KTC v David

Introduction 231 By orders dated 17 July 2020, the learned primary judge dismissed an interlocutory application by the Applicant for leave to file a proposed Further Amended Statement of Claim (FASOC) and summarily dismissed the proceeding against the Fourth and Fifth Respondents: see KTC v David (Summary Dismissal) [2020] FCA 1012. This is an application for leave to appeal from those orders. 232 The Applicant, KTC, submitted that the learned primary judge should not have dismissed the FASOC in circumstances where the subject matter of the dispute raises complex factual and legal issues and, in any event, a reasonable cause of action is disclosed on the pleadings. KTC also submitted that there are material facts relevant to the claim which are exclusively within the Respondents' knowledge. Accordingly, KTC contended that its claim should not be dismissed at this preliminary stage of the proceeding, as the evidence relevant to the question of whether the Respondents were knowingly involved in a dishonest and fraudulent design might only be obtained after the close of pleadings. 233 The Fourth and Fifth Respondents are Gilbert + Tobin, a law firm, and Mr Andrew Bullock, respectively. Mr Bullock was, at the relevant time, a partner of Gilbert + Tobin, specialising in the area of mergers and acquisitions, as well as the head of the firm's corporate advisory team. For convenience, I will refer to the Fourth and Fifth Respondents as G+T, collectively. 234 G+T submitted that there is no appellable error in the reasoning of the primary judge. To the contrary, G+T's position is that KTC's pleading of a dishonest and fraudulent design against G+T, under the second limb of the so-called rule in Barnes v Addy (1874) LR 9 CH App 244, suffered from fundamental deficiencies. 235 G+T submitted that KTC has had multiple opportunities to plead its case, including before the Supreme Court of New South Wales (see KTC v David (No 1) [2019] NSWSC 281) and this Court (see KTC v David (Summary Dismissal) [2020] FCA 1012 and KTC v David (Pleadings) [2019] FCA 1566). G+T submitted that having regard to the identified deficiencies in KTC's pleadings, and the repeated failures to address those issues, it fell well within the primary judge's discretion to refuse leave to amend and to dismiss the proceeding. Ultimately, G+T's principal contentions were: (1) that leave to appeal should not be granted; (2) if leave to appeal were to be granted, the appeal should nevertheless be dismissed; and (3) even if the substantive appeal were allowed, KTC should not be afforded yet another opportunity to recast or amend its pleading. 236 The Second Respondent (Mr Naveen Singh) and Third Respondent (XALT, a company of which Mr Singh is the sole director and shareholder) have a comparatively limited involvement in the appeal. In summary, the Second and Third Respondents only made submissions relevant to the question of whether, assuming the appeal is unsuccessful, the proceeding should be dismissed in its entirety (including as against the First, Second and Third Respondents) and not simply against G+T. 237 For the reasons that follow, I have concluded that leave to appeal should be granted and the appeal allowed.

Background 238 In the primary judge's reasons, his Honour explained at [2]: The background to the case appears in the earlier judgment and need not be repeated here: KTC v David (Pleadings) [2019] FCA 1566 ('First Reasons'). These reasons assume a working familiarity with the First Reasons… 239 I respectfully adopt the summary of the factual matters from the primary judge's First Reasons (KTC v David (Pleadings) [2019] FCA 1566) at [4]-[12]. Background to the dispute as pleaded 4 In around mid-2008, Charif and Tarek Kazal ('the Kazals') entered into a joint venture with the first defendant, Rodric David, in which they would each have respectively a 50% interest. The purpose of the joint venture was to invest in businesses with a particular focus either on businesses located in the United Arab Emirates and/or engaging in waste management and disposal. Mr David was to act as the manager of the joint venture. The joint venture vehicle was to be a Cayman Islands company, Emergent Capital Limited ('Emergent'). The Kazals held their interest in the joint venture vehicle through their entity, the present plaintiff KTC, and Mr David held his through his entity RAAL Limited ('RAAL'). KTC alleges that there was a joint venture agreement but this is not alleged to have been in writing. A number of terms are alleged in this agreement including that the Kazals and Mr David would be equally represented on the board of Emergent and that Mr David (and RAAL) would provide services to Emergent as necessary for its day to day operations. 5 It is then alleged that the joint venture vehicle Emergent invested in another joint venture with an Abu Dhabi developer. Ultimately, this investment was conducted through an entity called IPS (International Property Services) Limited. Emergent also invested in a waste management facility at Eastern Creek in Sydney ('the Waste Facility'). It is alleged by KTC that it was Mr David who managed Emergent's interests in these two businesses. 6 Originally, the directors of Emergent were Mr David on the one hand and the Kazals on the other. However, the Kazals between them had only one vote. Mr David acted as chairperson and also as chief executive officer. KTC and RAAL held the equity in Emergent in equal shares. 7 Returning then to the Waste Facility, it is alleged that in August 2008 the Kazals and Mr David identified it as a suitable investment. At that time, that business was being conducted by several entities all ultimately owned by Global Renewables Australia Pty Limited ('GRA'). Its managing director was Mr Singh, the second defendant to this proceeding. The pleading does not spell this out but there appears to have been a business proposal between Mr Singh and Mr David for Emergent and Mr Singh to form an entity to acquire GRA. This entity was known as Global Renewables Limited ('GRL'). GRL was owned as to 80% by Emergent and as to 20% by Mr Singh's vehicle, Singh Investments Pty Limited ('SIL'). GRL acquired all of the shares in GRA on or about 21 January 2009 for $1. Although the pleading does not appear to allege this, there is material which suggests that GRL also took over GRA's debt to the Commonwealth Bank of Australia. 8 There are then a number of allegations which are not necessary to recite in any detail but whose bottom line may be summarised in this way: the operation of the Waste Facility required funding which was provided by Mr David and RAAL through Emergent. It was Mr David who injected his funds into Emergent in a variety of ways over time. By 13 November 2009, RAAL claimed that Emergent owed it $5.8 million as a result of these advances. At this point there appears to have been some friction between the Kazals and Mr David about the desirability of them putting in some of KTC's money or, if not, of increasing RAAL's interest in Emergent to reflect the fact that Mr David was putting his hand in his pocket whereas the Kazals were not. In June 2009, Mr David had caused to be drafted a proposed memorandum of understanding between RAAL and KTC under which some of the money advanced by RAAL to Emergent was to be acknowledged by KTC. More importantly, under the proposed memorandum of understanding KTC would agree to cause Emergent to transfer 80% of its shareholding in GRL to RAAL for consideration of $1, which would then be transferred to KTC if it injected $2 million into Emergent before 1 September 2009. Mr David signed the memorandum on or around 17 June 2009 but the Kazals refused to execute it, eventually making this clear on or around 13 November 2009. Interpolating, at this point, the scene was set for a shareholder dispute between the Kazals and Mr David. 9 The draft memorandum itself had been prepared by G+T who had been retained by GRL. Subsequently, in November 2009, G+T advised RAAL and Emergent (inter alia) on how the proposed memorandum of understanding might otherwise be given effect to since the Kazals would not execute it. It is alleged that this involved the appointment of a Mr Mavromanalakis to the board and the idea of swapping some of RAAL's debt for equity in Emergent. Mr Mavromanalakis was appointed to the board on 13 November 2009 which was, it might be noted, the same day that the Kazals said they would not execute the proposed memorandum of understanding. On 20 January 2010, RAAL and Emergent executed a loan agreement which recorded advances by RAAL to Emergent of $5,837,009.04. The following day, 21 January 2010, RAAL demanded payment of US$49,000 from Emergent (a much smaller amount) and informed Emergent that if this sum was not paid within seven days then it would accept payment instead in the form of 49,900 shares in Emergent. 10 The Kazals deny being aware of this demand. There was a meeting of the directors of Emergent on 28 January 2010, that is to say, at the exact time the seven-day period in RAAL's demand expired. The Kazals say that they were not aware that at this meeting there would be under consideration the proposal that Emergent issue 49,900 shares to RAAL in consideration of the satisfaction of Emergent's indebtedness to RAAL. The only persons at the meeting were, in fact, Mr David and Mr Mavromanalakis and the meeting itself was conducted by telephone. Both voted in favour of the resolution. Consequently, KTC's interest in Emergent was reduced from 50% to 0.1% and RAAL's correspondingly increased from 50% to 99.9%. However, because the debt to RAAL was $5,837,009.04, this debt for equity swap - whilst transforming the share register of Emergent - only reduced Emergent's debt to RAAL by 0.93%. If true, RAAL kept almost all of its debt and obtained almost complete control of the company. It is a transaction which might well cause eyebrows to be raised but, if the allegations be correct, as will be seen, it has done more than that. 11 KTC says that the Kazals became aware of this transaction on 18 March 2010 and that Mr David and Mr Mavromanalakis voted to remove them as directors on 29 March 2010. 12 A large number of transactions are then alleged to have occurred but their detail can be omitted. Their terminus is that the Waste Facility passed through several hands and that Mr Singh made a very large profit. In subsequent proceedings between KTC and RAAL in the Grand Court of the Cayman Islands, it was held that the debt for equity swap brought about by Mr David and RAAL was done in breach of fiduciary duty. 240 Self-evidently, the background relevant to this appeal is complex and detailed. That is due to both the multiplicity of actors and the corporate structures involved, and the number and nature of the impugned transactions. In what follows, it becomes apparent that a detailed understanding of the factual matrix is integral to properly evaluating the adequacy of the FASOC.

Primary Judge's Reasons 241 At [3], the primary judge said that there were three broad issues to consider in relation to the FASOC: (1) Whether, as against G+T, the David GRL Share Conduct and the RAAL GRL Share Conduct have been adequately pleaded [the GRL Share Conduct issue]; (2) Whether, as against G+T, the David ECL Share Conduct and the RAAL ECL Share Conduct have been adequately pleaded [the ECL Share Conduct issue]; and (3) Whether, as against G+T, the RAAL and David Constructive Trust Fraudulent Scheme have been adequately pleaded [the Constructive Trust Fraudulent Scheme issue]. 242 The primary judge considered the GRL Share Conduct and ECL Share Conduct issues (items (1) and (2) above) concurrently at [6]-[24]. ISSUES RELATING TO GRL AND ECL SHARE CONDUCT 6 According to Exhibit 1, GRL is a company registered pursuant to the law of the Cayman Islands (s17(a)). Initially it had two shareholders, the joint venture vehicle Emergent (80 shares) and Mr Singh's company, SIL (20 shares) (s17(b)). On or about 21 January 2009 GRL acquired all of the share capital in GRA (s17(e)). GRA was the holding company of a group of companies which owned and operated the Eastern Creek waste management facility in Sydney (s14). As at 21 January 2009 the joint venture vehicle Emergent was equally held by the Kazals (through their vehicle KTC) and Mr David (through his vehicle RAAL) (s13(b)). 7 On 22 April 2010 the directors of GRL (being Mr Singh and Mr David) resolved to issue 60 ordinary shares in GRL to SIL (s41) ('the GRL Share Resolution'). The shares were issued on 30 July 2010. On 23 April 2010 Emergent and SIL entered into a shareholders' agreement. The basic allegation KTC makes against Mr David and Mr Singh is that these GRL shares were allotted for no consideration (s44). It is then said that the transaction diluted Emergent's interest in GRL (and consequently Emergent's interest in the waste management facility) from 80% to 50% thereby divesting Emergent of a 30% interest (s46). In effect the 80:20 joint venture between the Kazals and Mr David, on the one hand, and Mr Singh, on the other, became a 50:50 joint venture. 8 Because Mr David is the owner of RAAL the pleading makes parallel allegations against the entity which are structurally identical. Except where the context otherwise demands, I will dispense with any further reference to RAAL as the analysis for present purposes is the same as that which obtains in the case of Mr David. 9 The pleading alleges that Mr David's role in procuring the issue of the 60 ordinary shares in GRL to Mr Singh's company SIL was a breach of fiduciary duty which constituted a fraudulent and dishonest scheme (ss78, 82). That fiduciary duty is alleged to have been owed to KTC (s18). Relief is sought against Mr Singh (and a company associated with him XALT Pty Ltd), Mr David and G+T. In the case of Mr Singh relief is sought on the basis that he knowingly assisted in Mr David's fraudulent and dishonest scheme (ss65, 87, 88). His company XALT Pty Ltd is said to be liable as a knowing recipient in relation to certain funds (ss90-96). 10 In relation to G+T the case is that it knew that it was engaged in conduct to further Mr David's dishonest breach of fiduciary duty in causing GRL to issue the 60 shares to SIL (s99). That allegation is linked back to ss74, 75 and 76. s74 concerns allegations of the knowledge of Mr Bullock and s75 and s76 allege that this knowledge had certain qualities. One of the pleadings under attack, s74(m), is therefore concerned with that part of the case in which it is sought to demonstrate that Mr Bullock knew of certain matters. 11 Particular (ii) to s74(m) alleges that Mr Bullock advised upon two shareholders' agreements between Emergent and SIL. The first of these was dated 24 November 2009 ('the First Purported GRL Shareholders' Agreement'). Its existence is not pleaded as a material fact but its contents are described in the particulars to s62(n). s62(n) alleges that Mr Singh knew that SIL paid no consideration for the issue of the shares or alternatively only paid colourable or illusory consideration. The particulars to s62(n) are a complex pleading in themselves and really have no place in particulars. Their bottom line is this: the First Purported GRL Shareholders' Agreement between Emergent and SIL of 24 November 2019 provided for the issue to SIL of redeemable preference shares but this was unlawful because it had not been authorised by Emergent's board. On or around 23 April 2010 that agreement was then replaced by the second shareholders' agreement ('the Second Purported GRL Shareholders' Agreement') which made no reference to the redeemable preference shares. It is not alleged that the issue of the 60 ordinary shares occurred pursuant to the second shareholders' agreement only that the agreement 'refers' to the issue. The actual dispositional event in relation to the 60 ordinary shares is the GRL Share Resolution of 22 April 2010 with the allotment envisaged by the resolution occurring on 30 July 2010 ('the GRL Share Issue'). 12 It is alleged by KTC that the allotment of shares was for no consideration or a consideration which was illusory or colourable. It is alleged that Mr David and Mr Singh breached fiduciary duties in resolving to allot the 60 shares and that this was part of a dishonest design. Part of the design involved the alleged fact that the allotment of the shares to Mr Singh's company, SIL, was for no consideration or for a consideration which was illusory or colourable. For the balance of these reasons I will only refer to this allegation as an allegation that the allotment was for no consideration since for present purposes there is no difference between no consideration or consideration which is colourable or illusory. The dishonest design culminated in the allotment whose effect was to increase Mr Singh's interest in GRL (through his entity SIL) from 20% to 50% and to decrease Emergent's interest from 80% to 50%. 13 G+T is alleged to have acted for GRL, Emergent (the joint venture vehicle between Mr David and the Kazals), Mr David and his entity RAAL. G+T is alleged to have participated in Mr Singh and Mr David's dishonest design with the requisite degree of knowledge to be liable as an accessory. Two particular allegations which are made against G+T are that: (1) it advised that the allotment of the 60 shares to SIL was lawful (s72(e)); and (2) it knew that the allotment had been for no consideration (s74(m)). 14 G+T submits that the manner in which these two allegations have been particularised are not adequate. KTC alleges that the fact that G+T advised that the allotment would be lawful can be inferred from two facts (found in the particulars to (s72(e)): (1) G+T had been retained to advise in relation to and draft a series of transaction-related documents which preceded the allotment; and (2) One of those documents, 'the Second Purported GRL Shareholders' Agreement' referred to the issue of the GRL shares. 15 G+T submits that such an inference cannot be drawn from these two facts. It is necessary to deal with the transactional documents laid out in the particulars of s72(e) individually before assessing the validity of the submission. There were seven of the documents as follows, including the two shareholders' agreements I referred to above: (1) The 6 January 2009 Draft Terms Sheet. KTC alleges that this document embodied the actual way in which Emergent and SIL had been conducting the business of GRL since January 2009 (s62(n) particular (v)). The pleading does not allege what the arrangement embodied in this document was; (2) The later Draft GRL Shareholders' Agreements. These too are alleged to be the documents which embodied the actual way in which Emergent and SIL had been conducting the business of GRL since January 2009 (s62(n) particular (v)). As in the case of (1) the pleading makes no allegation about the content of these agreements nor does it indicate how they differed from the document in (1). From a pleading perspective (1) and (2) appear to be identical and I will treat them as such; (3) The April 2009 Draft GRL Shareholders' Agreement. The only allegation that the pleading makes about this document is that it was put before the board of Emergent on 13 November 2009 who resolved to fast track and finalise the review and signing of it (s62(n) particular (ii)). In particular, the pleading makes no allegation about the contents of this document; (4) The First Purported GRL Shareholders' Agreement. KTC alleges that this document was purportedly executed by Mr David, on behalf of Emergent and GRL on 24 November 2009 and that it differed from the document in (3) (s62(n) particular (iii)). This document is alleged to have contained a cl 9 which conferred upon SIL an entitlement to redeemable preference shares in GRL. It is alleged (s62(n) particular (iii)) that this agreement was not authorised by the board of Emergent and that no independent advice was given to the board; (5) The March 2010 Draft GRL Shareholders' Agreement. KTC alleges that in or around March 2010 a further draft shareholders' agreement was prepared. It is alleged that it contained a recital 1A (s62(n) particular (iv)). It is alleged recital 1A of this document had referred to the document in (4) as a prior agreement between the parties but that this had been expressly deleted and replaced instead with an assertion that Emergent and SIL had been conducting the business under 'an existing shareholders' agreement' since the completion of the purchase of GRL in January 2009. However, s62(n) particular (v) asserts that there was no such existing shareholders' agreement, only documents (1) and (2) above; (6) The Second Purported GRL Shareholders' Agreement. The pleading alleges that on 23 April 2010 Emergent and SIL purported to execute a further shareholders' agreement (s62(n) particular (vi)). It is alleged that this agreement did not confer any entitlement on SIL to redeemable preference shares and made no reference to the first shareholders' agreement in (4). It is also alleged that like the document in (5) it incorrectly referred to the fact that the business was being conducted under an 'existing shareholders' agreement' since January 2009. At s72(e) particular (ii) it is also alleged that this document 'refers' to the fact of the allotment of the 60 shares although the pleader goes no further than saying it is referred to. It does not allege, for example, that the allotment was required under the agreement; and (7) The GRL Share Issue. This is alleged to be the issue of the 60 ordinary shares on 30 July 2010 (s41). As such it is not a document but rather an event recorded, presumably, in the records of GRL. 16 On the assumption that G+T was retained in relation to each of the above documents and advised upon them, G+T submits that it is not possible to infer that G+T gave advice that the allotment was lawful as the pleading alleges at s72(e). The only documents which the pleading alleges actually involve the allotment of the 60 ordinary shares are documents (6) and (7), that is to say, the Second Purported GRL Shareholders' Agreement executed on 23 April 2010 and the GRL Share Issue itself. As I have noted, an additional fact alleged about the Second Purported GRL Shareholders' Agreement is that it 'refers' to the allotment of the 60 ordinary shares. I do not see conceptually how documents (1)-(5) can throw light on the question of whether G+T gave advice about an allotment of shares to which none refers or any envisions. Without knowing what the document in (6) actually says about the allotment of the 60 shares (beyond the fact it 'refers' to it), I do not see how advice about that document or the preparation of it could support an inference that advice would have been proffered by G+T that such an allotment would be lawful. 17 Making the assumption that G+T were asked to advise on and draft documents (1) to (7), I do not see how it can be inferred from them that G+T would have advised that the allotment was lawful. I do not think that the situation becomes any better considering (6) and (7) cumulatively or even, most beneficially, as somehow informed by the back history which was (1) to (5). If (1)-(7) were the facts found at trial I would commit appellable error if I inferred from them that G+T advised that the allotment was lawful. 18 KTC submitted that its argument about what could be inferred from the drafting of the documents by G+T could be aided by the fact that Mr Bullock was an expert in the area of mergers and acquisitions and the head of G+T's corporate advisory team and had been responsible for drafting the documents. But the drafting of the documents goes nowhere and the fact that Mr Bullock is a subject-matter expert does not really improve the situation. 19 I accept G+T's submission that s72(e) is not adequately supported by the subscribed particulars to it. I should add for completeness that as I note below the pleader appears to have overlooked including the allegation that G+T advised on and drafted the GRL Share Resolution (that is the directors' resolution to allot the shares on 22 April 2010). I say overlooked because that allegation is included as one of the particulars to s74(m). Assuming for the sake of argument that the GRL Share Resolution was taken also to be a particular to s72(e), it does not alter the analysis. The fact that G+T was retained to prepare and advise on the GRL Share Resolution does not permit one to infer what aspect they were asked to advise upon or what their advice was. 20 Dealing then with KTC's allegation that G+T knew that the allotment had been for no consideration, this appears at s74(m) of the pleading. It is supported by two particulars. The first of these is that G+T had been retained by GRL and advised GRL and Emergent on GRL's funding by RAAL and KTC. The pleading does not specify what was involved in 'GRL's funding by RAAL and KTC' but it is clear from several places that it assumes that KTC and RAAL did provide funding to GRL. For example, at s38(d) it is said in some particulars that GRL was at risk in November 2009 of being wound up unless KTC and RAAL provided funding. At many places it is alleged that Mr Bullock was advising GRL in relation to these funding activities: s62(g) particular (iii), s62(h) particular (iii), s62(i) particular (iii), s74 (the particulars of many sub-paragraphs including (m)). I do not see how the fact that Mr Bullock was providing advice to GRL on the continuation of funding from KTC and RAAL can rationally advance a case that G+T knew that a subsequent allotment of the 60 ordinary shares by GRL to SIL was for no consideration and I therefore do not accept that particular (i) to s74(m) can sustain the allegation in support of which it is proffered. 21 Turning then to the second particular for the allegation that G+T knew the allotment had been for no consideration, the pleader essentially repeats the same matters as was said to support the contention that G+T had advised that the allotment was lawful. There is a qualification to that. The particulars to that allegation did not allege that G+T had been retained to draft and advise upon the GRL Share Resolution of 22 April 2010 which had authorised the allotment although it had alleged that G+T had been retained to draft and advise upon the allotment itself (although what that drafting involved was unclear). It will be recalled that my analysis of s72(e) above proceeded on the assumption that this was an oversight. In this section of the pleading the polarity is reversed and it is now alleged that G+T advised upon and drafted the GRL Share Resolution but not the allotment, that is, the GRL Share Issue. I am going to treat this as an example of the pleader being caught by his or her own defined terms and proceed on the basis that it was intended to refer to both the resolution and the allotment for both sets of allegations. 22 I am prepared to do this as it makes no difference. Just as I cannot see how an inference can be drawn from these matters that G+T advised that the transaction was lawful, I cannot see how an inference could be drawn that G+T knew that the allotment was for no consideration. My reasons for this in the case of s74(m) are the same as those I have given in relation to s72(e). 23 KTC submitted that the situation was helped by the fact that s74(m) cross-referenced the particulars to s62(n) but this is merely the allegation that Mr Singh knew there was no consideration for the share allotment. It is true that there are subscribed to s62(n) an elaborate series of 'particulars' which explore the theory that the consideration for the 60 ordinary shares was Mr Singh's forbearance on the entitlement of SIL to the redeemable preference shares. The particulars to s62(n) in fact just recite the very same documents set out above so even if it were permissible to have recourse to these particulars, they are in fact the same as the particulars to s74(m). In any event, the pleading of s62(n) wholly fails to observe the distinction between allegations of material fact and particulars which is not a question of taste but a legal requirement this pleading repeatedly flouts: Federal Court Rules 2011 (Cth) r 16.02(1)(d). For completeness, KTC's written submissions advanced an argument at [19]-[20] that the first and second shareholders' agreements were not valid because entry into the first shareholders' agreement had not been authorised by Emergent's board. KTC contended that Mr Bullock must have known that the Emergent board had not authorised entry into the first agreement and therefore that SIL acquired no rights under it or the second shareholders' agreement that replaced it. I am not prepared to read a cross-reference at the end of one set of particulars to another set of particulars as including central allegations of material fact. 24 I therefore accept G+T's submission that the allegation that G+T knew that there was no consideration for the allotment is not maintainable. The parties both proceeded on the basis that the issues which arose in relation to the ECL Share Conduct were the same. I will act on that assumption too. 243 The primary judge then addressed the adequacy of the pleading in relation to the Constructive Trust Fraudulent Scheme at [25]-[41]. WHETHER THE PLEADING OF THE CONSTRUCTIVE TRUST FRAUDULENT SCHEME IS ADEQUATE 25 At s145 is it alleged against G+T that by giving the 'G+T Legal Advice', by giving the advice that it was lawful to make the Emergent and GRL share issues and by assisting in preparing the documentation to effect those transactions, G+T assisted RAAL with 'the Constructive Trust Fraudulent Scheme'. The consequence of the conclusions in the preceding section is that the allegation that G+T advised that the Emergent and GRL share issues were lawful is not maintainable. Consequently, an assessment of s145 must proceed on the basis that those two allegations are not present. 26 The allegation is therefore reduced to one where it is said that G+T assisted RAAL with the Constructive Trust Fraudulent Scheme only because it gave the G+T Legal Advice and prepared the documentation to effect the Emergent and GRL share issues. 27 What was the Constructive Trust Fraudulent Scheme? s129 tells one that the scheme was the one described in s128. Here one must return to the Emergent share issue to understand what the pleader is driving at. That share issue is at the heart of the shareholder dispute between the Kazals and Mr David in the affairs of their joint venture vehicle, Emergent. As I explained in my earlier reasons, Mr David was putting money into Emergent but the Kazals allegedly were not and, in due course, this generated some tension between them. On or around 20 January 2010 Emergent and Mr David's company RAAL executed a loan agreement that recorded that RAAL had leant Emergent $5,837,009.04 (s25). KTC alleges that this was done without the Kazals being informed that this was to occur and in circumstances where they disputed that those funds had been advanced by RAAL (s26). On 21 January 2010 RAAL demanded payment of $54,016 (USD49,900) from Emergent (as part of the amount owed) and indicated that if that sum were not paid within seven days it would accept USD49,900 worth of fully paid ordinary shares in Emergent in satisfaction of that sum (s27). 28 On 22 January 2010 Mr David called a meeting of the directors of Emergent. KTC alleges that they were not told about the loan agreement or the letter of demand (s29) although it does not say that they were not told about the meeting. The meeting occurred on 28 January 2010 but the Kazals did not attend (ss30-31). At the meeting, the two directors present - Mr David and a Mr Mavromanolakis - voted in favour of issuing the 49,900 ordinary shares to RAAL (s31). The effect of this was to turn what had been a 50:50 joint venture vehicle into one where Mr David controlled (through RAAL) 99.9% of the shares in Emergent with the Kazals controlling 0.1% (s39). It is this transaction which the pleader refers to as the Emergent share issue. 29 KTC's primary case is that this has caused it loss. However, at s125 it pursues a case in the alternative which is premised upon a contention that the shares in Emergent that RAAL obtained as a result of the Emergent share issue were held by it as a constructive trustee for KTC. At s127 it is then said that RAAL, as a constructive trustee, was obliged to transfer the 49,900 shares to KTC and not to use its ownership of those shares to the detriment of KTC. In various ways, including by not transferring the shares and by allowing the GRL share issue to proceed, RAAL is said to have breached these duties (s128). 30 Although the allegations of breach are not alleged to be dishonest in s128 the pleader doubles back at s129 and alleges that they constituted a dishonest and fraudulent design. In the same paragraph the pleader then christens these events the Constructive Trust Fraudulent Scheme. At ss131-133 Mr David is said knowingly to have assisted in the scheme. Mr Singh suffers the same fate at ss134-136 and one of his companies (XALT Pty Ltd) is alleged to have been in knowing receipt of trust property at ss137-143. 31 Which brings one back to G+T and Mr Bullock who at ss144-147 are said knowingly to have assisted in the scheme. On the present application G+T continued to rely upon the apparent inconsistency between alleging that G+T had advised the Emergent share issue was lawful whilst simultaneously alleging that it was part of a dishonest design in which the solicitors were complicit. However, as I have already indicated, having been persuaded that the allegation that G+T advised that the Emergent share issue was lawful cannot be maintained, that argument drops away. 32 It is an interesting question whether the claim of knowing assistance which is left - based only on the G+T Legal Advice and the preparation of the transactional documents - can succeed. However, G+T made no submission about this. 33 The G+T Legal Advice is set out at s23. In essence it is that Mr Bullock and G+T advised RAAL and Emergent and their directors (aside from the Kazals) that Mr David had to do everything possible to protect Emergent so as to protect RAAL's investment in Emergent, that RAAL had to demand repayment of its loans to Emergent and if Emergent did not meet the demand then it had to dilute KTC's shareholding in Emergent; also, that this was the right and legal thing to do. This is the assistance alleged to have been given together with the drafting of the documentation. 34 At s146 it is then alleged that Mr Bullock and G+T knew of the Constructive Trust Fraudulent Scheme and knew they were involved in dishonest breaches of trust as part of the scheme. Why? Because of the matters in ss74-76. 35 G+T complain about two aspects of this. First, they submit that some attention has to be given to the role of Mr Mavromanolakis. He was the director who with Mr David voted at the directors' meeting of Emergent in favour of the Emergent share issue. He was appointed to the board of Emergent on 13 November 2009 (s22). At s38(d) it is said that Mr David procured Mr Mavromanolakis' support for the Emergent share issue. It is alleged that Mr Mavromanolakis was told that Emergent faced an urgent funding crisis and was at risk of being wound up if RAAL ceased to provide financial support. 36 G+T points out that it is not alleged that this information provided to Mr Mavromanolakis was false or that Mr Mavromanolakis had acted improperly in voting in favour of the Emergent share issue in reliance upon it. G+T asks rhetorically how can the scheme have been fraudulent when it is neither alleged that Mr Mavromanolakis was lied to nor that he was involved in the fraudulent scheme? 37 Although this seems like a small point when cast against the maelstrom of allegations made in Exhibit 1, I am inclined to accept that it is a sound one and that much of the maelstrom serves only to distract attention from the central allegation which inevitably involves Mr Mavromanolakis. The short of the allegations is this: there were three directors of Emergent, one of the Kazals, Mr David and Mr Mavromanolakis. Mr David and one of the Kazals were each representing their 50% interest in the joint venture embodied in Emergent and Mr Mavromanolakis was an independent director. As at November 2009 Mr David was complaining that Emergent owed him money and that the Kazals were not putting in their fair share. Although it is alleged that the debt Mr David claimed was disputed, it is not disputed that he was complaining about it. A board meeting was held. The Kazals did not attend. It is not suggested that they were prevented from attending. Mr David had previously told Mr Mavromanolakis that he was no longer willing to fund Emergent and if he withdrew his funding Emergent might be wound up. KTC says it was not told that this proposal was on the table. Again, however, that does not prove dishonesty. It was raised at a board meeting to which they were invited. Perhaps in retrospect the Kazals regret the decision not to attend that board meeting but that sense of regret cannot impermissibly be conflated with the proposition that Mr David had acted dishonestly in not telling them he was going to raise it. And even if it could, it is rendered irrelevant by the events at the meeting. 38 Mr David suggested to Mr Mavromanolakis that he should agree to meet the RAAL demand for payment by issuing the shares in Emergent. The decision to issue the shares may well have involved a breach of fiduciary duty (as the Grand Court of the Caymann Islands concluded in related proceedings) but it is hard to describe what happened as dishonest. Highhanded perhaps, aggressive certainly, but dishonest it does not appear to me to be. If it were alleged that Mr David had duped Mr Mavromanolakis then a case of dishonesty might come into view. But that is not alleged. If Mr David in fact had had no intention of winding up Emergent similar considerations might have arisen. But all Mr David is alleged to have done, when all is said and done, is to use his status as a substantial (although on the pleadings, disputed) creditor to strongarm Mr Mavromanolakis into a provocative debt for equity swap. Although I would not describe that as nice, I am unable to see how it was dishonest. 39 Once that conclusion is reached, the fabric frays from the edge as the thread comes undone. The board meeting is the centre piece of the Emergent share issue; it is not peripheral. If there was a dishonest scheme (as opposed to a brutal one) then its critical element was the board meeting for everything else flows from it. Once control of Emergent was delivered to RAAL by the events of the directors' meeting, what occurred with GRL follows trivially. Maybe Mr David used his control to effect the transaction with Mr Singh which delivered an increased share of GRL to SIL. Maybe this was a further outrage on KTC. But on the hypothesis that Mr David had obtained control of Emergent by brutal rather than dishonest means (and accepting for the sake of argument that it most likely involved a breach of fiduciary duty) it is impossible coherently to imagine what was dishonest in using that power in relation to GRL. Granted that the Emergent share issue is a transaction which is apt to raise eyebrows, the problem is that I cannot understand how it can be said to be a dishonest scheme unless Mr Mavromanolakis is said to have been lied to or, alternatively, himself to have been in on it. But neither allegation is made. 40 It follows that I accept G+T's submission that the dishonest scheme alleged by KTC is fundamentally incoherent. I do not accept KTC's submission that the dishonesty of Mr David (and implicitly of G+T) is to be assessed against what is alleged against them rather than by reference to Mr Mavromanolakis. That submission seeks to reduce the role of Mr Mavromanolakis in the dishonest scheme and to make him a non-essential or at least peripheral participant. In fact, the entire scheme hinged on him. If the scheme was not dishonest in relation to Mr Mavromanolakis then the rest of KTC's case makes no sense. Nor is it to the point that it is alleged that G+T knew that Mr David had procured Mr Mavromanolakis's support. Again this brings into focus the critical issue which is not whether Mr David procured Mr Mavromanolakis' support but how he did so: did he do it with deceit or blunt force? There is no allegation of deceit and every appearance of blunt force. 41 In that circumstance, I do not need to deal with G+T's submission that it is not alleged that G+T knew that the value of the Emergent shares was far in excess of the US$49,900 that Mr David appears to have paid for it. 244 Having regard to the foregoing, and the many opportunities which KTC has had to plead its claim, the primary judge concluded as follows: 42 I am not satisfied that I should grant leave to KTC to rely upon Exhibit 1 and I refuse it leave to do so. Insofar as G+T and Mr Bullock are concerned, KTC has had three attempts at pleading this case. After the first attempt, Kunc J gave them one more opportunity; I declined that opportunity but afforded them one final chance. KTC's continuing inability to plead the case is a potential marker that it does not have a case against G+T. Accordingly, I dismiss the proceeding against them. KTC is to pay G+T's costs as taxed, assessed or agreed.

Grounds of appeal 245 By a draft Notice of Appeal dated 31 July 2020, KTC raises 16 grounds of appeal. Conflation of issues in connection with the "ECL Share Conduct" and the "GRL Share Conduct" 1. The primary Judge erred in holding that both parties had proceeded on the basis that the issues which arose in relation to the "ECL Share Conduct" were the same as those which arose in relation to the "GRL Share Conduct". 2. The primary Judge should have proceeded on the basis that the issues which arose in relation to the "ECL Share Conduct" were not the same as those which arose in relation to the "GRL Share Conduct" and considered each of the issues which arose in relation to the "ECL Share Conduct" separately. Dishonesty of ECL Share Issue 3. The primary judge erred in holding that the proposed further amended statement of claim (ASOC) did not disclose a reasonable cause of action that the conduct concerning the ECL Share Issue constituted a dishonest and fraudulent scheme unless it was alleged that Mavro was lied to or "duped" or, alternatively, was himself alleged to be liable in respect of the scheme. 4. The primary judge erred in holding that, although the conduct concerning the ECL Share Issue pleaded in ASOC may well have been a breach of fiduciary duty and merited such descriptions as "high-handed perhaps", "aggressive certainly" and "brutal", it was not dishonest. 5. The primary judge ought to have held that ASOC disclosed a reasonable cause of action that the conduct concerning the ECL Share Issue constituted a dishonest and fraudulent scheme. Constructive Trust Fraudulent Scheme 6. The primary judge erred in failing to hold that, irrespective of whether or not the conduct concerning the ECL Share Issue constituted a dishonest and fraudulent scheme, ASOC, [128] disclosed a reasonable cause of action that the conduct alleged therein constituted a dishonest and fraudulent design or scheme. 7. The primary judge ought to have held that ASOC, [128] disclosed a reasonable cause of action that the conduct alleged therein constituted a dishonest and fraudulent design or scheme Advice that it was lawful to make the GRL Share Issue 8. The primary judge erred in holding that the particulars to ASOC, 72 were inadequate to support an inference that G+T advised that it was lawful to make the GRL Share Issue. 9. The primary judge ought to have held that ASOC, 72 including the particulars disclosed a reasonable cause of action that G+T advised that it was lawful to make the GRL Share Issue. Assistance in preparing the documentation to effect the GRL Share Issue 10. Irrespective of whether any advice was given by G+T as alleged in ASOC, , the primary judge erred in failing to hold that ASOC, pleaded a reasonable cause of action that G+T assisted in preparing the documentation to effect the making of the GRL Share Issue so as to found liability for knowing assistance on the part of G+T on that basis. 11. The primary judge ought to have held that the allegation in ASOC, that G+T assisted in preparing the documentation to effect the making of the GRL Share Issue disclosed a reasonable cause of action against G+T so as to found liability for knowing assistance on the part of G+T on that basis. G+T's knowledge that the GRL Share Issue was for no consideration 12. The primary judge erred in holding that the particulars to ASOC, were inadequate to support an inference that the fifth respondent (Bullock) knew that the GRL Share Issue was for no consideration. 13. The primary judge ought to have held that ASOC, including the particulars disclosed a reasonable cause of action that Bullock knew that no consideration was paid for the GRL Share Issue. 14. The primary judge erred in holding that the particulars to ASOC, ought to have been pleaded as allegations of material fact. Dismissal of application to amend the claims against the first to third respondents 15. The primary judge erred in not granting leave to file ASOC in so far as it addressed KTC's claims against the parties to the proceeding who did not oppose the granting of leave being the first, second and third respondents. 16. The primary judge ought to have granted leave to file ASOC in so far as it addressed KTC's claims against the first, second and third respondents. [Footnotes omitted] 246 At the outset, there are three relevant matters to note in relation to the draft Notice of Appeal. First, in most instances, defined terms in the draft Notice of Appeal have the meaning assigned to them in the FASOC. Importantly, however, the ECL Share Conduct and GRL Share Conduct are definitions used by the primary judge and are not defined terms in the FASOC. Second, it will be apparent that many of the grounds of appeal are interrelated. Accordingly, where it was appropriate to do so, I have avoided unnecessary duplication and expressed my reasons by reference to views expressed in relation to other grounds of appeal. Third, there was a miscorrelation between the numbering of the grounds of appeal in the draft Notice of Appeal and the numbering used in the parties' respective written submissions. More specifically, the submissions in relation to grounds 10 and 11 were mistakenly grouped under grounds 12 to 14 and vice versa. For convenience, I have adopted the numbering from the draft Notice of appeal in these reasons.

Leave to appeal 247 The decision of the primary judge was an interlocutory judgment. Accordingly, leave to appeal is required pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth). 248 At the commencement of the hearing, the learned presiding judge indicated that the Court would hear submissions from the parties in relation to the substantive appeal and address the question of leave in the course of delivering written reasons. 249 It is well established that there are two considerations governing the Court's discretion to grant leave to appeal in circumstances such as the present. These considerations were summarised by Stewart J in Coshott v Official Trustee in Bankruptcy, in the matter of the Bankrupt Estate of Michael Petrovic Lenin (deceased) [2019] FCA 913 at [28]-[30]: The principles to be applied in determining an application for leave to appeal are stated in Bienstein v Bienstein [2003] HCA 7; 195 ALR 225 per McHugh, Kirby and Callinan JJ at [29] as follows: An applicant for leave must establish that the decision in question is attended with sufficient doubt to warrant the grant of leave. The applicant must also show that substantial injustice will result from a refusal of leave to appeal. Therefore, there are two considerations. First, whether in all the circumstances of the case, the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and second, whether substantial injustice would result if leave were refused supposing the decision to be wrong. These two criteria, however, do not represent a "hard and fast rule" (Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 at [29] per Dowsett, Foster and Yates JJ), but they nevertheless provide "general guidance which the Court should normally accept" (Rawson Finances Pty Ltd v Federal Commissioner of Taxation [2016] FCAFC 95; 103 ATR 630 at [39] per Robertson, Moshinsky and Bromwich JJ). [Emphasis added] 250 These principles are derived from Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; 33 FCR 397 at 398 (Sheppard, Burchett and Heerey JJ) and have been cited with approval by the Full Court of this Court on many occasions: see, eg, Davidson v Official Receiver [2021] FCAFC 73 at [15] (Allsop CJ, Markovic and Anastassiou JJ); Advanced Holdings Pty Ltd v Commissioner of Taxation [2020] FCAFC 157; 281 FCR 149 at [35] (Steward J, with whom Allsop CJ and Bromwich J agreed). 251 KTC contended that the draft Notice of Appeal enumerates 16 reasonably arguable grounds of appeal, which itself demonstrates the orders of the primary judge are, at a minimum, attended by sufficient doubt to warrant being reconsidered by the Full Court. In this regard, KTC submitted that the pleading concerns novel questions of law that are incapable of being resolved on hypothetical facts, those facts themselves involving considerable complexity. 252 KTC further submitted that because the orders of the primary judge have the practical effect of finally determining their claims against G+T, there is a prima facie basis for granting leave to appeal. In particular, KTC referred to the observations of the High Court in Ex parte Bucknell [1936] HCA 67; 56 CLR 221, in which Latham CJ, Rich, Dixon, Evatt and McTiernan JJ said at 225-226: It is apparent that many different considerations may be raised by cases in which leave only is needed and that all the grounds upon which applications may succeed cannot be stated in advance. It is possible, however, to say how certain types of cases should be dealt with. But any statement of the matters which would justify granting leave to appeal must be subject to one important qualification which applies to all cases. It is this. The court will examine each case and, unless the circumstances are exceptional, it will not grant leave if it forms a clear opinion adverse to the success of the proposed appeal. There is one class of case which raises little difficulty. If the interlocutory order…has the practical effect of finally determining the rights of the parties, though it is interlocutory in form, a prima facie case exists for granting leave to appeal. For example, a judgment for either party on a demurrer might, in effect, be decisive of the whole litigation. Although such a judgment would often be interlocutory, it might be final in determining the issue between the parties, and, in such a case, leave would be granted almost as of course. [Emphasis added] 253 KTC also referred to the following observations of the Full Court in Décor at 400: … When the court comes to exercise its discretion on a particular application, an important distinction to be observed is that between the common interlocutory decision on a point of practice - concerning which the High Court has given (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 171) a strong warning that "a tight rein" should be kept on appeals - and an interlocutory decision determining a substantive right - where leave will more readily be granted… [Emphasis added] 254 KTC also referred to a decision of the New South Wales Court of Appeal in which Bucknell had been cited with approval, being Aardwolf Industries LLC v Tayeh [2020] NSWCA 301 at [54] (Macfarlan JA), Bell P agreeing at [1], Leeming JA agreeing at [87]: Although I have, for the reasons set out below, concluded that the primary judge did not err in refusing to grant the applicants leave to sue the liquidators, I consider that leave to appeal should be granted because whilst her Honour's judgment is interlocutory (as at least in theory a further application could be brought) it "has the practical effect of finally determining the rights of the parties" and this is a strong factor favouring a grant of leave to appeal (see Ex parte Bucknell (1936) 56 CLR 221 at 225-6; [1936] HCA 67)… 255 KTC relied on these authorities in support of the proposition that there would be a substantial injustice if leave were to be refused, supposing the decision to be wrong, because it would be dispositive of their claim (at least as between KTC and G+T). 256 In response, G+T characterised KTC's position as being, in effect, that if a claim is summarily dismissed as a result of an interlocutory decision, there is a prima facie basis for granting leave to appeal. G+T submitted that this submission is unsupported by recent authority and ought to be rejected to the extent it involves a departure or modification from the established principles in Décor. 257 I do not accept G+T's submission, as it is inconsistent with authorities in this Court and other intermediate appellate courts. 258 In Construction, Forestry, Maritime, Mining and Energy Union v One Key Workforce Pty Ltd [2020] FCAFC 27, the Full Court (McKerracher, Farrell and Markovic JJ) noted at [44]: The principles governing an application for leave to appeal were not in dispute. An applicant for leave must demonstrate that the decision of the primary judge is attended by sufficient doubt to warrant its reconsideration by a Full Court and that substantial injustice would result if leave were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 (Décor Corporation) at 398-399. Leave will more readily be granted in the case of an interlocutory decision that determines a substantive right: Décor Corporation at 400. In Ashby v Slipper (2014) 219 FCR 322 at [46] Mansfield and Gilmour JJ said: In Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 at [43], citing Ex parte Bucknell (1936) 56 CLR 221 at 225, French J, with whom the other members of the Court agreed, said that a "prima facie case exists for granting leave to appeal" if the judgment, although interlocutory, has the practical operation of finally determining the rights of the parties. 259 Similarly, in a decision handed down after the hearing, but of direct relevance, the Full Court said in Hastwell v Kott Gunning [2021] FCAFC 70 at [26] (McKerracher, Kerr and Charlesworth JJ): We also accept the concession made by [the respondent] that consideration of whether the decision was attended by sufficient doubt so as to justify the grant of leave to appeal must be assessed in the context that the order effectively brought the proceeding to an end: Tyne v UBS AG [2016] FCA 241 per Edelman J (at [31]-[34]). In this regard, the observations of French J (with whom Beaumont and Finkelstein JJ agreed) in Johnson Tiles Pty v Esso Australia Pty Ltd [2000] FCA 1572; (2000) 104 FCR 564 (at [43]) are instructive: … Interlocutory orders cover a spectrum from those concerned solely with the mechanics of case management and pre-trial preparation to those which may, for one reason or another, have a significant impact upon the scope and outcome of the proceedings. If the order, the subject of the application for leave to appeal, is concerned with the mechanics of the pre-trial process then the scales are likely to be weighted against the grant of leave. However if while interlocutory in legal effect it has the practical operation of finally determining the rights of the parties "a prima facie case exists for granting leave to appeal" - Ex parte Bucknell (1936) 56 CLR 221 at 225; Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400; Minogue v Williams [2000] FCA 125 at [18]. If a proceeding is dismissed because it is frivolous or vexatious or because no reasonable cause of action is disclosed the decision is treated as interlocutory. However leave will usually be granted in such a case if there is any doubt about the decision at first instance - Little v Victoria [1998] 4 VR 596 at 598-600 and 601 (Callaway JA, Buchanan JA agreeing). (see also Samsung Electronics at [31] and Re CSR Ltd [2002] FCAFC 34; (2010) 183 FCR 358 at [5]) 260 G+T made two further submissions in relation to the grant of leave to appeal. First, G+T submitted that KTC has not demonstrated that the primary judge's reasons are attended by sufficient doubt to warrant being reconsidered by the Full Court. Notwithstanding KTC's generalised references to "novel questions" of law and "factual complexity and uncertainty", G+T contended that the primary judge's reasons turned on established principles concerning the test for accessorial liability and the requirement that allegations of fraud be adequately pleaded. 261 In this regard, G+T submitted that the core deficiencies with the pleading may be summarised as follows. 262 First, G+T submitted that KTC's pleading does not disclose a basis upon which it could be said that G+T had the requisite knowledge, in a legal sense, of the allegedly dishonest and fraudulent design of Mr David and/or RAAL. The allegation of knowledge rests on the proposition that G+T: (i) advised that the impugned transactions - being two share issues referred to below - were lawful; and (ii) knew the impugned transactions were for no consideration. However, G+T said there are no pleaded facts from which either of those matters could be inferred. 263 Second, G+T submitted that KTC's pleading does not disclose a basis upon which it could be said that there was a design which was dishonest and fraudulent. The central transaction impugned in the pleading is a resolution by the board of Emergent, of which there were three directors: Mr David; Charif and Tarek Kazal (the directors of KTC, who between them had one vote); and Mr Nikolaos Mavromanolakis. The resolution was passed by Mr David and Mr Mavromanolakis at a board meeting the Kazals had been notified of but did not attend. Crucially, the pleadings do not identify how the passing of the resolution - or the conduct of the parties in connection with it - was dishonest or fraudulent. 264 Third, G+T submitted that it was logically incoherent for KTC to plead that G+T acted with the requisite 'knowledge' of the fraud, for the reasons detailed in the Notice of Contention dated 25 November 2020. In particular, G+T submitted that the knowledge of Mr Bullock is derived only from the correctness or otherwise of his legal advice. At its highest, that pleading amounts to an allegation of negligence. It does not, without more, affix Mr Bullock with knowledge of a dishonest and fraudulent design. 265 In addition, G+T submitted that there would not be substantial injustice to KTC if leave to appeal were refused, even supposing the decision to be wrong, as KTC has already been offered successive opportunities to amend its pleadings. For example, in KTC v David (No 1) [2019] NSWSC 281 at [47], Kunc J indicated that KTC should "be given a final opportunity to plead [its] case if it comes to the view that it is able to do so." Similarly, in KTC v David (Pleadings) [2019] FCA 1566 at [52], the learned primary judge put KTC on notice that it would only be given "one more chance" to amend its pleading, adding "[t]his is the end of the line; there are no more stops after this one". It followed, according to G+T, that KTC would not suffer an injustice in circumstances where it has had many opportunities to re-plead its claim and has not availed itself of those opportunities. 266 During the course of the hearing, G+T made detailed submissions concerning the second limb of the test for leave to appeal, including by reference to a decision of the Full Court in Advanced Holdings. In Advanced Holdings, Steward J, then a member of this Court, wrote the principal judgment of the Court, with which Allsop CJ and Bromwich J agreed. 267 Expressed briefly, Advanced Holdings involved an application for leave to appeal from a summary dismissal of the applicant's challenge, made pursuant to s 39B of the Judiciary Act 1903 (Cth), to the validity of amended assessments and penalty assessments issued to it by the Commissioner of Taxation across various income tax years. The basis for the challenge was that the Commissioner had relied on documents which were allegedly seized illegally. This occurred in circumstances where a search warrant had been served and executed on the taxpayer's accountants but the disputed documents purportedly fell outside the scope of what the search warrant authorised. 268 After setting out some additional background matters that are not presently relevant, Steward J proceeded to consider whether substantial injustice would result if leave were refused, supposing the decision to be wrong. In that case, the applicant submitted that there would be a substantial injustice because if the Court determined that the assessments were invalid based on the illegally seized materials, the Commissioner would be unlikely to re-issue the assessments. The predicate of the applicant's submission was that the Commissioner might subsequently be persuaded to form the opinion that there had never been a fraud or tax evasion and, in any event, the Commissioner would then be out of time to issue amended assessments to the applicant for the years of income in dispute. 269 At [66], Steward J dealt with this submission, and the question of whether leave to appeal should be granted, as follows: It is convenient to begin with the second test for leave. In my view, the possible opportunity to re-agitate the correctness of the Commissioner's opinion about the presence of fraud or evasion, and thus avoid the issue of the assessments, is optimistic conjecture and no more. Even if it be a species of possible injustice, due to its slim prospects, the identified injustice is not substantial. It is speculative. 270 His Honour went on to observe at [70]: It follows from the foregoing that, in my view, the supposed substantial injustice was no more than conjecture or speculation. The Court was given no material upon which it could judge the prospects of the applicant persuading the Commissioner that there had been no fraud or evasion, assuming it would ever need to do so. [Emphasis added] 271 By reference to Advanced Holdings, G+T submitted that KTC has been unable to demonstrate that the striking out of its pleading against G+T would result in any substantial injustice. This contention was particularised in the following ways. 272 First, G+T submitted that KTC had already exercised legal rights in respect of the same underlying conduct and thereby recovered a substantial part of its claim. G+T further submitted that the notion that there was any "incremental value" in pursuing the claim so alleged against G+T is merely a matter of conjecture, both due to the speculative nature of the claims sought to be advanced against G+T and because there was no evidence that KTC would be unable to recover damages from ancillary litigation. 273 G+T referred in particular to earlier proceedings before the Grand Court of the Cayman Islands, including a court-supervised process through which KTC received a significant distribution of money following the sale of GRL. In relation to this issue, I defer to the reasons of the learned White J of the New South Wales Supreme Court in KTC v Singh & Ors [2018] NSWSC 1510. His Honour described the circumstances relevant to this distribution at [15]-[17]: …On 14 May 2010 KTC presented a winding-up petition of ECL in the Cayman Islands. On 4 October 2010 a judge of the Grand Court of the Cayman Islands, Mr Justice Jones, made an order to the effect that ECL's shareholding in GRL could be sold on terms that the net proceeds of sale be paid into court pending the outcome of KTC's winding-up petition. KTC alleges that in or about December 2010 all of the shares in GRL were sold to Ironbridge Capital Pty Ltd ("IBC") for $25 million. By the time of the sale ECL held only 50 per cent of the shares in GRL. This was the result of an issue of shares in GRL to SIL made on or about 23 April 2010. KTC alleges that the share issue was for no consideration. For the reasons below, that contention is without substance. Half of the proceeds of the sale of shares in GRL, representing ECL's share of the proceeds, were paid into court in the Cayman Islands. In his judgment of 23 November 2011 Jones J records that the net proceeds of sale paid into Court were about A$12 million. Jones J concluded that the issue of shares in ECL that diluted KTC's equity from 50 per cent to 0.01 per cent was invalid and the result of the directors of ECL breaching their fiduciary duty by issuing shares for the only purpose of eliminating KTC's interests and passing ownership of ECL to RAAL. His Honour directed the liquidators of ECL to rectify the register of members to reflect that KTC and RAAL each owned 50 per cent of the shares in KTC. I was told that KTC's 50 per cent share of the moneys paid into court in the Cayman Islands was remitted to it. 274 G+T's reliance on the decision of White J in KTC v Singh & Ors [2018] NSWSC 1510 was two-fold. First, to demonstrate that KTC had already recovered all, or at least a substantial part, of the loss allegedly flowing from the impugned transactions; and, second, that there was no risk that assets would be dissipated, leaving KTC unable to recover funds to which it claims an entitlement. In relation to the second of these matters, it is again relevant to refer to the reasons of White J in KTC v Singh & Ors [2018] NSWSC 1510. The application before his Honour was summarised at [1]-[2]: This is a contested application for freezing orders brought by the applicant, KTC (a company incorporated in the Cayman Islands) against four respondents. KTC is the plaintiff in proceedings in this Court brought by way of statement of claim filed 25 July 2018 against five defendants. Two of these defendants are respondents to this application. The other respondents are the wife and an associated company of the second defendant, Mr David Singh. KTC does not contend that there is an imminent risk of the respondents' dissipating assets with the intention of frustrating a judgment. No ex parte application was made for a freezing order. KTC submits that it should be inferred from the conduct of two of the respondents that, unless restrained, the respondents will dissipate assets so as to put them outside the reach of KTC should they become the judgment creditor. 275 His Honour went on to observe at [8]-[10]: In many cases the risk of dissipation of assets to avoid a judgment will be evident from the plaintiff's strong prima facie case of the defendant's having fraudulently misappropriated assets or of serious dishonesty. As the Court held in Patterson v BTR Engineering (Aust) Ltd such evidence may establish that it can reasonably be inferred that the defendant is the sort of person who would, unless restrained, not preserve his or her assets intact so that they might be available to a judgment creditor (at 325-326). KTC seeks to bring its case within that principle. But it does not say that it has a prima facie case that the respondents themselves engaged in fraudulent activity. Rather, it says that two of the respondents, who are defendants to its claim, participated with knowledge in a fraudulent design and breach of fiduciary duties allegedly owed by another defendant, a Mr David, to KTC. The facts in relation to this claim are complex. For the reasons which follow I do not accept that KTC has shown that it has a prima facie case that the relevant defendants (that is, relevant to its present application for freezing orders) knowingly assisted in a fraudulent design of Mr David's or in a breach by him of fiduciary duties owed to KTC. The evidence does not establish a risk that assets will be dissipated. Accordingly, the claim for the grant of a freezing order fails in limine. In any event the freezing order would be refused on the grounds of KTC's delay in bringing the proceedings and the inadequacy of the proffered undertaking as to damages. [Emphasis added] 276 Accordingly, G+T submitted that KTC has been unable to demonstrate, in any meaningful way, that there would be a substantial injustice to it if deprived of the opportunity to pursue its claim. G+T contended that as a result of other ancillary proceedings in the Grand Court of the Cayman Islands, KTC has been, or will be, fully compensated for any loss it has suffered. Put differently, G+T submitted that this proceeding involved an attempt at 'double-dipping' and it therefore follows that if leave to appeal were refused, no substantial injustice would result because KTC has already been compensated for its loss. 277 G+T also submitted that there can be no substantial injustice in a dispute of the present nature because KTC's central allegation against G+T involves an "existential impossibility". G+T expanded upon this contention as follows. Assuming the allegation is that G+T gave legal advice that the relevant transactions were lawful, that advice can only be so described if it based on an opinion which is honestly held. This is because if the advice was presented as 'legal advice', but constituted a view which was not in fact held, it would not in fact be legal advice at all. Rather, it would be an artifice, or a fraud. 278 In this respect, G+T continued to rely upon the apparent inconsistency between alleging that G+T had advised that the ELC Share Conduct was lawful, while simultaneously alleging that it was part of a dishonest and fraudulent scheme. For this reason also, G+T submitted that the claim was conjecture and merely speculative in the sense described in Advanced Holdings. 279 G+T emphasised that the onus is on KTC to demonstrate - and positively persuade the Court - that a substantial injustice would result if leave were refused, supposing the decision to be wrong. G+T added that leave to appeal is not available as of right, and that position is not altered simply because the effect of the summary dismissal was to determine KTC's rights as against (at least) G+T. 280 In reply, KTC submitted that there was no basis for the Court to reach a view that KTC had already been fully compensated for the loss suffered in connection with the ECL Share Conduct and GRL Share Conduct. By way of example, KTC directed attention to [70] of the FASOC, in which it is alleged that on or about 28 November 2013, Global Renewables Holdings Pty Ltd acquired all the shares in GRL, and thus the whole of the Waste Facility, for $120 million. It was KTC's submission that, but for the contravening conduct, it would have retained an interest in the waste facility and therefore that it has suffered loss which has not been compensated to date. 281 As to whether the claim against G+T involved an "existential impossibility", KTC submitted that there was no logical inconsistency in the pleaded knowledge of G+T at [75]-[76] of the FASOC. For ease of reference, I extract those paragraphs of the pleading in full: 75. By reason of Bullock's knowledge as set out in the preceding paragraph Bullock wilfully shut his eyes to the obvious conclusions that: (a) the legal advice that it was lawful to make the ECL Share Issue was wrong; (b) if the ECL Share Issue was made then it would constitute a dishonest breach of the fiduciary duties owed by each of David and RAAL to KTC as part of a dishonest and fraudulent design; (c) the advice that it was lawful to make the GRL Share Issue was wrong; (d) if the GRL Share Issue was made then it would constitute a dishonest breach of the fiduciary duties owed by David and RAAL to KTC as part of a dishonest and fraudulent design; (e) further, if the GRL Share Issue was made then it would constitute a dishonest breach of the trust owed by RAAL to KTC as part of a dishonest and fraudulent design. PARTICULARS Bullock wilfully shut his eyes to the conclusions in sub-paragraphs (a) to (e) by reason that: (i) at the relevant time Bullock was a highly experienced practitioner and the head of the G+T corporate advisory team and specialised in mergers and acquisitions, fundraisings and complex joint ventures; (ii) RAAL and KTC were joint venturers in their investment in ECL, to the knowledge of Bullock; (iii) Bullock was on notice by reason of the email received from Fionnuala O'Brien on 17 November 2009 that the G+T Legal Advice ought be given careful consideration as to whether it was lawful; (iv) ECL's interest in GRL, and GRL itself, was very valuable, to the knowledge of Bullock, yet he neither obtained nor requested a valuation of GRL; (v) the result of the ECL Share Issue and the GRL Share Issue, to the knowledge of Bullock, was to increase RAAL's interest in GRL from 40% to 50%, to increase SIL's interest in GRL from 20% to 50%, reduce KTC's interest in GRL from 40% to effectively nil, and reduce ECL's debts by less than 1%; (vi) neither the advice that it was lawful to make the ECL Share Issue nor the advice to make the GRL Share Issue was advice that an experienced practitioner could reasonably have given; (vi) the advice to make the ECL Share Issue did not include any qualification in respect of rights arising in KTC's favour in respect of oppression remedies; 76. Alternatively, Bullock had knowledge of circumstances which would have indicated to an honest and reasonable person that: (a) the G+T Legal advice that it was lawful to make the ECL Share Issue was wrong; (b) if the ECL Share Issue was made then it would constitute a dishonest breach of the fiduciary duties owed by each of David and RAAL to KTC as part of a dishonest and fraudulent design; (c) the advice that it was lawful to make the GRL Share Issue was wrong; (d) if the GRL Share Issue was made then it would constitute a dishonest breach of the fiduciary duties owed by David and RAAL to KTC as part of a dishonest and fraudulent design; (e) further, if the GRL Share Issue was made then it would constitute a breach of the trust owed by RAAL to KTC as part of a dishonest and fraudulent design. PARTICULARS KTC refers to and repeats particulars under paragraph 75 above. 282 Senior counsel for KTC explained that, as pleaded, the act of knowing assistance is the provision of advice and drafting of legal documents, by which G+T facilitated the impugned transactions. KTC submitted that such conduct occurred in circumstances where G+T wilfully shut its eyes to the dishonest and fraudulent design that was thereby implemented or, alternatively, had knowledge of circumstances which would have indicated to an honest and reasonable person that the advice was wrong. According to KTC, that is a conventional pleading of knowing assistance and does not entail any logical non sequitur. 283 For reasons I will explain below, I am satisfied that the decision is attended by sufficient doubt to warrant being reconsidered and also that there would be substantial prejudice to KTC's interests if leave were refused, supposing the decision to be wrong. I reject G+T's submission that the interlocutory application turned on established principles or did not otherwise involve complex questions of fact incapable of being resolved at a pleading stage. I also reject G+T's submission that the supposed substantial injustice was no more than conjecture or speculation. I am not persuaded that the proceeding is merely an attempt by KTC to recover loss for which it has already been compensated nor I am satisfied that KTC's claim is premised on a "logical impossibility". 284 I segue slightly to note that the principal protagonists in this appeal - KTC and G+T - each made submissions generally in relation to the principles to be applied in determining whether to grant leave to file an amended pleading. Having regard to those principles, I am fortified in my view that leave to appeal should be granted. 285 KTC submitted that leave to file an amended pleading should only be refused in plain and obvious cases. In its written submissions, KTC referred in particular to the summary of principles in Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1994] FCA 636; 217 ALR 226 at 236 (Beaumont J): … Under the modern system of pleading, on an application to strike out a statement of claim as disclosing no cause of action, the question is whether "it would be open to the (applicants) upon the pleadings to prove facts at the trial which would constitute a cause of action": see Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631; [1971] ALR 235 at 237. The main general principles in strike out applications have been summarised as follows: (1) A "reasonable cause of action" means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out (Davey v Bentinck ([1893] 1 QB 185)). (2) The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action (cf Wenlock v Moloney ([1965] 1 WLR 1238; [1965] 2 All ER 871)). (3) Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect (cf Hodson v Pare ([1899] 1 QB 455)). (4) It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised. (5) Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point (cf Williams and Humbert Ltd v W & H Trade Marks ([1986] AC 368; [1986] 1 All ER 129)). This decision has been cited with approval by the Full Court in Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572; 104 FCR 564 at [50] (French J), Beaumont J agreeing at [1], Finkelstein J agreeing at [99]. 286 KTC further submitted that contemporary case management principles are such that the Court should only refuse to grant leave to file an amended pleading if it would significantly impact upon the proper preparation of the case: see, eg, Barclay Mowlem Construction Ltd v Dampier Port Authority & Anor [2006] WASC 281; 33 WAR 82 at [6]-[8], cited with approval in Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13] (Greenwood, McKerracher and Reeves JJ). KTC contended that the importance of not taking "an unduly technical or restrictive approach to pleadings" (Thomson at [13]) was particularly important in the present circumstances because: (1) the relevant area of law is not settled, making it inappropriate to decide novel questions on hypothetical facts: see, eg, X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at 740-741, cited with approval in Johnson Tiles at [50]; and (2) relevant facts are peculiarly within the knowledge of the Respondents. Accordingly, KTC's cause of action should not be dismissed because of gaps in its case which might be resolved as a result of discovery, by requesting interrogatories or by adducing evidence from reluctant witnesses: see, eg, Granite Transformations Pty Ltd v Apex Distributions Pty Ltd [2018] FCA 725; 359 ALR 62 at [6] (O'Callaghan J). 287 In response, G+T submitted that the power to grant leave to amend a pleading is discretionary: see r 16.53 of the Federal Court Rules 2011 (Cth), discussed in Tamaya Resources Ltd (In Liq) v Deloitte Touche Tohmatsu (A Firm) [2016] FCAFC 2; 332 ALR 199 at [122] (Gilmour, Perram and Beach JJ). Nonetheless, G+T acknowledged that the discretion is not at large. That is to say, it must be exercised having regard to the overarching purpose in 37M of the Federal Court Act, including the recognised interest in resolving a dispute expeditiously and promoting the efficient use of the Court's resources: Tamaya Resources at [123]. 288 Further, G+T accepted that in exercising this discretion modern courts do not take an unduly technical or restrictive approach. However, that does not detract from the requirement that pleadings must serve their essential function. As the Full Court said in Thomson at [13]: It is well-established that the main purposes of pleadings are to give notice to the other party of the case it has to meet, to avoid surprise to that party, to define the issues at trial, to thereby allow only relevant evidence to be admitted at trial and for the trial to be conducted efficiently within permissible bounds: see, eg Dare v Pulham (1982) 148 CLR 658 (at 664-665). However, it is also well-established that pleadings are not an end in themselves, instead they are a means to the ultimate attainment of justice between the parties to litigation: see Banque Commerciale S.A. (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 (at 293) per Dawson J who cites Isaacs and Rich JJ in Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 (at 517)... [Emphasis added] 289 Consistent with these propositions, G+T submitted that the discretion to grant leave to amend a statement of claim should be exercised having regard to the need for the party opposing leave to properly understand the case put against it. G+T submitted that the necessity for proper notice is brought into sharp focus in a case such as the present given the central allegation is of knowing assistance in relation to a dishonest and fraudulent design. 290 In addition to the principles identified by the parties, I add the observations of the Full Court in Oztech Pty Ltd v Public Trustee of Queensland [2019] FCAFC 102; 269 FCR 349 at [28]-[32] (Middleton, Perram and Anastassiou JJ): The question of whether a pleading adequately raises a claim or defence is not concerned with the expression of the pleading as a matter of style, or of phrasing, or the structure of the pleading. Neither is it concerned with the formality of the process by which the issues in the proceeding are identified; be it a statement of claim, statement of contentions, concise statement, points of claim or points of defence. The verbal formulation of the allegations of fact, or the contentions of law, need not conform to a particular style guide or to any pro forma template. The sole objective of a pleading is to clearly identify matters in dispute and difference by and between the parties to the dispute. This objective necessarily involves expressing the factual basis of each claim or defence. It is necessary that the legal elements of each cause of action or defence are expressed by reference to allegations of fact required to establish each element. It is not necessary to plead the legal conclusions that follow from the facts, but it is often convenient to do so. These are trite propositions but nevertheless vital to ensuring that the pleading serves its purpose. There should be no doubt about whether any particular cause of action is relied upon. At a minimum, the pleading should be pellucidly clear about the causes of action, or claims, relied upon by the applicant, including any claims made upon an alternative hypothesis. The explicit clarity with which a claim is expressed should ensure that there be no need for the opposite party to closely scrutinise the pleading in a process of textual construction to determine whether a particular fact is relied upon, or the purpose for which it is alleged, much less to decide whether a particular cause of action is raised. The same basic requirement applies to any defence raised in answer to a claim. Clarity in pleading is by no means an unattainable objective, even in the most complex litigation. Often the elements of a cause of action require careful and precise identification to ensure that the relevant integer is properly characterised having regard to the context in which the claim arose. The pleading should always be a bespoke articulation of the dispute between the parties, even though the warp and the weft of its fabric may be the same as other claims based upon the same, or a similar, cause of action. There are occasions when such definition can be difficult and may require reference to technical or scientific material, including cases where the material requires specialist explanation by reference to expert evidence to be given at trial. In some instances, the contended facts may be asserted based upon inferences to be distilled from a web of other facts. In other instances it may be necessary to define an implicit representation drawn from the contextual background against which express statements were made or from the failure to make an express statement contrary to the apparent common assumption of the parties. While the limits of text may in some cases impose linguistic limitations beyond a certain level, such linguistic limitations would not generally present any obstacle to expressing the substantive causes of action with sufficient clarity to ensure that the parties are able to reach a shared understanding of the issues in the dispute. The above passages have been cited with approval by the Full Court of this Court in Allianz Australia Insurance Limited v Delor Vue Apartments CTS 39788 [2021] FCAFC 121; 396 ALR 27 at [153] (McKerracher and Colvin JJ) and, in my view, remain apposite in resolving a dispute regarding the adequacy of pleadings. 291 In my view, the quality of a pleading must surely be judged by its clarity. If it is clearly expressed, the analytical foundations of the claim, or defence, may be scrutinised. If upon scrutiny, the claim, or defence, is revealed to be founded upon a factual assumption for which there is no arguable basis, or a path of reasoning which is founded upon a misunderstanding of legal principles, the pleading will have served its proper purpose. A clear pleading shall also have served the interests of justice by stating clearly the nature and legal characterisation of the controversy between the parties, thereby allowing for the efficient disposition of the controversy. 292 A deficient pleading, on the other hand, is one which is, in critical respects, loose or opaque; often expressed in the passive voice. Such pleadings may elide inconvenient facts, or make generalised allegations or denials about critical elements such as knowledge, subjective or imputed, and may also lack a demonstrable and precise articulation of the necessary elements of the cause, or causes, of action relied upon. Those pleadings are 'embarrassing' in the legal sense (see r 16.02(2)(d) of the Rules) and should not be tolerated, not for their inelegance but for their potential to impede the efficient administration of justice for reasons that have been stated many times. As Abraham J explained in Australian Competition and Consumer Commission v NQCranes Pty Ltd [2021] FCA 1270 at [9]: A pleading is embarrassing where it is unintelligible, ambiguous, vague or too general, such that the opposite party does not know what is alleged against him or her: Fair Work Ombudsman v Eastern Colour Pty Ltd [2011] FCA 803; (2019) 209 IR 263 (Eastern Colour) at [18], citing Meckiff v Simpson [1968] VR 62 at 70. A pleading may be considered to be embarrassing if it suffers from narrative, prolixity or irrelevancies to the extent it is not a pleading to which the other party can reasonably be expected to plead to: Fuller v Toms [2012] FCA 27; (2012) 247 FCR 440 at [80], [83]. It has been said that a pleading is embarrassing if it "is susceptible to various meanings, or contains inconsistent allegations or in which alternatives are confusingly intermixed or in which irrelevant allegations are made tending to increase expense": Bartlett v Swan Television and Radio Broadcasters Pty Ltd [1995] ATPR 41-434 at [25]; Faruqi v Latham [2018] FCA 1328 at [94]. Although facts or characterisations of facts can be pleaded in the alternative, a pleading should not "[plant] a forest of forensic contingencies" which are only pulled together in final submissions: Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 at 503. 293 In my view, the pleaders for KTC have aspired to clarity, and to a degree, achieved it. They are subject to the limitations of text; that is to say, the limits to which inferences of fact, legal principle and/or wrongdoing may be expressed in writing, where those conclusions are distilled from a multiplicity of concurrent objective facts and, often, disputed events. 294 In cases such as the present, whether there has been wrongdoing sufficient to found a cause of action depends upon an assessment of conduct considered within its full context, which may extend back many years. Indeed, in such cases, however skilful the pleader, and however comprehensive and candid the pleading may be, there may remain legitimate disagreement about whether the pleading expresses an adequate factual foundation for the legal characterisation of the relevant conduct. Such disagreement concerning the pleaded characterisation of the conduct in question is more likely when the legal characterisation involves an element of moral turpitude such as fraud or dishonesty, and where that element may only be established by inferences drawn from multiple events and circumstances, particularly where the relevant inference concerns the subjective state of mind of the putative wrongdoer. 295 There are limits to the ability to express the combination or combinations of facts, conduct and relevant contextual circumstances which found the legal characterisation of the conduct, for example, the knowing assistance of a wrongdoer in a 'dishonest and fraudulent design'. The complexity of the relationship between the relevant actors, the scope, and time frame over which the relevant context extends, add to the difficulty of encapsulation and characterisation, especially when the conduct in question is to be assessed having regard to the actual, or imputed, knowledge of the putative wrongdoer. 296 In my view, such disagreement should be resolved by the trier of fact at the trial of the proceeding. At a trial, the motivations of the relevant actors may be 'teased out' through the adversarial contest. This process includes the important opportunity to test by cross examination the knowledge and motivations of the relevant actors. In that context, it is conceivable that evidence given at the trial may vindicate the putative wrongdoer, or vice versa. 297 Needless to say, a party to a proceeding should not be subject to a trial on allegations that are untenable or are founded upon an identifiable misconception. As I have said above, the measure of a good pleading is clarity, for that allows such misconceptions to be identified. A trial is not an opportunity for one party to search for a claim, or defence, in running. But there must be a balance between the interests of a respondent not to be vexed by a misconceived or speculative claim, and the opportunity afforded by the adversarial mode of trial to explore and test evidence at trial. 298 In my view, keeping that balance in mind, and having regard to the fact that the interlocutory application has the effect of finally determining KTC's rights as against G+T, I would grant leave to appeal. I therefore turn to consider the substantive grounds raised by the Notice of Appeal.

Substantive issues on appeal 299 KTC submitted that the 16 grounds of appeal raise four broad issues for the Court's consideration: (1) whether the allegation that the ECL Share Conduct was dishonest is maintainable (grounds 3, 4 and 5); (2) whether the allegation of G+T's assistance at 72 of the FASOC is maintainable (grounds 8 and 9), and sufficient assistance is otherwise alleged against G+T (grounds 10 and 11); (3) whether the allegation of G+T's knowledge at 74 of the FASOC is maintainable (grounds 12 to 14); and (4) whether the Primary Judge considered the adequacy of the pleaded ECL Share Conduct (grounds 1 and 2) and Constructive Trust Fraudulent Scheme (grounds 6 and 7). 300 There is also a fifth issue which arises in relation to the orders of the primary judge. It is whether the allegations against the First to Third Respondents ought to be permitted to stand (grounds 15 and 16). This issue only arises if the appeal is not allowed in relation to the other grounds of appeal. 301 G+T submitted that those grounds are, in substance, an attempt to re-agitate issues that were traversed below and, in many instances, in the earlier interlocutory applications referred to in paragraph [235] above. G+T further submitted that in circumstances where the primary judge's decision to refuse leave to amend is discretionary, the principles in House v The King [1936] HCA 40; 55 CLR 499 at 504-5 apply (see also Nationwide News Pty Limited v Rush [2020] FCAFC 115; 380 ALR 432 at [346] (White, Gleeson and Wheelahan JJ)) and, having regard to those principles, there was no error in the exercise of the primary judge's discretion. 302 By its Notice of Contention, G+T identifies a further ground upon which it contends that the orders of the primary judge should be upheld. The Notice of Contention is in the following terms: 1. Having regard to: (a) the definition of "G+ T Legal Advice" in paragraph 23(b) of the Proposed Further Amended Statement of Claim ("Proposed FASOC"); (b) the allegation at paragraph 23(b) of the Proposed FASOC that the Fifth Respondent ("Bullock") gave the G+ T Legal Advice to the First Respondent ("David"), RAAL Limited ("RAAL") and Emergent Capital Limited ("ECL"); (c) the additional allegations at paragraphs 98 and 145 of the Proposed FASOC that Bullock and the Fourth Respondent ("G+ T") gave David and RAAL legal advice that: (i) it was lawful to make the ECL Share Issue, as defined in paragraph 34 of the Proposed FASOC; and (ii) it was lawful to make the GRL Share Issue, as defined in paragraph 41 of the Proposed FASOC; and (d) the omission of the Appellant to plead that the advice referred to above did not represent the genuine views or opinions of Bullock, a matter they could not, in the circumstances, plead. 2. The primary judge should have found that there was no proper basis for the Appellant to plead, or alternatively that it was embarrassing for the Appellant to plead: (a) that Bullock had wilfully shut his eyes to the conclusions pleaded at paragraph 75(a) to (e) of the Proposed FASOC; (b) that Bullock had knowledge of circumstances which would have indicated to an honest and reasonable person the matters pleaded at paragraph 76(a) to (e) of the Proposed FASOC; and (c) that either G+ Tor Bullock assisted RAAL or David in any breaches of fiduciary duty with knowledge: (i) of any such breaches; or (ii) that such breaches were part of a dishonest and fraudulent design. 3. In the premises, the primary judge should have also struck out and dismissed the application to file the Proposed FASOC on the above basis as well. 303 The matters raised in the Notice of Contention only arise if, contrary to the primary judge's finding, this Court concludes that the pleadings are capable of sustaining an inference that G+T advised that the ECL Share Conduct was lawful. In those circumstances, G+T submitted that the allegation that Mr Bullock wilfully shut his eyes to the incorrectness of his own legal advice (at [75] of the FASOC) is "simply impossible" as a matter of logic. In this respect, G+T contended that absent any plea that Mr Bullock had knowledge (constructive or otherwise) of the alleged fraud, and knowingly gave incorrect legal advice, the allegation can rise no higher than negligence in giving legal advice. As G+T noted, correctly, that is insufficient to found a knowing assistance claim under the second limb of the rule in Barnes v Addy.

Grounds 3 to 5 304 Grounds 3 to 5 relate to the claim that G+T knowingly assisted in a dishonest and fraudulent design given effect to by the First to Third Respondents through the ECL Share Issue. These issues were considered by the primary judge at [27]-[41] of his Honour's reasons. The primary judge variously described the ECL Share Conduct as "highhanded perhaps", "aggressive certainly", "provocative", "not … nice" (at [38]), and "apt to raise eyebrows" (at [39]), but found that the conduct was not such as to be capable of comprising a dishonest and fraudulent design. The primary judge concluded (at [39]) that the ECL Share Conduct could not be a fraudulent and dishonest scheme "unless Mr Mavromanolakis is said to have been lied to or, alternatively, himself to have been in on it. But neither allegation is made." His Honour added (at [40]): It follows that I accept G+T's submission that the dishonest scheme alleged by KTC is fundamentally incoherent. I do not accept KTC's submission that the dishonesty of Mr David (and implicitly of G+T) is to be assessed against what is alleged against them rather than by reference to Mr Mavromanolakis. That submission seeks to reduce the role of Mr Mavromanolakis in the dishonest scheme and to make him a non-essential or at least peripheral participant. In fact, the entire scheme hinged on him. If the scheme was not dishonest in relation to Mr Mavromanolakis then the rest of KTC's case makes no sense. Nor is it to the point that it is alleged that G+T knew that Mr David had procured Mr Mavromanolakis's support. Again this brings into focus the critical issue which is not whether Mr David procured Mr Mavromanolakis' support but how he did so: did he do it with deceit or blunt force? There is no allegation of deceit and every appearance of blunt force. 305 KTC submitted that, in so finding, the primary judge erred for two reasons. First, as the ECL Share Conduct disclosed a dishonest and fraudulent design; and second, as the primary judge should in any case have granted leave to file the FASOC, given the factual complexity and uncertainty in the law. I outline the particulars of each submission in turn. 306 As to the first reason, KTC submitted that the elements of accessorial liability for knowing assistance under the second limb of Barnes v Addy, as conventionally understood in Australia, are that: (1) there has been a breach of fiduciary duty; (2) the breach was dishonest and fraudulent - referred to as a "dishonest and fraudulent design"; (3) the alleged accessory assisted in the breach; and (4) the alleged accessory had the requisite knowledge of the essential elements of the dishonest and fraudulent design: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 at [160], [174]-[179] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ). 307 Unsurprisingly, there are differing expressions of what is meant by, or constitutes, a dishonest and fraudulent design: see Zibara v Ultra Management (Sports) Pty Ltd [2021] FCAFC 4; 283 FCR 18 at [97] (McKerracher and Anderson JJ); cf. Westpac Banking Corporation v Bell Group Ltd (In Liq) (No 3) [2012] WASCA 157; 44 WAR 1 at [2112]-[2125] (Drummond AJA) and Hasler v Singtel Optus Pty Ltd [2014] NSWCA 266; 87 NSWLR 609 at [4] (Barrett JA), [9] (Gleeson JA) and [91]-[120] (Leeming JA). Abstract legal encapsulations such as this will inevitably be analytically deconstructed, and in that process expanded upon and, possibly, re-phrased. Whether there be substantive differences of opinion is often difficult to discern and distinguish from differences of phrasing. It is therefore necessary to explore whether there are in substance different interpretations of what is meant by the encapsulated expression that is 'a dishonest and fraudulent design'. 308 In the Bell Group litigation, Drummond AJA opined that whether a trustee or fiduciary has engaged in a dishonest and fraudulent design requires an inquiry into whether the conduct in question would be excusable by analogy to statutory provisions applicable to excusing trustees or fiduciaries. His Honour explained that such inquiry requires consideration of at least the following matters identified at [2112]: (a) a finding of a breach of duty by the fiduciary will not, without some additional feature, be sufficient to show a dishonest and fraudulent design on the fiduciary's part; (b) it is not necessary, in order to establish the existence of the additional feature, to show that the breach of duty occurred in circumstances in which the fiduciary acted with a conscious awareness that what he was doing was wrong: the breach of duty can be characterised as dishonest or fraudulent according to equitable principles and that will suffice for liability; (c) the additional feature will be found if the breach of duty is more than a trivial breach and is also too serious to be excusable because the fiduciary has acted honestly, reasonably and ought fairly to be excused… His Honour added at [2119] (see also Lee AJA agreeing on this point at [1099]): "I do not think the court in Farah is to be understood as having accepted that conduct by trustees or fiduciaries must involve an element of moral reprehensibility before it will satisfy the requirement of the second limb that it is 'dishonest and fraudulent'." Senior counsel for KTC submitted that this has been understood as establishing a relatively low threshold for the concept of a dishonest and fraudulent design. 309 In Hasler, Leeming JA indicated that he regarded the test expounded by Drummond AJA as setting the bar too low (at [89]) and added that the reasoning at [2104]-[2126] in Bell should not be followed (at [91]). His Honour proceeded to explain that a dishonest and fraudulent design is one that meets the description at [124]: Dishonesty amounts to a transgression of ordinary standards of honest behaviour. It is not necessary to say anything else by way of elaboration, save to confirm that it is not necessary to demonstrate that the person thought about what those standards were. (I have paraphrased Lord Hoffmann's account in Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd [2006] 1 All ER 333 at [16].) [Emphasis added] That proposition has been cited with approval by Gageler J in Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd [2018] HCA 43; 265 CLR 1 at [71]. However, it is notable that other members of the High Court did not express a view about what constitutes a 'dishonest and fraudulent design' in Foresters. 310 In Zibara, McKerracher and Anderson JJ explained at [103] that there seemed to be a clear trend in the authorities favouring the approach articulated by Leeming JA in Hasler. Their Honours added at [107]: It is "plain (in Australia) that it is the quality of the fiduciary's breach which must answer the description of "dishonest or fraudulent": Hasler, [110]. This Court must assess the quality of the conduct of the fiduciary and determine whether that conduct answers the description of a dishonest and fraudulent design, being conduct that amounts to a "transgression of ordinary standards of honest behaviour": Hasler, [124]; Foresters, [72]. 311 Writing separately in Zibara, Derrington J relevantly added (at [254]): It is essential to attach liability to a third party, who has not procured or induced a breach of the fiduciary duty, that the breach in question is of a particular quality. That is, it is part of a dishonest and fraudulent design of which the third party has knowledge. This was reiterated in Farah and the point was comprehensively assayed by Leeming JA in Hasler v Singtel. In that analysis, his Honour identified the error in the reasoning in Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) (2012) 44 WAR 1, which had concluded at [2112] that a breach of fiduciary duty could cause liability to attach to third parties where the breach could be characterised as dishonest or fraudulent according to equitable principles, and there was no need to show the conduct to be "morally reprehensible". Leeming JA accepted (at 632 [106]) that in order to attach liability to a third party for the breach of fiduciary duty, outside of those cases of procuring or inducing the breach, it was necessary for the breach to amount to a dishonest and fraudulent design. His Honour also acknowledged (at 635 - 636 [122] - [125]) that the concept of "dishonest and fraudulent" design was conceptually different to that of equitable fraud and it requires a transgression of ordinary standards of honest behaviour. His Honour's conclusions were subsequently endorsed in the reasons of Gageler J in Ancient Order of Foresters v Lifeplan at 31 [71], where his Honour said: Knowing participation by a non-fiduciary in a dishonest and fraudulent breach of fiduciary duty is conduct which is regarded in equity as itself unconscionable and as attracting equitable remedies against the knowing participant of the same kind as those available against the errant fiduciary. Knowing participation in a dishonest and fraudulent breach of fiduciary duty includes knowingly assisting the fiduciary in the execution of a "dishonest and fraudulent design" on the part of the fiduciary to engage in the conduct that is in breach of fiduciary duty. The requisite element of dishonesty and fraud on the part of the fiduciary is met where the conduct which constitutes the breach transgresses ordinary standards of honest behaviour. Correspondingly, the requisite element of knowledge on the part of the participant is met where the participant has knowledge of circumstances which would indicate the fact of the dishonesty on the part of the fiduciary to an honest and reasonable person. (Footnotes omitted) [Emphasis added] 312 The final decision specifically referred to by KTC was Nicholson v Morgan (No 3) [2013] WASC 110, a first instance decision in which one of the defendants brought an application to strike out the plaintiffs' amended statement of claim. In Nicholson, Edelman J, then a Judge of the Supreme Court of Western Australia, noted that caution should be exercised at the level of a strike out application before determining that the level of knowledge pleaded does not reach the threshold of showing knowledge of a dishonest and fraudulent design. In particular, his Honour referred to the decision of Drummond AJA in Bell and noted the uncertainty arising from this decision as to the meaning of a dishonest and fraudulent design: see in particular at [56]. Relevantly, however, Nicholson pre-dates both Hasler and Foresters. 313 I turn now to the FASOC itself. At [19], KTC pleaded that the fiduciary duty alleged to be owed by Mr David and RAAL to KTC included that they: (1) act in the interests of and not cause detriment to KTC; (2) not prefer their own interests to KTC's interests, and not use their position to improperly gain an advantage for Mr David, RAAL or another party; and (3) to account to KTC for any improper benefit that they received. Assuming such a duty, KTC submitted that Mr David's and RAAL's intentional or overt acts were, at a minimum, capable of comprising a dishonest and fraudulent design. Those acts, most relevantly, included converting a disputed debt into equity (without paying any heed to the value of the equity), practically eliminating KTC's interest in the joint venture and thereby wrestling control of ECL. 314 In addition, KTC pleaded that it would be open for the Court to find a dishonest and fraudulent design from the following aspects of Mr David's / RAAL's conduct: (1) procuring the G+T Legal Advice for Mr David, Mr Mavromanolakis, RAAL and ECL and withholding it from KTC (FASOC at [23]-[24]); (2) executing the RAAL Loan Agreement when the loan amount was disputed by KTC (FASOC at [25]-[26]); (3) convening a board meeting on 28 January 2010 ECL without informing KTC of the RAAL Loan Agreement, RAAL's demand, or that Mr David intended to move the ECL Share Resolution (FASOC at [28], [29]); and (4) failing to obtain a valuation of ECL or its shares prior to the making of the ECL Share Resolution, when shares in ECL were a valuable asset (FASOC at [32], [33]). 315 KTC emphasised that it is the quality of the fiduciary's breach - in this instance, Mr David and RAAL - that is relevant. It follows that enquiring as to whether Mr Mavromanolakis acted properly in voting in favour of the share issue, or did so for extraneous reasons, is irrelevant. KTC contended that it was Mr David's / RAAL's breach that must constitute a "transgression of ordinary standards of honest behaviour" and the primary judge erred by undertaking that enquiry in relation to the ECL Share Conduct as a whole, including by reference to the role of Mr Mavromanolakis, rather than exclusively in relation to the conduct of Mr David / RAAL. 316 KTC further submitted that the failure to allege that Mr Mavromanolakis' conduct was dishonest in relation to the relevant breach of fiduciary duty does not mean that Mr David / RAAL's breach cannot be dishonest in the relevant sense. To hold otherwise would require dishonesty at every step, by every actor, of an otherwise dishonest and fraudulent design. In KTC's submission, a design does not cease to be dishonest just because a critical step lies outside the errant fiduciary's control. 317 KTC submitted that references to conduct which was "highhanded", "brutal" and "aggressive" are almost indistinguishable, if not synonymous, from the concept of conduct which transgresses ordinary standards of behaviour. To the extent that those concepts are capable of being distinguished, it is not at the preliminary stage of pleadings but only after having received and considered the evidence. In those circumstances, KTC submitted that the primary judge erred in expressing a view that the conduct does not appear dishonest (at [38]) and striking out the FASOC. In KTC's submission, that is a conclusion that could only be reached at trial and to strike out the pleading on that basis was a miscarriage of the primary judge's discretion. 318 In any event, KTC submitted that the second reason the primary ought to have granted leave to file the FASOC is that the true extent of Mr David's / RAAL's dishonesty will involve matters uniquely within the knowledge of those actors, and the law in Australia as to what is meant by a "dishonest and fraudulent design" remains unsettled. 319 Relevant to the disposition of the appeal, KTC submitted that if the submissions in relation to grounds 3 to 5 were accepted, the appeal should be allowed. KTC made this submission on the premise that the primary judge did not impugn the knowing assistance component of the claim as it pertained to G+T (subject to considering the issue raised in the Notice of Contention). 320 Senior counsel for KTC advanced the following propositions in support of the submission that grounds 3 to 5 were dispositive of the appeal: (1) the relevant conduct is pleaded at of the FASOC, in which it is alleged that G+T gave legal advice to Mr David, Mr Mavromanolakis, RAAL and ECL in relation to the ECL Share Conduct; (2) the retainer by which G+T provided legal services to GRL, ECL, RAAL and Mr David is pleaded at ; (3) the G+T legal advice regarding the ECL Share Conduct is pleaded at and (d); (4) there are then allegations that G+T had relevant knowledge of the dishonest and fraudulent design pleaded at -(j); and (5) if satisfied that a reasonable cause of action is disclosed that the ECL Share Conduct involves a dishonest and fraudulent design, by reason of those pleadings, that alone would be sufficient for the appeal to be allowed. 321 G+T properly characterised KTC's submissions in relation to grounds 3 to 5 as pertaining to either one of the following issues: (1) that the primary judge erred by concluding that the pleadings did not disclose a dishonest and fraudulent design; and/or (2) that owing to the factual complexity and uncertainty in the law, leave to amend should have been granted. 322 As to KTC's first contention, G+T submitted that the FASOC does not identify any specific aspect of the ECL Share Conduct that is capable of constituting a dishonest and fraudulent design. G+T endorsed the primary judge's differentiation of conduct which was, in legal terms, dishonest and fraudulent and, conduct that could be described as "aggressive" or "highhanded perhaps". 323 In particular, G+T submitted that KTC had misunderstood the crucial point that the dishonest and fraudulent design inhered, at least for the purposes of grounds 3 to 5, in the ECL Share Conduct. It followed that, irrespective of the allegations of dishonestly against Mr David or RAAL in relation to other matters, KTC was required to plead that the decision to issue shares was dishonest or fraudulent and that G+T knowingly assisted in that process. 324 Taken to its logical conclusion, G+T's contention was, in effect, that because the ECL Share Conduct was the consequence of a decision taken by ECL's Board, with votes being cast separately by Mr David and Mr Mavromanolakis, there could be no dishonest and fraudulent design without an allegation that Mr Mavromanolakis was either misled or otherwise acted improperly in voting in favour of the share issue. Accordingly, G+T submitted that the primary judge did not err in finding that the pleading, at least in relation to the ECL Share Conduct, was not viable. 325 In relation to KTC's second contention, G+T submitted that the primary judge was aware of, and alive to, the debate within the authorities as to what constitutes a dishonest and fraudulent design in Australian law (to the extent that there is any residual controversy). G+T referred in particular to [13] of the primary judge's reasons in KTC v David (Pleadings) [2019] FCA 1566, in which the primary judge adopted the summary of principles by Kunc J in KTC v David (No 1) [2019] NSWSC 281 at [19]. Those principles included the following: … (5) Avoiding argument over what is fraud, the fiduciary's breach of duty must also be dishonest in the sense that it is a transgression of ordinary standards of honest behaviour… 326 G+T contended that the primary judge followed an orthodox approach to the relevant question of law. That approach, G+T submitted, is consistent with Leeming JA's reasons in Hasler, as adopted by Gageler J in Foresters and the Full Court in Zibara. Further, G+T submitted that the onus is on KTC to demonstrate that the primary judge erred in finding that the ECL Share Conduct may well have been a breach of fiduciary duty which merited descriptions such as "high-handed perhaps", "aggressive certainly" and "brutal", but that it was not dishonest. G+T added that KTC has not specifically identified any difference between the approaches taken by intermediate appellate courts, which might bear upon the claim, particularly in circumstances where KTC has failed to directly plead dishonesty in the relevant legal sense. 327 G+T also submitted that it was beside the point to focus on the asymmetry of information, or on matters that might uniquely be within the knowledge of Mr David or RAAL. In G+T's submission, that only serves to detract from the actual deficiencies identified by the primary judge, namely, that absent an allegation of fraud concerning the issue of shares by ECL, KTC's allegation of a dishonest and fraudulent design cannot be sustained. 328 As appears from the above, the respective submissions diverge in relation to a critical point. On the one hand, KTC submitted that it is the quality of the fiduciary's breach that is relevant - being Mr David and RAAL's breach of duty to KTC. On the other hand, the primary judge held, and G+T in turn submitted, that it is necessary to identify dishonesty attached to the ECL Share Conduct generally. In my view, it is the nature of Mr David's and RAAL's breach of fiduciary duty that must amount to a transgression of ordinary standards of honest behaviour and [21]-[40] of the FASOC, considered in its totality, plead that claim in sufficiently clear terms. 329 Having had the benefit of reading, in draft form, the reasons for judgment to be published of Wigney J, I agree with and adopt his Honour's detailed recitation of the relevant principles concerning an application to strike out pleadings and summarily dismiss a claim at [108]-[132]. I also accept that a pleading of knowing assistance in this context is tantamount to an allegation of fraud, which is plainly a very serious allegation to make, whomsoever it is made against. That said, I respectfully disagree with Wigney J's conclusions concerning the application of those principles in this case. In particular, I respectfully disagree with Wigney J, with whom Jackson J agrees in relation to this issue, that the pleading does not disclose a reasonable cause of action against G+T (including Mr Bullock) for knowing assistance in respect of the dishonest and fraudulent design that inhered in the ECL Share Conduct. 330 The expression used in Barnes v Addy of a 'dishonest and fraudulent design' is an apt encapsulation of a quality of breach of fiduciary duty. It encapsulates a breach where the conduct of the fiduciary, and those who assist the fiduciary, is comingled with knowledge. The proper appreciation of critical elements such as the knowledge of a third party may not always be possible, or even desirable, to derive from an analytical critique of the pleading. Accordingly, a case such as the present is, in my view, unsuitable for disposition on a pleading basis given the complexity of the relationship between the various actors, the complexity of the transaction in dispute and the extensive contextual antecedence to the joint venture. I am fortified in that conclusion by the information imbalance, or knowledge asymmetry, which favours G+T and presents obstacles for KTC at the pleading stage. 331 In my opinion, the FASOC discloses that KTC may have a cause of action against G+T for knowing assistance in a dishonest and fraudulent design. It may turn out following a trial that the pleading was unduly complex in parts, or that the case thesis underlying certain parts of the claim fails, or that the claim fails in its entirety. However, in a case of such comingled complexity, it is only at trial, where the evidence may be tested, that a conclusion may be reached concerning whether there has been a dishonest and fraudulent design and whether relevant actors had, or did not have, the requisite levels of knowledge described in Baden v Société Générale pour Favoriser le Développement du Commerce et de l'Industrie en France SA [1993] 1 WLR 509. 332 Indeed, it may reasonably be expected that the evidence given at trial will illuminate and reveal nuances which enable a better understanding of facts relevant to conclusions about critical elements of the claim. That may include illuminating matters such as the proper characterisation of the behaviour of the actors involved and/or their knowledge of relevant matters. Accordingly, I would allow the appeal on grounds 3 to 5. For the reasons explained by KTC, that itself is sufficient to dispose of the appeal.

Notice of Contention 333 By its Notice of Contention, referred to above at [302]-[303], G+T contended that KTC's pleading is deficient because KTC accepts that Mr Bullock gave advice to the effect that the ECL Share Issue and GRL Share Issue were both lawful, but fails to plead that the advice did not represent the genuinely held views or opinions of Mr Bullock. G+T says that is a logical impossibility, a non sequitur, and that the primary judge should have found there was no proper basis for the pleading that Mr Bullock wilfully shut his eyes or had knowledge of circumstances which would have put an honest and reasonable person on notice, as pleaded at [75] and [76] of the FASOC, set out above at [281]. 334 I do not accept the submission advanced in the Notice of Contention. Having regard to the principles in Farah Constructions, KTC's pleading is, in this respect, a conventional pleading of accessorial liability. More specifically KTC pleads that: (1) Mr Bullock wilfully shut his eyes to obvious conclusions that the ECL Share Issue and GRL Share Issue would give rise to dishonest breaches, having regard to the objective features of those schemes; or, alternatively (2) Mr Bullock had knowledge of circumstances that would have put an honest and reasonable man on inquiry that his advice was wrong, again having regard to the objective features of the ECL Share Issue and GRL Share Issue. 335 In effect, G+T contended that KTC's pleading against Mr Bullock is incapable of supporting a finding of knowing assistance because the relevant knowledge pleaded amounts to, in effect, no more than an assertion of negligence. However, as KTC rightly pointed out, that is a mischaracterisation of the plea. Indeed, it is a contention that was earlier rejected by the primary judge in KTC v David (Pleadings) [2019] FCA 1566. In this regard, the primary judge said at [25]-[26]: G+T submits that KTC now wishes to run a case against it for performing the very services they were retained to perform. In particular, G+T submits that KTC now seeks to say that the legal advice which G+T gave was wrong because the share issue allegedly involved a breach of fiduciary duty owed by Mr David (and RAAL) to KTC. This is not quite what the proposed pleading says… 336 After setting out relevant aspects of the pleading, as it then was, his Honour concluded at [31]-[35]: To an extent, I would accept what I think is the substance of G+T's point about this which is that none of these matters really go directly to actual knowledge of G+T. For example, the reference to the 'G+T Advice' in ¶137(a) is a cross-reference to ¶134 which contains a collection of either anodyne allegations (such as that G+T prepared an action plan to give effect to the memorandum of understanding) or, even less helpfully from KTC's perspective, to allegations such as that at ¶134(h)(iii) that G+T advised that the transaction was the 'right thing and the legal thing to do'. It is difficult to see how these allegations can advance a case that G+T knew that Mr David and RAAL were acting in breach of fiduciary duty as is alleged at ¶139(c). A similar point may be made about ¶138: how does the fact that G+T did not advise on obtaining a share valuation directly advance a case that G+T knew about a fraudulent design? But the matter is perhaps not so straightforward as G+T's submission would suggest. The allegation at ¶138 that G+T did not advise that a valuation of the shares be obtained may be consistent with it emerging at trial that G+T did not obtain a share valuation because it knew what would become clear if it did and this, in turn, may be seen as a species of wilful blindness. Another aspect of it may be that proof of the facts of the transaction reveal a transaction so inappropriate that it should be inferred that Mr Bullock was part of it since no reasonable solicitor could have advised as he did. Another form of this may be this syllogism: only someone who had no idea what they were doing would advise this transaction was lawful; Mr Bullock is not such a person; ergo Mr Bullock must have been fully aware of the inappropriate nature of the transaction. I do not for a moment mean to suggest that this is in fact the case - to be clear I have no view - it is merely to observe that ¶¶137-139 may play out in various ways at trial. I think it is therefore possible that these allegations could sustain the allegations at ¶¶140-141: 140. Alternatively, by reason of the G+T Advice and the matters referred to in paragraphs 28A to 28E inclusive, 137 and 138 G+T and Bullock knew of circumstances that an honest and reasonable person would have taken to have indicated facts constituting the matters set out in paragraph 139. 141 Alternatively, G+T and Bullock wilfully shut their eyes to the matters referred to in paragraphs 139. Consequently, I do not accept G+T's submission that these paragraphs are not sufficient to make the allegation. Subject to the earlier matters to which I have referred being attended to I do not think that these allegations against G+T should be dismissed summarily before trial. There is something quite striking about these transactions and one's interest can only be piqued by the fact that G+T is alleged to have advised that it was lawful. There is a trial to be had here. This part of the case as pleaded is not without difficulty but, when all is said and done, the transaction which Mr David and RAAL effected is striking in its obvious impact on the Kazals. One can readily imagine all kinds of possible answers - for example, that it was not fair for Mr David to be funding the whole enterprise without the Kazals contributing some form of capital - but this strikes me as a trial question and not a pleading question. 337 I respectfully agree with the primary judge's reasoning in relation to this issue. KTC relevantly pleaded conduct in the sense of G+T giving legal advice. The requisite knowledge is not pleaded as Mr Bullock knowing the advice was wrong. Rather, it is an orthodox pleading of knowledge, based on Mr Bullock wilfully shutting his eyes or, alternatively, having knowledge of circumstances that would put a reasonable and honest man on inquiry. Those are matters to be determined at trial, not at the preliminary pleading stage. To adopt the language of the primary judge, "there is a trial to be had here". 338 I would add a further reason as to why the Notice of Contention should be rejected. The allegations of wilful blindness and knowledge of circumstances that would have put an honest and reasonable man on inquiry that his advice was wrong are not merely allegations about the subjective state of mind of Mr Bullock. The Notice of Contention therefore sets up, and knocks over, a 'straw man'. In the absence of an admission, or perhaps information from an informant, it is often practically impossible in this context to plead the subjective state of mind of another party with any particularity. The pleader is often confined to identifying and pleading the objective circumstantial factors upon which the thesis of knowing assistance in a dishonest and fraudulent design is founded. Hence the orthodox pleading of wilful blindness and knowledge of circumstances that would put a reasonable and honest man on inquiry. The claim may fail, or it may emerge at trial that the putative wrongdoer had the requisite knowledge of the dishonest intent of the design.

Grounds 8 and 9 339 It is convenient to note at this juncture that all of the remaining grounds of appeal concern the GRL Share Conduct, save for grounds 15 and 16 which relate to a discrete and entirely separate question concerning the Second and Third Respondents. 340 It will be recalled that the GRL Share Conduct principally consists of the following pleaded events. (1) On 22 April 2010, the directors of GRL (Mr David and Mr Singh) passed a resolution that GRL issue 60 ordinary shares in GRL to SIL for an issue price of $1.00 per share described as "fully paid" (the GRL Share Issue) (at [41]) of the FASOC. (2) G+T assisted in preparing the documentation to effect the making of the GRL Share Issue and allegedly advised GRL, ECL, RAAL and Mr David that it was lawful (at 72(v) and 72 of the FASOC). (3) As at 22 April 2010, shares in GRL were a valuable asset, but there was no consideration paid for the GRL Share Issue (at [44]-[45] of the FASOC). (4) On 23 April 2010, a GRL Shareholders' Agreement was purportedly executed by Mr David on behalf of ECL and GRL. That document is said to have been prepared by G+T (at 72(iii)-72 of the FASOC). (5) On 30 July 2010, the GRL Share Issue was effected without any involvement or approval by KTC (or the Kazals) (at [41] of the FASOC). The consequences of the GRL Share Issue were that: (a) SIL's shareholding in GRL increased from 20 ordinary shares to 80 ordinary shares, giving SIL 50% of the issued shares in GRL; and (b) ECL's shareholding in GRL remained at 80 ordinary shares, thereby reducing its interest in GRL from 80% to 50% and causing it to lose effective control of GRL (at [46] of the FASOC). 341 Having regard to these matters, grounds 8 and 9 concern the allegations at 72 of the FASOC, namely, that G+T "advised GRL, ECL, RAAL and [Mr] David that it was lawful to make the GRL Share Issue". This allegation is one aspect of G+T's alleged knowing assistance in the GRL Share Conduct. 342 Before proceeding any further, for ease of reference I shall extract the pleading at [72] of the FASOC in its entirety. The allegations in that paragraph are of central importance to not only grounds 8 and 9, but also to grounds 10 and 11. Involvement of Bullock in David's and RAAL's conduct 72. G+T: (a) was retained by GRL to provide legal services for GRL, ECL, RAAL and David in relation to: (i) drafting the RAAL Loan Agreement; (ii) providing a strategy to deal with KTC's refusal to contribute funding to equal that of RAAL in ECL; (iii) the 6 January 2009 Draft Terms Sheet, later draft GRL Shareholders' Agreements, the April 2009 Draft GRL Shareholders' Agreement, the First Purported GRL Shareholders' Agreement, the March 2010 Draft GRL Shareholders' Agreement and the Second Purported GRL Shareholders' Agreement; (iv) the ECL Share Resolution and ECL Share Issue; and (v) the GRL Share Issue; (b) in the period from 27 November 2008 11 November 2009 until 28 April 2010 provided legal services in respect of the work referred to in sub-paragraph (a) above; (c) provided the G+T Legal Advice and advised RAAL, David and Mavro that the ECL Share Issue was lawful; (d) assisted in preparing the documentation to effect the ECL Share Resolution and the ECL Share Issue; (e) advised GRL, ECL, RAAL and David that it was lawful to make the GRL Share Issue; and (f) assisted in preparing the documentation to effect the making of the GRL Share Issue. PARTICULARS As to sub-paragraphs (a), (b), (d) and (f) G+T rendered invoices to GRL for the legal services referred to in paragraph (a) dated 22 January 2009, 27 February 2009, 25 March 2009, 29 April 2009, 30 June 2009, 28 August 2009, 30 November 2009, 29 January 2010, 26 February 2010, 31 March 2010 and 5 May 2010. Further as to sub-paragraph (a)(iii) by an email from David to Bullock sent at 18.40 on 27 Nov 2008, David instructed Bullock to prepare a shareholders' agreement for GRL. As to sub-paragraph (c) KTC repeats the particulars to paragraph 23 above. As to sub-paragraph (e), Bullock giving advice that it was lawful to make the GRL Share Issue is to be inferred from the facts that: (i) Bullock was retained to advise in relation to, and draft, the 6 January 2009 Draft Terms Sheet, later draft GRL Shareholders' Agreements, the April 2009 Draft GRL Shareholders' Agreement, the First Purported GRL Shareholders' Agreement, the GRL Share Issue, the March 2010 Draft GRL Shareholders' Agreement and the Second Purported GRL Shareholders' Agreement; and (ii) the Second Purported GRL Shareholders' Agreement purported to identify the basis for refers to the GRL Share Issue. 343 KTC alleges that the inference that G+T knowingly assisted in the GRL Share Conduct can be derived from the fact that G+T was retained to advise on and draft a number of shareholders' agreements and other related documents in relation to GRL (the G+T Documents, at of the FASOC). However, the primary judge held at [16]-[19] that the pleading could not support an inference that G+T provided the advice alleged from the fact that Mr Bullock was retained to draft, and advise on, the G+T Documents. 344 KTC submitted that the primary judge erred for two reasons. First, because it is open to infer that G+T gave advice to the effect alleged from the matters particularised; and, second, the primary judge should in any event have granted to leave to file the FASOC, given the nature of the allegations and the asymmetry of information between the parties. 345 As to the first reason, KTC independently alleged that G+T both: (i) provided legal services in relation to the GRL Share Issue and G+T Documents (at of the FASOC) and (ii) prepared documents to effect the GRL Share Issue (at of the FASOC). 346 KTC submitted that both allegations are maintainable for the following reasons. It is an implied term of the lawyer-client retainer that a lawyer will use his or her best endeavours to protect the client's interests in the matters to which the retainer relates: citing Groom v Crocker [1939] 1 KB 194, 222 (Scott LJ). In relation to a lay client, that duty will require the solicitor to give advice reasonably necessary to protect the client's interests in the transaction: see, eg, Dalleagles Pty ltd v Australian Securities Commission (1991) 4 WAR 325, 332-333 (Anderson J), albeit in the context of his Honour discussing the common law doctrine of legal professional privilege. KTC submitted that because G+T is subject to those duties, it is open to infer that G+T would have provided advice in relation to the GRL Share Issue, including as to its lawfulness. 347 KTC further submitted that it is relevant to note that Mr Bullock was the head of G+T's corporate advisory team and an experienced specialist in mergers and acquisitions, fundraisings and joint ventures (see [73] of the FASOC). It is reasonable to infer that such a solicitor would be diligent and thorough and, in this context, a diligent and thorough solicitor would be prudent to ensure his or her client's interests are not jeopardised by entering into an unlawful transaction. 348 Separately, KTC submitted that it is open to infer that G+T gave advice about the lawfulness of the GRL Share Issue from the changing terms of the shareholders agreements drafted by G+T. Indeed, the April 2009 Draft GRL Shareholders' Agreement, First Purported GRL Shareholders' Agreement and Second Purported GRL Shareholders' Agreement each contained changing terms as to the issue of shares to SIL. Further, the Second Purported GRL Shareholders' Agreement is signed on 23 April 2010, the day after the GRL Share Issue, and it is alleged that document was prepared personally by Mr Bullock. KTC submitted it is open to the Court to infer that in negotiating and drafting those documents, G+T provided advice as to the lawfulness of the impugned transactions. 349 As to the second reason, KTC's position, briefly stated, was that the nature of the allegation and the cause of action is such that the primary judge ought to have granted leave for the FASOC to be filed. This is principally because the content and effect of G+T's advice is a matter uniquely within the Respondents' knowledge. 350 In response, G+T contended that there was no error in the primary judge's conclusion. G+T submitted that there was nothing in the pleading from which it could be inferred that Mr Bullock advised GRL, ECL, RAAL and Mr David that it was lawful to undertake the GRL Share Issue. 351 In particular, G+T submitted that of the seven documents particularised at of the FASOC, only two of those documents actually concerned the allotment of shares from GRL to SIL. Those two 'documents' are: (i) a GRL Shareholders' Agreement dated 23 April 2010, which allegedly "refers to" the allotment of 60 ordinary shares but goes no further; and (ii) the GRL Share Issue itself, which is not a document but rather an event recorded, presumably, in GRL's business records. 352 It followed, according to G+T, that a mere reference in a document to the fact of the share issue, and a document recording that the share issue had taken place, is incapable of founding the inference that G+T advised that the share issue was lawful. G+T submitted that KTC's contention amounted to a generalised "attempt to fix a solicitor with liability for the misconduct of his client" (see KTC v David (No 1) [2019] NSWSC 281 at [25] (Kunc J)), that being the very issue that the articulation of the principles in Barnes v Addy was directed at addressing. G+T referred specifically to the observations of Lord Selborne LC in Barnes v Addy (at 253-254), in relation to a solicitor who advised a client in relation to a transaction absent knowledge of the client's dishonest purpose: It would be an alarming doctrine if we were to lay down, assuming honesty of purpose and the absence of fraud, that the solicitor is in such a case made a constructive trustee; and we are not going to be the first Judges to lay down that doctrine, it certainly not having been laid down by any of our predecessors. 353 For that reason, G+T submitted that the bare allegation that it provided legal services "in relation to" the GRL Share Issue (at of the FASOC) was not capable of sustaining an inference that it also advised that the share issue was lawful. G+T did not doubt the existence of an obligation that a lawyer will use his or her best endeavours to protect the client's interests in the matters to which the retainer relates, but relevantly added that submission does not speak to the scope of the solicitor's retainer. G+T submitted that in circumstances where KTC did not plead that the scope of G+T's retainer extended to advising on the GRL Share Issue, the pleading, as particularised, is not capable of sustaining the inference that G+T advised the share issue was lawful. Indeed, G+T contended that KTC had not even met the anterior threshold of establishing that the advice was given at all. 354 In reply, KTC submitted that the inference that G+T gave legal advice in relation to lawfulness of the GRL Share Issue is plainly open to the Court, at least for the purposes of a pleadings contest. To this end, KTC emphasised that the context of the advice must be kept in mind, namely, a complex series of commercial transactions, for which G+T was retained to provide legal services including the drafting of transaction documents. KTC further submitted that a lawyer's retainer in relation to such transactions usually extends beyond mere documentation, and includes a duty to warn the client of anything unusual or which may prevent the client from obtaining the intended benefit of the transaction: Vella v Permanent Mortgagees [2008] NSWSC 505 at [496], [500] (Young CJ). 355 KTC also submitted that the primary judge fell into error by looking only at the draft agreements referred to in of the FASOC, rather than examining the whole of the alleged conduct and evidence of the relationship between G+T and Mr David / RAAL. Further, and in any event, KTC submitted that even accepting the primary judge's approach, his Honour erred by failing to have regard to the various drafts of the shareholder agreements prepared by G+T, which itself reveals an understanding of the transaction and changes made pursuant to that understanding. 356 In my view, based on the level of involvement of Mr Bullock in the GRL Share Conduct, including in the preparation of transaction documentation and share resolutions, I am satisfied that the inference which KTC urges the Court to draw - namely, that G+T advised GRL, ECL, RAAL and Mr David that it was lawful to make the GRL Share Issue - is reasonably open on the pleading. Further, I respectfully disagree with Wigney J that the particulars provided to support that allegation are "hopeless". I shall explain the reason for this difference by pausing to make some observations about the modern relationship between lawyers and their commercial clients. 357 It is apparent that the advisory services offered by commercial law firms today are far broader than they were in the era in which Lord Selbourne delivered his seminal remarks in Barnes v Addy. If necessary, I would take judicial notice of that fact. That is not to say that the often difficult to precisely define boundary between legal advice and other advice is less clear now than it was in the nineteenth century. Rather, it is to emphasise that the 'business model', so to speak, of commercial law firms is broader than the services that were typically offered by law firms at that time. 358 An example of this point is the tendency for so-called 'in-house' corporate counsel to act in both a commercial as well as legal capacity. In such circumstances, it has been observed that it is "often practically impossible to segregate commercial activities from purely 'legal' functions": Seven Network Limited v News Limited [2005] FCA 142 at [38] (Tamberlin J); Archer Capital 4A Pty Ltd as trustee for Archer Capital Trust 4A v Sage Group plc (No 2) [2013] FCA 1098; 306 ALR 384 at [88] (Wigney J). 359 The multiple capacities in which lawyers may act for their corporate clients is not confined to 'in-house' counsel. Indeed, it is not uncommon to find that law firms offer corporate clients junior legal staff as 'secondees', to work effectively 'in-house' for their client. I make no criticism of this practice. I assume rather that in such cases the synergies of the relationship between the corporate client and the law firm allow for and encourage such arrangements. The point is that it is not uncommon for the relationship between a law firm and corporate client to become to a degree entangled in a commercial sense. 360 The relevance of that context is that in the present case, it would appear from the FASOC that Mr Bullock had a key role in the relationship between G+T and Mr David / RAAL. It would also appear that Mr Bullock had an extensive role personally, at the least, in drafting the relevant transaction documents. However, what is not capable of being determined with certainty at the stage of pleadings is the extent to which Mr Bullock was retained to advise in relation to the impugned transactions or whether that involvement might amount to knowing assistance. 361 In the circumstances described in the FASOC, in my view there is a serious triable issue concerning whether, and if so to what extent and effect, Mr Bullock gave legal advice regarding the GRL Share Issue. Plainly, it would seem that Mr Bullock was involved in the transactions at a practical level. The question for trial is whether his involvement was purely for the purpose of preparing transaction documentation or whether he was relevantly involved in a broader way, including whether he gave express legal advice to the effect that the transaction in question was lawful. There is also a question of whether in the circumstances, assuming no such express advice was given, the absence of express advice exculpates G+T. 362 For these reasons, I respectfully disagree with the conclusions reached by the primary judge and would also allow grounds 8 and 9. In any event, even if there be doubt about whether G+T advised that the relevant transactions were lawful (expressly or impliedly), for the reasons I express in relation to grounds 10 and 11, I am satisfied for the purposes of this appeal that the conduct of G+T in negotiating and drafting the relevant transaction documents, together with such other involvement they may be found to have had in the impugned transactions, may be sufficient to establish a claim for knowing assistance.

Grounds 10 and 11 363 Grounds 10 and 11 concern KTC's allegation that G+T was an accessory to a dishonest and fraudulent scheme because it knowingly assisted in preparing the documentation to effect the GRL Share Issue. KTC submitted that the primary judge did not consider this issue, which is pleaded in 72 of the FASOC, having already concluded that the pleading at 72 of the FASOC could not be maintained (see grounds 8 and 9 above). 364 KTC contended that the primary judge should have treated each sub-paragraph of the pleading as an independent, alternative basis for the knowing assistance claim. That is, regardless of whether G+T advised that the GRL Share Issue was lawful, KTC said that G+T assisted in preparing the documentation necessary to effect the impugned transaction and, crucially, it contended that merely preparing the documentation comprises knowing assistance, such that the pleading disclosed a reasonable case. 365 In support of this contention, KTC submitted that it follows, as a matter of common sense, that if a solicitor drafts transaction documents with the requisite level of knowledge, that solicitor has provided sufficient assistance for the purpose of the second limb in Barnes v Addy. In the event that there was any doubt about that proposition, KTC submitted that the issue is put beyond controversy by the following observation of Lord Nicholls in Dubai Aluminium Co. Ltd v Salaam [2002] UKHL 48; [2003] 2 AC 366 at 381: In the present case, drafting the consultancy agreement and other agreements were acts of assistance by Mr Amhurst [a solicitor] and, coupled with dishonesty, they were sufficient in themselves to give rise to equitable liability on his part. 366 In response, G+T contended that the primary judge had in fact dealt with KTC's pleading that knowing assistance can be inferred from the fact that G+T drafted the transaction documents relevant to the GRL Share Issue. In particular, G+T submitted that: (1) at [14], the primary judge relevantly noted KTC's allegation that knowing assistance be inferred from G+T having been retained to advise in relation to a series of transaction-related documents which preceded the allotment of shares from GRL to SIL; (2) at [15], the primary judge proceeded to specifically consider each of those transaction documents and their relevance to the pleading; and (3) at [16]-[18], the primary judge concluded that, even on the assumption G+T was retained to draft each of the specified documents and advised upon them, that does not found an inference of knowing assistance. 367 G+T further submitted that KTC's submission fails to grapple with the fundamental requirement that there must be knowing assistance in a dishonest and fraudulent design. In this respect, G+T contended that the relevant assistance must be "facultative conduct or activity which is more than mere knowledge or notice of breach of duty": Re-Engine Pty Ltd (in liq) v Fergusson [2007] VSC 57; 209 FLR 1 (cited by Kunc J in KTC v David (No 1) [2019] NSWSC 281 at [19]). G+T submitted that, read against that background, the primary judge's conclusion that "the drafting of the documents goes nowhere" (at [18]) must be read as a rejection of KTC's submission that the mere drafting of the transaction documents is sufficient to establish accessorial liability in this context. 368 The difficulty with G+T's submission is that in each of the paragraphs of the primary judge's reasons referred to above, his Honour appears to be specifically considering the pleading at rather than the pleading at . His Honour, with respect, may have misunderstood that there was an alternative, independent claim for knowing assistance based on: (i) G+T advising that it was lawful to make the GRL Share Issue and (ii), separately, G+T having prepared the transaction documents relevant to the GRL Share issue. That confusion may be ameliorated by the insertion of an expression such as 'and/or', or a consequential amendment to [98] of the FASOC (the knowing assistance pleading in respect of G+T), though such amendments are, in my view, sufficiently inconsequential as to allow KTC to file the FASOC, with or without such grammatical correction. 369 More importantly, as a matter of principle, and as I have alluded to above, the present case may put into focus the question of whether the involvement of Mr Bullock in the preparation of the transaction documents constitutes participation in a dishonest and fraudulent design, even assuming no explicit advice was given as to the legality of the impugned transactions. I must therefore respectfully disagree with the primary judge that "the drafting of documents goes nowhere". While I agree that as a general proposition, without more, a solicitor asked to prepare transaction documents is unlikely to be found to be a knowing participant, I am not sufficiently confident, based on the pleaded circumstantial facts, to rule out a finding that Mr Bullock was wilfully blind to the alleged fraudulent and dishonest design, understood in its proper and full context, or aware of matters that would put an honest and reasonable man on inquiry, when he assisted by drafting the transaction documents.

Grounds 12 to 14 370 Grounds 12 to 14 concern the allegation at 74 of the FASOC, namely, that G+T knew that "SIL paid no consideration for the GRL Share Issue or, alternatively, any consideration was colourable or illusory." 371 The allegation is one aspect of G+T's alleged knowledge of the GRL Share Conduct. The particulars to 74 state that the knowledge is to be inferred from facts that: (1) G+T advised GRL and ECL on GRL's funding by RAAL and KTC; and (2) Mr Bullock prepared and advised on the G+T Documents (referring to and repeating the particulars to 62 of the FASOC). 372 The primary judge did not accept that the relevant knowledge could be inferred from the fact that Mr Bullock was providing advice to GRL on the continuation of funding from KTC and RAAL (at [20]), or from the fact that Mr Bullock was retained to advise on and draft the G+T Documents (at [22]). In addition, his Honour observed (at [23]) in relation to the particulars in 62: "I am not prepared to read a cross-reference at the end of one set of particulars to another set of particulars as including central allegations of material fact." 373 KTC submitted that in finding that the particulars to 74 did not adequately support the alleged knowledge, the primary judge erred for two reasons. First, KTC submitted that it is open to infer that G+T had the alleged knowledge from the matters particularised in 62 and his Honour erred by refusing to have regard to those matters. Second, KTC submitted that the primary judge should have, in any event, granted leave to file the FASOC, given the nature of the allegations and the pleaded cause of action. 374 As to the first reason, KTC submitted that it is open to infer that in providing advice to GRL and ECL in relation to GRL's funding, and in drafting and advising on the shareholders' agreements with evolving terms for the issue of shares to SIL, G+T knew about the consideration ascribable to the proposed share issue. KTC further submitted that, given the circumstances, it is also likely that G+T was aware that the ECL Share Issue (and events following) would be contentious. In those circumstances, an experienced practitioner specialising in mergers and acquisitions, fundraisings and joint ventures would be acutely aware of the relevance of the consideration to be ascribed to the GRL Share Issue. 375 Central to KTC's submissions in relation to grounds 12 to 14 is that the primary judge erred by refusing to read-in the cross-reference to of the FASOC. KTC submitted that cross-referencing in this manner is a commonly employed drafting technique, and assists in keeping a pleading brief, consistent with r 16.02(1)(b) of the Rules. 376 Further, KTC submitted that even if the matters set out in of the FASOC were complex, they were particulars properly pleaded and not material facts. The relevant material facts were the matters that G+T was alleged to have knowledge of and those matters were particularised at of the FASOC. Irrespective, KTC contended that the pleading disclosed a reasonable cause of action and G+T had fair notice of KTC's case, those being the essential matters informing a strike out application according to modern authority. 377 In addition, KTC submitted that the particulars to of the FASOC demonstrate that G+T had actual knowledge that SIL paid no consideration for the 60 shares issued to it by GRL because of the various changes to the shareholders agreements drafted by G+T (detailed at (iii) and of the FASOC). 378 In response, G+T said that payment "in kind" for the GRL Share Issue was made by SIL giving up an entitlement to redeemable preference shares contained at cl 9 of the First Purported Shareholders' Agreement (particular (i) to of the FASOC). However, KTC submitted that the First Purported Shareholders' Agreement was not validly executed, as it did not have ECL board approval (particulars (ii), (iii) and (vii) to of the FASOC). Further, KTC submitted that G+T knew that the document was invalid because following execution of the First Purported Shareholders' Agreement, G+T prepared the March 2010 Draft GRL Shareholders' Agreement (particular (iv) to [62(n)] of the FASOC), recital 1A of which reads: The parties entered into the The Shareholders of Global Renewables Limited have been operating the business under the existing Shareholders Agreement (Existing SHA) since completion of the purchase of Global Renewables Australia Pty Ltd in on 1 Febr January 2009.on 24 November 2009 379 As Senior Counsel for KTC explained in detail during the hearing, there was not in fact any pre-existing shareholders agreement pursuant to which the shareholders had been operating the business since January 2009 (particular (vi) to [62(n)] of the FASOC). Marked-up recital 1A therefore indicated that G+T was of the view that the First Purported Shareholders' Agreement was of no force or effect and that there was no consideration given for the GRL Share Issue. 380 As to the second reason, KTC reiterated its submission that the primary judge should have granted leave to file the FASOC given the nature of the allegations against the Respondents and the cause of action of pleaded. In particular, KTC submitted that where a plaintiff alleges accessorial liability, he or she is entitled to plead the requisite knowledge in general terms and defer particularisation until after discovery, provided there is some evidence on which the plaintiff can plead a dishonest and fraudulent design: see, eg, Arab Monetary Fund v Hashim (No 2) [1990] 1 All ER 673 at 679 (Hoffman J). 381 The primary judge held (at [22]) that the pleading did not support an inference that G+T knew the GRL Share Issue was for no consideration. Further, his Honour added (at [23]) that, even assuming that regard could be had to the particulars in of the FASOC, that lent no further assistance to KTC's claim. G+T endorsed the primary judge's reasoning and submitted that there was no error in this approach. 382 In reply, KTC submitted that G+T's position was unsupported by the primary judge's reasoning. According to KTC, the primary judge failed to consider the critical document in this aspect of the reasoning, being the March 2010 Draft GRL Shareholders' Agreement (which G+T had prepared). KTC reiterated its earlier submission, namely, that the March 2010 Draft GRL Shareholders' Agreement included a marked-up recital deleting reference to an earlier shareholder agreement, indicating that G+T held the view that that earlier shareholder agreement was of no force or effect (and hence payment for the GRL Share Issue was not made by SIL giving up an entitlement to redeemable preference shares pursuant to it). According to KTC, it followed that G+ T knew the GRL Share Issue was for no consideration. 383 In relation to this issue, G+T further submitted that KTC was placing undue emphasis on minor, inconsequential amendments to the recitals of the March 2010 Draft GRL Shareholders' Agreement. In particular, G+T submitted that, as a matter of grammatical expression, the deletion of the words 'The parties entered into' does not change the meaning of the words in the recital in the manner which KTC contends. Accordingly, G+T submitted that even if some alternative construction could be given to the recital prior to and after the amendment, those minor changes to a non-operative part of a contract do not provide a sufficient foundation from which serious allegations of knowledge of fraud are to be inferred. 384 KTC also addressed this matter in reply. In particular, KTC maintained that G+T's submission ignores both the significance of the deletion, and the discrete knowledge to which the pleading is directed, namely, that Mr Bullock knew at all material times prior to the GRL Share Issue that SIL paid no consideration for the GRL Share Issue (see of the FASOC)). 385 Finally, in relation to grounds 12 to 14, G+T submitted that KTC's reliance on generalised assertions about the "nature of the allegations and cause of action" were misconceived. G+T added that notwithstanding KTC's adoption of the nomenclature of a 'dishonest and fraudulent design', it has failed in substance to allege accessorial liability of the kind necessary to engage the second limb of Barnes v Addy. 386 The above, somewhat laborious, recitation of the contending positions in relation to grounds 12 to 14 (albeit in summary only) speaks for itself as to why the FASOC should be allowed and the issues tested at trial. This conclusion should not be taken as endorsing any laxness in pleading the issues for determination and the facts upon which they are founded. I refer to what was said by a Full Court in Oztech at [28]-[32], of which the learned primary judge and I were both members. However, the conjecture between the parties about the proper characterisation of the facts concerning the involvement of G+T, and how that should be legally characterised, should in my view be determined following a trial of the proceeding. 387 I refer to and repeat what I have said above at [293]-[297] and [330]-[332] concerning the unique utility of a trial when it comes to gaining a full understanding of the proper contextual characterisation of conduct. In cases such as the present, where there is a cluster, or clusters, of comingled complexity, there is room for rational differences of analysis in relation to the meaning and effect of the conduct of the actors involved. These are matters which should be resolved at trial rather than on the basis of an inadequacy in the verbal formulation adopted by the pleader. Accordingly, I would allow grounds 12 to 14.

Grounds 1 and 2 388 Having found that 72 and 74 of the FASOC were not adequately pleaded as against G+T (see primary judge's reasons at [16]-[19], [20], [22]), the primary judge proceeded on the basis that those matters were also fatal to KTC's pleaded ECL Share Conduct (at [24]-[25], [31]). 389 KTC submitted that the primary judge erred in this respect as 72 and 74 only concerned G+T's participation in, and knowledge of, the GRL Share Conduct and did not relate to G+T's participation in, and knowledge of, the ECL Share Conduct. Accordingly, by grounds 1 and 2, KTC contended that the primary judge conflated the issues which arose in relation to the ECL Share Conduct and GRL Share Conduct, when his Honour should have considered each of the issues which arose in relation to the ECL Share Conduct separately. 390 KTC submitted that it was particularly important for the primary judge to have separately considered the GRL Share Conduct and ECL Share Conduct in circumstances where his Honour had earlier held that KTC had sufficiently alleged that G+T knew that Mr David and RAAL were engaged in a dishonest and fraudulent design in relation to the ECL Share Conduct: see KTC v David (Pleadings) [2019] FCA 1566 at [25]-[29]. 391 During the hearing, Senior Counsel for KTC was asked whether, as pleaded, there were two dishonest and fraudulent designs - one relating to the ECL Share Conduct and one relating to the GRL Share Conduct, in which the latter was contingent on the former - or essentially a single dishonest and fraudulent design. Senior Counsel submitted that each of the ECL Share Conduct and GRL Share Conduct are said to constitute a dishonest and fraudulent design and together also constituted a dishonest and fraudulent design. However, Senior Counsel conceded that KTC had not pleaded 'connective conduct' between the different schemes and this deficiency, if it be one at all, might be overcome by minor amendments to the pleading. 392 In response, G+T submitted that the primary judge had not conflated the ECL Share Conduct and GRL Share Conduct and plainly recognised the distinction between the two aspects of the pleading. Indeed, the primary judge observed at [24] that: "[t]he parties both proceeded on the basis that the issues which arose in relation to the ECL Share Conduct were the same [as those in relation to the GRL Share Conduct]. I will act on that assumption too." 393 G+T further submitted that KTC cannot now contend that the parties did not proceed on that assumption before his Honour. In addition, KTC conceded that the primary judge separately considered the ECL Share Conduct in the context of the pleaded Constructive Trust Fraudulent Scheme. G+T relied on this as supportive of its contention that the primary judge had not conflated the ECL Share Conduct and GRL Share Conduct in his Honour's reasoning. 394 In my view, a careful reading of the primary judge's reasons does not indicate his Honour "conflated" the ECL Share Conduct and GRL Share Conduct or in any way misunderstood that the ECL Share Conduct involved separate, anterior conduct to the GRL Share Conduct. In fact, it appears that to the extent there was any overlap in his Honour's consideration of those issues, it was because both parties proceeded on that basis at first instance. 395 His Honour's approach is particularly justifiable having regard to the particular phrasing at [97]-[100] of the FASOC: Bullock's & G+T's knowing assistance in the David ECL Share Conduct and the David GRL Share Conduct 97. The knowledge of Bullock of the matters referred to in paragraphs 74, 75 and 76 was knowledge of G+T. PARTICULARS KTC refers to and repeats paragraphs 8, 148 and 149 herein and says that the knowledge of Bullock was the knowledge of G+T, comprising Bullock's partners. 98. By giving the G+T Legal Advice and advice that it was lawful to make the ECL Share Issue, and by giving legal advice that it was lawful to make the GRL Share Issue, and by assisting in preparing the documentation to effect those transactions, Bullock and G+T assisted David with the David ECL Share Conduct and the David GRL Share Conduct and the dishonest breaches of his fiduciary duties as set out in paragraph 82 above as part of a dishonest and fraudulent design. 99. By reason of the matters in paragraphs 74, 75 and 76 Bullock and G+T knew that they were engaged in conduct to further the David ECL Share Conduct, the David GRL Share Conduct and the dishonest breaches of his fiduciary duties as set out in paragraph 82 above as part of a dishonest and fraudulent design. 100. KTC has suffered loss and damage, alternatively Singh and SIL have improperly profited, as a consequence of the David Fraudulent Scheme, and Bullock and G+T knowingly assisted in the David ECL Share Conduct, the David GRL Share Conduct and the dishonest breaches of his fiduciary duties as set out in paragraph 82 above as part of a dishonest and fraudulent design. PARTICULARS KTC refers to and repeats the particulars to paragraph 83 Further particulars of KTC's loss and Singh's and SIL's improper profits will be provided upon the filing of expert evidence. 396 Properly read in context, that pleading is apt to suggest that KTC alleged a single dishonest and fraudulent design. In any event, the ECL Share Conduct and GRL Share Conduct are inextricably linked and at least the latter is contingent on the former. Notwithstanding the views I have expressed in relation to the other grounds of appeal, I do not accept that the primary judge erred by grounds 1 and 2, especially having regard to the manner in which the matter was argued before his Honour. 397 However, in the interests of avoiding further arid pleadings arguments, I would allow such further amendment as may be desirable for the clearer articulation by KTC of the dishonest and fraudulent design, or designs, it relies upon, and if more than one, their connection, if any, to each other.

Grounds 6 and 7 398 Grounds 6 and 7 relate to whether KTC pleaded a reasonable cause of action against G+T in relation to the Constructive Trust Fraudulent Scheme. The relevant paragraphs of the FASOC are [128]-[129]: 128. In breach of the duties set out in paragraph 127 RAAL: (a) at all times prior to 23 November 2011: (i) refused to transfer 49,900, alternatively 24,950, shares in ECL to KTC; (ii) took no steps to have ECL rectify its register of members such that KTC and RAAL each owned 50 shares of USD1 each; and (iii) actively defended KTC's claim in the Grand Court of the Cayman Islands to have the Liquidators of ECL rectify its register of members such that KTC and RAAL each owned 50 shares of USD1 each. PARTICULARS In or about January 2011 KTC and RAAL filed a joint petition in the Grand Court, Cayman Islands, and thereby applied for the liquidation of ECL to be brought under the supervision of the Court. On 2 June 2011, the Grand Court, Cayman Islands, ordered that the joint petition proceed as if it were commenced by writ between KTC as applicant and RAAL as respondent, on the issue of the validity of the Resolution and Share Issue (ECL Share Issue Proceeding). On the 23 November 2011, the Grand Court, Cayman Islands, made findings in the ECL Share Issue Proceeding that the RAAL Resolution and ECL Share Issue were made in breach of David's and Mavros' fiduciary duties to ECL and ordered that the Liquidators be directed to rectify ECL's register of members to reflect that KTC and RAAL each own 50 shares of US$1 each. On a date after 23 November 2011, the Liquidators of ECL rectified ECL's register of members to record that KTC and RAAL each held 50 shares of US$1 each. A copy of the Judgment of the Honourable Justice Andrew J Jones QC on 23 November 2011 in Cause No FSD 29 of 2011 (AJJ) filed in the Grand Court of the Cayman Islands between KTC (Applicant) and RAAL (Respondent) is in the possession of KTC's solicitors and may be inspected by appointment. (b) between 28 January 2010 and 23 November 2011, used its control of ECL to the detriment of KTC, and to the benefit of Singh, SIL and XALT by: (i) procuring the GRL Share Issue and thereby: (A) acted contrary the interests of KTC, by reducing ECL's interest in GRL from 80% to 50% without benefit to ECL; (B) used its position to improperly advantage SIL, by increasing its interest in GRL from 20% to 50% for no consideration, alternatively consideration that was colourable or illusory, and (ii) causing ECL to proceed with the IBC Sale instead of the First KTC Offer, alternatively the Second KTC Offer, and thereby: (A) acted contrary to the interests of KTC, by causing ECL to sell its shareholding in GRL for AUD2.5 million less than the value attributed to those shares by the Second KTC Offer; (B) used its position to improperly advantage Singh, by selling GRL at less than market value to a buyer on terms that Singh could maintain a 50% interest in the Waste Facility. 129. The dishonest breaches of trust set out in paragraph 128 constituted a dishonest and fraudulent design on the part of RAAL (Constructive Trust Fraudulent Scheme). 399 Having regard to the primary judge's earlier findings in relation to the ECL Share Conduct and GRL Share conduct, his Honour held that the allegations against G+T in relation to the Constructive Trust Fraudulent Scheme were not maintainable (at [37]-[40]). KTC submitted, and G+T accepted, that grounds 6 and 7 were thus consequential on the other grounds of appeal. 400 Having already concluded that KTC should succeed in relation to grounds 3-5, 8-9, 10-11 and 12-14 (but not grounds 1-2), it also follows that KTC has pleaded a reasonable cause of action against G+T in relation to the Constructive Trust Fraudulent Scheme.

Grounds 15 and 16 401 Grounds 15 and 16 are only relevant on the assumption that KTC's appeal is unsuccessful on the grounds discussed above. 402 By grounds 15 and 16, KTC submitted that the primary judge erred in not granting leave to file the FASOC in relation to the First, Second and Third Respondents, subject to deletion of the claims against G+T. The predicate of KTC's submission is that the application to file the FASOC was not opposed by the First, Second and Third Respondents and it was inappropriate, in those circumstances, to dismiss the application in its entirety. 403 The Second and Third Respondents maintained that while they did not oppose the granting of leave to file the FASOC, and did not make substantive submissions before the primary judge, it does not follow that the primary judge erred in dismissing the claim in its entirety. In this regard, the Second and Third Respondents submitted that the claims pleaded against them are not independent of those aspects of the FASOC that were successfully challenged before the primary judge. Accordingly, the Second and Third Respondents submitted that the pleading cannot have an independent operation against them once those aspects of the FASOC are severed. 404 By way of example, the Second and Third Respondents submitted that if the primary judge's finding that there was no dishonest or fraudulent design capable of being substantiated on the pleading, the claim for knowing assistance against the Second Respondent at [134]-[136] of the FASOC is also demurrable. 405 In short, it was the Second and Third Respondents' contention that the proper approach was for the primary judge to dismiss KTC's application in its entirety, allowing each party to then consider their respective positions and make such further applications as they may be advised. The Second and Third Respondents submitted that such an approach is consistent with the conclusions reached by the primary judge in relation to the fundamental deficiencies in the pleading as well as the overarching purpose in s 37M of the Federal Court Act. The Second and Third Respondents acknowledged that it may be necessary for the matter to be remitted to the primary judge, including in relation to the filing of a new pleading reflecting the reasons of this Court. 406 In reply, KTC submitted that the claims against the Second and Third Respondents fundamentally differ from those against G+T. According to KTC, neither the Second and Third Respondents, nor the primary judge, identified why leave should not be granted to file the FASOC against at least those respondents and, accordingly, the proceeding ought not be dismissed in its entirety. 407 G+T did not make any submissions in relation to this issue as it is not a matter which concerns its interests. 408 As I have said, this issue does not arise given the conclusions I have expressed above. However, given the conclusions reached by Wigney J and Jackson J, I consider it necessary to add that I agree with KTC's contention in relation to grounds 15 and 16. 409 The Second and Third Respondents did not seek to strike out any aspects of the FASOC before the primary judge. Further, the primary judge made no express finding that the allegations against the Second and Third Respondents were not maintainable once the claims against G+T fall away. Thus, to the extent it is relevant, in my view the matter should be remitted to the primary judge to make such directions as might be thought appropriate in relation to any extant claims, including, if necessary, the filing of a substantially revised statement of claim against the First, Second and Third Respondents.

Disposition 410 During the course of the hearing, KTC submitted that if the appeal were allowed in full, it would not seek leave to amend its FASOC, other than in relation to relatively inconsequential or insignificant matters. KTC submitted, however, that if the appeal were only allowed in part, then the matter would need to be remitted to the primary judge and it ought to be afforded an opportunity to further amend its pleading. 411 For the reasons I have expressed, I consider that leave to appeal should be granted, appeal grounds 3 to 14 allowed and the orders made by the primary judge on 17 July 2020 set aside. I would also make orders that KTC be afforded a further opportunity to amend its pleading in accordance with these reasons, but only in relation to matters that are directed to clarification and not otherwise of substance. I certify that the preceding one hundred and eighty-one (181) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anastassiou.

JACKSON J: 412 I have had the considerable benefit of reading, in draft, the judgments of both Wigney J and Anastassiou J. 413 I agree with each of their Honours that leave to appeal should be granted for the reasons their Honours give. I also agree with Wigney J that the affidavit to which his Honour refers at [5] is relevant and should be admitted into evidence. 414 I have, however, come to the conclusion that the appeal should be dismissed. Unfortunately, and with respect to both of my colleagues on this bench, that is not because I agree entirely with the judgment of Wigney J, and nor is it because I disagree entirely with the judgment of Anastassiou J. That is especially unfortunate because it requires yet another judgment to navigate the tortuous terrain of the PFASC (I will use the defined terms in Wigney J's judgment). I will try to do so as briefly as possible, and to the extent possible by reference to Wigney J's and Anastassiou J's reasons, with which I will assume familiarity. 415 G+T are alleged to be liable to KTC because they are said to have knowingly assisted in dishonest and fraudulent schemes involving breaches of fiduciary duties perpetrated and committed by Mr David and RAAL (where I refer to G+T that includes a reference to Mr Bullock). I agree with Wigney J for the reasons his Honour gives that the way in which the pleading identifies at least six dishonest and fraudulent schemes is itself embarrassing. But that cannot dispose of the appeal, as it was not raised before the primary judge and was not the subject of a notice of contention in this appeal. 416 For present purposes, and in so far as G+T are concerned, the dishonest and fraudulent schemes centred around two transactions: the issue of shares in Emergent to RAAL in January 2010 and the issue of shares in Global Renewables to Singh Investments in April 2010.

Issue of shares in Global Renewables: pleading of G+T's knowledge 417 For reasons that will become apparent, I will start with the transaction that is later in time. I respectfully agree with Wigney J and the primary judge that, for the reasons their Honours each give, the plea that G+T knew that Singh Investments paid no or colourable consideration for the issue of shares in Global Renewables in April 2010 lacks particulars that are capable of supporting it. 418 I also agree with their Honours that it follows that this plea of knowledge is not maintainable. I agree with Wigney J's summary of the relevant principles, but on the plea of knowledge would emphasise the following propositions: (1) Two important functions of pleadings and particulars are to furnish a statement of the case that is sufficiently clear to allow the other party a fair opportunity to meet it and to define the issues for decision in the litigation: Dare v Pulham (1982) 148 CLR 658 at 664. (2) In general, and in the context of modern case management principles, the courts do not take a technical or restrictive approach to pleadings: Thomson v STX Pan Ocean Co Ltd [2012] FCAFC 15 at [13], citing Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82 at [4]-[8]. (3) But where fraud is pleaded, or something analogous to it such as knowing participation in a dishonest and fraudulent design, a rigorous approach will still be taken: see Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [170]; Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 at [26]; Young Investments Group Pty Ltd v Mann [2012] FCAFC 107 at [9]. (4) Rule 16.43 of the Federal Court Rules 2011 (Cth) provides that a party who pleads a condition of mind, which includes knowledge, must state in the pleading particulars of the facts on which the party relies. (5) Even in the absence of a rule of that kind, there are sound reasons for requiring knowledge to be particularised, at least in relation to allegations such as fraud or intentional participation in the breach of another: see Young Investments at [11]. (6) That requires particulars of the facts and circumstances from which it is said that the party knew (or ought to have known) the relevant matter. Those facts may include an admission or communication from which it must follow that the relevant party had the relevant knowledge. Or they may include facts and circumstances from which it can be inferred that the party had the knowledge: see Young Investments at [10]; Webster (Trustee) v Murray Goulburn Co-Operative Co Ltd (No 2) [2017] FCA 1260 at [6]. 419 In the present case, and fundamentally then, G+T are entitled to a pleading that puts them on notice of alleged communications (whether to or from G+T) that indicate that G+T knew of Mr David's and RAAL's alleged dishonest and fraudulent schemes, or of facts or circumstances from which it can be inferred that they knew of them. For the reasons given by Wigney J and the primary judge, the PFASC fails to put G+T on notice of either of those things in relation to the key allegation that they knew the issue of shares in Global Renewables was for no or colourable consideration, so as to give G+T a fair opportunity to prepare their case. 420 In the absence of particulars of that kind, the bare plea of knowledge cannot stand. I agree with Anastassiou J's observations (made in the course of deciding whether to grant leave to appeal) that there are inevitably limits to the ability of any pleading to capture in writing inferences of fact and wrongdoing, where those conclusions are distilled from a multiplicity of objective facts and disputed events. But in my view, the way in which KTC has pleaded that G+T knew relevant matters is fundamentally deficient. I agree with Wigney J that this applies not just to KTC's allegations as to G+T's actual knowledge of the specific matters alleged at PFASC para 74, but also to its allegations as to the knowledge of dishonest and fraudulent schemes, at two of the four levels of knowledge described in Baden v Société Générale pour Favoriser le Développement du Commerce et de l'Industrie en France SA [1993] 1 WLR 509; [1992] 4 All ER 161, namely wilful blindness and knowledge of circumstances that would have indicated the truth to an honest and reasonable person. 421 As such, the PFASC does not disclose a reasonable case against G+T in relation to knowing assistance with respect to the issue of shares in Global Renewables that took place in April 2010. I will return below to the consequences of that for the purposes of this appeal. But first it is necessary to deal with the preceding transaction that is impugned, namely the issue of shares in Emergent in January 2010.

Issue of shares in Emergent: pleading of dishonest and fraudulent scheme 422 For the reasons given by Anastassiou J, and with respect, I consider that the primary judge erred in concluding that the PFASC does not disclose a case to the effect that the issue of shares in Emergent involved a dishonest and fraudulent scheme. The primary judge focussed on the role of the third director of Emergent, Mr Mavromanolakis, who voted in favour of the issue of shares in January 2010. His Honour also focussed on the absence of any allegation that Mr Mavromanolakis was dishonest or was duped. But it is still possible, on the facts pleaded, that there was a dishonest or fraudulent design. KTC pleads that Mr David concealed from the Kazals and KTC the fact that the board of Emergent was going to vote on the resolution to issue the shares: PFASC para 38(c). Such concealment, in all the other circumstances pleaded, if established, might be found to be dishonest and might be found to have led to the issue of the shares. The proper characterisation of Mr David's conduct in that regard (and that of RAAL) can only be reached after a trial that allows full consideration of the evidence.

Issue of shares in Emergent: pleading of G+T's knowledge 423 I respectfully disagree with Anastassiou J, however, that this disposes of KTC's appeal. Even if the PFASC does plead a reasonable case that Mr David and RAAL engaged in a dishonest and fraudulent design in respect of the January 2010 issue of shares in Emergent, as against G+T, it is still necessary to plead a reasonable case that the firm knowingly participated in that design. 424 Contrary to KTC's submissions on appeal, I do not consider that the primary judge had no difficulty with the pleading of the knowing assistance component of the case concerned with the January 2010 issue of shares in Emergent. It is true that this aspect of the pleading was not the subject of any detailed reasoning on the part of the primary judge, and is not the subject of any ground of appeal. But the primary judge did reach a conclusion on it. His Honour did so, in very brief terms, by saying (at [24]) that the parties both proceeded on the basis that the issues that arose in relation to the allegations about Mr David's and RAAL's conduct concerning the issue of shares in Emergent in January 2010 were the same as those that arose in relation to the allotment of shares in Global Renewables, and that his Honour would also proceed on that basis. I agree with Wigney J that this amounted to a finding that the allegations concerning G+T's knowledge of and advice in relation to the January 2010 issue of shares in Emergent were not supported by the particulars. That is why it has been convenient to deal with the allegations of G+T's knowledge of the April 2010 issue of shares in Global Renewables before dealing with the earlier issue of shares in Emergent. 425 I agree with Wigney J and with Anastassiou J, for the reasons their Honours give, that grounds of appeal 1 and 2, which attack the primary judge's approach at [24], must fail. That being so, his Honour must be taken to have determined that G+T's knowledge of the dishonest and fraudulent scheme or schemes involving the issue of shares in Emergent in January 2010 has not been adequately particularised, for reasons similar to his Honour's reasons in relation to knowledge of the April 2010 issue of shares in Global Renewables. 426 Presumably because KTC took the view that the primary judge had not reached a conclusion, it did not advance any case on appeal going to the substance of the point, that is, to whether G+T's knowledge of the facts that made the issue of shares in Emergent part of a dishonest or fraudulent scheme was adequately pleaded and particularised. But Wigney J has addressed the substance of the point, and has concluded that the pleaded facts do not disclose a reasonable or sustainable basis for alleging that G+T knew that Mr David was engaged in a dishonest and fraudulent design in relation to the Emergent share issue and that G+T were assisting in that design. For the reasons Wigney J gives, I agree that the case as to G+T's knowledge has not been adequately pleaded. 427 For reasons similar to those I will briefly state below in relation to grounds 8 to 11 concerning the April 2010 issue of shares in Global Renewables, however, I do not find the plea as to G+T's assistance, as distinct from its knowledge, to be so fundamentally defective that it should not be permitted to proceed.

Conclusions as to the grounds of appeal 428 Before considering where these conclusions leave the appeal, I should record the views I have reached on the grounds of appeal. I have already indicated that, like Wigney J and Anastassiou J, I would not uphold grounds 1 and 2, which assert error because the primary judge proceeded on the basis that the issues that arose in relation to the January 2010 issue of shares in Emergent were the same as the issues that arose in relation to the April 2010 issue of shares in Global Renewables. 429 I have also indicated that, like Anastassiou J, I would uphold grounds 3, 4 and 5 in relation to whether the pleading discloses a reasonable case that the January 2010 share issue in Emergent was part of a dishonest and fraudulent scheme. 430 Grounds 6 and 7 concern what is called the Constructive Trust Fraudulent Scheme. They attack the primary judge's conclusion that no reasonable and sustainable case relying on that scheme was pleaded. As Anastassiou J has said, the parties proceeded on the basis that success in the appeal for KTC in relation to those grounds is dependent on success in relation to the other grounds concerning the two share issues. For the same reasons as I would uphold grounds 3, 4 and 5, I would uphold grounds 6 and 7 as originally framed, that is, to the extent that they assert only that KTC has adequately pleaded a case that the Constructive Trust Fraudulent Scheme was a dishonest and fraudulent scheme. But I agree with Wigney J that the pleas that G+T had the requisite knowledge in relation to that scheme are deficient, and in any case the pleading of knowledge is not addressed in grounds 6 and 7. 431 Grounds 8 and 9 concern the allegation that G+T assisted in the dishonest and fraudulent schemes involving the April 2010 issue of shares in Global Renewables by advising Global Renewables, Mr David and others that it was lawful to make the share issue. The grounds allege error in the primary judge's holding that assistance was not adequately particularised. For the reasons given by Anastassiou J, these grounds should be upheld. The particulars to the allegation (which is at para 72(e) of the PFASC) include an allegation that G+T were retained to advise in relation to and draft 'the GRL Share Issue'. It is true that this is defined at para 41 to mean a share issue, as distinct from the document that effected it (defined as 'the GRL Share Resolution'), but in my view that is simply the result of the pleaders being led astray by their overuse of defined terms, and so is an oversight that can be easily fixed. 432 It is also alleged at para 72(a)(v) that G+T were retained to provide legal services in relation to the GRL Share Issue. Particulars given of that allegation are specified invoices. I do not consider those particulars to be inadequate. Although they could be characterised as evidence, rather than proper particulars, G+T do not make that complaint. In the end, the pleading and particulars put G+T fairly on notice that it is alleged that they gave advice in relation to the 'GRL Share Issue' and that this is itemised, presumably, in the accounts that they rendered. It is open to infer from those facts and the usual scope of a lawyer's retainer that the advice included advice to the effect that the share issue was lawful. Of course, whether that inference should be made is a matter for trial. 433 Grounds 10 and 11 concern the claim that G+T assisted Mr David and RAAL in relation to the alleged dishonest and fraudulent schemes involving the April 2010 issue of shares in Global Renewables by assisting in preparing the documentation to effect the share issue. The grounds similarly allege that the primary judge erred in finding that the particulars given in the PFASC are inadequate. I agree with Anastassiou J that these grounds should be upheld. The grounds focus on para 72(f) in the PFASC, which alleges that G+T assisted in preparing the documentation to effect the making of 'the GRL Share Issue'. Once again, it is reasonable to read that as a reference to the documentation itself, namely 'the GRL Share Resolution'. For the reasons given above in relation to grounds 8 and 9, I do not consider the particulars given of that allegation are inadequate. If G+T did draft the document that effected the share issue, on its face that is capable of being assistance with the issue. The particulars put G+T on fair notice of the case to be made against them in this regard. 434 However these acts of assistance - advising and preparing documents - if they were performed, cannot found liability in G+T in respect of the April 2010 issue of shares in Global Renewables unless G+T knew that the issue was part of a dishonest and fraudulent scheme (knew, that is, in any of the first four senses set out in Baden as endorsed in Farah Constructions). That is the subject of grounds 12 to 14 of the appeal. For reasons I have already given, I agree with Wigney J that grounds 12 and 13 should not be upheld. Ground 14 asserts that the primary judge erred in holding that the particulars to para 62(n) of the PFASC ought to have been pleaded as allegations of material fact. In the circumstances, that formal point adds nothing to the resolution of the determinative issues between the parties and for that reason I do not uphold it. 435 Grounds of appeal 15 and 16 assert that the primary judge erred in not granting leave to file the PFASC in so far as it addressed KTC's claims against Mr David, Mr Singh and XALT. I will return to that after I have addressed the final disposition of the appeal as against G+T.

Summary of conclusions on appeal 436 The result of the views I have reached, when combined with the respective views of Wigney J and Anastassiou J, is that, with respect, KTC has succeeded in establishing that, contrary to the conclusions of the primary judge: (1) KTC has pleaded a reasonable and sustainable case that the January 2010 issue of shares in Emergent was part of a dishonest and fraudulent scheme; (2) KTC has pleaded a reasonable and sustainable case that G+T assisted in the alleged dishonest and fraudulent schemes involving the April 2010 issue of shares in Global Renewables, by advising Global Renewables, Mr David and others that it was lawful to make the share issue; and (3) KTC has pleaded a reasonable and sustainable case that G+T assisted in relation to the alleged dishonest and fraudulent schemes involving the April 2010 issue of shares in Global Renewables, by assisting in preparing the documentation to effect the share issue. 437 KTC has not, however, established any error in the following conclusions reached by the primary judge: (1) KTC has not pleaded a reasonable and sustainable case that G+T had the requisite knowledge that the January 2010 issue of shares in Emergent was part of one or more alleged dishonest and fraudulent schemes; and (2) KTC has not pleaded a reasonable and sustainable case that G+T had the requisite knowledge that the April 2010 issue of shares in Global Renewables was part of one or more alleged dishonest and fraudulent schemes. 438 In the event it has not been necessary, however, for this Court to express a view as to whether KTC has pleaded a reasonable and sustainable case that G+T assisted in relation to the alleged dishonest and fraudulent schemes involving the January 2010 issue of shares in Emergent. It is unnecessary because of the manner in which the appeal will be disposed of, to which I will now turn.

Re-exercise of discretion 439 In the end, the primary judge exercised two discretions adversely to KTC: the discretion to permit amendment in the terms of the PFASC and the discretion to permit further repleading so that KTC's case against G+T could proceed to trial. The errors in his Honour's judgment that have been established require this Court to re-exercise the discretions. 440 In my view, the appropriate way to exercise the discretions is to refuse leave to rely on the PFASC and to dismiss the claim as against G+T (including Mr Bullock). The deficiencies in the pleading as to knowledge which I, like Wigney J and the primary judge, consider to be present are fundamental to the case against G+T. If there is no reasonable and maintainable case that they knew (in any of the requisite senses) about the alleged dishonest and fraudulent schemes, then the case against them must fail. While the primary judge reached no express conclusion about the plea as to G+T's knowledge of the Constructive Trust Fraudulent Scheme, as KTC's submissions implicitly acknowledge, that must stand or fall with the pleas as to G+T's knowledge in relation to the two share issues. 441 The history of KTC's several attempts to plead the case properly, as described by Wigney J and the primary judge, compel the conclusion that leave to replead should not be given, meaning the case against G+T must be dismissed. KTC's appeal was based on the contention that the primary judge erred in finding that the pleading was deficient, not on any contention that the discretion his Honour exercised as a consequence miscarried. In the result, then, the appeal must be dismissed. 442 Given the conclusion I have reached about the appeal, it is not necessary for me to express a view on the notice of contention.

The case against the first three respondents 443 To return, then, to where that leaves the case against Mr David, Mr Singh and XALT, I agree with Wigney J and Anastassiou J that the proceeding in so far as it concerns them should be remitted to the primary judge. As each of their Honours has indicated, the primary judge may make such directions as he thinks appropriate in relation to KTC's claims against Mr David, Mr Singh and XALT, including, if necessary, the filing of a substantially revised statement of claim. In deciding whether to give leave to replead and on what terms, his Honour will have regard to the fact that my reasons, combined with those of Anastassiou J, mean that the pleading that the 2010 issue of shares in Emergent was part of a dishonest and fraudulent scheme is not so fundamentally deficient that leave to make it should be denied. Also, it followed from the primary judge's different view that, as his Honour said at [39] of his summary judgment decision, it was impossible coherently to imagine what was dishonest in using the control of Emergent thus delivered to effect the issue of shares in Global Renewables. The opinion held by Anastassiou J and myself that there could still be a dishonest and fraudulent scheme in relation to the Emergent share issue means that that conclusion of the primary judge also, with respect, cannot stand and will need to be reconsidered. The primary judge will also need to take into account that my reasons, combined with those of Anastassiou J, mean that KTC has pleaded a reasonable and sustainable case that the Constructive Trust Fraudulent Scheme was a dishonest and fraudulent scheme. 444 However, depending on how the issue comes back before the primary judge, he may also need to take into account that, as Wigney J has said and I have agreed, there are difficulties with the way that the PFASC seeks to extract at least six dishonest and fraudulent schemes from the underlying circumstances. It may be, as Wigney J says, that this problem cannot be remedied by minor surgery to the pleading, but in any event the success of G+T's appeal plainly calls for major surgery before KTC can proceed with its claim against the remaining respondents. That is why I say it depends on how the matter comes back before the primary judge; whether that will be in the course of considering yet another amended (or substituted) statement of claim is a matter for his Honour. 445 It is therefore appropriate not to set aside the primary judge's order dismissing KTC's application for leave to file the PFASC (or his Honour's other orders), and I would not uphold grounds 15 and 16. 446 On that basis, I agree with the orders proposed by Wigney J. I certify that the preceding thirty five (35) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jackson.

SCHEDULE OF PARTIES NSD 838 of 2020 Respondents Fourth Respondent: D.T GILBERT & W.R SPAIN & C.G CONDOLEON & ORS TRADING AS GILBERT + TOBIN (ABN 88 775 098 848) Fifth Respondent: ANDREW BULLOCK