Flageul v WeDrive Pty Ltd

Federal Court of Australia|2020-11-18|Before: Steward J

Lamont v. University of Queensland (No 2) [2020] FCA 720 Maric v. Ericsson Australia Pty Ltd [2020] FCA 452; (2020) 293 I.R. 442 McKerlie v. Western Australia (No 2) [2006] WASCA 274 Melbourne Stadiums Ltd v. Sautner (2015) 229 F.C.R. 221 MWJ v. The Queen [2005] HCA 74; (2005) 80 A.L.J.R. 329 PIA Mortgage Services Pty Ltd v. King (2020) 274 F.C.R. 225 R v. Kucma (2005) 11 V.R. 472 Republic of Nauru v. WET040 (No 2) [2018] HCA 60; (2018) 93 A.L.J.R. 102 Sanders v. Glev Franchises Pty Ltd [2002] FCA 1332 Shea v. TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; (2014) 314 A.L.R. 346 The Environmental Group Ltd v. Bowd [2019] FCA 951; (2019) 288 I.R. 396 The Environmental Group Ltd v. Bowd (No 2) [2019] FCA 1227 Thorne v. Kennedy (2017) 263 C.L.R. 85 Wayde v. New South Wales Rugby League Ltd (1985) 180 C.L.R. 459

National Practice Area: Employment and Industrial Relations

AND: WEDRIVE PTY LTD T/A WEDRIVE (ABN 47 621 317 324) First Respondent

order made by: STEWARD J DATE OF ORDER: 18 NOVEMBER 2020

The proceeding be dismissed.
There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

STEWARD J.: 1 Once again, a chief executive officer ("C.E.O.") has had a tragic falling out with his fellow board members. The applicant ("Mr. Flageul") was C.E.O. of the first respondent, WeDrive Pty Ltd ("WeDrive"), a company incorporated on 25 August 2017. Mr. Flageul (as trustee of the We Drive Melbourne Trust) was also a shareholder in, and a director of, WeDrive. On 21 December 2017, the second respondent ("Mr. Mace"), a non-executive director of WeDrive (and, through a company owned or controlled by him, its majority shareholder), terminated Mr. Flageul's employment as C.E.O. Subsequently, Mr. Flageul resigned as a director of WeDrive and sold his shares in that company for $1. Mr. Flageul has sued WeDrive, Mr. Mace, and another director of WeDrive, who is the third respondent ("Mr. Taylor"). Mr. Taylor also owned shares in WeDrive through a company he either owned or controlled, and was the executive chairman of WeDrive. Mr. Flageul seeks the payment of pecuniary penalties under the Fair Work Act 2009 (Cth.) (the "F.W. Act"), damages pursuant to that Act, the Corporations Act 2001 (Cth.) (the "Corporations Act") and the Australian Consumer Law ("A.C.L.") as set out in Sch. 2 to the Competition and Consumer Act 2010 (Cth.), as well as certain declarations. His causes of action comprise claims of adverse action, breach of s. 358 of the F.W. Act, and claims of oppression and unconscionable conduct on the part of the respondents. An additional claim alleging misleading and deceptive conduct was not pursued before me. 2 The trial took place over five long days and was confined to the issue of the liability of the respondents. It was heard using Microsoft Teams because of the prevailing COVID-19 pandemic. The Court is grateful to Counsel and their respective instructing solicitors for their co-operation and courtesy in ensuring the successful completion of such a large and complex matter in very trying conditions. 3 For the reasons which follow, and with very great respect, I reject each of Mr. Flageul's claims.

Overview of the Case 4 It is useful to give an overview of Mr. Flageul's claims against the respondents. For many years Mr. Flageul sought to develop an application or "app" called "WeDrive." The app was intended to permit a member of the public who had driven to an event, but did not want to drive home (or could not drive home), to be allocated a driver who would arrive at the event and drive the member of the public home in their car; that driver would then be collected by another driver (a co-driver). By early 2017, considerable work had been completed in the development of this app, which was owned by Mr. Flageul's company, WeDrive Australia Pty Ltd ("WeDrive Australia"). 5 Mr. Mace was, and remains, a majority shareholder, director and executive chairman of Multi Services Solutions Group Pty Ltd ("M.S.S. Group"). Mr. Christopher Russell was at the time the C.E.O. of this company. It owned six subsidiaries which carried on, as I understood it, distinct businesses. One of these was called M.S.S. Transport Services Pty Ltd ("M.S.S. Transport"). M.S.S. Transport carried on a business of outsourced car detailing for hire car companies. This included, for this purpose, the provision of staff to collect hire vehicles. Mr. Matthew Barker was, and remains, the managing director of M.S.S. Transport. Mr. Taylor was the non-executive chairman of M.S.S. Group. He was also a director of other unrelated companies. 6 In 2017, Mr. Barker told Mr. Mace that M.S.S. Transport needed to acquire certain technology to enable it to develop that company's business. Mr. Barker was of the view that it would be more expensive and more difficult for M.S.S. Transport to develop that technology itself from inception. Mr. Barker told Mr. Mace that Mr. Flageul, who he had met earlier, had developed technology that might suit the needs of M.S.S. Transport. In May 2017, Messrs. Mace and Barker met with Mr. Flageul. He gave them a presentation in which he demonstrated how the WeDrive app worked. Mr. Flageul told Messrs. Mace and Barker that his business was breaking even and that he needed assistance to expand it. Mr. Mace decided to investigate the WeDrive business with a view to investing in it. 7 What followed was a period of due diligence. This due diligence was conducted largely by Mr. Taylor. Amongst other things, Mr. Flageul answered a due diligence questionnaire. Questions were asked about ownership of the core assets of his business. At the time, Mr. Flageul failed to disclose that WeDrive Australia did not own all of the intellectual property required for the app. He conceded before me that this had been a "mistake." 8 In August 2017, when WeDrive was incorporated, WeDrive Australia assigned its intellectual property rights to this company. Mr. Flageul (as trustee of the We Drive Melbourne Trust) was issued 20% of WeDrive's shares. Mr. Taylor's company was issued 19% of WeDrive's shares. Mr. Mace's company was issued 51% of WeDrive's shares in consideration of the payment of $400,000 by his company to WeDrive. That payment was subsequently made in two tranches of $200,000. 9 Thereafter, work commenced on the further development of the app. The cost of doing this was much more expensive than anticipated. Mr. Flageul contends that from August to December 2017 he made a series of complaints or inquiries to, amongst others, Messrs. Mace and Taylor. He alleges that each of these constituted the exercise of a workplace right. Eventually, Mr. Flageul was dismissed. He contends that he was dismissed because of the complaints and/or inquiries he made. 10 He also contends that he was mentally unwell at the time of his dismissal. Notwithstanding this, he claims that he was coerced into selling his shares in WeDrive for $1 to M.S.S. Group and into resigning as a director of WeDrive. He submitted that his dismissal, the sale of his shares and his resignation as a director was the product of oppressive conduct by Messrs. Mace and Taylor. He also submits that Messrs. Mace and Taylor took unconscionable advantage of, amongst other things, his allegedly poor mental state. 11 The respondents disagree. They submit that the reason for Mr. Flageul's dismissal was principally his failure to disclose WeDrive's lack of ownership of the intellectual property associated with the app. Until resolved, this left WeDrive without the legal ability to exploit its technology fully. Whilst that issue was subsequently cured, Messrs. Mace and Taylor felt that they could no longer trust Mr. Flageul. They considered that they had been misled. The business was also costing more than expected, and was generating much less revenue than anticipated. In December 2017, the WeDrive business was in losses. It was expected to be insolvent by January 2018. Mr. Mace had effectively lost all of the money he had invested. Both he and Mr. Taylor also sold their shares to the M.S.S. Group for $1. They had offered to sell those shares to Mr. Flageul for that price. He declined that offer. Messrs. Taylor and Mace also resigned as directors of WeDrive. 12 Finally, Mr. Flageul contends that he was subsequently engaged as an independent contractor to perform the same or substantially the same work he had previously undertaken as a C.E.O. over January 2018. The respondents deny this. They contend that Mr. Flageul had never been offered any ongoing employment following his termination in December 2017.

Applicable Legislation 13 Mr. Flageul's claims under the F.W. Act are governed by the general protections provisions in Pt. 3-1. Section 340 of the F.W. Act relevantly provides: Protection (1) A person must not take adverse action against another person: (a) because the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or (b) to prevent the exercise of a workplace right by the other person. 14 Section 341(1) defines the term "workplace right" as follows: Meaning of workplace right Meaning of workplace right A person has a workplace right if the person: (a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or (b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or (c) is able to make a complaint or inquiry: (i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or (ii) if the person is an employee - in relation to his or her employment. 15 Section 342 defines the term "adverse action." It relevantly includes the dismissal of an employee by her or his employer. 16 Relevant to the alleged breach of s. 340 is s. 360, which addresses situations where there are multiple reasons for taking action. It provides: Multiple reasons for action For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason. 17 Also relevant to the alleged breach of s. 340 is s. 361(1), which prescribes a presumption that relevantly adjusts the onus of proof. It is in these terms: Reason for action to be presumed unless proved otherwise (1) If: (a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and (b) taking that action for that reason or with that intent would constitute a contravention of this Part; it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise. 18 Section 358 relevantly provides: Dismissing to engage as independent contractor An employer must not dismiss, or threaten to dismiss, an individual who: (a) is an employee of the employer; and (b) performs particular work for the employer; in order to engage the individual as an independent contractor to perform the same, or substantially the same, work under a contract for services. 19 Section 570 is part of a miscellaneous set of provisions and deals with costs. It relevantly provides: Costs only if proceedings instituted vexatiously etc. (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A. (2) The party may be ordered to pay the costs only if: (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or (c) the court is satisfied of both of the following: (i) the party unreasonably refused to participate in a matter before the FWC; (ii) the matter arose from the same facts as the proceedings. 20 As to the claims about oppression, s. 232 of the Corporations Act relevantly provides: Grounds for Court order The Court may make an order under section 233 if: (a) the conduct of a company's affairs; or (b) an actual or proposed act or omission by or on behalf of a company; or (c) a resolution, or a proposed resolution, of members or a class of members of a company; is either: (d) contrary to the interests of the members as a whole; or (e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity. For the purposes of this Part, a person to whom a share in the company has been transmitted by will or by operation of law is taken to be a member of the company. 21 Section 233(1) provides: Orders the Court can make (1) The Court can make any order under this section that it considers appropriate in relation to the company, including an order: (a) that the company be wound up; (b) that the company's existing constitution be modified or repealed; (c) regulating the conduct of the company's affairs in the future; (d) for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law; (e) for the purchase of shares with an appropriate reduction of the company's share capital; (f) for the company to institute, prosecute, defend or discontinue specified proceedings; (g) authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company; (h) appointing a receiver or a receiver and manager of any or all of the company's property; (i) restraining a person from engaging in specified conduct or from doing a specified act; (j) requiring a person to do a specified act. 22 As to the claims about unconscionable conduct, s. 20(1) of the A.C.L. relevantly provides: Unconscionable conduct within the meaning of the unwritten law (1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time.

The Witnesses 23 Much of the case turns upon the Court making findings of fact about what was, or was not, said at various meetings and during various telephone conversations. Mr. Flageul's evidence about what was said was relevantly contradicted, in whole or in part, by all of the other witnesses called to give evidence (save for Mr. Flageul's partner). The Court was thus required to decide whose evidence, about what was said and what was done, should be preferred. In that respect, I have principally relied upon the contemporaneous evidence before me, at least as a starting point, in fact finding. Where appropriate I have drawn inferences from the contemporaneous documents if such inferences accord "with the probabilities of ordinary human experience": Republic of Nauru v. WET040 (No 2) [2018] HCA 60; (2018) 93 A.L.J.R. 102 at 109 [35]; see also Sanders v. Glev Franchises Pty Ltd [2002] FCA 1332 at [53]. 24 Mr. Flageul gave evidence-in-chief by affirming five affidavits. His life partner, Ms. Joanne O'Donovan, who was also employed at WeDrive, affirmed two affidavits. Mr. Mace swore two affidavits. Mr. Taylor swore one affidavit, as did Mr. Russell. Mr. Barker swore two affidavits. All of these affidavits, together with their accompanying exhibits, were admitted into evidence. Both sides had intended to make a series of objections to the admissibility of parts of these affidavits. But in the circumstances (which included the holding of a virtual hearing), it was thought more efficient to have the Court receive all of this evidence, leaving the parties to make submissions about weight, which they did. No party objected to this course of action. 25 I was not entirely impressed with the evidence given by Mr. Flageul. He had a great interest in the outcome of this case, and so I have treated his evidence with considerable caution. My general impression of him is that he at times exaggerated his evidence. That is not to say that he was dishonest; I think he tried to give his evidence truthfully. But he seemed overeager to explain his story, which when combined with a degree of exuberance, led him to embellish his account of what occurred. At times he introduced new parts of his story which had not appeared in the very many affidavits he had affirmed and which had been read into evidence. He often became argumentative. He was sometimes evasive. The language used in his affidavits did not help. His recollection of key events, in which he alleged he had exercised a workplace right, was often expressed in highly conclusionary language. For example, the following appears in his first affidavit: On 29 September 2017 and 5 October 2017, I verbally complained and/or enquired with Gregg Taylor, the Third Respondent as to the payments made by the First Respondent to Dave Nicholson that in the absence of a consultancy agreement between the First Respondent and Dave Nicholson (associate of the Second Respondent and Third Respondent), or being held liable to any Key Performance Indicators, that I be provided by reasons [sic] as to any payment made by the First Respondent to Dave Nicholson or other alleged contractors. … On 10 November 2017, I verbally complained and/or enquired to Steven Mace, the Second Respondent as to the payments made by the First Respondent to Dave Nicholson on the basis that any payment to Dave Nicholson was unreasonable as there was no consultancy agreement between the First Respondent and Dave Nicholson. … On 24 November 2017, I emailed Christopher Russell, the Third Respondent, Gregg Taylor and Matthew Barker and complained and/or enquired about when the marketing campaign would commence for the First Respondent, since Dave Nicholson and the Third Respondent did not initiate or organise any marketing campaign in Sydney, which was within the responsibility of the Third Respondent and Dave Nicholson. (My emphasis.) All of the alleged exercises of workplace rights were described in this way in Mr. Flageul's first affidavit. Expressed in such conclusionary terms, it is difficult to give extensive weight to this type of evidence. That is especially because, on many occasions, it was never effectively corroborated. 26 Another difficulty I had with Mr. Flageul's evidence is that he sometimes added to his account of what had occurred with each successive affidavit. In the first, he appeared to give a comprehensive account of his version of what had occurred. The second contained some corrections to the first. But in the third, fourth and fifth affidavits, sometimes perhaps as an understandable reaction to the evidence filed and served on behalf of the respondents, he introduced new details with no real explanation as to why those details had not appeared in his first affidavit. Unless otherwise corroborated, it was hard to give a great deal of weight to these additions, which were sometimes no more than a denial of the truth of the evidence contained in the respondents' affidavits. Mr. Flageul added further details in the virtual witness box. For example, he claimed for the first time to have received an offer from, and to have reached agreement with, Mr. Mace to become an independent contractor on 23 January 2018. In finding facts, I have accordingly focused upon Mr. Flageul's first affidavit, and the transcript of his cross-examination, unless what had been affirmed in the further affidavits was material in some way. 27 I have also treated the evidence of Ms. O'Donovan with similar caution. It was led in an attempt to corroborate Mr. Flageul's evidence about the exercise by him of workplace rights. Because Ms. O'Donovan was and is Mr. Flageul's life partner, she shares a similar interest in the outcome of this matter. But there were other difficulties with her evidence. For example, she gave hearsay evidence of conversations she overheard whilst Mr. Flageul was on the telephone with, for example, Messrs. Mace or Taylor. She tried to corroborate Mr. Flageul's recollection of the day he was terminated by giving hearsay evidence of Mr. Flageul ringing her to give his account of what occurred. I have decided that none of this evidence can be given any real weight. That was so for a number of reasons. First, the language used in her affidavits was often conclusionary in nature, argumentative and speculative. As an example of this, the following appeared in her second affidavit: I refer to paragraphs 50 and 51 of the affidavit of Steven Mace and say that it is strange to me that Steven Mace first tried to use the WeDrive Mobile Application on 11 September 2017, after he invested in WeDrive business. [sic] 28 What Ms. O'Donovan thought was "strange" is not evidence. Secondly, in her second affidavit, she added statements to describe an important conversation between Messrs. Flageul and Mace which did not appear in her first affidavit. No sufficient explanation was given for this discrepancy. In cross-examination, she said that her first affidavit had been prepared using notes she had made at the time of this conversation. These notes were never produced because they had not been kept. No adequate explanation was given about their loss. Thirdly, I also find that in cross-examination, Ms. O'Donovan tried too hard to align her testimony with that of Mr. Flageul, especially in relation to the issue concerning how automated the app was in the second half of 2017. Thus, for example, the following exchange took place: Yes. And it's correct, isn't it, then on that explanation that you would have expected them to think that this technology, provided you had drivers available, was capable of dispatching drivers automatically?---Yes. It was. Yes. Well, would it surprise you to hear, Ms O'Donovan, or change your mind - would it change your mind if you heard that Mr Flageul had a different view of what the technology could do?---Yes. 29 Later on, the following exchange took place: Mr Flageul accepted yesterday, in cross-examination, when I asked him if it provided for the automatic dispatching of drivers, and this is at page 50 of the transcript, line 15, your Honour. HIS HONOUR: Thank you. MR MEAGHER: I asked him the question: Well, do you say it could be done in September when Mr Mace complained to you. And Mr Flageul said: No. But do you now accept that it couldn't automatically dispatch drivers in September 2017?---Yes, if he answered that I will accept it. And isn't it the case then that whatever Yan says on this issue, you will accept as being correct?---Well, I wouldn't say whatever he says, but yes, I would - I would - I would defer to his greater knowledge of the technology than mine. And I suggest to you, Ms O'Donovan, that you've deferred to Mr Flageul's explanation of events more generally in respect of the matters in issue of this case; do you agree with that?---No. (My bolded emphasis; italicised emphasis in transcript.) 30 I adopted a similar level of caution when assessing the credit of Messrs. Mace and Taylor. As respondents they also had a direct interest in the outcome of the case. However, my impression of them both is that they were less committed to winning the case than Mr. Flageul and Ms. O'Donovan. Generally speaking, they gave evidence that was less argumentative. They did not seem to embellish or exaggerate matters as much as Mr. Flageul. If anything, they both appeared to be "sick of" dealing with Mr. Flageul and just wanted to be rid of him. The clear impression I had of Mr. Mace is that he felt betrayed by Mr. Flageul and blamed him for losing the money he had invested in WeDrive. The equally clear impression I have of Mr. Taylor is that he struggled to deal with Mr. Flageul. 31 Neither Mr. Barker nor Mr. Russell had any direct interest in the outcome of this matter. However, both were and remain business associates of Mr. Mace. I therefore applied some measure of caution in assessing their respective creditworthiness. Having said that, they both impressed me as witnesses and I formed the view that they gave accurate answers in cross-examination to the extent of their recollection of events. Mr. Barker had never thought that the WeDrive business would ever work. He only became involved with WeDrive as a "favour" to Mr. Mace. Mr. Russell also did not think much of the WeDrive app. He also only became involved towards the end of 2017 to see whether the WeDrive business could in some way be saved. He hoped that he would never see or hear of Mr. Flageul ever again. 32 Mr. Flageul filed with the Court a table setting out the weight he contended I should give to certain parts of the affidavits filed by the respondents. In what follows, I have given this table due consideration. 33 Both sides called witnesses to give expert evidence concerning Mr. Flageul's mental state in 2017. Mr. Flageul relied upon a report of Mr. David Horne (I note that he is a Doctor of Philosophy), a clinical psychologist, whilst the respondents relied upon a report of Professor Peter Doherty, a psychiatrist. Each was cross-examined. For reasons which are set out below, I found neither report to be probative of Mr. Flageul's mental state in 2017. However, both experts properly discharged their duty to the Court and gave their evidence in an entirely honest and professional way. The Court is grateful to them for what assistance they could give.

Agreed Statement of Facts 34 The parties agreed on certain facts. They documented that agreement as follows (I have removed applicable headings): 1. On 8 December 2014, WeDrive Australia Pty Ltd (ACN 603 262 675) ("WeDrive Australia") was incorporated for the purpose of conducting the "WeDrive" business ("Business"). 2. The Applicant ("Flageul") was: (a) a director of WeDrive Australia from 8 to 24 December 2014, and from 10 March 2015 to 22 February 2018; and (b) a shareholder in WeDrive Australia at various times. 3. On or about 16 May 2017, a meeting occurred between Flageul, Matthew Barker (a director of MSS Transport Services Pty Ltd (ACN 611 381 607) ("MSST")) and the Second Respondent ("Mace") (Executive Chairman and a director of Multi Services Solutions Group Pty Ltd (ACN 602 539 873)) at which Flageul gave a presentation about the Business to Barker and Mace. 4. On 25 August 2017, the First Respondent ("WeDrive") was incorporated, for the purpose of purchasing WeDrive Australia's assets (including the Application) and its business (as those terms are defined in the document referred to in subparagraph 5(a) below). 5. On 31 August 2017, WeDrive acquired WeDrive Australia's business and assets (as those terms are defined in the document referred to in subparagraph 5(a) below). A suite of documents was executed giving effect to that transaction, including: (a) a "Business and Asset Purchase Agreement "; (b) a "Subscription and Shareholders' Deed "; and (c) an "Executive Services Agreement" in regard to Flageul. 6. As at 1 September 2017, WeDrive's: (a) shareholders were: (i) Mace Group Pty Ltd, ACN 103 666 235 as trustee of the WeDrive Management Trust: 100 shares (10 per cent); ("Mace Group") (ii) R E Taylor Pty Ltd, ACN 614 465 717 as trustee of the TF Trust: 190 shares (19 per cent); ("R E Taylor") (iii) Flageul as trustee of the WeDrive Melbourne Trust: 200 shares (20 per cent); (iv) Mace Group as trustee of the Mace Family Trust: 510 shares (51 per cent); (b) directors were: (i) Flageul; (ii) Mace; and (iii) Taylor. 7. Mace Group was, at all times material to this proceeding, controlled by Mace. 8. R E Taylor was, at all times material to this proceeding, controlled by Taylor. 9. Flageul was employed by WeDrive from around 1 September 2017 to around 22 January 2018, on a full-time basis: (a) in the role of "Chief Executive Officer "; and (b) with a remuneration of $150,000.00 per annum, inclusive of superannuation. 10. On 10 November 2017, there was a board meeting of WeDrive at which a proposal for a merger between WeDrive and MSST was presented, with a PowerPoint presentation entitled "MSST_WeDrive Merger Discussion" ("Merger Proposal"), and the board of WeDrive unanimously voted in favour of the merger. 11. On 21 December 2017, Flageul was dismissed as an employee of WeDrive with effect from 22 January 2018. 12. On 22 December 2017, Flageul signed a document entitled, "Heads of Agreement: Sale of entire issued capital in WeDrive Pty Ltd." 13. On 3 January 2018, Flageul ceased being a director of WeDrive. 14. On or about 22 January 2018, Flageul ceased employment with WeDrive. (Footnotes omitted.) The Court is grateful to the parties for their co-operation.

Due Diligence 35 Mr. Barker gave evidence that he wanted to streamline the M.S.S. Transport business with an app that would enable rental car clients to be able to request movements of rental vehicles electronically. He raised this idea with Mr. Mace. He suggested that Mr. Barker should conduct some research and report back to him. That research led Mr. Barker to discover a business then conducted by Mr. Flageul through WeDrive Australia. That business appeared to Mr. Barker to offer a chauffeur "you drink, we drive" style service. He emailed WeDrive Australia. Mr. Flageul then rang Mr. Barker. 36 There was some dispute before me about the initial objectives of the M.S.S. Group. Mr. Flageul recalled that Mr. Mace wanted to invest in his business and that this was not confined to the use of his app. In cross-examination, however, Mr. Flageul accepted that the focus of the M.S.S. Group was on acquiring an ability to use the app to improve the business of M.S.S. Transport. As Mr. Barker said in his first affidavit: I explained the MSS Transport business to Mr Flageul, and identified some potential synergies with WeDrive Australia such as using its technology to assist MSS Transport to automate the allocation of drivers and minimise manual labour. 37 Mr. Barker's memory is supported by the contemporaneous documents. In, for example, an email sent by Mr. Flageul to Mr. Barker on 30 May 2017, Mr. Flageul said that WeDrive Australia's "strategic objectives" included: To develop a technology to enhance WeDrive and MSS Transport productivity. To roll the technology out to all other MSS subsidiaries and consider white-labelling external licensing. 38 I find that Mr. Mace, and the M.S.S. Group, were interested in using the intellectual property developed by Mr. Flageul to enhance the businesses of that group, and in particular, the business of M.S.S. Transport. That intellectual property primarily constituted the WeDrive app. As at May 2017, neither WeDrive Australia nor Mr. Flageul owned all of that intellectual property. Nor was the app at that stage fully functional. It was not, for example, yet fully automatic. In an email sent by Mr. Barker to Messrs. Taylor and Mace in early June 2017, Mr. Barker outlined some of the features of the app which he thought it needed to achieve. He wrote as follows: The app would need to be able automatically add CPI to the rate annually with a Y/N indicator in the back end dependent on the agreement The app would need to be able to create jobs for either single movements or upload mass movements of cars. The app would need to be able to have different approval levels depending on the needs of the client. This is especially important as different clients will have very different needs here. For example at AVIS a fleet controller has high discretionary spend whereas at Hertz location management cannot even approve the purchase of a stapler without the need for escalation and approval. It would need to send push notifications to the agreed sign off person in real time for approval before we move the vehicle. We would need a pre-approved signal so we can get ready but not get the notification to execute until the final client approver has hit go. We would then need to decide if the alert goes to the subby or we coordinate manually. Initially I suspect the latter for a few weeks but we would need the capability for the "order" to go straight through to the driver with the subby boss getting a notification. I would not want them to be able to refuse the Job if it has been approved by us and I would want us to have the control. 39 The degree to which the app was automated by the time WeDrive had acquired it was the subject of considerable dispute. In an email sent by Mr. Flageul to Mr. Mace on 31 May 2017, he said that he needed $150,000 for the development of the "system" as it then was, but that this was only a "bulkpart [sic] figure". Importantly for Mr. Flageul's case, the email set out the development that needed to occur. This included the following: - Stage 1 will cater for the needs of WeDrive and MSS transport (relocating, geo-locating/tracking, semiautomated** scheduling and dispatching) … **Semi-automated means all dispatch processes will be automated as much as possible with the ability given to operators to manually dispatch and or overwrite automation when if required. 40 There was some conflict and ambiguity concerning the evidence given by Mr. Flageul and Ms. O'Donovan about this issue. Mr. Flageul said that the app was only automatic when drivers were available, but not when they were not; in that case a manual system of ringing for a driver needed to take place. It is not clear to me whether this aspect of the app was ever fixed or whether the app was always going to be dependent upon a pool of drivers being available. In contrast Ms. O'Donovan said, as between WeDrive and a customer, the app was automated (assuming there were available drivers), or became automated at some point later in 2017, but another app, used by the co-driver (i.e. the driver that would collect the driver used by the customer) was not yet automated. Compounding the issue was Ms. O'Donovan's deference to the views of Mr. Flageul which I have described above. 41 In contrast, Messrs. Mace and Taylor were firmly of the view that Mr. Flageul had told them that the app was fully automated. Mr. Mace recalls being shown by Mr. Flageul in May 2017 how the app worked and it appeared to him to work perfectly well and automatically. He subsequently tested it himself, with mixed results (see below). Mr. Barker had tested the app in May 2017 and it did not work then (see below). In my view, I find that the app was not fully automated in May and June 2017, and remained in that state throughout 2017. I further find that Messrs. Mace and Taylor nonetheless believed that the app was fully automated before making their investment in WeDrive. Whether that was because they were misled by Mr. Flageul, or had misunderstood what he had said (for example in the email set out above), I need not decide. Neither, in that respect, had any expertise in the field of information technology. 42 On 16 May 2017 WeDrive Australia entered into a contract with Contact Point IT Services Pty Ltd ("Contact Point", sometimes referred to in contemporaneous documents as "Contactpoint") for the maintenance and enhancement of the app. It was Mr. Flageul's uncontradicted evidence that Contact Point enhanced the app using a combination of pre-existing codes created by developers who had worked for WeDrive Australia, as well as codes created by Contact Point. Critically, the terms of this contract provided for Contact Point to retain ownership of the intellectual property developed by it in association with the app. Clauses 33 and 34 thus provided: WeDrive hereby acknowledges that Contactpoint retains full ownership of the Intellectual Property in any UI/UX design and programming developed in association with the App. Upon go live of changes to the App and payment in full for the services provided as part of each project, Contactpoint shall assign a perpetual and transferable license to use within the App such Intellectual Property to WeDrive. This license will allow WeDrive or their agents to make changes to any aspect of the App, except for the purpose of creating derivative works based on the code. This licence does not allow the distribution of the code to any other party or publishing of the code into a public domain. 43 These clauses fettered WeDrive Australia's ownership of the intellectual property needed to exploit and develop the app fully. They lie at the heart of this dispute. That is because Mr. Flageul never disclosed their existence to Mr. Mace and the M.S.S. Group until December 2017. Indeed, he never disclosed the existence of this contract at all during the M.S.S. Group's due diligence of WeDrive Australia which took place in June 2017. He nonetheless conceded in cross-examination that he knew by August 2017 that Messrs. Mace and Taylor, as potential investors, were "particularly concerned" that WeDrive Australia was the owner of all of the relevant intellectual property to be assigned to WeDrive. 44 On 29 May 2017, Mr. Mace met with Mr. Flageul, Ms. O'Donovan and others. In the course of that meeting, Mr. Mace gave evidence that the following took place: (a) Mr Flageul provided a copy of WeDrive Australia's financials which I recall demonstrated initial monthly losses of about $22,000, gradually improving to losses of about $1,000 per month, as at May 2017; (b) I recall asking Mr Flageul what had transpired to significantly reduce WeDrive's losses. He said WeDrive Australia now had more clients on the back of corporate offerings and was better at controlling its costs. He said in the worst case, an injection of $8,000 per month would cover all losses and the wages for himself and Ms [O'Donovan]. (c) Mr Taylor suggested it appeared from what Mr Flageul had told us about WeDrive Australia's current trading performance and new strategy in relation to acquiring corporate clients, an investment of $300,000 would allow the business to continue to grow for about 12 months, until it was self-sustainable; (d) Mr Flageul said that WeDrive Australia had about $30,000 of outstanding invoices to clear for corporate development expenses. It was then discussed between us that an investment of $400,000 would cover the business until WeDrive Australia could become profitable, based on a 12 month projection; (e) I said we would be interested in acquiring the trading assets of WeDrive Australia, rather than the corporate entity, and that we would set up a new corporation for that purpose; (f) We agreed that the ownership structure of the new entity would be 75% MSS Transport and 25% Mr Flageul, and discussed the roles that Mr Flageul, Mr Taylor, Mr Barker and I would take: i. As Mr Flageul had built the business, it was agreed that he would have the title of CEO. His role and responsibilities were agreed to be focussing on expanding the business and developing the technology to suit corporate clients, and modifying it for use by MSS Transport. Mr Flageul would also be appointed as a director; ii. Mr Barker or Mr Taylor would be appointed as a director and tasked with mentoring Mr Flageul, controlling financial management and assisting with marketing. In addition, Mr Barker would have operational responsibility for liaising with Mr Flageul to supply labour from MSS Transport for [sic]; and iii. I would observe the Board of Directors, so I could keep an eye on the progress of the business. 45 Mr. Flageul denied most of the foregoing. Neither he nor Mr. Mace were materially cross-examined about their divergent recollections. Mr. Taylor corroborated Mr. Mace's testimony, but only to an extent. I otherwise accept that Mr. Mace's recollection as set out above, is what he "took away" from his meeting. In particular, I accept that Mr. Mace believed that the business had only about $30,000 of outstanding invoices to pay. Whether that recollection was mistaken, as Mr. Flageul asserted, I need not decide. I further accept Mr. Mace's understanding of WeDrive Australia's financials as representative of his appreciation of the state of the WeDrive business. It formed the basis for Mr. Mace's ultimate investment of $400,000. In that respect, it was a strong theme in Mr. Mace's evidence that the business ended up needing far more financial assistance than that outlined by Mr. Flageul at this meeting. In particular, he discovered that the business needed far more than $8,000 per month to make good its ongoing losses. Thus in cross-examination, Mr. Mace said: Were you concerned that the expenses were too high at the end of September 2017 of WeDrive Proprietary Limited?---I was concerned - from referring it back to the Sydney - original Sydney meeting when $8000 a month would have covered - they had gone from losing 22,000 a month - got it back to close to a thousand give or take towards break even. And a thousand - $8000 a month was going to cover the ongoing trading, and we were incurring significant financial results and expenses. Yes. I was concerned about. 46 The M.S.S. Group due diligence was undertaken largely by Mr. Taylor. It culminated in the completion by Mr. Flageul of a due diligence questionnaire in which he gave the following answers to the following questions (the reference to the "Company" is to WeDrive Australia): 6. Does the Company have clear title to its core assets? Have any claims been made against core assets? Are there any encumbrances against core assets? a. NO … 16. Are there any other matters that Mace should be aware of in relation to the Offer? a. NO 47 These answers were wrong or at least not accurate. WeDrive Australia did not have "clear title" to its core assets, and Mr. Mace should have been told about the contract with Contact Point. Nonetheless, in one of his affidavits, Mr. Flageul sought to brush aside the significance of his answers. He said that there was nothing in the contract "of any concern" to him and that at the time of due diligence he was "primarily concerned with the handover process." He repeatedly said that neither Mr. Mace nor Mr. Taylor had ever asked for a copy of the Contact Point contract (unsurprisingly, in my view, because they were unaware of it) and that its existence would not have mattered but for M.S.S. Transport's attempt to "improperly" acquire the intellectual property in December 2017. These explanations are illustrative of the argumentative nature of some of Mr. Flageul's evidence-in-chief. In any event, in cross-examination, Mr. Flageul accepted that he had made a "mistake". Whilst he claimed that it had never occurred to him at the time to tell the M.S.S. Group parties about the contract with Contact Point, he now candidly acknowledged that this was "madness". Thus in cross-examination he said: And did it not strike you, Mr Flageul, that you needed to check and disclose any other parties' interest in the code that is part of the application prior to agreeing to this agreement?---Okay. So if we were talking about now and I'm a different businessperson now, I would say that it was madness that I did not think about it at the time, but I'm a different person now. At the time, I was a small business owner. And what I'm pointing here is section 25. The seller has not intentionally withheld or concealed. And the answer is yeah, I agree with you that I should have, but I didn't. But by no means was that intentional. It just did not strike. I will bring you to a matter. You can interrupt me if you think it's irrelevant. But I remember, on 21 December, Mr Mace questioned me on that, and he said, "Did you actually commit a lawyer to read over that agreement that you signed with Contact point?" And I said, "No" And I remember him shaking his head, probably thinking, "What an idiot", and I would have agreed with that, because I should have. That probably would have saved me a lot of that trouble. He ultimately accepted that "in retrospective [sic] and hindsight", he should have disclosed the Contact Point contract to the M.S.S. Group as part of the due diligence process. 48 I observe that in cross-examination, Mr. Taylor said that he had, at the time, asked Mr. Flageul about his answer to the first question in the questionnaire set out above. In response, Mr. Flageul did not disclose the existence of the Contact Point contract, but rather, the existence of a dispute concerning the ownership of some other intellectual property referable to the app. Steps were taken to resolve that dispute before WeDrive was set up by having certain third parties assign the necessary intellectual property to WeDrive Australia. 49 I find Mr. Flageul's general attitude to the issue of the ownership of WeDrive Australia's intellectual property to have been cavalier. When he was cross-examined about the Contact Point contract the following exchange took place which is illustrative of this finding: So you did think about the IP, but you didn't stop to think about who actually owned all the different parts of the IP?---I thought - I thought I owned the IP. I thought I owned the IP, and I would still maintain that I owned the vast majority, apart from maybe a couple of traits, of course. But the vast majority of the IP was still owned. And I never - yeah, I agree. I probably didn't read carefully every single paragraph, but in my mind, I owned the IP. 50 On 14 August 2017, WeDrive Australia and a company which appeared to be owned by Mr. Mace (called Investment Vehicle Pty Ltd) entered into a "Memorandum of Understanding." An earlier version of this had been distributed by Mr. Mace on 31 May 2017. It included the following breakdown as to how Mr. Mace's $400,000 was to be used by WeDrive: Mace will contribute the following for 75% in WeDrive: 1. $250,000 for working capital to be deposited in 12 month instalments; and 2. $150,000 for a capital works to the ITC of the business. The funds to be approved by the Board prior to commitment and available as required over the next 12 months; and 3. Services Agreement between WeDrive to MSS Transport Pty Ltd for drivers (); and 4. Access to Mace corporate network for retail and corporate clients. () To be negotiated direct with MSS Transport Pty Ltd but a contract allowing MSS Transport Pty Ltd first right of refusal to supply labour as per agreed terms and conditions. 51 The executed Memorandum of Understanding, dated 14 August 2017, did not include the foregoing clause. It anticipated the incorporation of a new entity which would acquire 80% of the shares in WeDrive Australia and for "Mace" to contribute $400,000 as working capital. It also provided for the appointment of Mr. Flageul as the "CEO", with an annual salary of $150,000. Before me, Mr. Flageul asserted that part of the "deal" included Mr. Taylor bringing in $400,000 of revenue. But this was not a term of the Memorandum of Understanding. It was not a term of any agreement. It was not referred to in any contemporaneous records, contrary to what Mr. Flageul had said in his third affidavit (the one email cited by Mr. Flageul did not refer to this alleged promise). And Mr. Taylor denied that he had given such a promise. In these circumstances, I am not persuaded that it was ever made. 52 The Memorandum of Understanding listed the strategic priorities of the parties as follows: It is agreed the Strategic Priorities of WeDrive is essential to the short success of the business. It is equally important to the Investment criteria for Mace. The following priority has been agreed by the Parties; 1. WeDrive current strategy and growth to profitability - Focus on retail client growth in Sydney and Melbourne - Focus on corporate client and venue growth in these markets - Trading performance to trade profitability in its own right which is estimated at~~100 jobs/day (currently~~7jobs/day) 2. Technology to support the above strategy in a reliable and professional manner. 53 The Memorandum of Understanding records that the value of WeDrive had been "set" at $1,600,000 for "the purpose of this Investment opportunity." 54 Consistently with a focus on ownership of the necessary intellectual property, and given the pre-existing dispute over part of that property, in late August 2017 Mr. Flageul executed two "IP Assignment Agreements." The first was entered into by WeDrive Australia (as trustee of the We Drive Melbourne Trust) and certain third parties who retained intellectual property associated with the app. It provided for the assignment of that intellectual property to WeDrive Australia in consideration of the payment of $1 to each assignor. The second was entered into by WeDrive Australia and Mr. Flageul and it provided for the assignment to WeDrive Australia (as trustee of the We Drive Melbourne Trust) of any intellectual property owned by Mr. Flageul as a result of his employment (or other relationship) with that company.

The Agreements 55 Ultimately, the business structure foreshadowed in the executed Memorandum of Understanding was not adopted by the parties. Instead, WeDrive was incorporated and shares were issued by it to Mr. Flageul (as trustee of the We Drive Melbourne Trust) and to companies associated with Messrs. Mace and Taylor in the proportions set out above. Again, it was critical for this new entity to acquire from WeDrive Australia all of the assets, including intellectual property, associated with development of the app. A "Business and Asset Purchase Agreement" was entered into by WeDrive and WeDrive Australia (as trustee of the We Drive Melbourne Trust) which provided for the sale by WeDrive Australia of its "Business" and "Sale Assets" to WeDrive in consideration for the issue of 200 shares in the capital of WeDrive to WeDrive Australia or its nominee. I infer that WeDrive Australia nominated Mr. Flageul in his capacity as trustee. The term "Sale Assets" was defined to mean "all of the assets used in the conduct of the Business being the assets set out in Schedule 1." The assets listed included the "Business IP". This term was defined in the following way: Business IP means the intellectual property owned and used by the Seller in the conduct of the Business, including the Domain Name, the App, the Code and the social media accounts used in the Business. (My emphasis.) 56 The "Business IP" thus included all of the intellectual property used by WeDrive Australia in carrying on its business, whether owned by WeDrive Australia or not. 57 The term "Business" was defined as the business "known as "WeDrive" undertaken by" WeDrive Australia. The term "App" was defined as being the "WeDrive ride sharing application owned by" WeDrive Australia. That company also gave a series of warranties relating to the intellectual property being sold. They were as follows: 9 The Seller has an enforceable right to use the Business IP, and it has not entered into any contract, arrangement or understanding to dispose of such right of use, other than in implementing the transactions contemplated by this document. 10 The use by the Seller of the Business IP, and the conduct of the Business by the Seller does not breach or infringe any Intellectual Property Right of any other person in any way which may give rise to a claim against the Buyer. 11 No person is Infringing or has infringed any Business IP. 12 No person other than the Seller has any right to use the Business IP and there has been no unauthorised use by any person of the Business IP. 13 Nothing has been omitted to be done by the Seller and as far as the Seller is aware no other circumstances exists that may affect the validity or ownership of the Business IP. 14 Each contractor engaged by the Seller for the purpose of undertaking any activity that has given rise to or may give rise to the creation of Intellectual Property Rights used In connection with the Business has executed an assignment of that Intellectual Property Right to the Seller. 58 Because of the terms of its contract with Contact Point, it appears that WeDrive Australia did not sell all of the intellectual property "used" by it in its business to WeDrive. That was probably a breach of the terms of sale, and probably also constituted a breach of the warranties set out above. However, neither Mr. Mace nor Mr. Taylor have sought to sue WeDrive Australia for these possible breaches and these issues were not the subject of any argument before me. 59 WeDrive, Mr. Flageul (as trustee of the We Drive Melbourne Trust) and entities associated with Messrs. Mace and Taylor also entered into a "Subscription and Shareholders' Deed." It contained terms concerning the composition of WeDrive's board, the proceeding of board meetings and shareholder meetings, and the possible future sale of shares in WeDrive. Certain identified matters required the approval of "Mace". These related to fundamental aspects of WeDrive's business, such as the approval of each budget and business plan, the alteration of the constitution of the company, the payment of dividends, and so on. Mr. Flageul in his written submissions relied upon the following clauses of this deed: (a) Clause 4.7 "Fees and expenses of Directors", which provides that the Company will pay certain costs of travel and insurance, and "such other director fees (if any) to each Director as agreed by the Board from time to time"; (b) Clause 6.2 "Authorised expenditure", which provides that the Company must not and must not allow any officer or employee to commit any resources of the company other than in accordance with an Approved Budget and Business Plan or the policies and procedures of the company determined by the Board; and (c) Clause 7.3 "Management Reports", which provides that the Company must provide to each director sufficient management and financial information and reports to allow them to monitor the efficient conduct of the business from time to time. 60 By cl. 2.1, Mr. Mace's company was obliged to subscribe for 510 shares in WeDrive by paying a total of $400,000. As noted further below, there was some dispute about whether this took place and whether some part of what was paid was subsequently re-characterised as a loan to WeDrive which was then written off. For the purposes of this proceeding, these issues do not matter. I readily accept that Mr. Mace invested substantial funds into WeDrive, probably in the aggregate of $400,000, and that, at least in an economic sense, he has lost these funds. He derived no profit from his investment. He was paid no dividends, and, as described below, he sold his 510 shares for less than $1. 61 Mr. Flageul also entered into an "Executive Services Agreement" with WeDrive. This was Mr. Flageul's employment contract. It appointed him to be the C.E.O. of WeDrive with an annual salary of $150,000. It provided for a six month period of probation. During this time, WeDrive was entitled to terminate Mr. Flageul's employment if it determined that he was "unsuitable for the role" "for any reason" upon one month's written notice. As it happens, Mr. Flageul's employment was terminated within this period. 62 This agreement prescribed Mr. Flageul's duties in cls. 8.1 and 8.2 as follows: General duties The Executive will: (a) devote the whole of the Executive's time, attention and skill during normal business hours, and at other times as reasonably necessary, to the duties of office in a proper and efficient manner; (b) diligently and faithfully perform the duties assigned to the Executive from time to time and comply with all lawful directions given to the Executive by the Company and any person duly authorised by the Company; (c) use best endeavours to promote and enhance the interests, welfare, Business, profitability, growth and reputation of the Company; (d) not intentionally do anything which is or may be harmful to the Company; (e) perform his/her duties and responsibilities in a proper and efficient manner; (f) conduct himself in accordance with the commercial and ethical standards commensurate with the Position; (g) promptly report to the Company or such person as the Company may from time to time determine, all information and explanations as it may require in connection with matters relating to the Employment or the Business; and (h) not act, or be seen to be acting, in conflict with the best interests of the Company. Specific duties The specific duties of the Executive are set out in Item 5 of the Schedule. Item 5 of the Schedule to this agreement said that Mr. Flageul's specific duties were to be "[a]s directed by the Board from time to time". 63 This agreement also imposed on Mr. Flageul both a general duty to report to the board and a more specific obligation to provide "full information" about the conduct of WeDrive's business, including "management reports, sales reports, [and] evaluation reports" and any other information reasonably required by the board. It also prescribed that Mr. Flageul might be required to act as a director of WeDrive. As it happens, this did take place. Finally, in addition to its rights applicable during Mr. Flageul's probationary period, WeDrive had a general right to terminate his employment with one month's written notice. 64 Mr. Flageul's life partner (Ms. O'Donovan) also entered into a contract of employment with WeDrive. She was appointed the "Operations and Corporate/Venues Account Management" officer with an annual salary of $100,000. 65 Certain other agreements were executed by the parties but it is unnecessary for me to describe them.

The Course of WeDrive's Business 66 Before turning to consider the particular complaints or inquiries Mr. Flageul claims he made whilst C.E.O. of WeDrive, I should give an account of what took place from the commencement of WeDrive's business in September 2017 until Mr. Flageul left in January 2018. 67 The parties did not agree upon Mr. Flageul's actual role and responsibilities at WeDrive. The respondents were of the view that whilst he had been appointed C.E.O., his real focus was on the commercial development of the app and on sales. Mr. Flageul disagreed. He was of the view, concordantly with the terms of his contract, that his role was much broader and that, as such, he was entitled to access at all times the financial records of the company. How else, he asked, was he to fulfil his reporting obligations? 68 There is a contemporaneous document which appears to support the position of the respondents. At the time of executing the agreements described above, 31 August 2017, Mr. Mace held a meeting with Mr. Flageul, Ms. O'Donovan, Mr. Taylor and another person to discuss the roles and responsibilities of WeDrive's executives and senior staff. Notes were made on a whiteboard and photographs of those notes were in evidence before me. One page bears the heading "How Do We Do It? Roles and Responsibilities." One role was labelled "Technology/App". The notes show that "Yan", which is Mr. Flageul's Christian name, was given this responsibility. Another role was labelled "Financials/Accounts". This responsibility was given to "GT", which I infer is a reference to Mr. Taylor. Another role is given both to Mr. Flageul and Ms. O'Donovan, namely "Administration/Rostering". Roles were also allocated to Mr. David Nicholson, who had been engaged by WeDrive to grow the Sydney market. That market included sales for New South Wales. Other aspects of this document are too faint to make out. In any event, Mr. Mace's evidence was that at this meeting it was decided that Mr. Flageul was to oversee (and expand) existing operations in Victoria, and to target new corporate business in both the states of Victoria and New South Wales, in addition to dealing with obtaining contractors for the WeDrive business. One of Mr. Flageul's key responsibilities, according to Mr. Mace, was to develop WeDrive's technology for application to new corporate clients. I have no reason to doubt Mr. Mace's recollection. It is corroborated by the C.E.O. report prepared by Mr. Flageul himself for WeDrive's first board meeting (described below). In it he described his roles as being "Business development - Innovation", "Technology - ICT", and "Sales - Venues - corporates Melbourne." In contrast, Mr. Taylor's role was described by Mr. Flageul as being "Finance - Corporate Governance." He was, in a sense, WeDrive's chief financial officer ("C.F.O.") and worked, it would appear, on a part-time basis. Mr. Flageul contended that because Mr. Taylor was not a full-time executive, it should be implied that Mr. Flageul had greater operational responsibility for WeDrive's business. I decline to make that implication. WeDrive's business was not large, and it was not shown that it needed a full-time C.F.O. 69 WeDrive had three directors. They were Mr. Flageul, and Messrs. Mace and Taylor. The impression I formed was that Mr. Mace, as a non-executive director, did not intend to perform any substantial executive work for WeDrive. He was content for the company to be run by Mr. Flageul and Mr. Taylor. 70 WeDrive commenced its business undertaking at the start of September 2017. Between that time and 21 December 2017, its earnings were unexpectedly low. Mr. Mace's money was poured into developing the app and in paying salaries and other fees. A snapshot of its financial position can be discerned from a profit and loss statement drawn up for the month ended 30 November 2017, which included details of WeDrive's financial performance in the preceding months. The statement showed that WeDrive incurred a net loss of $94,502 in the month of September, a net loss of $83,540 in the month of October, and a net loss of $120,687 in the month of November. The year to date aggregate net loss was $298,728 (which appears to reflect a rounding error of $1). Year to date income was $70,135 (which appeared to incorporate a refund of $70), including $29,880 of income for November. Mr. Russell recalled sales of $29,000 for November which was said to have been far less than a budgeted figure of $80,000. I find that the income was much lower than expected. I also note that WeDrive had year to date paid $45,045 in directors fees and $101,677 in "IT Expenses." 71 From inception, Mr. Mace's investment in WeDrive was not supported by his business partners. From May 2017, Mr. Barker was sceptical. He had tried to use the app to book a driver during that month. It did not work. Instead, someone called him to allocate a driver manually. He asked that driver whether the app usually worked to allocate drivers. He was told that everything was done manually. When he raised his experience with Mr. Flageul his concerns were brushed aside. He said he was told that only small technical improvements needed to be made. Mr. Barker warned Messrs. Mace and Taylor about his concerns. He did not want to be involved with WeDrive, but did agree to supply drivers from M.S.S. Transport if they were needed. Mr. Russell was also sceptical. He was concerned about the amount of money needed to develop the app in order to make it usable for M.S.S. Transport. 72 On 11 September 2017, Mr. Mace attempted to use the app as a test. When he went to log a job request, he persistently received a message stating that all of the drivers were busy and to call a phone number to make a booking. He then sent the following email to Messrs. Flageul and Nicholson, with a copy to Mr. Taylor: Hi Gents, Just tried to use the service and got this. What is this? Surely the drivers are available and the system auto logs the jobs? 73 Mr. Flageul replied by explaining that full automation for "ASAP bookings" would be implemented in "stage 2", with completion before mid-October. Mr. Mace responded with the following: I thought this was part of the system 'working' before settlement… 74 Later in September 2017, Mr. Mace tested the app again. This time it appeared to work. But Mr. Mace subsequently found out from Mr. Flageul that on that occasion, once again, some form of manual intervention had taken place to get a driver to him. Mr. Mace became significantly concerned. 75 By early October 2017, tensions between Messrs. Flageul and Taylor began to appear. A very heated telephone call took place between them on 2 October 2017 which I describe below. In particular, Mr. Flageul was of the view that the business was not doing as well in Sydney but that this was not his fault. On 4 October 2017, Mr. Taylor sent Mr. Flageul an email about this issue in which he referred to Mr. Flageul using the "wrong tone and in which he asked him to be "more professional and balanced." Mr. Taylor wrote: Your qualitative feedback is also the wrong tone speaking with an US versus THEM approach with Sydney and Melbourne. Yes a CEO monthly report is required though please try to make it more professional and balanced. 76 Mr. Flageul responded by saying that he was "disappointed" with the suggestion of a lack of professionalism. He wrote: I am disappointed to read your reference to lack of professionalism. It is simply a Sydney and Melbourne division that is essential to correlate with the performance based scheme you and Steve initiated and WeDrive's strategic plans. WE (as all of US) are yet to see any result from Sydney hence the obligation I have to highlight this with maximum clarity. 77 Mr. Taylor responded by observing that this was yet another disappointing email and that he did not want to get into a "slanging match." He wrote: Yan Another disappointing email. I STRONGLY suggest you stop sending these emails and we organise a discussion because you are only making things worse for yourself. I am not getting into a slanging match. Though your one sided comments below further highlights [sic] my point. There are many issues that need to be addressed and they are not only Sydney related. Enough These emails are illustrative of the growing tension between Messrs. Taylor and Flageul. 78 In October 2017, Mr. Taylor raised a possible investment in or partnership with a business known as Ugo Transfers. Mr. Mace asked Messrs. Barker and Russell to look into it. Within days, however, the focus turned to a possible merger between M.S.S. Transport and WeDrive. Mr. Mace said in cross-examination that drastic changes were by now needed because "the financial performance of the business had fallen off a cliff within one month of taking over." He listed some of his objectives in an email sent to Messrs. Taylor, Barker and Russell using Mr. Mace's M.S.S. Group email address. Mr. Flageul was not copied in on this email because Mr. Mace said that his thoughts were just possibilities that he wanted to raise first with the M.S.S. Group executives before consulting with Mr. Flageul. Those objectives included the following: 1. Ensuring MSS Group as a minimum retain their 75% benefits from MSST and now WeDrive (given they will be absorbing the running and the losses of WeDrive); and 2. The revised restructure includes hard, but necessary in my view, changes; and * [Ms. O'Donovan] replaced as sales resource in VIC; and * [Mr. Nicholson] replaced as sales resource in NSW; and * No requirement for WeDrive board of directors (& associated fees) 3. Existing MSST budgets will not be impacted negatively by any transaction The email then stated: I understand there are some blunt statements/changes but I think we all agree time is of the essence and we need to move forward with haste and in the best interest of the best interest of the business. [sic] 79 Subsequently, a slideshow outlining a proposal for a merger between WeDrive and M.S.S. Transport was prepared at the end of October 2017. Under a heading entitled "Proposed Operational Structure", one slide identified Mr. Flageul as the "Client Solutions Manager" of the merged business, with Mr. Barker identified as its managing director. In another slide the future directors of WeDrive, shown as a subsidiary of M.S.S. Transport, are listed; they do not include Mr. Flageul, although there appears to be provision for an additional director to be appointed. In cross-examination, Mr. Mace emphasised that the slides were prepared for the purposes of discussion only. He said at that time it was possible that, if the merger had proceeded to completion, Mr. Flageul might have been appointed as the additional director. 80 In another slide there appears two estimated valuations of WeDrive. The first, labelled "Post capital raising valuation", records that WeDrive was worth $1,600,000 (being the figure used in the Memorandum of Understanding). In another, labelled "Using Tech multiple", it was recorded that WeDrive was worth $1,338,000, based on a chosen multiple. At the bottom of the slide the following notation appears: NB: It should be noted that the business would need to prove to the market this is a technology led business as opposed to a services business… 81 Another slide sought to record the "Current EV", or enterprise value, of the shares held by, amongst others, Mr. Flageul in WeDrive. That value was recorded as being $320,000. The slide then lists a series of conditions or qualifications. One of these was as follows: Valuations are not warranted and should be reviewed in detail and satisfied by each individual. 82 Mr. Flageul sought to rely upon these estimated valuations as proof of the value of the WeDrive business and his stake in it. In cross-examination, Mr. Mace said that the figure of $1,600,000 did not reflect the actual value of WeDrive and that the figures generally came from Mr. Taylor. Mr. Mace said the figure of $1,600,000 had originally been deployed as a measure to divide up the proposed shares of each investor in the newly merged business. He said that the figures disclosed in the slide show were based upon a lot of "ifs." In cross-examination Mr. Taylor said the figure of $1,600,000, as used in the Memorandum of Understanding, was "derivative of what the required capital was and what the required percentage holding of the respective parties would be." Mr. Russell was also asked about these numbers. He said that the multiple used was "laughable and not really worthy of discussion." Mr. Barker did not regard the estimated values as being realistic "in any way, shape or form". He was unconvinced by them. That was because he did not think that the WeDrive product worked. In my view, the estimated values set out in the slides are not evidence of the actual value of WeDrive as at the end of October 2017 (or indeed as at the date of Mr. Flageul's dismissal). Rather, the disclosed values were no more than rough estimates deployed for the purposes of facilitating initial discussions for a possible merger between WeDrive and M.S.S. Transport, and no more. 83 On 10 November 2017, the board of WeDrive held its first meeting. The board unanimously approved the pursuit of a merger with M.S.S. Transport. Mr. Flageul's evidence was that from this point onwards the merger was definitely going to proceed. Whilst he accepted that there were certain formalities that would need to be observed to complete the merger, in his mind the concept of a merger was, to use his language, a "done deal." Messrs. Mace and Taylor did not agree with this evidence. They both were of the view that a merger with M.S.S. Transport was far from being a foregone conclusion. The minutes of the meeting of the board perhaps give the most accurate record of what the board agreed. They record the following: [Mr Mace] presented the Merger Proposal between WeDrive and MSS, documented attached. The Board unanimously voted in favour of the Proposal and agreed to move to documentation and implementation stage. 84 Mr. Flageul asserts that he was assured at this meeting that he was going to be the C.E.O. and a director of the merged business. He states that if this had not been so, he would have voted against the merger. Mr. Mace denied that this assurance was given. 85 For the purpose of this board meeting, Mr. Flageul circulated by email his first C.E.O. Operations Report. It set out what WeDrive was currently "delivering" as follows: - Designated driving services to both individuals and corporations - Valet parking services at sporting events - Technology for venues to place booking on behalf of their clients - Technology for Lexus to place booking on behalf of their clients - Technology for corporations to self-manage corporate accounts and respective corporate users. 86 The report noted that in Melbourne there had been a very slow start but that sales had since increased significantly. Sales had not, however, improved in Sydney. The report also described the difficulty of finding suitable drivers. Driver recruitment was low and problematic. 87 On 10 November 2017, a boxing match was held at the Cronulla Sutherland Leagues Club. One of the boxers, a Mr. Paul Gallen, was apparently well known in Sydney. Through the intervention of Mr. Mace he had secured an agreement between WeDrive and the Cronulla-Sutherland Sharks (which I understand to be a club committed to the sport of Rugby League), for the "Sharks" to use WeDrive's services. In the period leading up to the match, Mr. Gallen had been promoting the use of the app. It was expected that the app would be used at the boxing match. This was thus an important moment for WeDrive's business in the Sydney market. Mr. Mace had understood from either Mr. Taylor or Mr. Nicholson that Mr. Flageul had arranged for "countless drivers" to be available. However, the app failed to work or said that there were no drivers available. Accordingly, WeDrive apparently failed to conduct a single job on the night. Mr. Mace, in the weeks following, received constant criticism about WeDrive. Mr. Flageul said that no-one told him about the complaints. He said WeDrive did not have enough drivers, and that when a driver was not available, the app was designed to refuse the booking request. He said that the deal between the "Sharks" and WeDrive was impossible to deliver and he asserted that "[a]ll parties were aware of this concern." However, there is no contemporaneous evidence which supports this contention. 88 On 13 November 2017, Mr. Mace sent an email to Mr. Flageul (copied to "all parties") to pass on a complaint that he had received from a customer in Victoria. Mr. Mace also complained that he had understood that the business needed only an investment of around $25,000 to $30,000 to stabilise the app. Instead, over $100,000 had been spent and the app still did not seem to work. He wanted the following feedback: 1) how come we've spend more than 3 times the represented amount; and 2) still have stability issues; and 3) estimate (cost & time) of future investment to achieve system stability 89 Mr. Flageul replied by saying about $68,000 had been spent on other projects approved by Mr. Taylor. On that basis he considered that "[w]e are therefore roughly within projected …budget." He said that the customer complaint was not about the stability of the app but concerned "user experience (UI/UX) - feel and flow". This led Mr. Taylor to send the following stinging email back to Mr. Flageul: Yan your reply below is disappointing and quite simply misleading. Let me start with a definition of accountability… 90 Mr. Taylor rejected the proposition that the customer complaint was not about the stability of the app. He wrote that it was "a reflection of how the app has been designed and delivered since inception even after an additional $100k of spend, in which you driven and had your recommendations and priorities approved [sic]." He said that the app was a "business loser". He thus wrote: [Q]uite simply, the current WeDrive app should never have been in the state that it is considered a "business loser" especially in the context of how it has been consistently portrayed since our initial discussions that involved [Mr. Mace] and I and even [Mr. Barker] in the early days. We now have [Mr. Mullins] on board to provide a balanced view on the technology, which will be useful to all stakeholders. Mr. Mullins was an information technology contractor used by the M.S.S. Group. 91 Subsequently, on 15 November 2017, Mr. Mace again emailed Mr. Flageul about the budget blowout. He wrote: We can go through in more detail tomorrow. I appreciate I am ITC illiterate but I just want to understand; 1) where the actual $30k represented blew out to $100k; and 2) why we still have stability issues; and 3) cost to ensure stability; and 4) list of desired enhancements, estimates and ROI See you in the morning. 92 Mr. Flageul replied by observing that "stability is all about exactly that … to stay stable and unchanged. When one adds any new feature, then the stability is compromised and requires work to re-establish … stability." In one of his affidavits, Mr. Flageul asserts that he never said that $100,000 would be needed to stabilise and develop the app in order to make it fully automatic; I note, however, that Mr. Flageul's reply email does not say this. Notably also, Mr. Flageul's email does not contain any denial that Mr. Flageul had made a representation to Mr. Mace that $30,000 was all the funding that would be needed. 93 Throughout November and early December 2017, the M.S.S. Group undertook a form of due diligence of WeDrive to determine whether some type of merger with M.S.S. Transport was feasible. This was largely conducted by Messrs. Russell and Barker. Mr. Barker was open to a merger with WeDrive. He had been told by Mr. Mace that the business had been losing money. Nonetheless, initially at least, he thought that a merger might be promising. Indeed, by mid-November an "in principle" merger had been agreed to. In contrast, Mr. Russell had no real interest in WeDrive, and was only prepared to investigate a merger as a "favour" to Mr. Mace. 94 The type of merger changed during this period. Instead of a formal legal merger resulting in one legal entity owning both businesses (which the M.S.S. Group rejected at some point) a synthetic merger was considered. For that purpose, Messrs. Barker and Taylor examined the possibility of a back office "merger" of WeDrive and M.S.S. Transport in order to find cost savings and efficiencies that might help prop up the WeDrive business. In that respect, it would appear that because the word "merger" continued to be used by the parties, Mr. Flageul may have laboured under the misconception that the original proposal considered by WeDrive's board on 10 November 2017 was still being pursued. In any event, Mr. Barker assumed a leadership role in trying to "salvage" what was left of WeDrive. Whilst in cross-examination he professed to have taken over as a new C.E.O., no such formal appointment was ever made and no other M.S.S. Group witness corroborated this claim. Perhaps, like the inapt use of the word "merger", Mr. Barker had misunderstood his role. The evidence, nonetheless, shows him guiding WeDrive's business, save for issues concerning information technology. These were the concern of Mr. Russell. The shift to this different type of "merger" originated, so it would appear, from an email sent by Mr. Mace to Mr. Russell on 15 November 2017 which is in the following terms: Agenda * Merger summary, new structure and responsibilities (GT) * Cultural Expectations (CR) * Merged Co., MSST and WeDrive KPI's (MB) * Where are we today - ITC and operations (YF) * Where are we today - sales (TT) * Go to market plan (MB, TT, YF) A) consumer B) corporate * Marketing (GT) 95 As a result of the investigations undertaken by Messrs. Taylor and Barker, Mr. Russell said he became very concerned about what he saw as "the money bleed." On 20 November 2017, he sent Mr. Flageul an email to invite him to a meeting at which the following topics were to be covered: 1. Current capability of systems 2. Developments improvement in progress (when due and outcomes) 3. All outstanding, but approved Development / improvements 4. Any proposed and awaiting approval or prioritisations - business cases included and costings 96 A meeting with Messrs. Flageul, Russell, Barker and Mullins then took place on 23 November 2017. It was Mr. Barker's evidence that at this meeting he realised that the app really required significant development and improvements before it could work automatically. Mr. Russell gave evidence that his impression was that many of the capabilities of the app were either incomplete or required significant investment. After the meeting, Mr. Flageul circulated an email in which he set out a summary of priorities and actions. Mr. Russell responded by saying that all works that had already been commenced were now "ON HOLD". He wrote as follows: To be very clear, the actions out of yesterday as discussed during day [sic] and again in my wrap up. 1. All works that have not commenced are now ON HOLD. Nothing new to commence into the below [sic] has occurred. 2. [Mr Mullins] to send across his notes to [Mr. Barker] on all projects or mods mentioned during days discussions 3. Yan to meet with contract point and put a value to all small projects along with larger ones. Yan to also scope up with [Mr. Mullins] two additional projects identified yesterday as important. The outcome Yan needs to send back to [Mr. Barker] 1. a list of all projects in progress. Finish date, go live date, current cost and what's left to pay. 2. a full list of all projects, no matter what size, a firm price for big ones and a approx costs [sic] for the under $2000 items. 3. scope up new items identified yesterday with approx costs 4. [Mr. Barker] to discuss with [Mr. Taylor] what has been taken up in current financials and what we have left in proposed budget for 2017/l8 5. [Mr. Russell] and [Mr. Barker] to define business strategy and products to insure [sic] IT investments matches strategic initiatives. To be approved by MSS stakeholders and board. 6. Matt to issue consolidated minutes / notes from yesterday once all updates received 7. follow up meeting, conference call for next Thursday to 'start' to prioritise works based in business strategy, marketing plans and business priorities and budgets. NO priorities where agreed yesterday, just discussed. 97 Mr. Russell subsequently discovered that WeDrive had outstanding invoices from Contact Point which had remained unpaid in the sum of $58,680. 98 On 6 December 2017, Mr. Mullins sent an email to Mr. Russell which informed him that "WeDrive/MSS" needed to take ownership of the account where the code for the app was stored. Mr. Russell agreed that this needed to occur. Mr. Mullins then sent the following email on 8 December 2017 to Mr. Flageul seeking migration of the code to the M.S.S. Group: Hi Yan, Would it be possible to include me in the next meeting you have with Contact Point? I'd like to be part of the technical discussions to start preparing for the transfer of development to our team. With the projects due to be completed in the next 2 weeks I don't see a great risk in Contact Point becoming disengaged. On Monday, I'd like to contact them and request for them to migrate the code repository into the new GitHub account which I have created under MSS Group's name. We will need to invite their developers to the account and they can transfer the code into it. That way you'll always be in control of the code. The MSS Group repository is setup using the MSS IT Admin account mss_adm@mssgroup.com.au which Paul Hughes and I have access to. 99 On the same day, Mr. Russell sent an email to Messrs. Mullins and Taylor which asked for a full copy of the code to be obtained. On 11 December 2017, Mr. Mullins then sent an email to Ms. Heather Maloney of Contact Point requesting access to the WeDrive source code repository. Ms. Maloney replied on 13 December and said that Contact Point could only give conditional access to the code because all development of the software since Contact Point's engagement, and which had utilised Contact Point's "pre-existing codebase", was "obviously … the IP of Contactpoint." Ms. Maloney wrote: However, the software is provided on the basis that: 1. It is provided purely for the purpose of access in the event of Contactpoint no longer having a business relationship with WeDrive, and WeDrive having fulfilled all contractual obligations with Contactpoint. 2. It will not be accessed for the purpose of creating "derivative works" based on the code. 3. It will not be distributed to any other party, nor displayed to any other party e.g. via a website or code repository. Whilst the copyright in the software developed prior to the engagement of Contactpoint is not our intellectual property, all development since has utilised our pre-existing codebase and IP, and obviously is the IP of Contactpoint. It goes without saying that the IP in the concept / business model is of course solely owned by WeDrive. 100 Mr. Mullins replied by email very early on 14 December 2017 to ask whether there was some form of agreement between WeDrive and Contact Point concerning the ownership of intellectual property. He wrote that it was his understanding that WeDrive owned all the "IP in use". The email states: In regards to "all development since has utilised our pre-existing codebase and IP, and obviously is the IP of Contactpoint" was there a Development Agreement between WeDrive and ContactPoint which covers the ownership of IP? We'll need to understand which components you're referring to. This one is a little surprising as we're under the impression that WeDrive own all the IP in use and see the development completed so for as providing WeDrive with a strategic advantage over competitors and would have expected the code to be unique to that of WeDrive's requests for proposal. (Emphasis in original.) 101 Ms. Maloney responded by email (with a copy to Mr. Russell) and explained that WeDrive and Mr. Flageul (which I infer was intended to be a reference to WeDrive Australia) did have an agreement which addressed ownership of the intellectual property. It was the contract I have described above. Ms. Maloney wrote: Yes, we have an agreement with Yan - our standard terms and conditions cover this IP ownership arrangement. With regard to the IP ownership, I'm sure you can appreciate that part of the advantage that Contactpoint brings to our clients is a body of code and domain experience that we have developed over the years, and continually enhance, which enables us to provide value to our clients and efficient services. That is why we must retain ownership of IP, because it is also used in previous clients' projects. As per our T&Cs, WeDrive will have a perpetual and transferrable license to use the IP but not to become vendors of software or re-purpose software, or make it publicly available for others. 102 Mr. Russell promptly emailed Mr. Mullins and wrote: "In English? I'm struggling with what below [sic] means." Mr. Mullins wrote back to say that it looked like there was an agreement "of sorts." Importantly, he also wrote that, as a consequence, WeDrive/MSS "can't re-sell the code as a product with their code in it." Mr. Russell replied: "[t]hat means, Yan shouldn't have sold it to [Mr. Mace] either??" 103 Earlier, Mr. Flageul had separately responded to Ms. Maloney's first email in which she had declared Contact Point's ownership of the intellectual property. He wrote: "[a]greed by me as industry standard safeguard." This led to a response sent by email by Mr. Russell as follows: I'm unsure what your saying in below email, Are you agreeing with Heather that Contact point owns the IP in your opinion for all works done on the code since they took over? So in essence they own part of WeDrive code?? I would have assumed they where on an hourly rate for delivery the scopes you gave them and a fee to secure the code in there house. This is confusing. Can you please confirm, as per my request and [Mr. Mullin's] email, what exact legal instrument You have for this arrangement (if not one in place, any emails in not), a copy of the NDA also please. [sic] If you could respond clearly we can discuss later this morning as running to a meeting now. 104 By email sent on 14 December 2017 by Mr. Flageul to Mr. Russell (and copied to Messrs. Barker and Mullins), Mr. Flageul confirmed Contact Point's ownership of the relevant intellectual property. He wrote: What it means is that Contact Point have used some of their know-how and pre-made codes to build our technology. This know-how and bit-strips of codification would be documented and evidenced to prove it was created by Contact Point prior to WeDrive engaging them in a contract. WeDrive owns the entire IP including these pre-made codes. The IP ownership can be transferred / sold to another company providing that the purpose of the technology is not changed to a point where it has nothing to do with the nature of WeDrive business logic and/or existing technology. This is to prevent us from creating our own tech development company and use their know-how and pre-made codes to create and sell other products. I hope this clarifies. 105 Mr. Russell did not immediately tell Mr. Mace about this ownership issue because Mr. Mace was due to celebrate his birthday over the weekend; Mr. Russell did not want to "wreck" his celebration. However, he did inform Mr. Barker. 106 During his cross-examination, Mr. Flageul accepted that his relationship with Messrs. Barker and Russell got "worse" because he had not disclosed Contact Point's ownership of the relevant intellectual property. The following exchange took place: And I suggest to you that the reason it got worse from this point onwards was because the investing parties in WeDrive thought that they had purchased all the IP in the app; do you agree with that?---Yes, it could be. It could be. Yes. No, look, as we discussed earlier, I totally agree with the fact that back in May 2017 I should have been a lot more careful. I agree with that. But it was never misleading nor known to me that I was misleading anyone. That's my point. My point is that it was a mistake back in 2017, May 2017 when I was - I was young ..... When this came to light in one day I actually fixed the problem on the 18th or 19th - - - 107 Messrs. Russell and Barker met with Mr. Mace on 18 December 2017. They told him about Contact Point's ownership of the intellectual property. They also told him that they were no longer prepared to go along with the merger. Mr. Mace was very disappointed. He instructed his solicitors to prepare a necessary Deed of Assignment and Release between WeDrive and Contact Point. When cross-examined, Mr. Russell explained what he said to Mr. Mace in the following startling terms: I met with him at a café in Cronulla. I told him I had found Yan impossible to deal with. I found their insolvency issue, I found the application didn't work, and I also had major issues about the expenses - the financials and misrepresentation of financials and stuff. So the reality is, I told him on the Monday morning this is a disaster even from us trying to help you clean it up point of view. That is what led, I think, to Steve writing that email to try and come up with another solution to salvage the money he had already invested and, in what we could see in the coming months, the business being completely insolvent. The email referred to by Mr. Russell is explained below. I otherwise accept the truth of this evidence. 108 At about this time, Mr. Mace received WeDrive's profit and loss statement for the period 1 September to 30 November 2017. Mr. Mace observed that this document disclosed an overall loss of almost $300,000 for that period. For the month alone of November, the loss was $120,687. 109 Mr. Taylor had a telephone conversation with Mr. Flageul on 18 December 2017. The nature of that conversation is disputed. Mr. Taylor said that during this conversation he asked Mr. Flageul for the code for the app. Mr. Taylor said that the code was owned by WeDrive and that it was going to become a problem if it could not access the code. He said that Mr. Flaguel said he "appreciated what [Mr. Taylor] was doing and he would try to get to the bottom of it". But according to Mr. Taylor, Mr. Flageul did not like the tone of his voice. According to Mr. Flageul, this was because Mr. Taylor was shouting at him. Mr. Flageul said he was threatened with these words: "stop playing games with us or you are going to make it very difficult for yourself very soon…" He said his integrity was questioned. On the same day, Mr. Flageul sent an email to Mr. Mace (described in more detail below) informing Mr. Mace that Mr. Taylor had questioned his integrity and had threatened him. Mr. Flageul's version of what took place was not put to Mr. Taylor in cross-examination. 110 In these circumstances, I am prepared to find that the conversation between Messrs. Taylor and Flageul was considerably heated. I will also accept that Mr. Taylor questioned Mr. Flageul's integrity as this is corroborated by the email, Mr. Flageul sent on the same day to Mr. Mace. I also accept that Mr. Flageul honestly thought that Mr. Taylor was threatening him. Again, this is corroborated in the same email, although the nature of the threat is not specified. Given the high emotion of this telephonic exchange, Mr. Flageul may have misinterpreted what Mr. Taylor was saying to him. A strongly worded demand for the production of the code, might easily have been treated by Mr. Flageul as some form of threat. I daresay that Mr. Taylor was very angry to discover that Contact Point retained ownership of the intellectual property. I also find that his relationship more generally with Mr. Flageul by this time was strained; the strain got worse as a result of the news about Contact Point. I am not otherwise prepared to find that Mr. Taylor threatened Mr. Flageul in the specific way he suggests. In the absence of some further corroboration, given Mr. Flageul's interest in the outcome of this proceeding, and given my observations, made earlier, about his performance in the virtual witness box, his testimony alone is not a sufficient discharge of his onus of proof. 111 On the next day (19 December 2017), Mr. Flageul had another heated telephone conversation, this time with Mr. Mace. Mr. Mace candidly admitted that he told Mr. Flageul that he was "absolutely filthy" because Mr. Flageul had signed the Business and Asset Purchase Agreement stating that WeDrive Australia owned all of the relevant intellectual property when it in fact did not. Mr. Mace said in cross-examination that he "was pacing up and down the street". He was "fuming." He also said that Mr. Flageul said to him that he did not know that signing the contract with Contact Point would give it ownership of the relevant intellectual property, that he was sorry and that hewould "fix it." Mr. Mace said that he told Mr. Flageul that Contact Point had to assign the necessary intellectual property to WeDrive. Mr. Flageul's version of this conversation is different. He said that he was told by Mr. Mace that if he did not get Contact Point to assign the intellectual property he "would sue [Mr. Flageul] for $300,000 and run [him] to the ground." This particular alleged statement was not put to Mr. Mace in his cross-examination. It is not otherwise corroborated. In such circumstances, I find that this telephone conversation was probably very heated, but again I do not otherwise find that Mr. Mace threatened to sue Mr. Flageul or run him to the ground. I do note that in cross-examination, Mr. Flageul conceded that Mr. Mace had good reason for being unhappy. He said: But I would agree that yeah, he had matters for being unhappy. That, I can't disagree with. That's fair enough, because yeah, I made a mistake. So - but I promised to him that I was going to rectify that on the day, and I did. 112 Mr. Mace says that he then contacted Ms. Maloney of Contact Point. She ultimately agreed, he said, to an assignment of the intellectual property needed fully to exploit and develop the app to WeDrive. The stated consideration in the Deed of Assignment and Release ultimately entered into by Contact Point and WeDrive on 19 December 2017 was only $1. In his first affidavit, Mr. Flageul gives hearsay evidence of conversations between Mr. Mace and Ms. Maloney that were said to have taken place in 19 December 2017. Given that he did not call Ms. Maloney to give evidence, I place no weight on that evidence. Following acquisition of the outstanding code by WeDrive, Mr. Flageul asked Mr. Russell if the "Contact Point commenced tasks [can] resume." Mr. Russell replied that this work was "[s]till on hold until further review and updates provided today." 113 On the same day (19 December 2017), Mr. Mace sent an email to Messrs. Russell, Taylor and Barker as well as to Mr. Flageul, calling for a WeDrive board meeting in two days (21 December 2017). He proposed an agenda which included, I infer, a proposed discussion of Mr. Flageul's behaviour. The agenda items were as follows: 1. Behaviour (SM) * Non disclosures * Communication 2. Code/IP/Contact Point (SM) 3. Results (GT) 4. Sales (CR) 5. ITC spend breakdown YTD (CR) * Summary in excel Copy of every invoice with detail * Proposed projects with estimates and benefits 6. Operations Update * Drivers (MB) 7. Short term strategy moving forward 8. Long term strategy and the process 114 Mr. Mace wrote that Messrs. Russell and Barker would attend as observers on behalf of the Mace interests. He also asked that the meeting be kept "factual and respectful at all times." This email attached the profit and loss statement referred to above for WeDrive. It also attached a balance sheet for the months of 30 September through to 31 December 2017 (the last month, I infer, was an estimate). As at 30 November 2017, the assets of WeDrive included cash at bank of $171,313, nil current assets, and fixed assets of $6,752. In contrast, its liabilities were booked at $69,693. I infer, given WeDrive's poor financial performance, that the cash at bank represented the remaining money injected into the company by Mr. Mace. The balance sheet also shows that the loss of earnings of $298,728 as at 30 November 2017 was expected to grow to $335,559 by the end of December. In other words, but for the cash invested by Mr. Mace and deposited at the bank, according to the accounts WeDrive was already hopelessly insolvent. Because of the "money bleed" observed by Mr. Russell, even with the cash at bank I accept that there was a real risk that WeDrive would have been actually insolvent by January 2018. In cross-examination, Mr. Flageul sought to impugn the accuracy of these accounts. But he produced no material to contradict their contents. 115 In his closing submissions, Mr. Flageul also submitted that the concerns held about WeDrive's solvency were "contrived." He sought to rely on accounts, and other documents, prepared well after the termination of Mr. Flageul's employment, to contend that WeDrive was solvent in December 2017. Technically, that was so, but only because of the cash at bank. WeDrive's profit and loss statement otherwise showed the incurrence of the losses I have already described. 116 On 20 December 2017, Mr. Mace sent another email to Messrs. Russell and Taylor (but not to Mr. Flageul) entitled "MSS / WeDrive Moving forward". By this email, Mr. Mace sought confirmation from Messrs. Russell and Taylor about the following "revised take over economics of WeDrive": 1. No longer a Merger - by this I mean MSS will not being merging their transport business in to a jointly beneficial vehicle 2. MSS Group to acquire 100% of WeDrive Pty Ltd (assets, liabilities, future trading and current cash on hand) 3. Settlement 1 /1 /18 4. Revised economics as per below 117 What followed was a plan for the "full acquisition" of WeDrive by M.S.S. Transport and the issue of certain "W" class shares. Under this plan, Mr. Flageul's original proposed 7.5% shareholding in a future merged entity, was reduced to two tranches of "2.5% of EV above $2M if WeDrive is divested and [Mr. Flageul] is working in the business" and "2.5% of EV above $10M is WeDrive is divested and [Mr. Flageul] is working in the business." Mr. Barker was recorded as getting "5% of EV above $0 if WeDrive is divested and [Mr. Barker] is working in the business". 118 Importantly, the email then states that the foregoing changes were the result of WeDrive not being in a "standalone position to trade solvently from early January/February 2018"; that there had been "[s]ignificant misrepresentations about code accessibility and IP ownership"; that there had been misrepresentations about both "technology functionality" and the cost to achieve functionality; that there had been non-disclosure by Mr. Flageul of a new larger competitor in the market that he had been "monitoring for a long time"; and that there had been significant understatements of "the current trading loss run rate." 119 Mr. Mace was cross-examined about this email. This is what he relevantly said (the references to "Yan" are to Mr. Flageul): And at this point in time we're now down to the point where we have had - we're getting to the point where - we're at a head now - it's a solvency issue. There was no way I was going to put any further capital into this business. Yan's ethics and conduct, in my view, could have been terminated for any one of those reasons let alone all of them combined and my primary focus was solvency and keeping people in jobs. So this was, again, a point of discussion for the next board meeting in December. You can't have a business that - it can eat through that capital in - in a matter months after takeover when it was - it only needed $8000 a month. So - and a - and a way - a way of doing that is a potential W class share where it was absorbed into the business into the - as I say, it's 100 per cent takeover. A lot of the expenses could be absorbed into the wider MSS business and I was still - still prepared to have an olive branch out there in a special class of share with WeDrive as W class shares - WeDrive shares, that if the business could have actually performed like the representations which he originally gave from the outset, that I would still reward Yan. But clearly - clearly what he - what he had represented at that point was not the case but I was still trying to do the right thing, even by Yan let alone all the employees and keep the business running. So - yes, that - that is a proposal that I was trying to get the MSS team to - to get on board with. In all the circumstances, I accept the truth of the foregoing evidence. 120 An attempt was made before me to downplay the concerns held at this stage by Messrs. Mace and Taylor about the ownership of the intellectual property. After all, it was said, the problem had been fixed when Contact Point assigned the relevant intellectual property to WeDrive. It was also said that the whole event had been a "storm in a teacup" and that it had been irrational to dismiss Mr. Flageul on this basis. With great respect, that observation misses the point. The issue concerning the ownership of that intellectual property was emblematic of a much more significant problem that existed with Mr. Flageul; Messrs. Mace and Taylor, I find, had simply ceased to trust him. The ownership issue merely brought that simmering issue to the boil. As Mr. Taylor said during his cross-examination: It's the case by then, isn't it, that there was no real problem anymore with Contactpoint because a settlement had been reached with Contactpoint on 19 December. You were aware of that, weren't you, that contact point had signed a deed under which it assigned any rights in might have in the software to WeDrive Proprietary Limited?---Again, I was not party to that, but I understand that had occurred. But I believe the key point was around integrity, trust and relationship. Because what that inferred was - not only inferred, what had been very clear was Mr Flageul had misrepresented his ownership, failed to disclose and was not acting in the best interest of WeDrive Proprietary Limited through that process. So that I was - so it's not simply a matter of, "Let's forget about all the ethical and legal issues. There's - we've fixed them now, so let's pretend it didn't happen." It was all - the whole context was very important, not just the actual ownership and restatement of the ownership of the rights. (My emphasis.) In all the circumstances, I accept the truth of this answer. 121 On 20 December 2017, Mr. Taylor discussed the 20 December 2017 email with Mr. Mace. They considered terminating Mr. Flageul's employment. In cross-examination Mr. Taylor said: Now, can I ask you whether there was any discussion on the phone of the intention on the next day, which was to be the - which was, in fact, the 21 December board meeting, whether there was any discussion on the phone of an intention to terminate Mr Flageul's employment on the next day?---Yes. We had raised concerns about his operating performance; the major concern about the issue around the ownership and access to the IP that had arisen over recent weeks, and the frail financial position that WeDrive was in and ability to fund a - what was a several hundred thousand dollar a year chief executive that was not performing to - to expectations both quantitatively and qualitatively. So, yes, that was raised and I also think it's important to note here at this point and this sequence is I - I've effectively agreed to having no - the business having no value in my - and having no shares in that business and stepping away from the business so it was not just Yan, it was also myself that was also being requested to (1), I conceded my equity share, and (2), I - I - it was been agreed that I would also be removed from the business for the reasons outlined so it was entirely consistent. So I'm not running the business at this point. I'm not making the decisions; hopefully that's very clear. 122 Mr. Taylor went on to give evidence that he did not know whether Mr. Flageul's employment would be terminated the next day. It depended, he said, on Mr. Flageul's response to Mr. Mace's proposed changes. 123 On 21 December 2017, the board of WeDrive met in Sydney. Immediately prior to this board meeting, Messrs. Mace and Taylor met Mr. Flageul. At this meeting, Mr. Flageul was dismissed as WeDrive's C.E.O. What occurred at both meetings is disputed. 124 Mr. Flageul did not appear to have any recollection of the first meeting. He gave evidence that the termination of his employment took place at the board meeting. Although it perhaps does not matter, Mr. Flageul also contends that he was dismissed as a director of WeDrive. Mr. Flageul accepts that Mr. Mace told him that the reason for his dismissal was his failure to disclose Contact Point's ownership of the relevant intellectual property. Mr. Flageul describes this in his third affidavit as follows: Steven Mace informed me that the reason for my dismissal was my alleged failure to disclose the ownership of the intellectual property in the WeDrive Mobile Application before and after the asset purchase transaction between WeDrive Australia and WeDrive Pty Ltd. I said that Greggory Taylor and Steven Mace should have made enquiries regarding the contract between WeDrive Australia and Contact Point. 125 Plainly, dismissing Mr. Flageul for the foregoing reason was legitimate and does not, for the reasons expressed below, constitute the taking of adverse action against him for the purposes of the F.W. Act. It follows, although this was not put directly to Mr. Mace, that Mr. Flageul's case must rest on the proposition that Mr. Mace's explanation for his dismissal was false. 126 Mr. Flageul also recalls that Mr. Mace told him that he would sue Mr. Flageul for loss or damage caused by the non-disclosure of the intellectual property ownership issue and further, that unless he was prepared to sell his 200 shares in WeDrive for $1, WeDrive would also sue him. Mr. Flageul said that he protested his innocence and said that he had complied with all requests during the due diligence of WeDrive Australia's former business. Mr. Flageul gave evidence that Messrs. Mace and Taylor accused him of failing to disclose the true financial position of WeDrive Australia. Mr. Flageul said he never did this. He said that he was not responsible for WeDrive's financial state. He said he was given 10 minutes to decide whether to sell his shares. He telephoned Ms. O'Donovan. He said he felt "confused and stunned." He said he realised that he had no option but to sell his stake in WeDrive. 127 Mr. Flageul said potential multimillion dollar deals he had initiated with Crown Perth and B.M.W. Australia were discussed together with his engagement as an independent contractor of WeDrive to finalise these proposals. He said the board also discussed developing the app to compete with "Uber" and further developing WeDrive's technology "across the MSS Group to create an integrated management system called WeSuite." 128 Ms. O'Donovan gave evidence of what Mr. Flageul told her during their telephone conversation. Whilst I was prepared to admit her hearsay statements into evidence, I nonetheless do not think that they can usefully corroborate Mr. Flageul's account of what took place. They have no weight. That is because she was not at the meeting. At best, they are only evidence of what Mr. Flageul told her at the time, and their probative value probably rises no higher than Mr. Flageul's own testimony. 129 Mr. Mace has a distinct recollection of the pre-board meeting with Mr. Flageul and Mr. Taylor. This is what he remembers: I said to Mr Flageul that although he had told us, prior to WeDrive Pty Ltd purchasing the business, there were trading losses, all of a sudden we are losing a hundred grand or more in single months which he had never told us. I said I was not prepared to keep funding it and I did not think he was a good fit to be the CEO of WeDrive Pty Ltd. I said he was either a fraud or incompetent, and complained about the ownership of the technology. Mr Flageul said he was really sorry and it should not have ended up like this. I said he may be able to sit on the board and no one could touch his shares, but his role as CEO was terminated. 130 The next day (22 December 2017) he sent Mr. Flageul an email attaching a letter giving Mr. Flageul notice of his termination as C.E.O. of WeDrive. That relevantly gave the following reasons for the termination of Mr. Flageul's employment: As discussed with you, the Company has been and continues to undertake investigations regarding your conduct as an employee of the Company and your dealings with respect to the recent transaction under which the Company purchased certain assets from WeDrive Australia Pty Ltd as trustee of the WeDrive Melbourne Trust (Transaction). In particular, the Company remains concerned about your failure to disclose material issues to the Company both before and after completion of the Transaction. The foregoing is contemporaneous evidence of the reasons for Mr. Flageul's dismissal as C.E.O. of WeDrive. 131 Mr. Flageul was given one month's notice. The letter went on to state that until 22 January 2018 (the date his termination would come into effect), Mr. Flageul was obliged to continue his duties under his Executive Services Agreement. 132 In cross-examination, Mr. Mace maintained his version of what happened at this first meeting: And at that meeting you told Mr Flageul that he was dismissed as chief executive officer of WeDrive Proprietary Limited, did you not?---No, that's not correct. We - that didn't happen at the board meeting. We had a meeting with Yan prior to the board meeting in which we went through his conduct, of all those items pretty much was listed in that other document, from, you know, not owning the code, misleading on the code component, the trading performance of the business, the - another big one that came from left field the - all these new expenses that come from left field. Yan admitted to paying for them on his own personal credit card prior to the transaction and because the business couldn't afford them. Therefore, now that the business was under new ownership, it went through to business. You know, and trying to explain to them that the understating of expenses went to the value of the business. All these sort of things. That ultimately went - led to the - you know, the termination of him and cost control, since we were heading into to the point of solvency. So that happened before the board meeting and it was - it was absolutely done before the board meeting and, at the end of that, I said this doesn't - this does not - has no reflection on shareholding and directorship at this point in time, but your role as chief executive, based on your conduct, yes. He was terminated prior to the board meeting. 133 Then there was this exchange: After that conversation, do you say that Mr Flageul then attended a board meeting?---So after - after I went through the reasons why, he - he actually hugged me and then - and he did his usual way of greeting someone, he would kiss me on the cheek. And he apologised. He said that, you know, he can't believe it went down this path. This is his whole life's work. He's, "Sorry, mate. I'm sorry, mate. I'm sorry, mate. I can't believe it has got to this point." And we told him to - actually, I think Gregg him to take a break. And so we had to get into the board meeting. And then we - then we walked back over to a sectioned-off area where we had, in the hotel, for the board meeting, of which we had invited guests to that board meeting, which was Matt Barker and Chris Russell, because it was key to the potential discussion of solvency, moving forward, and they had done some work on the due diligence of reducing down the costs base - it had just gone through the roof - and the IT bills. So that was the purpose of those guys being there, which Yan knew about, and Yan did not say a word about them being there. And we proceeded to have a board meeting. 134 Mr. Taylor's recollection of this first meeting accords with that of Mr. Mace. He said that Mr. Mace told Mr. Flageul that he was "going to have" to be "let … go" because of Mr. Flageul's "misrepresentations, performance and communication issues" which had been raised with him. He said that Mr. Mace told Mr. Flageul that WeDrive's business had no money and that the intellectual property had no value. He also recalled that Mr. Flageul said he was sorry that he had let them down. 135 In his third affidavit, Mr. Flageul denied Mr. Mace's account of what took place, although (as noted above) he accepted that the proffered reason for his dismissal was his non-disclosure of Contact Point's ownership of the intellectual property. He denied he had ever said he was sorry; he denied that he was told that he might be able to retain his directorship. He then added some new evidence. He said he did not know that WeDrive was making losses because he had been denied access to the Xero accounting system (described below), although in cross-examination he admitted that he had access to the accounts I described above. He said that Mr. Mace had said to him "you are fucking fired." As I understood it, Mr. Flageul said that Mr. Mace had told him that he could acquire WeDrive if Mr. Flageul could find someone with $300,000 to invest in the company. In cross-examination, Mr. Flageul admitted that Messrs. Mace and Taylor had complained to him at this first meeting about revenue being substantially lower than what had been forecast. However, in substance, he said this was not his fault. I reject Mr. Flageul's claim that he did not know that WeDrive was making losses. He was sent WeDrive's profit and loss statement and balance sheet when he received Mr. Mace's email of 19 December 2017. 136 The second meeting held on 21 December 2017 was the WeDrive board meeting. Messrs. Russell and Barker also attended this event as observers. I do not need to repeat Mr. Flageul's evidence-in-chief concerning this meeting which I have set out above. 137 Mr. Mace gave evidence that at the board meeting, Mr. Russell expressed no confidence in WeDrive. Mr. Russell said that its trading losses were higher than those disclosed in the accounts. According to Mr. Mace, Mr. Flageul responded by saying that he used to pay for lots of costs himself so that they would not "sink" into WeDrive Australia. Messrs. Russell and Barker both said they were opposed to any merger. Mr. Mace said he was not prepared to invest any more of his own money. He said that he offered to sell WeDrive to Mr. Flageul for $1, but Mr. Flageul declined this offer, saying "he could not afford to keep it afloat". He made the same offer to Mr. Taylor, who declined and said "it would run out of money in a couple of days". He then made this offer to Messrs. Russell and Barker. They said that they were "not keen" but would consider the offer over a couple of days. Shortly afterwards, they accepted the offer, provided that each of Messrs. Mace, Taylor and Flageul assigned their shares and stepped down as directors of WeDrive. The WeDrive board agreed to this proposal. 138 Mr. Mace also gave evidence that he never threatened to sue Mr. Flageul unless he transferred his shares. His memory is that he said he would have considered pursuing Mr. Flageul for his $400,000 if his lawyers had suggested he should do this. He also recalls telling Mr. Flageul to use his notice period to pursue potential clients for WeDrive as a way of mitigating the losses that had been incurred. He said Mr. Flageul was very apologetic and even kissed his cheek. He agreed that Mr. Flageul was given 10 minutes to consider what he wished to do with his shares. 139 Again, during his cross-examination, Mr. Mace maintained this recollection of what took place at the board meeting. Thus, the following exchange took place: All right. Was there any mention of MSS acquiring Mr Flageul's shares in WeDrive Pty Ltd for $1 on that day?---When no one wanted anyone's shares, I said, "You could ask the MSS guys if they were interested?" To which they said they, "Would have to take it away and consider it, because of the trading performance of the business." After the other shareholders rejected their shares to be sold for $1. Sorry. We all said - I said first, "Does anyone want my shares for $1?" And Yan said, "No." And then, I asked Mr Taylor and he said, "No." Mr Taylor then asked Yan, does he "want his shares for $1?" And he said, "No." And Yan - Yan asked if we "wanted his shares?" And I said, "I don't want your shares. I don't believe in you and I don't believe in this business any further. But the MSS guys might be able to salvage something. Do you guys have any interest?" At which point they said, you know, they huffed and puffed a bit and they said they "would have to take it away". Because of what they have discovered, the financials were moving from month to month, they didn't know what the impact would be, how much they would lose, to then try and turn the business around in the foreseeable months to whether it was even worth to even buy it for $1. That was the context of it and how it was said. So no I didn't offer them a session to buy it for $1, no. 140 Mr. Taylor's recollection was that at the board meeting Mr. Mace asked Mr. Flageul what he wanted to do. Mr. Flageul said he had no answers and was sorry. Mr. Taylor said that Mr. Mace expressed the view that WeDrive had no value and offered to sell it to Mr. Flageul for $1. Mr. Flageul declined this offer. Mr. Taylor recalls that Mr. Flageul was told to go for a walk or ring someone as Mr. Mace said that they were talking about "giving up on the business" and that it was a "serious decision". Mr. Flageul did this. He returned and said he could not buy WeDrive. It was Mr. Taylor's evidence that Mr. Mace said that the only options left were either a purchase of WeDrive by the M.S.S. Group or the placement of WeDrive into administration. Mr. Taylor recalls that Mr. Mace said that he would talk to Messrs. Russell and Barker to see if the M.S.S. Group would buy WeDrive. Mr. Taylor then announced his resignation as executive chairman and director of WeDrive. 141 Following the board meeting, Mr. Taylor recalled that Messrs. Russell and Barker agreed to buy all the shares in WeDrive held by each of Messrs. Mace, Taylor and Flageul for a total of $1. He said that Messrs. Mace and Flageul also agreed to resign as directors. 142 Mr. Barker's evidence generally accorded with that of Messrs. Mace and Taylor. However, he added that Mr. Flageul was "visibly upset", which I consider unsurprising. His evidence was as follows: At the meeting, Mr Mace asked if MSS Transport would be willing to take over WeDrive Pty Ltd and buy out the shareholders, who I understood to be Mr Flageul, Mr Mace and Mr Taylor, via their own companies/trusts, for the total of $1. Mr Russell and l agreed after Mr Mace assured us that it owned all of the technology and the intellectual property rights that went with it. Mr Mace and Mr Flageul then discussed potential corporate opportunities with BMW and the Crown Casino in Perth which Mr Flageul had apparently been working on. Mr Flageul was visibly upset during this meeting, so as a positive Mr Russell and I told Mr Flageul that he had done a good job trying to turn those connections into potential corporate accounts for WeDrive Pty Ltd, and we said he should keep working on those accounts. As Mr Flageul appeared upset, and I suggested that we discuss it another time. [sic] 143 In cross-examination, Mr. Barker recalled that the possibility of Mr. Flageul being employed in some way in the future was discussed, especially given the opportunities Mr. Flageul had raised concerning Crown Perth and B.M.W. The following exchange took place: Was there any mention on that day while you were present with those persons of the possibility of Mr Flageul doing some consultancy work for WeDrive Proprietary Limited, although his employment had been terminated?---I think there was some conversations around potential for future engagement with MSS. Whether it was - whether it was a consultant - I know what you're referring to, but whether it was a consultant or an employee or whatever, I don't - I don't honestly remember that being discussed. But I do remember at the time there was still a belief that there was some intellectual property that may have been of use and helpful. So, yes. As I say, we came in right at the end of this thing. Yes. Do you remember at that meeting any mention of the possibility of Mr Flageul working as a consultant for the purpose of obtaining business from either BMW or Crown Perth?---I remember a subsequent meeting talking - yes. Actually, yes, that was mentioned. I - I don't know what the - I don't know what the - what the format of the engagement that was talked about, but the work around BMW and Crown was discussed. Yes. Definitely. 144 Mr. Russell's account of the meeting was similar to that of Mr. Mace. He recalled that Mr. Mace said that he needed to get approval from the other shareholders of the M.S.S. Group before agreeing to acquire WeDrive for $1. He recalled that he said that he reserved the rights of the M.S.S. Group to shut down WeDrive if its financial position did not improve. His evidence did not accord with Mr. Barker's memory that Mr. Flageul was "visibly upset." Instead, Mr. Russell said that Mr. Flageul "appeared to be amicable given the circumstances." 145 Mr. Russell was also cross-examined about whether Mr. Flageul's future role with WeDrive was discussed at the board meeting. The following exchange took place: At the stage when you did join the meeting, was there any mention while Mr Flageul was present of any ongoing consultancy work which might be available for him with WeDrive Pty Ltd after his employment came to its end?---No. The - the discussion was Steve went around and confirmed Yan had been terminated and would work out his notice and do a handover. He confirmed that he had been offered - each of those three directors had been offered the chance to buy the business for a dollar. All of them had declined. They then asked MSS would they consider doing it. They also said they were happy for us to consider whether Yan, post, you know, post his handover, to discuss a potential role with him, given that he had a $14 million opportunity he was saying with Crown Casino. We said we - it - we would be open to a discussion around a future role but we did not define in any way and to be frank I had doubts around a $14 million contract with Crown Casino which never eventuated and wasn't even an opportunity due to the misinformation and the difficulty I had dealing with Yan over the application I was not as trusting of the information and - and being someone who prides myself on having a great culture and stuff I did not see how he would fit. So no, I did not see it fit and no, I wouldn't have been supportive of that at all. 146 In the third affidavit filed by Mr. Flageul, he disagreed with Mr. Mace's evidence that offers to sell WeDrive's shares for $1 had been made by the directors. He said that Mr. Mace simply stated that M.S.S. Transport was buying WeDrive for $1 to give it a "lifeline". He disagreed with the proposition that he had apologised to Mr. Mace or that he had been told to use his notice period to pursue clients for WeDrive. 147 On balance, and subject to what I say below, I generally prefer the recollections of Messrs. Mace, Taylor, Barker and Russell. Each person broadly corroborated the others. I find that the reasons given by Mr. Mace for Mr. Flageul's termination included the non-disclosure issue and the performance of WeDrive. These reasons are largely in line with the issues raised by Mr. Mace in his 20 December 2017 email described above. That document also corroborates the evidence of Messrs. Mace and Taylor. I otherwise am not satisfied that Mr. Flageul has proven his account of what took place and I do not prefer it. Contrary to Mr. Russell's impression of Mr. Flageul, I am prepared to accept that Mr. Flageul was very upset with his termination as C.E.O. WeDrive was his dream; that dream was shattered on 21 December 2017. 148 The one qualification concerns the issue as to whether Mr. Mace threatened to sue Mr. Flageul. When, very properly, this was put to Mr. Mace in cross-examination he said that he did not "recall saying anything to [Mr. Flageul] about legal action…" In the context of Mr. Mace's anger towards Mr. Flageul (he conceded that on 19 December he was "fuming"), I think he may have told Mr. Flageul on 21 December 2017 that he was going to sue him, or that he was considering doing this. As it happens he never did. But I do not accept, based only on Mr. Flageul's recollection, and nothing else, that Mr. Mace told him that unless he sold his shares for $1 he would be sued. There is insufficient evidence to support that claim. However, I accept that Mr. Mace generally threatened to sue Mr. Flageul, but no more than this, because he was angry with him. In other words, I do not accept that Mr. Flageul has demonstrated that Mr. Mace's threats were made to force a sale of his shares. Having said that, those who aspire to high corporate office, with all the rewards that follow from attaining it, must expect to receive the occasional hard knock when times are hard or during a crisis. These hard knocks, such as threats to sue to recover perceived loss, which if made impolitely I do not excuse, are a reality of the responsibilities of high office. But without more, and in the ordinary case, they are unlikely to justify a cause of action and an award of significant damages. 149 On 22 December 2017, Mr. Flageul says that he had a telephone conversation with Mr. Mace in which he alleges that Mr. Mace again threatened to sue him if he did not sell his WeDrive shares; that WeDrive intended to make a claim for loss under a "Management Liability Insurance" agreement arising from the non-disclosure issue, and that Mr. Flageul needed to sign the relevant "paperwork" for this to occur; that if this claim were to be successful Mr. Flageul would be issued with 7.5% of the issued capital of an entity within the M.S.S. Group and would be retained as a "consultant"; and that Mr. Flageul should during this time "behave" and not contact Mr. Mace during January "so as to not alert the insurer." Mr. Flageul sought to corroborate his recollection with a note he had prepared of what he says was said. This note was unsigned. It did not record when it was prepared. It recorded the conversation as having taken place on "22nd December 2018". I place no weight on this note: McKerlie v. Western Australia (No 2) [2006] WASCA 274: see [72]-[83]. In his closing submissions, Mr. Flageul also contended that he had been told that the Management Liability Insurance policy had been purchased on 22 December 2017. However, in his first affidavit, Mr. Flageul only contended that he had been told that a payment had been made on account of that policy to Honan Insurance Group Pty Ltd on 22 December 2017. I accept, because relevant bank records were produced, that a payment was made to that company on that day. But the records do not disclose the reason for the payment. 150 Mr. Mace denied the existence of the foregoing conversation. In cross-examination, however, he said that, whilst he did not recall any conversation on 22 December 2017 with Mr. Flageul, "there's every chance" that such a conversation took place. His recollection was that the C.F.O. of M.S.S. raised with him around Christmas time in 2017 or early in the new year the possibility of making an insurance claim based upon a claim of misleading and deceptive conduct. Until then, he said, he was unaware of the existence of any such policy of insurance. He said he raised the existence of the policy with Mr. Flageul in January 2018 when making an inquiry about Mr. Flageul's attempt to secure Crown Perth as a client. In his mind, if Crown Perth were to become a client of WeDrive, this would have eliminated Mr. Mace's loss, and thus would have obviated the need to make any insurance claim. As to Mr. Flageul's claim of an offer of consultancy, Mr. Mace said the following during his cross-examination: Did you discuss with him on 22 of December 2017 or mention to him the possibility of continuing to work as a consultant?---It was discussed that he had two big outstanding opportunities. And I had a two-pronged strategy around Yan, seeing how volatile he was and how up and down he could be, that he - that if we were to make any success of this, I had to make sure he wasn't running around in the market destroying it and ruining any value that was left. And secondly, if he could get these two big opportunities that he dangled the carrot in front of us, one being Crown and I, actually, can't recall the other one. I think, it might have been a car group of some sort - that I would give him some form of remuneration, as a bonus. That was a reference to - that we could keep him on as a consultant in that capacity, that I'm happy to give him a bonus. And that was my reference on the phone call in January when I was parked outside of Star City that, "Well, if Crown comes off, then I have got no leg to stand on in losses for a misleading and deceptive claim, anyway." But he went off his tree, anyway and then took that as a threat. 151 On balance, I think it is likely that Messrs. Mace and Flageul had a telephone conversation on 22 December 2017. This was the day that he and Mr. Flageul signed a Heads of Agreement (see below). For reasons already given, I think it likely that Mr. Mace again told Mr. Flageul that he was going to sue him, or was considering this step. It is human nature to seek a remedy for a loss that has been incurred. But I am not satisfied that Mr. Flageul has demonstrated that this was connected to the sale of his WeDrive shares, which I find were at this time probably only worth $1. I am not prepared to accept Mr. Flageul's uncorroborated testimony on this issue given that Mr. Mace disputes it. I am also not satisfied that Mr. Flageul has persuaded me that his other claims should be accepted. In particular, I am not satisfied that he was offered a consultancy by Mr. Mace on 22 December 2017. I am also not satisfied that a Management Liability Insurance policy was purchased for the first time on 22 December 2017. No witness was called to corroborate that claim. 152 At this time, Mr. Flageul claims that he was experiencing extreme distress and that his pre-existing depression and anxiety had "escalated severely." He said he could not "think rationally." On 22 December 2017, Mr. Flageul in his capacity as trustee signed a Heads of Agreement that facilitated the transfer of his WeDrive shares, as well as the WeDrive shares of Messrs. Mace and Taylor, to Multi Services Solutions Pty Ltd in consideration for the payment of $1. The other parties to it were the two companies which held shares in WeDrive which were associated with Messrs. Mace and Taylor. It is expressed to be "legally binding on the parties". When Mr. Flageul signed the Heads of Agreement, he claims that he did not have the cognitive ability to measure the impact upon him of taking this step. I will return to consider the issue of Mr. Flageul's mental state. 153 The WeDrive business closed down for Christmas, following which it would appear that Mr. Flageul took two weeks annual leave (Mr. Flageul denies this). Mr. Barker felt that he had received no real handover from Mr. Flageul. 154 In early January 2018, Mr. Flageul formed the view that the management liability insurance claim was "essentially insurance fraud." That was because, in his opinion, WeDrive and Mr. Mace should have known who owned the intellectual property needed for the app. I reject that contention. The evidence clearly shows that neither Mr. Mace nor Mr. Taylor had any such knowledge. Nor can it be said that they should have known. That is because of Mr. Flageul's negative answers to the relevant questions in the due diligence questionnaire and his disclosure to Mr. Taylor at the time of completing that questionnaire of other intellectual property ownership issues in relation to the app, but not the issue in respect of Contact Point. 155 In January 2018, Mr. Flageul and Ms. O'Donovan flew to Perth to try to secure Crown Perth as a client of WeDrive. WeDrive paid for the flights and the necessary expenses. They were unsuccessful. 156 On 18 January 2018 Mr. Flageul sent an email to Mr. Barker. He wrote that he had not heard anything back from Messrs. Mace or Russell but that as a courtesy to Mr. Barker he would make himself available "for a (brief and informal) final handover" on 22 January 2018. Mr. Barker responded by saying that he would "push for clarity as soon as possible". I infer that the reference to "clarity" was about Mr. Flageul's future at WeDrive. Mr. Barker proceeded to "pencil in" lunch. 157 On 19 January 2018, Mr. Barker emailed Mr. Russell seeking instructions to keep Mr. Flageul "on for the foreseeable future." 158 On 22 January 2018, Mr. Flageul received an email from Mr. Barker asking Mr. Flageul if he was willing to have lunch that day or to participate in a telephone conference. Mr. Flageul responded as follows: Hi Matt If the conversation is about confirming the fact that my employment is terminating today and that the MSS Group have acquired my 7 years old business for $1, then I think a phone call will be more appropriate. Otherwise and if you have a concrete offer on the table to convey on behalf of the MSS Group then I'll be in Williamstown for 12:30pm. Please let me know either way. 159 Mr. Barker replied to say he would meet Mr. Flageul at 12:30pm. There is a dispute about what was said at this meeting. Mr. Flageul says in his first affidavit that Mr. Barker made an offer on behalf of WeDrive to engage him as an independent contractor to "perform the same or substantially the same services as my employment" with an annual service fee of $150,000. The language used in the statutory test in s. 358 of the F.W. Act is "to engage the individual as an independent contractor to perform the same, or substantially the same, work". The similarity of language is striking. It immediately leads me to doubt whether Mr. Barker made the alleged offer. Mr. Flageul says in his affidavit evidence that he accepted the offer. But there is contemporaneous evidence from Mr. Flageul that if any offer had ever been made to him, he declined it. In an email dated 29 January 2018 sent to Mr. Barker, and entitled by Mr. Flageul as "Consulting Opportunity with WeDrive", he wrote: Thank you for your offer of consultancy work for WeDrive. After careful consideration, I am going to decline the offer. (My emphasis.) 160 For the reasons given below, I have some misgivings about this email. In any event, the email had attached to it an invoice for work that Mr. Flageul alleged he had undertaken on 23 and 24 January 2018. Mr. Russell gave evidence on his re-examination that this invoice was processed simply because he "didn't see any point fighting" over $1,500. I accept his evidence. I do not consider that any payment made pursuant to the invoice is indicative of any offer having been made or accepted on 22 January 2018. 161 About two weeks later, on 14 February 2018, Mr. Flageul sued WeDrive in the Fair Work Commission alleging breach of the general protections provisions of the F.W. Act. 162 Mr. Barker disputes Mr. Flageul's evidence concerning the luncheon meeting held on 22 January 2018. He gave evidence that Messrs. Mace and Russell had asked him to meet with Mr. Flageul to discuss whether he would be interested in working for M.S.S. Transport, as they both thought that Mr. Flageul might provide something that might be of value to the business during a handover period. Mr. Barker says that he had no instructions to make any offer of employment and that he did not make such an offer. He also never offered Mr. Flageul a consultancy to "perform the same or substantially the same services as my employment." At the meeting he said that Mr. Flageul appeared "angry and upset." He said that Mr. Flageul said that he wanted no further involvement with WeDrive. Nonetheless, Mr. Flageul asked, according to Mr. Barker, how much he would be paid if he were to work for M.S.S. Transport. Mr. Barker said he would need to check this. According to Mr. Barker, as Mr. Flageul appeared quite angry he asked Mr. Flageul to "go away and think about" whether he wanted to be involved with M.S.S. Transport. Mr. Barker says that Mr. Flageul told him at this meeting for the first time that he suffered from anxiety and depression. 163 On 23 January 2018, Mr. Flageul emailed Mr. Barker. He wanted the "latest P & L" and projections. He wrote that he had a number of measures in mind and that "[t]hese recommendations will sign off the start of my job as consultant as of today." Mr. Barker was surprised by the use of the word "consultant". He forwarded this email to Mr. Russell and wrote: I take it the idea he is a consultant is because of the expression "consultancy agreement" not something that has been promised by anyone else in the Group?? The foregoing email is clear evidence that no consultancy had been offered to Mr. Flageul on 22 January 2018. 164 In his cross-examination, Mr. Barker was asked about this email. The exchange was as follows (the reference to the "lunch" is described above): Now, is it the case that you understood on 23 January 2018 that Mr Flageul was actually doing some work for WeDrive?---To be honest I remember being pretty surprised by the email because he didn't come back to me on anything about - because we left that lunch with him wanting to speak to Steve Mace before we regrouped. The consultancy agreement; I don't know where he got it from and that's why I wrote that line to take it the idea he thinks he's a consultant because of the expression consultancy agreement. I didn't know where it come from. So the day before I had a meeting with him it was like - it was like I had missed a whole step and that's why I was asking Chris Russell what - you know, what was going on. Has someone, since my lunch, had a conversation with Yan. I didn't understand it. I don't know why - why we keep talking about the consultancy side of things when we just did not get there. We did not get there in that - - - In the circumstances, I accept the truth of the foregoing answer. 165 In another email sent by Mr. Barker to Mr. Flageul on the same day (23 January 2018), he wrote that "[i]ts not signed off". He also wrote that he would discuss with Mr. Flageul the "role itself and expectations" the next day. During his cross-examination on this email, Mr. Flageul said that the "sign-off" was limited to pay and probably greater clarity around expectations and duties. However, he conceded that he never got certainty as to what his role as a consultant would have been. It was then put to Mr. Flageul that the contention that he had entered into an agreement with WeDrive on 22 January 2018 to be an independent consultant was inconsistent with a statement he gave in his Fair Work Commission proceedings. The statement said: In January, MSS Group had offered me to start working for WeDrive as a contracted consultant as of 23/01/18. Given the circumstances and despite the financial hardship I was getting into, I decided to not accept this offer and stopped any work for WeDrive as of 25/01. (My emphasis.) 166 The foregoing appears to be inconsistent with Mr. Flageul's claim that he had already accepted the offer that he contends was made by Mr. Barker on 22 January 2018. During the cross-examination of Mr. Flageul the following exchange took place: The document you're looking at, at the moment; court book page 444 [being Mr. Flageul's Fair Work Commission Statement]. What you said in that document was that you did not accept the offer of consultancy?---And it says on 25th that - - - Yes. But I'm not asking you about the date, Mr Flageul. I'm not asking you about the date. What you said there is that you did not accept the offer of consultancy. And what you say now is that you did. And what I say to you is they can't both be true; which one do you now say is true?---Okay. So I will state that I accepted on the 22nd and I declined on the 29th. Is that satisfactory to you? 167 With respect, I do not find Mr. Flageul's answer to be "satisfactory." In his cross-examination, Mr. Flageul also asserted that Mr. Mace made him an offer to become a consultant on 23 January 2018 during a "very heated conversation", and that there was some sort of agreement at the end of that conversation that he would be working as a consultant. This contention did not appear in any of the five affidavits Mr. Flageul had filed in the present proceedings that were admitted into evidence, and had not been pleaded. Mr. Flageul did not know why this was so. In his first affidavit, Mr. Flageul said that during this conversation he told Mr. Mace that he wanted his shares back and that he did not want to be involved in an attempt to commit insurance fraud. He said that Mr. Mace said he would run him into the ground and chase him "on and off record", and that he had started "world war 3". Mr. Mace denied that he had threatened Mr. Flageul. Instead he said that Mr. Flageul yelled at him. Mr. Mace claims that he told Mr. Flageul that if the deal with Crown Perth were to go ahead this would offset the loss he had made from his investment in WeDrive. This angered Mr. Flageul who, Mr. Mace claims, said he was a "street fighter from Marseille". He said Mr. Flageul yelled at and threatened him. Mr. Mace says he hung up the phone. Mr. Flageul denies that he shouted at Mr. Mace, denied that he had been a "street fighter" and said he had never lived in Marseille. Once again, Mr. Flageul sought to corroborate his evidence with his own typed up note of what had occurred, which was unsigned and did not record the date of preparation. I place no weight on it. 168 In a subsequently affirmed affidavit, Mr. Flageul denied that he had yelled at Mr. Mace. But he made no mention of any job offer. When pressed about these inconsistencies he said the following: And, nonetheless, it's your evidence that, in fact, the offer that you accepted was made on 23 January; that's what you're saying now, isn't it? I'm not asking you to look at anything, Mr Flageul. You've just told me that an offer was discussed with Mr Mace at the conclusion of his conversation with you at 7 am on the morning of 23 January. And what you've just told me is that that offer that Mr Mace made that you accepted?---No, not only, there was also the 22nd. On the 22nd I did not - I did not accept the conditions and that's what ..... that there's an - this, at the time I got a five, but what I'm agreeing with you is that yes, on 23rd, without being explicitly talking about it, that the fact that I was going to carry out some work was agreed. Again, I was not impressed with this evidence. 169 It is difficult to sort out which of these versions I should accept. It may not matter. For the moment, I think they were both angry and probably both shouted at each other. Mr. Mace probably threatened to sue Mr. Flageul. Mr. Flageul probably did say that he was, or was like, a street fighter from Marseille, an unusual description which is unlikely to have been made up by Mr. Mace. 170 I certainly do not accept that Mr. Mace made an offer of a consultancy to Mr. Flageul during their conversation. As already mentioned, this was first raised by Mr. Flageul in the virtual witness box. It had never been suggested before that this had occurred in any of Mr. Flageul's affidavits admitted into evidence. 171 In a further affidavit affirmed by Mr. Flageul, he disputed Mr. Barker's evidence concerning the meeting held on 22 January 2018. He disputed that there had been no effective "handover" and said he worked over Christmas and on New Year's Eve for WeDrive and had taken only seven days of annual leave. 172 Mr. Flageul also exhibited a series of text messages between himself and Mr. Barker. They reveal the presence of what appears to have been a good working relationship between these two individuals. For example, following Mr. Flageul's termination, Mr. Barker sent him a text on 21 December 2017 and relevantly said: "[w]ell done and sorry about today am here for you mate." Mr. Flageul sent a text back the same day asking a question about where WeDrive was going to sit within the M.S.S. Group. He then said "I understand I'll be working with/for you, which is what I want." Mr. Barker replied and amongst other things said "[l]ooking forward to working with you mate. Hope you are ok." Mr. Flageul replied: Getting there :) thanks and have a good night. It was a long day for you too. Cheers 173 The very next day (22 December 2017), Mr. Flageul texted Mr. Barker in the morning to report, amongst other things, that the sales revenue for WeDrive in Melbourne the previous night had been $2,700. He wrote that he was about to meet BMW in 20 minutes to discuss a draft proposal. Mr. Barker replied: "[a]wesome well done matey!" In another text sent on the same day by Mr. Barker (apparently from a hospital bed), he wrote to Mr. Flageul: "[s]tay positive. Let's make a huge success of the whole thing and look back at this week as a blip on the way to success." On 23 December 2017, Mr. Flageul texted Mr. Barker to see how he was going and wishing him a "good Christmas." Mr. Barker responded with an explanation of his back troubles. The text ended with Mr. Barker saying: "hope you are ok mate". Similar texts were exchanged over late December 2017 including an update from Mr. Flageul about meeting the C.E.O. of Crown. 174 After the meeting on 22 January 2018, Mr. Flageul texted Mr. Barker to inquire as to whether there had been any news from Messrs. Mace or Russell. Mr. Flageul said he was "eager to get a closure". The need to obtain news from Mr. Mace is consistent with the following exchange which took place when Mr. Barker was cross-examined: And you want him to discuss the matter tomorrow, meaning tomorrow 24 January and you say that in your - towards the bottom of page 3489?---Yes, because we left the lunch ambiguous as to what was going to happen next and the next thing I get is this email with Yan saying he wants to do this and sign off his job as consultant and I was like - well, hang on. (1), it has not been signed off yet, and (2), there seems to be a step missing between the way lunch was left and getting this note. I was pretty confused but then, you know, with respect, I did get quite confused a lot dealing with Yan. Is it the case that the main uncertainty, in terms of any discussions about Mr Flageul's future, related to matters such as his rate of pay or is it wider than that?---No. I mean, what Yan kept saying at the lunch was that he had to have a conversation with Steve and he wouldn't tell me what it was about and he kept saying I've got to have a conversation with Steve before we go any further, and so it just didn't get anywhere. Yes?---So (1), Yan did not have a clear idea of what he wanted to do, and (2), that job was not signed off, or any role be it under any flavour. It just wasn't signed off. So the idea that an offer was made is just - is just incorrect. 175 On 23 January 2018, Mr. Flageul sent a text to Mr. Barker which contained the following: When are you free for a chat? I need to ascertain my role as a consultant with a view to start now with "big budget cut measures" recommendations I want to run past you first in order to dramatically improve the P&L over the next month or until we get these Crown and BMW deals sealed. 176 On 28 January 2018, Mr. Barker texted Mr. Flageul and offered to meet with him. Mr. Flageul responded with a reference to his mental health, as follows: I really need to know what is happening to me. Nothing in writing and my position is even more precarious than it was a month. No one knows what's going on and I keep being addressed as the CEO by contractors, partners, etc when ago I'm officially without a job or a company. You will appreciate it's impossible for me to keep living like that as it is seriously affecting my mental health. (My emphasis.) 177 Mr. Barker responded and, amongst other things, wrote that there would be "clarity" about Mr. Flageul's position in three days' time. Mr. Barker also wrote that he had offered "clarity last week but you made it subject to certain conditions, not me." Mr. Flageul replied by acknowledging that Mr. Barker had been very clear on what he could control and offer. In cross-examination, it was put to Mr. Barker that the reference to "clarity" concerned an offer of consultancy that he had made on 22 January 2018. Mr. Barker denied this. He explained what he meant in the following exchange during his cross-examination: Yes?---I needed to speak to Chris because I was - I was only really doing this as a favour to the group. I needed to speak to Chris to see if there was an appetite to keep Yan on, and then I wanted to meet with Yan and just see what - whether there was an appetite for him to stay. So I don't - I don't know where this consultancy thing has come from. The point of my lunch with Yan was to find out whether there was an appetite for him to continue, and a handover period to help us with these supposedly amazing opportunities that turned out not to be of any weight at all. And that was the tone. I wouldn't have been able to make the decision there and then, so any idea that he was offered anything - contract, employment, anything - just isn't actually true. And what is more, during that engagement the first thing Yan said was that he wasn't going to make any decisions until he had spoken to Steve Mace. So the idea that he was offered anything in the lunch is just not true. Because, (1) I just didn't have the authority to do so, and, (2) Yan would not allow the conversation to even happen. I mean, we - you know, it was fairly awkward. He looked pretty stressed out. His phone was in the middle of the table, so I didn't know if I was being recorded or - it was just a very stilted encounter. I have no reason to doubt the truth of the foregoing answer. 178 The foregoing exchange of text messages does not support in any way Mr. Flageul's contention that he accepted an offer of consultancy on 22 January 2018 and that he worked pursuant to that offer on 23 and 24 January 2018. Rather, they show that the parties failed to reach any agreement on a position for Mr. Flageul going forward. 179 The texts also show that Mr. Flageul largely retained, and hoped to retain, a good working relationship with Mr. Barker. Importantly, they also show that Mr. Flageul was thinking rationally. 180 For the foregoing reasons, and on the balance of probabilities, I find that Mr. Flageul has not proved that an offer to become an independent contractor for WeDrive was made by either Mr. Barker on 22 January 2018 or by Mr. Mace on 23 January 2018. Moreover, even if such an offer had been made, I am more than satisfied that it was not to take on the same, or substantially the same, work as that which Mr. Flageul had performed as C.E.O. of WeDrive. Rather, the evidence shows that in late January 2018, WeDrive was generally interested in employing Mr. Flageul, but this had never resulted in the making of any legally efficacious offer capable of acceptance by him. As Mr. Flageul conceded during his cross-examination, he never got certainty as to what his role as a consultant might have been. In these circumstances, I also find that the contention that he received an offer on 23 January 2018 was a recent invention. I further find that Mr. Flageul's email of 29 January 2018 was a contrivance, or was premised on a fundamental misunderstanding on Mr. Flageul's part as to what had occurred. He had not received any offer from WeDrive that he could validly have refused to accept. 181 After 29 January 2018, Mr. Flageul ceased to have any more involvement with WeDrive as an employee. 182 On 30 January 2018, Mr. Mace sent an email to Mr. Flageul stating that Mr. Flageul had now been removed as a director of WeDrive. Earlier, the M.S.S. Group C.F.O. had sent a standard share transfer form to Mr. Flageul for him to execute. There was a dispute before me concerning whether Mr. Flageul had ever resigned as a director of WeDrive or had ever executed the share transfer form sent to him. This was not seriously pressed, and it was not positively asserted that Mr. Flageul remained a shareholder and a director of WeDrive. There was also some dispute about the quantum of the investment made by Mr. Mace indirectly into WeDrive. It was said he had only invested $200,490 instead of $400,000. However, WeDrive's bank account records the receipt of two payments of $200,000. It appears that some of Mr. Mace's investment was then re-characterised as a loan at a subsequent date. But I accept that Mr. Mace forgave that loan. He thus made a loss of $400,000, or near this figure, by investing in WeDrive. In any event, what is important is that Mr. Mace invested and lost a substantial amount of money as a result of his association with Mr. Flageul and WeDrive. 183 There was also an attempt to rely upon a profit and loss statement attached to WeDrive's income tax return for the year ended 30 June 2018. It disclosed a profit of $18,890.12. Messrs. Mace, Barker and Russell were asked questions about this return. If this evidence was led to show that the shares in WeDrive were worth more than $1, then I consider it to be insufficient. The fact is that both Messrs. Mace and Taylor were content to sell, and did sell, their shares for the same price at which Mr. Flageul sold his shares. Mr. Flageul did not lead any expert valuation evidence which might have suggested that the price for which the shares were sold was not an arm's length price. Moreover, the accounts for the period from 1 September 2017 to 30 November 2017, which were not successfully contradicted, showed WeDrive had accrued substantial losses. The losses support the fairness of the price for which the WeDrive shares were sold. 184 An attempt was also made to establish that WeDrive's business has since become, in some way, of value to the M.S.S. Group. Mr. Flageul sought to establish that attempts had been made by the M.S.S. Group to exploit WeDrive's goodwill by the incorporation of WeLift Pty Ltd, WeSuite Pty Ltd and WeService Pty Ltd and to exploit the app with negotiations alleged to have been held with a company called House Call Doctor. These attempts went nowhere. Mr. Mace gave evidence, which I accept, that House Call Doctor was invited to take up the trading losses of WeDrive from an agreed point in time, which would then allow the company to buy 49% of WeDrive for $1. After investigation, he said, the owners of House Call Doctor formed the view that it would cost too much money to develop WeDrive's technology "with its holes". They walked away from this deal. I have no reason to doubt the accuracy of Mr. Mace's account of what occurred. Mr. Russell gave evidence that the businesses of WeService Pty Ltd, WeLift Pty Ltd and WeSuite Pty Ltd never traded but rather sat idle because the app "didn't work". He said that these companies would have been "shut down" but for the proceedings before me. I also accept Mr. Russell's evidence.

The Alleged Complaints or Inquiries 185 Between September 2017 and 21 December 2017, when Mr. Flageul's employment as C.E.O. was terminated, he claims that he made a series of complaints or inquiries for the purposes of s. 341 of the F.W. Act. In each case, what occurred was said to be either a complaint or an inquiry or both a complaint and inquiry. This lack of precision is regrettable. Whilst it may be possible to characterise something as being at the same time both a complaint and an inquiry, ordinarily something said only to be a complaint will not be capable of also being characterised as an inquiry; similarly something said only to be an inquiry is also unlikely to be capable of also being characterised as a complaint. 186 The first alleged complaint or inquiry (the "first alleged complaint/inquiry") was said to have taken place on 16 September 2017. Mr. Flageul described it in the following terms (the "First Respondent" being WeDrive): On 16 September 2017, I verbally complained to and/or enquired with Gregg Taylor, the Third Respondent as to the payments made by the First Respondent to Dave Nicholson (alleged contractor of the First Respondent) that in the absence of a consultancy agreement between the First Respondent and Dave Nicholson, or being held liable to any Key Performance Indicators, that I be provided with reasons as to the total payment made by the First Respondent to contractors for the period of 12 September 2017 to 30 September 2017 in the total sum of $22,569.29… 187 Mr. Taylor gave evidence admitting that he had a conversation with Mr. Flageul to discuss the payments made to Mr. Nicholson in September 2017. However, his recollection is that Mr. Flageul's concern was that Mr. Nicholson was getting paid more than Ms. O'Donovan. Mr. Taylor discovered that Ms. O'Donovan had been accessing WeDrive's Xero accounting system and thus could ascertain the quantum of the payments made to Mr. Nicholson. Mr. Taylor was of the view that Ms. O'Donovan should not have had access to those financial records. 188 At this time, Mr. Flageul sent an email, at least to Mr. Taylor, asking for a copy of Mr. Nicholson's contract "ASAP." In his evidence, Mr. Taylor said that he did not think that Mr. Nicholson was ever asked to enter into a contract with WeDrive. He was just a consultant. Mr. Taylor responded to Mr. Flageul by saying "Silly email mate." Mr. Taylor was cross-examined about his use of the word "silly." He repeated his explanation about why Mr. Flageul wanted to inquire about Mr. Nicholson and said the following: Yes. Why did you say it was silly?---Because the explanation given by Yan for the concern - he said, "Look, okay, what it's" - I said - I picked up the phone and said, "What's this? Explain the - the problem please, Yan." And his explanation provided was, "My de facto partner, Ms O'Donovan, has seen how much he has - Mr Nicholson is being paid. She is very upset and wants to understand why he is getting the same amount of money as her." My response was that that is confidential information that a staff member should not see, and then despite that, which I thought was a really serious breach of confidentiality and process, I went on to explain the basis and the rational for Mr Nicholson's remuneration. And at the conclusion of that discussion it was agreed that, "Yes. It's all right. I understand, mate. Let's just leave it," was what I was communicated by Mr Flageul. So that is very important context, and it's - I think can you please just note that event when we - I'm sure we will talk about access to financials and other things later in your question. I am satisfied that Mr. Flageul wanted to obtain information about Mr. Nicholson's salary and conditions of employment. 189 The second alleged complaint or inquiry (the "second alleged complaint/inquiry") was said to have taken place on 26 September 2017 when Mr. Flageul sent the following email to Ms. Felicia Ellis, an employee of WeDrive: Hi Felicia, Can you please let me know what that expense is for? ($11,271.74 to Gregg Taylor on 20/09) Thanks Best regards Yan 190 The third alleged complaint or inquiry (the "third alleged complaint/inquiry") took place from 29 September to 5 October 2017 and concerned certain further payments made to Mr. Nicholson. Mr. Flageul's evidence was as follows: On 29 September 2017 and 5 October 2017, I verbally complained and/or enquired with Gregg Taylor, the Third Respondent as to the payments made by the First Respondent to Dave Nicholson that in the absence of a consultancy agreement between the First Respondent and Dave Nicholson (associate of the Second Respondent and Third Respondent), or being held liable to any Key Performance Indicators, that I be provided by reasons [sic] as to any payment made by the First Respondent to Dave Nicholson or other alleged contractors. The Third Respondent said words to the effect that this had nothing to do with me and I should focus on getting the technology right and getting more sales. The Third Respondent also stated that the amounts were inaccurate, and that Dave Nicholson had only been paid around $5,000 in September, which is untrue. 191 Mr. Taylor did not appear to dispute the substance of this evidence. Instead, he noted that in September 2017 Mr. Flageul asked him to pay an invoice in the sum of $19,623 from Contact Point for work he had not approved and which he did not know about. 192 The fourth alleged complaint or inquiry (the "fourth alleged complaint/inquiry") took place on 29 September 2017 following the cancellation of Mr. Flageul's WeDrive debit card by the Commonwealth Bank. The email from the Commonwealth Bank said that because the card had been lost or stolen, the Bank had placed a "stop" on it. Mr. Flageul was perplexed by this because his card had been neither lost nor stolen. Mr. Flageul sent the following email that evening to Mr. Taylor: Do you know why my WeDrive card has been declared lost or stolen when I have it in my wallet? CBA told me the request came from Steve Mace who declared the card lost or stolen and requested for it not to be reissued. (??) The card has only been used for legitimate business direct debits that needed transferred out of my personal cc (like the WeDrive Facebook campaigns) and for the booking of an interview room for Monday's interviews of the new ops manager. Thanks for getting back with an explanation. 193 Mr. Taylor replied in an email by explaining that the intention had been to issue only one WeDrive debit card to another employee of WeDrive. In other words, the issue of the debit card to Mr. Flageul had been a mistake. Apparently the debit cards issued to Messrs. Taylor and Mace had been similarly cancelled. Mr. Taylor offered to discuss the issue with Mr. Flageul the following day. This email did not mollify Mr. Flageul. He replied and relevantly wrote as follows: It would have been nice to let me know before hand rather than me finding out from the bank and worrying that my card had been hacked + as an executive director, I would assume trust would not be an issue since you told me not make any spend over $500 without your approval. (Steve is a non executive director hence no need for a card) 194 Mr. Mace then replied to this email explaining the mistake that had been made. He wrote: Yan, I'm not going to respond to your whole email but the claim I reported the cards stolen is incorrect. The bank incorrectly set up and issued 'debit credit cards'. This is a major risk to any organisation as there is no limits like normal credit cards and basically accesses and has the ability to spend all funds in the account. When I highlighted this to the bank yesterday and put them on notice they are responsible for the funds spent they obviously acted by cancelling all the cards. Gregg nor I were across their actions so your note below is disappointing. 195 This appeared to placate Mr. Flageul. He wrote back: "Thanks steve for clarifying. That now makes sense." His reply was signed off with two kisses (signified by an "xx"). Mr. Mace replied by advising Mr. Flageul to "relax brother … there is no ulterior motives ... Just simply to make $$$". Mr. Flageul responded with three emoji in the form of a thumbs up. Before me, Mr. Mace explained that his bank manager at the Commonwealth Bank had made the decision to cancel the cards, because the manager had realised that credit rather than debit cards should have been issued. Subsequently, Mr. Mace was informed of this decision which he approved. Mr. Mace noted in cross-examination that "on numerous occasions", he had his credit card suspended on the Bank's initiative where it considered that there had been suspicious transactions entered into using the card. But on this occasion, no one before me could explain why the Bank had sent an email saying that Mr. Flageul's debit card had been lost or stolen. I infer that the contents of this email reflected some sort of standard automated messaging service, used by the Bank, which was not capable of accurately conveying why Mr. Flageul's debit card had been cancelled. I otherwise accept as true Mr. Mace's explanation concerning why Mr. Flageul's debit card had been cancelled. I have no reason to doubt it. 196 The fifth alleged complaint or inquiry (the "fifth alleged complaint/inquiry") took place after Mr. Flageul was informed on 4 October 2017 that he and Ms. O'Donovan were to be denied access to WeDrive's Xero accounting system. The following morning, Mr. Flageul sent the following email to Mr. Taylor which was also copied to Mr. Mace: Please explain the reasons behind your decision to instruct Felicia and remove my access from accounts@wedrive.com.au and Xero without any consultation. 197 Mr. Taylor responded in a way that betrayed a degree of frustration with Mr. Flageul. He wrote that this was "getting tiring." This was a reference to Mr. Flageul sending the email to Mr. Mace. As Mr. Taylor wrote: I have sent you a separate email about your emails and communication issues, I was happy to keep that between ourselves though I will reply with Steve on the email considering you keep trying to drag him into every issue despite ongoing requests by Steve to stay out of this detail. 198 Mr. Taylor said in his email that he had only just discovered that Mr. Flageul and Ms. O'Donovan had access to the Xero system. As he was responsible for the finances of WeDrive he did not consider it appropriate for them to continue to have access. That was because he was going to be preparing shortly a "weekly management reporting data set" that would give the directors of WeDrive sufficient financial detail. He explained that directors would be given the opportunity to request more detail if they needed it. Mr. Taylor wanted Mr. Flageul to focus on developing his app and growing revenue. He wrote: I shouldn't need to justify this crap especially when you did not make me aware that you have access to the email address nor the Xero account Your role is to make sure the technology works as it was portrayed and to grow the revenues of the business. I strongly suggest you focus on this as a priority as this is how your performance will be assessed. Distractions such as these emails absolutely are not helping. I have no interest in another email chain rant on this matter. I can discuss with you on the phone at a mutually convenient time if required. 199 I have no reason not to accept Mr. Taylor's explanation for denying Mr. Flageul access to the Xero accounting system. As a director of WeDrive, with no responsibility for its finances, it made sense to limit his sources of financial information to the weekly management reporting mentioned by Mr. Taylor. 200 Mr. Flageul also contended that he complained to Mr. Mace about this issue in October 2017. Mr. Mace gave evidence that this did not occur. I do not consider that this complaint is substantiated by the email sent by Mr. Flageul on 4 October 2017 to Mr. Taylor, as Mr. Mace is only copied on that email and the text of the email is only addressed to Mr. Taylor. In the absence of any other corroborating material, I am not satisfied that Mr. Flageul has shown on the balance of probabilities that this complaint took place. In the circumstances of this case, and given my reservations about Mr. Flageul as a witness, his testimony alone is insufficient. 201 The sixth alleged complaint or inquiry (the "sixth alleged complaint/inquiry") occurred after a telephone conversation between Messrs. Flageul and Taylor on 2 October 2017. During that conversation, which Mr. Flageul says took place in the presence of his teenage son, Mr. Taylor supposedly used very intemperate language and shouted at Mr. Flageul. There is contemporaneous evidence that supports, in a general way, Mr. Flageul's account of what occurred. In an email sent by Mr. Taylor to Mr. Mace the following day, Mr. Taylor wrote that he had "really let [Mr. Flageul] have it last night and told him no more shit." In a reply email, Mr. Mace described Mr. Flageul as a "strange cat." Mr. Taylor replied again confirming that he had "ripped into" Mr. Flageul "heavily" and that he had lost his "shit." Mr. Mace replied that his "main concern" was the way Mr. Flageul treated Mr. Taylor. In another email to Mr. Taylor forming part of this exchange, Mr. Mace observed that Mr. Flageul "just freaks me … more so after his email re the credit cards." In this email exchange, Mr. Mace also observed that it appeared that WeDrive had spent $65,000 in half a month of trading, which to him seemed "very high". 202 Mr. Taylor did not deny that he had raised his voice in frustration with Mr. Flageul. He said that when he spoke to Mr. Flageul, the conversation commenced with Mr. Flageul saying "how dare you cancel my card." He asked Mr. Flageul to calm down. He did not know that Mr. Flageul's son was nearby. He nonetheless subsequently apologised to Mr. Flageul for raising his voice. He emphatically denied that he had threatened Mr. Flageul or had sworn at him. 203 I find that Messrs. Flageul and Taylor had a fiery telephone conversation. For the purposes of this proceeding, it does not matter whether Mr. Taylor also threatened Mr. Flageul and swore at him, although swearing in this country is a relatively common by-product of the losing of one's temper. 204 In any event, Mr. Flageul sent an email to Mr. Taylor which constituted the sixth alleged complaint/inquiry. It is in these terms: Gregg, Our last "discussion" was made of you shouting and swearing, throwing threats then hanging up when I was seating [sic] next to my son who overheard every word and got really distressed by it. I told you I was at home and asked you to stop swearing but there was no stopping you. I have kept this incident closed and between us although it has strongly affected me and my family. I agree, a two-way discussion is needed and I look forward to your call providing it will be conducted in a respectful and professional manner. 205 Mr. Taylor replied and said sorry. He said that Mr. Flageul's behaviour had pushed him to a point of frustration and that Mr. Flageul was one "of the few people in over 20 years" who had pushed him to such a point. He then wrote: You have a track record of not working well with business partners and we were very conscious of this and it was a real concern. I had been patient to date though I have kept emphasising things need to change fast. 206 Mr. Taylor then referred to the need for respectful and professional communications but observed that it applied "both ways including [Mr. Flageul's] emails." 207 The seventh alleged complaint or inquiry (the "seventh alleged complaint/inquiry") was said to have been made orally by Mr. Flageul to Mr. Mace on 10 November 2017, which it will be recalled, was the day on which WeDrive's board met. Mr. Flageul says he "verbally complained and/or enquired" about the payments being made to Mr. Nicholson. He says he "verbally complained and/or enquired" about payments being made by WeDrive to Mr. Taylor who, he said, had failed to meet "Key Performance Indicators" and had failed to attract new business. He also "verbally complained to and/or enquired" about him being denied access to the Xero accounting system. 208 Mr. Mace denied that any of this took place in his first affidavit. In cross-examination, he said he did not recall having the alleged conversation with Mr. Flageul. He said if it had been important it should have been raised in the board meeting and minuted. When asked if Mr. Flageul had complained to him about Mr. Taylor's behaviour, Mr. Mace readily accepted that "heat" had been "brewing" between them. Both appeared to have complained to Mr. Mace about the other. Mr. Flageul asked to be able to report directly to Mr. Mace. Mr. Mace said that he consistently responded by stating that any significant issues should be raised at a board meeting. That never took place. Mr. Mace said that the tension between Messrs. Taylor and Flageul took place in the context of three months of trading. The first month was disappointing but Mr. Mace hoped it was just an error. By month three, he said that the "results were atrocious." 209 I am inclined to find that Mr. Flageul at some point, it matters not when precisely, complained to Mr. Mace about Mr. Taylor. I am not otherwise prepared to accept that he complained about Mr. Nicholson and the Xero accounts issue. There is no contemporaneous evidence to support the making of such complaints and they are otherwise not corroborated. Having regard to my earlier observations about Mr. Flageul's evidence, I do not find his recollection, without more, to be a reliable basis for fact finding, especially where that recollection is disputed. 210 The eighth alleged complaint or inquiry (the "eighth alleged complaint/inquiry") followed a phone call on 10 November 2017 between Ms. Zeeher, an employee of WeDrive, and Mr. Flageul. During the call, Ms. Zeeher allegedly told Mr. Flageul that another employee of WeDrive had said to her that he had heard from a customer that Mr. Flageul would cease to be C.E.O. within four weeks. On the same day, Mr. Flageul sent an email to Mr. Mace. He described what he had been told. He called it an "indiscretion" that warranted "urgent action." He asked Mr. Mace to speak to the "MSS people and tell them to apply the upmost [sic] professionalism during this restructure." The reference to a "restructure", I infer, was to a proposed merger between WeDrive and the M.S.S. Group. Mr. Mace responded by telling Mr. Flageul that he would direct an investigation to take place as the allegations were "serious and unacceptable." Pending completion of the investigation Mr. Mace told Mr. Flageul to let him know "if I can assist you in calming and retaining key personnel." He otherwise gave evidence that there was no intention at that time to remove Mr. Flageul as C.E.O. within four weeks. 211 The ninth alleged complaint or inquiry (the "ninth alleged complaint/inquiry") concerned a marketing campaign for WeDrive. On 24 November 2017, an exchange of emails took place between Messrs. Flageul, Russell, Taylor and Barker. Mr. Flageul wrote to Messrs. Taylor and Russell as follows: Hi Gregg and Chris, When are Wayne and Lisa starting to work on the marketing? It's been a week since they were appointed and I have not heard from them as yet. Xmas parties' season has already started and the marketing campaigns / remarketing of existing ciustomers [sic] need to happen... now! We are losing the momentum created by the races and bear the risk of missing the boat. I don't have their contact details so I rely on you to give them mine and urgently initiate the discussions / start the campaigns. Thanks for getting back Best regards 212 Mr. Barker responded as follows: Hi Yan, I appreciate this question relates to conversations you have had pre merger but from here on in Id like you to go through me please for anything like this. Im meeting with Wayne early next week and will be clearer then. thanks 213 The tenth alleged complaint or inquiry (the "tenth alleged complaint/inquiry") was made by Mr. Flageul on 8 December 2017 in a telephone conference with Messrs. Barker, Russell and Mullins (who, as noted above, was an information technology contractor for the M.S.S. Group). Mr. Flageul states that he "complained and/or enquired" that: (a) the intellectual property rights of the "WeDrive mobile application" belonged to the First Respondent; (b) the merger between the First Respondent and MSS Group had not yet resulted in the execution of formal legal documents; (c) even if the merger between the First Respondent and MSS Group was executed, WeDrive retained all intellectual property rights in the "WeDrive mobile application"; (d) MSS Group had no proprietary interest or rights in the intellectual property of the "WeDrive mobile application" as there were no contract for consideration between the First Respondent and MSS Group, and/or MSS Group and Contactpoint; (e) the Applicant denied Christopher Russell's representation that Steven Mace, the Second Respondent owned "100% of the intellectual property" in the "WeDrive mobile application" that was made during this telephone conversation and Steven Mace, the Second Respondent had the right to dispose of the "WeDrive mobile application" or develop it for other businesses of Steven Mace, the Second Respondent; and (f) MSS Group's (an entity controlled by the Second Respondent) acquisition of the entire intellectual property rights of the "WeDrive mobile application" would be highly improper. 214 Mr. Flageul sought to corroborate the existence of the foregoing statements by exhibiting to his first affidavit his own "typed up record" of the telephone conversation. The record was unsigned and was not dated. For reasons already given, I have given it no weight whatsoever. 215 Mr. Russell accepts that he had a conversation with Mr. Flageul on 8 December 2017. But he said it concerned another issue. In cross-examination, Mr. Russell said he was only on the call for about five minutes because he was at a client meeting that had gone over time. He recalls a robust conversation during which he asked Mr. Flageul to hand over the intellectual property for the app to Mr. Mullins so that he could examine it. Mr. Russell explained that the conversation was robust because Mr. Flageul had told "multiple versions of multiple stories" about the intellectual property and Mr. Russell had been unable to "get a straight answer out of him". He said he told Mr. Flageul that if he did not hand over the intellectual property he was going to assume that WeDrive did not own it. 216 Mr. Barker does not recall if he was even on the call, and has no recollection of Mr. Flageul raising the matters set out above. 217 For similar reasons as those set out above, I am not satisfied that this complaint and/or inquiry, to use the language of Mr. Flageul, ever took place. Mr. Flageul's contested uncorroborated recollection is not, of itself, sufficiently persuasive evidence of what took place. 218 The eleventh alleged complaint or inquiry (the "eleventh alleged complaint/inquiry") took place on 18 December 2017 with an email sent by Mr. Flageul to Mr. Mace. The email was difficult to read and appeared to have been redacted or perhaps highlighted in part. In it, Mr. Flageul seemed to be forwarding another email to Mr. Mace. He states that he was not sure what Mr. Taylor was implying "when he was threatening me (again)" and questioning his integrity. This, I infer, is a reference to the heated conversation Mr. Flageul had with Mr. Taylor on 18 December 2017, which I have earlier described. Mr. Flageul then appears to give an explanation about WeDrive's failure to own all the necessary intellectual property. The email finishes with a commitment from Mr. Flageul to "make sure the WeDrive operations and the technology run smoothly…" For completeness I reproduce the email as best as I can as follows: Hi Steve, Just forwarding this email to you so you see I only got the email from [Mr. Taylor] requesting the codes access at 11:17 AM this morning. If I had been Cced in this email on Saturday when sent by [Mr. Taylor] I would have done the same on that day. I am not sure what [Mr. Taylor] was implying when he was threatening me (again) over the phone, questionning my integrity and ... the threats. Between you and me, if [Mr. Taylor] had made this request for codes' access at the time of the due diligence we would not even … I just don't know why he waited for [Mr. Russell] and [Mr. Mullins] to jump in last week to realise and ask me why we did not have the codes. To my understanding: Heather was only trying to protect the interest of WeDrive, her client (and NOT my interest) and I made it clear to [Mr. Mullins] last week. The issue was that people external to WeDrive were making the request ([Mr. Mullins] and [Mr. Russell]) and [Ms. Maloney] was not comfortable … I have never requested access to the codes to [Ms. Maloney] which in all hindsight was probably a mistake from an IP ownership … case it would compromise them. To sum up and make it perfectly clear to you and [Mr. Russell]. I have no incline or interest in withholding anything from you or anyone else at MSS. I believe [Mr. Mullins] should be the only person who … In the meantime my focus is to make sure the WeDrive operations and the technology run smoothly until we can start putting … I hope this clarifies and I look forward to catching up with you on Wednesday or Thursday in Sydney. 219 It was not clear to me whether the foregoing telephone conversation between Mr. Flageul and Mr. Taylor formed part of the eleventh alleged complaint/inquiry. On balance, I think it did not. On this occasion in his affidavit, Mr. Flageul did not use the language of "complaining and/or inquiring" to describe the telephone conversation.

The Mental State of Mr. Flageul in 2017 220 In his first affidavit, Mr. Flageul asserted that he suffered from depression and anxiety. He said that his symptoms were exacerbated following his dismissal. He described those symptoms in the following way: (a) inability to make decisions; (b) sleeplessness and fatigue; (c) forgetfulness and lack of concentration; (d) procrastination over simple tasks; (e) not leaving the house and refusing to participate in social events; and (f) feeling worthless. 221 Mr. Flageul said he saw his treating doctor, Dr. Myint Maung, in January 2018 when it was decided that he should increase his dose of antidepressants from 50 m.g. per day to 75 m.g. per day. He also said that he saw a psychologist, Mr. Don Burnard, in May 2018. Evidence from Dr. Maung and Mr. Burnard is referred to further below. 222 In his third affidavit, Mr. Flageul asserted that Messrs. Mace, Taylor and Barker were aware that he suffered from, and had a history of, depression and anxiety. He said that he had been very clear and open about this. However, he was unable to point to any contemporaneous evidence to support his assertion. From my review of that contemporaneous evidence, the first expression by Mr. Flageul of his mental challenges is in a text sent to Mr. Barker in late January 2018, and which I have set out above. Mr. Barker also agreed that Mr. Flageul disclosed his mental health problems to him at their lunch meeting in late January 2018 for the first time. 223 During the cross-examination of Mr. Mace he denied being told in May 2017 by Mr. Flageul that he had a history of depression and anxiety. He said he was unaware of any illness. He denied having knowledge of Mr. Flageul's mental state from May 2017 to December 2017. Mr. Mace was asked if he thought that Mr. Flageul was "abnormal." Mr. Mace did not agree with that proposition, but stated that Mr. Flageul "was quite erratic sometimes." He also said he would get "hot" and "go off the handle and then he was calm." During their cross-examination, it was not put to any of Messrs. Taylor, Russell or Barker that Mr. Flageul suffered from anxiety or depression. 224 I am not satisfied that Mr. Flageul disclosed to Messrs. Mace, Taylor, Russell or Barker that he suffered from depression and anxiety in 2017. In the case of Mr. Barker only, in January 2018, he told him that the uncertainty concerning his employment was seriously affecting his mental health. It follows, that I also find that none of Messrs. Mace, Taylor, Russell or Barker actually knew about Mr. Flageul's depression and anxiety in 2017, assuming he was in fact so suffering. 225 Mr. Flageul sought to support his case with an expert opinion prepared by Mr. Horne, who is a clinical psychologist. He was asked to answer the following long series of questions (I have removed applicable headings): (a) What is Mr Flageul's background, including family, social, occupational history and current situation? (b) When did Mr Flageul first experience mental health difficulties? (c) What were these mental health difficulties? (d) What has been the course of these mental health difficulties? (e) Have Mr Flageul's mental health difficulties ever been sufficient for diagnosis of a diagnosable disorder? If so, what was the diagnoses [sic], by reference to DSM-V diagnostic criteria. (f) Did Mr Flageul ever seek treatment, either psychological, psychiatric, or medication, for his mental health difficulties? Please include details of medication he was prescribed, or he purchased over the counter, to assist. If his medication changed over time please include details, including dose and type of medication. (g) At the start of, and during 2017, what were Mr Flageul's mental health difficulties? In particular, please detail the impact on him of any such mental health difficulties in the following respects: (i) emotionally; (ii) cognitively; (iii) socially; (iv) occupationally. (h) How, if at all, did the changes in Mr Flageul's work arrangements in 2017 affect his mental health difficulties? Did these changes exacerbate/aggravate his mental health difficulties? Please explain in detail. (i) How, if at all, did Mr Flageul's mental health difficulties in 2017 (if any) impact his decision making? (j) What, if any, would have been the manifestations, signs and symptoms of Mr Flageul's mental health difficulties (if any) during 2017? (k) Please outline, in detail, Mr Flageul's description to you of the circumstances leading up to and including his signing of the Heads of Agreement, in December 2017. (l) Did those circumstances: (i) aggravate or otherwise affect Mr Flageul's mental health difficulties, if any?; and (ii) affect Mr Flageul's ability to process information clearly, and if so how? (m) Please state, in detail, your opinion in relation to Mr Flageul's mental state and mental health on 21 and 22 December 2017. (n) In particular, on 21 and 22 December 2017: (i) was Mr Flageul's ability to make decisions of a serious nature, with serious financial implications, affected? If so, how? (ii) was Mr Flageul's ability to clearly consider the implications of his decisions for his and his family's future affected? If so, how? (iii) was Mr Flageul at risk of being taken advantage of? (iv) what, if any, would have been the manifestations, signs and symptoms of Mr Flageul's mental health difficulties (if any) on 21 and 22 December 2017? (o) In your clinical practice would you have concerns for a person with the degree of mental health difficulties as Mr Flageul was experiencing in 2017 when making a decision of a serious nature? (p) Please explain the aftermath of Mr Flageul's decision to sign the Heads of Agreement in December 2017. Please detail this having regard for mental health difficulties, treatment needs and how these changed after the signing of the Heads of Agreement. 226 The respondents objected to the admissibility of this report. They submitted that Mr. Horne was not qualified to give an expert opinion concerning Mr. Flageul's mental state at the time of his diagnosis, let alone an opinion about his past mental health. The respondents relied upon the decision of Batt J.A. in R v. Kucma (2005) 11 V.R. 472. That case concerned the defence of mental impairment under s. 20 of the Crimes (Mental Impairment and Unfitness to be Tried) Act 1997 (Vic.). Reports were obtained from a clinical psychologist concerning the mental impairment of a person. Justice of Appeal Batt decided that the reports were not admissible. At 482 [26] his Honour said: In my opinion, the field of expertise responsive to the matters raised by s 20 of the 1997 Act is psychiatry, the discipline concerned with mental health, and does not include psychology. The experience of counsel for the respondent that it has always been psychiatrists who give evidence in cases of insanity or mental impairment tends to support this opinion. 227 Mr. Horne holds qualifications in the field of psychology and has extensive experience in that field. He does not, however, appear to have a medical degree and is not a psychiatrist. There are, however, other difficulties with his report. He was asked a number of questions which did not ask him to form any opinion based upon his specialised knowledge. For example, his answer to the first question asked of him set out above, was a matter for lay evidence. I would place no weight on the answer given to it. A number of the other questions fall into this category. 228 It is otherwise unnecessary to consider whether I should follow Batt J.A. in Kucma, although, if it had been necessary to do so, I would have deferred to a judge of such seniority at the time of that decision. That is because it is impossible to give weight to Mr. Horne's opinions as they are based upon, and assume the correctness of, what Mr. Flageul said to him over the course of two assessments of him. In that respect, Mr. Horne assessed Mr. Flageul on 27 February and 12 March 2020, more than two years after the events of 2017. For example, Mr. Horne records Mr. Flageul's version of the events leading up to the termination of his employment, and makes his assessment of Mr. Flageul based on that version. Thus, his report records the following: He stated that on lst September 2017, he was told that he was now the CEO of WeDrive but as an employee and an Executive Director of the Board. He stated that Steven Mace was also an Executive Director and that Gregg Taylor the Chairman of the Board. He reported that Gregg Taylor started to argue with him about the finances of the company. By late September 2017, he reported he was denied access to any financials and to the company's bank accounts. He reported his mental health began to deteriorate and he saw his General Practitioner, Dr Myint Maung, who prescribed Sertraline and Valium. He reported that in mid-October 2017, he had a "massive" abusive exchange with Gregg Taylor, who was "yelling, swearing, threatening and screaming" over the phone while his son, Kieran, was present and overheard everything. Mr Flageul stated he made a formal complaint in writing to Steven Mace and was assured Gregg Taylor would be removed (from the Board) by December 2017. In or around late October 2017, meetings were held in Sydney to consider a merger proposal between WeDrive and MSS Transport. At this point, Mr Flageul felt that his prospects were improving; but, he said he noticed that on the Powerpoint presentation about the merger, his name was not listed. However, he said he was reassured all was okay. Mr Flageul stated that by mid-November 2017 this merger was a done deal and Matt Barker became the shadow CEO and Mr Flageul was accountable to this gentleman. This apparently led to Mr F1ageu1 to make a complaint about MSS acquiring Intellectual Property in early December 2017. 229 Based on the foregoing, and based upon certain tests, Mr. Horne concluded that in 2017 Mr. Flageul did "have severe anxiety, depression and stress effects." However, Mr. Horne did not know that, for example, Mr. Taylor denied that he had yelled or screamed at Mr. Flageul or had threatened him. Mr. Horne assumed that Mr. Flageul's characterisation of this event was that it was "abusive." Mr. Horne also accepted that Mr. Flageul made a complaint about M.S.S. acquiring intellectual property in December 2017. But I have found that Mr. Flageul did not prove that this complaint had ever been made. I have also found that the merger was no "done deal." 230 Mr. Horne's assessment of the impact of the termination of Mr. Flageul's employment was also based on a necessarily uncontradicted description given by Mr. Flageul of what had taken place on 21 December 2017. Thus, his report records the following: He said that upon his arrival, he was told, out of the blue, that he was fired. He reported this felt "like a bullet to my head". He stated he was given ten minutes to "think it through". He recounted they (Steven Mace and himself) moved to another meeting where he was told he would be re-employed as a contractor, to do the same job. On the 21st December 2017, he reported Steven Mace also contacted him with a proposition and that he was not to tell anyone for a month. He said this sent him, "down a rabbit hole, to deep depression". However, he said Steven Mace said that "things will work out". Mr Flageul reported that he flew back to Melbourne. He said he felt numb, and that his brain was buzzing (like a blast from an explosion). Also, everything seemed to be in slow motion, seemed unreal and that it was like watching himself in a horror movie, and that he was in tears. He also said that Gregg Taylor had been bullying him; but that Steven Mace had told him that Gregg Taylor would be removed, only to learn that it was himself that was fired. 231 The difficulty with the foregoing is that I have largely not accepted Mr. Flageul's recollection of the events of 21 December 2017. For example, I have not accepted that he received an offer to do the same job, but as a contractor. I also have some difficulty accepting that Mr. Flageul was as traumatised as he suggests he was on 21 December 2017. I have no doubt Mr. Flageul was upset following the termination of his employment, but the text messages he sent to Mr. Barker on that day showed that he appeared to be composed. It will be recalled that he said in one text that working for Mr. Barker was what he had wanted. Mr. Horne never saw those texts. 232 Mr. Horne said he had also relied upon certain medical reports supplied to him. One was entitled "GP Mental Health Care Plan" which had been prepared by a Dr. Vishal Mahajan and dated 24 February 2020. However, that very brief report records that Mr. Flageul's "Past History" did not include any mental health issues from 2015 to 2018. At its highest, it records in 2018 that Mr. Flageul was experiencing light-headedness. In a one page letter from Dr. Myint Maung dated 1 May 2018, it is stated that Mr. Flageul had been suffering from depression and anxiety for three years which had become severe since late December 2017. Finally, a one-page letter that was stated to have been prepared for the Fair Work Commission on 8 May 2018 from Mr. Don Burnard stated that Mr. Flageul had been suffering from depression and anxiety for the "last three years." It is difficult to discern the extent to which Mr. Horne relied upon these reports. I am troubled by them because they are very brief and do not really identify the basis for what they say. They are generally conclusionary in nature. They may in part, and again, only record what Mr. Flageul said to each of them. In such circumstances I cannot give them any real weight. 233 It follows that I do not think I can give any weight to Mr. Horne's opinions. For example, Mr. Horne gave the following opinions: In particular, on 21 and 22 December 2017: i) Was Mr Flageul's ability to make decisions of a serious nature, with serious financial implications, affected? If so, how? Yes, he would not be able to make decisions of a serious nature, with financial implications because of an inability to think clearly and logically due to the mental shock and associated symptoms described above in sections (g), (h), (i), (j) and (k). ii) Was Mr Flageul's ability to clearly consider the implications of his decisions for his and his family's future affected? If so, how? For the same reasons as in sections (m), (n) and (i) his chief concern would be how to be safe from these threats. iii) Was Mr Flageul at risk of being taken advantage of? In the mental state of acute shock and stress and dissociation it would not be difficult to take advantage of Mr Flageul. Subsequent findings strongly support evidence he was indeed disadvantaged and pushed to do things because he was under duress. iv) What, if any, would have been the manifestations, signs and symptoms of Mr Flageul's mental health difficulties (if any) on 21 and 22 December 2017? Because Mr Flageul was, according to his account, in a state of severe shock (he would believe he had so much to lose financially and in life generally) that he would appear frightened, and if in a deep depression, as he claims, would be unable to think and act in a problem-solving manner. I found evidence that his presenting symptoms post 21st and 22nd December 2017, met the criteria for a DSM-V diagnosis of Acute Stress Disorder. 234 Each foregoing conclusion is dependent upon what Mr. Flageul said to Mr. Horne, and for the reasons I have already given, Mr. Flageul's version of the events which took place in 2017 is not sufficiently accurate. 235 The respondents also relied upon expert evidence. Associate Professor Peter Doherty is a registered medical practitioner and a consultant psychiatrist. He examined Mr. Flageul and was also asked to answer a series of questions. Those questions, and the Professor's answers, were summarised in his report as follows: Question 1. In your opinion, did the applicant suffer from any diagnosable psychological disease(s) and/or disorder(s) in the period prior to 21 December 2017? If so, please described, by cross-reference to: (i) the material in your brief; and/or No, he did not (ii) the information supplied to you by the applicant: The history given to me by the applicant does not indicate that there has been a diagnosable psychiatric condition. a. the symptoms of any such psychological disease(s) and/or disorder(s); There are no symptoms of sufficient intensity to warrant the making of a diagnosis of a psychiatric condition. b. the treatment(s) received by the applicant for any such psychological disease(s) and/or disorder(s); He was not in treatment and did not receive treatment at the time of December 2017 or immediately after. c. the impact of such psychological disease(s) and/or disorder(s) on the applicant's social, cognitive, and/or occupational functioning. There was no diagnosable psychiatric condition present in or around December 2017. Question 2. In your opinion, was the applicant suffering from any diagnosable psychological disease(s) and/or disorder(s) on 21 and 22 December 2017? If so, please describe, by cross-reference to: (i) the material in your brief; and/or He was not. (ii) the information supplied to you by the applicant: The history obtained does not suggest to me that the applicant was suffering a diagnosable psychiatric condition on 21 and 22 December. a. whether, in your opinion, the applicant's ability to make decision of a serious nature (including those with financial implications) was affected by reason of his psychological disease(s) and/or disorder(s); There was no compromise in his ability to make decisions, due to a diagnosable psychiatric condition b. whether, in your opinion, the applicant's ability to consider the implications of his decisions was affected by reason of his psychological disease(s) and/or disorder(s); and The applicant was not psychiatrically impaired in his ability to consider the implications of his decisions. c. whether, in your opinion, the applicant was at risk of being taken advantage of by reason of his psychological disease(s) and/or disorder(s); and No, he was not. d. whether, in your opinion, the applicant was at risk of being taken advantage of by reason of his psychological disease(s) and/or disorder(s); and No, he was not Question 3. Your comment(s) on the report of Dr J de L Horne, clinical psychologist, dated 18 March 2020. I disagree with the diagnostic conclusion of Dr J de L Horne. 236 Mr. Flageul attempted to discredit Professor Doherty's report by contending that the Professor had ignored what he had said to him. For example, the Professor records in his report that Mr. Flageul said he was not taking antidepressant medication in 2017. Mr. Flageul said that this was incorrect. He contended that he told Professor Doherty that he had been taking medication in 2017. In his evidence-in-chief Mr. Flageul said the following: - - - and say did you say that to Professor Doherty?---Yes, I did say that I was under medication and that increased my medication. Did you say anything about when you increased that medication?---Yes. I stated, to my recollection, that I increased my medication on or around the period between September and December 2017. The reason was because I was prescribed a larger amount that was - than what I was taking so at the time I could increase but the medical report was actually showing or is showing that I was under medication; I think that Dr - Professor Doherty is referring to the medical reports that are physical not on the mental health but it does mention the medication that I'm taking and I think there is a reference to an appointment in November and it clearly states that I'm on the 50 milligram or sertraline, which is Zoloft, which is the treatment for depression. 237 Mr. Flageul sought to buttress this evidence by leading evidence-in-chief from Ms. O'Donovan who said she had overheard Professor Doherty's examination of Mr. Flageul which took place using the video conferencing software known as "Zoom." She said that whilst she had only "scanned" Professor Doherty's report, she had nonetheless read the parts about September 2017 and "stuff around the December 2017." She was asked if there were any discrepancies between what she had read in the report and what she remembers hearing. She said that contrary to the contents of the report, Mr. Flageul had told Professor Doherty that he had been taking antidepressant medication in 2017. 238 Professor Doherty was briefly cross-examined. He denied that Mr. Flageul had told him that he had been taking antidepressants in 2017. He said that his conclusion that there was "no objective evidence that [Mr. Flageul] was clinically unwell before 21 December" remained accurate even if, as suggested to him, Mr. Flageul had at that time been taking 50 m.g. per day of sertraline. His answer on this issue was as follows: The evidence was that he was in fact unwell enough to be prescribed antidepressant medication, was it not?---If - if we assume, if we take the assumption that he was actually taking 50 milligrams of sertraline throughout 2017 it indicates he was on a maintenance dose of that medication, a very low dose. It does not indicate that he was depressed, clinically depressed, during that time. It indicates he continued to take that medication. Maybe to prevent a further relapse and to maintain his good health. 239 The attack on the reliability of Professor Doherty's report, based upon what Mr. Flageul has said to him, illustrates my principal difficulty with Mr. Horne's expert report; its reliability turns upon the accuracy of what Mr. Flageul said. For the reasons I have already given, Mr. Flageul's recollection of the events of the second half of 2017 was not accurate. 240 This difficulty also infects Professor Doherty's report. Mr. Flageul told him things about or reflective of his mental health which were not referred to by Mr. Flageul in any of his five affidavits admitted into evidence. Thus, Professor Doherty records that Mr. Flageul said the following to him about the events of 22 December 2017: On 22 December, he spent ten minutes to think about what had happened in the meeting, talked to Jo about what had happened, and said to me that he was crying. He said he had another meeting with MSS. He was told he would be a consultant to help develop the business. He said the others there were laughing and smiling and he said it seemed to him to make no sense. He felt destroyed and confused. He had flown back to Melbourne on 21 December but has little recollection of it. He told me that he cannot remember what happened that night. He was telephoned by Steven at 4:00PM on 22 December informing him they had an idea for the applicant, that instead of being sued for $300k, they would seek compensation through a management insurance claim and the money repaid from insurance. That is, they would get the $300k back as long as the applicant "behaved like a good boy" and that there was to be no more complaining. He said that Steven did not thereafter contact him. He said there were alarm bells ringing about the insurance deal. He said Steven said he would see the applicant again in a month's time and things would be back to normal. The applicant told me, "I had no idea what was going on". He said he was crying and in shock. He told me that Steven had come up with a plan. He said five minutes later he got an email seeking a release of the business for $1. He said he was "frightened but also hopeful". He said he was "absolutely thoughtless" in what he did. He said he should have called lawyers. He said, "at the time, I was such a wreck". He said, "I was destroyed". He said he had "no will power". He told me it was the threat of being sued that was overwhelming. He told me he remembers signing the Deed though he does not recall the actual physical moment of signing it. He told me it took place on 22 December. He said that day is a total blank. He said they were "back and forward with papers" though he cannot fully recall the ins and outs of what happened then. After that he was on notice that in thirty days he would be fired. He continued working in the business under the instruction of MSS, doing as he was told. He told me he was in "a state of a vegetable". He was a pushover and would do what he was asked. He felt he had no choice. 241 In cross-examination, Mr. Flageul further embellished his evidence concerning what had occurred on 22 December 2017. He said: And you discussed the matters of 21 December with her, did you, when you returned from Sydney?---As I stated and explained to Professor Doherty, I explained to my expert I had no recollection of - I'm not asking you what you told other people?---I have no recollection of what happened. Now I'm telling you, I have no recollection of what happened between the moment I left that meeting on the 21st ..... when I had that call from Mr Mace in between, that's complete blank out. I was traumatised. I have no - I have no recollection of what happened. I don't remember how I got back from Sydney to Melbourne. I don't remember how I got in the bus or in the train or in the taxi, if I drove. I have no recollection. It's a total blank. I had - I had gone through an explosion. My brain was dead. 242 None of Mr. Flageul's affidavits admitted into evidence refer to him having blanked out, of having "no recollection of what happened", of "crying", of being "frightened", that he was such a "wreck", that he felt "destroyed" with no "will power", that he was a "pushover" or that he was "in a state of a vegetable" on 22 December 2017. Rather, in his first affidavit, Mr. Flageul gave a detailed account of his version of a telephone conversation that had taken place on that day with Mr. Mace. He also sent a text on that day to Mr. Barker reporting on the previous night's revenue in Melbourne and noting he was to meet B.M.W. in 20 minutes. This is hardly consistent with Mr. Flageul's contention that he was suffering on that day a "complete blank out" from the moment of his dismissal, or with his statement that 22 December 2017 was a "total blank" in his mind. 243 Generally speaking, and looking at Mr. Flageul's medical history, I find that he has suffered from forms of depression and anxiety over time. As is so often the case, a person can battle with this form of mental illness for an entire life with episodes of wellness and periods of great darkness. In those circumstances, I infer that Mr. Flageul was exposed throughout the second half of 2017 to the risk of returning to depression; he may also have been actually depressed. Certainly, the termination of his employment and the end of his hopes for WeDrive, could well have triggered a further bout of depression. But this did not manifest itself objectively, through Mr. Flageul's behaviour, in a way which should have led Messrs. Mace, Taylor, Russell or Barker to realise that he was unwell, or that he was exposed to the risk of becoming unwell. Indeed, as I have already observed, the content of the text messages sent by Mr. Flageul to Mr. Barker on 21 December 2017, and the days that followed, is remarkably rational and optimistic for someone who had just been sacked. Moreover, and perhaps, decisively, as I have already found, Mr. Flageul in 2017 never told Messrs. Mace, Taylor, Russell or Barker that he suffered from depression and anxiety. Assuming for the moment that Mr. Flageul was depressed in the second half of 2017, I find that Messrs. Mace, Taylor, Russell and Barker had no actual knowledge of this in 2017. I also find that there is no basis to conclude that they ought to have known about his mental illness, on the assumption again that Mr. Flageul was suffering from depression at this time.

One Other Matter 244 I should finally note that the respondents also relied upon an expert report of a Mr. Bradley Schatz, who is a forensic computer scientist and a Doctor of Philosophy in computer science. He had been asked some questions about certain other apps which did not feature in the written submissions of the respondents or of Mr. Flageul in closing. I do not need to consider this report any further.

Complaints or Inquiries 245 The first issue to decide is whether any of the alleged complaints or inquiries were complaints or inquiries for the purposes of s. 341 of the F.W. Act. As I have mentioned already, Mr. Flageul characterised each event as being either, or both, a complaint or inquiry. This imprecision did not assist Mr. Flageul's case. 246 In Shea v. TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; (2014) 314 A.L.R. 346, Dodds-Streeton J. said at 353-354 [29]: I concluded, for reasons set out below, that in the context of s 341(1)(c)(ii) of the Act: (a) a complaint is a communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation; (b) the grievance, finding of fault or accusation must be genuinely held or considered valid by the complainant; (c) the grievance, finding of fault or accusation need not be substantiated, proved or ultimately established, but the exercise of the workplace right constituted by the making of the complaint must be in good faith and for a proper purpose; (d) the proper purpose of making a complaint is giving notification of the grievance, accusation or finding of fault so that it may be, at least, received and, where appropriate, investigated or redressed. If a grievance or accusation is communicated in order to achieve some extraneous purpose unrelated to its notification, investigation or redress, it is not a complaint made in good faith for a proper purpose and is not within the ambit of s 341(1)(c)(ii); (e) a complaint may be made not only to an external authority or party with the power to enforce or require compliance or redress, but may be made to persons including an employer, or to an investigator appointed by the employer; (f) a complaint that an employee is able to make in relation to his or her employment is not at large, but must be founded on a source of entitlement, whether instrumental or otherwise; and (g) a complaint is limited to a grievance, finding of fault or accusation that satisfies the criteria in s 341(1)(c)(ii) and does not extend to other grievances merely because they are communicated contemporaneously or in association with the complaint. Nor does a complaint comprehend contemporaneous or associated conduct which is beyond what is reasonable for the communication of the grievance or accusation. 247 In Hill v. Compass Ten Pty Ltd (2012) 205 F.C.R. 94, Cowdroy J. made the following observation about the nature of a complaint at 102-103 [48]: A complaint must state a particular grievance or finding of fault. A complaint should be distinguished from a mere request for assistance. 248 In Maric v. Ericsson Australia Pty Ltd [2020] FCA 452; (2020) 293 I.R. 442, I observed (at 458 [45]) that an inquiry is an investigation or an examination made for the purposes of acquiring knowledge or information. In their closing written submissions, Mr. Flageul's counsel adopted this definition. 249 I find that the first alleged complaint/inquiry was probably an "inquiry" for the purposes of s. 341 of the F.W. Act. If one accepts the evidence of Mr. Taylor, it was instead a "complaint" about Mr. Nicholson. It is unnecessary to decide which conclusion should be preferred, for reasons which will become clear. 250 The second alleged complaint/inquiry was an "inquiry" for the purposes of s. 341. Mr. Flageul was seeking information about a particular payment made to Mr. Taylor. 251 The content of the third alleged complaint/inquiry was not really disputed. In my view, it contained a mixture of complaints about the payments made to Mr. Nicholson by WeDrive, and in addition the seeking of information which I consider to be an inquiry. 252 The fourth alleged complaint/inquiry took the form of a request to Mr. Taylor for him to explain why Mr. Flageul's WeDrive debit card had been declared lost or stolen. I am satisfied that this was an "inquiry" for the purposes of s. 341. It also included a complaint to Mr. Taylor that it would have been nice if Mr. Flageul had been given prior notice about the cancellation. 253 The fifth alleged complaint/inquiry occurred when Mr. Flageul emailed Mr. Taylor and asked why an instruction had been given to remove Mr. Flageul's access to the Xero accounting system. In my view, this was an "inquiry" for the purposes of s. 341 of the Act. 254 The sixth alleged complaint/inquiry, being the email sent by Mr. Flageul to Mr. Taylor following their heated telephone discussion on 2 October 2017, did not seek information and was not an "inquiry". However, I would characterise it as a "complaint." It contains, as a matter of substance, an expression of dissatisfaction with Mr. Taylor's conduct during his telephone conversation with Mr. Flageul. 255 The seventh alleged complaint/inquiry was said to comprise a conversation Mr. Flageul had with Mr. Mace about the conduct of Mr. Taylor, about Mr. Nicholson and about being denied access to the Xero system. Mr. Flageul said that this took place on 10 November 2017. Mr. Mace had no recollection of this. However, I have found that, at some point or points, Mr. Flageul complained about Mr. Taylor to Mr. Mace. For the moment, I will assume that this included a complaint made during a conversation which took place on 10 November 2017. I otherwise have found that Mr. Flageul has not shown, on the balance of probabilities, that he made complaints to Mr. Mace about Mr. Nicholson and about being denied access to the Xero system. 256 The eighth alleged complaint/inquiry took place when Mr. Flageul emailed Mr. Mace about the rumour that Mr. Flageul would cease to be WeDrive's C.E.O. He asked Mr. Mace to speak to the M.S.S. people to tell them to apply "upmost [sic] professionalism" during the merger process. In my view this was a "complaint" for the purposes of s. 341 of the F.W. Act. 257 The ninth alleged complaint/inquiry comprised the email sent by Mr. Flageul to Messrs. Taylor and Russell. It brought to their attention the need for a marketing campaign to commence with the Christmas party season about to start. I would not characterise that message as a "complaint" but advice or the provision of assistance in order to improve WeDrive's business. However, the email also included a question about when two individuals were going to start working on the marketing campaign. In my view, that was an "inquiry" for the purpose of s. 341. 258 I have found that Mr. Flageul has not shown, on the balance of probabilities, that the tenth alleged complaint/inquiry took place. 259 I do not think that the eleventh alleged complaint/inquiry was either a complaint or an inquiry. It expressed no grievance to Mr. Mace and sought no information. Instead, read as a whole, to the extent that I can do this (because it was poorly reproduced and had parts which appeared to be missing), I would characterise the email as an explanation given by Mr. Flageul to Mr. Mace. That is why it finishes with the phrase: "I hope this clarifies…"

In Relation to His or Her Employment 260 The next issue to decide is whether each of the things I have found to be either a complaint or an inquiry were made "in relation to" Mr. Flageul's employment as WeDrive's C.E.O. In The Environmental Group Ltd v. Bowd [2019] FCA 951; (2019) 288 I.R. 396, I said the following about the required nexus between a given complaint or inquiry and a person's employment at 438-439 [124]-[126]: As an expression of a sufficient nexus, the High Court has observed that the similar phrase "in respect of" has a "chameleon-like quality". It takes its meaning from its context: Technical Products Pty Ltd v State Government Insurance Office (1989) 167 CLR 45 at 47; see also Federal Commissioner of Taxation v Scully (2000) 201 CLR 148 at 182-183. In my view, that observation applies equally to the phrase "in relation to". The statutory context here is the protection of employees who exercise workplace rights. One of those rights is an entitlement to make a complaint about a person's employment without the fear or risk of retribution. In Walsh v Greater Metropolitan Cemeteries Trust (No 2) (2014) 243 IR 468, Bromberg J decided that a report made by an employee about a linen supplier providing sub-quality service was a "complaint" in relation to that employee's employment. His Honour observed that a complaint that raises "potential implications" about a person's employment was likely to be one that would satisfy the nexus required in s 341(1)(c)(ii). His Honour said at [43]: In this case, Ms Walsh raised a probity issue in relation to a contract with a supplier who supplied services including to an operation which Ms Walsh managed in the course of her employment. Whether or not Ms Walsh was under a contractual duty to report the possible misdeed of others (see the discussion in Irving, The Contract of Employment (LexisNexis Butterworths, 2012) at [7.21]), her failure to report suspected wrong-doing had the potential to reflect badly upon her and cause prejudice to her in her employment. By reason of either of those two factors, the Alsco contract complaint made by Ms Walsh raised an issue with potential implications for Ms Walsh's employment and was "in relation to ... her employment" within the meaning of s [341(1)(c)(ii)] of the FW Act. See also Milardovic v Vemco Services Pty Ltd [2016] FCA 19 at [69] per Mortimer J. A test of "potential implications" may be too broad a statement of principle. At least with respect to a person with the functions and responsibilities of a CEO, almost anything communicated by such an officeholder would have "potential implications" for that person's employment. In my view, in the case of a CEO, the complaint must be one directed at or concerned with that person's employment in a substantive way. In that respect, observing that the required nexus may be direct or indirect, may not greatly assist. It must, as a matter of substance, be about that CEO's employment. 261 I remain of the view that a test of "potential implications" could be problematic when dealing with a C.E.O. with very broad responsibilities. That observation should be taken as factual in nature and limited to the office of C.E.O. Nonetheless, I adhere to my view that, for a complaint or inquiry to be "in relation to" the employment of a C.E.O., it must, as a matter of substance, be about the C.E.O.'s employment, as distinct from the person's course of conduct as the C.E.O. of a company. If that distinction is not drawn, there is a danger that everything a C.E.O. does whilst working might be taken to be "in relation to" her or his employment. I doubt whether Parliament intended that the test should apply as broadly as this. If that had been Parliament's intention, it might have drafted s. 341(1)(c)(ii) so that it referred to any complaint made at work or any complaint made whilst working; but Parliament did not formulate a test in such terms. 262 I do not think that the first alleged complaint/inquiry was "in relation to" Mr. Flageul's employment. It was about the payments made to Mr. Nicholson. Assuming that Mr. Flageul's recollection of this event is to be preferred, I accept that as C.E.O. of WeDrive it was legitimate for him to make this inquiry. If made in good faith, such an inquiry would fall within his general role or function as C.E.O. of WeDrive. But it was not about Mr. Flageul's employment as distinct from his conduct in that role or function. 263 I have reached the same conclusion for an analogous reason in relation to the second alleged complaint/inquiry. This was an inquiry made about a payment to Mr. Taylor. It has not been shown to be "in relation to" Mr. Flageul's employment. 264 I have reached the same conclusion, and again for an analogous reason, in relation to the third alleged complaint/inquiry. The complaints and inquiries made were about Mr. Nicholson and not about Mr. Flageul's employment. 265 In my view, the fourth alleged complaint/inquiry was "in relation to" Mr. Flageul's employment. He was issued the WeDrive debit card as an attribute of his employment as the C.E.O. of WeDrive. Its cancellation was in relation to the way Mr. Flageul was employed and was personal to him. 266 The fifth alleged complaint/inquiry was made "in relation to" Mr. Flageul's employment. I accept that his role and responsibilities as C.E.O. gave rise to an expectation on his part that he would have continuing access to the Xero accounting system. Mr. Flageul's Executive Services Agreement obliged him to provide "prompt and full information to the Board regarding the conduct of the Business…" On balance, access to the Xero accounting system was an issue sufficiently proximate to Mr. Flageul's employment as C.E.O. because the inquiry he made about access to that system can be characterised as concerned with compliance with his contract of employment. 267 I am satisfied that the sixth alleged complaint/inquiry was "in relation to" Mr. Flageul's employment, although I find that it was also bound up with his role as a director. That is because this was a heated conversation between WeDrive's two executive directors. However, I think that this matters not. It also matters not whether Mr. Flageul's description of what took place in his email was, or was not, accurate: Shea at [29(c)]. In my view, the contents of the email made complaints which were personal to Mr. Flageul. I would infer from those contents that the complaints were directed at reacting to Mr. Taylor's criticisms of Mr. Flageul's performance both as a director, but also as C.E.O. of WeDrive. 268 In contrast, I am not satisfied that Mr. Flageul has shown that the seventh alleged complaint/inquiry was in relation to his employment. Given that I have not accepted that the more specific complaints were ever made, one is left with my general finding that Mr. Flageul complained to Mr. Mace about Mr. Taylor. That is not sufficient for me to be satisfied that these complaints were in relation to Mr. Flageul's employment. They may, for example, have been about Mr. Taylor's efforts to grow the business in Sydney. 269 The eighth alleged complaint/inquiry was plainly "in relation to" Mr. Flageul's employment. It concerned rumours about who was to occupy his role as C.E.O. 270 The ninth alleged complaint/inquiry was not "in relation to" Mr. Flageul's employment. It was an inquiry made about marketing personnel which took place in the course of Mr. Flageul's role as C.E.O. of WeDrive. It was not about his employment. 271 I was not otherwise satisfied that the tenth alleged complaint/inquiry had ever been made, and did not consider that what comprised the eleventh alleged complaint/inquiry was either a complaint or an inquiry. 272 It follows that, for the foregoing reasons, the fourth, fifth, sixth and eighth alleged complaints/inquiries were made in relation to Mr. Flageul's employment.

The Capacity to Make the Complaints or Inquiries 273 In Maric at 460 [55], after summarising the effect of the decision of the Full Court of this Court in PIA Mortgage Services Pty Ltd v. King (2020) 274 F.C.R. 225, I made the following observation about the required legal capacity to make an inquiry for the purposes of s. 341(1)(c)(ii) of the F.W. Act: For a person to be "able" to make an inquiry, that capacity must be anchored in a legal entitlement of some kind, whether it be statute, contract law, the common law of Australia, or some other instrument or thing that confers legal rights, in the sense described by Rangiah and Charlesworth JJ. in PIA Mortgage Services. 274 The same observation applies to the making of complaints. In PIA Mortgage, Rangiah and Charlesworth JJ. considered Shea and said the following at 230 [14]: On the understanding that s 341(1)(c)(ii) requires an entitlement or right to make a complaint in relation to the employee's employment, there must be an identifiable source of that entitlement or right. In Shea, Dodds-Streeton J did not suggest that the entitlement or right is limited to one arising under an instrument such as legislation, an industrial instrument, or a contract of employment. In fact, her Honour was careful not to attempt any exhaustive description of the source of the right to make a complaint or inquiry. Nor did her Honour suggest that the entitlement or right must be conferred expressly or directly by the source. 275 Mr. Flageul grouped his complaints and inquiries concerning the debit card and access to the Xero system as the "Financial Complaints." He submitted that the source of his legal right to complain or inquire about these matters came from the following: (a) the clauses in the Subscription and Shareholders' Deed set out above; (q) Mr. Flageul's Executive Services Agreement; and (r) the Corporations Act. 276 It was submitted that the clauses in the Subscription and Shareholders' Deed conferred upon Mr. Flageul an entitlement to inquire and to complain, about, for example, whether expenditure on consultants was in line with approved budgets and plans. It was further submitted that Mr. Flageul, as C.E.O., had to report to the board and thus needed access to sufficient financial information. Mr. Flageul also relied upon s. 290(1) of the Corporations Act, which is as follows: Personal access A director of a company, registered scheme or disclosing entity has a right of access to the financial records at all reasonable times. 277 The term "financial records" is defined in s. 9 of the Corporations Act as follows: financial records includes: (a) invoices, receipts, orders for the payment of money, bills of exchange, cheques, promissory notes and vouchers; and (b) documents of prime entry; and (c) working papers and other documents needed to explain: (i) the methods by which financial statements are made up; and (ii) adjustments to be made in preparing financial statements. 278 It was then submitted that as a director of WeDrive, and as a shareholder, Mr. Flageul had additional rights or duties under the Corporations Act as follows: (a) Duty of care and diligence; (b) Duty of good faith; (c) Duty not to improperly use position; (d) Duty to ensure that a company does not trade whilst insolvent; (e) Duty to take reasonable steps to ensure that a company complies with its obligations in the Corporations Act related to the keeping of financial records and financial reporting; (f) Right as a shareholder to obtain information about a director's remuneration [pursuant to s. 202B(1) of the Corporations Act]; and (g) Right as a shareholder, employee and officeholder of the company to make a protected disclosure as a whistle blower [pursuant to Pt. 9.4AAA of the Corporations Act]. 279 Section 202B(1) of the Corporations Act provides: Members may obtain information about directors' remuneration (1) A company must disclose the remuneration paid to each director of the company or a subsidiary (if any) by the company or by an entity controlled by the company if the company is directed to disclose the information by: (a) members with at least 5% of the votes that may be cast at a general meeting of the company; or (b) at least 100 members who are entitled to vote at a general meeting of the company. The company must disclose all remuneration paid to the director, regardless of whether it is paid to the director in relation to their capacity as director or another capacity. 280 It is not necessary to set out all of the provisions of Pt. 9.4AAA of the Corporations Act. Section 1317AA identifies the sort of "whistleblower" disclosure that is "protected" by Pt. 9.4AAA. It was in the following terms during the relevant period: Disclosures qualifying for protection under this Part (1) A disclosure of information by a person (the discloser) qualifies for protection under this Part if: (a) the discloser is: (i) an officer of a company; or (ii) an employee of a company; or (iii) a person who has a contract for the supply of services or goods to a company; or (iv) an employee of a person who has a contract for the supply of services or goods to a company; and (b) the disclosure is made to: (i) ASIC; or (ii) the company's auditor or a member of an audit team conducting an audit of the company; or (iii) a director, secretary or senior manager of the company; or (iv) a person authorised by the company to receive disclosures of that kind; and (c) the discloser informs the person to whom the disclosure is made of the discloser's name before making the disclosure; and (d) the discloser has reasonable grounds to suspect that the information indicates that: (i) the company has, or may have, contravened a provision of the Corporations legislation; or (ii) an officer or employee of the company has, or may have, contravened a provision of the Corporations legislation; and (e) the discloser makes the disclosure in good faith. Note: Under section 1405, the reference to a provision of the Corporations legislation includes a reference to a corresponding provision of the old corporations legislation of the States and Territories. (2) A reference in subsection (1) to a person contravening a provision of the Corporations legislation includes a reference to a person committing an offence against, or based on, a provision of this Act. Note: This subsection causes section 11.6 of the Criminal Code to operate in relation to such references. 281 Whether cumulatively or respectively, the three sources of legal entitlement identified by Mr. Flageul provided, it was said, a sufficient legal basis to make the fourth and fifth alleged complaints/inquiries. The respondents objected to the Court considering these contentions. They had never been pleaded and were raised for the first time in closing. I have some sympathy for that complaint. But I need not decide it. That is because the legal ability to make either alleged complaint/inquiry was not derived from the Corporations Act or the Executive Services Agreement. Further, while I have found below that the legal ability to make the fifth alleged complaint/inquiry was derived from the Subscription and Shareholders' Deed, the respondents have demonstrated, for the reasons set out below, that Mr. Flageul was not sacked because he made this fifth alleged complaint/inquiry. 282 In that respect, I observe that there may be a degree of artificiality at work here. Mr. Flageul did not make his complaints or inquiries by invoking a legal entitlement to so act; rather, he made his complaints or inquiries as a free citizen and two and a half years later his lawyers, with a degree of considerable ingenuity, researched the laws that apply in this country to find some additional legal ability to do that which Mr. Flageul was always able to do. That is not intended as a criticism of those lawyers. Nor do I suggest that to exercise a workplace right one must, relevantly have, actual knowledge of one's legal rights. Nonetheless, whether this is how Parliament intended s. 341(1)(c)(ii) to work may be the subject of legitimate doubt. 283 It will recalled that the fourth alleged complaint/inquiry was a question asked about why Mr. Flageul's debit card had been cancelled. With great respect, I can find no clause in the Subscription and Shareholders' Deed or in Mr. Flageul's employment agreement that conferred on Mr. Flageul a legal ability to make that inquiry. Of course, these agreements conferred on Mr. Flageul certain obligations to make reports, and obliged WeDrive to supply information to its directors. But none conveyed a legal entitlement to make an inquiry about why a third party bank had cancelled Mr. Flageul's debit card. Similarly, none of the rights or duties listed by Mr. Flageul and sourced from the Corporations Act conferred such an ability; nor did s. 290 of the Corporations Act confer any such ability; s. 202B conferred a right to obtain information about different subject matter (director's remuneration); finally, Mr. Flageul was not invoking here what are sometimes called the "whistle-blower" provisions of that Act. In my view, by making his inquiry about the cancellation of his debit card, Mr. Flageul was simply exercising his pre-existing freedom to ask a question. 284 I have reached the same conclusion concerning the complaint made that Mr. Flageul had not been given prior notice of the cancellation of his debit card. Again, this complaint was made as a free citizen of this country. The three sources of law relied upon by Mr. Flageul conferred no greater or additional lawful ability to make this complaint. 285 I turn to the fifth alleged complaint/inquiry which sought reasons for the decision to deny Mr. Flageul access to the Xero accounting system. On one view, by its terms Mr. Flageul was not seeking "management and financial information and reports", as that term is used in cl. 7.3 of the Subscription and Shareholders' Deed, but rather was seeking reasons concerning why he was being denied access to some of the financial records of the company. It may also be doubted whether the Xero accounting system constitutes the type of sufficient "management and financial information" contemplated by cl. 7.3 of the Deed. The Xero accounting system represents a layer of very great detail which a director of WeDrive would be unlikely to need. Such detail may exceed what is "sufficient", to use the language of cl. 7.3 of the Deed, to permit a director to discharge his or her obligations and duties. However, for the moment, I am prepared to accept that there may be occasions when a director might need to interrogate the Xero accounting system as part of his or her duties. I am thus also prepared to accept that cl. 7.3 of the Deed confers on such a director a legal right to such information. On balance, I think that would include a right to reasons, if access were to be refused. It follows that there existed a legal right to make the fifth alleged complaint/inquiry that may be found in cl. 7.3, even though Mr. Flageul already had the freedom to make that inquiry. In that respect, I do not think it matters that Mr. Flageul held that right in his capacity as a director rather than as a C.E.O. It is otherwise unnecessary for me to consider whether an additional legal right to make this inquiry existed elsewhere. 286 The sixth alleged complaint/inquiry took place when Mr. Flageul complained in an email to Mr. Taylor about what Mr. Taylor had said to him during a telephone conversation that had taken place on 2 October 2017, and about Mr. Taylor's manner. On this occasion the legal source of Mr. Flageul's capacity to make this complaint was said by him to be s. 21 of the Occupational Health and Safety Act 2004 (Vic.) (the "O.H.S.A."). Section 21(1) of that Act relevantly provides as follows: Duties of employers to employees An employer must, so far as is reasonably practicable, provide and maintain for employees of the employer a working environment that is safe and without risks to health. 287 Section 21(2) imposes on an employer more specific duties, such as providing information or training to enable employees to perform their work in a way that is safe and without risk to health. Section 25 of the O.H.S.A., also relied upon by Mr. Flageul, provides that an employee must take reasonable care for his or her own health and safety. 288 Mr. Flageul submitted that it would render the obligations imposed by the O.H.S.A. on both employers and employees "meaningless if an employee is unable to report incidents of inappropriate or bullying behaviour at work." I respectfully agree with that observation, so far as it goes. Here, it was said that Mr. Flageul's complaint was in substance the calling out of bullying behaviour allegedly on the part of Mr. Taylor. It was then submitted that "[a]ccordingly" Mr. Flageul was able to make his complaint about Mr. Taylor in relation to Mr. Flageul's employment. In support of that contention, Mr. Flageul also relied upon what he said was an implied term in his contract of employment which obliged WeDrive to provide a safe place of work. 289 I respectfully disagree with the foregoing submission. I do not think that Mr. Flageul's email can be characterised as a complaint about bullying. There are a number of reasons for that conclusion. First, up to the time it was sent, there had only been one very heated conversation between Messrs. Flageul and Taylor and one allegation of yelling. Secondly, the allegation, if true, took place, not between an employer and employee, but between two fellow executive directors. Thirdly, as I understood it, the gist of Mr. Flageul's concern was that his son had overheard what had been said and it was his son who had been "distressed" by it. Finally, in my view, and once again, Mr. Flageul already enjoyed the freedom to write the content of his email and send it without the need to have conferred upon him some additional legal capacity which permitted this to take place. With great respect, neither the provisions of the O.H.S.A., nor the implied obligation to provide a safe workplace, conferred upon Mr. Flageul a further or additional legal ability to do what he did. 290 The eighth alleged complaint/inquiry took place when Mr. Flageul emailed Mr. Mace about the rumour concerning his position as C.E.O. of WeDrive. Mr. Flageul submitted that the instrument underlying this complaint was his Executive Services Agreement. It was said that any "termination by [WeDrive] of [Mr. Flageul's] role may give rise on [his] part to a cause of action under contract and under the FW Act related to dismissal." It was then said that even if Mr. Flageul were to have been offered a new role with WeDrive or with the M.S.S. Group, this would have constituted a variation of his contract or a new contract of employment. It was then submitted that Mr. Flageul "has the right to complain or inquire about such a progress [sic] as well as the confidentiality of such a process from his staff and colleagues." 291 Mr. Flageul agreed that he had not expressly alleged that there had been any breach or variation of his Executive Services Agreement. In that respect, this case was different from that considered by the Full Court of this Court in PIA Mortgage Services where there had been an express complaint made by an employee that an employer had breached or had threatened to breach an employment contract. In that case, amongst other things, a letter of demand had been sent to an employer alleging a breach of an employment contract. Justices Rangiah and Charlesworth observed at 231 [19]: Under the general law, an employee has a right to sue his or her employer for an alleged breach of the contract of employment. A suit may be regarded as the ultimate form of complaint. Accordingly, in our opinion, an employee is "able to make a complaint" about his or her employer's alleged breach of the contract of employment. That ability is "underpinned by" (to use Dodds-Streeton J.'s expression in Shea) the right to sue, and extends to making a verbal or written complaint to the employer about an alleged breach of the contract. 292 Mr. Flageul submitted that it was not necessary for there to be an express or even a conscious allegation of a breach of contract. What was sufficient, it was said, is if there is a complaint about a matter or matters which, as a matter of fact, constitute a breach of contract or which "could be the subject of proceeding to enforce the particular contract." In that respect, Mr. Flageul emphasised his role as C.E.O. He submitted that many if not all of the complaints/inquiries he had made constituted possible breaches of his Executive Services Agreement which had appointed him to exercise the office and functions of a C.E.O., and which conferred upon him multiple causes of action. 293 I respectfully disagree with that submission. Whether a course of conduct constitutes a complaint is largely a question of fact. If the complaint is a statement that an employer has breached a contract, or threatens to do so, then, as the decision of PIA Mortgage Services shows, that can constitute a complaint for the purposes of s. 341(1)(c)(ii) of the F.W. Act. And because it is a complaint embedded in rights conferred by the common law, it has a sufficient legal source. But what Mr. Flageul submits goes well beyond these principles. Mr. Flageul wants complaints or inquiries which make no allegation of any breach of contract, to be treated, as a necessarily factual proposition, as equivalent to such an allegation. On the facts of this case, that proposition is unsustainable. I cannot treat what Mr. Flageul says he did as something other than what I have found each alleged complaint/inquiry to be. 294 In particular, the sixth alleged complaint/inquiry cannot be characterised as, in substance, a contention that Mr. Flageul's Executive Services Agreement had been breached. No term of that contract had ever been identified which was said to have been breached and I reject the proposition that the mere fact of Mr. Flageul's appointment as C.E.O. of WeDrive converted every complaint he had made in that role as, de facto, a claim of breach of contract. The appointment of Mr. Flageul as a C.E.O. did not carry with it any necessary legal rights or duties merely by the application of that title to his name. The Court was not referred to any authorities to suggest otherwise. Rather, in my view, the function, role and responsibilities of a C.E.O. will vary from company to company. In Mr. Flageul's case, it was informed by two aspects. First, by the expression in his contract of employment that his "Specific duties & Authorities" were to be "[a]s directed by the Board from time to time" (Schedule 1). Secondly, by Mr. Flageul's own description of those "duties & Authorities" in his report for the 10 November 2017 WeDrive board meeting. He described his position, it will be recalled, in the following way: "Business development - Innovation", "Technology - ICT", and "Sales - Venues - corporates Melbourne." Inferentially, these were the responsibilities he was directed to assume by WeDrive's board. 295 To take another example, namely the eighth alleged complaint/inquiry, being Mr. Flageul's email to Mr. Mace concerning the rumour that he was to be replaced as C.E.O. It commences with Mr. Flageul saying he wants "urgent action" taken. Mr. Flageul then sets out the rumour and then describes the "action" he wants taken; he wants Mr. Mace to speak to the M.S.S. people and tell them to apply "upmost [sic] professionalism." It then finishes with the following: "[t]hanks and feel free to call me to discuss this weekend." There is not even a hint of any allegation of a breach of contract. Nor, looking at Mr. Flageul's Executive Services Agreement, can a term be found (none was alleged) that had been breached because of the circulation of the rumour and Mr. Flageul's subsequent request for professionalism. Nor is there anything about Mr. Flageul's appointment as the C.E.O. of WeDrive that can justify a conclusion that by this email Mr. Flageul should be taken to have alleged that there had been a breach of contract. I make the same observations to the extent that this argument was relied upon with respect to the fourth and fifth alleged complaints/inquiries. 296 In closing submissions in reply, filed after the completion of the trial, Mr. Flageul unearthed yet another legal source for the making of his alleged complaints/inquiries. This was s. 232 of the Corporations Act (set out above) which addresses acts of oppression. With respect, this claim should not have been raised so late. In any event, I am not satisfied that s. 232 conferred on Mr. Flageul any legal capacity to make the alleged complaints/inquiries I have described above. Rather, s. 232 permits the Court to make orders under s. 233 of the Corporations Act where, amongst other things, the conduct of a company's affairs has been oppressive to a member or members of the company. In my view, Mr. Flageul has incorrectly assumed that the availability of a lawful remedy must, in each case, necessarily confer an additional legal ability to make a complaint or inquiry that might subsequently be relevant to the grant of that remedy. Of course, if Mr. Flageul had complained that he was being oppressed by WeDrive, like the allegation of the breach of contract in PIA Mortgage Services, that complaint might have been an exercise of a workplace right. But he did not do this, whether expressly or implicitly, or whether directly or indirectly. 297 It follows that for the foregoing reasons, Mr. Flageul did not exercise any workplace rights in making the alleged complaints/inquiries that he made, save in the case of the fifth alleged complaint/inquiry.

The Reasons for Mr. Flageul's Dismissal 298 Because I have found that the fifth alleged complaint/inquiry constituted the exercise of a workplace right for the purposes of s. 341(1)(c)(ii) of the F.W. Act, I turn to consider the reasons for Mr. Flageul's dismissal. For that purpose, I will also consider that issue on the assumption that, contrary to my earlier findings, each of the 11 alleged complaints/inquiries constituted the separate exercise of a workplace right. 299 There was no dispute about the applicable legal principles. Relevantly, s. 340 of the F.W. Act is breached if it is found that adverse action has been taken against a person "because" that person has exercised a workplace right. It is not in dispute that the adverse action here was the dismissal of Mr. Flageul as C.E.O. of WeDrive. In Lamont v. University of Queensland (No 2) [2020] FCA 720, Rangiah J. relevantly observed that a mere causal nexus between the exercise of a workplace right and the taking of adverse action would not sufficiently engage s. 340. His Honour said at [86]: [A] mere causal nexus between the exercise of a workplace right and the adverse action is not enough. In Barclay at [104], Gummow and Hayne JJ considered that the word "because" in s 340(1) requires an enquiry as to the "substantial and operative" reason or reasons for the relevant action. In BHP Coal, Gageler J described the enquiry as being into the "operative and immediate" reason or reasons. The mere application of a "but for" test is insufficient. Otherwise, the outcomes in Barclay and BHP Coal would have been different. The closeness of the connection between the exercise of the workplace right and the adverse action must be examined. A qualitative judgment must be made as to whether the adverse action was taken because the employee exercised a workplace right. I very gratefully adopt the foregoing summary of principle. 300 Because of s. 361 of the F.W. Act, practically speaking it is the respondents who bear the onus of proving on the balance of probabilities the actual "operative and immediate reason" for Mr. Flageul's dismissal. In that respect, I find that it was Mr. Mace who terminated Mr. Flageul's employment. By reason of the operation of s. 360 of the F.W. Act, the question then becomes: have the respondents proven that Mr. Mace's actual reasons for Mr. Flageul's dismissal did not include the exercise by Mr. Flageul of a workplace right that comprises, individually or cumulatively, the alleged complaints/inquiries I have described above, and, in particular, because of the making of the fifth alleged complaint/inquiry? 301 In their written submissions, the respondents summarised the applicable principles in the following way which did not appear to be disputed by Mr. Flageul: (a) The central question to be determined is one of fact. It is: "Why was the adverse action taken?" (b) That question is to be answered having regard to all the facts established in the proceeding. (c) The Court is concerned to determine the actual reason or reasons which motivated the decision-maker. The Court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker. Nor should such an enquiry be made. (d) It will be "extremely difficult to displace the statutory presumption in s. 361 if no direct testimony is given by the decision-maker acting on behalf of the employer." (e) Even if the decision-maker gives evidence that he or she acted solely for non proscribed reasons other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable. (f) If, however, the decision-maker's testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s. 361. 302 With very great respect to Mr. Flageul, I have concluded that Mr. Mace's evidence concerning his reasons for the dismissal of Mr. Flageul is reliable and I prefer it to Mr. Flageul's account of what happened, which I do not accept. It follows that the respondents have thereby displaced the presumption created by s. 361 of the F.W. Act and have shown that Mr. Flageul was not dismissed because of the exercise by him of a workplace right. There are a number of reasons for reaching this conclusion. 303 First, there is the objective fact that, just days before his dismissal, Mr. Mace learned about Mr. Flageul's failure to disclose Contact Point's ownership of the relevant intellectual property. Mr. Flageul frankly conceded that he should have revealed this and that it was "madness" that he had not done so. If I may repeat the following salient answer given by Mr. Flageul during his cross-examination: But I remember, on 21 December, Mr Mace questioned me on that, and he said, "Did you actually commit a lawyer to read over that agreement that you signed with Contact point?" And I said, "No." And I remember him shaking his head, probably thinking, "What an idiot", and I would have agreed with that, because I should have. That probably would have saved me a lot of that trouble. 304 As already mentioned, Mr. Flageul tried to downplay the significance of this event by contending that the problem was solved just before 21 December 2017 when Contact Point assigned the necessary intellectual property to WeDrive. I do not think that his attempt succeeded. That is so for two reasons. First, there is the answer given by Mr. Taylor during his cross-examination as set out above. He said the key point was around integrity, trust, and the relationship that Messrs. Mace and Taylor had with Mr. Flageul. I find in the circumstances here that this relationship was unworkable because Messrs. Mace and Taylor could no longer trust Mr. Flageul. Whether they felt that Mr. Flageul had lied to them about this issue was less clear; at the very least they felt he had neglected to address a vital issue for them, namely full ownership of the intellectual property. They had both been misled. I accept Mr. Taylor's evidence that this could not be ignored. The second reason is bound up with the next reason for accepting Mr. Mace's evidence. 305 Secondly, I do not accept that the intellectual property ownership issue was the only reason for Mr. Flageul's dismissal, although it was a substantial reason. The very poor performance of the WeDrive business, and the failure of the app to perform adequately were, generally speaking, the other reasons for Mr. Flageul's dismissal. During Mr. Mace's cross-examination it was put to him that the letter giving Mr. Flageul notice of his termination only referred to the intellectual property issue. However, Mr. Mace pointed out that it also referred to the failure to disclose other "issues", and I observe that the letter also adverts to the undertaking of "investigations". In my view, whether rightly or wrongly, Mr. Mace thought that the app that WeDrive had acquired was capable of working in the way in which it was demonstrated to him in May 2017. He thought it was automated. Rightly or wrongly, Mr. Mace thought that the app needed little further development. He also thought, rightly or wrongly, that the business had only been making losses of $8,000 per month that needed to be covered. Instead, far more cash had been needed to develop the app. Days before Mr. Flageul's dismissal, Mr. Mace saw the profit and loss statement for WeDrive. It disclosed substantial losses. It disclosed the payment of $101,677 in "IT Expenses"; $39,000 had been paid to "other contractors" and $45,045 had been paid in directors fees. The return on sales was, in contrast, negative. It does not matter whether these figures were or were not accurate. The fact is that this was the picture presented to Mr. Mace at this time concerning the financial performance of WeDrive. In my view, he was justified in thinking that the business was worthless and would shortly become insolvent. Its only significant asset was cash at bank. I accept that Mr. Mace genuinely thought that Mr. Flageul had contributed significantly to WeDrive's poor performance because the app did not fully work, more money was needed to develop it, and as a result sales were poor. The catastrophe of the "Paul Gallen" event described above was emblematic of the state of the business in November 2017. However, I would not lay all of the blame at Mr. Flageul's feet. It is possible that, for example, Mr. Nicholson contributed to a lack of success in the Sydney market. Nonetheless, all of these matters contributed to Mr. Mace's decision to terminate Mr. Flageul's employment. They also explain why the assignment of the necessary intellectual property by Contact Point to WeDrive did not "fix" the problems Mr. Mace had with Mr. Flageul. 306 Thirdly, Mr. Taylor's evidence corroborates that of Mr. Mace. He was at the meeting at which Mr. Flageul was dismissed. I accept the veracity of his evidence. In addition, Messrs. Russell and Barker gave evidence to corroborate the evidence of Mr. Mace concerning both the condition of the WeDrive business in December 2017 and the discovery that WeDrive did not own all of the necessary intellectual property. Mr. Russell vividly told Mr. Mace on 18 December 2017 that "this was a disaster." I accept that this is what Mr. Russell generally said to Mr. Mace and I otherwise accept his evidence and that of Mr. Barker. 307 Fourthly, I would have inferred, in any event, that the objective failure of the WeDrive business and Mr. Flageul's serious mistake in not disclosing Contact Point's ownership of the relevant intellectual property would have supplied Mr. Mace with obvious and compelling reasons to dismiss Mr. Flageul. These problems vastly overshadowed each of the alleged complaints/inquiries said by Mr. Flageul to constitute the exercise of workplace rights, whether considered individually or in aggregate. Some, like the complaint about the debit card, I would have characterised as trivial in nature, when compared to the "disaster" that was WeDrive in December 2017. 308 Fifthly, the cross-examination of Messrs. Mace, Taylor, Barker and Russell did not, with very great respect, cause me to change my impression of the evidence they all gave. Strikingly, it was never put to Mr. Mace that the reason for Mr. Flageul's dismissal was one of the complaints or inquiries as alleged, or all of them in aggregate. And this was so, notwithstanding that this was a case where credit was so important an issue. The rule in Browne v. Dunn (1894) 6 R. 67 ordinarily obliges counsel to put to a witness the nature of the case that will be put that contradicts the evidence of that witness. Whilst Mr. Flageul's statement of claim set out his alleged reasons for his dismissal, I am not confident that Mr. Mace had notice of them; Mr. Mace was not questioned about those alleged reasons during his cross-examination: c.f. Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v. Visy Packaging Pty Ltd (No 3) (2013) 216 F.C.R. 70 at 120 [251]. The failure to observe the rule in Browne v. Dunn goes some way, in the particular circumstances of this case, to support the truthfulness of Mr. Mace's evidence, although I note that in civil proceedings that may not amount to very much: MWJ v. The Queen [2005] HCA 74; (2005) 80 A.L.J.R. 329 at 339 [40]. 309 Sixthly, I am not persuaded that the failure to plead a reason for Mr. Flageul's dismissal in the defence filed by the respondents results, in combination with an application of s. 361 of the F.W. Act, in any necessary rejection of Mr. Mace's evidence or to the inexorable failure of the respondents' case. This contention was only raised by Mr. Flageul in his closing submissions. It is true that the defence contains a "bare denial" to the allegation that Mr. Flageul was sacked because he had exercised a workplace right or rights. But it also pleaded that on 18 December 2017, Mr. Mace had confronted Mr. Flageul "about misrepresentations [Mr. Flageul] had made about the business and assets of [WeDrive]." I also find that Mr. Flageul already had substantial notice of the reasons as to why he had been dismissed. That is because I accept Mr. Mace's evidence of what he said to Mr. Flageul on 21 December 2017, which is set out in his first affidavit (sworn on 13 March 2019). It is also because of the contents of the letter giving notice of termination sent to Mr. Flageul on 22 December 2017, and the witness statement of Mr. Mace filed in May 2018 in the Fair Work Commission proceedings, and the affidavits sworn by Mr. Mace in this proceeding, the first of which was served over a year before the trial. This is not a case where Mr. Flageul was in any way taken by surprise during the trial before me. He had sufficient prior notice of the reasons for his dismissal. 310 Seventhly, I do not think that the contention, which had never been pleaded, that Mr. Flageul was in a "quasi-partnership" with Messrs. Mace and Taylor makes any difference to the outcome here. Whatever that term might mean, it does not bear upon my acceptance of Mr. Mace's evidence. 311 Finally, it follows that the respondents have demonstrated that none of the reasons for Mr. Flageul's dismissal included the making by him of the fifth alleged complaint/inquiry. If it matters, I am also satisfied that the respondents have shown that the reasons for Mr. Flageul's dismissal did not include, whether individually or in aggregate, the making of any of the other alleged complaints/inquiries relied upon by Mr. Flageul. 312 For the foregoing reasons, I would dismiss Mr. Flageul's adverse action claims.

Section 358 of the F.W. Act 313 Section 358 relevantly applies if an employer dismisses, or threatens to dismiss, an employee in order to engage that employee as an independent contractor to perform the same or substantially the same work under a contract for services. For the reasons I have already given, the respondents have demonstrated that Mr. Flageul was not dismissed for this reason. 314 Further, I find that Mr. Flageul was never offered a contract for services, whether to undertake substantially the same work that he performed as C.E.O. of WeDrive or otherwise. During January 2018, Mr. Flageul was working (when not on holiday) during his notice period. An attempt was made by Mr. Barker to consider hiring him to work either for WeDrive or M.S.S. Transport, but he never obtained any instructions to make such an offer to Mr. Flageul. I reject Mr. Flageul's evidence that he accepted an offer on 22 January 2018 and then worked in accordance with it on 23 and 24 January 2018. I also reject his evidence that Mr. Mace also made him an offer to be an independent contractor on 23 January 2018 which he then accepted. There is no contemporaneous evidence that supports these contentions, and I do not otherwise accept Mr. Flageul's recollection of what occurred, without more, as persuasive. That is because, amongst other things, he admitted during his cross-examination that he never got "certainty" about his role. As for Mr. Flageul's email of 29 January 2018 declining the "offer of consultancy", I find that it was either sent in a mistaken belief that such an offer had been made, or was a concoction on the part of Mr. Flageul. 315 Mr. Flageul's case based on s. 358 is therefore rejected.

Oppression 316 The essence of Mr. Flageul's claim for oppression is that he had been treated unfairly. He claims that he spent seven years trying to develop the app by applying his own time and money. By the end of 2017, he claims that he had been marginalised and then excluded from his role as C.E.O., unfairly dismissed, wrongly required to resign as a director and obliged to sell his shares for no consideration. Mr. Flageul, in his written submissions, expressed the issue to be decided as follows: The relevant issue before the Court is whether "reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision." 317 The quote in the foregoing passage was taken from the judgment of Brennan J. (as his Honour then was) in Wayde v. New South Wales Rugby League Ltd (1985) 180 C.L.R. 459 at 473. In Joint v. Stephens [2008] VSCA 210, Nettle J.A. (as his Honour then was), Ashley and Neave J.J.A. in the Victorian Court of Appeal very usefully summarised the applicable law at [134]-[138] as follows: The expression 'oppressive or unfairly prejudicial or unfairly discriminatory against' is considered to be a compound expression. It is concerned with 'commercial unfairness'. As Brennan J explained in Wayde v New South Wales Rugby League: Section [320] requires proof of oppression or proof of unfairness: proof of mere prejudice to or discrimination against a member is insufficient to attract the court's jurisdiction to intervene.... At a minimum, oppression imports unfairness and that is the critical question in the present case. ... ...The question of unfairness is one of fact and degree which [s 320] requires the court to determine, but not without regard to the view which the directors themselves have formed and not without allowing for any special skill, knowledge and acumen possessed by the directors. The operation of [s 320] may be attracted to a decision made by directors which is made in good faith for a purpose within the directors' power but which reasonable directors would think to be unfair. The test of unfairness is objective and it is necessary, though difficult, to postulate a standard of reasonable directors possessed of any special skill, knowledge or acumen possessed by the directors. The test assumes (whether it be the fact or not) that reasonable directors weigh the furthering of the corporate object against the disadvantage, disability or burden which their decision will impose, and address their minds to the question whether a proposed decision is unfair. The court must determine whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision. More precisely, as Young J put it in Morgan v 45 Flers Avenue Pty Ltd: ... as a result of the decisions in New Zealand in Thomas v H W Thomas Ltd; in England in Re Bovey Hotel Ventures Ltd; Re R A Noble & Sons (Clothing) Ltd; and Re London School of Electronics Ltd and in Australia in Wayde v NSW Rugby League Ltd, it has been accepted that one no longer looks at the word 'oppressive' in isolation but rather asks 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: see Wayde's case per Brennan J; per majority. In my view a court now looks at [the expression] as a composite whole and the individual elements mentioned in the section should be considered merely as different aspects of the essential criterion, namely, commercial unfairness. Consequently, the task of deciding whether there has been commercial unfairness is to be undertaken in the context of the particular relationship which is in issue. As is observed in Ford, the assessment of commercial unfairness will not infrequently involve a balancing exercise between competing considerations. In turn that may involve an examination of the conduct of the applicant. Thus, as Nourse J said in Re London School of Electronics Ltd in relation to the English oppression provision: 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. In re R.A. Noble & Sons (Clothing) Ltd. 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 under subsection (3). 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. In Noble the prejudicial conduct consisted in one director running a quasi-partnership company virtually as his own, and it was held that that conduct was not unfair because the applicant had not shown any interest in being involved in management or decision making. It is not clear whether Nourse J also had in mind the sort of case in which a respondent reacts with prejudice to an applicant because of prejudicial conduct by the applicant. But in Morgan v 45 Flers Avenue Pty Ltd, which did involve that sort of reactive prejudicial conduct, Young J said in considered obiter that it does: I should indicate that in my view the approach taken by Nourse J in Re London School of Electronics Ltd is the correct one, that is that such conduct may either render the conduct on the other side not unfair or may affect the relief which the court thinks fit to grant and that there is no overriding requirement in a case under [the oppression section] that the plaintiff should come to the court with clean hands. Finally, because the test of commercial fairness is an objective test, it is unnecessary for an applicant to prove that the respondent knew or believed that the impugned conduct was unfair. Nevertheless, it has been said that the question of whether a respondent's conduct was unfairly prejudicial is to be assessed by reference to what is known by a respondent at the time of the conduct. So, therefore, it has been held that to take a step on the basis of an honest belief of fact may not amount to acting unfairly even though it is subsequently discovered that the belief was mistaken. Conversely, logic would tend to imply that conduct which would be adjudged unfair by reference to what is known by a respondent at the time of the conduct could be viewed as fair in light of facts which are in existence at the time of the conduct but only later discovered. But it is unnecessary for the purposes of this case finally to decide that point. (Footnotes omitted and emphasis in original.) I gratefully adopt the foregoing summary. 318 It is useful if I start with the position of the respondents which they summarised as follows: In light of the matters submitted above, viewed objectively and taking into all [sic] of the evidence … there was no oppression on the facts: (a) It was Mr Mace and Mr Taylor who were deceived by Mr Flageul into investing in WeDrive thinking they were obtaining the IP in the App. It was Mr Mace who invested $400,000 and did not recover it; (b) It was Mr Flageul and his partner Ms O'Donovan who profited from those events, being remunerated on salaries of $150,000 and $100,000 per annum in circumstances where they had not been paid for at least 8 months prior on Mr Flageul's account; (c) It was Mr Mace and Mr Taylor who were worried about the solvency and financial health of WeDrive, not Mr Flageul who despite being a director said he did not know what its financial position was; (e) It was Mr Mace who repeatedly tried to engineer mergers and arrangements to improve the performance of WeDrive to the benefit of all its members; (f) It was Mr Flageul who repeatedly incurred unbudgeted costs that placed WeDrive in financial peril; (f) In all the circumstances, upon the discovery that they had been misled, it was not oppressive of Mr Mace and Mr Taylor to offer Mr Flageul the opportunity to purchase their shares, and to engineer an agreement for the sale of his shares as well as their own in a company which they considered to be facing insolvency. (Footnotes omitted.) 319 Mr. Flageul submitted that from September to December 2017, he was excluded from the management of the WeDrive business. He submits that he was deprived of the ability to manage, monitor and report on the financial operation and performance of WeDrive. He says his debit bank card was cancelled without prior consultation. I accept that Mr. Flageul had no prior notice of the cancellation of his debit card. I otherwise reject these claims. There is no evidence that Mr. Flageul was excluded or marginalised from his role which I have found had a focus on the development of the app and the building of the WeDrive business. There are no contemporaneous records which show Mr. Flageul complaining about being excluded from the pursuit of these activities. In that respect, I do not think that preventing Mr. Flageul from accessing the Xero system deprived him of his ability to perform his role. I have accepted the explanation given by Mr. Taylor that it was not appropriate for him to have such access given that he was entitled to weekly management reports and given that Mr. Taylor was effectively the C.F.O. of WeDrive. I reject the suggestion that it was an inherent or intrinsic attribute of a person appointed as C.E.O. that she or he have access to the accounting software. All that matters is that they have an ability to read and interrogate the output or product of that software. More tellingly, Mr. Flageul was able to prepare his C.E.O. report for the inaugural 10 November 2017 board meeting without any apparent difficulty. There is simply no evidence that he complained that he could not prepare so important a document because he had been denied necessary access to the business records of WeDrive. In that respect, the report contains detailed financial data. Nor do I think that Mr. Taylor's refusal to disclose to Mr. Flageul, Mr. Nicholson's salary, or the failure to give him notice about the cancellation of his debit card, can be characterised as evidence that Mr. Flageul had been prevented from performing his role as C.E.O. Rather, the evidence, in particular in emails sent at the time, shows that Mr. Flageul was actively engaged as C.E.O. with a focus on innovation and sales up until the day of his termination. I otherwise observe that I have accepted Mr. Mace's explanation of what happened with the debit card. If I may say so, and with very great respect, the importance of that event has been very greatly exaggerated. 320 Mr. Flageul then contended that it was unfair that he was not told about the opportunity of doing a deal with Ugo Transfers. I respectfully disagree. I accept the explanation that the consideration of that possibility was at such an embryonic stage that it was practical for it to be considered first by the M.S.S. Group before being considered by WeDrive. As it happens, this possibility never developed beyond that embryonic stage; there was nothing to tell Mr. Flageul. Mr. Flageul then complained that the proposed merger between WeDrive and M.S.S. Transport was discussed by M.S.S. Group executives such as Messrs. Mace, Barker and Russell, and by Mr. Taylor in emails before he was informed of the proposal. This complaint has no merit. The fact is that the proposal went to the WeDrive board and Mr. Flageul voted in favour of it. There is no evidence that he complained at the time about the process which led to the WeDrive board backing a possible merger with M.S.S. Transport. 321 Mr. Flageul then contended that after the 10 November 2017 board meeting he was "sidelined" as C.E.O. and had to report to Mr. Barker. As discussed above, there was conflicting evidence about the role of Mr. Barker in November and December 2017. Mr. Russell did not consider him to be the new "C.E.O." and no such formal appointment was ever made. Mr. Barker did consider himself the "C.E.O." and I accept he took on a leadership role. But in my view, it was a leadership role very much focussed on seeing whether the WeDrive business could be salvaged with some form of "merger", synthetic or otherwise, with M.S.S. Transport. It is otherwise unnecessary to resolve this issue. That is because there was clear evidence that Mr. Flageul wanted to work for and report to Mr. Barker. Until Mr. Flageul left WeDrive the relationship between them appeared to be warm and respectful. The text messages I have set out above bear this out. When Mr. Flageul texted Mr. Barker on the day of his dismissal to say, "I understand I'll be working with/for you, which is what I want," he was expressing a state of contentment; there is no suggestion that Mr. Barker's leadership was unfair. In any event, throughout all this time there is no evidence that Mr. Flageul had ceased to work on his core responsibilities of innovation and sales. There is no evidence of him complaining that he had been usurped by Mr. Barker. 322 Mr. Flageul next contended that he was excluded from the decision not to proceed with the merger. I disagree. The clear evidence is that the M.S.S. Group did not want to merge with WeDrive. By December 2017, the merger proposal considered by WeDrive at its November board meeting had already been abandoned; at most the M.S.S. Group was by then only considering some form of back office union to save costs. I otherwise accept that on 20 December 2017, Mr. Flageul was not copied in on Mr. Mace's email concerning another proposal involving the full acquisition of WeDrive by M.S.S. Transport and the possible issue of shares to him. But that is of no moment. That is because at the WeDrive board meeting the following day, Mr. Flageul was given the opportunity to buy the other shares in WeDrive for $1. That same opportunity was given to Messrs. Taylor, Russell, Mace and Barker. But Mr. Flageul declined to take advantage of this opportunity. It is also because the proposal outlined by Mr. Mace in his email went nowhere. 323 Mr. Flageul then submitted that he was summarily dismissed with no "prior warning or consultation." In my view, having regard to my findings about why Mr. Flageul was dismissed, this was not unfair or oppressive. He was given the opportunity to complete his period of notice of four weeks. 324 Mr. Flageul next complained that he was threatened with an insurance fraud lawsuit unless he sold his WeDrive shares for $1. He said that this claim was supported by his evidence that a Management Liability Insurance policy had been purchased on 22 December 2017. For reasons I have already given, I am not persuaded that these events took place. I accept that it is likely that Mr. Mace thought of suing Mr. Flageul and, as an expression of anger, probably told Mr. Flageul that this might or would happen. But that, I infer, is as far as it went. I also accept that a payment was made to Honan Insurance Group Pty Ltd on 22 December 2017. But again, the evidence does not establish what this payment was for and the hearsay evidence led by Mr. Flageul about this matter does not refer to the purchase of a policy of insurance. 325 Mr. Flageul next submitted that it was unfair that he received no "consideration" for the sale of his shareholding in WeDrive. In that respect, there was some confusion about whether Mr. Flageul had ever signed the share transfer form sent to him, although Mr. Flageul otherwise accepted that he was no longer the owner of any shares in WeDrive. He also signed the Heads of Agreement, set out above. It specifies that the vendors (which include Mr. Flageul as trustee of the We Drive Melbourne Trust) were to be paid in aggregate $1 to "be allocated in a manner agreed by the Sellers". Mr. Flageul has taken no steps to receive his consideration. It follows that it cannot really be said that he sold his shares for "no consideration." I have already found that because WeDrive had incurred very substantial losses which had been booked in its profit and loss account, it would have been insolvent but for the cash which remained from Mr. Mace's investment. Mr. Flageul made no contention about the presence of that cash at bank. I also accept that Mr. Flageul declined an offer to purchase WeDrive for $1 and I further accept that the same offers were made and then declined by Messrs. Mace and Taylor. Mr. Flageul led no expert valuation evidence to demonstrate that WeDrive was worth more than $1, and he did not establish that the WeDrive business has since become valuable or has generated any revenue for the M.S.S. Group. I am also satisfied that Mr. Mace lost a substantial amount of money when he invested in WeDrive. In these circumstances, in my opinion a sale of shares for nominal consideration was commercially sound and fair. 326 Before me in closing, senior counsel for Mr. Flageul emphasised that I should focus on the unfairness to Mr. Flageul in the context of him being in a "quasi-partnership" with Messrs. Mace and Taylor. Leaving aside the fact that this had not been pleaded, I understand the point that was being made. It bore upon control of WeDrive and Mr. Flageul's alleged exclusion from the management of its business. However, this point lost all force because of the factual and other findings I have made above. 327 In closing written submissions, Mr. Flageul for the first time submitted that it was not proper for him to be dismissed by Mr. Mace who, through his company, was the majority shareholder of WeDrive. It was submitted that this was a matter that should have been decided at a properly constituted board meeting. Alternatively, this matter should have been decided in a shareholders' meeting in accordance with WeDrive's constitution and subject to the contractual agreements which bound the parties. The latter I took to be a reference to the Subscription and Shareholders' Deed. Once again, it was procedurally unfair for this point to have been raised so late and without prior notice. In any event it has no merit. Mr. Flageul never complained in December 2017 that Mr. Mace did not have the authority to terminate his employment. He did not call for a board meeting to consider this issue. He did not call for a shareholders' meeting. He has not asserted any breach of the Subscription and Shareholders' Deed. Rather, he accepted his fate at the time. That Mr. Flageul's employment was terminated in a more informal way is hardly surprising for a company with only three shareholders and three directors. 328 I accept that Mr. Flageul and Ms. O'Donovan were each paid a salary by WeDrive. Inferentially, this was funded largely by the funds Mr. Mace had contributed to WeDrive. In Mr. Flageul's case he was to be paid $150,000 per annum. In this sense, I accept that he profited to an extent from WeDrive. I also accept that it was wrong for Mr. Flageul not to have disclosed Contact Point's ownership of the intellectual property associated with the app. But for Mr. Mullins' determination, this issue may never have been discovered. Mr. Flageul agreed that it was "madness" on his part to have failed to make this disclosure. I find that Messrs. Mace and Taylor formed the view that Mr. Flageul had misled them about this issue. I also find that Mr. Mace made a number of very genuine attempts to save WeDrive. He pushed for several different types of merger with M.S.S. Transport in a bona fide attempt to salvage WeDrive's business, and thus to look after Mr. Flageul's interests. 329 For the foregoing reasons and on the facts as I have found them, reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors here, and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision would impose on a member on the other hand, would not have decided that the treatment of Mr. Flageul in 2017 and 2018 by WeDrive and its other directors was unfair for the purposes of s. 232 of the Corporations Act.

Unconscionability 330 Mr. Flageul in general terms submitted that he suffered in 2017 from a number of special disadvantages and that Messrs. Mace and Taylor had taken advantage of these in terminating his employment, and by having Mr. Flageul sell his shares in WeDrive for $1. 331 In the course of exchanging their closing submissions, the parties agreed that the applicable law for the purposes of applying s. 20 of the A.C.L. was contained in the following summary of Colvin J. in Australian and Consumer Commission v. Quantum Housing Group Pty Ltd (No 2) [2020] FCA 802 at [19]-[23] and [28]-[29]: In Australian Securities and Investments Commission v Kobelt [2019] HCA 18, the High Court considered whether the conduct in that case contravened the statutory prohibition against unconscionable conduct expressed in s 12CB(1) of the Australian Securities and Investments Commission Act 2001 (Cth). It is a provision of the same character and has the same origins as that contained within s 21 of the ACL. In Kobelt it was claimed that a system of commercial dealing by which people who were socially and economically vulnerable were allowed to book-up credit mostly to fund the supply of second-hand motor vehicles (but also for the supply of groceries and fuel) was unconscionable. The Court was split as to the principles to be applied and the outcome. Kiefel CJ and Bell J at [14] stated that the term unconscionable is to be understood as bearing its ordinary meaning and proscribes conduct 'that objectively answers the description of being against conscience'. Their Honours then cited the following values as informing the standard of conscience fixed by the statute (quoted from the reasons of Allsop CJ in Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199 at [296]): ... certainty in commercial transactions, honesty, the absence of trickery or sharp practice, fairness when dealing with customers, the faithful performance of bargains and promises freely made, and: 'the protection of those whose vulnerability as to the protection of their own interests places them in a position that calls for a just legal system to respond for their protection, especially from those who would victimise, predate or take advantage'. Their Honours then referred to unconscionable conduct as requiring 'not only that the innocent party be subject to special disadvantage, but that the other party must also unconscientiously take advantage of that special disadvantage' and observing that this 'has variously been described as requiring victimisation, unconscientious conduct or exploitation': at [15]. Therefore, in the view of their Honours an essential part of the provision was the protection of the vulnerable and the conduct had to involve taking advantage of that vulnerability in a manner that might be characterised as predatory or exploitative. Gageler J described the statute as operating to prescribe a normative standard of conduct to be administered in the totality of circumstances: at [87]. His Honour emphasised 'the gravity of the conduct necessary to be found by a court in order to be satisfied of a breach of that standard': at [88]. The 'conduct proscribed by the section as unconscionable is conduct that is so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience': at [92]. Further, '[f]or a court to pronounce conduct unconscionable is for the court to denounce that conduct as offensive to a conscience informed by a sense of what is right and proper according to values which can be recognised by the court to prevail within contemporary Australian society': at [93]. Of significance is his Honour's description of unconscionable conduct as being worthy of condemnation because of its gravity in the sense that it was far outside what was acceptable. Keane J required a scrutiny of the exact relations established between the parties: at [115]. His Honour found that in the particular case, it had not been established that the book-up system conducted by Mr Kobelt 'exploited his customers' socio‑economic vulnerability in order to extract financial advantage from them'. His Honour declined to find that Mr Kobelt actually took advantage of any increased vulnerability of his customers or acted with predatory intent with a view to do so: at [116]. His Honour found that unconscionable conduct required an element of exploitation, variously described as exploitation, victimisation, unconscientious conduct or a predatory state of mind: at [118]. This was said to follow from the choice of the legislature to use the 'morally freighted' term of unconscionability: at [119]. … The members of the Court who were in the minority in finding that the conduct of Mr Kobelt was unconscionable (Nettle, Gordon and Edelman JJ), did not favour an interpretation of the standard that required a high degree of moral disapprobation. Kiefel CJ, Bell and Keane JJ emphasised the need for victimisation, exploitation or a predatory state of mind. Kiefel CJ and Bell J referred, with apparent approval, to the view of the Full Court of this Court that moral obloquy had a role to play but was not a substitute for the statutory words: at [60]. Keane J found that the statute 'imports the "high level of moral obloquy" associated with the victimisation of the vulnerable': at [118]. Gageler J recanted the use of the term moral obloquy for the reason that it 'has the potential to be misleading to the extent that it might be taken to suggest a requirement for conscious wrongdoing': at [91]. However, as noted above, his Honour expressed the view that for conduct to be unconscionable it must be so far outside societal norms of acceptable commercial behaviour as to warrant condemnation as conduct that is offensive to conscience. Therefore, the majority view supports the adoption of a standard that requires exploitation of disadvantage by a party in a stronger position by conduct that is well outside the bounds of what is generally seen to be moral, right or acceptable commercial behaviour. It is not every instance where a person in a stronger commercial position gains an advantage by reason of that position over a person in a weaker or disadvantaged position that is unconscionable. It is not enough that the dealing might be described as unfair or unreasonable. Rather, unconscionable conduct involves dealing with those who are vulnerable in a manner that exploits that vulnerability by engaging in conduct that may be plainly or obviously criticised when viewed through the lens of an understanding of proper commercial behaviour according to prevailing norms and standards. The foregoing concerns s. 21 of the A.C.L. and not s. 20. However, given the parties' agreement, I am content to rely upon the foregoing in considering the application of s. 20 in the circumstances of this case. 332 Because knowledge of the alleged disadvantages of Mr. Flageul was in issue before me, I refer also to Thorne v. Kennedy (2017) 263 C.L.R. 85, where Kiefel C.J., Bell, Gageler, Keane and Edelman JJ. said at 102-103 [37]-[38]: There was no controversy on this appeal concerning the principles of unconscionable conduct in equity. Those principles were recently restated by this Court in Kakavas v Crown Melbourne Ltd. A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage "which seriously affects the ability of the innocent party to make a judgment as to [the innocent party's] own best interests". The other party must also unconscientiously take advantage of that special disadvantage. This has been variously described as requiring "victimisation", "unconscientious conduct", or "exploitation". Before there can be a finding of unconscientious taking of advantage, it is also generally necessary that the other party knew or ought to have known of the existence and effect of the special disadvantage. (Footnotes omitted and emphasis added.) 333 It follows that Mr. Flageul needed to demonstrate that either Messrs. Mace or Taylor had actual knowledge of his alleged disadvantages or ought to have known of their existence. As will be seen, I was not satisfied that some of the alleged disadvantages existed. 334 Mr. Flageul contended that he was suffering from a number of disadvantages in the second half of 2017. They were as follows: (a) Mr. Flageul's depression and anxiety. I have found that Mr. Flageul may have been depressed in 2017 and that he was certainly at risk of depression during his time at WeDrive. However, the text messages sent between him and Mr. Barker from 21 December 2017 show no signs of this. Prior to this, Mr. Mace has said that Mr. Flageul could be "erratic." But there is nothing in the emails Mr. Flageul sent, or from his course of conduct, that would have put a reasonable person on notice that he was suffering from anxiety and depression. There is no evidence that any of Messrs. Mace, Taylor, Russell or Barker sent emails or texts to Mr. Flageul to express concern about his mental state. I have already found that these individuals had no actual knowledge of Mr. Flageul's mental illness; I have also found that there was no basis for the contention that they ought to have known about his mental illness. It follows that neither Messrs. Mace nor Taylor could have taken unconscientious advantage of this disadvantage, assuming that it existed in 2017. (b) Mr. Flageul's relatively weak financial position. With respect, that was not shown to be the case. The reference in Mr. Flageul's written closing submissions to a transcript reference reveals only an unsubstantiated assertion. (c) Mr. Flageul's weak bargaining position as a minority shareholder. This was never proven and I would not infer it simply from the fact that Mr. Flageul owned only 20% of WeDrive. A shareholder is not in a position of vulnerability of the kind that would merit equitable intervention merely because they do not own a majority of the issued shares of a company. (d) Mr. Flageul's relative ignorance of business and finance as compared to the much greater business experience of Mr. Taylor and Mr. Mace. I am prepared to infer that Messrs. Taylor and Mace were more experienced businessmen than Mr. Flageul. But that inference does not support a conclusion that Mr. Flageul was therefore in a position of special disadvantage. Again, equity does not intervene merely because some parties are more experienced than others. In any event, Mr. Flageul was dismissed because of his own conduct in failing to disclose Contact Point's ownership of the intellectual property associated with the app and for the other reasons set out above. None of these reasons betrayed an exploitation of Mr. Flageul's relative lack of business experience. I make the same conclusion about the sale of the shares for $1. It is well to recall that it is not just Mr. Flageul who sold his shares; Messrs. Taylor and Mace (through their investment companies) also sold their shares (although I accept that Mr. Mace nonetheless retains a diluted indirect economic interest in WeDrive from the shares he holds in M.S.S. Group). It has not otherwise been shown that WeDrive's business at this time was worth more than $1. (e) Mr. Flageul's sole source of income was his position as C.E.O. of WeDrive. With respect, that was not shown to be the case. The reference in Mr. Flageul's written closing submissions to a transcript reference does not, when examined, refer to this issue. (f) Mr. Flageul's "marginalisation" from his role as C.E.O. and his treatment as being, in effect, "some sort of technology and customer relations/solutions manager." Again, and with respect for the reasons already given, this was not shown to be the case. To the extent that Mr. Barker assumed a leadership role in WeDrive, this was something Mr. Flageul wanted. (g) The lack of notice given to Mr. Flageul that he was to be dismissed. With respect, absent other factors, such as knowledge of Mr. Flageul's depression and anxiety, I cannot see how surprise in and of itself created for Mr. Flageul a special disadvantage that was exploited. Giving Mr. Flageul notice would have made no difference to the outcome of his dismissal, and none was suggested by Mr. Flageul. (h) Telling Mr. Flageul on 21 December 2017 that there was no longer going to be a merger between WeDrive and M.S.S. Transport. With great respect, I do not understand how the receipt of this information led to Mr. Flageul suffering from a special disadvantage that was exploited. The merger proposal approved by WeDrive's board on 10 November 2017 had long been discarded. (i) The failure to include Mr. Flageul in the email sent by Mr. Mace to Mr. Russell and Mr. Taylor on 20 December 2017 about the future of WeDrive. This was described as an act of excluding Mr. Flageul "from management." With respect, I disagree. The email was sent by Mr. Mace in his capacity as an M.S.S. Group executive to other M.S.S. Group executives. It was thus an internal M.S.S. Group email, setting out its proposals for WeDrive. Mr. Flageul, not being an M.S.S. Group executive, was not thereby wrongly excluded "from management." (j) The threat to sue Mr. Flageul unless he transferred his shares in WeDrive. While I have found that Mr. Mace may have told Mr. Flageul on 21 December 2017 that he was going to sue him in a general sense, Mr. Flageul did not establish the making of this specific threat. (k) Giving Mr. Flageul "only 10 minutes" to consider whether to sell his shares in WeDrive. I do not think that this period of time was ever established. However, Mr. Mace recalled that Mr. Taylor said. '[w]hy don't you take a break." I find that Mr. Flageul took this break. But, if anything, this is hardly evidence of the exploitation of a special disadvantage. That is especially so when one recalls that Mr. Flageul received an offer to buy the shares of Messrs. Mace and Taylor for $1. It was also entirely open to Mr. Flageul to have declined to sell his shares, or to have asked for additional time to consider his options. He did not do this and that was his choice. I infer that his decision to sell his WeDrive shares, including the decisions made also by Messrs. Mace and Taylor to sell their shares, took place in what might be described as "pressure cooker" conditions. I also accept that Mr. Flageul was no doubt feeling deflated and shocked about his dismissal. But, as the texts sent that day and following to Mr. Barker reveal, he had not lost his wits. 335 Mr. Flageul submitted that Messrs. Mace and Taylor knew, or ought to have known, about the foregoing special disadvantages. In particular, he alleged that Mr. Mace's treatment of him was "highhanded." I accept that Messrs. Mace and Taylor probably knew that they were more experienced businessmen than Mr. Flageul. I also accept that they knew about the following matters: that Mr. Flageul was given no prior notice of his dismissal; that Mr. Flageul had not been included in the 20 December 2017 email; that Mr. Flageul had been told that the merger was no longer going to proceed; and that Mr. Flageul had taken a break at the meeting on 21 December 2017. I also accept that Messrs. Taylor and Mace must have known that the dismissal of Mr. Flageul would necessarily affect him financially. This follows from most dismissals from employment. 336 I otherwise reject the contention made by Mr. Flageul that Messrs. Mace and Taylor knew that the value of $1 was "grossly inadequate consideration for the value" of the WeDrive shares. For the reasons I have already given, it was never established that this was grossly inadequate consideration. In his written closing submissions, Mr. Flageul sought to rely on the setting of WeDrive's value at $1,600,000 in the Memorandum of Understanding as well as in the M.S.S. Transport and WeDrive Merger Discussion document considered by the WeDrive board on 10 November 2017. In that respect, he also relied upon the statement in that Discussion document that referred to the value of his shares in WeDrive as being $320,000. For the reasons I gave earlier, I do not consider those figures to be evidence of the value of WeDrive as at 21 December 2017. They were used for discussion purposes. They cannot supplant the figures disclosed in WeDrive's actual accounts for the period September to November 2017. 337 Mr. Flageul also sought to prop up the asserted value of his shares in WeDrive as at 21 December 2017 by referring to cl. 14 of the Subscription and Shareholders' Deed. This clause dealt with certain defined circumstances which required a shareholder in WeDrive to sell his or her shares. Clause 14.3 addressed the determination of a sale price for the shares which depended upon the circumstances dictating sale. Clause 14.3(b)(ii) was relevantly in the following terms: [W]here Flageul is the Defaulting Shareholder and is a Good Leaver, the greater of: (A) $400,000; or (B) the price agreed in writing by the Defaulting Shareholder and the Board; 338 The term "Good Leaver" was defined in the deed to refer to a "Management Shareholder" (who I take to include Mr. Flageul) who ceases to be, relevantly a director, more than 12 months after acquiring shares in WeDrive because of a series of defined reasons, such as death, retirement or dismissal "without cause." Plainly, cl. 14.3 could not have been invoked by Mr. Flageul on the facts here. I do not otherwise consider that this clause can be relied upon as a surrogate for expert valuation evidence. It was not put to any witness and cannot be used to contradict the state of WeDrive's financial performance as disclosed in its accounts for the period September to November 2017, and which I have described earlier in my reasons. 339 It follows that for the foregoing reasons, the factual substratum of Mr. Flageul's case concerning unconscionable conduct has not been made out. I otherwise find, based upon my earlier findings, that neither Messrs. Mace nor Taylor, nor anyone else, exploited a special disadvantage to which Mr. Flageul was subject by "conduct that is well outside the bounds of what is generally seen to be moral, right or acceptable commercial behaviour", to use the language of Colvin J. in Quantum Housing Group. Indeed, I find that Mr. Flageul was not exploited. To the contrary, he was dismissed for good reasons and it has not been demonstrated that he had sold his shares for an unfair price.

Disposition 340 For the foregoing reasons, each of Mr. Flageul's claims in adverse action, under s. 358 of the F.W. Act, in oppression and under s. 20 of the A.C.L. are hereby dismissed.

Costs 341 Mr. Flageul's multiple causes of action were all contained in one proceeding commenced in this Court. This raises an issue as to whether the Court has the power to award costs in respect of the claims made concerning oppression and unconscionability notwithstanding the operation of s. 570 of the F.W. Act, which I have set out above. This was an issue I addressed in The Environmental Group Ltd v. Bowd (No 2) [2019] FCA 1227. In that case the applicant had brought an adverse action claim as well as a claim under the "whistleblower" provisions in Pt. 9.4AAA of the Corporations Act. I decided I was bound by the decision of the Full Court of this Court in Melbourne Stadiums Ltd v. Sautner (2015) 229 F.C.R. 221 which concerned the application of s. 570. In that case, claims had been made under the F.W. Act and under the common law. Justices Tracey, Gilmour, Jagot and Beach said at 253‑254 [155]-[157]: Section 570, in its present form, came into force on 1 January 2013. Unlike s 824 which applied "to a proceeding ... in a matter arising under this Act" it applied "to a proceeding 'in relation to' a matter arising under this Act ...". (emphasis added). The word "proceeding" is not defined in the Fair Work Act. In the context of s 570 it bears a different meaning from the word "matter". "Matters", in the sense of claims or causes of action or their underlying controversies, are raised in the "proceeding" or "proceedings" which is or are prosecuted in the Court: cf Shea v Energy Australia Services Pty Ltd (No 7) [2014] FCA 1091 at [22] (Jessup J). As Gray J said in Geneff v Peterson (1986) 19 IR 40 at 90, in dealing with the construction of s 197A of the Conciliation and Arbitration Act 1904 (Cth) (a predecessor of s 570): [T]he section operates in relation to a 'proceeding'. There is only one proceeding before the Court, although that proceeding involves a number of separate claims, each of which might have been the subject of a separate proceeding. ... In my view, it is impossible to split the claims within a proceeding for the purpose of the application of s 197A. See also Qantas Airways Limited v Transport Workers Union of Australia (No 2) (2011) 211 IR 119 at 182 (Moore J); Grout v Gunnedah Shire Council (No 3) (1995) 59 IR 248 at 260-261 (Moore J); Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62 at 65 and 69. There was a single proceeding which was commenced and prosecuted to judgment in the County Court. Mr Sautner made claims under the Fair Work Act and at common law. The claims under the Fair Work Act were "matters" within the meaning of s 570(1) of the Fair Work Act. The proceeding was, as a result, a proceeding in relation to a matter arising under that Act. Section 570(1) operated to preclude the Court from ordering MSL ("another party to the proceedings") to pay any costs incurred by Mr Sautner in prosecuting his claims unless he could satisfy the Court that one of the exceptions, provided for in s 570(2), applied. 342 In Bowd (No 2) I decided, following Sautner, that what was critical was the identification of what proceeding was before the Court. One then asks whether the proceeding was in relation to a "matter" arising the F.W. Act. If the proceeding is of that kind, s. 570 of the F.W. Act is engaged. 343 The same conclusion applies here. As already mentioned there was only one proceeding before the Court. In my view, this proceeding, which raised adverse action claims, was necessarily one "in relation to a matter arising under" the F.W. Act. It follows that there should be no order for costs, unless an exception in s. 570(2) is made out. Nothing was said about their operation by the respondents. However, as it happens, I am not satisfied that the proceeding was vexatious or without reasonable cause. It was a hard fought case. Nor am I satisfied that Mr. Flageul committed an unreasonable act or omission that caused the respondents to incur costs. None was suggested. Nor is there any suggestion that Mr. Flageul unreasonably refused to participate in a matter before the Fair Work Commission. 344 Section 570 does not prevent a Court from ordering the payment of costs incurred by a non-party. Here, I note that on 6 May 2020 Registrar Ryan ordered the payment of $13,152 on account of loss and expense in complying with subpoenas issued to M.S.S. Transport and Messrs. Russell and Barker. Mr. Flageul has not complied with this order. It has been brought to my attention that Mr. Flageul is of the view that he should not have been ordered to pay these costs. He also appears to be of the view that this Court needs to make a further order for him to be liable to pay them. Yet nothing was said about this in argument before me, and there already exists an order of this Court requiring payment. Mr. Flageul must comply with that order forthwith. 345 The proceeding is otherwise dismissed with no order as to costs. I certify that the preceding three hundred and forty-five (345) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Steward.

Conciliation and Arbitration Act 1904(Cth)

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Judgment (26 paragraphs)

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Cases Cited (23)

Cited By (5)