Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd) v STM123 Pty Ltd [2026] NSWSC 882 | Case summary

Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd) v STM123 Pty Ltd [2026] NSWSC 882 | Case summary | Zoe

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2026-07-24

Before

Nixon J

Catchwords

CONTRACTS – where agreements for construction of various developments for costs plus margin – whether oral agreement to vary level of margin – terms of agreement – identity of contracting parties – quantum of costs and margin due under contracts CONTRACTS – termination – whether contracts repudiated by builder or by developer – whether breach of restraint provisions by developer – whether contracts validly terminated by developer BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – where payment claims served by builder – where builder purported to suspend works – where developer completed works through related company – whether suspension of works was in accordance with provisions of Act – whether builder entitled to lost profits BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – Design and Building Practitioners Act 2020 (NSW) – where rectification order issued in respect of various defects – where developer incurred costs of rectifying defects – whether expert evidence established defects in works – whether builder liable for costs of rectification BUILDING AND CONSTRUCTION – Design and Building Practitioners Act 2020 (NSW) – where construction work at development site caused partial collapse of neighbouring property – where settlement reached with neighbour whereby developer bought neighbouring property – where developer subsequently pursued a different development – whether individual who was project manager for builder owed a duty of care under the Design and Building Practitioners Act – whether duty breached – whether developer suffered loss and damage CORPORATIONS – Directors and officers – fiduciary duties – where director of building company was appointed director of another company registered by developer – where the second company completed the building works – whether director breached fiduciary duties to the first company – whether various defendants knowingly assisted in breach of fiduciary duties CORPORATIONS – members’ rights and remedies – oppression – where developer had 50% shareholding in building company – where building company resolved that there was an event of default under shareholders deed due to developer’s breach of restraint provisions – where developer’s shares were transferred to other 50% shareholder for consideration of $1.00 – whether claims of oppression established SET-OFF – where judgment debt against builder assigned to one of the defendants by a related company – where debt related to costs of NCAT proceedings in respect of a development undertaken by related company – where builder is in liquidation – whether defendant is entitled to set off judgment debt against liability for unpaid costs and margin in respect of a different development

Source

Original judgment source is linked above.

Catchwords

CONTRACTS – where agreements for construction of various developments for costs plus margin – whether oral agreement to vary level of margin – terms of agreement – identity of contracting parties – quantum of costs and margin due under contracts CONTRACTS – termination – whether contracts repudiated by builder or by developer – whether breach of restraint provisions by developer – whether contracts validly terminated by developer BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – where payment claims served by builder – where builder purported to suspend works – where developer completed works through related company – whether suspension of works was in accordance with provisions of Act – whether builder entitled to lost profits BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – Design and Building Practitioners Act 2020 (NSW) – where rectification order issued in respect of various defects – where developer incurred costs of rectifying defects – whether expert evidence established defects in works – whether builder liable for costs of rectification BUILDING AND CONSTRUCTION – Design and Building Practitioners Act 2020 (NSW) – where construction work at development site caused partial collapse of neighbouring property – where settlement reached with neighbour whereby developer bought neighbouring property – where developer subsequently pursued a different development – whether individual who was project manager for builder owed a duty of care under the Design and Building Practitioners Act – whether duty breached – whether developer suffered loss and damage CORPORATIONS – Directors and officers – fiduciary duties – where director of building company was appointed director of another company registered by developer – where the second company completed the building works – whether director breached fiduciary duties to the first company – whether various defendants knowingly assisted in breach of fiduciary duties CORPORATIONS – members’ rights and remedies – oppression – where developer had 50% shareholding in building company – where building company resolved that there was an event of default under shareholders deed due to developer’s breach of restraint provisions – where developer’s shares were transferred to other 50% shareholder for consideration of $1.00 – whether claims of oppression established SET-OFF – where judgment debt against builder assigned to one of the defendants by a related company – where debt related to costs of NCAT proceedings in respect of a development undertaken by related company – where builder is in liquidation – whether defendant is entitled to set off judgment debt against liability for unpaid costs and margin in respect of a different development

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd) v STM123 Pty Ltd [2026] NSWSC 882

Hearing dates: 25-29 May, 4-5 June 2026

Date of orders: 24 July 2026

Decision date: 24 July 2026

Jurisdiction: Equity - Commercial List

Before: Nixon J

Decision: 1. Discharge Order 5 of the orders made by Peden J on 22 April 2026.
2. Direct that the parties are to provide to the Associate to Nixon J, by 5:00pm on 7 August 2026, any agreed form of orders to give effect to the reasons for judgment.
3. Direct that, in the event the parties are unable to agree on a form of orders to give effect to the reasons for judgment (including orders as to costs), the parties are to exchange and provide to the Associate to Nixon J, by 5:00pm on 7 August 2026, the orders which each party proposes, submissions (limited to 5 pages) on those orders, and any evidence in respect of costs, indicating whether, and if so why, an oral hearing is requested to deal with the matters in dispute.

Catchwords: CONTRACTS – where agreements for construction of various developments for costs plus margin – whether oral agreement to vary level of margin – terms of agreement – identity of contracting parties – quantum of costs and margin due under contracts
CONTRACTS – termination – whether contracts repudiated by builder or by developer – whether breach of restraint provisions by developer – whether contracts validly terminated by developer
BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – where payment claims served by builder – where builder purported to suspend works – where developer completed works through related company – whether suspension of works was in accordance with provisions of Act – whether builder entitled to lost profits
BUILDING AND CONSTRUCTION – Home Building Act 1989 (NSW) – Design and Building Practitioners Act 2020 (NSW) – where rectification order issued in respect of various defects – where developer incurred costs of rectifying defects – whether expert evidence established defects in works – whether builder liable for costs of rectification
BUILDING AND CONSTRUCTION – Design and Building Practitioners Act 2020 (NSW) – where construction work at development site caused partial collapse of neighbouring property – where settlement reached with neighbour whereby developer bought neighbouring property – where developer subsequently pursued a different development – whether individual who was project manager for builder owed a duty of care under the Design and Building Practitioners Act – whether duty breached – whether developer suffered loss and damage CORPORATIONS – Directors and officers – fiduciary duties – where director of building company was appointed director of another company registered by developer – where the second company completed the building works – whether director breached fiduciary duties to the first company – whether various defendants knowingly assisted in breach of fiduciary duties CORPORATIONS – members’ rights and remedies – oppression – where developer had 50% shareholding in building company – where building company resolved that there was an event of default under shareholders deed due to developer’s breach of restraint provisions – where developer’s shares were transferred to other 50% shareholder for consideration of $1.00 – whether claims of oppression established SET-OFF – where judgment debt against builder assigned to one of the defendants by a related company – where debt related to costs of NCAT proceedings in respect of a development undertaken by related company – where builder is in liquidation – whether defendant is entitled to set off judgment debt against liability for unpaid costs and margin in respect of a different development

Parties

Applicant/Plaintiff:

Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd)

Respondent/Defendant:

STM123 Pty Ltd

Legislation Cited (16)

Building and Construction Industry Security of Payment Act 1999(NSW)

Home Building Act 1989(NSW)ss 4, 10, 18B, 18E

Design and Building Practitioners Act 2020(NSW)s 37

Cited:** Building and Construction Industry Security of Payment Act 1999(NSW)ss 8, 11, 13, 14, 15, 27

Civil Procedure Act 2005(NSW)s 56

Conveyancing Act 1919(NSW)ss 38, 38A

Corporations Act 2001(Cth)ss 9, 181, 182, 232, 233, 477, 553C

Evidence Act 1995(NSW)s 136, 140

Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020(NSW)

Work Health and Safety Act 2011(NSW)s 155

Construction Industry Security of Payment Act 1999

Building Practitioners Act 2020

Cases Cited: 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409
Albarran, In the matter of TC Build Group Pty Ltd (In Liq) [2025] FCA 855
Alucraft Pty Ltd (in liq) v Grocon Ltd (No 2) [1996] 2 VR 386
Blue Star Care Pty Ltd (in liq) v Rimcroft Pty Ltd as trustee for the Heymann Family Trust [2026] QSC 50
Boulus Constructions Pty Ltd v Warrumbungle Shire Council (No 2) [2022] NSWSC 1368
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833
Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55
Colyer Fehr Tallow Pty Ltd v KNZ Australia Pty Ltd [2011] NSWSC 457
Day & Dent Constructions Pty Ltd (in liq) v North Australian Properties Pty Ltd (prov liq apptd) (1982) 150 CLR 85; [1982] HCA 20
DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117
Doulaveras v Daher [2009] NSWCA 58
ET-China.com International Holdings Ltd v Cheung (2021) 388 ALR 128; [2021] NSWCA 24
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd (in liq) [2022] NSWSC 624
Gunasegaram v Blue Visions Management Pty Ltd [2018] NSWCA 179
Gye v McIntyre (1991) 171 CLR 609; [1991] HCA 60
In the matter of Mobius Distilling Pty Ltd (in liq) [2025] NSWSC 539
Jeffreys v Sheer [2025] NSWCA 31
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Jones as Liquidator of SBH Australia Pty Ltd (in liq) v Cummins [2018] NSWSC 606
Kapila v Monument Building Group Pty Ltd (No 2) [2025] NSWSC 1506
Kazzi v KR Properties Global Pty Ltd t/as AK Properties Group [2024] NSWCA 143
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; [1989] HCA 23
Lawrence v Ciantar [2020] NSWCA 89
Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234
Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufactures Pty Limited (2021) 289 FCR 556; [2021] FCAFC 228
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66
Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403
Oxford (NSW) Pty Ltd v KR Properties Global Pty Ltd [2023] NSWSC 343
Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31
Re Norvabron Pty Ltd (No 2) (1986) 11 ACLR 279
Richmond v Branson & Son [1914] 1 Ch 968
Sangha v Baxter [2009] NSWCA 78
Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47
Spence v Rigging Rentals WA Pty Ltd [2015] FCA 1158
Strategic Management Australia AFL Pty Ltd v Precision Sports & Entertainment Group Pty Ltd [2016] VSC 303
Turner v Richards [2025] NSWCA 83
Urban Traders Pty Ltd v Paul Michael Pty Ltd [2009] NSWSC 1072
Watson v Foxman (1995) 49 NSWLR 315
Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253

This proceeding concerns the formation, operation and breakdown of a business venture between entities associated with, on the one hand, Mr Thomas Cull and, on the other, Mr Vaughan Blank.
Mr Cull and Mr Blank met in around 2015. Mr Cull was the owner and controller of the First Plaintiff, which was at that time named TC Build Pty Ltd, and which operated a construction business. Mr Blank is the controller of the First Defendant, STM123 Pty Ltd, which operates a property development business.
Mr Blank’s usual business practice is to register a special purpose vehicle for each property development project that is undertaken, which has a name in the form “STM123 No. [X] Pty Limited”. Each of the Fifth to Twelfth Defendants is such a company and Mr Blank is, in each case, the sole director (referred to collectively as the STM123 entities).
Between 2016 and 2018, TC Build was engaged by three different STM123 entities to construct a number of property developments. It was a term of each of the relevant contracts that the relevant STM123 entity would pay TC Build the direct costs of the works plus a builder’s margin of 8% on those costs.
In the latter part of 2018, Mr Cull and Mr Blank negotiated an arrangement whereby STM123 purchased 50% of the shares in each of TC Build and a related company, BB Plant & Labour Pty Ltd, for $1.25m. In the course of negotiating this arrangement, Mr Cull provided Mr Blank with financial information relating to TC Build and BB Plant & Labour.
It was a term of the shareholders deed which was negotiated at around this time that any work which TC Build undertook at STM123’s request would be undertaken for the cost of such work “plus a maximum fee of 8% of the costs”.
Following entry into this agreement, TC Build undertook a number of construction projects for various STM123 entities (STM123 Projects), on the basis that it would be paid the direct costs of the project plus a margin of 8% on those costs.
By August 2020, Mr Blank had formed the view that the financial information provided to him prior to STM123’s entry into the share purchase agreement and shareholders deed was misleading. He raised these allegations with Mr Cull. The two of them had a discussion in which an agreement was reached that the builder’s margin on the various STM123 Projects would be reduced to 3%. There is a dispute regarding the terms of this agreement and, in particular, whether or not this reduction was to be in place for only a limited period of time, following which the margin would revert to 8% and TC Build would be entitled to recover the full amount of the margin that had been withheld in the intervening period.
On 27 October 2020, the Second Plaintiff, TC Build Group Pty Ltd (in liq) (TCBG), was incorporated. There is a dispute as to whether, in respect of a number of STM123 Projects, the relevant building contract was with TC Build or TCBG.
In the first half of 2022, the parties carried out a reconciliation in order to determine, first, the quantum of the direct costs on all STM123 Projects up to 28 February 2022, plus a 3% margin; secondly, the amount paid by STM123 entities up to 28 February 2022 in respect of costs and margin; and thirdly, the extent of any shortfall between those two figures. As a result of this reconciliation process, it was determined that an amount of $174,042.00 (incl GST) was owing by the STM123 entities (which was then paid).
In June 2022, TC Build and TCBG purported to issue payment claims in respect of various STM123 Projects, claiming an 8% margin on those Projects.
The STM123 entities did not pay those payment claims, and the Plaintiffs gave notice that they were ceasing work on the STM123 Projects. The parties accuse each other of repudiating the contracts in question.
The STM123 Projects which were on foot at the time of these events were subsequently completed by the Second Defendant, Ho****z Construction Pty Ltd.
Hoz Construction was incorporated on 2 May 2022. At the time of its incorporation, its shares were held equally by STM123 No. 4 Pty Ltd, which is a company controlled by Mr Blank, and Mr Ian Hossack, who is Mr Blank’s former brother-in-law.
From May to July 2022, Mr Hossack was both the sole director of Hoz Construction and a director of TCBG. (Mr Hossack was previously the Third Defendant to these proceedings. Shortly prior to the commencement of the hearing, the Plaintiffs resolved their claims against Mr Hossack, and a notice of discontinuance was subsequently filed with the consent of all active parties.)
TC Build asserted that, by reason of these matters, there was a breach of the restraints imposed by the shareholders deed, and that this was an event of default which meant that the 50% shareholding held by STM123 in TC Build could be transferred to the other 50% shareholder, Moitly Boss Pty Ltd, for $1. This transfer was effected in July 2022 under a power of attorney and resulted in Moitly Boss becoming sole shareholder of TC Build. Moitly Boss is an entity controlled by Mr Cull.
Each of TC Build and TCBG is now in liquidation. In addition, a receiver and manager has been appointed to TC Build (Receiver).
These proceedings were commenced by TC Build on 4 August 2022. At that time, TC Build sought interlocutory relief to restrain Hoz Construction from completing the STM123 Projects.
TCBG was joined as Second Plaintiff on 22 April 2026, pursuant to an order made by Peden J on that date. It was a condition of that order that the necessary steps be undertaken for the Receiver of TC Build to have authority to conduct these proceedings on TCBG’s behalf prior to the commencement of the hearing on 25 May 2026.
A Cross-Claim was brought by Mr Blank and some of the STM123 entities against TC Build, TCBG, Mr Cull and Moitly Boss. Various claims were advanced by the cross-claimants, including for alleged defective works in respect of a number of STM123 Projects.
The issues which arise in these proceedings are many and varied. As will be outlined further below, a number of those issues fell away in the course of the hearing. By way of broad overview, the principal issues which are addressed below are as follows:
first, whether there has been compliance with the condition imposed on the joinder of TCBG;
secondly, whether STM123 invested in TC Build as a result of misleading representations about its accounts and financial position;
thirdly, what were the terms of the parties’ agreement regarding the margin payable on STM123 Projects (before and after August 2020);
fourthly, whether any amount is payable in respect of the costs and margin of the STM123 Projects up until June 2022 to either TC Build or TCBG;
fifthly, whether, by reason of Hoz Construction taking over and completing the STM123 Projects which were on foot in July 2022:

sixthly, whether there has been oppressive conduct in respect of the transfer of STM123’s shareholding in TC Build to Moitly Boss and, if so, whether any relief should be ordered (in circumstances where TC Build is now in liquidation);
seventhly, in the event that any of the STM123 entities is found to have any liability to TC Build or TCBG in respect of a particular STM123 Project, whether such STM123 entity is entitled to set off against any such liability the costs of rectifying defects on the relevant STM123 Project;
eighthly, whether two of the STM123 entities are entitled to set off, against any amounts which they are found to owe to TC Build, judgment debts which have been assigned to them by STM123 No. 8 Pty Ltd (which is not a party to these proceedings); and
finally, whether Mr Cull, as the person responsible for supervising the works on a project being undertaken for Blank Super Pty Ltd at 21 Curlewis Street, Bondi, NSW (Curlewis St Project), owed a duty to Blank Super pursuant to s 37 of the Design and Building Practitioners Act 2020 (NSW) and, if so, whether he breached this duty and whether Blank Super suffered loss and damage as a result of any such breach.
Because the resolution of a number of these issues depends on distinct factual matters, it is not feasible or useful to provide any detailed overview of the factual background before addressing these issues. Instead, I have set out below, for each issue, the factual matters relevant to that particular issue.
Although the lay and expert evidence only occupied several days of hearing, this matter has generated a vast amount of paper. There were around 25 lever arch folders comprising the Court Book and exhibits tendered by the parties, an even more extensive electronic Court Book, and several hundred pages of submissions. A number of the issues arose only in the event that other issues were decided in a particular way.
In those circumstances, I have not attempted to resolve every possible combination of legal and factual issues that was advanced by the parties. Instead, I have focussed on resolving those matters necessary to determine the real issues in dispute between the parties and the substance of their claims against each other. In particular, where I have determined that, as a result of my findings on one issue, another issue does not arise, I have generally not proceeded to explain, in any detail, how I would have reasoned on that other issue if it had arisen for determination.

The Defendants submitted, and the Plaintiffs did not dispute, that these amended tax returns addressed this issue by correctly allocating the relevant costs to the Bellevue Rd Project.
Mr Blank gave evidence, in cross-examination, that he found out about this error when he received an email from Mr Cull, who said he had undertaken a forensic analysis regarding this matter. Mr Blank stated that he did not know how the error had come about, and denied that he had instructed anyone to arrange for invoices issued in relation to the works at O’Brien St to be reissued in relation to the Bellevue Rd Project, or that he had done so in order for STM123 No. 17 to obtain a tax deduction to which it was not otherwise entitled.
The Plaintiffs tendered a number of emails from TC Build to various subcontractors, which contained requests for invoices which had been issued in respect of O’Brien St to be reissued in respect of the Bellevue Rd Project. For example, on 9 June 2020, Mr Neil Whittington-Davis, who was a project manager for TC Build on several STM123 Projects, sent emails to No Worries Bricklaying Pty Ltd, Payano Constructions Pty Ltd, Precise Painting Group Pty Ltd and Skyscraper Interiors Pty Ltd. Each of these emails attached an invoice which the respective subcontractors had previously issued in respect of O’Brien St. Each email contained the following instruction: “Please resubmit this invoice with the address: [Bellevue Rd Project]”.
In response to a request made by Mr Whittington-Davis on 8 September 2020 to “address the one for 1OB [O’Brien St] to 46 Bellevue Hill road”, one subcontractor responded “can you please let me know what [yo]u mean” by this request. There was no answer to this request in evidence, and Mr Whittington-Davis was not asked about this communication in cross-examination.
Mr Whittington-Davis was taken, in cross-examination, to some of the relevant emails and stated that he could not recall the reason why a request was made for an invoice to be reissued. He denied that this was done because of any direction from Mr Blank.
Each of the emails referred to in paragraph [41] above was copied to Ms Sheryn Taylor (the finance and accounts manager for TC Build). In addition, Ms Taylor was copied on an email which Mr Kamatchi Kavi (the Finance Manager of TC Build) wrote to Mr Whittington-Davis on 7 July 2020, asking “Let us know to which job you want to push those 17OB [O’Brien St] invoices to?”
Ms Taylor was called as a witness by the Plaintiffs. Although Ms Taylor was copied on the relevant correspondence, the Plaintiffs elected not to lead any evidence from her regarding her knowledge of the practice of reallocating invoices between STM123 Projects, or the reasons for the practice, or of any involvement of Mr Blank in the practice.
The Plaintiffs tendered numerous documents evidencing this practice, none of which was sent by, or copied to, Mr Blank. The only contemporaneous email which appears to have been sent to Mr Blank regarding the reissue of invoices was an email sent by Ms Taylor on 15 May 2020. She was responding to a query raised by Mr Blank, who had been informed by a subcontractor that TC Build had overpaid him for his work. Ms Taylor stated that she had contacted the subcontractor and determined that a payment had been “incorrectly allocated”, explaining that:

This email does not provide any evidence that Mr Blank gave a direction for invoices which had been issued in respect of works at O’Brien St to be reissued in respect of the Bellevue Rd Project, or was aware that any direction had been given for such a reallocation to occur. Instead, Mr Blank was seeking an explanation from Ms Taylor for what had happened, and was told that it was a case of a mistake on the part of the subcontractor, which TC Build had been “unaware” about, and which would be corrected, with the invoice being “reallocated” (correctly) to the works at 17 O’Brien St. Mr Blank appeared to have accepted the explanation that there was a mistake which had not been picked up by TC Build, but was unimpressed that it had occurred, as he changed the email subject line to “dumb” when he forwarded it to Mr Cull.
The Plaintiffs identified only one document relating to the reallocation of invoices from the works at O’Brien St to the Bellevue Rd Project which referred to Mr Blank. On 15 May 2020, an invoice was sent to Mr Whittington-Davis from the email address “invoices@tcbuild.com.au”. This email referred to an attached invoice from a painting business and stated as follows: “Pls approve 17 Obrien – Vaughan spoke to them to reissue invoice”. There was no evidence as to who sent the email from this “invoices” email address, or whether the Plaintiffs had made any efforts to obtain evidence from that person regarding the reference to Mr Blank in this email. Mr Blank was not taken to this email in cross-examination and was not given any opportunity to address the suggestion that he had given this particular instruction or, if he had done so, to explain the reasons for this specific reallocation.
In March 2023, Mr Cull wrote to one of the subcontractors whose invoices were reissued. Mr Cull stated that he “understand[s] you were instructed by somebody from TC”, and asked whether it was Mr Blank or another person. The subcontractor responded that he had “looked for mail regarding [this] directive”, with “no luck”. He further stated that the instruction “[m]ust have been a verbal” one, but he had no recollection of any such instruction.
Having regard to the above matters, I am not satisfied that there is a sufficient basis to conclude that Mr Blank gave the direction for invoices to be reissued, changing the worksite from O’Brien St to the Bellevue Rd Project, in circumstances where he knew that the relevant work had not been done on the Bellevue Rd Project, for the dishonest purpose of artificially inflating the expenses on the Bellevue Rd Project and thereby minimising the tax payable by STM123 No. 17. It also follows that I make no finding that Mr Blank’s evidence in relation to this issue was dishonest.

Secondly, the Plaintiffs put to Mr Blank that he gave directions to TC Build staff for the margin to be reduced on certain STM123 Projects, and increased on other STM123 Projects, “so that [he] could show the tax department … a higher cost on the projects – or at least some of the projects – which [he] intended to sell”.
Mr Blank accepted the first part of the proposition – namely, that he gave directions for the margin on certain STM123 Projects to be removed, and for the margin on other STM123 Projects to be increased. This is the practice referred to as the margin “shuffle”, that is described in paragraphs [143]-[145] below.
However, he rejected the suggestion that this was done for any tax minimisation purpose. Mr Blank gave evidence – which was not challenged – that all of the STM123 Projects from a tax point of view had the same margin.
In addition, Mr Blank stated that the margin shuffle was “[i]n hindsight, pretty silly” and was undertaken because Mr Blank had been of the view that he could recover some of his $2.1m investment in TC Build “by pushing it to a development” (that is, by reducing the margin on a development, and recovering his investment by means of the margin foregone by TC Build on that development). Although this involved increasing the margin on some other STM123 Projects above 8%, Mr Blank was of the view that “8% was a preferential rate” and so an 8% margin was understating the costs of the Project. However, he discussed this with his accountant and concluded that this would be “far too aggressive” and so “regularised all our margin across all our projects”.
I accept the Plaintiffs’ submission that Mr Blank’s explanation for this practice was confused and was difficult to understand. However, the key point for present purposes is that the evidence before the Court does not support the Plaintiffs’ submission that the increase in margin on certain STM123 Projects, which Mr Blank intended to sell, was implemented in order to report to the tax authorities a higher cost on those Projects. Senior Counsel for the Plaintiffs acknowledged in closing oral address that there is “no evidence” that “this actually flowed through to any tax return”. Nor was there any evidence that the margin “shuffle” between STM123 and TC Build had any consequence for any third party. Whatever the reasons for the “shuffle”, it appears to have been an exercise that was internal to the business relationship between STM123 and TC Build, and appears to have been conducted on the agreed basis that, however the margin was allocated to individual STM123 Projects, the builder’s margin paid on the direct costs incurred across all of the STM123 Projects would be 8% (later reduced to 3%, subject to the dispute addressed below regarding the terms of the agreement regarding this reduction).
Given those matters, I do not make any findings of dishonest conduct in respect of the margin shuffle.

Thirdly, the Plaintiffs claimed that there was an inconsistency between:
Mr Blank’s evidence in these proceedings that TCBG (rather than TC Build) was the builder in respect of several STM123 Projects (which are described below as the Wentworth St Project, the Lamrock Ave Project and the Jaques Ave Project); and
Mr Blank’s statements to the NSW Government, the relevant local councils and the principal certifying authority that TC Build was the builder for those Projects.
The Plaintiffs submitted that if TC Build was in fact the builder for those Projects (as Mr Blank told the relevant authorities), then Mr Blank’s evidence to the Court that TCBG was the builder was false; and if TCBG was in fact the builder, then Mr Blank’s statements to the relevant authorities that TC Build was the builder were false (and Mr Blank’s evidence that he did not set out to mislead those authorities was also false).
I deal with the issue of the identity of the contracting party for these Projects at paragraphs [283]-[293] below. For present purposes, it is sufficient to note that I do not accept the submission that, whatever finding is made on this issue, Mr Blank’s evidence was dishonest.
TCBG did not have a building licence. Mr Blank explained that it was his understanding that, for STM123 Projects being undertaken by TCBG, TC Build “provided its licence to” TCBG; and that when dealing with the relevant authorities, he needed to provide the details of TC Build, rather than TCBG, as TC Build was the entity which held the building licence. It was not suggested to Mr Blank that he did not honestly hold this view. As the Defendants submitted, one thing which was not explored with Mr Blank in cross-examination was his understanding of how the licensing system worked, particularly in circumstances where he (unlike Mr Cull) is not a builder who would be expected to understand that system. Mr Blank’s understanding that he was required to enter TC Build’s details provides an explanation for the apparent inconsistency between Mr Blank’s evidence regarding the builder’s identity and the statements made by Mr Blank to a number of public authorities. I am satisfied that Mr Blank’s evidence on this issue represented his genuinely held views. (The fact that his evidence as to the identity of the builder was honestly given does not, of course, mean that his evidence was correct. I have addressed below the issue of the identity of the builder, by reference primarily to the contemporaneous documentary evidence.)

Senior Counsel for the Plaintiffs submitted that “[Mr Blank] would know why $53 million has been paid into the Hoz [Construction] bank account when the value of the work is $24 million” and that the evidence Mr Blank gave, which is quoted above, was “just false, dishonest evidence”.
I do not accept this submission. As the Defendants submitted, there is an element of unfairness involved in presenting Mr Blank, in the witness box, with various bank statements from around four years ago, which have been produced on subpoena, and asking if he can provide an explanation for the total amount of the payments recorded in those statements.
The bank statements contained, as one would expect, narratives accompanying individual payments. In closing submissions, the Defendants provided an analysis of those narratives which indicated that there were amounts totalling around $22.5m paid to Hoz Construction which were described in the bank statements as a “loan” to that entity, and corresponding amounts totalling around $22.7m paid out by Hoz Construction which were described as loan repayments. The Plaintiffs accepted, in closing address, that these payments should be disregarded when determining the amount paid to Hoz Construction for completion of the STM123 Projects (and agreed that the amount paid to Hoz Construction was in the order of the amount stated by Mr Blank).
In those circumstances, I am satisfied that Mr Blank honestly answered the questions asked of him in relation to this issue. In particular, I am satisfied that Mr Blank was unable, in cross-examination, to explain the reason why payments totalling more than $50m had been made to Hoz Construction because, as he stated, he had not undertaken a “reconciliation” of those payments and had not reviewed the individual entries in the bank accounts. If he had done so, it would have been readily apparent to him – as later became common ground – that the total payments recorded in the bank statements included amounts advanced to Hoz Construction, and later repaid by Hoz Construction, as well as payments for the works undertaken by Hoz Construction in respect of the projects at Wentworth St, Lamrock Ave and Jaques Ave.

The Defendants contended, in their closing submissions, that the condition for the joinder of TCBG set out in Order 5 above had not been fulfilled and that the claims “purportedly made on [TCBG’s] behalf should therefore be dismissed”.
I reject this submission, for the following reasons.
First, TCBG has directly retained the Plaintiffs’ solicitors, Chedid Storey Legal, to conduct these proceedings on its behalf, by a costs agreement dated 20 May 2026, which was executed by Mr Richard Albarran as the liquidator of TCBG and by Mr Domenic Calabretta as the Receiver of TC Build (Joint Retainer). Clause 2 of the Joint Retainer, headed “Nature of work”, provides that the work which Chedid Storey Legal have been “instructed to do is to prepare for and represent you [TCBG and TC Build] in Supreme Court Proceedings 2022/229562 (Proceedings) [being the proceedings to which TCBG was joined by the orders made on 22 April 2026], and all matters incidental to the Proceedings, to be heard on 25 May 2026 for two weeks”.
Given that TCBG directly retained Chedid Storey Legal to act for it in these proceedings, prior to the commencement of the hearing, it was not “necessary” (within the meaning of Order 5 of the Orders made on 22 April 2026) for any “steps” to be “taken” prior to the hearing for the Receiver “to have authority” to “conduct these proceedings on TCBG’s behalf”. Accordingly, the joinder of TCBG under Order 4 of those orders, which was subject to taking such steps as were necessary to comply with the condition subsequent in Order 5, remains effective.
Secondly, by raising this issue, the Defendants sought, in effect, to mount a challenge to the Joint Retainer (despite repeatedly asserting that they were not doing so). In particular, the Defendants submitted that:
the entry by TCBG into the Joint Retainer was in breach of the terms of the Deed of Agreement and Indemnity between TCBG and TC Build dated 12 February 2024, which provided that TCBG “irrevocably appoints [TC Build] as TCBG’s sole and exclusive agent to bring legal proceedings in the name of TCBG”;
by cl 6 of the Joint Retainer, the liquidator of TCBG purported to confer authority on the Receiver of TC Build to provide instructions to Chedid Storey Legal in relation to these proceedings, but such power could not be conferred on him in his capacity as receiver and manager of TC Build; and
although the Joint Retainer was expressed to be for a fixed term of ten weeks, it appeared that Chedid Storey Legal had been acting for TCBG from an earlier point in time, and therefore the period of the Joint Retainer might, in total, extend beyond three months so as to require approval under s 477(2B) of the Corporations Act 2001 (Cth) (which has not been obtained).
In addition, the Defendants submitted that the Deed of Appointment dated 26 February 2026, by which the Receiver of TC Build was appointed, was not properly attested as a deed under ss 38 and 38A of the Conveyancing Act 1919 (NSW). (That would be a matter going to the question whether the Receiver of TC Build was validly appointed, and therefore whether he had authority to bring proceedings in the name of TC Build and to enter into the Joint Retainer on behalf of TC Build. The Defendants confirmed, in closing address, that they did not advance any such contention. This issue can therefore be put to one side.)
Even if the matters outlined above were established, it would not necessarily follow either that the Joint Retainer was a nullity or that TCBG was not properly joined to these proceedings.
As regards the alleged breach of the provision in the Deed of Agreement and Indemnity appointing TC Build as TCBG’s “sole and exclusive agent” to bring any proceedings in TCBG’s name, any such breach would not entail the consequence that the liquidator of TCBG lacked power to enter into the Joint Retainer. The Defendants relied on the fact that Jackman J had approved the liquidator’s entry into the Deed of Agreement and Indemnity pursuant to s 477(2B) of the Corporations Act: see Albarran, In the matter of TC Build Group Pty Ltd (In Liq*)* [2025] FCA 855. However, an order under s 477(2B) approving entry into a particular agreement does not amount to an order by the Court requiring compliance with the terms of the agreement. If the liquidator of TCBG is in breach of the Deed of Agreement and Indemnity, that is a matter for the counterparty to the agreement (TC Build), which has not raised any such issue.
As regards the allegation that authority to give instructions on TCBG’s behalf could be validly conferred on Mr Calabretta in his capacity as the Receiver of TC Build, it would be open for the liquidator of TCBG to confirm the instructions which have been given by Mr Calabretta to the Plaintiffs’ solicitors in relation to these proceedings and to ratify any actions taken by the Plaintiffs’ solicitors in these proceedings in accordance with such instructions. In circumstances where I have determined in these proceedings, for reasons set out below, that substantial sums are owed to TCBG by various STM123 entities, it would plainly be in the interests of the creditors of TCBG for the liquidator to do so.
As regards the alleged failure by the liquidator of TCBG to obtain consent under s 477(2B) of the Corporations Act in respect of the Joint Retainer, there is an argument (which need not be determined) that any such failure was an irregularity only and did not cause the Joint Retainer to become a nullity: Blue Star Care Pty Ltd (in liq*) v* Rimcroft Pty Ltd as trustee for the Heymann Family Trust [2026] QSC 50 at [61]. Even if that view is not correct, the consequence would be that the Joint Retainer might be invalid, which might mean that the liquidator of TCBG is personally liable to the contractual counterparty (Chedid Storey Legal) and might lose his right of indemnity from TCBG’s assets, but this would not render the proceedings invalid: ibid at [62].
Thirdly, even if the matters raised by the Defendants were matters which might entail a conclusion that the Joint Retainer was a nullity or that the Plaintiffs’ solicitors did not have authority to act for TCBG in these proceedings, those are matters which should have been raised by way of an application made at the commencement of this hearing, rather than in closing submissions.
A challenge to a retainer is a matter which needs to be raised by way of a substantive application to stay the proceedings on the ground of want of authority, rather than by way of a defence to a plaintiff’s claim: Doulaveras v Daher [2009] NSWCA 58 at [80], [140]-[141] per Campbell JA (with Giles and Macfarlan JJA agreeing), referring to Richmond v Branson & Son [1914] 1 Ch 968 at 974 (Warrington J). That is because a defendant who alleges that a plaintiff’s action was initiated without authority – such that the plaintiff’s lawyers have no proper retainer – “raises a matter that goes to the question whether the action should be allowed to proceed to trial, rather than a matter of substantive defence”: 2 Elizabeth Bay Road Pty Ltd v The Owners – Strata Plan No 73943 (2014) 88 NSWLR 488; [2014] NSWCA 409 at [61]-[62] per Barrett JA.
In Doulaveras at [138]-[139], Campbell JA made the following observations:

It is clear from the transcript of the argument before Peden J on 22 April 2026 that the purpose of Orders 4 and 5 (quoted at paragraph [81] above) was to ensure that any issue regarding the joinder of TCBG was agitated prior to the commencement of the hearing. In making the orders, her Honour commented that: “at this point when you’ve got a hearing date fast approaching you need to progress the matter”.
There was no reference to any issue regarding compliance with Peden J’s orders (or any other issue going to the joinder of TCBG) in the Defendants’ lengthy opening written submissions, which otherwise outlined in detail the various issues that arose in the proceedings. Nor was there any reference to this issue in the Defendants’ opening oral address, which occupied a large part of the first day of the hearing.
On the morning of the second day of the hearing, shortly before the first witness (Mr Cull) was called by the Plaintiffs, Senior Counsel for the Defendants referred to Peden J’s orders and the Joint Retainer , stating that her clients were “still considering the issues raised” by the Joint Retainer, and had “not yet come to a final view”, but “ha[d] at least two concerns”, including that the Joint Retainer “was contrary to and in breach of the clear terms of the exclusive agency agreement” in the Deed of Agreement and Indemnity and that the Retainer “seeks to, for lack of a better word, bypass … the requirements of s 477(2B)”. When these matters were raised, I responded that the Defendants “don’t have any application at the moment”, and that I would only consider any such issue “if there’s an application” challenging the Joint Retainer.
No such application was brought at that time. Instead, the hearing proceeded with lay and expert evidence being called. The challenge to the Joint Retainer was advanced only in closing submissions (and was not advanced by way of any written or oral application).
In exercising the power to stay or dismiss proceedings, the Court must have regard to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings: Civil Procedure Act 2005 (NSW), s 56. If the claims by TCBG were stayed or dismissed as a result of a successful challenge to the Joint Retainer and hence to the joinder of TCBG, this would not create any estoppel against TCBG, because it would follow that TCBG was not a party to the litigation: Doulaveras at [152]. This would open up the prospect that, although TCBG’s claims have been fully litigated in a two-week hearing, those claims could then be relitigated in a further proceeding. That provides a powerful discretionary reason to refuse to entertain a challenge to the Joint Retainer which has been advanced in closing submissions, without any application having been made. It also provides a powerful discretionary reason, in circumstances where a challenge has been made in closing submissions to the Plaintiffs’ compliance with Order 5 of the orders made by Peden J (and therefore to the joinder of TCBG), to exercise the Court’s jurisdiction to discharge, to the extent necessary, that interlocutory order.
Having regard to those matters, I have determined that the appropriate course, consistently with s 56 of the Civil Procedure Act, is to discharge (to the extent necessary) Order 5 of the orders made by Peden J on 22 April 2026, so as to remove any doubt about the joinder of TCBG to these proceedings.

The October 2018 Cashflow Forecast set out, for each month from October 2018 to December 2019 inclusive, direct revenue, on a project-by-project basis, and indirect expenses, broken down by category of expense. The total indirect expenses (also described as “Overheads Expenses”) were shown in the document to be 3.79% of the total direct revenue.
The total direct revenue of $35.2m included an amount of $5.8m in respect of a project at 52-54 Eastern Valley Way, Northbridge (the Northbridge Project), which was projected to be received between October 2018 and March 2019.
The financial statements in respect of TC Build and BB Plant & Labour which were annexed to Mr Cull’s email of 16 October 2018 were Special Purpose Financial Reports. Each report included a Director’s declaration signed by Mr Cull, stating that the financial statements and notes “presents fairly the company’s financial position as at [year end] and its performance for the year ended on that date in accordance with the accounting policies described in Note 1 to the financial statements”. Each report also included a declaration signed by the Director of Shorrock Partners Pty Ltd, Chartered Accountants, stating that “we have compiled the accompanying special purpose financial statements in accordance with the significant accounting policies as described in Note 1 to the financial statements and APES 315: Compilation of Financial Information”.
The financial statements for BB Plant & Labour reported a small after-tax profit for each of FY2017 ($72,428) and FY2018 ($43,298).
The financial statements for TC Building reported:
for FY2017, total revenue of $13.423m and an after-tax profit of $1.373m; and
for FY2018, total revenue of $21.802m and an after-tax profit of $0.946m.
On 26 October 2018, Mr Cull sent a further email to Mr Blank relating to a proposed investment in TC Build. At this stage, Mr Cull was offering Mr Blank a 40% share in his business “via upfront outlay”, on the basis that “as a major shareholder, any works undertaken [for STM123] by the business be at cost”. Mr Cull stated that he expected this offer would be “appealing” to Mr Blank “as it gives you a guaranteed return, so much so that any margin you would otherwise be paying is attaining you a share in the business”.
In his email of 26 October 2018, under the heading “Why do I want this”, Mr Cull made a number of statements, including the following:

Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the Court, which means that the Court must feel an actual persuasion of its occurrence or its existence: John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94]. In that case, Hammerschlag J (as his Honour then was) made the following observations:
such reasonable satisfaction “is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved”;
“[t]he seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court”;
reasonable satisfaction “should not be produced by inexact proofs, indefinite testimony, or indirect inferences”; and
“[i]n the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof”.
These observations were recently quoted with approval by Payne JA (with whom Leeming and Adamson JJA agreed) in Turner v Richards [2025] NSWCA 83 at [59].
Where the existence and terms of an oral contract are in issue, it is permissible to have regard to the surrounding circumstances, including the history of the relationship between the parties and their conduct prior to and at the time the contract was entered: Colyer Fehr Tallow Pty Ltd v KNZ Australia Pty Ltd [2011] NSWSC 457 at [47]-[48] per Ball J (as his Honour then was), referring to Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234 at [90] per Campbell JA (with whom Allsop P and Basten JA agreed) and Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833 at [369] per Allsop J (with whom Drummond and Mansfield JJ agreed).
Further, while post-contractual conduct is not admissible on the question of what a contract means, it is admissible on the question of whether a contract was formed: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 at [25]-[26] per Heydon JA. In the case of a contract not exclusively in writing, post-contractual conduct may be relevant in determining what its terms actually were: Lawrence v Ciantar [2020] NSWCA 89 at [114] per Bathurst CJ (with whom Meagher and Gleeson JJA agreed).

The Plaintiffs drew attention, in their submissions, to the fact that Mr Blank did not respond to Mr Cull’s evidence of the 18 August 2020 conversation until his sixth affidavit of 28 June 2024, and did not claim to have told Mr Cull that “the 5% foregone will be used to clawback the $2.1 million [invested by STM123]” until his ninth affidavit of 22 October 2025.
However, these criticisms of Mr Blank’s evidence must be understood in the following context. First, a number of his earlier affidavits concerned particular interlocutory issues (such as security for costs), and one was filed in a different proceeding (relating to certain adjudication determinations). Secondly, the Plaintiffs’ original pleading did not include any claim for margin, with this claim being added by the Further Amended List Statement. Thirdly, as outlined above, it was only in later versions of his account that Mr Cull deposed that Mr Blank had expressly agreed to pay TC Build the “5% shortfall” if it survived for a year. Fourthly, each of Mr Cull’s versions of the conversation included express statements by Mr Blank that he wanted to “get … back” his “money” (that is, to claw back STM123’s investment in the TC Group).
Each of Mr Cull and Mr Blank maintained their respective accounts of the 18 August 2020 conversation under sustained cross-examination. I am satisfied that each believes in the veracity and accuracy of his own account. However, it is to be expected, in the context of a bitter dispute stretching back over several years, that each party has become entrenched in his views, with his conviction in his own version of events only becoming firmer (which may explain the changes to evidence over time).
These shifts in the affidavit evidence of each witness serve to underline the importance of treating with caution accounts of conversations given by persons who have been involved in long-running litigation, and to assess such accounts by reference to the objective circumstances, the contemporaneous documents, the evidence as a whole, and the apparent logic of events (see paragraphs [28]-[31] above).

The surrounding circumstances at the time of the 18 August 2020 conversation support Mr Blank’s account that the substance of the agreement reached was that the margin would be reduced to 3% going forward, in order to enable STM123 to recover the amount of its investment in the TC Group, which Mr Blank valued at $2.1m.
It is apparent from the terms of Mr Blank’s email to Mr Cull dated 16 August 2020 that he came to his meeting with Mr Cull on 18 August 2020 in the following state of mind:
he was “honestly shocked at what [he] discovered” when he reviewed TC Build’s financial information;
he had injected “$1,815m into TC plus a crane so round numbers $2m”;
he did so because he was “under the impression that [he] was buying into a company that made $946k [in profit for FY18] and had a $40m pipeline of good projects at good margin”, but “the $946[k] was false” and “the $40m pipeline was disastrous”, being either “major losses or ridiculously low margin jobs”;
as a result, STM123’s “investment has turned out to be shit”;
he felt that he had been “completely mislead [sic]” by the financial information provided to him prior to STM123’s investment in TC Build;
he was willing to acknowledge his own “lack of judgment” in investing “in a team that didn’t know what they were doing”, but “[b]eing mislead [sic] is a completely different ball game for me”;
if he had “known the true figures”, STM123’s “investment would have been completely different if at all”; and
in addition, he had “paid 8% plus costs for [STM123’s] projects so far”, on the basis that this “was supposed to be a preferential rate”, but had discovered, having regard to the “ridiculously low margin jobs” that TC Build had undertaken for third parties, that he “would have been far better off negotiating [STM123’s] contracts at arms length”.
On Mr Cull’s own account, Mr Blank reiterated a number of these points when they met on 18 August 2020 (see paragraph [164] above).
Given Mr Blank’s state of mind, it made good sense for him to demand that the margin on STM123 Projects, which he believed to be well above what TC Build was charging to third parties, be significantly reduced. Further, it made good sense for him to seek, by this reduction, to recover the full amount of STM123’s investment in TC Build, since he was of the view that he had invested this sum under false pretences and that his shares in the company were in fact worthless.
Further, given the views expressed by Mr Blank, it made good sense for Mr Cull to accept a proposal that the margin be reduced from 8% to 3% on STM123 Projects as a means of STM123 recovering the value of its investment in TC Build. The alternative was that STM123 might sue TC Build and Mr Cull for misleading conduct. Any such litigation between the equal shareholders of TC Build would likely result in its business coming to an end. Further, TC Build did not, according to its financial statements, have the means to meet any judgment in favour of STM123 for the amount of its investment, which is no doubt why Mr Blank threatened to sue Mr Cull personally. By agreeing to Mr Blank’s proposal, TC Build and Mr Cull were able to compromise this misleading conduct claim, and were able to continue to operate TC Build’s construction business, as well as to obtain further projects from STM123 (with, for example, the agreement for the Curlewis St Project being entered shortly after this compromise was reached (see paragraph [271] below)). While the margin was reduced on the STM123 Projects, the agreement was (on Mr Cull’s own account) that STM123 would pay a margin of 3% that was sufficient to cover “offsite overheads”. In addition, there was the prospect that, after the value of STM123’s investment was recovered by the reduction in margin, the margin would be increased and there would be a steady stream of future work from STM123.
Those are matters which support Mr Blank’s account.
In contrast, there is no apparent reason why, in circumstances where Mr Blank felt that he had been “completely misled” into paying around $2.1m for a “shit” investment, and had been paying a margin well above what was being charged to third parties, he would have proposed, or agreed to, an arrangement which involved the full amount of the 8% margin remaining payable (with payment of 3% being payable as costs were invoiced and the remaining 5% being deferred for 12 months contingent on TC Build remaining solvent), and which would have resulted in Mr Blank giving up his claim for misleading conduct without recovering a cent of STM123’s $2.1m investment in what he believed was a worthless company. The consequence of Mr Cull’s version of the 18 August 2020 agreement would have been that the STM123 entities achieved a temporary benefit in terms of cashflow over the coming 12 months (in circumstances where there is no evidence that the STM123 entities had any difficulty with cashflow at this time), but as a result would have been obliged to pay a very substantial amount as a lump sum in around August 2021 (which would have had a significant impact on their financial position in the following financial year) and would have been left in the position of having sunk $2.1m into a company that was “shit”.
Those are matters which are at odds with Mr Cull’s account.

Mr Harris stated, immediately after the passage quoted at paragraph [203] above, that the “accounting department is tracking this transactional activity” (that is, tracking the amount of the margin foregone by reason of the “decrease in project revenue from STM (various entities) from 8% to 3%”).
This is likely a reference to the spreadsheets which Ms Taylor exhibited to her affidavit, and which she described as the “Cost Report Margin Comparison Sheets”. In cross-examination, Ms Taylor gave evidence that these documents were probably created by Mr Harris.
The spreadsheet for January 2021 – which was likely prepared shortly after Mr Harris’ memorandum of 27 January 2021 – shows the amount of “Margin Foregone” as at January 2021, and a forecast of “Margin Foregone” for each month from February 2021 onwards. The spreadsheet also records the “Normal Margin” as 8%, the “Margin On-Cost to Charge” as 3%, and the “Margin Foregone” as 5%.
The use of the term “Margin Foregone” to describe the 5% reduction in margin is inconsistent with any expectation on the part of TC Build that the amount “foregone” by TC Build would be recovered from STM123 at some later point in time.
Each margin tracking spreadsheet from January 2021 onwards contains a row that calculates, on a monthly basis, the cumulative total of the “Margin Foregone” to date. In that row, a single figure for cumulative “Margin Foregone” is highlighted in red. The point in time at which this red figure appears differs as between spreadsheets. However, in each case, the figure highlighted in red is a figure close to the amount of $2.1m.
Given those matters, it is likely that this spreadsheet, which was created by Mr Harris, was – consistently with the terms of Mr Harris’ 27 January 2021 memorandum – tracking the total amount of “Margin Foregone” to identify the point in time at which it was expected that the total of “Margin Foregone” would equal the “monies to be returned” (which Mr Blank had claimed to be $2.1m).
This conclusion is also supported by the fact that, when Mr Harris sent this document to Mr Blank, the document was headed “Vaughans Margin Calc[ulation]”.
Significantly, there is nothing in any of the margin tracking spreadsheets to suggest either that the margin was being reduced for a fixed period of twelve months, or that the margin would be repaid at the end of this twelve-month period.
The Plaintiffs placed reliance in their submissions on the fact that Mr Harris’ memorandum of 27 January 2021 stated, in the context of providing commentary regarding the budget outlook for FY2021 to FY2023, that “Gross markup from STM projects has been reduced to 3%”, but that “markup from STM projects has been increased to 8% for each of FY2022 and FY2022 [sic – presumably a reference to each of FY2022 and FY2023]”.
This statement is consistent with the fact that the “Vaughans Margin Calc” spreadsheet for January 2021 projected that STM123 would recover, as a result of the margin foregone by TC Build, an amount of around $2.1m by September 2021. Mr Harris’ forecast assumes that once this amount is recovered, the margin will revert to 8%.
Those are matters which support Mr Blank’s account of the terms of the 18 August 2020 agreement.
Significantly, there is nothing in the budgeted financial information set out in Mr Harris’ January 2021 memorandum or the “Vaughans Margin Calc” spreadsheet to indicate that, as at around August 2021 (that is, some twelve months after the conversation in August 2020), STM123 would pay to TC Build the full amount of the difference between an 8% margin and a 3% margin on STM123 Projects for the prior 12 months, so long as TC Build was solvent at that time. If any such agreement had been reached (as Mr Cull claims), then such a payment would have been a very significant matter for TC Build’s financial position in FY2021, and therefore would likely have been included in the budgeted figures for FY2021 and have been the subject of commentary by Mr Harris. However, the budgeted figures and commentary do not refer to any such anticipated payment.
Those are matters which tell against Mr Cull’s account of the terms of the 18 August 2020 agreement.

Mr Cull suggested in cross-examination that the “payback” he was referring to in this email was the “payback” by STM123 of the total amount of the margin which STM123 owed to TC Build by reason of the temporary reduction in margin from 8% to 3% on STM123 Projects.
However, Mr Cull asks, in this email, for a “margin increase to 5%” to be made “now until payback complete” (emphasis added). On Mr Cull’s account, there was no obligation to “payback” any amount to TC Build unless and until TC Build managed to survive until the end of August 2021 (and therefore there would have been no basis to request for the margin to be increased “now” in April 2021 so as to allow “payback” to occur).
Further, on Mr Cull’s account, “payback” meant the recovery of the full amount of the 8% margin over the life of the STM123 Projects. However, if that was the case, then it was nonsensical to ask for the margin to be “increase[d] to 5% until payback complete”, since an increase in margin from 3% to 5% would mean that the margin would remain below 8% such that “payback” could not be achieved.
These difficulties are resolved if the email is read in the context of Mr Blank’s account of the August 2020 agreement, Mr Harris’ January 2021 memorandum, and the “Vaughans Margin Calc” margin tracking spreadsheets. Against that background, it is likely that Mr Cull was asking for the margin on STM123 jobs to be increased from 3% to 5% (and therefore for the level of “margin foregone” to be decreased from 5% to 3%) “until payback” of the amount of $2.1m to STM123 was “complete”. This would have the effect of extending the date at which “payback” was achieved, while improving TC Build’s cashflow in the interim.
The term “payback” was also used in an email sent by Mr Brian Senstius, the Financial Controller for the TC Group, to Mr Cull on 15 September 2021. Mr Senstius attached a margin tracking spreadsheet titled “Vaughan Margin Calculation – AUG21” to this email, and noted that “the payback period has moved out to NOV21”. The margin tracking spreadsheet for August 2021 included a single figure in red, which was the forecast figure for “Margin + Projects Undercharged” as at the end of November 2021 and was in the amount of $2,052,365. (In contrast, the figure for the end of December 2021 was forecast to be $2,127,265.)
Having regard to those matters, it is likely that Mr Senstius’ reference to the “payback period” was a reference to the period from 18 August 2020 to the date when the total benefit received by STM123 from the reduction in margin (and as a result of various costs not being charged) equated to around $2.1m. That is consistent with Mr Blank’s account of the arrangement that was made on 18 August 2020.
In contrast, if Mr Cull’s account were correct, then the only “payback” which would be happening would be the payment of the “5% shortfall” and it would be meaningless to talk of a “payback period” or to describe the payback period as being “moved out”, since the payment of the “5% shortfall” was to occur at a fixed point in time (August 2021), subject to satisfaction of the solvency condition.
The Plaintiffs relied on the fact that there was no reference in the contemporaneous documents to a “claw back” of STM123’s investment by way of the reduction in margin. While that particular term may not have been used, Mr Harris’ memorandum of 27 January 2021 refers to the reduction in margin being “an agreed source of repayment of monies to be returned” and Mr Cull himself uses the term “payback” in his email to Mr Blank. As outlined above, those matters are consistent with Mr Blank’s account of the agreement that was reached.

Mr Blank’s final answer is a reference to the fact that, according to this budget, two payment claims had been made in respect of the Lamrock Ave Project, to recover costs of $44,323 and $127,650 respectively, without any allowance for margin. The second of these was the payment claim which was the subject of the invoice of 11 September 2020, to which the budget was attached. It is understandable that, in circumstances where STM123 was not being invoiced for any amount of margin on these payment claims, Mr Blank paid little attention to the margin figure included on this internal budget document.
Further, as outlined at paragraph [189] above, Mr Whittington-Davis gave unchallenged evidence that Mr Cull gave a direction to himself and other project managers to “apply a 3 percent margin to STM’s projects final forecast budgets in Jobpac”, and that Mr Whittington-Davis applied this 3% margin to the forecast budgets which he was managing. Consistently with this evidence:
on 4 September 2020, Ms Taylor sent an email to Mr Whittington-Davis, Mr Macintosh and others, stating that the “FFM” (which Ms Taylor identified in cross-examination as a reference to the Financial Forecast Module in Jobpac) had been “adjusted … to reflect the 3% margin”; and
on 9 September 2020, Ms Taylor sent a further email to Mr Whittington-Davis, stating that: “Forecast final margin needs to be at 3% mark-up in Jobpac – doesn’t matter what you have claimed from him – the margin you have claimed from him is essentially an overclaim for accounting purposes”.
In addition, Mr Whittington-Davis gave unchallenged evidence that at presentations made by project managers to Mr Cull and Mr Blank about the financial position on STM123 Projects, “the only figure ever discussed in terms of margin was ‘3 percent’” (see paragraph [189] above).
Mr Blank’s evidence that the figure for the margin in the internal budgets was “of no relevance” to STM123 and made “no difference” to what was being charged is also supported by an email exchange between Ms Taylor and Mr Macintosh. On 3 February 2022, Ms Taylor sent an email to the Project Managers contact list, asking the Project Managers to “please explain why when forecasting Vaughans [sic] jobs they are not forecasted at 3%”. Mr Macintosh replied, copied to the same contact list, explaining that the “jobs are forecasted and then revenue adjusted to 3% margin” and noting that “Jobpac shows Fletcher 3.07% and Wentworth 2.89%”.

Mr Blank deposed that he agreed with this proposal, and that the contracts for the ongoing STM123 Projects were novated from TC Co to TCBG.
Mr Blank’s evidence is supported by the following contemporaneous documents.
As noted above, the invoices in respect of each of the Wentworth St Project, the Fletcher St Project and the Lamrock Ave Project were, from the time of the commencement of each Project up until around June 2021, issued by TC Co.
Similarly, the progress claims in respect of each of the Wentworth St Project, the Fletcher St Project and the Lamrock Ave Project were initially issued by TC Co.
On 4 December 2020, solicitors for the owners corporation of a property bordering the Fletcher St Project sent a letter addressed to Mr Cull in his capacity as managing director of TC Build, which complained that the boom of a crane was regularly over-sailing their clients’ property. Shortly after receipt, Mr Cull forwarded this letter to Mr Blank and Mr Macintosh, stating in the body of his email that “Technically – TC Build is not the builder [on the Fletcher St Project], it’s TC Co”, and asking whether they could simply ignore this letter and then, if the matter went to Court, “just turn around and say TC Build has no project at this address”. The Plaintiffs submitted that any reliance on the terms of this email to establish the identity of the builder for the Fletcher St Project was undercut by the fact that Mr Blank responded: “Definitely not. This is just playing games”. However, when the email is read in context, I accept Mr Blank’s explanation, under cross-examination, that he was not rejecting Mr Cull’s statement regarding the identity of the builder, but was rejecting the suggestion that the letter could simply be ignored, with the true identity of the builder only being revealed if and when the matter came to Court (because this would amount to “playing games”).
On 11 June 2021, Mr Senstius sent an email to Mr Macintosh and Mr Whittington-Davis, copied to Mr Cull, stating as follows: “As you know a number of jobs have moved from TC Build Co Pty Ltd [TC Co] to TC Build Group Pty Ltd [TCBG]”.
From the middle of 2021, invoices in relation to each of the Wentworth St Project, the Fletcher St Project and the Lamrock Ave Project were issued by TCBG. Further, from late 2021, invoices and progress claims in relation to the Jaques Ave Project were also issued by TCBG.
On 21 July 2021, Mr Cull sent an email to a solicitor, Mr Nicholas Hitchens of Hitch Advisory, which was copied to Mr Blank and which provided an “update on the group”. In particular, Mr Cull stated that as follows:

On 1 June 2022, at the conclusion of the reconciliation process which is addressed at paragraphs [244]-[256] above, Ms Taylor sent an email to Mr Blank in the name of TC Build for the agreed shortfall amount. On the same day, Mr Blank stated that the invoice “should be in the name of TCBG”, on the basis that “[a]ll my funds go into TCBG” and STM “does not have a contractual relationship with TC Build”. Ms Taylor suggested that it was appropriate that the invoice was issued by TC Build since, according to the agreed reconciliation, the shortall “was on Old south Head Road [the OSHR Project], which is TC Build”. After Mr Blank pointed out that this was incorrect, the invoice was reissued in the name of TCBG, with Ms Taylor confirming that the “cash will be used for [TCBG] payables only”. Mr Blank then made the payment.
On 16 June 2022, TCBG served payment claims on the STM123 entities pursuant to s 13 of the SOPA in respect of each of the Wentworth St Project, the Fletcher St Project, the Lamrock Ave Project and the Jaques Ave Project. Subsequently, TCBG issued adjudication applications in respect of each of those Projects.
On 30 March 2023, Mr Cull stated in an email to a subcontractor who was chasing payment of retention moneys on STM123 Projects that TCBG “was setup as a stand alone entity to carry out the works solely for STM”.
So far as contemporaneous documents are concerned, it should be noted that the Plaintiffs did not, in their closing written submissions, refer to or rely on the terms of two deeds dated 18 November 2020, the first of which appears to have been executed by TC Build and TC Co, and the second by TC Build and TCBG. These deeds refer to a “subcontractor” relationship between TC Build and the other entities. Mr Blank gave unchallenged evidence that he had no knowledge of, and no involvement in, the preparation of these deeds.
Having regard to the matters set out above, I accept the Defendants’ contention that, as at the beginning of 2022, the contracting party for each of the Wentworth St Project, the Fletcher St Project, the Lamrock Ave Project and the Jaques Ave Project was TCBG.

The parties reached, over the course of the two-week hearing, substantial agreement on the quantum of the direct costs incurred across all of the STM123 Projects, largely because they reached a common position that the effect of the Reconciliation was that there was a binding agreement as to the amount of the direct costs payable on all STM123 Projects for the period up to 28 February 2022.
As a result, the Defendants did not press their claim that certain amounts claimed in the period up to 28 February 2022 were not “properly payable”. Senior Counsel for the Defendants confirmed in closing that “[t]here are no improperly incurred costs” and that the direct costs should be determined on the basis of “the costs that are agreed up to 28 February [2022]” in the Reconciliation and “the costs that are incurred thereafter”, for which there were agreed figures which were derived from the Construction Work in Progress (CWIP) amounts recorded in TC Build’s accounting system.
The Plaintiffs prepared a schedule of their calculations of costs and margin which adopted the CWIP figures. As regards the CWIP figures for the period up to 28 February 2022, it follows – from the fact that the parties have agreed on the costs up to that date as determined by the Reconciliation – that the Plaintiffs would not be entitled to claim for any CWIP costs in excess of the agreed costs in the Reconciliation.
In that regard, the Plaintiffs produced a document which identified the differences between the amounts for direct costs shown in the CWIP figures for each of the STM123 Projects as at 28 February 2022, and the amounts set out in the Reconciliation as at 28 February 2022. Leaving aside some immaterial differences, there were three main variances between these figures.
First, an amount of $160,782.49 in respect of the Curlewis St Project was included in the CWIP figures, but was excluded from the Reconciliation.
As explained at [249]-[250] above, Mr Blank expressly rejected any claim for the Curlewis St Project from the total that was subsequently agreed. In any case, I have determined that the contract for the Curlewis St Project was between Blank Super and TC Co (which is not a party to these proceedings). It follows that no amount can be claimed by either of the Plaintiffs in respect of this Project.
Secondly, an amount of $143,415.06 was included in the CWIP figures for a project undertaken for STM123 No. 24 Pty Ltd at 17 O’Brien St, Bondi Beach, NSW, and no amount was included for this project in the Reconciliation.
This project is distinct from the “O’Brien St Project” referred to above, which was a project at 1 O’Brien St that was undertaken for STM123 No. 6 (and which is included in the Reconciliation). STM123 No. 24 Pty Ltd is not a party to these proceedings, and the Third Further Amended Commercial List Statement does not contain any allegations about the 17 O’Brien St project. It can therefore also be put to one side.
Thirdly, there is an unexplained variance of $97,710.48 between the amount given for the Jaques Ave Project in the Reconciliation ($1,998,899.00) and the amount of costs recorded in CWIP for this Project in the period up to 28 February 2022 ($2,096,609.48).
Given the common position between the parties regarding the effect of the Reconciliation, and the absence of any evidence explaining this variation or substantiating the additional costs, the lower figure in the Reconciliation should be adopted, and therefore the total CWIP costs for the Jaques Ave Project should be reduced by an amount of $97,710.48.
Otherwise, in circumstances where the CWIP figures are consistent with the figures in the Reconciliation as at 28 February 2022, and where the Defendants abandoned their claim that any amounts in the CWIP were not “properly payable”, I have proceeded to use the CWIP figures (subject only to making a number of reductions for concessions which were made by Mr Cull in his affidavit of 3 July 2025, and which the Plaintiffs accepted should be deducted from the costs for the relevant Projects).

Taking those matters into account, in respect of TC Build, I make the findings set out in Annexure A to these reasons regarding:
the direct costs in respect of each of the STM123 Projects for which TC Build was the contracting party (divided into costs before and after 18 August 2020);
the margin payable to TC Build on those direct costs for each such Project (based on an 8% margin up to 18 August 2020, and a 3% margin thereafter);
the amounts paid by the relevant STM123 entity in respect of each such Project (which were agreed); and
the shortfall (if any) between the amount payable to TC Build and the amount paid in respect of each such Project.
Further, in respect of TCBG, I make the findings set out in Annexure B to these reasons regarding:
the direct costs in respect of each of the STM123 Projects for which TCBG was the contracting party (divided into costs before and after 18 August 2020);
the margin payable to TCBG on those direct costs for each such Project (based on an 8% margin up to 18 August 2020, and a 3% margin thereafter);
the amounts paid by the relevant STM123 entity in respect of each such Project (which were agreed); and
the shortfall (if any) between the amount payable to TCBG and the amount paid in respect of each such Project.
Five matters arise in relation to those findings.
First, in two instances, I have determined that the amount paid in respect of a particular STM123 Project exceeded the amount of costs and margin (including GST) that was in fact payable to TC Build or TCBG in respect of that Project, namely:
STM123 No. 21 paid an amount of $101,882.98 above the amount of the costs and margin payable to TC Build in respect of the OSHR Project; and
STM123 No. 16 paid an amount of $84,954.15 above the amount of the costs and margin payable to TCBG in respect of the Wentworth St Project.
There is no basis for setting off those amounts against the amounts payable by different STM123 entities in respect of different Projects. Each of the Projects was undertaken by a different STM123 entity, which was responsible for the costs and margin of that particular Project.
Neither STM123 No. 16 nor STM123 No. 21 brought any cross-claim alleging that it had overpaid costs or margin in respect of (respectively) the Wentworth St Project or the OSHR Project.
None of the other Defendants alleged that any amount payable by a particular Defendant to either TC Build or TCBG in respect of a particular STM123 Project should be set-off against any amount which a different Defendant had overpaid to either TC Build or TCBG in respect of a different STM123 Project.
In any event, the Defendants acknowledged in closing that any amount owing by the Plaintiffs to a particular STM123 entity “can’t reduce [the amount owing to one of the Plaintiffs by] another STM entity”.
Accordingly, the surpluses for the Wentworth St Project and the OSHR Project mean that the claims against STM123 No. 16 and STM123 No. 21 for underpayment of costs and margin in respect of those Projects must be dismissed, but do not result in any reduction in the amount of the “shortfall” which I have determined to be owing by the other STM123 entities in respect of other STM123 Projects (as set out in Annexures A and B).
Secondly, and for similar reasons, the only cross-claims against either TC Build or TCBG which need to be determined are those which are advanced by particular STM123 entities which have been found to owe a “shortfall” amount to either of those Plaintiffs. Given that I have determined that no claim can be brought by either of the Plaintiffs in respect of the Curlewis St Project, and given that the claim for defects in respect of the Lamrock Ave Project was abandoned by the Defendants in their closing address, the only cross-claims brought by STM123 entities against either of the Plaintiffs which need to be determined are:
STM123 No. 17’s cross-claim against TC Build for alleged defects in respect of the Bellevue Rd Project (which, if established, would be able to be set-off against the amount of $295,717.46 which I have found to be owing by STM123 No. 17 to TC Build in respect of the Bellevue Rd Project); and
STM123 No. 6’s cross-claim against TC Build, seeking to set-off a judgment debt assigned to it by STM123 No. 8 against STM123 No. 6’s liability to pay the amount of the “shortfall” to TC Build in respect of the O’Brien St Project.
I address each of those cross-claims, as well as the cross-claim against Mr Cull regarding the Curlewis St Project, separately below.
Thirdly, as shown in Annexures A and B, the total amount payable by the STM123 entities in respect of margin from 18 August 2020 onwards was $952,980 (calculated as 3% of the direct costs incurred on each of the Projects from that date onwards). It follows that the amount of the “5% shortfall” or the “margin foregone” by reason of the margin across all STM123 Projects being reduced from 8% to 3% was $1,588,300 (being 5/3rds of $952,830). This means that the STM123 entities did not, by end of their relationship with the Plaintiffs, “claw back” $2.1m of value as a result of reducing the margin from 8% to 3% and, therefore, it is unnecessary to consider what margin would have applied from the time when the amount of the “margin foregone” or the “5% shortfall” did equal the amount of $2.1m. (The reason why the margin tracker spreadsheets suggested that the targeted figure of $2.1m would be reached by around the second half of 2021 is because those spreadsheets added various costs to the figure for “margin foregone”. If these disputed costs are put to one side, the amount of the “margin foregone” forecast by those spreadsheets through to the middle of 2022 was less than $2.1m.)
Fourthly, as noted in Annexures A and B, the agreed figures for amounts paid by the various STM123 entities included amounts paid by those entities directly to subcontractors. In their closing written submissions, the Defendants contended that “margin was not required to be paid by STM123 on invoices that were paid directly by STM123 Companies”. The Defendants stated that this issue would be addressed “in supplementary submissions”. However, no supplementary written submissions were provided prior to the Defendants commencing their closing oral address. Nor was this issue dealt with in closing oral address.
The only matters referred to in support of this contention in the Defendants’ written submissions were as follows.
On 6 and 7 August 2020, there was an email exchange regarding some bricks which Mr Blank “want[ed] to pay … direct”, and Mr Whittington-Davis stated that: “Tom [Cull] has advised that if it goes through our books we would need margin Placed on the bricks”. This is insufficient to establish that there was any agreement that margin would not be payable in respect of any costs paid directly by the relevant STM123 entity. No such proposition was put to Mr Cull in cross-examination, nor was he taken to this document. (Ms Taylor was asked to read the email in cross-examination but, after she indicated that she had not seen it before, no further questions were asked.)
On 23 June 2022, Mr Macintosh sent an email to Mr Blank noting that “you [STM123] will pay direct” two invoices which had been issued by subcontractors in respect of the Fletcher St Project. However, this email does not contain any statement, one way or the other, as to whether margin was payable on these amounts.
Mr Blank deposed that there was an arrangement between the STM123 entities and the TC Build entities that no margin was payable on amounts paid directly to subcontractors by STM123 entities. However, this evidence was subject to an agreed ruling, limiting it to evidence of Mr Blank’s understanding.
Having regard to those matters, the Defendants have not established that there was any agreement that margin would not be payable on invoices paid directly by STM123 entities. Accordingly, I have not removed the amounts paid directly by STM123 entities from the costs of the relevant STM123 Projects for the purpose of determining the amount of margin payable.
Fifthly, the Defendants submitted that, in order for the Plaintiffs to recover the direct costs of the STM123 Projects, they “need to show that they actually paid the amounts claimed” or “that there is a risk that they will be required to pay those amounts in the future”; and that in circumstances where any amounts recovered by the Plaintiffs will be retained by the Receiver of TC Build on behalf of his appointor, “it is highly unlikely that those funds will ever be paid to those creditors [who invoiced TC Build or TCBG for the relevant costs]”.
In support of this proposition, the Defendants relied on Alucraft Pty Ltd (in liq*) v* Grocon Ltd (No 2) [1996] 2 VR 386.
In that case, a head contractor sought damages against a subcontractor by reason of defective steelwork. There was evidence that the costs of rectifying the defect were $35,000. The head contractor was not the owner of the property, and had not been sued by the property owner (in circumstances where a final certificate had been issued three years earlier). Smith J held (at 396) that the head contractor could not simply claim, by way of damages against the subcontractor, the cost of rectifying the identified defects and that its loss was instead the “potential liability to the proprietor for breach of the head contract”. His Honour found (at 400) that this risk was “very remote” and concluded that $5,000 was “reasonable compensation having regard to that risk”. This decision was approved in Westpoint Management Ltd v Chocolate Factory Apartments Ltd [2007] NSWCA 253 at [46] per Giles JA (with whom McColl and Campbell JJA agreed).
In the present case, the Plaintiffs do not seek to recover damages assessed by reference to a potential liability to pay amounts due to subcontractors. Instead, the Plaintiffs pleaded that:
it was a term of the agreements with each of the relevant STM123 entities that the STM123 entity would pay “the direct cost of the work plus builder’s margin” in respect of the relevant STM123 Project;
the relevant STM123 entities breached this term by failing “to pay [TC Build / TCBG] the direct cost” of the works plus a builder’s margin; and
by this breach, the Plaintiffs have suffered loss and damage which includes, relevantly, those direct costs of each relevant STM123 Project that have not been paid.

On 16 June 2022, Mr Blank received an email from the TC Build “invoices” email address, attaching a “margin invoice as per Shareholders agreement on all projects as agreed”. This invoice was issued by TC Build, was addressed to STM123, specified a due date of 5 July 2022, and was stated to be “a payment claim made under the [SOPA]” (TC Build Margin Payment Claim).
The TC Build Margin Payment Claim was in a total amount of $3,682,907.86 (incl GST), comprising:
an amount of $3,151,049.50 (excl GST), said to represent a “Margin calculation in accordance with cl 22 of the Shareholders Deed at 8% on agreed costs to Feb 22 of $39,388,188.76” (that is, a claim for 8% margin on the direct costs of all STM123 Projects from their respective commencement dates through to the end of February 2022);
an amount of $120,799.42 (excl GST), said to represent a “Margin calculation in accordance with cl 22 of the Shareholders Deed at 8% on agreed costs to Mar and Apr 22 of $1,509,992.69” (that is, a claim for 8% margin on those STM123 Projects which were on foot in March and April 2022); and
an amount of $76,249.14 (excl GST), said to represent a “May Margin calculation in accordance with cl 22 of the Shareholders Deed at 8% on invoiced amount of $953,114.27” (that is, a claim for 8% margin on the amounts invoiced for current STM123 Projects in May 2022).
An annexure to the TC Build Margin Payment Claim indicated that the “agreed costs of Feb 22 of $39,388,188.76” were calculated by taking the total agreed costs figure in the Reconciliation (being an amount of $38,240,892.00) and adding a margin of “3% Overhead costs” (being an amount of $1,147,226.76). That is, this document took the amount that had been agreed in the Reconciliation for costs and margin of 3% on costs to the end of February 2022, and then added an 8% margin to that figure, thereby producing an effective total margin of 11.25% on direct costs.
On the following day, 17 June 2022, Mr Blank sent an email in reply, addressed to Mr Cull and Ms Taylor stating as follows: “We have recently signed off our reconciliation and the funds paid and now you play more games”.

A number of the claims made under the SOPA either do not arise for determination or may be briefly addressed.
First, the claim advanced by TC Build under the SOPA, based on the TC Build Margin Payment Claim, does not arise because TCBG, rather than TC Build, was the party which was engaged by the relevant STM123 entities to perform construction works in respect of each of the Wentworth St Project, the Lamrock Ave Project and the Jaques Ave Project (see paragraphs [283]-[293] above).
The TC Build Margin Payment Claim was expressed to be based on cl 22 of the Shareholders Deed. Neither cl 22 nor any other provision of the Shareholders Deed comprises an agreement to undertake construction work. Instead, cl 22 comprises an agreement regarding the maximum margin payable in respect of any construction work which STM123 might subsequently request TC Build and BB Plant & Labour to undertake.
It follows that TC Build is not, within the meaning of s 8 of the SOPA, a person “who, under a construction contract, has undertaken to carry out construction work or to supply related goods and services” in respect of any of Wentworth St Project, the Lamrock Ave Project or the Jaques Ave Project, and therefore was not entitled to serve a payment claim under s 13 of the SOPA in respect of any of those Projects.
Secondly, no claim under s 27 of the SOPA arises for determination in respect of the Jaques Ave Project because TCBG is not alleged to have issued a payment claim under s 13 of the SOPA in respect of that Project (such as to provide a basis for the subsequent issue of a notice under s 15 of the SOPA). As set out at paragraph [386] above, the Plaintiffs’ pleading only refers to payment claims being issued by TCBG in respect of the Wentworth St Project, the Fletcher St Project and the Lamrock Ave Project.
In any event, having regard to the matters set out at paragraphs [350]-[355] above, there was an express agreement between the parties that the Jaques Ave Project would not be completed by TCBG, but would be taken over by STM123.
Thirdly, in closing oral address, the Plaintiffs advanced their damages case only on the basis of a loss of profits on the Projects (and not by reference to the loss of the opportunity to rectify defects).
Finally, as noted at paragraph [362] above, the Fletcher St Project was completed before any notice was issued of an intention to suspend works on that project, and the Plaintiffs did not, in closing submissions, advance any claim for loss of profits in respect of that Project.
Accordingly, it is only necessary to consider the claims by TCBG under s 27(2A) of the SOPA in respect of the Wentworth St Project and the Lamrock Ave Project.
The foundational event for those claims is the issuing, on 16 June 2022, of the TCBG Wentworth St Payment Claim and the TCBG Lamrock Ave Payment Claim, each of which was served by email on the relevant STM123 entities on that date.
There is no allegation, or evidence, that the construction contracts in relation to the Wentworth St Project or the Lamrock Ave Project provided for a date by which progress payments were to be made. (As noted at paragraph [266] above, none of the parties contended that the written contracts signed by Mr Cull and Mr Blank in respect of the Wentworth St Project and the Lamrock Ave Project represented the terms of the parties’ agreements in respect of those Projects.)
It follows that, in accordance with s 11(1A)(a) of the SOPA, the due date for the relevant progress payments was 15 business days after the TCBG Wentworth Payment Claim and the TCBG Lamrock Payment Claim were made. Because each of those payment claims was made on 16 June 2022, the due date for the progress payment in respect of each payment claim was therefore 7 July 2022.
It also follows that:
as at 5 July 2022 when TCBG is alleged to have given a notice under s 15 of the SOPA of an intention to suspend works, TCBG had no entitlement pursuant to s 15(2)(b) to issue such a notice, because “the due date for the progress payment” had not yet passed; and
as at 8 July 2022, TCBG had no entitlement pursuant to s 27(1) to suspend works on the Wentworth St Project or the Lamrock Ave Project on the basis of the notice which it had purportedly issued on 5 July 2022.
In any case, the notice given by Mr Cull on behalf of TCBG by his email to Mr Blank on 5 July 2022, was not a notice of TCBG’s “intention to suspend carrying out construction work” (within the meaning of s 15(2)(b)). Instead, it was a notice that TCBG was immediately suspending works on the Wentworth St Project and the Lamrock Ave Project. In particular, Mr Cull stated as follows: “We otherwise give you notice that … TCBG is suspending all works on your projects under SOPA, including Lamrock Avenue … and Wolseley Road [ie Wentworth St] due to non-payment of payment claims” (emphasis added, full quote set out at paragraph [372] above).
For those reasons, the Plaintiffs’ claim for damages under s 27(2A) of the SOPA must be dismissed.

I refused leave for this amendment, and the Plaintiffs did not seek reasons for my doing so.
The Defendants further submitted that any claim under the SOPA that was based on the issue of a payment claim on 27 April 2022 was not within the existing pleadings, particularly because:
the 3FALS did not refer to any payment claim having been issued on 27 April 2022;
the List Response specifically pleaded that the payment claims issued from 16 June 2022 could not give rise to the purported right to issue a notice of intention to suspend works on 5 July 2022; and
no Reply was filed by the Plaintiffs in response to those contentions and notice was not otherwise given, at any time before closing submissions, that the Plaintiffs intended to rely on a 27 April 2022 payment claim.
The Plaintiffs did not advance any submissions in reply to the Defendants’ contention that any claim under the SOPA which was based on the 27 April 2022 invoice was outside the pleaded case.
I accept the Defendants’ submissions on this issue.
In any event, I would have rejected any SOPA claim based on the 27 April 2022 invoice because that invoice was issued by TC Build to STM123 and was an invoice for “Margin Calculation as per Claus[e] 22 of Shareholders Deed”. As noted above:
TCBG (rather than TC Build) was the party which was engaged in respect of each of the Wentworth St Project and the Lamrock Ave Project;
STM123 No. 16 and STM 123 No. 9 (rather than STM123) were the counterparties to, respectively, the Wentworth St Project and the Lamrock Ave Project;
the invoice issued by TC Build to STM123 was expressed to be based on cl 22 of the Shareholders Deed, which is not an agreement to undertake construction work (but is only an agreement regarding the maximum margin payable in the event that STM123 requested TC Build and BB Plant & Labour to undertake construction work); and
it follows that TC Build was not, within the meaning of s 8 of the SOPA, a person “who, under a construction contract, has undertaken to carry out construction work or to supply related goods and services” in respect of either the Wentworth St Project or the Lamrock Ave Project, and therefore was not entitled to serve a payment claim under s 13 of the SOPA in respect of either of those Projects.

The starting point is that it was agreed between the parties, in closing submissions, that the total amount of the direct costs of completing the works on the Wentworth St Project and the Lamrock Ave Project, from the time that TCBG ceased work on those Projects, was $10,020,825.04 (comprising $6,772,839.62 for the Wentworth St Project and $3,247,985.42 for the Lamrock Ave Project, see paragraph [385] above).
I have determined that:
on 18 August 2020, Mr Cull and Mr Blank agreed that the margin payable on the direct costs across all STM123 Projects would be reduced from 8% to 3% going forward from that date, and would remain at this level until the amount of margin foregone as a result of this reduction was equal to $2.1m; and
applying a 3% margin to the direct costs incurred by TC Build or TCBG on all STM123 Projects from 18 August 2020 onwards (that is, through to when TC Build and TCBG ceased work on any STM123 Project), the total amount of the margin “foregone” as a result of reducing the margin from 8% to 3%, was $1,588,300 (see paragraph [321] above).
It follows that the margin on any STM123 Projects would have remained at 3% unless and until a further amount of just over $500,000 was foregone as a result of this reduction (to bring the total amount foregone to $2.1m).
In circumstances where the works on the Fletcher St Project had completed, and the parties had agreed that TCBG would not complete the Jaques Ave Project (which would be taken over by STM123), the only two STM123 Projects remaining on foot as at 5 July 2022 were the Wentworth St Project and the Lamrock Ave Project. Applying a 3% margin to the $10,020,825.04 of direct costs required to complete these two Projects would produce an amount of $300,624.75. It would also result in a further amount of $501,041 of margin being “foregone” as a result of the agreement to reduce the margin from 8% to 3%, bringing the total amount of margin “foregone” as a result of this reduction to $2.089m.
It follows that, in accordance with the agreement made on 18 August 2020, the margin would have remained at 3% throughout the period to the end of the Wentworth St Project and the Lamrock Ave Project (because the amount of margin “foregone” as a result of the reduction in the margin from 8% to 3% did not reach the amount of $2.1m as at the end of those Projects).
This conclusion is fatal to the claim for loss of profit.
The Plaintiffs accepted that, in order to determine the amount recoverable for loss of profit on the Wentworth St Project and the Lamrock Ave Project, it was necessary:
first, to ascertain the amount of the margin that would have been earned from completing those Projects (by applying the appropriate margin figure to the agreed quantum of the direct costs incurred in the completion of each of those Projects); and
secondly, to deduct from this figure the amount of overheads (which were approximately 3% of the direct costs of construction).
Because I have determined that the margin that would have been payable on the Wentworth St Project and the Lamrock Ave Project through to their completion would have been (and remained) 3% of the direct costs of those Projects, and because the overheads were also approximately 3% of those costs, it follows that no profit would have been earned by TCBG from completing those two Projects.
This is not a surprising result, given that Mr Cull complained in June 2022 that he did not want to complete works on the Wentworth St Project and the Lamrock Ave Project for a margin of 3% of direct costs, because this would have meant that the TC Group was working “for free” and was not making any profit (see paragraphs [358]-[359] above). It was for precisely this reason that, on 8 June 2022, Mr Cull presented Mr Blank with a choice: the parties had to “settle on a figure to complete the existing projects” or they would need to “part ways immediately … as I will not be continuing works for free any longer” (see paragraph [358] above). Mr Blank did not agree to increase the margin to 8% on all STM123 Projects and, shortly afterwards, TCBG ceased work on the Wentworth St Project and the Lamrock Ave Project.
For the reasons given above, the Plaintiffs have failed to establish that TCBG suffered any loss of profit by reason of being unable to complete the Wentworth St Project and the Lamrock Ave Project in accordance with the terms of the agreement relating to each of those Projects.

For the conduct of a party to constitute a renunciation of its contractual obligations it must be shown that the party is either unwilling or unable to perform its contractual obligations, that is, it has evinced an intention to no longer be bound by the contract, or stated that it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way: DCT Projects Pty Ltd v Champion Homes Sales Pty Ltd [2016] NSWCA 117 at [39] per Gleeson JA (Macfarlan JA and Sackville AJA agreeing), referring to Shevill v Builders Licensing Board (1982) 149 CLR 620 at 625-626 (Gibbs CJ); [1982] HCA 47; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 at 634, 647-648, 658; [1989] HCA 23; and Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; [2007] HCA 61 at [44] per Gleeson CJ, Gummow, Heydon and Crennan JJ.
The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it: Koompahtoo at [44].
Given the factual findings I have made above, the Plaintiffs’ repudiation claim can be addressed briefly.
First, TC Build’s claim for repudiation or breach of contract fails because I have found that it was not a party to the construction contract for the Wentworth St Project, the Fletcher St Project, the Lamrock Ave Project or the Jaques Ave Project (see paragraphs [283]-[293] above).
Secondly, TCBG’s claim for loss of profits as a result of the repudiation or breach of the contract relating to the Fletcher St Project can be put to one side, because the works under the relevant construction contract were completed by TCBG in June 2022, prior to the alleged suspension of works, and I have determined its claim for costs and margin having regard to the costs through to the Project’s completion (see paragraph [362] above and Annexure B).
Thirdly, TCBG’s claim in respect of the Jaques Ave Project fails because I have determined that the parties agreed, by May 2022, that TCBG would not complete this Project and that it would be taken over by STM123 (see paragraphs [350]-[355] above).
Fourthly, TCBG’s claims for repudiation relating to the Wentworth St Project and the Lamrock Ave Project also fail because they depend on the proposition that TCBG was entitled, pursuant to s 27 of the SOPA, to suspend all works on those Projects on 8 July 2022. I have found that this was not the case. By ceasing all work on those Projects, in circumstances where it was not entitled to do so, TCBG repudiated the contracts relating to those Projects (and the relevant STM123 entities subsequently accepted this repudiation and terminated the contracts).
Fifthly, the Plaintiffs submitted in closing oral address, that the purported termination of the contracts by the relevant STM123 entities was itself a repudiation of those contracts, by reason that those entities did not follow “the contractual mechanism for the remedy of the default and to terminate”. This was a reference to the procedure for termination for breach that is set out in cl 26(a) (headed “Termination by Owner”) of the Conditions of Contract attached to the written agreements that were signed by Mr Blank and Mr Cull in relation to the Wentworth St Project and the Lamrock Ave Project. However, as noted at paragraph [266] above, it was common ground that those written documents did not represent the terms of the relevant parties’ agreements in respect of those Projects. Further, even if those documents had represented the terms of the parties’ agreements in respect of those Projects, cl 26(b) expressly preserved the Owner’s right to “terminate the Contract in the circumstances provided by the general law”.
Finally, and in any case, the only damages claim that was pressed in relation to the Wentworth St Project and the Lamrock Ave Project was a claim for loss of the profits which would have been made from the completion of those Projects. For reasons given at paragraphs [419]-[429] above, I have determined that no such profit would have been made.
It follows that the Plaintiffs’ claims for repudiation of the contracts relating to the Wentworth St Project, the Fletcher St Project, the Lamrock Ave Project and the Jaques Ave Project must be dismissed.

The Plaintiffs pleaded that STM123 breached sub-cll (a), (c), (d), (e) and (h) of cl 21.2 of the Shareholders Deed, and that Mr Blank knowingly induced and/or procured those breaches (3FALS, [27], [40], [42]). The Plaintiffs pleaded a range of matters as giving rise to these breaches (namely, those matters pleaded in paragraphs [26]-[29] and [30]-[39] of the 3FALS).
The Plaintiffs did not address this claim in their closing oral address, and instead relied on their written submissions.
Although a variety of conduct was pleaded in the 3FALS, the matters referred to in the Plaintiffs’ closing written submissions as giving rise to a breach of cl 21.2 are that:
Mr Blank registered Hoz Construction for the purpose of replacing TCBG as the builder on the Wentworth St Project, the Lamrock Ave Project and the Jaques Ave Project; and
Hoz Construction did, in fact, replace TCBG as the builder on each of those three Projects.
Hoz Construction was registered on 2 May 2022, less than a week after Mr Cull had threatened to cease works on all jobs unless the monies claimed by TC Build were paid (see paragraph [346] above).
Mr Blank deposed that, as a result of his ongoing disputes with Mr Cull, he was aware that it was possible that, at some stage, he would have to replace TCBG as the builder on the STM123 Projects which were on foot, whether because TCBG refused to carry out further work or because the parties came to an agreement to end their relationship. He was also aware, from his experience as a property developer, that if a builder walks off a project, it can be very difficult, costly and time consuming to find another builder to agree to take on the partially completed project. In those circumstances, Mr Blank felt that “the best way to protect [him]self if TCBG did cease works was to have access to a readily available and appropriately licenced builder that could take over any incomplete projects”.
Mr Blank gave unchallenged evidence that his intention, at the time of registering Hoz Construction on 2 May 2022, “was to exclusively use Hoz [Construction] as the builder on the Jaques Avenue project, once the excavation has come to an end”; and that, at this time, it remained his “preference for TCBG to complete the other Current STM Projects”.
I accept this evidence, which is consistent with emails exchanged between Mr Blank and Mr Cull in May 2022, whereby Mr Blank agreed with Mr Cull that STM123 would take over the Jaques Ave Project, but that TCBG would complete the Wentworth St Project, the Fletcher St Project and the Lamrock Ave Project (see paragraphs [350]-[355] above). Further, this evidence makes commercial sense. Whereas the Jaques Ave Project was essentially “a hole in the ground” at this stage (as Mr Cull acknowledged), the other three Projects were well advanced, with the Fletcher St Project close to completion. As Mr Blank explained, and as the Plaintiffs themselves submitted, any change in the builder for those Projects would have resulted in significant cost and delay.
Hoz Construction did not do any work on the Fletcher St Project (which was completed by TCBG), and only commenced work on the Wentworth St Project and the Lamrock Ave Project after TCBG had ceased work on those Projects and had informed the private certifier that “TC Build lic 265796c is no longer the licenced builder” on those projects (see paragraph [374] above). I accept the Defendants’ submission that this conduct by TCBG evinced an intention no longer to be bound by the respective construction contracts in respect of those STM123 Projects, and was such as to convey to a reasonable person in the position of the relevant STM123 entities renunciation either of those contracts as a whole or of a fundamental obligation under them.
Further, Hoz Construction only undertook works on the Jaques Ave Project after Mr Cull and Mr Blank agreed that this project would not be completed by TCBG.
Finally, Hoz Construction has only performed work on STM123 Projects, and has not sought to enter, and has not entered, any contracts to carry out construction work for any third party that is unrelated to STM123.
The Plaintiffs handed up, in closing oral submissions, a document that was headed “Plaintiffs’ proposed findings of fact and law”. This included the following proposed findings of fact, relating to STM123’s alleged breach of cl 21.2 of the Shareholders Deed:

Mr Hossack was the sole director of TCBG from 18 February 2022 until 26 July 2022. In his capacity as such, Mr Hossack owed duties to TCBG, pursuant to ss 181-182 of the Corporations Act and at general law:
to exercise his powers and discharge his duties in good faith in the best interests of TCBG and for a proper purpose; and
not to improperly use his position to gain an advantage for himself or someone else or to cause detriment to TCBG.
Further, as a director of TCBG, Mr Hossack owed a fiduciary obligation not to promote his personal interests by making or pursuing a gain in circumstances where there was a conflict or a real or substantial possibility of a conflict between his personal interest and those to whom the duty is owed: Pilmer v Duke Group Limited (in liq*)* (2001) 207 CLR 165; [2001] HCA 31 at [78] per McHugh, Gummow, Hayne and Callinan JJ.
The Plaintiffs also alleged that Mr Hossack was “an officer” of TC Build within the meaning of s 9 of the Corporations Act, including because he was employed by a related entity of TC Build (being Employ Safe) and worked as a project manager for TC Build. It is unnecessary to determine this issue since:
as outlined below, the case against Mr Hossack depended on the establishment of Hoz Construction, and its taking over the remaining STM123 Projects; and
I have found that TCBG (of which Mr Hossack was sole director), rather than TC Build, was the contracting party for each of those Projects.
The Plaintiffs pleaded that Mr Hossack breached his duties to TCBG “by reason of the matters pleaded in paragraphs 26 to 37, excluding paragraphs 29A to 29H” of the 3FALS (3FALS, [38], [44]); that Mr Hossack “had a dishonest and fraudulent design in diverting the [STM123] Projects and employees from TC Build or TCBG” (3FALS, [39]); and that Mr Blank, Hoz Construction, STM123 and/or STM123 No 4 “were knowingly concerned” in these breaches of duty (3FALS, [45]).
In determining whether the Plaintiffs have established these claims on the balance of probabilities, I have taken into account the nature of the cause of action, the nature of the subject matter of the proceeding, and the gravity of the matters alleged: Evidence Act 1995 (NSW), s 140(2); Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362 per Dixon J; [1938] HCA 34; and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450 per Mason CJ, Brennan, Deane and Gaudron JJ; [1992] HCA 66.
The only acts or omissions of Mr Hossack which are pleaded in paragraphs [26]-[37] of the 3FALS are as follows:
Mr Hossack, Mr Blank and STM123 reached an agreement in about April 2022, without the knowledge or consent of the Plaintiffs, that:

on or about 2 May 2022, Mr Blank and Mr Hossack caused Hoz Construction to be incorporated (3FALS, [28]), and upon incorporation, its sole director was Mr Hossack and its shares were held equally by Mr Hossack and STM 123 No. 4 (of which Mr Blank was sole director and a shareholder) (3FALS, [29]);
on 7 July 2022, Mr Hossack resigned as a project manager of TC Build in order to work for STM123 and Hoz Construction (3FALS, [33]); and
on 8 July 2022, Hoz Construction took over the works on the Wentworth St Project, the Lamrock Ave Project, the Jaques Ave Project and the Fletcher St Project (3FALS, [34A]-[34B]), with Hoz Construction obtaining a building licence on 12 July 2022 (3FALS, [36]).
Importantly, there is no pleaded allegation that Mr Hossack approached or induced any officer, employee or contractor of TCBG or TC Build to terminate their relationship with those entities. Instead, any such approach was pleaded as having been made by STM123, not by Mr Hossack (3FALS, [27]). Further, although the Plaintiffs sought a “proposed finding” that Hoz Construction approached or induced employees of TC Build or TCBG to leave those entities, the Plaintiffs did not seek any such finding in respect of Mr Hossack, or allege that Hoz Construction engaged in any such conduct through Mr Hossack.
As noted at paragraph [15] above, the Plaintiffs informed the Court at the start of the hearing that they would be discontinuing their claim against Mr Hossack, and filed a notice of discontinuance shortly afterwards. However, the Plaintiffs pressed their claims against Mr Blank, Hoz Construction, STM123 and STM123 No. 4 for being “knowingly concerned” in Mr Hossack’s alleged breaches of duty.
The Plaintiffs did not deal with this claim in closing oral address and instead relied on their written submissions.
In their closing written submissions, the Plaintiffs stated that they “relie[d] on the same facts as relied upon in [their] claim for breach of restraints and Mr Blank’s inducement of breach of contract”.
I have already addressed these facts above, when dealing with those claims, and therefore can deal with these matters briefly.
The fact that a person who is an officer of one corporation is involved in the establishment of another unrelated corporation is itself a neutral matter. In order for such conduct to amount to a breach of the officer’s duties, it must be shown that the second company was established for the purpose of taking work that would otherwise be performed by the first company. In Gunasegaram v Blue Vision**s Management Pty Ltd [2018] NSWCA 179, a senior employee of Blue Visions, who had responsibility for managing a major contract between Blue Visions and the West Australian Department of Treasury and Finance, set up a corporate vehicle through which he could undertake work after his resignation from Blue Visions. Basten JA held (at [40]) that the establishment of that corporate vehicle was not itself a breach of the officer’s fiduciary duty. His Honour said that:

In the present case, the Plaintiffs pleaded that Hoz Construction was established for the purpose of taking over the STM123 Projects from the Plaintiffs. I am not satisfied that such a purpose has been established.
Mr Blank gave evidence in cross-examination that he (rather than Mr Hossack) was the person who was “driving” the incorporation of Hoz Construction.
Mr Blank gave unchallenged evidence that his purpose initially in incorporating Hoz Construction was exclusively to use it as the builder on the Jaques Ave Project, once the excavation works came to an end.
As set out in paragraphs [350]-[355] above, in May 2022 Mr Cull and Mr Blank expressly agreed that the Jaques Ave Project would be taken over and completed by STM123.
Mr Blank also gave unchallenged evidence that he intended that TCBG would complete each of the other STM123 Projects that remained on foot (namely, the Wentworth St Project, the Fletcher St Project and the Lamrock Ave Project), and that he only decided to move those Projects to Hoz Construction after TCBG ceased work on, and repudiated the contracts for, those Projects.
This unchallenged evidence is consistent with Mr Blank’s stated intention at the time that Hoz Construction was incorporated, as communicated to Mr Cull, and makes commercial sense (see paragraphs [354]-[355] and [453] above).
Accordingly, the Plaintiffs have not established their claims that Mr Hossack breached his duties, insofar as those claims were based on the incorporation of Hoz Construction and the fact that Hoz Construction subsequently took over various STM123 Projects. It follows that the claims of knowing involvement in such breaches have also not been established.
Otherwise, the Plaintiffs referred, in their written submissions, to the fact that Mr Hossack wrote a letter to STM123 in July 2022, purportedly in his capacity as sole director of TCBG, stating that TCBG would “not be pursuing any prior invoices or payment claims in relation to the projects” (see paragraph [381] above).
I accept that it is difficult to see on what basis Mr Hossack could have regarded it as in the interests of TCBG to write this letter, or how he could have come to the view that it was consistent with his duties as a director of that entity to do so. However, there is no pleaded allegation that Mr Hossack, by this conduct, breached his duties, or that in writing this letter he had a dishonest and fraudulent design, or that Mr Blank or Hoz Construction or any STM123 entity had knowledge of any such design. In those circumstances, I do not make any finding about these matters.
Finally, even if I had determined that the Plaintiffs had established their claim for knowing involvement in Mr Hossack’s alleged breaches of duty, I would have found that the Plaintiffs had failed to establish any loss or damage. The only loss claimed to have been suffered as a result of these alleged breaches was the loss of profits on the completion of the STM123 Projects that remained on foot as at July 2022 (namely, the Wentworth St Project and the Lamrock Ave Project). For the reasons given at paragraphs [419]-[429] above, TCBG would not have made any profit from those Projects if those Projects had remained with TCBG (rather than being taken over by Hoz Construction) and if TCBG had undertaken the works necessary to complete them. Further, in circumstances where Hoz Construction performed the works necessary to complete the Projects at cost, the Plaintiffs did not seek any account of profits in respect of the alleged breaches.
For those reasons, the claims for knowing involvement must also be dismissed.

On 11 July 2022, TC Build resolved that an “Immediate Leaver Event” within the meaning of cl 16.2 of the Shareholders Deed had occurred, by reason of STM123’s breach of the Restraint in cl 21 of that Deed. On this basis, TC Build purported, pursuant to cl 16.3 of the Shareholders Deed, to act as STM123’s attorney and to execute a transfer of STM123’s shares in TC Build to Moitly Boss for $1.00.
I have rejected the Plaintiffs’ claim that STM123 breached cl 21 of the Shareholders Deed. It follows that, as at 11 July 2022:
an “Immediate Leaver Event” within the meaning of cl 16.2 had not occurred;
TC Build was not entitled to act as STM123’s attorney pursuant to cl 16.3, and
there was no entitlement to transfer STM123’s shares to Moitly Boss for $1.00 pursuant to cl 16.1(a) of the Shareholders Deed.
While those matters establish a breach of contract (in respect of which STM123 did not bring any claim for damages), they do not necessarily establish commercial unfairness. That is because there is no basis to conclude, on the evidence before the Court, that STM123’s shares in TC Build had any material value as at the date they were transferred to Moitly Boss.
STM123 did not lead any evidence to establish that the shares in TC Build had any substantial value as at 11 July 2022. Nor did STM123 advance any submission to that effect.
The evidence establishes the following matters.
By 18 August 2020, Mr Blank had formed the view, on the financial information available to him, that STM123’s shares in TC Build were worthless (see paragraphs [148] and [193] above).
TC Build’s financial performance had worsened since August 2020. According to TC Build’s Special Purpose Financial Report for FY2021, TC Build made a profit after tax of $1,094 in FY2020, and made a loss of $890,336 in FY2021.
TC Build’s financial performance in FY2021 was adversely impacted by the reduction in margin on STM123 Projects from 8% to 3%, pursuant to the August 2020 agreement (see paragraphs [202]-[203] above).
At a margin of 3%, TC Build was not making any profit on the STM123 Projects, but was only covering offsite overheads, and was effectively working “for free” (see paragraphs [426]-[428] above).
TC Build was also making losses on other (third party) projects (see paragraphs [146]-[150] above).
The reduction in margin from 8% to 3% was put in place so that STM123 could recover the entire value of its investment in TC Build. I have determined that the total amount of margin foregone on costs incurred on STM123 Projects to June 2022 was around $1.588m, such that STM123 had, by that time, recovered the vast majority of the cash which it had invested in TC Build (being $1.815m). In addition, the crane leased to BB Plant & Labour was subsequently returned to STM123.
Mr Blank deposed that: “It was (and remains) my opinion that [Mr Cull] was running some kind of ‘Ponzi’ scheme; shuffling money around from project to project in order to hide his losses”.
Having regard to those matters, there is no basis to conclude that the “Fair Market Value” of the shares in TC Build, as at 11 July 2022, was greater than $1.00, or that there was any commercial unfairness in STM123 being removed as a member of a company which it regarded as worthless and as amounting to a Ponzi scheme.
Further, TC Build is now in liquidation. The only remedy which STM123 sought for its oppression claim was an order requiring Moitly Boss to transfer 50% of its shares in TC Build to STM123.
It is difficult to see why the Court would, in the exercise of its discretion, grant such a remedy in respect of a company in liquidation. I raised this issue with the Defendants in the course of their opening address. In their closing written submissions, the Defendants gave the following response:

In the course of their closing submissions, the Defendants/Cross-Claimants abandoned a number of the claims which they had sought to set off against any liability to the Plaintiffs.
Firstly, the Defendants/Cross-Claimants abandoned their claim regarding “back charges” and various costs which were said not to have been “properly payable”. Senior Counsel for the Defendants/Cross-Claimants stated, in closing address, that her clients did not seek to set off any “improperly incurred costs” against any amounts which they may be found to be liable to pay to the Plaintiffs, but only sought to set off “additional costs incurred by the STM123 entities in rectifying defects” in the STM123 Projects.
Secondly, the Defendants/Cross-Claimants also abandoned, in closing address, their claims for rectifying alleged defects in respect of the works done by TCBG on the Wentworth St Project and the Lamrock Ave Project.
In any case, no such claim would have arisen for determination in respect of the Wentworth St Project. That is because the claim in respect of alleged defects was only pressed in the event, and to the extent, that the relevant STM123 entity was found to owe any amount to the Plaintiffs; and I have determined that STM123 No. 16 is not liable to pay any amount to TCBG in respect of costs or margin on the Wentworth St Project (as STM123 No. 16 has paid, as shown in Annexure B, an amount in excess of the sum that it was required to pay to TCBG in respect of costs and margin).
Thirdly, it is unnecessary to determine the claims brought against TC Build and TCBG regarding defects in respect of the Curlewis St Project. That claim was advanced only in the event that I found that either of the Plaintiffs was the contracting party on that Project and was entitled to any costs or margin from Blank Super in respect of that Project. As set out at paragraphs [278]-[280] above, I have determined that TC Co was the contracting party in respect of this Project, and have dismissed the Plaintiffs’ claims in respect of this Project on that basis. (It remains necessary to determine the claim brought by Blank Super against Mr Cull personally in respect of the Curlewis St Project, which is addressed separately below.)
Fourthly, it is also unnecessary to determine the claim that STM123 No. 21 is entitled to set off against any liability to the Plaintiffs a judgment debt which was assigned to it in respect of the Captain Pipers Project. That is because I have determined that STM123 No. 21 has no liability to the Plaintiffs in respect of the OSHR Project (because, as shown in Annexure A, it paid TC Build an amount in excess of the sum that it was required to pay in respect of costs and margin for that Project).
It follows that the only set-offs claimed against the amounts owing to TC Build or TCBG which are necessary to determine are:
STM123 No. 17’s claim against TC Build in respect of defective works on the Bellevue Rd Project, which it seeks to set off against the amount found to be owing to TC Build for costs and margin in respect of that Project; and
STM123 No. 6’s claim to set off a judgment debt assigned to it in respect of the Captain Pipers Project, which it seeks to set off against the amount owing to TC Build for costs and margin in respect of the O’Brien St Project.

The matters set out in this section of the Judgment are pleaded by STM123 No. 17 and admitted by TC Build (see Cross-Claim List Statement, [7]-[20], [22]-[28]; Cross-Claim List Response, [7], [9]-[20], [22]-[28]).
In around July 2018, STM123 No. 17 and TC Build entered into an agreement in respect of the Bellevue Rd Project, which involved the construction of seven units (the Bellevue Agreement).
It was a term of the Bellevue Agreement that TC Build agreed to perform the work on the Bellevue Rd Project (Bellevue Work) in accordance with the design plans and specifications obtained and provided to it by STM123 No. 17.
TC Build performed the Bellevue Work between July 2018 and August 2020, with the final Occupation Certificate being issued on 2 July 2020.
The Bellevue Work was “residential building work” within the meaning of the HBA, and the Bellevue Agreement was a “contract to do residential building work” within the meaning of Part 2C of the HBA. Accordingly, by reason of s 18B of the HBA, the following warranties by TC Build were implied in the Bellevue Agreement:
a warranty that the Bellevue Work would be done with due care and skill and in accordance with the plans and specifications set out in the contract;
a warranty that all materials supplied by TC Build would be good and suitable for the purpose for which they were used and that, unless otherwise stated in the contract, those materials would be new;
a warranty that the Bellevue Work would be done in accordance with, and would comply with, the HBA or any other law;
a warranty that the Bellevue Work would be done with due diligence and within the time stipulated in the contract, or if no time is stipulated, within a reasonable time;
a warranty that the Bellevue Work would result, to the extent of the work conducted, in a dwelling that is reasonably fit for occupation as a dwelling; and
a warranty that the Bellevue Work and any materials used in doing the Bellevue Work would be reasonably fit for the specified purpose or result.

Before addressing the issues raised by TC Build in relation to Mr Nikolas’ evidence, it is convenient to deal with three preliminary issues which TC Build raised in answer to STM123 No. 17’s claim.
First, TC Build submitted that there was no basis for STM123 No. 17’s claim for damages in respect of the Bellevue Defects because STM123 No. 17 no longer owns the Bellevue Rd property, and there is no evidence that it has been sued by the owners of the property or is otherwise liable for any defects found in the property.
This submission ignored that, as set out in paragraph [523]-[525] above, TC Build has admitted, on the pleadings, that by the Rectification Order, STM123 No. 17 was required to rectify the Bellevue Defects; that if STM123 No. 17 had failed to do so, it would have committed an offence under the RAB Act; and that, by reason of those matters, STM123 No. 17 would be rectifying those defects and would thereby suffer loss and damage (being the costs of the Bellevue Rectification Works).
Accordingly, insofar as it is established that TC Build is liable for the Bellevue Defects – whether by reason of a breach of the Bellevue Agreement, or a breach of the Bellevue Warranties, or a breach of the Bellevue Duty of Care – then the costs which have in fact been incurred by STM123 No. 17 in rectifying those defects will comprise loss and damage suffered by reason of TC Build’s breach.
Secondly, TC Build submitted that:
Mr Nikolas was instructed to provide his opinion on the rectification work required to comply with the Rectification Order, and his report assumed the truth of the opinions expressed in the Rectification Order regarding defects in the Bellevue Work; and
this assumption had not been established, because the Rectification Order was the subject of an order under s 136 of the Evidence Act, limiting it to evidence of the statements made in that document, rather than the truth of the opinions expressed in that document.
I do not accept this submission, having regard to Mr Nikolas’ instructions and the contents of his report.
Mr Nikolas was in fact instructed to inspect the Bellevue Rd property and to provide a report “as to whether TC Build performed defective work when constructing the residential development at the Property”, and in particular to address:

Mr Nikolas inspected the Bellevue Rd property and provided a detailed account of his investigations in his report, accompanied by numerous photographs. He did not simply assume the existence of the Bellevue Defects, but expressed an opinion, in respect of each of the Bellevue Defects, that TC Build had performed defective work, and set out the reasons for his conclusion, based on his investigations. In particular, he identified various respects in which the work performed by TC Build did not comply with the BCA and applicable Australian Standards, and various respects in which the workmanship was poor or inadequate.
Further, Mr Nikolas did not simply assume that the rectification work required in respect of each of the Bellevue Defects was as stated in the Rectification Order. He expressed his own opinion, for each of the Bellevue Defects, as to the scope of the rectification work required. In some instances, he expressed an opinion regarding the scope of works required in order to rectify the defect which differed from the scope of works in the Rectification Order. For example, in respect of Bellevue Defect No. 5 (relating to steel reinforcing tendons in the storage / plant room on level 1 which were exposed and corroding):
the Rectification Order required work to be carried out “to treat the steel reinforcing tendons to ensure they remain structurally adequate and durable”, following which it would be necessary to “[m]ake good all surface to closely match existing”; and
in contrast, Mr Nikolas expressed the view that the reinforcement in this position was “redundant and can be removed”, with the protruding reinforcement bars being “cut back flush and painted over with an anti-rust, corrosive resistant paint”.
Thirdly, TC Build:
noted that the Occupation Certificate for the Bellevue Rd Project was issued for all works except landscaping on 5 March 2020 and for all works on 2 July 2020, and that the cross-claim alleging defects in relation to the Bellevue Rd Project was filed on 13 December 2024; and
submitted that:

Mr Nikolas’ report identifies, in respect of each of the Bellevue Defects, the reasonable precautions which TC Build should have taken in order to avoid or prevent the Defects, and which it has failed to take.
None of those matters was the subject of any competing expert evidence from TC Build.
However, TC Build contended that the Court ought to reject Mr Nikolas’ opinions as to whether the Bellevue Defects were caused by work carried out by TC Build or as to what reasonable precautions TC Build should have taken to avoid those defects, because:
Mr Nikolas accepted in cross-examination that, in order to express an opinion as to what a reasonable builder ought to have done to avoid defects, the starting point is to ascertain the terms and conditions of the building contract and what precisely the builder is contracted to build; and
Mr Nikolas was not provided with any contractual documents or any detailed drawings.
This submission does not accurately capture the answers given by Mr Nikolas.
In cross-examination, Mr Nikolas was asked whether he accepted that “in order to express an opinion as to what you expect a reasonable builder to have done to avoid defects”, the “starting point” is “to look at the terms and the conditions of the building contract to look at what the builder was engaged to build”. Mr Nikolas acknowledged that this “can be a starting point” (emphasis added), but said that he did not “have a yes/no answer”. (It should be noted that it is common ground that there is no written document recording the terms of the Bellevue Agreement.)
Mr Nikolas was subsequently asked about the first defect addressed in his report concerning the installation of a waterproof membrane system. He rejected the proposition that the nature of the waterproof membrane system to be installed would typically be specified in a building contract, and said that the extent to which such a system would be specified in some drawing or design would vary “project by project”.
Mr Nikolas was then asked the following questions regarding paragraph [9.2.4.4] of his report, in which he expressed the view that the “builder did not ensure that there was a stepdown with a cross cavity flashing at the External eastern wall at the driveway/wall junction aligned with the external skin of the walls to prevent water ingress at the base of the wall”:

I have determined that STM123 No. 6 is liable to TC Build for unpaid costs and margin in respect of the O’Brien St Project in an amount of $354,736.34.
STM123 No. 6 sought to set-off against this liability a judgment debt which has been assigned to it in the amount of $127,682.14.
The relevant background may be briefly stated:
STM123 No. 8 and TC Build were parties to proceedings in the NSW Civil and Administrative Tribunal (NCAT) relating to defective work performed by TC Build during the construction of the Captain Pipers Project;
on 29 July 2024, NCAT made an order for costs against TC Build in connection with a works order made against TC Build, in the amount of $127,682.14;
STM123 No. 8 sought to enforce this costs order by registering it as a judgment debt;
on 29 July 2025, the District Court of NSW entered a judgment debt against TC Build in respect of the first costs order in the sum of $127,682.14 (Judgment Debt);
on 6 March 2026, TC Build went into liquidation;
on 7 May 2026, by way of a Deed of Assignment, STM123 No. 8 assigned its legal and beneficial interest in, and rights in relation to, the Judgment Debt to STM123 No. 6; and
on 10 May 2026, notice of this assignment was given to TC Build.
STM123 No. 6 submitted that the Judgment Debt and the relief sought by TC Build in respect of the O’Brien St Project “are so closely connected that it would be unconscionable to allow TC Build to insist on its legal rights without first accommodating STM123 No. 6’s … countervailing legal rights via equitable set-off”. However, STM123 No. 6 did not identify or explain the basis on which it was asserted that there was such a “close connection” between:
a judgment debt against TC Build in respect of a costs order in NCAT proceedings relating to the Captain Pipers Project that was constructed for STM123 No. 8; and
a liability on the part of STM123 No. 6 to pay an amount of costs and margin to TC Build pursuant to the terms of the contract in respect of the O’Brien St Project;

Further, when asked to provide such an explanation in closing oral address, Senior Counsel for the Defendants/Cross-Claimants responded that her clients relied on their closing written submissions (which were silent on this issue).
I am not satisfied that there is any such close connection between the Judgment Debt and the liability that I have found to be owing to TC Build in respect of the O’Brien St Project.
In any event, the assignment of the Judgment Debt occurred at a time when TC Build was in liquidation. The relevant date for ascertaining whether there are mutual debts, mutual credits or other mutual dealings between an insolvent company and another person for the purposes of s 553C of the Corporations Act is the date of liquidation of the company: Day & Dent Constructions Pty Ltd (in liq*) v North Australian Properties Pty Ltd (prov* liq apptd*)* (1982) 150 CLR 85 at 98 per Mason J; [1982] HCA 20; and Jones as Liquidator of SBH Australia Pty Ltd (in liq*)* v Cummins [2018] NSWSC 606 at [58] (White J).
The object of set-off in liquidation is to do substantial justice between the parties, and this object requires that the operation of set-off be confined within limits which protect the creditors of the company in liquidation from being disadvantaged by allowing a set-off, in circumstances where debts, credits or other dealings have not been genuinely mutual as a matter of substance, including where, after the appointment of a liquidator, a debtor of the company has bought up liabilities at a discount for the purpose of setting them off against the debtor’s own indebtedness: Gye v McIntyre (1991) 171 CLR 609 at 618-619 (per curiam); [1991] HCA 60. The notion of mutuality so understood and based on acts and dealings before liquidation is crucial to the protection against post-liquidation dealings: Morton as Liquidator of MJ Woodman Electrical Contractors Pty Ltd v Metal Manufactures Pty Limited (2021) 289 FCR 556; [2021] FCAFC 228 at [163]-[164] per Allsop CJ (with Middleton and Derrington JJ agreeing).
For those reasons, I reject STM123 No. 6’s claim to set off the Judgment Debt against its liability to TC Build for unpaid margin and costs in respect of the O’Brien St Project.

The Plaintiffs/Cross-Defendants admitted that the work on the Curlewis St Project (Curlewis Work) was “construction work” within the meaning of pt 4 of the DBPA, but pleaded that the Curlewis St Project “was a commercial building which falls outside the scope of the DBPA”. The Plaintiffs/Cross-Defendants did not advance any written or oral submissions in support of this contention. As the Defendants/Cross-Claimants submitted, there is nothing in the definition of “building”, “building work” or “construction work” to indicate that s 37 has no application to commercial buildings.
In their written and oral submissions, the Plaintiffs/Cross-Defendants focussed primarily on the issue whether Mr Cull was a “person who carrie[d] out construction work” within the meaning of s 37(1) of the DBPA.
Section 36 provides that “construction work” includes “supervising, coordinating, project managing or otherwise having substantive control over the carrying out of”, relevantly, “building work”.
The Plaintiffs/Cross-Defendants submitted that the only person who carried out construction work on the Curlewis St Project was the corporate entity which was contracted to carry out, and did carry out, that work (which I have found to be TC Co); and that s 37 of the DBPA does not permit the piercing of the corporate veil in order to impose a duty of care on an individual who was supervising or coordinating or project managing the work being undertaken by the corporate entity.
The Plaintiffs/Cross-Defendants acknowledged that this submission was contrary to the decision of Stevenson J in Boulus Constructions Pty Ltd v Warrumbungle Shire Council (No 2) [2022] NSWSC 1368.
In that case, his Honour observed (at [39]-[50]) that the DBPA defines the term “practitioner” as meaning “a design practitioner, principal design practitioner, professional engineer, specialist practitioner or building practitioner” and, in turn, defines each of those constituent terms. For example, a “building practitioner” is defined to be “a person who agrees under a contract or other arrangement to do building work” or “if more than one person agrees to do building work, a person who is the principal contractor for the work”. In contrast, the term “person” is not defined in the DBPA (and, in particular, “person” is not defined to mean “practitioner”).
Against that background, his Honour concluded that the use of the word “person” rather than “practitioner” in s 37 of the DBPA was a deliberate legislative choice and was inconsistent with reading down the language of that provision to a person acting “in their capacity as a practitioner” or a person acting “in their own capacity” (at [60]-[61]):

Having regard to those matters, I reject the Plaintiffs/Cross-Defendants’ submission that s 37 of the DBPA is incapable of application to Mr Cull.
Mr Cull was the project manager on the Curlewis St Project from around 26 November 2020. At the time he took over the role of Project Manager, the demolition of the existing property on the site had been completed and the site was being excavated.
According to TC Build’s job description for the role of “Project Manager” which was current at the time of the Curlewis St Project (being the version dated March 2019), the Project Manager was responsible for:
“managing, overseeing and monitoring all project activities to ensure work undertaken meets design specifications and quality requirements, OH&S and environmental obligations, and is completed within the programmed project deadlines, quality and budget”;
“co-ordinating all information from all Consultants involved on the Project such as Architect, Structural Engineer, Services Engineer, Access Engineer, etc and ensur[ing] that the BCA requirements are complied with”;
“reviewing all drawings, such as Building Services Drawings and Structural Drawings, against the Architectural Drawings”; and
ensuring “[a]ll the works are carried out in accordance with the requirements of the Head Contract”.
Although there was a separate “site manager” for the Curlewis St Project – namely, Mr Neil O’Brien – SafeWork NSW was informed, in the Section 155 Response, that “Mr Cull, as the Project Manager of this Site take[s] a ‘hands on’ approach to verify and monitor that the supervisors on site are performing their roles”.
Having regard to those matters, I am satisfied that Mr Cull was, from 26 November 2020, supervising, coordinating, or project managing the work on the Curlewis St Project or otherwise had substantive control over the carrying out of that work. It follows that he was a person carrying out construction work on that Project and, as such, owed to Blank Super, as the owner of the Curlewis St property, a duty, pursuant to s 37(1) of the DBPA to exercise reasonable care to avoid economic loss caused by defects in or related to the building for which the work was done, or arising from the construction work.
It should also be noted that the Plaintiffs/Cross-Defendants did not advance any submission that the releases contained in the Deed of Settlement and Release that was subsequently entered in relation to the Curlewis St collapse (see paragraph [629] below) extended to Mr Cull personally.

Mr ElTantawy observed, from photographs of the site, that the builder “commenced demolition work without providing any kind of shoring, underpinnings, or bracing of the foundation soil for the neighbouring building at 19 Curlewis Street” and “evidently over-excavated under the neighbour’s footpath”.
Mr ElTantawy further observed that the builder “carried out a poor attempt to support the foundation soil of the neighbour[ing] building at 19 Curlewis St by placing plywood panels hard against the vertical excavation of the loose sand foundation soil and laterally bracing them using inclined props that are supported by timber beams placed against metal rods which are embedded into the sand soil”. Mr ElTantawy expressed the view that this was “poor practice” and was “not structurally adequate to provide lateral support for the neighbouring foundation soil”. A “suitable shoring and bracing system” would have included “proper structure (usually reinforced concrete pile or metal corrugated sheet) embedded into the foundation soil [at a] certain depth that could provide enough passive pressure to overcome the active pressure from the neighbouring building structure side”. No such system was put in place. Mr EITantawy further explained that the loss of the foundation soil under the building structure foundation system of the neighbouring property caused local failure of that foundation system and led to the partial collapse of the eastern side of that building structure.
Mr ElTantawy expressed the following conclusions:
“the consultant team, by way of design drawings and investigation reports, provided clear advice to the builder to provide suitable and engineered shoring, underpinning, or bracing system to support the neighbours’ building structures”;
the builder “had ample information to understand the risks associated with the excavation works and provide suitable ways of protecting the neighbouring building structures including the closest building structure at 19 Curlewis St”;
in addition, during the demolition work and construction of the screw piles, the builder “had ample evidence of the significant structural deterioration of the neighbouring building structure at 19 Curlewis St”;
the builder “overlooked the significant structure cracking and settlement caused by the unauthorised vertical excavation against all the engineering advice provided in the structure design drawings and the geotechnical report”;
the collapse of the eastern wall and foundation system of the building structure at 19 Curlewis St is a direct result of the builder’s actions during the construction of the [Curlewis St Project]”; and
the risk of collapse at the neighbouring building at 19 Curlewis St:

“the methodology that the geotechnical engineers addressed was not adopted at the Site” and, in particular, TC Co “did not consider the geotechnical recommendations because [Mr Cull] made the decision to go ahead with BMC [a sub-contractor] who applied a different methodology”.
Having regard to those matters, I am satisfied that the structural drawings and geotechnical report referred to in Mr ElTantawy’s report were provided to TC Co. Further, I find that Mr Cull was likely aware of this material and, in particular, was aware of the recommendations in the geotechnical report, but did not consider those recommendations because he had made the decision to go ahead with another firm, BMC, which applied a different methodology.
It follows that the assumption made in Mr ElTantawy’s report regarding the provision of this material to the builder, TC Co, has been established. No other challenge was made to Mr ElTantawy’s opinions in closing submissions.
Having regard to those matters, I accept Mr ElTantawy’s opinions regarding the information available to “the builder” on the Curlewis St Project, and the steps that a reasonable “builder” would have taken having regard to that information (see paragraph [602] above). Further, I am satisfied that those opinions regarding the “builder” are applicable to Mr Cull, by reason that he was supervising or project managing the work on the Curlewis St Project, and by reason that this same information was available to him.
As set out above, the Section 155 Response stated that a decision was made not to implement the recommendations in the geotechnical report and instead “to go ahead with BMC who applied a different methodology”. In particular, Mr Cull confirmed in cross-examination that he engaged BMC to install a jet grout block wall at the site of the Curlewis St Project, which included testing the use of the jet grout wall to see how it would perform.
It was not put to Mr ElTantawy in cross-examination that the measures taken by BMC were adequate, or that BMC’s solution was an acceptable alternative to the recommendations made by the geotechnical engineer.
Mr Cull acknowledged in cross-examination that the structural engineers who were engaged by Blank Super indicated to TC Build that they were not sure that the jet grout block wall would be suitable for shoring, expressing concerns that:
having a jet grout block wall going to a depth of 3.5 metres “might stretch the ability of the grout injection”; and
having regard to the clay silty sands at the site, the jet grout block wall would not be sufficient to shore the neighbouring property.
The person from BMC who was responsible for this work, Mr Graeme Howson, subsequently sent a number of emails to Mr Cull raising concerns about the jet grout block wall.
On 29 November 2020, Mr Howson advised Mr Cull that:
the jet grout block wall retaining the neighbouring property was “not in line with usual engineering standards”, as “initial installation was difficult with limited access” and BMC “also encountered heavy voiding caused by uncompacted sand”;
BMC could not “pump a mass volume of grout into the ground when less than 2mtrs from neighbo[u]ring structure as major subsidence will occur”, and evidence of this risk “was actually noticed during installation when the lady [at 19 Curlewis St] had difficulties with her front door”;
“Voiding was also encountered yesterday [28 November 2020] in an attempt to remediate the grout as cutting is required along the line to make room for new structure”; and
“I recommend an engineer be engaged to inspect before attempting to cut” or alternatively, “cut small sections at a time and incorporate extra shoring”.
On the following day, 30 November 2020, Mr Howson again wrote to Mr Cull about his concerns regarding the jet grout block wall, stating that he had had a “2nd night without sleep”. Mr Cull replied that he was “confused” as he “thought it was all ok and just needed a few spots fixed up”, but Mr Howson replied that although BMC had “beefed up to the best of our ability”, BMC was “still encountering voiding”.
Notwithstanding those matters, Mr Cull confirmed in cross-examination that he did not, in accordance with BMC’s advice, engage an engineer to inspect the jet grout block wall before attempting to cut the grout. Nor did he engage a geotechnical engineer to inspect the site in light of the matters raised by BMC regarding the “voiding” of soil beneath the neighbouring property.
In his affidavit of 3 July 2025, Mr Cull stated that, in November 2020, he was aware of cracking on the outside of 19 Curlewis St, and told Mr Whittington-Davis to engage an engineer to check it was safe. However, Mr Whittington-Davis denied ever receiving such an instruction, and his evidence was not challenged in cross-examination.
Mr ElTantawy gave unchallenged evidence that the attempt made by TC Co to support the foundation soil of the property at 19 Curlewis St was “poor practice” and resulted in the loss of foundation soil under the building structure foundation system of 19 Curlewis St, causing the partial collapse of that structure (see paragraph [601] above).
Further, Mr ElTantawy gave unchallenged evidence that, during the demolition work and the construction of the screw piles, “the builder had ample evidence of the significant structural deterioration of the neighbouring building structure at 19 Curlewis St” and upon observing this deterioration, the builder should “have immediately ceased construction, caused the evacuation of the residents at 19 Curlewis St, and supported the vertical excavation of the loose sand-soil at the south and western boundaries of the site of 21 Curlewis St to control the imminent risk and mitigate possible injuries”. I am satisfied that those opinions are also applicable to Mr Cull as project manager of the Curlewis St Project, particularly given that BMC warned Mr Cull that the jet grout block wall was not in line with usual engineering standards, that there was heavy voiding of the foundation soil beneath 19 Curlewis St, that this voiding continued to be encountered despite BMC attempting to address the problem, and that there was a risk of major subsidence of the neighbouring property (see paragraphs [615]-[618] above).
For the reasons given above, I find that:
a reasonable person in Mr Cull’s position who was project managing the demolition works at the Curlewis St Project would have taken steps to implement the advice, in the design drawings and geotechnical report, to provide a suitable and engineered shoring, underpinning, or bracing system to support the neighbour’s building structures;
a reasonable person in Mr Cull’s position would also have ceased works on the Curlewis St Project when warned of the risk of major subsidence and taken steps to investigate and address this risk;
the risk of collapse of the neighbouring property, if the steps in paragraphs (1) and/or (2) above were not taken, was foreseeable;
Mr Cull failed to take the steps in paragraphs (1) and/or (2) above; and
the failure to take such steps led to the partial collapse of the neighbouring property at 19 Curlewis St into the site of the Curlewis St Project.
It follows that Blank Super has established that Mr Cull breached his duty of care pursuant to s 37(1) of the DBPA.

In closing written submissions, the Defendants/Cross-Claimants claimed three heads of damage resulting from the Curlewis St collapse, namely:
lost rent in the amount of $759,724, for the period from the original forecast date of completion for the Curlewis St Project (being 1 July 2021) until the revised forecast date for completion under the 2022 DA (being 14 December 2024);
costs of $260,607.36, which were incurred in obtaining approval of and commencing the Curlewis St Project; and
wasted holding costs of $4,650.84.
The claim for loss of rent was supported by the expert valuation evidence of Mr Jason Field. Mr Field’s evidence was admitted without objection, his report was not the subject of any responsive evidence from the Plaintiffs/Cross-Defendants, and he was not required for cross-examination.
Mr Field was instructed that the Curlewis St Project had involved “the development of the Property … for commercial use, with plans for a brand new, modern, three-level commercial space spanning approximately 190m2”, which “would be suitable for various uses, including corporate headquarters, office, showroom, cafe or restaurant”. Mr Field was further instructed that since the collapse of the neighbouring property, the site had been dormant for several years, resulting in the loss of rental income. Mr Field was asked to prepare a report “as to the reasonable market rent that could have been received for the Property had it been completed as planned”.
Mr Field noted in a supplementary report that, after being provided with revised plans for the Curlewis St Project, the total net lettable area for the Curlewis St Project (if completed) was 202sqm. He determined that the market rent was $1,000 per square metre (gross), and rounded the resultant “reasonable market rent” figure for the Curlewis St property (had the Project been completed) to $200,000 per annum gross (excl GST), which he applied as an average across the dates of valuation.
Applying a rent of $220,000 per annum (incl GST) for the period from the expected date for the practical completion of the original Curlewis St Project (namely, 1 July 2021) to the expected date for practical completion of the project that was the subject of the 2022 DA (namely, 14 December 2024) produced a total figure of $759,724.00. The Defendants/Cross-Claimants claimed that this amount of lost rent represented damage suffered as a result of Mr Cull’s negligence.
I do not accept this claim.
The partial collapse of 19 Curlewis St undoubtedly caused a delay in the Curlewis Work, not least because a Stop Work Order was immediately put in place.
However, Blank Super made no attempt to continue with the Curlewis St Project when the Stop Work Order was revoked in July 2021.
That appears to be due to the fact that, shortly after this occurred, Blank Super acquired 19 Curlewis St and Mr Blank acquired 17 Curlewis St. At this point in time, Blank Super could have either remediated or redeveloped 19 Curlewis St (and, if necessary, 17 Curlewis St), and could have continued with the Curlewis St Project at 21 Curlewis St. However, Blank Super decided instead to pursue the 2022 DA, which sought approval for a new commercial development spanning the sites of 17, 19 and 21 Curlewis St. This new development was 850sqm, which was more than four times larger than the original Curlewis St Project (202sqm).
Consent for the 2022 DA was obtained in December 2022, and the forecast date for practical completion of the new project was 14 December 2024.
Given those matters, I am not satisfied that the expected completion date for the development at 21 Curlewis St was delayed from July 2021 to December 2024 by reason of the collapse of 19 Curlewis St. Instead, much of that delay was attributable to Blank Super deciding, in its own commercial interests, to use the opportunity that was provided by the purchase of 17 and 19 Curlewis St, to abandon the original project at 21 Curlewis St, and to make a development application for, and to construct, a much larger commercial building across the three lots.
There is no evidence from the Defendants/Cross-Claimants as to how long (following the lifting of the Stop Work Order) it would have taken to perform works on the site so as to enable the original Curlewis St Project to be continued (if Blank Super had determined to proceed with that course), or as to what the revised date for practical completion would have been in such a scenario.
In those circumstances, I am not satisfied that Blank Super has established that any delay was suffered as a result of the collapse at Curlewis St, other than the period of the Stop Work Order (which was in place for 228 days from 10 December 2020 to 26 July 2021). Any delay in the development beyond that point in time was due to Blank Super fundamentally changing its plans for the site, no doubt because it considered it commercially advantageous to do so.
In their closing written submissions, the Defendants/Cross-Claimants calculated, based on Mr Field’s expert evidence, that rent at a rate of $220,000 (incl GST) per annum equated to $602.00 per day. Applying this amount for a period of 228 days results in a total figure of $137,256.00. I find that Blank Super suffered a loss of rent in this amount by reason of the collapse at Curlewis St and the consequent imposition of the Stop Work Order, which resulted in a cessation in the works on the site for the period of that Order.
The remaining heads of loss claimed by the Defendants/Cross-Claimants can be addressed more briefly.
Mr Blank deposed that he had “incurred costs totalling $260,607.36 which were expended in approving and commencing the development of the site”. He provided an itemised list of those expenses, and exhibits copies of the relevant invoices to his affidavit of 8 November 2024. The costs identified by Mr Blank generally relate to matters such as planning services, design services and other consulting services and costs relating to the development application for the original Curlewis St Project.
I do not accept Blank Super’s contention that these costs represent loss and damage suffered by reason of the collapse at Curlewis St. Insofar as these costs have been wasted, it is because Blank Super decided, following the opportunity to purchase 17 and 19 Curlewis St, to abandon the original Curlewis St Project and to proceed with an entirely different development.
Although this decision was one that was made consequent upon the collapse at Curlewis St and the events which followed that collapse, it was not a decision that was caused by the collapse. It was instead a decision that was taken by Blank Super, likely in circumstances where it formed the view that the loss of the costs previously expended on the original Curlewis St Project was an acceptable price to pay for the prospect of obtaining greater profits from a much larger development.
Finally, Mr Blank gave evidence that Blank Super has incurred recurring costs in respect of 21 Curlewis St which would have ceased if the original Curlewis St Project had been completed and leased as intended. Mr Blank deposed that these costs include Sydney Water quarterly rates and usages and Waverly Council quarterly rates and charges. The total of the charges set out in Mr Blank’s affidavit was $4,650.74 (this being the amount claimed by the Defendants/Cross-Claimants as “wasted holding costs”).
This claim, like the claim for lost rent, depends on the proposition that the delay in the completion of the project (at which point in time such costs would have ceased to be incurred) has resulted from the Curlewis St collapse. However, for reasons outlined above, while I accept that there was a delay by reason of the Curlewis St collapse and the consequent imposition of the Stop Work Order, I do not accept that the whole of the delay in the completion of the development can be attributed to the collapse. Instead, much of the delay is attributable to Blank Super’s decision to abandon the Curlewis St Project and undertake a different development. Accordingly, this head of loss has not been established.
For the reasons given above, I find that Blank Super suffered loss and damage in the amount of $137,256.00 as a result of the Curlewis St collapse, and therefore as a result of Mr Cull’s breach of duty under s 37(1) of the DBPA.
Blank Super is entitled to judgment in this amount.

Each of TC Build and TCBG is entitled to pre-judgment interest on the amounts which I have found to be owing by the various STM123 entities as set out in Annexures A and B (less, in the case of the Bellevue Rd Project, the rectification costs which I have determined should be set off against the liability of STM 123 No. 17 to TC Build).
Similarly, Blank Super is entitled to pre-judgment interest on the amount of $137,256.00 for which Mr Cull is liable in respect of the collapse of the Curlewis St Project.
I have not received any submissions from the parties regarding the date from which interest should be calculated. I will give the parties an opportunity to confer about the calculation of interest. I will not make orders for judgment pending the determination of this issue (which will also give the parties the opportunity to check the correctness of the calculations in Annexures A and B).
In addition, the parties asked for an opportunity to be heard in respect of costs.
I will accordingly make directions for the parties to confer and either bring in short minutes of order to give effect to these reasons for judgment (including dealing with interest and costs) or, if they are unable to reach agreement, to provide written submissions on those matters. Any outstanding issues will be dealt with on the papers, unless any party requests an oral hearing.
Accordingly, I make the following orders:
Discharge Order 5 of the orders made by Peden J on 22 April 2026.
Direct that the parties are to provide to the Associate to Nixon J, by 5:00pm on 7 August 2026, any agreed form of orders to give effect to these reasons for judgment.
Direct that, in the event the parties are unable to agree on a form of orders to give effect to these reasons for judgment (including orders as to costs), the parties are to exchange and provide to the Associate to Nixon J, by 5:00pm on 7 August 2026, the orders which each party proposes, submissions (limited to 5 pages) on those orders, and any evidence in respect of costs, indicating whether, and if so why, an oral hearing is requested to deal with the matters in dispute.

Alta Vale Residential Pty Ltd (In Liq) (Rec Apptd) v STM123 Pty Ltd

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment

Parties

Legislation Cited (16)

JUDGMENT

Introduction

Credit

Relevant Principles

Mr Cull

Mr Blank

Reissuing of invoices to Bellevue Rd Project

“Margin shuffle”

Identity of the builder

Evidence regarding payments to Hoz Construction

Conclusion

Mr Whittington-Davis

Joinder of TCBG

Misleading conduct claim

What did the parties agree regarding margin?

Relevant Facts

Projects undertaken by TC Build prior to STM123’s investment

Financial information provided to Mr Blank prior to STM123’s investment

Agreement to purchase shares

Shareholders Deed

O’Brien St Project

Communications in second half of 2019 regarding the Group’s financial position

Further investment by STM123

Additional STM123 Projects are undertaken in 2020

The “margin shuffle”

Mr Blank claims that he has been misled

Meetings on 17 and 18 August 2020

Issues for determination

Binding Agreement?

Terms of agreement?

Relevant Principles

Criticisms of accounts given by Mr Cull and Mr Blank

Evidence of other contemporaneous conversations

Surrounding circumstances

Post-contractual conduct

Memorandum of 27 January 2021

Margin tracker spreadsheets

Emails attaching margin tracker spreadsheets

No reference to solvency condition being satisfied

8% margin in budgets sent to Mr Blank

Conclusion – terms of the 18 August 2020 agreement

Was there a further amendment to the agreed margin as a result of the Reconciliation?

Background to Reconciliation Process

Reconciliation undertaken by TC Group

Reconciliation undertaken by STM123

Agreement to STM123’s Reconciliation

Conclusion

Identity of Counterparty

Relevant facts

Establishment of TC Co

Curlewis St Project

Establishment of TCBG

Jaques Ave Project

Contracting Party - Curlewis St Project

Contracting Party for the Wentworth St Project, the Fletcher St Project, the Lamrock Ave Project and the Jaques Ave Project

Claims for unpaid costs and margin up to June 2022

Calculation of Direct Costs up to June 2022

Amounts payable by the STM123 entities

Conclusion

Claim for quantum meruit

Claims arising from termination of the business relationship

Relevant Facts

Communications in course of Reconciliation

Ongoing dispute about margin

Fletcher St Project is completed and Reconciliation amount is paid

TC Build Margin Payment Claim

TCBG Payment Claims

Events in early July 2022

Transfer of shares owned by STM123