Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd

Introduction 1 On 29 June 2016, I gave judgment in relation to certain questions which were tried separately: Colin R Price & Associates Pty Ltd v Four Oaks Pty Ltd [2016] FCA 764 (the Reasons). These reasons should be read together with the Reasons. I adopt in these reasons the abbreviations used in the Reasons. 2 These reasons deal with the outstanding matters in the proceeding (other than costs). Specifically, the outstanding matters are: (a) the matters referred to in paragraphs [336] and [337] of the Reasons; (b) whether any declarations are to be made and the form of any declarations; (c) whether any order made on Grovan's claim is to be against Twentieth Green alone, or other respondents as well; (d) interest. 3 Following the publication of the Reasons, each party provided written submissions and proposed orders to give effect to the Reasons. While some orders to give effect to the Reasons were common ground, it was apparent that there was a dispute about the matters referred to in (b) and (c) above. It was unclear whether there was a dispute regarding (d). Further, the matters referred to in (a) above remained to be tried. 4 The matter was listed for mention, at which it was ordered that the outstanding matters referred to above be set down for trial; the applicants file and serve any further affidavits in relation to the outstanding matters by 15 July 2016; the first to seventh respondents file and serve any further affidavits in relation to the outstanding matters by 20 July 2016; the applicants file and serve any reply affidavits by 25 July 2016; and the parties file and exchange submissions on the outstanding matters by 27 July 2016. 5 The applicants filed an affidavit of Mr Price dated 15 July 2016 (Mr Price's fourth affidavit). The first to seventh respondents did not file any further affidavits. At the trial of the outstanding matters on 29 July 2016, Mr Price was cross-examined.

The six matters referred to in paragraphs [336] and [337] of the Reasons 6 The first of these matters is a claim by Grovan for $16,800 which may have been deducted for defects rectification (see the Reasons, [210], [309] and 336). Grovan has now indicated that it does not press its claim for this amount. It is, therefore, unnecessary to deal with this. 7 The second matter is a claim by Grovan for amounts totalling $20,915 which were paid by Twentieth Green during February 2008 and debited to Grovan (see the Reasons, [207], [311], 336). Grovan has now indicated that it does not press its claim for this amount. It is unnecessary to deal with this claim. 8 The third matter is a claim by Grovan for approximately $7,000 in unpaid distributions (see the Reasons, [208], [312], 336). 9 As set out in the Reasons at [208], Mr Stephen Power was asked during cross-examination about the last line in the Unit Holders' Loan Account. It was pointed out that it did not represent the percentages of each unit holder and that, while Grovan's percentage interest was 10%, the last line represented only 9.5%. On this basis it was put to him that a rebalancing would need to be done so that everyone received the correct percentages. He responded, "If we were going to square it off, yes, I would imagine so". It was put to him that this would mean that Grovan would receive an additional $7,129 and he responded, "If you say so, yes". 10 In his fourth affidavit, Mr Price stated that he had no discussion or communication with any of the directors or unit holders of Twentieth Green in which he agreed that Grovan's distribution should be calculated on anything other than its full 10% unitholding. I accept this evidence. 11 Grovan submits that the Unit Holders' Loan Account purports to contain a reconciliation of the unit holders' entitlements; the final line of the table purports to show "Cash & Benefit taken (after return of capital) 29.01.2013"; it is intended to demonstrate the benefits taken by each unit holder in proportion to its unitholding; an arithmetical error has occurred by which the unit holders did not receive the correct amounts; Grovan ought to have received $142,582.16 (being 10% of the amount in the total column) instead of the amount specified in the table for Grovan ($135,573.82); the claim is for $7,008. 12 The first to seventh respondents submit, in relation to the Unit Holders' Loan Account: (a) it was not prepared by Mr Stephen Power and any statement made by him in cross-examination about the numbers in it must therefore be treated with caution; (b) none of the numbers in the "Cash & Benefit taken (after return of capital)" line neatly squares with the percentage of the relevant unit holder; (c) NJC had the same percentage of units as Grovan and yet it was paid less than Grovan; there must be an explanation for this - the Court could hardly conclude that Mr Stephen Power (the investor closest to the finances) would have allowed his company to be underpaid; (d) the reconciliation for the loan amounts is not as simple as might have been hoped; many years after the event, there is no obvious explanation for why that is so; the Court could now do no more than speculate; the only conclusion the Court could safely draw is that there was an explanation but it has been lost. 13 In my view, Grovan has made out its claim for the amount of $7,008. The Unit Holders' Loan Account shows that it has only been paid 9.5% of the total proceeds whereas it should have been paid 10%, being its percentage interest. It has therefore been underpaid $7,008. That the amounts paid to the other unit holders did not reflect their percentage interests is not to the point; it may be that other adjustments are required, but that is not a matter that is before the Court. Mr Stephen Power during cross-examination did not provide an explanation for the payment to Grovan of only 9.5% rather than 10% of the proceeds. The first to seventh respondents, having had the opportunity to put on further evidence, have not filed any further evidence. In the absence of an explanation for the discrepancy, I conclude that Grovan has been underpaid the amount of $7,008. 14 The fourth matter concerns the amount of $52,670 which was paid by Twentieth Green to Resort Systems on 15 December 2009 (see the Reasons, [221], [316], 336). Grovan's claim is for $5,267, being 10% of this amount. 15 As set out in the Reasons at [221], Mr Stephen Power was taken during cross-examination to the general ledger for the Unit Trust for the 2009-2010 financial year (Ex A21, tab 5). One of the last payments before the Twentieth Green bank account was closed was a payment of $52,670 to Resort Systems on 15 December 2009. The same amount appeared on page 6 of the ledger in the defects account. Mr Stephen Power said that he did not know why Resort Systems was essentially receiving the balance of the money that was in the Twentieth Green bank account. He said that he "imagined" that it was the money earmarked towards the GST responsibility of Gruboc, and that it was "parked" in Resort Systems. He said that Resort Systems "certainly wasn't entitled" to the money. 16 In his fourth affidavit, Mr Price stated that he had no discussion or communication with any of the directors or unit holders of Twentieth Green in which he agreed that this payment should be made to Resort Systems. I accept this evidence. 17 Grovan submits that no proper basis for the payment to Resort Systems has been disclosed in the evidence; Mr Stephen Power admitted in cross-examination that Resort Systems "certainly wasn't entitled to it"; the respondents have been given the opportunity to explain the payment and to demonstrate that it was made for proper purposes and have elected not to do so; the Court should infer that there was no proper basis. 18 The first to seventh respondents submit that: (a) the Court cannot be certain that the payment was in fact made to Resort Systems; it was one of a series of payments made at the end of the Project; at least one of these payments was incorrectly recorded in the accounts; (b) Mr Stephen Power's "best guess" was that this was an amount paid on behalf of (or possibly, directly to, if the accounts are inaccurate) Gruboc; (c) Mr Stephen Power gave evidence of the Gruboc GST issue; while the evidence was far from clear, it appears that the GST liabilities of Gruboc and Twentieth Green had been wrongly calculated, meaning that Twentieth Green was entitled to refunds for overpaid GST and that Gruboc had GST liabilities for which it had not made provision; the result is that funds were transferred from Twentieth Green to Gruboc (probably, but not certainly, through Resort Systems); (d) however, it must be remembered that this was simply Mr Stephen Power's "best guess" of what happened; when giving this evidence, he had no notice that this payment was to be an issue in the dispute (and he was not the person who prepared Twentieth Green's accounts); (e) in those circumstances, the Court should not be reasonably satisfied what the payment was for, or if it was in any way improper; Grovan has failed to discharge its burden of proof; (f) as a matter of principle, when assessing whether compensation is payable in respect of a breach of trust arising in a commercial transaction, it is important to recognise the distinction between the application of basic trust principles and those specialist principles which may apply only to traditional trusts: see Target Holdings Ltd v Redferns [1996] 1 AC 421 at 435, 438-439; Canson Enterprises Ltd v Boughton & Co (1991) 85 DLR (4th) 129 at 163; Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at [35]-[36], [45]-[50]; Wellington Capital Limited v Australian Securities and Investments Commission (2014) 254 CLR 288 at [13]; (g) applying a commercial and common sense view here, it is apparent that Grovan has not made a real loss; the evidence is that different trusts were used for different investments and permitted the unit holders to take greater or lesser shares of projects; but fundamentally each trust was an embodiment of the syndicate members; a loss in one trust, more than made up for by a countervailing gain in another trust, does not constitute a true loss; (h) the evidence showed that Grovan had larger interests in other trusts which the parties had established for their ventures in Coburg and Rosanna; it is apparent that Grovan received its entitlement in those other ventures; (i) the Court should not feel any sense of actual persuasion that Grovan suffered any loss by reason that this sum was paid away by Twentieth Green in satisfaction of a GST liability. 19 In my view, Grovan has established its claim for the amount of $5,267. The evidence establishes that the amount of $52,670 was paid by Twentieth Green to Resort Systems (a company associated with three of the unit holders). In the absence of satisfactory explanation, the payment of this amount to Resort Systems does not appear to be a proper payment for the purposes of the Project or the unit trust. Mr Stephen Power's evidence about this payment, to the effect that it was "parked" in Resort Systems before being paid to Gruboc to pay for GST liabilities, was speculative. The respondents have had the opportunity to put on further evidence but have not done so. There is no satisfactory evidence that the amount was paid by Resort Systems to Gruboc, which is the premise of many of the first to seventh respondents' submissions. In the circumstances, no satisfactory explanation has been provided for why an amount of $52,670 was paid by Twentieth Green to Resort Systems. I therefore conclude that Grovan has made out its claim for $5,267. 20 The fifth matter concerns a payment of $60,000 by Twentieth Green to Gruboc (see the Reasons, [222], [317] and 336). Grovan's claim is for 10% of this amount, namely $6,000. 21 As set out in the Reasons at [222], Mr Stephen Power was taken during cross-examination to the 2008-2009 accounts of the Unit Trust (Exhibit SGP-2) which showed an expense for consultancy fees in the amount of $60,000. He was also taken to the accountants' notes (Ex A21, tab 21) which referred to a "Mgr Fee to Gruboc" of $60,000. He was asked why Twentieth Green was paying $60,000 to Gruboc and said he did not know. He said he assumed that this was Mr Robert Power's wages, but he did not know the mechanics. 22 In his fourth affidavit, Mr Price stated that he had no discussion or communication with any of the directors or unit holders of Twentieth Green in which he agreed that a consultancy fee of $60,000 should be paid to Gruboc. I accept this evidence. Mr Price accepted during cross-examination that Grovan had a 15% interest in the Gruboc unit trust (which related to the Bell Street, Coburg project). 23 Grovan submits that the accountants' note relating to this item (Ex A21, tab 21, item 8) is dated 4 December 2009, suggesting that this was recorded at the time the 2009 accounts were being prepared; Mr Price's evidence that he had no discussion by which he agreed to this expense must be correct because by the date of the accountants' note he was no longer involved with the unit holders or the Project. Grovan also submits that no proper basis for this expense has been disclosed in the evidence; the respondents have been given the opportunity to explain the entry and to demonstrate that it was made for proper purposes but have elected not to do so; the Court should infer that there is no proper basis. 24 The first to seventh respondents submit that: (a) the issue of Mr Robert Power's wages has already been addressed at [223] of the Reasons where the Court considered the sum of $70,000 paid to Mr Robert Power's company; Mr Stephen Power's evidence was that Mr Robert Power was commissioned by the syndicate members to go out and find sites for other projects and that he was paid a fee for this work; the Court accepted this evidence and found that no contrary evidence was given by the applicants (at [223]); sub silentio the Court has rejected Grovan's claim that this amount was wrongly paid; (b) in light of the absence of any evidence to contradict what Mr Stephen Power said about the $60,000 payment it should be resolved in the same way as the payment referred to at [223] of the Reasons; (c) there is an air of unreality about Grovan's attempts to claw back this sum; it is clear that the syndicate members commissioned Mr Robert Power to go out and find sites for other projects - it was only if the syndicate members succeeded in locating another property that they then set about the administrative tasks of acquiring an off-the-shelf company and unit trust; before those events occurred, Twentieth Green was the only existing vehicle that those syndicate members had available to them to carry out their collective activities; (d) even if the Court were to find that the payment should not have been made to Gruboc, upon application of the principles discussed in the submissions relating to the fourth matter, the Court should not be persuaded that Grovan made a loss as a result of this payment. 25 In my view, Grovan has not established that it has suffered a loss in relation to this matter. Addressing the matter in a practical and common sense way, given that Grovan was also a unit holder in the Gruboc unit trust, and its percentage interest in that unit trust was greater (15%), it (Grovan) obtained the benefit of the payment made by Twentieth Green to Gruboc. I do not think the evidence establishes that the payment was made for Mr Robert Power's wages. Mr Stephen Power's evidence was merely that he assumed this to be the case. But the evidence does indicate that the amount was paid by Twentieth Green to Gruboc, which was the trustee of a unit trust in which Grovan held a 15% interest. In these circumstances, it is not established that Grovan suffered a loss. 26 The sixth matter concerns CRP's claim that certain amounts were paid to Twentieth Green for work done by CRP and CRP has not been paid these amounts by Twentieth Green (see the Reasons, [228], [323] and [337]). The total of these amounts is $75,300. Counsel for the applicants accepted at the hearing that Grovan had enjoyed 10% of the benefit of this amount and an allowance should be made for this. 27 In the Reasons at [228], I stated that: In the applicants' closing written submissions they refer to Refam Investments receiving and being invoiced for extras in relation to units 18 and 19 and Mr Rice receiving extras for units 16 and 17. The applicants submit that there is no record of the accounts for those amounts being paid by Twentieth Green to CRP and that an allowance should be made in favour of CRP to this extent. Mr Stephen Power said during cross-examination that he did not know if the accounts had been paid. 28 In his fourth affidavit, Mr Price stated that: (a) he recalls that additional works were done by CRP on the four apartments at the request of Mr Reynolds and Mr Rice (the additional works); given the lapse of time he is unable to recall what exactly the works were; (b) he did not submit an invoice to Twentieth Green for the additional works as he was acting on the basis that Mr Reynolds had told him that he should just get on with the job and that they would sort it out at the end; (c) prior to documents being produced by the respondents shortly before or during the trial, he was not aware that Twentieth Green had issued invoices to Mr Reynolds and Mr Rice for the additional works or that it had been paid $75,300 for those works; (d) when he went to see Mr Reynolds on or about 11 December 2009 to discuss the shortfall that CRP had suffered on the Project, the shortfall included the costs that CRP had spent in respect of the additional works as well as other expenditure; (e) in his letter dated 14 December 2009 (Ex CRP-9) in which CRP submitted a variation order to Twentieth Green, the amount of $678,634 was calculated based on the entirety of the expenditure CRP had incurred on the Project less progress payments it had received in respect of the Project; he believes that the amount incurred by CRP for the additional works on the four apartments was included in that claim; (f) notwithstanding that Twentieth Green received payment from Mr Reynolds and Mr Rice for the additional works, CRP has never received any payment from Twentieth Green for those works. 29 In oral evidence in chief at the hearing on 29 July 2016, Mr Price said that CRP has not been paid for the additional works by Mr Rice, Mr Reynolds or their companies. I accept the affidavit and oral evidence of Mr Price in relation to the additional works and payment for them. Mr Price accepted during cross-examination that he had conversations with Mr Reynolds and Mr Rice about the additional works. He also accepted that the letter of demand dated 26 October 2012 (Ex R7) was addressed to Mr Reynolds at Four Oaks rather than at Refam Investments. Likewise, the letter was addressed to Mr Rice at ESA rather than at the companies that purchased the apartments. 30 CRP submits that the accounts of Twentieth Green show that additional work was done by CRP for the apartments purchased by Mr Rice and Mr Reynolds; that the evidence shows that Twentieth Green invoiced Mr Reynolds's company for the work done on his apartments (but no invoice has been disclosed for the work on Mr Rice's apartments); the evidence is clear that Mr Rice and Mr Reynolds paid Twentieth Green for that work. It is submitted that there are no payments out of the Twentieth Green bank account, or entries in its ledgers, that suggest that it paid the amount to CRP. It is submitted that Twentieth Green and the unit holders sought and received payment for works done by CRP that were additional to the scope of works contracted for; those funds were properly payable by Mr Reynolds and Mr Rice to CRP not Twentieth Green; Twentieth Green was obliged to pay over to CRP the moneys it received for the extra work as moneys had and received before undertaking any final distribution of profits. 31 The first to seventh respondents submit that unit 16 was purchased by GJR Corp Pty Ltd and unit 17 was purchased by GJR Investments Pty Ltd, both companies associated with Mr Rice. They submit that it would appear that oral contracts were made between CRP, on the one hand, and Refam Investments, GJR Corp Pty Ltd or GJR Investments Pty Ltd, on the other. They submit that the terms of those contracts were that CRP would perform certain works and the owners would pay for those works; if CRP has not been paid these amounts, its remedy lies against the owners, none of which is a party to the proceeding. 32 In my view, CRP has made out its claim against Twentieth Green for $75,300 for the additional works carried out in relation to units 16, 17, 18 and 19. There did not appear to be any dispute that Twentieth Green received payments totalling $75,300 for these additional works. Senior counsel for the first to seventh respondents said that he did not wish to make submissions to the contrary. I therefore accept that Twentieth Green received payments totalling $75,300 for the additional works carried out by CRP on the four apartments. The evidence also establishes that CRP has not been paid for these works by Twentieth Green or by Mr Rice, Mr Reynolds or their companies. I do not accept the first to seventh respondents' contention that CRP's remedy lies in suing Refam Investments, GJR Corp Pty Ltd and GJR Investments Pty Ltd on the basis that any contract to carry out the additional works was between CRP and those companies. I think it more plausible to infer that Twentieth Green agreed to carry out the additional works and engaged CRP to do this work. This is consistent with the fact that Refam Investments, GJR Corp Pty Ltd and GJR Investments Pty Ltd paid Twentieth Green for the additional works. It is also consistent with the arrangements that applied where purchasers of other apartments had additional work carried out. Thus, the situation is one where CRP (it is to be inferred, at the request of Twentieth Green) carried out additional works on the four apartments; the owners of the four apartments paid Twentieth Green $75,300 for the additional works; and Twentieth Green has not paid CRP for the additional works. In these circumstances, CRP is entitled to be paid the sum of $75,300 by Twentieth Green. As the amount of $75,300 was received and retained by all of the unit holders, Grovan has had the benefit of 10% of this amount, namely $7,530. In recognition of this, it is appropriate that the amount otherwise payable to Grovan be reduced by $7,530.

Summary in relation to claims 33 It follows from the Reasons and the conclusions reached above that Grovan has succeeded in establishing its claim for the following amounts: (a) the amount of $100,141, as referred to in the Reasons at [335]; (b) the amount of $15,000, as referred to in the Reasons at [335]; (c) the amount of $7,008, discussed above; (d) the amount of $5,267, discussed above. 34 This produces a total of $127,416, from which $7,530 is to be deducted, as discussed above. The end result is that Grovan has established that it is entitled to be paid $119,886. 35 Further, CRP has established that it is entitled to be paid the sum of $75,300 by Twentieth Green.

Whether any declarations are to be made and the form of any declarations 36 The applicants seek declarations in the following terms: A. In requiring the Second Applicant to enter into the First Payment Authority and the Second Payment Authority (collectively, Payment Authorities) referred to in paragraph [4] of the Reasons for Judgment delivered 29 June 2016 (Reasons) as the condition for the provision of funds by Resort Systems Pty Ltd to the First Applicant, the Seventh Respondent did engage in conduct that was, in all the circumstances, unconscionable, in contravention of section 51AC of the Trade Practices Act 1995 (Cth) (TPA) and contrary to general law principles of unconscionability. B. In relying upon the Payment Authorities the Second to Seventh Respondents did engage in conduct that was, in all the circumstances, unconscionable, in contravention of section 51AC of the [TPA] and contrary to general law principles of unconscionability. C. Each of the First to Sixth and Eighth Respondents: (a) aided, abetted, counselled or procured and were directly or indirectly party to the unconscionable conduct of the Seventh Respondent referred to in declaration A above; and (b) pursuant to section 75B of the TPA were persons involved in the conduct of the Seventh Respondent which was in contravention of section 51AC of the TPA. D. The Payment Authorities are void and unenforceable. 37 In the Reasons, I dealt with the Payment Authorities at [277]-[306]. I concluded (at [287]-[288]), that the Payment Authorities were not executed or signed by or on behalf of Grovan and therefore the company is not bound by the documents. Although it was unnecessary to consider the unconscionability contentions, I expressed the view (at [290]) that the facts as found established that it would be unconscionable for the first to seventh respondents to rely on the Payment Authorities. I said that this provided an alternative basis for the conclusion that Grovan is not bound by the Payment Authorities. There were also specific conclusions that Twentieth Green's conduct was, in all the circumstances, unconscionable (see the Reasons at [300], [301]). 38 The purpose of considering those issues concerning the Payment Authorities was to determine Grovan's claim that it had not been paid its proper entitlements in relation to the Project and the unit trust. The way in which the issues arose is described in the Reasons at [277]. The consequence of the above conclusions in relation to the Payment Authorities was that I concluded that Grovan had made good its claim for $100,141. 39 In these circumstances, I do not think there is any utility in making the first, second or fourth declarations sought by the applicants in relation to the Payment Authorities. It is sufficient to make an order for payment of the relevant amount to Grovan. Further, the conclusions in relation to the Payment Authorities are set out in the Reasons. 40 Insofar as the applicants seek a declaration relating to the individuals and unit holders (the third declaration sought by the applicants), I do not think it would be appropriate to make such a declaration. Grovan's pleaded case in relation to the Payment Authorities did not allege accessorial liability against the individuals or unit holders (see paragraphs 12 to 12J of the amended fast track reply and defence to cross-claim.) This is to be contrasted with other parts of the applicants' case which did allege accessorial liability (see, eg, paragraph 30 of the Fast Track Statement). It is true that the Originating Application seeks (in paragraph 1(d)) a declaration that the individual respondents aided, abetted, counselled or procured, or were knowingly concerned in, or party to, the conduct of the corporate respondents that was in contravention of ss 52 and 51AC of the Trade Practices Act. But I think this must be read together with the pleadings which indicate the part of the applicants' case to which this declaration relates. For the reasons indicated, Grovan's case in relation to the Payment Authorities did not include allegations of accessorial liability against the individuals and unit holders. 41 Accordingly, I will not make any of the declarations sought.

Whether any order made on Grovan's claim is to be against Twentieth Green alone or the other respondents as well 42 The applicants submit that: (a) as a matter of trust law, the beneficiaries of the trust would be obliged to reimburse the trustee to the extent that Twentieth Green is ordered to pay Grovan; (b) if the trustee was unwilling to bring proceedings requiring those beneficiaries to do so, Grovan would be entitled to be subrogated to Twentieth Green's rights as trustee and to bring proceedings against the other beneficiaries requiring them to indemnify Twentieth Green for the amount it is obliged to pay Grovan; the result would be that those payments would be made to Grovan; (c) the trustee and all of the beneficiaries of the trust are before the Court and have had a full opportunity to be heard; (d) this is a proper case for the Court to make its monetary orders for payment against the trustee and each of the beneficiaries. 43 The first to seventh respondents submit that the order relating to payment of money to Grovan should not be made against all the respondents jointly and severally (as sought by Grovan); only Twentieth Green should be ordered to pay the relevant amount. They further submit: (a) in relation to the sum of $100,141, Twentieth Green alone paid this to third parties; it did so pursuant to the Payment Authorities that the Court found were unenforceable; (b) in relation to the sum of $15,000, the Court held that if there was a valid claim for $15,000 for defects rectification, it lay against CRP, not Grovan; (c) in relation to the total amount of $115,141, the liability is that of the trustee; there is no reason why any unit holder should be jointly and severally liable to pay that amount; (d) the unconscionable conduct of Twentieth Green was not undertaken in bad faith (Reasons at 300); neither was the withholding of $15,000 for defects rectification; no individual or corporate unit holder can be attributed with Twentieth Green's conduct; to the extent that Mr Reynolds and Mr Stephen Power were involved in negotiating the Payment Authorities, they did so in their roles with Twentieth Green; Grovan's only claim is qua beneficiary of the Unit Trust; it has no cause of action against any of the other unit holders, all of which were in the same position as Grovan; a fortiori, it has no claim against any of the directors of those other unit holders; (e) the only claim Grovan has is that Twentieth Green has paid it less than it should have; that is a claim against Twentieth Green and Twentieth Green alone. 44 In my view, the order for payment of the relevant amount to Grovan should be made against Twentieth Green alone rather than against Twentieth Green and other respondents. Grovan's claim is that Twentieth Green, as trustee, has not carried out its duties (both to account to Grovan for its share of the proceeds of the Project and not to make payments other than for proper purposes). These are claims against Twentieth Green as trustee; they are not claims against other unit holders. It is evident that Twentieth Green does not presently have any assets; it may be expected that Twentieth Green will seek to recover amounts paid to other unit holders and third parties to enable it to pay Grovan the amount to which it is entitled. If Twentieth Green were unwilling to take action to recover the relevant amounts, Grovan may wish to institute proceedings, either in Grovan's own name or in the name of the trustee: see JD Heydon and MJ Leeming, Jacob's Law of Trusts in Australia (7th ed, 2006), [2303]. But it remains to be seen whether this will be necessary and any such claim is beyond the scope of the present proceeding.

Interest 45 The Court is empowered to award interest up to the date of judgment: Federal Court of Australia Act 1976 (Cth), s 51A. Section 51A(1) provides: In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) in respect of a cause of action that arises after the commencement of this section, the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either: (a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or (b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest. 46 In Kazar v Kargarian (2011) 197 FCR 113, Foster J (with whom Greenwood and Rares JJ generally agreed) said (at [97]): I think that s 51A(1)(a) should be interpreted as follows: (a) Pre-judgment interest should be awarded on money claims "unless good cause is shown to the contrary". Such "good cause" would rarely be shown. It would be shown only in exceptional circumstances. The section is designed to compensate a successful applicant for the fact that he or she has been kept out of his or her due monetary entitlements (Haines v Bendall (1991) 172 CLR 60 at 66) while his or her claims are made, litigated and determined. (b) Once the Court has decided that pre-judgment interest should be payable, it has a discretion to award interest at such rate or rates as it thinks fit for such period or periods as it thinks fit on the whole or on part of the monetary award. The only constraint imposed upon the exercise of that discretion by the language of s 51A(1)(a) itself is that the period in respect of which interest may be awarded must begin no earlier than the date when the relevant cause of action arose and must end no later than the date of judgment. 47 In Management 3 Group Pty Ltd (in liq) v Lenny's Commercial Kitchens Pty Ltd (No 2) (2012) 203 FCR 283, Lander, Gilmour and Gordon JJ said (at [25]) that because the award of pre-judgment interest is intended to be compensatory, the interest rates provided in the Penalty Interest Rates Act 1983 (Vic) have no application; the "proper rate of interest to be applied should be the rate prevailing from time to time in the market place which would represent the cost of the money to a successful applicant"; the Court "has suggested in Practice Note CM 16 that the rate is 4% above the cash rate fixed by the Reserve Bank"; and, in their Honours' opinion, "that rate is a rough and ready guide of the prevailing interest rate at any given time and should be applied in relation to pre-judgment interest on any award which has been calculated as at the date that the cause of action arose". 48 The applicants seek an award of pre-judgment interest on any sums found in favour of Grovan or CRP from the date the cause of action arose to the date of judgment. They submit that, for the sake of simplicity, the start date for calculation should be 1 July 2010 on the basis that the last accounts for the Unit Trust were for the year ended 30 June 2010; all debts of the Unit Trust should have been paid prior to that date; and all of the causes of action arose prior to that date. 49 The first to seventh respondents submit that the power and discretion to award interest (both as to the period and rate of interest) may be constrained by considerations of delay and the failure to identify, at an early stage, claims that may ultimately be successful; many of the claims ultimately pressed were not clearly identified until closing submissions. The respondents accept that interest may be ordered to be paid by reference to Practice Note CM 16, and submit that the Court should not descend into the calculations of such amounts. They submit that the Court should allow interest on the amount of $115,141 referred to in the Reasons at [335] from the date of commencement of the proceeding (5 December 2012); and on such sums as are allowed in respect of the questions referred to in the Reasons at [336] and [337] from 7 April 2016. 50 In my view, it is appropriate to award interest from 1 July 2010 to the date of judgment on the amounts payable to CRP and Grovan, such interest to be calculated in accordance with Practice Note CM 16. I do not think good cause has been shown not to award interest in accordance with s 51A. The date 1 July 2010 (which is the date sought by the applicants for commencement of the interest period) is after the date when the causes of action arose. In relation to CRP, its entitlement to payment of the sum of $75,300 arose when this amount was paid by Refam Investments, GJR Corp Pty Ltd and GJR Investments Pty Ltd to Twentieth Green; this was before 1 July 2010. In the case of Grovan, each cause of action upon which it has succeeded arose before 1 July 2010. In relation to the sums of $100,141 and $15,000, it appears from the Unit Holders' Loan Account that these amounts should have been paid during or at the end of the financial year ending 30 June 2009. The other amounts should have been paid to Grovan during the financial year ended 30 June 2010. Although it is true that CRP's claim for the amount of $75,300 and Grovan's claims for the amounts of $7,008 and $5,267 were not particularised before trial, they were encompassed by the applicants' letter of demand dated 26 October 2012 (Ex R7) and their claims in the proceeding. Given that the interest award is compensatory, to reflect that a claimant has been kept out of money to which it is entitled, I consider it appropriate that interest run from the date when the cause of action arose (which the applicants are content to treat as 1 July 2010) to the date of judgment calculated in accordance with Practice Note CM 16.

Conclusion 51 For these reasons, I will make orders as follows. In relation to CRP's claim, I will order that Twentieth Green pay CRP the amount of $75,300, together with interest for the period from 1 July 2010 to the date of judgment, calculated in accordance with Practice Note CM 16; CRP's claim is otherwise dismissed. In relation to Grovan's claim, I will order that Twentieth Green pay Grovan the amount of $119,886, together with interest for the period from 1 July 2010 to the date of judgment, calculated in accordance with Practice Note CM 16; Grovan's claim is otherwise dismissed. There will be an order that the cross-claim be dismissed. In relation to costs, I will provide for the parties to file short written submissions. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moshinsky.

SCHEDULE OF PARTIES VID 1009 of 2012 Respondents Fourth Respondent: NOEL REYNOLDS Fifth Respondent: STEPHEN POWER Sixth Respondent: GEOFFREY RICE Seventh Respondent: TWENTIETH GREEN PTY LTD (ACN 007 258 933) Eighth Respondent: CLESTUS WEERAPPAH