Plaintiff v Defendant

EQUITY - Breach of fiduciary duty - No power or basis to issue units at a discount - Knowing receipt of trust property.

EQUITY - Laches and acquiescence - Leave to amend defence refused as defence will fail - Lack of clean hands - Unconscionable for defendants to derive benefit from their own wrongdoing.

AGREEMENT - Whether claims compromised by Finalisation Agreement - Whether concluded agreement reached.

ESTOPPEL - Equitable estoppel - Representation as to future conduct - Assumption induced by or arising out of conduct - Defendant suffered detriment by relying on assumption - Plaintiff estopped.

CIVIL PROCEDURE - Limitation periods - Limitation of Actions Act 1958 (Vic), s 21(1)(a) - Issue of discounted units fraudulent - Claims not statute barred.

TRADE PRACTICES - Misleading or deceptive conduct - Representation as to basis on which unitholders would hold units - Meaning conveyed was misleading or deceptive - Fair Trading Act 1999, s 9 (Vic).

1 The plaintiff ('Bullhead') is a unitholder in the Brickmakers Place Unit Trust ('Unit Trust') and a shareholder in the first defendant, Brickmakers Place Pty Ltd ('Trustee') which acts as trustee of the Unit Trust. Brett Allen Buckland ('Buckland') is a director of Bullhead.

2 The second to sixth defendants are unitholders in the Unit Trust and shareholders in the Trustee. The seventh to twelfth defendants are each a director of one of the second to sixth defendants. Accordingly, the Unitholders (other than Bullhead) and related directors are as follows -

• Kyreli Pty Ltd ('Kyreli') - Carmelo Lastrina ('Charlie')

• Rubeo Pty Ltd ('Rubeo') - Domenic Lastrina ('Domenic')

• Naranda Hall Pty Ltd ('Naranda Hall') - Aldo Lastrina ('Aldo')

• Shey Pty Ltd ('Shey') - Elvis Jafer ('Jafer') and Ursula Simpson ('Ursula')

• Jengeorgia Ltd ('Jengeorgia') - Paul Christofilopoulos ('Paul')

3 The Unit Trust was established to develop "The Brickmakers Place", a residential development in Essendon. The Trustee was incorporated on 20 December 2007 in order to act as trustee to the Unit Trust. At all relevant times Charlie and Ursula were directors of the Trustee.

4 Kyreli, Rubeo, Naranda Hall and Shey ('the Initial Unitholders') executed a unit trust deed on 27 February 2008 ('the Unit Trust Deed') and a Unitholders Agreement on 14 March 2008 ('the Unitholders Agreement').

5 Bullhead executed a deed of accession with the Initial Unitholders and the Trustee on or about 14 March 2008, pursuant to which it acquired 600,000 units in the Unit Trust at a cost of $600,000 ('the Bullhead Deed of Accession').

6 Jengeorgia executed a deed of accession with the Initial Unitholders and the Trustee on or about 14 March 2008, pursuant to which it acquired 720,000 units in the Unit Trust at a cost of $720,000 ('the Jengeorgia Deed of Accession'). Bullhead and Jengeorgia are referred to as the New Unitholders or the New Investors.

7 Bullhead alleges various breaches by the Trustee (and others) and makes various claims, which in summary are as follows -

(a) The Trustee issued units in the Unit Trust to the Initial Unitholders at a discounted price (0.11c per unit) in breach of the terms of the Unit Trust Deed and the Unitholders Agreement ('the Discounted Units'). The New Unitholders paid the full price of $1 per unit.[1] This is the critical issue between the parties.

(b) The Trustee failed to call regular board meetings and provide Bullhead with access to books and accounts in breach of the Unitholders Agreement. This issue was only faintly pressed.

(c) Various breaches of trust and fiduciary duty by the Trustee, including failing to make distributions in proportion to Unitholders' capital contributions, and the failure to obtain the unanimous approval of all Unitholders to the making of such distributions as required by the Unitholders Agreement.

(d) Knowing receipt and assistance, in particular, that each of Charlie, Domenic, Aldo, Jafer and Simpson (and their respective corporate entities) knowingly assisted and benefited from the Trustee's breach of the Unit Trust Deed and the Unitholders Agreement and its breach of fiduciary duties. No claim is made against Paul.

(e) Misleading or deceptive conduct by Charlie, in particular, that the Initial Unitholders would hold units in the Unit Trust in proportion to their capital investment, that this was untrue and that Bullhead relied on this representation to its detriment in breach of s 9 of the Fair Trading Act 1999 (Vic).

(f) Oppression, in particular, that the conduct of the Trustee was oppressive to Bullhead (s 232, Corporations Act 2001 (Cth)). This claim was not pressed.

8 The defendants deny the allegations and assert that the claims are statute barred and in any event fail because of the substantive delay on the part of Bullhead in commencing this proceeding with full knowledge of the relevant facts. Defences of delay acquiescence and laches are raised in a proposed amended defence for which leave is required.[2] In relation to the Discounted Units the defendants deny that units were issued at a discount and contend that the units were issued in consideration for the revised or true value of the property acquired by the Trustee as discussed below. The defendants also contend that the entire dispute between the parties was resolved pursuant to what they have called a Finalisation Agreement. This is also a critical issue in the case.

9 On 14 January 2015, Glenn Crisp and Trajan Kukulovski of Jirsch Sutherland were appointed administrators of the Trustee.

10 The Unit Trust was established specifically for the purpose of developing "The Brickmakers Place" ('the Development' or 'the Project'), a residential development of 43 units in Essendon, Victoria ('Brickmakers Place').

11 As noted, the Trustee was incorporated on 20 December 2007 for the specific purpose of acting as Trustee to the Unit Trust.

12 The Development was primarily managed by Charlie.

13 As noted, on 27 February 2008, Kyreli, Rubeo, Naranda Hall and Shey, the Initial Unitholders and the Trustee executed the Unit Trust Deed.

14 The terms of the Unit Trust Deed include the following:

(a) the Trustee acknowledged receipt of a sum of $2,400,000 from the Initial Unitholders which entitled them to be entered in the register as the holders of the following number of units of the Trust Fund (being the sum of $2,400,000 received from the Initial Unitholders and all other money and property which becomes the subject of the Unit Trust):

(b) subject to any restrictions or conditions in the Unit Trust Deed, the Trustee is entitled to create and issue new units in the Unit Trust to such persons as it by resolution may determine. The issue price for each additional unit will be a price determined on the basis of the net asset value, according to Australian Accounting Principles, of a unit in the Unit Trust at the time of the issue (Clause 5.1);

(c) the Trustee may authorise the payment to the Unitholders of such interim distribution of income as in its judgment appears to be justified by the profits of the Unit Trust (Clause 13.3(a));

(d) the remaining income of the Trust Fund for a financial year is distributed to the persons who at midnight on the last day of the financial year are the Unitholders in proportion to the Units registered in their respective names (Clause 13.3(b));

(e) all distributions of income must be apportioned and paid proportionately to the amounts paid or credited as paid on the Units (Clause 13.3(c)); and

(f) the Trustee may in its discretion determine at any time that the whole or any part of the capital of the Trust Fund be distributed or applied by the Trustee for such persons who at the time of such determination are the Unitholders in proportion to the Units registered in their respective names (Clause 13.6).

15 As noted, on 14 March 2008, the Initial Unitholders and the Trustee entered into the Unitholders Agreement.

16 The terms of the Unitholders Agreement include the following:

(a) each unitholder must, inter alia, be just and faithful in all its activities and dealing with each other party in relation to the conduct of the Business and the implementation of the Unitholders Agreement (Clause 2.2(d));

(b) in the event of any inconsistency between the Unitholders Agreement and the Unit Trust Deed, the Unitholders Agreement shall prevail (Clause 3.1);

(c) each unitholder must exercise its votes and powers (including those of any director appointed by it) so as to ensure that the Trustee fully and promptly observes, complies with and gives effect to the requirements and intentions of the Unitholders Agreement and the Unit Trust Deed (Clause 3.3);

(d) as of the date of the Unitholders Agreement, the Initial Unitholders must apply for, and the Trustee must issue to each of them, units in the Unit Trust at a subscription price of $1 per unit in the numbers set out below:

(e) subject to the provisions of Clause 6.3, each unitholder is entitled to appoint 1 director to the board of directors of the Trustee (Clause 6.1);

(f) at least one board meeting of the board of directors of the Trustee must take place each two calendar months (Clause 7.1(a));

(g) all directors of the Trustee must be given at least 10 business days' notice of a board meeting and that notice must include an agenda and any proposed resolutions (Clause 7.2);

(h) subject to the Corporations Act, the Unit Trust Deed and the Unitholders Agreement, all decisions of the board of directors of the Trustee must be made by simple majority vote (in the case of Unitholders, being Unitholders holding more than 50% of the units in the Unit Trust and in the case of the board of directors, being directors who together represent Unitholders holding more than 50% of the units in the Unit Trust) (Clause 8.1);

(i) a unanimous vote of the board of directors of the Trustee is required in respect of, inter alia:

(i) declaration of dividends (Clause 8.2(k)), which properly interpreted, includes (it was submitted) distributions from the Unit Trust;

(ii) entering into a transaction that is of any unusual nature or outside the ordinary course of the Business (Clause 8.2(i)).

(j) Upon giving 2 business days' notice, each unitholder or any authorised accountant, agent or employee of that unitholder, must be given access during the Trustee's normal business hours, to all the books, accounts, records and facilities of the Unit Trust for the purpose of inspecting, auditing, valuing the Trustee and the Unit Trust, making copies or any other reasonable purpose (Clause 12.2).

17 As noted, Bullhead and Jengeorgia each signed Deeds of Accession on 14 March 2008, agreeing to be bound by the terms of the Unit Trust Deed and the Unitholders Agreement executed by the Initial Unitholders that very same day.

18 The Trustee purchased the land at Brickmakers Place then comprised and described in Certificates of Title Volume 9978 Folios 156, 158 and 159 and Volume 10225 Folio 631 and being the land situated at 1018-1028 Mt Alexander Road, Essendon ('the Property'), for the sum of $4,015,000 (inclusive of GST), the settlement for which occurred on or about 19 March 2008. It is necessary to say something about the background to the acquisition. This background is critical to the resolution of many of the issues in the case.

19 On or about 10 December 2007, Charlie, Dominic, Aldo and Peter Weda ('Weda') ('the Initial Partners') decided that they would together purchase the Property, which comprised four separate titles, with the intention, it was suggested, of re-selling the individual titles separately for profit. Weda, despite his involvement, acted as agent for the vendor.

20 The Initial Partners gave evidence to the effect that the value of the Property, if sold as separate titles, was in the order of $6,000,000, thus yielding to them a potential profit of approximately $2,140,000 after deducting the cost of the Property and acquisition costs ('the Expected Profit') if the Property was sold without further development.

21 On or about 17 December 2007 Charlie executed a Contract of Sale to purchase the Property for the sum of $3,650,000 plus GST with the purchaser stated as "Charlie Lastrina and/or nominee" ('Contract of Sale').

22 On or about 18 December 2007 the deposit of $365,000 for the purchase of the Property ('Deposit') was paid as follows:

(a) $273,750 by Lacont Development Pty Ltd, a company owned by Charlie, Dominic and Aldo;

23 On or about 28 February 2008, Charlie nominated the Trustee as purchaser of the Property under the Contract of Sale. As noted, settlement took place on 19 March 2008.

24 Between about late January 2008 and March 2008 (but before 14 March 2008 and settlement) the Initial Partners apparently decided:

(a) that instead of selling the Property as separate titles they would undertake the Development;

(b) to create the Unit Trust for that purpose with Brickmakers Place Pty Ltd as Trustee;

(c) that a Unit Trust Deed and Unitholders Agreement would be drawn and entered into to record terms of their agreement relating to management of the Trust's affairs and their ownership of units in the Unit Trust;

(d) that the Initial Partners would contribute to the Unit Trust all of their right title and interest in the Contract of Sale including the Expected Profit and the monies they had already paid towards the acquisition of the Property including the Deposit ('Initial Partners Contribution');

(e) that in return for the Initial Partners Contribution they or their nominees would be the Initial Unitholders of the Trust each owning 25% of the units in the Unit Trust;

(f) to obtain bank finance in order to partly fund the purchase of the Property and to carry out the Development;

(g) that any shortfall required to complete the Development in excess of bank finance and Unitholders cash contributions would be contributed by the Initial Unitholders in proportion to their unitholding;

(h) that a company controlled by Charlie and Domenic would be the Manager for the Development;

(i) to invite other investors to purchase further units in the Unit Trust in order to raise further capital to assist in the funding of the purchase of the Property and carrying out the Development;

25 Between about late January 2008 and March 2008 Charlie on behalf of the Trustee offered to Simpson, Jafer, Paul and Buckland units in the Unit Trust on the following basis:

(a) that Paul could purchase 720,000 units in the Unit Trust for the sum of $720,000;

(b) that Buckland could purchase 600,000 units in the Unit Trust for the sum of $600,000;

(c) that Simpson and Jafer could purchase 600,000 units in the Unit Trust for the sum of $600,000.

26 On or about 14 March 2008 each of Simpson, Jafer, Paul and Buckland accepted the offers referred to and their respective corporate entities acquired the units.

27 On or about 14 March 2008 the Initial Unitholders and the Trustee apparently agreed that payment of the Initial Sum as defined in the Unit Trust Deed comprised the payment of both $260,000 in cash ($65,000 each) and the contribution of the Initial Partners Contribution ($535,000 each represented by the Expected Profit) by the Initial Unitholders and entitled them to be issued with the Units as set out in clause 3.2 of the Unit Trust Deed.

28 By minute dated 14 March 2008 the Trustee resolved, amongst other things, to allot and issue to the Initial Unitholders 600,000 units each upon payment of the cash contribution of only $65,000 each. As noted above, the balance of 535,000 units each was allotted and issued without any cash payment but as consideration for the Expected Profit.

29 By further minute dated 14 March 2008[3] the Trustee resolved, amongst other things, to allot and issue further units in the Unit Trust, as follows:

(a) 600,000 units to Shey (Simpson, Jafer and Weda) upon payment of the cash contribution of $600,000;

(b) 180,000 units to Kyreli (Charlie) upon payment of the cash contribution of $180,000;

(c) 180,000 units to Rubeo (Domenic) upon payment of the cash contribution of $180,000;

(d) 180,000 units to Naranda (Aldo) upon payment of the cash contribution of $180,000;

(e) 720,000 units to Jengeorgia (Paul) upon payment of the cash contribution of $720,000;

(f) 600,000 units to RMBC Investments Pty Ltd (now Bullhead) upon payment of the cash contribution of $600,000.

30 Accordingly, as at 14 March 2008, a few days prior to settlement of the Property, the Unitholding was as follows -

Revaluation of the Property - the discounted units

31 As the above table indicates, each of the Initial Unitholders were effectively issued with the Discounted Units. They paid $65,000 and were allotted and issued 600,000 units. The difference represented the suggested Expected Profit. According to the Initial Unitholders this was agreed not only between them (as the Initial Partners Contribution) but also with the New Investors.

32 Further facts and matters relating to the value of the Property at the time of acquisition and settlement and the basis of calculation of the Expected Profit will be dealt with in detail where appropriate. These detailed facts are critical to a resolution of the central issue in the case, namely the allotment of units for other than a cash contribution and being the suggested Expected Profit.

33 The Development, comprising planning, design, construction, marketing and sales took place during the period 2008 to 2013 with limited activity in 2014. During this period (irregular) meetings were held, the most important of which were held on 25 March 2009, 17 August 2009 and 26 November 2013. Most Unitholders attended and Buckland attended most meetings including the specific meetings referred to. There is not much recollection and hence not much dispute as to what was discussed at the meetings (project update etc) but there is some dispute as to what documents were provided at the meetings, particularly to Buckland. This matter is important as it is an issue in the case as to when Buckland became aware (or ought to have become aware) of the Discounted Units. This aspect is discussed and dealt with later, where relevant.

34 As noted, the defendants allege further that all disputes between the parties and in particular Bullhead and the Trustee and Charlie were resolved by agreement concluded on or about 16 December 2013.

35 Bullhead denies any such agreement. Again, this aspect is dealt with and discussed later, where relevant.

36 Bullhead alleges that final distributions should not have been made as there was no unanimous agreement as required. Bullhead also alleges that in breach of an undertaking, its final distribution (as calculated by the Trustee) was not held in trust but distributed and dealt with in breach of such undertaking. This aspect is also dealt with later, where relevant.

37 The critical issue in this case is the allotment and issue of the Discounted Units. A number of matters require consideration -

(a) First, whether the Trustee had the power to allot and issue the Discounted Units.

(b) Secondly, whether, assuming power, there was a proper basis for the allotment and issue of the Discounted Units. In other words was there a basis for the Expected Profit, and if so could it be so allocated or dealt with.

(c) Thirdly, whether the position is affected by the suggested unanimous consent of the Unitholders, if this be the case.

(d) Fourthly, if as a result of the issues above, the Trustee is in breach, whether the other defendants are liable as accessories or otherwise liable, on a direct basis, as a result of their own breaches of the Unit Trust Deed and/or Unitholders Agreement.

(e) Fifthly, whether the claims are statute barred.

(f) Sixthly, whether the claims have in any event been compromised by the Finalisation Agreement.

38 After dealing with these critical issues I will deal with the misleading or deceptive conduct claim against Charlie and other minor claims.

D Breach of trust - Allotment and issue of the Discounted Units

39 The first and critical question is whether the Trustee had the power to issue the 2.4 million initial units at a price other than $1.

40 Bullhead submitted that on a proper construction and analysis of the constituent documents comprising the Unit Trust Deed, the Unitholders Agreement and the Minutes, it was clear that units could not be issued at a price other than $1 per unit payable as a monetary sum. The suggested corollary is that units could not be issued as consideration for the acquisition of an asset, in this case the Property or more specifically the Expected Profit. Various clauses were referred to as well as authorities dealing with principles governing the interpretation of trust instruments. As discussed later it is not entirely clear what the units or Discounted Units were issued for.

41 The defendants disagreed. They contended that on a proper construction of the relevant documents units could be issued as consideration for the acquisition of an asset and that such issue did not constitute the issue of units at a discount, but at $1 as consideration for the acquisition of an asset, in this case the true value of the Property having regard to the Expected Profit.

42 The legal principles relevant to the construction of trust instruments are well known and were not in dispute:[4]

(a) First, principles governing the interpretation of contracts apply also to trust instruments.[5]

(b) Secondly, the court construing a contract (or instrument of trust) should consider the whole of that contract (or instrument of trust).[6]

(c) Thirdly, intent cannot be separated from the words the parties have used.[7] Consequently, the defendants cannot, it was submitted, assert a claim that is contrary to the express provisions of the Unit Trust Deed and the Unitholders Agreement.[8]

(d) Fourthly, the right of a unitholder to have the trust administered in accordance with the instrument of trust is "fundamentally the most important right".[9]

43 The Unit Trust Deed clearly contemplates that units will be issued for a cash or monetary sum of $1 per unit. The $1 per unit - and not any equivalent - is required to be paid. In particular -

(a) Clause 3.2 of the Unit Trust Deed records the receipt of the Initial Sum by the Trustee, "which entitles the Initial Unitholders to be entered into the register as the holder of the following number of units", which totalled 2.4 million.

(b) Clause 1.1 defines the Initial Sum as 'the amount set out in item 8 of schedule 1 paid by each of the Initial Unitholders to the Initial Trustee on the signing of this Deed to initially constitute the Trust Fund'.

(c) Item 8 of schedule 1 defines the Initial Sum as $2.4m.

(d) Recital A records that 'the Initial Unitholders have paid the Initial Sum to the Initial Trustee to establish a trust on the terms of this Deed'.

(e) Clause 3.3 refers to Trust Fund and records that 'the Trustee holds the Trust Fund on trust for the Unitholders on the trusts and subject to the terms of this Deed. Trust Fund is defined in clause 1.1 to mean 'the Initial Sum and all other money paid to the Trustee in respect of the issue of Units ...'

44 The Unitholders Agreement (clause 5) also required a subscription price of $1 per unit.[10]

45 The Minute does not in any way refer to the basis or the precise consideration for the issue of 535,000 additional units to each of the Initial Unitholders for no monetary consideration or no monetary payment of the subscription price of $1 per unit. The suggested consideration - the Expected Profit - is nowhere referred to.

46 The Trustee was only empowered to allot and issue units in accordance with the provisions of the Unit Trust Deed and the Unitholders Agreement. In allotting and issuing the units at a price other than $1, or more particularly for a consideration other than the monetary payment of $1 per unit, the Trustee failed to adhere to the terms of the Unit Trust Deed. Accordingly, the Trustee is in breach of trust.

47 I do not accept the argument that the Trustee allotted and issued units at a $1 per unit as proper consideration for in effect the Expected Profit. As pointed out nowhere is this properly referred to or recorded. This aspect is dealt with in more detail in the next section dealing with the suggested Expected Profit.

48 However, it is tolerably clear that the Initial Sum was required to be paid. A monetary payment or consideration was required. Indeed it was even recorded as having been paid which was of course not the fact. It is clear that the Initial Sum was not paid as contemplated. It was only paid in part. Accordingly there was no power to allot and issue the 535,000 units to each of the Initial Unitholders. They were not paid for by monetary sum.

49 In any event, for reasons that follow this would not matter as there was no adequate basis for the Expected Profit, and any agreement to such effect was irrelevant.

50 In my opinion and apart from the construction issue dealt with above, there was no basis for the Trustee to factor the Expected Profit into the consideration for the issue of units to the Initial Unitholders which of course accounted for the substantial discount or non-monetary consideration. The sole reason for this non-monetary allotment and issue of 535,000 units to each of the Initial Unitholders was the Expected Profit or the revaluation of the Property based on this notional or Expected Profit. The conduct of the Trustee in this regard is unacceptable and in breach of trust and in breach of fiduciary duty. It is necessary to refer in detail to the chronology leading up to the allotment and issue of these units.

51 Based on instructions received from Charlie, Kevin Abrahamson ('Abrahamson') of Middletons prepared a draft Unit Trust Deed and Unitholders Agreement. The documents were sent to Charlie on 8 February 2008. There is no evidence that the executed Unit Trust Deed is materially and relevantly different to the draft provided.

52 The draft of the Unitholders Agreement differs from the executed document. In the draft clause 5 dealing with the structure of the Unit Trust is different. It is in the following terms -

5. Structure of the Trust

On the date of this Agreement the parties (other than the Trustee) must apply for, and the Trustee must issue to that party Units at a subscription price of $1 per Unit in the numbers set out below.

Unitholder No of Units % Holding

Unitholder 1 1,800,000 Units 30%

Unitholder 2 1,200,000 Units 20%

Unitholder 3 1,200,000 Units 20%

Unitholder 4 600,000 Units 10%

Unitholder 5 600,000 Units 10%

Unitholder 6 600,000 Units 10%

Total 6,000,000 Units 100%

53 It will be recalled that the Unitholders Agreement dated 14 March 2008 refers to four unitholders with 600,000 units each (see paragraph 16(d) above).

54 A Financial Feasibility Model ('the Model') dated 9 February 2009 records the Land Purchase Cost as $6m. The Model is detailed and estimates Total Sales Revenue from the sale of 43 units at $25,925,000.

55 There was much activity during the period 27 February to 14 March 2008. This period of about two weeks is most informative.

56 On 27 February 2008, Abrahamson had a telephone conversation with Charlie. Charlie told Abrahamson that he thought that 'he has one other investor on board' and accordingly 'it is intended to issue 600,000 units to each of the four of them and then additional units can be issued as other unit holders come on board'. The file note of the conversation concludes that Charlie 'is putting a proposal to the bank on the basis that the initial four investors will be funding the difference between the funds required and the bank loan'.

57 A day later, on 28 February 2008 Charlie nominated the Trustee as Purchaser under the Contract of Sale ('the Nomination'). There is no evidence of any consideration or terms relating to the Nomination. Accordingly, from the date of the Nomination and under the Nomination, the Trustee became jointly and severally liable (with Charlie) for the due performance of the obligations of the Purchaser under the Contract of Sale. The primary obligation of the Trustee was to pay the Purchase Price. There is no evidence of any obligation to Charlie, the Initial Partners, or anyone other than the Vendor. In particular there is no document to suggest that the Trustee as nominee was to receive a great benefit by paying a Purchase Price far below the value of the Property (that is the Expected Profit), or more particularly that in receiving such a great benefit, Charlie, the Initial Partners, or others were to be compensated for procuring such a great benefit, which they gave up.

58 The Charter Keck Cramer Valuation Report, prepared for the Trustee, is dated 5 March 2008 ('the CKC Valuation'). It values the Property at $3,650,000 on the basis of an arm's length willing buyer and willing seller. It also refers to a permit permitting the construction of 39 dwellings.

59 A copy of the CKC Valuation was provided to the Commonwealth Bank of Australia ('CBA') on 7 March 2008.

60 The days immediately prior to 14 March 2008 are instructive.

61 On or about 11 March 2008, Stasi prepared a document ('the Internal Stasi Document'). It is an internal document and was not provided to the New Investors. After referring to the Purchase Price, the Nomination, item 7 deals with the Unit Trust. The document records the following under item 7 -

Unit Trust To be capitalized at $6,000,000

So.

Cost of Property $3,650,000

Stamp Duty $ 200,000

Other cost due to settlement $ 50,000

$3,900,000

$6,000,000

Less $3,900,000

$2,100,000 potential gain to original Shareholders

i.e. Shey P/L $525,000

Lastrina 1 $525,000

Lastrina 2 $525,000

Lastrina 3 $525,000

$2,100,000

So.

Shey P/L would purchase their 20% (ie $1,200,000) with their equity of $525,000 plus deposit $91,250 = $616,250 = Balance $583,750

Lastrina Group of Companies

Equity $1,525,000

Deposit $ 273,000

$1,798,750 -30% (1,800,000) = Bal. $1,250

How do we organize cheques.

Theoretically Lastrina Group will purchase $1,800,000 of Units for $300,000

62 The document is a strange document. It refers to a 'potential gain to original Shareholders' based on the capitalisation of the Unit Trust at $6,000,000, not the revaluation of the Property or the Expected Profit. It is ambiguous and is suggestive of some form of reverse engineering. There is no explanation as to why the capitalisation was in excess of the financial requirements of the Unit Trust at the time, namely $3,900,000. However, although the document is cryptic, misleading, ambiguous and internal, it does expose (in writing) the genesis of the idea of the Discounted Units, three days before execution of the Unitholders Agreement and Deeds of Accession.

63 On 13 March 2008 and following the Internal Stasi Document and a day before execution of the Unitholders Agreement and Deeds of Accession Charlie sent Abrahamson a facsimile at 2.09 pm. It refers to the capitalisation of the Trust at 6,000,000 and the total cost at $3,860,000. It then refers to the difference ($2,140,000) and divides it equally as between the Initial Unitholders. The facsimile concludes -

Therefore the 4 original unit holders will purchase 600,000 units each.

Shey Pty Ltd $65,000

Kyreli Pty Ltd $65,000

Rubeo Pty Ltd $65,000

Naranda Hall Pty Ltd $65,000

64 Again the calculation is based on the suggested 'capitalisation of Trust' at $6,000,000 with no explanation at all. There is no reference to any revaluation of the Property or the Expected Profit and the mechanism and basis (aside from any detail or note as to value) for such revaluation.

65 On the very same day Abrahamson made a note that Jengeorgia was to receive 720,000 units for $720,000 and Bullhead was to receive 600,000 units for $600,000. The note was headed Deed of Accession.

66 On 13 March 2008 Charlie met Abrahamson. Abrahamson gave Charlie the Unit Trust Deed and the Unitholders Agreement. Abrahamson made a note of the meeting. Abrahamson referred to the advice received by Charlie from Pitcher Partners. He records that the advice 'referred to six initial Unitholders rather than four initial Unitholders with a further two subscribing for units after the Trust Deed is signed but before settlement of the purchase takes place'.

67 The note refers to Charlie raising the fact that he and Shey paid the deposit and other costs and then records that 'It is intended that Charlie Lastrina and Shey Pty Ltd will not pay $1.00 per unit'. Abrahamson said it was an accounting matter and should be discussed with Stasi. His note then records that he said '...it could be covered in the Trust Deed and/or the Unitholders Agreement or alternatively in Minutes of the Trust Deed'. After a telephone call to Stasi in the presence of Abrahamson, Stasi confirmed directly to Abrahamson that 'the whole matter could be adequately covered off in Minutes'.

68 The note does not refer to any Expected Profit or revaluation. Other than a reference to payment of the deposit and associated costs there is no basis recorded as to why 'Charlie Lastrina and Shey will not pay $1.00 per unit'. This is all most peculiar.

69 The Minutes recording the allotment and issue of units is dated 14 March 2008. It is a directors meeting and records that Charlie and Ursula were present. The Minute first records the allotment and issue to the Initial Unitholders and then the further allotment and issue on the same day.

70 As noted the Unitholders Agreement and the Deeds of Accession and a Development Management Agreement[11] were all dated 14 March 2008.

71 For reasons that follow I consider that, apart from the construction, authority and power issue, the conduct of the Trustee in acting on the basis of the suggested Expected Profit was in breach of trust and in breach of fiduciary duty.

72 I do not accept the evidence in support of the Expected Profit or Revaluation. The evidence as to value was a single sheet of paper or 'back of the envelope' type calculation done by Weda ('the Weda Note'). It is unconvincing and inadequate. There is no proper analysis and consideration and despite his experience, the figure should not have been accepted or endorsed by Charlie Lastrina, his brothers and the Initial Unitholders. Although it suited them to accept the figure, the Trustee should not have done so without further enquiry and consideration, particularly given the next point and the knowledge that there were new investors paying $1 per unit.

73 Further, the Expected Profit was specifically based on and contemplated the sale of the four individual titles for a substantial 'overnight' profit. This was the basis on which the Discounted Units were issued. However, well prior to the issue of the units it was decided not to proceed with the individual sales but to develop the Property. At this point it was artificial to consider the value of the Property based on a strategy that was no longer relevant and was not proceeding. The whole basis of the revaluation, was upon such change of strategy or direction, irrelevant. The short point is that units were issued at a discount based on a notional profit that was no longer relevant or contemplated. The Expected Profit was not relevant to the value of the Property for development purposes. This value is absent when one considers what the Trustee acquired the Property for. Further, there is simply no evidence that the Initial Partners or Initial Unitholders would not have proceeded if they did not get their Discounted Units based on the Expected Profit.

74 Accordingly we are left with the value of the Property as a development site as at the date of issue of the units. This was the purpose at the time and the value should be determined accordingly.

75 Consequently the value of the Property is to be determined by the contemporaneous valuations of the Property. This is the CKC Valuation ($3,650,000) and the council's capital improved value for the Property at the time of sale ($2,085,000.)

76 Charlie's own estimate to the Commonwealth Bank put the value at $5,000,000.

77 The Fitzroy's report of 7 July 2009 after the issue of the amended (and according to the defendants more favourable) council permits values the Property at $5,400,000.

78 All the accounts for the Unit Trust show the value of the Property at its purchase price of $3,650,000 (plus GST and costs).[12]

79 The issue of the Discounted Units is in many other respects unsatisfactory. In addition to there being an inadequate and unsupported basis on which the Trustee could act in terms of value and the wrong basis of valuation there are other peculiarities.

80 It is entirely unsatisfactory, and itself a breach of trust, that there is no Minute or other document evidencing the reason and basis for the allotment and issue of the Discounted Units. That such a serious and important matter is not recorded, in circumstances where New Investors are on board, is unacceptable.

81 The earlier documents referred to the Land Purchase Cost as $6m (Financial Feasibility Model of 9 February 2009) and the allotment and issue of 6m units at $1 each (Draft Unitholders Agreement of 8 February 2009). It was only a few days before 14 March 2008 that the Internal Stasi Document and the facsimile from Charlie to Abrahamson of 13 March 2008 referred to the capitalisation of the trust at $6,000,000 and the consequent allocation of $2,140,000 (the difference between the suggested capitalisation of $6,000,000 and the acquisition costs of $3,860,000) to each of the Initial Unitholders equally, that is 535,000 units of $1 each. The problem is that the basis for the $6,000,000 figure (the Expected Profit or the Revaluation) is entirely absent from any written document except the unsatisfactory Weda Note. Further, the word capitalisation is ambiguous in this regard and masks what it was suggested was the real basis, namely a revaluation of the Property.

82 The position is compounded and further complicated by a failure to deal with or explain the legal basis of the transaction giving rise to the Discounted Units. The fact is the Trustee was nominated and settled the acquisition. There is no evidence of any consideration for the Nomination. The Trustee did not promise or undertake anything in consideration for the substitution or ability to settle 'at a bargain', if this be the case. Pursuant to what agreement then did the Trustee allot and issue the Discounted Units. When was such agreement entered into and what are the terms? None of this is documented or adequately explained. I will deal with the suggested agreement as part of the next issue to be considered.

83 Accordingly, and apart from the lack of power point, as there was no basis for the issue of the Discounted Units they were improperly issued, and the Trustee is in breach of trust. Further, the Trustee is, in the circumstances referred to, in breach of its duty of honesty and impartiality.[13] Finally, having considered all of the relevant conduct relating to the Discounted Units and suggested Expected Profit I consider such conduct to be so unconscientious that it should not be allowed to stand.

F Agreement to use Expected Profit as part payment for units

84 Having found that the Trustee was in breach of trust by issuing units purportedly in consideration for the Expected Profit, an artificial, unnecessary, opportunistic and misconceived decision, the next question is whether the alleged agreement of the parties overcomes or excuses the breach.

85 The Initial Unitholders case is that they orally agreed that, inter alia, they would contribute the Expected Profit to the Unit Trust in return for each owning 25% of the units in the Unit Trust (Defence 19(f)(iv) and (v)). They then allege that they agreed with the Trustee that they would pay for their units by the Expected Profit (Defence 19(k)). The documents relied upon are notes and correspondence between Charlie and his accountant and solicitor, as previously referred to.

86 The Initial Unitholders also allege that they agreed that a Unit Trust Deed and Unitholders Agreement would be entered into to record the terms of their agreement (Defence 19(f)(iii)). There is no application to rectify the terms of either of those documents.

87 The issue of the Discounted Units was, as I have found, contrary to the terms of the Unit Trust Deed and the Unitholders Agreement.

88 Thus the defendants allege that a collateral oral agreement prevails over the express terms of the Unit Trust Deed and the Unitholders Agreement. The defendants cannot, it was submitted by Bullhead, assert a claim that is contrary to those express provisions.[14] I agree.

89 In any event, on 14 March 2008, the Trustee signed the Minutes. The Minutes record:

(a) that each of the Initial Unitholders were allotted 600,000 units "for the total price of $65,000" per Initial Unitholder, (i.e. at approximately $0.11 per unit);

The Further Units were issued at a price of $1 per unit and were fully paid for by the relevant unitholder.

90 The Minutes, being a contemporaneous document which effected the issue of the Discounted Units, makes it clear, it was submitted, that the consideration for these units was "the total price of $65,000". There is no mention of any other consideration, namely, some part payment being provided for by way of the "Expected Profit".

91 Further, "the total price" of $65,000 for the Discounted Units is, it was submitted, reflected throughout in the accounts of the Trust.[15]

92 From a review of the relevant documents, there is no evidence of any such agreement as alleged. Further, I am not satisfied that the evidence establishes any such agreement. The relevant witnesses were vague and unconvincing as to the terms of any such agreement.

93 Further there is no evidence that Bullhead, a unitholder at the time the Discounted Units were allotted and issued, agreed. In fact the evidence points the other way. I find that Buckland had no knowledge of the Discounted Units and therefore did not agree to their issue (in breach of trust) prior to 14 March 2008. Accordingly, absent unanimous consent there was no basis to depart from the strict terms of the Unit Trust Deed.[16]

94 Finally, even if there was an agreement as alleged, it would not in my opinion, and in the context and circumstances of this case bind the Trustee or more particularly exonerate or excuse the Trustee from the multiple breaches of trust and fiduciary duty as referred to. In any event the Trustee was not bound to follow any such direction following any agreement and should not on the evidence and in the circumstance have done so.

95 Each of the Initial Unitholders have, it was submitted, knowingly received trust property in breach of trust. Charlie, his brothers, Jafer and Ursula were all aware that units had been issued at a discount and that the distributions made and received by each of them, through their corporate vehicles were greater in value than each should have received in light of their validly issued units.

96 Ursula and Charlie were the directors noted as being present at the meeting recording the issue and allotment of the Discounted Units. Each received copies of the Unitholders Agreement and the Unit Trust Deed. Each knew, or ought to have known, that the amount they had paid for their units did not accord with the number of units they ought to have received, had the power to issue the units under the Unit Trust Deed been validly exercised. Further, each was copied to Buckland's email on 21 March 2014 putting them on notice that Buckland did not agree to the issuing of the Discounted Units.

97 It was submitted that with such knowledge, they received a distribution from the Trustee greater than the amount they ought to have received.

98 It was submitted further that for a knowing receipt claim, actual knowledge of the breach is not required and that constructive notice is sufficient.[17]

99 In addition, it was submitted that the Trustee and the Unitholders each owed fiduciary duties to one another.[18] The Initial Unitholders'[19] actions also constituted, it was submitted, a breach of their fiduciary duties owed to Bullhead (and, for that matter, to Paul).

100 Charlie and each of the other Initial Unitholders and their directors are liable, it was submitted, to account to Bullhead for the profits they have made on the issue of discounted units.

101 Subject to the defences, I agree that given their knowledge, the Initial Unitholders are liable on a knowing receipt basis. Further, in the circumstances referred to, I find that the Initial Unitholders have not dealt justly and faithfully with Bullhead and are as a consequence in breach of clause 2.2(d) of the Unitholders Agreement.

102 Having found breaches of trust associated with the issue of the Discounted Units (no power and no basis) and knowing receipt on the part of the Initial Unitholders and directors (other than Paul) it is necessary to consider whether these particular claims are statute barred by reason of s 21(2) of the Limitation of Actions Act 1958 (Vic) ('LAA').[20]

103 Section 21(1) and (2) of the LAA provides:

21 Limitation of actions in respect of trust property

(1) No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action -

(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

(b) to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.

(2) Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued: Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property until the interest fell into possession.

104 Bullhead's causes of action relating to the issue of the Initial Units arose at the time that the units were allotted on 14 March 2008. This is because, as articulated in the Further Amended Statement of Claim ('FASOC') the issue of the Initial Units constituted the act that was the alleged breach of trust. The cause of action commences to run for the purposes of the section on the date of the breach of trust.[21]

105 This proceeding was issued longer than 6 years after that date and hence, absent fraud (s 21(1)(a)) or the proceeding being one by a beneficiary to recover from the trustee trust property or the proceeds thereof (s 21(1)(b)) or fraudulent concealment (s 27)) or some other later breach, the action is barred by s 21(2) of the LAA.

106 The claims are not, it was submitted, claims by a beneficiary against a trustee "to recover trust property or the proceeds thereof" (under s 21(1)(b)). Rather, the claims concern the issue of the Initial Units.

107 The defendants accept that if the Court holds that the Initial Units were allotted fraudulently (which they say should not be found) then s 21(1)(a) prescribes that no limitation period applies in respect of claims against the Trustee and against any other persons who may be liable at law.

108 Bullhead submitted that the issue of Discounted Units was fraudulent because -

(a) it came about very late in the transaction (the day before);

(b) it was based on a fragile and ultimately false foundation, namely, that there was an Expected Profit seemingly acquired overnight;

(c) no valuation existed to support this Expected Profit;

(d) Buckland was never given the Minutes of 14 March 2008;

(e) the issue of the Discounted Units were deliberately concealed from Buckland.

109 The authorities suggest that fraud 'includes equitable fraud and should be construed widely'.[22]

110 I agree with Bullhead. I consider, for the reasons given, that the issue of the Discounted Units was dishonest. There was no power, there was no basis and the issue of such units was entirely opportunistic and artificial, and in the relevant sense the conduct may properly be described as constituting moral turpitude and therefore fraudulent. Accordingly the claims are not, in my opinion, statute barred.

111 Before dealing with this issue, it is necessary to deal with the defendant's application (made after the conclusion of the case) to amend its defence to plead, in addition to the limitations issue, that the claims are barred by laches and acquiescence. The amendment was opposed. It was submitted by the defendants that the knowledge and conduct of Buckland over the very same period is relevant to the limitations issue, the concealed fraud issue and other issues and accordingly the amendment is directed only to the legal consequences in relation to the Discounted Units. It raises no new facts. Finally, it was submitted that there is no prejudice.

112 Although Bullhead submitted that the proposed amendment was too late, which of course it is, I do not propose to allow the amendment on the ground that it will fail. The Trustee and those liable as accessories do not have 'clean hands' as I have found, and cannot rely on the proposed equitable defence.[23] It would indeed be unconscionable for the defendants to in effect and in the circumstances derive a benefit or advantage from their considerable wrong.[24]

113 The defendants allege that any claim Bullhead may have had, arising out of the Unit Trust or the Development, has been extinguished or compromised by the Finalisation Agreement that was concluded on or about 16 December 2013. They submit that, in entering into the Finalisation Agreement, Bullhead agreed to settle the affairs of the Unit Trust, including any claim that it might have had, on the basis that;

(a) The Lastrinas would purchase the remaining 6 apartments at list price;

(b) They would ensure that the amount to be distributed amongst the Unitholders would be $4,904,339; and

(c) They would look after any further costs in winding up the Unit Trust.

114 Bullhead does not contest that Buckland and Charlie reached an agreement on or around 16 December 2013. However, Bullhead contends the terms of that agreement relate only to whether Buckland would consent to the Lastrina brothers purchasing the unsold apartments for themselves. Furthermore, Bullhead submits that in any event, such an agreement is unenforceable as it does not constitute a sufficient memorandum in writing as required.

115 Nonetheless, having regard to the facts and circumstances of the parties' discussions, judged objectively, I find the parties agreed to settle all claims arising out of the affairs of the Unit Trust. This included settlement of all claims Bullhead may have had as a unitholder.

116 Further, and in any event, Bullhead is estopped from denying it had given up its right to claims arising out of the affairs of the Unit Trust. Buckland's conduct in and around 16 December 2013 represented and induced the Lastrinas to believe that Bullhead would not pursue any such claim - an assumption upon which the defendants relied to their detriment.

117 On 22 August 2013 Charlie sent an email to all Unitholders, including Buckland, raising, inter alia, the need for a decision to be made regarding the unsold apartments and the finalisation of Brickmakers Place. A further email was sent by Charlie to all Unitholders on 30 October 2013, which enclosed copies of the financial accounts for the Trustee for June 2013 and September 2013 and proposed a meeting of Unitholders be held shortly to "[distribute] the remaining apartments between the Unitholders with a view of finalizing (sic) Brickmakers Place Pty Ltd by the 31 st December 2013". By email sent on 14 November 2016, Charlie advised this meeting would be held on 26 November 2013.

118 The 26 November 2013 meeting took place at Charlie's office in Young Street, Moonee Ponds. Stasi, Weda, Jafer, Ursula, Charlie, Dominic, Aldo, Paul and Buckland attended. The meeting ran for about an hour. Throughout the meeting there was widespread dissatisfaction amongst the Unitholders directed toward Charlie for the failure of the project to deliver on the projected profits.

119 During the course of the meeting Weda, as the selling agent, gave a presentation to the effect that the unsold apartments were proving difficult to sell due to sluggishness within the real estate market and consideration needed to be given to further discounting the list price in order to sell them.

120 Stasi, the account for the Trustee, had prepared a document for the meeting which was then distributed to the Unitholders. It projected the cash return each unitholder would receive if the remaining apartments were sold at the list price, at a 10% discount, and at a 20% discount. Jafer also spoke to this document, using Paul's circumstances as an example for the group. The revelation that Paul would not recover his capital investment in both of the discount scenarios caused Ursula to query whether the investment vehicle she was involved in, Shey, had also lost money from the project. Jafer replied that it had not, due to the initial (discounted) units that had been issued to Shey.

121 As an alternative to discounting the selling price of the remaining apartments, Charlie proposed that each unitholder could take one of the apartments as a means of finalising the project. There was, however, universal disinterest in this proposal, and the meeting ended with no decision being made. After the meeting Charlie and Dominic took Buckland and Paul out to dinner. During the course of the dinner Buckland indicated to Charlie that he had hoped there would have been a fairer distribution of the project's profits.

122 In the days following the 26 November 2013 meeting, the Lastrina brothers resolved to offer to purchase the remaining unsold apartments at the then list price in order to finalise the project. The Lastrina interests would also cover the additional expenses associated with winding up the Unit Trust, leaving $4,904,330 to be distributed. On 28th November 2013 Charlie contacted the individual Unitholders by telephone to make the offer ('the Offer'). He spoke to Paul and Ursula on behalf of Shey, and Buckland. Charlie gave evidence that he told Buckland of the Offer and that Buckland would receive the figure that was in the spreadsheet prepared by Stasi.

123 Over the course of the next few days Buckland contacted both Paul and Jafer by telephone, indicating he had concerns regarding the management of the Project. During this period Buckland was also obtaining advice from his accountant, Frank Demarco.

124 On 2 December 2013 Buckland sent Charlie an email indicating he was not able to attend a follow-up meeting that had been proposed for 3 December 2013. He further advised that he was awaiting feedback from his accountant on the financial information that had recently been provided.

125 Charlie responded by email several hours later on 2 December 2013 to query whether Buckland's indication that he was awaiting financial advice indicated he did not agree to the Lastrina brother's proposal "to take up the remaining units and put this company to bed." Charlie further stated in this email that the Offer was being made "to help the unit holders (sic) short term with their liquidity position and (sic) take advantage of not incurring further costs such as commissions and legal fees as well as further discounts on the units." The email further stated that the $588,524 Buckland would receive under the offer "would be in full settlement, the majority paid before Christmas the balance paid early next year". The email concluded with a statement that all other Unitholders had accepted the Offer and Buckland was requested to advise his position. If Buckland agreed there would be the required unanimous consent.

126 Under cross examination Buckland acknowledged that he understood the proposal. He said:

(a) "... my understanding of this is it was going to be a cash settlement. It would be clear, there would be cash money paid to people.";

(b) the benefit he would be obtaining was that there would be certainty as to the amount they would achieve out of the Trust;

(c) that by reason of the Lastrina brothers buying the apartments the distributable profit would end up with a number of $4.904 million;

(d) the proposal was to help the Unitholders short term with their liquidity position and to take advantage of not incurring further costs such as agent's commissions and legal fees which would be a cost to the Trust and there would be no further discounting of the price at which the apartments would be sold;

(e) that Bullhead would receive $588,524 in full settlement of its claims as a unitholder and that the majority would be paid before Christmas and the balance early the following year after finance could be arranged;

(f) that he would be paid quicker than what might otherwise be the case, noting that in 2013 he had repayment arrangements with the Australian Taxation Office and that communications with his accountant revealed he had been expecting payment from the Brickmakers development during late August 2013;

(g) the Lastrina brothers would fund all the winding up expenses of the Trust;

(h) that "... this was just a way to avoid ongoing issues";

(i) that Charlie was proceeding on the basis that if Buckland and the other Unitholders accepted the proposal that had been put to them he would "... set about ensuring that the distributions to be made to the Unitholders would be based on $4.904 million".

127 On 11 December 2013 Charlie sent another email to Buckland indicating he had not received a response from him regarding the Lastrina brother's Offer. After reiterating that the other Unitholders had agreed to the proposal, Charlie indicated that he would be making distributions to them and would "leave one unit in the Brickies as your entitlement...until this matter is formerly (sic) resolved."

128 Demarco said that at this time he gave the following advice to Buckland "... try and resolve the issue. Sit down with Charlie and try because in litigation there's no winners" and "... so my instructions to Brett were 'try and sit down with Charlie and try and work out what's happened in the project and try and come to some resolution' that was my advice to Brett".

129 Several hours later on 11 December 2013 Buckland responded to this email. Indicating that he had been struggling with the outcome of the project, and despite holding a belief there "should have been a fairer adjustment with profit distribution in addition to the capital return", Buckland nevertheless stated '[y]our perception is completely wrong with where you think things are up to and why I have taken 2 - 3 weeks to review this matter with my accountant given his availability, my travel arrangements and work commitments." Buckland then went on to request Charlie "please formalise the structure of your verbal offer to me and to the other Unit holders so I can have it in writing, so we can have a quick resolution." There is nothing in the email about the Discounted Units.

130 Buckland acknowledged that the Offer that was being put to him by the Lastrinas was formalised in the email sent to him by Charlie on 2 December 2013 and when he sent his email to Charlie on 11 December 2013 "... I was asking Charlie to restate the offer to me".

131 On 12 December 2013 Charlie sent an email in reply stating "[f]orget what I might or might not be offering , lets (sic) just cut to the chase and tell me what you want?"

132 The evidence reveals that throughout this period of consideration of the Lastrinas' Offer Buckland:

(a) was in frequent communication with Demarco about whether he should take the Offer and indeed Demarco was involved in settling some of his email communications;

(b) was receiving legal advice and accountancy advice and was clearly contemplating litigation;

(d) had discussions with other Unitholders including Paul and Elvis about whether they were going to accept the Offer. He only had such discussions with the non-Lastrina Unitholders as he knew the offer in the 2 December email was being made by the Lastrinas to the non-Lastrina Unitholders.

133 Arrangements were made over telephone for Charlie and Buckland to meet and discuss the issue. They met at Charlie's office on 13 December 2013. No minute or contemporaneous record of this meeting was made. Both Charlie and Buckland gave differing accounts as to what was discussed.

134 Charlie gave evidence that he asked Buckland what he wanted to do about the deal the Lastrina brothers were proposing. He asserted Buckland replied that he "probably will go with the deal, but need to talk with [my wife] first and I will come back to you." Charlie acknowledged that Buckland raised issues about whether he had paid for the extra fit-out costs of the apartment he purchased in the development and that Charlie asked him what wanted to do about the unsold apartments, but denies that he raised anything about the Discounted Units or wanting his capital back or his intentions to press on and seek an audit of the Unit Trust.

135 Buckland gave evidence that he demanded Charlie repay him his investment capital back, and that Charlie nodded his head in agreement to this. He stated that he further indicated to Charlie that he would "probably press on with an audit of the Project." He said Charlie asked him "what I wanted to do about the remaining apartments, the Lastrina brothers wanted to purchase. I said to Charlie that I didn't have any objection at that time but I wanted to talk to my wife and my son about this before I committed to it." He further stated that he specifically said to Charlie "this is not an agreement to the finalisation agreement that was proposed."

136 On 16 December 2013, after discussing the matter at home, Buckland sent Charlie an email which said "Hi Charlie, you can remove the sign, Brett." This was in reference to the "for sale" sign that was outside the Brickmakers Arms. Charlie instructed Weda to remove the sign and the Lastrina brothers then took steps to arrange financing to purchase the remaining apartments in order to make the contemplated distributions and proceed to finalise the winding up of the Unit Trust.

137 On 19 December 2013 Charlie sent an email to both Buckland and Paul advising them that settlement had occurred on the remaining apartments and requesting they provide their bank details to organise a funds transfer before Christmas. Buckland replied the same day, providing his bank details. On 23 December 2013 Charlie sent a follow-up email to all Unitholders advising that he would be making a partial distribution that day, with the balance anticipated to be transferred in February the following year.

138 After receiving the email dated 16 December 2013 Charlie:

(a) heard nothing further from Buckland about any concerns he had until he sent his email on 24 March 2014;

(b) instructed Weda to remove the for sale sign on the remaining apartments at the Brickmakers Arms;

(c) took steps to borrow money to acquire (or to find other purchasers to do so) the remaining unsold apartments details of which are set out below;

(d) paid cash into the Unit Trust's accounts to enable the "guaranteed" payments to the non-Lastrina Unitholders;

(e) sent an email dated 19 December 2013 to Paul and Buckland advising that the sale of the apartments which had already been sold to third parties had settled and requested their bank account details so that funds could be transferred before Christmas.

(f) sent an email on 23 December 2013 advising Buckland that $396,000 would be transferred to his nominated account that day and similarly advised Paul, Elvis, Ursula and Weda in respect to amounts due to Jengeorgia and Shey. The email also advised those Unitholders of the apartments that were to be acquired by the Lastrina brothers.

139 In late December 2013 Bullhead received a part distribution of $396,000 into its bank account.

140 On 18 March 2014 Charlie sent an email to all Unitholders advising that he would "soon be making final distributions to finalize (sic) the Brickmakers Place Unit Trust." The email emphasised that such payment would constitute a "full settlement" to Jengeorgia, Shey and Bullhead.

(a) the figure of $4,904,339 was the figure "... we were guaranteeing to the Unitholders";

(b) the payments being made to the non-Lastrina Unitholders "... were to be paid in full and final settlement where any costs incurred in the Brickmakers Place would be the responsibility of myself and my two brothers".

142 On 21 March 2014 Buckland sent an email to Charlie, a copy being sent to all other Unitholders, which was stated to, inter alia, "[record] my position on both the previous and proposed further distributions of funds." The email asserted that distributions "should be limited to the return of capital amounts respectively paid by unit holders to acquire units" and "receipt of any such distribution by a unit holder (and specifically Bullhead Pty Ltd) is not to be taken as a release or surrender of any rights which that unit holder has in connection with the unit trust or the undertaking of the Brickmakers Arms project."

143 Bullhead denies Buckland ever accepted the Offer and as a consequence that there was any Finalisation Agreement. It contends that the discussions that occurred between Buckland and Charlie in the 13 December 2013 meeting related only to whether Buckland would consent to the Lastrina brothers purchasing the unsold apartments for themselves. The email Buckland sent to Charlie on 16 December 2013 was only an indication that Buckland was happy for that to occur and was not an acceptance of the Offer.[25] If there was acceptance of the Offer, Bullhead contends that the Finalisation Agreement is unenforceable as it does not constitute a sufficient memorandum in writing as required.

144 The defendants contend that the Finalisation Agreement was concluded on 16 December 2013. They refer to the telephone discussions between Charlie and Buckland on 28 November 2013, the email correspondence of 2 December 2013 and the meeting on 13 December 2013. They submit the email response Buckland sent on 16 December 2013 constituted, in the context and circumstances set out above, acceptance of the Offer. In response to the Statute of Frauds point the defendants raise a number of matters as referred to below. They also plead that Bullhead is by its conduct estoppel from denying the Finalisation Agreement.

145 For the reasons set out hereunder, I find that the Offer was accepted on 16 December 2013. I find that in context and effect the communication by Buckland to remove the sign, an otherwise cryptic, vague and ambiguous statement, was and constitutes a sufficient external manifestation (to the other party, Charlie) that he was accepting the Offer on behalf of Bullhead.

146 Buckland conceded in cross-examination that the critical terms of the Offer had previously been explained to him by Charlie and were understood by him. He conceded;

(a) he understood going into the 26 November 2013 meeting that the purpose of the meeting was to try to finalise the Unit Trust.

(b) He received a telephone call from Charlie on 28 November 2013, after the inconclusive meeting, in which Charlie had discussed how his proposal would save the Unit Trust further expenses on agents fees, marketing expenses for the apartments, would provide certainty as to the final amount available for distribution, and that the Lastrinas would cover the costs of the winding up.

(c) He received and read the email sent by Charlie on 2 December 2013 which he understood was being proposed was a cash settlement. The email is clear in its terms that the payment of $588,524 to Bullhead would be in full settlement. It also states Charlie's desire "to put this company to bed."

147 Buckland agreed that when he received the 2 December 2013 email, he knew that what he was being asked to do was to accept the Offer.

148 After the meeting Buckland says that he had three or four telephone conversations with Paul, another unitholder. He asserts that one of those conversations was on about 4 December 2013 during which Paul advised Buckland that "... he was going to take the offer that was made to him by Charlie and his brothers".

149 Paul gave evidence that in his discussions with Buckland "a couple of days" after the 26 November meeting:

(a) Buckland said that he was disappointed with the outcome and asked whether Paul was going to accept the offer from Charlie;

(b) Paul said that he was considering it but was likely to accept the offer;

(c) Buckland said that he felt that there were some expenses on the apartment that Charlie has purchased that he wanted further information about;

(d) Buckland said he was seriously considering getting an audit done;

(e) Buckland asked him whether he had agreed to the issue of units in the Unit Trust at a discount. He disagreed with Buckland's counsel that he said that he had not agreed.

150 Buckland also had a conversation with Elvis a few days after the 26 November meeting during which the following was said:

(a) he was concerned about aspects of the Development and wanted to know whether Elvis and Ursula were interested to take the matter further;

(b) Elvis responded that he and Ursula did not wish to pursue it any further.

151 Unfortunately there is no contemporaneous record of the discussions held in the 13 December 2013 meeting, leaving the court with the unenviable task of having to make a finding based upon the witness' recollection of an event that occurred some three years prior to the evidence being given. There are, however, several factors which support a finding that it is more probable than not that the meeting and events occurred in accordance with Charlie's version and recollection.

152 Buckland's assertion that in the 13 December 2013 meeting Charlie only requested Buckland's consent for the Lastrinas to purchase the unsold apartments, and agreed that such consent would not then constitute a finalisation of the Unit Trust on the terms that had been discussed in the 28 November telephone call and 2 December email, is improbable, unconvincing and unrealistic in the circumstances. It would have constituted a retreat by Charlie, with no obvious benefit to the Lastrina brothers. There was no reason why the Lastrina brothers would need Buckland's consent to purchase apartments that were, at the time, listed on the market for sale. Having obtained the consent or more particularly the acceptance of the Offer by all other parties, it is highly likely that this is what Charlie sought to achieve in the meeting, to the knowledge of Buckland.

153 Further, in response to Charlie's email of 11 December 2013 where Charlie questioned whether the lack of a response was because Buckland was not going to accept the Finalisation Agreement, Buckland replied your perception is wrong and requested Charlie to put his offer in writing so they can have a quick resolution. The language and demeanour of this message, wanting to achieve resolution, is at odds with Buckland's account of the 13 December 2013 meeting, in which he, rather than allowing Charlie an opportunity to restate the Offer, outlined a list of demands.

154 Demarco, who was in close consultation with Buckland during this time, gave evidence that his advice to Buckland was to settle with Charlie. Demarco said that at this time he was providing advice to Buckland and gave the following advice to Buckland "... try and resolve the issue. Sit down with Charlie and try because in litigation there's no winners" and "... so my instructions to Brett were 'try and sit down with Charlie and try and work out what's happened in the project and try and come to some resolution' that was my advice to Brett".

155 Acceptance is determined objectively by reference to the words and conduct of the offeree. Acceptance by the execution of a document is the most obvious way and is usually not contentious. However there are many different ways in which people commit themselves to contracts. Ultimately, a close examination of the facts and circumstances is required in order to assess whether, judged objectively, the offeree has committed to or accepted the offer. There must of course be the communication of such acceptance to the offeror. The law has taken a very flexible approach to determining whether there has been acceptance. Of course acceptance (and indeed the agreement itself) may be inferred from the conduct of the parties.

156 There are in this case two relevant formulations of acceptance, one pleaded, one not specifically pleaded but that clearly arises on the facts.

157 The first is the pleaded acceptance comprising the communication on 16 December 2013 to remove the sign. The second, not specifically pleaded formulation relates to the broader acceptance by conduct.[26] I will deal with the pleaded formulation first. As noted above, I find that the Offer was accepted on 16 December 2013.

158 Buckland knew and understood the Offer. He knew that he was being asked to accept the Offer. He knew that the other Unitholders had accepted the Offer. He knew, as I have found, that Charlie repeated the Offer on 13 December 2013 and wanted acceptance to put the Unit Trust to bed. He also knew that his accountant Demarco wanted him to resolve the matter and avoid litigation. Finally, he knew that Charlie was proceeding on the basis that if he and the other Unitholders accepted the Offer that had been put to them he would "... set about ensuring that the distributions to be made to the Unitholders would be based on $4.904 million".

159 Whether there has been unequivocal acceptance of the Offer is of course a question of construction in each particular case. In the final analysis, when Buckland sent the email of 16 December 2013 to Charlie, any objective assessment of the context and substance of the communication compels a conclusion that it was an unconditional assent to or acceptance of the Offer. 'You can remove the sign' is meaningless without context. The context is that he was accepting much more than a narrow and more limited offer by the Lastrinas to buy the unsold apartments. The discussions prior to 16 December 2013 were all about the Offer and this was understood by Buckland and Charlie. To constrain the acceptance to a more limited aspect of the Offer is unreasonably and unnecessarily selective and unwarranted, there being no qualification or caveat in the communication.[27] Although ambiguous and vague it can only sensibly be understood as embracing the Offer as a whole. This was after all the subject matter and basis of the discussions between the various parties, including Buckland's discussions with his advisors. Removing the sign was a critical and integral part of the Offer. It was the key to finalisation. Removing the sign meant and was in effect and in context code for the purchase by the Lastrina brothers with the logical expected and contemplated corollary of achieving finality. Achieving finality was not remote from removing the sign, it was entirely underpinned by it. In other words, in my opinion, and in the context referred to, it is not a stretch at all to regard removing the sign as conveying and embracing sale, distribution and finalisation, that is acceptance of the Offer.

160 Accordingly, as noted above I find that the Offer was accepted on 16 December 2013 and as consequence the Finalisation Agreement was entered into.[28] However, this is not the end of the matter. There are four further matters that require consideration.

161 Bullhead contends that the Finalisation Agreement is unenforceable by reason of s 126 of the Instruments Act 1958 (Vic) and s 53 of the Property Law Act 1958 (Vic).

162 These sections are embodiments or analogues of the Statute of Frauds which requires that:

An action must not be brought to charge a person ... upon a contract for the sale or other disposition of an interest in land unless the agreement on which the action is brought, or a memorandum or note of the agreement, is in writing signed by the person to be charged or by a person lawfully authorised in writing by that person to sign such an agreement, memorandum or note;[29] and

... no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorized in writing ...[30]

163 In each case the critical requirement is that the relevant contract, agreement or note or memorandum of the agreement be in writing signed by the person to be charged or the person conveying the relevant interest in land. The parties proceeded on the assumption that the Finalisation Agreement related relevantly to an interest in land.

164 The defendants denied that the Finalisation Agreement was unenforceable as contended and submitted -

(a) that by reason of s 9 of the Electronic Transactions (Victoria) Act 2000 (Vic) ('the Electronic Transactions Act'), the Finalisation Agreement was sufficiently embodied in writing and was signed by the parties to it;

(b) that the defendants have in any event partly performed the agreement such that equity will enforce the agreement;

(c) that the plaintiff's conduct in taking this defence constitutes it using the statute as an instrument of fraud which equity will not permit.

165 I agree with the first two submissions and it is not necessary to consider the third submission.

166 The Finalisation Agreement was the product of a series of conversations and correspondence between, relevantly for these purposes, the Lastrina interests and Bullhead through Buckland. The Finalisation Agreement is sufficiently, although not exclusively, in writing and is constituted by the email of 2 December 2013 from Charlie and the acceptance of it by the email of Buckland of 16 December 2016.

167 It is common ground between Buckland and Charlie that Buckland's email of 16 December 2013 was intended by him to communicate his acceptance of a proposal that had been put. It was also received by Charlie as such an agreement. This is plain from the terms of the email itself which read:

Hi Charlie.

You can take down the sign.

Brett

In its terms it communicated that Charlie should take some action as a consequence of what was being communicated. The relevant question of course is what was embraced by the written communication and whether it constituted acceptance of the Offer, a finding that I have made.

168 Section 126(2) of the Instruments Act expressly provides that the requirements of s 126(1) can be met by s 9 of the Electronic Transactions Act and by operation of s 9 itself, s 53 of the Property Law Act can be so satisfied.

169 Section 9 of the Electronic Transactions Act is in the following terms -

9 Signatures

(1) If, by or under a law of this jurisdiction, the signature of a person is required, that requirement is taken to have been met in relation to an electronic communication if -

(a) a method is used to identify the person and to indicate the person's intention in respect of the information communicated; and

(b) the method used was either -

(i) as reliable as appropriate for the purpose for which the electronic communication was generated or communicated, in the light of all the circumstances, including any relevant agreement; or

(ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence; and

(c) the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a).

(2) This section does not affect the operation of any other law of this jurisdiction that makes provision for or in relation to requiring -

(a) an electronic communication to contain an electronic signature (however described); or

(b) an electronic communication to contain a unique identification in an electronic form; or

(c) a particular method to be used in relation to an electronic communication to identify the originator of the communication and to indicate the originator's intention in respect of the information communicated.

(3) The reference in subsection (1) to a law that requires a signature includes a reference to a law that provides consequences for the absence of a signature.

170 Buckland by his electronic signature 'Brett' when combined with his email address 'brett6858@gmail.com' identified himself and his intention in respect of the information communicated (s 9(1)(a)). The method used was as reliable as appropriate for the purpose for which the electronic communication was generated or communicated in light of all the circumstances, including any relevant agreement (s 9(1)(b)). Alternatively, the method used was proven in fact to have fulfilled the functions described in (a), by itself or together with further evidence. Further, the person to whom the signature is required to be given consented to that requirement being met by way of the use of the method mentioned in paragraph (a).

171 Accordingly all of the requirements were met. Having regard to their past communications, many of which were by email, and the conclusion of the meeting on 13 December 2013 with Buckland to advise what he wished to do, an emailed acceptance was both intended by Buckland, was as reliable as appropriate in the circumstances (in that all that was required was an advise of acceptance) and Charlie understood it to be so. This is clear because he set about performing the Finalisation Agreement.[31] Accordingly, I reject the plaintiff's submissions on the issue. In any event, I find that these have been sufficient acts of part performance, so as to overcome the suggested deficiencies.

172 It is clear that equity will not permit a party to accept the benefit of a contract partly performed by the other and then rely on the Statute of Frauds to avoid the agreement. To do so would allow it to utilise the statute as a cloak for fraud.[32]

173 The acts that will be sufficient to constitute part performance must have been done under the terms and by force of the agreement alleged, in this case the Finalisation Agreement, and must be unequivocally and in their nature referable to some contract of the general nature of that alleged.[33]

174 The specific acts of part performance relied upon are set out in the next paragraph dealing with estoppel. When considering those acts, they imply the existence of a contract by which the Lastrinas took up the remaining apartments at given prices and ensured that this provided a certain sum to be distributed to the non-Lastrina Unitholders and thereafter to be responsible for winding up the Unit Trust at their own cost. This is in my view sufficient of make out the doctrine of part performance. The acts are also in my view sufficient to underpin the estoppel defence.

175 The next matter relates to the estoppel defence. The defendants allege that an estoppel arises that prevents Buckland from denying that the Finalisation Agreement is enforceable.

176 By sending the "You can take down the sign" email on 16 December 2013 Buckland, it was submitted, represented and induced the Lastrinas to believe that a binding agreement in the form of the Finalisation Agreement had been reached.

177 It was submitted that the Lastrinas acted in reliance on that assumption by entering binding contracts to purchase themselves (or causing others to do so) the six remaining apartments at above market price, and ensured that the Unit Trust was provided with sufficient funds so as to enable the guaranteed sums to be distributed to the non-Lastrina Unitholders and then set about making the first tranche of distributions in December 2013 to just the non-Lastrina Unitholders and offering to make the final distribution in March 2014.

178 It was submitted further that Buckland intended the Lastrinas to so act.

179 Finally it was submitted that Buckland's conduct in now seeking to avoid the Finalisation Agreement by reliance on the Statute of Frauds is unconscionable and will occasion the Lastrinas detriment.

180 The only issue raised by Bullhead was that there can be no detriment because the contracts of sale the subject of the Finalisation Agreement all predate the Finalisation Agreement. There is no reply to the estoppel defence pleaded at paragraphs 53D and 53E of the Defence. It is obvious that the contracts of sale were backdated, although the relevant witnesses declined to answer questions relating to the backdating of the contracts of sale, relying - as was their right - on the privilege against self-incrimination. However, from the evidence as a whole there can be no doubt that at the relevant time the apartments were and remained unsold.

181 Accordingly, I am satisfied that all of the elements of the estoppel defence have, as was submitted, been made out.

182 It is as well to rehearse the relevant principles and authorities.

183 In Principles of Australia Equity and Trusts,[34] the learned authors express the principle and elements of equitable estoppel as follows -

The essence of the principle of equitable estoppel is equity's concern with circumstances in which a plaintiff has acted to its detriment on the basis of a fundamental assumption where the defendant's role in the adoption of that assumption by the plaintiff is such that it would be unconscientious to deny the plaintiff equitable relief. It is the defendant's failure, having induced or acquiesced in the adoption or maintenance of the assumption, with knowledge that it would be relied upon, to fulfil the assumption or otherwise permit the plaintiff to avoid the detriment to which he or she has been exposed that makes the conduct of the defendant unconscientious and which attracts the intervention of equity.

184 When considering the elements a useful starting point, although not universally accepted, but sufficient for present purposes, is the statement of Brennan J in Waltons Stores. At pages 428-9 Brennan J said -

In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.

186 An equitable estoppel may arise if the assumption is that the representor will act in a particular way in the future. Further, the relying party's assumption must be reasonable.

187 Next, the assumption must be induced by or arise out of the conduct including any representation of the representor.

188 The relying party must then take steps to act or refrain from acting based on the assumption. The action or conduct undertaken must be reasonable in all the circumstances.

189 The next element is knowledge or intention. There is a move away from the proposition of Brennan J to the effect that the representor must actually know or intend that the relying party will act or refrain from acting in reliance on the assumption or expectation.[35] However, this element is less relevant in the matter before me.

190 The final element is detriment. The relying party must suffer detriment if the assumption is not fulfilled. The real detriment is that which could flow from a change of position if the assumption was deserted.[36]

191 The significance of detriment is that it is this factor which makes it unconscientious or unjust for the representor to depart from the promise or representation. In Waltons Stores v Maher, Mason CJ and Wilson J said:

(E]quity will come to the relief of a [relying party] who has acted to his detriment on the basis of a basic assumption in relation to which the other party has 'played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it': per Dixon J in Grundt [at 675] ... Equity comes to the relief of such a [relying party] on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.[37]

192 In Walsh v Walsh,[38] Meagher JA, speaking for a unanimous Court of Appeal, said that '[t]he detriment which can support an estoppel by encouragement need not be financial and it is not necessary, where that detriment is the expenditure of money, that the expenditure have been on the property in respect of which the estoppel is sought to be enforced'.

193 The detriment suffered cannot be minor. It has been variously described as needing to be material or significant or substantial. In Sullivan v Sullivan,[39] Handley JA said:

The object of the exercise is to do equity and for that purpose 'detriment' is no narrow or technical concept. It need not consist of expenditure of money or other quantifiable financial disadvantage so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether departure from a promise would be unconscionable in all the circumstances.

194 Although it has often been said that there needs to be proportionality between the relief ordered and the detriment suffered, or that the court will, in making its orders, determine the minimum equity required to do justice to the relying party: this may no longer be the case. In Walsh v Walsh at [31], Meagher JA stated the current position as follows:

There is no governing principle that requires that the relief granted be that which is the minimum necessary to do justice. To the extent that there is a prima facie entitlement to relief on the basis that the adopted expectation is to be made good, that entitlement must be weighed against any injustice to the estopped party in doing so and the detriment suffered by the party who has acted upon the induced expectation. Consideration should also be given to whether the proposed relief has any adverse effects on the interests of third parties.

195 In my view and largely for reasons already given, I consider that all of the elements have been made out.

196 It is clear that Charlie assumed that by agreeing to remove the sign, Buckland was, in the circumstances and context and for the reasons given, embracing the Finalisation Agreement. This assumption, which Charlie was entitled to make and which was entirely reasonable, was specifically brought about, as indicated by the conduct of Buckland. By his statement and the broader conduct referred to he represented that the Offer was acceptable. The steps taken by Charlie, based on the assumption were entirely reasonable. In this case it is clear that Buckland intended Charlie so to act. The detriment is obvious and is considered in more detail later.

197 The third matter, although not specifically pleaded (or argued) clearly arises. It relates to the broader formulation of acceptance of the Offer. As referred to above, the defendants contended that acceptance of the Offer was the communication of the words 'you can remove the sign'. It was submitted that these words had to be construed in context. I have found that in context these words alone constituted acceptance of the Offer. However, this very context and conduct of Buckland suggests that there was acceptance of the Offer by conduct, that is conduct that went beyond, but of course included the words used. The conduct is the conduct referred to above that I have found was sufficient to give rise to the estoppel defence and of course acceptance of the Offer by use of the words as pleaded.

198 In suitable cases the Court may infer acceptance from conduct. The question is whether judged objectively the parties, and in particular the offeree has acted on the reasonable assumption that they have made a contract despite no specific identifiable acceptance. In these cases mutual assent is inferred from the specific circumstances.[40] Of course this relates to contracts generally and specifically to conduct judged objectively giving rise to acceptance of an offer or providing the necessary mutual assent to a contract.

199 After dealing with the artificial construct of offer and acceptance, the learned authors of Cheshire and Fifoot's Law of Contract, refer to acceptance by conduct and say this -

It will sometimes be the case that, where there is a clear offer, there is doubt about precisely when, or if, there was acceptance of that offer. Yet the parties have proceeded. The law has responded by moulding the rules of acceptance to accommodate imprecise human behaviour or to common practice. Acceptance can be inferred from conduct if that inference is indicated by the objective circumstances. An offeree 'promises' to be bound by the terms of the offer by simply getting on with it. This is an important aspect of the law because it recognises what commercial people actually do. For example, it is routine contracting practice to respond to an order for goods by starting the process of fulfilling the order.[41]

200 There is a strong line of authority supporting the above position.[42] Of course each case will depend on its own facts and circumstances.

201 In PRA Electrical, Nettle JA, citing Ormistan J in Vroon said -

Ultimately, however, the question is whether 'viewed as a whole and objectively from the point of view of reasonable persons on both sides, the dealings show a concluded bargain'.[43]

202 For the reasons given, in my judgment the dealings do indeed show a concluded bargain.[44]

203 The final matter concerns the consequences of the Finalisation Agreement and the alleged breach of an undertaking.

204 Pursuant to the Finalisation Agreement, Bullhead should have received $212,138. It did not receive this amount.

205 Bullhead claims that this amount should have been retained pursuant to an undertaking to such effect given in writing by K & L Gates on 5 August and repeated on 20 August 2014 ('the Undertaking'). Had the Undertaking not been breached it would have been entitled to this amount.

206 The defendants contend that, as a direct result of its breach of the Finalisation Agreement the sum of $212,138, otherwise due to Bullhead has been reduced by the incurring and payment of legal fees and liquidation expenses. There is, it was submitted, no basis for Bullhead to be paid any amount in excess of the sum remaining in the liquidation in which Bullhead can prove as a creditor.

207 In order to resolve this issue it is necessary to refer to some background.

208 Having received the first distribution of $396,000 in late December 2013, following the Offer, and as I have found acceptance thereof, and in response to Charlie's email of 18 March 2014 to the effect that he would soon be making final distributions in full settlement, Buckland responded by email dated 21 March 2014 to Charlie and the other Unitholders to the effect that distributions should be limited to a return of capital and that receipt by Bullhead would not be taken as a release or surrender of any rights. Buckland indicated that he was not accepting the distribution in full settlement and that he wished to challenge the issue of the Discounted Units.

209 On 15 April 2014 there was a 'board meeting' of the Trustee at Charlie's offices. Buckland was deliberately not notified of this meeting. The minutes record that it was 'unanimously resolved ... that final distribution of the remaining funds and property proceed as previously agreed'. While the word 'unanimous' is used, not all Unitholders or directors of the Trustee were present:

(a) in terms of Unitholders, no one from Aldo Lastrina's company or Bullhead were present; and

(b) in terms of directors, Buckland was not present.

210 Despite Bullhead's protests, on 2 May 2014, a further distribution of $421,824 was made to Jengeorgia and $266,295 to Shey.

211 The amount of $212,000, which on the defendants' case was due to Bullhead, was deposited into the trust account of the defendants' solicitors on around 20 August 2014 pursuant to the Undertaking. In its letter dated 20 August 2014 to DLA Piper, K & L Gates confirmed '... that the amount of $212,138 has been paid into our trust account for the Undertaking provided on behalf of [the Trustee] in our letter of 5 August'. The letter of 5 August relevantly provides that the Trustee undertook 'to pay into our trust account the sum of $212,138 pending resolution of the dispute'. Both letters advised that the Trustee reserved the right to be indemnified for its costs of defending any proceeding from the available funds of the Unit Trust.

212 The Trustee, on the instructions of Charlie and having received advice from K & L Gates, declared itself no longer bound by the Undertaking and subsequently paid legal costs[45] incurred with K & L Gates, on Charlie's instructions, in advancing the defendants own case.

213 The Trustee was then placed into administration on 15 January 2015, despite the fact that it was not trading, had not traded for some time and had no employees. The only funds available to the Trustee at the time was the $212,000 less the legal costs referred to. This amount has since been further depleted by liquidator's fees, such that Bullhead is only likely to receive approximately $36,036.43.

214 This is unacceptable. The sum of $212,138 should have continued to be held pursuant to the Undertaking until resolution of this proceeding as contemplated and indeed undertaken. This is what Bullhead was, at the time, entitled to according to the Trustee and it should have been in effect quarantined. Placing the Trustee into administration was an extravagant, unnecessary, costly and wasteful exercise. The fact that Bullhead denied the existence of the Finalisation Agreement is not an answer. This is in part what the dispute was about. The amount should have been held pursuant to the Undertaking and pending resolution of that issue and the proceeding. Costs of course is another matter.

215 In the result, there is a breach of the Undertaking but also a finding that the Finalisation Agreement is, contrary to the plaintiff's case, binding and enforceable. It remains to determine after further argument, the form of any order consequent on the breach of Undertaking and the extent to which the Trustee may be entitled to indemnification for its costs (as foreshadowed) and more particularly the vindication of its position in relation to the Finalisation Agreement.

216 It is strictly not necessary to deal with this issue given my findings in relation to the Finalisation Agreement. However, in deference to the parties and in case the proceeding goes further, I will deal with the issue.

217 The alternative claim by Buckland is that Charlie engaged in misleading or deceptive conduct by making false representations to Buckland.

218 In the further amended statement of claim, Bullhead claims that:

76. Prior to Bullhead's signing the Bullhead Deed of Accession and making the Payment, Carmelo Lastrina:

(a) invited Mr Buckland on behalf of Bullhead, to become an unitholder in the Trust;

(b) in or about February 2008 provided Bullhead with a draft Unitholders Agreement dated 8 February 2008, which provided that each unitholder investing in the Trust, would contribute $1 per unit in the Trust; and

(c) did not notify Bullhead that the Initial Unitholders had been or would be issued with the Discounted Units.

77. By reason of the matters alleged in the previous paragraph Carmelo Lastrina represented to Bullhead that each unitholder would hold units in the Trust in proportion to its capital investment ('the Representation').

78. The Representation was made in the course of trade or commerce.

79. In reliance on the Representation, Bullhead entered into the Deed of Accession and contributed the sum of $600,000 to the Trust and was issued 600,000 units in the Trust.

80. The Representation was misleading and deceptive or likely to mislead or deceive because:

(a) The Trustee had issued and/or intended to issue the Discounted Units; and

(b) The Initial Unitholders and Bullhead would not hold shares in proportion to their capital investment.

81. By reason of the matters pleaded above, Carmelo Lastrina engaged in conduct in contravention of Section 9 of the Fair Trading Act 1999 (Vic) by reason of which Bullhead has suffered loss and damage.[46]

219 Buckland met Charlie through Demarco. Buckland had been a tenant of Charlie's for approximately 10 years. They developed a social relationship, going on holidays and regular walks around the Maribyrnong river together. Prior to the Development, Buckland had no previous business dealings with Charlie. It was agreed that Buckland had said to Charlie that he was interested in investing with him.

220 In December 2007 or January 2008, Charlie had a conversation with Buckland in relation to investing in the Development. It was agreed that this conversation was initiated by Charlie and that he proposed Buckland invest $600,000 in exchange for 600,000 units in the Project. Buckland said that this conversation occurred in December 2007 in the foyer of the office premises that they shared. Charlie said that he was certain that this conversation occurred in January 2008 whilst walking because in his business dealings he didn't tell anyone about a property until he had purchased it, and the land was purchased on 17 December 2007.

221 Buckland gave evidence that during this conversation, Charlie said in return for $600,000, Buckland would receive a 10% interest in the Development because the purchase price of the building was $6 million dollars. Charlie also gave evidence that he said in exchange for $600,000 Buckland would receive 600,000 units in the project. However, Charlie gave evidence that he did not say to Buckland that the purchase price of the building was $6 million dollars. Rather, Charlie said to Buckland that he believed the building was worth $6 million and explained why that figure was different to the purchase price of Brickmakers. Buckland gave evidence that he had no discussion with Charlie about the possible allotment of the units in the Unit Trust at a price of less than $1.

222 Charlie gave evidence that in the same conversation he discussed the following with Buckland:

(i) It was proposed to develop the site as 3 separate developments and that they would develop a premium type of product as compared to other developments in the area;

(ii) Stage 1 would be 4 apartments, stage 2 would be roughly 15 apartments and stage 3 would be 24-28 apartments depending on what could be achieved with the council;

(iii) The property was due to settle on 17 March 2008 and that Charlie was preparing a feasibility model to show potential development costs and construction costs and what would be achieved in terms of potential sales;

(iv) The only way Charlie was prepared to undertake this venture was if the Lastrina brothers were the managers of the Development; and

(v) Brickmakers Place Pty Ltd was already formed and Charlie was speaking to Middletons lawyers about formulating a unit trust deed, unitholders agreement and management agreement.

223 In cross examination Charlie could not recall whether during this time (February/March 2008) he used the expression 'capitalisation of the trust at 6 million' to potential investors.

224 It was agreed that in February 2008 Buckland received from Charlie a draft unitholders agreement, a draft management agreement and financial feasibility model ('draft documents').

225 Buckland gave evidence that he briefly looked through the draft unit holders agreement, focusing on the shareholding, making sure that a 10% share was represented. Buckland gave evidence that he saw that the price of each unit was $1 and that under clause 5 of the draft Unitholders agreement that 10% represented 600,000 units and the total investment was 6 million units. Buckland gave evidence that the financial feasibility document confirmed that the property had been purchased for $6 million.

226 The draft unitholders agreement was sent by Buckland to Dr Ross Andrews ('Andrews'), a medical physician with whom Buckland had previously invested in properties with and was considering investing with as equal partners in the project.

227 On 1 March 2008, following receipt of the draft unitholders agreement Andrews sent Buckland an email listing 6 topics of concern in the project ('Andrews email'). The topics of concern were:

(ii) Reporting to Unitholders every 6 months;

(v) The need for unit holders to sign the same agreement; and

228 Under the heading 'total cost of the project', Andrews noted that the unit holder funds were to be $6 million. Under the same heading Andrews wrote:

Is there a cash flow analysis, etc available for our accountant to review and offer advice regarding whether he feels that it is a sound project from an accounting point of view?

229 During March 2008, Andrews indicated to Buckland that he would not invest in the project. In cross examination Buckland gave evidence that this indication was very late and that Andrews had raised in conversation the current economic climate to question to whether the project was a good investment at the time.

230 Buckland gave evidence that he then borrowed $300,000 from the bank to make up $600,000 for the investment.

231 On 26 November 2013, a Directors Meeting was held at Charlie's office in Young Street, Moonee Ponds. Stasi, Weda, Jafer, Simpson, Charlie, Dominic, Aldo, Paul and Buckland were in attendance. Buckland gave evidence that he had first heard from Demarco on 25 November 2013 that the allotment of units was less than $1 per unit, which raised concerns. Buckland gave evidence that he did not raise his concerns at the 26 November meeting because he was upset and he needed time to understand. Demarco gave evidence that he first became aware that the units were issued at a discount on 30 November 2013.

232 Demarco gave evidence that he called Buckland and asked whether he was aware of the Discounted Units. He said that he wasn't. Demarco gave evidence that there were a few discussions between Demarco and Buckland about the Discounted Units because Buckland couldn't understand that the Unitholders were getting back $4,860 million when he thought it should be $2,720 million.

233 Bullhead contended that Charlie concealed from Buckland his intention to issue the Discounted Units. It was submitted that the documents that Buckland was provided with make no mention of the issue of units at 11 cents, as opposed to the $1 that Bullhead paid. The conduct of Charlie was clearly misleading and deceptive conduct, entitling Bullhead to a remedy. The claim was not statute barred, it was submitted, because the cause of action did not accrue until the actual loss and damage was sustained. This occurred, it was submitted, at the time of the distribution.[47]

234 The defendants submitted that Buckland invested into a project with the knowledge that the cost of the land to the project was $6.0 million for which he received a 10% stake for $600,000. It was submitted that there was no obligation on Charlie to disclose to Buckland the purchase price of the land paid by the Initial Unitholders. Neither was there any obligation to disclose the commercial arrangement or the consideration for which the land was injected into the Unit Trust at a value of $6.0 million and the Initial Units issued to take account of the value of the land as seen by the Initial Unitholders. He was not misled. Nevertheless, Charlie did disclose to Buckland that the land had been purchased by the Initial Partners for a price of $3.65 million, but that they believed that they could on sell it for $6 million. On that basis Buckland was invited to invest $600,000 for a 10% interest in the Unit Trust to develop the land. In that way Buckland was made aware, it was submitted, that the land was being injected into the Unit Trust not at $3.65 million, but at $6.0 million. The principal document that contained the financial projections of the project was the Feasibility Model which disclosed that the cost of the land to the Unit Trust was $6.0 million.

235 The prohibition against misleading or deceptive conduct in trade and commerce was first enacted under section 52 of the Trade Practices Act 1974 (Cth) ('TPA') and complemented in Victoria by section 9 of the Fair Trading Act 1999 (Vic) ('FTA'). On 1 January 2011 the relevant sections in the TPA and FTA were replaced by national legislation comprising section 18 of the Competition and Consumer Act 2010 (Cth) sch 2 ('ACL').

236 Charlie's alleged misleading or deceptive conduct occurred before the enactment of the ACL. The relevant law is therefore section 9 of the FTA.

237 Section 9 of the FTA provides that:

9. Misleading or deceptive conduct

(1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Part is to be taken as limiting by implication the generality of sub-section (1).

238 To establish misleading and deceptive conduct the Court must be satisfied on the balance of probabilities that:

(b) the conduct conveyed a certain meaning; and

(c) the meaning conveyed was misleading or deceptive or likely to be so.[48]

239 Proof of conduct in Google Inc v ACCC[49] was considered by Hayne J:

It is...always necessary to begin consideration of the application of the section by identifying the conduct that is said to meet the statutory description "misleading or deceptive or ... likely to mislead or deceive". The first question for consideration is always: "What did the alleged contravener do (or not do)?". It is only after identifying the conduct that is impugned that one can go on to consider separately whether that conduct is misleading or deceptive or likely to be so.

240 To consider whether the alleged contravener engaged in the alleged conduct, the Court will look to a 'reliable contemporaneous record or other satisfactory corroboration'.[50]

241 Where there is conflicting evidence, the court will place 'primary emphasis on the objective factual surrounding material and the inherent commercial probabilities' together with documentation tendered in evidence.'[51]

242 Relevantly, in Watson v Foxman,[52] McLelland J said:

In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence of absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, construed. All of this is a matter of ordinary human experience.

243 Where the conduct is alleged to imply a meaning or where the impugned acts or omissions are capable of more than one interpretation, the court will admit evidence of the impugned conduct's surrounding circumstances. In WEA International Inc v Hanimex Corp Ltd,[53] Gummow J said:

There are some cases, and this case is one in my view, where submissions to the court have diminished force unless they are enlivened by evidence as to the circumstances in which the allegedly misleading or deceptive conduct is communicated to those said to be prejudiced by it and the relevant habits and attitudes of such persons. These materials then become part of the 'surrounding circumstances.[54]

The meaning conveyed was misleading or deceptive or likely to be so

244 In the High Court's decision in Butcher and Another v Lachlan Elder Realty Pty Ltd,[55] McHugh J said:

[109] The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself. It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct. Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole. The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document.[56]

245 The question is whether Charlie represented to Buckland that each unitholder would hold units in the Unit Trust in proportion to its capital investment, that is in proportion to the actual dollar per unit paid.

246 Buckland says yes, Charlie says no. There is no evidence that Charlie told Buckland that the trust would be capitalised at $6 million and that the purchase price of the land was $3.65 million. On the contrary, the Financial Feasibility Model recorded the land purchase cost at $6 million dollars. The draft unitholders agreement dated 8 February 2008 provided that each Unitholder documented that the Trustee issue would contribute a subscription price of $1 per unit. Consequently, the reliable contemporaneous records give no indication whatsoever that the Discounted Units would be issued in lieu of the requirement to actually pay $1 per unit as required by the Unit Trust Deed, as I have found. Further, I find as a fact that at no stage prior to Bullhead making the investment did Charlie say anything to Buckland about the Discounted Units or that the Initial Investors would not be paying $1 per unit. Finally, I do not accept, so far as may be relevant, that the impugned conduct was engaged in on behalf of the Trustee. It is sufficient to note that Charlie was inextricably and totally involved in the impugned conduct.

247 The conduct clearly conveyed or suggested that the land was acquired for $6 million and that all investors or Unitholders would subscribe for units by paying $1 per unit. In light of the contemporaneous documents, it is simply not good enough for the defendants to say that Bullhead should have done its due diligence. This is insulting, audacious and disingenuous in the circumstances and there was no need to do so.[57] The documents provided communicated a position (no Discounted Units) that Bullhead was fully entitled to rely on. Far from giving the full picture, the communication, conduct and documentation was silent, probably deliberately so (although it is not necessary to make such a finding) in a critical respect and that is why it is misleading.

Was the meaning conveyed misleading or deceptive or likely to be so?

248 The only document that indicated an intention to capitalise the trust at $6 million and issuing the Discounted Units was Stasi's internal document that was not provided to Buckland. For the reasons given above the conduct was misleading.

249 In the final analysis, it is more probable than not that Buckland believed that all the Unitholders would invest a total of $6 million of which he would receive 10% for a $600,000 investment.

250 The relevant conduct was in trade and commerce and loss, however formulated follows. It is not necessary to assess the various positions taken.

251 Bullhead submitted that the claim for misleading or deceptive conduct is not statute barred, because the cause of action did not accrue until the actual loss and damage was sustained. This, it submitted, occurred at the time of the distribution.[58]

252 The defendants disagreed. The claim for misleading or deceptive conduct under the Fair Trading Act 1999 (Vic) ('FTA'), having been commenced more than six years after the plaintiff invested in the Trust is, it was submitted, statute barred by reason of s 159(3) of the FTA.

253 The cause of action of a party who purchases property (in this case units in the Unit Trust) on the basis of a misrepresentation (in this case that the Initial Unitholders had paid $1 cash for each of their units) suffers damage in having received property worth less than it should have. The damage occurs, it was submitted by the defendants, at that point in time and can be readily ascertained by reference to the difference between what the plaintiff should have received compared to what he did receive. Any loss arising by way of a reduction in distributions is a consequence of the plaintiff having received less than it should have received. The loss is not, it was submitted, dependant on some contingency that is yet to occur. As such the plaintiff's cause of action accrued upon making the investment,[59] and thus the cause of action is statute barred. Further, concealed fraud cannot, it was submitted, be relied upon to extend the statutory limitation.[60]

254 In my opinion, the relevant loss is the diminution in the value of the asset acquired, namely the units. By virtue of the Discounted Units, the units acquired by Bullhead were worth much less. The distribution that occurred later was merely a consequence of this. However, the earlier real loss, comprising the diminution in value of the units was only suffered at the time that this was 'reasonably ascertainable'.[61]

255 The question then is when ought Bullhead to have been aware of the Discounted Units which was the event that underpinned and caused its loss. In my opinion Bullhead ought to have known of the Discounted Units no earlier than 17 August 2009.[62] As the proceeding was commenced in March 2015, it is not statute barred.

256 It is however barred by the Finalisation Agreement, which as I have found comprehensively resolved all disputes, including the claim discussed in this section.

257 In view of my findings and the decision that I have come to in relation to the various contested matters and in particular the Finalisation Agreement, it is not necessary to deal with the other minor and tangential matters raised. They are either not relevant, de minimis or not sounding in any damages. They were also overtaken by the way the proceeding unfolded.

258 I will hear from the parties as to the outstanding matter relating to the breach of the Undertaking, the appropriate form of order and costs.

[1] It is only Bullhead that makes the complaint.

[2] As referred to below at [112] leave will be refused.

[3] The minutes are in the same document ('the Minutes').

[4] The relevant principles (and authorities) are taken from the plaintiff's submissions. It is not necessary to expand on these principles which are of general application.

[5] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at [59], [102].

[6] ABC v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109.

[7] Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 at [53], [105].

[8] Hoyts v Spencer [1919] HCA 64; (1919) 27 CLR 133.

[9] 360 Capital RE Ltd v Watts [2012] VSCA 234; (2012) 36 VR 507 at [40] (in the context of a managed investment scheme).

[10] See 16(d) above.

[11] Between the Trustee and Ottor Pty Ltd ('Ottor') (controlled by Charlie and Domenic). Ottor was engaged to manage the Development.

[12] The suggested value given by Weda to the vendor prior to the acquisition as required by s 47A of the Estate Agents Act 1980 (Vic) was $4,000,000 (Exhibit P4).

[13] It is also strange that there was any need for the Deeds of Accession. As at 14 March 2008, the New Investors were on board. All units could have and should have been issued at the same time with all parties executing the same document.

[14] Reference was made to Hoyts v Spencer [1919] HCA 64; (1919) 27 CLR 133.

[15] The accounts refer to unit capital as being $2.72M, apart from the 2011 accounts given to Bullhead which erroneously included $5.7M a figure from a different project.

[16] Jacobs' Law of Trusts in Australia (7th edition LexisNexis) at page 370.

[17] Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373 at 410.

[18] Unitholders Agreement clause 2.2(d); Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 at 96-7.

[19] That is, Kyreli, Rubeo, Naranda Hall and Shey.

[20] Paragraphs 24B and 34A of the Amended Defence filed 9 July 2015.

[21] Re Somerset; Somerset v Earl Poulett [1894] 1 Ch 231 at 268; In De Braekt v Powell [2007] WASCA 55; (2007) 33 WAR 389 at 403; [2007] WASC 55; per Buss JA.

[22] Applegate v Moss [1971] 1 QB 406.

Rasmussen v Rasmussen [1995] VicRp 38; [1995] 1 VR 613 at 635.

Di Sante v Camando Nominees Pty Ltd [2000] VSC 211 at [51] and [58].

Reader and Ors v Fried and Ors [2001] VSC 495 at [23]- [25].

[23] Official Trustee in Bankruptcy v Tooheys Ltd (1993) 29 NSWLR 641 at 650 (Gleeson J).

[24] It would also be a strange result if the claim was not barred by statute because of the conduct of the defendants, but that same conduct was irrelevant in the laches defence.

[25] Plaintiff's closing submissions [50].

[26] The relevant factual matters in this respect underpin the estoppel case.

[27] The caveat came later (21 March 2014) and in response to Charlie's earlier email of 18 March 2014 (see paragraphs [140]-[142] above). It was too late and does not affect his earlier manifestation of acceptance.

[28] Further, on the facts there is as noted earlier a broader basis to conclude or infer that there was acceptance of the Offer. This is the second unpleaded formulation referred to above. It is conveniently dealt with after estoppel below.

[29] Section 126(1) of the Instruments Act.

[30] Section 53 of the Property Law Act.

[31] For cases applying this section, see Legal Services Board v Forster [2010] VSC 102; (2010) 29 VR 277 at [36]- [42]; Russets v McCardel [2014] VSC 287 at [53] and ff.; Curtis v Singtel Optus Pty Ltd & Anor [2014] FCCA 1286; Austral-Asia Freight Pty Ltd v Turner [2013] FCCA 298 at [30]; GetUp Ltd v Electoral Commissioner [2010] FCA 869; 268 ALR 797.

[32] Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 at 433.

[33] Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 at 432.

[34] Peter Radan and Cameron Stewart - LexisNexis - Second edition at 12.28.

[35] See Deane J in Verwayen at 445. See also Nettle JA in New Zealand Pelt Export Company Limited v Trade Indemnity New Zealand Limited [2004] VSCA 163 at [99].

[36] Grundt v Great Boulder Pty Ltd Gold Mines Ltd at 674-5 per Dixon J.

[38] [2012] NSWCA 57 at 14.

[39] [2006] NSWCA 312 at [20].

[40] Atco Controls Pty Ltd (In Liq) v Newtronics Pty Ltd (Receivers and Managers Appointed) (In Liq) and Others [2009] VSCA 238; (2009) 25 VR 411 at [34]- [37] per Warren CJ and Nettle and Mandie JJA.

[41] Ninth Australian Edition - N.C. Seddon and M.P. Ellinghaus; LexisNexis Butterworths, 2008; at [3.23].

[42] Brogden v Metropolitan Railway Co (1877) 2 App Cas 666.

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523.

PRA Electrical Pty Ltd v Perseverance Exploration [2007] VSCA 310; (2007) 20 VR 487 ('PRA Electrical').

Vroon BV v Foster's Brewing Group Ltd [1994] VicRp 53; [1994] 2 VR 32 at 79 ('Vroon').

[44] This finding is clearly obiter and in my opinion it was unnecessary to refer the issue to the parties for further consideration and submission. Such a course would have caused unnecessary delay and expense.

[46] Plaintiff Amended Statement of Claim, [76].

[47] Plaintiff's Closing Submissions, 12 [51]-[52]. Wardley Australia v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525-6, 527.57.

[48] Google Inc v ACCC [2013] HCA 1 at [89] per Hayne J.

[49] [2013] HCA 1 at [89].

[50] Watson v Foxman (1995) 49 NSWLR 315, 319.

[51] Lake Cumberline Pty Ltd v Effem Foods Pty Ltd [1995] FCA 1340 at [493].

[52] Watson v Foxman (1995) 49 NSWLR 315, 318.

[53] [1987] FCA 379; (1987) 17 FCR 274.

[54] WEA International Inc v Hanimex Corp Ltd [1987] FCA 379; (1987) 17 FCR 274, [280].

[55] [2004] HCA 60; (2004) 212 ALR 357.

[57] Betjemann v Betjemann [1895] 2 Ch 474 at 479 (per Lindley LJ).

[58] Reference was made to Wardley Australia v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525-6, 527.57 and 428 Lt Bourke St Pty Ltd v Lonsdale St Café Pty Ltd [2009] VSC 133 at [43].

[59] Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 per Mason CJ, Dawson, Gaudron and McHugh JJ at 527; per Brennan J at 535, 537-538; per Toohey J at 554-555.

[60] Reference was made to State of Western Australia v Wardley Australia Ltd [1991] FCA 314; (1991) 30 FCR 245 at 270. (The Full Court decision).

[61] Wardley Australia at 537 (Brennan J).

[62] The relevant information was provided at a meeting of Unitholders held on 17 August 2009. The Discounted Units were referred to in the financial statements which I find were received by Buckland at the meeting. I find that the relevant information was not provided at the meeting of Unitholders held on 25 March 2009.