Dominic Iacullo and Lillian Iacullo v Luigi Iacullo & Ors

(Plaintiff/First and Second Cross-Defendants) F G Lever SC (Third, Fourth, Fifth, Sixth, Seventh and Eighth Cross-Defendants) J T Svehla (Proposed Ninth Cross-Defendant) Allsop Glover (Defendants/Cross-Claimants) L Iacullo (in person) (Plaintiffs/First and Second Cross-Defendants) Carroll & O'Dea (Third, Fourth, Fifth, Sixth, Seventh and Eighth Cross-Defendants) Rowan Solicitors (Proposed Ninth Cross-Defendant) File Number(s): 07/257623

Judgment 1I have set out the history of the proceedings in earlier judgments delivered on 26 March 2012 ([2012] NSWSC 274) and 18 October 2013 ([2013] NSWSC 1517). By a further Notice of Motion filed on 17 December 2013, the Cross-Claimants, Mr Dominic and Mrs Lillian Iacullo, sought leave to file a First Cross-Claim, Further Amended Statement of Cross-Claim. This application was brought following the delivery of my judgment ([2013] NSWSC 1517), where I held that some parts of the Cross-Claimants' then Cross-Claim should be struck out and that they should not have leave to file their then proposed Further Amended Cross-Claim and, with hesitation, permitted them an opportunity to amend the pleading to address the deficiencies which I identified within that judgment within a relatively short time, if they sought to do so. I there noted that (at [128]): "Given the history of this matter and the burdens that it is imposing on the Cross-Defendants - particularly [Mr Luigi Iacullo], who is self-represented - it does not seem to me that there would be any reason to give the Cross-Claimants more than one relatively short further opportunity to make amendments so as to properly plead the case they seek to advance in a manner that would be consistent with its just, quick and cheap determination." 2The proposed Cross-Claim which I did not grant leave to file was 98 pages in length. The First Cross-Claim, Further Amended Statement of Cross-Claim ("proposed FAXC"), which the Cross-Claimants now seek to file, has now increased in length to 171 pages and now contains 31 paragraphs seeking relief, of which several paragraphs in turn contain several sub-paragraphs. Certain paragraphs of relief, specifically paragraphs 23(f), (h) and (k), are no longer pressed. The pleadings supporting the relief claimed comprise 353 paragraphs, of which many paragraphs contain numerous sub-paragraphs - indeed, paragraph 11 of the proposed FAXC contains no less than 182 subparagraphs. 3The Cross-Claimants initially also sought an order that Homeline Building Pty Ltd ("Homeline Building") be joined as Ninth Cross-Defendant to the First Cross-Claim. They also initially sought an order that proceedings 2012/241942 in the Common Law Division ("Common Law Proceedings") between Homeline Building and the Eighth Cross-Defendant (Glad Con Pty Ltd) ("Glad Con") be stayed until further order or, alternatively, that Homeline Building be restrained from taking any further steps to prosecute the Common Law Proceedings. Agreement has now been reached between the relevant parties with effect that the Cross-Claimants' motion be discontinued against Homeline Building, prayers 23(f), (h) and (k) be omitted from the proposed FAXC and Homeline Building be omitted as a party, and Homeline Building in turn has agreed to be bound by the Court's findings and determinations in respect of the proposed FAXC if leave were granted to file it. The parties agreed by consent that the Common Law proceedings should be stayed until determination of these proceedings, with liberty to either party to apply to lift that stay. 4The First and Second Cross-Defendants, Mr Luigi Iacullo (who is Mr Dominic Iacullo's brother, and to whom I will refer, without disrespect, as "Luigi") and Badminton Pty Ltd and the Third-Eighth Cross-Defendants ("Murr Parties"), which are entities associated with Mr Michael Murr (to whom I will refer, without disrespect, as "Murr"), oppose the grant of leave to file the proposed FAXC. 5Luigi generally adopted the submissions of the Murr Parties in opposition to the proposed FAXC, to which I will refer below. He also complained as to the length and suggested prolixity of the proposed FAXC and in turn referred to the recent decision of the Court of Appeal of the Supreme Court of Victoria in Yara Australia Pty Ltd v Oswal [2013] VSCA 337, where the Court emphasised practitioners' obligation to use reasonable endeavours to ensure that costs associated with proceedings were reasonable and proportionate to the complexity of the issues and the amount in dispute under s 24 of the Civil Procedure Act 2010 (Vic). Luigi complains, as do the Murr Parties, as to the process by which an original Cross-Claim of 13 pages has grown to 171 pages and contends that the current proposed Cross-Claim has no resemblance to the original Cross-Claim. While that proposition is plainly correct, it does not seem to me that it would provide a basis for refusing leave to file the proposed FAXC, if it were otherwise properly pleaded, unless it could be said that it were so prolix as to fall within other provisions of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") permitting the strike out of a pleading. 6Luigi also contends that the Cross-Claimants could not be allowed to plead their case without reference to the facts established by a court-appointed referee, who prepared accounts for the several trusts in issue in the proceedings. I held, in paragraph 50 of my October judgment, that the referee's report determined the proper content of the accounts of each of the trusts, and specifically how the transactions of the trusts recorded in appropriate source documents should be recorded in their accounts. I also observed in paragraph 50 of my judgment that the Cross-Claimants were not now free to agitate before the Court matters that could have been agitated before the referee but were not raised before him. I also observed, in paragraph 34 of my October judgment, that the referee correctly recognised that the matters referred to him did not include the determination of the legality or propriety of transactions, as distinct from the preparation of accounts recording the transactions that in fact occurred, and (at [50]) that the adoption of that report did not prevent the Cross-Claimants from addressing issues that were not within the scope of the reference and had not been determined by the referee, including any contention that particular transactions were unlawful. 7Luigi also contends that the Cross-Claimants' claim is vexatious because of its length, "non-factual pleadings", a suggested attempt to alter the terms of the unit trust deeds and a refusal to narrow issues in dispute. He contends that the proceedings have "taken a large toll on several families affecting their health and vast sums of money have been spent on this costly litigation". Although that statement was not supported by specific evidence, the costs incurred in the proceedings are self-evident and the fact that they will have caused stress for individual parties and their families, exacerbated by the time for which they have continued and the number of interlocutory disputes and amendment attempts, is a matter of common experience. 8The proposed Ninth Defendant, Homeline Building, also made detailed submissions. Although issues as between the Cross-Claimants and Homeline Building were resolved in the manner that I noted in paragraph 3 above, the Murr Parties adopted Homeline Building's submissions and the Cross-Claimants accepted that it would still be necessary for me to address the criticisms that Homeline Building made of the proposed FAXC. Homeline Building contended that, relevantly, the proposed FAXC did not have proper regard to the findings in the October judgment that the referee's report should be adopted in full and as to the requirements for a proper pleading. Homeline Building also contended that the proposed FAXC pleaded conclusory matters without identification of other paragraphs or the particulars to them which were relied upon or pleading or particularising the necessary material facts; introduced further allegations of breach in particulars, where it was not clear whether those matters were relied on only in relation to the matter pleaded in the particularised paragraph of for a separate claim; did not identify the relevant breaches of duty so it was not known which duties were referred to; and contained numerous allegations of knowledge and dishonest participation that were not supported by pleadings or particularisation of material facts or the provision of particulars of dishonesty and knowledge. As will emerge below, it seems to me that there was considerable force in these criticisms. Relevant legal principles 9I summarised the relevant principles, which remain applicable in respect of this further application for leave, in my October judgment. I noted (at [53]-54]) (omitting several citations) that: "The role of pleadings includes to define the issues in the proceedings and provide the basis upon which evidence may be ruled admissible or inadmissible at trial upon the ground of relevance.... It is, of course, well-established that pleadings should state with sufficient clarity the case that must be met by a defendant and pleadings so as to define the issues for decision and ensure the basic requirements of procedural fairness, namely that a party should have the opportunity to meet a case against him or her ... In Gunns Ltd v Marr [2005] VSC 251 at [57], in a passage subsequently approved by Garling J in Young v Hones [2013] NSWSC 580 at [82], Bongiorno J observed that: 'Not only must the pleading inform the defendants of the case they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly.'" 10Several other authorities, to which reference was made in this application, are consistent with that approach. The significance of pleadings to identify the matters in issue in proceedings, and their particular importance in more complex cases, was well expressed by Bryson J in Northam v Favelle Favco Holdings Pty Ltd (Supreme Court of NSW, Bryson J, 7 March 1995, unrep) as follows: "The volume of material in various forms about the plaintiffs' case available to the fifth defendant and those advising him does not reduce the importance of the Amended Statement of Claim; if anything it adds to it. The Amended Statement of Claim is the document on which the fifth defendant must rely to know what facts are alleged against him and to decide which he will admit, which he will deny and what further facts he will bring forward. Pleadings are of first importance for administering justice by fair proceedings and ensuring that there is effective notice of allegations to parties affected before courts come to conclusions. I do not approach pleadings on the basis that they are technicalities or formalities or unimportant, or only one of the sources to which a party should look to ascertain the material facts, causes of action or grounds of suit. The importance of pleadings is enhanced in a complex case, as this one is, with a number of defendants in different interests. ... ... [i]t is obvious enough that many defendants decide to go to trial on the basis of what they regard as a reasonable understanding of what the issues will be, even though pleadings leave them unclear. I do not expect or require parties to make these judgments or accept these risks and parties must have justice in accordance with the rules of Court if they ask for it ... A pleading may be embarrassing even though it does contain allegations of material fact sufficient to constitute a cause of action, if the material facts alleged are couched in expressions which leave difficulties about recognising or piecing together what is referred to. ... What is referred to must be clearly stated showing, as appropriate, when and where an event happened, who participated, what was said, what was the relevant effect of any document and so forth. ... Procedural justice can be upset just as much by opportunistic advocacy exploiting a choice among several possibilities as by an ambush from complete concealment. In a world of practicalities a defendant is unlikely to receive much protection when evidence is tendered which is an available meaning of a pleading if he has not attacked the pleading at an interlocutory stage." I will refer below to the possibility that a pleading may be such that the multitude of alternatives left open by the pleader does not, in substance, identify the case that the other party is required to meet, as distinct from leaving open a multitude of potential cases that might or might not ultimately be put at a hearing. 11I have been conscious of the observations of White J in Hillig v Darkinjung Pty Ltd [2007] NSWSC 683 at [35]-[36], to which the Cross-Claimants draw attention, that: "It is easy to quibble about a pleading. The question is whether the pleading pleads material facts, discloses an arguable cause of action, and makes clear to the defendant the case the defendant has to meet. ... The timing for making any such complaint about lack of particularity would be once defences have been filed and affidavits have been served, and only then, if it could seriously be contended that the defendants did not understand the case they have to meet. Arguments about pleadings which have a tendency to delay the preparation of the case for hearing, and which are not really necessary for the defendant to understand the case against him, should be firmly discouraged." I agree with those observations. However, they do not have the consequence that the Cross-Defendants cannot properly resist the grant of leave to file the proposed FAXC if it does not plead material facts or make clear the case they have to meet. I would also not accept that the Cross-Defendants could not properly resist the grant of leave, if the multitude of alternative allegations within a pleading is such that it does not in fact commit the Cross-Claimants to an identifiable case, in the hope that affidavits that might in future be filed might remedy that deficiency. White J also properly qualified his cautionary remarks as to arguments about pleadings that have a tendency to delay the preparation of the case for hearing by the recognition that such arguments may be necessary if the pleading is such that the defendant could not in fact understand the case against him. 12Importantly, in Fortescue Metals Group Ltd v Australian Securities & Investments Commission [2012] HCA 39; (2012) 247 CLR 486 at [27], the plurality of the High Court observed that: "The task of the pleader is to allege the facts said to constitute a cause of action or causes of action supporting claims for relief. Sometimes that task may require facts or characterisations of facts to be pleaded in the alternative. It does not extend to planting a forest of forensic contingencies and waiting until final address or perhaps even an appeal hearing to map a path through it. In this case, there were hundreds, if not thousands, of alternative and cumulative combinations of allegations." It seems to me that a number of the pleadings and particulars to which I will refer below have the difficulty that they leave open multiple claims and combinations of claims, to the point that the Cross-Defendants could not in truth identify the case they have to meet, nor could a Court identify it so as to decide it. I regard this as a matter of importance, particularly where the Court has repeatedly drawn the complexity of the pleading and the risk that it may be disproportionate to the amounts in issue to the Cross-Claimants' attention and allowed a further opportunity to amend so that they could seek to address it. 13I also noted in my October judgment that UCPR r 14.28 permits the Court to order that the whole or any part of a pleading be struck out if the pleading, relevantly, has a tendency to cause prejudice, embarrassment or delay in the proceedings or is otherwise an abuse of the process of the Court and referred to the discussion of the concept of "embarrassment" in this rule in Shelton v National Roads & Motorists Association Ltd [2004] FCA 1393; (2004) 51 ACSR 278 at [18] and McGuirk v University of New South Wales [2009] NSWSC 1424 at [30], [33]. I noted (at [59]) that, in exercising the Court's power to strike out a pleading under UCPR r 14.28, or to decline leave to file a pleading, the Court must have regard to the role of pleadings and must give effect to the overriding purpose stated in s 56(1) of the Civil Procedure Act 2005 (NSW), namely, "to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings". Section 58(1) requires the Court to act in accordance with the dictates of justice, and s 58(2) requires that the overriding purpose specified in s 56(1) be taken into account. 14In their submissions in this application, the Murr Parties rightly draw attention to the decision of the High Court of Australia in Expense Reduction Analyst Group Pty Ltd v Armstrong Strategic Managing and Marketing Pty Ltd [2013] HCA 46; (2013) 303 ALR 199, where the Court referred to ss 56-59 of the Civil Procedure Act and (at [56]-[57]) noted that: "The evident intention and the expectation of the [Civil Procedure Act] is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose. That purpose may require a more robust and proactive approach on the part of the courts. Unduly technical and costly disputes about non-essential issues are clearly to be avoided. However, the powers of the court are not at large and are not to be exercised according to a judge's individualistic idea of what is fair in a given circumstance. Rather, the dictates of justice referred to in s 58 require that in determining what directions or orders to make in the conduct of the proceedings, regard is to be had in the first place to how the overriding purpose of the [Civil Procedure Act] can be furthered, together with other relevant matters, including those referred to in s 58(2). The focus is upon facilitating a just, quick and cheap resolution of the real issues in the proceedings, although not at all costs. The terms of the [Civil Procedure Act] assume that its purpose, to a large extent, will coincide with the dictates of justice." Paragraphs 8.22-8.36 15I turn now to those parts of the proposed FAXC which were in issue in this application. Paragraphs 8.22-8.36 of the proposed FAXC are addressed to subclauses 15(c), 17(a), and 30.3 of the IMS unit trust deed, to which I referred in paragraphs 61-62 and 85 of the October judgment. Corresponding allegations to paragraphs 8.22-8.36 (in respect of the IMS unit trust deed) are made in paragraphs 56A-56D in respect of the Gladstone unit trust deed; paragraphs 300A-300D in respect of the Pacificon and Engadine unit trust deeds; and paragraphs 339A-339D in respect of the Hogben unit trust deed. 16In oral submissions, Mr Lever (who appeared for the Murr parties) limited this objection to several paragraphs pleading the terms of the exemption clauses in paragraphs 8.25-8.26, 8.30 and 8.35 of the proposed FAXC in respect of the IMS unit trust and corresponding paragraphs in respect of other trusts. Those paragraphs relevantly provide: "8.25 Upon the true construction and effect of the Trust deed [sic], the said clause 15(c) did not authorise, empower or permit: the Trustee, nor any statutory officer of the trustee nor any member of the Trustee, to enter into any contract or transaction with any person other than: a Unit holder, the Trustee, the Trustee's statutory officers, the Trustee's members, or the Trustee's subsidiaries. in which the Trustee, officer or member might be interested or in respect of the entry into or performance of which he, she or it might come into a position of conflict with, (a) the duties owed by the Trustee as Trustee apart from the effect of clause 15, nor (b) the interests of the general body of Unit Holders as Unit Holders. 8.26Upon the true construction and effect of the Trust deed, the said clause 15(c), did not authorise, empower or permit the trustee, nor any statutory officer of the trustee nor any member of the trustee, to enter into any contract or transaction the effect or tendency of which would be to defeat the restriction on the Trustee's remuneration effected by the term alleged by par 8.15 hereof, by providing for remuneration or reward to the Trustee directly, or indirectly by provision to its officers or members, otherwise than with the sanction of a resolution of the unit holders. 8.30 Upon the true construction and effect of the Trust deed, the said clause 15(c) did not authorise, empower or permit the Trustee, nor any statutory officer of the trustee nor any member of the trustee to enter into any contract or transaction with the object of conferring a benefit upon persons other than unit holders as a general class. 8.35 Upon the true construction and effect of the IMS Unit Trust deed it was provided by clause 30.3 hereof that any member or statutory officer of the Trustee might concur in the Trustee's exercise of any powers or discretions given to the Trustee by the deed or by law notwithstanding that he or she might have a direct or indirect personal interest in the mode or result (but not in the case of a direct or indirect personal interest in the object) of the Trustee's exercise of any such power or discretion Provided that such interested officer or member of the Trustee must abstain from acting in the Trustee's exercise of such power or discretion except as a merely formal party to such decision, taking no active role therein, and leaving the substantial deliberation thereon to the other officer or officers of the Trustee (the first proviso) And Provided that the first proviso be complied with, but not otherwise, the interested person merely concurring in the Trustee's exercise of such power or discretion by acting as required by the first proviso should not be liable to account to the unit holders or to the Trustee for any remuneration or benefits accruing to him or her or to anyone else from the Trustee's exercise on that occasion of that power or discretion. 17Luigi contended that these and other paragraphs of the proposed FAXC turn upon an attempted "alteration" of the terms of the trust deed and he refers to advice dated 15 October 2002 provided by the Cross-Claimants' then solicitors to the Cross-Claimants, which drew attention to the scope of cll 15(c) and 30.3 of the Gladstone unit trust deed (which are in similar terms to cll 15(c) and 30.3 of the IMS unit trust deed) and points out that the Cross-Claimants invested in that unit trust after receiving that advice as follows: "Clause 15(c) expressly permits the trustee to own units and this clause goes on to say that the trustee is not required to account for any profits or benefits obtained. This is potentially of concern given both the wide powers available to the trustee and the provisions of clause 30.3, which allows the trustee to exercise all powers notwithstanding that they "may have a direct or other personal interest in the result" and "shall not be liable to account ... for any remuneration or other benefit accruing". (emphasis original) 18Clause 15 of the IMS unit trust deed, broadly, provides that nothing in that trust deed prevents the trustee, any subsidiary of the trustee or the statutory officers or members thereof from contracting with and taking certain other steps in respect of any contract or transaction. That clause also relevantly provides that the trustee had all the powers over and in respect of the properties and assets constituting the trust fund that it could exercise if it were the absolute and beneficial owner of such properties and assets, including power to employ and pay for other persons to transact business or do any act required to be done in connection with the administration of the trust, including receipt or payment of money; power to do all things which the trustee could do if it were the absolute beneficial owner of the trust fund; and: "power to do all such things as are or may seem to the Trustee in its absolute discretion to be incidental or conducive to the furthering [of] the interests of the Unit Holder hereunder or any of them or to exercise by the Trustee of its powers hereunder or any of them or the performance of the trusts hereof of any of them." 19Clause 17 in turn provided for the trustee's entitlement to remuneration for its services, and cl 17(b) provided for payment of the "costs, charges and expenses of establishing and administering the trust fund" as the trustee may in its absolute and unfettered discretion determine. Clauses 30.2 and 30.3 of the relevant trust deeds specifically dealt with related party transactions and arguably contemplated that companies associated with Murr, Homeline Construction or Homeline Building, would carry out the construction work. Clause 30.3 permitted the trustee and any member or statutory officer of a corporate trustee to exercise or concur in exercising all powers and discretions given to the trustee, notwithstanding that it may have a direct or other personal interest in the exercise of such power or discretion. 20The Cross-Claimants point out that paragraphs 8.22 - 8.36 of the proposed FAXC were introduced to meet the observation in my October judgment that the pleading could not properly plead unqualified duties, where the trust deeds on their face confine the scope of the trustee's duties and liability. The Cross-Claimants contend that paragraphs 8.22-8.24 "tease out" what is said by cl 15(c) of the IMS unit trust deed, and that paragraphs 8.25-8.34 set out specific contentions as to what, as a matter of construction or legal effect, cl 15(c) is "not doing" in that it is "not giving exemption to the various things described in these paragraphs". They contend that the matters referred to involve both the language of cl 15(c) and the limits beyond which an exempting clause in the trust deed may not go. 21The Cross-Claimants, in their opening written submissions, also contended that exempting clauses in trust deeds are strictly construed, by reason of the nature of a trust: see, for example, Commissioner of Taxation v Bargwanna [2012] HCA 11; (2012) 244 CLR 655 at [13], where French CJ, Gummow, Hayne and Crennan JJ observed that "trustee exemption" clauses "are to be construed no more widely than their language on a fair reading requires". The Cross-Claimants contend that the personal obligation attached to a trustee cannot be made illusory; it is not clear how that issue arises, so far as the trust deeds at issue in the present case seek to permit specified matters and narrow the scope of the trustee's duties and restrict its liability to conduct undertaken in bad faith, in a manner that is arguably commonplace in trust deeds. The Cross-Claimants also review, at some length, the controversy as to whether exemption clauses may exempt a trustee from liability for gross negligence. It does not seem to me to be necessary to address those issues to determine the question whether leave should be granted to the Cross-Claimants in respect of the proposed amendments. The Cross-Claimants also contend, in their written submissions, that: "... In the present case, clause 15(c) of the IMS Unit Trust Deed provides not the slightest excuse for the trustee or its officers to make gifts of the trust property to themselves or to their relations, whether openly, or under the cloak of 'consultancy' fees or 'contract' payments (running to millions) of which they don't deign to keep proper records, and which they do not seek at the time to justify by any record of contemporaneous consideration that the benefit thereby to be obtained for the beneficiaries, the officers having agreed up front to act voluntarily. Clause 15(c) is not even expressed as a power. It is expressed as a liberty in the exercise of powers conferred elsewhere in the instrument, powers which exist for the benefit of the beneficiaries." 22The Murr Parties take issue with the construction given by the Cross-Claimants to cll 15, 17 and 30 of the trust deeds, which they contend changes the permissive word "may" in cl 30.3 (as pleaded in proposed FAXC paragraph 8.35) to the mandatory word "must", fails to have regard to cl 17(b) and should be read in the context of cll 14.4 and 14.9 of the trust deeds. I referred, in paragraph 61 of my earlier judgment, to cl 14.4 of each trust deed which permitted the trustee to appoint and engage: "Contractors and such other persons as may be necessary, usual or desirable for the purpose of exercising its powers and performing its obligations and all fees, charges and monies payable to any such person and all disbursements, expenses, duties and outgoings properly chargeable in respect thereof shall be paid from the Trust Fund." Clause 14.9 of the IMS unit trust deed in turn provided that: "The Trustee shall appoint Mr Michael Murr or a company of which he has a controlling interest (the Company) as the builder for each of the stages of the proposed development on terms and conditions outlined in the 'costs plus contract' issued by the Masters Builders Association, a copy of which is attached hereto and marked with the letter "A". ..." Clause 14.9 of the other trust deeds was less detailed, providing only that the trustee "shall appoint a company as the builder of the proposed development". It does not seem to me that those criticisms rise to the point that that construction is unarguable, so as to require the Court at this point to decline leave to the Cross-Claimants to advance questions of construction which can properly be determined at a final hearing. 23Paragraphs 8.22-8.24 plead the application of cl 15(c) of the IMS unit trust deed to the trustee, officers and members respectively. No objection was taken by the Murr parties to those paragraphs although Luigi objected to them as part of his wider objection to the paragraphs. Paragraphs 8.25-8.34 of the proposed FAXC in turn plead that, upon the true construction and effect of the trust deed, cl 15(c) did not permit various actions. As noted above, the Murr parties object only to paragraphs 8.25 and 8.26, although Luigi objects to all of those paragraphs as part of his wider objection. It seems to me that these paragraphs sufficiently identify the construction that the Cross-Claimants seek to give to the relevant provisions to allow the Cross-Defendants to know the case they have to meet. The clauses, their interaction with general principles of trust law and their application in the particular facts raise issues of some complexity, and it seems to me that the Cross-Claimants' construction of those clauses is not unarguable and that the construction issues as to those clauses should properly be determined at a final hearing and not in an application of this kind. 24Paragraph 8.35 of the proposed FAXC (to which the Murr parties object and Luigi objects as part of his wider objection) in turn deals with cl 30.3 of the IMS unit trust deed, and seeks to introduce a distinction between the trustee, its members or officers having a permitted direct or indirect interest in the mode or result of the exercise of a power or discretion by the trustee, and a direct or indirect personal interest in the object of the exercise of that power or discretion. That paragraph also pleads a requirement that the interested statutory officer or member of the trustee "must abstain" from acting except as a merely formal party in any such manner, in circumstances that the clause itself is phrased as a permission rather than an obligation not to act in that manner. The Cross-Claimants advance detailed submissions as to the construction of cl 30.3 of the trust deed which seem to me to be matters to be addressed at a final hearing rather than on this application. So far as the Murr parties' criticism of paragraph 8.35 is concerned, the Cross-Claimants make clear in their written submissions that the pleading sets out the case which they seek to put, and submit that the pleaded contention is not hopeless and, they contend, is the better view of cl 30.3. Whether or not the construction for which the Cross-Claimants contend would prevail at a final hearing, the pleadings seems to me to adequately identify the case which they seek to put. It does not seem to me that anything put by the Cross-Defendants is sufficient to establish that the Cross-Claimants' construction of the clause is unarguable and that the contested issues as to the construction of that clause should also properly be left for determination at a final hearing. 25Paragraph 8.36 of the proposed FAXC (to which Luigi objects as part of his wider objection) in turn pleads that these clauses were contrary to public policy, so far as they were repugnant to the office of trustee or the equitable and statutory obligations of statutory officers of a company or trustee company. The Cross-Claimants contend that this paragraph is directed to the position if the language of the clauses is intractable and it reaches beyond the legally permitted limits of an exempting clause. The pleading might well appear to be surprising, where permissions of this general character have been found in trust deeds and company constitutions for many years. However, it does not seem to me that the pleading in its present form could be said to be unarguable or that it should not be permitted to be argued at a final hearing. 26Accordingly, leave should be granted for the amendment in respect of these paragraphs. Paragraphs 10.5 - 10.8 27In paragraph 68 of my October judgment, I referred to the earlier version of these paragraphs which pleaded that Dominic did not know whether particular investments were made and then pleaded alternative hypotheses as to the result of the facts which Dominic did not know and did not allege. I there noted that: "Paragraphs 10.5-10.6 of the AXC and the corresponding paragraphs of the FAXC plead that Dominic does not know whether particular investments were made and paragraph 10.7 pleads that, if such an investment was made, IMS has failed to account for it and failed to account for its income and paragraph 10.8 pleads that, if it was not made, then IMS was in breach of its duty as trustee. No doubt, a party can plead alternative cases, including in some circumstances cases that depend upon alternative inferences that may be drawn from established facts. However, it does not seem to me that these pleadings contain an allegation of fact, in the alternative or otherwise. To the contrary, they acknowledge Dominic's lack of knowledge of the relevant facts, and then hypothesise the legal consequences of hypotheses as to what the relevant facts might be. Paragraphs 10.5-10.8 of the AXC should be struck out and the corresponding paragraphs of the FAXC should not be permitted." 28Paragraphs 10.5-10.8 have now been amended to allege one of the alternative hypotheses, the fact which Dominic previously did not know, namely, that IMS did not make the relevant investment with Macquarie Bank or other bank or fund manager authorised by a relevant unitholders' resolution of 28 April 1999 and did not make any other income producing investment of trust funds on hand from time to time after that resolution. Paragraph 10.8 in turn pleads a consequential breach of IMS's duty as trustee, inter alia, to invest the trust fund and exercise reasonable business prudence in respect of the investment and use of the trust fund. 29The Murr parties object to the repleading of paragraphs 10.5-10.8 in the proposed FAXC. They submit that the referee's report to which I referred in my October judgment, and which the Court has adopted, found that IMS made the relevant investment with Macquarie Bank, and that the body of his report and a spreadsheet in respect of IMS records that IMS deposited $26,799.48 with Macquarie Bank. The Cross-Claimants respond that an investment of $26,799.48 with Macquarie Bank would not be an answer to their complaint of a failure to invest amount of $4 million pending construction. The Cross-Claimants also contend, with considerable force, that the referee did not find that the money paid to Macquarie Bank was an investment and the accounts which he prepared simply treated it as an expense and recorded no income derived from it and no return of principal from it. It seems to me that the pleading that that investment was not made is therefore not inconsistent with the findings in the referee's report and is open to the Cross-Claimants. 30The Murr Parties also submit that the Cross-Claimants previously claimed on oath that they did not know whether IMS had made such an investment, and now propose to say on oath that IMS did not make such an investment. This reversal in the Cross-Claimants' position is troubling. However, it seems to me that that is a matter for that hearing, and not a reason why that amendment cannot be made. Leave should be granted for this amendment. Paragraph 10.9 31This paragraph previously pleaded that: "On a date or dates not known to the [Cross-Claimants], but probably in mid 1999, IMS transferred or caused to be transferred to Homeline Construction about $4 million from funds held or receivable by IMS on the terms of the IMS Unit Trust." The paragraph is now to be amended to take a significantly different form, pleading that: "The money that IMS transferred or caused to be transferred to Homeline Construction contrary to the terms of the IMS unit trust, as alleged by paragraphs 241 to 258 [of the proposed FAXC], from funds held or receivable by IMS on the terms of the IMS Unit Trust, was money that IMS was obliged to require Homeline Construction to keep separately on the terms of the IMS unit trust." The amended paragraph assumes, rather than pleads, the fact that such money was transferred, or at least was to be transferred. The payment of amounts by IMS to Homeline Construction is pleaded in respect of the Carlton and Five Dock developments in paragraphs 249-250 of the proposed FAXC. 32The Murr Parties point to what they suggest is a "fundamental change" in the Cross-Claimants' case, so far as focus is shifted away from a previously alleged misappropriation of $4 million in mid-1999 to substitute an objection to all construction costs paid by the IMS unit trust to Homeline Construction in excess of $10.5 million, and contend that that matter is sufficient to decline leave to amend the paragraphs. Luigi also complains of the change in the Cross-Claimants' case pleaded in paragraph 10.9 of the proposed FAXC. The Cross-Claimants seek to support the expanded case in respect of the amounts paid to Homeline Construction, on the basis that the $4 million figure was the amount which had been represented to Dominic by Murr, Luigi and IMS and a significantly larger amount had been paid to Homeline Construction, on the basis of the matters established by the referee's report. In submissions in reply, the Murr parties criticise the delay in making these amendments, pointing out that the Cross-Claimants had the referee's report for nearly three months at the time they served the earlier proposed FAXC. 33Although the issue of delay in these proceedings is a matter giving rise to considerable concern, it does not seem to me that the delay in raising these issues, in the context of the complexity of the accounting generally and the number of trusts involved, would provide a basis for declining leave to make this amendment. This is particularly the case where substantive defences and evidence have not yet been filed by the Cross-Defendants. Accordingly, leave should be granted in respect of these paragraphs. Paragraphs 10.40 - 10.41 34I had ordered the earlier version of paragraphs be struck out in paragraph 70 of my October judgment, on the basis that the then pleadings, which pleaded a duty and a breach by pleading the negative of the duty, was a bare assertion of breach arising from an unidentified factual substratum. Paragraph 10.41 is now amended to introduce an additional allegation that Homeline Construction dealt with money paid to it as part of its general funds and did not hold it to the use of the IMS unit trust, and then to repeat the pleading of the negative of each of the duties pleaded in paragraph 10.40. The Cross-Claimants respond to the criticism in respect of these paragraphs that paragraph 10.41 has been amended to plead what Homeline Construction did with the money, and that paragraph 10.40 had only been struck out by reason that paragraph 10.41 was struck out. 35The corresponding paragraphs in the proposed FAXC plead the duties alleged on the part of Homeline Construction and the acts that were not taken and are alleged to have breached those duties and sufficiently identify the case the Plaintiffs have to meet. Leave should be granted for the amendment in respect of these paragraphs. Paragraphs 11.33 - 11.34 36I ordered the earlier version of these paragraphs be struck out in paragraph 73 of my October judgment, by reason of a pleading of agency without pleading the facts giving rise to the asserted agency relationship. The Cross-Claimants respond that the pleading of agency was not essential to this paragraph, because agency is pleaded at paragraphs 11.16-11.18 which are not otherwise the subject of attack by the Cross-Defendants. The pleading of agency has now been deleted and that addresses the relevant difficulty with these paragraphs. Leave should be granted for the amendment in respect of paragraph 11.33, so far as it pleads the fact that IMS sold two strata title units in the relevant project and received the proceeds of sale. Leave should be granted for the amendment in respect of paragraph 11.34 on the same basis. Paragraphs 11.41 - 11.42, 11.162 37I ordered that the earlier version of these paragraphs be struck out in paragraph 75 of my October judgment, where I noted that the paragraphs did not make clear whether they were seeking to allege that IMS (in paragraphs 11.41-11.42) or Pacificon (in paragraph 11.162) had failed to bring the pleaded records into existence or did not keep them until the date of commencement of the proceedings or something else. These paragraphs have now been amended by including the additional words "obtain and" prior to the word "keep". 38The Murr Parties submit that this phrasing leaves open the question whether it is alleged that the Cross-Defendants did not bring the relevant records into existence or merely failed to retain them beyond the statutory period required for the maintenance of a company's financial records. The Cross-Claimants respond that the paragraphs have been amended to make clear that it is alleged that IMS both failed to obtain and to keep those records. The Cross-Claimants identify a contention that the trustees did not obtain building progress claims, although that contention is qualified by the recognition that such claims were sometimes obtained in the form of one line invoices. On balance, leave should be granted for the amendment in respect of these paragraphs. It will, of course, be open to the Cross-Defendants to contend that the Cross-Claimants should be held to the basis on which they have supported this pleading, so that the pleaded allegation will not be established if the true position is that IMS or Pacificon did obtain but did not retain such records. Paragraphs 11.127-11.127A 39The Cross-Claimants indicate that paragraph 11.127 of the proposed FAXC is to be amended to accept that a distribution was made, rather than not made, to the Cross-Claimants and that addresses one of the criticisms made by Luigi of the proposed pleading. The Cross-Claimants indicate that paragraph 11.127A of the proposed FAXC is not pressed. Paragraphs 18.3 - 18.6 40In paragraph 81 of my October judgment, I noted that paragraph 18.3 of the then AXC and then proposed FAXC pleaded that the Hogben Street properties were acquired by the Seventh Cross-Defendant, MMAI Pty Ltd ("MMAI"), using in part funds or assets from the IMS unit trust and/or the Pacificon unit trust and/or the Engadine unit trust. I noted that the Cross-Claimants did not identify any material facts to support that allegation and, if they had a proper basis for it, the material facts that supported it should be identified. 41These paragraphs are amended in the proposed FAXC to plead that the Hogben Street properties were acquired and developed by MMAI and its unitholders rather than by MMAI alone. Particulars are provided as to the acquisition of certain properties, a borrowing by MMAI as trustee of the Hogben unit trust from the National Australia Bank and a claim that MMAI did not have the ability to borrow from its bank without diversions or leveraging from the IMS unit trust. It is also particularised that IMS made income and capital distributions to unitholders and impropriety of purpose is particularised but not pleaded. 42The Murr Parties submit that the financial transactions particularised to this paragraph raise questions of the proper accounting for the relevant transactions, which were matters which had been referred to the referee for determination and as to which the Court has now adopted the referee's reports. The Cross-Claimants respond that items (i) - (iv) in the particulars refer to transactions in the Hogben unit trust which conform with the referee's findings and that paragraphs (v) - (vii) refer to payments and receipts which also conform to the referee's findings, although the Cross-Claimants challenge the propriety and purpose of those payments. The Cross-Claimants point out, and I accept, that the referee treated the propriety of such transactions, as distinct from how they should be accounted for, as outside his function. The Cross-Claimants contend that a challenge to the purpose, character and propriety of transactions that the referee had found to be made is open to them and I accept that submission. 43However, it seems to me that a fundamental difficulty with this pleading arises from particular (vii) to paragraph 18.3 of the proposed FAXC, which reads as follows: "A purpose for which IMS and Pacificon paid the payments to Homeline Construction and the related party payments in the months about the time of and leading up to the acquisitions of 19 Hogben St and 13 - 17 Hogben St respectively was to facilitate the acquisition of those properties by MMAI and the Hogben U[nit] T[rust] unitholders and not by IMS. That was a purpose that was improper and extraneous to the proper function of IMS and Pacificon ...." 44The pleaded allegation is that the Hogben Street properties were acquired from funds and assets derived in a particular manner and the Murr parties could properly admit, not admit or deny that allegation, which does not involve any suggestion of impropriety. Particular (vii) then introduces an allegation that is well beyond the scope of the pleading, that the payments to Homeline Construction (which are not specified) and the "related party payments" (which are also not specified) in the period of "months" about the time of and leading up to the relevant acquisitions were made for an improper purpose which was extraneous to the proper function of the trusts. That allegation is one of impropriety; it fundamentally alters the nature of the pleaded allegation and it should have been pleaded in a manner that allowed the Cross-Defendants an opportunity to respond to it. It also seems to me that the pleading, rather than particularisation, of allegations of impropriety in a complex case is of particular significance so far as it secures the Court's ability to exercise supervision (by granting or withholding leave) of amendments where such supervision should facilitate the just, quick and cheap resolution of the issues in the proceedings. Leave should not be granted for this pleading in this form. I will address the question whether the Cross-Claimants should have any further opportunity to amend at the conclusion of this judgment 45Paragraphs 18.4-18.6 are consequential to paragraph 18.3, so far as they refer to borrowings and applications of funds and assets that are not pleaded but particularised to that paragraph. Those paragraphs should not be permitted since paragraph 18.3 and the allegation of impropriety are not properly pleaded as noted above. Paragraphs 56A - 56AD 46These paragraphs refer to cll 15(c) and 30.3 of the Gladstone unit trust deed and cross-refer to paragraphs 8.22-8.34 of the proposed FAXC (which I addressed in paragraphs 15-26 above) which plead the corresponding paragraphs of the IMS Trust Deed. In paragraph 87 of my October judgment, I observed that it was not open to the Cross-Claimants to plead unqualified duties of the relevant trustees: "... in a form that is plainly inconsistent with the terms of the Trust Deed. While that inconsistency could be raised by the trustee by way of defence, the just, quick and cheap resolution of the real issues in dispute, particularly in a matter of this complexity, is not facilitated by [the Cross-Claimants] pleading in the FAXC in a manner which disregards the express terms of the Trust Deed and advancing a claim that would inevitably fail in the terms pleaded, then falling back to an unidentified alternative position a hearing." 47I summarised several of the relevant provisions of the trust deed of the Gladstone unit trust in paragraph 85 of my October judgment as follows: "The powers conferred on Glad Con as trustee of the Gladstone Street Unit Trust include to "apply any money for the time being forming part of the Trust Fund in erecting ... any building upon such land" (cl 14.2(c)) and in its absolute discretion to raise or borrow money and "to do all such other things as the Trustee could do if it was the absolute beneficial owner of the Trust Fund" (cl 14.2(s)). The trust deed also provides that Glad Con as trustee "shall appoint a company as the builder of the proposed development" (cl 14.9). The trust deed also provides that the trustee is not liable for any loss not attributable to dishonesty or the wilful commission of an act known by it to be a breach of trust and also provides that nothing in the trust deed shall prevent Glad Con or its statutory officers (namely Messrs Murr and Luigi) from contracting or entering into any contract or transaction whatsoever or from being interested in any such contract or transaction and none of them are liable to account to unitholders in respect of any such contract or transaction or for profits or benefits made or derived thereby or in connection therewith (cl 15.0). The trust deed also provides that the trustee and any member or statutory officer of it may exercise all powers and discretions given under the Trust Deed or by law to Glad Con as trustee "notwithstanding that it or he respectively may have a direct or other personal interest in the mode or result of exercising any such power or discretion" and a person so acting is not liable "to account to the Unit Holders or the Trustee for any remuneration or other benefits accruing therefrom" (cl 30.3)." 48Homeline Building advances several criticisms of these paragraphs, in addition to (but overlapping with) the criticisms made by the Murr Parties and Luigi of paragraphs 8.22-8.36 of the proposed FAXC in respect of the IMS Unit trust. Homeline Building contends that paragraphs 56A-56D of the proposed FAXC fail to plead and have regard to the effect of cll 15(a)(i)-(ii) and 30.2 of that trust deed and other relevant provisions of the trust deed. Clause 15(a) of the trust deed (to which I referred in paragraph 85 of my October judgment) provides that Glad Con as trustee shall not be liable or accountable for any loss not attributable to its dishonesty in its capacity as trustee or the: "wilful commission by it of an act known by it of an act known by it to be a breach of trust that may be suffered or incurred in exercising any of the directions, powers, authorities or discretions given to or conferred upon the trustee under this Deed or investing monies available for investment." Homeline Building contends that the omission of reference to this clause has the consequence that paragraphs 56A-56B and their cross-reference to paragraphs 8.22-8.34 of the proposed FAXC are embarrassing. 49Homeline Building contends that the Cross-Claimants also fail to have regard to that part of cl 15(c) of the trust deed which provides that nothing in that trust deed prevents the statutory officers of the trustee (relevantly, Murr as a director of the trustee) from at any time contracting or acting in any capacity as representative or agent of or entering into any contract or transaction whatsoever with the trustee or being interested in such a contract or transaction, which they contend extends to the contracts with the relevant builder and the construction of the relevant units, and also provides that such statutory officer is not liable to account to the trustee in respect of any such contract or transaction and is not liable to account to the trustee for any profits or benefits made or derived thereby or in connection therewith. Homeline Building contends that that omission is significant, where the contract between Glad Con and Homeline Building seems to have been formed with Murr as representative of Homeline Building; Murr was interested in the relevant contract as a director and/or shareholder of Homeline Building and was interested in the transaction, namely, the performance by Homeline Building of the building work to build the units for reward; and was interested in the performance of the contract as a director and shareholder of Homeline Building and gave effect to the transaction as representative of Homeline Building. 50Homeline Building also points to the absence of reference in the proposed FAXC to cl 30.2 of the Glad Con trust deed which provided that Glad Con had the power to delegate to Murr, one of its directors, "the right and power to exercise or concur in exercising any such discretion or power". I do not accept that the Cross-Claimants were bound to refer to this provision, where its significance depends on whether Glad Con in fact exercised the relevant power of delegation. 51The Cross-Claimants respond to the criticism that they have not pleaded cll 15(a)(i) and (ii) of the trust deed on the basis that they contend that cl 15(a) is not an exemption clause and do not consider that clause to be relevant to their case. The Cross-Claimants similarly contend that cl 30.2 is not relevant to the manner in which they seek to put their case. It seems to me that these paragraphs plead the case which the Cross-Claimants seek to put in respect of the construction of the trust deed in a manner which allows the Cross-Defendants to know the case they have to meet. The legal issues as to the construction of the clause do not seem to me to be unarguable, as I noted in respect of the corresponding clauses of the IMS unit trust deed, and can readily be determined at a final hearing. 52Homeline Building also points out that paragraph 56D of the proposed FAXC extends to the statutory obligation of statutory officers of a company, or trustee company, and contends that this is a separate matter from the office of trustee and extends into the area of a statutory derivative action. It seems to me that it is open to the Cross-Claimants to contend that, as a matter of law, the duties of statutory officers of a trustee company cannot be restricted, notwithstanding that contention may have limited prospects of success on its merits, and that they may advance that contention in respect of the proper construction of the relevant provisions in the trust deed notwithstanding that they do not have standing to bring, and do not seek to bring, a statutory derivative action. 53The Cross-Claimants should have leave in respect of paragraphs 56A-56D of the proposed FAXC. Paragraphs 59 - 61 54In paragraph 87 of my October judgment, I declined to grant leave to the Cross-Claimants to include paragraph 59 of the then proposed FAXC, which sought to plead an unqualified duty on the trustee to refrain from acting or taking to confer a profit for itself or another person at the expense of the Gladstone unit trust, in circumstances where that duty was plainly inconsistent with the terms of the trust deed. This paragraph is now sought to be qualified by paragraphs 56A-56D of the proposed FAXC, which in turn refer to cll 15(c) and 30.3 of the Gladstone unit trust deed and cross-refer to paragraphs 8.22-8.35 of the proposed FAXC. Proposed paragraphs 60-61 of the then proposed FAXC, dealt with in paragraphs 88-89 of my October judgment, are also affected by the issue as to the pleading of an unqualified duty, now sought to be clarified by paragraphs 8.22-8.36 and 59-61 of the proposed FAXC. 55The Cross-Claimants point out that Homeline Construction's objection to these paragraphs depends on the objection to the pleading concerning cll 15(c) and 30.3, in paragraphs 56A-56D. I have held that leave should be granted in respect of paragraphs 8.25-8.34 and 56A-56D of the proposed FAXC and leave should be granted for the amendment in respect of these paragraphs in consequence. Paragraphs 71A - 71E 56These paragraphs are introduced for the first time in the proposed FAXC. The Cross-Claimants plead that Murr signed, purportedly on behalf of Glad Con, a building contract with Homeline Building dated 16 December 2004; that no resolution of the directors of Glad Con approved the entry by Glad Con into a contract in those terms or appointed or authorised Murr to sign the relevant form of contract; and that, by reason of those matters, the relevant contract was not executed by or on behalf of Glad Con and was not entered into by Glad Con. It will be noted that the Cross-Claimants do not allege that Glad Con did not execute the relevant contract, but instead take a point only as to the absence of a resolution of the board of directors approving its entry into the contract or appointing or authorising Murr to sign the relevant form of contract. 57The Murr Parties contend that no legal basis is identified for that contention, and refer to the powers of the trustee and ss 125-126 of the Corporations Act 2001 (Cth), which provide, inter alia, that a company's power to make a contract may be exercised by an individual acting with the company's implied authority and on its behalf. They also point to the fact that Homeline Building constructed the relevant project and sold units in the project for the benefit of beneficiaries of the trust. 58Homeline Building also contends that paragraph 71E of the proposed FAXC, which pleads that no other building contract was entered into by or on behalf of Glad Con with Homeline Building, is inconsistent with paragraphs 72-74, which plead that Glad Con, Murr and Luigi instructed Homeline Building to build the Gladstone Street units, which had occurred. Homeline Building contends that an instruction by Glad Con to Homeline Building to build the relevant units for payment would constitute a contract. Homeline Building also contends that the pleadings of breach of equitable and fiduciary duties by Glad Con (proposed FAXC [81], [88]), breach of statutory duties by Luigi and Murr as directors of Glad Con (proposed FAXC [89], [94]-[95] and [117]) and of knowing concern and dishonest participation by Luigi and Murr (proposed FAXC [82]-[84], [91]-[92] and [118]) turn upon an allegation of the existence of a contract between Homeline Building and Glad Con. Homeline Building contends that the Cross-Claimants cannot be permitted to prosecute a claim for serious allegations of dishonesty, breach of duties and knowing concern upon the premise that the Gladstone Street building contract was entered into where they seek to prove the contrary of that fact. It seems to me that the Cross-Claimants are entitled to advance alternative allegations, and that the approach adopted to the Gladstone Street building contract arguably falls within that classification. 59The Cross-Claimants contend that they plead these matters for more abundant caution, and do not concede that they are required to assume any onus of pleading or proof. The Cross-Claimants respond to the Cross-Defendants' criticism that the pleading ignores the trustee's powers by submitting that those powers were not exercised by the trustee, and specifically that the contract was not authorised in any manner provided by cl 30.2 of the Gladstone unit trust deed. It seems to me that this pleading raises questions as to the effective execution of the relevant contracts which are sufficiently identified by it to allow the Cross-Defendants notice of the claim they have to meet and which are not unarguable. It may well be that ss 125-126 of the Corporations Act will provide a defence to those allegations, but that is a matter of defence rather than reason not to allow the allegations to be determined at a trial on the merits. Leave should be granted for the amendment in respect of these paragraphs. Paragraphs 72 - 75 60Paragraph 72 of the proposed FAXC pleads that Homeline Building performed the relevant building work in respect of the Gladstone Street project without the approval or consent of unitholders. Paragraph 73 of the proposed FAXC pleads that "[b]y so acting, Glad Con acted to confer a benefit on Homeline Building Pty Ltd at the request of Murr". Homeline Building contends that the reference to "so acting" and the suggested "benefit" are not identified. I do not accept that submission. While the pleading is less precise than it might be, it seems to me that the relevant action is that identified in paragraph 72, of instructing Homeline Building to perform building work in respect of the project, allegedly without the approval or consent of unitholders of the Gladstone unit trust, and the benefit on Homeline Building is the opportunity to perform that work and derive any profit thereby. 61Paragraph 74 pleads that "[t]hat was a breach of the said equitable and fiduciary duties of Glad Con". The reference to "that" is presumably to the instruction to Homeline Building to perform building work and the suggested benefit conferred on Homeline Building. The "said" equitable and fiduciary duties are not identified by cross-reference although there is reference to such duties in the particulars to the paragraph. Those particulars are in turn extensive and contain multiple alternative allegations. The Murr Parties submit that the particulars to this paragraph contain serious allegations including allegations of breach of the conflict rule, allegations of lack of supervision or scrutiny of the terms of payment, allegations of breach of duty by the trustee and allegations that it was not permissible for Glad Con to contract with Homeline Building and allegations that the payment were outside the scope of the trustee's powers and were made in circumstances of impropriety, which are of a character that they ought to be pleaded and not merely particularised. 62Homeline Building also raised several issues as to the particulars to this paragraph. Particular (b) to this paragraph refers, in respect of an alleged breach of the equitable and fiduciary duties of Glad Con, to Luigi "sacrificing the objections that he had previously made on behalf of Glad Con" to the building contract with Homeline Building, and doing so "without any honest or reasonable view that they ought be sacrificed". Homeline Building contends, and I accept, that this is an allegation in the nature of dishonesty and should have been pleaded, rather than particularised, so as to allow Luigi an opportunity to respond to it. 63Homeline Building also criticises the form of particular (d) to paragraph 74 of the proposed FAXC, which reads as follows: "The payments were made only upon one line or short form invoices which do not enable any meaningful scrutiny of the claims. The payments were made without obtaining or requiring any other supporting vouchers or written justification therefore. The payments did not conform or could not be seen to conform with the terms of the alleged building contract and therefore were not authorised by the terms of the trust." Homeline Building points out that it is unclear whether the "alleged building contract" refers to the Gladstone Street building contract or something else and that the relevant terms of that contract and the terms of the trust deed which are relevant to that allegation are not identified. It seems to me that those are matters that could properly be addressed by a request for further particulars, and do not in themselves create any difficulty with that particular. However, this single particular involves allegations that (1) payments were made in invoices in a particular form; (2) those invoices did not allow meaningful scrutiny; (3) the payments were made without obtaining supporting vouchers or written justification; (4) alternatively, the payments were made without requiring supporting vouchers or written justification; (5) the payments did not conform with the terms of the "alleged building contract"; (6) alternatively, the payments "could not be seen to conform" with the terms of the "alleged building contract"; and (7) in consequence, the payments were not authorised by the terms of the trust. I will return to the consequence of these multiple alternatives below. 64Homeline Building also criticises particular (e) to paragraph 74 of the proposed FAXC, which provides: "Further, in failing to require the builder to submit proper progress claims, supported by appropriate documentation and to scrutinise the claims of the builder with ordinary business prudence and with a regular system of record keeping and scrutiny, and by failing to obtain and/or keep proper vouchers and records in relation to the claims and payments, the trustee acted (i) Without reasonable business prudence, (ii) With partiality to Murr, preferring his interest in the building company, to the protection of the beneficiaries, (iii) In reckless disregard of the plain duty to see that the payments in fact were and could be seen by the beneficiaries to be proper and in conformity with the building contracts and with the terms of the trust deed." Homeline Building points out, with justification, that a series of material facts and conclusions from them are rolled up in this particular. It seems to me that the material facts should have been pleaded so that the Cross-Defendants have an opportunity to respond to them. The language of "reckless disregard" involves an allegation of breach of duty which should have been pleaded, and the language "plain duty" does not identify the basis of the relevant duty, or the terms of the building contract or terms of the trust deed from which that duty is said to arise. Again, the particular involves multiple allegations with multiple alternatives. 65Homeline Building also takes objection to particular (g) of paragraph 74, which reads as follows: "Further or in the alternative, the failure to require and scrutinize the submission of proper claims by the builder, supported by appropriate documentation and to obtain and keep proper vouchers and records in respect of the claims and payments, the trustee permitted the builder to act as it saw fit regardless of the terms of the contract, such that the payments were outside the scope of any valid exercise of the powers of the trustee, but constituted (i) Payments for the improper purpose of enriching a person, Homeline Building Pty Ltd, and through it, Murr, being persons who were not objects of the Trust, to the prejudice of the beneficiaries, (ii) A failure to consider the interests of the beneficiaries, (iii) Conduct that was so unreasonable that no honest and reasonable trustee would so act, (iv) Conduct that was the taking of an improper risk as to the builder's performance and the propriety of its claims, being a risk that the trustee knew it was not entitled to take, (v) An evasion of the restriction on remuneration of the trustee established by clause 17 and an evasion of the restriction on remuneration of the trustee's directors established by the general meeting of IMS on 11 September 1997, as alleged by par 8.19(e) hereof." Again, this one particular contains multiple allegations, of a failure to require the submission of proper claims, or possibly a failure to scrutinise such claims; a failure to "obtain and keep" proper vouchers and records; that the trustee permitted the builder to disregard the terms of the contract, which the Cross-Claimants elsewhere deny existed; that the payments were outside the scope of a valid exercise of the powers of the trustee, for reasons which are not identified; and that they involved, inter alia, an improper purpose; a failure to consider beneficiaries' interests; taking of an "improper risk" in circumstances that the trustee knew it was not entitled to take that risk; and an evasion of restrictions on the trustee's remuneration. This particular also contains allegations of knowing impropriety. 66The Cross-Claimants characterise the Cross-Defendants' criticisms of paragraph 74 of the proposed FAXC as "[f]urther nit picking criticism" and contend that the relevant breach is making the payment. It does not seem to me that the particulars to which I have referred above are consistent with a case of such simplicity. 67It seems to me that leave should not be granted in respect of paragraph 74 of the proposed FAXC for several reasons. First, and most fundamentally, the multiplication of particulars to the paragraph and alternatives within the particulars has the consequence that this pleading does not, in fact, identify the case on which the Cross-Claimants rely as distinct from identifying multiple options which they may later adopt at a hearing. This paragraph and its particulars seem to me to involve the difficulties of the approach rejected by the plurality of the High Court in Fortescue Metals Group above at [27]. Second, the particulars involve significant allegations of fact, including allegations of impropriety, and the fact that those allegations are particularised rather than pleaded deprives the Cross-Defendants of an opportunity to plead to them (other than by pleading to particulars). As I noted above, a requirement for pleading rather than particularising significant allegations of impropriety in a complex case also seems to me to secure the Court's opportunity to supervise further amendments (by granting or withholding leave) where such supervision is essential to the just, quick and cheap resolution of the issues in the proceedings. 68Paragraph 75 of the proposed FAXC in turn pleads that: "That breach was committed by Glad Con well knowing of the Cross-Claimants' objection and with the dishonest design of assisting Murr and Homeline Building Pty Ltd at the expense of the Cross-Claimants." Leave should not be granted in respect of this paragraph. First, given the multiple breaches of duties particularised for paragraph 74 of the proposed FAXC, it is not possible to know what is referred to in this paragraph by "that breach". Second, there is again an express allegation of dishonesty on the part of Glad Con, which is not particularised. The Cross-Claimants respond to the criticism of paragraph 75 of the proposed FAXC by pointing out that the reference to "that breach" in that paragraph is to the breach alleged in paragraph 74 of the proposed FAXC. To that extent, this paragraph is consequential on paragraph 74, as to which leave has not been granted for the reasons set out above, and leave for paragraph 75 should not be granted in consequence. I address the position in respect of paragraphs 76 and 77 in dealing with allegations of knowing involvement below. Paragraphs 78 - 82 69Paragraph 78 of the proposed FAXC in turn refers to the "said breaches of the said equitable and fiduciary duties" and paragraph 81 refers to a breach of the "said equitable and fiduciary duties", in each case not identifying where the relevant equitable and fiduciary duties are pleaded. I had emphasised the vice of allegations of breach of unidentified duties in my October judgment, and this seems to me to be a matter of substance in a pleading of this complexity. I would add that, to the extent that the source of those equitable and fiduciary duties can be identified, it may be among the particulars to the paragraphs that have not been permitted above. Leave for this paragraph should not be granted for these reasons. 70In my October judgment (at [121]), I declined to permit the earlier version of paragraph 82 of the proposed FAXC which contained an allegation of a breach committed by Glad Con "with the dishonest design" of assisting Murr and Homeline at the expense of Dominic and Lillian. I observed that the only matter relied on in that paragraph to support dishonesty was that the conduct occurred despite Dominic and Lillian's objection and that plainly was not sufficient to establish dishonesty. The Cross-Claimants seek to amend this paragraph to read as follows: "That breach was committed by Glad Con well knowing of the Cross-Claimants' objections and with the dishonest design of assisting Murr and Homeline Building Pty Ltd, who were not objects of the Trust, financially at the expense of the Cross-Claimants as members of the general body of unit holders." This paragraph seems to me to raise the same difficulties as paragraph 75 of the proposed FAXC and should not be permitted for the same reasons. Paragraphs 86, 88 - 89 71Paragraph 86 of the proposed FAXC pleads that: "In any event, by instructing Homeline Building Pty Ltd to perform building work in respect of the Gladstone Street Project and by paying or incurring on behalf of Glad Con such liability to pay or by exposing it to claims for liability to pay claims in respect of the performance of that work each of Murr and Luigi breached his statutory duty to refrain from using his position as director of Glad Con to gain for himself or for someone else an advantage." Homeline Building contends that the Cross-Claimants have no standing to bring a claim for breach of statutory duty on behalf of Glad Con, and that is plainly the case. However, the pleading in paragraph 86 forms part of an allegation of breach of equitable and fiduciary duty by Glad Con, in failing to take action to enforce its rights against Homeline Building, Murr or Luigi, and it seems to me that that pleading is permissible as a factual step in that allegation. 72Paragraph 88 of the proposed FAXC in turn refers to the "said equitable and fiduciary duties" which are again not identified by any cross-reference to where they are pleaded or, possibly, particularised. That is again a matter of substance in a pleading of this complexity and leave should not be granted in respect of this paragraph for that reason. Paragraph 89 in turn alleges that "[b]y so neglecting" Glad Con acted with the "dishonest design" of assisting and shielding Homeline Building, Murr and Luigi. This allegation appears to depend on paragraph 88, in respect of which leave has not been granted. The Cross-Claimants respond to the criticism of these paragraphs by referring to liability under Barnes v Addy (1874) LR 9 Ch App 244 in respect of knowing assistance in a trustee's dishonest design, but that is not an answer to the lack of clarity in the pleading, which raises real difficulty for the just, quick and cheap resolution of the proceedings in the circumstances to which I have referred. Leave should not be granted in respect of these paragraphs. Paragraphs 92 - 94 73Paragraphs 92-94 of the proposed FAXC in turn plead: "92. By reason of the matters alleged by paragraphs 48 to 74 hereof, the alleged contract was not entered by Glad Con or, if it was entered into, was not authorised or, if authorised was entered into as an abuse of power, and is void or voidable. 93. If the alleged contract was entered into then Murr breached his statutory duty to refrain from using his position as director of Glad Con to gain for himself or for someone else an advantage. 94. If the alleged contract was entered into then Luigi breached his statutory duty to refrain from using his position as director of Glad Con to gain for himself or for someone else an advantage." 74It seems to me that there is a significant difficulty with paragraph 92 of the proposed FAXC, so far as it requires the Cross-Defendants and the Court to work back through 26 paragraphs pleaded over 13 previous pages in order to seek to deduce the basis of the claim that the relevant contract was not authorised, or was an abuse of power, and was void or voidable. Paragraphs 93 and 94 each involve a claim brought by the Cross-Claimants in respect of a cause of action that is only available to the corporate entity, in circumstances that they have not sought or obtained leave to bring a derivative action on behalf of that entity. Leave should not be granted in respect of these paragraphs. Paragraph 98A 75Homeline Building raises concerns as to the adequacy of the identification of the offer alleged to have been made by Murr in paragraph 98A of the proposed FAXC, the identification of "those claims" in that paragraph and otherwise adopts the Murr Parties' criticism of that paragraph. The Cross-Claimants respond to the criticism of the absence of identification of the "offer" in paragraph 98A that Murr's letter putting the relevant offer is already in evidence. It seems to me that these issues raised by Homeline Building would properly be addressed by a request for further particulars. Leave should be granted in respect of this paragraph. Paragraphs 105 - 106, 108 and 111 76Paragraphs 105, 108 and 111 plead that Mr Michael Holt ("Holt") was appointed as a director of Homeline Building at the instigation of Murr, that Holt has no interest as a shareholder in Homeline Building and the proceedings brought by Homeline Building against Homeline Construction were commenced by solicitors instructed by Holt but instigated by Murr. Homeline Building contends that further particulars need to be provided. Paragraph 106 pleads that Holt from time to time acts as a consultant retained by Murr or entities associated with him, and Homeline Building alleges that this is not a relevant material fact and there is a lack of clarity in respect of the time period, the responsibilities of Holt as a consultant and the nature of the entities associated with Murr. They also submit that this plea would impermissibly broaden the matters in issue. It seems to me that these criticisms can be addressed by a request for further particulars. Leave should be granted in respect of these paragraphs. Paragraphs 117 - 118 77Paragraph 117 of the proposed FAXC refers to a claim made by Homeline Building against Glad Con for a further amount of $770,000 in respect of building works at the Gladstone Street project. The Cross-Claimants plead that: "The conduct of Glad Con in claiming in the Reference that said sum of $770,000 plus the said interest is due from it as Trustee of the Gladstone Unit Trust to Homeline Building Pty Ltd was done with the dishonest design of assisting Murr and Homeline Building Pty Ltd at the expense of the Cross-Claimants to take the whole of the remaining assets of the Gladstone Unit Trust, and without any honest belief that the claims of Homeline Building Pty Ltd are valid, enforceable and recoverable." This paragraph involves a further allegation of dishonesty, and the material facts relied upon are again not pleaded or particularised, or if elsewhere pleaded in the proposed FAXC, are not identified. This approach leaves it open to the Cross-Claimants to draw at least on any of the multiple allegations and alternatives pleaded in and particularised in respect of the Gladstone Street development in paragraphs 48-116, over the previous sixteen pages, to seek to support the suggested dishonest design and lack of honest belief and seems to me to amount, in substance, to a failure to identify the case that Glad Con has to meet by leaving open a multiplicity of alternatives from which such a case might be drawn. Homeline Building also contends that there is no proper foundation for the claims, where the Gladstone Street building contract was executed by Murr, as a director of Glad Con, and by Homeline Building, and where the amount of $770,000 remained unpaid in respect of progress claims established in the accounting in the referee's report. It seems to me that this is a matter which, had the allegations otherwise been properly pleaded or particularised, would have been properly determined on its merits at a final hearing. Leave should not be granted in respect of this paragraph. 78Paragraph 118 of the proposed FAXC is an allegation of knowing concern and dishonest participation on the part of Murr, which seems to me to have the same deficiencies as the other allegations of knowing concern and dishonest participation to which I will refer below. However, leave should not be granted in respect of this paragraph on the narrower basis that it is consequential on paragraph 117 for which leave has not been granted. Paragraphs 143 - 145 79These paragraphs plead a conventional estoppel on the basis that Glad Con, Homeline Building and Murr acted on the conventional basis and understanding that certain claims would not be made by Homeline Building in paying an amount of $200,000 to Luigi. In paragraph 98 of my October judgment, I noted that the corresponding allegation in the previous proposed FAXC was conclusory in character and no material facts were pleaded to support the asserted basis and understanding. 80Paragraph 143 has now been particularised, by reference to paragraphs 98A-98C and on the alternative basis of a failure to record the suggested liability in Glad Con's MYOB ledgers and by reference to the calculations performed by the Cross-Defendants in determining the amount to be paid to Badminton. Homeline Building contends that the material facts supporting the pleading in paragraph 143 of the proposed FAXC are not pleaded, and that deficiency cannot be overcome by particulars. The Cross-Claimants point to a pleading of relevant facts in paragraphs 98A-98C but contend that the particulars identify a further or alternative basis for finding the convention by implication and that the difference between pleadings and particulars will involve questions of degree, and that the particulars give fair notice of the relevant claim. The Cross-Claimants respond, with some force, to the criticisms of the increasing length of the pleading by pointing out that, at least to some extent, that is the necessary consequence of the provision of additional particulars to define the issues in the proceedings, in the manner contemplated by the October judgment. 81It seems to me that the particulars to this paragraph are sufficient to allow the Cross-Defendants to know the case which they have to meet and, where the allegation is not one that involves dishonesty or impropriety, the identification of the relevant matters in the particulars is sufficient. Leave should be granted in respect of these paragraphs. Paragraphs 167 - 240 82These paragraphs plead breaches of fiduciary duty by several parties in respect of the alleged diversion of development opportunities from the IMS unit trust to the Pacificon, Engadine and Gladstone unit trusts; an alleged failure to offer unitholders including Dominic and Lillian the opportunity to invest in later trusts; and the exclusion of Dominic, Lillian and the IMS unit trust from the Hogben Street project. Luigi contends that the allegations made in these paragraphs are not open to the Cross-Claimants, where the referee recorded a finding that no monies moved from one trust to another. The question of the breach of equitable duties alleged in these paragraphs was not referred to or determined by the referee and is open to Dominic and Lillian. No other objection was taken to these paragraphs and leave should be granted in respect of them. Paragraphs 243 - 246 83These paragraphs plead duties of IMS as trustee of the IMS unit trust and cross-refer to paragraphs 8.22-8.36 of the proposed FAXC. Leave has been granted in respect of these paragraphs and should be granted in respect of these paragraphs on the same basis. Paragraphs 249 - 259 84The Murr Parties challenge these paragraphs on the same basis as the challenge to paragraph 10.9, to which I referred above, by reference to the change in the Cross-Claimants' case from alleging an misappropriation of $4 million to, in effect, challenging all construction costs paid by the trusts. These paragraphs plead that amounts paid by IMS to Homeline Construction should be repaid, and refer to progress claims made in respect of developments at Carlton and Five Dock and other payments made to Homeline Construction which are said to have been variously paid before delivery of the invoice or without receiving a claim for work. The Murr Parties contend that this is an accounting issue which was addressed by a referee previously appointed by the Court in his report. I accept that the amount of those payments and their proper treatment in the trust's accounts was an accounting issue that was determined by the referee. It does not seem to me that the question whether they should be repaid is of that nature, and it was not referred to or addressed by the referee so as to prevent the Cross-Claimants now pursuing it. 85The Murr parties contend, with some force, that it cannot rationally be argued that Homeline Construction, which had built several substantial blocks of home units that produced profits for the unitholders, including the Cross-Claimants, should not be paid for its work. It does not seem to me, however, that this provides a basis to decline leave to amend in respect of these paragraphs, rather than to leave them for determination at a hearing on the merits. Accordingly, leave should be granted in respect of paragraphs 249-257. 86It seems to me, however, that paragraph 258 is within Homeline Construction's wide objection to the particularisation rather than pleading of allegations of impropriety, which was adopted by the Murr parties. That paragraph and its particulars might well also have been open to the criticism that the multiplicity of allegations and alternatives raised in them do not identify the case that the Cross-Defendants have to meet, as distinct from leaving a range of alternatives from which such a case might later be articulated. I do not grant leave for that paragraph on the former basis, and I would also not have granted leave on the latter basis had that point been taken by the Cross-Defendants in respect of that paragraph. Leave should also not be granted in respect of paragraph 259, which appears to be consequential upon paragraph 258 and is subject to Homeline Building's wider objection to paragraphs referring to unidentified breaches, again adopted by the Murr parties. Paragraphs 300A - 300D, 339A - 339D 87These paragraphs, in respect of the Pacificon and Engadine unit trusts and in respect of the Hogben Street unit trust, correspond to paragraphs 56A-56D in respect of the Gladstone unit trust and cross-refer to paragraphs 8.22-8.34 in respect of the IMS unit trust. Leave should be granted in respect of these paragraphs on the same basis that it was granted in respect of the earlier paragraphs. Quantification of loss 88Luigi also contends that the Cross-Claimants have refused to quantify their alleged financial loss. However, it does not seem to me that the Cross-Claimants' failure to do so at this point would provide an independent basis for declining leave to file the proposed FAXC, however desirable it would be for that matter to be clarified so the parties can assess the utility of incurring the substantial costs which will have already been incurred in respect of the conduct of these proceedings. Allegations of knowing involvement 89I now turn to numerous allegations of knowing concern and knowing assistance to breaches of trust which largely raise similar issues. Paragraphs 10.32-10.33 of the proposed FAXC plead that Luigi and Murr were knowingly concerned in and assisted or induced IMS dishonestly to commit pleaded breaches of trust concerning funds transferred to Homeline Construction and the assets purchased therewith. Corresponding allegations to paragraphs 10.32-10.33 (in respect of the IMS unit trust) are made in paragraphs 76-77 in respect of the Gladstone unit trust, paragraphs 318 and 320 in respect of the Pacificon and Engadine unit trusts; and paragraph 351 in respect of the Hogben unit trust. 90In paragraph 69 of my October judgment, I held that the corresponding paragraphs of the then Amended Cross-Claim should be struck out, and leave should not be granted in respect of the corresponding paragraphs of the then proposed FAXC, because they did not clearly identify the material facts relied on for the allegation of dishonesty or the allegation of knowing concern. In paragraph 114 of my October judgment, I referred to the requirements of UCPR rr 15.3-15.4 that a pleading give particulars of any fraud or breach of trust on which a party relies and that a party that alleges a condition of mind (including fraudulent intention but not including knowledge) give particulars of the facts on which that party relies. I also referred (at [115]) to the authorities as to the need for particulars to explain the basis of a serious allegation of misconduct and emphasised that a case of fraud or dishonesty must be pleaded specifically and with particularity and emphasised the importance of that matter to a fair trial, as follows: "In Three Rivers DC v Governor and Company of the Bank of England (No 3) [2001] 2 All ER 513, Lord Hope observed (at [51]) that, the more serious an allegation of misconduct, the greater is the need for particulars to explain the basis of the allegation and (at 55]) that, if the particulars given are not capable of supporting the pleaded allegation, then the allegation must be struck out. Lord Millett (dissenting) similarly observed that "an allegation of fraud or dishonesty must be sufficiently particularised". The High Court of Australia has also emphasised that a case of fraud or dishonesty must be pleaded specifically and with particularity with the particulars being "exactly given" and has emphasised the importance of that matter to a fair trial: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [170]; Fortescue Metals Group Ltd v Australian Securities & Investments Commission [2012] HCA 39; (2012) 291 ALR 399; (2012) 91 ACSR 128 at [26]-[27]. In Leawell Pty Ltd as trustee for the Garton Smith Trust, Re Watershed Premium Wines Ltd v Watershed Premium Wines Ltd (No 2) [2009] FCA 1145; (2009) 180 FCR 392, Barker J similarly struck out an allegation of knowing involvement in a contravention in the Corporations Act where the pleading did not identify the factual basis for the allegation of the knowledge of the parties alleged to have been involved in the relevant breach. In Young Investments Group Pty Ltd v Mann [2012] FCAFC 107; (2012) 91 ACSR 89 at [56] a unanimous Full Court (Emmett, Bennett and McKerracher JJ) observed that liability under the second limb of Barnes v Addy requires that the person "has knowledge of a dishonest and fraudulent design on the part of a fiduciary and that person assists the fiduciary to carry out that design" with requisite knowledge. Their Honours observed that: "In order to succeed in a case based on the second limb, it must be established that the fiduciary embarked upon a dishonest and fraudulent design. It must also be established that the alleged assistor had knowledge, in one of the first four senses just described, of that dishonest and fraudulent design. While dishonest and fraudulent designs can include breaches of trust as well as breaches of fiduciary duty, any breach of trust or breach of fiduciary duty relied upon must be dishonest and fraudulent." Their Honours also held that a pleading should be struck out where the Cross-Claimants had there failed to plead the key material facts as to the alleged assistor's knowledge of the relevant matters." 91Paragraphs 10.32 and 10.33 plead that Luigi and Murr were knowingly concerned in or assisted or induced IMS to commit "the said breaches of trust" concerning funds transferred to Homeline Construction. The paragraphs cross-refer to paragraphs 5-8.21 and 10-10.31 of the proposed FAXC, which plead the establishment of the IMS unit trust, the terms of the trust and payments by IMS to Homeline Construction. The substantive allegations made in respect of Luigi and Murr in those paragraphs are that an agreement as to the structure of the proposed developments was reached in late 1996 or early 1997 (proposed FAXC [5]); a further agreement was reached between Dominic and Luigi (proposed FAXC [6]); the directors of IMS were Luigi and Murr (proposed FAXC [7.1]) and shareholders of IMS included members of the Murr family including Murr, Dominic and Luigi (proposed FAXC [7.2]); Murr and Luigi negotiated a contract between IMS and Homeline Construction (particulars to proposed FAXC [8.14]); there was an understanding that Murr would represent the Murr family and Luigi the Iacullo family on the board of IMS (proposed FAXC [8.20]); Murr, Luigi and IMS made a representation to Dominic as to payments to IMS for the purposes of purchasing constructions sites (proposed FAXC [10.10]); Luigi and Murr were directors of IMS and controlled its affairs at the time of making the payments to Homeline Construction (proposed FAXC [10.24]-[10.25]); Luigi and Murr knew the funds transferred to Homeline Construction were trust finds of the IMS trust and "knowingly" caused IMS to make the transfers to Homeline Construction (proposed FAXC [10.26]-[10.27]); and Luigi and Murr failed to cause IMS to keep the transferred funds separate from IMS's own assets or to render proper accounts and records of the funds or require Homeline Construction to do so and did not cause IMS to get in or control the funds transferred to Homeline Construction or assets purchased therewith (proposed FAXC [10.28]-[10.31]). 92Paragraph 10.32 is then particularised by nine paragraphs of particulars, under the heading "Particulars of Dishonesty", eight of which are adopted in respect of paragraph 10.33 and a ninth added in respect of Murr's knowledge in the latter paragraph. First, it is particularised that the knowledge, intention, actions and failures of Luigi and Murr are the knowledge, intentions, actions and failures of IMS. This particular seeks to attribute the matters that are particularised in respect of dishonesty on the part of Luigi and Murr to IMS so as to support a finding that any breach of trust by IMS was itself dishonest. Second, it is particularised that Luigi and Murr did not honestly and reasonably believe that "in acting and in failing to act as alleged", they were acting in the interests of the beneficiaries. The relevant actions and failures to act are not identified and are presumably all or an unidentified combination of the matters pleaded in paragraphs 5 - 8.21 and 10 - 10.31 of the proposed FAXC or the substantive allegations against Luigi and Murr in those paragraphs to which I have referred above. Third, it is particularised that Luigi and Murr "knew that they had no right to commit the breaches", but the alleged breaches are also not identified and may be the same or different to the actions and failure to act referred to. 93Fourth, it is particularised that in "acting and failing to act" as alleged, Luigi and Murr were seeking to benefit Homeline Construction and Murr and that Luigi hoped to benefit by further association with Murr. Fifth, it is particularised that Luigi and Murr were, in respect of the actions and failures to act, taking specified risks that each of them knew they were not entitled to take. The actions and failures to act referred to may or may not be the same as the actions and failure to act referred to in the other particulars, and the lack of identification of the intended reference in each paragraph leaves it open to the Cross-Claimants later to contend that different combinations of the unidentified actions and failures to act are relied on in respect of the different particulars. Sixth, it is particularised that, in "acting as alleged", Luigi and Murr concealed their intention to exclude the Cross Claimants from the Hogben Street development. This particular assumes that Luigi and Murr at some point formed such an intention but does not identify when that is said to have occurred. The reference to "acting as alleged" here suggest that a further subset of the matters said to constitute actions, inactions and breaches is relied upon. Seventh, it is particularised that, in "those actions and failures", Luigi and Murr hoped that the Cross-Claimants would continue to leave their investment with IMS and "well knew" that they would be likely to refuse to invest further and call for return of their funds, if they disclosed certain matters. The concept of "failures" is introduced here but the acts or failures to act said to constitute the "failures" are again not identified. Eighth, it is particularised that Luigi and Murr were by "those actions and failures" contravening an expectation of Dominic as to the supply of accounts and concealing the true financial position of the trust. 94Ninth, it is particularised that "knowledge, conduct and intention" of Luigi and Murr was "knowledge, conduct and conduct [sic] of IMS", and Luigi was fully cognizant of "those matters". The nature of the "intention" referred to here is unclear and the scope of the reference to "those matters" also seems to me to be indeterminate, possibly referring to the matters pleaded and particularised, whether including or excluding the numerous paragraphs to which cross-reference is made, or possibly only to the particularised matters. 95It seems to me that these pleadings and particulars do not sufficiently identify the case for knowing concern, knowing assistance or inducement of a dishonest breach of trust that Luigi and Murr would have to meet. It seems to me that these pleadings and particulars are far from "exactly given", to use the language of Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 and Fortescue Metals above, and would in their present form make it impossible for Luigi and Murr to identify the case they have to meet, by deducing it from multiple cross-references to other paragraphs, unidentified "acts", "failures to act", breaches, "failures" and intentions, and a multitude of available combinations of the pleaded and particularised matters that may ultimately constitute the Cross-Claimants' case. One may test that proposition simply. To the extent that either Luigi or Murr wished to lead evidence to deny that they so acted or had the necessary knowledge so as to be liable for knowing involvement, it seems to me that it would be impossible for them to deduce the Cross-Claimants' case from the multiplicity of matters relied on (by cross-reference and particulars) so as to address it, and any attempt to do so would be exposed to a substantial risk that the Cross-Claimants would later contend some other combination of matters was pressed and had not been denied by their evidence. The particulars again contain serious allegations that should have been pleaded rather than particularised, so that the Cross-Defendants would have had the opportunity to plead to them (cf, in respect of knowing involvement in a breach of statutory duty, Addenbrooke v Duncan (No 2) [2013] FCA 820). I have also pointed above to the significance of that matter so as to allow the Court to exercise supervision over any further amendments to it by a requirement for leave. Leave for these paragraphs should not be granted. 96In my October judgment, I declined (at [118]) to grant leave for paragraphs 11.53-11.54 of the then proposed FAXC which pleaded that Luigi and Murr were dishonestly concerned in and dishonestly participated in causing IMS to dishonestly commit certain breaches of trust and failures to account on the basis that they did not adequately identify the facts alleged to give rise to the dishonesty. The corresponding paragraphs of the proposed FAXC maintain that allegation and cross-refer to paragraphs 5-8.21, to which I referred above; paragraphs 11.36-11.46, which relate to an alleged failure of IMS to account to Dominic for the profits of the IMS unit trust and repeat the pleading that Luigi and Murr were the directors of IMS; paragraphs 11.47-11.48, which pleads the Murr knew or ought to have known the terms of the trust deed; paragraphs 11.49-11.50 which plead that Luigi and Murr knew that IMS were prosecuting a number of property developments and knew that it received income and realised substantial surpluses from sale of the relevant units; and paragraphs 11.51 and 11.52, which allege that Luigi and Murr failed to take any or reasonably sufficient steps to procure specified matters. 97Luigi attacks paragraphs (j) and (k) of the particulars to paragraph 11.53 of the proposed FAXC which allege that disclosure of the profits of the Sutherland development or the preparation of accounts by IMS for 1997-1999 would have indicated to Dominic that the profit would not meet his expectations if calculated in accordance with the expenses then recorded. Luigi responds that the Cross-Claimants were aware of the profits in those and other years. I would not have declined leave for that paragraph on that basis, where that is a contested question of fact properly to be determined at a hearing. However, paragraphs (a)-(h) of the particulars of dishonesty to paragraphs 11.53 and 11.54 broadly correspond to the matters particularised to paragraphs 10.32 and 10.33, with the same mixture of unidentified actions, "failing to act", "failures", "conduct" and intention, and give rise to the same failure to identify the case which the Cross-Defendants have to meet by concealing it within unclear cross-references and multiple alternatives. Leave should not be granted in respect of these paragraphs for the same reasons that it was not granted in respect of paragraphs 10.32-10.33. 98In my October judgment, I declined to permit paragraphs 11.154-11.155 of the then proposed FAXC which pleaded that Luigi and Murr were knowingly concerned and dishonestly participated in causing Pacificon to commit specified breaches of trust and failures to account committed by it on the basis that, inter alia, they did not identify the facts alleged to give rise to the knowing involvement and should not be permitted in this form. The corresponding paragraphs of the proposed FAXC are paragraphs 11.169 and 11.170 which in turn cross-refer to paragraphs 162-166, which plead that Pacificon failed to obtain and keep records, Luigi and Murr were its directors and Luigi and Murr knew that Pacificon received income and realised surpluses from the Engadine developments and paragraphs 167-168, which plead that Luigi and Murr failed to take particular steps. I understood these paragraphs to be within Homeline Construction' wider objection to the form of the allegations of knowing involvement against Murr and Luigi generally, which was adopted by the Murr parties. Paragraphs (a)-(h) of the particulars of dishonesty correspond to the matters particularised to paragraphs 10.32 and 10.33. However, by contrast with earlier paragraphs, the allegation of knowing concern is here confined to involvement in a clearly specified failure, namely, the alleged failure to keep and maintain records by Pacificon, pleaded in paragraphs 11.162-11.165 and 11.167, rather than cross-referring to multiple alternate allegations across a wide range of paragraphs. It seems to me that the form of the particulars would not prevent Luigi and Murr pleading to that relatively straightforward allegation, and leave should be granted for the amendment in respect of these paragraphs for that reason. 99In my October judgment, I declined to permit paragraph 40 of the then proposed FAXC which alleged that Murr was "knowingly involved" in committing breaches of trust, without any identification of the facts relied upon for the assertion of knowledge. The corresponding paragraph in the proposed FAXC pleads that Murr personally caused the transfer of two strata title units in the Gladstone Street property to two entities, which are alleged to have been dispositions at undervalue to companies associated with the Murr family in breach of trust, and Murr was knowingly involved in committing those breaches of trust. The paragraph is in turn particularised by allegations that, inter alia, Murr caused the transfers to be made without requiring payment in order to satisfy claims of Homeline Building and that he knew that no valid contract or obligation to Homeline Building had been formed or, in the alternative, had failed to take appropriate steps to ensure that the properties were valued. 100The Murr parties submit that these matters should have been submitted to the referee so far as they are accounting matters involving the transfer of two strata title units which the referee took into account as part of the progress payments made by Glad Con to Homeline Building of the contract price for one of the developments. I do not accept that submission, so far as the Cross-Claimants' attack is not on the fact of an accounting for the transactions but on their propriety or legality, which was not a matter within the scope of the reference. The Murr parties also point to an issue of construction as to a letter dated 1 September 2006 between Glad Con and Homeline Building, relating to the terms on which the two units were to be transferred; however, it seems to me that that is a question for the final hearing, and not a matter which would support the grant of leave to include the relevant paragraphs if it were otherwise appropriate. Luigi contends that the underlying allegation in the proposed FAXC that the two units were transferred at an undervalue is not open to the Cross-Claimants where it was not agitated before the referee, and that the referee's report records the sale of units at the price of $450,000 each rather than $1 as alleged in the proposed FAXC. The Cross-Claimants contend that this paragraph was struck out on the basis that particulars of knowledge had not been provided, and that such particulars have now been supplied, and that the Cross-Defendants' attack is now directed to the merits of the claim, and that attack failed if it was made on the last occasion, or otherwise was not made and should not be permitted now. I do not find it necessary to address that question given the conclusion that I reach below. 101Homeline Building contends that this allegation is factually inconsistent with the treatment of the relevant sales in the referee's report, which accounted for the sale of Unit 13 on 18 December 2006 in the amount of $450,000 and the sale of Unit 14 on 4 December 2007 in the amount of $450,000. The Cross-Claimants respond that the registered transfers of the units show a consideration of $1.00 and that the referee's recording of transfers for the value of $450,000 in the accounts assumes that the transfer satisfied proper claims from Homeline Construction, the validity of which is challenged by the Cross-Claimants. Homeline Building also points out that the particulars contain an allegation that Murr "had no honest or reasonable basis for regarding the transfers as being made at a proper value". Homeline Building points out that that particular assumes that the transfers were not made at proper value, but no allegation to that effect is pleaded or particularised. 102Homeline Building also attacks the adequacy of the allegations of knowledge against Murr in this paragraph and the Murr parties adopt that criticism. Homeline Building points out that the particulars to this paragraph contain an allegation that Murr "well knew (as alleged by par 71A to 71E hereof) that no valid contract or obligation to Homeline Building Pty Ltd had been formed". However, the allegation in paragraphs 71A - 71E is that the contract which had in fact been signed was not effective and no allegation is there made that Murr knew that matter. Homeline Building also points out that the basis for the allegation of knowledge on the part of Murr is not otherwise identified. The Cross-Claimants respond to Homeline Building's criticism of this paragraph by pointing out that Murr was the signatory of the relevant contract; that no board decision authorised him to sign the contract; and he was a director at all times so he was aware of the facts relied on in that regard. However, knowledge that a contract was not specifically authorised by a board resolution is not knowledge that it is unauthorised, since many contracts signed by corporate officers will take effect by reason of their actual or apparent authority to sign them. 103It seems to me that I should not grant leave in respect of this paragraph. First, it depends on an allegation, said to be found in paragraphs 71A-71E of the proposed FAXC, that Murr knew that no valid contract had been formed with Homeline Building. However, those paragraphs do not allege, or provide any factual basis for an allegation as to, Murr's knowledge of that matter, as distinct from developing the allegation that those contracts were not legally effective. The alternative particular based on a failure to have the properties valued or independently ascertained for the value of claims for construction payments does not make clear whether actual knowledge of the position, or at least knowledge of facts that would indicate the position to Murr, is alleged and, if so, what those facts are: Farah Constructions above at [174]-[178]; Roadshow Films Pty Ltd v iiNet Ltd [2012] HCA 16; (2012) 248 CLR 42 at [110]. Second, Homeline Building also points out, and I accept, that this particular amounts to an allegation of dishonesty which should be pleaded, not particularised, so as to allow Murr an opportunity to respond to it. I have pointed above to the importance of that matter to preserve the Court's ability to exercise supervision over any further amendments to that allegation by a requirement for leave. Leave should not be granted in respect of this paragraph. 104In my October judgment, I declined (at [121]) to grant leave for paragraphs 76-77 of the then proposed FAXC which alleged knowing concern and dishonest participation by Murr and Luigi in a breach of equitable and fiduciary duties by Glad Con, again without identification of the material facts on which the allegation of knowledge or dishonesty is based. Paragraphs 76 and 77 of the proposed FAXC in turn allege that Murr and Luigi were knowingly concerned and dishonestly participated in causing "that breach" to occur. The breach which is referred to appears to be the alleged instruction given by Glad Con, Murr and Luigi to Homeline Building to perform building work in respect of the Gladstone Street project, so as to benefit Homeline Building, as pleaded in FAXC paragraphs 72-74. Homeline Building raises several criticisms of the particulars to paragraphs 76 and 77 of the proposed FAXC, which are adopted by the Murr parties. These criticisms are of a similar character to those which I have addressed above, involving additional allegations of breach of duty, knowledge and dishonesty contained in the particulars. 105The Cross-Claimants submit that the objection to these paragraphs depends on the objection to paragraphs 71A-71E. As I have pointed out above, those paragraphs do not plead, nor establish a factual basis for, any allegation that Murr or Luigi knew the matters alleged in them. These paragraphs are again particularised by reference to unidentified actions and failures to act and also contain multiple cross-references to other allegations made elsewhere in the pleadings giving rise to the lack of clarity as to the Cross-Claimants' case to which I have referred above. It also seems to me that the particulars to these paragraphs contain pleadings of material facts that, so far as they found an allegation of this character, should properly have been pleaded to allow Luigi and Murr an opportunity to plead to them, without being left to plead to particulars. I have also pointed above to the importance of that matter in preserving the Court's ability to supervise further amendments by a requirement for leave. That paragraph therefore raises the same issues as paragraphs 10.32-10.33 and 40, as to which I did not grant leave. Leave should not be granted in respect of these paragraphs for the same reasons. 106In my October judgment, I declined (at [121]) to grant leave for paragraphs 83-84 of the then proposed FAXC which again contained allegations of knowing concern and dishonest participation in a breach of equitable or fiduciary duties by Murr or Luigi, without any identification of the material facts said to support that allegation. Paragraphs 83 and 84 of the proposed FAXC in turn plead that Luigi and Murr were knowingly concerned and dishonestly participated in causing "that breach" to occur. The Murr Parties contend that the particulars are based substantially on the pleading and particularisation of proposed paragraph 61. That may well be the case, so far as the allegations of knowing concern and dishonesty turn on the absence of a contract between Glad Con and Homeline Building. Homeline Building contends that the relevant breach is not identified and that particulars of the knowing concern or participation are not provided, although particulars headed "particulars of dishonesty" are provided. Paragraph 83 is in turn particularised by substantially the same particulars of dishonesty as paragraph 76 of the proposed FAXC and the same issues arise in respect of that pleading and those particulars. The particulars of dishonesty provided in respect of the allegation of knowing concern and dishonest participation of Luigi in paragraph 84 overlap with the particulars provided in paragraph 77 of the proposed FAXC and similar issues arise. These paragraphs should not be permitted for the same reasons as paragraphs 76 - 77 of the proposed FAXC were not permitted. 107In my October judgment, I declined (at [121]) to grant leave for paragraphs 90-91 of the then proposed FAXC which contained further allegations of knowing concern and dishonest participation in a breach of equitable and fiduciary duties by Murr and Luigi, without identification of the material facts relied upon to support that allegation. The corresponding paragraphs of the proposed FAXC contain allegations that Luigi and Murr were knowingly concerned in and dishonestly participated in "that breach", which appears to be Glad Con's failure to enforce certain rights against Homeline Building, Murr and Luigi. Read in that manner, the allegation is straightforward and the particulars of dishonesty do not involve multiple cross-references and multiple alternatives so as to obscure the case that is sought to be advanced, by contrast with other allegations of this kind for which I have declined leave. Leave should be granted in respect of these paragraphs. 108In my October judgment, I declined (at [122]-[124]) to grant leave for paragraph paragraphs 134-135, 149-150, 221-224, 258-259, 284-285, 318 and 320, 335-336 and 351 of the then proposed FAXC which pleaded knowing concern and dishonest participation on the part of Murr and Luigi without any identification of the factual matters relied upon for those allegations. The proposed FAXC advance the same allegations (with minor numbering amendments in some cases) that are now particularised. No objection was specifically taken to the corresponding paragraphs of the proposed FAXC. However, I understood those paragraphs to fall within Homeline Construction's wider objection to the form of the allegations of knowing involvement against Murr and Luigi generally, which was adopted by the Murr parties. It is possible to deal with these paragraphs in a more summary way so far as they raise issues that I have considered above in respect of corresponding paragraphs. 109Paragraphs 134-135 allege that Murr and Luigi were knowingly concerned in and dishonestly participated in Glad Con's making certain payments to Badminton. No objection was taken to the allegation in paragraph 133 that Glad Con acted with dishonest design benefiting Badminton and Luigi in that regard, and the particulars of Murr's and Luigi's involvement in the matter are specific and sufficiently clear. Leave should be granted in respect of these paragraphs. 110Paragraphs 149-150 allege that Murr and Luigi were knowingly concerned in conduct pleaded in paragraphs 146-148, which allege that Glad Con made payments to Murr and a company associated with his brother which were not authorised by the terms of the trust or were in breach of identified equitable and fiduciary duties, and it is alleged that those breaches were committed by Glad Con with the dishonest design of assisting the recipients including Murr at the expense of Dominic and Lillian. The particulars to the allegations of knowing concern are specific and do not give rise to multiple alternatives so as to conceal the case that is put, by contrast with other paragraphs of this kind for which leave has not been granted. Leave should be granted in respect of these paragraphs. 111Paragraphs 224-225 (which correspond to paragraphs 221-224 of the earlier proposed FAXC) plead that Murr and Luigi were knowingly concerned in and assisted or induced IMS to dishonestly commit breaches of trust pleaded in paragraphs 219 and 223. Paragraph 219 cross-refers to paragraphs 167-218 and pleads that the failure of IMS to disclose each of those matters (which are presumably some or all of the matters referred to in those 51 paragraphs pleaded over the previous nine pages) to Dominic and Lillian was a breach of specified equitable and fiduciary duties. Paragraph 223 in turn pleads that: "By permitting Luigi and Murr to take or attempt to take for their own benefit and for the benefit of others, to the exclusion of [Dominic and Lillian] and the IMS unit trust, the benefit of the Hogben Street project, IMS breached the said duty that it owed to the unit holders, including the Cross-Claimants, not to permit, condone or acquiesce in its directors obtaining for themselves or for others the benefit of opportunities for the acquisition of construction sites within the Sydney Metropolitan area for the purpose of property development." 112The allegation of knowing concern against Mr Murr in paragraph 224 is in turn particularised by twelve particulars of dishonesty, which relevantly refer (in numerical order) to paragraphs 11.36-11.40, 11.52, 11.67, 13, 13.1,14, 170-171, 175, 177-183, 185-202, 205, 207, 210, 211-220, 223, 249, 251 and 275-280 of the proposed FAXC. In my view, this is an extreme example of a multiplication of alternatives which conceals the case that the Cross-Claimants put, of the kind to which I have referred above, and leave should not be granted in respect of this paragraph. Paragraph 225 adopts the same approach in respect of the allegation of knowing concern against Luigi and leave should also not be granted in respect of that paragraph for the same reason. 113Paragraphs 260-261 allege knowing concern and dishonest participation by Murr and Luigi in breaches of trust by IMS, which are said to have derived from payments made to Homeline Construction which were not authorised or were made in breach of the terms of the IMS unit trust (FAXC [258]) with the dishonest design of assisting Murr and Homeline Construction at the expense of Dominic and Lillian (FAXC [259]). The particulars of dishonesty in paragraph 260 specify the conduct of IMS in which Murr and Luigi is alleged to have been actively concerned by reference to specified paragraphs in the pleading which would allow that conduct to be identified, the matters alleged to have been known to Murr and Luigi, the obligations of IMS pleaded in particular paragraphs, and IMS's pleaded failure to account. Although the particulars are relatively complex, it seems to me that they disclose the case that the Cross-Defendants are required to meet, and that they do not have the vice of multiplication of alternatives so as to conceal that case to which I have referred above. Leave should be granted in respect of these paragraphs. 114Paragraphs 284-285 allege that Murr and Luigi were knowingly concerned and dishonestly participated in breaches of trust involved in an alleged failure by IMS to obtain and keep proper records and vouchers in respect of payments pleaded in the preceding paragraphs. The particulars are of a similar character to those provided in respect of paragraphs 260-261 and appear to me to make clear the case that the Cross-Defendants have to meet. Leave should be granted in respect of these paragraphs. 115Paragraph 318 alleges knowing concern by Murr in respect of payments made by Pacificon to Homeline Constructions and paragraph 320 contains a corresponding allegation in respect of Luigi in respect of a specified period. Again the particulars are relatively complex and involve cross-reference to other paragraphs of the proposed FAXC, but they do not involve a multiplication of alternatives so as to conceal the case which the Cross-Defendants have to make. Paragraphs 335-336 and 351 are of the same character. Leave should be granted in respect of these paragraphs. Next steps in the proceedings 116In many cases that there are numerous deficiencies in a pleading, the Court will find that the pleading as a whole is embarrassing and should not be permitted, and I adopted that approach in respect of the former proposed FAXC in my October judgment. I do not propose to take that approach in this judgment, because large parts of the presently proposed FAXC were not resisted or should be the subject of leave as noted above, and because, for the reasons noted below, I do not propose to allow the Cross-Claimants a further opportunity to amend. In that situation, the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings is best served by permitting those amendments to the proposed FAXC that were not resisted or for which I have held leave should be granted, rather than leaving the case to go to trial on an earlier pleading that does not include amendments that are properly made by the Cross-Claimants. 117I am comfortably satisfied that this is not a case where the Cross-Claimants should be allowed a further opportunity to replead the proposed Further Amended Cross-Claim. These proceedings have been continuing for a substantial time. I have repeatedly drawn the Cross-Claimants', and their legal representatives', attention to the complexity of the pleadings and the difficulties which that complexity raises for the just, quick and cheap resolution of the matters in dispute. When I delivered my October judgment, I expressly noted that I would allow a further opportunity to plead the relevant matters, with reluctance, and I noted the significant detriment that the delay in determination of proceedings of this complexity, involving serious allegations, places upon the Cross-Defendants to the proceedings, particularly where Luigi and the corporate entity associated with him are not represented by solicitors. 118The proceedings should now go to trial on the basis of those parts of the proposed FAXC that were not challenged or were permitted as set out above. I will hear the parties as to the time that should be permitted to the Cross-Claimants to file the proposed FAXC in that form and the further directions that should be made as to pleadings. 119In my preliminary view, each party has had a measure of success and there should be no order as to the costs of this application, other than the usual order that Dominic and Lillian pay the costs thrown away by the proposed amendments. However, I will hear any party who seeks to contend to the contrary.