Attorney-General (NSW) (Ex rel Corporate Affairs Commission) v Australian Softwood Forests Pty Ltd

Declarations sought by the Plaintiffs

1. The Plaintiffs seek a declaration that Atlas contravened s 1041H(1) of the Corporations Act 2001 (Cth) ("Act"), providing no further information as to the nature of the contravention or of the fact that it arose in respect of one of their many claims for misleading and deceptive conduct which I addressed in the judgment. Mr Young, who made submissions for the Plaintiffs in respect of orders and costs, submits that a declaration as to a contravention of s 1041H of the Act should be made because there was a real controversy between the parties, the question is not abstract, it "vindicates the Plaintiffs in bringing the action" and it would have practical utility "in expressing the Court's disapproval of the conduct and deterring others from engaging in such conduct". I bear in mind, in that regard, that Tredmore and Ms Lili Xue succeeded in a claim for misleading and deceptive conduct under s 1041H of the Act, which is capable of being established without any fault or negligence on the part of Atlas.
2. I do not consider I should make the declaration sought by the Plaintiffs. There is authority, which the parties did not address in submissions, that the Court should not generally make a declaration, even if it has jurisdiction to do so, unless it is satisfied that the declaration sought is appropriate and that it has sufficient practical utility; or where that declaration would merely be prefatory to other relief: Neeta (Epping) Pty Ltd v Phillips [1974] HCA 18; (1974) 131 CLR 286; Attorney-General (NSW) (Ex rel Corporate Affairs Commission) v Australian Softwood Forests Pty Ltd [1979] 2 NSWLR 73 at 76 per Hutley JA (with whom Reynolds and Samuels JJA agreed); E & J Gallo Winery v Lion Nathan Australia Pty Ltd (No 2) [2009] FCAFC 47; OXS Pty Ltd v Sydney Harbour Foreshore Authority and Minister for Planning and Environment [2014] NSWSC 1284 at [6], aff'd OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120; JR Consulting & Drafting Pty Ltd v Cummings [2014] NSWSC 1700 at [11]; Coyte v Norman; Centre Capital (Newcastle) Pty Ltd v B Scorer [2016] NSWSC 142; PW Young, C Croft and ML Smith, On Equity (Lawbook Co, 2009) at 1084. In E & J Gallo Winery v Lion Nathan Australia Pty Ltd (No 2) above, the Full Court of the Federal Court held there was no utility in the relevant declaration where it would merely reflect a corresponding finding in the judgment. That case recognises that the fact that the Court has found a particular matter does not require that a declaration be made as to that finding, and that any declaration which is to be made, to reflect matters determined in the judgment, would also need to be expressed with precision. Here, the declaration sought by the Plaintiffs is no more than a step on the way to the damages sought by the Plaintiffs. Even if a declaration that properly reflected the basis of my principal judgment would be justifiable, the present form of declaration sought by the Plaintiffs does not do so and is therefore not appropriate.

Quantification of damages and interest

1. The Plaintiffs seek orders that Atlas pay Tredmore an amount of $2 million and pay Ms Lili Xue an amount of $800,000 pursuant to s 1041I of the Corporations Act. Mr Young did not address, in submissions, the basis on which the principal and interest could properly be calculated in this way. Mr Knowles, who made submissions for the Defendants, submits that judgment for Tredmore and Ms Lili Xue should be quantified by deducting the amounts received by them as a return on the investment from the principal of the investment, and then awarding interest under s 100 of the Civil Procedure Act 2005 (NSW) to the balance. It seems to me that that approach is consistent with my findings in the principal judgment and the "no transaction" case brought by Tredmore and Ms Lili Xue, because, had they not invested in the QCAX Australian Property Income Fund II ("Steller Fund"), they would neither have lost the amount of the principal invested nor received the returns on that investment.
2. Orders cannot be made in the form proposed by the Plaintiffs, because they do not reflect the conclusion that I reached in the principal judgment, or fairly reflect the loss which Tredmore and Ms Lili Xue suffered. In paragraph 250 of the primary judgment, which I have quoted above, I had observed that: "Tredmore's and Ms Lili Xue's damages are quantified as the amounts that they invested in the two investments, being $2 million and $800,000 respectively, on a "no transaction" case, less the substantial return they in fact made from their investments in the Steller Fund of nearly $900,000 (or a lesser amount attributable to the two investments in which they have succeeded), paid out between June 2017 and March 2019. The amount of that return is identified in Ms Zhuang's evidence (Zhuang 10.7.20 [98]), although it will need to be allocated to the relevant investments and between Tredmore and Ms Lili Xue in making orders." [emphasis added]
3. The form of order sought by the Plaintiffs disregard the words in bold in that finding by making no deduction for the substantial returns made by Tredmore and Ms Lili Xue on an ongoing basis from their investment, in respect of the amount recovered, and seeking to treat those returns only as an offset against interest. They also do not reflect the economic substance of the transactions, since they have the result that interest would be paid on the full amount invested by Tredmore and Ms Lili Xue, notwithstanding the fact that they had received significantly above market returns, which could fairly be set-off against the amount invested in calculating their loss. I will not make orders in that form. I will make the orders proposed by the Defendants, which reflect the conclusion I reached in the principal judgment by deducting the return on the investment from the amount invested to determine the principal repayable.
4. The Plaintiffs seek interest at the pre-judgment interest rate under s 100 of the Civil Procedure Act on the amounts of the principal invested, from which, as I noted above, they have not deducted the returns made by Tredmore and Ms Xue on their investment. That approach would overstate the amount of interest payable, because Tredmore's and Ms Lili Xue's loss would be overstated by that calculation. The Plaintiffs then seek to deduct, from the overstated amount of interest claimed, the returns actually received. That approach again has the effect of overstating their recoveries. I will not make orders in that form. I will make the orders sought by the Defendants, which allow interest after deducting the amount of returns on the investment. I appreciate that return could possibly have been calculated more precisely, by determining the amount of loss as it was reduced by returns on the investment from time to time and allowing interest on that amount for the relevant periods. That approach would have accounted for the benefit to the Plaintiffs in receiving the returns over time. However, I cannot take that approach where neither party suggested it should be taken and the calculations necessary would be too complex for the Court to undertake for itself without the parties' assistance.

Costs

1. The Court has discretion to determine by whom, to whom and to what extent costs are to be paid, and costs will ordinarily follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs, in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The Plaintiffs here succeeded in one aspect of their case and failed in other aspects of their case which took up significant hearing time.
2. The Plaintiffs submit that Atlas should pay the First and Third Plaintiffs' costs of the proceedings. Mr Young submits that, as I noted above, UCPR r 42.1 contemplates that costs will follow the event unless it appears that some other order should be made. He submits, and I accept, that the onus is on the losing party to establish the basis for a departure from the usual costs rule in UCPR r 42.1: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10]. Mr Young submits that, here, the "event" was that the Plaintiffs successfully recovered most of their claimed loss. I do not accept that submission where a substantial part of Tredmore's claim failed, and that claim absorbed a substantial part of the hearing time, and the alternative bases on which the Plaintiffs sought to recover the claimed loss also failed, similarly after absorbing a substantial part of the hearing time.
3. Mr Young also submits, referring to case law including Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15], that the usual circumstance in which a Court will deprive the successful party of the costs relating to an issue on which the successful party lost is when the issue is clearly dominant or separable. Mr Young submits that, in a "no transaction" case, the Plaintiffs would be successful in relation to the relevant transactions, or they would not; however, as he acknowledges, they were successful in two transactions, but unsuccessful as to a third, and that third transaction took up a substantial part of the hearing time, as did the alternative claims on which they failed. Mr Young submits that little additional time was taken at the hearing relating to Tredmore's investment of $2 million in the Steller Fund on 8 May 2017 ("First Tredmore Investment"), as to which it failed, and that was not a "dominant part" (or, implicitly, a separable part) of the case in evidence or argument. I do not accept that submission, as a matter of fact, where that claim raised discrete issues and substantial time was spent in cross-examination as to issues of fact and credit which arose only in respect of the oral representation on which it was based, and Ms Lijuan Xue's reliance on it, and those issues were distinct from those which arose in respect of the later representation relied upon in respect of Tredmore's investment of a further $2,000,000 with Atlas in the Steller Fund on 24 May 2017 ("Second Tredmore Investment") and Ms Lili Xue's investment, a critical part of which was recorded in writing.
4. Mr Young submitted that the Plaintiffs' unconscionable conduct case was not a dominant aspect of the proceedings, although he acknowledged that it may be treated as a separate issue where it was brought under separate statutory provisions. I also note that it required a substantial amount of additional evidence to be led, and substantial additional cross-examination to occur, which would not have been required in respect of the misleading and deceptive conduct case. Mr Young submits that there was relatively little additional time taken up on that case. I do not accept that proposition, as a matter of fact. Mr Young also submits that a "reduction" in the Plaintiffs' costs orders against Atlas arising from that matter is not warranted and I also do not accept that submission.
5. Mr Young also addresses the length of the hearing, which he recognises took fourteen days rather than the six days for which it was listed and seeks, surprisingly, to attribute the length of the hearing to the manner in which the Defendants conducted their defence of the case and the nature of Ms Zhuang's evidence. Mr Young advances a criticism of the fact that the Defendants sought to lead evidence to clarify the meaning of the word "anquan" in Mandarin, notwithstanding that the Court had invited the parties to do so, and that issue was plainly important in reaching a just determination of the proceedings. Mr Young implicitly also criticises Ms Zhuang's evidence in that respect, notwithstanding that I had found in the principal judgment that Ms Zhuang had properly raised that matter in cross-examination. Mr Young submits that the Plaintiffs ought not to be "deprived of their costs" associated with the extra time and costs arising from the expert translation evidence read after 12 January 2022. The costs attributable in respect of that matter will be a question for a costs assessor in giving effect to the orders that I make below.
6. The Defendants submit that there should be no order as to the costs of the Plaintiffs' claim against Atlas, with the intent that each party bear its own costs. Mr Knowles submits that: "Each case must be decided on its own on its own facts: Phonographic Performance Company of Australia Limited v Copyright Tribunal of Australia [2019] FCAFC 192 at [6]. However, an accepted category of case justifying departure from the ordinary position is where the successful party was unsuccessful on issues that were discrete, especially where those issues caused the parties to incur significant additional costs: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]; Anchorage Capital Partners Pty Limited v ACPA Pty Ltd (No 2) [2018] FCAFC 112 at [22]-[23]. Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158 at [255] citing Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36] and Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22."
7. There are also other cases which address this issue, and I have here drawn on my summary of that case law in Lukaszewicz v Polish Club Limited [2019] NSWSC 860 at [2]ff and in Harpley v Australian Lending Investment Pty Ltd [2019] NSWSC 1810 at [30]ff. In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38], the Court of Appeal noted that, in relation to trials, it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party did not succeed took up a significant part of the trial, either by way of evidence or argument. I also addressed the circumstances in which costs could reflect a mixed result of proceedings in Re Metal Storm Ltd (subject to deed of company arrangement) [2014] NSWSC 1170 at [47] as follows: "In Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38], the Court of Appeal noted that, where there are multiple issues in a case, the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. However, the Court also pointed to several circumstances in which a different approach might be justified, and noted (at [38]) that: "Whether an order contrary to the general rule of costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the Court, which powers should be liberally construed." Similarly, in Corbett Court Pty Ltd v Quasar Constructions (NSW) Pty Ltd [2008] NSWSC 1423 at [28]-[31], in a passage recently approved by McDougall J in The Owners - Strata Plan 61162 v Lipman [2014] NSWSC 622 at [241], Hammerschlag J referred to the general rule and to cases where its application may be displaced. In particular, the Court may deprive a successful party of the costs relating to an issue on which it lost when that issue is clearly dominant or separable: Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [64]; Doppstadt Australia Pty Ltd v Lovick & Son Development Pty Ltd (No 2) [2014] NSWCA 219 at [17]. Where there has been a mixed outcome in proceedings, and costs should be apportioned as between different issues, the Court will generally take a relatively broad brush approach, largely as a matter of impression and evaluation: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22."
8. In Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 at [6]-[7], the Court of Appeal in turn noted that: "Section 98 of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion with respect to costs. Under r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) the general rule is that the Court is to order that costs follow the event. The "event" may be characterised in more than one way. Generally the "event" refers to the result of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Sons Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15] per Ward, Emmett and Gleeson JJA. Where there has been a mixed outcome in the proceedings, and it is appropriate to entertain the process of apportioning costs as between different issues in the proceedings, in general such an exercise will be carried out on a relatively broad brush basis, and largely as a matter of impression and evaluation by the Court: Doppstadt at [19]; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [36]; Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 at 22. The relevant principles for the determination of costs on an issue-by-issue basis were stated in Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38] per Beazley, Ipp and Basten JJA: "Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed: Waters v P C Henderson (Aust) Pty Ltd (Court of Appeal, 6 July 1994, unreported). In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument: Sabah Yazgi v Permanent Custodians Ltd (No 2) [2007] NSWCA 306 at [24]. A similar approach is adopted on appeal. If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue: Sydney City Council v Geftlick & Ors (No 2) [2006] NSWCA 374 at [27]. Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed: State of New South Wales v Stanley [2007] NSWCA 330 at [18] per Hislop J (with whom Beazley and Tobias JJA agreed). A separable issue can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter: James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]. Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation: James v Surf Road Nominees Pty Ltd (No 2), citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 272.""
9. In Mobis Parts Australia Pty Ltd v XL Insurance Company SE (No 2) [2019] NSWCA 19 at [5], the Court of Appeal noted that: "There is no issue as to the relevant principles. The discretion under Civil Procedure Act 2005 (NSW), s 98 is ordinarily exercised by requiring that "costs follow the event": Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 42.1. This default position was historically understood to mean (so as to preserve the practice, where any issue was tried with a jury, that those costs followed the outcome of that event) "that the costs of the several issues went to the party who succeeded on them respectively, while the general costs went to him who on the whole succeeded on the action" … But more recent authority favours the award of the costs of proceedings to the party successful overall without any differentiation as to issues, at least "unless a particular issue or group of issues is clearly dominant or separable" … And the costs arising from such issues have more readily been apportioned where the party successful overall is the plaintiff ..." [citations omitted]
10. Mr Knowles submits that, rather than Atlas being required to pay one-third of the Plaintiffs' costs of the proceedings, reflecting the preliminary view set out in paragraph 253 of my principal judgment, it should not be required to pay the Plaintiffs' costs at all. He supports that result on the basis that Tredmore was unsuccessful in relation to that part of its claim relating to the First Tredmore Investment and Ms Xue's unconscionable conduct claim failed and took up a considerable amount of hearing time, including in the cross-examination of Ms Xue and Ms Zhuang. I accept that assessment of the amount of time taken up in respect of that matter. Mr Knowles submits that that the Plaintiffs' claim in relation to the oral representations referable to the First Tredmore Investment also failed and that also took up a significant amount of hearing time. I also accept that was the case.
11. Mr Knowles also submits that the Plaintiffs' pleading introduced unnecessary complexity and delay, where the Plaintiffs were unsuccessful on all but one basis on which the pleaded representations were alleged to be falsified, and some of the matters on which they failed took up substantial hearing time, a proposition which I accept. Mr Knowles also submits that the cross-examination of Ms Zhuang was, at times, irrelevant or repetitive. I express no view as to that matter where it is not necessary to do so to decide the question of costs. Mr Knowles also submits that the Court can take account of adverse credit findings against Ms Xue in exercising its discretion as to costs: Jones v Sutton (No 2) [2005] NSWCA 203 at [64]. I do not consider it necessary to do so in order to reach a just determination as to the question of costs. Mr Knowles also submits that unnecessary costs were incurred on expert evidence, where neither Mr McMaster's nor Mr Barnes' report contributed to the Plaintiffs' partial success. I give little weight to that matter, where the expert evidence was not irrelevant, and the extent to which it contributed to the outcome could not be known in advance. Mr Knowles also addresses the position in respect of amendment applications and objections, which I also do not consider it necessary to address.
12. It seems to me that that order sought by the Defendants as to Atlas' costs is not properly made, where it would not recognise the extent to which Tredmore had succeeded against Atlas, in respect of the Second Tredmore Investment, and Ms Lili Xue had succeeded against Atlas in respect of her investment. The order for costs should recognise that success, as well as the Plaintiffs' failure in respect of other substantial claims. A costs order should therefore not be made in the form sought by either the Plaintiffs or the Defendants in respect of the case against Atlas.
13. Possibly because each party sought a more extreme result, which I have not accepted, neither party sought to support the order foreshadowed in my principal judgment that Atlas pay a proportion of Tredmore's and Ms Lili Xue's costs of the proceedings, which would have simplified and reduced the costs of an assessment. Where neither party supports such an order, I do not consider I should make it. I will instead leave a costs assessor to determine the costs properly and reasonably recoverable by Tredmore and Ms Lili Xue against Atlas referable to their successful misleading and deceptive conduct claim in respect of the Second Tredmore Investment and Ms Lili Xue's investment. In doing so, I expect that costs assessor will have regard to the fact that the Plaintiffs only succeeded on one basis of that claim (as recorded in paragraphs 119 and 195 of the principal judgment) and to the difficulties with the length of the proceedings noted in the principal judgment. An assessment of those costs will be complex and possibly costly, but there seems to me to be little alternative to it given the parties' respective positions.
14. Mr Young submits the Plaintiffs must pay Ms Zhuang's costs of the unsuccessful claim against her, as agreed or assessed. Mr Young accepts, with a qualification, that the Plaintiffs should pay the costs of their unsuccessful claim against Ms Zhuang, but seek to limit to those costs to those which are not "referable to the case" involving Atlas. Mr Young submits that the case against Ms Zhuang was not a dominant aspect of the case. It is not necessary to determine that question, because the Plaintiffs failed in their case against Ms Zhuang, and the fact that they should pay the costs of that case follows from the usual position that costs follow the event. To the extent that any question arises from the fact that Atlas and Ms Zhuang had common legal representation, or as to the amount of time in the case that was referable to the case against Ms Zhuang, that is a matter that can fairly be left to be addressed by an assessor in determining the question of costs, if it cannot be agreed between the parties. Mr Young submits that it would be unjust if Atlas' costs spent in its unsuccessful defence could incorrectly be included in the costs recoverable by Ms Zhuang against the Plaintiffs. That issue does not arise, where the question of the proper attribution of costs as between the parties will also be dealt with in an assessment.
15. Mr Knowles responds, and I accept, that: "The Plaintiffs seek to qualify the order for costs in favour of Ms Zhuang by limiting the recoverable costs to those costs "which are not referable to the case involving [Atlas]". That qualification should not be included in the Court's orders. In accordance with ordinary principles, a successful defendant is entitled to a proportionate share of any common legal costs: see King Network Group Pty Ltd v Club of the Clubs Pty Ltd (No 2) [2009] NSWCA 204 at [25]-[35]."
16. The limitation sought by the Plaintiffs of the costs order in favour of Ms Zhuang to those costs which are not "referable to the case" involving Atlas is not appropriate, any more than an order would have been appropriate that Atlas pay the First and Third Plaintiffs' costs of the proceedings that are not attributable to the case against Ms Zhuang. Each of those limitations would prioritise one aspect of the case where there is no basis on which to do so, since both aspects of the case were brought. Absent agreement from the parties, it will be a matter for a costs assessor to attribute the costs of the proceedings as between the case in which Tredmore and Ms Lili Xue succeeded against Atlas, and the case in which they failed against Ms Zhuang, and address the position as to common costs. I will not make an order in the form sought by the Plaintiffs.
17. The Defendants also seek an order, for the avoidance of doubt, that all costs dealt with by previous costs orders made in the proceedings are maintained. That order should properly be made, where there were multiple interlocutory disputes which were the subject of separate orders as to costs.

Orders necessary to reflect the Plaintiffs' "no transaction" case

1. Atlas initially sought an order noting the parties' "agreement" that Atlas as trustee of the Steller Fund may redeem units in that fund issued to Tredmore on or around 26 May 2017 and to Ms Lili Xue on or about the same date without payment of consideration to them. The redemption of those units was the necessary implication of the Plaintiffs' "no transaction" case in respect of those units, because the Plaintiffs could not both recover compensation on the basis that the relevant investment would not have occurred, and retain the investment and any future returns from it. At my request, my Associate sought confirmation from the Plaintiffs that such an agreement existed. They then advised that there was no such agreement, and made no offer as to the redemption of the units, with the result that the Plaintiffs sought both compensation to put them in the position they would have been had they not invested in the fund and, inconsistently, to retain any continuing value of their investment in the fund and any future returns from it.
2. After the Plaintiffs took that position, the Defendants' solicitors responded by identifying an alternative approach that would give effect to the Plaintiffs "no transaction" case, namely that conditions be imposed under s 86(2) of the Civil Procedure Act. Before I became aware of the alternative approach proposed by the Defendants' solicitors, I also sought further submissions as to whether these developments had the consequence that the Plaintiffs were resiling from their "no transaction" case and if so, how that would affect the quantification of damages, the outcome of the proceedings, and costs. It is not necessary to address those submissions further, where the Defendants propose a condition reflecting the nature of the Plaintiffs' case, and the Plaintiffs' position is that, in effect, they were simply advising that they had not agreed that their units be redeemed. It is also not necessary to address further, unpleaded, claims raised in the Plaintiffs' submissions in relation to this matter. It is not necessary to address any wider change in the Plaintiffs' position, where the Plaintiffs do not contend it has occurred. The course that will better promote the just resolution of the proceedings is not to permit the Plaintiffs to resile from their conduct of the hearing (which I recognise they say they were not seeking to do) and to impose a condition of the kind proposed by the Defendants. I have amended that condition, given these developments, to make clear that compensation should only be paid on the Plaintiffs' irrevocably consenting to the redemption of their units at the time of payment, in the usual manner of the simultaneous completion of a transaction. That approach is necessary so that the Defendants are not left to seek to enforce this condition against unwilling Plaintiffs after compensation has already been paid to them.
3. For completeness, the Defendants raised a question whether such a condition could be imposed on an order for compensation under s 1041 of the Act. It is not necessary to address that question, since I would make the compensation order and impose that condition under s 1325 of the Act, rather than s 1041, were it necessary to rely on that section in order to do justice between the parties. The orders I make are not required to, and do not, specify a particular statutory source of the Court's power to make them.

Orders

1. For these reasons, I make the following orders:
2. Subject to order 8, judgment for the First Plaintiff against the First Defendant in the sum of $2,061,925.42 (being $2,000,000 less $363,434.69, being amounts paid to the First Plaintiff from time-to-time in relation to its investment with the First Defendant made on 24 May 2017, plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 24 May 2017 to 17 June 2022 of $425,360.11).
3. Subject to order 9, judgment for the Third Plaintiff against the First Defendant in the sum of $824,770.17 (being $800,000 less $145,373.88, being amounts paid to the Third Plaintiff from time-to-time in relation to its investment with the First Defendant made on 24 May 2017, plus interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW) from 24 May 2017 to 17 June 2022 of $170,144.04).
4. The Plaintiffs' claims against the First Defendant are otherwise dismissed.
5. Judgment for the Second Defendant.
6. The First Defendant pay the Plaintiffs' costs of the proceedings against it (other than any costs dealt with by previous costs orders), limited to the costs referable to the Plaintiffs' misleading and deceptive conduct claim in respect of: (a) the Second Tredmore Investment (as defined); and (b) Ms Lili Xue's investment, as agreed or as assessed.
7. The Plaintiffs pay the Second Defendant's costs of the proceedings against her (other than any costs dealt with by previous costs orders) as agreed or assessed.
8. For the avoidance of doubt, all costs dealt with by previous costs orders made in the proceedings are maintained.
9. Pursuant to s 86(2) of the Civil Procedure Act 2005 (NSW), order 1 is made subject to a condition that the First Plaintiff irrevocably consent, at the time of payment of the amount provided by that order, to the First Defendant as trustee of the QCAX Australian Property Income Fund II ("Fund") redeeming the units in the Fund issued to the First Plaintiff on around 26 May 2017 without payment of any further consideration to the First Plaintiff, and no obligation arises under that order until that condition is satisfied.
10. Pursuant to s 86(2) of the Civil Procedure Act 2005 (NSW), order 2 is made subject to a condition that the Third Plaintiff irrevocably consent, at the time of payment of the amount provided by that order, to the First Defendant as trustee of the Fund redeeming the units in the Fund issued to the Third Plaintiff on around 26 May 2017 without payment of any further consideration to the Third Plaintiff, and no obligation arises under that order until that condition is satisfied.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 July 2022