Gunasegaram v Blue Visions Management Pty Ltd; Blue Visions Management Pty Ltd v Chidiac

ung J, 10 November 1995, unrep) Bray v Ford [1896] AC 44 Breen v Williams 91996) 186 CLR 71; [1996] HCA 57 Brookfield Multiplex Ltd v Owners SP61288 (2014) 254 CLR 185; [2014] HCA 36 Canadian Aero Service Ltd v O'Malley (1973) 40 DLR (3d) 371 Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36 Chew v The Queen (1992) 173 CLR 626; [1992] HCA 18 Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373; [1975] HCA 8 Cook v Deeks [1916] 1 AC 554 Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70 Dart Industries Inc v Décor Corporation Pty Ltd (1993) 179 CLR 101 Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Doyle v Australian Securities and Investments Commission (2005) 227 CLR 18; [2005] HCA 78 Duncan v Independent Commission Against Corruption [2016] NSWCA 143 Friend v Brooker (2009) 239 CLR 129; [2009] HCA 21 Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 6 Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 Grove v Flavel (1986) 43 SASR 410 Gunasegaram v Blue Visions Management Pty Ltd [2017] NSWCA 187 Hart Security Australia Pty Ltd v Boucousis [2106] NSWCA 307 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Howard v Federal Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443 John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 Keech v Sandford (1796) Sel Cas t King 61; (1796) 25 ER 223 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 Krupace Holdings Pty Limited v China Hotel Investments Pty Limited [2018] NSWSC 862 Kuringai Council v Chan [2017] NSWCA 226 Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 Lifeplan Australia Friendly Society Ltd (ACN 087 649 492) v Ancient Order of Foresters in Victoria Friendly Society Ltd (ACN 087 648 842) [2017] FCAFC 74; [2017] 120 ACSR 421 Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 Phipps v Boardman [1967] 2 AC 46 Pilmer v Duke Group Limited (in liq) (2001) 207 CLR 165; [2001] HCA 31 Queensland Mines Ltd v Hudson (1978) 52 ALJR 399 SBA Music Pty Ltd v Hall (No 3) [2015] FCA 1079 Strategic Management Australia AFL Pty Ltd v Precision Sports & Entertainment Group Pty Ltd [2016] VSC 303; (2016) 114 ACSR 1 Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 The Queen v Byrnes (1995) 183 CLR 501; [1995] HCA 1 V-Flow Pty Ltd v Holyoake Industries (Vic) Pty Ltd (2013) 296 ALR 418; [2013] FCAFC 16 Warman International Ltd v Dwyer (1995) 182 CLR 544; [1995] HCA 18 Weldon & Co Services Pty Ltd v Harbinson [2000] NSWSC 272 Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1; [2012] WASCA 157 Texts Cited: J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (5th ed, Lexis Nexis Butterworths, 2015) at [5-055] Category: Principal judgment Parties: 2017/168664 Arun Gunasegaram (Appellant) Blue Visions Management Pty Ltd (Respondent)

2017/168769 Blue Visions Management Pty Ltd (Appellant) Sam Chidiac (First Respondent) Arun Gunasegaram (Second Respondent) Aspire Corporation Pty Ltd (Third Respondent) Representation: Counsel: 2017/168664 Mr MR Hall SC / Mr WH Wu (Appellant) Mr J Giles SC / Mr A Byrne (Respondent)

2017/168769 Mr J Giles SC / Mr A Byrne (Appellant) Mr AJ McInerney SC / Ms EL Beechey (First and Third Respondents) Mr MR Hall SC / Mr WH Wu (Second Respondent)

Solicitors: 2017/168664 Brown Wright Stein Lawyers (Appellant) Somerville Legal (Respondent)

2017/168769 Somerville Legal (Appellant) Fox & Staniland Lawyers (First and Third Respondents) Brown Wright Stein Lawyers (Second Respondent) File Number(s): 2017/1686642017/168769 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Equity Division Citation: [2017] NSWSC 255 Date of Decision: 10 May 2017 Before: Ball J File Number(s): 2014/192899

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] HEADNOTE [This headnote is not to be read as part of the judgment.] Blue Visions Management Pty Ltd ("Blue Visions") was engaged under a major contract with the West Australian Department of Treasury and Finance (via the Department of the Office of Strategic Projects) to provide it with programming services for the development of the Perth Children's Hospital. Mr Chidiac, the third most senior employee of Blue Visions, was responsible for the management of that project. Mr Gunasegaram, the second most senior employee, had national responsibility for Blue Visions' project and services area. In March 2014, Mr Chidiac and Mr Gunasegaram gave notice of their resignation. On or about 25 March 2014, Mr Chidiac informed Mr Hamilton of Strategic Projects of his resignation. In response to Mr Hamilton's question, Mr Chidiac indicated that he would be "interested" to continue to provide services on the project after his employment with Blue Visions ended. Mr Hamilton said he would look into it. On 30 March, Mr Gunasegaram advised Mr Parkhouse against nominating himself a potential replacement. On 31 March, Mr Hamilton presented three options to Blue Visions' managing director, Mr Khreich, to accommodate Mr Chidiac's resignation: his immediate replacement with a strategic programmer of at least equal ability; termination of the contract; or a novation of the strategic programming component of that contract to Mr Chidiac. Mr Khreich agreed to the third option. Mr Khreich then informed Mr Chidiac of that decision. On 3 April 2014, Mr Chidiac and Mr Gunasegaram incorporated Aspire, becoming its sole directors and shareholders. The novation occurred on 15 April 2014, before Mr Chidiac's notice period had expired. Blue Visions commenced proceedings against Mr Chidiac and Mr Gunasegaram, alleging that by establishing Aspire and entering into the novation, they had breached their fiduciary duties, employment contracts and certain Corporations Act 2001 (Cth) provisions. Aspire was said to be liable as an accessory. Blue Visions also claimed that Mr Gunasegaram was liable for misrepresenting that he had secured a contract for Blue Visions to provide services to Woolworths for the rollout of the Masters hardware stores, leading it to unnecessarily retain staff and suffer loss. The primary judge (Ball J) dismissed Blue Visions' claim against each defendant in relation to the novation; and upheld the misrepresentation claim against Mr Gunasegaram insofar as it related to the Masters project, and accordingly ordered him to pay damages. Blue Visions appealed against the dismissal of its claims, and Mr Gunasegaram against his liability for his misrepresentations, and the primary judge's quantification of damages. The Court (Meagher and Gleeson JJA, Basten JA dissenting in part) dismissed each appeal: Meagher JA and Gleeson JA dismissed Blue Vision's appeal against Mr Chidiac:

Judgment

1. BASTEN JA: The circumstances of this appeal are fully recounted in the judgment of Gleeson JA, and indeed in the judgment of the trial judge, Ball J. [1] In brief, they concern the circumstances in which a project management contract being carried out by the appellant ("Blue Visions") for the development of Perth Children's Hospital came to be novated in favour of a third party, Aspire Corporation Pty Ltd ("Aspire") established by two senior employees of Blue Visions, being Sam Chidiac and Arun Gunasegaram. Blue Visions claimed damages and an account of profits resulting from the novated portion of its contract. It invoked both breach of fiduciary duties owed by its senior employees to the company and improper use of position by each, in breach of s 182(1) of the Corporations Act 2001 (Cth). For the reasons set out below, in my view Aspire and Mr Chidiac were liable to account to Blue Visions for the profits derived from the novated contract. That was not the view taken by the trial judge; accordingly, I would allow Blue Visions' appeal. To the extent the claim was based on the separate conduct of Mr Gunasegaram, I agree with Gleeson JA that that basis of the claim was not made out.
2. There was a second appeal arising out of a finding that Mr Gunasegaram made misrepresentations to Blue Visions in relation to other matters, as a result of which Blue Visions incurred wasted expenditure. The trial judge upheld Blue Visions' claims in this regard and awarded Blue Visions damages of $1.4 million, in round figures. For the reasons given by Gleeson JA, I agree that Mr Gunasegaram's appeal should be dismissed.

Blue Visions appeal - background

1. Mr Chidiac and Mr Gunasegaram were the senior officers of Blue Visions responsible for programming management on a project for the construction of Perth Children's Hospital under the auspices of a Western Australian State Government agency referred to in the proceedings as "Strategic Projects". Although formally Mr Chidiac reported to the managing director and founder of Blue Visions, Adel Khreich, Mr Khreich was based in Sydney and was not active in the management of the project. It was common ground that Mr Chidiac was responsible for managing Blue Visions' team working on the Perth Children's Hospital project. In that capacity he worked closely with the senior officer in charge of the construction for Strategic Projects, John Hamilton.
2. On 20 May 2010 the State accepted Blue Visions' tender to provide programming services to Strategic Projects. The contract was for a period of three years with two options, each for a further year, both of which were exercised. Accordingly, the contract was due to expire on 20 May 2015, although work had not been completed at that time and a further tender was issued. [2] Although the contract in its original form provided for the employment of three consultants, up to six people worked on the project at any given time, and approximately 26 employees or consultants employed by Blue Visions worked on the project during the four years to March 2014. [3]
3. On 19 March 2014 Mr Chidiac gave Mr Khreich four weeks' notice of his resignation from Blue Visions which would occur on 15 April 2014. He informed Mr Khreich that he was tired of travelling from Sydney to Perth and wanted to start a new business in Sydney. Mr Chidiac informed Mr Hamilton of his resignation no later than 26 March 2014. As the trial judge found: [4] "Mr Chidiac says that during the course of their conversation Mr Hamilton asked him whether he was interested in continuing to assist with the project. Mr Chidiac replied in effect that he was and Mr Hamilton said that 'I'll go and look into it'. I accept that evidence." Mr Chidiac's response to Mr Hamilton was inconsistent with the reasons given to Mr Khreich for his resignation, namely that he was tired of travelling from Sydney to Perth.
4. On 28 March 2014, Mr Gunasegaram sent an email to Mr Khreich stating that Mr Hamilton, knowing of Mr Chidiac's resignation, had put three options to Blue Visions, namely: [5] "1. Immediately produce a strategic programmer equal to or better than Sam [Chidiac]. 2. He [Hamilton] immediately terminates Bluevisions engagement at NCH for breach. 3. Bluevisions agrees to novate the existing contract to remove strategic programming which he will give to another company and Bluevisions keeps the technical planning, design management and transition management roles."

Issues on appeal

1. In the form in which they went to trial, Blue Visions' claims were identified in a second further amended statement of claim filed on 2 February 2017. The defendants were Mr Gunasegaram, Mr Chidiac and Aspire. Relevantly for present purposes, Blue Visions sought damages or equitable compensation from all defendants, an account of profits from Aspire, or both Chidiac and Gunasegaram, and a declaration that Chidiac and Gunasegaram held on constructive trust for Blue Visions their shares in Aspire, together with any dividends or payments received from Aspire.
2. If the appellant is to succeed in its claim for relief in this appeal, it must do so in the following circumstances: 1. Blue Visions could not stop Mr Chidiac resigning from his employment; 2. nor could Blue Visions stop Mr Chidiac competing with Blue Visions after he left; 3. if Mr Chidiac left, Blue Visions had no equivalent strategic programmer to provide services under its contract with the State Government; 4. Mr Chidiac did not resign in order to take over Blue Visions' contract, and 5. the proposal for Mr Chidiac to carry on the contract through his own vehicle, in place of Blue Visions, came from Mr Hamilton.
3. The factors upon which Blue Visions must rely are that Mr Chidiac: 1. owed a fiduciary obligation to Blue Visions not to allow his personal interests to conflict with the interests of his employer; 2. was subject to a statutory obligation not improperly to use his position as an employee of Blue Visions to gain an advantage for himself or others; 3. enjoyed an advantage over any other candidate to carry on the project, arising from his knowledge of the project and his relationship with Mr Hamilton, both of which were acquired in the course of his duties as a senior employee of Blue Visions; 4. created the opportunity for obtaining an advantage by his resignation from his employment with Blue Visions, and 5. agreed to accept a continuing role as programming manager through his engagement by Aspire whilst still employed by Blue Visions, though during the period of his notice of resignation.
4. It is possible that a fiduciary may not breach his or her duties where a proposed course of conduct involving the pursuit of personal interests has the fully informed consent of those to whom the duty is owed. Such a defence was sought to be raised by the defendants at trial, but belatedly and was not allowed by the trial judge. That ruling was challenged in this Court but, for the reasons given by Gleeson JA, I agree the trial judge did not err. That meant that the defendants could not place reliance on Mr Khreich's acceptance of the novated agreement as satisfying this defence. The defence was, in any event, not available in relation to a breach of s 182 of the Corporations Act 2001 (Cth), though Blue Visions' conduct could be relevant in assessing impropriety.

Determination of appeal

1. Blue Visions' claims were pleaded by reference to contraventions of s 182 of the Corporations Act and of the fiduciary duty owed by Mr Chidiac to Blue Visions. The trial judge dealt with the matter primarily on the basis of a breach of fiduciary duty, finding that the reasons for rejecting that basis of liability resolved the statutory claim. [8] That will often be the case; however, as discussed below, s 182 is not in its terms constrained by principles delineating the scope of the fiduciary duty. [9] Nor is it limited to those who would owe a fiduciary duty to a corporation.
2. Section 182 provides: 182 Use of position - civil obligations Use of position - directors, other officers and employees (1) A director, secretary, other officer or employee of a corporation must not improperly use their position to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation. Note: This subsection is a civil penalty provision (see section 1317E). (2) A person who is involved in a contravention of subsection (1) contravenes this subsection. Note 1: Section 79 defines involved. Note 2: This subsection is a civil penalty provision (see section 1317E). Section 182 is a penalty provision identified in s 1317E(1), in respect of a contravention of which compensation may be claimed by a corporation for damage suffered as a result of the contravention, pursuant to s 1317H(1).
3. Blue Visions pleaded a case based on paragraph (a) in s 182(1); the advantage sought was, relevantly, for the benefit of Messrs Chidiac and Gunasegaram and Aspire. The critical question is whether Mr Chidiac "improperly" used his position as an employee of Blue Visions to gain such an advantage. That requires that his purpose was to gain the identified advantage. [10]
4. As Jacobs J said in Grove v Flavel, [11] in a passage cited with approval in The Queen v Byrnes, [12] "what is 'improper' for the purposes of [a predecessor to s 182] cannot be determined by reference to some common, uniform or inflexible standard which applies equally to every person who is an officer, but rather must be determined by reference to the particular duties and responsibilities of the particular officer whose conduct is impugned." The joint judgment in Byrnes continued: "Impropriety does not depend on an alleged offender's consciousness of impropriety. Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case."

Conclusions

1. In the event that Mr Chidiac and Aspire were found liable, as in my view they should be, Blue Visions sought a judgment in the amount of $1,240,912, being the amount assessed by the trial judge against the event that he was wrong in rejecting the claim. [29]
2. Mr Chidiac and Aspire accepted that, in the event that Mr Chidiac was liable, Aspire would also be liable. [30] That approach reflected the relationship of Mr Chidiac and Aspire and should be accepted. [31] Relief based on contravention of s 182(1)(a) of the Corporations Act may include compensation for any damage suffered by the company resulting from the breach. [32] Damage may include profits made by any person resulting from the contravention. [33]
3. However, Mr Chidiac and Aspire further submitted that equitable compensation, or an account, should be limited to the period from 15 April 2014 (the date of the novation) to 10 July 2015 (the date when a fresh tender was issued). The limitation on the period should not be accepted. The trial judge found that, in the event that Blue Visions was entitled to an account of profits obtained by Aspire, it was entitled to the extended term. It is clear that, for the same reason that Mr Chidiac was able to obtain the benefit of the contract when he left Blue Visions, he was able to obtain the tender, in the face of a competitive tender from Blue Visions. As at the time of the novation, Mr Chidiac had the great advantage of incumbency, on which his relationship with Mr Hamilton and his knowledge of the project were based.
4. Blue Visions is entitled to the judgment it seeks, including pre-judgment interest.
5. I would propose the following orders in Blue Visions' appeal: 1. Allow the appeal in part and set aside orders 2, 3 and 4, and 5 in relation to the first and third defendants, made in the Equity Division on 10 May 2017 in matter 2014/192899. 2. In place thereof, 1. give judgment for the plaintiff (Blue Visions) against the first defendant (Chidiac) and third defendant (Aspire) in the sum of $1,240,912 plus interest in accordance with s 100 of the Civil Procedure Act 2005 (NSW); 2. order that the first and third defendants pay two thirds of the plaintiff's costs of the trial of matter 2014/192899 plus interest calculated in accordance with order 9 below. 1. Order that the first and third respondents pay two thirds of the appellant's costs of its appeal. 2. Direct that any disagreement as to the calculations required to give effect to orders 2(a) and (b) be determined by a judge in the Equity Division.

The conflict rule

1. It is not in issue that Mr Chidiac was a fiduciary. That status arose from the responsibilities and functions as a senior employee that he had undertaken to discharge in the interests, and on behalf, of Blue Visions. Those responsibilities and functions also defined the ambit of his fiduciary responsibility: Hospital Products Limited v United States Surgical Corporation (1984) 156 CLR 41 at 96-97, 103 (Mason J). As Lord Cranworth LC explained in Aberdeen Railway Company v Blaikie Brothers (1854) 1 Macq 461 at 471; [1843-60] All ER Rep 249: A corporate body can only act by agents, and it is, of course, the duty of those agents so to act as best to promote the interests of the corporation whose affairs they are conducting. Such an agent has duties to discharge of a fiduciary character towards his principal, and it is a rule of universal application that no one having such duties to discharge shall be allowed to enter into engagements in which he has or can have a personal interest conflicting or which possibly may conflict with the interests of those whom he is bound to protect.
2. The "representative" character in which the fiduciary acts and the concomitant vulnerability of the beneficiary or principal give rise to a specific liability to account for personal benefits or gains according to two "rules" extracted by Deane J in Chan v Zacharia (1984) 154 CLR 178 at 198-199; [1984] HCA 36 from "themes" in earlier cases. In Warman International Ltd v Dwyer (1995) 182 CLR 544 at 557; [1995] HCA 18 in the unanimous judgment of the Court those rules were said to be: A fiduciary must account for a profit or benefit if it was obtained either (1) when there was a conflict or possible conflict between his fiduciary duty and his personal interest, or (2) by reason of his fiduciary position or by reason of his taking advantage of opportunity or knowledge derived from his fiduciary position.
3. Importantly for the outcome of this appeal, Blue Visions relied before the primary judge and in its appeal only on the first rule above, described as the conflict rule (as distinct from the profit rule). In this respect, Blue Visions' claim was limited in the same way as that in Howard v Federal Commissioner of Taxation (2014) 253 CLR 83 at [33], [109], cf [58]; [2014] HCA 21.
4. Citing Mason J's influential dissent in Hospital Products Limited v United States Surgical Corporation at 103, the majority (McHugh, Gummow, Hayne and Callinan JJ) in Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165; [2001] HCA 31 at [78] adopted the following formulation of the conflict rule: … the fiduciary is under an obligation, without informed consent, not to promote the personal interests of the fiduciary by making or pursuing a gain in circumstances in which there is "a conflict or a real or substantial possibility of a conflict" between personal interests of the fiduciary and those to whom the duty is owed.

The claim against Mr Chidiac for breach of fiduciary duty

1. Blue Visions alleged that by engaging in discussions with Mr Hamilton in mid and late March 2014 and agreeing, whilst an employee, to continue to provide the strategic programming services to that time provided by Blue Visions, Mr Chidiac pursued an opportunity to obtain work from Strategic Projects in circumstances where his personal interest in doing so conflicted with his fiduciary obligation as a senior employee to preserve that opportunity for its benefit. The primary judge addressed this case at Judgment [136]-[144]. His Honour rejected an allegation that Mr Chidiac had pursued that personal interest before his resignation; rejected an allegation that Mr Chidiac had resigned so as to pursue the opportunity; and held that Mr Chidiac did not breach any fiduciary duty by pursuing and securing the opportunity for Aspire. Ground 1 of Blue Visions' appeal is directed to this last conclusion. The primary judge's rejection of the earlier allegations is not challenged.
2. Blue Visions' case depends on its establishing that at the time of Mr Chidiac's conversation with Mr Hamilton (on about 25 March 2014), or his agreement in principle to enter into the novation agreement (on 31 March 2014), there was a conflict, or real or substantial possibility of a conflict, between his pursuit of that opportunity and the discharge of a function or responsibility to which his fiduciary obligation attached.
3. Importantly, though Mr Chidiac was the third most senior employee of Blue Visions, he was not a director, in either name or substance; and he was not charged with the general management of its affairs. In that respect, his position was to be contrasted with that of Mr Khreich. Instead, Mr Chidiac's position as "Group Manager Planning" encompassed responsibility for the performance of a number of Blue Visions' contracts in Perth, including the Perth Children's Hospital project. His contract of employment included the following job description (Judgment [21]): Manage the Business Unit assigned to you in accordance with the annual strategic and financial plans and the overall company business plans. To provide consulting services in the areas of planning & controls and any other project related services as required by the Employer from time to time. To contribute to company overall direction and strategy. To take overall responsibility for the technical quality of the company planning & controls services [emphasis added]

The conversation on or about 25 March 2014

1. It is said that Mr Chidiac's answer to Mr Hamilton's question, that he was "interested" in continuing to work on the Perth Children's Hospital project after his employment came to an end, and his subsequent failure to inform Mr Khreich of the conversation, engaged and breached the conflict rule: see Judgment [139]. That submission encounters difficulty at two levels.
2. First, Mr Hamilton's question merely sought to identify whether Mr Chidiac was at that time open to performing work for Strategic Projects at some time after the termination of his employment. It did not, for example, suggest any arrangement by which he might compete with Blue Visions in the provision of services to Strategic Projects. By itself, it carried no opportunity capable of being pursued by Mr Chidiac, let alone pursued inconsistently with some existing function or responsibility. Mr Chidiac's affirmative, and truthful, response took the matter no further. It was consistent with any number of wholly innocuous courses of action, including that noted by Gleeson JA at [195]. What Mr Hamilton chose to do with the answer given cannot make that answer any more concrete or untoward.
3. Secondly, the benefit which Mr Chidiac ultimately received by its nature depended on the concurrence of Blue Visions. Yet neither by his initial exchange with Mr Hamilton nor subsequently is Mr Chidiac said to have procured, or attempted to procure, that concurrence. Moreover, short of falsely representing that he was not interested in working with Strategic Projects in the future, Mr Chidiac could not preclude the possibility of that benefit accruing to him. Thus, in the events that in fact transpired, the circumstance of his answer was of no relevance to his later receipt of a benefit.
4. Whether considered alone or in the light of subsequent circumstances, the conversation with Mr Hamilton does not show Mr Chidiac to be pursuing any opportunity which could give rise to a real or substantial possibility of conflict.

The communication on 31 March 2014

1. Mr Hamilton advised Mr Chidiac on 31 March 2014 that Mr Khreich had agreed with Mr Hamilton's proposal that the strategic planning aspect of Blue Visions' contract be novated to a company associated with Mr Chidiac. Mr Chidiac's agreement to that course was then sought and given. By that point, the opportunity presented to him was one which was only available by reason of Blue Visions' agreement to surrender part of its existing contract, so that Strategic Projects could enter into a separate contract with him or his nominee. Mr Chidiac is not said to have participated in that decision in fact. Nor did his functions and responsibilities require, or even contemplate, his doing so.
2. The present circumstances are, therefore, fundamentally different from those in Cook v Deeks [1916] AC 555 and Industrial Development Consultants Ltd v Cooley [1972] 1 WLR 443. In each of these cases the fiduciaries had general responsibilities over their principal's affairs - in the former case as three executive directors and in the latter as the managing director. More to the point, they diverted for their own benefit business opportunities which they were authorised specifically to consider on behalf and for the benefit of their corporate principal. By contrast, although Mr Chidiac was responsible for "managing" the Children's Hospital contract, and doing so in Blue Visions' best interests, his functions and responsibilities did not extend to considering or deciding whether all or part of that contract should be surrendered, or the benefit of it made available to him. Even assuming that he and his principal had conflicting interests as to whether that surrender should come to pass, he did not exercise any power or discretion or otherwise act in a fiduciary capacity for the company in relation to that surrender. In these respects, his position is to be contrasted with that of the solicitor in Ex parte James (1874) 9 Ch App 609 who, whilst acting for the assignees of the bankrupt estate, purchased assets of the estate. That subject matter and dealing were within the scope of the solicitor's retainer and accordingly involved interests of the client which the solicitor had undertaken to protect and prefer. It follows in my view that there was no breach of the conflict rule by Mr Chidiac's pursuit of the novation agreement opportunity.
3. This conclusion is not undermined by the reasoning in Keech v Sandford (1726) Sel Cas 61; 25 ER 223 or decisions applying it, which presuppose a conflict and merely answer any attempt by the fiduciary to disclaim a liability to account by invoking the inevitability of the beneficiary's loss.

Contravention of s 182

1. Notwithstanding that ground 1 of Blue Visions' appeal also asserts the primary judge erred in not finding that Mr Chidiac breached his duty under Corporations Act 2001 (Cth), s 182(1)(a), the foregoing analysis deals only with its claim for breach of fiduciary duty, and specifically the conflict rule. It does so because, before the primary judge and in this Court, Blue Visions did not contend, if its claim for breach of fiduciary duty failed, that its claim under s 182(1) could nevertheless succeed. At [45] above, Basten JA concludes that Mr Chidiac's conduct was in breach of that section, and for that reason would allow Blue Visions' appeal on ground 2. On the basis that "s 182 is not in its terms constrained by principles delineating the scope of the fiduciary duty" (see [14] above), his Honour's consideration of whether that section was breached is not limited to whether Mr Chidiac pursued any opportunity in circumstances which involved a breach of the conflict rule.
2. In any event, as Gummow and Hayne JJ emphasised in Angas Law Services Pty Ltd v Carabelas (2005) 226 CLR 507 at [54]; [2005] HCA 23, a breach of s 182 "is not established by merely showing that the officer engaged in conduct that resulted in an advantage to himself, or a detriment to the corporation. There must be the element of impropriety." In R v Byrnes (1995) 183 CLR 501 at 514-515; [1995] HCA 1, the plurality (Brennan, Deane, Toohey and Gaudron JJ) described impropriety in this context as consisting in: … a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case.
3. That impropriety in the performance of a duty, or exercise of a power or authority, must have been engaged in for the purpose of gaining an advantage or causing detriment to the corporation; thus the officer's state of mind is relevant: Chew v The Queen (1992) 173 CLR 626 at 632-633; [1992] HCA 18 (Mason CJ, Brennan, Gaudron and McHugh JJ). Here, as Gleeson JA notes at [216] below, the cross-examination of Mr Chidiac did not include that his purpose in responding to Mr Hamilton's first enquiry was to secure any personal gain or advantage.
4. In order to determine whether there has been impropriety, the conduct complained of must be considered by reference to the duties, powers and authority of Mr Chidiac at the time and in the circumstances in which it occurred. Mr Chidiac having earlier indicated that he would be "interested" in continuing to work on the Hospital project, his improper conduct is said to have been (see [43] above) "making himself available to continue working on the project, though not as an employee of Blue Visions", presumably a reference to the later conversation between Mr Hamilton and Mr Chidiac on 31 March 2014. For the reasons given above, on the earlier occasion there was no breach of duty or improper use of fiduciary power or authority by Mr Chidiac in his response to Mr Hamilton's inquiry. And what Mr Chidiac said on that occasion did not change in any way the nature or scope of his duties, powers or authority at the later time when Mr Hamilton approached him with a fully formed proposal of Strategic Projects and Blue Visions that he provide the former with services following the termination of his employment with Blue Visions.

Appropriate relief

1. Finally, had it been necessary to consider whether Blue Visions was entitled to an account of profits or to equitable compensation for the period after 11 July 2015, I would have agreed with the conclusion of the primary judge at Judgment [165]. In this scenario the opportunity pursued in breach of the conflict rule was the provision of programming services during the remaining two years of the existing contract, which in turn carried with it the possible opportunity of providing those services for any further period, in the event that the works were not completed on time. As Basten JA observes at [49] above, in any contest for the right to provide those further services, the existing providers would have the advantage of incumbency. That advantage, in the context of a competitive tender process such as that undertaken in July 2015, would have established a sufficient causal connection between the pursuit of the opportunity and the benefit received from a further extension of the contract. That outcome does not operate to undermine the undivided loyalty rule and its policy: as to which see Lifeplan Australia Friendly Society Ltd v Ancient Order of Foresters in Victoria Friendly Society Ltd (2017) 250 FCR 1 at [63]-[64]; [2017] FCAFC 74 at [63]-[64].
2. GLEESON JA: Blue Visions Management Pty Ltd (Blue Visions) carries on business as a project management and specialised project planning services consulting firm. It was established in 2001 by Mr Adel Khreich, who is its managing director. At the time of the events the subject of the proceedings below, Blue Visions' clients included the West Australian Department of Treasury and Finance (the Department). Dealings between Blue Visions and the Department were administered on behalf of the Department by its "Office of Strategic Projects" (Strategic Projects). In May 2010, Blue Visions entered into a 3 year contract with the Department to provide programming services in respect of the development of the Perth Children's Hospital (the hospital project). That contract contained two options in favour of the Department to renew for a further year.
3. In mid-March 2014, two senior employees of Blue Visions, Mr Sam Chidiac and Mr Arun Gunasegaram, resigned. On 3 April 2014, they incorporated a company, Aspire Corporation Pty Ltd (Aspire), with Mr Chidiac and Mr Gunasegaram as shareholders and directors. Subsequently on 8 April 2014, the Department and Aspire, and on 15 April 2014, Blue Visions signed a partial novation of the strategic programming services component of the hospital project in favour of Aspire.

Facts

1. Blue Visions' head office is in Sydney where Mr Khreich was located. Its clients included businesses in the construction, mining, civil engineering and infrastructure, defence, communications and health industries. It seems that Blue Visions had a substantial number of employees at the time of the events in dispute, but the evidence is unclear as to the precise number. As at September 2015, Blue Visions had approximately 70 employees in Australia.

Mr Gunasegaram

1. Mr Gunasegaram was the second most senior employee of Blue Visions. He was initially engaged in August 2010 as regional manager in Western Australia. He was promoted to the position of executive general manager on 1 May 2012 and became responsible nationally for Blue Visions' project and services area. He was based in Perth. He resigned from Blue Visions on 20 March 2014, the day after Mr Chidiac resigned.
2. Mr Gunasegaram was involved in extensive work on a number of proposals to obtain major consulting work for Blue Visions. Prospective clients included Woolworths, in connection with the rollout of its "Masters" chain of hardware stores; Roy Hill Pty Ltd, in connection with the development of an iron ore mine owned by it in Western Australia; and Bulletin Resources, in connection with the Nicholson's Gold Mine project at Halls Creek in Western Australia.

Mr Chidiac

1. Mr Chidiac was the third most senior employee of Blue Visions. He was originally employed by Blue Visions under a written contract dated 26 March 2001. The primary judge found that Mr Chidiac had not signed and was not bound by the terms of the new contract prepared by Blue Visions in May 2010 which contained a 6-month restraint of trade clause: at [36] and [39]. There is no challenge to that finding. On 19 March 2014, Mr Chidiac gave four weeks' notice of his resignation.
2. From about mid-2010, Mr Chidiac was responsible for managing the hospital project, being one of Blue Visions largest contracts. Mr Chidiac lived in Sydney and commuted to Perth. He dealt with Mr John Hamilton who was the relevant person within Strategic Projects in charge of the hospital project. It is necessary to say a little more about that contract.

The hospital project

1. On 3 March 2010, Strategic Projects issued a request for tender (the Request) relating to the provision of programming services on the hospital project. The Request contemplated that the successful tenderer would provide the services of a director, senior time programmer and a time programmer over a 5-year period. Based on the estimated hours over five years, the contract had an indicative value of a little over $1 million.
2. Blue Visions' offer submitted on 9 April 2010 nominated Mr Chidiac as the director of the project, Mr Gavin White as senior consultant and Mr Gaspar Indaya as a consultant. The offer contained a "contingency plan for replacement of personnel" in the "unforeseen event that [a nominated] person has to be replaced". The person nominated to replace Mr Chidiac was Mr Khreich.
3. On 20 May 2010, Strategic Projects accepted Blue Visions' offer. The primary judge found that it purported to accept the services of the three people nominated by Blue Visions and stated that the contract was for a period of three years with two options for Strategic Projects to renew the contract for a further year: at [52]. The primary judge did not find it necessary to set out the terms of the contract in any detail other than to note that the contract was not performed strictly in accordance with its terms. Although the contract contemplated that Blue Visions would provide the services of three people, in fact, approximately 26 employees or consultants at Blue Visions worked on the project, although no more than six at any one time: at [53].
4. The primary judge found that the contract did not contain a right to terminate for convenience and that it was doubtful that the contract required Blue Visions to make available the services of Mr Chidiac. Rather, it required Blue Visions to provide services of a particular description and specifically contemplated that Mr Chidiac could be replaced by Mr Khreich. His Honour further found that Strategic Projects was only entitled to terminate the contract following Mr Chidiac's resignation if, as a consequence of his resignation, Blue Visions was no longer able to provide the contracted-for services: at [54].
5. On 19 December 2013, the scope of Blue Visions' engagement on the hospital project was varied to include "integrated programming, reporting and monitoring". The additional work was performed by Ms Rosalee Jensen. The terms of the variation were negotiated, and the decision to enter into the variation was made by Mr Chidiac in consultation with Mr Gunasegaram: at [56].

Resignations of Mr Chidiac and Mr Gunasegaram

1. Mr Chidiac decided to leave Blue Visions in January 2014. He initially contemplated a residential construction venture with his brother, who was a builder. Mr Chidiac mentioned his intentions to Mr Gunasegaram, who also said that he was contemplating leaving Blue Visions. In February 2014, they talked about the possibility of doing something together. One of the possibilities discussed was setting up a consulting firm: at [57]. On 27 February 2014, Mr Gunasegaram asked an employee of Blue Visions (Mr James Clarke) to check the availability of a number of domain names, including "aspire.com" and "endpoint.com". Mr Clarke later registered the domain name "endpointconsulting.com" for Mr Gunasegaram. The primary judge found that Mr Chidiac had accepted in cross-examination that he was aware of what Mr Gunasegaram was doing: at [58].
2. On 19 March 2014, Mr Chidiac sent an email to Mr Khreich and Mr Gunasegaram attaching a letter of resignation giving four weeks' notice. It seems that Mr Chidiac and Mr Khreich spoke on about 21 March 2014. Mr Chidiac told Mr Khreich that he was tired of travelling to Perth, that he wanted to spend more time with his family, and to work with his brother in Sydney in the building industry: at [59].
3. On 20 March 2014, Mr Gunasegaram sent an email to Mr Khreich attaching a resignation letter in which he said that the resignation was "with immediate effect" and that the decision to resign was taken with the advice of his family and doctors after receiving news concerning serious complications with a health condition relating to an episode of pneumonia and asthma in December 2013: at [60]. In the covering email, Mr Gunasegaram told Mr Khreich that he would "ensure that any ongoing work is appropriately handed over to the right people and I will do my best to mitigate any fall-out with customers whom I know personally, for past, present and future work over the coming weeks": at [60].
4. The primary judge doubted that anything in Mr Gunasegaram's email and letter could be believed, while noting that Mr Gunasegaram did not give evidence: at [61]. His Honour found that Mr Gunasegaram's resignation did not take effect immediately as he was required to give reasonable notice of termination of the contract. Mr Gunasegaram continued to do some work for Blue Visions, at least up until the end of March 2014: at [62].

Blue Visions pleaded claims

1. By its second further amended statement of claim, Blue Visions pleaded that Mr Chidiac and Mr Gunasegaram poached its employees and misused confidential information. Those claims were unsuccessful at trial and are not the subject of appeal. The appeal by Blue Visions is only concerned with the "diverting opportunities" claim. The pleaded claim was that Mr Chidiac and Mr Gunasegaram "caused or procured [Mr] Hamilton of Strategic Projects to demand that" Blue Visions take one of the three options set out in the email extracted at [106] above, incorporated Aspire and took up shareholdings and directorships in that company, and carried on business through Aspire in direct competition with Blue Visions and "effectively diverted the benefit of part of the WA project" from Blue Visions to Aspire.
2. Blue Visions alleged that by engaging in such conduct, Mr Chidiac and Mr Gunasegaram each breached the terms of his contract of employment, improperly used his position to gain an advantage for himself and thereby breached his duty as an officer under s 182 of the Corporations Act, and also breached his fiduciary duty (the conflict rule) not to prefer his interests to Blue Visions' interests and not to allow himself to be in a position where his interests and Blue Visions' interests conflicted. Blue Visions also pleaded an accessorial liability claim against Aspire. There was no pleading relying on the profit rule, to the effect that Mr Chidiac took advantage of an opportunity or information derived from his fiduciary position that was created by his employment to make a gain for himself.

The primary judge's findings

1. The primary judge commenced by noting that both parties accepted that Mr Chidiac and Mr Gunasegaram owed Blue Visions fiduciary duties, and that an aspect of those duties was not to pursue their personal interests in conflict with those of Blue Visions: at [134]. His Honour further noted that both parties also accepted that the precise scope of their duties was to be "moulded according to the nature of their relationship and the facts of their case", referring to the remarks of Mason J in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 102; [1984] HCA 64 (Hospital Products).

Fiduciary duty claim

1. His Honour found that there was insufficient evidence to establish that Mr Chidiac and Mr Gunasegaram breached their duty in pursuing their personal interests in conflict with those of Blue Visions before they resigned: at [136]. This may be taken to be a reference to the period before the respective dates on which they each gave notice of resignation on 19 March 2014 (in the case of Mr Chidiac) and on 20 March 2014 (in the case of Mr Gunasegaram). His Honour gave two reasons. First, that while they did some preparatory work in anticipation that they would or might resign, this was not sufficient to establish a breach of their fiduciary duties. Second, although Mr Gunasegaram improperly asked an employee of Blue Visions (Mr Clarke) to search domain names and register the domain name "endpointconsulting.com", those breaches were minor and it was not suggested that any loss flowed from them or that Mr Gunasegaram or Mr Chidiac obtained any real benefit from them: at [136].
2. Blue Visions does not challenge the finding that Mr Chidiac and Mr Gunasegaram did not breach their duty in the period before they each gave notice of their resignation.
3. His Honour further found that the evidence was insufficient to establish that Mr Chidiac and Mr Gunasegaram resigned in March 2014 so as to be able to pursue an opportunity to obtain work from Strategic Projects that properly belonged to Blue Visions: at [137]. Again, that finding is not challenged however Blue Visions submits that this finding is directed to the wrong question because, on its case, the relevant opportunity with respect to the hospital project arose on 25 or 26 March 2014 during the conversation between Mr Chidiac and Mr Hamilton.
4. His Honour then turned to Blue Visions' principal case that Mr Chidiac breached his fiduciary duties in three ways: (a) by telling Mr Hamilton that he was interested in continuing to work on the hospital project after his contract with Blue Visions came to an end; (b) by failing to tell Mr Khreich of that conversation; and (c) by signing the novation agreement: at [139]. His Honour concluded that none of those matters amounted to a breach by Mr Chidiac of his fiduciary duties. It is appropriate to set out his Honour's reasons in full at [140]-[144]: [140] The evidence is that Mr Chidiac only indicated that he was interested in continuing to work on the Perth Children's Hospital project in response to a question from Mr Hamilton and that he had not seriously considered that as an option before Mr Hamilton raised the possibility with him. As between Mr Chidiac and Blue Visions, Mr Chidiac was free to work on the Perth Children's Hospital project as soon as his employment with Blue Visions came to an end. It is difficult to see how Mr Chidiac breached his fiduciary duties to Blue Visions by telling Mr Hamilton that that was something that he was interested in doing. There is a degree of unreality in the submission that Mr Chidiac's fiduciary duties required him to mislead Mr Hamilton or answer the question he was asked evasively or to refuse to answer it at all. [141] It is possible that if Mr Chidiac had not told Mr Hamilton that he was willing to work on the project following the termination of his contract with Blue Visions, Mr Hamilton would not have sought to re-negotiate the contract with Blue Visions. I say "possible" because it was always open to Mr Chidiac to approach Mr Hamilton once his contract with Blue Visions had terminated and tell Mr Hamilton that he was interested in continuing to work on the project. That point aside, in a sense, then, it can be said that in answering Mr Hamilton's question in the way that he did, Mr Chidiac preferred his interests to those of Blue Visions. However, the interest he had was a legitimate interest concerning what he would do after his contract with Blue Visions terminated, and it does not seem to me to be an illegitimate pursuit of those interests to answer honestly a question asked of him about what he was interested in doing once his contract terminated. The position would have been different if Mr Chidiac had sought to persuade Mr Hamilton to become a client of his new business while still an employee of Blue Visions. But that is not what happened. [142] In my opinion, Mr Chidiac was not obliged to tell Mr Khreich of his conversation with Mr Hamilton. It is generally accepted that fiduciary duties are proscriptive, not prescriptive: Breen v Williams (1996) 186 CLR 71; [1996] HCA 57 at 113 per Gaudron and McHugh J; Blackmagic Design Pty Ltd v Overliese (2011) 191 FCR 1; [2011] FCAFC 24 at [105] per Besanko J; Coope v LCM Litigation Fund Pty Ltd [2016] NSWCA 37; (2016) 333 ALR 524 at [121]-[122] per Payne JA (with whom Gleeson and Leeming JJA agreed). Mr Chidiac's fiduciary duties did not oblige him to disclose to Mr Khreich his conversation with Mr Hamilton. A duty of disclosure only arose to the extent that Mr Chidiac relies on a defence of fully informed consent. However, the failure to disclose was not itself a breach of fiduciary duty; and if there was no other breach of fiduciary duty, the question of fully informed consent does not arise. [143] It is also difficult to understand how it could be said that Mr Chidiac breached his fiduciary duties by signing the novation agreement. The novation agreement was proposed by Mr Hamilton. It was signed by Mr Khreich and could not have proceeded without Mr Khreich's agreement. It was open to Mr Khreich to refuse to sign the agreement and to propose alternatives to replace Mr Chidiac. He did not do so. Mr Khreich gave evidence that he felt pressured to sign the agreement. I accept that evidence. But all the pressure came from Mr Hamilton. It was the natural consequence of Mr Hamilton's desire to retain the services of Mr Chidiac, the fact, as was apparent from the evidence that he gave, that Mr Hamilton was a person used to getting his way and the fact that Mr Chidiac indicated that he was willing to continue to work on the project. How Mr Chidiac breached his fiduciary duties by agreeing to a proposal that was acceptable to Mr Khreich and Blue Visions is unclear. [144] There is also a suggestion in Blue Visions' submissions that Mr Chidiac knew that Mr Hamilton regarded him as more or less irreplaceable on the project and that Mr Chidiac breached his fiduciary duties by failing to take steps to address what he knew to be a significant key person risk on the project. Again, however, that assumes that Mr Chidiac's fiduciary duties had a prescriptive element. They did not. Nor is it clear what Mr Chidiac could have done. Mr Hamilton believed that Mr Chidiac was an outstanding strategic programmer. Mr Hamilton gave evidence that he did not think other programmers from Blue Visions were as good. It is doubtful that if Mr Chidiac had introduced Mr Hamilton to other programmers, Mr Hamilton would have changed his mind.

Defences

1. His Honour rejected the defences raised by Mr Chidiac and Mr Gunasegaram to the breach of fiduciary duty claim based on release of any liability (having regard to the terms of the novation agreement) and the estoppel defence, which his Honour observed was not easy to follow: at [152].
2. His Honour also rejected the defence of fully informed consent (based on Blue Visions' entry into the novation agreement). His Honour found that this the defence was not properly pleaded and that Blue Visions would be unfairly prejudiced if the defendants were permitted to raise this defence. Relevantly, his Honour accepted that Blue Visions may have conducted the case differently had it appreciated that the defendants were relying upon this defence. His Honour considered that the defence raised factual questions concerning what was known by Blue Visions and what was disclosed by the defendants, and Blue Visions might have led additional evidence or cross-examined Mr Chidiac: at [151].

Alternative causes of action

1. His Honour did not find it necessary to deal with Blue Visions' alternative causes of action given that it was not seriously contended that Blue Visions could succeed on one of the alternative causes of action if it failed in its claim based on breach of fiduciary duties: at [153]. Nonetheless, his Honour made two observations with respect to the claim based on the statutory duties imposed, relevantly, on officers or employees of a corporation by the Corporations Act, ss 182 and 183, noting that the focus of the claim was s 182(1)(a).
2. First, he found that Mr Chidiac did not improperly use his position with Blue Visions to obtain work from Strategic Projects for Aspire; rather, Mr Chidiac simply indicated a willingness to continue to work for Strategic Projects which caused Mr Hamilton to do what he did: at [156].
3. Second, he found that the defence of fully informed consent does not specifically apply to a claim based on s 182 of the Corporations Act, although consent may be relevant to the question of whether an employee or other officer acts improperly: at [157].

Remedies

1. After observing that it was not strictly necessary to deal with the question of remedies, his Honour went on to make a number of findings.
2. First, had Blue Visions succeeded in its claim for breach of fiduciary duties it would have been entitled, at its election, to either equitable compensation or an account of profits, and the position under s 1317H of the Corporations Act was similar. On the other hand, the remedy for breach of contract was confined to damages suffered by Blue Visions as a consequence of the relevant breach: at [159].
3. Second, if an account of profits had been awarded, the amount of profits assessed by his Honour was $1,240,912.38: at [166]. That amount comprised $657,636.71 in respect of the period between 15 April 2014 (the date Aspire commenced work on the project) until 10 July 2015 (the approximate date on which Aspire performed work following its successful tender) and $583,275.67 in respect of the period was between 11 July 2015 and 31 August 2016 (the date on which Blue Visions ceased performing work on the project): at [160].
4. Third and alternatively, any award of compensation should be on the basis of loss of a chance, being the opportunity to continue to supply services to Strategic Projects following Mr Chidiac's departure: at [167]. However, having not found breach, his Honour did not make that assessment, because it was not possible in the absence of findings of breach of duty to formulate the relevant counterfactual.

Blue Visions' grounds of appeal

1. There are three parts to the appeal by Blue Visions. The first concerns the partial novation of the hospital project to Aspire and whether Mr Chidiac and Mr Gunasegaram had a conflict of interest in pursuing a gain in relation to that transaction by reason of their personal interests in Aspire. Blue Visions contends that his Honour erred in not finding that Mr Chidiac and Mr Gunasegaram each breached their fiduciary duties and statutory duty under s 182(1) of the Corporations Act by diverting part of the business of Blue Visions to Aspire (grounds 1 and 2).
2. The second and third parts of the appeal assume that Blue Visions succeeds on the first part. They concern the accessorial liability of Aspire for any breaches of fiduciary duty by Mr Chidiac and Mr Gunasegaram (ground 3), and the available remedies, in particular, the claim by Blue Visions for an account of profits or damages (ground 4).

Notice of contention

1. The notice of contention filed by Mr Chidiac and Aspire raises four issues. First, it is contended that the primary judge erred in holding that it was common ground that they owed fiduciary duties of the type alleged and that his Honour should have found that Mr Chidiac did not owe fiduciary duties to Blue Visions of the type alleged (notice of contention, grounds 1-3).
2. Second, it is contended that the primary judge erred in holding that the defence of informed consent was not pleaded and that it was too late to raise it at trial, and that his Honour should have found that Mr Chidiac had made out the defence of informed consent (notice of contention, grounds 4-6).
3. Third, it was contended that there was not a sufficient causal relationship between the alleged breaches of fiduciary duty and any profit earned by Mr Chidiac or Aspire or loss suffered by Blue Visions (notice of contention, grounds 7-10). Alternatively, it was contended that no account of profits would be recoverable after 11 July 2015 because of the absence of causation, after that date (notice of contention, grounds 11-13).
4. Fourth, it was contended that the primary judge erred in holding that Mr Chidiac could not give an explanation in cross-examination for why "discretion" concerning who owned the (new) business was important (notice of contention, ground 14).

Relevant principles: fiduciary obligations

1. It has been remarked that the principles governing fiduciary duties are easy enough to state in general terms, but often difficult to apply to concrete facts: Australian Careers Institute Pty Ltd v Australian Institute of Fitness Pty Ltd [2016] NSWCA 347; (2016) 116 ACSR 566 at [130] (Bathurst CJ), citing R P Austin and I M Ramsey, LexisNexis, Ford, Austin & Ramsay's Principles of Corporations Law, Vol 2 (at Service 130) at [9.010]. Nonetheless, it is useful to recall some basic principles.
2. First, as Mason J explained in Hospital Products at 96-97, the critical feature of fiduciary relationships is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense. Thus, it is said that the other person is vulnerable to abuse by the fiduciary of his or her position.
3. Second, the scope of the fiduciary's duties must be accommodated to the particular circumstances of the underlying relationship that gives rise to the duties in the first place: Howard v Federal Commissioner of Taxation (2014) 253 CLR 83; [2014] HCA 21 (Howard) at [34] (French CJ and Keane J); Hospital Products at 102 (Mason J). Thus, when explaining that contractual and fiduciary relationships can co-exist, Mason J remarked in Hospital Products at 97: In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction. This statement of Mason J was referred to with approval in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19 at [91].
4. Third, the basic principle was stated by Mason J in Hospital Products at 103: [a fiduciary] is under an obligation not to promote his personal interest by making or pursuing a gain in circumstances in which there is a conflict or a real or substantial possibility of a conflict between his personal interests and those of the persons whom he is bound to protect...

Relevant provisions of the Corporations Act

1. Blue Visions also relied upon breach of s 182(1) of the Corporations Act which provides: 182 Use of position--civil obligations Use of position--directors, other officers and employees (1) A director, secretary, other officer or employee of a corporation must not improperly use their position to: (a) gain an advantage for themselves or someone else; or (b) cause detriment to the corporation.
2. Where a person has contravened a corporation civil penalty provision, a court may order the person to compensate the corporation for damage suffered by the corporation if the damage resulted from the contravention: s 1317H(1). Section 182(1) is a corporation civil penalty provision: s 1317E(1).
3. Further, a person who is "involved" in a contravention of s 182(1) also contravenes the provision: s 182(2). The concept of being "involved" in a contravention is defined in s 79 of the Corporations Act which provides that a person is involved in a contravention if, and only if, the person, among other things, has aided, abetted, counselled or procured the contravention (sub-par (a)), or has been in any way, by act or omission, directly or indirectly, knowingly concerned in, or party to, the contravention (sub-par (c)).
4. The standards of conduct required by s 182 are to be determined objectively: The Queen v Byrnes (1995) 183 CLR 501 at 514-515; [1995] HCA 1 and Doyle v Australian Securities and Investments Commission (2005) 227 CLR 18; [2005] HCA 78 at [35]-[37]. By "objectively" is meant the standards of conduct that would be expected of a person in the position by reasonable persons with knowledge of the duties, power and authority of the position, and the circumstances of the case, including the commercial context: Doyle at [35], citing Byrnes at 514-515 and Angus Law Services Pty Ltd (in liq) v Carabelas (2005) 226 CLR 507; [2005] HCA 23 at [65] (Gummow and Hayne JJ), [72] (Kirby J).
5. To make out a contravention of s 182(1) it is also necessary to establish that, in engaging in the relevant conduct, the director's purpose was to gain a relevant advantage or cause detriment: Chew v The Queen (1992) 173 CLR 626 at 632-633; (Mason CJ, Brennan, Gaudron and McHugh JJ); [1992] HCA 18; Hart Security Australia Pty Ltd v Boucousis [2016] NSWCA 307 at [85] (Meagher JA, Bathurst CJ and Beazley P agreeing). The pleading of Mr Chidiac's (and Mr Gunasegaram's) subjective purpose, as being to gain an advantage for himself or Aspire when using his position in the manner pleaded (see [121] above), was necessary to make out the alleged contravention of s 182(1); Hart Security at [85]. Although not pleaded (and no complaint seems to have been made at trial), it is tolerably clear from Blue Visions' written opening submissions at trial (pars 52 and 69) that this was the subjective purpose relied upon by Blue Visions.

(1) Preliminary matters: notice of contention, grounds 1-3

1. It is convenient first to address two preliminary matters: (a) grounds 1-3 of the notice of contention, and (b) the objection by Mr Chidiac and Aspire to Blue Visions raising a new case on appeal directed to a conflict of interest and duty.

Notice of contention, grounds 1-3

1. Grounds 1-3 of the notice of contention assert that the primary judge misunderstood what was common ground at trial concerning the type of fiduciary duties owed by Mr Chidiac and Mr Gunasegaram, relevantly, not to pursue their personal interests in conflict with those of Blue Visions, and that the precise scope of their duties must be accommodated to the particular circumstances of the underlying relationship that gives rise to the duties in the first place, referring to the remarks of Mason J in Hospital Products at [102].
2. This complaint directs attention to the way in which the case was conducted at trial. In this Court, Mr Chidiac and Aspire emphasised that the defendants' opening submissions at trial went no further than recognising that, as a matter of general principle, employees are capable of owing fiduciary duties to their employers, whilst noting that employees are not fiduciaries at all times and for all purposes.
3. The emphasis placed on the defendants' opening submission ignored that by the end of the trial, the issues in dispute had narrowed. Thus, in closing addresses, senior counsel who appeared for all the defendants submitted: Now, there is, of course, no dispute between us that in some circumstances some aspects of the duties of a senior employee towards their employer can bear a fiduciary character. But we say, as the Courts and the texts always say, that conclusion is the beginning of the inquiry and not the end of it. The true inquiry is always, "Was this an aspect of the relationship which was fiduciary in character? And, if so, what is the precise content of the fiduciary duty that was owed?" Now, our primary position is that this was not an aspect, this relatively casual conversation which is alleged against us to have occurred between Mr Hamilton and Mr Chidiac at that early occasion, not an occasion in which fiduciary obligation does in any strong sense apply because there is no making of an arrangement for future provision of services. … (Emphasis added)
4. Plainly, by the end of the trial it was not in dispute that Mr Chidiac and Mr Gunasegaram were subject to fiduciary duties given their functions and responsibilities as senior employees of Blue Visions. Those fiduciary duties can be stated in shorthand as the duty not to obtain any unauthorised benefit from the relationship (the no-profit rule) and not to be in a position of conflict (the no conflict rule): Breen v Williams at 93-94, 113; Pilmer at [74], [78]; Friend v Brooker at [84]-[86]; Howard at [31]-[33], [56], [62]. As indicated, Blue Visions' case as pleaded and run at trial only relied upon the conflict rule.

New conflict of interest and duty case

1. As indicated, the breach of fiduciary duty case advanced by Blue Visions against Mr Chidiac in this Court was put in two ways. Blue Visions' primary emphasis on appeal was the alleged conflict between Mr Chidiac's personal interests and his duty as an employee in contract to act diligently in the interests of Blue Visions. The latter was said to reflect an employee's duty of due and faithful performance of the employee's employment: Concut Pty Ltd v Worrell [2000] HCA 64; (2000) 75 ALJR 312 (Concut) at [25] (Gleeson CJ, Gaudron and Gummow JJ).
2. According to the submission, Mr Chidiac's failure to report his conversation with Mr Hamilton was inconsistent with his contractual duty as an employee to Blue Visions. Blue Visions submitted that Mr Chidiac was bound by the contract to inform his employer of the approach from Strategic Projects so that Blue Visions could protect itself from that approach.
3. Mr Chidiac and Aspire objected to Blue Visions raising a new case on appeal alleging a conflict of interest and duty based on an employee's common law or contractual duties. Senior Counsel for Blue Visions accepted that a conflict of interest and duty case of this type was not pleaded by Blue Visions, and was not the way in which the primary judge had dealt with the fiduciary duty case.
4. Blue Visions did not point to any exceptional circumstances that would justify allowing it to raise a new argument on appeal that had not been put at trial, when it had an opportunity to do so: Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68 at 71.
5. In my view, Blue Visions should not be permitted to depart from its pleaded case and the way in which its case was advanced at trial and dealt with by the primary judge.

Blue Visions' submissions

1. Blue Visions submitted that, by his response to Mr Hamilton, and by his subsequent conduct, Mr Chidiac placed himself in a position of conflict and thereby breached his fiduciary duty. According to the submission, Mr Chidiac preferred his own interests to Blue Visions' interests by (a) not reporting what he learned, namely, Mr Hamilton wanted to and was taking steps to appoint Aspire or Mr Chidiac in place of Blue Visions, (b) setting up Aspire, while an employee, and (c) signing the novation agreement on 8 April 2014.
2. Blue Visions submitted that, for the same reasons, Mr Chidiac breached the statutory duty in Corporations Act, s 182 because, by his response to Mr Hamilton, and by not speaking to Mr Khreich, he used his position, in effect, to defeat the purpose of the notice of his resignation to benefit himself and Mr Gunasegaram through Aspire. That conduct was said to constitute an improper use of his position.
3. Blue Visions pointed to his Honour's finding that Mr Khreich felt pressured to sign the novation agreement, and submitted that Mr Khreich could have been protected from that pressure if he had been warned by Mr Chidiac about the approach from Mr Hamilton, if Mr Chidiac had not accepted the novation while employed by Blue Visions, if Mr Khreich was not misled by Mr Gunasegaram (or at least did not have conflicting advice from Mr Gunasegaram) in relation to Mr Parkhouse and his advice to agree to the novation, and if Mr Hamilton did not have an assurance that Mr Chidiac would accept his offer.
4. Blue Visions submitted that, absent knowing Mr Chidiac's position, Mr Hamilton had little option but to accept another qualified strategic programmer supplied by Blue Visions because Strategic Projects had no right to terminate the contract. Blue Visions argued that it was immaterial that Mr Khreich signed the novation agreement on 15 April 2015 because when Mr Chidiac signed the agreement on 8 April 2015, he had not spoken to Mr Khreich about the novation and did not know if Mr Khreich would agree to the novation.
5. In oral argument in reply, Blue Visions submitted that by 28 March 2014, Mr Chidiac (and Mr Gunasegaram) had a prospective interest in Aspire as a 50 percent shareholder in the company and unitholder in the trust to be established, by reason of their conversation with Mr Rodrigues, the accountant, on 26 March 2014. According to the submission, on a fair reading of Mr Rodrigues' email of 26 March 2014, Mr Chidiac and Mr Gunasegaram "were certainly both going to have an interest at that time". Blue Visions described that interest as being "in the equitable sense".

Mr Chidiac and Aspire's submissions

1. Mr Chidiac and Aspire submitted that an employee has a right to resign his or her employment and to take steps in preparation of that possibility, such as by interviewing for another job or establishing a corporate structure through which to carry on business, or even taking preliminary steps to compete with the employer after the employment comes to an end. Reference was made to Blackmagic Design at [102]; and Manildra Laboratories Pty Ltd v Campbell [2009] NSWSC 987 at [77].
2. Mr Chidiac and Aspire also submitted that it is not the case that a departing employee must refuse to answer an enquiry from a customer regarding future work. Reference was made to Weldon & Co Services Pty Ltd v Harbinson at [77]. According to the submission, given Blue Visions' ongoing relationship with Strategic Projects, it was in Blue Visions' interest that Mr Chidiac gave a helpful and non-evasive answer to Mr Hamilton.
3. Mr Chidiac disputed Blue Visions' contention that he, with Mr Gunasegaram, set up Aspire "to take over part of the hospital project". Mr Chidiac pointed to the primary judge's findings at [137] that he and Mr Gunasegaram contemplated when they gave notice of their resignations in March 2014 that, following their departure from Blue Visions, they would engage in some business activity together but that there was no evidence of what that activity was. Mr Chidiac emphasised that this finding is not challenged on appeal.
4. Mr Chidiac submitted that he was not in a position of conflict when he agreed to Mr Hamilton's proposal to novate part of the hospital project, arguing that there was no actual conflict or "real sensible possibility of conflict" between his personal interest in having the strategic programming component of the work for Aspire and the interests of Blue Visions to whom he owed his duty. The submission continued that both Blue Visions and Mr Chidiac's own interests were best served by the partial novation of the contract for the hospital project, in circumstances where Mr Hamilton was not going to accept a replacement strategic programmer and the only other option was the termination of the whole contract.
5. Mr Chidiac submitted that it is not to the point that he signed the novation agreement (on behalf of Aspire) prior to Mr Khreich signing it, because as the primary judge found at [66], Mr Khreich had earlier told Mr Hamilton on 31 March 2014 that Mr Khreich would do it (the novation), if Mr Hamilton could get Mr Chidiac to agree to it.

Reasoning

1. The starting point is to identify the precise nature of the breach of fiduciary duty advanced by Blue Visions against Mr Chidiac and Mr Gunasegaram. Although the relevant part of Blue Visions' pleading appeared under the heading "Diverting opportunities", the pleading conflated two separate concepts: the misappropriation of company property without lawful authority and the diversion of corporate opportunities. The misappropriation rule can be stated relatively easily: a director may not apply company property either for the director's personal benefit or for the benefit of any other person without the authority of the company. On the other hand, the diversion of the opportunity to make a contract, before it comes into existence, should be understood as properly one for the application of the conflict and profit rules.
2. This case concerned an existing contract, and Blue Visions' claim as pleaded was that Mr Chidiac and Mr Gunasegaram diverted (part of) the benefit of the hospital project from Blue Visions to Aspire. That pleading might be thought to invoke the misappropriation rule, but the partial novation of the hospital project was approved by Blue Visions and no claim was advanced based on the misappropriation rule. Instead, Blue Visions' claim was advanced by reference to the principles relating to the diversion of a business opportunity which the employer is actively pursuing, relying solely on the conflict rule. (Of course, in this case, Blue Visions was not pursuing a business opportunity, it already had the benefit of the hospital project).
3. The essential question raised at trial and again on appeal is whether there was a real or sensible possibility of conflict between Mr Chidiac's personal interests and the interests of Blue Visions to whom he owed his duties when he responded to Mr Hamilton's enquiry in the way in which he did on about 26 March 2014, and thereafter in causing Aspire to enter into the partial novation of the hospital project on 8 April 2014.
4. In this regard, it is important to keep in mind the commercial and legal context. Blue Visions' ability to provide the contracted-for services to Strategic Projects was affected by two matters. One is that Mr Hamilton considered Mr Chidiac to be in effect irreplaceable. The other is that Mr Chidiac was not subject to any post-employment restraints or obligations.

Conversation between Mr Chidiac and Mr Hamilton on about 26 March 2014

1. In his affidavit evidence Mr Chidiac deposed that after he informed Mr Hamilton that he was resigning from Blue Visions, the conversation continued in the following terms: Hamilton: Well, would you be interested in continuing to assist us in the project? Chidiac: Thank you. I do really enjoy the project and the challenge of it. I enjoy working with the people involved in it. Hamilton: Alright, I'll go and look into it.
2. Mr Chidiac adhered to his affidavit evidence in cross-examination. When asked why he did not tell Mr Khreich what Mr Hamilton told him, Mr Chidiac replied that "Mr Hamilton said he was going to speak to Adel [Mr Khreich] or leave it with him". Two things should be said about this answer. First, Mr Chidiac had not previously given evidence-in-chief (in his affidavit) that Mr Hamilton said he would speak to Mr Khreich. Mr Chidiac seems to have drawn an inference when giving this answer in cross-examination. Second, the primary judge was not asked and did not make a finding that Mr Hamilton actually said that he would speak to Mr Khreich. Nor did Mr Chidiac and Aspire seek such a finding on appeal. Later, in cross-examination, Mr Chidiac also gave the following answer: I just said I was interested to his question to me essentially. This answer seems to be the basis of the primary judge's finding at [65] that Mr Chidiac replied to Mr Hamilton in effect that he was interested in continuing to work on the hospital project.
3. Mr Chidiac rejected the cross-examiner's proposition that he immediately went about setting up a new corporation with Mr Gunasegaram to take on the strategic programming work on the hospital project. He accepted that he did not tell Mr Khreich about his conversation with Mr Hamilton at that point and he explained that Mr Hamilton had said to him "Leave it with him".
4. Four observations can be made. First, the inquiry by Mr Hamilton of Mr Chidiac was directed to the point in time when Mr Chidiac's employment with Blue Visions had concluded. That provides the context for the primary judge's observation that while in a sense in answering Mr Hamilton's question in the way that he did, Mr Chidiac preferred his interests to those of Blue Visions, Mr Chidiac had a legitimate interest concerning what he would do after his contract with Blue Visions terminated. That finding reflected the commercial context that Mr Chidiac was not subject to any post-employment restraints.

Assuming breach of fiduciary duty on 26 March 2014

1. Against the possibility that the above conclusion is wrong, I will deal with what flows from the assumed breach of fiduciary duty by Mr Chidiac's answer to Mr Hamilton's enquiry.
2. Blue Visions submitted in this Court that it lost the opportunity over the five days between Mr Chidiac's conversation with Mr Hamilton (on about 26 March 2014) and Mr Khreich's conversation with Mr Hamilton (on 31 March 2014) to avoid a financial detriment of losing part of the hospital project by taking action to pre-empt the three options presented by Mr Hamilton. That action was identified as the opportunity to nominate a suitable replacement for Mr Chidiac for the strategic programming function under the hospital project. In response to Mr Chidiac and Aspire objection that such a case had not been raised at trial, Blue Visions pointed to references in its oral submissions at trial to damages being assessed on the basis of a loss of chance or loss of opportunity, including its reply submissions (pars 14-19) dated 17 February 2017.
3. In support of their objection to Blue Visions raising this point, Mr Chidiac and Aspire submitted that if this case had been raised at trial, it would have most likely been the subject of cross-examination of at least Mr Khreich. They submitted that the references at trial to loss of opportunity were in a different context: namely, whether or not the contract with Strategic Projects would have been terminated in any event and, if not, what other factors would have been relevant to the relationship between Blue Visions and Strategic Projects going forward.
4. Having reviewed the relevant transcript references and Blue Visions' reply submissions at trial, it is plain that the references at trial by Blue Visions to loss of opportunity principles were in a different context, as Mr Chidiac and Aspire contended, namely, whether there should be an allowance in assessing damages for the possibility that the contract for the hospital project would have been terminated by Strategic Projects in any event. At trial, Blue Visions characterised the loss of the chance of retaining the contract as the "risk of loss of the contract", and submitted that there was no evidence to suggest that Blue Visions was at risk of this occurring in any event. Mr Chidiac and Aspire responded that there was some risk of that occurring.

Aspire's entry into the novation agreement

1. The next question is whether Mr Chidiac preferred his personal interests to the interests of Blue Visions by entering into the partial novation of the hospital project in the presence of a real or sensible conflict. Blue Visions accepted that the question of a real or sensible possibility of conflict had to be addressed was at the time the novation agreement was signed by Mr Chidiac on behalf of Aspire on 8 April 2014.
2. It is useful to recall the circumstances in which Mr Chidiac signed the partial novation agreement. Following their conversation on about 26 March 2014, Mr Chidiac next spoke with Mr Hamilton after Mr Hamilton spoke to Mr Khreich on 31 March 2014. Mr Hamilton told Mr Chidiac of the terms of his conversation with Mr Khreich, including the three options that he saw available to Mr Khreich going forward, and that Mr Khreich had chosen the option that would mean that part of the arrangement which Strategic Projects had with Blue Visions involving Mr Chidiac would be novated so that Mr Chidiac would continue working on the project. Mr Chidiac formed the view correctly (based on what he had been told by Mr Hamilton), that Mr Khreich had no problem with him remaining involved in the hospital project.
3. Although Mr Chidiac did not speak directly to Mr Khreich in relation to the novation agreement, Mr Hamilton effectively acted as the intermediary between Mr Chidiac and Mr Khreich. That explains the statements contained in the third paragraph of the covering letter sent by Mr Hamilton to Mr Khreich on 3 April 2014 (which were repeated in the covering letter dated 8 April 2014, extracted at [114] above): Discussions have been had with John Hamilton, Adel Khreich and Sam Chidiac to resolve this issue. All parties have verbally agreed that partial novation of the abovementioned contract would be the appropriate solution.
4. Having spoken with Mr Hamilton on 31 March 2014 or the following day, Mr Chidiac determined to set up a corporate entity to have the work involving himself novated to the entity, which would employ him and that he needed to involve another person in the new business in order to operate successfully. That other person was Mr Gunasegaram. As Besanko J observed in Blackmagic Design at [102], there is no absolute prohibition on an employee making arrangements during his employment to compete with his employer after his employment has terminated.

Statutory claim - s 182(1)

1. It was not suggested by Blue Visions that if the fiduciary duty claim failed there would be any different outcome on the Corporations Act claim under s 182(1). For completeness, however, I would mention four matters. First, the submissions by Blue Visions in this Court in support of the statutory claim were directed to the alleged misuse by Mr Chidiac of his position in the five-days between 26 March and 31 March 2014. According to the submission, "by his response to Mr Hamilton, and by not speaking to Mr Khreich, [Mr Chidiac] used his position, in effect defeating the purpose of his notice of resignation which he gave, to benefit himself and Mr Gunasegaram, through Aspire". There are a number of difficulties with this submission. One is that the s 182(1) claim was not pleaded in these terms. Another is that the proposition that Mr Chidiac's subjective purpose when acting in the manner alleged in the submissions, was to gain an advantage for himself (and Mr Gunasegaram), through Aspire, was not put to Mr Chidiac in cross-examination. That is unsurprising given that Blue Visions' claim was not pleaded in those terms. A further difficulty is that, for the reasons given above (see [206]-[209]), Blue Visions should not be permitted to raise a new case on appeal based on a loss of opportunity to avoid a financial detriment by taking action to nominate a suitable replacement for Mr Chidiac during the five days between 26 March 2014 and 31 March 2014.
2. Second, I do not consider that there was any impropriety in Mr Chidiac honestly responding to Mr Hamilton's enquiry as to whether he might be interested in continuing to work on the hospital project, in circumstances where Mr Chidiac made no commitment but had only expressed an interest, he was not subject to any post-employment contractual restraints, and the matter was left by Mr Chidiac on the basis that Mr Hamilton would discuss that possibility with Mr Khreich.
3. Third, there is no finding by the primary judge, and I would not make a finding in the absence of cross-examination, that Mr Chidiac's subjective purpose when he responded to Mr Hamilton's enquiry was to make a gain for himself, or through Aspire, or to cause detriment to Blue Visions. The enquiry by Mr Hamilton was unexpected and, as his Honour found, Mr Chidiac had not seriously considered that as an option before Mr Hamilton raised the possibility with him: at [140]. Mr Chidiac's response did not involve any commitment to Mr Hamilton, and, as I have said, the possibility of his continuing to work on the hospital project was left for discussion between Mr Hamilton and Mr Khreich. Nor was Mr Chidiac privy to Mr Hamilton's intended negotiation strategy with Mr Khreich.

Other matters

1. Given that Basten JA would allow Blue Visions' appeal based on the conduct of Mr Chidiac and the accessorial liability of Aspire, it is appropriate that I briefly address why I respectfully disagree with the reasons for his Honour's conclusion.

(a) Fiduciary duty

1. His Honour's conclusion with respect to breach of fiduciary duty proceeds upon the reasoning that Mr Chidiac diverted the benefit of part of the contract to himself, through Aspire because "by advising Mr Hamilton of his resignation, Mr Chidiac triggered Mr Hamilton's offer, which in turn he accepted, whilst still working for Blue Visions". However, the relevant question, raised by the case as pleaded, is whether Mr Chidiac preferred his own interests to the interests of Blue Visions in the presence of a real or sensible possibility of conflict.
2. That directs attention to how it is said that Mr Chidiac preferred his own interests to those of Blue Visions. The following observations can be made in that regard. First, it was not Blue Visions' case that Mr Chidiac could not inform Mr Hamilton of his resignation. Hence, it is not to the point that Mr Chidiac's resignation may have "triggered" Mr Hamilton's enquiry of Mr Chidiac.
3. Second, Mr Hamilton's enquiry of Mr Chidiac on about 26 March 2014 was no more than an enquiry; it was not an offer. Given that he was not subject to any post-termination restraints, and that his functions and responsibilities did not include considering or deciding whether to surrender part of the contract, Mr Chidiac did not misuse his position or prefer his interests to Blue Visions' interests in honestly answering that enquiry which went no further than indicating an interest, and was left on the basis that Mr Hamilton would discuss the possibility with Mr Khreich.
4. Third, at the point in time when Mr Chidiac accepted an offer by Mr Hamilton there was no real or sensible possibility of a conflict, given that Mr Khreich had agreed to the partial novation, which he saw as in Blue Visions' interests when faced with the possibility of losing the entire contract.
5. Fourth, I do not consider that this case is analogous to cases such as Keech v Sandford (1796) Sel Cas t King 61; (1796) 25 ER 223 and Chan v Zacharia (1984) 154 CLR 178; [1984] HCA 36. Those cases are distinguishable on the ground that they involved a diversion of a business opportunity by a fiduciary, who was in a position of conflict.
6. In Keech v Sandford, the trustees' interest in obtaining a renewal of the lease for themselves was in conflict with their duty to do their best to obtain a renewal of the lease for the trust. Here, as I have said, the functions and responsibilities of Mr Chidiac did not include considering or deciding whether Blue Visions should surrender part of the contract or otherwise respond to the options given by Mr Hamilton to Mr Khreich on 31 March 2014. That was within Mr Khreich's functions and responsibilities as managing director. Faced with an inability to nominate a suitable replacement for Mr Chidiac, and the threat by Mr Hamilton to terminate the whole contract, Mr Khreich made a commercial decision to surrender part of the contract so as to retain the balance.

S 182(1) - misuse of position

1. His Honour's conclusion that Mr Chidiac breached s 182(1) proceeds upon the basis that it was Mr Chidiac's willingness to continue to work on the hospital project (for Strategic Projects), that had the practical effect of forcing Mr Khreich to relinquish part of the contract in order to retain the balance. That reasoning accepts that Mr Chidiac could properly refuse to continue to work for Blue Visions, but asserts that he could not properly continue to execute the contract for his own benefit. And it is said, Mr Chidiac's clear purpose in accepting Mr Hamilton's offer was to gain the identified advantage.
2. Three observations can be made. First, while it can be accepted that a course of conduct can give rise to a breach of the statutory duty, it is necessary to avoid reasoning back from an advantage obtained at a later point in time, to attribute to earlier conduct (impugned as misuse of one's position), the subjective purpose to gain the identified advantage at the earlier point in time.
3. Second, that a third party takes advantage of a perceived weakness in the bargaining position of a contracting party, who cannot nominate a suitable replacement for the services provided under the contract by a valued employee who has given notice of his resignation, does not mean that the employee has used - or misused - his position if he honestly answers an enquiry by the third party as to his willingness to work for the third party, in circumstances where the employer's functions and responsibilities do not include considering and deciding whether to surrender part of the contract and there are no post-contractual restraints on the employee.
4. Third, to say that Mr Chidiac could not properly execute the benefit of the contract for his own personal benefit, is not to describe what occurred in this case. That Aspire obtained the partial novation agreement, while obviously for Mr Chidiac's own benefit, was not a misuse of his position as an employee of Blue Visions, given that his employer had agreed to that course on 31 March 2014 and signed the partial novation agreement on 15 April 2014.

Blue Visions' submissions

1. Blue Visions submitted that Mr Gunasegaram breached his fiduciary duty and s 182 of the Corporations Act (a) by his conduct in connection with the novation arrangements requested by Mr Hamilton and (b) by his conduct along with Mr Chidiac in setting up Aspire whilst still employed by Blue Visions.
2. In its written submissions, Blue Visions focused attention on five matters. The first challenged the primary judge's finding that the preparatory work by Mr Gunasegaram, in anticipation that he and Mr Chidiac might resign, was not a breach of fiduciary duty. Blue Visions submitted that what was done was not mere preparatory steps, but involved active competition.
3. The second matter is related to the first and concerned the obtaining of advice from the accountant, Mr Rodrigues, concerning a corporate structure which might be utilised by Mr Gunasegaram and Mr Chidiac.
4. The third, fourth and fifth matters were that Mr Gunasegaram preferred his own interests to that of Blue Visions in giving advice to Mr Khreich in his 28 March 2014 email and in the statement at about the same time to Mr Parkhouse, as well as in assisting Mr Chidiac in setting up Aspire.
5. Blue Visions also challenged the primary judge's finding that there was no evidence of reliance by Mr Khreich on the email which Mr Parkhouse sent to him on 30 March 2014 recording Mr Gunasegaram's advice that Mr Parkhouse not be put forward as a replacement for Mr Chidiac. Reference was made to Mr Khreich's affidavit evidence to the effect that he considered Mr Parkhouse suitably qualified to replace Mr Chidiac.

Mr Gunasegaram's submissions

1. Mr Gunasegaram sought to uphold his Honour's finding that each of the three matters relied upon by Blue Visions - the preliminary steps taken towards setting up Aspire, his prompt and accurate reporting to Mr Khreich of a conversation he had had with Mr Hamilton without disclosing his interest in Aspire and the email to Mr Khreich regarding Mr Parkhouse - was not causative of any loss to Blue Visions.
2. Mr Gunasegaram submitted that he did not have an interest in Aspire at the time of his 28 March 2014 email to Mr Khreich because it was only after Mr Khreich had spoken with Mr Hamilton on 31 March 2014 that Mr Chidiac determined, following discussions with Mr Gunasegaram, to pursue a new business providing services to Strategic Projects through Aspire, which was registered on 3 April 2014. According to the submission, Mr Gunasegaram was not under any obligation to disclose to Mr Khreich in his 28 March 2014 email that he had an interest in Aspire, when that was not the case.
3. In oral argument, Mr Gunasegaram emphasised that Mr Khreich did not give direct evidence that the 31 March 2014 email from Mr Parkhouse was a matter which he had in mind when dealing with Mr Hamilton. And insofar as Blue Visions relied upon an inference that this email was something that Mr Khreich had in his mind, Mr Gunasegaram pointed to the evidence of Mr Khreich that he did not suggest alternative people to Strategic Projects to provide programming services as he believed it would be futile and that Mr Hamilton had already made up his mind that Mr Chidiac could not be replaced. Mr Gunasegaram submitted that Mr Khreich's decision not to put forward persons as replacements of Mr Chidiac, such as Mr Parkhouse, was not motivated by any view he held as to the qualifications of such persons to fill that role.

Reasoning

1. It is convenient to address the attack on the primary judge's rejection of the claim against Mr Gunasegaram by reference to the five matters identified in Blue Visions' submissions.
2. First, the complaint that the work by Mr Gunasegaram in anticipation that he and Mr Chidiac might resign was not mere preparatory steps goes nowhere given the unchallenged finding by the primary judge at [136] that Mr Gunasegaram (and Mr Chidiac) did not pursue their personal interests in conflict with those of Blue Visions before they resigned (in March 2014).
3. Another difficulty with this complaint is that although his Honour found that Mr Gunasegaram's conduct in improperly asking Mr Clarke to search domain names and register the domain name "endpointconsulting.com" was a breach of duty, Blue Visions did not challenge his Honour's finding at [136] that those breaches by Mr Gunasegaram were minor and it was not suggested that any loss flowed from them or that Mr Gunasegaram or Mr Chidiac obtained any real benefit from them.
4. Second, that Mr Gunasegaram and Mr Chidiac met Mr Rodrigues, the accountant, no later than 26 March 2014 to discuss establishing a corporate structure, did not involve a breach of fiduciary duty. For the reasons given above, in this case, the act of obtaining advice concerning a corporate structure which may be utilised on the expiry of the employee's period of notice was a preparatory step to carrying on a business post-employment which did not amount to a breach of fiduciary duty.
5. Third, insofar as complaint is made about the advice Mr Gunasegaram gave to Mr Khreich on 28 March 2014 concerning the three options outlined by Mr Hamilton, the primary judge did not find, and no finding was sought by Blue Visions at trial, that the advice given by Mr Gunasegaram to Mr Khreich in that email involved a breach of fiduciary duty.
6. Fourth, the primary judge found that Mr Gunasegaram's statement on about 31 March 2014 to Mr Parkhouse advising against putting himself forward for the hospital project role, which Mr Parkhouse conveyed in an email to Mr Khreich on 31 March 2014, although not specifically pleaded, was a breach of his fiduciary duties. What is in dispute is his Honour's finding that this this breach did not cause any loss to Blue Visions. At issue is whether the primary judge erred in finding that there was no evidence that Mr Gunasegaram's advice had any effect on Mr Khreich's conduct. That finding is to be considered in the light of the whole of Mr Khreich's evidence.

(5) Defence of fully informed consent: notice of contention, grounds 4, 5 and 6

1. The primary judge concluded that the defence of fully informed consent was not properly pleaded and that it was too late for the defendants to raise it at trial. Mr Chidiac and Aspire challenged this conclusion by pointing to two matters. First, the particulars of the estoppel defence included that Blue Visions was aware of the novation agreement. Second, the defendants' outline of opening submissions (par 38) at trial alleged that Blue Visions gave its informed consent.
2. Blue Visions responded by pointing to the way in which the defence was pleaded and conducted at trial. In particular, in closing submissions at trial, senior counsel for Blue Visions objected to Mr Chidiac and Aspire raising the defence of informed consent in their written closing submissions (par 27). In response, senior counsel for the defendants contended that the informed consent defence had been pleaded and referred to the particulars given under the estoppel defence. Counsel also submitted that the defendants had opened on that basis. In reply, counsel for Blue Visions emphasised that there had been no oral opening by the defendants and no warning drawing attention to par 38 of the defendants' written opening that mentioned fully informed consent.

Reasoning

1. The function of pleadings is "to state with sufficient clarity the case that must be met"; this reflects "the basic requirement of procedural fairness that a party should have an opportunity of meeting the case against him or her": Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286; [1990] HCA 11 (Banque Commerciale); Dare v Pulham (1982) 148 CLR 658 at 664; [1982] HCA 70.
2. A party is entitled to have the opposing party confined to that party's pleadings because parties are entitled to come to trial to meet only the issues raised on the pleadings. However, pleadings are but a means to an end and not an end in themselves: Banque Commerciale at 293 (Dawson J). Thus, a case may be decided on a basis different from that disclosed by the pleadings where the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities: Banque Commerciale at 287.
3. Here, the defendants' pleadings did not adequately put Blue Visions on notice that they were contending that Blue Visions had given informed consent to the alleged breaches of fiduciary duties. The particulars given under the estoppel defence are not fairly to be read as asserting a defence of informed consent. There is no error in the primary judge's analysis of the defendants' case as disclosed on the pleadings.
4. In Betfair Pty Ltd v Racing New South Wales (2010) 189 FCR 356; [2010] FCAFC 133 at [52], the Full Court of the Federal Court referred to the remarks of Isaacs and Rich JJ in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517: Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest. (Emphasis added)

Liability of Aspire: Ground 3

1. Aspire accepted that its liability stands or falls with the liability of Mr Chidiac and Mr Gunasegaram. In light of the conclusions above that the breach of fiduciary duty and Corporations Act claims have failed against them, it is not necessary to address ground 3 concerning the accessorial liability of Aspire.

Causation and remedies: ground 4, notice of contention, grounds 7-10, 11-13

1. Similarly, in light of the conclusions above with respect to the breach of fiduciary duty and Corporations Act claims, it is not necessary to address ground 4, or the notice of contention (grounds 7-10, 11-13) in relation to causation and the appropriate remedy, including the period for any account of profits or equitable compensation.
2. Nonetheless I would briefly indicate my view that if it were necessary to decide, I would uphold the causation argument advanced by Mr Chidiac and Aspire in grounds 11-13 of the notice of contention. This argument had been raised at trial by the defendants but not addressed in terms by the primary judge. The argument was that there was no loss accruing after 11 July 2015.
3. In support of this contention, Mr Chidiac and Aspire pointed to the term of the contract between Blue Visions and Strategic Projects which commenced on 20 May 2010 and ran its full 3 year term and that both options to extend the contract for a further year were exercised. On about 5 June 2015, more than a year after the partial novation, Strategic Projects issued a new request for tender for the provision of programming services for the hospital project. As indicated both Blue Visions and Aspire tendered for that work and Blue Visions was unsuccessful. The evaluation report by Strategic Projects dated 10 July 2015 stated that only Aspire had the demonstrated experience relevant to the Request's requirements and that all other responses rated poorly against the qualitative criteria. On about 13 July 2015, Aspire was awarded the public tender contract and commenced work under that contract.
4. The primary judge made no express finding of a causal connection between the (assumed) breach of fiduciary duty in March and April 2014 (by obtaining the work from Strategic Projects that had previously been performed by Blue Visions) and the gain made by Aspire in respect of the new contract obtained in June 2015 in a competitive government process in which Blue Visions participated. Blue Visions sought to meet this difficulty by submitting that by mid-2015 Aspire had the advantage of incumbency, which placed Blue Visions at a disadvantage in the tender. That Aspire had the advantage of incumbency can be accepted. Blue Visions next submitted that the new contract in June 2015 came about because of the (earlier) breach of fiduciary duties (in March and April 2014). I do not agree. Although not put in terms of a "springboard" argument, that seems to be the effect of its submission.

Explanation for "discretion": notice of contention, ground 14

1. The primary judge found that Mr Chidiac could not give an adequate explanation for why "discretion" concerning who owned the business was important. This was in reference to a remark in the email dated 26 March 2014 from Mr Rodrigues to Mr Chidiac and Mr Gunasegaram recommending use of the structure of a corporate unit trust. In that email, Mr Rodrigues observed that if a search was done on the business (ie, the trust) it would not show who the trustee is and therefore its directors or who the unitholders were. The email concluded: "This will give you the discretion you want".
2. In cross-examination, the explanation given by Mr Chidiac for this reference to "discretion" was that he and Mr Gunasegaram wanted the option to run the business that way. As Blue Visions submitted at trial and again on appeal, the answer given by Mr Chidiac was circular. It was open to the primary judge to find that Mr Chidiac could not give an adequate explanation for why "discretion" concerning who owned the business was important.
3. Ground 14 of the notice of contention should be rejected. I would add that neither party suggested that the outcome of this contention would affect the result of the appeal by Blue Visions.

Grounds of appeal

1. There are two parts to the appeal by Mr Gunasegaram. The first concerns a challenge to the liability findings on the misrepresentation claim concerning the prospects of Blue Visions obtaining work relating to the rollout of the Masters stores by Woolworths. Ground 1 asserts that his Honour erred in the identification of the representations founding Mr Gunasegaram's liability in deceit. Ground 2 asserts that his Honour erred in finding that Mr Gunasegaram owed Blue Visions a duty of care not to cause pure economic loss.
2. The second part concerns various challenges by Mr Gunasegaram to some of the integers in the award of damages (grounds 3, 5, 6 and 7). Ground 4 is not pressed.
3. It is convenient to deal separately with the issues of liability and damages.

Facts

1. In late 2011 or early 2012, Mr Gunasegaram informed Mr Khreich that Woolworths was planning to rollout a chain of stores under the brand name Masters to compete with Bunnings and that he wanted Blue Visions to do the project management consulting work. The primary judge found that Mr Gunasegaram told Mr Khreich that Blue Visions would not need to lodge a tender because he had connections with key people on the board (of Woolworths) and would be able to negotiate the terms of Blue Visions engagement directly. He also told Mr Khreich that the project was very large and that Blue Visions would need to think about a strategy to put the project together: at [91].
2. His Honour further found that Mr Gunasegaram and Mr Khreich had a number of conversations to the same effect in the first part of 2012 and there were extensive discussions and correspondence relating to the Masters project up until the time Mr Gunasegaram resigned in March 2014: at [92]. While none of his Honour's findings concerning those communications are challenged on appeal, it is of assistance to set out those findings in full (at [93] - [118]), in view of the pleading point raised by Mr Gunasegaram in ground 1: [93] Following Mr Gunasegaram's initial discussions with Mr Khreich, Mr Gunasegaram included a reference to the Masters project in the draft financial plan which he sent to Mr Khreich on 23 April 2012 and the updated financial plan for the 18 month period up to 30 June 2012, which he sent to Mr Khreich on 13 June 2012. Those plans showed Masters as a pending project which was forecast to earn $41,800 per month starting in November 2012 and increasing to $83,600 per month from February 2013. [94] On 8 October 2012, Mr Gunasegaram sent an email to Mr Khreich stating that he had spoken to Mr Peter Horton, the General Counsel of Woolworths, privately that morning, that he was sending Mr Horton a copy of Mr Sujit Dutt's CV and that he would "lock him in as the PM [project manager] for the whole rollout rather than just WA". Mr Gunasegaram added: I have not detailed additional supporting resources for either project [the email dealt with another project as well], as they are both happy with the PM [project manager] deciding on that once they commence. (Those are the joys of working with your friends.) [95] On 7 February 2013, Mr Gunasegaram sent Mr Khreich an email saying that he had met with "my friend from Woolworths" who had provided him with information concerning the project. Mr Khreich gave evidence that during 2013 he asked Mr Gunasegaram if he could meet with Woolworths' staff, but Mr Gunasegaram replied that they were only comfortable meeting with him because he knew Mr Horton. [96] On 21 February 2013, Mr Gunasegaram sent Mr Khreich an email attaching a draft paper for the Woolworths board. Attached to that draft was a "Masters Project Staffing Plan", which showed the expected staffing of the project for the first three months. The plan indicated a staff of eight in the first month, rising to 46 in the third month. Other iterations of the staffing plan were sent to Mr Khreich. The last one was sent on 27 January 2014. It still indicated a staff of eight in the first month, rising to 46 in the third month. [97] On 26 February 2013, Mr Gunasegaram wrote to Mr Khreich saying that he had "unofficial news after the audit & risk committee meeting at Woolworths". In an email later that day, Mr Gunasegaram said that the news was that "instead of allowing us to trial on 1 state which I suggested, the recommendation to the board is going to be for us to manage the rollout as currently defined in the business plan for 24 months and to do an audit of progress after 21 months to decide on awarding the balance of works". [98] By about this stage, Blue Visions was facing financial difficulties. In response to Mr Gunasegaram's emails, Mr Khreich said that: We need the work urgently and we have senior people with capability. I am at the stage of sacking people in 2 days' time. Current status is very serious from my point [of] view. [99] On the same day, Mr Khreich wrote to his bank manager saying that "I need the cash and I need it now". The email set out various alternatives to obtain that cash. Mr Khreich explained that since 14 January 2013 "I have had 9 people on my books with nothing to do" awaiting a number of opportunities Blue Visions had to come to fruition. He identified four opportunities, although not by name. I accept Blue Visions' submission that one of those was the Masters project (described as "A large rollout of a property portfolio") and another was the Roy Hill project (described as "A large mining project"). [100] The following day, Mr Khreich asked Mr Gunasegaram to put two employees in Brisbane on leave, in one case without pay until work became available and in another case on annual leave of 2-3 days per week "until Masters kicks in". Mr Gunasegaram then sent an email to a number of employees saying that "[i]n the last few weeks we have been able to get some real long term commitment from clients, but the paperwork has not arrived" and asking the employees to take leave without pay. [101] On 24 April 2013, Mr Gunasegaram sent Mr Khreich an extensive draft of an engagement letter in relation to the Masters project. [102] On 28 April 2013, there was further email correspondence between Mr Khreich and Mr Gunasegaram in relation to the Masters project. Mr Khreich asked "When do we start the masters handover?". Mr Gunasegaram responded "Just waiting until you are happy with the agreement and I will confirm it with Peter [Horton]. They need to send a letter to ASIC for stock market announcement." Mr Khreich replied "I am starting to think this is taking too long and we will not have a meaningful start this year". He also asked whether there were "any more documents", to which Mr Gunasegaram replied "Just the scope of works but I have agreed with them that this has to be a work in progress as we will not be held to it until after 3 months of engagement." Mr Khreich took offence to other statements made in Mr Gunasegaram's email and wrote a long response back in which he praised Mr Gunasegaram's ability "to bring these large projects in" but complained, among other things, about the fact that Mr Gunasegaram "[refused] to ask for help from me until the work is final (like you did with Masters)." [103] On 30 April 2013 and 6 May 2013, Mr Khreich sent Mr Gunasegaram comments (in mark-up) on the draft Masters contract. Mr Gunasegaram responded on 9 May 2013, saying: I have sent the Masters PMC document in draft yesterday without scope (as to be defined within 3 months) and hope to hear back by Monday next week. [104] On 17 May 2013, Mr Khreich wrote to Mr Gunasegaram saying "Need to find a way to kick start Masters. We lost a lot of money in April again", to which Mr Gunasegaram responded "Almost There." [105] On the same day, Mr Gunasegaram sent Mr Khreich a "Masters Project Staffing Plan" which showed that Blue Visions would earn $485,233.10 in the first month of the Masters project, $1,676,245.35 in the second month and $2,271,991.24 in the third month. The document indicated that a large number of people would be employed on the project. [106] On 7 June 2013, Mr Gunasegaram sent an email to Mr Khreich saying that "Our customer will need to make an announcement to market (ASX) in the near future regarding any engagement and we have the opportunity to shape an up to four line statement such as the one below as an introduction". Mr Khreich responded by asking on the same day whether Blue Visions ever got a marked-up contract from Woolworths to which Mr Gunasegaram responded: Not yet, they have some of their own performa [sic] to add and he is circumventing some areas we don't meet due to size and turnover, so Peter is trying to get us on and agree the contract during the engagement if it can't be done before. We may have to work under an LOI [presumably, letter of intent] in the initial phase under the same conditions. Big company, just like a government department. [107] On 4 July 2013, Mr Gunasegaram provided Mr Khreich with some information about potential employees, including Mr Tom Usia. Mr Khreich replied by asking: Is Masters slowness because of Tom taking so long or something else? Because we need that job to start soon to save us as a company to be honest about it. There are many Toms out there. Mr Gunasegaram replied: Tom is a big part of it, as once we lock him or someone else in, I want get [sic] them into the client's office as soon as possible. [108] On 17 October 2013, Mr Gunasegaram sent Mr Khreich an email saying: I spoke with Peter Horton from Woolworths this afternoon and he wants me to start attending the steering committee meeting for the Masters Program Store Rollout starting from next week. It occurs every Wednesday … … I don't mind attending every second one in person if they let me do some of them on the phone, but would also like to introduce you after the first couple of meetings as an alternate for myself if I can't attend if that's ok. [109] On 28 October 2013, there was an email discussion between Mr Khreich and Mr Gunasegaram concerning staffing. The email chain started with Mr Khreich saying: Awaiting your plan for Masters startup and ramp up with realistic figures. and how are we going to avoid another disaster like September please? I need to cut overheads please. It simply is not sustainable. Think of reducing at least 3 salaries on your team who are either pure overhead or regularly under billed. Any Ideas please? Mr Gunasegaram responded with the names of three people he thought could be terminated. There was then further correspondence about terminating an HR person, which ended with Mr Gunasegaram saying: My view is that we cannot engage on large projects without a defined organisation structure which needs to encompass most importantly for these organisations, a good HR and Recruitment system in place with qualified people managing these. It gives them confidence that we are not a backyard operation with low level systems and policies. … [110] On 29 October 2013, Mr Gunasegaram sent Mr Khreich an email saying that he had been to his first Woolworths Project Steering Committee meeting on 23 October 2013 and purporting to give an account of what happened at the meeting. Later emails referred to subsequent committee meetings. [111] There was further correspondence between Mr Khreich and Mr Gunasegaram in November 2013 concerning a ramp-up plan for the Masters project. In an email dated 15 November 2013, Mr Khreich reminded Mr Gunasegaram that he had asked for a plan and expressed concern about "people still sitting around not fully utilised". In an email dated 17 November 2013, Mr Khreich said in relation to the plan that he was looking for "accuracy not fantasy please" and that there were "Many things on hold in the business because of concern about future profitability". [112] On 29 November 2013, Mr Gunasegaram sent Mr Khreich a final draft of the engagement letter asking him to sign it. The covering email said "Once I get the letter back from you, I will go through getting it signed by Woolworths. I believe that Peter is signing it, but it might be Grant." [113] Mr Gunasegaram was unwell in December 2013 and was admitted to hospital for a few days with asthma. [114] On 8 January 2014, Mr Gunasegaram sent Mr Khreich an email saying that "[w]e can start Masters as of next week" and on 23 January 2014 he sent an email saying: - Handover of the office at 3 City View Road, Pennant Hills is forecast during week of 3 Feb 2014. People are moving out between now and then. - I am doing some pre start work and will charge for my time. … - I will be doing a forecast for February in our invoice and will include as many people … as possible. [115] On 4 February 2014, Mr Gunasegaram sent Mr Khreich a revised draft invoice (he had sent an earlier version on 30 January 2014) addressed to Hydrox Nominees, the entity through which Woolworths was carrying out the Masters project. The invoice suggested that Blue Visions had carried out $28,891.80 worth of work in January 2014 and was forecast to carry out $425,769.62 worth of work in February 2014. On the same day, Mr Gunasegaram sent Mr Khreich a draft letter he proposed to send to Mr Horton saying that Blue Visions was able to commence work on 10 February 2014 at the Masters project office at Pennant Hills. [116] On 7 February 2014, Mr Gunasegaram sent an email to "Everyone in BV" saying: I am pleased to advise that we commenced our role on the Masters rollout in January this year. As most of you know this will be a highly challenging yet exciting role for our team at Blue Visions and will involve the rollout of new property assets nationally for several years. We have client approval to announce this internally but not approved for an external announcement yet. Over the next few weeks, some of you will start joining this project and we will be hiring externally as well. [117] There was further correspondence between Mr Khreich and Mr Gunasegaram in February and March 2014 concerning the start date of the Masters project and the fact that Blue Visions had extra staff that should have been terminated if the Masters project was not going ahead. A feature of the correspondence is that Mr Gunasegaram offered explanations for the delay in the start date while at the same time insisting that the project was going ahead. As late as 20 March 2014, Mr Khreich asked if Masters was "dead because you resigned" to which Mr Gunasegaram replied "No it's not". [118] Following Mr Gunasegaram's resignation, on 13 May 2014, Mr Ron Turner of Blue Visions sent an email to Woolworths including a copy of the engagement letter dated 28 November 2013, the letter dated 4 February 2014 to Mr Horton regarding commencement and a copy of its invoice dated 30 January 2014. Woolworths' internal communications following receipt of that email and subsequent correspondence between Blue Visions and Woolworths demonstrate that prior to 4 February 2014, there had been no communications between Blue Visions and Woolworths concerning the Masters Project.

Blue Visions' pleaded claims

1. Blue Visions pleaded that the representations by Mr Gunasegaram between April 2012 and March 2014 in relation to the Masters project involved misleading or deceptive conduct in contravention of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, s 18; alternatively, the representations were false; alternatively, by making the false or misleading representations Mr Gunasegaram breached his duties under his contract of employment, the statutory duties under ss 181 and 182 of the Corporations Act, his fiduciary duties and his duty to exercise reasonable skill and care in performing his functions as an employee.
2. Blue Visions further pleaded that in reliance upon such representations it retained staff when there were no other projects for those staff members to work on and thereby suffered loss and damage.
3. It is not necessary to refer to the pleading with respect to the misrepresentation case concerning Blue Visions obtaining work in relation to the Nicholson's Gold Mine project and the Roy Hill project. While his Honour found that the representations made by Mr Gunasegaram in relation to those projects were also false, he found that no loss flowed from any of those representations. That finding on causation is not challenged by Blue Visions.

Deceit claim

1. After referring to the well-known elements of a claim in deceit stated in Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 at [114], the primary judge found that it was not seriously disputed, nor could it be, that Mr Gunasegaram made a number of false statements to Mr Khreich (and therefore Blue Visions) concerning the Masters project and that Mr Gunasegaram must have known that those representations were false: at [183]. Nor was it seriously disputed, his Honour found, that Mr Gunasegaram intended Blue Visions to rely on those representations by engaging or retaining additional staff: at [183].
2. His Honour observed (at [193]) that while the pleading of the deceit case could have been better, it was not so defective that it should fail altogether, giving the following reasons (at [194]-[196]): [194] It is plain from the pleading that what is alleged is that, over an extended period of time commencing on or about 23 April 2012 and ending on 28 February 2014, Mr Gunasegaram made a substantial number of representations to the effect that (1) he had a close relationship with one or more key people at Woolworths; (2) as a result of that close relationship, Blue Visions had good prospects of being retained by Woolworths (or its relevant subsidiary) to project manage the rollout of Masters stores throughout Australia; (3) and later, that Blue Visions had been retained by Woolworths to do that work. It is alleged that those representations, to Mr Gunasegaram's knowledge, were false. It is also alleged that, as a consequence of those representations, Blue Visions hired and retained staff that it would not otherwise have hired or retained. The pleading gives particulars of the precise representations on which Blue Visions relies. In my opinion, that was an adequate pleading of a claim in deceit. [195] It is not specifically pleaded that Mr Gunasegaram intended Blue Visions to rely on the representations. However, the case was clearly conducted on that basis and it is not alleged that the pleading was defective for that reason. [196] The pleading was not defective because it alleged that certain specific representations were false when they were true. The mere fact that each representation relied on was not false does not make the pleading defective. Nor was the pleading defective because it failed to plead specific acts of reliance on each representation. In my opinion, Blue Visions was not required to put its case in that way, and there would have been a degree of unreality in the case had it done so. The substance of the case is not that each statement made by Mr Gunasegaram caused Mr Khreich to do a particular thing, but rather that the specific representations conveyed the representations set out above and those representations caused Mr Khreich to agree to employ staff and to retain staff who otherwise would not have been employed or retained. It is true that nowhere is the case pleaded in precisely that way. However, that was the way the case was run and in my opinion that case fell within the scope of the pleading, since the relevant representations and acts of reliance were pleaded. Moreover, the purpose of the pleading was to identify precisely the conduct engaged in by Mr Gunasegaram which is said to have been deceitful so that Mr Gunasegaram was given an opportunity to answer those allegations. By pleading each representation on which Blue Visions relied on its claim, the pleading did that. (Emphasis added)

Alternative causes of action

1. For the purposes of the appeal, it is only necessary to refer to some of his Honour's findings dealing with the other causes of action relied on by Blue Visions. His Honour found that Mr Gunasegaram was also liable for breach of his statutory duty of good faith under s 181(1) of the Corporations Act, given that he occupied a senior position with Blue Visions; he effectively ran the Perth office and was largely unsupervised by Mr Khreich; he played a substantial role in determining the staff levels of the company and in doing so participated in making decisions that affected a substantial part of the business and had the capacity to affect significantly Blue Visions' financial standing; and his conduct in misleading Mr Khreich in relation to the prospects of obtaining work from Woolworths could not be said to have been conduct undertaken in good faith in the interests of the corporation: at [221]. His Honour also found that Mr Gunasegaram owed Blue Visions a duty of care (in tort) at [222].
2. However, his Honour did not go on to make a finding of negligence on the part of Mr Gunasegaram.

The parties' submissions

1. Mr Gunasegaram's essential complaint is that he was denied natural justice because he was never given an opportunity to meet or answer the version of the representation case upon which he was found liable. According to the submission, the primary judge substituted a radically recast set of representations, as set out in [194] of his reasons, and found Mr Gunasegaram liable in deceit in respect of representations that were neither pleaded, nor opened upon, nor the subject of evidence or address by the parties. Reference was made to Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 576 for the proposition that when pleading a claim in deceit, fraud must be pleaded distinctly and with particularity and clearly proved.
2. Blue Visions responded that the premise of Mr Gunasegaram's argument was incorrect, and submitted that the primary judge had correctly focused on the sense of the representations, in accordance with the approach by the majority in the High Court in Krakowski v Eurolynx at 576-577. Blue Visions further submitted that his Honour's summary of the representations made by Mr Gunasegaram in relation to the Masters project reflected the way that Blue Visions had opened and run its case at trial and also Mr Gunasegaram's defence.

Decision

1. The starting point is to observe that the pleading by Blue Visions included a claim in deceit (in pars 75-77 2FASC), and claimed relief by way of damages for deceit (in par 6A 2FASC). It is not necessary to set out the terms of the pleading. The substance of the case, as his Honour found, was not that each statement made by Mr Gunasegaram caused Mr Khreich to do a particular thing, but rather that the specific representations conveyed those summarised by his Honour (at [194]), and those representations caused Mr Khreich to agree to employ staff and to retain staff who otherwise would not have been employed or retained. After observing that the case was not pleaded in precisely that way, his Honour found that was the way the case was run. That finding is consistent with Blue Visions' opening at trial relying on the deceit claim and its written closing submissions. There was no error in his Honour's conclusion that case fell within the scope of the pleading, since the relevant representations and acts of reliance were pleaded.
2. The complaint that the primary judge reformulated the deceit claim and thereby denied Mr Gunasegaram natural justice should be rejected. On a fair reading of the whole of his Honour's reasons dealing with the misrepresentation claim in relation to the Masters project, it is plain that his Honour set out (at [194]) a summary of what he took to be the gist or sense of the pleaded representations which he had earlier found (at [91]-[122]) had been made by Mr Gunasegaram. As indicated, none of those specific factual findings are challenged by Mr Gunasegaram.
3. The first category of representations was to the effect that Mr Gunasegaram had a close relationship with one or more key people at Woolworths. This reflected the representations pleaded at pars 55, 56, 60 and 64 of the second further amended statement of claim.
4. The second category of representations was to the effect that as a result of that close relationship, Blue Visions had good prospects of being retained by Woolworths (or its relevant subsidiary) to project manage the roll out of Masters stores throughout Australia. This reflected the representations pleaded at pars 53-55, 56(g)-(i) and 57-61 of the 2FASC.
5. The third category of representations was to the effect that Blue Visions had been retained by Woolworths to do the work. This reflected the representations pleaded at pars 61-67 of the 2FASC.

Negligence claim: ground 2

1. The issue raised by ground 2 does not arise in view of the conclusion on ground 1. While it is generally desirable to deal with non-dispositive issues: Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 at [12], it is appropriate not to do so in the present case.
2. First, the primary judge did not finally determine the alternative cause of action in tort (there being no finding of negligence). Second, this issue is of much lesser importance given the absence of any appeal ground challenging the finding of breach of s 181(1) of the Corporations Act being the alternative cause of action to the deceit claim and the lack of merit in the oral submission by Blue Visions, which I have rejected, that His Honour found a different breach of s 181(1) to that pleaded by Blue Visions.

(2) Damages

1. In support of its claim for damages Blue Visions relied on evidence given by Mr Khreich and a report from an accountant, Mr Wynand Mullins. Mr Khreich gave evidence which included a spreadsheet listing the staff kept on for the Masters project (and the other fictitious mining projects described as the Nicholson's Gold Mine and Roy Hill projects), who he referred to as the "unrequired group" and the staff not kept on specifically for those projects, whom he referred to as the "required group", before calculating the average billable and non-billable hours generated by both groups between January 2012 and September 2014.
2. Mr Mullins performed calculations based on those assumptions, including calculating the cost of employing the unrequired staff during the period for which Mr Khreich said they were not required, with allowances made for the cost of terminating employees who were required for some portion of their employment and would therefore have been hired regardless of the representations.

The primary judge's reasons

1. The primary judge rejected the contention by Mr Gunasegaram that Blue Visions only needed to retain at most eight additional staff to work on the Masters project, since that is all that was required in the first month. His Honour also rejected the suggestion that those staff only needed to be employed shortly before the work started on the project with the result that Blue Visions' damages claim should be limited to the cost of employing eight additional staff for a limited period of time: at [201].
2. His Honour identified the relevant question as being how many additional staff were employed and how many were retained and over what period of time as a consequence of the representations made by Mr Gunasegaram and what other adjustments should be made to the damages claim to take account of the points made by Mr Gunasegaram. His Honour continued at [201]: However, from at least April 2012, Mr Gunasegaram made statements to Mr Khreich to the effect that there was a real prospect that Blue Visions would get the Masters project based on his relationship with people at Woolworths. Those statements were false and they undoubtedly led Mr Khreich to accept statements from Mr Gunasegaram concerning staffing requirements for the project that he would not have accepted if he knew that Mr Gunasegaram had no connection with Woolworths and no reason to believe that Woolworths was looking for a consultant to project manage the roll-out of Masters stores. As I have said, the representations continued over an extended period of time and, as a result of those representations, Mr Khreich permitted the staffing levels to remain as high as they were in the expectation that the staff were necessary to prepare for the Woolworths project and to work on the project once it started.
3. After noting that the assessment of damages involved a degree of estimation and approximation because it depended on a hypothetical scenario, namely what Blue Visions would have done if Mr Gunasegaram had not made the representations in relation to the Masters project that he did, his Honour accepted that the approach taken by Blue Visions to calculate damages provided a reasonable starting point: at [202].
4. His Honour found that Mr Khreich was an honest and reasonable witness, and accepted Mr Khreich's assessment of which staff were required and which were not for Blue Visions to be able to do the work it had, including the expected work in relation to the Masters project: at [202]. However, he also found that some adjustment needed to be made to Mr Khreich's assessment to take account of the fact that the additional staff were engaged or retained, not just in anticipation of the Masters project, but in anticipation of obtaining other work, including the Nicholson's Gold Mine and Roy Hill projects: at [202].

Mr Gunasegaram's submissions

1. Mr Gunasegaram contends that his Honour erred in including in the award of damages (a) the salary and other benefits paid to Mr Gunasegaram himself either at all, or prior to February 2013, or without allowance for billable and non-billable work which was of direct benefit to Blue Visions (ground 3), and (b) the salary or other benefits paid to any person at any time prior to June 2013, or alternatively February 2013 (ground 5).
2. Mr Gunasegaram also contends that the 30 percent discount in the award of damages is inappropriate and that a reduction of at least 85 percent should have been made (ground 6). Finally, Mr Gunasegaram contends that the quantum of damages awarded was manifestly excessive (ground 7).
3. It is convenient first to deal with ground 5, concerning the appropriate date for commencing the damages calculation.

Commencement date of damages calculation: ground 5

1. As indicated, his Honour found that the appropriate period for calculating damages was 1 July 2012 to 31 March 2014. Mr Gunasegaram contended that the appropriate starting date was either June 2013, or alternatively February 2013. According to the submission, given that the primary judge had recast Blue Visions' representations case, the damages case should have been confined to the period after which those "new" representations were conveyed to Blue Visions and relied upon. Mr Gunasegaram contended that the second representation (that Blue Visions had good prospects of being retained by Woolworths) was made no earlier than February 2013, and that the third representation (that Blue Visions had been retained) was made no earlier than June 2013.
2. The essential difficulty with ground 5 is that it proceeds upon an incorrect premise. For the reasons given above in relation to ground 1, the primary judge did not reformulate the representations relied upon by Blue Visions.
3. The detailed factual findings of the primary judge (which have been extracted at [280] above), amply support his Honour's finding at [201] that from at least April 2012, Mr Gunasegaram made statements to Mr Khreich to the effect that there was a real prospect that Blue Visions would get the Masters project based on his relationship with people at Woolworths: at [201]. That finding is not challenged. The primary judge further found that Mr Gunasegaram included references to substantial income from the Masters project in draft financial plans for Blue Visions, which he provided to Mr Khreich in April 2012 and June 2012: at [93]. Those plans showed "Masters" as a pending project. That the income recorded in those financial plans was forecast, rather than certain, does not diminish the falsity of the representations made by Mr Gunasegaram.
4. Mr Gunasegaram submitted that the updated financial plan, which was sent to Mr Khreich on 13 June 2012 did not contain a quantification of the prospects of success of the Masters project as "strong" or otherwise. That may be accepted, but as the primary judge found, the document showed Masters as a "pending" project and forecast to earn over $40,000 per month in November 2012 and increasing to over $83,000 per month from February 2013: at [93].
5. The updated financial plan is not to be viewed in isolation. Mr Khreich gave evidence that Mr Gunasegaram told him in June 2012 that he had spoken with Mr Peter Horton of Woolworths who had said that Woolworths would be agreeable to a cash flow neutral agreement (for the Masters project). That meant that Blue Visions would be able to invoice Woolworths at the beginning of a month and be paid in advance, enabling Blue Visions to pay the salaries of the additional staff without having to fund that cost itself. In my view, there was no error by the primary judge in finding that by mid-2012, Mr Gunasegaram had made representations to the effect of the first two representations summarised at [194] of his Honour's reasons.

Mr Gunasegaram's wages as damages: ground 3

1. Mr Gunasegaram submitted that his Honour erred by including Mr Gunasegaram's wages in the assessment of loss. In support of this contention, Mr Gunasegaram submitted that as a matter of principle in an action between an employer and employee, the employer cannot recover as damages the wages paid to the employee during the period of employment.
2. According to the so-called general rule, whether damages are assessed for breach of contract or in tort, the assessment of damages involves the employer being liable to pay the employee his or her wages. With respect to claims for damages for work diverted by an employee to his or her own company or new employer, Mr Gunasegaram submitted that the award of damages is the net profit the employer would have made had the work been retained by it, and one of the elements which must be netted off is the cost of retaining the employee to perform the work. Reference was made to Colour Control Centre Pty Ltd v Ty [1995] NSWSC 96 at [38] (Santow J). It was submitted that the employer recovers the difference between a complying performance and a non-complying one, not the difference between employing or not employing the person at all.
3. Alternatively to the submission based on the so-called general rule, Mr Gunasegaram submitted that damages are awarded in this case to put Blue Visions in the position it would have been had Mr Gunasegaram been dismissed or made redundant on 1 July 2012. However, since the representation case necessarily assumed that Mr Gunasegaram was employed and continued to be employed throughout the period of the misleading conduct, it was inconsistent with that assumption to treat Blue Visions as if it had not employed him at those times or at all.
4. In my view, the analogy which Mr Gunasegaram seeks to draw with the employment cases is inapt because the assumption underlying those submissions, that he would have been employed and continued to be employed throughout the period of his impugned conduct, is flawed.
5. Blue Visions' damages case is based on the finding by the primary judge that, but for the misrepresentations made by Mr Gunasegaram, Blue Visions would have reduced its staffing levels to a level commensurate with the work then available, plus a margin for excess capacity to pick up new work. The finding that fewer staff would have been required by Blue Visions is not challenged. That finding included that Mr Gunasegaram, among others, would not have been employed and the work he did would have been done by other employees: at [218].

30 percent discount: ground 6

1. The primary judge found that while the majority of the staff who fell within the unrequired category were retained by Blue Visions because of the representations in relation to the Masters project, it was appropriate to discount Blue Visions damages claim by 30 percent to take account of the fact that additional staff were engaged or retained by Blue Visions for other projects which did not eventuate: at [218].
2. Mr Gunasegaram contended that the 30 percent reduction applied by the primary judge to the damages calculation was inadequate and should have been at least 85 percent. Blue Visions sought to uphold the 30 percent discount arguing that it was an evaluative judgment open to the primary judge and no error has been shown.
3. It is common ground that the 30 percent discount was applied across the board to all of the not required staff that fell within the damages calculations performed by Mr Mullins, irrespective of whether those staff had any involvement in other projects that also did not eventuate, such as the Nicholson's Gold Mine project and the Roy Hill project. To that extent, the allowance by his Honour for the not required staff doing other work was somewhat generous to Mr Gunasegaram.
4. Nevertheless, Mr Gunasegaram pointed to five matters which he submitted justified a larger discount. First, that the whole "not required" group of employees had not been retained for the Masters project (or Masters plus the mining projects) for the whole loss period. Second, that Blue Visions' policy was to keep some additional staff employed to provide capacity to start new projects quickly. Third, that Blue Visions acknowledged that it required staff for many other non-billable tasks besides covering for annual leave, such as tender writing. Fourth, that all of the "not required" staff did some work for projects for which Blue Visions charged and (presumably) received payments. Fifth, that the 12.5 percent deduction for leave addressed only annual leave and there was evidence that Blue Visions frequently asked employees to take additional unpaid leave when things were quiet and that the employees often agreed.
5. Blue Visions responded that the first four matters relied upon by Mr Gunasegaram are directed to the counter-factual analysis undertaken by his Honour but did not directly challenge that analysis or his Honour's reasons for accepting that analysis and were made without reference to the evidence or his Honour's findings.

Manifest excess: ground 7

1. If ground 6 fails, Mr Gunasegaram contends in ground 7 that the same factors identified as justifying an increase in the 30 percent discount, justified setting aside the award of damages entirely as being manifestly excessive.
2. Blue Visions responded that the damages awarded by the primary judge cannot properly be characterised as "excessive", much less so "manifestly excessive". Blue Visions also contended that Mr Gunasegaram's submissions in support of this ground did not identify error by the primary judge.
3. Since no oral submissions were advanced by Mr Gunasegaram in support of ground 7, it may be taken not to have been pressed. If I am wrong in this regard, then the manifestly excessive ground fails for want of identification of any error by the primary judge beyond the submissions in support of ground 6, which, for the reasons given above, have not been made out.

Conclusions and Orders

1. Blue Visions' appeal has failed. There is no reason why costs should not follow the event: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.
2. Mr Gunasegaram's appeal has also failed. Again, there is no reason why costs should not follow the event.
3. Blue Visions also sought consequential relief in relation to certain interlocutory orders made by Leeming JA on 24 July 2017 pending the determination of the appeal: Gunasegaram v Blue Visions Management Pty Ltd [2017] NSWCA 187. Relevantly, Blue Visions submitted that the stay of the enforcement of the judgment in par 7 and the orders in pars 8, 9 and 13 of the orders made on 10 May 2017 should be discharged, and that the money ($400,000) paid into court by Mr Gunasegaram by way of security for the judgment debt in favour of Blue Visions be paid out to Blue Visions. Mr Gunasegaram did not make any submissions to the contrary, if the appeal was unsuccessful. Those orders should be made.
4. Accordingly, I propose the following orders:

CA 2017/168664 (Mr Gunasegaram's appeal) 1. Appeal dismissed. 2. Appellant to pay the respondent's costs. 3. Discharge orders (1) and (2) made by Leeming JA on 24 July 2017, staying the enforcement of the judgment in par 7 and the orders in pars 8, 9 and 13 of the Orders made on 10 May 2017 in proceedings 2014/192899. 4. Order that the amount of $400,000 paid into court by Mr Gunasegaram pursuant to order (3) made by Leeming JA on 24 July 2017 be paid out to Blue Visions Management Pty Ltd. 5. Grant liberty to apply, if necessary, to a single Judge of Appeal on 3 days' notice in respect of the implementation of order (4) above.

CA 2017/168769 (Blue Visions' appeal) 1. Appeal dismissed. 2. Appellant to pay the respondents' costs.

Endnotes

1. See Blue Visions Management Pty Ltd v Chidiac [2017] NSWSC 255 ("Blue Visions Management").
2. Blue Visions Management at [72].
3. Blue Visions Management at [53].
4. Blue Visions Management at [64].
5. Blue Visions Management at [65].
6. Blue Visions Management at [7].
7. Blue Visions Management at [7].
8. Blue Visions Management at [156].
9. Cf Manildra Laboratories v Campbell [2009] NSWSC 987 at [131]-[133] (McDougall J); SBA Music Pty Ltd v Hall (No 3) [2015] FCA 1079 at [38] (Wigney J); Krupace Holdings Pty Limited v China Hotel Investments Pty Limited [2018] NSWSC 862 at [97] (Rein J).
10. Chew v The Queen (1992) 173 CLR 626 at 632-633 (Mason CJ, Brennan, Gaudron and McHugh JJ); [1992] HCA 18.
11. (1986) 43 SASR 410 at 420.
12. (1995) 183 CLR 501 at 514 (Brennan, Deane, Toohey and Gaudron JJ); [1995] HCA 1.
13. (2005) 226 CLR 507; [2005] HCA 23 at [55]-[64].
14. Angas Law Services at [65].
15. Cf Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd [2009] FCAFC 2 at [36] (Tamberlin, Finn and Sundberg JJ).
16. [1916] 1 AC 554 (Privy Council).
17. Cook v Deeks at 559.
18. [1967] 2 AC 46.
19. Boardman at 106-107.
20. (1726) 25 ER 223; (1726) Sel Cas t King 61.
21. J D Heydon, M J Leeming and P G Turner, Meagher, Gummow and Lehane's Equity: Doctrines and Remedies (5th ed, Lexis Nexis Butterworths, 2015) at [5-055].
22. Chan v Zacharia (1984) 154 CLR 178 at 181 (Gibbs CJ), 200-202 (Deane J); [1984] HCA 36.
23. Chan at 186.
24. (1854) 1 Macq 461 at 471.
25. Chan at 198-199.
26. Chan at 200.
27. First and Third respondents summary of argument, 7 November 2017, par 44.
28. See Warman International Ltd v Dwyer (1995) 182 CLR 544 at 556 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ); [1995] HCA 18.
29. Blue Visions Management at [162]-[166].
30. First and third respondents' summary of argument, par 75.
31. Cf Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296; [2012] FCAFC 6 at [21] (Finn, Stone and Perram JJ).

Amendments 15 August 2018 - Typographical errors amended in the following pars: [1]; [26]; [29]; [43]; [180]; [255]; Catchwords. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 August 2018