Hampshire Assets and Services v Blackman

Chronology of relevant events

1. In what follows, unless indicated otherwise I am talking of events at and before the time the relevant conduct occurred, in May and June 2006.

Background

1. Mr Peter Hall was beneficially the sole shareholder of Hampshire, and its sole director. Mr Hall had founded the investment management company known as Hunter Hall International Limited (HHL), a company listed on the Australian Securities Exchange (ASX). Prior to the events the subject of this litigation, Hampshire held 51% of the issued shares in HHL. Mr Hall was a director of HHL, and from September 1999, its executive chairman.
2. HHL employed a number of Portfolio Managers (PMs) who were responsible for attracting and investing funds to be managed by HHL. HHL earned income by way of fees on funds under management. Thus, the success of the PMs in attracting and retaining funds to be managed, and managing them so as to produce returns that were competitive in the marketplace and beneficial for the investors, was a key part of HHL's success.

Origins of the option scheme

1. In about August 2005, Mr Hall had a conversation with Mr David Buckland, who was then the Chief Executive Officer of Hunter Hall, and one of its senior PMs. Mr Buckland sought to be allocated options in HHL exercisable at $6, which was then the approximate market price of shares in HHL. Mr Buckland said that the options should be granted by Hampshire out of its shareholding, so that their exercise would not dilute the capital of other investors in HHL. Mr Hall agreed in principle with that proposal, "provided that there are no adverse tax consequences".
2. In discussions in the following months, Mr Hall decided that the option scheme (as I shall call it) should be extended to other senior PMs of HHL. His intention was to give them a financial stake in the development of HHL, and for HHL to retain the benefit of their services. Mr Hall perceived that this would be conducive to growth in HHL's business and earnings, and thus to increasing the value of shares in HHL.

Outside advisers become involved

1. Mr Hall discussed the option scheme with Ms Ouafaa Karim, who was the secretary of HHL. He told Ms Karim that the scheme must not have adverse tax consequences for Hampshire, HHL, or the PMs. He said that Hampshire was happy to pay tax on its cash receipts, but no more. Ms Karim said that she would retain Deloitte and the law firm Gadens.
2. Thereafter, Ms Karim and Mr Buckland prepared a draft plan to give long term incentives to PMs. The proposal was announced to the ASX on 24 August 2005, and was raised in Mr Hall's address to HHL's annual general meeting on 30 November 2005. The proposal at that stage remained one involving an agreement between Hampshire and the PMs.
3. On Mr Hall's instruction, Ms Karim retained Deloitte in February 2006. There is in evidence an engagement letter, with annexed terms and conditions of engagement, sent by Deloitte to Mr Buckland (although referring to him as the Chief Executive Officer of Hunter Hall Investment Management Limited, not HHL). That letter described the scope of work as being to "provide assistance with the design and implementation of a management equity scheme in line with instructions that you provide us from time to time". It will be necessary to return to some of the detail of the terms and conditions.
4. Although there is no formal retainer letter in evidence, it would appear that Gadens were retained at about the same time.

Revised option scheme

1. On 28 February 2006, Mr Rick Taylor of Deloitte, who was the partner with responsibility for work to be done by Deloitte pursuant to the engagement recorded in the letter of 10 February 2006, prepared an updated "HHL Share Plan and Profit Scheme". That document varied in a significant way from Mr Hall's initial concept. The draft contemplated, as its predecessor had done, that HHL would issue options to the PMs, and would buy back from Hampshire sufficient shares to "back" (my word) the options. The reasons for this change are unclear.
2. The previous draft of that document had stated, in para 27: It is understood that Hampshire will pay the ATO 30% tax on the profits arising on its sale of HHL shares (most shares bought at 1 cent each in 1993). However, this is a matter to be considered by Hampshire.
3. Deloitte redrafted that paragraph (which became para 26). The words "the ATO 30%" were deleted and replaced by the word "some". The last sentence was deleted and replaced with the following: The amount of tax will depend on the proportion of buyback proceeds that may come in the form of franked dividends. This proportion will be determined at the time the buy back occurs and will be driven by the amount by franking credits available at that time.
4. The redrafted plan was considered by HHL's board on 2 March 2006. The board received a presentation from Mr Taylor, who informed them of the fundamentals of the plan (including that HHL would provide finance to PMs to enable them to take up shares, and would do so by way of limited recourse loan). The board agreed that the "[s]hare buy-back… should be done at $6.00".
5. On 17 March 2006, Mr Geoff Applegate of Gadens sent a memo to Ms Karim setting out what he thought would be needed by way of documentation, what the process would be to implement the plan, and what issues remained to be resolved. He said, among other things, that "[w]e will obviously need to get Deloitte's sign off on this".
6. On 21 March 2006, Ms Karim forwarded that memo to Mr Taylor, noted that "Peter [Hall] is in agreement with the proposals subject to there being no tax consequences" and asked Mr Taylor to "consider" a particular point raised by Mr Applegate "and advise whether you see any issues from a tax perspective".

Mr Green becomes involved

1. On 10 April 2006, Mr Hall involved his own solicitor, Mr Robert Green. He did so by way of an email which pasted in a board memo that Mr Hall had prepared at some earlier time. Mr Green replied the same day, stating that he was "[h]appy to review the agreements for you". Later that day, Mr Hall replied, confirming that he would like Mr Green "to look at [the documents] and make sure my interests have been protected".
2. Thereafter the documents were further revised, with input from time to time given by Mr Green. Mr Green reported from time to time to Mr Hall (who was then in London).
3. As I have said, Mr Hall's original proposal was that Hampshire should grant options direct to the PMs, exercisable upon meeting certain performance hurdles. However by 25 May 2006, the proposed option scheme provided for Hampshire to grant call options to HHL, which in turn would grant options to the relevant PMs. Mr Hall perceived, rightly, that this could leave him exposed if the stock price fell below $6, because HHL could buy the shares on market, and book a profit if the PMs exercised the options and paid $6 per share (assuming of course that the share price had risen to above the strike price at the time of exercise).
4. That led Mr Green to consider, as an alternative, a combination of put and call options. Another proposal under discussion was that there should be a conditional sale agreement. Mr Green understood that it was necessary to consider the tax consequences of the alternative proposed structures. He said, in an email of 26 May 2006 to Mr Hall: However, another important issue to consider is the taxation implications of doing it one way or the other, which might either advantage or disadvantage you, and which could be significant if for example a conditional contract is held to crystallise a capital gain. Tax is not my area in general, and your tax is not my area in particular! I haven't noticed Adam Blackman being copied in on emails. Has been involved and should I or will you run it by him?
5. Mr Hall replied on 27 May 2006: Right - can you liaise with Adam please Rob - a very relevant point!

Mr Blackman becomes involved

1. It is convenient at this point to step away from the chronological narrative, for the purpose of noting that Mr Blackman was, and for some years had been, Mr Hall's and Hampshire's accountant. He had prepared their tax returns, and undertaken other accounting work for them. By May 2006, Mr Blackman was, as he said in an email of 29 May 2006 to Mr Taylor of Deloitte, "Peter Halls [sic] and Hampshires [sic] Australian tax accountant". Mr Blackman acknowledged in cross-examination that he was the person who was going to provide advice to Hampshire on the applicability on whatever "guidance" Deloitte might offer Hampshire [2] : Q. And you had no doubt on reading that, that you were the anointed [sic] Australian independent tax advisor for Hampshire who was going to carry out that task, correct? A. (No verbal reply) Q. You had no doubt at all about that? A. I couldn't say I had no doubt about it, it was asked, the letter, the paragraph says that they were going to get someone to review the Hampshire advice and I assumed it was going to be me, I didn't know who else it would be, I thought it was it was just Deloitte was the other party. I would agree with you to review the Deloitte assumptions they made on Hampshire, I reviewed that, yes. Q. To that is, to provide advice to Hampshire whether the guidance in this advice actually had application, correct? A. Correct. Q. And you proceeded over the next day or so to treat yourself as that person who was going to provide that independent advice to Hampshire, correct? A. No, not correct. Q. Well? A. It wasn't over the next couple of days, I did it that day, sorry. Q. Thank you? A. That's okay.
2. Mr Blackman understood that Mr Hall was keen to avoid paying additional tax if it were lawfully avoidable [3] (I should make it clear that I intend no criticism of either Mr Hall or Mr Blackman in what I have just said).
3. I return to the chronology of events. Mr Hall replied to Mr Green's email of 26 May 2006 (see at [23] above), and included Mr Blackman in the reply. Mr Hall asked Mr Green to "liaise with Adam please". Mr Blackman replied to Mr Hall's email later the same day. He said: I will await Roberts [sic] call as I dont have his no. He can fill me in on exactly what is planned. A call option gives a purchaser the right but not the obligation to require a vendor to sell an asset they own to the purchaser. I believe the CGT event arises when the call is exercised. A conditional contract would trigger a CGT event when the conditions are met. As companies do not receive any long term CGT discounts there would be a flat 30% tax hit on profit which by the sounds of it would be v/significant. Please fwd this to Robert and advise him my no is (02) xxxx xxxx.
4. Mr Green replied to that email on 28 May 2006. In an email that attached a current (as at 28 May) version of the draft option deed (then providing only for call options), Mr Green said: As part of an incentive program at Hunter Hall, Peter is in the process of putting in place a Portfolio Managers Share Plan. I can if you like forward to you a copy of the latest version of this Plan, though neither Peter nor Hampshire are parties to it. Under the Plan, certain Portfolio Managers at Hunter Hall will be eligible to be issued with a certain number of a new class of shares, to be called Class PM Shares. There will be a maximum of 2.4 million class PM Shares all up. Subject to certain criteria being met, these shares will convert at a future point to ordinary shares in Hunter Hall. The Class PM Shares are being issued at $6.00, which is less than the current market price. The Portfolio Managers will pay for these shares, though they will be funded by a loan from Hunter Hall to a large extent. As part of the deal, Peter has agreed to sell up to 2.4 million of his ordinary shares in Hunter Hall at $6.00 as and when (and if) in the class PM shares convert into ordinary shares. In this way there is no dilution of shares price [sic] and Hampshire is essentially funding the difference between the price of the class PM shares ($6.00) and the current market price, assuming it is more than this. It was originally intended that Hampshire and Hunter Hall would enter into a Call Option Deed, whereby Hunter Hall could acquire shares from Hampshire as the Class PM Shares converted. I attach a copy of the latest draft of this document. However, there is no obligation on Hunter Hall to exercise the call option in whole or in part. Presumably it would not do so if the share price fell below $6.00. Peter now wishes to have a Put Option so he can require Hunter Hall to purchase the requisite number of shares on conversion of the Class PM Shares. Alternatively it has been suggested that Hampshire and Hunter Hall enter into a condition sale agreement, being conditional upon conversion of class PM Shares. Personally, I favour Put and Call Options for the flexibility. Could you advise Peter on: 1. Whether there is any difference from a tax point of view between a conditional sale contract and Put and Call Options. 2. Would either of these crystallize or give rise to a tax liability or loss at this time? 3. Are there any other tax consequences of which he should be aware?

Mr Blackman's first "advice"

1. Mr Blackman replied on 29 May 2006: Thanks Robert I'll try and get response to u this week. Is that OK?
2. Mr Blackman accepted that by this email, he accepted the retainer conveyed by Mr Green's email of 28 May 2006.
3. Later on 29 May 2006, Mr Blackman sent a further email to Mr Hall, copied to Mr Green. Mr Leopold of Senior Counsel, who appeared with Ms Cairns of Counsel for Hampshire, called this email the "Quantum Advice". For the sake of convenience, I shall do likewise. The email read (in Mr Blackman's unique orthography and style): Hi Peter Spoke with Robert this morning in regard to tax implication for Hampshire of entering into put/call option arrangement and will have answer this week. I will also get Andrew Sneddon to give input. Just by the way u do realise that Hampshire has an incredibly minimal cost base re HHIL shares - I think 40c and that a sale at $6 will lead to a taxable capital gain of $5.60 per share with no CGT discount This means at 30% tax or $1.68 for each share sold goes to the ATO. On 2.4m shares that is approx $4m dollars. Just want u to be aware of this as it is not insignificant. Pls give me your thoughts.
4. The "Andrew Sneddon" referred to was a specialist tax accountant or tax adviser. As events evolved, Mr Sneddon was not consulted. It was Mr Blackman's case that in fact Deloitte was retained as the tax specialist to advise Hampshire (and the PMs) as well as HHL, and thus that it had become unnecessary to retain Mr Sneddon. Hampshire disputed vigorously that characterisation of Deloitte's role.
5. It was Hampshire's case that Mr Blackman's Quantum Advice made a number of representations. I shall return to, and spell out, those asserted representations when I come to deal with the relevant issue. However, I note at this point that one of the asserted representations [4] was that: c. Hampshire's CGT liability, on any sale of HHIL shares under the Options Deed: i. would be calculated by reference to the option price to be received by Hampshire of $6 per share, as nominated in the Options Deed; and ii. if 2.4 million shares were sold, would be approximately $4 million;
6. Thereafter, revised versions of the draft documents were sent to Mr Blackman. It is not necessary to go to their detail.

The role of Deloitte

1. On 29 May 2006, Mr Green emailed Mr Blackman, saying: I am advised by Ouafaa Karim of Hunter Hall that they have briefed Delloites [sic] who have provided tax advice to Hunter Hall, Hampshire and the Portfolio Managers, though not all of it in writing. The relevant partner is Rick Taylor tel xxxx xxxx. It may save you some time to liaise with him, and Ouafaa has authorised him to discuss it with you.
2. Mr Blackman replied, the same day: Thanks I will advise Andrew Sneddon and call Rick [Taylor]
3. Mr Blackman said that by stating that he "advise Andrew Sneddon", he was intending to convey that he would advise Mr Sneddon that his specialist services were no longer needed. That reflected Mr Blackman's asserted understanding of Deloitte's role: namely, that it was to advise Hampshire as well as HHL and the PMs.
4. Mr Blackman then (and still on 29 May 2006) emailed Mr Taylor. He said: Hi Rick As you are aware I am Peter Halls [sic] and Hampshires [sic] Australian tax accountant and understand you are providing advice to both Peter and HHIL in relation to proposed sale of shares by Hampshire to HHIL by way of either conditional contract or put/call option. I further note that put/call option would more likely lead to the taxable date as far as Hampshire is concerned as being the date of exercise of options not date option granted. Obviously we would prefer the taxable date to mirror the timing of sale receipts by Hampshire. I further note the following docs that may assist ATO private ruling - Authorations Number 4903 and CGT TD 16 Please copy me in on your final advice to Peter.
5. That email had been copied to both Mr Hall and Mr Green. Neither of them replied to Mr Blackman asserting that he had been incorrect in his understanding that Deloitte was "providing advice to both Peter and HHIL in relation to proposed sale of shares by Hampshire to HHIL…". Nor did they advise him in any other way that his understanding was incorrect.
6. Mr Green did not give evidence. His file was produced on subpoena. A document tendered from that file comprises a series of notes dated 30 May 2006. The first note is of a conversation with Mr Jack Lowenstein of HHL (one of the PMs who would be a beneficiary of the option scheme). Mr Lowenstein had said, in an email to Mr Buckland and others (including Mr Hall) of 30 May 2006: I have spoken to Robert, who was awaiting Adam's call… [sic] he is now going to call Adam to check the tax issue is closed off. hw [sic] would prefer that Gaden's draft the Sale and Purchase agreement… [sic]
7. So far as it can be read, Mr Green's note of his conversation with Mr Lowenstein reads: How am I going with drafting. He thinks Dett [the writing is difficult to read, but on any view this appears to be a reference to Deloitte] tax advice has been finalised.
8. The next note is of a telephone call with Mr Blackman. The note reads: "Rick Taylor from Delloites [sic] is now giving the advice". The third note is to the effect that Mr Green had called Mr Lowenstein and left a message.
9. It is unclear whether the note of the conversation between Messrs Green and Blackman reflects what Mr Blackman said to Mr Green, or what Mr Green said to Mr Blackman. It is however quite clear that one of them told the other, and the other appears to have accepted, that "Rick Taylor… is now giving the advice". In context, since both Mr Green and Mr Blackman had been retained specifically and only for Hampshire, that must mean that Mr Taylor was "now giving the advice" - the tax advice - that Hampshire needed in relation to the draft option scheme documents.
10. That conclusion is supported by an exchange of emails between Ms Karim and Mr Hall. In the first of those, Ms Karim said, among other things: Rick advised this morning that he has spoken with Adam and will be preparing an email in relation to the drafting of the put option. Gadens are on standby to start drafting on receipt of email from Rick.
11. Mr Hall's reply reads: Thanks Ouafaa. My understanding is that we are going with a conditional contract rather than a put & call.
12. Ms Karim replied: I think that's right Peter - I'm just waiting on Rick to confirm, his email should come through tonight.
13. In fact, Mr Taylor's advice "came through" on 1 June 2016. He sent it to Ms Karim. She sent it out to, among others, Mr Hall, Mr Blackman and Mr Green. Her email reads: Attached please find letter from Rick Taylor re the put/call option-arrangement. Rick's conclusion is that the arrangement is best done by way of put and call option agreement. He noted that in his experience a Put and Call Option agreement always works, whilst a share purchase agreement (even with conditions) can result in a dispute with the ATO in relation to the CGT trigger date. Accordingly I have asked Grant to amend the previous Option agreement to incorporate the put option arrangement - I shall circulate the re-draft as soon as its completed.
14. The reference to Mr Taylor's view that the better way to proceed was by way of put and call options was said, I think correctly, to reflect a concern that was specific to Hampshire. HHL's only interest was to have access to the number of shares necessary to satisfy the option scheme arrangements with the PMs. It was no concern of HHL's whether this was achieved by way of conditional sale agreement or put and call options. It was however of significant concern to Hampshire. There was a risk that a conditional sale agreement might trigger an immediate CGT liability, whereas the better view, according to Deloitte, was that there would be no relevant capital gain until the options were exercised. One of Mr Hall's concerns, understandably enough, was to match the inflow of funds with the incurring of any CGT liability.

Deloitte's advice

1. The Deloitte letter of 1 June 2006 is lengthy. It is not necessary to set all of it out. It commenced by referring to Deloitte's role and the basis on which advice was provided: We refer to our discussion on 30 May 2006. You have requested that we recommend changes to the portfolio managers share plan (PMSP) to ensure that Hampshire has certainty that HHL will buy back HHL shares currently held by Hampshire. This letter provides a recommendation in this regard. We have set out the tax implications of the recommended changes for HHL. Also provided to you, is a guide of the likely tax consequences for Hampshire. We understand Hampshire will seek its own advice to confirm whether our guidance actually has application.
2. As I have noted already, the only engagement letter in evidence is one addressed not to HHL but to another company in the Hunter Hall Group.
3. Deloitte then set out its recommendation as to the steps by which the option scheme should be effected. That recommendation was in effect for there to be a series of put and call options, each arising (or coming into existence, or taking effect - the precise legal analysis is a little unclear) on the occurrence of specified "trigger events".
4. The next topic covered in the letter was "[t]ax implications for HHL". It is not necessary to go to the detail, except to note that Deloitte expressed a view that the dealing between HHL and Hampshire should be conducted at arms' length, for the purposes of s 116-30 of the Income Tax Assessment Act 1997 (Cth) (the 1997 Tax Act). Deloitte elaborated on its reasons why the transactions should be considered to involve arms' length dealing: In elaboration, the transactions should be considered as being an arm's length dealing because the transactions should be carried out with an equality of bargaining power. In this regard: Hampshire is the private vehicle of Peter Hall, while HHL is owned by a broad base of some 1800 shareholders including Hampshire; HHL acts in its own commercial interests, independent of Hampshire; HHL's independent Directors have reviewed the arrangement and have exercised their own minds in determining whether each transaction will be appropriately priced: Both HHL and Hampshire have sought independent advice as to the impact of the arrangement. Both parties are seeking to gain from a commercial perspective from entering into the arrangement.
5. In those circumstances, Deloitte said, "the capital gain for HHL arising from granting a put option to Hampshire should be no more than $1".
6. Deloitte then set out the "tax implications for Hampshire". That contemplated both the taxation impact of the proposed structure (put and call options) and contrasted that with the possible tax disadvantages of the alternative structure (conditional contract). I set out that portion of the advice: Tax implications for Hampshire We have reviewed the taxation impact of Hampshire granting call options to HHL over some of its HHL shares with a $6.00 strike price per share. This advice does not consider the taxation impact of how the buy back of shares arising from the exercise of any option will be structured. However, we reiterate our earlier position that the sale proceeds may partly be deemed to be dividends. Under the proposal, the granting of each of the call options by Hampshire will only come into effect when each of the conditions precedent related to the call options have been satisfied. The granting of a call option by Hampshire should not give rise to adverse tax consequences for Hampshire. In this regard, the grant of an option could give rise to a taxable event in the year the option is granted; however, the proceeds should be limited to $1. The discussion above concerning arm's length dealings applies equally to the call option, and should mean that the market value substitution rules should not apply to uplift the proceeds for capital gains tax purposes. In the tax year that HHL exercise its call option, or Hampshire exercises its put option, Hampshire should recognise a capital gains tax event in that tax year. As previously indicated, the amount of the taxable gain will depend on: The cost base of the shares; How much of the buy back proceeds are deemed to be dividends. It is noted that the discussion above concerning the tax implications of the grant of the call option becomes irrelevant if the call option is exercised. This is because the grant is then disregarded for tax purposes, as the grant and exercise of the option will be amalgamated into one transaction, being the buy back of the HHL shares. Again the market value substitutions rules should not apply to the buy back transaction for the reasons discussed above. Adverse Tax consequences arising with the alternative proposal. If an alternative arrangement was to occur under which Hampshire was to enter into a contract now to sell its shares to HHL in the future (i.e. when a trigger event arises), a capital gains tax event may arise for Hampshire in the current year. This is because the taxing event arises in the year the contract is made, rather than in the year the contract is completed. We understand that such a result would be unacceptable to Hampshire for a number of reasons, including the fact that there is today uncertainty regarding the number of shares that would be bought back from Hampshire, and as to how much of the proceeds would be received as dividends. Under the put/call proposal, the initial agreement is one that determines at what time Hampshire and HHL may form an option contract, which when exercised will require Hampshire to dispose of the HHL shares it holds, to HHL. This initial agreement should not be a contract for the disposal of shares and as such should not trigger a capital gains tax event in relation to the disposal of those shares. The time at which HHL and Hampshire may form a contract which results in a capital gains tax event for the disposal of those shares, should thus be when the options are exercised.

Mr Blackman's second "advice"

1. When Mr Blackman received the Deloitte advice, he replied to Ms Karim and Mr Hall, saying he would read it "shortly" and provide comments. He provided those comments later on 1 June 2006: I have reviewed the Deloitte advice and agree that the put/call agreement is definately [sic] the way to go as CGT event will only arise when options are exercised (as opposed to granted). Also another huge benefit for Hampshire as I see it is that if there are sufficient franking credits in HHIL at time options are exercised part of buy back will be treated as fully franked dividends. Peter, that means that that part of buy back attributed to franked dividends will reduce Hampshire tax to NIL !! I assume board would have to agree to this in light of current franking credit policy. Hope this helps.

Mr Green's advice

1. Mr Green, too, considered the Deloitte advice. On 1 June 2006, he wrote to Messrs Hall and Blackman: As I understand the Deloitte's advice, it is predicated on there being separate Put & Call Options for each tranche, and that they would only come into being when the conditions precedents are met. This would necessitate some form of Agreement to Agree to which the form of each Put and Call Option is attached and there is agreement as to when each would come into effect. Deloittes [sic] need to be asked if the existence of such an Agreement would trigger a capital gains tax event. I have had a discussion with Grant Hummel [of Gadens] today and he is arising these and other issues arising out of the Deloitte's advice with Ouafaa.
2. Thereafter, Gadens prepared revised draft documents. Mr Green considered those and on 7 June 2006 gave his comments to a number of recipients, including Messrs Hall and Buckland. It is not necessary to set out those comments, except to note that: 1. there was nothing in them to indicate that any further action was required from Mr Blackman; and 2. conversely, the concluding words were "I trust that Hunter Hall will run the final documents past Delloites [sic] for confirmation that they are in accordance with their advice".
3. Thereafter, the documents were redrafted yet again to take account of "the latest comments from Deloittes [sic] and Robert Green". It does not appear that Mr Blackman had any further involvement in the transaction.

The real issues in dispute

1. Now that I have set out that unfortunately, but necessarily, lengthy recital of the factual background leading up to the execution of the option deed, the real issues in dispute will make some sense. I set out the parties' agreed statement: Misleading conduct under section 52, TPA 1. Were the representations in paragraph 19 of the Amended Commercial List Statement (ACLS) made by the First Defendant (Mr Blackman) in his email communications to the Plaintiff (Hampshire) on 29 May 2006 (CB 1:1300) and 1 June 2006 (CB 1:1315)? 2. Were the representations in paragraph 19(a) and (c) to (h) of the ACLS misleading or deceptive or likely to mislead or deceive as particularised under the 'Particulars of the Misleading Conduct' in paragraph 45 of the ACLS (having regard to the allegation in paragraph 44 of the ACLS as to section 51A of the Trade Practices Act 1974 (Cth) in the form in which that Act stood as at 31 December 2010 (TPA))? 3. Was Mr Blackman's conduct as a whole as pleaded in paragraph 45 of the ACLS misleading or deceptive or likely to mislead or deceive? 4. If issue 2 and/or 3 is resolved in favour of Hampshire, did the relevant conduct of the Defendants involve the use of "telegraphic services" within the meaning of section 6(3) of the TPA so that Part V of the TPA applies to the Defendants as individuals? 5. If issues 2 and/or 3 as well as issue 4 are resolved in the affirmative, then what, if any, loss did Hampshire suffer "by" that conduct? In particular: (a) which (if any) of Hampshire's counterfactuals apply; (b) if one of Hampshire's counterfactuals applies, what is the quantum of Hampshire's loss suffered "by" the Defendants' conduct on that counterfactual? 6. Is Deloitte a "concurrent wrongdoer" under section 87CB(3) of the TPA and if so, to what extent should the Defendants' liability be limited having regard to their responsibility for any loss caused to Hampshire and to Deloitte's responsibility (if any) for that loss? 7. Is the Defendants' liability to Hampshire under the TPA time barred under section 82(2) of the TPA? Negligence within the meaning of the former section 251M, ITTA 8. Was Mr Blackman negligent (within the meaning of the former section 251M of the Income Tax Assessment Act 1936 (Cth) (ITAA)) in engaging in the conduct referred to in issues 2 and/or3? 9. If Mr Blackman was so negligent, are the Defendants liable under the former section 251M of the ITAA to repay to Hampshire the Shortfall Interest Charge of $159,979.43 paid by Hampshire pursuant to the Further Amended Assessments? 10. Is any liability of the Defendants' to Hampshire under the former section 251M of the ITAA unable to be limited under the Professional Standards Act 1994 (NSW) (PSA) due to section 109 of the Constitution? If this issue is resolved in favour of the Defendants, it is agreed that the effect of the PSA is that Hampshire may recover from the Defendants no more than a total of $500,000 in damages (as defined in s 4(1) of the PSA) in respect of Hampshire's claim under the former section 251M of the ITAA. 11. Is Hampshire's claim under the former section 251M of the ITAA time barred under section 14(1)(d) of the Limitation Act? 12. Does Part 4 of the Civil Liability Act 2002 (NSW) apply to the claim under section 251M of the ITAA and, if so, is Deloitte a "concurrent wrongdoer" under Part 4 and if so, to what extent should the defendants' liability be limited having regard to their responsibility for any loss caused to Hampshire and to Deloitte's responsibility (if any) for that loss?

The witnesses

1. The witnesses of fact in the case were Messrs Hall and Blackman. It is obvious that a number of matters of fact could have been elucidated had Mr Green, or Ms Karim, or indeed even Mr Taylor, been called. They were not, and submissions were made as to inferences that I should draw in their absence. I will return to those submissions where necessary.
2. Mr Hall was subjected to a lengthy, detailed and searching cross-examination, stretching over some three days and occupying the best part of 160 pages of transcript.
3. Mr Mitchell of Counsel, who appeared with Mr Mostafa of Counsel for the partnership, submitted that Mr Hall should not be accepted as a witness of truth. He referred to an instance where Mr Hall had admitted to having given false evidence on an important matter (and had thereafter tried to withdraw from his admission), and to what Mr Mitchell said was Mr Hall's propensity to give lengthy and non-responsive answers to questions. Mr Leopold responded vigorously to those criticisms, and added some criticisms of his own as to important matters that (he submitted) had not been put to Mr Hall.
4. I am concerned at the evidence that Mr Hall gave that he conceded to be false, and to the further evidence that he gave on that topic. It was evidence on a point of key importance: namely, whether Deloitte had been retained only for HHL (as Hampshire submitted) or to give advice to Hampshire (and, if it matters, the PMs) as well (as the partnership submitted).
5. Mr Hall initially denied in cross-examination evidence that the Deloitte advice had been "obtained by Hunter Hall on behalf of itself and Hampshire". He said it was, rather, "an advice being sought for Hunter Hall with some guidance attached for the portfolio managers and other [sic] and Hampshire". He said that it would be inaccurate to "describe it as an advice that had been sought by Hunter Hall on its own behalf and on behalf of Hampshire" [5] .
6. Mr Hall was then taken to a document described as an "Amended Statement of Facts and Contentions" (ASFC) that Hampshire had prepared and submitted to the Administrative Appeals Tribunal (AAT). That document was filed to support Hampshire's appeal from the ATO's assessment of tax based on the ATO's contention that the market value of the shares the subject of the option agreements was significantly greater than the strike price, $6, when the options were exercised.
7. Para 27 of the ASFC stated that "[o]n or about 1 June 2006, Hunter Hall (on behalf of itself and [Hampshire] sought advice from [Deloitte] in respect of the possible income tax implications to both Hunter Hall and Hampshire arising from the proposed arrangement". That advice was identified in particulars as the Deloitte advice of 1 June 2006.
8. Mr Hall agreed that paragraph 27 of the ASFC was "an accurate description", to his understanding, of the basis on which Deloitte had been retained, and that his previous evidence had been false (he said "I was unclear at the time, but in light of this I accept" that proposition) [6] .
9. The next day, Mr Hall sought to resile from his concession. He added that he needed to consult his lawyers "to see whether we need to correct that statement to the AAT" [7] . He then denied that the statement made in para 27 of the ASFC was correct [8] .
10. In my view, the evidence on that topic - as I have said, a topic of key importance - reflects unfavourably on Mr Hall's credibility. That is so whether it be that the evidence in cross-examination was correct (that Deloitte was not retained by HHL to advise both itself and Hampshire) or whether the contrary statement in para 27 of the ASFC is correct. In reaching that view, I take into account in particular the unqualified concession made by Mr Hall when the matter was first raised, and his attempt to resile from it the next day. I take into account also my impression of Mr Hall, that he is an intelligent and astute businessman. I think his attempt to resile from the concession was prompted by his consideration of the matter overnight, and his realisation that it could be damaging to Hampshire's case (in particular, on the concurrent wrongdoer issue) were I to conclude that the statement made in para 27 of the ASFC should be accepted as correct.
11. Before I leave this point, I should say that I do prefer, and accept as correct, the statement made in para 27 of the ASFC. It was prepared at a time when Hampshire had the benefit of extremely capable legal advice. Hampshire's lawyers must have taken clear and detailed instructions from Mr Hall before they submitted the ASFC to the AAT. The ASFC was signed by Hampshire's lawyer Mr Michael Daniel, who (or whose firm) also acted for Hampshire in the proceedings before me. I add that although Mr Hall, having thought about the matter overnight, flagged an intention of speaking to his lawyers to see whether the ASFC should be reviewed, nothing more was said about that.
12. In reaching this conclusion, I take into account also that Ms Karim was not called, and neither was Mr Taylor. One would have expected Ms Karim at least to be "in the camp" of Hampshire. Mr Green, too, would have been able to give relevant evidence on this point. He was not called, and he should definitely be regarded as being "in the camp" of Hampshire. It is at least questionable, having regard to a subsequent falling out between Hampshire and Deloitte, whether Mr Taylor should be so characterised. Regardless, the unexplained failure to call Ms Karim and Mr Green on a matter of key importance supports, in my view, acceptance of the inferences that are otherewise available from the factual material, including specifically the ASFC.
13. There are contrary inferences arising from the content of the Deloitte letter and the statements in the first part that I quoted at [49] above. I shall return to those matters when dealing with the proportionate liability defence (and it may be noted that they are relevant also to the question of reliance).
14. It is unnecessary to go in detail to the other criticisms that Mr Mitchell made of Mr Hall's evidence. It is sufficient to say that in my view, they have substance. The reason why I do not propose to expand upon the criticisms is simply that I think this is yet another case where the observations of McClelland CJ in Eq in Watson v Foxman [9] are apposite.
15. The relevant part of his Honour's reasons at 318-319 has been quoted so many times that there is no need to do the same in these reasons (which will be long enough without copious quotation from authority). The point his Honour made is clear enough: whether consciously or otherwise, the quality of recollection decreases with the passage of time. In this case, the relevant events took place in 2006, Mr Hall's affidavits were sworn in 2017 and 2018, and his oral evidence was given in 2018.
16. It is in my view clear that, adapting the words of McClelland CJ in Eq [10] , the processes of Mr Hall's memory have been overlaid, whether subconsciously or otherwise, "by perceptions [of] self-interest as well as conscious consideration of what should have been said or could have been said".
17. The result, in my view, is that little weight should be placed on Mr Hall's testimonial evidence. In this case as in so many, I think, the truth must be extracted by delving deep into the overburden that conceals the occasional nugget of relevant and effectively incontrovertible fact.
18. It is convenient to note at this point that there was a debate as to the evidence of reliance that Mr Hall gave [11] . The debate occupied five pages of transcript [12] and focussed on s 5D(3)(b) of the Civil Liability Act 2002 (NSW). There was a most learned and arcane discussion of the applicability of s 5D(3)(b) to causes of action under Commonwealth legislation, with references to many decided cases, none of which bore directly on the point. I admitted the evidence, and said that I would give reasons for my ruling when I came to decide the substantive issues. In the result, given what I have just said as to the acceptability of Mr Hall's testimonial evidence, I see no point in adding to the confusion that is apparent in the cases to which I have referred. To put it another way, I see no point in giving reasons for the admission of evidence that I do not find to be persuasive.
19. There was no attack made on Mr Blackman's credibility. On the contrary, Mr Leopold relied, with considerable enthusiasm, on what he said were a number of significant concessions made by Mr Blackman in the course of cross-examination. I take into account, as a factor favourable to acceptance of Mr Blackman as an honest witness who sought to tell the truth to the best of his recollection, the fact that he was prepared to and did make a number of appropriate concessions.
20. There were experts called, but no attack was made on the credibility of any of them. I shall return to their evidence, to the extent that it is relevant, later in these reasons.
21. Thus, in general, my approach to finding primary facts is to consider the documents and the probabilities, viewed objectively, as I see them having existed at the relevant time.

First issue: were the pleaded representations made?

1. The representations on which, in final submissions, Hampshire relied were those pleaded in paras 19(c), (e) (in a truncated form) and (f) - (h) of the ACLS. I set out (acknowledging a repetition in respect of subpara (c)) those parts of the pleading: Representations 19. Further, in providing the Defendants' Advice, in the circumstances referred to in paragraphs 18A and 18B above, the Defendants represented to Hampshire that: … c. Hampshire's CGT liability, on any sale of HHIL shares under the Options Deed: i. would be calculated by reference to the option price to be received by Hampshire of $6 per share, as nominated in the Options Deed; and ii. if 2.4 million shares were sold, would be approximately $4 million; … e. in regards to the representations referred to in [sub-paragraph c] above, and to the extent that the Defendants' Advice concerned matters of opinion, such opinions were… based upon all relevant information (including relevant taxation laws) and the Defendants had a reasonable basis for each of those opinions; f. the Defendants had sufficient expertise to provide the Defendants' Advice; g. the Defendants had exercised the degree of care and skill to be expected of a reasonably prudent, careful and competent accountant, tax agent and taxation adviser in providing the Defendants' Advice; and h. the Defendants had used reasonable care and skill initialled providing the Defendants' Advice, (the Representations)
2. The wording of subpara (e) reflects, among other things, Mr Leopold's acknowledgement that to the extent that the representations in subpara (c) were made, and represented opinions, Mr Blackman genuinely held those opinions. That acknowledgment was appropriate.
3. In considering the pleaded representations, it needs to be understood that the defined term "the Defendants' Advice" refers to both of Mr Blackman's relevant emails: the Quantum Advice of 29 May 2006 (see at [31] above) and the email of 1 June 2006 (see at [55] above).

The parties' submissions

1. I start with representation 19(c).
2. Mr Leopold's submissions emphasised that Mr Green had expressly instructed Mr Blackman, in the email set out at [28] above, that the strike price of $6 was less than the current market price of shares in HHL, and had noted that "Hampshire is essentially funding the difference between the price of the [option] shares… and the current market price, assuming that it is more than [$6]". The advice sought of Mr Blackman included (question 3) whether "there are any other tax consequences of which [Mr Hall] should be aware?"
3. In those circumstances, Mr Leopold submitted, the topic of CGT was clearly raised. The unqualified and emphatic nature of the assertions as to likely CGT liability that Mr Blackman made in the Quantum Advice, coupled with the absence of any qualification or reservation, necessarily conveyed, Mr Leopold submitted, a representation in the terms of representation 19(c). Mr Leopold added that Mr Blackman had accepted in cross-examination that if there were any risk associated with the statement made as to capital gains tax liability, Mr Hall should have been told [13] .
4. Mr Leopold referred to the judgment of Black CJ in Demagogue Pty Ltd v Ramensky [14] at 32. His Honour there said that "the significance of silence always falls to be considered in the context in which it occurrs… [which]… may or may not include facts giving rise to a reasonable expectation… that if particular matters exist they will be disclosed". Mr Leopold referred also to the observations of French CJ and Kiefel J in Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [15] at [23], to similar effect.
5. It appeared to be common ground that the statement in Mr Blackman's email as to CGT liability ought be treated as a statement of opinion. In any event, in my opinion, that is the proper way to characterise. It must therefore be a statement of opinion as to a matter to occur in the future. Putting the matter at its highest from Hampshire's perspective, it ought be regarded as a statement of opinion as to the CGT liability that Hampshire would incur if the options were issued and exercised at a strike price of $6, even if the market price of HHL shares were then higher.
6. Leaving that apparent common ground and turning to the submissions for Mr Blackman, Mr Mitchell emphasised the wider context, which included: 1. the statement that "in regard to tax implication for Hampshire of entering into put/call option arrangement… will have answer this week"; and 2. the statement that Mr Blackman "will also get Andrew Sneddon to give input".
7. In those circumstances, Mr Mitchell submitted, the statement as to CGT liability could not reasonably be regarded as a statement of presently held opinion. He submitted that, as Mr Hall had accepted, it was no more than a "heads up" that if the transaction proceeded, Hampshire would face a large CGT liability. The reference to Mr Hall's evidence was to this passage [16] : Q. Mr Hall, looking at the paragraph, "Just by the way, you do realise that Hampshire has an incredibly minimal cost base re HHIL shares, I think 40 cents, and that a sale at $6 will lead to a taxable capital gain of $5.60 per share with no CGT discount. This means that 30% tax where a $1.68 for each share goes to the ATO on 2.4 million shares that is approximately $4 million. Just want you to be aware of this as it is not insignificant. PLS give me your thoughts." Your understanding reading that is that it's nothing more than a heads up that you are going to have a large tax liability in this matter, is it? A. I agree.
8. I turn to representation 19(e).
9. Mr Leopold submitted that the statement of opinion carried with it an implied representation that it was based upon reasonable grounds, and formed upon the basis of reasonable inquiries. He referred to the judgment of French CJ in Campbell v Backoffice Investments Pty Ltd [17] at [33] and to the judgment of Lindgren J in MGICA (1992) Ltd v Kenny and Good Pty Ltd [18] at 356. Mr Leopold submitted that, taking all the circumstances of the parties' relationship into account [19] , including that Mr Blackman knew that he was regarded by Mr Hall as one of Hampshire's key advisers, one who was intricately involved in its business affairs, and had been so regarded for at least 4 years at the relevant time [20] , a hypothetical reasonable recipient of Mr Blackman's email of 29 May 2006, reading it objectively, would have thought that the statement as to CGT liability had a reasonable basis.
10. Mr Leopold emphasised the statement to the effect that Mr Blackman wanted Mr Hall to "be aware of" the CGT liability. He submitted that those words echoed the third of the instructions that Mr Green had given Mr Blackman, and that those instructions were directed to "tax consequences"; potential CGT liability was clearly a "tax consequence", Mr Leopold submitted.
11. Mr Mitchell's submissions effectively repeated what he had put as to representation 19(c). Further, Mr Mitchell referred to Mr Blackman's second piece of advice, set out in his email of 1 June 2006 (see at [55] above). Mr Mitchell submitted that this email too formed part of the relevant context for assessing the character of the statements made in the earlier email. It was clear that Mr Blackman had received and read the Deloitte advice of 1 June 2006 (see at [49] and following above). Deloitte had not adverted to the possibility of any CGT consequences over and above those referable to a sale at the strike price of $6. In those circumstances, Mr Mitchell submitted, Mr Blackman did indeed have a reasonable basis for holding (or continuing to hold) the opinion imputed to him through the words of his earlier email.
12. I turn to representation 19(f).
13. Mr Leopold's submissions referred again to French CJ in Campbell and Lindgren J in MGICA. He stressed once more the emphatic nature of the language used by Mr Blackman. He referred to Mr Blackman's acceptance of the retainer, and submitted that by doing so, Mr Blackman accepted that he had the expertise to give the advice requested.
14. Mr Leopold referred to Mr Blackman's email to Mr Taylor (copied to Mr Hall) of 29 May 2006 (see at [38] above). Mr Leopold noted that Mr Blackman had accepted that through this email, Mr Hall would have received the impression that Mr Blackman did possess "a reasonable degree of tax speciality" [21] .
15. Mr Mitchell submitted that the representation was not conveyed, if only because Mr Blackman's Quantum Advice had stated that there was a need for, and he would obtain, specialist assistance from Mr Sneddon. Mr Sneddon's place was taken, Mr Mitchell submitted, by Deloitte, as Mr Green told Mr Blackman (or vice versa) in the conversation recorded in Mr Green's file note of 30 May 2006 (see at [42] above).
16. Further, Mr Mitchell submitted, Mr Hall had understood, from the reference to involving Mr Sneddon, that Mr Blackman did not think that he alone could give all the advice sought by Mr Green [22] . I set out that passage: Q. It's at page 1237? A. Thanks. Yes. Q. And do you see that's the email [the Quantum Advice] we're talking about? A. Yes. Q. And in the second paragraph Mr Blackman says, "I will also get Andrew Sneddon to give input"? A. Yes. Q. And you took that at the time as an indication that Mr Blackman didn't consider he was able to provide an answer without Mr Sneddon's input, did you? A. He‑‑ Q. Didn't you? A. It was at an early stage, so, Mr Blackman was wisely saying I will probably need to get some specialist advice on this, yes. Q. And you took that to mean that he doesn't think he's capable of handling it by himself? A. Yeah, yes.
17. I turn to representations 19(g), (h).
18. Mr Leopold referred to the observations of Malcolm AJA in Heydon v NRMA Limited [23] at [307]. His Honour said, and if I may say so with respect it is clear, that where a legal adviser gives an opinion, there is not normally a warranty that the opinion is correct, but only that reasonable care and skill have been brought to bear on the formation and expression of the opinion. Mr Leopold submitted, and it must be correct, that the same should apply to a representation of opinion made by an accountant.
19. Mr Mitchell did not appear to dispute the principle. His submission was, in effect, that it would only have application if Mr Blackman had been sued for negligence, and that was not the cause of action on which Hampshire relied.

Decision

1. I start by observing that it is a little artificial to treat this issue in isolation from, in particular, the next two issues and thereafter the fifth issue. Whether the specific pleaded representations were made, whether (if made) those representations were misleading or deceptive or Mr Blackman's conduct as a whole should be so characterised, and whether (if all those things be answered in favour of Hampshire) the plaintiff suffered loss "by" those matters, all involve consideration of and the drawing of inferences from all the relevant evidence. That is, in substance, the evidence that I have summarised earlier in these reasons.
2. Nonetheless, since the analysis must have some structure, I shall proceed by considering individual issues or groups of issues to the extent that a decision upon them is necessary. The first of those issues is of course whether the pleaded representations were made.
3. Before I turn to the particular representations, I should deal more carefully with their pleaded source. It will be observed from the pleading at [19] of the ACLS that the representations are said to have been made "in providing the Defendants' Advice". That is a defined term. By reference to [18] of the ACLS, it means both the Quantum Advice and the email of 1 June 2006. Those emails are pleaded (although not in full) at [16], [17] of the ACLS.
4. The pleading at [19] of the ACLS refers also to "the circumstances referred to in paragraphs 18A and 18B above". Those paragraphs plead, respectively, that: 1. when the advice was given, the market price of HHL shares was significantly higher than $6 per share; and 2. the "Defendants' Advice" made no reference to the risk of assessment of CGT on the basis set out in s 159GZZZQ(2) of the Income Tax Assessment Act 1936 (Cth) (the 1936 Tax Act).
5. Section 159GZZZQ provides its own problems of construction and application. However, stated briefly, it applies to off-market buybacks of listed shares. Subsection (2) provides that if the buyback price is less than the market value at the time of the buyback on certain assumptions, CGT is to be assessed on the basis that the consideration for the buyback is that market value.
6. To jump ahead a little: Mr Blackman did not turn his mind to s 159GZZZQ, because he was unaware of its existence. The experts who were called agreed that it was reasonable for a generalist practitioner (which is what they considered Mr Blackman to be) in Mr Blackman's circumstances at the relevant time not to have been aware of the section. However, they said, on the assumption that Mr Blackman was not so aware, it would have been good practice for him to seek the advice of a specialist tax practitioner, who (by hypothesis) should have been aware of the section.
7. The significance of the pleading is that the representations are not said to have emerged only from the first email - the Quantum Advice. They are said to emerge from that and the email of 1 June 2006. Although the pleading does not specifically direct attention to circumstances other than those pleaded at [18A], [18B] of the ACLS, I think that, as Mr Mitchell submitted, the analysis cannot be confined to the earlier email (or for that matter, to both emails read together) divorced from their context.
8. I start with representation 19(c). If the consideration of whether it was made is limited to the wording of the Quantum Advice read in conjunction with Mr Blackman's earlier response of the same day and Mr Green's instructions (see at [29], [28] respectively), I would incline to the view that the representation had been made. After all, Mr Green instructions specifically requested (question 3) that Mr Blackman address "any other tax consequences of which [Mr Hall] should be aware?".
9. The Quantum Advice did address specifically certain "tax consequences": namely, the potential CGT liability that would crystallise upon a sale at $6 per share. The advice was specific. It referred to the cost base (as Mr Blackman understood it), to the amount of capital gain that would result, and to the approximate total CGT that would be payable. (I say "approximate", but the figure was quite accurate. The parties agreed that the calculation, fully worked out, would result in CGT of $4.032m leaving aside the possible application of s 159GZZZQ.)
10. However, it is not appropriate to consider only that paragraph of the email. Less than two hours before it was sent, Mr Blackman, in accepting the retainer, had indicated that it he would try to respond to the questions on which he was asked to advise "this week". Clearly (29 May 2006 being a Monday), that email indicated that Mr Blackman hoped to advise by Friday 2 June at the latest. That expectation was conveyed again in the opening paragraph of the second email. Mr Blackman had apparently spoken with Mr Green. He said that he would have an answer "this week".
11. It is also significant that, in the next paragraph, Mr Blackman said that he would ask Mr Sneddon, who as I have said was known to the parties as a tax specialist, "to give input".
12. In those circumstances, it is difficult to regard the critical paragraph - the one starting "[j]ust by the way" - as giving firm advice. Rather, I think, it is to be read as warning Mr Hall (if he did not already know) that proceeding in the way outlined would expose him to a very substantial liability for CGT.
13. True it is that the CGT liability was quantified (both per share and in total), in precise terms. True it is, also, that the observations were expressed in emphatic terms. True it is, again, that they could be seen (and in my view should be seen) as adverting to another "tax consequence" within the ambit of the third question upon which Mr Blackman had been asked to advise.
14. However, to emphasise all those things, and construct from them a representation of the kind pleaded, is to disregard the interim nature of the observations. It ignores the fact that the "response" or "answer" was to be provided later than 29 May 2006, and after Mr Blackman had had "input" from a specialist tax adviser. In short, Hampshire's characterisation of the email seems to me to ignore its provisional status.
15. I do accept that even so regarded, it would have been incumbent upon Mr Blackman to reconsider his advice, once he had received input from Mr Sneddon, if the content of that input made reconsideration appropriate. In the event, that did not happen. The reasons why it did not happen are such as to confirm, in my view, that representation 19(c) was not made.
16. I have set out the relevant portion of the chronology and the extracts from the documents at [35] to [48] above. The inference that I draw from that material is that following Mr Blackman's "Quantum Advice", there was a consensus reached that Mr Sneddon should not be asked to advise, and that instead the specialist tax advice would be given by Deloitte. I think that the inference is more readily available to be drawn because Ms Karim and Mr Green, who could have given important evidence on the point, were not called, and no explanation was given for their absence from the witness box.
17. In this context, it is I think significant that Mr Blackman's email to Mr Taylor of 29 May 2006 (see at [38] above), copied to Messrs Hall and Green: 1. set out Mr Blackman's understanding that it was now Mr Taylor who is "providing advice to both Peter and HHIL…"; and 2. asked to be given a copy of "your final advice to Peter".
18. As I have noted, the obvious understanding displayed in that email - that Deloitte was to give the specialist tax advice, and to do so for the benefit of, among others, Hampshire (clearly synonymous with Mr Hall in this context) -was not dispelled by any of the recipients.
19. Thereafter, on 1 June 2006, Deloitte provided its advice. It commented on (or provided "guidance" as to) the tax implications, for Hampshire, of the proposed transaction. It expressed a clear view that CGT would be assessed on the difference between the strike price of $6 and the cost base of the shares. It mentioned "the market value substitution rules" (although in the context of s 116-30 of the 1997 Tax Act, not s 159GZZZQ of the 1936 Tax Act), and gave reasons why they should not apply.
20. One obvious inference from Deloitte's email of 1 June 2006 and Mr Blackman's advice, read as a whole, is that s 116-30 was the only possibly relevant market value substitution rule. If there were another, the reader would have expected Deloitte to refer to it.
21. Mr Blackman was entitled to think that the question of "tax consequences" for Hampshire had been addressed by Deloitte. He was entitled to think, in effect, that this was the "input" from a specialist tax adviser that he had said he would get. There was nothing in the Deloitte advice to suggest that Mr Blackman's comments on CGT liability had been incorrect. On the contrary, Deloitte in substance confirmed them.
22. Once Deloitte had advised, Mr Blackman's remaining role was to comment on the applicability of the Deloitte advice to Hampshire. There is nothing in the evidence that would suggest that Mr Blackman was required to reconsider for himself the question of CGT liability on which Deloitte had expressed a clear and reasoned view (although by way of "guidance" rather than by way of "advice", so-called). Mr Blackman had made it clear that his final advice would require input from a tax specialist. He had received that input. No doubt, if he had some reason for thinking that the input was incorrect, or had overlooked material facts, or contained some other flaw that a generalist in his position would be expected to pick up, he would be required to comment. But that is not this case.
23. Thus, when Mr Blackman commented (as it would appear he had been asked to do) on the applicability of the Deloitte advice to Hampshire, he agreed with the proposition that the option scheme should be structured (as between Hampshire and HHL) by way of put and call options rather than by way of conditional sale. He advised, further, that if the buyback price were paid in part by franked dividends then there would be significant tax benefits to Hampshire. In doing that, he completed the retainer as it had evolved over the days from 28 May to 1 June 2006.
24. In those circumstances, in my view, it is incorrect to conclude that the "Quantum Advice", read together with Mr Blackman's email of 1 June 2006 and in the full context that I have described, should be read as conveying the paragraph 19(c) representation.
25. I turn to representations 19(e) (as truncated), (g) and (h). If, contrary to my view, Mr Blackman had made the paragraph 19(c) representation, it would follow that those representations were also made.
26. That leaves representation 19(f). That would also seem to follow, on the basis that (contrary to my view) the paragraph 19(c) representation had been made. It is not really necessary to reach a decision, because the representation, whether made or not, adds nothing to Hampshire's case.

Second and third issues: were the representations or Mr Blackman's conduct as a whole misleading or deceptive?

1. Analysis of these issues requires further consideration of the evidence. To some extent, that will involve a re-hashing of, or at best a reference back to, some of the material to which I have referred already.
2. The starting point is that Mr Blackman's advice was sought at a relatively late stage in the development of the options scheme. He was retained by Mr Green's email of 28 May 2006 referred to at [28] above. Mr Blackman accepted the retainer by the first of his emails of 29 May 2016, referred to at [29] above.
3. The Quantum Advice formed part of Mr Blackman's first substantive response to the instructions conveyed to him by Mr Green. When one reads that in conjunction with Mr Blackman's earlier email of the same day, it is obvious that what was said in the second email did not represent Mr Blackman's considered and final view on the topic of CGT liability. There are at least two reasons why this is so.
4. First, both emails indicated that Mr Blackman would respond to, or answer, the questions later in the week - that is to say, by Friday 2 June 2006. There is nothing in the Quantum Advice to suggest that Mr Blackman had been able to shorten that time. On the contrary, as I have noted, it said that the "answer" would come later in the week.
5. The second reason is that, as Mr Blackman had made clear, his advice would be provided once Mr Sneddon had given "input". The significance of that, in circumstances where everyone knew that Mr Sneddon was a tax specialist, is obvious. Mr Blackman wished to have the benefit of Mr Sneddon's input before finalising his views.
6. The characterisation of the pleaded representations (if, contrary to my view, they had been made) would require consideration of the circumstances leading up to the making of those suggested representations. However, the relevant factual context does not stop there. That is because of the way the representations were pleaded, and the circumstances out of which they were said to have arisen (see at [105], [106] above).
7. Further, the question of whether Mr Blackman's conduct as a whole ought be characterised in the way for which Hampshire contends requires a consideration of that conduct in its full context.
8. That context includes the matters referred to at [35] to [58] above: the involvement of Deloitte, Mr Blackman's interactions with Messrs Green and Taylor on that topic, and the conclusion that Deloitte had been retained by HHL to advise both itself and Hampshire (see at [63] to [71] above).
9. By the time Deloitte had given its advice on 1 June 2016 and everyone had had some opportunity of considering it, the view of the tax specialist - Mr Taylor of Deloitte - was clear. The only relevant legislative provision was s 116-30 of the 1997 Tax Act. That section was inapplicable. Accordingly (and leaving aside the irrelevant capital gain of $1, the consideration for the grant of each option), CGT would be assessed on the difference between the strike price of $6 and the cost base.
10. In those circumstances, Mr Blackman was entitled to take the view that his opinion on likely CGT liability (to the extent that the Quantum Advice expresses such an opinion) was correct; that it had been confirmed by the specialist tax adviser; and that there were no other relevant legislative provisions except for s 116-30 of the 1997 Tax Act. Deloitte had raised the possible application of that section, and had concluded, for reasons it gave, that it did not apply.
11. Hampshire too was entitled to think that if there were any other relevant provisions of the tax legislation, Deloitte would have raised them. Since Deloitte did not do so, Hampshire was entitled to think, based on what Deloitte did say, that the question of CGT liability had been closed off.
12. No doubt, Hampshire wanted Mr Blackman to provide his own comments. But there is no basis for thinking that Mr Blackman's responsibility required him to reconsider the topic on which Deloitte had advised, and in what seemed to be a comprehensive fashion).
13. No doubt, if Mr Blackman had seen anything in Deloitte's advice that might render it inapplicable, he should have commented. But there were no obvious flaws or gaps. As I have said, the expert evidence was to the effect that Mr Blackman should not have been required to know of s 159GZZZQ, and that he should have relied (as he did) on expert advice to supplement his own knowledge.
14. Two things follow. First, Mr Blackman had no reason to reconsider what he had said in the Quantum Advice. And secondly, Mr Blackman had no reason to say anything further about it, because the question of "other tax consequences", on which initially his advice had been sought, had been referred to and answered by Deloitte. In those circumstances, there was no need for Mr Blackman to return to or reconsider the question of CGT liability.
15. In the course of his closing submissions, Mr Leopold stressed the double-barrelled statutory test: "misleading or deceptive" OR "likely to mislead or deceive". He submitted, correctly, that for conduct to be considered as likely to mislead or deceive there need be no more than a real, not remote, chance or possibility that it could mislead or deceive. It was not necessary that the possibility be more than 50%. He referred to the judgment of the Full Federal Court in Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd [24] at 87. There is no need to set out the relevant passage.
16. In considering whether conduct is likely to mislead or deceive (and indeed, in considering whether it has misled or deceived), one must look at the relationship between the parties: the party engaging in the conduct and the party subjected to it. The analysis requires objective consideration of the whole of the conduct in the circumstances that are proved. It is necessary to consider whether the conduct had the capacity to lead the person at whom it was directed into error (or, indeed, whether it has done so).
17. In this case, for all the reasons addressed earlier, the conduct ought not be so characterised. The proposition that Hampshire would have acted on the basis of Mr Blackman's "heads up", where Mr Hall understood that Mr Blackman thought he was not capable of handling the matter himself is, regarded objectively, implausible in itself. It is even less plausible when one considers what followed up to and including Deloitte's giving its advice.
18. The suggestion that provisional advice, given pending receipt of specialist taxation advice and effectively overtaken by that very specialist advice (although from a source other than that contemplated) could have retained its capacity to mislead or deceive after the specialist advice was given is in my view untenable. It ignores the objective realities of the situation. It abandons the necessity to characterise the conduct objectively, and substitutes for that characterisation the self-interested evidence of reliance on which Hampshire seeks to rely. I do not find that at all persuasive.
19. The matter may be tested this way. As I have noted already, it was common ground that Mr Blackman's observations on potential CGT liability, as contained in the Quantum Advice, were expressions of opinion. In other words, he represented that his opinions were as set out in the relevant paragraph of that email. That may well have carried with it representations that the opinions were genuinely held, on reasonable grounds, and that Mr Blackman had done whatever was necessary to equip him to express the opinions. Mr Blackman's email of 1 June 2006 did not withdraw or qualify the opinions. Assume that in those circumstances he did make all the pleaded representations. What would follow?
20. The opinions would remain ones that were genuinely held. They would remain ones held on reasonable grounds, because they would be consistent with the advice provided by the tax specialist, Mr Taylor of Deloitte. In those hypothetical circumstances, Mr Blackman would have done all that was necessary to equip him to express the opinions. Thus, their expression could not have amounted to misleading or deceptive conduct.
21. In fact, Mr Blackman did not expressly confirm his opinions. But even if it be assumed that his silence, or failure to say anything more about them, amounted to confirmation, the same analysis would apply. In other words, however one looks at it, it could not have been misleading or deceptive for Mr Blackman either to confirm the opinions or to fail to withdraw them.
22. I add, in case it is not clear from what I have said already, that I do not accept Mr Hall's evidence of reliance on the Quantum Advice. It is unnecessary to repeat what I have said earlier as to the acceptability of his evidence. Thus, I am not prepared to find that, subjectively, Hampshire (through Mr Hall) relied in any relevant way on Mr Blackman's Quantum Advice.
23. At the risk of repetition, I set out another passage from Mr Hall's cross-examination. Mr Hall accepted that he understood, on 29 May 2006, that Mr Blackman was going to provide further advice [25] : Q. When you say you read that, do you say that you got an actual recollection of reading this email back in May or June 2006 and forming that view? A. Not on that precise point, what I do remember is I do remember reading this email and it came, my view at that time was that Robert, Adam was engaged with this issue, this project and he's giving some particular, some early thoughts about what the consequences are of it. That there will be further advice down the track from him, but he's engaged with the issue. Q. Right, so in relation to the issue that appears at page 1237, you understand it as the formal advice is to come. Here are my preliminary thoughts, that's how you read it? A. I didn't read it that there would be necessarily formal advice, but he would give me advice not necessarily a formal written advice, but he would give me advice on all the tax consequences of this scheme. Q. Right? A. And try and protect my interests. Q. And he wasn't purporting to provide advice on all the consequences there, he was foreshadowing that would come and he was giving you his initial thoughts as you read it? A. Yes, he was giving me further advice on top of this advice.
24. That is consistent with Mr Hall's evidence of his understanding that the Quantum Advice was "no more than a heads up that you are going to have a large tax liability" [26] .
25. Thereafter, Mr Hall received the benefit of Deloitte's advice. Deloitte had been retained (as I find) specifically to advise, among others, Hampshire on the tax consequences of the transaction. Mr Taylor of Deloitte was, and was known to Mr Hall to be, a tax specialist. Mr Hall sought to avoid questions as to reliance on Deloitte's advice. That aspect of his evidence, in my view, was less than candid.
26. Further, for the reasons I have given, it could not have been reasonable for Hampshire to have relied on Mr Blackman's Quantum Advice. The whole sequence of events, culminating in the retainer of Deloitte to advise, among others, Hampshire, and Deloitte's advice to Hampshire on the tax implications of the proposal, leads inevitably to the conclusion that it was the specialist advice of Mr Taylor that would have provided the necessary degree of comfort to Hampshire.
27. Of course, if Mr Blackman had still held concerns notwithstanding Deloitte's advice, and had not expressed them, matters might have been different. But there was no occasion for Mr Blackman to revisit the question of CGT liability once Deloitte had expressed its view. Nor has there been put forward any plausible reason why he should have done so.

Fourth issue: telegraphic or telephonic services

1. This issue does not arise. Mr Leopold submitted that I could take judicial notice that the internet involved telegraphic or telephonic services, or alternatively that I could inform myself of that pursuant to s 144 of the Evidence Act 1995 (NSW). Mr Mitchell submitted that expert evidence was required to reach the conclusion for which Hampshire contended.
2. The debate is an arid one. It involves no question of primary fact. If it arises, it can be dealt with on the basis that I have outlined (either for or against Hampshire, depending on one's view of judicial notice and s 144) and on one's view of the numerous decided cases to which reference was made in the course of argument.

Issue 5: loss "by" conduct

1. Again, this issue does not arise. Were it necessary to decide it, I would conclude that if Hampshire had been advised of the extent of its uncapped liability for CGT calculated on the basis prescribed by s 159GZZQ, it would have abandoned the tripartite scheme that was in fact adopted, and returned to the original proposal: grant of options direct from Hampshire to the PMs.
2. That could not attract s 159GZZZQ, because there would be no buyback. It could attract s 116-30 of the 1997 Tax Act, and would do so unless the parties (Hampshire and the PMs) were dealing at arm's length. In my view, had the transaction proceeded in the way just outlined, that requirement would be satisfied. Each side - Hampshire for one and the PMs for the other - had its or their own interests to consider. Hampshire's interests would lie in retaining the services of the PMs for HHL, in the hope that the value of its shareholding (although diminished in numerical terms) would grow. The PMs' interests would lie in securing as many options as possible at as favourable a strike price as possible, regardless of the prevailing market price. Each side was well able to negotiate to protect its own interests. I have no doubt that they would have done so.
3. On that basis, CGT would have been payable on the difference between the stirkeprice and the cost base for each share. It is common ground that in those circumstances the loss would include $1,174,571 in additional primary tax and SIC, and amounts for legal and accounting fees paid in connection with the ATO audit which led to the amended assessments.
4. There is no dispute as to the amount to be allowed for legal fees. There is some dispute as to the amount to be allowed for accounting fees and associated advice. That dispute was fanned by the erroneous inclusion, in the total claimed, of invoices that had nothing to do with the ATO audit. Hampshire has amended its claim to delete those invoices. There is a remaining substantive challenge to an invoice for about $115,500, but in my view, the narrative in the letter accompanying that invoice demonstrates that it does relate to fees incurred in connection with the audit.
5. There seems little point in pursuing a minute dissection of the amounts. The revised total claimed for legal and accounting fees was $413,496.00. I would allow $400,000 for this head of loss, to reflect the uncertainties and lack of specificity in the evidence. In reaching that conclusion, I take into account the fact that the evidence given by Mr Hall on this topic was formulaic, and that he had not scrutinised the invoices in question to satisfy himself that they did indeed relate to the audit. I do however take into account (where relevant) narrative in the invoices or letters that summarises the services for which the charges were made.
6. There was a further claim for $215,515 for interest foregone on an amount that Hampshire paid to the ATO under what was called a "50/50 arrangement" pending resolution of Hampshire's appeal. Apparently, half the disputed amount was paid, in order to minimise interest. Hampshire claims to be entitled to interest on the amount paid, in the sum that I have mentioned, as compensation for the loss of use of money.
7. It does not seem to me that this claim ought be allowed. There is no pleaded claim for damages for the loss of use of money [27] (it is framed only as a claim for interest at court rates). Such a claim should be properly pleaded, and should be proved by evidence that proves the pleaded facts [28] . There is no basis on which interest can be allowed, under s 100 of the Civil Procedure Act 2005 (NSW), because no judgment is sought or to be given for the amount paid to the ATO under the 50/50 arrangement.
8. Hampshire's submissions raised alternative counterfactual situations. They were not seriously pressed in final submissions. It is therefore unnecessary to say no more than that the evidence that any of those other counterfactual situations would have arisen, had Hampshire been given proper advice as to the application of s 159GZZZQ, is unconvincing.
9. I accept that reliance is relevant to the question of whether loss has been suffered "by" misleading or deceptive conduct (or conduct likely to mislead or deceive). There is no need to repeat what I have said on that topic.

Sixth issue: Deloitte a concurrent wrongdoer?

1. This issue does not arise. Its resolution would require consideration of two principal questions: 1. did Deloitte owe a duty of care to Hampshire? 2. What proportion of responsibility, for the loss claimed by Hampshire, should be attributed to Deloitte, were it held to be legally liable for some part of the loss claimed by Hampshire in these proceedings? 3. Because the issue is hypothetical, I propose to say very little about it.
2. Debate on the first question recognised, in my view correctly, that Deloitte could only be a concurrent wrongdoer, for the purposes of s 34(1)(b) of the Civil Liability Act 2002 (NSW), or s 87CB(1) of the TP Act, if it would have been liable in law to Hampshire in respect of the same damage for which, by hypothesis, the partnership is liable. That point is made in the judgment of the Court of Appeal in Cam & Bear Pty Ltd v McGoldrick [29] .
3. Mr Leopold contended that Deloitte owed no duty of care to Hampshire. He relied on the wording of the letter of engagement (the relevant passage has been set out at [49] above) and on cl 5.1 of the terms of engagement. That clause stated: 5. USE OF REPORTS AND ADVICE 5.1 Any advice that Deloitte gives to the Client, its employees or agents is for the Client's exclusive use and must be used only for the purpose described in the Engagement Letter. Unless Deloitte gives the Client prior written consent, our advice: must not be used or disclosed for any other purpose, referred to in any document or made available to any other person, except the Client's lawyers or other professional advisors assisting in the engagement; and may not be relied on by any one other than the Client.
4. Further, Mr Leopold submitted, Hampshire was not relevantly vulnerable, because it was well able to protect itself from the consequences of incorrect advice.
5. Mr Mitchell submitted that, because the retainer of Deloitte was effected by HHL not only on its own behalf but also on behalf of Hampshire, Deloitte did owe a duty of care to Hampshire. In those circumstances, he submitted, Hampshire was relevantly vulnerable. Mr Mitchell relied on Dansar Pty Ltd v Byron Shire Council [30] at [171], [172] (Meagher JA, with whom Leeming JA agreed) and Ku-ring-gai Council v Chan [31] at [71] (Meagher JA, who whom the other members of the Court agreed).
6. Were it necessary to decide this question, I would hold, based on my conclusion that Deloitte was retained to advise Hampshire as well as HHL, that Deloitte did owe a duty of care to Hampshire. That duty would follow because of the inference, obvious from the circumstances of the retainer, that Hampshire looked to Deloitte to advise it on the tax implications of the alternative versions of the options scheme, and proposed to rely on the advice that Deloitte gave.
7. In my view, to the extent that it is necessary to go further and find vulnerability, that would also be satisfied. In the cases to which I have referred, Meagher JA said, each time, that known reliance (and, I add, assumption of responsibility) may be taken to indicate vulnerability.
8. The second question would involve allocation of responsibility, as between the partnership and Deloitte, for such loss as Hampshire has proved it suffered. That exercise would require an analysis of comparative culpability or causal potency. Since I have concluded that the partnership has no liability, the exercise cannot be performed.
9. However, it seems to me to be obvious that Deloitte would bear the greater part of the responsibility. It was retained as the tax specialist. It proffered advice. As I have said, both Mr Blackman and Hampshire were entitled to rely on the advice (including the inference from it that s 116-30 of the 1997 Tax Act was the only relevant legislative provision). Mr Blackman was asked to consider the applicability of the Deloitte advice. He was not asked to reconsider Deloitte's conclusions or reasoning, far less to second-guess those conclusions.

Seventh issue: time bar

1. Again, this issue does not arise.
2. The essential contest was whether, as the partnership submitted, the cause of action accrued at the latest on 30 June 2007 (as the partnership contended) or when the ATO issued its amended assessment, invoking s 159GZZZQ (as Mr Hampshire contended).
3. Mr Mitchell submitted that s 17 of the 1936 Tax Act imposed on Hampshire a legal liability, as and from 30 June 2007, to pay tax for the financial year commencing 1 July 2006, even though no assessment had been issued. He relied on the judgment of Ipp JA (with whom Beazley and Campbell JJA agreed) in Christie v Purves [32] at [52] to [57]. Thus, Mr Mitchell submitted, time commenced to run from 30 June 2007.
4. Mr Leopold submitted that what he said were the uncertainties inherent in s 159GZZZQ (including the suggested difficulty of determining the statutory concept of "market value" embodied within that section) were such that, until the amended assessment was issued, there was no more than the chance of a loss [33] . Mr Leopold emphasised that s 159GZZZQ raised valuation issues which in turn raised complex questions of opinion. He pointed to the expert evidence of Mr Bridger on this topic. In those circumstances, Mr Leopold submitted, there was no more than the chance of a loss, or a contingent loss, until the Commissioner took action invoking s 159GZZZQ. He referred to the judgment of Hodgson JA (with whom McColl JA and Handley AJA agreed) in Leda Pty Ltd v Weerden [34] at [70] to [72].
5. Since the resolution of this difficult issue does not require a decision on any disputed question of primary fact, I propose to say no more.

Eighth and ninth issues: liability under s 251M

1. Hampshire's claim under s 251M of the 1936 Tax Act relates only to the SIC, and was brought in the alternative to its principal claim.
2. Section 251M provided [35] : 251M Negligence of registered tax agent etc. (1) If, through the negligence of a registered tax agent, or of a person exempted under section 251L, a taxpayer becomes liable to pay a fine or other penalty, the general interest charge under a provision of this Act, or to pay shortfall interest charge, the registered tax agent, or the person, as the case may be, shall be liable to pay to the taxpayer the amount of that fine or other penalty, additional tax, general interest charge or shortfall interest charge, and that amount may be sued for and recovered by the taxpayer in any court of competent jurisdiction. Note 1: The general interest charge is worked out under Part IIA of the Taxation Administration Act 1953and shortfall interest charge is worked out under Division 280 in Schedule 1 to that Act. Note 2: Subsection 8AAB(4) of that Act lists the provisions that apply the general interest charge. (2) Nothing in this section shall exonerate the taxpayer from his liability.
3. The parties agreed that s 251M applied at the time of the relevant events.
4. The parties focused on the word "negligence". Hampshire contended that this meant simply "want of due care". The partnership contended that it imported the concept of a common law duty of care to protect from economic loss. It is not necessary to resolve that debate.
5. Mr Blackman was not negligent in his preparation of the relevant income tax returns. He prepared them in accordance with the advice given by Deloitte: that is to say, on the basis that the relevant capital gain was the difference between the strike price of $6 and the cost base for the options actually exercised in the year of income. For the reasons I have given, Mr Blackman was entitled to assume that Deloitte's advice was correct. It must follow that he was entitled to act on it, in his capacity as Hampshire's accountant. There was no want of due care in his so acting. Nor (if he owed a common law duty of care) could he have breached it by so acting.

Tenth to twelfth issues: defences to the claim under s 251M

1. None of these issues arises for consideration. There is no point in dealing with them. There are no underlying factual disputes which require to be resolved. Their resolution involves difficult questions of statutory construction. There is nothing to be gained by offering obiter observations on the resolution of those questions.

Conclusions and orders

1. In all the ways that it was put, Hampshire's case against the partnership fails. It follows that the proceedings must be dismissed.
2. In the ordinary way, costs would follow the event. However, Mr Mitchell said that he wished to be heard on costs regardless of the outcome. Accordingly, I shall make orders to accommodate that.
3. I make the following orders: 1. order that the proceedings be dismissed. 2. List the matter for directions in the Commercial List on 27 July 2018 for the parties to obtain a date for the hearing of submissions on costs, and directions in relation to that hearing. 3. Direct that the exhibits be handed out.

Endnotes

1. It is common ground that the version of this Act current as at 2010 is (at least on Hampshire's case) relevant, having regard to the time when the events in contest occurred.
2. T227.43-228.18.
3. T223.4-.10.
4. Amended Commercial List Statement (ACLS) filed on 15 August 2017, para 19(c).
5. See, generally, T134-135, from which the quotations come.
6. T136.32-.43.
7. T148.40-.41.
8. T149.10-.12.
9. (1995) 49 NSWLR 315.
10. At 319.
11. Affidavit sworn 4 November 2016, [120] - [121].
12. T25-29.
13. T223.19-.22.
14. (1992) 39 FCR 31.
15. (2010) 241 CLR 357.
16. T67.7-.15.
17. (2009) 238 CLR 304.
18. (1996) 140 ALR 313.
19. See Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [37].
20. See Mr Blackman's evidence at T204.23-.39.
21. T234.38-.42.
22. T153.3-.24.
23. (2000) 51 NSWLR 1.
24. (1984) 2 FCR 82.
25. T65.6-.27.
26. T67.7-.15 - see at [90] above.
27. See Hungerfords v Walker (1989) 171 CLR 125.
28. See Lahoud v Lahoud [2009] NSWSC 623 at [275] and following, where Ward J considered the authorities in some detail; I adopt her Honour's analysis.
29. [2018] NSWCA 110 at [94]-[96] (Macfarlan JA, McColl AP and White JA agreeing).
30. (2014) 89 NSWLR 1.
31. (2017) 224 LGERA 330.
32. (2007) 69 ATR 155.
33. I think that Mr Leopold accepted that some loss might have been sustained when Hampshire first incurred costs in relation to the ATO's audit, but since those costs were incurred within the limitation period, nothing turns on this.
34. (2007) 63 ACSR 636 - a case dealing with tax losses.
35. I use the past tense, because it has been repealed. 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: 18 July 2018