Hylepin Pty Ltd v Doshay Pty Ltd

Division: General Division

Registry: Victoria

National Practice Area: Commercial and Corporations

Sub-area: Corporations and Corporate Insolvency

Number of paragraphs: 282

Date of last submissions: 16 July 2021

Date of hearing: 20 May 2021

Counsel for the Appellant: Mr GD Dalton QC with Mr PJT Creighton-Selvay

Solicitor for the Appellant: Kelly Hazell Quill Lawyers

Counsel for the First Respondent: The First Respondent did not appear

Counsel for the Second and Third Respondents: Mr CM Caleo QC with Mr DF McAloon

Solicitor for the Second and Third Respondents: B2B Lawyers

BETWEEN: HYLEPIN PTY LTD (ACN 006 702 969) Appellant

AND: DOSHAY PTY LTD (ACN 006 575 202) First Respondent

GLOBAL 2000 MELBOURNE PTY LTD (ACN 092 825 842) Third Respondent

order made by: MARKOVIC, BANKS-SMITH AND ANDERSON JJ DATE OF ORDER: 19 november 2021

1. Appeal dismissed.
2. The appellant pay the second and third respondents' costs of the appeal to be assessed by a registrar of this Court on a lump sum basis if not agreed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Table of Contents BACKGROUND [8] Parties [8] The six impugned transactions [12] The proceedings [14] Grounds of appeal [18] BREACH OF FIDUCIARY DUTY GROUNDS [23] Scope [23] Principles summarised by the primary judge [24] The authorities and Hylepin's reliance upon Agricultural Land Management [29] Exhibition Street Property bought by Global 2000 [53] Facts [53] Hylepin's contentions at trial [66] Consideration - ground 4 [67] Related appeal grounds - constructive trust and limitation period argument [89] Ground 5 [89] Ground 6 [91] The Evaluator transactions [97] The two stages - investment and buyout [97] The investment [99] The buyout [104] Consideration - ground 7 [115] OPPRESSION GROUNDS [121] Scope [121] Principles [122] Framework of the primary judge's reasons [137] Exhibition Street Property - allocation of shares [151] John So's 2004 alteration of the share register for Global 2000 - ground 2 [179]

Doshay and the Evaluator transactions [207] Initial acquisition of shares [207] Doshay's buyout of Global Crest's interests in Evaluator - ground 3 [209] Lyleable and Jadetrex loans [215] Loan to Lyleable [218] Loan to Jadetrex [223] Analysis [229] Failure to renew lease - ground 9 [236] Failure to acknowledge cumulative effect of conduct - ground 1 [264] OPTION TO RENEW LEASE [279] DETERMINATION [282]

THE COURT: 1 This appeal concerns claims by the appellant company, Hylepin Pty Ltd, about the conduct of the affairs of the first respondent, Doshay Pty Ltd. Hylepin appeals from an order of the primary judge whereby claims asserting oppression and breach of fiduciary duty with respect to Doshay were dismissed. 2 Hylepin holds 45,000 shares in Doshay. Those shares were obtained in 1987 for $1.00 per share, being an investment of $45,000. Whilst the value of those shares was not determined as part of the liability proceedings, there was evidence before the primary judge that suggested that, at least as at February 2018, they may have been worth some $2,735,000. 3 The second respondent, John So, is a director of Doshay, and an indirect shareholder. We will follow the primary judge's convention of referring to him by that name in full. 4 The third respondent, Global 2000 Melbourne Pty Ltd (Global 2000), is the registered proprietor of a property in Exhibition Street, Melbourne (Exhibition Street Property). Hylepin contended unsuccessfully before the primary judge that the Exhibition Street Property is held on constructive trust for Doshay. 5 Doshay did not participate in the appeal. References in these reasons to the respondents are therefore to John So and Global 2000. 6 Hylepin was successful as to one head of relief before the primary judge: a declaration was made to the effect that Doshay has been the owner of five shares in Global 2000 since 15 June 2000, rather than four shares, as the share register of Global 2000 wrongly indicated (Share Declaration). However, although making the Share Declaration, the primary judge found that the conduct that resulted in the incorrect share register entry did not involve any breach of fiduciary duty by John So or oppression. 7 Hylepin by the appeal maintains that the primary judge erred in failing to make certain findings as to breach of duty and oppression. For the reasons that follow, the appeal must be dismissed.

Parties 8 Doshay was incorporated in 1986 by John So and his family interests. John So has at all material times been the managing director and a shareholder (directly or indirectly) of Doshay. Doshay has operated the Dragon Boat Restaurant in Little Bourke Street in Melbourne's Chinatown district for many years. John So was its longstanding general manager. 9 Hylepin was incorporated in 1987 by, relevantly, Mr Peter Chan. Hylepin became a shareholder of Doshay in the same year. Peter Chan was a director of Doshay for a period until 1991. 10 John So invested in various projects over the course of the following years, sometimes via Doshay, sometimes in his own name and sometimes utilising various other corporate and related entities. 11 A number of matters relating to Doshay attracted the criticism of Hylepin, leading to this litigation. It was pleaded that such matters, together and in any combination, were oppressive or involved breach of John So's fiduciary duties to Doshay.

The six impugned transactions 12 Hylepin complained about six transactions. Some of these transactions occurred many years ago. It is relevant to this appeal that the impugned transactions were all described in the introductory paragraphs of the primary judge's reasons, and so for that reason we include his Honour's summary: [5] First, Hylepin alleges that John So caused Doshay to acquire shares in, and advance loans to, four other companies that operated Chinese restaurants in Melbourne, being: (a) Westlake Restaurant Pty Ltd (Westlake), which was the trustee of the Westlake Restaurant Unit Trust and which operated the Westlake Chinese Restaurant in Melbourne's Chinatown district (in Little Bourke Street) and in which Doshay first invested in FY1988; (b) Lyleable Pty Ltd (Lyleable), which operated a 'Dragon Boat' restaurant at the Village Cinema Complex within the Knox District Centre (which is located on the Burwood Highway in Wantirna South) (Dragon Boat Knox) pursuant to a Franchise Agreement with Doshay entered into in February 1989; (c) Jadetrex Pty Ltd (Jadetrex), which operated the 'Dragon Boat Palace' restaurant at 144-159 Lonsdale Street Melbourne (Dragon Boat Palace) pursuant to a Franchise Agreement with Doshay entered into in March 1990; and (d) Dragon Wall Pty Ltd (Dragon Wall), which operated a Chinese takeaway restaurant business from Bourke Place, 600 Bourke Street Melbourne and in the Telstra building on Exhibition Street, Melbourne from about 1990. [6] Hylepin complains that the defendants held personal interests in those companies and that John So caused Doshay to invest in and transfer substantial sums to those companies without any loan agreements, security or interest and without disclosing his conflicts to Doshay. [7] Second, Hylepin alleges that John So used Doshay's assets, without its consent, to acquire buildings at 231-235 Exhibition Street, Melbourne (the Exhibition Street Property) and 149 Lonsdale Street, Melbourne (the Lonsdale Street Property) for Global 2000, a company that he directed and in which he and Wendy Cheng held a substantial shareholding through a company called Global Crest Pty Ltd (Global Crest). Global 2000 settled the purchase of the Exhibition Street Property in June 2000 and settled the acquisition of the Lonsdale Street Property in December 2004. [8] Third, Hylepin alleges that, in 2001 and 2003, John So caused Doshay to buy shares in and transfer funds to Evaluator Pty Ltd (Evaluator), a company that was directed by Wendy Cheng and majority owned by Global Crest. Evaluator was incorporated to acquire the Cafe Puccini business which operated next door to the Dragon Boat Restaurant and lease the premises that it occupied. Over time, Doshay used parts of those premises for the Dragon Boat Restaurant and also operated a noodle shop called DB Express Noodle Bar. [9] Fourth, Hylepin alleges that, in May 2004, John So wrongly caused Global 2000 to correct its register of members and lodge a form with the Australian Securities and Investments Commission (ASIC) to show that Doshay owns four shares and John So owns one share in Global 2000, when in fact Doshay owned five shares in Global 2000 (with Global Crest owning the other five shares). [10] Fifth, Hylepin alleges that John So caused Doshay to fail or refuse to pay dividends to its shareholders at any time prior to 9 November 2018, despite having substantial retained profits of more than $8 million. [11] Sixth, Hylepin alleges that, on 9 May 2019, John So (together with Hellen Chin, who was the second director of Doshay) resolved not to exercise the option to renew Doshay's lease of the premises at which it operates the Dragon Boat Restaurant for his own personal convenience and without any proper regard to the interests of Doshay or its members. 13 We adopt in these reasons the terms as defined by the primary judge in the above extract, noting in particular the references to each of Lyleable, Jadetrex, Global Crest and Evaluator. We also adopt the primary judge's convention of referring to financial years as FY2001, FY2002 and so on.

The proceedings 14 In 2016 Hylepin commenced proceedings against Doshay, John So and others under s 232 of the Corporations Act 2001 (Cth), asserting that the conduct of the affairs of Doshay had been either contrary to the interests of its members as a whole or oppressive to, unfairly prejudicial to or unfairly discriminatory against, Hylepin. 15 In October 2018 the Court granted leave to Hylepin to intervene in the proceedings in the name of Doshay and bring derivative proceedings against, relevantly, John So, for breach of equitable fiduciary duties in respect of five of the six impugned transactions. Leave was also granted to Hylepin to make claims against Global 2000 and Wendy Cheng (who was John So's partner) for their knowing involvement in the breaches and receipt of trust property. 16 During the course of the trial Hylepin was granted leave to amend its statement of claim to allege that Doshay held five shares (not four) in Global 2000. As a result, a third further amended statement of claim was filed on 12 September 2019 (Third ASOC). The extent to which this amendment was relied upon by Hylepin is the subject of dispute in this appeal and is discussed further below. 17 After a trial that occupied nine hearing days, the primary judge made the Share Declaration and ancillary relief for rectification of the register of members, but otherwise rejected all claims based on oppression or breach of fiduciary duty and dismissed the application.

Grounds of appeal 18 Hylepin appeals from the decision of the primary judge by nine grounds of appeal (reliance on grounds 6(b) and 8 was disavowed by Hylepin in its submissions). The parties were largely in agreement that determination of the appeal required the consideration of questions which can be grouped into categories. 19 First, as to the breach of fiduciary duty claims (grounds 4 and 7), Hylepin asserts that the primary judge erred in that he failed to make findings that John So acted in breach of his fiduciary duty to Doshay in connection with the acquisition of the Exhibition Street Property and failed to properly apply the law in finding that there was no such breach. Further, Hylepin asserts that the primary judge erred in that he failed to find that John So breached his fiduciary duty in connection with Doshay's acquisition of shares and advances of funds to Evaluator. As to both alleged breaches it was said that the primary judge erred by finding that there was no conflict of interest or breach of the profit rule in circumstances where it was said that John So had a personal financial interest in the transactions. 20 Second, as to the oppression claims (grounds 1, 2 and 3), Hylepin asserts that the primary judge erred by failing to find that certain transactions either separately or cumulatively were oppressive, and in particular failed to find that neither the conduct that culminated in the Share Declaration nor the conduct by way of the buyout of Global Crest's shares in Evaluator was oppressive. 21 Third, Hylepin asserts that the primary judge failed to find that the Exhibition Street Property is held on trust for Doshay; and erred by finding that the claim on behalf of Doshay was in any event statute barred and that s 21 of the Limitation of Actions Act 1958 (Vic) had no application (grounds 5 and 6(a)). We have addressed this category when considering the breach of fiduciary duty claims. 22 Fourth, Hylepin asserts that the primary judge erred in failing to make certain findings about John So's conduct in deciding not to exercise an option to renew the term of the Dragon Boat Restaurant lease (ground 9). The ground alleges that such conduct was oppressive, in breach of fiduciary duty and in breach of John So's duties under s 180(1) of the Corporations Act.

Scope 23 Consideration of the fiduciary duty grounds of appeal requires consideration of the findings and application of the law with respect to two of the impugned transactions, being the acquisition by Global 2000 of the Exhibition Street Property, and the initial acquisition of shares in, and the advance of funds by Doshay to, Evaluator in FY2001.

Principles summarised by the primary judge 24 At trial Hylepin's claims of breach by John So of his equitable fiduciary duties relied relevantly on the so-called conflict rule and the profit rule. Because it is alleged that his Honour applied the wrong test, it is appropriate to first note the manner in which the principles were summarised. 25 The primary judge commenced with the orthodox statement that a director of a company is under a fiduciary obligation not to promote his or her personal interest by making or pursuing a gain or benefit in circumstances in which there was a conflict or a real or substantial possibility of a conflict between his or her personal interest and the interests of the company without the fully informed consent of the company: Boardman v Phipps [1967] 2 AC 46 at 124 (Lord Upjohn); Chan v Zacharia (1984) 154 CLR 178 at 199 (Deane J); and Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 103 (Mason J). 26 The primary judge also noted the following matters: (a) the question whether there is a real possibility of conflict is assessed objectively (Boardman v Phipps at 124); (b) one way of ascertaining whether the interest of the fiduciary is remote or insubstantial is to ask whether the interest is such that a reasonable person would think there is a real or substantial possibility of the fiduciary being swayed by it (Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1 at [4512] (Owen J)); (c) where a director of a company with a conflicting interest has caused the company to engage in a transaction, it is no defence that the impugned transaction has brought a benefit to the company that would not otherwise have been available or that the transaction was objectively reasonable (Allco Funds Management Limited v Trust Company [2014] NSWSC 1251 at [167] (Hammerschlag J)); (d) a conflict of duties may arise where a person is a director of two companies that transact with each other, because a company is entitled to the unbiased and independent judgement of its directors - a director of a company who is also a director of another company may owe conflicting fiduciary duties (R v Byrnes & Hopwood (1995) 183 CLR 501 at 516-517); (e) but it is not always the case that a conflict of duties arises where a person is a director of two companies transacting with each other - the scope of the fiduciary duty depends upon the particular circumstances and the nature of the relationships in issue (Howard v Commissioner of Taxation [2014] HCA 21; (2014) 253 CLR 83 at [34] (French CJ and Keane J), [60]-[61] (Hayne and Crennan JJ)); (f) nor does a company director breach their fiduciary duties merely because they are also a shareholder of a company and so also benefit personally from promotion of the company (Howard at [34]); and (g) a director of one company that holds an investment in a second company may be nominated as a director of a second company to further the interests of the investment. Frequently, no conflict of duty arises because relevant decisions are in the interest of both the appointor company and the appointee company. A nominee director only acts in breach of their duty owed to a company if they would not have made a decision as director of one of the companies but for the interests of the other company (citing, amongst other authorities, Mills v Mills (1938) 60 CLR 150 at 186 (Dixon J)). 27 The primary judge also summarised the authorities as to the profit rule and accounting for profits by reference to, in particular, Deane J's well-known passage in Chan v Zacharia at 198-199: reasons at [38]-[39]. 28 For completeness, we include that passage. Deane J observed that the equitable rule involved two themes and that: The first is that which appropriates for the benefit of the person to whom the fiduciary duty is owed any benefit or gain obtained or received by the fiduciary in circumstances where there existed a conflict of personal interest and fiduciary duty or a significant possibility of such conflict: the objective is to preclude the fiduciary from being swayed by considerations of personal interest. The second is that which requires the fiduciary to account for any benefit or gain obtained or received by reason of or by use of his fiduciary position or of opportunity or knowledge resulting from it: the objective is to preclude the fiduciary from actually misusing his position for his personal advantage. Notwithstanding authoritative statements to the effect that the 'use of fiduciary position' doctrine is but an illustration or part of a wider 'conflict of interest and duty' doctrine (see, eg, Boardman v Phipps at AC 123; All ER 756; NZ Netherlands Society 'Oranje' Inc v Kuys at 1229), the two themes, while overlapping, are distinct. Neither theme fully comprehends the other and a formulation of the principle by reference to one only of them will be incomplete. Stated comprehensively in terms of the liability to account, the principle of equity is that a person who is under a fiduciary obligation must account to the person to whom the obligation is owed for any benefit or gain (i) which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed between his fiduciary duty and his personal interest in the pursuit or possible receipt of such a benefit or gain; or (ii) which was obtained or received by use or by reason of his fiduciary position or of opportunity or knowledge resulting from it.

The authorities and Hylepin's reliance upon Agricultural Land Management 29 As noted, Hylepin submitted that the primary judge applied the wrong test. Hylepin submitted that the primary judge applied a test of 'whether the decision would not have been made in the absence of the director's interest'. In so doing, it was submitted, the primary judge erred in confusing the (correct) question of whether John So acted with a conflict of interest, with the (incorrect) question of whether he acted by reason of that conflict. 30 Hylepin submitted that the proper test was as explained by Edelman J in Agricultural Land Management Ltd v Jackson [No 2] [2014] WASC 102; (2014) 48 WAR 1 at [263]-[275], and in particular at [266]: The 'conflict rule' when concerned with conflicts between duty and personal interest is not limited merely to situations in which a fiduciary actually prefers personal interest. It includes also situations involving a potential for personal interest to be preferred or a potential for breach of duty to one principal where conflicting duties are owed to different principals. 31 It followed, according to Hylepin, that in order for it to succeed it was only necessary to find that there was a potential for a conflict between John So's personal interests and his duty to Doshay. It was not necessary to show that he had acted in a manner whereby he actually preferred his interests. 32 The primary judge's summary of the principles accurately refers to the observations of the High Court that inform the question of the nature of a conflict, including the observations in each of Chan v Zacharia, Hospital Products and Howard. To those references we add the following extracts from and overview of relevant authorities. 33 The connection between the interests or duties that might comprise a conflict was described by Mason J in Hospital Products (at 103) as a conflict 'or a real or substantial possibility of a conflict' between the personal interest of the fiduciary and the interests of the company. The same phrase was used by Hayne and Crennan JJ in Howard (at [59]), citing Pilmer v Duke Group Ltd (in liq) [2001] HCA 31; (2001) 207 CLR 165 at [78]. There are other formulations of the required connection such as 'a sensible, real or substantial possibility' (Clay v Clay [2001] HCA 9; (2001) 202 CLR 410 at [56]); and 'a significant possibility' (Chan v Zacharia at 198). The 'possibility of conflict' needs to be understood in the sense of a 'real sensible possibility of conflict': Boardman v Phipps at 124; and Hospital Products at 103. 34 In Boardman v Phipps Lord Upjohn said at 124: In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you can imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in a conflict. 35 Where, as in this case, the allegation is of conflict of duty (as a director of Doshay) and interest (an alleged personal financial interest), it is appropriate to have regard to the nature of the interest in question and whether it is in opposition to, or in tension with, the relevant duty: Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143 at [74]; and Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 at [55]. The same general principles apply in the case of duties that might conflict: Settlement Agents Supervisory Board at [76]. The scope of the fiduciary duty is moulded having regard to the particulars of the underlying relationship that gives rise to the duty, 'according to the nature of the relationship and the facts of the case': Hospital Products at 102. The reference to 'duty' is a shorthand reference to the function or responsibility that a fiduciary has assumed: Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [179]. In Howard, French CJ and Keane J referred to the principle that: [34] … The scope of the fiduciary duty generally in relation to conflicts of interest must accommodate itself to the particulars of the underlying relationship which give rise to the duty so that it is consistent with and conforms to the scope and limits of that relationship. 36 As is apparent from the descriptions of the relevant connection, not all interests are within the conflict rule. Some fiduciaries may be permitted by agreement to pursue their own interests in some respects: Hospital Products at 102. In Howard, the example is provided of company directors who are frequently shareholders. A director may act with a personal interest even though the director has not freed his or her mind of that personal interest when so acting, provided that his personal interest was not the actuating motive: Re HIH Insurance Ltd and HIH Casualty and General Insurance Ltd, Australian Securities and Investments Commission v Adler [2002] NSWSC 171 at [735] (Santow J), citing Mills v Mills at 164-165. The same principles apply in the case of conflicts of duty: Settlement Agents Supervisory Board at [7]. 37 The primary judge also noted that even where directors may have been nominated by particular shareholders with interests that may compete with the interests of the company, such separate interests do not lead to an inference that the directors will vote contrary to the interests of the company. Some of the cases cited by the primary judge are instructive: (a) Mills v Mills at 186 (Dixon J): the test of the validity of a director's acts in managing the company's affairs permits regard to 'the substantial object the accomplishment of which formed the real ground of the board's action'; (b) Re Broadcasting Station 2GB Pty Ltd [1964-65] NSWR 1648 at 1663 (Jacobs J): where the articles permitted the appointment of directors nominated by Fairfax, it could be expected that those directors might vote in accordance with Fairfax' s interests, but such conduct is not reprehensible 'unless it could be inferred that the directors, so nominated, would so act even if their acts were not in the best interests of the company' (and there was no evidence of a lack of bona fide belief that the interests of Fairfax were consistent with the interests of the company as a whole); and (c) Re News Corporation Ltd (1987) 15 FCR 227: where after referring to the position of directors to be appointed by a shareholder, Bowen CJ said: As was pointed out in the 2GB case, it would make the position of a nominee or representative director an impossibility to require that he approach each company problem with a completely open mind. It is both realistic and not improper to expect that such directors will follow the interests of the company which appointed them subject to the qualification that they will not so act if of the view that their acts would not be in the interests of the company as a whole. In my opinion, it may be assumed that the nominee directors of [the company] will act in such a way. Such an assumption does not, however, lead to the assumption they will act in breach of their fiduciary duty as directors. 38 To those authorities we add that the case law recognises that a person being a non-executive director even of competing companies will not necessarily breach the conflict rule: On the Street Pty Ltd v Cott (1990) 3 ACSR 54 at 61 (Powell J); and Streeter v Western Areas Exploration Pty Ltd [No 2] [2011] WASCA 17 at [69] (McLure P). 39 The different circumstances and roles in which a director may act, as the authorities above demonstrate, indicate that the relevant analysis is context-specific. That is also reflected in the following observations of Hayne and Crennan JJ in Howard: [60] … it is necessary to recognise, and give due weight to the fact, that different minds may reach different conclusions as to presence or absence of a real possibility of conflict between duty and interest or duty and duty. That is, the doctrine cannot 'be inexorably applied and without regard to the particular circumstances of the situation' [Phelan v Middle States Oil Corporation (1955) 220 F (2d) 593 at 602 per Judge Learned Hand, cited by Mason J in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 104 and the majority in Pilmer v Duke Group Ltd (In liq) (2001) 207 CLR 165 at 199 [79]]. [61] It follows that the working out of the application of the rule to company directors is not achieved by the bare repetition of its terms. Much closer attention must be given to the duties, interests and alleged manner of conflict than is given by simply observing that directors owe fiduciary duties. It is necessary to identify the duties or interests which are said to conflict or present a real possibility of conflict. 40 The question raised by Hylepin's reliance upon Edelman J's reasons in Agricultural Land Management is whether it directs a different approach to that of the primary judge. 41 In Agricultural Land Management Ltd, the plaintiff (ALM) was the responsible entity and trustee of a managed investment scheme. The first and second defendant (Jackson and Goff) were directors of ALM. Jackson and Goff were also directors of an entity known as Bunbury Centro. ALM purchased a property from Bunbury Centro for $2,250,000 and paid a fee (at least $1,665,051) for a non-exclusive licence for the use of information in Bunbury Centro's possession. Jackson and Goff signed the applicable contract on behalf of both the purchaser and the vendor. Jackson and Goff knew that ALM intended to develop the property into a hotel. The development was a failure. 42 ALM brought proceedings against Jackson and Goff, seeking compensation for breaches of equitable duties and duties under the Corporations Act, relying on their conduct in relation to the purchase of the property and the fee paid under the licence. The trial judge relevantly found that Jackson and Goff breached their fiduciary duties to ALM to avoid placing themselves in a position in which their duties to ALM conflicted with duties to another principal, being Bunbury Centro. As no evidence of loss was established, ALM's claim for relief failed. 43 His Honour recognised that the pleaded conflict was properly a conflict of duty and duty, as Jackson and Goff were directors of both the purchaser and vendor under the contract. Due to the absence of evidence as to value, ALM failed to prove that Jackson and Goff actually preferred their own interests to the interests of ALM. However, there remained the matter of the potential conflict relating to entry into the contract. Edelman J addressed the issue as follows: [264] But there remains the potential conflict that arose for Messrs Jackson and Goff in causing Agricultural to enter the Contract. That conflict was between their duties as officers of Agricultural and their duties as officers of Bunbury Centro. By acting to cause both Agricultural and Bunbury Centro to enter into the Contract they were acting in a position of owing duties to parties with directly conflicting interests. Agricultural's interest was to obtain the lowest price possible. Bunbury Centro's was to obtain the highest. Messrs Jackson and Goff did not obtain shareholder approval from the shareholders of Agricultural for the Contract between Agricultural and Bunbury Centro. [265] The defendants sought to meet this allegation of breach of fiduciary duty by the submission that '[c]onflict per se is not actionable. A breach of duty arises where a fiduciary acts in a position of conflict and pursues (or prefers) the personal interest.' The submission quoted from a judgment of Owen J. It is pertinent that the passage from the judgment quoted commences with the words 'generally speaking'. [266] This submission is rejected. The 'conflict rule' when concerned with conflicts between duty and personal interest is not limited merely to situations in which a fiduciary actually prefers personal interest. It includes also situations involving a potential for personal interest to be preferred or a potential for breach of duty to one principal where conflicting duties are owed to different principals. The same principles apply where, as in this case, the relevant conflict rule concerns two potentially conflicting duties. [267] It has been said that it is a 'counsel of prudence' rather than a 'rule of equity' that a fiduciary ought to avoid placing himself or herself in a position of conflicting duties. The rule, it has been said, is that a fiduciary must not take advantage of a conflict. But those judges who have remarked on this limit to the fiduciary duty have done so in the context of considering the scope of the separate 'profit rule' or the 'equitable principle governing the liability to account'. The assumption behind the statement may have been that there is no basis for the order of an account of profits in circumstances in which it has not been shown that any advantage was taken to make any profit. [268] In contrast, when focus is directed to the prohibition against a fiduciary placing himself or herself in a position of conflicting duties there are many authorities which emphasise that the underlying duty upon the fiduciary is not circumscribed by whether actual advantage has been taken or whether the fiduciary has actually pursued the conflict. (citations omitted) 44 By way of example of such authorities referenced by Edelman J at [268], his Honour referred to Maguire v Makaronis (1997) 188 CLR 449 at 465 (fn 60) and said: [270] A second example is the decision of Brennan CJ, Gaudron, McHugh and Gummow JJ in Maguire v Makaronis which referred with approval to a formulation by Richardson J in a case involving conflicting duties by a solicitor: A solicitor's loyalty to his client must be undivided. He cannot properly discharge his duties to one whose interests are in opposition to those of another client. If there is a conflict in his responsibilities to one or both he must ensure that he fully discloses the material facts to both clients and obtains their informed consent to his so acting … And there will be some circumstances in which it is impossible, notwithstanding such disclosure for any solicitor to act fairly and adequately for both. But the acceptance of multiple engagements is not necessarily fatal. There may be an identity of interests or the separate clients may have unrelated interests. Such cases seem straightforward so long as it is apparent that there is no actual conflict between duties owed in each relationship. (citations omitted) 45 Returning to ALM's claims, Edelman J considered the interests involved, finding that it was not a case of 'identity of interest': [271] This is not such a case of 'identity of interest'. When Messrs Jackson and Goff acted as agents for both vendor and purchaser to the transaction they were representing companies with diametrically opposed interests, not least of which was in relation to price. 46 His Honour concluded (at [275]) that, having regard to their respective roles as directors, Jackson and Goff breached 'the usual duty to avoid placing themselves in a position in which their duties to [the plaintiff] conflicted with duties to another principal'. 47 There are a number of points to note from Agricultural Land Management. First, Edelman J's references to the prospect of a potential conflict, regardless of whether actual advantage has been taken, is consistent with the authorities that have already been referred to, and their references to 'a real or substantial possibility', 'a sensible, real or substantial possibility' or 'a significant possibility' of conflict: see [33] above. 48 Second, Edelman J undertook the task of analysing the nature of the respective competing interests (or duties), concluding that there was no identity of interests and that the conflict of interest was apparent from each having obligations to both contracting parties. The nature of those obligations (to represent each party in seeking to achieve the highest and lowest price respectively) were at fundamental odds. The facts provide an example of the circumstances where there is a recognised conflict of interest in assuming both roles. However, as Edelman J's analysis of the circumstances revealed, it was not assumed that a conflict existed solely because of the position of Jackson and Goff as directors of both companies. 49 Third, it can be accepted that there are some circumstances where there may be a conflict of interest regardless of whether any advantage is pursued. The example of a solicitor purporting to act for clients with competing interests is perhaps an obvious one: even if no payment is involved, an issue arises as to whether a duty can properly be performed, having regard to knowledge that a solicitor may hold or acquire about the respective clients. That Edelman J drew attention to the potential for such conflicts to arise regardless of an actual advantage being pursued or gained is not at odds with the case law to which the primary judge referred. To the extent the decision of Black J in In the matter of Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 at [360] might be understood to suggest otherwise, we prefer what we consider to be the orthodox view as reflected in Edelman J's approach. 50 Fourth, as is apparent from authorities referred to by Edelman J such as Maguire v Makaronis, there are circumstances where, although duties are owed to different or multiple parties and so there may be a superficial appearance of conflict, consideration of the facts reveals that there is no conflict in the performance of those duties. Interests may be substantially identical, or parties to whom duties are owed may have unrelated interests. So much is also clear from the line of cases that permits directors to have interests or hold positions in related or competing companies referred to at [36]-[39] above. 51 Fifth, it is artificial to emphasise only Edelman J's reference (at [266]) to the sufficiency of the 'potential' for personal interests to be preferred to disclose a conflict, in contrast to 'actual' preferring, without referring to his Honour's reasons more comprehensively. As those reasons disclose, it is necessary to consider the situation in which the conflict is said to arise, a position consistent with the authorities referred to at [35] above. 52 We will return to the question of whether the primary judge properly considered such matters, after setting out the factual matters and findings about the Exhibition Street Property acquisition.

Facts 53 The primary judge made the following unchallenged findings of fact as to the acquisition of the Exhibition Street Property. 54 John So became aware at some point that the Exhibition Street Property was on the market. There was no evidence that he became aware of the opportunity to purchase it through his directorship of Doshay or that it could be an opportunity belonging to Doshay. Doshay's business at that time was to operate Chinese restaurants. It was not a property investor: reasons at [177]. 55 On 13 December 1999 John So entered into a contract of sale to purchase the Exhibition Street Property for $2 million. The purchaser was identified as 'John So and/or nominee': at [167]. 56 John So nominated Global 2000 as purchaser. Global 2000 was incorporated on 12 May 2000 for the purpose of being the owner of investment properties. Initially John So was the sole director and shareholder of the one issued share in Global 2000: at [169]. 57 On 15 June 2000 there was a transfer, allotment and issue of shares, the end result being that of ten issued ordinary shares in Global 2000, Doshay held five (including the one share initially held by John So) and Global Crest held the other five: at [169]. In 2004 an issue arose as to the alteration of Global 2000's record of the allocation of those shares, but this is addressed separately below. 58 Shares in Global Crest were relevantly held by John So, Wendy Cheng and Wendy Cheng's brother: at [171]. 59 Settlement of the purchase of the Exhibition Street Property was completed on or about 29 June 2000, with the transfer registered on 6 July 2000. As to the financing of the purchase, Doshay paid a deposit of $200,000, which the primary judge characterised as a pre-incorporation loan to the nominee purchaser (which became Global 2000): at [173]-[175]. Doshay also advanced $400,000 in part payment of the settlement sum. The Bank of Melbourne advanced $1.3 million for the purchase at settlement, and two other loans were utilised, being from Global Crest ($116,166) and from 'Directors' ($169,466.50) respectively: at [175]. 60 The Bank of Melbourne loan was secured by a mortgage over the property and an all assets fixed and floating charge granted by Global 2000. A personal guarantee was also provided by John So: at [172]. 61 By settling the purchase of the property, Global 2000 accepted the nomination as purchaser under the contract for sale, ratified the payment of the deposit made on its behalf and acknowledged the loan owing: at [56]-[61], [176]. 62 From the start of FY2001 until the end of FY2006, interest accrued on the loans advanced by Doshay to Global 2000. Doshay also had use of second floor space at the Exhibition Street Property, but was charged rent between only 2001 and 2004: at [178]-[180]. 63 Global 2000's financial records for the period FY2001 to FY2018 indicate a long history of borrowings from various parties including Doshay, Global Crest, John So, Wendy Cheng and others. All of the loans were undocumented, interest free and unsecured, save that interest was paid to Doshay as already identified (and it is apparent that the primary judge used the expression 'undocumented' to reflect an absence of any written loan agreements): at [181]. Separately, it was found that all the relevant loans by Doshay were recorded in financial statements: at [97]. It was also found more generally that advances made by Doshay without a formal loan agreement and, in number of instances, on an interest free basis to other entities were interest free loans made by Doshay repayable on demand, that had the potential to improve Doshay's financial position and were not dishonest or hidden: at [61]. 64 Global 2000 repaid the Doshay loan in full in 2018, and also repaid the loans to Wendy Cheng and the directors at that time: at [181]. 65 Doshay's shareholding in Global 2000 is valuable. An entity known as Urbis valued the Exhibition Street Property at $10,460,000 as at November 2017: at [182].

Hylepin's contentions at trial 66 Hylepin's contentions as to the alleged breach by John So of his fiduciary duties to Doshay were summarised in the reasons as follows: [310] Hylepin contends that John So breached the fiduciary duties owed to Doshay, specifically the conflict rule, in taking the following actions: (a) using Doshay's funds to pay a $200,000 deposit to the vendor of the Exhibition Street Property for a contract of sale where Doshay was not the purchaser but rather 'John So and/or nominee'; (b) nominating Global 2000, in which John So was the sole director and had interests, as the purchaser under the contract of sale for the Exhibition Street Property; (c) causing Doshay on 28 June 2000 to pay $400,000 to the vendor of the Exhibition Street Property for the benefit of Global 2000; (d) having Global 2000 take registered title to the Exhibition Street Property; (e) using Doshay's financial performance and position to obtain a $1.3 million loan for Global 2000 and from the Bank of Melbourne to pay the balance of the settlement for the acquisition of the Exhibition Street Property; and (f) securing the $1.3 million loan from the Bank of Melbourne by a mortgage over the Exhibition Street Property and Global 2000 (which only significant asset was the Exhibition Street Property at the time). [311] Hylepin also contends that John So's use of Doshay's money to pay the $200,000 deposit and later contribute a further $400,000 towards the purchase price of the Exhibition Street Property was to the benefit of himself, Global 2000, Global Crest and his partner, Wendy Cheng, at the expense of Doshay, in breach of the profit rule. [312] Hylepin contends that, as a result, Global 2000 holds the Exhibition Street Property on constructive trust for Doshay.

Consideration - ground 4 67 The primary judge found that the facts did not disclose a conflict of interest on the part of John So. His Honour analysed and determined the position as follows. 68 John So obtained the opportunity to purchase the Exhibition Street Property in his personal capacity and he was free to acquire it himself or nominate any purchaser without any breach of his duties to Doshay. Doshay was not a property investor and the evidence did not suggest the opportunity came to John So in circumstances connected to his role as a director and manager of Doshay: reasons at [314]. 69 Doshay's advance of the sum of $200,000 to enable John So to pay the deposit was to be characterised in its context. The relevant facts and circumstances show that the monies advanced by Doshay 'should properly be characterised as a pre-incorporation loan to the nominee purchaser of the Exhibition Street Property, which ultimately became Global 2000': at [315]. 70 John So established Global 2000 as a joint venture vehicle through which Doshay was given the opportunity to acquire a 50% interest in the Exhibition Street Property. There was no obligation on John So's part to offer Doshay the opportunity to acquire 100% of the Exhibition Street Property. Hylepin does not criticise John So's decision as a director of Doshay to take up the 50% investment through acquiring shares in Global 2000: at [315]. 71 Having regard to those findings, the primary judge then considered the question of the payment of the $200,000 and conflict of interest: [316] Understood in that context, there was no conflict of interest or breach of the profit rule associated with Doshay advancing the pre-incorporation loan for the payment of the deposit of the Exhibition Street Property. It can be accepted that John So had a personal financial interest in the purchase of the Exhibition Street Property, first as the contract purchaser and later through his shareholding interest in Global Crest. However, as the High Court affirmed in Howard, the fact that a director has a separate interest in the decision being made does not necessitate the conclusion that the relevant decision is affected by a conflict of interest. The relevant question is whether the decision would not have been made in the absence of that interest. In the present case, I am satisfied that John So would have made the same decision, causing Doshay to advance the deposit monies to secure the purchase of the Exhibition Street Property and with the ultimate aim of acquiring a 50% interest in the property, regardless of the identity of the other intended investors in Global 2000. In other words, I am satisfied that John So would have made the same decision even if the other investors in Global 2000 were wholly unrelated to John So. 72 His Honour continued the determination of that question at [317]-[318], observing that Hylepin's analysis of the transaction, with its focus on the purchase contract, was artificial. The transaction involved a number of related steps. The loans to secure the purchase were recorded in Global 2000's financial statements and Global 2000 was responsible for paying the whole of the purchase price: at [317]. Contrary to Hylepin's assertion, Global 2000 did not 'use' Doshay to obtain the bank loan. Doshay provided no security for the benefit of Global 2000 and it was John So's financial position that assisted Global 2000 in obtaining finance: at [318]. 73 In our view, and for the following reasons, the primary judge did not err as alleged by Hylepin. 74 The reasons disclose that the primary judge identified the nature of the interest and duty that gave rise to the risk of conflict. His Honour observed that John So brought an opportunity to Doshay to participate in a joint venture to acquire the Exhibition Street Property. Doshay did not lend $200,000 to John So simply for John So's purposes at large. Rather, as the primary judge's analysis reveals, Doshay advanced a loan for the benefit of Global 2000 and in circumstances where it became a 50% shareholder in Global 2000. The joint venture proceeded on the basis that parties in addition to Doshay would participate. John So also had a personal interest through his shareholding in Global Crest, the other shareholder in Global 2000, in securing the purchase for the joint venture, but his Honour was satisfied that the decision that Doshay take up the opportunity and advance the deposit was not inconsistent with John So's personal interests. 75 As the reference at [316] of the reasons to Howard indicates, his Honour acknowledged the co-existing duty and interest and the content of the interest, and then considered whether duty and interest might give rise to a conflict in the particular circumstances. 76 The High Court in Howard expressly left open the potential for a director to have co-existing duties and interests but without being in a position of conflict. That potential is also revealed by the line of cases referred to by the primary judge at [37]. 77 It is true that the primary judge at [316], immediately after referring to Howard, said that the relevant question is 'whether a decision in which a director has a separate interest would not be made in the absence of that interest'. We accept that such question, of itself, does not disclose the nuanced task that is required in order to assess whether a conflict of duty and personal interest exists in particular circumstances, and whether any breach of duty is established. It is consistent, however, with the statement in Mills v Mills and HIH Insurance referred to at [36] above. Further, when the reasons are read as a whole, and there is regard in particular to [317]-[318], it is apparent that the primary judge did not determine whether or not there was a conflict of interest solely by reference to that question. 78 There is no doubt that a question as posed by the primary judge may assist in considering the nature of the interest in question. His Honour had earlier in the reasons (at [32]) referred to part of the statement of Owen J in Bell Group [No 9] at [4512]. That paragraph of Owen J's reasons in full is as follows: One way of ascertaining whether the interest of the fiduciary is remote or insubstantial is to ask whether the interest is such that a reasonable person would think there was a real or substantial possibility of the fiduciary being swayed by it. In this way, tests for the identification of the 'interest' and for the 'possibility of a conflict' would be applied bearing in mind a similar rationale. 79 The primary judge's analysis indicates that as a matter of substance he considered whether there was an alignment of, or division between, John So's duty as a director of Doshay and his personal interests, in circumstances where Doshay and Global Crest were seeking, through the joint venture vehicle of Global 2000, to procure and complete the acquisition of the Exhibition Street Property, and considered whether there was any factor that relevantly shifted that alignment. So much can be seen from his Honour's reference to a number of matters: John So offering the opportunity to invest to Doshay in circumstance where there was no obligation for him to do so; that the ultimate aim was that Doshay would acquire a 50% interest in the property; the contributions made by other interested parties to ensure that Global 2000 was in a financial position to settle; that Global 2000 was to pay the purchase price (not Doshay or Global Crest); and the consideration of the manner in which such payments and securities were advanced by interested parties, including by Doshay and John So. 80 In the circumstances of the particular opportunity being offered to Doshay, that approach reflects an orthodox application of principle and we do not consider his Honour misapplied any test. In contrast to Agricultural Land Management, where the directors had a clear and actual conflict representing opposite sides of a transaction, there was evidence to support the primary judge's finding that the interest of Doshay and John So in securing the acquisition of the Exhibition Street Property were aligned so that there was no 'substantial risk of conflict'. 81 It is true that the manner in which Global Crest, Doshay and John So contributed to secure the purchase for Global 2000 varied, but his Honour also took into account whether Doshay's financial position was 'used' by Global 2000 (a circumstance that might have revealed John So's personal interests potentially affecting his duty to Doshay). However, the primary judge found that in obtaining finance, it was John So's financial position that assisted Global 2000, rather than Doshay's. It was John So who provided a guarantee. It was Global 2000 that provided security by mortgage. These findings were not challenged by Hylepin. 82 As to the additional advance by Doshay of $400,000 in part payment of the settlement sum, in our view the primary judge as a matter of substance considered the roles of the relevant parties by way of their different contributions, a task entirely consistent with a consideration of whether those entities could proceed in the manner that was proposed without John So assuming a position of conflict. His Honour found that the Bank of Melbourne advanced $1.3 million for the purchase at settlement, and three other loans were provided, being from Doshay ($400,000), Global Crest ($116,166) and from 'Directors' ($169,466.50) respectively: at [175]. Although the primary judge found that the question was finely balanced, with Global Crest and John So having contributed less (together $285,000), Doshay received interest for the advance (unlike Global Crest or John So), and John So also provided a personal guarantee. So, there were elements that favoured Doshay. 83 His Honour concluded that John So 'would have made the same decision to advance the $400,000 to enable Global 2000 to complete the purchase', even if the other investors in Global 2000 had been wholly unrelated to John So (at [319]). Whilst Hylepin criticises that analysis, it is not to be viewed in isolation. The conclusion reflects the approach that an interest in one company and an interest in another does not necessarily give rise to a conflict where interests are aligned. It reflects 'one way' (as suggested by Owen J in Bell Group [No 9]) of ascertaining whether the personal interest of the fiduciary is remote or insubstantial, that is, by considering whether such interest was a matter that objectively swayed John So in considering whether Doshay should make the loan in order to assist Global 2000 in settling the transaction. 84 Having said that, it is important to note that the rejection of the breach of fiduciary duty claim insofar as it related to the $400,000 advance was not done lightly by the primary judge. The observations of Hayne and Crennan JJ in Howard resonate in this regard: it is necessary to recognise, and give due weight to the fact, that different minds may reach different conclusions as to presence or absence of a real possibility of conflict between duty and interest or duty and duty. 85 In our view, the primary judge properly understood the principles to be applied in addressing Hylepin's breach of fiduciary duty claim. Some further reassurance, were it required, that the task was properly understood may be seen in other parts of the reasons where his Honour undertakes an assessment of competing interests or duties. 86 As will be seen in the reasons that follow, in other circumstances his Honour found that there was a conflict of John So's duty and personal financial interests with respect to an aspect of the Evaluator transaction: see [111] below. It is apparent from the reasoning relating to that matter that his Honour properly understood that the question of conflict was to be considered having regard to the nature of the duty and interests, and the extent to which they aligned in all of the circumstances. In that case, the evidence disclosed that John So, through his shareholding in Global Crest, stood to benefit from money loaned by Doshay to the loss-making Evaluator being used to pay out loans due by Evaluator to Global Crest. That was a particular financial benefit of value to Global Crest, not analogous to any benefit from the transaction to Doshay: reasons at [339]. 87 It is also apparent from parts of the reasons addressing other impugned transactions that his Honour considered it relevant to his findings to consider whether competing interests were potentially in conflict: for example, at [288] (John So was a director of two companies but the decision was in mutual interests); at [293] ('the evidence does not establish that the interests of Doshay and Lyleable were in conflict'); at [302] (consideration of all of the circumstances is required in order to understand whether a personal relationship created a conflict of interest); and at [308] (accepting there was a possibility of conflict due to the potential for decision making to be affected, but finding insufficient evidence as to circumstances of 'a real and sensible possibility of a conflict'). To the extent there was reference to John So's reasons for particular transactions, we consider it was undertaken in the context of an objective consideration of the type required by Boardman v Phipps. 88 In conclusion, we are not satisfied that the primary judge erred either as to the application of principle in assessing whether there was a conflict of duty and interest, or in failing to find that there was any such conflict with respect to the $200,000 and $400,000 loans, and it follows that ground 4 must be dismissed.

Related appeal grounds - constructive trust and limitation period argument

Ground 5 89 By ground 5 Hylepin asserts that the primary judge erred in failing to find that Global 2000 at all times held the Exhibition Street Property on trust for Doshay. The claim against Global 2000 was brought on the basis of knowing involvement in John So's alleged breaches of fiduciary duty and receipt of trust property: reasons at [13], [42]. 90 As we have upheld the outcome of his Honour's findings that no breach of fiduciary duty on the part of John So was established with respect to the Exhibition Street Property, it is not necessary to determine ground 5: Boensch v Pascoe [2019] HCA 19 at [7]-[8].

Ground 6 91 By ground 6, Hylepin asserts that the primary judge erred in finding that its claim on behalf of Doshay in relation to the Exhibition Street Property was statute-barred by finding that s 21 of the Limitation of Actions Act had no application. 92 The primary judge said that had he come to a different view as to any part of Doshay's investment in Global 2000 relating to the acquisition of the Exhibition Street Property, then the claim would be barred, applying the six year statutory limitation period for breach of directors' duties by analogy: at [320]. 93 His Honour found that there was nothing dishonest or fraudulent in John So extending to Doshay the opportunity to invest in Global 2000 or in the financial arrangements that were struck, noting that '[t]he arrangements did not enrich John So at the expense of Doshay; the arrangement enriched Doshay and John So in a reasonably equitable manner': at [320]. 94 The primary judge also found, when assessing the credibility of John So's evidence generally, that there had been accurate documenting of all relevant transactions, with all loans recorded in Doshay's financial statements, and that this strongly negatived any suggestion that the transactions were conducted dishonestly or were intended to be concealed. His Honour rejected Hylepin's submissions that Doshay and John So had concealed information from Hylepin and concluded that the evidence indicates that information was provided when it was sought: at [98], [101]. 95 His Honour rejected Hylepin's contention that where assets are misapplied through a breach of duty, then equity will not permit the trustee or beneficiary to plead a limitation defence. His Honour considered that the contention was framed too broadly, and that: [321] … The class of case to which Hylepin is referring concerns claims by a beneficiary against a trustee for breaches of trust (which, in Victoria, are governed by s 21 of the Limitation Act). The claims in this case are not of that kind. Rather, the claims are for breach of fiduciary duty by a director in respect of which there exists a remedy at law which is subject to a statutory limitation period. Equity applies the time bar by analogy unless reliance by the defendant on the statute would in the circumstances be unconscionable: Gerace at [70] per Meagher AJ (with whom Beazley P & Emmett JA agreed). In my view, it would not be unconscionable for John So to rely on the limitation period. The conduct did not involve fraud and the conduct was not fraudulently concealed by John So. The relevant transactions were duly recorded in the financial statements for Doshay and Global 2000. Doshay's financial statements for FY2002 and FY2003 which were provided to Hylepin's accountants in 2004 disclose Doshay's shareholding in Global 2000 and its loan to Global 2000 in the amount of $647,560. 96 In the circumstances where no breach of fiduciary duty is established, it is not necessary to determine ground 6.

The two stages - investment and buyout 97 There are two stages to the impugned transactions relating to Evaluator. The first stage involved the initial investment by acquisition by Doshay and Global Crest of shares in Evaluator, and Doshay's loans to that entity during FY2001. The second stage involved the acquisition or buyout by Doshay in December 2003 of the shares owned by Global Crest in Evaluator. 98 Both stages are relevant to the oppression claim (subject to a caveat as to the first stage, discussed in the oppression section of the reasons). Only the investment stage forms part of the breach of fiduciary duty claims, included as ground 7. However, for convenience we will now turn to address the findings relating to both the investment and the buyout.

The investment 99 The history to the Evaluator transaction commences with John So's evidence that in 2001 a café named 'Café Puccini' was operating in the premises next to the Dragon Boat Restaurant and was being marketed for sale. John So was told by the owner of Café Puccini that other operators of Chinese restaurants were interested in acquiring the business in order to open a restaurant in the style of the Dragon Boat Restaurant from its premises: reasons at [183]. 100 John So's evidence was that Evaluator was incorporated in November 2000 with 100 ordinary issued shares, 51 of which were held by Global Crest and 49 of which were held by Doshay: at [185]. Evaluator was incorporated to be the joint venture vehicle between Global Crest and Doshay. The financial statements recorded loan capital in the form of three loans: Doshay in the sum of $134,951; Global Crest in the sum of $68,445; and directors (Wendy Cheng) in the sum of $59,972: at [185]. 101 Evaluator acquired the Café Puccini business and the leasehold. Further, the Dragon Boat Restaurant used part of the premises for its own business. The primary judge accepted evidence that the Dragon Boat Restaurant occupied about 50% of its space on weekdays for dining space and this increased over a period of 2004 to 2007: at [186]-[188]. 102 The primary judge found that Doshay's initial acquisition of shares in Evaluator and the advancing of the interest free loan was not a breach of John So's fiduciary duties to Doshay. Relevantly, the primary judge found that: [333] … I am not persuaded that Doshay's initial acquisition of shares in Evaluator and the advancing of interest free loan capital to enable the purchase of the Café Puccini business was a breach by John So of the conflict rule by reason of his personal relationship with Wendy Cheng and shareholding interest in Global Crest. Hylepin did not contend that John So was in breach of his duties by failing to acquire the whole of the Café Puccini business opportunity rather than 49%. Nor did it contend that John So was in breach of his duties by causing Doshay to enter into the joint venture arrangement with Global Crest, as opposed to another joint venture partner. Rather, Hylepin's contention is that John So was in breach of his duties by causing Doshay to invest in the Café Puccini business at all. However, the evidence shows that the investment decision was made by John So to advance the commercial interests of Doshay. In my view, there was nothing uncommercial or improper about the business decision or the joint venture arrangements. There was an understandable business objective to protect the Dragon Boat Restaurant from competition on its door step, and to do so using the business experience of Global Crest to continue to run the Café Puccini business. Overall, I consider that John So would have made the same decision regardless of whether he entered into a joint venture with Global Crest or with another entity (or no joint venture partner) and that the decision did not involve a breach of his duties. 103 The primary judge also found that Doshay's investment decision did not involve fraud and that the loans were not fraudulently concealed by John So: [334] To the contrary, the loans were duly recorded in the financial statements of Doshay and Evaluator. I accept John So's evidence that Doshay's financial statements were available to its members, including Hylepin. Doshay's financial statements for FY2002 and FY2003, provided to Hylepin's accountants by Paul Tjioe & Associates, recorded the shareholding in, and loans made to, Evaluator.

The buyout 104 Moving to the facts relevant to the buyout, his Honour noted that Evaluator's overall business was not successful. Each of FY2001, FY2002 and FY2003 saw net losses. At the same time, Evaluator's financial statements showed that the loans from each of Doshay, Global Crest and the 'Directors' increased in a roughly proportional manner: at [191]. 105 John So's evidence was that in 2003 he considered that it was in Doshay's interests to acquire the 51% interest in Evaluator owned by Global Crest because it would enable the Dragon Boat Restaurant to make use of the premises occupied by Café Puccini without regard to Global Crest's interests: at [195]. 106 The primary judge made findings that: [336] In December 2003, Doshay bought out the whole of Global Crest's share capital and loan capital in Evaluator, and a portion of Wendy Cheng's loan capital in Evaluator. The relevant ledger entries and financial statements show that both forms of capital were effectively bought at 'par value' (i.e. dollar for dollar). Thus, Doshay paid $51 to purchase Global Crest's 51 shares and advanced a loan to Evaluator of $119,945 to enable the repayment of Global Crest's loan to Evaluator (after adjustment in the ledger entries) and a further loan to Evaluator of $39,201.53 to enable the repayment of part of the 'Directors' loan to Evaluator. The ledger entries also showed that, during FY2004, Doshay loaned a further amount of $38,250.52 to Evaluator, taking its total loans to $426,687.05, and the 'Directors' loan (from Wendy Cheng) also increased by $35,000 to $76,015.47. 107 The primary judge found that although Evaluator had made losses in its first three financial years, that fact did not mean that Evaluator was worthless: at [337]. 108 His Honour accepted John So's evidence that there was a commercial imperative: [337] I accept John So's evidence as to the commercial rationale for Doshay to buy out Global Crest's interests in Evaluator. Evaluator held the lease over the Café Puccini premises which had strategic value to Doshay, protecting the Dragon Boat Restaurant from competition and providing additional space that was available for use by Doshay. John So said that the acquisition enabled the Dragon Boat Restaurant to extend its kitchen operations to the Café Puccini premises. The acquisition enabled the Dragon Boat Restaurant to make use of the premises occupied by Café Puccini without regard to Global Crest's interests. 109 His Honour continued: [338] Hylepin did not contend that Doshay could have achieved those commercial objectives without buying out Global Crest's interests. The loan capital advanced by Global Crest (and Wendy Cheng) was repayable at call or on reasonable notice. I infer that there was no realistic option for Doshay to acquire Global Crest's shareholding in Evaluator without also buying out its loan capital. If Global Crest had called for repayment of its loans, the only choices for Doshay would have been to allow Evaluator to become insolvent (thereby losing the strategic benefit of the lease over the Café Puccini premises) or to provide funds to Evaluator to enable the loans to be repaid. 110 Importantly, the primary judge then continued: [339] For the foregoing reasons, I consider that Doshay's decision to buy out Global Crest's interests in Evaluator were not uncommercial or improper. However, in making that decision, I consider that John So was in breach of the conflict rule and the profit rule by reason of his 25% shareholding interest in Global Crest (which he held until 20 May 2004). The effect of the buy out was to advance Doshay's monies as a loan to Evaluator in order to repay Global Crest's loans. While, for the reasons already given, I consider that the transaction was in Doshay's interests, there was an obvious financial benefit for Global Crest in having its loans repaid at that time (given that Evaluator was loss-making). (emphasis added) 111 As is apparent from that paragraph, although finding that the decision was not uncommercial or improper, the primary judge found the conduct of John So in deciding that Doshay would buy out Global Crest's interests was in breach of the conflict rule and the profit rule because of his 25% shareholding in Global Crest. The buyout saw the loan due to Global Crest repaid. 112 The primary judge found, however, that the claim was statute barred, applying the six year limitation period for breach of director's duties by analogy. His Honour did not consider it would be unconscionable in the circumstances for John So to rely on the statute bar, because the conduct was not dishonest and did not involve fraud: reasons at [335], [339]. Nor were the transactions concealed, but were recorded in financial statements that were available to the members of Doshay, including Hylepin: at [340]. 113 The finding that the claim was statute barred was not challenged on the appeal. Although an appeal ground based on that finding was included in the notice of appeal, Hylepin expressly disavowed any reliance on that ground in its submissions. 114 Therefore, the appeal, insofar as it concerns an alleged breach of fiduciary duty relating to Evaluator, is limited to Doshay's initial investment by way of its acquisition of shares and advances of funds to Evaluator.

Consideration - ground 7 115 As the primary judge recorded at [333], Hylepin did not contend at trial that John So was in breach of his duties by failing to cause Doshay to acquire the whole of the Café Puccini business opportunity, rather than 49%. Nor did it contend that John So was in breach of his duties by causing Doshay to enter into the joint venture arrangement with Global Crest, as opposed to another joint venture partner. 116 Other than to submit that the primary judge made the same error in applying the principles to the initial investment as was made with respect to the Exhibition Street Property claims, Hylepin did not develop its submissions. It contended only that whilst the breach of duty claim would not sound in any relief, it remained relevant to the oppression claim. 117 The respondents, however, directed some attention to this issue during the hearing. 118 The respondents submitted that the findings about the initial investment reveal three features that tell against any conflict of interests: first, the arrangement was a joint venture between Doshay and Global Crest; second, and therefore, the interests of both Doshay and Global Crest were aligned; and third, at the relevant time there was no factor that might sway John So's interests, having regard to the alignment of interests. 119 The respondents submitted that the alignment of interests and absence of any swaying factor stand in contradistinction to the position at the later time of the share acquisition, when, as the trial judge found (at [196]), John So caused Doshay to pay $159,197 to buy out Global Crest's shares and loan interests in Evaluator. It followed, on the respondents' submission, that at the later time the interests were not aligned in that, because there was a benefit to Global Crest in having its loans repaid, given that Evaluator was by then a loss-making business and John So had an interest in Global Crest. The respondents contend that the contrast in findings reveals the proper appreciation of and application of the conflict test by the primary judge. 120 We accept the respondents' submissions. The submissions reflect the primary judge's reasoning and findings at [333]. The primary judge's analysis identifies the potentially competing interests but then explains why the transaction was clearly in Doshay's interests, in that it would protect its Dragon Boat Restaurant business and Doshay would have the assistance of Global Crest. Nothing in those matters points to any non-alignment of interests. As the transaction was so clearly in Doshay's interests, the primary judge considered it was the type of transaction that Doshay would have entered into even without any joint venture party. The conclusion reinforces the absence of any conflict arising from the fact that John So also had an interest in Global Crest. No error is disclosed and we would dismiss ground 7.

Scope 121 The second group of appeal grounds relate to oppression: whether the primary judge properly applied the principles relating to oppression; and whether the primary judge took into account the relevant aspects of the oppression claim, individually or cumulatively. Hylepin submitted that the relevant pleading was para 102 of the Third ASOC, which referred to conduct being oppressive to, or unfairly discriminatory against Hylepin within the meaning of s 232(e) of the Corporations Act.

Principles 122 Section 232 of the Corporations Act provides: The Court may make an order under section 233 if: (a) the conduct of a company's affairs; or (b) an actual or proposed act or omission by or on behalf of a company; or (c) a resolution, or a proposed resolution, of members or a class of members of a company; is either: (d) contrary to the interests of the members as a whole; or (e) oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a member or members whether in that capacity or in any other capacity. 123 The 'affairs' of a body corporate are described broadly, including for the purpose of s 232 and s 233, in s 53 of the Corporations Act. Those affairs include the formation, membership business, transactions and dealings, property, profits and liabilities of the company (s 53(a)); the internal management of the company (s 53(c)); the ownership of shares in the body (s 53(e)); the powers of person to exercise voting rights (s 53(f)); and the circumstances of the acquisition or disposal of shares in the body (s 53(h)). 124 The primary judge commenced a review of the oppression principles under s 232(e) by noting that 'oppressive to, unfairly prejudicial to, or unfairly discriminatory against' is a compound expression: Hillam Ample Source International Limited (No 2) [2012] FCAFC 73; (2012) 202 FCR 336 at [4]. 125 His Honour referred to In the Matter of Ledir Enterprises Pty Ltd [2013] NSWSC 1332, where Black J observed at [178], and having referred to various authorities including Wayde v New South Wales Rugby League Ltd (1985) 180 CLR 459, that the phrase in s 232(e) is concerned with 'commercial unfairness'; or 'a departure from the standards of fair dealing, or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair'. 126 The primary judge cited the statement of Brennan J in Wayde (at 472-473) that the relevant test as to unfairness in the context of oppression is 'whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision'. Whether there has been unfairness in the requisite sense is to be judged objectively: Wayde at 472-473. To those references we would add that the section requires proof of oppression or proof of unfairness. Proof of mere prejudice to or discrimination against a member is insufficient to attract the court's jurisdiction to intervene: Wayde at 472. 127 His Honour also cited the test as to unfairness as described in Catalano v Managing Australia Destinations Pty Ltd [2014] FCAFC 55 at [9], being whether 'objectively in the eyes of a commercial bystander, there has been unfairness, namely conduct that is so unfair that reasonable directors who consider the matter would not have thought the decision fair'. 128 It was noted that mismanagement alone does not constitute oppression, and a court is concerned 'to avoid an unwarranted assumption of the responsibility for management of the company': Wayde at 467 (Mason ACJ, Wilson, Deane and Dawson JJ). 129 Turning to s 232(d), the primary judge said that whether conduct is 'contrary to the interests of the members as a whole' is also objectively ascertained, citing Goozee v Graphic World Group Holdings Pty Ltd [2002] NSWSC 640 at [42]-[44], and is determined by an assessment of whether the conduct adheres to 'accepted standards of corporate behaviour' or is in accordance with how reasonable directors would act in attending to the affairs of the company. 130 Further, the primary judge noted that although s 232 is not subject to any limitation period, and a court may grant relief even if the oppressive conduct has ceased, a court has a broad discretion as to remedy, citing Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [65] (French CJ), [182] (Gummow, Hayne, Heydon and Kiefel JJ). 131 The parties did not challenge the primary judge's summary of the principles. 132 However, another line of cases requires some attention. Hylepin contended on the appeal that it is well established that while separate instances of conduct on their own may not be unfair, cumulatively they may constitute oppression, citing Grego v Copeland [2011] VSC 521 at [47]; Vigliaroni v CPS Investment Holdings Pty Ltd [2009] VSC 428 at [84]; John J Starr (Real Estate) Pty Ltd v Andrew (Australasia) Pty Ltd (1991) 6 ACSR 63 at 72; and Aqua-Max Pty Ltd v MT Associates Pty Ltd [2001] VSCA 104 at [61]. 133 It can be accepted that findings as to oppressive conduct may be founded on a whole course of conduct. In Aqua-Max, the Court of Appeal observed that: [61] …There are numerous cases which look to the effect (including the cumulative effect of all the various pieces of unfairness) independently of the question whether the alleged oppressor's actions are legal or comply with the article of association … 134 Where a course of conduct is relied upon, it is appropriate to have an overview. In John J Starr (Real Estate), Young J said at 72 that: Although in this sort of case one needs to have an overview, and sometimes a series of a relatively minor matters can add up to oppressive conduct, I think the way to deal with the evidence is … to deal with each of the 16 counts and then draw the various threads together. 135 In each of the cases upon which Hylepin relied as to cumulative conduct, at least one of the instances of separate conduct relied upon was found independently to be oppressive: Grego v Copeland at [56]-[60]; Vigliaroni at [70]-[84]; John J Starr (Real Estate) at 72 (and where the cumulative effect of the conduct was 'sufficiently serious' to amount to oppression); and Aqua-Max at [168]-[171]. 136 We accept, however, that depending on the circumstances, an accumulation of conduct, even where none of the separate matters of conduct is found to be oppressive, may have that result.

Framework of the primary judge's reasons 137 The oppression claim is not to be considered in isolation. The primary judge considered the oppression claim after having made findings as to the breach of fiduciary duty claims, findings which therefore informed the consideration of the oppression claim. It is appropriate to record the framework of the primary judge's reasons in order to understand the manner in which his Honour dealt with the oppression claim. 138 The reasons were organised into seven parts, Parts A to G inclusive. The starting point is Part A of the reasons, being the 'Introduction'. At [4]-[11] of the reasons his Honour lists the six impugned transactions (extracted at [12] above). Immediately following, his Honour said: [12] The proceeding was commenced by Hylepin on 15 December 2016. At that time, the proceeding was brought under ss 232 and 233 of the Corporations Act 2001 (Cth) (Corporations Act), alleging that the conduct of the affairs of Doshay (as summarised above) has been either contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, Hylepin. Hylepin seeks relief under s 233 of the Corporations Act, including that Doshay declares and pays a dividend, John So or Doshay buy Hylepin's shares at fair value (that is, at a price that removes the effect of the oppression), or alternatively that Doshay be wound up. [13] On 23 October 2018, the Court gave Hylepin leave pursuant to ss 236(1) and 237(1) of the Corporations Act to intervene in the proceeding in the name of Doshay to bring and prosecute derivative claims against John So for breach of fiduciary duty in respect of the transactions summarised above (other than the non-payment of dividends), and against Global 2000 and Wendy Cheng for their knowing involvement in the breaches and receipt of trust property. In that respect: (a) The claims against John So relate to each of the impugned transactions. The relief sought against John So includes the payment of equitable compensation, a declaration that the one share in Global 2000 registered in the name of John So is owned by Doshay and orders to correct the register of Global 2000. (b) The claims against Global 2000 principally relate to the acquisition of the Exhibition Street Property and the Lonsdale Street Property. The relief sought includes declarations of trust over the Exhibition Street and Lonsdale Street Properties in favour of Doshay and that the properties be transferred to Doshay or orders that Global 2000 account to Doshay for benefits derived. … (emphasis added) 139 The primary judge also set out his conclusions as to liability in Part A as follows: [19] For the reasons stated below, I have upheld one of Hylepin's claims but dismissed all other claims. The claim I have upheld does not involve any breach of fiduciary duty or oppression. It is the fourth claim made by Hylepin, that in May 2004 John So wrongly caused Global 2000 to alter its register of members to show that Doshay owns four shares and John So owns one share in Global 2000. I have found that John So transferred his share in Global 2000 to Doshay on 15 June 2000 and that the subsequent instructions given by John So to Paul Tjioe & Associates in 2004 to alter the share register and effectively cancel that transfer were erroneous and of no legal effect. [20] Otherwise, I reject Hylepin's claims against the defendants based on breach of fiduciary duty and oppression. The evidence shows that, at the invitation of John So, Hylepin subscribed for 45,000 shares in Doshay in 1987 at an issue price of $1.00 per share, being an investment of $45,000. Hylepin has generally been a passive investor in Doshay. Between 1987 and the date of trial, a period of more than 30 years, John So has been a director of Doshay and general manager. He has undertaken many business investments on behalf of Doshay. Some have been successful. Some have been unsuccessful. However, as at February 2018, Mr Greg Meredith of Ferrier Hodgson assessed the value of Doshay at $16,865,647. If that valuation was adopted, Hylepin's shareholding in Doshay would be worth approximately $2,735,000, giving an annualised rate of return on investment (taking account of compounding) between November 1987 and February 2018 of approximately 21%. In my view, Hylepin's complaints about John So's conduct in relation to Doshay rely on hindsight, are selective and fail to take account of all the relevant facts and circumstances. In almost all instances, I reject the contention that John So breached his fiduciary duties by making decisions with a conflict of interest or from which he would personally benefit. In all instances, I reject the contention that John So acted dishonestly or concealed his wrongdoing. To the contrary, I find that John So caused his accountant, Paul Tjioe & Associates, to keep accurate accounts for Doshay and all of its associated entities, and that the financial statements for Doshay were made available to Hylepin. Even if I had upheld any of the claims made by Hylepin, I would have barred the claims by application of limitation periods. I also reject the contention that the affairs of Doshay have been conducted oppressively. (emphasis added) 140 In Part B of the reasons the primary judge collected the principles with respect to oppression and breach of fiduciary duty. His Honour reiterated that 'Hylepin's case in oppression is based on the impugned transactions summarised above': at [23]. 141 In Parts C and D of the reasons the primary judge provided an overview of the evidence and made factual findings. 142 In Part E of the reasons the primary judge dealt with John So's alleged breaches of fiduciary duty to Doshay. Relevantly, the primary judge recorded that: [274] Hylepin alleged that John So breached his fiduciary duties in causing Doshay to engage in the following transactions: (a) making share and loan investments in Dragon Boat Knox [Lyleable], Dragon Boat Palace [Jadetrex] and Dragon Wall and its loan investments in the Westlake Restaurant; (b) using its assets to acquire or invest in the Exhibition Street and Lonsdale Street Properties; (c) making share and loan investments in Evaluator; (d) causing Global 2000 to correct its register of members and lodge a form with ASIC to show that Doshay owns four shares and John So owns one share in Global 2000 when Doshay owned five shares in Global 2000; and (e) resolving not to exercise the option to renew the lease of the premises at which the Dragon Boat Restaurant conducts business. 143 His Honour then said: [279] In what follows, I explain my reasons for concluding that John So did not breach his fiduciary duties to Doshay in the manner alleged by Hylepin, save in one respect. I also explain my reasons for concluding that, even if John So had breached his fiduciary duties, I would bar Hylepin's claims applying the six year statutory limitation period for breach of directors' duties by analogy. Reliance by John So on the statute would not be unconscionable, as in my view none of the impugned transactions involved fraud, in the sense that there was a consciousness on the part of John So that what was being done was wrong or involved wrongdoing, and none of the impugned transactions were fraudulently concealed by John So. [280] I note for completeness, however, that I am not satisfied that the defence of 'informed consent' is made out on the evidence. As stated earlier, I am satisfied that John So consulted with the shareholders of Doshay, including Celia Chan on behalf of Hylepin, in an ad hoc manner as circumstances and convenience allowed. I am satisfied that such occasions would have occurred at Sunday night dinners at the Dragon Boat Restaurant from time to time, and through other informal meetings between John So and the shareholders. I am also satisfied that John So did not conceal Doshay's financial statements from the shareholders and that the financial statements were provided to the shareholders. The financial statements recorded the impugned transactions. However, I am not satisfied on the totality of the evidence that John So sought or obtained the informed consent of the shareholders to the various business transactions he undertook on behalf of Doshay, in the sense of explaining all of the details of the transactions before they occurred. Rather, I consider that John So kept the shareholders broadly informed of the transactions that were undertaken, and ensured that the financial statements were accurately prepared. 144 The primary judge then proceeded to examine each of the five impugned transactions summarised at [274] of the reasons and that Hylepin asserted to have involved a breach of duty by John So. Some of those transactions have been addressed in detail above. 145 In Part F of the reasons, the primary judge turned to Hylepin's oppression claim. Part F is short, comprising five paragraphs. His Honour stated: [359] Hylepin also alleges that the conduct of the affairs of Doshay has been either contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or unfairly discriminatory against, Hylepin. The conduct the subject of the oppression claim is the same as the conduct the subject of the fiduciary duties claim, but also includes the alleged failure to pay dividends. [360] It follows from my conclusions with respect to the fiduciary duties claims that I do not consider that the impugned transactions were oppressive. As stated earlier, the statutory phrase 'oppressive to, unfairly prejudicial to, or unfairly discriminatory against' in 232(e) of the Corporations Act is concerned with conduct that involves commercial unfairness or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair. Mismanagement or poor management alone does not constitute oppression. As explained above, in my judgment the impugned transactions were not uncommercial or improper. They were undertaken with the aim of increasing the value of Doshay, recognising the risks associated with all business ventures. Some of the transactions turned out to be profitable. Some turned out not to be profitable. They did not involve statutory oppression. Although I have found that Doshay's decision to buy out Global Crest's interest in Evaluator to be a breach of fiduciary duty, I do not consider that that one transaction constitutes statutory oppression. [361] In that respect, I reiterate that I do not accept Hylepin's contention that it was kept in the dark about Doshay's business affairs. This is not a case in which an investor, believing that it had invested in a particular type of investment (a Chinese restaurant) had its investment funds redeployed to other business ventures without its knowledge. I have found that Peter Chan received and approved Doshay's financial statements for FY1988, FY1989 and FY1990 in his capacity as director of Doshay, which disclosed a number of the investments undertaken by Doshay which are the subject of allegations in this proceeding. I have also found that, in the period to about 2008, John So consulted with the other directors and shareholders, including Celia Chan on behalf of Hylepin, in an ad hoc manner as circumstances and convenience allowed. In mid 2004, Hylepin's accountants received Doshay's income tax returns and financial statements for FY1999 to FY2003 which disclosed Doshay's investments in, and loans to, the various entities that are the subject of challenge in these proceedings. (emphasis added) 146 At [362], the primary judge rejected a claim that Doshay's dividend policy was oppressive, a matter not agitated in the appeal. 147 In the final paragraph of Part F, at [363], his Honour referred to the relief sought by Hylepin with respect to the oppression claim, and its pursuit of an order that Doshay buy back, or John So acquire, Hylepin's shares at fair value, noting that Doshay had made two offers to buy back Hylepin's shares during the proceeding but both had been rejected, a matter the primary judge relied on as further negating any suggestion of oppression. 148 And so it is against that background that it is necessary to consider whether the primary judge took into account all aspects of Hylepin's oppression claim upon which it relied. 149 Some aspects of the oppression claim were of more relevance on the appeal than others. In particular, Hylepin asserted that the primary judge at [360] of the reasons 'lumped [the conduct] together' and made findings in relation to some transactions only. It asserted that his Honour failed to make oppression findings in respect of the Exhibition Street Property acquisition or John So's asserted ownership of the Global 2000 share. The assertions rest in part on the alleged failure of the primary judge to consider whether conduct was 'uncommercial', a test relevant to the question of oppression but, it was submitted, not relevant to the breach of fiduciary duties claim. 150 We will deal with the elements of the oppression claim in the order in which they were dealt with by counsel for the parties during the hearing: (1) the Exhibition Street Property allocation of shares in Global 2000 (ground 1); (2) John So's assertion of share ownership in 2004 (grounds 1 and 2); (3) Doshay's buyout of Global Crest's interests in Evaluator (ground 3); (4) the Jadetrex and Lyleable loans (ground 1); (5) the failure to renew the Dragon Boat Restaurant lease (ground 1); and (6) the alleged failure to acknowledge the cumulative effect of the conduct (ground 1).

Exhibition Street Property - allocation of shares 151 We have already addressed the facts relating to the acquisition of the Exhibition Street Property by Global 2000. 152 Hylepin emphasised on appeal that the oppressive conduct on which it relies is an asserted disproportionately small allocation to Doshay of the shares in Global 2000. Hylepin expressly disavowed reliance on the acquisition of the Exhibition Street Property itself or the decision that Doshay would acquire shares in Global 2000 as oppressive, focussing on the share allocation. 153 However, as the primary judge observed, all of the various steps along the way were part of the analysis of the transaction, from the opportunity presented to John So, to the incorporation of Global 2000 effectively as a joint venture company between Doshay and Global Crest, to Global 2000's nomination as purchaser and to the completion of the purchase of the property: reasons at [317]. 154 The primary judge was without question aware of the history of the share allocation, having by the point in the reasons where oppression was considered already carefully reviewed those circumstances for the purpose of the factual findings (at reasons Part D.11, [219]-[234]) and in the context of the breach of fiduciary duty claims (at [342]-[345]), and having found that the Global 2000 share register should be rectified. 155 Relevantly, the primary judge found on the evidence (at [222]-[231]) that: (a) Global 2000 was incorporated on 12 May 2000 and became the nominee purchaser of the Exhibition Street Property; (b) it originally had only one issued share which was transferred to John So on that date, such that John So was then the sole shareholder and also the sole director; (c) on 15 June 2000 Doshay applied for the issue of four ordinary shares and Global Crest applied for the issue of five ordinary shares; (d) on the same day, John So executed a share transfer form transferring the one ordinary share in Global 2000 held by him to Doshay; (e) a minute of a director's meeting held that day and signed by John So approved the allotment and transfer of shares; (f) the register of members of Global 2000 was updated to record that each of Doshay and Global Crest held five ordinary shares in Global 2000; (g) Global 2000 filed ASIC annual returns for FY2000, FY2001 and FY2002 signed by John So which all indicated that Doshay and Global Crest each held five ordinary shares in Global 2000; (h) however, on 31 May 2004 Global 2000 filed notices of correction with ASIC in respect of the FY2000, FY2001 and FY2002 annual returns, stating that the shares in Global 2000 were held by Global Crest as to five shares, Doshay as to four shares and John So as to one share; (i) the register of members of Global 2000 contains hand written amendments that ruled a line through the transfer of share from John So to Doshay; and (j) there were also financial statements for Doshay in FY2001 (signed by Paul Tjioe on 18 October 2002), FY2002 (signed by Mr Tjioe on 15 August 2003) and FY2003 (signed by Mr Tjioe on 10 December 2004) which showed that Doshay held four shares in Global 2000. 156 The primary judge considered evidence from John So, Mr Tjioe and Wei Win Yu as to the number of shares held by Doshay at various times. Both Mr Tjioe and Mr Wu were accountants at Paul Tjioe and Associates. 157 Mr Tjioe acted as John So's accountant from about 1986 and also provided accounting services to companies related to John So, including Doshay and Global 2000. Mr Tjioe said that he prepared the minutes of 15 June 2000 that referred to the allotment and transfer of shares, and most likely on instructions from John So over the phone. He recalled that sometime in 2004 he received a phone call from John So asking about what happened to his one share in Global 2000. Sometime later Mr Tjioe showed John So the minutes and John So said that the resolution was a mistake. John So instructed him to correct the error, which he did by correcting the annual returns: reasons at [229]. 158 Mr Yu deposed to making the entry in the Global 2000 register of members that included the transfer of John So's share to Doshay, and, following instructions from Mr Tjioe in 2004, correcting the register by ruling a line through that transfer: at [230]. 159 John So claimed in his evidence that he signed documents bringing about the transfer of his one share in Doshay by mistake. He did not deny signing them. In support of his conviction that he continued to own one share, he relied on Doshay's financial statements for FY2001, FY2002 and FY2003 which showed that Doshay held fours shares in Global 2000. He did not recall the ASIC annual returns for Global 2000 for FY2000, FY2001 and FY2002 which showed that Doshay held five shares in Global 2000: at [228], [231]. 160 The primary judge determined that: [232] … the evidence establishes that John So transferred his share in Global 2000 to Doshay on 15 June 2000 and that Doshay holds five ordinary shares in Global 2000. While John So said that he did not recall the share transfer form, he did not deny that the share transfer form was a valid document signed by him. Nor did he deny that he signed the minutes of a director's meeting on 15 June 2000 approving the transfer of shares. Nor did he deny that he signed the ASIC annual returns for Global 2000 for FY2000, FY2001 and FY2002 which showed that Doshay held five shares in Global 2000. I do not accept John So's evidence that all of those documents were signed by him by mistake. In those circumstances, I find that the share transfer was validly effected. It follows from that finding that John So's subsequent instructions to Paul Tjioe that the share transfer was executed by mistake is an incorrect statement and has no legal effect. 161 The primary judge was not satisfied that John So's instructions to Mr Tjioe to amend the register in 2004 were dishonest, stating: [233] … However, having regard to the seriousness of the allegation, I am not persuaded that John So acted dishonestly, that is with a consciousness of wrongdoing or falsity, when he gave instructions to Paul Tjioe. In that respect, it is significant that Doshay's financial statements in FY2001 (signed by Paul Tjioe on 18 October 2002) and FY2002 (signed by Paul Tjioe on 15 August 2003) recorded that Doshay held four shares in Global 2000, rather than five shares. Those documents make plausible that, in 2004, John So held the honest but erroneous view that the transfer of his share in Global 2000 to Doshay was unintended. 162 Further, the primary judge declined to make a finding that John So dishonestly concealed the share transfer from June 2000. The share transfer was produced only in September 2019, during the trial. The primary judge observed that the share transfer was produced by Mr Yu, who said he had had not found it when producing the share register but later found it in a Global 2000 file maintained by Paul Tjioe & Associates. The primary judge held that the evidence did not disclose dishonesty: at [234]. 163 There are two matters in particular to note from the primary judge's findings as to the Exhibition Street Property relevant to the oppression claim. 164 First, the findings of the primary judge indicate that John So proceeded with the acquisition of the Exhibition Street Property on 15 June 2000 in circumstances where Doshay and Global Crest received the same number of shares in Global 2000. The evidence does not establish that John So set out to create any imbalance in favour of Global Crest or himself. It was not until 2004 and the filing of the notices at ASIC that he purported to disavow that Doshay held five shares, but even then in circumstances that the primary judge found did not amount to any breach of fiduciary duty and did not establish dishonesty. The question of commercial unfairness or disadvantage at the time of the acquisition is to be considered having regard to circumstances where Doshay received five shares. 165 Second, the findings as to the share allocations are not to be considered in isolation, but having regard to the broader Exhibition Street Property transaction in which Doshay also participated as a lender (as already discussed above). His Honour had separately considered in Part B.5 of the reasons matters relating generally to the various loan transactions made by Doshay, and had concluded that: [61] … each of the advances of money by Doshay had the potential to improve Doshay's financial position for the benefit of its shareholders. The fact that, in some cases, that did not occur does not alter the character of the original transaction … 166 Reference to the advances having the aim of improving Doshay's position is repeated in the primary judge's conclusion at [360] (extracted above) that the transactions were not uncommercial or improper and did not involve statutory oppression. 167 Hylepin asserts that the primary judge addressed only John So's motive as to the share allocation and whether or not his conduct was improper, and did not make a finding that the allocation was not uncommercial or imposed no unfair disadvantage. 168 In our view, and for the following reasons, it can be seen that the primary judge recognised and applied the principles as to statutory oppression in the context of the Exhibition Street Property acquisition, including the initial share allocation. 169 It can be accepted that the primary judge did not provide separate reasons relating to each example of conduct said to have been oppressive. It can also be accepted that the section of the reasons that specifically addresses the oppression claims, Part F, is short. Indeed, there is some force in the respondents' submission that Hylepin's submission before the primary judge perhaps led his Honour to consider that it was neither efficient nor necessary to tease out every aspect of the oppression claim once the breach of duty claims were considered (we reproduce an extract from the transcript at [200] below). 170 However, and regardless, the reasons must be read as a whole. The primary judge observed from the commencement of the reasons that Hylepin's claims based on oppression are rejected: at [20]. Part F dealing with oppression follows Part E, where the primary judge had already made detailed factual findings and determined the breach of fiduciary claims, claims which rest on overlapping facts. 171 His Honour made specific findings as to elements of the transaction that are objectively relevant not only to the breach of duty claim but also the oppression claim, including: that John So obtained the opportunity to invest in the Exhibition Street Property in his own name (reasons at [314], [317]); that John So had no obligation to extend the opportunity to Doshay to invest in the acquisition (at [315]); that the advances were undertaken with the aim of improving Doshay's financial position (at [360]); that there was no criticism made of John So as a director of Doshay to take up the opportunity to invest and acquire the shares in Global 2000 (at [315]); that Doshay earned interest on its loan to Global 2000, whereas there was no evidence that Global Crest or John So were paid interest, and John So provided a guarantee (at [319]); and that although there was an imbalance in terms of financial contribution by Doshay and Global Crest and John So, the financing arrangements at the time of the acquisition had aspects that favoured Global Crest and aspects that favoured Doshay (at [319]-[320]). 172 It is also relevant to, and tells against, any finding of oppression that the primary judge found no conflict of interest or duty in providing the opportunity to Doshay to acquire a 50% interest in the property: at [315]. 173 The finding that John So kept the shareholders broadly informed of the transactions that were undertaken, did not conceal Doshay's financial statements from them, provided them to the shareholders and ensured that the financial statements were accurate is also relevant to any consideration of oppressive conduct of the affairs of Doshay: at [280]. 174 The primary judge stated that it follows from the conclusions with respect to the fiduciary duty claims, claims based on the same facts, that the impugned transactions were not oppressive: at [360]. His Honour expressly found the impugned transactions were not uncommercial, utilising the language of s 232(e) of the Corporations Act. It was not necessary in order to properly deal with Hylepin's claim to repeat the factual findings. Further, it is clear from the factual findings that his Honour considered the commercial consequences of the transactions when dealing with the breach of fiduciary claim: so much is apparent from the findings referred to at [171] above. 175 Hylepin did not explain in any real detail the basis upon which it submitted that the share allocation to Doshay imposed a disadvantage or was uncommercial or improper. The submission, at its highest, was that the shares in Global 2000 were not allocated in a manner proportionate to the lending by each of Doshay, Global Crest and John So. Hylepin also relied on a statement by the primary judge that John So's conduct resulted in an ownership 'imbalance in favour of Global Crest', asserting that it significantly disadvantaged Doshay. 176 The submission, focussing as it does on the loans at the time of the acquisition, does not accurately reflect the primary judge's finding. His Honour referred to the imbalance in the amount of financial contribution but importantly then noted, conversely, that the arrangements involved elements that favoured Doshay: reasons at [319]. The primary judge squarely addressed the 'imbalance' issue. So much is implicit in his Honour's reference to John So providing a personal guarantee, and in his finding that 'the financing arrangements at the time of the acquisition had aspects that favoured Global Crest and aspects that favoured Doshay'. His Honour weighed up the various elements of this particular transaction, before concluding that for the reasons 'as explained above' the impugned transactions were not uncommercial or unfair: reasons at [360]. 177 Hylepin has not established how any of the findings of his Honour ought to result in a finding that Doshay or its shareholders were disadvantaged by the Exhibition Street Property transaction. There was nothing to suggest Doshay was denied a particular opportunity to invest on more favourable terms. There was nothing to suggest the loans it extended were high risk or would not be repaid. There was nothing to suggest the investment was not a good investment. In circumstances where it had no right to invest, but was provided with an opportunity to invest as a 50% shareholder, where the transaction was undertaken by Doshay with the aim of increasing its value and where the other investors also contributed in different ways, we do not consider that Hylepin established that there was any conduct relating to the investment in the Exhibition Street Property through Global 2000 that could properly be described as oppressive. 178 Having regard to the reasons as a whole, the primary judge's correct understanding of the principles as to oppression and the clear findings of fact that are relevant not only to breach of duty but also to oppressive conduct, we do not accept that he failed to consider the Exhibition Street Property transaction as an integer of the oppression claim or as oppressive in itself. Nor do we consider the primary judge erred in rejecting Hylepin's claim that the relevant transaction was oppressive.

John So's 2004 alteration of the share register for Global 2000 - ground 2 179 Hylepin contended by grounds 1(b) and ground 2 of the notice of appeal that the primary judge erred in failing to find that John So's conduct in changing Global 2000's share register in 2004 and so purporting to reduce Doshay's shareholding from five shares to four shares was oppressive. The primary judge found that in May 2004 John So wrongly caused Global 2000 to alter its register, and found that the claim did not involve 'any breach of fiduciary duty or oppression': reasons at [19]. But Hylepin contends that no reason for the finding of an absence of oppression is disclosed, and that the general finding to the effect that all the impugned transactions were undertaken with the aim of increasing the value of Doshay (at [360]) could not apply to the reduction in Doshay's shares in Global 2000, because such reduction decreased Doshay's value. 180 The respondents contended that this claim did not form part of Hylepin's pleaded case and was not relied upon in support of its oppression claim, and that the absence of detailed reasons as to that aspect of the impugned transactions is explicable on that basis. They denied it was open to Hylepin to advance the claim on appeal. 181 In our view, although the matter was pleaded, it was not sufficiently raised by Hylepin before the primary judge, a position that explains the absence of any reasons that focus in detail on the 2004 transaction in the context of oppression. The primary judge did not have the benefit of any fully developed submissions on the point and to the contrary, Hylepin's submissions suggested that despite the pleading, Hylepin sought to rely on the change to the share register in 2004 as part of its derivative claim for breach of fiduciary duty only. In our view, the fact that the primary judge dealt with the matter in only a cursory manner is a product of the manner in which Hylepin addressed the matter before his Honour, and reveals no error. 182 The starting point is the introduction of the relevant pleading. 183 The Third ASOC was filed on 12 September 2019 (shortly after the trial commenced), although it seems it was anticipated shortly before the trial, a matter referred to by the primary judge: reasons at [220]. The Third ASOC relevantly introduced the following claims in the part of the pleading that collected a series of impugned conduct: D.3A Alteration of Doshay's Registered Shareholding in Global 2000 53A By each of Global 2000's Annual Returns for 2000, 2001 and 2002 lodged with ASIC, Mr So accurately declared that Global 2000's shares were held as follows: (a) 5 ordinary shares (50%) owned by Doshay; and (b) 5 ordinary shares (50%) owned by Global Crest. 53B. On about 31 May 2004, Mr So caused Global 2000 to lodge Notification of Corrections forms with ASIC which wrongly purported to correct Global 2000's Annual Returns for 2000, 2001 and 2002 by amending its list of members to record that: (a) 4 ordinary shares (40%) are owned by Doshay; (b) 5 ordinary shares (50%) are owned by Global Crest; (c) 1 ordinary share (10%) is owned by Mr So. 53C. Mr So engaged in the conduct in paragraph 53B: (a) without the knowledge or consent of Doshay; (b) for his own benefit and/or the benefit of Global 2000 and/or the benefit of Ms Cheng; and (c) at the expense of Doshay and/or Hylepin. 184 This pleaded conduct on the part of John So is then referred to in two further amendments. Relevantly, under a heading 'Oppression', Hylepin lists nine matters in para 102 of the pleading said to have been 'together and in any combination' conduct of the affairs of Doshay that was oppressive to, or unfairly discriminatory against Hylepin within the meaning of s 232(e) of the Corporations Act. Further, it is pleaded that by those matters 'together and in any combination with' John So causing Doshay to loan funds to Evaluator, the conduct of the affairs of Doshay was contrary to the interests of the members of Doshay as a whole within the meaning of s 232(d). 185 One of the nine matters inserted by the Third ASOC (by a new para 102(l)), was: Mr So causing Global 2000 to lodge the Notification of Corrections forms with ASIC wrongly purporting to reduce Doshay's [shareholding] in Global 2000 from 50% to 40% and to increase his own shareholding from nil to 10% as alleged in paragraphs 50A to 50C and 53A to 53C. 186 For completeness, paragraphs 50A to 50C as referred to in para 102(l) plead relevantly that at all times since 15 June 2000, Doshay has been the owner of 50% of the shares in Global 2000, John So having transferred his one share in Global 2000 at that time to Doshay. 187 Further, under the heading 'Breach of Fiduciary Duties', the same pleaded conduct extracted at [183] above was introduced by the Third ASOC as subparagraph 105(h), and relied upon as a matter by which John So was alleged to have breached fiduciary duties. 188 Therefore, on the face of the pleading the conduct is raised with respect to both the alleged breach of fiduciary duty and oppression. However, Hylepin's closing written submissions make no reference to the alteration of the share register for the purpose of any oppression claim. The conduct is referred to, but only in a section where Hylepin submitted that the transfer was wrongful and was of no legal effect. Hylepin framed its claim for relief in these terms: In these circumstances, Hylepin brings a derivative action on behalf of Doshay, seeking: (a) a declaration that at all times since 15 June 2000, Doshay has been the owner of 5 ordinary shares (50%) in Global 2000; and (b) an injunction requiring that Mr So and/or Global 2000 do all things necessary to ensure that the register of members of Global 2000, and ASIC's records in relation to Global 2000, record that, at all times since 15 June 2000, Doshay has been the owner of 5 ordinary shares (50%) in Global 2000. 189 The closing submissions then note that if the primary judge were to find that a constructive trust existed over the Exhibition Street Property and Lonsdale Street Property, then a declaration and mandatory injunction would be otiose. Therefore, it only sought that relief if the beneficial ownership of the Exhibition Street Property and Lonsdale Street Property remained with Global 2000. 190 The manner in which the share register alteration is dealt with in the written closing submissions may be contrasted with parts of those same submissions that dealt with other conduct that was impugned on the basis of alleged oppression, and clearly exposed such claim. For example: (a) under the heading 'Acquisition of the Exhibition Street Property', Hylepin explained the basis upon which it contended that the conduct relating to that transaction amounted to statutory oppression. It highlighted, amongst other things, using Doshay's funds as a deposit, the nomination of Global 2000 as the purchaser and the using of Doshay's financial position and performance to secure the mortgage as conduct relevant to the statutory oppression claim; (b) under the heading 'Acquisition of the Lonsdale Street Property', and after setting out its understanding of the narrative, Hylepin submitted that 'Mr So has preferred the interests of himself and Global 2000 ahead of that of Doshay and conducted the affairs of Doshay in a manner which was oppressive of and unfairly prejudicial to Hylepin …'; and (c) there is also reference to oppression in the submissions relating to the provision of funds to Global 2000 and other restaurants, the Evaluator transaction, and the matter of the non-exercise of the option to renew the lease. 191 In our view, the written closing submissions do not disclose or signpost any reliance on the 2004 alteration of the share register as conduct amounting to statutory oppression. At its highest, the conduct might be said to have been subsumed in a concluding paragraph relating to 'cumulative oppression', which referred to the 'abovementioned instances of conduct' to found a statutory oppression claim. The concluding paragraph of the submissions reads: 365. Whether or not the Court finds that the abovementioned instances of conduct individually amount to oppression within the meaning of s 232 of the Corporations Act 2001, [it is] clear that the cumulative effect of the conduct was contrary to the interests of the members as a whole, further and alternatively, was oppressive to, or unfairly discriminatory against Hylepin, within the meaning of s 232 (d) and (e) of the Corporations Act. The overwhelming effect of the transactions, as a whole, has been the removal of vast sums of Doshay's money and deposit of those funds with entities associated with Mr So. In this regard, it is obvious that Mr So has failed to have adequate regard to the interests of Doshay's shareholders as a whole and prioritised his family's interests at the expense of Doshay's shareholders, and in particular, Hylepin. 192 Hylepin also sought to rely on passages from the oral closing submissions which it was said disclosed its reliance on the share register alteration for the oppression claim. Senior counsel for Hylepin took the Court to parts of the transcript of the hearing before the primary judge. 193 First, Mr Dalton referred to an exchange recorded at page 723 of the transcript: MR DALTON: So in relation to the shares - now, the timing of the shares, your Honour, if I can start at the time of the notification to change the shares or to correct the register, because we say that that involved breach of duty and we say, on its correct characterisation, with all of the events that are occurring in 2004, that it is part of the conduct of Mr So which is preferring his interests over the interests of Doshay. HIS HONOUR: Is the correction of the register. MR DALTON: Yes. HIS HONOUR: Yes. MR DALTON: So - - - HIS HONOUR: I mean, it has only got one of two characterisations, hasn't it? One is that there was an error which was corrected, or the alternative is that what was … 194 Whatever immediately followed that exchange was not before this Court, but regardless, we do not discern from that exchange the identification of reliance on the share register alteration for anything but the breach of fiduciary duty claim. 195 Second, Mr Dalton referred to an exchange recorded at page 729 of the transcript: MR DALTON: In relation to the claim for oppression in relation to the claim for - and to place in context the circumstances of the acquisition of the Lonsdale Street property, we say it is relevant to a consideration of the honesty of the - of John So - and the nature and quality of the breach. What we say was occurring was that he had assigned - transferred a share of his to his wife's in Global Crest which altered his ultimate ownership of the properties and the property that was about to be bought HIS HONOUR: Yes. MR DALTON: And then, we say, at the same time, there's no difference in substance between 20 May and 31 May, that he corrected the register of - falsely corrected the register of Doshay to obtain for himself one of its shares in Global 2000. HIS HONOUR: Yes, I see. They're still quite different transactions in financial effect though, of course, aren't they, in the sense - - - 196 This passage refers primarily to oppression with respect to the Lonsdale Street Property transaction. At its highest, the reference to the share register correction might be said to follow a reference to oppression, and thereby indicate potential relevance to that ground, but the reference is oblique. 197 The primary judge considered the circumstances of the Global 2000 share register change in the context of the derivative claim and in some detail. His Honour understood that the claim was introduced as part of the derivative claim: at [13]. His Honour found that John So's conduct in that regard was not dishonest, that is, with a consciousness of wrongdoing or falsity. There were accounts of Doshay prepared by Mr Tjioe that wrongly recorded that Doshay held four shares or involved any breach of fiduciary duty, and so there was plausible basis for John So's belief. The primary judge declined to make any finding that evidence was concealed: at [232]-[234]. John So's conduct did not involve breach of duty: at [19]. 198 In our view the primary judge was cognisant of the fact that the circumstances of the change to the share register were also part of the overarching oppression claim. We have come to this view because of the primary judge's inclusive description of the conduct of the affairs of Doshay said to have been contrary to the interests of Doshay as a whole or oppressive against Hylepin (at [6]); because of the finding that the claim that was upheld with respect to the share register alteration was expressly found to have not involved breach of duty or oppression (at [19]); because the primary judge stated in introducing the part of the reasons dealing with oppression that the conduct the subject of the oppression claim is relevantly the same as the conduct the subject of the fiduciary duties claims (at [359]); and because the primary judge referred to 'his previous reasons' in finding that the impugned transactions were not uncommercial or improper (at [360]), reasons that included the primary judge's assessment of the propriety and effect of John So's conduct in altering the Global 2000 share register. 199 It may be accepted that the primary judge did not use the words 'commercial' or 'uncommercial' when making findings about the share register alteration. However, failure to use those words does not mean that the primary judge failed to have regard to the propriety of the transaction and whether it was unfairly prejudicial or otherwise comprised oppressive conduct as that phrase is understood. To the contrary, the primary judge assessed John So's honesty in that regard, found no impropriety and found no concealment of evidence about Doshay's books and accounts. In circumstances where nothing in Hylepin's written or oral closing submissions about the share register alteration identified conduct relating to the share register alteration said to be 'uncommercial' and so relevant to an oppression claim, it is hardly surprising that the primary judge did not use those specific terms. Further, the reasons are to be read as a whole, and it is clear that the inquiries and findings relating to the share register alteration were also directly relevant to the question of whether there was any improper conduct involved in the impugned transactions, a question answered in the negative (at [360]). It was open to the primary judge to adopt such findings for the purpose of the oppression claim, and in our view it is to be inferred that he did so (at [360]). Whilst it is fair to say that part of the reasoning relating to the dismissal of the oppression claim does not apply to the share register alteration (being the reference to the purpose of the impugned conduct being an increase in the value of Doshay), that was only part of the primary judge's reasoning. Other aspects, such as the absence of impropriety, remain relevant. 200 That the primary judge's treatment of the share register alteration and oppression was only at a very general level is not surprising when one has regard to a further submission made by senior counsel for Hylepin during the trial (ts 686): HIS HONOUR: Can oppression realistically give your client a remedy if I were to - I suppose it depends on the basis on which I find the breach of director's duties case to get up, but I was just trying to hypothetically think if I was to be against your client on the breach of director's duties. I was just wondering if there really is scope for oppression in terms of this aspect of the conduct. You might say unfairness is a broader concept, and then you have to look at the overall - - - … MR DALTON: Yes, it has scope to operate beyond finding of [sic] breach of fiduciary duty. But, I mean, I think in fairness - and if your Honour has found that there was no breach of fiduciary duty - - - HIS HONOUR: Yes. MR DALTON: - - - then it's unlikely to have a hell of a lot to scope to operate. … MR DALTON: That's probably correct. 201 In our view, it can readily be inferred that the primary judge, having made findings about the circumstances of the share register alteration, being aware of the pleaded case, and having regard to the lack of any substantive submissions about that same conduct in the context of oppression, considered that there was no foundation for a finding of oppression arising out of that conduct. We do not consider the primary judge erred in that regard. 202 If we are wrong in that finding, and the pleaded matter was overlooked by the primary judge, then in any event we do not consider that Hylepin established that the circumstances of the share register alteration were oppressive. In supplementary written submissions, the parties agreed that if we were to find that the primary judge had failed to have regard to that conduct for the purpose of the oppression claim, then remission to the primary judge was not required, and it was open to this Court to determine that matter on the basis of the unchallenged factual findings of the primary judge. 203 We have already referred to those findings: see [154]-[162] above. Of particular relevance is the finding of the primary judge that the contemporaneous financial statements of Doshay signed by Mr Tjioe made it plausible that in 2004 John So held the 'honest but erroneous view that the transfer of his share in Global 2000 to Doshay was unintended': at [233]. 204 Contrary to the respondents' submission, we accept that the conduct that led to an asset of Doshay (the share in Global 2000) being purportedly transferred may be considered conduct that fell within the broad definition of the 'affairs' of a body corporate for the purpose of s 232 and s 233, having regard to s 53(a) of the Corporations Act which extends to include the transactions and dealings and property of the company. That the conduct would also arguably fall within the scope of Global 2000's affairs does not prevent it from being within the scope of Doshay's affairs. 205 However, that does not assist Hylepin. We are not satisfied that any commercial unfairness arose as a result of the share register alteration. Whilst there was a period where the Global 2000 register wrongly recorded the allocation of shares, it was not established that anything flowed from that error during the intervening years until the proceedings, after which the register was corrected (as a result of the Share Declaration). Hylepin did not point to any circumstances in that period where the shareholders in Global 2000, including Doshay, stood to receive any payment or other commercial benefit calculated by reference to their proportionate shareholding. Nothing beyond theoretical prejudice by way of the appearance of a reduction in Doshay's shareholding was apparent. As explained in Wayde at 472, s 232(e) requires proof of oppression or proof of unfairness; proof of mere prejudice to or discrimination against a member is insufficient to attract the Court's jurisdiction to intervene. Whilst the conduct of John So was unfortunate and an error, we are not satisfied that it can sensibly be described as oppressive or commercially unfair, and so concur with the primary judge's conclusion in this regard. The conduct did not discriminate against any particular shareholder in Doshay. It was based on a mistaken view. Whilst it remained apparently undetected for many years, there was no evidence of prejudice suffered by Doshay as a result in the years that followed. Whilst it is not necessary to prove a dishonest intention or motive or a breach of fiduciary duty in order to establish oppression, it must also be the case that not every mistake in the management of the affairs of a company constitutes oppressive or unfair conduct. 206 Even if we had found that the conduct in altering the share register was oppressive, then we would not have granted any other or further relief. Hylepin submitted that if oppression were established, then it seeks an order under s 233 for the purchase of its shares in Doshay at fair value 'to remove the effect of the oppression'. However, the effect of such oppression could be removed simply by an appropriate declaration, the course preferred by the primary judge. It was appropriate that there be a declaration as to the correct allocation of shares in Global 2000, providing a formal pronouncement by the Court as to the existence or non-existence of a legal state of affairs: see generally Clarence City Council v Commonwealth of Australia [2020] FCAFC 134; (2020) 280 FCR 265 at [58].

Initial acquisition of shares 207 Ground 1(d) of the appeal grounds refers to the acquisition of shares in, and the transfer of funds to, Evaluator as one of the elements of the conduct of Doshay's affairs that was said to be oppressive. Neither Hylepin's written nor oral submissions addressed the acquisition, or initial investment, in the context of oppression. The submissions referred only to the buyout. Accordingly, it can be assumed that ground 1(d) is no longer relied upon by Hylepin. 208 If we are wrong about that, then we reject any contention that the primary judge failed to consider the conduct relating to the acquisition of shares in Evaluator in the context of oppression, and we reject any contention that the conduct was itself oppressive. That rejection is based upon the detailed consideration given to that transaction by the primary judge in regard to the claimed breach of fiduciary duty; the fact that matters relevant to the question of oppression were addressed; and the primary judges' conclusion at [360]. Beyond referring to those matters, and absent any submission that specifically addresses the issue, it is not for the Court to speculate as to the manner in which it is said the primary judge may have been in error.

Doshay's buyout of Global Crest's interests in Evaluator - ground 3 209 This transaction is the subject of ground 3 of the appeal, which asserts that the primary judge, having found that John So breached his fiduciary duties with respect to Doshay's buyout of Global Crest's interests in Evaluator, erred in failing to find that the conduct was oppressive. 210 It is necessary at this point to revisit [339] of the reasons, and in particular his Honour's conclusion that: For the foregoing reasons, I consider that Doshay's decision to buy out Global Crest's interests in Evaluator were not uncommercial or improper. However, in making that decision, I consider that John So was in breach of the conflict rule and the profit rule by reason of his 25% shareholding interest in Global Crest (which he held until 20 May 2004) … (emphasis added) 211 Two matters arise from the emphasised sentence. First, the reference to 'foregoing reasons' in context is a reference to the findings at [336]-[338] of the reasons, set out at [106]-[109] above, being those that supported the commercial imperative for the decision. Secondly, it is apparent that the primary judge considered whether the conduct constituted statutory oppression. So much is apparent from his reference to whether the conduct was uncommercial or improper, so adopting language relevant to statutory oppression and to which he had referred when summarising the relevant principles (for example, by reference to Wayde). It is also made express by the introductory comments at [19] of the reasons and by the conclusion at [360]: … Although I have found that Doshay's decision to buy out Global Crest's interest in Evaluator to be a breach of fiduciary duty, I do not consider that that one transaction constitutes statutory oppression. 212 Hylepin's complaint that the primary judge erred by not finding that John So's conduct constituted oppression reflects an assumption that such finding should have followed because there was a finding of breach of duty. That does not follow, having regard to principle. The elements are not the same, although there is no doubt that there may be overlap. A question in considering whether conduct is oppressive, as the primary judge acknowledged in his reasons, is 'whether reasonable directors, possessing any special skill, knowledge or acumen possessed by the directors and having in mind the importance of furthering the corporate object on the one hand and the disadvantage, disability or burden which their decision will impose on a member on the other, would have decided that it was unfair to make that decision' (see [125]-[127] above). 213 Hylepin submitted that even if there was a commercial justification for the transaction, a finding of oppression is not precluded having regard to the breach. That may be so as a matter of principle, but it is apparent that the primary judge proceeded by properly considering whether the conduct was unfair. In this regard, the following findings were relevant: that Evaluator was not worthless to Doshay; that Doshay benefited from the Evaluator lease not only by access to space but because it protected Doshay's business from the risk of another competing business next door; and that at any time Global Crest could call up its loans to Evaluator, leaving Doshay vulnerable to the potential insolvency of Evaluator and the loss of the benefits from the lease: at [337]-[338]. Nor was John So's conduct dishonest, fraudulent or fraudulently concealed: at [340]. As the respondents also submitted, John So had managed the affairs of Doshay over a long period of time. It is to be recalled that the primary judge did not consider that that one transaction constituted statutory oppression: at [360]. It can be inferred from that statement that his Honour considered any unfairness to Doshay or its shareholders relating to the buyout not in an artificially narrow context, but in the broader context of its affairs at the time. No error in that approach is disclosed. 214 Although there was a finding of breach of fiduciary duty on John So's part with respect to this particular transaction, and on this occasion he was subject to an interest that objectively swayed his position, it does not follow that no reasonable director, properly informed of Doshay's affairs and its interests in the café lease, would not have made that same decision. In our view Hylepin did not establish that viewed objectively, a reasonable director, having in mind the importance of furthering Doshay's objects on the one hand (including minimising risk to the Dragon Boat Restaurant business) and the disadvantage, disability or burden which their decision would impose on Doshay's members, would have decided that it was unfair to make the buyout decision. The decision was within the realm of management decision-making. Nor did Hylepin establish that the conduct was such as to offend against accepted standards of corporate behaviour. Viewed objectively, it can be accepted that the potential benefit to Doshay might be seen by a reasonable director to outweigh the potential risk of further financial investment, and without that decision unfairly discriminating against or unfairly prejudicing the shareholders or any particular shareholder. We are not persuaded that the primary judge erred in finding that the conduct was not oppressive. It follows that we would dismiss ground 3.

Lyleable and Jadetrex loans 215 The impugned loans to Lyleable and Jadetrex were made in the context of Doshay seeking to expand its business through franchising the 'Dragon Boat' name to other restaurants. 216 Hylepin also contends that the primary judge failed to have proper regard to these loans and that his Honour should have found that the loans contributed to and compounded conduct that, viewed cumulatively, was oppressive. It was contended that the size of the loans over time without interest indicated that they were unfair. 217 As is apparent from the summary of the various impugned transactions at [12] above, at trial Hylepin also complained about Doshay's loans to Westlake and Dragon Wall, but those loans are not relevant on the appeal. The factual matters referred to below as to the circumstances of the loans were referred to by the primary judge and not challenged.

Loan to Lyleable 218 In the case of Lyleable, in February 1989 Doshay and Lyleable entered into a franchise agreement to operate a business referred to as Dragon Boat Knox. John So signed the agreement on behalf of both Doshay and Lyleable: at [136]. 219 Doshay held a substantial shareholding in Lyleable, but shares were also held by Andy Hui (a one-time chef at the Dragon Boat Restaurant) and his family members, Wendy Cheng and certain staff of the restaurant: at [137], [147]. 220 Lyleable's annual financial statements record that Lyleable obtained loans from others including from the ANZ Bank and from its directors, although the circumstances of the various loans were not disclosed and it was unclear how they were interrelated. However, the financial statements indicate that the loan from Doshay for FY1996 shows that the loan amount was $62,775.37, and there were 'other loans' of $72,000. The most recent accounts for Lyleable, being for FY1999, showed that the loan amount from Doshay had increased to $96,561.24, while 'other loans' had decreased to $42,000: at [145]. 221 Dragon Boat Knox was not commercially successful. By FY1999 it had accumulated losses of $222,976.12. By FY2016 it had accumulated losses of $354,206. 222 The Special Referee Report noted that at its date Lyleable had negative assets and it valued Doshay's interest in Lyleable as nil (noting for completeness that the valuations were not adopted by the parties): at [146].

Loan to Jadetrex 223 In the case of Jadetrex, in March 1990 Doshay and Jadetrex entered into a franchise agreement to operate a business known as Dragon Boat Palace in Lonsdale Street. John So signed the agreement on behalf of both Doshay and Jadetrex: at [148]-[158]. 224 Doshay held shares in Jadetrex, as did certain staff of the restaurant and a company related to John So's brother. 225 Doshay's annual financial statements record that commencing in FY1990, Doshay advanced loan monies to Jadetrex. The primary judge found that in FY1990, the loan was $158,756.31. The amount of the loan peaked in FY2005 at $734,145 and, by FY2016, had been reduced to $28,445.46. Doshay's annual financial statements for FY2017 record a bad debt expense of $28,446 and the loan balance is reduced to nil, and it was inferred that the outstanding balance of the loan of that amount was written off by Doshay in FY2017: at [155]. 226 Jadetrex also obtained loans from other persons. Although no evidence was given about those borrowings, they were recorded in the financial statements of Jadetrex. For example, the financial statements for FY1996 show that while Doshay had advanced a loan of $144,145.21, Caldkone Pty Ltd (a company associated with John So) had advanced a loan of $95,526.65 and Andy Hui had advanced a loan of $30,000: at [156]. 227 The loans to Jadetrex were undocumented, unsecured and interest free: at [155]. 228 The franchised business was not commercially successful and by FY1999 Jadetrex recorded accumulated losses of $441,270.36. Accumulated losses as at FY2016 were apparently $350,946. The company was de-registered in July 2017. It is perhaps not surprising that the Special Referee Report also valued Doshay's interest in Jadetrex as nil: at [157].

Analysis 229 It can be seen that Doshay made loans to two companies that relevantly failed. The primary judge stated the following as to the Lyleable loan: [147] John So gave evidence that he considered the loan monies advanced to Lyleable were in Doshay's interests as Doshay wanted the Dragon Boat Knox restaurant to trade successfully. He said that the loan was discussed amongst Doshay's directors and shareholders, particularly between himself, Any Hui and John Kolarik. While the evidence was stated at a level of generality, I accept its broad thrust. In my view, the investments described above are not out of the ordinary and are not uncommercial. The franchise agreement shows that Doshay was seeking to expand its business by opening other 'Dragon Boat' named restaurants. Doshay held a substantial shareholding in Lyleable and would therefore benefit financially from Lyleable's success, as well as benefitting from the expansion of the 'Dragon Boat' restaurant name. Doshay shared the risk of the investment with, and provided an ownership opportunity to, key staff in Dragon Boat Knox as well as Wendy Cheng, with Caesar acquiring shares from staff over time. Neither party attempted to reconstruct the decision making that led to the loans being sought by Lyleable from year to year and advanced by the various lenders to Lyleable, including Doshay. That is not surprising given the passage of time since those decisions were made. The absence of evidence, caused in large part by the passage of time, highlights the difficulty for Hylepin in establishing, in 2019, that specific decisions made by John So on behalf of Doshay in relation to Lyleable in the 1990s and the 2000s were affected by a conflict of interest, and the unfairness to John So in seeking to show that they were not. It is impossible to know, so many years later, what financial resources were available to Lyleable from year to year, the particular decisions that needed to be made and how Doshay's interests were affected by those decisions. 230 As to the Jadetrex loan, the primary judge stated: [158] Largely for the same reasons as given with respect to Lyleable, I accept John So's evidence that he considered Doshay's loan to Jadetrex was in Doshay's interests as Doshay wanted the Dragon Boat Palace restaurant to trade successfully. As discussed in connection with Lyleable, the investments in Jadetrex described above are not out of the ordinary and are not uncommercial. Doshay franchised the use of the 'Dragon Boat' name to Jadetrex as part of Doshay's business objective of expanding its business. Doshay held a substantial shareholding in Jadetrex and would therefore benefit financially from its success, as well as benefitting from broader recognition of the 'Dragon Boat' restaurant name. Doshay shared the risk of the investment with, and provided an ownership opportunity to, key staff in Dragon Boat Palace, with Caesar and Chok Wing Cheng acquiring shares from staff over time. As for Lyleable, neither party attempted to reconstruct the decision making that led to the loans being sought by Jadetrex from year to year and advanced by the various lenders to Jadetrex, including Doshay. Again, that is not surprising given the passage of time since those decisions were made but highlights the difficulty for Hylepin in establishing that specific decisions made by John So on behalf of Doshay in relation to Jadetrex in the 1990s and the 2000s were affected by a conflict of interest, and the unfairness to John So in seeking to show that they were not. It is impossible to know, so many years later, what financial resources were available to Jadetrex from year to year, the particular decisions that needed to be made and how Doshay's interests were affected by those decisions. 231 In our view, as those conclusions expose, his Honour considered matters relevant to the allegation of oppression as part of his consideration of the impugned transactions. So much is clear from his Honour's references to not only the language of oppression but its substance: the investments were not out of the ordinary or uncommercial; the expansion ideal may have been optimistic but was not improper; there was an upside for Doshay had the businesses succeeded; the staff were included in the opportunity to invest; there is lack of evidence, so many years down the track, from which to understand the full financial implications at the time of the investment; and the investments were not hidden but were disclosed and discussed, even at a general level. 232 His Honour made further findings that reinforce this view. His Honour pointed to three factors that supported his finding that the transactions were commercially understandable. First, his Honour made a positive finding that it is commercially understandable that Doshay would seek to expand its business through franchising the Dragon Boat name; second, it was commercially understandable that Doshay would seek to share ownership in such relatively small businesses and so also spread the risk; and third, a loan for a business is not uncommercial merely because it is undocumented, unsecured and interest-free, having regard to the many ways in which capital might be obtained for a business venture: reasons at [283]-[285]. 233 Furthermore, the primary judge noted that Hylepin failed to explain how the initial investment by Doshay in the restaurants involved any breach of fiduciary duty by John So, noting the common interest of all investors in having the restaurants succeed: at [298]. His Honour found that no breach of fiduciary duty was disclosed with respect to these transactions, and those findings are not appealed. 234 In all of those circumstances, it is unsurprising that the primary judge declined to make a finding of breach of fiduciary duty, but it is also important to note his Honour's focus on the commerciality of the transactions and the absence of a basis to criticise the decision that Doshay enter into the transactions, regardless of the fact that in these particular instances there was a lack of financial success. His Honour's detailed reasons as to the loans made for the purpose of investing in other restaurants are consistent with and fall squarely within the finding (at [360]) that the impugned transactions were not uncommercial or improper: They were undertaken with the aim of increasing the value of Doshay, recognising the risks associated with all business ventures. Some of the transactions turned out to be profitable. Some turned out not to be profitable. They did not involve statutory oppression. 235 In our view, oppression was addressed and rejected squarely by the primary judge with respect to the Lyleable and Jadetrex loan transactions, and no error in such outcome has been established. We concur with his Honour's analysis of the commercial rationale for the transactions. There was a sound basis for his Honour's finding that there was nothing improper in that regard.

Failure to renew lease - ground 9 236 Doshay had conducted the Dragon Boat Restaurant from the premises in Little Bourke Street since 1986. Relevantly, on 10 December 2008 Doshay entered into a new lease over those premises. The commencement date of the lease was 18 August 2009 and was for an initial term of 10 years with an option for a further term of 10 years: at [257]. 237 The commencement rent under the lease was $565,000 per annum plus GST, increasing by 4% on each anniversary of the commencement date of the lease. In the final year of the lease the annual rent was $804,171 plus GST. 238 If Doshay did not exercise the option for a further term but continued in occupation after the end of the term without objection from the landlord, the lease provided that the rent was to be increased by 15% per annum plus GST (under cl 3.5 of the lease). 239 On 8 March 2018 Doshay obtained a current market rent appraisal from Charter Keck Cramer, which concluded that the market rent at that time was $453,285 per annum plus GST. At that time, Doshay was paying rent in the sum of $773,242 per annum plus GST: at [261]. 240 On 7 February 2019 the landlord wrote to Doshay providing a notice for the purpose of Doshay exercising its option to renew the lease. Doshay then engaged Link Business to advise on the best course to be adopted by Doshay. A report was provided which outlined various concerns including a lack of security of tenure, a requirement of a full refurbishment and fit-out if an option was exercised, the fact that John So was at that time 72 years old and intending to retire from the business so requiring replacement with concomitant costs, and changes with the clientele of the restaurant: at [263]. 241 The Link Business report concluded that there was no compelling reason on a commercial analysis for Doshay to exercise the option for a further 10 years. 242 On 9 May 2019 John So and Hellen Chin as directors of Doshay resolved that it would not exercise the option to renew the lease; it would request the landlord to extend the lease upon its expiry on a month to month basis; and that John So would be authorised to negotiate with the landlord the terms of any extension of the lease on a month to month basis. 243 The evidence disclosed that John So wrote to the landlord's agent shortly afterwards, commencing negotiations with respect to a month to month rental. At the time of the trial, Doshay remained in occupation of the premises and was continuing to run the Dragon Boat Restaurant. 244 Hylepin alleged that John So breached his fiduciary duties in resolving not to exercise the option to renew the lease of the premises, and also relied upon that conduct as an element of the oppression claim. 245 The primary judge accepted John So's evidence that the reasons that he and Hellen Chin decided not to renew the lease to the premises were that trading conditions had become increasingly difficult for restaurants of its kind; the terms of the renewed lease if the option was exercised were unfavourable; and he considered that refusing to renew the lease would provide an opportunity to negotiate more favourable terms with the landlord, which he had been doing. 246 The primary judge rejected Hylepin's submission that John So had a conflict of interest when he decided not to exercise the option to renew the lease by reason of this personal circumstances, particularly his age and intention to retire in the near future (a finding not challenged). The primary judge accepted John So's evidence that his personal circumstances were not the primary consideration in his decision. In any event, his Honour considered that such personal circumstances did not conflict with the interests of Doshay but were an additional business circumstance to be taken into account. 247 The primary judge also rejected Hylepin's contention that John So had failed to exercise due care and diligence finding as follows: [357] I also reject Hylepin's submission that John So failed to exercise due care and diligence when making the decision. Hylepin's submission is based on the premise that it was commercially obvious that Doshay should exercise the option. However, the premise is not made out on the facts and is largely based on assertion. Hylepin adduced no evidence to contradict John So's evidence that tastes for Chinese food had been changing and trading conditions for the Dragon Boat Restaurant had become more difficult; it adduced no evidence as to the difficulties for the Dragon Boat Restaurant in retaining staff; it adduced no evidence to contradict John So's belief that he could negotiate better terms from the landlord than the existing lease. Hylepin also asserted that, in the circumstances facing the Dragon Boat Restaurant in 2019, renewing a lease for 10 years involved less commercial risk than moving to a monthly tenancy and seeking to negotiate a better and possibly shorter lease. John So disagreed. I accept his evidence. All businesses face risk. Restaurant businesses are small businesses subject to changing tastes in local markets. It is a matter [of] business judgment whether, at a given point in the business cycle of a restaurant, it is more risky or less risky to enter into a 10 year lease. I also accept the defendants' submission that Hylepin provided no coherent explanation as to why John So and Hellen Chin, who between them have an interest in approximately 75% of the shares in Doshay (ignoring the shares held by Evaluator), would have acted otherwise than bona fide in the interests of Doshay. 248 Hylepin provided only a one paragraph written submission for the purpose of the appeal addressing this claim. Counsel for Hylepin made no oral submissions during the hearing of the appeal about the lease renewal, including in reply, even though the topic was addressed by counsel for the respondents. 249 Hylepin submitted that the decision not to renew the lease was commercially unreasonable, in circumstances where the Dragon Boat Restaurant had previously operated very profitably in that location, and where (contrary to the primary judge's finding at [259]) rent would be reviewed to market rates, whereas the failure to exercise the option meant that Doshay's rent would increase by 15%. Hylepin contended that it could not be said in those circumstances that reasonable directors would act in the way that John So did. 250 The assertion that if the option for a further term was exercised the terms of the lease would have resulted in a rent review to market (and, implicitly, a reduction in rent) was made by Hylepin at trial and rejected. 251 It is necessary to briefly consider the terms of the lease: (a) 'Rent' is defined to mean the amount specified in the Schedule (being the initial rent) as reviewed, adjusted or increased under the lease; (b) cl 1 defines a 'Market Rent Review Date' for the purpose of cl 5 as a date (if any) specified in item 12 of the Schedule. Item 12 nominated one such date, being 'The commencement date of any Further Term' (it is not in issue that Hylepin's complaint related to the alleged failure to renew for a 'Further Term'); (c) cl 3 deals with the duration of the lease, and cl 3.3 provides that the landlord may grant a new lease for the Further Term, with the Rent or the method to be used to review, adjust or increase the Rent during the Further Term specified by cl 5, cl 6 and cl 7; (d) cl 3.5 provides that if the tenant stays in occupation of the premises after the end of the term or any Further Term (overholding) without objection by the landlord, it is open to the landlord to end the lease on 30 days notice and in the interim the Rent is increased by 15% per annum; (e) cl 5 of the lease is headed 'Market Rent Review' and provides that the landlord may give notice to the tenant of the landlord's assessment of the market rent to apply from the Market Rent Review Date (and there is provision for an objection process). If the landlord does not give such a notice, the tenant must continue paying the Rent; and (f) cl 7 provides that the rent will be increased by 4% on each anniversary of the commencement date and the Further Term 'other than the date specified in Item 12'. 252 These clauses properly understood provide that where the Further Term is implemented, the landlord is entitled to assess the market rent at a Market Rent Review Date and such rental will then apply. Alternatively, if the landlord does not assess the rental at market rent, then the rent payable immediately prior to the commencement of the Further Term remains payable by the tenant until reviewed in accordance with cl 7. Under cl 7, as at the first anniversary date of the Further Term, the rent will increase by 4%. 253 It is therefore apparent that there was a prospect that if Doshay chose to agree to the Further Term, the landlord would not re-set the rent at market rent by issuing a notice, but would rely on the term that required Doshay to continue to pay the rent it was paying at that time, and subject to 4% increases per annum. Alternatively, Doshay could decline to renew the lease for the Further Term and holdover by staying in the premises, but would be obliged to pay rent as increased by 15%. Otherwise, it remained open to Doshay to attempt to negotiate terms with the landlord. 254 The primary judge's finding is consistent with this analysis. His Honour found that: [259] … Clause 5 and item 12 of the Schedule gave the landlord, but not the tenant, the right to give notice of the landlord's assessment of the market rent to apply from the commencement of the further term. If the landlord did not give such a notice, the tenant was required to continue to pay the then current rent (adjusted in accordance with clause 7). 255 If such a scenario played out and notice was given, there was a prospect of a reduction in rent at the commencement of the Further Term. But there was no certainty that such would occur. Absent a review to market, the rent would remain at the same rate until a review in accordance with cl 7 on the next anniversary of the commencement date during the Further Term. 256 His Honour continued: [259] Hylepin subsequently submitted that the effect of s 35(3) of the Retail Leases Act 2003 (Vic) was that, to the extent that clause 7 and item 14 of the Schedule to the lease purported to prevent a reduction in rent to market, the clause was void. In my view, that submission conflicts with the terms of s 35(4) of the Act which stipulates that s 35(3) does not apply to a provision that uses a basis or formula for a rent review specified in s 35(2)(a), which is a fixed percentage. Clause item 14 of the Schedule to the lease specifies a fixed percentage and is therefore not governed by s 35(3). 257 Relevantly, s 35 of the Retail Leases Act 2003 (Vic) provides: 35 Rent reviews generally (1) If a retail premises lease provides for a review of the rent payable under the lease or under a renewal of the lease, the lease must state - (a) when the reviews are to take place; and (b) the basis or formula on which the reviews are to be made. (2) The basis or formula on which a rent review is to be made must be one of the following - (a) a fixed percentage; (b) an independently published index of prices or wages; (c) a fixed annual amount; (d) the current market rent of the retail premises; (e) a basis or formula prescribed by the regulations. Note For reviews based on the current market rent of the retail premises, see section 37. (3) A provision in a retail premises lease is void to the extent that it purports to preclude, or prevents or enables a person to prevent, the reduction of the rent or to limit the extent to which the rent may be reduced. (4) However, subsection (3) does not apply to a provision that uses - (a) a basis or formula referred to in subsection (2)(a), (b) or (c); or (b) a prescribed basis or formula referred to in subsection (2)(e) that is also prescribed as a basis or formula to which subsection (3) does not apply. 258 Hylepin in its submissions for the appeal asserted (by way of footnote) that the primary judge erred by holding that there was a fixed percentage rent review protected by s 35(4) on renewal, and by holding that the rent would not have been reviewed to market on renewal. The footnoted submission is cryptic and was not developed. It appears to conflate his Honour's findings. If by the submission Hylepin suggests that his Honour wrongly found that cl 7 would operate to impose a 4% increase as at the commencement of the Further Term, that misstates the relevant finding. His Honour's finding, insofar as he addressed the date of the commencement of the Further Term, was that it was the landlord who had the right to give notice of an assessment of market rent, and not Doshay. If no notice was given, the tenant was required to continue to pay the current rent. Those findings are clearly correct. The reference in the reasons to the obligation to pay current rent 'adjusted in accordance with clause 7' appears to do no more than signal that going forward, cl 7 would apply to reviews. There is nothing to suggest that his Honour overlooked the fact that cl 7 does not apply on the Market Rent Review Date. 259 If Hylepin purported to suggest that s 35(3) applied to cl 5 in some manner, that submission should have been exposed and developed before the primary judge and on the appeal. We were not taken to any transcript that might have revealed any such analysis and Hylepin's written closing submissions, a copy of which was provided on the appeal, did not address it in that manner. 260 This analysis indicates that there was nothing improper in John So's decision to attempt to negotiate better terms for a lease, rather than committing to a 10 year term. There was no guarantee of a reduction in rent and the term of the lease was substantial. 261 The findings of the primary judge as to the circumstances of the non-renewal of the lease were not challenged on the appeal (save for the lease construction point). Having regard to the accepted evidence as to the number of matters of commercial concern to John So, including the risk involved in renewing the lease for 10 years, the prospect of a potential immediate review to market was clearly not determinative. The matters to which the primary judge referred at [357] are all relevant to the question of whether it was commercially unreasonable not to renew the lease. They tell against any absence of due care and diligence. They reveal a balancing of the foreseeable risk of harm against the potential benefits that could accrue to Doshay. Also relevant, as the primary judge found, is the fact that John So and Hellen Chin, as substantial shareholders in Doshay, were unlikely to have acted other than in the best interests of the company. 262 Further, counsel for the respondents noted that the outcome of the negotiations between Doshay and the landlord remained unknown on the evidence before the Court at the time of the trial. The business continued to operate from the premises at that time, despite the non-renewal of the lease. Hylepin's submission based on an alleged loss of profits from the business and its connection to the location were therefore not substantiated. In those circumstances it is not possible to know whether the decision not to renew the lease had any impact on the affairs of Doshay, whether it be negative or positive. 263 This is an example where an absence of express reference to whether the conduct is oppressive is of little moment. No breach of fiduciary duty was established, and the transaction at its heart was not uncommercial, with a thorough assessment of the circumstances of John So's decision not to renew the lease. Hylepin did not point to any evidence that established that the failure to renew the lease had any prejudicial impact upon Hylepin or the other Doshay shareholders, or was unfairly discriminatory towards them. The primary judge's reference to matters such as the risks that all restaurant businesses face and the need to exercise business judgement (reasons at [357]) indicate that he analysed elements of conduct relevant to both a breach of fiduciary duty claim and an oppression claim. No error in that analysis is disclosed.

Failure to acknowledge cumulative effect of conduct - ground 1 264 It remains to consider ground 1. It has been appropriate to deal with this ground last, as it overlaps in part with the matters addressed for grounds 2, 3 and 9. 265 Relevantly, Hylepin contends by ground 1 that the primary judge erred by failing to find that John So's conduct of the management of the affairs of Doshay in connection with five impugned transactions, 'either alone, or in combination', was oppressive. The five matters listed in the notice of appeal are the acquisition of the Exhibition Street Property; the purported change in the shareholding in Global 2000 from 50% to 40% in 2004; the advancing of loans to Jadetrex and Lyleable; the investment in Evaluator; and the failure to exercise the option to renew the Dragon Boat Restaurant lease. 266 We note that the Third ASOC did not refer to any conduct being oppressive 'either alone, or in combination'; the pleaded case was that John So's conduct in connection with those and other matters 'together and in any combination' was oppressive. It may be that little turns on this linguistic inconsistency, but it explains why we have considered oppression with respect to each of the impugned matters separately. 267 It is to be noted that from as early in the reasons as the introductory paragraphs, it is clear that the primary judge, having listed the six main topics of impugned conduct, was cognisant of the fact that all such conduct 'as summarised above' was said to be oppressive: at [12]. His Honour proceeded to dismiss the claims against the respondents based on oppression: at [20]. At [21] his Honour states that 'Hylepin's pleaded case in oppression is based on 'the impugned transactions summarised above, most of which occurred a long time ago'. This is repeated in Part F, the primary judge stating that '[t]the conduct the subject of the oppression claim is the same as the conduct the subject of the fiduciary duties claim …': at [359]. We refer again to his Honour's reference at [360] to Doshay's decision to buy out Global Crest's interest in Evaluator and the observation that 'I do not consider that that one transaction constitutes statutory oppression'; such observation anticipates that more than one transaction might do so. 268 Therefore, it cannot be said that his Honour failed to recognise that conduct relating to a number of different transactions was relied upon by Hylepin for its oppression claim. Nor, in our view, can it be said that his Honour failed to consider the relevant topics of conduct in the context of oppression. 269 We have set out at [145]-[147] above the relevant paragraphs from Part F of the reasons, being that part concerning oppression. We have referred to [360] of the primary judge's reasons on a number of occasions. Relevantly the primary judge states that he does not consider that the impugned transactions were oppressive, and states that such conclusion 'follows from my conclusions with respect to the fiduciary claims'. However, his Honour does not overlook the different test relevant to oppression. He immediately proceeds to re-state the statutory definition and describe its content, utilising the same phrases used in Wayde: that the provision is concerned with commercial unfairness or where a decision has been made so as to impose a disadvantage, disability or burden on the plaintiff that, according to ordinary standards of reasonableness and fair dealing, is unfair. 270 It follows that it is necessary to return to the findings about breach of fiduciary duty to locate the analysis of the conduct. When that task is undertaken, as we have done in our reasons, it is readily apparent that the primary judge had regard to whether the impugned conduct was also oppressive. 271 As to the acquisition of the Exhibition Street Property, we refer to our reasons at [171]-[174]. 272 As to the purported change in the shareholding in Global 2000 from 50% to 40% in 2004, we refer to our observations at [181] as to the limited manner in which the issue was raised, and the matters set out at [199]. 273 As to the advancing of loans to Jadetrex and Lyleable, we refer to the matters at [231]-[235] above. 274 As to the investment in Evaluator, we refer to our observations at [207]-[208] to the effect that this matter was not relied upon. 275 As to the failure to exercise the option to renew the Dragon Boat Restaurant lease, we refer to [261]-[263] above. 276 We have referred to the relevant authorities as to the accumulation of conduct at [132]-[135]. Although we have determined that no error has been disclosed in the primary judge's dismissal of the oppression claims having regard to each of the matters referred to in appeal ground 1, we acknowledge that those matters must also be viewed collectively or in any combination. Even so, we would uphold the primary judge's decision. We do not consider Hylepin has established that the conduct constitutes oppressive conduct, viewed alone or in combination. As the primary judge observed, this case is an illustration of the difficulties and unfairness involved in seeking to litigate complaints about conduct that occurred a long time in the past: at [15]. The selective identification of particular transactions over the course of many years of the operations and investment of a company might in some circumstances establish a course of oppressive conduct, but that is not so in this case. Realistically, for the purpose of ground 1, the focus of the alleged oppression is reduced to the matters referred to in appeal grounds 1(a), (b) and (c), and objectively those matters do not, even when viewed together, indicate a pattern or course of conduct over the relevant years that might be described as oppressive or unfair. Our view is no different even if we have regard to the conduct impugned by ground 3. 277 Finally as to oppression, the substance of Hylepin's submissions indicated that it proceeded on the basis that the conduct was to be considered in the context of s 232(e). It made no submissions as to whether there were any relevant different facts that the Court must consider in order to determine whether the conduct was within s 232(d), and made no submissions directed at s 232(d). 278 We would dismiss ground 1.

OPTION TO RENEW LEASE 279 It remains to say something further about ground 9, albeit that we have already addressed the option to renew the lease. By ground 9 Hylepin alleged that the primary judge erred in failing to find that John So's conduct in deciding, on behalf of Doshay, not to exercise the option to renew the Dragon Boat Restaurant lease was oppressive, but was also in breach of his fiduciary duty and in breach of his duty under s 180(1) of the Corporations Act. 280 Hylepin advanced this ground in written submissions only in the context of oppression. Furthermore, counsel made no oral submissions about the lease renewal on the hearing of the appeal, even in reply, despite counsel for the respondents having addressed the issue. 281 In those circumstances, we do not consider ground 9 has been relied upon by Hylepin or pursued in any meaningful manner. To the extent the conduct is relied upon with respect to oppression, we have dealt with it at [261]-[263] above. No grounds have been established upon which we could conclude that the primary judge ought to have found John So's conduct with respect to the lease option gave rise to any conflict of interest on his part. Hylepin did not refer to any other breach of duty within the meaning of s 180 of the Corporations Act. Nor has Hylepin established that John So in declining to exercise the option failed to properly consider matters relevant to Doshay's interests, that he took into account irrelevant matters or that he made a decision that no director in John So's position, acting reasonably, could have made. We would dismiss ground 9.

DETERMINATION 282 For the above reasons, the appeal must be dismissed. Costs should follow the event in the ordinary way. The appellant should pay the second and third respondents' costs of the appeal to be assessed by a registrar of this Court on a lump sum basis if not agreed. I certify that the preceding two hundred and eighty-two (282) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Markovic, Banks-Smith and Anderson.