Investa Properties Pty Ltd v Nankervis [2015] FCA 1004 | Case summary

Investa Properties Pty Ltd v Nankervis [2015] FCA 1004 | Case summary | Zoe

Cases cited: ABN Amro Bank NV v Bathurst Regional Council (2014) 309 ALR 445 considered Arcus Shopfitters Pty Ltd v Planning Commission (WA) [2002] WASC 174 cited Attorney-General v Blake [2001] 1 AC 268 cited Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd (2015) 318 ALR 302 cited Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd (2015) 228 FCR 225 cited Australian Securities and Investments Commission v Australian Property Custodian Holdings Limited (Receivers and Managers appointed) (in liquidation) (Controllers appointed) (No 3) [2013] FCA 1342 cited Australian Securities and Investments Commission v Mariner Corporation Limited (2015) 106 ACSR 343 cited Bacnet Pty Limited (ACN 115 594 075) v Lift Capital Partners Pty Limited (in liquidation) (2010) 266 ALR 666 cited Bank of New South Wales v Adams [1984] 1 NSWLR 285 cited Barnes v Addy [1870] LR 9 Ch App 244 cited Bayley and Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341 cited Beach Petroleum NL v Johnson (1993) 43 FCR 1 cited Blackmagic Design Pty Ltd v Overliese (2011) 276 ARR 646 cited Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66 cited Boardman v Phipps [1967] 2 AC 46 cited Bray v Ford [1896] AC 44 cited Breen v Williams (1996) 186 CLR 71 cited Brickenden v London Loan & Saving [1934] 3 DLR 465 cited Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 cited Canadian Aero Service Ltd v O'Malley (1973) 40 DLR (3d) 371 cited Chan v Zacharia (1984) 154 CLR 178 cited Chew v The Queen (1992) 173 CLR 626 cited Chirnside v Fay [2007] 1 NZLR 433 cited Colour Control Centre Pty Limited v Ty [1995] NSWSC 96 cited Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 cited Commonwealth Bank of Australia v Barker (2014) 312 ALR 356 cited Concut Pty Ltd v Worrell (2000) 176 ALR 693 cited Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 cited Cook v Deeks [1916] 1 AC 554 cited Currabubula Holdings Pty Ltd v DRE Downtown Real Estate Pty Ltd [1998] 135 NSW 47 cited Dalecoast Pty Ltd v Guardian International Pty Ltd [2003] WASCA 142 cited Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 cited Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 cited Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413 cited Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 cited Furs Ltd v Tomkies (1936) 54 CLR 583 cited Garraway v Territory Realty Pty Ltd [2010] FCAFC 9 cited Gathergood v Blundell & Brown Ltd [1991] 1 NZLR 405 cited Gonsalves v Debreczeni [1998] NSWSC 588 cited Grantwell Pty Ltd v Franks (1993) 61 SASR 390 cited Griffiths & Beerens Pty Ltd v Duggan (2008) 66 ASCR 472 cited Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 considered Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 cited Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 considered Huang v Wang [2015] NSWSC 510 cited Hydrocool Pty Limited v Hepburn (No 4) (2011) 279 ALR 646 cited Investa Properties Pty Ltd v Nankervis (No 2) [2013] FCA 468 cited John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 206 ALR 462 cited K & S Corporation Ltd v Sportingbet Australia Pty Ltd (2003) 86 SASR 312 cited Kelly v Cooper [1993] AC 205 cited Maguire & Tansey v Makaronis (1997) 188 CLR 449 cited McCann v Switzerland Insurance (2000) 203 CLR 579 cited McKenzie v McDonald [1927] VLR 134 cited McNamara v Flavel (1988) 13 ACLR 619 cited Minlabs Pty Ltd v Assaycorp Pty Ltd (2001) 37 ACSR 509 cited Moffa v Newmark Commercial Pty Ltd (No 2) [2003] SADC 148 cited Nicholls v Michael Wilson and Partners Ltd [2012] NSWCA 383 cited Nottingham University v Fishel [2000] ICR 1462 cited Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd (2011) 285 ALR 63 cited Orchard Holdings Pty Ltd v Paxhill Pty Ltd as Trustee for Paxhill Trust Trading as Property People [2012] WASC 271 cited Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 cited Pedersen v Larcombe [2008] NSWSC 1362 cited Pilmer v Duke Group Ltd (In Liq) (2001) 207 CLR 165 cited Power v Ekstein [2009] NSWSC 130 cited Premium Real Estate Ltd v Stevens [2009] 2 NZLR 384 cited QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 QdR 41 cited R v Byrnes (1995) 183 CLR 503 cited Re Coomber [1911] 1 Ch 723 cited re Fitzroy Bessemer Steel etc Co Ltd (1884) 50 LT 144 cited re Hampshire Land Co Ltd [1896] 2 Ch 743 cited Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191 cited Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378 cited Registrar of Aboriginal and Torres Strait Islander Corporations v Ponto (2012) 208 FCR 346 cited Robins v Incentive Dynamics Pty Ltd (in liq) (2003) 45 ACSR 244 cited Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 cited Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143 cited Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013) 295 ALR 760 cited Sultana Investments Pty Ltd v Cellcom Pty Ltd [2009] 1 QdR 589 cited Tesco Supermarkets Ltd v Nattrass [1972] AC 153 cited The Bell Group Ltd (In Liq) v Westpac Banking Corporation [2001] WASC 315 cited Turner v Sigglekow [2010] NZHC 1825 cited Tyler v Thomas (2006) 150 FCR 357 cited University of Western Australia v Gray (2009) 259 ALR 224 cited Warman International Ltd v Dwyer (1995) 182 CLR 544 cited Weldon and Co v Harbinson [2000] NSWSC 272 cited Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295 cited Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) (2012) 301 ALR 1 cited Yong Internationals Pty Ltd v Gibbs [2011] QCA 161 considered

IN RESPECT OF THE AMENDED APPLICATION FILED ON 17 OCTOBER 2013 THE COURT DECLARES THAT:

Ashley Nankervis breached his fiduciary duties to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, in respect of Lot 191 and Lot 170 (as defined in the attached reasons for judgment).
Ashley Nankervis breached his statutory obligations to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, under section 182 and section 183 of the Corporations Act 2001 (Cth) in respect of Lot 170.
Adam Barclay breached his fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 191.
Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 breached its fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 191.
Otherwise: (a) Ashley Nankervis did not breach his statutory obligations to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, under section 182 and section 183 of the Corporations Act 2001 (Cth), in respect of Lot 191; (b) Ashley Nankervis was not subject to, and did not breach, any fiduciary duties to either of the applicants in respect of the decommissioning and relocation of a sales office, formerly located on the Brentwood Site (as defined in the attached reasons for judgment); (c) Ashley Nankervis was not subject to, and did not breach, any fiduciary duties or statutory obligations to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 191 or Lot 170; (d) Adam Barclay was not subject to, and did not breach, any fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 170; (e) Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 was not subject to, and did not breach, any fiduciary duties to the second applicant, Investa Residential Group Pty Ltd ACN 098 527 390, in respect of Lot 170; (f) Adam Barclay was not subject to, and did not breach, any fiduciary duties to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, in respect of Lot 191 or Lot 170; (g) Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 was not subject to, and did not breach, any fiduciary duties to the first applicant, Investa Properties Pty Ltd ACN 084 407 241, in respect of Lot 191 or Lot 170. AND THE COURT ORDERS THAT:
The cross-claim of Ashley Nankervis against Adam Barclay and Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 filed 15 November 2013 be dismissed.
The cross-claim of Adam Barclay against Ashley Nankervis filed 18 November 2013 be dismissed.
The cross-claim of Adam Barclay against Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 filed 15 December 2012 be dismissed.
The cross-claim of Adam Barclay against Vero Insurance Limited ABN 48 005 297 807 filed 15 December 2012 be dismissed.
The cross-claim of Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 against Adam Barclay filed 10 December 2012 be upheld.
Costs be reserved.
The matter be listed for further directions at 9.30 am on 21 October 2015 in respect of: (a) remedies of the applicants under the amended application filed 17 October 2013; (b) remedies of Oliver Hume South East Queensland Pty Ltd ACN 128 863 230 in respect of its cross-claim filed 10 December 2012; (c) costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Overview of the proceedings 1 The claims in these proceedings arise from the sale of two parcels of land in south east Queensland, namely: "Lot 191", which formed part of a residential property development called "Brentwood" or "Brentwood Site", and which is located on Augusta Parkway at Bellbird Park, near the city of Ipswich in Queensland; and "Lot 170" (referred to at various times as the "Fossil Site", "Brittains Road" and "The Outlook"). 2 The applicants, which are companies forming part of the Investa Property Group, claim that the two properties were sold at an undervalue as a result of the actions of: Mr Ashley Nankervis (the first respondent), a former senior employee; Mr Adam Barclay (the second respondent), an individual real estate agent who had an involvement in the sales; and Oliver Hume South East Queensland Pty Ltd (the fourth respondent) ("Oliver Hume SEQ"), the real estate agency company of which Mr Barclay was at material times director and general manager. 3 The details of the applicants' claims against the respondents are set out in the amended application and the third version of the statement of claim, both filed on 17 October 2013. However, stated succinctly, the applicants claim that they have suffered losses in respect of the sales of Lot 170 and Lot 191 because Mr Nankervis and Mr Barclay, in breach of their respective duties to the applicants, and for their own benefit, caused those properties to be sold to entities with which they were associated, at an undervalue. Any liability of Oliver Hume SEQ in these proceedings arises solely because of the actions of Mr Barclay. 4 As is already clear, several iterations of the pleadings have been filed in these proceedings. Currently before the Court are the following applications: the amended application filed on 17 October 2013 ("amended application"); the statement of claim (version 3) filed on 17 October 2013 ("amended statement of claim"); a cross-claim brought by Mr Nankervis against Mr Barclay and Oliver Hume SEQ filed 15 November 2013; a cross-claim brought by Mr Barclay against Mr Nankervis filed 18 November 2013; a cross-claim brought by Mr Barclay against Oliver Hume SEQ filed 15 December 2012; a cross-claim brought by Mr Barclay against Vero Insurance Limited ABN 48 005 297 807 filed 15 December 2012; and a cross-claim brought by Oliver Hume SEQ against Mr Barclay filed 10 December 2012. 5 In the circumstances it is both logical and efficient to deal with the claims of the applicants against the respondents before turning to the cross-claims in this case. 6 Finally, I note that the applicants have elected to claim equitable compensation because of the sale of the relevant properties at an undervalue, rather than claiming an account of profits. To that extent, it is necessary that I should consider whether Lot 191 and Lot 170 were sold at an undervalue. An estimate of equitable compensation payable (if any), as well as any award of costs is, however, an issue for consideration following further submissions from the parties.

Lot 191 16 Lot 191 is the smaller of the two lots of land the subject of these proceedings. It is a 1,079 square metre parcel located within the Brentwood development, being part of the Stage 2A development of the Brentwood site. 17 On or about 16 July 2009, Investa Residential appointed Oliver Hume SEQ as a real estate agent using the PAMDA Form 22a. It was an exclusive agency appointment, relating to Stage 2A (that is, Lots 173 to 215) and Stage 2B (Lots 216 to 249) of the Brentwood Site. 18 On or about 21 October 2009, a delegated authority approval submission for the development and sale of Stage 2A lots at the Brentwood Site was prepared by Mr Damian Long, and recommended by Mr Nankervis and others, in terms recommending that lots be sold at an average lot price of $194,000. Specifically, Mr Long's submission recommended a sale price of Lot 191 of $210,000, being the listed price of $225,000 less a rebate of $15,000. 19 On or about 23 December 2009, Investa Residential entered a Deed of Put and Call giving call rights to Queensland Property Centre Pty Ltd ("Queensland Property Centre") for the purchase of Lot 191 with an exercise price of $195,000. In that deed, Queensland Property Centre was described as "the grantee". 20 Materially, the Deed of Put and Call executed by Investa Residential and Queensland Property Centre permitted the Call Option to be exercised by a nominee of the grantee. This in fact occurred. By contract of sale between Investa Residential and another entity, Spencer Projects Pty Ltd ("Spencer Projects") dated 25 June 2010, Lot 191 was sold to the nominee, Spencer Projects, for a contract price of $290,000, settling on 28 June 2010. 21 It appears that Queensland Property Centre was a company under the control of Mrs Kym Barclay, the wife of Mr Adam Barclay. Further it appears that Spencer Projects was a company of which Mrs Barclay was initially the sole director and shareholder, however on the day of registration Mrs Barclay appointed her daughter, Ms Jaide Spencer Crosbie as sole director, and transferred to her all of the company's shares. 22 The applicants submitted that they only retained $190,497.14 of the settlement monies and paid $96,000 to Queensland Property Centre pursuant to the terms of the Deed of Put and Call. The main allegation of the applicants in relation to Lot 191 is that it was sold at an undervalue and without full disclosure to a company owned and controlled by Mr Barclay's wife, Mrs Barclay. The applicants' case is that the true value of Lot 191 at the time of the deed was $290,000. 23 The applicants also say that Mr Nankervis and Mr Barclay took steps to subdivide Lot 191 without disclosing that they were doing so and that, as a result, a sale price was approved for the property which did not reflect its true value.

As against Mr Nankervis 32 In the amended application the applicants plead: 1. Against the first respondent, Ashley Colin Nankervis 1.1. In respect of the land known as Lot 191, Brentwood Site: (a) Mr Nankervis must account as a defaulting fiduciary to the applicants, Investa Properties and Investa Residential, for the value of Lot 191 at the time of sale. The value of the property was $290,000, but Investa Residential received only $195,000. (b) Alternatively, Mr Nankervis must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them, for the sale of Lot 191 at an undervalue. (c) Alternatively, Mr Nankervis must compensate Investa Properties pursuant to s 1317H of the Corporations Act 2001 (Cth). Pursuant to s 1317H(2), the damage suffered includes profits made by any person resulting from the contraventions of s 182 and 183 alleged (in paragraph 136 of the amended application), and includes the profit of $95,000 to Queensland Property Centre on completion of the sale to Spencer Projects. 1.2. In respect of the land known as Lot 170, Brentwood Site: (a) At the election of Investa Properties or Investa Residential or both of them, Mr Nankervis must account as a defaulting fiduciary to Investa Properties or Investa Residential or both of them for either: (i) Any profit he or any entity that was associated with him, or that he controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine Pty Ltd, or from the development or resale of Lot 170; or: (ii) The value of Lot 170 at the time of sale. The value of the property was $3,000,000 but Investa Residential received only $1,454,545. (b) Alternatively, Mr Nankervis must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them, for the sale of Lot 170 at an undervalue. (c) Alternatively, Mr Nankervis must compensate Investa Properties pursuant to s 1317H of the Corporations Act 2001. Pursuant to s 1317H(2), the damage suffered includes profits made by any person resulting from the contraventions of s 182 and 183 alleged (in paragraph 194 of the amended application). 1.3. Further, Mr Nankervis must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Residential, for the decommissioning and relocation of a sales office, formerly located on the Brentwood site. 33 In the amended statement of claim, the applicants plead further, in summary: Investa Properties employed Mr Nankervis initially in the position of Development Manager and then in the position of Senior Development Manager (reporting to the Queensland General Manager) pursuant to a contract of employment signed by Mr Nankervis on 8 March 2006. Mr Nankervis' duties included: (a) preparing financial and feasibility reports and reporting to internal management, including making recommendations on relevant matters; (b) project management including managing project negotiations and ensuring all contracts were accurately prepared and delivered in accordance with Investa Properties' obligations; (c) managing all projects to ensure compliance with all relevant regulatory, legislative and corporate policy requirements and obligations; (d) managing land sales including tracing of land sales on a weekly basis; (e) managing project negotiations and ensuring the accurate preparation of contracts and liaising with and appointing contractors and planners on behalf of Investa Properties; and (f) approving and/or recommending sales prices for lots within the Brentwood site. By reason of the positions he held, the responsibilities he discharged, and the relationship between the applicants, Mr Nankervis was an employee of Investa Properties and owed fiduciary obligations to Investa Properties and Investa Residential. Mr Nankervis also owed obligations to Investa Properties pursuant to s 182 and s 183 of the Corporations Act 2001 (Cth) ("the Corporations Act"). From at least 19 October 2009 to 29 October 2009 Mr Nankervis and Mr Barclay were involved in taking steps to subdivide Lot 191 into two lots. This was before recommending to Investa Properties that Lot 191 be sold at $210,000 (after rebate), and without disclosing to Investa Properties or Investa Residential that he was involved in taking steps to subdivide Lot 191 into two lots. On or about 18 December 2009 Mr Nankervis approved the sale price in respect of a Deed of Put and Call for Lot 191 to Queensland Property Centre in the amount of $195,000, being $15,000 less than the price after rebate that Investa Properties had approved on 23 October 2009. Mr Barclay's wife, Mrs Barclay, incorporated Queensland Property Centre on 21 October 2009, and for all intents and purposes, was the sole director and sole shareholder. At no time did Mr Nankervis disclose to Investa Properties or Investa Residential that Queensland Property Centre was owned and controlled by Mr Barclay's wife. On 10 June 2010, Mrs Barclay incorporated Spencer Projects. On or about 18 June 2010, Mr Damian Long, another development manager employed by Investa, approved the sale price of Lot 191 to Spencer Projects as trustee for the Spencer Trust in the amount of $290,000. The relevant contract was executed on 25 June 2010 and the contract settled on 28 July 2010. At no time did Mr Nankervis disclose to Investa Properties or Investa Residential that Spencer Projects was owned and controlled by Mr Barclay's wife. In respect of Lot 191, Mr Nankervis was in breach of s 182 and s 183 of the Corporations Act because, inter alia, he improperly used his position as an employee to gain an advantage for himself, or for Mr Barclay, or for companies controlled by Mr Barclay's wife in that, in the course of his duties, he obtained information including as to the potential subdivision of Lot 191, the identity of the company which had a Deed of Put and Call, and the ownership and control of Spencer Projects. By letter of 16 July 2008, and/or by email of 27 November 2008, Mr Nankervis, acting for either Investa Properties or Investa Residential (or both of them), offered Oliver Hume SEQ the commission for the en globo sale of Lot 170. Thereafter Oliver Hume SEQ, in particular through Mr Barclay, performed numerous services in connection with the sale and marketing of Lot 170, including weekly reports provided by Mr Barclay at the end of 2008 and the beginning of 2009. On or about 22 July 2008, Ipswich City council conditionally approved an application made on behalf of Investa Properties and Investa Residential to reconfigure Lot 170 from one lot into 77 lots, and provided preliminary approval for building works to be carried out, subject to development permits in respect of any operational works being received before such works were commenced. An application was made on behalf of Investa Properties and Investa Residential on or about 11 August 2008, to obtain further development permits in respect of operational road works. Some time before 26 November 2008, Investa Residential had entered into a contract to sell Lot 170 to Brittains Road Pty Ltd. It was apparent from the beginning of November 2008 however, that Brittains Road Pty Ltd would probably not complete the contract. By letter of 26 November 2008 to Mr Barclay, Citimark Properties Pty Ltd ("Citimark") offered to purchase the Fossil Site for $3.7 million ("the Citimark offer"). The contract between Investa Residential and Brittains Road Pty Ltd terminated on or about 30 January 2009. On or about 5 November 2008, CB Richard Ellis prepared a valuation report for ANZ Banking Group in respect of Lot 170, valuing it at $4 million exclusive of GST ("the CB Richard Ellis report"). A copy of this report was received by Mr Nankervis on 16 December 2008. The CB Richard Ellis report described Lot 170 as follows: Moderately sloping site subject to a Difficult Topography Overlay with approximately 14% of the site sloping between 20% and 25% along the eastern boundary. Requirement for substantial retaining wall works. Majority of lots on the eastern side of the state [sic] will require benching and a split level house design. On or about 16 December 2008, Mr Nankervis met with Mr Daryl Walker, director of Projex North Pty Ltd ("Projex North") to discuss the redesign of Lot 170. On the same date, Mr Walker provided Mr Nankervis initial engineering advice in relation to the redesign of Lot 170, and Mr Nankervis emailed that engineering advice to Mr Barclay and Mr Tonuri. On or about 16 December 2008, Mr Nankervis received a letter from Mr Walker containing a design amendment proposal, which relevantly provided: Assessment of the existing design with Mr Ashley Nankervis revealed that a design which provided significantly flatter allotments could be achieved by adjusting the levels of Road 2 and Road 3. From about December 2008, Mr Nankervis was involved in submitting an amended Operational Roads Works Approval to the Ipswich City Council which sought levelling and retaining of Lot 170 to create flat lots. At a time unknown to Investa Properties and Investa Residential, but before 20 January 2009, an agreement was entered between Messrs Nankervis, Barclay and Tonuri, pursuant to which Mr Nankervis and Mr Barclay would participate in and derive profits from the sale to Mr Tonuri, or his nominee and the subsequent development of Lot 170. On or about 6 February 2009, Mr Nankervis prepared a Delegated Authority Approval proposing the sale price for Lot 170 in the amount of $1,454,545 exclusive of GST. This recommendation was on the basis that: The site is irregular in shape and heavily vegetated with steep topography, rising from the southeast to the northwest and is unattractive to our target market as only speciality [sic] custom built housing can be built on the site. The housing product made to accommodate steep slope of 10% to 15%. No slap on ground product will be achieved and this is compounded by the tree retention Council require and also approval limitations in association with the degree of earthworks allowed on the site, there is no ability to level the site. The price of $1,454,545 did not reflect the potential market value of Lot 170, taking into account the CB Richard Ellis report, the design amendment proposal of Projex North, and the amended Operational Road Works Approval Application to the Ipswich City Council. It is also clear that, in light of the proposed works in respect of Lot 170, statements in Mr Nankervis' Delegated Authority Approval submission concerning: (a) "only speciality custom built housing can be built on the site"; (b) "the housing product needs to accommodate steep slope of 10% to 15%"; (c) "no slap on ground product will be achieved"; and (d) "there is no ability to level the site"; were incorrect. On or about 10 February 2009, Investa Properties and Investa Residential approved the sale of Lot 170 at $1,454,545. On or about 20 February 2009, Investa Residential and Two Eight Two Nine entered into a Deed of Put and Call in respect of Lot 170, for the sum of $1,454,545. On a date prior to 4 March 2009, Mr Nankervis commissioned Projex North to assess the design for Lot 170, and on 6 March 2009, Mr Walker emailed Mr Nankervis and Mr Barclay an engineering report for Lot 170, dated 12 January 2009, and slope analysis plans prepared by Hyder Consulting Pty Ltd ("Hyder Consulting"). On 25 June 2009, Investa Residential entered into a contract for the sale of Lot 170 to Two Eight Two Nine for $1,454,545. The contract was completed on 31 July 2009. At a time when Mr Nankervis was an employee of Investa Properties, he was engaged by or performed services and duties for and on behalf of Mr Tonuri/Two Eight Two Nine, and provided information to him/it. This included: (a) preparing financial and feasibility reports; (b) project management including managing project negotiations; (c) managing land sales, including tracking land sales on a periodic basis; (d) managing project negotiations, preparing contracts and liaising with and appointing contractors and planners; and (e) approving and/or recommending sales prices for lots. A sales office owned by Investa Residential was located on the Brentwood Site, however in or around March 2010, it was removed and relocated to the site of a project owned by Mr Tonuri. This was done without the authorisation of Investa Properties or Investa Residential. The cost of replacing the sales office is approximately $100,000. Mr Nankervis breached his fiduciary obligations to Investa Properties and Investa Residential and his statutory obligations under s 182 and s 183 of the Corporations Act in that he: (a) entered into the agreement with Mr Barclay and Mr Tonuri in respect of Lot 170; (b) made incorrect statements to Investa Properties in relation to Lot 170; (c) recommended a sale price of $1,454,545 without taking into account or disclosing to Investa Properties or Investa Residential factors which meant the site was not as difficult to develop as he claimed; (d) provided services to Mr Tonuri and Two Eight Two Nine; and (e) relocated and decommissioned a sales office.

As against Mr Barclay 34 In the amended application the applicants plead: 2. As against the second respondent, Adam Kimberly Barclay: 2.1. In respect of Lot 191: (a) Mr Barclay must account as a defaulting fiduciary to Investa Residential Group for the value of Lot 191 at the time of sale. The value of the property was $290,000, but Investa Residential received only $195,000. (b) Alternatively, Mr Barclay must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Residential for the sale of Lot 191 at an undervalue. 2.2. In respect of Lot 170: (a) At the election of Investa Properties or Investa Residential or both of them, Mr Barclay must account as a defaulting fiduciary to Investa Properties or Investa Residential or both of them for either: (i) any profit that he or any entity that was associated with him, or that he controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine Pty Ltd, or from the development or resale of Lot 170; or (ii) the value of Lot 170 at the time of sale. The value of the property was $3,000,000, but Investa Residential Group received only $1,454,545. (b) Alternatively, Mr Barclay must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them for the sale of Lot 170 at an undervalue. 35 In the amended statement of claim, the applicants plead further, in summary: By reason of the arrangements entered into between Investa Residential on the one hand, and Oliver Hume SEQ on the other, and in circumstances where Mr Barclay had been the instrument of Oliver Hume SEQ in respect of the entry into those agreements, Mr Barclay had fiduciary obligations to Investa Residential while providing real estate services in relation to Lot 191. Those duties included an obligation not to assist any associated person or entity purchase Lot 191 without full disclosure to and the informed consent of Investa Residential. From at least 19 October 2009 to 29 October 2009, Mr Nankervis and Mr Barclay were involved in taking steps to subdivide Lot 191 into two lots. When a Deed of Put and Call in respect of Lot 191 was executed by Queensland Property Centre, Mr Barclay did not disclose to Investa Residential or Investa Properties that, in effect, the sole director and sole shareholder of that company was his wife, Mrs Barclay. At no time did Mr Barclay disclose to Investa Properties or Investa Residential that Spencer Projects was owned and controlled by his wife. Mr Barclay had fiduciary obligations to Investa Properties and Investa Residential in relation to Lot 170, in that he was employed to perform Oliver Hume SEQ's obligations as real estate agent and was involved in a significant way in providing Oliver Hume SEQ's services to Investa Properties and Investa Residential. Mr Barclay had a fiduciary obligation to Investa Properties and Investa Residential to tell them that Citimark had made an offer on 26 November 2008 in respect of Lot 170, and the details of the offer (in particular that the offer to purchase was for the amount of $3.7 million). At a time when Mr Barclay was employed by Oliver Hume SEQ and providing services to Investa Properties and Investa Residential in respect of the marketing and sale of Lot 170, he was engaged by or performed services and duties for and on behalf of Mr Tonuri/Two Eight Two Nine, and provided information to him/it. This included: (a) preparing financial and feasibility reports; (b) project management including managing project negotiations; (c) managing land sales, including tracking land sales on a periodic basis; (d) managing project negotiations, preparing contracts and liaising with and appointing contractors and planners; and (e) approving and/or recommending sales prices for lots. Mr Barclay breached his fiduciary obligations to Investa by entering into the agreement with Mr Nankervis and Mr Tonuri in relation to Lot 170 and providing services to Mr Tonuri and/or Two Eight Two Nine.

As against Oliver Hume SEQ 36 In the amended application, the applicants plead: 3. Oliver Hume SEQ 3.1. In respect of Lot 191: (a) Oliver Hume SEQ must account as a defaulting fiduciary to Investa Residential for the value of Lot 191 at the time of sale. The value of the property was $290,000, but Investa Residential received only $195,000. (b) Alternatively, Oliver Hume SEQ must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Residential Group for the sale of Lot 191 at an undervalue. 3.2. In respect of Lot 170: (a) At the election of Investa Properties or Investa Residential, or both of them, Oliver Hume SEQ must account as a defaulting fiduciary to Investa Properties or Investa Residential, or both of them for either: (i) any profit that it or any entity that was associated with it, or that it controlled, made or derived from the sale of Lot 170 to Two Eight Two Nine Pty Ltd, or from the development or resale of Lot 170; or (ii) the value of Lot 170 at the time of sale. The value of the property was $3,000,000, but Investa Residential received only $1,454,545. (b) Alternatively, Oliver Hume SEQ must give equitable compensation, in such form and in such amount as the Court in its discretion considers just, to Investa Properties or Investa Residential, or both of them, for the sale of Lot 170 at an undervalue. 37 In the amended statement of claim, the applicants plead further, in summary: On or about 1 October 2008, Investa Residential entered into an agreement with Oliver Hume SEQ, being an Appointment of Real Estate Agent - Sales and Purchases (Form 22a) pursuant to PAMDA. Mr Barclay, on behalf of Oliver Hume SEQ, signed a further agreement on or about 16 July 2009 with Investa Residential called "Appointment of Real Estate Agent - Sales and Purchases (Form 22a) pursuant to PAMDA. That agreement contained the following notice: When performing this service, the agent must comply with the code of conduct for agents as set out in the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 (Qld). The terms of this notice were incorporated into the agreement as a contractual term. It followed that the agreement of 16 July 2009 contained an express term to the effect that, when performing the services that the agreement provided for, Oliver Hume SEQ must comply with the code of conduct for agents as set out in PAMDA (amended statement of claim para 102G). In those agreements, Investa Residential appointed Oliver Hume SEQ as real estate agent in connection with the sales and marketing of the development of the Brentwood site. At material times, Mr Barclay was a director and employee of Oliver Hume SEQ, and was its agent with actual or ostensible authority act for it in relation to providing real estate agent services to Investa Residential. Mr Barclay was also the signatory on behalf of Oliver Hume SEQ in relation to the agreements, the individual in charge of its business and the individual who dealt with the people at Investa Properties in relation to development and sale of land. In particular, Mr Barclay reported to Mr Nankervis and Mr Long. Oliver Hume SEQ did not disclose to Investa Residential or Investa Properties that Lot 191 was the subject of a Deed of Put and Call in favour of Queensland Property Centre, a company controlled by Mr Barclay's wife, or that Lot 191 was sold to Spencer Projects, being another company controlled by Mr Barclay's wife. In this respect, Oliver Hume SEQ did not act with good faith, breached fiduciary obligations to Investa, and breached express and implied terms of its agreements with Investa. Oliver Hume SEQ had fiduciary obligations to Investa Properties and Investa Residential while providing services in relation to Lot 170. Oliver Hume SEQ had a fiduciary obligation to Investa Properties and Investa Residential to tell them that Citimark had made an offer on 26 November 2008 in respect of Lot 170, and the details of the offer (in particular that the offer to purchase was for the amount of $3.7 million). Oliver Hume SEQ breached its fiduciary obligation to Investa Properties and Investa Residential in relation to Lot 170, as a result of Mr Barclay entering into the agreement with Mr Nankervis and Mr Tonuri in relation to Lot 170 and providing services to Mr Tonuri and/or Two Eight Two Nine.

Mr Nankervis 46 Mr Nankervis relied on a second amended defence filed on 15 November 2013. 47 In summary, Mr Nankervis says as follows: The description of his duties during the period of his employment in paragraph 5 of the amended statement of claim is incorrect. He did not owe to Investa Properties and Investa Residential the fiduciary obligations in paragraph 16(a) of the amended statement of claim. He denied that he was responsible for signing off on all relevant stage releases in the Brentwood site (amended statement of claim para 19(b), second amended defence para 12(c)). He admitted that he signed the approval submission in respect of the Delegated Authority Approval proposing Lot 191 be sold for the amount of $210,000 (after rebate), but otherwise says that it was actually prepared by the development manager, Mr Long, and reviewed and revised by the Chief Financial Officer and the Group Executive before he signed it (second amended defence para 60). He denied that he was involved in taking steps to subdivide Lot 191 into two lots as alleged in paragraphs 103(a) and 104 of the amended statement of claim. He denied the allegation at paragraph 110 of the amended statement of claim that he had approved the sale price in respect of a Deed of Put and Call for Lot 191 to Queensland Property Centre in the amount of $195,000. Rather, at paragraphs 68(c) and 69(d) of his second amended defence, Mr Nankervis said that: o the Sales Advice Vacant Land (referred to in the particulars) was a summary of the deed of Put and Call Option proposed to be entered into in respect of five lots in Brentwood Stages 2A and 2B; o the document was prepared by the sales agent for the Brentwood Development; o the proposed sale of five lots to Queensland Property Centre was a bulk sale; o during the Global Financial Crisis, and especially during 2009, the applicants were willing to discount prices significantly to achieve bulk sales; o the bulk sales of lots in Brentwood Stage 2A included pre-sales to Garrick Bull, DHA, Broadsword and Queensland Lifestyle Company, which are referred to in the "Contract Status Report" attached to the Approval Submission for Brentwood Stage 2A; o discounted pricing for bulk sales was approved by the Board or the Project Control Group for the Brentwood site; and o lot 191 was subsequently sold by Investa Residential for $290,000, well in excess of the approved net price of $210,000. He did not know that Mr Barclay had the interest alleged by the applicants in Lot 191 arising from the Deed of Put and Call, and in any event, was not under a duty to disclose this fact to the applicants. He had no knowledge of Spencer Projects which was not incorporated until 10 June 2010, and in any event ceased his employment with Investa Properties on 26 May 2010. In relation to the allegations of the applicants concerning the CB Richard Ellis report prepared for ANZ Banking Group in respect of Lot 170, at paragraph 105(b) of his second amended defence, Mr Nankervis says: o a valuation report had been prepared for the applicants by Jones Lang Lasalle, in or about June 2008, which provided an indicative assessment in the range of $2.1 million to $2.3 million; o in or about early July 2008, after taking this valuation into consideration, the Group Executive approved disposal of Lot 170 under a "wholesale sell off" with a minimum sale price of $1.8 million with the objective of achieving a sale of the property by 31 December 2008; o in or about early August 2008, the Group Executive approved a reduction in the minimum sale price to $1.75 million; o in or about August 2008, the second applicant entered into a contract for sale of Lot 170 with Brittains Road Pty Ltd for $1,613,636 (excluding GST); o the CB Richard Ellis report was prepared for the ANZ Banking Group Ltd based upon instructions, inputs and assumptions provided by Brittains Road Pty Ltd; o on or shortly after 16 December 2008, Mr Nankervis went through the costings in the CB Richard Ellis report with Ms Nicole Prout, the applicants' Project Accountant in Queensland, and they considered that the costings were unrealistic; o at or about the same time Mr Nankervis also received a copy of the CB Richard Ellis report from Mr Waters, who had been the Queensland General Manager until in or about November 2008 (when he was appointed Queensland Manager of Clarendon Homes) and he continued to have responsibility for the contract with Brittains Road Pty Ltd with Mr Stubbs, the new Queensland General Manager; and o Mr Nankervis discussed the CB Richard Ellis report with Mr Waters and they were both of the opinion that it was overly optimistic in its assumptions given the market conditions. In relation to the allegations of the applicants at paragraphs 169-173 of the amended statement of claim concerning Mr Nankervis' meeting with Mr Walker on or about 16 December 2008 to discuss the redesign of Lot 170, and Mr Nankervis' interactions with Mr Tonuri, he says at paragraph 106 of his second amended defence: o in late 2008 and 2009 during the Global Financial Crisis, the Investa Property Group was under intense financial pressure and was attempting to sell assets wherever possible; o in or about November 2008 it was apparent to Mr Waters and Mr Stubbs that the contract with Brittains Road Pty Ltd was unlikely to complete; o during the period from in or about November 2008 to in or about February 2009, Mr Stubbs instructed Mr Nankervis to the effect that he should do anything and everything he could to ensure that a sale of Lot 170 was achieved; o during November and December 2008, Mr Stubbs, Mr Long and Mr Nankervis undertook an extensive off-market campaign to find a buyer for Lot 170; o the only sale that achievable at the times was the sale to Two Eight Two Nine for $1.6 million (including GST). In relation to the allegations of the applicants at paragraph 174 of the amended statement of claim concerning Mr Nankervis' involvement in submitting an amended Operational Roads Work Approval to the Ipswich City Council which sought levelling and retaining of Lot 170 to create flat lots, he says at paragraph 107 of his second amended defence: o he was involved in submitting a request for amendment of the development approval for reconfiguring one lot into 77 lots in respect of Lot 170; o the principal purpose of the request was to address road design to meet safety concerns raised by the Ipswich City Council and compliance with the Council's Master Plan for the Brentwood Site on interface issues; o the levelling and retaining of the site to create flatter lots was incidental but necessary to make Lot 170 more saleable; o the person who was most interested in purchasing Lot 170 was Mr Tonuri, who told Mr Nankervis in or about November 2008 that he wanted a permit that was unconditional. The plan amendments were undertaken to obtain a permit that was unconditional; o design changes to allow for flatter allotments were undertaken to satisfy Mr Tonuri's concern about the saleability of steep allotments; o all of this information was known to Mr Stubbs because of his direct involvement in the marketing campaign for Lot 170 and in negotiations with Mr Tonuri, and the progress of plan amendments were reported to the Project Control Group. In relation to allegations of the applicants at paragraph 176 of the amended statement of claim concerning the basis of Mr Nankervis' recommendation that Lot 170 be sold for $1,454,545, Mr Nankervis says at paragraph 109 of his second amended defence that he basis of the recommendation that Lot 170 be sold at that price was: o the comparative price analysis undertaken by Jones Lang LaSalle; o the need of Investa Properties to achieve a sale to gain revenue; o the sale to Two Eight Two Nine was the only achievable sale at the time; and o the proposed sale price was just below the price previously agreed by Investa Residential to sell to Brittains Road Pty Ltd and the Jones Lang LaSalle valuation obtained by Investa Residential in June 2008. In relation to allegations of the applicants at paragraphs 186 and 187 of the amended statement of claim to the effect that Mr Nankervis was engaged by or provided services for and on behalf of Mr Tonuri or provided information to Mr Tonuri or a person or persons associated with Two Eight Two Nine, Mr Nankervis says at paragraphs 114-116 of his second amended defence that: o Mr Tonuri worked for a bank and was not experienced in property development; o Mr Tonuri told Mr Nankervis in early 2009 that he would need help in getting the right consultants and getting the Lot 170 project up and running, and Mr Nankervis said that he would assist Mr Tonuri if Mr Tonuri purchased Lot 170; o Mr Nankervis was motivated to do so in order to achieve the sale, and because it was in the interests of Investa Residential for him to be involved so as to most effectively resolve the interface issues between Lot 170 and the balance of the Brentwood site and requirements of the Brentwood Master Plan, including sewer alignment, pathway connections and the road frontage works; o he did not provide services alleged by the applicants including preparation of financial and feasibility reports, project management, land sales management and project negotiation management - rather the assistance Mr Nankervis provided to Mr Tonuri was that: • he provided introductions to consultants and contractors; • he attended a meeting between Mr Tonuri and a finance broker; • he ran a feasibility model using inputs provided by Mr Tonuri; and • the project was managed by Projex North which was engaged by Two Eight Two Nine; o the assistance he provided to Mr Tonuri was generally given outside business hours in return for no payment, and did not conflict with his responsibilities to Investa Properties. In relation to allegations of the applicants at paragraphs 191-193 of the amended statement of claim concerning the sales office, Mr Nankervis says at paragraphs 119-122 of his second amended defence that: o by late 2009, when Investa Residential was pre-selling and preparing for the delivery of Stages 1D, 1E and 1F of the Brentwood site, the relevant sales office had not been used for approximately two years, had been vandalised and was in disrepair. The estimated cost of repairing and removing the sales office from the site exceeded $50,000. o in or about December 2009, Mr Holt, the Queensland General Manager, instructed that the sales office was to be removed from the site at no cost to Investa Residential. Subsequently, in or about January or February 2010, Mr Barclay proposed to Mr Nankervis that the sales office be relocated to the Outlook Project at no cost to Investa, and Mr Nankervis agreed. He did not profit from transactions involving either Lot 191 or Lot 170.

Mr Barclay 48 Mr Barclay relies on a defence filed on 18 November 2013. In summary, he says as follows: Investa Properties was the relevant party at all times, not Investa Properties. At paragraph 1A(c)(ii) of his defence, Mr Barclay says: (i) the land the subject of this proceeding was not held beneficially by Investa Residential for Investa Properties; (ii) if funds were provided by Investa Properties to Investa Residential those funds were by way of a loan on commercial terms; and (iii) Investa Residential was the registered owner of the subject land from any beneficial holding and was the party who contracted with real estate agents and entered into land contracts. Further at paragraph 1B(a) of his defence, Mr Barclay says that it was Investa Residential which contracted for the purchase and sale of land within the Brentwood site, and the entity which entered into agreements with real estate agents. In relation to the allegations of the applicants at paragraph 27 of the amended statement of claim concerning the appointment of Oliver Hume SEQ as real estate agent by Investa Residential, Mr Barclay admits that Oliver Hume SEQ agreed to conduct sales and marketing of certain lots but says further at paragraph 8 of his defence that: o the applicants acted on their own behalf for the sale of all land at the Brentwood Site as well as negotiated or dealt with at least 10 different agencies involving more than 100 different purchasers; o no agent was appointed for the sale of Lot 170; and o unless an appointment is in the approved form 22a pursuant to PAMDA an appointment is ineffective. The claim of the applicants in paragraph 102G of the amended statement of claim, that the notice on the agreement entered by the applicants and Oliver Hume SEQ on 26 July 2009 meant that there was incorporated a condition that the agent must comply with the code of conduct for agents in PAMDA, was wrong in law. Neither he nor Oliver Hume SEQ owed obligations to Investa Residential pursuant to the provisions of PAMDA. In relation to the claims of the applicants in paragraph 102L of the amended statement of claim that Mr Barclay owed fiduciary obligations to Investa Residential, Mr Barclay denies that such fiduciary obligations are owed. In relation to the claim of the applicants at paragraph 107 of the amended statement of claim that he did not, at any time prior to Mr Nankervis recommending to Investa Properties the sale of Lot 191 at $210,000 (after rebate), disclose to the applicants that he was taking steps to subdivide Lot 191, Mr Barclay says at paragraph 34 of his defence that: o he verbally informed the applicants through Mr Nankervis, who consented to and encouraged the sale; o by email on or about 19 October 2009, Mr Barclay emailed the applicants asking whether or not there would be any issues with subdividing Lot 191, and the applicants (through Mr Nankervis) consented and encouraged the sale; and o Mr Barclay initiated the proposal to the applicants for them to subdivide the larger lots in stage 2A and 2B of the Brentwood Site to achieve lower priced lots for sale during the Global Financial Crisis, however the applicants responded, inter alia, that they did not have the budget allowance or cash resources to carry out the subdivisions and they needed to increase cash flow by sales of existing lots. In relation to the claim of the applicants in paragraph 108 of the amended statement of claim that the price of $210,000 for Lot 191 did not reflect its potential market value (given that it could be subdivided), Mr Barclay says at paragraph 35 of his defence that: o the actual price paid was the market value of Lot 191 with or without the knowledge of the potential to subdivide; o the applicants were informed of the potential to subdivide Lot 191 but declined the opportunity to do so; o the Global Financial Crisis resulted in the applicants deciding to sell the Brentwood Site as a whole and there being less demand for larger lots; o the applicants breached s 93 of the Valuation of Land Act 1944 (Qld) and s 81 of the Land Titles Act 1994 (Qld) by not disclosing rebates and therefore distorting the real market value of lots in the Brentwood Site and the surrounding area; o the applicants failed to comply with regs 7(1), 11, 14 and 16 of the Property Agents and Motor Dealers (Property Developer Practice Code of Conduct) Regulations 2001 (Qld) by, inter alia, conduct whereby board list prices and list prices were artificially and misleadingly distorted, because of rebates given by the applicants in respect of lots sold; o the applicants sold other lots greater than 900 m to their own employees at similar prices; o Lot 190 was valued by Bank of Queensland on 2 August 2010 at $200,000 being the best comparative sale; o in Delegated Authority Approval papers of the applicants dated 3 March 2009 the applicants authorised lots to be sold at an average of $190,000 per lot; o market conditions were deteriorating in 2009 as a result of the Global Financial Crisis, and were affecting nearby developments operated by Stockland as well as sales rates of the Brentwood Site; and o subdivision of Lot 191 required complex steps and associated costs. In relation to the claim of the applicants in paragraph 111 of the amended statement of claim that the price of $195,000 for Lot 191 approved by Mr Nankervis on or about 18 December 2009 in the Deed of Put and Call was $15,000 less than the price of $210,000 approved by Investa Properties on 23 October 2009, Mr Barclay says that $195,000 was the market price, Lot 191 was sold as part of a bulk sale of other lots, the sale price of $195,000 was approved by the applicants and in any event the prices of Investa land were distorted by the applicants as a result of rebates which were not disclosed to the market. In relation to the claim of the applicants at paragraph 120 of the amended statement of claim that Mr Barclay did not disclose to the applicants that the other party to the Deed of Put and Call was a company controlled by his wife, Mr Barclay says at paragraph 46 of his defence that he verbally informed Mr Nankervis of this fact and that Mr Nankervis encouraged these actions. In relation to the sale price of $290,000 achieved for the sale of Lot 191 to Spencer Projects, Mr Barclay at paragraph 58 of his defence, says that the real value of Lot 191 was not $290,000, and the only reason Investa Residential achieved that sale price was because the transaction between Spencer Projects and Queensland Property Centre was a related party transaction. In relation to the allegations of the applicants at paragraphs 162A-162G of the amended statement of claim concerning Lot 170, Mr Barclay says at paragraph 60 (inter alia): o he undertook no activities set out in a letter of 16 July 2008 whereby Investa Residential offered Oliver Hume SEQ the commission for the en globo sale of Lot 170; o as at 16 July 2008, Oliver Hume SEQ had not been appointed as the sales agent for any Lots within the Brentwood development; o the applicants were actively marketing Lot 170 internally while at the same time contacting real estate agents including Oliver Hume SEQ to consider selling Lot 170; o Brittains Road Pty Ltd was sourced as buyer internally from the marketing activities by the applicants; o Mr Barclay undertook no marketing activities of Lot 170 on behalf of the applicants, or at all o the email of 27 November 2008 from Mr Nankervis to Oliver Hume SEQ specifically stated that the applicants would not formalise the engagement of Oliver Hume SEQ until Oliver Hume SEQ advised. No agreement was ever formalised in fact or pursuant to PAMDA because there was no agreement to formalise; o between 27 November 2008 and February 2009, Mr Barclay and Mr Nankervis (on behalf of the applicants) agreed that Oliver Hume SEQ would seek its commission from Two Eight Two Nine through the sales of the developed sites or vacant land sales of Lot 170 by Two Eight Two Nine. However, Oliver Hume SEQ did not receive any commission from the applicants for the sale of Lot 170 to Two Eight Two Nine in accordance with that agreement; o in or about mid 2008, Mr Barclay on behalf of Oliver Hume SEQ was requested by Mr Geoff McWilliam, on behalf of Citimark, to source potential sites for development. In or about November 2008, Mr Barclay identified Lot 170 as such a site and Citimark made an offer on 26 November 2008 in respect of Lot 170, however the offer was withdrawn within several days; and o the marketing report relied upon by the applicants in paragraph 162C of the amended statement of claim with reference to the Fossil Site was actually produced by Oliver Hume SEQ in relation to the Brentwood Site, and not Lot 170. In relation to the offer of $1,454,545 for Lot 170, Mr Barclay says at paragraph 63 of his defence, inter alia, that at or about 10 February 2009 when the Delegated Authority Approval prepared by Mr Nankervis and signed by Mr Nankervis, Mr Stubbs (the General Manager Queensland) and Mr Jenkins (Group Executive), it was recognised that: o the Brittains Road contract had terminated. In that contract Investa Residential had previously agreed to sell Lot 170 to Brittains Road Pty Ltd for $1,613,636 excluding GST; o a sales and marketing campaign had been undertaken by Oliver Hume SEQ off market, at no cost to Investa; o there was no interest in the site by corporate players and only five persons at a local level had been interested; and o it was agreed that Oliver Hume SEQ would be acting on the buyer's behalf and not that of Investa Residential and would seek its commission from the buyer not the applicants. He admits he provided services for and on behalf of Mr Tonuri and Two Eight Two Nine and provided information and assistance to them from August 2009. In relation to the relocation of the sales office, at paragraph 85 of his defence, Mr Barclay denies that neither applicant authorised the relocation because Mr Nankervis agreed for it to be removed from the Brentwood site at Mr Barclay's cost. At paragraph 87 of his defence he denies that the applicants could have reused the sales office because: o the applicants were using display homes for sales offices in subsequent stages in the Brentwood Development; o the sales office was damaged and required extensive cash payments to improve; o the sales office was not modern or presentable to a standard required by the applicants for their sales display; o the applicants required increases in cash flow and saved cash flow by not having to refurbish a damaged sales office and keeping it in storage for subsequent use in subsequent stages of the Brentwood Development; and o the applicants made the commercial decision to have the sales office removed at no cost, therefore saving approximately $50,000 in cash outlays.

Oliver Hume SEQ 49 Oliver Hume SEQ relies on a defence filed on 15 November 2013. In summary, it says as follows: In respect of the claims of the applicants concerning the execution of contract for the sale of Lot 170, Oliver Hume SEQ says at paragraph 4 of its defence: o an appointment of a person as a purported real estate agent is ineffective unless it is in the approved form in accordance with provisions of PAMDA, being Form 22a; o a Form 22a was not executed by either applicants, or Mr Barclay, or Oliver Hume SEQ in relation to Lot 170; and o this may be compared with the Form 22a prepared by Mr Barclay and executed by Investa Residential and Oliver Hume SEQ on 30 September 2008 in relation to other lots, and a subsequent Form 22a signed by Mr Nankervis on behalf of Investa Residential and Mr Barclay on behalf of Oliver Hume SEQ on 16 July 2009 in relation to Lots 173-215 and 216-249 Whipstick Boulevard in the Brentwood Development. In relation to Mr Barclay, Oliver Hume SEQ says at paragraph 6 of its defence: o Mr Barclay was employed on 15 March 2004 as Sales Manager, and his title changed to General Manager - Queensland Land and New Homes in September 2006; o on 1 November 2006, Mr Barclay signed an employment contract, and subsequently on 27 August 2008 he signed another employment contract to become the General Manager - Queensland Land and New Homes for Oliver Hume SEQ. In both contracts he agreed, inter alia, that he would not engage in any private business activities or provide any commercial or professional services to a person or organisation without prior written consent of Oliver Hume SEQ; o on 1 July 2009 AKB Qld Pty Ltd of which Mr Barclay was the sole shareholder and director became a shareholder of Oliver Hume SEQ, and was the only Queensland based shareholder of Oliver Hume SEQ at the material time; o Mr Barclay was nominated as the officer in effective control of Oliver Hume SEQ's Corporate Licence from 2006; o on 14 April 2011, Mr Barclay's employment with Oliver Hume SEQ was terminated and he was removed as a director; o from 11 December 2007 to 14 April 2011 Mr Barclay was authorised by Oliver Hume SEQ to sign the following categories of documents on its behalf as the only director of Oliver Hume SEQ based in Queensland: • PAMDA forms; • lease agreements with a second director; • capital expenditure up to $5,000; • employment agreements for staff; • consultancy agreements; • all other agreements together with a second director; and o other than in these respects, Mr Barclay had no actual or apparent authority to act for Oliver Hume SEQ in matters relating to the provision of real estate agent services to Investa Residential. It denies that any agreement between it and either of the applicants contained terms imported by the notice on the Form 22a as claimed by the applicants. The contents of the Real Estate Agency Practice Code of Conduct were not terms or conditions of the contract. It denies that any fiduciary obligation which consisted of the duties or obligations particularised at paragraphs 102J and 102L of the amended statement of claim arose as between either of the applicants and Oliver Hume SEQ. At paragraph 22 of its defence, Oliver Hume SEQ says that it was to provide real estate agent services in accordance with the terms of the Form 22a signed on 16 July 2009 which included the sale and marketing of Lot 191, but that was all. Oliver Hume SEQ had no knowledge concerning the entry into the Deed of Put and Call by Queensland Property Centre. Oliver Hume SEQ had no knowledge of the steps taken by Mr Nankervis and Mr Barclay to subdivide Lot 191 into two lots, and says at paragraph 41 of his defence that it that conduct was engaged in it was not undertaken with the knowledge, consent or approval of Oliver Hume SEQ. Such conduct or knowledge could not be imputed to Oliver Hume SEQ. In relation to steps taken by Mr Nankervis and Mr Barclay pursuant to the subdivision of Lot 191 pleaded by the applicants at paragraph 139 of the amended statement of claim, Oliver Hume SEQ, at paragraph 41 of its defence, denies that it breached any express or implied terms of any agreement and any fiduciary obligation. It denies that there was any contract of engagement with the first or second applicant in relation to Lot 170 as pleaded in paragraph 162C of the amended statement of claim. Any services provided by Mr Barclay were not performed on behalf of, or with the authority of, or as agent for Oliver Hume SEQ. It denies the claim of the applicants in paragraph 162D of the amended statement of claim that Oliver Hume SEQ was in a position of confidence in relation to Investa Properties and Investa Residential, and further denies the claims in paragraphs 162E and 162F of the amended statement of claim that it owed any fiduciary obligations in relation to Lot 170. In relation to the claims of the applicants at paragraphs 164A-167 of the amended statement of claim, Oliver Hume SEQ says at paragraph 51 of his defence, inter alia: o on 13 June 2008, after the preparation of an "Indicative Assessment" for the second applicant by Jones Lang LaSalle, the second applicant's business plan valued Lot 170 at $3,100,000; o on 3 July 2008, however the State Manager of the second applicant recommended that Lot 170 be disposed of under a "wholesale sell off" with the minimum sale price to exceed $1,800,000. This recommendation was approved by Mr Maurice Felizzi, the Group Executive for the second applicant on or about 7 July 2008. That recommendation was followed up on 11 August 2008 with a further recommendation that Lot 170 be sold with the minimum price to exceed $1,750,000, which recommendation was again approved by Mr Felizzi; o on 11 August 2008, the second applicant entered into a contract to sell Lot 170 to Brittains Road Pty Ltd for $1,775,000 (inclusive of GST). Oliver Hume SEQ was not identified in the contract as being the vendor's agent for the sale; o on or about 19 August 2008, Mr Barclay sought a quotation from CB Richard Ellis to provide a report for Lot 170. CB Richard Ellis prepared a report, for the ANZ Banking Group, on the instruction of Brittains Road Pty Ltd, valuing the land at $4,000,000; o by letter dated 26 November 2008 to Mr Barclay, Citimark offered to purchase Lot 170 for $3,700,000 including GST. Oliver Hume SEQ had no knowledge of this offer; o on 27 November 2008 Mr Nankervis emailed Mr Barclay to the effect that the Brittains Road Pty Ltd contract looked precarious and that Investa Residential wanted Oliver Hume SEQ to procure a back-up sale contract for around $1,800,000, but would not formalise Oliver Hume SEQ's engagement until Mr Barclay advised them; o by 2 December 2008 Mr Barclay had made contact with Mr Tonuri in relation to purchasing Lot 170; o a further memorandum was prepared by Mr Nankervis to the Group Executive of Investa Residential on 28 January 2009 recommending that Lot 170 be sold for $1,600,000, followed by a Delegated Authority Approval Submission prepared by Mr Nankervis on 6 February 2009, recommending that it be sold under a "wholesale sell off" for $1,454,545 exclusive of GST; o on 13 February 2009 Ms Prout, an employee of one of the Investa companies, wrote to Mr Andrew Murray (Legal Counsel of the Investa property group) and Mr Duncan Peacock (the Chief Financial Officer of the Investa Property Group) and stated, inter alia, that it appeared that the book value for Lot 170 was $2.976 million, and having regard to the loan amount referable to the site she had arrived at a debt of $1,361,923; and o CB Richard Ellis prepared a report of Lot 170 on 6 May 2009 on the instructions of Mr Tonuri for mortgage security purposes, and CB Richard Ellis valued Lot 170 at $4 million. The second applicant subsequently sold Lot 170 to Two Eight Two Nine for $1,454,545 on 25 June 2009 by a contract of sale, in which no selling agent was identified. Oliver Hume SEQ received no commission in relation to the sale of Lot 170. Oliver Hume SEQ says at paragraph 64 of its defence that it provided no services to Mr Tonuri and/or Two Eight Two Nine. At all material times, Mr Nankervis was the servant or agent of the applicants, and in so far as any loss was suffered by the applicants in respect of the Lot 191 contract or the Lot 170 contract it was caused by the applicants by their agent, Mr Nankervis.

RELEVANT ISSUES FOR DETERMINATION 50 At the commencement of the trial of these proceedings the parties estimated that a period less than three weeks of Court time would be required for the hearing. Despite the fact that, in my view, the questions before the Court for consideration and determination were broadly straightforward, the time allowed for the trial proved to be a significant underestimation. By the closure of the proceedings, approximately six weeks of Court time had been occupied in this matter, with the expectation that, in future, further directions will be necessary for submissions by the parties concerning compensation (if any) and costs. 51 One reason for the escalation was that both Mr Nankervis and Mr Barclay were self-represented throughout the trial, and it is clear that the conduct of a trial over multiple weeks proved challenging to them, and required considerable time over and above that which would have been required by experienced legal representatives in the conduct of their cases. In making this comment, I make no criticism of them in respect of their conduct of their cases. 52 However an additional, and in my view unfortunate, reason for the prolongation of the proceedings was that the trial was characterised at various times by an extraordinary degree of animosity between Counsel, and between certain Counsel and litigants in person. While such animosity inevitably translates into proceedings of heightened tension, a more problematic outcome is that the high standards of professional conduct and reasonable co-operation of litigants, which this Court has reasonably come to expect, was absent. Indeed there was almost nothing upon which the parties could agree, even the matters for determination by this Court on the filed pleadings. 53 A draft joint statement of issues for determination was provided by the applicants, with objection by Counsel for Oliver Hume SEQ. I note that it is Court document 261 in these proceedings. It was the subject of comment by Mr Barclay and Oliver Hume SEQ, but apparently no comment by Mr Nankervis. It is a document which is of some assistance as an aide to the Court, but little more. 54 In my view at this stage there are three key issues for determination in respect of the primary proceedings:

Did any of the respondents owe fiduciary, statutory or other duties to any of the applicants in respect of Lot 191, Lot 170 and/or the sales office?
If yes, did the conduct of any of the respondents breach those fiduciary, statutory or other duties?
If yes, what loss or damage is attributable to that breach of fiduciary or statutory duties in respect of Lot 191, Lot 170 and/or the sales office? 55 I now turn to consideration of these issues.

The applicants' submissions 56 The applicants, at paragraph 16 of their amended statement of claim, allege that: 16. By reason of the positions of Development Manager and Senior Development Manager held by Nankervis, and the responsibilities that he discharged, and the relationship between Investa Properties and Investa Residential as alleged in paragraphs 1A and 2 above, at all material times during his employment, Nankervis: (a) had fiduciary obligations to Investa Properties and Investa Residential Group to: (i) act in good faith and with fidelity; (ii) avoid and disclose to Investa Properties or to Investa Residential Group all actual or perceived conflicts of interest; (iii) act in the best interests of Investa Properties and Investa Residential Group; and (iv) give Investa Properties and Investa Residential Group the full benefit of his knowledge and skill, and in particular, pass on to Investa Properties or to Investa Residential Group all information that he had about the marketing and sale of the properties that were the subject of his employment, that might be relevant to the marketing and sale; (v) not profit from his position, other than by receiving remuneration in the course of his employment with Investa Properties, without full disclosure to and the informed consent of Investa Properties and Investa Residential Group; and (vi) not assist • any person with whom he was associated; or • any entity in which he had an interest; or • any person or entity from whom or from which he could expect a benefit; to purchase any of the properties he was engaged in the marketing and sale of, without full disclosure to and the informed consent of Investa Properties and Investa Residential Group; and (b) was an employee of Investa properties within the meaning of sections 182 and 183 of the Corporations Act 2001 (Cth). 57 The applicants submitted that Mr Nankervis' position as an employee of the first applicant Investa Properties alone gave rise to fiduciary obligations as the employee-employer relationship is an established category of fiduciary relationship: Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 per Gibbs CJ at 68, and Finn PD, "Contract and the Fiduciary Principle" (1989) 12 UNSW Law Journal at 87. 58 The scope of Mr Nankervis' obligations as a fiduciary, the applicants submit, is derived from his position as development manager, with responsibilities for the sale of Investa's residential land in Queensland. The applicants said that Mr Nankervis was responsible for: a) Preparing feasibility studies, the purpose of which was to calculate the expected return from a purchase or development, or give an indicative assessment of the price at which it could be sold; and b) Preparing reports and other documents for Investa's decision-makers to assist them in deciding whether to sell land, how to sell it and at what price. The documents covered facts about the market generally, the particular market in which the land was to be sold, and the land itself. They included Nankervis's own recommendation as to sale price. They also included proposed recommendations to be adopted by the intermediate decision-making levels for submission to the ultimate decision-makers. 59 The applicants also said that the structure of the decision-making process meant that there was a high reliance on Mr Nankervis' professional expertise, and also on his good judgment, impartiality and honesty. As such, the no-conflict rule and no-profit rule were said to apply particularly in these areas and as such if Mr Nankervis was involved in reporting for and making recommendations in relation to the sale of any property, he could not be involved in the purchase of the property without full disclosure of all facts relevant to the purchase, the consent of the principal and purchase for full value.

Consideration - Mr Nankervis and existence of fiduciary obligations 64 A person who is an employee under a contract between himself or herself and an employer can be in the position of owing duties to the employer at law by virtue of that contract, and in equity depending on the position and the nature of the relationship. 65 It is settled law that, as a general proposition, an employee has an implied duty of fidelity to the employer not to engage in conduct which "impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee" (Commonwealth Bank of Australia v Barker (2014) 312 ALR 356 at [30]; Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66; Concut Pty Ltd v Worrell (2000) 176 ALR 693). This duty requires that an employee will not, for example, wrongly appropriate property of the employer (Concut), or more generally engage in competition with the employer (Blyth Chemicals, Griffiths & Beerens Pty Ltd v Duggan (2008) 66 ASCR 472). 66 It is also clear, however, that the simple fact that a person is an employee does not mean that he or she owes fiduciary obligations to the employer. The overlap between duties owing at common law by an employee, and fiduciary obligations possibly owing by an employee, were carefully and comprehensively examined in Nottingham University v Fishel [2000] ICR 1462 at 1490-1491. In that case, Elias J observed as follows: It is true that in [A.G. v Blake [1998] Ch 439] Lord Woolf, giving judgment for the Court of Appeal said that the employer-employee relationship is a fiduciary one. But plainly the Court was not thereby intending to indicate that the whole range of fiduciary obligations was engaged in every employment relationship. This would be revolutionary indeed, transforming the contract of employment beyond all recognition and transmuting contractual duties into fiduciary ones. In my opinion the Court was merely indicating that circumstances may arise in the context of an employment relationship, or arising out of it, which, when they occur, will place the employee in the position of a fiduciary. In Blake itself, as I have indicated, it was the receipt of confidential information. There are other examples. Thus every employee is subject to the principle that he should not accept a bribe and he will have to account for it (and possibly any profits derived from it) to his employer. Again, as Fletcher-Moulton L.J. observed in Coomber v Coomber [1911]1 Ch.723 at 728, even an errand boy is obliged to bring back my change, and is in fiduciary relations with me. But his fiduciary obligations are limited and arise out of the particular circumstances, namely that he is put in a position where he is obliged to account to me for the change he has received. In that case the obligation arises out of the employment relationship but it is not inherent in the nature of the relationship itself. As these examples all illustrate, simply labelling the relationship as fiduciary tell us nothing about which particular fiduciary duties will arise. As Lord Browne-Wilkinson has recently observed in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 206: "... the phrase 'fiduciary duties' is a dangerous one, giving rise to a mistaken assumption that all fiduciaries owe the same duties in all circumstances. This is not the case". This is particularly true in the employment context. The employment relationship is obviously not a fiduciary relationship in the classic sense. It is to be contrasted with a number of other relationships which can readily and universally be recognised as "fiduciary relationships" because the very essence of the relationship is that one party must exercise his powers for the benefit of another. Trustees, company directors and liquidators classically fall into this category which Dr. Finn, in his seminal work on fiduciaries, has termed "fiduciary offices". (See PD Finn, "Fiduciary Obligations" (1977)). As he has pointed out, typically there are two characteristics of these relationships, apart from duty on the office holder to act in the interests of another. The first is that the powers are conferred by someone other than the beneficiaries in whose interests the fiduciary must act; and the second is that these fiduciaries have considerable autonomy over decision making and are not subject to the control of those beneficiaries. By contrast, the essence of the employment relationship is not typically fiduciary at all. Its purpose is not to place the employee in a position where he is obliged to pursue his employer's interests at the expense of his own. The relationship is a contractual one and the powers imposed on the employee are conferred by the employer himself. The employee's freedom of action is regulated by the contract, the scope of his powers is determined by the terms (express or implied) of the contract, and as a consequence the employer can exercise (or at least he can place himself in a position where he has the opportunity to exercise) considerable control over the employee's decision making powers. This is not to say that fiduciary duties cannot arise out of the employment relationship itself. But they arise not as a result of the mere fact that there is an employment relationship. Rather they result from the fact that within a particular contractual relationship there are specific contractual obligations which the employee has undertaken which have placed him in a situation where equity imposes these rigorous duties in addition to the contractual obligations. Where this occurs, the scope of the fiduciary obligations both arises out of, and is circumscribed by, the contractual terms; it is circumscribed because equity cannot alter the terms of the contract validly undertaken. The position was succinctly expressed by Mason J in the High Court of Australia in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR … (Emphasis added.) 67 These comments are relevant in Australia (cf comments of the Full Court of this Court in University of Western Australia v Gray (2009) 259 ALR 224 at [92]). 68 Whether in the employment relationship there are specific contractual obligations which the employee has undertaken which have placed him or her in a situation where equity imposes these rigorous duties in addition to the contractual obligations is a question of fact in each case. 69 Although very junior employees may be the repository of fiduciary obligations (the classic example being that of the errand boy, given by Fletcher Moulton LJ in Re Coomber [1911] 1 Ch 723 at 728, as noted by Mason J in Hospital Products at 102) nonetheless it may be easier to identify a fiduciary relationship between an employer and a senior employee in whom greater responsibility is reposed. This point was recognised by the Supreme Court of Canada in the leading case of Canadian Aero Service Ltd v O'Malley (1973) 40 DLR (3d) 371 where the Court said: What is not in doubt is that they acted respectively as president and executive vice-president of Canaero for about two years prior to their resignations. To paraphrase the findings of the trial judge in this respect, they acted in those positions and their remuneration and responsibilities verified their status as senior officers of Canaero. They were "top management" and not mere employees whose duty to their employer, unless enlarged by contract, consisted only of respect for trade secrets and for confidentiality of customer lists. … The distinction taken between agents and servants of an employer is apt here, and I am unable to appreciate the basis upon which the Ontario Court of Appeal concluded that O'Malley and Zarzycki were mere employees, that is servants of Canaero rather than agents. Although they were subject to supervision of the officers of the controlling company, their positions as senior officers of a subsidiary, which was a working organization, charged them with initiatives and with responsibilities far removed from the obedient role of servants. It follows that O'Malley and Zarzycki stood in a fiduciary relationship to Canaero, which in its generality betokens loyalty, good faith and avoidance of a conflict of duty and self-interest. Descending from the generality, the fiduciary relationship goes at least this far: a director or a senior officer like O'Malley or Zarzycki is precluded from obtaining for himself, either secretly or without the approval of the company (which would have to be properly manifested upon full disclosure of the facts), any property or business advantage either belonging to the company or for which it has been negotiating; and especially is this so where the director or officer is a participant in the negotiations on behalf of the company. An examination of the case law in this Court and in the Courts of other like jurisdictions on the fiduciary duties of directors and senior officers shows the pervasiveness of a strict ethic in this area of the law. In my opinion, this ethic disqualifies a director or senior officer from usurping for himself or diverting to another person or company with whom or with which he is associated a maturing business opportunity which his company is actively pursuing; he is also precluded from so acting even after his resignation where the resignation may fairly be said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, or where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired. (emphasis added.) 70 Principles articulated in Canadian Aero Services in respect of the fiduciary obligations of senior employees have been adopted in Australia in such cases as Bayley and Associates Pty Ltd v DBR Australia Pty Ltd [2013] FCA 1341; Nicholls v Michael Wilson and Partners Ltd [2012] NSWCA 383; Colour Control Centre Pty Limited v Ty [1995] NSWSC 96; Minlabs Pty Ltd v Assaycorp Pty Ltd (2001) 37 ACSR 509; Weldon and Co v Harbinson [2000] NSWSC 272 and Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd (2011) 285 ALR 63, and were also the subject of learned consideration in Batty R, "Examining the Incidence of Fiduciary Duties in Employment" (2012) 18 Canterbury Law Review 187. 71 Turning to the circumstances of Mr Nankervis in respect of the sale of Lot 191 and Lot 170, I am satisfied that Mr Nankervis owed fiduciary obligations to his employer, Investa Properties, in respect of both properties. 72 An important point taken by the respondents during the course of the trial was that the applicants are separate corporate entities, and that a relationship with one of them does not necessarily equate to a relationship with the other. The second and fourth respondents have maintained throughout the proceedings that they in particular have no relationship with the first applicant, Investa Properties, of which Investa Residential is a wholly owned subsidiary, on the basis that Investa Properties was not the registered proprietor of any of the subject lands, had no entitlement to any claim for profits or monies for breach of contract or for any other contravention in relation to Lot 191 or Lot 170. In Investa Properties Pty Ltd v Nankervis (No 2) [2013] FCA 468, I accepted the proposition that a fiduciary obligation owed to a subsidiary company does not automatically transmit fiduciary obligations owed to its holding company. This principle equally applies where a fiduciary obligation is owed to the holding company - those obligations are not automatically owed to the subsidiary. 73 So far as concerns Mr Nankervis however, there is no real dispute by Mr Nankervis that his duties in his employment with Investa Properties included duties in relation to Lot 191 and Lot 170 as claimed by the applicants in their submissions, notwithstanding that Investa Residential was the registered owner of both Lots. It is also clear that, so far as concerned employees in the position of Mr Nankervis, the corporate veil between Investa Properties and its subsidiary Investa Residential was blurred, such that although he was formally employed by Investa Properties he had actual authority to take steps in respect of land (including Lot 191 and Lot 170) formally owned by Investa Residential. That this is so is clear from evidence of Mr Nankervis himself to the effect that he was not actually sure which company was his employer (transcript 30 September 2014 p 2097 l 40). In this context I also note the evidence of Mr Holt, Chief Executive Officer of Investa Land, in his affidavit of 6 December 2013, concerning the restructure of the Investa Property group in or about August 2008 and previous names of companies in the group, and the evidence of Mr Stubbs, that in late 2008 there was a restructuring of the Investa Property Group in that the management and leadership of the commercial and industrial development business, and the residential development business, were combined (transcript 10 June 2014 p 525 ll 4-8). 74 The evidence of Mr Jenkins was that there was a "chain of command" in the Queensland office of Investa, by which Mr Waters, and subsequently Mr Stubbs as Queensland State Manager had responsibility for development management requests and reports as well as supervising other staff (transcript 3 June 2014 p 130). It appears that Mr Waters had initial responsibility in relation to the contract with Brittains Road Pty Ltd concerning Lot 170. Mr Waters continued to have responsibility in relation to the proposed sale of Lot 170 following the internal restructure in the Investa Property Group which resulted in Mr Stubbs moving into Mr Waters' position of Queensland State Manager, because Mr Waters had a good relationship with Mr Bill Thompson, the principal of Brittains Road Pty Ltd. Once the contract involving Brittains Road Pty Ltd "fell over" because the purchaser was unable to complete it, it appears that Mr Waters had no further engagement with any of the lots in the Brentwood site (evidence of Mr Stubbs 10 June 2014 p 530 ll 22-32). 75 Notwithstanding the roles of Mr Waters and Mr Stubbs, it is also clear that in his position as senior development manager, Mr Nankervis played a key role in acquiring intimate knowledge of land under his management, including Lot 191 and Lot 170, and passing that knowledge with informed recommendations in respect of development or other use of that land to more senior management in Investa Properties. From early 2008, Mr Nankervis' role included the preparation of the notes or minutes of Project Control Group (PCG) meetings, which were monthly meetings attended by senior representatives to discuss processes and strategies going forward for the second applicant's residential properties in south east Queensland. Further, the evidence before the Court is that development managers in the position occupied by Mr Nankervis prepared Board papers, including delegated authority approval submissions to go to the Board for approval in respect of dealings with these lots (transcript 5 June 2014 pp 290-291). A key delegated authority approval submission for the Board was prepared by Mr Nankervis on 6 February 2009 in relation to Lot 170, in which Mr Nankervis wrote: The site is irregular in shape and heavily vegetated with steep topography, rising from the south east to the north west, and is unattractive to our target market as only specialty custom built housing can be built on the site. The housing product needs to accommodate steep slope of 10 to 15 degrees, no slab on ground product will be achieved, and this is compounded by the tree retention that council require, and also approval limitations in association with the degree of earthworks allowed on the site. There is no ability to level the site … The table above shows that the sale is at the lower end of the range, however the subject property is considered to be inferior to the other sides due to the steep topography and heavy vegetation. Essentially, the site is discounted to account for the additional house building costs. 76 Mr Jenkins gave evidence - not controverted - that group executives in his position, who made decisions concerning disposal of Investa land, were guided by advice provided by development managers and senior development managers (transcript 3 June 2014 p 148 ll 5-19, p 149 ll 1-9). This evidence was supported by Ms Nicole Prout, finance manager with Investa Properties between March 2008 and September 2013, who said during cross-examination: It is not the case that managers like Nankervis or whatever just make a recommendation and it's signed off; there is a whole process of scrutiny that must gone through before it is ultimately signed off. That was your experience with the company; was it not?---Yes. But it very much relies on the information that you are given by the DMs; Development Managers. 77 Further, it is plain that development managers and senior development managers in Mr Nankervis' position were engaged in preparation of financial and budgetary documentation in relation to development projects concerning Investa land under their management. In her affidavit affirmed 5 December 2013, Ms Prout deposed, inter alia, that: Her responsibilities as finance manager included preparation of business plan models in conjunction with development managers, and assisting development managers prepare monthly cash flow forecast models. During her employment as Queensland finance manager she had regular contact with Mr Nankervis and others in the residential properties team, by way of face to face meetings and telephone discussions. From October to December 2008, she had very frequent contact with Mr Nankervis and the others to prepare and modify their financial models and budgets for the 2009 calendar year. By about mid-October 2008, she and Mr Stubbs, with assistance from Messrs Nankervis, Long and Hopkins, were in the process of preparing the 2009 calendar year budget. In November and December 2008 she received emails from Mr Nankervis attaching cash flow forecast spreadsheet and a forecast settlements summary in respect of the Brentwood Estate. 78 I also note that in her affidavit of 14 May 2014, Ms Prout deposed that she did not see the CB Richard Ellis report on or about 16 December 2008, and even if she had she would have relied on Mr Nankervis for his opinion on whether the costings contained within the report were reasonable based on his experience. 79 Indeed, I note in cross-examination that Mr Nankervis conceded that his role included tracking and reporting on costs and revenues of a project, and making recommendations to more senior management in respect of projects (transcript 29 September 2014 pp 1906-1907). 80 Mr Nankervis was not only a development manager, he was a senior development manager in Investa Properties. As is clear from the evidence before the Court, it was his job to prepare financial and other reports, make recommendations, deal directly with real estate agents on behalf of Investa, and acquire knowledge in relation to such matters as the likely prospects for development. It is not in dispute that these responsibilities extended to both Lot 170 and Lot 191. 81 These duties appeared to be exercised by Mr Nankervis with a minimum of supervision from managers above him in the organisational structure of Investa Properties. In this context, I note that where there is scope for an employee to carry out his or her duties in an unsupervised manner, the employer is vulnerable and more trust and confidence is likely to be placed in an employee. In such circumstances it may be said that there is a greater likelihood for there to be a legitimate entitlement of fiduciary loyalty (cf Batty R, "Examining the Incidence of Fiduciary Duties in Employment" (2012) 18 Canterbury Law Review 187 at 204). 82 It is clear that the relationship between Mr Nankervis and Investa Properties was such that persons who were required to make decisions for Investa Properties in relation to dealings or disposal of development lands relied on Mr Nankervis' knowledge and recommendations to achieve the best results. While his contractual relationship with his employer was such that it could properly be said that a duty of fidelity was an aspect thereof, in my view the scope of his duties and responsibilities, and the knowledge and value judgement which were intrinsic to his role and upon which Investa Properties relied, were such that the relationship was fiduciary. 83 To that extent, Mr Nankervis was obliged to avoid circumstances where his duty to Investa Properties conflicted with his personal interest or that of a third party. He was also obliged to avoid profiting from his position with Investa Properties. It is well-settled that these obligations are inherent in the fiduciary relationship. The position concerning a fiduciary and the "conflict rule" was recognised in 1896 when Lord Herschell explained that: It is an inflexible rule of a Court of Equity that a person in a fiduciary position… is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. (Bray v Ford [1896] AC 44 at 51, cf for example Boardman v Phipps [1967] 2 AC 46 at 123; Chan v Zacharia (1984) 154 CLR 178 at [23]; Breen v Williams (1996) 186 CLR 71 at 113, 137-138; Pilmer v Duke Group Ltd (In Liq) (2001) 207 CLR 165 at [74]; Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at [158].) 84 "Interest" in this context can also extend to that of a third party: as was explained in Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143 at [70]-[74]: The object of the first limb of the conflict rule is to prevent a person who has undertaken to act for someone else from allowing any personal interest to sway or influence that person away from the proper performance of his or her duty to the principal: Chan v Zacharia (198 - 199). A conflict of interest and duty will exist if the interest in question is in opposition to, or in tension with, the duty of loyalty. That will be the case if there is a real and sensible possibility that the interest might sway or influence an agent away from the proper exercise of its duties (which includes powers) to the principal. (emphasis added.) (cf Buitendag v Ravensthorpe Nickel Operations Pty Ltd [2014] WASCA 29 at [55].) 85 A helpful and learned explanation of the "profit rule", to which it is no defence that the principal was unwilling, unlikely or unable to make the profits for which an account is taken or that the fiduciary acted honestly and reasonably, may be found in Finn PD, Fiduciary Obligations (Law Book Company, 1977), where the learned author states: 568. A common, though not very illuminating formulation of a trustee's "fiduciary duty" is that he must not profit, directly or indirectly, from the execution of his trust … A quite indefinite liability is now imposed on fiduciaries, irrespective of whether they have deprived their beneficiaries of some profit-making advantage if, in deriving that profit on their own account, they have made use of their fiduciary position. The ancient decision of Keech v Sandford is usually claimed s progenitor of this liability. (footnotes omitted.) (cf comments in Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378 at 382 and 392; Warman International Ltd v Dwyer (1995) 182 CLR 544 at 558; Maguire & Tansey v Makaronis (1997) 188 CLR 449; Hospital Products at [27]; McCann v Switzerland Insurance (2000) 203 CLR 579; Grimaldi v Chameleon Mining NL (No 2) (2012) 200 FCR 296 at [514].)

Did Mr Nankervis have duties to either of the applicants in respect of the sales office? 88 The applicants submit, in summary, that: Following completion of the sale of Lot 170 by Investa to Two Eight Two Nine, Mr Nankervis, without any authority to do so, had Investa's sales office at the Brentwood site removed to Lot 170. On 12 February 2010, whilst employed by Investa Properties, Mr Nankervis emailed Mr Walker of Projex North and Mr Barclay, advising that the "Brentwood Sales Office power will be disconnected next Tuesday" and that "we need to arrange the re-location of the office". Mr Walker subsequently instructed Shadforths Civil Contractors to assist Projex North in removing the sales office from Brentwood North and relocating it to Lot 170. By letter dated 22 March 2010, Mr Nankervis, on Investa letterhead, wrote to Uber Projects Pty. Ltd. c/- Scott Jenkinson of Warlow Scott Solicitors. The letter states "All ownership of sales [sic] office, materials and content are assigned to Uber Projects Pty. Ltd. by way of compensation for the works that were carried out for nil cost to Investa Property Group". Mr Barclay and his wife were both directors and shareholders of Uber Projects Pty. Ltd. The sales office was relocated to Lot 170. On 27 August 2010, Mr Barclay emailed Mr Tonuri and Mr Nankervis and said, "Lot 48 sales office secured". In circumstances where Investa was seeking to remove the sales office from Brentwood Site, and Two Eight Two Nine required a sales office at "The Outlook" (formerly Lot 170), Mr Nankervis failed to: o relocate the sales office to an alternate site owned by Investa; o inform Mr Holt or anyone at Investa that there was an opportunity to sell the sales office to Two Eight Two Nine or any other entity; and o disclose to Holt or anyone at Investa that the sales office was being relocated to "The Outlook" for use in a development project in which Mr Nankervis held a one-third beneficial interest. By failing to utilise the sales office in another Investa project or alternatively pursue an opportunity to sell the sales office to an interested third party, Mr Nankervis failed to obtain the sales office's maximum realisable value. 89 In particular, I note evidence of Mr Holt in his affidavit of 6 December 2013 to the following effect: 218. The relocation of the Brentwood sales office to the Outlook project (which was previously the Fossil Site and owned by Tonuri's company) was the type of information that Nankervis should have told me about, either in person or otherwise. 219. Whilst I may have been informed by Nankervis of the removal of the Brentwood sales office, I was not informed by Nankervis that the Brentwood sales office would be relocated to the Outlook project. 220. I additionally expected that if Nankervis were to arrange for the removal of the Brentwood sales office, that he would obtain the maximum realisable value if there was an opportunity to sell it to a third party. 90 At the hearing Mr Nankervis gave the following evidence, in relation to this issue, in summary: The sales office sat on three stages of the Brentwood development, which included the office, car park and gardens and playground for stages 1D, E and F, which all had road frontage. Investa was looking for cash into the business and no expenditure in the business during that critical phase of December 2009. In particular, Mr Holt was looking to save $5 million. Mr Holt realised getting rid of the sales office opened up an opportunity for 21 lots that had already been serviced and had road frontage, so it was an opportunity to get cash in the business. Removing the sales office entailed expenditure in including disconnecting the services, removing a car park, removing a playground, removing a landscape garden, removing signage, and removing the whole thing to a development site, so that lots could be surveyed, pegged and sold. Mr Holt instructed Mr Nankervis to try and get rid of the sales office at nil cost. 91 Evidence in relation to the sales office was also given by Mr Long and Mr Tonuri. 92 At the hearing Mr Long said: Yes. In the discussions around that sales office and those stages of that development, with Mr Holt and the development team, do you recall, because of the business plan and the cost predicament that was placed on the Queensland group, that the sales office had to be removed at a nil cost to investor?---I remember - I remember the discussion about making sure we got rid of it. I can't remember the dollar figure discussion that was had at the time. Can you recall any further details around those discussions that were had with Mr Holt in Ann Street? Just because - - -?---The discussion was that it needed to go and it just needed to get off the site, so essentially the development could occur. Yes. So you would confirm that for the development to occur in line with the business plan, the sales office had to be removed as a priority?---It had to be removed. I don't know about the priority. I'm not sure - I can't remember the timings. (Transcript 11 June 2014 p 696 ll 19-33.) 93 In his statement, Mr Tonuri gave the following evidence: 87. In about March 2010, I was told by Mr Barclay that Oliver Hume South East Queensland could arrange for a sales office in the locality that was no longer needed by Investa to be relocated to Lot 170 and used as a sales office for the marketing of the finished lots. 88. Mr Barclay told me that the sales office was essentially "free to a good home" and that it could be relocated if I paid for the transportation and recommissioning costs of approximately $60,000. It seemed like a good arrangement to me. I gathered that property development companies die this from time to time when one project had sold out. 94 From this evidence it is difficult to identify the nature of any duty owed by Mr Nankervis to either of the applicants in relation to the sales office. At its highest, it seems that Mr Nankervis was instructed to have the sales office removed from the Brentwood site. 95 On examination of the evidence I accept Mr Nankervis' evidence that he was instructed to have the sales office removed, if possible, at nil cost to Investa. Mr Holt's evidence in relation to the sales office is vague, and in my view influenced by subsequent events involving Mr Nankervis and Two Eight Two Nine. In contrast, Mr Nankervis' recollection of the task he was asked to perform in relation to the sales office is relatively detailed. Notwithstanding that Mr Long's memory of relevant events is vague, I consider that it is consistent with Mr Nankervis' recollection - namely that the sales office was something which Investa wished to be "rid of". 96 I give Mr Tonuri's relatively little weight, primarily for reasons to which I will later turn, but also because his evidence relates to an understanding communicated to him by Mr Barclay rather than anyone at Investa, and is perforce of indirect uncertain reliability as to the state of mind of either of the applicants. 97 The nature of a "fiduciary obligation" was explained in Grimaldi as follows: [177] As to who is a " fiduciary", while there is no generally agreed and unexceptionable definition, the following description suffices for present purposes: a person will be in a fiduciary relationship with another when and insofar as that person has undertaken to perform such a function for, or has assumed such a responsibility to, another as would thereby reasonably entitle that other to expect that he or she will act in that other's interest to the exclusion of his or her own or a third party's interest: on who is a fiduciary , see Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 ("Hospital Products") at 96-97; News Limited v Australian Rugby Football League Ltd [1996] FCA 1256; (1996) 64 FCR 410 at 538-541; and see generally Conaglen, Fiduciary Loyalty, Ch 9 (2010). [178] As Australian law presently stands, the obligation of loyalty imposed upon a fiduciary is expressed in two overlapping proscriptive "themes" which govern the fiduciary's liability to account to his or her own beneficiary. The best known formulation of these is that of Deane J in Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178 at 198-199: 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. 98 In my view, Mr Nankervis' task to organise removal of the sales office cannot properly be described as one arising from an undertaking from which Investa would be reasonably entitled to expect that he would act in Investa's interest to the exclusion of his own or a third party's interest, and in respect of which Mr Nankervis was expected to disclose any interest in the outcome. The facts before the Court are not akin to cases where a beneficiary cannot take advantage of an opportunity and the opportunity is instead - profitably - appropriated by the fiduciary without the informed consent of the beneficiary (cf Regal (Hastings) Ltd v Gulliver; Boardman v Phipps at 109; Furs Ltd v Tomkies (1936) 54 CLR 583, and see the discussion of relevant issues by Young J in Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd [1998] NSWSC 413). 99 Such evidence as is before the Court suggests that Investa was indifferent as to the fate of the sales office - the applicants simply wanted it removed. It was of no value to them - rather it was an impediment to another profit-making activity. Mr Nankervis' evidence supports a finding that his authority extended to a decision to give the sales office away for no cost, provided it was removed from the Brentwood site and Investa incurred no costs in its removal. Presumably this authority could have extended to the dismantling and destruction of the sales office, provided it cost Investa nothing. In my view, it would have extended to Mr Nankervis removing the sales office and keeping it for himself. 100 The duty imposed on Mr Nankervis in relation to the removal of the sales office was to undertake that removal efficiently and at no cost to Investa. In my view this duty arose either at common law or within the terms of his employment contract with the first applicant. In any event, it appears that the task of organising the removal of the sales office was performed by him satisfactorily in accordance with his instructions. I am not persuaded that either the existence or performance of this task enlivened the interest in equity in the circumstances of this case. I am not of the view that any conduct of Mr Nankervis in relation to the sales office entitled either of the applicants to equitable compensation as has been sought.

The applicants' submissions 101 Oliver Hume SEQ was appointed as a real estate agent by Investa Residential to sell Lot 191 pursuant to a PAMDA Form 22a on 16 July 2009. The relationship was effectively terminated on 8 February 2010. These facts were not disputed. 102 The applicants submitted that the principal-agent relationship is a category-based fiduciary relationship which exhibits the features of trust, confidence and vulnerability giving rise to the no-conflict rule. 103 The applicants claimed that the Form 22a contained the following notice which they say formed an express contractual term between Oliver Hume SEQ and Investa Residential: When performing this service, the agent must comply with the code of conduct for agents as set out in the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 (Qld). 104 Materially, the applicants note in the amended statement of claim that the Real Estate Agency Practice Code of Conduct provided that a real estate agent must: comply with a fiduciary obligation incurred as a real estate agent (reg 6); act in a client's best interests unless it is unlawful or unreasonable to do so (reg 9); and not accept an appointment to act, or continue to act, as a real estate agent for a client if doing so will place the agent's duty or interests in conflict with the client's interests (reg 17). 105 The applicants pleaded that it was a term of the agreement between Oliver Hume SEQ and Investa Residential, implied by law, that Oliver Hume SEQ owed duties to Investa Residential to: (a) take reasonable care in the performance of its duties; (b) act with fidelity and good faith; and (c) act with mutual trust and confidence. 106 The applicants pleaded further that Oliver Hume SEQ owed Investa Residential (not Investa Properties as far as Lot 191 is concerned) the following fiduciary obligations: (a) to act in good faith and with fidelity; (b) to avoid and disclose to Investa Residential all actual or perceived conflicts of interest; (c) to act in the best interests of Investa Residential; (d) to give Investa Residential the full benefit of the knowledge and skill of its employees, and in particular, to pass on to Investa all information that it or they had about the marketing and sale of the properties that were the subject of its appointment, that might be relevant to the marketing and sale; (e) not to profit from its position, and not to allow its employees to profit, other than by receiving remuneration in accordance with its appointment, without full disclosure to and the informed consent of Investa Residential; and (f) not to assist: • any person with whom it or any of its employees was associated; or • any entity which it, or any of its employees, or a person whom it or any of its employees was associated with or had an interest in; or • any person or entity from whom or from which it or any of its employees could expect a benefit; to purchase Lot 191, without full disclosure to and the informed consent of Investa Residential. 107 In relation to Mr Barclay, the applicants claim that he owed fiduciary obligations to Investa Residential because he was employed by and was involved in providing the real estate services of Oliver Hume SEQ for the sale of Lot 191 (amended statement of claim paras 102K and 102L). In submissions, the applicants expanded slightly on this point by claiming that Mr Barclay was Oliver Hume SEQ's employee solely responsible for the day-to-day carriage of Lot 191 and in that respect was personally in a fiduciary relationship with Investa.

Consideration - Oliver Hume SEQ and Lot 191 111 It is clear from the submissions of Oliver Hume SEQ that it accepts the existence of a fiduciary relationship with the second applicant, Investa Residential, in respect of the sale of Lot 191. Indeed it is the nature of the fiduciary duties which are in contention. Mr Barclay however submits that no such relationship existed between himself and Investa Residential. 112 The relationship of real estate agent and the principal appointing the agent is usually accepted as being a fiduciary relationship. An early authority on point is McKenzie v McDonald [1927] VLR 134 where Dixon AJ observed at page 145: He assumed the function of advising and assisting a woman in a difficult situation in the acquisition of a residence by means of the disposal or pledging of her property. He was necessarily furnished with an intimate knowledge of her financial position, her obligations, and family needs. He proceeded to advise her upon the wisdom and practicability of raising money by mortgage, and acted for her in an effort to do so. He undertook the sale of her farm, and acquired such information as he could in relation to it, and offered his counsel as to its condition and the price she had asked and in effect should ask. In this circumstance he was, in my opinion, an agent who came within "the rule of the Court ; which, however, does not prevent an agent from purchasing from his principal, but only requires that he shall deal with him at arm's length, and after a full disclosure of all that he knows with respect to the property" ... (emphasis added.) 113 More recent cases have continue to support this proposition. 114 In Gathergood v Blundell & Brown Ltd [1991] 1 NZLR 405, the Court of Appeal of New Zealand found that a real estate agent was subject to the obligations not to profit from a position of trust and not to allow a conflict to arise between duty and interest. 115 In Pedersen v Larcombe [2008] NSWSC 1362 Palmer J observed: [48] If [the real estate agent] Mr Larcombe entered into a relationship of agency with Mr Pedersen for the sale of the Property which was unqualified by any special limitation, he thereby accepted a fiduciary position which imposed upon him a duty of loyalty, i.e. a duty to act in the best interests of Mr Pedersen in carrying out the agency. Correspondingly, Mr Larcombe could not, in carrying out his agency, place himself in a position in which his personal interest conflicted with his duty to advance the interests of Mr Pedersen. He could not even place himself in a position in which there was a significant potential for such a conflict. [49] If Mr Larcombe, or his alter ego, Varinya, has received a benefit or gain as a breach of his duty of loyalty then Mr Larcombe or Varinya must account for that benefit or gain to Mr Pedersen. Mr Larcombe and Varinya may escape liability for what otherwise would be a breach of fiduciary duty only if Mr Larcombe made full disclosure to Mr Pedersen of all relevant circumstances constituting the breach, and Mr Pedersen freely gave consent … 116 Recognition of the fiduciary nature of the relationship between principal and real estate agent can also be seen in Sultana Investments Pty Ltd v Cellcom Pty Ltd [2009] 1 QdR 589; Gonsalves v Debreczeni [1998] NSWSC 588 and Currabubula Holdings Pty Ltd v DRE Downtown Real Estate Pty Ltd [1998] 135 NSW 47. In this context I note in particular the following comments of the Court in Gonsalves: The authorities seem to suggest (though none actually deal with the point in open discussion), that the fiduciary duty of a licensed real estate agent who is employed by a corporation is exactly the same as that of the corporation. It is almost as if for fiduciary purposes the corporate veil is lifted. Examples are Blundell & Brown Ltd v Gathergood [1989] ANZ Conv Rep 599, affirmed by the New Zealand Court of Appeal as Gathergood v Blundell & Brown Ltd [1991] 1 NZLR 405 and Council of Auctioneers & Agents v G J Alexander Pty Ltd [1972] 2 NSWLR 375. This is in accordance with principle, because as Finn says, op cit, at para 411, "Any person employed, or engaged as agent , to assist or to advise a fiduciary in the discharge of the fiduciary's duties to his beneficiary will himself be held to be in a confidential relationship with that beneficiary." Prime examples are Ex parte James [1803] EngR 536; (1803) 8 Ves 337; 32 ER 385 and De Bussche v Alt (1878) 8 Ch D 286. 117 Key differences between real estate agents and other types of agents lie in the fact that, generally speaking, real estate agents conduct businesses wherein they act for multiple vendors who are potentially competing to sell property, and further that, as a general proposition, real estate agents cannot bind their principals to contracts of sale. In this respect, the fiduciary obligations owed by real estate agents to their principals are inevitably moulded by the nature of the agreement and any specific terms of appointment. The general principle that fiduciary relationships may be shaped by co-existing contractual arrangements was reiterated by Mason J in Hospital Products at 99-100 where his Honour observed: That contractual and fiduciary relationships may co-exist between the same parties has never been doubted. Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction. (cf Gummow J in Breen v Williams at 132-133; John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 206 ALR 462 at [90]-[93]; Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 at [104]; Blackmagic Design Pty Ltd v Overliese (2011) 276 ARR 646 at [117]; Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 206; Bacnet Pty Limited (ACN 115 594 075) v Lift Capital Partners Pty Limited (in liquidation) (2010) 266 ALR 666 at [107].) 118 That real estate agents are not "agents" within the normal understanding of this term is an issue which was examined in Premium Real Estate Ltd v Stevens [2009] 2 NZLR 384, where a real estate agent retained by vendors of a valuable residential property did not tell the vendors that the purchaser she was introducing to them, and to whom they sold the property, was a property speculator with whom the real estate agent had an ongoing business relationship. Elias CJ said: [23] Real estate agents, like other canvassing agents, introduce purchasers and vendors who contract directly rather than by the agent. Such canvassing agents are said by the editors of Bowstead and Reynolds on Agency to be "on the fringe of the central agency principles used by the common law". A real estate agent's relationship with the principal is shaped by contract. Although subject to fiduciary obligations towards the principal, the scope of the obligations depends on the scope of the duties he is asked to undertake. [24] A canvassing agent must act in good faith in what he does and may not obtain a benefit for himself or another without the informed consent of the principal … … [26] Under general agency principles, an agent must keep his principal informed about matters of concern to him. It may be queried whether a general obligation of this nature is realistically expected of canvassing agents such as real estate agents. There seems little authority on the point … [27] It seems to me arguable that there is no general rule that real estate agents who introduce purchasers to deal directly with a vendor breach fiduciary obligations imposed within the scope of their contract if they fail to communicate information about the purchaser which might be material. It depends on the context. Real estate agents are obliged to pass on offers to vendors, because such obligation is squarely within the scope of what they are engaged to do. If the non-disclosed information affects advice given by the agent (such as advice as to price or terms), non-disclosure may well breach the obligation of loyalty. There will be breach of the obligation of loyalty if non-disclosure amounts to the preference of the interests of the agent or another party (as may be the case, for example, if a risk associated with the purchaser material to the sale is not disclosed in order to complete a sale and obtain commission). I have reservations, however, whether a more general duty to provide material information, such as it is appropriate to impose upon agents who have power to bind their principals, applies in all cases. It may set the standard to be required of a canvassing agent too high. (footnotes omitted.) 119 Blanchard J for the majority said: [68] … It is beyond doubt that in that capacity Premium was a fiduciary for the Stevens and owed them a duty of loyalty. It is responsible for any breach of that duty by any of its employees. To fail to disclose a material matter about the person being introduced as a prospective purchaser - a matter objectively likely to operate on the principal's judgment - is a breach of the duty of loyalty. [69] In our view, the courts below were quite correct in finding that a breach of that duty was committed by Ms Riley when she failed to inform the Stevens that Mr Larsen was a person who frequently bought residential properties and shortly afterwards resold them at a profit. That information was very likely to have affected the Stevens' attitude towards his offer and the response they would make. It would have alerted them to the fact that he might well be intent on buying and reselling their property within a relatively short period of time and that, if so, he probably considered it was worth significantly more than he was offering. That was a matter very material to their consideration of his offer and of the possibility of their property attracting a better offer from someone who was not a dealer but wanted the house as a family home. 120 That it is the business of real estate agents to act, simultaneously, for multiple principals was discussed by Blanchard J in Stevens: [75] Their Lordships said [in Kelly v Cooper [1993] AC 205] that it is the business of estate agents to act for numerous principals and that where properties are of a similar description, there will be a conflict of interest between the principals, each of whom will be concerned to attract potential purchasers to their property rather than that of another. Despite this conflict of interest, estate agents must be free to act for several competing principals otherwise they will be unable to perform their functions. In the course of acting for each of their principals, the Board said, estate agents will acquire information confidential to that principal. It could not be sensibly suggested that an estate agent is contractually bound to disclose to any one of his principals information which is confidential to another of his principals. [76] To this point, we respectfully agree with the Privy Council's reasoning. Anyone who lists a property with a real estate agent must be taken to accept that the agent will simultaneously be offering competing properties for sale. An agent who did not have numerous offerings would be unlikely to attract many buyers … [However] As the editors of Bowstead and Reynolds on Agency say, the implication of a term excluding fiduciary duties, or particular duties, is not easy to justify. 121 The effect this business model has on the fiduciary relationship with each principal was examined by Professor Dal Pont who observed in relation to Kelly v Cooper [1993] AC 205 and Stevens as follows: Estate agents, like other fiduciaries, must eschew an engagement where a duty to a third party conflicts with the fiduciary duty to their principal ("duty-duty" conflict). However, as the scope of fiduciary duties owed by an agent to a principal is defined by the terms of the contract of agency, the scope of certain fiduciary duties may be modified or excluded by its express or implied terms. This may be necessary, say, where the agent's business is to act for multiple principals, whose interests may in some circumstances conflict … The decision in Kelly has been criticised for negating the fiduciary standard by "setting the agent's duties at a level no higher than that of business competitors dealing at arm's length", and indeed it appears to buck the more recent trend of English case law towards strictness in fiduciary duties … (footnotes omitted.) (Dal Pont GE, Equity and Trusts in Australia (6th ed, Lawbook Co, 2015) para 4.185.) 122 In this case, Oliver Hume SEQ was appointed as real estate agent in relation to the sale of Lot 191 pursuant to a Form 22a under the PAMDA. I note that PAMDA has now been repealed, effective 1 December 2014. At all material times however it was in force and is applicable in this case. 123 Section 154 of PAMDA provided for a regulation to prescribe a code of conduct about real estate agency practice. Such a regulation was promulgated in the form of the Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 (Qld) (the Regulation). The Schedule to the Regulation contained a Code of Conduct, the object of which was to increase the accountability of real estate agents for their actions in carrying on the business of a real estate agent (Schedule s 2(1)). Section 4 of the Schedule provided further that the Code of Conduct contained provisions with which a real estate agent must comply, and that the Code of Conduct overrode any instruction or request that did not comply with the code from a client or, in the case of an employed the real estate agent, from the agent's employer. 124 Part 2 of the Schedule to the Regulation sets out general rules of conduct. Section 6 provided: A real estate agent must comply with a fiduciary obligation incurred as a real estate agent. 125 Materially other rules with which real estate agents were subject comply included: to act with honesty, fairness and professionalism (s 7); to exercise reasonable skill, care and diligence (s 8); to act in the client's best interests (s 9); to act in accordance with the client's instructions (s 10); to keep the client informed of developments (s 11); in the case of real estate agents who are principal licensees employing registered employees - to take reasonable steps to ensure a registered employee of the agent complies with the Act and the Code of Conduct in relation to the agent's business (s 12); to avoid engaging in conduct that is fraudulent or misleading (s 14); to refrain from accepting an appointment to act, or continuing to act, as a real estate agent for a client if doing so would place the agent's duty or interests in conflict with the client's interests (s 17). 126 Section 21 also provided: Advice about market price or rent (1) A real estate agent, in attempting to obtain an appointment to sell, buy, exchange or lease property, must not knowingly mislead a person about the property's market price. (2) If a real estate agent gives a person an opinion about the market price or market rent for property, the agent must not accept instructions from the person to act as a real estate agent for the property unless the agent has given the person a written statement of the material facts that the agent has taken into account in forming an opinion about the property's market price or market rent. (3) A real estate agent appointed to sell, buy, exchange or lease property must keep the client informed, in accordance with the client's instructions, if any, of the agent's opinion about the current market price or market rent of the property. (4) Also, the real estate agent must tell the client if the agent considers the selling or purchase price of property expected by the client is substantially more or less than the market price of the property. 127 The Form 22a agreement prescribed by PAMDA, and pursuant to which Oliver Hume SEQ was appointed, relevantly provided: the appointment was limited to Stage 2A and 2B (including Lot 191); retail sales were to attract a fee of 2% of the sale price plus GST; bulk deals (6 or more) were to attract a fee of 3% plus GST; the client was Clarendon Residential Group Pty Ltd (now Investa Residential), signed on its behalf by Mr Nankervis; the agent was Oliver Hume SEQ, contact details being those of Mr Barclay; the appointment was a single appointment for an exclusive listing; the appointment was not assignable to another real estate agent by Oliver Hume SEQ; Oliver Hume SEQ would book advertising on realestate.com using its account and Clarendon Residential Group Pty Ltd would be responsible for payment of all accounts. 128 Statutory in form, the rules in the Schedule to the Regulation impose remarkably similar obligations on real estate agents to those imposed by equity, as is plain from a comparison of the rules with the principles in the cases I set out earlier in this judgment. Importantly, PAMDA does not purport to extinguish any fiduciary obligations otherwise existing between the principal and the real estate agent. Indeed while s 6 of the Schedule specifically provides that real estate agents "must comply with a fiduciary obligation incurred as a real estate agent", this seems to rather preserve equitable obligations existing beyond those which might be incorporated into the statutory obligations specifically set out in the Schedule itself. Such obligations would include that a fiduciary wishing to purchase from the principal must deal at arm's length and after a full disclosure of all that known with respect to the property (McKenzie), that the fiduciary must not profit from the position of trust held (Gathergood, Stevens), and that the fiduciary must disclose a material matter about the person being introduced as a prospective purchaser (Stevens). 129 In the circumstances, I see no reason why the obligations, prescribed by rules in the Code of Conduct in the Regulation which I have set out, and the wider fiduciary obligations I have just listed, were not owed by Oliver Hume SEQ to Investa Residential. Those obligations certainly extend beyond the limited duty to disclose any interests Oliver Hume SEQ held in the sale of Lot 191 as submitted by Oliver Hume SEQ in this case. In any event, even had the parties sought to agree to so limit the statutory obligations otherwise owed by Oliver Hume SEQ, it appears that such a limitation would have been ineffective in light of the terms of s 4 of the Schedule to the Regulation. Further there is certainly nothing in the contract embodied in the Form 22a which prima facie modifies the fiduciary obligations existing in equity by Oliver Hume SEQ to Investa Residential. 130 The position is different in respect of Mr Barclay. He submits that no obligations under the 2009 PAMDA appointment of Oliver Hume SEQ were imposed on Mr Barclay and he could not be sued for non-performance of those obligations. I accept that this is the case. However as I have already noted, PAMDA does not purport to extinguish fiduciary obligations otherwise existing between real estate agent and principal.

Consideration - Mr Barclay and Lot 191 131 Mr Barclay was a director of Oliver Hume SEQ, and was the primary contact at Oliver Hume SEQ with Investa Residential in respect of Lot 191. As was explained by Professor Finn (as his Honour then was) in his landmark text Fiduciary Obligations (Law Book Company, 1977) in relation to such relationships: 411. Any person employed, or engaged as agent, to assist or to advise a fiduciary in the discharge of the fiduciary's duties to his beneficiary will himself be held to be in a confidential relationship with that beneficiary. A trustee for sale, for example, may employ an agent actually to effect the sale, and … as a trustee for the sale of an estate could not purchase the estate for himself, so the agent of the trustee employed for the purpose of the sale could not purchase it. 412. … However, before the agent or employee will attract the disability also imposed on his principal or employer, it must be shown that he has been involved in some significant way with the duties assumed by his principal or employer in relation to the property in question (footnotes omitted.) 132 Later the learned author continued in relation to an employee of a person in a fiduciary relationship with a beneficiary potentially placing himself or herself into a position of conflict of duty and interest: 468. … But the supervision of Equity begins at the point where it can be proved positively that a person has, by his own undertaking, consented to act in a particular matter in a capacity other than as his own principal - where he has undertaken "to act in the interests of another person" … 469. The one area where contention does arise when it is sought to impose a fiduciary character on a person, is the chain relationship, that is, where B agrees to act on A's behalf in some matter and then employs or relies on C actually to perform the undertaking. In Powell & Thomas v Evan Jones & Co for example, agents were employed on a commission basis to obtain an advance of money. With the principal's consent a sub-agent was employed, the sub-agent and the agents agreeing to share the agent's commission … It was confirmed in the Court of Appeal that, irrespective of whether or not there was privity between the sub-agent and the principals, their relationship was a fiduciary one … This decision was followed in New Zealand in a case where a law-clerk, employed by his principals to assist clients to invest in securities, sold his own security to a client without disclosing his interest. But these cases aside, the courts have had difficulties in adapting the conflict rule to chain relationships. It seems to be settled - though by no means satisfactorily - that where B is in a fiduciary relationship with A, and he employs C actually to perform part of his engagement with A, C will not, ipso facto, also be in a similar relationship with A. Consequently an employee is not necessarily a fiduciary of his employer's beneficiary simply because, in the course of his employment, he does something which will ultimately benefit that beneficiary. The cases, however, give no real guidance as to when an A-C relationship will be fiduciary. The only working hypothesis which can be advanced is that if B is engaged by A to perform some service on his behalf, and then B passes that work onto C, C being given the substantial performance of B's undertaking and knowing that what he is doing is for A's benefit, then the A-C relationship will be a fiduciary one for the purposes of the services C in fact renders. (footnotes omitted.) 133 In relation to this point - while not of a superior Court, the decision of the South Australian District Court in Moffa v Newmark Commercial Pty Ltd (No 2) [2003] SADC 148 is directly relevant in its consideration of the principles explained in Finn. In that case, the Court found that the real estate agent Newmark Commercial Pty Ltd, through its employees Horner and D'Alessandro, had committed breaches of duty to the plaintiffs in its capacity as agent and fiduciary, including by acting on both sides of a sale transaction. At [8] the learned District Court Judge said: In my opinion, the case before me falls within the second category discussed by Finn. Having taken on the substantial performance of Newmark Commercial's undertaking and in the knowledge that what they were doing was for Newmark Commercial's benefit, Horner and D'Alessandro can be treated as having been in a fiduciary relationship with the plaintiffs for the purposes of the services that they rendered. 134 His Honour also referred to Grantwell Pty Ltd v Franks (1993) 61 SASR 390 where the majority of the Full Court of the Supreme Court of South Australia held the duties of a fiduciary were owed to the purchasers by both the employee and his employer company (a real estate agent). His Honour concluded: [11] … In this case, I consider that the nature and proximity of Horner and D'Alessandro's relationship with Moffa was such as to impose upon each of them, as well as upon Newmark Commercial, a fiduciary duty to the plaintiffs. [12] In the result, the plaintiffs are entitled to judgment against Newmark Commercial for breaches of duty as agent and fiduciary, and against each of Horner and D'Alessandro for breaches of duty as fiduciary. 135 In this context I also note the decision of the High Court of New Zealand in Turner v Sigglekow [2010] NZHC 1825, where the Court accepted that a vendor had standing to commence proceedings against the employee of the appointed real estate agent, and comments in Gonsalves. 136 In my view, for similar reasons to those found in the cases I have just examined, Mr Barclay was in a fiduciary relationship with Investa Residential in respect of Lot 191. He was the primary contact at Oliver Hume SEQ with Investa Residential, in respect of Oliver Hume SEQ's engagement as real estate agent by Investa Residential, for the sale of Lot 191. He was a director of Oliver Hume SEQ, its most senior officer in the Queensland office, and at all material times was in charge of the Queensland office (transcript 3 October 2014 p 2387). He was responsible for the implementation of the Oliver Hume strategy for Queensland, business development and sourcing new projects for project marketing, and was the person at Oliver Hume SEQ to whom the sales manager reported (transcript 3 October 2014 p 2388 ll 19-31). His was the signature on the Form 22a agreement between Investa Residential and Oliver Hume SEQ concerning the disposition of Lot 191 and the role of Oliver Hume SEQ in assisting Investa Residential to sell that property. To conclude other than that Mr Barclay was in a fiduciary relationship with Investa in relation to Lot 191, would be to ignore the plain facts before the Court.

The applicants' submissions 137 In paragraph 162E of the statement of claim the applicants plead: 162E. Because of facts alleged above, Oliver Hume SEQ had fiduciary obligations to Investa Properties and Investa Residential Group while providing services in relation to Lot 170: (i) To act in good faith and with fidelity; (ii) To avoid and disclose to Investa Properties or Investa Residential Group all actual or perceived conflicts of interest; (iii) To act in the best interests of Investa Properties and Investa Residential Group; (iv) To give Investa Properties and Investa Residential Group the full benefit of the knowledge and skill of its employees, and in particular, to pass on to Investa Properties or to Investa Residential Group all information that it or they had about the marketing and sale of the properties that were the subject of its appointment that might be relevant to the marketing and sale; (v) Not to profit from its position, and not to allow its employees to profit, other than by receiving remuneration in accordance with its appointment, without full disclosure to and the informed consent of Investa Properties and Investa Residential Group; and (vi) Not to assist: • Any person with whom it or any of its employees was associated; or • Any entity in which it, or any of its employees, or a person whom it or any of its employees was associated with or had an interest in; or • Any person or entity from whom or from which it or any of its employees could expect a benefit, to purchase Lot 170, without full disclosure to and the informed consent of Investa Properties and Investa Residential Group. 138 In this respect the applicants submit as follows: the respondents sought to portray the activity of Oliver Hume SEQ in relation to Lot 170 as a voluntary and self-interested response to an offer made to real estate agents generally. this is not the case however because Investa made a specific request to Oliver Hume SEQ to do something on its behalf, namely to use its market resources to find a purchaser of a particular property, on specified conditions. Investa made no such request in similar terms to any other agent. The minutes of the meeting of Investa's Project Control Group record that only Oliver Hume had been asked to find a back-up purchaser for Lot 170 - they do not refer to any other agent doing so. Investa also required that Oliver Hume SEQ report regularly on its progress in finding a purchaser, and Oliver Hume SEQ agreed to do this and generally complied. Once Oliver Hume SEQ had agreed to find a purchaser, Mr Barclay told the applicants that Oliver Hume SEQ contacted and interviewed potential purchasers, conducted site inspections, acted as an intermediary between Investa and the purchasers, advised on the pros and cons of different purchasers and actively selected the purchasers to whom it would promote the sale. The fiduciary relationship between either or both of the applicants as beneficiary and Oliver Hume SEQ as fiduciary was not based upon a formal appointment as agent for sale - rather it arose because Oliver Hume SEQ undertook to act for Investa in a matter requiring a high degree of trust and confidence in its honesty and integrity, and in which either or both of the applicants were vulnerable to dishonest or unscrupulous activity. The no-conflict rule in particular applied to Oliver Hume SEQ in its dealings with the applicants, because it was in a position where its director and state general manager Mr Barclay had a substantial personal interest in the relevant transactions. Mr Barclay dealt with either or both of the applicants in relation to Lot 170 as agent for Oliver Hume SEQ, and as he was Oliver Hume SEQ's employee solely responsible for the day to day carriage of the matter, he was personally in a fiduciary relationship with either or both of the applicants in relation to Lot 170.

Oliver Hume SEQ's submissions 139 Oliver Hume SEQ submits, in summary: Investa Residential initially offered Oliver Hume SEQ (through Mr Barclay) the agency for the en globo sale of Lot 170 on 16 July 2008, with the commission to be 1% of the final contract price. The offer was never taken up, and no Form 22a was entered into. This was likely due to the fact that Investa Residential shortly thereafter sourced its own potential purchaser of the site. When the second applicant entered into a contract of sale with Brittains Road Pty Ltd to sell Lot 170 on 11 August 2008 for a contract price of $1,750,000 (inclusive of GST), this sale was achieved as a result of the internal efforts of Investa Residential. No agent was involved and none identified in the contract. On 27 November 2008, Mr Nankervis wrote by email to Mr Barclay in relation to Lot 170, which included the following: We are willing to pay Oliver Hume 1% sales commission for an en globo sale, but if you feel that you have a better opportunity in seeking your sales commission at the purchaser end feel free to pursue. We will not formalise your engagement to act on our behalf at this stage until you advise. That email specifically noted that the second applicant would not formalise Oliver Hume SEQ's engagement to act on behalf of Investa Properties at that stage until Mr Barclay advised. There is no evidence before the Court that either of the applicants formally appointed Oliver Hume SEQ as agent in relation to the sale of Lot 170. Mr Stubbs in cross-examination accepted that this was the case (transcript 10 June 2014 p 615 ll 45-46). It appears that the applicants had contemplated using a number of agents for the sale of the site. In an email from Mr Jenkins to numerous parties in the Capital Transactions Team of Investa on 18 February 2009, headed "Investa Land Divestment Strategy - Plan B", Mr Jenkins wrote: Just wanted to provide some clarity in relation to the Investa Land divestment process and co-ordination. The Investa Land Senior team will be responsible for the planning and implementation of the Divestment Strategy with the assistance where required of the Office Cap Trans team. As the success or otherwise of our divestment strategy is so critical to the survival of the Investa Land business, I will be leading this process with proactive input from my Senior State based team. We will meet and provide you (Cap Trans team) with weekly updates on our progress. In addition we will be seeking your input and assistance with sourcing potential Purchasers and with the preparation of D/D data rooms, etc. On 20 February 2009, Mr Jenkins sent a subsequent email, the heading of which was "Divestment Strategy - Plan B", to Investa staff including Mr Cameron Holt, Mr Gavin Stubbs and Mr Nankervis, attaching the "Project Plan & Initial Divestment contact list". The Divestment Contact List identified agents in respect of Brentwood North as "Oliver Hume - Adam Barclay, LJ Hooker - Kevin Doodney, Ray White Special Projects". The fiduciary relationship is pleaded to have arisen because Investa Residential "engaged" Oliver Hume SEQ and thereby Mr Barclay to provide services to Investa Residential in connection with the sales and marketing of other lots in the Brentwood site (amended statement of claim para 162D(a)). It is then alleged that acting "pursuant to that engagement", Oliver Hume provided services and became aware of plans, approvals, reports and knowledge about the applicants' intentions (amended statement of claim para 162D(b)-(d)). However, on the evidence before the Court there was no "engagement" imposing mutual obligations on any party. At its highest, Mr Barclay was engaging in activity "on spec" and could at any time have walked away. There was no retainer of Oliver Hume SEQ by either of the applicants in relation to Lot 170. While a commercial relationship not involving a contractual arrangement can give rise to a fiduciary duty, the applicants do not identify the precise features of any alleged relationship between Oliver Hume SEQ and either of the applicants which made it a fiduciary relationship, including any power or discretion which either of the applicants reposed in Oliver Hume SEQ.

No formal appointment 143 Both Oliver Hume SEQ and Mr Barclay placed considerable weight in their submissions on the absence of a formal appointment under PAMDA of Oliver Hume SEQ as real estate agent, to support the argument that no fiduciary relationship could exist in the absence of such appointment. The rationale of this argument is that s 133 and s 134 of PAMDA appear prescriptive in respect of appointment of real estate agents, and they further provide that any appointment of real estate agent outside the formal structure provided by PAMDA is ineffective. At material times these sections provided: 133 Appointment of real estate agent - general (1) A real estate agent must not act as a real estate agent for a person (client) to perform an activity (service) for the client unless - (a) the client first appoints the real estate agent in writing; or (b) a previous appointment by the client is assigned to the real estate agent under the terms of that appointment or under section 135A and the appointment is in force. Maximum penalty - 200 penalty units. (2) The appointment may be for the performance of - (a) a particular service (single appointment); or (b) a number of services over a period (continuing appointment). (3) The appointment must, for each service - (a) state the service to be performed by the real estate agent and how it is to be performed; and (b) state, in the way prescribed under a regulation, that fees, charges and commission payable for the service are negotiable up to any amount that may be prescribed under a regulation; and (c) state - (i) the fees, charges and any commission payable for the service; and (ii) the expenses, including advertising and marketing expenses, the agent is authorised to incur in connection with the performance of each service or category of service; and (iii) the source and the estimated amount or value of any rebate, discount, commission or benefit that the agent may receive in relation to any expenses that the agent may incur in connection with the performance of the service; and (iv) any condition, limitation or restriction on the performance of the service; and (d) state when the fees, charges and any commission for the service become payable; and (e) if the service to be performed is the sale or letting of property or the collecting of rents and commission is payable in relation to the service and expressed as a percentage of an estimated sale price or amount to be collected, state that the commission is worked out only on the actual sale price or the amount actually collected; and (f) if the appointment is for a sole or exclusive agency, state the date the appointment ends. Note - For additional requirements for an appointment for a sole or exclusive agency, see section 135. (4) A continuing appointment must state - (a) the date the appointment ends; and (b) that the appointment, other than to the extent it relates to the sale of land or interests in land, may be revoked on the giving of 90 days notice, or some lesser period (not less than 30 days) agreed by the parties. (5) The notice revoking a continuing appointment must be by signed writing given to the other party. (6) The revocation of a continuing appointment does not affect existing contracts entered into by the real estate agent on behalf of the client. (7) The appointment must be signed and dated by the client and the real estate agent or someone authorised or apparently authorised to sign for the agent. (8) The real estate agent must give a copy of the signed appointment to the client. Maximum penalty - 200 penalty units. (9) If an appointment under this section authorises a sale by auction, an appointment under section 210 is not required. (10) This section does not apply if the service to be performed is the sale of livestock. 134 Form of appointment (1) The appointment must be in the approved form. (2) The approved form must include a prominent statement that the client should seek independent legal advice before signing the appointment. (3) An appointment that does not comply with subsection (1) is ineffective from the time it is made. 144 In QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 QdR 41 Fraser JA (with whom McMurdo P and Philippides J agreed) said in respect of s 134 of PAMDA (and also s 140 which prevents a real estate agent suing to recover commission or expenses in the event that he or she is not properly appointed under PAMDA): [24] … PAMDA does not provide that an appointment is valid "if and only if" it is made in the approved form: that might have demanded strict compliance. Subsection 134(1) simply mandates the use of the approved form … [25] That s 134(1) requires the appointment to be "in" the approved form does not of itself necessarily justify the conclusion that PAMDA insists upon pedantically strict compliance with that form as a pre-condition of a valid appointment … [26] Sections 134(3) and 140 have a draconian effect, destructive of common law rights, where an appointment is not in the approved form. It seems most unlikely that the legislative purpose extended to visiting such extreme consequences for a trivial departure of the kind that occurred here. (emphasis added.) 145 Later his Honour observed: [29] The "main object" of PAMDA is expressed in s 10(1). So far as concerns real estate agents it is: ... to provide a system for licensing and regulating persons as ... real estate agents ... that achieves an appropriate balance between - (a) the need to regulate for the protection of consumers; and (b) the need to promote freedom of enterprise in the market place. [30] The reference to maintaining an "appropriate balance" suggests that protection of consumers was not intended to be achieved at the cost of destroying a contractual appointment merely because of an inconsequential departure from the approved form of appointment. 146 While not material to this case, the Court of Appeal there found that a trivial departure from the approved form in that case, namely misstatement of the correct telephone number of the Office of Fair Trading, did not mean that the appointment was not "in the approved form" within the meaning of s 134(1) of PAMDA and therefore ineffective. 147 Similarly in Yong Internationals Pty Ltd v Gibbs [2011] QCA 161 the Court of Appeal of Queensland again found that a failure of a principal and a real estate agent to complete a Form 22a under PAMDA - at least to the point of substantial compliance - meant that there was no effective appointment of the real estate agent. 148 PAMDA and the Regulations establish a statutory framework to regulate the appointment of real estate agents in Queensland. The legislation not only provides for a formal - and mandatory - process for the actual appointment of a real estate agent, it makes provision for the recognition of fiduciary obligations by real estate agents who have been properly appointed pursuant to the legislation. Indeed, s 134(3) of PAMDA specifically provides that an appointment of a real estate agent which is not in the approved form is not effective. While this section has been interpreted by the Court of Appeal of Queensland to mean that an appointment is ineffective unless it is has been made in substantial compliance with the approved form, an appointment of a real estate agent which in no way purports to have been made in accordance with Form 22a must be ineffective. 149 As a result, in my view the following conclusions can be drawn. 150 First and foremost, PAMDA, the Regulation, and the statutory Code of Conduct which forms part of the Regulation, appear intended to cover the field so far as concerns the appointment of real estate agents and their relationships with their principals, including in relation to fiduciary obligations. While the Explanatory Memorandum accompanying the introduction of PAMDA sheds little light on Parliament's intention in respect of restrictions on the appointments of real estate agents, the second reading speech of the Minister provides some clarification, in particular concerning the mischief the legislation was intended to address: Restrictions on Appointment of Real Estate Agents The appointment of agents, especially in the real estate sector, has been, as honourable members will be aware, a vexed area which is beset with recurring problems and gives rise to far too many complaints against licensees. The existing Act merely requires that the appointment of an agent be in writing. Most real estate agents do use a standard form of appointment … In a highly charged atmosphere, it often happens that neither the agent nor the vendor has devoted adequate time to reflect on the contract of appointment. Many complaints are received about agents failing to specify crucial details on the contract form such as expenses, the amount of deposit and the date of settlement. The Bill provides for all appointments of licensees to be in writing using an approved form. The approved form will include a statement that the appointing vendor/client is advised to obtain independent legal advice before signing the appointment. It will have to be initialled at the time the contract is made to ensure that the client has read and understands the warning statement. The approved form will cover all the essential details to enable a client to understand the terms of the appointment and the agent to understand the extent of the authority granted by the client to act on the client's behalf. (Hon J.C. Spence, Minister for Aboriginal and Torres Strait Islander Policy and Minister for Women's Policy and Minister for Fair Trading, Property Agents and Motor Dealers Bill - Second Reading, 7 September 2000) 151 More specifically - to address the "vexed problem of appointments of real estate agents, PAMDA required that an effective appointment of a real estate agent in Queensland could only be made in accordance with the procedure in PAMDA and in particular by the statutory agreement contained in Form 22a. In that respect, it appears to follow that pursuant to ss 133, 134 and 154 of PAMDA and ss 2(1), 4 and 6 of the Regulation, fiduciary obligations as contemplated by the Code of Conduct could only be owed to a principal by a properly appointed real estate agent. 152 The legislative scheme does not allow for the existence of a relationship of principal/real estate agent outside that parameters of that scheme. To that extent, it also appears to follow that traditional equitable obligations of real estate agents to their principals have been subsumed into, and are now regulated by, the legislative provisions of PAMDA and the Regulation. To paraphrase the comments of Mason J in Hospital Products, the legislative framework and the mandatory form of an effective contract of appointment of real estate agent stipulated by PAMDA are all important because they regulate the basic rights and liabilities of the parties. 153 Oliver Hume SEQ was never appointed real estate agent in respect of Lot 170 in accordance with Form 22a. It could not even be said that there was substantial compliance with the form of Form 22a as no purported formal appointment was made. In my view there are strong reasons to conclude that there is no room for a fiduciary relationship in equity outside the contemplated scope of this legislation. 154 In this context, it is also useful to consider the nature of the parties in question. There is no question that the applicants and Oliver Hume SEQ are sophisticated commercial parties. It cannot seriously be doubted that Investa staff, including Mr Nankervis, knew that in Queensland, an effective appointment of a real estate agent, pursuant to which the real estate agent would be entitled to claim commission in case of any sale, could only be achieved by execution of a Form 22a. In contrast, a Form 22a was executed by the second applicant and Oliver Hume SEQ in respect of the sale of Lot 191. 155 It is not credible that the applicants would have expected Oliver Hume SEQ to act as a real estate agent on behalf of either or both of them in relation to Lot 170 in the absence of a formal appointment under PAMDA, particularly in circumstances where Oliver Hume SEQ was statutorily proscribed from claiming any commission if no Form 22a was executed. In Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013) 295 ALR 760 the New South Wales Court of Appeal observed: [121] … a fact-based fiduciary duty cannot arise unless one party undertakes, expressly or impliedly, to act in the particular factual context solely in the interests of the other. The word "solely" deserves particular emphasis. That essential requirement shows why fiduciary duties, of their nature, do not ordinarily attend bargains struck at arm's length between sophisticated parties with equal bargaining power who, in pursuing their own financial ends, take care to document their respective rights and obligations in a comprehensive way. A person of that kind who makes such a bargain in that way safeguards his or her own interests and aims to achieve the particular advantage sought for the person's own benefit ... 156 In the circumstances, no formal documentation - as required by statute - was completed. I am satisfied that the neither the applicants nor Oliver Hume SEQ intended that Oliver Hume SEQ be appointed the agent of either of the applicants in relation to the sale of Lot 170.

Position in equity 157 Putting to one side the question whether Oliver Hume SEQ was effectively appointed to act as a real estate agent on behalf of either of the applicants in relation to Lot 170, it is appropriate to consider a separate question, namely whether, notwithstanding the absence of formalities as prescribed by PAMDA, a fiduciary relationship could be said to have existed between Oliver Hume SEQ and one or both of the applicants in relation to Lot 170 outside of the principal/real estate agent relationship. 158 In my view there are serious problems attending any attempt to characterise the relationship between these parties in respect of Lot 170 as fiduciary. 159 First, as Oliver Hume SEQ has correctly submitted, it is completely unclear how any fiduciary relationship could be seen to exist between the first applicant and Oliver Hume SEQ in relation to Lot 170. Investa Properties was not the owner of Lot 170, and indeed had no interest in it other than as the holding company of the actual owner, Investa Residential. The only connection I am able to identify between Oliver Hume SEQ and Investa Properties is through the correspondence between Mr Barclay on behalf of Oliver Hume SEQ and Mr Nankervis, who was employed by Investa Properties. However in circumstances where the organisational lines in the Investa corporate group were, practically, blurred, it appears that any authority of Mr Nankervis to make arrangements in relation to Lot 170 must have been on behalf of its owner, Investa Residential. 160 Second, as the Courts have made plain repeatedly, a fiduciary relationship is created because the fiduciary undertakes to protect and/or advance the interests of another (cf Finn at [15]). Relevant principles were recently reiterated by the Full Court of this Court in ABN Amro at [1066] as follows: [1] The "critical feature is that the fiduciary undertakes or agrees to act for or on behalf of or in the interests of another person": Hospital Products Pty Ltd v United States Surgical Corp [1984] HCA 64; (1984) 156 CLR 41 at 96-97; Pilmer v Duke Group Ltd [2001] HCA 31; (2001) 207 CLR 165 at 196-197 [70]-[71] and Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963; (2007) 160 FCR 35 at 76 [270]- [275] and 77 [283]. [2] It is the element of undertaking (from the point of view of the fiduciary) or obligation (for and on behalf of the beneficiary) that has the consequence that equity insists that the principal must act in the "interests of" or "for the benefit of" the beneficiary rather than in the principal's own interests: Breen v Williams (1996) 186 CLR 71 at 113, approved in Pilmer at 196-198 [70] and [74]. [3] Whether a fiduciary relationship exists in a particular case, and if so, the scope of that fiduciary relationship, are matters which depend critically upon the particular circumstances of the case: In Re Coomber [1911] 1 Ch 723 at 728-729, approved in Hospital Products at 102; see also Pilmer at 198-199 [77]-[78] and Citigroup at 76 [285], 78 [287]-[288]. [4] The characteristics which define a fiduciary relationship cannot be exhaustively defined. It is inappropriate to treat the existence of a fiduciary obligation as being dependent upon whether the principal and beneficiary fall into a particular status relationship: James Edelman, 'The Role of Status in the Law of Obligations: Common Callings, Implied Terms and Lessons for Fiduciary Duties' (Paper presented at the University of Alberta, 18 July 2013, and DePaul University conference, Chicago, 19-20 July 2013). [5] Similarly, whether a fiduciary relationship has come into existence does not depend upon the motivation or desire of one party to establish a relationship of trust or confidence. What matters is whether there is a relationship involving the requisite undertaking, determined as a matter of objective characterisation, rather than by having regard to the subjective expectations of the parties: Beach Petroleum NL v Kennedy [1999] NSWCA 408; (1999) 48 NSWLR 1 at 45 [188] and 46 [194]; P D Finn, Fiduciary Obligations (Law Book Company, 2nd ed, 1977), par 14ff; James Edelman 'The Importance of the Fiduciary Undertaking' (2013) 7 Journal of Equity 128 (see also, James Edelman 'When Do Fiduciary Duties Arise' (2010) 126 Law Quarterly Review 302) and, in the context of a contractual relationship, Citigroup at 77 [281]. (cf comments in Grimaldi at [177] and Orchard Holdings Pty Ltd v Paxhill Pty Ltd as Trustee for Paxhill Trust Trading as Property People [2012] WASC 271 at [429]-[432].) 161 In support of their case that such a fiduciary relationship did exist, the applicants rely on correspondence between Mr Nankervis and Mr Barclay in November 2008. 162 In his email to Mr Barclay of 27 November 2008, Mr Nankervis wrote: Adam, Discussions were had today at our project review meeting for Brentwood, regarding the ongoing Sale of the Fossil Site. Our recent dealings with the potential purchaser of the site do not provide us with any confidence that they will be in a position to perform as required under the Contract. As a result we have reached a decision at the project level to have Oliver Hume procure a back up Sale Contract. As discussed earlier this evening, the following details are provided; 1. Current Purchase Contract Details:- Price $ 1,775,000 incl GST Dep $10k Balance Dep to 10% Finance 30 Days Valuation 45 Days DD 60 Days Settlement 15 Dec 2008 The Sale was Off Market procured by Mark Waters, we have not met the purchaser, the DD is now due 31 Jan 2008, with Settlement 14 days after. 2. Investa Board Approval "The Fossil site disposal is to be reflective of market conditions and valuation. (Minimum Sale price to exceed $1.75M), 8 August 2008." We are seeking a Sale price above the Current Sale Contract and in line with valuation by JLL $1.8M under the margin scheme, dated June 2008. 2. Property Details:- Seller: Clarendon Residential Group Pty Ltd Address: Lot 170 Brittains Road, Bellbird Park Property Description: Lot 170 RP904872 County: Stanley Parish: Bumdamba Title Ref: 50196414 Area: 7.25Ha Ipswich City Council 3. Approved Plans - 22 July 2008 4. Development Approval - Negotiated Decision Notice 22 July 2008 5. Lot Calculation Plan - 3 July 2008 5. Engineering Cost Estimate - Dated 14 Nov 2008 6. Slope Analysis 7. Recent Sales Advice - Brentwood Rise 8. Sales Commission We are willing to pay Oliver Hume 1% sales commission for an englobo sale, but if you feel that you have a better opportunity in seeking your sales commission at the purchaser end feel free to pursue. We will not formalise your engagement to act on our behalf at this stage until you advise. 9. Deal Structure We would like an unconditional contract, asap, therefore we would like to reduce some of the time frames as noted in the previous contract, as follows; Initial Deposit $50K Balance Deposit to 10% Finance 21 Days Due Diligence 30 Days Cash Settlement Contract subject to the initial contract not completing on or before 31 January 2009 (If we can achieve a clean unconditional contract as described, we would negotiate settlement date) 10. Sale Strategy We would like you to promote this offer through the Oliver Hume network Off Market, I suggest with your recent discussions re. Brentwood North and your recent retail involvement in the corridor on Brentwood, Springfield Lakes and the Australand Sale you would have a pretty good handle on potential prospects. As you are aware the site is constrained by slope and the potential built form, please consider a strategy for the slope and appropriate built form solutions at your earliest. If you have any questions please give me a call. Gavin and I would like weekly updates and ultimately we need a Contract / purchaser that will perform, we can not afford any further delays. Thanks Ashley Nankervis Senior Development Manager - Investa Land 163 Mr Barclay replied the next morning (28 November 2008) by email, signing off as "General Manager - Queensland" over the logo of "Oliver Hume Real Estate Group" stating: Thank you for the opportunity to assist Investa with the sale of the Fossil site and to strengthen the relationship with Gavin & yourself further. I will commence making contact with potential purchasers of the site immediately upon reviewing the documentation provided. It is my expectation that no contract will be entered into prior to Christmas, however I am confident that I can have a buyer signed contract that in large part meets your requirements prior to the completion of DD on 31 January 2009. There will need to be a short DD period beyond the execution date and we may need to provide some flexibility around settlement. This is of course contingent upon an unconditional contract. "Unknown" developers will not provide the capacity to complete in this market and it appears you have been dealing with someone without the necessary credentials. I will only out forward offers from parties that have a demonstrated ability to perform. I will report back to you each Monday to advise current status. Would you please confirm the process for preparation of a draft contract and advise access arrangements to your current consultants for the purpose of DD. 164 They also rely on their perception that Oliver Hume SEQ was acting on their behalf to find a purchaser of Lot 170. In this context, I particularly note: the Project Control Group Report No. 8 dated December 2008, in which it was stated that: The sale of the englobo Fossil Site is expected to be settled in the month of September 2009 for $1,775,000. Oliver Hume are currently marketing this site (Lot 170) in anticipation that the February settlement will not proceed. The report also stated, "Fossil site under DD until 31 Jan…OH seeking fallback purchaser". the Minutes of Project Control Group Meeting of 16 December 2008 attended by Mr Stubbs, Mr Nankervis, Mr Hopkins and Mr Long. Relevantly the Minutes included the following: 5.0 Market Action Oliver Hume to find back up sale for Fossil Site once sale falls over in Jan 09. Dec 08 DL Action Oliver Hume to market Childcare Site to gauge where market is and assess viability of childcare development at Brentwood Rise. Dec 08 DL

A "Disposal Memo" emailed on 28 January 2009 by Mr Nankervis to Mr Stubbs in relation to Lot 170, stating: [s]ince November 2008 (it was recognised the above purchase of the property would not complete) Oliver Hume have been undertaking an active marketing campaign off market for the Sale of the property. This statement was repeated by Mr Nankervis in a further memorandum addressed to Mr Stubbs dated 2 February 2009. 165 In my view, this evidence does not support a finding that Oliver Hume had undertaken to act on behalf of the either or both of the applicants as the applicants claim. At its highest, the evidence supports findings that: The applicants, through Mr Nankervis, opened negotiations with Oliver Hume SEQ through Mr Barclay to engage Oliver Hume SEQ as real estate agent for the sale of Lot 170, but the negotiations went no further. The email was, as Mr Stubbs said under cross-examination, a proposal not an engagement (transcript 10 June 2014 p 615 ll 45-46). The applicants were comfortable with Oliver Hume SEQ seeking a buyer for Lot 170 on the basis that Oliver Hume SEQ would seek commission from the buyer, rather than the applicants. Oliver Hume SEQ, through Mr Barclay, did actively engage in a search for a buyer for Lot 170. In the absence of an agreement whereby either or both of the applicants engaged Oliver Hume SEQ as real estate agent to sell Lot 170, or pay commission to Oliver Hume SEQ in respect of any sale of Lot 170, the default position - which appeared to be the final position in these circumstances - was that Oliver Hume SEQ would be the buyer's agent. 166 Mr Barclay's email to Mr Nankervis of 28 November 2008 is consistent with this conclusion. The only aspect of Mr Barclay's email which gives me pause is his statement that he "will report back to [Mr Nankervis] each Monday to advise current status". However Mr Barclay's evidence was that this mode of reporting was a discipline he followed (transcript 3 October 2014 p 2392 l 10), and that these communications were in an environment where Mr Barclay did not expect that Oliver Hume SEQ had an exclusive relationship of any kind with the applicants (transcript 8 October 2014 p 2624 l 41). 167 Indeed, that Investa contemplated using multiple real estate agents - and not only Oliver Hume SEQ - to endeavour to sell Lot 170 was clear from the Project Plan & Initial Divestment contact list attached to Mr Jenkins' email of 20 February 2009 to Mr Nankervis and others, identifying possible agents in respect of Brentwood North as "Oliver Hume - Adam Barclay, LJ Hooker - Kevin Doodney, Ray White Special Projects". There is also evidence of Mr Waters that he instructed Mr Nankervis at or about that time to "go back and canvas all the agents again" (transcript 19 August 2014 p 1579 ll 10-23). (I note that while Mr Waters' evidence in this respect is not strong, it is nonetheless consistent with the other evidence that Investa looked to multiple agents to sell Lot 170.) 168 That the minutes of meetings of the Project Control Group (of which Mr Nankervis was a member) of 16 December 2008 and the Project Control Group Report of that month recorded Oliver Hume SEQ in connection with the marketing of Lot 170 is, in my view, unpersuasive of the existence of a relationship with Oliver Hume SEQ as submitted by the applicants. Indeed, in relation to the minutes I note that they do no more than record a plan to "action" Oliver Hume SEQ in this respect. Interestingly, I note that the same minutes also record a prospect of Investa "actioning" Oliver Hume SEQ in relation to a child care site, and no evidence was presented to the Court that any such appointment of Oliver Hume SEQ had been made in respect of that site. 169 In such circumstances it is not possible to identify any undertaking, either express or implied, from Oliver Hume SEQ to act in the interests of or for the benefit of the applicants. The business of Oliver Hume SEQ was clearly such that it was in a position to identify potential buyers of Lot 170, however it did so in the knowledge that the applicants were not prepared to formally appoint Oliver Hume SEQ to sell Lot 170 or pay it a commission exceeding 1%, and it was welcome to seek commission from the buyer. Activity by Oliver Hume SEQ in relation to Lot 170 was, at best, speculative on its part, with the prospect of earning commission from a buyer if it was successful in finding a buyer. The position of Oliver Hume SEQ vis-à-vis the applicants in this case was, in my view, more akin to that of an independent broker than an agent or any other fiduciary relationship. 170 The evidence falls far short of that required to establish a fiduciary relationship in terms explained in ABN Amro and Grimaldi.

The applicants' submissions 176 The applicants' case concerning Mr Nankervis and Lot 191 is primarily in paragraphs 103-136 of the amended statement of claim. In summary they submit as follows: The sale of Lot 191 to entities owned and/or controlled by Mrs Barclay (namely Queensland Property Centre and Spencer Projects) for $195,000 was at an undervalue, and there was no proper disclosure to or consent from Investa in respect of these events. Mr Barclay gave evidence that he had disclosed to Mr Nankervis the relationship of Queensland Property Centre and Spencer Projects to Mrs Barclay (transcript 8 October 2014 pp 2552-2553), however Mr Nankervis had not disclose that relationship to decision makers in Investa. Mr Nankervis knew that Lot 191 was capable of subdivision and was being purchased by Mr Barclay's wife, however Mr Nankervis recommended the sale of Lot 191 for $195,000 for board approval on 21 October 2009. Mr Nankervis' recommendation was approved on 23 October 2009 and the property sold for that price. 177 In relation to Lot 170 the case of the applicants against Mr Nankervis for breach of fiduciary duties is primarily found in paragraphs 165-184 of the amended statement of claim. In summary, the applicants submit as follows: On or about 5 November 2008, CB Richard Ellis prepared a valuation report for ANZ Banking Group Ltd in respect of Lot 170. Mr Barclay received the report, and on 19 December 2008 he emailed a copy to Mr Nankervis and Mr Waters. This report valued Lot 170 at $4 million, plus GST, as at 5 November 2008. A copy of this report was also emailed to Mr Tonuri on 2 December 2008, copied to Mr Nankervis. The CB Richard Ellis report included a statement describing Lot 170 as: Moderately sloping site subject to a difficult topography Overlay with approximately 14% of the site sloping between 20% and 25% along the northern boundary. Requirement for substantial retaining wall works. Majority of lots on the eastern side of the site will require benching and a split level house design. On 26 November 2008, Citimark sent an email to Mr Barclay with a letter attached, offering to purchase Lot 170 for $3.7 million including GST, subject to a thirty day due diligence period. The offer was signed by Mr McWilliam, the Director - Residential Land of Citimark, although allegedly withdrawn over the telephone on 27 November 2008. Mr Nankervis conceded that Mr Barclay told him of this offer. There is no evidence that Mr Nankervis told his superiors (in particular Mr Stubbs) at Investa about the Citimark offer. On or about 16 December 2008, Mr Nankervis received engineering advice from Mr Walker, director of Projex North Ltd, in relation to Lot 170. That advice included the following comment: Assessment of the existing design with Mr Ashley Nankervis revealed that a design which provided significantly flatter allotments could be achieved by adjusting the levels of Road 2 and Road 3. Mr Nankervis emailed this advice to Mr Barclay and Mr Tonuri, but did not disclose it to the applicants. From about December 2008, Mr Nankervis was involved in submitting an amended Operational Roads Works Approval to the Ipswich City Council which sought levelling and retaining of Lot 170 to create flat lots. On or before 20 January 2009, Mr Nankervis and Mr Barclay entered into an agreement with Mr Tonuri, pursuant to which Mr Nankervis and Mr Barclay would participate in and derive profits from the sale to Mr Tonuri or his nominee and subsequent development of Lot 170. On 19 January 2009, Mr Barclay sent an email to Mr Stubbs and Mr Nankervis reporting on a meeting with another possible purchaser, Mr Lance Washington. Notwithstanding that Mr Washington expressed concern over the sloping nature of Lot 170, Mr Nankervis did not forward him the advices concerning the flattening of the site. In a memorandum dated 2 February 2009 and in a subsequent Delegated Authority Approval prepared on or about 6 February 2009, Mr Nankervis recommended the sale price for Lot 170 in the amount of $1,454,545 exclusive of GST to Two Eight Two Nine. This price was referable to a valuation of obtained on 12 June 2008 from valuer Jones Lang LaSalle dated 12 June 2008, valuing Lot 170 in the range of $2.1 million-$2.3 million at that date, and the view at that time in Investa that Lot 170 could be sold for a price in the range of $1.8 million. In his approval submission, Mr Nankervis wrote: The site is irregular in shape and heavily vegetated with steep topography, rising from the southeast to the northwest and is unattractive to our target market as only speciality custom build housing can be built on the site. The housing product needs to accommodate steep slope of 10% to 15%. No slab on ground product will be achieved and this is compounded by the tree retention Council require and also approval limitations in association with the degree of earthworks allowed on the site, there is no ability to level the site. These statements were incorrect in light of the design amendment proposal and the application for amended Operational Road Works Approval. Mr Nankervis did not seek instructions to investigate the possibility of sale of Lot 170 at a higher price and did not recommend that the sale price of Lot 170 be reconsidered, notwithstanding that: o he had seen a more recent report valuing Lot 170 at $4 million; o he knew of the Citimark offer of $3.7 million; and o he had seen advices indicating that levelling the site was feasible. Mr Nankervis' submission was approved and Lot 170 sold for $1,454,545. This price did not reflect the potential market value of Lot 170.

Mr Nankervis' submissions 178 In relation to Lot 191, Mr Nankervis submitted (in summary) as follows: He followed all protocols relating to employees of the applicants in relation to the sale of Lots 191 and 170, and has done nothing wrong. By at least 20 April 2010, Mr Long (then a development manager) had an awareness of the ownership and control of Queensland Property Centre. For this submission Mr Nankervis relied on Annexure CH-171 of exhibit 57(A). The applicants allege that Mr Nankervis then approved a sale price for Lot 191 at $290,000 in June 2010. This allegation is incorrect because Mr Nankervis ceased working for Investa Properties in May 2010. Instead, Mr Long prepared the "sales advice" document dated 18 June 2010 for Lot 191 with the purchase price noted as $290,000. The property was sold after the option for the Lot 191 Deed of Put and Call had, on the pleaded case, expired. The applicants were aware of the potential to subdivide various lots (including Lot 191) within the Brentwood Site. They were informed by Mr Nankervis of the potential to subdivide Lot 191 and of Mr Barclay's intention to take steps to subdivide the lot. Consistent with the applicants' divestment strategy and obsession with cash-flow, the reasonable inference to be drawn is that the applicants did not take up the opportunity to subdivide Lot 191 and with the benefit of hindsight have seller's remorse. Lot 191 was not sold at an undervalue. The approval for the sale of Lot 191 did not occur until 18 June 2010, which was after Mr Nankervis had ceased working for Investa Properties and after the option for the Lot 191 Deed of Put and Call had expired. 179 In relation to Lot 170, Mr Nankervis submitted (in summary) as follows: The applicants are sophisticated commercial parties and Mr Nankervis a senior employee. The application of additional fiduciary obligations on the relationship between employer and employee is unsustainable. Mr Nankervis did not fail to disclose the Citimark offer to the applicants - he informed Mr Waters and Mr Waters knew the offer had been rescinded. Investa Residential has failed to plead the terms of the alleged agreement with Mr Nankervis and Mr Tonuri whereby Mr Nankervis derived profits. Investa Residential has also failed to plead facts alleging that the profits (if any) were obtained as a result of a breach of fiduciary duty. The applicants assert that there was a meeting between Mr Tonuri, Mr Barclay and Mr Nankervis on or about August/September 2009. At this time the purchase of lot 170 had already occurred. It was alleged Mr Tonuri offered both Mr Nankervis and Mr Barclay a third interest in the project. At the time Mr Tonuri was personally going through a divorce and offered this to improve his financial position in his matrimonial dispute with his former wife. Mr Nankervis was unaware of Mr Tonuri's personal details and had never discussed the proposition prior to that time. The offer was immediately rejected by Mr Nankervis.

Knowledge of details of purchaser of Lot 191 181 The evidence in this case demonstrates that Mr Nankervis knew that the purchaser of a Deed of Put and Call in relation to Lot 191 was a company controlled by the wife of the individual real estate agent responsible for marketing Lot 191, and he did not disclose this information to Investa. Whilst this evidence was given by Mr Barclay under cross-examination (transcript 8 October 2014 pp 2552-2553), and, in my view, Mr Barclay's evidence is of limited reliability, I accept as credible Mr Barclay's statement that Mr Nankervis was his contact in Investa and it was for that reason that he communicated this information to him. The information was clearly relevant to making an informed decision to sell Lot 191 to that particular purchaser, at any price, for the obvious reason that there was a risk that the personal interest of the real estate agent (through his spouse) would conflict with his own duty to achieve the best sale price for the Lot. 182 Mr Nankervis did not dispute that he knew the identity of the person controlling Queensland Property Centre as well as Spencer Projects - namely Mrs Barclay. He gave no explanation as to why he did not pass this information on to decision makers in Investa. In his closing written submissions Mr Nankervis states: 153. Further, the Applicants were aware of the potential to subdivide various lots (including Lot 191) within the Brentwood Site. They were informed by Nankervis of the potential to subdivide Lot 191 and of Barclay's intention to take steps to subdivide the lot. 183 However Mr Nankervis cites no supporting evidence for this proposition. Indeed this proposition is wholly inconsistent with his oral evidence during the hearing, an example of which is as follows: MR MURR: Have a look at page 10752?---Yes. And that is recommended by you amongst other people. That's right, isn't it?---Yes. Now, at this stage do you - were you aware that Adam Barclay's wife was interested in purchasing land amongst these lots?---I - I recall that she - I can't remember the exact timing, whether it was this stage or other stages, but yes. She was one of the bulk deal purchasers. Yes?---Correct. And the lots that she was purchasing included Lot 191; that's right, isn't it?---Yes. And that's not something you ever disclosed to anyone else in Investa, is it?---There was no reason to. I see?---It was a bulk deal and it was in accordance with board approvals. All right. So I take it the answer to me question is no, you didn't disclose it to anybody?---No. Because at the time I don't think there was a need to. Thank you?---We don't disclose all purchasers. You knew, of course, that Mr Barclay was the principal of the retained real estate agent involved in the sale?---He was the principal of the what, sorry? The retained real estate agent?---So Oliver Hume - - - - - - responsible for the sale?--- - - - were the sales agent for that stage. Yes. That's right, isn't it?---I can't remember when they started and stopped, but he was the retained agent at various points. Yes?---There was quite a few retained agents. (Transcript 30 September 2014 p 2078 ll 12-48.) 184 While in this case no direct personal benefit was obviously attributable to Mr Nankervis from failing to inform Investa of the true identity of the purchaser of the deed of put and Call for Lot 191 or the ultimate purchaser, he was clearly influenced in his actions by his preference of the personal interests of Mr Barclay over his duty to his employer. That this is so is evident from the fact that he knew of Mr Barclay's relationship with the purchaser of Lot 191, but was content to keep that information secret from Investa. Whether Mr Barclay, or any of the entities with which Mr Barclay or his wife were associated, actually profited from the relevant transactions with Investa is not the key point: Regal (Hastings) Ltd v Gulliver. In my view, this conduct was contrary to his fiduciary obligation to his employer.

Knowledge of proposed subdivision 185 Not only was Mr Nankervis aware that an entity controlled by Mr Barclay's wife wished to purchase Lot 191, but the evidence before the Court shows that Mr Nankervis actively assisted Mr Barclay and his wife in relation to the subdivision of Lot 191 at the same time that he was recommending to Investa that site be sold for $195,000 to Queensland Property Centre. 186 The applicants plead that Mr Nankervis, from a date unknown but at least 19 October 2009 until 29 October 2009, was involved with Mr Barclay in taking steps to subdivide Lot 191 into two lots (para 103). Evidence of this involvement are a number of emails from Mr Barclay to Mr Nankervis, including: An email chain ending 19 October 2009 in which Mr Barclay asks Mr Nankervis his view as to whether there would be any difficulty in obtaining approval of subdivision of Lot 191. This email chain is of substance, being 78 pages of documentation including emails and attachments. The attachments include maps, information concerning the Ipswich City Council planning scheme, and material relating to the subdivision of other lots in the development. An email chain ending 29 October 2009, in which Mr Barclay asks Mr Nankervis to "review this morning" a chain of emails dating back to 20 October 2009 concerning subdivision of Lot 191. It is not in dispute that Mr Nankervis did review that email chain (transcript 30 September 2014 p 2082 ll 45-46). The relevant material includes detailed correspondence involving Mr Barclay, a member of the town planning staff at the Ipswich City Council, and town planning consultant Mr Marcus Brooks of Bellas and Reitano Consulting Engineers and Project Managers; and a fee proposal from Bellas and Reitano for consultancy services associated with the proposed subdivision. 187 Subdivision of blocks by purchasers of those blocks from Investa may not novel. For example, Mr Long in his evidence at the hearing gave evidence to this effect (transcript 11 June 2014 pp 670-673). Further, that Mr Nankervis was asked to - and apparently did - review an email chain from Mr Barclay in relation to a subdivision does not necessarily constitute a breach of fiduciary obligation to Investa by Mr Nankervis. However that Mr Nankervis was assisting Mr Barclay contemporaneously with his recommendation to Investa to sell that same Lot 191 to Queensland Property Centre - a company associated with Mr Barclay to Mr Nankervis' knowledge - is further evidence of the fact that his conduct prioritised the interests of Mr Barclay over his duty to Investa.

Protocols 188 Third, while Mr Nankervis submitted that he followed all protocols relating to employees of the applicants in relation to the sale of Lot 191, I have been pointed to no evidence by Mr Nankervis as to the nature of those protocols. Indeed during the lengthy hearing, the only evidence of any relevance to this point was given by Mr Holt. In paragraph 60 of his affidavit of 6 December 2013, he described the procedure implemented by Investa Properties in selling lots within the Brentwood site, being as follows: (a) The development managers, in conjunction with sales consultants, would examine the market and prepare a proposed price list of the lots within the Brentwood site. (b) The Investa Properties board approved a staged release of lots within a development based on aggregate revenue and costs supported by first, the proposed price list prepared by the development managers, in conjunction with sales consultants, and, secondly, development costs estimates. (c) Based upon that authority, the determination of the prices for individual lots within each stage would be delegated to the development managers, who had the authority to develop a price list provided that it was consistent with the Investa Properties board approval. This process involved: i. After development managers and sales consultants undertook market research, development managers would prepare and recommend Delegated Authority Approval Submissions, including sales information (i.e. price per lot, minimum gross revenue, number of lots and brief descriptions) for every stage of a project, in anticipation of State general manager and group executive approval; ii. State general manager and group executive would review and sign off on the Delegated Authority Approval Submission, and present the submission to the chief financial officer and the chief executive officer; and iii. The chief financial officer and the chief executive officer would review and approve the Delegated Authority Approval Submission. (d) A sales consultant would subsequently advertise the approved prices in the Delegated Authority Approval Submission to the public. (e) A sales consultant would liaise with the potential purchaser. (f) A sales consultant would prepare the sales advice and contracts after successful negotiation of the purchase price (g) Development managers would approve the sales advice and sales commission to the sales consultant and/ or marketeers. (h) Legal department would approve the sale and/ or put and call option deeds before a contract is entered into with the purchaser. 189 In oral evidence Mr Holt said that this evidence referred to the standard protocol in the Investa business, applicable in relation to both Lots 191 and 170 (transcript 12 June 2014 p 806 ll 1-21). 190 This evidence of Mr Holt was not disputed by Mr Nankervis. However even if Mr Nankervis did follow this protocol, it would not absolve him from his fiduciary obligations towards Investa, including the obligation to disclose information relevant to the decision making process in Investa in respect of a potential purchaser, and particularly when that information related to the fact that a potential purchaser was the spouse of the engaged real estate agent of Investa.

Citimark offer 196 In summary, the applicants have made the following submissions relevant to Mr Nankervis concerning the Citimark offer of 26 November 2008 to purchase Lot 170 (for $3.7 million including GST): Mr Nankervis had sent material concerning Lot 170 to Mr McWilliam, the Director - Residential Land of Citimark, and had a phone conversation or a meeting with Mr McWilliam on the same day Citimark made the offer. The Citimark offer was subject to a thirty day due diligence period and signed by Mr McWilliam. Mr Barclay told Mr Nankervis about the Citimark offer. The amount of $3.7 million was close to the estimated value in the CB Richard Ellis report received by Mr Nankervis on 16 December 2008, that is $4 million. Mr Nankervis never told his superiors (in particular Mr Gavin Stubbs) at Investa about the Citimark offer. Mr Jenkins, Mr Long and Ms Prout all gave evidence that they were never told of this offer. Mr Nankervis attended a project review meeting the following day (27 November 2008) but did not mention the Citimark offer. Although Mr Nankervis and Mr Barclay both claimed that they had told Mr Waters, Mr Waters' evidence is vague and unreliable. Even though the respondents claim that the Citimark offer was withdrawn within forty-eight hours of being made, there is no evidence to support Mr McWilliam's assertion that the offer was withdrawn in a telephone conversation with Mr Barclay on 27 November 2008. There is no letter, email or file note in Citimark or which could be produced by Mr Nankervis, Mr Barclay or Oliver Hume SEQ. Shortly prior to the hearing, Mr Nankervis and Mr Barclay enlarged their defences to claim that they, or Mr Barclay, told Mr Waters of the Citimark offer. The Waters allegation was not an aspect of their defences until just before the hearing. Mr Nankervis did not plead to the allegations in the amended statement of claim, concerning the Citimark offer. 197 In my view, the circumstances concerning the Citimark offer do not give rise to any liability in Mr Nankervis. My reasons for this view are as follows. 198 First, the applicants in their amended statement of claim plead no specific claim against Mr Nankervis in respect of his dealing with the Citimark offer. Aspects of the amended statement of claim dealing with the Citimark offer can be seen in paragraphs 164A-164G. In paragraphs 164A, 164D and 164E, the applicants plead only conduct of Mr Barclay and Oliver Hume SEQ. In paragraph 164B the applicants plead that the Citimark offer was "a valuable commercial opportunity" and in paragraph 164G the applicants complain that they "were deprived of information relevant to their later decision to sell the Fossil Site to Two Eight Two Nine and the price at which they were willing to agree to sell". The nature of the pleading - and the absence of any mention of Mr Nankervis - suggests that paragraphs 164A-164G all relate to Mr Barclay and Oliver Hume SEQ. 199 Second, in any event, and notwithstanding submissions of the applicants suggesting the contrary, the evidence clearly establishes that the Citimark offer was withdrawn within 48 hours of it being made. His key evidence under cross-examination was as follows: Okay. Now, of course, you had done the site inspection two days earlier, hadn't you?---Correct. You had done it, in fact, before you made the offer?---Probably, yes. Yes?---Yes, correct. So between the offer and your withdrawal of the offer, nothing had changed as far as the site inspection was concerned?---Not the - no, correct, nothing had changed as far as the site inspection. The site inspection made me think it's a secondary site. Yes?---And then we did the feasibility and it showed at 3.7 million, no profit in it at all, even before normal project management fees, things like that. So we just called Adam and said, we're out, thanks. (transcript 19 August 2014 p 1539 ll 1-14.) 200 I consider this explanation concerning the withdrawal of the Citimark offer credible. It is reasonable to conclude that the result of the feasibility study, in the context of the view already taken by Citimark that Lot 170 was a "secondary site", caused Citimark to conclude that they had offered too high a price for Lot 170 and to immediately withdraw its offer. 201 In relation to the verbal withdrawal of the Citimark offer, Mr McWilliam's evidence was as follows: Let me now put my question again. Given the offer was in writing and it was a formal offer that was made to purchase, it would have been appropriate to withdraw it in writing. Don't you agree?---Yes and no. These things happen. Like, you put the offer in in writing to try to secure it but until it's actually contracted, it's an offer on letterhead emailed through to say, "This is what our offer is." I'm assuming Mr Barclay would have taken it to Investa and they would have considered it. What if someone had withdrawn - sorry. What if someone had purported to accept the offer after you had withdrawn it?---Well, it would have been subject to due diligence and it hadn't been put into a contract. And you don't think that that might have led, at the very least, to a nasty dispute between you and Investa?---No. No. All right. You can see no reason in prudence at all why - an offer of this kind shouldn't have been withdrawn by an equally formal letter saying, "Having further considered this site, we withdraw our offer"?---To be thorough, that probably should have occurred. I can't find anything on our files. Our files are - you've got a copy of them. We have maybe 10 emails and this letter so very little work was done on this site. HER HONOUR: Sorry. Sorry. Mr McWilliam, just again, how was the offer withdrawn?---By telephone. By telephone?---Correct. Okay. MR MURR: You - even to have - - - HER HONOUR: Sorry, Mr Murr. So you rang Mr Nankervis?---I rang Mr Barclay. Mr Barclay. Okay. Thank you. MR MURR: Even an email would have at least created a record of the withdrawal of the offer, wouldn't it?---It would have. How long would an email have taken? "Dear Adam, thought again about Brentwood. We are withdrawing our offer": how long would have taken?---Well, I didn't do an email. How long would it have taken?---It would have taken 15 seconds. Yes. And, again, that would have given you a record of the withdrawal, wouldn't it?---It would have. But you just did it by phone?---I did it by phone. Correct. Did you keep a note of the phone call?---No. I see. HER HONOUR: Can I ask why you did it that way?---There was a lot of - we were looking at a lot of sites and things happen verbally to start with, then in writing and then probably finished off verbally to say, "This is - we're miles away on this one. Thanks. We've wasted our time." Is it common to - is what you did, making a written offer and then withdrawing it verbally, is that common practice?---Probably. It's not uncommon. Because it's a letter to send in, it's certainly not - it hasn't been common for us to send an email or a letter withdrawing offers if they don't go anywhere. Okay. Thank you. MR MURR: The fact is, as you concede, there is not a single record that Citimark has of this offer being withdrawn, is there?---No, there's not. There's nothing to say that it was withdrawn, other than your say-so? That's correct. (transcript 19 August 2014 pages 1539-1540.) 202 As a general proposition I consider it somewhat surprising that a written offer should be verbally withdrawn. However I also consider that: Mr McWilliam was a credible and responsive witness; Mr McWilliam's evidence that it is not uncommon in his business to withdraw an offer verbally, and for that verbal withdrawal to be accepted in circumstances where it could in any event be withdrawn in the context of a due diligence process, is credible; and No motive on Mr McWilliam's part to be other than honest was advanced by the applicants. 203 Finally, and again in any event, I am not satisfied that the applicants were "deprived of information" in relation to the Citimark offer as pleaded in paragraph 164G of the amended statement of claim. Mr Mark Waters gave evidence that Mr Nankervis told him of the Citimark offer and that the offer was withdrawn shortly after it was made (affidavit of Mark Anthony Waters affirmed 30 April 2014 para 15). The applicants submitted that Mr Waters' evidence was vague and unreliable, but as a general proposition I consider that Mr Waters was responsive to questioning, and honestly conceded when his recollection was imperfect. An example of this was during cross-examination by Mr Murr, when Mr Waters responded as follows: THE WITNESS: I wouldn't call any offer memorable. MR MURR: All right?---An offer is nothing. Okay. So do you remember how much the Citimark offer was for?---I can actually tell you I don't know what the offer was for. I remember it was - either came late on an afternoon and I was told about it and the next morning, it was rescinded or I was told about it on that morning and it was rescinded that afternoon. That's where I'm hazy and I've said that it has happened within that day or the next day. I see?---And I remember at the time that it was later on or it was the next morning and it was rescinded so therefore, I really didn't pay it much credence. Okay. And you didn't even find out how much it was for?---No because it was - - - No one told you?---It was rescinded. All right. You weren't even curious about how much it was for?---No, I wasn't. All right. HER HONOUR: Why not?---Because the offer had been rescinded. So at that stage, I just - - - So but - so - - -?---You've got a thousand things on your plate. If there's an offer there and the next moment it has been rescinded within a short period of time, I discounted it. (transcript 19 August 2014 p 1581 ll 1-28.) 204 I consider Mr Waters a credible witness. I am satisfied that Mr Waters was informed of the Citimark offer, and that his oral evidence is consistent with his affidavit evidence that he was informed by Mr Nankervis of both the Citimark offer and its withdrawal. 205 Mr Waters was, at the time of the Citimark offer and its withdrawal, the executive in Investa directly responsible for the sale of Lot 170. It was proper that Mr Nankervis should inform Mr Waters of the offer. It is unclear why the fact that the offer had been made was not raised in subsequent meetings in Investa by either Mr Waters or Mr Nankervis, however in the circumstances I am unable to see that Mr Nankervis actively failed in his duty to inform Investa of the Citimark offer.

Two Eight Two Nine Pty Ltd 206 The situation is, however, different in relation to Mr Nankervis and the acquisition by Two Eight Two Nine of Lot 170 from Investa Residential. To varying degrees at the hearing, each of Mr Tonuri, Mr Nankervis and Mr Barclay denied that they were in a business relationship in connection with Lot 170 at times alleged by the applicants. Relevantly, the applicants plead as follows: 174A. At a time unknown to Investa Properties and Investa Residential Group but before 20 January 2009, Nankervis and Barclay entered into an agreement with Tonuri, pursuant to which Nankervis and Barclay would participate in and derive profits from the sale to Tonuri or his nominee and subsequent development of the Fossil Site. Particulars (i) Email, 20 January 2009, from Tonuri to Nankervis and Barclay. (ii) Email, 24 May 2010, 10:42 am, from Tonuri to Tony Hoffman, of Hoffman Kelly, copied to Nankervis and Barclay. (iii) Email, 24 May 2010, 11:11 am, from Tony Hoffman to Tonuri. (iv) Email, 24 May 2010, 11:36 am, from Tonuri to Tony Hoffman, of Hoffman Kelly, copied to Nankervis and Barclay. … 175. On or about 6 February 2009, Nankervis prepared a Delegated Authority Approval proposing the sale price for the Fossil Site in the amount of $1,454,545 exclusive of GST. Particulars Delegated Authority Approval Submission-Development of Brentwood-Fossil Site, Brittains Road, Investa Land-Residential Lot 170 on Registered Plan 904872 signed by Nankervis on 6 February 2009. 176. Nankervis recommended the sale price of $1,454,545 for the Fossil Site on the basis that: The site is irregular in shape and heavily vegetated with steep topography, rising from the southeast to the northwest and is unattractive to our target market as only speciality custom built housing can be built on the site. The housing product needs to accommodate steep slope of 10% to 15%. No slab on ground product will be achieved and this is compounded by the tree retention Council require and also approval limitations in association with the degree of earthworks allowed on the site, there is no ability to level the site. 177. The price of $1,454,545 did not reflect the potential market value of the Fossil Site, taking into account the: (a) valuation report dated 5 November 2009 from CB Richard Ellis; (b) design amendment proposal alleged in paragraph 172 above; or (c) amended Operational Road Works Approval Application alleged in paragraph 174 above. … 186. From a date not later than August 2009 to a date unknown by Investa Properties and Investa Residential Group, Nankervis and Barclay: (a) were either engaged by or performed services for and on behalf of Tonuri or a person or persons associated with or involved in Two Eight Two Nine Pty. Ltd.; (b) provided information and assistance to Tonuri or a person or persons associated with or involved in Two Eight Two Nine Pty. Ltd.; or (c) performed duties for and on behalf of Tonuri or a person or persons associated with or involved in Two Eight Two Nine Pty. Ltd. and/ or prepared documents and other materials for Tonuri or a person or persons associated with or involved in Two Eight Two Nine Pty.Ltd. Particulars (i) Email correspondence between Nankervis, Tonuri and Barclay dated 1 August 2009, subject "Brittains Road". (ii) Email from Barclay to Nankervis dated 10 September 2009, subject "FW: 2829 - Financial Statements" (iii) Email correspondence between Nankervis, Tonuri, Barclay and Scott Jenkinson dated 15 and 16 September 2009, subject "RE:the Outlook-Contract Document." (iv) Tax invoice from Michael Dickinson Wildlife Spotter and Catcher to Two Eight Two Nine Pty. Ltd. dated 21 October 2009, subject "Bellbird Park" (v) Email from Walker to Barclay, Tonuri and "ashley@projexnorth.com" dated 18 November 2009, subject "The Outlook - Invoices to Date" enclosing: (i) tax invoice from Projex North (SC) Pty. Ltd. to Two Eight Two Nine Pty.Ltd. dated 10 September 2009, subject "095-008 The Outlook"; (ii) tax invoice from Michael Dickinson Wildlife Spotter and Catcher to Two Eight Two Nine Pty. Ltd. dated 21 October 2009; and (iii) tax invoice from KHA Development Managers to 2829 Pty. Ltd. dated 8 September 2009, subject 'Sales Disclosure Plans Lot 170 on RP90482 Parish of Bundamba, Bellbird Park'. (vi) Email correspondence from Barclay to Nankervis dated 18 November 2009, subject "FW The Outlook - Invoices to Date" forwarding: (i) tax invoice from Projex North (SC) Pty. Ltd. to Two Eight Two Nine Pty.Ltd. dated 10 September 2009, subject "095-008 The Outlook"; (ii) tax invoice from Michael Dickinson Wildlife Spotter and Catcher to Two Eight Two Nine Pty. Ltd. dated 21 October 2009; and (iii) tax invoice from KHA Development Managers to Two Eight Two Nine Pty. Ltd. dated 8 September 2009. (vii) Email correspondence between Nankervis, Barclay, Tonuri and Walker dated 4 December 2009, subject "Re: Shadforth's Update"/ (viii) Email correspondence between Nankervis, Wright (of KHA Development Managers), Barclay and Tonuri dated 16 and 17 December 2009, subject "FW: 090933T-2829-Dual Occupancies (The Outlook): Application Fee & Landowners Consent." (ix) Email from Nankervis to "david.tonuri@bigpond.com" dated 12 January 2010, subject "Fw: All Lots the Outlook 12th Jan 10.xls" (x) Email correspondence between Nankervis, Walker, Barclay, Tonuri and Manuel Siliprandi, Director Equiline Pty. Ltd., dated 25 and 28 January 2010, subject "FW: Bond Fees". (xi) Email correspondence between Nankervis, Barclay, Tonuri, Siliprandi and ]aden Frame, Westpac Banking Corporation dated 18 February 2010, subject 'Fw: The Outlook Financing'. (xii) Further particulars will be provided after discovery, the service of notices to produce and subpoenas. 187. The services and assistance provided by Nankervis and Barclay to Tonuri or a person or persons associated with or involved in Two Eight Two Nine Pty. Ltd. included: (a) preparing financial and feasibility reports; (b) project management including managing project negotiations; (c) managing land sales, including tracking land sales on a periodic basis; (d) managing project negotiations, preparing contracts and liaising with, and appointing, contractors and planners; and (e) approving and/or recommending sales prices for lots. 188. At the time Nankervis engaged in the conduct alleged in paragraph 186 above, he was an employee of Investa Properties. 207 Later at paragraph 194 the applicants plead: 194. As a result of: (aa) Entering into the agreement with Barclay and Tonuri, alleged in paragraph 174A above; (a) Making the incorrect statements about the Fossil Site, as alleged in paragraph 178 above; (b) Recommending a sale price of $1,454,545 without taking into account and without disclosing to Investa Properties or Invcsta Residential Group the facts alleges in paragraph 177 above and the incorrect statements alleged in paragraph 178 above; (c) Providing services to Tonuri and to Two Eight Two Nine Pty. Ltd. or to both of them, as alleged in paragraph 186 above; and (d) The relocation and decommissioning of the sales office, as alleged in paragraphs 190 and 192 above, Nankervis breached: (i) His fiduciary obligations to Investa Properties and Investa Residential Group; (ii) Section 182 of the Corporations Act, and (iii) Section 183 of the Corporations Act. Particulars Particulars of breaches of fiduciary obligations (1) Nankervis did not act in good faith and with fidelity towards Investa Properties Pty. Ltd. and Investa Residential Group Pty. Ltd. at all times during his employment with Investa Properties because of the facts alleged in paragraphs 174A-177, 186, 187, 188, 192. (2) Nankervis did not avoid and disclose to Investa Properties or to Investa Residential Group actual or perceived conflicts of interest because of the facts alleged in paragraphs 174A, 186, 187, 188, 192. (3) Nankervis did not at all times act in the best interests of Investa Properties and Investa Residential Group because of the facts alleged in paragraphs 174A-177, 178,186, 187,188, 192. (4) Nankervis did not pass on to Investa Properties or to Investa Residential Group all information he had about the marketing and sale of the properties that were the subject of his employment and that might be relevant to the marketing because of the facts alleged in paragraphs 174A-177, 186, 187, 188, 192. (5) Nankervis profited from his position, or stood to profit from his position, other than by receiving remuneration in the course of his employment with Investa Properties and did not disclose that fact to Investa Properties and Investa Residential Group because of the facts alleged in paragraph 174A. Further particulars will be provided if necessary following completion of discovery and return of subpoenas. (6) Nankervis gave assistance to persons with whom he was associated, or to persons or entities from whom or from which he could expect a benefit to purchase the properties which he was engaged in the marketing and sale of without full disclosure to Investa Properties or to Investa Residential Group because of the facts alleged in paragraphs 174A, 186, 187 and 192. 208 Mr Nankervis denies the allegation in paragraph 174A of the amended statement of claim, and further pleads as follows: 114. As to paragraph 186 of the statement of claim, Mr Nankervis: (a) admits that he provided information and assistance to Mr Tonuri; (b) otherwise denies the allegations therein; (c) says that: (i) Mr Tonuri worked for a bank and was not experienced in property development; (ii) in early 2009, Mr Tonuri said to Mr Nankervis words to the effect that he had the money to purchase Lot 170 but would need his help in getting the right consultants and to get it up and running; (iii) Mr Nankervis said he would help him if he purchased the property; (iv) he agreed to do so in order to achieve the sale and because it was in the second applicant's interests for him to be involved so as to most effectively resolve the interface issues between Lot 170 and the balance of the Brentwood site and requirements of the Brentwood Master Plan, including sewer alignment, pathway connections and the road frontage works. 115. As to paragraph 187 of the statement of claim, Mr Nankervis: (a) denies the allegations therein; (b) says that: (i) he provided introductions to consultants and contractors; (ii) he attended a meeting between Mr Tonuri and a finance broker; (iii) he ran a feasibility model using inputs provided by Mr Tonuri; (iv) the project was managed by Projex North, project management consultants engaged by TETN. 116. As to paragraph 188 of the statement of claim, Mr Nankervis: (a) admits that he was an employee of the first applicant at the time he gave assistance to Mr Tonuri; (b) otherwise denies the allegation therein; (c) says that the assistance that he gave to Mr Tonuri: (i) was generally given outside business hours and on weekends; (ii) was given for no payment or reward; (iii) did not interfere with, adversely affect, or conflict with, his responsibilities to the first applicant. 209 Further, and relevantly: In response to paragraphs 169 to 173 of the amended statement of claim, Mr Nankervis pleads at paragraph 106(b) of his second amended defence: (iii) during the period from in or about November 2008 to in or about February 2009, Gavin Stubbs instructed Mr Nankervis, orally and by emails, to the effect that he should do anything and everything he could to ensure that a sale of Lot 170 was achieved … (v) the only sale that was achievable at the time was the sale to Two Eight Two Nine Pty Ltd (TETN) for $1.6 million (including GST) In response to paragraph 176 of the amended statement of claim Mr Nankervis pleads at paragraph 109(c) of his second amended defence: (iii) a sale to TETN for $1.6 million was the only achievable sale at the time; (iv) the proposed sale price was just below the price for which the second applicant had previously agreed to sell the property to Brittain Road Pty Ltd and the Jones Lang LaSalle valuation obtained by the second applicant in June 2008.

Evidence of the existence of an arrangement 211 Mr Tonuri gave a statement in this proceeding on 2 June 2014. In relation to his interaction with Mr Nankervis, Mr Tonuri deposed relevantly as follows: 69. I had not undertaken a property development project previously. I was also living in Sydney in 2008 and 2009. My capacity to successfully complete the project under those conditions was questionable. 70. I recall telling Mr Nankervis that in or about January 2009. He indicated that he would be able to provide ad hoc advice (both before and after acquiring Lot 170) given his own experience as a civil engineer, including by putting me in contact with a variety of people relevant to a property development project such as civil contractor, a project superintendant, a cultural heritage consultant, a koala catcher, a tree clearing contractor and so on. 71. I understood from discussions with Mr Nankervis at the time that he was under huge pressure from Investa to get Lot 170 sold, especially after the prior offer had failed to complete, and had been made personally responsible for making this happen. 72. Mr Nankervis also mentioned to me that he was in line for a decent bonus from Investa that year if he sold Lot 170 and made his plan. I cannot precisely recall the figure that he mentioned, but it was either $65,000 or $120,000. 73. That being the case, I took maximum advantage of these circumstances by having Mr Nankervis commit to helping me out in these areas specified. I would not undertaken the project without this commitment and regarded this commitment from him as an inducement given on the part of vendor for me to transact. 74. All of the tasks performed by Mr Nankervis didn't seem like a huge effort to me. They seemed to me to be done in his spare time and on the weekends or after work. … 81. Mr Nankervis and entities associated with him agreed in late 2009 to buy 2 finished lots in the development under put and call agreements at a price of $190,000. 82. These put and call agreements assisted me greatly in obtaining the level of pre-sales necessary to be able to draw down on the construction finance and thereby commence the development phase of the project. 85. In 2011 and 2012, I was having significant issues with the collapse of a major structural wall to the eastern side of Lot 170. The wall had been badly damaged by the rains that led up to the January 2011 floods. The civil contractor that built the wall was refusing to engage with me and Ipswich City Council was threatening to take civil action against me as well as to confiscate my performance bond of some $160,000. 86. I asked Mr Nankervis, who by this time had long ceased employment with Investa, to provide me some paid civil engineering assistance over a period of about four months, which he was happy to do. He invoiced Two Eight Two Nine Pty Limited an amount of approximately $90,000 which I negotiated down to $70,000 and paid him in September 2012. … 91. In August or September 2009, I recall having lunch with Mr Barclay and Mr Nankervis at Mr Barclay's apartment in New Farm. At this time, the purchase of Lot 170 had recently completed. 92. I was extremely grateful for the assistance that both had provided me over the previous 9 months or so, and so raised with them a proposal that I grant each a one third interest in the project in recognition of that. 93. I also had concerns about what would happen if my partially completed divorce proceedings interfered with the development that was soon to commence. I believed that the project would be less at risk of Mr Barclay and Mr Nankervis diluted my own interest down to a one third shareholding. 94. Both Mr Barclay and Mr Nankervis immediately rejected the proposal that I put forward on the basis that it would be entirely inappropriate for that to happen. Mr Nankervis was considerably more dismissive than Mr Barclay. I allowed the discussion to lapse. 212 Mr Tonuri subsequently deposed that he, Mr Barclay and Mr Nankervis had become close friends as a result of the amount of time they had spent together, and that by mid-2010 they had become interested in setting up a property syndication business (statement of Mr Tonuri paras 99-100). 213 In oral evidence under cross-examination from Mr Nankervis, Mr Tonuri explained the provenance of another corporation in which he had an interest, namely Bandat Pty Ltd. It appears that, at material times, Bandat Pty Ltd was a wholly-owned subsidiary of Two Eight Two Nine. Relevantly Mr Tonuri said: Okay. The statement then goes on to say that Two Eight Two Nine Proprietary Limited through a subsidiary called Bandat Proprietary Limited 5 had an option acquired at a nominal 5000 to develop a second site. Just putting the second part of that to one side for the moment, what was the association of the identity Bandat in relation to the principal entity Two Eight Two Nine Proprietary Limited?---At this point in time, Bandat Pty Limited was a wholly owned subsidiary of Two Eight Two Nine. It was incorporated on 3 February 2009 and the relevance of the company name is that it is the combination of the initials of me, of yourself and Mr Barclay. And the relevance of that entity, what was the -the relevance of that entity you've described but what was the purpose of that entity and whose brain child was that?--- Yes. In mid to late January 2009, I recall a conversation that I had with yourself and with Mr Barclay in which I proposed some arrangements whereby we would acquire and hold the property jointly in equal thirds as between the three of us. During that meeting, we agreed that was a good idea. I went off and subsequently incorporated Bandat as a vehicle through which that purchase would take place. I recall perhaps four or five days later, you telephoning me saying that you had had a private with Mr Barclay and you had agreed between the two of you that it was a bad idea and that it would not be possible for you to hold an involvement in the project because of your responsibilities towards other organisations. Right. And the date of the incorporation of that Bandat company, just to confirm for the court?---3 February 2009. Okay. And the activity under that entity you describe here as nominating - nominally looking to develop a second site. Could you just elaborate on that?---The proposal to acquire the site through Bandat was abandoned after that conversation with you that I've described and it was for that reason that I pursued the purchase of the property through a completely separate entity, begin Two Eight Two Nine. In terms of the activities of Bandat, it only ever has done two things: one is to be the nominee option holder of a second site that ended up not progressing and Bandat is also the - now the trustee of my self-managed super fund. It has had no other commercial operations other than those two issues that I've described. (transcript 22 August 2015 pp 1662-1663.) 214 Later under cross-examination by Mr Murr for the applicants, Mr Tonuri said: And, in fact, you did reach an agreement with Nankervis and Barclay in December or January '09 that they would each take a one-third interest in the project that would follow the acquisition of lot 170?---The only agreement that was - that took place was the one that I've - the one that I've referred to in document marked 224 in - 45 sorry. I've got my documents mixed up. The only agreement is the one that I've referred to that happened in the late part of January and it was one which lapsed once I had received the phone call back from Mr Nankervis saying, "Look, very, very kind and generous of you but we can't do it." So I - I allowed it to lapse and I had another go at them in early August when I realised how much I would need both of them going forwards. (transcript 22 August 2014 pp 1718-1719.) 215 Significantly, evidence was also produced to the Court in the form of redacted affidavits sworn by Mr Tonuri in the Family Court of Australia proceedings between himself and his former wife in 2009. Materially, Mr Tonuri deposed in that material that he and Mr Barclay had had detailed discussions concerning Lot 170, and that on or about 31 January 2009 he had agreed with Mr Barclay that Bandat Pty Ltd would be incorporated to purchase Lot 170, with Mr Tonuri holding a one-third interest in the project and Mr Barclay and Mr Nankervis the remaining two-thirds. Mr Tonuri deposed that he understood that neither Mr Barclay nor Mr Nankervis wanted to be publicly associated with that particular project because of their involvement in other projects in the area. The tenor of Mr Tonuri's evidence was that Mr Barclay was particularly active in relation to this venture, and had obtained funds to pay the deposit (by way of a loan at commercial interest rates) required by Two Eight Two Nine to purchase Lot 170, settlement of which took place on 30 July 2009. Mr Tonuri also deposed in his Family Court affidavit that on or about 1 August 2009 he provided to each of Mr Barclay and Mr Nankervis a letter confirming their one-third entitlements to the assets and profits of Two Eight Two Nine and all related developments. 216 In his statement of 2 June 2014 in these proceedings, Mr Tonuri acknowledged that he had given the evidence in the Family Court proceedings which I have just described, however sought to modify the nature of that evidence in the following manner: 108. In July 2010, whilst this property syndication business opportunity was under active consideration, my former wife made an application to the Family Court for the entire project to be transferred into her name in satisfaction o a lump sum child support and spousal maintenance order that she was seeking, even though my property division orders had been finalised in December 2008. 109. I couldn't allow that to happen given the personal animosity that my former wife had towards me. It would have caused the project to collapse and in all likelihood for me to have become bankrupt in the process given the personal guarantees that I had provided to the company. 110. I saw it highly probable at the time that I would go into business with Mr Barclay and Mr Nankervis, and pursuant to which I would allocate an unspecified interest to them in some form as part of the process. 111. I deposed that Mr Barclay and Mr Nankervis each held a one third interest in the company as that was close enough to my best expectation of how matters might take place. 112. The Family Court matter did not go to trial and was settled via Consent Orders. 113. I subsequently took a new job with the Bank of Queensland and lost interest in proceeding with the property syndication business. 114. Neither Mr Barclay nor Mr Nankervis were ever advised about the issues disclosed in paragraphs 108 to 112. 217 Tendered as exhibit 116(A) in the proceedings was an email from Mr Tonuri to Mr Mike Nicholls of Mortgage Corp, mortgage brokers, dated 16 June 2009 in which Mr Tonuri wrote, materially: The other two people who have been helping me (and who will get a share of the profits down the track) are both based in Brisbane - one is an experienced civil engineer and has helped with the Development Approval and Operational Works Approval through Ipswich Council, and the other is a long-term house and land project sales guy - and so there is a good assembly of skills in developing the site further - including contacts with builders and investor syndicates etc etc. Done well, there is a good $4-5m of profit in the project, so would be very interested in having you help here. 218 At the hearing Mr Murr cross-examined Mr Tonuri concerning this evidence and the roles of Mr Nankervis and Mr Barclay in connection with Lot 170. In particular, I note the following exchange: You've read that?---Yes, I have. The other two people who have been helping me and who will get a share of the profits down the track. ?---Mmm. How do you explain those words?---That indicated my intention to have another ping at Mr Barclay and Mr Nankervis to lock them into the project. No. You're not saying there you're going to have another ping at something, as you put it. You're saying there they will - will - get a share of the profits down the track, Mr Tonuri?---Well, I express here my hope that I can lock them in, in such a way so I could secure their services and which I - services I regarded as necessary for the successful completion of the project. Do you understand the difference between the reality of something and a hope that something will occur?---Of course I do. Do you understand the difference between the reality of something and an expectation that something will occur?---I do. You're not saying anything there about a hope there, Mr Tonuri; you are saying: And who will get a share of profits down the track. ?---Well, that was my expectation in writing that, that I would be able to secure an arrangement with them, the arrangement that I subsequently put to them on 1 August. Why then didn't you put "And whose services I hope to secure on a long-term basis by offering them a one-third interest in the project. Why didn't you say that, if that was the truth?---Well, in terms of these particular words, I would have written what was the simplest way to communicate to a person, being this mortgage broker, at the time. Yes. You would have put the truth as you saw it, wouldn't you?---I would have put my expectation of what I would look to do going forwards with their involvement in the project, which I certainly would have needed, given my inexperience with running a property development project under my own steam. And the truth as you saw it at this stage was that you had an agreement with Mr Nankervis and Mr Barclay that they were one-third participants in this project. That's right, isn't it?---That is wrong. I don't say that here. Well, you come very close to it, Mr Tonuri, when you say: And who will get a share of the profits down the track. That's very close to saying that they are ownership participants in this project, isn't it?---I don't say that. You might now answer my question, which is that's very close to saying that, isn't it?---It is my hope and expectation there that I would be able to lock them in. And for reasons that I've also disclosed in my - - - Do you need me to repeat the question, Mr Tonuri?---I don't need you to. Well, could you answer it, please?---For reasons that I've also - for very similar reasons as which I've disclosed in my statement at paragraph 53 and paragraph - sorry, paragraph 53 and paragraph 79, communicating that I had people who knew 15 what they were doing involved was beneficial for my attempts in raising finance. And bearing in mind that this email was to a mortgage broker, so for the very same reasons in paragraphs 53 and 79, it helped my case to present a message that I had people involved who were going to be involved and drive this project towards completion. And my question - accepting that - I accept that that's completely true and I'm saying that you had those people lined up from January 2009, but the question I actually am asking you is why didn't you just tell people the fact of the matter, if it was the fact of the matter, that this was somebody - these were people that you had lined up and whose services you proposed to secure by offering a one-third interest in the project, rather than by saying that they were people who will be sharing profits down the track? Why didn't you do that?---The answer to that question is in paragraph 54 of my statement, which says: I was content to allow any ambiguity on their respective parts to continue, so long as the misinterpretation played to my commercial advantage. I was more than happy to provide an impression that I had skills and capability locked in in such a way to give financiers the confidence that I would be able to follow through with getting the project done. But if what you're saying is correct, then that statement that you made in this letter is a straight out lie, isn't it?---No, it's not. Well, you didn't have people locked in, did you?---Well, I had people who were there willingly able - willing and able to help me, as they had been doing since January 2009. You didn't have them locked in, did you?---I don't say I have them locked in here. Right. Of course, the truth of the matter is you did have them locked in, because you had had the agreement - you were in agreement with them since January, weren't you?---Well, that is incorrect. (transcript 22 August 2014 pp 1790-1792.) 219 It is also helpful to consider the emails upon which the applicants specifically rely in their amended statement of claim. 220 The email of 20 January 2009 from Mr Tonuri to Mr Nankervis and Mr Barclay read, materially: Guys, Attached is a model that I have knocked up which focuses on how we might finnace [sic] the project. I have lifted the numbers for the most part out of the latest printout from Estate Master - with the two exceptions being (a) an assumption of 20 sales before Sep 09 and then 3 per month thereafter with all those sales settling in Jul 10 when the civil works are complete, and (b) an average selling price of $175k to be ultra conservative. … I have modelled with the bank finance is 60% lending progressively against the land, the improvements and then against the presales. Put another way, if we pay $23k for the land, then we get 60% of that as debt, then if we pay another $89k to improve, then we get 60% of that as debt, and then when we record a presale, then we get to borrow 60% of the profit per lot as debt in advance of the Jul 10 settlement. It is a little rudimentary but gives a good indication of the project profits after bank finance and before splitting the profits amongst us and the equity providers. The main points to note are that: 1) the amount of equity required stays below $2m for just about the entire period (the exception being just before the end of construction) 2) the debt would be drawn for just 10 months 3) the project comes into cash profit by Oct 10 4) the average drawing for the equity is about $1.5m ... which means that is matters little what the carrying cost of the equity is, whether it's 10%, 15%, 20% or 25% because the difference is just a few $000k ... the greater sensitivity for us is the amount of the final profit we have to pay away which in this model is $3.5m in total. What we each ought to be thinking about over the next few days is what our pain threshold is in terms of how much of … profit we would be prepared to give up, so that we can yes/no any proposal that Bill gives us reasonably ..ickly [sic]. Any comments welcome. (gaps in original before the Court.) 221 The second, third and fourth emails of 24 May 2010 pleaded in paragraph 174A of the amended statement of claim were in a chain of four emails between Mr Tony Hoffman, of Hoffman Kelly Accountants and Mr Tonuri on that date. Materially, these emails were as follows: The email from Mr Tonuri to Mr Hoffman at 10.42 am on 24 May 2010 read: Thanks, Tony. I caught up with Adam and Ashley on the weekend and we kicked the issue around a little. I broadly understand how a DAS works but I had always thought that they were right on the boundary in terms of anti-streaming provisions ... it's very much more in your area of expertise than mine so I take it that you don't see any material ATO risks in this approach? As 2829 won't be in the position of having to pay tax until April 2012, I would presume that any such dividends paid in specie will be treated as unfranked dividends to the recipients? I had always regarded the "base case" scenario as one where 1/3rd of the pre-tax project profits would be paid to each of Adam and Ashley (and/or their nominated entities) either (a) in cash or (b) via an in specie distribution of finished lots or (c) as payment of the sale price amount owing to settle some lots in their names or (d) some combination of (a) to (c). This would take place through presentation of an invoice for the specified amount. This amount would be deductible to 2829 and assessable to the recipients, such that each of 2829, Adam Co and AshleyCo have taxable income of 1/3rd of the pre-tax profits and liability for tax on that income. There would be stamp duty payable in (b) and in (c), and GST payable and claimable in all cases. There may be some capacity for part of the amount to fall under the CGT umbrella in the event of (c) and where the lots are held in personal name or through a trust for 12 months. I am unsure as to precisely where the advantage comes in following the DAS approach as opposed to the "base case" scenario outlined above. Can you please elaborate for me? The email from Mr Hoffman to Mr Tonuri at 11.11 am on 24 May 2010, provided: Many thanks David, My understanding is that (1) there is a "gentlemen's agreement" that the profits are split 1/3 each, (2) that you are near the end of the [d]evelopment and (3) wish to move the remaining stock out of the company 1/3 each. As I understand, it is the intention of our clients to hold the lots on investment account and as such, their entities (trusts) will not have to register for gst and would be assessed (if in the event of an eventual sale where the land is held> 12 months) on only 50% of any capital gain. It would be arguable (given our observations & experience with our developer clients), in the event of a trade sale of the remaining lots from the company to related trusts, a discount of between 15%-20% is not uncommon. This would result in a discounted sale price to the trusts, reduced stamp duty for the trusts, less tax for the company and less GST on the sale. These transfers/sales could be affected before 30/6/2010 and an estimate of the tax payable paid voluntarily before 30/6/2010 with fully franked dividends paid on 1/7/2010 (to DAS holders) to clear all retained profits and loans. We never pay unfranked dividends from a Pty Ltd company .... (tax planning 101) We have regard to several private binding rulings obtained from the ATO where, provided properly issued, Dividend access shares: 1. do not trigger value shifting 2. do not trigger dividend streaming provisions 3. do not trigger dividend stripping provisions 4. do not trigger debt/equity provisions The ATO has recently confirmed this in a private ruling involving over $20 million in dividends paid to DAS holders. Of course, should you guys wish to go down the "base case" scenario, that is perfectly fine, we will just ask that we liaise with you and your accountants to try to minimise the "income tax issues" to our clients associated with the "invoicing" process. The email from Mr Tonuri to Mr Hoffman at 11.36 am on 24 May 2010 read: 1 will have a think through this … but 2829 is unlikely to be able to make the voluntary payment of tax on 30 June 2010 ... which could be a problem with the DAS solution as suggested. In the second paragraph below, I presume that the cost base for the entities would be set at the 15-20% discount level (so circa $180k per lot) so the concessional CGT treatment arises on any gain made over this level (assuming > 12 months holding period), with income tax payable by the entities in the 2010/11 year on the cost base of lots received? That being the case, then I see the advantages of reduced stamp duty etc etc ... although this same outcome could also be substantially achieved through the invoicing approach ... and option (c) referred to in my email below. 1 am not sure if there is an angle with GST though after reading your comment about registration for GST ... are you … that there is an approach whereby the lots can be held in an entity which does not have to be registered for ..T and therefore when that entity sells each lot, it is not required to remit 10% of the sale price to the ATO as GST? 1 am not sure if if [sic] is relevant, but the margin scheme does not apply here for 2829. (gaps in original.) 222 I note that the previous email in that chain on that day was from Mr Hoffman to Mr Tonuri at 9.42 am and read: Thanks David Yes, that would be the case if you established the company directly via ASIC. In that case, you probably took the "replaceable rules" option which is a very simple form of constitution embedded in the Corporations Act. Did you guys want us to take over the ASIC work on this one?? Provided that the Company strictly issues a Dividend Access Share with no rights to the capital of the company- there should be no land rich duty on that issue. This is on the basis that the land rich provisions are triggered when there is an acquisition of an "interest" in a land rich company. "Interest" is defined as the entitlement that a shareholder would receive if the company was wound up. If the Dividend Access Shares contain no rights with respect to the capital of the company, there is no acquisition of an interest and therefore no dutiable event. To be able to issue this type of share, the company will need to adopt a new constitution as "replaceable Rules" under the Corp Act do not have these powers. We can get a new constitution prepared which will contain a special class of Dividend access share to issue to each of you respectively to be able to extract the final product via dividend. 223 Further, the first in the chain of emails was sent at 9.54 am on 22 May 2010, from Mr Tonuri to Mr Hoffman, and specifically copied to Mr Nankervis and Mr Barclay. It provided: 1) I don't believe that the company has a Constitution ... I don't think a company must have one these days … when I got it incorporated, I am pretty sure that I ticked the box saying "don't worry, I will stick with the standard ASIC provisions" ... would this be right? 2) Attached is the latest Company Annual Statement. 224 In my view, these emails clearly evidence an arrangement between Mr Tonuri, Mr Nankervis and Mr Barclay in relation to a development project concerning Lot 170, in respect of which they were in receipt of accounting advice from Mr Hoffman, and in respect of which it appears Mr Tonuri had taken the lead role. In so concluding I also make the following observations. 225 In relation to evidence of Mr Nankervis, I note that Mr Nankervis conceded that the word "Bandat" was an anagram of the initials of himself, Mr Tonuri and Mr Barclay. 226 Before the Court the tenor of Mr Nankervis' evidence was that his actions in relation to Mr Tonuri and Two Eight Two Nine were motivated only by his wish to have the sale by Investa to Mr Tonuri concluded. So, for example, in response to questioning from Mr Murr for the applicants concerning an email of 15 May 2009 from Mr Nankervis to Mr Tonuri and Mr Barclay in which Mr Nankervis had written, inter alia, "We have the potential to sell this site to a purchaser at $4.8M on this basis", Mr Nankervis gave the following evidence: Yes. Now, the put and call option that was entered into with Two Eight Two Nine was dated 20 February 2009, wasn't it?---I think that's correct. That's about almost three months before the date of this document?---Okay. So effectively, Investa had sold the land to Two Eight Two Nine Proprietary Limited about three months prior to this email. Do you agree?---Effectively, yes. Yes. This email is from you directed to Barclay and Tonuri, correct?---Correct. Do you agree it's an unusual email for a vendor to be writing to a purchaser, effectively three months after the property has been sold?---The context around it is probably the thing that needs to be explained. Do you agree it's unusual or not?---No. All right. Thank you. In that you say: We have the potential to sell this site to a purchaser at $4.8 million on this basis. Do you see that?---I see that. Who's we?---I was working with - helping David with trying to get this deal across 25 the line with Investa, so I was talking generally. Just talking generally?---Yes, yes. Well, who's we? Who is we? Who do you mean when you say, "we"?---The group. The group. Who's the group?---That email is directed to two others, David and Adam Barclay. So you and Barclay and Tonuri had the potential to sell this site to a purchaser for 35 $4.8 million on this basis. Is that right?---No, that's not what that means. Well, I'm just using your words, Mr Nankervis?---Sure. Who is the group that you're referring to as "we"?---I just explained that to you, Mr Murr. Well, I thought you said it was - - - HER HONOUR: Okay. I'm afraid I'm a bit confused too, Mr Nankervis?---The - the terminology of "we" - as in, I was assisting David to get this project to the end for the purpose of everyone involved, and I'm talking about generally. So who is "we"? When you say "we", you mean you in your capacity as - - -?---I was helping David in that capacity, yes. All right. Thank you. MR MURR: So you were just - and what exactly was Investa's interest in this at this stage, three months after? Effectively you had had Tonuri on the hook?---Investa - their interest was to complete the approvals in line with the initial - in line with the initial contract, which was the subsequent requirements of David proceeding. So that was the - that was the Investa issue at the day. That last statement, I put it to you, is untrue, that there was any obligation to do anything about approvals?---I don't think you're right. Okay. But in any event, this has got nothing - this not about approvals, is it, this email?---You just asked me what Investa's deal was. But this email isn't about approvals, is it?---You didn't ask me that. You asked me what Investa's deal was at the day, and I answered it. And you identified its interest as to being one to do with approvals, didn't you?---I said they had an ongoing interest on the back of approvals that had to be had which were post this date. This email has got nothing to do with approvals, has it?---No. This email has got to do with working out various scenarios of prices at which the land could be sold. Isn't that right?---Yes, but that wasn't what you asked three questions ago. Well, it's what I'm asking you now, Mr Nankervis?---Yes, and I agree. And I take it you agree with that proposition?---I do agree with that proposition. And what you're saying is that "we" have the potential to sell the site to a purchaser for $4.8 million, correct?---That's what it says. Well, that's what you said, isn't it?---Well, that's what it says, yes. (transcript 29 September 2014 pp 1923-1924.) 227 In relation to the incorporation of Bandat Pty Ltd, Mr Murr for the applicants put to Mr Nankervis an email from Mr Tonuri to Mr Nankervis and Mr Barclay dated 3 February 2009, which was in the following terms: I have incorporated Bandat Pty Limited ACN 135 188 055.> In setting up, there is one director (Sue-Ellen) and one shareholder (me) for now- but let me know who to add and also when would be the best time to do so. I will keep all the company documents here - but if we need anything like company incorporation certificates along the way, then I can send them through. 228 Mr Nankervis' evidence in this respect was as follows: MR MURR: Go the last email in that series, if you would, please, Mr Nankervis, commencing at the bottom of page 9037 and continuing into page 9038. Do you see it?---Yes. That's from Tonuri to you and Barclay?---Yes. Subject Bandat?---Yes. It says he's incorporated Bandat Proprietary Limited. And that's - Bandat, as we now know, is a - an anagram of your initials, correct?---Correct. He describes the corporate structure as one director and one shareholder for now, "but", he says: Let me know who to add and also when would be the best time to do so. And that's something which is directed to you and Barclay; correct?---Correct. And can I suggest that the reason he was making that request was because you and Barclay were - I withdraw that. Because - first of all, because Bandat was intended to be the vehicle through which this land would be purchased and developed - correct?---I'm unsure whether that was what his intent was. Well, you put Bandat in ..... delegated approval authority submission as to purchaser, didn't you?---I don't know. I see. All right. In any event, my suggestion is that that was the intention, and the intention - and it was also the fact of the matter, that you and Barclay were equal participants in that venture - that's right, isn't it?---What venture? The venture of the purchase and the development of lot 170?---No. And the reason that he's asking, to let you know who to add - let him know who to add - and also when would be the best time to do so was because of the possibility that, as co-venturers, you and Barclay may wish to become shareholders of the venture company. That's right, isn't it?---No. I did not wish that at all. HER HONOUR: Can I just ask a question. Mr Nankervis, what's going on with Bandat? I mean Bandat was obviously created by Mr Tonuri - - -?---At some point. At some point?---Yes. Its initials are your initials - - -?---Yes. - - - Mr Barclay's initials - - -?---That's right. - - - Mr Tonuri's initials, so what's going on with Bandat?---It - - - - - - as far as you knew at the time?---At the time, he was proposing to - David was unemployed at the time, was proposing to get into property development. And it was a vehicle he created, or an entity he created, to do that with myself and Mr Barclay. He threw several propositions around about joining him in some capacity to do things, and that's what it was about. All right?---Yes. And did you - you were - and did you say - I presume this is with your agreement; is that right?---No, I've never agreed to anything. All right?---Those discussions were - - - So - sorry, so did you say to him, "Look, I don't want to be involved in something like this with you, and why are you creating a company with our initials as the name of the company?"?---Yes, we - - - Did you say that?---Yes. Did you say that to him?---Yes. Yes and - - - All right. Is that - - -?--- - - - these confirm it. Is that in evidence somewhere?---Sorry? Is that in evidence somewhere or?---Yes, yes. Where is it?---It was in his statement. It was in the court transcripts when he attended on the day that he was giving evidence, or days. So yes. So he made note of that. All right. And I simply just make the observation that it's a bit - it would be a bit odd for someone who does not expect to be in a business relationship with you to create a company, or have a company incorporated, with - which seems to nominate you, at least in the name of the company, as having an interest?---He thrashed things around probably more with Mr Barclay than me, and I actually probably weren't involved in any detailed conversations, and he moved pretty quickly on all that sort of stuff, yes. All right. Okay?---Yes. Thank you. (transcript 30 September 2014 pp 2040-2042.) 229 Further, in relation to an email from Mr Tonuri dated 1 August 2009 concerning the possible acquisition of a block of land adjacent to Lot 170, Mr Nankervis replied in an email dated 3 August 2009: David, I think the opportunity needs to be acted on especially if we are to develop rather than dispose Lot 170. It would be better for us to lodge a new DA as we already have a Negotiated Decision Notice on the existing OA and council would see further changes not as minor ammendments [sic] and would most likely make us start the process again for both. 230 In relation to this email, Mr Nankervis gave the following evidence: Why did you use the word "we" there?---Because I think this was post him purchasing lot 170, wasn't it, if the dates - what date was that? Yes. And I washelping him, assisting him doing some work for him in a development management sense. I see?---Yes. And that's all - that's all you were doing?---Yes. I see. Why are you saying "If we are to develop rather than dispose of lot 170"? Why didn't you say if you are develop and dispose of lot 107?---Because I always talk about it as a - as a group. Because you were a group, weren't you?---In a development management sense, I was helping him. Yes. In splitting the profit sense, you were a group, weren't you?---No. You refer, "It would be better for us to lodge a new DA as we already have a negotiated decision notice on the existing DA." All throughout this document you are referring to "us" and "we" and "our" aren't you?---Yes. As a development team. Correct.

The CB Richard Ellis report, design amendment proposal and amended Operational Road Works Approval Application 231 The applicants claim against Mr Nankervis in relation to these matters can be found in paragraphs 177 and 194 of the amended statement of claim. In summary, the applicants plead that Mr Nankervis breached his fiduciary duties to the applicants by failing to disclose to them: the existence of the CB Richard Ellis report, which placed a value of $4 million on Lot 170; information contained in the design amendment proposal ("design amendment proposal") prepared by Projex North which contemplated engineering works to significantly flatten allotments in Lot 170, thus facilitating the construction of housing in the area; and the fact that from about December 2008 Mr Nankervis both knew of and had prepared correspondence to the Ipswich City Council seeking approval to level and retain Lot 170 to create flatter lots ("amended Operational Road Works Approval application"). 232 Mr Nankervis accepted that on or shortly after 19 November 2008, he was aware of the CB Richard Ellis report and that it valued Lot 170 at $4 million (transcript 29 September 2014 p 1914 ll 23-28). Mr Nankervis gave evidence that Mr Waters received the CB Richard Ellis report on the same day that he did (transcript 29 September 2014 p 1940 l 10, 30 September 2014 p 2112 l 45). Mr Waters agreed that it was likely that he had also seen the CB Richard Ellis report, as it had been sent to him by Mr Barclay (transcript 19 August 2014 pp 1596-1597, email of 19 November 2008 from Adam Barclay to Ashley Nankervis and Mark Waters). 233 In relation to the design amendment proposal and the amended Operational Road Works Approval application, the evidence before the Court is that the Investa had engaged design and engineering consultancy, Hyder Consulting, to complete a bulk earthwork strategy in relation to the Brentwood developments, and development costs including those associated with achieving earthworks necessary for the site including landscaping works, pathways, pavements, structures, soft works and maintenance. It was not disputed in the trial that, as deposed by Mr Walker during his oral evidence in relation to Lot 170, the allotments were very steep from a land development point of view or a subdivision point of view and required significant earthworks on a fair proportion of the sites for any potential homebuilder (transcript 4 June 2014 p 208 ll 16-18). Certainly, executives in Investa understood that Lot 170 was steeper than other Investa sites in the area (for example, evidence of Mr Gavin Stubbs transcript 10 June 2014 p 537 l 38, p 605 ll 37-40). This work was undertaken by Hyder Consulting in relation to Lot 170 on or before 11 August 2008, when an operational works application from Hyder Consulting was submitted to the Ipswich City Council in relation to Lot 170. It appears that estimated costs which would have been incurred in undertaking the development of Lot 170 in accordance with the proposal of Hyder Consulting were not prepared until 11 May 2012, and I note that this estimate - and its reliability - was the subject of extensive submissions (in particular by Mr Nankervis at transcript 17 October 2014 pp 3053-3057). 234 It is also clear that the Ipswich City Council approved operational works in respect of Lot 170 on or about 4 November 2008. Mr Nankervis was informed of this approval by email of that date by the Council, an email which he immediately forwarded to Mr Waters, Mr Barclay, and Mr Bill Thompson of Brittains Road Pty Ltd, who had entered into a contract to purchase Lot 170. 235 The subsequent engagement of Projex North by Mr Nankervis was clearly undertaken in anticipation that Projex North could produce a redesign of Lot 170, which would result in a "levelling" of Lot 170 and individual lots resulting from its subdivision, thus permitting easier construction of houses and more economical building costs. In his affidavit of 6 December 2013, Mr Walker gives evidence to this effect, including the following: 14. Around December 2008, I received a phone call from Nankervis in relation to an Investa project known as Lot 170, also known as the Fossil Site and sometimes ''Brittains Road". After exchanging greetings, we had a conversation to the following effect: Nankervis: It's about the Fossil Site. Hyder Consulting recently prepared an operational work design for the site. The design has been approved, but can you take a look at the design and let me know if you think you can improve it? I said: Sure, but why do you want to engage us, when Hyder has already done the design? He said: They are snowed under with work at the moment. They don't have the resources and we need to get this going as soon as possible. I said: Okay, happy to help. What is it that you were looking to do? He said: The site needs to be flattened It has steep sloping lots which require extensive retaining walls. I'm concerned about earthworks on the site. I want to know whether there is something that can be done to flatten the lots without increasing the size of the retaining walls as a result. I said: I would be happy to have a look at it for you. Can you send the design to me and I will review it. He said: Great. I'll send it over. What we would like to do is flatten the land on the site, so your proposed design should consider how best that can be achieved. I said: Okay, I understand. He said: It needs to be done quickly on the seventy-seven lots. 236 Mr Walker also gave evidence of his interaction with Mr Nankervis in light of his proposed redesign of Lot 170, as follows: 15. On 10 December 2008 at 11.36 pm, Nankervis sent me an email with four attachments. A copy of the email dated 10 December 2008 with the subject line, "Brentwood - Fossil Site Estimates" (excluding the attachments) is annexed and marked DJW-5. 16. After reviewing the design proposal that had been prepared by Hyder Consulting, I considered that I could achieve various improvements on the site and I developed a redesign of the site that achieved the requirement of flattening the lots with minor increase in retaining structural heights and improved other components of the civil design as well. I also considered factors such as the costs which would be associated with my redesign as is typical when performing these types of works. 17. Between 10 December 2008 and 16 December 2008, I had a few conversations with Nankervis. I cannot now recall the words we used, but I do recall that we discussed technical items with the Hyder designs. 18. I prepared a series of documents, and on 16 December 2008, I sent them to Nankervis attached to a series of emails as follows: (a) at 12.03 pm, "Brentwood Fossil Site-Amended Slope Analysis"; (b) at 1.03PM, "Brentwood Fossil Site-Earthworks Quantity Differences"; and (c) at 4.35 pm, "Brentwood Fossil Site-Design Amendment Proposal". A copy of each email and attachment is annexed and marked DJW-6. 19. I also sent a letter headed, "Review of Road and Earthwork Design", and sent it to "The Manager, Investa Property Developments", marked for the attention of Nankervis. A copy of this letter dated 16 December 2008 is annexed and marked DJW-7. 20. Shortly after the correspondence I refer to at paragraph 19 above, I had a conversation with Nankervis in words to the following effect: Nankervis: I've seen that analysis and the drawings you sent. I want you to go ahead with the work. It is really urgent, you'll have to start on it straight away. You need to contact the Council and see the amendments through. I said: Okay, good. Development Application 21. I then proceeded to prepare documentation for submission and to work with Ipswich City Council to obtain approval for amendment of the existing operational works permit. I dealt with Sean Dickson of Ipswich Council. 237 In relation to his interactions with the Ipswich City Council concerning Lot 170, Mr Walker further deposed: 49. On 19 February 2009 at 5.48 pm, I received an email from Nankervis by which he forwarded to me an email from the Ipswich City Council concerning the Council's amended approval dated 19 February 2009. A copy of the email chain of 19 February 2009 together with the attachment is annexed and marked DJW-31. 50. On 19 February 2009 at 6.10 pm, I received an email from Nankervis that had been sent to Edwards, titled "6449/07 Fossil Site Operational Works". A copy of this email (excluding the attachment) is annexed and marked DJW-32. 51. On 20 February 2009 at 10.40 am, I sent an email to Edwards, cc'd to Nankervis, attaching the amended Fossil Site layout for updating the proposed subdivision plan. A copy of this email (excluding the attachment) is annexed and marked DJW-33. 52. On 20 February 2009 at 4.16 pm, I sent an email to David Henderson of EDAW AECOM, cc'd to Nankervis, attaching the letter from Ipswich Council seeking minor alterations. I asked Henderson to ''please update the referenced EDAW drawings to reflect the updated concept presented to Council at our last meeting with them." A copy of the email (excluding the attachment) is annexed and marked DJW-34. 238 On 16 December 2008, Mr Nankervis forwarded Mr Walker's summary of the estimate of costs associated with the changes Projex North recommended to the design to Mr Tonuri and Mr Barclay. That summary read: Earthworks Cut to Fill 20,160m3 less, therefore reduction by $143,135 Cut to Spoil 25,000m3 more, therefore increase by $189,000 Adjustment to earthworks cost = increase by $45,864 Boulder Retaining Walls Type B Sand Stone Walls 500m' more, therefore increase by $95,000 Total Adjustment to Construction Cost= $140,864 239 Mr Nankervis said that he had forwarded Mr Walker's email to Mr Tonuri and Mr Barclay, and that the purpose of the letter was to provide Mr Tonuri "some level of comfort" (transcript 29 September 2014 p 1978 ll 23-24). When cross-examined by Mr Murr as to why Mr Nankervis had also not forwarded this information to a third party, Mr Lance Washington, who had also evinced an interest in purchasing Lot 170, Mr Nankervis' explained that: Mr Barclay was the conduit between Investa and Mr Washington in respect of communications with Mr Washington; and Mr Nankervis did not believe that Mr Washington was more than superficially interested in Lot 170. In particular, Mr Nankervis said at the hearing as follows: Okay. Do you remember forwarding it to Mr Washington?---No. He was concerned about the slope, wasn't he?---I've got no idea. Where's that one? I see. You don't know. You've got no idea, do you say?---I've got no idea where the correspondence or what I forwarded. I've never had a - I didn't have a discussion, as such, with Lance Washington about slope. And you weren't aware that he was concerned about slope?---Amongst other things, he may have been, I don't know. You don't know?---No. If you had known of it, do you think it would have been appropriate to tell him that this opinion was available from Daryl Walker?---I don't even know whether Lance Washington was chasing the site. I don't know where he got to. I don't know. Sorry, you don't know that he was chasing the site?---I don't know where he was at in a process. (transcript 29 September 2014 p 1978 ll 26-44.) 240 Mr Nankervis submitted that Investa was aware of the amended Operational Road Works Approval application relating to the redesign of the site at Lot 170 by Projex North, because Mr Nankervis discussed it in detail with both Queensland General Managers, Mr Stubbs and Mr Waters. In particular, Mr Nankervis relied on: the minutes of the Investa Project Control Group of 23 October 2008 which Mr Stubbs attended, and which state that the Operational Works Approval was still outstanding; and Mr Waters' statement at paragraph 12, where Mr Waters deposed that he perceived there would be difficulties in achieving a sale in any circumstance given the site constraints, and instructed Mr Nankervis to make plan amendments wherever possible to improve the site to increase the saleability of the site. 241 He also insisted throughout the hearing that the managers at Investa were aware of this information. So, for example, I note the following evidence given by Mr Nankervis during cross-examination by Mr Murr for the applicants: MR MURR: Mr Stubbs wasn't aware of that was he, Mr Nankervis? --- Mr Murr, I showed you the PCG in October, I've got the approvals here, and you will see the plan amendments that have been worked on to get that November approval. Mr Stubbs was aware, and Mr Waters was aware, all the general managers were aware. Mr Stubbs was not aware of the work that you had instructed Walker to do, was he? --- He was aware. (transcript 30 September 2014 p 2021 ll 17-23.) 242 At the hearing in respect of his interaction with Mr Walker and Projex North, Mr Nankervis gave, inter alia, the following evidence: He had contacted Mr Walker earlier than December 2008 to ask Mr Walker to ascertain what could be done about levelling Lot 170 (transcript 29 September 2014 pp 1973-1974). In relation to whether Mr Nankervis' first contact with Mr Walker concerning the redesign of Lot 170 was on 10 December 2008, Mr Nankervis said "I'm just saying I don't know whether that was the first impasse [sic] with Daryl Walker. What I'm saying is discussions around improving the site started at a PSG level in October. I can't be more clear than that." (transcript 29 September 2014 p 1975 ll 26-29). He agreed with the evidence given by Mr Walker that the reason he contacted Mr Walker was because Hyder Consulting could not service Investa at that time, and also because Mr Walker was working for Investa on other land development projects (transcript 29 September 2014 p 1975 ll 33-38). Mr Nankervis agreed that he had had a conversation with Mr Walker in the terms set out in paragraph 14 of Mr Walker's affidavit, but disagreed that it had occurred around December 2008 as stated by Mr Walker (transcript 30 September 2014 p 2010 ll 9-26).

Mr Nankervis' explanations 248 Second, I do not accept Mr Nankervis' explanation that, prior to the sale of Lot 170 to Two Eight Two Nine, he had provided voluntary unpaid assistance to Mr Tonuri, primarily out of hours and on weekends, in Investa's interests, and had rejected Mr Tonuri's overtures to enter a business relationship with him (for example, transcript 30 September 2014 pp 2069-2071). Although Mr Tonuri gave similar evidence (transcript 21 August 2014 p 1714 l 43), for the reasons I have just given in respect of Mr Tonuri's credibility, and for other reasons I am about to give, I also reject Mr Tonuri's evidence to that effect. 249 In short, the evidence simply does not support this scenario. I find it implausible that Mr Tonuri would arrange the incorporation of a company, the name of which was an anagram of the initials of Messrs Tonuri, Barclay and Nankervis, without consulting Mr Nankervis and Mr Barclay and merely in anticipation of the prospect of one day doing business with them. Mr Nankervis' statement that Mr Tonuri had done so is, in my view, not credible. The more likely explanation is that all three men had agreed that Bandat would be incorporated to purchase Lot 170, however for various reasons decided that it would not and that Two Eight Two Nine would instead complete that purchase. 250 I find it remarkable, notwithstanding Mr Tonuri's emails to third parties - copied to Mr Nankervis - in which Mr Tonuri indicated that there was an business arrangement existing between himself and Messrs Barclay and Mr Nankervis, that Mr Nankervis would not have, in writing, indicated to Mr Tonuri that such representations were false (if that truly were the case). There is no evidence to suggest that Mr Nankervis sought to dissuade Mr Tonuri from making such representations or having such expectations. Mr Tonuri's emails from early 2009 through to mid-2010 indicated an arrangement between himself, Mr Barclay and Mr Nankervis of long-standing in relation to Lot 170. 251 I note that there were very few emails at all from Mr Nankervis to Mr Tonuri in respect of Lot 170 or in response to Mr Tonuri's correspondence. However I have formed the view that this absence of correspondence from Mr Nankervis could well have been attributable to his caution in evidencing in writing a secret arrangement with Mr Tonuri and Mr Barclay. Indeed such evidence as is before the Court indicates that Mr Nankervis had oral interchanges with Mr Tonuri, including weekend meetings, prior to or contemporaneously with, the sale of Lot 170 to Investa. 252 I do not accept Mr Nankervis' somewhat glib explanation that the reference to "we" in relevant emails, being himself, Mr Barclay and Mr Tonuri, was referable to them as a "development management group/team" rather than a "profit-splitting group". I consider it much more likely that the true explanation of events was that represented in the email correspondence from Mr Tonuri - namely that at some earlier time Mr Tonuri, Mr Barclay and Mr Nankervis agreed to pursue the venture of developing Lot 170 themselves.

CB Richard Ellis report, Design Amendment Proposal and amended Operational Road Works approval application 253 In relation to information concerning the CB Richard Ellis report, the design amendment proposal of Projex North and the amended Operational Road Works Approval application, it cannot seriously be doubted that this information was relevant to any decision of the applicants to sell Lot 170 at an appropriate price, or indeed a decision whether to sell the lot as an en globo parcel at all. 254 Mr Nankervis submits that Mr Waters received a copy of the CB Richard Ellis report from Mr Barclay. However I also note that Mr Waters ceased to have any involvement in relation to the sale of Lot 170 in January 2009 when the contract of sale of Lot 170 to Brittains Road Pty Ltd did not proceed and that Mr Gavin Stubbs assumed responsibility in Investa at that time for the sale of Lot 170. The tenor of the evidence of Mr Stubbs was that: he did not work with Mr Nankervis on a daily basis, but that he had "catch-up" team meetings with executives including Mr Nankervis to discuss recent developments and to keep him informed about the state of each project; that such meetings were not regular but were frequent; and that the meetings could occur by telephone or face to face (affidavit of Gavin Keith Stubbs affirmed 4 December 2013 para 11); and he relied primarily on Mr Nankervis to keep him up to date and informed about developments in respect of, inter alia, Lot 170 (affidavit of Gavin Keith Stubbs affirmed 4 December 2013 para 12). 255 The fact that CB Richard Ellis, a reputable valuer, had provided a valuation of Lot 170 at $4 million was potentially a relevant consideration for Investa to take into account in determining whether to sell the land for more than $1.8 million (as determined by the Project Control Group in its meeting of August 2008), or for the amount of $1,454,545 to Two Eight Two Nine. Considering the evidence carefully however, on balance I am not persuaded, in the circumstances of the case, that Mr Nankervis breached his duty to the first applicant in failing to put that report to a Project Control Group meeting. 256 Although the applicants submit that the evidence of Mr Waters of his receipt of the CB Richard Ellis report was vague and unreliable, I accept that Mr Waters did receive it by email from Mr Barclay on or about 19 November 2008. Mr Waters was a senior executive of Investa, responsible in Investa for management of Lot 170. He had had a lead role in the sale of Lot 170 to Brittains Road Pty Ltd for $1,613,636 excluding GST. The CB Richard Ellis report had been prepared for the ANZ Banking Group Ltd based upon instructions, inputs and assumptions provided by Brittains Road Pty Ltd, rather than Investa, for the purpose of obtaining finance. At the time of receipt of the CB Richard Ellis report, the contract between Investa and Brittains Road Pty Ltd in relation to the sale of Lot 170 was still on foot, and the valuation of $4 million would, from Investa's perspective, have been no more than interesting because it was already bound to a contract of sale in the amount of approximately $1.6 million. It is also apparent from Mr Waters' evidence, including the fact that his recollection of the report was indifferent, that Mr Waters did not place a high degree of credence in the reliability of the CB Richard Ellis report. Mr Nankervis' evidence was unequivocally to the effect that a valuation of this nature was of little use to Investa (for example transcript 30 September 2014 p 2113 ll 1-2). In my view, the facts support a finding that the CB Richard Ellis report was disregarded on receipt by Mr Waters and Mr Nankervis, because they considered it unreliable for Investa's purposes. I accept that, to that extent, there was no reason for Mr Nankervis to inform a Project Control Group meeting, or Mr Stubbs, of the existence of the CB Richard Ellis report. 257 However, I take a different view in relation to the design amendment proposal of Projex North, and the preparation of the amended Operational Road Works Approval application by Projex North in relation to Lot 170. 258 I am not persuaded that Mr Nankervis made Mr Stubbs - or any other decision-maker in Investa, including the Project Control Group - aware of the design amendment proposal of Projex North. Mr Stubbs gave unequivocal evidence that Mr Nankervis never informed him of the proposed redesign of Lot 170. I note in particular Mr Stubbs' evidence in his affidavit of as follows: 53. The Fossil Site was a difficult site to market or sell, because it was steep. This made it more difficult for standard economic slab construction. It was more suitable for specialty housing designs that accommodated its slope. A redesign that made the lots less steep would be an important factor, because it would make the site more attractive, and therefore easier to sell. 54. For the reasons I explain in paragraph 53 above, a redesign was important to the business of Investa and Nankervis should have told me about it at some point during December 2008 or January 2009, either by telephone, by email or face to face. For the same reasons, I would have remembered if I had been told about the redesign by Projex North. 55. As far as I can recall, Nankervis did not inform me that he had commissioned Projex North to undertake a review of the site design. I was not aware at the time that Projex North had been asked to review the site designs or to redesign the site. 259 I note that this evidence of Mr Stubbs was consistent with his evidence at the hearing. I considered his evidence credible, and accept that, in light of the problems that Investa had experienced with Lot 170 both in relation to its development and its sale, that Mr Stubbs would certainly have remembered if Mr Nankervis had told him of a prospect of Lot 170 being levelled so as to make it either more marketable or capable of easier development. 260 At the hearing, documents were tendered by Mr Collins for Oliver Hume SEQ, being tax invoices sent by Projex North to Investa, attention to "Mr John Collins", which invoices were apparently paid by Investa. These invoices comprised annexure DJW-52 to the affidavit of Mr Walker, and were dated 19 December 2008, 4 February 2009, 4 March 2009 and 27 March 2009, and referred to such matters as meetings with Mr Nankervis, receiving and reviewing data, detailed design and documentation, receipt and review of geotechnical report, and structural detailing. Mr Stubbs conceded under cross-examination by Mr Collins that these documents indicated that "someone from Investa", if not Mr Stubbs, was aware of this work being undertaken by Projex North. 261 In my view, however, this material suggests nothing more than that Investa accounts staff paid for work completed by a known contractor who had sent tax invoices to Investa for that work. I do not accept that these tax invoices were necessarily brought to the attention of senior executives of Investa prior to payment and for their approval. In my view, these invoices are of little moment except in one respect - the fact that the first tax invoice was dated 19 December 2008 supports Mr Walker's version of events concerning his interaction with Mr Nankervis, and that he was approached sometime in early December by Mr Nankervis, rather than October, as claimed by Mr Nankervis. 262 Indeed, I consider Mr Walker a credible witness, whose recollection of events concerning his interaction with Mr Nankervis and the prospect of redesigning Lot 170 was good. To this extent, I also prefer Mr Walker's evidence that he was approached by Mr Nankervis in December 2008 in relation to the redesign of the Lot 170 site, to the evidence of Mr Nankervis that he had had discussions with Mr Walker as early as October 2008. Indeed, while I appreciate the difficulties Mr Nankervis faced as a litigant in person, and note the tensions between the litigants in this case which, regrettably, occasionally spilled into exchanges in the Court environment, I consider that Mr Nankervis was overall an unco-operative witness. Some examples of where this was the case can be seen at transcript 29 September 2014 pp 1904, 1933-1935 and 1938-1939, 30 September 2014 p 2007. 263 I do not accept Mr Nankervis' version of events in relation to information concerning the design amendment proposal of Projex North and the amended Operational Road Works Approval application. In my view there are gaping inconsistencies and inadequacies in his evidence in this respect. I note in particular the following: In my view, the minutes of the Investa Project Control Group of 23 October 2008 which Mr Stubbs attended, and which note that the Operational Works Approval was still outstanding in respect of Lot 170, in no way relate to the amended Operational Works Approval application prepared by Projex North. Logically, and obviously, the reference in the minutes of the meeting was to the Operational Works Approval in relation to Lot 170, which appeared to have been lodged with the Ipswich City Council and which, when it was approved by the Ipswich City Council, was the subject of an email from Mr Nankervis to Mr Barclay, Mr Waters and Mr Thompson informing them of that approval. The approval was received and the email sent on 4 November 2008. In this respect it was clear that it was both proper that the Project Control Group be informed of such developments as this Operational Works Approval application, and that it had been so informed. It is equally clear that no evidence could be produced which demonstrated that the Project Control Group was ever informed of the amended Operational Works Approval application prepared by Projex North in relation to the levelling of Lot 170, or indeed the work undertaken by Projex North which had the prospect of levelling the site. Mr Nankervis referred to, and relied on, paragraph 11 of the statement of Mr Waters dated 30 April 2014, in which Mr Waters said: As a management group we perceived significant difficulties in achieving a sale in any circumstance given the site constraints and instructed Ashley Nankervis to make plan amendments wherever possible to improve the site to increase the saleability of the site. In my view, this evidence was vague and open-ended. While I do accept that Investa was concerned to sell Lot 170 and at the best available price, in the absence of supportive evidence, I do not accept that it gave Mr Nankervis carte blanche in relation to Lot 170. It would certainly not have permitted Mr Nankervis to "make plan amendments" which had a significant effect on the marketability of Lot 170 without informing more senior executives at Investa. Notwithstanding Mr Nankervis' extensive interactions with Mr Walker and Projex North, no satisfactory explanation has been provided by Mr Nankervis as to why, in his recommendation of 6 February 2009 concerning Lot 170, he said: The site is irregular in shape and heavily vegetated with steep topography, rising from the south east to the north west, and is unattractive to our target market as only specialty custom built housing can be built on the site. The housing product needs to accommodate steep slope of 10 to 15 degrees, no slab on ground product will be achieved, and this is compounded by the tree retention that council require, and also approval limitations in association with the degree of earthworks allowed on the site. and in particular There is no ability to level the site. These comments, in particular the comment that "there is no ability to level the site", clearly misrepresented the development potential - and hence value - of Lot 170 to senior executives of Investa. Mr Nankervis knew that these comments unfavourably misrepresented the development potential of the site - indeed he appeared to be the only person in Investa who knew of this, not only because of his role in relation to the sale of Lot 170 in Investa, but because of his direct dealings with Mr Walker. 264 A logical, and in my view irresistible, conclusion to draw from these facts is that Mr Nankervis deliberately kept relevant information concerning the Projex North proposal and the amended proposal to the Ipswich City Council from senior management in Investa, because he wanted Investa to complete the deal with Two Eight Two Nine in respect of Lot 170, at the price Mr Nankervis recommended. 265 This conduct was, in my view, particularly concerning. Mr Nankervis knew that his employer relied on the honesty of his recommendations in relation to Lot 170. He knew that, at the time, the applicants were trying to increase cashflow by divesting themselves of assets. 266 Considerable evidence was given during the course of the trial of the strategy of Investa towards the end of 2008 to dispose of assets and raise as much cash as possible. Ms Prout, for example, gave the following undisputed evidence: 30. On 2 December 2008, I attended an Investa finance conference held at the Justice & Police Museum in Circular Quay, Sydney. This was for the finance-related employees across the company. Development Managers and sales/marketing were not included in this conference. At that meeting, Graham Monk, Michael Royle and Ming Long spoke about reporting requirements, debt issues, cash flow and 2009 financial objectives. I recall that someone said words to the effect of: We are having cash flow problems. What we need is to sell properties. "They ended with a funny line: "Cash is King! Cash is bigger than King!" This phrase was then repeated in conversations around the business afterwards. The focus of the comments during the sessions related to the importance of cash flow in terms of bringing it in and forecasting it accurately. (cf evidence of Gavin Stubbs at transcript 10 June 2014 p 559, Damian Long at transcript 12 June 2014 p 770.) 267 I consider it likely that Investa did have this strategy. However such a strategy does not in any manner allow conduct of employees in the position of Mr Nankervis in breach of their duties, including fiduciary duties.

Conclusion 269 Proof of loss or damage to a beneficiary is not an essential ingredient in liability for misuse of a fiduciary position: Cook v Deeks [1916] 1 AC 554; Furs Ltd v Tomkies at 592-593; Regal (Hastings) Ltd v Gulliver; Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) (2012) 301 ALR 1 at [937]; Attorney-General v Blake [2001] 1 AC 268 at 280; Dalecoast Pty Ltd v Guardian International Pty Ltd [2003] WASCA 142 at [102]; Finn paragraphs 570, 572. The liability of defaulting fiduciaries arises from the requirements of equity that fiduciaries must not place themselves in positions where their duties conflict with their own interests and must not obtain unauthorised profits from their position (cf comments in Chirnside v Fay [2007] 1 NZLR 433 at [10]-[11]). 270 The evidence before the Court supports a finding that, at the time Investa approved the sale of Lot 170 to Two Eight Two Nine, there was no other seriously interested prospective purchaser. I am not prepared to find, however, that as a result Investa would have been prepared to sell the property to Two Eight Two Nine even had Mr Nankervis disclosed his business interests with Two Eight Two Nine. Such a conclusion contrary to principles of law articulated in such cases as Brickenden v London Loan & Saving [1934] 3 DLR 465, where Lord Thankerton said at 469: When a party, holding a fiduciary relationship, commits a breach of his duty by non-disclosure of material facts, which his [principal] is entitled to know in connection with the transaction, he cannot be heard to maintain that disclosure would not have altered the decision to proceed with the transaction, because the [principal's] action would be solely determined by some other factor, such as the valuation by another party of the property proposed to be mortgaged. Once the court has determined that the non-disclosed facts were material, speculation as to what course the [principal], on disclosure, would have taken is not relevant. 271 While there has been some relaxation of the strictness of the Brickenden principle, as explained in cases listed by Professor Dal Pont at [34.25]-[34.45], I am not satisfied that any speculation as to likely steps taken by Investa in relation to Lot 170 had Investa known of Mr Nankervis' breach of fiduciary duty would assist Mr Nankervis. Indeed it is not merely the secret arrangement between Mr Nankervis, Mr Barclay and Mr Tonuri in relation to Lot 170 which constitutes breach of duty by Mr Nankervis, it was his concomitant failure to disclose key information relating to the work of Projex North and its likely impact on future development of Lot 170. In relation to this, for example, I note evidence of Mr Jenkins in his affidavit of 13 December 2013, where he deposes that had he known of the redesign of Lot 170, he would not have approved the sale to Lot 170 because the redesign work would have made it easier to build on, and therefore easier to sell and at a higher price. Mr Jenkins continues in his affidavit: 59. … If I had known about the redesign of the Fossil Site by Projex North, I would have instructed Stubbs and Nankervis to review the financial analysis of any proposed sale of the Fossil Site, to revise the Delegated Approval Submission and to negotiate a higher sale price. I would have informed Macdonald of my actions. 60. I would probably have instructed Stubbs and Nankervis to review the proposal that the site be disposed under a wholesale sell off and the relevant price. The redesign of the fossil Site by Projex North may have meant that the site would provide a greater return to Investa if it was sold lot by lot as a residential development (as the rest of the Brentwood site was sold) rather than the sale of the 7.24 hectare Lot 170. 272 In my view, this evidence is credible, and I accept it. I consider it unlikely that, had Investa been in possession of all information known to Mr Nankervis, it would have proceeded in the same manner that it did. 273 In summary, I am satisfied that at or before 20 January 2009, Mr Nankervis had entered into an arrangement with Mr Tonuri and Mr Barclay to develop Lot 170 and that the arrangement was one whereby profits were divided into thirds between them. In a memorandum of 2 February 2009, Mr Nankervis recommended that the offer of Two Eight Two Nine to purchase Lot 170 be accepted. Mr Stubbs and Mr Jenkins recommended that Lot 170 be sold in accordance with Mr Nankervis' submission. The sale was subsequently approved on 19 February 2009 for the sum of $1,454,545 (not including GST). At no time did Mr Nankervis disclose any of the arrangements involving himself, Mr Barclay and Mr Tonuri to the applicants. I have previously found that Mr Nankervis was in a fiduciary relationship with the first applicant in relation to the sale of Lot 170, and am satisfied that these facts support a finding that he breached those fiduciary obligations.

Did Mr Nankervis breach his statutory duties to either of the applicants in respect of Lot 191 or Lot 170? 274 In relation to Lot 191, the applicants pleaded in paragraphs 136(6) and 136(7) of the amended statement of claim that, in addition to breaching his fiduciary obligations to the applicants, Mr Nankervis breached s 182 and s 183 of the Corporations Act, in that he improperly used his position as an employee of the first applicant to gain an advantage for himself or for Mr Barclay or for companies controlled by Mr Barclay's wife when: in the course of his duties, he obtained information as to the potential subdivision of Lot 191 and as to steps Mr Barclay was taking to subdivide Lot 191; and he failed to disclose that information to the applicants, and allowed the sale of Lot 191 to proceed at an undervalue. 275 In relation to Lot 170 the applicants pleaded, materially as follows: 165. On or about 5 November 2008, CB Richard Ellis prepared a valuation report for ANZ Banking Group Ltd, in respect of the Fossil Site. 166. On 16 December 2008, Nankervis received a copy of the valuation report from Barclay. 167. The valuation report valued the Fossil Site at $4,000,000 exclusive of GST. 168. The valuation report described the Fossil Site as follows: Moderately sloping site subject to a Difficult Topography Overlay with approximately 14% of the site sloping between 20% and 25% along the eastern boundary. Requirement for substantial retaining wall works. Majority of lots on the eastern side of the state will require benching and a split level house design. 169. On or about 16 December 2008, Nankervis met with Daryl Walker, director of Projex North Pty Ltd, to discuss the redesign of the Fossil Site. 170. On or about 16 December 2008, Nankervis received an email from Walker setting out initial engineering advice in relation to the redesign of the Fossil Site. 171. On or about 16 December 2008, Nankervis emailed the engineering advice to Barclay and David Tonuri. Particulars Email from Nankervis to Barclay dated 16 December 2008, subject "FW: Brentwood Fossil Site - Earthworks Quantity Differences". 172. On or about 16 December 2008, Nankervis received a letter from Walker containing a design amendment proposal, with the subject "Brentwood Fossil Site, Review of Road and Earthwork Design", that relevantly provided: Assessment of the existing design with Mr Ashley Nankervis revealed that a design which provided significantly flatter allotments could be achieved by adjusting the levels of Road 2 and Road 3. 173. On or about 16 December 2008, Nankervis emailed the design amendment proposal alleged in paragraph 172 above to Barclay and Tonuri. Particulars Email from Nankervis to Barclay and Tonuri dated 16 December 2008, subject "FW: Brentwood Fossil Site - Design Amendment Proposal". 174. From about December 2008, Nankervis was involved in submitting an amended Operational Roads Works Approval to Council which sought levelling and retaining of the Fossil Site to create flat lots. Particulars (i) Letter from Ipswich City Council to Nankervis dated 19 February 2009, subject "Re Request for a Minor Alteration Lot 170 Brittains Road, Bellbird Park, Council File No 5371/2004/RAL (ii) Letter from Ipswich City Council to Conics (Brisbane) Pty Ltd dated 27 February 2009, subject "Re Request for a Minor Alteration Lot 170 Brittains Road, Bellbird Park, Council File No 5371/2004/RAL (iii) Email from Sonny Gorman to Nankervis dated 3 March 2009, subject "Brentwood Fossil Site PDF DWGs" 174A. At a time unknown to Investa Properties and Investa Residential Group but before 20 January 2009, Nankervis and Barclay entered into an agreement with tonuri, pursuant to which Nankervis and Barclay would participate in and derive profits from the sale to Tonuri or his nominee and subsequent development of the Fossil Site. … 182. On 6 March 2009, Walker emailed Nankervis and Barclay: (a) an Engineering Report for the Fossil Site dated 12 January 2009 prepared by Morrison Geotechnic Pty Ltd; and (b) slope analysis plans prepared by Hyder Consulting Pty Ltd. Particulars (i) Email from Walker to Nankervis and Barclay dated 6 March 2009, subject "Fossil Site - Engineering Report and Attachments" (ii) Email from Walker to Nankervis and Barclay dated 6 March 2009, subject "Fossil Site - Original and Amended Slope Analysis Plans". 276 More specifically, the applicants plead at paragraph 194 of the amended statement of claim: 194. As a result of: (aa) Entering into the agreement with Barclay and Tonuri, alleged in paragraph 174A above; (a) Making the incorrect statements about the Fossil Site, as alleged in paragraph 178 above; (b) Recommending a sale price of $1,454,545 without taking into account and without disclosing to Investa Properties or Invcsta Residential Group the facts alleges in paragraph 177 above and the incorrect statements alleged in paragraph 178 above; (c) Providing services to Tonuri and to Two Eight Two Nine Pty. Ltd. or to both of them, as alleged in paragraph 186 above; and (d) The relocation and decommissioning of the sales office, as alleged in paragraphs 190 and 192 above, Nankervis breached: (i) His fiduciary obligations to Investa Properties and Investa Residential Group; (ii) Section 182 of the Corporations Act, and (iii) Section 183 of the Corporations Act. … Particulars of Breaches of Statutory Obligations (7) Nankervis is in breach of section 182 of the Corporations Act because he: (a) was an employee of Investa Properties; (b) improperly used his position as an employee to gain an advantage for himself or for Barclay in that in the course of his duties he obtained information namely: (i) as to the value of the Fossil Site at Lot 170 Brentwood as alleged in paragraph 166; (ii) as to the initial engineering advice in relation to the redesign of the Fossil Site as alleged in paragraph 170; (iii) as to a design amendment of road and earthwork designs as alleged in paragraph 172; (iv) as to the amended Operational Road Works Approval Application as alleged in paragraph 174; (c) improperly used that information to gain an advantage for himself or for Barclay by entering into an agreement with Tonuri and with Barclay to participate in and derive profits from the sale to Tonuri or his nominee and the subsequent development of the Fossil Site as alleged in paragraph 1741; and (d) improperly used his position to decommission and relocate the sales office, as alleged in paragraphs 190-92 above. (8) Nankervis is in breach of section 183 of the Corporations Act because he: (a) was an employee of Invcsta Properties; (b) obtained information as an employee namely: (i) as to the Value of the Fossil Site at Lot 170 Brentwood as alleged in paragraph 166; (ii) as to the initial engineering advice in relation to the redesign of the Fossil Site as alleged in paragraph 170; (iii) as to a Design Amendment of road and earthwork designs as alleged in paragraph 172; (iv) as to the Amended Operational Road Works Approval Application as alleged in paragraph 17 4; (c) improperly used that information to gain an advantage for himself or for Barclay by entering into an agreement with Tonuri and with Barclay to participate in and derive profits from the sale to Tonuri or his nominee and the subsequent development of the Fossil Site as alleged in paragraph 174A.

Section 182 277 The learned authors of Ford, Austin & Ramsay's Principles of Corporations Law (16th ed, LexisNexis Butterworths, 2015) at para 9.282.3, helpfully summarise the matters which must be proven to establish a contravention of s 182 of the Corporations Act as follows: 1. The relevant person was at the relevant time an officer or employee of the corporation; 2. The relevant person made improper use of his or her position; 3. The relevant person made that improper use of for the purpose of gaining an advantage or, alternatively, causing detriment to the corporation; 4. Such advantage was either for the officer or for someone else. 278 The High Court observed in R v Byrnes (1995) 183 CLR 503 at 514-515: It was unnecessary for the other judgments to expound the meaning of "improper use" but that case has rightly been taken to approve an objective test of impropriety. Impropriety does not depend on an alleged offender's consciousness of impropriety. Impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case. When impropriety is said to consist in an abuse of power, the state of mind of the alleged offender is important: the alleged offender's knowledge or means of knowledge of the circumstances in which the power is exercised and his purpose or intention in exercising the power are important factors in determining the question whether the power has been abused. But impropriety is not restricted to abuse of power. It may consist in the doing of an act which a director or officer knows or ought to know that he has no authority to do. (footnotes omitted.) 279 Clearly it is also unnecessary in the context of s 182 of the Corporations Act to establish a dishonest intent or consciousness by the employee of a breach of his or her duties. Further, the relevant conduct may be improper even if the person concerned believed it to be in the interests of the company (Byrnes at 514-515; Chew v The Queen (1992) 173 CLR 626 at 634; Robins v Incentive Dynamics Pty Ltd (in liq) (2003) 45 ACSR 244 at [54]-[55]; Australian Securities and Investments Commission v Australian Property Custodian Holdings Limited (Receivers and Managers appointed) (in liquidation) (Controllers appointed) (No 3) [2013] FCA 1342 at [623]-[627]; Registrar of Aboriginal and Torres Strait Islander Corporations v Ponto (2012) 208 FCR 346 at [60]-[64]). 280 It is difficult to see that Mr Nankervis made improper use of his position with Investa in relation to Lot 191 for the purposes of s 182. The evidence before the Court is that on 21 October 2009, a delegated authority approval submission for the development and sale of Stage 2A lots at the Brentwood Rise site was prepared by Mr Long, and supported by (inter alia) Mr Nankervis, recommending that lots (including Lot 191) be sold at an average lot price of $194,000. In particular, the recommendation was that Lot 191 be sold for $210,000, being the listed price of $225,000 less a rebate of $15,000. In my view this conduct of Mr Nankervis is unremarkable. Mr Nankervis knew that the purchaser of Lot 191 was a company associated with Mr Barclay's wife, and that Mr Barclay planned to subdivide it. This knowledge was, however, more potentially relevant to the application of s 183 of the Corporations Act (to which I will shortly turn) than s 182. 281 The case of the applicants is stronger in relation to Lot 170. 282 Mr Nankervis was the employee in whom the first applicant reposed trust and confidence as a senior executive with responsibility for the marketing and sale of Lot 170, and whose role included having an understanding of matters relevant to the value and marketability of lots including Lot 170 which he could communicate to decision-makers in Investa, to allow them to make an informed decision. In performing that role, Mr Nankervis positively recommended the sale of Lot 170 in the amount of $1,454,545 to Investa, without informing relevant decision-makers that he had an arrangement with the purchaser whom he was recommending, or more particularly that he had engaged Projex North to devise a design whereby Lot 170 could be more easily and economically developed (and which design was the subject of an amended application to the Ipswich City Council). Whether, particularly in light of the Projex North information, a higher price could actually have been achieved for Lot 170 at the time of Mr Nankervis' recommendation for the sale of Lot 170, is beside the point. In making incorrect statements to Investa in relation to Lot 170, in the recommendation which Mr Nankervis expected Investa to accept, Mr Nankervis acted with impropriety, to gain an advantage for both himself and/or a third party, Two Eight Two Nine. 283 To this extent I am satisfied that Mr Nankervis' conduct contravened s 182 of the Corporations Act. 284 However, in relation to the applicants' case as pleaded in paragraph 194(7) of the amended statement of claim, I am not satisfied that it can be said that Mr Nankervis improperly used his position within the meaning of s 182 in obtaining information concerning, in summary, the redesign of Lot 170 and the amended Operational Road Works Approval Application, or in entering into an agreement with Mr Barclay and Mr Tonuri. Mr Nankervis obtained the relevant information in the course of performing his duties. It was his non-disclosure of this information which was improper - however this is a matter which, again, is more likely to enliven s 183 of the Corporations Act than s 182. Similarly, the fact that Mr Nankervis entered into an agreement with Mr Barclay and Mr Tonuri cannot be said to be as a result of making an improper use of his position. The fact that, because of this knowledge and his secret agreement with Mr Barclay and Mr Tonuri, he acted in the manner in which he did (and in particular in making the recommendation to sell Lot 170) is a different question, however the applicants did not plead any breach of s 182 in this regard.

Section 183 285 Again helpfully, the learned authors of Ford, Austin & Ramsay's Principles of Corporations Law (16th ed, LexisNexis Butterworths, 2015) at para 9.280.3, summarise the matters which must be proven to establish a contravention of s 183 of the Corporations Act as follows: 1. At the relevant time the relevant person was an officer or employee of the corporation. 2. The relevant person acquired the relevant information. 3. The relevant person acquired that information by virtue of his position as officer or employee of the corporation. 4. The relevant person made improper use of the information. 5. The relevant person made the improper use for the purpose of gaining an advantage or alternatively causing detriment to the corporation. 6. Such advantage was either for the officer or someone else. 286 The type of information protected by s 183 need not be confidential (McNamara v Flavel (1988) 13 ACLR 619; Hydrocool Pty Limited v Hepburn (No 4) (2011) 279 ALR 646 at [355]; Huang v Wang [2015] NSWSC 510 at [41]). The test of impropriety for the purposes of s 183 is the same as that explained in Byrnes in relation to s 182. 287 In relation to Lot 191, I am not satisfied that the applicants have substantiated their case in respect of s 183. Mr Nankervis knew that the purchaser of Lot 191 was a company associated with Mr Barclay, and that there was a likelihood that Lot 191 would be subdivided. I accept that this was information which he should have disclosed to Investa, and consider it likely that he failed to do so in the interests of Mr Barclay. However I am not satisfied that Mr Nankervis "used" that information. He did nothing with it. In this respect, I consider that there is a distinction between the position in equity, and the position in s 182, which specifically requires that the person "must not improperly use the information". 288 I take a different view concerning Lot 170 and Mr Nankervis' conduct in failing to disclose the information concerning the redesign of Lot 170 by Projex North and the amended Operational Road Works Approval Application to his superiors in Investa. He had acquired that information in the course of his role at Investa - in fact, he had arranged for Projex North to provide the information. He had not disclosed the information to Investa, and indeed had provided misleading information to the contrary of that provided to him by Projex North. I am satisfied that the logical conclusion to draw in respect of his failure to disclose this information was that he had acted improperly - namely to benefit himself and Two Eight Two Nine, which had offered to purchase Lot 170. 289 In this respect, I am satisfied that Mr Nankervis' conduct contravened s 183 of the Corporations Act.

Mr Barclay 291 It is not in dispute that the acquisition of Lot 191 involved companies controlled by Mr Barclay's wife. This is so both in respect of the company which entered into the Deed of put and call (Queensland Property Centre) and the company which eventually acquired Lot 191 at the nomination of Queensland Property Centre (Spencer Projects). 292 The evidence supports a finding that Mr Barclay was exploring the possibility of subdividing Lot 191 prior to the approval of the sale of the property. Such evidence includes: An email dated 20 October 2009 from town planning consultant, Mr Marcus Brooks on behalf of his client, Mr Barclay, to land surveyor WD Surveys in respect of subdivision of Lot 191. A fee proposal from consulting engineers Bellas & Reitano, dated 23 October 2009, in respect of required engineering support for a proposed development application to subdivide lot 191, and additional engineering design and documentation. 293 It is appropriate to consider this evidence in circumstances where Oliver Hume SEQ was appointed real estate agent in respect of Lot 191 on 16 July 2009; a delegated authority approval submission in relation to Lot 191 was prepared on 21 October 2009 recommending that Lot 191 be sold for $210,000; and on 23 December 2009, Investa Residential entered a deed of put and call giving call rights to Queensland Property Centre with an exercise price of $195,000. 294 Mr Barclay was not only a senior executive with Oliver Hume SEQ at the time, he was also the sales consultant involved in marketing lots including Lot 191. A real estate agent, who is in a fiduciary relationship with the principal, must give full and frank disclosure in circumstances where he or she seeks to purchase the real property from the principal, being the person to whom the fiduciary obligation is owed. This obligation of disclosure by the real estate agent is equally the case where it is the spouse of the real estate agent who seeks to purchase the property: see comments of the Court of Appeal of Western Australia in Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191. 295 In this case it would not have been apparent to the casual observer that either Queensland Property Centre or Spencer Projects were connected with Mr Barclay. Mr Barclay's direct contact with Investa was Mr Nankervis. I am satisfied at material times that Mr Nankervis was aware of the relationship between Mr Barclay and Queensland Property Centre and Spencer Projects. However the disclosure of this information to Mr Nankervis did not constitute full disclosure required of a fiduciary assisting his spouse to purchase a property from a principal. Mr Nankervis was not the decision-maker who was empowered to sell Lot 191. Mr Nankervis was not "the principal" in the fiduciary relationship to which Mr Barclay was a party. 296 Further, notwithstanding that Mr Nankervis was an employee of the first applicant, no justification for imputing his knowledge of Mr Barclay's relationship with Queensland Property Centre and Spencer Projects to either of the applicants exists where Mr Barclay knew that Mr Nankervis would not disclose that information to the applicants: re Fitzroy Bessemer Steel etc Co Ltd (1884) 50 LT 144 at 147; Beach Petroleum NL v Johnson (1993) 43 FCR 1 at [616]; Dal Pont GE, Law of Agency (3rd ed, LexisNexis Butterworths, 2014) at [22.56]. In circumstances where it appears that Mr Nankervis had a separate business relationship with Mr Barclay in relation to Lot 170 at this time, I consider it proper to conclude that Mr Barclay knew that Mr Nankervis would not disclose Mr Barclay's relationship to either of the two companies involved in the acquisition of Lot 191. 297 Accordingly I find that Mr Barclay did breach his fiduciary obligation to the second applicant in relation to Lot 191, in failing to make full and frank disclosure to them concerning the acquisition of Lot 191 by corporate entities controlled by Mrs Barclay, and further that any knowledge or acquiescence by Mr Nankervis in relation to Mr Barclay's arrangements concerning Lot 191 did not relieve Mr Barclay from that breach of fiduciary duty.

Oliver Hume SEQ 298 So far as concerns Oliver Hume SEQ, as a general proposition the actions of Mr Barclay in respect of Lot 191 were those of Oliver Hume SEQ. However at paragraph 64(c) of its defence, Oliver Hume SEQ denies that conduct or knowledge of Mr Barclay was its conduct or knowledge. 299 In relation to this issue the applicants submit, in summary: Mr Barclay was an employee and agent of Oliver Hume SEQ, acting in the ordinary way as a real estate agent, and plainly acting within the scope of his actual or ostensible authority. Mr Barclay's knowledge of the transactions in which he was involved as agent was the knowledge of Oliver Hume SEQ. This includes his knowledge of the identity of the purchasing parties. The imputation of the knowledge of an agent to his or her principal is subject to the fraud exception: knowledge of an agent's own fraud committed against his or her principal will not be imputed to the principal. This principle extends beyond fraud to breach of fiduciary obligations. The scope of the fraud exception is not unlimited, and was recently considered by the Court in Grimaldi. Mr Barclay's activities were directed against Investa, not Oliver Hume SEQ, which suffered no loss from the transaction involving Lot 191. In fact, Oliver Hume SEQ benefitted by earning commission on the sale. It follows that the fraud exception does not apply, and Mr Barclay's knowledge of the purchaser of Lot 191 was the knowledge of Oliver Hume SEQ. 300 Oliver Hume SEQ submits in response: The co-venture between Messrs Barclay, Nankervis and Tonuri in respect of Lot 170 has no application in respect of Lot 191. There was no conspiracy in relation to Lot 191 concerning Mr Nankervis and Mr Barclay. Mr Nankervis derived no benefit from the sale of Lot 191. Mr Nankervis had the delegated authority from Investa to deal in respect of the sale of Lot 191 and gave evidence that he had authority to authorise sale prices (including in respect of Lot 191) to potential purchasers within a gross realisation (transcript 30 September 2014 p 2095 ll 20-30). It follows that when Mr Barclay was dealing with Mr Nankervis he was dealing with Investa. In order to establish liability against Oliver Hume SEQ or impute knowledge of Mr Barclay to Oliver Hume SEQ, the applicants need to establish that Mr Barclay was the controlling or directing mind of Oliver Hume SEQ. This allegation has never been pleaded as part of the applicants' case, as they have simply pursued a case predicated on apparent authority. The evidence is clear that Mr Barclay was not the controlling or directing mind of Oliver Hume SEQ at any time. The evidence demonstrates that although Mr Barclay had authority to execute PAMDA forms, he could not do so without approval by Mr Michael Duster, a director of both Oliver Hume SEQ and Oliver Hume (Australia) Pty Ltd. Similarly Mr Barclay could not enter into a retainer with a particular client without Mr Duster's approval or set company policy. Mr Grant Dearlove, a non-executive director and subsequent Chairman of Oliver Hume SEQ, gave evidence that Mr Barclay reported to the board and made decisions under the direction of the board. Entering into a contract for a particular commission rate, entering into a contract at all or, dealing with a particular developer, were all activities controlled by Mr Duster. The only autonomy Mr Barclay had was in respect of day-to-day operations of the Queensland office, akin to an office manager. There was no evidence that anyone else in Oliver Hume SEQ had independent knowledge of Mr Barclay's conduct in the proceeding. The Federal Court in Grimaldi set out relevant principles concerning the fraud exception to imputation of corporate knowledge. In this case, the conduct of Mr Barclay satisfies those principles, such that his knowledge should not be imputed to Oliver Hume SEQ. The only "benefit" received by Oliver Hume SEQ was in the nature of a minor commission.

Consideration 301 A threshold question in this respect is whether the facts of the case support a finding that Mr Barclay's knowledge concerning the sale of Lot 191 to a corporation controlled by his wife should be imputed to Oliver Hume SEQ. In Grimaldi, for example, it was common ground that, subject to the fraud exception, Mr Grimaldi's knowledge with respect to the matters in issue in the case was at all material times to be imputed to the principal. The question of imputation of knowledge was also a matter of dispute and careful consideration by Von Doussa J in Beach Petroleum where his Honour observed at [574]: … if a company is to be imputed with the conduct and knowledge of a director, director must be acting within the scope of his or her authority, that is, within the scope of his or her actual or apparent authority. The scope of the authority of a director may vary widely from company to company and according to the circumstances of the case … Provided that the director is acting within the scope of his or her authority, in civil proceedings the state of mind of a director ordinarily will be attributed to the company where there is a duty on that director to communicate his or her knowledge to the company. 302 Professor Dal Pont helpfully summarises principles relating to the limits on the operation of the presumption that the knowledge of the agent is the knowledge of the principal, in the following terms: 22.54 The presumption does not operate without exception. In fact, an Australian judge in the late nineteenth century noted that it was erroneous to state categorically that 'knowledge of the agent is the knowledge of the principal', in that were this a blanket rule 'it would work great hardship and injustice, for in all cases where the principle applies the person is admittedly ignorant in fact of that which the law presumes him to know. Limitations on the presumption had been judicially recognised earlier still, as is evident from the following statement of principle by Lord Westbury LC in 1863 [in Wylie v Pollen (1863) 3 De GJ & S 596 at 601, 46 ER 767 at 770]: To affect the principal with notice, [1] the agent's knowledge must have been derived in the particular transaction in hand or [2] be shewn to have been in that transaction present to his mind; and further, [3] it must have been knowledge of something material to the particular transaction; and [4] something which it was the agent's duty to communicate to his principal, the whole doctrine of constructive notice resting on the ground of the existence of such a duty on the part of the agent. 303 In K & S Corporation Ltd v Sportingbet Australia Pty Ltd (2003) 86 SASR 312 at [103] Besanko J said that, in the context of that case, the correct approach was that the knowledge of the relevant employees could be attributed to the employer only if they were relevantly the directing mind and will of the employer, or they were relevantly agents of the employer in relation to the information. 304 In my view the comments of his Honour in this respect reiterate the important distinction between the different types of authority which can be wielded in a corporation. As has been repeated time and again, a corporation, being an artificial construct, perforce acts through human agents. However for the knowledge of an agent to be imputed to the corporation, that agent must either be one who is in such a position in the corporation that his or her knowledge must be considered to be that of the corporation (that is, the "directing mind and will", as explained in such cases as Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170 and 171; Australian Securities and Investments Commission v Mariner Corporation Limited (2015) 106 ACSR 343 at [338] and Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd (2015) 318 ALR 302 at [106]-[107]), or is such that, while limited in general authority, the person has the actual or ostensible authority of the corporation in a limited respect (such as receiving certain information). In reality, the lines could be said to have significantly blurred between the two categories - for example an agent with ostensible authority in a very limited respect may be capable of description as the directing mind and will of the corporation in that very limited respect. 305 In this case, the applicants plead that Mr Barclay was, at all material time: a director and employee of Oliver Hume SEQ, and an agent of Oliver Hume SEQ with Oliver Hume SEQ's actual or ostensible authority to act for it in relation to providing real estate agent services to Investa Residential, and matters arising from or related to providing the real estate agent services to Investa Residential (amended statement of claim para 29(bb)); the individual in charge of Oliver Hume SEQ's business pursuant to PAMDA (amended statement of claim para 29(e)); the individual who dealt with, received instructions from, provided information, opinions, advice and reports to, and generally provided services to the directors, officers and employees of Investa Properties in relation to the marketing and sale of the Brentwood site (amended statement of claim para 29(f)). 306 As Oliver Hume SEQ correctly submit, the applicants do not claim that Mr Barclay was the "directing mind and will" of Oliver Hume SEQ, rather that he had its actual or ostensible authority to act for it in providing real estate agent services to the second applicant. In my view two key questions which immediately arise are:

whether Mr Barclay did, in fact, have the actual or ostensible authority to act for Oliver Hume SEQ in relation to the provision of real estate agent services to the second applicant; and
if he did, whether that meant that his knowledge that he had sold a property to a company associated with a close family member without disclosing that relationship to the vendor was such that it was imputed to Oliver Hume SEQ. 307 In my view, the answer to both questions is "yes". 308 The evidence before the Court adduced by Oliver Hume SEQ suggests that it was Mr Michael Duster who could properly be described, in a general sense, as the "directing mind and will" of Oliver Hume SEQ. In its submissions, Oliver Hume SEQ strongly press the uncontroverted evidence as to the limitations of Mr Barclay's authority, including his regular reporting to the Board; the fact that there were certain matters that required approval from the Melbourne office; the fact that he spoke to Melbourne office every day; and the fact that if Oliver Hume SEQ were preparing a project submission to a potential new vendor, Mr Barclay was required to have it vetted by the Melbourne office. This does not mean, however, that Mr Barclay had no actual or ostensible authority in relation to dealings on behalf of Oliver Hume SEQ, including its dealings with Investa. Indeed, irrespective of his actual authority, it appears that the only person to deal directly with Investa on behalf of Oliver Hume SEQ was Mr Barclay, as he was the general manager for the Queensland office of Oliver Hume SEQ and the most senior person in that office, and he could approve certain matters in the Brisbane office himself. I am satisfied that Mr Barclay had actual authority in relation to the provision of real estate agent services to the second applicant. Even were this not the case, I am satisfied that Oliver Hume SEQ held out Mr Barclay as having authority to act on its behalf such that he had ostensible authority in relation to the provision of real estate agent services to the second applicant (Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 503; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [36]; Australian Nursing and Midwifery Federation v Kaizen Hospitals (Essendon) Pty Ltd (2015) 228 FCR 225 at [95]). Indeed it is difficult to see how Mr Barclay could have functioned in his role in dealing with Investa had he not been clothed with authority from Oliver Hume SEQ to transact business on its behalf. 309 In relation to the second question, it is clear that Mr Barclay was not authorised to sell an Investa property to an entity controlled by his spouse. However it was part of his usual duties to market Investa properties, including Lot 191, to potential purchasers. Marketing, and arranging the sale, of Lot 191 was in my view a task within the scope of his authority. To that extent, I am satisfied that Mr Barclay's knowledge of the details of the sale of Lot 191 should properly be imputed to Oliver Hume SEQ. 310 The next question for consideration however is whether, notwithstanding the imputation of Mr Barclay's knowledge concerning the true identity of the purchaser of Lot 191, Oliver Hume SEQ is in a position to rely upon the "fraud" exception identified in such cases as re Hampshire Land Co Ltd [1896] 2 Ch 743. 311 More recently, principles relevant to whether Mr Barclay's knowledge of his breach of fiduciary duty could be imputed to Oliver Hume SEQ were described in Grimaldi in the following terms: [283] This "fraud exception", as it has been called, has been controversial in a number of common law countries … In re Parmalat Securities Litigation 659 F Supp 2d 504 (SDNY 2009) at 519 for the view taken in some number of US States jurisdictions: ... the principal suffers imputation as long as the agent in some respect served the principal or, stated another way, unless the agent totally abandoned the principal's interests. The rule of imputation absent total abandonment, moreover, is not simply a matter of mechanics or rhetoric. It embodies a determination that it would be undesirable to permit principals to avoid responsibility for an agent's actions or knowledge whenever an agent could be said to have acted even in part for the agent's own interest notwithstanding that the agent simultaneously served the interests of the principal. [284] The fraud exception to imputation has not only been accepted in first instance decisions in this country: Beach Petroleum NL v Johnson (1993) 43 FCR 1 esp at 22.14-22.35; it also has been extended beyond knowledge of fraud to that of breach of fiduciary duty "at least where the fiduciary's conduct is morally reprehensible": Aequitas v AEFC (2001) 19 ACLC 1,006 at 1,062; see also Farrow Finance Co Ltd (in liq) v Farrow Properties Pty Ltd (in liq) (1997) 26 ACSR 544 at 587. Nonetheless, the exception itself has been qualified in a fashion which resonates with that suggested in the Parmalat quotation above. As von Doussa J observed in Beach Petroleum (at 22.34), while a director's knowledge will not be imputed to a company where the director's activities are directed against the interests of the company, it will be otherwise if his or her conduct is not totally in fraud of the company if, "by design or result the fraud partly benefits the company": see also Canadian Dredge & Dock Co Ltd v The Queen (1985) 19 DLR (4th) 314 at 351 which von Doussa J considered provided "compelling guidance". 312 Mr Dearlove gave evidence that the conduct of Mr Barclay in selling a property to a company associated with a close family member without disclosing that relationship to the vendor was a "cardinal sin" in the real estate world. I accept that this is the case. However while it might be said that the potential reputational damage to Oliver Hume SEQ from Mr Barclay's actions in relation to Lot 191 considerably exceeded any minor benefit it might have recovered from that sale, the benefit to Oliver Hume SEQ from the transaction involving the sale of Lot 191 was real. A commission was paid to Oliver Hume SEQ in respect of that sale. To that extent, it cannot be said that Mr Barclay's conduct was in total fraud on Oliver Hume SEQ because by result, if not design, his fraud partly benefited Oliver Hume SEQ. 313 It follows that Oliver Hume SEQ has also breached its fiduciary duty to the second applicant in relation to the sale of Lot 191.

Lot 191 320 Mr McEvoy's valuation of Lot 191 was as at 23 December 2009. Early in his report he observes as follows: 1.2 performance summary Further consideration has been given to the key factors which are likely to impact on the performance of the subject project and are summarised as follows: Market Performance - December 2009 • The crisis in the global financial system, including the failure or rescue of major banks and financial institutions, had created a significant degree of uncertainty in commercial real estate markets across the world. In this environment, it was possible that prices and values could go through a period of heightened volatility whilst the market absorbs the various issues and reaches its conclusions. The lack of liquidity in the capital markets meant that it may have been very difficult to achieve a successful sale of many property assets. • In the current market there is a reducing pool of prospective purchasers, not only as a result of the inherent direct property risks but increasingly reflecting limited liquidity across global markets and the difficulty in sourcing equity and finance. There is concern that there are limited buyers in the market with sufficient resources and access to credit to complete a transaction. • Discussions with agents active in the residential market indicate that sales have slowed, however projects that are well located which offer a point of difference, have greater appeal than standard projects in less sought after locations. Asset performance May 2010 • The property is a single residential lot, which is located at the end of a long cul de sac with bushland opposite. • The lot was a slightly irregular shape, and rises slightly up from the road frontage to a level building platform. • A stone retaining wall is constructed along the rear boundary of the lot. • The property is located in a new developing residential estate and is surrounded by modern residential dwellings. 321 Mr McEvoy observed: The property is located in the developing residential suburb of Augustine Heights, approximately 25 radial kilometres west of the Brisbane City centre and approximately 15 radial kilometres south east of the Ipswich City centre. Immediately surrounding development comprises newly created residential land and established single residential dwellings. 322 The property has frontage to Lucy Court, Augustine Heights. Electricity, reticulated water, sewerage, and telephone services were connected to the property, and schools were in reasonably close proximity. There was very limited public transport available. 323 Mr McEvoy gave detailed attention to economic conditions in Queensland in December 2009. In summary, Mr McEvoy observed that at that time relevant trends were as follows: inflation rates were falling; consumer sentiment was falling; unemployment was rising; building approvals were falling; retail trade was falling; housing finance was rising; interest rates were falling; economic growth was falling; business confidence was falling. 324 Mr McEvoy also set out a residential market overview for December 2009, including the following observations: The global economy was in a major downturn. The Global Financial Stability Report and World Economic Outlook reports released in early October 2008 indicated that the world was facing its most dangerous economic shock since the 1930's. The major advanced economies of the US, Europe and Japan are already in or close to recession according to the International Monetary Fund. Whilst Australia is more resilient, it is not immune. Australia had been both fortunate and resilient to so far avoid the spectra of rapid house price falls, bank failures and sliding consumer spending that now trouble the American and European economies. However, this was expected to change over 2009. The rapid change in consumer and business confidence was a significant factor. With interest rates falling to their lowest level in 40 years sentiment had become a mix of optimism and fear. The optimism flowed from the positive impact on home affordability, with the fear coming from the constant data of falling property values and the rising rate of unemployment. Discussions with agents indicated the greatest fear is unemployment. For property investors, the apprehension is that rising unemployment may have begun to depress rents. One clear indicator was the market segmentation which showed a good market under $500,000. Data indicated that in the September quarter 62% of sales were in this price bracket. Preliminary data indicated that this could be as high as 70% in the December quarter. Included in that, were first home buyers who represented about 25% of the total market following the Government incentive packages. … The residential land market was similarly fragmented with land priced under $200,000 considered to be the strongest performing market. This price point fitted comfortably with the price bracket required for "house and land" packages. For more expensive land the market was different. Whilst there were buyers for land over $300,000, sales rates were slowing. The location needed to be an area of limited supply and provide the lifestyle infrastructure the market desires including proximity to the CBD. … In that environment the definition of Market Value "a willing but not anxious buyer and seller" was being tested. The reality was that all vendors were anxious or were being pressured to sell. Buyers were not particularly "willing" unless it was perceived to be a bargain. … There is little evidence that there would have been any improvement in the market over 2009, with the most likely scenario being of a more difficult market. 325 In section 5 of his report Mr McEvoy sets out the rationale for his valuation. He states: The most appropriate approach to the valuation of the property is by way of reconciliation of the Direct Comparison method and a Residual Cash Flow Analysis. In this instance, the Direct Comparison method does not take into consideration the potential of the property to be reconfigured into two lots. Varying costs associated with the reconfiguration of the property can be taken into consideration under the Residual Cash Flow Analysis which can not be reflected in a Direct Comparison approach. In order to undertake a Residual Cashflow Analysis, I have researched relevant costs for an application to Council for a Reconfiguration of a Lot, consultants fees, connection fees, and registration fees for a two lot reconfiguration. 326 From his market investigations, Mr McEvoy identified five sales of single residential lots between 1,020 square metres and 1,193 square metres in area, which he considered suitable for comparison with Lot 191. These sites were all located in Augustine Heights, within close proximity to Lot 191, and sold between August 2009 and December 2009. The sales range in price was from $237,000 to $298,000 and from $206 to $262 per square metre of site area. 327 After analysis of the sales evidence and consideration of specific traits of the subject property, Mr McEvoy assessed the value of Lot 191 at 23 December 2009 to be $290,000. However, he observed that the sales evidence did not take into consideration the potential of the subject property to be reconfigured into two lots. Accordingly, he reconciled his assessment of value by undertaking a residual cash flow analysis, which determines a price which could be paid for the land, given the expected gross realisation from the sale of completed lots. 328 Mr McEvoy researched sales of single residential lots in the range of 500 square metres to 550 square metres in order to assess the market value of the proposed lots under the reconfiguration of Lot 191. In doing so, he compared the relative merits of Lot 191 with the sales analysed, having regard to matters such as location, aspect, building platform, and size of the land. Mr McEvoy identified four lots, all at Augustine Heights, located within close proximity to Lot 191, and sold between July 2009 and November 2009. The sales ranged in price from $204,000 to $230,990 and from $383 to $444 per square metre of site area. After analysis of the sales evidence and consideration of specific traits of Lot 191, he assessed the value of the two potential lots following subdivision of Lot 191 at $220,000 (579 square metres) and $210,000 (500 square metres) respectively. 329 After taking into account additional costs including development costs, finance costs and GST, and the potential profits consequent upon the sale of the two reconfigured lots following subdivision, Mr McEvoy concluded that the market value of Lot 191 "as is" at 23 December 2009 was $290,000 inclusive of GST.

Lot 170 330 Mr McEvoy's report in respect of Lot 170 is lengthy and detailed. I note the following key points of his report: The site value with the benefit of development approval at 20 February 2009, the date that the site was contracted by Two Eight Two Nine under a Deed of put and call, was $3 million exclusive of GST. The site was considered to be undulating with some steep ridges as at the date of valuation. However, the contour of the site had been changed by the development since the date of valuation. The property comprises 7.25 hectares, which has been developed into 77 residential lots with a median lot size of 649 square metres. The date of Mr McEvoy's inspection was 28 February 2012. Total project costs of development were assessed as $8,551,854 exclusive of GST, and cost per lot as $111,063 exclusive of GST. 331 In the executive summary to the report, Mr McEvoy observed as follows: Land as a development site • The property's shape and topography as at the date of valuation made it a difficult site the proposed development. The site was heavily vegetated and of difficult contour. These issues were addressed in the Operational Works Approval. • Nearby and surrounding infrastructure was available for a development of the land. • The town planning designation(s) support development of the land in accordance with the approved proposal. • Development Approvals were in place as well as Operational Works Approval. • There were no encumbrances considered adverse to the continued utility of the property. • Land Performance Rating: Medium/High Environment • I am not aware of any environment issues affecting the property as at the date of valuation. • Completion of the residential estate indicates there are no environmental issues affecting the property. • Environmental Performance Rating: Low Market segment • Demand for development sites of this nature at the date of valuation was steady and was stable. • Demand for the proposed end product "as if complete" at the date of valuation was steady and was stable. • There was an adequate supply of development land of this nature and the supply was stable but indications are that it would increase in the future. • The supply of product similar to that proposed on the land was substantial due to the larger estates to the east, and a mix of larger and similar estates to the west. • The most likely buyer at the date of valuation was a small developer who would develop the land. • Given the market conditions as at the date of valuation, and a competent marketing campaign reflecting the nature of the property, I consider the property was saleable at valuation over a normal three to six month sales period. • Market Segment Performance Rating: Medium Development feasibility • The proposed development was appropriate for the location and neighbourhood Sensitivity Profit (after interest) Development margin (after interest) IRR (before interest) base case - no variation $2,458,206 20.98% 26.00% end sale values -5.00% $1,716,466 14.61% 20.54% end sale values 5% $3,196,578 27.35% 31.46% construction costs -10.00% $3,142,285 28.48% 32.24% construction costs 10.00% $1,769,863 14.27% 20.32% debt interest rates -2.00% $2,693,054 23.45% 26.00% debt interest rates 3.00% $2,094,523 17.34% 26.00%

• Development costs have been provided by Hyder Consulting who are qualified engineers. I note that the costs have been prepared retrospectively by Hyder and are dated 11 May 2012. The retrospective provides developments costs that appear higher than costs relied upon by others in 2008 and 2009. Higher costs affect the viability of a development and as a consequence, the value of a site. • There is a reasonable level of comparable evidence to support the adopted end sale prices because of the nature of the location between a superior market location and an inferior market location. • The adopted sales rate is based on my experience in this market catchment. • The assessed Gross Realisation of the lots "as if complete" has been assessed as market value excluding any inducements, or investment marketing commissions payable as part of the sale of the lots as house and land packages to the investment market. • Development Feasibility Risk Rating: Low/Medium Management risk • Although a small to medium scale project, competent management by someone experienced in development projects would be necessary. • Management Risk Rating: Low/Medium 332 Mr McEvoy gave detailed attention to economic conditions in Queensland in February 2009. In summary, Mr McEvoy observed that at that time relevant trends were as follows: inflation rates were falling; consumer sentiment was falling; unemployment was rising; building approvals were stable; retail trade was rising; housing finance was rising; interest rates were falling; economic growth was stable; business confidence was falling. 333 Mr McEvoy also set out a residential market overview for February 2009 in the following terms: The global economy was in a major downturn. The Global Financial Stability Report and World Economic Outlook reports released in early October 2008 indicated that the world was facing its most dangerous economic shock since the 1930's. The major advanced economies of the US, Europe and Japan are already in or close to recession according to the International Monetary Fund. Whilst Australia is more resilient, it was not immune. Australia had been both fortunate and resilient to avoid the spectra of rapid house price falls, bank failures and sliding consumer spending that now trouble the American and European economies. However, this was expected to change over 2009. The rapid change in consumer and business confidence was a significant factor. With interest rates falling to their lowest level in 40 years sentiment had become a mix of optimism and fear. The optimism flowed from the positive impact on home affordability, with the fear coming from the constant data of falling property values and the rising rate of unemployment. Discussions with agents indicated the greatest fear was unemployment. For property investors, the apprehension was that rising unemployment may have begun to depress rents. One clear indicator was the market segmentation which showed a good market under $500,000. Data indicated that in the September quarter of 2008, 62% of sales were in this price bracket. Preliminary data indicated that this could have been as high as 70% in the December quarter. Included in that, were first home buyers representing about 25% of the total market following the Government incentive packages. The middle market circa $600,000 to $1,500,000 was more subdued with a limited number of buyers. However, with the heavy discounting that had occurred to meet the market and very low interest rates, this market segment was likely to improve. The prestige market was suffering the most where discounts of between 15% and 25% were occurring. According to The Housing Industry Association (HIA), new home sales across Queensland declined 28% in the December quarter of 2008 from the previous year with the number of private house approvals softening further since June 2008. The residential land market was similarly fragmented with land priced under $200,000 considered to be the strongest performing market. This price point fits comfortably with the price bracket required for "house and land" packages. For more expensive land the market was different. Whilst there were buyers for land over $300,000, sales rates were slowing. For the englobo land market there was an increasingly wide gap emerging between the expectations of vendors and those of purchasers. Accordingly, due to the lack of transactions occurring, it was very difficult to determine the market value of sites. Further, agents indicated that in that current market, potential purchasers were increasingly seeking lengthy settlement terms in order to either secure finance or to remove a degree of risk attached to the transaction by entering into a 'subject to Development Approval' contract. Sites which have holding income were more sought after, with those which have Development Approval viewed as the next best. This scenario was also clearly linked to the difficulty in obtaining credit. Sites without approvals or requiring a long term hold were becoming very difficult to sell with very limited buyer interest. In this environment the definition of Market Value "a willing but not anxious buyer and seller" was being tested. The reality was that all vendors were anxious or are being pressured to sell. Buyers were not particularly "willing" unless it is perceived to be a bargain. Previously buyers for large development sites and medium term hold sites were publicly listed companies, but as they attempted to repair their balance sheets, they were in a selling mode and not buying unless it included long settlement terms. There was little evidence that there would be any significant improvement in the market over the balance of 2009. 334 In section 6 of his report, Mr McEvoy sets out in detail the rationale of his report. I note, in particular, the following points: Mr McEvoy undertook a residual Cash Flow Analysis by having regard to the market value of the proposed sub-divided lots "as if complete". He explained: The most appropriate approach to the valuation of proposed residential lots is by the Direct Comparison method, whereby sales of similar projects are directly compared to the subject to establish a present day market value. I have examined market activity as at the date of valuation and have had regard to the following sales evidence, which I consider set the parameters by which the value of the subject property may be determined. Mr McEvoy then set out details of transactions of thirty-seven properties in housing estates at Augustine Heights, Bellbird Park and Redbank Plains between September 2008 and February 2009. Mr McEvoy noted that the Augustine Heights and Brentwood estates were considered slightly superior to the estate subsequently developed on Lot 170, whereas Bellbird Park and Redbank Plains were slightly inferior to the Lot 170 estate. In Augustine Heights relevant lots ranged from a 641 square metre lot at 9 Brigid Boulevard sold in October 2008 for $180,000, to an 800 square metre lot at 3 Aurelius Street sold in February 2009 for $245,000. In Bellbird Park relevant lots ranged from a 636 square metre lot at 29 Berkeley Circuit sold in September 2008 for $187,000, to a 630 square metre lot at 26 Boscawan Crescent sold in October 2008 for $205,000. In Redbank Plains relevant lots ranged from a 693 square metre lot at 4 Benjamins Drive sold in October 2008 for $175,000, to a 616 square metre lot at 1 Wandera Court sold in February 2009 for $175,000. After examining those sales, the characteristics of the proposed development and prevailing market conditions as at 23 February 2009, Mr McEvoy determined individual values for the lots "as if complete" inclusive of GST and subject to satisfactory compliance with Council regulations and other requirements. He then set out an assessed value of the 77 lots for all stages of the 77 lots, concluding with minimum value of $185,000, maximum value of $215,000, average value of $204,091, and a total realisation of $15,715,000. Mr McEvoy considered that the lots were saleable at his valuations, given appropriate marketing campaign and reasonable selling period, with an agent suitably experienced in the marketing of developments of that nature. In relation to the valuation of Lot 170 as a residential redevelopment site, Mr McEvoy considered that the most appropriate approach was by way of reconciliation of the Direct Comparison method and a Residual Cash flow analysis. The direct comparison method involved direct comparison of Lot 170 with other comparable sites on either a rate per hectare or a rate per lot value. Mr McEvoy considered eight sites in Marsden, Redbank Plains, Brassall, Goodna suitable comparisons, including as a cross section of residential development sites. In respect of these sites, three were sold in 2007, two were sold in April 2008, one was sold in September 2008, one was sold in February 2009 and one was sold in April 2009. In respect of these comparisons, Mr McEvoy said: The sale at Marsden is of a larger site, but it is considered to be in a superior location with far less competition. The sales at Brassall are in a superior location. 100 Windle Road provides some guide, but the sites issues tend to indicate a value at the lower end of the range for the subject. Lot 3 Hardings Road is a smaller scale development and tends to provide a good guide compared to the subject. The sale at Azure Street Goodna is a steep site and is a smaller development. It is considered to set the upper end of the range by comparison to the subject. The sales in Redbank Plains show a range that are considered to be slightly below the value range for the subject. With regard to all the above, I consider an appropriate value for the subject property is between $400,000 and $450,000 per hectare of usable site or between $37,500 and $42,500 per lot. Based on the Direct Comparison approach, Mr McEvoy assessed the value range of Lot 170 "as is" to be $3,150,000 exclusive of GST. The residual cash flow approach determined a price that could be paid for the land, given the assessed gross realisation "as if complete" from the individual sale of the completed lots and the cost and charges of the proposed development, GST position adopted, current market profit expectations and with cognisance of all known characteristics of the property including inherent risks involved in the proposed development. Mr McEvoy prepared a residual cash flow analysis based on values he had assessed in respect of lot values. Cash flow projections were forecasts based on available information and were exposed to fluctuating economic and property market conditions. Mr McEvoy took account of the following data: o Gross realisation figure of $16,105,000 (including GST) o 8 presales during the construction period and a sales rate after completion of 4 lots per month o Acquisition costs of $165,921, or 5.53% of the assessed value o Selling costs of $810,975 (including GST) for legals, marketing, titling and commissions o Construction costs of $6,350,809, or $82,478 per lot (including GST) o Construction contingency allowance of $317,540 or 5.00% o Construction period including 3 months lead in time and 6 months for stage 1 o Professional fees of $134,200 (including GST) o Council fees and contributions in the amount of $1,246,531 (excluding GST) o Finance costs of 8.00% for land and construction finance on a 100% debt funded basis, and an establishment fee of 0.75% o GST based on the margin scheme and a margin value of $3 million. Mr McEvoy allowed for an acceptable development margin for the project of 77 lots to be in the range of 20.0%-22.5% after interest. Mr McEvoy noted that the site required considerable bulk earthworks, which increased the need for capital and extended the development period. To allow for this, Mr McEvoy relied more on the residual cashflow analysis and adopted a market value as at the date of valuation of $3 million exclusive of GST. Mr McEvoy considered that the development margin was a key indicator of viability for this type of proposed development. In this case he considered it reasonable given that development consent was in place, and the nature of the project. He considered that the internal rate of return was in line with market expectations reflecting a relatively short lead in time and construction time frame, the strength of the then market, and overall timing of the development. 335 Extensive additional material was annexed to the body of Mr McEvoy's report, including engineering estimates, environmental searches, and conditions of development consent in relation to Lot 170.

Mr Cox 336 Mr Cox produced an expert opinion concerning valuation of Lot 191 and Lot 170 in April 2014. It appears that his primary brief was to provide comments on Mr McEvoy's expert opinion, and indeed this is the format of Mr Cox's report. 337 In his report, Mr Cox stated that he had been in practice as a registered valuer in Queensland for over 35 years and has valued all classes of urban property. He also stated that he had held senior positions with CB Richard Ellis. 338 I accept that Mr Cox is able to give an expert opinion in relation to the value of Lot 191 and Lot 170. Mr Cox's report is primarily a detailed commentary on Mr McEvoy's opinion. 339 Early in his report Mr Cox discussed the global financial crisis and its impact on property development in Queensland. In particular, Mr Cox observed: The two LMW valuations were made as at dates which fell within the Global Financial Crisis (GFC) trough (2008 - 2009). Fallout from the sub prime mortgage crisis in the United States was felt in Australia and continued to grow during 2008. It reached a critical point in September 2008 when the Lehman Brothers Investment Bank collapsed. In the pre GFC era many providers of finance had growth mandates and actively pursued finance deals. This had a positive effect on values and drove values upwards for a number of years. The reverse situation applied during the GFC trough. The global financial crisis had an enormous negative impact on the availability of development finance and consequently on property values, particularly the values of development sites. 340 Mr Cox cites at length a paper prepared in 2010 by an academic from Queensland University of Technology, and sources cited in that paper. 341 In relation to undertaking valuations during the global financial crisis of 2008-2009, Mr Cox states: The difficulty in obtaining finance for the purchase or development of real estate during the 2008/2009 period of the GFC in Australia created a massive disruption of market forces. It was a period when the prices of most classes of real estate fell considerably. Income producing investment properties, such as office buildings and shopping centres, experienced a downturn in the prices achieved. However it was development sites which were the most seriously affected. This was because two tranches of borrowing were required - finance for the initial purchase and then finance for the development works. When undertaking a valuation a valuer must reflect the market circumstances which prevail at the date of valuation. This is particularly necessary when a market has taken a sudden and significant change. In these circumstances the sales evidence which underpins the assessed value must reflect the current market circumstances. The use of sales evidence which occurred prior to a market change, particularly one as severe as the GFC market downturn, is not valid, and will produce an incorrect and inflated valuation figure. 342 Mr Cox commented on the approach taken by Mr McEvoy to the valuation of Lot 191 and Lot 170 in the following terms: The definition of market value as adopted by the Australian Property Institute, and also relied upon by lMW as the basis of their two valuations is as follows:- Market value is the estimated amount for which a properly should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion. In short this means that market value is the price at which a property would exchange at a given date under the market forces which prevailed at that date. LMW's residual value analysis, which was their primary method of ascertaining the market value of Lot 170, was not so much a method of arriving at a value, but more a method of testing the feasibility of buying a site at a certain price and then being able to develop it and make a reasonable profit. The hypothetical purchase price can sometimes, but not always, coincide with market value. LMW demonstrated the feasibility of buying the site at $3 million, but the reality was that it would not exchange at that figure because of the poor demand for sites, combined with the oversupply of available sites. The disconnect between the market value, and the feasibility of developing the site at a particular figure, was created by the poor demand for sites, despite the theoretical feasibility of developing them. Notwithstanding the fact that it may have been feasible to develop the site purchased for $3 million at the date of valuation, it did not demonstrate that its market value was $3 million. Market forces determine the market value, not the development feasibility at a particular figure. The true test of value is at what price would it exchange?

Lot 170 344 In commenting specifically on Mr McEvoy's valuation of Lot 170, Mr Cox opined, in summary, as follows: As at 20 February 2009, the demand for residential subdivision development sites was very poor. The near impossibility of obtaining development finance due to the global financial crisis prevented the ability of most owners to fund development works. As a result, many existing owners were trying to sell development sites, creating an oversupply of available sites in the market. Few, if any, buyers were prepared to enter the development site market. The combination of oversupply of sites, and undersupply of buyers, caused asking prices of development sites to plunge, however very few sales occurred. Mr Cox disagreed with the view of Mr McEvoy that demand for development sites at that time was steady and stable. Material produced by the Queensland Department of Infrastructure and Planning for the June Quarter 2009 indicates that the volume of land sales in the Ipswich local government area declined significantly from the September Quarter 2007 to the March Quarter 2009. The number of sales of vacant land in the June Quarter of 2009 represented a decrease of 45.1% in land sales volume compared to the same time in 2008. There was an adequate supply of development land of this nature on account of the nearby Springfield Lakes master planned community. He agreed with Mr McEvoy that the supply of product similar to that proposed on Lot 170 was substantial due to the larger estates to the east and a mix of larger and smaller estates to the west. One effect of this was to place downward pressure on achievable sale prices. He disagreed with Mr McEvoy's opinion that the most likely buyer as at 20 February 2009 was a small developer who would develop the land. Mr Cox continued: Because of the difficulty in obtaining development finance at the time, on account of the fallout from the GFC, there was little chance of attracting any buyer. If a buyer was located, the price achieved would be significantly reduced because of the availability of choice of such sites at that time. Such sites were plentiful because of the mortgage pressures on the many owners who held sites. In relation to the reference by Mr McEvoy to statistics suggesting an upward trend in respect of housing finance relate to owner occupied dwelling finance commitments in Queensland, these statistics have little, if any, relevance to the valuation of a development site. Such a site, irrespective of housing financing levels, would be very difficult to sell or develop at the time, with consequent downward effect on value. The sale of Lot 171 to Two Eight Two Nine was the most relevant item of market information in Mr McEvoy's report. At the relevant time while some demand still existed for finished product such as residential allotments and completed houses and units, little, or no demand for development sites remained. This was due to the difficulty in sourcing the development funds necessary to pay for the cost of creating the finished product. Mr Cox makes the following observation: I believe that demand for sites was quite poor and was declining. This was due to the very limited availability of the funds necessary to develop the sites. I specifically disagree with the opinion that the most likely buyer "was a small developer who would develop the land". A small developer would have had extreme difficulty in sourcing the development funds necessary. Any possible buyer would be an opportunist looking for a significantly reduced price. I also disagree with the opinion that given the market conditions the property "was saleable at valuation over a normal three to six month sales period." The market conditions for development sites was in fad the reverse of that implied by LMW. Market conditions were poor given the difficulty in obtaining funds for the purchase, or the development, of sites. Many sites were on the market creating an oversupply. LMW appears to contradict this implied strength of the market on pages 15 and 16 of the February 2009 valuation report with the following comments:- For the englobo land market there was an increasingly wide gap emerging between the expectations of vendors and those of purchasers. Accordingly, due to the lack of transactions occurring, it was very difficult to determine the market value of sites. This scenario was also clearly linked to the difficulty in obtaining credit. Vendors were anxious or were being pressured to sell. Buyers were not particularly willing unless it was perceived to be a bargain. These statements regarding poor market conditions were contradicted by LMW's optimistic valuation figure of $3,000,000. Mr Cox states that in respect of contracts that were entered into for the purchase of individual lots within such a development, put and call options and contracts with discounted prices were common at the time. These were often entered into in the case of bulk sales to builders or investors. In relation to the eight large sites with which Mr McEvoy compared Lot 170, Mr Cox said: As examined elsewhere in this report market conditions reversed very quickly from buoyant in 2006/2007, to poor, by late 2008 and 2009. The collapse of Lehman Brothers Investment Bank, in September 2008, was the catalyst which forced the recognition in Australia. that "the music had stopped". 345 Mr Cox continued: Therefore five sales took place well before the market changed. Two more also appeared to have taken place, or were negotiated, before the recognition of the market collapse. This reliance by LMW on seven out of eight sales which took place before it was accepted that the market had changed significantly/contradicts LMW's valuation parameter of "relativity of time to market conditions". 346 Mr Cox further observed: The predominance of pre GFC sales evidence signalled the fact that there were very few sales which had occurred close to the valuation date. The absence or scarcity of relevant sales was a signal that the market was performing poorly. This should have been recognised by LMW and accordingly the valuation figure should have been at a lower figure. The absence or scarcity of sales should have been further signalled to LMW by the site sales evidence contained in the CBRE valuation, dated 6 May 2009, which had been forwarded to Mr McEvoy by his instructing solicitor. Seven of the eight sales used in that valuation were pre GFC ie between 10 months and 20 months prior to the date of valuation. In respect of two sales occurring close to the date of valuation, namely the Marsden property and the School Road property at Redbank Plains: o the Marsden property was far superior to Lot 170 because of its different physical, locational and potential use characteristics (including the fact that, at the time of its sale, the total potential residences numbered 205); and o the School Road property was purchased by Devine Limited in circumstances where the site was a strategic purchase for Devine Limited, being a continuation of an existing development site. The shortcoming of the residual value approach used by Mr McEvoy is that there are many inputs or variables which can affect the outcome. Mr Cox noted that in his report at paragraph 6.7, Mr McEvoy said that he primarily relied on the residual value approach. Mr Cox considered that, given the market circumstances at the time, the residual analysis approach was hypothetical and unreliable. Mr Cox noted that there had previously been on foot a contract entered between Brittains Road Pty Ltd and Investa on 11 August 2008 for the sale of Lot 170 for the sum of $1.775 million. In relation to this contract Mr Cox observed: This contract represented an indication of the value of the subject property given the vendor's and the purchaser's willingness to sign the contract at the figure of $1.775 million. The knowledge by a valuer in February 2009 that such a contract had been entered into at $1.775 million should have signalled the fact that the market was less than buoyant and had fallen well below the levels indicated by the 2007 and early 2008 sales which formed the basis of the February 2009 valuation. The knowledge by a valuer in February 2009 that the contract, which was subject to satisfactory finance, and a satisfactory valuation, had recently fallen over, should have signalled the difficulty in obtaining finance, and that if a finance valuation was undertaken it may not have endorsed the purchase price. A valuer faced with this evidence when valuing the properly in February 2009 should have accepted the realities of the market place and not have undertaken an impractical and hypothetical residual cash flow analysis as the primary method of valuation.

Lot 191 352 I consider the basis of Mr McEvoy's valuation of Lot 191 in the amount of $290,000 to be sound. In particular, I am persuaded of the force of his opinion by: The soundness of his comparison of Lot 191 with comparably located and sized properties. The fact that all of the comparable properties to which Mr McEvoy referred were the results of sales within the months immediately preceding 23 December 2009 (namely between August 2009 and December 2009), and that those sales ranged in price from $222,000 to $285,000. His view, from which Mr Cox did not demur, that the sales market at that time was difficult. The fact that Mr McEvoy's valuation was also referable to potential profit which could be made on subdivision of Lot 191 and the resale of two separate blocks of land, in circumstances where the subdivision was a relatively simple and inexpensive process. The fact that Mr McEvoy had regard to relatively contemporaneous sales of lots in the range of 500 square metres (that is, half the size of Lot 191), in reasonable proximity to Lot 191. In my view this was a perfectly reasonable approach in the circumstances. The fact that Mr Cox also agreed with his opinion in relation to the value of Lot 191. 353 I note that there was extensive cross-examination of Investa witnesses during the trial concerning the alleged inflation of lot prices and rebates provided to purchasers in respect of lot sales. In my view, this evidence is of little weight in determining the value of Lot 191 in light of the opinion of Mr McEvoy, with which Mr Cox concurred, and the comparative sales evidence supporting that opinion. Further, I note that one additional "comparative sale" relevant to Lot 191 was the sale of the property by Queensland Property Centre to Spencer Projects for $290,000 on 25 June 2010. There is no evidence before me to suggest that there had been a dramatic increase in the value of Lot 191 between the date of valuation (23 December 2009) and 25 June 2010. 354 In my view the valuation of Lot 191 in the amount of $290,000 as at 23 December 2009 is a fair valuation.

Lot 170 355 However, I am not persuaded by the opinion of Mr McEvoy that Lot 170 should be valued at in excess of $3 million as at February 2009. Further, I am not persuaded that the sale of Lot 170 as at February 2009 could properly be compared with sales of the other en globo parcels prior to the onset of the global financial crisis identified by Mr McEvoy in his report. 356 Much comment was made throughout the trial in relation to the onset of the global financial crisis following the collapse of financial services firm Lehman Brothers in September 2008. In particular I note evidence of Mr Dearlove in relation to the market in greater Ipswich with respect to development sites, and the impact that the global financial crisis had on the sale of development sites including in the western corridor of Brisbane and such areas as Bellbird Park: Indeed, we had - we were acting for clients who, he banks had called up their loans who had development sites - residential development sites, so they - they put themselves into administration. We had walk-up - walk-up townhouse apartments that stopped dead in terms of their sales volumes. Those apartments that had sold off the plan, the settlements were falling through because the valuations weren't stacking up to effect the sale. In the land market, there was - there was a cacophony or a - a mixture of circumstances that - that made it very difficult. Land wasn't selling, developers didn't want to drop their price, they had to reduce their prices to - to secure the sales. They were obviously under some financing pressures themselves. There was - no one was coming out to buy, because of the fears of the GFC. When the Labor Government backed the Federal banks through the guarantee scheme, that sent panic through the - the retail market. It was very - very difficult to sell property including in that corridor, which - which - which really exemplifies the - the state of the market out there, because that is a very affordable area of the market and if you think property would move, it would move out there, because of the demographics and the population shift out of the city. It had stopped dead - it had stopped dead and really, what we saw, was a cutting of prices of the blocks to get them away to secure the rate of sale and turn the projects over. (transcript 9 October 2014 p 2817 ll 10-31.) 357 In my view, this evidence of Mr Dearlove paints an accurate - and indeed unchallenged - picture of the business environment in property development in Brisbane, and in particular the western suburbs of Brisbane stretching towards Ipswich, during the global financial crisis of the second half of 2008 and into the first half of 2009. 358 That the global financial crisis had a dramatic effect on the business of Investa during that period was the subject of much evidence during the trial. I note, for example: Evidence of Ms Prout in her affidavit of 5 December 2013, where she said: 29. … The management restructure of Clarendon Residential Group occurred at about the same time as the impacts of the 2008 Global Financial Crisis were being felt severely. The Queensland property market was affected by the GFC and I recall that sales of lots slowed down. 30. On 2 December 2008, I attended an Investa finance conference held at the Justice & Police Museum in Circular Quay, Sydney. This was for the finance-related employees across the company. Development Managers and sales/marketing were not included in this conference. At that meeting, Graham Monk, Michael Royle and Ming Long spoke about reporting requirements, debt issues, cash flow and 2009 financial objectives. I recall that someone said words to the effect of: "We are having cash flow problems. What we need is to sell properties". They ended with a funny line: "Cash is King! Cash is bigger than King!" This phrase was then repeated in conversations around the business afterwards. The focus of the comments during the sessions related to the importance of cash flow in terms of bringing it in and forecasting it accurately. Evidence of Mr Jenkins during the hearing that: Great. All right. The climate of Investa at the time of taking that first contract of - taking that first sale, can you explain the climate of Investa through that GFC period and the need for Investa to dispose of the property of that first sale between August and January - so August 2008, January 2009?---Yes. The GFC obviously impacted on everyone. We internally looked at a process of divesting assets which were - had dated delivery, or were non-core to the group. And the tagline was sort of, the "dash for cash". (transcript 2 June 2014 p 67 ll 18-24) … At the height of the GFC, September 2008, we then looked at the portfolio to look at assets that, reflective of book or market, we could rationalise to - to be able to sort of assist with cash flow. (transcript 3 June 2014 p 99 ll 36-38.) … You mentioned that that was - I guess, the kick-off date, for want of a better word, was sort of September 2008 was - crudely speaking, as best as you can recall, about September 2008?---Well, that was the height - - - The height?--- - - - of my view of the GFC, but it went into early '09. It rolled, yes?---Yes. (transcript 3 June 2014 p 100 ll 16-22.) … I was really, during the GFC, focusing on what, as you said earlier, could bring in - you know, make a real difference. (transcript 6 June 2014 p 406 ll 5-6.) Evidence of Mr Waters during the hearing to the following effect: Right. Now, do you recall, as you sit here now, what was going on within the Investa group, that is land and housing sales group, in that period from September when Lehman Brothers collapsed until late January 2009 when Thomson terminated the contract?---I can't overly recall. I just remember we were in a very depressed market. Especially in the housing side, we were finding that there was a significant downturn in sales activity. (transcript 19 August 2014 p 1590 ll 1-6.) 359 I consider that difficulties experienced by Investa in selling any property at all in this corridor during the height of the global financial crisis is reflected in the evidence of Mr Jenkins, Ms Prout and Mr Waters. I consider it almost certain that selling a development site with the attributes of Lot 170 - including its steep topography requiring extensive earth moving - in the western corridor of Brisbane, in a location perceived even by Mr McEvoy to be an inferior market location, in the midst of the global financial crisis, was a task of supreme difficulty. 360 In the light of the poor economic conditions prevailing at the end of 2008, to which reference was made by Investa witnesses as well as Mr Cox, I do not consider it realistic to compare sales of large development sites in 2007, and early 2008, with sales conditions prevailing at the end of 2008 and into 2009. I note further the opinion of Mr Cox in relation to particular features of the Marsden property and the School Road property at Redbank Plains, such as to make those sites distinguishable from Lot 170 as sites for comparison. In particular, I consider that the features identified by Mr Cox, namely the strategic attributes of those two sites attracting the particular adjoining purchasers in respect of those sites, make them distinguishable from Lot 170, which had no such strategic attraction to purchasers (including Two Eight Two Nine). I respectfully adopt the approach of McLure J in Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295 at [55], in concluding that sales to adjoining owners should be viewed with caution. 361 Further, I note the uncontentious fact that, shortly prior to the entry into the deed of Deed of put and call with Two Eight Two Nine, a contract between Investa and Brittains Road Pty Ltd had ended. In that contract, entered in August 2008, a price of $1,775,000 including GST had been agreed by Investa and Brittains Road Pty Ltd in respect of Lot 170. There is no evidence before the Court to suggest that that sale price had been depressed for any unknown reasons of concern to this Court. 362 I consider it of particular significance that Mr McEvoy gave evidence that, when preparing his report, he was not made aware of the Brittains Road contract for $1,775,000. Mr McEvoy's report was accordingly prepared in ignorance of this important information (transcript 16 June 2014 p 910 ll 1-7). I note that, in a subsequent report in reply to Mr Cox's report, Mr McEvoy on 30 May 2014 said - presumably in relation to the Brittains Road contract - the following: 1.19 Mr Cox comments on a previous contract on the site that did not proceed. I was unaware of this contract. However, a contract that is not completed cannot be considered to represent market value. 363 While the Brittains Road contract was not completed, I do not accept that it is proper to disregard it as irrelevant as opined by Mr McEvoy. The price agreed by Investa and Brittains Road Pty Ltd was as between a willing seller and a willing buyer, in respect of the relevant property, only months before the valuation date. In my view it is a very relevant sales price to take into account in determining the valuation of Lot 170 as at 20 February 2009. 364 The applicants also placed considerable reliance on the valuation in the CB Richard Ellis report in respect of Lot 170, produced on 5 November 2008. In particular, the applicants submitted that this valuation: had valued Lot 170 at $4 million, exclusive of GST; was prepared for the serious business of providing assurance to the ANZ Bank that it would have adequate security for a loan in respect of Lot 170, if it made one; was prepared during the global financial crisis, and in full awareness of the ramifications of the global financial crisis. 365 Further, they refer to evidence (in particular, an information memorandum of property and business finance consultants Equiline, prepared for Two Eight Two Nine on or about 9 February 2010) that a CB Richard Ellis report had been used by Mr Tonuri and Two Eight Two Nine in obtaining finance to purchase Lot 170. 366 In my view, however, no weight can be given by this Court to the CB Richard Ellis report as a reliable valuation of Lot 170 at that time. 367 On its face, the CB Richard Ellis report appears to have been prepared for the ANZ Bank at the instructions of Mr Thompson of Brittains Road Pty Ltd, in support of an application for finance - presumably by Brittains Road Pty Ltd. The reception of the report by ANZ Bank is unknown, or whether it was ever used for its original purpose. It was apparently provided at some time by Mr Barclay to Mr Nankervis and Mr Tonuri. The author of the report was never called for cross-examination, and in this respect its contents never tested. Unlike the reports of Mr McEvoy and Mr Cox, it is not a report upon which the Court can rely as an expert opinion in these proceedings. Finally, its apparent conclusion that the value of Lot 170 as at 5 November 2008 was $4 million simply does not stand up in the face of the material before the Court in the reports of Mr McEvoy and Mr Cox. 368 That Mr Tonuri and Two Eight Two Nine relied on the CB Richard Ellis report in support of an application for finance to acquire Lot 170 speaks more to the convenience to them of having a valuation justifying an application for generous financial accommodation, than to Mr Tonuri's belief in the accuracy of the report, or indeed the objective accuracy of the evaluation. 369 Finally, I note that Mr McEvoy's report was subjected to rigorous criticism regarding alleged omission of certain costings from his opinion concerning Lot 170. Mr McEvoy's opinion in respect of these costings relied on the estimates prepared on 11 May 2012 by quantity surveyors Hyder Consulting. He assumed that construction costings, as at 20 February 2009, would be $8,049,080. 370 In particular, the respondents point to alleged errors in or failures to allow for: A Council headworks contribution (which the respondents submit exceeded the estimated cost by $864,169, but which the applicants submit was based on actual expenditure as at 30 June 2010 and is not relevant). A council bus stop contribution (which error the applicants concede, and in respect of which submit that the amount of $40,000 should be allowed). Rehabilitation of vegetation (which the respondents submit cost $39,094, but the applicants submit that this may have been taken into account by Mr McEvoy as landscaping costs). Concrete pathways (which the respondents submit cost $104,286, but the applicants submit may have been taken into account by Mr McEvoy). Cultural heritage clearance certificate (which the respondents submit cost $74,276.30, but which the applicants submit was incurred many months after the valuation date). Street lighting (in respect of which the respondents claim a variation of $27,291, but which the applicants submit was incurred after the valuation date). Professional fees (in respect of which the respondents claim a variation of $106,538, but which the applicants submit was incurred after the valuation date). Electrical reticulation (in respect of which the respondents claim a valuation of $23,673, but which the applicants submit was unsupported by evidence and in any event may have been incurred after the date of valuation). Communications and Telstra costs (in respect of which the respondents claim a cost of $29,738, but the applicants submit was a figure unsupported by evidence, a variation and appears to be based on actual expenditure incurred after the valuation date). Land holding costs (in respect of which the respondents claim a variation of $201,094, which error the applicants concede). 371 Costings relevant to these line items were not insignificant. However other than in relation to the Council bus stop contribution and land holding costs which total $242,094: the evidence that such costs had been incurred was unsatisfactory; the respondents had not made a case that Mr McEvoy had not taken relevant costs into account or that relevant costs had not been incurred after the valuation date. 372 In respect of the costings raised by the respondents, I consider that only the Council bus stop contribution and the land holding costs should have been taken into account by Mr McEvoy. These costs total approximately 8% of the total value of the land as ascribed to it by Mr McEvoy. In the circumstances I do not consider this to be a major cause for concern in respect of Mr McEvoy's valuation opinion. 373 In the circumstances, I am not persuaded that Lot 170 was sold at an undervalue. While Investa may have seriously reconsidered the sale of Lot 170 had they had knowledge of the development options offered by the Projex North proposal, and indeed it may be that these options could have affected the asking price for the property, there is nothing before me to support a finding that, in the economic environment at the time of sale, it had a greater value than $1,454,545 exclusive of GST paid for it by Two Eight Two Nine.

[1]

Mr Nankervis against Mr Barclay and Oliver Hume SEQ 377 Mr Nankervis' statement of cross-claim filed 15 November 2013, brought against Mr Barclay and Oliver Hume SEQ, relevantly provides: 4. If: (a) Mr Nankervis and Mr Barclay entered into the Agreement with Mr Tonuri (which is denied); and (b) as a consequence, the Applicants succeed in their claims against Mr Nankervis, Mr Barclay and/or Oliver Hume for breach of fiduciary duty, then Mr Nankervis claims equitable contribution by those other parties on the basis of their co-ordinate liability as defaulting fiduciaries. 5. Alternatively, if: (a) Mr Nankervis and Mr Barclay entered into the Agreement with Mr Tonuri (which is denied); (b) as a consequence, the Applicants succeed in their claim against Mr Nankervis for breach of fiduciary duty; and (c) the Applicants do not succeed in their claims against Mr Barclay and/or Oliver Hume for breach of fiduciary duty, then Mr Nankervis claims equitable contribution by those other parties on the basis of their co-ordinate liability as knowing participants in his breach of fiduciary duty as set out in the following paragraphs. 6. Entering into the Agreement constituted a dishonest and fraudulent design on the part of Mr Nankervis in breach of his duties as a fiduciary. 7. At all material times, Mr Barclay knew that: (a) Mr Nankervis was employed by the First Applicant as Senior Development Manager; (b) the Fossil Site (Lot 170) was worth more than $1,454,545. ... 8. Mr Barclay knowingly participated in this breach of fiduciary duty by Mr Nankervis. 8A. Oliver Hume benefited from Mr Barclay's entry in to this Agreement by: (a) the receipt of commission from TETN (Two Eight Two Nine Pty Ltd) or Mr Tonuri upon the purchase of the Fossil Site from the Second Applicant; and/or (b) the receipt of commission as the seller's real estate agent upon the sale of lots in the development undertaken by TETN on the Fossil Site, which became known as the Outlook. 9. … Oliver Hume knowingly participated in this breach of fiduciary duty by Mr Nankervis.

Consideration 381 The cross-claim of Mr Nankervis is referable to Lot 170 and any breach of fiduciary obligation by him in respect of that property. I have found that Mr Barclay and Oliver Hume SEQ were not in a fiduciary relationship with either of the applicants in relation to Lot 170, and therefore neither respondent breached any fiduciary obligation to either of the applicants in that respect. However, Mr Nankervis was in a fiduciary relationship with the applicants in relation to Lot 170, and breached relevant fiduciary obligations. Mr Nankervis claims equitable contribution by Mr Barclay and Oliver Hume SEQ on the basis of their co-ordinate liability as knowing participants in his breach of fiduciary duty. 382 Mr Nankervis does not specifically plead "knowing assistance" by Mr Barclay and Mr Nankervis in his breach of fiduciary obligation in terms of the liability contemplated by the well-known case Barnes v Addy [1870] LR 9 Ch App 244. Although this appears to be the basis of his cross-claim. He does not particularise his claim by reference to relevant facts. For this reason Mr Nankervis' cross-claim cannot be substantiated and should be dismissed. There is no claim, so far as I can tell, that Mr Barclay has "received trust property" as is generally understood when parties make claims pursuant to the principles articulated in Barnes v Addy. 383 The issue of accessorial liability in equity has been vexed since the decision in Barnes v Addy. In light of that decision, for many years accessorial liability would only be imputed where a person had assisted with knowledge in a dishonest and fraudulent design on the part of the trustees (per Lord Selbourne LC in Barnes v Addy at 252). A modern interpretation was accorded to these principles however in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, where the Privy Council found that accessorial liability did not depend on knowledge in a dishonest and fraudulent design. 384 Authoritative explanations of relevant principles can be found in the decisions of the High Court in Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 and Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, and the decision of the Full Court of this Court in Grimaldi. 385 In Farah, Gleeson CJ and Gummow, Callinan, Heydon and Crennan JJ discussed the "second limb" of Barnes v Addy in the following terms: 160. As conventionally understood in Australia, the second limb makes a defendant liable if that defendant assists a trustee or fiduciary with knowledge of a dishonest and fraudulent design on the part of the trustee or fiduciary. 161. Several points of a general nature should be made here. The first concerns the scope of the second limb. This was not expressed by Lord Selborne LC as an exhaustive statement of the circumstances in which a third party who has not received trust property and who has not acted as a trustee de son tort nevertheless may be accountable as a constructive trustee. Before Barnes v Addy, there was a line of cases in which it was accepted that a third party might be treated as a participant in a breach of trust where the third party had knowingly induced or immediately procured breaches of duty by a trustee where the trustee had acted with no improper purpose; these were not cases of a third party assisting the trustee in any dishonest and fraudulent design on the part of the trustee. 162. Secondly, the distinction has been recognised in the Australian case law but, on one reading of Royal Brunei Airlines Sdn Bhd v Tan, may have been displaced by the Privy Council in favour of a general principle of "accessory liability" expressed as follows: A liability in equity to make good resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation. It is not necessary that, in addition, the trustee or fiduciary was acting dishonestly, although this will usually be so where the third party who is assisting him is acting dishonestly. "Knowingly" is better avoided as a defining ingredient of the principle. 163. Thirdly, whilst the different formulations of principle may lead to the same result in particular circumstances, there is a distinction between rendering liable a defendant participating with knowledge in a dishonest and fraudulent design, and rendering liable a defendant who dishonestly procures or assists in a breach of trust or fiduciary obligation where the trustee or fiduciary need not have engaged in a dishonest or fraudulent design. The decision in Royal Brunei has been referred to in this Court several times but not in terms foreclosing further consideration of the subject in this Court, in particular, further consideration of the apparent necessity to displace the acceptance in Consul Development Pty Ltd v DPC Estates Pty Ltd of the formulation of the second limb of Barnes v Addy were Royal Brunei to be adopted in this country. Until such an occasion arises in this Court, Australian courts should continue to observe the distinction mentioned above and, in particular, apply the formulation in the second limb of Barnes v Addy. (footnotes omitted.) 386 Further, in Grimaldi the Full Court observed in summary: So-called Barnes v Addy liabilities expose a person to in personam liabilities. Liability both for knowing receipt and knowing assistance turns on what the third party knew, or had reason to know, of the circumstances constituting the breach of "trust" (recipient liability) or the "dishonest and fraudulent design" (assistance liability) (at [259]). For the purposes of the "knowing assistance" liability, the decision of the High Court in Farah has indicated beyond question in this Court that "knowledge/notice" falling within the following categories represents Australian law: that is "actual" knowledge, the wilful shutting of eyes to the obvious, wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make and knowledge of circumstances which would indicate the facts to an honest and reasonable man. Knowledge of circumstances which would put an honest reasonable man on inquiry ("constructive knowledge") does not constitute "knowing assistance" for these purposes (at [262]). 387 In this case, Mr Nankervis' fiduciary obligations included avoiding placing himself in a position where his personal interest and duty conflicted, and further included informing Investa of information relevant to the disposition or otherwise of Lot 170. Mr Barclay was an experienced real estate agent, and had had extensive dealings with Investa. He knew of the position Mr Nankervis held with the first applicant. I consider it most likely that Mr Barclay knew that Mr Nankervis should not be party to any arrangement involving the acquisition of Lot 170, and that Mr Nankervis had not informed Investa of his arrangement with Mr Barclay and Mr Tonuri. Mr Nankervis has not submitted that Mr Barclay was aware of other aspects of his breach of fiduciary obligation, for example withholding information from Investa concerning the work undertaken by Projex North. 388 Indeed the absence of points of pleading necessary to establish accessorial liability in terms of the principles in Barnes v Addy inevitably must be fatal to a cross-claim in these terms. 389 Further, I note that more than simple knowledge - however arrived - of Mr Nankervis' breach of fiduciary obligation is necessary to render a third party accessory to his breach, otherwise circumstances where he merely informed third parties of the circumstances of his breach of fiduciary obligation to Investa would be sufficient to render them liable. I also note that a mere dealing is generally not considered to be assistance (see Bank of New South Wales v Adams [1984] 1 NSWLR 285 and the discussion of this point by Austin RP, "Constructive Trusts" Chapter 11 in Finn PD, Essays in Equity (The Law Book Company Limited, 1985) at pp 232-233). The third party must have performed some act (or refrained from performing some act, although there is doubt as to whether refraining from acting can constitute "assistance": see cases cited by Paul Davies in Accessory Liability (Hart Studies in Private Law, 2015) at 107 to actively assist him, in order to achieve some level of accessorial liability. The conduct of the third party must have been in furtherance of the design of the breaching fiduciary (note Power v Ekstein [2009] NSWSC 130 at [105]; The Bell Group Ltd (In Liq) v Westpac Banking Corporation [2001] WASC 315 at [93], and the discussion in Shankar T, "The Place of the 'Dishonest and Fraudulent Design' Requirement in Accessorial Liability for Assisting in a Breach of Trust or Fiduciary Duty" (2014) 40(3) Monash University Law Review 793). 390 As is noted by author Paul Davies in Accessory Liability at 106: Assistance has been interpreted widely. It is difficult to define other than by example, and many examples could be given. As Peter Gibson J said in Baden v Societe Generale, it is 'a simple question of fact whether or not there has been assistance … the assistance … must not be of minimal importance. (footnotes omitted.) 391 While it may be that Mr Barclay had knowledge of the breach of fiduciary obligation by Mr Nankervis, in the circumstances of the pleaded case I am unable to find that, by entering into an arrangement with Mr Nankervis and Mr Tonuri, Mr Barclay knowingly assisted Mr Nankervis in respect of, or participated in, Mr Nankervis' breach of fiduciary obligations. It may be that Two Eight Two Nine, as the acquirer of Lot 170, assisted Mr Nankervis in respect of his breach of fiduciary duty to the applicants, however this was not pleaded and I am unable to make any finding as to whether this may or may not have been the case. 392 Mr Nankervis' cross-claim against Oliver Hume SEQ is, in my view, even less persuasive than his claim against Mr Barclay. Again the manner in which the case has been pleaded by Mr Nankervis does not support findings in terms of the principles in Barnes v Addy. There is not a shred of evidence to suggest that anyone at Oliver Hume SEQ other than Mr Barclay knew anything of the arrangements involving Mr Nankervis, Mr Barclay and Mr Tonuri. No knowledge resided in Oliver Hume SEQ in respect of any design of Mr Nankervis, and, in the absence of submissions in this respect, I am not persuaded that any knowledge of Mr Barclay could be imputed to Oliver Hume SEQ for the purposes of considering accessorial liability. Further, I am not persuaded that Oliver Hume SEQ performed any act, or in any way benefited, from the arrangement whereby Two Eight Two Nine acquired Lot 170. Oliver Hume SEQ denied that it received any commission from the sale. No case to the contrary has been established. 393 The appropriate order is that Mr Nankervis' cross-claim against Mr Barclay and Oliver Hume SEQ be dismissed.

Oliver Hume SEQ's defence to Mr Barclay's statement of cross-claim 400 In its defence to Mr Barclay's statement of cross-claim brought against it, Oliver Hume SEQ says, materially: 4. As to paragraphs 4 and 5 of the cross-claim the fourth respondent: a. Says that any conduct giving rise to a claim for breach of contract or breach of duty alleged against the second respondent: (i) did not arise from matters which were within the scope or authority of the second respondent's duties as a director, employee or agent of the fourth respondent; (ii) was, in breach of the duties which the second respondent owed the fourth respondent by reason of his position as a director and employee of the fourth respondent; b. Otherwise repeats and relies on the matters contained in the fourth respondent's cross-claim against the second respondent as filed herein; c. In the premises denies there is any obligation on the fourth respondent to indemnify the second respondent as pleaded or at all. 401 In the absence of submissions from Mr Barclay as to the basis upon which Oliver Hume SEQ is liable to indemnify him in respect of any breach of contract or duty by him to the applicants, I am unable to identify any basis upon which such right of indemnity exists. I am satisfied that Mr Barclay owed a fiduciary obligation to the second applicant in relation to Lot 191, and that he breached that fiduciary obligation. 402 Mr Barclay was a senior employee of Oliver Hume SEQ, engaged in providing services as a real estate agent to the second applicant. As I noted earlier in this judgment, Mr Barclay was subject to an obligation of disclosure in respect of the acquisition of Lot 191 by corporate bodies associated with his spouse. I accept the evidence of Mr Dearlove that for a real estate agent acting for a property developer to sell a property to party with whom the real estate agent is associated, without disclosing that association to the property developer, is "perhaps best described as a cardinal sin in the real estate world" (transcript 9 October 2014 p 2790 ll 25-26). I am satisfied that conduct of this nature was a breach of Mr Barclay's duty to Oliver Hume SEQ as an employee, and also as a director in that he had placed his personal interests ahead of his duty to Oliver Hume SEQ. 403 I am satisfied that this cross-claim must fail.

[4]

Mr Barclay against Vero Insurance Limited 404 In his statement of cross-claim brought against Vero Insurance Limited ("Vero"), Mr Barclay pleads that: 4. … at all relevant times the Second Respondent was acting within the authority of his relevant positions referred to at paragraph 3 above. 5. On 30 September 2010 the Fourth Respondent agreed with the Cross-respondent that the Cross-respondent would provide professional indemnity insurance cover to the Fourth Respondent in consideration for the Fourth Respondent paying the premium specified in policy number LPP011343415 ("Policy of Insurance"). 6. Relevantly, the Policy of Insurance provided: (a) Definitions (i) "Claim" means any demand made by a third party upon the insured for compensation, however conveyed, including a writ, statement of claim, application or other legal or arbitral process; (ii) "Insured" means: A. the legal entity or entities specified in the Schedule; and/or; B. past and/or present employees of the legal entity or entities specified in the Schedule, but only in his or her capacity as such; (iii) "Insurer" means Vero Insurance Limited ABN 48 005 297 807; (iv) "Insured Costs" means all necessary and reasonable costs and expenses incurred by the insurer, or by the Insured with the Insurer's prior written consent, in defending, investigating, or settling and Claim or Claims (not being Inquiry Costs or claimant's costs and expenses); (v) "Principal" means a sole practitioner, a partner of a firm or a director of a company; (vi) "Professional Services" means the professional business described in the Schedule, and no other, of the legal entity or entities specified in the Schedule; (b) Insurance Preamble The Insured and the Insurer agree that the Insurer will provide insurance on the terms of this Policy. (c) Insuring Clause The Insurer will indemnify the Insured against civil liability for compensation and claimant's costs in respect of any Claim or Claims first made against the Insured and notified to the Insurer during the Period of Insurance resulting from the conduct of the Professional Services but not in respect of any such Claim or Claims resulting from any act, error or omission occurring or committed prior to the Retroactive Date. (d) Insured Costs The Insurer will, in addition to the Limit of Indemnity, pay Insured Costs, provided that if the total amount of compensation and claimant's costs and expenses required to dispose of the Claim or Claims exceeds the Limit of Indemnity, the liability of the Insurer for such Insured Costs shall be only that proportion which the Limit of Indemnity bears to the total amount of compensation and claimant's costs and expenses required to dispose of the Claim or Claims. (e) Claims Notifications Every claim made against the Insured shall be notified to the Insurer as soon as practicable and in any event prior to expiry of the Period of Insurance, and every letter, demand, writ summons and legal process pertaining to such Claim shall be forwarded to the Insurer as soon as practicable after receipt. 7. By the Schedule to the Policy of Insurance, Insured includes OHA (Oliver Hume Australia Pty Ltd) and the Fourth Respondent. 8. …the Second Respondent is an insured under the Policy of Insurance. … 11. On 12 August 2011 the Second Respondent, by letter from Warlow Scott Lawyers to Carter Newell Lawyers on behalf of the Cross-respondent, claimed from the Cross-respondent coverage under the Policy of Insurance. 12. In breach of the Policy of Insurance, the Cross-respondent, by letter dated 8 November 2011 from Carter Newell Lawyers on its behalf to Warlow Scott Lawyers on behalf of the Second Respondent, has refused to indemnify the Second Respondent in terms of the Policy of Insurance. 13. In the premises, if insofar as any liability is held to rest upon the Second Respondent, the Cross-respondent is liable to indemnify the Second Respondent.

[5]

Oliver Hume SEQ against Mr Barclay filed 15 November 2013 408 There are in fact two statement of cross-claims filed in these proceedings by Oliver Hume SEQ and brought against Mr Barclay. The first was filed on 10 December 2012 and the second on 15 November 2013. They are both substantially similar, however differ slightly in their terms. 409 The most recent statement of cross-claim (filed 15 November 2013) materially provides: 3. The fourth respondent says that, if it is liable to the applicants on the grounds alleged by the applicants (which is denied) then: (a) the second respondent by his conduct purported to act as the agent of the fourth respondent; (b) the second respondent by reason of his position as a director and employee or agent of the fourth respondent owed duties to the fourth respondent to conduct his activities with due skill and care and having regard to the interests of the fourth respondent; (c) the second respondent whilst a director of the fourth respondent had an obligation to exercise his powers and discharge those duties in good faith in the best interests of the fourth respondent and for a proper purpose; (d) the second respondent had a duty not to engage in conduct which was outside the scope of his authority as a director or employee or agent of the fourth respondent; (e) if such conduct as alleged by the applicants has been engaged in by the second respondent then such conduct was: (i) contrary to and in breach of the obligations which the second respondent owed to the fourth respondent; and (ii) undertaken without the knowledge or approval of the fourth respondent. 4. Further, as a consequence of the matters pleaded in paragraphs 2 and 3 aforesaid, if: (a) The fourth respondent is found to be liable to the applicants in accordance with the matters alleged in the statement of claim, then; (b) Such liability has been caused or contributed to by the conduct of the second respondent as particularised aforesaid; (c) The second respondent has acted in breach of the duties which he owed to the fourth respondent; (d) The second respondent has engaged in such activities for an improper purpose, namely for the benefit of the second respondent; (e) in the premises, the second respondent is liable to indemnify or otherwise pay damages to the fourth respondent for any liability which the fourth respondent has to the applicants. 5. Further or in the alternative to the matters pleaded in paragraph 4 aforesaid, the fourth respondent: (a) Has suffered loss and damage as a consequence of the conduct, breach of contract and/or breach of fiduciary duty of the second respondent as particularised aforesaid; (b) The nature and extent of that loss is such amount as the fourth respondent shall be found to be liable to the applicants.

Mr Barclay's defence to Oliver Hume SEQ's statement of cross-claim 410 In his defence to Oliver Hume SEQ's statement of cross-claim filed 15 November 2013, Mr Barclay says, materially, that: 3. The cross-respondent does not know and cannot admit the allegations contained in paragraph 3 of the cross-claim and says further that such matters are a question of law to be determined by the Court. 4. As to the allegations contained in paragraph 4 of the cross-claim the cross-respondent: (a) does not admit the allegations in paragraphs 4(a) and says such matters are a question of law to be determined by the Court; (b) denies the allegations in paragraph 4(b), (c), (d), and (e); and (c) repeats and relies on the matters pleaded herein and in the cross-respondent's defence to the applicant's statement of claim filed 17 October 2013. 5. The cross-respondent denies all the allegations in paragraph 5 of the cross-claim for the reasons set out herein and in the cross-respondent's defence filed 15 November 2013. 6. Save as aforesaid the cross-respondent denies each and every allegation contained in the cross-claimant's cross-claim and repeats and relies on the cross-respondent's defence filed on 15 November 2013. 411 In my view this cross-claim can be dealt with swiftly. 412 In the absence of submissions of any detail in relation to these pleadings, I will treat the second statement of claim filed by Oliver Hume SEQ on 15 November 2013 as superseding (and, in effect, amending) the first statement of claim filed on 10 December 2012. 413 As a matter of law, I have found that Oliver Hume SEQ is liable to the second applicant in respect of the conduct of Mr Barclay concerning Lot 191. However it has not been established in the circumstances of this case that, other than Mr Barclay himself, anyone at Oliver Hume SEQ had any knowledge of the conduct of Mr Barclay which gave rise to the breach of fiduciary obligation by both Oliver Hume SEQ and Mr Barclay. 414 For reasons I canvassed earlier in this judgment, it cannot seriously be disputed that, by his conduct in respect of Lot 191, Mr Barclay breached not only his duty to the second applicant, but his duty to his employer Oliver Hume SEQ, of which he was also a director. 415 In my view this cross-claim succeeds and Oliver Hume SEQ is entitled to orders to that effect. I certify that the preceding four hundred and fifteen (415) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

Investa Properties Pty Ltd v Nankervis

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