Equititrust Limited v Tucker & Ors

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - STRIKING OUT - GENERALLY - further applications by the defendants to summarily dismiss parts, or all, of the plaintiff's claim, by striking out parts of the further amended statement of claim, without leave to replead, or for summary judgment - further, applications to strike out extensive parts of the further amended statement of claim on the basis of deficiency in the pleading - consideration of the relevant principles which apply on an application under Uniform Civil Procedure Rules 1999 (Qld) r 171 and on an application for summary judgment by a defendant under r 293 or the inherent jurisdiction of the court, before defences have been filed

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - PLEADINGS - GENERALLY - application by the plaintiff under Uniform Civil Procedure Rules 1999 (Qld) r 377(1) and, to the extent necessary, r 376(4), for leave to file an amended Claim, to add a claim for damages for breach of a contractual duty alleged to arise under a solicitor's retainer, which had formerly been pleaded as a breach of the solicitor's fiduciary duty - where the limitation period has now expired - whether the amendment is the addition of a new cause of action - whether, if so, the conditions for leave to be granted to add a new cause of action after expiry of the limitation period under r 376(4) are satisfied

Corporations Act 2001 (Cth) s 183, s 421

Legal Profession Act 2007 (Qld) s 249

Uniform Civil Procedure Rules 1999 (Qld) r 5, r 171, r 376, r 377

Abeles v PA (Holdings) Pty Ltd [2000] NSWSC 1008; (2000) 18 ACLC 867

Agar v Hyde [2001] HCA 41; (2000) 201 CLR 552

Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 223 CLR 251

Allonnor Pty Ltd v Doran [1998] QCA 372

Althaus v Australia Meat Holdings Pty Ltd [2006] QCA 412; [2007] 1 Qd R 493

Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279

Barclay Mowlem Construction Limited v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82

Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252

Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256

Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133; (2010) 189 FCR 356

Borsato v Campbell [2006] QSC 191

Bride v Freehill Hollingdale & Page & Ors [1995] WASC 561

Bruce v Odhams Press Ltd [1936] 1 KB 697

Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181

Carey v Korda (No. 2) [2011] WASC 220; (2011) 85 ACSR 331

Chew v R [1992] HCA 18; (1992) 173 CLR 626

Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293

Dey v Victorian Railway Commissioners (1949) 78 CLR 62

Draney v Barry [2002] 1 Qd R 145

Farah Constructions v Say-Dee Pty Ltd (2007) 230 CLR 89

Firstmac Ltd v Hunt & Hunt (A Firm) [2018] QSC 258

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125

Graeme Webb Investments Pty Ltd v St George Partnership Banking Ltd [2001] NSWCA 93; (2001) 38 ACSR 282

Grove v Flavel (1986) 43 SASR 410

Hillig v Darkinjung Pty Ltd [2007] NSWSC 683

Huang v Wang [2015] NSWSC 510

Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (in liq) [2008] FCA 1920; (2008) 252 ALR 41

Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343

Johnson Tiles Pty Ltd v Esso Australia Ltd (No 2) [2000] FCA 212; (2000) 97 FCR 175

Kelaw Pty Ltd v Catco Developments Pty Ltd (1989) 15 NSWLR 587

Kordamentha Pty Ltd v LM Investment Management Ltd & Anor [2016] QSC 183

Land Enviro Corp Pty Ltd (in liq) v HTT Huntley Heritage Pty Ltd (2017) 123 ACSR 1

Littler v Price [2004] QCA 383; [2005] 1 Qd R 275

McNamara v Flavel (1988) 13 ACLR 619

Mio Art Pty Ltd v Macequest Pty Ltd [2013] QSC 211; (2013) 95 ACSR 583

MSI (Holdings) Pty Ltd (In Liq) v Mainstreet International Group Ltd [2013] 2 Qd R 253

O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204

Paul v Westpac Banking Corporation [2016] QCA 252; [2017] 2 Qd R 96

Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457

R v Byrnes [1995] HCA 1; (1995) 183 CLR 501

Re HIH Insurance; ASIC v Adler [2002] NSWSC 171; (2002) 168 FLR 253

Re Yates, National Mutual Life Association v Catco Developments Pty Ltd (1989) 88 ALR 583

Remmington v Scoles [1897] 2 Ch 1

Renshaw v New South Wales Lotteries Corporation Pty Ltd [2018] NSWSC 1954

Republic of Croatia v Snedden [2010] HCA 14; (2010) 241 CLR 461

RNB Equities Pty Ltd v Credit Suisse Investment Services (Australia) Limited (No 2) [2019] FCA 1385

Robert Bax & Associates v Cavenham Pty Ltd [2012] QCA 177; [2013] 1 Qd R 476

Royalene Pty Ltd v Registrar of Titles [2007] QSC 59

Sheahan v Carrier Air Conditioning Pty Ltd [1997] HCA 37; (1997) 189 CLR 407

Sherrin Hire Pty Ltd v Sherrin Rentals Pty Ltd [2015] FCA 1107

Spector v Ageda [1973] Ch 30

Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118

Target Holdings Ltd v Redferns [1995] UKHL 10; [1996] AC 421

Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507

Thomas v Queensland [2001] QCA 336

Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15

United Petroleum Australia Pty Ltd v Herbert Smith Freehills (2018) 128 ACSR 324

Verner v Giannoros [2016] NSWSC 242

Visbord v Federal Commissioner of Taxation [1943] HCA 4; (1943) 68 CLR 354

Wickstead v Browne (1992) 30 NSWLR 1

Williams & Humbert v W & H Trade Marks (Jersey) Ltd [1986] 1 AC 368

X (Minors) v Bedfordshire County Council [1995] UKHL 9; [1995] 2 AC 633

Youyang Pty Ltd v Minter Ellison Morris Fletcher [2003] HCA 15; (2003) 212 CLR 484

PD Finn's Fiduciary Obligations (1977, Law Book Co)

D O'Brien QC and P Hackett for the First Defendant, Second Defendant and one of the Fifth Defendants (Mr Tucker)

D Clothier QC and B Kabel for one of the Fifth Defendants (Mr Cowen) and the Sixth Defendant

D Tucker for the First Defendant, Second Defendant and one of the Fifth Defendants (Mr Tucker)

DLA Piper for one of the Fifth Defendants (Mr Cowen) and the Sixth Defendant

[1] This proceeding was commenced in July 2018. Over a year later, the matter has not progressed beyond interlocutory fights about the statement of claim. No defences have been filed. This decision is the second occasion on which I have dealt with applications to strike out all or part of the statement of claim[1] and, additionally on this occasion, an alternative application for summary judgment for the first, second and one of the fifth defendants (Mr Tucker) on part of the claim.

[2] The proceedings have been discontinued against the third defendant, Mr Kennedy, and the fourth defendant, MS Asia Debt Acquisition Ltd.

[3] A Further Amended Statement of Claim was filed on 18 June 2019 (FASOC). The applications the subject of this judgment are:

• (1) an application, filed on 19 June 2019, by the plaintiff for leave to amend the Claim;
• (2) an amended application, filed on 15 July 2019, by Mr Richard Cowen (one of the fifth defendants) and the sixth defendant (referred to as the Cowen applicants) seeking orders striking out various paragraphs of the FASOC, without leave to replead; and directions (the Cowen application); and
• (3) an amended application, filed on 12 August 2019, by the first defendant, second defendant and Mr David Tucker (one of the fifth defendants) (referred to as the Tucker applicants) seeking orders striking out the whole of the Claim and FASOC; alternatively, striking out parts of the FASOC, without leave to replead; alternatively, for particulars of various paragraphs of the FASOC; alternatively, for summary judgment in favour of the Tucker applicants on part of the plaintiff's claim; and for directions (the Tucker application).

[4] Further applications for security for costs have also been filed by the Cowen applicants and the Tucker applicants because, as it is put in the Tucker applicants' submissions, the amount of security previously ordered "has been exhausted" - in large part due to the extensive disputes about the statement of claim already engaged in. Those applications, together with an application by the plaintiff in relation to security for costs, have been adjourned to a date to be fixed, following determination of the present applications.

"(1) The purpose of the rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.

(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court."[3]

[7] I keep that steadily in mind in determining these applications, as rule 5(2) requires the court to do. The parties (and their lawyers) are also obliged to act consistently with rule 5. I am not certain that has been the case, to date.

[8] In relation to the strike out applications, the applicants rely upon r 171 UCPR, which confers a discretion on the court to strike out all or part of the statement of claim if it, relevantly, discloses no reasonable cause of action; has a tendency to prejudice or delay the fair trial of the proceeding; or is otherwise an abuse of the process of the court.

[9] Where the effect of the invocation of the power would be to summarily dismiss a party's claim, or part of it, the court is to adopt a cautious approach and the discretion should only be exercised in the clearest case.[4] As Mackenzie J said in Royalene Pty Ltd v Registrar of Titles [2007] QSC 59 at [6] this "is especially so where the case is pleaded as a circumstantial one and the inference to be drawn from evidence critical to determining liability is not common ground and the evidence is untested".

[10] The focus of such an application is the pleading itself.[5] As such, the court ordinarily assumes the factual allegations made by the plaintiff can be established;[6] particularly where the application is brought at an early stage.[7] Although, the court is not limited to receiving evidence about the pleading (r 171(3)). Nevertheless, the apparent improbability of impugned allegations of fact does not justify the exercise of the power to strike out a pleading, because "to enter upon the question of their truth or falsehood would be trying the action prematurely".[8]

"4. It is, I think, important when approaching an issue of that kind to bring to mind the contemporary purposes of pleadings. The purposes of pleadings are, I think, well known and include the definition of the issues to be determined in the case and enabling assessment of whether they give rise to an arguable cause of action or defence as the case may be, and apprising the other parties to the proceedings of the case that they have to meet.

1. In my view, the contemporary role of pleadings has to be viewed in the context of contemporary case management techniques and pre-trial directions. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly the exchange of written submissions.
2. Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and appraising the parties to the proceedings of the case that has to be met.
3. In my view, it follows that provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and appraising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
4. Most pleadings in complex cases, and this is a complex case, can be criticised from the perspective of technical pleading rules that evolved in a very different case management environment. In my view, the advent of contemporary case management techniques and the pre-trial directions, to which I have referred, should result in the Court adopting an approach to pleading disputes to the effect that only where the criticisms of a pleading significantly impact upon the proper preparation of the case and its presentation at trial should those criticisms be seriously entertained."[18]

[16] Martin CJ's observation in [8] reflects the observation made many years earlier, by Lord Templeman in Williams & Humbert v W & H Trade Marks (Jersey) Ltd [1986] 1 AC 368 at 435-436 that:

"My Lords, if an application to strike out involves a prolonged and serious argument the judge should, as a general rule, decline to proceed with the argument unless he not only harbours doubts about the soundness of the pleading but, in addition, is satisfied that striking out will obviate the necessity for a trial or will substantially reduce the burden of preparing for trial or the burden of the trial itself."

[17] Also in the Barclay Mowlem case, Martin CJ was critical of objections to the pleading which were "pedantic and pettifogging in nature" (at [9]); and drew a distinction between the "lawyer looking at that pleading, genuinely interested in knowing what issues are to be tried and the case that has to be met, [who] would have no difficulty in ascertaining those matters" (at [10]) and the "lawyer interested in technical advantage, obfuscation and delay", "feign[ing] ignorance of the substantive issues that emerge from that pleading and the case which has to be met" (at [12]).

[18] Also relevant in this case is the principle that where a court determines on a strike out application that certain claims ought to proceed (or for that matter where there is no challenge to certain claims), it will "hesitate before [striking out another claim] notwithstanding that the legal basis for it may be doubtful or problematic in circumstances where the court will nevertheless be required to hear and determine substantially the same factual matters in respect of the remaining cause[s] of action".[19]

[19] The application for summary judgment by the Tucker applicants relies on r 293 of the UCPR. According to its terms, that rule does not apply as no notices of intention to defend have yet been filed. The Tucker applicants call in aid r 135 UCPR, which empowers the court to give a defendant leave to take a step in a proceeding, before filing a notice of intention to defend (the rule under which the defendants have already been given leave to bring the strike out applications). In an appropriate case, rr 5 and 367 may enable such an application to be brought prior to a defence being filed.[20] Alternatively, the defendants rely upon the inherent jurisdiction of the court to protect its processes from abuse. In that respect, it was uncontroversial that the relevant principles are as articulated in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129, requiring (variously expressly) that the case of the plaintiff be so clearly untenable that it cannot possibly succeed. In the circumstances of this case, I would be disinclined to grant leave to bring a summary judgment application under r 293, before a defence is filed. If there was to be summary dismissal of a part of the plaintiff's claim, at this early stage, before any defence is filed, in my view that would only be appropriate if the test from was satisfied. Given the view I have formed on the merits, this is an academic question, as I am not persuaded a basis for summary dismissal has been shown.

Allegations of breach of the express trust created by s 249 of the Legal Profession Act

[22] The Tucker and Cowen applicants' previous challenge to this part of the statement of claim was addressed at [20]-[46] and [55]-[57] of Equititrust No. 1. It is agitated again on the present applications, by reference to amendments made in the FASOC. But essentially the same point is made: that the plaintiff's claim for breach of the express trust created by s 249 of the Legal Profession Act 2007 (Qld) is legally untenable because it cannot, as a matter of law (or fact) be contended that the money paid into the Tucker & Cowen trust account (and, later, the TCS Solicitors' trust account) was received "on behalf of" Equititrust; and accordingly s 249 has no application. In addition, there are said to be other deficiencies in this part of the pleading.

[23] Relevant to this issue, the Cowen applicants seek orders striking out [95]-[101], [105]-[109] and [126A] of the FASOC, without leave to replead. The Tucker applicants seek the same orders for striking out (including [14(c)], [15(a)(i)]), but also apply for summary judgment on this part of the plaintiff's claim.

[24] The following is an outline of the plaintiff's case relevant to, inter alia, the claim for breach of trust under s 249 of the Legal Profession Act (references are to paragraphs in the FASOC):

• (1) At all material times Equititrust Ltd was the trustee of a trust called the Equititrust Premium Fund (EPF). Its business was the lending of money secured against real property by first or subsequent mortgages. Its assets consisted principally of cash on deposit with banks, loans to borrowers and the mortgages that secured the repayment of those loans: [1] and [2].

Equititrust and BOSI were parties to a loan facility entered into in June 2007, which was secured by mortgage securities over the assets in the EPF Loan Book and guarantees by Equititrust in its own right and from a company associated with Mr McIvor, the sole member of Equititrust: [3] and [34]. The facility was extended, by agreement reached in December 2010, which included provision for BOSI to charge a "Risk Fee" and an "Overdue Rate" of interest in the event of default in repayment of any amount due: [35]-[40]. In February 2011, BOSI served a default notice on Equititrust, for failure to pay an amount due under the facility: [41]. As at 11 July 2012, BOSI had not imposed the Risk Fee or the Overdue Rate: [44]. Mr Tucker and Mr Kennedy had a role in securing that indulgence: [42]. As at 12 October 2011, the debt due to BOSI was $7.8 million (the Risk Fee and Overdue Rate not having been charged): [43].

(9) On 20 April 2012 Equititrust was placed into liquidation: [7].

(10) The directors of Equititrust had considered and discussed the amount which Equititrust as trustee of the EPF was likely to recover from borrowers and guarantors at the monthly meetings, attended by Mr Tucker between September 2010 and October 2011 and Mr Kennedy between May 2010 and October 2011: [29].

(11) A detailed discussion of each of the loans in the EPF Loan Book and the likely recoverable value thereof took place at a meeting on 14 June 2011, in which Mr Tucker and Mr Kennedy participated: [30].

(12) Further detailed discussion of each of the loans took place at meetings on 12 and 17 October 2011, attended by Mr Tucker and Mr Kennedy: [31].

(13) As at 12 October 2011, the amount which Equititrust as trustee of the EPF was likely to recover from the EPF Loan Book was a sum of up to $35 million, and in any event, substantially more than $2 million: [32].

(14) As at 13 April 2012, no event had occurred which materially altered the value of the EPF Loan Book: [33].

(15) As at 13 April 2012, Equititrust was indebted to BOSI for just over $6.8 million (the BOSI Debt). Equititrust's obligations to BOSI, under various transaction documents, were secured by various instruments registered under the Personal Property Securities Act 2009 (the BOSI Securities): [54].

(16) In about April 2012, but prior to 13 April 2012, Mr Kennedy became aware of another entity (AET) proposing to acquire the EPF Loan Book from BOSI, and Mr Kennedy offered to acquire the EPF Loan Book from that entity (should it succeed in its acquisition) for $2 million: [55] and [56].

(17) Mr Kennedy informed Mr Tucker of the opportunity to acquire the EPF Loan Book, sought his assistance, and invited him to participate. Mr Tucker agreed to participate and assist in the acquisition: [60].

(18) MS Asia Debt Acquisition Ltd was registered as a company in Hong Kong on 29 June 2012. Mr Tucker and Mr Kennedy (and a third person, Mr Howard) are the ultimate beneficial owners of companies incorporated in the British Virgin Islands which are the shareholders of MS Asia: [17]-[27] and [77]-[78].

(The sums banked to the trust account of Tucker & Cowen are referred as "the Tucker & Cowen Receipts").

(29) In respect of all sums comprising the Tucker & Cowen Receipts, inter alia:

• (a) the only persons competent and authorised to give instructions to Tucker & Cowen in the conduct of the said retainers [referred to in [96C] (a) and (b)] were the BOSI Receivers for the SLOT Payment and the Receivers for all other receipts;
• (b) the only persons from whom Tucker & Cowen, in acting as solicitors, took instructions were the BOSI Receivers for the SLOT Payment and the Receivers for all other receipts; and
• (c) the client of Tucker & Cowen was Equititrust (as trustee of the EPF); and
• (d) each sum was paid to Tucker & Cowen Solicitors Trust Account on behalf of Equititrust as trustee of the EPF: [96C].

(29) Therefore, Tucker & Cowen received the Tucker & Cowen Receipts on behalf of, and on trust for, Equititrust as trustee of the EPF. By reason of s 249(1) of the Legal Practitioners Act, the firm was obliged to hold each sum making up the Tucker & Cowen Receipts exclusively for Equititrust as trustee, and to disburse only on a direction by Equititrust: [96D].

(30) Similar allegations are made in relation to TCSS, in relation to sums totalling just over $58,650, paid into its trust account, and received on behalf of and on trust for Equititrust, to which the obligation under s 249 applies: [98A]-[98C].

(31) Mr Cowen, as a principal of TCSS, is obliged by force of s 244(1) of the Legal Practitioners Act to discharge the obligations of the firm, under, inter alia, s 249: [101].

(32) Tucker & Cowen failed, in breach of the trust imposed by reason of s 249(1), to deposit the Tucker & Cowen Receipts into a general trust account for Equititrust (as trustee of the EPF) and instead, in breach of the said trust, paid the sums into a general trust account for MS Asia and, as to the sum of $500,000, into a general trust account for Worrells; have failed to pay any of the sums to Equititrust; and have paid all the Tucker & Cowen Receipts[24] to other persons: [105], [106] and [108]. Likewise, in relation to TCSS: [107], [109].

(33) It is further alleged that, of the funds paid away by Tucker & Cowen from its trust account, not less than (about) $12,500,000 was paid to MS Asia and, thereafter, to each of the companies which are shareholders of MS Asia, of which Mr Tucker, Mr Kennedy or Mr Howard are the ultimate beneficiaries: [112]-[112C] and [77].

in order to discharge the indebtedness of the Company [Equititrust] to the Chargee [MS Asia]."

(2) Clause 7.1 provides: "To the full extent permitted by law the Receivers are, and acts as, the agents of the Company and unless and until the Chargee otherwise determines and advises the Receivers by notice in writing."[42]

(3) Clause 9.1 provides: "The Receivers agree with the Chargee that unless otherwise directed by the Chargee he will pay or cause to be paid to the credit of the account or accounts (set out by him in respect of the appointment, details of which he will provide to the Chargee) all moneys and negotiable securities which he or his servants or agents may from time to time receive in respect of or in the course of the appointment or in respect of any assets or property the subject of or charged under or by virtue of the Security and that all such moneys and securities will be paid into one of the bank accounts forthwith upon receipt of the same by the Receiver and by his servants or agents and forthwith upon the same coming under the control of the Receiver his servants or agents and that all such moneys in those bank accounts will be paid after payment of any statutory priority debts:-

• (a) First - in payment of all costs, charges and expenses properly incurred by the Receivers in connection with the appointment (including remuneration as provided for in this Deed) and/or incurred by the Chargee in connection with the appointment of the Receivers or in connection with the realisation of the assets of the Company.
• (b) Secondly - in payment of debts which the Company and/or the Receivers are required by law to pay in priority.
• (c) Thirdly - in such short term investments as the Receivers may see fit.
• (d) Fourthly - towards payment of all principal, interest and other moneys secured by the Security until the whole of the indebtedness and liability of the Company to the Chargee secured by the Security has been duly paid to the Chargee."[43]

[37] Just as the factual circumstances are murky, and warrant a trial, I consider there are arguable legal issues which similarly militate against summary dismissal of this part of the plaintiff's case.

[38] The unusual and limited nature of the agency relationship created by a provision such as clause 7.1 is emphasised by the applicants.

"The mortgage debenture [which provided for the appointment of a receiver of the mortgaged premises, and for the receiver to be the agent of the mortgagor] is an example of what Williams J in Visbord v Federal Commissioner of Taxation[44] described as 'a well-established legal device for a mortgagee, upon default by a mortgagor, to have the right to appoint a receiver, who is to be the agent of the mortgagor, so that the mortgagee obtains the benefits without being subject to the liabilities of a mortgagee in possession.' Although a receiver appointed with powers such as those contained in cl 19 is the agent of the debtor company so that, in his dealings with third parties, his acts are binding on that company, the receiver is not treated as an ordinary agent of the company in exercising powers (including the power of sale of the company's assets) which are conferred for the purpose of realisation of the security by the mortgagee. The receiver is appointed not for the benefit of the company but for the benefit of the mortgagee.[45] The special nature and limited extent of a receiver's duty to the company in exercising his powers[46] do not deny to the receiver's acts done in exercise of those powers the character of acts done by the company's agent."

[40] In the same case, Dawson, Gaudron and Gummow JJ said (at 431-433):

"... Clause 19 [of the mortgage debenture] further stated that:

'PROVIDED ALWAYS that every such Receiver shall be the agent of [the company] and [the company] alone shall be responsible for his acts and defaults ...'

It is common ground that, upon the making of the winding-up order in respect of [the company], this agency ceased. That is to say, the receiver 'could no longer pledge the credit of the company'.[47] Moreover, even when the agency was operative, it was one with 'some peculiar incidents',[48] the 'control exercisable by the company as principal [being] circumscribed by the duty which the receiver owes to the debentureholders'.[49] In Visbord v Federal Commissioner of Taxation[50], Williams J, after observing that the receiver as agent of the mortgagor 'occupies a very special position' continued:

'He is appointed to and may be removed from office by the mortgagee. He can demand and recover all the income of which he is appointed receiver by action distress or otherwise in the name either of the mortgagor[51], or of the mortgagee. If the mortgagor has attorned tenant to the mortgagee, the receiver can therefore sue the mortgagor for the rent in the name of the mortgagee. He can only insure or do necessary or proper repairs to the mortgaged property to the extent to which he is directed to insure or do such repairs by the mortgagee in writing. The mortgagor is unable to instruct him to do anything contrary to his statutory duties or to dismiss him. If the mortgagor dies the appointment of the receiver is not terminated[52]. The compulsory winding up of a company operates as a dismissal of all the company's servants and agents. The company cannot authorise the receiver to do any act which it is unable to do itself, so that it cannot empower the receiver, after the date of the liquidation, to carry on its business so as to create debts provable against the unmortgaged assets of the company (Gosling v Gaskell[53]; Thomas v Todd[54]); but the receiver can still continue to exercise his powers in the name of the company although the company is no longer liable for any debts which he may incur in doing so[55]. See also In re Courts (Emergency) Powers Act 1939 and S Brown & Son (General Warehousemen) Ltd[56]; In re Wood's Application[57].'

These peculiarities become less so upon consideration of the reasons for the inclusion of a provision such as cl 19. These concern the protection or advancement of the interests of the secured creditor and the receiver, not those of the borrower. What Williams J[58] described as this 'well-established legal device' was designed for the secured creditor to obtain the benefits without being subject to the liabilities of the mortgagee in possession. The stipulation that in exercising the powers set out in cl 19 the receiver was to be agent of [the company] assisted the receiver by imposing liability in respect of dealings by the receiver with third parties upon [the company] rather than upon the receiver personally..."[59]

[41] The first argument of the applicants is that, once Equititrust was in liquidation (on 20 April 2012), there could be no agency relationship between the Receivers and Equititrust (relying upon Sheahan at 432[60]). Accordingly, the applicants contend that, even if it be the case that Tucker & Cowen were acting for the Receivers, rather than MS Asia, it cannot be said that any moneys received, being the proceeds of realisation of assets by the Receivers, were received "on behalf of" Equititrust.

[42] But the plaintiff submits that the point was not decided in Sheahan (which proceeded on the basis this was "common ground") and, further, points to contrary authority, in the decision of the New South Wales Court of Appeal in Graeme Webb Investments Pty Ltd v St George Partnership Banking Ltd [2001] NSWCA 93; (2001) 38 ACSR 282 at [57] per Fitzgerald JA, in support of the proposition that, after compulsory winding up, a receiver continues to have a limited agency on behalf of the company in so far as such an agency is compatible with the statutory winding up scheme.[61] Even in Sheahan, it seems to me the majority was not saying the agency for all purposes ceases on a winding up - although the receiver "could no longer pledge the credit of the company" after winding up. This seems clear, from the reference to Visbord (on p 432 of Sheahan), which includes, at the end of the passage quoted, the statement that "the receiver can still continue to exercise his powers in the name of the company although the company is no longer liable for any debts which he may incur in doing so". I accept the submission for plaintiff that there is, at the least, a legal issue which is arguable and ought not be determined on a summary basis.[62]

[43] Another issue is whether it can be contended that Tucker & Cowen were the solicitors for Equititrust, such that the moneys received into the trust account could be said to be held "on behalf of" Equititrust? The Cowen and Tucker applicants rely upon [1995] WASC 561 and ; as authority for the proposition that they were not. It is clear from that, apart from the "agency" between the receiver and the debtor created by (in that case) the mortgage, there was no other basis on which it could be contended the solicitors, Freehills, acted for the mortgagor. Both the mortgagee bank, and the receivers, had utilised the services of Freehills to give legal advice in connection with the administration of the mortgagor's affairs (at p 5). The mortgagor had not; it was relying solely upon a derivative, or "sub-agency" argument, to contend the receiver's solicitors were also the mortgagor's solicitors (at p 10). That argument was rejected.

"It is true that actual sales and property realisations could only have been performed by the companies themselves since the lender was not in possession. To the extent that the receivers actually procured those sales for the companies then the receivers did this on behalf of the companies. However, in considering the exercise of their legal powers the receivers were not acting on behalf of the companies."[64]

[45] Edelman J's decision was affirmed on appeal: Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181. As Murphy JA (with whom Martin CJ and Newnes JA agreed) said at [76]-[77]:

"[76] The correct conclusion to draw is that it was the Receivers, as principals, who retained Corrs to advise them in relation to their realisation of the Company's assets on behalf of the mortgagee, and in the exercise of their powers and the performance of their duties, as receivers and managers of the companies in question. ...

[77] That is not to say that the Receivers, having obtained and received advice in that capacity, would not thereafter be acting as agents for the company in effecting the sale of assets. When, for example, they (directly or through the solicitors) negotiated with third parties, entered into contracts for sale, corresponded with local authorities or undertook searches and the like, the Receivers clearly would be acting as agents of the company in question."

[46] As it was put by Murphy JA in Carey v Korda at [78], the point is that it could not be said that merely by virtue of the agency under the charge, the companies in receivership must be regarded as the clients of the solicitors retained by the receivers.

[47] In the present case, the position is less clear because Tucker & Cowen had acted as the solicitors for Equititrust, in debt recovery retainers, for many years prior, and, on the plaintiff's case, continued to do so after August 2012 (when the (MS Asia) Receivers were appointed). But even if Equititrust is not "the client" of Tucker & Cowen, since the Receivers were acting as agents for Equititrust in realising the assets, in my view it is open to argue that the money received, as proceeds of the realisation of assets by the Receivers, and paid into the solicitor's trust account [as distinct from the Receiver's bank account, as in Sheahan], was received on behalf of Equititrust.

[48] In Sheahan, the issue was whether payments made by the receiver out of the bank account opened by the receiver pursuant to s 421 of the Corporations Law, to a creditor of the company, to secure the provision of continued services, in the course of carrying on the business of the company, were voidable as preferences, for which it was necessary to consider whether the payments were out of the money of the company. The majority (Dawson, Gaudron and Gummow JJ) held that they were not. Brennan CJ (at 421 and 423) and Kirby J (at 451) considered that they were.

[49] The reasoning of the majority commenced with an analysis of the legal and beneficial rights of the respective interested parties in relation to the receiver's bank account opened and maintained under s 421 (commencing at p 428). Their Honours said, at 430:

"The effect of s 421, in combination with cl 22 of the debenture [which set out the order of priority of payments to be made by the receiver], at least goes so far as to oblige the receiver to account for and to apply the proceeds in the account in accordance with the terms of the debenture.[65] It is unnecessary to determine whether the receiver held the chose in action represented by the s 421 account as a trustee, 'in the full sense', for the Bank [the secured creditor]. It is sufficient for the purposes of this case that the moneys in the account out of which the three payments in question were made were in no sense either the moneys of [the company] or moneys held to the order or disposition of [the company]."[66]

"In our view, in characterising the payments made to [the service providing creditor], it is important to have regard to their source, namely the funds in the receiver's account established in conformity with the requirements of s 421(1) of the Corporations Law and to the control of those funds in the manner discussed earlier in these reasons, in particular by cl 22 of the debenture. It was in exercise of the authority conferred upon him by the debenture to deal with the moneys in this fashion that the receiver was enabled to make the payments. They were payments by cheques which could only be drawn upon the account by the receiver. It is, therefore, correct to characterise them as payments made by the receiver.

When, for example, the receiver, in obedience to cl 22 of the debenture, applied the moneys received on realisation of the security in payment of his remuneration or in payment to the [secured creditor] Bank or in payment of any surplus to [the company], it would be absurd in any of these instances to identify that activity as one performed as agent for [the company]. Likewise when those moneys were applied by the receiver in payment of an outstanding obligation of [the company] to a third party, the receiver having made a determination of the fitness to do so."[67]

[51] It is clear, from these passages, that both the statutory context in which the receiver's bank account was established, and the authority and obligation conferred by the mortgage debenture on the receiver, in respect of money in the receiver's bank account, were significant to the majority's decision, that payments made by the receiver, out of that bank account, in accordance with the mortgage debenture, were payments made by the receiver, not by (or on behalf of) the company.

[52] It is at least arguable that, in contrast, where the proceeds of realisation of assets have not yet been paid into a Receiver's bank account, they are held on behalf of the company. It is noteworthy that s 421(1)(b) and (c), now of the Corporations Act 2001, use the phrase "money of the corporation". At the point of realisation of the assets, the proceeds are the money of the debtor corporation. It is by operation of the security document that those proceeds can be taken into the hands of the receiver, and dealt with in accordance with their contractual obligation under the debenture or deed of appointment (or otherwise as the case may be). Brennan CJ's view that, even after being paid into the receiver's bank account, those moneys were the company's money in the hands of the receiver (see at 421 and 423) did not prevail. Dawson, Gaudron and Gummow JJ reached a different view, as already discussed above. But it seems to me reasonable to argue that there is a question mark over the proper characterisation of the proceeds, before they are paid into the receiver's account.

[53] If the correct analysis is that, in taking steps to realise the assets, the receiver is acting as agent for the company (as confirmed in Carey v Korda at [47] per Edelman J and, on appeal at [77] and [81] of the Full Court's decision), then moneys which are the proceeds of such realisation, which are paid into the trust account of the solicitor for the receiver, are arguably moneys paid to the receiver on the behalf of the company.

[54] Given the above analysis of the factual and legal issues, I am not persuaded that the breach of trust argument should be summarily dismissed, whether that is on the basis of striking out with no leave to replead, or on the basis of summary judgment. Material facts have been pleaded to support the breach of trust argument and there is an arguable legal basis to support the pleaded case. There are complex and arguable issues of fact and law raised by the FASOC, which warrant proper determination following a trial. Even if the legal basis for this part of the plaintiff's claim was properly considered doubtful or problematic, this is a case in which the court will nevertheless be required to hear and determine substantially the same factual matters in respect of the remaining causes of action, which also militates against striking out the claim.

"On or about 28 February 2013, by an instrument in writing prepared by Tucker & Cowen, the Receivers appointed Equititrust, pursuant to the Deed of Appointment, as their agent to take possession of real property of Handley Heights Pty Ltd..., a debtor of Equititrust, namely [property description]."

[57] The allegation is particularised by reference to the evidence of Mr Peldan at his (s 19) examination and from the Receivers' Notice to ASIC dated 11 March 2013. Paragraph [92] is in a similar form, in relation to property of another debtor, MQ Ink Pty Ltd.

[58] The plaintiff's response is that what is alleged in those paragraphs might be unusual, but it is what (it contends) happened (by reference to the documents). If the defendants want to plead that it did not happen, they can do that, but it does not support striking out the paragraphs.[69] The allegations in each of [88] and [92] are of a step taken, in a particular way, in the controllerships of two of Equititrust's debtors, Handley Heights Pty Ltd and MQ Ink Pty Ltd (the taking of possession of certain real property). In each case, that allegation is followed by an allegation of receipt, by the Receivers, as agents of Equititrust, of a sum of money that was paid into the Tucker & Cowen trust account (at [88A] and [92A]) and which forms part of the Tucker & Cowen Receipts ([95A]). By reference to schedule 6 to the FASOC, it is apparent that the amount referred to in [88A(a)] is said to be "settlement proceeds" of the sale of the Handley Heights property and the amount referred to in [92A(a)] is the "settlement funds" of the sale of the MQ Ink property. In that context, [88] and [92] are part of the pleaded factual matrix in which part of the Tucker & Cowen Receipts were received; whether that be unusual or otherwise. I accept the plaintiff's submissions that no basis for striking them out has been shown.

[59] Next, the allegation in [95(a)] that Tucker & Cowen "have continued to act as solicitors on the record for Equititrust" in various retainers is said to be confusing, as not all the retainers are in respect of (court) proceedings, and solicitors do not act on the record in retainers, only in proceedings. This is strictly correct. I place this complaint in the category of amendments that the plaintiff should consider making (along with correcting some typographical, and cross-referencing errors), to avoid pedantic responses in the defences when filed (see paragraph [134] below).

Allegations of breach of duty under s 183(1) of the Corporations Act

[70] The Cowen applicants apply to strike out paragraphs [44A], [49] and [109A] (breaches of s 183 by Mr Tucker), and also [123A] to [123G] and [127F] (allegations of Mr Cowen being knowingly concerned in the breaches by Mr Tucker, and the claim of damage suffered) of the FASOC. The Tucker applicants similarly apply to strike out these paragraphs and also (in relation to the allegations of breach of s 183) the particulars to paragraph [29], and paragraphs [32], [33], [42], [43(a)], [45(b)], [127B] and [127E].

[71] The crux of this part of the plaintiff's claim against Mr Tucker is that in the course of, and by reason of, acting as a director of Equititrust he came to know the information set out in [44A] (the Tucker Director Information); he was subject to a duty to Equititrust as trustee of the EPF under s 183(1) of the Corporations Act not to make improper use of that information to gain advantage for himself or someone else [49]; by taking advantage of the opportunity to acquire the EPF Loan Book, and the BOSI Debt and Securities, for $2 million (through MS Asia, in which he has a beneficial interest, with Mr Kennedy and Mr Howard), from which he made a profit, he improperly used that information, for the purpose of gaining an advantage for himself, or alternatively for MS Asia, Mr Kennedy or Mr Howard; and so breached the duty owed under s 183(1) [109A].

[72] The applicants make a number of complaints, as follows. Many of the complaints about [44A] are made also in relation to [44B] (which relates to information Mr Tucker is said to have come to know in the course of and by reason of acting as the solicitor for Equititrust).

[73] Among other things, [44A] alleges that in the course of and by reason of acting as a director of Equititrust, Mr Tucker came to know "the likely recoverable value of the EPF Loan Book as at 12 October 2011 (as pleaded in paragraph 32 above, including the names and details of the borrowers, the guarantors and the associated securities, pleaded and particularised in paragraph 29 above)" [44A(c)(i)]. At paragraph [32] it is alleged that, "[a]s at 12 October 2011, the amount which Equititrust as trustee of the EPF was likely to recover from the EPF Loan Book was: (a) a sum of up to $35 million; and (b) in any event, substantially more than $2 million". It is also alleged, in [44A(c)(vi)], that Mr Tucker came to know that "as at 12 October 2011, the debt due to BOSI was $7.8 million (as pleaded in paragraph 43(a) above) (BOSI not having charged any Risk Fee or Overdue Rate despite its entitlement to do so)". The applicants submit that these two matters (value of the debt owed to BOSI, and that the value of the assets was in excess of $2 million) were in the public domain; and accordingly these two sub-paragraphs should be struck out as untenable, since any confidentiality in the recoverable value had been lost.

"(i) the likely recoverable value of the EPF Loan Book as at 12 October 2011 (as pleaded in paragraph 32 above, including the names and details of the borrowers, the guarantors and the associated securities, pleaded and particularised in paragraph 29 above); and

(ii) that as at 13 April 2012, no event had occurred which materially altered the likely recoverable value of the EPF Loan Book (as pleaded in paragraph 33 above, including the names and details of the borrowers, the guarantors and the associated securities, pleaded and particularised in paragraph 29 above);"

[78] The Tucker applicants submit the underlined words are "non-sensical".

[79] I can see no difficulty with subparagraph [44A(c)(i)]. When you read [32], that refers to [29]-[31] of the FASOC. Paragraph [29] pleads that the directors of Equititrust had considered and discussed the amount which Equititrust as trustee was likely to recover from borrowers and guarantors at the monthly meetings attended by Mr Tucker between September 2010 and October 2011 and by Mr Kennedy between May 2010 and October 2011; and further states that "[t]he loans due from time to time to Equititrust as trustee of the EPF from its borrowers and guarantors and the associated securities held by Equititrust" will be referred to as the "EPF Loan Book". This definition appeared in the original statement of claim. Particulars to [29], added in the FASOC, inform that "[t]he names and details of the borrowers, the guarantors and the associated securities are particularised in the Consolidated Particulars accompanying this pleading and in the board papers and minutes referred to therein".[86] Paragraph [30] then pleads a meeting of directors on 14 June 2011, at which Mr Tucker and Mr Kennedy participated in a detailed discussion of each of the loans in the EPF Loan Book and as to the likely recoverable value thereof. Paragraph [31] pleads a meeting on 12 October 2011, adjourned until 17 October 2011, at which Mr Tucker and Mr Kennedy participated in a detailed discussion of the loans in the EPF Loan Book and as to the likely recoverable value thereof. Paragraph [32] then pleads that as at 12 October 2011 the amount which Equititrust as trustee of the EPF was likely to recover from the EPF Loan book was a sum of up to $35 million and, in any event, substantially more than $2 million. It is reasonably apparent to the reader that the details of the loans, including the names and details of the borrowers, the guarantors and the associated securities, which were included in the board papers and minutes, are alleged to have informed the discussion of the likely recoverable value of the EPF Loan Book. That is an unsurprising contention, one might think (that details about the borrowers, guarantors and associated securities would inform the likely recoverable value of a loan). I do not regard this as either ambiguous or nonsensical. Nor do I accept that it is impermissibly pleading a new cause of action.

"In the premises of paragraphs 17 to 27, 28 to 43, 44A, 49, 60A, 60B and 78(k) to 78(n) hereof, it is to be inferred that by:-

(a) acting as alleged in paragraphs 60, 64 to 66, 70 to 73, 76 and 77 hereof; and

(b) in particular engaging in the MS Asia Acquisition, as alleged in paragraphs 70 and 77 hereof; and

(c) procuring MS Asia to receive the MS Asia Profit pleaded in paragraph 112C(a) below; and

(d) himself receiving his share of the MS Asia Profit pleaded in paragraphs 112C(b) and (c) below,

(e) improperly used the Tucker Director Information;

(f) for the purpose of gaining an advantage for himself or, alternatively for MS Asia, Mr Kennedy or Mr Howard; and

(g) in those premises, thereby breached the duty referred to in paragraph 49 hereof."

[92] The applicants complain that this paragraph does not identify how (or when) Mr Tucker is alleged to have used the Tucker Director Information or why its use was improper, such that it is "impossible for the defendants to know how it is contended that the duty was breached, and the material facts relied upon in support of each particular matter" in (e), (f) and (g).[97]

[93] Other than by reason of obfuscation,[98] I do not see how the defendants can contend they do not understand (let alone that it is impossible to know) how it is contended the duty was breached, and the material facts relied upon in support of the allegation that Mr Tucker improperly used the information for the purpose of gaining an advantage for himself, or alternatively for MS Asia, Mr Kennedy or Mr Howard and, in doing so breached the duty owed under s 183.

[94] In R v Byrnes [1995] HCA 1; (1995) 183 CLR 501 the High Court (Brennan, Deane, Toohey and Gaudron J) referred with approval to the observations of Jacobs J in Grove v Flavel (1986) 43 SASR 410 (in an equivalent statutory context) that:

"The word 'improper' is not a term of art. It is to be understood in its commercial context to refer to conduct which is inconsistent with the 'proper' discharge of the duties, obligations and responsibilities of the officer concerned."[99]

"... what is 'improper' ... cannot be determined by reference to some common, uniform, or inflexible standard which applies equally to every person who is an officer, but rather must be determined by reference to the particular duties and responsibilities of the particular officer whose conduct is impugned".[100]

[95] An objective standard applies in determining what amounts to impropriety.[101] In R v Byrnes it was said (at 514-515) that:

"Impropriety does not depend on an alleged offender's consciousness of impropriety. Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case."

[96] The impropriety in R v Byrnes was acting without authority. Groves v Flavel involved the use by a director of his knowledge of the company's financial position to gain an advantage for himself and other companies of which he was a director, to the possible detriment of the creditors of the first company.

[97] That is what is alleged in this case - the impropriety of the use of the Tucker Director Information is the use of the information by Mr Tucker for the purpose of gaining an advantage for himself, or alternatively for MS Asia, Mr Kennedy or Mr Howard, to the detriment of the beneficiaries of the EPF.

[98] The allegation of breach in [109A] of the FASOC is in my view quite clear enough for the defendants to be able to understand the case that is put against them, and to be able to respond to it. The matters set out, for example, in [89] of the Tucker applicants' submissions, are matters which may readily be pleaded by way of defence. They do not support striking out the allegation.

[99] The Cowen applicants apply to strike out paragraphs [44B] (knowledge acquired by Mr Tucker from acting as a solicitor for Equititrust), [49A], [49B], [109C] and [109D] and, in addition to those paragraphs, the Tucker applicants also apply to strike out [128A] to [128D].

[100] I have already dealt with some of the arguments about [44B], in so for as they mirror complaints made about [44A]. As to the argument that some of the Tucker Solicitor Information was in the public domain, I reiterate what I have said at [75] above, and refer also to [106] below.

[101] As to [49B] (likewise [51B]), the applicants' complaint is that it impermissibly pleads an "absolute prohibition", not merely in respect of acquiring the BOSI Debt or the BOSI Securities, but also "having any interest in or deriving any benefit from" such acquisition. Paragraph [49B] reads:

"In the premises of paragraphs 9, 15, 28 to 32, 44A, 44B, 45 and 49A hereof and paragraphs 51E, 51F below, Mr Tucker was, by 13 April 2012, precluded by his position as a fiduciary from acquiring the BOSI Debt or the BOSI Securities pleaded in paragraph 54 below, or having any interest in or deriving any benefit from the acquisition of the BOSI Debt or the BOSI Securities."[102]

[102] The point made by the applicants seems to be that the duties alleged (including the statutory duty under s 183, and the fiduciary duties) are duties not to improperly use information; not absolute duties not to engage in transactions. That submission is explained by reference to a hypothetical situation (if Mr Tucker had no interest in MS Asia, but MS Asia wanted to retain his firm and he got the benefit of that, that would be captured by this absolute prohibition).[103] But of course that is not what is alleged. What is alleged is that Mr Tucker did have an interest in MS Asia, and that he benefited personally from what he is alleged to have done, in breach of his various duties. What is alleged is that in the circumstances of this case, as a consequence of the duties owed by Mr Tucker, he could not take advantage of the information he obtained by taking up the opportunity which presented itself to acquire the debt and the securities for $2 million. Paragraph [49B] has to be read as a whole, and in the context of the plaintiff's case as pleaded (and by reference to the paragraphs identified as the premises). In that context I do not see anything objectionable about [49B].

[103] In relation to [109C], I do not accept the applicants' argument that the pleading is deficient; although I have suggested a minor amendment in paragraph [134] below. The paragraph is clearly concerned with allegations of breach of Mr Tucker's fiduciary duties referred to in [49A] (so much is apparent from the consideration of the premises, and also from [109C(h)(i)]), and the argument that the paragraph does not identify why, factually the duties and Mr Tucker's personal interests were in conflict ignores what is pleaded in [109(a) to (d)].

[104] Paragraph [51E] of the FASOC pleads that, in the premises of [51C] and [51D], the Tucker Director Information was of such a nature and was imparted to Mr Tucker in such circumstances as to be inherently confidential (and, likewise, in relation to the Kennedy Director Information). Paragraph [51F(a)] then pleads that, in the premises of [51E], Mr Tucker was under an equitable duty of confidence obliging him not to disclose the information to anyone, save for the business of Equititrust as trustee of the EPF and not to make improper use of the information for his own benefit or the benefit of a third party.

[105] The applicants' arguments about some of the information being in the public domain are relied upon to support striking out these paragraphs also.

[106] I am not persuaded of that. The following matters support rejection of the applicants' arguments on this point:

• (1) Whether information is in the public domain is largely a question of fact, and whether information has entered the public domain requires consideration of the ability to access the information should members of the public wish to do so.[104] I have been taken to some evidence of some parts of the Tucker Director Information referred to in documents filed in open court. But the issue of the confidential nature of the Tucker Director Information, overall, is plainly a controversial issue, warranting determination, following a consideration of the whole of the evidence which may be relied upon at a trial; rather than summary determination on the basis of what is only a piece, or some pieces, of the puzzle.
• (2) I accept that there is a serious argument that, even if elements of the Tucker Director Information may be found to have entered the public domain, the information was valuable and confidential in the hands of someone like Mr Tucker (and, for that matter, Mr Kennedy) who was in a position to assess its true significance, in the context of the opportunity that came to him to acquire the debt and the securities for $2 million.[105]

Section 13(1) of the Partnership Act - ordinary course of business

[107] All applicants apply to strike out paragraphs [119]-[122] of the FASOC (which deal with the allegations that Mr Tucker was acting in the ordinary course of the firm Tucker & Cowen, when doing the various alleged impugned things the subject of the plaintiff's claim, such that the firm is liable to the same extent as Mr Tucker).

[108] The applicants focussed particularly on [120(k)] (an addition to the FASOC), which alleges that:

"(k) The business of the firm was conducted by Mr Tucker and Mr Cowen over a period of many years prior to 13 April 2012 on the following basis:-

(i) Tucker & Cowen often had opportunities to engage in business deals with clients including the acquisition of debts (such as the BOSI Debt) and the entry into ventures with clients (such as the MS Asia Acquisition);

(ii) Mr Tucker often involved himself in such business deals;

(iii) When Mr Tucker offered to Mr Cowen opportunities to engage in such business deals with clients:-

1. Mr Cowen told Mr Tucker that he did not have any interest and 'didn't want to know about it';
2. Mr Cowen took no step to prevent Mr Tucker from engaging in such business;

1. Mr Tucker took up such opportunities 'regularly'."

[109] Particulars of subparagraph (k) are given: "That the firm conducted its business as alleged in subparagraph (k) appears from the evidence of Mr Tucker to that effect, given in his public examination in the Federal Court of Australia on 20 September 2017".

[110] The applicants submit that what is alleged are expressly unauthorised activities in Mr Tucker's private capacity, and "there is no authority to support the proposition that a failure of a partner to prevent another partner from undertaking activities in his personal capacity which are otherwise not part of the firm's business, somehow has the effect that those activities form part of the 'ordinary course of the business' of the partnership, for which both partners are liable".[106]

[111] I am not persuaded that the further arguments made by the applicants, about these paragraphs of the FASOC, lead to any different conclusion to that which I reached in Equititrust No. 1 at [89], that it is a question of fact, to be determined at a trial, whether Mr Tucker was acting in the ordinary course of this particular firm's business. What is alleged in [120(k)] is not that Mr Tucker was acting in his personal capacity, but that the "business of the firm" was conducted on the basis alleged. It is a matter to be determined at trial whether that is established.

[112] Both the Cowen applicants and the Tucker applicants apply to strike out [123A] to [123G], and also [127F] of the FASOC, without leave to replead. These paragraphs plead the basis on which the plaintiff contends Mr Cowen was involved in the alleged contravention of s 183(1) by Mr Tucker and, further or alternatively, knowingly concerned in the breaches by Mr Tucker of his fiduciary duties.

[113] Paragraphs [123A] to [123G] of the FASOC have been repleaded, since [123]-[125] (in so far as they concerned Mr Cowen) were ordered to be struck out, with leave to replead: see Equititrust No. 1 at [96]-[98].

[114] I am not persuaded to again strike out this part of the FASOC. There are plainly questions of fact (including based on inferences) which will need to be determined at trial. However, subject to one qualification, what is now pleaded in [123A] to [123E] is sufficient, in my view, to present with reasonable clearness what the plaintiff alleges against Mr Cowen.

[115] The one qualification is that the particularisation of [123E], articulated by Mr Couper QC in the course of the hearing, ought to be incorporated into the pleading:[107] to the effect that Mr Cowen was a partner of the firm, and in that capacity had responsibility for the firm's trust account; that he had the knowledge pleaded in [123B], which is to be inferred from the matters pleaded in [123C]; and had the capacity to stop the payments; and with that knowledge, by failing to take steps to cause the money not to be paid away to MS Asia, he was concerned in the contravention. Mr Clothier QC protests that these are not particulars, but material facts missing from the pleading. As discussed above, in addressing the relevant principles, there may be a fine line between a material fact and a particular. The important point is that the nature of the plaintiff's case is clearly presented. The addition of these matters to [123E], whether as part of the paragraph itself (for example, commencing with the words "in that" after the words "the Act" on the third line), or as particulars, will achieve this end.

[116] Otherwise, in my view, the amended paragraphs do address the shortcoming of the original paragraphs. There is now a clear pleading of what it is alleged Mr Cowen knew, in terms of the elements of the alleged contravention of s 183(1) by Mr Tucker and, with the amendment to [123E] just referred to, a clear pleading of the alleged involvement by Mr Cowen.

[130] The applicants submit that, as the proceeding has been discontinued as against Mr Kennedy and MS Asia, paragraphs of the FASOC containing allegations of breach of duty by Mr Kennedy should be struck out. The plaintiff submits that the allegations concerning the duties owed by, and alleged wrongful conduct on the part of, Mr Kennedy - the other controller of MS Asia - remain relevant to the challenge to the validity of the MS Asia Acquisition and MS Asia's entitlement to recover the Tucker & Cowen Receipts in discharge of the BOSI Debt (see [49B] and [51B] of the FASOC). I accept the plaintiff's submission in this regard.

[131] The applicants also complain that the pleading variously refers to Equititrust and to Equititrust as trustee of the EPF, in a manner which is confusing. This was not addressed by any party in their oral submissions at the hearing, and does not appear to have been addressed by the plaintiff in its written submissions. I am not in a position to determine whether there is any merit to this complaint. I propose to leave this to the plaintiff, amongst the other matters referred to in paragraph [134] below, to consider whether any amendment is warranted.

[132] The Tucker applicants complain about [131(g)] of the FASOC. In [131], the plaintiff claims compound interest and indemnity costs ought to be awarded against Mr Tucker, in the light of a range of facts, matters and circumstances. One of those, in (g), is that Mr Tucker "has had the opportunity to use the fruits of his breaches in trade or business, including in the companies and trusts and the superannuation fund the subject of the summonses issued in the Examination Proceedings on 15 June 2017". That is sought to be struck out because "on no basis" could the allegation be a basis for compound interest and indemnity costs because it is not alleged the opportunity was ever acted on and, further, because the Tucker applicants perceive the pleading in [131(g)] to be an attempt to obtain disclosure of documents relating to Mr Tucker's trusts and superannuation funds, which was refused in Federal Court proceedings. No authority was relied upon to support the argument that what appears in (g) is, as a matter of a law, incapable of supporting a decision to award compound interest and/or indemnity costs. As to the disclosure point, I do not accept that there is any basis for the court to conclude some kind of improper motive. It is an allegation in a pleading; the Tucker applicants are free to plead in response to it as they see fit.

[137] The plaintiff applies for an order, pursuant to UCPR r 377(1) and, to the extent necessary, r 376(4), that the plaintiff have leave to file and serve an amended Claim, in the form annexed to its application filed on 19 June 2019.

[138] Only one of the proposed amendments is controversial, namely, the proposed amendment to add paragraph 36A, claiming against the fifth defendants damages for breach of contract.

[139] As to that, in Equititrust No. 1 at [76] I referred briefly to the challenge then made by the applicants to the pleading in (what was then) [49(d)], that Mr Tucker owed a fiduciary duty to Equititrust (on its own account and as trustee of the EPF), as a solicitor, "to advise his client Equititrust of any facts or matters within his knowledge which may have had a real capacity to affect the interests of Equititrust, including as trustee of the EPF, relevant to any of his retainers as its solicitor". It had been accepted that this was not an incident of the fiduciary duty owed by a solicitor, but the plaintiff flagged a proposed new pleading of a contractual duty to this effect.

[140] That now appears in [102A] to [102C] of the FASOC, which are as follows:

"102A. In the premises of paragraphs 1, 2, 4 to 7, 14, 15, 28 to 33, 34 to 44, 44A, 44B 45, 49A and 95 to 96D hereof, on and after 13 April 2012:-

(a) The retainers by Equititrust of Tucker & Cowen were, relevantly, to collect debts in the EPF Loan Book;

(b) After the meeting of the directors of Equititrust on 14 June 2011, referred to in paragraph 30 hereof:-

(ii) the members of the EPF were likely to suffer substantial losses of their capital subscribed to the EPF, which is to be inferred from paragraphs 2(c)(iii) and 30 to 33 hereof;

(c) Tucker & Cowen acted as the solicitors for Equititrust after 14 June 2011 in the underlined Schedule 3 Retainers, as alleged in subparagraph 14(c)(iii) hereof;

(d) the following facts known by Mr Tucker were relevant to the retainers by Equititrust of Tucker & Cowen on foot on and after 13 April 2012 (as pleaded in paragraph 15 above) and had a real capacity to affect its interests, as trustee of the EPF:-

(i) that AET was to acquire the BOSI Debt and the BOSI Securities;

(ii) that AET was willing to accept only $2 million for the BOSI Debt and the BOSI Securities;

(iii) the facts referred to in paragraph 32 hereof.

(a) The said facts were relevant to the said retainers because:-

(i) the ultimate purpose of the retainers was to maximise the recovery from the EPF Loan Book for the benefit of the beneficiaries;

(ii) the amount recovered for the benefit of the beneficiaries would be increased if the amount paid to BOSI could be reduced;

(iii) conversely, the greater the amount paid to BOSI, the less the amount recovered for the benefit of the beneficiaries;

(i) to discharge its duties as trustee of the EPF, including to act in the best interests of the beneficiaries;

(ii) consequently, to minimise the amount to be paid to BOSI and any assignee of the BOSI Debt; and

(iii) therefore to maximise the sums recovered for the benefit of the beneficiaries of the EPF.

102B. In the premises of paragraph 102A hereof, Tucker & Cowen were, on and after 13 April 2012, under a duty, which arose from each of its retainers from Equititrust as trustee of the EPF, to disclose to Equititrust, by the Liquidators, the knowledge of Mr Tucker referred to in subparagraph 102A(d) above.

102C. Tucker & Cowen, in breach of their duty of disclosure referred to in paragraph 102B hereof, have not disclosed to Equititrust the knowledge of Mr Tucker referred to in subparagraph 102A(d) above."

[141] The plaintiff applies for leave to make this amendment under r 377(1)(c) UCPR, on the basis it is an amendment to the originating process, but does not involve a new cause of action; alternatively, if the amendment is considered to be the addition of a new cause of action, the plaintiff seeks leave to make the amendment under r 376(4), as it is accepted the limitation period has expired.

[142] In Borsato v Campbell [2006] QSC 191 McMurdo J (as his Honour then was) said this in relation to the meaning of "cause of action" in r 376(4):

"[8] The term 'cause of action' was defined in Cooke v Gill as being 'every fact which is material to be proved to entitle the plaintiff to succeed', a definition which many judgments have employed in the context of this rule or its equivalent: see eg Allonnor Pty Ltd v Doran per McPherson JA. But it has not been applied literally, for otherwise any new fact to be added to a plaintiff's case would be treated as raising a new cause of action which required leave in the context of a rule such as r 376(4). So in Allonnor Pty Ltd v Doran for example, there is an indication of what the Court of Appeal in Thomas v State of Queensland subsequently endorsed as a 'fairly broad brush comparison between the nature of the original claim and that to which it is sought to be amended'. The dividing line is between the addition of facts which involve a new cause of action and those which are simply further particulars of the cause already claimed, and its location involves a question of degree which can be argued, one way or the other, by the level of abstraction at which a plaintiff's case is described. Some illustrative guidance is provided by Allonnor Pty Ltd v Doran; Thomas v Queensland and another judgment of the Court of Appeal, Central Sawmilling No 1 Pty Ltd v Queensland.

[9] In Allonnor, the plaintiff was employed by the defendant as a delivery driver, and sued for an injury to his back and neck said to have been suffered on a certain date making a certain delivery of furniture. He sought to amend to add a claim for an injury to his shoulder, allegedly caused by another delivery made to a different address but on the same day. McPherson JA 'doubted whether what was sought to be added by way of amendment really amounts to a new cause of action' but in any case held that the new cause of action (if any) arose out of substantially the same facts and the amendment should be allowed. His Honour said:

'On any view of what is pleaded, the plaintiff was, at the end of the day in question, left with physical injury to his body, which resulted from the same cause, which was lifting (whether on one or more than one occasion) in the course of the same employment with the same employer. It is not unreasonable to state it in this way, although admittedly it is to some extent a matter of the level of generality at which the proposition is expressed.'

[10] In Thomas v Queensland, the Court of Appeal disallowed an amendment of a case brought by an injured motorcyclist against the State as the authority responsible for the highway on which he was injured. His case was that there was a large amount of soil on the road surface which caused his motorcycle to lose traction and collide with another vehicle. His claim was pleaded originally on the basis that the defendant had been undertaking road works at the scene which had resulted in this soil on the road. He sought to amend to claim that the soil was there because it had been washed from a nearby embankment in a way which was attributable to poor construction of the highway in the first place. The Court held that this was a new cause of action, saying in its joint judgment:

'The essential elements in a claim for damages for negligence are the duty of care, breach of that duty and injury caused by that breach. Here, although only for one injury an incident is alleged, different duties, different breaches and different causes of injury are now alleged. In our view the effect of the amendment is to include new causes of action.'

[11] In Central Sawmilling, the plaintiffs claimed damages for breach of contract, saying that the defendant, the State of Queensland, by three identified written agreements had promised to provide them with certain quantities of timber. They then sought to amend to plead another agreement made between various timber millers, including the plaintiffs, and the defendant by which they were to receive those amounts of timber. That was held to involve a new cause of action."[126]

[143] Borsato was a medical negligence claim. As originally pleaded, the plaintiff alleged a breach of duty on the part of two surgeons in the manner in which they performed surgery on him. The amendments sought to plead a breach of the duty to warn about risks of the surgery. McMurdo J found that:

"[14] Indisputably, the breach of duty now alleged is quite distinct from that already alleged. In substance it is such a different case from an allegation of negligent performance of the surgery that it cannot be described as some further particularisation of the original claim of breach of duty. It requires the plaintiff to prove a distinct fault, necessarily prior in time to the alleged breach in the course of the surgery, and then to prove the likelihood of some sequence of events in response to a proper warning. I do not accept that it is appropriate for present purposes to characterise the duty in this new case as the same as in the existing case, but on any view the new case involves quite a different breach."

[144] McMurdo J's approach has been adopted in a number of subsequent cases: see, for example, Wolfe v State of Queensland [2008] QCA 113; [2009] 1 Qd R 97, Jetcrete Oz Pty Ltd v Conway [2015] QCA 272 and the discussion in McQueen v Mount Isa Mines Ltd [2018] 3 Qd R 1 at [44]-[55].

[145] The plaintiff submits the amendment to the claim does not seek to add a new cause of action because the original statement of claim pleaded all the material facts necessary to establish a cause of action for breach of contract; albeit the original pleading erroneously labelled the duty as fiduciary rather than contractual.

[146] As to that matter, the plaintiff's solicitor, Mr Russell, in his affidavit filed 12 August 2019 (CFI 100), describes the pleading of a duty in terms of the original [49(d)] as a fiduciary duty as an oversight (at [24]). Both the Cowen applicants and the Tucker applicants sought to challenge this characterisation; the Tucker applicants also seeking to cross-examine Mr Russell at the hearing. Although the plaintiff did not object to leave being given to cross-examine Mr Russell, it did not proceed beyond the first few introductory questions, as I formed the view that it was an unhelpful and time wasting exercise. The involvement of human beings in this process means mistakes can be made. There is no need to say more about this.

[147] The plaintiff is right to contend that the attribution of a legal label is not determinative of the question whether a new cause of action has been added - what matters is whether the material facts were already pleaded. That is apparent from the observation of Barwick CJ in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457 at 473 that:

"[in] fact pleading as it was introduced in the judicature system, there is no necessity to assert or identify a legal category of action or suit which the facts asserted may illustrate, involve or demonstrate and on which the particular relief claimed is based or to which it is relevant."[127]

[148] Nevertheless, in my view the amendment does add a new cause of action, because it has been necessary to plead (at least) the additional material fact of a contractual duty arising from the pleaded retainers (see [102B] of the FASOC);[128] it is a different case from that which was previously pleaded, albeit, as discussed below, it arises out of the same or substantially the same facts; and in my view the amendment cannot be described as some further particularisation of the original claim of breach of fiduciary duty.

[149] I consider leave should be granted to make the amendment.

[150] Relevantly, r 376(4) provides that the court may give leave to make an amendment to include a new cause of action in respect of which the relevant period of limitation has ended only if:

• (a) the court considers it appropriate; and
• (b) the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding by the party applying for leave to make the amendment.

[151] In Draney v Barry [2002] 1 Qd R 145 at [57] Thomas JA said:

"[Rule 376(4)] allows a fairly wide discretion in that the court will not allow such an amendment unless it considers it 'appropriate' to do so and also considers that the new cause of action arises at least substantially out of the same facts as the existing cause of action. I do not think that 'substantially the same facts' should be read as tantamount to the same facts, and consider that the need to prove some additional facts is not necessarily fatal to a favourable exercise of discretion under r 376(4). If the necessary additional facts to support the new cause of action arise out of substantially the same story as that which would have to be told to support the original cause of action, the fact that there is a changed focus with elicitation of additional details should not of itself prevent a finding that the new cause of action arises out of substantially the same facts. In short, this particular requirement should not be seen as a straitjacket."

[152] In Thomas v Queensland [2001] QCA 336 at [19] the Court of Appeal clarified, by reference to this passage from Draney v Barry, that:

"Of course 'the story' is a shorthand reference to the matters that the plaintiff has to prove."[129]

[153] In Paul v Westpac Banking Corporation [2016] QCA 252; [2017] 2 Qd R 96 at [15] Fraser JA (with whom Gotterson JA and Douglas J agreed) said:

"In an appropriate case leave to amend to add a new cause of action which is statute-barred may be granted even though it involves reliance upon facts in addition to those out of which a pleaded cause of action arises, provided that those additional facts are substantially the same as facts already pleaded. The question in each case is whether the facts out of which a new cause of action arises are substantially the same as facts relied upon in a cause of action for which relief has already been claimed in the proceeding. As has been mentioned in other cases, this may involve questions of degree and fine judgment, but the answer to that question should be informed by an appreciation that the policies underlying the applicable statute of limitation may be inappropriately undermined if the required analysis is conducted at too high a level of generality..."[130]

[154] But as McPherson JA said, in relation to the predecessor to r 376(4) (in the former Supreme Court Rules), in Allonnor Pty Ltd v Doran [1998] QCA 372 at [8]:

"... The policies underlying such statutes [of limitation] are, it is said, not 'threatened by an amendment that merely adds a ground of recovery or defence arising out of a transaction or occurrence already in suit'. See James Hazard Leubsdorf Civil Procure s4.23, at 226 (4th ed). Having identified those policies, the authors go on to add:

'This is usually true even when the new ground involves a variation in the facts. A party will likely collect and preserve all the evidence relating to a transaction or occurrence, not just those aspects of it that support or defeat a single legal theory. Moreover, the defendant's sense of security over the transaction or occurrence has already been disturbed by the pending action.'

The information collected in this case by solicitors for WorkCover, which is described in the reasons of Williams J on this appeal, confirms the observations of those authors. The defendant in this instance cannot have been surprised or perceptibly disadvantaged by the additional allegations which the amendment seeks to add..."[131]

[155] Having regard to these principles, I am satisfied both that it is appropriate to give leave to make the amendment, and that the new cause of action arises out of the same or substantially the same facts as causes of action for which relief has already been claimed in the proceeding. This case falls squarely within the comments made by McPherson JA in Allonnor, as an amendment that merely adds a ground of recovery "arising out of a transaction or occurrence already in suit".

[156] I do not accept that there has been unacceptable or disentitling delay on the part of the plaintiff. The failure to plead this aspect of the case as a breach of contract initially is explained on the basis of oversight (or error), and as soon as the challenge to the original pleading of a fiduciary duty was raised, the plaintiff flagged an amendment to plead the duty as a contractual one. Protestations of delay in the progress of this proceeding sit ill in the mouths of the defendants, in my respectful view.

[157] Nor do I accept that there is any particular prejudice caused to the defendants by the amendment, as the factual matters relied upon are already part of the proceedings which will need to be addressed, both in terms of pleading and evidence, by the defendants. The assertions of prejudice by the Tucker applicants in particular are not rational or reasonable (for example, suggesting the amendment would add two weeks to the length of any trial).

[158] The Cowen applicants and the Tucker applicants make a number of complaints about the pleading of the breach of contract claim itself, which are relied upon as supporting the exercise of discretion to refuse leave to make the amendment. In some respects, these repeat complaints made about other parts of the FASOC, which have already been addressed above. One of the complaints relies upon the evidence of Mr Tucker to the effect that, in the relevant time period between April and July 2012, there were no retainers of Tucker & Cowen by Equititrust.[132] However, it is clear (as in relation to other matters, addressed above) that this is a controversial factual matter,[133] which also raises disputed legal issues, which require determination at a trial.

[159] Of the many further complaints, the following I consider have merit, in the sense of warranting some amendment to the pleading:

Since the plaintiff's case is that the relevant time period is between 13 April and 18 July 2012, the reference to "the retainers" and "each of its retainers" in [102(a)] and [102B] is vague, and should be corrected. It seems fair to assume the relevant retainers are those referred to in [102(d)]. If that is correct, these paragraphs could readily be amended to clarify this, and avoid complicated responses by way of defences.

[160] Otherwise, I consider the pleading raises an arguable case, in terms of the pleaded debt collection retainers giving rise to a duty on the solicitor to advise the client of things within their knowledge which have the capacity to affect the client's interest in maximising the amount recoverable,[136] which ought to be permitted to be dealt with in the ordinary course. There are clearly strongly contested factual and legal matters to be determined. But I am not persuaded that the plaintiff should be summarily foreclosed from prosecuting this claim. The many challenges raised by the applicants to the plaintiff's allegations can readily be pleaded by them by way of defence; and dealt with on the basis of full legal argument in due course.

[161] The orders to be made are as follows:

• (1) The plaintiff has leave to amend the Claim in the form annexed to the application filed on 19 June 2019.
• (2) The amended application filed on 12 August 2019 by the Tucker applicants is dismissed.
• (3) Paragraph 1 of the amended application filed on 15 July 2019 by the Cowen applicants is dismissed.
• (4) Within a specific time frame (I have in mind 14 days, but will hear from the parties) the plaintiff file and serve a further amended statement of claim, which addresses the issues referred to in paragraph [134], and any other amendments the plaintiff considers desirable (having regard, inter alia, to the matters addressed in its submissions). To be clear, the intention of making this order is to avoid pedantic and time-wasting responses in the defences.
• (5) Within a specific time frame (as to which, again, I will hear from the parties) the defendants file and service their defences.
• (6) Within a specific time frame, the plaintiff file and service its reply.
• (7) The parties confer with one another, and conduct themselves reasonably and cooperatively, in relation to the matters the subject of practice direction 18 of 2018, and the future progress of the matter generally and either provide agreed directions following the close of pleadings, or alternatively cause an application for directions to be made within fourteen days of the close of pleadings so that such directions can be made by the court.

[162] I will hear from the parties as to the costs of these applications. However, to facilitate the efficient disposition of the issue of costs, I indicate that I consider the respective defendants should pay the plaintiff's costs of their respective strike out (and summary judgment) applications. The minor respects in which I have found some amendment is warranted to the FASOC did not justify the enormous amount of resources (in terms of time, including the court's time, and money) invested into the broad ranging attack on the FASOC, most of which I have found lacked merit. As to the plaintiff's application to amend the claim: the application was one the plaintiff had to bring; but the respective sides of the argument have had varying levels of success. This may indicate the appropriate order is that each party bears its own costs.

[1] The first was Equititrust Limited v Tucker and Others [2019] QSC 51 (Equititrust No. 1).

[2] See also Equititrust No. 1 at [13]-[18].

[4] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-130; Agar v Hyde [2001] HCA 41; (2000) 201 CLR 552 at [57]; Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 226 CLR 256 at [46]; Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [24]. See also Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 at [24]- [26].

[5] Mio Art Pty Ltd v Macequest Pty Ltd [2013] QSC 211; (2013) 95 ACSR 583 at [67]- [69] per Jackson J.

[6] See Kordamentha Pty Ltd v LM Investment Management Ltd & Anor [2016] QSC 183 at [25] per Applegarth J, referring to Young Investments Group Pty Ltd v Mann [2012] FCAFC 107; (2012) 293 ALR 537 at [6].

[7] See X (Minors) v Bedfordshire County Council [1995] UKHL 9; [1995] 2 AC 633 at 740.

[8] Remmington v Scoles [1897] 2 Ch 1 at 7, referred to recently in Renshaw v New South Wales Lotteries Corporation Pty Ltd [2018] NSWSC 1954 at [144].

[9] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 at 129-130; Theseus Exploration NL v Foyster [1972] HCA 41; (1972) 126 CLR 507 at 514-515.

[10] Dey v Victorian Railway Commissioners (1949) 78 CLR 62 at 91.

[11] Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 at [24]- [26].

[12] Betfair Pty Ltd v Racing New South Wales [2010] FCAFC 133; (2010) 189 FCR 356 at [49]- [51] per Keane CJ (as his Honour then was), Lander and Buchanan JJ; Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-287.

[13] Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 293 per Dawson J, referring to Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) [1916] HCA 81; (1916) 22 CLR 490 at 517.

[14] Barr Rock Pty Ltd v Blast Ice Creams Pty Ltd [2011] QCA 252 at [27].

[15] Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713.

[16] Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], referring to Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 293.

[17] Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13]; referring to Barclay Mowlem Construction Limited v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]-[8] (a decision of Martin CJ).

[18] See also Sherrin Hire Pty Ltd v Sherrin Rentals Pty Ltd [2015] FCA 1107 at [44] per Edelman J; Hillig v Darkinjung Pty Ltd [2007] NSWSC 683 at [35]- [36] per White J; Verner v Giannoros [2016] NSWSC 242 a [2]-[5] and [24]-[28] also per White J; and RNB Equities Pty Ltd v Credit Suisse Investment Services (Australia) Limited (No 2) [2019] FCA 1385 at [15]- [16] per Anderson J.

[19] Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (in liq) [2008] FCA 1920; (2008) 252 ALR 41 at [19], referring to Johnson Tiles Pty Ltd v Esso Australia Ltd (No 2) [2000] FCA 212; (2000) 97 FCR 175 at [4], citing Wickstead v Browne (1992) 30 NSWLR 1 at 5-6 per Kirby P (as His Honour then was). Kirby P's decision in Wickstead v Browne was endorsed on appeal to the High Court (given at the end of the application for special leave): see Bakewell v Anchorage Capital Master Offshore Ltd [2019] NSWCA 199 at [37]- [43] per Bell P, Macfarlan and White JJA agreeing.

[20] See, for example, Aklia Holdings Pty Ltd v The Carter Group Pty Ltd (in liq) & Ors [2017] QSC 75 at [50]- [51] per Bond J.

[21] See also Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [55].

[22] "EPF Loan Book" is defined, in [29] of the FASOC as "The loans due from time to time to Equititrust as trustee of the EPF from its borrowers and guarantors and the associated securities held by Equititrust".

[24] Save for the amount particularised in [106(a)].

[25] The $17,434,264.98 referred to in [95A] less the $813,200.37 referred to in [106(a)].

[26] See, eg, Cowen applicants' submissions at [33].

[27] Tucker applicants' submissions at [30].

[28] Affidavit of Tucker (CFI 112) at [4]-[7] and affidavit of Tucker (CFI 76) at [100]-[111].

[29] Affidavit of Tucker (CFI 76) at p 249.

[32] Affidavit of Tucker (CFI 76) at pp 282-301.

[34] Affidavit of Russell (CFI 102) at p 70.

[35] Ibid, at pp 77 and 78. Emphasis added.

[36] Affidavit of Pleash, volume 3 of the exhibits (CFI 106), commencing at p 790.

[39] Cf affidavit of Tucker (CFI 76) at [100] ff and, also, affidavit of Tucker (CFI 112) at [7].

[40] See, for example, Affidavit of Tucker (CFI 31) at p 94.

[41] See the affidavit of Pleash (CFI 106), commencing at p 811.

[44] [1943] HCA 4; (1943) 68 CLR 354 at 381.

[45] In re B Johnson & Co (Builders) Ltd [1955] Ch 634 at 644-645.

[46] See Visbord v Federal Commissioner of Taxation [1943] HCA 4; (1943) 68 CLR 354 at 384-385.

[47] Gaskell v Gosling [1896] 1 QB 669 at 700; revd on other grounds [1897] AC 575.

[48] Kerr on the Law and Practice as to Receivers and Administrators, 17th ed (1989) p 375.

[49] Fletcher, Law of Insolvency, 2nd ed (1996), p 395.

[50] [1943] HCA 4; (1943) 68 CLR 354 at 382.

[51] M Wheeler & Co v Warren [1928] Ch 840.

[52] In re Hale; Lilley v Foad [1899] 2 Ch 107.

[53] [1897] AC 575.

[54] [1926] 2 KB 511.

[55] Gough's Garages Ltd v Pugsley [1930] 1 KB 615.

[56] [1940] Ch 961.

[57] [1941] Ch 112.

[58] Visbord v Federal Commissioner of Taxation [1943] HCA 4; (1943) 68 CLR 354 at 381.

[59] See also at 436; and see Carey v Korda [2012] WASCA 228; (2012) 45 WAR 181 at [45]- [50] per Murphy JA (Martin CJ and Newnes JA agreeing).

[60] Also, Land Enviro Corp Pty Ltd (in liq) v HTT Huntley Heritage Pty Ltd (2017) 123 ACSR 1 at [28]; and Kelaw Pty Ltd v Catco Developments Pty Ltd (1989) 15 NSWLR 587 at 593 (both in relation to the power of a receiver to bring proceedings in the name of the company after liquidation, which subsists, but in respect of which the receiver may be liable for any costs or losses incurred).

[61] Cited with apparent approval by Gotterson JA in MSI (Holdings) Pty Ltd (In Liq) v Mainstreet International Group Ltd [2013] 2 Qd R 253 at [17]. See also Re Yates, National Mutual Life Association v Catco Developments Pty Ltd (1989) 88 ALR 583 at 587-588 per Sheppard J (referring, inter alia, to Re Leslie Homes (Aust) Ltd (1984) 8 ACLR 1020 at 1023 per McLelland J).

[62] Notably, in the deed of charge, under which the BOSI Receiver was appointed, clause 14.4 provides for the power of appointment of a receiver, even if an order has been made or a resolution passed for the winding up of the company and cl 14.4(b) provides that "a Receiver appointed in those circumstances may or may not in in some respects acts as the agent of the Chargor" (affidavit of Tucker (CFI 31) at p 96). The appointment of the Receivers by MS Asia did not occur until after the winding up.

[63] [1996] ANZ Conv R 593.

[66] Emphasis added; references omitted.

[68] See again paragraph [18] above, and the authorities there referred to.

[70] For example, Cowen applicants' submissions at [43(d)].

[71] See, for example, Re Clark; Clark v Moore (1920) 150 LT Jo 94, referred to in PD Finn's Fiduciary Obligations (1977, Law Book Co) at [450], see also [451].

[72] Plaintiff's submissions at [41]-[42].

[73] Plaintiff's submissions at [56]-[57].

[75] Affidavit of Pleash, volume 1 of the exhibits (CFI 104), commencing at p 207.

[76] This affidavit is referred to in the particulars to [32] of the FASOC.

[77] Affidavit of Tucker (CFI 76), commencing at p 108.

[78] Re Equititrust Ltd [2011] QSC 353 at [17]- [18].

[79] Affidavit of Tucker (CFI 120), commencing at p 13.

[80] Affidavit of Tucker (CFI 76), at pp 144-145.

[81] Including at paragraph [10] above.

[82] United Petroleum Australia Pty Ltd v Herbert Smith Freehills (2018) 128 ACSR 324 at [649], referring inter alia to McNamara v Flavel (1988) 13 ACLR 619 at 625 per Millhouse J (see also at 620 per King CJ). See also Huang v Wang [2015] NSWSC 510 at [41] per Black J.

[83] See, for eg, Tucker applicants' submissions at [76].

[84] See United Petroleum Australia Pty Ltd v Herbert Smith Freehills (2018) 128 ACSR 324 at [649].

[85] Tucker applicants' submissions at [84].

[86] See, for example, the Consolidated Particulars (CFI 84) at pp 7-8.

[87] Tucker applicants' submissions at [77].

[88] Plaintiff's submissions at [68]-[78].

[89] See the Consolidated Particulars of [29] (CFI 84), at p 7.

[90] Affidavit of Pleash (CFI 103), at p 136 (part of the "Equititrust Loan File Note" referred to in the Consolidated Particulars). See T 2-9.

[92] See at [22] per French CJ and also at [53] and [69] per Gummow, Hayne, Crennan, Kiefel and Bell JJ.

[93] See, eg, Tucker applicants' submissions at [78].

[94] See the affidavit of Mr Tucker, filed in October 2011 in separate proceedings in this court, annexed to the affidavit of Pleash, volume 4 of the exhibits (CFI 107), commencing at p 1061, in particular at [4] (Mr Tucker refers to receiving notification, on 12 October 2011, that a resolution had been purportedly passed by the shareholder of Equititrust removing him as a director); at [166] (Mr Tucker says on 12 October 2011 he participated in a directors' meeting of Equititrust "notwithstanding my purported removal"); at [168] (that the directors resolved at that meeting that he could participate in the meeting "given the uncertainty about the legal effect of the resolution to remove [him] as a director"); and at [181] (that he participated in the meeting on 17 October 2011).

[95] Tucker applicants' submissions at [88].

[96] Cowen applicants' submissions at [98]; T 1-33.

[97] See, for eg, Cowen applicants' submissions at [57].

[99] (1986) 43 SASR 410 at 420.

[100] (1986) 43 SASR 410 at 416-417.

[101] Chew v R [1992] HCA 18; (1992) 173 CLR 626 at 647 and R v Byrnes [1995] HCA 1; (1995) 183 CLR 501 at 514.

[102] Paragraph [51B] is in equivalent terms, in relation to Mr Kennedy.

[103] Oral submissions on behalf of the Cowen applicants at T 1-39.

[104] Isaac v Dargan Financial Pty Ltd (2018) 98 NSWLR 343 at [167] per Gleeson JA.

[105] See, by analogy Cranleigh Precision Engineering Ltd v Bryant [1965] 1 WLR 1293 at 1312-1313 and 1319.

[106] See, eg, Cowen applicants' submissions at [72] and [73].

[108] See also the Consolidated Particulars (CFI 84).

[109] See, for eg, Cowen applicants' submissions at [82].

[110] Cowen applicants' submissions at [83].

[111] See the correspondence particularised at [123(p)] of the FASOC; see also, preceding this, the email exchanges on 12 July 2012 (affidavit of Pleash, volume 4 of the exhibits (CFI 107) at p 1016-1018).

[112] Referred to in footnote 113 below.

[113] Including actual knowledge, wilful shutting of the eyes to the obvious and knowledge of circumstances which would indicate the facts to an honest and reasonable person: cf Farah Constructions v Say-Dee Pty Ltd (2007) 230 CLR 89 at [174]-[177]; see also Abeles v PA (Holdings) Pty Ltd [2000] NSWSC 1008; (2000) 18 ACLC 867 at [86]- [89] per Bergin J; Re HIH Insurance; ASIC v Adler [2002] NSWSC 171; (2002) 168 FLR 253 at 312 [209] per Santow J.

[118] See paragraph [89] above.

[119] See paragraph [80] above.

[120] See paragraph [84] above.

[121] See paragraph [59] above.

[122] See paragraph [61] above.

[123] See, for eg, [67] of the Tucker applicants' submissions.

[124] See paragraph [115] above.

[125] See paragraph [128] above.

[126] Emphasis added; references omitted.

[127] See also Agar v Hyde [2001] HCA 41; (2000) 201 CLR 552 at [64].

[128] In that respect, the present case is distinguishable from Agtrack (NT) Pty Ltd v Hatfield [2005] HCA 38; (2005) 223 CLR 251, in which the plaintiff had pleaded all the necessary material facts to invoke a right to claim damage under a particular Act, but made no reference to the Act.

[129] See also Althaus v Australia Meat Holdings Pty Ltd [2006] QCA 412; [2007] 1 Qd R 493 at [33]- [36] per Keane JA.

[131] See also the summary of principles in the decision of Bond J in Firstmac Ltd v Hunt & Hunt (A Firm) [2018] QSC 258 at [17]- [26].

[132] See the affidavit of Tucker (CFI 112).

[133] Cf the letter from Tucker & Cowen to Balmain dated 19 June 2012, referred to in particulars to [64] of the FASOC; and the affidavit of Daniel Davey sworn 9 October 2012, filed in separate proceedings in this court instituted by Equititrust, identifying that Tucker & Cowen are the solicitors for the plaintiff (at [1]) and continued to act including up to June 2012 (at [7]-[11]) (affidavit of Russell (CFI 102) at pp 43-52).

[136] In this regard, the plaintiff refers to and relies upon, inter alia, Spector v Ageda [1973] Ch 30 at 48 per Megarry J (as to the obligation on a solicitor, instructed to carry through a transaction by way of discharging an obligation, to advise the client of what the solicitor already knows in relation to the enforceability of the obligation); O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 213-215 per Mahoney JA (referring to the principle that a solicitor owes to his client the duty to tell him of everything of which he knows which will be of assistance to the client in relation to the matters within his retainer); Littler v Price [2004] QCA 383; [2005] 1 Qd R 275 at [6] per Jerrard JA and [37]-[51] per Cullinane J; and Robert Bax & Associates v Cavenham Pty Ltd [2012] QCA 177; [2013] 1 Qd R 476 at [54]- [60] per Muir JA.