Addenbrooke Pty Limited v Duncan

SOME PROBLEMS FOR ADDENBROOKE 8 At this stage I should identify four matters which seriously undermine Addenbrooke's case.

The Addenbrooke decision-maker 9 The primary Judge found that the relevant decision-maker in connection with the acquisition of the Cascade shares by Addenbrooke was Denis James O'Neil ("Denis O'Neil"), the managing director of, and sole shareholder in Addenbrooke. This is a critical finding. The other director was Ned Arthur O'Neil ("Ned O'Neil"), Denis O'Neil's son. A third Addenbrooke office-holder was Gregory Alexander Smith ("Smith"), the company secretary and financial controller. Addenbrooke sought to establish that the investment decision was made jointly by Denis O'Neil, Ned O'Neil and Smith. Each gave evidence to that effect. His Honour found that Denis O'Neil, alone, made the decision. Denis O'Neil's evidence concerning causation was limited, unsatisfactory and, in the event, rejected by the primary Judge.

Addenbrooke's prior investment in WEC and interest in investing in Cascade 10 The evidence indicates that from a time prior to any of the allegedly misleading or deceptive conduct, Denis O'Neil was very keen to acquire WEC shares and had become very enthusiastic about investing in Cascade. Indeed, he knew that Southern Cross, a company specializing in the provision of financial services, was to be involved in the capital raising, before that company, itself, knew of that fact. Denis O'Neil had learnt of the proposed capital raising from Gregory Jones ("Jones"), a shareholder in Cascade. The evidence demonstrates that Denis O'Neil was very keen to ensure that he or Addenbrooke be a substantial participant in Cascade's capital raising. However he seems to have known very little about the company or its business, other than that it was concerned with coal. This evidence was seriously damaging to Addenbrooke's case against Duncan.

A matter of speculation 11 This appeal depends very much upon Addenbrooke's assertion that it would not have entered into the Agreement had it known that Cascade, its directors and Duncan were concerned that should the Obeid family's involvement become publicly known, it would jeopardize the proposed deal with WEC and Cascade's other interests including its holding of EL7406. 12 Addenbrooke faces two serious problems in this regard. First, Denis O'Neil did not assert that had he known of this matter, he would not have allowed Addenbrooke to enter into the Agreement. Secondly, the primary Judge found that although there was a "significant degree of sensitivity" amongst the Cascade stakeholders about the involvement of the Obeid family, the reason for such sensitivity was "truly a matter of speculation". Addenbrooke's case depended upon a finding that the relevant cause of concern was that the Obeid family's involvement was prejudicial in the ways previously mentioned. It seems clear that his Honour was not prepared to draw that inference. However, as I have said, his Honour was satisfied that those controlling Cascade preferred to offer it to WEC as a "clean" entity.

No corrupt conduct in the acquisition by Cascade of EL7406 13 In the end, Addenbrooke did not assert that any person had engaged in corrupt conduct in connection with the grant to Cascade of EL7406. See ts 526, ll 29-39 and ts 783, ll 39-41. If there was no proof of such conduct on the part of the Obeid family, it is difficult to see any basis for alleging that Cascade, its directors and Duncan had any serious concern about the family's involvement in the Mt Penny project. The newspaper articles suggest that some people had suspicions, but the articles seem not to have evoked an immediate public or governmental response. Addenbrooke may well have hoped that the Court would infer suspicion of corruption, based on Eddie Obeid's political involvement.

The Obeid family 14 The Obeid family's involvement in the Mt Penny project is a major feature of this case. Such involvement was closely associated with the circumstances in which Cascade acquired its interest in EL7406. The primary Judge found that Eddie Obeid was the "patriarch" of the Obeid family. He was widely considered to be very influential in the affairs of the New South Wales Branch of the Australia Labor Party, which party was in government in New South Wales until 2011. He was, at one stage, a minister in that government, with responsibility for mineral resources. 15 In about September 2008, the government invited expressions of interest in connection with the exploration for, and exploitation of coal resources in the Mt Penny area. At about that time, the Obeid family acquired interests in the three parcels. One company which responded to the invitation was Monaro Mining NL ("Monaro"). Cascade also responded. I infer that such expressions of interest were to include information concerning the way in which the relevant interested person would explore for, and exploit such coal resources. I also infer that each expression of interest was to say something about the likely financial benefit which would, according to the relevant interested person, flow to the government. In due course, Monaro was advised that its expression of interest was preferred by the government over other expressions of interest, including that provided by Cascade. However no exploration licence was ever granted to Monaro. The contemplated licence was granted to Cascade. 16 The Obeid family came to have an "interest" in whatever "rights" were derived by Monaro as a result of the government's preference for its expression of interest. On 22 May 2009 the Monaro Board decided not to proceed with the Mt Penny project. The Board invited Voope Pty Ltd ("Voope") to prepare an agreement, transferring to Voope, any licence which might have been granted to Monaro, subject to Voope's indemnifying Monaro in respect of its expenses so far incurred. Voope was a company associated with the Obeid family. Monaro had previously granted Voope an option to acquire 80% of the shares in Monaro Coal Pty Ltd ("Monaro Coal"), a subsidiary of Monaro. It had been intended that Monaro Coal would hold the relevant exploration licence. 17 An appropriate agreement was reached between Monaro and Voope by which the latter was to acquire any licence issued to Monaro Coal. Mainly contemporaneous dealings between Cascade and Buffalo led to the formation of the Mt Penny joint venture. Cascade held a 75% interest and Buffalo, a 25% interest. Cascade agreed to hold EL7406 for the Mt Penny joint venture. Cascade also entered into contractual arrangements for acquisition of the three parcels. 18 I should say that in the proceedings below and on appeal, it has generally been accepted that various interests were, at different times, held by or on behalf of the Obeid family, through companies, trusts or otherwise, without necessarily identifying the particular basis for stating that the Obeid family held any such interest. I doubt whether it would be reasonably practicable to take any other approach. 19 At some time prior to the Cascade capital raising, Cascade and its directors decided to buy out the Obeid family's interest in the Mt Penny project, including EL7406. I infer that Cascade also intended to complete its acquisition of the three parcels. Details of these transactions appear later in these reasons. Addenbrooke's case is that Cascade's capital raising was substantially for the purpose of buying out the Obeid family.

THE REPRESENTATIONAL DOCUMENT 20 Addenbrooke was invited to participate in the Cascade capital raising by a document described in the second amended statement of claim (the "statement of claim") as the "representational document". It has also been referred to, from time to time, as the "deal sheet". According to para 20 of the statement of claim, the representational document contained representations which included: that Cascade had mandated Southern Cross and another company, Arthur Phillip Pty Ltd ("Arthur Phillip"), to undertake a capital raising for Cascade; that Cascade was placing up to 601,307 new fully paid ordinary shares, at $46.57 per share, to raise a total of $28 million; and that the proceeds of the capital raising would be applied to reduce third party debt and creditors. 21 The representational document also provided an indicative timetable and identified numerous persons (including Duncan) as "key personnel". Inquiries were to be directed to Richard Jonathon Poole ("Poole") who was a director of Arthur Phillip. Concerning the representational document, at paras 29-32 of the statement of claim, Addenbrooke pleads that: prior to its entering into the Agreement on 25 November 2010, Cascade, Southern Cross, Arthur Phillip, Gray and Poole represented that the shares were to be issued at $46.57 per share and that the proceeds of the capital raising would be applied to "reduce third party debt and creditors"; the representations were false in that the shares were issued at $0.00001 per share; and the proceeds were not applied in reducing third party debt and creditors, but were paid as the price for acquiring a "Purported 25% Option Interest" held indirectly by the Obeid family. 22 Addenbrooke does not allege that Duncan made these representations. However it alleges that he was a party to Cascade's making them. I shall deal separately with that "accessorial" claim. Arthur Phillip and Poole were, but are no longer parties to these proceedings. Addenbrooke subsequently pleads that it relied on those representations, and that they were misleading or deceptive. To at least some extent Addenbrooke relies upon there having been no reasonable grounds for making those statements as they related to future matters.

AN ALLEGED MEETING PRIOR TO 19 NOVEMBER 2010 23 At paras 33-38, Addenbrooke pleads representations allegedly made by Gray on behalf of Southern Cross at a meeting (the "unproven meeting") attended by Gray, Denis O'Neil, Ned O'Neil, Neville Crichton and Jones. Originally, Addenbrooke alleged that it occurred on 20 November 2010. Subsequently, Addenbrooke alleged that it occurred on 13 November 2010, or some other date. The primary Judge effectively found that no such meeting occurred. That aspect of the case was not pursued on appeal. However his Honour's reasons for rejecting Ned O'Neil's evidence concerning such meeting clearly affected his assessment of that witness's creditability.

DUNCAN'S REPRESENTATION 24 At paras 39-42 of the statement of claim, Addenbrooke pleads that at a meeting held on 19 November 2010 (the "19 November meeting"), Duncan, on his own behalf, and on behalf of Cascade, represented that: the purpose of Cascade's capital raising was to continue developing Cascade's assets (primarily EL7406) by: (i) investing in investigative drilling; (ii) paying land option costs; (iii) paying for plant and equipment; and (iv) paying costs associated with submitting a mining licence application; the capital raising was for the purpose of funding such outgoings; the timing of the capital raising was due to the high cost of running the business, particularly the significant cost of applying for a mining lease in respect of EL7406; and the capital raising was being conducted because some of Cascade's shareholders, as at November 2010, were not able to make the required equity contributions and, "did not want their stakes in Cascade diluted as between themselves". 25 As I understand the evidence, at the time when those representations were allegedly made, Addenbrooke already knew that another company was to acquire either Cascade or EL7406. At the latest, immediately after the 19 November meeting, Addenbrooke knew that the potential acquirer was WEC. One might have thought that such knowledge would have led Addenbrooke to doubt whether there was, at that time, any intention that Cascade be involved in future development of the Mt Penny tenement. It would be surprising if the three Addenbrooke witnesses had not identified this oddity. Hence it would have been difficult for them to accept that Addenbrooke expected that the funds to be raised would be so applied. Further, the statement that the funds from the capital raising were to be spent on future exploration was inconsistent with the intention, expressed in the representational document, that the funds were to be used to "reduce third party debt and creditors". Addenbrooke does not plead that it relied upon any representation made concerning the value of the shares to be acquired, the value of Cascade itself, or the value of EL7406. Nor was there any pleaded representation as to the quality or security of Cascade's title to EL7406 or reliance thereon. Finally, notwithstanding the evidence that Addenbrooke was aware of the proposed acquisition by WEC, Addenbrooke does not plead that it entered into the Agreement in reliance upon any representation concerning such acquisition. In effect, and without pleading as much, Addenbrooke seems to be relying upon an implied representation that the WEC deal would proceed, and that there were virtually no circumstances in which Cascade's title to EL7406 could be impugned. 26 Addenbrooke pleads that Duncan's representations were false in that: the purpose of the capital raising was not to raise money to be used in developing Cascade's mining assets, but to raise money for the purpose of facilitating the buy out of the Obeid family's interest; the timing of the capital raising was not due to the high cost of running the business; nor was it the result of the significant cost of applying for a mining lease; but was the result of Cascade's desire to raise money for the purpose of paying out the Obeid family; and the capital raising was not being conducted because some Cascade shareholders were not in a position to add to their investments in Cascade, and did not want their shareholdings "diluted", but for the purpose of raising money to buy out the Obeid family. 27 At para 43 Addenbrooke pleads that the representations made in para 39 (excluding para 39(d)) were as to future matters, and that they were misleading or deceptive. 28 The primary Judge found that Duncan had said that the moneys raised in the capital raising were to be applied in paying outgoings incurred in connection with the prior and future employment of consultants. This was one of the representations pleaded against Cascade, Gray and Southern Cross, but not Duncan. Although this departure from the pleadings was disclosed in Addenbrooke's opening, it did not seek to amend the statement of claim to reflect such evidence. His Honour concluded that Addenbrooke's evidence as to the pleaded misrepresentations against Duncan was exaggerated. I infer that his Honour declined to act upon such evidence. In any event, as I shall demonstrate, the evidence accepted by his Honour did not demonstrate reliance on those matters. Addenbrooke's case was that the capital raising was, at least in part, carried out for the purpose of raising funds to buy out the Obeid family, which purpose was not disclosed to Addenbrooke. Addenbrooke then pleads, at paras 46-50, that in entering into the Agreement, it relied upon the representations made by Cascade, Gray, Southern Cross and Duncan, that the representations were misleading or deceptive, and that had it known of the "matters pleaded in paras 32 and 42 it would not have entered into the Agreement". Given his Honour's finding, the only representation made by Duncan was as to the purpose for which the funds to be raised would be applied. Had any other pleaded representation been proven, it would have had no relevance, given his Honour's views concerning the evidence of the Addenbrooke witnesses as to causation.

THE NON-DISCLOSURE CASE AGAINST DUNCAN 29 Before discussing the pleaded non-disclosure case, I should say that the major thrust of Addenbrooke's case on appeal, as it concerns the misleading or deceptive conduct case is that the primary Judge failed to address the whole of its case. In particular, it submits that his Honour failed to address its case that: Cascade, its directors and Duncan engaged in misleading or deceptive conduct in not informing Addenbrooke that: they had unspecified doubts as to whether the WEC transaction would proceed, should it become public knowledge (or perhaps known to WEC), that the Obeid family had, at some time been involved in the Mt Penny project, even if any such interest had been terminated; and that such matters might also have otherwise adversely affected Cascade's business interests, including its title to EL7406. 30 This case is pleaded only against Cascade and Duncan and is at paras 51-135 of the statement of claim. 31 At paras 51-89 Addenbrooke sets out: the circumstances in which the Obeid family came to control the three parcels; the events which led to the identification by the government of Monaro's expression of interest as the preferred proposal; the subsequent dealings between Monaro and the Obeid family; and the circumstances leading to the joint venture between Cascade and Buffalo. 32 At paras 90-91, Addenbrooke pleads that: by 6 June 2009, Cascade, its directors and Duncan knew, or had reason to suspect that the Obeid family had a substantial interest in Buffalo's interest in the Mt Penny joint venture; and by April/May 2010, Cascade and its directors had strong suspicions that the Obeid family had such an interest and did not wish to continue in association with them. 33 At paras 92 and 93, Addenbrooke pleads that: four directors of Cascade (including Duncan) were "in or about June 2009" also directors of WEC; from June 2009 WEC and those common directors hoped that WEC would acquire Cascade or Cascade's interest in EL7406; and the directors in question expected to benefit substantially from such acquisition. 34 In order to understand the pleading as it relates to the Cascade directors and to Duncan, one must keep in mind that Duncan ceased to be a director of Cascade on 31 July 2009. Paragraphs 92 and 93 may, together, create the false impression that Duncan was a director of Cascade for some indefinite period after "about June 2009". 35 In para 93A, Addenbrooke pleads that in July and August 2010, Duncan, Poole and others met with the Obeid family to discuss "strategies to secure the exit" of "Southeast" (Southeast Investment Group Pty Ltd, a company associated with the Obeid family), from its interest in EL7406. Southeast's relevance is explained in paras 98-101 to which I refer below. It was, in effect, another Obeid family company. At para 94 Addenbrooke pleads that from August 2009, the Obeid family's involvement was, "a matter of political and commercial concern and embarrassment to Cascade and its directors", and that it had the potential to interfere with the possible sale of Cascade to WEC. At paras 94A and 94B, Addenbrooke pleads that: in or about August 2009, Cascade shareholders received a "shareholder update" concerning the joint venture agreement with Buffalo; each director of Cascade and Duncan read and considered it; and on or prior to 31 August 2009, each Cascade shareholder deposited $300,000 to meet the payments required in connection with the grant of an exploration licence and the other expenses as requested in the update. 36 Although the document does not suggest as much, Addenbrooke submits that it was part of the mechanism by which the Obeid family's interest was to be terminated. That proposition may well be true. However it does not follow that such purpose was the product of an identified concern that the involvement of the Obeid family in the Mt Penny project posed a threat to the WEC deal or otherwise to Cascade's interests, including its continued ownership of EL7406. The evidence indicates the other purpose to which I have referred, namely simplifying the deal being offered to WEC. His Honour accepted that purpose as being at least a reason for the desire to remove the Obeid family from such involvement. 37 At para 95, Addenbrooke pleads that from at least 28 October 2009 or, alternatively May 2010, Cascade and its directors were concerned that: the New South Wales Labor government would lose the election to be held in 2011; should the Labor government lose the election, a Coalition government might call an inquiry into the grant of EL7406 and the involvement of the Obeid family; and such an inquiry might reveal the interests of the Obeid family in the Mt Penny project, which revelation could be prejudicial to Cascade, its ownership of EL7406 and the possibility of any sale of Cascade or such tenement to WEC. 38 At para 96, Addenbrooke pleads that on 24 November 2009 Mt Penny Properties Pty Ltd ("Mt Penny Properties"), a fully owned subsidiary of Cascade, entered into a put and call option for the acquisition of the three parcels. Paragraph 97 sets out the common shareholdings and directorships of WEC and Cascade. Concerning Southeast, at paras 98-101 Addenbrooke pleads that: Buffalo told Cascade that it had acquired its interest in the Mt Penny joint venture as a bare trustee; Buffalo sought to be replaced as trustee; Buffalo said that Southeast was to become the trustee; and Cascade "confirmed" these matters. 39 At para 102, Addenbrooke pleads that on 23 August 2010 a draft discussion paper was prepared and circulated. It dealt with the restructuring of the Mt Penny project, and contained the following "items": (a) At the request of Cascade, the objective was to elevate the unincorporated JV into a corporate vehicle, or to consider potential options to restructure ownership of the Project; (b) One option was a full sell down by Southeast … of its 25% interest in the Project for an amount of $100 million; (c) Another option was a part sell down by Southeast … of its interest in the unincorporated JV involving the formation of a new SPV incorporated to hold the Mt Penny tenement only, pursuant to which Southeast … would sell 15% of its interest in the Project for $60 million and would retain a 10% holding in the new SPV; (d) The aim was to eliminate the unincorporated Joint Venture so that: i. Cascade controlled 100% of the Project with known parameters; and ii. Cascade could be presented in this manner to any investor or acquirer, without the complication of disclosing any JV agreement. (e) The Discussion Paper of 23 August 2010 recommended the establishment of an intermediary vehicle known as "Arthur Phillip Intermediary Services Pty Ltd" between Cascade and the JV partners, to assist in the negotiations, which would result in the vehicle always being controlled by a known party, regardless of what occurred in Cascade, and would allow Cascade to record in its Financial Accounts and agree to pay a fixed maximum price in a fixed term (or unless otherwise agreed) to the intermediary, which could then agree to pay the relevant amount to the Joint Venture partner and the balance to be paid to the existing shareholders, as required. ... (f) The end position was described as: i. the dissolution of the unincorporated Joint Venture; ii. no new shareholders appearing on the Register; iii. Cascade owning 100% of Mt Penny; iv. Cascade owing Arthur Phillip Intermediary Services Pty Ltd an amount of $50 million with the corresponding entry to be acquisition and development costs at Mt Penny; v. Arthur Phillip Intermediary Services Pty Ltd to pay the Joint Venture partner eventually with the balance to the shareholders. 40 Once again, Addenbrooke's case is that the proposed steps were to be part of the mechanism for terminating the Obeid family's interest. Again, the proposal is consistent with the purpose of simplifying the proposed deal with WEC. It may assist if I interpolate, at this stage, that the "intermediary vehicle" eventually used was Coal and Minerals Group Pty Ltd ("CMG"), or as much is alleged by Addenbrooke. 41 It is worth noting that paras 80-102 of the statement of claim cover the period of time between 5 June 2009 and 23 August 2010. In effect that is the period between the making of the joint venture agreement between Cascade and Buffalo and the issue by Cascade of the discussion paper addressing the proposed restructuring of the Mt Penny project. It is necessarily Addenbrooke's case that in that period of about 15 months, Cascade decided that the Obeid family's continued involvement in the joint venture was inimical to Cascade's interests. One might reasonably have expected the identification of some reason for that decision. Addenbrooke's primary case was that from as early as 6 June 2009 Cascade, its directors and Duncan knew or had reason to suspect, that the Obeid family had a substantial interest in Buffalo. Alternatively, Addenbrooke pleads at para 91 that by "at least April/May 2010" Cascade and its directors had "strong suspicions" that the Obeid family was entitled to a substantial part of the 25% interest in Mt Penny Coal Pty Ltd ("Mt Penny Coal") (effectively, the property of the joint venture) and did not wish to be in partnership with them. Addenbrooke's case does not seem to depend upon an assertion that Cascade was aware of the involvement of the Obeid family at the time at which the joint venture with Buffalo was established, although that may have been the case. The more significant question, one might have thought, was as to the time at which Cascade, its directors and Duncan formed the view that the continued involvement of the Obeid family was inimical to Cascade's interests. Further, it seems that the question of the Obeid family's involvement had been canvassed in the media as early as August, 2009. 42 At para 92 it is alleged that from about June 2009, WEC and the common directors of WEC and Cascade wanted WEC to acquire Cascade or EL7406. At para 94, Addenbrooke pleads that from at least August 2009, or alternatively May 2010, the fact of the Obeid family's involvement in the joint venture was a matter of political and commercial concern and embarrassment to Cascade and its directors. Addenbrooke pleads that such concern and embarrassment was brought about by press speculation, and a concern that such speculation might interfere with the proposed sale to WEC. 43 At paras 103, 103A and 104 Addenbrooke pleads that: at a meeting of members held on 13 October 2010 the Cascade shareholders consented to the splitting of the 70 existing Cascade shares into 7 million shares, facilitating Cascade's ability to issue 9.3% of its share capital; certain documents had been circulated for consideration at that meeting, including a "Rights Termination Agreement" which related to the exit of the Obeid family from the Mt Penny project; and Cascade issued 717,748 shares to CMG, of which company Poole was the sole director and shareholder, for a total price of $7.17. 44 It is Addenbrooke's case, that: the share split and issue were intended to form part of the mechanism by which the Obeid family was to be removed from participation in the Mt Penny joint venture; the shares were to be held by CMG for the Obeid family; and the shares were to be acquired by WEC from CMG as part of the former's acquisition of Cascade. 45 I should say that as I understand it, the sale of the shares to CMG at nominal value reflected the fact that the issue of the shares was in consideration of the relinquishment by the Obeid family of its interest. 46 At paras 105-109 Addenbrooke pleads that: on 20 October 2010 CMG entered into a deed with Southeast, pursuant to which Southeast agreed to sell its option to acquire shares in Mt Penny Coal to CMG for a purchase price of $60 million; at that time CMG did not have $60 million, nor was Southeast entitled to the whole of the Obeid family interest, part having already been transferred to CMG; CMG became the intermediary party referred to in the discussion paper of 23 August 2010; and the transfer deed provided that CMG give security for the payment of the purchase price as required by the deed. 47 This deed has previously been, and hereafter will be referred to as the "Rights Termination Agreement". 48 The security arrangements were very complex. The Obeid family's interest in EL7406 was effectively an option to acquire 25% of the shares in Mt Penny Coal, a subsidiary of Cascade. The parties agreed that such option be terminated, the consideration for which being the payment of $62 million, of which $32 million was the "termination price". The balance of $30 million was to be "paid" by the issue to CMG, effectively on behalf of the Obeid family, of 9.3% of Cascade's share capital. The relevant "security" appears to have been, in part, a charge over the shares in favour of Southeast. However there was to be further security to which matter I shall presently return. 49 At para 110 of the statement of claim Addenbrooke asserts that: Cascade was not a party to the Transfer Deed and, insofar as it purports to require Cascade to do certain things to enable CMG to meet its obligations under the Transfer Deed, there was no consideration provided by Cascade for the promises contained in the Transfer Deed. 50 This paragraph is difficult to understand. It seems to suggest that Cascade's undertakings were not supported by any consideration provided by Cascade. It seems likely that the transfer deed took effect as a deed so that no consideration was necessary. In any event, even if Cascade was not bound by the transfer deed, it was bound by the Rights Termination Agreement. 51 In paras 111-113, Addenbrooke pleads that: the shares in Cascade referred to in the transfer deed were the shares issued to CMG; those shares were issued to CMG to enable it to pay part of the moneys owed to Southeast, as the Obeid family trustee; and on 20 October 2010 CMG charged the shares in favour of Southeast. 52 At para 114 Addenbrooke pleads that: Poole, as the sole director of CMG, undertook not to resign as sole director or appoint any other director until CMG had discharged it obligations under the transfer deed and the charge; Poole's wife Amanda Poole ("Mrs Poole"), who held shares in Cascade, agreed to charge them with the payment to Southeast of the amount of $22.5 million, in order to secure Poole's compliance with his undertaking; and a share mortgage was accordingly granted. 53 Paragraphs 115 and 116 deal with the Rights Termination Agreement to which I have previously referred. 54 At para 117 Addenbrooke pleads that as at 20 October 2010 Cascade did not have $32 million to pay to CMG, or as CMG directed. At para 117A Addenbrooke pleads that in an email dated 28 October 2010 to Duncan and others, Poole indicated that the funds raised in the proposed capital raising were to be paid to CMG, and that CMG was a shareholder in Cascade prior to the capital raising being put into effect. 55 At para 118 Addenbrooke pleads that the purported effect of the agreements pleaded in paras 105-116 was that: (a) CMG purchased Southeast's right to acquire 25% of the shares in Mt Penny Coal for an amount of $60 million; (b) Cascade acquired from CMG the same right for a total consideration of $62 million, made up of the termination price ($32 million) and the issue of the Cascade shares; and (c) Mrs Poole and CMG charged their respective shares in Cascade with the payment of the amount due to Southeast. 56 At paras 119 and 120, Addenbrooke pleads that the purpose of the Cascade capital raising was to enable Cascade to obtain funds to pay $25 million of the termination price of $32 million payable under the Rights Termination Agreement, the balance apparently being raised by way of loans to Cascade from its shareholders. Duncan and others also agreed to underwrite the placement of Cascade's shares in the proposed capital raising. 57 At para 121 Addenbrooke pleads that as at 20 October 2010, Cascade and its directors (but apparently not Duncan) considered that once WEC made an offer for CMG's Cascade shares, they would have a value of at least $30 million and could be sold to WEC in the takeover. 58 At para 122 Addenbrooke pleads that at all times prior to the capital raising, Cascade and its directors (but apparently not Duncan) considered that: it would not be possible to account for the amount to be raised by the capital raising in the accounts of Cascade; such accounting could give rise to queries by the regulating authorities, including ASIC, and the board of WEC (other than the common directors of WEC and Cascade), or an inquiry into Cascade by an incoming Coalition government in New South Wales; and such queries could raise "regulatory and due diligence concerns" as to the circumstances of the disposition of the proceeds of the capital raising. 59 At para 123 Addenbrooke pleads that because of the matters set out in para 122 Cascade, its directors and Duncan had determined that: once the proceeds of the capital raising had been received into the trust account of its brokers (Southern Cross), they would direct that at least $ 25 million be paid to the account of CMG; the capital raising would be recorded as having taken place at $0.00001 for each share issued; and the books and records of Cascade were to be prepared accordingly so as to enable the takeover by WEC to proceed. 60 At para 124 Addenbrooke pleads that Poole, on behalf of Cascade, gave the direction to pay $25 million to CMG. 61 At paras 125-126A Addenbrooke pleads that: Cascade's purpose and that of its directors (but apparently not Duncan) in so structuring the transactions between Mt Penny Coal, Cascade, CMG and Southeast was to procure the exit of Southeast (and thereby the Obeid family) from the development of EL7406 "for the purpose or purposes set out in [paragraphs] 119-126"; such purpose was motivated by a concern that should it become public knowledge that the Obeid family held an interest, or was capable of holding an interest in EL7406, it could give rise to both political and commercial concerns that there had been impropriety in relation to the tender process, having regard to Mr Obeid's membership of, and involvement in the Labor Party, his prominence as a Member of Parliament in the New South Wales Labor government, and his relationship with Mr Ian MacDonald, then the Minister for Mines in the New South Wales Labor government, all of which could be prejudicial to Cascade, its holding of EL7406 and the possibility of selling Cascade or EL7406 to WEC; and because of such concerns held by Cascade, its directors and Duncan from, at the latest, July 2010 and until the execution by Addenbrooke of the Agreement, Cascade and its directors were aware that any representations made by Cascade in relation to the proposed capital raising could not disclose its true purpose. 62 I point out that it is not pleaded that there was anything unlawful or immoral about these transactions, or about the way in which they were recorded. 63 As will be seen, the plea that the concealment of the purpose of the capital raising was necessary only until Addenbrooke entered into the Agreement is at least potentially inconsistent with other allegations by Addenbrooke that Cascade, its directors and Duncan believed that the disclosure at any time of any past involvement of the Obeid family in the project would pose a threat to the proposed WEC deal and/or to Cascade's business interests, including its ownership of EL7406. One might have thought that concealment of the purpose of the fund-raising (including the involvement of the Obeid family) would have to continue at least until WEC became legally bound to the proposed transaction. One might have thought that if the alleged concern about the Obeid family's involvement had any real basis, there would have been a continuing risk of litigation should WEC have learnt of that fact. At least some of the persons who were directors of both WEC and Cascade had shareholdings in WEC, as did Duncan. One might have thought that there would have been concern about any damage which WEC might suffer at some later stage, in the event of disclosure of the Obeid family's involvement. After all, the Cascade shareholders were, at least in part, exchanging their Cascade shares for WEC shares. 64 At paras 127-129A, Addenbrooke pleads that: each of the "facts and purposes" pleaded in paras 51-126A of the statement of claim was material to the investment to be made by Addenbrooke in the shares in Cascade and, "falsified the express representations pleaded in paras 29(b), 33(b), 33(c) and 39"; each of the said facts and purposes was, "relevant to the issue of whether CMG was a creditor at any relevant time"; all of the facts and purposes pleaded in paras 80-86, 90-93, 94-98 and 102-126A were known to Duncan, Cascade and others prior to 17 November 2010; and each of the purposes pleaded in paras 119, 125-126A was known to Duncan, Cascade and others at a time prior to 17 November 2010. 65 It may assist if I point out that although the pleading of the non-disclosure case is at paras 51-135 of the statement of claim, the paragraphs after para 126A are concerned with the alleged consequences of the facts pleaded in the earlier paragraphs. Thus, in the statement of claim and in these reasons, where the range of relevant paragraphs is referred to, it generally commences with para 51 but frequently ends with other paragraph numbers. 66 At paras 130-135 Addenbrooke pleads that: none of the facts and purposes pleaded at paras 80-86, 90-93, 94-98 and 102-126A (with the exception of paras 89, 92, 93 and 96 (as to the fact of the option but not the amount)), was disclosed to Addenbrooke prior to 26 November 2010 by, amongst others, Duncan or Cascade; such failure or omission was not inadvertent within the meaning of s 12BA of the ASIC Act; such failure was "inconsistent with the obligations owed by each of those persons and entities to [Addenbrooke], including obligations in good faith to disclose all matters relevant to its entry into the Agreement in all the circumstances of the case"; if any of the facts or purposes, or any combination of them had been disclosed to Addenbrooke prior to its participation in the capital raising, it would not have so participated; the failure or omission by Cascade, Duncan and others to disclose the facts and purposes amounted to misleading or deceptive conduct; and Addenbrooke is entitled to claim damages or other relief pursuant to ss 12GF and 12GM of the ASIC Act. 67 The source of, or basis for the alleged "obligation" referred to in para 131 of the statement of claim is not identified. As far as I can see, no attempt was made at trial to identify any such source or basis. Addenbrooke's case seems to have been that because the undisclosed matters were material or relevant to its decision to invest in Cascade, non-disclosure of such matters amounted to misleading or deceptive conduct. As I shall demonstrate, that proposition is contrary to authority.

THE APPEAL 68 The appeal, as it concerns the misleading or deceptive conduct case against Duncan, has two primary aspects. The first is Addenbrooke's assertion that the primary Judge failed to consider whether Duncan had reasonable grounds for making certain alleged representations as to future matters. Because of the way in which his Honour disposed of the matter, it was not necessary that he do so. The second aspect is the assertion that his Honour failed to consider and determine various aspects of the non-disclosure case, having limited his consideration to matters concerning the involvement of the Obeid family in the Mt Penny project, and the course of action embarked upon by the directors of Cascade and Duncan to buy out the Obeid family. 69 On any view of the case as pleaded, as conducted and as decided, its focus was upon such involvement and the steps taken to terminate it. Addenbrooke accepts that his Honour dealt with these matters. Hence Addenbrooke's assertion that his Honour failed to deal with significant aspects of the non-disclosure case must be closely examined. Before doing so, I should say a little about the conduct of the case, and some of the cases concerning misleading or deceptive conduct.

PLEADINGS AND CONDUCT OF THE CASE - AN OVERVIEW 70 In this section of my reasons I effectively summarize matters which I deal with more fully later in the reasons. In my view, many difficulties have arisen out of the way in which the non-disclosure case was pleaded and conducted. First, I consider that the pleading of that case was defective. As appears from the authorities cited below, Addenbrooke was obliged to identify the way in which it characterized the impugned conduct as being misleading or deceptive. As far as I can see, insofar as concerns the non-disclosure case, it made no attempt to do so. It rather asserted that if any matter known to Duncan was material to Addenbrooke's decision to invest, then non-disclosure amounted to misleading or deceptive conduct. This deficiency in the pleading has led to a great deal of uncertainty as to the case advanced by Addenbrooke. During the trial, the primary Judge engaged in numerous exchanges with Addenbrooke's counsel, with a view to identifying the case being advanced. At various points, they seemed to agree. Nonetheless Addenbrooke now submits that his Honour failed to address a major part of the non-disclosure case. 71 A second problem is that Addenbrooke pleaded that: in entering into the Agreement, it relied upon certain representations made by Duncan, Gray, Southern Cross and Cascade; and that had it known of all or any of the undisclosed matters or any (unspecified) combination of them, or some of them, it would not have done so. 72 No other causation case was pleaded. In particular, there was no plea that a reasonable investor might have responded to disclosure of the undisclosed matters in a particular way, or that other people may have influenced Denis O'Neil, Ned O'Neil or Smith, leading Addenbrooke to decide not to invest in Cascade. Addenbrooke did not plead that had Gray and others learned of the undisclosed matters, or any of them, the capital raising would not have proceeded. I make those points because, on appeal, Addenbrooke seems to have sought to raise them, and so depart from the case as pleaded and conducted at first instance. I should add that I do not suggest that the position of a reasonable investor is in any sense relevant in this case. However Addenbrooke at some points, suggests as much. 73 The evidence concerning the relevant decision-making process came from Denis O'Neil, Ned O'Neil and Smith, Addenbrooke's case being that they were, all three, parties to the decision to invest. However his Honour concluded that Denis O'Neil, alone, made the decision, a finding which, in my view was fairly open. His Honour effectively concluded that Denis O'Neil would have decided that Addenbrooke should invest, whether or not the relevant representation was made, and even if he had known of the involvement of the Obeid family, and that they were to be bought out, using funds from the capital raising. Again, I consider that such view was fairly open. 74 A third problem is that Addenbrooke sought to conceal or remedy deficiencies in its misleading or deceptive conduct case by repeated, and largely unpleaded allegations of dishonesty and fraud as against Cascade, its directors and Duncan. Such assertions related to their alleged attempts to conceal the Obeid family's involvement in the Mt Penny project, the means used for removing them from such involvement and the reasons for the decision to remove them. These assertions invited inquiries and inferences which had little to do with the statutory prohibition upon misleading or deceptive conduct. Further, they tended to both constitute and conceal circuitous reasoning. I should add that at paras 143 and 144, there are allegations of "fraud and dishonest design", but these paragraphs do not relate to the misleading or deceptive conduct case. The pleading at paras 163-171 also suggests fraud but only in connection with the accessorial claim. 75 Fourthly, in its submissions at first instance, Addenbrooke did not always distinguish between propositions for which there was direct evidence and inferences which it sought to draw from the evidence. At the hearing of the appeal, it adopted the same approach. This is particularly the case in Addenbrooke's submissions concerning Duncan's knowledge, his reasons for wanting to remove the Obeid family from the Mt Penny project and the mechanisms adopted for achieving that outcome. Because of the way in which the primary Judge disposed of the matter, it was not necessary that he decide whether to draw such inferences. However one ground of appeal complains of his Honour's failure to do so. In considering this appeal, I must, in some cases, accept Addenbrooke's assertions concerning available inferences, although many such assertions seem to be highly speculative. Finally, there is the curiosity to which I have referred, that Addenbrooke effectively seeks to recover its investment in Cascade caused by WEC's not proceeding with the anticipated deal and/or because the New South Wales Parliament passed the Revocation Act. However it does not plead that it was misled as to the likelihood that the proposed deal would proceed or as to the security of Cascade's title to EL7406. 76 In the end, as I see it, Addenbrooke's non-disclosure case failed because: it did not identify the misleading or deceptive effect or effects of the non-disclosures which it alleged; in the absence of such identification, and given the wide range of matters pleaded in paras 51-135, including various combinations of those matters, his Honour chose to address the case by focussing on the matters identified by Denis O'Neil as being matters: upon which he had relied in making the decision to invest; and which, had he known of them, would have led him to decide not to invest; its case on causation was that but for the express representations, it would not have invested in Cascade and that, had it known all or any of the undisclosed matters, it would not have invested; there was no other pleaded case on causation; to prove causation, it relied on the evidence of the three Addenbrooke witnesses, but his Honour concluded that the decision-maker was Denis O'Neil, and his evidence as to causation was not accepted; the overall effect of these propositions is that the case considered by his Honour was the only viable case pleaded, having regard to the evidence; and Addenbrooke lost on that case. 77 Finally, I should stress that Addenbrooke did not conduct a case based on statutory provisions concerning the sale or issue of shares, such as those contained in Pt 6D.2 of the Corporations Act 2001 (Cth) (the "Corporations Act").

some relevant principles 78 In misleading or deceptive conduct cases a distinction is frequently drawn between cases involving express representations, on the one hand, and cases based on non-disclosure of information, on the other. In Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357, French CJ and Kiefel J referred to the early history of the statutory concept of misleading or deceptive conduct and its unique nature. Their Honours cited the observation by Gummow J in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 to the effect that, "unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist." Their Honours then continued at [19]-[23]: 19. The language of reasonable expectation is not statutory. It indicates an approach which can be taken to the characterisation, for the purposes of s 52 (of the Trade Practices Act 1974 (Cth)), of conduct consisting of, or including, non-disclosure of information. That approach may differ in its application according to whether the conduct is said to be misleading or deceptive to members of the public, or whether it arises between entities in commercial negotiations. An example in the former category is non-disclosure of material facts in a prospectus. 20 In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in s 52. 21 To invoke the existence of a reasonable expectation that if a fact exists it will be disclosed is to do no more than direct attention to the effect or likely effect of non-disclosure unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by one person of another which exceed the requirements of the general law and the prohibition imposed by the statute. In that connection, Robson AJA in the Court of Appeal spoke of s 52 as making parties "strictly responsible to ensure they did not mislead or deceive their customer or trading partners". Such language, while no doubt intended to distinguish the necessary elements of misleading or deceptive conduct from those of torts such as deceit, negligence and passing off, may take on a life of its own. It may lead to the imposition of a requirement to volunteer information which travels beyond the statutory duty "to act in a way which does not mislead or deceive". Cicero, in his famous essay On Duties, seems to have contemplated such a standard when he wrote: "Holding things back does not always amount to concealment; but it does when you want people, for your own profit, to be kept in the dark about something which you know and would be useful for them to know." It would no doubt be regarded as an unrealistic expectation, inconsistent with the protection of that "superior smartness in dealing" of which Barton J wrote in W Scott, Fell & Co Ltd v Lloyd, that people who hold things back for their own profit are to be regarded as engaging in misleading or deceptive conduct. As Burchett J observed in Poseidon Ltd v Adelaide Petroleum NL, s 52 does not strike at the traditional secretiveness and obliquity of the bargaining process. But his Honour went on to remark that the bargaining process is not to be seen as a licence to deceive, and gave the example of a bargainer who had no intention of contracting on the terms discussed and whose silence was to achieve some undisclosed and ulterior purpose harmful to a competitor. 22 However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. Yet that appears to have been, in practical effect, the character of the obligation said to have rested upon Miller in this case. 23 Reasonable expectation analysis is unnecessary in the case of a false representation where the undisclosed fact is the falsity of the representation. A party to precontractual negotiations who provides to another party a document containing a false representation which is not disclaimed will, in all probability, have engaged in misleading or deceptive conduct. When a document contains a statement that is true, non-disclosure of an important qualifying fact will be misleading or deceptive if the recipient would be misled, absent such disclosure, into believing that the statement was complete. In some cases it might not be necessary to invoke non-disclosure at all where a statement which is literally true, but incomplete in some material respect, conveys a false representation that it is complete. (Footnotes omitted.) 79 In Fraser v NRMA Holdings Ltd (1995) 55 FCR 452, this Court (Black CJ, von Doussa and Cooper JJ) said at 467-468: Where the contravention of s 52 alleged involves a failure to make a full and fair disclosure of information, the applicant carries the onus of establishing how or in what manner that which was said involved error or how that which was left unsaid had the potential to mislead or deceive. Errors and omissions to have that potential must be relevant to the topic about which it is said that the respondents' conduct is likely to mislead or deceive. The need for an applicant to establish materiality is of particular importance in a case like the present one where the proposal is complex, and involves difficult questions of commercial judgment and matters of degree and conjecture as to the future about which there is room for a range of honestly and reasonably held opinions. 80 I do not understand their Honours to have been suggesting that materiality, alone is sufficient to characterize non-disclosure as misleading or deceptive conduct. Such an approach would be inconsistent with that subsequently adopted by French CJ and Kiefel J in Miller. These passages highlight the difference between two situations. On the one hand is non-disclosure, where there has been an express representation which undisclosed information would have shown to be false, or where there are circumstances leading to the expectation that undisclosed matters would, if they existed, have been disclosed. On the other is non-disclosure, absent any such express representation or circumstances. In the former case the relevant misleading or deceptive conduct is the totality of the express representations or circumstances and the non-disclosures. However, if A offers to sell shares in a company to B, with no representations or circumstances raising such expectations, it may be difficult to establish a case of misleading or deceptive conduct based on non-disclosure of material matters. 81 The second line of cases to which I wish to refer concerns causation of damage in connection with misleading or deceptive conduct. Addenbrooke seems to submit that the primary Judge failed to consider the whole of the non-disclosure case as pleaded, in order to consider the "impact" of those matters on Addenbrooke, the "reasonable person in the position of an investor" and upon the success of the capital raising, had such matters been disclosed. The reference to a reasonable person may be misleading. In Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [36] and [37], Gleeson CJ, Hayne and Heydon JJ held that where conduct is directed towards a class of persons, it is necessary that the Court isolate, by some criterion or criteria, a representative member of the class. This is the "reasonable person in the position of an investor" referred to in ground 2(b)(iv) of the notice of appeal. However, when the conduct is directed towards a group of identified persons, of whom the relevant applicant is one, "[t]he plaintiff must establish a causal link between the impugned conduct and the loss that is claimed. That process requires an analysis of the conduct of the defendant in relation to that plaintiff alone." See also Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [26]-[29] (per French CJ) and the first two paragraphs in the extract from the decision in Miller set out above. The present case falls into the category of conduct directed towards identified persons. 82 Addenbrooke asserts that the primary Judge failed to consider whether the motivation of the Cascade directors and Duncan, in not wishing to disclose the true purpose of the capital raising, was relevant to the likelihood that Duncan or Cascade achieved that purpose. The rather delphic nature of this assertion may be, in part, resolved by reference to the reasons of Wilson J in Gould v Vaggelas (1985) 157 CLR 215 at 236, particularly "principle 2" in the first paragraph on that page. Wilson J said that: If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. 83 However, in Campbell, at [142] and [143], Gummow, Hayne, Heydon and Kiefel JJ said, concerning that proposition: 142 The appellants nevertheless submitted that Giles JA was wrong to hold, as he did, that Mr Weeks relied on the accuracy of the estimates of future sales revenue and the estimates of future profitability derived from those estimates of revenue. The conclusion which Giles JA reached was founded upon the premise that "[i]f a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation". 143 Three points may be made about this proposition. First, it is a proposition expressed in relation to the law of deceit, not the operation of statutory provisions for the award of damages suffered by contravention of consumer protection provisions proscribing misleading or deceptive conduct. Secondly, the proposition carries within it a number of subsidiary questions, such as what is a "material" representation, and when is a material representation "calculated" to induce entry into a contract. Thirdly, because the proposition is directed to the drawing of inferences, consideration of its application must always attend closely to all of the evidence that is adduced that bears upon the question being examined. With considerations of these kinds in mind, Giles JA was right to point out that reliance is not a substitute in the context of the Fair Trading Act for the essential question of causation. Moreover, it is also right to observe, as Giles JA said, that "[i]t may be artificial to speak of reliance in determining what action or inaction would have occurred if the true position had been known". (Footnotes omitted.) 84 The decision in Campbell is also relevant to other matters in the present case. Their Honours continued: 144 In the present matter, the significance which Mr Weeks attached to the estimate of sales revenue for December 2004 was dealt with only briefly in evidence. Not only was most attention given at trial to questions of oppression, the chief focus of the claims under the Fair Trading Act seems to have been upon the add backs and EBIT to November 2004. 145 In an affidavit which Mr Weeks swore in September 2006, shortly before the trial began in November 2006, he deposed to what he would have done if he had known of the inaccuracies in the financial information given to him in December 2004. That evidence dealt separately with three aspects of the financial information. First, it dealt with the non recurring expenses or add backs. Mr Weeks said: "If any annualised add back (or combination of add backs) of approximately $20,000 or greater was found to be erroneous, that is, if the profit for the five month period from 1 July 2004 to 30 November [2004] was approximately $8,000 inaccurate, then this would mean that the profit would not be sufficient to meet Healthy Water's obligations. I would not have entered into the Share Sale Agreement in these circumstances." He then dealt with two other issues not yet touched on in these reasons: an alleged misstatement of amounts owing to trade creditors and an alleged misstatement of the balance of Mr Campbell's loan account with the company. Of these two matters he said that, had he been aware "of either of these matters or both of them together" (emphasis added), he would not have entered into the share sale agreement, and he stated his reasons for that conclusion. The last aspect of the financial information dealt with in the affidavit of Mr Weeks concerned the overstatement of the sales revenue for December by $7,147 and an allegation he had made that the same document had overstated the EBIT for Healthy Water for December 2004 by approximately $25,000. The latter allegation about EBIT was not made good. The affidavit continued: "Had I been aware of these matters, I would not have entered into the Share Purchase Agreement for the following reasons: (a) The profit in December of $12,438 represented a 62% reduction from the average profit achieved during the preceding 5 months. This would have reduced the annualised profit of Healthy Water and therefore reduced my assessment of the value of Healthy Water based on its EBIT such that I would not have offered to purchase one share for $850,000. (b) In addition, a $25,000 reduction in the profit for December would have reduced Healthy Water's annualised profit and therefore cash flow to a level such that it would not have been able to meet its liabilities including those discussed in paragraph 80(c), above [including liabilities under the services agreements]." (emphasis added) The oral evidence of Mr Weeks did not add to or detract from the evidence set out in the paragraph of his affidavit last quoted. 146 It will be noted that the effect of this aspect of Mr Weeks' evidence was that if two matters had been known to him (overstatement of sales revenue by $7,147 and overstatement of EBIT by $25,000) he would not have made the share sale agreement. But as the facts were found at trial, only one of those matters, overstatement of sales revenue by $7,147, was established. The trial judge noted that the accountants who gave evidence at the trial agreed that there had been an overstatement of Healthy Water's EBIT for December 2004, but only of between $15,318 and $20,022. There was no exploration at trial of what Mr Weeks' position would have been in these circumstances. There was no evidence from Mr Weeks that he would not have proceeded with the purchase if he had known only that the sales revenue for December 2004 had been $7,147 less than estimated. There was, therefore, no question of what credence was to be given to Mr Weeks' evidence of what he would have done if he had known more than he did when he made the share sale agreement. As is illustrated by Rosenberg v Percival, albeit in a different context, assessment of evidence of what would have been done if more information had been known may not be easy. 147 What is important in the present case is that the evidence that was given by Mr Weeks about what he would have done if he had known more than he did was expressed in a way that distinguished between cases where knowledge of either of two matters would have meant he would not proceed and cases where he attached significance to knowledge of both of two matters. This being the only direct evidence on the subject it was not open to the Court of Appeal to infer, from its own assessment of the materiality of the representation and its own assessment of whether the representation was calculated to induce entry into a contract, that Mr Weeks would not have proceeded with the share purchase. (Footnotes omitted.) 85 The propositions which appear in Campbell at [143] are self-explanatory. They stress that the identification of conduct as misleading or deceptive, and the award of any remedies must be in accordance with the relevant legislation. In particular, the notion of causation cannot be supplanted by some assumption derived from sources outside of the statute. In Campbell, it followed that the question of causation was to be determined by reference to all relevant evidence. However, it is for the relevant applicant to plead its case and prove it as pleaded. 86 Finally I should refer to the decision of the High Court in Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 where French CJ and Gummow, Hayne and Kiefel JJ said at [26]-[27]: 26 Contrary to ASIC's submissions in this Court, a case of fraud cannot properly be seen as a "fallback" claim to be made against the possibility that the party accused of engaging in misleading or deceptive conduct by publishing notices in relation to a financial product may seek to characterise them as statements of opinion, not fact. It is fundamental, and long established, that if a case of fraud is to be mounted, it should be pleaded specifically and with particularity. A pleading of fraud will necessarily focus attention upon what it was that the person making the statement intended to convey by its making. And the pleading must make plain that it is alleged that the person who made the statement knew it to be false or was careless as to its truth or falsity. If an alternative case of misleading or deceptive conduct is to be advanced, it is necessary to identify that claim as separate from the allegation of fraud. And for the purposes of the misleading or deceptive claim the pleader must identify what it is alleged that the impugned statements conveyed to their intended audience. Of course there may be circumstances in which it is appropriate to plead alternative cases of misleading or deceptive conduct or alternative cases of fraud and misleading or deceptive conduct. But it is greatly to be doubted that it will ever be appropriate to pile, one on top of the other, as many alternative allegations as were made in this case. Doing so risks contravention of what, in Gould v Mount Oxide Mines Ltd (in Liquidation), Isaacs and Rich JJ said was "the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him" which requires that "pleadings should state with sufficient clearness the case of the party whose averments they are". 27 The task of the pleader is to allege the facts said to constitute a cause of action or causes of action supporting claims for relief. Sometimes that task may require facts or characterisations of facts to be pleaded in the alternative. It does not extend to planting a forest of forensic contingencies and waiting until final address or perhaps even an appeal hearing to map a path through it. In this case, there were hundreds, if not thousands, of alternative and cumulative combinations of allegations. As Keane CJ observed in his judgment in the Full Court: "The presentation of a range of alternative arguments is not apt to aid comprehension or coherence of analysis and exposition; indeed this approach may distract attention from the central issues". (Footnotes omitted.) 87 This passage contains a number of propositions which are presently relevant, namely that: a case of fraud must be pleaded specifically and with particularity; it should be pleaded separately from any claim based upon misleading or deceptive conduct; for the purpose of a misleading or deceptive conduct case, the pleader must identify what it is alleged that the impugned statements conveyed to their intended audience; the complexity of a pleading may deprive the other side of procedural fairness; and a pleader should not create a multitude of possibly arguable causes of action, leaving identification of the true nature of the case to final addresses or, perhaps, for ultimate identification by the trial judge or appellate court. 88 I infer that where a party alleges misleading or deceptive conduct by non-disclosure, the pleader must identify the overall misleading effect of the non-disclosure and any other relevant circumstances. Adjusting their Honours' words so that they are appropriate to Addenbrooke's non-disclosure case, it must show how each non-disclosure (or combination of non-disclosures) was relevantly misleading or deceptive. That process necessarily involves, in this case, demonstration of how, "unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by [Addenbrooke of Duncan] which exceed the requirements of the general law and the prohibition imposed by the [ASIC Act]", Addenbrooke was misled or deceived by Duncan's non-disclosure. The proposition may be demonstrated by reference to Denis O'Neil's complaints that he was not told of the Obeid family's involvement in the Mt Penny project or that the capital raising was, at least in part, for the purpose of buying out the Obeid family. I see no way in which Addenbrooke could complain of the simple failure to disclose that the Obeid family was involved in the Mt Penny project. Addenbrooke had no reason to assume or infer that such family was not so involved. Hence non-disclosure of that fact probably did not mislead or deceive. On the other hand, representations were made as to the purpose of the fund-raising, which purpose was arguably inconsistent with the application of such funds to the buy out of an existing interest. Hence that non-disclosure would arguably be misleading or deceptive, regardless of who held the interest.

THE AMBIT OF ADDENBROOKE'S CASE 89 On its face the statement of claim raises four distinct misleading or deceptive conduct cases: the first, against Cascade, Gray and Southern Cross based on the representational document; the second, being Duncan's alleged accessorial liability for Cascade's conduct; the third, against Cascade and Duncan, based on Duncan's representations; and the fourth, against Cascade and Duncan, based on Duncan's alleged non-disclosures. 90 I am not presently dealing with the first or second cases. 91 In the third case, Addenbrooke pleads: the representations; their misleading or deceptive effect; reliance upon the representations; and its entitlement to damages and other relief. 92 Addenbrooke's non-disclosure case focusses on the matters pleaded in paras 80-86, 90-93, 94-98 and 102-126 or any of them, or any combination of them (with certain minor exceptions). In reality, the case depends upon all of the matters pleaded in paras 51-126. See para 127. Some of the matters so pleaded are the alleged purposes of Cascade, its directors and/or Duncan in taking certain steps. Addenbrooke also pleads motives for, and states of mind accompanying conduct. A motive is not the same as a purpose, although the distinction may sometimes be blurred. Similarly, a state of mind is not necessarily a purpose. Addenbrooke's assertion that purposes (and/or motives) ought to have been disclosed seems to be, at least potentially, inconsistent with the observations by Gummow J in Demagogue (set out above) and those of French CJ and Kiefel J in Miller at [21]-[22]. Purposes, motives and states of mind associated with business decisions are generally the private concerns of the parties having them. The purposes, motives or states of mind of one party to a transaction may well differ from those of the other party and will generally be irrelevant to the dealings between them. In the case of a contract, such irrelevance leads to the objective approach taken to the identification and interpretation of its terms. Whilst it may be conceptually possible that non-disclosure of a purpose, motive, state of mind or reason comprises misleading or deceptive conduct, one would not expect that it would frequently be the case. Further, there may be a difference between non-disclosure of such matters and non-disclosure of the facts upon which they are based. 93 Addenbrooke's case, based on Duncan's express representations, is relatively straight forward. Although the pleaded case was not established, his Honour found that Duncan made one representation which was capable of being misleading or deceptive, namely as to the purpose to which the funds raised in the capital raising would be applied. As I have said, the pleading was not amended to allege that he made such representation. In any event the primary Judge found that Denis O'Neil was the relevant decision-maker. The primary Judge's view of his evidence effectively disposed of that case. 94 The case based on non-disclosure is more difficult. Paragraphs 51-89 of the pleading address the circumstances surrounding the grant of EL7406 to Cascade and the circumstances in which the Obeid family's interest was created. These paragraphs seem to have been designed to found an assertion that there was some form of corruption involved in those events, but no such assertion is pleaded, nor, in the end, did Addenbrooke seek such a finding. Paragraphs 90-92 of the statement of claim seem to go nowhere. Paragraphs 93A-121 allege: meetings with Obeid family representatives; that the Obeid family's involvement was a matter of political and commercial concern which might disrupt the proposed WEC deal or otherwise prejudice Cascade's interests; that certain documents were sent to shareholders and directors; and the transactions by which the Obeid family's interest was terminated. 95 As I have previously observed, there is no direct evidence of such concern or of the reasons for it. However Addenbrooke seeks to draw the inference that the directors of Cascade and Duncan held such concerns, and to draw the further inference that they ought to have disclosed them to Addenbrooke. 96 Paragraphs 119-135 contain the nub of Addenbrooke's non-disclosure case. Some of the allegations go to the knowledge, conduct, purposes or motives of Cascade and/or its directors, but not always to Duncan's knowledge, conduct, purposes or motives. However at paras 129 and 129A, Addenbrooke seems to attribute to Duncan knowledge of all such matters, notwithstanding that he ceased to be a director of Cascade on 31 July 2009. Paragraphs 119-135 allege that: the purpose of the capital raising was to buy out the Obeid family's interest in the joint venture and the three parcels; certain of the shareholders made loans to Cascade for the same purpose; Cascade and its directors expected that CMG's Cascade shares would be sold to WEC for an amount which would effectively discharge part of the price to be paid by Cascade in order to buy out the Obeid family's interest; Cascade and its directors considered that it would not be possible to disclose in Cascade's books the funds raised in the capital raising; Cascade and its directors decided that at least $25 million would be paid to CMG, and that the shares issued to it should be shown as issued at $0.00001 per share; and the purpose underlying the structure of the transaction was to remove Southeast and the Obeid family from the Mt Penny project for the purpose or purposes set out in paras 119-126. 97 The only purposes, identified as such, in those paragraphs are: that identified at para 119, namely that the purpose of the capital raising was to enable Cascade to buy out the Obeid family; and that identified at para 125, namely that the purpose of the structure of the transaction was to procure the exit of Southeast and the Obeid family. 98 These purposes are really different ways of expressing one purpose, namely the removal of the Obeid family from the project. Paragraph 120 might also be read as identifying a purpose, although that term is not used. Neither the conduct identified in para 120, nor any associated purpose has any real relevance in these proceedings. Certainly, Denis O'Neil did not suggest that had he known of these matters, he would not have invested. 99 Paragraphs 93, 94 and 95 offer motives for the removal of the Obeid family from the Mt Penny project. The "common directors" certainly stood to make a profit from the sale to WEC, as alleged in para 93, but Addenbrooke also expected to profit from the sale of its Cascade shares to WEC. The nature and extent of the risk identified in paras 94 and 95 are neither explained nor quantified. The language of those paragraphs demonstrates the speculative nature of Addenbrooke's case. I refer in particular to the expressions "some press speculation", "the potential to interfere with the possible sale" and, "a concern" about possible events which "may reveal ...". 100 Apart from non-disclosure of the two purposes identified in paras 119-126A of the statement of claim, on appeal Addenbrooke stresses two other matters. They are: the alleged concerns held by Cascade, its directors and Duncan that disclosure of the Obeid family's interest would prejudice the proposed WEC deal and Cascade's interests, including its interest in EL7406; and that Cascade and its directors believed that it was necessary, not only that the Obeid family's interest be extinguished, but also that the fact that they had ever held such interest be concealed. 101 As to the first matter, Addenbrooke invites an inference that Cascade, its directors and Duncan were concerned about any disclosure of the Obeid family's interest in the project, but the nature of such concern and the reasons for it have not been established. Addenbrooke's witnesses claim to have, themselves, held such concern, and that had they known of the Obeid family's involvement, they would not have allowed Addenbrooke to invest. There is no basis for inferring that Cascade, its directors or Duncan had any concerns, or reasons for concern about the Obeid family's involvement beyond those vague concerns expressed by the three Addenbrooke witnesses. Hence concealment of Cascade's concern, and that of its directors and Duncan, takes the case no further than does concealment of the fact of the Obeid family's involvement, the case which the primary Judge rejected. It may have been barely arguable that knowledge of concern held by Cascade, its directors and Duncan would have reinforced the concerns held by the Addenbrooke witnesses, and that such reinforcement may have caused his Honour to reach a difference conclusion. However Denis O'Neil did not say that had he known of such concern, he would have acted differently. 102 The second matter is not expressly pleaded, although it may be implicit in para 95. It is inconsistent with the combined effect of paras 125, 126 and 126A. Paragraph 125 pleads that the structure of the transaction was designed to terminate Southeast's interest in the joint venture. Paragraph 126 pleads that such purpose arose out of concern about the consequences of it becoming known that the Obeid family, "held an interest, or was capable of holding an interest in the Mt Penny tenement". Those words seem to describe an extant interest or a future interest, as at the time of disclosure, and not a former interest which had, by that time, been extinguished. In November 2010 Cascade, its directors and Duncan could not have expected that they could forever conceal the matters identified in the May 2010 newspaper article. The Obeid family's possible involvement was, by that time, a matter of public speculation. It is difficult to understand this aspect of the pleading in the absence of any pleading as to the nature of the concern about the Obeid family allegedly held by Addenbrooke and by Cascade, its directors and Duncan, and the reasons for such concern. 103 Paragraph 126A seems to suggest that concealment of the Obeid family's involvement was to continue only until Addenbrooke signed the Agreement. If Cascade and its directors were concerned to ensure that the WEC deal proceeded, the need to conceal the Obeid family's involvement would not have disappeared when Addenbrooke executed the Agreement. There would still have been the risk that public knowledge of such involvement would cause WEC to withdraw from the deal. As I have previously said, at least some of the directors of Cascade and Duncan had shares in WEC. Some of the directors were also directors of WEC, as was Duncan. It seems unlikely that they would have taken the risk that WEC would suffer the consequences said to be likely to follow any public disclosure of the Obeid family's involvement. If, in fact, Cascade, its directors and Duncan considered that after Addenbrooke had entered into the Agreement, they would be able to disclose the Obeid family's involvement, it could only have been because such disclosure would no longer impact on the WEC deal. In other words, the alleged concern of Cascade and its directors must have been as to continuing, and not past involvement of the Obeid family. 104 Paragraphs 132 and 133 of the statement of claim pose additional problems. The formula "facts and purposes … or any of them or any combination of them" raises an almost infinite range of combinations of facts and purposes which may have constituted the relevant misleading or deceptive conduct. Had Addenbrooke, at some stage during the trial, identified the combination of circumstances said to be misleading or deceptive, and the misleading effect upon which it relied, the ambit of these proceedings would have been considerably narrowed. Neither the respondents nor the primary Judge bore an obligation to anticipate all of the ways in which Addenbrooke's case might be put. The clearest statement of the non-disclosure case upon which Addenbrooke eventually relied appears at para 41 of its written closing submissions at trial. Addenbrooke seems there to identify the allegedly undisclosed matters upon which its non-disclosure case is based. I shall deal with that matter at a later stage. At this point, it is sufficient to note that those matters do not include the knowledge or concerns of Cascade, its directors or Duncan about the Obeid family's involvement, the case which, as Addenbrooke asserts, his Honour overlooked. 105 I make two final comments concerning the statement of claim. First, it is of the kind discouraged by the High Court in Forrest. It was potentially unfair to the respondents. Further, it raised the problem concerning evidence of "causation" identified in Campbell. For present purposes, however, I am concerned only with its contribution to the uncertainty surrounding Addenbrooke's case. 106 Secondly, as I have said, in its conduct of the trial and on appeal, Addenbrooke has, from time to time, alleged serious misconduct against Cascade, its directors and Duncan, sometimes explicitly and sometimes, implicitly. The statement of claim concerning the misleading or deceptive conduct case contains no case in deceit against Duncan. In its reply, Addenbrooke alleges fraud, apparently in order to rely on statutory provisions concerning the apportionment of damages. It is also the case that in connection with other causes of action, fraud is alleged against Cascade, CMG, Duncan and others. As I understand it, a plaintiff or applicant may plead, in reply, matters which, it alleges, make the defence unmaintainable. See Atkin's Court Forms (2nd ed, 1974 issue), vol 32 at pp 37 and 38. However, a reply must not contradict, or be inconsistent with the claim. The claimant should not introduce new claims or causes of action in the reply. If he or she wishes to do so he or she should amend the particulars of claim. See Bullen & Leake & Jacob's Precedents of Pleadings (18th ed) at paras 1-37. Further, as Thesiger LJ said in Davy v Garrett (1878) 7 ChD 473 at 489: In the Common Law Courts no rule was more clearly settled than that fraud must be distinctly alleged and as distinctly proved, and that it was not allowable to leave fraud to be inferred from the facts ... . It appears to me that a Plaintiff is bound to shew distinctly that he means to allege fraud. 107 I have previously referred to the need to plead fraud discretely, and apart from any plea of misleading or deceptive conduct. It is true that, as observed by Thesiger LJ in Davy at 489, the word "fraud" need not be used when the plaintiff alleges that the defendant made a representation which he or she knew to be untrue, with the intention that the plaintiff act on it. However no such allegations are made in this statement of claim as it concerns the misleading or deceptive conduct case. His Lordship went on to observe that one cannot raise fraud by pleading facts which are innocent in themselves. 108 Whilst it may be accepted for present purposes that Duncan's statement as to the purpose of the capital raising was misleading or deceptive, it does not follow that Addenbrooke had a general licence to make such derogatory assertions in support of the misleading or deceptive conduct case. It is unclear whether, at the trial, Addenbrooke ultimately pressed for any such findings, other than with respect to apportionment. However, on appeal, Addenbrooke again raises the matter. In its written outline on appeal at para 3(d) and at para 25, Addenbrooke asserts such a claim and seeks a finding accordingly. In the course of the trial and in its submissions, particularly in reply, Addenbrooke tended to assume and assert misconduct, which assertions gave to the impugned conduct an apparent flavour which may not have been justified. After all, if the Cascade directors had concluded that the Obeid family's involvement was likely to be damaging to Cascade, then they were obliged to take such steps as they could, within the law, to remedy the matter. There was nothing legally or morally wrong in seeking to buy out the Obeid family's interest. Nor was there necessarily anything unlawful or immoral about their seeking to conceal, as far as practicable, the fact of such involvement. Of course some methods of achieving those goals may have been illegal or immoral. However the only presently relevant allegation is that of misleading or deceptive conduct. In that regard, one must keep in mind that there is generally no burden upon one party to communicate to the other party, all that it knows about a proposed transaction.

THE EVIDENCE CONCERNING CAUSATION 109 The primary Judge effectively disposed of the case upon the basis that Addenbrooke had not established a causal relationship between any demonstrated misleading or deceptive conduct and any alleged loss. Although such an approach might be thought to be unusual, it must be kept in mind that a person may only claim relief under ss 12GF or 12GM of the ASIC Act if he or she claims to have suffered loss or damage as a result of the relevant conduct, or that he or she is likely to suffer such loss or damage. If the pleaded causal connection cannot be established on any available view of the evidence, then the Court may properly dispose of it on that basis. As I have said Addenbrooke's difficulties arose partly out of its statement of claim, partly out of his Honour's finding that Denis O'Neil was the decision-maker and partly out of the unsatisfactory nature of his evidence. The issue of causation was pleaded at paras 41, 46 and 132 of the statement of claim. To the extent that Denis O'Neil's evidence supported any such causal link, his Honour rejected it. Although Addenbrooke seems to appeal against such rejection, the grounds are unconvincing. I shall deal with them at a later stage. On his Honour's view of the evidence, the only express representation established against Duncan was that concerning the purpose to which the funds raised in the capital raising were to be applied. The non-disclosure case was inevitably narrowed by Denis O'Neil's evidence as to the matters which, had they been disclosed, would have led him to decide against the investment in Cascade. He identified only the involvement of the Obeid family in the Mt Penny project and the fact that moneys were to be paid to them. His Honour concluded that causation had not been proven. 110 Denis O'Neil, Ned O'Neil and Smith were called for two primary purposes: to prove the express representations; and to prove causation. 111 At ts 299, l 44 to ts 300, l 24, in Denis O'Neil's oral evidence concerning the meeting on 19 November 2010, this passage appears: And what do you remember about that meeting?---Well, it was a presentation, I would say - I recall it. And by whom?---By Gray. And was there anyone else there?---Yes. There were others there. Do you recall anyone in particular?---I think Mr Duncan was there, I think Neville Crichton was there and a group of others. Yes. So what do you remember being said at that meeting?---They outlined the proposal in some detail. Can you remember what was said?---Not accurately, other than - no. Just a whole presentation of the deal. That's where Greg and Ned come into the detail. Right. So do you remember how much they wanted to raise?---Well, we were asked by Gray, in total - that there was total 28 million and we were discussing five million. All right?---Ended up at eight. And do you recall why it ended up at eight?---We just went from five to eight because it looked good, what we were told by Gray and Mr Duncan, it all looked good. 25 per cent return and three or four months, that's all that interests me. And the rest I leave to Ned, Greg and my good friend, Neville Crichton, who is a very, very capable businessman. And I knew Sir Ron Brierley was in and three or four other gentlemen, but I forget their names. They were in. I mean, that sounded good enough for me. 112 I make two observations about this passage. First, any suggestion that Denis O'Neil relied on anything said by Duncan at the meeting was surely disproven by his confessed inability to remember anything that Duncan had said. Second, I do not understand Addenbrooke to have suggested at the trial that there was any discrete case arising out of the increase in the amount of the investment. 113 At ts 301, ll 6-10 Denis O'Neil said that at the meeting, nothing was said about the Obeid family. He said that he knew the name "in Parliament", and, "wasn't keen on that, I don't think. But I knew it was in Parliament. That's all." The fact that Denis O'Neil said so little about the matters set out in paras 51-136 of the statement of claim is, to say the least, surprising. As I have said, the only non-disclosures of which he complains are as to the involvement of the Obeid family and as to the fact that the moneys raised in the capital raising (or some of those moneys) were to be paid to them. He must have been aware of the content of the statement of claim. It is difficult to avoid the inference that if he had anything to say about the other alleged non-disclosures in the context of his decision-making, it would not have been helpful to Addenbrooke's case. 114 No doubt, Addenbrooke hoped, or expected that the primary Judge would accept the evidence that there had been a collective decision, involving Denis O'Neil, Ned O'Neil and Smith. His Honour did not do so. Given that finding, neither Ned O'Neil's evidence, nor that of Smith can be of much help to Addenbrooke. However I shall say something about that evidence. 115 Ned O'Neil said, at paras 29 and 30 of his first affidavit, that he would not have agreed to the investment had he known that the moneys were to be paid to the Obeid family, "in the manner discussed in paras 51-126 of the [statement of claim]". He also said that had he known that shares had been issued to CMG at $.00001 per share, and not $46.57 per share, he would not have agreed to invest. He would have enquired further as to the purpose and reason for the issue before considering the proposal. 116 At paras 62-69 of his first affidavit, Ned O'Neil identified aspects of the matters pleaded in paras 51-126 of the statement of claim. He inferred, at para 65, that the purpose of Cascade's capital raising was to buy out the Obeid family. He asserted, at para 67, that had he known "all or any" of the facts, and in particular, the purpose of paying $60 million to Southeast, "I would have had very serious objections to the investment and would have not contemplated it in any circumstances". At para 69, he conceded that some of the facts in paras 51-126, "would not of themselves have put me on notice of the entirety of the transaction to which I take objection. However ... most of the facts and matters [which appear in paras 51-126] would have caused me to pursue a further chain of enquiry, would have caused me to lose interest in the particular investment ...". 117 Ned O'Neil's third affidavit focussed primarily upon Gray and, to a lesser extent, Poole. In particular, he referred to a presentation pack of documents which Gray had exhibited to an affidavit. Ned O'Neil denied having seen the presentation pack, or having had knowledge of the matters contained in it before, or during the capital raising. He said that the documents comprising the presentation pack disclosed information that was very important, and that further review and investigation would have been necessary in order that Addenbrooke could make an informed decision. 118 In his fourth affidavit, Ned O'Neil gave evidence as to a letter which was no longer in existence but was said to show that Denis O'Neil had agreed that if any two of himself, Ned O'Neil and Smith disagreed with a proposed investment, it would not proceed. In oral evidence-in-chief, Ned O'Neil dealt with statements made at the meeting of 19 November 2010 and with events thereafter. His cross-examination by counsel on behalf of Duncan focussed on reliance. The thrust of Ned O'Neil's evidence appears at ts 136, l 16 to ts 137, l 40 as follows: All other things being equal, instead of being told that it's to pay third party debt. Or instead of being told that it's going to be used to buy trucks and equipment?---I would have said, "What is the" - "Please give me some more information on the CMG debt." And the information about the CMG debt is that, "CMG is owed some money by Cascade, because there was a time when Mr Eddie Obeid and/or his family had an interest in this project. But we've got rid of them. And the debt to CMG is but an overhang of getting rid of them"?---I wouldn't - that would have been a deal-breaker for me. Now, just explain why?---Because - - - What's the problem?---The problem is I don't want to be - I don't want to - I wouldn't want to invest in a company that was, or is, associated with the Obeids. But why not?---Because of their reputation, and - well, their reputation. But you can't discount that you knew the company was associated with the Obeids, in the sense that it might have to do business with them as a landowner, can you?---As I said, on the land owning issue with the Obeids, it was either discussed at the 19th or at a subsequent meeting. Yes. But it might have been discussed on the 19th?---Possibly. All right. And, if it was, it didn't faze you, did it?---No. When that was discussed - and, as I said, I'm not 100 per cent sure on the date. When that was discussed, you know, we asked - there were additional questions asked. And we were told that it was in line with the standard multipliers ..... and it was all above board. So, it doesn't follow that any suggestion that the company had any connection with the Obeids, at all, would be a deal-breaker, does it?---In the joint venture. That would - - - At the moment I'm asking you if you agree - - -?---Okay. - - - that any suggestion by you that any mention of the Obeids in connection with this company would have been a deal-breaker, that's overstating things, isn't it? It depends what you're told?---I would have asked for more information. And in relation to the land owning. If they were a landowner, and they had signed up to an option, - at whatever the going rate was, the landowners with mines - you would have been happy?---That would have caused me concern. And I would have taken that into account in my decision-making process. But you're not able to say that that all didn't happen on 19 November, are you?---I'm not sure if it happened on the 19th or the subsequent meeting. Now, if you had been told, "Look, they were also involved in some sort of joint venture. Mr Duncan didn't like that. So, we got rid of them. We've had to pay them out. And your money is being used in part to pay CMG, which has bought out the Obeids." That wouldn't have concerned you at all, would it?---That would have concerned me greatly. But you can't really say why, other than they had a reputation?---Well - - - Is that it?---They had a reputation. And that would have been completely different to what I was told the capital raising was for. Well, in the sense that it's not a third party debt; that CMG is somehow connected to the company. Is that the difference?---No. I was told the funds would be used for development - ongoing development of the asset. And we've talked about that. Yes. But you had previously been told it was to pay creditors?---And, as I said - - - You weren't worried by that change?---No. I considered that to be in line with the explanation I was given at the presentation meeting. All right. Now, can we just go back to Mr Jones? Really, he told you and your father that this was a sure thing, didn't he?---No. 119 I make four observations concerning this evidence. First, it is quite inconsistent with Ned O'Neil's claimed concern about the Obeid family's reputation, that he could not discount the possibility that their involvement was mentioned at the meeting on 19 November 2010. The primary Judge concluded that such involvement was not mentioned, but that finding does not explain Ned O'Neil's uncertainty on this, apparently vital point. The second point is that to which I have previously referred, namely the difference between the purposes specified in the representational document and those pleaded against Duncan, and the difference between the case pleaded against Duncan and the primary Judge's findings. His Honour found that Duncan had represented that the funds to be raised would go towards paying past and, perhaps, future consulting fees. His Honour may not have excluded the possibility that Duncan had said something concerning development work as pleaded, and as claimed by Ned O'Neil. However his Honour considered that Ned O'Neil had exaggerated the extent of any such statements. I infer that his Honour chose not to rely on that evidence. In any event, Denis O'Neil did not refer to such matters as being relevant to his decision-making. Nor did he mention any of the other matters pleaded against Duncan. The third matter is the unsatisfactory nature of the explanations given by the Addenbrooke witnesses concerning their attitudes towards the Obeid family. Finally, it is odd that Ned O'Neil said so little about Addenbrooke's interests in the WEC deal. 120 A difficult, but important passage in the cross-examination of Ned O'Neil appears at ts 144 to ts 157. Counsel was exploring the witness's claim that he would have been concerned by the involvement of the Obeid family in the Mt Penny joint venture and in real estate in the area. Much of this passage concerns reliance on Duncan's representations and the effect of the non-disclosures. Again, it may be of little relevance, given the primary Judge's conclusion that it was Denis O'Neil, and not Ned O'Neil who made the decision to invest. 121 At para 67 of Ned O'Neil's first affidavit he had said: I have carefully considered the nature of the transactions described in paragraphs 51 to 126 of the ASOC herein. In my opinion, those transactions, and the pleaded purpose of those transactions, if established, are completely inconsistent with what I considered the purpose and nature of the investment that Addenbrooke was making. If I had known all or any of those facts, and in particular, the purpose of paying $60 million to Southeast Investments, for the interests of the Obeid family or interest associated with it, I would have very serious objections to the investment, and would not have contemplated it in any circumstances. If either Greg or Denis had desired to pursue the investment, notwithstanding knowledge of those facts, I would have strenuously resisted it and under no circumstances would I have contemplated Addenbrooke entering into the investment. If Denis would not listen to reason I would have raised the matter with members of my immediate family, including my Mother to bring pressure to bear. There have been occasions on which I have had to do this in the past and it has always been successful. The reason why I have grave concerns about the transactions as described in paragraphs 51 to 126 is that its [sic] is apparent to me, that if that was the true nature of the transactions which took place, they were intended to disguise the involvement of the Obeid Family in the initial grant of the licence, and to extricate them from the investment without public disclosure of that fact. It would have not had mattered to me whether the Obeid Family had in fact been corrupt in procuring their interest in the investment. It is simply the fact that they were involved, and at the relevant times Mr Obeid was a well-known politician, which in my opinion would have tainted the investment, regardless of how he obtained his initial stake. I would not have been prepared to take such risks. 122 At ts 146, ll 21-35 this passage appears: Can you see that? Now, can I ask you to agree with this: in your affidavit evidence - and you have sworn three - the only explanation you give for why you would not be prepared to go into an investment that involved the Obeid family in any way, shape or form is found in the second half of paragraph 67. Do you agree with that? [COUNSEL]: I disagree with it - sorry - I object. [COUNSEL]: Just tell me, Mr Douglas, and I will take him to it. HIS HONOUR: Well, just a moment. I think this is something we might just deal with in the absence of the witness. Would you just step outside for a minute, please, Mr O'Neil?---Yes. 123 The witness withdrew and counsel for Addenbrooke then identified his objection as follows at ts 146, l 44 to ts 147, l 17: [COUNSEL]: Your Honour, at paragraph 67 - paragraph 67 makes it quite clear that his objections were more than that. HIS HONOUR: In what respect? [COUNSEL]: Well, he says in that paragraph - he refers to the transactions in 51 to 26. This is my opinion - both transaction and the pleaded purposes, if established, are completely inconsistent with what I considered to be the purpose and nature of This is my opinion: both transactions and the pleaded purpose, if established, are completely inconsistent with what I considered to be the purpose and nature of the investment that Addenbrooke was making. If I had known all or any of those facts, and in particular the purpose of paying 60 million to Southeast Investments, or the interests of the Obeid family or interests associated with it - etcetera: … I would have strenuously resisted it. And then there's also the reference, I think, in paragraph 66 to the issuance of shares to CMG, which is part of one of those transactions. 124 At ts 147, l 20 to ts 148, l 12 Duncan's counsel said: [COUNSEL]: Well, it can be taken as a given, your Honour, for my part at least, that if - if the O'Neils had known anything about - known paragraphs 51 to 126, they wouldn't have invested. There's no - - - HIS HONOUR: In their entirety? [COUNSEL]: In their entirety. HIS HONOUR: Yes. [COUNSEL]: We're then left with evidence presented in - and some of those facts. It doesn't tell us which one. HIS HONOUR: Well, one point, any of those facts. [COUNSEL]: Yes. HIS HONOUR: It's the drafter's flourish. [COUNSEL]: So that's the evidence they're given. HIS HONOUR: Well, yes. [COUNSEL]: But that - that can be a given, but what he says here is, "It would have worried me even if I didn't know anything about corruption. All that had to happen was that the Obeids be mentioned." And he said that three times, paragraph 26, 30 and 67. 67 gives us the reason. Now, of course, if he knows that there has been corruption involved he's going to be on red alert. I accept that. But he said today - well, your Honour knows the evidence he has given. He has this recollection that they had a smell. It's not in any of the affidavits; that's the point. The best he could do when he did his affidavits was he was a well-known politician. HIS HONOUR: The whole question of reliance is quite nuanced in this case. [COUNSEL]: And we are confronted with a very difficult pleading that wraps up a whole lot of - - - HIS HONOUR: Yes, and also a very carefully drafted affidavit which one might be forgiven for thinking isn't entirely the thinking and rational thinking processes of the witness. 125 Duncan's counsel seems to have been saying that he accepted that if all of the matters alleged in paras 51-126 of the statement of claim had been known to Addenbrooke, it would not have invested. I infer that counsel was, in making that statement, assuming that the relevant matters were proven. However that proposition does not identify which of the matters pleaded would have led Addenbrooke to decide against the investment. Clearly, not all of the matters pleaded, taken in isolation would have had that effect. At ts 154, ll 20-23, counsel points out that many of the facts pleaded related to the way in which the Obeid family and Cascade became involved in the joint venture, whilst other facts concerned the method adopted to remove the Obeid family. One would not expect that each allegation would, by itself, have led Addenbrooke to refuse to invest. 126 At para 19 of his third affidavit Ned O'Neil said that had he known that Poole was the sole director of CMG and director and owner of Arthur Phillip, and that the Obeid family had an interest in respect of which it would have received most of the subscription moneys, he would have advised strongly against the investment. 127 As to Smith, he said, at para 33 of his first affidavit that, had he known that the Obeid family had a 25% "free" interest in EL7406, he would have "forcefully advised" Denis and Ned O'Neil against the investment. At para 40, he said that Addenbrooke's decision was based on Jones's recommendation, Gray's recommendation and the presentation by Duncan and Atkinson (John Atkinson, a director of Cascade) at the meeting, when Duncan was introduced as "Mr Coal of Australia". At para 57 Smith said that had he been aware of the share issue to CMG, he would have enquired as to CMG's identity, and that had he learned that it was controlled by Poole (who was a director of Arthur Phillip and Cascade), he would have made enquiries. It would have raised doubts as to whether he would have recommended the investment. At paras 58-62, he referred to other matters associated with CMG's involvement, namely: that had he seen a balance sheet showing a debt to CMG, he would have been alerted to the fact that if the funds to be raised were to be paid in discharge of such a debt, the payment would have been to a party related to Cascade, which fact had not been disclosed; that the "whole tenor" of the representations at the meeting was that the money was to be applied to acquisition of a mining licence "in the immediate future"; the pro forma balance sheet (which Smith had not seen at any relevant time), showing payment of the funds to CMG, would have led him to ask about the purpose of the fund-raising, given that the documents showed that the CMG debt was to be extinguished; although Duncan (and Gray) had said that existing shareholders did not wish to dilute their shareholdings inter se, the apparent effect of the share issue to CMG was to dilute the other shareholders' interests as against those of Poole, it not then being known that he was to hold the shares on behalf of the Obeid family; such inconsistency being likely to have cast doubt upon the statement that the shareholders did not wish to dilute their interests inter se; the effect of the share issue to CMG was that Poole's indirect interest would have apparently, but not actually been increased; and had he known that of the seven shareholders, two (one of whom was Poole) were not financially capable of participating in the fund-raising, he would have had difficulty in reconciling Poole's inability to make a capital contribution and his alleged capacity to lend money to Cascade. 128 I have summarized the evidence of Ned O'Neil and Smith so as to give some idea of Addenbrooke's case concerning causation. As I have said Addenbrooke failed because it failed to make out the causation case as pleaded. That failure was partially attributable to his Honour's rejection of the evidence that Addenbrooke's decision was a joint decision of all three of the Addenbrooke witnesses, and partially attributable to the quality of Denis O'Neil's evidence. 129 Addenbrooke seems to rely on the statement by Wilson J in Gould v Vaggelas at 236, to which I have referred above. The statement refers to a "material representation which is calculated to induce the representee to enter into a contract". At 238, Wilson J refers to a situation in which one party "has made false statements to [others] intending thereby to induce [them] to enter into a contract and those statements are of such a nature as would be likely to provide such inducement". Wilson J said, at 238, that, "common sense would demand the conclusion the false representations played at least some part in inducing the plaintiff to enter into the contract". Hence the proposition seems to be that where the representor intends to induce, and inducement occurs, there is probably a causal link between the two events. 130 Even apart from the reservations expressed in Campbell as to the application of such an approach to a case of misleading or deceptive conduct, its operation in this case is severely limited by the way in which the case on causation is pleaded and the evidence of Denis O'Neil. The proposition in Gould v Vaggelas may bolster direct evidence that a party relied on a representation. It may, in some cases, be an acceptable substitute for such direct evidence, perhaps in circumstances in which the actual decision-maker cannot give evidence. However, where the decision-maker gives evidence, which evidence does not establish reliance upon the representation in question, it is unlikely that any inference of the kind suggested by Wilson J could make up for such deficiency. Further, there is no clear way to apply the proposition to a non-disclosure case, particularly having regard to the inevitable complications caused by the need to show more than mere non-disclosure. In any event, although Addenbrooke comes close to pleading an intention to mislead, it does not actually do so, save for its plea of fraud in connection with other causes of action and the question of damages. The pleaded purpose of non-disclosure seems primarily to have concerned concealment from the public and the government. However para 126A suggests concealment from Addenbrooke. Concealment from Addenbrooke may have been for either of two purposes, or both. The purpose may have been to induce Addenbrooke into investing, or it may have been to limit the risk that the Obeid family's involvement would become widely known. In the statement of claim Addenbrooke may imply, but does not plead the former. In the overall context of the statement of claim, the latter seems to be the case. 131 One might wrongly infer from the way in which Addenbrooke pleads its case, and from the evidence of the Addenbrooke witnesses, that it had little or no knowledge of the proposed transaction with WEC, let alone that it expected to make a great deal of money as a result of that transaction, and in a very short time. On his Honour's findings, Addenbrooke would have invested even if it had known of the Obeid family's involvement in the project, including the fact that it was to benefit from the capital raising. Denis O'Neil said nothing about the non-disclosure of any concerns held by Cascade, its directors and Duncan, as to the possible disruption of the WEC transaction by any possible political, public or other backlash, or of any other commercial disadvantage to Cascade. Further, as I have said, at para 41 of its written closing submissions, Addenbrooke listed the undisclosed matters upon which it presumably relied. The list did not include non-disclosure of such concerns. 132 I have spent a little time on this aspect of the case (as pleaded at paras 121-133 of the statement of claim) because of Addenbrooke's submission that the primary Judge did not deal with a major aspect of the non-disclosure case. His Honour seems to have assumed, for the purpose of deciding the case, that Addenbrooke was not informed of the involvement of the Obeid family, and was misled as to the purpose of Cascade's capital raising. To that extent his Honour certainly dealt with the non-disclosure case. The difficulty for the primary Judge was, at trial, and is, for this Court on appeal, Addenbrooke's failure clearly to identify the misleading or deceptive conduct case or cases which it sought to advance. As a result it is difficult to identify the precise limits of the case put to the primary Judge. I see no reason to doubt that his Honour dealt with the case as he understood it. The question is whether Addenbrooke pleaded, and pursued at the trial, other versions of the case. In order to answer that question it is necessary that, in addition to the statement of claim, I have regard to the conduct of the trial, including, in particular, Addenbrooke's written and oral submissions. Of course, the case was, in any event, effectively narrowed by Denis O'Neil's evidence as to causation.

ADDENBROOKE'S SUBMISSIONS AT TRIAL 133 Obviously, I cannot include in these reasons, all of Addenbrooke's submissions. Hence I must be selective, seeking to limit my references to those which may suggest a broader or narrower case than that pleaded. It seems that at trial, from time to time, there was demonstrated uncertainty as to the scope of Addenbrooke's case. At ts 76 to ts 77 counsel for Gray and Southern Cross said that Addenbrooke's solicitor had indicated that it might apply to amend its pleadings, having regard to any cross-examination of Gray. Counsel made it clear that he was conducting the case on the pleadings as they then were. His Honour said that the matter should be so conducted. In these circumstances there can be little room for a suggestion that the case was conducted on any basis other than that pleaded, save where there is clear reason for so concluding. I have previously referred to the significant differences between the express representations allegedly made by Duncan, as pleaded, and that eventually established. As I have said, the pleadings were not amended. It is not clear whether Duncan objected to Addenbrooke's change of tack. In Duncan's closing submissions at trial (at paras 14-17) counsel identified the changes in the substance of the pleaded representations but seems not to have objected to such changes. As to the non-disclosure case, at para 96 of Duncan's closing submissions, counsel observed: It is unclear even now whether the Failure to Disclose Case involves an allegation of misrepresentation by silence or of an omission to qualify what were otherwise true but misleading statements concerning Cascade and the purposes of the Capital Raising. 134 As I shall demonstrate, the primary Judge was, at various stages in the trial, also concerned to identify Addenbrooke's essential case.

Addenbrooke's opening 135 In Addenbrooke's written opening outline, the case against Duncan, based on actual representations is dealt with at paras 24-30. At para 24 counsel for Addenbrooke said that Duncan had, at some time prior to its entering into the Agreement, represented that: the shares would be issued at $46.57 per share; and the capital raising would be applied to "reduce third party debt and creditors". 136 In the statement of claim, these representations were attributed to Cascade, Gray and Southern Cross. Hence it seems that Addenbrooke knew, prior to the commencement of the trial that its case against Duncan was going to depart from its pleaded case. His Honour accepted that the second of the alleged representations was made by Duncan at the meeting on 19 November 2010. 137 The non-disclosure case is discussed at paras 36-67. With some exceptions, the opening seems to have been little more than a summary of the statement of claim. Relevantly for present purposes, Addenbrooke said at para 54: The fact that the Obeid Family was involved, or potentially involved in a joint venture with a wholly owned subsidiary of Cascade, Mt Penny Coal, was a matter of political and commercial concern and embarrassment to Cascade and its directors, Southeast Investment (a company associated with the Obeid Family) and the Obeid Family. From about August 2009 there had been press speculation that the Obeid Family had obtained interest or interests in land which was above or adjacent to the Mt Penny Tenement and was likely to profit therefrom. There was also some speculation as to whether the Obeid Family had an interest in the Mt Penny Tenement itself. This had not come to the attention of the directors of Addenbrooke who had no involvement in the proposal at the time, but the documents will show that the speculation was certainly a concern for Cascade, Duncan and its directors. 138 I point out that the first sentence is a matter of inference, not proven fact. After referring to the terms of the agreements which effected the extinguishment of the Obeid family's interest, Addenbrooke said at paras 63-65: 63. The matters referred to above and in paragraphs 51 to 131 of the SASOC were material to the investment made by Addenbrooke in the shares of Cascade and falsified the express representations made to Addenbrooke by Duncan, Gray and Southern Cross, which representations Addenbrooke relied upon in entering into the Addenbrooke Subscription Agreement and paying the Addenbrooke Subscription Price. 64. The matters referred to above and in paragraphs 51 to 131 were not disclosed to Addenbrooke by Duncan or anyone else prior to Addenbrooke entering into the Addenbrooke Subscription Agreement or paying the Addenbrooke Subscription Price. If those matters had been disclosed to Addenbrooke, it would not have entered into the Addenbrooke Subscription Agreement. 65. The failure or omission of Duncan to disclose the matters referred to above and in paragraphs 51 to 131 of the SASOC constituted misleading and deceptive conduct within the meaning of s12DA of the ASIC Act. 139 I have previously observed that there was no pleaded basis for the assertion that any non-disclosure constituted misleading or deceptive conduct. In oral opening at ts 42 to ts 43, counsel addressed the proposition that the real purpose of the capital raising was to finance the buy out of the Obeid family. His Honour suggested that the representations as to the purpose of reducing third party debt and creditors may have been literally true. I understand his Honour to have been referring to the fact that by November 2010, Cascade probably was, pursuant to its dealings with the Obeid family and related entities, indebted to one or more of them for the price of buying out the Obeid family's interest. Whilst such debts may not have been "third party" debts, they were owed to creditors. There seems also to have been a suggestion that CMG had supplied consultancy services to Cascade. Counsel agreed with his Honour's proposition. His Honour then said at ts 43, ll 15-16, "So your case is that there was something else that should have been said". At ts 43, ll 18-35, counsel said: Yes. I am not sure that I do accept that they were literally true because - well, it depends upon what complexion you put on the transaction but perhaps let me just say that what was unsaid is probably more important than what was said. But what was said was not, in our respectful submission, sufficient to characterise the transactions which the money was to be applied towards. I also understand that there is a school of thought amongst the respondents, as emanates from their submissions and from their - from their submissions and their pleadings to the effect that by virtue of the transactions which had already taken place the Obeids were no longer involved and so therefore we didn't have to worry about that. But the whole purpose of the transaction, as we would see it, was to get the Obeids out of there because of the - I don't want to use colourful language but because of their reputation and their associations, and one can't get rid of that smell simply by entering into a paper transaction to get them out, but then use these investors to obtain the money to pay them out. And in actual fact, on one view of the matter - in fact, we would say the only view of the matter - they're still in there because they still hold the CMG shares which were issued to CMG for the purposes of this transaction, so they're still in Cascade ... 140 Of course, the expectation, as pleaded in the statement of claim, was that WEC would buy the shares in Cascade from CMG so that the Obeid family's involvement would then have ceased. In any event, if the real concern was to allow Cascade to deal directly with WEC, unencumbered by difficulties associated with the legal nature of the Obeid family's interest, it would have been correct to say that for such purpose, the Obeid family had been removed from the Mt Penny project. 141 At ts 44, ll 9-45 the following exchange occurred: [COUNSEL]: Well, I would seek to say that it's not literally true but whatever be the situation, even if your Honour were to be of the view it was literally true, we say that what was not said and what was actually represented as being the nature of third party indebtedness at the meeting was such as to mislead us. HIS HONOUR: So it is not a - it is not a silence case. It's a case that, in all the circumstances, because of what the underlying facts were and what was said, you say something else should have been said. [COUNSEL]: Yes, your Honour. HIS HONOUR: In an unqualified way --- [COUNSEL]: Yes. HIS HONOUR: --- as it was said, is misleading, you say. [COUNSEL]: Silence is an aspect of the case because of silence in relation to some of the circumstances which give rise to the misleading nature --- HIS HONOUR: No. It's not a silence case, is it? [COUNSEL]: --- what was in fact --- HIS HONOUR: Because a silence case is when you say nothing. Here, people have said quite a lot but --- [COUNSEL]: Yes, they have. Yes. HIS HONOUR: --- just nothing directed to the matter that's of interest to you. [COUNSEL]: I've never divided silence cases up into those where you say nothing and those where you do say something but --- HIS HONOUR: Well, it's a question of qualification. [COUNSEL]: Yes. 142 This exchange effectively addresses the representations as to the purpose of the capital raising. His Honour found that Duncan made a representation concerning the purpose to which the funds were to be applied, which representation had the capacity to be misleading. 143 At ts 45, ll 6-26 the following exchange appears: HIS HONOUR: Now, the fact that you say nothing to qualify it means that what you have said is misleading. [COUNSEL]: Yes, your Honour. HIS HONOUR: It's not a silence case, though, is it? [COUNSEL]: Well, for example, they didn't tell us about the Obeids. Is that a silence case or is that --- HIS HONOUR: Well, I don't know. I mean --- [COUNSEL]: They didn't tell us --- HIS HONOUR: You may wish to say that whatever was said was irrelevant in the sense that there was a whole lot of other things that should have been said and nothing was said about those, and nothing that was said didn't carry with it any need to qualify what was said. [COUNSEL]: Exactly, your Honour. Yes. I don't think your Honour and I are apart on this. I think we're substantially .... as to how to characterise the case. 144 Notwithstanding the appearance of agreement, it was inherent in his Honour's observations that Addenbrooke would have to prove that "other things ... should have been said ...", or that the things which were said created a need for qualification. With the exception of non-disclosure of the purpose to which the funds raised in the capital raising were to be applied, Addenbrooke seems not to have discharged any such obligation. 145 At ts 45, ll 35-43 counsel addressed the question of damages, indicating that in respect of "proportional liability", Addenbrooke relied upon the fact that representations were made fraudulently or intentionally. It seems that the respondents proposed to rely upon s 1041M of the Corporations Act and/or s 35 of the Civil Liability Act 2002 (NSW) in answer to a claim that any award of damages should be apportioned. In that context, counsel for Addenbrooke said at ts 46, ll 17-26: [COUNSEL]: Yes. And they recognise, we would say, the shareholders and directors of this company, that, if, in fact, you had this association with the Obeids, they were never going to be able to do that, and so this is - what they were seeking to do was to terminate that involvement, never let it see the light of day, and then present Cascade as a clean instrument, if I could put it that way, to the WEC shareholders, which included themselves, if I may say so, and each collect $60 million as they pass go. That was basically the plan. And we would say that once it became known that the Obeids were involved, it was perfectly obvious that the shares were going to have that value, because no one was going to buy these shares unless they had a clean bill of health, and that's recognised by, amongst others, Mr Duncan. That's something I will take your Honour to in due course. 146 Once again, this passage is an invitation to draw inferences rather than a statement of fact. Addenbrooke certainly suggested that Cascade's purpose was to remove the Obeid family from involvement in the project and to conceal such involvement. However the question was whether Cascade, its directors and Duncan had decided to do so because they were concerned that disclosure of such involvement would have jeopardized the WEC deal and/or Cascade's business interests, including its capacity to retain and exploit EL7406. His Honour effectively held that he was not satisfied as to the reason for such concern, describing it as a matter of "speculation". That factual finding may be fatal to Addenbrooke's attempt to assert that his Honour did not deal with any case based on non-disclosure of the reasons for the decision to remove the Obeid family from the Mt Penny development. Addenbrooke submits that his Honour erred in so concluding, asserting that there was no evidence in support of that conclusion. In my view, his Honour drew that conclusion from the evidence which was before him. 147 On appeal, Addenbrooke has not demonstrated any error in this regard. As I have said, the documentary evidence suggested that because of the unwieldy nature of the Obeid family's interest, the WEC transaction would have been facilitated by the extinguishment of that interest. It was for his Honour to consider whether, on the totality of the evidence, he should infer any particular explanation for the alleged concern about the Obeid family's involvement in the project. In the end, he was not satisfied to draw the inference sought by Addenbrooke. At least one difficulty with Addenbrooke's case is that it seems to assume an unpleaded fraudulent intention in order to prove misleading or deceptive conduct. 148 At para 17 of its written submissions on appeal, Addenbrooke seems to submit that where an asserted inference is uncontradicted by evidence from the opposing side, the decision in Jones v Dunkel (1959) 101 CLR 298 requires that such inference be drawn. That proposition goes too far. The decision in Jones v Dunkel concerned the adequacy of a direction to a civil jury as to the use which it could make of the fact that a defendant had not given evidence. Of course, the decision does not apply only to jury trials. A trial judge must certainly be aware of, and take into account the fact that a defendant has not given evidence. However it is important to note that in Jones v Dunkel, at p 319, Windeyer J stressed that the failure to give evidence would be relevant to the drawing of a particular inference only if such inference was available on the evidence. There is no reason to believe that his Honour failed properly to consider the available inferences in light of Duncan's failure to give evidence. In any event, as I have said, Denis O'Neil did not complain of any non-disclosure to him of knowledge or opinions held by Cascade, its directors or Duncan.

Addenbrooke's closing submissions 149 In its written submissions at paras 1-11, Addenbrooke made a number of general forensic submissions. At para 12 it identified its claims against Duncan as follows: (a) a claim for misleading or deceptive conduct in relation to financial services in respect of his conduct as alleged in paras 29-48 of the statement of claim; (b) a claim for non-disclosure amounting to misleading or deceptive conduct as set out in paras 51-133 of the statement of claim; (c) a claim that he was knowingly involved in misleading or deceptive conduct by Cascade; (d) a claim of unconscionable conduct; (e) a claim that he was knowingly involved in unconscionable conduct by Cascade; and (f) a claim of knowing involvement in a breach or breaches of trust by Cascade and/or CMG as set out in paras 144-145 of the statement of claim. 150 At paras 15-26 Addenbrooke addressed Duncan's knowledge, which knowledge was said to be central to the claims made against him. It submitted that: Duncan knew that Cascade was involved with members of the Obeid family in a joint venture concerning the Mt Penny project; Duncan's alleged assumption, that the Obeid family's interest in Cascade had been terminated was without evidentiary foundations and should be rejected; Duncan was aware of the purpose of the capital raising and how the funds raised were to be deployed; Duncan was aware that weeks prior to the capital raising, shares in Cascade were issued to CMG, a company controlled by Poole; and Duncan was aware of the Obeid family's interest in the land within the boundaries of EL7406. 151 Addenbrooke did not allege in paras 15-26, that Duncan believed that the Obeid family's involvement would jeopardize the proposed WEC deal, Cascade's other business interests or its holding of EL7406. It may be that Addenbrooke wished to assert that: the Obeid family was corruptly involved in the grant to Cascade of EL7406; Duncan knew of, suspected, or should have known or suspected that such corruption had occurred; and that such knowledge or suspicion led him to be concerned about the effect of the Obeid family's involvement in the Mt Penny project. 152 The difficulty with any such argument is that the only aspect pleaded is that there was some such concern. There was no plea of corruption or suspicion of corruption, or that Duncan knew or suspected such corruption, or should have known or suspected it. At para 26 of its closing submissions, Addenbrooke asserted that there was a basis for inferring corruption associated with the grant of EL7406, and that Duncan was aware of it. However this submission was abandoned in oral argument. There seems to be little basis, in paras 15-26, for inferring that Duncan considered that the involvement of the Obeid family posed a threat to the proposed WEC deal or to Cascade's other interests, including its holding of EL7406. 153 At paras 27-40 Addenbrooke summarized the evidence from Ned O'Neil and Smith, concerning the meeting on 19 November 2010, submitting that Ned O'Neil's evidence established the representations pleaded as against Duncan. Addenbrooke also submitted that Smith's evidence supported Ned O'Neil's account. The primary Judge rejected both propositions. His Honour concluded that whilst Ned O'Neil had stressed that Duncan had said that the funds raised would be spent on infrastructure, Smith understood that the funds were to go towards paying consultancy fees already incurred, or to be incurred. 154 I have previously referred to para 41 of Addenbrooke's closing submissions. It is the clearest statement of Addenbrooke's non-disclosure case as presented at trial. Addenbrooke submitted, under the heading "Matters not disclosed": At no stage during the 19 November 2010 meeting, or at any point prior to the applicant participating in the capital raising, did Duncan disclose to [Addenbrooke]: (a) The fact that Cascade had entered into a joint venture with an entity controlled by the Obeid family in respect of the Mount Penny project; (b) The fact that the Capital Raising was being conducted to raise monies for the purpose of making a payment to the Obeid family as part of an agreement to purchase their interest in the Mount Penny project; (c) The fact that CMG was a creditor of Cascade and the circumstances in which Cascade had come to owe CMG an amount of approximately $32 million; (d) The fact that the proceeds of the Capital Raising were to be transferred to CMG, an entity controlled by Poole (then a director of Cascade) in what would have been a related party transaction; (e) The fact that CMG, in receiving the proceeds of the Capital Raising, would effectively be acting as an intermediary for the Obeid family; (f) The fact that weeks prior to the Capital Raising, a substantial portion of Cascade shares was issued to CMG (a related party) for $7.17; (g) The fact that the Capital Raising was not being carried out for the purpose of mentioning the then current pari passu holdings of the shareholders. (The word "mentioning" in para (g) probably should be the word "maintaining".) 155 Obviously enough, there is no reference to non-disclosure of any concerns held by Cascade, its directors or Duncan, about the possibly adverse effect of disclosure of the Obeid family's interest upon the proposed WEC deal, or upon Cascade's business interests, including its holding of EL7406. Only the matters identified in subparas 41(a) and 41(b) were identified by Denis O'Neil as factors which, had he known of them, would have affected his decision. 156 Paragraphs 42-44 make forensic points which are repeated in the submissions on appeal. 157 Paragraphs 45-52 deal with misleading representations concerning future matters, a subject with which I shall deal separately. Those paragraphs relate to the case based on Duncan's express representations, as do paras 53-79. Paragraphs 80-82 deal with half-truths, apparently also relating to the pleaded express representation case. Paragraph 83 deals with Duncan's alleged accessorial liability for Cascade's conduct, with which matter I shall deal separately. Paragraphs 84-91 deal with the non-disclosure case. The brevity of the submission is surprising, given its relative complexity and its importance, as asserted on appeal. 158 At para 84 Addenbrooke submitted that: Non-disclosure can contravene s 12DA of the ASIC Act if it has the effect that the conduct of the relevant person was misleading or deceptive or likely to mislead or deceive, judged in all the circumstances. The circumstances include matters such as the materiality of the information and the relationship between the parties: Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at [18], [91]; see also ASIC v PFS Business Development Group Pty Ltd (2006) 57 ACSR 553; Fraser v NRMA Holdings Ltd (1995) 55 FCR 452. 159 Above, I have discussed both the decision in Miller and that in Fraser. If the reference to circumstances such as the materiality of the information, or the relationship between the parties is meant to suggest that such circumstances are primary considerations in determining whether non-disclosure amounts to misleading or deceptive conduct, then the reference is, itself, misleading. I have pointed out the obligation upon Addenbrooke to identify, "what it is that the impugned statements conveyed to their intended audience". In the non-disclosure case against Duncan, Addenbrooke had to identify the way in which each relevant non-disclosure by itself, or in conjunction with other matters, constituted an overall misleading or deceptive effect. I have previously indicated that as far as I can see, it failed to do so, save to the extent that the undisclosed purpose of the capital raising demonstrated the falsity of Duncan's express representation as to purpose. 160 At para 85 of the submissions, Addenbrooke referred to paras 36-67 of the opening outline, which paragraphs simply identified the matters dealt with in paras 51-133 of the statement of claim. At para 86 Addenbrooke submitted that: While the evidence does not establish that Duncan had knowledge of each and every material fact set out in paragraphs 51 to 126 of the [statement of claim], Duncan was aware of sufficient of those material facts (having regard to the matters traversed on the question of Duncan's knowledge at paragraphs 15 to 24(b) above) to ground findings of not inadvertent non-disclosure ... and that Duncan's non-disclosure was inconsistent with the obligation he owed to the Applicant, including obligations in good faith to disclose all matters relevant to the decision whether to enter into the Addenbrooke Subscription Agreement. 161 I again point out that at paras 15-26, there is no allegation that Duncan had concerns that the Obeid family's involvement might threaten the proposed WEC deal or otherwise prejudice Cascade's interests. The reference in para 86 to Duncan's obligations to Addenbrooke is unexplained. It seems to be at the heart of the non-disclosure case, but there is no explanation as to the source of the obligation, or as to why Addenbrooke should have expected disclosure of such matters; in other words, as to why the non-disclosure was misleading or deceptive. 162 At para 87 counsel referred to the allegation that Duncan was involved in Cascade's contravention of s 12DA. As I have said, I shall deal separately with that matter. 163 Paragraphs 88-91 reflect some of the shortcomings in Addenbrooke's pleading to which shortcomings I have previously referred. First, Addenbrooke seems to assume that Duncan should be taken to have known about the ongoing affairs of Cascade. Such an assumption may have been justifiable, were he still a director with an obligation to be informed about the affairs of the company. However, for present purposes, such knowledge had to be proven by reference to the evidence. As to "excuse", it was not for Duncan to advance an excuse for non-disclosure. It was for Addenbrooke to demonstrate that there had been misleading or deceptive conduct. 164 On appeal and, perhaps, at the end of its oral closing submissions and submissions in reply at trial, Addenbrooke asserted that it relied on non-disclosure of the concerns held by Cascade, its directors and Duncan as to the risk that disclosure of the Obeid family's involvement might jeopardize the proposed WEC deal and/or Cascade's commercial interests. As I have said, such non-disclosure was not identified in para 41 of the outline of closing submissions. Nor was it expressly identified in the statement of claim as a matter which, if disclosed, would have led to Addenbrooke's not investing. However the general allegations in paras 130-132 had that effect. Given the importance which Addenbrooke now attributes to this aspect of the case, one might have expected an express pleading to that effect. Instead, it was merely part of a long, and to some extent, irrelevant narrative. The absence of any reference to that matter in para 41 of the closing submissions also suggests that the matter was part of the overall narrative, rather than a case, separate from that based on non-disclosure of the purpose of paying out the Obeid family. The absence of any reference to such matter in the knowledge attributed to Duncan in paras 15-26 also suggests that Addenbrooke was not, in the closing submissions, relying on non-disclosure of it. It is true that in the closing words of para 88 of those submissions, there is a passing reference to a concern that disclosure of the Obeid family's interest could affect the WEC deal from which Duncan and others expected to derive considerable benefit. This consideration is said to be the motive for the removal of the Obeid family. In any event, Denis O'Neil did not identify the matter as one which, had he known of it, would have affected his decision. 165 As to paragraph 89 of the closing submissions, I have already said something about Jones v Dunkel. Whilst Duncan's failure to give evidence might properly have been taken into account in drawing adverse inferences from other evidence, one might also have had to take into account the unsatisfactory pleading of the case against him, and the rather speculative nature of Addenbrooke's evidence. As I have said the decision in Jones v Dunkel does not lead to the proposition that any possible available inference must be drawn against a party who does not give evidence. Such failure may well lead a court to draw an inference in circumstances in which it might not otherwise have done so, but it does not relieve the other side of its burden of proof. 166 At paras 92-102 of its closing submissions, Addenbrooke dealt with "reliance". It is curious that Addenbrooke should have used that term, given the enthusiasm with which, on appeal, it has embraced the proposition that the term is inappropriate in connection with a non-disclosure case, and attempted to advance alternative bases for proving causation. The term, where used in Addenbrooke's submissions, clearly includes an assertion that had the undisclosed matters been disclosed, Addenbrooke would not have entered into the Agreement. It may be a somewhat infelicitous use of the word "reliance", but for present purposes, the meaning is clear enough. 167 I need only make one further comment concerning paras 98-100, which paragraphs deal with non-disclosure of CMG's involvement in the transaction, by which the Obeid's involvement was terminated. As far as I can see, the complaint is simply that disclosure of the proposed payment to CMG would have been akin to disclosure of a payment to the Obeid family, and would therefore have led to disclosure of that matter. In any event Denis O'Neil apparently attached no importance to his not having been told of CMG's involvement. 168 At para 102, Addenbrooke focussed upon the evidence of its three witnesses, concerning the representations contained in the representational document, and those made at the meeting of 19 November 2010. I have dealt with this aspect of the case. Paragraphs 103-105 deal with the apparent inconsistencies between the representational document and Duncan's representations as pleaded. I have previously suggested that such inconsistency may be of some importance, although perhaps not for the purposes of this appeal. 169 Prior to the commencement of Addenbrooke's oral closing submissions at trial, the primary Judge sought to clarify a number of matters. At ts 526, ll 29-39, counsel made it clear that despite any suggestion to the contrary in the written submissions, Addenbrooke did not seek to establish that EL7406 was obtained corruptly. It follows that no question arose as to Duncan's knowledge of any such corruption. Nonetheless, at ts 526, ll 41-47 and at ts 527, ll 1-6 counsel suggested that there was evidence which might have led in that direction. One might have thought that if there was no basis for concluding that the Obeid family was corruptly involved in the acquisition by Cascade of EL7406, there could be no basis for the assertion that Cascade, its directors and Duncan had concerns that the Obeid family's involvement had the capacity to jeopardize the WEC deal or Cascade's business interests including its holding of EL7406. 170 At ts 527, l 8 to ts 528, l 36, the following passage appears: HIS HONOUR: Well, then, it's very important to focus on not only what Mr Duncan and what Mr Gray knew as to the involvement of the - I will call them the Obeids, because everyone does, but people bearing that name. [COUNSEL]: Yes. HIS HONOUR: Probably, also, is it not important to understand and perhaps make findings about what others in the Cascade camp knew, if - for example, McGuigan, Atkinson, Poole? [COUNSEL]: It's important in this regard, your Honour, because they are all obviously involved in this in conjunction with each other; one can see that clearly through the train of emails. And the question then is, in particular, in Mr Duncan's case, is it then to be said that he was completely immunised from that knowledge that they had? HIS HONOUR: Well, that's going to be an important question. So, in terms of a framework for looking at all of this, do I - this may not be in the right order. But I have to make findings about what the O'Neils were told. [COUNSEL]: Yes, your Honour. HIS HONOUR: Which is principally the meeting. And I have to make findings as to what the true position was, in a relevant sense, in respect of what they were told. I then have to make findings as to what, at each of those times, Mr Duncan or Mr Gray, principally, although, I think, others pertinent knew. Do I go further than that and look at what they might have suspected or believed, or is it a much cleaner and simpler case than that? [COUNSEL]: Particularly, I think, in relation to ought to have known, which is a facet of both the negligence claim and the proposed amended claim, as well as the reasonable belief claim based on the allegations that certain representations are in respect of future matters - yes. One has to go to what they ought to have done. Yes. HIS HONOUR: All right. Well, then - and what it is they knew, or if - you put it, ought to have known, concerns the ownership of Cherrydale, which everyone seems to have known, and --- [COUNSEL]: Not the O'Neils, even. Not at the relevant time. HIS HONOUR: Well, we can talk about that. But that's one issue, and the other one is - I put it as broadly as this: that the Obeids had a commercial interest in the venture either by way of a shareholding in Cascade or a joint venture interest or some other commercial interest. [COUNSEL]: Yes. HIS HONOUR: So the question, then, is having regard to the other matters we have just looked at, did Mr Duncan and Mr Gray pass on all that they knew, or, as you would say, ought to have known. And, assuming they didn't, was there any obligation - and I'm not trying to introduce the concept of duty there; I'm looking at the facts and matters and circumstances - to say more? [COUNSEL]: Yes, your Honour. HIS HONOUR: Because this may be a case - I don't know yet - that there is a bit of an arm's length dealing going on here which doesn't give rise to that type of thinking. Then we look at whether it's silence or failure to qualify; that probably doesn't matter very much assuming that there's something there that needs to be considered. And then, just to pause and go back for a minute, it is critical, isn't it, that I make very careful findings about what was known about the Obeids generally as at the critical date by not only Duncan, Gray, and possibly the other Cascade directors, but by your clients as well? [COUNSEL]: Yes, your Honour. HIS HONOUR: And - because your clients, I think, have pinned their flag to the mast on the basis that, in effect, any mention of the word Obeid in connection with the commercial side of the venture was enough to scare them off. [COUNSEL]: And that seems to have been the evidence of Mr Gray, too, as your Honour will recall it because in questions and answers from the bench, just simply the fact that he was a politician was enough to concern Mr Gray because he knew that there was an election coming up and he knew that there would be scrutiny in relation these matters, and he knew that were there to be some scrutiny, there may be a very significant risk that a mining licence would not be granted, so that's --- 171 Once again, the primary Judge and counsel for Addenbrooke seem to have been largely agreed as to the case to be decided, and that it focussed on the involvement of the Obeid family in the Mt Penny project. However subsequent events suggest that there remained disagreement in one area. Although there was agreement that his Honour should make findings as to Duncan's knowledge, and whether such knowledge was provided to Addenbrooke, his Honour went further. He indicated that, in effect, he would have to consider whether that knowledge should have been passed on to Addenbrooke. See ts 528, ll 10-18. The reference to "arm's length dealing" is to the proposition concerning the "traditional secretiveness and obliquity of the bargaining process" referred to in Miller. Although counsel for Addenbrooke agreed with his Honour's proposition, Addenbrooke had not addressed, and did not address the basis upon which it claimed that non-disclosure amounted to misleading or deceptive conduct, save insofar as concerned the purpose to which the funds were to be put. 172 At ts 530, ll 29-30, his Honour expressly asked whether there was any question concerning damages other than the "no transaction" case. Counsel replied at ts 530, l 32 to ts 531, l 38: [COUNSEL]: Can I just take that question on advice --- HIS HONOUR: Yes. [COUNSEL]: --- your Honour? But essentially I think the evidence is that if we had known these things, we would not have made that investment. HIS HONOUR: Yes. Which things, though. That's what I'm interested in. [COUNSEL]: Well, any of them, I think, your Honour, but essentially it's - I mean, obviously, in any case like this, the court is looking at the circumstances and hypothetically looking backwards, and one - is very much a judgmental question in any case of reliance upon --- HIS HONOUR: Of course, but this one is so heavily, heavily overlain with hindsight. It's quite important that I, at least - and, I think, everybody else - tries to look at things as carefully as we can by having regard to what was known at the time. [COUNSEL]: Yes. HIS HONOUR: According to the evidence, mind you. I mean, there may well be a whole raft of other newspaper articles floating around which are not in evidence. I don't know. [COUNSEL]: That's right, your Honour. Yes. To us, the clearest barometer which establishes a means of knowledge - if I can put it that way - as to how reasonable people would have reacted at the time is how the actual directors of the company - that is, of Cascade and Mr Duncan - behaved at the time once it became public, into their knowledge, that the Obeids had an interest. Because once they - once that had come out, they did everything in our power - they did everything in their power to get them out of there. And we would say that the evidence does clearly establish that Mr Duncan and the other directors of Cascade knew in June of 2009 that the persons whom they were letting into the fold were the Obeids. There's no doubt about that, in our respectful submission. So one cannot accept the case sought to be put by Mr Duncan without evidence and in submission without the benefit of any evidence to support it, that he only --- HIS HONOUR: Yes. You --- [COUNSEL]: --- only knew about their involvement in the middle of 2010. HIS HONOUR: You focus on that, and that's fair enough. The way it's being put now, if not before, is that he did know about their involvement but he was of the belief - brackets, reasonably so, brackets - that by the time he was talking to your clients they were well and truly gone. Now, that's of course to be tested against what's there and what isn't there. But that's his case now, isn't it? [COUNSEL]: Well, it's like a real estate transaction, isn't it, your Honour. You need the purchaser's money to get rid of the vendor, and the vendor is not even yet out of the house. I think it's - and, in any event, they're still there because Mr Chalabian is now the director of CMG and it owns the shares in Cascade which were ..... CMG shares in Cascade. 173 I make three observations concerning this passage. First, it seems clear that the case was conducted on the "no transaction basis". Second, counsel's response to his Honour's enquiry as to the matters which ought to have been disclosed was that Addenbrooke relied on all of them, that is all of the matters pleaded in paras 51-135. Such a response was at best unhelpful and unlikely to be correct. As those paragraphs plead various matters and combinations of matters, it is surprising that at the end of the trial, Addenbrooke still declined to identify the facts or combination of facts upon which it relied. Third, it seems that the case against Duncan was dependent upon his knowledge and, in some way, upon how "reasonable people" would have reacted to knowledge that the Obeid family was interested in the Mt Penny project. The role of "reasonable people" in this case is not clear. As far as I can see, the expression does not appear in the statement of claim as it concerns misleading or deceptive conduct. It may be that it goes to either misleading effect or "reliance". I have previously expressed the view that where misleading conduct is directed towards a particular person who gives evidence as to his or her decision-making process, the likely effect upon classes of persons is not relevant. Further, it is difficult to know how "reasonable people" would react to the various facts, purposes or combinations thereof as pleaded in the statement of claim. 174 At ts 566, after a lengthy analysis of the process by which Cascade and Buffalo entered into the Mt Penny joint venture, counsel turned to the removal of the Obeid family from the project. At ts 568-572, counsel for Addenbrooke said much about Cascade's aim (and that of its directors and Duncan) being to exclude the Obeid family from the Mt Penny project, and to conceal the fact that they had ever been involved in it. Much of this submission is speculation. Addenbrooke points to three newspaper articles concerning possible exploration and mining in the Mt Penny area and the possible involvement of the Obeid family. The third of these articles appeared on 20 May 2010. 175 At ts 568, l 43 to ts 569, l 17 Counsel said, concerning the third article: There was - and, your Honour, the evidence, as to the effect it has had in relation to the joint venture is to be found in the email at 1552 of 7 July 2010, where James McGuigan says to Richard Poole: Cascade is all sorted for the next few weeks but I am on email for everything. August is going to be a busy month. John and Trav are meeting with the joint venture guys tomorrow. However, I hold little hope for their negotiation. Now, we would ask your Honour to infer that the joint venture guys referred to there are the Obeid and Brooke interests, and that they were seeking to negotiate an exit strategy of some sort, and that Mr Duncan was a party to those negotiations, or at the very least had knowledge of that, because he had arranged to have a meeting with them. And then from there, one gets to the undated document at 1567, which your Honour will see, and I took you to this in opening as well, but it's to eliminate the unincorporated joint venture. So that Cascade Coal is controlled within known parameters and can be presented in this manner to any investor or acquirer without the complication of disclosing any joint venture agreement. And then they set out the desired outcome, the preference, and how, and when, and who. And it's the very last paragraph on that page which, in our respectful submission, shows what they proposed to do and how they proposed to do it, and, in fact, it is a road map for what in actual fact happened. 176 Addenbrooke seems to be submitting that the article of 20 May 2010 in some way prompted action taken on 7 July 2010 and a proposed meeting with the "JV guys" who probably were, as Addenbrooke submits, representatives of the Obeid family. However the delay of almost seven weeks makes it somewhat difficult to infer any link between the article and the conduct, particularly as the relevant transactions were not completed until late October. Addenbrooke then submits that a further consequence was the subsequent proposal contained in the documents referred to by the primary Judge at [169]-[171], which documents his Honour treated as having been generated in August 2010. The other difficulty with Addenbrooke's submission that the proposal was prompted by the press article in May 2010, is that its terms are quite consistent with a desire to remove the Obeid family in order to facilitate the deal with WEC, unencumbered by the difficulties posed by the Obeid family's largely contractual interest. His Honour accepted that those responsible for the preparation of the documents had as much in mind. See [410]. 177 A few other extracts from Addenbrooke's oral submissions may be relevant. They are: At ts 571, ll 7-13: [COUNSEL]: Exactly. That process continued. And you can then see, if you go back to our written submissions, how they sought to go about achieving that objective, your Honour. So if your Honour goes to --- HIS HONOUR: Achieving what objective? [COUNSEL]: Concealment and extraction of the Obeids from the joint venture. At ts 572, l 45 to ts 573, l 7: [COUNSEL]: So essentially what that shows, and what that bundle of documents shows, is that the capital raising was an integral part of a plan to get the Obeids out. So in other words, unless the capital raising was successful, you could not pay the termination price under the March termination agreement and thereby secure the exit of the Obeids. So if Mr Duncan's case is, as announced by his counsel to this court, that in some way he thought that at some indefinite time, Messrs Poole and McGuigan had managed to extricate the Obeids from this company prior to the capital raising, well that simply cannot be true because he knew what - and the court would infer that he knew what is contained in these documents which shows that he knew - in order to get them out, the capital raising had to be successful. At ts 589, l 12 to ts 590, l 18: [COUNSEL]: Yes. HIS HONOUR: So I'm left with the impression that, for some reason which I can't identify, Mr Ned O'Neil apparently had this recollection. [COUNSEL]: Now, that was at a time - one has to look at it - when there had been considerable controversy about this matter including ICAC, and he was obviously trying to search back his recollection, say, "Well, when did I first hear about it?". And that is the issue. But when you look at that transcript, it's clear, in our respectful submission, that when he reflected upon the matter, he was in some way concertinaing a recollection which was subsequent to the meeting of 19 November and subsequent to 26 November, and to some recollection during that period. And that is what the human mind can do. And that's how one - one must look at it. And what if, in fact, he had that recollection or that knowledge? What does one do with that then? One has to look at the matter and say: look at the conduct of these respondents in these proceedings. There was an interest which the Obeid family had in - 25 per cent interest in the mining licence which had been granted by the New South Wales government in favour of Mr Obeid's family who was a sitting parliamentarian. So far as that was concerned, they engaged in a series of transactions which were designed to disguise the fact that this had ever happened so that they would not have to disclose that to WEC and they would not have to publically disclose that, and they engaged in a capital raising for the purpose of doing it. What would disclosure in circumstances such as this - looking at it even on an arm's length basis - would be. Well, look, we've got a parliamentarian who has got a 25 per cent interest in the mine. We're very concerned about that and we've been very concerned about it since early January because there have been these newspaper articles which have given breath to the fact that he may not only have an interest in the properties but he has got an interest in the mines. If he has an interest in the mines, well, we're very, very concerned that WEC may not wish to take us over and, what's more, the licence is only for five years and we may not be able to get a mining licence. So when you come here and invest your $8 million, I just want you to understand that these are the sort of risks which you're about to undertake. And that's really what they needed to be told, and they weren't told that because what was being done here was a fraud. It was a fraud to conceal the real purpose of the capital raising. And even if there was that knowledge or some disclosure of that matter, that was by no means enough. And it certainly wasn't sufficient to put Addenbrooke off the track. And so, whether one looks at it in terms of reliance, which will be the relevant question in relation to the misleading and deceptive conduct claims or in relation to the negligence claim, or if one looks at it in terms of unconscionability, which is a relevant issue in relation to the fraudulent undertaking - fraudulent scheme, so it affects the question of unconscionability because I don't think reliance really enters into that equation. It's a matter which - we would encourage your Honour to say, no, it wasn't discussed; Mr O'Neil was mistaken; the Cascade parties deliberately set about not disclosing the true nature of this transaction to the potential investors in the capital raising, and that the Southern Cross and Mr Gray, at the very least, didn't do enough to try and find out what was going on and made representations which they couldn't have reasonably believed to be - or had a reasonable basis for believing. 178 In reading this passage, one must keep in mind that counsel for Addenbrooke was expressly addressing the fact that Ned O'Neil had conceded the possibility that the Obeid family's involvement may have been mentioned at the 19 November meeting. Counsel seems to have been submitting that against the whole range of conduct of which there was evidence, it was no answer to say that the Obeid family might have been mentioned at the meeting on 19 November. The passage should not be read as identifying any or each of the various pleaded facts as being, by itself, a basis for a separate cause of action. The passage came very late in Addenbrooke's oral closing submissions. The submission seems to go well beyond anything previously said about the alleged non-disclosures. Again I note that Denis O'Neil identified only a very narrow range of undisclosed information which, had it been disclosed, would have affected his decision. 179 Similar comments apply to the following passage at ts 597, ll 40-46 (concerning the issue of shares to CMG at a nominal price), where counsel for Addenbrooke said: But if you wanted to be entirely upfront about this matter, there was nothing to stop Cascade from simply buying 25 per cent of the shares for a price which they agreed ..... interest. The way in which a transaction has been structured is of itself redolent with secrecy and concealment and dishonesty. But that matter of itself, regardless of anything else, in our respectful submission, is a matter which ought to have been disclosed, and wasn't disclosed. And the evidence is that that of itself would have been sufficient to disincentive my client. None of that evidence, in terms of reliance, ... . 180 As far as I can see payment for the shares issued to CMG was effected by the Obeid family's relinquishment of its interests in the Mt Penny joint venture and in the three parcels. It may well be that the use of CMG was designed to conceal the involvement of the Obeid family, but that proposition, of itself, does not seem to take the case any further. Once again, neither the involvement of CMG nor any desire to conceal the Obeid family's involvement in the Mt Penny project was a matter which Denis O'Neil claimed as being likely to have affected his decision, had he been aware of such matters. 181 At ts 599, l 4 to ts 600, l 45: HIS HONOUR: But the issue for me in this area, which you call in reliance, is really - if your client, and for this purpose I will talk of Denis O'Neil for the moment --- [COUNSEL]: Yes. HIS HONOUR: --- had been told that - I will call them the Obeids, but - the Obeid interests had from the start, back, a year before, procured a commercial interest in the venture, and also stood to gain from the ramping up of the price to be paid for the land to the true extent, which in crude terms is 25 million coming from the new investors and 7 from the existing ones. The real question for me is to decide whether, if Denis O'Neil had been told all of that, he would still have gone ahead in circumstances where there was very good chance that the White transaction would go ahead at the time he invested, and therefore, despite the fact that there were people associated with this who, on some of the evidence, people might say they didn't want to have a bar of - nonetheless, he was in and out, really, and he would end up with shares in White Energy as - in the longer term, or shorter term if he chose to sell them. But the 8 million was going to come back --- [COUNSEL]: Yes. HIS HONOUR: --- pretty quickly if the White transaction went ahead. And the fact that these other people were going to take a very significant sum on the way through, on one view of things, wouldn't have bothered him. [COUNSEL]: Well --- HIS HONOUR: Because, I mean, how do you - how else do you make $2 million in three or four months? [COUNSEL]: Well, you invest in some other shares, I suppose. But --- HIS HONOUR: Well, can you tell me what they are? I would be interested to know. I mean, this was a real cracker of an investment, provided the White deal went ahead. If it didn't, it wasn't so good. [COUNSEL]: No. It was a real cracker of an investment provided it was as it was represented to be and the White deal went ahead. HIS HONOUR: Well, I just - I mean, anyway, the question is, for you --- [COUNSEL]: Yes. I understand that. HIS HONOUR: --- if he had known all there was to know, would he still have invested? [COUNSEL]: Yes. HIS HONOUR: In circumstances where I find that his appreciation of the likely workout of this was that the White deal would go ahead, irrespective of the Obeids' involvement, because it was all going to happen quickly, and who cares, that's the question on your side of things. On the other side of things, of course, they have to explain why it was they went to so much trouble to conceal, and why it was they didn't tell the whole story to someone in Mr O'Neil's position. [COUNSEL]: Yes. HIS HONOUR: Now, there's one part of that can be explained by saying they wanted to keep the independent directors of White in the dark, but it's more than that, probably; isn't it? [COUNSEL]: Well, in our respectful submission, your Honour, it's a recognition by them that if they had in fact disclosed this to potential investors, then that in turn, firstly, would have led to those potential investors going cold on the idea, and secondly would have scrapped the White deal. They couldn't have any disclosure of this matter at any time before the White deal had, in fact, been successful. 182 In this passage counsel was submitting that the involvement of the Obeid family had to be concealed until the WEC deal had been "successful". As I have pointed out, in para 126A of the statement of claim, it was said that the true purpose of the capital raising (ie removal of the Obeid family) could not be disclosed until Addenbrooke had executed the Agreement. More importantly, in this passage his Honour identified matters which eventually formed the basis of his decision. His Honour identified two fundamental questions, namely: whether Denis O'Neil would have allowed Addenbrooke to enter into the Agreement had he known of the Obeid family's involvement, including the amounts to be paid to them, and having particular regard to the large profit which Addenbrooke would make in a very short time if the WEC deal was completed, as Denis O'Neil expected; and why Cascade, its directors and Duncan went to so much trouble to conceal the involvement of the Obeid family and why they did not tell Denis O'Neil the "whole story". 183 Counsel appears to have accepted this summary as a correct assessment of the matters in dispute. Setting aside any question of accessorial liability in connection with Cascade's conduct, Duncan's alleged misleading or deceptive conduct certainly included: his representation at the meeting on 19 November 2010 that the funds raised were to be applied to pay consultancy fees already incurred or to be incurred when he had no reasonable grounds for such representation; and the failure to dispel the misleading effect of that representation. 184 In order to negate the effect of that misrepresentation, Duncan did not necessarily have to tell Addenbrooke that the funds were to be paid to the Obeid family. He needed only to resile from the assertion that they were to be used to pay past and future consultancy fees. As to any other non-disclosure, it was for Addenbrooke to demonstrate that Duncan engaged in misleading or deceptive conduct by not disclosing such matter. He was not a director of Cascade, and was not to be a party to the Agreement. I see no reason why he, as a shareholder, should have disclosed to Addenbrooke his views as to the involvement of the Obeid family and the risks associated with it, or those of Cascade and/or its directors. Addenbrooke seems to submit that by virtue of his knowledge, he should have disclosed such knowledge. That is a difficult proposition to support. It may be that Addenbrooke submits that because Duncan was named in the representational document and spoke at the meeting on 19 November 2010, he incurred some obligation to make full disclosure. However that proposition is also difficult to support. The only other possibility would seem to be accessorial liability for the conduct of Cascade, a matter with which I am not presently concerned. 185 I should note that Duncan's counsel understood that Addenbrooke was asserting that Duncan ought to have disclosed his alleged knowledge that the Obeid family's involvement might prejudice Cascade's holding of the Mt Penny tenement and the WEC transactions. Paragraphs 6 and 7 of Duncan's written closing submissions state: 6. The second aspect of the case against Mr Duncan ("the Failure to Disclose Case"), which cannot realistically be kept separate from the Positive Misrepresentation Case, proceeds upon the premise that as at the time of the Capital Raising, he knew: (a) the precise terms of the transaction, entered into on 5 June 2009, by which Buffalo Resources Pty Ltd ("Buffalo Resources"), a company allegedly controlled by members of the Obeid family, was given a right to a 25 per cent joint venture interest in any mining venture pursued by Cascade at Mount Penny; (b) that those terms included, as consideration for the rights given to Buffalo Resources, the withdrawal by Loyal Coal Pty Ltd ("Loyal Coal") of its bid for the allocation of the Mount Penny exploration licence; (c) that this so-called Obeid involvement in Cascade's mining venture could prejudice that company's retention of the Mount Penny exploration licence and with it, the possibility of Cascade being acquired by White Energy Company Limited ("WEC"); and (d) the various steps by which, and the precise terms on which, the Obeids' joint venture interest was terminated, including the role played by Coal and Mineral Group Pty Ltd ("CMG") in procuring this outcome. 7. It is then said that the failure by Mr Duncan to disclose those matters to Addenbrooke was misleading and deceptive, and that if they had been disclosed, Addenbrooke would not have sought to participate in the Capital Raising. Importantly, it does not seem to be suggested that the Positive Misrepresentations per se had any consequences for the decision to invest. Nonetheless, the case about what was not said can only be analysed in the context of what was in fact said. (Footnotes omitted.) 186 At paras 6 and 7 Duncan submitted that the case based on express representations and that based on non-disclosure were effectively the same case. At paras 96 and 97 of Duncan's closing submissions counsel submitted that: 96. It is unclear even now whether the Failure to Disclose Case involves an allegation of misrepresentation by silence or of an omission to qualify what were otherwise true but misleading statements concerning Cascade and the purposes of the Capital Raising. Whichever be the proper characterisation of this aspect of the claim against Mr Duncan, there appears to be no dispute that: "if the circumstances are such that a person is entitled to believe that a relevant matter affecting him or her would, if it existed, be communicated, then the failure to communicate it may constitute conduct which is misleading or deceptive because the person who ultimately may act to his or her detriment is entitled to infer from the silence that no danger or detriment existed." 97 Of course, this is a case, directed as it is against an individual and not a corporation, in which the scope of that which was required to be disclosed by Mr Duncan should be tested against what he actually knew. Indeed, given that Addenbrooke and Cascade were transacting on an ordinary arm's length basis, it would be anomalous if s 12DA of the ASIC Act were applied so as to impose upon Mr Duncan an obligation to find out that which he did not know and to disclose the results of his enquiries to the O'Neils. As has been said in the context of what was previously s 52 of the Trade Practices Act 1974 (Cth), the statutory prohibition on misleading or deceptive conduct "does not require arm's length negotiations to be completely open or require full disclosure at all times" and alleged contraventions "must be considered in the light of the ordinary incidents of commercial life". (Footnotes omitted.) 187 It may be that the observations at paras 6 and 7 identified the only way to deal with the non-disclosure case, given that Addenbrooke did not seek to demonstrate how it had been misled, other than by reference to the falsity of the representation as to the proposed application of the funds raised in the capital raising. I note that in para 97, Duncan referred to the considerations identified by French CJ and Kiefel J in Miller concerning the disclosure of information in the bargaining process. 188 I should add that in Duncan's closing submissions at para 8 he submitted that if the case was one of fraud, Addenbrooke would bear the burden of proof identified by the High Court in Briginshaw v Briginshaw (1938) 60 CLR 336.

Addenbrooke's submissions in reply 189 Paragraphs 2 and 3 of the written submissions in reply relate to the question of Duncan's involvement in the preparation and distribution of the representational document. Putting aside the question of accessorial liability, and whatever may be the position with respect to the other causes of action, that matter is no part of the pleaded misleading or deceptive conduct case against him. The balance of the matters addressed in paras 1-24 (other than para 22) relate to factual matters with which I am not presently concerned. Many of those matters were, in any event, dealt with by the primary Judge. Paragraph 22 responds to paras 96 and 97 of Duncan's submissions which paragraphs are set out above. In those paragraphs, Duncan made the following points: it remained unclear whether Addenbrooke's non-disclosure case involved an allegation of misrepresentation by silence or an omission to qualify statements, which were otherwise true, but misleading; Duncan did not dispute that if a person was entitled to believe that a relevant matter affecting him or her would, if it existed, be communicated, then the failure to communicate might constitute misleading or deceptive conduct; the scope of Duncan's duty to disclose should be tested against his actual knowledge; the statutory prohibition on misleading or deceptive conduct, "does not require arm's length negotiations to be completely open, or require full disclosure at all times"; and alleged contraventions, "must be considered in the light of the ordinary incidents of commercial life". 190 Addenbrooke's response to this statement of the law was to take the high moral ground, without responding by reference to statutory provisions or the cases. It re-asserted its thesis that non-disclosure of any information which was material or relevant to the decision to invest amounted to misleading or deceptive conduct. As far as I can see, there is no suggestion in the written outline of submissions in reply that Addenbrooke was complaining of non-disclosure of any concerns held by Cascade, its directors or Duncan as to possible adverse effects upon the deal with WEC or otherwise upon Cascade's interests, should the Obeid family's involvement be disclosed. I need not say anything else about the written reply. I turn to Addenbrooke's oral submissions. 191 At ts 783, ll 39-41 counsel for Addenbrooke said: The applicants point to the fact that the case as pleaded and particularised does not seek to establish actual corruption against any of the respondents or knowledge of actual corruption on the part of others. 192 It may be that the reference to the "applicants" should be to the "respondents". Counsel for Addenbrooke did not dispute the correctness of this assertion (as so understood) but nonetheless referred to evidence which, in his view, suggested such corruption in connection with the grant of EL7406, and that Duncan and others may have known about such corruption, or suspected it. As I have pointed out, Addenbrooke had previously abandoned any attempt to establish that matter. The primary Judge questioned the relevance of the submission, observing that as Addenbrooke had not sought to prove corruption, there was no purpose in trying to show that anybody knew of it. 193 At ts 788, ll 1-15 the following passage appears: [COUNSEL] No. It doesn't do that. But what did they have to tell us, as someone coming into this venture for the purposes of taking advantage of the White deal. HIS HONOUR: That's the critical issue. [COUNSEL] Yes. Because we don't plead - and if your Honour looks at our pleadings, particularly out to paragraph 125 and 126, we don't plead that it's not a simple case of if they had told us about the Obeids, we wouldn't have been there. What we say is, look, they had all of these problems, they engaged in these transactions, they engaged in these transactions for the purpose of getting out the Obeids by a subterfuge - it has been referred to as a "shame" by my learned friends but we use other words of some meaning including simulacrum which, if one looks at - through relevant dictionaries, is said to be synonymous with trompe-l'oeil and it's a mistake of the eye. 194 I have previously discussed the effect of paras 125 and 126 of the statement of claim. I have pointed out that the purpose is that identified in para 125. Paragraph 126 pleads the motives leading to the formulation and adoption of the purpose. 195 Addenbrooke seems to be asserting that its non-disclosure case is based upon an overall course of conduct, rather than upon a series of independent incidents. That may well be so, but the proposition highlights the need to identify the alleged misleading or deceptive effect of the overall case. In my view, the overall effect of the case was that Addenbrooke had lost its investment as the result of WEC withdrawing from the proposed deal and/or the passage of the Revocation Act. One might have expected that the case would focus on those matters. A casual reader of the statement of claim would not realize that Addenbrooke expected to make a substantial and quick profit from the sale to WEC of the shares to be issued to it as part of the capital raising. One might have expected that the reasons for WEC's withdrawal would have been central to the case. Even after WEC's withdrawal, Cascade held EL7406, with its associated entitlements. It is Duncan's case, not really contradicted by Addenbrooke, that Cascade continued to be entitled to obtain appropriate mining leases over the area covered by EL7406. That right was ultimately lost as a result of the Revocation Act. One might have expected some examination of the relationship between the conduct of the various respondents and that event. Again, the matter was hardly mentioned. 196 As I have said, Addenbrooke does not assert any misleading or deceptive conduct concerning the likelihood that the proposed agreement with WEC would be consummated, or as to its terms. Nor does Addenbrooke allege that any representations were made concerning the security of Cascade's holding of EL7406. Addenbrooke does not plead that either WEC's withdrawal from the deal, or the enactment of the Revocation Act was brought about by the fact of the Obeid family's involvement in the project. There is no pleading as to why the involvement of the Obeid family should have led to such consequences. Nor is there any allegation that Cascade, its directors or Duncan had in their possession facts which may have led to any concern about Cascade's capacity to exploit EL7406. 197 In those circumstances, it is not surprising that the primary Judge sought to identify Addenbrooke's case by reference to Denis O'Neil's evidence. No other approach was available. 198 At ts 788, l 40 to ts 789, l 13 the following passage occurs: HIS HONOUR: And the best point you have in this area is that whatever it was about the Obeids --- [COUNSEL]: Yes, your Honour. HIS HONOUR: --- are from the article in May, taking into account whatever other articles are in evidence before that, the people running Cascade wanted them out. Ned O'Neil they did it under a series of disguised steps. And so you say that's the best evidence of what it was about the Obeids that might have caused this transaction to collapse. The fact that those people who decided to get them out did it with a disguise. [COUNSEL]: Exactly, your Honour. 199 Addenbrooke seems never to have contemplated, or sought to consider the possibility that there may have been valid reasons for structuring the transactions in a particular way, or that any concealment might have been for valid business reasons. No attempt was made to discredit the possibility, apparently accepted by the primary Judge, that there was a perceived advantage in excluding the Obeid family from the transaction, namely the simplification of the deal to be presented to WEC. In any event, his Honour was not satisfied as to the reasons for any concern about the Obeid family's involvement. Again I point out the absence from para 41 of Addenbrooke's closing submissions, of any reference to the non-disclosure of such concerns. In the end, Addenbrooke's case was fatally flawed by the fact that Denis O'Neil did not say that had he known of the concerns held by Cascade, its directors and Duncan, he would not have invested. 200 At ts 789, l 26 to ts 790, l 31, the following exchange appears: [COUNSEL]: ... Now, rightly or wrongly, the directors of Cascade, Mr Duncan and Cascade itself, formed the view that if Mr Obeid was there, then it would not be possible to proceed ..... WEC transaction and his presence, in respect of a licence, may in some way threaten the licence itself. HIS HONOUR: Well, no. They may have formed the view that in order to ensure that there was no risk to either these things but, particularly, the WEC transaction, he should be taken out. [COUNSEL]: Yes. HIS HONOUR: And taken out in a way that was disguised. [COUNSEL]: Yes. Now, that's putting it at its lowest, I think. But that might have been their state of mind. HIS HONOUR: You know --- [COUNSEL]: We believe, on the evidence, that it probably goes higher than that and that they regarded them as persons whose presence on the register - if I could put it that way - would threaten both the WEC deal and the licence. So once you go to there, they then engage in the subterfuge. And so then my learned friend seek to put the case against them, by us, as being, well, they simply say that we fail to disclose the presence of the Obeids. But that's not the way we put our case. We plead, in the pleadings, and the case as run shows that we put it in terms of they knew all of these facts, they knew that they were engaging in a - if I can put it that way - design, fortunate design, to get the Obeids out of there and, effectively, that the incoming investors, pursuant to the placement, were an integral part of that design. In other words, your money is needed to achieve this objective. HIS HONOUR: Yes . But what they were really doing, let me just suggest, is that they were getting worried about the Obeids' presence in the transaction. [COUNSEL]: Yes, your Honour. HIS HONOUR: It was too close for comfort. They wanted them out. They disguised the way in which they got them out. But they were, it seems to me at the moment anyway, absolutely convinced that the White transaction would go ahead and it would all sort itself out in due course. There would be so much money sloshing around in everybody's pockets - including in your client's - but the fact that these people had been involved in the transaction, commercially, as well as through the land would have been long forgotten or a matter of no interest. They weren't really just thinking about getting rid of the Obeids and borrowing money from your client for that purpose. What it was all about was making the White transaction work. [COUNSEL]: Yes. But one has to look at it from the --- HIS HONOUR: And removing all risks to that transaction. [COUNSEL]: Yes. One has to look at this in terms of a risk reward equation. Because, from their perspective, if one looks at it in terms of risk reward, they were putting in about 2 million dollars each because they had advance loan funds each ... 201 In this summary of the case, Addenbrooke seems to assert that because Cascade, its directors and Duncan knew that they were trying to terminate the Obeid family's interest and, because of the way in which they were seeking to do so, they were obliged to disclose any concerns that they may have held concerning the Obeid family's involvement in the Mt Penny project. His Honour effectively suggested that Cascade, its directors and Duncan were so sure that the WEC deal would proceed that there was little room for any concern that it would be derailed by the fact of the Obeid family's involvement, past or present. Again I point out that Denis O'Neil did not identify any such concern as a matter which would have led him to decide not to invest, had he known of it. 202 At ts 797, ll 25-34 counsel said: So that's how one looks at reliance in this case. One looks at it in terms of if we had been told, not only of the existence of the Obeids, but of the transactions which had been engaged in to get rid of them and the purposes and reasons why those transactions were being undertaken , it's inconceivable, one would have thought, that the Addenbrooke parties would have invested because it would have been seen for [what] it was. But the existing shareholders and directors were trying to get other people's money to assume the risk that all of this may not play out as they hoped, and using other people's money when they had got themselves set in for a very small amount of money and were not prepared to take the risk of putting in good money at this stage at that price. 203 This extract is part of a larger passage which concerns Gray, but it seems to relate to the case against Duncan. The passage makes it clear that the case was a "no transaction" case. The word "inconceivable" should be seen as a rhetorical flourish. 204 Even in the written submissions in reply, the emphasis is on disclosure of the Obeid family's involvement and non-communication of the purpose for which the funds were to be used. See para 22. Although counsel had referred to the matter at the end of his oral closing submissions, it was only in the oral submissions in reply that counsel for Addenbrooke clearly addressed a case based on non-disclosure of such concerns. Addenbrooke may have hoped that by pleading broadly, it could keep open its capacity to identify, as the case proceeded, different combinations of the matters pleaded in paras 51-135 of the statement of claim upon which to develop its case. However, in the end, it did not advance any coherent case against Duncan, other than that based on the representation made by him at the meeting as to the purposes to which the funds were to be put, and his failure to disclose the true purpose. Any such case failed by virtue of the primary Judge's findings concerning Denis O'Neil's evidence as to causation. For the same reason, any other case was also doomed to failure.

THE PRIMARY JUDGE'S REASONS 205 After summarizing matters not in dispute, his Honour referred to the meeting on 19 November 2010 and said at [12]-[14]: 12 The 19 November meeting is critical to Addenbrooke's case. Addenbrooke contends that it was misled at this meeting by Duncan and by Gray. 13 Addenbrooke argues that it was induced to invest in Cascade Coal by representations made at the 19 November meeting and by representations made in the deal sheet. Addenbrooke also complains that it was not told certain matters which, had they been communicated to it, would have caused it not to invest in Cascade Coal. The matters of which they were not told concerned the involvement of the Obeid family in the project. 14 In particular, it is Addenbrooke's case that, as at November 2010: (a) Family members of the Obeid family, of which the patriarch was Edward Moses Obeid MLC (Eddie Obeid) and/or corporate or individual nominees of family members of the Obeid family, owned or had a legal entitlement to acquire at their election three rural properties which comprised all or most of the land area over which EL7406 had been granted; (b) In mid-2009, a company which was the nominee of members of the Obeid family, Buffalo Resources Pty Ltd (Buffalo Resources), had entered into an unincorporated joint venture with Cascade Coal pursuant to which Buffalo Resources was to receive 25% of the proceeds of the development or sale of the Mt Penny coal reserves; (c) From about the middle of 2010, the directors of Cascade Coal had embarked upon a course of action designed to take out the Obeid family and its nominees as landowners in respect of EL7406 and as joint venturer with Cascade Coal in respect of the Mt Penny coal reserves; (d) The capital raising in which Addenbrooke was invited to participate was devised and implemented in order to raise sufficient funds for Cascade Coal to enable it to pay out the Obeid family and its nominees and to sever all ties with the Obeid family and its nominees; and (e) Both Duncan and Gray knew of the matters to which I have referred at subpars (a) to (d) above but did not disclose any of those matters to any of Denis O'Neil, Ned O'Neil or Smith at the 19 November meeting or at any other time. Addenbrooke argues that all of those matters should have been disclosed to it and that, if any one or more of them had been disclosed, it would not have invested in Cascade Coal. 206 The representations in the representational document were pleaded against Cascade, Gray and Southern Cross, but not Duncan. In the end, the primary Judge was satisfied that at the meeting on 19 November 2010, Duncan represented that the funds raised in the capital raising would be applied to the payment of consultancy fees incurred, and to be incurred. His Honour was not prepared to act on Ned O'Neil's evidence as to the allegations made against Duncan in the statement of claim. 207 As to the non-disclosure case identified at [13] and [14], although expressed in different language, his Honour's summary reflects the thrust of the case outlined at para 41 of Addenbrooke's written closing submissions. 208 At [16] and [17] his Honour identified certain key aspects of the respondents' approach to the case including: that the Obeid family's notoriety arose after the occurrence of the relevant events; that Denis O'Neil was the real decision-maker on behalf of Addenbrooke; that even if he had been told all of the matters mentioned at [14(a)]-[14(d)] of the reasons for judgment, Denis O'Neil would still have caused Addenbrooke to invest because: in 2010, the Obeid name did not carry the "kind or level of negative connotations" that it subsequently acquired; the proposed investments were for a short term; a substantial profit was to be made in that short term; and Denis O'Neil had made the relevant decision before he attended the meeting of 19 November 2010, under the influence of Jones, and upon his own assessment of the deal. 209 His Honour then summarized events which occurred between September 2007 and September 2010. In particular, his Honour dealt with the circumstances leading to the grant of EL7406 to Cascade, the involvement of the Obeid family and the formation of the Mt Penny joint venture. At [175]-[189] his Honour set out the transactions by which the Obeid family's interests were extinguished and the preparation for the capital raising. Concerning the latter matter, it must be kept in mind that Addenbrooke was fully aware, when it entered into the Agreement, that Cascade (or EL7406) was probably to be sold to WEC, and that it expected a quick return on its investment by virtue of such sale. 210 At [190] and [191] his Honour made the following findings: 190 The above narrative supports the following findings which I now make: (a) In the period from about September 2007 to August 2008, members of the Obeid family (principally Eddie Obeid's sons) set about acquiring the rural properties at Bylong (Cherrydale Park, Danola and Coggan Creek) which controlled the surface area above the area to be covered by EL7406; (b) By August 2008, the Obeid family members had gained control of those three properties at a cost to them of $7.8 million (approximately); (c) During the period when [Monaro] was bidding for the exploration licences, the Obeid family had control of that bid through Voope; (d) By June 2009, Cascade Coal had agreed with the Obeid family members involved in the project that it would acquire the three rural properties over which it had control and allow to the Obeid interests a 25% joint venture interest in the mining venture itself. These arrangements were ultimately documented in the letters signed on 5 June 2009 involving Cascade Coal, Buffalo Resources and the landholding companies; (e) By about the middle of 2010, the Cascade Coal directors wished to bring about an orderly exit of the Obeid interests from the entire project and thereafter set about ensuring that this was done before any transaction with White Energy took place; (f) The exit price for the Obeid interests from the joint venture was ultimately agreed at $62 million. In addition to that sum, Cascade Coal was to pay the nominees of the Obeids who held the three properties at Bylong which were located in the area of EL7406 a further amount of $33 million (approximately). (g) The placement of shares in Cascade Coal which was promoted to Addenbrooke and others in October and November 2010 was devised and intended to provide some of the funds needed to bring about the final exit of the Obeid interests from the project. 191 The detailed interaction amongst the individuals concerned which is evidenced by the narrative which I have given above makes clear that Duncan was well aware of the full extent of the Obeids' involvement in the venture (both as landholders and as co-venturers in the mining part of the enterprise) and was closely involved in the Cascade Coal's directors' plans to negotiate a complete exit of the Obeid family members from the project. 211 At [192]-[197] his Honour outlined the circumstances in which Addenbrooke came to invest in Cascade as follows: 192 By early September 2010, the O'Neils had become very interested in investing in White Energy. In an email sent by Ned O'Neil to Gray on 7 September 2010, Ned O'Neil instructed Gray to take up $300,000 of White Energy shares including $100,000 of special preference shares. Ned O'Neil chased up this trade on 13 September 2010 and again on 15 September 2010 when he told Gray that his father was asking him what was going on with the shares. Gray responded that Computershare were constantly changing the final number of shares and rights which SCE would be permitted to allocate and that this was causing a delay in making available the shares which Ned O'Neil had tried to secure. 193 On 15 September 2010, Ned O'Neil sent a further email to Gray in which he said: As discussed we just want to end up with a holding equal to $1 million. If some of these can be the special shares that would be great. 194 By early October 2010, Denis O'Neil wanted to invest as much as $10 million in White Energy. Ned O'Neil was also very keen on investing in White Energy but he was thinking of limiting Addenbrooke's investment to about $2 million. At one point around about this time, Ned O'Neil tried to secure some shares in White Energy for himself. 195 The evidence of Denis O'Neil was that the potential investment that was later identified as Cascade Coal was first introduced to him by Jones in about September or October 2010. 196 On 30 October 2010, Gray told Smith in an email sent on that day: I spoke to Denis this morning before he headed offshore. The likely timing for the larger investment we have been talking about is not before mid month, likely 15th-16th. Therefore he suggests you can invest the cash for more than a few days at a time if the rates are better. 197 In September and October 2010, Denis O'Neil had organised with his long term financier, Jo Dwek, to have $5 million available for investment purposes. By late October or early November, Smith was telling Mr Dwek's representatives in Australia that Denis O'Neil had decided to proceed with the big investment and that the funds would be required shortly. 212 This evidence was largely uncontested. It might well, by itself, have raised serious doubts concerning Addenbrooke's case on causation as against Duncan. However his Honour went further. 213 At [199]-[348] his Honour comprehensively summarized the affidavit and oral evidence of each of the three Addenbrooke witnesses, highlighting the aspects in which he found that evidence unsatisfactory. As I have said, Denis O'Neil learned of the proposed issue of shares in Cascade from Jones, a friend and Cascade shareholder, in whom he placed some trust. As a result Denis O'Neil approached Gray at Southern Cross. According to Gray: 31. In about September 2010, I received the first of what became a series of telephone calls from Denis in relation to an investment in a coal deal. We had a discussion in words to the following effect: Denis: "Your firm is going to be awarded a hot coal deal. I want to be a significant investor in it, and I want a firm allocation." Gray: "Do you know the name of the hot deal?" Denis: "I can't remember the name. It's something in coal." Gray: "Without the name, I can't do anything, as we have a lot of prospective deals on." Denis: "I'll find out the name and come back to you." At that time, I did not know what deal Denis was referring to. I had no knowledge of Cascade Coal Pty Limited (Cascade Coal) other than what I might have read about it in the press, nor did I have knowledge of any proposed capital raising for Cascade Coal. 32. A few days later, Denis telephoned me again, and we had a discussion in words to the following effect: Denis: "Have you been contacted about the coal deal yet?" Gray: "No. Did you find out the name?" Denis: "Yes. I asked and I should have written it down because I've forgotten it again." Gray: "Well, when you find out, let me know." 33. Later in September 2010, and also in October 2010, I received several more telephone calls from Denis in relation to this so-called "hot coal deal". Denis enquired "has Southern Cross been awarded the deal yet", he reminded me several times that "I want to make a significant investment in this deal", and using words to the following effect he emphasised that "I'm prepared to commit for a large amount early, on a firm basis, so I don't want to be cut back on what I want to put in", and he foreshadowed that "I'll be getting other high net worth friends of mine to invest in the deal as well". 214 His Honour accepted this evidence, found that Denis O'Neil was the decision-maker on behalf of Addenbrooke and made numerous unfavourable comments concerning his oral evidence. 215 At [384]-[441] the primary Judge set out his findings and conclusions. At [391]-[396] his Honour gave his reasons for rejecting Ned O'Neil's assertion that there had been a meeting with Gray at some time in mid-October. Addenbrooke's case was that further express representations had been made at that meeting. His Honour's rejection of that evidence, and his reasons for doing so must inevitably have led him to take a cautious approach to all of Ned O'Neil's evidence. 216 His Honour then turned to the evidence concerning the meeting held on 19 November 2010. 217 At [408] and [409] his Honour said: 408 There were, as I have said, some common features across all accounts of what occurred at the 19 November meeting. The existing shareholders' desire not to dilute their interests as between themselves was one such matter. The imputed value of Cascade Coal at around $400 million as at the date of the meeting was another. The question of whether a change of government in NSW would make a difference to the proposal was a third. And the idea that the enterprise would be sold to a publicly listed company or floated by means of an IPO was a fourth. The proximity of other mines, the railway and road connections were also discussed according to most of the witnesses. The likely nature of the mining operation was also referred to. 409. Each of the witnesses who gave evidence at the hearing gave me the impression that they were well versed as to the issues in the proceeding and as to the significance of the 19 November meeting to Addenbrooke's case and to the defences raised by the defendants, particularly those raised by SCE and Gray. Each witness had a significant incentive to push one or more particular points about the meeting. Gray and Adams had every reason to introduce into their account of what occurred mention of CMG and the Obeids. On the other side of things, Ned O'Neil and Smith had every reason to deny that they were told anything about CMG or the Obeids. I have treated all of the evidence about the 19 November meeting with considerable caution. 218 At [410]-[416] the primary Judge made the following findings: as at 19 November 2010, "there was a significant degree of sensitivity amongst the existing stakeholders in Cascade about the involvement of the Obeid family in the land and the joint venture"; the reason for such sensitivity was a matter of speculation; the Cascade stakeholders would have preferred to offer Cascade to WEC as a "clean entity", having complete control of the Mt Penny coal reserves, rather than as an unincorporated joint venture with the Obeid family; such sensitivity had been demonstrated in the drafting of the placement letter to "water down the arrangements with the Obeid family and so as to avoid mentioning the exit arrangements"; it was doubtful that Duncan and Gray mentioned, or made available a folder of documents, which included a pro forma balance sheet; at that time there was no reason to bring about a state of affairs whereby one of the external investors being courted, might ask awkward questions about the complicated transactions which were to effect the Obeid family's exit; his Honour was not persuaded that anybody mentioned CMG at the meeting, or made available to Addenbrooke a folder which included the placement letter and appendices, including the pro forma balance sheets, as this information was best kept away from potential investors; it was doubtful whether there was any mention of the Obeid family's land holdings in the Mt Penny area, notwithstanding that Ned O'Neil had conceded that the Obeid family may have been mentioned in that context; there had been discussion concerning the statement in the representational document to the effect that the purpose of the capital raising was to reduce third party debt and creditors; Smith may well have asked about that matter; he was told that the funds would be used to pay existing consultancy fees and likely future consultancy fees; the concepts of spending on consultancy fees and spending on infrastructure are not far apart; Ned O'Neil had exaggerated the extent to which Duncan had spoken of spending the money on infrastructure rather than about the commercial deal; Duncan explained the purpose to which the funds would be put as paying consultants' fees, which statement was literally true, in that CMG was said to have provided consultancy services, however probably not to the extent of $25.5 million; and a statement that the funds were to be used to reduce third party debt and creditors, without further explanation, would have been, on 19 November 2010, false and capable of being seriously misleading. 219 The first four points are directly relevant to Addenbrooke's claim that the primary Judge did not deal with their claim of concealment or concerns about the possible effect of the Obeid family's involvement. His Honour concluded that there was "sensitivity" about such involvement, the reason for which was a matter of speculation. Addenbrooke challenges this finding, but it seems clear that his Honour was simply not satisfied that he should draw the inferences asserted by Addenbrooke. 220 At [418]-[420] his Honour said: 418 As is commonly the case with causes of action based upon misrepresentation, the mere fact that a person makes a false statement will generally not be sufficient to found an action for damages or other relief. Generally speaking, there will have to be a causal connection between the making of the statement and the loss claimed by the alleged victim. The present case is no exception to these general rules. 419 In the present case, Addenbrooke relies upon certain positive representations as being false and misleading. It also relies upon the failure on the part of Duncan and Gray to put the Addenbrooke representatives fully in the picture as at October/November 2010 insofar as the involvement of members of the Obeid family in the enterprise was concerned. 420 In order to make good that case, Addenbrooke must satisfy the Court that the decision-maker or decision-makers who made the relevant decisions on its behalf relied upon the positive misrepresentations that were made to its representatives and counted on being told of the involvement of the Obeids in the enterprise because knowledge of their involvement would have been a material factor in the decision which Addenbrooke ultimately made. 221 Whilst these propositions may be expressed in relatively informal language, they nevertheless reflect the applicable law, having regard to the pleaded case. 222 His Honour then turned to the question of reliance, finding at [425], that Denis O'Neil was the sole decision-maker in respect of Addenbrooke's decision to invest in Cascade. In so finding his Honour rejected claims by the Addenbrooke witnesses that the decision to invest was taken by Denis O'Neil, Ned O'Neil and Smith in consultation. 223 At [427]-[429] his Honour said: 427 To my mind, Denis O'Neil generally made his investment decisions by looking at the people involved in the proposal and forming a view about the business acumen and trustworthiness of those people. Obviously, he would be interested in the essence of the proposal but would not devote much attention to the detail. 428 As far as Addenbrooke's investment in Cascade Coal was concerned, I have come to the conclusion that: (a) Throughout the period from August 2010 to late 2010, Denis O'Neil had a strong desire to invest in coal producing assets or companies involved in coal mining. This was because he was aware that the price of coal was high at the time and was likely to remain high for some time; (b) He regarded Jones, who brought the proposal to him, as a friend, as trustworthy and as someone who had good business and political connections. He considered Jones to be a very astute investor who had sound commercial acumen; (c) He knew Gray and thought that he too was well connected in investment circles; (d) His close friend and much admired businessman, Neville Crichton, was going to invest in the placement and that was good enough for him; and (e) He assessed the investment as short-term and likely to be very profitable. 429 In addition, I have come to the conclusion that Denis O'Neil had decided to go ahead with Addenbrooke's investment in Cascade Coal by no later than the end of October or early November 2010. He organised the Dwek loan funds to be available then. At the time that he took that step, he was not aware that there was to be a presentation on 19 November 2010. 224 Those findings effectively disposed of the case based upon the representations at that meeting, the decision to invest having been made before it took place. 225 At [430]-[435] his Honour dealt with the alleged non-disclosures, saying: 430 It was Denis O'Neil's evidence that, had he been informed of any involvement of any member of the Obeid family in the Cascade Coal venture, he would immediately have informed Ned O'Neil and Smith. He also said that he would also have immediately informed Neville Crichton. He also gave the curious evidence set out in par 20 of his first affidavit. What Denis O'Neil did not say in his affidavit evidence was that he would not have gone ahead with the investment had he known that the Obeids had some involvement with Cascade Coal. 431 At [199]-[264] above, I have summarised Denis O'Neil's evidence. I formed the view that, from time to time, he was less than frank in the answers which he gave. As I have noted in those paragraphs, he tried to distract the cross-examiner by using his charm. In addition, he took refuge in his asserted lack of recollection when the questions became difficult. 432 The thrust of his evidence was that, had he known about the involvement of the Obeids in Cascade Coal and the foreshadowed mining venture, he would have consulted with his son and Smith to see what they would do next. While I accept he may have spoken to his son and Smith had he known about the Obeids' involvement in Cascade Coal, I do not accept that he would have vacated the decision-making ground in light of the disclosure of that involvement. In this regard, I also do not accept that Ned O'Neil and Smith would have counselled Denis O'Neil against the proposed investment in Cascade Coal had they known that the Obeids had some involvement with it. 433 When Ned O'Neil was pressed as to what it was about the involvement of the Obeids in the enterprise that would have been a deal-breaker, he was unable to say more than that Eddie Obeid had a questionable reputation. It is difficult to understand why the simple fact that Eddie Obeid had a questionable reputation would have been enough to discourage Denis O'Neil from causing Addenbrooke to invest in Cascade Coal. Ned O'Neil also said that he understood that Eddie Obeid was a factional warlord within the ALP. While, at the time, this may have been seen as a slightly negative factor should the Liberal National Coalition have won the March 2011 election, it is again difficult to understand why that circumstance would have been enough to cause Addenbrooke not to invest in Cascade Coal. None of the Addenbrooke witnesses gave evidence that they saw the 20 May 2010 article published by The Sydney Morning Herald on line. Of those witnesses, only Ned O'Neil testified that the Obeids may have been mentioned at the 19 November meeting. 434 Given Denis O'Neil's palpable enthusiasm for the proposal, I do not accept that, had the Addenbrooke representatives been told that the Obeids owned the farms where the mining was likely to take place and had also, for some time, had an interest in the joint venture which was to exploit the mining rights but had recently been taken out both of the ownership of the land and the joint venture by Cascade Coal, that information would have made any difference to Denis O'Neil when it came to making his decision whether or not to invest in Cascade Coal. To my mind, he would have gone ahead anyway, had he known those facts. He was enthusiastic about coal, he was aware of some of the connections between White Energy and Cascade Coal and his money would be at risk for only a short time. The rewards were great and the risks relatively contained. 435 I am of the view that Denis O'Neil did not pay close attention to what Duncan said at the 19 November meeting and did not make his decision to invest based upon the circumstance that the funds to be raised by the placement were to be spent on infrastructure or consultancy fees. Nor did he rely on anything said by Gray. Nor did he count on Gray carrying out a due diligence. Nor did he expect Gray to tell him all there was to know about the proposal. It did not matter to him whether others were skimming off substantial sums in the enterprise. What mattered to him was whether he was likely to make a substantial profit from the investment. He made a judgment about that based upon his knowledge of the people involved and the fact that Cascade Coal was likely to be sold to White Energy. In my judgment, had he been told the truth about the involvement of the Obeids at that time, it would have made no difference to the decision which he made. 226 At [435] his Honour found that: at the meeting on 19 November 2010, Denis O'Neil did not pay close attention to Duncan; he did not make the investment decision based upon the proposition that the moneys raised were to be spent on infrastructure or consultancy fees; he did not rely on anything that Gray said; he did not count on Gray carrying out due diligence; he did not expect Gray to tell him all that there was to know about the proposal; it did not matter to him that others "were skimming off substantial sums in the enterprise"; it mattered to him that he was likely to make a substantial profit from the investment; his decision was based upon his knowledge of the people involved and the fact that Cascade was likely to be sold to WEC; and had he been told at that time the truth about the involvement of the Obeids, it would have made no difference to his decision. 227 However one looks at the matter, by the end of the trial, Addenbrooke's case as pleaded was limited by the evidence given by the three Addenbrooke witnesses as to "reliance", including their claim that had they known certain things, they would not have agreed to Addenbrooke's participation in the capital raising. The primary Judge further narrowed the case by his views as to the evidence of those witnesses. As a result, the only matters which remained in issue on the question of "reliance" were: whether, had Denis O'Neil known of the involvement of the Obeid family in the Mt Penny project, he would have decided to allow Addenbrooke to invest in Cascade; and whether, had he known that a substantial part of the capital to be raised was to be paid to the Obeid family, he would have allowed such investment. 228 In fact Denis O'Neil did not say that in either case, he would not have allowed the investment. However, for present purposes, I assume that it is an available inference from his evidence, taken at face value, that he would not have done so. His Honour did not accept that evidence. 229 In my view his Honour disposed appropriately of the only available case disclosed by the evidence which he accepted. It is no doubt true that paras 51-135 of the statement of claim kept open a wide range of arguable cases which, if proven, might or might not have led to a different result. However Addenbrooke could not reasonably have expected his Honour to construct his own view of the way in which the various pleaded matters might have been combined in order to support its claim. In any event, ultimately, it was Denis O'Neil who identified the relevant non-disclosures. On appeal, Addenbrooke, in identifying aspects of the case not considered by the primary Judge, seems only to have identified non-disclosure of: the alleged concerns of Cascade, its directors and Duncan as to the effect of the Obeid family's involvement upon the WEC deal and Cascade's commercial interests, including its holding of EL7406, should such involvement become known; and the concealment of the mechanism by which the Obeid family's interest was extinguished. 230 Denis O'Neil did not say that had he known of either matter, or both of those matters, he would not have invested. 231 In its written submissions on appeal, Addenbrooke submits that the primary Judge, "did not assay", the task of considering why Duncan and the Cascade directors, "engaged in the course of deliberate non-disclosure in which [they] engaged". This submission seems to concern their reasons for wanting to remove the Obeid family from the project. Certain purposes are pleaded in the statement of claim, and there are general allegations of non-disclosure relating, directly or indirectly, to all of the matters pleaded in paras 51-135 of that document. As I have previously demonstrated, in Addenbrooke's closing submissions, the matters of non-disclosure about which Addenbrooke complained were set out at para 41. Those matters do not include alleged concerns entertained by Cascade, its directors and Duncan as to any effect that the Obeid family's involvement might have had on the proposed WEC deal or Cascade's other interests, including its tenure of EL7406. Nor is any such "knowledge" identified in paras 15-26 of the written submissions. 232 In Addenbrooke's closing written submissions directly concerning the non-disclosure case at paras 84-91, there is a bare assertion that the reason for wishing to remove the Obeid family from involvement in the Mt Penny project was a fear that it might adversely affect the proposed acquisition of Cascade by WEC, from which Duncan would have made a substantial profit. However it is by no means clear that Addenbrooke was, in those circumstances, arguing that such concerns ought to have been disclosed. If such non-disclosure was, indeed, a significant part of Addenbrooke's case, requiring specific consideration, one might have expected to find an explanation as to the way in which the evidence demonstrated such concerns. It is true that at ts 589 and ts 597, towards the end of Addenbrooke's oral closing submissions, there are references to such a case. In those submissions counsel seems to be suggesting that the concern was that WEC might learn of the Obeid family's involvement. As I have previously suggested, that purpose is inconsistent with para 126A of the statement of claim which suggests that it was only necessary that such involvement be concealed until Addenbrooke had signed the Agreement. If this matter was truly part of Addenbrooke's case, one might have expected that such inconsistency would have been explained. I again point out that no such case appears to be identified in the written submissions in reply although it was put forcefully in the oral submissions in reply.

Ground 1 233 Ground 1 seems primarily to relate to the primary Judge's purported failure to deal with the causes of action other than the misleading or deceptive conduct case against Duncan, Cascade, Gray and Southern Cross, and the negligence claim against Gray and Southern Cross. However Addenbrooke's written submissions on appeal also assert, in connection with this ground, that the primary Judge, "failed to appreciate [the misleading or deceptive conduct case's] true gravamen as a non-disclosure case", and that his Honour, "misapprehended what it was that Addenbrooke alleged had not been disclosed". Addenbrooke's first submission is wrong. Clearly, the primary Judge understood that the case involved non-disclosure. To the extent that Denis O'Neil identified matters, the disclosure of which might have affected his decision, his Honour dealt with them. As to his Honour's alleged misapprehension as to the "undisclosed" matters, on appeal, Addenbrooke has identified only the concerns allegedly held by Cascade, its directors and Duncan as to the effect that public disclosure of the Obeid family's involvement might have on the WEC deal, and otherwise on Cascade's business interests, including its tenure of EL7406. I am by no means satisfied that such matter was presented at trial as a discrete basis for Addenbrooke's claim of misleading or deceptive conduct by non-disclosure. As I have demonstrated, it was not identified in para 41 of Addenbrooke's written closing submissions, and seems not to have achieved any prominence other than late in Addenbrooke's oral closing submissions and oral submissions in reply. In any event, Denis O'Neil did not claim that he would not have invested had he known of such matters. To the extent that ground 1 otherwise relates to the misleading or deceptive conduct case against Duncan, I shall deal with it below. Grounds 2, 5, 6, 7 and 8 also relate to the misleading or deceptive conduct claim against Duncan. I turn to those grounds.

Ground 2(a) 234 Ground 2(a) asserts that the primary Judge failed to address the question of whether or not Duncan had reasonable grounds for making representations as to future matters. This ground was not addressed in Addenbrooke's written submissions on appeal. There can be little doubt that Duncan's representation as to the intended application of the funds raised in the capital raising was a representation as to a future matter. As his Honour found, it would have been seriously misleading to represent that the funds were to be applied in reducing third party debt and creditors, at least in the absence of further explanation. Had his Honour concluded that Addenbrooke acted to its detriment in reliance upon that representation, it seems likely that his Honour would have found that Duncan had no reasonable grounds for the representation. However, in view of his Honour's conclusion as to causation, he did not have to consider that aspect. I need not consider that matter further, given that, as appears below, I find no error in his Honour's reasoning concerning causation.

Ground 2(b) 235 The contents of grounds 2(b), 5, 6, 7 and 8 are such that it will be best if I deal with grounds 6, 7 and 8, then ground 5, followed by ground 2(b).

Ground 6 236 In Ground 6, Addenbrooke complains of the delay between the end of the trial on 18 June 2014 and the publication of his Honour's reasons on 5 August 2015. In the course of argument on appeal, the Court was told that, at the end of final submissions, it was suggested by his Honour that he should defer the delivery of his reasons until the High Court had heard and determined proceedings in which the validity of the Revocation Act was to be challenged. It seems to have been thought that the outcome of that case might affect Addenbrooke's claim. At first, Addenbrooke seems not to have favoured that course. However that course was adopted. On appeal, the discussion of this matter appears at ts 189, ll 35-40; ts 194, l 20; and ts 272, l 15 to ts 273, l 10. The High Court judgment was handed down on 15 April 2015. His Honour invited further submissions on or before 6 May 2015 and delivered judgment on 5 August 2015. 237 In those circumstances, the parties could not properly complain that delivery of the judgment was delayed. In any event there is no reason to believe that his Honour suspended or delayed the writing of his reasons until after the High Court had delivered judgment.

Ground 7 238 Ground 7(a)(i) is only partially relevant to the case against Duncan. It concerns the issue of reasonable grounds for statements as to future matters. Paragraphs 29-32 of the statement of claim are not pleaded against him. As to paras 39-47, my understanding is that his Honour rejected Ned O'Neil's evidence concerning those matters, but found that Duncan had represented that the funds were to be applied in the reduction of third party debts and creditors. Hence, for present purposes, the question of reasonable grounds relates only to that representation. The relationship between ground 2(a) and ground 7(a)(i) is unclear. However, as I have said, in connection with ground 2(a), in view of my conclusions concerning other aspects of the appeal, it is not necessary that I consider the matter. 239 Ground 7(a)(ii) is very broad. It relates to both the non-disclosure case and the case based on the representation as to the purpose for which the funds raised in the capital raising were to be applied. As to the latter matter, the ground fails because of his Honour's finding that Denis O'Neil would have decided to invest, even if he had known of the true purpose of the capital raising. As to the non-disclosure case, this ground relies on Addenbrooke's incorrect assumption that Duncan was obliged to disclose all matters material to Addenbrooke's decision to invest. Further, his Honour's findings concerning Denis O'Neil's evidence disposed of all claims to have suffered loss as the result of any misleading or deceptive conduct. 240 As to ground 7(a)(iii), if Addenbrooke wanted such detailed findings, notwithstanding the primary Judge's decision, it should have sought them from his Honour after publication of the reasons. Such a course would have been much more efficient than the course adopted, namely asserting on appeal that numerous findings ought to have been made. In any event, as I have previously observed, his Honour necessarily sought to identify the true nature of Addenbrooke's case by reference to Denis O'Neil's evidence. Further, it is difficult to see why the primary Judge should have gone beyond the matters of fact alleged by Addenbrooke in paras 15-26 and 41 of its closing submissions at trial. Finally, the ground fails because it is also based on the flawed assumption referred to in connection with ground 7(ii). In those circumstances, it is unnecessary that this Court make any further findings or remit the matter for that purpose. 241 Ground 7(b), as it concerns Duncan, relates to the accessorial claim, which claim I shall address at a later stage. 242 Ground 7(c) asserts that Addenbrooke was entitled to a declaration that Duncan's conduct was in contravention of s 12DA of the ASIC Act, notwithstanding his Honour's conclusion that loss could not be demonstrated. In my view this proposition is completely without merit. The grant of a declaration is discretionary. There are at least two considerations which would, in all probability, have led a court to decline declaratory relief in this case. First, Addenbrooke relied on ss 12GF and 12GM of the ASIC Act. Only a person who suffers loss (ss 12GF and 12GM), or who is likely to suffer loss (s 12GM) may seek relief under those sections. The available relief includes damages (s 12GF) or any order which the Court considers will compensate such person for loss or damage (in whole or in part), or will prevent or reduce the loss or damage suffered, or likely to be suffered. It is difficult to see how a declaration could fall within that description. Of course those provisions do not limit the Court's jurisdiction to grant declaratory relief. However, if Addenbrooke is not entitled to other relief, then it is hard to see how a declaration would help. In any event, whether or not Addenbrooke demonstrated any relevant loss is a matter to be addressed in this appeal. If loss is proven, other relief will follow. There will be no need for a declaration. If no loss is proven, no wrong is demonstrated, and any declaration would be hypothetical. See Meagher, Gummow & Lehane's Equity Doctrines and Remedies (5th ed) at 19-155 to 19-170. 243 The second consideration is the discretionary nature of the remedy. Even if loss or potential loss be proven, there would be no utility in making a declaration. See Meagher, Gummow & Lehane (supra) at 19-300. A bare declaration will rarely be granted. See Minister for Immigration & Multicultural Affairs v Ozmanian (1996) 71 FCR 1 per Kiefel J at 33, Sackville J concurring. This is particularly apposite where the litigation is between private parties and does not involve government or regulatory authorities. As far as I can see, if Addenbrooke fails to obtain any other relief, a declaration would serve no purpose other than, perhaps, to enable it to assert that it had, in some senses, been at least partially successful, and that it was therefore entitled to a costs order. In fact, it would demonstrate only that Addenbrooke had failed to establish any loss. If other relief is granted, then again, there would be no point in making a declaration. In this case, consideration of the hypothetical nature of any declaratory relief and of its inutility overlap.

Ground 8 244 Ground 8(a)(i) relates to the express representations pleaded against Cascade, Gray and Southern Cross arising out of the representational document, and those pleaded against Duncan and Cascade arising out of the meeting on 19 November 2010. Of the paragraphs in the statement of claim referred to in ground 8a(i) only paras 39-42 are pleaded against Duncan. Addenbrooke seems to assert both that it entered into the Agreement in reliance upon those representations and that, had it known of their falsity, it would not have done so. However Addenbrooke seems also to suggest that had it (Addenbrooke) known of all or any of the matters pleaded in paras 32-42 of the statement of claim it "would not have had the opportunity to participate, or participated in the capital raising, and the capital raising would not have proceeded". 245 To the extent that Addenbrooke asserts that it suffered loss as a result of the one representation found against Duncan, the primary Judge rejected that case. Ground 8(a)(i) identifies no error in that regard. To the extent that Addenbrooke seeks now to raise a case based on non-disclosure other than as pleaded in paras 51-135 of the statement of claim, it may not do so. The references to Addenbrooke's not having the opportunity to participate in the capital raising, and the possibility that the capital raising would not have proceeded, seem to be references to the argument that others who learned of the undisclosed matters might have withdrawn from, or taken steps to prevent the capital raising proceeding. No such case is pleaded. Nor is it pleaded that the conduct of others may have affected Addenbrooke's conduct. As far as I can see, such matters were not raised at trial. 246 Ground 8(a)(ii) should be rejected for the same reason. Ground 8(b) asserts an entitlement to claim relief but says nothing about the basis of such entitlement, or as to any error by the primary Judge.

Ground 5 247 Ground 5(a) challenges the primary Judge's finding that had Denis O'Neil known of the involvement of the Obeid family in the Mt Penny project, and that a substantial part of the funds raised in the capital raising was to be paid to them, he would, nonetheless, have decided to invest in Cascade. Addenbrooke submits that his Honour failed to consider "the whole of the pleaded case (as referred to in Grounds 1-3)". To the extent that Addenbrooke asserts that the primary Judge, in considering the misleading or deceptive conduct case, ought to have gone beyond the 135 paragraphs which relate to it, I see no basis for the proposition. If Addenbrooke means that his Honour did not address the whole of that case, I consider that his Honour simply reduced the case to its basic elements, having regard to the evidence, particularly that of Denis O'Neil, and his findings concerning that evidence. It may be that Addenbrooke also asserts that had there been disclosure of the undisclosed matters, persons other than the three Addenbrooke witnesses may have, in some way, caused it not to participate in the capital raising. As I have said, no such case was pleaded against Duncan. 248 Ground 5(b) asserts that the primary Judge erroneously concluded that Denis O'Neil did not rely on Gray or Southern Cross in entering into the Agreement. It submits that the primary Judge did not consider, "what Gray would have told Addenbrooke were it not for the contravening conduct of Duncan and Cascade, and the impact which that would have had on the information which Addenbrooke would have had at its disposal when making an investment decision and the decision made [by] Addenbrooke". Ground 5(b) is difficult to understand. It seems to relate to paras 29(c) and 37 of Addenbrooke's submissions on appeal. Paragraph 29(c) concerns the possible reaction of Gray (and therefore Southern Cross), had Gray known of the Obeid family's involvement. As I have already observed, there was no pleading of such matters as against Duncan. To the extent that the matter goes to causation, it is difficult to see how such evidence could be used to contradict or expand upon that part of Denis O'Neil's evidence as was accepted by the primary Judge. 249 It is true that Gray said that he would not have wanted to be involved, or to have his clients involved in any investment with the Obeid family. However, although this evidence was apparently available to Addenbrooke from about December 2013, it did not amend its pleading to allege a case based on such evidence. Nor did Denis O'Neil say that he would have been influenced by anything that Gray may have said concerning the Obeid family's involvement. 250 I should make one other comment concerning ground 5(b). At para 29 of its written outline on appeal, Addenbrooke asserts that there was no evidence supporting the proposition that any reasonable person would have proceeded with the transaction, "if the full picture had been known including the purposes and reasons of the Cascade directors" (emphasis in original document). This statement appears to relate to the statement in para 28 that the, "relevant inquiry was what would have happened if it had also been disclosed that Cascade had engineered this result because they were concerned that if they did not do so (and do so secretly) it would prejudice their ability to make a profit from the Mt Penny Tenement via the WEC Takeover". 251 There are three fundamental misconceptions in paras 28 and 29 of Addenbrooke's written submissions. First, Addenbrooke itself, through Denis O'Neil, identified the events which, on its case, would have occurred had the various matters pleaded in the non-disclosure case been disclosed. It pleaded that it would not have entered into the Agreement. There was no pleading that had other people (eg Gray or Crichton) learnt of any of the undisclosed matters, they would have acted in any particular way, such as by advising Addenbrooke not to enter into the Agreement. In any event, Addenbrooke was, in proving that aspect of the case, dependent upon the evidence of the relevant decision-maker. Denis O'Neil said nothing about it. Denis O'Neil said that he might have spoken to Crichton, but Addenbrooke did not lead evidence from Crichton. Rather it relied upon Denis O'Neil's evidence as to the undisclosed matters which would have been relevant to his decision. Secondly, as I have previously indicated, the conduct of any reasonable person is not relevant in this case. The appropriate focus was on Denis O'Neil's likely conduct. Thirdly, it was not for Duncan to lead evidence as to the conduct of any such a person. 252 In its submissions on appeal, Addenbrooke deals jointly with ground 5 and other grounds under the written heading "Causation". I shall deal further with ground 5 in considering that discrete aspect of Addenbrooke's submissions.

Ground 2(b) 253 Ground 2(b) asserts that the primary Judge limited his consideration of the non-disclosure case to: ... matters concerning the involvement of the Obeid family in the Mt Penny Project and the course of action embarked upon by the directors of Cascade Coal Pty Ltd ... and Duncan to take out the Obeid family and its nominees as landowners in respect of EL7406 and as joint venturer with Cascade in respect of the Mt Penny Coal Project ... . 254 Addenbrooke identifies six aspects in which his Honour allegedly erred. The first is failure to consider pleaded purposes, and the materiality and non-disclosure of the purposes pleaded in paras 119-126A of the statement of claim. As I have previously observed Addenbrooke has offered no support for the proposition that Duncan was obliged to disclose all material matters. Particularly, it is not clear to me that there was any requirement that he disclose commercial purposes. Ground 2(b)(i) seems to assert that the non-disclosure of material matters is evidence of misleading or deceptive conduct. I have attempted to demonstrate that the cases do not support that proposition. It must also be kept in mind that there is no pleaded representation as to any aspect of the proposed deal with WEC, or as to the security of Cascade's title to EL7406, upon which representation Addenbrooke claims to have relied. There is no direct evidence that Cascade, its directors or Duncan had any specific concerns about the effect of the Obeid family's involvement in the joint venture, or as to the nature or extent of such effect. That Denis O'Neil did not attach importance to Cascade's alleged purpose of removing the Obeid family from the project or its reasons for doing so privately, demonstrates that these matters had no commercial significance from his point of view. 255 Paragraphs 119-126A of the statement of claim identify the following purposes: the purpose of the capital raising, being to enable Cascade to buy out the Obeid family; and the purpose of Cascade and its directors (but not Duncan) in structuring the transaction "between Mt Penny Coal, Cascade, CMG and Southeast Investment, ... was to procure the exit of Southeast Investment and thereby the Obeid Family from the development of the Mt Penny tenement, for the purposes set out in [paras] 119 to 126". 256 In my view his Honour plainly took into account both purposes. In ground 2(b)(ii) Addenbrooke refers to the purposes identified in ground 2(b)(i). Other implied purposes may arguably be found in paras 119-126A, but one might have expected that where the pleader refers to "purposes" pleaded elsewhere in the pleading, such purposes would be clearly identified as such. In any event, the limited nature of Denis O'Neil's evidence is fatal to this aspect of Addenbrooke's appeal. 257 The second aspect is his Honour's alleged failure to decide whether such purposes had been proven. However his Honour proceeded on the basis of Denis O'Neil's evidence. To the extent that any purpose went beyond those identified by the primary Judge, it was not identified by Denis O'Neil as having been a matter which would have affected his decision. I should make a further comment concerning paras 16-22 of Addenbrooke's outline of submissions on appeal. Whereas grounds 2(b)(i) and (ii) address the purposes identified in paras 119-126A of the statement of claim, in its written outline Addenbrooke seeks to broaden those "purposes". At para 16, it refers to the "facts and purposes" pleaded in paras 102-126A and then purports to identify those "purposes" as including opinions, conduct and concerns [or] motives". Thus Addenbrooke asserts that the primary Judge failed to determine whether a wider range of facts, conduct, concerns or motives and purposes were proven. Addenbrooke seeks to support this view of ground 2(b)(ii) by reference to paras 130-131 of the statement of claim. However those paragraphs do not inform the meaning of the word "purpose" in grounds 2(b)(i) and 2(b)(ii). I see no justification for allowing any such extension of ground 2(b)(ii). 258 The third aspect is the assertion that the primary Judge failed to consider whether to draw any "Jones v Dunkel inferences" from the failure to call Duncan in relation to the matters pleaded in paras 51-126A of the statement of claim. It is difficult to identify the inferences which, as Addenbrooke submits, ought to have been drawn. Inferences need only be drawn if they are relevant to the case. As far as I can see, no available inference could have repaired the damage done to Addenbrooke's case by his Honour's rejection of the proposition that the decision was made by the three Addenbrooke witnesses, and the shortcomings in Denis O'Neil's evidence. 259 The fourth aspect is an assertion that the primary Judge determined the question of "reliance" on the "limited case" set out in ground 2(b), and without considering the impact that the disclosure of, "those additional facts and purposes would have had upon Addenbrooke, or upon a reasonable person in the position of an investor in the capital raising, and upon the success of the capital raising if those facts had been disclosed, having regard to the hypothetical nature of the enquiry." 260 The first point to make about this proposition is that it was Denis O'Neil, and not the primary Judge, who decided which of the various matters pleaded in paras 51-135 of the statement of claim were relevant to the case. He must have been aware of the content of the statement of claim. He was, after all, the managing director of Addenbrooke. Clearly, he said all that he could about the decision-making process. I again point out that as I understand the authorities, the reasonable investor has no present relevance. The reference to the success of the capital raising seems to be another attempt to raise the unpleaded case to which I have previously referred. I do not see any point in the reference to the hypothetical nature of the enquiry. 261 The fifth aspect appears to reflect the proposition in Gould v Vaggelas to which I have previously referred. It is suggested that the (inferred) motive of the Cascade directors and Duncan, in not wanting to disclose the true purpose of the capital raising, was relevant to the likelihood that Duncan and Cascade had "achieved" their purpose. 262 The proposition advanced by Wilson J in Gould v Vaggelas at 236 was that if a representor made a representation which was calculated to induce the representee to act in a particular way, and the representee so acted, it might be inferred that he or she was induced to do so by the representation. At 238, Wilson J put the proposition in a slightly different way. His Honour said that where the representor intended that the representee act upon the representation, and the representation was such as to be likely to induce the representee so to act, then, "commonsense would demand the conclusion that the false representations played at least some part in inducing", the representee to do so. Addenbrooke seems to have converted these propositions into the assertion that a party's motive for not disclosing information is relevant to prove that such non-disclosure had achieved its purpose. This proposition assumes a duty to disclose all material information, a proposition which I consider to be misconceived. In any event, the relevant motive is unclear. It may have been the removal of any threat to the WEC deal or to Cascade's other interests. It may have been to induce Addenbrooke to enter into the Agreement. It may also have been to allow the offering of Cascade to WEC on a "clean" basis, as the primary Judge found. The motive may have been some combination of all three. With the possible exception of para 126A of the statement of claim, there was no pleading of the second possibility. His Honour accepted the third possibility, that Cascade, its directors and (perhaps) Duncan wished to achieve a "clean" sale. As to removal of the threat to the WEC deal and protection of Cascade's business interests, there is no real, direct evidence. The case seems substantially to hang on the rough proximity of the drafting of the documents to effect the removal of the Obeid family from the Mt Penny venture to the May 2010 newspaper article. Clearly, his Honour declined to draw any inference to that effect. In any event, once again, his Honour's view of Denis O'Neil's evidence means that ground 2(b)(v) contributes nothing to this appeal. Of course it is not necessary that motive be demonstrated in order to prove misleading or deceptive conduct. 263 The sixth aspect (identified in ground 6(b)(vi)) is somewhat difficult to understand. It alleges that the primary Judge erred in concluding that his findings as to causation, based on his understanding of the case, disposed of all statutory causes of action and the cause of action in negligence against Gray and Southern Cross. To the extent that it is submitted that in considering the misleading or deceptive conduct case, the primary Judge ought to have referred to matters pleaded in support of other causes of action, I reject the submission. To the extent that the submission relates to other causes of action, I shall consider it elsewhere in these reasons.

SUBMISSIONS ON APPEAL CONCERNING CAUSATION 264 As I have previously mentioned, at paras 28-38 of its outline of submissions on appeal, Addenbrooke deals discretely with the question of causation. To some extent, in dealing with those submissions I shall repeat earlier observations. 265 At para 28, Addenbrooke submits that his Honour failed to ask the correct question concerning causation, namely: ... what would have happened if the purposes of the Cascade directors had been disclosed ... . 266 Addenbrooke also formulates the question as: ... what would have happened if it had also been disclosed that Cascade had engineered this result because they were concerned that if they did not do so (and do so secretly) it would prejudice their ability to make a profit from the Mt Penny Tenement via the WEC Takeover. 267 Addenbrooke's statement of claim and its evidence answer both questions. The answer to each question is that Addenbrooke would not have entered into the Agreement, a conclusion which his Honour rejected. 268 At para 36, Addenbrooke submits that the relevant test for causation is that set out in Marks v GIO Australia Holdings (1998) 196 CLR 494 at [42]. There McHugh, Hayne and Callinan JJ said: It follows, then, that a comparison must be made between the position in which the party that allegedly has suffered loss or damage is and the position in which that party would have been but for the contravening conduct. And even this inquiry may not conclude the question. Analysing the question of causation only by reference to what is, in essence, a "but for" test has been found wanting in other contexts [71] and it may well be that it is not an exclusive test of causation in this area either. But that is not a question which we need to consider in this case. For the moment it is enough to say that s 82 requires identification of a causal link between loss or damage and conduct done in contravention of the Act ... . 269 In most cases, the "but for" test addresses events which would probably have happened had a representation not been made. Where the case involves non-disclosure, the question addresses events which would have occurred had a particular matter been disclosed. In observing that in some circumstances such an approach has been found wanting, their Honours were not dismissing it as the appropriate approach in many, if not most cases. Nonetheless, at para 36 of its submissions on appeal, Addenbrooke seems peremptorily to dismiss reliance on the "but for" test. In so doing, it seeks to depart from its pleaded case and its conduct of the case at trial. Its submissions are, in any case, erroneous. 270 Addenbrooke submits that the courts have frequently deprecated the substitution of words such as "reliance" for the legal test. Whilst that may be so, it is nonetheless the case that in many cases, causation is based on "reliance", whether the case involves a positive representation or, in the case of non-disclosure, identification of the likely events had there been disclosure. In the latter case, one might say that the affected party acts on the basis of his or her understanding as brought about by the relevant non-disclosure and other matters. Addenbrooke suggests that the question is, "What would the plaintiff have done, had the defendant provided the information he was bound to provide". I pause to point out again that the question of the information which Duncan was obliged to provide has not been addressed by Addenbrooke, other than by asserting a duty to disclose all matters material to its decision to enter into the Agreement. For reasons which I have given, that proposition cannot be supported in principle. In any event, the question, "What would Addenbrooke have done", was answered by Addenbrooke itself, in paras 46 and 132 of the statement of claim: it would not have entered into the capital raising. As I have said, the primary Judge rejected that proposition. 271 Addenbrooke seeks to adopt the approach taken in Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) (2006) 67 NSWLR 341 at [51]-[53]. Addenbrooke submits that the decision is authority for the proposition that, "the question whether the appellant suffered loss by the respondent's contravening conduct is not answered by the application of the 'but for' test. Rather, what has to be done is, 'to ascertain what would have occurred for the respondent not to have engaged in the conduct which was misleading'". In my view, Addenbrooke's proposition is based upon a misunderstanding of that decision. First, the case does not establish that as a general rule the "but for" test does not apply. At [58] Beazley JA said only that in the case in question, the test was not appropriate. At [59] her Honour said that, in that case, "what has to be done is to ascertain what would have occurred for the respondent not to have engaged in conduct which was misleading". 272 Formulated in that way, the test is somewhat obscure. I understand her Honour to have meant that given the allegedly misleading or deceptive conduct, and in order to resolve the question of causation of loss or damage, the Court had to identify the way in which the misleading aspect of the conduct might have been negatived, and then identify the likely outcome, had such misleading effect been so negatived. 273 In that case, the misleading or deceptive conduct was the representation to a potential contractor that there was no plan of a particular outlet pipe, upon which basis the contactor tendered for the performance of certain work. In fact, there was a relevant plan and, had the contractor seen it, it would have tendered differently. The perceived difficulty in the case was that if there had been no representation about the existence or otherwise of the plan, the contractor would have tendered on the same basis as it had done, relying on the representation. In considering how the misleading or deceptive conduct may have been neutralized, her Honour considered that the relevant step was to assume that the plan had been disclosed, and that the contractor had tendered on that basis. Beazley JA acknowledged that there was no single, immutable test, and that the question of causation was to be resolved by reference to the purpose of the relevant statute as it relates to the circumstances of the particular case. Clearly, her Honour was not seeking to lay down a test of general application, but rather to identify, and deal with a peculiar difficulty which arose in a case in which there had been an express representation of a negative kind. In the present case, the difficulty addressed in Abigroup does not arise. In particular, the present case does not concern an actual representation of a negative proposition. Further, the Court must act on the case as pleaded by Addenbrooke. It pleaded that had there been disclosure of the matters pleaded in paras 51-135, or some of them, or some combination of them, it would not have invested in Cascade. There is no other case on causation. 274 I should say that for present purposes, I find no assistance in the decision of this Court in ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1. 275 The propositions advanced in para 36 (b)(ii) of the written submissions are particularly difficult to follow. I accept that a plaintiff may recover for loss suffered where a third party acts in reliance upon the defendant's misrepresentation. An example of that situation is the case in which an actual, or potential customer of the wronged party chooses not to deal with it because of such representation. I accept that the decision in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (2006) 63 ACSR 1 may well be limited as suggested in ABN AMRO. However I do not presently see how either proposition, or both of them together, can lead to the proposition that, "the hypothetical conduct of others such as Crichton and Gray, and other investors who may have influenced Addenbrooke's decision is something capable of being taken into account". Again I point out that no such case was pleaded. Further, Addenbrooke did not plead that had either Crichton, Gray, or others, formed a view or views as to the undisclosed matters, and expressed such view or views to Denis O'Neil, his decision would have been different. Denis O'Neil said no such thing. In a case where allegedly misleading or deceptive conduct is directed to a particular person or entity, the question is the effect upon that person or entity of a representation, or the likely effect of disclosure, had it been made. There may well be ways of proving such effect other than by calling the decision-maker to say that he or she was, or would have been affected in a particular way. Where the decision-maker gives such evidence, other evidence may support that evidence. However I cannot see how other evidence, led by the plaintiff or applicant, can effectively disprove, or supplement evidence from the decision-maker, identifying the extent of actual reliance or the extent to which it would have been affected by the disclosure. 276 The matters addressed in para 36(c) lead nowhere. There seems to be a suggestion that in addressing evidence concerning Addenbrooke's conduct, had various matters been disclosed, the Court should, in considering credibility, take into account the fact that such evidence is about a hypothetical situation. No doubt, there will be cases in which the hypothetical nature of the exercise will lead to a degree of imprecision in the evidence led in order to demonstrate causation. However this is not such a case. I see no reason for concluding that Denis O'Neil had any difficulty in giving an account of his decision-making. There is no reason to assume that the inadequacy of his evidence can be explained by reference to the fact that he was addressing his hypothetical conduct in a theoretical situation. Further, the shortcomings in his evidence are consistent with his having made a decision at an early stage, and on very limited information, well before Addenbrooke had any dealings with Duncan. As I have previously observed, the case on causation was defined by Addenbrooke in the statement of claim and by its evidence. This Court may not resolve the matter on any other basis. 277 In summary, paras 28-38 of Addenbrooke's submissions on appeal are infected by Addenbrooke's misunderstanding of the effect of the decision in Abigroup and its reliance on the unpleaded effects upon, "other investors including Crichton", of any disclosure of the undisclosed material.

CONCLUSION ON MISLEADING OR DECEPTIVE CONDUCT CASE 278 On appeal Addenbrooke relies heavily upon its assertion that the primary Judge did not consider the whole of its case, based on non-disclosure. To the extent that Addenbrooke sought to particularize the assertion, it seems to have focussed upon the alleged concerns entertained by Cascade, its directors and Duncan about the consequences, should the Obeid family's involvement in the Mt Penny project become known to the public. It is alleged that they were concerned that such public knowledge might be fatal to the proposed WEC deal and otherwise prejudicial to Cascade's commercial interests, including its holding of EL7406. The evidence concerning such matters is little more than speculation. Addenbrooke's case on appeal seems to be that such concerns ought to have been disclosed. No basis for such assertion has been offered. Further, the issue seems not to have played any significant role in Addenbrooke's case until the end of its oral closing submissions and its oral submissions in reply. In the end, however, the question is irrelevant. His Honour disposed of the case on the basis that Denis O'Neil's evidence identified and limited the scope of Addenbrooke's case. Denis O'Neil identified as being relevant to his decision-making only the involvement of the Obeid family in the Mt Penny project, and the fact that they were to be paid out, using the funds to be raised by the capital raising. The primary Judge's rejection of that evidence disposed effectively of the whole of the misleading or deceptive conduct case. 279 I see no error in his Honour's approach. The appeal as it concerns the misleading or deceptive conduct case against Duncan must fail.

misleading or deceptive conduct - gray and southern cross 280 I agree with the conclusions reached by Gilmour and White JJ and with their Honours' reasons.

UNCONSCIONABLE CONDUCT - DUNCAN 281 The primary Judge disposed of the unconscionable conduct claim on the basis that it failed upon the same basis as did the misleading or deceptive conduct claim. It was one of the other statutory causes of action referred to by his Honour at [437]. The claim was made pursuant to ss 12CB and 12CC of the ASIC Act. Claims for damages for conduct in breach of s 12CB must be brought pursuant to s 12GF and/or s 12GM. As I have previously pointed out, such a claim may only be brought by a person alleging loss. It is clear from Addenbrooke's submissions below that the damages claimed for alleged unconscionable conduct were the same damages as were claimed for the alleged misleading or deceptive conduct claim. If I am correct in concluding that, for the purposes of that case, Addenbrooke's causation case must fail, I see no way in which causation can be established in connection with the unconscionable conduct claim. Any claim to declaratory relief must also fail for the reasons which I have given in connection with the misleading or deceptive conduct case. His Honour correctly concluded that the unconscionable conduct case must fail.

unconscionable conduct - duncan's vicarious liability 282 Addenbrooke also alleged that Duncan was vicariously liable for unconscionable conduct on the part of Cascade. The proceedings against Cascade had been dismissed prior to the trial. At the trial, no direct attention was paid to the case against Cascade. 283 The claim of unconscionable conduct against Cascade is somewhat wider than that against Duncan personally, in that Addenbrooke also relies on the matters pleaded in para 29 of the statement of claim, namely the content of the representational document there identified. However the primary Judge rejected Addenbrooke's misleading or deceptive conduct case upon the basis of Denis O'Neil's evidence. Just as Addenbrooke could not establish causation for loss or damage against Duncan for the alleged unconscionable conduct, it could not do so as against Cascade. Hence the case against Cascade would have failed. His Honour correctly dismissed the accessorial claim as against Duncan.

MISLEADING OR DECEPTIVE CONDUCT - DUNCAN'S ACCESSORIAL LIABILITY 284 The bulk of the evidence which may have proven that Cascade had engaged in misleading or deceptive conduct was that pleaded in paras 51-135 of the statement of claim plus the representations in the representational document. For reasons already given Addenbrooke cannot demonstrate any causal link between such conduct and the loss allegedly suffered. In those circumstances, this claim would also have failed. His Honour was correct in dismissing the claim as against Duncan.

negligence - gray and southern cross 285 I consider that his Honour's finding as to causation is also fatal to this claim. I otherwise agree with the reasons of Gilmour and White JJ in concluding that there was no relevant duty of care.

BARNES V ADDY CLAIM 286 I agree with the conclusions reached by Gilmour and White JJ and with their Honours' reasons.

judgment in favour of cmg and cascade 287 I agree with the reasons and conclusions expressed by Gilmour and White JJ in connection with CMG. If it were necessary that Duncan's notice of contention, as it concerns Cascade, be resolved, I agree that the matter would have to be remitted for hearing. However, for reasons which I have given, I consider that Addenbrooke's case against Cascade would necessarily have failed, so that the accessorial claim against Duncan would also have failed.

the evidence ruling 288 I agree with the conclusions reached by Gilmour and White JJ and with their Honours' reasons.

breach of trust - sce notice of contention 289 I need not further consider the notice of contention.

damages 290 On my view of the case, it is not necessary to address the question of damages. 291 I would dismiss the appeal as against all respondents. Having regard to the views expressed by Gilmour and White JJ, I agree that we should receive submissions as to costs and as to other consequential matters. I certify that the preceding two hundred and ninety-one (291) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

REASONS FOR JUDGMENT Introduction [292] Factual setting [305] The contemplated sale to WEC [363] The cancellation of EL 7406 [370] The Judge's findings [372] The notice of appeal [384] Mr Duncan's notice of contention [394] The notice of contention of Mr Gray and SCE [398] The issues on the appeal [399] Delay in delivery of judgment [401] Mr Duncan's submission concerning abandonment [406] The pleaded positive misrepresentation case [410] Pleading as to future matters [414] The pleaded non-disclosure case [416] Addenbrooke's opening submissions at trial [420] Addenbrooke's closing submissions at trial [421] Addenbrooke's submissions concerning s 12DA of the ASIC Act [427] Misleading or deceptive conduct claim against Mr Duncan [443] Mr Duncan's challenge to the findings concerning his statements [444] The whole of Addenbrooke's non-disclosure case was not addressed [453] The effect of the finding of non-reliance [475] Misleading or deceptive conduct by non-disclosure [480] Absence of evidence from Denis O'Neil [495] Summary on the misleading or deceptive conduct claim against Mr Duncan [513] Unconscionability [521] The claimed accessorial liability of Mr Duncan [523] Barnes v Addy claim against Mr Duncan [527] The settlement of Addenbrooke's claims against CMG and Cascade [546] The evidence ruling [557] Misleading or deceptive conduct against Mr Gray and SCE [583] The claim in negligence against Mr Gray and SCE [609] The breach of trust claim against SCE [634] Remaining issues raised by the notice of contention of Mr Gray and SCE [656] Causation of damage/assessment of damages [657] Apportionability [670] Conclusion [673]

Introduction 292 On 25 November 2010, the appellant (Addenbrooke) paid $7,999,980.88 for the purchase of 171,784 shares ($46.57 per share) in Cascade Coal Pty Ltd (Cascade). It appears that these shares may now have little, if any, value, although this is disputed by the first respondent, Mr Duncan. Addenbrooke claimed that it had been misled by the respondents into making the investment. 293 Mr Duncan had been a director of Cascade from 19 February 2009 to 31 July 2009 and was, at material times, the chairman of White Energy Company Limited (WEC), a publicly listed company which was interested in acquiring all the shares in Cascade. He also had a substantial shareholding in Cascade. 294 Cascade was a closely held company with 6 shareholders (including a company associated with Mr Duncan). It held exploration rights in respect of a tenement known as the "Mount Penny Tenement" located some 60 kms northeast of Mudgee in New South Wales. In late 2010, Cascade and its shareholders contemplated the sale of the Mount Penny Tenement (or the shares in Cascade) to WEC (WEC Takeover). 295 The third respondent is Southern Cross Equities Pty Ltd (SCE). It carried on business as a provider of financial services and, in particular, as a stockbroker. Since about 2000, it had acted as stockbroker to Addenbrooke and, from time to time, had provided advice to it concerning shares and other investments. In November 2010, SCE accepted a mandate from Cascade to assist it in raising $28 million in capital by the issue and sale of new shares (the Capital Raising). 296 The second respondent, Mr Gray, had previously been a managing director of SCE, but in 2010 held the position of "Director Corporate". He was the person within SCE with whom Addenbrooke representatives were accustomed to dealing. Mr Gray was also the principal within SCE who dealt with the Capital Raising mandate from Cascade. 297 Addenbrooke based its claim at trial on statements made, and matters not disclosed, by the respondents on three occasions. It relied first on a "Deal Sheet" issued by, or on behalf of, Cascade, SCE and Mr Gray. The Deal Sheet was provided by SCE and Mr Gray to Addenbrooke on 17 November 2010. 298 Secondly, Addenbrooke alleged that oral statements made by Mr Gray on behalf of SCE on or about 13 November 2010 had been false or misleading. This claim was rejected by the trial Judge and there was no challenge to that finding on appeal. 299 Thirdly, Addenbrooke alleged that statements concerning the investment made by Mr Duncan at a presentation at the office of SCE on 19 November 2010 were false, and that other material matters had not been disclosed at that meeting (the Presentation Meeting). 300 Addenbrooke advanced several causes of action in support of its claims. These comprised (relevantly) claims of misleading or deceptive conduct in contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act); claims that Mr Duncan and Mr Gray were liable as accessories in respect of those contraventions; a claim that Mr Duncan had engaged in unconscionable conduct in contravention of s 12CB of the ASIC Act; a claim that SCE had been in breach of trust in the way in which it had dealt with the monies subscribed by Addenbrooke; a claim that the persons to whom Addenbrooke's investment had been paid by SCE held the monies on trust and were liable to account to it as trustees; and a claim that Mr Gray and SCE had breached a common law duty of care owed to it. 301 The trial Judge dismissed Addenbrooke's claims: Addenbrooke Pty Limited v Duncan (No 6) [2015] FCA 793. His Honour found, at [416], that a statement made at the Presentation Meeting to the effect that the funds invested would be used to reduce third party debt and creditors was, without further explanation, false and capable of seriously misleading prospective investors. However, the Judge found that Addenbrooke did not establish the element of reliance, holding that, even if its representatives had been told two further pieces of information (to be identified later), it would not have made any difference to its decision to make the investment, at [434]-[435]. His Honour considered that Addenbrooke's failure to establish reliance was fatal to "all of the statutory causes of action" on which it relied against Mr Duncan and Mr Gray for misleading or deceptive conduct and to its claim in negligence against SCE and Gray, at [436]-[437]. 302 The Judge went on to note that, even if Addenbrooke had established that the defendants were "liable", there remained "serious obstacles" in its way, "principally in the area of causation" at [441]. However, given that Addenbrooke's claims failed in any event, the Judge did not consider it necessary to discuss those questions. Nor did the Judge make any assessment of the damages to which Addenbrooke would have been entitled if it had succeeded in establishing liability. Finally, the Judge dismissed the respective cross-claims of SCE and Mr Gray, noting that they only "came into play" if Addenbrooke had succeeded against those parties, at [439]. 303 Addenbrooke now appeals on multiple grounds. Each of Mr Duncan, SCE and Mr Gray have filed notices of contention. 304 For the reasons which follow, we would uphold Addenbrooke's appeal with respect to the dismissal of its claims that Mr Duncan had engaged in misleading or deceptive conduct and unconscionable conduct, and that he had been knowingly involved in the misleading or deceptive conduct alleged against a former respondent. We would order a retrial of those claims. Otherwise we would dismiss the appeal.

Factual setting 305 Before coming to the issues arising on the appeal, it is convenient to record some matters of background. These matters were in the main non-contentious at the trial. 306 Addenbrooke is the family company of a Sydney businessman, Mr Denis O'Neil. He owns all its issued capital and is its chairman of directors. Denis O'Neil has been director of Addenbrooke since 1993. 307 In 2009 or 2010, Denis O'Neil's son, Ned O'Neil, became a director of Addenbrooke. He and his father are its only directors. Ned O'Neil was 25 years old in 2010. 308 Mr Smith has been employed by Addenbrooke since 23 August 1999, and has been its company secretary and financial controller since 2006. 309 The setting for many of the issues in the trial commenced with the grant of the Mount Penny Tenement in June 2009. In September 2008, the Department of Primary Industries (DPI) in New South Wales invited Monaro Mining NL (MMNL) to submit, as part of a closed tender process, an expression of interest in one or more of 11 coalfields, one of which was the area later encompassed by Exploration Licence 7406 (EL 7406). This became known as the Mount Penny Tenement. MMNL did submit an expression of interest in respect of EL 7406, using a special purpose vehicle, Monaro Coal (Aust) Pty Ltd (Monaro Coal), for that purpose. Monaro Coal later changed its name to Loyal Coal Pty Ltd (Loyal Coal). 310 Cascade and two other entities also submitted an expression of interest in respect of EL 7406. 311 Following a confidential evaluation, the DPI concluded in May 2009 that the expression of interest submitted by MMNL was the superior bid, at [56]. 312 However, at a meeting on 22 May 2009, MMNL decided not to proceed with its bid. Earlier, (in July 2008) it had granted an option to Voope Pty Ltd (Voope) to acquire 80% of the shares in Monaro Coal. Voope had not provided any consideration for the grant of the option. The evidence in the trial suggested that Voope was associated with Mr Eddie Obeid. We will refer later to evidence concerning Mr Obeid. 313 Following the decision of MMNL not to proceed with the expression of interest, a number of discussions occurred between a Mr Brook of Lehman Brothers, directors of Cascade and others. The Judge found that in these discussions Mr Brook was acting as the agent, and in the interests, of the Obeid family, at [59]. The discussions culminated on 5 June 2009 in Cascade and a company named Buffalo Resources Pty Ltd (Buffalo) entering into a joint venture agreement (the Joint Venture). Buffalo was a company associated with Mr Obeid or his family. It was acting as a bare trustee holding 88% for interests associated with the family of Mr Obeid and 12% for interests associated with Mr Brook through a company named "Warbie Pty Ltd". It is not necessary presently to outline all the matters which occurred between 22 May 2009 and 5 June 2009 leading to the Joint Venture. 314 Subsequently, on 9 June 2009, MMNL and Loyal Coal withdrew their expression of interest in (amongst others) the Mount Penny Tenement. Ten days later, the DPI informed Cascade that it would be awarded EL 7406. 315 Pursuant to the terms of the Joint Venture agreement entered into on 5 June 2009, Cascade agreed to vest 100% of its interest in the exploration licence in the Joint Venture and to grant Buffalo a 25% interest in recognition of its "intellectual property contribution" and in consideration of Buffalo "and its associates or related parties, including [Brook] and [Loyal Coal] withdrawing any existing applications in relation to the Mount Penny and Glendon Brook coal release areas" (another coal release area acquired by Cascade at or about the same time) as well as refraining from pursuing the grant of mining rights in relation to those areas. 316 In addition to their interest in Voope, the Obeid family had another interest arising from the circumstance that the Mount Penny Tenement was under, or adjacent to, a farm which they had purchased in late 2007 known as Cherrydale Park. They had also obtained options on two properties adjoining Cherrydale Park which were over or adjacent to the Mount Penny Tenement (collectively, the Three Properties). There was evidence in the trial that mining companies in New South Wales often have to pay handsome premiums in order to acquire the land over which mining tenements have been granted. 317 The Joint Venture agreement was amended on 6 June 2009 to include an option permitting Buffalo to acquire at any time a 25% interest in the Joint Venture for $1.00. 318 EL 7406 was actually issued to Mount Penny Coal Pty Ltd, a wholly owned subsidiary of Cascade (on 21 October 2009). For the most part, the distinction between Cascade, on the one hand, and Mt Penny Coal Pty Ltd, on the other, is not material to the issues in these proceedings. 319 On 11 May 2010, South East Investments Group Pty Ltd (South East) was substituted for Buffalo in the Joint Venture with Cascade. South East held its interest as trustee for the same interests as had Buffalo, that is, the Obeid family and for Warbie Pty Ltd. The director of South East was a solicitor retained by the Obeid family. Addenbrooke's case at trial was that South East was substituted for Buffalo in an attempt to disguise the interest of the Obeid family, but the trial Judge made no finding on that topic. 320 The trial seems to have proceeded to an extent on the basis of some assumed knowledge concerning Mr Obeid. This is understandable given that Mr Obeid had a public profile as a politician and as a Minister in a former New South Wales Government and given the widespread publicity concerning the investigation by the Independent Commission Against Corruption (ICAC) in New South Wales of matters which included Mr Obeid's conduct in relation to the Mount Penny Tenement. 321 However, as the Judge stated at [16], Addenbrooke's claim was to be determined by reference to the facts proved by the evidence adduced in the trial and without the "distorting effect of hindsight". The matters summarised below concerning Mr Obeid and his family are drawn from that evidence, much of which comprised newspaper articles. The Judge did not admit those articles into evidence as proof of the truth of their contents but as proof of the matters which were in the public domain at various times and as evidence of the assertions which were made from time to time by the authors of the articles, at [156]. 322 The evidence indicated that Mr Obeid had been a member of the Legislative Council in New South Wales and at one time the Minister for Minerals in the Labour Government in that State. In late 2007, a company associated with Mr Obeid (Locaway Pty Ltd) had bought Cherrydale Park in the Bylong Valley. As noted earlier, the Mount Penny Tenement granted to Cascade in mid-2009 was under or adjacent to Cherrydale Park. 323 The public inquiry by ICAC in New South Wales had commenced on 12 November 2012. The matters investigated by ICAC were said (in the trial) to include whether Mr Obeid (described as a "dominant factual player in the ALP") had, corruptly, manipulated another Minister, Mr Macdonald, amongst other things, to rig the public tender, demote a public official and to change maps of coal licences for his own benefit and that of his family. It seemed to be common ground at the trial that much of the information concerning these matters had come into the public domain only after Addenbrooke had subscribed for the shares in Cascade and that its effect had been to leave Mr Obeid's reputation "in tatters". 324 Addenbrooke did not make any allegation of inappropriate conduct by Mr Obeid and the Judge was not required to make any findings concerning his conduct. Understandably, he did not do so. These reasons too are not to be understood as containing any finding regarding the appropriateness or otherwise of Mr Obeid's conduct in relation to the Mount Penny Tenement. 325 In about August 2010, Cascade began to consider means of removing the Obeid family interest in the Joint Venture, so that it would control 100% of the project and avoid having to disclose the existence of the Joint Venture to any investor or acquirer of its shares. Much earlier, on 24 November 2009, Mt Penny Coal Pty Ltd entered into Put and Call Option Agreements with the Obeid family companies which owned the Three Properties for a total purchase price of $33.4 million, at [115]. 326 On 23 August 2010, a discussion paper was circulated to (apparently) Cascade's directors. It contained two options for the "restructure" of the ownership of the project. A second document, apparently linked to the discussion paper, addressed means of removing the Obeid family interest in the Joint Venture. It commenced by stating Cascade's aim: To eliminate the unincorporated joint venture so that [Cascade] controls 100% with known parameters, so that Cascade can be presented in this manner to any investor or acquirer without the complication of disclosing any JV agreement. 327 The discussion paper also identified a means of achieving this aim: It would be recommended to establish an intermediary vehicle (Arthur Phillip Intermediary Services Pty Ltd) between Cascade and the JV partners to assist the negotiations. This would result in the vehicle being always controlled by a known party regardless of what occurs in Cascade. It also allows Cascade to record in its financial accounts and agree to pay a fixed maximum price in a fixed term (or unless otherwise agreed) to the intermediary which can then agree to pay the relevant amount to the joint venture partner and the balance will be paid to the existing shareholders as required. 328 Finally, the discussion paper identified the "End Position" as follows: This will result in: • unincorporated Joint Venture being dissolved; • no new shareholders to appear on the register; • Cascade to own 100% of Mount Penny; • Cascade will owe Arthur Phillip Intermediary Services Pty Ltd say $50m. Corresponding entry will be Acquisition and Development costs at Mount Penny; • Arthur Phillip Intermediary Services Pty Ltd will have to pay the Joint Venture Partner eventually with the balance to the shareholder[s]. 329 As can be seen, the discussion paper contemplated Cascade paying a substantial sum to South East in order to dissolve the Joint Venture; that this would be done through an intermediary; that the entry in the Cascade accounts would be "Acquisition and Development costs"; and that by this means Cascade could be presented to an investor or an acquirer "without the complication of disclosing any JV agreement". Cascade's directors were by this time contemplating that WEC would be interested in acquiring Cascade. They saw the potential in these circumstances to achieve a substantial profit. 330 The evidence did not disclose the use made of the discussion paper within Cascade. However, the Judge found, at [171], that the evidence "demonstrated unequivocally" that by the time of preparation of the discussion paper, Cascade's shareholders had decided to buy out the Obeid family interest in the Joint Venture. 331 Addenbrooke's case at trial was that the involvement of the Obeid family in the Joint Venture was a matter of commercial concern and embarrassment to Cascade and its directors, especially given press speculation about the interest of Mr Obeid. It contended that Cascade and its directors as well as Mr Duncan sought to end that involvement and to do so in a way by which it would remain disguised. 332 In late September or early October 2010, Cascade reached agreement in principle that the balance of the Obeid family interest in the Joint Venture would be transferred by South East to Coal and Minerals Group Pty Ltd (CMG) for $60 million (later increased to $62 million). CMG was incorporated on 16 June 2010 and, from that date until 27 September 2010, was wholly owned by Mr Poole, a director of Cascade and of Arthur Phillip Pty Ltd (Arthur Phillip), a consultant firm retained by Cascade to which reference will be made shortly. Since 27 September 2010, CMG has been wholly owned by Arthur Phillip Nominees Pty Ltd, a subsidiary of Arthur Phillip. Mr Poole was the sole director of CMG at all times material to these proceedings. 333 Earlier in September 2010, Warbie Pty Ltd had agreed to sell its interest to a nominee of Mr Poole, CMG, for the sum of $1.8 million. Payment was made on 26 September 2010. 334 On 13 October 2010, the Cascade directors and shareholders agreed to convert the 70 shares in Cascade then on issue (and which were, in the main, owned by its directors or by interests associated with, or controlled by, the directors) to 7 million shares, and to issue a further 717,748 shares in Cascade (equivalent to 9.3% of its then capital) to CMG at $0.00001 per share (a total consideration of $7.17). Addenbrooke's case was that the split of shares had occurred so as to facilitate the contemplated means of removing the Obeid family from the Joint Venture. 335 On 20 October 2010, two significant agreements were executed: a Transfer Deed and a Rights Termination Agreement. The parties to the Transfer Deed were South East and CMG. By its terms, South East agreed to sell to CMG its right, arising from the Joint Venture agreement of 5 June 2009, to be issued, on payment of one dollar, 25% of the shares in Mt Penny Coal Pty Ltd. CMG bound itself to pay South East a total of $60 million in two principal tranches. The first tranche of $30 million was to comprise $5 million on the execution of the Transfer Deed, $2.5 million by 25 October 2010, $7.5 million by 28 February 2011 and $15 million by 30 June 2011. 336 The second tranche of $30 million was to be paid to South East by one of three alternative methods: by the issue or transfer by 30 April 2011 of shares in a public company such as WEC to a value of $30 million; by three instalments of $10 million in cash (to be paid on 30 June 2011, 31 August 2011 and 31 October 2011); or by a lump sum payment of $40 million by 15 December 2011. The evidence did not explain the payment of an additional $10 million if payment was deferred altogether to 15 December 2011. 337 The directors of Cascade expected that CMG would obtain the funds for the first tranche from a loan by its (Cascade's) shareholders of $7 million and from the proceeds of a Capital Raising ($28 million) by Cascade through a share issue. The contemplation at the time was that the second tranche of $30 million would come from the amount expected to be paid by WEC on its acquisition of Cascade. 338 The parties to the Rights Termination Agreement were CMG, Cascade and Mt Penny Coal Pty Ltd. By the Rights Termination Agreement, CMG agreed to the termination of the right which it had acquired from South East to be issued 25% of the shares in Mt Penny for one dollar; Cascade agreed to issue shares in itself to CMG to a value of $30 million (9.3% of its shareholding) and to pay $32 million to CMG (by a payment of $17 million by 20 February 2011 and a payment of $15 million by 20 June 2011). CMG would then have the means by which to honour its obligations to South East under the Transfer Deed. 339 Other agreements were also entered in to on 20 October 2010. CMG entered into a Deed of Charge which charged, amongst other things, the shares in Cascade held by CMG in favour of South East. Mr Poole, the sole director of CMG, gave an irrevocable undertaking to South East that he would not resign his position and would not appoint or procure the appointment of any other director to its Board until CMG had complied with its obligations under the Transfer Deed; Mr Poole's wife agreed to provide a mortgage over her shares in Cascade to South East to a total recovery limit of $22.5 million to support compliance by Mr Poole with the obligations he had accepted under the irrevocable undertaking; and Mrs Poole did provide such a mortgage (Second Amended Statement of Claim (2ASOC) [113]-[114]). 340 The Judge summarised the position by the following findings, at [190]: (a) in the period from about September 2007 to August 2008, members of the Obeid family (principally Mr Obeid's sons) had set about acquiring the Three Properties at Bylong which controlled the surface area above the area later covered by EL 7406; (b) by August 2008, the Obeid family members had gained control of those properties at a cost to them of $7.8 million (approximately); (c) during the period when MMNL was bidding for the exploration licences, the Obeid family had control of that bid through Voope; (d) by June 2009, Cascade Coal had agreed with the Obeid family members involved in the project that it would acquire the Three Properties and grant the Obeid interests a 25% interest in the mining Joint Venture; (e) by about the middle of 2010, the directors of Cascade wished to bring about an exit of the Obeid interests from the entire project and thereafter set about ensuring that this was done before any transaction with WEC took place; (f) the exit price for the Obeid interests from the joint venture was ultimately agreed at $62 million. In addition to that sum, Cascade was to pay the nominees of the Obeids who held the Three Properties a further amount of approximately $33 million. 341 The Judge also went on to find that the placement of shares in Cascade which was promoted to Addenbrooke and others in October and November 2010 (to which we will refer shortly) was devised and intended to provide some of the funds needed to bring about the final exit of the Obeid interests from the project, at [190(g)]. 342 WEC had, since October 2009, been actively considering the acquisition of Cascade and another company, South Australian Coal Company Ltd (SACL). To that end, WEC had raised $100 million in capital. The Capital Raising was announced on 11 November 2009 and had been undertaken on WEC's behalf by SCE. 343 There were close connections between Cascade and WEC as three of Cascade's directors (Mr John McGuigan, Mr Atkinson and Mr Kinghorn) were also directors of WEC, and each held or controlled a large number of its shares. In addition, Mr Duncan who was the chairman of the Board of Directors in WEC, also held shares in Cascade and WEC and had previously been a director of Cascade. 344 In February 2010, WEC had retained Arthur Phillip Pty Ltd to prepare a discussion paper regarding three scenarios involving the acquisition of Cascade and SACL. There was also a connection between Arthur Phillip and Cascade as one of the directors of Arthur Phillip, Mr Poole, was a director of Cascade and owned or controlled a significant shareholding in it. 345 The ownership of the shares in CMG, and Mr Poole's sole directorship of CMG, meant that there were also close connections between Cascade, Arthur Phillip and CMG. 346 The contemplated acquisition of Cascade by WEC was gathering momentum by October 2010. On 28 October 2010, Mr Poole sent to Mr Duncan, Mr Atkinson, Mr McGuigan and to Mr Levi and Mr Martin (who were "operatives" at Arthur Phillip) an email setting out the envisaged steps in relation to the acquisition: Step 1 Cascade completes vendor due diligence and sales preparation Nov 2010 Step 2 Cascade shareholders lend $7 million to Cascade which is partially used to repay CMG debt. Nov 2010 Step 3 Cascade raises $28 million by way of a share placement Mid-Nov 2010 Step 4 CMG paid $25.5 million to fully pay down debt Mid Nov 2010 Step 5 Cascade shareholders and WEC enter into a conditional heads of agreement for WEC to acquire 100% of shares in Cascade. Announce to ASX. End Nov 2010 Step 6 Acquisition formalities occur, including: negotiate agreements, due diligence, WEC EGM and transaction completion. Nov 2010 to end Feb 2011

347 As can be seen, Step 2 contemplated Cascade's shareholders lending it $7 million in November 2010. Step 3 contemplated Cascade raising $28 million by way of a share placement in mid-November 2010. Some $25.5 million was then to be paid to CMG which was to use it to "pay down debt". Plainly enough, the debt comprised the liabilities CMG had accepted to South East under the Transfer Deed of 20 October 2010. 348 On 3 November 2010, Mr Levi at Arthur Phillip sent an email to Mr Duncan, Mr Atkinson and to John McGuigan, attaching Cascade's pro-forma balance sheet. Mr Levi alluded specifically to the $32 million payable to CMG and to the $7 million shareholders' loans. The Judge found that Mr Atkinson discussed the contents of Mr Levi's email with Mr Duncan, Mr Poole and John McGuigan on 4 November 2010. 349 On 10 November 2010, Cascade gave a mandate to SCE and Arthur Phillip to undertake the Capital Raising. This was to raise $28 million by the sale of 601,307 new fully paid shares at $46.57 per share. The Judge found, at [190(g)], that the Capital Raising was devised and intended to provide some of the funds needed to bring about the exit of the Obeid interests from the project. 350 In the afternoon on 10 November 2010, Mr Levi sent an email to Mr Gray at SCE, attaching several draft documents in respect of the proposed Cascade placement which he anticipated would be given to potential investors. The Judge found that the draft documents were: the Deal Sheet; the Cascade Placement letter including a number of appendices to that letter; a document described as an introduction to Cascade, being a presentation providing details of Cascade's exploration licences; the Cascade Subscription Agreement; a Confidentiality Agreement. Appendix 4 to the draft Placement letter comprised a set of pro-forma balance sheets. Mr Levi described the purpose of the share issue as being to reduce third party debt and creditors. CMG was shown as a creditor in the amount of $25 million in Appendix 4. 351 On 17 November 2010, Mr Gray sent an email to each of Denis O'Neil, Ned O'Neil and Mr Smith at Addenbrooke, attaching the Deal Sheet. Addenbrooke pleaded that the Deal Sheet contained two representations upon which it had relied in making the investment. One of the representations was that the "[p]lacement proceeds will be applied to reduce third party debt and creditors". 352 On Friday, 19 November 2010, Denis O'Neil, Ned O'Neil and Mr Smith attended the Presentation Meeting at the Sydney office of SCE. There were some differences in the evidence as to who else attended the presentation, but the Judge found (at [402]-[404]) that, in addition to the Addenbrooke representatives, the attendees were Mr Gray, Mr Adams (another representative of SCE), Mr Duncan and Mr John McGuigan (both representatives of Cascade). There was no challenge on the appeal to the Judge's finding about the attendees. 353 Evidence was given at the trial about the Presentation Meeting by Denis O'Neil, Ned O'Neil, Mr Smith, Mr Gray and Mr Adams. Neither Mr Duncan nor Mr Atkinson gave evidence in the trial. The Judge considered that he should treat all the evidence about what occurred at the Presentation Meeting with "considerable caution", at [409]. 354 Immediately after the Presentation Meeting, Mr Gray informed Ned O'Neil that he and several other employees at SCE would be investing in the Capital Raising. 355 The Addenbrooke representatives did not make a decision about investing in the share placement at the meeting. That decision was made on Monday, 22 November 2010 and was to invest $6 million. On 25 November, Addenbrooke decided to increase its investment to $8 million. 356 On 25 November 2010, Addenbrooke executed a share subscription agreement with Cascade (the Addenbrooke Subscription Agreement) pursuant to which it agreed to subscribe for 171,784 (the Addenbrooke Placement Shares) shares in the Capital Raising at an issue price of $46.57 per share amounting to a total subscription price of $7,999,980.88. On the same day, Addenbrooke transferred the sum of $7,999,980.88 to a trust account nominated to it by SCE, which was an account maintained by Berndale Pty Ltd (the Berndale Trust Account). Other investors also participated in the share placement. 357 By a letter dated 1 December 2010 on the Cascade letterhead, Mr Poole, describing himself as "Director of Cascade Coal Pty Ltd", directed SCE to pay $25 million from the proceeds of the Capital Raising to the bank account of CMG and the balance to an account of Cascade itself. SCE acted on that direction on the following day and $25 million was paid to CMG. 358 On 3 December 2010, Mr Poole sent a letter on the Arthur Phillip letterhead to NAB asking it to transfer $5.25 million from the CMG account to an account held by his wife, Amanda Poole. Another document indicated that the amount of $5.25 million was the balance of a loan of $9.25 million still owing to Amanda Poole in repayment of amounts apparently paid by her in discharge of CMG's liabilities under the Transfer Deed. 359 The shares issued pursuant to the Capital Raising were not in fact issued to the investors in their own names. Instead they were, at the suggestion of SCE, issued to Lost Ark Nominees Pty Ltd (Lost Ark). Lost Ark was a nominee company of SCE of which Mr Gray was, at material times, a director. Cascade acted in accordance with SCE's request and, on 29 November 2010, Mr Poole in his capacity as director of Cascade certified that 601,307 shares had been issued to Lost Ark at a price of $46.57 per share. 360 On 25 January 2011, SCE provided a letter to Addenbrooke by which it certified that Addenbrooke's holding of 171,784 shares in Cascade was held on its behalf by Lost Ark. SCE also certified that the price had been $46.57 per share. 361 Mr Poole caused a notice of change to company details concerning Cascade to be lodged with ASIC on 29 November 2010. This notice disclosed the issue of 601,307 shares at $46.57 per share to Lost Ark. 362 Just on 20 months later, on 19 July 2012, Cascade (by its director, John McGuigan) lodged with ASIC a request for a correction to the notice lodged on 29 November 2010. The substantive part of the request was as follows: When ASIC was notified by lodgement of Form 484 of 'Amount paid per share' it was incorrectly recorded as $46.57 per share which resulted in an incorrect 'Total amount paid on these shares' recorded as $28,002,944.17. The correct amount paid per share was $0.00001, resulting in the correct total amount paid on the shares being $83.19. Also the correct 'Total amount paid' for 601,307 shares issued was $6.01. As can be seen, Cascade was now certifying that the shares issued to Lost Ark had been issued at $0.00001 per share and not $46.57 per share as originally recorded. The evidence did not disclose the circumstances leading to the lodgement of the request or its purpose.

The contemplated sale to WEC 363 On 26 November 2010, Cascade (by Mr Poole) wrote to WEC proposing the purchase by WEC of the shares in Cascade. Mr Poole contemplated WEC providing a consideration of $500 million, with $55 million to be paid in cash and $445 million by way of fully paid shares in WEC. 364 Four days later, WEC and Cascade executed a "free 28 day option and exclusivity agreement" pursuant to which WEC could acquire the whole of the share capital in Cascade for a total consideration of $486 million in addition to assumed liabilities of $14 million. The option agreement contemplated that $41 million would be paid in cash and the balance in WEC shares. Mr Duncan, as Chairman of WEC, made the announcement to the Australian Stock Exchange (ASX) of WEC's entry into the option agreement. Given that three directors of WEC (including Mr Duncan) were also shareholders in Cascade, an independent committee of the Board of WEC was to review the proposed transaction. 365 On 23 December 2010, WEC executed the option to buy the shares in Cascade. An announcement to that effect was made to the ASX. The sale was, however, subject to a confirmatory due diligence, the execution of a sale agreement, and approval by WEC's shareholders at a general meeting. 366 The confirmatory due diligence was completed in early February 2011 and the sales agreement was executed on 14 February 2011. 367 During the conduct of the confirmatory due diligence, questions arose concerning the involvement of Mr Obeid. The evidence indicates that the independent Board Committee was concerned to be informed of any matters indicating illegal or inappropriate behaviour associated with the grant of EL 7406. 368 In March 2011, questions were raised by the Australian Securities and Investments Commission (ASIC) and the ASX about the figure of $41,761,000 in Cascade's accounts described as "capitalised mining costs". The evidence indicated that there was some sensitivity by the Cascade directors about providing an accurate breakdown of that figure as that would have revealed the payments to CMG and the purpose of those payments. 369 It seems that the requested information was not provided to ASIC or the ASX. Instead, on 12 April 2011, WEC announced that it would not proceed with the purchase of the shares in Cascade. WEC's public announcement attributed its decision to "uncertainty" about the effects of mining in the Bylong Valley.

The cancellation of EL 7406 370 In August 2013, ICAC provided to the New South Wales Parliament a report which indicated that corrupt conduct had occurred in relation to the grant of the exploration licences in respect of the Mount Penny and Glendon Brook coal release areas. A further report from ICAC laid before the New South Wales Parliament in January 2014 recommended that, because the grant of EL 7406 and two other exploration licences were tainted by corruption, they should be "expunged or cancelled" by legislation. Subsequently, the New South Wales Parliament enacted the Mining Amendment (ICAC Operations Jasper and Acacia) Act 2014 (NSW) (the Mining Amendment Act) which operated to cancel, without compensation, the exploration licences granted to Cascade. 371 Mr Duncan challenged, unsuccessfully, the validity of the Mining Amendment Act in proceedings in the High Court: Duncan v State of New South Wales [2015] HCA 13; (2015) 255 CLR 388.

The Judge's findings 372 The Judge found that Mr Duncan had been well aware of the full extent of the involvement of the Obeids in the Mount Penny Tenement venture (both as landholders and as co-venturers in the mining part of the enterprise) and had been closely involved in the plans of the directors of Cascade to negotiate a complete exit of the Obeid family members from the project, at [191]. We add that this was not a finding that Mr Duncan had been aware of corrupt or inappropriate conduct by Mr Obeid in relation to the grant of EL 7406. 373 As already noted, the Judge considered that he should treat the evidence of all the attendees at the Presentation Meeting who gave evidence at the trial with "considerable caution", at [409]. 374 The Judge considered that, at the time of the Presentation Meeting, there had been a significant degree of sensitivity amongst the existing stakeholders in Cascade about the involvement in the Mount Penny Tenement of members of the Obeid family as landholders and, in particular, as participants in the Joint Venture. This led him to reject the evidence of Mr Gray and Mr Adams that they had made available to the Addenbrooke representatives a folder of documents including a pro-forma balance sheet which may have disclosed, or at least led to a train of enquiry resulting in the disclosure of, the participation of the Obeids, at [412]-[413]. The Judge also found that the fact that the Obeid family owned land in the area where the mine was to be developed was not mentioned at the Presentation Meeting, at [413]. 375 The Judge said, at [414], that he was "not convinced" that there had been "no discussion at all" about the statement in the Deal Sheet to the effect that the purpose of the placement was to raise funds in order to reduce third party debt and creditors. Instead, the Judge accepted that Mr Smith had asked about the purpose of the placement and that he had been told in response that the funds would be used to repay existing consultants and to meet expected consultancy fees. His Honour considered that Mr Duncan's explanation that the funds would be used to pay consultancy fees was literally true in the sense that CMG was said to have provided some consultancy services to the Joint Venture but that it was "stretching credulity" for anyone to accept that CMG or the Obeids had provided consultancy services to the value of $25.5 million, at [415]. As already noted, the Judge considered that the statement to the effect that the funds raised by the share placement would be used to reduce third party debt and creditors was, without further explanation, false and capable of being seriously misleading, at [416]. The Judge found such a statement to have been made at the Presentation Meeting and it is implicit in the findings that it was Mr Duncan who made the statement. 376 Given their importance to the matters agitated on the appeal, it is appropriate to set out these two paragraphs of the Judge's reasons: [415] In the end, if, as I have found, Duncan explained the purpose to which the funds would be used as paying consultants' fees, that was literally true in the sense that CMG was said to have provided consultancy services to the venture. However, I think that it is stretching credulity for anyone to accept that CMG or the Obeids for that matter provided $25.5 million worth of consultancy services to this venture. [416] A statement to the effect that the use to which the funds raised by the placement would be put was to reduce third party debt and creditors without further explanation would have been false and capable of being seriously misleading in November 2010. As I have found, such a statement was made on 19 November 2010. A similar statement was made in the deal sheet. 377 The Judge then turned to consider whether there was a causal relationship between the misleading or deceptive conduct alleged by Addenbrooke and its loss. He noted, at [419], that Addenbrooke relied upon "certain positive representations" and upon the failure of Duncan and Gray to put its representatives "fully in the picture" as to the "involvement of members of the Obeid family in the enterprise". The Judge then said: [420] In order to make good that case, Addenbrooke must satisfy the Court that the decision-maker or decision-makers who made the relevant decisions on its behalf relied upon the positive misrepresentations that were made to its representatives and counted on being told of the involvement of the Obeids in the enterprise because knowledge of their involvement would have been a material factor in the decision which Addenbrooke ultimately made. 378 The Judge considered who had been the decision-maker within Addenbrooke. He was satisfied that it was Denis O'Neil, thereby rejecting the evidence of Denis O'Neil and Ned O'Neil that it had been the joint decision of them and Mr Smith. The Judge accepted that Denis O'Neil had spoken to Ned O'Neil and to Mr Smith, to a Mr Jones, to Mr Gray and to a Mr Crichton (a friend and fellow investor in Cascade) about the proposal. Nevertheless, the Judge was satisfied that the decision to invest was made by Denis O'Neil, at [425]. The finding that Denis O'Neil was the decision-maker was an important finding which Addenbrooke did not challenge on the appeal. 379 The Judge concluded with respect to the decision-making of Denis O'Neil: [428] As far as Addenbrooke's investment in Cascade Coal was concerned, I have come to the conclusion that: (a) Throughout the period from August 2010 to late 2010, Denis O'Neil had a strong desire to invest in coal producing assets or companies involved in coal mining. This was because he was aware that the price of coal was high at the time and was likely to remain high for some time; (b) He regarded Jones, who brought the proposal to him, as a friend, as trustworthy and as someone who had good business and political connections. He considered Jones to be a very astute investor who had sound commercial acumen; (c) He knew Gray and thought that he too was well connected in investment circles; (d) His close friend and much admired businessman, Neville Crichton, was going to invest in the placement and that was good enough for him; and (e) He assessed the investment as short-term and likely to be very profitable. [429] In addition, I have come to the conclusion that Denis O'Neil had decided to go ahead with Addenbrooke's investment in Cascade Coal by no later than the end of October or early November 2010. He organised the Dwek loan funds to be available then. At the time that he took that step, he was not aware that there was to be a presentation on 19 November 2010. 380 The Judge then considered whether knowledge "about the Obeid's involvement in Cascade Coal" would have made any difference to Denis O'Neil's decision, at [432]. The Judge did not accept that Ned O'Neil or Mr Smith would have counselled Denis O'Neil against the investment had they known "that the Obeids had some involvement with it", at [432]. The Judge then found against Addenbrooke on the question of reliance, saying: [434] Given Denis O'Neil's palpable enthusiasm for the proposal, I do not accept that, had the Addenbrooke representatives been told that the Obeids owned the farms where the mining was likely to take place and had also, for some time, had an interest in the Joint Venture which was to exploit the mining rights but had recently been taken out both of the ownership of the land and the Joint Venture by Cascade Coal, that information would have made any difference to Denis O'Neil when it came to making his decision whether or not to invest in Cascade Coal. To my mind, he would have gone ahead anyway, had he known those facts. He was enthusiastic about coal, he was aware of some of the connections between White Energy and Cascade Coal and his money would be at risk for only a short time. The rewards were great and the risks relatively contained. [435] I am of the view that Denis O'Neil did not pay close attention to what Duncan said at the 19 November meeting and did not make his decision to invest based upon the circumstance that the funds to be raised by the placement were to be spent on infrastructure or consultancy fees. Nor did he rely on anything said by Gray. Nor did he count on Gray carrying out a due diligence. Nor did he expect Gray to tell him all there was to know about the proposal. It did not matter to him whether others were skimming off substantial sums in the enterprise. What mattered to him was whether he was likely to make a substantial profit from the investment. He made a judgment about that based upon his knowledge of the people involved and the fact that Cascade Coal was likely to be sold to White Energy. In my judgment, had he been told the truth about the involvement of the Obeids at that time, it would have made no difference to the decision which he made. 381 As can be seen, the Judge determined the issue of reliance adversely to Addenbrooke by considering what different knowledge "about the involvement of the Obeids" may have made to the decision of Denis O'Neil. 382 As noted earlier, the Judge considered that Addenbrooke's failure to establish reliance was fatal to its statutory causes of action based on misleading or deceptive conduct and to its claim in negligence against SCE and Mr Gray, at [436]-[437]. 383 The Judge then said, at [439], that it was unnecessary to consider the cross-claims of Mr Gray and SCE and dismissed those claims.

The notice of appeal 384 By its notice of appeal, Addenbrooke contends that the trial Judge failed, in a number of material respects, to advert to, let alone determine, several aspects of its pleaded case. Significantly, it complains that the Judge failed to apprehend that its misleading and deceptive conduct case was based not only on alleged misrepresentations but on non-disclosures going beyond the mere non-disclosure of the Obeid interest in the venture. More particularly, Addenbrooke complains that, to the extent that the Judge had addressed its claim of non-disclosure of material matters, he had, erroneously, confined his consideration to the non-disclosure of the involvement of the Obeid family in the Mount Penny project and to the course of action embarked upon by the directors of Cascade and Mr Duncan to remove the Obeid family as landowners in the area of the Mount Penny Tenement and as a Joint Venture participant. This meant, Addenbrooke contended, that the Judge had not addressed its claim that Mr Duncan had engaged in misleading or deceptive conduct by not disclosing that the purpose of the Capital Raising was to remove a minority interest in a Joint Venture (and not to reduce "third party debt and creditors") and by not disclosing the concern of Cascade, its directors and the common directors of WEC (put generally) that public knowledge that the Obeid family had, or had had, some involvement in the Mount Penny Tenement could jeopardise the prospect of WEC proceeding with the acquisition of Cascade. 385 Addenbrooke submitted that the Judge had determined the case as though it was only a claim, as against Mr Duncan, SCE and Mr Gray, of misleading or deceptive conduct pursuant to ss 12DA, 12GF and 12GM of the ASIC Act, as then in force, and a claim of common law negligence against Mr Gray and SCE. It contended that in doing so the Judge had failed to address its claim that several of the representations about which it complained were representations as to future matters within the meaning of s 12BB of the ASIC Act, and, in turn had not considered whether the respondents making the representations had had reasonable grounds for doing so. 386 Related to this group of complaints, is a complaint that the Judge had erred by ruling as inadmissible the transcription of an intercepted telephone conversation between Mr Duncan and Mr Kinghorn in April 2011. 387 Addenbrooke then complains in Ground 3 that the Judge failed to consider at all four of its pleaded claims, being: (1) the claim against Mr Duncan of unconscionable conduct in connection with the provision of financial services within the meaning of s 12CB of the ASIC Act; (2) the claim against Mr Duncan that he had been knowingly involved in the misleading and deceptive conduct and unconscionable conduct of Cascade; (3) the claim against Mr Duncan that he had been knowingly involved in a breach or breaches of trust by Cascade and, or in the alternative, by CMG; (4) the claim against SCE that it had committed a breach of trust and had been knowingly involved in a breach of trust. 388 The Judge made no mention of any of these causes of action in his summary of Addenbrooke's claims (at [22]). Addenbrooke submitted that this amounted to a failure to exercise jurisdiction, or alternatively a failure to give reasons. As will be seen, it is unnecessary for this Court to address these particular characterisations of the Judge's omission to address these causes of action. 389 Addenbrooke's notice of appeal includes a complaint (Ground 6) that the Judge had failed to use his advantage in seeing the witnesses because he had "delayed" delivering judgment for approximately 14 months. For reasons to be given later, this complaint is unmeritorious. 390 Addenbrooke also complains in Grounds [15] and [16] of the costs orders at first instance. However, it presented no submissions in support of these grounds and we have taken them to have been tacitly abandoned, except to the extent to which they refer to costs which will be dependent on the outcome of the appeal. 391 Addenbrooke's submissions recognised the strength of the Judge's findings that knowledge about the involvement of the Obeids would not have made any difference to the decision of Denis O'Neil. It submitted, however, that this finding did not address the whole of the case of non-disclosure which it had presented, with the effect that the finding was not conclusive of its claim. It also contended that the Judge had not addressed at all the question of its reliance on the positive misrepresentation which he had found Mr Duncan had made at the Presentation Meeting, namely, that the funds from the Capital Raising would be used to reduce third party debt and creditors. 392 The issues raised by the grounds of appeal not mentioned so far will be identified in the reasons which follow. 393 The respondents submitted that Addenbrooke had reshaped its case on the appeal and that the explanation for the Judge not having addressed matters about which Addenbrooke now complains is that those matters had not formed part of the case pursued by Addenbrooke at the trial or, at least, had not been relied upon ultimately at the trial. Senior Counsel for Mr Duncan in particular made a number of submissions of a generalised nature about the way in which Addenbrooke had conducted its case at first instance.

Mr Duncan's notice of contention 394 By his notice of contention, Mr Duncan raised four matters. First, that the Judge should have found that Addenbrooke's loss was not caused by his conduct but by the enactment of the Mining Amendment Act. 395 Secondly, Mr Duncan contended that the Judge should have found that judgments in the proceedings below in favour of CMG and Cascade entered on 7 May 2014 and 19 May 2014 respectively, had the effect that Addenbrooke was estopped or otherwise precluded from pursuing its claims that he had been knowingly involved in the alleged misleading or deceptive conduct, unconscionable conduct or breaches of trust by Cascade or CMG, as the case may be. He alleged, in the alternative, that it was an abuse of process for Addenbrooke to maintain those claims as against him. 396 Thirdly, Mr Duncan contended that the Judge should have found that Addenbrooke had failed to discharge its onus of proving that he had, during the Presentation Meeting, made the statements which it alleged. 397 Finally, Mr Duncan contended that, if he is liable to Addenbrooke for a contravention of s 12DA of the ASIC Act, then the Judge ought to have found that Addenbrooke's claim is an apportionable claim within the meaning of s 12GP of the ASIC Act and that his liability is reduced having regard to the culpability of 12 other identified persons.

The notice of contention of Mr Gray and SCE 398 The notice of contention of Mr Gray and SCE raised numerous matters. These included claims that the Judge should have found that aspects of the claims which Addenbrooke pursued at trial had not been pleaded and were not, in any event, established by the evidence; that the Judge should have found, applying Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592, that neither had made the representations in the Deal Sheet on which Addenbrooke relied; that if they had made those representations then they had had reasonable grounds for doing so; that they did not owe Addenbrooke a duty of care and, if they did, that they were not in breach of that duty; that SCE had not held the subscription monies on trust for Addenbrooke and had not been in breach of trust; that Addenbrooke had not suffered any loss, but if it had, its loss was caused by the Mining Amendment Act; that Addenbrooke had been guilty of contributory negligence and that, even if it did establish liability, its claim was an apportionable claim in respect of which there were numerous concurrent wrongdoers.

The issues on the appeal 399 The issues on the appeal are these: (1) should the Judge have found that Mr Duncan engaged in misleading or deceptive conduct at the Presentation Meeting? (Addenbrooke Grounds 1, 2(a), 2(b)(i)-(iii), 7; Mr Duncan's Ground 3). This requires consideration of Addenbrooke's complaint that the Judge did not address the whole of its pleaded case and, in particular, its non-disclosure case and of Mr Duncan's challenge to the Judge's findings concerning the statements he made at the Presentation Meeting; (2) did the Judge err in his evidence ruling regarding the intercepted telephone conversation (Addenbrooke Ground 14); (3) should the Judge have found that Mr Duncan was liable as an accessory in respect of the misleading or deceptive conduct of Cascade? (Addenbrooke Ground 3(b)) (4) should the Judge have upheld Addenbrooke's claim of unconscionable conduct by Cascade and Mr Duncan? (Addenbrooke Ground 3(a), 9); (5) should the Judge have upheld the claim that Cascade and/or CMG held Addenbrooke's subscription monies on trust, had breached that trust, and that Mr Duncan had been knowingly involved in that breach? (Addenbrooke Ground 3(c), 10, 11); (6) should the Judge have found that Mr Gray and SCE engaged in misleading or deceptive conduct? (Addenbrooke Grounds 1, 2(a), 2(b)(i)-(iii), 7; Gray/SCE Grounds 1, 6). As will be seen, this devolves to a question of whether one statement in the Deal Sheet constitutes misleading or deceptive conduct by Mr Gray and SCE; (7) should the Judge have upheld Addenbrooke's claim in negligence against Mr Gray and SCE (Addenbrooke Ground 13, Gray/SCE Ground 7) and, if so, should the Judge have found contributory negligence by Addenbrooke (Gray/SCE Ground 11(a)); (8) should the Judge have found that SCE held Addenbrooke's subscription monies on trust for it and that it had committed a breach of that trust by its payment out of those monies? (Addenbrooke Ground 3(d),12, Gray/SCE Ground 7A-8B); (9) did the Judge err in his findings concerning reliance? (Addenbrooke Grounds 2(b)(iv)-(vi), 5, 8); (10) should the Judge have upheld Mr Duncan's claim that judgments entered on 7 May and 19 May 2014 in favour of CMG and Cascade respectively had the effect that Addenbrooke was estopped or otherwise precluded from alleging that Cascade had engaged in misleading or deceptive conduct in which he had been knowingly involved or that either Cascade or CMG had breached a trust in which he had knowingly assisted, or that it was otherwise an abuse of process for Addenbrooke to have pursued those claims? (Duncan Ground 2); (11) in relation to the damages claims, should the Judge have found: (a) that Addenbrooke had not, in any event, proved that it had suffered recoverable loss (Gray/SCE Ground 9); (b) that the cause of Addenbrooke's loss was a supervening event, namely, the enactment of the Mining Amendment Act cancelling EL 7406 which had been granted to Cascade (Duncan Ground (1), Gray/SCE Grounds 9 and 10); (c) that Addenbrooke's claims were apportionable claims and the liability of the respondents was limited on that account? (Duncan Ground 4, Gray/SCE Ground 11(c)); (d) that the consideration received in settlement of other claims by Addenbrooke should be deducted from any total loss (Gray/SCE Ground 11(b)); (12) did the elapse of time between the completion of the trial (18 June 2014) and the delivery of judgment mean that the trial Judge failed properly to use his advantage in seeing the witnesses? (Addenbrooke Ground 6). 400 It is convenient to address the last of these issues first.

Delay in delivery of judgment 401 By Ground 6 of its Notice of Appeal, Addenbrooke complained that the Judge had failed properly to use his advantage in seeing the witnesses because he had "delayed" delivering judgment from 18 June 2014 (the conclusion of the trial) until 5 August 2015 (a little over 13 months). Addenbrooke did not abandon this ground although it did not advance submissions in support of it at the hearing. 402 The lapse of time between reservation and delivery of judgment in this case has to be seen in context. The Judge was informed that Mr Duncan had commenced proceedings in the High Court on 30 May 2014, challenging the validity of the Mining Amendment Act. All parties recognised that the outcome of that challenge had the potential to affect the assessment of the damages claimed by Addenbrooke. This led to the Judge discussing with counsel on the penultimate day of trial the way in which he should proceed. Ultimately, the Judge told the parties that he considered that he should decide the case on the assumption that the Mining Amendment Act was valid. 403 During the period in which judgment was reserved, the Judge was informed by the parties of the progress in the High Court of Mr Duncan's challenge, including of the hearing on 11 February 2015. The High Court delivered its judgment on 15 April 2015. By email to the parties the same day, the Judge's Associate invited the parties to lodge any submissions arising out of the High Court decision. Both Addenbrooke and Mr Gray and SCE lodged submissions on 6 May 2015. Thereafter, a period of three months only elapsed before judgment was delivered. 404 We consider it reasonable to infer that, in progressing the matter to judgment, the Judge took account of the progress of Mr Duncan's challenge in the High Court. In that circumstance, Addenbrooke's claim that Judge had "delayed" the delivery of judgment, without regard to the context just outlined, is a mischaracterisation of what had occurred. 405 However, the reason for the lapse of time is in a sense immaterial. The real question is whether the delay affected, or can be seen as apparently affecting, the decision-making in question. Unless there is some apparent operative effect of a delay, appealable error will not be shown: Tattsbet Limited v Morrow [2015] FCAFC 62; (2015) 233 FCR 46 at [2] (Allsop CJ). Addenbrooke made no attempt to demonstrate such an operative effect. Accordingly, this ground of appeal fails.

Mr Duncan's submission concerning abandonment 406 Before addressing the remaining issues, it is necessary to address the submission advanced by Mr Duncan on the appeal to the effect that Addenbrooke had implicitly abandoned, at trial, parts of its pleaded case concerning him which it now contends were not addressed by the Judge. This explained, it was said, the circumstance that the Judge had not addressed all the matters raised by Addenbrooke. Related to this was a submission that Addenbrooke was advancing a new case on appeal. 407 Mr Duncan's outline of submissions, provided in advance of the appeal hearing, identified Addenbrooke's submissions on causation as being in this category, at [41]-[48]. In particular, Mr Duncan submitted that Addenbrooke's submissions concerning the form of indirect causation had not been made at trial. Addenbrooke's submissions on this topic were to the effect that, if all matters had been disclosed, it would have operated to deter others, including SCE and Mr Gray, from being involved with the effect that Addenbrooke too would have declined to participate in the capital raising. 408 At the hearing, counsel for Mr Duncan expanded the submission concerning a changed approach by Addenbrooke, contending that it had developed during the hearing a non-disclosure case which it had not pursued at trial. Counsel described this as the "purpose case". Counsel submitted that Addenbrooke was now contending on the appeal that the subject matter of Mr Duncan's non-disclosure extended to the purpose of the existing Cascade stakeholders, including Mr Duncan, in extracting the Obeids from the Mount Penny Tenement and in pursuing the Capital Raising, namely, to avoid any risk that public knowledge of the Obeid interest might prejudice Cascade's "tenure of the Mount Penney Tenement and the possibility of a sale of Cascade or EL 7406 to White Energy". 409 Mr Duncan's counsel submitted on the appeal that Addenbrooke's "so-called purpose case … wasn't run in submissions, it wasn't run in evidence". Counsel acknowledged that such a case had been pleaded but submitted that Addenbrooke had, explicitly, not relied on it in the submissions at trial. This submission requires close examination of the claims pleaded by Addenbrooke against Mr Duncan and of the way those claims were presented at trial.

The pleaded positive misrepresentation case 410 Addenbrooke's pleaded case was that the Deal Sheet contained two misrepresentations, namely, that the shares to be issued by Cascade as part of the Capital Raising were to be issued at $46.57 per share and that the proceeds of the Capital Raising would be applied to "reduce third party debt and creditors". It contended that both were false. First, because Cascade had issued shares to CMG as part of the Capital Raising at an issue price of $0.00001 per share and not at $46.57 per share. Secondly, because the subscription monies were not to be applied to reduce third party debt and creditors but instead were being raised to facilitate the exit of the Obeid family interests from the Joint Venture. 411 Addenbrooke next pleaded that Mr Gray had made several misrepresentations about the investment in Cascade at a meeting in November 2010. It relied in this respect on the evidence of Ned O'Neil. Mr Gray, on the other hand, denied that any such meeting had occurred. The Judge concluded, at [396] that he was "not persuaded" that such a meeting had occurred, nor that Mr Gray had made the statement attributed to him by Ned O'Neil. Addenbrooke has not appealed against that finding and it is not necessary to refer further to that part of its case. 412 Thirdly, Addenbrooke relied on statements made at the Presentation Meeting on 19 November 2010 (2ASOC [39]). As already noted, the attendees at that meeting were Denis O'Neil, Ned O'Neil and Mr Smith from Addenbrooke, Mr Gray and Mr Adams from SCE, and Mr Duncan and Mr McGuigan from Cascade. Addenbrooke pleaded in [39] of its 2ASOC that Mr Duncan made four material misrepresentations at that meeting: (a) That the purpose of the Capital Raising was to continue developing the assets of Cascade, primarily the Mount Penny Tenement ("Mount Penny Tenement") by: (i) investing in investigative drilling; (ii) paying the necessary land option costs; (iii) paying for the necessary plant and equipment, including paying deposits in respect of equipment that has long lead time so as to secure its availability; and (iv) paying the costs associated with submitting a mining licence application; … (b) That the monies raised in the Capital Raising were necessary to: (i) invest in investigative drilling; (ii) pay land option costs; (iii) pay for plant and equipment, including paying deposits in respect of equipment that has long lead time so as to secure its availability; and (iv) pay for the costs associated with submitting a mining licence application; … (c) That the timing of Capital Raising was due to: (i) the high costs of running the business; and (ii) particularly, the significant cost of apply for a mining lease in respect of the Mount Penny Tenement; … (d) That the Capital Raising was being conducted because some of the shareholders of Cascade, as at November 2010: (i) were not in a position to make the required equity contributions; and (ii) did not want their stakes in Cascade diluted, as between themselves. … 413 Addenbrooke alleged in [42] that each of these representations was false because: (a) The purpose of the Capital Raising: (i) was not to raise monies that could be used in developing the mining assets of Cascade by, inter alia, paying for drilling and investing in the necessary plant and equipment; (ii) was to raise monies for the purpose of facilitating a payment or payments to [the Obeid family interests]; … (b) The timing of the Capital Raising: (i) was not due to the high costs of running the business; (ii) was not the result of the significant cost of applying for a mining lease in respect of the Mount Penny Tenement; (iii) was the result of a desire, on the part of Cascade, to raise monies for the purpose of facilitating a payment or payments [to secure the exit of the Obeid family interests]; … (c) The Capital Raising: (i) was not being conducted because some of the shareholders in Cascade were: (i) not in a position to add to their investment in the company; and (ii) did not want their shareholding diluted; (ii) was being conducted to raise monies for the purpose of facilitating a payment or payments for [the exit of the Obeid family interests].

Pleading as to future matters 414 Addenbrooke also alleged that each of the representations of Mr Duncan was a representation as to a future matter within the meaning of s 12BB of the ASIC Act. This meant that each representation was to be taken to be misleading if Mr Duncan did not have reasonable grounds for making the representation (s 12BB(1)). Further, Mr Duncan was to be taken not to have had reasonable grounds unless he adduced evidence to the contrary (s 12BB(2)). 415 These several alleged misrepresentations were alleged, as against Mr Duncan, Mr Gray, Cascade, Southern Cross, Mr Poole and Arthur Philip, to constitute misleading and deceptive conduct in relation to financial services in contravention of s 12DA of the ASIC Act.

The pleaded non-disclosure case 416 A significant part of Addenbrooke's case at trial was that Mr Duncan had engaged in misleading or deceptive conduct by failing to disclose material matters. No corresponding allegation was made against Mr Gray or SCE. Paragraphs [51] to [135] of the 2ASOC contained Addenbrooke's plea of non-disclosure. Many of the paragraphs were simply a recitation of the course of events commencing in June 2008 with the creation of a number of coal release areas by the New South Wales Government and continuing to the Capital Raising in November 2010. Paragraph [130] then pleaded that none of the "facts and purposes" pleaded in identified paragraphs had been disclosed to Addenbrooke. Paragraph [133] pleaded that the non-disclosure of the identified matters constituted misleading or deceptive conduct within the meaning of s 12DA of the ASIC Act and para [132] pleaded that, if those "facts and purposes" had been disclosed, Addenbrooke would not have participated in the Capital Raising. 417 The matters pleaded as having not been disclosed by Cascade, its directors and Mr Duncan, were: (a) the sequence of events by which Cascade entered into the Joint Venture agreement with Buffalo on 5 June 2009 and the circumstance that Buffalo held its interest in the Joint Venture on trust (2ASOC [80] to [86]); (b) that Cascade, its directors and Mr Duncan knew or had reason to suspect, at least from 6 June 2009, that the Obeid family had a substantial interest in Buffalo and the 25% interest in the Joint Venture or, alternatively, that by at least April/May 2010 Cascade and its directors had strong suspicions that the Obeid family was entitled to a substantial part of the 25% interest in the Joint Venture and did not wish to be in partnership with them (2ASOC [90], [91]); (c) that from at least August 2009 or, alternatively, by May 2010 it was a matter of political and commercial concern and embarrassment to Cascade and its directors that the Obeid family was involved, or potentially, involved in the Joint Venture with Cascade (2ASOC [94]); (d) that from at least 28 October 2009, or alternatively by May 2010, Cascade and its directors had been concerned that the New South Wales Labour Government would lose the election scheduled to be held in 2011, that a coalition government may order an enquiry into the grant of the Mount Penny Tenement and the involvement of the Obeid family in the grant of EL 7406, and that the results of such an enquiry could be prejudicial to Cascade, its tenure of the Mount Penny Tenement and the possible sale of Cascade itself or EL 7406 to WEC because it may reveal the interest of the Obeid family in the purported 25% option interest (2ASOC [95]); (e) the common shareholdings and directorships in WEC and Cascade (2ASOC [97]); (f) the substitution of South East for Buffalo as the holder of the interest in the Joint Venture agreement (2ASOC [99]); (g) the course of events commencing with the discussion paper of 23 August 2010 (2ASOC [102]), the splitting of the 70 shares in Cascade into 7,000,000 shares (2ASOC [103]), the issue of a further 717,748 shares in Cascade at $0.00001 to CMG (2ASOC [103] [104]), the entry into the Transfer Deed, the Rights Termination Agreement and the other agreements on 20 October 2010 (2ASOC [105], [113] Deed of Charge) [115]), and the events in the Capital Raising; (h) the purpose of the Capital Raising being to raise $25 million of the amount to be paid under the Rights Termination Agreement (2ASOC [119]); (i) that Cascade and its directors considered that once WEC made an offer for Cascade, the shares held by CMG would have a value of $30 million which could be sold into the WEC takeover, so as to enable the total payment of $62 million to be made to the Obeid family (2ASOC [121]); (j) that Cascade and its directors considered that it would not be possible to account for the amount to be raised by the Capital Raising in the accounts of Cascade as that could give rise to queries by the Board of WEC (excluding the common directors of WEC and Cascade) and regulatory authorities such as ASIC, or to an enquiry into Cascade established by an incoming coalition government which could in turn give rise to regulatory and due diligence concerns as to the circumstances of the disposition of the proceeds of the Capital Raising (2ASOC [122]); (k) that because of these concerns, Cascade, its directors and Mr Duncan had determined that the proceeds of the Capital Raising should be paid into the account of CMG to at least $25 million and that the Capital Raising be recorded as having taken place at $0.00001 for each share issued (2ASOC [123]); (l) that Cascade's purpose was to procure the exit of South East, and thereby the Obeid family, from the development of the Mount Penny Tenement for the purposes earlier pleaded including its concerns as to queries by the independent WEC directors and ASIC and regulatory and due diligence concerns by any incoming coalition government ((2ASOC [125]); and (m) Cascade, its directors and Mr Duncan were concerned that public knowledge that the Obeid family held an interest, or was capable of holding an interest, in the Mount Penny Tenement could give rise to both political and commercial concerns that there had been impropriety in relation to the tender process having regard to Mr Eddie Obeid's membership of, and involvement in, the Labour Party, his prominence as a Member of Parliament in the then New South Wales Government and his relationship with the then Minister of Mines in that Government and that this could be prejudicial to Cascade, its tenure of the Mount Penny Tenement and the possibility of selling Cascade or the Mount Penny Tenement to WEC (2ASOC [126]). 418 Accordingly, the core allegations of non-disclosure by Mr Duncan were that he had deliberately failed to disclose to Addenbrooke that: (a) he and the common directors of Cascade and WEC were concerned that the material financial interest of the Obeid family and, in particular, that of Mr Eddie Obeid in the Mount Penny Tenement, would, if it were made public, jeopardise both the Capital Raising and the sale of the Mount Penny Tenement or the Cascade shares to WEC; and (b) Cascade's Capital Raising was intended to procure funds to buy out the Obeid family's interests and was structured in such a way as to ensure that this purpose could not be discerned by the public, prospective participants in the Capital Raising and the independent directors of WEC. 419 Addenbrooke also contended that the positive misrepresentations to investors, including it, as to the purpose of the Capital Raising, were made to conceal the true purposes of the Capital Raising.

Addenbrooke's opening submissions at trial 420 In his written opening of Addenbrooke's case at trial, counsel made clear that Addenbrooke relied on all of the matters pleaded at [51]-[131] of the 2ASOC, including that the main reason for the non-disclosure of these matters was that they had the potential to upset the plans of Cascade's directors and other shareholders to sell their shares, at a massive profit, to WEC after the Joint Venture had been terminated. This, it was submitted, would be a matter of contention between the parties.

Addenbrooke's closing submissions at trial 421 Addenbrooke's written closing submissions dealt extensively with its case based on s 12BB of the ASIC Act concerning misrepresentations as to future matters alleged to have been made to it by Mr Duncan. 422 In particular at [49] it submitted the following: The evidence before the Court plainly establishes that Duncan did not have reasonable grounds for making the representations he did at the meeting on 19 November 2010. Duncan did not have reasonable grounds for representing to the Addenbrooke representatives that: (a) The funds raised in the Capital Raising would be used to pay for: "Drilling expenses, investigation drilling" (Ned O'Neil, T90.05-1-); "costs associated with the application for the mining license" (Ned O'Neil, T90.05-10, T219.27; land option costs (Ned O'Neil, T90.1-10); deposits for the necessary plant and equipment (Ned O'Neil, T90.5-10); "progressing with the EIS that was required to be lodged" and "numerous consulting fees that were required to be paid as part of that process" (Smith, T18.05); and paying "arms-length consultants" (Smith, T261.05) retained by Cascade; (b) The purpose of the Capital Raising was to meet the various costs set out at (a) immediately above; (c) The timing of the Capital Raising was due to the high costs of running the Cascade business, particularly the significant costs of applying for a mining lease in respect of the Mount Penny Tenement …; and (d) The Capital Raising was being conducted because some of the shareholders in Cascade, as at November 2010, were not in a position to make the required equity contribution and did not want their stakes in Cascade diluted as between themselves (Ned O'Neil, T92.6-12). 423 At [50] Addenbrooke submitted that Mr Duncan was aware of Cascade's involvement in a Joint Venture with interests controlled by the Obeid family from at least mid-2009 and was aware of negotiations to terminate the Joint Venture and to secure the exit of the Obeid family involvement in the Mount Penny project. The submission continued: he knew that the proceeds of the Capital Raising were to be paid to CMG; he knew $32 million was payable by Cascade to CMG as at the time of the Capital Raising and that the monies raised in the Capital Raising, coupled with approximately $7 million in directors' loans, were to be paid to CMG accordingly; that the Capital Raising was being conducted for the purpose of facilitating a payment to Cascade's joint venture partner (which was controlled by members of the Obeid family) … 424 Importantly, Addenbrooke then submitted, consistently with its pleadings and conduct of the trial, that Duncan knew that: secrecy needed to apply in relation to these transactions if the Capital Raising was to be successful, as well as the transaction with WEC [and with] CMG as part of a deal that was struck to buy out their interest in Cascade's mining Project. 425 Then, at [51] of its closing submissions, Addenbrooke submitted: Further reinforcement of these submissions can be seen from the way in which Duncan amongst others sought to conceal from the WEC Board the real purpose for which the amount $41.761 [million] shown in the Deloitte Report had been expended as capitalised mining costs (CB11,4201). In the face of enquiries from the independent members of the WEC Board and the ASX false explanations were sought to be provided as to how that money had been expended on mining costs. [w]ithout disclosing the involvement of the Obeids or the payment to CMG. 426 In conclusion at [52], Addenbrooke submitted: In sum, the failure of Duncan to adduce any evidence "to the contrary" for the purposes of s 12BB(2) of the ASIC Act, means that he "is taken not to have had reasonable grounds" for making the representations he did at the 19 November 2010 meeting. Consequently, s 12BB(1)(b) is satisfied, and the representations are taken "for the purposes of Subdivision D (sections 12DA to 12DN) to be misleading (s 12BB(1)). Alternatively, as a matter of evidence he did not have reasonable grounds.

Addenbrooke's submissions concerning s 12DA of the ASIC Act 427 Section 12DA provides that a person must not, in trade or commerce, engage in conduct in relation to financial services which is misleading or deceptive, or likely to mislead or deceive. 428 In its written closing submissions, under this head of claim, Addenbrooke again relied upon both misrepresentations made by Mr Duncan as well as non-disclosure of material facts by him. It submitted relevantly at [86]-[87] that Mr Duncan had been aware of sufficient of the facts pleaded at [51]-[126] of the 2ASOC to warrant findings of not inadvertent non-disclosure, with the consequence that he had been involved in Cascade's contravention of s 12DA. Significantly for present purposes, at [88] Addenbrooke submitted that: In sum, Duncan as a substantial shareholder and former director of Cascade, and someone who was intimately involved in the company, knew the true purpose of the Capital Raising, how the monies raised from the Capital Raising were to be used and the true reason for the time of the Capital Raising. The evidence establishes that notwithstanding that he resigned as a director of Cascade in July 2009, Duncan continued to be actively involved in the affairs of Cascade, including in respect of the proposed Capital Raising. There was no reasonable basis for the representations he made during the presentation on 19 November 2010 (see paragraph 76) and no excuse for not referring to the history set out in paragraphs 51 to 126 (of the 2ASOC) of which he obviously had considerable knowledge. The evidence before the Court shows that the object of the Capital Raising was to raise monies for the purpose of removing the Obeid family interest from Cascade, because of concern that disclosure of that fact could affect the proposed takeover of Cascade by WEC - an event from which Duncan amongst others stood to reap substantial profits. (Emphasis added) 429 And then at [90]: In light of what Duncan knew at the relevant time and the representations he made, there can be no doubt that the failure to refer to the true purpose of the Capital Raising and the involvement of the Obeid Family in Cascade was the result of a deliberate and conscious decision on the part of Duncan. (Emphasis added) 430 Given these submissions, it is apparent that the entire pleading of Addenbrooke against Mr Duncan set out in the 2ASOC was in contention throughout the trial to its conclusion. 431 Senior counsel for Mr Duncan at trial was alert to Addenbrooke's reliance on all aspects of its pleaded case. In his closing written submissions he said, at [5]-[7]: [5] Mr Duncan is alleged in the Second amended Statement of Claim ("the Second ASOC") to have engaged in misleading or deceptive conduct in two respects. The first ("the Positive Misrepresentation Case") involves the suggestion that at a meeting attended by representatives of Addenbrooke, Cascade and Southern Cross Equities Pty Ltd ("Southern Cross") on 19 November 2010, Mr Duncan falsely represented to those present that: (a) "the purpose of the Capital Raising was to continue developing the assets of Cascade, primarily the Mount Penny Tenement by investing in investigative drilling, paying the necessary land option costs, paying deposits for the necessary plant and equipment, and paying costs associated with submitting a mining licence application; (b) the monies raised by the Capital Raising were necessary to invest in investigative drilling, pay land option costs, pay deposits for plant and equipment and pay for the costs associated with submitting a mining licence application; (c) … the timing the Capital Raising was due to the high costs of running the business, particularly the significant costs of applying for a mining lease in respect of the Mount Penny Tenement; and (d) the Capital Raising was being conducted because some of the shareholders of Cascade, as at November 2010, were not in a position to make the required equity contribution and did not want their stakes in Cascade diluted as between themselves." [6] The second aspect of the case against Mr Duncan ("the Failure to Disclose Case"), which cannot realistically be kept separate from the Positive Misrepresentation Case, proceeds upon the premise that as at the time of the Capital Raising, he knew: (a) the precise terms of the transaction , entered into on 5 June 2009, by which Buffalo Resources Pty Ltd ("Buffalo Resources"), a company allegedly controlled by members of the Obeid Family, was given a right to a 25 percent (b) That those terms included, as consideration for the rights given to Buffalo Resources, the withdrawal by Loyal Coal Pty Ltd ("Royal Coal") of its bid for the allocation of the Mount Penny exploration Licence; (c) That this so-called Obeid involvement in Cascade's mining venture could prejudice that company's retention of the Mount Penny exploration licence and with it, the possibility of Cascade being acquired by White Energy Company Limited ("WEC"); and (d) The various steps by which, and the precise terms on which, the Obeid's Joint Venture interest was terminated, including the role played by Coal and Minerals Group Pty Ltd ("CMG") in procuring this outcome. [7] It is then said that the failure by Mr Duncan to disclose those matters to Addenbrooke was misleading and deceptive, and that if they had been disclosed, Addenbrooke would not have sought to participate in the Capital Raising. Importantly, it does not seem to be suggested that the Positive Misrepresentations per se had any consequences for the decision to invest. Nonetheless, the case about what was not said can only be analysed in the context of what was in fact said. (Emphasis added) 432 Thus, senior counsel for Mr Duncan accepted at trial that both "the positive misrepresentation case" and "the failure to disclose case" were in issue and, further, that they were in issue in combination and not discrete cases to be considered in isolation from each other. Indeed, he emphasised at [7] that it was not, as he understood it, Addenbrooke's case that the positive misrepresentations alone had any consequences for the decision to invest and that the non-disclosure case could only be analysed in the context of what had in fact been represented. That understanding accords with our own. 433 Addenbrooke's non-disclosure case as to purpose was revisited in oral closing submissions at trial. It was submitted on behalf of Addenbrooke that Cascade and its directors should have disclosed that they were concerned that WEC may not wish to proceed with the takeover if it knew of the Obeid's interest and that they were concerned that disclosure of the Obeid interest could have the effect that the mining licence might not be issued. Indeed, the submission went so far as to describe the concealment of those concerns and the related true purpose of the Capital Raising as a "fraud". The transactions to remove the Obeid interest were, it was submitted, "redolent with secrecy and concealment and dishonesty". 434 Mr Duncan submitted on the appeal that Addenbrooke had, by its counsel, adopted a more confined position during the oral closing submissions. He referred first to the following exchange between the Judge and senior counsel for Addenbrooke during the closing addresses, at 599 of the Transcript: His Honour: But the issue for me in this area, which you call in reliance, is really - if your client, and for this purpose I will talk of Denis O'Neil for the moment … Mr Douglas: Yes. His Honour: … had been told that - I will call them the Obeids, but - the Obeid interests had from the start, back, a year before, procured a commercial interest in the venture, and also stood to gain from the ramping up of the price to be paid for the land to the true extent, which in crude terms is 25 million coming from the new investors and 7 from the existing ones. The real question for me is to decide whether, if Denis O'Neil had been told all of that, he would still have gone ahead in circumstances where there was [a] very good chance that the White transaction would go ahead at the time he invested, and therefore, despite the fact that there were people associated with this who, on some of the evidence, people might say they didn't want to have a bar of - nonetheless, he was in and out, really, and he would end up with shares in White Energy as - in the longer term, or shorter term if he chose to sell them. But the 8 million was going to come back … Mr Douglas: Yes. His Honour: … Pretty quickly if the White transaction went ahead. And the fact that these other people were going to take a very significant sum on the way through, on one view of things, wouldn't have bothered him. Mr Douglas: Well … His Honour: Because, I mean, how do you - how else do you make $2 million in two or three months? 435 Counsel for Mr Duncan submitted that in this passage the Judge had identified the counterfactual which he was required to consider and that counsel for Addenbrooke had taken no issue with it. In particular, counsel had not submitted that the Judge was required to consider the counterfactual position had Denis O'Neil been told that the purpose of the termination of the Joint Venture and the Capital Raising was to protect Cascade against the risk that it may not be awarded a mining lease and therefore might not be able to be sold to WEC. 436 In our opinion, further exchanges between counsel for Addenbrooke and the Judge indicate that the construction put on the quoted passage by Mr Duncan is not reasonably open. 437 In an exchange which commenced a few lines after the exchange quoted above, counsel for Addenbrooke articulated the non-disclosure case. He did so in a way which indicated, in our view, that the non-disclosure claim was not being abandoned or confined in the way for which Mr Duncan now contends. We refer first to the following passage at 599-600 of the Transcript: His Honour: Well, I just - I mean, anyway, the question is, for you … Mr Douglas: Yes. I understand that. His Honour: … If he had known all there was to know, would he still have invested? Mr Douglas: Yes. His Honour: In circumstances where I find that his appreciation of the likely workout of this was that the White deal would go ahead, irrespective of the Obeids' involvement, because it was all going to happen quickly, and who cares, that's the question on your side of things. On the other side of things, of course, they have to explain why it was they went to so much trouble to conceal, and why it was they didn't tell the whole story to someone in Mr O'Neil's position. Mr Douglas: Yes. His Honour: Now, there's one part of that [which] can be explained by saying they wanted to keep the independent directors of White in the dark, but its more than that, probably; isn't it? Mr Douglas: Well, in our respectful submission, your Honour, it's a recognition by them that if they had in fact disclosed this to potential investors, then that in turn, firstly, would have led to those potential investors going cold on the idea and secondly would have scrapped the White deal. They couldn't have any disclosure of this matter at any time before the White deal had, in fact, been successful. And its important to bear in mind, in this context, this fact: that the respondents obviously appreciate that the disclosure of the Obeid interest was significant, because they filed an affidavit from Mr Jones in filed pleadings … His Honour: I can't take any notice of what they filed, Mr Douglas. Mr Douglas: You can't take notice of what the pleading is, your Honour, but you can - sorry - the affidavit. But you can take notice of the pleadings, because in the pleadings they allege that my clients were told by Mr Jones of the Obeid involvement, and that was an answer to any question of causation in this case. Mr Jones was not called to give evidence. The fact that they would file that evidence and make that allegation in their pleadings speaks volumes for what they think the significance of that disclosure was, because they knew - well, it's really an implied admission, in effect. But they recognised that that knowledge was important for investors to know. His Honour: I don't know about that. I think the - it's probably just a response to your case, which is if we had known and wouldn't have gone ahead. But the more telling thing is the event at the time, which is that they took considerable steps to cover up … Mr Douglas: Yes your Honour. Yes. It's very telling. (Emphasis added) 438 Counsel for Addenbrooke made a further submission concerning this aspect of the non-disclosure case at 601: Mr Douglas: And his evidence is greatly supported, in our respectful submission, by what, in fact, happened in relation to the WEC transaction, which your Honour has gone through all the material, and shows quite clearly that they were very reluctant to give any detail at all in relation to the 41 million figure of capitalised mining expenses showing in Cascade's accounts in a Deloitte report. So … His Honour: Well, that was because it basically consisted of the 32 that went to … Mr Douglas: That's right. 439 In our opinion, these passages indicate that Addenbrooke had not abandoned its whole non-disclosure case as Mr Duncan contends. Two additional considerations support that view. First, it is reasonable to expect that, if senior counsel had intended to abandon part of the non-disclosure case, he would have done so in clear and express terms. Secondly, had senior counsel intended to abandon the whole non-disclosure case, it is difficult to understand why he made the submission in the passages set out above. We note, in fairness to counsel for Mr Duncan that when, during the appeal submissions, his attention was drawn to these passages he accepted that they made difficult his submission that Addenbrooke's counsel had abandoned the whole non-disclosure case. 440 We have recounted these matters in some detail, given the submission made by Mr Duncan that Addenbrooke had abandoned, or at least not pursued at first instance, this part of its pleaded case or was pursuing now a case not advanced at trial. Those submissions are not supported by the course of events at trial and cannot be accepted. 441 We consider it appropriate, in fairness to the Judge, to say that the various elements of the non-disclosure case do not appear to have been given the same emphasis at trial as they were on appeal. Nor were the submissions at trial framed in a way which was apt to identify clearly each of the ways in which Addenbrooke put its case, the elements of each, and the evidence bearing upon them. Nevertheless the more extensive non-disclosure claim had not been abandoned (and had been pursued) and the submissions of Mr Duncan on this topic cannot be accepted. 442 We will now turn to the grounds of appeal which concern Mr Duncan.

Misleading or deceptive conduct claim against Mr Duncan 443 As already noted, the Judge found at [415]-[416] that Mr Duncan did make statements at the Presentation Meeting which were false and capable of being seriously misleading. These were his statements to the effect that the funds raised in the Capital Raising would be used to repay existing consultants, for likely future expenditure on consultancy fees, and to reduce third party debt and creditors.

Mr Duncan's challenge to the findings concerning his statements 444 By [3] of his Notice of Contention, Mr Duncan challenged the Judge's finding that he had made the statements which the Judge attributed to him. Counsel's submission was to the effect that the state of the evidence did not permit any positive finding, or at least any safe finding, as to what Mr Duncan had said at the Presentation Meeting, with the consequence that the Judge should have found that Addenbrooke had failed to discharge its onus of proving that the statements attributed to Mr Duncan had been made. 445 This contention cannot be upheld. There was evidence that Mr Duncan had made statements of the attributed kind at the Presentation Meeting. Although the task of making findings as to what was said at the Meeting was obviously difficult, it was for the Judge to assess the witnesses and to make such findings as were appropriate. The findings which the Judge made were appropriate and no error in the Judge's approach has been shown. 446 In order to indicate why this is so, it is sufficient to refer to the evidence only briefly. We note first that the Deal Sheet said that the proceeds of the share placement would be applied "to reduce third party debt and creditors". 447 In his evidence in chief, Mr Smith stated: Q: So then - did you raise any particular questions at the meeting? A: I asked Mr Duncan what the money was to be used for. Q: And what did he say to you? A: Mr Duncan said that the company was progressing with the EIS that was required to be lodged, and that there [were] numerous consulting fees that were required to be paid as part of that process. Some of those fees had been accrued, some of them were to be incurred and that those monies were to be used for that purpose. In his cross-examination of Mr Smith, counsel for Mr Duncan did not challenge the accuracy of this account, although he did test his evidence more generally. 448 Ned O'Neil's evidence was that Mr Duncan had said that the funds raised would be used for "drilling expenses, investigation drilling, and they would be used for costs associated with the application for the mining licence, costs associated with optioning up the land parcels and also costs associated with securing the machinery and plant equipment required to develop the mine". In cross-examination Ned O'Neil said that he had thought that expenses of this kind were encompassed by the statement in the Deal Sheet that the funds would be used to pay third party debt and creditors. He also said that Mr Duncan had spoken of the funds being used to pay "expenses" rather than "debt". 449 In his examination in chief, Mr Gray said that Mr Duncan had said at the Presentation Meeting that the purpose of the fund raising was to "repay some external debt and leave the company with some working capital for the short-term". Mr Gray then gave the following evidence: Q: Did he say anything about the party that that debt was to be paid to? A: Yes. He mentioned Coal & Minerals Group for $25 million and that they had been providing services to allow the [exploration] lease to move towards a mining lease. 450 In his evidence in chief, Mr Adams said that Mr Duncan told the Presentation Meeting that Cascade had "incurred significant debt in getting to this point of development, and they were looking to raise $28 million from new investors … . The proceeds were for working capital and [to] pay down the debts and creditors of the company at that point." 451 Obviously enough, there were some inconsistencies between the witnesses' accounts. Nevertheless, the evidence just summarised provided a basis for the Judge's findings. Contrary to the submission made on Mr Duncan's behalf, the fact that only one of these witnesses deposed that Mr Duncan had spoken of the repayment of "external debt" does not provide a proper basis to challenge the finding. 452 It is appropriate to record again that, as at 19 November 2010, Mr Duncan was no longer a director of Cascade. However, as a shareholder in Cascade, he had an obvious interest in the Capital Raising succeeding. It is not easy to understand otherwise the reason for Mr Duncan having attended the Presentation Meeting and, on the evidence of Mr Smith and Mr Gray, his having taken the "lead" in the presentation.

The whole of Addenbrooke's non-disclosure case was not addressed 453 It is apparent that the Judge considered Addenbrooke's case on non-disclosure rested on its claim that its representatives had not been told of "the involvement of the Obeid family in the project". See, for example, [14], [17], [419]-[420], [430] and [432]-[433] of the reasons. The Judge's understanding that Addenbrooke's non-disclosure case against Mr Duncan was confined in this way is seen most clearly in [419]-[420]. We set out both below, even though [420] has been quoted earlier in these reasons. [419] In the present case, Addenbrooke relies upon certain positive representations as being false and misleading. It also relies upon the failure on the part of Duncan and Gray to put the Addenbrooke representatives fully in the picture as at October/November 2010 insofar as the involvement of members of the Obeid family in the enterprise was concerned. [420] In order to make good that case, Addenbrooke must satisfy the Court that the decision-maker or decision-makers who made the relevant decisions on its behalf relied upon the positive misrepresentations that were made to its representatives and counted on being told of the involvement of the Obeids in the enterprise because knowledge of their involvement would have been a material factor in the decision which Addenbrooke ultimately made. (Emphasis added) 454 In fact, as already seen, Addenbrooke's non-disclosure case was more extensive than a complaint that it had not been told of the "involvement" of the Obeid family in the project. At issue, as part of the non-disclosure case, was why Mr Duncan and the Cascade directors engaged in the course of deliberate non-disclosure. The Judge did not consider this. He did not make any relevant findings as to why it was that Mr Duncan and the Cascade directors wanted to remove the Obeids from the Project. We are satisfied that his Honour omitted to address, or adequately address, those parts of the pleaded case of Addenbrooke which made those very allegations. The pleaded case was that none of the "facts and purposes" pleaded in paragraphs, including [102]-[126A], of the 2ASOC were disclosed: 2ASOC [130]-[131]. The "facts and purposes" (see 2ASOC [125]) included: (a) that Cascade directors (and Mr Duncan) considered that the amount raised in the Capital Raising would have to be concealed in Cascade's accounts because open accounting could give rise to queries by, inter alia, the board of WEC (other than the common directors): 2ASOC [122]; (b) the concealment of the key transaction features of the Capital Raising was to enable the WEC Takeover to proceed: 2ASOC [123]; (c) removing the Obeid Family interests because of concerns on the part of Cascade directors and shareholders (including Mr Duncan) that public knowledge of that interest could give rise to political and commercial concerns which "could be prejudicial to Cascade, its tenure of the Mount Penny Tenement, and the possibility of selling Cascade or the Mount Penny Tenement to WEC": 2ASOC [126]; (d) concealment of the true purpose of the Capital Raising: 2ASOC [126A]. 455 The purpose of the Cascade Directors and Mr Duncan, and their reason for wanting to keep secret the reasons for the Obeid family being taken out of the deal, were central to the non-disclosure case pleaded by Addenbrooke. We accept Addenbrooke's submissions that his Honour did not deal with this central question. His Honour did find that the Cascade directors and Mr Duncan were "sensitive" about the involvement of the Obeid family, both as landholders and co-venturers, and preferred to offer Cascade to WEC "as a clean entity which had complete control of the Mt Penny coal reserves area rather than as an entity involved in an unincorporated Joint Venture with members of the Obeid family": J [410]. This does not deal with the pleaded secretive purpose. Further, his Honour considered that the reason for this "sensitivity" was a matter of speculation: J [410]. This conclusion is not supported on the evidence. There was considerable evidence capable of grounding inferences as to the pleaded purposes. None of the directors including Mr Duncan gave evidence to deny them. 456 There was sufficient evidence to which Addenbrooke points, which was arguably capable of supporting the pleaded "purposes", including that: (a) the negotiations between Cascade and WEC (of which Mr Duncan and other Cascade directors were also directors - Mr Kinghorn, Mr John McGuigan and Mr Atkinson) for the acquisition by WEC of either the Mount Penny Tenement or of Cascade shares would, if successful enable WEC and the common directors to control and develop the coal resources in the Mount Penny Tenement, and yield substantial profits to the Cascade shareholders from the sale of their shares in Cascade, or the Mount Penny Tenement, to WEC. Interests associated with each of the directors Messrs Poole, Kinghorn, Atkinson, McGuigan and shareholders Mr Duncan and Mr Jones stood to make approximately $60 million each if the acquisition went forward; (b) a significant catalyst for the plan to remove the Obeids was the publicity in relation to the Obeid family's interest on 18 May 2010 both in the properties and possibly in the Mount Penny Tenement. The Cascade directors were studious to ensure that the involvement of the Obeid family interests was not disclosed to financiers in relation to any proposed development of the Mount Penny Tenement. The Discussion Paper of 23 August (and its sequelae) disclose that significant efforts were taken to redact from any documents which might go to financiers, and any reference to the Obeids' interest in the Joint Venture through their corporate vehicle Buffalo Resources: J [94]-[104]. The inference was reasonably available that they considered that such disclosure would adversely affect their ability to obtain financing; (c) as from 26 August 2010 when Mr Levi sent to Mr Poole a PowerPoint presentation dealing with the potential acquisition of Cascade by WEC, a proposal was on foot for Cascade to be on-sold to WEC: J [173]-[174], and such a deal with WEC was the main option being explored by Cascade for developing and profiting from the Mount Penny Tenement. This was reasonably capable of supporting an inference that, just as concerns about disclosures of the interests of the Obeids were considered by the Cascade directors to affect adversely the ability of Cascade to obtain financing, so too would disclosure of that material, directly or indirectly to WEC, adversely affect the prospects of the directors obtaining personal profit. That was the case pleaded: 2ASOC [122], [125]. 457 We do not accept Mr Duncan's submission that the evidence could equally give rise to the inference that he and the other directors and shareholders of Cascade were not motivated by anything other than an appreciation that a company with a 100% interest in an exploration licence is a more appealing and more reliable takeover target than one with a mere 75% interest. Neither Mr Duncan nor any other Cascade director went into the witness box to say as much. Moreover, it does not explain the misleading representations actually made by Mr Duncan and others as to the purpose of the Capital Raising. If it were merely this suggested reason, why not say so? 458 Accordingly, we accept Addenbrooke's submissions that there was a body of evidence reasonably capable of supporting several inferences, in the absence of any other evidence to the contrary by Duncan or any other director of Cascade. First, that disclosure of the Obeid family interest and the plan to remove them was considered by the Cascade directors and Mr Duncan to affect adversely their personal interests and the ability of Cascade to obtain financing through the WEC Takeover. Second, a related inference that it was considered that disclosure of that information to Addenbrooke and the other investors being solicited for funds in November 2010, would adversely affect their preparedness to participate in the Capital Raising. 459 The misleading and deceptive reasons advanced as to the purpose of the Capital Raising, namely, for paying consultancy fees and reducing third party debt and creditors, deliberately disguised the true purposes that the monies raised were to be used to secure the exit of the Obeid interest from the Joint Venture, whose identity and existence was not disclosed or to be disclosed to investors. Indeed the securing of that exit was itself dependent upon the WEC takeover being a success because, unless it was a success, the total consideration payable for the exit would not be available. In that event, the Cascade shares issued to CMG would not have been able to be sold into the WEC takeover, to obtain the balance of the consideration. 460 Mr Duncan submits, in answer to this, that whatever the cause of action pleaded, whether it be statutory or arising in equity, the case advanced by Addenbrooke proceeded upon the premise that, as at November 2010, the mere fact of a previous Joint Venture arrangement between Cascade and entities ultimately controlled by members of the Obeid family was sufficient: (a) to jeopardise Cascade's prospects of converting its exploration licence in respect of the Mount Penny tenement into a mining lease; and (b) to threaten the proposed takeover of Cascade by WEC. In our view, and for the reasons we have explained, this is a mischaracterisation of Addenbrooke's case at trial. 461 Mr Duncan then submits that the difficulty confronting Addenbrooke is that, instead of embarking upon the necessary exercise of proving the threat that the involvement of the Obeid family actually posed to the value of Cascade and its prospects either of securing a mining lease or being acquired by WEC, it was content merely to assume, as a truth universally acknowledged, that the Obeids were, for a protracted period, a "cancer upon the public and commercial life" of New South Wales. His submission, put another way, was that Addenbrooke relied upon the repeated invocation of the name "Obeid" as a substitute for evidence, in circumstances in which, having regard to the allegation of fraud advanced against Mr Duncan, the case pleaded by Addenbrooke, and the evidence deployed in seeking to make good the various elements of that case, were required to be assessed against the standard of proof described in Briginshaw v Briginshaw (1938) 60 CLR 336. 462 Mr Duncan submits that the truth of the premise upon which Addenbrooke's case rests was thus never established and that the failure of that premise necessarily entails the rejection of Addenbrooke's claims. He submits this to be the necessary consequence despite his acceptance that the Judge did not deal with a number of the causes of action pleaded against Mr Duncan in Addenbrooke's 2ASOC. 463 These submissions again misconceive Addenbrooke's case at trial. It did not plead that the matters not disclosed would at the time likely have resulted in the mining lease not being obtained or WEC not proceeding with the takeover of Cascade or the Capital Raising not being successful. Moreover, it was never Addenbrooke's case that it was merely the existence of the Obeid interest in the Joint Venture which ought to have been disclosed. 464 Rather, as we have explained, Addenbrooke's pleaded case was that the Cascade directors, and Mr Duncan, considered that it would not be possible to account for the amount to be raised by the Capital Raising in the accounts of Cascade for a number of reasons. First, their combined concern that the disclosure of the true purposes of the Capital Raising could give rise to queries, by regulatory authorities, including ASIC, and by the independent directors of WEC. Second, their combined concern that, because of this, an inquiry into Cascade established by an incoming Coalition government in New South Wales could give rise to regulatory and due diligence concerns as to the circumstances of the disposition of the proceeds of the Capital Raising: (2ASOC [122]). 465 It was pleaded that, because of those considerations and concerns, in effect, the books and records of Cascade would be prepared so as to conceal the true position: (2ASOC [123]). 466 Further, Addenbrooke pleaded that, it was the concerns of the Cascade directors and shareholders including Mr Duncan that public knowledge of the Obeid interest could give rise to political and commercial concerns that there had been impropriety in relation to the tender process, having regard to Mr Eddie Obeid's membership of and involvement in the Labour party, his prominence as a Member of Parliament in the then New South Wales Government, and his relationships with a former Minister for Mines in that Government and that these matters could be prejudicial to Cascade, its tenure of the Mount Penny Tenement and the possibility of selling Cascade or Mount Penny to WEC: (2ASOC [126]). 467 Then Addenbrooke pleaded that because of these concerns held by Cascade, its directors and Mr Duncan, the true purpose of the Capital Raising could not be disclosed: (2ASOC [126A]). 468 Whether those "considerations" and "concerns" of the Cascade directors and Mr Duncan were actually warranted, is not to the point. These were their considerations and concerns as pleaded. This was a pleading as to their state of mind. That they ought to have been disclosed was the case pleaded and run. It was reasonably open on the evidence to find that it was those matters which gave rise to the positive misrepresentations and in turn to the concealment of the true purpose of the Capital Raising and the reasons behind it. Other considerations apart, Cascade's, its directors' and Mr Duncan's concerns may have been fuelled by knowledge they or some of them had, but which was not publicly known, concerning the Obeids and their involvement in the Joint Venture. 469 Indeed, as we have mentioned, the Judge at [412], found that, relevantly, Mr Duncan, had no reason to disclose the very complicated transactions which had been designed and in part implemented to conceal the exit of the Obeid interests from the Joint Venture as this might "bring about a state of affairs whereby [Addenbrooke], then being courted [as an investor], might ask awkward questions" about those transactions. 470 Moreover, there was other evidence of purpose to which the trial Judge made no reference. Addenbrooke submits that at least the following evidence of events postdating Addenbrooke's investment is capable of being confirmatory of the purpose alleged by it in the 2ASOC as having existed continuously before and since then: (a) as noted already, immediately subsequent to the placement, on 26 November 2010, Cascade offered itself to WEC upon the terms set out in the letter of that date to the directors of WEC on the basis that it held a 100% interest in the Mount Penny Tenement. On 1 December 2010 Mr Poole, in both his capacity as a director of Cascade and Arthur Phillip, wrote to SCE directing that $25 million of the proceeds of the Capital Raising be paid to CMG, and this was done. Thereafter, by a series of transactions, including payments made to and by his wife, Amanda Poole, an amount of $32 million was paid to South East for the benefit of the Obeid family interests. (b) in the context of the Capital Raising and WEC takeover, Deloitte prepared an independent experts' report (the Deloitte report) which disclosed that there was an asset constituted by capitalised mining costs of $41,761,000 which, in fact, included the $32 million paid to CMG and then paid to South East. This, Addenbrooke submits could only have been done on instructions. The accounts of Cascade were never drawn up to reflect the proceeds of the payment, and the registration of the issue of the shares, whilst initially reflecting the purchase price, was subsequently corrected on 19 July 2012 to reflect that the shares had been issued at $0.00001 per share. To all intents and purposes, it was as if the Capital Raising and the extraction of the Obeid family interests had never occurred. (c) a series of questions and answers entitled "Devil's Advocate Cascade Questions" were formulated by Arthur Phillip for public disclosure in relation to the Deloitte report which did not identify the CMG expenditure of $32 million. There was a series of emails between Messrs Poole, Duncan, Ivan Maras of WEC and Mr Levi and others during the period 5 to 11 April 2011 in which the "capitalised mining costs" were set out by Cascade representatives and its agents in an apparent attempt to hide from the independent directors of WEC how the money from the Capital Raising had in fact been spent. Indeed no reference was made to the Capital Raising. The questions and answers also attempted to address avoidance of the disclosure of the Obeid involvement. (d) Subsequently, in April 2011, a Ms Harris of the Australian Stock Exchange (ASX) became interested in these matters. Her queries and those of WEC went unsatisfied. Shortly thereafter the WEC takeover did not proceed. These events, Addenbrooke had argued, were connected. Addenbrooke sought to rely upon all of this evidence as evidence of the deliberate nature of the conduct of Cascade and Mr Duncan in not disclosing the true purpose of the Capital Raising, and as evidence of the fact that, if that purpose had been disclosed, the Capital Raising would not have proceeded, and Addenbrooke would not have had the opportunity to participate, or participated, in the Capital Raising. 471 Addenbrooke submits that all of these matters were relied upon before the Judge to support the submission that the true purpose of the Capital Raising was as set out in [122] to [126A] of the 2ASOC. However, as is the fact, the Judge does not advert to this material at all, nor to the submissions made concerning its import individually or in some combination. 472 Contrary to Mr Duncan's submission, it is not speculation, to consider events occurring after the Capital Raising as evidence of what Cascade's and Mr Duncan's purposes were at the material times before and during the Capital Raising. The evidence was, in our opinion, capable of supporting a conclusion that Cascade and Mr Duncan continued to dissemble with the ASX and with WEC, the true purpose of the Capital Raising, and that they maintained their deception in this regard in order to avoid the WEC Takeover being scuttled. 473 We have considered whether the Judge's repeated references to the "involvement of the Obeids" or like expressions can be regarded as a shorthand term by which the Judge intended to emcompass the whole of the pleaded non-disclosure case. However, the Judge's elaboration of the non-disclosure case does not allow such an explanation to be adopted. That elaboration appears at [13]-[14] of the reasons: [13] Addenbrooke argues that it was induced to invest in Cascade Coal by representations made at the 19 November meeting and by representations made in the deal sheet. Addenbrooke also complains that it was not told certain matters which, had they been communicated to it, would have caused it not to invest in Cascade Coal. The matters of which they were not told concerned the involvement of the Obeid family in the project. [14] In particular, it is Addenbrooke's case that, as at November 2010: (a) Family members of the Obeid family, of which the patriarch was Edward Moses Obeid MLC (Eddie Obeid) and/or corporate or individual nominees of family members of the Obeid family, owned or had a legal entitlement to acquire at their election three rural properties which comprised all or most of the land area over which EL7406 had been granted; (b) In mid-2009, a company which was the nominee of members of the Obeid family, Buffalo Resources Pty Ltd (Buffalo Resources), had entered into an unincorporated joint venture with Cascade Coal pursuant to which Buffalo Resources was to receive 25% of the proceeds of the development or sale of the Mt Penny coal reserves; (c) From about the middle of 2010, the directors of Cascade Coal had embarked upon a course of action designed to take out the Obeid family and its nominees as landowners in respect of EL7406 and as joint venturer with Cascade Coal in respect of the Mt Penny coal reserves; (d) The capital raising in which Addenbrooke was invited to participate was devised and implemented in order to raise sufficient funds for Cascade Coal to enable it to pay out the Obeid family and its nominees and to sever all ties with the Obeid family and its nominees; and (e) Both Duncan and Gray knew of the matters to which I have referred at subpars (a) to (d) above but did not disclose any of those matters to any of Denis O'Neil, Ned O'Neil or Smith at the 19 November meeting or at any other time. Addenbrooke argues that all of those matters should have been disclosed to it and that, if any one or more of them had been disclosed, it would not have invested in Cascade Coal. 474 As can be seen, that summary did not include Addenbrooke's claim that Mr Duncan had not disclosed that he and the Cascade directors were concerned that disclosure of the financial interest of the Obeid family in the Mount Penny Tenement would, if it became public, jeopardise the Capital Raising or the sale of the Mount Penny Tenement or Cascade's shares to WEC, that the Capital Raising was intended to procure the funds to buy out the Obeid family interests, and that it had been structured in such a way as to ensure that this purpose could not be discerned by the public, prospective participants in the Capital Raising and the independent directors of WEC.

The effect of the finding of non-reliance 475 Does it matter that the Judge did not address the whole non-disclosure case, given that His Honour determined the issue of reliance adversely to Addenbrooke? On the Judge's findings, Denis O'Neil had a "palpable enthusiasm" for the investment and was seemingly determined to proceed with it in any event. The Judge's findings in this respect are summarised at [428]-[429] and [434]-[435] which are set out earlier in these reasons. Earlier at [429], the Judge found that Denis O'Neil had decided by the end of October or early November 2010 to proceed with the investment in Cascade. 476 These were strong findings. They may explain why the Judge did not address the other elements of Addenbrooke's case. 477 However, the counterfactual considered by the Judge was confined to the difference which knowledge of the "involvement of the Obeid family" would have made. The Judge did not consider a counterfactual comprising the elements of the more extensive non-disclosure claim made by Addenbrooke. That means, in our respectful opinion, that the Judge's findings on reliance cannot, despite their strength, be regarded as conclusive of Addenbrooke's claim. 478 Again, does this matter? Can it be said that the claim of misleading or deceptive conduct by non-disclosure was not made out for other reasons? This requires consideration of two principal matters. The first is whether Addenbrooke could, in any event, have made out the more extensive case of misleading or deceptive conduct by non-disclosure which it had pleaded. As was noted by French CJ in Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [24], the question of whether conduct is misleading or deceptive is logically anterior to the question of whether a person has suffered loss or damages as a result. 479 The second principal matter is the submission of counsel for Mr Duncan that the absence of evidence from Denis O'Neil that knowledge of the more extensive manners said not to have been disclosed would have made any difference to his decision is, by itself, fatal to Addenbrooke's success on this ground of appeal.

Misleading or deceptive conduct by non-disclosure 480 Conduct is misleading or deceptive, or likely to mislead or deceive, if it has a tendency to lead into error: Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 at [39]. The question of whether conduct is leading or deceptive is one of fact to be resolved by a consideration of the whole of the impugned conduct in the circumstances in which it occurred: Campbell v Backoffice Investments at [102] (citing McHugh J in Butcher v Lachlan Elder Realty at [109], to which reference will be made later); and Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31, (2010) 241 CLR 357 (Miller) at [14] (French CJ and Kiefel J). 481 The High Court considered the principles concerning claims of misleading or deceptive conduct by non-disclosure in Miller. After referring to the statement of Gummow J in Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31 at 41 that, "unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exits it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist", French CJ and Kiefel J continued: [20] In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in s 52. [21] To invoke the existence of a reasonable expectation that if a fact exists it will be disclosed is to do no more than direct attention to the effect or likely effect of non-disclosure unmediated by antecedent erroneous assumptions or beliefs or high moral expectations held by one person of another which exceed the requirements of the general law and the prohibition imposed by the statute. … It would no doubt be regarded as an unrealistic expectation, inconsistent with the protection of that "superior smartness in dealing" of which Barton J wrote in W Scott, Fell & Co Ltd v Lloyd, that people who hold things back for their own profit are to be regarded as engaging in misleading or deceptive conduct. As Burchett J observed in Poseidon Ltd v Adelaide Petroleum NL, s 52 does not strike at the traditional secretiveness and obliquity of the bargaining process. … [22] However, as a general proposition, s 52 does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence. … (Citations omitted) 482 On our understanding, the principles concerning misleading or deceptive conduct by non-disclosure or silence which emerge from the authorities and which are pertinent in the present appeal may be summarised as follows: (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 (see Re Winterton Constructions Pty Ltd v Hambros Australia Ltd [1992] FCA 582; (1992) 39 FCR 97 at [75]), 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. 483 Ultimately, as indicated at the commencement of this reference to the principles, the determination of whether a failure to disclose a matter is misleading or deceptive requires an examination of all the circumstances. If in the circumstances, assessed objectively, a representee would have been entitled to expect or infer (have a reasonable expectation) that an undisclosed matter would be disclosed, that may well constitute misleading or deceptive conduct: Clifford v Vegas Enterprises Pty Ltd [2011] FCAFC 135 at [198]. 484 In the application of these principles, we do not consider that it can be held presently that Addenbrooke's representatives could not have had a reasonable expectation that the undisclosed matters would be disclosed. The absence of findings on matters which would allow an assessment by this Court of the context in which the alleged non-disclosure occurred indicates that conclusion. Although the Judge made some findings concerning the matters spoken by Mr Duncan at the Presentation Meeting, his Honour did not make detailed findings. This is understandable given the Judge's reservations about the reliability of the evidence given by all of the witnesses about what occurred at the meeting. The Judge may also have been influenced by his understanding of the extent of Addenbrooke's misleading or deceptive conduct case and so may have thought that more extensive findings were unnecessary. 485 Whatever be the explanation, we do not consider that this Court can reach a conclusion as to whether Addenbrooke could, or could not, have had a reasonable expectation that they would be informed of the concerns which Cascade's directors and Mr Duncan held as to the risk which exposure of the Obeids' involvement presented to the foreshadowed sale of the Mount Penny Tenement or Cascade's share and accordingly to the substantial anticipated profits being realised. There is however sufficient in the Judge's findings, and in the evidence, to indicate that there were matters which may have provided (and perhaps did provide) a basis for such a reasonable expectation. At [408] of his reasons, the Judge noted some matters which were common to the various accounts of what had been said at the Presentation Meeting. These were: (a) it had been said that the existing shareholders desired not to dilute their interests as between themselves; (b) the imputed value of Cascade at the date of the meeting had been said to be around $400 million; (c) the question of whether a change of Government in New South Wales would make a difference to the proposal had been canvassed; (d) the prospect of the enterprise being sold to a publicly listed company or floated by means of an IPO had been canvassed; (e) the proximity of the Mount Penny Tenement to other mines, the railway and road connections were also discussed; (f) there were some discussion of the likely nature of the mining operation. 486 Although the Judge noted that these matters were common in the various accounts of what had occurred at the meeting, he did not make an express finding to the effect that each had been discussed. Nor did the Judge make findings about who it was who had made the various statements nor the context in which the speaker had done so. We infer, however, that the Judge accepted that these matters had been discussed. 487 Item (c), namely, the potential for a change of Government in New South Wales to make a difference to the proposal seems particularly important in the context of Addenbrooke's extended non-disclosure claim. It indicates that at least some attention was given to what may be described as "political risks" bearing on the project. 488 The two witnesses who gave express evidence on this topic were Ned O'Neil and Mr Smith. In the evidence in chief of Ned O'Neil, the following exchange occurred: Q: And do you recall any further discussions with Mr Gray in relation to the timeline for an IPO and how long it could take? A: He indicated six months. Q: Did he - did you have any discussion about matters which could delay things? A: Well, my position which I put to Gray was that any approval process can be subject to delays so there was a high degree of - well, a degree of uncertainty that that timeline could be achieved. Q: Was there any discussion about change of government? A: Yes. Mr Smith, who is from Addenbrooke who attended the meeting, he asked if there had been any discussions with the Opposition and Mr Duncan replied, "Yes, there have been discussions with the Opposition. They are supportive of mining in the area." And then he went onto say that this was important because the approval of the mining licence had to be done by a Minister. (Emphasis added) 489 An answer Ned O'Neil gave during the course of his cross-examination by counsel for Mr Duncan included: [O]ne of the things we clearly asked in our investor presentation was it's - at that point in time, you know, there was a strong consensus there would be a change of Government. We wanted to know if there was - if the Opposition had a positive outlook or positive position on mining in this area and the answer was, "Yes, we have spoken to the Opposition and they are supportive of mining in the area." 490 Mr Smith's evidence in chief included the following: Q: And was there any discussion about the forthcoming New South Wales State Election? A: I had some concern whether there [were] any political issues to be considered as part of getting a mining licence approved. These things can be controversial, I suppose. So I queried Mr Duncan on that. I was concerned that a change of government was likely and whether that was to have any impact on the approval of the mine. Mr Duncan assured me not to worry in that regard, that they had been working with bureaucrats in the Department of Mines for many years and that those bureaucrats were across the application to be lodged. They were supportive of the application, and the application would be approved regardless of whether there was a change of government or not. 491 The evidence of Ned O'Neil and Mr Smith that the possible effect of a change in government in New South Wales on the project proceeding had been raised at the Presentation Meeting was not directly challenged in their respective cross-examinations (although counsel did seek to cast doubt on the reliability of their accounts more generally). 492 Mr Gray's evidence did not indicate whether the effect of a change in Government had been raised at the Presentation Meeting. However, answers which Mr Gray gave to questions from the Judge indicated that he had regarded it as a significant matter at the time: HH: And if you had been told by any of the Cascade directors that the Obeids [have] a commercial interest either in the form of shares in Cascade, some interest in the venture or some indirect interest of commercial value in the licences, would you have put Southern Cross behind this placement? A: No. HH: Why not? A: Because there was the danger that there would be - that what appeared to be a relatively automatic progression for an exploration licence to a mining licence wouldn't occur, and without the company obtaining a mining licence it would have had negligible value. HH: Why did you think there was such a danger? A: Because there was a State Election coming up, and we didn't expect the mining licence to be granted until the middle of 2011, and so clearly it needed to be non-controversial from a political point of view so that the normal mining process, if you like, and approval process would occur. HH: Why did you think it would be called or considered controversial from a political point of view if the Obeids were involved commercially in this licence? A: Because that would raise the prospect of there being some potential difficulties with governments or approvals. It was just an - it's not an area of our expertise, but part of our process is not to be involved in anything that has unquantifiable controversy about it. 493 This evidence of Mr Gray (about which the Judge made no finding) is supportive of the evidence of Ned O'Neil and Mr Smith to the extent that it indicates that there was a contemporaneous concern about the possible effect on the project of the anticipated change of Government in New South Wales. It is to be noted, however, that Mr Gray did not attribute to Mr Duncan any statement on this topic at the Presentation Meeting. 494 In short, there was some evidence, which the Judge seems to have accepted, that the potential effect of the anticipated change of Government was raised in the Presentation Meeting. There was also evidence that Mr Duncan had responded in a way which sought to allay any concerns which the Addenbrooke representatives had on that score. His answer appears to have been incomplete because he did not disclose the concerns which he and the Cascade stakeholders held as to the effect which public knowledge of the Obeids' involvement could have on the project being able to proceed and to the anticipated profits being realised. Thus, this evidence had the potential, at the least, to provide a basis upon which the Addenbrooke representatives could have had a reasonable expectation that, if there were other matters known to Mr Duncan bearing on the "political risk" presented by the anticipated change of Government, they would be disclosed. We do not think that it is possible in the absence of more detailed findings to be more particular than that. The matters to which we have referred are sufficient to indicate that the possibility that the Addenbrooke representatives may have had a reasonable expectation of the kind to which the authorities refer cannot be excluded. Such an expectation could make misleading or deceptive Mr Duncan's non-disclosure of the concerns which he and the Cascade directors held that public awareness of the Obeid family interest would jeopardise the anticipated profits being realised and his non-disclosure of the elaborate steps taken to disguise that interest from public scrutiny.

Absence of evidence from Denis O'Neil 495 The second matter which counsel for Mr Duncan emphasised was the absence of evidence from Denis O'Neil that knowledge of the more extensive matters said not to have been disclosed would have made any difference to his decision. This was just one aspect of Addenbrooke's case on causation which counsel for Mr Duncan critiqued. Consideration of the other matters can be deferred. 496 The premise for counsel's argument may be accepted: Denis O'Neil did not give any evidence of this kind. 497 One starts with the proposition that, having regard to the terms of s 12GF of the ASIC Act, the question to be determined, on the assumption that Addenbrooke had shown misleading or deceptive conduct by Mr Duncan, is whether it established that it had suffered loss or damage by that conduct: Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494 at [34], [38] and [95]. This is a question of causation and is, in essence, a factual enquiry. 498 In Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 525, the plurality said that s 82 of the Trade Practices Act 1974 (Cth) (an analogue of s 12GF) should be understood as taking up the common law practical or common-sense concept of causation discussed in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 except to the extent that that concept had been modified or supplemented by the Trade Practices Act itself. More recent cases have emphasised that, in determining whether loss or damage is "by" misleading or deceptive conduct, and in assessing the amount of the loss so caused, it is in the purpose of the statute as related to the circumstances of the particular case that the answer to the question of causation is to be found: Travel Compensation Fund v Tambree [2005] HCA 69, (2005) 224 CLR 627 at [30] (Gleeson CJ) and [45]-[46] (Gummow and Hayne JJ) and the cases cited therein. See also Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26, (2005) 221 CLR 568 at [54] (McHugh J) and [99] (Gummow, Hayne and Heydon JJ); Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) [2006] NSWCA 282, (2006) 67 NSWLR 341 at [47]-[48]. 499 Reliance is not a substitute for causation in misleading or deceptive conduct claims: Campbell v Backoffice Investments at [143]. However, generally speaking, it is necessary for parties claiming to have suffered loss or damage "by" the conduct of another to show that they relied on that conduct by doing, or refraining from doing, something by reason of it. The requisite reliance may be proved in more than one way: by evidence of direct reliance by the claimant or by proof that a third party relied on the misleading or deceptive conduct and the claimant's loss resulted from that person's reliance: Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd [2003] FCAFC 313, (2003) 134 FCR 522 at [106]-[123]; and Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC 177 at [31]. 500 Particular considerations affecting the issue of reliance arise when the misleading or deceptive conduct involves a failure by a respondent to disclose a material matter. It can be artificial to speak of reliance in determining what action or inaction could have occurred if the true position had been known: Campbell v Backoffice Investments at [143] approving the statement of Giles JA in the decision appealed from: [2008] NSWCA 95; (2008) 66 ACSR 359 at [44]. See also Smith v Noss [2006] NSWCA 37 at [25]. Further, in such cases, evidence from claimants seeking to discharge the onus of proof on causation as to what they would have done in the counterfactual circumstance had the non-disclosure not occurred is necessarily hypothetical and, because of its self-serving nature, often regarded as of little weight. Courts tend to attach more weight in circumstances of this kind to evidence of surrounding matters when making the assessment of the causal effect of the non-disclosure. Thus, in Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd (1992) 38 FCR 471 the Full Court (Beaumont, Foster and Hill JJ) said at 483: Although direct evidence of reliance might have been obtained by the appropriate questioning of Hutchins, we do not regard the absence of this evidence as fatal in the sense that it necessarily precludes the finding of reliance. Indeed, as the information as to the prior problems with the supplier had been held from Hutchins, any question as to what he would have done had it been disclosed to him, would necessarily be hypothetical. As such, the answer, in itself, might well be regarded as carrying little weight and being essentially self-serving. 501 This approach was applied in Barnes v Forty Two International Pty Ltd [2014] FCAFC 152 at [184] (Beach J with whom Siopis and Flick JJ agreed) and in Smith v Moloney [2005] SASC 305; (2005) 92 SASR 498 at [51] (Besanko and Vanstone JJ). It reflects the approach of the common law generally in considering whether there is a causal connection between a defendant's failure to warn or advise of a risk, on the one hand, and a plaintiff's loss on the other: see Chappel v Hart (1998) 195 CLR 232 at [34]-[35] and Rosenberg v Percival [2001] HCA 18, (2001) 205 CLR 434 at [85], [90], [155]-[158]. 502 Kiefel J addressed the underlying principle in Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357; (1999) 43 IPR 545 at [45], saying: The question of causation can sometimes be resolved not by direct evidence as to what part a misrepresentation played in the process of entry into contract, but by a Court determining what effect must be taken to have resulted. Indeed this course may sometimes be preferable to one which rested solely on evidence later given on the point. In Gould v Vaggelas (236) Wilson J held that if a material representation is calculated (which is to say, objectively likely …) to induce the representee to enter into a contract and the person in fact enters into a contract, a fair inference arises that the representation operated as an inducement, adding that it need not be the only cause. The latter point is now uncontroversial. It suffices for liability if a misrepresentation played some part in inducing entry into contract for the price agreed. That part of Wilson J's judgment was not stated to be an exhaustive rule, but is to be seen as a guide to a question of fact which may arise. A conclusion of inducement may then be reached where a combination of factors, including the quality of the representation itself, goes unanswered. In relation to the representation itself it would need to be of a kind likely to provide that inducement and such that "...commonsense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract." (Wilson J, 238) … . (Citations omitted) In Campbell v Backoffice Investments the plurality emphasised, at [143], that the application of the proposition stated by Wilson J in this quoted passage requires close attention to all the evidence bearing on the inference to be drawn. The decision in ACCC v TPG Internet at [55] is a recent application of this practical guide. 503 There was evidence at the trial indicating the materiality of the matters not disclosed by Mr Duncan which were the subject of Addenbrooke's extended non-disclosure claim. The Judge found, at [410], that as at 19 November 2010 there was "a significant degree of sensitivity" amongst the stakeholders in Cascade about the involvement of members of the Obeid family as landholders and as co-venturers in the mining Joint Venture. His Honour considered that this sensitivity was demonstrated by the endeavours of the drafters of the Deal Sheet to "water down" the detail of the arrangements agreed with the Obeid family and to "avoid mentioning altogether" the arrangements for organising an orderly exist of the Obeid nominees from the Joint Venture. The Judge also accepted, at [412], that Mr Duncan and Mr Gray had sought to avoid bringing about a statement of affairs in which "one of the external investors then being courted might ask awkward questions about the very complicated transactions which were then under way designed to implement an orderly exist of the Obeids from the venture.". 504 Earlier, we set out Mr Gray's answers to questions from the Judge which included his statement that, if he had been aware of the involvement of the Obeids, it would have caused him to consider the prospect of potential difficulties with the New South Wales Government in obtaining approvals, so much so that SCE would not have involved itself in the Capital Raising. As we have already noted, the Judge did not make a finding about this particular evidence, although it is evident that he had reservations about several aspects of Mr Gray's evidence and, in fact, rejected parts of it. 505 On the hearing of the appeal, counsel for Mr Duncan submitted that the answers by Mr Gray to the Judge's questions as to what he would have done if told that the Obeids had "some interest" in the Joint Venture or "some indirect interest of commercial value in the licences" were of no consequence because they proceeded on a false premise. That was so, counsel submitted because, by 19 November 2010, the Obeids had no interest in the joint venture or in the licences, they having been transferred to CMG. 506 We do not accept that submission. Not only does it require an unduly narrow understanding of the reach of the Judge's questions, it is evident that Mr Gray did not understand them in the way for which counsel contends. Further, and in any event, there is no reason to assume that the Judge was enquiring only about the position as it stood on 19 November 2010. 507 Some of the evidence of Ned O'Neil is also pertinent presently. This was the evidence as to the effect which disclosure of the matters which were the subject of Addenbrooke's non-disclosure claim would have had on his thinking and action. This evidence suffered from being of a generalised nature, that is to say, directed to all the matters set out in [51] to [126] of the 2ASOC said not to have been disclosed. In [67] of his first affidavit containing his evidence in chief, Ned O'Neil deposed: [69] It may be that some of the facts which are set out in paragraph 51 to 126 would not of themselves have put me on notice on the entirety of the transactions to which I take objection. However, having reviewed each of those paragraphs, I am of the firm belief that most of the facts and matters described therein would have caused me to pursue a further chain of inquiry, would have caused me to lose interest in this particular investment on behalf of Addenbrooke. 508 The Judge seems not to have accepted this evidence as he said, at [426], that he regarded the evidence in chief given by Ned O'Neil as to reliance as being "artificial" and that it had, when broken down to its essentials during cross-examination, been "demolished". Later, at [432] the Judge said that he did not accept that Ned O'Neil and Mr Smith would have counselled Denis O'Neil against the proposed investment in Cascade had they known that the Obeids had some involvement in it. Given this assessment, it would be inappropriate for this Court presently to attach significant weight to Ned O'Neil's evidence on this topic. 509 In any event, as noted earlier, it is commonly the case that courts attach little weight to evidence of the kind given by Ned O'Neil, given its hypothetical nature and the tendency for such evidence to be influenced in a self-serving way by self-interest and hindsight. Instead, as the authorities indicate, the courts find greater assistance in an assessment of the other circumstances about which they are satisfied. In the present case, those circumstances included: (a) that action had been taken by the Cascade stakeholders to remove the Obeid family interests from the joint venture; (b) the removal of the Obeid family interests had been achieved by the payment (or contemplated payment) to that family of very substantial sums and by a series of elaborate steps which had the effect of disguising both the involvement and the payments to them; (c) the concern (seemingly a very significant concern) held by the stakeholders in Cascade that public knowledge of the involvement of the Obeids (and the substantial profits which they would accrue from it) constituted a significant risk to the anticipated sale of Cascade itself or the Mount Penny Tenement proceeding and thereby to the realisation of the profits which the Cascade stakeholders and those subscribing for shares anticipated. 510 Finally, we note that Mr Duncan's written opening at the trial included the following: [9] Mr Duncan accepts that at some point well after 5 June 2009 and prior to mid-2010, he became aware that Cascade Coal was involved in a "joint venture" with an entity controlled by members of the Obeid family. He insisted that this interest be terminated. He told Mr McGuigan and Mr Poole to sort it out. They told him they had. … . On one view, this is an implied admission by Mr Duncan that the involvement of the Obeid family was a matter of some sensitivity to Cascade's plans. 511 These circumstances suggest, in our view, that (adapting the expression of Wilson J in Gould v Vaggelas (1985) 157 CLR 215 at 238) common-sense would indicate that it is at least reasonably arguable that there was a causal relationship between the non-disclosure and Addenbrooke's decision to invest. An assessment of the significance of Denis O'Neil not having given direct evidence of how he would have regarded the information should take account of these circumstances. Counsel for Mr Duncan seemed to accept this at trial as he told the Judge: Well it can be taken as a given, your Honour, for my part at least, that if - if the O'Neils had known anything about - known paragraphs 51 to 126, they wouldn't have invested … . 512 Accordingly, we do not consider that this Court should conclude that the absence of evidence from Denis O'Neil is necessarily fatal to Addenbrooke's claim.

Summary on the misleading or deceptive conduct claim against Mr Duncan 513 In summary, we consider that Addenbrooke's submission that the Judge did not deal with the whole of the misleading or deceptive conduct claim against Mr Duncan should be upheld and that this Court cannot conclude that, had the whole claim been addressed, the outcome at trial would have been the same. This means that it is not appropriate for this Court to adopt the approach stated by the Full Court in Poulet Frais Pty Ltd v The Silver Fox Company Pty Ltd [2005] FCAFC 131, (2005) 220 ALR 211 at [46] for which Mr Duncan contended, namely: The proper approach in the context of a case concerning an alleged contravention of s 52 of the TPA can, in our view, be restated in the following way. Where the determination of whether particular conduct was misleading or deceptive is not straight-forward, but rather involves elements of degree, opinion or judgment, a simple preference in the appellate court for a view different from that taken by the trial judge may not carry with it the conclusion of error. The appeal court might conclude either that there could not be said to be only one possible correct determination or that the trial judge had a particular advantage, not shared by the appellate court, in assessing critical matters of nuance and judgment. In such a case, in determining whether or not the trial judge fell into appealable error, the appeal court should not proceed as though on a hearing de novo in which the views of the trial judge carry no weight. Rather the appeal court must give appropriate weight to the views of the trial judge and set aside his or her finding only if persuaded that the finding is wrong. However, if an appellate court is persuaded that particular conduct, found by the trial judge to be misleading or deceptive, was not in fact misleading or deceptive, it thereby identifies error in the decision of the primary judge. Similarly where an appellate court is persuaded that conduct which the trial judge did not consider misleading or deceptive is in fact misleading or deceptive. 514 That approach is inapposite given that the Judge did not address the whole of Addenbrooke's case. 515 We do not propose to make any declaration that Mr Duncan engaged in misleading and deceptive conduct. This is so because we are persuaded that the Judge failed to consider and determine Addenbrooke's case of misleading and deceptive conduct, as a whole. That case consisted of the positive misleading case and the non-disclosure case taken together. They cannot be separated. Indeed, on Addenbrooke's case, the reasons for not disclosing the true position concerning the Capital Raising necessarily gave rise to the misleading representations actually made. 516 We should not attempt to consider and resolve that combined case. Even the conclusions arrived at by the Judge as to what Addenbrooke would have done had it known merely of the Obeids' interest may well have been different if the non-disclosure case had been considered by him. 517 The facts in issue on the combined case are too many and complex for this Court fairly to make findings of fact to inform the legal result. We would for that same reason not undertake the fact finding task pressed by Mr Duncan's Notice of Contention. 518 In our opinion the whole misleading and deceptive conduct case ought to be tried again and, because of the credit based findings made by the Judge on the more confined case, that trial should be before a different Judge. 519 This conclusion makes it unnecessary to determine some of the other submissions concerning the issue of causation which were agitated during the appeal hearing. These include Mr Duncan's submission that Addenbrooke's present claim of indirect reliance had not been advanced at first instance and was not in any event now open to Addenbrooke. That claim was to the effect that, had Mr Duncan not engaged in misleading or deceptive conduct, neither SCE nor Mr Gray would have participated in the Capital Raising, thereby making it improbable that Addenbrooke would have chosen to do so. Any claim by Addenbrooke to that effect should be determined in the context of findings concerning the relevant circumstances. The extent of the circumstances which are relevant may be influenced by the content of the pleadings, which, it is reasonable to suppose, may be the subject of an amendment application on the remittal. An attempt by this Court to determine these matters at this stage would involve, necessarily, a certain amount of hypotheticality. 520 We will address other aspects of the issues of causation and loss later in these reasons.

Unconscionability 521 Relevantly for present purposes, Addenbrooke made this claim against Mr Duncan only. 522 The Judge regarded his finding on reliance as disposing of Addenbrooke's claim of unconscionable conduct. On the appeal, counsel for Mr Duncan accepted that, in this circumstance, the fate of Addenbrooke's appeal on this ground turned on the fate of its appeal with respect to the alleged misleading or deceptive conduct. Accordingly, for the reasons just given, Addenbrooke's appeal concerning the alleged unconscionable conduct of Mr Duncan should succeed and this aspect of its claim should also be remitted for retrial.

The claimed accessorial liability of Mr Duncan 523 The Judge did not mention separately Addenbrooke's claim that Mr Duncan was liable as an accessory because he had been knowingly involved in misleading or deceptive conduct, or unconscionable conduct, by Cascade. However, it can be inferred that the Judge regarded his statement at [437] that his findings concerning Denis O'Neil were fatal to the "statutory causes of action" as encompassing these claims because Addenbrooke had, seemingly, relied upon s 12GF(1) of the ASIC Act for them. On the appeal, Addenbrooke submitted that the Judge had been wrong not to address this ground or, to the extent that he had, been wrong to dismiss it for the reasons he gave. Addenbrooke relied in this respect on its submissions concerning its misleading or deceptive conduct claim. 524 By his Notice of Contention on the appeal, Mr Duncan submitted that Addenbrooke was "estopped or otherwise precluded" from alleging that Cascade had engaged in misleading, deceptive or unconscionable conduct with the consequence that he could not be found to have been knowingly involved in such conduct. Mr Duncan submitted in the alternative that the Judge should have found that it was an abuse of process for Addenbrooke to maintain those claims. We will address these contentions shortly. 525 Otherwise, counsel for Mr Duncan did not make any submissions concerning this ground of Addenbrooke's appeal. We infer that this reflected counsel's acceptance that, in the event that Mr Duncan's contention concerning estoppel or abuse of process did not succeed, the fate of this ground of appeal turned on the fate of Addenbrooke's appeal with respect to the misleading or deceptive conduct alleged against Mr Duncan. 526 On this understanding, it is not necessary to address this ground further at this stage. Its fate will turn on the outcome of Mr Duncan's contention, to which we shall return shortly.

Barnes v Addy claim against Mr Duncan 527 Addenbrooke's claim at trial included a claim that Cascade and/or CMG held its subscription monies on a constructive or resulting trust from the time that they were paid into Berndale Trust Account, that Cascade and/or CMG had paid the subscription monies to CMG and/or South East in breach of that trust, that Mr Duncan (amongst others) had knowingly assisted in the breach and that he was, accordingly, liable in equity to make restitution. 528 It was common ground that the Judge had not referred to this claim at all so that it remained undetermined. It was also common ground that this Court was in as good a position as the Judge to determine this part of Addenbrooke's claim. 529 Addenbrooke also made a separate and distinct claim of breach of trust by SCE, to which we will refer shortly. 530 Addenbrooke's claim that Cascade and/or CMG held the subscription monies in the Berndale Trust Account on trust for it was said to rest on the principle that stolen money is held on trust by the thief for the owner. Counsel for Addenbrooke referred in this respect to the statement of O'Connor J in Black v S Freedman & Co (1910) 12 CLR 105 at 110: Where money has been stolen, it is trust money in the hands of the thief, and he cannot divest it of that character. If he pays it over to another person, then it may be followed into that other person's hands. If, of course, that other person shows that it has come to him bona fide for valuable consideration, and without notice, it then may lose its character as trust money and cannot be recovered. But if it is handed over merely as a gift, it does not matter whether there is notice or not. 531 Addenbrooke submitted that the same principle ought to apply when a party has been induced to pay money by false pretences and, as it alleged was the case presently, as part of a dishonest or fraudulent design. It submitted that the "theft" had occurred either when it paid the money into the Berndale Trust Account or when it was paid out to CMG. Mr Duncan, having full knowledge of the transactions, was, so Addenbrooke contended, liable under the second limb of Barnes v Addy (1874) LR 9 Ch App 244. 532 Addenbrooke's pleaded case was that Cascade and/or CMG held the subscription monies on a constructive or resulting trust for it (2ASOC [141]). In the submissions on appeal, however, its claim was that these entities held the monies on a constructive trust, which it characterised as a remedial constructive trust. 533 Counsel for Addenbrooke acknowledged the novelty of this claim, accepting that he had not been able to identify any misleading or deceptive conduct case in which it had been alleged, let alone found, that the monies paid by a representee were held by the recipient on a constructive trust. Further, the submissions of counsel were made at a level of some generality and without reference to the underlying principles concerning the circumstances in which a constructive trust may be imposed. Instead, as we have said, Addenbrooke sought to establish the constructive trust for which it contended by analogy with the position of the thief considered in Black v S Freedman & Co. See also Zobory v Federal Commissioner of Taxation (1995) 64 FCR 86. 534 In our opinion, this claim of Addenbrooke can be disposed of shortly and without a detailed examination of the circumstances in which the courts will impose a restitutionary constructive trust. 535 Addenbrooke did not pay over the subscription monies involuntarily. The evidence indicates that it made the payment to satisfy the liability which it had incurred under the Subscription Agreement to Cascade. It must have had the intention to pass "property" in the money to Cascade. The circumstance that Addenbrooke made the payment in the erroneous belief that Cascade would use the subscription monies for a particular purpose does not alter the circumstance that it paid the monies voluntarily and pursuant to the contractual obligation it had accepted. To our mind, this circumstance has a number of consequences. 536 First, if Addenbrooke establishes the underlying basis for its claim, the law will provide it with other remedies. This is pertinent because, before a court imposes a constructive trust as a remedy, it must first decide whether, having regard to the issues in the litigation, there are other means available to quell the controversy: Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566 at [42]. See also Daly v Sydney Stock Exchange Ltd (1986) 160 CLR 371 at 379-80 (Gibbs CJ). In this case, Addenbrooke's remedy, if it has one, need not be found in trust law. 537 Secondly, the circumstance that Addenbrooke paid the monies in discharge of a contractual obligation distinguishes this case from Black v S Freedman & Co as, in that case, the owner of the money did not, on the theft, cease to have "property" in it. 538 Thirdly, the imposition of a constructive trust in the present circumstances would be inconsistent with principle. At common law and in equity a party who is induced by fraudulent misrepresentation to enter into a contract is permitted to rescind that contract: Alati v Kruger (1955) 94 CLR 216. When such a rescission occurs, the transaction is treated as if it had never been effected, with the consequence that a misrepresentor is held to hold the property transferred pursuant to the contract on a constructive trust for the misrepresentee: Greater Pacific Investments Pty Ltd (in liq) v Australian National Industries Ltd (1996) 39 NSWLR 143 at 153. But rescission is necessary in order for a constructive trust to arise in these circumstances because the misrepresentee cannot leave the contract on foot and, at the same time, assert a beneficial interest in the property transferred pursuant to it: Daly v Sydney Stock Exchange at 389 (Brennan J). 539 Addenbrooke's claim, if upheld, would have the consequence that a constructive trust would be imposed in a case of fraudulent misrepresentation, even before rescission had occurred. This is inconsistent with established principle. Addenbrooke should not be held to have an equitable interest in the subscription monies without there having been rescission of the Subscription Agreement. 540 We add that Addenbrooke did not contend that its relationship with Cascade or CMG gave rise to fiduciary obligations. Nor did it contend that the principles relating to the imposition of a constructive trust in the context of such relationships were pertinent. 541 In our opinion, these matters indicate that a restitutionary constructive trust of the kind sought by Addenbrooke did not arise. That being so, the question of Mr Duncan being liable under the second limb of Barnes v Addy does not arise. 542 We add, in case it be thought that it has been overlooked, that Addenbrooke did purport to rescind the Subscription Agreement by its statement of claim. Paragraph [138] of the 2ASOC was as follows: In the premises each of the agreements disclosed in paragraph 72 to 124 above and the Capital Raising were and are void ab initio, and to the extent that it is necessary, the applicant hereby elects to avoid ab initio the Addenbrooke Subscription Agreement. 543 However, Addenbrooke did not pursue that claim at trial. In fact, it was expressly not pursued, as the following exchange in Addenbrooke's closing submissions at trial indicates: HH: … I'm just trying to understand how Mr Douglas is actually putting his damages case because it is a damages case you are putting? Mr Douglas: It is, your Honour, yes. HH: It's not, "I have rescinded the transaction, I want the money back on that basis", is it? Mr Douglas: No, but there are some allegations to that effect in the pleadings, but, effectively … . HH: But it's not that case? Mr Douglas: No. But we're seeking damages and we're … . 544 Addenbrooke had not otherwise advanced at trial a claim that it had avoided the Subscription Agreement. Accordingly, the Judge was not required to consider such a claim. On the appeal, counsel for Addenbrooke did not seek to rest the assertion of the constructive trust on rescission of the Subscription Agreement. 545 This ground of appeal fails.

The settlement of Addenbrooke's claims against CMG and Cascade 546 When Addenbrooke commenced its proceedings, it sought relief against 12 respondents. These included Cascade and CMG. However, before the commencement of the trial, Addenbrooke compromised its claims against all respondents other than Mr Duncan, SCE and Mr Gray. 547 As noted earlier, by his Notice of Contention, Mr Duncan contended that the Judge should have found that the entry of judgment in favour of CMG on 7 May 2014 and in favour of Cascade on 19 May 2014 had the consequence that Addenbrooke was estopped or otherwise precluded from alleging that Cascade had engaged in misleading and deceptive conduct or unconscionable conduct in which he (Mr Duncan) has been knowingly involved or that Cascade and/or CMG had breached a trust in which he (Mr Duncan) had knowingly assisted. Mr Duncan contended, in the alternative, that it was an abuse of process for Addenbrooke to maintain these allegations against him. 548 In so far as this part of Mr Duncan's Notice of Contention concerned CMG, it proceeded on a false premise. Judgment was not entered by the Court on Addenbrooke's claim against CMG. Instead, on 7 May 2014, Addenbrooke filed a Notice of Discontinuance of the proceedings in so far as they concerned CMG (and certain other respondents). It is true that the Notice of Discontinuance was expressed to be by consent on the basis that judgment be entered in favour of (relevantly) CMG, but this was a contradiction. Proceedings against a party may be finalised by the party discontinuing the proceeding (in accordance with the rules of Court) or by judgment of the court, but not both. In the present case, the proceedings against CMG were brought to an end by Addenbrooke's discontinuance. Having been discontinued, there was no occasion for the Court to enter judgment, by consent or otherwise. 549 Rule 26.14 of the Federal Court Rules 2011 (Cth) governs the effect of a filed notice of discontinuance: Discontinuance under this Division cannot be pleaded as a defence to a proceeding in relation to the same, or substantially the same, cause of action. This Rule reflects the common law position that the filing of a notice of discontinuance does not give rise to an estoppel or to a plea in bar: SZFOG v Minister for Immigration and Indigenous Affairs [2005] FCA 1374 at [16]-[17]. 550 However, for the reasons earlier given, neither Cascade nor CMG held Addenbrooke's subscription monies on a constructive trust, so Addenbrooke's claim in that respect failed in any event. 551 The premise for Mr Duncan's contention in so far as it concerned Cascade is sound, as, by consent, judgment was entered dismissing Addenbrooke's claim against Cascade and Mr Atkinson on 19 May 2014. 552 The Judge did not address this issue in his reasons. Strictly speaking, it was not necessary for him to do so as Mr Duncan had not amended his Defence, following the entry of the judgment in favour of Cascade, to raise a plea of estoppel or abuse of process, and the Judge had reminded the parties more than once during the trial that he would be determining the matter by reference to the issues identified by the pleadings. 553 Despite the matter not having been pleaded, counsel for Mr Duncan did make some submissions (without objection) at the trial which were directed to the issue. Those submissions were notable for their brevity. Counsel for Addenbrooke made submissions in response in a similar manner. In all the circumstances, it would be understandable if the Judge had taken the view that it was unnecessary for him to address the submissions. 554 In the written outline of submissions on the appeal, counsel for Addenbrooke submitted that the point "was not run below" and that the Court at trial had not received evidence regarding the "construction" of the consent order. The outline included a claim that some evidence on this topic had been available. However, we do not consider that this particular submission of Addenbrooke can be accepted, at least in its entirety. Although not pleaded, the point had been the subject of some submissions and a copy of the Deed of Settlement and Release between Addenbrooke and Cascade dated 8 May 2014 was received in evidence (although this may have been because of its relevance to the quantum of damages claimed by Addenbrooke). There were even shortcomings in that evidence as the copy of the Deed had been executed by Cascade but not by Addenbrooke. 555 These circumstances mean that the position for this Court on appeal is unsatisfactory. Sometimes, an appeal court must do the best it can despite shortcomings in the way an issue arises for determination. We do not consider that that approach should be adopted in this case, given that, in the view we take of matters, Addenbrooke's claims of misleading, deceptive and unconscionable conduct should, for other reasons, be remitted for retrial. That being so, if Mr Duncan wishes to pursue the defences of issue estoppel or abuse of process at the retrial, he should amend his pleading to raise them so that all parties will have the opportunity to adduce evidence and make submissions within the framework of that pleading. If the defence is raised, a number of matters may require consideration. These include, first, the requirement of both res judicata and issue estoppel that there be identity of parties or their privies: Cross on Evidence, 10th Edition at [5040], [5175]; Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28, (2015) 256 CLR 507; secondly, the proposition that no judgment is conclusive against all the world as to the facts which must have been proved before it could be pronounced: Cross at [5180]; and, thirdly, in relation to abuse of process, whether it would be unjustifiably oppressive to Mr Duncan or would bring the administration of justice into disrepute for Addenbrooke to advance this claim: Tomlinson at [25]. 556 This part of Mr Duncan's Notice of Contention fails. This conclusion makes it unnecessary to determine Addenbrooke's ground of appeal relating to the alleged unconscionable conduct of Cascade.

The evidence ruling 557 Part way through the trial, the Judge ruled on the admissibility of a number of documents which Addenbrooke had sought to tender and provided reasons for his rulings: Addenbrooke Pty Ltd v Duncan (No 5) [2014] FCA 625. One of the documents which the Judge excluded was a document which, on its face, was a transcript of an intercepted telephone conversation between Mr Duncan and Mr Kinghorn which was said to have occurred at approximately 5.24 pm on 11 April 2011. This was the day before WEC's announcement to the ASX that it would not proceed with the acquisition of Cascade because of the "uncertainty" about mining activities in the Bylong Valley. The transcript attributed a number of statements to Mr Duncan, including: (a) that "we've" had an enquiry from ASIC and the ASX to "breakdown" the amount of $41 million in "our" accounts; (b) that "we can't answer it without disclosing the various steps that, eh, the money went to CMG which … traces back to Richard Poole and his family … if anyone goes behind that, it goes back to the guys that dropped out of the tender"; (c) that "we['ve] tried all sorts of weasel words and everything else …". 558 The Judge was willing to accept that the transcript may contain previous representations by which facts are asserted. Nevertheless, the Judge excluded the transcript from admission into evidence in the trial. 559 Addenbrooke contended that this ruling had been made in error. As it is not clear whether the ruling may be revisited in the new trial (see Rogers v The Queen (1994) 181 CLR 251), we consider it appropriate to address this ground. 560 As the Judge noted, the admissibility of a record of a telephone conversation is governed by the Telecommunications (Interception and Access) Act 1979 (Cth) (the Interception Act). The prima facie position established by s 77(1) of the Interception Act is that neither information nor a record obtained by interception is admissible in evidence. That prima facie position is subject to a number of exceptions, including those for which ss 74 and 75A of the Interception Act provide. Further, information or a record obtained by virtue of a warrant issued under ss 11A, 11B or 11C of the Interception Act is not admissible unless (relevantly) ss 74 and 75A of the Interception Act would permit a person to give that evidence. 561 Section 74 permits (subject to a qualification which is not presently material) a person to give "lawfully intercepted information" and "interception warrant information" in evidence in an "exempt" proceeding. It provides: 74 Giving information in evidence in exempt proceeding (1) A person may give lawfully intercepted information (other than foreign intelligence information) in evidence in an exempt proceeding. (2) For the purposes of applying subsection (1) in relation to information, the question whether or not a communication was intercepted in contravention of subsection 7(1) may be determined on the balance of probabilities. (3) A person may give interception warrant information in evidence in an exempt proceeding. 562 "Lawfully intercepted information" is information which has been obtained by intercepting a communication pursuant to a valid warrant issued to a relevant agency or authority. The term "warrant" has a defined meaning in the Interception Act. "Interception warrant information" includes information about "the existence or non-existence of an interception warrant" (s 6EA(a)(iii)). 563 By s 5B(hb) of the Interception Act, a proceeding of ICAC is an "exempt proceeding". 564 Section 75A then authorises a further step. It allows evidence given in an "exempt" proceeding to be adduced later as evidence in any proceeding. Section 75A provides: If information is given in evidence (whether before or after the commencement of this section) in an exempt proceeding under section 74 or 75, that information, or any part of that information, may later be given in evidence in any proceeding. 565 A note to s 75A indicates that it was inserted as a response to the decision in Wood v Beves (1997) 92 A Crim R 209. In that case, the majority of the Court of Appeal in New South Wales had held that ss 63, 74 and 77 of the Interception Act operated to preclude lawfully obtained information, within the meaning of s 6E of the Act, being admitted into evidence and used by a court in any proceedings after such lawfully obtained information had been given in evidence in exempt proceedings open to the public. 566 Section 77(3) provides that interception warrant information is admissible in evidence in a proceeding only to the extent that (relevantly) sections 74 or 75A permit a person to give that evidence. 567 Thus, the steps in relation to lawfully intercepted information and interception warrant information are: such information may be given in evidence in an exempt proceeding; and once so given, it may later be given in evidence in any proceeding. 568 Addenbrooke's contention at trial was that the information contained in the transcript of the intercepted telephone conversation between Mr Duncan and Mr Kinghorn had been "given in evidence" in proceedings of the NSW ICAC and could, accordingly, be adduced in its proceeding against Mr Duncan. 569 We note that the Judge was not taken to the legislative provisions governing the discharge by ICAC of its functions and the conduct by it of proceedings. Nor did any party lead evidence as to the way in which ICAC did in practice discharge its functions. Instead the Judge was invited, in effect, to make rulings concerning the intercepted communications on the basis of counsel's submissions about these matters. 570 The Judge held, at [72], that in order to render a record of lawfully intercepted information admissible in an exempt proceeding, the tendering party must prove the existence of the relevant warrant, that (relevantly) the record is a record of lawfully intercepted information, and that the record created is an accurate record of the intercepted communication. His Honour noted that proof of the accuracy of the transcription would normally be effected by calling the person who made that transcription. 571 In relation to the record of the intercepted telephone conversation between Mr Duncan and Mr Kinghorn, the Judge held, at [73], that Addenbrooke had not proven a number of the pre-requisites for admission of the record into evidence, including: (a) that the transcript had been given in evidence in a proceeding before ICAC; (b) that the intercepted information had been lawfully intercepted; (c) that the transcript was an accurate record of a lawfully intercepted communication. 572 These shortcomings in Addenbrooke's proof arose because it did not adduce evidence of proceedings in the ICAC in which the evidence had been given, nor from the person who had intercepted the communication, nor from the person who transcribed the conversation. In addition, Addenbrooke did not prove the warrant pursuant to which the communication had been intercepted. 573 Further still, although, as previously noted, the Judge had been prepared to accept that the record contained previous representations by which facts were asserted, he considered those facts to be vague and ambiguous and as relating only to Mr Duncan's knowledge as at 11 April 2011, well after the time when the extent of Mr Duncan's knowledge of the involvement of the Obeids in the joint venture was relevant and important, at [81]. For these reasons, the Judge held that the transcript was inadmissible. 574 Although Addenbrooke complained on the appeal of this ruling, the way in which it did so was unsatisfactory. Ground 14 in the Notice of Appeal is in the following terms: The trial Judge wrongfully rejected certain evidence tendered on behalf of Addenbrooke the subject of the decision Addenbrooke Pty Ltd v Duncan (No 5) [2014] FCA 625, and ought to have considered that evidence when determining the claims of Addenbrooke. 575 As the Judge's rulings related to multiple documents Addenbrooke had sought to tender, this unparticularised ground was unhelpful in identifying the subject matter of Addenbrooke's complaint. Further, it did not particularise any error by the Judge. These shortcomings were not remedied by Addenbrooke's outline of submissions provided in advance of the appeal hearing. The outline identified material to which it was said that the Judge had failed to have regard and concluded "[o]ther evidence was sought to be relied on too, though it was of less importance". A footnote to this submission was in the following terms: Addenbrooke also sought to rely upon evidence of a secretly taped conversation between Duncan and Kinghorn concerning the enquiries being made by the independent director of [WEC] in relation to the 41 million figure disclosed in the Deloitte report. Addenbrooke submits that that transcript ought to have been admitted. This is the subject of Appeal Ground 14, which seeks to challenge Addenbrooke Pty Ltd v Duncan (No 5) [2014] FCA 625. 576 In short, the only reference to the error imputed to the Judge in relation to the excluded transcript was contained in a footnote and that footnote did not particularise any error. 577 It was not until Addenbrooke's outline of submissions in reply that two errors were particularised. These were, first, that the transcript of the intercept proved, on its face, the existence of a warrant and was admissible by reason of ss 6EA(a)(iii) and 77(3) of the Interception Act; and, secondly, that the Judge had been wrong in concluding that Addenbrooke had not adequately identified the previous representations said to have been made so as to overcome the hearsay exclusion. 578 At the hearing of the appeal, senior counsel for Addenbrooke (who was not counsel for Addenbrooke at the trial and not the counsel who had prepared the outline of submissions) submitted that it had been common ground at trial that the transcript had been "in evidence at ICAC". He emphasised that the header to each page of the transcript included a warrant number and the name "Operation Jasper", this being the well-known name of an investigation conducted by ICAC and that the document appeared on its face to be a transcript of an intercepted telecommunication. Counsel submitted that the Judge had erred in concluding that Addenbrooke had not proved that the transcript had been given in evidence in a proceeding in ICAC, because that point had been accepted at the trial by counsel for Mr Duncan. 579 In our opinion, consideration of the transcript at trial indicates that counsel cannot make good this last submission. That transcript reveals the following exchanges: Mr Newlinds: [for Mr Duncan] … We haven't seen a warrant. We haven't seen an Act under which any warrant was issued. One can infer from the timing that it wasn't issued under - no warrants were issued under the ICAC Act. They're prima facie illegal unless proved otherwise, which is our submission. Now, how it gets admissible in this Court, if it was procured by a warrant, may depend on which particular warrant under which particular Act. … Mr Douglas [for Addenbrooke] The first, your Honour, states at the bottom that it's a [protected] document containing the information contained under the Telecommunications (Interception and Access) Act 1979. The warrant number is given at the top and your Honour can assume that this was an exhibit in front of ICAC, and I will be able to lead evidence if necessary to show, in fact, it was an exhibit in front of ICAC. … Then the [Interception Act] endorsement at the bottom, together with the fact that it was exhibited in ICAC - all of which, in our respectful submission, enable the Court to draw appropriate inferences as to the authenticity of the document and as to the fact that it is a lawfully obtained intercept or a record thereof made under the [Interception Act], with the benefit of a warrant. Mr Newlinds: This is no warrant. His Honour: Why not? Mr Newlinds: Well I haven't seen a warrant. Your Honour hasn't seen a warrant. You've got a bit paper that got something that says "warrant number" written on it. His Honour: Yes. Mr Newlinds: I do [not] accept there was a warrant and I require my learned friend to prove it. And so should your Honour. Because otherwise it's illegal. That's the first point. The second point is no - my learned friend hasn't proved that a person gave lawfully [intercepted] information in an exempt proceeding and one may infer that what actually happened is the bit of paper got tendered, probably directly onto the computer in the way things happened in ICAC. So section 74 is not engaged. No person has given this evidence. That's what we say about the Telecommunications Act. If we are wrong on all that, it's hearsay. None of this makes it not hearsay. 580 The word "not" which we have inserted in the first line of the last part of this submission does not appear in the transcript of these submissions provided to the Court. We have included it in the quoted passage because it seems obvious in context that the word had been omitted. 581 Given the submissions of Mr Newlinds, it is understandable that the Judge did not regard it as common ground that the intercepted communication had been obtained pursuant to a warrant or that it had been "given in evidence" in a proceeding before ICAC. Although the information about this at trial was scant, it seems that ICAC may have adopted a procedure of loading documents onto its computer and thereby having been available without those documents being formally tendered or otherwise adduced into evidence in the proceeding. Although counsel for Addenbrooke at trial was directly challenged on these questions, he did not adduce evidence about them. The Judge was entitled to take the view that, while the record of the intercepted conversation may in some way have been before ICAC, Addenbrooke had not shown that it had been "given in evidence" in a proceeding before it. 582 In these circumstances, we do not consider that this Court should conclude that the Judge erred in holding that Addenbrooke had not proved that the transcript contained "lawfully intercepted information" for the purposes of s 74 of the Interception Act. Nor had Addenbrooke proved that the record was an accurate record of the intercepted communication. These matters by themselves meant that Addenbrooke could not avail itself of s 75A of the Interception Act. Given this conclusion, we do not consider it necessary to consider Addenbrooke's submission as to the admissibility of the intercept under s 69 of the Evidence Act 1995 (Cth). No error has been shown in the Judge's evidence ruling. This ground of appeal fails.

Misleading or deceptive conduct against Mr Gray and SCE 583 Addenbrooke's misleading or deceptive conduct claim against Mr Gray and SCE was of a limited kind, as it did not include the claim of non-disclosure made against the other respondents. It had confirmed this in correspondence to the solicitors for Mr Gray and SCE by which it had provided particulars of the allegations in the 2ASOC. 584 As previously noted, the trial Judge rejected a claim made by Addenbrooke that Mr Gray had made misrepresentations at a meeting with Ned O'Neil on about 14 November 2010. No appeal has been brought against that finding. This meant that Addenbrooke's claim of misleading or deceptive conduct against Mr Gray and SCE turned on two positive misrepresentations alleged to have been made in the Deal Sheet (2ASOC at [29] and [48]). Some passages in Addenbrooke's written outline of submissions on the appeal suggested that its claim at trial had been more broadly based. However, that is not borne out by the 2ASOC and it is necessary on the appeal to consider only Addenbrooke's pleaded case against Mr Gray and SCE. 585 The first misrepresentation alleged by Addenbrooke to have been made by Mr Gray and SCE was the statement that the shares in Cascade would be issued at $46.57 per share whereas (as Addenbrooke alleged) they were issued at $0.00001 per share. Subject to one qualification, the evidence at trial did not support Addenbrooke's claim as to the price at which the shares had been issued and its counsel indicated during the appeal hearing that this aspect of the claim against Mr Gray and SCE was not pursued. 586 The second misrepresentation (alleged in 2ASOC [29(b)]) was the statement in the Deal Sheet under the heading "Application of Funds" that the proceeds of the Capital Raising would be used to "reduce third party debt and creditors". As with its claim against Mr Duncan, Addenbrooke alleged that this statement was wrong because the subscription monies were not to be applied to reduce third party debt and creditors but instead to acquire the interest of the Obeid family in the Mount Penny Tenement. It said that it had relied on this representation (and those alleged against Mr Duncan) in entering into the Subscription Agreement. Addenbrooke particularised the allegation by alleging that each of Denis O'Neil, Ned O'Neil and Mr Smith had relied on the representations when causing Addenbrooke to enter into the Subscription Agreement. 587 As noted earlier, the trial Judge found that the statement that the funds raised in the Capital Raising would be used to reduce third party debt and creditors was, without further explanation, false and capable of being seriously misleading. However, the trial Judge rejected the claim of reliance. His reasons are set out in [434]-[435] of the judgment, quoted earlier in these reasons. Having regard to the evidence of Denis O'Neil (who the Judge found to be the relevant decision-maker) that finding was inevitable. The Judge summarised Mr O'Neil's evidence on this topic as follows: [238] Denis O'Neil said that, in 2010, he did not and still does not read documents like the deal sheet. He said that he would rely on the advice of Ned O'Neil and Smith rather than read such a document. When asked to look at the document, he said that it would be a waste of time. It was not suggested on the appeal that that summary did not reflect the evidence given by Denis O'Neil in the trial. 588 We add that there was no evidence in the trial that anyone else, and in particular Ned O'Neil and Mr Smith, had informed Denis O'Neil of the statement in the Deal Sheet upon which Addenbrooke relies. That is to say, this was not a case in which Addenbrooke alleged that its decision-maker had learnt, indirectly, of the matters said to be misleading or deceptive. 589 The criticisms which Addenbrooke made of the Judge's conclusions in [434]-[435] of his reasons in relation to its claim against Mr Duncan are inapplicable to its claim against Mr Gray and SCE, given that no claim of non-disclosure was made against them. The only question remaining, given the confined basis for the claim against Mr Gray/SCE, was whether Addenbrooke had relied on the representation pleaded in 2ASOC [29(b)]. The rejection of that claim in a way which turned on the Judge's assessment of the credibility of Denis O'Neil is an insurmountable obstacle to Addenbrooke succeeding with this ground of appeal. 590 This is sufficient, by itself, to indicate that the appeal with respect to the dismissal of the misleading or deceptive conduct case against those respondents must fail. 591 Addenbrooke's claim of misleading or deceptive conduct against Mr Gray and SCE faced other difficulties. By their notice of contention, Mr Gray and SCE contended that the trial Judge should, in accordance with the principles emerging from Yorke v Lucas (1985) 158 CLR 661 and Butcher v Lachlan Elder Realty have found in any event that the representation in the Deal Sheet was not made by them. This was so, it was said, because Mr Gray and SCE had merely passed on information provided by others together with a disclaimer of responsibility for the accuracy of the statements, and those circumstances were known to the Addenbrooke representatives who read the Deal Sheet. 592 In Yorke v Lucas, the plurality stated that a contravention of s 52 of the former Trade Practices Act did not require an intent to mislead or deceive, so that a corporation may engage in conduct which was misleading or deceptive even though it acted honestly and reasonably. The plurality then continued, at 666: That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive. 593 Butcher v Lachlan Elder Realty concerned a claim of misleading or deceptive conduct against a suburban real estate agent. In relation to the auction of a property, the agent had produced and distributed a brochure containing a survey diagram which was inaccurate in a material respect. The purchasers' subsequent claim of misleading or deceptive conduct against the agent failed. The majority (Gleeson CJ, Hayne and Heydon JJ) accepted that "[e]verything relevant the agent did up to the time when the purchasers contracted to buy the [land] must be taken into account", at [39], and, accordingly, a close analysis of the circumstances was necessary. Their Honours then had regard in particular to the nature of the parties, the character of the transaction contemplated and the content of the brochure itself. In relation to the brochure, the majority noted that it was a short document, at [49]; that is was plain on the face of the document that the survey diagram had been taken from another document and that the agent was not its author, at [47]; and that the disclaimers on the brochure were "there to be read", at [49]. In these circumstances, the majority concluded: [51] Hence it would have been plain to a reasonable purchaser that the agent was not the source of the information which was said to be misleading. The agent did not purport to do anything more than pass on information supplied by another or others. It both expressly and implicitly disclaimed any belief in the truth or falsity of that information. It did no more than state a belief in the reliability of the sources. 594 In the later case of Google Inc v Australian Competition and Consumer Commission [2013] HCA 1; (2013) 249 CLR 435, French CJ, Crennan and Kiefel JJ summarised the position with respect to persons who pass on a misrepresentation made by others by saying: [15] It has been established in relation to intermediaries or agents that the question whether a corporation which publishes, communicates or passes on the misleading representation of another has itself engaged in misleading or deceptive conduct will depend on whether it would appear to ordinary and reasonable members of the relevant class that the corporation has adopted or endorsed that representation. It has also been established that, if that question arises, it will be a question of fact to be decided by reference to all the circumstances of a particular case. (Citations omitted) 595 In the determination of whether a statement passed on by an intermediary constitutes misleading or deceptive conduct, a disclaimer by that intermediary of belief in the truth of the represented matter or of responsibility for its accuracy will be an important, but not decisive consideration: Google Inc at [114]-[115] (Hayne J); Campbell v Backoffice Investments at [29] (French CJ). As was emphasised by McHugh J in Butcher v Lachlan Elder Realty at [109] in a passage quoted by the plurality in Campbell v Backoffice Investments at [102], it is the course of conduct as a whole which is to be considered: The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document. (Citations omitted) 596 SCE had associated itself with the Deal Sheet. Under the heading "Placement", the Deal Sheet recorded that SCE and Arthur Phillip had been "mandated" by Cascade "to undertake a placement of up to 601,307 fully paid new shares to raise $28.0 million". SCE's name and logo appeared on all four pages (as did the names of Cascade and Arthur Phillip). In addition, the Deal Sheet nominated Mr Gray as one of the two persons to whom enquiries relating to the placement should be directed, as well as giving his contact details. The Deal Sheet was, accordingly, SCE's document as well as that of Cascade Coal and Arthur Phillip. 597 SCE had entered into a written agreement with Cascade on 2 November 2010 (the Mandate Agreement) by which Cascade engaged SCE to raise $28 million in new equity by way of a placement of new ordinary shares. Eight days later, on 10 November 2010, Mr Levi at Arthur Phillip sent a number of draft documents to Mr Gray. These included an initial draft of the Deal Sheet (then two pages in length). At about the same time, Mr Gray received a USB stick containing electronic copies of documents relevant to the share placement, including a Conceptual Project Development Plan, reports of geological investigations and the Mount Penny Exploration and Mine Planning Report . Mr Gray deposed that SCE then undertook "its usual due diligence" on Cascade Coal by looking at comparative coal resources and transactions, technical reports and other information provided by Arthur Phillip and Cascade. Mr Gray deposed that "our main focus was to become comfortable with the Mt Penny tenements, and the related exploration and mining plans". 598 In addition, SCE engaged in a process of revision and review of the Deal Sheet and requested further information from Arthur Phillip. The content of the Deal Sheet was finalised by SCE on 17 November 2010 and a copy was sent that afternoon to Addenbrooke. It seems therefore that SCE was involved in a detailed way in the preparation of the Deal Sheet and had, before disseminating it, engaged in a detailed "due diligence" of the proposed share placement. 599 On the present appeal, counsel for Mr Gray and SCE emphasised the disclaimer contained in the Deal Sheet: Disclaimer This document is intended solely for the information of the particular person to whom it was provided by the Brokers and should not be relied upon by any other person. Although we believe that the advice and information which this document contains is accurate and reliable, the Brokers have not independently verified information contained in this document which is derived from publicly available sources, directors and proposed directors and management. The Brokers assume no responsibility for updating any advice, views, opinions or recommendations contained in this document or for correcting any error or omission which may become apparent after the document has been issued. The Brokers do not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this document. Except insofar as liability under any statute cannot be excluded, the Brokers and their directors, employees and consultants do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this document or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this document or any other person. … As can be seen, the disclaimer was expressed in wide ranging terms. 600 The disclaimer was at the end of the four page Deal Sheet and in smaller font than the rest of the document. It would have been easy for the eye to pass over it. However, Ned O'Neil said that he had read the disclaimer: Q: First of all, did you read this document carefully about the time you received it? A: Yes. … Q: Under the heading Disclaimer? A: Yes. Q: I take it you read that at the time you read the document? A: I don't know if I would have read it thoroughly but I was mainly interested in the content of that. I appreciated there - I did appreciate that there was a disclaimer. Q: Yes. And you understood, didn't you, that the information contained in this document came from Cascade and its directors and not from Southern Cross? A: Yes. Q: And you understood that Southern Cross accepted no responsibility for updating or correcting any error or omission in the document? A: Yes. Q: And you understood that Southern Cross gave no warranty as to the accuracy reliability or completeness of any advice or information in the document? A: Yes. I see that. Yes. Q: You understood that at the time is what I'm asking you? A: Yes. 601 Mr Smith, somewhat curiously, said that he had read every part of the Deal Sheet other than the disclaimer because he "wouldn't read a disclaimer as a matter of course". It seems implicit in this evidence that Mr Smith was acknowledging that he had been aware at the time that the Deal Sheet did contain a disclaimer. It also seems that he had deliberately refrained from reading it. 602 Accordingly, the Addenbrooke representatives who read the misleading or deceptive statement in the Deal Sheet either knew and understood the disclaimer or, being aware of its presence, chose not to read it. 603 In addition to these circumstances, counsel for Mr Gray and SCE submitted that two further features were particularly pertinent. First, that the misleading statements had been made to an experienced commercial investor. In fact, the Deal Sheet itself specified that the placement was available only to investors who qualified as "professional or sophisticated investors" under ss 9 and 708 of the Corporations Act 2001 (Cth). Secondly, the subject matter of the misleading statement related to Cascade's purpose, this being something about which Mr Gray and SCE could have only indirect knowledge, necessarily derived from what they had been told by Cascade's representatives. 604 We accept that Cascade's purpose was a matter which was very much within Cascade's own knowledge. However, it was not a matter the truth of which turned only on the truth of Cascade's own assertions on the topic. Instead, the very nature of the purpose suggested that there would be a good deal of objective evidence bearing upon the truth, or otherwise, of Cascade's stated purpose. SCE had had the opportunity to satisfy itself about the Capital Raising and, as noted, had undertaken a due diligence process before proceeding to implement its mandate. SCE had chosen to include the statement of Cascade's purpose in the Deal Sheet in a context which, on our assessment, involved more than an apparent passing on of information provided by Cascade. Accordingly, we are not inclined to attach significance to this feature. 605 However, Addenbrooke's experience and sophistication as an investor is an important feature of the present case, even though it did not act in a very sophisticated way on this occasion. SCE had stated explicitly in the disclaimer that it had not verified that statement independently, and said expressly that it was relying on information derived (relevantly) from Cascade's directors. By this statement, SCE informed Addenbrooke's representatives that it was not making any warranty as to the accuracy, reliability or completeness of the information in the Deal Sheet. The statement in the Deal Sheet as to the purpose for which the funds would be put had to be read in conjunction with that statement. In our opinion, Mr Gray and SCE had disassociated themselves from the misleading statement of the purpose to which the Capital Raising would be put. 606 In these circumstances, we consider that the Judge could have dismissed Addenbrooke's misleading or deceptive claim against Mr Gray and SCE on the alternate basis that they were not the persons who had made the misleading statement in the Deal Sheet. We would uphold this aspect of the Notice of Contention. 607 For this independent reason, we consider that Addenbrooke had not made out the claim of misleading or deceptive conduct against Mr Gray and SCE. 608 This conclusion makes it unnecessary to consider the remaining issues raised by [1] to [6] of the Amended Notice of Contention of Mr Gray and SCE.

The claim in negligence against Mr Gray and SCE 609 Addenbrooke's pleaded claims of negligence by Mr Gray and SCE turned on two aspects of their relationship. It alleged first that during the period of at least 10 years before November 2010, SCE and Mr Gray had provided brokerage, investment advice and other financial services to it. The services which they had provided were said to include presenting potential investments to it, providing advice in respect of the potential investments including advice as to their nature and their potential risks; recommending investments, including stock placements, and facilitating investments by Addenbrooke in over 50 companies and advising in relation to those investments. Addenbrooke alleged that, by reason of this history, it had come, to the knowledge of Mr Gray and SCE, to trust and rely upon their advice, recommendations and information in deciding whether or not to make investments. It pleaded that these circumstances by themselves gave rise to a duty of care owed by Mr Gray and SCE in relation to the Cascade Capital Raising. 610 Addenbrooke alleged, secondly, that Mr Gray and SCE's duty of care arose from the circumstance that SCE had been mandated by Cascade in relation to the Capital Raising, including to prepare the document to place before potential investors and to seek to attract investments in the Capital Raising, and that Mr Gray had approached it, as a valued client of SCE, about the Capital Raising, had provided information about it, and had recommended that Addenbrooke participate in the Capital Raising. 611 Addenbrooke particularised the breach of duty of care it alleged in multiple ways. These included allegations that Mr Gray and SCE had themselves failed to understand and advise it concerning the purpose of the Capital Raising, had failed to make "basic enquiries", and had failed to disclose that a substantial portion of the Capital Raising was to be paid to CMG, a shareholder of Cascade. 612 Each of Mr Gray and SCE denied that a duty of care was owed to Addenbrooke and denied the allegations of breach. 613 The trial Judge did not address these aspects of Addenbrooke's negligence action against Mr Gray and SCE at all. Instead, his Honour concluded that the findings which he had made in respect of Denis O'Neil were "fatal" to Addenbrooke's negligence action, at [436]-[437]. The Judge's findings concerning Denis O'Neil at [434]-[435] (set out earlier in these reasons) are pertinent in this respect. 614 On their face, these are strong findings standing in the way of a successful challenge on appeal. However, it is possible that these findings may be affected by the shortcomings in the Judge's consideration of causation and reliance, identified earlier in these reasons. For the reasons which follow, it is not necessary to express a concluded view about that. 615 By [7(a)] of their Notice of Contention, Mr Gray and SCE contend that the trial Judge should have found that they did not owe Addenbrooke a duty of care. The respective submissions of the parties on this topic were relatively brief, engaging with issue at a factual level rather than one of principle. That is to say, the parties accepted that, in accordance with cases such as Tepko Pty Ltd v Water Board [2001] HCA 19, (2001) 206 CLR 1 at [47]; The Mutual Life and Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556; Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 at 249-52 (Brennan CJ), 255 (Dawson J), 261-2, 264 (Toohey and Gaudron JJ), 272-4 (McHugh J); and ABN AMRO Bank NV v Bathurst Regional Council [2014] FCAFC 65, (2014) 224 FCR 1 at [573]-[578], [1106], a stockbroker and financial advisor may, depending on the circumstances of their relationship, owe a duty of care to a client in respect of the advice they provide. The particular circumstances giving rise to the duty exist when advisors realise, or ought to realise, that the client will trust in their special competence to give the advice; it is reasonable for the client to accept and rely on that advice; and it is reasonably foreseeable that the representee is likely to suffer loss should the advice turn out to be unsound: Mutual Life v Evatt at 571; San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 (1986) 162 CLR 340 at 372. 616 In its evidence at trial, Addenbrooke emphasised the lengthy period during which it had been a client of Mr Gray and SCE. However, the evidence which it led on that topic was of a general kind. In the first affidavit containing part of his evidence in chief, Denis O'Neil said in relation to this topic, at [13], that his view of the investment in Cascade had been "persuaded" by, amongst others "my trusted advisor of 10 plus years, Gray". In his oral evidence, Denis O'Neil said that he had a personal as well as business relationship with Mr Gray, that he spoke to him on some Saturday mornings at the Rose Bay Marina and sometimes during the week, that Mr Gray called him sometimes with recommendations about shares, and that sometimes he followed those recommendations and sometimes did not. His evidence did not descend into any particularity about these matters. 617 Likewise, Ned O'Neil's initial affidavit about his relationship with Mr Gray and SCE was expressed very generally: [4] For approximately the past 10 years, Addenbrooke has conducted business with [Mr Gray] through [SCE]. From time to time we have been invited to participate in share placements, and have had investment proposals forwarded to us. We have on various occasions, accepted those proposals and invested on the recommendation of Gray and SCE, generally in short term share investments in public companies. I also knew Gray socially. 618 Ned O'Neil's second affidavit added relatively little to the evidence about Addenbrooke's relationship with SCE, which he described as a "stockbroking relationship", at [12]. 619 In his third affidavit, Ned O'Neil said that he had become more involved in the discussions between Denis O'Neil and Mr Gray from early 2010. He then deposed: [5] … I noted, from these discussions, that my father always relied upon the advice of Mr Gray, on behalf of [SCE], to sell or acquire securities. I do not recall any occasion on which Addenbrooke did not follow the advice of Mr Gray. I observed that Denis would listen to what Mr Gray said and would trust him and closely follow his advice in respect of proposed trades and opportunities. [6] From what I observed of the relationship between Denis and Mr Gray, on behalf of [SCE], it was clear that my father trusted Mr Gray intimately, believing in his advice and assistance in relationhip (sic) to transactions and securities. [7] Addenbrooke acted on the word-of-mouth advice from Mr Gray, on behalf of [SCE]. While there may have been an odd occasion when my father contacted Mr Gray in relation to a proposed transaction or investment idea, to get Mr Gray's advice, almost invariably Mr Gray would contact him to draw his attention to an investment opportunity. 620 In his first affidavit, Mr Gray deposed that, from about 2000 until June 2011, Addenbrooke had had a "stockbroking relationship" with SCE. He described that relationship as follows: [26] Addenbrooke mostly bought and sold securities listed on the Australian Stock Exchange (the ASX) through [SCE]. Most transactions were instigated by ideas from [SCE]. The remainder were instigated by Addenbrooke itself, with [SCE] merely providing an execution function. As far as I am aware, [SCE] had not introduced Addenbrooke to any unlisted investment opportunity since the turn of the Century internet boom. 621 In his second affidavit, Mr Gray elaborated on the relationship as follows: [12] During the period that it was a client of [SCE], I performed stockbroking services for Addenbrooke. Throughout that period, Addenbrooke was not a "discretionary client" of [SCE]; in other words, [SCE] did not have authority to make investments on Addenbrooke's behalf without specific instructions from Addenbrooke. In all cases, the decision as to whether Addenbrooke would make a particular investment and (if so) what amount it would invest rested with Addenbrooke. The particular services that I provided to Addenbrooke were not the same in every case, but varied, depending on the particular investment or transaction. [13] In many cases, I made investment/stock recommendations to Addenbrooke, which it either accepted or rejected. I often provided information to Addenbrooke that was pertinent to a potential investment, including providing prospectuses or placement documentation, as well as general research. I sometimes presented Addenbrooke with investment opportunities and arranged presentations by or meetings with companies that were seeking to raise funds. [14] On a number of occasions, my role was purely transactional; that is, Denis or (rarely) Ned contacted me and instructed me to buy or sell a security, in circumstances where I had not given any advice or recommendation relating to that trade. [15] Southern Cross did not charge Addenbrooke a periodic fee for advice or services. Rather, [SCE] charged Addenbrooke a brokerage fee per transaction. The brokerage fee varied over time, but in 2010 it was about $100 or 1% of the transaction value, whichever was the greater. [16] In the case of the Cascade Placement however, [SCE] did not charge Addenbrooke any fee at all. Nor did [SCE] receive any fee from Addenbrooke in respect of the Cascade Placement. That is because [SCE] was engaged by Cascade Coal in respect of that transaction, and [SCE] was performing its obligations to Cascade Coal under the Mandate Agreement in exchange for a fee payable by Cascade Coal. Equally Addenbrooke was not charged a fee for its investment in WEC performance rights as the fees in that instance were paid by the insurer, White Energy Limited. 622 If the relationship between Addenbrooke and SCE had been as described by Ned O'Neil in these passages, one would expect that it would be evidenced in documentation. That is especially so given a table produced by Addenbrooke listing 26 investments it had made through SCE before 25 November 2010 (to which we will refer shortly). 623 However, subject to some qualifications, such evidence was lacking. Counsel for Addenbrooke did point to documentary evidence indicating that in September and October 2010, Mr Gray had provided research papers relating to WEC and its prospects. There were also a series of emails between Ned O'Neil, on the one hand, and Mr Gray, on the other, concerning the purchase of shares in WEC. Those email exchanges do not suggest that SCE and Mr Gray were acting as investment advisors to Addenbrooke. Instead, the exchanges indicate that Denis O'Neil had determined that Addenbrooke should purchase shares in WEC to a value of $1 million and that SCE was acting to execute that request. In particular, the email exchanges do not include recommendations or advice of the kind which one would expect from a stockbroker providing investment advice. 624 The picture which emerges from the evidence of the relationship between Addenbrooke and SCE is of a conventional sharebroker-client relationship, with the broker being retained on a transaction by transaction basis and providing advice and recommendations from time to time which were usually followed by the client. It may be accepted that in this respect the two entities were in a fiduciary relationship: Daly v Sydney Stock Exchange at 377. The evidence does not suggest, however, that SCE and Addenbrooke were in a continuing relationship of investment advisor and client. 625 A number of features distinguish Addenbrooke's investment in Cascade from its usual course of dealing with SCE and indicate that SCE and Mr Gray did not owe Addenbrooke the duty of care it alleged. The first is that the Judge accepted evidence indicating that Addenbrooke's investment in Cascade was initiated, and driven, by Denis O'Neil. In particular, the Judge accepted, at [208], Mr Gray's evidence as set out in his affidavit of 1 December 2013 as follows: 31. In about September 2010, I received the first of what became a series of telephone calls from Denis in relation to an investment in a coal deal. We had a discussion in words to the following effect: Denis: "Your firm is going to be awarded a hot coal deal. I want to be a significant investor in it, and I want a firm allocation." Gray: "Do you know the name of the hot deal?" Denis: "I can't remember the name. It's something in coal." Gray: "Without the name, I can't do anything, as we have a lot of prospective deals on." Denis: "I'll find out the name and come back to you." At that time, I did not know what deal Denis was referring to. I had no knowledge of Cascade Coal Pty Limited (Cascade Coal) other than what I might have read about it in the press, nor did I have knowledge of any proposed capital raising for Cascade Coal. 32. A few days later, Denis telephoned me again, and we had a discussion in words to the following effect: Denis: "Have you been contacted about the coal deal yet?" Gray: "No. Did you find out the name?" Denis: "Yes. I asked and I should have written it down because I've forgotten it again." Gray: "Well, when you find out, let me know." 33. Later in September 2010, and also in October 2010, I received several more telephone calls from Denis in relation to this so-called "hot coal deal". Denis enquired "has Southern Cross been awarded the deal yet", he reminded me several times that "I want to make a significant investment in this deal", and using words to the following effect he emphasised that "I'm prepared to commit for a large amount early, on a firm basis, so I don't want to be cut back on what I want to put in", and he foreshadowed that "I'll be getting other high net worth friends of mine to invest in the deal as well". 626 The Judge accepted, in addition, that Denis O'Neil had telephoned Mr Gray again in late October 2010 chasing up the "hot coal deal" and had enquired of him whether SCE had been approached. Mr Gray confirmed the approach but told Denis O'Neil that the mandate to SCE had not yet been awarded. He said that Denis O'Neil indicated that he wished to make a substantial investment, that he would be enlisting other high net worth friends to invest in the deal as well and urged Mr Gray not to forget him, at [209]. 627 This evidence is inconsistent with Addenbrooke having entered into the investment in circumstances giving rise to a duty of care by SCE, in particular in it having done so on the recommendation and advice of SCE, let alone in reliance on that advice. 628 The second matter is that Addenbrooke, at least through Denis O'Neil, knew that SCE and Mr Gray were acting on behalf of Cascade in the Capital Raising, and not on its behalf, or as an independent sharebroker. Denis O'Neil can be taken to have known therefore that Mr Gray and SCE owed duties to Cascade which may not be consistent with any duties it owed to Addenbrooke. The Court should be cautious about finding the existence of a duty of care in this circumstance. 629 Thirdly, the Judge also accepted that Mr Gray had urged Denis O'Neil and the other Addenbrooke representatives to attend the Presentation Meeting so that they could hear the details of the proposed investment directly from Mr Duncan and the other Cascade representatives, at [213]. The fact that Mr Gray did so is inconsistent with him having accepted responsibility for providing advice about the investment and inconsistent with the Addenbrooke representatives having understood that that was so. 630 The fourth feature is that Addenbrooke's investment in Cascade was very different from the 26 investments it had made through Mr Gray before 25 November 2010. With two exceptions, those investments were all for maximum amounts of about $100,000, and in most cases, much less. The two exceptions were investments in Westpac Banking Corporation and Fortescue Metals. Most of the investments appear to have been in publicly listed companies. Mr Gray said that, had it not been for Denis O'Neil's approach to him, he would not have considered an investment in an unlisted coal company like Cascade for Addenbrooke. That evidence was not challenged in cross-examination. This feature in particular makes it improbable that the Cascade investment was made in the same way as Addenbrooke's previous investments through Mr Gray and accordingly pursuant to a duty of care which had arisen by reason of their relationship as sharebroker and client. 631 The fifth feature is Addenbrooke's status as an experienced investor. It was accustomed to relying upon its own judgment in relation to investments. Ned O'Neil acknowledged that he, Denis O'Neil and Mr Smith were "experience[d] professional investors". Addenbrooke was not in a position of vulnerability of the kind which could found a duty of care. Addenbrooke's experience and sophistication is of course not inconsistent with the existence of a duty of care but it is a relevant feature, together with the other matters we have mentioned, pointing against the existence of such a duty. 632 For these reasons, we consider that Mr Gray and SCE did not owe Addenbrooke the duty of care it alleged in relation to the investment in Cascade. This contention of Mr Gray and SCE should be upheld. Addenbrooke's claim in negligence against Mr Gray and SCE should have been dismissed for a reason which was independent of the Judge's reasons concerning reliance and causation. 633 This conclusion makes it unnecessary to consider the Notice of Contention of Mr Gray and SCE concerning Addenbrooke's contributory negligence.

The breach of trust claim against SCE 634 Addenbrooke's claim of a breach of trust was made against SCE only. The claim made in the 2ASOC [139]-[140] was to following effect. Addenbrooke alleged that the subscription monies ($7,999,980.88) were to be held in the Berndale Trust Account by SCE on a resulting trust in its favour and paid to Cascade in payment for the subscribed shares, pursuant to a declaration given in cl 4.2 of the Subscription Agreement, and were not to be used or applied for any other purpose. It then alleged that SCE breached that trust by paying the subscription monies out to CMG, and that the monies were used or applied for a purpose other than that of acquiring shares in Cascade, at [140]. As already noted, Addenbrooke did not pursue an alternative pleaded claim that the trust had been breached because the shares were issued at a price of $0.00001 per share, and not at $46.57 per share. 635 The trial Judge did not advert to the claim of breach of trust at all. SCE acknowledged that that was so. 636 It was common ground that this Court is in as good a position as the trial Judge to deal with this aspect of Addenbrooke's claim. In order to do so, it is necessary to record some more (uncontentious) details as to the circumstances of Addenbrooke's payment and SCE's disbursement of the monies. 637 Ned O'Neil informed Mr Gray by email on 22 November 2010 at 8.34 pm that Addenbrooke would like to take up $6 million in Cascade's capital raising. He asked Mr Gray to send the "necessary documents". Mr Gray did not provide the documents immediately and, on 24 November 2010 at 5.48 pm, Ned O'Neil sent a further email to Mr Gray: As per our discussions yesterday when do you anticipate we will see the documentation for our $6,000,000 placement? I am just conscious of the Friday deadline. 638 On the morning of 25 November 2010, in a telephone conversation with Mr Gray, Denis O'Neil said that Addenbrooke would like to increase its investment to $8 million. 639 This was followed by an email from Ned O'Neil at 9.05 am to Mr Gray: I believe you have spoken to Denis this morning and we would like to increase our placement in Cascade Coal to $8,000,000. Can you confirm your acceptance of this. Please also forward the necessary documents so we can execute. 640 At 2.55 pm on 25 November, Mr Thomas of SCE sent an email to Mr Smith at Addenbrooke with the following content: Please see attached Cascade Coal subscription agreement for execution. Please sign and return at your earliest convenience. Funds can be transferred into our trust account as per below. Mr Thomas then gave details for the Berndale Trust Account. 641 Mr Smith replied by email at 3.59 pm the same day saying: Please find attached executed Cascade Coal Agreement as requested. I confirm that we have transferred the $7,999,980.88 to your trust account this afternoon with a message "Addenbrooke - Cascade Coal". 642 The subscription agreement attached had been executed by Denis and Ned O'Neil on behalf of Addenbrooke. It must have been scanned so that Mr Smith could send it by email. 643 Clause 4 of the Subscription Agreement executed by Addenbrooke contained the following: 4.1 Completion Completion must take place on the Subscription Date. 4.2 Subscription and payment of Subscription Price (a) On or before the Subscription Date, the Subscriber must deliver to the Company an application form for the Placement Shares duly executed by the Subscriber (or its nominee) in a form that the company agrees to accept. (b) On the Subscription Date, the Subscriber must pay to the Company the Subscription Price in cleared funds in Australian Dollars into the nominated account of the Company, as directed by the Company. … The "Subscription Date" was defined in cl 1.1 of the Subscription Agreement to be 26 November 2010. 644 By letter dated 1 December 2010, Cascade (by its director, Mr Poole) instructed SCE to transfer $25 million of the proceeds of the Capital Raising to a bank account of CMG and the balance to a bank account of Cascade. SCE complied with that direction on 2 December 2010. 645 Addenbrooke pleaded that this conduct of SCE constituted a breach of trust because: (a) The subscription monies were paid for a purpose other than that for which they were paid into the Berndale trust account, in that they were paid to CMG; (b) The subscription monies were used or applied for a purpose other than that of acquiring shares in Cascade at a price of $46.57 per share; (c) The Addenbrooke placement shares were issued to Lost Ark Nominees, for and on behalf of the applicant, at a price of $0.00001 per share, and not at $46.57 per share; (d) [SCE] failed to use reasonable care, skill and prudence in acting in accordance with [Mr Poole's direction] in that payment was made to CMG at the direction of Poole, the sole shareholder and director of CMG, as a result of the direction given by him in his capacity as a director of Cascade and a trustee exercising care, skill and prudence would not have accepted a direction from Poole in that capacity. 646 At the heart of Addenbrooke's submission on the appeal was the contention that the payment out of the funds was a breach of trust because Mr Poole had had no authority to give SCE a direction as to the payment until Cascade executed the Subscription Agreement. Its contention was that that had not occurred. 647 Addenbrooke's submissions concerning this ground of appeal proceeded as follows: (a) clause 4.2 of the Subscription Agreement required subscribers to "pay to the Company the Subscription Price in cleared funds in Australian Dollars into the nominated account of the Company, as directed by the Company"; (b) the "Company" in cl 4.2 was Cascade; (c) there was no evidence that the Berndale Trust Account had been nominated by Cascade, that is, that it was the account "directed" by Cascade, as the evidence indicated only that an employee of SCE had told Mr Smith that "[f]unds can be transferred into our trust account" and had provided details of the Berndale Trust Account; (d) this meant that the money must have been paid by Addenbrooke to SCE to be held on trust for the purposes specified in the Subscription Agreement; (e) the funds could be paid out only for the purposes stated in the Subscription Agreement, namely, the acquisition of the Placement Shares, being 171,784 shares at an issue price of $46.57 per share; (f) further, or alternatively, Addenbrooke's payment of the subscription price could not be regarded as extinguishing the debt which it had incurred for the acquisition of the Placement Shares because no such debt had been incurred at the time of its payment. That was because Cascade had not at that time executed the Subscription Agreement and indeed, did not do so, until at least 30 November 2010. Accordingly, it had to be the case (so Addenbrooke submitted) that SCE held its subscription monies on trust, albeit in the account of its agent Berndale; (g) SCE had relied on a written direction from Mr Poole dated 1 December 2010 to pay $25 million to CMG and the balance to Cascade. There was no evidence that Cascade had executed the Subscription Agreement at that point, with the consequence that Mr Poole's direction could not be regarded as a direction pursuant to cl 4.2 of the Subscription Agreement. Even if it was, the payment to CMG was not payment to "the nominated account" of Cascade. Hence, there had been a breach of trust; (h) as the funds had been paid out to CMG, SCE as trustee was liable to replace them: Youyang Pty Ltd v Minter Ellison Morris Fletcher [2003] HCA 15; (2003) 212 CLR 484. 648 In support of these submissions, Addenbrooke noted that the terms of the Mandate Agreement in relation to the Capital Raising included the following: For the removal of doubt it is agreed that neither SCE nor any of its agents are in and will not be in a fiduciary relationship with the Company under any of the express or implied terms of the Agreement. A later provision provided: SCE acknowledges that the Company has signed this Agreement to authorise SCE only to issue Placement letters and then receive Application Forms on behalf of the Company. These clauses evidenced, Addenbrooke submitted, that SCE was not to be in a trust or fiduciary relationship with Cascade, reinforcing the inference that it had received and held the subscription monies for Addenbrooke on trust for it. 649 Addenbrooke's submissions concerning the existence of the trust and its breach faced a number of difficulties, some of which were acknowledged by its counsel. The first is that the submission that the Subscription Agreement had not been executed by Cascade at the time of its payment is inconsistent with Addenbrooke's pleaded case at trial that the Subscription Agreement "was entered into on 25 November 2010". By its defence, SCE had admitted that allegation. Accordingly, it is (and was not) open to Addenbrooke to contend that no debt to Cascade had been incurred at the time it paid the subscription monies or that Mr Poole's direction could not have been made pursuant to cl 4.2. 650 Secondly, Addenbrooke did not make the claim at trial that the Subscription Agreement had not been executed by Cascade at the time it had made the payment and at the time the payment was made to CMG. This no doubt explains why there was no evidence led at trial as to the date and time at which Cascade did execute the Subscription Agreement. Had the point been taken at trial, it may well have been met by further evidence, or further defences, for example, a plea of estoppel by conduct. 651 Thirdly, there was no suggestion at trial that the Berndale Trust Account was not the nominated account of Cascade for the purposes of cl 4.2(b) of the Subscription Agreement. SCE contended (correctly) in its Amended Notice of Contention, that Addenbrooke's 2ASOC had not included a claim to that effect. Instead, it seems to have been accepted at trial that Addenbrooke had complied with its obligation under the Subscription Agreement by making the payment of the subscription amount to the Berndale Trust Account. It was not a case of Addenbrooke making a payment to an intermediary to hold the money on its behalf pending the happening of some further event. Again, had the allegation at trial been that the Berndale Trust Account was not the nominated account of Cascade, it may have been met by further evidence. 652 Fourthly, Addenbrooke's pleaded case at trial was that it had paid the subscription monies to the Berndale Trust Account "for the express or implied purpose of that money being subsequently applied at the direction of Cascade in payment of the Addenbrooke Subscription Price" and that the monies were to be held on a resulting trust for its benefit until paid to Cascade "in accordance with a direction" under cl 4.2(b) of the Subscription Agreement. Further, Addenbrooke's pleaded case was that the payment out of the Berndale Trust Account on 1 December 2010 was pursuant to a written direction given by Mr Poole that same day "on behalf of Cascade". That is to say, Addenbrooke's own case at trial was that the monies had been paid in accordance with a direction of Cascade pursuant to the trust it alleged. 653 Finally, we do not consider that the provisions in the Mandate Agreement on which Addenbrooke relied have significance in the present context. Instead, we consider that SCE's submission that the receipt into and payment out of the Berndale Trust Account reflects the existence of a collateral arrangement between Cascade and SCE to facilitate the payment of share subscriptions has some force. 654 Having regard to these matters, Addenbrooke's claim that SCE held its subscription monies on trust for it cannot be sustained. There was no trust in favour of Addenbrooke. Instead, SCE held the monies in the Berndale Trust Account on trust for Cascade. Further, and in any event, on Addenbrooke's own pleaded case, SCE's conduct did not breach that trust. SCE had caused the monies to be paid out in accordance with the written direction which it had received from Cascade. 655 Accordingly, while the Judge did not determine Addenbrooke's breach of trust claim, that is a matter of no consequence as the claim would inevitably have failed. This conclusion makes it unnecessary to consider further the matters raised by [8A] and [8B] of the Amended Notice of Contention of Mr Gray and SCE.

Remaining issues raised by the notice of contention of Mr Gray and SCE 656 The reasons given above indicate that Addenbrooke's appeal, insofar as it concerns Mr Gray and SCE wholly fails. That conclusion makes it unnecessary to consider the remaining issues raised by the Amended Notice of Contention of Mr Gray and SCE.

Causation of damage/assessment of damages 657 There were a number of issues at trial concerning the causation of the loss alleged by Addenbrooke and the assessment of its damages which the Judge did not address. That was because His Honour took the view that it was not necessary for him to do so, given his findings on the issue of reliance. Nevertheless, the Judge did say, at [441]: Before leaving the matter, I wish to note that, even if Addenbrooke had persuaded me that the defendants were liable, there remained very serious obstacles in the way of its claim, principally in the area of causation. Because of the findings which I have made, it is not necessary to discuss these questions. 658 By his Notice of Contention, Mr Duncan contended that the Judge should have found that Addenbrooke had not proved the value, as at 26 November 2010, of the shares it had purchased in Cascade. It was plain, he submitted, that that value was more than nil with the consequence that Addenbrooke had not proved any loss. 659 Mr Duncan submitted further that the reduction in the value of the shares on which Addenbrooke relied was attributable to the enactment on 31 January 2014 by the New South Wales Parliament of the Mining Amendment Act, the effect of which had been to cancel, without compensation, the exploration licences granted to Cascade. He submitted that the enactment of the Mining Amendment Act was a supervening event, the occurrence of which was not foreseeable nor inherent in the shares themselves so that it could not be held that he was responsible for the consequential loss. He submitted that, for these independent reasons, Addenbrooke's claim should have been dismissed in any event. 660 The Amended Notice of Contention of Mr Gray and SCE contained similar contentions. Given our view that Addenbrooke's claim against Mr Gray and SCE fails in any event, it is sufficient to address only the matters raised by Mr Duncan's Notice. 661 Mr Duncan's submissions in support of this aspect of his Notice of Contention proceeded as follows. It was for Addenbrooke to prove its loss in accordance with the principles stated in Potts v Miller (1940) 64 CLR 282, namely, that its loss comprised the difference between the subscription amount it had paid, on the one hand, and the real value of the shares at the date of acquisition, on the other. While regard could be had to subsequent events which cast light on the real value of the shares as at the date of acquisition, the reduction in value caused by the enactment of the Mining Act more than two years later was an independent or supervening act of the kind discussed in Potts v Miller by Dixon J at 298. Until the Mining Amendment Act was enacted, Addenbrooke still owned shares of considerable value and there was no evidence to indicate that their value, as at 26 November 2010, was less than the subscription amount. 662 In our opinion, it would be inappropriate for this Court to conclude that the Judge should have dismissed Addenbrooke's claim because it had not proven, in any event, a loss which could be attributed to Mr Duncan. 663 In the first place, the rule in Potts v Miller "is not universal or inflexible or rigid" and is only a rule of practice: HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640 at [35]. The High Court went on at [36] to explain why the rule in Potts v Miller could not be applied inflexibly: One key qualification of the rule which prevents it from being inflexible is that the test depends not on the difference between price and "market value", but price and "real value" or "fair value" or "fair or real value" or "intrinsic" value or "true value" or "actual value" or what the asset was "truly worth" or "really worth" or "what would have been a fair price to be paid … in the circumstances … at the time of the purchase". This distinction is sometimes difficult to draw, but it is old and fundamental. (Citations omitted) As the Full Court observed in ABN AMRO at [969], the rule in Potts v Miller is neither a default position nor a starting position. 664 Secondly, s 12GM of the ASIC Act (like its counterpart, s 237 of the Australian Consumer Law (Competition and Consumer Act 2010 (Cth), Sch 2)) is not confined by the common law principles concerning causation of loss and recovery of damages. It vests the Court with flexible powers to craft an appropriate remedy. As was observed by the Full Court in ABN AMRO at [963]: 963. A number of matters are worth stating. … subject to the loss being proved, the approach to assessment must be flexible and "best adapted to give the injured claimant an amount which will most fairly compensate for the wrong suffered" provided that it works no injustice: Ingot Capital Investments at [171]; Henville v Walker (2001) 206 CLR 459 at [131] and HTW Valuers at [65]. … causation and damages are closely linked: Ingot Capital Investments at [172]. … no less importantly, where property has been acquired in reliance on misrepresentations, there will be many cases where the losses are not represented by the difference between the price and the value of the asset at the time of purchase: see HTW Valuers at [35]-[40]; Ingot Capital Investments at [176]-[180] and [190]; and Smith New Court Securities Ltd v Citibank NA [1997] AC 254 at 266. The circumstances in which that last group of cases might arise are not closed. (Emphasis in the original) 665 At the trial, Addenbrooke had submitted that its damages should be assessed on a no transaction basis. If the Judge had accepted that submission, it would have been open to him to order pursuant to s 12GM, as a condition of the award, that Addenbrooke transfer the shares it held in Cascade to Mr Duncan. 666 Thirdly, and in any event, a court may, when assessing damages, have regard to subsequent events: HWT Valuers, at [40]. Accordingly, the decision of WEC not to proceed with the takeover of Cascade was pertinent. It was open to the Judge to conclude that part of the value of Cascade's shares lay in the prospect of a fairly quick sale of the shares to WEC. The Judge did not make findings as to why WEC withdrew from its proposed takeover of Cascade. The evidence indicated that there may have been more than one reason for its decision. Earlier, we noted that, when WEC announced that it would not proceed with the takeover, it attributed its decision to "uncertainty" about the effects of mining in the Bylong Valley. Other evidence indicated that Mr Cubbin, the Chairman of the Committee of Independent Directors assessing the proposed takeover, was concerned to know the details concerning the $41 million in Cascade's accounts, and this was a matter which Cascade's directors were anxious not to disclose. It is possible that it was the non-disclosure or, at least, the unwillingness of Cascade's directors to make the disclosure, which formed at least part of the reason for WEC's decision. These are matters about which this Court cannot make an assessment. It is sufficient to note, however, that if issues about disclosure were the effective cause, or at least one cause of the WEC decision, it would have been open to the Judge to conclude that there was a causal link between the non-disclosure of which Addenbrooke complained in these proceedings, on the one hand, and a diminution in value of the Cascade shares resulting from the WEC decision, on the other. 667 Further, it may have been open to the Judge to assess damages on the basis that Addenbrooke was locked into a minority shareholding of approximately 3% of Cascade's shares when those shares, as a whole, were tightly held. In those circumstances, it could reasonably be thought that the value of Cascade's shares was well less than the amount which it had paid. 668 We accept that, on the evidence, the assessment of Addenbrooke's loss would have been difficult. Nevertheless, that is often the circumstance confronting a court: see Enzed Holdings Ltd v Wynthea Pty Ltd [1984] FCA 373, (1984) 57 ALR 167 at 182; and Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10, (2003) 196 ALR 257 at [38] in this respect. We would not conclude that, despite the difficulties, the Judge could not have made any assessment at all. 669 In our view, it would not be appropriate for Addenbrooke's appeal in relation to Mr Duncan to be defeated on the grounds which we would uphold on the basis that damages were not proved, nor capable of being proved. We are not persuaded that a reasoned assessment, even if attended with some difficulty, could not have been made by the Judge. This issue ought to be tried together with the other issues which are to be retried.

Apportionability 670 The respective Notices of Contention of each of Mr Duncan and Mr Gray and SCE included contentions that the Judge should have found, in the event that their liability to Addenbrooke was established, that its claim was an apportionable claim within the meaning of Div 2 of Pt 2 of the ASIC Act. The Judge did not address this submission at trial, no doubt taking the view that it was unnecessary to do so. 671 In our opinion, it is not appropriate for this Court to address the issue either. Given that there is to be a retrial of Addenbrooke's claim against Mr Duncan, the issue should be agitated in that retrial. This Court should not give what would be, in effect, an advisory opinion on the topic. 672 For similar reasons, the manner in which account is to be taken of the monies Addenbrooke has received in settlement of its claims against other defendants, should also be addressed at the retrial.

Conclusion 673 In summary, for the reasons given above, Addenbrooke's appeal insofar as it concerns Mr Gray and SCE fails altogether. Its appeal against the dismissal of its claim against Mr Duncan succeeds, although not on all grounds. 674 We would make the following orders: (a) Addenbrooke's appeal insofar as it concerns the dismissal of the claim it made against Mr Gray and SCE be dismissed; (b) Addenbrooke's appeal with respect to the dismissal of the claims against Mr Duncan of misleading or deceptive conduct, unconscionable conduct and knowing involvement in the alleged misleading or deceptive conduct of Cascade be allowed and that the order of dismissal be set aside to that extent; (c) Those claims be remitted for trial before another Judge; (d) Addenbrooke's appeal with respect to the dismissal of its claim that Mr Duncan was knowingly involved in a breach of trust by Cascade be dismissed. 675 We would hear from the parties as to costs and as to any consequential matters. I certify that the preceding three hundred and eighty-four (384) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Gilmour and White.