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The trial judge nevertheless dismissed FPL's claims for damages and other relief because FPL had not proved quantifiable loss caused by the wrongful conduct. On appeal FPL sought compensation under s 233 of the Corporations Act 2001 (Cth), or alternatively a buy-out of its BRG shares. The Court dismissed the appeal and also dismissed the relevant part of FPL's motion concerning Fumar's reinstatement [9]-[10], [130]-[131].

Why the court decided this way

The appeal turned on a distinction between establishing wrongful conduct and establishing the loss caused by it. The trial findings supported a conclusion that BRG had hindered client transfers, particularly through its 4 December 2020 letter. But the appellate court had to decide whether the evidence connected a sufficiently identifiable amount of loss to that conduct [97]-[103].

The Goodyer Report did not solve that problem. It had been prepared on assumptions that FPL and Roberts had been shut out from client data and had lost their client book from 1 September 2020. Those assumptions conflicted with the facts found at trial. The report also had other shortcomings, including assumptions about client numbers, attrition, future earnings and fee streams [59]-[64]. On appeal, FPL argued that the report's calculations could be adapted to identify lost MDA revenue. The Court considered the proposed method but found it effectively treated every MDA client who did not remain with FPL as lost because of BRG's wrongful conduct [90]-[103].

That causal assumption was not established. Clients were autonomous and could choose to remain with BRG for reasons unrelated to the letter, including convenience, existing relationships with the licensee, or a preference not to transfer [104]-[106]. The evidence supported a finding that some clients had been deterred, but did not establish that all 27 MDA clients who did not remain with FPL were lost because of BRG [103]-[108].

The Court also considered whether it could select a lower number of affected clients. FPL had not proposed a supported alternative measure or produced evidence that would allow the court to choose reliably between two and 27 clients. The Court noted that evidence about client communications, decisions and timing could have informed that analysis [108]-[111]. It applied the evidentiary principle in Blatch v Archer: evidence is weighed having regard to what each side could have produced. The relevant client-response evidence was within FPL's power to pursue, and its failure to do so left a gap for which it bore the forensic consequences [110].

The facilitation principle did not change the result. The Court explained that the principle may assist a claimant to prove loss where the defendant's wrongdoing creates uncertainty. It does not shift the legal onus; it helps the claimant discharge it through reasonable inferences. Its strength depends on the uncertainty caused by the breach and the circumstances as a whole [115]-[118]. Here, however, the uncertainty was not attributable only to BRG's conduct. FPL's trial case had asserted that it could not access or use client information, whereas the trial judge found that it had retained access and was able to contact clients. That initial case theory was “profoundly misleading” [122]-[124]. The Court considered it unreasonable to require the respondents to assume an evidential burden on a narrower causation issue that had emerged against the background of FPL's materially different case [123]-[125].

The Court therefore rejected both the full amount claimed and any guessed lesser amount. It acknowledged the difficulty that the trial judge had found at least some client loss resulted from BRG's conduct, yet no compensation could be quantified. It concluded that FPL bore the forensic responsibility for that outcome [125]-[126].

The alternative buy-out claim also failed. FPL's argument depended on showing that it had suffered quantifiable loss because of the oppression. Without that foundation, the Court could not conclude that a buy-out order was a reasonable and proportionate response [127]-[129].

Before and after state of the law

The judgment does not purport to change the law governing proof of loss or oppression. It applies established principles to a particular evidentiary record. Its central clarification is practical: the facilitation principle is an aid to proof, not a substitute for evidence or a licence to award an amount without a rational basis [115]-[119].

The Court drew on Cessnock City Council v 123 259 932 Pty Ltd to explain that the claimant retains the legal onus and that facilitation operates where uncertainty results from the defendant's breach [115]-[118]. It also referred to Berry v CCL Secure Pty Ltd for the distinction between the legal burden and an evidential burden that may arise from the nature and circumstances of the wrong [114]. The principle is flexible, and courts must consider all circumstances, including the source of uncertainty and the evidence each party could produce [116]-[118].

The judgment also confirms the boundary between estimating damages despite difficulty and engaging in speculation. Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd and Troulis v Vamvoukakis were applied in support of the proposition that difficulty in estimation does not always excuse a court from estimating, but where the claimant has not produced evidence within its power and there is no rational foundation for an estimate, an award may properly be refused [119].

For oppression, the Court applied an objective commercial-bystander approach to unfairness, drawing on Tomanovic v Global Mortgage Equity Corporation Pty Ltd [78]. The contractual arrangement was important to that assessment. BRG's conduct could not be justified merely because FPL had behaved provocatively or deceitfully, where BRG's conduct in hindering transfers was fundamentally contrary to the parties' arrangement [78]-[79].

The practical “after” position is therefore not a newly stated legal test, but a clear application: a finding of oppression does not automatically produce compensation, and a claimant's own evidentiary choices and litigation case theory may matter when deciding whether uncertainty should be resolved through favourable inferences.

Key passages with plain-English translation

At [115], the Court states: “The facilitation principle is concerned with how the claiming party may discharge that onus.” In plain English, the claimant still has to prove loss. The principle may make that task easier where the defendant caused the uncertainty, but it does not transfer responsibility for proving loss altogether.

At [118], the Court says the claimant receives a “fair wind” but not a “free ride”. This means a court can be practical and draw reasonable inferences, especially where wrongdoing has made proof difficult. But the claimant still needs evidence that supports the amount claimed.

At [119], the Court says: “Justice does not dictate that a figure should be plucked from the air.” The point is that a court cannot choose a number simply because some loss is likely. There must be a rational basis for the estimate, especially where the claimant could have produced more particular evidence.

At [110], the Court observes that FPL could have provided evidence about its clients' responses, but chose not to advance that kind of case. In plain English, the party best placed to provide relevant evidence may bear the consequence if it does not do so, even if obtaining evidence from every individual client would have been difficult.

At [78], the Court explains that BRG was not entitled to hinder clients transferring away, despite FPL's provocative and deceitful conduct. The contractual relationship mattered: wrongdoing by one side did not automatically make contrary conduct by the other side fair.

At [76], the Court criticises the respondents' appellate submissions for failing to engage with the trial judge's findings. The practical point is that an appeal argument cannot simply repeat trial submissions as if the trial findings did not happen; it must explain why those findings reveal error.

What fact patterns trigger this precedent

The reasoning is most relevant where a claimant proves wrongful conduct but faces difficulty linking particular losses to that conduct. The case involved client relationships, voluntary choices by clients, and a business transition in which some clients followed the departing adviser and some did not [103]-[106]. The Court did not treat every client who failed to transfer as a loss caused by the respondent's conduct.

The judgment is also relevant where an expert's valuation or loss report depends on assumptions that are rejected by the fact-finder. Here, the expert's report assumed FPL had lost access to information and had lost its client book, but the trial judge found that substantial client information had already been copied and FPL continued to service clients [29], [60]-[64]. A report may still be considered, but its assumptions and fit with the findings require careful scrutiny [94].

The facilitation issue becomes important where the defendant's conduct has genuinely created uncertainty about the amount of loss. The judgment indicates that courts may draw reasonable inferences in that setting, but will examine whether the uncertainty actually resulted from the defendant's wrongdoing, what evidence the claimant could have produced, and whether the proposed estimate is rational [115]-[121].

The forensic context may be especially significant where the claimant's own initial account is materially inconsistent with the facts later established. The Court held that it was unfair to require the respondents to bear an evidential burden on a reformulated question when the original case had been presented on a substantially different, misleading basis [122]-[125].

For oppression claims, the reasoning may be relevant where a company acts contrary to an established contractual or commercial arrangement, but the claimant's own conduct is also provocative or wrongful. The judgment indicates that such conduct may be relevant to the assessment of unfairness and relief, but does not automatically justify conduct contrary to the parties' arrangement [73], [78]-[79].

How later courts have treated it

The judgment text contains no decisions after this judgment that apply or discuss it. It is therefore not possible, on the material provided, to describe any subsequent treatment by later courts.

The judgment itself situates its reasoning within earlier authorities. It considered Cessnock City Council on facilitation of proof and uncertainty [114]-[118], Berry on the distinction between legal and evidential burdens [114], and Blatch v Archer on evaluating evidence by reference to what each side could produce [110], [117]. It applied Placer and Troulis in rejecting speculative quantification [119].

For oppression, it relied on Tomanovic for the objective assessment of unfairness [78]. The judgment also discussed the remedial purpose of s 233 and the compensatory character of a buy-out order through authorities including Munstermann, Campbell, Scottish Co-operative Wholesale Society Ltd v Meyer and Rankine [83]-[85]. It did not overrule or purport to modify those authorities.

Still-open questions

The judgment leaves open how the facilitation principle might operate where a claimant's litigation case was accurate, the defendant's conduct was the principal source of uncertainty, and the claimant had no reasonably available evidence capable of resolving the uncertainty. The Court accepted that BRG's conduct created uncertainty, but found that the misleading initial case and the missing client-response evidence materially affected the analysis [120]-[125].

The Court did not specify how much evidence about individual clients would have been enough. It gave examples of potentially useful evidence, including records of communications sent and received, the timing of client decisions, and evidence from clients who remained with FPL [109]. It did not decide whether a particular sample, client-by-client analysis, or other evidentiary method would have supported an inference about a larger group.

The decision also did not determine a numerical amount of loss. The Court rejected both the assumption that all 27 MDA clients were lost because of BRG and an unsupported lower number [107]-[110], [125]. It did not decide how a court should quantify loss where the claimant establishes that some clients were deterred but reliable client-level evidence is unavailable for reasons not caused by the claimant's forensic choices.

Finally, the Court did not need to decide the respondents' notice of contention or the liability of particular respondents for compensation. It said it would reject the contention about the fairness of BRG's conduct if it were necessary to decide it, but the appeal was resolved on the failure to prove quantifiable loss [77]-[79], [126]. These matters should not be treated as broader determinations than the judgment actually made.

This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.

Category: Principal judgment

Parties: Financialstrategy.com.au Pty Ltd (in liq) (ACN 003 718 947) (Appellant)
Bailey Roberts Group Pty Ltd (in liq) (ACN 096 305 604) (First Respondent – Submitting Appearance)
Bailey Financial Management Pty Ltd (ACN 124 172 489) (Second Respondent)
LAT Wealth Holdings Pty Ltd (ACN 132 833 704) (Third Respondent)
Bailey Wealth Management Pty Ltd (ACN 655 744 620) (Fourth Respondent)
Fumar Pty Ltd (ACN 658 067 175) (Fifth Respondent)
Sustain Holdings Pty Ltd (ACN 657 587 490) (Fifth Respondent)

Representation: Counsel:
P Herzfeld SC / B Dziubinski (Appellant)
A R Zahra SC / R D Turnbull (Second, Third, Fourth and Sixth Respondents)
Solicitors:
HWL Ebsworth Lawyers (Appellant)
Mills Oakley (Submitting appearance) (First respondent)
Watson Webb (Second, Third, Fourth and Sixth Respondents)

File Number(s): 2025/144303

Publication restriction: Nil

HEADNOTE

[This headnote is not to be read as part of the judgment]

The first respondent, Bailey Roberts Group Pty Ltd (in liq) (BRG), was a service entity through which three associates ran a financial services business via their respective corporate vehicles. The appellant, Financialstrategy.com.au (in liq) (FPL), was a 40% shareholder in BRG controlled by its sole director, Mr Michael Roberts. The second respondent, Bailey Financial Management Pty Ltd (BFM), was likewise a 40% shareholder in BRG controlled by its sole director, Mr Ian Bailey. The third respondent, LAT Wealth Holdings Pty Ltd (LAT), was a 20% shareholder in BRG controlled by its sole director, Mr Leith Thomas. Mr Roberts, Mr Bailey and Mr Thomas were directors of BRG.

The business operated by FPL, BFM and LAT involved financial services under the authority of BRG’s Australian financial services (AFS) licence, as corporate authorised representatives (CARs). These arrangements were governed by CAR agreements between the entities and BRG. As reflected in the CAR agreements, there was a shared understanding between the various parties to the BRG business that certain clients serviced by a particular CAR were “owned” by that CAR, in the sense that the relevant CAR was entitled to remuneration derived from that client and was also entitled (as between the parties to the BRG business) to retain that client if the entity ceased to be an authorised representative of BRG. “MDA clients” for whom managed investment accounts were operated holding bespoke portfolios of investments, were considered to belong to the relevant CAR advising the client.

Around September 2020, relations between the respective parties broke down in connection with moves by FPL and Mr Roberts to depart BRG and transfer clients of BRG to a new business arrangement in which FPL would be associated with a different AFS licensee. Mr Bailey and Mr Thomas purported to make certain decisions and take certain decisions on behalf of BRG, but without a proper exercise of BRG’s corporate authority. Action was taken to deny FPL and Mr Roberts access to the client information held on BRG’s systems and to encourage clients to remain with BRG rather than follow FPL to an alternative AFSL.

FPL sued the respondents, alleging various breaches of its CAR agreement with BRG and oppressive conduct warranting relief under s 233 of the Corporations Act 2001 (Cth). The trial judge relevantly found that the conduct of BRG, Mr Bailey and Mr Thomas in seeking to hinder certain clients transferring out of BRG involved breaches of the CAR agreement and oppressive conduct by BRG. FPL nevertheless failed in its claim for damages, compensation and other relief because it failed to prove quantifiable loss resulting from the wrongful conduct.

During the course of the trial it emerged that, contrary to the affidavit evidence of Mr Roberts and the case initially advanced, he and FPL had in fact retained access to client information despite being denied access to BRG’s systems. Mr Roberts had taken a series of clandestine measures from July 2020 in preparation for departure from BRG. This included copying client information to third party computer systems associated with a competitor AFS licensee. The trial judge found that Mr Roberts had made a deliberate, calculated and dishonest attempt to deceive the Court in relation to these matters.

FPL relied on a report by a forensic accountant, Mr Brett Goodyer, to quantify the loss it had suffered. The Goodyer Report was based on erroneous assumptions including that FPL and Mr Roberts had not been able to access client information and FPL had lost its client book as a result. These assumptions were inconsistent with the true position that emerged during the trial.

On appeal, FPL argued that loss had been adequately demonstrated and quantified. It submitted the correct outcome is for it to be awarded compensation pursuant to s 233 of the Corporations Act, or for an order to be made for the purchase of FPL’s shares in BRG.

In addition to resisting the appeal, by notice of contention the second, third, fourth and sixth respondents argued that the trial judge should not have found that BRG’s conduct was oppressive. They relied in particular on the conduct of FPL that was said to involve “baiting”.

The Court (Free JA, Payne and Stern JJA agreeing) held, dismissing the appeal:

As to whether FPL had adequately quantified its loss and the application of the facilitation principle

1. The evidence relied on by FPL does not provide a basis for the award of compensation. The evidence suggested that there were 27 MDA clients who had been clients of FPL under the umbrella of BRG, but who did not remain clients of FPL after it transitioned to a new AFSL. FPL’s claim for compensation depends on the proposition that in each case the wrongful conduct of BRG was a cause of the MDA client not transferring with FPL. That proposition is not supported by any findings by the trial judge. Nor is it an inference that can be drawn, particularly in circumstances where those clients were free to make their own choices to respond to the circumstance of FPL leaving BRG, and there are sound reasons which may have prompted the clients not to transfer with FPL: [93]-[106].

2. FPL did not develop any fallback position that an appropriate measure of compensation could be based on some lower number of lost MDA clients. To select a number would be an exercise in speculation. It was within the power of FPL to have provided evidence about the responses of its various clients, and to provide a rational basis for inferences to be drawn about the impact of BRG’s conduct on the lost MDA clients. FPL chose to eschew a case that dealt with the responses of particular clients, and it must bear the forensic consequences: [107]-[111].

Blatch v Archer (1774) 1 Cowp 63; (1774) 98 ER 969, applied.

3. The facilitation principle is a principle of assistance in proof. A claimant for compensation can be entitled to reasonable inferences where a defendant’s breach has resulted in difficulties or impossibilities of proof of loss or damage that give rise to uncertainty: [94], [112]-[118].

Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17, Henville v Walker (2001) 206 CLR 459; [2001] HCA 52, Watts v Rake (1960) 108 CLR 158; [1960] HCA 58, Siegwerk Australia Pty Ltd (In Liq) v Nuplex Industries (Aust) Pty Ltd (2016) 334 ALR 443; [2016] FCA 158, Berry v CCL Secure Pty Ltd (2020) 271 CLR 151; [2020] HCA 27, considered.

4. Notwithstanding the facilitation principle there remains an important distinction between a rational assessment of loss, informed by the evidence capable of being adduced, and speculative guesswork in circumstances where the party seeking compensation has failed to adduce evidence that was within its power to adduce and which would allow the proper degree of certainty and particularity in the assessment process. Justice does not dictate that a figure should be plucked from the air: [119].

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10, Troulis v Vamvoukakis [1998] NSWCA 237, applied.

5. The application of the facilitation principle must take account of other relevant features of the forensic landscape. Here there was another factor creating considerable uncertainty in the proof of loss, being the false basis initially advanced by FPL. FPL chose to advance a case theory at trial that bore little resemblance to the facts as ultimately found, and which presented a version of events that was profoundly misleading. It would be unreasonable and unfair for the respondents to assume the evidential burden urged by FPL. Although the outcome involves refusing relief despite a finding that at least some loss was suffered as a result of wrongful conduct, FPL bears the forensic responsibility for the denial of compensation: [120]-[126].

Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17, considered.

As to the alternative claim for a buy-out order

6. There is not a basis to conclude that a buy-out order is a reasonable and proportionate remedial response to the oppression in circumstances where FPL has failed to demonstrate quantifiable loss: [127]-[129].

As to the notice of contention

7. The relevant respondents did not provide written submissions in support of the notice of contention in a manner that paid regard to the findings made by the trial judge. Instead they sought to rely on the submissions that had been advanced at trial. This is an unsatisfactory approach. It is incumbent on a party seeking to defend the outcome below on an alternative basis, in a manner that involves an assertion of error on the part of the trial judge, to engage with the findings actually made: [75]-[76].

8. Any assessment of the fairness of BRG’s conduct must take account of the arrangement between the relevant parties as reflected in the CAR agreement. However provocative and deceitful FPL and Mr Roberts may have been, BRG was not as a matter of fairness entitled to act in a way that was calculated to hinder and prevent FPL’s clients from transferring away from BRG: [77]-[78].

Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 288 ALR 310; [2011] NSWCA 104, applied.

JUDGMENT

1. PAYNE JA: I agree with Free JA.

2. STERN JA: I agree with Free JA.

3. FREE JA: This appeal arises from the breakdown of a financial services business that operated between three associates and their respective corporate vehicles. At the heart of the business was the first respondent, Bailey Roberts Group Pty Ltd (BRG). BRG is now in liquidation but at the time of the events that are the subject of the appeal it held an Australian financial services licence (AFSL) under the Corporations Act 2001 (Cth). The appellant, Financialstrategy.com.au Pty Limited (FPL) (now in liquidation), owned 40% of the shares in BRG. FPL and other entities provided financial services under the authority of BRG’s AFSL, as corporate authorised representatives (CARs) of BRG. BRG provided administrative support to the CARs in return for payment. The arrangements between BRG and FPL (as with other CARs) were governed by an agreement (CAR Agreement).

4. FPL was, at all relevant times, under the control of its sole director, Mr Michael Roberts (Mr Roberts). From 14 March 2001 until 1 October 2020 Mr Roberts was also a director of BRG.

5. BRG had equivalent relationships with two other individuals, Mr Ian Bailey (Mr Bailey) and Mr Leith Thomas (Mr Thomas) and corporations associated with them. The second respondent, Bailey Financial Management Pty Ltd (BFM), was a CAR of BRG and at the time of the conduct under consideration owned 40% of the shares in BRG. The sole director and shareholder of BFM was Mr Bailey. Mr Bailey was also a director of BRG throughout the relevant period. Mr Roberts and Mr Bailey were in business together, and socialised together, for many years. The third respondent, LAT Wealth Holdings Pty Ltd (LAT), was a CAR of BRG and at the time of the relevant conduct owned 20% of the shares in BRG. The sole director and shareholder of LAT was Mr Thomas. Mr Thomas was a director of BRG from 2008 and throughout the relevant period.

6. BRG, through its CARs, serviced different types of clients. Most relevantly for the purposes of the appeal, BRG serviced “MDA clients”, being clients for whom it operated managed discretionary accounts. Those accounts held bespoke portfolios of investments and were managed by BRG’s portfolio administration team based on the advice of the CAR responsible for advising the MDA client. As reflected in the CAR Agreements, the various parties to the BRG business shared an understanding that each MDA client serviced by a particular CAR was “owned” by that CAR, in the sense that the relevant CAR was entitled to remuneration derived from that client and was also entitled (as between the parties to the BRG business) to retain that client if the entity ceased to be an authorised representative of BRG. Other clients, including retail superannuation and insurance clients who acquired third party superannuation and insurance products, were treated as “belonging” to BRG rather than any of the CARs.

7. Relations between the respective parties broke down around September 2020, in connection with moves by FPL and Mr Roberts to depart BRG and transfer clients of BRG to a new business arrangement in which FPL would be associated with a different Australian financial services licensee (AFS licensee). Mr Bailey and Mr Thomas purported to make certain decisions on behalf of BRG and they and BRG took action to deny FPL and Mr Roberts access to the client information held on BRG’s systems and to encourage clients to remain with BRG rather than follow FPL to an alternative AFSL.

8. FPL sued the respondents, alleging various breaches of the CAR Agreement between FPL and BRG and oppressive conduct warranting relief under s 233 of the Corporations Act. The trial judge relevantly found that the conduct of BRG, Mr Bailey and Mr Thomas in seeking to hinder MDA clients from transferring out of BRG and into the new arrangement proposed by Mr Roberts involved breaches of the CAR Agreement (by BRG) and oppressive conduct. However, the trial judge was not satisfied that FPL had proved on the balance of probabilities that it had suffered any quantifiable loss as a result of that conduct. This was in circumstances where, contrary to the affidavit evidence of Mr Roberts and contrary to the assumptions that had been provided to the expert relied upon by FPL to quantify the loss that it had suffered, Mr Roberts and FPL retained access to client information, despite steps taken by BRG, Mr Bailey and Mr Thomas, and were able to migrate clients away from BRG to a new AFSL holder. FPL’s claim was dismissed with costs.

9. FPL appeals on the basis that loss had been adequately demonstrated and quantified, and the correct outcome is an order that the second to sixth respondents (or any of them) pay compensation to FPL pursuant to s 233 of the Corporations Act or an order requiring those respondents to purchase FPL’s shares in BRG. The second, third, fourth and sixth respondents, in addition to resisting the appeal, seek to argue by way of notice of contention that relief is not available under s 233 of the Corporations Act in any event because the conduct in question was not oppressive, unfairly prejudicial or unfairly discriminatory, including because the conduct resulted from “baiting” by FPL. In the alternative the second to sixth respondents rely on the “baiting” by FPL as a reason why any relief under s 233 of the Corporations Act ought be refused on discretionary grounds.

10. For the reasons which follow, the appeal should be dismissed. The evidence relied on by the appellant does not provide a sound basis for an award of compensation. Nor has a proper basis been established to order that one or more of the respondents should purchase FPL’s shares in BRG. In the circumstances, the notice of contention arguments do not need to be resolved. If it were necessary to resolve those arguments, I would reject them.

Parties to the appeal

11. I have explained above the respective roles of BRG (the first respondent), BFM (the second respondent) and LAT (the third respondent). The fourth respondent, Bailey Wealth Management Pty Ltd (BWM), the fifth respondent, Fumar Pty Ltd (Fumar) and the sixth respondent, Sustain Holdings Pty Ltd (Sustain Holdings) were each defendants in the proceedings below.

12. There were no findings below about any conduct by the fourth to sixth respondents and only limited attention was paid to those entities in the course of submissions on appeal. It appears from FPL’s further amended points of claim (FAPOC), which articulated the case relied upon at the time of trial, that BWM was sued on the basis that it was a corporation associated with Mr Bailey and his wife that, at one point, owned 1% of the shares in BRG as well as shares in other entities associated with the Baileys. Fumar was likewise associated with Mr Bailey and, according to the FAPOC, had come to own 39% of the shares in BRG. Sustain Holdings was sued on the basis that it was a company associated with Mr Thomas which had come to own 20% of the shares in BRG. These entities could have potential significance to any order requiring the purchase of shares in BRG from FPL. The relief sought in the notice of appeal contemplated that any or all of the respondents, including one or more of those entities, might be ordered to purchase FPL’s shares or pay compensation.

13. The FAPOC did not make any allegations about particular conduct carried out by any of BWM, Fumar or Sustain Holdings. The only allegation touching them was an allegation in the FAPOC, in the alternative, to an allegation about oppressive management of the affairs of BRG, that “the Defendants have acted on behalf of [BRG] in a way that is oppressive to, unfairly prejudicial to, or unfairly discriminatory against the Plaintiff”. The notion that any of BWM, Fumar or Sustain Holdings acted “on behalf of” BRG is obscure given the balance of the allegations in the FAPOC about the conduct said to constitute the oppression. Those allegations do not describe any conduct of BWM, Fumar or Sustain Holdings, let alone anything that is apt to be described as having been done on behalf of BRG. It is possible that the pleading may be infelicitously expressed, and the allegation that was intended to be made was that BRG acted on behalf of BWM, Fumar and/or Sustain Holdings when BRG engaged in the allegedly oppressive conduct. However, that would be equally obscure in circumstances where there does not appear to have been any suggestion that BRG or its directors were acting in 2020 on behalf of any of those entities.

14. FPL, LAT, BWM and Sustain Holdings were jointly represented on appeal by Mr Zahra SC, who appeared with Mr Turnbull. Fumar was not represented and the Court was advised by the parties that it has been deregistered as a corporation. During the course of the hearing FPL was given leave to file a notice of motion in which it sought an order pursuant to s 601AH of the Corporations Act that the registration of Fumar be reinstated. After the conclusion of the hearing, in accordance with the Court’s orders, FPL filed an affidavit indicating that by letter dated 3 December 2025 it advised the Australian Securities and Investments Commission (ASIC) of the application, and sought an indication of ASIC’s attitude to the application. As of 9 December 2025 no response to that correspondence had been received. As explained at the conclusion of my reasons, it is unnecessary to make an order reinstating Fumar as a registered corporation.

15. BRG is in liquidation and was not represented at the hearing of the appeal. A submitting appearance was entered for BRG on 29 August 2025. FPL had not obtained leave to proceed against BRG pursuant to s 471B of the Corporations Act. However, pursuant to the notice of motion filed by FPL during the appeal hearing, FPL was given leave to proceed against BRG.

16. Neither Mr Bailey nor Mr Thomas is a party to the appeal. Each was originally a defendant in the proceedings below. However, FPL discontinued its claims against those two individuals prior to trial.

Factual background and findings of trial judge

17. The trial and judgment below encompassed two sets of proceedings, known as the 2021 Proceedings and the 2023 Proceedings. The 2023 Proceedings concerned, among other things, complaints about how the resources of BRG had been used to the benefit of BFM and LAT in the defence of the 2021 Proceedings. FPL was unsuccessful in the 2023 Proceedings and it does not seek to appeal from that decision. It is therefore sufficient to focus on the facts relevant to the 2021 Proceedings.

18. As explained above, BRG provided support services to its CARs, including FPL. BRG operated a workflow management, customer relationship management and document management software program called “Minerva”. It also operated a portfolio management platform called “Pluto”. The Minerva and Pluto systems relevantly held client information that was used by the CARs to contact their respective clients and provide financial services to them. This included notes of interactions with clients, contact details for each client and information about the investments and securities held by or on behalf of each client. Those systems also held information about work in progress being performed by a CAR for a client.

19. Under cl 3.1 of the CAR Agreement between BRG and FPL, BRG was required to provide day-to-day practical support to FPL including access to, and use of, BRG’s client and investment systems. Under cl 5 of the CAR Agreement FPL agreed that information disclosed to it by BRG under the CAR Agreement was confidential.

20. By cl 9.6 of the CAR Agreement (which is set out in full below) BRG acknowledged that upon termination of the agreement BRG had “no continuing proprietary interest in clients serviced by” FPL. As the trial judge observed, the notion of a “proprietary interest” in clients, like the cognate references in the evidence to clients being “owned by” or “belonging to” a particular CAR, was technically flawed. From a practical perspective such language reflected the essential arrangement between the parties that, at least in relation to MDA clients, the relevant CAR responsible for servicing a client was entitled to service that client and derive profit from the provision of such services, and also that BRG could have no claim to retain that client as its own once the CAR Agreement was terminated and the CAR left BRG. Of course, the fulfilment of such expectations would always be subject to the wishes of the relevant clients, even if that was somewhat overlooked in the arrangements as between the CARs and BRG. That is a matter that has considerable significance for the issues concerning proof and quantification of loss, as explained further below.

21. Clause 9.6 of the CAR Agreement further provided that BRG would not as a consequence of termination of the CAR Agreement seek to “hinder or prevent” the clients of a CAR being advised by, relevantly, an authorised representative of another AFS licensee, and that BRG would make available all files and records to which those clients are entitled to their adviser (subject to any objection notified by the client within 28 days). Under cl 9.8 it was the responsibility of FPL to transfer its clients to their new AFS licensee and BRG was obliged to supply letters consenting to this transfer upon request.

22. The trial judge broadly accepted that given these obligations BRG was not entitled to act in a way that interrupted, retarded or impeded the transition of a CAR’s clients to a new home. BRG was instead obliged to facilitate the free departure of clients after termination as the CAR migrated to a different AFSL. As the trial judge found, these obligations were subject to an overriding requirement to respect the client’s own right to confidentiality in the client information. But as between BRG and FPL the arrangement clearly contemplated that, upon termination of the CAR Agreement, clients serviced by FPL would continue to be serviced by FPL, rather than BRG, under an authority granted to FPL by a different AFS licensee.

23. Between 2017 and mid-2020 Mr Roberts, Mr Thomas and Mr Bailey engaged in inconclusive negotiations about breaking up the BRG business. Options included a potential demerger of shareholders’ interests and proposals that would have involved a remaining party or parties buying out the respective interests in BRG of departing parties or their respective “client books”. In August 2020 Mr Bailey became aware of industry rumours that Mr Roberts would be leaving BRG. At the same time, concerns were raised about suspicious activities on the Minerva platform, including requests by Mr Roberts to allow a third party to access the platform (explained further below).

24. Matters came to a head in early September 2020. On 1 September 2020 BRG suspended access to its Minerva and Pluto systems by Mr Roberts and FPL. As to the detail of the decision-making process, the trial judge found that Mr Thomas determined to suspend the access and Mr Bailey acquiesced in that decision. On 4 September Mr Bailey and Mr Thomas purported to meet as the board of BRG and passed a resolution maintaining the suspension. However, these were not valid and effective decisions of BRG as a corporation. No notice was provided to Mr Roberts of the relevant meetings and he was intentionally excluded from them. In the circumstances the meetings were not validly held and Mr Bailey and Mr Thomas could not validly pass resolutions of the board. The trial judge found that the steps subsequently taken to deny access to the Minerva and Pluto systems were taken without the corporate authority of BRG.

25. On 6 September 2020 there was a further meeting of Mr Bailey and Mr Thomas at which they resolved to suspend Mr Roberts’s access to his BRG email account. The meeting was again conducted without notice to Mr Roberts and was found to be invalid for that reason.

26. Notwithstanding these measures, Mr Roberts and FPL had in fact already taken a series of measures to prepare for his departure from BRG and to extract information about FPL’s clients from Minerva. From July 2020 Mr Roberts and FPL copied information relating to those clients to a Google Drive and to third party computer systems associated with a company called Advice Evolution. This process included providing a Minerva login to an employee of Advice Evolution. Advice Evolution was an AFS licensee and hence in competition with BRG. The information included contact details and significant portions of the client records. At the time of copying the information to a Google Drive and Advice Evolution, Mr Roberts intended to move FPL and its clients to Advice Evolution and operate under its AFSL. The trial judge found that the plain purpose of accessing and copying client information was to prepare for the exit of Mr Roberts and FPL from BRG.

27. By early August 2020 Mr Roberts had obtained access to the client relationship software used by Advice Evolution, called “Worksorted”. He also obtained an email address not associated with BRG. Between 13 August 2020 and 4 October 2020 a third party engaged by Mr Roberts copied voluminous information, including detailed information relating to individual clients, from BRG’s Minerva system, using the login provided to the wife of Mr Roberts. The information was downloaded to a Google Drive folder, which was then made available to Ms Barit of Advice Evolution for copying onto Worksorted. On 21 August 2020 Mr Roberts advised Ms Barit that information relating to 32 of his 36 MDA clients had been copied and was ready to upload to Worksorted.

28. The trial judge found that the transfer of FPL’s clients away from BRG, with their consent, would have been consistent with the CAR Agreement and with the arrangement between the parties that as between BRG and an adviser, if an adviser ended its association with BRG the adviser could take its clients with it. But, as the trial judge emphasised, this proposition did not exclude a conclusion that the manner in which FPL and Mr Roberts went about the transfer and the handling of client information was wrongful. As FPL ultimately admitted below, FPL and Mr Roberts provided misleading or deceptive information to BRG in July and August 2020 about the reasons why client information was being accessed. FPL also ultimately admitted that it provided confidential information to a competitor of BRG, without consent.

29. Because he had copied information from BRG’s systems in these ways, Mr Roberts and FPL were able to continue contacting and dealing with FPL’s clients after 1 September 2020, despite being denied access to Pluto and Minerva. In his affidavit evidence at trial Mr Roberts gave evidence about these matters that was found to be “profoundly” misleading and false. Mr Roberts claimed that he was unable to contact, advise and deal with FPL’s clients, and unable to access necessary information about work in progress, once he was “locked out” of Pluto and Minerva. As a result, he asserted, FPL’s business was effectively brought to a halt on the evening of 1 September 2020. Mr Roberts claimed that FPL was “completely isolated and shut off from existing clients” as a result of BRG’s conduct. This was false. The true position was that there were no such practical impediments. A significant amount of client information had already been extracted and copied to other systems that Mr Roberts was able to access. Mr Roberts was able to, and did, continue contacting and dealing with FPL’s clients. For the same reason, BRG’s action in denying Mr Roberts the use of his email account from around 6 September 2020 did not prevent him from corresponding with clients.

30. Unsurprisingly in these circumstances, the trial judge found that Mr Roberts was not an honest witness. In various respects Mr Roberts was found to have engaged in a deliberate, calculated and dishonest attempt to deceive the Court. His Honour concluded that the evidence of Mr Roberts should not be accepted unless corroborated by contemporaneous documentary evidence.

31. On appeal, FPL did not seek to challenge any of the credibility findings made below. FPL was careful to emphasise that its arguments on appeal did not depend in any relevant way on the discredited evidence of Mr Roberts.

32. Returning to the timeline of key developments, on 9 September 2020 BRG gave notice terminating the CAR Agreement between it and FPL. On the same day FPL itself gave notice terminating the CAR Agreement on 90 days’ notice, pursuant to cl 9.1 of the CAR Agreement. On 13 September 2020 BRG purported to suspend FPL’s right to act as a CAR of BRG.

33. On 30 September 2020 BRG advised Mr Roberts by email that he was suspended and was not to provide financial services during the notice period for termination of the CAR Agreement. The email advised that BRG “will provide financial services to your clients in an attempt to maintain your clients and BRG shareholder value”. On the same day Mr Bailey and Mr Thomas caused BRG to send emails to BRG clients which contained the following:

We are writing to inform you that Michael Roberts is no longer authorised to provide financial advice under the Bailey Roberts Group (BRG) licence. As such, Michael will be separating from our business no later than the 4th of December 2020.

Our arrangement with Michael requires that he does not act in the capacity of a financial adviser for BRG with immediate effect.

Rest assured that the high quality and professional advice currently provided by both BRG and Super Advisor will not be affected by this arrangement.

Given your existing relationship with our Authorised Representative Super Advisor, Michelle Oswald (nee Little) has been appointed as your interim Financial Adviser. While you are welcome to contact any team member, you have the option of utilising Michelle as your single contact for all of your needs. Michelle is very responsible and will ensure your matter is promptly and effectively addressed.

We wish to confirm:

● Your portfolio and assets remain intact and secure;

● Our dedicated investment team continue to actively manage your portfolio and provide the services you currently receive from BRG; and

● The entire teams of BRG and Super Advisor remain on hand to continue to provide you with any financial planning, SMSF, accounting or tax matter you may have.

34. Mr Bailey also instructed Ms Oswald (the interim financial adviser designated to deal with clients previously serviced by FPL) to make contact with FPL’s clients to encourage them to remain with BRG.

35. Shortly after BRG had sent the email set out at [33] above, Mr Roberts sent an email in the following terms to FPL’s clients from the new email address which he had established:

You may have recently received a notice from Bailey Roberts Group (BRG) informing you that I am separating from BRG. I am leaving BRG but in accordance with an agreement I signed with BRG in 2006, I am unable to commence my new arrangements until 4 December 2020 (unless we both agree to an earlier date).

Essentially, I am on – what is commonly known as – gardening leave. Certainly, after this spell of great spring weather, my garden does need some attention!

In the meantime, rest assured that your investment portfolio and assets remain safe and secure and that BRG’s investment team continue to provide the investment management services you are accustomed to receiving.

Also, if you are a client of Super Advisor, the Super Advisor team will continue to look after your SMSF, accounting or tax matters.

As always, I trust that you and your family are keeping well and safe and I look forward to resuming my services to you from 4 December 2020 (or earlier if BRG agrees)!

36. Despite the original intentions of Mr Roberts, FPL did not in fact become a CAR of Advice Evolution. Instead, from 24 November 2020 it became a CAR of a different AFS licensee called Waterfall Way Associates (WWA). Mr Roberts made arrangements with Advice Evolution to access the Worksorted platform and transfer the data relating to FPL’s clients to a different client management system to be used by FPL with WWA.

37. By virtue of the respective notices of termination referred to above, the CAR Agreement between FPL and BRG was terminated on 4 December 2020. On the same day, BRG sent a letter to clients previously serviced by FPL. The letter included the following:

We refer to our previous correspondence regarding Michael Roberts and can confirm that the authorisation of Bailey Roberts Financial (BRF) and Michael Roberts as an Advisor with Bailey Roberts Group (BRG) has now terminated.

Please note that your investment portfolio and assets remain secure. Your portfolio continues to be managed in the same way and by the same team. You can still view all aspects of your portfolio online and Michelle Oswald (nee Little) remains on-hand as your key point of contact.

There is some action that will be required by you and we have outlined this in a letter that we are posting to you, however we provide a summary below:

Under the terms of your Investment Service Agreement with Bailey Roberts Group, you are required to have a nominated Financial Adviser. We provide you with your two options below:

Option One***: Continue with a known team and known service.***

BRG and Super Advisor would love for you to continue with our service offering.

If this option interests you, this would be a seamless transition as nothing will need to change with your accounting, your investment portfolio or the teams that manage both. Given Michelle Oswald's in-depth technical capabilities and your existing relationship with her, we put Michelle forth as your nominated Financial Adviser and continued single point of contact for all of your future investment needs. Of course, the investment team will still be available to discuss any aspects as required.

Fee reduction

✓ As part of your investment service fee was previously paid to BRF (Michael Roberts) we are now in a position to make an adjustment to your portfolio fee. Given the synergies between Michelle, Super Advisor and BRG, we are able to offer you a reduction in your Portfolio Management fee. Our letter will detail your new proposed fee and associated savings.

We would like to summarise several other benefits option one will provide you:

✓ The continuation of the important service of protecting your assets is not at risk of the retirement or dependent on the continuation of your financial adviser. Our responsive and broad team, who understand your affairs remain, including:

● SMSF Specialist services, accounting, tax and financial planning experts: Lidia Parr, Dawn Leech, Leigh Ransley, Nilesh Chauhan and Carla Giorgio.

● Investment and Portfolio Administration experts: Ian Bailey, Leith Thomas, Jon Kilah, Jackson Tidswell, Suzy Dimitrievski and Sophie Mortimer.

✓ The continuation of a known investment strategy and investment team with a known track record.

✓ Access to our investment software "Pluto" which is one of the most transparent platforms in regards to assets, performance and fees in Australia.

✓ All team members remain based in Australia.

✓ No one outside of this country will ever access your personal data without your permission.

✓ The office of Bailey Roberts and Super Advisor will remain in Church Street, Wollongong and is open weekdays from 9am to 5pm.

✓ We have meeting rooms in Sydney and in certain circumstances, can travel to a location convenient for you.

Should you wish to continue with our service, our letter will detail what is required by you.

Option Two: Transition away from BRG and Super Advisor

While we would obviously be disappointed if you decided to leave, we would respect any decision to do so and will try to make any transition away from our service as seamless as we can. Our letter will outline our requirements should you wish to take this option.

Thank you for your understanding and patience over this period. It has been a pleasure to have the opportunity to work with you and we look forward to a continued long and beneficially mutual relationship with you in the years to come.

If you have any questions regarding this email or your Investment Service we would welcome the opportunity to talk with you.

Kind regards

Ian Bailey, Leith Thomas & Michelle Oswald

Directors

38. As described in the body of the letter, enclosed with the letter was a contract, execution of which would enable the client to take the first option and stay with BRG. A client wishing to transfer away from BRG and remain with FPL was not given the same practical assistance in achieving that outcome. Such a client was required to send BRG a signed letter confirming their intention to terminate their agreement with BRG. There was no pro forma letter provided to facilitate the taking of that option.

39. FPL pleaded at trial that the 4 December 2020 correspondence from BRG was calculated to and did have the effect of hindering or preventing clients serviced by FPL from being advised by FPL after the termination of the CAR Agreement. The trial judge accepted that contention. His Honour found that the practical effect of the letter was to deter clients moving their business with FPL and cause them to remain with BRG. Both Mr Bailey and Mr Thomas conceded in cross-examination that the fee reduction in particular was intended to cause clients to remain with BRG. I return to these findings below in the context of explaining how the Court resolved the breach of contract and oppression cases brought by FPL.

40. Mr Roberts took further measures of his own to seek to persuade clients to move with FPL. He sent an email to his clients on 11 December 2020 in which he explained that his departure from BRG resulted from “philosophical differences” and there had been no wrongdoing by directors or employees of BRG or FPL. The email proceeded to state:

My issue is that today BRG only authorises the advisers under its [AFSL] to provide advice in relation to BRG’s MDA and does not approve any other MDAs for recommendation. This effectively means that a BRG advisor is an agent for BRG.

I want to be a financial advisor who is responsible only to my clients and to provide advice that is only in a client’s best interest and free of conflicts of interest. I do not want to be an agent for any company or financial institution. As you can imagine, this is not a decision that has been made lightly. Indeed, it is with a heavy heart and great trepidation that I am parting with a company to which I have devoted my whole focus and energy for the last 20 years.

41. Also in December 2020 solicitors for BRG advised the solicitors for Mr Roberts that any client files relating to FPL clients would be transferred from BRG once the client signed a form consenting to that transfer.

42. A significant issue that was not the subject of findings by the trial judge was precisely how many MDA clients remained with BRG and how many MDA clients transferred with FPL to a different licensee. The trial judge was satisfied that at least some of the clients of BRG who had previously been serviced by FPL remained within the BRG business. They came to be serviced by Super Advisor, as an authorised representative of BRG. It appears to be common ground that this included at least some MDA clients previously serviced by FPL.

43. At least some MDA clients serviced by FPL transferred away from BRG and remained with FPL. The parties agreed for the purposes of the trial that after 1 September 2020 FPL provided financial services to 32 clients (identified by pseudonyms) who were clients of FPL (in association with BRG) before 1 September 2020. The agreed facts did not specify how many of those clients were MDA clients. As explained below, there was evidence from other sources going to this issue.

Resolution at trial of breach of contract claim

44. At trial FPL relevantly alleged that in breach of cl 9.6, or alternatively an implied term in the CAR Agreement, BRG hindered or prevented FPL from advising clients serviced by FPL, sought to hinder or prevent clients serviced by FPL from being advised by FPL after termination of the CAR Agreement and asserted a continuing interest in clients serviced by FPL following termination. Clause 9.6 provided:

9.6 Upon Termination of this Agreement, BRG acknowledges that it has no continuing proprietary interest in clients serviced by BRG Authorised Representatives. BRG will not as a consequence of termination seek to hinder or prevent those clients being advised by another Authorised Representative of the Business or a Authorised Representative of another Australian Financial Services licensee or another personal legally entitled to do so after termination. BRG will make available all files and records to which those clients are entitled to their adviser (excepting the files and records of any client who notifies BRG within 28 days of BRG advising them of its intention to make such files and records available that this should not occur).

45. As alluded to above, FPL’s allegation as to breach of cl 9.6 was upheld by the trial judge, at least in particular respects. His Honour made the following findings in this regard:

46. “… the purported suspension of FPL’s status as authorised representative (which occurred on 13 September 2020), where not properly authorised by BRG, at least hindered clients serviced by FPL being transitioned to another AFS licensee in breach of cl 9.6 of the CAR Agreement”: J[150];

47. by sending the letter of 4 December 2020, BRG solicited clients previously serviced by FPL. The letter “plainly hindered or prevented FPL from advising clients serviced by it” and was calculated to do so. This was because “it presented the two alternative courses in an obviously unbalanced way, provided a document which clients could sign to stay with BRG but not to transfer their business to FPL, and offered an economic incentive for clients to remain with BRG”. This was a breach of cl 9.6: J[150]. Although the trial judge referred in this context to the conduct “preventing” FPL from advising its former clients, it is apparent from the broader context that the trial judge did not accept that FPL was ultimately so prevented, at least in an enduring way. The trial judge proceeded on the basis that in fact FPL was able to continue to advise its clients beyond 4 December 2020, notwithstanding the letter. The critical concept was instead the creation of a hindrance to this occurring. The language of “hinder or prevent” is a reflection of the contractual promise not to “seek to hinder or prevent”; and

48. by failing to notify clients that BRG would give the client files to FPL unless the client objected, BRG breached the obligation in the third sentence of cl 9.6. As his Honour observed, while this was a breach of the contractual obligation as between BRG and FPL, BRG would not have been entitled to transfer confidential client information to a third party without client consent. On 11 November 2020 BRG did offer to transfer client information to FPL if FPL provided the written consent of the client to such a transfer.

49. His Honour was also satisfied that BRG breached the CAR Agreement by failing and refusing to provide FPL with access to the Pluto and Minerva systems and by cutting off the BRG email account of Mr Roberts: J[153]. Those actions, which occurred between 1 and 6 September 2020, contravened cl 3.1(b) of the CAR Agreement.

50. The trial judge found that any claim for breach of contract was only available against BRG: J[155]. These findings were expressed in terms of a breach of contract by BRG as the counterparty to the CAR Agreement. No findings were made about any of FPL, LAT, BWM, Fumar or Sustain Holdings being responsible for any breach of contract.

51. There was a pleaded allegation that BRG’s liability to FPL for breach of the CAR Agreement was caused or procured by BFM (acting by and through Mr Bailey) and/or LAT (acting by and through Mr Thomas). However, the trial judge found that there was no evidence that those entities, as distinct from the individuals, caused or procured BRG’s breach of contract. In the circumstances the claims against BFM and LAT failed. No submissions have been developed on appeal to identify any error in this analysis.

52. As against Mr Bailey and Mr Thomas personally, the trial judge noted that the claims against them had been dismissed previously. It follows that to the extent any claim for relief was maintainable for breach of contract, it was only against BRG.

Rejection at trial of FPL’s claim for damages for breach of contract

50. As against BRG, having found a breach of the CAR Agreement the critical issue was then proof of loss caused by that breach, and quantification of appropriate damages to the extent that loss was established. FPL pleaded at trial that by reason of the breaches of the CAR Agreement it suffered loss and damage. This was particularised in the following terms:

[FPL] has suffered loss of clients, with at least 29 clients serviced by the [FPL] being engaged by [BRG], representing a value estimated to be approximately $1,118,805 when sold as a “client book”.

51. The trial judge acknowledged evidence of a general kind that a well-managed client transfer would likely succeed in a financial adviser transferring all or substantially all of the adviser’s clients to a third party AFS licensee. This had been the case with other representatives who had transferred their business from BRG to third party licensees. However, his Honour found that for reasons separate from the breaches of the CAR Agreement by BRG (including the surreptitious copying of client information without consent) the attempted transfer of clients by FPL was not well-managed.

52. In resisting FPL’s claims as to causation and loss, as they related to the loss of MDA clients, BRG argued that FPL:

53. retained the contact details of its clients and FPL and Mr Roberts in fact made contact with them;

54. FPL and/or Mr Roberts retained access to client notes, files and information;

55. substantial numbers of FPL’s MDA clients in fact continued to be serviced by FPL. As this was in circumstances where FPL did not have access to Minerva or Pluto, the conclusion to be drawn is that denial of access to those platforms caused no loss or damage;

56. to the extent there was any issue with the currency of information held by FPL, it would always be necessary to obtain updated information for the purposes of providing a statement of advice for a client; and

57. Mr Roberts had been working towards a planned exit from BRG for months prior to 1 September 2020.

58. After setting out these competing contentions, the trial judge made the following findings, at J[164]:

I have found that BRG in fact hindered FPL from advising clients, at least by its 4 December 2020 communication which was calculated to, and likely did, deter clients from moving with FPL from BRG to another AFS licensee. I accept that FPL and Mr Roberts had client details and contacted clients and had downloaded a substantial amount of client information his Google Drive (and then caused it to be copied to Advice Evolution’s system) but that was not sufficient to avoid the loss of several clients to BRG, although the number of clients lost is unclear. I accept that a substantial number of FPL’s clients did follow FPL to a new AFL licensee, as the evidence to which Mr Zahra refers and the statement of agreed facts makes clear, and that FPL and Mr Roberts were able to provide services to them without access to BRG’s Minerva or Pluto systems and his evidence to the contrary was false. That does not have the result that FPL suffered no loss, although it is plain that it did not, as Mr Roberts originally claimed, suffer the loss of all, or possibly most, of its client base. I address the question of the quantification of FPL’s allegedly lost “client book” (or, more precisely, the uncertain number of clients that it had lost) below.

54. On appeal FPL emphasises that in this passage the trial judge found that as a result of BRG’s conduct in breach of the CAR Agreement clients were “likely deterred” from moving with FPL from BRG to another AFS licensee. It is consistent with his Honour’s statement at J[143] that the “practical effect” of the correspondence of 4 December 2020 was to deter clients moving their business with FPL and cause them to remain with BRG.

55. His Honour found that FPL did lose “several clients” to BRG, but a “substantial number” of FPL’s clients did in fact follow FPL to a new AFS licensee. However, the trial judge did not make a finding about how many clients were lost by FPL in a way that was attributable to BRG’s wrongful conduct.

56. The significance of these qualifications regarding causation and loss is reflected in the next paragraph of his Honour’s judgment. His Honour there found that BRG’s conduct was “likely a cause of the loss of some clients to FPL”: J[165]. However, his Honour proceeded in the same paragraph to find that neither the evidence nor FPL’s submissions had fully engaged with the question of which clients were “lost” and for how long. Ultimately, his Honour made no finding about how many clients (including MDA clients) were lost by FPL, or lost by FPL as a result of the conduct of BRG that was found to constitute a breach of the CAR Agreement.

57. The evidence of Mr Roberts was that, as of 1 September 2020, FPL had 43 MDA clients and 125 retail and brokerage clients: J[167]. His Honour found that at least 29 clients previously serviced by FPL remained with BRG, at least initially, after the CAR Agreement was terminated (on 4 December 2020): J[170]. The trial judge accepted, in relation to those 29 clients, that BRG’s breach of the CAR Agreement was likely causative of FPL’s loss of revenue associated with those clients: J[170]. However, these findings did not differentiate between MDA clients and retail and brokerage clients.

58. There is a finding in similar terms at J[180], that “it is likely that some client relationships were lost by FPL as a result of BRG’s conduct”. To similar effect, in the context of analysing the value of BRG as a business, his Honour found that BRG wrongly sought to retain a significant number of FPL’s clients, “but BRG in fact lost some or many of those clients” to FPL: J[218].

The Goodyer Report

59. It is convenient at this point to explain the evidence relied on by FPL at trial to prove and quantify the loss that it had suffered. Of particular significance for the appeal is the report of Mr Brett Goodyer of 11 May 2022 (Goodyer Report). Mr Goodyer is a forensic accountant.

60. The Goodyer Report was based on a series of assumptions that proved to be inconsistent with the findings ultimately made by the Court. Mr Goodyer proceeded on assumptions that he was asked to make in a letter of instruction and the facts as he understood them based on the affidavit evidence of Mr Roberts. The Goodyer Report relevantly records that Mr Goodyer prepared his report on the footing that, following a dispute that had arisen between BRG and FPL:

61. FPL and Mr Roberts had been locked out of BRG’s client systems and prevented from accessing BRG’s databases and FPL’s client data from 1 September 2020;

62. FPL and Mr Roberts had been locked out of BRG’s email systems, which included all of FPL’s client contact details;

63. FPL had no other email accounts which it could use to contact FPL’s clients after it was prevented from accessing BRG’s email account;

64. FPL had, as a result of actions taken by BRG, lost a total of 170 clients, consisting of 43 MDA clients, 50 insurance clients and 75 personal super clients.

65. Consistently with this assumed state of affairs, Mr Goodyer described the exercise that he undertook as being to calculate the loss suffered by FPL as a result of the “loss of its Client Books”.

66. In substance, however, Mr Goodyer appears to have recognised that FPL continued to service and obtain revenue from at least some clients after 1 September 2020. There is a facial inconsistency in the assumptions, in that Mr Goodyer records that FPL lost 27 MDA clients as a result of the alleged actions of the respondents, despite having already stated that FPL lost 43 MDA clients. As explained further below, Mr Goodyer also appreciated from the business records that FPL continued to obtain revenue from MDA clients, and he made allowance for that in his calculation of lost revenue from other MDA clients.

Findings by trial judge in relation to loss suffered by FPL

63. The trial judge found that the Goodyer Report failed adequately to quantify the loss claimed by FPL in “numerous and material respects”: J[171]. This largely reflects the sharp divergence between the version of events presented in FPL’s affidavit evidence (which informed the Goodyer Report) and the true state of affairs as found by the trial judge. His Honour identified eight deficiencies in the Goodyer Report as a basis for quantifying loss. Given that FPL’s appeal focused on the treatment of MDA clients only, it is sufficient to draw attention to the following findings:

64. Mr Goodyer assumed that FPL had lost a total of 170 clients (being 43 MDA clients, 50 insurance clients and 75 personal super clients), although he also inconsistently assumed that FPL had lost 27 MDA clients. Mr Goodyer did not seek to identify the loss of revenue associated with particular clients, and was not provided with relevant information to enable him to do so. Mr Goodyer attributed any reduction in FPL’s financial performance recorded in its balance sheet to a loss of clients, “without making any attempt to distinguish any losses arising from any loss of clients from other causes of deterioration in FPL’s financial performance”. The trial judge was not satisfied that this was an appropriate methodology, as the assumption that the decline in FPL’s revenue was linked only with a loss of clients was “neither provable nor proved”;

65. as Mr Goodyer fairly acknowledged, he was unable to calculate the income stream from individual MDA clients with any degree of certainty, in circumstances where he had not been provided with the necessary information about the tiered fee schedule used to calculate MDA fees;

66. the calculation of FPL’s future loss ran for many years into the future and did not take account of the fact that FPL was no longer authorised to provide financial services or advice after 30 September 2023 (at which time Mr Roberts was appointed an authorised representative of a different licensee in his personal capacity);

67. Mr Goodyer was asked to assume that, once FPL was prevented from accessing its email account with BRG, FPL had no other email accounts that it could use to contact customers and had no other record of the contact details of clients. Both assumptions were false;

68. Mr Goodyer was asked to assume that clients would be lost over time according to assumed rates of attrition, but otherwise FPL would not have lost any other clients. Scenario 1 assumed an annual attrition rate of 11%. Scenario 2 assumed an annual attrition rate of 4% to 6%. The trial judge found that, even if the assumed attrition rates were appropriate, the evidence did not establish that FPL would not otherwise have lost clients. The assumed attrition rates were also not supported by admissible evidence, and Mr Goodyer acknowledged that on the basis of the information provided to him it was “impossible to determine at which rate the Clients Books diminish”. Mr Goodyer had not been provided with any information as to the duration or stability of relevant client relationships; and

69. Mr Goodyer calculated net income derived by FPL from MDA clients for the 12 months prior to 1 September 2020. He used this to derive an average of net monthly MDA fees. There had in fact been a material decrease in the fees earned by FPL on a month to month basis throughout that period. As a result, that approach would overstate any loss suffered in respect of MDA fees.

70. The trial judge concluded that although it was likely that some client relationships were lost by FPL as a result of BRG’s conduct, the Goodyer Report neither established the value of any client relationships thereby lost, nor provided a rational basis for the Court to determine that value for itself.

71. His Honour proceeded to find that it had been within the power of FPL to prove its loss in a reasonable way. FPL could have made information available concerning the client accounts which it contended were lost to it (by obtaining documents on compulsory process and/or by obtaining any necessary client consent). Based on such information about particular clients FPL could have calculated the revenue that was in fact lost from those accounts, and projected the future loss using such calculations.

72. On appeal FPL argues that there are various flaws in this analysis. FPL submits that, properly understood and irrespective of the erroneous assumptions that Mr Goodyer had been asked to make, the Goodyer Report did identify the loss of revenue associated with the loss of MDA clients in a manner that was logical and supported by business records of BRG and FPL. The Goodyer Report therefore allows for an appropriate quantification of compensation for the purposes of an order under s 233 of the Corporations Act. FPL’s arguments in this regard are dealt with in detail below.

Oppression claim by FPL – Findings by trial judge

67. FPL at trial alleged oppression in the conduct of the affairs of BRG and sought an order pursuant to s 233(1) of the Corporations Act for the purchase of its shares in BRG at fair value by BFM, LAT, BWM, Fumar, Sustain Holdings or any of them. In the alternative FPL sought an order pursuant to s 233 that the defendants pay compensation to FPL. FPL argued that the affairs of BRG were conducted in a way that was fundamentally inconsistent with the established understanding and expectations of the parties, and that such conduct was not justified by the conduct of FPL and Mr Roberts at the time. This amounted to oppressive, unfairly prejudicial or unfairly discriminatory conduct against FPL that unfairly benefited BRG, Mr Bailey, Mr Thomas and their related entities including BFM, LAT, BWM, Fumar and Sustain Holdings.

68. Relevantly for the purposes of the appeal, FPL’s allegations that the affairs of BRG had been conducted in an oppressive and unfair manner focused on the following conduct (relying on the same matters that were held to constitute breaches of the CAR Agreement):

69. denying access by FPL and Mr Roberts to BRG’s computer systems;

70. denying access by Mr Roberts to his BRG email account;

71. suspending FPL as an authorised representative of BRG, from 13 September 2020;

72. causing BRG to breach the CAR Agreement as alleged (which in turn picked up the allegations of hindering and preventing FPL from advising clients serviced by it); and

73. unlawfully excluding Mr Roberts from several purported board meetings, and failing to notify him of those meetings.

74. At trial the defendants emphasised that FPL and Mr Roberts had, through their deceitful and unauthorised actions in respect of client information, “baited” Mr Bailey and Mr Thomas. They invoked the principle that where a minority shareholder has baited a majority shareholder to act in an oppressive manner that is relevant to the assessment of the gravity of the oppression: Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (1998) 28 ACSR 688 at 741; [1998] NSWSC 413. They also argued that baiting of this kind may signify that there is no relevant unfairness and hence no oppression. They relied on the following passage in Re London School of Electronics Ltd [1986] Ch 211 concerning the English law of oppression:

The conduct of the petitioner may be material in a number of ways, of which the two most obvious are these. First, it may render the conduct of the other side, even if it is prejudicial, not unfair: cf Re R.A. Noble & Sons (Clothing) Ltd [1983] BCLC 273. Secondly, even if the conduct on the other side is both prejudicial and unfair, the petitioner’s conduct may nevertheless affect the relief which the court thinks fit to grant ... In my view there is no independent or overriding requirement that it should be just and equitable to grant relief or that the petitioner should come to the court with clean hands …

70. That passage was cited with approval in Morgan v 45 Flers Avenue (1986) 10 ACLR 692 at 706 and I**n the matter of Anna Bay Resort Pty Ltd [2022] NSWSC 331 at [190].

71. The trial judge accepted some, but not all, of FPL’s contentions as to oppression. His Honour found that Mr Bailey and Mr Thomas had genuine and well-founded concerns about Mr Roberts having permitted unauthorised third party access to BRG’s systems and having provided false information to BRG staff. Those concerns would have warranted denial of access to BRG’s systems, because BRG had a legitimate interest in maintaining the integrity of its systems and protecting them against unauthorised third party access.

72. Nevertheless, his Honour was satisfied that oppression had occurred. BRG had acted in an unauthorised way when it denied FPL and Mr Roberts access to the BRG computer systems on or about 1 September 2020. So too when, from around 6 September 2020, BRG denied access to the email account used by Mr Roberts. It was unlawful to exclude Mr Roberts from purported meetings of the board of BRG and to hold meetings without notice to him. The trial judge was satisfied that in each respect the conduct was oppressive. The same conclusion was reached in relation to the purported suspension of FPL’s status as an authorised representative, on 13 September 2020. The reasons for judgment do not include an explicit finding that the sending of the correspondence on 4 December 2020 was oppressive (in addition to being a breach of cl 9.6 of the CAR Agreement), but it is clear enough from his Honour’s reasoning that such a finding was implicit. The critical factor leading his Honour to conclude that oppression has occurred was that BRG was not justified in seeking to retain FPL’s clients. The key aspect of that conduct was the sending of correspondence on 4 December 2020 to FPL’s clients.

73. In terms of the alleged “baiting” of Mr Bailey and Mr Thomas, the trial judge accepted that the conduct of FPL was provocative, deceptive and wrongful, exposed BRG to real regulatory risk and was causally linked to the steps that BRG took. Those concerns would have warranted FPL and Mr Roberts being denied access to BRG’s systems. The actions of FPL and Mr Roberts would also have warranted a suspension or termination of the CAR Agreement. However, FPL was entitled to seek to transfer its clients to a third party when it left BRG. FPL’s conduct did not require the steps which BRG took to retain FPL’s clients. Nor did it justify that conduct. For BRG to seek to retain FPL’s clients was contrary to the terms of the CAR Agreement and the understanding of the parties about the arrangements that would apply when a CAR left BRG.

Notice of contention – Challenge to findings of oppression

74. It is appropriate at this point to deal with the notice of contention filed by the second, third, fourth and sixth respondents. By that notice those respondents contend that the trial judge should have found that none of the respondents engaged in conduct of the affairs of BRG that was oppressive to, unfairly prejudicial to, or unfairly discriminatory against FPL. The notice of contention asserts that the respondents were fairly and appropriately responding to the conduct of FPL and repeats the argument that any of the conduct alleged to have been oppressive was a response to baiting by FPL. Finally, it is contended that even if oppression is established relief ought be refused on discretionary grounds having regard to the findings which tended against a finding of oppression, including the conduct of FPL in baiting the respondents in relation to the conduct of the affairs of BRG.

75. The second, third, fourth and sixth respondents did not file written submissions in support of the notice of contention in a manner that paid regard to the findings made by the trial judge. Instead they sought to rely on the submissions that had been advanced on these topics at trial. In substance they invited this Court to revisit those submissions and reassess them, in light of the findings of the trial judge but without any assistance from the respondents as to how those submissions ought be understood and reframed in the context of his Honour’s ultimate findings. While oral submissions were made at the hearing in support of the notice of contention this was not adequate to overcome the deficiency in the written submissions.

76. This is an unsatisfactory approach. The submissions advanced by the defendants at trial on these and other topics have been the subject of careful and detailed consideration by the trial judge. Findings of fact on a multitude of issues have now been made. The submissions advanced below have in that sense been superseded. They cannot simply be regurgitated by cross-reference and without calibration to the findings made at first instance. It is incumbent on a party seeking to defend the outcome below on an alternative basis, in a manner that involves an assertion of error on the part of the trial judge, to engage with the findings actually made. Where contending that a trial judge has erred in the resolution of a particular issue it is elementary that a party must demonstrate that error has occurred by reference to the findings. It cannot be left to this Court to undertake that task for a respondent, including by reworking the submissions made to the trial judge in light of his Honour’s findings. Nor is it a problem that can be solved by making oral submissions that have not been foreshadowed in writing. That approach is not fair to a respondent and it is not conducive to the efficient conduct of appeals.

77. In light of the conclusion I have reached on FPL’s appeal and questions of relief, it is unnecessary to reach any concluded view about the notice of contention. If it were necessary to determine the issues raised by the second to sixth respondents, I would not accept the contentions. I respectfully agree with the reasoning of the trial judge in this regard.

78. Unfairness in the context of a claim of oppression is assessed by reference to whether “objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair”: Tomanovic v Global Mortgage Equity Corporation Pty Ltd (2011) 288 ALR 310; [2011] NSWCA 104 at [171] and the authorities cited therein. Here any assessment of the fairness of the impugned conduct concerning the affairs of BRG must take account of the arrangement between the relevant parties, reflected in the CAR Agreement, that if FPL chose to leave BRG it would be entitled (as between the parties) to seek to take FPL’s clients with it and BRG could not seek to hinder or prevent that from occurring. However provocative and deceitful FPL and Mr Roberts may have been in the manner in which they went about things, BRG was not as a matter of fairness entitled to act in a way that was calculated to hinder and prevent FPL’s clients from transferring away from BRG. The respondents have advanced no submissions to explain why it was a fair and appropriate response to the conduct of FPL and Mr Roberts to act in a way that was fundamentally at odds with the prevailing arrangement about how a CAR could leave BRG.

79. The findings of oppression made by the trial judge were therefore properly made. If there was otherwise a sound basis to order relief for such oppressive conduct in favour of FPL, it would not be logical to decline relief on the basis of the findings that FPL and Mr Roberts had acted provocatively and in a manner that tended to bait a response by BRG. The point remains that such provocative conduct did not justify BRG, Mr Bailey or Mr Thomas acting in a way that was directly contrary to the arrangement between the parties about a CAR exiting from BRG.

Claim for compensation as a remedy for oppression – Findings of trial judge

80. The possibility of an order for compensation or damages under s 233 of the Corporations Act arose given that oppression had been established. On appeal the respondents sought to argue that no claim for compensation under s 233 had been pressed at trial and it was not open to FPL to run such a claim for the first time on appeal. I reject that submission. The reasons of the primary judge record his Honour’s understanding that in the 2021 Proceedings FPL did seek an order for the payment of compensation under s 233 as a remedy for oppressive conduct, in the alternative to a claim for a buy-out order: J[182], J[203]. The respondents have not contended as part of their notice of contention that this was erroneous. Nor have they otherwise demonstrated by reference to the trial record that his Honour was wrong because FPL had abandoned any claim for compensation. In any event, the respondents appeared to concede on appeal that the availability of compensation for oppressive conduct was at least an issue that arose for determination in the 2023 proceedings, such that there could be no complaint that such a question of compensation was not fully ventilated at trial.

81. The trial judge found that there was no basis to make an order for compensation. That is because FPL’s quantification of loss in this regard relied on the same evidence as was relied on for the claim for damages for breach of the CAR Agreement. Having found that FPL had failed to establish quantifiable loss flowing from the breach of the CAR Agreement, his Honour reached the same conclusion in respect of the claim for compensation for oppression.

Claim for buy-out order as a remedy for oppression – Findings of trial judge

82. The trial judge accepted that as a matter of power a buy-out order in respect of FPL’s shares in BRG could be made notwithstanding that BRG had been wound up. FPL sought such an order, in the alternative, and argued that it should be paid a fair price, which was prima facie to be assessed on the basis of what the shares would have been worth if it had not been for the oppression.

83. In summarising the applicable principles in Munstermann v Rayward*; Rayward v Munstermann* [2017] NSWSC 133 at [22] Stevenson J described the aim of any order under s 233 of the Corporations Act as being to “put an end to the oppression”. Consistent with that approach, it has been said that relief will generally be inappropriate as a matter of discretion if there is no continuing oppression: Tomanovic v Global Mortgage Equity Corporation Pty Ltd at [140]. The trial judge below cited Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [180] and McMillan v Coolah Home Base Pty Ltd (No 4) [2022] NSWSC 584 at [477] as establishing that a court is at least less likely to make a buy-out order if any oppression has previously been ended by a company’s administration.

84. Although an order for the payment of compensation or damages is distinct from an order to buy out shares, there is a compensatory aspect to the latter form of relief. In Scottish Co-operative Wholesale Society Ltd v Meyer [1959] AC 324 at 369 Lord Denning observed that an order for the buying out of shares gives to an oppressed shareholder “what is in effect money compensation for the injury done to them”. His Lordship was satisfied that this was no objection to granting such relief where appropriate as the court’s discretion is “well exercised in making an oppressor make compensation to those who have suffered at his hands”. Likewise in Rankine v Rankine (1995) 124 FLR 340; (1995) 18 ACSR 725 at 730-731 Thomas J described a court in ordering the compulsory purchase of shares by an oppressor as “in effect awarding compensation for the respondents’ breach of duty”.

85. The trial judge was not satisfied that a buy-out order was an appropriate remedial response to the oppression that was established. His Honour gave three reasons. The first was that the matters tending against a finding of oppression (being the Court’s findings about the provocative and wrongful conduct of FPL and Mr Roberts) tended also against the making of a buy-out order and favoured the conclusion that the parties should be left to their claims in the winding up of BRG. The second reason was that any loss suffered by FPL was in its capacity as a contracting party to the CAR Agreement and not, in substance, as a shareholder in BRG. In the circumstances allowing FPL the value of its shares in BRG would have no relationship with the amount of the loss that FPL had been shown to have suffered as a result of the impugned conduct, as distinct from the loss that all the shareholders had suffered on the failure of BRG’s business. The third reason was that there was no continuing oppression of FPL in respect of BRG. BRG had become an empty shell after the completion of its winding up.

86. Against the possibility that an appellate court might reach a different view about the appropriateness of a buy-out order, the trial judge considered the evidence as to the value of FPL’s shares in BRG. His Honour found that FPL’s interest in BRG, as at September 2020, was worth $147,627. Had a buy-out order been considered otherwise appropriate, his Honour would have ordered that BFM and LAT buy out FPL’s shares in BRG at that price.

FPL’s arguments on appeal about the loss established by the evidence

87. FPL’s claim for compensation is now confined to a claim under s 233 of the Corporations Act for oppression based on loss of revenue associated with the loss of MDA clients. The essence of FPL’s argument on appeal is that the evidence adduced at trial, in particular the Goodyer Report, did establish that FPL had suffered substantial and quantified loss associated with the loss of MDA clients as a result of the wrongful conduct of BRG. On this basis FPL argues that the trial judge was wrong to deny compensation for oppression under s 233 of the Corporations Act. In the alternative FPL presses its claim for a buy-out order.

88. The evidence relied on by FPL does not descend to the level of detail that makes it possible to identify the revenue associated with particular MDA clients who were retained by FPL, or who remained with BRG. However, FPL argues that this is ultimately inconsequential when it comes to demonstrating causation of loss and quantification. It also submits that a number of the criticisms made by the trial judge of the limitations of the evidence were mistaken.

89. FPL draws attention to the fact that the evidence is sufficient to identify the revenue associated with all of the MDA clients of FPL as a whole before 1 September 2020, and the revenue associated with all of the MDA clients who remained with FPL after 1 September 2020. Mr Goodyer had relevantly analysed FPL’s profit and loss statements, brokerage statements, Monthly MDA Statements (which provided a breakdown of MDA fees associated with particular clients) and BRG business records called Monthly Adviser Income Statements dated between 30 July 2017 and 31 December 2020. The latter statements disaggregated the fee revenue derived from different types of clients and therefore enabled identification of the revenue derived by FPL specifically from MDA clients. By analysing such records, Mr Goodyer was able to determine that the MDA fees received by FPL reduced from $21,794.75 in the month ended 31 July 2017 to $2,219.75 in the month ended 31 December 2020. Mr Goodyer was also able to verify that such revenue had been derived during that period from particular MDA clients because that information was available in the Monthly MDA Statements.

90. FPL submits that the methodology adopted by Mr Goodyer was appropriate and sufficient to determine the loss suffered by FPL as a result of the loss of MDA clients after BRG’s wrongful conduct. The methodology involved the following steps:

91. Mr Goodyer assumed that, but for BRG’s breaches, FPL would continue to earn in future the same average monthly net MDA fees after 1 September 2020 as it had earned for the twelve months prior to that date. This did not involve (as suggested in the findings of the trial judge) any combination of revenue derived from the servicing of other types of clients. Mr Goodyer was instead able to isolate the reduction in revenue associated specifically with MDA fees, and to postulate a counterfactual in which that specific revenue stream continued as it had before 1 September 2020;

92. having determined that counterfactual revenue stream, Mr Goodyer applied an assumed attrition rate of 11% per annum (being Scenario 1). This resulted in reduced counterfactual MDA fee revenue per month after 1 September 2020. The adjusted figure represents the counterfactual assumed MDA fees. An equivalent exercise, using a less aggressive rate of attrition, was Scenario 2;

93. Mr Goodyer then deduced from the counterfactual assumed MDA fees the actual monthly revenue received by FPL from its MDA clients after 1 September 2020. In this respect, Mr Goodyer implicitly departed from the assumptions that he was asked to make. Although he had been asked to assume that FPL had lost its client books as a result of BRG’s conduct, Mr Goodyer recognised from FPL’s financial records that this was not the case and he made appropriate allowance for this. Relevantly, Mr Goodyer recognised that FPL retained a number of MDA clients after 1 September 2020. He made allowance in his calculations for the revenue derived from those clients after that time, when arriving at a net figure said to represent FPL’s loss of revenue in respect of MDA clients; and

94. as the Goodyer Report was finalised on 11 May 2022, Mr Goodyer was able to quantify the loss to that point on a “past loss” basis. In relation to future loss, Mr Goodyer projected the same figures on a future basis, assuming the same rates of attrition in Scenario 1 and Scenario 2. To arrive at a net present value of such future revenue, Mr Goodyer applied a discount rate of 5%.

95. FPL submits that once this methodology is appreciated, there is no substance to the criticism made by the trial judge that Mr Goodyer did not know the specific clients retained by FPL after 1 September 2020. That is because, FPL submits, the methodology obviated the need to know the specific clients or number of clients that were lost or not lost by FPL.

96. To the extent that it is relevant to know how many MDA clients were retained or lost, FPL points to the unchallenged evidence of Mr Roberts at trial that as of 1 September 2020 he was servicing 43 MDA clients, and only 16 MDA clients were later re-engaged with FPL through a different AFS licensee. FPL invites this Court to infer that 27 MDA clients were therefore “lost” to BRG as a result of BRG’s conduct. To the extent that the submission depends on the evidence of Mr Roberts it is problematic in circumstances where the trial judge concluded that he was not an honest witness and his evidence should not be accepted unless corroborated by contemporaneous documentary evidence: J[23]. That finding is not challenged on appeal. Here there is supporting evidence that is broadly consistent with the figure given by Mr Roberts. Mr Thomas gave evidence at trial that approximately 20 to 25 of the former MDA clients of FPL entered into new agreements with BRG. A BRG business record from January 2021 also lists 24 MDA clients who were previously FPL clients and who had come to be serviced by Super Advisor, a CAR of BRG that was appointed to service such former clients of FPL. For the purposes of analysis below I have used the figure of 27 lost MDA clients. If the point were decisive, it would be appropriate to use a slightly lower figure.

The evidence is inadequate to establish the quantifiable loss caused by BRG’s conduct

93. FPL’s arguments on appeal attempt to salvage a case on quantifiable loss in circumstances where the case as originally formulated by FPL had in significant respects failed at trial. That is not to suggest that FPL is now shut out from pursuing its arguments on appeal. FPL’s arguments remain within the scope of the issues agitated at trial.

94. The Goodyer Report was predicated on a number of assumptions that are at odds with the facts as ultimately found by the trial judge. Again, this is not necessarily fatal. FPL is entitled to argue, as it does, that the Goodyer Report can be relied on to quantify the loss suffered by FPL as a result of the conduct of BRG that was found to be oppressive, to the extent that it provides a rational approach having regard to the facts as found by the trial judge. However, it does highlight the need for careful scrutiny of the evidence. It is also relevant to appreciate this context when it comes to assessing FPL’s argument that, as the wronged party, it should be entitled to the benefit of the doubt when it comes to proof and quantification of loss. Likewise the context is important when testing the related proposition that if there was to be any question about the attribution of loss to other causes it was incumbent on the respondents to prove that FPL’s apparent loss was not caused by BRG’s wrongful conduct.

95. There is an immediate temporal difficulty with the analysis in the Goodyer Report. Mr Goodyer selected 1 September 2020 as the relevant breakpoint for his before and after analysis. That approach was effectively driven by the factual assumptions made by Mr Goodyer, which postulated that from 1 September 2020 FPL lost all access to client records and contact details, and thereafter it lost all of its clients (although, as I have explained above, Mr Goodyer’s analysis recognised that FPL in fact retained some clients).

96. This approach cannot be reconciled with the timing of the conduct that the primary judge found to be oppressive. The oppressive conduct as found spans the period from early September 2020 to 4 December 2020. Properly scrutinised, however, the critical conduct was that which occurred on 4 December 2020.

97. The first two episodes of oppressive conduct, in early September 2020, involved shutting off FPL and Mr Roberts from access to the Pluto and Minerva systems and the email account used by Mr Roberts. On the findings of the trial judge, there is no basis to conclude that these particular actions resulted in FPL losing any MDA clients. His Honour did not make any finding in that regard. Nor would it logically follow from the findings otherwise made by his Honour. The true position was that FPL and Mr Roberts were already well advanced in a surreptitious plan to depart BRG. They had secured access to the necessary client information, including client contact details, and established an alternative email account. FPL has not shown that in those circumstances there was any likely connection between the oppressive conduct that occurred between 1 and 6 September 2020 and the loss of any MDA clients.

98. The finding that it was oppressive to hold purported meetings of BRG without Mr Roberts and without prior notice to him of those meetings has no independent significance in terms of a connection with the loss of MDA clients. That aspect of the oppression is relevant only to the extent that it informs the actions then purportedly taken by BRG, which I have separately addressed.

99. FPL has the benefit of favourable findings, albeit in qualified terms, in respect of the two later acts of oppression as found by the trial judge. His Honour accepted, at J[150], that the purported suspension of FPL’s status as an authorised representative of BRG on 13 September 2020 at least “hindered” clients serviced by FPL from being transitioned to another AFS licensee. A finding of “hindrance” was sufficient to demonstrate a breach of cl 9.6. However, as a proposition of causation on the oppression case that does not take matters as far as is necessary for FPL’s purposes. FPL’s claim for compensation as it relates to this aspect of the oppressive conduct depends on establishing that the oppression was a cause of existing MDA clients being lost as an ongoing source of revenue. It is not enough to say that there may have been some temporary hindrance. The distinction is a material one in circumstances where, by late September 2020, Mr Roberts was corresponding with his existing MDA clients and offering continuity of service through a new AFSL arrangement. Given the findings about FPL’s ongoing ability to deal with its clients and offer them services within a reasonable timeframe through an alternative arrangement, I would not find that the conduct of suspending FPL’s status as an authorised representative was in fact a cause of any MDA clients being lost to FPL.

100. For the purposes of establishing a causal link to the loss of clients, the more significant conduct on the findings of the trial judge was the sending of the letter of 4 December 2020. By that conduct BRG encouraged and incentivised MDA clients to remain with BRG and discouraged them from transferring to a new AFSL with FPL. That was found to have in fact resulted in the loss of at least some clients (of an uncertain number), because they were deterred from moving with FPL: J[164].

101. It follows from this analysis that the Goodyer Report could not be treated as quantifying the loss caused by BRG’s oppressive conduct without at least making some substantial adjustments for the fact that the causally significant conduct occurred on 4 December 2020, and not 1 September 2020 as assumed by Mr Goodyer. FPL did not explain in its submissions how the Court should go about making adjustments to the calculations performed by Mr Goodyer in order to address this problem in a principled way.

102. It is unnecessary to attempt the exercise because there is a more fundamental deficiency with the evidence relied on by FPL. The basic purpose of the Goodyer Report, in relation to MDA clients, was to identify the difference between the fees derived from MDA clients before the wrongful conduct of BRG and the fees derived from MDA clients after the wrongful conduct of BRG. The underlying theory of causation and quantification propounded by FPL is that every client of FPL which did not make the transition to a new AFSL with FPL after the wrongful conduct occurred chose this course because of the wrongful conduct of BRG. Mr Goodyer made adjustments, applying the two alternative attrition rates in Scenario 1 and Scenario 2, as a way of recognising that there would be additional loss of MDA clients over time, using figures derived from an assessment of the usual rate of client loss over time. But in the first instance his analysis assumes that to the extent that the revenue figures showed a reduction in MDA fee revenue after the relevant breakpoint, that is a relevant measure of loss because the reduced revenue signifies that an MDA client was lost to FPL. FPL’s argument in seeking compensation on the basis of Mr Goodyer’s calculations assumes that in the case of every such client this was a result of BRG’s wrongful conduct.

103. The issue turns on the 27 MDA clients who were clients of FPL under the umbrella of BRG, but who did not remain clients of FPL after it transitioned to a new AFSL. Although the trial judge did not analyse the point in these numerical terms, nothing turns on that as a matter of substance. The trial judge was prepared to infer that at least some of those 27 clients were “lost” by FPL as a result of BRG’s conduct in hindering or preventing them from making the transition. However, his Honour was evidently not prepared to accept that this was true of all of those clients. FPL argues that the trial judge misunderstood the nature of its evidence on loss when making the criticism that FPL had failed to prove the lost revenue associated with particular clients. But this argument itself overlooks the true significance of the gap in the evidence about how many of the lost clients could be said to have been lost as a result of BRG’s wrongful conduct.

104. The implicit assumption in FPL’s case that all of the 27 lost MDA clients fall into that category is not supported by any findings by the trial judge. Nor is it an inference that I would draw as a matter of logic. As I sought to emphasise at the outset of these reasons, in any given case it was a matter for a client to choose how they wished to proceed in the circumstances that arose from September 2020 onwards. While FPL and BRG may have had their own arrangements about their respective “proprietary” claims over FPL’s clients, those clients were autonomous actors and they were free to make their own choices to respond to the circumstance of FPL leaving BRG. There may be sound practical reasons that might prompt clients to remain with the existing AFS licensee, and accept the services of a different representative. Simple inertia might mean that this is the approach preferred by some clients. A client may or may not have any sense of personal attachment to their existing representative. A client may be happy to take the opportunity to move to an alternative adviser. For example, in the circumstances of this particular case, a client of FPL may well have been unnerved by the departure of FPL from BRG, and preferred to stay with the existing licensee.

105. Timothy Lane, a valuer called by FPL with considerable experience in the financial services industry, gave evidence that when an adviser leaves a branded financial planning firm and goes to another firm, typically some clients move with the adviser and some stay with the original branded firm. He accepted that clients exercising such a choice to stay was an ordinary and expected incident of any adviser moving from one firm to another. Mr Goodyer, while resistant to propositions about what was or was not “typical”, gave evidence along the same lines. Pointing slightly more favourably to FPL, Mr Thomas gave evidence to the effect that the loyalty of clients is “generally” to the human adviser rather than the corporate licensee.

106. It has not been established by reference to any findings or evidence that the usual expectation, all other things being equal, is that all of the clients associated with a particular CAR will remain with that representative if the representative relocates to another AFSL. The trial judge acknowledged that there was evidence that a well-managed and orderly transfer from one AFS licensee to another a representative could expect to transfer substantially all of its clients. But that does not assist FPL in circumstances where, independently of the oppressive conduct by BRG, this was not a well-managed and orderly transfer of FPL’s clients.

107. It is sufficient for FPL’s purposes to find that BRG’s oppressive conduct was a cause of a client not moving with FPL: see Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 at 315. Nevertheless, it is not plausible to infer that every client who was lost to FPL after 4 December 2020 (whether because they stayed with BRG or made some alternative arrangement) was lost because of the conduct of BRG that was found to be oppressive.

108. If it is not reasonable to infer that all of the lost clients were lost because of BRG’s conduct, but at least some clients (plural) did fall into that category on the findings of the trial judge, logic would suggest that the appropriate measure of compensation would be based on a number of lost MDA clients somewhere between 2 and 27. However, FPL did not develop any fallback position along these lines. As a result, it cannot point to evidence that would provide a foundation for the Court to draw a reliable conclusion about how many of the 27 lost MDA clients were lost as a result of BRG’s conduct.

109. The factual circumstances do not enable inferences to be drawn in this respect in FPL’s favour. The question of forensic significance is how FPL’s existing clients responded to the correspondence from BRG on 4 December 2020. As explained further below, that is an issue on which FPL always bore the onus of proof. If the Court is to be asked to draw inferences about how many of the 27 lost MDA clients were influenced by that correspondence not to transition away from BRG, it was incumbent on FPL to provide an evidentiary foundation. For example, it would have been open to FPL to adduce evidence from its own records and from Mr Roberts about what communications were sent and received after this time from particular clients. This would have shed light on what choices were made by which clients, and when. Such evidence may not have revealed the actions and attitudes of every client among the 27. However, it could well have provided a foundation for inferences to be drawn about the effect of BRG’s correspondence of 4 December 2020. Evidence of such a kind may have been particularly significant in showing that existing clients responded adversely to the correspondence of 4 December 2020, and had not already made their choices based on earlier correspondence from BRG (which was not found to be wrongful) and FPL. Evidence from or about the clients who chose to remain with FPL could also have shed light on the responses of clients more generally.

110. “[A]ll evidence is to be weighed according to the proof which it was within the power of one side to have produced, and in the power of the other to have contradicted”: Blatch v Archer (1774) 1 Cowp 63 at 65; (1774) 98 ER 969 at 970. It was within the power of FPL to have provided evidence about the responses of its various clients, and to thereby enable inferences to be drawn about the impact of BRG’s conduct on the lost MDA clients. FPL chose to eschew a case that dealt with the responses of particular clients. That left a gap and FPL must bear the forensic consequences.

111. FPL argues that it is impractical and unrealistic to say that it should have adduced evidence from individual clients demonstrating why they chose not to transition away from BRG with FPL. FPL points out, correctly, that it is unrealistic to expect that such former clients would be cooperative in circumstances where they are no longer in FPL’s “camp”. However, this response wrongly assumes that the evidentiary gap could only have been filled by direct testimonial evidence of this kind from the clients in question.

112. FPL’s answer more generally is to say that, having established oppressive conduct and having succeeded in showing that at least some loss was suffered (because the trial judge accepted that at least some clients were deterred by BRG’s conduct), FPL should have the benefit of favourable inferences. A related proposition is that in those circumstances it was effectively incumbent on the respondents, by way of a shift in the evidential onus, to prove that the loss apparently suffered by FPL was not suffered or was attributable to other factors. FPL thereby calls in aid familiar authorities governing the proof and quantification of loss. The overarching principle is what is referred to in the plurality judgment in Cessnock City Council v 123 259 932 Pty Ltd (2024) 281 CLR 39; [2024] HCA 17 (per Edelman, Steward, Gleeson and Beech-Jones JJ) as the facilitation principle.

113. FPL relies on Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 at [148] (citing Watts v Rake (1960) 108 CLR 158; [1960] HCA 58 at 160) as signifying that it was effectively for the respondents to disentangle contributing factors and show that FPL should not recover compensation in respect of the lost MDA clients, in circumstances where they had been shown to have been lost after the oppressive conduct. The approach was also said to be supported by Siegwerk Australia Pty Ltd (In L**iq) v Nuplex Industries (Aust) Pty Ltd (2016) 334 ALR 443; [2016] FCA 158 at [79]-[82], where Beach J held that once a plaintiff has established a loss that is the “apparent or likely result” of a breach it fell to the defendant to show facts which “might support an alternative reasonable causation hypothesis”.

114. These statements reflect different aspects of the considerations of proof that underpin, and are embodied in, the facilitation principle. That principle was considered in Cessnock City Council in the context of a claim for contractual damages. Neither party in the present case suggested that there is any relevant difference in the application of the principles of proof of loss when it comes to the assessment of statutory compensation under s 233 of the Corporations Act. Nor do the authorities suggest a relevant distinction in this regard. The plurality judgment in Cessnock City Council at [128] refers to the various descriptions in Australian judgments of what their Honours preferred to call the facilitation principle. These descriptions include a shifting of the “evidential onus”, and the raising of a “prima facie inference” or “prima facie case” for the claimant. One of the authorities cited in this passage is Berry v CCL Secure Pty Ltd (2020) 271 CLR 151; [2020] HCA 27 at 169, [29]. Berry concerned a claim for damages under s 82 of the Trade Practices Act 1974 (Cth) for misleading or deceptive conduct contrary to s 52 of that Act. In Berry at [29] Bell, Keane and Nettle JJ said (references omitted):

While a claimant bears the legal burden of establishing the amount of its loss or damage, the nature and circumstances of the wrongdoer's conduct may support an inference or presumption that shifts the evidentiary burden

115. As reflected in this passage, the facilitation principle does not involve any shifting of the legal onus of proof. The onus remains on the party claiming compensation or damages to prove loss arising from the relevant breach: Cessnock City Council at [61]. The facilitation principle is concerned with how the claiming party may discharge that onus. In Cessnock City Council the relevant application of the principle involved the assumption or inference in favour of the claiming party that, had the contract been performed, they would have recovered the expenditure reasonably incurred in anticipation of, or reliance on, the performance of the contract. The strength of that assumption or inference was held to depend on the extent of the uncertainty that results from the breach. The facilitation principle was thereby found to be tied to its rationale, namely the “uncertainty in proof of loss occasioned to the plaintiff by the defendant’s breach”: [61]. This is one way in which the principle facilitates the discharge of the legal onus of proof. More generically, their Honours referred to the principle, derived from the law of torts, that a plaintiff is assisted in proof by reasonable inferences where a defendant’s breach has resulted in difficulties or impossibilities of proof of loss or damage. It is a principle of “assistance in proof”: [127].

116. Edelman, Steward, Gleeson and Beech-Jones JJ at [67] noted that “the description ‘facilitation principle’ emphasises that the principle is not rigid. All the circumstances must be considered”. In the context of that case the strength with which the principle applied to facilitate proof of loss by reference to wasted expenditure was affected by the considerable uncertainty caused by the Council’s breach of contract.

117. Their Honours said the following at [129] (footnotes omitted):

Whatever the description of the principle, its essence is that it facilitates the discharge of the plaintiff's legal onus of proof of loss in circumstances where the defendant's wrongdoing has resulted in uncertainty regarding the quantum of loss. This facilitation principle operates where uncertainty arises from the defendant's breach and is capable of coexisting with other principles concerning facilitation of proof that might assist either the plaintiff or the defendant, such as the principle in Blatch v Archer that "all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted".

118. At [139] their Honours explained how the principle aligns with broader compensatory principles:

In summary, the facilitation of the plaintiff's proof arises in cases where the defendant’s breach of an obligation results in uncertainty and difficulty of proof of loss for the plaintiff, who has incurred expenditure in anticipation of, or reliance on, the performance of the obligation that was breached. The facilitation of proof that reasonably incurred expenditure would have been recovered has been described by Leggatt J as an example of courts doing the "best they can not to allow difficulty of estimation to deprive the claimant of a remedy, particularly where that difficulty is itself the result of the defendant's wrongdoing" [Yam Seng Pte Ltd v International Trade Corporation Ltd [2013] 1 Lloyd’s Rep 526 at 553 [188]]. In applying the principle "reasonably ... according to the circumstances of each case" [Wilson v Northampton and Banbury Junction Railway Co (1874) LR 9 Ch App 279 at 286], the plaintiff is given an evidential "benefit of any relevant doubt" that expenditure would be recouped to the extent that it was reasonable, with the practical effect of giving the plaintiff "a fair wind" to establish loss [Browning v Brachers [2005] EWCA Civ 753 at [210]]. The strength of the wind will depend upon the extent of the uncertainty resulting from the breach by the defendant [Porton Capital Technology Funds v 3M UK Holdings Ltd [2011] EWHC 2895 (Comm) at [349]]. And all of the circumstances, including any evidence led by the defendant, must be considered. The plaintiff is given a "fair wind" but not a "free ride".

119. Notwithstanding the facilitation principle there remains an important distinction between a rational assessment and quantification of loss, informed by the evidence capable of being adduced, and speculative guesswork in circumstances where the party seeking compensation has failed to produce evidence that it was within its power to produce and which would allow the proper degree of certainty and particularity in the assessment process. As a general proposition, mere difficulty in estimating damages does not relieve the court from the responsibility of estimating as best it can. But there is less justification for that approach in circumstances where a party seeking compensation has fallen short in adducing evidence of a kind that permits certainty and particularity: Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768, [38]; [2003] HCA 10. Where the evidence does not provide a rational foundation for a proper estimate of damages or compensation, guesswork ought not be substituted for evidence and it is appropriate not to make an award. Justice does not dictate that a figure should be plucked from the air: Troulis v Vamvoukakis [1998] NSWCA 237.

120. As FPL correctly submits, this is a case where uncertainty about how many MDA clients were lost to FPL arises because of the conduct of BRG that was both in breach of cl 9.6 of the CAR Agreement and oppressive within the meaning of s 232 of the Corporations Act. That provides a prima facie basis for invocation of the facilitation principle. That in turn might tend to suggest that FPL is entitled to the “benefit of any relevant doubt” and a “fair wind” in the assessment of loss. Looked at from the perspective of the respondents, that would suggest an evidential onus on their part to resist the inference that the cause of MDA clients not transferring to FPL was the oppressive conduct of BRG. However, the application of that principle must take account of other relevant features of the forensic landscape.

121. Here there are distinctive features that make it inappropriate to let the “fair wind” blow strongly in favour of FPL. To give FPL the benefit of a favourable and strong inference that if a client failed to transition away from BRG with FPL that was a result of the oppressive conduct of BRG on 4 December 2020, carries with it the implication that it effectively fell to the respondents to dispel that inference at trial, because there was a shift in the evidentiary onus. This has an air of forensic unreality in the circumstances of this case. The facilitation principle is a principle of proof. It would be a perversion of the principle to apply it on appeal in a way which ignores the forensic contest that in fact took place between the parties.

122. The case which FPL chose to advance at trial, through the affidavit evidence of Mr Roberts and reflected in the Goodyer Report, was that FPL was wrongfully shut out from accessing essential client information from 1 September 2020, prevented from contacting clients (through the denial of access to contact information and the shutting down of the email account of Mr Roberts) and effectively prevented from continuing to service FPL’s clients. The respondents were entitled to approach the trial, including questions of causation and quantification of loss, on the basis that it was meeting such a case. FPL’s case did not withstand scrutiny. The trial judge found that it presented a version of events that was profoundly misleading. Mr Roberts was found to have made a deliberate, calculated and dishonest attempt to deceive the Court on critical matters going to his ability to continue servicing clients and manage their transfer away from FPL. While FPL made belated admissions as to the true state of affairs, that only occurred during the course of the trial: J[96].

123. To the extent that FPL had success in nevertheless demonstrating that some oppressive conduct on the part of BRG had occurred, that involved a substantial shift in forensic focus. The facts as ultimately found bore little resemblance to the case theory advanced in the affidavit evidence relied on by FPL. As the plurality was at pains to emphasise in Cessnock City Council the facilitation principle is tied to its rationale, which is the uncertainty in proof of loss that is suffered by a plaintiff because of a defendant’s breach. Here another factor creating considerable uncertainty in the proof of loss was the false basis initially advanced by FPL, and developed in the evidence of Mr Roberts, about how the business of FPL had been disrupted by the actions of BRG. Given this forensic context, it is unrealistic to expect that the defendants at trial ought to have anticipated that questions of causation and loss might come to be reframed in terms of how many MDA clients, if any, were lost to FPL as a result of the particular conduct of BRG in sending the letter to FPL’s clients on 4 December 2020.

124. The decisive question that has now emerged is this – in circumstances where Mr Roberts in fact had access throughout to client information and contact details, and was in the process over several months of planning his departure from BRG and encouraging his clients to come with him, how many MDA clients were deterred from doing so because of BRG’s conduct in sending the letter of 4 December 2020? It is unreasonable and unfair to suggest that the respondents assumed an evidential burden to address such a question in circumstances where the very framing of the question is at odds with the case advanced by FPL in its evidence at trial.

125. The net result of this analysis is problematic. There is not a proper basis to award compensation as calculated by Mr Goodyer, based on the unproven assumption that all 27 of the lost MDA clients were lost as a result of BRG’s oppressive conduct. Nor is there a demonstrated basis to award compensation in some lesser amount, based on a notional figure of lost MDA clients somewhere between 2 and 27. The evidence does not provide a rational basis for selecting a number. In circumstances where it was within the power of FPL to provide a basis to inform that assessment, it is not appropriate to engage in guesswork to choose a number. On the other hand, the trial judge found that at least some of the 27 lost MDA clients were lost as a result of BRG’s conduct. The respondents have not suggested that finding was wrong. It follows that denying compensation altogether does involve refusing relief for a recognised but unquantified loss. However, FPL bears the forensic responsibility for that outcome. It has advanced no alternative submissions about an appropriate measure of compensation apart from the figures produced by Mr Goodyer.

126. FPL has therefore failed to demonstrate a proper basis for allowing the appeal and making an award of compensation. In those circumstances it is unnecessary to address the question of which, if any, of the second to sixth respondents ought properly be held liable to pay such compensation, in circumstances where none of those entities was found to have engaged in oppressive conduct.

Lack of justification for a buy-out order

127. FPL argues in the alternative to its claim for compensation that the trial judge ought to have ordered that some or all of the second to sixth respondents should buy out FPL’s shares in BRG. In light of the conclusions I have reached about FPL’s failure to demonstrate quantified loss attributable to the oppressive conduct of BRG (in particular the sending of the letter of 4 December 2020), there is also no proper basis to make such a buy-out order.

128. FPL’s submissions on appeal emphasised that the commercial value that the shareholders derived from their shareholding in BRG was tied to the CAR Agreements that existed between BRG and each of its shareholders. BRG was essentially a service entity. From this premise FPL argues that the loss that it suffered as a result of a breach of the CAR Agreement (which is also the conduct found to be oppressive) was loss suffered in its capacity as a member of BRG. FPL argues that if it is not directly compensated by an order for compensation it will not have been made whole for the loss suffered by reason of the oppression, and the appropriate relief is a buy-out order.

129. Those arguments assume that FPL has been shown to have suffered quantifiable loss as a result of the oppressive conduct of BRG. Unless that is so, there can be no basis to conclude that a buy-out order is a reasonable and proportionate remedial response to the oppression. For the reasons set out above, FPL has failed to demonstrate quantifiable loss resulting from the oppression. In the circumstances, there is no basis to make a buy-out order.

Proposal to reinstate the registration of Fumar

130. By the notice of motion filed with leave during the course of the hearing FPL seeks an order pursuant to s 601AH of the Corporations Act that the registration of Fumar be reinstated. Such an order would have utility if relief was to be ordered against Fumar. It was not suggested that any other purpose would be served, or that re-registration was required in order to resolve the appeal. If the Court were to order that the registration of Fumar be reinstated, it would necessitate further steps being taken to clarify the representation of Fumar and, if necessary, seek the de-registration once again of Fumar or otherwise attend to its affairs. In circumstances where the appeal should be dismissed, the more appropriate outcome is to dismiss the notice of motion insofar as it seeks the reinstatement of the registration of Fumar.

Appropriate orders

131. The orders that I would make are:

132. Appeal dismissed.

133. Paragraph 2 of the notice of motion filed by the appellant on 2 December 2025 is dismissed.

134. The appellant is to pay the costs of the second, third, fourth and sixth respondents.

Addendum

132. On 22 April 2026, as this judgment was being finalised, the Court was informed by email that the appellant had been wound up in insolvency and liquidators appointed. Leave was granted to the parties (including the liquidators) to make written submissions about whether there was any reason the decision should not be delivered on 30 April 2026. No submission was received.

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[1998] NSWSC 413