Citius Property Pty Ltd v Logos Australia Group Pty Ltd [2022] VSC 656

PRACTICE AND PROCEDURE - Application by plaintiff to re-open case at conclusion of trial - Spotlight Pty Ltd v NCON Australia Ltd [2012] VSCA 232; (2012) 46 VR 1 considered - Application refused because, among other things, even if allowed, further evidence would not change the outcome of the proceeding.

1 The plaintiff (Citius) provides strategic consultancy services including assisting in the purchase and development of industrial properties for a fee. It brings claims in respect of an agreement allegedly entered into with the defendant (Logos) on or about 2 March 2016 (the alleged agreement). The alleged agreement related to an opportunity to purchase and develop two adjoining properties, including one of about 21 hectares, being lots 23 and 24 Hollinsworth Road, Marsden Park, Western Sydney (the Hargreaves Property).

2 The defendant is part of the Logos Group, often referred to as Logos Property. The Logos Group is a developer and fund manager of real estate, in particular, real estate which services the logistics and transport industries. At the time of the alleged agreement, the Logos Group had entered into a joint venture with the Abu Dhabi Investment Authority (ADIA) for the purpose of acquiring and developing real estate projects in Australia to create a portfolio of logistics facilities to be held on a long term basis (the joint venture). As part of the joint venture, ADIA holds a 95% interest and the Logos Group holds a 5% interest.

3 At the time of the alleged agreement, the Hargreaves Property was owned by EJ Cooper and Sons Pty Ltd (EJ Cooper) which had granted an option to purchase the Hargreaves Property to MP3 Pty Ltd (Hargreaves or MP3). The alleged agreement also related to an adjoining property of about 20 hectares, being lots 21 and 22, Hollinsworth Road, Marsden Park, Western Sydney and owned by Busways (the Busways Property or the Adjoining Property). For convenience I will refer to the Hargreaves Property and the Busways Property collectively as the Marsden Park properties.

4 The nature of the alleged agreement pursued at trial was different from the nature of the agreement alleged in the amended statement of claim dated 15 October 2020 (ASOC). In summary, in the ASOC, Citius alleged that (the ASOC agreement):

(1) Citius would introduce Logos to the Hargreaves Property and Logos would enter into a heads of agreement with Hargreaves in order for Logos to undertake a due diligence process as to the feasibility of the commercial development of the Hargreaves Property (the Project), with this due diligence to be managed by Citius;

(2) if Logos then purchased the Hargreaves Property, Logos would engage Citius to act as the development manager of the Project (which was expected to take four years) and as the project manager for the construction of the Project; and

(3) Citius and Logos would be paid in respect of the work performed half of the fees that Logos (or a related entity) would receive in respect of the acquisition and development of the Hargreaves Property under its joint venture with ADIA. I will deal with the nature of those fees (which were in dispute) further below.

5 At trial, Citius maintained the terms of the agreement at [4](1), but instead of [4](2), asserted that under the agreement Citius and Logos would jointly perform development management and project management services with the determination of the services which Citius would in fact perform being at the direction or election of Logos.

6 Further, in closing submissions, Citius submitted in relation to [4](3) above (arising from the changes referred to in the previous paragraph) that Citius was not required to perform any work to receive payment of half of the fees that Logos (or a related entity) would receive from the joint venture (collectively the alleged reframed agreement).

7 As is evident, the alleged reframed agreement is a very different form of agreement to the ASOC agreement, notwithstanding that Citius appeared to dispute that this was so. As a result, I requested Citius to consider whether amendments were necessary to the ASOC to reflect the alleged reframed agreement, its terms (including the relevant particulars) and the breaches in fact relied upon by Citius. On the first day of oral closing submissions I allowed Citius to amend its claim to allege the alleged reframed agreement in a further amended statement of claim (FASOC). This was because the basis of the agreement alleged in this proceeding has always been primarily based upon: (1) a conversation on 29 February 2016 between the principals of Citius and Logos (the 29 February conversation); and (2) emails between them on 1 March 2016 and 2 March 2016 (4.51pm). This was also because of the way in which the trial was conducted. However, I granted leave to file the FASOC on the condition that Logos be able to cross-examine the principal of Citius on the reframed term relating to payment.[1]

8 As to the nature of the fees, at all relevant times until written closing submissions Citius alleged that Logos would pay four fees to Citius, based on the fees payable to the Logos Group under its joint venture with ADIA:

(1) an acquisition fee of the equivalent of 0.25% including GST;

(2) a development management fee of the equivalent of '2.5% of all commercial development costs, excluding the [Hargreaves Property], until the completion of the Project';

(3) a project management fee being equivalent to '0.625% of the commercial development costs until the completion of the Project';[2] and

(4) an incentive fee, being in the nature of a performance fee and which fee would be equivalent to 50% of that part of the Performance Fee payable to the Logos Group pursuant to its joint venture in respect of the Hargreaves Property.

9 Logos disputed the facts giving rise to, and the existence of, the ASOC agreement or the alleged reframed agreement. For convenience, where appropriate, when referring to the ASOC agreement and/or the alleged reframed agreement I will refer to the alleged agreement. There were two central but related issues at trial, namely, having regard to the 29 February conversation and the early March emails:

(1) whether the parties intended to create a binding contract or to make a concluded bargain (the intention issue); and

(2) assuming there was such an intention, whether the parties reached agreement on sufficient terms to constitute a legally enforceable agreement (the enforceability issue).

10 Logos submitted that that there was no intention to create an immediately binding agreement and that there was no enforceable agreement reached. In summary, Logos relied upon incompleteness and uncertainty as to the parties, the property which was the subject of any agreement, the scope of services which Citius was to perform and the fees which Citius was to receive, including the structure of the payment of fees during the alleged reframed agreement and on its early termination. It disputed the incentive fee was capable of calculation given the fee payable under the joint venture was payable by reference to all joint venture properties. Indeed, Logos submitted that the differences between the ASOC agreement and the alleged reframed agreement illustrated that there was no meeting of the minds.

11 Further, Logos submitted that the nature of the alleged reframed agreement with Citius at that point in time (early March 2016) was commercially absurd and was inconsistent with any enforceable agreement or an objective intention to create one. Logos submitted that entering into a legally binding agreement in respect of project management and development management services of the kind alleged by Citius (amounting to millions of dollars) before the address of either of the Marsden Park properties had even been disclosed to Logos was commercially absurd. This was particularly so if the entire amount of the fees were payable in the event Logos did not direct Citius to perform project management and development management services, or in the event of early termination of the alleged reframed agreement.

12 As to the facts, at all times Citius alleged that, pursuant to the alleged agreement:

(1) Citius introduced Logos to the Hargreaves Property with the intention that the Hargreaves Property would be purchased as one of the portfolio properties owned by the joint venture;

(2) Logos then entered into a heads of agreement with Hargreaves in relation to that purchase which included a due diligence process in respect of the Hargreaves Property (the DD process);

(3) Citius managed the DD process in respect of the Hargreaves Property; and

(4) Following the DD process, in July 2016, Logos purchased the Hargreaves Property as one of the portfolio properties of the joint venture.

13 Further, at all times Citius alleged that, from July 2016, it acted as the development manager and project manager. Citius also alleged that in breach of the alleged agreement, Logos:

(1) refused to pay invoices for the work done;

(2) prevented Citius from performing its development management and project management duties, including by refusing to execute a development management agreement;

(3) failed to disclose the manner of the calculation of the Performance Fee that Logos (or a related entity) would receive under the joint venture; and

(4) denied the alleged agreement was legally binding and enforceable.

14 Logos did not dispute the substance of these allegations on the basis that it contended that no agreement was ever reached between them. However, it disputed that Citius managed the DD process. It acknowledged that a number of invoices for work done by Citius were paid by Logos in 2016.

15 At all times Citius alleged that it accepted Logos's repudiation on 10 April 2017 or by issuing the proceeding. However, Logos submitted that the alleged reframed agreement raised different issues of breach and repudiation to those alleged in the ASOC and which were not addressed in the FASOC. I will deal with this further below. It suffices to say that Logos also denied the existence of the alleged reframed agreement.

16 In the ASOC, Citius sought damages, alleging it had the 'lost the benefit' of the alleged agreement. Citius claimed that it was entitled to unpaid invoices totalling $154,748, a 'Development Management Fee' of $2,878,187 and a 'Project Management Fee' of $630,796. It also claimed it was entitled to an 'Incentive Fee', which was not able to be ascertained because the basis of its calculation had not been disclosed by Logos and/or the Performance Fee had not in fact been paid to Logos.

17 In written closing submissions, Citius sought damages for only 50% of a development management fee of $6,570,788 (the amount of which was agreed between the legal advisers for the parties) and an incentive fee which was based upon the Performance Fee in fact paid on 16 December 2021 (which Citius estimated in the order of $12 million). Citius also sought damages for the first time for the unpaid portion of the acquisition fee which it in the sum of approximately $243,000.

19 Further, Logos also issued a counterclaim. As to the counterclaim, Logos alleges that Citius made representations relating to Citius's ability to control and lease the Marsden Park properties (the Development Representations) which were false and misleading in contravention of the Australian Consumer Law, being sch 2 to the Competition and Consumer Act 2010 (Cth) (ACL). It alleged that:

(1) between 26 February and 2 March 2016, Citius represented to Logos on a number of occasions that:

(a) it had control of the 40 ha site which made up the Marsden Park properties (the Control Representation); and

(b) it had a tenant or tenants for the 40 ha site which made up the Marsden Park properties (the Tenant Representation);

(2) if Logos entered into any agreement with Citius, it was induced to do so by reason of the Development Representations; and

(3) but for the Development Representations, it would not have entered into any agreement relating to the Hargreaves Property with Citius but would have identified MP3 as the option holder and effected a transaction to similar effect but without the involvement of Citius.

20 Thus, Logos sought an order rescinding any agreement with Citius or, if it is not entitled to an order for rescission, damages in excess of the amount of Citius's restitution claim (which claim was not pursued at trial).

21 Logos also alleged that the Development Representations were conditions precedent to any binding agreement with Citius (the Development Conditions) and that Logos would never agree to pay fees of the kind claimed by Citius without being assured that Citius had control of, and tenants for, the Hargreaves Property: otherwise it would have just paid an agents' fees to Citius.

22 For the reasons that follow, in respect of the alleged reframed agreement, I have concluded that:

(1) Citius has not established that the parties intended to create an immediately binding contract on or about 2 March 2016; and

(2) assuming there was such an intention, the parties did not reach agreement on sufficient terms in the alleged reframed agreement to constitute a legally enforceable agreement.

23 As a result, it is unnecessary to address further the claims for damages under the alleged reframed agreement, or the counterclaim. Nevertheless, in light of the relationship between the issues in the claim and counterclaim, I have concluded in respect of the counterclaim that:

(1) Citius did not make the Development Representations: this is because, while Citius made the Control Representation on 26 February 2016 it did not make the Tenant Representation;

(2) as a result of (1) it is not necessary for me to consider whether Logos has established that the Development Representations were false and misleading in contravention of s 18 of the ACL or that, but for the Development Representations, it would not have entered into the alleged reframed agreement; and

(3) nevertheless, the Control Representation made on 26 February 2016 was false and misleading.

24 The parties identified a list of key issues for determination in the proceeding. In summary, they relate to whether:

(1) the alleged agreement is binding and enforceable and, if so, any amounts that are payable to Citius; and

(2) whether the Development Representations were made and, if so, whether the alleged agreement remained on foot.

25 As a result of the FASOC, the issues that remain to be resolved are as follows:

Did Citius and Logos enter into a binding agreement on or around 2 March 2016 in relation to the commercial development of Lots 23 and 24 Hollinsworth Road, Marsden Park [i.e. the Hargreaves Property]?

If the parties did enter into a binding agreement, then was the agreement void for uncertainty?

If the parties did enter into a binding agreement, then what were the terms of the agreement?

If there was a binding agreement, then did Citius represent to Logos that:

(a) it had control of the [Marsden Park properties] [i.e. the Control Representation]; and/or

(b) it had a tenant or tenants for the [Marsden Park properties] [i.e. the Tenant Representation]?

If the answer to 4(a) and/or 4(b) is "yes", is it the case that, but for those Development Representations, Logos would not have entered into the agreement?[3]

If the answer to the previous question is "yes", then:

(a) is Logos entitled to rescind the agreement pursuant to s 237 of the [ACL] or in equity?

(b) is Logos entitled to damages under s 236 of the [ACL]?

If Logos is entitled to damages under s 236 of the [ACL], then what is the amount of damages to which it is entitled?

If there was a binding agreement, was Logos required to make any payments to Citius under the terms of that agreement?

If the answer to the previous question is "yes", then what was the amount which was payable to Citius by Logos under the terms of the agreement?

If there was a binding agreement, then is the amount payable to Citius by Logos to be reduced by reason of the amounts which Citius would have been required to expend in the performance of the works required to be done, and if so, by what amount?

If there was a binding agreement, then is the amount payable to Citius by Logos to be reduced by reason of any benefits derived by Citius from alternative projects it was able to undertake by reason of its resources not being applied to discharge its obligations under the agreement?

26 It is obvious from what I have said that there were changes in the contract claim made by Citius. There were also changes in the particulars relied upon in support of the agreement alleged. The particulars to the ASOC agreement in [5] of the ASOC were extensive: oral particulars of communications from February 2016, written particulars of communications from 26 February and implied particulars (including from conduct between March and November 2016 and by law).

27 By contrast, in written closing submissions, Citius submitted that the alleged reframed agreement was reached on 2 March 2016. As a result the 'contractual communications' relied upon on in section D.2 of the written closing submissions of Citius were much more confined (the relevant contractual communications), namely:

(1) the 29 February conversation;

(2) the email from Mr Simon Tobin of Citius to Mr Trent Iliffe of Logos on 1 March at 9.47am (the 1 March email); and

(3) the email from Mr Iliffe to Mr Tobin on 2 March 2016 at 4.51pm (the 2 March (4.51pm) email).

28 Citius relied upon earlier communications alleged in the particulars to [5] of the ASOC as 'pre-contractual communications'. As noted above, I gave counsel for Citius the opportunity to bring the pleadings in line with the alleged reframed agreement before oral closing submissions commenced. However, the particulars (in so far as they were alleged to be in writing or oral) in the FASOC of the alleged reframed agreement and its terms were the same as in [5] of the ASOC. This uncertainty was, to say the least, unhelpful.

29 I raised this issue with counsel for Citius in the application to re-open Citius's case on 22 June 2022. I advised that I would proceed on the basis that the relevant contractual communications in the written closing submissions of Citius were the relevant communications relied on to constitute the alleged reframed agreement. Counsel agreed this was so by email dated 24 June 2022 to my chambers. However, I am conscious that in oral closing submissions, Citius also contended that some of the terms were at least partly implied.[4]

30 Further and for completeness, in oral closing submissions, counsel for Citius sought to further amend the particulars to the terms alleged in [6](f) and [6](g) by including reference to the 1 March email. I determined to allow the amendment because the 1 March email has always been central to the alleged agreement and there was no prejudice caused by the amendment.

31 In addition, after concluding oral closing submissions, counsel for Citius also sought to re-open Citius's case. I will deal with the re-opening application further below. It suffices to say that I have not allowed the re-opening application. However, in the hearing of the re-opening application, it was evident that the FASOC did not reflect in a minor way the amendments intended to be made by Citius. As a result, I granted leave to file a second further amended statement of claim (the 2FASOC) which included the changes to the particulars to the terms alleged in [6](f) and [6](g). While I am conscious of these minor amendments in the 2FASOC, for convenience, hereafter in these reasons I will refer to the FASOC unless indicated to the contrary.

32 As is evident from what I have said above, most of the facts relevant to the determination of this proceeding took place approximately six years ago. Indeed, the content of conversations held in 2016 (particularly in late February 2016) were the subject of detailed cross-examination. It is difficult to recall with any precision what someone said, what someone heard or what someone believed all that time ago. Common experience tells us that the more significant the issue is to a person, the more likely it is that he or she will recall the event, even after a long period of time. However, it is important to acknowledge that, in such circumstances, a person's recollection may be coloured by feelings, by emotion and by personal interest.

33 This seems true in this case. On the one hand, Mr Tobin's company, Citius, claims in this proceeding that it has been denied fees in the order of approximately $19 million pursuant to the agreement he alleges was reached with Logos. That is a very substantial sum of money to anyone, including each of Citius and Logos. On the other hand, Logos claims that no such agreement was reached and that Citius is not entitled to any such sum.

34 Further, Logos submitted that the principal witness for Citius (Mr Tobin) was not telling the truth before me and had 'an essentially deceptive approach to business'.

35 As I have noted in previous judgments, judges are not given special powers to discern whether a particular witness is not telling the truth. Consistent with practice and common sense, I consider the surest test to determine credibility and reliability in any criminal or civil case is to assess:

the inherent consistency of the witness' account; the consistency of that account with those of other witnesses; the consistency of that account with undisputed facts; the 'credit' of the witness (based upon matters which include, for example, demeanour); any relevant infirmities of the witness; and, importantly, the inherent probability or improbability of the evidence in question.[5]

36 As a result of all these issues, it is my usual practice in considering the credibility and reliability of witnesses to rely very much upon the contemporaneous documents produced in evidence, the objective facts, and the inherent probability or improbability of oral evidence.

37 However, in this proceeding, Logos submitted that some of the contemporaneous documents created by Mr Tobin were not accurate or indeed truthful. This applied in particular to the 1 March email sent after the 29 February conversation. I will deal with this further below.

38 Citius called three witnesses. First, it called Mr Simon Tobin who has been and remains the sole director of Citius since it was established. Prior to establishing Citius in 2002, Mr Tobin worked for a company called CRI which also conducted development and project management services. CRI was based in Sydney and Mr Tobin ran its Victorian office. During his time at CRI, Mr Tobin was involved in development and project management services for large logistics facilities predominantly in Victoria. However, some of his work was in New South Wales.

39 Citius is a property development and project management company which provides strategic consultancy services. Citius has a number of large institutional clients including DEXUS, Colonial Funds Management and CBUS. It has also acted for large industrial and logistical users such as Coles and Woolworths. Citius works with these clients to provide project development and management services in relation to projects such as large warehouses and distribution centres, and in relation to civil works to service those projects (such as power, water, sewerage, roads etc.). Since Citius was established, it has undertaken work predominantly in Victoria.

40 Mr Tobin gave evidence of the work undertaken by Citius, his introduction to the Marsden Park properties and his dealings with Logos from early 2016 in relation to them. Mr Tobin further gave evidence of the work performed by Citius from early March 2016 during the due diligence process and in the development management and project management phase. He also gave evidence of his dealings with Logos after the contract to purchase the Hargreaves Property was signed in July 2016.

41 I found Mr Tobin to be experienced and knowledgeable in relation to project development and project management. I formed the view that he was a man who was keen to do a deal and was dogged in his attempts to ensure a deal was done. This is evidenced from the contemporaneous documents relating to this transaction with Logos and from the correspondence with another investor client of Citius (M&G Asia Property Fund, M&G) which determined not to pursue the Marsden Park opportunity.

42 As to his evidence, Mr Tobin rarely answered a question directly. This appeared due in part to the fact that he attempted to determine the purpose of the question before formulating his answer, rather than simply answering the question. Indeed, on one occasion, he answered a question to the effect that he was not sure of the point the cross-examiner was trying to make.[6] Further, and relatedly, his answers often sought to argue his case rather than directly address the question asked.

43 As to his credit, consistent with my conclusion that Mr Tobin was dogged to do a deal, I formed the view that Mr Tobin is a person who in the hope of achieving financial gain is prepared to lie, or (at the very least) to withhold the whole truth, thus creating a false and misleading impression. The clearest example is his email to Mr Wall dated 26 February 2016 (the 26 February Citius email). I will deal with this email and Mr Tobin's evidence in relation to it further in section 6.5 below. It suffices to say that I have formed the view that Mr Tobin wrote this email with the intention of conveying to Hargreaves that M&G may still enter into a heads of agreement in relation to the Hargreaves Property when he knew by 25 February (at the latest) that M&G was no longer interested in pursuing the Hargreaves Property. He did not tell the truth in that email.

44 In addition, I have formed the viewed that at times Mr Tobin gave evidence which exaggerated or misstated the true position in order (as he saw it) to improve Citius's prospects of success in the proceeding. That is evident from my narrative of events.

45 For example, there was a continuing issue at trial about whether Citius had entered into an agreement with Hargreaves in relation to the Hargreaves Property in late February 2016. This is notwithstanding that no heads of agreement was signed by Hargreaves and notwithstanding the fact that M&G was no longer interested in purchasing the Hargreaves Property after 24 February 2016. This issue was relevant to the Control Representation and more generally to Mr Tobin's credit and reliability.

46 I will deal with Mr Tobin's evidence in relation to any such agreement further in sections 4.4, 6.1.1 and 8.2 below. It suffices to say that I found his evidence both inconsistent with the objective facts and with his own evidence. Further, I consider it was disingenuous of Mr Tobin to assert that there was an 'agreement' with Hargreaves for the purchase of the Hargreaves Property in late February or by 2 March 2016 when Citius (which could not fund the purchase itself) had been unable to identify a purchaser who had the capacity to buy it, and had not agreed with Hargreaves on the due diligence period.

47 As noted above, Logos submitted that Mr Tobin had 'an essentially deceptive approach to business' and that his evidence in this case exhibited strong signs of being reconstructed or tailored to assist Citius's case. On the evidence before me, I am unwilling to accept such a general submission to the effect that Mr Tobin had 'an essentially deceptive approach to business'. However, I refer to my comments in above, in particular [43] and [44]. In the circumstances, the real concerns I have about Mr Tobin's credit set out in this section have led me to consider very carefully his oral evidence and the documents he created, particularly in light of the contemporaneous facts and contemporaneous documents emanating from others.

48 Second, Citius called Graham Hemingway, an experienced licensed real estate agent who conducted his real estate business in 2016 through Gill Property Pty Ltd. Mr Hemingway gave evidence pursuant to a subpoena issued by Citius. Mr Hemingway had dealt with each of Mr Tobin and Mr Iliffe in a professional capacity prior to 2016. He continues to deal with each of them. He gave evidence that, with the consent of Mr Tobin, he introduced Mr Iliffe to the opportunity to acquire the Marsden Park properties in mid-February 2016. He also gave evidence of being with Mr Tobin during an important telephone conversation with Mr Iliffe on 29 February 2016. I found Mr Hemingway to be an honest witness. In his evidence he frankly conceded that he now had little recollection of what was said in 2016 but gave evidence of the matters he could recall, or his impression of them, in a direct way. As a result, I have not placed any great weight on this evidence.

49 Logos called a number of witnesses including five lay witnesses and one expert witness. First, Logos called Mr Trent Iliffe who is the joint managing director of the Logos Group. Before establishing the Logos Group with John Marsh in 2009, Mr Iliffe worked as a real estate agent and later for LaSalle Investment Management in China. As to the business of the Logos Group, I refer to my comments in [2] above.

50 Mr Iliffe and Mr Marsh own a part of the Logos Group through their respective companies. As a result, Mr Iliffe and Mr Marsh are directors of many entities in the Logos Group. One other corporate investor in the Logos Group is the Macquarie Group.

51 The Logos Group was originally established in Australia. It now has 29 development funds across 10 countries for a range of institutional capital partners who develop logistics facilities for tenants or customers such as DHL, Amazon and Alibaba. In summary the Logos Group:

(1) identifies land for acquisition, obtains development approvals and secures investor approval;

(2) develops the land on behalf of the particular investor; and

(3) sources tenants to fill the buildings constructed on developed land and has an ongoing management role to deliver returns for investors.

52 As to the experience of Mr Iliffe, by early 2016 Mr Iliffe had significant experience in acquiring land and being part of the process of development by reason of working for LaSalle Investment Management and the Logos Group. In particular, he had experience both in relation to the requirements of development management and project management, including in relation to the construction of logistics facilities and warehouses.

53 Mr Iliffe had limited dealings with Mr Tobin in the year or two prior to early 2016. Mr Iliffe gave evidence that he understood in early 2016 that Citius was a project management company and that Citius was not in the business of investing millions of dollars in facilities in the way that the joint venture would. Mr Iliffe recalled speaking to Mr Marsh prior to February 2016 about Mr Tobin's reputation and ability if Logos were looking to do something in Melbourne.

54 Mr Iliffe's credit was challenged in cross-examination. I formed the view that Mr Iliffe is knowledgeable in relation to projects for the acquisition of land for the construction of logistics facilities and in relation to the development and project management for such projects.

55 As to his evidence, for the most part, and unlike Mr Tobin, Mr Iliffe answered questions directly. However, in my view, at least initially, he gave evidence which was consistent with the case of Logos, and in particular, its counterclaim relating to the Development Representations. For example, initially he gave evidence, in substance, that Mr Tobin said he 'had control' and 'had tenants'. However, when further questioned, he acknowledged that Mr Tobin in fact said he had 'strong tenant interest' and/or 'strong demand from tenants'. I will deal with this further below.

56 Based on the evidence before me, I formed the view that he was a successful, shrewd and determined businessman, who was very focused on the success of the Logos Group. Mr Iliffe appeared a 'deal maker' within the Logos Group, by which I mean someone who focuses on, and pursues, commercial opportunities and commercial outcomes for Logos and its investors.

57 The 1 March email and Mr Iliffe's response to it were central to the issues in this proceeding. The 1 March email sought Mr Iliffe's 'confirmation' of the terms contained in that email, as a result of which Citius was prepared to disclose the details of the Marsden Park properties to Logos. Many of the terms contained in the 1 March email were expressed to have been discussed or agreed in the 29 February conversation between Mr Tobin and Mr Iliffe. Mr Iliffe responded by the 2 March (4.51pm) email stating '[i]n principle we are ok' with the matters set out in the 1 March email subject to two qualifications (the Logos qualification). However, in the 2 March (4.51pm) email, Mr Iliffe did not correct many of the other inaccuracies which he asserted at trial were contained in the 1 March email. Nor did he do so in subsequent correspondence.

58 Mr Iliffe explained in evidence that this was because he thought it was 'too early' in the course of the negotiations with Citius to do so. I will deal with this evidence further below. It suffices to say that I do not accept that evidence, particularly given the language of the 1 March email. Rather, I have formed the view that it is likely that Mr Iliffe decided it was not in the commercial interests of Logos at that time to express any more detail of his concerns about the 'agreement', which Mr Tobin asserted had been reached in the 1 March email, other than the Logos qualification. I refer to my comments in section 8.1 and 8.3 below.

59 Further and relatedly, Mr Tobin contacted Mr Iliffe on a number of occasions to resolve outstanding issues in relation to Citius's involvement in the development of the Hargreaves Property from about early March 2016. However, Mr Iliffe chose not to contact or deal with Mr Tobin over this period. On occasions, he delegated this role to more junior executives (like Mr Singh or Mr Mead) who either appeared not fully briefed by Mr Iliffe about his discussions and communications with Mr Tobin, or lacked the authority to reach an agreement with Mr Tobin without Mr Iliffe's approval. In my view, such conduct on the part of Mr Iliffe does him no credit_._

60 The concerns I have about Mr Iliffe and his evidence have led me to consider carefully his oral evidence, particularly in light of the contemporaneous facts and contemporaneous documents.

61 Second, Logos called two continuing employees of the Logos Group and one former employee: David Timso, Sean Singh and Andrew Mead.

62 Mr Mead is a qualified civil engineer and is now a semi-retired consultant. From July 2015 to January 2021 he was the Development Director at the Logos Group. In this role, he was responsible for overseeing management and development activities which included due diligence and site acquisition. For the most part he gave evidence about a conversation on 26 February 2016 between Mr Hemingway and Mr Tobin on the one hand, and Mr Timso and himself on the other.

63 Mr Timso is currently Group Executive of Property at the Logos Group. Between 2013 and 2018, he was the General Manager of Asset Management at the Logos Group. His role in 2016 was to oversee the Australian based portfolio of the Logos Group which included overseeing developed assets, the acquisition of new assets and the disposal of existing assets. For the most part he gave evidence about the conversation with Mr Hemingway, Mr Tobin and Mr Mead on 26 February 2016.

64 Mr Mead struck me as direct and straight talking. He was frank in acknowledging his limited recollection of events and, in particular, the details of the conversation on 26 February 2016. However, he was able to recall some matters of significance to him at the time. Mr Timso had a clearer recollection of the events leading up to, and the conversation on, 26 February 2016. He gave answers in a responsive way to the best of his recollection. I formed the view that each of Mr Mead and Mr Timso was a credible witness.

65 Mr Singh has a Bachelor of Property Economics and a Masters of Applied Finance. He is currently the Head of Fund Management for the Logos Group. From May 2015 until June 2020, Mr Singh was a Fund Manager of two funds within Logos, the LALV Trust and another fund. In that role, he was responsible for managing the investment strategy and the performance of various property funds that the Logos Group managed, including the LALV Trust. That role involved overseeing and making recommendations regarding investment activities, including the acquisition of properties, the proposed development of properties, the divestment of properties and the financing of properties and projects. Mr Singh was also involved in overseeing the execution of legal documents relating to these investments, monitoring performance and reporting back to the investor.

66 Mr Singh gave evidence as to his dealings in relation to the Hargreaves Property from early March 2016, including his dealings with Mr Tobin, with Hargreaves and its representatives, and his internal dealings within the Logos Group, including with Mr Iliffe. In addition, Mr Singh gave evidence about how the Performance Fee was calculated and whether it was possible to calculate such a fee based only on the performance of the Hargreaves Property.

67 I formed the view that Mr Singh was a credible and reliable witness. He gave his evidence in a clear and considered way and provided his best recollection of relevant events. Mr Singh acknowledged that on occasions he had to refer Mr Tobin to Mr Iliffe as he did not have first-hand knowledge of the relevant events or issues.

68 Further, I formed the view that Mr Singh was intelligent and knowledgeable in his area of expertise. Notwithstanding his continuing position in the Logos Group, his evidence in relation to the possibility of calculating the Performance Fee by reference to the Hargreaves Property was considered, fair and balanced. I also considered this part of his evidence both credible and reliable.

69 Third, Logos called Michael Wall, who is now an industrial real estate agent at Savills. From 2013 to 2019, Mr Wall worked at Jones Lang LaSalle (JLL). In early 2016 his title was 'Head of Industrial NSW' for JLL. Mr Wall gave evidence about introducing Mr Tobin to the Marsden Park properties, negotiations between Hargreaves and Citius in relation to the Hargreaves Property when Citius was itself negotiating with M&G as potential purchaser, and the negotiations between Hargreaves and Citius when Citius was negotiating with Logos as potential purchaser. For the most part I found Mr Wall to be an honest witness.

70 Fourth, Logos relied upon the expert reports of Greg Incoll dated 8 March 2021 and 31 January 2022. Mr Incoll is a project and development manager with 40 years' experience. In summary, Mr Incoll's reports provided evidence about the role of a development manager and a project manager in the context of the development of a 20 ha industrial site and the key commercial elements ordinarily associated with development and project management agreements. Mr Incoll's evidence was not challenged by Citius: indeed, he was not cross-examined.

71 I wish to note at this stage that in correspondence between the parties and in evidence reference was commonly made to the 'site'. It was often difficult to ascertain whether this was a reference to the Marsden Park properties or one of them i.e. the Hargreaves Property or the Busways or Adjoining Property. On occasions, it was possible to ascertain the meaning based upon the use of the word 'site' in its context. On occasions, in the course of evidence, I requested that the witness clarify what he meant by the use of the word 'site'. I wish to record at this stage that on occasions I have been unable to determine whether the use of the word 'site' referred to the Marsden Park properties or one of them. However, in these reasons, I have used the word 'site' where that term was referred to by the witness or in a relevant document.

72 There are two issues very relevant to this proceeding which it is appropriate to address before I set out the relevant events.

73 The first issue is the relationship between the Logos Group and ADIA, and the fees payable to the Logos group by reason of that relationship. This is because the Hargreaves Property was purchased for the joint venture between ADIA and the Logos Group. The second issue is the nature of development management services and project management services, which were alleged to be the subject of the alleged agreement, and which each of Citius and Logos provided prior to 2016.

74 In summary, in about 2014, ADIA (through a related company, Harina Company Limited) and the Logos Group entered into a joint venture for the purpose of acquiring and developing logistics real estate projects in Australia to create a portfolio of logistics facilities to be held on a long term basis. I refer to my comments in [2] above.

75 Pursuant to the arrangement, the Logos Group would identify the sites and provide development management and project management services to deliver logistics facilities with secure tenants. The Logos Group received fees for providing these services to the joint venture. I will deal in this section with the services provided (including the distinction between development management and project management) and the fees payable for those services.

76 The joint venture vehicle was a unit trust called the Logos Australian Logistics Venture Trust (the LALV Trust) with The Trust Company (Australia) Limited as trustee (the LALV Trustee). The arrangements in relation to the joint venture are recorded in agreements in evidence before me, namely:

(1) the Unitholders' Agreement between Harina, Logos Australia Investments Pty Ltd, and the LALV Trustee, which set out the rights between unitholders and the decision making process within the LALV Trust (the Unitholders' Agreement); and

(2) the LALV Investment Management Agreement (the LALVIM Agreement) between Harina, Logos Investment Management Pty Ltd (Logos IM) and the LALV Trustee, which appointed Logos IM as the LALV Investment Manager to provide Investment Management Services, including asset management services, strategic coordination and other investment management services to the LALV Trust.

77 It suffices to say that, by the time of this proceeding, the LALV Trust had acquired eight sites and that logistics facilities had been built or were being built on seven of them. On the eighth site, the existing logistics facilities had been expanded. The Logos Group identified the sites and has provided development management and project management services to deliver logistics facilities with secure tenants on those sites.

3.2 Fees payable by the LALV Trust to the Logos Group

78 The fees payable to Logos IM as the LALV Investment Manager are set out in the LALVIM Agreement. In summary these were:

(1) an Equity Investment Fee, determined in accordance with sch 2, being, in summary, a fee payable of 1% of the equity (i.e. excluding debt) contributed by unitholders to the LALV Trust in connection with one or more of the properties held by the LALV Trust during the relevant month;

(2) an Investment Management Fee for investment management services (i.e. in relation to investment and asset management) determined in accordance with sch 3; and

(3) the Performance Fee, payable at the end of a 7 year period and dependent on the performance of all assets of the LALV Trust determined in accordance with sch 5. In summary, it is calculated as 18% of the amount by which the assets in the LALV Trust outperform an annual hurdle rate of 11% return.

79 Further, pursuant to cl 5.1 of the LALVIM Agreement, it was a requirement that a Development and Project Management Agreement be entered into with a Logos related entity (Logos DM) for the sole provision of development and project management services of any property acquired. A 'Pro-forma' Development and Project Management agreement was contained in sch 6 to the LALVIM Agreement (the Pro Forma Agreement). Pursuant to cl 8.3 of the Pro Forma Agreement, a Development and Project Management Fee was payable, being an amount equivalent to 5% of the Project Costs (as defined in the Pro Forma Agreement).

80 The relationship between Harina and the Logos Group was also regulated by the Unitholders' Agreement. The terms of that agreement are relevant to an issue raised by way of defence, namely, given Citius's knowledge that Logos was seeking to acquire the Hargreaves Property for the joint venture, the likelihood that any agreement of the kind alleged between Citius and Logos would require approval if it became or was intended to be binding. Logos relied on approval within the joint venture and approval within the Logos Group. It is appropriate that I set out now the provisions of this and other agreements relating to the approvals process within the joint venture and the Logos Group.

81 As to the joint venture, cl 3 of the Unitholders' Agreement provides for the establishment of a Venture Committee. In summary it provided that the Venture Committee would be made up of representatives of the Unitholders (Logos and Harina) with each Unitholder entitled to nominate one representative for the Committee. The purpose of the Venture Committee was to make decisions on behalf of the LALV Trust in respect of key investment decisions and other matters of strategic significance.

82 The Unitholders' Agreement specifically provided that the LALV Trustee and Logos IM were not able to act with respect to certain matters without approval of the Venture Committee. These matters were provided for in schs 1 and 2 of the Unitholders' Agreement. Relevantly, sch 1 provided that approval by a 'Special Majority' of the Venture Committee was required for the following actions:

(1) entry into, ratification, variation, termination, waiver of rights or enforcement of any material contract that could not be terminated without penalty upon less than 90 days' notice, or that was of a total value above $250,000, or that was of a term of longer than 2 years (sch 1(i));

(2) termination of a development and project management agreement or the appointment of a replacement development manager (sch 1(w));

(3) entry into a development and project management agreement to the extent that the agreement deviates from the Pro Forma Agreement (sch 1(cc)); and

(4) appointment of personnel and approval or replacement of the development manager, or any legal or tax advisor in relation to a development and project management agreement (sch 1(ff)).

83 Logos submitted that approval under these provisions was required for the alleged agreement.

84 As to the Logos Group, its internal arrangements are governed at least in part by a Securityholder's Deed dated 23 October 2014, which regulates their rights and obligations in relation to the Logos Group's dealings (the Securityholder's Deed). Relevantly, cl 4.13(b)(ii) requires the approval of a special majority of directors prior to entry into or termination of a contractual arrangement with a consideration over $200,000. Logos submitted this would include the alleged agreement.

3.4 Development management and project management services

85 Some of the issues in this case related to the nature of services to be provided by a development manager on the one hand and a project manager on the other, and the usual key terms of agreements to provide such services. I will deal with the first of these issues now.

86 As to the evidence that was led, there seemed to be little difference between the parties as to the nature of development management services and project management services. In oral closing submissions it was not in dispute that:

(1) development management is a holistic role with respect to developing a site. The development manager's role is to source the land, manage due diligence on the land, get development approvals to build buildings, source customers or tenants for the buildings, and present to investors on the developments and budgets; and

(2) project management, by contrast, is a coordination role. The project manager reports to the development manager and is responsible for the time, cost and quality outcomes of the design and construction components of the works. The role includes overseeing consultants, managing approvals for civil infrastructure and building works and coordinating Project Control Group meetings. The project manager does not deal with investors.

87 Each of Mr Tobin and Mr Iliffe gave evidence that each role was different although there was some overlap. Each gave evidence to the effect that the role of the development manager was to focus on delivering commercial outcomes to the investor: a completed site to either be sold for commercial return or leased for commercial return. Each gave evidence that the role of the project manager is more limited: in summary to arrange and oversee construction on a site necessary for the facility to be completed and to make sure the project runs on budget and on time. As is evident, each agreed there is a need to work closely between the development manager and the project manager.

4.1 Citius investigates the Marsden Park properties

88 In late 2015 or early 2016, Citius was looking at sites for two clients in Western Sydney. One client was a large transport company called Border Express. The other was M&G, a large global institutional investor with its Australasian business conducted from Singapore. Mr Tobin said M&G was seeking large-scale industrial sites predominantly to develop as industrial or logistics assets in particular in Sydney or Western Sydney with an end value of at least $50-$100 million.

89 Mr Tobin said he was looking for 'off market' opportunities for these clients. Mr Tobin said that there were advantages in dealing with 'off market' opportunities, namely, the absence of direct competition and the opportunity of structuring the conditions of sale consistent with the purchaser's requirements. As a consequence, Mr Tobin contacted a number of people experienced in the property industry in this area. Mr Tobin was referred to Mr Wall of JLL by contacts in Melbourne.

90 There was an email exchange between Mr Tobin and Mr Wall on 23 December 2015. Mr Wall mentioned a number of potential sites and gave the address of three sites including the address of the Hargreaves Property and the Busways Property. He did not give the address of one site called Prestons because he stated that he had been asked to keep it confidential. Mr Tobin said it was not unusual for the address of potential sites to be confidential and private. This was to prevent competition from being aware of them. I refer to his comments about off market sales in the previous paragraph.

91 Mr Tobin said that in January 2016 he considered that Mr Wall was acting as a broker to see if there was a potential deal between Citius on behalf of M&G and a vendor of land. As set out below, Mr Wall's role was clarified by mid-February 2016.

92 By email dated 13 January 2016, Mr Wall advised Mr Tobin of a proposed inspection of a number of properties in Western Sydney including the Hargreaves Property and the Busways Property. The email noted that they were proposing to meet with Scott Coltman of Taylors who had 'a position' on the Hargreaves Property and the Busways Property, and with Chris Wilson. Mr Tobin said he did not know what was meant by the reference to Taylors having 'a position' on these properties. Mr Tobin knew Taylors was a large industrial construction company but he had not met Mr Coltman. Mr Wilson worked for Willowtree Planning which acted as planning consultants. Mr Tobin knew of Willowtree Planning but had not met Mr Wilson.

93 In the context of an email dated 13 January 2016 from Mr Wall, Mr Tobin came to know that Taylors and Willowtree Planning had undertaken some works in relation to some of the properties mentioned and that they were attending the inspection in order to develop a relationship with Citius in the hope that they might play a part in the development of some of these properties should they be purchased by a client of Citius.

94 Mr Tobin inspected sites including the Hargreaves Property and the Busways Property with Mr Wall on 15 January 2016. Mr Tobin could not recall the details of these inspections or when he met Mr Coltman and Mr Wilson on that day. Mr Tobin gave evidence that, at about this time, he became aware from Mr Coltman and/or Mr Wilson that the Hargreaves Property was owned by EJ Cooper but that Hargreaves had an option to purchase the Hargreaves Property which it intended to exercise. He also became aware at about this time that the Adjoining Property was owned by Busways, a bus transport company.

95 By email dated 18 January 2016, Mr Tobin advised Mr Wall that he wished to focus on the Marsden Park properties and a further property in Erskine Park. In his email, Mr Tobin detailed the further information he wished to receive from Mr Wall in relation to them. Mr Tobin gave evidence that he considered that:

(1) the Marsden Park properties were very well located in terms of road infrastructure, which was a key aspect of any transport or logistics business; and

(2) the Hargreaves Property already had planning or development approval (referred to in the documents as DA).

96 Mr Coltman prepared a response which was sent to Mr Tobin on 19 January 2016. It provided details of the Hargreaves Property and the Busways Property. Mr Coltman also provided preliminary estimates of the costs required to make these properties ready for construction.

97 On 18 January 2016, Mr Tobin wrote to Mr Askham of M&G informing him of two Sydney industrial sites which Mr Tobin considered offered 'outstanding potential for large-scale industrial development'. In cross-examination, Mr Tobin acknowledged that this referred to the Marsden Park properties. The email relevantly provided:

We do not have exclusive control over these sites, but do have direct contact with the owners and are confident we are able to negotiate the acquisition of either, or both of the sites, on fair terms.

It is important however, that we move swiftly to secure any negotiating position with the owners, as we do know of several other institutional groups are also looking at the region closely, with an intension [sic] to acquire.

Obviously, not having formal control of the sites requires the application of good faith from all of us, in the nomination of the sites, and the future negotiations surrounding the potential acquisition of the site(s) and ongoing Development Management by Citius.

98 On 19 January 2016, Mr Tobin sent an email to M&G enclosing a summary of the project parameters for the acquisition and development of the 40 ha site (i.e. the Marsden Park properties) but did not identify the address of the site. The email enclosed an attachment which set out at a high level both a commercial summary of the development and a partnership/commercial structure which envisaged Citius being appointed as both development and project manager. The last paragraph noted that '[a]s has been discussed, we don't yet have control of this site, and need to move swiftly if we are to secure it'.

99 Mr Askham replied on 19 January 2016 noting that the opportunity looked interesting to M&G and suggested that the next step would be to receive details of high level terms and to reach agreement in relation to them. He also requested a capability statement from Citius for developing such a project. Mr Tobin sent a further email to M&G on 20 January 2016 (the 20 January Citius email). He wrote among other things:

As requested, I've now attached a more detailed description of the terms we propose would form part of a more detailed Development Management Agreement, that would apply to this project. I've also attached a summary of some of our experience in the type of development we're proposing to undertake with M&G.

We believe our joint experience and capability (M&G and Citius), when combined on the subject site, will result in a very successful project. There is already very high quality industrial development and excellent road infrastructure very close to this site and I have no doubt opportunities to be accommodated at the site will be offered to us immediately by companies and agents alike.

Should the terms detailed in the attached correspondence be acceptable, I'd like appreciate [sic] receiving your confirmation of such, so we can nominate the site to you formally. We don't want to appear overly hasty, but must continue to move quickly to secure the site privately.

Upon the appointment terms being agreed, we intend to put a conditional offer to the land owners at the earliest opportunity, ideally within the next 24/48 hours to confirm our interest and advance our negotiations with the owner(s).

100 Mr Tobin attached a document entitled 'Citius Profile' which listed a number of projects in which Citius had been involved. He also enclosed a letter from Citius to M&G dated 20 January 2016 setting out in more detail the nature of the partnership/commercial structure, including the details of the development management and project management role to be undertaken by Citius. It listed the following fees (excluding GST):

(1) an acquisition fee of 1.25% of the purchase price;

(2) a development management fee of $29,500 per month;

(3) a project management fee of 2.15% of construction costs; and

(4) a transaction fee of 1.5% of the completed value/sale price of the project.

101 On 21 January 2016, Mr Tobin wrote an email to Mr Askham again, consistent with the 20 January Citius email, noting that, as soon as Mr Tobin received an email 'confirming the details discussed today', Mr Tobin would nominate the site details and provide further advice as to the intended acquisition strategy.

102 Mr Askham replied on 22 January 2016 in the following terms (the 22 January M&G email):

Thanks for the call yesterday.

As discussed the broad structure looks okay, but the scopes, roles and fees are something we can't turn around quickly.

Obviously if the site is of interest and there is a deal to do, we can agree the above.

103 Notwithstanding this less than definitive reply, Mr Tobin sent an email to Mr Askham dated 22 January 2016 providing details of the Marsden Park properties and noting that the owner of the Hargreaves Property was EJ Cooper (the 22 January Citius email). In light of M&G's qualified reply, Mr Tobin wrote:

[T]hank you for your confirmation of the introduction of the above prospective development site [i.e. the Marsden Park properties].

We look forward to working with M&G in the development of the site(s) and progressing with the immediate analysis and acquisition of the site.

We also acknowledge the conditions of any engagement of Citius by M&G remain subject to those proposed terms and fees detailed in our email to you dated Wednesday 20th January, being reviewed and agreed by both parties.

104 This response, in particular in providing the address and other details of the Marsden Park properties, seems at odds with the 20 January Citius email which insisted upon confirmation of the terms in that email from M&G 'so we can nominate the site to you formally'. Rather, in the 22 January Citius email, Mr Tobin acknowledged that the engagement by M&G of Citius remained subject to the terms detailed in the 20 January Citius email 'being reviewed and agreed by both parties'. Nevertheless, Mr Tobin was still prepared to disclose the address and other details of the Marsden Park properties. In cross-examination, Mr Tobin accepted that the 22 January M&G email did not represent any sort of binding agreement with M&G.

105 While seeking to secure the agreement with M&G, Mr Tobin continued to advance the Marsden Park opportunity. On 19 January 2016, there was an email exchange between Mr Tobin and Mr Wall in relation to an analysis of sales and leasing of industrial facilities in Western Sydney.

106 On 21 January 2016, there was an email exchange between Mr Coltman, Mr Tobin and Mr Wall relating to a proposed offer which Citius wished to make for the Hargreaves Property and the Adjoining Property. Of course, there was no suggestion that Citius itself would be offering to purchase these properties on its own behalf: it was seeking an investor (i.e. M&G) to do so. Mr Tobin sought assistance as to the form of the offers in light of the fact that it may be necessary to relocate Busways' operation from the Adjoining Property to the Hargreaves Property. Mr Coltman replied that Busways are 'very slow in making decisions'. By contrast he wrote that 'EJC on the other hand is a matter of going in at the right price. So I think we should prepare an offer based on Taylors previous offer that was excepted [sic] by EJC'. In response, Mr Tobin noted that he had discussed with Mr Wall the option of securing the Hargreaves Property first and then approaching Busways.

107 On 27 January 2016, Mr Tobin sent Mr Wall an email, copied to Mr Coltman, attaching an offer for each of the Hargreaves Property and the Adjoining Property. The offer in respect of the Hargreaves Property provided that:

(1) Citius was working with M&G in expressing its interest in the Hargreaves Property;

(2) Citius was interested in purchasing the Hargreaves Property for a purchase price of $40.812 million ($190/m2) plus GST if applicable, with a deposit of 5%;

(3) the purchaser required a minimum five week period to complete a due diligence in respect of the Hargreaves Property and to obtain the necessary approvals; and

(4) the interest in the Hargreaves Property recorded in the letter did not create a binding legal agreement.

108 As to the offer for the Adjoining Property, the evidence before me was to the effect that Busways responded that the offer would not be entertained. There was no objective evidence before me of any negotiations with Busways after this time. Mr Wall gave evidence that he contacted EJ Cooper at about this time and was informed that EJ Cooper had entered into a contract with Hargreaves in relation to the Hargreaves Property. Mr Wall then called Mr Greg Hargreaves of Hargreaves. They met in a café in Thornton on 28 January 2016 at which Mr Hargreaves signed an agency agreement or sales authority in favour of JLL. From this point, Mr Wall acted as an agent of Hargreaves with respect to the sale of the Hargreaves Property.

109 Mr Wall provided a written response to the offer on behalf of Hargreaves to Mr Tobin on 28 January 2016. The response advised that Hargreaves:

(1) wanted $210 per m2 totalling $45,108,000 (plus GST) and a 5% deposit, including a $350,000 non-refundable deposit; and

(2) required that M&G 'must acquire the shares in the purchasing entity of the current contract' and enter into a non-binding heads of agreement by 5.00pm on 29 January 2016.

110 This response made clear that MP3 had been granted an option to acquire the Hargreaves Property. Mr Tobin responded by an email to Mr Wall dated 29 January 2016 advising that he would not respond regarding the price until this had been reviewed with M&G.

111 On 29 January 2016, Hargreaves sent an email to Mr Wall providing further information in relation to the Marsden Park properties. This included a drop box containing aerial pictures, planning details, plans lodged and consents provided. Mr Wall sent this on to Mr Tobin on the same day. Mr Tobin said that he used this information for a feasibility model for the Marsden Park properties.

112 Mr Tobin gave evidence that in January and February 2016 he developed and analysed the potential commercial development of the Marsden Park properties on the basis of construction on either or both of them. The first version of the feasibility model for the Hargreaves Property in evidence is dated 18 February 2016.

113 Mr Tobin gave evidence, in substance, that the purpose of the feasibility model was to consider all the costs and expenses involved in building and developing a property and the likely sale price or rental returns on a property in order for a client to determine whether it should proceed with a proposed investment.

114 Mr Tobin gave evidence that, when reviewing possible development sites, Citius commenced rudimentary calculations regarding the acquisition costs, building costs and approximate sale price and approximate rentals. These calculations became the basis of a feasibility model. He said it was the practice of Citius to conduct an exhaustive and comprehensive review in order to build an informed feasibility model for any project. He said that a feasibility model was updated as further information was provided, such as price increases or decreases, and costs associated with infrastructure works. He said Citius worked closely with its various experts and utilised Citius's own experience in determining the assumptions to be built into the model on which the feasibility study was based.

115 On 2 February 2016, Hargreaves sent a letter to Mr Wall in relation to the offer of Citius to acquire all of the shares in Hargreaves for the specific purpose of acquiring the Hargreaves Property (the 2 February letter). It referred to the fact that Citius was working with M&G and was acting on its behalf. The letter also set out a proposed transaction structure which, amongst other things:

(1) provided for the acquisition of all of the issued shares in the Hargreaves Special Purpose Vehicle, which held an option to acquire the Hargreaves Property from EJ Cooper, for an effective price of $210/m2 with a non-refundable fee of $100,000;

(2) envisaged the execution of a heads of agreement with M&G; and

(3) provided for M&G to have 28 days to complete its due diligence pursuant to the heads of agreement.

116 Mr Tobin replied to the 2 February letter by an email and attached letter to Mr Wall dated 10 February 2016. The letter attached marked up changes to the 2 February letter. Mr Tobin did not agree with many of the terms contained in the 2 February letter. First, Citius proposed an effective purchase price of $200/m2. Second, Citius proposed a due diligence period of eight weeks.

117 Prior to Mr Tobin responding to the 2 February letter, M&G sent an email to Mr Tobin dated 5 February 2016. In that email M&G advised that the timing of the opportunity to acquire the Marsden Park properties did 'not work' for M&G. It concluded:

Not the outcome we all wanted but think the best outcome would be to pass on the opportunity.

Sure you will find capital for the deal, if you don't happy to speak in a few weeks.

118 In cross-examination, it was put to Mr Tobin that M&G was unlikely to be a buyer at the time for the reasons indicated in this email. Mr Tobin replied to the effect that that was what the email said but that he was keen to refer to further telephone communications between Citius and M&G. He emphasised that Mr Askham said it was a good or great site. While many of Mr Tobin's answers seemed an attempt to argue his case, I accept that Mr Tobin continued to pursue M&G in the hope and expectation M&G would acquire the Marsden Park properties after receipt of this email.

119 In order to advance an acquisition of the Marsden Park properties, there was a meeting in Sydney between Mr Tobin, Mr Wall and Mr Hargreaves on 16 February 2016. Mr Wall had little recollection of this meeting. Mr Tobin said that the main issues discussed at the meeting were the appropriate length and nature of the due diligence process, and the proposed transaction structure.

120 As to the due diligence process, Mr Tobin said Citius required that Hargreaves not deal with any other prospective purchaser in relation to the Hargreaves Property during the due diligence period (the DD period) which would commence upon the exchange of a heads of agreement. However, there was no evidence to the effect that the DD period was discussed or agreed. No document emanating from Hargreaves at that time or subsequently evidencing such an agreement on the DD period was in evidence.

121 As to the structure of the transaction, Mr Tobin gave evidence that Mr Hargreaves said he had wanted the transaction with Citius to proceed consistent with the existing option arrangements and Hargreaves's proposed share purchase agreement referred to in the 2 February letter. Mr Tobin said Citius acknowledged Mr Hargreaves's preference but responded that such matters were ultimately determined by the purchaser and their legal advisers.

122 On 20 February 2016, Mr Tobin sent an email to M&G advising that Citius had 'now been able to reach final agreement with the site Vendor on the 8 week Due Diligence period' (underlining added) and attached a 'draft Heads of Agreement which has been negotiated with the Vendor, subject to your approval'. In his evidence, Mr Tobin confirmed this was a heads of agreement between M&G and Hargreaves. No such document was produced in discovery or when called for by Logos during Mr Tobin's cross-examination.

123 For my part, I am not satisfied that at the time of this email to M&G on 20 February 2016 an agreement, let alone a final agreement, had been reached with Hargreaves or the vendor of the Hargreaves Property with Citius or an investor introduced by Citius, including with an agreed 8 week due diligence period. Further, subsequent correspondence from Hargreaves is inconsistent with any such agreement. Counsel for Citius prepared written closing submissions in which they conceded that the parties to the heads of agreement with Hargreaves and the due diligence period were not agreed.

124 In his email of 20 February 2016 Mr Tobin reiterated the urgency in M&G forming a view about this the Marsden Park opportunity, noting that the 'negotiations with the Vendor have reached the point where we now need to confirm M&G's position'.

125 Mr Tobin pursued M&G in the following days for an answer. In substance, Mr Tobin gave evidence that because he had agreed on the price and the exclusive due diligence period with Hargreaves, he considered that an agreement had been reached with Hargreaves. When it was suggested to him that that was just nonsense in the absence of knowing the parties to the agreement, he disagreed. He replied by suggesting that Hargreaves would have been under the impression that the negotiations they were conducting with Citius were in relation to M&G and the terms and the price had been agreed.

5. INTRODUCING LOGOS TO THE MARSDEN PARK PROPERTIES

126 Shortly after the meeting between Mr Tobin, Mr Hargreaves and Mr Wall on 16 February 2016, Mr Tobin had a discussion or discussions with Mr Hemingway. Neither Mr Tobin nor Mr Hemingway were able to precisely recall the detail of this discussion or discussions. The substance of their evidence was as follows.

127 Mr Tobin had known Mr Hemingway for 15 or 20 years and they caught up from time to time to share information. Mr Tobin said he told Mr Hemingway that Citius was working on a large project in Western Sydney and was about to complete negotiations to acquire a site. Mr Tobin said that he also spoke about the scale and value of the project and that Citius was looking for an appropriate investment partner. He said Mr Hemingway replied that Logos would be very interested in the project.

128 Mr Tobin said he was aware of the Logos Group at this time. He said he had previously dealt with the joint managing director of Logos, Mr Marsh, in relation to a proposed 80 ha site for Coles in Western Melbourne. He said they discussed commercial terms, prices, the timing, availability and provision of services. However, the proposal did not proceed. Mr Tobin said he had not had any previous dealings with Mr Iliffe other than meeting Mr Iliffe at a Property Council function in Melbourne.

129 While Mr Tobin said that his instructions to Mr Hemingway were 'limited strictly' to Logos, in cross-examination he conceded that Mr Hemingway would have been entitled to share the information with anyone he thought might fulfil the opportunity.

130 In this regard, Mr Hemingway (who had little recollection of this conversation) gave evidence that prior to his conversation with Mr Tobin, he was seeking an industrial site in Sydney for Linfox and that, as a result of a discussion with Mr Tobin, he raised the Marsden Park opportunity with Linfox. He said that when it became clear that Linfox had no further interest in the Marsden Park site, he discussed with Mr Tobin other entities that might be interested in the site. Mr Hemingway gave evidence that he had regular discussions with Mr Iliffe and that at about this time he understood that Logos had a strong interest to secure good industrial development sites, particularly in Western Sydney. Mr Hemingway gave evidence that Mr Tobin said he agreed to Mr Hemingway approaching Logos about the Marsden Park properties. I accept the evidence of Mr Hemingway that, to Mr Tobin's knowledge, he discussed the Marsden Park opportunity with Linfox before mentioning Logos to Mr Tobin.

131 Mr Hemingway then called Mr Iliffe and told him that he had a potential opportunity in the Western Sydney market in the north-west of Sydney. He asked if Mr Iliffe would be interested in dealing with the group that had an opportunity to control that land. Mr Iliffe replied that he was open to that discussion. Mr Hemingway asked if he could get an introductory fee.

132 In cross-examination, Mr Iliffe stated that at this time, Logos had no plans with respect to sites in the north-west Sydney market such as Marsden Park. He said north-west Sydney was not a proven market for investors as most sites were owner-occupied so there were no real or substantial statistics to benchmark market rents. This was in contrast to other areas of Sydney. Mr Iliffe said in substance that this represented a risk for institutional investors and that one way of 'de-risking' was to secure a tenant, usually, in the course of the due diligence process.

133 Mr Iliffe said that Mr Hemingway did discuss Mr Tobin's involvement in the opportunity and that Mr Hemingway did not disclose the specific address of the Hargreaves Property. However, on 22 February 2016, Mr Hemingway wrote a letter to Logos (the 22 February letter) which was not provided to Citius at the time. Mr Iliffe said he read this letter at the time. That letter recorded that Gill Property was seeking to source acquisition opportunities for Logos for both established core industrial investment assets and industrial development sites across Australia. The 22 February letter then referred to the opportunity to acquire a '21 hectare site' for industrial development located in 'Hollinsworth Road, Marsden Park' in Western Sydney and that this site had 'DA approval for sub-division'. Thus, while the street, the size of the lot and DA approval were disclosed in the 22 February letter, the street numbers were not provided. The letter also recorded that '[o]ur agreed fee upon completion of the acquisition will be 25 bps of the total consideration (plus GST)'.

134 Mr Iliffe said he did not make any enquiries of Mr Hemingway as to the specific address of the property at this time or any time prior to 2 March 2016. Mr Iliffe said that, given the early stage of negotiations, it did not matter. After some reluctance, Mr Tobin ultimately conceded in cross-examination that it would not be difficult for a person to identify the Hargreaves Property from the description in this letter because there were only a small number of development sites at Hollinsworth Road.

135 Mr Tobin gave evidence that a day or two later Mr Hemingway told him that Mr Iliffe was interested and wanted to talk further. It was agreed that Mr Tobin would prepare a written summary of the project for Mr Hemingway, to be sent to Mr Iliffe. Mr Hemingway could not recall this conversation. Consistent with his evidence, Mr Tobin prepared a letter dated 25 February 2016 providing more detailed information concerning a 40 ha site (i.e. the Marsden Park properties) (the 25 February letter).

136 Before addressing the 25 February letter, it is appropriate to note that by email dated 24 February 2016 (10.34pm), M&G advised Mr Tobin that M&G would not be proceeding with the purchase of the Hargreaves Property (the 24 February M&G email and the M&G decision). The 24 February M&G email stated '[i]n short, not good news, timing and bandwidth got the better of us. Many thanks for letting M&G take an early look at the opportunity it was appreciated, sorry it was not a better outcome for both, but sure there will be other opportunities in the future'. In cross-examination, Mr Tobin ultimately conceded that this was the 'final statement by M&G that they [M&G] were going to pass on this opportunity and they wouldn't be a buyer' of the Marsden Park properties.[7] Mr Tobin acknowledged this in an email to M&G dated 25 February 2016 in which he expressed his disappointment and noted that Citius would now seek an alternative investor.

6. DEALINGS BETWEEN CITIUS AND LOGOS IN LATE FEBRUARY

137 Mr Tobin sent the 25 February letter to Mr Hemingway by email on 25 February 2016 (12.56pm). Mr Hemingway then sent it on to Mr Iliffe by email at 2.23pm and stated that Mr Hemingway was looking forward to hearing back from Mr Iliffe. Mr Hemingway sent an earlier email to Mr Iliffe a few minutes before at 2.17pm requesting that a telephone call be arranged with Mr Iliffe's 'two associates' to discuss the Marsden Park properties. Mr Hemingway recalled having a telephone conversation with Mr Iliffe after this time with Mr Tobin in Mr Tobin's office. It would appear that this was the 29 February conversation. I will deal with Mr Hemingway's evidence about this conversation further below.

138 The 25 February letter provided a summary of the commercial parameters, the likely acquisition costs, the development costs, development margins, and the engagement of Citius as development and project manager in relation to the 40 ha site (i.e. the Marsden Park properties). It contained a number of sections headed 'Parties', 'Project', 'Commercial Summary' and 'Partnership/Commercial Structure'.

(1) Citius had undertaken feasibility and due diligence work over recent months and that it had 'reached the point of [Citius] now being able to provide prospective investors with qualified advice regarding the site's development potential and issues';

(2) although the Marsden Park properties had not been the subject of a formal marketing campaign, in recent days, Citius had been advised that another prospective purchaser has been made aware of the site and is showing interest; and

(3) should the site be of interest, 'we can finalise more precise terms that will apply to the agreement and roles, as we finalise current negotiations to acquire the site(s)'.

140 The 25 February letter noted that the proposed development strategy was for:

(i) The construction of civil works to create serviced lots for development (or sale) and,

(ii) Further development of industrial buildings on a 'pre-lease' or speculative basis, subject to investor approval.

141 I note that there was evidence from Mr Tobin that a pre-lease basis (as opposed to a speculative basis) was the construction of the development for an identified and committed tenant pursuant to an agreement to lease. Further, the 25 February letter noted that the 'site' comprised a number of titles (i.e. the Marsden Park properties) but that it may be possible for the project to be acquired and developed as a smaller 20 ha parcel. It also noted that, in that case, all estimated costs and figures set out below could be approximately halved.

142 Under the heading 'Commercial Summary', the 25 February letter stated that:

(1) the Marsden Park properties could be purchased for $80 million;

(2) the total land acquisition and development costs were estimated at $120 million with an estimated developed building area of 233,000 m2;

(3) the total estimated building delivery costs excluding land was estimated at $217 million;

(4) the total development cost was estimated at $337 million;

(5) the total valuation/sales revenue was estimated at $426.8 million; and

(6) there was a development margin (or profit) of $83 million after sale/transaction fees, resulting in a project internal rate of return of 20% plus.

143 The section entitled 'Parties' referred to Citius as the 'Development Manager/DM' and to an 'Investor entity to be confirmed'. The section entitled 'Partnership/Commercial Structure' provided among other things that:

(1) should the investor agree to acquire the Marsden Park properties, the investor also agreed to enter into a development and project management agreement with Citius;

(2) that agreement 'will appoint Citius to fulfil the Development Management role (Overall management, strategy, marketing, securing of tenancies etc.), and the Project Management role (Supervision & delivery management of design & construction)';

(3) the 'specific roles and fees will be described in more detail within any future agreement'; and

(4) the agreement will also include an initial acquisition fee and 'a transaction/success fee, linked directly to the securing of committed future tenancies and new projects to the Business Park'.

As discussed, we are in the final stages of negotiation to acquire this site. Acquisition terms are likely to provide for an 8 week Due Diligence period, with settlement between 3 and 4 weeks from the completion of the Due Diligence period. Contract of Sale completion and execution will form part of the Due Diligence process.

145 The 25 February letter concluded by a request that Mr Hemingway confirm his client's interest and agreement with the proposed structure, including the engagement of Citius in the roles identified earlier in the letter i.e. the development management role and the project management role.

146 Mr Tobin acknowledged in answer to questions from me that where he referred to the 'site' in the 25 February letter he was referring to the Marsden Park properties. I took him to the sentence to the effect that Citius was 'in the final stages of negotiation to acquire this site'. I asked him if I was correct in assuming that this applied equally to the Hargreaves Property and the Adjoining Property. He said it was fair that the letter could be interpreted in this way but that the emphasis was on the Hargreaves side as Citius's negotiations were more advanced on that site. As is evident, that is something that was not made plain in the letter.

147 Mr Tobin was asked a number of questions about the 25 February letter. These included questions relating to the state of his negotiations with Hargreaves and also with M&G.

148 Mr Tobin was asked if he was intending to convey from the statement relating to 'final stages of negotiation' that Citius was just about to acquire the site. He disagreed, replying that as the letter said, Citius was in the final stages of entering into an agreement with Hargreaves. However, Mr Tobin gave evidence that Citius had agreed with Hargreaves on the price, the terms, the due diligence period and exclusivity period lengths. He later gave evidence that Citius and Hargreaves had agreed on price and terms. I will deal with this further below.

149 In this context, Mr Tobin was asked whether he informed Hargreaves before the 25 February letter of the M&G decision. Mr Tobin replied that he told Hargreaves at that stage that Citius had not reached or achieved unconditional approval from M&G to enter into an agreement. He thought this was a couple of days prior to the 25 February letter. He said in the previous week he proposed to Hargreaves that the heads of agreement be entered into between Hargreaves and Citius for the purpose of commencing the exclusive due diligence period. He wanted the clock to start ticking. He said that was the final stages of negotiations that he was referring to in the 25 February letter.

150 I found this aspect of Mr Tobin's evidence inconsistent and unconvincing. I do not accept that Citius had told Hargreaves or Mr Wall of the decision of M&G not to proceed by 25 February 2016. Mr Tobin later accepted he had not told Mr Wall (as Hargreaves's agent) of M&G's decision at the time of the email to Mr Wall dated 26 February 2016 (the 26 February Citius email, referred to below). Indeed, it appears that he may not have told Mr Wall of the M&G decision until about 3 March 2016. I will deal with this issue further in section 8.7 below.

151 Further, Mr Tobin then gave evidence that the M&G decision was not a material change to the negotiations that were taking place with Hargreaves. This is notwithstanding that he agreed in evidence that Mr Wall would have been interested to know that M&G had pulled out, and that Hargreaves was seeking to do a deal with a party that could perform. I do not accept Mr Tobin's evidence that M&G's decision to not proceed did not constitute a material change to the negotiations taking place with Hargreaves.

152 I then asked Mr Tobin whether, at the time he wrote the 25 February letter, it was untrue to say that Citius was in the final stages of negotiations for the Marsden Park properties, in light of the fact that Mr Tobin knew of the M&G decision. He said that in his view Citius was still in final negotiations because he was confident Citius could secure the appropriate or required investment support to complete the transaction. He said that is what ultimately came to pass with Logos.

153 Further and relatedly, I am not satisfied that the due diligence period or the party/prospective purchaser had been agreed, verbally or otherwise, with Hargreaves at this time. I am conscious that, in the context of Mr Tobin's email to Mr Iliffe dated 2 March 2016 (9.22am), Mr Tobin gave evidence that Citius had reached a verbal agreement with Hargreaves as to the terms on which Hargreaves would sell the Hargreaves Property. I will deal with this evidence further below. Nevertheless, it is appropriate that I record at this time that it has not been established before me that any such agreement was reached.

154 As I set out below, on the evidence before me, it was not until 26 February 2016 (referred to in detail in section 6.5 below) that Citius suggested that Hargreaves enter into a heads of agreement with Citius (rather than with the actual investor/prospective purchaser). Mr Tobin ultimately agreed that this was so. However, he said that by this time Citius had had discussions with Hargreaves and had reached agreement on the 'the terms' and 'the price'. It was suggested to him that any such agreement was reached in the context of M&G being the actual investor/prospective purchaser and that was very different to doing a deal with Citius. He agreed that Citius could not complete this transaction without outside investment and that the source of funds to complete the transaction would be something of critical significance to Hargreaves.

155 Further, I note that Hargreaves did not agree to enter into an agreement with Citius of the kind set out in the 26 February Citius email. I also note that Mr Tobin did not disclose the substance of the 24 February M&G email to Mr Wall in the 26 February Citius email.

156 To summarise, to the extent that Mr Tobin gave evidence that an agreement had been reached with Hargreaves by this time, I do not accept that evidence.

157 In my view, this evidence shows that Mr Tobin was focused on achieving a 'deal' with Hargreaves. I accept that he may not have viewed his negotiations with Hargreaves through the legal lens of parties, price and property. Rather, he focused on price and property in the hope that an investor/prospective purchaser would later be identified and any terms in dispute (such as the due diligence period) agreed. However, I have concluded that, even to a non-lawyer like Mr Tobin, that did not result in an 'agreement' with Hargreaves, verbal or otherwise.

158 Mr Iliffe gave evidence that he read the 25 February letter. He said that from his perspective, what was of interest at the time was the opportunity to acquire the 40 ha site. He understood based on the 25 February letter that what was being offered was an opportunity to develop 40 ha or either of the 20 ha parcels at the option of Logos.

159 Mr Iliffe said the main thing he remembered was the size and the scale of the opportunity as described in the 25 February letter, and the opportunity it presented for the LALV Trust. Mr Iliffe agreed that at this time there were capital funds of approximately $65 million in the LALV Trust based upon a preliminary investment paper dated 21 March 2016 prepared for the Logos board in order to approve due diligence works of up to $200,000. However, Mr Iliffe gave evidence that there was the ability to call on further funds. He said this had been done in the past with ADIA. As a result he did not limit his consideration at this time to the 21 ha site. I accept that evidence.

160 As to the estimated costs of construction and the likely returns in the 25 February letter, Mr Iliffe said that at this point in time he did not have sufficient information to make any decision on whether those numbers were real or not. He said 'I didn't get a lot of credence' to the estimates in the 25 February letter.[8] He said that there was significant further information required. I accept that evidence.

161 Mr Iliffe also agreed he read the paragraph set out in [144] above to the effect that 'we are in the final stages of negotiation to acquire this site'. However, he did not agree that this was inconsistent with the suggestion that Citius had control. He did not explain why this was so. Further, he agreed that this paragraph did not say that Citius had acquired the site or had completed an agreement to acquire the site.

6.1.2 Submissions and findings in relation to the 25 February letter

162 Logos relied upon the 25 February letter as being inconsistent with any alleged agreement or any concluded agreement, and as constituting part of the Control Representation.

163 As to Logos's submissions relating to any alleged agreement, first, Logos noted that the 25 February letter referred to Citius exclusively fulfilling the development and project management roles. Second, Logos submitted that Mr Tobin conceded that the fees payable (including the 'transaction/success fee') would be linked directly to the securing of future committed tenancies. Mr Tobin conceded this was so in evidence.

164 As to Logos's submissions relating to the counterclaim, Logos submitted that the statement to the effect that Citius was in the final stages of negotiation to acquire the 40 ha site formed the first part of the Control Representation. I will address this further below.

165 Further, Logos also submitted that this was not true on any fair assessment. This is because, to the knowledge of Mr Tobin, Busways showed no interest in negotiating with Citius, and the M&G decision (not to proceed with any purchase of the Hargreaves Property) was made known to Mr Tobin on 24 February 2016. In this context, Logos noted that the 25 February letter is almost identical to the letter sent by Mr Tobin to M&G on 19 January 2016 referred to in [98] above, save that the phrase 'we don't yet have control of this site' was replaced with 'we are in the final stages of negotiations to acquire this site'.

166 In my view, the statement in the 25 February letter 'in the final stages of negotiations to acquire this site' (meaning the Marsden Park properties) did not convey to a reasonable person, including a reasonable person in the shoes of Mr Iliffe, that Citius 'had control of the 40 ha site'. To the contrary, it suggested that Citius was still in negotiations to acquire the Marsden Park properties. In my view that is materially different to a representation that Citius had control of those properties.

167 Further, the 25 February letter is not alleged to form part of the Tenant Representation. Nevertheless, I have formed the view that the 25 February letter was inconsistent with any such representation. The 25 February letter notes that the proposed development strategy is for '[t]he construction of civil works to create serviced lots for development (or sale)' and '[f]urther development of industrial buildings on a 'pre-lease' or speculative basis, subject to investor approval'. In my view, these statements are not consistent with the Tenant Representation that Citius 'had tenants' for the Hargreaves Property or the Adjoining Property.

168 It would appear that Mr Iliffe sent the 25 February letter to Mr Timso and Mr Mead. This is because Mr Timso sent an email to Mr Iliffe dated 26 February 2016 (9.11am), copied to Mr Mead, summarising the 25 February letter. I will deal with this email in the next paragraph. Further, by email from Mr Iliffe to Mr Hemingway dated 25 February 2016 (2.26pm), copied to Mr Timso and Mr Mead, Mr Iliffe requested that Mr Timso and Mr Mead arrange a time to discuss the Marsden Park opportunity with Mr Hemingway and Mr Tobin.

169 There were a number of relevant discussions on 26 February 2016. Before these discussions, as set out above, Mr Timso sent an email to Mr Iliffe copied to Mr Mead on 26 February 2016 (9.11am). It stated:

TI

Is the intention that we are purely as passive funding partner?

Or are we wanting to try push for a JV structure where we share the fees?

It appears as though they want to fulfil the DM role/PM role and we are just the fund through and take out and they are asking for Acquisition, DM, PM and Success fees.

170 The email then set out a summary of the high level feasibility undertaken by Citius. Mr Timso recalled sending this email based upon the 25 February letter. Mr Timso said the phrase 'passive funding partner' used in the email was a phrase he typically used. He said it meant essentially providing the capital structure or capital funding for the project and having a 'hands off role'. I accept that evidence.

171 As to the relevance of the discussions on 26 February, in its written closing submissions, Citius alleged that these conversations formed part of the pre-contractual communications. Logos relied upon these conversations as being inconsistent with any alleged agreement or any concluded agreement, and forming part of the Development Representations.

172 There was some uncertainty during the oral evidence about the course of events on 26 February 2016. However, based on all the evidence, I have concluded that there were three relevant conversations on 26 February 2016. First, there was a brief telephone conversation between Mr Tobin and Mr Iliffe on the morning of 26 February 2016. Second, there was a telephone conference call between Mr Tobin and Mr Hemingway on the one hand and Mr Mead and Mr Timso on the other at about 11.00am on 26 February 2016. Third, there was a subsequent telephone conversation between Mr Tobin and Mr Iliffe on 26 February 2016.

173 As to the calls between Mr Tobin and Mr Iliffe, there remains uncertainty as to whether Mr Hemingway also participated in either call. Both Mr Tobin and Mr Iliffe recalled Mr Hemingway being on at least one of these calls. Mr Hemingway gave no evidence of any conversations with Mr Tobin and Mr Iliffe on 26 February 2016. Further, and related to the uncertainty about the course of events on 26 February, the evidence was not clear as to what was said between Mr Tobin and Mr Iliffe during each of these conversations. This is because Mr Tobin's evidence-in-chief was to the effect that there was one call with Mr Iliffe on 26 February. However, in cross-examination he accepted that there may have been two such calls.

(1) in the first 26 February call between Mr Tobin and Mr Iliffe, Mr Tobin made the Tenant Representation;

(2) in the call between Mr Tobin, Mr Hemingway, Mr Mead and Mr Timso, Mr Tobin made the Control Representation and the Tenant Representation; and

(3) in the second 26 February call between Mr Tobin and Mr Iliffe, Mr Tobin made the Control Representation and the Tenant Representation.

6.2.1 Evidence of the conversation between Mr Tobin, Mr Hemingway, Mr Mead and Mr Timso

175 In the course of his evidence about his conversation with Mr Hemingway, Mr Timso and Mr Mead, Mr Tobin often referred to 'the site'. I sought that counsel for Citius clarify this in the context of this conversation. Mr Tobin replied that his reference to the site was intended to include discussion about the Hargreaves Property as well the Adjoining Property. As a result, I have proceeded on this basis in my analysis of Mr Tobin's evidence. Further, it was difficult to understand on occasions whether Mr Tobin was giving evidence of what was said during this conversation or his assumed understanding of the position of Logos.

(1) the conversation took 15 to 30 minutes. I note that in cross-examination he agreed it might have taken 10 to 15 minutes;

(2) they discussed the location of the site (i.e. the Marsden Park properties) in Western Sydney and the key features of the location, including being close to transport;

(3) they discussed the option of proceeding with the entire 40 ha site, or alternatively either the Hargreaves Property or the Adjoining Property, whichever was easier to transact;

(4) he spoke about his intention to enter into a joint development management and project management agreement with Logos, and that they discussed being able to reach some sort of agreement between them as to the intended program and simultaneously reach formal agreement with the vendor of one or both of the properties;

(5) he was 'upfront' in telling Mr Mead and Mr Timso that Citius was in final negotiations with the vendors of the Marsden Park properties;

(6) he said that Citius had to conclude a formal heads of agreement with the vendor of one or both of the Marsden Park properties to secure one or both of them, but conveyed to Mr Mead and Mr Timso that Citius did not want to enter into such a heads of agreement until Citius was confident it had an intended purchaser in place; and

(7) Mr Mead and Mr Timso said they were going to consider things internally and that Mr Iliffe would probably make contact with Mr Tobin again in the short term.

177 Mr Tobin said that the discussions with 'vendors' (by which he meant Hargreaves and Busways) were at different levels but that Logos was not aware of this. Mr Tobin said that, in fact, Citius was very much closer to final written resolution with Hargreaves on the Hargreaves Property. He said that he did not divulge too much about the differing levels of interest of Busways and Hargreaves. As noted above, I have no objective evidence about any negotiations between Citius and Busways at this time.

(1) denied that Mr Mead said words to the effect that there had been a misunderstanding because the development manager's role was something that Logos did;

(2) disagreed that Mr Mead said that the terms which Citius was proposing were not terms on which Logos could really work with Citius;

(3) denied Mr Mead said that Logos was not a passive investor but that its core business was providing development management services; and

(4) denied that Mr Mead said that he did not think that Citius's proposal was something that Logos would be able to do.

179 In cross-examination, Mr Tobin denied that he said Citius had control of the site. He said that he identified the site and that Citius was in negotiations. In examination-in-chief, he stated that 'we were very upfront that we were in final negotiations with the vendors of that site'.[9] As is evident, I am unable to accept Mr Tobin's evidence that he was 'upfront' at this time in light of his acknowledgment, as set out above, that he did not divulge too much about the differing levels of interest of Busways and Hargreaves.

180 When asked what 'we were in final negotiations' meant, Mr Tobin replied '[w]hether that amounts to control is ... up for interpretation'.[10] He said 'we said exactly what the situation was'.[11] I refer to my comments in the previous paragraph.

(1) agreed that he said words to the effect that Citius could bring tenants to the deal, manage the builders and deal with the development approval;

(2) did not recall specifically saying that he wanted to look after leasing. However, he acknowledged he might have said it; and

(3) did not recall saying that he had tenants he could introduce for the Hargreaves Property. He said if he did say it, he would have referred to prospective tenants. He said there was one prospective tenant in mind, namely, Blackmores. However, he then conceded that he did not believe he was actually aware of Blackmores's interest at this stage.

182 Mr Hemingway did not give any evidence of any discussion with Mr Timso, Mr Mead and Mr Tobin on 26 February 2016.

183 Mr Mead recalled a telephone call at about 11:00am on 26 February 2016 (based on the meeting invitation). He said that he and Mr Timso were in an office of the Logos Group in Sydney. He said the call was with Mr Hemingway and Mr Tobin. Mr Mead said the call lasted approximately 15 minutes.

184 Mr Mead said that it was an introductory discussion about the Marsden Park properties. Mr Mead said that at this time he did not know the exact location but knew the general location of them. In cross-examination, he said he remembered a brief outline of the location of the road infrastructure. He said that he did not recall Mr Tobin saying that the land consisted of two 20 ha parcels. He had no recollection of the land being split across two different sites.

185 Mr Mead said that Mr Hemingway introduced Mr Tobin and then Mr Tobin introduced himself and gave 'the indication that he had control of a site at Marsden Park' of 40 ha.[12] I will deal with the evidence relating to the Control Representation further below.

186 Mr Mead said Mr Tobin outlined his abilities and his desire to be involved in the project as the developer. He said Mr Tobin indicated he had experience in this type of development and had the ability to provide all the services for the development. Mr Mead said that he got the impression that Mr Tobin needed a passive investor to provide capital and that he was expecting the role of developer. Mr Mead said he told Mr Tobin that this was not an arrangement that Logos could consider, as the role of Logos was to manage funds on behalf of clients and that those clients allocate funds to Logos because they trust its ability and capacity to manage the development process. He told Mr Tobin there may be a project management role for him. Mr Mead said that Mr Timso also informed Mr Tobin that, in substance, the proposed arrangement was not something Logos would do. Mr Mead said they got a very negative response from Mr Tobin. He said that Mr Tobin replied that that was not his understanding. As a result, there was an acknowledgement that they would have to talk to Mr Iliffe.

187 Mr Mead gave evidence that Mr Tobin introduced himself and gave the indication that he had control of a site at Marsden Park. He was asked what he could recall about the word 'control'. He said that he:

(1) did not recall any specific words regarding the type of control but that he recalled the word 'control' being used;

(2) assumed at that meeting that Mr Tobin was in control of the site; and

(3) assumed that Mr Tobin had an option on the site but did not recall any specific words being used.

188 In response to one question, he agreed that he could not say in what context specifically the word 'control' was used. In cross-examination, Mr Mead did not recall Mr Tobin discussing he was in final negotiations with the vendor of the site, or Mr Tobin saying he was still to conclude a formal heads of agreement with the vendor of the site.

189 Mr Mead recalled Mr Tobin giving an indication that he had a major tenant that was interested in the development. He said Mr Tobin referred to 40,000 square metres as an indicative size of what the tenant required. Mr Mead could remember little else about the conversation. He said there was very little detail discussed about the site.

190 Mr Timso recalled organising a telephone conference with Mr Hemingway and Mr Tobin at 11.00am on 26 February 2016. He attended the conference at the Logos Sydney office with Mr Mead. Mr Timso said the purpose of the call was to facilitate an introduction to Mr Tobin and for Mr Tobin to provide information about the opportunity, and then for Mr Mead and Mr Timso to discuss with Mr Iliffe whether to pursue the opportunity. Mr Timso had read the 25 February letter before this call and had a copy of it with him during the call.

191 Mr Timso said the call lasted no more than 15 minutes. Mr Timso said before this time he knew of both Mr Hemingway and Mr Tobin, but had not spoken to them. He said that Mr Tobin had said he was working on an opportunity that he had introduced to Mr Iliffe, and that he wanted to see if there was a way that Citius and Logos could work together on this opportunity. He said it was a large site in Western Sydney. He had already known broadly that it was in Marsden Park through discussions with Mr Iliffe.

192 Mr Timso said that Mr Tobin then explained the opportunity as a development opportunity that he would be able to assist Logos with in the capacity of development/project manager. He said that the discussion of the opportunity was extremely vague as Mr Tobin did not identify the exact location of the property but spoke about it in terms of a large opportunity and referred to some high level figures.

193 Mr Timso's evidence was that Mr Tobin had said that:

(1) he had tenants that would be looking at leasing into the site;

(2) he had a couple of tenants that he wanted to bring along and required Logos to provide a capital solution; and

(3) he had tenants 'lined up' but that he did not disclose who the tenants were.

194 In cross-examination, Mr Timso recalled Mr Tobin saying he had a prospective major tenant that was interested in the site. Mr Timso agreed that his recollection was that Mr Tobin was talking about potential tenants.

195 Mr Timso gave evidence that Mr Tobin said that Citius would be able to work with Logos as the development manager. Mr Timso said that this was very unusual for Logos and in particular Mr Mead. Mr Timso said Logos is a development manager, an asset manager and an investment manager. Mr Timso said it was very unusual for somebody else to be advising that they would be providing those services to Logos as Logos had never been simply a passive funding partner. As a result, Mr Timso said that Mr Mead questioned the role that Citius would be playing, as it would directly conflict with what Mr Mead and his employees did at that stage. He said Mr Mead 'laughed at it and sort of asked the question, "So, what does Logos do?"'[13] He said Mr Tobin responded that that was something that would have to be worked out with Mr Iliffe.

196 In cross-examination, Mr Timso said that Mr Tobin spoke about the site 'in the sense that he had control over the site and required us to make a quick decision on ... our ability to ... partner with him on it'.[14] He said Mr Tobin did not discuss the details of his direct holdings or any sort of discussions he was having with any of the vendors. Mr Timso did not recall that Mr Tobin identified he was in final negotiations with the vendor of one or two sites. Nor did he recall Mr Tobin saying he needed to conclude a formal heads of agreement with the vendors of one site and that he didn't want to do so until he had an agreement in place with an investor.

197 Further, when being cross-examined, Mr Timso said that, by this time by reason of the 25 February letter, he was aware that there was a possibility of the acquisition of one 20 ha parcel. However, Mr Timso did not recall this being discussed during the telephone call. He said the discussion was around the 40 ha site. He said that the 20 ha opportunity was provided as an option, however the focus during the telephone call was on a large 40 ha site in Western Sydney.

198 Mr Timso said he had no further dealings with Citius after this time. However, he acknowledged that he received the 26 February letter from Citius.

6.2.2 Submissions and findings concerning the call with Mr Tobin, Mr Hemingway, Mr Mead and Mr Timso

199 Logos submitted that it was common ground that during this call, Mr Tobin expressed his desire to enter into a development management/project management agreement with Logos and the call ended with Mr Mead and Mr Timso stating they would speak to Mr Iliffe. However, Logos submitted that there was a divergence between the evidence of Mr Tobin on the one hand and Mr Mead and Mr Timso on the other concerning the balance of the call.

200 As to the evidence relating to the role Citius would perform, Logos submitted that the evidence of Mr Mead and Mr Timso was most likely given their recollection of events and Logos's own business model role as a development manager and project manager.

201 As to the evidence relating to the Control Representation, Logos submitted that both Mr Mead and Mr Timso gave evidence of the Control Representation being made. By contrast, Mr Tobin's evidence was that he told them that Citius was in final negotiations with the vendor of that site. Logos relied upon the fact that, when asked what final negotiations meant, Mr Tobin responded 'that's what was said. Whether that amounts to control is ... up for interpretation'. Further, Logos relied upon the fact that neither Mr Mead nor Mr Timso recalled Mr Tobin referring to negotiations with a third party as vendor.

202 As to the evidence relating to the alleged Tenant Representation, Logos relied upon Mr Mead's evidence that Mr Tobin indicated he had a major tenant that was interested in leasing a 40,000 m² site. It also relied upon Mr Timso's evidence that Mr Tobin said he had tenants that were looking at leasing the site. Logos noted Mr Tobin's evidence that, if he did refer to tenants at that meeting, it would have been prospective tenants. Logos submitted this evidence should be treated as a reconstruction and not a genuine recollection of what Mr Tobin recalls he said about tenants.

203 As to the conversation between Mr Tobin, Mr Hemingway, Mr Mead and Mr Timso, I find as follows:

(1) the conversation was an introductory conversation and the opportunity in relation to the Marsden Park properties was only discussed at a high level;

(2) the conversation took approximately 15 minutes;

(3) for the most part, the discussion related to the 40 ha site in Marsden Park and there was little if any separate discussion about the Hargreaves Property or the Adjoining Property;

(4) Mr Tobin raised his desire to enter into a joint development and project management agreement with Logos;

(5) Mr Mead, in particular, expressed surprise at this proposal stating, in substance, 'what role would Logos do?', in light of the fact that Logos acted as the development manager and project manager for its investor clients; and

(6) Mr Tobin was not happy with this response and the matter of the role of Citius was left to be resolved between Mr Tobin and Mr Iliffe.

204 As to [203](1) and (2), these findings are consistent with the evidence of Mr Tobin, Mr Mead and Mr Timso. They are also consistent with the stage at which this conversation took place and, in particular, the limited information available to Logos concerning the Marsden Park opportunity at the time, and the limited time available to Logos to consider that information.

205 As to [203](3), this is also consistent with the evidence of Mr Tobin, Mr Mead and Mr Timso and with the 25 February letter, which focused on an opportunity to acquire a 40 ha site and provided estimated costs, valuations, revenues and profit margins on that basis. As to [203](4), this is not really in dispute.

206 As to [203](5) and (6) above, these findings are consistent with the substance of the evidence of Mr Mead and Mr Timso that, in response to the suggestion that Citius wanted to work with Logos in respect of development and project management, Mr Mead and/or Mr Timso responded to the effect that this was not an arrangement Logos could consider: that is not what Logos did or would do. These findings are also consistent with the nature of the work which Logos undertook as part of the joint venture. In this regard, I accept the evidence of Mr Timso that he said that Logos had never been simply a passive funding partner. These finding are also consistent with the email from Mr Timso to Mr Iliffe copied to Mr Mead on 26 February 2016 (9.11am) set out above at the commencement of section 6.2 and with the email from Mr Mead to Mr Marsh of Logos on 29 February 2016 (9.31am) set out in section 6.5 below.

207 For completeness, I do not accept the evidence of Mr Tobin that Mr Mead and Mr Timso did not question Citius's role in light of Logos's business.

208 As to the alleged Control Representation made during this call, Mr Tobin disputed that he said words to the effect that Citius had control of the site. I do not accept that evidence.

209 First, Mr Timso gave evidence that Mr Tobin did not raise the discussions he was having with the vendors of the site. Rather, he said Mr Tobin 'spoke about [the Marsden Park properties], in the sense that he had control over the site and required us to make a quick decision on ... our ability to ... partner with him on it'.[15] I accept that evidence.

210 Second, Mr Mead gave evidence that Mr Tobin gave the indication he had control of a site at Marsden Park of 40 ha. He clearly recalled the word 'control' being used by Mr Tobin and gave evidence that he assumed Mr Tobin had an option on that site. I am conscious that Mr Mead gave an answer to one question that he could not say in what context specifically the word 'control' was used. Nevertheless, I am satisfied, viewing Mr Mead's evidence as a whole, that Mr Tobin said words to the effect that he had control in the context of the Marsden Park properties.

211 As a result, in my view, it is more likely than not that Mr Tobin said words to the effect that he had 'control' in the context of the Marsden Park properties in his conversation with Mr Hemingway, Mr Mead and Mr Timso. Further, in light of the contents of the 25 February letter (which related to the Marsden Park properties) and the general introductory nature of the discussion between Mr Tobin, Mr Hemingway, Mr Mead and Mr Timso, I have concluded that 'site' in this context meant, and was reasonably understood to mean, the Marsden Park properties.

212 My conclusion that Mr Tobin said words to the effect that he had 'control' of the Marsden Park properties is also consistent with:

(1) my findings in respect of the 26 February conversations between Mr Tobin and Mr Iliffe (set out in section 6.2.4 below) and the 29 February conversation between Mr Tobin and Mr Iliffe (set out in section 7.5, to the effect that Mr Tobin used the word control in the context of the Hargreaves Property);

(2) the email from Mr Tobin to Mr Iliffe dated 2 March 2016 (9.22am) in which Mr Tobin referred to the need to nominate an investor 'in order to maintain our control over the development site'[16] (see section 8.2 below); and

(3) the email from Mr Tobin to Mr Iliffe dated 2 March 2016 (5.35pm) which refers to Citius not having 'full control over the program just yet'[17] (see section 8.5 below).

213 Further, and related to the last point, I do not accept the evidence of Mr Tobin that he was 'upfront' in telling Mr Mead and Mr Timso that he was in final negotiations with the vendors of the site, by which he meant the Marsden Park properties. I refer to my comments in [179] above. Further, I am not satisfied that Mr Tobin made statements to the effect as set out in [176](6) above. Such statements are inconsistent with the email from Mr Tobin to Mr Wall dated 26 February 2016 (5.42pm) (i.e. the 26 February Citius email referred to in section 6.5 below).

214 Further, as to the alleged Tenant Representation made during this call, I have formed the view that Mr Tobin said words to the effect that he had a prospective major tenant that was, or may be, interested in the development. This finding is consistent with the evidence of Mr Tobin in [181](1) and (3) above, and the evidence of Mr Mead that he recalled Mr Tobin giving an indication he had a major tenant that was interested in the development. I am conscious that Mr Timso gave evidence to the effect that he had tenants 'lined up'. However, on reviewing Mr Timso's evidence as a whole, he stated in substance that Mr Tobin said that he had tenants that would be looking at leasing the site and that he had a 'prospective major tenant' that was interested in the site or that he wanted to bring along.

215 On the balance of probabilities, I am not satisfied that the evidence supports a finding that the Tenant Representation was made, namely that Citius had a tenant or tenants for the Marsden Park properties. This finding is also consistent with my findings in respect of the 26 February conversations between Mr Tobin and Mr Iliffe (set out in section 6.2.4) and the 29 February conversation (set out in section 7.5). This finding is also consistent with Mr Tobin's evidence about Blackmores which was the subject of the email from Mr Tobin to Mr Iliffe dated 3 March 2016 (5.20pm) referred to in section 8.6 below.

6.2.3 Evidence of conversations between Mr Tobin and Mr Iliffe

216 As to the first conversation between Mr Tobin and Mr Iliffe on 26 February 2016, Mr Tobin said in evidence-in-chief that:

(1) he did not recall whether Mr Hemingway was involved in this conversation;

(2) they discussed the contents of the 25 February letter;

(3) he did not identify the actual location of the Marsden Park properties;

(4) Mr Iliffe was positive, but not 'red-hot' about the proposal; and

(5) Mr Iliffe said that he wanted to go back and speak to some of his executives about the proposal and that those executives would come back to him for further discussions.

217 Mr Iliffe said he recalled a conversation on the morning of 26 February 2016 with Mr Tobin which was a 'pretty high level of discussion' about the 25 February letter. Mr Iliffe agreed that he told Mr Tobin that he wanted to speak with his development executives at Logos. He gave evidence that he also wanted Mr Tobin to talk to them to give them a high level overview of the opportunity.

218 Mr Iliffe said that during this first conversation they discussed Mr Tobin's control of the projects and his contact with tenants. He did not give any further details of any discussions about control in the first conversation.

219 As to the discussion concerning tenants, Mr Iliffe agreed that Mr Tobin told him in the first conversation that Mr Tobin was confident that he could succeed in securing tenants to the project if Logos were to proceed with the acquisition. When it was suggested in cross-examination that Mr Tobin did not say that he had tenants, but that he expressed confidence that he would be able to secure tenants if the project went ahead, Mr Iliffe replied that 'Mr Tobin told us he had strong demand from tenants'.[18]

220 Mr Iliffe gave evidence that he would only expect a heads of agreement with potential tenants not earlier than the conclusion of the due diligence process in respect of the acquisition of land. He said that in light of the timing, he did not expect Mr Tobin to have a heads of agreement with a tenant at that point. He acknowledged that the heads of agreement would not be binding.

221 As to the second conversation between Mr Tobin and Mr Iliffe on 26 February 2016, Mr Tobin said there was a discussion with Mr Iliffe at approximately 1.00pm. He gave evidence that during that conversation:

(1) Mr Iliffe confirmed that Logos was interested in the Marsden Park properties and Mr Tobin and Mr Iliffe agreed to focus on the 20 ha initially (i.e. the Hargreaves Property); and

(2) it was agreed that Mr Tobin would write to Mr Iliffe to provide more detail around the intended structure and the commercial arrangements that would apply between Logos and Citius for the development management and the project management roles.

222 In cross-examination, Mr Tobin denied that he told Mr Iliffe he had control of the site or had tenants for the site. As to any alleged Tenant Representation, Mr Tobin said that he reiterated that the site was attractive to prospective tenants and he was confident in being able to attract them. Mr Tobin said he never told Mr Iliffe that he had tenants. He denied he said something to the effect that he could finalise the deal with the tenants alongside the sale process.

223 Mr Tobin agreed that he said that he wanted to work with Logos to develop the 40 ha property and that if Logos became the purchaser, Citius wanted to act as development manager. However, Mr Tobin disagreed that, in response, Mr Iliffe said something to the effect that, if Citius had control and if Citius had the tenants, then Logos would be interested in looking at what Mr Tobin was talking about.

224 Mr Iliffe said he had a later telephone conversation with Mr Tobin and Mr Hemingway on 26 February 2016. This was in a context where Mr Iliffe gave evidence that he was informed of the discussion between Mr Hemingway, Mr Tobin, Mr Timso and Mr Mead. He said the call took 10 or 15 minutes. He gave evidence that there was a high level of interest in the site within Logos.

225 In evidence-in-chief, Mr Iliffe said that during his conversation with Mr Tobin and Mr Hemingway:

(1) Mr Tobin said that he had 'control of the site and had agreed to buy some land in Marsden Park';

(2) Mr Tobin also confirmed he had a 'strong tenant interest'[19] for the location because they had to discuss that it was typically an owner-occupier market; and

(3) they discussed that Marsden Park was typically an owner-occupier market, which was of concern, and that Mr Tobin told him that he had a 'strong customer interest'[20] for the location so that meant Logos didn't need to be as concerned about occupiers.

226 Mr Iliffe said that was all he could recall being discussed: the control of the site, that Mr Tobin had agreed to deal with the vendor and that Mr Tobin had a strong customer (i.e. tenant) interest. Mr Iliffe said he confirmed that Logos would then have an interest in pursuing this opportunity.

227 Mr Iliffe said that during this conversation his recollection was that Mr Tobin said that he had control of the site. When it was put to him that he could not recall the exact words which Mr Tobin used, he replied that his only recollection was that Mr Tobin had control of the site. He denied that Mr Tobin did not use the word 'control' in relation to the site in this conversation. When asked whether he recalled the precise words used or whether this was an impression, he replied '[a]h my impression is he had, he said he'd had control of the site as he referred to many times'.[21] Mr Iliffe maintained Mr Tobin said these words.

228 In cross-examination, Mr Iliffe denied that during that conversation he expressed a view that he would be focusing on a 20 ha property rather than a 40 ha property. He said he did not have sufficient detail to make a decision at that point.

229 Mr Iliffe said his understanding from that phone call was that Mr Tobin would furnish more information on the site to show the level of control that Mr Tobin had, and that Mr Tobin would send a proposal on how he would act with Logos. Mr Iliffe agreed that Mr Tobin told him that he would set out in writing a more detailed description of the intended development roles and fees which Citius was seeking to include in an agreement.

6.2.4 Submissions and findings as to the conversations between Mr Tobin and Mr Iliffe on 26 February 2016

(1) in the first 26 February conversation between Mr Tobin and Mr Iliffe, Mr Tobin made the Tenant Representation; and

(2) in the second 26 February conversation between Mr Tobin and Mr Iliffe, Mr Tobin made the Control Representation and the Tenant Representation.

231 As set out above, I have found that there were two conversations between Mr Iliffe and Mr Tobin on 26 February 2016. In light of the evidence given in respect of these conversations, it is appropriate I make findings as to the substance of what was discussed during those conversations.

232 This is in a context where I acknowledge that during the first conversation, there was a high level discussion about the 25 February letter and that Mr Iliffe expressed an interest in pursuing the proposal relating to the Marsden Park properties, but that he wanted to speak further with his executives at Logos. By contrast, during the second conversation, I have concluded that Mr Iliffe said that he had a high level of interest in the Marsden Park properties and that Mr Tobin said that he would set out in writing a more detailed description of the intended development roles and fees which Citius was seeking to include in any agreement.

233 The issues of substance in dispute, as to the contents of the two conversations between Mr Tobin and Mr Iliffe on 26 February, related to whether Mr Tobin made either or both of the Development Representations. Mr Iliffe gave evidence that statements to this effect were made by Mr Tobin during each conversation with him on 26 February 2016.

234 As to the alleged Tenant Representation, Mr Iliffe gave evidence of a general nature that Mr Tobin said he had tenants. But when asked specific questions about what was said, Mr Iliffe gave evidence that Mr Tobin confirmed that he had 'strong tenant interest' and 'strong customer interest' for the location, as set out at [225] above. As set out above in [219] above, Mr Iliffe also said that during his first conversation with Mr Tobin on 26 February 2016, Mr Tobin said that he was confident that he could succeed in securing tenants to the project if Logos were to proceed with the acquisition.

235 This evidence is far from the Tenant Representation as alleged in the counterclaim, namely that 'the plaintiff had a tenant or tenants' for the Marsden Park properties. I am not satisfied on the balance of probabilities that such a representation was made in the conversations between Mr Tobin and Mr Iliffe on 26 February. Viewing the evidence of these conversation as a whole, I have formed the view that the statements made were more akin to a statement that Mr Tobin had prospective tenants, or that he would be able to secure tenants. In this context, I note that, as set out above, Mr Tobin gave evidence that he denied that he ever told Mr Iliffe that he had tenants for the Marsden Park properties but referred to proposals to be put to prospective tenants.

236 As a result, I accept the evidence of both Mr Iliffe and Mr Tobin to the effect that Mr Tobin was confident in securing tenants in due course. These findings are confirmed by my findings in respect of the Tenant Representation in the conversation between Mr Tobin, Mr Hemingway, Mr Mead and Mr Timso also on 26 February 2016, set out above.

237 As to the alleged Control Representation, Mr Iliffe gave evidence that Mr Tobin spoke of his control during both the first and second conversation on 26 February 2016. As set out at [218] above, Mr Iliffe said that in the first conversation they discussed Mr Tobin's control of the projects. As to the second conversation, Mr Iliffe gave evidence that Mr Tobin said he had 'control of the site and had agreed to buy some land in Marsden [22]rk'.22

238 Mr Iliffe re-iterated in his evidence that Mr Tobin said he had control of the site (i.e. the Marsden Park properties). While I acknowledge he could not recall the exact words Mr Tobin used, he had a clear recollection of the use of the word control in the context of the site. I refer to my summary of his evidence in [227] above. By contrast, Mr Tobin denied that he told Mr Iliffe that he had control of the site.

239 On balance, on the evidence before me, it is more likely than not that Mr Tobin said words during his conversation with Mr Iliffe on 26 February 2016 to the effect that he had 'control' of the site. Once again, in light of the contents of the 25 February letter (which related to the Marsden Park properties) and the general nature of the discussion between Mr Tobin and Mr Iliffe at this time, I have concluded that 'site' in this context meant, and was reasonably understood to mean, the Marsden Park properties. As to Mr Tobin's use of the word 'control', I also refer to [212] above.

240 On 26 February 2016 (2.37pm), Mr Tobin sent an email to Mr Iliffe, copied to Mr Hemingway, attaching a letter to Logos (the 26 February letter). The email provided:

As discussed earlier today, I've set out in the attached letter, a more detailed description of our intended development roles and fees, which we ask you treat confidentially.

I'd be happy to discuss these with you, and how they might fit in with your own objectives, when you're back in the office on Monday.

Feel free to call me over the weekend, if necessary.

241 The 26 February letter addressed a number of matters. Like the 25 February letter, it contained a number of sections headed 'Parties', 'Project', 'Partnership/Commercial Structure' and 'Transaction Documents'.

Thank you for your time on the telephone earlier today.

As discussed with you, and earlier with David Timso and Andrew Mead, we look forward to the prospect of working with LOGOS in the development of this project and progressing with the analysis and acquisition of the site.

We appreciate LOGOS is not a passive investor Group, and may also be in a position to fulfil some of the roles Citius would otherwise seek to undertake singularly. It is also possible that Citius and LOGOS may complement some of each other's skills and may elect to undertake some of the various roles jointly.

Set out below are details of the various roles Citius seeks to fulfil in the development of the project. They are our 'standard' skills and roles we've previously undertaken for many investors, both private and institutional. The ultimately determined roles will be established more formally via a more detailed Development Management Agreement to be structured for the acquisition and development of the above site.

243 In the section entitled 'Parties', Citius was defined as the 'Development Manager' or 'DM' and the final Logos entity confirmed as the purchaser of the Marsden Park properties was defined as the 'Investor'. Under the section headed 'Project', the project was referred to as 'the acquisition and development of the 40 ha (approx.) site'. The 26 February letter contained the same proposed development strategy as referred to in the 25 February letter set out above.

244 The section headed 'Partnership/Commercial Structure' was different to the same section in the 25 February letter. First, it noted that the Investor and Citius would 'enter into a Heads of Agreement based upon these terms' with a more detailed Development Agreement to be completed shortly thereafter. Second, it specified that, in the event that the Investor purchases the Marsden Park properties, Citius will be entitled to an acquisition fee of 1.25% of the purchase price excluding GST.

245 Third, it addressed the Development Manager role noting that Citius will act as the Development Manager for the project. It defined the Development Management role and fee as follows:

The DM role will include all liaison and negotiation with all stakeholders in the project including the Investor and all State and Local Government entities. It will include; the identification and engagement recommendations of key specialist consultants, supervision of the site master planning development and design. It will include the consideration, recommendation and selection of marketing consultants and real estate agents, and the subsequent instruction thereof. It will include the identification of prospective construction contractors for both civil works and building works.

Citius DM will also take the leading role in identifying and negotiating with prospective tenants, for the development of buildings at the project site. Preparation of project feasibility modelling, recommendations to the Investor, preparation of proposals to prospective tenants and negotiations with tenants and their representatives, will all form part of the DM role. The completion of all required formal documentation (HOA, AFL, Leases etc.) will all be undertaken and completed under Citius' direction, subject at all times to the Investor's approval and instructions.

Importantly, detailed, clear and efficient reporting of all project matters to the Investor will also clearly be the highest priority of the role. This is effected through an agreed Project Control Group structure and meetings, which Citius will establish in consultation with the Investor.

Fee: $29,500 per month.

246 Fourth, it addressed the Project Manager role, noting that Citius would take on all tasks required for the delivery of committed construction works on site. As to the nature of the project management role, the 26 February letter provided:

[Citius] will commission and oversee all design requirements for the obtaining of all necessary approvals for project infrastructure and building works. Citius PM will be responsible for the tendering and recommendations of works contracts for the construction of the estate. Citius PM will also be responsible for supervision of all works constructed at the estate.

Other and more specific responsibilities undertaken by Citius PM include; Detailed design supervision, Tender preparation, issue and awarding, contract reviews, confirming scopes of work, responding to contractor and consultant requests for information, regular site inspections and meetings with all key parties, resolution of contractor disputes, review and completion of periodic payment claims, extension of time claims, overseeing site industrial management, and coordination of separate works or independent contractors on site.

The role also includes the coordination of negotiations and works inspections with relevant statutory authorities/service providers, certification of work completion, notices of defects and defect rectification, and management of contractor securities. The role requires strong, but fair project and site presence, which Citius is well respected for.

The role will obviously require an accurate and easily understood reporting process, which is provided to the Investor via the Development Manager, through the forum of Regular site meetings and the Project Control Group structure. PM Fee: 2.15% of construction costs.

247 Fifth, the 26 February letter set out that, in the event of a land sale or building development being secured or completed on the Marsden Park properties, Citius would be entitled to a transaction fee of 1.5% of the value of the completed project or the sale price of the land/project.

248 The section headed 'Transaction Documents' noted that the primary documents required will include a heads of agreement between the Investor and Citius in accordance with the proposal outlined in the 26 February letter, a contract of sale between the vendor(s) and the Investor and a Development Management Agreement between the Investor and Citius. The 26 February letter concluded as follows:

We look forward to your review of these terms. Once considered, let's discuss both parties' objectives and determine if we can find a joint approach to our mutual satisfaction.

249 As to the reference to the 'Investor' in the 26 February letter, Mr Tobin said that he knew that Logos was the manager of a number of different funds and that the identity of the precise fund was not known to him at the time. However, he said the Investor he was referring to was the Logos Group. He said he was not aware which vehicle Logos would select to acquire the Marsden Park properties.

250 Mr Iliffe said he received and read the 26 February 2016 (2.37pm) email and the 26 February letter at the time it was received. He said he understood Mr Tobin was setting out in the 26 February letter what he was hoping to achieve from the relationship with Logos and his fees for his proposal to work with Logos.

251 Mr Iliffe recalled that the fees referred to in the 26 February letter were not in line with the fees that Logos received from its investor, ADIA. Mr Iliffe gave evidence, in substance, that the agreements which the Logos Group had entered into with ADIA governed the fees that the Logos Group could charge (i.e. the LALVIM Agreement). He said that Mr Tobin's fees in the 26 February letter were higher than the fees that Logos received as investment manager pursuant to these agreements. I will now deal with his understanding of each of these fees.

6.4 Mr Iliffe's understanding of the fees to which Logos was entitled

252 In dealing with Mr Iliffe's understanding of the fees received under the joint venture agreements, I acknowledge that there was some uncertainty about Mr Iliffe's evidence given the different names given to the various fees referred to in the contemporaneous documents and in evidence. Further, some of his evidence revealed that Mr Iliffe was himself uncertain about the nature of the fees payable to the Logos Group under the joint venture agreements.

253 In the context of the 1.25% acquisition fee for the purchase price in the 26 February letter, Mr Iliffe said that Logos's 'acquisition fee' under the agreement with ADIA was not 1.25% but 0.5%. It would appear that this was a reference to the 'Equity Investment Fee' determined in accordance with sch 2 of the LALVIM Agreement, set out in section 3.2 above. Mr Iliffe said Mr Tobin could not share or be part of a fee that is a lot more than the Logos Group received under the LALVIM Agreement.

254 In cross-examination, Mr Iliffe was taken to sch 2 to the LAVLIM Agreement which provided that the Equity Investment Fee was in effect 1%. It was suggested to him that his understanding of this fee was therefore mistaken. He disagreed. He said that because many projects were partly equity and partly debt funded in practice the Logos Group only received a fee under sch 2 of 0.5%. I accept that evidence. Mr Iliffe was then asked whether the purchase price of the Hargreaves Property was debt free. He answered, in substance, that the purchase price of the Hargreaves Property was all equity. It was put to him that if that was correct, then this formula would provide for a fee of $400,000. Mr Iliffe replied that he would not know the fee until the property had been acquired and the amount of debt determined.

255 Mr Iliffe gave evidence that there was an investment management fee payable under the LALVIM Agreement relating to the management of a completed project development once logistics facilities had been constructed and were being leased out to commercial customers. This evidence appears consistent with the summary of the LALVIM Agreement set out in section 3.2 above.

256 Further, Mr Iliffe gave evidence that he understood at the time that, if an investment was made in land for the purpose of development, it was a requirement that a development and project management agreement be entered into between the LALV Trustee (or a sub-trust for that project) and a Logos related entity. This evidence is consistent with the summary of the LALVIM Agreement and the Pro Forma Agreement set out in section 3.2 above. He agreed that the Pro Forma Agreement in sch 6 of the LALVIM Agreement formed the basis of any such agreement. He understood at this time, that the fee payable under the Pro Forma Agreement (with which he was then familiar) was 5% of the Project Costs as defined in the Pro Forma Agreement.

257 Mr Iliffe gave evidence that the Project Costs were set out in an approved budget to be paid monthly as the costs were being incurred, but that one tenth of the fee was to be retained until the conclusion of the project. He said that the Pro Forma Agreement had been entered into in respect of the four significant projects that the LALV Trust had acquired by this time, and that he saw no reason to doubt that the Pro Forma Agreement would not apply for any further projects. He said that he understood in 2016 that there was one encompassing role for development management and project management with one fee.

258 Mr Iliffe was taken to the development management fee of $29,500 per month in the 26 February letter. Mr Iliffe said that Logos Group did not have 'a set figure' for development costs, rather he said that the Logos fee related to the 'total development spend'.[23] Mr Iliffe was taken to the project management fee of 2.15% of construction costs in the 26 February letter. He said that Logos received, under its agreement with ADIA, a development management fee but there was no separate project management fee payable by ADIA. Of course, under the Pro Forma Agreement a combined Development and Project Management Fee was payable. I refer to my summary in section 3.2 above.

259 In the context of the transaction fee of 1.5% of the completed value/sale price in the 26 February letter, Mr Iliffe said the fees payable to Logos under the agreement with ADIA are 0.5% based upon the 'acquisition costs of the project'.[24] In my view, Mr Iliffe was confused when he gave this evidence. Mr Iliffe misunderstood either the question or the nature of the fees payable under the agreement with ADIA. As set out above, the 'acquisition fee' was generally 0.5% of the purchase price because many projects were partly equity and partly debt funded. By contrast, it appears that the transaction fee in the 26 February letter was subsequently replaced with the 'Incentive Fee' based upon the Performance Fee in the LALVIM Agreement.

260 In cross-examination, Mr Iliffe said there was a promote fee which is described in the LALVIM Agreement as the Performance Fee. Mr Iliffe gave evidence that in February 2016 it was his understanding that the calculation of the Performance Fee was to provide for the payment of that fee at the end of seven years after the establishment of the LALV Trust. Mr Iliffe agreed that his understanding at the time was that the Performance Fee 'was to be calculated by reference to 18 percent of the amount by which the total rate of return on the assets [of the LALV Trust] out-performed an annual hurdle rate of 11 percent'.[25] That generally accords with the calculation of the Performance Fee pursuant to sch 5 of the LALVIM Agreement referred to in section 3.2 above.

6.5 Other Citius and Logos communications in late February 2016

261 By email dated 26 February 2016 (5.20pm), Mr Iliffe sent the 26 February letter to Mr Timso and Mr Mead noting that he thought it was a '[g]ood gig' and asking if the site was a 'goer'. Mr Mead forwarded the email to Mr Marsh of Logos on 29 February 2016 (9.31am) noting that Mr Mead did not believe Logos should be agreeing to such an arrangement. This email from Mr Mead to Mr Marsh is significant. In my view, it confirms that Mr Mead was not at all happy with the proposal that Mr Tobin was putting forward. In essence, Mr Mead was telling Mr Marsh what Mr Mead and Mr Timso told Mr Tobin in their conversation on 26 February 2016.

262 Mr Tobin sent an email to Mr Wall on 26 February 2016 (5.42pm) (i.e. the 26 February Citius email). In that email, Mr Tobin:

(1) stated that '[f]urther to our earlier discussion, we confirm we have not yet received unconditional approval to complete the Heads of Agreement' but Citius would advise of progress early next week;

(2) stated that, in order to bring about a conclusion to the delay in finalising the heads of agreement and to enable the commencement of the due diligence period, Citius proposed that Hargreaves enters into a heads of agreement with Citius;

(3) attached a heads of agreement between Hargreaves as vendor and Citius as purchaser, executed by Citius (the Citius HOA),[26] for the purchase of the Hargreaves Property for $42,960,000 (plus GST if applicable), subject to an exclusive eight week period to complete due diligence; and

(4) requested that the Citius HOA be sent to Hargreaves.

263 As to the statements in this email to the effect that Citius had not yet received unconditional approval from M&G to complete the heads of agreement, and that Citius would advise of progress early next week, I have concluded these were false. This is in light of the 24 February M&G email. Of course, Mr Tobin acknowledged the M&G decision in an email to M&G dated 25 February 2016. I refer to my findings in section 6.1.1 above.

264 Further, in cross-examination, after much reluctance, Mr Tobin conceded that it was likely that someone reading the statement quoted in [262](1) above would think that Citius might still get approval from M&G to complete the heads of agreement. Nevertheless, Mr Tobin gave evidence that this statement was accurate. Mr Tobin seemed to give evidence that, while he was aware that this statement may be read in this way, that is not what he intended as 'what I intended is contained with the whole of the e[27]il'.27

265 I found his evidence unsatisfactory and disingenuous. In my view, Mr Tobin was not being candid with Mr Wall or Hargreaves about the true state of negotiations with M&G. He ultimately conceded in cross-examination this was so. I have concluded he wanted Mr Wall and Hargreaves to consider that he was still negotiating with M&G and, as a result, to enter into a heads of agreement between Hargreaves and Citius. Mr Tobin was unwilling to answer the question if his intention was for Mr Wall to read the 26 February Citius email as indicating that M&G might well come back to accept the heads of agreement. He said there was no intention to mislead but ultimately conceded the recipients would have assumed that from the 26 February Citius email. This does Mr Tobin no credit.

266 I note in passing that Mr Wall stated it was 'outside of the norm' that the party to a heads of agreement was no longer the party that had been represented in previous discussions.[28]

267 On 29 February 2016 there was a telephone conversation between Mr Tobin and Mr Hemingway on the one hand, and Mr Iliffe on the other (i.e. the 29 February conversation). Mr Hemingway was present in Mr Tobin's office in Melbourne. The conversation took place at about 6.00pm. Mr Iliffe gave evidence that there may have been a conversation between him and Mr Tobin earlier that day. I have formed the view that there was only one conversation of substance between Mr Tobin and Mr Iliffe on 29 February 2016, being the 29 February conversation at about 6.00pm.

268 Much of the subject of the 29 February conversation was disputed in this proceeding. This included matters relating to the alleged reframed agreement and whether the Development Representations were made. Although in oral closing argument there was some agreement about what was discussed, there was no agreement on these key issues. As a result, in order to address the issues for determination, it is necessary to consider the evidence in some detail.

269 Before addressing the evidence of Mr Tobin, Mr Hemingway and Mr Iliffe in detail, I wish to record that their evidence referred to 'the site', but there was no clarification of whether 'the site' was a reference to one or both of the Marsden Park properties. I will address this issue when setting out my findings in respect of the 29 February conversation. However, when setting out the evidence, I will endeavour to refer to the words each witness used.

270 There is one further matter I wish to address at the outset. No contemporaneous file notes of the meeting were produced. However, Mr Tobin sent an email to Mr Iliffe the next day on 1 March 2016 at 9.47am (i.e. the 1 March email). Mr Tobin gave evidence that the 1 March email was prepared as a result of the matters discussed during the 29 February conversation and his subsequent review of the commercial terms proposed by Mr Iliffe during that conversation. Logos denied the accuracy of the record of the 29 February conversation contained in Mr Tobin's 1 March email. However, it is appropriate that I set it out at this stage, given that it was the basis for extensive cross-examination of Mr Tobin and Mr Iliffe as to the matters discussed in the 29 February conversation.

271 I have considered whether the 1 March email was an accurate record in light of my findings about the contents of the 26 February Citius email and my findings about Mr Tobin summarised in section 2.3. In short, I am not satisfied that the 1 March email is not an accurate record of what was discussed. This is in light of the evidence of the 29 February conversation. More importantly, this is also in light of the fact that Mr Iliffe (who took part in the 29 February conversation) had the opportunity to dispute the accuracy of statements in the 1 March email at the time. This is notwithstanding that Mr Iliffe responded by the 2 March (4.51pm) email noting the Logos qualification. However, Mr Iliffe did not correct many of the other inaccuracies which he asserted at trial were contained in the 1 March email. Nor did he do so in subsequent correspondence.

As agreed, we've reviewed the commercial terms you've proposed which would apply to the joint development management of the project.

We set out below confirmation of those terms discussed and confirm herewith our agreement to them being applied to the joint development management agreement which [w]ill be entered into by ADIA and LOGOS/Citius.

As you've proposed, LOGOS will share the following fees with Citius on an equal basis (50/50). We confirm you've advised us the fees are the subject of the existing agreement between LOGOS and ADIA:

• Acquisition Fee: 0.5% (all figures exclude GST).

• Development Management Fee: 5% of all development costs, excluding land.

• Project Management Fee: 1.25% of development costs.

• Incentive Fee/IRR share: 7 year fee structure. (LOGOS to provide more detail of structure and calculation).

We've discussed and agreed LOGOS and Citius will determine the most appropriate [al]location and sharing of the various required roles between us, in future discussions.

Also, we need to determine an appropriate, separate fee for Graham Hemingway and Gill Property, for his role in our agreement.

We request you provide immediate confirmation of the above agreement.

Upon receipt of your confirmation, we will issue you will [sic] all information about the site(s), and also issued the revised feasibility model, which will be amended to incorporate the above fees.

We look forward to receiving your confirmation and the prospect of working alongside you and the LOGOS team in the delivery of this exciting project.

273 Mr Tobin said the meeting on 29 February 2016 took place at 6 or 7.00pm and went for an hour or two. He said that Mr Hemingway was in his office and that his presence was known to Mr Iliffe. The conversation was conducted by Mr Tobin on speakerphone. Mr Tobin gave evidence-in-chief that:

(1) Mr Iliffe started the conversation by confirming that Logos had a strong interest in reaching agreement with Citius and moving to acquire the site;

(2) Mr Iliffe said he had read the 26 February letter and wanted to discuss the fee structure that would apply;

(3) Mr Iliffe disclosed the identity and role of ADIA, a sovereign fund, and that this project would suit the existing agreement between Logos and ADIA;[29]

(4) Mr Iliffe wanted to negotiate a fee structure for the development and project management roles that was in accordance with the ADIA agreement;

(5) Mr Iliffe explained that the fees of Logos were already subject to the ADIA agreement and that 'it was easier for'[30] Logos to work with the fee structure in accordance with that agreement; and

(6) Mr Iliffe said the ADIA agreement was a long-standing agreement by which Logos managed funds on behalf of ADIA, and that the ADIA agreement contained fixed fees for the development and project management services that applied between them.

274 As to the discussion about fees, Mr Tobin said that Mr Iliffe sought to compare the fee proposal that Citius made in the 26 February letter with the fee structure in the ADIA agreement. Mr Tobin gave evidence that Mr Iliffe explained that his preferred proposal was to effectively share the fees that would be payable to Logos under the ADIA agreement with Citius on a 50/50 basis.

275 In summary, Mr Tobin gave evidence that four specific fees were discussed based on the 26 February letter.

276 Mr Tobin said that the first item compared was the acquisition fee. He said that Citius proposed a fee of 1.25% in the 26 February letter. Mr Tobin said that Mr Iliffe said Logos received an acquisition fee of 0.5% under the ADIA agreement. As a result, Mr Tobin said that under Mr Iliffe's proposal, the acquisition fee was reduced to 0.25%, being 50% of the fee that Logos was entitled to under that agreement.

277 Mr Tobin said that they then discussed the proposed development management fee. Under the 26 February letter Citius had proposed a development management fee of $29,500 per month. Mr Tobin said that Mr Iliffe said that the fee between Logos and ADIA was 5% of development costs so that a 50% share of that fee would equate to 2.5% to Citius.

278 Mr Tobin said they then discussed a project management fee. Under the 26 February letter, Citius proposed a project management fee of 2.15% of construction costs. Mr Tobin said that Mr Iliffe said that Logos was entitled to a project management fee of 1.25% under the agreement between Logos and ADIA and that he proposed that Citius share those fees so that Citius's fee would be 0.625%. Mr Tobin gave evidence that Mr Iliffe was 'quite specific about it'.[31]

279 Mr Tobin was challenged in cross-examination as to whether Mr Iliffe referred to a project management fee. Mr Tobin replied that Mr Iliffe specifically discussed the project management fee and the rate of 1.25% during the 29 February conversation. He denied he could be wrong about this. He said it was discussed and that this was confirmed in the 1 March email. However, he agreed that it appeared there is no such separate project management fee payable to Logos under the ADIA agreement.

280 Mr Tobin said they then discussed the transaction fee of 1.5% (which was referred to in the 26 February letter). Mr Tobin said Mr Iliffe explained that Logos's agreement with ADIA provided for a performance fee. Mr Tobin said that he was familiar with the nature of performance fees at the time. He gave evidence that Mr Iliffe explained that the Performance Fee would apply at the end of a fixed period. Mr Tobin said Mr Iliffe could not recall the precise percentages. He said that Mr Iliffe's exact words were '[i]t's something like 17 or 18 percent of a linear excess over a target IRR [of] 10 or 11 per cent'.[32] Later, Mr Tobin said that Mr Iliffe said '[l]ook, I can't recall the exact percentages, it's something like 17 or 18 percent over an IRR target of 11 percent'.[33]

281 In cross-examination, Mr Tobin reiterated what he said in his evidence-in-chief. He confirmed this evidence to the effect that Mr Iliffe said that the Performance Fee was calculated at a percentage of around 17 or 18% above an IRR target of around 11%. He said that Mr Iliffe did not mention that fee was associated with a broader fund [i.e. the joint venture]. He said Mr Iliffe did not make any reference to other projects within the same fund. He said he and Mr Iliffe were talking about a specific fee that related to the Marsden Park project. Mr Tobin assumed that the Performance Fee calculation Mr Iliffe proposed was in relation to the single project. He said Mr Iliffe did not make mention of the Performance Fee being calculated against the fund as opposed to against the individual Marsden Park project. He said that Mr Iliffe undertook to provide Mr Tobin with the details in the ADIA agreement the next day.

282 As to the description of the incentive fee in the 1 March email, it was put to Mr Tobin that this reflected the fact that he did not have enough information to calculate the fee at that stage. Mr Tobin disagreed. He said he had enough information to agree to it even though he did not have enough information for a final calculation. Mr Tobin said this is because Mr Iliffe told him the range of fees with the approximate calculation structure which Mr Tobin was comfortable with. He was asked why he did not include the reference to the range of fees in the email. He said the 1 March email reflected the discussion that Mr Iliffe was to provide a confirmation of the calculation.

283 Mr Tobin gave evidence that during the discussion about each fee, he was making notes and doing calculations. He said he used these notes to prepare the 1 March email to Mr Iliffe but did not retain those notes. He said that he estimated at the time that the total fee agreement under Logos's agreement with ADIA was effectively double or twice the normal rates that Citius would charge for these type of agreements. As a result, he did not see too much difference with Mr Iliffe's proposal in an overall sense, despite the fact that some individual fees were different. Mr Tobin did not explain how he was able to calculate any part of the 'incentive' fee as referred to by Mr Iliffe. Mr Tobin said that the Citius proposal was about $8.5 million in total. By contrast, Mr Iliffe's proposal was about $5 million plus 50% of the Performance Fee. He thought the outcome would not be terribly different notwithstanding there was less certainty about the Performance Fee.

284 Mr Tobin said that he told Mr Iliffe that the proposal that Mr Iliffe made seemed acceptable and he was going to go over the numbers again overnight before emailing Mr Iliffe confirmation of the discussion and Citius's agreement the next day. Mr Tobin said Mr Iliffe said he was looking forward to receiving the confirming email the following morning and that is when the meeting concluded.

285 Mr Tobin said that he made it clear to Mr Iliffe at the 29 February conversation that it was only once agreement had been reached on Citius's appointment and the commercial terms that Citius would divulge the identity of the site and release further information about it.

286 Mr Tobin agreed in cross-examination that he and Mr Iliffe did not have much discussion about the specific roles that would need to be performed in order to 'access any part of the fee proposal'.[34] He said the only discussion was an acknowledgement that the roles would be shared. He said there would be a later discussion through the project control group meetings when the various roles and tasks that were required would be assigned across the team. Mr Tobin did not give evidence that this was discussed in the 29 February conversation: instead it appears this is what he was contemplating at the time.

287 It was put to Mr Tobin that what Citius would be paid and what Citius was going to do would be discussed at a later time as well. Mr Tobin disagreed. He gave evidence to the effect that Citius was happy with what they were being paid and that was the purpose and outcome of the meeting. Mr Tobin said it was discussed that both of them had similar experiences in the past where those functions were shared: '[s]ometimes the tasks take longer to conclude, sometimes they're shorter...in many instances, they overlap'.[35] Mr Tobin said that '[w]e agreed that we both understood clearly the roles that were required to deliver the project and that both parties would...determine...which was the most appropriate party to complete the various roles...as we were going along'.[36]

288 However, Mr Tobin acknowledged that he did not have any discussions at this meeting about when Citius would get paid.

289 Mr Tobin also said that the need to acknowledge Mr Hemingway's role in making the introduction was discussed in this conversation. However, he said that there was no agreement on a final fee given that Mr Hemingway was participating in the discussion.

290 Mr Tobin said that he had spoken to Mr Iliffe and told him that there was still some finality to be completed between Citius and the vendor (which in the context meant Hargreaves), namely a heads of agreement. Mr Tobin said that Citius could not do any of that until Citius had full acceptance from Logos that 'we had an agreement'.[37] Mr Tobin told Mr Iliffe that they had to keep moving forward over the next couple of days. He said Mr Iliffe replied not to take it to anybody else as Logos wanted this deal. Mr Tobin said it was on that basis that he agreed to write to him the following day and confirm the fees proposed and the agreement, and at the same time to divulge information including the identity of the site.

291 In cross-examination, Mr Tobin confirmed that he told Mr Iliffe that Citius was in final negotiations in respect of the Marsden Park properties but denied he said that Citius controlled 'it' (which in this context I understood to mean the Marsden Park properties). Mr Tobin said this was a most critical meeting and he had a clear recollection of that discussion. Mr Tobin denied he said the word control. He said he knew the meaning of the word control. He said if Citius had completed a heads of agreement by that stage, he would have said so.

292 It was put to Mr Tobin that he had nothing that valuable to offer Logos other than control. This was on the basis that Mr Iliffe could have rung Mr Wall or another agent to identify the Marsden Park properties. Mr Tobin agreed that Mr Iliffe could have done so. However, he denied that he said something to convey that Citius controlled the site. He said that '[w]e [Citius] just like to be upfront'.[38] I refer to my comments at [265] in section 6.5 and about Mr Tobin's credit generally in section 2.3.

293 Mr Tobin agreed they spoke about tenants at this meeting. However, he denied that he said Citius had tenants for the site. He said they spoke about identifying prospective tenants but that he did not nominate a specific tenant. Mr Tobin agreed that he said words to the effect of 'we'll have access to prospective tenants'.[39] However, he maintained his denial that he said that he had tenants. Mr Tobin agreed that he told Mr Iliffe about prospective tenants and the need to pursue them but disputed that he said he could bring committed tenants to the development.

294 Mr Tobin disputed that, in response to Mr Tobin talking about control and tenants, Mr Iliffe said that Logos might be interested in working together. Mr Tobin said there was no such qualification.

295 It was put to Mr Tobin that there was no attempt to negotiate any of the terms of the development management agreement at this meeting. He replied that he and Mr Iliffe discussed 'the key principle [sic] terms'.[40] He did not further elaborate on this conclusionary answer in his evidence.

296 It was put to Mr Tobin that at this time he was aware that Logos was not itself going to be a party that would enter into any of the transactions contemplated. Mr Tobin disagreed. He said he was aware that Logos managed a variety of funds. He thought it might be Logos or it might be one of the large funds. However, he agreed that it is an ordinary feature of those relationships that the fund manager has to get approval for transactions it enters into.

297 Mr Tobin was taken to the reference in the third paragraph of the 1 March email to 'the joint development management agreement which [w]ill be entered into by ADIA and LOGOS/Citius'. It was put to Mr Tobin that this suggested that the relevant agreement would be between the ADIA investor entity on the one part and Logos and Citius on the other. He originally answered that it had not been determined whether Citius would be engaged directly by the fund [i.e. the joint venture] or engaged separately by Logos. However, he ultimately agreed with the proposition that this paragraph of the 1 March email contemplated an agreement between the ADIA investor entity on the one part and Logos and Citius on the other.

298 Mr Tobin agreed that he knew that Logos managed the LALV Trust and co-owned it with ADIA. He agreed that an ordinary feature of such a relationship between parties like Logos and ADIA was that the fund manager (Logos) had to get approval for the transaction it enters into from a party such as ADIA. However, he did not know the process by which approval was to be obtained in this case. He said the whole acquisition was subject to due diligence and approval. He said all he was told was that the property was suitable for the fund that Logos co-owned and managed.

299 Mr Tobin said he did not know the ultimate ownership of the investor but knew it would be a separate entity. He said he knew the investor was predominantly owned by ADIA. He considered that Logos would nominate a specific entity to purchase the Hargreaves Property but that his agreement was with Logos.

300 Mr Hemingway said he participated in a telephone conference in late February 2016 with Mr Tobin and Mr Iliffe. He said Mr Tobin was present with him in Mr Tobin's office. Mr Hemingway was unable to recall the exact date, time or duration of this conversation. However, he recalled the conversation took place later in the day. Mr Hemingway was unable to recall whether he or Mr Tobin had documents in front of them during the 29 February conversation.

301 Mr Hemingway was unable to recall the details of this conversation such as what was said. However, he recalled that the main part of the discussion was about the Hargreaves Property and ongoing involvement and roles following any acquisition of the property by Logos. He said he believed there was discussion about the role of Citius going forward as project and development manager.

302 In evidence-in-chief, Mr Hemingway recalled that there was general agreement reached between Mr Iliffe and Mr Tobin regarding the roles to be performed by Citius and Logos. In cross-examination he agreed that he could not recall the detail of what was said but 'just the gist and the outcome of that discussion'.[41] He said he knew there was an agreement reached in respect of the ongoing role of Citius as development manager and/or as project manager. He said Mr Iliffe agreed to that. Mr Hemingway was unable to recall the details of this agreement such as the roles to be performed.

303 However, Mr Hemingway gave evidence to the effect that this was significant as it was a 'hurdle to jump over in the deal'.[42] He gave evidence to the effect that the fact that agreement was reached was something that stuck in his memory because he was quite happy about the fact that the agreement had been reached and the parties could move forward. In cross-examination he said:

I can remember that there was an agreement reached in respect to the ongoing role of Citius as development manager and/or project manager. Trent had agreed to that. I-the details I don't know. I think Simon's going to follow up with details the next day or something like that. It was-you know, if it was a meeting that was face-to-face, we all [would have] just stood up, shook hands around the table and walked away.[43]

304 In evidence-in-chief, Mr Hemingway gave no evidence in respect of the Development Representations. In cross-examination, Mr Hemingway did not recall Mr Tobin saying something to the effect that he controlled the land in Western Sydney that they were talking about. However, Mr Hemingway said it was his impression that Mr Tobin did control the land in Western Sydney.

305 In cross-examination, Mr Hemingway recalled that Mr Tobin spoke about tenants in the 29 February conversation. It was put to him that Mr Tobin said that he had tenants that he would be able to bring to the transaction. Mr Hemingway gave evidence that Mr Tobin talked about 'potential tenants ... [Mr Tobin] said there was certainly potential tenants looking'.[44] He did not recall Mr Tobin saying that he had tenants that he could bring.

306 Further, in cross-examination, Mr Hemingway was unable to recall any statements by Mr Iliffe to the effect that, if Mr Tobin had control and tenants, then Logos would be interested in working with Citius.

307 Mr Hemingway was also taken to an invoice dated 10 June 2016 issued by the G & S Hemingway Family Trust for $107,400 plus GST totalling $118,140. Mr Hemingway had little recollection about issuing this invoice other than that it would have happened when the transaction completed. As to the amount of the invoice, in cross-examination Mr Hemingway confirmed that 1% of a property's purchase price was an expected market rate for an introduction fee at that time. However, he confirmed that introduction fees could vary depending upon a number of factors, including the client or the value of the property, and may reach a maximum of about 2.5%. He agreed that the invoice amount here reflected only 0.25% of the purchase price of the property. He conceded that was the lower end of the range but that he was content to take that amount.

308 Mr Iliffe gave evidence that he had a telephone call with Mr Tobin and Mr Hemingway on Monday, 29 February 2016. Mr Iliffe was in Sydney at the time. He believes he was in his Logos office. He conducted the call on a hand set. To the best of his recollection, he did not have any documents in front of him at the time, in particular the 25 February letter or the 26 February letter.

309 Mr Iliffe suggested there was another conversation with Mr Tobin and/or Mr Hemingway on that day. In cross-examination he said he could not recall if Mr Hemingway took part. In evidence-in-chief, Mr Iliffe estimated the meeting went for about 15 or 20 minutes. It was suggested to him in cross-examination that it went for at least an hour. He disagreed.

310 In his evidence-in-chief, Mr Iliffe said the first thing talked about was the site and that the site was still of interest to Logos. He said Mr Tobin talked about the Marsden Park opportunity and then they talked through the fees. He said Mr Tobin reinforced the opportunity with the site, that Citius had control of the site and that there were tenants. I will deal with the Control and Tenant Representations further below.

311 Mr Iliffe agreed in cross-examination that during the 29 February conversation he expressed enthusiasm that Mr Tobin could bring this project together. He agreed that he wanted to discuss the fee structure that would apply in light of Citius's proposal in the 26 February letter. Mr Iliffe agreed that he disclosed at the time that, if the acquisition was to proceed, it would be done for the benefit of the joint venture between Logos and ADIA. He agreed that he told Mr Tobin that the investment looked like it might suit the LALV Trust. He also agreed that he said that the fees which Logos would earn if the acquisition went ahead were governed by the agreement that existed with ADIA and that any payment of fees to Citius would necessarily need to work within the context of that agreement.

312 Mr Iliffe said he told Mr Tobin that the fees that Logos got from ADIA were the only fees that Logos could share with Mr Tobin. In summary, Mr Iliffe gave evidence that he discussed three fees that Logos could share with Citius: an acquisition fee of 0.5%, a development management fee of 5% and a promote hurdle. He said they were the only fees he could consider sharing with Mr Tobin. He recalled saying that Logos could not pay Mr Tobin's fees (i.e. those referred to in the 26 February letter) because Logos did not achieve those fees with Harina and Mr Tobin could only share what was being paid by Logos's investor. Mr Iliffe said that Mr Tobin said in response that he understood that Logos could not be paying more than the fees that Logos was receiving and that he would come back to Mr Iliffe. I will address Mr Iliffe's evidence in respect of fees further below.

313 It was put to Mr Iliffe that he said words to the effect that the Logos proposal was that, if the agreement proceeded, Logos would share its fees that were payable under the ADIA agreement on a 50/50 basis with Citius. He agreed that was correct on the basis that 'Simon [Tobin] could deliver'.[45] Mr Iliffe continued that during the 29 February conversation, '[w]e were again reinforcing that he had control of the site and that he could deliver tenants. And I had said that these are the fees that Logos received and that we could look to share those ... if Mr Tobin could deliver that to us'.[46]

314 It was put to Mr Iliffe that Mr Tobin was talking about potential interest from tenants. Mr Iliffe replied that Mr Tobin was talking about delivering tenants. Mr Iliffe said 'you do not say you have tenants that you're dealing with unless you do ... Mr Tobin is well aware that to get a share of any of our fees, you would have to have control of the site and deliver tenants otherwise you would be like Mr Gill [i.e. Mr Hemingway]...'.[47] He reiterated that they had discussions during the 29 February conversation that Mr Tobin 'had control and had tenants ... [o]ne doesn't come without the other'.[48]

315 Mr Iliffe gave evidence, in effect, that Mr Tobin was not just offering a commercial opportunity to buy a property, like an agent such as Mr Hemingway, but an opportunity '[w]ith the bells and whistles'.[49] By this expression, Mr Iliffe meant that Mr Tobin said he had control of the site and had tenants for it. Mr Iliffe gave evidence that Mr Tobin has 'been around long enough. He knows that he does not get a share of those fees unless he's acting as a development manager and has control of the site. There's no - we would not share the figures otherwise'.[50] He was asked what he said to Mr Tobin about this. Mr Iliffe replied:

Mr Tobin said that he had control of the site and that he had tenants. And we said 'Well, we can share the fees that we receive under Logos through ADIA on that basis', so that was the intent. That was the intent we all moved forward on.[51]

316 It was put to Mr Iliffe that Mr Tobin said that he had reached a verbal agreement with the vendor of one of the sites. Mr Iliffe replied that Mr Tobin said he had reached agreement. He said there was no reference to a 'verbal', 'binding', or 'written' agreement.[52] Mr Iliffe said that in earlier conversations Mr Tobin initially said he had control of the 40 ha site but as time went on Mr Tobin said he had agreed to terms and agreed to buy the 21 ha site (i.e. the Hargreaves Property) and that he was in negotiation with the other 20 ha site (i.e. the Adjoining Property).

317 Mr Iliffe said Mr Tobin said that he had agreed terms with the vendor in respect of the 21 ha site and then said he had control of that site. He denied that Mr Tobin said that there were still some formalities to be completed with respect to the heads of agreement but that he had reached agreement with the vendor of the 21 ha site. He said Mr Tobin did not get into that detail. Mr Iliffe said that Mr Tobin just said he had reached an agreement.

318 Mr Iliffe reiterated that, while the language used by Mr Tobin was slightly different, the intent of Mr Tobin was always to the effect that 'I have control of the site and I have tenants'.[53] He said otherwise Mr Tobin knew there was no point in discussing fee sharing. In cross-examination it was put to Mr Iliffe that Mr Tobin never used the word control with respect of the 21 ha site. Mr Iliffe disagreed. It was put to Mr Iliffe that Mr Tobin never said he had tenants, but rather he said he was confident that the property was an attractive one and a good proposal from tenants would be able to be secured in time. Mr Iliffe disagreed.

319 Mr Iliffe was extensively cross-examined by counsel for Citius, in particular by reference to the 1 March email. Mr Iliffe said he read the 1 March email when it was received. However, in cross-examination, he gave evidence that he would have only skimmed the detail and read the sections relating to fees.

320 As to the 1 March email, Mr Iliffe said that he would have read the paragraph which notes among other things that '[a]s agreed', Citius had reviewed the commercial terms Mr Iliffe proposed which would apply to the joint development management of the project. Mr Iliffe was also taken to the paragraph in which Mr Tobin stated '[w]e set out below confirmation of those terms discussed and confirm herewith our agreement to them...'. Mr Iliffe gave evidence that 'that was Mr Tobin's proposal - not...not our agreement'.[54]

321 Mr Iliffe was taken to the paragraph of the 1 March email in relation to fees. It was suggested to him that, in the 29 February conversation, Mr Iliffe proposed that Logos would share its fees on an equal basis if Logos were to proceed with the acquisition of the property which Mr Tobin was offering. Mr Iliffe replied he proposed fees that Logos 'could' share. It was put to him that the 1 March email said the fees that Logos 'will share'. He replied that it was too early to be proposing some commitment. However, he agreed he did not respond to Mr Tobin to that effect in the 2 March (4.51pm) email, or at all.

322 In cross-examination, Mr Iliffe was asked about what was discussed in the 29 February conversation relating to the fees that Logos was entitled to under the ADIA agreement. Mr Iliffe said that he discussed three fees: an acquisition fee, a development fee and a promote or incentive fee.

323 Mr Iliffe said that he discussed an acquisition fee which Logos received of 0.5% under the ADIA agreement. I note that the 1 March email provides that the fees include an 'Acquisition Fee: 0.5% (all figures exclude GST)'.

324 Mr Iliffe said that he told Mr Tobin that under the ADIA agreement, there was a development management fee payable to Logos of 5% of all development costs excluding land. I note that the 1 March email provides that the fees include a 'Development Management Fee : 5% of all development costs, excluding land'.

325 However, Mr Iliffe did not agree that he told Mr Tobin in the 29 February conversation of the existence of a project management fee under the ADIA agreement of 1.25% of development costs. He denied he told Mr Tobin that the ADIA agreement contained fixed fees with regards to project management. He was taken to the reference to the 'Project Management Fee: 1.25% of development costs' in the 1 March email. While he agreed he did not respond to Mr Tobin to clarify this issue, he gave evidence that there was no point at this stage and that it was unnecessary. I will deal with Mr Iliffe's response to the 1 March email further below in sections 8.1 and 8.3.

326 Mr Iliffe said that he also told Mr Tobin about a promote fee (i.e. the Performance Fee) under the ADIA agreement. He told Mr Tobin that the fee was payable at the end of a seven-year term under the ADIA agreement. When asked whether Mr Iliffe told Mr Tobin that the figure was to be calculated on the basis of either a 17 or 18% share of any outperformance of an internal rate of return of either 10 or 11%, Mr Iliffe said he doubted he would have given any such details and then said he did not remember giving any details but could not say whether he did or did not give such details. However, when I sought clarification of this answer from Mr Iliffe, he said he had a clear recollection that he did not give any further detail other than it was a fee payable at the end of a seven-year term under the ADIA agreement. He acknowledged that he said that 'there was an incentive fee payable over a seven-year term - it's a seven-year venture'.[55]

327 It was put to Mr Iliffe that because the 1 March email referred to an 'Incentive Fee/IRR share: 7 year fee structure. (LOGOS to provide more detail of structure and calculation)' that he must have mentioned to Mr Tobin the existence of an incentive fee being based on an outperformance of the internal rate of return. He disagreed. He said in substance that an incentive fee is an IRR a fee.

328 Mr Iliffe agreed he never provided Mr Tobin with a copy of the LALVIM Agreement which set out the calculation of the Performance Fee. Mr Iliffe said that other than discussing the fees that were payable, he did not disclose any other terms of this agreement to Mr Tobin at any time.

329 Mr Iliffe was taken to the paragraph of the 1 March email referring to the allocation of various roles. He said that was something that was discussed '[v]ery briefly'[56] during the 29 February conversation. He denied that he and Mr Tobin discussed their previous experience in sharing these roles. Mr Iliffe said that Logos had not shared these roles or functions before: this evidence was not challenged.

330 Mr Iliffe agreed that he read the paragraph to the effect that upon receipt of confirmation, Mr Tobin would issue all information about the sites and the revised feasibility model. Mr Iliffe acknowledged that, other than his 2 March (4.51pm) email, referred to below, Mr Iliffe did not reply to the 1 March email. Further, he acknowledged that he did not express orally to Mr Tobin any disagreement with anything that was contained in the email. He said he did not think that was required at this point. It was put to Mr Iliffe that in truth he did not reply because he did not disagree with anything stated in the 1 March email. He did not accept this.

331 It was put to Mr Iliffe that, during the 29 February conversation, Mr Tobin said words to the effect that, once they'd reached agreement on the appointment and the commercial terms that would apply to the agreement between Citius and Logos, Mr Tobin would then divulge the identity of the site and provide information about it. Mr Iliffe agreed that they discussed during the 29 February conversation that 'if we could reach an agreement, then [Mr Tobin] would disclose details on the site to move forward. That's correct'.[57] This was in a context where Mr Iliffe agreed that Mr Tobin had not given the exact street address of the site at that time. Mr Iliffe appeared to agree that he understood that Mr Tobin would lose leverage in his discussions with Logos if he disclosed the details of the Marsden Park properties. However, Mr Iliffe agreed that Mr Tobin was trying to achieve a position where 'he had an agreement to discuss moving forward. I understand and appreciate that'.[58]

332 In cross-examination, Mr Iliffe agreed that Mr Tobin said that the figures discussed by Mr Iliffe seemed acceptable to Mr Tobin, but that Mr Tobin wanted to go over the numbers again overnight before sending an email in the morning. Mr Iliffe recalled a discussion where Mr Tobin said that the next steps, once an agreement had been reached as to fees, were for Mr Tobin to disclose the information which he had in respect of the site and then to look to nominate Logos as purchaser under an agreement with the owner of the 21 ha site.

333 It was put to Mr Iliffe that his expectation at the time was that, if the information was provided to him and the opportunity appeared good, then Logos would be nominated by Citius as the purchaser of the 21 ha site. He agreed, stating that the opportunity was potentially an attractive one.

334 Mr Iliffe was taken to the sixth paragraph of the 1 March email referring to the proposal for a separate fee to be paid to Mr Hemingway. Mr Iliffe said he did not recollect having any discussion at that point as he had already agreed a fee with Mr Hemingway by this time.

335 In cross-examination, Mr Iliffe denied there was any discussion during the 29 February conversation as to the reimbursement of costs already incurred by Citius or to be incurred by Citius during the due diligence period.

336 I note at the outset that to a limited extent the parties were in agreement as to the contents of the 29 February conversation. For the most part the parties did not contest that as part of this conversation:

(1) Mr Iliffe disclosed his interest in the opportunity presented by the Marsden Park properties and his interest in working with Citius;

(2) Mr Iliffe informed Mr Tobin of the substance of the joint venture and that the Marsden Park properties might suit the joint venture;

(3) the parties discussed the fee structure that would apply to an agreement between Citius and Logos;

(4) Mr Iliffe identified that the fees proposed in the 26 February letter were not workable as Logos could only share the fees payable to Logos pursuant to the joint venture with ADIA;[59]

(5) as a result, Mr Iliffe said words to the effect that any agreement between Logos and Citius would need to structure fees in accordance with the fees payable to Logos by ADIA under the pre-existing agreement with ADIA;[60]

(6) as to the fees payable under Logos's pre-existing arrangements with ADIA, the parties were in agreement that at least three fees were identified by Mr Iliffe in general terms, being:

(i) an 'acquisition fee' of 0.5%;

(ii) a 'development management fee' being 5% of 'development costs' or 'project costs'; and

(iii) a promote fee or 'incentive fee', being a fee referrable to an internal rate of return payable to Logos under the joint venture which was calculated over a fixed seven-year period;

(7) Mr Tobin and Mr Iliffe discussed the sharing of development and project management roles, but there was no discussion of the roles each would have: the specific allocations would be left for later discussions; and

(8) Mr Tobin said that he wanted to review the fees proposed by Mr Iliffe overnight and would send an email to Mr Iliffe the following morning confirming their discussion.

337 Further, for the most part, the parties did not contest that it was discussed in the 29 February conversation that the next step after agreement was reached as to fees, was that Mr Tobin would disclose to Mr Iliffe further information about the Marsden Park properties, including their location, and, in respect of the Hargreaves Property, would nominate Logos as purchaser under an agreement with Hargreaves. Logos stressed the words 'as to fees'. Citius submitted this emphasis was misplaced.

338 Further, for the most part, the parties did not contest that Mr Tobin said that Citius had access to 'prospective tenants'.[61]

339 However, other key aspects of the conversation were disputed, including:

(1) whether the project management fee of 1.25% was discussed;

(2) whether Mr Tobin said Citius had control of the site;

(3) to what extent the promote or incentive fee was explained by Mr Iliffe; and

(4) whether due diligence fees or reimbursement costs were discussed.

340 Citius maintained that the project management fee was discussed notwithstanding that, in its written closing submissions, it did not dispute that there was no project management fee under the terms of the LALVIM Agreement, with the result that no project management fee was claimed. As a result, I consider it appropriate and necessary to determine whether there was a discussion about the project management fee during the 29 February conversation.

341 At a high level, Citius submitted that Mr Tobin had the best recollection of the 29 February conversation given its importance to him. Citius also submitted that Mr Hemingway's recollection of the 29 February conversation, whilst limited, gave a clear impression that an 'agreement' in respect of Citius's ongoing role as development manager/project manager had been reached in that conversation. By contrast, Logos submitted that Mr Iliffe's evidence should be preferred in light, among other things, of Mr Tobin's credit and his propensity to reconstruct his evidence.

342 At the outset it is appropriate that I say something about the evidence of Mr Hemingway. Mr Hemingway had very limited recollection of the events relevant to this proceeding. At its highest, Mr Hemingway gave evidence of his impression of the 'gist or outcome' of the 29 February conversation: that there was agreement reached in respect of the ongoing role of Citius as development manager and/or project manager. I refer to his evidence at [302] above. In my view, this evidence is in fact conclusionary and inadmissible opinion evidence, contrary to s 76 of the Evidence Act 2008 (Vic).

343 I am conscious that Mr Hemingway gave evidence that the fact that an agreement had been reached was 'something that stuck in his memory', as set out in [303] above. I am also conscious that Mr Hemingway gave evidence that 'Trent had agreed to that...I think Simon's going to follow up with details the next day or something like [62]at'.62 However, it is apparent that his recollection of events on that day was far from clear notwithstanding this evidence. He was unable to call recall the details of this agreement, such as the roles to be performed. As a result, even if I am wrong and his evidence is admissible, I consider it appropriate in all these circumstances not to place any great weight on the evidence of Mr Hemingway.

344 I have concluded that that the 29 February conversation went for between 15 and 30 minutes. It seems unlikely that Mr Iliffe would have had available one or two hours to discuss these matters with Mr Tobin, particularly given the limited information available to Logos about the nature of the Marsden Park opportunity at this time. Consistent with the other documents and evidence relating to meetings with Mr Iliffe, and Mr Iliffe's evidence before me, I have formed the view that Mr Iliffe's meetings are much shorter than one or two hours.

345 Further, I have concluded that the following matters were discussed during the 29 February conversation.

346 First, Mr Iliffe indicated his interest in working with Citius in relation to the Marsden Park opportunity and informed Mr Tobin of the substance of the joint venture and that the Marsden Park properties might suit the joint venture.

347 Second, Mr Iliffe made plain that, in light of the 26 February letter, it was only the fees that Logos got from ADIA that Logos could share with Mr Tobin.

348 Third, when discussing the fees payable to Logos under the ADIA agreement, the conversation between Mr Iliffe and Mr Tobin was to the effect that Logos was prepared to share 50% of these fees with Citius.

349 Fourth, as is evident, there was a dispute between the parties as to the fees in fact discussed in the 29 February conversation. Mr Tobin maintained that Mr Iliffe discussed four fees payable to Logos under the ADIA agreement: an acquisition fee of 0.5%, a development management fee of 5%, a project management fee of 1.25% and an incentive fee. This was consistent with the four fees referred to in the 1 March email. Mr Iliffe gave evidence he only referred to three fees which he said Logos would be prepared to share, namely the acquisition fee of 0.5%, the development management fee of 5% and the 'promote' or Performance Fee.

350 Much of the dispute was premised on the basis that the fees that were the subject of discussion in the 29 February conversation did not 'marry up' with the fees payable to the Logos group under the joint venture agreements. However, in my view, while what was payable in fact under the ADIA agreement is relevant, it is not determinative. The real issue is what Mr Iliffe said to Mr Tobin about the fees payable - based upon Mr Iliffe's understanding (or perhaps misunderstanding) of the fees payable under the ADIA agreement.

351 In this context, I am conscious that only two of the fees which both Mr Tobin and Mr Iliffe said were discussed (the acquisition fee and the incentive fee), relate directly to the fees payable by ADIA to Logos under, or in relation to, the ADIA agreement. However there is no separate 'development management fee' of 5% (which both Mr Tobin and Mr Iliffe said was discussed) or 'project management fee' of 1.25% (which Mr Tobin alone said was discussed). Rather, as set out in section 3.2 above, there is:

(1) an Investment Management Fee for investment management services provided by the Logos Group and determined in accordance with sch 3 of the LALVIM Agreement; and

(2) a Development and Project Management Fee payable under the Pro Forma Agreement contained in sch 6 of the LALVIM Agreement, being an amount equivalent to 5% of the Project Costs (as defined in the Pro Forma Agreement).

352 On balance, I prefer the evidence of Mr Tobin of the fees discussed in 29 February conversation. This is notwithstanding my comments about his credit set out, in particular, in section 2.3 above and the fact that Citius ultimately did not claim the project management fee.

353 First, the substance of the evidence was that the fees were discussed in the context of the 26 February letter (which refers to four fees). Second, Mr Tobin's evidence refers to four fees, the substance of which are for the most part consistent with the 26 February letter. Third, the discussion of four fees is consistent with the terms of the 1 March email (which I will address further below). Fourth, the four fees referred to in the 1 March email were not disputed by Mr Iliffe in the 2 March (4.51pm) email when he had the opportunity to do so (which I will also address further below).

354 I am conscious that there was no separate 'project management fee' and 'development management fee' payable to Logos under the ADIA agreement. Rather, there was a combined Development and Project Management Fee paid under the Pro Forma Agreement. Mr Iliffe did not give evidence that he explained this to Mr Tobin during the 29 February conversation. Rather, Mr Iliffe gave evidence that a 'development management fee' of 5% was discussed. It was not explained in evidence why he used this expression given that one Development and Project Management Fee is payable under the Pro Forma Agreement. I have formed the view that it is most likely that the divergence between the fees payable under the ADIA agreement and the fees discussed in the 29 February conversation has been caused by Mr Iliffe's misunderstanding of the true nature of the fees under those agreements. I refer to my comments at [350] above.

355 I am also conscious that the 1 March email only referred to one agreement being entered into namely a 'joint development management agreement ... by ADIA and LOGOS/Citius'. However, that email also refers to four separate fees. As a result, notwithstanding these matters, in all the circumstances, I prefer the evidence of Mr Tobin as to the fees discussed in the 29 February conversation.

356 As to the discussion relating to the incentive fee, it was not in dispute that the incentive fee was discussed during the 29 February conversation. However, there was dispute as to whether the general basis on which it was to be calculated (i.e. the Performance Fee) was discussed.

357 On the evidence before me, I have concluded that Mr Iliffe did indicate that the Performance Fee under the ADIA agreement was in the order of 17 or 18% of the excess of a target internal rate of return of 10 or 11% in relation to the joint venture. This is notwithstanding that this detail was not included in the 1 March email or the draft Consultancy Agreement sent on 10 March 2016 (the draft CA, which I will address further below).

358 It is significant that, until trial, Logos maintained confidentiality over the calculation of the Performance Fee under the LALVIM Agreement, and that during trial, only the legal advisers for the parties and court officers were allowed access to that calculation. As is evident from section 3.2 above, Mr Tobin's evidence of the general basis upon which the Performance Fee was to be calculated is consistent with sch 5 of the LALVIM Agreement. In these circumstances, it was not explained to me how Mr Tobin could be able to accurately summarise how the Performance Fee was calculated under the LALVIM Agreement, without being informed of the substance of it during the 29 February conversation.

359 In all these circumstances, I am not satisfied, based on the evidence of Mr Tobin alone, that Mr Iliffe did not make mention of the Performance Fee being calculated in respect of the LALV Trust, as opposed to the individual Marsden Park properties in the 29 February conversation. Further, as set out in [653] below, Citius submitted that its calculation of damages for the incentive fee (based upon an apportionment in respect of all of the projects of the LALV Trust) was consistent with the evidence of Mr Tobin and Mr Iliffe of the 29 February conversation: that they would share the fees that Logos was paid by Harina. Thus, I have concluded that, based on the context of the discussion of the Performance Fee (which Logos received from Harina in respect of the whole LALV Trust), it was discussed that Logos would share that part of the Performance Fee in relation to the Marsden Park opportunity.

360 As to the 1 March email, the paragraph in respect of fees relevantly states:

As you've proposed, LOGOS will share the following fees with Citius on an equal basis (50/50). We confirm you've advised us the fees are the subject of the existing agreement between LOGOS and ADIA:

• Acquisition Fee: 0.5% (all figures exclude GST).

• Development Management Fee: 5% of all development costs, excluding land.
• Project Management Fee: 1.25% of development costs.
• Incentive fee/IRR share: 7 year fee structure. (LOGOS to provide more detail of structure and calculation).

361 It is significant that the language of this paragraph is consistent with the general nature of the evidence of Mr Tobin and Mr Iliffe as to the discussion of fees (although they disagreed as to the details of the fees discussed), namely, Mr Iliffe indicated the fees which the Logos group received from ADIA which Logos was prepared to share with Citius in the event that one or both of the Marsden Park properties were acquired. First, I refer to the opening words of the paragraph '[a]s you've proposed, LOGOS will share the following fees with Citius on an equal basis (50/50)'. Second, I refer to the second sentence which confirms the fees, which Mr Iliffe advised Mr Tobin of during the 29 February conversation, were the subject of the existing agreement between Logos and ADIA. That also accords with the general thrust of the evidence of both Mr Tobin and Mr Iliffe as to the context in which fees were discussed in the 29 February conversation.

362 It is also significant that Mr Iliffe, in his response to the 1 March email, did not dispute that any of the fees listed by Mr Tobin in the 1 March email were inaccurate or were not discussed in the 29 February conversation. This is notwithstanding that Mr Iliffe gave evidence that he read the 1 March email including the paragraph setting out the four fees.

363 Fifth, in the context of the roles which Citius could perform (set out in the 26 February letter), and in the context of Logos being prepared to share with Citius 50% of its fees received from the joint venture with ADIA, it was discussed in the 29 February conversation that the development management roles and the project management roles would be shared between Citius and Logos.

364 Sixth and relatedly, as to the allocation of those roles, as set out above, Mr Tobin's evidence was that the only discussion was that the roles would be shared. He gave evidence of his unexpressed understanding that there would be a later discussion through project control group meetings when the various roles and tasks were to be allocated. Of course, this evidence is not relevant to the intention issue or the enforceability issue. By contrast, as set out above, Mr Iliffe gave evidence to the effect that the allocation of roles was something that was discussed very briefly.

365 In light of this evidence, I have formed the view that it is more likely than not that there was a very brief discussion about allocating these roles. However, there is no evidence of the details of this discussion before me, or more relevantly that the allocation of roles was the subject of any agreement in the 29 February conversation. Of course, this was addressed in the 1 March email. I will deal with this further below.

366 For completeness, I am not satisfied on the balance of probabilities that Mr Tobin and Mr Iliffe discussed their past experience in sharing such roles. This is in light of the unchallenged evidence that Logos had not done so.

367 Seventh, there was a discussion to the effect that Mr Tobin said that the fees discussed and the figures put forward to him by Mr Iliffe seemed acceptable, but that Mr Tobin wanted to go over the fees overnight and provide an email response the following day. I generally accept the evidence of Mr Tobin set out in [283] above but note the thrust of his evidence was that he was not able to calculate the incentive fee at the time.

368 Eighth, there was discussion to the effect that once agreement had been reached on the matters raised between them, Mr Tobin said that he would disclose all information he had in respect of the Marsden Park properties. Logos placed emphasis on the fact that Mr Iliffe gave evidence to the effect that, once agreement had been reached as to fees, Mr Tobin said that he would disclose all information he had in respect of the site. This emphasis was disputed by Citius.

369 For my part, I do not accept the emphasis on the words 'as to fees' by Logos. This is for a number of reasons. First, it is unclear to me from the evidence when this discussion took place in the course of the 29 February conversation. It may have been before or as part of the discussion of Mr Iliffe's understanding of the fees payable to Logos under the joint venture agreements. Secondly, the fees to be paid were addressed further in the 1 March email and Mr Iliffe did not expressly refer to 'fees' in his 2 March (4.51pm) response.

370 While Mr Iliffe's subjective understanding is not relevant to the intention issue or the enforceability issue, I have concluded that, by reason of the matters discussed in the 29 February conversation, Mr Iliffe understood that Mr Tobin appeared unwilling to disclose the details of the Marsden Park properties before an agreement had been reached on the matters raised between them in that conversation. More relevantly, I consider that a reasonable person in Mr Iliffe's position, based on the 29 February conversation, would have had such an understanding. In any event, that understanding was made clear by the terms of the 1 March email. I will address this further in section 8.1 below.

371 Ninth, I have formed the view that Mr Tobin informed Mr Iliffe that he had reached an agreement with Hargreaves to buy the Hargreaves Property. I prefer the evidence of Mr Iliffe in this regard. Mr Iliffe's evidence was that, while Mr Tobin had spoken earlier of his negotiations in respect of the Hargreaves Property and the Busways Property, during the 29 February conversation he said that the negotiations were at different stages i.e. that Mr Tobin had reached agreement with the vendor of the Hargreaves Property and he was in negotiations with the vendor of the Adjoining Property. Further, Mr Iliffe's version is more consistent with Mr Tobin's evidence that he reached a 'verbal' agreement by this time, or at the very least, my conclusion that Mr Tobin believed he had a deal with Hargreaves by this time.

372 Tenth, as to the Control Representation, on the evidence before me, I am not satisfied that during the 29 February conversation Mr Tobin made the Control Representation (i.e. that he said that Citius had control of the Marsden Park properties). However, I am satisfied that during the 29 February conversation Mr Tobin said he had control of the Hargreaves Property and that is what Mr Iliffe understood. Relevant to this finding are the matters set out in the previous paragraph.

373 While Mr Iliffe gave general evidence that Mr Tobin said he had 'control of the site' on 29 February 2016, he did not identify what the reference to the 'site' was or what he understood it to mean. As set out in [316] above, on being pressed about this issue, Mr Iliffe gave evidence that Mr Tobin initially said he had control of the Marsden Park properties but 'as time we[63] on'63 Mr Tobin said that he had agreed to buy the 21 ha site (i.e. the Hargreaves Property) and that he was in negotiations with the vendor of the 20 ha site (i.e. the Adjoining Property). Further and relevantly, in response to a question about the need to 'maintain control of the site' in the 2 March (9.22am) email, Mr Iliffe said he had discussed with Mr Tobin that the reference to the control of the site was a reference to the Hargreaves Property only.

374 Eleventh, as to the Tenant Representation, I have concluded that Mr Tobin stated words to the effect that Citius 'had access to prospective tenants' and did not say words to the effect that he had a tenant or tenants for the Marsden Park properties. Rather, he stated words to the effect that he was confident he would be able to secure tenants. This is based on the evidence of Mr Iliffe. This finding is also consistent with my findings in respect of the 26 February conversations set out in sections 6.2.2 and 6.2.4 above.

375 There is one related matter I wish to address. Logos submitted that Mr Iliffe's evidence was to the effect that he only had discussions relating to the sharing of Logos's fees under the ADIA agreement with Citius on the premise that Citius had, or could deliver, both the land and tenants for the Marsden Park properties project. He gave evidence to the effect that otherwise Mr Tobin knew there was 'no point in us discussing fee-sharing'.[64] I am not able to accept that evidence.

376 This is for a number of reasons. First, I have not found that Mr Tobin said he had tenants for the Marsden Park properties at this time (i.e. the Tenant Representation). In fact, in my view, Mr Iliffe's own evidence is inconsistent with the Tenant Representation as pleaded. Second, I am not satisfied that Mr Iliffe, at this time, gave the significance to Citius delivering the land and tenants which he and Logos asserted in this proceeding. Nor am I satisfied that he made that plain to Mr Tobin in late February and/or early March 2016. Most significantly, this was not made plain in the 2 March (4.51pm) email in which Mr Iliffe raised some issues of concern to him arising from the 1 March email, but did not raise the substance of the Development Representations/Conditions. Mr Iliffe did not raise any concerns with Citius in relation to his understanding of any agreement until his email to Mr Tobin dated 13 September 2016, addressed in section 9.4 below. In that email he did not raise the substance or the specifics of the Development Conditions. He wrote only that 'we were lead to believe that the Citius position on the land ... was on a different level to their actual position'.

377 In these circumstances, I am not able to accept that Mr Iliffe only had discussions relating to the sharing of Logos's fees under the ADIA agreement with Citius on the premise that Citius had, or could deliver, both the land and tenants for the Marsden Park properties project. To the extent it is relevant, I have formed the view that Mr Iliffe was keen at this point to pursue the commercial opportunity presented by the Marsden Park properties and to obtain access to the information about them from Citius without reaching the kind of agreement which he, at the very least, suspected Mr Tobin was seeking. This was quite apart from issues about Citius's control of the Marsden Park properties and having tenants for them.

378 In my view, these conclusions are consistent with the conduct of Mr Iliffe and Logos on and after 2 March 2016. However, I am conscious that, in the context of the intention issue and the enforceability issue, the Court must only have regard to the objective manifestation of intention, not the subjective or undisclosed intention of any party, including Logos.

8. DEALINGS BETWEEN CITIUS AND LOGOS IN EARLY MARCH

379 Mr Tobin sent an email to Mr Iliffe on 1 March 2016 (9.47am) (i.e. the 1 March email). It is set out in full in [272] above. Relevantly, the 1 March email contains the following statements:

As agreed, we've reviewed the commercial terms you've proposed which would apply to the joint development management of the project.

We set out below confirmation of those terms discussed and confirm herewith our agreement to them being applied to the joint development management agreement which will be entered into by ADIA and LOGOS/Citius.

...

We've discussed and agreed LOGOS and Citius will determine the most appropriate [al]location and sharing of the various required roles between us, in future discussions.

Also, we need to determine an appropriate, separate fee for Graham Hemingway and Gill Property, for his role in our agreement.

We request you provide immediate confirmation of the above agreement.

Upon receipt of your confirmation, we will issue you will [sic] all information about the site(s), and also issued the revised feasibility model, which will be amended to incorporate the above fees.

We look forward to receiving your confirmation and the prospect of working alongside you and the LOGOS team in the delivery of this exciting project.

380 The terms in which the 1 March email was expressed are important. First, the email refers to the matters 'discussed and agreed' in the 29 February conversation. However, it requested Logos provide 'immediate confirmation of the above agreement' upon receipt of which Citius would issue all information about the site(s) and the revised feasibility model.

381 Second, the 1 March email states that Logos and Citius 'discussed and agreed' to determine the most appropriate allocation and sharing of the various required roles 'in future discussions' i.e. by further agreement. This appears generally consistent with the evidence of Mr Tobin set out in [287] above. While the evidence of Mr Iliffe did address this issue, in any event, that was what Mr Tobin was proposing in the 1 March email.

382 Third, the 1 March email expressly provided that Logos was 'to provide more detail of structure and calculation' of the 'Incentive Fee/IRR share'.

383 Mr Iliffe said he read through this email relatively soon after receiving it. He recalled noting that it referred to a project management fee, but that Logos did not have a project management fee on top of its development management fee, and so this could not be achieved. He said 'but the rest of it in principle made sense to me'.[65]

384 In re-examination, Mr Iliffe was asked why he did not correct the reference in the 1 March email to having discussed a project management fee of 1.25% if he thought that reference was not correct. He said it was too early to get into a negotiation and agreement to share something with Mr Tobin. He said he did not feel the need to do so at this point in time because Logos did not have enough information on the site. He said that Logos was not clear on the control that Mr Tobin had and 'we didn't know any details around the tendency' (which should properly be read as a reference to tenancy).[66] I will deal with my findings in relation to this evidence below when dealing with the 2 March (4.51pm) email.

385 Mr Tobin sent another email to Mr Iliffe on 2 March 2016 (9.22am) (the 2 March (9.22am email)). The email read:

Hi Trent.

In order to maintain our control over the development site, we need to nominate our intended investor to the vendor very quickly.

I'd be grateful if you could respond to the email sent to you yesterday, to enable us to then issue all relevant project information back to you promptly.

To further demonstrate our confidence in the success of the project, we also have a 35,000m2 prelease requirement, we believe would be very well suited to the project, and which we'd like to commence preparations for submission of a joint proposal

Please call or email if you have any queries.

Otherwise, please email your confirmation of agreement to those items detailed in our email, as requested below.

386 Logos relied upon this email to constitute part of the Control Representation and part of the Tenant Representation.

387 In cross-examination, Mr Tobin agreed with the proposition that the statement '[i]n order to maintain our control over the development site' suggested that Citius had control and wanted to maintain that control.

388 When asked if it was true that Citius had control, he replied that '[w]e had control over the negotiations. The definition of control may differ'.[67] Mr Tobin said that in this email he was talking about control over the negotiations. He also said that Citius had reached a 'verbal agreement' with Hargreaves on the terms and the price in the preceding days.[68]

389 When asked whether the counterparty to the verbal agreement with Hargreaves was Citius he replied '[t]hat's right. That's what proposed'.[69] When it was suggested to him that that was just nonsense in the absence of knowing the parties to the agreement, he disagreed. When asked whether Hargreaves did not mind who the counterparty would be and whether this was going to be up to Citius, he replied by suggesting that was Citius's intention. When stopped from giving evidence about his intention, Mr Tobin said Hargreaves would have been under the impression that the negotiations they were conducting with Citius were in relation to M&G. In this context he gave evidence that:

I had reached agreement with Hargreaves on the price and the terms. We were moving to formalise a heads of agreement. The expectation previous to that was that that agreement would be between Hargreaves and M&G. Clearly, that wasn't going to happen. Hargreaves was still agreed to the price and the terms. I was intending to nominate LOGOS as the purchaser and complete the heads of agreement. Or, sorry, see the heads of agreement completed between LOGOS and Hargreaves.[70]

390 As noted in section 6.5 above, there was no documentary evidence produced as of 2 March 2016 which established that Hargreaves had agreed to enter into a heads of agreement with Citius, or that the due diligence period between them had been agreed. Further, Mr Tobin's evidence is inconsistent with:

(1) the evidence of Mr Wall that Hargreaves was unwilling to enter into an agreement with Citius and that he told Mr Tobin so in the context of the Citius HOA sent to Hargreaves on 3 March 2016;[71]

(2) Mr Tobin's evidence that it would be of critical importance to Hargreaves as to any investor's ability to pay for the Hargreaves Property, as set out in [154] above; and

(3) the proposed amendments by Hargreaves to the Citius HOA set out below.

391 It suffices to say that, in all these circumstances, I do not accept Mr Tobin's evidence that he had reached verbal agreement with Hargreaves at the time of sending the 2 March (9.22am) email.

392 In giving evidence about the 2 March (9.22am) email, Mr Tobin said that he had spoken to Mr Iliffe about the need to nominate Logos as purchaser. However, he did not say when this conversation took place. I will deal with this evidence further below.

393 Mr Iliffe recalled receiving the 2 March (9.22am) email and reading it. Mr Iliffe agreed in cross-examination that he understood that, until Mr Iliffe responded, Mr Tobin was not going to provide the relevant information in respect of the identity of the site (i.e. the Marsden Park properties).

394 Mr Iliffe said he noticed at the time that the 2 March (9.22am) email referred to what needed to be done in order to 'maintain our [Citius's] control'. Mr Iliffe said he understood that if Citius was to maintain control, Logos needed to be nominated to the vendors very quickly. He said that was the first time he had that information. He understood at this point that the 'site' was the Hargreaves Property.

395 Mr Iliffe also said he noticed that in the 2 March (9.22am) email Mr Tobin was reinforcing that he had 'tenant interests'[72] in the site and that was part of the proposal that had been discussed with Mr Tobin. As to the reference to the 'prelease' requirement, Mr Iliffe gave evidence in cross-examination that this was the first time that Mr Tobin disclosed the 'sizing of tenants'[73] to demonstrate his control and ability to bring tenants to the site. Mr Iliffe understood that the email was not referring to a binding agreement that existed with tenants in the event that Logos was prepared to proceed.

396 On the evidence before me, I am not satisfied that the 2 March (9.22am) email conveyed the Control Representation (i.e. that Citius represented that it had control of the Marsden Park properties). This is in light of the evidence of Mr Iliffe that he understood that the reference to the 'development site' in the 2 March (9.22am) email was a reference to the Hargreaves Property only. This is in light of their discussions in the 29 February conversation set out at [371]-[373]. As result, I am satisfied that the 2 March email (9.22am) email conveyed that Citius had control of the Hargreaves Property. That is what Mr Iliffe understood and what a reasonable person in his position would have understood.

397 Further, in my view, the 2 March (9.22am) email did not convey the Tenant Representation. This is because I do not consider the words relating to a 35,000m2 pre-lease requirement in that email conveyed to a reasonable reader that Citius then had tenants for the Marsden Park properties. Rather, it refers to a pre-lease requirement and that Citius would like to commence preparations for submission of a joint proposal for such a requirement. Such a submission of a joint proposal is, in my view, inconsistent with Citius then having secure tenants for the Marsden Park properties.

398 Mr Tobin received an email from Mr Iliffe in reply on 2 March 2016 (4.51pm) (i.e. the 2 March (4.51pm) email). The 2 March (4.51pm) email read:

Sorry for the delay. In principle we are ok, subject to clarity of resources and allocations.

399 It is necessary to consider the words used in some detail. This is in light of the following paragraphs of the 1 March email:

We request you provide immediate confirmation of the above agreement.

Upon receipt of your confirmation, we will issue you will [sic] all information about the site(s), and also issue the revised feasibility model, which will be amended to incorporate the above fees.

400 This is also in light of the terms of the 2 March (9.22am) email that stated '[o]therwise, please email your confirmation of agreement to those items detailed in our email, as requested below'.

401 First, in the 2 March (4.51pm) email Mr Iliffe stated that '[i]n principle we are ok' with the matters set out in the 1 March email. Second, the email did not end there. That statement was subject to a qualification, namely 'subject to clarity of resources and allocations' (i.e. the Logos qualification).

402 In examination-in-chief, Mr Iliffe said he used the expression '[i]n principle' because there were certain 'metrics'[74] which Logos and Citius had to achieve to get through the due diligence process. As to Logos, he said Logos needed to agree to deal with the vendors, to get investment committee approval to share fees with Mr Tobin, and also to get approval from its investor to buy the site. Mr Iliffe said that, in order for Logos to get approval from its investor (ADIA), Mr Tobin was to show that he had control of the site and that he could deliver tenants to be able to share Logos's fees with Citius.

403 As to the approvals, Mr Iliffe said first Logos would need to get approval from an internal Logos committee (i.e. the Logos investment committee) to spend money on the DD process. He said the members of the internal Logos committee included himself and Mr Marsh. He did not give evidence that he told Mr Tobin that such approval was required from the internal Logos committee. He then said that it was also necessary to get approval to proceed with any capital investment from the Venture Committee of the joint venture. Such approval was required both to spend money on due diligence and to enter into the contract of sale to purchase. He did not give evidence that he told Mr Tobin those two approvals were required. Mr Iliffe had no role in obtaining the approval of ADIA or its representatives on the committee.

404 Mr Iliffe was asked what led him to include the Logos qualification relating to 'resources and allocations'. He replied this was because Citius's business was Melbourne-based and Mr Tobin was proposing to be part of a transaction in Sydney. Mr Iliffe said he had concerns over Mr Tobin's ability to resource the project adequately and to work out how people based in Melbourne were going to spend enough time on the project in Sydney. I will refer further to the issue of resourcing in section 10.2 below.

405 In examination-in-chief, Mr Iliffe gave evidence that, if Mr Tobin had not given any information about tenants or control, Mr Tobin would have been acting the same way as Mr Hemingway was acting, and Logos would have paid him an acquisition fee only. He said that, as Mr Tobin had agreed to buy a property from the vendor and that he had control of the tenants, he was acting 'like LOGOS, and that he was able to de-risk the site for us and we were prepared to share fees with him... That's a very different proposal to that of a broker introducing a site to us'.[75] On balance, I do not accept this evidence. This is for the most part for the reasons set out in [375]-[377] above.

406 As to the meaning of the word 'de-risk', Mr Iliffe said a big part of 'de-risking' for Logos was having a tenant for the site and, on many occasions, Mr Tobin told Mr Iliffe that he had a 'strong demand from customers to come to this location'.[76] Further, Mr Iliffe stated that, if Logos were able to buy the site and had a precommitment, that took out a development risk. He said in those circumstances, Logos would be interested in sharing the fees with Mr Tobin. In this context, Mr Iliffe said he would have expected the de-risking process (and relevantly, pre-commitment from tenants) to take place in the due diligence process.

407 It was put to Mr Tobin that the 2 March (4.51pm) email was substantially similar to the 22 January M&G email. He did not agree. He said that he was happy to provide the details of the Marsden Park properties to M&G because the circumstances and the relationship with M&G were very different.

408 It is appropriate that I state at this time that I do not accept Mr Iliffe's evidence that, in some way, it was too early to correct the inaccuracies (relied upon at trial) which he believed were contained in the 1 March email. This is particularly so in light of the terms of the 1 March email. In my view, the 1 March email objectively called out for a response which addressed, at least, the factual matters which Mr Iliffe disputed or considered to be inaccurate. This is in light of my findings in respect of the 29 February conversation in [370], my comments in [375]-[377] above and the 2 March (9.22am) email. The response in fact sent was the 2 March (4.51pm) email which raised some, but not all, issues which Mr Iliffe disputed at trial.

409 On 2 March 2016 (5.20pm) (the 2 March (5.20pm) email), Mr Tobin emailed Mr Iliffe stating:

Thanks for the reply.

I know you're busy.

When convenient, I'll ask you to clarify/confirm your qualification regarding resources and allocations.

As detailed yesterday, and subject to your qualification below, I'll shortly issue full details of the site and the project.

In the email to follow, you'll see I'd like to formally nominate LOGOS/ADIA as the Purchaser, at the earliest opportunity.

Please review the information which will follow, and call me to discuss when you're ready.

410 There are two things to note in particular about the 2 March (5.20pm) email. First, Mr Tobin was asking Mr Iliffe '[w]hen convenient ... to clarify/confirm your qualification regarding resources and allocations'. Second, Mr Tobin noted that 'subject to your qualification below, I'll shortly issue full details of the site and the project'. The 2 March (5.20pm) email was part of an email chain and responded to the 2 March (4.51pm) email, which was immediately below this email in the chain. As a result, I have concluded that the reference to the 'qualification below' was a reference to the Logos qualification in the 2 March (4.51pm) email.

411 In cross-examination, it was put to Mr Tobin that he understood Mr Iliffe's response to be a qualified response. He replied that it was a 'specific response'.[77] Mr Tobin gave evidence that he took the 2 March (4.51pm) email 'as agreement to the terms - the commercial terms and the fees... [but that he] wasn't sure about [Mr Iliffe's] reference to resources and allocations'.[78] He did not acknowledge that he understood it as a qualification. He said he did not interpret it as being an issue to be resolved. He said he did not know what Mr Iliffe meant by it. However, he acknowledged that the question of the qualification was not resolved at the time he sent the full details of the Marsden Park properties and the project to Mr Iliffe.

412 I do not accept the evidence of Mr Tobin that he did not 'interpret [the qualification regarding resources and allocations] as being an issue to be resolved'.[79] It clearly was. This is acknowledged by the express terms of Mr Tobin's reply (i.e. the 2 March (5.20pm) email). Regardless, a reasonable person in the position of Mr Tobin would have read the Logos qualification in that way.

413 On 2 March 2016 (5.35pm) (the 2 March (5.35pm) email), Mr Tobin wrote a further email to Mr Iliffe attaching a letter dated 2 March 2016 (the 2 March letter) which disclosed the address of the Hargreaves Property and the Adjoining Property. This email also attached other documents relating to the Hargreaves Property and the Adjoining Property. I will deal with these attachments further below.

Thanks for the confirmation you emailed earlier this evening.

As stated in my earlier reply, I've attached herewith a detailed covering letter nominating the site, which covers everything.

The correspondence also provides detailed information regarding the project and the status of various project items.

Time is of the essence, and we don't have full control over the program just yet.

You'll see I've requested you respond with [sic] promptly with the return of the attached draft letter to Citius, confirming your intension [sic] to proceed with the purchase, subject to DD. I've drafted the letter for your review and completion, following your review of the other attached material.

Please call me on mobile if you need to clarify anything in the interim.

415 Before addressing the terms of the 2 March (5.35pm) email and the 2 March letter, I note that Mr Tobin did not obtain any clarification or confirmation of the Logos qualification before sending the address of, and a summary of the feasibility study on, the Marsden Park properties.

416 Prior to the written closing submissions of Citius, Logos relied upon the statement '[t]ime is of the essence, and we don't have full control over the program just yet' in this email to constitute part of the Control Representation. However, in light of Citius's written closing submissions (to the effect that the alleged reframed agreement was concluded by the 2 March (4.51pm) email), Logos relied upon this statement in support of the submission that it was more likely that the Control Representation had been made before this time.

417 Mr Tobin agreed that this statement in the 2 March (5.35pm) email suggested he had a measure of control. Mr Tobin said this statement was made because of his 'verbal agreement' with Hargreaves. It was put to Mr Tobin that Hargreaves had not agreed to a heads of agreement with Citius. He gave evidence that '[w]e'd exchanged drafts of the heads of agreement' contemplating M&G as the purchaser.[80] He said that this justified him in suggesting Citius had a measure of control in place. He said '[t]he status were the incomplete heads of agreement'.[81] As to any control over the Busways Property, Mr Tobin agreed that he had no agreement with Busways and thus had far less control over that site. He finally conceded he had no control over that site.

418 On the evidence before me, I am unable to conclude whether the word 'program' in this email related to both of the Marsden Park properties. This is in the context of my findings concerning the discussion of control in the 29 February conversation and Mr Iliffe's understanding of the 2 March (9.22am) email. However, I am satisfied that the statement at least conveyed that Citius had a degree of control over the Hargreaves Property. This is in light of the statement in the attached 2 March letter which refers to reaching agreement in relation to the Hargreaves Property.

419 I will now address the terms of the 2 March letter which was attached to the 2 March (5.35pm) email. The 2 March letter set out the address of the Hargreaves Property and the Adjoining Property and estimates based on the feasibility model. Relevantly, the 2 March letter noted that the net value/sales revenue of the completed Marsden Park properties project was in the order of $424 million and the total development costs of that project (including all fees and contingencies) was in the order of $297 million.

420 The 2 March letter set out details of the vendors of each property, all zoning details, and development approval details. In relation to the Hargreaves Property, it specified that the vendor was Hargreaves. It stated, '[w]e have reached agreement with the vendor of [the Hargreaves Property], and have commenced negotiations with the vendor of [the Adjoining Property]'. I note in passing that there was no evidence at this time that Citius was negotiating with Busways, the owner of the Adjoining Property.

421 Further, the 2 March letter stated that Citius was 'aware of an immediate 35,000 m2 prelease requirement for a well recognised Australian Company, which we believe will be very well suited to the site. The tenant has already nominated Marsden Park as their preferred location. We would obviously like to move quickly to nominate our site and submit a proposal to the tenant as soon as possible'. This was a follow up to the reference to the pre-lease requirement in the 2 March (9.22am) email. It was far from a statement that Citius had secured this company as a tenant.

422 The 2 March letter set out the steps to be implemented as follows:

• Citius nominates LOGOS/ADIA (entity to be confirmed) as the Purchaser for [the Hargreaves Property].
• The agreed 7 week Due Diligence period commences immediately.
• Citius/LOGOS coordinate DD reports.
• LOGOS coordinates ADIA final approvals.
• Citius/LOGOS coordinate 35,000 m2 prelease submission.
• Citius/LOGOS continue to negotiate purchase of [the Adjoining Property].

423 As to the first point, Mr Tobin agreed that it conveyed that Citius would be able to purchase the Hargreaves Property.

424 As to the reference in the second point to an 'agreed 7 week Due Diligence period', there was no objective evidence that this seven week due diligence period was agreed with Hargreaves.

425 As to the third point relating to coordination of DD reports, Mr Tobin disagreed that this did not make clear which of Citius and Logos would be coordinating DD reports. He said that, '[a]s discussed with Trent [Iliffe]', it had been agreed that these due diligence items and reports would be completed 'jointly'.[82] No further evidence of any such discussions was provided.

426 As to the fourth point relating to Logos coordinating approvals by ADIA, Mr Tobin agreed that there 'would need to be final sign-off from ADIA' concerning this transaction.[83] However, he was unsure whether ADIA was required to sign off on the role that Citius was going to play. This was because he was not sure whether Citius was to be engaged by Logos or 'the investor'.[84] He said that he knew there needed to be a sign off or approval process within Logos. Further, he agreed that the approval of the agreement, and of the project itself, would be subject to approval 'further up the chain'.[85]

427 As to the fifth point relating to coordinating the pre-lease submission, Mr Tobin acknowledged that it had not been resolved whether it would be a joint coordination, or whether Citius or Logos would individually coordinate the pre-lease submission.

428 As to the sixth point relating to the continuation of the negotiation to purchase the Adjoining Property, Mr Tobin gave evidence that it was discussed that Citius would continue in 'those discussions'.[86] However, as set out above, there was no objective evidence before me as to the nature and extent of any such discussions at this time.

8.5.3 Attachments to the 2 March (5.35pm) email

429 The 2 March (5.35pm) email contained a number of attachments (some of which were confidential to Citius) including, the project feasibility model, an aerial photograph identifying the properties, evidence of recent lease and land sales, plans and elevation of neighbouring developments, a copy of the DA for the Hargreaves Property, and a masterplan for the Marsden Park properties.

430 Mr Iliffe gave evidence that he skimmed the 2 March (5.35pm) email and the 2 March letter at the time he received them. He said he did not read the full details of the attachments but would have reviewed them. He said he forwarded the information to Mr Timso in order to assess the site for Logos.

431 The 2 March letter also referred to a draft letter to be completed by Logos and/or ADIA and returned to Citius, namely a letter of intention which Citius would forward to the 'site vendor, as part of our nomination of LOGOS/ADIA as the site purchaser' (the draft Logos letter of intention). However the draft Logos letter of intention was not attached. It was sent approximately 20 minutes later by email dated 2 March 2016 (5.56pm). It stated among other things that:

(1) Logos acted as the asset manager of ADIA and provided details of the ADIA wealth fund;

(2) Logos confirmed its intention to purchase the Hargreaves Property for $42,960,000 (plus GST if applicable) on the condition that Logos would be granted a seven-week exclusive period to complete its due diligence with settlement 21 days after execution and exchange of contract of sale documentation;

(3) Logos acknowledged the legal structure and formatting of the contract of sale document proposed by the 'vendor' (which was not defined), incorporating the vendor's proposed special purpose vehicle company and share purchase, and agreed to act in good faith to assist the efficient completion of all sale documentation in accordance with this structure subject to its legal advice;

(4) Logos understood the letter would be passed on to the vendor with the intention of a Logos entity to be nominated as the purchaser to 'the agreement between Citius and the vendor'; and

(5) it did not create a legally binding agreement.

432 Mr Iliffe said he read the draft Logos letter of intention at the time he received it. In cross-examination, Mr Iliffe agreed that it identified the terms upon which the potential acquisition of the Hargreaves Property could occur, including price and the conditions with respect to due diligence. He said he would have skimmed through the purchaser's acknowledgements as it was 'reasonably standard' in respect of a heads of agreement for an acquisition of this type of land.[87]

433 Mr Tobin gave evidence that the draft Logos letter of intention was drafted to be provided to Hargreaves to give Hargreaves certainty and confidence about the preparedness of Logos to enter into the exclusive due diligence period. He said this was in the context of having advised Hargreaves, via Mr Wall, that M&G were no longer participating in the process. He said it was important for Citius commercially to be able to demonstrate to Hargreaves Logos's intention and capacity to perform.

434 On 2 March 2016 (9.53pm) Mr Iliffe sent a copy of the 2 March (5.35pm) email and the 2 March letter and attachments to Mr Mead, Mr Timso and Mr Singh, copied to Mr Marsh, to 'have a review of this opportunity tomorrow and form a view for when I get in mid afternoon'. Mr Singh gave evidence-in-chief that he received this email and read the attachments. This was his first involvement in the Marsden Park properties.

8.6 Further communications on 2 and 3 March 2016

435 Mr Iliffe responded to the 2 March (5.35pm) email by email dated 2 March 2016 (9.52pm) in which he stated that he would review Mr Tobin's email 'tomorrow and get back to [Mr Tobin] asap'.

436 On 3 March 2016 (5.20pm), Mr Tobin sent an email to Mr Iliffe stating that Blackmores was looking to lease a new industrial site (the 3 March (5.20pm) email). This was obviously a reference to the 35,000 m2 pre-lease requirement in the 2 March (9.22am) email and the 2 March letter. Mr Iliffe responded on the same day at 7.11pm offering his services to assist in securing Blackmores as a tenant.

437 The 3 March (5.20pm) email attached a chain of emails in relation to Blackmores's interest in leasing the Hargreaves Property. It included an email from Mr Coltman to Mr Wall. Mr Iliffe acknowledged this was the first time he became aware of the involvement of Mr Wall. He said he knew Mr Wall from previous professional relations. He acknowledged that he did not read the attached emails.

438 The email chain did not indicate that Blackmores had agreed to be tenants of the Marsden Park properties. Mr Iliffe was taken to the part of the email chain in which Blackmores advised they were 'working with a few developers who have tabled potential solutions for us'. Mr Iliffe agreed he did not express any concern about the status of tenants. He said that if the issue of tenants was resolved during the due diligence period, then it would help Logos establish a fair agreement with Mr Tobin. He also said in re-examination that, if the tenancy issue was resolved in the DD process, it would mean that Logos would have reduced holding costs because Logos would not have to build a building without tenants in place. He said that would help Logos de-risk the project and obtain financing for the project with banks. I accept this evidence.

8.7 The Logos letter of intention and the Hargreaves HOA

439 On 3 March 2016 (8.16am), Mr Tobin emailed Mr Iliffe noting:

(1) Mr Tobin had not given Mr Iliffe much time to review the proposal more thoroughly;

(2) the extent of the work done by Citius was considerable and there was additional information regarding the site to be made available;

(3) Citius had 'DEXUS breathing down our neck. I know they have met with the vendor of Lots 23 & 24, and are poised to submit an offer';

(4) Mr Tobin wanted to submit the draft Logos letter of intention to the vendor as soon as possible, ideally that day; and

(5) that Mr Tobin and Mr Iliffe had previously swapped messages and requested Mr Iliffe call Mr Tobin 'as you've [Mr Iliffe] suggested'.

440 Mr Iliffe said he was surprised that there was a competitor for the Hargreaves Property. However, he did not reply expressing his surprise. He said this was because he did not have any detail around Mr Tobin's control of the site so he needed more information before he could make that call.

441 On 3 March 2016 (12.35pm), Mr Tobin emailed Mr Iliffe an amended feasibility model for the Marsden Park properties. The email refers to a discussion 'earlier today'. Although the evidence was not entirely clear, it appears that there was a conversation between Mr Tobin and Mr Iliffe on the morning of 3 March 2016. Mr Tobin recalled having a discussion with Mr Iliffe on the morning of 3 March 2016. He said that Mr Iliffe had reviewed a lot of the information that Citius had sent to him, particularly the feasibility model, and Mr Iliffe wanted to make some amendments to the assumptions that Citius had made in the feasibility model. As a result, Mr Tobin made a number of adjustments to the feasibility model. Mr Iliffe recalled giving Mr Tobin feedback with respect to rents and incentives in the context of the feasibility model.

442 Mr Iliffe acknowledged receipt by email dated 3 March 2016 (12.51pm) saying 'Thanks Simon'. He did not say anything regarding Mr Tobin not having control, not having tenants or not having accurately represented his position. Once again he said it was way too early to make that judgement call.

443 On 3 March 2016 (5.44pm), Mr Singh sent an email to Mr Tobin, copied to Mr Iliffe, requesting a Word version of the draft Logos letter of intention. On 3 March 2016 (7.10pm), Mr Singh emailed Mr Tobin, copied to Mr Iliffe, marked up amendments to the draft Logos letter of intention together with a clean copy signed on behalf of Logos (the Logos letter of intention). The email refers to a conversation between Mr Singh and Mr Tobin. Mr Tobin said this was his first dealing with Mr Singh.

444 The Logos letter of intention included the following amendments:

(1) the reference to 'confirm our intension [sic] to purchase the [Hargreaves Property], subject to those conditions set out below' was changed to 'confirm our strong interest in acquiring the [Hargreaves Property], subject to those indicative conditions set out below';

(2) changes to the description of Logos and its relationship with ADIA; and

(3) changing the seven week DD period to eight weeks.

445 However, the Logos letter of intention still contained the statement drafted by Citius that the Logos letter of intention would be 'passed on to the vendor, with the intension [sic] of our entity to be nominated as the purchaser to the agreement between Citius and the vendor'.

446 Mr Tobin gave evidence that the changes were not unanticipated and were straightforward. He gave evidence that he recalled a conversation with Mr Singh in which Mr Singh advised that Logos had completed the amendments but that he [Mr Tobin] was happy with the final version sent. Mr Tobin was unable to recall any discussions with Mr Iliffe about this time.

447 Mr Iliffe gave evidence that on 3 March 2016, he gave instructions to Mr Singh to send the Logos letter of intention to Mr Tobin. As noted above, Mr Singh sent it on to Mr Tobin at 7.10pm.

448 A few hours later, at 10.09pm on 3 March 2016, Mr Tobin sent an email to Mr Wall referring to a conversation 'this evening' and confirmed a number of matters including, relevantly, the M&G decision (the 3 March (10.09pm) email). That is, Mr Tobin advised Mr Wall of the M&G decision which he had been aware of since 24 February 2016. The 3 March (10.09pm) email also attached the Logos letter of intention and another copy of the Citius HOA executed by Citius on 26 February 2016.

449 I will first deal with the Citius HOA which was not shown to Logos. As noted above, the Citius HOA described the vendor as Hargreaves and the purchaser as Citius (and/or Nominee). The Citius HOA referred to an exclusive DD period of eight weeks, with settlement 21 days after the execution and exchange of contract of sale documentation. The Citius HOA also provided that it did not create a legally binding agreement. The Citius HOA further contained acknowledgements to the effect that:

(1) the vendor (namely Hargreaves) proposed a legal structure incorporating a special purpose vehicle and a share sale purchase; and

(2) Citius would act in good faith to assist in the efficient completion of all sale documentation in accordance with this structure.

450 As noted above, Mr Wall also gave evidence that Hargreaves was unwilling to enter into an agreement with Citius (as opposed to the investor/potential purchaser). It was put to Mr Tobin that there was never any suggestion from Mr Hargreaves that he was prepared to enter into a contract agreement with Citius. Mr Tobin's answer was evasive. He replied that Hargreaves did a deal with Citius that was ultimately completed by Logos. He maintained that Hargreaves would deal with Citius but with a different purchaser that was nominated by Citius as was always intended. He said that Hargreaves dealt with Citius pursuant to the 'verbal agreement'.[88] I do not accept this evidence.

Further to our discussions earlier this evening, we can now confirm the following.

Following further discussions with M&G over the past week, due to reasons un-associated with the site, M&G has advised they will not be proceeding with further negotiations.

In anticipation of this position over the past week, Citius has held discussions with another preferred partner, Logos Australia group Pty Ltd ('Logos') to acquire and jointly develop the site. Citius and Logos have a long association and we are sure you are familiar with the Group.

Logos has tonight confirmed their intension [sic] to acquire the site with Citius, on the terms agreed between Citius and [Hargreaves].

Attached to this email is formal confirmation of the intension [sic] to purchase the site by Logos.

Please note, this confirmation of our intension [sic] to acquire the site is subject to the vendor, [Hargreaves], executing the attached Heads of Agreement document, and returning it to Citius, by email, by 4 pm tomorrow, Friday 4th March 2016.

452 It was put to Mr Tobin that the 3 March (10.09pm) email was deliberately not copied to Logos. He disagreed. As noted above, the 3 March (10:09pm) email to Mr Wall referred to a conversation 'this evening' and confirmed a number of matters including that M&G had advised that it would not proceed further with negotiations. In my view, it seems likely this was the first time Mr Tobin told Mr Wall of the M&G decision and that Logos was willing to proceed, namely after he received Mr Iliffe's indication in the 2 March (4.51pm) email and after receipt of the Logos letter of intention. In my view, it seems likely that Mr Tobin did not tell Mr Wall about the M&G decision until he knew he had another investor/potential purchaser willing to proceed.

453 As to the second paragraph, it was put to Mr Tobin that this paragraph was not correct as Mr Tobin had known from 24 February 2016 that M&G would not proceed. Mr Tobin's response was revealing. He did not agree it was false. He replied '[a]h well, it was the past week... It was within about a week'.[89] Mr Tobin acknowledged that he had most likely emailed Mr Wall since he had had notice that M&G were not proceeding. No such email was in evidence before me. I found his answers unconvincing. I refer to my comments in the previous paragraph.

454 As to the third paragraph, he was asked whether it was true that he had had a long association with Logos. Mr Tobin replied that Citius had had commercial dealings with Logos over the previous three or four years. He said his intention was to convey that it was a good relationship. I found this answer inconsistent with the words he chose in the 3 March (10.09pm) email.

455 As to the fourth paragraph, he was taken to the statement that Logos confirmed their intention to acquire the site with Citius on the terms agreed between Citius and Hargreaves. He maintained that there was a verbal agreement between Citius and Hargreaves. As set out above, I do not accept that was so.

456 As to the sixth paragraph, he was taken to the statement that the confirmation of intention to acquire the site 'is subject to the vendor, [Hargreaves], executing the attached Heads of Agreement document, and returning it to Citius, by email, by 4 pm tomorrow, Friday 4th March 2016'. It was suggested there was no basis to say that Logos's intention was subject to, or conditional upon, Hargreaves first executing a heads of agreement document, let alone by 4.00pm on 4 March 2016.

457 Mr Tobin disagreed. He said he discussed the completion of the heads of agreement with Mr Iliffe. He said he told Mr Iliffe that Citius had a verbal agreement and needed to execute the heads of agreement to nominate Logos as the purchaser. When it was put to Mr Tobin he was making this up, he denied it. He said that he had discussed with Mr Iliffe the need to complete the heads of agreement with Hargreaves to secure the Hargreaves Property for the exclusive due diligence period.

458 Mr Iliffe said that around this time (i.e. 4 March 2016) he had a telephone discussion with Mr Wall. Mr Iliffe had known Mr Wall for some time. Mr Wall said he was acting on behalf of Hargreaves who was the option holder of the Hargreaves Property. Mr Iliffe gave evidence that Mr Wall said words to the effect that Hargreaves wanted to enter into an agreement with Logos which was stepping in to acquire the Hargreaves Property (i.e. and not Citius). Mr Iliffe said he knew that Hargreaves would not enter into any agreement with Citius because Citius was not the buyer.

459 Mr Iliffe gave evidence that Mr Wall said Mr Tobin did not have control over the Hargreaves Property. He said Mr Wall said he had been trying to sell this site for some time. He gave evidence that Mr Wall said Mr Tobin had been trying to find another buyer for the site. Mr Wall said that Logos should deal directly with Mr Wall and the vendors.

460 Mr Iliffe responded that, as he had been introduced to the site by Mr Tobin, he would continue to keep Mr Tobin 'in the loop'.[90] Mr Iliffe said this was because Logos was going to 'respect' Mr Tobin introducing Logos to the transaction.[91] Mr Iliffe said he also tried to get information on Mr Wall's understanding of the market and whether there would be customer demand.

461 Mr Iliffe said that from this point onwards, negotiations to purchase the Hargreaves Property were undertaken directly with Mr Wall. Mr Tobin and Citius had no involvement in those negotiations.

462 On 4 March 2016 at 1.00pm,[92] Mr Wall sent an email to Mr Iliffe, copied to Mr Tobin, which attached an amended version of the Citius HOA (which I will refer to as the Hargreaves HOA). The principal amendment was to change the purchaser from Citius to Logos. The result was that the heads of agreement would be between Hargreaves and Logos. The other change reduced the due diligence period from eight weeks to six weeks.

463 Further, the version of the email in the court book also attached an amended version of the Logos letter of intention amending the due diligence period to six weeks from eight weeks. This amendment appears to be in the same handwriting as the changes to the Hargreaves HOA. As a result, I have assumed the amended version of the Logos letter of intention attached to the email was also changed by Hargreaves. The covering email stated:

Further to your discussion with Simon, please find attached the amended Heads of Agreement executed by Hargreaves on terms which they agree to enter into formal due diligence on the subject site with LOGOS Australia Group Pty Ltd.

Subject to your acceptance, could you please sign the amendments and execute on behalf of LOGOS Australia Group Pty Ltd and return to me at your earliest convenience.

464 Mr Tobin said that Mr Wall contacted him on the morning of 4 March 2016 to say that, given Logos was the ultimate intended purchaser, Mr Hargreaves wanted the heads of agreement to be entered into by Logos, not Citius. Mr Tobin gave evidence that Mr Wall said that Hargreaves had agreed to sign the heads of agreement with Logos and was satisfied with the contents of the Logos letter of intention. Mr Tobin said he had no concerns about that.

465 Mr Tobin said that he then (on 4 March 2016) called Mr Iliffe to explain the situation. He said Mr Iliffe was happy that the Hargreaves HOA would be with Logos and not Citius. Mr Tobin said he was in transit that day and had no access to a computer. As a result, he asked Mr Wall to facilitate the signature directly with Mr Iliffe. Mr Iliffe gave evidence that at about this time he had a conversation with Mr Tobin about the heads of agreement. However, I am unsure if this conversation with Mr Tobin took place before or after Mr Iliffe's conversation with Mr Wall. In my view, nothing turns on this.

466 Mr Iliffe said he read the Hargreaves HOA. He agreed that at a high level it contained terms, such as price and key conditions, identical to those in the Logos letter of intention. However, he said that he signed it without knowing the timeframes that would be likely. He agreed that by signing it he obtained the benefit of a non-binding heads of agreement.

467 By email dated 4 March 2016 (3.49pm) Mr Singh then sent the executed Hargreaves HOA and the amended version of the Logos letter of intention to Mr Tobin, copied to Mr Iliffe and Mr Marsh.

468 Mr Tobin gave evidence of a number of conversations with Mr Iliffe in the period of early March 2016. To the extent that it is, or may be relevant, I will address that evidence now.

469 First, in giving evidence about the 2 March (9.22am) email, Mr Tobin said he had spoken to Mr Iliffe about the need to nominate Logos as the purchaser. In evidence-in-chief, he said that he told Mr Iliffe of the heads of agreement with Hargreaves and the need to nominate Logos as the intended purchaser on or around 2 or 3 March 2016. He subsequently gave evidence in cross-examination that he had not told Mr Iliffe about Mr Wall, or anything about the heads of agreement at this time. However, he said that they had spoken about the need to formalise the verbal agreement that he had with the vendor via a heads of agreement. Mr Tobin subsequently accepted he was wrong and that he may have informed Mr Iliffe about the heads of agreement in a discussion 'within a day or two' of 2 March 2016.[93]

470 Second, Mr Tobin said that he raised the issue of Citius nominating a Logos/ADIA entity as the purchaser of the Hargreaves Property in a discussion with Mr Iliffe.

471 Third, Mr Tobin also gave evidence that the reason for the draft Logos letter of intention was discussed with Mr Iliffe on 2 or 3 March 2016. He gave evidence that he spoke with Mr Iliffe 'at some stage over this period', to confirm that Citius needed to be in a position to nominate and identify Logos as the purchaser. [94] Mr Tobin also said this was discussed with Mr Iliffe on 2 or 3 March 2016 and Mr Iliffe agreed to it. Mr Tobin said he discussed with Mr Iliffe the importance of being able to demonstrate Logos's intention and capacity to perform. Further, Mr Tobin said he informed Mr Iliffe that Hargreaves had another party 'sniffing around'.[95]

472 Further, in the context of the 3 March 2016 (10.09pm) email to Mr Wall, Mr Tobin said he discussed with Mr Iliffe (within an unidentified conversation with Mr Iliffe) the completion of the heads of agreement with Hargreaves to secure the Hargreaves Property for the due diligence period.

473 Mr Iliffe acknowledged two or three conversations with Mr Tobin during this period. First, he acknowledged a conversation relating to proposed amendments to the feasibility study, which were reflected in an email from Mr Tobin to Mr Iliffe dated 3 March 2016 (12.35pm) (at [441] above). Second, Mr Iliffe acknowledged a telephone conversation with Mr Tobin after he had a conversation with Mr Wall on the morning of 4 March 2016. Third, in the call referred to in the previous sentence, or on a separate call on 4 March 2016, Mr Iliffe told Mr Tobin that the Hargreaves HOA and/or the Logos letter of intention was acceptable.

474 In all these circumstances, to the extent that they are relevant, I have concluded that there were at least two conversations between Mr Tobin and Mr Iliffe in early March 2016, namely on 3 March 2016 (relating to the feasibility study) and on 4 March 2016 (relating to the need for Logos to sign the Hargreaves HOA). I have also concluded that it is more likely than not that there was another conversation on 2 or 3 March 2016 about the need to sign the Logos letter of intention in light of the Citius HOA. I am unable to make any other findings in relation to the conversations between Mr Tobin and Mr Iliffe in this period.

475 On 10 March 2016 (1.04pm), Mr Tobin sent to Mr Iliffe a draft Consultancy Agreement (i.e. the draft CA) by email. The email stated:

As forecast yesterday, I've attached a draft agreement for your consideration.

It's been prepared in accordance with our discussions and emails regarding the structure of the project and the commercial terms previously agreed.

Please review and respond with any comments, at your convenience.

I've issued it to you in 'word' format to enable any amendments or additions.

476 The draft CA (between Logos, called the 'Principal', and Citius, called the 'Consultant') is over 16 pages with some schedules incomplete. Mr Tobin gave evidence that this was his standard form consultancy agreement.

477 As is evident from its size, it addressed many matters that had not been the subject of the 1 March email or the discussion during the 29 February conversation. Section 2 is headed 'CONSULTANT'S ROLE' comprising five principal clauses. Section 3 is headed 'PRINCIPAL'S ROLE' comprising four principal clauses. Section 4 is headed 'LIABILITIES AND INDEMNITIES' comprising two principal clauses. Section 5 is headed 'FEES AND PAYMENT' comprising three principal clauses. Section 6 is headed 'COMMENCEMENT, TERMINATION & NOVATION OF THE SERVICES' comprising five principal clauses. Section 7 is headed 'GENERAL' comprising 10 principal clauses. There are four schedules.

478 The recitals recorded, among other things, that Logos as Principal:

(1) has agreed to purchase the development site;

(2) has agreed that 'the project shall be managed and promoted as a Joint Development Project';

(3) has agreed to engage the Consultant as the joint Development and Project Manager; and

(4) requires the professional expertise of the Consultant to carry out the Services.

479 The draft CA then provided that the Consultant shall carry out and complete the Services in accordance with the terms and conditions of the draft CA and perform and observe its other obligations under that agreement. In return, the Principal shall pay to the Consultant the fees due under the draft CA and will perform and observe all of its obligations as specified in that agreement.

480 The Services to be provided by Citius as the Consultant were defined as all the work and services to be performed by the Consultant as expressed in, necessarily implied from, or contemplated by the work and services described in the draft CA, including any attachments. The draft CA does not contain a term that the provision of the joint services should be at the direction or election of Logos. However, cl 1.1 provides that '[t]he Consultant agrees to provide the Services set out in Schedule A' and, to the extent that the Services are to be divided into stages, 'the Consultant shall not commence the Services for each subsequent stage without the prior written approval of the Principal' and that the Principal shall not be obliged to pay for any Services without that prior written approval.

481 Schedule A is headed 'THE SCOPE OF SERVICES'. It provided for three stages of services:

(1) stage 1 related to due diligence and acquisition;

(2) stage 2 related to development and project management of the site, land servicing and earthworks; and

(3) stage 3 related to the development and project management of developed buildings.

482 For the most part, stages 2 and 3 were based upon the description of the development management services in the 26 February letter. Stage 1 was not addressed in that letter or in the 1 March email.

483 The fees to be paid to the Consultant were set out in sch D. Mr Tobin gave evidence that this section was drafted by him. It provided as follows:

SCHEDULE D - THE FEE

The fees shall be set as a combination of fixed fees and a percentage of the nominated costs (as below). The following fees apply to each stage of the Scope of Works as detailed below, excluding GST. If a stage is not completed at the time of billing then the value of the works completed in that period shall be invoiced and due for payment.

Acquisition Fee (0.25% of purchase price - $42.96m)

Development & Project Management of site civil servicing and benching etc.

Dev. Man. fee (2.5% of development costs, excluding land purchase, - estimated at $25,507,878).

Dev. Man. fee (2.5% of development costs, excluding land purchase & Stage 2 DM fees).

PM fee (0.625% of construction costs, excluding Stage 2 PM fees).

Incentive/Profit Fee. 50% of agreed Logos/ADIA IRR, 7 year fee (further detail to be provided to Citius by Logos)

484 The payment of fees was set out in cl 5 of the draft CA. Clause 5.1(a) provided that the Principal undertakes to pay the Consultant the fees set out in sch D and any other amounts payable under cl 3.2 in respect of changes to the Services. Clause 5.1(b) provides that invoices for the Services provided shall be submitted not more than once each month and shall be accompanied by information sufficient to allow the Principal to verify each invoice to its satisfaction. Clause 5.1(c) provides that the Principal may reasonably request further information to support the invoice and the Consultant shall provide this information within seven days of the written request. Clause 5.1(d) provides that the Principal shall pay all invoices within seven days of the receipt of the requested information or 14 days of the date of the invoice, whichever is the later.

485 Provisions relating to the termination of the agreement by the Principal were set out in cl 6.3. Clause 6.3(d) provided that the Principal may at any time terminate the agreement upon 28 days' notice to the Consultant. Clause 6.5(b) provided that upon termination in accordance with cl 6.3(d), the Consultant was entitled to be reimbursed by the Principal any amount due to it under an invoice submitted, any reasonable amount due in respect of any work performed by it under the draft CA not covered by an invoice claim and the balance of any unpaid fees set out in sch D.

486 It was put to Mr Tobin that the fees set out in sch D were payable across four stages and that was not something that had been discussed or resolved including in the 29 February conversation. Mr Tobin replied that, in the context of the draft CA, 'the fees were linked to the roles which had been the subject of discussion and agreement on 29 February'.[96] He denied that this had not been discussed at this time. He said that they certainly discussed those fees as represented in the table. He said that the fees were linked to the stages set out in the schedule to the draft CA. Further, he gave evidence that in respect of paragraph 2 of the draft CA, under '[i]t is agreed', his understanding was that he had to work to get the fees: 'the consideration was for the work'.[97]

487 It was put to Mr Tobin in cross-examination that there was no discussion about reimbursement of the costs. He disagreed. He said they had discussions about reimbursements but not the actual amount at that time (i.e. in the 29 February conversation). However, he agreed he had not given evidence about this earlier when asked about the 29 February conversation. He said they weren't a considerable part of the overall development agreement. Mr Tobin maintained the fee had been discussed but not the quantum.

488 It was also put to Mr Tobin that there was no discussion of a separate due diligence management fee. He said they discussed reimbursement and Citius's costs associated with the due diligence. He said the bulk of the 29 February conversation and the focus was on the development management agreement. Mr Tobin said that they discussed costs and due diligence fees in the 29 February conversation 'very briefly...without reference to the specific fees'.[98] Based upon this evidence alone, I am unable to accept that there was any discussion about the reimbursement of costs and of a separate due diligence management fee in the 29 February conversation.

489 It was put to Mr Tobin that up until 29 February there had been no discussion with any Logos party about the timing of payments. He appeared to agree with this proposition, replying '[n]o, not specifically'.[99] However, he said they discussed the apportionment of the development management and project management roles and that they 'are almost always addressed on at the basis of monthly payments'.[100] This answer appeared an attempt to argue his case.

490 Mr Tobin was taken to cl 6.3(d) of the draft CA. He said that this was the 'standard' pro forma term. He was then taken to cl 6.5(b) which provided that even upon such termination, the balance of unpaid fees set out in sch D would become payable. He agreed that the purpose of this clause was for all unpaid fees to become payable on termination for convenience. He agreed that there had been no discussion about such a clause up to and including the 29 February conversation.

491 Mr Iliffe said he read the covering email but did not read the detail of the draft CA at the time. He said this was because, from his perspective, it was not relevant. He said that Logos needed to work out 'who was performing what services under the acquisition of this property, and it had become apparent at that time that the promises on the tenants weren't being fulfilled'.[101] He said that from his perspective he still was not able to establish the role that Mr Tobin was going to play and fulfil as part of this transaction. However, he said he had a sense of what role Citius would play by July 2016.

492 Mr Iliffe replied by email on 10 March (4.27pm). He did not reply consistent with the evidence he gave, which is recorded in the previous paragraph. Rather, he simply stated that he would review the draft CA document and get back to Mr Tobin.

493 Indeed, in cross-examination, Mr Iliffe agreed that at no time after 10 March 2016 until September 2016 did he get back to Mr Tobin with respect to the draft CA. Mr Iliffe said there was no point. However, he agreed that he did not inform Mr Tobin that he did not consider there was an agreement, or that any agreement reached was based on his understanding that Mr Tobin had control of the site and had tenants for the site.

9. SUBSEQUENT DEALINGS BETWEEN CITIUS AND LOGOS

494 In written closing submissions, Citius did not rely upon any conduct after 4 March 2016, save for a limited reference to the 15 June 2016 invoice referred to below. Logos did. While many documents relating to events after this time were tendered and were the subject of evidence, few were relied upon. For efficiency, I will refer to the factual matters relied upon by Logos and then set out any other relevant evidence.

495 Logos relied upon the draft CA and the inconsistencies and uncertainties arising from it. I refer to my comments in section 8.8 above.

496 Logos then relied upon the fact that in late March and early April 2016, issues arose as to whether the proposed purchase structure favoured by Hargreaves (the purchase of shares in its special purpose vehicle) was appropriate given that the purchase would be made by the joint venture (i.e. the proposed structure issue). Mr Tobin accepted this issue had the effect of stalling the DD process.

497 Mr Singh gave evidence that purchasing the Hargreaves Property via the company established by Hargreaves (MP3) was less favourable to Logos and the joint venture than purchasing land because there was more risk involved. This is because Logos's practice was to create a specific special purpose vehicle for the relevant fund which would then acquire the relevant real estate. He said this structure is cleaner and more tax efficient and also assists in debt financing. By contrast, he said that, if the proposed structure was to buy shares in a company which owned, or was to acquire real property, it would be necessary for Logos to undertake a due diligence on the company itself and to familiarise itself with the various assets and liabilities of the company and its constituent documents. As a result, there were negotiations in relation to the proposed structure issue for the most part between Hargreaves, Logos, and their respective advisors. I accept Mr Singh's evidence.

498 Logos submitted that proposed purchase structure had not been previously raised by Mr Tobin. I do not find it necessary to make any finding in this regard. What is clear is that there was much time spent between Logos and Hargreaves in resolving this issue. Ultimately, it was resolved by one of the companies associated with the joint venture receiving, in substance, an assignment of the right of MP3 under the option agreement with EJ Copper. The purchase was completed on this basis in July 2016.

499 As noted above, Mr Iliffe said that around mid-April 2016, he became unresponsive to Mr Tobin's emails, including those relating to finalising the draft CA. However, it appears that at this time Mr Tobin was liaising closely with Mr Singh and was content to do so. On 15 April 2016 (9.59am), Mr Tobin emailed Mr Singh stating:

Trent has asked me (us!) to finalise the Logos/Citius agreement (please see email below).

Given the primary focus on closing out the purchase transaction over the next few days, the Logos/Citius agreement can take a secondary priority.

Please let me know if you'd like to meet late next week in Sydney.

We'll be talking soon about other matters in the interim anyway.

500 On 15 April 2016 (9.52am) Mr Tobin emailed Mr Iliffe advising that he would work 'it out with [Mr Singh]'. In early May 2016, Mr Tobin made a number of attempts to arrange a meeting with Mr Iliffe. By email dated 9 May 2016 (3.09pm) Mr Iliffe requested that Mr Tobin contact Mr Mead or Mr Singh.

501 Logos relied upon an email dated 10 May 2016 (11.35am) from Mr Tobin to Mr Singh. That email states:

Further to earlier discussion and email today, I confirm the fees payable to Citius under the agreed commercial terms of the Development Agreement are payable upon the entering of the Assignment Deed and the payment of the Assignment Fee.

The agreed fees payable to Citius are included in the document emailed to Trent on the 10th March, which is attached herewith.

The fees detailed in the agreement (Schedule D) have been previously agreed between the parties, but the final document still needs to be completed formally, by both of us.

The fees payable are;

Acquisition/Transaction Fee: $107,400 (all figures exclude GST).

Reimbursement of Costs: $32,000

Due Diligence Management: $12,000.

Please let me know if you require an invoice from us for these amounts, and, if so, details of the Entity to be invoiced.

Please contact me if you have any query [sic].

502 Mr Singh recalled receiving this email. He had a conversation with Mr Tobin within days of receiving this email. He said the substance of the call was to tell Mr Tobin that Logos's focus was on completing the acquisition of the Hargreaves Property and then to deal with the draft CA and his claim for fees when the purchase was completed. Mr Singh said that Mr Tobin replied, in substance, that he was largely okay with this approach, on the proviso that the payments in his email would be made and 'we [Logos] would seek to conclude the agreement that he was seeking'.[102] Mr Singh said that he did not respond to these comments because there was a 'broad agreement' that these issues would be dealt with later.[103]

503 Mr Tobin did not recall a conversation with Mr Singh at this time or to such effect. He said that this would have been a significant departure from the agreement and he would have remembered such a significant discussion. I prefer the evidence of Mr Singh and his evidence of this conversation. As I said earlier, I found Mr Singh to be a credible and reliable witness. Further, my finding is more consistent with the fact that (the usually persistent) Mr Tobin did not actively pursue the finalisation of the draft CA, or any other terms of the alleged agreement, until after the joint venture acquired the Hargreaves Property.

504 An email exchange occurred on 6 June 2016 relating to the payment of fees to Citius. On 6 June 2016 (5.29pm) Mr Iliffe wrote to Mr Singh asking '[d]o we have fees in for agent/Tobin and a PM fee for Tobin?'. Mr Singh replied '[y]ep is he bugging you for an agreement?' and that he did not know who the agent was. Mr Iliffe replied that there was a fee of '0.5% shared with him and Graham Norris'. It was acknowledged that the reference to 'Graham Norris' should be a reference to Mr Hemingway.

505 Mr Mead sent an email dated 15 June 2016 (11.42am) to Mr Singh and Mr Marsh, copied to Mr Iliffe and Ms Chara Seow of Logos. In that email, Mr Mead asked 'what has been agreed with Citius??'. Mr Singh immediately replied:

No formal agreement has been documented.

Trent considered that they would be paid a sourcing (25bps) and DD fee ($30k) and then would retain them as project managers.

9.2 Work performed and invoices issued by Citius prior to the purchase

506 Logos noted that it was 'common ground' that between March and 4 July 2016, Mr Tobin and Mr Rushton (an employee of Citius) provided some due diligence services to Logos. Mr Tobin said that he personally instructed Mr Rushton to work with him and prepare a list of suitable consultants to complete the various due diligence investigations. Mr Tobin gave evidence that he together with Mr Rushton interviewed consultants and reviewed the fee proposal for those various consultants. He said that he and Mr Rushton undertook some investigations at the local council and met with the Logos development team regarding some of this site-specific investigations.

507 On 15 June 2016, Mr Rushton sent, relevantly, two tax invoices from Citius to Logos. First, he sent tax invoice number 163, issued by Citius, for a total of $166,540 (including $15,140 GST). The invoice was expressed to be '[i]n accordance with our agreed fees and services' and claimed:

(1) reimbursement of costs to date ($32,000);

(2) due diligence management ($12,000); and

(3) acquisition fee ($107,400).

508 Second, he sent an invoice issued by Mr Hemingway (via the G & S Hemingway Family Trust) for 'Marsden Park Acquisition Consulting Fees' of $107,400, the same as the acquisition fee claimed by Citius. Logos paid all these fees.

509 Mr Iliffe gave evidence that there was no formal agreement that Citius would assist Logos with the due diligence process but that Citius did so on an informal basis. Mr Iliffe said he was aware that Citius recommended and coordinated consultants that provided input into the due diligence process.

510 On 4 July 2016 the 'Perpetual Corporate Trust Limited as trustee for LALV Marsden Park Trust' (the LALV Marsden Park Trustee) entered into a procurement deed with MP3 under which it was nominated as the new call option holder and exercised the option to purchase the Hargreaves Property. The Hargreaves Property was acquired from EJ Cooper in late July 2016.

511 Following the acquisition of the Hargreaves Property, Mr Iliffe and others within Logos discussed Citius's role going forwards. Logos submitted that it was decided that Logos would offer Citius a project management role with a fixed fee for each stage of the project and/or construction.

512 Mr Iliffe agreed that at this time, and during the diligence process, Logos had not entered into any binding arrangements with any prospective tenants in relation to the warehouses to be constructed on the Hargreaves Property. He accepted that, as a result, the transaction had not been 'de-risked' but that it was sufficiently attractive to Logos for them to proceed at that time.

513 On 17 August 2016 (9.12am), Mr Tobin sent an email to Mr Singh attaching Citius's invoice to Logos for 'Development Management services'. The invoice was expressed to relate to 'Development Management Services to 15th August 2016' and was for $34,400 plus GST, totalling $37,840. The invoice was expressed to be payable within 14 days. No evidence was led by the Citius as to how that amount was calculated.

514 Mr Singh sent the email and invoice to Mr Iliffe, copied to Mr Marsh, on 17 August 2016 (9.55am) asking:

Have you agreed anything with him? After meeting him last month he said he would get hold of you to agree a form of engagement.

I have only allowed $120k per annum in LALVs budget as agreed a few weeks ago.

Nothing agreed. PM work on a % value of works undertaken. $120,000 is more like it. What has he done so far?

516 On 18 August 2016 (11.59am), Mr Tobin sent an email to Mr Iliffe stating, among other things, the need 'to finalise the Logos/ Citius our [sic] formal Agreement for Marsden Park'. He requested Mr Iliffe let him know when it was convenient to discuss these matters.

517 Mr Iliffe said that as a result, he requested a draft project management agreement be prepared. On 9 September 2016 (10.35am), Mr Tobin sent an email to Mr Iliffe, copied to Mr Singh. That email relevantly provided:

The project has started well, with our recommendations regarding the appointment of Consultants and Engineers being approved by Andrew and Sean. Those consultants have been issued with Logos Services Agreements and we are in the process of arranging the [ex]ecution of those documents now.

...

We are yet however, to complete our Development & Project Management Agreement and Sean has suggested you may be seeking to vary the terms previously agreed between us. Whilst we are prepared to discuss a potential restructure of those terms, should there be good reason to do so, in the interest of fairness, we don't believe there should be [s]ubstantial difference to the original total sums agreed.

In response to the original Citius Fee proposal, you proposed, in late February, a structure of fees which are to be shared between Logos and Citius. We accepted your proposal and we both swapped emails of confirmation.

Those terms formed the commercial terms of the draft Agreement issued to you in early March. Following that agreement, the subject property was ultimately purchased by Logos at a lower price and on better settlement terms, than was originally agreed, so there is already a better Logos outcome achieved than anticipated. Subsequent interest in the site has also proven to be strong and the project looks like reaching, if not surpassing, all targeted outcomes.

Given the above and the amount of time now passed, we think it is more than reasonable to now complete our agreement formally.

We remain open to any fair re-structure, if required, but would like to each [sic] agreement on the outcome within the next week.

We're enjoying working with you and your team. We also believe we have much to contribute to the Marsden Park project and to the Logos/Citius collaboration.

We also have other projects, 'off-market', which we believe would be well sought after by Logos, and are happy to introduce to you more formally at the appropriate time.

Please confirm if we can meet in Sydney, with Trent, sometime early next week, to finalise our agreement.

518 Mr Singh replied at 12.06pm acknowledging that he had promised a copy of a 'PMA' earlier that week but that it was still to be drafted by the legal department. On 13 September 2016 (6.40pm), Mr Iliffe sent a reply email. In that email, Mr Iliffe apologised for being 'hard to get'. The email continued:

From the deal perspective, rightly or wrongly, we were lead to believe that the Citius position on the land in Marsden Park was on a different level to their actual position. As a result, we have had a difficult time in Justifying the payments to date, let alone the ongoing role for the Project management. However, we have been able to commit to this PM role as we have shown so far.

We can discuss this in more detail next week.

519 This was the very first time that any such issue about the 'Citius position on the land' had been raised by Mr Iliffe.

520 On 14 September 2016 (10.11am), Mr Tobin sent an email to Mr Iliffe in reply. He rejected the comments made in Mr Iliffe's 13 September 2016 (6.40pm) email and sought payment of the 16 August 2016 invoice. The email relevantly stated:

In relation to your comments regarding the deal, I'm sorry but I can't accept them at all.

This is the very first time you have raised anything along these lines and it is simply not at all accurate.

Despite your previous undertakings and our repeated requests, we are yet to receive anything in response from Logos regarding the completion of the agreement documentation.

We have not received payment for our invoice 164, which was issued and due for payment by the end of August. We are also due to issue our invoice for September this week. In good faith, we will hold off issuing our next invoice until we can meet and resolve these issues, assuming this can be done quickly. Correspondingly, we request however, Logos pay our August invoice without further delay.

521 There were no further discussions between Mr Tobin and Mr Iliffe after this time. Mr Iliffe said he requested Mr Mead to work with Mr Tobin in finalising an agreement to engage Citius as project manager.

522 On 29 September 2016, Mr Mead sent a draft Project Management Agreement (the draft PMA) to Citius. The draft PMA provided for the LALV Marsden Park Trustee (as Principal) to engage Citius as Project Manager to perform project management services. Clause 2.1 provided for the performance of the Services which was defined to mean 'the totality of those services, requirements, obligations, tasks and activities which the Project Manager is required to perform in accordance with the Contract and that are described or set out in the Contract Documents'. Relevantly, the Services were defined in sch 2 of the draft PMA entitled 'Brief'. It suffices to say that the description of those services in the draft PMA was very different from the scope of services in the draft CA.

523 On 3 October 2016, Mr Tobin wrote an email to Mr Mead, copied to Mr Marsh and Ms Grace Zangari of Logos, requesting a version of the 'draft DMA' in Word format and stating that Mr Iliffe had advised Mr Tobin 'he's seeking to restructure the previously agreed terms of the DMA [sic]. We're open to any fair restructure, but would obviously like to understand what he's proposing'. A Word version was provided on 4 October 2016.

524 On 10 October 2016, Mr Tobin replied, stating that '[t]here are a number of significant commercial terms incomplete within the document schedule that will be subject of much focus'. Mr Tobin noted that he remained open to any fair restructuring of the original agreement but was yet to see what Logos proposed. He wrote that '[a]ssuming we can finalise the commercial terms amicably, the balance of the document should fall into place quite quickly'.

525 Mr Tobin's email enclosed an amended version of the draft PMA. Most relevantly, the proposed amendments altered the description of the Brief in sch 2 to mirror the language of stages 2 and 3 of the draft CA provided on 10 March 2016. Further, the proposed amendments, among other things, had the effect of expanding the circumstances in which the Principal was required to pay on termination the entire amount of the fees payable on completion.

526 On 11 October 2016 (6.38pm), Mr Mead sent an internal email to Mr Iliffe, copied to Mr Singh and Mr Marsh stating that:

This obviously doesn't work and Citius has a completely different understanding of the commercial terms and scope for their role? Can you suggest how we move forward with this?

527 On 26 October 2016 (12.03pm), Mr Mead emailed Mr Tobin, copied to Mr Singh and Ms Zangari, requesting a telephone call that afternoon to discuss Mr Tobin's amendments to the draft PMA. Mr Tobin replied that he was unavailable but requested a meeting two days later. In late October and early November, several scheduled telephone conferences were cancelled.

528 Citius continued to do some work during this period. Logos acknowledged that between July and October 2016 Citius provided services including liaising with consultants, assisting to coordinate one project control group meeting, organising security arrangements and ground maintenance of the Hargreaves Property.

529 On 10 November 2016 (1.23pm) Mr Tobin sent an email to Mr Iliffe, copied to Mr Singh and Mr Mead, as follows:

I write in relation to the Consultancy Agreement and our unpaid fees.

Since introducing the project to Logos and you entering into the Consultancy Agreement with us, Citius has performed the work and issued invoices in accordance with the Consultancy Agreement.

As has been previously discussed, I have also held back issuing monthly invoices in accordance with clause 5.1 of the Consultancy Agreement for September and October due to your request to renegotiate the Consultancy Agreement but that does not appear to be going anywhere. The November invoice is also due to be issued.

In the interim, we are continuing to provide services to Logos under the Consultancy Agreement and we are reasonably entitled to be paid. The fact that a new agreement has not been negotiated does not justify not paying us.

Citius remains ready, willing and able to perform its obligations under the Consultancy Agreement and it is continuing to provide those services. Accordingly, it is imperative that we resolve the payment situation without any further delay or the need to escalate the matter.

I look forward to your earliest response.

530 It goes without saying that the terms of the draft CA had never been agreed. Mr Singh sent an email to Mr Iliffe in response on 15 November 2016 (9.19am), as follows:

Assume you haven't spoken to Simon regarding this? Andrew and I have tried to schedule calls with him over the past few weeks but is [sic] hard to pin down.

If you would like me to respond via email with our final position, please let me know.

531 Mr Iliffe responded to Mr Singh on 15 November 2016 (10.09am), asking '[w]hat is he asking for, have we not told him the deal?'. Mr Iliffe gave evidence that 'the deal' was the fact that Logos would pay Mr Tobin an acquisition fee and he would have an ongoing limited project management fee.

532 On 1 December 2016, Citius's solicitors sent a letter to Logos. It demanded payment of the 16 August 2016 invoice and foreshadowed further invoices totalling $79,710 plus GST. The letter asserted that these invoices were issued pursuant to cl 5.1 of the 'Consultancy Agreement entered into between our client and Logos in about March 2016'. The letter stated that if Logos's justification for not paying the invoices was because the draft CA had not been signed, Citius would issue legal proceedings seeking a declaration that the draft CA was binding on the parties. The letter foreshadowed alternative relief for Citius in equity based upon a promissory estoppel arising out of Logos's inducement of Citius to provide services to Logos on the basis that the parties had entered into the draft CA. The letter also foreshadowed alternative relief for misleading and deceptive conduct under the ACL, and a quantum meruit claim.

533 On 2 December 2016, Citius issued invoice number 174 to Logos for $87,681, being $79,710 plus GST. This was expressed to relate to 'Development Management Services' of $26,570 (excluding GST) as at each of 15 September, 15 October and 15 November 2016. No evidence was led by the Citius as to how these amounts were calculated.

534 On 12 December 2016 (2.52pm), Mr Mead sent an email to Mr Rushton, copied to Mr Tobin, Mr Singh and Ms Zangari, instructing Citius 'to cease all work on the Marsden Park Project as you have issued a letter of dispute regarding the scope of your engagement'.

535 On 19 December 2016, Citius issued invoice number 179 to Logos for $26,570 (excluding GST). The invoice was expressed to relate to 'Development Management Services to 15th December 2016'. No evidence was led by Citius as to how that amount was calculated. I note that Citius did not pursue at trial its claim for the unpaid invoices issued in August and December 2016.

536 On 23 March 2017, Logos's solicitors wrote a response to the 1 December 2016 letter, denying any liability to Citius for the invoices issued from 16 August 2016. It noted that the draft CA had never been finalised. On 10 April 2017, the solicitors for Citius wrote to Logos asserting that, by its conduct, Logos had repudiated the agreement subsequently alleged in the ASOC (i.e. the ASOC agreement) and that Citius had accepted that repudiation. Since that time, Logos has disputed any liability to Citius, including on the basis that no concluded agreement of the kind alleged was ever reached.

537 Before I address the issues for determination it is appropriate that I set out some other evidence and some general findings.

10.1 Development management and project management agreements

538 As to development management and project management agreements, Mr Incoll gave evidence that, based on his experience in entering into and reviewing such agreements during his career, they are usually in writing and executed.

539 Mr Incoll gave evidence as to the key commercial elements or key commercial terms usually included in development management agreements. In summary, such terms in development management agreements usually include:

(1) the scope of works to be undertaken and the deliverables to be provided;

(2) details of the limits of authority and decision making constraints on the development manager's actions and directions;

(3) the identification of the fee to be paid, how it was to be calculated (generally a percentage of development value excluding land, estimated lump sum or otherwise), the mechanism for payment (likely monthly fixed amounts or based on achievement of prescribed milestones) and any entitlement/limitations to disbursements;

(4) the circumstances in which the service provider is entitled to fee variations;

(5) the circumstances in which the agreement may be terminated and how the fees are to be adjusted and finalised arising from any termination;

(6) the key resources to be provided by the service provider and the constraints around changing those resources; and

(7) details of the ownership of documents prepared by or on behalf of the development manager.

540 In addition, Mr Incoll gave evidence that the role of development manager would normally be reimbursed as a lump sum fee paid over monthly payments for an agreed period. He said there would be a variation mechanism for fee increases due to changes in the scope of works or unforeseen circumstances that required additional development management work. He said that, where the development manager could potentially provide additional value, by way of identifying and securing a site or a tenant otherwise not known to the developer, then a success fee payable by the developer may be negotiated and included in the development management agreement.

541 As to the key commercial elements or key commercial terms usually included in project management agreements, Mr Incoll gave evidence that such agreements usually include:

(1) the identification of the scope of works and deliverables to be provided by the project management service and inputs required from the development manager;

(2) details of the limits of authority and decision-making constraints on the project manager's actions and directions;

(3) the identification of the fee to be paid, how it was to be calculated (generally a percentage of design and construction value but otherwise an estimated lump sum fee based on estimated duration of the service and resources required, or otherwise), the mechanism for payment (likely monthly fixed amounts or based on achievement of prescribed milestones), and any entitlement/limitations to disbursements;

(4) the identification of the key resources to be provided by the project manager and the constraints around changing those resources;

(5) the identification of the circumstances in which the agreement may be terminated and how the project management fees are to be adjusted and finalised arising from termination; and

(6) the details of the ownership of documents prepared by or on behalf of the project manager.

542 In addition, Mr Incoll gave evidence that the role of project manager would normally be reimbursed as a lump sum fee paid over monthly payments (often unequal to reflect the changes in resource needs over the various stages of the project) for an agreed duration. He said there would be a variation mechanism for fee increases due to changes in the scope of works or unforeseen circumstances that required additional project management work. He said that where the project manager could potentially provide additional value, such as the practical completion of construction works achieved by a key date, then a success fee payable by the developer may be negotiated and included in the project management agreement.

543 There was evidence before me of the need to establish the capability of the entity seeking to perform a project management role or a development management role to in fact perform such roles. By way of example, as set out in section 4.2, on 19 January 2016, M&G asked Citius to provide a capability statement in respect of its offer to perform the development management and project management roles. Citius did so.

544 Indeed, Mr Tobin gave evidence that he was not surprised to receive such a request as it is an 'ordinary feature' of such transactions to demonstrate to the investor that Citius had the capacity to perform a development management role, particularly if the parties were not known to each other.[104] Mr Tobin also agreed that he would not expect anybody to bind themselves to a development management agreement until that person was satisfied about the other's ability to operate as development manager.

545 Logos raised issues about Citius's ability to perform project management or development management roles including because Citius was based, and most of its work was undertaken, in Victoria. Mr Iliffe discussed his concerns about these issues prior to 2 March 2016 when Mr Tobin was talking about where Citius's people were based. Mr Iliffe's 'concerns' related to Citius's ability to resource the project adequately and to work out how people based in Melbourne were going to spend enough time on the project in Sydney. I accept that evidence. Further, I consider that these concerns were raised most likely in conversations on 26 or 29 February 2016.

546 Mr Iliffe also gave evidence that Citius's location in Melbourne was significant from a development management perspective, in particular around tenant relationships and the ability to help deliver the construction and development of the site. He said it was unlikely that Citius would have relationships with local councils in Sydney or with brokers and/or tenants in Sydney.

547 Mr Tobin gave evidence, in the context of the 26 February letter, that he knew that an investor/purchaser would be interested to understand Citius's capability to perform these roles (in particular relating to liaising with the investor and state and local government entities) but disputed that this was an issue because Citius was Melbourne based.

548 However, he agreed that his experience in Sydney was fairly limited. Indeed, he only gave evidence of involvement in one project in Sydney. Further, he agreed that he did not have relationships with state or local entities in Sydney. On the evidence before me, the primary people within Citius who could undertake these roles were Mr Tobin and Mr Rushton (both located in Melbourne). I am conscious that Mr Tobin gave general evidence that at this time there was also a woman called Lynn Wilson who worked for Citius, that his wife Jenny Tobin worked part-time for Citius and that Citius had three other sub-consultants.

549 In this context, Mr Tobin agreed that Citius had not provided any capability statement to Logos or ADIA at this point but was keen to give evidence that Logos did not request a capability statement from Citius at any time.

550 I accept the evidence of Mr Iliffe that he had raised justifiable concerns on and prior to 2 March 2016 about Citius's ability to resource the project adequately and to work out how people based in Melbourne were going to spend enough time on the project in Sydney (including liaising with the investor and with state and local government entities and overseeing the construction and development of the site). This is consistent with the Logos qualification in the 2 March (4.51pm) email that Logos was in principle 'ok, subject to clarity of resources...'.

551 As to the issue of approvals, I have concluded that what is of relevance is the knowledge of Mr Tobin, or more relevantly, a reasonable person in his position, of the approvals required within the LALV Trust and/or Logos in late February and early March 2016. That knowledge would be based upon the knowledge and experience of Mr Tobin and what he was informed by Mr Iliffe, either in discussion or in writing.

552 Although Mr Tobin's evidence was at times unclear and/or inconsistent, I have concluded that Mr Tobin was not aware that approval was required within the LALV Trust prior to entering into the alleged reframed agreement. Of course, I accept that Mr Tobin was aware that approval was required within the LALV Trust to purchase one or both of the Marsden Park properties, and that such approval would have been required at the conclusion of the due diligence process. It is evident that the decision to purchase would involve consideration of the negotiations in late February and early March 2016 between Citius and Logos, as evidenced by the relevant contractual communications, including as to the roles Citius may perform and the fees payable. That is to say, any role that Citius would or might perform, and the costs associated with performing any such role, were factors which would be taken into account by the LALV Trust at that time in order to determine whether to purchase one, or both, of the Marsden Park properties. Further, at that time, Logos and ADIA would have a better idea of the likelihood of securing tenants.

553 Further, I am not satisfied that Mr Tobin was aware that any approval was required from Logos to enter into the alleged reframed agreement. This is notwithstanding his evidence to the effect that he knew there needed to be a sign off or approval process within Logos. In my view, the substance of his evidence was to the effect that Logos was required to obtain approval from the LALV Trust. In any event, to the extent that Mr Tobin believed that approval was required from Logos to enter into the alleged reframed agreement, Mr Iliffe had ostensible authority to give that approval.

554 My conclusions in [552] and [553] are based upon Mr Tobin's commercial experience and knowledge of joint ventures. Mr Tobin agreed that it was an ordinary feature of relationships such as that between Logos (as fund manager) and ADIA (as the ultimate source of funds for projects) that the fund manager has to get approval for the transactions it enters into. My conclusions are also based upon what he was told by Mr Iliffe about Logos's joint venture with ADIA in the 29 February conversation (and of course what he was not told). I refer to sections 7.1, 7.3 and 7.5 above. There is no clear evidence before me as to the precise details of what Mr Iliffe told Mr Tobin in this context, other than the general substance of the joint venture arrangements between Logos and ADIA, and some of the fees to which Logos was entitled.

555 What is clear is that Mr Tobin (or a reasonable person in his position) had very limited, if any, knowledge of the governance structures or of the particular agreements within the LALV Trust (including the LALVIM Agreement and the Unitholders' Agreement) which Logos relied upon at trial. This is based upon the limited information provided to him by Mr Iliffe at the time. Mr Tobin certainly had no knowledge of the internal governance of Logos, including the Securityholder's Deed.

556 There was some doubt about whether Mr Tobin knew that an agreement for Citius to perform a development management role or project management role required LALV Trust approval (i.e. to vary the Pro Forma Agreement). The evidence relied upon was vague. As set out in section 8.5.2, Mr Tobin gave evidence that he understood the need for a final sign off from ADIA concerning the transaction (in the context of the 2 March letter) but was unsure whether ADIA was required to sign off the role that Citius was going to play. As a result, I am not satisfied on the balance of probabilities that Mr Tobin knew at that time that any specific approval of the LALV Trust was required for any development management or project management role that Citius may perform.

557 In light of my comments in [552], Mr Tobin was aware, and/or a reasonable person in his position would have been aware, that approval was required by the LALV Trust for the decision to purchase the Marsden Park properties at the conclusion of the DD process involving consideration of the relevant contractual communications.

10.4 Mr Tobin's evidence about the alleged reframed agreement

558 Finally, as a condition of allowing Citius to amend to plead the alleged reframed agreement, I ordered that Logos be able to cross-examine Mr Tobin in relation to the alleged reframed agreement. As to the lateness of the introduction of the alleged reframed agreement, Mr Tobin gave evidence to the effect that he did not understand the nature of the ASOC agreement and that the ASOC agreement was not relevantly different to the alleged reframed agreement. I do not accept that the alleged reframed agreement was not materially different from the ASOC agreement. I am unsure how Mr Tobin could give evidence to the contrary.

559 In this context, Mr Tobin was taken to his evidence where he acknowledged that, in the context of the draft CA, the fees were linked to the various stages of services set out in sch A. I refer to section 8.8 above.

560 Further, Mr Tobin did not agree that it was commercially absurd to suggest that Citius would be entitled to all of the fees alleged to be part of the alleged reframed agreement, even if it performed no work. Mr Tobin gave evidence that 'the payment of the fees reflected the broader conditions and some of the other aspects of the agreement, quite apart from simply the project management or development management services'.[105] He gave evidence that part of the alleged reframed agreement was for the identification of the project and providing the commercial opportunity to Logos. Mr Tobin said that Citius had 'entered similar agreements with other investors that provide for this regime'.[106] It was put to Mr Tobin that he had invented this evidence. He disagreed. Mr Tobin raised that the draft CA included a termination clause but agreed there was no discussion of such a clause before 2 March 2016.

11.1 Significance of the incentive fee in the proceeding

561 As noted above, Citius alleged that four fees were payable pursuant to the alleged agreement: an acquisition fee, a development management fee, a project management fee and an incentive fee. In closing submissions Citius sought damages only for the unpaid balance of the acquisition fee, 50% of a development management fee of $6,570,788 (the amount of which was agreed between the legal advisers for the parties), and an incentive fee which was based upon the Performance Fee in fact paid on 16 December 2021 (which Citius estimated to be in the order of $12 million). In its closing submissions, Citius contended that it was not in dispute that Logos did not receive a project management fee and thus it was not able to be shared, with the result that '[n]o project management fee is claimed by Citius'.[107]

562 It has always been an issue in this proceeding (which was issued in 2019) as to whether the incentive fee term was enforceable. Further, Citius has always sought damages for the failure to pay the incentive fee. In this context I wish to note that there was an earlier proceeding issued in 2017 in this Court by Citius against Logos (being proceeding no S ECI 2017 00086, the first proceeding). The first proceeding was discontinued in early August 2018. The allegations in the first proceeding were in substantially the same form as claims made in this proceeding when it was issued in April 2019.

563 By its re-opening application (at the very end of its oral closing submissions) Citius sought to re-open its case in respect of the damages claimed for breach of the incentive fee term. As a result, it is appropriate to now deal with the incentive fee term, its relevance and significance in this proceeding, and the basis upon which the incentive fee and its calculation has been alleged and sought to be proved by Citius in this proceeding. Much of the following is based upon the material filed in relation to the re-opening application.

564 The incentive fee term was alleged in [6](h)(iv) of the statement of claim filed 16 April 2019 (SOC). Logos has always contended that the incentive fee term was so uncertain that it is unenforceable. This is because the incentive fee was based upon the Performance Fee which was calculated by reference to all of the projects of the LALV Trust and not just the Hargreaves Property (which I will refer to in relation to the incentive fee as the Marsden Park project).

565 To the knowledge of Citius, the Performance Fee (on which the incentive fee term was based) was not calculated or paid prior to the issue of this proceeding. As the 1 March email indicated, the Performance Fee was not payable for 7 years i.e. in about November 2021. In fact, the Performance Fee invoice was not issued by Logos IM to the LALV Trustee until 16 December 2021.

566 In these circumstances, until January 2022, Citius's case was premised on the basis of a potential or forecast Performance Fee. This was reflected in its written opening submissions filed 10 January 2022, which noted that Citius expected that the Performance Fee was payable by late 2021 based on sch 5 of the LALVIM Agreement. The submissions continued:

However, as at June 2016, the performance fee attributable to the Project was $4,220,964 based on an expected profit of $31,225,144. The actual performance fee may be more than double this number, as the actual profit for the project exceeds $68 million.

567 The estimate of the Performance Fee as at June 2016 was based upon the model for the calculation of the Performance Fee prepared by Logos IM in June 2016 (the 2016 model) which was discovered in October 2020. The 2016 model contained a forecast for the calculation of the Performance Fee (calculated in accordance with sch 5 of the LALVIM Agreement) which was likely to be payable based on all of the projects of LALV Trust (the 2016 forecast Performance Fee).

568 The 2016 model was discovered pursuant to orders made on 14 October 2020 (the October 2020 orders). Relevantly, the October 2020 orders were that Logos provide:

(1) the spreadsheet maintained by Logos IM to track the costs and expenditure associated with the Marsden Park project (current as at the date of discovery); and

(2) the spreadsheet maintained by Logos IM for the purpose of calculating any Performance Fee, current as at the date of discovery.

569 The October 2020 orders also provided that Logos make ongoing discovery of those documents as and when new versions of such documents were produced.

570 As to the significance of the incentive fee in this proceeding, I wish to point out that, in August 2020, Logos challenged the allegation made by Citius in the SOC relating to the incentive fee term and how the incentive fee could in fact be calculated. As a result, further versions of the incentive fee term were put forward by Citius.

571 As set out above, the first formulation was put forward in the SOC. The SOC alleged the incentive fee was in the nature of a performance fee (which would be payable after 7 years) and which would be the equivalent to 50% of the bonus fee payable to Logos IM by ADIA, which amount was payable pursuant to the LALVIM Agreement. Logos objected to this formulation including on the basis that the Performance Fee is not calculated by reference to particular projects.

572 The second way put forward was in a proposed amended statement of claim exhibited to the affidavit of Mr Damian Neylon sworn 14 August 2020. Citius sought leave to file this proposed amended statement of claim. The summons was heard on 4 September 2020. Logos opposed leave being granted.

573 The third way put forward was on about 9 September 2020 in a further proposed amended statement of claim. It was drafted after the hearing on 4 September 2020 and in light of comments made by counsel for Logos and the Court. Relevantly, at the hearing on 4 September 2020 I indicated that I wished to give the legal advisors for Citius the time to sit down and think through the consequences of the documents provided by that time for their pleading of the incentive fee term, in order to understand the real case that Citius wished to pursue at trial.[108] I note in passing that by this time Citius had sch 5 of the LALVIM Agreement (pursuant to which the Performance Fee was calculated).

574 The third way was relevantly that the incentive fee was in the nature of a performance fee which would be equivalent in amount to 50% of that part of the Performance Fee payable to Logos IM by Harina, pursuant to the LALVIM agreement, which was 'attributable to the acquisition and development of the Project by Logos or a related entity of Logos, to be payable when the said Performance Fee became payable to Logos IM'. Logos objected to this formulation, including on the ground that it did not identify the basis upon which 'that part of any Performance Fee payable to Logos IM by Harina... was attributable to the acquisition and development of the Project'.

575 The fourth way was put forward on 21 September 2020 by a further version of a proposed amended statement of claim. By consent, I granted leave for this fourth way to be included in the ASOC. Paragraph [6](h)(iv) of the ASOC relevantly provides:

(iv) Incentive Fee, being in the nature of a performance fee and which fee would be equivalent in amount to 50% of that part of any Performance Fee payable to Logos IM by Harina, pursuant to the [LALV IM Agreement], which was attributable to the acquisition and development of the Project by Logos or a related entity of Logos, to be payable when the said Performance Fee became payable to Logos IM, and to be calculated as:

(A) that fraction of the Performance Fee which represented the ratio of the value of the Project as an asset of the [LALV Trust] to the total assets of the LALV Trust multiplied by the Performance Fee payable to Logos IM by Harina;

(B) alternatively to (A), the amount of the Performance Fee which would be payable to Logos IM by Harina if the Project were the only asset of the LALV Trust.

576 This was the form of the incentive fee term at the commencement of the trial. For convenience, I will refer to the methodology in [6](h)(iv)(A) of the ASOC as alternative A and to the methodology in [6](h)(iv)(B) of the ASOC as alternative B.

577 Citius did not seek to lead any evidence at trial as to the calculation of the incentive fee and, in particular, the calculation of the Performance Fee which may be attributable to the Marsden Park project under alternative A or alternative B. I note that Citius served (on about 30 November 2020), but did not seek to rely on at trial, an expert report of Mr Leon Lachal which calculated the incentive fee based on alternative A.[109] No expert report consistent with alternative B has ever been filed or served.

578 As is evident, any uncertainty about the basis of calculating the incentive fee was relevant to whether the incentive fee term was enforceable (i.e. the enforceability issue). It was also relevant to the claim for damages i.e. for the failure to pay the incentive fee in breach of the incentive fee term. Nevertheless, Citius did not further indicate to Logos or the Court the methodology upon which the incentive fee might be calculated in accordance with alternative B prior to the provision of an annexure to its written closing submissions (not provided until 18 May 2022, Annexure 2) and its explanation in oral closing submissions.

579 As noted above, the Performance Fee invoice was dated 16 December 2021. Logos discovered the Performance Fee invoice and the actual model on which that fee was calculated (as at November 2021, the November 2021 model) on 25 January 2022 (the January 2022 discovered documents). Due to concerns relating to confidentiality, the November 2021 model was not in fact provided to the legal advisers for Citius until 31 January 2022.

580 The trial commenced on 1 February 2022. Citius closed its case on 9 February 2022. Logos then opened its case. Logos closed its case on 16 February 2022.

581 On 7 February 2022, Citius served a notice to produce on Logos seeking production of the copies of the documents (spreadsheets) tracking the costs and expenditure associated with the projects undertaken by the LALV Trust, save for the Marsden Park project, current as at the date of the notice. They were provided on 9 February 2022.

582 On 14 February 2022, Citius made a further request for documents. It would appear this was because the documents produced in response to the notice to produce on 9 February 2022 did not enable Citius to identify the components of the Performance Fee which were referrable to the Marsden Park project. Counsel for Citius explained this issue to the Court on 14 February 2022.[110]

583 As a result Logos produced the following source documents used to prepare the November 2021 model (the February 2022 discovered documents):

(1) on 14 February 2022 (after 6.00pm) equity distribution notices, capital call notices, and the LALV capital call tracking sheet, which Citius relied upon for the purposes of apportionment of the Performance Fee; and

(2) on 15 February 2022, Logos discovered the Nov 2021 LALV balance sheet, which Citius relied upon for the purposes of apportionment of the Performance Fee.

584 On 16 February 2022, Citius tendered the final set of documents which it relied upon as evidence in this proceeding. Citius included the January and February 2022 discovered documents (the 2022 discovered documents) in the documents it sought to rely upon as evidence on 16 February 2022.

585 As noted above, Citius did not itself at the trial of this proceeding lead any evidence in respect of the calculation under alternative A or alternative B.

586 Mr Singh gave evidence as to the calculation of the Performance Fee as follows:

(1) Mr Singh oversaw the preparation of the Performance Fee invoice;

(2) the Performance Fee provided in the invoice was calculated in accordance with sch 5 of the LALVIM Agreement, cl 2 of which relevantly provides that:

The LALV Investment Manager is entitled to a Performance Fee as at the end of the Assessment Period calculated in accordance with the Model and described as follows:

Performance Fee = 18.0% of the Outperformance on a before tax basis.

(3) the Assessment Period relevant to the calculation of the Performance Fee in this proceeding was 30 November 2014 to 30 November 2021;

(4) as to the reference to the 'Model' in cl 2 of sch 5, the Model is defined to mean 'the spreadsheet that accompanies Schedule 5 and is to be used as a guide to calculating the Performance Fee'. The Model at the time of the LALVIM Agreement was not in evidence before me;

(5) the Model contained estimates of the integers relevant to calculate the Performance Fee. The Model was updated from time to time during the Assessment Period with the actual data in respect of these integers as they became available resulting in revised forecast figures for the balance of the Assessment Period. For example, the 2016 model used actual data available at the time of its creation and revised forecast figures for the balance of the Assessment period; and

(6) the November 2021 model was a spreadsheet used to calculate the Performance Fee invoice, and was based on the Model using actual data available at the time of its creation for the Assessment Period.

587 Under sch 5, Outperformance is relevantly defined to mean the '... the Net Present Value of the Trust Cash Flows compounding monthly at the Hurdle Rate [11% per year] from the start to the end of the Assessment Period'.

588 As to the Trust Cash Flows, they are defined to mean, in respect of the Assessment Period, a summation of the flowing items:

(1) Equity Contributions (treated as a negative number in the Model);

(2) Equity Distributions (including Capital Returns and treated as a positive number in the Model);

(3) Total Assets of the [LALV] Trust at the end of the Assessment Period (treated as a positive number in the Model); and

(4) Total Liabilities of the [LALV] Trust at the end of the Assessment Period (treated as a negative number in the Model).

589 As to the Net Present Value of the Trust Cash Flows, cl 1 of sch 5 to the LALVIM Agreement relevantly provides:

Net Present Value of the Trust Cash Flows = The sum of each Trust Cash Flow discounted at the Hurdle Rate from the end of the month in which a Trust Cash Flow occurs to the starting month of the Assessment Period.

590 Mr Singh gave evidence that the Trust Cash Flows were 'discounted' at the hurdle rate in the month in which they occurred, with this figure ultimately being used in the actual calculation of the Net Present Value of Trust Cash Flows. In accordance with cl 1 of sch 5, the Net Present Value of Trust Cash Flows was then compounded at the Hurdle Rate of 11% per annum for the duration of the Assessment Period to calculate the Outperformance figure as defined above. The Performance Fee payable at the end of the Assessment Period was 18% of this Outperformance figure.

591 Mr Singh gave evidence to the effect that the Performance Fee calculation was consistent with the above summary. Mr Singh said that there was another calculation of the Net Present Value of the Trust Cash Flows in the November 2021 model. He said it was produced using another slightly different calculation in accordance with sch 5 and was used as a 'check'. He said it was not used in the calculation of the Performance Fee.

592 As to the Performance Fee calculation that resulted in the Performance Fee invoice, Mr Singh gave evidence that the values for the integers relevant to the calculation of Trust Cash Flows were (as at November 2021 and included in the November 2021 model):

(1) Equity Contributions in the sum of $509,817,316;

(2) Equity Distributions in the sum of $87,550,000;

(3) Total Assets of the Trust in sum of $2,283,819,747; and

(4) Total Liabilities of the Trust in the sum of $834,173,450.

593 The amount of Equity Contributions was sourced from the LALV capital call tracking sheet which Mr Singh said reflected the Equity Contributions referred to in the November 2021 model. He said that the LALV capital call tracking sheet allocated those Equity Contributions against the eight projects undertaken by the LALV Trust as at 30 November 2021. Further, for each Equity Contribution there was a request for funding issued to unitholders in the LALV Trust i.e. the capital call notices. The capital call notice identified the purpose (and relevant LALV Trust project) for which each call was to be identified. It would appear Mr Singh deleted the last two entries on the LALV capital call tracking sheet in order to prepare the November 2021 model and the Performance Fee invoice because they were received after the conclusion of the Assessment Period.

594 The amount of Equity Distributions was sourced from the equity distribution notices. However, the equity distribution notices did not allocate Equity Distributions to specific projects within the LALV Trust. Mr Singh gave evidence that Equity Distributions were monies paid from the LALV Trust, similar to a dividend a company would pay shareholders, and constituted income generated by the LALV Trust. He said the first such distribution was made in October 2019 and quarterly distributions were usually made after that time. Mr Singh gave evidence that the Equity Distributions were generated from 'funds from operations' from collecting rents, and deducting fees, interest and expenses.[111]

595 The Total Assets of the Trust and the Total Liabilities of the Trust were derived from the Nov 2021 LALV balance sheet. The Total Assets of the Trust figure (made up of total current assets of $60,369,747 and total non-current assets) was used in the November 2021 model. The Total Liabilities of the Trust was derived from the Nov 2021 LALV balance sheet but adjusted (reduced) to remove provision for the payment of the Performance Fee by Mr Singh (of approximately $17 million). The adjusted figure used in the November 2021 model was thus the figure set out in [592](4). However, the nature of the adjustment or its calculation was not adequately explained.

596 The Nov 2021 LALV balance sheet in evidence was an extract of a larger document. It listed the lots within each of the eight projects of the LALV Trust: Prestons, Hazelmere, Heathwood, Altona North, the Hargreaves Property (called 'Marsden Park'), Berrinba, Truganina and 90 Palmers Road. The LALV Trust has not sold any of these lots. These lots were grouped together for valuation purposes in two ways: Stabilised Properties (where construction was completed) and Development Properties (where construction had not commenced or was in progress). Mr Singh said the values attributable to the lots were based on valuations undertaken as at November 2021.

597 Finally, Mr Singh gave evidence that he did not believe that a Performance Fee relating to the Marsden Park project alone would be 'accurate or ... accurate enough'.[112] This was for a number of reasons:

(1) there were difficulties in allocating/apportioning finance costs which had been incurred across the LALV Trust;

(2) there were difficulties in allocating/apportioning Equity Distributions which had been calculated across the LALV Trust;

(3) there were difficulties in allocating/apportioning the investment fees payable under the LALVIM Agreement, and the trustee fees, each of which was based upon the gross asset value of the LALV Trust; and

(4) there were difficulties in taking into account market conditions affecting the Marsden Park project, namely, it would be necessary to take into account the market conditions of the Hargreaves Property and the market conditions that influence the overall portfolio of the properties of the LALV Trust given they were in different locations.

598 Mr Singh gave evidence that it would be necessary to make a number of assumptions about these matters. Indeed, this evidence was given in the context of whether it was possible to build a model which would reflect the proportion of the Performance Fee attributable to the Marsden Park project.

599 As to difficulties in apportioning finance costs, Mr Singh was taken to the non-current liabilities in the Nov 2021 LALV balance sheet. It recorded tranches A to D of Portfolio Loans with provision for other tranches. Mr Singh gave evidence that in about April 2018 the LALV Trust entered into a syndicated facility with a number of banks which was secured against all of the assets of the LALV Trust (the syndicated facility). He said that, prior to that time, the LALV Trust had taken out individual loans against the security of individual projects. Mr Singh said that the syndicated facility led to a reduction in overall costs and provided for greater flexibility to draw down funds for the benefit of all projects, subject to an overall facility limit. In substance, Mr Singh gave evidence that apportioning finance costs to the Marsden Park project alone would be difficult given the benefit of lower finance costs by reason of the syndicated facility. Mr Singh said that the question would be '...how do you fairly allocate and...adjust such cashflows...and impacts to those cash flows'.[113]

600 As to difficulties in allocating/apportioning the Equity Distributions, he said that, for a large part, Equity Distributions are generated based upon the overall operating cash flows of the fund from operations. He said Equity Distributions were a by-product of fund level cash flows, fees, particular revenues and other items. He said it would be necessary to disaggregate the Equity Distributions to make sure they purely related to the Marsden Park project. He also said that both trustee expenses and investment management fees would then need to be allocated/apportioned according to some method.

601 As to market conditions, Mr Singh said that the valuations used to obtain the Performance Fee took into account market conditions. He said it would be necessary to have regard to the specific market conditions of the Hargreaves Property and de-tangle it from the market conditions that influenced the overall asset portfolio of the LALV Trust. In cross-examination he agreed that there was a valuation of each of the assets of each project in the Nov 2021 LALV balance sheet for the purpose of calculating the Total Assets of the LALV Trust. He said those assets when aggregated with cash on hand, trade debtors and other assets, constitute the Total Assets of the Trust for the purpose of calculating the Trust Cash Flows figure.

602 Finally, Mr Singh gave evidence that there were difficulties in determining a Performance Fee for the Marsden Park project only, given the timing issues associated with its acquisition. He said that the projects of the LALV Trust commenced at different times during the Assessment Period, i.e. Equity Contributions and/or finance for the acquisition, and income and expenses incurred in relation to each project, were incurred at different times. If one was only looking at the Marsden Park project, in light of the timing of this project and the other projects of the LALV Trust, there would need to be some adjustment or amendment to the Performance Fee, given that the Hargreaves Property was acquired in mid-2016. I understood his evidence to be to the effect that the timing of the Equity Contribution/borrowing to purchase the relevant land for the project, and the income and expenses incurred after that time in respect of that project, would somehow have to be reflected.

603 As is evident, Annexure 2 was not put to Mr Singh for him to comment on. Most relevantly, Mr Singh did not comment upon the methodology adopted, the changes to the November 2021 model and/or the assumptions made in Annexure2.

604 As I said, Logos closed its case on 16 February 2022. On 22 February 2016, pursuant to orders of the Court, each party served its written closing submissions. Citius submitted, in section I of its submissions (relating to Damages) that, even having regard to the limited disclosure of documents relating to the November 2021 model:

[I]t is possible to fairly apportion the Performance Fee across the eight projects of the [LALV] Trust. Citius's calculations are set out in Annexure 2. The component of the Performance Fee attributable to Marsden Park was approximately $24 million, of which Citius's claim for damages is 50%.[114]

605 I note in passing that, in its written submissions filed on the re-opening application, Citius described the calculation undertaken in Annexure 2 as 'the performance fee in the hypothetical scenario where Marsden Park is the only asset of the LALV Trust'.

606 Annexure 2 (entitled 'Annexure 2 - Apportionment of performance fee (see attached sources and assumptions') was not in fact annexed to the written closing submissions of Citius. However, as is evident from the written closing submissions, it appeared that Citius was attempting to calculate its damages for non-payment of the incentive fee by seeking to apportion the Performance Fee across the eight projects of the LALV Trust, and most relevantly, in respect of the Marsden Park project. However, the written closing submissions did not make clear how Citius would calculate its damages for non-payment of the incentive fee.

607 As I said, Annexure 2 was not in fact annexed to the written closing submissions of Citius. Because of health issues, I was not able to hear the oral closing submissions (fixed originally for 24 February 2022) until May 2022. When I listed this matter for mention on 13 May 2022, I raised the failure of Citius to provide Annexure 2. In fact, Annexure 2 was not provided until 18 May 2022.

608 On review of Annexure 2, the basis upon which it was prepared was far from clear. As a result, I asked counsel for Citius to explain it for my benefit and for the benefit of Logos on 23 May 2022, before Logos commenced its oral closing submissions.

609 Annexure 2 consisted of two parts. Pages 1 to 5 consisted of a pdf spreadsheet, based on the November 2021 model. Pages 6 to 9 were headed 'Sources and assumptions'. Counsel for Citius explained that:

(1) the first third of each of pages 1 to 5 was the November 2021 model;

(2) the second third of each of pages 1 to 5 was the November 2021 model, however the adjusted figures related only to the Marsden Park project; and

(3) the last third of each of pages 1 to 5 was the November 2021 model, however the adjusted figures related to all the projects of LALV Trust, save for the Marsden Park project.

610 Counsel for Citius then explained that the adjusted figures in (2) and (3) were the result of the analysis of some of the 2022 discovered documents, in light of the evidence of Mr Singh, and the assumptions made by counsel set out in pages 6 to 9 of Annexure 2.

611 Counsel for Logos made their oral closing submissions on 24 May 2022. Senior counsel requested Logos respond to Annexure 2 later as there had been delays in obtaining the transcript of 23 May 2022. Counsel for Citius did not oppose this. As a result, Logos did not address Annexure 2 on that day.

612 Counsel for Citius then made their oral closing submissions on the afternoon of 24 May 2022. At the conclusion of Citius's oral closing submissions I raised concerns with counsel for Citius as to the use I could make of Annexure 2. This was in light of my then view that Annexure 2 was, in substance, evidence, and that there was no evidence to support it given that it was based on a model with inputs changed by counsel for Citius and on the basis of assumptions made by counsel. I declined to accept the submissions made by Citius to the extent that Annexure 2 was an aid to the Court incorporating evidence.

613 Senior counsel for Citius then indicated that Citius sought leave to re-open its case to prove some aspects of Annexure 2. I then made orders for Citius to do so by summons and the filing of affidavit material in support.

11.4 Assumptions in, and some issues with, Annexure 2

614 Before addressing the re-opening application, I wish to note that it became apparent to me after hearing the oral closing submissions of Citius that no evidence was led as to the accuracy of the adjusted figures in Annexure 2, whether the assumptions used to determine some of those adjusted figures were appropriate, or whether the formulas used to produce Annexure 2 were the same as the formulas in the November 2021 model.

615 I raised some of these with the parties during the re-opening application. Logos also raised a number of issues including errors and inconsistencies in Annexure 2 in submissions filed after the hearing of the re-opening application. I will address those other issues later in these reasons.

616 First, in determining Equity Contributions, Annexure 2 assumes, against the interests of Citius, that all Equity Contributions for trust expenses (of approximately $330,000, the trust expenses), relate only to the Marsden Park project. Logos also questioned this assumption (Logos Error 8).

617 Second, for the purpose of calculating Equity Distributions, Annexure 2 assumes, against the interests of Citius, that no Equity Distributions were made in respect of the Marsden Park project. The Equity Distributions in fact made by the LALV Trust are set out in [592](2). However, the evidence revealed that Equity Distributions were made in connection with the Marsden Park project and were made up primarily of rental income, which was reduced by interest payments. Citius did not seek to calculate the Equity Distributions made in relation to the Marsden Park project. Logos also questioned this assumption, including on the basis that it was inconsistent with the evidence (Logos Error 11).

618 Third, Annexure 2 assumes against the interests of Citius that, for the purpose of calculating the Total Assets of the Trust, the current assets in the Nov 2021 LALV balance sheet set out in [595] above should be apportioned across the non-Marsden Park projects. This was not explained in the evidence before me. Logos also questioned this assumption, including on the basis it was inconsistent with the evidence (Logos Error 12).

619 Fourth, in Annexure 2, the Total Liabilities of the Trust is approximately $17 million less than the Total Liabilities of the Trust in the Nov 2021 LALV Balance sheet. Annexure 2 asserts the difference was not explained. However, as noted above, Mr Singh gave evidence that the difference reflects the removal of the anticipated Performance Fee to avoid double accounting. Logos also questioned the appropriateness of this difference and Citius's assertion that it was unexplained in light of Mr Singh's evidence. This is part of Logos Error 1.

620 Fifth, Annexure 2 seeks to apportion the Total Liabilities of the Trust across each project of the LALV Trust in proportion to the amount of debt finance required for each project to determine a notional 'Total Liabilities of the Trust' relating to the Marsden Park project. This apportionment in Annexure 2 proceeds as follows:

(1) first, seeking to identify the finance required for each LALV project by determining the actual development costs incurred for each project and subtracting the actual gross equity contributions for each LALV project (the finance required for each project) ;

(2) second, seeking to calculate the Percentage Finance required for each LALV project using a formula (by taking the finance required for each LALV project pursuant to (1) and dividing this figure by the total finance required for all LALV projects (being the sum of the finance required calculation in accordance with (1) above) multiplied by 100):

Percentage Finance = Finance Required/$699,431,865 (total finance required) x 100; and

(3) applying the Percentage Finance to the Total Liabilities of the Trust of as set out in [592](4)) to apportion the total liabilities for each LALV project.

621 There are a number of issues relating to this attempt to apportion the Total Liabilities of the Trust across each project of the LALV Trust, and relevantly, for the Marsden Park project. I raised one of them with the parties, namely, that the Total Liabilities of Trust figure is approximately $135 million more than the total finance required for each project. This difference was not explained. Footnote 7 of Annexure 2 states that 'The Total Liabilities of the Trust figure is higher than the finance required figure. There may be many explanations for this, including that the finance required does not account for interest and other expenses incurred in borrowing funds'. Logos also submitted that this footnote was speculative and not founded in the evidence. This was part of Logos Error 4.

622 Further, as noted above, Logos raised a number of other issues relating to the apportionment of the Total Liabilities of the Trust, as set out in [592](4)), in Annexure 2. I will deal with these further in section 11.6 below.

623 Citius made the re-opening application by summons dated 31 May 2022. Citius relied on two affidavits of Damian Neylon sworn 31 May and 9 June 2022 in support of the application. Logos relied on two affidavits of Mr John Dalzell affirmed 16 June 2022 and 24 August 2020. I heard the re-opening application on 22 June 2022 and reserved my decision.

624 Citius sought leave to re-open its case to tender the native Excel format file of the November 2021 model and an expert report of Ms Dawna Wright. As became apparent in the hearing of the re-opening application, Ms Wright's report identified some adjusted figures in Annexure 2, and sought to verify that the formulas used in Annexure 2 were the same formulas as contained in the November 2021 model. Beyond that, it was difficult to see what her report addressed. Relevantly, Ms Wright did not opine on the appropriateness of the adjusted figures in Annexure 2, on their accuracy, or on the appropriateness of the assumptions made in determining some of the adjusted figures.

625 As to the evidence, in support of the re-opening application, the solicitor for Citius deposed that he did not consider it necessary to seek further discovery in relation to the Performance Fee because Logos was under a continuing obligation to make discovery pursuant to the October 2020 orders. Further, he deposed that he was aware the Performance Fee was not payable until the end of 2021 and he considered that the document headed 'Executive Director - Delegated Authority Memorandum' dated 2 June 2016 'appeared to apportion the expected performance fee attributable to Marsden Park'.[115] It is not apparent on the face of this document why he considered this 2016 document apportioned the expected Performance Fee on a basis that might satisfy the Court.

626 Further, the solicitor for Citius deposed that, at the time the November 2021 model was tendered, he assumed there was no dispute about calculation fields in the native Excel spreadsheet, that the calculations were self-evident and that it was unnecessary for the November 2021 model to be tendered in its native format. Counsel for Citius submitted in oral argument that this was relevant inadvertence. Counsel also submitted that, as a result of the exchange between me and counsel for Citius on 24 May 2022, it 'became apparent that there needed to be some mapping ... between [the November 2021 model] and Annexure 2'.[116] Counsel submitted this was also relevant inadvertence.

627 Logos opposed the application to re-open. This is in the context of the history of this proceeding set out above and the objective importance at all times of the incentive fee and its calculation.

628 Logos submitted, based on the Dalzell affidavits, that the methodology in Annexure 2 constituted a new case. Counsel for Logos submitted that alternative B only allowed for the amount of the Performance Fee on the basis that the Marsden Park project was the only asset of the LALV Trust, i.e. on a standalone project basis. By contrast, Annexure 2 proceeded on the basis that the Performance Fee could be calculated on the basis that the Marsden Park project was one of the assets of the LALV Trust, and sought to apportion the integers used to calculate the Performance Fee across each of the eight projects of the LALV Trust (the pure apportionment basis). As a result, senior counsel for Logos submitted that the legal advisors of Logos had prepared for trial on the standalone project basis and that they were taken by surprise by the Annexure 2 methodology, which was not provided until after the close of evidence.

629 Further, based on the Dalzell affidavits, counsel for Logos submitted that, if Logos had been aware of the methodology in Annexure 2, he would have:

(1) examined Mr Singh differently to refute the assumptions underlying the adjusted figures in Annexure 2;

(2) called a funds management expert - who would give evidence about the structure of the LALV Trust and on the profitability of the Marsden Park project, including that parts of the Marsden Park project would have been delayed but for the structure of the LALV Trust; and

(3) called a forensic accounting expert, or possibly a valuer, who would opine on the likely profitability of the Marsden Park project, including how far the project would have progressed if it had not been developed within the LALV Trust and the timing of the equity contributions and debt drawdowns for the Marsden Park project.

630 Counsel for Logos noted that it was clear that Mr Singh did not critique Annexure 2. This is because at the time Mr Singh gave evidence, there was no case advanced based upon allocating/apportioning the integers used to calculate the Performance Fee consistent with Annexure 2.

631 As a result, counsel for Logos submitted, based on the Dalzell affidavits, that if the re-opening application were granted, it sought to call further evidence on the appropriateness of the methodology utilised in Annexure 2, including the use of adjusted figures and the assumptions contained therein. Counsel noted that:

(1) Annexure 2 is based on assumptions that assign the advantages of the LALV Trust to the Marsden Park project, for example, the cost of debt and the ability to obtain higher leverage, which are a function of a large portfolio of assets: the costs for a single project would have been different; and

(2) it is inaccurate to assume the total debt for each project can be calculated by taking total development costs and deducting amounts in capital contributions referrable to a particular project, as decisions around the level of debt funding of the LALV Trust were made on a whole of portfolio basis. For example, parts of the development of the Marsden Park project were made on a speculative basis (i.e. without a tenant) and those parts of development wouldn't have occurred until a tenant was secured.

632 Counsel for Logos submitted that, based on the Dalzell affidavits, if the re-opening application was allowed it would take at the very least a number of months to prepare Logos's evidence in response.

633 Further, counsel submitted that, in all the circumstances, granting leave to re-open the case would be futile, given the limited nature Ms Wright's evidence which did not address, at the very least, the appropriateness of the adjusted figures, or of the assumptions on which some of them were made.

634 Logos also submitted that Citius did not meet the evidential burden to re-open its case, namely relevant inadvertence. This is in light of the documents discovered prior to 2022 (relevantly, the 2016 model and sch 5 of the LALVIM Agreement) and the ability of Citius to engage an expert after that time to opine on what was necessary for Citius to calculate the Performance Fee by reference to the Marsden Park project. Logos submitted that the November 2021 model only updated the 2016 model with actual data to November 2021 and that the discovery of the November 2021 model was not the reason for the re-opening application. It submitted the November 2021 model was clearly not a basis to put forward a new methodology. Citius did not raise Annexure 2, or the substance of it, during the trial. In any event, Logos noted the limited nature of the further evidence in Ms Wright's report.

635 In response, Citius submitted that it was not open to Citius to brief an expert with all the necessary documents (which I have assumed to mean the 2022 discovered documents) until mid-February 2022. I will deal with this submission further below. It suffices to say that for present purposes Ms Wright only addresses some of the adjusted figures and the formulas used in Annexure 2 and in the November 2021 model. She does not otherwise address the accuracy of Annexure 2 based on the 2022 discovered documents or the methodology or assumptions contained in Annexure 2.

636 Further, counsel for Citius submitted that, while Annexure 2 related to alternative B, Citius now relied upon alternative A as a 'fall back'.[117] This is notwithstanding that at no time in its written closing submissions, or during its final oral submissions, did Citius make any submissions based on alternative A.

637 At the conclusion of the re-opening application I asked counsel for Logos to file submissions in relation to Annexure 2. Those submissions were filed on 15 July 2022. Citius filed submissions in response on 27 July 2022. In summary, Logos made three main points.

638 First, Logos re-iterated that, by seeking to apportion various aspects of the Marsden Park project, Annexure 2 constituted a new case i.e. the pure apportionment basis. Logos submitted that Annexure 2 did so by including contributions, distributions and liabilities by reference to the actual figures which were achieved, without any consideration of, or any evidence to support, an inference that those contributions, distributions and liabilities bear any relationship to the figures that would have been achieved if the Marsden Park project had been the only asset of the LALV Trust. It noted that no evidence was lead to prove this 'hypothetical scenario',[118] yet Citius asked the Court to assume in Annexure 2 that all the financial consequences and benefits of developing the Marsden Park project within the LALV Trust would have carried through to the Marsden Park project if it were developed on the standalone project basis.

639 Second, Logos submitted that Annexure 2 proceeds on the basis that it is permissible for Citius to offer 'an "estimate" of damages'[119] and that such an approach is misguided in light of the authorities on proof of loss, relying upon, among others, Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd ('Keys Consulting').[120]

640 Third, Logos submitted that Annexure 2 contains errors and assumptions resulting in the inclusion or exclusion of inputs in the calculations in Annexure 2 without an evidential basis, or proper justification, and that some of these inputs are inconsistent with the evidence before the Court. I note that some of the errors and assumptions referred to by Logos related to the standalone project basis and other errors and assumptions related to the pure apportionment basis.

641 As to the third point, Logos primarily referred to the apportionment of the Total Liabilities of the Trust in Annexure 2. Logos noted that Annexure 2 asserts it is possible to apportion the actual Total Liabilities of the Trust to arrive at a figure which represents the total liabilities that the LALV the Trust would have incurred if the Marsden Park project was the only asset of the LALV Trust. Logos submitted that this methodology is not supported by any evidence. It submitted that, in fact, the only evidence led as to this point was from Mr Singh, who did not accept that deducting Equity Contributions from total development costs was an appropriate method to apportion the debt finance to each project.

642 Based on logic and the evidence of Mr Singh, Logos submitted that even if one accepts the pure apportionment basis adopted in Annexure 2, such a methodology hinged upon the correct identification of development costs, as well as the Equity Contributions and liabilities for each project and the making of assumptions which must be proved by evidence. Logos submitted that Citius's methodology had failed in each of these respects.

643 Logos submitted it is obvious that, had the Marsden Park project been developed on a standalone project basis, the quantum and timing of equity and debt funding would have been very different from its actual development as part of the LALV Trust. This formed the basis of Logos Errors 5 and 6 (relating to liabilities) and Logos Errors 9 and 10 (relating to Equity Contributions).

644 There were six errors identified by Logos in relation to the attempt to apportion the Total Liabilities of the Trust in Annexure 2:

(1) Logos Error 1 (in addition to [619] above) related to Citius's calculation of 'actual development costs' for each project in order to apportion the Total Liabilities of the Trust. Logos submitted that the source data which was used to identify the development costs for each project (in particular, the LALV Trust cash flow spreadsheets for each individual project) related to periods beyond the Assessment Period;

(2) Logos Error 2 was that the total finance required (set out in [620](2) above) is contrary to the evidence. Logos relied in particular upon the Nov 2021 LALV balance sheet, which records that the total interest bearing liabilities of the Trust was approximately $80 million more than the total finance required. Logos submitted this difference was not explained and demonstrated Citius's flawed methodology;

(3) Logos Error 3 was an assumption error in that Annexure 2 assumes, against the evidence, that the only source of funds to pay development costs was either Equity Contributions or debt. By contrast, Mr Singh's unchallenged evidence was that the LALV Trust also generated funds from rental income and interest on funds held in LALV Trust bank accounts;

(4) Logos Error 4 (referred to in [621] above) is an assumption error in that Annexure 2 assumes, without evidence, that the difference between the total finance required and the Total Liabilities of the Trust as recorded in the Nov 2021 LALV balance sheet can be apportioned by reference to the assumed percentage of finance drawn down by each project. Logos submitted that the explanation in footnote 7 of Annexure 2 was not grounded [121]evidence,121 and was speculative. Further, Logos submitted that Citius had included in Annexure 2 capitalised interest in calculating development costs for at least three projects; and

(5) Logos Errors 5 and 6 referred to in [643] above.

645 As to Equity Contributions, Logos noted that Annexure 2 seeks to identify the Equity Contributions for the Marsden Park project by reference to the LALV capital call tracking sheet. Logos submitted that neither the LALV capital call tracking sheet, nor any other evidence, provides a basis to infer that the Equity Contributions that applied to the development of Marsden Park project, in the context of a portfolio of assets, would be an appropriate guide when seeking to identify the hypothetical Equity Contributions that would have been required under alternative B.

646 There were 4 errors identified by Logos, in relation to seeking to apportion the Equity Contributions in Annexure 2:

(1) Logos Error 7 is that there is no evidence to explain why approximately $52 million in Equity Contributions made on November 2021 (identified in the LALV capital call tracking sheet) were not included.[122] By contrast, in calculating the development costs, Citius included all costs incurred or expensed in November 2021 and beyond that date in some cases. No questions were put to Mr Singh in this regard;

(2) Logos Error 8 (set out in [616] above) was that Annexure 2, assumes, without evidence, that all of the trust expenses were attributable to Marsden Park. Logos submitted that this was absurd and the need to wave the apportionment exercise in respect of components used to calculate the Performance Fee highlighted the problems with the enforceability of the incentive fee term; and

(3) Logos Errors 9 and 10 referred to in [643] above.

647 As to Equity Distributions, Logos submitted that, consistent with [594] above, the evidence did not allow a breakdown of Equity Distributions on a project-by-project basis. Indeed, Mr Singh's evidence was that Equity Distributions were calculated at the LALV Trust level. This is Logos Error 11 referred to at [617]. Logos submitted that the fact that Citius makes an assumption against its interest does not explain how or why the Court should accept as a basis for calculating damages a calculation that is inconsistent with the evidence.

648 As to the Total Assets of the Trust, Logos submitted that Annexure 2 contained the following errors:

(1) Logos Error 12 referred to at [618] above; and

(2) Logos Error 13 is an assumption error in that Annexure 2 assumes, without evidence, that the Marsden Park project would have been constructed in the same way, and in the same time if it were the only asset of the LALV Trust.

649 Citius filed submissions in reply to Logos's submissions to Annexure 2. In substance, Citius submitted that the 13 Logos Errors do not detract from the calculations in Annexure 2 and it remains an accurate estimate of the Performance Fee attributable to the Marsden Park project. Citius submitted Annexure 2 should be accepted by the Court, particularly as Logos itself is the party best placed to address the purported deficiencies that Logos identified.

650 By way of summary, Citius made three general points in response to the Annexure 2 submissions of Logos, namely, that:

(1) Logos distorted the principles governing the onus of proof. Citius had put before the Court the best evidence available by which the Court can calculate its loss in light of the 2022 discovered documents. Citius relied upon s 140(1) of the Evidence Act 2008 (Vic) and Ho v Powell;[123]

(2) related to (1), all the evidence which might have been available to prove the calculation of Annexure 2 is in the hands of Logos, including what the Total Liabilities of the Trust relate to, the attribution of the trust expenses and the details of the rental income relating to the LALV Trust's projects, including the Marsden Park project; and

(3) Logos did not take issue with the mathematical calculations in Annexure 2 or the numbers manually entered into pages 1 to 5 thereof.

651 Citius submitted that it had not changed its position with regard to the calculation of the incentive fee. Further, Citius denied that it had abandoned any reliance on alternative A.

652 Citius disputed that there was no evidence of the 'hypothetical scenario' in which the Marsden Park project was the only asset of the Trust. First, Citius submitted that the contention that it is necessary to engage in a hypothetical scenario of the kind submitted by Logos is misconceived and is inconsistent with the manner the Performance Fee was pleaded in [6](h)(iv) of the FASOC. By this, I understood Citius to submit that it was not necessary for Citius to calculate the Performance Fee on the basis that the Marsden Park project was the only asset of the Trust, but that, consistent with Citius's characterisation of alternative B, Annexure 2 was calculated on the pure apportionment basis.

653 Second, Citius submitted that the hypothetical scenario contended for by Logos was inconsistent with the evidence of Mr Tobin and Mr Iliffe of the 29 February conversation that they would share the fees that Logos was paid by Harina. Third, if Logos wanted to defend alternative B on the basis of some hypothetical exercise, it was incumbent on it to lead such a case. Citius submitted that Logos must have made a forensic decision not to do so.

654 Citius also made submissions in response to the 13 Logos Errors as follows:

(1) Logos Error 1: Citius submitted that in circumstances where the total development costs exceed $1.2 billion, the amounts of the kind relied upon by Logos including sums in the order of approximately $1200 in the case of Berrinba and approximately $26,500 in the case of Hazelmere are immaterial.

(2) Logos Errors 2-4: Citius submitted that the possible explanations given in footnote 7 to Annexure 2 are logical. Indeed, Citius submitted that it was open to Logos to re-open its case to lead further evidence following the receipt of Annexure 2. In any event, Citius submitted that the differences between the finance required figure, the total interest-bearing liabilities in the Nov 2021 LALV balance sheet and the Total Liabilities of the Trust are not material because the finance required figure is only used as a 'stepping stone'[124] in the apportionment exercise.

(3) Logos Errors 5, 6, 9, 10 and 13 related to the standalone project basis. Citius repeated the matters set out in [652]-[653] above.

(4) Logos Errors 8, 11 and 12 related to the assumptions against the interest of Citius. As to the trust expenses, Citius submitted these were not material. As to the Equity Distributions of approximately $87 million and the failure to apportion any of the current assets of approximately $60 million to the Marsden Park project, Citius submitted that no documents were discovered that would have enabled Citius to calculate these amounts for the purposes of Annexure 2, with the result that the assumptions against interest are consistent with the principles for the assessment of damages.

11.7 Consideration of the re-opening application

655 The legal principles relating to granting leave to re-open a proceeding were not in dispute. In substance, the court has a discretion whether to re-open a proceeding which must be exercised judicially.[125] There are four recognised cases in which a court may grant leave to re-open, namely:

(i) where fresh evidence, unavailable or not reasonably discoverable before, becomes known and available;

(ii) where there has been an inadvertent error;

(iii) where there has been some mistaken apprehension of facts; and

(iv) where there has been some mistaken apprehension of law.[126]

656 However, as was made plain in Spotlight, these categories are not closed: the overriding principle is that the court should consider whether, taken as a whole, the justice of the case favours the grant of leave to re-open.[127] Further, the fact that the evidence to be led pursuant to the re-opening application could not affect the outcome of the proceeding, or is peripheral to the main issue, is a relevant factor.[128] For the reasons that follow, in this case, I am not satisfied that the justice of the case favours the granting of the re-opening application.

657 Before addressing the application of these principles, I wish to record that I have formed the view that the Annexure 2 methodology (i.e. the pure apportionment basis) is a new basis upon which Citius sought to determine its damages and/or to make the incentive fee term certain. For my part, I consider that the language of alternative B is far from clear as to whether it was intended to apply to the standalone project basis, the pure apportionment basis, or some other basis. In this regard, and in light of the ambiguity in alternative B, I accept that the legal advisers of Logos prepared for trial on the standalone basis and that they were taken by surprise by the pure apportionment basis presented in Annexure 2. In this context, in many ways, this application is not just a re-opening application, but also akin to an amendment application in so far as it seeks to raise the pure apportionment basis based on Annexure 2 for the first time and at this stage. This is notwithstanding that Citius maintained that the pure apportionment basis was not 'new'.

658 First, I am conscious that the 2022 discovered documents were provided just before or during the running of the trial. I consider the time at which these important documents were provided is a relevant factor in the exercise of my discretion on the re-opening application. I am very conscious that the 2022 discovered documents were provided in the context of the pressures of running a trial. Nevertheless, it was not explained to me why no application was made to adjourn the trial, even for a short time, to enable the legal advisers of Citius to address the issues arising from the 2022 discovered documents, or to seek further documents from Logos in light of the February 2022 discovered documents.

659 In this regard, I consider that the submissions of Citius, to the effect that the inadequacies in Annexure 2 should be excused because that information was in the possession of Logos, ignores that it was always open to Citius to seek further documents from Logos by way of discovery, or court order, to address those inadequacies. This is notwithstanding there was a continuing obligation of discovery on Logos. It suffices to say that, on the evidence before me in the re-opening application, I am not satisfied that Citius adequately pursued Logos for further discovery in order to address the inadequacies in Annexure 2. In this regard I note that the request made for further discovery on 14 February 2022 was a limited request, and Logos responded to that request by providing further documents.

660 Second, to the extent that it is relevant, I am not satisfied on the evidence before me that the failure to call the evidence the subject of the re-opening application was inadvertent. This is particularly so in light of the significance of incentive fee and its calculation to Citius's claim, as is evident from the history of the pleadings set out in section 11.1 above. Relevantly, it was not explained to me why no expert was retained from at least late 2020 in relation to the possible ways to determine damages for breach, or to calculate the incentive fee (including on the pure apportionment basis), having regard to sch 5 of the LALVIM Agreement, and/or the 2016 model, for the purpose of the enforceability issue or the damages issue.

661 Third, there are the consequences which would flow from granting the re-opening application. In this context, I consider that case management principles are relevant to the re-opening application. I also refer to s 8 of the Civil Procedure Act 2010 (Vic) which requires that '[a] court must seek to give effect to the overarching purpose in the exercise of any of its powers', namely, 'to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute' (as defined in s 7).

662 In this regard, the history of this proceeding (as set out above) is important. It has been on foot since 2019. Before that time, the first proceeding (issued in 2017 and discontinued in early August 2018) raised allegations in substantially the same form as originally raised in this proceeding.

663 On 28 April 2021 this proceeding was set down for trial. On 2 July 2021 the trial date was fixed for 1 February 2022 after ensuring counsel already briefed were available. Citius did not suggest at the time that the trial should not be set down because the Performance Fee was payable shortly before the trial date. The openings and evidence were heard over nine days. The oral closing submissions, including applications to amend, were heard over two days. That is a considerable amount of time, both for the Court, and relevantly, for Logos.

664 If the re-opening application were allowed, I accept the submission of Logos that it should be given time to prepare further evidence (including to challenge the appropriateness of the pure apportionment basis) and that there would be a need for further evidence and further hearing days, at the earliest, later this year. Those further hearing days would then not be available to other litigants.

665 Further, as a result of the need to prepare further evidence and list further hearing days, a delay in the order of six months (including finalising the judgment) seems likely to arise. In my view, consistent with case management principles, these factors are relevant in determining the re-opening application. This is especially so in light of the matters raised in [662]. In my view, these delays would result in a real prejudice to Logos in light of the history of this proceeding.

666 Fourth, and significantly, I consider that allowing the re-opening application would be futile.

667 The first and principal way is because I have formed the view that, even if allowed, the re-opening application would not change the outcome of this proceeding. This is in light of my conclusions in section 12 that Citius has not established on the balance of probabilities that the parties intended to create a binding contract by the alleged reframed agreement.[129] This is also in light of my conclusion in section 12 that, assuming there was such an intention, the parties did not reach agreement on sufficient terms in the alleged reframed agreement to constitute a legally enforceable agreement. As a result, even if the re-opening application was allowed, I consider that the evidence sought to be lead would not affect the outcome of the claims made in this proceeding.

668 Further, I do not consider that the evidence on the re-opening application will assist Citius. This is because, even if the damages in respect of the incentive fee were to be calculated on the pure apportionment basis, there is no evidence which addresses the appropriateness of:

(1) the adjusted figures in Annexure 2; and

(2) the assumptions on which some of those adjusted figures are based and the methodology used in Annexure 2, in particular, relating to the apportionment of the Total Liabilities of the Trust.

669 I refer in particular to my concerns as to the methodology adopted in Annexure 2 (in particular for apportioning the Total Liabilities of the Trust) referred to in [616]-[618] (Logos Errors 8, 11 and 12) and [620]-[621] (Logos Error 4) above. I have also concluded there is a proper basis for Logos Error 2, referred to in [644] above. Further, as set out above, a number of the adjusted figures and/or assumptions appear to be inconsistent with the evidence and/or there is no further evidence to be led as part of the re-opening application to address those inconsistences. I refer in particular to my concerns at [616]-[618] and [620]-[621] above. I also refer to Logos Error 2, Logos Error 3 and Logos Error 4 as discussed above at [644](4) (I agree that the explanation in footnote 7 of Annexure 2 was not based upon any evidence).

670 It suffices to say that I have not taken into account all the concerns I have raised about Annexure 2 in section 11.4 or all the Logos Errors. By way of example, I am unsure if my concern at [619] is material given that Mr Singh appeared to make the same change in calculating the Performance Fee. By way of further example, I refer to my comments in relation to Logos Error 7 in footnote 122 above. Further, I have not relied upon the Logos Errors which relate to the consideration of the Marsden Park project on a standalone basis.

671 Of course, Logos submitted that the pure apportionment basis is not an appropriate basis to assess damages given that it took into account the actual figures achieved by the LALV Trust without considering if, or calling evidence to establish that, these same figures would have been achieved if the Marsden Park project was the only asset of the LALV Trust. I accept that Logos wished to be able to challenge the damages calculation in Annexure 2 on this basis. However, in my view, that was a matter for further evidence to be led by Logos of the kind set out above in [629].

672 As is evident from [657] above, in my view, there has been much uncertainty and inconsistency in the claims relating to the incentive fee pursued by Citius. It is important to note that Citius relied upon Annexure 2 primarily for the purposes of calculating its damages. This is notwithstanding that, in the course of oral argument, it also relied upon Annexure 2 in support of the enforceability of the incentive fee term.

673 I am conscious that uncertainty in the quantification of damages does not prevent assessment of them: where precise evidence is not available the court must do the best it can do.[130] However, as made plain in Spotlight, 'where a calculation can be made, it must be made - and evidence to substantiate the calculation must be called - to such degree of accuracy as is reasonably possible'.[131] The Court of Appeal adopted similar principles in Keys Consulting.[132]

674 In this case, for the reasons set out above, I am not satisfied that Citius has not been able to adduce evidence to address the adjusted figures, the basis of the assumptions in Annexure 2 and the appropriateness of the methodology therein, including for the purpose of apportioning the Total Liabilities of the Trust in Annexure 2 and calculating its damages with the appropriate degree of accuracy in all the circumstances. In this regard, I refer to my comments and conclusions in [658]-[660] and [668] above.

675 Further, and as a result, in these circumstances, I reject any submission to the effect that it was incumbent upon Logos in some way to disprove the calculation of the Performance Fee in Annexure 2, particularly where Annexure 2 was not produced until well after the oral evidence had concluded. It was always incumbent upon Citius to prove its claim for damages by seeking the relevant documents from Logos (if necessary by court order) and/or producing evidence in support of any assumptions made. I will address the enforceability of the incentive fee term later in these reasons.

676 In all these circumstances, I am far from satisfied that the justice of the case favours the granting of leave to re-open to Citius. In short, the pure apportionment basis was not raised until after the evidence was closed. It was a new basis upon which Citius sought to determine its damages and/or to make the incentive fee term certain. This was notwithstanding that the incentive fee term and damages for its breach were always an important part of Citius's case and Citius was aware that the Performance Fee would not be payable until shortly before the trial was to commence. Even if the re-opening application was allowed, I do not consider it would affect the outcome of the claims made in this proceeding. Further, there was no evidence to support the adjusted figures, or more relevantly, the appropriateness of the assumptions on which some of those adjusted figures are based or the methodology adopted in Annexure 2. Finally, allowing the re-opening application would further delay the determination of this proceeding which in its original form was issued in 2017.

677 Issues 1 to 3 relate to the binding nature of the alleged reframed agreement. As a result, it is appropriate that I deal with them together. There are other issues relating to the alleged reframed agreement and any consequences of it being a binding contract, in particular, issues 8 to 11. I will deal with those separately.

678 Issues 1 to 3 are set out in [25] above. Further, as set out above, as the trial proceeded the central issues became:

(1) whether the parties intended to create a binding contract or to make a concluded bargain (i.e. the intention issue); and

(2) assuming there was such an intention, whether the parties reached agreement on sufficient terms to constitute a legally enforceable agreement (i.e. the enforceability issue).

12.2 Submissions as to the relevant legal principles

679 As to the legal principles, there was general agreement on the principles to be applied in determining the intention issue and the enforceability issue. The dispute was how those principles should be applied to the facts in this case.

680 On both of these issues, Citius accepted as correct, and relied upon, the statement of relevant legal principles set out in my judgment in Delaney v Delaney (the Delaney primary judgment).[133] This was not disputed by Logos.

681 As to the intention issue, Citius highlighted that the relevant question was whether the parties intended to create a binding contract, determined objectively from the relevant communications and documents, construed in the context of the circumstances at the time it was entered into. Citius submitted that the traditional approach in determining whether an agreement has been formed is to consider whether there has been offer and acceptance. However, Citius relied upon the observations of Allsop J in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (Branir)[134] to the effect that, absent clear offer and acceptance, the intention issue may be satisfied by the 'manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract'.[135]

682 Citius also relied upon the principles relating to whether an informal agreement may give rise to a binding contract set out in Geebung Investments Pty Ltd v Varga Group Investments No 8 Pty Ltd.[136] Citius focused in particular on the principle, reaffirmed by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd, that '[w]hat matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe'.[137] Logos, relying upon Radaich v Smith,[138] noted that a reasonable person is not bound to assume that the words used by the parties are used in the technical sense: the relationship is to be determined by law and not by the paper label the parties choose to put on it.

683 Counsel for Citius and Logos relied upon the analysis of three kinds of uncertainty in Heydon on Contract[139] in the context of the enforceability issue: incompleteness (in the sense that an essential term or terms remain unagreed), non-finality (in the sense that there was not a final agreement on all matters) and non-clarity (in the sense that essential terms were not sufficiently clear to render the agreement enforceable).

684 Logos submitted that the use of the words 'in principle' in written correspondence usually suggested that there was no intention to create an immediately binding agreement. By contrast, Citius submitted that there was no special rule that, when used by lay people, the expression 'in principle' indicated no intention to create an immediately binding agreement, and that the cases revealed that the meaning of the expression depended upon the circumstances of each case.

685 Before oral closing submissions, I referred the parties to the decision of the Victorian Court of Appeal in Delaney v Delaney (the Delaney appeal decision)[140] which clarified the concept and relevance of incompleteness in the context of both the intention issue and the enforceability issue. I will address the significance of the Delaney appeal decision further below.

686 I also raised with the parties that many of the matters relied upon as to whether there was an intention to create an immediately binding contract were also matters that were relevant to whether there was a legally enforceable agreement. This was notwithstanding that these matters might have a different emphasis in respect of the intention issue and the enforceability issue. Counsel for the parties did not contend otherwise.

12.3 Submissions as to the application of legal principles

687 Citius submitted that, in the context of the surrounding circumstances, the parties intended there to be a binding agreement by reason of the relevant contractual communications relied upon in support of the alleged reframed agreement. Thus, they alleged that the alleged reframed agreement was a binding agreement. In light of the issues raised by Logos in relation to the intention issue and the enforceability issue, it is appropriate that I deal first with Logos's submissions and then with Citius's submissions in response.

688 As to the intention issue, Logos submitted that Citius had not established that there was an intention to create an immediately binding agreement in light of:

(1) the 2 March (4.51pm) email and the 2 March (9.52pm) email (set out in section 8.6 above);

(2) the fact that any agreement was, to the knowledge of Citius, subject to approval by the joint venture and/or Logos: a reasonable person in the shoes of Mr Tobin would not have intended to reach a concluded bargain without such approval;

(3) the fact that Logos did not have sufficient information about the Marsden Park properties, in particular, whether any alleged agreement related to the Hargreaves Property and/or the Adjoining Property;

(4) the fact that Logos did not have sufficient information about Citius's role and that there was no agreement in relation to the role Citius would in fact perform;

(5) the fact that there was no agreement in relation to when and how the fees were to be paid, including on termination; and

(6) the commercial practice whereby stakeholders provide preliminary services without any formal undertaking to generate goodwill and the commercial practice of the use of non-binding heads of agreement.

689 Logos also submitted that there was not an intention to create a binding agreement as the alleged reframed agreement was commercially absurd given that, pursuant to the alleged reframed agreement, Logos would have:

(1) agreed to pay large sums to Citius, regardless of the services performed or their value;

(2) agreed to pay significant sums above the acquisition fee, in circumstances where Citius was in the same position as Mr Hemingway;

(3) bound itself to a significant commitment (incurring obligations worth millions of dollars) from a few emails and conversations, without knowing the identity of the either of the Marsden Park properties (and relevantly the Hargreaves Property), or the characteristics of either of them at an early stage in the negotiations; and

(4) agreed to share profits across unrelated projects of the joint venture by reason of the incentive fee without requiring Citius to bring anything to the transaction that reflected the value of the alleged remuneration.

(1) the fact that Citius conceded (in [80] of its written opening submissions) that the elements of the offer and acceptance cannot be identified in this case demonstrates an absence of the necessary consensus;

(2) the 29 February conversation was a high level negotiation in which Mr Iliffe set out the fees which could be shared;

(3) the fees discussed in the 29 February conversation were uncertain and the conversation was only a step in negotiations preparatory to an offer;

(4) a reasonable person was not bound to assume that the words 'agreement' and 'agree' in the 1 March email were used in their technical sense;

(5) regardless of whether the 1 March email was sufficiently certain to constitute an offer, the 2 March (4.51pm) email was not a final and unqualified expression of assent; and

(6) the incentive fee is not capable of being calculated, as the Performance Fee under the LALVIM Agreement cannot be apportioned in relation to the Hargreaves Property. In the absence of agreement as to the method of calculation, the Performance Fee attributable to the Marsden Park project cannot simply be estimated.

691 Logos submitted that key aspects of the proposed arrangements were never clear, including what land would be purchased, what work was to be performed by each of Citius and Logos, and how the remuneration of Citius was to be structured and calculated. Relevantly, it submitted that there is no documentary or oral evidence to support the alleged reframed agreement, namely that Citius was required to provide services as required by Logos and at the sole discretion of Logos. To the contrary, the 1 March email stated that the '[al]location and sharing of the various required roles between us' would be determined in 'future discussions' i.e. further agreement.

692 Further, Logos submitted that the conduct of the parties after 2 March 2016 did not allow the Court to identify any clear mutual assent. Indeed, Logos submitted that much of this conduct was inconsistent with the alleged reframed agreement, including the draft CA (which contains terms that were never agreed), the draft PMA and the invoices issued by Citius to Logos.

693 Logos submitted that any arrangement fell into the third category of Masters v Cameron,[141] relying in particular on the 1 March email which refers to the terms 'being applied to the joint development management agreement which [w]ill be entered into by ADIA and LOGOS/Citius'.

694 As is evident, Logos relied upon matters that were relevant both to the enforceability issue and the intention issue, in particular, relating to:

(1) the parties, the properties, the role of Citius, and the fees and fee structure;

(2) the terms of the 1 March email and the 2 March (4.51pm) email; and

(3) the commercial absurdity of the terms of the alleged reframed agreement.

695 Logos submitted that if the Court was satisfied that a binding agreement had been formed, as there was no mechanism for the calculation of the incentive fee, that fee should be severed from the alleged agreement.

696 There is one other issue to address, which is relevant to issue 3. Logos alleged that the Development Representations constituted a condition precedent to any agreement (i.e. the Development Conditions) with the result that the alleged reframed agreement could not be binding until those conditions were fulfilled. Logos submitted that the Development Conditions were discussed in the 29 February conversation and that they made commercial sense in the context of the evidence, as, without Citius having control over the Hargreaves Property and having committed tenants, Citius would be in the same position as Mr Hemingway.

697 By contrast, Citius submitted that it had established there was an intention to create a binding agreement and that the alleged reframed agreement was legally binding. Citius highlighted that the alleged reframed agreement was not a development management agreement or a project management agreement, but an agreement more akin to a binding terms sheet or heads of agreement which contained all essential terms: parties, subject matter and price.

698 As to fees, Citius submitted that the fees to be paid were those set out in the 1 March email. Citius submitted that the fact that Mr Iliffe may have misdescribed the fees in the joint venture arrangements did not vitiate the alleged reframed agreement or make the fees set out in the 1 March email uncertain. In any event, Citius noted it no longer pursued fees for invoices or the project management fee and that the development management fee had been agreed with Logos.

699 As to the roles to be performed by Citius pursuant to the alleged reframed agreement, Citius submitted that:

(1) the discussion of the services which Citius could provide and/or the roles which Citius could perform in the 29 February conversation, took place in the context of the services and roles set out in the 26 February letter; and

(2) it was agreed that Citius and Logos would share the roles in circumstances where they were aware of what this involved by reason of their respective experience and understanding of industry practices.

700 In so far as Logos alleged that the allocation of roles between them was in some way incomplete, Citius submitted in oral closing submissions that the sharing of roles was at the direction/election of Logos which was inherent in, or implied from, the 1 March email. Citius submitted this was consistent with Logos being in control of the Marsden Park project and with the terms of the 1 March email which referred to an agreement by which Logos and Citius would 'determine the most appropriate [al]location and sharing of the various required roles between us...'.

701 In all the circumstances, Citius submitted that the alleged reframed agreement fell in the fourth category of Masters v Cameron.

702 As to the terms of the relevant contractual communications between Citius and Logos, and in particular the 2 March (4.51pm) email, Citius submitted that a reasonable person would have understood from that email that there was an immediately binding agreement for:

(1) Mr Tobin to share the address and other details of the Hargreaves Property; and

(2) both parties to share the roles and fees of the development if it went ahead.

703 In response to Logos's suggestion that any such agreement was commercially absurd, Citius submitted that, if the obligation to share the fees and roles was not binding, Mr Tobin would have lost leverage by disclosing confidential and commercially valuable information.

704 Finally, Citius disputed that the Development Conditions formed part of any agreement reached. They denied that the substance of the Development Conditions (being the Development Representations) were ever made as a matter of fact or that any meaning could be ascribed to the Control Representation. Further, it submitted that, while Mr Iliffe may have intended the Development Conditions, they were not consistent with Logos's pleaded case. In any event, Mr Iliffe's subjective intention was not communicated to Mr Tobin.

705 There is one issue I wish to address at this stage. As noted above, in its written closing submissions, Citius no longer claimed the project management fee under the alleged reframed agreement. This was on the basis that Logos did not receive a project management fee under the LALVIM Agreement. Citius submitted that '[a]s no such fee was earned, it is not possible for it to be shared'. As a consequence, in the FASOC and the 2FASOC, the term alleged in [6](h)(iii) (that Logos would pay to Citius the project management fee) was deleted. Nevertheless, Citius maintained that, pursuant to the alleged reframed agreement, Logos agreed to retain Citius as a joint development manager and as a joint project manager for the duration of the project.[142] Thus, in considering the intention issue and the enforceability issue, it is necessary to continue to have regard to the agreement alleged between the parties in relation to the provision of both project management and development management services and the agreement in relation to the fees to be charged for them.

706 The intention issue and the enforceability issue often involve consideration of the same matters, such as the completeness and the certainty of terms. Nevertheless, they are separate issues, each of which must be established before the court can conclude that an enforceable agreement has been reached. I will deal with these matters further below.

12.4.1 Intention to create a binding agreement

707 It is necessary to first establish whether the parties objectively intended to enter into a binding agreement. As to this principle:

(1) the search for a mutual intention to create a binding agreement is an objective one;[143]

(2) the court is entitled to take into account the commercial context and surrounding circumstances of the parties' dealings;[144]

(3) the parties' pre-contractual conduct is relevant and admissible on the issue of what each party by words and conduct would have led a reasonable person in the position of the other party to believe;[145]

(4) in cases involving agreements alleged as a result of an exchange of correspondence, or other communications between the parties, as distinct from a single document, subsequent negotiations are admissible to determining whether the parties objectively intended that a particular document be a binding contract between them;[146]

(5) as to (4) above, regard may be had to subsequent communications between the parties '(1) in order to see what was important or essential to the transaction; (2) as admissions; and (3) as probative of the parties' contractual intention';[147] and

(6) notwithstanding the objective approach, the parties' subjective intention is not always irrelevant in determining contractual intention: if two parties to an agreement shared a mutual intention that no contract should result, and each knew of this fact, then no contract would be imposed at law.[148]

708 The facts of Branir are unusual. That case involved a series of communications and draft documents over a number of years with no formal document being executed. The absence of execution of any formal document was found to be the result of the dishonest conduct of a commercial advisor to one of the parties who sought to delay formal execution. Allsop J noted in this context that the formation of a contract should not be constricted to terms of offer and acceptance, his Honour noting that business people don't always dot their i's' and cross their 't's. His Honour continued:

Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: "and we hereby agree to be bound" in this or that respect. The essential question in such cases is whether the parties' conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract.[149]

709 As noted above, questions of completeness and uncertainty often arise in relation to, and are relevant to, the intention issue and the enforceability issue. Before addressing these issues, I will address the legal principles relating to the enforceability issue.

710 First, the court must be satisfied that the parties' agreement constitutes a legally enforceable contract.

711 Second, a contract will not be binding on the relevant parties unless it is sufficiently 'certain'. As noted above, in written closing submissions counsel for both parties adopted the formulation of the principles in Heydon on Contract, insofar as they relate to the enforceability issue, namely, that there are three kinds of uncertainty: incompleteness, non-finality and non-clarity.[150]

712 Third, in determining whether the terms of any agreement are sufficiently 'certain', the courts often engage in the task of construction of the terms of the alleged agreement. Such issues are to be determined objectively by reference to the language used, the context and the purpose of the relevant agreement.[151]

713 Fourth, in the Delaney primary judgment, I noted the principle that 'where parties have entered into what they believe to be a binding agreement, the court is most reluctant to hold that their agreement is void for uncertainty...'.[152] In this regard, Mason J upheld the traditional doctrine that 'courts should be astute to adopt a construction which will preserve the validity of the contract'.[153] Identifying the tension implicit in consideration of whether a contract is uncertain, Kirby P stated that:

On the one hand there is the natural desire of courts to uphold, and not to frustrate, a contract between the parties. On the other hand is the unwillingness of courts to uphold contractual terms which are unacceptably ambiguous or uncertain. Courts will not enforce contracts with such provisions that suggest that agreement between the parties as to essential terms, even though apparent, was illusory.[154]

714 As to uncertainty in the sense of non-clarity, the test is whether a contract or its terms are 'so obscure and so incapable of any definite or precise meaning that the Court is unable to attribute to the parties any particular contractual intention'.[155] However, as Barwick CJ held in Upper Hunter County District Council:

... a contract of which there can be more than one possible meaning or which when construed can produce in its application more than one result is not therefore void for uncertainty. As long as it is capable of a meaning, it will ultimately bear that meaning which the courts, or in an appropriate case, an arbitrator, decides is its proper construction... The question becomes one of construction, of ascertaining the intention of the parties, and of applying it.[156]

12.4.3 Completeness and the Delaney appeal decision

715 The concept and relevance of incompleteness, in the context of the intention issue and the enforceability issue, was addressed directly in the recent Delaney appeal decision. The Court of Appeal emphasised that it is necessary to enquire into the question of 'completeness' at both the intention stage and at the enforceability stage, and that these two distinct enquiries may yield different answers.

716 In the context of the enforceability issue, the Court of Appeal concluded that:

(1) 'complete' describes whether or not an agreement contains the essential terms, being those terms necessary to create a binding contract, namely, 'an agreement that contains (or at least provides an adequate mechanism to ascertain) the essential terms'; and

(2) 'incomplete' refers to 'an agreement that omits or leave [sic] to be settled by later agreement one or more essential terms'.[157]

717 The Court of Appeal concluded that the second way in which the term 'complete' may be used is to describe whether an agreement 'which contains the essential terms also contains or omits inessential terms that are important enough to signal the parties' intention whether or not to be bound'.[158] The Court of Appeal noted that a failure to reach agreement on matters which, while not essential, are nonetheless ordinarily agreed upon in transactions of the class in question, tells against the existence of an intention to make an immediately binding contract.[159]

718 Thus, the Court of Appeal continued that, in the context of the intention issue:

(1) 'complete' describes 'an agreement that contains (or provides a means for identifying) enough of the important but inessential terms to signify the parties' intention to be bound'; and

(2) 'incomplete' describes 'an agreement that omits or leaves to be settled by later agreement enough of those important inessential terms to signify the absence of such an intention'.[160]

719 Thus, consistent with Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd, the greater the number and significance of the 'unaddressed important matters', the less likely it is that the court will conclude that the parties intended to create an immediately binding contract.[161]

720 The Court of Appeal noted that, if an agreement is incomplete at the enforceability issue stage, the consequence is that there is simply no contract. Further, the Court of Appeal noted that, if an agreement is incomplete at the intention issue stage, that does not necessarily mean that the parties did not objectively intend to be bound, it is just less likely that they intend to be bound as important (although inessential) terms are left for later agreement.[162]

721 The issue of completeness also seems related to the concept of finality. Logos submitted that finality related to the intention issue.[163] Heydon on Contract deals with finality in the context of validity (i.e. the enforceability issue) noting that the terms of a contract, whilst complete and clear, may lack finality insofar as they provide that the parties are not bound until they make a further agreement.[164]

722 In my view, finality is most relevant to the intention issue. This is evident from the decision in Masters v Cameron where the High Court considered whether there was an intention to create a binding agreement when that agreement was expressed to be 'subject to contact'. The High Court identified three categories of agreement.

723 The first category of Masters v Cameron is one in which the parties have reached finality in agreeing the terms of the contract and intend to be bound immediately, notwithstanding they propose to have the terms restated in a fuller form but not to different effect.[165] The second category is one in which the parties have agreed on the terms of the contract and intend no departure from such terms, yet have made performance of one or more of the terms conditional on the execution of a formal document.[166] The third category is one in which the intention of the parties is not to make a concluded bargain until they execute a formal contract.[167]

724 A fourth category has been identified in the cases, namely, 'one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms'.[168]

725 In all but the third category, there is an intention to create a binding agreement. By contrast, cases falling into the third category are not intended to have, and do not have, any binding effect on their own.[169]

726 Before addressing the authorities to which I was referred, I wish to note the ordinary meaning of the words 'in principle'. The words 'in principle' have been defined in slightly different ways, however in substance mean, an agreement in general terms although the details are not yet established.[170]

727 I have reviewed the cases referred to by the parties which consider the phrase 'in principle'. Most relevantly, in Cacace v Bayside Operations Pty Ltd (Cacace)[171] there was a dispute as to whether a heads of agreement which was prepared by lawyers was binding on the parties. Following a mediation of the dispute, one of the lawyers for the parties said words to the effect of '[l]et's prepare a handwritten minute of what has been agreed in principle to form the basis of a formal deed which can be prepared and finalised over the next week'.[172] Justice Brereton held:

Although no general rule can be stated about the phrase "agreed in principle", I think it can be said that it is a phrase often used by lawyers to indicate that, although consensus on a matter has apparently been reached, there is not yet a final agreement. "Settled in principle" is a state of consensus somewhat short of "settled".[173]

728 In GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd[174] the New South Wales Court of Appeal considered an exchange of communications which concluded with the words 'agreement in principle', but which were preceded by the words 'legally binding'. The Court of Appeal opined:

Although the words "in principle" are curious, they cannot prevail against the conclusion to be drawn from the words "a legally binding agreement". Those words convincingly indicate that the parties intended to be bound immediately. Probably the phrase "legally binding agreement in principle" was intended to mean that the parties had reached agreement on the main matters and were content to be immediately bound.[175]

729 Logos also referred to Stephenson v Dwyer[176] insofar as it follows Cacace. In that case, Biscoe AJ opined that the phrase 'in principle approval', was in fact further removed from indicating a binding contract than the phrase 'agreed in principle'.[177] The cases of Boyd v Feeney[178] and Dib v Taylor[179] are similar in that they follow Cacace.

730 In Donaldson Coal Pty Limited v Pacific National (NSW) Pty Limited, Bergin J held:

It is inappropriate to construe the words "'in principle' agreement" without placing them in the context in which they appear and the commercial setting in which the parties were operating. It is also necessary to analyse the nature of the transaction in which the parties had reached such an agreement. Much will depend upon the individual circumstances of each case as to whether those words demonstrate that the parties had or had not reached a consensus on the essential terms of their bargain and whether they intended to be immediately bound by them.[180]

731 With respect I agree with the comments of Bergin J. I consider that the assistance to be gleaned from these cases is limited: the use of the words 'in principle' must be construed in their context.

732 In summary, I have concluded that Citius has not established on the balance of probabilities that the parties intended to enter into a binding contract (i.e. the alleged reframed agreement) by reason of the relevant contractual communications.

733 First, the language of the written communications said to give rise to the alleged reframed agreement (in particular, the 2 March (4.51pm) email when considered in light of the 29 February conversation and the 1 March email) do not establish any intention to enter into an immediately binding agreement.

734 Second and relatedly, any such agreement was relevantly 'incomplete' in that the essential terms, or enough of those important but inessential terms, were not 'addressed', to adopt the language from the Delaney appeal decision. As a result, Citius has not established any intention to enter into an immediately binding agreement. The relevant unaddressed matters related to:

(1) the role Citius would perform;

(2) the structure and calculation of the incentive fee;

(3) the structure of the payment of fees (including when payment or payments were to be made and what was to happen on termination); and

(4) related to (1) to (3), a number of essential terms, or a number of important but inessential terms, to be included in any development management or project management agreement for a project such as the development of one or both of the Marsden Park properties. (I will address the nature of the terms in [734](4) shortly).

735 For similar reasons, I consider there was non-finality in respect of these terms as they were not agreed in the relevant contractual communications: further discussion and/or agreement was required and/or intended.

736 In my view, it is important to note that, in considering these issues, a number of aspects of the alleged reframed agreement were said by Logos to point against any intention to enter into an immediately binding agreement. Consistent with my comments in [719] above, the more issues in respect of which there is incompleteness and/or non-finality, the less likely it will be for the court to conclude that there exists an intention to create an immediately binding contract i.e. they have cumulative effect. This seems true of this case.

737 Further, although it is unnecessary to do so, I have concluded that the alleged reframed agreement was not a legally enforceable agreement.

738 First, there was 'incompleteness' in the sense that the essential terms were not agreed or there was no adequate and/or enforceable mechanism to ascertain them. I refer to the matters in [734] above. I will address the essential nature of the terms in [734](4) shortly. Second and for similar reasons, there was uncertainty in the sense that the essential terms were not agreed or there was no adequate and/or enforceable mechanism to ascertain them. I refer again to the matters in [734].

739 Before addressing these issues further, I wish to say something about the nature of the alleged reframed agreement. The alleged reframed agreement had a number of components, relevantly:

(1) Citius would disclose the details and relevant information relating to the Marsden Park properties;

(2) Citius would play a role in the due diligence process, during which time Logos would determine whether to purchase one or both of the Marsden Park properties; and

(3) in the event that Logos or an entity nominated by Logos purchased one or both of the Marsden Park properties, Citius would act as the joint development manager and joint project manager for the Marsden Park project in return for the fees set out in the 1 March email.[181]

740 There are some further issues I wish to note at this stage. First, as set out in section 10.3 above, in deciding whether to purchase one or both of the Marsden Park properties, the joint venture would be able to consider whether it was appropriate to do so in light of the relevant contractual communications (including whether they were binding or not).

741 Second, it was fundamental to the enforceability of the alleged reframed agreement that the essential terms of any project management agreement and/or development management agreement had been agreed at the time the alleged reframed agreement was entered into, or that there was an adequate mechanism to ascertain those terms.

742 Third, in relation to the intention issue, the number and nature of the essential or important terms in respect of any agreement depends upon the nature of the agreement being entered into. For example, in the case of the sale of personal or real property, the essential terms are parties, price and property. However, in more complex agreements, there may be additional essential terms. This is because the question of whether a term is essential depends upon the nature of the agreement and the facts of each case.[182]

743 In my view, project management agreements and/or development management agreements may be of such a kind. This is particularly so depending upon the nature of such agreements, the nature of the services to be provided pursuant to them, the period of time over which services are to be performed and the sums of money payable.

744 This is consistent with the evidence of Mr Incoll set out in section 10.1 as to the key commercial terms usually included in such agreements. The substance of Mr Incoll's evidence was that the key commercial terms were, namely:

(1) the scope of works;

(2) the details of what fees are to be paid , how they are calculated and how and when they are paid;

(3) the circumstances in which variations to such agreements are allowed and how the fees are to be varied as a result;

(4) the circumstances in which such agreements are terminated and how fees are to be adjusted or finalised as a result; and

(5) the resources to be provided by the service provider.

745 Indeed, I have formed the view that, in the context of a project such as the development of the Hargreaves Property or the Adjoining Property, which would last in the order of four years and involve the investment of millions of dollars, each of the terms in [744](1)-(4) above were essential terms. At the very least, I have formed the view that each of them were important terms, and relevantly, important enough to signal the parties' intention whether or not they intended to be immediately bound.

746 Fourth, in oral closing submissions, counsel for Logos submitted that Citius were offering a package to Logos: the location of a property, control over the property and tenants for the developed property, issues of control and tenants had to be confirmed in the period after the exchange of correspondence. This submission was made in support of the contention that, among other things, it was too early to form an intention to create a binding agreement by 2 March 2016. In short, I am unable to accept that submission. I refer to my conclusion that Citius did not make the Tenant Representation and my comments in [375]-[377] in section 7.5 and in [408] in section 8.3.

747 Fifth and importantly, as is evident, I have referred to and made findings in relation to the unexpressed actual or likely subjective intention of Mr Tobin and Mr Iliffe in these reasons. This was based on the evidence led and the submissions as to credit and reliability based on that evidence. Nevertheless, I wish to state at the outset that I have considered the intention issue and the enforceability issue, consistent with legal principle, having regard to the objective manifestation of their intention and have not had regard to any unexpressed actual or likely subjective intention.

12.5.2 Relevant context/surrounding circumstances

748 Citius submitted that, in order to determine whether a binding contract was reached, it was necessary for the Court to have regard to the context in which the alleged reframed agreement was reached. Relevantly, in section C of its written closing submissions, Citius submitted that the Court should have regard to the following context: the relevant experience of Citius and Logos in the market in which they were operating, the circumstances in which Citius became aware of the Marsden Park opportunity and the matters mutually known to each of them by 2 March 2016, specifically with regard to the matters communicated between Citius and Logos in February 2016. Many of the matters relied upon in section C were also relied upon by Citius in D.1 of its written closing submissions as 'relevant surrounding circumstances'.[183] Citius relied upon four principal circumstances.

749 First, Citius referred to the business of each of Citius and Logos (as the parties to the alleged reframed agreement). Citius submitted that by early 2016 each of them:

(1) operated its business as a development manager and project manager concentrating almost exclusively on the industrial and logistics part of the property sector; and

(2) through each of Mr Tobin and Mr Iliffe (who were known to each other), had significant experience in such developments and understood the role of a development manager and a project manager (the experience matters).

750 Logos did not dispute that the experience matters formed part of the 'undisputed commercial context' of the alleged reframed agreement.[184] However, Logos also relied upon the nature of development management and project management services (as set out in [86] above) as part of the 'undisputed commercial con[185]t'.185 Citius accepted that the description of the nature of these services by Logos was accurate. For my part, I consider that that the relevant context and surrounding circumstances included the nature of development management and project management services set out in [86] above.

751 Second, Citius referred to the fact that the Marsden Park opportunity was not readily known to the market, including the address and the terms upon which Hargreaves might sell its interest (the Marsden Park details) and that these details were commercially valuable to Citius. For the most part, the matters relied upon for this proposition consisted of the evidence of Mr Tobin. Logos disputed that the Marsden Park details (particularly the address of the Marsden Park properties) were commercially valuable.

752 On the evidence before me, Citius's knowledge of the address of the Hargreaves Property had limited commercial value in light of the information provided by Mr Hemingway in the 22 February letter which referred to the street name and the size of the Hargreaves Property. I acknowledge that the work done resulting in the feasibility study had some limited value. However, I note that no evidence was led that it had any particular value. So too, as to the terms upon which Hargreaves might sell its interest, there is no evidence that this had any particular value. In this context, I refer to my finding that Citius had not reached any verbal agreement with Hargreaves.

753 In all the circumstances, I consider that the Marsden Park details were of limited commercial value. This is notwithstanding, as set out above, that Mr Iliffe appeared to agree that he understood that Mr Tobin would lose leverage in his discussions with Logos if he disclosed the details of the Marsden Park properties. In my view, some, but limited leverage would be lost. I refer to my comments in [791] below.

754 Third, by late February 2016, Citius submitted that it was aware that Logos was interested in the opportunity because it might be suitable for the LALV Trust, and that Logos would ordinarily perform development and project management services in-house. Logos also submitted, in substance, that the fact that Logos was expressing interest on behalf of the joint venture was part of the 'undisputed commercial context'.[186] As a result, I will proceed on the basis that the relevant context or surrounding circumstances included these matters.

755 Logos submitted that the terms of the joint venture agreements between ADIA and Logos, including the fees payable under the LALVIM Agreement and the prima facie requirement for the Pro Forma Agreement also formed part of the 'undisputed commercial context'.[187] While these matters might form part of the context, in my view, their relevance as to each legal issue varies. As to the relevance of the terms of the joint venture agreements relied upon by Logos, in relation to the intention issue, these were not objectively known to both parties at the time as Mr Tobin only knew what Mr Iliffe told him about these agreements. For example, I refer to my comments in section 10.3 above. However, I acknowledge that the terms relied upon by Logos (not disclosed to Mr Tobin) may be relevant to the enforceability issue, in particular, the calculation of the incentive fee.

756 Relatedly, Citius submitted that Logos was aware that Citius was not a real estate agent, and was not interested in simply disclosing the Marsden Park details for an acquisition fee. Rather, Citius wanted to secure an ongoing role in the development of the Hargreaves Property and the Adjoining Property (if it were developed). I am willing to accept that this formed part of the context leading up to the relevant contractual communications. However, based on the evidence before me, I consider it is more accurate to say that Citius was unwilling to disclose the Marsden Park details before agreement had been reached on the matters discussed in the 29 February conversation (including an ongoing role in the development of the Marsden Park opportunity). In this regard, I note my findings in [370] and [752]-[753] above.

757 Fourth, Citius submitted that Mr Iliffe was aware that keeping the details of the address and other information in respect of the Marsden Park properties confidential was important to Mr Tobin because once revealed, Mr Tobin's bargaining position was far weaker. I am unwilling to accept such a general statement in light of my findings in [752]-[753] above.

758 Further, in so far as it was submitted that a reasonable person in Mr Iliffe's position should have been aware that a reasonable person in Mr Tobin's position would have been reluctant to disclose the Marsden Park details without a concluded agreement being reached, I refer to my findings in [99]-[104] above. In those paragraphs I have found that Mr Tobin was prepared to disclose all the information he had about the Marsden Park opportunity without a binding agreement in place with M&G.

759 Before leaving the relevant context and/or surrounding circumstances, I note that Logos submitted that the 'unchallenged commercial context' included two 'required approvals', namely:

(1) approval under the Unitholders' Agreement as set out in section 3.3 above; and

(2) approval of the special majority of directors (of Logos) referred to in 3.3 above.

760 Citius submitted that it was not relevant whether approval to enter into a development management agreement (or presumably a project management agreement) was subject to joint venture approval, and whether anybody in Mr Tobin's position would have known that no binding agreement could have been reached without such approval first being given. In any event, Citius submitted that even if Mr Tobin was aware of such a requirement, the Pro Forma Agreement provides that Logos DM may subcontract development management and project management services to a third party.

761 In my view, what is relevant from an objective contractual perspective is what both parties knew at the time of the alleged reframed agreement. I refer to my findings in section 10.3 above.

762 As noted above, Citius referred to the negotiations in respect of Citius and Hargreaves in relation to the Hargreaves Property. To the extent that the details of those negotiations were not made known to Logos, I am unsure of their real relevance to the intention issue or the enforceability issue. I will address this in the next section. In any event, Citius sought to rely upon them to submit that by 20 February 2016, Citius had reached 'final agreement' with Hargreaves, by reference to the 20 February 2016 email from Citius to M&G. As set out above, I do not accept that Citius had reached any final agreement by this time.

12.5.3 The relevant pre-contractual communications

763 Citius relied upon a number of pre-contractual communications between Citius and Logos including the 22 February letter, notification of the M&G decision, the 25 February letter, the 26 February conversations, the 26 February letter and the 26 February Citius email. I have addressed the details of these communications earlier in these reasons. Relevantly, I have concluded as follows.

764 First, the 22 February letter, by way of introduction to Logos, identified the size of the Hargreaves Property and the street in which it was located. I consider that this is a relevant pre-contractual communication.

765 Second, the M&G decision made known to Citius by the 24 February M&G email. While this is relevant context given that it appears to be the reason why Citius pursued Logos in late February, I do not consider it is a relevant pre-contractual communication.

766 Third, the 25 February letter, which set out further information in relation to the Marsden Park opportunity, including a commercial summary, the proposed partnership/commercial structure between Citius and the Investor (with Citius to be appointed the development and project manager), and which identified that the specific roles and fees would be described in detail in any future agreement. It also referred to Citius being in the 'final stages of negotiation' to purchase the Marsden Park properties. The 25 February letter noted that upon receipt of 'your advice [of general agreement to the proposed structure] and nomination of your client, we will provide further details of the site and specific terms of engagement'. I consider that this is a relevant pre-contractual communication.

767 Fourth, as to the 26 February conversations, I refer to my findings in section 6.2. I consider that these conversations are relevant pre-contractual communications.