Plaintiff v Defendants

EVIDENCE - Inferences - Where defendants elected not to lead any evidence at trial - Distinction between an inference that may help to reach a finding that is open on the evidence and one that is sought to be used to resolve pure conjecture - Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298, applied.

1 Did Sean Blythe and Timothy Wilson, and others associated with them, lawfully obtain business that might otherwise have been acquired by or remain with Advanced Fuels Technology Pty Ltd (AFT), the company with which each had worked? Or, as AFT claims, in doing so did they breach duties owed to AFT or contravene provisions of the Corporations Act 2001 (Cth) (the CA). These are the essential issues in this proceeding.

2 Upon the untimely death of Robert Bruce Thompson (known as Bruce) on 17 February 2011, the productive six year business partnership between he and Mr Blythe (the first defendant) in the compressed natural gas industry came to an end. Their business was conducted through AFT (the plaintiff). Each was a director of AFT and, through their separate corporate entities, each held equal numbers of voting shares.

3 For exactly two years following Bruce Thompson's death Mr Blythe continued as a director and Chief Executive Officer of AFT; but on 18 February 2013 he abruptly resigned. This case concerns the circumstances of Mr Blythe's resignation and whether his continuing participation in the compressed natural gas industry thereafter gives rise to any liability to pay damages or equitable compensation to AFT, or to account to AFT for profits he has since made.

4 Very soon after Mr Blythe left AFT he took up a consultancy role with Clean Air Power Pty Ltd (CAP), a client of AFT. Further, within weeks of Mr Blythe resigning, Mr Wilson (the second defendant), a valued employee of AFT with technical expertise, gave one month's notice of his intention to resign from AFT and, on 6 May 2013, became an employee of NGV Group Pty Ltd (NGV) (the fourth defendant).

5 NGV was incorporated on 26 April 2013. A company associated with Mr Blythe, Envirotrans Pty Ltd (Envirotrans) (the fifth defendant) was NGV's largest shareholder owning 70 per cent of the issued shares in the company. A company owned by Mr Wilson's father became a 10 per cent shareholder in NGV and the remaining 20 per cent shareholding was held by a company associated with Timothy O'Leary (the third defendant). Mr O'Leary was the sole director and secretary of NGV. He had no previous interest or involvement in AFT but it appears he was a friend or associate of Mr Blythe.

6 AFT allege that, over time, NGV and Envirotrans entered commercial arrangements with a series of companies who were or had been customers or business prospects of AFT: ATCO Structures (ATCO), Tas Gas, Coca-Cola Amatil (CCA), Brookfield Cogen (in relation to the Victorian Government's 'Energy for Regions' program, 'EfR'), other Brookfield entities, Gouge Linen (Gouge), AGL Energy (AGL) and CAP ('the eight businesses').[1] AFT alleges that NGV and Envirotrans were aided in obtaining those commercial arrangements by using information (some allegedly confidential) which Mr Blythe and Mr Wilson obtained while working at AFT. Additionally, AFT alleges its ability to conduct its own business was hampered by the wrongful failure of Mr Blythe and Mr Wilson to return vital company records and information to it upon their respective resignations.

7 Neither Mr Blythe nor Mr Wilson were subject to any contractual restraint of trade provisions in the terms of their employment or engagement with AFT. But AFT alleges they each breached or contravened a raft of duties owed to AFT by retaining or misusing AFT information, planning their departures from AFT and by taking up business opportunities with AFT customers following their departures. Broadly stated, AFT alleges breaches of various contractual and fiduciary duties (the existence of which the defendants dispute) and contraventions of provisions of the CA, in particular, ss 180 - 183.

8 To bring claims against NGV and Envirotrans, and to establish a means of seeking equitable compensation or an account of profits from them, AFT alleges that Mr Blythe, Mr Wilson and Mr O'Leary made and acted upon an agreement they reached in late 2012 or early 2013 that amounted to a dishonest and fraudulent design. The alleged elements of the agreement were that Mr Blythe and Mr Wilson would resign from AFT, set up NGV with Mr O'Leary, and use information wrongfully obtained from AFT to enable NGV to take up AFT's business opportunities. AFT claims that NGV and Envirotrans knowingly received benefits from that dishonest and fraudulent design. AFT also alleges that NGV, Envirotrans and Mr O'Leary knowingly assisted Mr Blythe and Mr Wilson in breaching their contractual and fiduciary duties and in contravening the CA.

9 Mr Blythe admits having been a director of AFT, and to being subject to the fiduciary and statutory duties applicable to that role, but denies AFT's allegation that he was an employee; rather, he maintains that he was a consultant. Mr Wilson admits he was an employee of AFT but denies he owed AFT the fiduciary duties of a person in senior management or that he was subject to the statutory obligations of an 'officer' (each of which AFT allege). Each denies that they breached the duties alleged, contravened any statutory obligations, engaged in any dishonest and fraudulent design or wrongfully retained or used AFT property or information. In substance, Mr Blythe and Mr Wilson say that they (and, through them, NGV and Envirotrans) simply engaged in lawful competition with AFT using know-how they each possessed and were free to employ.

10 All parties highlighted a tension - and, ultimately, a deadlock - that emerged within AFT after Bruce Thompson's death as being relevant to understanding and interpreting the events of which AFT now complains. Bruce Thompson's shares in AFT had passed to his widow, Lorraine Thompson. Although holding some non-voting shares of her own, there being no other shareholders in AFT Mrs Thompson's acquisition of her husband's shares meant that she and Mr Blythe had equal control over the company. Throughout 2011, 2012 and into early 2013, important differences emerged between Mr Blythe and Mrs Thompson in their approach to the management and direction of the company. Those differences led to Mr Blythe offering to purchase Mrs Thompson's shares in late 2012 but, at that time, Mrs Thompson was neither interested in selling her shares or in buying Mr Blythe's. Further negotiations in January and February 2013, then through the agency of solicitors representing their respective interests, failed to reach a resolution. As stated, Mr Blythe resigned from AFT on 18 February 2013.

11 At trial, Mr Blythe, Mr O'Leary, NGV and Envirotrans were represented by the same firm of solicitors and counsel. Mr Wilson was separately represented.

12 Mrs Thompson and her late husband Bruce had two sons, Malcom and Stewart, each of whom played some role in AFT, especially after the resignations of Mr Blythe and Mr Wilson. To avoid confusion between the three Thompson men, I will refer to them each by their full names rather than call any of them 'Mr Thompson'.

13 The questions arising for resolution are set out below.[2] They are arranged by reference, first, to the allegations against Mr Blythe and Mr Wilson, secondly to the allegations against the other defendants by reason of their involvement in the alleged dishonest and fraudulent design, and finally in relation to the relief AFT claims.

(a) What were the terms of the agreement pursuant to which he provided his services to AFT, and did any survive his resignation on 18 February 2013?[3]

(b) After leaving the company, did he retain any confidential information he had obtained as an officer or employee of AFT and, if so, did he breach any contractual or fiduciary duties he owed to AFT or contravene the CA?[4]

(c) In respect of any existing or potential opportunities available to AFT to do business (as pleaded) with the eight businesses, did he at any time breach any contractual or fiduciary duties he owed to AFT or contravene or involve himself in Mr Wilson's contravention of the CA?[5]

(a) Did he owe AFT any and if so which of the fiduciary and CA duties alleged by AFT[6] and did any survive his resignation from AFT on 29 April 2013?

(b) After leaving the company, did he retain any confidential information he had obtained as an officer or employee of AFT and, if so, did he breach any contractual or fiduciary duties he owed to AFT or contravene the CA?[7]

(c) In respect of any existing or potential opportunities available to AFT to do business (as pleaded) with the eight businesses, did he at any time breach any contractual or fiduciary duties he owed to AFT or contravene or involve himself in Mr Blythe's contravention of the CA?[8]

16 Did Mr Blythe, Mr Wilson and/or Mr O'Leary engage in the dishonest or fraudulent design AFT alleges,[9] or alternatively, did any of them knowingly assist in the dishonest and fraudulent design of the others or either of them?

17 Did Mr O'Leary,[10] Envirotrans,[11] or NGV[12] knowingly assist Mr Blythe and Mr Wilson (or either of them) in breaching any of the contractual or fiduciary duties they owed to AFT; or become involved in Mr Blythe and Mr Wilson (or either of them) contravening the CA; or knowingly receive benefits as a result of them having done so?[13]

18 If Mr Blythe[14] or Mr Wilson[15] breached any of the contractual or fiduciary duties they owed to AFT what (if any) loss or damage was caused to AFT[16] and are they liable to account to AFT for any and if so which benefits they received as a result?[17]

19 If Mr Wilson, Mr Blythe, Mr O'Leary, Envirotrans or NGV knowingly assisted another's breach of duty or was involved in their statutory contravention, what (if any) loss or damage was caused to AFT[18] and are they liable to account to AFT for any and if so which benefits they received as a result?

20 More will need to be said in detail about relevant legal principles later. But, before making findings of the relevant facts and addressing the issues, it is convenient to refer to some of the core principles of fiduciary duty, albeit at a high level, as well as set out the relevant statutory duties that will need to be applied.

21 In Chan v Zacharia,[19] Deane J considered various formulations of the principle governing a fiduciary's liability to account for personal benefit or gain. His Honour observed that what is conveniently regarded as the one fundamental rule in fact embodies two themes which, while overlapping, are distinct.[20] The two themes are commonly described as concerning conflicts of duty and interest, on the one hand, and use (or misuse) of fiduciary position, on the other. In that order, Deane J formulated them as follows:

Stated comprehensively in terms of the liability to account, the principle of equity is that a person who is under a fiduciary obligation must account to the person to whom the obligation is owed for any benefit or gain (i) which has been obtained or received in circumstances where a conflict or significant possibility of conflict existed between his fiduciary duty and his personal interest in the pursuit or possible receipt of such a benefit or gain; or (ii) which was obtained or received by use or by reason of his fiduciary position or of opportunity or knowledge resulting from it.[21]

22 In this case, AFT substantially focuses on a particular type of benefit it alleges that Mr Blythe and Mr Wilson wrongly appropriated: namely, 'maturing business opportunities' available to AFT from some, if not all, of the eight businesses. In this context, the notion of a maturing business opportunity is usually associated with the judgment of Laskin J in Canadian Aero Service Limited v O'Malley.[22] There, Laskin J formulated an aspect of the fiduciary duty a director or senior officer of a company owes to his or her employer in the following terms:

In my opinion, this ethic disqualifies a director or senior officer from usurping for himself or diverting to another person or company with whom or with which he is associated a maturing business opportunity which his company is actively pursuing; he is also precluded from so acting even after his resignation where the resignation may fairly be said to have been prompted or influenced by a wish to acquire for himself the opportunity sought by the company, or where it was his position with the company rather than a fresh initiative that led him to the opportunity which he later acquired.[23]

23 In Edmonds v Donovan,[24] the Victorian Court of Appeal, after referring to Canadian Aero, cautioned against any 'attempt to generalise at all in this area for, as is often pointed out, the existence and scope of fiduciary obligations must always be assessed in the particular context in which they are claimed to arise'.[25] Indeed, Laskin J said much the same in Canadian Aero:

As in other cases in this developing branch of the law, the particular facts may determine the shape of the principle of decision without setting fixed limits to it.

...

The general standards of loyalty, good faith and avoidance of a conflict of duty and self-interest to which the conduct of a director or senior officer must conform, must be tested in each case by many factors which it would be reckless to attempt to enumerate exhaustively. Among them are the factor of position or office held, the nature of the corporate opportunity, its ripeness, its specificness and the director's or managerial officer's relation to it, the amount of knowledge possessed, the circumstances in which it was obtained and whether it was special or, indeed, even private, the factor of time in the continuation of fiduciary duty where the alleged breach occurs after termination of the relationship with the company, and the circumstances under which the relationship was terminated, that is whether by retirement or resignation or discharge.[26]

24 Moving from fiduciary to statutory duties, AFT alleges that Mr Blythe and Mr Wilson breached ss 181, 182 and 183 of the CA. Those sections provide:

Good faith - directors and other officers

(1) A director or other officer of a corporation must exercise their powers and discharge their duties:

(a) in good faith in the best interests of the corporation; and

(b) for a proper purpose.

(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.

182 Use of position - civil obligations

Use of position - directors, other officers and employees

(1) A director, secretary, other officer or employee of a corporation must not improperly use their position to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the corporation.

(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.

183 Use of information - civil obligations

Use of information - directors, other officers and employees

(1) A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:

(a) gain an advantage for themselves or someone else; or

(b) cause detriment to the corporation.

(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.

25 I intend to address the questions I have listed under the issue-topics set out below:

(a) Nature of employment and duties owed (Blythe and Wilson);

(b) Retention or misuse of confidential information (Blythe and Wilson);

(c) Alleged breaches with respect to the eight businesses;

(d) Dishonest and fraudulent design;

(e) Knowing assistance claims; and

(f) Loss, damages and relief.

26 Before turning to the first of those topics I will set out in some detail the relevant factual context in which the disputed questions arise.

27 At trial, evidence was only given by witnesses called by AFT; Mrs Thompson, her sons Stewart and Malcom, John Hartley who worked as a consultant to AFT after Mr Blythe left, the company's external accountant Raj Bansal, a computer technician Mouhamed Mourad, and two expert witnesses. None of the defendants gave or called any evidence as they closed their cases at the conclusion of the plaintiff's case. The following account of the facts comes from admitted facts, tendered documents and the evidence of AFT's witnesses.

28 AFT was incorporated in July 1997 with Bruce Thompson as its sole director and, in effect, sole shareholder.[27] Bruce Thompson held his shares in AFT through a family company, Global Beat Pty Ltd (Global Beat). In January 2005, AFT engaged Mr Blythe as its Chief Executive Office and he became a director of the company in July the same year. On 16 May 2005 Envirotrans was incorporated with Mr Blythe as its director, secretary and sole shareholder.[28] At that time, further ordinary shares were issued in AFT resulting in Global Beat and Envirotrans holding nine shares each. Thereafter, Bruce Thompson and Mr Blythe operated AFT as though they were partners.

29 Also in 2005, AFT issued Mrs Thompson non-voting shares entitling her to receive dividends. After Bruce Thompson's death in 2011 ownership and control of Global Beat passed to Mrs Thompson and, on 31 August 2011, Mrs Thompson was appointed the second director of AFT along with Mr Blythe. By those means she and Mr Blythe became equal controllers of AFT, with Mrs Thompson directly or indirectly holding a small majority of the issued shares in the company.

30 Since his departure from AFT in February 2013 Mr Blythe ceased to be a director of the company but, through Envirotrans, continued to hold half the voting shares in AFT.

31 After Mr Blythe joined AFT and before Bruce Thompson's death, AFT operated as a small business consisting of a handful of employees. Apart from Mr Blythe and Malcom Thompson, there were two employees in Western Australia (one of whom was Mr Wilson) and a couple of employees in Melbourne. Mrs Thompson's involvement in AFT's operations at that time was limited to some bookkeeping and office tasks.

32 Bruce Thompson had first commenced in the transport fuel business in the early 1990s, performing conversion of motor vehicles to run on liquefied petroleum gas (LPG). Later on, he turned his attention to modifying vehicles to take natural gas in liquid (LNG) and compressed (CNG) form. While Bruce Thompson's background was in LPG, he saw the future in developing the business orientated towards the supply of natural gas to vehicles. Mr Blythe's background and experience was in the CNG industry. According to Mr Bansal, who performed accounting work for AFT before and after Bruce Thompson's death, first as an employee at Jonathan Partners before May 2009 and thereafter in his own practice, the skill sets of Bruce Thompson and Mr Blythe were complementary. Bruce Thompson brought technical expertise, especially in vehicle conversions, and Mr Blythe brought industry contacts and sales and marketing skills.[29]

33 In short, the partnership was focused on developing the natural gas business, although AFT continued to undertake some LPG conversions.

34 Within a couple of years of Mr Blythe joining AFT, the business consisted in the following activities:[30]

• converting vehicles to run on LNG and CNG (with some LPG);
• providing storage and refuelling infrastructure for businesses needing to refuel their vehicles with LNG and CNG;
• supplying certificates of compliance with industry regulations;
• supplying equipment (e.g. cylinders, spare parts et cetera) associated with the natural gas fuel supply and use; and
• providing specialist engineering advice to and conducting training for organisations using LNG and CNG systems.

35 AFT had also developed relationships, locally and overseas, with 'upstream' suppliers of equipment which it then sold and supplied to its 'downstream' customers.

36 From 2006 onwards AFT operated from rented premises at 15 Garden Drive, Tullamarine (Garden Street premises). In addition to the AFT business, the Thompson family had involvements in other businesses. One was a business dealing in batteries, and the other was a continuation of Bruce Thompson's former LPG business (that is, a wholesale business dealing in the supply of LPG equipment). Both of those businesses operated from rented premises at 5-7 Freight Road, Tullamarine (Freight Road premises). Malcom Thompson worked in the family battery business whilst his brother Stewart Thompson worked in the LPG business. Both worked out of the Freight Road premises. Mrs Thompson also had an office at the Freight Road premises.

37 As has already been stated, Bruce Thompson died on 17 February 2011. Almost immediately there were some indications of potential friction between Mr Blythe and Mrs Thompson. Mrs Thompson gave evidence that her son, Stewart, reported that at the funeral Mr Blythe had said he wanted to buy her shareholding. She had thought to herself, 'it's started'.[31]

38 Mrs Thompson and Mr Blythe met together on 28 February 2011 (February 2011 meeting).[32] Mrs Thompson gave evidence about this meeting and a typed note of it prepared by Mr Blythe was also tendered. Mrs Thompson said she substantially agreed with what was contained in Mr Blythe's note.

39 From Mrs Thompson's evidence of the meeting, there were several matters raised that foreshadowed ongoing themes of tension between her and Mr Blythe:

• the nature and extent of her role in the business;
• the involvement of her sons in the business;
• proposals for a third party to either buy the business outright or purchase some of its assets; and
• Mr Blythe's ongoing use of his company, Envirotrans, within the energy and fuel sector.

40 Mrs Thompson later accused Mr Blythe of having surreptitiously recorded the February 2011 meeting using an upturned mobile phone placed in the middle of the table. Mr Blythe denied having done so. Wherever the truth lies is of little relevance other than to highlight the wary attitude by one toward the other from an early stage.

41 Because there was agreement that Mr Blythe's note of the meeting accurately recorded the substance of their conversation, and because the note helpfully identified issues that became ongoing concerns, I will set out the note in full. I will then explain some of the key themes emerging from it. The note recorded the meeting as having taken place on 28 February 2011 in the AFT Training Room, commencing at approximately 9:45 am. The text is as follows:

Lorraine opened by stating that she wanted an open and honest relationship and Sean agreed. Sean stated that he looked forward to managing and growing AFT into the future and that he hoped he could provide a good return for the shareholders.

Lorraine raised the issue of the 10% of AFT that Bruce and Sean transferred to her (5% each) in 2005/6 and re-affirmed that it was entirely her initiative and Bruce was unaware. Sean accepted this and went on to explain that from his perspective he was in no position to negotiate at the time and accepted the outcome being that his dividend & shareholding would be reduced. Sean stated that he had not thought about this for many years and he had 'put it to bed'.

Lorraine spoke about Bruce's vision & legacy in regard to AFT and Sean also recognized the important role/input that Bruce had. Sean stated that he had viewed Bruce as his business partner and they came together in 2005 as they shared a common vision of what AFT could become.

Lorraine spoke about the roles that she would like to see Malcolm (Admin & Management) and Stewart (Operations) taking in due course. Lorraine also discussed the role and input that she would like to have in AFT- primarily finance (primarily budgets and BAS etc). Sean responded by explaining the many discussions that Bruce and he had in regard to the stand-alone nature of AFT and that in those discussions Bruce had never considered Stewart or Malcolm entering the business. Sean noted that over the past 6 months they had been actively negotiating with potential companies to purchase AFT and the likely outcome would be that Bruce would retire and sell down his shareholding. Sean would also sell down his shareholding but he would most likely maintain a management/minority shareholding in the company. Lorraine agreed that Bruce had discussed such issues with her but was not certain about the details. Lorraine mentioned that if AFT was acquired that she would like, if possible, to maintain a small shareholding - Sean said it could be possible but would be ultimately up to the purchaser.

Sean stated that Malcolm and Stewart maybe successful in their Battery & LPG business but their skills sets are not what is required in AFT and he did not see them having any involvement in the business. Lorraine and Sean agreed that this could not be r_esolved today and agreed_ to move on to the next issue.

Lorraine mentioned that perhaps we should get Paul Harrison back and Sean agreed that Paul has the skills/experience required and that perhaps in a couple of years he will return. Lorraine mentioned that she had spoken to Paul at the funeral and suggested that he should return to AFT. Lorraine suggested that she would call him within the next two weeks to see if he would return and Sean suggested that if she does and Paul agrees to meet, we will need to meet him together as he believed one of the reasons Paul departed was confusion about management & roles etc.

Sean then noted that Daryl Gladman had the requisite skills AFT needs quite urgently and was available to come back to AFT on a contract basis to support us. Lorraine stated that she could not accept Daryl returning as he was disrespectful to Bruce. Sean disagreed and Sean & Lorraine agreed to disagree and moved on to the next issue.

Lorraine suggested that in recognition of Bruce's contribution she should continue to receive Directors payments (salary) as and when Sean does at least for the time being. Sean did not think this was reasonable and suggested that AFT is not a superannuation fund and that Bruce's share holding will ensure that his beneficiary will receive a return via dividends and potential sale of the shareholding in the future. Sean & Lorraine agreed to disagree and moved on to the next issue.

Lorraine raised the issue of what Envirotrans Pty Ltd was and how it related to AFT - Sean explained that Envirotrans was his personal company and it holds his shares in AFT Pty Ltd. In addition it focuses on renewable energy & biogas (but not CNG or LNG projects as they are for AFT). Sean explained that Bruce was fully aware of what he was doing with Envirotrans which included consulting in regard to energy strategy, fuels and development of renewable energy projects). If a consultancy resulted in actual CNG or LNG projects than this would go entirely to AFT, one such example is Tas Gas where Sean was paid for 2 days of consulting to help develop/crystalise their NGV strategy. As soon as it became evident that Tas Gas were going to embark on the CNG project, Sean transferred the relationship to AFT and AFT now receives $2000 per month retainer payment for Sean to support Tas Gas in their Business Development activities in regard to CNG. Lorraine seemed comfortable and understood the differentiation.

Lorraine and Sean had a general discussion about the business and projects and even-though we have a good reputation and positioned well for opportunities a lot of work is required to realize the projects.

Sean raised the issue that AFT would be better situated in Altona/Laverton due to the majority of its customers/partners being based in the area. Lorraine recalled driving around with Bruce looking for sites in the past Sean suggested that not immediately but AFT should look to move as it makes good business sense.

Lorraine and Sean agreed they wanted to see AFT succeed end grow. Sean stated that he accepted that Lorraine will be a major shareholder and as the Director of the company he is committed to leading, managing & growing the business and act in the best interest of the shareholders at all times.

Meeting closed on good terms and the plan was to meet the following Monday 7th March but due to Sean being in Tassie this is scheduled for 1 pm on Wednesday 9th March.[33]

42 First, it can be seen that whilst Mrs Thompson wanted her sons to take up roles in the business, Mr Blythe did not believe their skill sets were what AFT required. He and Mrs Thompson agreed to disagree on that issue for the time being. It can also be seen that Mrs Thompson was keen to have Paul Harrison back in the business, with which Mr Blythe agreed, but there was disagreement about another possible employee, Daryl Gladman. One thing is apparent; with the passing of Bruce Thompson, both Mr Blythe and Mrs Thompson saw the need to introduce personnel with appropriate skills to assist in the conduct of the business. The adequacy or otherwise of the skills within AFT to conduct its business after Mr Blythe and Mr Wilson left is a question of some importance to which I must return later.

43 Another important matter to note is the reference to negotiations over the previous six months for the sale of AFT , or some part of it. According to the note, Mrs Thompson agreed that her husband had discussed those negotiations with her, although apparently she had not been certain about the details. This is a topic on which Mrs Thompson did not entirely agree with the note. She only recalled a discussion about a possible arrangement with APA Group (APA), a large energy enterprise, which, according to her, Mr Blythe said wanted to buy AFT for between $5 - $6 million. As far as any documentary evidence is concerned,[34] by the time of the February 2011 meeting discussions had reached the point of an email proposing the possible sale by AFT to APA of a refuelling station that AFT planned to build and operate on leased land belonging to United Petroleum Pty Ltd in Altona North (Altona station). Indeed, the email covered a wider arrangement whereby, for any future refuelling stations which AFT proposed to operate, APA would own and hold the assets whilst AFT would operate the refuelling business.

44 Whether it was the more limited APA proposal, or broader negotiations for the sale of AFT, it will later be seen that the Altona station sale concept became a particularly thorny issue between Mr Blythe and Mrs Thompson.

45 Another matter of some tension concerned the question of directors' remuneration. In part, this was linked to the future role of Mrs Thompson within the business. Mrs Thompson evidently saw it as appropriate that she continue to receive a director's payment 'in recognition of Bruce's contribution', whereas Mr Blythe disagreed saying that AFT was not a 'superannuation fund'. Clearly, Mr Blythe was of the view that directors' remuneration should be tied to the director's work contribution, rather than taking on the nature of a dividend.

46 Finally, it can be seen that Mrs Thompson was concerned about the possibility that Envirotrans, Mr Blythe's company, might compete with AFT in the CNG or LNG industry. Mr Blythe's note records that he reassured Mrs Thompson that any business in the CNG or LNG field was referred to AFT, giving the example of some business from Tas Gas. This suspicion, of course, goes to the very heart of the issues that arose later. But, importantly, the note evidences that Mrs Thompson agreed to Mr Blythe engaging in consultancy work within the energy and fuel sector confined to the provision of strategic advice, presumably because in doing so he would not be encroaching on AFT's business.

47 Mr Blythe and Mrs Thompson met again on 9 March 2011. Mrs Thompson's evidence about that meeting indicates that it was an emotional one. First, Mrs Thompson accused Mr Blythe of taping the February 2011 meeting (apparently because of the level of detail in Mr Blythe's note of it, which he had shared). Mr Blythe became quite emotional about the death of Bruce Thompson. According to Mrs Thompson, the two of them embraced and consoled one another. The meeting finished on a more positive note.

48 Reflecting on the meeting in an email sent the following day,[35] Mr Blythe said he appreciated the 'fresh start' approach at the meeting commenting that beforehand they had both come from 'positions of fear'. Among other things discussed at the meeting, Mrs Thompson and Mr Blythe discussed the possibility of transferring their company accounts from the Australian and New Zealand Banking Corporation (ANZ) to the Westpac Banking Corporation (Westpac). This, in fact, presaged another issue that was to become a problem later: that is, the fact that AFT had an overdraft from ANZ secured only against Thompson family assets, and not any of Mr Blythe's.

49 The fresh start soon faltered. Whether before or after their meeting, Mr Blythe prepared a draft of a shareholders' agreement, dated 9 March 2011, that he wanted Mrs Thompson to sign. Mr Blythe sent it to Mrs Thompson the following day. Mrs Thompson was not prepared to sign it.

50 The draft agreement recorded the following proposed outcomes:[36]

• Mr Blythe would agree to Mrs Thompson becoming a director;
• Mr Blythe would be appointed managing director (and chairman of directors), receiving $12,000 per calendar month in recognition of his day-to-day executive leadership;
• Mrs Thompson would be a non-executive director, but would work in a strategic capacity in collaboration with Mr Blythe and be involved in financial administration, in recognition of which she would receive $2,000 per calendar month; and
• neither Stewart Thompson nor Malcolm Thompson would have a management role, but Stewart and Malcom could support Lorraine in her role as non-executive director and Malcolm could also provide administration support one day per week.

51 Contrary to her apparent agreement that Mr Blythe be permitted to engage in private consultancy work providing strategic advice as recorded in Mr Blythe's note of the February 2011 meeting, the provision which Mrs Thompson said (in her evidence to the court) that she particularly objected to was the last one, namely:

It is agreed that Sean can continue to consult in and conduct/develop operating businesses (excluding CNG or LNG related business) via Envirotrans Pty Ltd. Sean commits to full disclosure with Lorraine where there is any potential for a conflict of interest.

52 Mr Blythe then produced a second draft agreement dated 16 March 2011,[37] which was a shorter version of the first. It contained much the same elements, including the same provisions with respect to the involvement of Mrs Thompson's sons in the business, but omitted any reference to Envirotrans.

53 As did the first draft, the second d raft described Mr Blythe as being both managing director and chairman of directors. According to Mrs Thompson, she objected to the second draft because of the reference to 'chairman of directors', saying she was not comfortable with Mr Blythe having a casting vote. But she said in evidence that she did not believe she ever conveyed that objection to Mr Blythe, saying she 'just sort of saw it and probably kept that to myself'.[38] In any event, Mrs Thompson was not prepared to sign the second draft either.

54 Thereafter, there was no further discussion about a formal shareholder agreement, and the proposal was left in abeyance. Despite the absence of any formal agreement, Mr Blythe and Mrs Thompson proceeded to work together according to an arrangement that reflected the principal elements set out in the drafts, other than in respect of Mrs Thompson's level of remuneration as I will come to shortly.

55 Around this time there was a rather revealing exchange of emails involving Mr Wilson, who was working in Western Australia, Mr Blythe and Malcom Thompson. It is worth recording because it contributes to an assessment of Malcom Thompson, his general business acumen and approach, and likely explanations as to why, after Mr Blythe and Mr Wilson later left AFT, AFT was not always successful in obtaining or maintaining business.

56 On 7 June 2011, Mr Wilson wrote an email to Malcom Thompson requesting information to reconcile his claims for payments for travel allowance and reimbursements for expenses against details in his bank account. The email, copied also to Mr Blythe, and two other employees who I infer had an interest in receiving similar information for themselves, commenced and concluded as follows (the bold was in the original):

Due to the amount of traveling I have been doing this year and the lack of payslips received from you, I have found it hard to reconcile my pays going into my bank account against travel allowance and reimbursements (eg: taxi fares). The last payslip I received was for March.

...

I would like these sometime this week, the earlier the better. I want to make sure I have all the correct info to do my tax return this year. I know the tax return problem I had for 2009 was my fault, not the companies, so I want to make sure I have everything properly documented for this years return.

57 In between these paragraphs were details of specific information Mr Wilson sought, including information about his staff leave entitlements. In my view, the email was direct in terms of the information sought, and why it was sought, and demonstrated a degree of frustration at the delay in receiving information. But there was nothing overtly disrespectful in its tone.

58 Malcom Thompson took offence at this email, forwarding it to Mr Blythe with a covering email that was also copied to Mr Wilson, to the two other employees, Robert Clarke and Paul Donatucci, and to Mrs Thompson. He wrote as follows:

Sean,

I would like to ask this little piss ant who the f*ck he thinks he is!! If it wasn't for the Thompson family AFT just wouldn't exist - that's the bottom line. Time for some respect around here!!! As for the bold text, I know where I would like to jam it. Maybe better for you to handle this before I do this is my unique style. Also, I'm guessing that if he spent more time working, and less time talking and sticking his hand out, then the job may have been done before the weekend. I only work one day a week. Pay slips not available on email.

Also, don't appreciate the general broadcast!!! Although you might want to inform Tim that if a general broadcast is warranted, then he might want to include the most important person, Lorraine as the major shareholder of AFT!!!

59 His reply was a totally unwarranted and abusive reaction to an employee seeking information about his entitlements. What made it worse was that it was sent to Mr Wilson's co-workers. In cross-examination Malcom Thompson accepted that this email was abusive. He claimed he just hit the 'reply all' button without consciously thinking where it was going. Had that been the case, his email would have been addressed, first, to Mr Wilson. But it was addressed primarily to Mr Blythe and only copied to Mr Wilson along with the others. So, his explanation did nothing to elevate my view of his credit. He said he had apologised to Mr Wilson, claiming that he was under pressure because of his father's death and coming to terms with it. I find that an unpersuasive explanation for this outburst.

60 As for his reference to his own 'unique style', he said his style was '[p]robably at that particular time, very much along those lines'.[39] However, in conjunction with other evidence of his dealings with AFT customers at a later time, I am not convinced it was a style isolated to this period of time. The tone of the email illustrates a particular view of the pre-eminence of the Thompson family within AFT which, if shared by Mrs Thompson, might explain some of Mr Blythe's difficulties within AFT after Bruce Thompson died.

61 Returning to the narrative, Mrs Thompson commenced in her role in administration at AFT, working with the part-time bookkeeper and generally assisting in answering any questions which the company accountant, Mr Bansal, might ask. Consistently with their arrangement, on 16 June 2011, Mr Blythe sent an email to other staff of AFT (five recipients) announcing that Mrs Thompson would be joining AFT two days per week in an 'administration management role' and would be the primary person responsible for all administration issues - that is, accounts payable and receivable, BAS and payroll.[40]

62 Their arrangement was further refined in a discussion in early August, confirmed in an email from Mr Blythe to Mrs Thompson on 8 August 2011[41] in which their respective monthly director's fees were agreed, as were their respective duties. Mr Blythe was to focus on 'growing and managing the business' and Mrs Thompson was to work three days per week in an administrative capacity. Mr Blythe was to receive $13,000 per month for his role as Chief Executive Officer and Mrs Thompson $10,000 per month 'in recognition of Bruce' and for her part-time administrative duties. Mr Blythe's agreement to these fees for Mrs Thompson amounted to a surrender of his earlier view as noted above, however, the remuneration was to be reviewed after 12 months having regard to market pay rates and the roles being performed. The topic of their relative levels of director's remuneration was to re-emerge later as a festering issue.

63 Mrs Thompson was formally appointed a director on 31 August 2011. From about then onwards, she and Mr Blythe had weekly meetings and also communicated via email.

64 According to Mrs Thompson's evidence, AFT's business during the second half of 2011 consisted in:

• continuing with the operation of refuelling passenger vehicles, in conjunction with Tas Gas, at two refuelling stations in Tasmania (at Moonah and South Point, completed early in 2011);
• completing construction and commencing the operation of the Altona station to be used to refuel Toll vehicles; and
• carrying out forklift conversions (for example, for Toyota and AdaptaLift).[42]

65 Mr Blythe was driving the initiatives such as Altona and Mrs Thompson gave evidence that she had no personal involvement in those activities (except for preparing monthly invoices).[43]

66 Apart from Mr Blythe and Mrs Thompson herself, AFT's Victorian employees at that time were Malcom Thompson (one day per week in administration), Mr Donatucci, Alex Courtney (a part-time book-keeper) and Gary Anderson.[44] In addition there was a branch in Western Australia with Mr Wilson and Robert Clarke.

67 On 19 January 2012 there was a full-day meeting between Mr Blythe and Mrs Thompson, for AFT, and representatives of Brookfield and Tas Gas.[45] Brookfield (Brookfield) is a large international infrastructure business involved broadly in gas and electricity utilities, ports and railway lines, and timber plantations across North & South America, Europe and Australasia.[46] Brookfield had many subsidiaries as its vehicles for involvement in particular sectors or projects. Where necessary to do so I will refer to the particular manifestation of Brookfield particular to a specific project, otherwise 'Brookfield' is simply a generic reference to the infrastructure business. Tas Gas was a subsidiary of Brookfield specifically engaged in retail natural gas assets and supply in Tasmania. The events of 19 January 2012 entailed meetings, visits to particular AFT business plants and operations, and a dinner. Mrs Thompson did not attend all the activities but was at least present at the primary meeting.

68 On this particular occasion the representatives of Brookfield/Tas Gas included Richard Sheather and Simon Himson from Tas Gas and Michael Cummings from Brookfield. As already mentioned, AFT had in place a business arrangement with Tas Gas operating two refuelling stations for passenger vehicles. Tas Gas also paid AFT a monthly fee for the consultancy services of Mr Blythe. It is evident that Mr Blythe had been working on a new and wider collaboration with Brookfield and it was that new venture that was the subject of the January meeting.

69 Mr Blythe had prepared a proposal titled 'The Australian NGV Infrastructure Opportunity' and emailed it to Mrs Thompson.[47] It was a relatively sophisticated presentation of 54 slides constituting, in effect, an argument for Brookfield and AFT to join forces in the CNG and LNG vehicle refuelling market. The presentation ranged broadly over many vehicle sectors, identifying target markets in forklifts, refuse trucks, concrete trucks, depot distribution trucks, buses, articulated trucks, car and light commercial vehicles, and fleet vehicles. The proposal appeared to contemplate Brookfield investing its capital in the infrastructure and AFT supplying its technical and operational know-how and experience in the natural gas vehicle refuelling market. Joining forces with a company the size of Brookfield would, for a relatively small business like AFT, seem to offer a very valuable opportunity.

70 In her evidence, Mrs Thompson acknowledged that one potential method for AFT to conduct its business was to do so in conjunction with partners who would own the refuelling assets. She understood that it was that model that was being presented to Brookfield.[48] An issue over this type of model was about to arise between herself and Mr Blythe in relation to the Altona station.

71 Soon after, in early February 2012, Mr Blythe and Mr Sheather exchanged emails. Mr Sheather reported that the presentation had been well received at Brookfield and suggested they move to drafting broad terms of a possible 'Relationship Agreement' between Brookfield and AFT.[49] This was occurring in the context of AFT moving ahead with its own Altona station for the refuelling of vehicles owned by Toll. The contemplation was that the Altona station would be the first step in the broader AFT/Brookfield venture drawing in other fleet operators, including extending the business with Toll to other sites. Mrs Thompson was copied on these exchanges.

72 A confidentiality agreement was executed between AFT and Tas Gas in February 2012 to enable the exchange of sensitive information.[50] Bullet points for a relationship agreement were prepared,[51] and then a more formal document (to be made between AFT and Tas Gas as a member of the Brookfield Infrastructure Group) was drafted by a firm of solicitors.[52] Mrs Thompson saw the confidentiality agreement which was provided to her probably around the same time as the more formal draft relationship agreement. In emails in May 2012 she asked Mr Blythe what progress had been made saying she wanted to discuss it with him before he had further discussions with Tas Gas.[53] It is not clear what happened in relation to the proposed relationship agreement with Tas Gas before July when a disagreement arose between Mr Blythe and Mrs Thompson about the structure in which the Altona station was to be held.

73 Meanwhile, in April 2012 Mr Blythe had informed Mrs Thompson of a response prepared on behalf of AFT to an early study conducted on behalf of the Victorian Government for the EfR project.[54] This project ultimately became a significant potential opportunity for AFT and, as mentioned earlier, is the subject of one of AFT's claims against the defendants.

74 Issues arose in July 2012 which revealed the emerging strain in the relationship between Mrs Thompson and Mr Blythe on the eve of Mr Blythe taking a month's leave to travel overseas between 5 August and early September.

75 Two meetings occurred in relation to the structure in which the Altona station was to be held and operated. The first meeting occurred on Monday 16 July between Mrs Thompson and Mr Blythe and was followed by an email exchange between them agreeing to a further meeting on 20 July which was to include Mr Bansal. At that first meeting Mr Blythe apparently spoke of his intention that the Altona station be sold to Brookfield/Tas Gas (consistently with the wider scheme discussed earlier in the year). In her email the next day (17 July) Mrs Thompson began expressing reservations, raising doubts about the financial merit of that structure. Mr Blythe responded by email agreeing to prepare a costing model for discussion with Mr Bansal, stressing that the 'sale of the asset to Brookfield is about the relationship/national strategy, freeing up cash and establishing a way forward for future deals'.[55]

76 The day before they met on Friday 20 July, Mr Blythe sent Mrs Thompson and Mr Bansal a series of spreadsheets he had prepared concerning the sale of the Altona station, his costings and projections.[56] The summary worksheet contained a comparison of projected earnings on the two scenarios of AFT keeping the station, on the one hand, and selling it to Brookfield, on the other. It also identified other positives and negatives associated with each scenario. Two key positives from the sale advanced by Mr Blythe were the immediate cash injection for AFT and the development of the 'Brookfield model' for expansion.

77 Mr Bansal said in his evidence that the meeting on 20 July ended in disagreement over the merit of selling the Altona station to Brookfield or Tas Gas. He thought that Mr Blythe was 'adamant' about selling to Brookfield and did not like the fact that neither he nor Mrs Thompson appeared to agree with him. Some of the grounds of disagreement were identified in evidence.[57] One objection raised by Mrs Thompson was, possibly, the lack of any written agreement with Brookfield formalising their business relationship.[58] Over the following weekend Mr Blythe wrote to Mrs Thompson stating that in view of her concerns they should delay any sale until they were in agreement, proposing a means of putting off further discussions with Brookfield/Tas Gas about the Altona station for a few months. However he wished to 'focus on developing the new sites and agreements' with Tas Gas on his upcoming visit to Tasmania.[59]

78 Mrs Thompson's reply would not have given him any cause for comfort. She proposed going one step further and delaying discussions with Tas Gas about 'all the refuelling sites...until we have something in writing from Brookfield/[Tas Gas]' together with assurances about AFT's entitlements to being able to maintain and service the refuelling stations.[60] She questioned whether profit margins justified returns from refuelling sites generally and raised an alternative strategy of pursuing ownership of smaller refuelling stations in their entirety. Such a strategy, she wrote, would mean AFT was not 'completely reliant' on Brookfield/Tas Gas.

79 In short, Mrs Thompson's email strongly questioned the entire approach Mr Blythe appears to have been working on for a considerable time, going right back to the 2009 concept with APA and then advanced more substantially with Brookfield.

80 Alongside this conversation, another issue was looming. AFT had enjoyed an overdraft with a limit of $100,000 with its banker, ANZ. The bank manager, Mr Orrell, had advised that the facility was to be withdrawn at the end of July 2012 (whether due to natural expiry or something else was not clear). Until then, the overdraft facility had been secured by guarantees and a mortgage over real property belonging to the Thompsons. To put in place any new facility, whether for the same amount or something less, numerous things were required. In addition to updated financial information of past and present performance, ANZ wanted profit forecasts. It also wanted to know what guarantees and other security was being offered.

81 Mrs Thompson conveyed much of this information to Mr Blythe in an email dated 24 July 2012.[61] Mr Blythe saw Mr Orrell the same day and reported to Mrs Thompson that he was hopeful ANZ would provide a temporary facility for $50,000 for 2 months pending their provision of the requested financial information.[62] For the provision of the temporary overdraft Mr Blythe listed a number of financial and security documents that would need to gathered within a few days. He requested Mr Bansal to prepare balance sheet and profit/loss statements for FY2011 and drafts for FY2012, while Mr Blythe would attend to a projected cash flow for FY2013. He said he had already given a personal guarantee and was open to giving further security if needed. He requested that Mrs Thompson provide a personal guarantee as well.

82 For a number of reasons, AFT's financial accounts for the previous few years had not been finalised. Mr Bansal was working on them. By the beginning of August 2012 AFT was experiencing cash flow problems and was chasing debtors.[63] Mr Blythe was due to leave for overseas, was still seeing clients interstate and had arranged a meeting with Mrs Thompson on Tuesday 7 August to work through issues. Ahead of that meeting Mrs Thompson provided him with a list of concerns. She said she was not being adequately informed about the outcome of his interstate trips; challenged his view about obtaining an independent business valuation for the bank; expressed surprise that an asset register had not already been completed; and queried whether all expenses had been appropriately represented in the accounts.[64]

83 Just how that final meeting went, assuming it occurred, was not the subject of any detailed evidence at the trial. In any event, Mr Blythe left for overseas very shortly after it was scheduled to occur. There is no evidence of any further communication between him and Mrs Thompson until he returned in the first week of September.

84 But, clearly, Mr Blythe left for his holiday with much to think about. Only 18 months earlier he had been in a partnership with a person who had complementary skills in the business and with whom, it would appear, he shared similar a business vision. Perhaps, when Bruce Thompson died, Mr Blythe thought he could seize an opportunity to take the business in a different direction to any that Bruce Thompson might have approved. Perhaps Mr Blythe was accustomed to being entrusted by Bruce Thompson with significant independence in AFT's contractual negotiations and decisions that assumed that situation would continue. Perhaps Mrs Thompson simply had different ideas to those of her husband. I cannot say and make no such findings.

85 Whether or not any of those speculations might supply an explanation, on numerous fronts Mr Blythe's and Mrs Thompson's approach diverged. Whereas Mr Blythe entertained grand ideas of expanding the business, leveraging off the scale and financial strength of Brookfield, Mrs Thompson doubted that approach and seemed to prefer that AFT maintain greater control over its own destiny. Whereas Mr Blythe seemed to assume he could confine Mrs Thompson to managing the administration while he made the significant business decisions, he was finding that Mrs Thompson had a very different view about the level of detail at which she wished to participate. Further, whereas Mr Blythe considered that 'drawings' from the business paid to directors should reflect the relative differences he saw between his technical and operational contribution and the contribution Mrs Thompson could make, Mrs Thompson had a quite different view. In FY2012, the directors' payments increased from the previous year's level of $116,000 to $316,000.[65]

86 With their strategic vision and personal styles being so divergent but their voting rights within the company being equal, Mr Blythe must have wondered what the future held. It is therefore not surprising that when Mr Blythe returned from overseas in early September, he immediately raised the prospect of one of them buying out the other. But his suggestion took Mrs Thompson greatly by surprise. The fact that it did, and her determined resistance to even consider it over the ensuing five and a half months, reveals, in my view, a certain lack of commercial reality. For a proper understanding of Mr Blythe's resignation decision, which is an important consideration when assessing the character of his conduct against principles of fiduciary duty, it is necessary to track the story in some detail.

87 On 6 September 2012 Mrs Thompson, Mr Blythe and Mr Bansal met to discuss the company's financial accounts. It was their first meeting after Mr Blythe's return from overseas. It lasted some two hours. The FY2010 accounts still had not been prepared due to what Mr Bansal explained as a need to redo figures prepared by Jonathan Partners. He warned that AFT was likely to have a large GST liability to pay. Toward the end of the meeting, Mr Blythe announced to Mrs Thompson that he wanted to buy her shareholding. Mrs Thompson expressed surprise. After some discussion she said she did not want to sell. Mrs Thompson said that, after seeing her evident surprise, Mr Blythe lent across the table to her and reassured her, telling her not to worry and saying 'it will be fine'.[66]

88 Mr Bansal said that Mrs Thompson told him after the meeting (or had said in the meeting) that she did not want to sell because of her attachment to her late husband and what the company had meant to him.[67] Indeed, Mrs Thompson's evidence was to the same effect.[68] Even recalling and giving evidence about it in 2017 caused her to become distressed.

89 In an endeavour to help the parties, Mr Bansal sent them both an email following the meeting.[69] He recommended a five point process to help them reach an 'amicable resolution'. He produced those points in response to Mr Blythe asking at the meeting how the company might be valued in the context of his wish to buy Mrs Thompson's shares. Those five points recommended that specific financial information be compiled. Mr Blythe used those points to produce a valuation on 1 October.

90 Leading to 1 October, Mr Blythe told Mrs Thompson he was working on the valuation and waiting on figures from Mr Bansal. He suggested dates on which they should meet to discuss his proposal. Mrs Thompson preferred to focus on the company's ongoing business such as progress on talks with Brookfield/Tas Gas;[70] progress on the overdraft application to ANZ;[71] ongoing cash flow problems and, as one measure to assist, the postponement of further directors' payments.[72]

91 On 1 October 2012 Mr Blythe sent Mrs Thompson and Mr Bansal a spreadsheet containing his valuation of AFT. He accompanied the document with an email in which he admitted he was no expert in valuation, said he thought that an independent valuation could value the company more conservatively because AFT lacked written contracts with its customers, its business being largely 'relationship-based', and asked for a meeting the following week.[73] He said he wished to have a resolution by the end of October, foreshadowing a possible need for an independent valuation or mediation.

92 By reference to the five points suggested by Mr Bansal, Mr Blythe arrived at a valuation of $539,738 giving a value for Mrs Thompson's 55% shareholding (including her 5% non-voting shares) at $296,855. The valuation comprised a summary worksheet and 14 supporting schedules dealing with AFT's various business operations. On its face, considerable time and effort appears to have been devoted to producing it.

93 Mrs Thompson said in evidence that when she received Mr Blythe's valuation she felt 'relieved' because it was, in her view, too low and so she would not need to make any decision about selling.[74] I took that to mean that she did not think she needed to take it seriously. When Mr Blythe pressed for a date and time to discuss it, Mrs Thompson avoided committing to any such meeting although she was willing to meet to discuss ongoing operational concerns. In her evidence Mrs Thompson maintained that one reason she and Mr Blythe did not meet to discuss his offer was that they could not coordinate availability.[75] In one email she said she could not attend on a proposed date because she had 'a few appointments ...[to] attend to one being a dental check-up'.[76]

94 However, a week after she received the valuation, she wrote to Mr Blythe asking that he not 'continue pressuring and intimidating [her] with regard to the sale of [her] shareholding'. She said she needed more time to consider and had not yet read his draft valuation 'in detail'. She finished saying, 'If you insist on an answer now, then the answer is "No, I am not selling"'.[77]

95 Mr Bansal had a conversation with Mr Blythe about a week after he received the valuation. Mr Blythe said that if Mrs Thompson was not willing to sell her shares then he was expecting her to make an offer to buy his instead. Mr Bansal then spoke to Mrs Thompson who said she was not willing to sell or doing anything about it because 'the passing of Bruce was very raw to her'.[78] Mrs Thompson said a similar thing at another point in her evidence.[79]

96 Evidently, the failure of negotiations led Mr Blythe to resort to instructing solicitors to press the matter on his behalf. He consulted Harwood Andrews. That firm wrote to Mrs Thompson on 16 November 2012.[80] The letter set out Mr Blythe's formal offer to purchase the shares held by Mrs Thompson and her company, Global Beat. The offer was now a little different. Mr Blythe offered to pay $350,000 plus a percentage of the earnings of the company made in FY2013 and FY2014 when those earnings were determined. Some other terms were suggested, with a proposed completion date to be 1 January 2013.

97 Additionally, Mr Blythe's solicitors said he was prepared to attend a 'round table' conference to discuss the terms if that was desired. The offer was predicated on the view that the company could not continue as it was and that Mr Blythe considered it necessary for one shareholder to be bought out. Mr Blythe's solicitors wrote that while there were reasons for that view, for the present purpose it was not necessary to go into them. Mrs Thompson passed the letter to her own solicitors, McKean Park, who thereafter took up further exchanges on her behalf.

98 The response from McKean Park dated 20 November[81] would not have encouraged Mr Blythe. It set out a list of criticisms about the contents of the Harwood Andrew's letter, the basis of the valuation and Mr Blythe's conduct generally. The offer was rejected. No counter offer was made but advice was offered as to how Mr Blythe should support any further offer he intended to make. In the letter, a concern was expressed that Mr Blythe had been having (unidentified) discussions with other companies to restructure the business, kept secret from Mrs Thompson, which would result in a substantial increase in AFT's value after she was bought out. Mrs Thompson's solicitors pointedly reminded Mr Blythe he was under ongoing duties to act in the best interests of AFT.

99 However, the letter advised that, in any event, Mrs Thompson would not be considering any offer to purchase her shareholding prior to 1 February 2013. Apart from dealing with the sale of shares, McKean Park raised separate issues of concern, namely: Mr Blythe receiving 50% of directors' 'fees' (when his shareholding was only 45%); Mr Blythe not paying proper attention to the company's ongoing business; and Mr Blythe keeping company records at his home. The letter finished stating that any further communication on 'this matter' must be conducted through solicitors only.

100 Harwood Andrew's response for Mr Blythe on 3 December 2012 was short.[82] Unsurprisingly, they made the point that McKean Park's letter only served to underscore the 'complete breakdown in the relationship of the parties'. A round table conference was proposed within seven days on the basis that postponing further discussion about the relationship breakdown was likely to have a detrimental impact on the ongoing conduct of the company. When Harwood Andrews later sought a response to that letter McKean Park informed them on 17 December that Mrs Thompson was not prepared to enter any discussions until February 2013, saw the relationship as workable and did not see any existing impediment to the conduct of the business. Accordingly, there were no further discussions on the topic at that time.

101 In theory, of course, there need not have been any impediment to the conduct of the business of AFT. But that assumed its directors were jointly content with the company operating without any significant change to its direction and both willing to support its operations on that basis, with personal guarantees and other securities if necessary, satisfied that in doing so their 'investment' in effort and resources was consistent with - or, at least not detrimental to - their respective long term interests. That may have been Mrs Thompson's position; but it was not Mr Blythe's. Mrs Thompson could afford to stay still; Mr Blythe did not see that as an option. Mrs Thompson manifestly failed to appreciate that difference, as events to follow proved.

102 Meanwhile, other issues continued to intervene: the EfR opportunity developed some momentum and required a response from AFT; financial pressures continued to mount and the overdraft issue became more acute; and, in the midst of this, a decision was required about whether to maintain the Western Australian operation where Mr Wilson was employed.

103 Around mid-November 2012 the Victorian Government issued an invitation for expressions of interest to participate in the EfR.[83] The EfR project was described as:

The development and operation of a delivered natural gas capacity for regional Victoria utilising alternative solutions including CNG and/or LNG infrastructure; delivery of natural gas to town boundaries; development and operation of local in-town reticulation networks; sourcing of wholesale gas supply and provision of gas retail services.

104 Fourteen regional towns were listed as the priority towns to receive delivery of natural gas. Brookfield lodged a response stating its interest in submitting a formal submission to any future bid process, in conjunction with AFT.[84] Indeed, it may be that Mr Blythe was responsible for drafting or at least modifying Brookfield's submission. More detail will be given below in these reasons when I come to consider the eight business opportunities relied upon by AFT in its claim. For now, it is sufficient to note that Mr Blythe kept Mrs Thompson informed of developments concerning this opportunity. On 6 December he sent to Mr Sheather, copied to Mrs Thompson, the various documents to be submitted to the government, requesting Mr Sheather's modifications.[85] As with Mr Blythe's earlier company valuation and offer to buy Mrs Thompson's shares, Mrs Thompson forwarded the EfR documentation to her son, Malcom.

105 Just prior to the Christmas break Mr Blythe and Mrs Thompson corresponded about financial matters, with Mr Blythe producing and sending a summary of AFT's orders for the first three months of 2013 and a cash flow forecast.[86] That document was the subject of a meeting early in the new year.

106 On 8 January, while Mr Blythe was still on leave, Mrs Thompson emailed him to say she was transferring $8,000 of her own money into AFT to cover staff wages, as the company's bank account did not have sufficient funds to meet payments.[87] For the purpose of producing up to date financial information for discussion, Mr Blythe asked for the removal of seven itemised receivables appearing in a list that had been prepared by Mr Bansal, explaining why each of them was either no longer owing or required adjustment.[88]

107 On 15 January 2013, Harwood Andrews attempted on Mr Blythe's behalf to advance the issue of the purchase of Mrs Thompson's interests in AFT.[89] I set out the letter in full (Mr Brett was a solicitor at McKean Park and Mr Anderson was a solicitor at Harwood Andrews):

Further to David Brett's discussion with Richard Anderson on 18 December 2012 we summarise the position of Mrs Thompson as follows:

1. Our client's 16 November 2012 offer to acquire the interest in AFT held by Mrs Thompson and Global Beat Pty Ltd has been rejected. No counter offer has been made.
2. Mrs Thompson apparently has some concern that our client may have had some negotiations with, or tentative arrangement in place, to dispose of AFT after acquiring Mrs Thompson's interest for a higher price to an unspecified third party (an assertion which our client categorically denies).
3. Mrs Thompson objects to the current payment of directors fees, presumably as the current arrangement purportedly gives our client a greater entitlement to participate in the profits of AFT than would otherwise be the case if profits were allocated in accordance with the rights attaching to the various shares held by our respective clients.
4. Notwithstanding the existence of tensions between our respective clients, they have continued to conduct themselves in a civil manner in relation to the operation of AFT and have sought to avoid argument.

Without wishing to debate the merits of our respective client's positions, there appears to us to be certain issues about which there should be no dispute:

1. Regardless of the reasons (a point made in our initial letter to Mrs Thompson of 16 November 2013), the fact is the relationship has broken down between the parties. If nothing else this is demonstrated by Mrs Thompson's concern that our client may be, in effect, in breach of his duties as a director by holding discussions with third parties to the detriment of AFT.
2. The fact that our clients continue to behave in a civil manner towards each other merely reflects their professionalism and reflects well on both of them. Civility between our respective clients does not mean our clients can continue to work with each other in the business of AFT. For our client's part, he has instructed us in relation to a number of issues of concern but he sees little point in inflaming the situation by articulating them. Doubtless Mrs Thompson has provided you with similar instructions and at least some of those issues are referred to in your 30 November 2012 email.

1. Our client agrees that the approach involving directors fees is inappropriate, although not for the reasons suggested by you in your 30 November 2012 email. The directors fees paid on an ad hoc basis ignore the contribution of our respective clients to the operation of AFT. More appropriately, our client should be paid for his role as Chief Executive Officer of AFT. Likewise Mrs Thompson should be paid an appropriate remuneration for the administrative tasks which she undertakes. Any directors fees should then be relative to the tasks undertaken by the directors. On our instructions, consistent with our comments below, this is most unlikely to result in an increase in the profits of AFT.

1. It is clear that AFT is currently struggling with morale issues which any dispute between our respective clients can only serve to exacerbate. This has been particularly apparent in the Western Australian branch of AFT. This is yet another reason why the differences between our clients must be resolved promptly.
2. Perhaps of greatest importance is the ongoing financial performance of AFT. Some of the financial issues encountered include the following:
   • outstanding directors fees have been netted off at the end of each financial year to avoid carrying forward any liability, therefore inflating the profitability of AFT;
   • Mrs Thompson has refused to sign the required bank security documents (which have been signed by our client) which have been necessary to reinstate the overdraft previously used by AFT to fund its operation. imposing financial strain on AFT's operations; and
   • AFT is currently unable to pay its creditors and has required a cash injection of $8,000 from Mrs Thompson on 9 January 2013 in order that wages could be paid on that date.

Regardless of Mrs Thompson's desire not to be troubled with the above issues before 1 February 2013, you will appreciate that, as a director of AFT, she does not enjoy the luxury of determining when and if issues of importance to AFT might arise.

While our client reserves all of his rights in relation to issues referred to above, and without prejudice to any of those rights, our client remains prepared to purchase the interests in AFT of Mrs Thompson (and Global Beat Pty Ltd). Our client is quite prepared to have the value of the shares determined by independent valuation and we are happy to discuss with you appointment of an independent valuer.

However, you should be aware that our client is not prepared to allow the above situation to continue indefinitely. While we do not wish to impose any arbitrary deadline, and subject in any event to our client being satisfied that the obligations of AFT to its staff and creditors can continue to be met, we seek your response by no later than Friday 25 January 2013. Meanwhile if you would care to submit to us the name of a proposed valuer we will seek appropriate instructions.

108 The reference in the second bullet point under sub-paragraph e) in the letter caused Mrs Thompson some consternation. She wrote to Mr Orrell at ANZ who stated that the issue of the overdraft had not progressed to the stage of requiring documents and that no party had been requested to sign any.[90] On 22 January, she also took up with Mr Blythe the need for him to inject more money into AFT to deal with its current cash flow crisis, suggesting that they each contribute $59,000 (of which she had already contributed $19,000).[91] Mr Blythe queried how AFT could repay an additional liability of $118,000 implied by those directors' loans. He urged Mrs Thompson to focus on his solicitor's most recent letter concerning resolving the larger issue of AFT's ownership.

109 On 23 January 2013 McKean Park sent a reply to Harwood Andrew's letter.[92] In it, they:

(a) stated that Mr Anderson had misinterpreted the conversation with Mr Brett, as outlined;

(b) warned that if Mr Blythe sought to 'manufacture a "deadlock" position' it might be a breach of his duties as a director of AFT'; and

(c) refuted many of the issues raised as problems in Harwood Andrew's letter, such as the Western Australian office, the inability to pay creditors, and Mrs Thompson's alleged failure to sign bank security documents.

110 Significantly, the letter reiterated Mrs Thompson's position on any sale:

Your client wishes to purchase our client's shares in the company. There is no basis on which your client can compel our client to sell the shares to him, and she is entitled to negotiate as and when she deems fit. If you have specific issues in relation to the conduct of the company, then our client has, and will continue to address them. She is not, and has not, refused to consider issues relating to the conduct of the company, but is simply exercising her rights, as a shareholder, not to negotiate on the sale of her shares until she believes it is appropriate to do so.

We are instructed that if your client has particular "issues of concern", he ought to articulate them so that our client can consider them and respond accordingly.

111 Harwood Andrews responded on Mr Blythe's behalf by letter the next day.[93] They debated a number of the points that had been made by McKean Park, and claimed that Mrs Thompson was 'delaying confronting the reality' that the relationship had broken down. They repeated Mr Blythe's previous offer to buy Mrs Thompson's shares but went on to raise alternative means of achieving a resolution, including that Mrs Thompson buy his shares instead:

Our client's position is simple and straightforward. He is prepared to acquire Mrs Thompson's shares at valuation, Mrs Thompson previously having rejected what, on any view, was a fair and reasonable offer. Does Mrs Thompson have any proposal for resolving the dispute? Is Mrs Thompson prepared to acquire our client's shares in AFT, or does she consider it possible to divide AFT's business in some way that is reasonable to both parties to allow them to go their separate ways ? To date Mrs Thompson has made no contribution, in any practical sense, to resolving the dispute.

112 In the midst of these exchanges, AFT received advice on 16 January that the EfR submission had been successful and that Brookfield Cogen (the Brookfield entity responsible for the submission) had been shortlisted to proceed to the Request for Tender phase.[94] Mr Blythe passed on the advice to Mrs Thompson the same day.

113 On 25 January 2013 Mr Sheather wrote to Mr Blythe advising him that Tas Gas would be terminating payment of the monthly consultancy fee paid to AFT for Mr Blythe's services, after reviewing the progress of CNG development within Tasmania. Thereafter, Tas Gas would only pay fees for work on an ad hoc basis. Mr Blythe passed on Mr Sheather's email to Mrs Thompson.[95]

114 The critical events of February 2013 were two meetings between Mr Blythe and Mrs Thompson, the first also attended by Mr Bansal. They took place on 4 February and 14 February. Mr Blythe then resigned on 18 February.

115 The evidence of what occurred at the first of those two meetings came from some typed notes of Mrs Thompson's emailed to Malcom Thompson the following day,[96] and the evidence given at the trial by Mrs Thompson and Mr Bansal. From those sources it appears that at the meeting:

(a) Mr Bansal said the financial statements for FY2012 would show a considerable loss (about $85,000);

(b) mention was made of $307,545 having been paid in 'extra' directors' payments over that year;

(c) Mr Blythe had stressed his view that payments to directors should reflect the position held and work being carried out by the director;

(d) some discussion concerned the ANZ overdraft and the security the bank required, with some debate as to whether the time was appropriate to seek an overdraft given the company's financial position;

(e) Mr Blythe presented his AFT Order book and cash flow forecast spreadsheets, first emailed on 19 December:[97] Mr Bansal commented in evidence that it was the first time that Mr Blythe had been pessimistic about the company's outlook;[98]

(f) Mr Blythe sought to give an explanation of why his outlook was so negative, by reference to various projects, but both Mr Bansal and Mrs Thompson questioned his conclusions;

(g) Mr Bansal said he 'formed a view about it' and told Mr Blythe his view: although Mr Bansal did not say directly what he had said, Mrs Thompson's evidence was that Mr Bansal had accused Mr Blythe of just looking after his own interests;[99]

(h) Mr Bansal also said, however, that he understood Mr Blythe's frustration because Mrs Thompson would not make a counteroffer regarding the sale of shares in the company; and

(i) the meeting became quite heated and ended abruptly.

116 In the following days there were further emails about the Western Australian office and Mr Wilson's position, the ANZ overdraft, some further information about the EfR opportunity, the company's insurance cover and the possibility of paying premiums monthly to help with cash flow. Curiously, when Mr Blythe sent Mrs Thompson a message about attending a meeting with Mr Sheather regarding the EfR opportunity, Mrs Thompson needed to ask if it was anything to do with the Victorian Regional Development Tender.[100] This program self-evidently represented a potential opportunity of real significance to AFT at some time in the future. Mrs Thompson had been provided with the publication by the government in November and Brookfield's submission in December. Mr Blythe had sent her some brief updates on progress since. She admitted that when she received the invitation for expressions of interest the previous year she had not gone through it 'in great detail', although said she was familiar with the tender timetable.[101]

117 On 11 February 2013 Harwood Andrews sent a further letter to McKean Park about the meeting of 4 February noting that no resolution had been reached.[102] Noting the financial position of the company, and that cash flow projections put in doubt the company's ability to trade as an ongoing concern, they stated that Mr Blythe considered:

..that the only responsible course of action is for the company to be wound up on the basis of a creditors voluntary liquidation. If Mrs Thompson considers that the company has some future, then an alternative and appropriate course of action would be for our respective clients to agree to the appointment of an administrator under section 436A of the Corporations Act 2001 (Cth). The appointment of an administrator will allow an independent assessment of the potential value of the company noting our respective clients widely differing views on this question.

118 Mr Blythe appears to have been suffering some ill health through this period. He had had to cancel some meetings in December due to migraines and, again, in mid-February had apologised to Mrs Thompson for having to reschedule a meeting because he felt he was in 'no state to be in the office'.[103] One of the things he told Mrs Thompson that he wanted to do after leaving the company was to take time off 'due to his health'.[104] It was never suggested that there was any insincerity about these statements.

119 On 12 February Mrs Thompson sent Mr Blythe a lengthy email.[105] In it she:

(a) bluntly disagreed with Mr Blythe about some information he had obtained on insurance, saying 'Your source was incorrect';

(b) listed her reasons why his view about putting the company into administration was premature, and challenged his views and work on a range of subjects including issues of technical detail, for example: service and maintenance agreements in South Australia; a solution for the Western Australian operation; his negative outlook on AFT's future; and payment of monthly fees to the directors in the absence of new sales;

(c) queried his decision to allow Mr Wilson 10 days compassionate leave (he was suffering depression);

(d) queried the whereabouts of a 'T Drive' with information pertaining to vehicle conversion information; and

(e) queried whether Mr Blythe was going to ask Tas Gas if it still wanted to buy the Altona station (a move she had previously resisted).

120 Mr Blythe answered some of her points, saying they could work through them at a meeting they had scheduled together the following morning, the 14th. He concluded by saying he was doing all he could regarding AFT's financial position but emphasised that he continued to hold 'real concerns'.

121 Taking the wider view, however, while Mr Blythe was focused on trying to resolve what he saw as a fundamental crisis at the centre of the company's management, Mrs Thompson was steadfastly avoiding doing so and persisting with the belief that they could work things out together. Nevertheless, her communications were becoming increasingly strident and accusatory: somewhat inconsistently with the premise that all was manageable between them.

122 Mrs Thompson again made a lengthy typed note of the meeting of 14 February 2013 between herself and Mr Blythe.[106] Her notes reveal that, together, they worked through a significant number of issues. Using her headings, they canvassed the following: WA Branch, R&D claim, insurance policies, tenders (Tas Gas/Brookfield), ACT refuse tender, Altona, KwangShin (their compressor supplier), Holden, One Steel, SA compressors, EDL trucks, forklift orders, order book, Mr Blythe's forecast revenues and director payments, black electric invoices, Visas (i.e. personal expenses), and accounts to be paid/already paid. It is clear from the notes that Mr Blythe provided a significant amount of information about the status of the different projects, forecast revenues and costs, and that Mrs Thompson took the trouble to record it all at a significant level of detail.

123 While there were disagreements on certain lesser matters, one of real significance was over the level of remuneration to be paid to each of them. This issue had been festering since almost the beginning of their joint directorships in 2011. In some respects it went to the heart of their differing views about the contribution they each made to the business. Seen that way, disagreement upon this topic reflected a serious imbalance in their relationship regardless of who was right or wrong about it. Mrs Thompson's note records the discussion in these terms:

Director payments - it was agreed that these will cease as at 31st January, 2013. Sean advised consideration should be now given to salary packages - Lorraine up to $2,000.00 a month and $5,000.00 as a Director - Sean did not elaborate as to what he considered be was worth as CEO. Sean tried to claim every conversion was due to him - Lorraine disagreed.

124 Mrs Thompson said they ended the meeting with a plan to meet again the following Monday, 18 February. However, just after noon on the 18th Mr Blythe sent her his letter of resignation instead:[107]

Dear Lorraine,

It is with regret that I am resigning immediately as Director of Advanced Fuels Technology Pty Ltd and am ceasing provision of services as Chief Executive of Advanced Fuels Technology Pty Ltd.

I will maintain my shareholding in the business and will forward to you an invoice for my outstanding Director fees (1/2 December and January - $7150 + $14,300 = $21,450 inc GST).

Our on-going inability to reach agreement in regards to the direction of the business & shareholding, the financial position and no ability for me to earn a reasonable Chief Executive salary has left me no choice but to take this approach. In my view, it is the only prudent approach I can take whilst giving due regard to both my Director obligations, my health and my need to earn a living.

I am willing to meet on this Wednesday 20th in the afternoon & Thursday 21st at AFT Tullamarine to assist in an orderly transition and return the AFT laptop, credit card, phone & key etc. (If needed I can also meet next Wednesday 27th Feb as well).

125 Mrs Thompson wrote expressing surprise and disappointment that what had occurred over the last five months had led to that result. She followed up with a further email asking that in addition to the items he offered to return that he also return all 'AFT file and documentation' currently held at his home.[108] It was soon followed by a letter from her solicitors reminding Mr Blythe of his obligations under ss 182 and 183 of the CA not to use information to gain an advantage for himself or cause detriment to the company.[109]

126 On 19 February 2013 Mr Blythe took his ASUS laptop to Moe's Computers where certain work was performed. Expert evidence was given about this topic. Mr Mouhamad Mourad, the proprietor of the business also gave evidence. I will return to it in due course.

127 On 20 February 2013 Mr Blythe attended the AFT office at Tullamarine. Mrs Thompson and Mr Donatucci were present. He dropped off the ASUS laptop and other items. He opened the computer and showed Mr Donatucci where to find details about particular vehicle conversions Mr Donatucci wanted to know about. Pleasantries were exchanged and Mr Blythe left.

128 Mr Wilson became an employee of AFT on 30 July 2005 and branch manager of AFT operations in Western Australia on 1 November 2012. He had technical expertise, particularly in refuelling and compressor stations. His wage was $56,000 per year and $2,159 per fortnight as at July 2012. The work in Western Australia had decreased considerably. On 22 March 2013, Mr Wilson gave AFT four weeks' notice of his resignation and ceased employment on 29 April 2013. AFT closed its Western Australia branch once Mr Wilson left, as there was no one to take his place. Although Stewart and Malcolm Thompson were working at AFT they did not have the same technical expertise as Mr Wilson in compressor stations. To some extent, however, Mr Donatucci and then Mr Hartley later filled that void.

129 Mr Wilson had a list of personal and business contacts he stored on his work-supplied computer and work-supplied mobile phone. Upon resigning from AFT he returned his computer and his mobile phone. He erased the data from the mobile phone first.

130 On 6 May 2013, Mr Wilson became an employee/consultant to NGV.

Nature of employment and duties owed (Blythe and Wilson)

131 At the trial, considerable attention was given to whether Mr Blythe, a director of AFT, was also an employee or a consultant. Attention was also given to whether Mr Wilson, an employee of the company, owed it the duties of a fiduciary.

132 As a director and Chief Executive Officer of AFT, Mr Blythe unquestionably owed fiduciary duties to the company and was also subject to the duties prescribed in ss 181, 182 and 183 of the CA. There seems little point in resolving the debate over whether his services were supplied as consultant or as employee. I will not discuss that matter further.

133 However, I do not think that the evidence establishes that Mr Wilson had the attributes of someone in senior management or a sufficiently senior role at AFT to justify characterising him as a fiduciary to the company. The evidence reveals he had valuable technical skills that the company depended upon, but that of itself did not make him a fiduciary. It was something of an overstatement to characterise him as the 'manager' of the Western Australian office when that office consisted only of himself and maybe one other person. There is no evidence of him having possessed any discretionary power to bind the company to business or to decisions he made. His salary was consistent with that of an employee with quite a functional role. When Malcom Thompson was later considering substitute means of maintaining a person to service existing customers in Western Australia once Mr Wilson left, the proposed solution was simply to engage a contractor from a labour-hire company.[110] And Mr Wilson's email to Malcom Thompson of 7 June 2011 about pay conditions and other reimbursements, and Malcom Thompson's reply, was not indicative of an employee with any significant managerial powers or entitlements.

134 Next there arises the question whether Mr Wilson was subject to the CA duties in the capacity of an 'officer' of the company so as to be subject to s 181, the obligation of good faith. Section 9 of the CA defines an officer by reference to various indicia, including someone who participates in making decisions that affect the whole, or a substantial part of the business of the company. In my view the evidence does not show that Mr Wilson had such a role. Nor was he a person who had capacity to significantly affect the company's financial standing: merely performing his role as a technician, as valuable as that may be, does not connote the requisite capacity. Nor was there evidence that the directors of AFT (Mr Blythe and Mrs Thompson) were accustomed to act in accordance with his directions or wishes. In my view, Mr Wilson was not an officer.

135 Nonetheless as an 'employee' of AFT, Mr Wilson was subject to the duties in s 182 (use of position) and s 183 (use of information) of the CA.

Retention or misuse of confidential information (Blythe and Wilson)

136 AFT's allegations concerning the wrongful use and retention of its property by both Mr Blythe and Mr Wilson can be divided into three broad categories:

(a) computers used by Mr Blythe in the course of his work for AFT, and the information stored on them;

(b) particular documents allegedly uploaded by Mr Wilson onto a SkyDrive; and

(c) contact details kept on mobile phones and devices used by Mr Blythe and Mr Wilson.

137 Two computers were the focus of pleadings and evidence. Both were computers allegedly used by Mr Blythe. One was said to be a large, silvery-grey computer which Mr Blythe allegedly used but did not return to AFT; the other was an ASUS laptop which Mr Blythe did return to AFT. By its pleading, AFT alleges that Mr Blythe retained a computer which he had used in the conduct of the business of AFT, together with confidential information and documents stored on it. But by its evidence, as opposed to its pleadings, AFT gives greater focus to the ASUS laptop which it alleges was returned only after files had been removed from it. By not returning one and interfering with the other, AFT alleges that Mr Blythe retained AFT documents.

138 Examples of documents allegedly so retained are: copies of agreements made with suppliers, including a distribution agreement with KwangShin; a distribution agreement evidenced by a certificate from Coltri;[111] copies of quotations and documents evidencing negotiations with customers; and reports of, or commissioned by, AFT. Specific instances given of the last two categories are a document titled 'Natural Gas Refuelling Mechanical Compliance Statement' dated 20 April 2011 ('NG compliance statement'),[112] a certificate of registration of plant design number V1201380 ('plant registration certificate'),[113] an email from Mr Blythe dated 11 December 2012 attaching a request for information from AGL[114] and a quotation from AFT to CCA. It is also alleged that Mr Blythe retained promotional information relating to business opportunities for Simplot and a Metro Bus proposal. Of those documents, only the Coltri certificate, the NG compliance statement and the plant registration certificate are in evidence.

139 The NG compliance statement and the plant registration certificate were mentioned in a due diligence report prepared in relation to the 'AGL Energy opportunity', described further below.[115] In the particulars of his defence[116] Mr Wilson listed those documents as being among documents he had uploaded to a SkyDrive[117] in May 2013 but then deleted in November 2013. Mr Wilson's list also included numerous documents associated with KwangShin equipment, although nothing matching the description of a distribution agreement. No evidence was given about any particular use of the Coltri certificate or in whose possession it was found.

140 To the extent that any inference is to be drawn that Mr Blythe retained AFT documents from a computer because certain documents have turned up subsequently in connection with businesses in which he has been involved since leaving AFT, the evidence to justify such an inference is ambiguous or incomplete. It was never established where any of these documents were likely to have been stored. Indeed the evidence refers to a number of different computers maintained by different employees of AFT. For example, there is evidence of laptops in the possession of at least Mr Blythe, Mr Wilson and Mr Donatucci, all storing documents generated for the AFT business.[118] There is no evidence that Mr Blythe was personally implicated in the uploading of the documents to the SkyDrive.

141 The pleaded allegations focus upon a computer allegedly used by Mr Blythe in the conduct of AFT's business but not returned by him to AFT. There is no dispute that Mr Blythe did return one computer to AFT: namely, an ASUS laptop which was physically tendered in evidence as exhibit A. That laptop was the subject of expert evidence by Mr Stephen White, which I will come to shortly. Mrs Thompson gave evidence that on Wednesday 20 February 2013, two days after Mr Blythe announced his resignation from the company, Mr Blythe attended at AFT and handed over the ASUS computer to her. I have already described him opening the computer in the presence of Mrs Thompson and Mr Paul Donatucci.

142 But Mr Stewart Thompson gave evidence that he observed Mr Blythe often use a different computer to the one that he returned to AFT on 20 February. He described it as larger style, and silvery-grey, not the type he (Stewart Thompson) would be carrying around, emphasising 'that's for sure'.[119] It was not made clear whether he was referring to a desktop computer or a laptop, but I assume he meant a larger and heavier laptop. He also said he had examined the ASUS laptop that Mr Blythe had returned. Apart from saying there were no emails, he appeared to say that only five AFT files were on it.[120] That evidence did not accord with what the forensic expert, Mr White, found when he examined it. Malcom Thompson agreed that AFT would probably have kept records of any computers it purchased for the business, but none are in evidence to verify that another computer was provided to Mr Blythe for AFT use.

143 Although Stewart Thompson was present at the AFT Garden Street premises from time to time, he was not a regular presence there, his principal workplace being at the Freight Road premises. His evidence about Mr Blythe using a different computer to the ASUS laptop is not corroborated by any other person, and yet others must also have seen Mr Blythe working at closer quarters. So, whilst I accept that Malcom Thompson saw Mr Blythe using a computer that he believed was different to the ASUS laptop that became Exhibit A, on the whole of the evidence I am not satisfied that was the case.

144 Malcom Thompson gave evidence of his search for records, both hard copies and digital records, after Mr Blythe departed the company. He spoke of the attempt to reconstruct dealings that AFT had had with various customers because of the inability to find any records of what had transpired. He also examined the ASUS laptop. He said he found surprisingly few emails on it. He found files relating to AFT, but did not give any particular evidence about what they were or what he thought was lacking from them. He focused mainly on the absence of the emails he had expected to find.

145 Part of the difficulty with the evidence is that it is unclear whether or not AFT ever maintained a good system of record keeping. My impression is that it did not. For example, Mr Blythe had explained to Mrs Thompson when they were discussing a possible valuation of the business that there were few written contracts with customers because most of their dealings were 'relationship-based'. Malcom Thompson found some hard copy files in Mr Blythe's office, but thought there were 'holes' or items missing.

146 Overall it is difficult to assess the extent to which anything is missing because it is impossible to know what should be there. Malcom Thompson gave one specific example of the company not having a copy of any signed agreement with Toll, either in hard copy or electronic form, so that AFT had to obtain one (that did exist) from the customer itself. But whether its absence was because Mr Blythe took and retained it or because AFT never kept a copy is impossible to say.

147 Given the evidence that numerous digital folders of AFT documents were found on the computers of Mr Blythe, Mr Wilson and Mr Donatucci,[121] and the lack of clear evidence of the nature of AFT's business record keeping practices before Mr Blythe left, I am unable to infer from the apparent difficulty in later tracking down certain invoices, agreements, quotations and the like, that Mr Blythe must have taken and retained them. But, as we will see from the topic of the SkyDrive (below) there is no doubt that certain documents must have been retained, at least by Mr Wilson.

148 Unlike the pleadings, the evidence about computers chiefly focuses on the ASUS laptop: that is, what was done to it before it was handed back and what was or was not found on it when examined by Mr White.

149 The evidence establishes that between Monday 18 February, the date of Mr Blythe's resignation, and Wednesday the 20th, the date when he returned the ASUS laptop to AFT, Mr Blythe took the computer to Moe's Computers, a business conducted by Mouhamed Mourad. Mr Mourad gave evidence. I am satisfied that what occurred was this:

(a) on the 18th or 19th Mr Blythe took the ASUS laptop to Mr Mourad stating that it was running slowly, he thought it might have a virus, and that he wanted Mr Mourad to 'do a service on the laptop'; that is, to back up all files onto an external drive, clean and service the computer and then return all files onto the laptop other than files personal to Mr Blythe;

(b) Mr Blythe and other employees of AFT had taken AFT computers to Mr Mourad for service on a number of previous occasions;

(c) Mr Mourad and Mr Blythe identified those files on the laptop which were personal to Mr Blythe and isolated them from the other files in the 'user folders' on the laptop by 'cutting and pasting' them into a separate folder;

(d) Mr Mourad transferred the folder of personal files and the folder of remaining user files onto an external hard drive supplied by Mr Blythe;

(e) Mr Mourad erased all data from the computer and reinstalled the Windows operating system and relevant software packages;

(f) Mr Mourad restored the original files, but not the personal files belonging to Mr Blythe, from the external hard drive to the 'user folders' of the now clean laptop; and

(g) the steps in (d), (e) and (f) took place in Mr Blythe's absence over quite a number of hours after which, on 20 February, Mr Blythe collected the laptop and the external drive and took them with him.

150 One of the complaints made by AFT is that the returned ASUS laptop did not contain Mr Blythe's Outlook emails (or many of them). Mr Mourad's evidence was that the email files were backed up and restored onto the computer.

151 The evidence of Mr White in substance verifies most of what Mr Mourad said had taken place. That is, on his inspection in about October 2013, Mr White found evidence in the registry of the ASUS laptop which verified that on 20 February 2013 a large number of files (listed in exhibit SWW3[122]) were 'created' in the user folders of the computer. Looking at the list of the files that he found, one can see from the names of the files or from their file paths that they generally concern customer or supplier information for the AFT business. I have no basis to conclude that the document files found on the ASUS laptop returned to AFT were anything less than all of the files that should have been on it.

152 Mr White's evidence was that he only found a few email files and that he could not recover or open them. Mr White identified a number of potential devices recorded in the computer's registry that were potential candidates for the device used as the back-up drive. The one he favoured as most likely was called a Seagate drive.

153 Ultimately, the evidence about the email files found on the computer is inconclusive. It does not allow me to make any inferences of deliberate destruction or removal on the part of Mr Blythe, if indeed the emails were lacking at all. Perhaps they had not properly been removed or restored by Mr Mourad. There is curious evidence of the creation of a substantial Microsoft Outlook storage file on 11 April 2013, after Mr Blythe had left the company and while the computer was in the possession of AFT. Unfortunately that evidence only appears to muddy the waters.

154 One question which neither party asked Mr Mourad was precisely how the user files were transferred back from the external hard drive onto the ASUS laptop in the restoring phase. As Mr Mourad explained, there are two ways that files can be transferred from a source disk to a destination disk or folder. One is to 'copy and paste', which leaves a replica of the files on the source disk as well as transferring the files to the destination. The other is to 'cut and paste', which does not leave any replica of the files on the source disk. In this case the evidence leaves both possibilities equally likely. That is, on the evidence as it stands, there is no greater probability that the AFT files were left on the external drive than that they were not left on that drive. The drive itself is not in evidence.[123]

155 In this context, the fact that Mr Blythe chose not to give any evidence in this case is arguably of some importance. Mr Blythe was present in the courtroom during AFT's evidence and was clearly available to give evidence himself had he wished to do so. His failure to give evidence was not explained, other than because he took the option, as he was entitled to do, of not giving any evidence himself and leaving the plaintiff to its proofs on the claim it had mounted. In those circumstances, AFT argues that the principles in Jones v Dunkel[124] allow me to infer that the evidence of Mr Blythe would not have assisted him on the question of whether he retained custody of the AFT files that were removed from the ASUS laptop in the backup and restoring process. The question is whether drawing that inference would enable me to conclude on the balance of probabilities that Mr Blythe did retain a copy of the AFT files on an external hard drive which he took with him and never returned to AFT.

156 In Jones v Dunkel the central issue was whether the death of the plaintiff's husband had been caused by the negligence of a driver whose truck came into collision with the deceased's truck. In effect, the question was whether the head-on collision occurred on the defendant's side of the road (in which case he would not have been negligent) or on the opposite side of the centre line (in which case he was negligent). The defendant driver had not given evidence at the trial and the jury had returned a verdict of no negligence. On the question of whether the trial judge adequately directed the jury about the defendant not giving evidence, the three members of the High Court who constituted the majority each pointedly found that there was some evidence from which the jury could infer that the collision had occurred on the deceased's side of the white line and, therefore, that the defendant had been negligent. Those findings were important. They were important because of the distinction between an inference that can help to reach a finding that is already open on the evidence and one that is sought to be used to resolve pure conjecture.

157 In his judgment, Menzies J (among the majority) began with the basic proposition of what is required to establish a fact on the balance of probabilities. His Honour cited Lord Robson in Richard Evans & Co Ltd v Astley (1911) AC 674 at 687 saying:

[The circumstances] must do more than give rise to conflicting inferences of equal degree of probability so that the choice between them is mere matter of conjecture...All that is necessary is that according to the course of common experience the more probable inference from the circumstances that sufficiently appear by evidence or admission, left unexplained, should be that the injury arose from the defendant's negligence. By more probable is meant no more than that upon a balance of probability such an inference might reasonably be considered to have some greater degree of likelihood

158 Turning then to what inference may be drawn if a defendant chooses not give evidence, Menzies J espoused three principles:

• such absence cannot be used to make up any deficiency in the evidence;
• but evidence which might have been contradicted by the defendant can be accepted the more readily; and
• where an inference is open from the facts proved by direct evidence and the question is whether it should be drawn, the fact that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference.[125]

159 Unlike the facts in Jones v Dunkel, in this case there is nothing to separate the conflicting inferences of equal degree of probability as to whether the AFT documents were or were not left on the hard drive in Mr Blythe's possession. Favouring one inference over the other would be pure conjecture. So any inference that Mr Blythe's evidence would not have assisted his case cannot allow me to 'more readily draw' an already open inference in favour of AFT. Even if the knowledge that Mr Wilson uploaded some AFT documents to a SkyDrive soon after he left AFT[126] could displace the equal degree of probability of conflicting inferences as to whether Mr Blythe retained documents from the ASUS laptop, I still would not be prepared to use a Jones v Dunkel inference to conclude that he did so. There are plausible explanations for the source of those documents other than them having come from Mr Blythe.

160 In conclusion, I am not satisfied that Mr Blythe retained business files of AFT stored on the ASUS laptop or that he maintained a second laptop computer (of AFT's or his own) on which he stored and retained AFT business files.

161 AFT allege that after Mr Wilson left AFT he wrongfully retained property and documents and used confidential and other information of AFT. Mr Wilson admits that in May 2013 he set up a SkyDrive account on which to store documents relevant to a proposal that he work with AGL on the rollout of CNG refuelling stations across Australia. He asserts that the SkyDrive account permitted AGL to access documents without him sending them by email.[127] In further and better particulars of his defence[128] Mr Wilson alleges that he deleted all of the documents in the SkyDrive (apparently on 10 November 2013) and has retained none of them in either hard copy or electronic form since.

162 Among the documents Mr Wilson lists as having been on the SkyDrive were the NG compliance statement and the plant registration certificate. In addition, there are many documents with the word 'KwangShin' appearing in the title. Many appear to be drawings or photographs. Some are test reports. Broadly speaking, from their titles they could be described generically as technical documents. There is no evidence as to the provenance of those technical documents: that is, there is nothing to say whether they were documents supplied by KwangShin to AFT for use in installations or maintenance of KwangShin equipment, or whether they (or some of them) were documents produced by AFT employees for some particular job relating to KwangShin equipment.

163 AFT relies on two documents as tending to prove that at least some documents uploaded to the SkyDrive, which emanated from AFT, were actually used by one or more of the defendants for their own business purposes. The first is the due diligence document prepared by Hien Ly in respect of the AGL opportunity[129] in which Mr Ly refers to a wide range of documents having been made available to him by NGV, including the NG compliance statement and the plant registration certificate.

164 The second document is an email dated 15 October 2013.[130] In that email Mr Blythe's brother-in-law, Brett Jarman, sent a question to Mr O'Leary and Mr Wilson asking, 'Do you know which of the documents in this folder Sean would be referring to as the KwangShin Manual?' Mr Jarman identified the 'folder' as being accessible via an internet protocol address that included the words 'SkyDrive.live.com'. I infer that folder is the SkyDrive account to which Mr Wilson first uploaded documents in May 2013. The email was copied to Mr Blythe via an email account '@ngvgroup.com.au'. I infer that Mr Jarman had been told by Mr Blythe that a KwangShin Manual existed somewhere among the documents available to NGV.

165 The inference that AFT wishes me to draw from that email is that a manual was obtained by Mr Blythe or Mr Wilson while at AFT, retained, and later used in connection with the business of NGV. But there is no evidence of any KwangShin Manual being stored on any AFT computer, uploaded to the SkyDrive or used in respect of any particular application. In the circumstances described below, I am unable to conclude that the manual, assuming it existed, must (as a matter of probability) have been sourced from AFT.

166 KwangShin is a Korean manufacturer of compressors for the CNG market. AFT had had a relationship with it for many years, at least going back to 2006.[131] AFT had attempted to partner with KwangShin in a tender for supplying refuelling stations for buses in Sydney.[132] Through Mr Blythe, AFT also sought to make KwangShin a partner (as supplier) in AFT's overtures to Brookfield for a wider business collaboration. In AFT's first response to the government's EfR invitation to the market, AFT described itself as the Australian distributor for KwangShin compressors.[133] Later, when the response to the EfR program was put together in early December 2012, reference was made to AFT having partnered with KwangShin Compressor Company from Korea on a number of occasions, such that the combined knowledge and experience of Brookfield, AFT and KwangShin was advanced as a basis for confidence in their ability to deliver the virtual pipeline projects required for the EfR program.[134] As at 13 February 2013 KwangShin was a significant creditor of AFT, with at least one outstanding invoice for approximately $75,000.[135]

167 Arising from his dealings with KwangShin whilst at AFT, Mr Blythe appears to have had a long-standing and strong business relationship with certain KwangShin personnel, include its sales manager, JT Ahn. For that reason I am satisfied that Mr Blythe would have known how to contact Mr Ahn whether he kept contact data from his time at AFT or not.

168 It will also be recalled that one of the documents AFT alleges Mr Blythe wrongly retained was a KwangShin distribution agreement. Among the directories found on the ASUS laptop after its return to AFT was one labelled as holding a KwangShin 'distributor agreement'.[136] There is no evidence that the directory did not contain such an agreement. On the face of it, therefore, a copy of a KwangShin distribution agreement was returned to AFT with the ASUS laptop. Because I am unable to find that Mr Blythe kept a copy of the AFT files from that computer, I cannot conclude that he retained a copy of the distribution agreement as AFT alleges.

169 On 31 May 2013, Malcolm Thompson emailed Mr Ahn at KwangShin asking for a copy of the KwangShin logo so that AFT could put it on its website. Interestingly, Mr Ahn emailed Mr Blythe (then at NGV), seemingly in the context of a communication about a present engineering issue, also asking whether there was any reason for him to decline Malcom Thompson's request. Mr Blythe replied that he saw no problem, saying 'It's more advertising for KwangShin in Australia'.[137]

170 In February 2016 Mrs Thompson emailed Mr Ahn querying the existence of an exclusive distribution agreement between AFT and KwangShin. Mr Ahn responded saying there was a signed agreement, but it was not exclusive. He said KwangShin rarely made any exclusive contracts outside of special situations.[138] A point to be inferred from these exchanges is that there was no exclusive relationship between AFT and KwangShin within Australia as AFT suggests.

(a) the evidence establishes that Mr Wilson uploaded at least two documents to a SkyDrive that clearly came from AFT: that is, the NG compliance statement and the plant registration certificate;

(b) a number of other photographs and technical drawings pertaining to KwangShin products were uploaded to the SkyDrive which, I infer, likely emanated from Mr Wilson's employment with AFT, given that they were uploaded as early as May 2013, shortly after his departure on 26 April 2013, and that AFT would have had past reason to obtain and use KwangShin technical documents;

(c) it is not possible to say whether the 'KwangShin' documents on the SkyDrive were produced by KwangShin and, if so, were generally available from KwangShin to all of its distributors, or whether they were created by AFT itself or some combination of the two;

(d) it is clear that Mr Blythe and Mr Wilson had a long-standing professional and technical relationship with KwangShin Compressors and would have had ready means of communicating with it and its personnel, independently of any information retained from AFT;

(e) AFT did not enjoy an exclusive commercial relationship with KwangShin in Australia;

(f) from at least the end of May 2013 Mr Blythe was dealing directly with Mr Ahn at KwangShin in connection with NGV business; and

(g) although there was a query about a KwangShin manual thought to be available on the SkyDrive in connection with the opportunity NGV was pursuing, no such manual is in evidence and if it existed it is not possible to infer, as at October 2013, that such a manual would probably have emanated from AFT and not elsewhere.

172 AFT alleges that although Mr Blythe and Mr Wilson returned their mobile phones upon ceasing to work for AFT, in each case they had both removed all contact data from their mobile phone. Mr Blythe admits arranging to remove some contacts and data from the mobile phone before returning it to AFT, but alleges the contacts and data were of a personal nature and not related to AFT's business. Mr Wilson similarly admits that upon leaving the employment of AFT he deleted the information on the mobile phone that was provided to him, but alleges that the same emails and contact details were also to be found in the Outlook files on the laptop he returned to the company.

173 The evidence establishes that on 15 April 2013 Mr Wilson sent emails from his AFT email address to his private Gmail account containing what appear to be hundreds of 'contact' files stored on a computer. Four emails were sent between 11.33 am and 11.38 am on that day, headed 'Contacts',[139] 'Contacts 2',[140] 'Contacts 3'[141] and 'Contacts 4'.[142] There does not appear to be any evidence that the laptop which Mr Wilson returned to AFT did not contain all of the contact data loaded onto it. As previously mentioned, in relation to Mr Blythe's ASUS laptop, Mr Mourad believes he reloaded all the Outlook email files. Whether or not that was supposed to include contact details, I am not sure. The evidence does not seem to deal with that point.

174 The contact information that Mr Wilson emailed to himself comprised a combination of personal and business contacts. That is, the mobile phone and computer appears to have been used by him for both personal and business purposes. Certainly there are contacts which relate to AFT customers and suppliers, including KwangShin, Coltri, Clean Air Power, Tas Gas and ATCO. Samples of such contacts were admitted into evidence. However, a perusal of the list of contacts shows contacts such as 'dad', 'home', 'farm, Uncle Neil', 'Greenwood Pizza', 'high school, Carine', etcetera. There are many other names appearing in the list of contacts whose identities or provenance is not explained in the evidence. They are likely to consist of a mixture of both business and personal contacts.

175 There does not seem to be anything sinister, ill-motivated or improper for an employee who has used a work-supplied mobile phone for both personal and business purposes to wipe its contents before returning it to his or her employer. Apart from contact data, such devices typically store text messages - and perhaps other social media data - that is personal to the user. Erasing contact data may have a different complexion if the employee knows that the device is the only repository of contact details for the employer's business, but that does not seem to be the case here. Mr Wilson also returned the computer which, it appears, contained the same contact data that was stored on his telephone device. Although he also forwarded that same data to himself - a matter I will come to in a moment - he at least did not preclude his employer from having access to it. However insofar as the contact data contained the contact details of persons with whom Mr Wilson had dealt with whilst an employee of AFT's business, and for the purpose of AFT's business, it is obviously information which he acquired as an AFT employee and in the course of his employment with AFT.

176 The question is, therefore, what is to be made of Mr Wilson sending to himself the mixed collection of personal and business contacts which comprised the contact data on his computer?

177 AFT relies upon the evidence which I have described above essentially for three purposes:

(a) to show that Mr Wilson and Mr Blythe retained valuable data, acquired whilst employees of AFT, with which to contact persons in the natural gas industry capable of providing an advantage to them in pursuing business within the industry once they had left AFT;

(b) allied with other evidence, to show that Mr Blythe and Mr Wilson were furtively setting themselves up to compete with AFT and to allow inferences to be drawn that they had begun doing so before resigning; and

(c) to show that Mr Blythe and Mr Wilson harmed AFT by depriving it of valuable client contact information.

178 A primary question is whether the particular list of contacts possesses the necessary quality of confidence to preclude Mr Wilson retaining it.[143] Accepting that in some cases a customer list may be confidential (assuming that contact data might be likened to such a list), to answer the question in any particular case requires a consideration of the circumstances of its development and treatment.[144] Some of the factors relevant in determining whether information may be considered confidential were set out in the case of Del Casale & Ors v Artedomus (Aust) Pty Ltd:[145]

In Wright v Gasweld, at 334, Kirby P listed some factors that helped in determining whether information may be considered confidential. That list has been expanded by R Dean, _The Law of Trade Secrets and Personal Secret_s, (2002) 2nd ed, at 190 to include:

1. The extent to which the information is known outside the business.

2. The extent to which the trade secret was known by employees and others involved in the plaintiff's business.

3. The extent of measures taken to guard the secrecy of the information.

4. The value of the information to the plaintiffs and their competitors.

5. The amount of effort or money expended by the plaintiffs in developing the information.

6. The ease or difficulty with which the information could be properly acquired or duplicated by others.

7. Whether it was plainly made known to the employee that the material was by the employer as confidential.

8. The fact that the usages and practices of the industry support the assertions of confidentiality.

9. The fact that the employee has been permitted to share the information only by reason of his or her seniority or high responsibility.

10. That the owner believes these things to be true and that belief is reasonable.

11. The greater the extent to which the "confidential" material is habitually handled by an employee, the greater the obligation of the confidentiality imposed.

12. That the information can be readily identified.

179 It is true the contacts were acquired during service at AFT, but in my view applying the factors above the contact data does not amount to 'confidential information': that is to say, it is not information subject to any duty of confidence. The contact data simply comprises the names, email addresses and telephone numbers of persons outside of the AFT organisation -- some relevant to its business, some irrelevant to its business. The list included information available through public sources and was intermixed with personal contacts. There is no evidence Mr Wilson was instructed to guard or preserve any secrecy surrounding the list of people with whom he dealt while working at AFT. The contact details for those people, I infer, could be readily acquired or duplicated by others. The information does not have the character of a trade secret.[146] In short, although some attributes of this contact data and the manner of its creation may point to it having the character of confidential information, on balance it seems to me that it lacks that quality.

180 In any event, it is unlikely that Mr Blythe and Mr Wilson would have been unable to remember and contact most if not all of the customers and suppliers with whom they dealt whilst at AFT, even without the contact details. That said, having the contact details may have provided an easier or quicker means of reaching those people than had they not kept those details. In the end, there is no evidence of them having actually made use of the data.

181 I am not persuaded that AFT was deprived of the ability to communicate with its customers and suppliers simply because Mr Wilson also retained a copy of the contact data. AFT seemed to have the same list that Mr Wilson emailed to himself: that is, even if the contact list itself was not still on the computer which Mr Wilson returned to AFT (which was not said), AFT at least had the source email from which he sent to himself the list.

182 For these reasons, I am not satisfied that the contact data on Mr Wilson's mobile phone and computer was information that was confidential to AFT. Nor am I satisfied that Mr Wilson breached any duty he owed to AFT or contravened a provision of the CA by erasing the contact data from his mobile phone, retaining a copy of it or using it after his resignation from AFT.

183 Having canvassed the evidence concerning the alleged wrongfully retained information, it is now necessary to examine the evidence in relation to each of the eight businesses. AFT alleges each was either an ongoing customer or a maturing business opportunity which the defendants wrongfully usurped, or were involved in usurping, in some cases by improperly using information obtained from AFT. In my view, the most advantageous approach to the task is first to examine the evidence in relation to each alleged business opportunity - standing alone - and make relevant factual findings in relation to it, and then to assess the lawfulness of each of the defendants' conduct in respect of each opportunity having regard to the evidence as a whole.

184 On 28 November 2012 Mr Blythe quoted for some new work with ATCO,[147] a business that apparently constructed temporary buildings to supply to mining sites. ATCO had a small forklift fleet and required a forklift refuelling facility. Mr Blythe's quote was for a 'containerised' solution, that is, a refuelling station housed in a container and delivered on site. The quote was sent to Jeff Brown and Noel Reid at ATCO and copied to Mr Wilson at AFT. The container was to be delivered to ATCO at their business in Kwinana, Western Australia. It was to contain two compressors, a CNG storage pack, a filling post and associated equipment. The quotation was for $63,000 plus GST with a service fee charged on a monthly basis calculated at 15 cents per cubic metre of CNG throughput.

185 On the next day, 29 November 2012, Mr Wilson emailed Mr Brown and Mr Reid a revised quote after (according to the email) Mr Wilson had discussed the matter further with Mr Blythe. The new quote, said to be 'in the spirit of getting a new product to market', was to supply the same equipment at $54,000 plus GST. In the email Mr Wilson explained he had spoken to the supplier who had agreed to 'do a deal' to help get the first station under way.

186 On 30 November Mr Blythe wrote a further email to Mr Brown thanking him for the 'verbal order' which, evidently, had been placed through Mr Wilson. Mr Blythe requested Mr Brown to send an order.

187 There is no evidence that any order was placed. However, the status of the job appears to have been discussed between Mr Blythe and Mrs Thompson at their lengthy meeting on 14 February 2013, recorded in Mrs Thompson's long note.[148] Mrs Thompson asked Mr Blythe when ATCO's refuelling station was likely to start - indicating she clearly knew of it. Her notes reveal that Mr Blythe thought that the job might go ahead in June but that its status was unclear. He said he was going to follow up with ATCO and would expect an answer the following week (which, as events would turn out, was after he resigned). ATCO, it seems, had already paid some money - seemingly, at least the entire contract price - with which AFT had purchased some equipment. Mr Blythe thought that if ATCO did not proceed then it should not get any refund. Significantly, in the context of discussing the ATCO job, as well as a potential CAP distributorship (see below), Mr Blythe emphasised the importance of AFT maintaining its presence in Western Australia whereas Mrs Thompson preferred not to retain that office and to relocate Mr Wilson to Melbourne instead.

188 On 19 March 2013 (a month or so after Mr Blythe had resigned from AFT), Mr Brown sent an email addressed to Mr Wilson, copied to Mr Blythe (both to their respective AFT email accounts), asking whether 'the spirit of getting into the market' was still in place and the price for the filling station still firm. It may be inferred from that correspondence that Mr Brown had not placed the order the previous year despite it being reported that ATCO had paid AFT some money. It might also be inferred that Mr Brown believed that both Mr Blythe and Mr Wilson still worked for AFT. At that time, Mr Wilson still worked at AFT, but as stated above, Mr Blythe had already resigned.

189 Mrs Thompson received the email from Mr Brown, presumably because any email directed to Mr Blythe by then went through to her. She passed the email on to Malcom Thompson who rang Mr Wilson to discuss it. It was around this time, in fact on 21 March 2013, that Mr Wilson gave AFT four weeks' notice of his intended resignation.

190 At this time, if not before, Mrs Thompson decided to close the Perth office down. The lease on the Perth premises was up for renewal and so a decision was required. If not already decided, possibly the clinching factor for it was Mr Wilson's notice of resignation. For that reason, Malcom Thompson was to go to Western Australia to help 'pack up' AFT's Perth office. He organised to do so in the week of 9 April 2013 and arranged to see Mr Brown during that visit. Malcom Thompson said he spent the majority of that week with Mr Wilson who was serving out his notice period. Malcom Thompson and Mr Wilson worked through some costings to prepare a further quote for ATCO for the containerised refuelling station quoted the previous year. That costing, prepared on a spreadsheet,[149] totalled $59,100 without GST.

191 Malcom Thompson then met with Mr Brown, told him that AFT had underquoted in the November quotation and gave Mr Brown a revised quote for $60,500 plus GST. That quotation was confirmed in an email from Malcom Thompson to Mr Brown on 16 April 2013.[150] The email outlined the same monthly service fee that had been quoted in the November 2012 quotation (that is, 15 cents per cubic metre of CNG throughput).

192 According to Malcom Thompson, he had 'a few discussions' with Mr Brown throughout May and June 2013 about preparations that were required to be made at ATCO's site for the delivery. Presumably because he had not received confirmation of an order from ATCO, Malcom Thompson rang Mr Brown on 5 July 2013 to find out what was going on. Mr Brown told him that ATCO had placed its order with NGV. Mr Brown informed Malcom Thompson that NGV had offered to supply the refuelling station for $1,500 less than AFT's latest quote and that its service fee was 2 cents per cubic metre of CNG throughput cheaper than AFT's rate.[151] No document evidencing NGV's contract or quote was tendered in evidence.

193 In cross-examination, Malcom Thompson denied that the closure of AFT's Western Australian branch jeopardised its ability to conduct work there, although the accuracy of that answer appears to be doubtful. He stated that AFT could have maintained a labour-hire contractor in that state. He also said he was proposing to be the new contact person for AFT's Perth business. He was cross-examined about the number of staff that would be required in Perth and he said that if a second pair of hands was required (to supplement the contract worker), an additional person could be sent from Melbourne. He also agreed that despite AFT's costing for the job being $59,100, the quote actually supplied was for marginally more at $60,500.

194 AFT alleges that NGV wrongfully or improperly used the plant registration certificate in connection with its CNG installation at Kwinana.[152] But there is no evidence of the use of that document in connection with NGV obtaining ATCO's business.

195 From the above facts, AFT's argues I should conclude that Mr Wilson, Mr Blythe and, through them, NGV, impermissibly pursued a maturing business opportunity that belonged to AFT. It claims that on these facts it is established that NGV used information obtained by Mr Blythe whilst he was with AFT to win the ATCO business for NGV. Apart from the plant registration certificate (dealt with above), the information said to have been improperly used, having been obtained when and because Mr Blythe was a director and Mr Wilson an employee of AFT, is particularised as follows:

• the rates and details of the quotation provided by AFT to ATCO in November 2012;
• the revised quotation of 16 April 2013;
• AFT's overheads and profits margins underlying those quotations; and
• AFT's methodology and systems for providing the services to which the quotations responded.

196 The defendants contend there is no evidence that the earlier, under-valued quotation of November 2012 was used by them to secure the ATCO order, or that they ever saw the 16 April 2013 quotation. They say that all the evidence establishes is that NGV was awarded the contract because it provided a lower quotation than AFT did.

197 One unexplored aspect of the evidence was, as previously noted, that Mr Blythe evidently told Mrs Thompson on 14 February that ATCO had actually paid the whole contract price, or close to it, and that equipment had already been purchased. Curiously, no mention of that having occurred was made afterwards when Malcom Thompson followed up the job with Mr Brown or discussed matters with Mr Wilson. Nor was any mention of it made when Malcom Thompson re-quoted for the job and had discussions with Mr Brown in July about why the job had been awarded to NGV. It is difficult to know what to make of it now.

198 Applying the principles of Jones v Dunkel, I can, and do, infer from the failure of Mr Blythe or Mr Wilson to give evidence that their evidence on this point would not have assisted them. On that basis, I may more readily conclude that NGV did obtain a contract with ATCO at a price $1,500 less than AFT's price and with a service fee 2 cents per cubic metre less than AFT's service fee, despite the absence of any documentation establishing those facts. But it does not enable me to conclude that Mr Blythe or Mr Wilson used information gleaned from AFT that was confidential or only obtained as a result of them having been its officer or employee. I could not infer, for example, that they were aware of the terms of AFT's revised quotation of 16 April 2013 - that would involve speculation - although I do find that Mr Wilson was aware of the costings that he and Malcom Thompson had calculated during the week of 9 April.

199 Of course, Mr Blythe and Mr Wilson would also likely have been aware of the November 2012 quotation, but that quotation was not relied upon by AFT in April 2013. They would likely have been aware of AFT's general overhead costs that had been assumed for the November quotation and had been discussed between Mr Wilson and Malcom Thompson in early April. But whether or not those costs were peculiar to AFT, or useful to NGV for the purpose of compiling its own quote, is not easy to conclude on the evidence available. As for AFT's 'methodology and systems', there is no evidence that AFT had any methodology or system for compiling a quotation other than what the logic of the task called for. In other words, it is not evident that any method particular or peculiar to AFT was employed in quoting for that type of work.

200 Nevertheless, the ATCO opportunity was one that Mr Blythe and Mr Wilson most likely were aware of because of their previous roles with AFT. Prior to them leaving, the general opportunity had reached the stage at AFT where an order was on the cusp of being placed, and perhaps even money paid over upon it. Thereafter, however, the terms of the offer were varied and new proposals called for. On the other hand, Mr Wilson was very closely associated with the preparation of AFT's April 2013 quotation, at least up to a stage only one step removed from the compilation of the quotation itself. I find that Mr Wilson, and through him Mr Blythe, were aware that AFT was interested in pursuing the contract with ATCO because of Mr Wilson's involvement with Malcom Thompson in April 2013 in costing the job.

201 From the foregoing, I summarise my conclusions as follows:

(a) because of their employment with AFT both Mr Blythe and Mr Wilson, and through them NGV, became aware that ATCO was interested in placing an order for a containerised refuelling station;

(b) prior to them leaving AFT, negotiations with ATCO had reached a point where a price appears to have been agreed but no formal order placed;

(c) for whatever reason, ATCO seems to have put the order aside for a few months until pressing it again with AFT after Mr Blythe left, seemingly unaware of his departure;

(d) Mr Wilson assisted Malcom Thompson to work out a costing from which a new quotation could be prepared, but Mr Wilson left AFT before it prepared and sent such the quotation;

(e) by means unknown, NGV also quoted for the same job and was selected ahead of AFT;

(f) the reason ATCO gave for preferring NGV was that its quote was about $1,500 less than AFT's in circumstances in which AFT had quoted $1,400 more than the calculation it had worked out with Mr Wilson, and when AFT had (against Mr Blythe's previous advice) ceased to maintain a permanent staff member in Western Australia;

(g) although Mr Blythe and Mr Wilson would have gained some knowledge and experience in costing and quoting jobs of this kind whilst at AFT, there is nothing to suggest the quoting involved the application of any secret or special method known only to AFT beyond inputting materials and labour costs and factoring in a desired profit margin;

(h) having left AFT in the hands of the Thompsons, neither Mr Blythe nor Mr Wilson would have known what approach Malcom Thompson would finally adopt in quoting for the ATCO job;

(i) NGV won the ATCO tender by submitting a quote that was lower than AFT's, but probably also because NGV had the benefit of the established reputations of Mr Blythe and Mr Wilson in the industry, whereas by that time, AFT did not.

202 AFT's claim in relation to this business is that Mr Blythe, and through him Envirotrans and/or NGV, effectively took over a consultancy arrangement which AFT had enjoyed with Tas Gas since about September 2010.

203 More specifically, AFT alleges it secured a consultancy with Tas Gas in September 2010 under which it was entitled to a fee of $2,000 per month. That allegation is not admitted by the defendants. However, AFT produced an email from Mr Blythe to Mr Himson of Tas Gas dated 25 October 2010 with the subject line 'Retainer Agreement Details'.[153] In that email Mr Blythe thanked Mr Himson for his feedback regarding the 'Alliance & Retainer Relationship' between Tas Gas and AFT and then summarised what he understood that arrangement to be, in these terms:

...we will commit to 2 days per month for Tasmanian CNG Market Development plus additional work/support as needed on project by project basis.

Tas Gas will pay AFT Pty Ltd $1000 per day, ie $2000 per calendar month backdated to September 2010. The expectation is that this agreement will have an initial 12 month term (January 2011 to December 2011), but each party can renegotiate at any time if needed. (Travel costs will also continue to be covered by Tas Gas.)

... Once again we look forward to working with Tas Gas in this exciting development ...

204 In April 2010 Tas Gas and AFT had drafted the terms of a proposed 'Alliance Relationship' which evidently was not executed. It contained a more fulsome description of the role that AFT might perform for a fee structure similar to the one ultimately recorded in the September email. It is likely, I think, that the consultancy actually undertaken was either the same or a modified version of what was described in the April draft.

205 When Mr Blythe produced his cash flow forecast for AFT dated 19 December 2012, for the three month period January-March 2013, he included within it the expectation of the continued receipt of $2,000 per month from Tas Gas under the reference 'SDB Retainer'.[154] I infer from that fact that the consultancy arrangement made in 2010 was ongoing at that time.

206 AFT further alleges that Tas Gas terminated that consultancy in January 2013 and soon thereafter engaged Mr Blythe, Envirotrans and/or NGV as its consultant who 'now provide services previously provided by the plaintiff to Tas Gas'. Those allegations are either denied or are not admitted.

207 It is clear that Tas Gas did terminate AFT's consultancy. On 25 January 2013 Mr Sheather, then Chief Executive Officer of Brookfield Cogen Australia (the parent of Tas Gas, referred to in some documents as 'BCA'), emailed Mr Blythe under the subject heading 'AFT Monthly Business Development Fee'.[155] In that email Mr Sheather said he had recently reviewed the progress of CNG development in Tasmania and wished to terminate the existing monthly fee. He proposed that any work from 31 January 2013 onwards be done on an ad hoc basis 'given the limited resourcing support required'. He thanked AFT for 'helping Brookfield develop the Tasmanian market'.

208 As for any evidence about Mr Blythe, Envirotrans or NGV taking up a consultancy with Tas Gas to provide those same services once Mr Blythe left AFT, AFT tendered an unexecuted 'short form agreement for consultant engagement' between Tas Gas and 'Sean Blythe of Envirotrans Pty Ltd'.[156] The document described the intended consultancy project as 'AGL Alliance project'. The scope and nature of the services were the provision of 'consulting advice for the AGL Last Mile Gas Infrastructure Alliance in accordance with the Memorandum of Understanding ... between BCA and AGL' and 'securing agreements for the rollout of five Natural Gas Vehicle Refuelling sites'. The document envisaged the consultancy to be a five month engagement starting 1 March 2013 with a fee of $8,000 per month (plus disbursements).

209 Although the short form agreement in evidence was not executed, Mr Blythe (through submissions) concedes there was a consultancy agreement made between him and Tas Gas on 15 March 2013. But he argues that the work covered by it was not the same work covered by the September 2010 consultancy made with AFT. There is no evidence that the work described in the short form agreement was offered to or available to AFT before Mr Blythe left. Judging only from that document, it appears that what was envisaged in it was quite different from the consultancy which AFT had previously performed since 2010. One was an ongoing market development consultancy two days a month for $2,000 per month; the other was a short term, specific project consultancy for a specific entity to obtain contracts for a defined number of refuelling sites. On that analysis, other than the fact that the two agreements involved work to occur in Tasmania, for companies within the Brookfield family and generally in the CNG vehicle refuelling industry, they are not comparable.

1. However, in addition to the short form agreement there was also an email exchange between Mr Blythe and Mr Sheather around the same time. The emails referred to the agreement and appeared to concern the detail around its subject matter apparently at the request of a legal officer who, I infer, may have been tasked with drafting Mr Blythe's consultancy agreement.[157] In response to Mr Sheather's request sent in an email headed 'short form agreement for consultant engagement', Mr Blythe provided a work plan which he called a 'draft CNG (& virtual pipeline) work plan'. In contrast with the brief, project-specific description of the scope of work contained in the unexecuted short form agreement, the draft work plan sent through by Mr Blythe encompassed numerous projects, including:
   • developing the alliance relationship with AGL;
   • building a national public and private CNG refuelling strategy;
   • identifying sites for public CNG stations with target customers;
   • consulting on behalf of AGL and Brookfield with such target customers;
   • developing a national strategy and standard offer for CNG truck depot stations;
   • developing a national strategy and standard offer for CNG forklift depot stations;
   • building a business model for services for metro buses in Tasmania;
   • testing a business model for virtual pipeline opportunities at three identified locations in Tasmania and Victoria;
   • developing an approach with respect to tender information on Victoria's EfR initiative;
   • progressing discussions with respect to refuelling services for Action Buses in Canberra; and
   • considering potential refuelling opportunities for forklifts and trucks at the Victorian fruit and vegetable markets.

211 In short, if the email I have just referred to was intended to flesh out the proposed consultancy services to be performed under the short form consultancy engagement, it was far more expansive than the short form document would suggest. However, it is also far beyond and significantly different to the scope of the consultancy which AFT had previously performed for Tas Gas. It is possible that Mr Blythe's March 2013 consultancy embraced aspects of, or even the entirety of, the 2010 AFT market development consultancy. But that is difficult to say because of the absence of any detail about the substance of that earlier agreement and the services that were performed under it. Alternatively, it might have picked up some of the themes of the broad relationship agreement canvassed between AFT and Brookfield in early to mid-2012.[158] But as that 'relationship agreement' faltered in part because of Mrs Thompson's reservations about it, it is not possible to sensibly compare what might have been available to AFT at that time with what might have been performed by Mr Blythe for Tas Gas in 2013 and thereafter.

212 What can be said, I believe, is that the projects that were possibly to be within the scope of Mr Blythe's 2013 consultancy all lay within the field of knowledge and expertise that he personally possessed from his experience collected over time, including from his time at AFT. Indeed, a consultancy of this kind is, of its nature, dependent upon the personal skills and experience of the individual consultant.

213 Malcom Thompson gave evidence that after Mr Blythe left AFT he contacted Mr Himson to let him know he would visit in the near future, and later did visit with Mr Donatucci to service the compressor at the United Petroleum refuelling station in Hobart. AFT thereafter continued to do business with Tas Gas 'quite a few times a month'.[159] Malcom Thompson also gave evidence about having visited Mr Himson with John Hartley in the middle of 2013 whilst they were on a tour of AFT's CNG stations around Australia. Malcom Thompson said he assured Mr Himson that AFT stood ready to assist Tas Gas and that Mr Himson replied that AFT was Tas Gas' CNG partner of choice.[160]

214 In cross-examination Malcom Thompson agreed that AFT had continued (and was still continuing at the time of trial) to do business with Tas Gas in Tasmania supplying services for its refuelling stations. Beyond that evidence, Malcom Thompson gave no evidence about the consultancy agreement apparently entered into by Mr Blythe in March 2013 which is the subject of AFT's claim in this proceeding. For example, he gave no evidence of AFT's willingness, desire or capacity to undertake the sort of work that Tas Gas seems to have engaged Mr Blythe to perform. Nor did he seek to equate the work done by AFT under the 2010 Tas Gas consultancy with the work described in either the short form agreement or the list of projects contained in Mr Blythe's work plan provided to Mr Sheather.

215 Malcom Thompson was also cross-examined about an email exchange between himself and Mr Himson that occurred between May and November 2014.[161] It concerned a relatively minor matter of AFT having unilaterally cancelled a SIM card installed in some equipment at Tas Gas' Hobart CNG refuelling station. AFT was unaware when it cancelled it that the SIM card was required for that purpose, and did not know where the SIM card was installed. All AFT knew was that it kept receiving and paying a Telstra invoice for it. AFT's cancellation of the SIM card caused the equipment in which it was installed to cease working. Tas Gas investigated what seemed to be a fault with the equipment and replaced it with its own modem at a cost of about $1,000. Tas Gas had not realized that the cause of the apparent 'fault' was simply that AFT had ceased paying for the SIM card.

216 When AFT later charged Tas Gas the expenses associated with the SIM card, having discovered where it had been located, Mr Himson expressed some surprise. However, after Mr Himson offered to 'let the matter pass' Malcom Thompson was not prepared to do so. Instead, he expressed his disappointment at Mr Himson and refused to accept any level of blame on the part of AFT. Although, as I say, this was a minor matter, it contributes to the general sense that Malcom Thompson's business approach was somewhat unfriendly.[162]

217 It is difficult to isolate Mr Blythe's Tas Gas consultancy from the ambit of the broader AFT-Brookfield Cogen relationship which is discussed separately below,[163] because elements of what were described by Mr Blythe in his email to Mr Sheather of 20 March 2013 (draft CNG and virtual pipeline work plan) appear to merge the apparent scope of his Tas Gas consultancy with that wider arrangement.

218 It is also evident that the sort of wide-ranging scope of works which were listed in Mr Blythe's 20 March email represent elements of the vision which he presented to Brookfield back in early 2012.[164] It will be recalled that Mrs Thompson had reservations about continuing with the 'Brookfield model' and tensions between her and Mr Blythe over that relationship came to a head in connection with Mr Blythe's plans to sell the Altona refuelling station to Brookfield but have AFT continue to operate it. In other words, having broken free of the shackles of Mrs Thompson's narrower conception of AFT's business, Mr Blythe took up a consultancy with Tas Gas/Brookfield to pursue those business opportunities he had wished AFT to pursue but Mrs Thompson resisted.

219 On this particular aspect of AFT's claim, I am unable to conclude, as AFT alleges, that Mr Blythe either took over the particular arrangement which AFT had previously been performing for Tas Gas or that, in the arrangement he did subsequently strike up with Tas Gas, Mr Blythe misused any information obtained by him from AFT because he was a director of it. I do not ignore the reality that his relationship with Tas Gas and Brookfield possibly began because of his work for AFT and that some or many of the projects he ultimately assisted Tas Gas and Brookfield with were ones that he was keen for AFT to take up in some form of business relationship. But whether, in the whole of the circumstances, those connections mean that he breached any fiduciary duty owed to AFT by later entering the consultancy for Envirotrans is a question to which I return below.

220 The evidence shows that at some stage before Mr Blythe's and Mr Wilson's resignations, AFT had installed some CNG refuelling equipment at a CCA site at Moorabbin in Victoria. The equipment was designed to refuel CCA forklifts. It is not clear how long the equipment had been on site, but it is clear that by early 2014 AFT regarded the equipment as 'out of date'.

221 Coming back to September 2012, at that time (while Mr Blythe and Mr Wilson were still employed by AFT) Mr Blythe sent an email to a Mr Stuart Moore of CCA on 21 September 2012 with a quotation to supply new CNG refuelling equipment at the Moorabbin site. The quotation was for the supply of twin Coltri compressors, storage cylinders and a refuelling post. The quotation contemplated a five year agreement with delivery and installation to take place within three months of acceptance. The monthly fee was to be calculated at 0.49 cents per cubic metre of CNG used at the facility.[165]

222 AFT admitted into evidence another document of the same date (21 September 2012) which was a CNG Station Service & Maintenance Agreement Term Sheet. It is an unsigned document that purports to be an agreement for the operation and servicing of a CNG station to refuel forklifts at CCA's Adelaide site. The term of the agreement was for five months only (or until the station was replaced), commencing on 1 October 2012 and finishing on 1 March 2013. In his evidence, Malcolm Thompson suggested that this document was an interim agreement for the refuelling equipment at the Moorabbin site pending new equipment to be supplied as quoted on the same day.

223 Malcom Thompson's attention was not drawn to the reference to 'Adelaide' in the document. Neither was he the person at AFT responsible for the quotation for this particular agreement at the relevant time. Mr Blythe was handling those matters. There was other evidence that AFT also had some business with CCA in South Australia so it is not implausible that the agreement related to a site in that state. For instance, Mr Wilson supplied Malcom Thompson with contact details for CCA's representative in South Australia on 18 February 2013 (the day Mr Blythe left AFT).[166] Additionally, cash flow forecasts prepared by Mr Blythe showed actual and predicted income from CCA (including Pepsi) from both Moorabbin and South Australia.[167] AFT's bank records showed that money from CCA was being deposited into its account as at January 2014.[168] Those payments are consistent with there being regular monthly payments for one or more sites which AFT serviced.

224 It is certainly possible that the unsigned September 2012 agreement simply recorded the wrong site but, in the end, little turns on whether that particular agreement was for the Adelaide site or the Moorabbin site. Later events make it plain that there was equipment being used at the Moorabbin site and that it was intended to be replaced within some reasonably near time-frame, possibly because it was old equipment.

225 There is no evidence of any response from CCA to the quotation of 21 September 2012 before Mr Blythe left AFT. After Mr Blythe left on 18 February 2013 it took Malcom Thompson until 28 May 2013 to email Mr Moore at CCA to introduce himself and to re-agitate the question of a long-term service contract for Moorabbin. When asked in cross-examination why it took him so long to contact Mr Moore, Malcom Thompson said that there had been much to do within the company after Mr Blythe left and CCA was 'a lower priority'.[169]

226 Malcom Thompson eventually held a meeting with Mr Moore around mid-June 2013. On 2 July 2013 Malcom Thompson sent Mr Moore a quotation for a five year agreement to supply, install and service a CNG refuelling facility at Moorabbin. The proposal also covered the decommissioning and removal of the old equipment.[170] A comparison between the quotation prepared by Mr Blythe in September 2012 and the one prepared by Malcom Thompson in mid-2013 reveals that their terms and structure were quite different.

227 Nothing further appears to have occurred between July 2013 and December 2013. On 12 December 2013 Malcom Thompson sent a further email to CCA, this time addressed to Mr Moore and Gurwinder Singh. It attached a further quotation for the refuelling station at Moorabbin. It was quite an elaborate quotation (15 pages) and set out three optional packages for equipment, each comprising different compressor configurations. The quotation contained some six appendices which included details not only as to cost but also company history, service terms, occupational health and safety terms, and so on.

228 In evidence Malcom Thompson said that CCA had requested that AFT formally tender for the contract for the new refuelling station. But Malcom Thompson seemed to think that the request to tender was made prior to the July 2013 quotation, omitting to make any reference to the further quotation in December. I think it is likely that Malcom Thompson forgot about the more elaborate December quotation which was in fact the one supplied in response to the request for tender.[171]

229 The terms and structure of the December 2013 quotation were quite different from those contained in both the July 2013 quotation and the September 2012 quotation.

230 On 20 December 2013, Mr Singh responded to AFT's tender documentation informing Malcom Thompson that CCA would not be making a decision until the new year. Malcom Thompson followed up with an email on 31 January 2014 urging CCA to make a speedy decision because of the condition of the current equipment installed on the site. In that email Malcom Thompson referred to having previously advised both Mr Moore and Mr Singh 'on many occasions' of AFT's concern about the equipment's condition, although there is no evidence of any such advice having been previously given in either written or oral form.[172]

231 A fortnight after the 31 January email, Malcom Thompson again emailed Mr Moore, copying the email to Mr Singh and also to Mr Hartley who, at that stage, was working as an engineer for AFT.[173] The email was sent on 13 February 2014, just before 10 am in the morning. It advised Mr Moore that Mr Hartley had visited the site the day before and had shut down the compressor facility 'due to extreme safety concerns'. Malcom Thompson stated in the email that the action was regrettable but necessary because of the condition of the compressor claiming that it was something Mr Moore was 'well aware of due to [their] numerous conversations and emails over previous months'. He went on to say that attempts had been made to contact Mr Moore and Mr Singh but they had been unsuccessful, and warned CCA of the consequences that would follow if anybody other than AFT removed the tags which had been placed on the equipment or handled the equipment.

232 In evidence Malcom Thompson did not say he had tried to contact Mr Moore or Mr Singh to warn them of this step, saying that Mr Hartley had done so. For his part, Mr Hartley said that he had spoken to 'security' at the site but was unable to get through to anybody who had knowledge of the matter. Having done that, he said it was up to 'management' (i.e. at AFT) and not him to pursue any further telephone calls. Both men accepted that by closing down the equipment CCA would not be able to refuel its forklifts, at least after about 24 hours when the 'cascade' storage cylinders ran out of gas. Neither of them attempted to provide CCA with a solution for the crisis which would inevitably unfold and both seemed to think it was up to CCA to contact them rather than the other way around.

233 Somewhat surprisingly, Malcom Thompson thought that after this episode AFT was still 'in with a chance' to obtain the contract to supply the new refuelling station for CCA at Moorabbin. Possibly the explanation for that confidence was that, notwithstanding that CCA had requested tenders, Malcom Thompson believed (as he said in his evidence) that AFT was the only party tendering for the work. My impressions of Malcom Thompson and Mr Hartley when giving their evidence were that they both presented as quite aggressive men. Certainly Malcom Thompson's language and approach as revealed by his email to Mr Wilson in June 2011[174] demonstrated that sort of character. Moreover, in the witness box, both men displayed a degree of irritability when challenged. I found Mr Hartley particularly surly in his demeanour. There were signs that that quality carried into their attitude in business relations. Their behaviour in this incident was consistent with that attitude.

234 Malcom Thompson seemed to accept that after AFT had 'condemned' the refuelling equipment, WorkSafe inspectors appeared on site at Moorabbin and the equipment was put back into service. However, his evidence about that appeared to have been based on having read the witness outline of one of the defendant's witnesses (who did not give evidence), so I disregard it.

235 In any event, CCA did not appoint AFT as the supplier of its new CNG facility, assuming it obtained one. Malcom Thompson said he was informed by Mr Moore that AFT was unsuccessful in the tender without any reason being given. Malcom Thompson said that he later discovered that NGV had obtained the business when an email was inadvertently sent to AFT saying that NGV were involved. Whatever that email said, it was not put into evidence.

236 Indeed, there is no evidence whatsoever of CCA's ongoing arrangements for its CNG refuelling station after February 2014. AFT's pleadings and particulars make certain allegations about NGV's involvement with CCA, but it produces no evidence to substantiate the allegations.[175]

237 In my view, the evidence establishes as a matter of probability that AFT lost its business with CCA because of its behaviour over the allegedly ageing and unsafe equipment. For a party seeking to obtain new business, AFT behaved towards CCA in a rather high-handed manner almost calculated to destroy its chance of success. I am not persuaded that there had been a long history of warnings to Mr Singh and Mr Moore about the equipment. Had there been such concern and had warnings been given, I would have expected them to be the subject of emails or other documents which AFT would have tendered, at least in re-examination after doubt was cast on Malcom Thompson's account. Only one email was sent about a fortnight before the equipment was shut down, and that email could not be understood as forewarning such drastic action.

238 In conclusion, I doubt there was much contact at all before AFT took its drastic action; virtually nothing was offered by way of an alternative temporary solution to assist CCA out of the inevitable problem that would result for refuelling its fleet of forklifts; and there is reasonable cause to believe that Malcom Thompson was simply using the shutdown of the facility as a misguided means of forcing CCA to take up the new contract, believing that AFT was CCA's only practical supplier.

239 I am unable to conclude that Mr Blythe or Mr Wilson, or through them NGV, took advantage of any knowledge which they acquired whilst at AFT to obtain business for NGV (if indeed that was the case). If such a contract was obtained, there is no evidence that it was obtained before about 18 months after Mr Blythe left AFT; the terms of any such agreement are unknown and cannot be compared with what AFT had offered in September 2012; and AFT's own offers to CCA changed on two occasions after Mr Blythe and Mr Wilson left so that whatever Mr Blythe did know in September 2012, it was not the basis of AFT's offer to CCA throughout 2013 and into 2014.

240 EfR was a Victorian Government project which envisaged the supply of natural gas (in liquid or compressed form) to regional Victorian towns. It was to be effected by the delivery of stored gas to a facility on the outskirts of the town and then the provision of reticulation infrastructure to the town itself. Natural gas was to be transported by road, in a compressed form, having been drawn from a source supply facility (a 'mother station') and to be unloaded at a destination storage facility near the town (a 'daughter station'). By this means, the program would avoid the need to create physical pipelines from a major natural gas supply source to the towns. For this reason, the process was said to involve a 'virtual pipeline'.

241 I have already outlined some of the background to this project so far as AFT was concerned.[176]

242 In December 2012 Mr Blythe prepared an expression of interest (EOI) on behalf of Brookfield Cogen (the particular Brookfield entity to be used for this project) in conjunction with AFT, which resulted in Brookfield Cogen being shortlisted in January 2013 for the request to tender phase.

243 The initial documentation from the government had proposed the project involve 14 regional towns. According to Mrs Thompson's note of the meeting she held with Mr Blythe on 14 February 2013, Mr Blythe informed her that the tender was then only covering five towns instead of the initial eight and that Brookfield was less attracted to it. He told her he believed Brookfield and Elgas were also looking at being part of the tender process and thought there might have been a fourth company but did not know who it was. Furthermore, he told her that although $83 million had been available from the government as at December to cover the costs for the project, three towns had now been removed due to gas having already been connected to them. He thought the figure of $83 million would now be reduced. He told her that tender documents would be available in April and it was necessary to wait until then.

244 AFT allege that, following on from the background just described:

• Mr Blythe (after 18 February 2013) and Envirotrans and NGV (by 11 May 2014 at the latest) were assisting Brookfield in the EfR program;
• In 2013 or 2014, Envirotrans entered a consultancy agreement with Brookfield Cogen in connection with the EfR program;
• In 2013 or 2014, NGV entered a consultancy agreement and/or a services agreement with Brookfield Cogen in connection with the EfR program;
• In September 2014, Brookfield was successful in obtaining an award of work in connection with the EfR program;
• By 2015, NGV entered, or was negotiating to enter, a series of further agreements with Brookfield for the EfR program; and
• The EfR program was a maturing business opportunity for AFT as at February 2013 and by reason of Mr Blythe's and Mr Wilson's improper use of information acquired whilst officers of AFT, they (and through them NGV and Envirotrans) pursued the EfR program work, a consequence of which was that AFT lost the chance to pursue the maturing business opportunity.

245 Mrs Thompson said that she telephoned Mr Sheather on 25 February 2013, soon after Mr Blythe left AFT. She was told by Mr Sheather that Brookfield Cogen would not be pursuing EfR but concentrating on water.

246 Next after that, some 15 months later, Mrs Thompson received (evidently by error) an email of 11 May 2014 intended to be directed to Mr Blythe. That email alerted her to the fact that Mr Blythe and NGV continued to have some involvement with Brookfield Cogen in the EfR project. The email was sent by Mr Vaughan from Brookfield to a number of Brookfield personnel including Mr Sheather, and to 'sales@advancedfuels.com.au', under the subject heading, 'Energy for the Regions Program RFT Data V4.XLSX'. Presumably that document was a spreadsheet that concerned the EfR program.[177] Mr Vaughan was asking Mr Blythe to provide a table with a CNG kit for 'each scenario' and a summary of examples of CNG storage in Australia and overseas for modelling purposes. When he learned of the email, Mr Blythe immediately responded requesting the deletion of the AFT email address and that care be taken not to send to any AFT email accounts.[178]

247 For his part, Stewart Thompson said that he had had no involvement in the EfR project prior to Mr Blythe leaving AFT, but knew about it because of discussion around the office. It is to be recalled that Mrs Thompson had said that when she received the EfR documentation in December 2012 she had forwarded it on to her son Malcolm.

248 In late 2016 Malcom Thompson and Mr Hartley toured the Victorian regions inspecting the progress of construction of the various EfR mother stations and daughter stations associated with the intended delivery of natural gas to regional towns. At several places they took photographs of equipment which displayed NGV branding, including the mother station at Bendigo. The photograph taken there showed CNG compressors of KwangShin manufacture (a compressor brand previously distributed and used by AFT) exhibiting NGV branding on them or on associated structures at the site.[179]

249 The invitation for an EOI for the EfR program, published in November 2012, briefly explained what the program was then intended to involve.[180] The document, bearing a tender reference number 318001, explained that the Victorian Government had allocated $100 million to support the delivery of reticulated natural gas to communities in regional Victoria. At that time the program involved three major initiatives:

1. Fast track the delivery of natural gas to 'Priority towns';

2. Invest in a major upgrade of Mildura's natural gas supply capacity; and

3. Undertake a feasibility study into the provision of natural gas to Victorian communities along the Murray River.

250 The purpose of the invitation for EOI was to inform recipients of the project, provide an overview of the business opportunity, and outline the tender process and evaluation criteria. Rural Development Victoria (RDV) would ultimately conduct the tender process. In short, the process involved two stages: an invitation to submit a EOI and then, if selected, the submission of a tender in response to a request for tender (RFT). Because RDV had a preference for parties who could deliver all components of the project, it encouraged respondents to form consortia which were able to deliver the whole project.

251 Emails around that time suggested that Mr Blythe was heavily involved, if not the prime-mover, in developing Brookfield Cogen's response to the request for EOI. Brookfield's ultimate response dated around 5 December 2012, signed by Mr Sheather as CEO of Brookfield Cogen,[181] contained these statements:

Brookfield, in conjunction with Advanced Fuels Technology (AFT) would be interested in providing a formal submission to any future bid process that might be implemented by RDV for the provision of CNG 'Virtual Pipeline' solutions for the transmission of natural gas to regional Victorian communities and industries.

...

Brookfield is working with AFT, a leading developer of CNG refuelling station infrastructure in Australia. AFT own and operate more than 12 CNG refuelling stations.

...

Brookfield will be the lead party but will collaborate closely with AFT if this EOI were to progress to developing a formal submission in the future.

...

In regard to the CNG station and Virtual Pipeline aspects, we have a strong relationship with AFT who will be responsible for the design, supply and operation of the project upstream of the low pressure 'city/town natural gas gate stations'.

252 The timetable forecast for the tender was as follows:

Evaluation of tenders and selection of preferred tenderers

253 On the evidence, it appears that Brookfield Cogen did not continue with its request for tender pursuant to the invitation for expressions of interest released in November 2012. At least, that is what Mr Sheather communicated to Mrs Thompson in late February 2013. However, it seems that Brookfield may have remained undecided for on 20 March 2013, when Mr Blythe wrote to Mr Sheather with a work plan in connection with the consultancy he was undertaking for Tas Gas, Mr Blythe suggested as one of the target projects:

Vic Energy for the Regions - receive tender information memorandum and decide on the approach - Yes, No or other offer to collaborate with the Government in another way perhaps? - Ritchie ...[182]

254 In late 2013, RDV wrote to Mr Sheather at Brookfield Cogen with respect to EfR tender number 318001B.[183] It concerned an extension to the tender submission date. The fact that the tender number had the addition of 'B' suggests some modification or variation from the proposed project the subject of the invitation for EOI in November 2012. The letter advised Mr Sheather that RDV had decided to extend the closing date for tenders in response to a new RFT, as requested by Brookfield Cogen and other respondents. The revised process as outlined in the letter began with the issue of a RFT on 3 September 2013, was followed by tenders, then notification of a successful respondent in the month of May 2014, and finished with the signing of a development agreement projected for June 2014.

255 The letter outlined the project to be the subject of the RFT as:

The provision of an integrated delivery solution, requiring the respondents to:

(i) source wholesale natural gas supply or LNG supply,

(ii) construction, operation and maintenance of the required CNG or LNG infrastructure, including CNG compression plant and in town 'daughter' stations for a CNG solution or LNG transport vessels, LNG off-loading, storage and regasification stations in regional towns for a LNG solution,

(iii) construction, operation, service and maintenance of in-town distribution networks,

(iv) delivery of CNG or LNG to town boundaries and injection of gas into in-town reticulated networks, and

(v) retail of gas to residential and commercial customers in regional towns.

The Program Funding is for the reticulation of gas supply to the Remaining Priority Towns, Murray River Communities, and other regional towns in Victoria. In allocating the Program Funding, RDV has considered the size, expected growth, presence of industrial and commercial customers and energy demand of the Remaining Priority Towns and in the six most populous Murray River Communities. While the Funding Request is an Evaluation Criteria for this RFT, RDV notes that the maximum Program Funding available for delivery of the Energy for the Regions Program is as follows:

• $55 million for the reticulation of gas supply to the Remaining Priority Towns and/or towns in regional Victoria;
• $30 million for the reticulation of natural gas supply to Murray River Communities.

256 On 24 April 2014 RDV informed Brookfield Infrastructure Group (Australia) Pty Ltd that it had been selected as one of the preferred respondents for the EfR program and had been invited to participate in non-exclusive negotiations. The letter advised Brookfield that should it not be successful in entering a binding development agreement RDV was willing to reimburse it up to $500,000 for eligible third party costs incurred during the negotiation process. This would suggest that substantial investigations and preparation were still to be undertaken for the purpose of competing to win the agreement, including Brookfield engaging third parties to provide information and assistance for the purpose of putting forward its case for final selection. It was shortly after that time that Mr Vaughan at Brookfield sent the email of 11 May 2014 intended for Mr Blythe, but misdirected to sales@advancedfuels.com.au, requesting information about CNG kits and examples of CNG storage from Australia and overseas to help with the modelling.

257 On 27 May 2014 the Minister for Regional and Rural Development announced that the field of applicants for the $85 million natural gas tender had been narrowed to two. It was to involve connection to seven towns and the expansion of supply of gas to Mildura. The media release stated:

The $85 million tender asked companies to compete for the chance to supply the remaining seven priority towns, as well as additional communities along the Murray River.[184]

258 On 30 September 2014 the Minister for Regional and Rural Development issued a further media release announcing that an agreement had been reached with Brookfield to deliver natural gas to 11 communities. More particularly, the announcement stated:

The Victorian Coalition Government has delivered another key election commitment, with agreement reached to supply piped natural gas to the remaining priority towns under the Energy for the Regions Program, as well as an additional four Murray River communities using a compressed natural gas delivery solution.

...

Mr Ryan [the Minister] said the gas connections would be delivered through the Victorian Coalition Governments $85 million Request for Tender, which included two components:

• $30 million to connect Murray River communities, comprising $15 million from the Commonwealth's $100 million Murray-Darling Basin Regional Economic Diversification Program and $15 million from the Victoria's Regional Growth Fund; and
• $55 million from the Regional Growth Fund to supply the remaining priority towns as part of the third stage of the Energy for the Regions Program.

259 From the foregoing description of the EfR program and Brookfield's involvement in it, I make the following observations:

• It is not entirely clear whether the project for which Brookfield finally succeeded in tendering and obtaining a contract with RDV was for the same stage of the project offered in November 2012;
• The part of the EfR program for which Brookfield succeeded in obtaining a contract with the government in September 2014 was described as the 'third stage' of the program and was secured 15 months later than the projected agreement date as envisaged in November 2012;
• The Brookfield entity which succeeded in obtaining the contract with the government was different from the entity which was the respondent to the request for EOI in December 2012;
• The project for which Brookfield succeeded in obtaining the agreement in September 2013 was to supply 'remaining priority towns', suggesting that some earlier stage of the EfR, possibly obtained by some other consortia, supplied natural gas to other Victorian regional towns;
• The business opportunity available to AFT in November/December 2012 to partner with Brookfield Cogen under the EfR program was likely to have been either quite different from what Brookfield Infrastructure Group ultimately succeeded in obtaining, or was a different aspect of it, or was a preliminary version of it, or a combination of the three; and
• In any event, there was 21 months of variation, extension, requests for expression of interest, selection of preferred tenderers and negotiation to obtain agreement between the first manifestation of the offer in November 2012 and the ultimate securing of an agreement in September 2014.

260 It is unknown precisely what NGV's involvement came to be within the successful Brookfield contract in September 2014. Although certain specific involvements were alleged in pleadings, they were not proven at trial. At least in the early stages, Mr Blythe's role was confined to that of an advisor/consultant to Brookfield in contrast to a partner organisation in the delivery of aspects of the project. Additionally, it may be inferred from the photographs taken by Malcom Thompson and Mr Hartley that NGV ultimately supplied some equipment for the mother and/or daughter stations. Beyond that, its role is unclear. For that reason, whatever NGV's role was, it cannot be reliably compared with what was on offer to AFT in November and December 2012.

261 Further, there is no evidence that AFT did anything at all to pursue the opportunity with Mr Sheather after Mrs Thompson's telephone call with him on 25 February 2013. Other evidence suggests that, in the aftermath of Mr Blythe and Mr Wilson having departed, AFT was struggling to cope with keeping up with much smaller contracts and servicing its existing customers. Moreover, it is not altogether surprising that, now solely under the control of Mrs Thompson and her sons, AFT would not actively pursue the EfR project with Brookfield. As revealed by the description of events above, Mrs Thompson had a distinctly narrower vision for AFT than Mr Blythe. Indeed, it was her narrower conception of AFT's business aspirations that, in part, brought Mrs Thompson and Mr Blythe into conflict.

262 AFT alleges that Mr Blythe and Mr Wilson improperly used information, obtained when and because they were a director and employee respectively of the company, to pursue for themselves a 'maturing business opportunity' that had been available to AFT. The information so identified was, essentially, those documents from the government (or its agents) that informed AFT of the existence of the EfR program and invited an EOI, and AFT's 'technical expertise to deliver LNG and CNG projects'.

263 In so far as it comprised the documentary information, the information was predominantly publicly available. Having left AFT, Mr Blythe could not be expected, nor was he required, to erase from his memory the knowledge of the existence of the EfR program. In any event, the opportunity which Mr Blythe pursued soon after his departure from AFT was a personal consultancy arrangement with Tas Gas and/or Brookfield Cogen, which he was free to make. That arrangement of itself was an obvious and independent source for his information about Brookfield's intentions and plans in connection with the EfR program.

264 In so far as AFT's technical expertise was concerned, its expertise was intrinsically bound up in the personal and technical expertise of both Mr Blythe and Mr Wilson themselves. There was no particular 'know how' sourced only from AFT, as distinct from their own general abilities and trade-knowledge, shown to have been used by Mr Blythe or Mr Wilson in connection with whatever assistance they, or through them NGV, provided to Brookfield in relation to the EfR program.

265 In short, AFT did not establish that by involving themselves in the EfR program after leaving AFT - in particular, as a consultant to Brookfield (Mr Blythe) or, through NGV, as suppliers of KwangShin compressors - either Mr Blythe or Mr Wilson used information that only came to them because of their employment with AFT or was confidential to AFT.

266 AFT also allege that because of Mr Blythe's and Mr Wilson's continuing involvement with Brookfield in the EfR project, it lost the chance to pursue the EfR maturing business opportunity and to share with Brookfield the financial benefits of the contract it secured in September 2014 or in the negotiation process toward it.

267 In my view, AFT has failed to establish any causal connection between Mr Blythe's, Mr Wilson's or NGV's involvement with Brookfield between March 2013 and September 2014 and its own lack of involvement in or reward from the EfR program.

268 AFT pleads that it lost the chance to pursue several other Brookfield business opportunities because, after departing AFT, Mr Blythe and Mr Wilson improperly used information they had acquired while its officers and/or employees. More particularly those opportunities are alleged to be:

• services provided to Tas Gas;
• services provided to CCA;
• opportunities to enter a broad, umbrella business relationship with Brookfield or Tas Gas that was presaged by the confidentiality agreement and draft relationship agreement;[185]
• a proposed arrangement concerning Tasmanian Metro buses;
• a tender for Sydney buses; and
• virtual pipeline projects for Simplot and TasDairy in Tasmania.

269 Two of these arrangements (Tas Gas and CCA) have already been the subject of separate analyses and require no further discussion.

270 As regards Hobart Metro buses, that business appeared in a list of possible projects which Mr Blythe had outlined in his draft work plan given to Mr Sheather on 20 March 2013. But there is no evidence it went any further. Accordingly, there is no evidence that Mr Blythe's pursuit of it with Brookfield (if that occurred) caused any loss of opportunity to AFT, as it alleges. Further, there was no evidence led in relation to Mr Blythe having acquired or pursued the other opportunities mentioned (Sydney buses, Simplot, TasDairy) beyond reference to some of them in Mr Blythe's 20 March 'draft work plan' email.

271 In more general terms, in March 2013, during the course of Mr Blythe's discussion with Mr Sheather, Mr Blythe flagged the prospect that he could pursue (on behalf of Tas Gas and/or Brookfield) some of the same specific projects that had been the subject of Mr Blythe's presentation to Brookfield, on behalf of AFT, in January 2012. Back in 2012 those opportunities were presented as a wish-list of possible projects for the two companies to pursue in some form of joint enterprise. In contrast, Mr Blythe's March 2013 consultancy with Tas Gas or Brookfield involved him advising one or both of those companies about opportunities which they could take up either alone or with others. By its nature, Mr Blythe's personal consultancy to advise Tas Gas or Brookfield was quite different in nature and scope to any form of joint enterprise between independent corporate entities, as envisaged for AFT in a very nascent form in early 2012.

272 Any claim under this heading against Mr Blythe or Mr Wilson, or through them Envirotrans or NGV, fails on a number of bases:

• first, there is no clear identification of any specific opportunity available for AFT to take up with Brookfield, either generally or in respect of any particular project;
• even if specific opportunities were identifiable, neither AFT nor Brookfield advanced any plans to pursue them beyond making some very preliminary arrangements (ie, the confidentiality agreement) designed to enable any specific negotiations to occur; and
• in any event, there is no identifiable evidence that Mr Blythe or Mr Wilson pursued such opportunities (in part because of a lack of any clear identification of what those opportunities were).

273 Although there is no documentary evidence to demonstrate the fact, Malcom Thompson said that AFT had had a business relationship with Gouge since 2008. AFT had installed a CNG refuelling station at Gouge's Shepparton premises to refuel its truck fleet. Although he was not directly involved in the business at that time, Malcom Thompson said his belief was based on having seen invoices and having spoken to people within AFT. He said the agreement was for five years, but the equipment had been upgraded in 2011. As at 2013 the refuelling station had a mixture of old and new equipment.

274 Malcom Thompson said that he contacted Gouge after Mr Blythe left and informed them that business would continue as usual and that AFT had staff (for example, Mr Donatucci) who could give the necessary support. Things continued to operate as usual until October 2013.

275 In about August or September 2013 Malcom Thompson and Mr Hartley prepared a quotation to upgrade the Shepparton refuelling station at the invitation of Rob Priestly of Gouge with whom Malcom Thompson was dealing. Malcom Thompson understood that there were other tenderers for the business. He was eventually informed that AFT's tender was unsuccessful. He wrote to Mr Priestly on 29 October asking for feedback as to why they were not successful. Mr Priestly responded, explaining that AFT's quote for servicing was about five per cent 'more expensive' than the successful party. He also said that whereas AFT had quoted for a reconditioned compressor unit, Gouge had preferred a new compressor offered by the successful party.[186] In cross-examination Malcom Thompson agreed that he and Mr Priestly had had a difference of opinion as to whether the contract (here, it was not clear whether it was the old contract or the proposed new contract) would cover maintenance and repairs, or only maintenance.

276 No evidence was given about the identity of the successful bidder. Moreover, there is no evidence about the terms upon which the successful bidder contracted with Gouge or what services were to be provided, other than what was contained in the brief explanation by Mr Priestly in his email to Malcom Thompson.

277 AFT's case is that Gouge entered a contract with NGV for the supply, service and maintenance of the CNG refuelling facilities at Shepparton, but that proposition is not established. AFT further pleads that to obtain the contract (which is not proved) Mr Blythe and Mr Wilson, and through them NGV, improperly used information they obtained whilst officers or employees of AFT. That information is said to comprise:

• the fact that AFT held an agreement with Gouge from about May 2008;
• the services provided under that agreement and the fees payable for them;
• the terms and conditions of those services;
• AFT's overheads and profit margins;
• AFT's technical expertise in providing the service and maintenance for Gouge;
• AFT's internal systems and procedures for managing and administering its agreement with Gouge; and
• AFT's financial spreadsheets and costings.

278 None of these allegations have been substantiated. They cannot be substantiated for the primary reason that there is no evidence of the existence of any agreement with NGV much less what were the terms of any such agreement. Moreover, no information was given about the terms of the quotation which AFT gave to Gouge. So it is not possible to identify the components or elements comprising the new business about which either Mr Blythe or Mr Wilson may have possessed some confidential knowledge gained from AFT which they could have improperly used.

279 AFT alleges that there was an opportunity for it to do some business with the energy company, AGL, which Mr Blythe knew about in December 2012 but failed to pass on to anybody else in the company. AFT does not allege, in this instance, that Mr Blythe or NGV took up that particular opportunity at any later point in time.

280 The 'opportunity' which AFT pleads was one that was depicted in a Request for Information (RFI) published by AGL to prospective tenderers generally. It concerned the construction, operation and maintenance of a single public CNG refuelling facility in the New South Wales suburb of Huntingwood. According to the RFI documentation, AGL had also recently acquired another CNG public refuelling station at Moorebank, New South Wales. The RFI required a response by any intending tenderers by 14 January 2013.

281 Upon receipt of the RFI, Mr Blythe sent it to Mr Wilson saying that he would call him to discuss it. There is no evidence of what occurred in relation to that proposal beyond that email.

282 There may be good reason for that. AFT and AGL were competitors with each other in the CNG refuelling market, as Mrs Thompson conceded in her evidence.[187] AFT provided refuelling services for Toll in Melbourne at the Altona refuelling station whereas AGL provided refuelling services for the Toll fleet in Sydney. To illustrate their rivalry, in more recent times AGL has secured the contract in Victoria for refuelling Toll vehicles, displacing AFT.

283 At the 14 February 2013 meeting, Mr Blythe evidently told Mrs Thompson about there being a 'risk' that AGL could build a refuelling station in Sydney. Mr Blythe's statement to Mrs Thompson about that risk may have been a direct reference to the knowledge he had gained from the RFI about a refuelling station at Huntingwood. If Mrs Thompson did not already know about the Huntingwood proposal, she had the perfect opportunity to ask about it. Had Mr Blythe been intending to conceal from Mrs Thompson the existence of some opportunity to partner with AGL to operate a new refuelling facility in Sydney, it would hardly seem likely that he would volunteer his knowledge of the prospect of that facility in a discussion with her.

284 In my view, there was good reason to think that AGL's proposal was a risk to AFT rather than an opportunity; the risk was that by AGL building a refuelling station for Toll vehicles it might impact on AFT's refuelling business at Altona. Indeed, the most likely reason Mr Blythe would pass on the RFI to Mr Wilson upon receipt of it in December 2012 was concern for its potential impact on Altona, rather than as an opportunity for AFT to partner with AGL in New South Wales.

285 In about September 2013 - after Mr Blythe's departure - AFT (through Malcom Thompson) teamed up with a Canadian company to tender for an opportunity to be involved in a 'range of refuelling stations' that AGL was going to construct along the eastern seaboard of Australia. It is immediately apparent that this was a different venture to a single refuelling station in one location in Sydney. Precisely what AFT's involvement was to be was not detailed by Malcom Thompson either in oral evidence or through any document. The Canadian company, as the lead tenderer, quoted for the work (whatever it was) and was apparently awarded the contract. It was not revealed what AFT's role was to be under this arrangement. In due course, however, the work did not proceed because, as Malcom Thompson put it, of 'faults on both sides', meaning both AGL and the Canadian company.

286 In 2015 Mrs Thompson found the December 2012 email from Mr Blythe to Mr Wilson passing on AGL's RFI for the Huntingwood site. Why it took AFT two years to go through its former employees' computers to ascertain if it should follow up any business opportunities revealed on them was not explained. That is curious given the complaint made in this proceeding that the defendants withheld vital business information from AFT upon their departure.

287 Having seen the 2012 email, in 2015, AFT apparently concluded that it had missed an opportunity which it could have taken up because of the wrongful withholding of information by Mr Blythe before he left. It also claims that it has suffered loss of income because of that missed opportunity.

288 Upon analysis, the complaint has no merit. It has no merit because:

• the RFI did not constitute an opportunity for AFT, only a risk;
• the Huntingwood RFI was a completely different opportunity to the one which AFT appeared to have tendered for in September 2013 and there was no apparent connection between them; and
• there is no substance in the suggestion, if it was intended, that some earlier knowledge of the Huntingwood RFI would have enhanced AFT's prospect of securing (and thereafter keeping) the 'eastern seaboard' business in September 2013.

289 Associated with the complaint about the 'AGL opportunity' is a pleading by AFT that after Mr Blythe and Mr Wilson resigned they, and through them NGV, improperly used information they had obtained whilst at AFT to pursue 'the AGL opportunity' with the intention of obtaining the benefit for themselves, NGV and Brookfield. The information said to have been improperly used is the plant registration certificate and the NG compliance statement.[188]

290 There is no question that these two documents were referenced by Mr Ly in the due diligence report he prepared on behalf of AGL on 14 June 2013.[189] The purpose of that report is made plain in the introduction (page 4) where Mr Ly says that he was requested:

... by AGL Energy to conduct a due diligence assessment of CNG refuelling station equipment which has been offered by NGV group (NGVG).

291 In his report Mr Ly assesses and reports on KwangShin compressors, Coltri compressors, Compaq fuel dispensers and card readers and CNG storage cascades. It is not clear from the report whether the offer which NGV had made to AGL was simply to supply items of equipment as stand-alone parts, or to supply those parts in conjunction with a broader refuelling site installation. However, in the course of that report Mr Ly refers to various documents which had been provided to him by NGV. Those documents included the two referred to above. In addition, it is plain that the NGV personnel informed Mr Ly of their previous experience at AFT. In other words, it was plain that Mr Blythe and Mr Wilson (now at NGV) were leveraging off the fact of their employment with AFT and experience gained from it. That in itself is neither surprising nor wrongful.

292 What does seem to be wrongful, however, is the use of documents prepared at and for AFT which had evidently been carried across from AFT into the NGV database of documents. As discussed above, Mr Wilson admitted that he had placed a series of documents on to a SkyDrive relevant to a proposal for him to work with AGL on a rollout of refuelling stations across Australia for compressed natural gas. They were placed on the SkyDrive to enable Mr Ly to have direct access to them.

293 But what was the outcome or effect of the use of this information? The evidence does not reveal in any detail what NGV was tendering for or whether or not it was successful. It is not likely that it was for the Huntingwood refuelling station which AFT claims was the opportunity Mr Blythe had received whilst at AFT, but concealed from it. If it was for the vaguely described 'eastern seaboard opportunity', that was not shown to have been an opportunity in prospect for AFT while Mr Blythe or Mr Wilson worked for it. Moreover, AFT appears to have had the opportunity to compete for that opportunity, or something akin to it, through its association with the Canadian company but simply missed out. In any event, it has not been shown that the use of those two documents brought any benefit to Mr Blythe, Mr Wilson or NGV.

294 Insofar as AFT's claim is for the 'lost chance to tender in or about December 2012 for the AGL opportunity' and the consequential loss to it, it is impossible to conclude that the misuse of these two documents in any subsequent offer by NGV to provide equipment to AGL had any causal relevance whatsoever to the loss AFT claims.

295 AFT pleads that it had provided CNG and LNG vehicle conversion services for CAP and, from about 2010, was a distributor of CAP parts for dual fuel technology. It further pleads that from at least early to mid-2012 Mr Blythe was negotiating with CAP an opportunity for AFT to become its sole agent and/or distributor in Australia, and that in June 2012 he met with representatives of CAP to progress those negotiations. None of those allegations are admitted and little evidence (if any) was given about them. At most, Malcom Thompson had stated that CAP had become an 'integral part' of AFT, significant both in turnover and work load. He said AFT was its installation partner, installing CAP's equipment and vehicles and providing some localised support for its operations in Western Australia, for example, providing meeting facilities. He said CAP had one staff member in Australia, Tim Carr, who worked from home in Melbourne, but that CAP carried out its operations primarily in Western Australia. CAP's operations were supported by AFT in Western Australia through Mr Wilson, Mr Clarke and Bart Kumar.

296 In their meeting on 14 February 2013 Mrs Thompson and Mr Blythe discussed AFT's business with CAP. Their discussion centred on whether AFT needed to retain a permanent presence in Western Australia to support the client's business, described as 'CAP parts and the refuelling station'. It is clear that Mr Blythe favoured retaining its presence in that state whereas Mrs Thompson favoured closing the office and redeploying AFT's financial investment in the employment of a qualified engineer to work (from Melbourne) on the Western Australian businesses and on new business. Their positions in this respect were consistent with their differing views on keeping a Western Australian presence for the ATCO business.[190]

297 It is not clear from the evidence whether Mr Blythe and Mrs Thompson discussed any greater role for AFT in distributing CAP's products than what it already enjoyed (assuming one was on offer).

298 After Mr Blythe left AFT Malcom Thompson spoke to Gary Ireson, a CAP representative, telling him that AFT would conduct business as usual. But after Mr Wilson left AFT, and after AFT decided to close down its Western Australian office, Malcom Thompson had only been able to offer to support CAP's operations from Melbourne albeit at discounted rates. He conceded that without the Western Australian office, in his words, 'we were behind'. After he made that offer to Mr Ireson (in about April 2013) he said the relationship with CAP ceased.

299 From documents that were put in evidence, it is clear that the CAP business (whatever that was) brought into AFT something in the order of $48,000 gross per year.[191] This translated to approximately $28,000 net to AFT.

300 Other than those facts, very little is established by the evidence as to what it was that AFT did for CAP. There is no evidence at all about any negotiations for AFT to become sole agent or distributor for CAP. In fact, there is no evidence about what were the products that CAP supplied or the markets in which it was operating except that it had something to do with equipment for vehicles using gas fuel.

301 On 11 March 2013 (roughly three weeks after Mr Blythe left AFT) it appears that Mr Blythe entered a consultancy agreement with CAP.[192] The agreement was expressed to run until 10 March 2014. For a fee of $7,500 per month (plus reimbursement of out of pocket expenses and administrative support expenses) Mr Blythe was to provide CAP with the services listed below over a period of 12 days of each calendar month during the term of the agreement:

• Represent [CAP] with LNG and CNG suppliers, distributors of Caterpillar equipment, Volvo Truck Australia, Volvo Dealers, Federal and State Governments, the Australian Greenhouse Office, industry bodies and associations, Advanced Fuels Technology and other potential partners and customers;
• Customer liaison and direct sales to end users;
• Organisation of installations for Caterpillar and Genesis EDGE Dual-Fuel systems;
• Operations management solution for CAP parts distribution;
• Operations management solution for after-market support;
• Volvo Australia and Dealership channel management.[193]

302 Further, a company search for CAP showed that Mr Blythe was appointed a director of the company on 1 January 2014 and that its registered address is 'NGV Group Pty Ltd, 150 Australis Drive, Derrimut, Victoria'. That registration commenced 15 January 2014.

303 AFT alleges that Mr Blythe improperly used information obtained whilst a director and officer of AFT in order to enter the consultancy services agreement with CAP. The information allegedly so used was:

• the fact that AFT held a commercial arrangement with CAP for some time;
• the services provided under that agreement and the fees payable for them;
• the terms and conditions of those services;
• AFT's overheads and profit margins;
• AFT's technical expertise in providing the service and maintenance for CAP; and
• AFT's internal systems and procedures for managing and administering its agreement with CAP.

304 The use of that information is said to be inferred from the fact that Mr Blythe was dealing with CAP as the senior officer of AFT and he took up the consultancy services agreement in March 2013.

305 There are a number of problems with AFT's arguments:

(a) there is no evidence of the specific services which AFT performed for CAP;

(b) there is no evidence of any negotiations with CAP current at the time Mr Blythe left AFT;

(c) to the extent that the range of services might be compared, from the dollar value of the annual remuneration paid to AFT and then payable under the consultancy agreement, the two services appear to be quite different;

(d) the services under Mr Blythe's consultancy agreement appear to be as the representative of CAP rather than the supplier of services or as a third party distributor (as AFT appeared to be);

(e) within the services Mr Blythe was to perform under the consultancy agreement, he was to represent CAP to AFT;

(f) AFT's business with CAP seems to have been lost when it decided to close its Western Australian operation and no longer maintain staff at the place where CAP had previously conducted its operations; and

(g) there is no evidence to suggest that information of the kind which AFT alleges Mr Blythe improperly used was in fact used to obtain the consultancy with CAP, nor is it apparent how that information would have assisted him to do so: it is more likely that his knowledge about CAP (rather than about AFT), acquired while working at AFT, attracted him to seeking a consultancy with CAP.

306 Before finally turning to conclusions that should be drawn with respect to AFT's allegations that the defendants were in breach of duties or statutory provisions in connection with the eight businesses, it is convenient to deal with the allegation that Mr Blythe, Mr Wilson and Mr O'Leary engaged themselves in a dishonest and fraudulent design. I take into account the gravity of that allegation in considering the strength of the evidence necessary to satisfy me of it.[194]

307 AFT allege that in the course of the share sale negotiations in late 2012 and early 2013 Mr Blythe made statements to Mrs Thompson about the value and state of the company's affairs which were pessimistic in outlook and which he knew to be false. Allegedly, he knew they were false because he was aware of a number of business opportunities which were ripe for fruition (ATCO, Brookfield and the EfR, and AGL) and that there were existing businesses with whom contracts were ongoing or on the verge of renewal (CCA, CAP and Gouge).

308 To the extent that AFT relies upon the negotiations between Mr Blythe and Mrs Thompson and the contemporaneous status of business opportunities available to AFT, I have already set out the evidence in relation to those matters in considerable detail above.

309 AFT further alleges that when Mr Blythe became aware that settlement negotiations with Mrs Thompson would fail in late 2012 or early 2013, he came to an arrangement with Mr Wilson and Mr O'Leary to establish NGV and to advance their respective interests through that company. That arrangement or understanding is said to be inferred from the facts that the application for registration of NGV was made in April 2013; a company owned and controlled by Mr Blythe was to become a 70 per cent shareholder in NGV; a company owned or controlled by Mr O'Leary was to become a 20 per cent shareholder in NGV; a company associated with Mr Wilson's father was to become a 10 per cent shareholder of NGV; and Mr O'Leary was to be NGV's sole director and secretary. I have assumed, also, that the reason for alleging the misrepresentations outlined above was to establish primary facts from which, along with others, an inference of dishonest and fraudulent design may be drawn.

310 AFT alleges that in furtherance of the alleged arrangement Mr Blythe resigned and entered a consultancy with CAP in March 2013; NGV was registered on 26 April 2013 with Mr O'Leary as its director; Mr Blythe commenced work with NGV on 26 April 2013; on 29 April 2013 Mr Wilson resigned from AFT; on 6 May 2013 Mr Wilson commenced as an employee/consultant with NGV, and uploaded documents to the SkyDrive in the same month; then both Mr Blythe and Mr Wilson supplied documents to NGV which they had wrongfully retained from AFT.

311 It is said that from the combination of these facts it can be inferred that Mr Blythe, Mr Wilson and Mr O'Leary engaged in a dishonest and fraudulent design through the establishment of NGV and advanced their alternative interests and those of NGV over the interests of AFT.

312 Additionally, as evidence of the alleged arrangement made between Mr Blythe, Mr Wilson and Mr O'Leary in late 2012 or early 2013, AFT relies upon admitted telephone communications between Mr Blythe and others over the 14 month period between March 2012 and May 2013.[195] Those admitted telephone communications reveal a number of things:

• Mr Blythe regularly communicated (by phone or text) with Mr Donatucci, Mr Wilson, Mr O'Leary and Mr Himson over the entire period (except not beyond February 2013 with Mr Donatucci);
• Mr Blythe communicated most (by a long way) with Mr Donatucci over that period, possibly because Mr Donatucci was AFT's next most senior Melbourne employee;
• there was a noticeable spike in communications between Mr Blythe and Mr Donatucci in September 2012, and between Mr Blythe and Messrs Wilson, O'Leary, Himson and Sheather in October 2012, and thereafter solid communications with Messrs Wilson, Himson and Sheather in November 2012; and
• communications in December 2012 and January to February 2013 between Mr Wilson and those people dropped off and settled to more modest figures, except that there were more calls consistently to Mr Sheather over that period than there had been previously, building to a high number in about April 2013.

313 Between September 2012 and 18 February 2013 Mr Blythe was in the midst of his attempts to buy out Mrs Thompson's interests in AFT. His endeavours were most actively pursued in November, December, January and February when both he and Mrs Thompson engaged solicitors to press and respond to the buy-out issue.

314 In my view, it is most unlikely that any spike in communications in October and November 2012 between Mr Blythe and the various people I have mentioned was for the purpose of Mr Blythe planning his departure from AFT when, as is evident, he was pressing so hard to purchase and retain the company. My view of the evidence is that Mr Blythe made serious offers to buy the business, was very keen to do so, deployed resources and expenditure to try and achieve that goal, and had plausible grounds for believing that he would do so. He was informed that Mrs Thompson would consider sale in the new year, and he persisted then with his attempts. It was only when it became apparent that those attempts were likely to be consistently rebuffed, that he chose to take a different course.

315 So, between September and November 2012, Mr Blythe may well have been seeking advice from others about the various elements to include in a valuation of a company, and also more generally about how to undertake company valuation. He may even have been sounding out potential business partners in the AFT business. But I see no reason to infer that he was seeking to set up his departure from the very company he was pestering Mrs Thompson to buy, or to divert business from that company. Further, I do not interpret his actions as some sort of ruse to throw people off the scent as to his true ambitions.

316 It would not, of course, come as a surprise if Mr Blythe entertained thoughts of a 'plan B' should Mrs Thompson ultimately not agree to sell her shares to him, particularly once the point was reached in January when Mr Blythe invited her to also consider making an offer to buy his shares. That 'plan B' might have involved the notion of establishing a business with others or simply taking up a consultancy or series of consultancies. Such thoughts and considerations must have been almost inevitable. But acknowledging those as ideas that probably occurred to Mr Blythe, within a range of possibilities, does not cause me to alter my views about the improbability of there having been a dishonest design.

317 It is clear that, subsequently, Mr Blythe joined in business with Mr O'Leary through NGV. At some stage, Mr O'Leary's interest in participating with Mr Blythe in the CNG and LPG industry must have emerged and come to fruition. However, Mr Blythe's communications with Mr O'Leary had been steady all the way through the period for which the telephone communications have been tracked, with a spike around the time that Mr Blythe was looking to purchase AFT from Mrs Thompson. There is no reason to suppose that their communications between March and September 2012 had anything to do with joining in business together. In those circumstances, given Mr Blythe's desire to purchase AFT and Mr O'Leary's ultimate involvement in the industry with Mr Blythe through NGV, the more intense communications between Mr Blythe and Mr O'Leary in October and November are more likely to be explicable, for instance, because Mr Blythe was looking to Mr O'Leary as a potential partner if he purchased AFT, or perhaps merely for general business advice and support.

318 On the other hand, it is likely, in my view, that the explanation for Mr Blythe's communications in October and November of 2012 with Mr Sheather and Mr Himson in particular, and perhaps also Mr Wilson, was in connection with the preparation of the EfR request for information which was finalised in early December. There were also a number of other business opportunities coming to light at that time (discussed above) which plausibly explain the intensity of many of the communications

319 There is no unambiguous evidence of communications between Mr Blythe, Mr Wilson, Mr O'Leary, Mr Himson or Mr Sheather that signifies any untoward or dishonest preparation to establish a competing entity whilst Mr Blythe and Mr Wilson were still employees of AFT. Rather, all of the communications in evidence, and the pattern of communications between Mr Blythe and others, are readily explicable by the timing of Mr Blythe's attempts to purchase all of the shares in AFT and/or communications necessary to further the ordinary business of AFT. In short, there is no cogent reason to infer that dishonest and fraudulent preparations were being discussed when there are plentiful plausible and innocent explanations available.

320 That conclusion is not altered by having regard to the so-called misrepresentations alleged to have been made by Mr Blythe to Mrs Thompson about the status of business opportunities or the value of the company. I take into account the fact that Mr Bansal thought that Mr Blythe was presenting an unusually dim outlook for AFT in early 2013. But, I am not convinced that Mr Blythe was necessarily wrong about that picture. The company was struggling with its cash flow and had been for some time by early 2013. Mr Blythe had the best knowledge of what jobs were available and presented spreadsheets that attempted to represent the existing business and forecast income and expenditure.

321 Whether that picture was truly on the pessimistic side is difficult to assess. But if it was so obviously wrong, neither Mrs Thompson or Mr Bansal produced a competing set of figures which demonstrated a significantly different outlook, although Mrs Thompson was critical of some things that were left in or left out. In any event, all of this was occurring at a time when the parties were engaged in a process of potential sale: each had their motives for inflating or deflating the value within reasonable parameters. If Mr Blythe was putting forward a valuation on the low side, it only reinforces the conclusion that he was genuinely wanting to purchase the company and hopeful of succeeding. Mr Blythe consistently offered the option of obtaining an independent valuation or for Mrs Thompson to offer her own valuation. His offer was not taken up, but his behaviour was not consistent with a person anxious to shield Mrs Thompson from some supposedly more realistic picture.

322 In the result, I am not persuaded that Mr Blythe or Mr Wilson or Mr O'Leary, or any combination of them, engaged in discussions or came to some arrangement, prior to 18 February 2013, to establish a new enterprise and to divert business from AFT to that enterprise, or to 'run dead' on business opportunities for AFT in preparation for doing so. Accordingly, I reject the allegation that they engaged in a dishonest and fraudulent design.

Conclusions with respect to the eight businesses

• the nature of Mr Blythe's and Mr Wilson's employment with AFT and the duties owed to it;
• the circumstances of Mr Blythe's departure from AFT;
• the alleged improper use of confidential information;
• Mr Blythe's and Mr Wilson's involvements in the eight businesses the subject of AFT's claims; and
• their alleged arrangement with Mr O'Leary before they resigned from AFT to set up NGV and divert AFT's business to it,

it is now possible to draw final conclusions with respect to the breaches of fiduciary duty and statutory contraventions alleged in connection with each of the eight businesses.

324 I have previously outlined, at a relatively high level, the core equitable principles and the CA provisions relied upon.

325 Having rejected AFT's allegation of dishonest and fraudulent design based upon supposed conduct of Mr Blythe and Mr Wilson whilst still in employment with AFT, the remaining allegations of fiduciary breach and statutory contraventions essentially concern their conduct after they each resigned. In the case of Mr Wilson, the only applicable duty operating after his resignation was the prohibition found in s 183 of the CA against improperly using information.[196] Like Mr Wilson, Mr Blythe also remained subject to the s 183 prohibition.

326 But, in Mr Blythe's case, the potential for liability for breach of fiduciary duty for post-resignation conduct remained, although it is somewhat narrowed. For example, the scope for establishing a breach of the 'conflict rule' is narrowed because, in principle, that rule is attracted by actual or potential conflict between personal interest and the duty of fiduciary office, yet the office ceases when the fiduciary resigns.[197] Despite such narrowing, Mr Blythe was nonetheless restrained by his fiduciary duty, for a time, from diverting and then converting for himself or a company with which he was related, specific business opportunities for AFT that had matured to the requisite degree before he resigned. The time period over which that restraint operated; the required specificity of those opportunities; and the required degree of maturity of the opportunities, are all ingredients which combine to determine the effective scope or shape of the fiduciary duty applicable in the factual context of this particular relationship. I will state my views on those ingredients shortly.

327 I have concluded that Mr Wilson held no fiduciary office with AFT nor was he subject to the statutory duty of good faith (not being an 'officer' of the company). It follows that the residual scope for any liability as fiduciary essentially turns on the allegations that Mr Blythe impermissibly pursued business opportunities that had been maturing for AFT while he was still in employment.

328 In Courtenay Polymers v Deang,[198] Whelan J summarised the relevant principles emerging from the South Australian Full Court decision of Southern Real Estate on the subject of former directors or employees of a corporation usurping an opportunity, ripe for that corporation, after their resignation:

The principles which emerge from that decision, and which I adopt, are the following:

1. Obligations of loyalty owed by an employee are subsumed in the more onerous fiduciary duties owed as a director.

2. The statutory and fiduciary duties of directors exist side by side. There is both a statutory and a fiduciary duty on directors to act in the best interests of the company and not to promote their own interests or the private interests of others.

3. Taking steps which are against the company's interests with a view to resignation and subsequent involvement in a competing business will be, in the absence of full disclosure or other extraordinary circumstances, a breach of both statutory and fiduciary duty, even if those steps involve no misuse of confidential information.

4. The statutory and fiduciary duties of directors do not simply end at the point of resignation, but there is uncertainty as to when a former director might properly begin to compete with the company. Where a former director covertly puts everything in place so as to be in a position to compete with the company immediately upon resignation, and does in fact enter into competition immediately following resignation, there is no need to determine at what point the director might properly have commenced a competing business.[199]

329 Regarding the 'uncertainty' as to when a former director might properly begin to compete with the company, in Southern Real Estate Debelle J (with whom Nyland and Lander JJ agreed) remarked on the 'obvious tension' between the length of any period during which a former director remains subject to his or her fiduciary duties not to compete, on the one hand, and the freedom of competition on the other.[200]

330 Importantly, the authorities emphasise the need to assess the 'scope'[201] or 'shape'[202] of the fiduciary obligation by reference to the particular factual context in which it arises for decision. In Canadian Aero, Laskin J suggested a number of non-exhaustive factors which might helpfully bear upon fixing the scope or shape of the determinative principle in any given situation.[203] I have taken those factors into account.

331 From the preceding narrative of the history relations between Mr Blythe, Mr Wilson and AFT and the circumstances leading to their departures, I regard the following contextual factors as influential in determining the standard of loyalty, good faith and avoidance of conflict of duty and self-interest that should survive Mr Blythe's resignation:

(a) the AFT enterprise was, before Bruce Thompson's death, akin to a partnership in which two 'partners' contributed complementary experience and skills to form a productive whole;

(b) Mr Blythe's primary contribution to that enterprise, making him a good complement to Bruce Thompson, was his wide CNG and LNG industry relationships and his marketing skills;

(c) a feature of their partnership appeared to be a common direction for AFT in which Mr Blythe enjoyed the prospect that his time, energy, skills and industry experience would be used to advantage through positioning AFT to join with and leverage off larger-scale enterprises;

(d) the demise of Bruce Thompson and his replacement by Mrs Thompson (and her sons) did not reproduce the productive team that once was;

(e) Mr Blythe and Mrs Thompson had fundamentally different aspirations for AFT, producing a deadlock in decision-making and putting at risk their respective investments of capital, skill and expertise;

(f) Mr Blythe sought a rational solution to solve the deadlock by attempting to purchase Mrs Thompson's interest or selling his to her, but Mrs Thompson did not recognise the gravity of the situation and refused to entertain the idea of selling or buying, possibly due to an emotional attachment to the company moved by a sense of loyalty to her deceased husband;

(g) the business undertaken by AFT and opportunities available to it throughout 2011 and 2012 were, in the main, those that were fostered and developed through relationships between Mr Blythe and AFT's suppliers and customers;

(h) following a genuine, respectful and sustained effort on his part to try and work out a solution with Mrs Thompson, Mr Blythe resigned quite suddenly to preserve and exploit his own skills, vision and expertise within the CNG and LNG industry through the relationships he had built up with other participants in it;

(i) there is no evidence that Mr Blythe (or Mr Wilson) sought to prepare their departures from AFT, establish any new business to take over AFT's opportunities or to divert AFT businesses to themselves - in the case of Mr Blythe, his decision appears to have been made very close to 18 February after it finally became obvious to him that his efforts to persuade Mrs Thompson to negotiate had failed; and

(j) in those circumstances, Mr Blythe's resignation should not be construed as part of any planned scheme of disloyalty, bad faith or preference of self-interest over duty to AFT - rather, it was a forced choice to employ his business skills in a new way that would not be restrained by a business partner who refused to negotiate to resolve a deadlock.

332 Taking all of those matters into account, as I do, in my view, the scope of any restraint to be justly imposed upon Mr Blythe from competing with AFT after his resignation should be relatively limited. Such a restraint should operate to prohibit Mr Blythe, in the relatively short term, from using information obtained while at AFT to compete for clearly established customers of AFT's or for very specific opportunities so well developed that they were imminently close to being secured by AFT as its own.

333 None of the eight businesses fall into that category. I will briefly summarise why.

334 In relation to ATCO, about four and a half months after Mr Blythe left AFT, NGV quoted for and won a job for which AFT also quoted. In a 'starting from scratch' competition to re-quote for a job for which AFT had previously quoted when Mr Blythe and Mr Wilson were working for it, NGV succeeded. There was no proof of any improper use of information obtained because of Mr Blythe's or Mr Wilson's employment at AFT. The likely reason for AFT failing to win the job was that it sought some additional margin on its costing, no longer had a presence in Western Australia and was competing against the established, personal reputations of Mr Blythe and Mr Wilson.

335 In my view, Mr Blythe did not breach any fiduciary duty to AFT by competing for that work.

336 In relation to Tas Gas, about a month after he left AFT, Mr Blythe secured a consultancy with Tas Gas, one of AFT's clients with whom he had worked closely whilst employed at AFT. He made no secret of the fact, when he left AFT, that he intended to pursue various consultancies. The consultancy he obtained with Tas Gas was larger in nature and scope than the one that AFT had previously undertaken for that company, which had terminated before Mr Blythe left. The projects within the scope of Mr Blythe's new consultancy included those which he wanted AFT to pursue with Tas Gas or Brookfield but nothing had come of it in part because Mrs Thompson was not so enthusiastic about it. After Mr Blythe left, AFT continued to work for Tas Gas in a limited capacity operating a refuelling station but it did not itself show any interest in re-enlivening the consultancy it once held with Tas Gas or pursuing one of the kind which Mr Blyth obtained.

337 In my view, Mr Blythe did not breach any fiduciary duty to AFT by seeking and obtaining his consultancy with Tas Gas.

338 In relation to CCA, there was no evidence that NGV obtained any contract with CCA after Mr Blythe left AFT. There was evidence only that AFT failed to secure the renewal of a contract with CCA about a year after Mr Blythe left, in a competitive tender, after it shut down equipment at CCA's premises and probably caused disaffection from its former client.

339 In my view, Mr Blythe did not breach any fiduciary duty to AFT in relation to CCA.

340 In relation to the EfR program, 19 months after Mr Blythe left AFT a company within the Brookfield group, Brookfield Infrastructure, obtained a contact with the Victorian Government for the third stage of the EfR program. There was evidence that Mr Blythe assisted Brookfield Cogen, possibly as a project within his Tas Gas consultancy, to work towards obtaining that contract. There was also evidence that by 2016 NGV had supplied some equipment sourced from a former AFT supplier for the project. Although AFT had sought involvement with Brookfield Cogen in the EfR project as at late 2012, the ultimate contract obtained by Brookfield Infrastructure was too far removed in time, too much distinguished by additional processes, investigations and variations, and probably insufficiently similar to be considered as the consummation of the same opportunity presented to AFT in November 2012. There was no evidence of any improper use of any information by Mr Blythe acquired because of his employment with AFT.

341 In my view, Mr Blythe did not breach any fiduciary duty to AFT by his, or through him NGV's, involvement in this project.

342 In relation to other Brookfield opportunities, as with those already discussed there were no other opportunities for AFT shown to be ripe for it to secure with Brookfield. Further, there was no identified pursuit by Mr Blythe of such an opportunity

343 In my view, Mr Blythe did not breach any fiduciary duty to AFT in connection with any other Brookfield opportunity.

344 In relation to Gouge, AFT had held a five year agreement with Gouge to operate and maintain a refuelling station at Shepparton. It was due to end in 2013 and it engaged in a competitive tender to upgrade the station. It lost to an unidentified party whose quote was cheaper and who offered new rather than reconditioned compressors. There was no evidence of Mr Blythe's or NGV's involvement in obtaining the new agreement and, despite allegations, there was no evidence of Mr Blythe misusing information obtained by him whilst working at AFT.

345 In my view, Mr Blythe did not breach any fiduciary duty to AFT by any involvement with Gouge.

346 In relation to AGL, AFT's claim involved only an allegation that Mr Blythe prevented AFT securing an opportunity to do business with AGL, not that Mr Blythe or NGV pursued one. But the so-called business opportunity that AFT claimed it lost was most likely not a realistic opportunity at all. There was also some confusion between the limited single refuelling station opportunity which AFT claimed Mr Blythe concealed from it in late 2012, and a different, more expansive opportunity in relation to AGL refuelling stations along the eastern seaboard of New South Wales. AFT sought to involve itself in the latter in mid-2013 through a Canadian company, but failed. There is no causal connection between its loss of that opportunity and the alleged failure by Mr Blythe to bring to its attention the so-called opportunity for the single refuelling station in late 2012.

347 In my view, Mr Blythe did not breach any fiduciary duty to AFT in connection with AGL's single refuelling station proposal.

348 In relation to CAP, soon after leaving AFT Mr Blythe obtained a 12 month consultancy with this client of AFT. AFT had performed some vehicle conversion services for CAP in Western Australia and acted as distributor for some CAP parts, but there was little further evidence of what that relationship involved. After Mr Blythe resigned, AFT lost its service agreement with CAP when it closed its Western Australian office. Mr Blythe's consultancy with CAP was different in nature to the servicing agreement AFT had enjoyed; that is, his role was to represent CAP in its dealings with other parties, including with AFT itself. It was not comparable to any previous AFT arrangement or any potential deal on offer to AFT. Neither was there any improper use of information obtained because of employment with AFT.

349 In my view, Mr Blythe did not breach any fiduciary duty to AFT by obtaining a consultancy with CAP.

350 It follows from the foregoing that AFT has failed to establish any breach of fiduciary duty on the part of Mr Blythe in respect of him either obtaining or pursuing, or preventing AFT from obtaining, opportunities to do business with any of the eight companies.

351 The analysis thus far only leaves outstanding a conclusion about the established use of various pieces of information obtained by Mr Wilson during and because of his employment with AFT. I have rejected the argument that the contact data Mr Wilson emailed to himself was information that was confidential to AFT. Nor was its use after his resignation, if it was used, an improper use of information obtained because of his employment with AFT. But, the use of the plant registration certificate and the NGV compliance statement is in a different category. I find that the uploading of those documents to the SkyDrive to enable them to be inspected by a party (AGL) with whom NGV was contemplating doing business was an improper use of information obtained because of Mr Wilson's employment with AFT. By doing so, Mr Wilson breached s 183(1) of the CA.

352 But, other than proving the bare use of those documents by uploading them to the SkyDrive, nothing was shown to have come of that use. That is, no loss or damage was shown to have been caused to AFT from its use; neither was any gain established as flowing to either Mr Wilson, NGV or any other defendant. Accordingly, despite a breach of the CA having been proven no entitlement to relief arises from that contravention.

353 Because I have not found that any defendant engaged in a dishonest and fraudulent design or breached fiduciary duties owed to AFT, there is no need to consider allegations that other defendants knowingly assisted such design or breach.

354 Other than the improper use of the two documents I have just identified, which of itself led to no relevant loss or gain, the plaintiff has failed to establish any of its claims. Accordingly, it has failed to establish any entitlement to loss, damage or other relief.

355 From all of the foregoing, AFT's claims must be dismissed.

[1] There was a degree of uncertainty surrounding the identification of some of the business prospects, particularly insofar as they lay with Brookfield related entities.

[2] The issues are designed to collect as succinctly as possible the numerous, inter-related allegations made in the Third Amended Statement of Claim (3ASOC).

[4] Ibid [14], [15], [44], [45].

[5] Ibid [26], [29A], [32A], [36B], [39B], [40M], [43A], [43C], [43D], [43N], [44], [45], [51], [51A].

[7] Ibid [21], [22], [47], [48].

[8] Ibid [26], [29A], [36B], [39B], [40M], [43A], [43D], [47], [48].

[13] Ibid [52], [52A], [52B], [52C], [53], [54], [54A].

[16] Ibid [36C], [40K], [40N], [43AB], [43DA], [43O], [46], [49].

[19] [1984] HCA 36; (1984) 154 CLR 178.

[22] Canadian Aero Service Limited v O'Malley [1974] RCS 592 ('Canadian Aero').

[24] [2005] VSCA 36; (2005) 12 VR 513 ('Edmonds').

[27] AFT.405.005.0001. Note: Labels of this kind are Document IDs within the electronic court book.

[32] Mrs Thompson's evidence was that it occurred on Friday 25 February but Mr Blythe's notes record it being 28 February. Nothing turns on the date.

[46] Description given in AFT.107.001.0259.

[47] AFT.107.001.0201. 'NGV' is an acronym for 'Natural Gas Vehicles'.

[56] AFT.107.001.0034, AFT.107.001.0035.

[58] This was the version given by Mrs Thompson in evidence at T172.18. It was challenged in cross-examination. Mr Bansal recalls her querying whether there was yet any agreement in place for the sale: T590.7.

[70] AFT.102.001.3943, AFT.102.001.3944.

[73] AFT.107.l001.0016, AFT.107.001.0019.

[76] AFT.102.001.4306; NGV.001.001.7228, NGV.001.001.7227.

[86] AFT.107.001.0002, AFT.107.001.0003.

[97] See [105] above.

[106] MSC.020.004.0001 (wrongly labelled 'Search of Global Beat Pty Ltd').

[110] See [193] below.

[117] A 'cloud based' digital storage facility, access to which can be given by the account holder to third parties by 'permissions'.

[121] See [118] above.

[123] Indeed, it was not discovered by Mr Blythe which was a subject of complaint by AFT and response on the part of Mr Blythe: see T912-913.

[124] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298.

[126] As discussed in the next section.

[127] Wilson's Defence [21(c), (d)].

[129] See [288]-[289].

[135] AFT.301.001.5007; MSC.020.004.0001 at 0003.

[136] EXP.010.004.0001 SWW3 (page 30).

[143] NP Generations Pty Ltd v Feneley [2001] SASC 185; (2001) 80 SASR 151, 157 [19]-[20]; Prime Creative Media Pty Ltd v Vranjkovic [2009] FCA 1030, [15]; See also Dais Studio Pty Ltd v Bullet Creative Pty Ltd [2007] FCA 2054; (2007) 165 FCR 92, 112-113 [58] (Jessup J), quoting Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73, 87 (Gummow J).

[144] Krueger Equipment v Glen Cameron Storage [2008] FCA 803; (2008) 78 IPR 262, 284 [92].

[145] [2007] NSWCA 172; (2007) 73 IPR 326, 335 [40].

[146] Faccenda Chicken Ltd v Fowler (1987) 1 Ch 117, 136.

[147] AFT.200.001.1130 (an email chain which includes the emails of 29 and 30 November referred to in ensuing paragraphs).

[148] AFT.020.004.001 (see generally at [122] above).

[151] No objection was made to the hearsay evidence given by Malcom Thompson of what Mr Brown had said; presumably because, at that stage, it was contemplated that Mr Brown may be called to give evidence for the defendants.

[158] See discussion below under the heading 'Brookfield (other)'.

[162] See above at [58] and below at [231].

[163] See section headed 'Brookfield (other)' commencing at [268] below.

[164] See section headed 'Tension develops over Altona Station' commencing at [67] above.

[167] AFT.200.001.0005, AFT.301.001.5016.

[170] AFT.405.027.0003, AFT.405.027.0004.

[171] AFT.203.001.0001, AFT.203.001.0002.

[174] Extracted at [58] above.

[175] Specific document references were given in the pleadings against the allegations of NGV's contracts, but none of those documents were tendered. It is possible that they formed part of the body of documents which AFT withheld from tender during its own case and was unable to tender later because I ruled against AFT's application to reopen its case after the defendants decided not to call evidence: Advanced Fuels Technology v Blythe & Ors [2017] VSC 250.

[176] See [70], [99]-[101], [109], [113] above.

[183] NGV.001.001.1979. (The date given to the document in the CB index was 28 November 2013 although the letter itself was undated).

[185] See [72] above.

[188] Identified above at [137].

[190] See [187] above.

[194] Evidence Act 2008 s 140 (2); Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1997) ALJR 170.

[195] Amended Schedules 7 and 8 to the plaintiff's Notice to Admit: CRT.020.002.0001.

[196] Unlike ss 181 and 182, s 183 sets out a duty that continues after a person stops being an officer or employee of the corporation.

[197] Southern Real Estate Pty Ltd v Valerie Dellow & Wayne Arnold [2003] SASC 318, [35] ('Southern Real Estate').

[198] Courtenay Polymers v Deang [2005] VSC 318.

[200] Southern Real Estate [2003] SASC 318, [36].

[201] Edmonds [2005] VSCA 36; (2005) 12 VR 513; See [23] above.

[202] Canadian Aero [1974] RCS 592; See [23] above.

[203] Canadian Aero [1974] RCS 592.