Australian Securities and Investments Commission v ActiveSuper Pty Ltd

Place: Brisbane

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 135

Counsel for the Applicant: Mr JP Moore QC with Ms C Van Proctor

Solicitors for the Applicant: Australian Securities and Investments Commission

Counsel for the First, Second, Third, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth and Eighteenth Defendants: The First, Second, Third, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, Eleventh, Twelfth, Thirteenth and Eighteenth Defendants did not appear

Counsel for the Fourth Defendant: The Fourth Defendant appeared in person

Counsel for the Fourteenth and Fifteenth Defendants: Mr N Kirby

Solicitors for the Fourteenth and Fifteenth Defendants: Clamenz Evans Ellis Lawyers

Counsel for the Sixteenth Defendant: Mr AW Smith

Solicitors for the Sixteenth Defendant: Ross & Daniels Lawyers

Counsel for the Seventeenth Defendant: Mr W Chan

12 June 2015 Order 25A has been inserted after Order 25 which reads as follows: 25A. Orders 1, 2, 3, 4, 5, 6 and 7 made by Justice Marshall on 10 July 2012 in these proceedings be discharged.

12 June 2015 In Order 28, the word "WPO" has been inserted between the words "SPG" and "Cayco".

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 426 of 2012

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

AND: ACTIVESUPER PTY LTD (IN LIQUIDATION) ACN 125 423 574 AND OTHERS NAMED IN THE SCHEDULE

JUDGE: WHITE J DATE OF ORDER: 29 MAY 2015 WHERE MADE: ADELAIDE

THE COURT DECLARES THAT: Offering securities

1. During the period commencing no later than 10 February 2011 and concluding on or about 9 March 2012, each of the first defendant, ActiveSuper Pty Ltd (in liquidation) (ActiveSuper), the second defendant, ACN 143 832 053 Pty Ltd (Royale Capital), the third defendant, Jason Grant Burrows and the fourth defendant, Justin Luke Gibson contravened s 726 of the Corporations Act 2001 (Cth) (the Act) by making offers of securities, namely, shares in an unnamed entity when, at the times the offers were made, the unnamed entity did not exist, and the offers would need disclosure to investors under Part 6D.2 of the Act if the unnamed entity did exist.
2. During the period commencing no later than 10 February 2011 and concluding on or about 9 March 2012, each of ActiveSuper, Royale Capital, Mr Burrows and Mr Gibson contravened ss 727(1) and 727(2) of the Act by making offers of securities, namely, shares in an unnamed entity when such offers required disclosure to investors under Part 6D.2 of the Act and no disclosure document had been lodged with the Australian Securities and Investments Commission (ASIC).
3. During the period commencing no later than 13 March 2012 and concluding on or about 23 April 2012, Mr Burrows and the ninth defendant, Syndicated Property Group Ltd (SPG), contravened ss 727(1) and 727(2) of the Act by making offers and distributing application forms for offers of securities, namely, shares in SPG, when such offers required disclosure to investors under Part 6D.2 of the Act and no disclosure document had been lodged with ASIC, and each of the twelfth defendant, MOGS Pty Ltd (in liquidation) (MOGS), the thirteenth defendant, Jeffrey George, the fifteenth defendant, Marina Ulrika Lovisa Gore, the sixteenth defendant, Mark Gordon Adamson and the seventeenth defendant, Craig Kirrin Gore was knowingly concerned in those contraventions.
4. During the period commencing no later than 13 March 2012 and concluding on or about 23 April 2012, each of ActiveSuper, Royale Capital, Mr Gibson and the eleventh defendant, Cayco Management (Cayco), contravened ss 727(1) and 727(2) of the Act by distributing application forms for offers of securities, namely, shares in SPG, when such offers required disclosure to investors under Part 6D.2 of the Act and no disclosure document had been lodged with ASIC, and each of MOGS, Mr George, Ms Gore, Mr Adamson and Mr Gore was knowingly concerned in those contraventions.
5. During the period commencing no later than 25 March 2012 and concluding on or about 12 June 2012, Mr Burrows and the tenth defendant, Worldwide Property Opportunities Ltd (WPO), contravened ss 727(1) and 727(2) of the Act by making offers and distributing application forms for offers of securities, namely, shares in WPO, when such offers required disclosure to investors under Part 6D.2 of the Act and no disclosure document had been lodged with ASIC, and each of MOGS, Mr George, Ms Gore, Mr Adamson and Mr Gore was knowingly concerned in those contraventions.
6. During the period commencing no later than 25 March 2012 and concluding on or about 12 June 2012, each of ActiveSuper, Royale Capital, Mr Gibson and Cayco contravened ss 727(1) and 727(2) of the Act by distributing application forms for offers of securities, namely, shares in WPO, when such offers required disclosure to investors under Part 6D.2 of the Act and no disclosure document had been lodged with ASIC, and each of MOGS, Mr George, Ms Gore, Mr Adamson and Mr Gore was knowingly concerned in those contraventions. Financial Services
7. During the period commencing no later than 6 August 2010 and concluding on or about 12 June 2012, each of ActiveSuper, Royale Capital, Mr Burrows and Mr Gibson contravened s 911A(1) of the Act by providing financial services without holding an Australian Financial Services licence covering the provision of those financial services, by: (a) making offers or distributing application forms for the offer of securities, namely, shares in the ninth and tenth defendants and other companies; and (b) providing financial product advice by making recommendations intended to influence persons in making a decision in relation to superannuation interests (or which could reasonably be regarded as being intended to have such an influence) to acquire, vary and/or dispose of an interest in superannuation interests (namely, a self-managed superannuation fund) within the meaning of the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act); and (c) except in the case of Royale Capital and Mr Gibson in the period between 4 October and 21 October 2011, dealing in financial products by arranging for persons to acquire, vary and/or dispose of an interest in superannuation interests within the meaning of the SIS Act; and (d) dealing in financial products by arranging for persons to acquire, vary and/or dispose of an interest in deposit and payment products (namely, a Macquarie Cash Management Account or Macquarie Cash Management Trust Account), and, from 13 March 2012, each of MOGS, Mr George and Mr Gore was knowingly concerned in those contraventions.
8. During the period commencing no later than 13 March 2012 and concluding on or about 12 June 2012, the sixteenth defendant, Mr Adamson, was knowingly concerned in the contravention by the first to fourth defendants of s 911A(1) of the Act, who provided financial services without holding an Australian Financial Services licence covering the provision of those financial services by: (a) making offers or distributing application forms for the offer of securities, namely shares in the ninth and tenth defendants and other companies; and (b) providing financial product advice by making recommendations intended to influence persons in making a decision in relation to superannuation interests (or that could reasonably be regarded as being intended to have such an influence) to acquire, vary and/or dispose of an interest in superannuation interests (namely, a self-managed superannuation fund) within the meaning of the SIS Act; and (c) dealing in financial products by arranging for persons to acquire, vary and/or dispose of an interest in superannuation interests within the meaning of the SIS Act.
9. During the period commencing no later than 6 August 2010 and concluding on or about 12 June 2012, each of Royale Capital and Mr Gibson contravened s 911B(1)(b)(iii) of the Act by: (a) providing financial product advice by making recommendations intended to influence persons in making a decision in relation to superannuation interests (or which could reasonably be regarded as being intended to have such an influence) to acquire, vary and/or dispose of an interest in superannuation interests (namely, a self-managed superannuation fund) within the meaning of the SIS Act; and (b) other than in the period between 4 October and 21 October 2011, dealing in financial products by arranging for persons to acquire, vary and/or dispose of an interest in superannuation interests (namely, a self-managed superannuation fund) within the meaning of the SIS Act, without holding an Australian Financial Services licence covering the provision of those financial services.
10. During the period commencing no later than 8 March 2012 and concluding on or about 23 April 2012, SPG contravened s 911A(1) of the Act by providing financial services without holding an Australian Financial Services licence covering the provision of those financial services, by making offers and distributing application forms for the offer of securities, namely, shares in itself; and, from 13 March 2012, each of MOGS, Mr George, Mr Adamson and Mr Gore was knowingly concerned in those contraventions.
11. During the period commencing no later than 25 March 2012 and concluding on or about 12 June 2012, WPO contravened s 911A(1) of the Act by providing financial services without holding an Australian Financial Services licence covering the provision of those financial services, by making offers and distributing application forms for the offer of securities, namely, shares in itself; and each of MOGS, Mr George, Mr Adamson and Mr Gore was knowingly concerned in those contraventions.
12. During the period commencing no later than 13 March 2012 and concluding on or about 12 June 2012, Cayco contravened s 911A(1) of the Act by providing financial services without holding an Australian Financial Services licence covering the provision of those financial services, by distributing application forms for the offer of securities, namely, shares in the ninth and tenth defendants; and each of MOGS, Mr George, Mr Adamson and Mr Gore was knowingly concerned in those contraventions. Hawking of financial products
13. During the period commencing no later than 6 August 2010 and concluding on or about 23 February 2012, each of Royale Capital and Mr Gibson contravened s 992A(l) of the Act by offering financial products, namely, an interest in superannuation interests (namely, a self-managed superannuation fund) for issue in the course of, or because of, an unsolicited meeting with another person without offering that person an opportunity to register on a "No Contact / No Call" register. Misleading or Deceptive Conduct
14. During the period commencing no later than 6 August 2010 and concluding on or about 23 February 2012, each of Royale Capital and Mr Gibson contravened section 1041H(l) of the Act and section 12DA(1) of the Australian Securities and Investments Commissions Act 2001 (Cth) (ASIC Act), by representing to persons that, if they obtained a self-managed superannuation fund with their assistance, those persons would, or alternatively could, achieve "safe and secure" "fantastic returns" of between 20 and 25% per annum.
15. During the period commencing no later than 10 February 2011 and concluding on or about 9 March 2012, each of ActiveSuper, Royale Capital, Mr Burrows and Mr Gibson contravened s 1041H of the Act and s 12DA of the ASIC Act, by representing to their self-managed superannuation fund clients, through a document entitled "US Realty Memorandum" and contrary to the fact that: (a) Superannuation monies debited directly from their superannuation funds would be: (i) applied to purchase shares in a private, limited liability company to be formed and registered in the State of Arizona, USA (the Investment Vehicle); and (ii) used by the Investment Vehicle for the purpose of purchasing foreclosed residential property as part of an investment portfolio; and (iii) quarantined in an Australian based trust account until such time as the capitalisation of the Investment Vehicle; and (b) Syndicated Property Solutions Arizona Ltd was currently contracted to handle property purchases for US Deals Ltd, New Zealand; and (c) the manager of the Investment Vehicle was Australian Property Investment Management Arizona Ltd, a duly formed company in the State of Arizona.
16. During the period commencing no later than 8 March 2012 and concluding on or about 23 April 2012, each of ActiveSuper, Royale Capital, Mr Burrows, Mr Gibson, SPG and Cayco contravened s 1041H of the Act and s 12DA of the ASIC Act by engaging in conduct that was misleading or deceptive or likely to mislead or deceive by making representations that monies invested by Australian self-managed superannuation funds pursuant to the SPG Private Placement Memorandum would be used for the purchase by SPG of property, and each of MOGS, Mr George, Ms Gore and Mr Gore was knowingly concerned in those contraventions.
17. During the period commencing no later than 25 March 2012 and concluding on or about 12 June 2012, each of ActiveSuper, Royale Capital, Mr Burrows, Mr Gibson, WPO and Cayco contravened s 1041H of the Act and s 12DA of the ASIC Act by engaging in conduct that was misleading or deceptive or likely to mislead or deceive, by making representations that monies invested by Australian self-managed superannuation funds pursuant to the WPO Private Placement Memorandum would be used for the purchase by WPO of property, and each of MOGS, Mr George, Ms Gore and Mr Gore was knowingly concerned in those contraventions.
18. During the period commencing no later than 13 March 2012 and concluding on or about 12 June 2012, Mr Adamson was knowingly concerned in conduct by the first to fourth and ninth to eleventh defendants that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 1041H of the Act and s 12DA of the ASIC Act, with the relevant conduct being the withholding from clients of the first to fourth, ninth and tenth defendants details concerning: (a) The application of monies invested by the first to fourth and ninth to eleventh defendants under the share offering by SPG and WPO; and (b) The fact that invested monies had been applied contrary to the terms of the SPG Private Placement Memorandum and the WPO Private Placement Memorandum. AND THE COURT ORDERS THAT: Injunctions
19. Pursuant to s 1324(1) of the Act, each of the following defendants be restrained for the period specified in relation to that defendant, from, by themselves, their servants or agents or otherwise, (i) carrying on any business in relation to financial products or financial services by providing financial product advice, dealing in financial products, and otherwise carrying on a financial services business within the meaning of Chapter 7 of the Act; (ii) carrying on any business related to, concerning or directed to superannuation interests within the meaning of the SIS Act; (iii) in any way holding themselves out as doing such things as mentioned in paragraph (ii) above; (iv) being in any way knowingly concerned in or a party to the conduct by another person of any business related to, concerning or directed to superannuation interests within the meaning of the SIS Act; and (v) being in any way concerned in the distribution of promotional documents or application forms for the offer or acquisition of securities which require disclosure to investors under Part 6D.2 of the Act, unless there has been lodged with ASIC a disclosure document for the offer or acquisition of securities as required by s 727(2) of the Act: (a) The first defendant, ActiveSuper, for a period of 10 years from the date of these orders; (b) The second defendant, Royale Capital, for a period of 7½ years from the date of these orders; (c) The third defendant, Mr Burrows, for a period of 10 years from the date of these orders; (d) The fourth defendant, Mr Gibson, for a period of 7½ years from the date of these orders; (e) The fifth defendant, US Realty Investments #1 LLC, permanently; (f) The sixth defendant, US Realty Investments #2 LLC, permanently; (g) The seventh defendant, US Realty Investments #3 LLC, permanently; (h) The eighth defendant, US Realty Investments #4 LLC, permanently; (i) The ninth defendant, SPG, permanently; (j) The tenth defendant, WPO, permanently; (k) The eleventh defendant, Cayco, permanently; (l) The twelfth defendant, MOGS, permanently; (m) The thirteenth defendant, Mr George, permanently; (n) The fifteenth defendant, Ms Gore, for a period of 7½ years from the date of these orders; (o) The sixteenth defendant, Mr Adamson, for a period of 10 years from the date of these orders; and (p) The seventeenth defendant, Mr Gore, permanently. Disqualification
20. Leave be granted to the plaintiff to amend the fifth further amended originating process dated 6 December 2013 to include in Part A paragraphs 21A and 21B as follows: "21A An order under s 206E of the Act that the third defendant be disqualified from managing corporations for a period of ten years. 21B An order under s 206E of the Act that the fourth defendant be disqualified from managing corporations for a period of seven and a half years."
21. Pursuant to s 206E of the Act, the third defendant, Mr Burrows, be disqualified from managing any corporation for a period of ten years.
22. Pursuant to s 206E of the Act, the fourth defendant, Mr Gibson, be disqualified from managing any corporation for a period of seven and a half years. Winding up
23. Pursuant to s 583(c)(iii) of the Act, the fifth defendant, US Realty Investments #1 LLC, the sixth defendant, US Realty Investments #2 LLC, the seventh defendant, US Realty Investments #3 LLC, the eighth defendant, US Realty Investments #4 LLC, the ninth defendant, SPG, the tenth defendant, WPO and the eleventh defendant, Cayco, be wound up.
24. Damian John Templeton and Darren Michael Lewis of KPMG be appointed joint and several liquidators of the fifth, sixth, seventh, eighth, ninth, tenth and eleventh defendants. Interim injunctions
25. Orders 5, 6, 7, 8, 9, 14, 15, 16 and 17 made by Justice Marshall on 3 December 2012 in these proceedings (as amended) be discharged. 25A. Orders 1, 2, 3, 4, 5, 6 and 7 made by Justice Marshall on 10 July 2012 in these proceedings be discharged.
26. Any of the defendants' passports held by the Court or by ASIC be returned to the said defendant upon the said defendant providing adequate identification to the Court or ASIC officer as appropriate. Costs
27. ASIC pay to Mr Stonehouse 45% of his costs in the proceedings on a party-party basis.
28. US Realty Investments #1, LLC, US Realty Investments #2, LLC, US Realty Investments #3, LLC, US Realty Investments #4, LLC, SPG, WPO, Cayco, MOGS and Mr George each pay 20% of 95% of ASIC's costs in the proceedings on a party-party basis.
29. ActiveSuper and Mr Burrows each pay 25% of 95% of ASIC's costs in the proceedings on a party-party basis.
30. Royale and Mr Gibson each pay 20% of 95% of ASIC's costs in the proceedings on a party-party basis.
31. Ms Gore and Mr Gore each pay 80% of 95% of ASIC's costs in the proceedings in respect of the period commencing on 3 December 2012 on a party-party basis.
32. Mr Adamson pay 70% of 95% of ASIC's costs of the proceedings in respect of the period commencing on 3 December 2012 on a party-party basis.
33. The enforcement of orders 28 to 32 in respect of all defendants is stayed once ASIC has recovered 95% of its costs in the proceedings on a party-party basis and, in respect of Ms Gore, Mr Adamson and Mr Gore, once ASIC has recovered 95% of its costs of the proceedings on a party-party basis in respect of the period commencing on 3 December 2012. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 426 of 2012

BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

AND: ACTIVESUPER PTY LTD (IN LIQUIDATION) ACN 125 423 574 AND OTHERS NAMED IN THE SCHEDULE

JUDGE: WHITE J DATE: 29 MAY 2015 PLACE: ADELAIDE

REASONS FOR JUDGMENT 1 On 14 April 2015, I published reasons containing findings of contraventions by certain of the defendants of provisions in the Corporations Act 2001 (Cth) and in the Australian Securities and Investments Commission Act 2001 (Cth) (the ASIC Act) and findings of accessorial liability by other defendants (other than the 14th defendant, Mr Stonehouse) in respect of these contraventions: Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) [2015] FCA 342. I adjourned the matter for consideration of the orders necessary and appropriate to give effect to those findings. 2 The following are my reasons on the outstanding matters. They should be read in conjunction with the principal reasons.

The declarations of contraventions and accessorial liability 3 In the principal reasons I found at [641]-[644] that: (1) The first and third defendants (ActiveSuper and Mr Burrows) had contravened s 726(1) of the Corporations Act; (2) ActiveSuper, the second defendant (Royale), the third defendant (Mr Burrows), the fourth defendant (Mr Gibson), the ninth defendant (SPG), the 10th defendant (WPO) and the 11th defendant (Cayco) had contravened s 727(1) and (2) of the Corporations Act and that the 12th defendant (MOGS), the 13th defendant (Mr George), the 15th (Ms Gore), the 16th defendant (Mr Adamson) and the 17th defendant (Mr Gore) had been knowingly concerned in those contraventions; (3) ActiveSuper, Royale, Mr Burrows, Mr Gibson, SPG, WPO and Cayco had contravened s 911A of the Corporations Act and that MOGS, Mr George, Mr Adamson and Mr Gore had been knowingly concerned in those contraventions; (4) ActiveSuper, Royale, Mr Burrows, Mr Gibson, SPG, WPO and Cayco contravened s 1041H(1) of the Corporations Act and s 12DA(1) of the ASIC Act in the representations as to the uses to which monies subscribed pursuant to the SPG and WPO PPMs (being documents in the nature of prospectuses) would be put, and that MOGS, Mr George, Ms Gore, Mr Adamson and Mr Gore had been knowingly concerned in those contraventions; (5) ASIC's claims against the 14th defendant, Mr Stonehouse, were not made out. 4 I also found that it was appropriate for declarations to be made in respect of the findings of contraventions, at [619]. 5 The trial did not concern the actions against Royale and Mr Gibson. That was because of the ill health of Mr Gibson at the time of trial. I adjourned the trial against Royale (of which Mr Gibson is the sole director) and Mr Gibson to a date to be fixed. Despite that adjournment, it was necessary for the Court to make some findings concerning the conduct of Royale and Mr Gibson in order to determine the claims made against those alleged to have been accessories to their contraventions. 6 Since the judgment, ASIC, Royale and Mr Gibson have reached agreement on the orders to be made in respect of ASIC's allegations concerning them. These include declarations. Having regard to the evidence at trial concerning Mr Gibson, it is appropriate for those orders and declarations to be made. 7 Subject to one qualification, no party took issue with the form of the declarations proposed by ASIC. 8 The qualification relates to one of the declarations which ASIC proposes in relation to Mr Adamson. As recorded in the principal judgment at [43]-[45], on the second day of trial ASIC and Mr Adamson reached agreement on orders to be made to resolve ASIC's claims against Mr Adamson. I adjourned consideration of these orders in the expectation that the evidence in the trial would establish the threshold matters about which the Court would need to be satisfied to make declarations by consent, because the openings of the parties had raised a question as to whether the Corporations Act contemplates accessorial liability in relation to breaches of ss 727 and 911A, and because Mr Adamson wished to submit that his liability arose from a wilful blindness to, rather than actual knowledge of, the matters giving rise to the primary contraventions. 9 The orders agreed upon by ASIC and Mr Adamson at that time included a declaration that Mr Adamson had been knowingly concerned in the misleading or deceptive conduct by ActiveSuper, Royale, Mr Burrows and Mr Gibson (the ActiveSuper defendants) and SPG, WPO and Cayco constituted by their withholding from clients of the ActiveSuper defendants and those who subscribed for shares in SPG and WPO details concerning: (i) The application of monies invested by the first to fourth and ninth to eleventh defendants under the share offerings by SPG and WPO; and (ii) The fact that invested monies had been applied contrary to the terms of the SPG Private Placement Memorandum and the WPO Private Placement Memorandum. This proposed declaration was different in significant respects from the misleading or deceptive conduct pleaded by ASIC in the Second Further Amendment Statement of Claim (2FASC). In [92] of the 2FASC, ASIC pleaded that the ActiveSuper defendants, SPG, WPO and Cayco had made representations that monies invested by Australian SMSFs pursuant to the SPG PPM and the WPO PPM: (a) In the future would be used for the purchase by SPG and WPO of property; (b) In the past had been used for the purchase by SPG and WPO of property. In [98] the 2FASC pleaded that Mr Adamson and others had been knowingly concerned in the misleading or deceptive conduct of the ActiveSuper defendants. 10 As can be seen, one of the representations pleaded by ASIC related to the future use of the monies invested by subscribers, and one to the past use of those monies. The latter was said to be a representation by omission. 11 In the principal judgment, I found that ASIC had established that the representation as to future use of the monies was misleading or deceptive because there was no reasonable basis for it (at [386]) but that the representation as to past use of invested monies was not established (at [394]). I then found accessorial liability established in relation to the former. 12 ASIC proposes a declaration in the case of Mr Adamson to the effect that he had been knowingly concerned in the conduct of the ActiveSuper defendants which was misleading or deceptive by their having made representations that monies invested by SMSFs pursuant to the SPG and WPO PPMs would be "used for the purchase [of real estate] by SPG and WPO". That is to say, ASIC's proposed declaration concerns the representations as to the future use, rather than the past use of the invested monies. ASIC contends that the declaration should reflect the actual factual findings made by the Court and be consistent with the declarations relating to the other defendants who were found in the principal judgment to have been knowingly concerned in these contraventions. 13 Mr Adamson submits that the Court should not make a declaration to this effect as it would "depart from the agreement embodied in the proposed consent orders". It is the difference between misleading or deceptive conduct by "withholding" information, on the one hand, and misleading or deceptive conduct by the making of positive misrepresentations, on the other, about which he is concerned. 14 I consider that the submission of Mr Adamson should be accepted, principally because the Court should give effect to the compromise which he reached with ASIC. Compromises of that kind often involve the claiming party (in this case ASIC) accepting something less than its full entitlement because of the advantages it perceives in doing so. 15 I do not consider that giving effect to the compromise gives rise to any incongruity with the Court's findings in the principal judgment. The reasons in the principal judgment with respect to the misleading or deceptive representation did not take account of the admission implicit in Mr Adamson's consent to the order, namely, that the investors did have the reasonable expectation necessary to give rise to a representation by omission. That is because ASIC did not seek at trial to rely on Mr Adamson's admission in this respect. It was necessary for the Court to make findings on the evidence as to the representations going beyond that agreed by ASIC and Mr Adamson as the findings were pertinent to the involvement of the other defendants as accessories in respect of the misleading or deceptive conduct. The declarations as to the other defendants should reflect the Court's findings on the evidence, and the declaration concerning Mr Adamson, his admission and ASIC's consent at the time. 16 I also observe that the findings made by the Court concerning Mr Adamson's conduct will still stand even though not reflected in the formal declaration to the full extent which would otherwise have been appropriate. 17 ASIC's minutes contemplate a separate declaration being made in respect of each defendant in respect of each contravention. This gives the proposed orders a somewhat cumbersome quality. That effect can be avoided to some extent by making one declaration in respect of the same contravention by each of several defendants, without altering the substantive effect of the declarations. I consider that that course should be adopted.

Injunctions 18 In [620]-[629] of the principal reasons, I indicated that I would issue the injunctions sought by ASIC pursuant to s 1324 of the Corporations Act restraining the defendants from providing particular forms of financial services, from carrying on a business related to, concerning, or directed to financial products, financial services or superannuation interests, and from being in any way concerned in the distribution of promotional documents and application forms for the offer or acquisition of securities requiring disclosure to investors under Pt 6D.2 of the Corporations Act unless a disclosure document had been lodged with ASIC. 19 However, the parties did not make submissions at the trial with respect to the length of the restraints and I indicated that I would hear submissions on that topic. 20 ActiveSuper, Mr Burrows and Mr Adamson had agreed with ASIC that the restraints in each of their cases should be for a period of 10 years. Royale and Mr Gibson have now agreed that the restraints in their cases should be for a period of seven and a half years. 21 ASIC contends for permanent injunctions in respect of the remaining defendants. Ms Gore contends that the restraint in her case should be for five years. In his outline of submissions provided before the hearing, Mr Gore proposed that the restraint in his case should be for 12 years. However, at the hearing his counsel announced that Mr Gore did not resist restraints operating permanently. 22 There was no agreement in respect of the length of the restraints concerning the remaining defendants. 23 The principal purpose of the injunctions is the protection of the public. However, the authorities also indicate that they may have a denunciatory and a deterrent purpose. They are not, however, issued for the purposes of punishment. 24 It is appropriate to keep in mind the nature and effect of the conduct which was the subject of this litigation. It concerned the circumstances in which numerous Australians with relatively modest amounts of superannuation were induced, inappropriately, to establish self-managed superannuation funds (SMSFs) and to use their superannuation funds for investment in properties in the United States of America and in the purchase of shares in companies incorporated in the British Virgin Islands (BVI). Their investments now appear to have been wholly lost. On any view, they were highly speculative investments and inappropriate for those to whom they were marketed. Further, at the time the SMSF investors were being induced to invest in SPG and WPO, the defendants knew that their monies would not be used for investment in real estate by those companies but would instead be lent to MOGS or made available to persons associated with it for their personal use. The defendants knew that the scheme involving investment in SPG and WPO (the BVI Scheme) had been established with a view to avoiding compliance with the Australian regulatory regime providing protection to investors. All knew that the PPMs of SPG and WPO had not been lodged with ASIC; all (with the exception of Ms Gore and Mr George) knew that the offers of shares in SPG and WPO by the PPMs required disclosure under Pt 6D.2 of the Corporations Act; all (apart from Ms Gore) knew that the primary contravenors were providing advice or recommendations intended to influence SMSF investors in relation to SPG or WPO without holding an appropriate authority under an Australian Financial Services Licence and all knew that the PPMs of SPG and WPO contained representations about the intended use of invested monies which were false. 25 Not all defendants were involved in all aspects of the conduct just summarised. SPG, WPO, Cayco, MOGS, Ms Gore, Mr Adamson and Mr Gore were not said to have been accessories in the conduct relating to the establishment of SMSFs or relating to the investment by SMSFs in real estate in the United States. 26 The purpose of provisions such as ss 726 and 727 of the Corporations Act is obvious. Ford, Austin and Ramsay's Principles of Corporations Law (16th Ed) contains a convenient statement at [22.010]: In recognition of the intrinsic connection between information and value of securities the law tempers the normal rule of caveat emptor, by requiring the issuer to disclose information which investors need to make their investment choices. In the case of new issues, this is achieved primarily through the prospectus requirements of the Corporations Act, supplemented by prohibitions of certain conduct such as hawking of securities. The law seeks to ensure the reliability of prospectus information by attaching special civil and criminal liability to those who are responsible for material misstatements or omissions. The primary focus of the fundraising provisions in Ch 6D of the Corporations Act is to ensure that investors in newly issued securities of a corporation, other than those who are in a strong enough position to look after themselves, have access to the information which a reasonable investor would require for the purpose of making an investment decision. The disclosure requirements contained in Chapter 6D (including s 726 and 727) were inserted by the Corporate Law Economic Reform Program Act 1999 (Cth). The Explanatory Memorandum says that "the primary function of prospectus disclosure is to address the imbalance of information between issuers of securities and potential investors". 27 As Barrett J observed in Australian Securities and Investments Commission v Karl Suleman Enterprizes [2003] NSWSC 400; (2003) 177 FLR 147 at [17], "the prohibition imposed by s 727 exists to protect persons from being enticed by contravening behaviour into subscription contracts with respect to securities". 28 The purpose of provisions such as s 911A of the Corporations Act is also obvious. The licensing regime secures the adequacy of capitalisation of providers of financial services; it excludes unqualified and untrained persons from the industry; and it enforces compliance with ethical standards: see AJ Black, "Licensing of Financial Services Providers" in Butterworths Australian Corporations Law: Principles and Practice, Vol 2 at [7.7.0005ff]. 29 The parties were agreed that it is appropriate for the Court to apply the principles and considerations stated by Santow J in Australian Securities and Investments Commission v Adler [2002] NSWSC 483; (2002) 42 ACSR 80 at [56]. In relation to the length of injunctions, Santow J noted the following from the cases decided to that point: [56] … (xiii) Factors which lead to the imposition of the longest periods of disqualification (that is disqualifications of 25 years or more) were: - Large financial losses - High propensity that defendants may engage in similar activities or conduct - Activities undertaken in fields in which there was potential to do great financial damage such as in management and financial consultancy. - Lack of contrition or remorse - Disregard for law and compliance with corporate regulations. - Dishonesty and intent to defraud - Previous convictions and contraventions for similar activities … (xiv) In cases in which the period of disqualification ranged from 7 years to 12 years, the factors evident and which lead to the conclusion that these cases were serious though not "worst cases", included: - Serious incompetence and irresponsibility - Substantial loss - Defendants had engaged in deliberate courses of conduct to enrich themselves at others' expense, but with lesser degrees of dishonesty - Continued, knowing and wilful contraventions of the law and disregard for legal obligations - Lack of contrition or acceptance of responsibility, but as against that, the prospect that the individual may reform … (xv) The factors leading to the shortest disqualifications, that is disqualifications for up to 3 years were: - Although the defendants had personally gained from the conduct, they had endeavoured to repay or partially repay the amounts misappropriated - The defendants had no immediate or discernible future intention to hold a position as manager of a company - In Donovan's case, the respondent had expressed remorse and contrition, acted on advice of professionals and had not contested the proceedings … 30 ASIC v Adler concerned disqualification orders under s 206C of the Corporations Act rather than injunctions under s 1324. However, the principles have also been applied in cases of the latter kind: Re Idylic Solutions Pty Ltd; Australian Securities and Investments Commission v Hobbs [2013] NSWSC 106; (2013) 93 ACSR 421 at [92]-[106].

Mr Gore 31 ASIC described the conduct of Mr Gore as the most egregious of the defendants. That characterisation is appropriate. Mr Gore was the principal promoter of the BVI Scheme. He conceived, organised and drove its implementation: at [158]. Mr Gore did so because he wished to avoid compliance with the Australian regulatory regime about which he had taken advice from Minter Ellison on 7 October 2011. His involvement in the contraventions was conscious and deliberate. Mr Gore knew and intended that the SPG and WPO PPMs would be marketed to small, unsophisticated SMSF investors. It may be the case that Mr Gore was motivated initially by a desire to obtain a source of finance for MOGS, being funds invested by SMSF investors, but as the scheme developed, Mr Gore saw the opportunity to obtain access personally to those funds. Subsequently, Mr Gore, and those associated with him, made personal use of substantial amounts of the funds invested by the SMSF investors. 32 It is pertinent that Mr Gore has not made any acknowledgement of the wrongfulness of his conduct, let alone an expression of contrition. Nor has he provided any evidence of assistance by him to attempts at recovery of the lost investments. 33 ASIC emphasised the finding at [626] that "there is a very real risk that left unrestrained, Mr Gore will engage in like activity in the future, especially as there was no recognition by him of the wrongfulness of his conduct during the course of the trial". 34 As already noted, the consequences of Mr Gore's conduct are serious as superannuation savings of a large number of SMSF investors, including those with limited savings, appear to have been wholly lost: at [626]. Those investors are likely to suffer the effects for many years. Of their very nature, small SMSFs have a reduced ability to absorb investment losses. 35 ASIC referred to my findings concerning Mr Gore's involvement in the activities of MOGS: at [556]-[564]. I found that the directors of MOGS were accustomed to act in accordance with Mr Gore's instructions and wishes in the sense contemplated by subpara (b) of the definition of director in s 9 of the Corporations Act. ASIC referred in this context to Mr Gore's disqualification from managing any corporation from 23 November 2010, by reason of his entry into a personal insolvency agreement under Pt 10 of the Bankruptcy Act 1966 (Cth) and the like disqualification from 18 April 2012 upon the presentation of his bankruptcy petition. It submitted that in these circumstances Mr Gore had contravened s 206A of the Corporations Act and that this contravention aggravated his conduct in relation to the subject contraventions. 36 I am not prepared to act on that submission. First, ASIC has not pleaded any contravention of s 206A of the Corporations Act. That by itself makes it inappropriate to make a finding of such a contravention. Further, and in any event, I consider that the period of an appropriate restraint in the case of Mr Gore is better determined by reference to the nature of his underlying conduct, rather than by reference to one potential legal characterisation of it. 37 Although Mr Gore was unrepresented during the trial, he had representation at the hearing concerning the orders to be made reflecting the Court's findings. His counsel submitted, correctly, that no express finding of dishonesty or fraud had been made. That was because honesty and fraud were not elements of the matters which ASIC had to establish. However, the characterisation of Mr Gore's conduct as dishonest is appropriate. Mr Gore's taking of monies for his own personal use which was subscribed for the purposes of investment in real estate cannot be characterised in any other way. The circumstance that a finding of dishonesty is not necessary for an underlying contravention or for accessorial liability does not mean that the dishonest character of the conduct is to be ignored when the Court considers the appropriate length of the restraint, particularly having regard to the protective, deterrent and denunciatory purposes of the injunctions: Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 179 FLR 1 at [748]-[749]. 38 Counsel for Mr Gore also submitted that the Court should have regard to the principle of parity, referring in this respect to Gillfillan v Australian Securities and Investments Commission [2012] NSWCA 370; (2012) 92 ACSR 460 at [185]-[187]. He submitted that the culpability of Mr Burrows and Mr Gore was at the same level, with the effect that the same restraint imposed on Mr Burrows should also be imposed on Mr Gore. 39 Although I accept that it can be appropriate to have regard to the parity principle in a context such as the present, I do not accept the submission made on Mr Gore's behalf. 40 The parity principle was described by Dawson and Gaudron JJ in Postiglione v The Queen [1997] HCA 26; (1997) 189 CLR 295 at 301: The parity principle … is an aspect of equal justice. Equal justice requires that like should be treated alike but that, if there are relevant differences, due allowance should be made for them. In the case of co-offenders, different sentences may reflect different degrees of culpability or their different circumstances. If so, the notion of equal justice is not violated. … [T]he parity principle, as identified and expounded in Lowe v The Queen, recognises that equal justice requires that, as between co-offenders, there should not be a marked disparity which gives rise to "a justifiable sense of grievance". (Citations omitted) 41 The parity principle recognises that like cases should be treated similarly. It also recognises however that cases which are dissimilar should not be treated in the same way. 42 In the present case, there are important points of difference between the circumstances of Mr Burrows, on the one hand, and of Mr Gore, on the other. A circumstance which is favorable to Mr Gore is that Mr Burrows was involved in more contraventions. However, there are a number of matters which indicate that the Court should take a more serious view of Mr Gore's conduct. First, for the reasons given in the principal judgment, the culpability of the two men is not the same. Mr Burrows was a willing participant in the BVI Scheme, but he was not the Scheme's originator or prime mover (principal reasons at [466]). Secondly, as noted in the principal judgment at [467], Mr Gore's corporate experience is much greater than that of Mr Burrows. Thirdly, unlike Mr Gore, Mr Burrows has made a public acknowledgement of the wrongfulness of his conduct, and, shortly before the commencement of the trial, agreed orders with ASIC to resolve the proceedings. That recognition is important in a number of respects. Amongst other things, it indicates that considerations of personal deterrence are not so important in Mr Burrows' case. Fourthly, it is very evident that Mr Burrows has not profited personally to the same extent as has Mr Gore, and those associated with him. Fifthly, the proposed period of restraint in Mr Burrows' case has been reached by the agreement of the parties, and not determined by Court order. That consent reflects other considerations, including the cooperation which Mr Burrows has provided to ASIC. 43 For these reasons, I do not regard the period of restraint upon which ASIC and Mr Burrows have agreed as providing some indication of the restraints appropriate in Mr Gore's case. 44 I consider that the permanent restraints proposed by ASIC in the case of Mr Gore, and which, ultimately, he did not oppose, are appropriate.

Mr George 45 The restraints in the case of Mr George should also be permanent. His role in the development and implementation of the BVI Scheme was significant. Although at the commencement of the scheme he may not have known what was intended, he must quickly have come to the realisation that the scheme involved inducing small SMSF investors to invest monies in anticipation that those monies would then be invested, following serious consideration and expert advice, in real estate, when that was not what was intended at all. He actively assisted in the implementation of the scheme and profited personally to a significant extent. It seems that Mr George considered that he could, as he chose, make personal use of the monies invested. 46 As I noted in the principal judgment at [628], there is some evidence suggesting that Mr George was involved in the sale of the Arizonan properties owned by the LLCs and the putting of the proceeds of those sales beyond the reach of the provisional liquidators of the LLCs.

Ms Gore 47 The evidence indicated that Ms Gore's involvement in the development of the PPMs was significant and that she knew that SMSFs were being induced to subscribe for shares with a view to the monies being invested in real estate when that was not the case. Ms Gore profited personally to a very significant extent from the BVI Scheme. She has not provided any explanation for her conduct, nor acknowledged its wrongfulness, nor made any expression of contrition or remorse. Ms Gore's receipt and use of some of the invested monies suggests that she acted dishonestly. Ms Gore has not attempted to provide any answer to that suggestion. Nor has Ms Gore made any attempt at reparation. 48 I will refer shortly to the submissions made on Ms Gore's behalf with respect to the orders made by this Court on 3 December 2012 pursuant to s 1323 of the Corporations Act. For present purposes, it is pertinent to note that Ms Gore opposed the continuance of those orders for even another 28 days. That opposition bespeaks an indifference by Ms Gore to the consequences of her conduct and to any attempts to make good the adverse effects which the SMSF investors have suffered by reason of that conduct. 49 Ms Gore's counsel submitted that the Court should accept that Ms Gore's involvement in these proceedings has had a salutary effect. This submission was not supported by evidence but I am prepared to accept that this is so to a certain extent. However, the significance which can be attached to it is diminished by the fact that the submissions made on her behalf did not include any expression of regret, contrition or acknowledgement of the wrongfulness of the conduct. In other words, the Court was not provided with any material which may provide some assurance that Ms Gore would not engage in similar conduct in the future and the aspects of Ms Gore's conduct referred to earlier detract from a conclusion to that effect. 50 Nevertheless, I accept that Ms Gore's involvement was less than that of Mr Gore. She was not in any event involved in the contraventions of s 911A, and I was not prepared to find that she had actual knowledge that Pt 6D.2 of the Corporations Act required lodgement of the PPMs with ASIC. Although there is no direct evidence about it, it is reasonable to infer, and I do infer, that much of Ms Gore's conduct can be attributed to the influence of her husband, Mr Gore. Ms Gore also relied from time to time on advice from Mr Adamson, and it was reasonable for her to have done so. I referred in the principal reasons to indications that Ms Gore did at least take some steps to satisfy herself that SPG and WPO were being properly established and audited. 51 These matters indicate that the permanent restraints sought by ASIC are not appropriate in the case of Ms Gore. 52 Ms Gore's counsel emphasised that, by reason of the restraints imposed on 3 December 2012, Ms Gore has already been subject to restraints for nearly two and a half years. 53 Having regard to all these matters, I consider that the restraint in Ms Gore's case should operate for seven and a half years, being the same restraint as ASIC has agreed with Mr Gibson.

The corporate defendants 54 The practical effect of making the restraints on the corporate defendants permanent may be more theoretic than real but nevertheless I propose to accede to ASIC's submissions in that respect. They will serve to emphasise the Court's denunciation of their conduct, and give effect to the deterrent purpose of the injunctions. 55 Accordingly, the restraints in the case of ActiveSuper, Mr Burrows and Mr Adamson will operate for 10 years, the restraints in the case of Mr Gibson and Ms Gore will operate for seven and a half years, and all other restraints will operate permanently.

Disqualification orders 56 At the trial, ASIC did not make any claims under s 206E for the disqualification of any of the individual defendants from managing corporations. However, the agreements which ASIC has reached with Mr Burrows and Mr Gibson involve such orders. In order to give effect to these agreements, ASIC applies for leave to amend the Second Originating Application to include an application for disqualification in the case of these two defendants. I will grant that leave (with the amendments to take effect from the date of these orders) and will make the agreed disqualification orders. Given that these orders are being made by consent, it is unnecessary to provide further reasons.

Discharge of the s 1323 orders 57 On 30 November 2012, ASIC filed an interlocutory application by which it sought, amongst other things, the joinder of SPG, WPO, Cayco, MOGS, Mr George, Mr Stonehouse, Ms Gore, Mr Adamson and Mr Gore as defendants as well as orders under s 1323 of the Corporations Act. The Court made orders ex parte on that application on 3 December 2012, joining those persons as defendants. In addition, the Court made the orders sought by ASIC under s 1323 restraining those defendants from dealing with any funds held or controlled by them by or on behalf of SPG, WPO, MOGS, the LLC and other entities, from dealing with property purchased with monies subscribed by SMSF investors, from disposing of books and records relating to investment by SMSFs, from offering securities in contravention of s 727(1) and s 727(2) of the Corporations Act, from engaging in defined activities unless they were the holder of, or the authorised representative of the holder of and Australian Financial Services Licence, and requiring the surrender by Mr Stonehouse, Ms Gore, Mr Adamson and Mr Gore of their passports. Subject to some minor variations to these orders from time to time, those orders continue in force. 58 Mr Stonehouse, Ms Gore and Mr Gore seek the immediate discharge of those orders. ASIC opposes orders to this effect and contends instead that the orders should continue in force for a period of 28 days from the Court's orders. It submits that the continuance of the orders will provide members of the public and the liquidators of the various corporate entities an opportunity to consider, in the light of the Court's orders, whether to institute proceedings against some or all of the defendants while any property which is the subject of the orders continues to be preserved. 59 The orders of 3 December 2012 should be discharged with immediate effect in the case of Mr Stonehouse. ASIC's claims against him failed and there is in any event no evidence that he received directly funds subscribed by the SMSF investors. I noted in [202(d)] of the principal judgment that Mr Stonehouse had received some monies from the MOGS Unit Trust in each of the financial years ending on 30 June 2012 and 2013 but the source of those funds by the MUT was not disclosed. There is no basis upon which it can be said that the continuance of the restraints in Mr Stonehouse's case is appropriate. 60 In seeking the immediate discharge of the orders concerning Ms Gore, her counsel submitted that s 1323(1) does not authorise orders having continuing effect after the date of the Court's final orders. Counsel did not point to any matter of text, context or purpose, nor to any authority, which would warrant reading into s 1323 a limitation of this kind. Such a limitation seems inconsistent with the scope and purpose of s 1323 as discussed in the authorities. The matters going to the purpose sought to be achieved by the orders made on 3 December 2012 to which counsel referred have more relevance to the exercise of the Court's discretion. 61 Counsel for Ms Gore submitted that the Court should have regard to the long period during which the restraints have already operated, to the limitation on Ms Gore's freedom of movement resulting from the surrender of her passport, and to the absence of any purpose to the continuance. Counsel also referred to the observations in the principal judgment to the effect that it seemed that the monies invested by the SMSF investors had been wholly lost. 62 Counsel for Mr Gore adopted the submissions made on behalf of Ms Gore on this topic and referred to Australian Securities and Investments Commission v Oliver Banovec (No 2) [2007] NSWSC 961; (2007) 214 FLR 33 at [6] at which White J said in relation to s 1323: The purpose of the conferral of these powers is to protect the interests of aggrieved persons by preserving the relevant person's assets pending the outcome of the investigation, prosecution, or proceeding, so that the relevant person's assets will be available to meet the claims of the aggrieved persons. However, I do not regard this passage as indicating that orders made for the purposes identified by White J may not be continued after the determination of the claims in questions, if there is a proper basis for doing so. 63 On one view, the submissions concerning the loss of the SMSFs' investments had a curious quality. On the findings in the principal judgment at [626]-[627], both Mr and Ms Gore received personally significant amounts of the monies invested by the SMSF investors. Neither has provided any explanation as to what has happened to those monies. Accordingly, the Court has no information presently as to whether Mr or Ms Gore still have, or at least control, some of the invested monies. Each could have, but has not, put evidence before the Court about these matters so as to establish that there is no point to the continuance of the injunctions if that be the case. The absence of such evidence does not sit comfortably with counsels' submissions that there is no point to continuance of the orders. 64 I also note that, even when challenged, counsel for Ms Gore did not claim that she had any overseas travel plans in the immediate future. There was accordingly no suggestion on behalf of Ms Gore that the continuance of the orders would, in fact, have an adverse impact on her. 65 Despite these matters, I consider that the Court should discharge the remaining orders with immediate effect. The restraints have already operated for a long period, some are in any event no longer necessary, and the intrusive effect of those orders interfering with the defendants' freedom of movement is an important consideration. 66 The justification put forward by ASIC for the continuance of the restraints for a limited period is, in my view, not sufficient to justify the continuance of the restraints. Liquidators and members of the public who may be contemplating proceedings against the defendants have had a long time, including the period since 14 April 2015 when the Court published its reasons, to consider their course of action. It is reasonable to suppose that if further action is contemplated, these persons will have considered already the desirability or appropriateness of freezing orders, and there is no evidence that they need further time in which to do so. 67 Accordingly, on the basis that the Court does have a discretion, I exercise that discretion in favour of the immediate discharge of the orders. This makes it unnecessary to consider the parties' submissions concerning the effect of the decision of Davies J in Australian Securities and Investments Commission v Ostrava Equities Pty Ltd [2015] FCA 425. 68 The order of the Court will be that the s 1323 orders made on 3 December 2012 are to be discharged with immediate effect.

Costs 69 A considerable portion of the parties' submissions were addressed to the issue of costs. This is not a straightforward issue. 70 The discretion with respect to costs to be exercised in the circumstances of this case is that vested in the Court by s 1335(2): (2) The costs of any proceeding before a court under this Act are to be borne by such party to the proceeding as the court, in its discretion, directs. 71 A feature of this case is that much of the work for which ASIC is entitled to costs is common to separate groups of defendants and, in some aspects, common to all defendants. ASIC would have incurred almost the same costs in respect of the members of these groups even if there had been fewer defendants in each group. Account must be taken of this because, in the main, this is not a case in which ASIC incurred separate and distinct costs in respect of individual defendants or to an extent in respect of the members of each group. At the same time, account must be taken of the fact that there must have been at least some costs which ASIC incurred because, and only because, a particular defendant had been joined. That is to say, there are some costs which are discrete to each individual defendant. 72 Another circumstance bearing on the exercise of the Court's discretion with respect to costs is the desirability of the orders for costs being capable of ready implementation. The Court should attempt to avoid, so far as possible, creating a situation in which the quantification of costs will be complex, protracted, and by itself costly. 73 One way by which this purpose can be achieved is by the Court making orders for ASIC and the defendants to pay fixed percentages of costs of a defined nature. I consider that it is desirable for the Court to adopt that course if possible, even if it does, to an extent, involve some broad axing. This should facilitate the quantification of costs on a taxation. 74 The parties' submissions indicate that account should be taken of the following matters: (a) Although ASIC's claims against Mr Stonehouse failed altogether, he and Ms Gore had joint representation throughout and, until 19 March 2013 when MOGS went into provisional liquidation, joint representation with it; (b) The only "active" defendants at the trial were Mr Stonehouse, Ms Gore, Mr Adamson and Mr Gore; (c) ActiveSuper and Mr Burrows reached agreement with ASIC only a week or two before the trial, but before that had been "active" defendants; (d) Royale and Mr Gibson had also been "active" defendants until shortly before trial but, because of Mr Gibson's ill health, the Court ordered that the trial against him be adjourned to a date to be fixed; (e) Not all defendants have been parties to the proceedings for their duration. When the proceedings were commenced on 10 July 2012, the ActiveSuper defendants were the only defendants; the LLCs were joined as defendants on 14 November 2012; SPG, WPO, Cayco, MOGS, Mr George, Mr Stonehouse, Ms Gore, Mr Adamson and Mr Gore were joined as defendants on 3 December 2012 by which time ASIC had already carried out significant work in the proceedings; (f) At one stage, ASIC appeared to have alleged that MOGS, Mr George, Mr Stevenson, Ms Gore, Mr Adamson and Mr Gore were also knowingly concerned in the misleading or deceptive conduct of the ActiveSuper defendants in relation to the US Realty Memorandum; (g) Some of ASIC's claims were made against some defendants only: ASIC alleged contraventions of s 726 of the Corporations Act in respect of the US Realty Memorandum against the ActiveSuper defendants only; ASIC alleged contraventions of s 911B(1)(b)(iii) and of s 992A(1) of the Corporations Act against Royale and Mr Gibson only; and, ultimately, ASIC's allegations of misleading or deceptive conduct in relation to the establishment of SMSFs and the US Realty Memorandum were made in respect of the ActiveSuper defendants only; (h) In addition to ASIC's claims against Mr Stonehouse failing, its claims of misleading or deceptive conduct in respect of the past use of monies subscribed pursuant to the SPG and WPO PPMs failed altogether and its claim that Ms Gore was knowingly concerned in the contraventions of the primary defendants of s 911A of the Corporations Act failed; (i) An interlocutory application of Mr Stonehouse and Ms Gore filed on 10 December 2012 seeking the setting aside of the orders made ex parte on 3 December 2012, was dismissed on 19 March 2013; (j) Mr Stonehouse and Ms Gore sent a Calderbank letter to ASIC on 24 September 2013. 75 Account must be taken of other matters as well. Each of the agreements which ASIC reached with ActiveSuper, Mr Burrows, Royale, Mr Gibson and Mr Adamson are to the effect that each of those defendants should pay ASIC's costs of the proceeding against that defendant. Counsel for Mr Adamson submitted that these agreements did not preclude the Court making an order in a form which would enable a more ready quantification of the costs to which it was agreed ASIC is entitled. He proposed that this effect could be achieved in Mr Adamson's case by an order that he pay 20% of the costs of ASIC in the overall proceedings. 76 Counsel for Ms Gore proposed an order that she pay 10% of ASIC's costs and counsel for Mr Gore an order that he pay 15% of ASIC's costs. For the reasons to follow, each of these amounts is unrealistic. 77 The form of orders proposed by ASIC, to the effect that each defendant pay the costs of the proceedings against him, her or it, would give effect to the underlying principle that each defendant should be responsible for the costs of ASIC's case against it, and only for those costs. However, given that much of ASIC's case was common to several defendants, orders in those terms would lead to practical difficulties. It would mean that a Taxing Registrar would have the task of determining the relationship between the work performed by ASIC for which it is entitled to costs and the claims which it brought against each defendant. This task is likely to be difficult, time consuming and expensive. There may in turn be difficult issues of contribution arising between the defendants. 78 Before addressing these matters further, it is appropriate to consider the position of Mr Stonehouse.

Mr Stonehouse's claim 79 Mr Stonehouse and Ms Gore were jointly represented by Clamenz Evans Ellis from the time they were joined as defendants to the action on 3 December 2012. Until 19 March 2013, Clamenz Evans Ellis also represented MOGS. It filed a joint defence for these defendants on 14 March 2013. 80 The trial commenced on 14 October 2013. 81 In accordance with orders made by the Court, Clamenz Evans Ellis filed an affidavit (without the annexures) containing Mr Stonehouse's then proposed evidence in chief on Thursday, 19 September 2013. They also filed an affidavit (again without the annexures) from Ms Gore containing her then proposed evidence in chief on 23 September 2013, and on 2 October 2013 a further affidavit from Ms Gore. 82 On Tuesday, 24 September 2013, Clamenz Evans Ellis sent a letter to ASIC marked "Without Prejudice, Save to Costs". The substance of the letter was as follows: We refer [to] the above mentioned proceedings and note that you have our client's [sic] substantive affidavits and will, a reasonable time before the expiry of this offer, have our client's [sic] exhibits. In our view, based on the evidence filed by you, your client is unable to make out the pleaded case against our two clients and we believe our clients would have reasonable prospects in succeeding in a summary judgment application. In light of the above, as an offer to settle the proceedings, our clients will consent to an order dismissing the proceedings as against them (and dissolving any injunctions against them) with no order as to costs. This offer is open until 5pm on 1 October 2013 and is made in accordance with the principles in Calderbank v Calderbank (1975) 3 WLR 586. 83 Counsel for Mr Stonehouse and Ms Gore submitted that ASIC had not bettered this offer in relation to Mr Stonehouse with the consequence that an order that ASIC pay Mr Stonehouse's costs from 24 September 2013 on an indemnity basis would, for that reason alone, be appropriate. 84 Counsel also submitted that Mr Stonehouse should be awarded costs on an indemnity basis for a different reason, namely, because ASIC had never had a proper basis for proceeding against Mr Stonehouse. 85 It is convenient to consider the letter of 24 September 2013 first. An offer made to two or more defendants must be capable of acceptance by either in order to attract an entitlement to indemnity costs in circumstances like the present. In Archer v Archer (No 2) [2000] NSWCA 315 at [8], the Full Court said: An offer of compromise must be capable of acceptance by each party to whom it is addressed, although an offer of compromise can be made interdependent upon acceptance by another party ... Here the offer of compromise was made to the parties jointly, although their causes of action were several, and the offer was therefore not capable of individual acceptance. In our opinion therefore, there was no basis for the making of an order for indemnity costs. See also Wieland v Texxcon Pty Ltd [2014] VSCA 199; (2014) 313 ALR 724 at [132]. 86 In my opinion, this principle also applies in the converse situation, such as the present. 87 I consider that the letter of 24 September 2013 does not entitle Mr Stonehouse to costs on an indemnity basis. Understood reasonably and in context, the offer was made on behalf of Mr Stonehouse and Ms Gore jointly. It contemplated the making of a single order dismissing the proceedings against both. Mr Stonehouse and Ms Gore were seeking the discontinuance of the proceedings against both, rather than a circumstance in which ASIC might proceed against one only, leaving that defendant to bear the whole of the costs of the action. Any doubts about this are removed by the consideration that it would have been very easy for Mr Stonehouse and Ms Gore to make separate offers so that it is reasonable to infer that, if that is what was actually intended, Clamenz Evans Ellis would have made that plain. Accordingly, it was not open to ASIC to accept the offer contained in the letter of 24 September 2013 in respect of Mr Stonehouse only. 88 That by itself is sufficient to deprive the letter of 24 September 2013 of the effect for which counsel for Mr Stonehouse contended. 89 That makes it unnecessary to consider a second matter, namely, the shortness of the period during which the offer was open. However, in that respect, regard would have to be had to the fact that, although the body of Mr Stonehouse's affidavit was filed on 19 September 2013, the annexures were not filed until 25 September 2013, that is, one day after the seven day period during which the offer was open had commenced to run. Likewise, Ms Gore's affidavit, although made on 19 September 2013, was not filed until Monday, 23 September 2013 and the annexures were not filed until 25 September 2013. Accordingly, ASIC had only a limited period to consider the material. It is reasonable to assume that during that period, ASIC's energies were very much concentrated on preparing the matter for the trial to commence on 14 October 2013. The shortness of that period gives rise to some questions as to whether ASIC's failure to accept the offer within the time during which it was open was in any event unreasonable, but it is unnecessary to express a concluded view on that question. 90 I also do not accept the alternative submission made on Mr Stonehouse's behalf that ASIC should have recognised all along that it had no prospects of establishing its claim against him. The mere fact that ASIC's claim against Mr Stonehouse has failed is not sufficient, of itself, to warrant a conclusion that ASIC acted unreasonably in joining Mr Stonehouse as a defendant and in pursuing its claims against him. 91 It is appropriate to have regard to three considerations in particular. First, Mr Stonehouse was personally involved in aspects of the conduct considered in this case. First, Mr Stonehouse took a leading role in the obtaining of the guarantee from Ms Need, supported by a mortgage over her property, which secured the advances by the LLCs to MOGS under the Loan Agreement dated 19 October 2011 - see [149]-[150] of the principal judgment. I recognise of course that this loan agreement and guarantee did not relate to the funds provided by SPG and WPO but it does form a significant part of the context in which the events concerning the BVI Scheme occurred. 92 Secondly, Mr Stonehouse was involved in the early stages of the development of the WPO PPM and knew that its purpose was to avoid the necessity for compliance with the Australian regulatory regime (principal judgment at [464], [468]) and, given the effort and energy which MOGS' employees and directors (including Mr Gore, Mr Adamson, Ms Gore and for a time Mr Chant) were putting into the development of the BVI Scheme, it was reasonable for ASIC to suppose that he had knowledge of some of its elements and had, at the least, acquiesced in them. 93 Thirdly, it was reasonable for ASIC to contemplate that the evidence which it would present as its evidence in chief would not be the whole of the evidence relating to Mr Stonehouse's conduct at the trial. There were indications that each of the defendants might give evidence and thereby be available for cross-examination by ASIC. In the events that happened, Mr Adamson was the only one of the defendants who did give evidence. It is fair to say that his evidence in chief and his cross-examination yielded material which was of assistance to ASIC in making out its allegations against other defendants. 94 I do not overlook that it was incumbent on ASIC to review, as the trial progressed, the evidence implicating Mr Stonehouse which was available to it: Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [42]-[43]. There were indications during the trial that ASIC did carry out such reviews. This was so in particular after the Court indicated that it may not permit ASIC to cross-examine Mr Stonehouse if it called him as part of its proof of his s 19 examination transcript, and later, after Mr Kirby indicated that Mr Stonehouse would not be giving evidence in the trial. 95 In all these circumstances, it should not be concluded that ASIC's conduct in pursuing claims against Mr Stonehouse was unreasonable so that it should pay his costs on an indemnity basis. 96 Counsel for Mr Stonehouse referred to the "rule of thumb" that, when a plaintiff succeeds against one jointly represented defendant but not the other, each is liable to pay a rateable proportion of the costs: Rogers v Kabriel (No 2) [1999] NSWSC 474 at [14]-[15]. See also Spotless Group Ltd v Premier Building and Consulting Pty Ltd [2008] VSCA 115 at [39]-[45]. Counsel submitted however, that the "rule" does not apply when the Court has evidence of the arrangements made by the defendants with their solicitor, particularly when the plaintiff is aware of that arrangement: Kabriel at [16]. He referred to the costs agreement between Mr Stonehouse and Ms Gore with Clamenz Evans Ellis. This stated that each was jointly and severally liable for the firm's costs. Counsel submitted that, in those circumstances, Mr Stonehouse may be liable to pay the whole of Clamenz Evans Ellis' costs and accordingly, an order indemnifying him for his costs requires that he recover the whole of his liability for costs, less any costs which relate solely to Clamenz Evans Ellis representation of Ms Gore. 97 As counsel noted, the "rule" is a rule of thumb only and not a rule which must be applied in every case. 98 An order that ASIC pay the whole of Mr Stonehouse's costs would have the effect that ASIC would, in effect, also be paying the greater portion of the costs of Clamenz Evans Ellis in defending its claim against Ms Gore, even though it was substantially successful in that claim. That would not be a just result. 99 That result can be avoided if the Court has regard to the position as it would be ultimately if either Mr Stonehouse or Ms Gore paid the whole of the costs of Clamenz Evans Ellis. If Mr Stonehouse discharged the liability to Clamenz Evans Ellis, he would have a right of contribution against Ms Gore which (leaving aside the position of MOGS for the moment) would be 50%. Conversely, if Ms Gore discharged the liability to Clamenz Evans Ellis, then (again, leaving aside the position of MOGS) she would have an entitlement to contribution of 50% from Mr Stonehouse. In either case, Mr Stonehouse's ultimate liability would be for 50% of the costs of Clamenz Evans Ellis. That suggests, prima facie, that ASIC should be ordered to pay Mr Stonehouse 50% of his party-party costs. 100 That figure should be reduced slightly to take account of two matters. First, the fact that Clamenz Evans Ellis also represented MOGS until 19 March 2013. ASIC should not have to pay the costs of Clamenz Evans Ellis' representation of MOGS. 101 The Court has not been provided with any information as to the extent of the work performed by Clamenz Evans Ellis for MOGS in the period between 3 December 2012 and 19 March 2013 but it is reasonable to infer that it was a small proportion only of the overall work performed by the firm. 102 Secondly, ASIC referred to the dismissal of the interlocutory application filed by Mr Stonehouse and Ms Gore on 10 December 2012 seeking the setting aside of the orders made ex parte on 3 December 2012. Gordon J dismissed that application on 19 March 2013 and reserved the question of costs. ASIC submitted that Mr Stonehouse and Ms Gore should pay its costs in relation to their unsuccessful application. In fact, one of ASIC's submissions was that Mr Stonehouse's costs liability arising from the dismissal of his interlocutory application offset entirely its liability for costs to Mr Stonehouse. This submission was unrealistic. ASIC is entitled to a partial offset only. 103 I mention one further submission of ASIC. This was to the effect that the costs order in favour of Mr Stonehouse should in some way reflect his involvement in the activities relating to the BVI Scheme, it being said that he was responsible with others for the accessorial liability of MOGS. I reject this submission. It is contrary to the findings which I have made concerning Mr Stonehouse in the principal judgment. It is also wrong in principle in that it would involve the Court penalising Mr Stonehouse not because of the manner of his conduct of his defence, but because of some view about the characterisation of his conduct in the matters giving rise to the proceedings. 104 Again, the Court has limited information to assess an appropriate offset in percentage terms but it is reasonable to proceed on the basis that any offset should be modest only. 105 Having regard to all these circumstances, I consider that an appropriate order is that ASIC pay 45% of Mr Stonehouse's costs.

The defendants' liability for costs - general 106 Counsel for Ms Gore submitted that the Court should adopt a similar approach to that of Austin J in Australian Securities and Investments Commission v Vines [2006] NSWSC 760; (2006) 58 ACSR 298 in which, following findings that three defendants had failed to meet the statutory duty of care and diligence contained in the former s 232(4) of the Corporations Law, Austin J said: [268] ASIC seeks an order that the defendants should pay its costs of the proceedings. It submits that there is nothing to suggest there should be any departure from the ordinary rule that costs should follow the event. I think that submission is generally correct, but subject to some qualifications. First, I agree with the submissions made on behalf of the defendants that the costs order should be expressed severally. It would be unfair to the defendants to put ASIC in the position of being able to recover the whole of its costs against one of the defendants, when the hearing related to separate allegations of contravention by each defendant. It seems to me that the appropriate costs order is, prima facie, that each defendant pay one-third of ASIC's costs of the proceeding. 107 As can be seen, Austin J apportioned the liability for costs to ASIC equally between the three defendants. Counsel urged that approach presently and submitted that, after making allowance for some adjustments, Ms Gore's liability for ASIC's costs should be no more than 10%. Counsel for Mr Gore adopted that submission and contended that Mr Gore's liability should be no more than 15%. 108 In my view, the approach of Austin J is not appropriate in the particular circumstances of this case. It would work an injustice to ASIC. Prima facie ASIC should be able to recover from each defendant the whole of the costs it incurred in proving the case against that defendant. The costs which were common to the claims against all defendants were incurred against each defendant even though also incurred in relation to other defendants. Accordingly, the prima facie position should be that ASIC be entitled to recover the whole of the costs it incurred in relation to each defendant from that defendant. The agreements which ASIC reached with each of the ActiveSuper defendants and with Mr Adamson recognised that was so. 109 To do otherwise would mean that each defendant would benefit from the presence of other defendants to the action. It would also mean that ASIC would then carry the risk that it would not achieve a proportional cost recovery from each defendant. A more just result is that it is the defendants who are prima facie liable for the whole of the costs incurred against them who should carry the risk of not being able to recover, by contribution, a rateable proportion of the costs which are common to all. 110 I add that this was not a case in which one or more defendants put forward a separate and distinct defence so that time at trial was taken up in addressing a defendant's individual position. 111 The approach which I consider appropriate is consistent with that adopted by Rares J in City of Swan v Lehman Bros Australia Ltd (No 3) [2009] FCA 1190: [14] Ordinarily, where defendants or respondents in the same interest or participate in the proceedings and fail, as a practical result (but not because of any rule of law or practice) they will be liable jointly and severally to an order that they pay the plaintiffs' costs ... In general, the purpose of an order for costs is to indemnify, at least partially, a successful party ... [15] The consequence of ordering each of the corporate defendants to pay one-third or some other proportion of the Councils' costs severally, would be to put at risk the efficacy of the partial indemnity, were one or more of the defendants either incapable of paying its portion or recalcitrant. Despite their insolvencies, it is not suggested that the corporate defendants will not be able to meet any costs order. I am satisfied that it would not be appropriate or just to reduce their liabilities from being joint and several merely because they were the three unsuccessful active parties. They can seek contribution among themselves after one or more has paid the Councils. In principle, the Councils should be free to seek recovery of the full amount of any costs order against all of the corporate defendants, each of which took an active part in the proceedings. Each of them contributed to the costs being incurred, at least while a party ... in a way which, as between them and the plaintiffs was not readily distinguishable. Each of the corporate defendants was essentially in the same interest, adopting and reinforcing arguments the others put, even though there were some individual substantive (but as the matter proceeded, in the result, not substantial) differences between them ...

The corporate defendants and Mr George 112 By the corporate defendants, I am referring to the four LLCs, SPG, WPO, Cayco and MOGS. These defendants did not defend ASIC's claims at all and took no part in the trial. Had they been the only defendants in the action, ASIC's case against them is likely to have been entirely documentary and is unlikely to have taken more than two days. It is accordingly inappropriate that they should have to bear part of the costs of the 14 day trial necessitated by Ms Gore, Mr Adamson and Mr Gore defending the proceedings brought against them and, for that matter, ASIC's pursuit of its claims against Mr Stonehouse. 113 Although the LLCs were joined as defendants before the other members in this group, I consider that that difference can be ignored for present purposes. The LLCs were joined as defendants on 14 November 2012, less than three weeks before the remaining defendants in this group were joined as defendants, so that the difference between their respective positions is minimal. 114 The worked performed by ASIC in respect of the LLCs, on the one hand, and in respect of the remaining defendants in this group, on the other, was not common but the amount of work performed by ASIC appears to have been approximately similar. 115 Exercising a broad judgment, I consider that it would be just for each of these defendants to be liable for 20% of ASIC's costs, other than the costs which it incurred in pursuing the claims against Mr Stonehouse. I will indicate later what I mean by "ASIC's costs".

The ActiveSuper defendants 116 These defendants can conveniently be grouped together. They were involved in the conduct relating to the SMSFs, the marketing of the US Realty Memorandum and the establishment and marketing of the SPG and WPO PPMs. 117 For separate reasons, none of these defendants participated in the trial. In the case of ActiveSuper and Mr Burrows, this was because they had reached agreement with ASIC shortly before the commencement of the trial on 14 October 2013. In the case of Mr Gibson and Royale Capital, it was because of Mr Gibson's illness. Each had, however, filed defences and in Mr Burrows' case, filed substantial affidavits. It is inappropriate that they bear the costs of the 14 day trial and, in particular, inappropriate that they bear the costs of ASIC's pursuit of the claims against Ms Gore, Mr Adamson and Mr Gore. It is, in any event, inappropriate that they bear the costs of ASIC's unsuccessful claims against Mr Stonehouse. 118 In my opinion, justice will be served if ActiveSuper and Mr Burrows pay 25% of ASIC's costs other than the costs it incurred in the pursuit of its claims against Mr Stonehouse and if Royale and Mr Gibson pay 20% of those same costs. Again, I will return to the concept of "ASIC's costs" for this purpose shortly.

Ms Gore, Mr Adamson and Mr Gore 119 Most of the time in the trial was taken up in ASIC's pursuit of its claims against these defendants (and against Mr Stonehouse). 120 The first question is whether account should be taken of ASIC's lack of success on some of its pleaded causes of action and in particular, its lack of success on causes of action involving Ms Gore. 121 In my opinion, this is not a case in which it is appropriate to apportion costs by reference to ASIC's success or failure on distinct causes of action. The focus at the trial was on a course of events. That focus would have been the same even if ASIC had not made claims under s 911A in respect of Ms Gore and even if it had not made allegations of misrepresentation by silence. Put slightly differently, the Court would still have had to hear the same evidence even without the attempts by ASIC to have those events given a particular legal characterisation. Counsel for the defendants did not point to any respect in which the evidence at trial, or the length of trial, would have been shortened in a material way had ASIC not included the claims on which it failed. 122 The circumstance that ASIC did not make the same claims against all defendants should not, in my opinion, lead to a differentiation in the costs orders. Again, this is because the fact of the different claims did not have a practical effect in the conduct of the trial by making it more prolonged than would otherwise have been the case. 123 I will take account of the circumstance that these defendants were joined to the proceedings on 3 December 2012 only. Ordinarily, the joinder of a party to proceedings does not have the consequence that the new party is not liable for any of the plaintiff's costs incurred before the joinder. On the contrary, the new party will be so liable if some of the pre-joinder work related to the claim against it. Just as in ordinary litigation, a successful party will usually be entitled to recover costs in respect of work reasonably performed prior to the commencement of the proceedings against the defendant, so also when a defendant is joined to existing proceedings. 124 However, ASIC did not seek to have this approach applied in the present case. It accepted that it was not entitled to recover from these defendants the costs of work performed before 3 December 2012. Effect should be given to that acknowledgement. 125 Some account should be taken of the circumstance that some time at trial was taken up in addressing case management issues involving the ActiveSuper defendants. These defendants should not have to pay ASIC's costs in that respect. 126 Account should also be taken of Mr Adamson's agreement with ASIC at an early stage in the trial. That did result in some shortening of the trial time devoted to ASIC's claims against him. ASIC also agreed that Mr Adamson should not have to pay any of its costs with respect to the LLCs. 127 Although there are some differences in the respective positions of Mr Gore and Ms Gore (for example, ASIC failed on claims against Ms Gore whereas it succeeded on those claims against Mr Gore, but Ms Gore's interlocutory application of 10 December 2012 failed), I think it appropriate to regard their positions as substantially the same. 128 Balancing all these considerations out, I consider it appropriate that each of Ms Gore and Mr Gore pay 80% of ASIC's costs (other than the costs of its pursuit of the proceedings against Mr Stonehouse) and that Mr Adamson pay 70% of those costs.

The quantification of ASIC's costs 129 In the orders outlined so far, I have identified percentage amounts which each defendant should pay in respect of ASIC's costs (other than the costs of its pursuit of the proceedings against Mr Stonehouse). 130 Again, I consider it desirable to provide for a ready means of the identification of the costs to which the individual percentages should be applied and, again, to do so in percentage terms. 131 I think it likely that costs incurred by ASIC which relate distinctly to the pursuit of its proceedings against Mr Stonehouse are a small proportion of its overall costs. Account should also be taken of those costs incurred by ASIC in relation to each defendant which did not concern any other defendant. Again, I consider that this is relatively minor. It is reasonable to suppose that these costs would be of the order of 5% of ASIC's overall costs in the proceedings. Accordingly, ASIC's costs should in each case be taken to be 95% of the party-party costs to which it would otherwise be entitled if entitled to recover the whole of its costs of the proceedings from a single party. In the case of Ms Gore, Mr Adamson and Mr Gore, that should (in order to reflect ASIC's acknowledgement) be 95% of ASIC's party-party costs incurred after 3 December 2012.

Prevention of double recovery 132 If ASIC enforced each of the orders for costs which I contemplate, it would recover more than 100% of its costs. Obviously that is inappropriate. There will accordingly be an order that once ASIC has recovered 95% of its party-party costs and in the case of Ms Gore, Mr Adamson and Mr Gore, 95% of its post 3 December 2012 costs, any further enforcement of these orders is stayed. 133 It will then be for the parties who have satisfied ASIC's entitlement to seek contribution from the other defendants.

Summary on costs 134 In summary, I will make costs orders to the following effect: (a) ASIC is to pay to Mr Stonehouse 45% of his party-party costs; (b) The LLCs, SPG, WPO, Cayco, MOGS and Mr George are each to pay 20% of 95% of ASIC's party-party costs in the proceedings; (c) Each of ActiveSuper and Mr Burrows is to pay 25% of 95% of ASIC's party-party costs in the proceedings; (d) Each of Royale and Mr Gibson is to pay 20% of 95% of ASIC's party-party costs in the proceedings; (e) Each of Ms Gore and Mr Gore are to pay 80% of 95% of ASIC's party-party costs in the proceedings in respect of work performed after 3 December 2012; and (f) Mr Adamson is to pay 70% of 95% of ASIC's party-party costs in the proceedings in respect of work performed after 3 December 2012. Once ASIC has recovered 95% of its party-party costs in the proceedings, any further enforcement of these orders is stayed.

Winding up orders 135 No party made any submission concerning the form of the orders for the winding up of the corporate defendants. I will make orders in the terms proposed by ASIC. I certify that the preceding one hundred and thirty-five (135) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.

Associate: Dated: 29 May 2015 Schedule Defendants: Second Defendant: ACN 143 832 053 PTY LTD (ACN 143 832 053) Third Defendant: JASON GRANT BURROWS Fourth Defendant: JUSTIN LUKE GIBSON Fifth Defendant: U.S. REALTY INVESTMENTS #1, LLC (L-1666059-6) Sixth Defendant: U.S. REALTY INVESTMENTS #2, LLC (L-1666058-5) Seventh Defendant: U.S. REALTY INVESTMENTS #3, LLC (L-1668734-4) Eighth Defendant: U.S. REALTY INVESTMENTS #4, LLC (L-1668736-6) Ninth Defendant: SYNDICATED PROPERTY GROUP LTD Tenth Defendant: WORLDWIDE PROPERTY OPPORTUNITIES LTD Eleventh Defendant: CAYCO MANAGEMENT Twelfth Defendant: MOGS PTY LTD Thirteenth Defendant: JEFFREY GEORGE Fourteenth Defendant: GRAEME STONEHOUSE Fifteenth Defendant: MARINA GORE Sixteenth Defendant: MARK GORDON ADAMSON Seventeenth Defendant: CRAIG KIRRIN GORE Eighteenth Defendant: MASH INVESTMENTS PTY LTD (ACN 149 597 384)