GREGORY JAY PARKER and PURCOM NO 34 PTY LIMITED (IN LIQUIDATION) (ACN 006 794 672) v ROBERT FREDERICK LEE TUCKER, RICHARD JAMES TUCKER, PURCOM NO 34 ADMIN PTY LIMITED

2 On 15 April 2010, the Court conducted a hearing about the appropriate relief. Relief was sought by the Plaintiffs against Tucker Senior, Richard Tucker, Admin, the Receiver and Danks. No relief was sought against Zissimou, PTC or Conlon. The Plaintiffs served a copy of the submissions and proposed Orders on Tucker Senior, Richard Tucker, Admin, the Receiver and Danks. Danks opposed the Orders sought against her and her solicitors filed and served correspondence proposing alternative Orders as against her. The Receiver's solicitors also objected to some aspects of the form of Orders proposed by the Plaintiffs and filed and served correspondence proposing alternative orders. Despite having notice of the further hearing, neither Tucker Senior nor Richard Tucker appeared or made any submissions. In addition to the evidence tendered at the hearing on 1, 2 and 3 March 2010, the Plaintiffs also sought to rely upon a summary of receipts and payments of Purcom and another summary of receipts and payments of Admin. A copy of the two summaries was annexed to the Plaintiffs' submissions. 3 During the course of the hearing on 15 April 2010, it became apparent that several of the Plaintiffs' proposed Orders would affect JAX Quickfit, which holds a registered fixed and floating charge over all the assets of Purcom. At the end of the hearing, arrangements were made for the affected parties and JAX Quickfit to attend a mediation to discuss the final form of the Orders to give effect to the Reasons. At the conclusion of the mediation, further Orders were proposed and served on all parties, the Receiver and JAX Quickfit. The areas of dispute were then more limited. 4 I will deal with the form of the proposed declarations and Orders in turn.

DECLARATIONS OF BREACH OF FIDUCIARY DUTIES AND BREACH OF DUTIES UNDER SECTIONS 180(1), 181(1) AND 182(1) OF THE ACT BY TUCKER SENIOR AND RELATED DECLARATIONS 5 The Plaintiffs initially sought the following declarations: 1. A declaration that [Tucker Senior] breached his fiduciary duties and duties under ss 180(1), 181(1) and 182(1) of the [Act] which were owed to [Purcom] by embarking on a scheme designed to divert [Purcom's] assets and business undertaking away from [Purcom] to [Admin] by taking the steps set out in paragraphs [6] to [63] of the [Reasons]. 2. A declaration that [Richard Tucker] knowingly participated and assisted in [Tucker Senior's] scheme and breaches of duty to [Purcom]. 3. A declaration that [Admin] knowingly participated and assisted in [Tucker Senior's] scheme and breaches of duty to [Purcom]. 6 The declarations sought were pleaded in the Originating Process and reflected the findings in the Reasons. In particular: 1. the first declaration was sought in paragraph 1 of the Originating Process and reflects the findings in paragraphs [65], [71], [74] and [75] of the Reasons; 2. the second declaration was sought in paragraph 3 of the Originating Process and reflects the findings in paragraphs [85] and [87] of the Reasons; and 3. the third declaration was sought in paragraph 4 of the Originating Process and reflects the finding in paragraph [87] of the Reasons. 7 Having ascertained that the declarations were sought in the Originating Process and reflect findings in the Reasons, two further issues arise for consideration. Are the declarations necessary and if so, are they in an appropriate form? 8 The making of a declaration and the terms in which it should be framed are in the Court's discretion (see Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-9 per Gibbs J; and Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-2 and 596-7; AWB Ltd v Cole (No 6) (2006) 235 ALR 307 at [5]). However, any declaration made by the Court should reflect the final outcome of the case with certainty and precision: see Minister for Immigration and Ethnic Affairs v Guo Wei Rong (1997) 191 CLR 559 at 579 citing University of New South Wales v Moorhouse (1975) 133 CLR 1; Bass v Permanent Trustee Company Limited (1999) 198 CLR 334 at [49]; Australian Competition and Consumer Commission v Danoz Direct Pty Ltd (2003) 60 IPR 296 at [260] and K Dharmananda and A Papamatheos (eds), Perspectives on Declaratory Relief (2009) at 101. 9 In my view, it is appropriate for the Court to grant declarations of contravention by Tucker Senior, Richard Tucker and Admin. In the present case, the contravening conduct is serious. Two of the contravenors did not attend the trial. The third, Richard Tucker, attended for one day. Absent the making of the declarations, the only formal record of the disposition of the proceeding would be Orders for compensation and delivery up of equipment, without the basis for the Orders being stated: cf Goldberg and Jessup JJ said in Cruse v Multiplex Ltd (2008) 172 FCR 279 at [59]. It is therefore both appropriate and, in my view, necessary for the Court record to state with specificity what was the contravening conduct of each of Tucker Senior, Richard Tucker and Admin. That brings me to the form of declarations initially proposed by the Plaintiffs. They were inappropriate. They did not reflect the final outcome of the case with certainty and precision. 10 After the hearing, the Plaintiffs submitted an alternative form of declarations. In my view, the Court should grant the Plaintiffs those declarations in the amended form. They are in an appropriate form and are clear and precise. None of the defendants opposed the granting of these declarations.

DECLARATION OF TRUST 11 The Plaintiffs initially sought the following: 4. A declaration that [Admin] received the following trust property of [Purcom] in breach of trust: · the stock in trade set out in the document entitled "HO Stock on Hand Report" …valued at $49.635.34; · the equipment identified in cll 1.1(a) - (e) of the document entitled "Agreement for Sale of Equipment"…; · the furnishings, plant and equipment set out in the document entitled "Inventory of Furnishings, Plant and Equipment"… . 12 The declaration sought was pleaded in paragraph 5 of the Originating Process. The Plaintiffs submitted that the findings on which the proposed declaration was based are in paragraphs [45], [46], [87] and [89] of the Reasons. 13 Having ascertained that the declaration was sought in the Originating Process and reflected findings in the Reasons, two further issues again arise for consideration. Is the declaration necessary, and if so, is it in an appropriate form? In my view the declaration is necessary but the proposed initial form of declaration was inappropriate. That issue (the form of the declaration) has now been addressed. The form of declaration now sought by the Plaintiffs is certain and precise. It appropriately identifies the trust property. I would grant a declaration in the amended form. None of the defendants opposed the granting of this declaration.

RELIEF UNDER SECTION 588FF OF THE ACT 14 The Plaintiffs initially sought three orders under s 588FF of the Act as follows: 5 An order pursuant to s 588FF(1)(h) that the agreement styled "Agreement for the Sale of Stock" signed by [Tucker Senior] on behalf of [Purcom] and signed by [Richard Tucker] on behalf of [Admin] referred to in paragraph [31] of the Reasons, be declared void ab initio; 6 An order pursuant to s 588FF(1)(h) that the agreement styled "Agreement for the Sale of Equipment" bearing the date 1 March 2009 referred to in paragraph [45] of the Reasons, be declared void ab initio; 7 An order pursuant to s 588FF(1)(b) directing [Admin] and [the Receiver]…to transfer at no cost all of the trust property … which is in the possession of [Admin] to [Purcom]. 15 None of the defendants opposed the Court granting declarations in the terms of proposed Orders 5 and 6. The Receiver opposed an order in terms of proposed Order 7. He proposed an order in the following terms: 7. Subject to the payment of the liabilities, remuneration, costs and expenses of the receiver and manager of the property of [Admin] (Receiver's Costs), [the Receiver] transfer to [Purcom] such property identified below to the extent it is within the Receiver's possession, custody or control and not otherwise required to satisfy the Receiver's Costs: (a) in schedule 4 … excluding one hoist, the Ford Ute (registration no. UEZ 085) ("the Ford Ute") and the Holden Ute; (b) as the assets listed in a report prepared by Professional Valuation and Auction Services dated 30 October 2009 which is at schedule 5, excluding: · the Tecalemit 4 point hoist; · advanced automotive 2 point hoist; · the Ford Ute; · 1 Megabus Tower Pentium Computer (R) E5200; · 1 Megabus Tower Intel ® Core 2 Duo E8500; · 1 Lexmark E260d Monochrome Printer; · Brother MFC-7340 Printer/Scanner/Fax Machine; and · those assets which are listed in Schedule 4 and transferred pursuant to order 7(a), above. (c) as stock in schedule 6 … which is in the possession of [the Receiver] as at the date of these orders. 7A. The Receiver is authorised to realise any property of [Purcom] or [Admin] (Property), which is within his possession, custody or control to satisfy the Receiver's Costs, provided that if the Receiver realises any interests under the Lease referred to in Order 8 below, he must do so in accordance with the terms of the Lease. 7B. Nothing in these Orders will: (a) affect the Receiver's lien or right of indemnity over the Property, which is within his possession, custody or control, in respect of the Receiver's Costs; and (b) operate to make the Receiver liable for any obligation or liability of the [Admin]. 16 The Plaintiffs do not oppose the making of these Orders. In my view, subject to some minor amendments, the orders properly identify the property to be delivered up by the Receiver and also preserve the Receiver's statutory rights. No less importantly, the form of the order removes the uncertainties that were evident with the initial form of proposed order. I will make Orders substantively in those terms.

RELIEF IN RELATION TO THE LEASE 17 The Plaintiffs initially sought the following declaration in relation to the lease: 9 A declaration that [Admin] holds all of its rights as lessee under the lease of the premises located at 386 High Street, Prahran in the state of Victoria entered into with [Danks] dated 6 March 2009 (Lease) on constructive trust for [Purcom]. 18 The Plaintiffs also initially sought the following Orders: 10 An order that [Danks] forthwith execute all documents necessary to assign the Lease to [Purcom]. … 19 The Court notes the agreement between the [P]laintiffs and [Danks] that: (a) [Danks] will not rely upon the fact that [Admin] has a Receiver [and] Manager appointed to it or any other matter whatsoever as a basis for terminating the Lease at any time up until the Lease is assigned; (b) [Danks] will not rely upon the fact that [Purcom] is in liquidation as a basis for terminating the Lease once assigned; (c) [Parker] acknowledges that he will remain liable for all obligations under the Lease including the payment of rent, outgoings and liabilities and will provide a personal guarantee in respect of the liabilities of the [Purcom] as lessee under the Lease; (d) the liabilities of [Parker] under sub-paragraph (c), directly above, and the personal guarantee will only subsist whilst the [Purcom] is lessee and will not continue beyond any further assignment of the Lease. 19 The solicitors for Danks advised the Court that they objected to orders being made against Danks. Danks submitted alternative orders which deleted proposed Order 10 and amended proposed Order 19. (These orders were later renumbered but that fact may be put to one side). 20 Since then, there has been further discussion between the Plaintiffs, the Receiver and Danks. The Plaintiffs and the Receiver have agreed that a declaration should be made in the following terms: Without prejudice to the Receiver's lien and right of indemnity in respect of the Property, a declaration that [Admin] holds all of its rights as lessee under the lease of premises located at 386 High Street, Prahran in the State of Victoria entered into with [Danks] dated 6 March 2009 (Lease) on constructive trust for [Purcom]. In my view, that declaration is necessary and in an appropriate form. None of the other defendants opposed the granting of this declaration. 21 No agreement has been reached in relation to the matters the subject of the orders proposed in paragraph [18] above and those orders are no longer sought by the Plaintiffs.

EQUITABLE COMPENSATION 22 The Plaintiffs initially sought orders for equitable compensation to be paid to Purcom. The form of orders sought was amended by them and is now in the following terms: 10 An order that [Tucker Senior], [Richard Tucker] and [Admin] make equitable compensation to [Purcom] in an amount to be calculated by adding the following amounts: (a) [Parker's] costs of the liquidation of [Purcom], including the costs of the provisional liquidation in the sum of $104,217.00; (b) the [P]laintiffs' legal costs and disbursements of the liquidation (but not including the legal costs and disbursements of these proceedings which are to be taxed pursuant to Order 15 below) in the sum of $57,338.84; (c) creditor's claims in the sum of $506,528.71; (d) future economic loss in the sum of $601,616.50; (e) the sum of $43,607.74 being the difference between the value of the stock transferred in March 2009 in the sum of $49,635.34 and the stock on hand available to [the Receiver] upon his appointment as Receiver and Manager of [Admin] on 2 September 2009, being $6,033.60. 23 A number of principles are worth restating: 1. It is a "cardinal principle of equity" that the remedy is "fashioned to fit the nature of the case and the particular facts": Warman International Limited v Dwyer (1995) 182 CLR 544 at 559; see also Hill v Rose [1990] VR 129 at 143. 2. Where a breach of fiduciary obligation occurs, compensation is available in equity to make good the loss (Nocton v Lord Ashburton [1914] AC 932) and the plaintiff must elect between the remedy of equitable compensation and account of profits: Nocton [1914] AC 932 at 956-957; Warman 182 CLR 544 at 558; R Meagher, D Heydon, M Leeming, Equity: Doctrines & Remedies (4th ed, 2002) at 837. 3. Equitable compensation is assessed at the time of trial, with the full benefit of hindsight and common sense, not at the date of breach: Youyang Pty Limited v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at [35]; Re Dawson (deceased); Union Fidelity Trustee Co Ltd v Perpetual Trustee Co Ltd [1966] 2 NSWR 211 at 216; O'Halloran v RT Thomas & Family Pty Ltd (1998) 45 NSWLR 262 at 273 and 276. 4. The objective of equitable compensation is compensatory - to restore the principal to the position it was in prior to the breaches and to make good any loss caused by the fiduciary's wrongful conduct: see [75] of the Reasons; Nocton [1914] AC 932 at 952; Re Dawson (deceased)[1966] 2 NSWR 211; O'Halloran 45 NSWLR 262 at 272-273. No element of penalty is involved: R Meagher, D Heydon, M Leeming, Equity: Doctrines & Remedies (4th ed, 2002) at 837-839. 5. Unlike common law damages, equitable compensation is not limited or influenced by common law principles of remoteness of damage, forseeability or causation: Hill v Rose [1990] VR 129 at 144; Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534 at 556; O'Halloran 45 NSWLR 262 at 273. 6. However, there does have to be some causal connection between the breach of fiduciary obligation and the loss for which compensation is recoverable. It is necessary for the plaintiff to establish that the loss would not have occurred but for the breach: O'Halloran 45 NSWLR 262 at 275-6. The necessary enquiry is whether the loss would have happened had there been no breach, not whether the loss was caused by or flowed from the breach: O'Halloran 45 NSWLR 262 at 276-277. 24 In light of these principles, I am required to award equitable compensation to Purcom so as to put it back in the position it was in before the breach. It cannot recover compensation that would put it in a better position than if the breach had not occurred. As Spigelman CJ stated in O'Halloran 45 NSWLR 262 at 276-277, I consider that policy favours a stringent test in the circumstances of this case. 25 I will deal with each element of the claim for equitable compensation in turn.

Costs of the Liquidation 26 First, the Plaintiffs submitted that the costs and expenses of the liquidation (excluding legal costs of these proceedings) should form part of the equitable compensation claim. The Plaintiffs submitted that Purcom was entitled to these costs on the basis that it was necessary to restore Purcom to the position it was in prior to the breaches of fiduciary duty and to make good the loss occasioned by Tucker Senior, Richard Tucker and Admin's conduct. The Plaintiffs provided minutes of the meeting of creditors of Purcom which resolved that the costs and expenses of the liquidation were $104,217.00. 27 In my view, it is appropriate to order that Tucker Senior, Richard Tucker and Admin make equitable compensation to Purcom in the terms of proposed Order 10(a) (see [22] above). The loss (the costs) would not have been incurred if there had been no breach by Tucker Senior, Richard Tucker and Admin.

Legal Costs of the Liquidation 28 Secondly, the Plaintiffs sought to recover Purcom's legal costs and disbursements of the liquidation (excluding legal costs and disbursements of these proceedings). In the proposed Orders, the Plaintiffs sought to recover legal costs of the liquidation in the sum of $57,338.84. The documentary material tendered in relation to this head of claim was unsatisfactory. The documentary material in fact identified a different figure of some $89,165.48. Subsequently, the Plaintiffs' solicitors submitted that the correct figure was $69,801.83. 29 I am not satisfied that the Plaintiffs have established that Purcom is entitled to any amount. The Plaintiffs have had ample opportunity to provide the Court with an accurate (and consistent) claim but have failed to so and despite repeated opportunities to do so. The claim is rejected.

Creditors' Claims 30 Thirdly, the Plaintiffs sought to recover creditors' claims in the sum of $506,528.71. Those creditors' claims are, of course, claims against Purcom and it is that plaintiff, rather than the First Plaintiff as liquidator of Purcom, that has sustained the relevant loss. A list of creditors was provided to the Court. The creditors were divided into three categories - secured, partially secured and unsecured. I accept that the unpaid creditors would not be outstanding at the date of the trial if there had been no breach by Tucker Senior, Richard Tucker and Admin. The claims would have been paid in the ordinary course of Purcom's business or would not have become due and payable. 31 The unsecured creditors totalled $60,254.99. These creditors have not been paid. However, two of the amounts listed as owing to unsecured creditors and totalling $34,000 were described as "approx". No evidence was adduced by the Plaintiffs explaining what "approx" meant. The amount in fact owed to those creditors may be more or less than the amount listed. That creates a difficulty for the Plaintiffs. If the amount ultimately owing to an unsecured creditor is less than the amount listed, any award of equitable compensation of a higher amount would place Purcom in a better position than it would have been in but for the breaches by Tucker Senior, Richard Tucker and Admin. In the circumstances of this case, Purcom's position will be appropriately protected if Purcom is awarded equitable compensation in relation to those amounts (if any) which the unsecured creditors of Purcom prove to the satisfaction of the liquidators in the liquidation of Purcom. 32 In relation to the secured creditors, two creditors are listed. First, a sum of $295,234.79 is said to be owing to Westpac Banking Corporation. However, that sum has been paid out by the guarantor (Tucker Senior's wife). The Plaintiffs submitted that this amount should not be excluded from an award of equitable compensation because Tucker Senior's wife may have, by discharging the debt owed by Purcom, a right of subrogation in the liquidation of Purcom. In the circumstances of this case, Purcom's position will be appropriately protected if Purcom receives an indemnity from Tucker Senior, Richard Tucker and Admin to the extent to which the guarantor successfully seeks to exercise her right of subrogation in the liquidation of Purcom: see, by way of example, Hill v Rose [1990] VR 129 at 144. 33 The second secured creditor is listed as "Jax Quickfit Franchising Systems … $150,000.00 approx before advances". The Plaintiffs have adduced no evidence to support this claim other than to state that the claim has not been paid. Again, the amount in fact owed to this secured creditor may be more or less than the amount listed. That creates a difficulty for the Plaintiffs. If the amount ultimately owing to this creditor is less than the amount listed, any award of equitable compensation of a higher amount would place Purcom in a better position than it would have been in but for the breaches by Tucker Senior, Richard Tucker and Admin. In the circumstances of this case, Purcom's position will be appropriately protected if Purcom is awarded equitable compensation in relation to the amount (if any) which this secured creditor proves to the satisfaction of the liquidators in the liquidation of Purcom. That claim will, of course, have deducted from it any amount recovered by that creditor as a result of the security that it held. 34 In relation to the partially secured creditor, Enterprise Finance Solutions, the Plaintiffs have adduced no evidence to support this claim other than to state that the claim has not been paid. In the circumstances of this case, Purcom's position will be appropriately protected if Purcom is awarded equitable compensation in relation to an amount (if any) which the partially secured creditor proves to the satisfaction of the liquidators in the liquidation of Purcom. That claim will, of course, have deducted from it any amount recovered by that creditor as a result of the security that it held.

Future Economic Loss 35 Fourthly, the Plaintiffs sought to recover equitable compensation for future economic loss in the sum of $601,616.50. Initially, the Plaintiffs submitted that the sum "ought to be paid notwithstanding the foreshadowed assignment of the Lease and retransfer of equipment" because two of Purcom's "critical rights" would remain lost, namely the right to conduct the JAX Quickfit business and the right to derive an income from that business. At the hearing on 15 April 2010, I expressed concern that an award of equitable compensation on that basis could result in Purcom recovering more than was necessary to place it back in the position it was in prior to the breaches by Tucker Senior, Richard Tucker and Admin. 36 The Plaintiffs subsequently filed additional submissions concerning the future economic loss claim. The Plaintiffs reasserted their view that the proposed orders for the retransfer of the stock and for the potential assignment of the lease would not fully restore Purcom to the position it enjoyed prior to the implementation of Tucker Senior's scheme. The Plaintiffs further submitted: It is difficult to place a value on the difference between what [Purcom] lost in March 2009 and what it will get back pursuant to the orders giving effect to the Reasons for two main reasons: (a) using the financial performance information supplied [by the Receiver] is of limited utility because pursuant to the supply agreement, [the Receiver] has conducted the business effectively with the similar or same rights as a [JAX Quickfit] franchisee. Using [Admin's] trading figures whilst it has been in receivership would therefore not give any meaningful indication as to how the business of [Purcom] is likely to perform on the basis that [Purcom] has irretrievably lost its rights as a franchisee under the [JAX Quickfit] agreement; and (b) the financial information necessary to conduct an analysis of the financial performance of the business of [Purcom] from the premises without any rights as a [JAX Quickfit] franchisee (ie as the "Prahran Tyre Centre") is not available as the first to fifth defendants did not give adequate discovery of such information. 37 The sum of $601,616.50 was in fact calculated by reference to a document which itemised the projected net operating profit per annum for 17 years (being the unexpired term of the franchise agreement with JAX Quickfit). According to that calculation, the total projected net operating profit for 17 years was between $441,185.43 (based on a profit of $55,000 per annum) and $601,616.50 (based on a profit of $75,000 per annum). No explanation was proffered by the Plaintiffs as to why the upper end of the projected net profit "fairly represent[ed] the loss suffered by [Purcom]". This submission was also made notwithstanding the acknowledgment that certain stock and assets would be returned to Purcom. 38 The Plaintiffs further submitted: Alternatively, if the [C]ourt does not accept this submission and considers that the best way of valuing this aspect of [Purcom's] loss is to undertake a comparison of [Purcom's] business immediately prior to March 2009 with the business undertaken by [the Receiver] over the period of receivership …, it is submitted that: (a) the financial information provided [by the Receiver] … suggests that with the [JAX Quickfit] supply agreement in place the business made a trading loss of $104,445.20 over a period from 2 September 2009 to 19 April 2010. This period was for 198 days. This amounts to an annualised loss of $192,537.87 … (b) if this annualised loss of $192,537.87 is compared with the financial position of [Purcom] immediately prior to March 2009 (which was an annualised profit of $76,704), it can be seen that even with the benefit of the [O]rders and with the benefit of a supply agreement in place, the business previously conducted by [Purcom] will likely run at a substantial loss … . In the result, it is submitted that on this alternative analysis there is no requirement to make a further discount to the loss calculated by [Parker] in the sum of $601,616.50. 39 Then again in the alternative, the Plaintiffs submitted: [I]f, contrary to the [P]laintiffs' primary submissions, the Court does not accept that the [P]laintiffs are entitled to equitable compensation which includes an amount for future economic [loss] over the full unexpired term of 17 years under the franchise agreement, it is submitted that the period over which future economic loss is calculated should at least cover the period from 6 March 2009 (the Friday just prior to…when the changeover took place) up until the time orders are made giving effect to the Reasons. This is currently a period of approximately 15 months. Using an annualised profit of $75,000, this amounts to a lost potential profit of $93,750.00 in respect of the claim set out in proposed [O]rder 10(d). 40 In my view, the Plaintiffs are only entitled to recover the lost profit for the period from 6 March 2009 (the Friday just prior to when the changeover from JAX Quickfit to "Prahran Tyre Centre" took place) up until the time orders are made giving effect to the Reasons in the sum of $93,750. Consistent with the principles earlier identified (see [23] above), this is the loss suffered by Purcom for the period of approximately 15 months and, at the date of the trial, puts Purcom back in the position it was in before the breaches of fiduciary obligation. Purcom cannot recover compensation that would put it in a better position than had the breaches not occurred. In my view, any additional sum (including an amount for future economic loss for any further part of the unexpired term of the franchise agreement) would be contrary to that proposition. I do not accept that it is open to conclude that the balance of the claim for future economic loss would have happened had there been no breaches by Tucker Senior, Richard Tucker and Admin.

The Value of the Stock 41 Finally, the Plaintiffs sought to recover the value of the stock that will not be retransferred. The value of the stock that cannot be retransferred is $43,601.74. According to the Plaintiffs, this sum comprises the value of the stock transferred in March 2009 of $49,635.34 (based on the computer generated "HO Stock on Hand Report" which was tendered in evidence and which comprises schedule 4 to the Orders attached to these reasons for decision) less the value of the stock (as at 15 April 2010) which remains at the premises and that was available to the Receiver upon his appointment as receiver on 2 September 2009 of $6,033.60. The $6,033.60 worth of stock is addressed at paragraph [15] above. 42 In my view, it is appropriate to order that Tucker Senior, Richard Tucker and Admin make equitable compensation to Purcom in the terms of proposed Order 10(e) (see [22] above). That stock would not have been lost but for the breaches by Tucker Senior, Richard Tucker and Admin.

ANCILLARY ORDERS 43 A number of ancillary orders were agreed between the Plaintiffs and the Receiver: 12 An order that the amount due to be paid by [Tucker Senior], [Richard Tucker] and [Admin] to the [P]laintiffs on account of equitable compensation and costs fixed pursuant to Orders 10 and 15, be reduced by deducting the following amounts: (a) $250,000.00 paid by [Conlon]; and (b) any further sums paid by [Zissimou and PTC] to the Plaintiffs pursuant to the agreement titled "Terms of Settlement" dated 3 March 2010. 13. Subject to Orders 7, 7A, 7B above, an order that upon the transfer of the trust property referred to in Order 7, [the Receiver] cease trading and attend to completion of statutory duties and thereafter retire as receiver and manager of [Admin]. 14. An order that the [Tucker Senior], [Richard Tucker] and [Admin] pay interest on the amount referred to in [O]rder 10 above pursuant to section 51A of the Federal Court Act 1976 (Cth) (sic) and thereafter, pursuant to [section] 52 of the Federal Court Act 1976 (Cth) (sic), at the rates fixed by the Rules of Court. 15. An order that [Tucker Senior], [Richard Tucker] and [Admin] pay to the [P]laintiffs the [P]laintiffs' costs of these proceedings (including all reserved cost orders) in an amount to be taxed. 16. An order that the [P]laintiffs be forthwith released from all undertakings given to the Court. 17. An order that all Exhibits and all documents produced pursuant to Orders for Production in [Parker's] examinations (proceedings no NSD 233 of 2009) be returned to the [P]laintiffs' solicitors within 28 days. 44 Subject to some minor amendments, I would make orders substantively in the terms proposed by the Plaintiffs and the Receiver. None of the defendants opposed the making of these Orders.

RECEIVER'S COSTS 45 The Receiver sought an order that the Plaintiffs pay his costs and expenses in relation to discovery and his appearance at the substantive hearing when he was cross-examined by Counsel for Zissimou and PTC. The application for costs is made under O 15A r 11 of the Federal Court Rules. The costs claimed by the Receiver total $11,244.86. The Receiver submits that he is not a party to the proceedings but has incurred the costs referred to above and is therefore entitled to an order for his costs from the Plaintiffs. 46 The Plaintiffs oppose the order. The Plaintiffs submit that the order has "no legal foundation". In particular, the Plaintiffs submit that the Receiver has the benefit of the liens and indemnities in the proposed orders (see [15] and [16] above). 47 I accept the submissions of the Plaintiffs. The work undertaken by the Receiver is an ordinary incident of his appointment and his right to costs is protected in the manner described. I refuse to make an order in the terms proposed by the Receiver, whether under O 15A r 11 of the Federal Court Rules or on the basis that his costs should be "agreed and assessed".

TUCKER SENIOR'S BANKRUPTCY 48 Since the last hearing, the Plaintiffs received notification that Tucker Senior became bankrupt on 26 February 2010 by presenting his debtor's petition to the Insolvency and Trustee Service of Australia. 49 Section 58(3) of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) provides: (3) Except as provided by this Act, after a debtor has become a bankrupt, it is not competent for a creditor: (a) to enforce any remedy against the person or the property of the bankrupt in respect of a provable debt; or (b) except with the leave of the Court and on such terms as the Court thinks fit, to commence any legal proceeding in respect of a provable debt or take any fresh step in such a proceeding. 50 Sections 82(1) and (2) of the Bankruptcy Act are also relevant and provide: (1) Subject to this Division, all debts and liabilities, present or future, certain or contingent, to which a bankrupt was subject at the date of the bankruptcy, or to which he or she may become subject before his or her discharge by reason of an obligation incurred before the date of the bankruptcy, are provable in his or her bankruptcy. … (2) Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise or breach of trust are not provable in bankruptcy. 51 The Plaintiffs submit that a number questions arise: 1. are the Plaintiffs' claims in respect of "provable debts"? 2. does the making of the declarations and orders proposed by the Plaintiffs amount to taking a "fresh step" in the proceedings within the meaning of s 58(3)(b) of the Bankruptcy Act? 3. if yes to [51(2)], is leave of the Court required pursuant to s 58(3)(b) of the Bankruptcy Act for the making of the declarations and orders proposed by the Plaintiffs and, if so, should leave be granted and on what terms? 52 The Plaintiffs concede, properly in my view, that: 1. the Plaintiffs' equitable compensation claim is in respect of a debt which is provable within the meaning of s 82(1) of the Bankruptcy Act and the exception in s 82(2) is not engaged: see, by way of example, Chittick v Maxwell (1993) 118 ALR 728 at 739-740 and Barewa Oil and Mining NL (in liq) v Isim Mineral Development Pty Ltd (1981) 38 ALR 288 at 292; 2. by providing further material in support of the relief sought, making further submissions as to the appropriate form of declarations and orders and filing proposed orders, they are taking "fresh steps" within the meaning of s 58(3)(b) of the Bankruptcy Act: see, for example, Australian Competition and Consumer Commission v The Bio Enviro Plan Pty Ltd (2004) ATPR ¶41-998 at [6] - [9] and Gertig v Davies (2003) 85 SASR 226; 3. leave is required under s 58(3)(b) of the Bankruptcy Act for the making of the declarations and orders proposed by the Plaintiffs. 53 As a result, the question which remains to be determined is whether the Court should grant leave and if so, on what terms. 54 The Plaintiffs submit that it would be appropriate to grant leave to proceed for the following reasons: (a) the calculation of the sum of equitable compensation is complicated and should not be left to [Tucker Senior's] trustee to determine. It is intended that once the sum of equitable compensation is calculated a proof of debt for that amount will be lodged with the [Tucker Senior's] trustee in bankruptcy; (b) the proceedings are at a very advanced stage and a substantial amount of time, effort and cost has been allocated to bring to proceedings to this point; (c) there are number of matters which cannot be stayed indefinitely. Such a result would increase in the costs in connection with the receivership of [Admin] and ultimately be to the detriment of [Purcom] and its creditors generally because the transfer of assets from [Admin] would be held up; (d) creditors of [Tucker Senior] would not be adversely affected by permitting the taking of steps in the proceedings as the leave sought does not extend to enforcing any judgment obtained without further leave being granted prior to any enforcement proceedings. (citations omitted). 55 The Plaintiffs submitted that the orders sought granting them leave, and the proposed conditions, adopted the form of orders made in Australian Meat Processor Corporation Ltd v O'Connor [2009] FCA 355 and Lovell v Perkin (2008) 101 ALD 335; see also Macquarie Bank Ltd v Bardetta (2005) 216 ALR 670 and Allanson v Midland Credit Ltd (1977) 30 FLR 108. 56 In my view, the Court should grant the Plaintiffs leave and on the conditions proposed by them. The proceedings are well advanced to the point of there being a determination of the respective legal position of a number of parties. The facts are complex. A substantial amount of time, effort and cost has been spent in bringing these proceedings to this point: see, by way of example, Allanson v Midland Credit Ltd (1977) 30 FLR 108 at 114. The proposed conditions are designed to protect, so far as possible, the estate and the trustee in bankruptcy of that estate. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.