott spreadsheet prepared in contemplation of a proceeding.. 142
Conversation between Mr Coote and Mr Elliott........................................... 144
Findings............................................................................................................................. 145
Calypso system............................................................................................................................... 146
System functionality........................................................................................................ 146
Complicating factors....................................................................................................... 149
Movements approach.................................................................................................................... 150
Was there a shortfall in client funds in the Asia Escapes business?................................... 155
What was the amount of the shortfall?...................................................................................... 156
Effect on value.................................................................................................................. 158
Breach of contract claims against Tilakee and Mr Adams..................................................... 158
Legal principles.............................................................................................................................. 159
Client Accounts Representation claim....................................................................................... 160
Company Accounts Representation claim................................................................................ 165
Management Accounts Representation claim.......................................................................... 167
Client Funds Representation claim............................................................................................ 170
Mr Thompson’s evidence............................................................................................... 171
Conclusion as to claims against Tilakee and Mr Adams....................................................... 172
Legal principles relating to Accessorial Liability.................................................................... 172
Knowing involvement in the Client Accounts Representation contravention;
Knowing involvement in the Company Accounts Representation contravention........... 174
Factual background......................................................................................................... 174
Knowing Involvement in the Management Accounts Representation contravention.... 181
Knowing involvement in the Client Funds Representations contravention..................... 182
Shakespeare Client Fund Representations claim.................................................................... 183
Shakespeare accessorial claims and Shakespeare Client Representations claim............. 187
Loss and damage – Tilakee and Mr Adams – Misleading and deceptive conduct;.......... 187
Loss and damage – Shakespeare – Accessorial liability......................................................... 187
Introduction...................................................................................................................... 187
Purchase price.................................................................................................................. 189
Money paid by Helloworld to pay refunds................................................................. 190
Payment of operating expenses of Asia Escapes........................................................ 193
Conclusion........................................................................................................................ 193
Loss and damage – Shakespeare – Misleading and deceptive conduct.............................. 194
Proportionate liability and contributory negligence.............................................................. 194
The source of the misrepresentations........................................................................... 195
Shakespeare could not affect or qualify Tilakee’s representations.......................... 196
Shakespeare did not stand to gain by the misrepresentations................................. 196
Due diligence.................................................................................................................... 196
No ledger of client liabilities.......................................................................................... 197
Impossible to say on Keygate’s accounts or records that Tilakee had ensured that the client funds were fully funded as at 31 May 2018..................................................... 197
Helloworld failed to take due care................................................................................ 197
Payment of Keygate’s client funds during the pandemic......................................... 198
Helloworld should have engaged a competent auditor or accountant................... 199
Any relevant loss has arisen as a result of a failure by Transonic and Helloworld to adequately protect themselves by the inclusion of adequate warranties in the SSA secured by adequate guarantees from persons with adequate assets......... 199
Conclusion........................................................................................................................ 199
Other matters.................................................................................................................................. 199
Misleading conduct by silence....................................................................................... 199
Failure of Shakespeare to call Mr Adams.................................................................... 201
Evidential rulings sought by Shakespeare................................................................... 202
Persons not called by Transonic and Helloworld....................................................... 203
Conclusion....................................................................................................................................... 204
HIS HONOUR:
Introduction
The plaintiffs, Transonic Travel Pty Ltd (ACN 103 179 326) (‘Transonic’) and Helloworld Travel Limited (ACN 091 214 998) (‘Helloworld’) claim damages from Tilakee Nominees Pty Ltd (ACN 125 723 748) (‘Tilakee’) as trustee of the MSA Trust, Mason Adams and Shakespeare Partners Pty Ltd (ACN 603 498 862) (‘Shakespeare’) arising from the sale of 60% of the shares in Keygate Holdings Pty Ltd (ACN 088 941 682) (‘Keygate’) which traded as Asia Escapes Holidays (‘Asia Escapes’) under a Share Sale Agreement dated 9 May 2018 (‘SSA’).
Transonic and Helloworld seek damages from Tilakee for breach of contract and for contraventions of s 18 of the Australian Consumer Law (‘ACL’) in sch 2 of the Competition and Consumer Act 2010 (Cth) (‘CC Act’), and from Mr Adams as a guarantor of Tilakee’s obligations under the SSA and as a person involved in Tilakee’s contraventions of the ACL.
They also claim against Shakespeare as a person involved in Tilakee’s contraventions of the ACL and for contravention of s 18 of the ACL in its own right.
The parties
Transonic is a wholly owned subsidiary of Helloworld and is part of the Helloworld group of travel agencies. Helloworld is an ASX listed travel company with a network of travel agents throughout Australia.
Prior to the Helloworld acquisition, Tilakee held 100% of the shares in Keygate. At the time of the acquisition, Mr Adams owned all of the shares in Tilakee.
Shakespeare was at all relevant times a firm of accountants who acted for Tilakee, Mr and Mrs Adams. Shakespeare was also as the accountant for Asia Escapes before and after the SSA transaction. Stephen Thompson was the director of Shakespeare principally performing accounting work for Asia Escapes.
The Asia Escapes business was based in Perth and specialised in travel packages to the Asia Pacific region. It sold travel packages through travel agents and was a ‘wholesale’ travel business. Client funds for suppliers such as airlines, hotels, and adventure companies were frequently received by Keygate and held in bank trust accounts. Funds paid by clients ordinarily included a margin for commission payable to Asia Escapes which was transferred into its operating accounts.
At the relevant times Keygate operated a booking system called Calypso – a bespoke software system designed for travel agents. The system was in widespread use in the travel industry and was used by Helloworld in another of its businesses known as Viva Holidays.
Effect of the pandemic
When the COVID-19 pandemic (‘pandemic’) reached Australia in early 2020, client bookings for the Asia Escapes business ceased, and clients sought refunds for cancelled travel. It was then found that there was a significant shortfall of client funds held by Keygate. The Asia Escapes business was wound up and Keygate’s shares became worthless.
Brief summary of issues and relief
Transonic and Helloworld claim against the Tilakee, Mr Adams and Shakespeare:
(a) damages pursuant to s 236 of the ACL;
(b) damages at common law; and
(c) an order that Mr Adams indemnify Transonic for loss suffered as a result of Tilakee’s breaches of the SSA.
Shakespeare makes contributory negligence and proportionate liability claims against Transonic and Helloworld if found liable in the proceeding.
The issues which arise in this proceeding can be summarised as whether:
(a) Tilakee engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL;
(b) Tilakee breached the SSA;
(c) Mr Adams is liable to indemnify Transonic and Helloworld for Tilakee’s breaches of the terms of the SSA;
(d) Mr Adams was involved in Tilakee’s misleading and deceptive conduct for the purposes of s 2 of the ACL;
(e) Shakespeare was involved in Tilakee’s misleading and deceptive conduct for the purposes of s 2 of the ACL;
(f) Shakespeare engaged in conduct in trade or commerce that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL;
(g) by reason of the defendants’ conduct, Transonic and Helloworld have suffered any and what loss and damage; and
(h) there should be any reduction for contributory negligence or proportionate liability.
Tilakee and Mr Adams were legally represented prior to the trial but did not attend the trial leaving the claims made against them undefended.
Shakespeare appeared at the trial and contested the claims made against it.
Share Sale Agreement
The SSA was dated 9 May 2018, and provided for Tilakee to be the vendor of 60% of the issued shares in Keygate. Mr Adams was the vendor guarantor and Transonic the purchaser. Helloworld was also a party to the SSA. It is convenient to set out the relevant provisions of the SSA. I will often use these terms in these reasons. [1]
[1]Where terms are used in the same meaning as the defined terms in the SSA in these reasons, initial capitals are used.
Clause 1.1 of the SSA set out the defined terms in this manner:
In this document:
…
Accounts means the audited balance sheet of the Company as at the Accounts Date and the audited profit and loss statement and statement of cash flows of the Company for the financial year ended on the Accounts Date together with the notes to, and the reports of the directors in respect of, those accounts.
Accounts Date means 30 June 2017.
Management Accounts means the unaudited balance sheet, profit and loss statement and statement of cash flows of the Company for the 7 month period on 31 January 2018.
…
Business means the business carried on by the Company and the Thailand Company as at the Completion Date including the business of conducting a wholesale retail and travel business.
Cash Consideration means $2,000,000.
…
Client Accounts means the bank accounts that the Company has established for the sole purpose of depositing the funds of clients of the Company and holding those funds on trust for each such client.
Client Cash, at a point in time, means the aggregate of the balances held in relation to customer travel at that point in time calculated as follows:
(a)the absolute value of any amounts payable by the Company to suppliers of the Company in relation to travel;
(b)less the absolute value of any amounts owed to the Company by customers or suppliers of the Company in relation to travel;
(c)plus the absolute value of any amounts paid to the Company by customers of the Company in advance of travel, including customer deposits;
(d)less the absolute value of any amounts prepaid by the Company to suppliers in relation to customer travel,
but excluding any incentives payable to agents or overrides receivable from suppliers
Client Balances, at a point in time, means the aggregate of the balances held in relation to customer travel at that point in time calculated as follows:
(a)the absolute value of any amounts owed to the Company by customers or suppliers of the Company in relation to travel;
(b)plus the absolute value of any amounts prepaid by the Company to suppliers in relation to customer travel;
(c)less the absolute value of any amounts payable by the Company to suppliers of the Company in relation to travel;
(d)less the absolute value of any amounts paid to the Company by customers of the Company in advance of travel, including customer deposits,
but excluding any incentives payable to agents or overrides receivable from suppliers.
Company means Keygate Holdings Pty Ltd (ACN 088 941 682), further details of which are set out in Part A of Schedule 1.
Completion means completion of the sale and purchase of the Sale Shares contemplated by this agreement.
Completion Accounts means the balance Sheet Statement as at the Completion Accounts Date and the profit and loss statement of cash flows of the Company for the period from the Accounts Date to the Completion Accounts Date, to be prepared in accordance with clause 7, and including the Working Capital Statement.
Completion Accounts Date means close of business on the Completion Date.
Completion Date means the date on which Completion occurs.
…
Due Diligence Materials means the information and documents provided to the Purchaser or its Representatives in the period ending five Business Days prior to the date of this agreement, a list of which is set out in Schedule 7.
…
Scheduled Completion Date means 31 May 2018 or any other date as may be agreed between the parties.
…
Target Working Capital Amount means $200,000.
…
Vendor Guarantor Loan means the loan between the Company as lender and the Vendor Guarantor as borrower in the amount of $161,381.09 (as at January 2018).
…
Warranties means each of the representations and warranties given under clause 8 and set out in Schedule 4.
…
Working Capital Amount means the sum of the components of current assets of the Company less the current liabilities of the Company, including each of the line items set out in Schedule 3 including Client Cash and Client Balances, as at the close of business on the Completion Accounts Date as set out in the Completion Accounts, agreed by the parties under clause 7.3 or determined by the Independent Accountant under clause 7.5 as the case may be.
Working Capital Statement means the statement of the Working Capital Amount as at Completion, consistent with the Completion Accounts principles set out in Schedule 2 and in the form of the pro forma set out in Part A of Schedule 3.
…
Clauses 4.1-4.3 of the SSA make provision for the purchase price of the Sale Shares in these terms:
4 Purchase Price
4.1 Amount
The Purchase Price for the Sale Shares is
(a) the Cash Consideration; plus
(b) the Consideration Shares, plus
(c) the Earn Out Cash Payment (if any),
subject to adjustment under clause 4.3.
4.2 Payment of the Purchase Price
The Purchase Price must be paid as follows:
(a)the Cash Consideration to the Vendor at Completion in accordance with clause 6.3(a)(i);
(b) the Consideration Shares to:
(i) the Vendor; or
(ii)to the Vendor Nominee if so directed by the Vendor by notice in writing to the Purchaser no later than 2 Business Days before Completion,
at Completion in accordance with clause 6.3(a)(ii); and
(c)the Earn Out Cash Payment (if any) on the Earn Out Payment Date in accordance with clause 8.
4.3 Adjustment of the Purchase Price – Working Capital Amount
(a)If the Working Capital Amount is less than the Target Working Capital Amount then on or before the Adjustment Payment Date, the Vendor must pay an amount equal to 60% of the shortfall to the Purchaser.
(b)If the Working Capital Amount is greater than the Agreed Target Working Capital Amount, then on or before the Adjustment Payment Date, the Purchaser must pay an amount equal to 60% of the excess to the Vendor.
(c)Part B of Schedule 2 sets out an example of the adjustment to the Purchase Price calculated in accordance with this clause 4.3.
Clause 4.6 provided:
4.6 Client Accounts to be fully funded
On or before the Completion Date, the Vendor must ensure the Client Balances in the Client Accounts are fully funded by Client Cash.
Clause 7 provided for Completion Accounts to be prepared, and included the following terms:
7.1 Completion Accounts
Within 60 days of the Completion Date, the Purchaser must prepare and give the Vendor a copy of the Completion Accounts.
7.2 Basis of preparation
The Completion Accounts must be prepared and the Working Capital Amount must be calculated:
(a) in accordance with, in order of priority:
(i)the Completion Accounts principles set out in Part A of Schedule 2;
(ii)the accounting policies, principles and practices used in the preparation of the Accounts; and
(iii) the Accounting Standards; and
(b)in the same format (including the same line items) as the pro forma accounts set out in Schedule 3.
…
Clause 9 provided for Tilakee’s warranties, and included:
9.1 Warranties
The Vendor represents and warrants to the Purchaser that each of the Warranties is true and accurate:
(a) as at the date of this agreement; and
(b)except for any Warranty stated to be given as at a different date or time, as at the Completion Date.
9.2 Reliance of the Purchaser
The Vendor acknowledges and agrees that the Purchaser enters into this agreement and will complete the sale and purchase of Sale Shares under this agreement in reliance on all of the Warranties.
9.3 Application of the Warranties
Each Warranty:
(a) remains in full force and effect after Completion;
(b)is separate and independent and is not limited by reference to any other Warranty or any other provision in this agreement;
…
Schedule 4 to the SSA contained warranties given by the parties and included the following warranties given by Tilakee relating to the Accounts:
4.1 The Accounts:
(a) give a true and fair view of:
(i)the assets, liabilities, financial position and state of affairs of the Company as at the Accounts Date; and
(ii)the financial performance of the Company for the year ended on the Accounts Date;
(b) were prepared in accordance with:
(i)the Accounting Standards, the Corporations Act and all other applicable Laws; and
(ii)the same accounting policies, practices and procedures (and method of application of them) as were applied in the corresponding accounts for the previous five years;
(c)contain proper and adequate provision for and full disclosure of all liabilities, whether actual, contingent or otherwise, of the Company at the Accounts Date; and
(d)are not affected by any abnormal, extraordinary, exceptional or non-recurring items.
…
4.3 The Management Accounts:
(a) show a materially accurate view of:
(i)the financial position and state of affairs of the Company and the Business as at the date to which they have been prepared; and
(ii)the financial performance of the Company and the Business for the period in respect of which they have been prepared;
(b)were prepared in accordance with the same accounting policies as were applied in the preparation of the management accounts of the Company and the Business in the previous 12 months; and
(c)are not affected by an unusual, abnormal, extraordinary or non–recurring item.
In the SSA, Mr Adams gave a guarantee which included the following:
20.1 Consideration
The Vendor Guarantor acknowledges:
(a)entering this agreement in return for the Purchaser agreeing to purchase the Sale Shares at the Vendor Guarantor’s request and for other valuable consideration; and
(b) that the Purchaser relies on the operation of this clause 20.
20.2 Guarantee and Indemnity
The Vendor Guarantor unconditionally and irrevocably:
(a)guarantees to the Purchaser and the Company the due and punctual performance and observance by the Vendor of all the obligations contained in or implied under this agreement that must be performed and observed by the Vendor (Guaranteed Obligations); and
(b)indemnifies the Purchaser and the Company against, and must pay on demand amounts equal to, any Liability of the Purchaser and the Company in relation to:
(i)any Guaranteed Obligation (or which would be or become a Guaranteed Obligation if enforceable, valid and not illegal) being or becoming unenforceable, invalid or illegal;
(ii)the Vendor failing, or being unable, to pay any amount or to perform any of its Guaranteed Obligations in accordance with this agreement; or
(iii)any amount that the Vendor is required to pay in respect of its Guaranteed Obligations under this agreement not being recoverable from the Vendor.
in each case, for any reason and whether or not the Purchaser knew or ought to have known about those matters.
20.3 Non–payment or non–performance
If the Vendor does not:
(a)pay any amount it is obliged to pay under the Guaranteed Obligations in accordance with this agreement, the Vendor Guarantor must pay that amount on demand as if it was the Vendor; or
(b)perform any of the other Guaranteed Obligations under this agreement, the Vendor Guarantor must perform, or procure the performance of, those obligations (on demand by the Purchaser) in accordance with this agreement.
Schedule 7 to the SSA lists the Due Diligence Materials. They included Keygate’s financial statements for the year ended 30 June 2017 and Management Accounts for the period ended 31 January 2018. The balance sheet for the year ended 30 June 2017 showed client funds as a current liability in the amount of $2,889,595. Transonic and Helloworld claim that this amount was wrong.
On 31 May 2018, Mr Adams, as the sole director of Tilakee, provided a representation letter to Transonic which confirmed at completion that:
(a)No Material Adverse Change: there has been no material adverse change to the Company or the Business or the financial or trading position, liabilities, revenue, earnings, financial condition, profitability or prospects of the Company;
(b)Discharge of External Debt and Inter Company Debt: the discharge in full of the External Debt and Inter Company Debt; and
(c)Client Accounts to be fully funded: the Client Accounts have been fully funded in accordance with clause 4.6.
(‘vendor’s confirmation letter’)
On 31 May 2018, the sale of shares under the SSA was completed. Transonic paid Tilakee the sum of $2,000,000, and Helloworld issued 189,864 shares in Helloworld to Tilakee.
Pleadings
Transonic and Helloworld relied on a Further Amended Statement of Claim filed 13 June 2023 and replies filed on 14 June 2022 to Shakespeare’s Amended Defence and the First and Second Defendant’s Amended Defence.
Shakespeare relied on a Second Further Amended Defence filed 15 June 2023 (‘defence’).
Transonic and Helloworld’s breach of contract claims
Transonic and Helloworld claim that Tilakee breached the SSA in three ways:
(a) by failing to ensure that the Client Balances in the Client Accounts were fully funded by Client Cash by 31 May 2018 contrary to cl 4.6 of the SSA;
(b) because there was a shortfall or deficiency in the Client Cash held by Keygate to fund the Client Balances of approximately $1,180,724.67 as at 31 May 2018. As a result:
(1)the Accounts did not give a true and fair view of the assets, liabilities, financial position or state of affairs of Keygate as at 30 June 2017 contrary to cl 4.1(a)(i) of sch 4 and cl 9.1 of the SSA; and
(2)the Accounts did not contain proper and adequate provision for and full disclosure of all liabilities, whether actual, contingent or otherwise as at 30 June 2017 contrary to cl 4.1(c) of sch 4 and cl and 9.1 of the SSA; and
(c)because the Management Accounts did not show a materially accurate view of the financial position and state of affairs of Keygate as at 31 January 2018, or over the period from 1 July 2017 to 31 January 2018 contrary to cl 4.3(a)(i) and (ii) of sch 4 and cl 9.1 of the SSA.
Transonic and Helloworld also claim against Mr Adams under the vendor guarantee given in cl 20.2(b) of the SSA. Helloworld also claimed against Mr Adams for breach of the restraint provisions relating to employment in the SSA but this claim was not pursued at trial.
Transonic and Helloworld’s claim under s 18 of the ACL
Transonic and Helloworld claim that Tilakee engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 18 of the ACL. There was no dispute that the SSA and conduct relating to the SSA were ‘in trade or commerce’.
Transonic and Helloworld alleges that Tilakee made four representations. They were:
(a) Client Accounts Representation. By the vendor’s confirmation letter and by its conduct, Tilakee represented that the Client Accounts have been fully funded in accordance with cl 4.6 of the SSA.
(b) Company Accounts Representation. By giving the warranty contained in cl 4.1(a), (b); and (c) of sch 4 of the SSA, Tilakee represented that:
(1)the Accounts gave a true and fair view of the assets, liabilities, financial position and state of affairs of Keygate as at 30 June 2017 and of the financial performance of Keygate for the year ended 30 June 2017;
(2)contained proper and adequate provision for and full disclosure of all liabilities, whether actual, contingent or otherwise of Keygate at 30 June 2017; and
(3)were not affected by any abnormal, extraordinary, exceptional or non-recurring items.
(c)Management Accounts Representation. By giving the warranty contained in cl 4.3 (a) and (c) of sch 4 of the SSA, Tilakee represented that:
(1)the Management Accounts showed a materially accurate view of the financial position and state of affairs of Keygate and the business as at 31 January 2018 or over the period from 1 July 2017 to 31 January 2018; and
(2)were not affected by an unusual, abnormal, extraordinary or non-recurring item.
(d)Client Funds Representation. By the inclusion of the definition of ‘Client Accounts’ in the SSA, Tilakee represented that:
(1)Keygate had established bank accounts for the sole purpose of depositing funds of clients of the business;
(2)Keygate would hold these funds on trust for each client; and
(3)Keygate would not deal with funds of clients of Keygate other than to use them to pay costs associated with client travel.
Transonic and Helloworld allege that each of the four representations was false and relied on by Transonic and Helloworld to their detriment.
Transonic and Helloworld allege that Mr Adams:
(a) was the sole director and secretary of Tilakee;
(b) operated the Asia Escapes travel business;
(c) was responsible for the financial performance of Keygate;
(d) had sole authority to approve all payments made by Keygate;
(e) was the signatory on Keygate’s bank accounts;
(f) reviewed and approved Keygate’s financial accounts, including the Accounts and the Management Accounts; and
(g) received and approved tax filings.
Transonic and Helloworld allege that at all material times Mr Adams knew, or ought to have known that the four representations were untrue. As the controlling mind of Asia Escapes, he caused Tilakee to make the representations and failed to disclose the true position. As a result, they allege that Mr Adams aided or abetted, or was directly or indirectly knowingly concerned in Tilakee’s contravention of s 18 of the ACL.
Transonic and Helloworld also claim that Shakespeare was involved in Tilakee’s contraventions of s 18 of the ACL. They claim that Mr Thompson’s involvement arises out of his role and conduct concerning Keygate’s financial accounts and dealings with Tilakee and Mr Adams before, during and after the making of the SSA. They also rely on Mr Thompson’s dealings with them over the same period.
Transonic and Helloworld also allege that Shakespeare engaged in conduct, which was misleading or deceptive, or likely to mislead or deceive contrary to s 18 of the ACL by providing them with a trial balance for Keygate as at 31 May 2018 under cover of an email dated 6 July 2018. The trial balance represented that Keygate’s liability as at 31 May 2018 for client funds was $2,087,718.46. They allege that by sending this 6 July 2018 email and trial balance, Shakespeare represented that:
(a) the client funds balance in the trial balance accurately reflected the records of Keygate provided to Shakespeare; and
(b) the client funds balance in the trial balance accurately reflected Keygate’s liability for client funds as at 31 May 2018.
(‘Shakespeare Client Funds Representation’).
They also allege that Shakespeare did not disclose to them that:
(a) the client funds balance did not accurately reflect the records of Keygate provided to Shakespeare;
(b) the client funds balance in the trial balance did not accurately reflect Keygate’s liability for client funds as at 31 May 2018; and
(c) Shakespeare could not say whether or not the client funds balance accurately reflected Keygate’s liability for client funds as at 31 May 2018
(‘Shakespeare Client Funds Non-Disclosure’).
Transonic and Helloworld allege that the Shakespeare Client Funds Representation and the Shakespeare Client Funds Non-Disclosure were conduct relied on by them to their detriment contrary to s 18 of the ACL.
Shakespeare’s defence
Shakespeare’s defence sets out its response to the claims against it and alleges:
(a) at all material times, its engagement to provide accountancy services to Keygate was limited to the preparation of annual financial statements for internal use by Keygate and income tax returns;
(b) at all material times, its services were provided on the basis that it would not perform any audit or review, nor be responsible for the accuracy and completeness, of information provided by Keygate;
(c) Transonic and Helloworld were aware that the Client Balances (unearned revenue) figures in the Accounts could not be verified; and
(d) Transonic and Helloworld acted in reliance on:
(1)the provision of Warranties in the SSA;
(2)the review of Due Diligence Materials;
(3)advice from PriceWaterhouseCoopers and/or MinterEllison; and
(4)the commercial benefits it stood to gain by incorporating Keygate’s business within Helloworld’s broader business.
In relation to the allegations made about its involvement in the Asia Escapes business, Shakespeare said:
(a) Mr Thompson was involved in some meetings between representatives of Keygate and representatives of Helloworld concerning the acquisition of Keygate;
(b) Mr Thompson was informed by Mr Adams of at least some of the due diligence requests made by representatives of Helloworld;
(c) Mr Thompson provided some information to Mr Adams for the purpose of its inclusion in the data room;
(d) it was not involved in the preparation of the vendor’s confirmation letter; and
(e) it was generally aware of the terms used in drafts of the SSA but was not a party to the SSA or involved in preparing or negotiating the terms of the SSA.
As to the financial statements and accounts, Shakespeare said, amongst other things, that:
(a) its involvement in preparing relevant financial accounts for Keygate did not involve any auditing of those accounts;
(b) it was not asked by Keygate to audit, verify or otherwise assess the Client Balances (unearned revenue) figures in the financial statements of Keygate;
(c) it had no practical liability to perform an audit of Client Balances or verify the Client Balances (unearned revenue) figure in Keygate’s financial statements;
(d) it did not have access to, and was not asked to access the Calypso system used by Keygate to calculate a Client Balances (unearned revenue) figure;
(e) it understood that it was not feasible to generate a Client Balances (unearned revenue) figure using the Calypso system;
(f) it was instructed by Keygate to assume the correctness of the Client Balances (unearned revenue) figure provided to Shakespeare when Shakespeare commenced providing financial services to Keygate in about 2011;
(g) for the financial statements that Shakespeare prepared each year it assumed the correctness of the Client Balances (unearned revenue) figure provided to it in about 2011, and it calculated shifts in the Client Balances figure from the financial information that it was provided by Keygate for each successive financial year;
(h) the basis on which it prepared financial statements each year was expressly stated in the statement and included that:
(1)Mr Adams, the director of Keygate, was solely responsible for the information contained in the financial statement, including the reliability, accuracy and completeness of the information;
(2)the financial statements were the product of a compilation engagement, not an assurance arrangement, and Shakespeare did not express an audit opinion or otherwise verify the reliability, accuracy or completeness of the information provided to it by management; and
(3)the financial statements were compiled exclusively for the benefit of Keygate’s director who was responsible for their reliability, accuracy and completeness;
(i) the same financial information that was available to Shakespeare was provided to Helloworld and its advisers, including PriceWaterhouseCoopers, prior to 31 May 2018. Helloworld was provided with access to the Calypso system used by Keygate but was unable to calculate the Client Balances (unearned revenue) figure;
(j) Helloworld did not become aware of any alleged shortfalls until the effects of the pandemic about two years after completion; and
(k) Helloworld was aware that the Client Balances (unearned revenue) figures could not be verified by reference to any ledger or otherwise.
In relation to the trial balance provided to Helloworld on 6 July 2018, Shakespeare:
(a) admits that it provided Helloworld and Mr Adams with the trial balance under cover of an email from Mr Thompson;
(b) says that:
(1)the trial balance was provided on behalf of Keygate and not by or on behalf of Shakespeare;
(2)Keygate was the source of the information in the trial balance and not Shakespeare, and that Shakespeare did not adopt its contents;
(3)Shakespeare prepared the trial balance on the basis of information provided by Keygate and Mr Adams;
(4)the trial balance was the product of a compilation engagement and not an assurance engagement and Shakespeare was not required to verify the reliability, accuracy or completeness of the information provided to it by Keygate;
(5)the trial balance was not the product of an audit or review and did not express an audit opinion or review conclusion;
(6)the trial balance was a MYOB/Excel document of Keygate, and not Shakespeare;
(7)the trial balance was an indicative trial balance; and
(8)Helloworld knew or ought reasonably to have known the above matters.
Shakespeare says that the Calypso trial balance provided by Mr Dolman of Keygate to Mr Thompson on 2 July 2018:
(a) was not a true trial balance;
(b) did not balance;
(c) was not a ‘trial balance’ or record of all of the assets and liabilities of Keygate; and
(d) stated a figure for the ‘Calypso Clearing Account’ balance of minus $10,670,746.55 that was wrong on its face and unreliable.
It also said that:
(a) there was no accurate report of client funds or the client liabilities ledger as at 31 May 2018 against which the ‘Calypso Clearing Account’ balance figure of minus $10,670,746.55 could be checked or verified;
(b) Mr Thompson did not use ‘Calypso Clearing Account’ balance figures from Keygate’s Calypso system;
(c) Mr Thompson did not have access to, and did not use, Keygate’s Calypso system; and
(d) The ‘Calypso Clearing Account’ balance figure of minus $10,670,746.55 was wrong and unreliable.
Shakespeare relied on additional matters concerning the sale process:
(a) on 21 March 2018, Mr Thompson informed Mr Fielding of Helloworld that one issue he expected may be material for Helloworld was that there was no ledger available to support the client funds figure in the financial statements;
(b) by reason of its due diligence activities in the period March to May 2018, Helloworld knew, or ought reasonably to have known, that there was no ledger available to support the client funds figure in the financial statements and that the Calypso client funds figures were not audited or reviewed and were not necessarily accurate;
(c) Shakespeare was not engaged by Helloworld in any capacity;
(d) the acquisition of shares the subject of the SSA was an arms-length commercial transaction undertaken by Helloworld. Helloworld was a sophisticated purchaser of travel businesses and had knowledge of the Calypso booking system;
(e) Shakespeare was not under any duty, obligation or requirement of any kind to disclose the alleged non-disclosures;
(f) Helloworld, and not Shakespeare, was responsible for the preparation of the Completion Accounts under the SSA; and
(g) Helloworld had every opportunity to access, investigate, verify and check any financial matter or detail of Keygate, including the Calypso booking system, for the purpose of the preparation of the Completion Accounts.
Shakespeare says that to the extent that Helloworld made the assumption or relied on the alleged representation or non-disclosure, the assumption or reliance was unreasonable in all of the circumstances and that Helloworld failed to prepare the Completion Accounts with reasonable care and/or in accordance with the SSA or in the manner contemplated by it.
Shakespeare’s contributory negligence and proportionate liability claim
Shakespeare submits that Helloworld’s claim for damages against Shakespeare is an apportionable claim within the meaning of Part VIA of the CC Act.
Shakespeare relies on the matters pleaded in its defence and additionally says that Shakespeare’s conduct in providing the trial balance to Helloworld was done for and/or on behalf of Tilakee and Mr Adams with their knowledge, consent and authority and to further their commercial interests, not that of Shakespeare. Shakespeare also initially claimed that Helloworld failed to obtain and act on the advice of its solicitors, MinterEllison, but this claim was abandoned during the trial.
Shakespeare claims that any loss or damage suffered by Transonic and Helloworld arose partly as a result of their failure to take reasonable care as:
(a) Transonic and Helloworld should reasonably have been aware of any knowledge proven on the part of Shakespeare from the review of material provided during due diligence and through access to Keygate’s records prior to 31 May 2018, and following completion through their investigation of the financial position of Keygate and preparation of the Completion Accounts under the SSA;
Any relevant loss has arisen as a result of a failure by Transonic and Helloworld to adequately protect themselves by the inclusion of adequate warranties in the SSA secured by adequate guarantees from persons with adequate assets
Transonic and Helloworld did ensure that cl 4.6 was inserted into the SSA to ensure that Client Accounts were fully funded. Their conduct reflects the importance of the client funds figures and their intention to rely on the client funds figures that they were given by Shakespeare. Clause 4.6 was an appropriate warranty to protect their interests. The warranty was guaranteed by Mr Adams, who had owned the Asia Escapes business since its inception. The SSA did contain an appropriate warranty and was supported by a guarantee from Mr Adams, as the founder of the Asia Escapes business.
Conclusion
For the reasons given, it is not appropriate in my view to make any deduction from the damages I will award for contributory negligence or for the alleged proportionate liability of other parties other than Shakespeare.
Other matters
The parties raised a range of other matters in their closing submissions which it is not necessary to decide or which can be dealt with briefly. For completeness, I will mention these matters.
Misleading conduct by silence
Transonic and Helloworld alternatively submitted that Tilakee and Mr Adams engaged in misleading and deceptive conduct by their silence as to the existence of a material shortfall in client funds that was not revealed in the Accounts or Management Accounts or otherwise disclosed by Tilakee leading up to 31 May 2018.
Transonic and Helloworld relied on the principles summarised by Gilmour and White JJ in Addenbrooke Pty Ltd v Duncan (No 2) in these terms:
(a)conduct involving silence or non‑disclosure may, in some circumstances, constitute misleading or deceptive conduct;
(b)in considering whether conduct is misleading or deceptive, silence or non‑disclosure is to be assessed as a circumstance like any other;
(c)mere silence without more is unlikely to constitute misleading or deceptive conduct. However, remaining silent will constitute misleading or deceptive conduct if the circumstances are such as to give rise to a reasonable expectation that, if some relevant fact does exist, it will be disclosed;
(d)the existence or otherwise of such a reasonable expectation is to be determined objectively;
(e)it is not possible to categorise all of the circumstances in which a reasonable expectation of disclosure may arise. Such circumstances may exist when either the law or equity imposes a duty of disclosure, when a statement conveying a half‑truth only is made …, when the representor has undertaken a duty to advise, when a representation with continuing effect, although correct at the time it was made, has subsequently become incorrect, and when the representor has made an implied representation;
(f)in considering whether a party engaged in commercial dealing may have a reasonable expectation that a fact, if it exists, will be disclosed, it is to be remembered that it will often be the case that one party to a commercial dealing has more knowledge about a relevant matter than the other and yet will not, in accordance with ordinary commercial expectations, be guilty of misleading or deceptive conduct in failing to make that knowledge known to the other.[34]
[34](2017), 348 ALR 1, [482] (citations omitted).
I have held that Tilakee and Mr Adams actively engaged in misleading and deceptive conduct or conduct likely to mislead or deceive for the reasons that I have given. They affirmatively represented client fund figures to Transonic and Helloworld which were incapable of substantiation and which they knew were wrong. The amount of client funds held by Asia Escapes could not be determined because of flaws in the Calypso system. There was no client ledger from which the amount of client funds, and the extent of the client funds liability could be calculated. In truth, the client funds balance and liability at the relevant dates were not known to Keygate and Shakespeare.
Failure of Shakespeare to call Mr Adams
Transonic and Helloworld submitted that the failure of Shakespeare to call Mr Adams attracted the operation of the rule in Jones v Dunkel.[35]
[35](1959) 101 CLR 298, 308, 312, 321-322.
In Kuhl v Zurich Financial Services Australia Ltd, a plurality of the High Court described the rule in these terms:
The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party's case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn...[36]
The rule in Jones v Dunkel permits an inference, not that evidence not called by a party would have been adverse to the party, but that it would not have assisted the party.
[36](2011) 243 CLR 361, 384-385, [63]-[64] (Heydon, Crennan and Bell JJ) (citations omitted).
Transonic and Helloworld submitted that the rule in Jones v Dunkel should apply to the failure of Shakespeare to call Mr Adams, and that I should conclude that his evidence would not have assisted Shakespeare’s case.
Shakespeare submitted that Mr Adams was a separate party to the proceeding, and was not ‘in the camp’ of Shakespeare. The interests of Shakespeare and Mr Adams were not aligned. Shakespeare contended that any liability on its part should be proportionately reduced by reason of the conduct of Mr Adams and Tilakee.
Tilakee and Mr Adams are separate parties to the proceeding and have their own legal representation. While Mr Adams decided not to attend the trial, he actively participated in the defence of the claims by Transonic and Helloworld prior to the trial, and through his solicitors filed a witness statement on his own behalf. He sought to protect his own commercial interests.
In its second further amended defence filed 15 June 2023, Shakespeare alleged that Mr Adams had a proportionate liability for any loss or damage suffered by Transonic and Helloworld and that Shakespeare’s conduct was undertaken with the knowledge, conduct and authority of Tilakee and Mr Adams.
While the interests of Shakespeare, Tilakee and Mr Adams are aligned in many respects, they are also opposed in some respects. The litigation has been conducted on the basis that they are in different camps each defending its own interests. In my view, it is not appropriate to draw any Jones v Dunkel inference adverse to Shakespeare by reason of its failure to call Mr Adams as a witness in the proceeding.
Evidential rulings sought by Shakespeare
In a notice of objection to documents filed 26 May 2023, Shakespeare objected to the admissibility of the Elliott spreadsheet, and sought a ruling under s 136 of the Evidence Act that documents with Calypso-sourced information be admitted on the limited basis that they are not proof of the truth of the asserted facts contained therein on the basis that there is a danger that the particular use of the evidence might be unfairly prejudicial to a party; or misleading or confusing.
I have upheld Shakespeare’s objection to the Elliott spreadsheet and held that it is inadmissible in evidence. While Mr Stone’s evidence is of great value and assistance, I have not been assisted by his evidence in re-examination when he was asked to assume the correctness of the Elliott spreadsheet and certain information derived from the Calypso system as to client funds and supplier prepayments. I have not given this evidence any weight.
As to Calypso-based information, I accept Shakespeare’s submission that there are serious integrity and reliability issues affecting the trial balance reporting function, Account 20000, unreconciled clearing accounts and client trust fund balances generally.
I have not made any findings of fact dependent on the truth of the information derived from Calypso as to any of these matters, as I do not accept their reliability or accuracy. I have discussed these matters extensively above.
As a result, it is not necessary to make any ruling under s 136 of the Evidence Act as requested by Shakespeare.
Persons not called by Transonic and Helloworld
Shakespeare submitted that Transonic and Helloworld did not call, and should have called the following witnesses:
(a) Michelle Davies;
(b) Gino Borsato;
(c) Paul Tiralosi; and
(d) Board members of Helloworld.
I reject this submission. Transonic and Helloworld called evidence from six executives or staff members including its Chief Executive Officer who is also a member of its Board. Their evidence was comprehensive and truthful. While Ms Davies was Helloworld’s Group General Counsel during the proposed acquisition and was involved in the conduct of the legal due diligence by Helloworld, her evidence would not have added materially to the large number of documents and the considerable volume of evidence before the Court as to the acquisition including as to the legal due diligence.
Likewise, while Mr Borsato was familiar with the Calypso system and had a limited role in the acquisition, his role was minor and his evidence would not have assisted materially. Mr Dolman, Mr Elliott and Mr Coote gave extensive evidence about the Calypso system and were well-placed to do so. Mr Mag covered similar ground and gave evidence and was cross-examined about the mapping project and about his work and input during the acquisition. It is unlikely that Mr Borsato’s evidence would have assisted.
Mr Tiralosi was involved in a mapping project conducted by Helloworld after completion on 31 May 2018, and signed off on the completion accounting entries at around that time. Again these matters are dealt with by Mr Mag and in the extensive documentation in evidence.
In addition to being the Chief Executive Officer of Helloworld, Mr Burnes is also the Managing Director of Helloworld. He attended the Board meeting of 24 April 2018 when the acquisition was approved. The Board minutes and papers were produced and in evidence. He had correspondence and conversations with Mr Adams on a number of occasions.
Shakespeare’s criticisms of Transonic and Helloworld’s witness array did not extend to a Jones v Dunkel submission. It is unnecessary to say more about them.
Conclusion
Judgment will be entered in favour of Transonic and Helloworld in accordance with these reasons and for interest under the Supreme Court Act 1986 (Vic).
I will hear the parties as to the final orders to be made as to costs.
SCHEDULE OF PARTIES
| TRANSONIC TRAVEL PTY LTD (ACN 103 179 326) | First Plaintiff |
| HELLOWORLD TRAVEL LIMITED (ACN 091 214 998) | Second Plaintiff |
| - and - | |
| TILAKEE NOMINEES PTY LTD (ACN 125 723 748) AS TRUSTEE FOR THE MSA TRUST | First Defendant |
| MASON STUART ADAMS | Second Defendant |
| SHAKESPEARE PARTNERS PTY LTD (ACN 603 498 862) | Third Defendant |
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