Plaintiff v First Defendant Second Defendant

PRACTICE AND PROCEDURE - Appeal from an Associate Justice - Application to the Associate Justice for leave to join two companies in liquidation - Whether serious question to be tried - Issue as to when causes of action alleged by grower accrued - Limitation issues should be determined at trial - Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 and Magman International Pty Ltd v Westpac [1991] FCA 41; (1991) 32 FCR 1 applied.

1 Lisa Gayle Shellie (Mrs Shellie) participated in a managed investment scheme called the Great Southern Plantation 2003 Project (the Project). In 2009, her interest in the Project was converted to shares in Great Southern Limited (GSL) . To finance her participation, she borrowed moneys from Great Southern Finance Pty Ltd (GSF) (a wholly owned subsidiary of GSL) under two loans. Subsequently, the loans were assigned by GSF to ABL Nominees Pty Ltd (ABL).

2 In May 2009, the Great Southern Group of companies collapsed. Administrators were appointed to GSL, GSF, and Great Southern Managers Australia Limited (GSMAL) (a wholly owned subsidiary of GSL, and the responsible entity of the Project). Those companies have since entered liquidation. In March and April 2010, ABL called up Mrs Shellie's loans. She failed to pay and ABL sued Mrs Shellie on the two loans in the County Court of Victoria.

3 On 8 June 2012, ABL entered judgment in default against Mrs Shellie in the County Court. Mrs Shellie had failed to comply with orders made by the County Court on 25 May 2012. That judgment was set aside on 7 August 2012, with conditions set by his Honour Judge Anderson. One of the conditions was that Mrs Shellie seek leave under the Corporations Act 2001 (Cth) (the Act) to counterclaim against GSMAL and GSF.

4 In this Court, Mrs Shellie sought leave under s 471B of the Act to issue proceedings against the defendants, GSF and GSMAL. The application for leave was heard by an Associate Justice and refused on 26 February 2013. Mrs Shellie appeals against the decision of the Associate Justice.

5 Before the Associate Justice, Mrs Shellie brought her claim under s 471B. The learned Associate Justice ruled on her claim on the basis of that section. In Mrs Shellie's written submissions before the Associate Justice (which were adopted by Mrs Shellie on appeal before me), Mrs Shellie conceded that her claim should have been brought under s 500(2) of the Corporations Act. GSMAL's written submissions before the Associate Justice stated that "nothing turned on" Mrs Shellie's erroneous pleading of her claim under s 471B.

6 As mentioned above, GSMAL and GSF are subsidiaries of GSL. GSMAL was the responsible entity of a number of managed investments schemes promoted by the Great Southern Group of companies in which members (identified as growers) participated in a scheme to grow and harvest timber in forestry plantations. Under the schemes, a grower would acquire an interest in a woodlot where trees would be grown and harvested on the grower's behalf. To that end, the grower would enter into a land management agreement with GSMAL as the responsible entity to manage and harvest the woodlots acquired (along with other growers' woodlots).

7 The scheme that Mrs Shellie participated in provided that the management expenses would be met by the responsible entity and recouped from the harvest proceeds. The harvest was to occur sometime after a 10 year period. As discussed below, finance for growers to make their initial application fee was also offered by the Great Southern Group through GSF. Repayments were to be made over the life of the loan and fully discharged from the harvest proceeds. The scheme allowed an upfront tax deduction of the application fee to participate in the scheme and deduction of interest payments on the loans. As mentioned above, the managed investment scheme offered by GSMAL in which Mrs Shellie participated was the Great Southern Plantation 2003 Project.

8 On 1 July 2003, GSF loaned two sums of money to Mrs Shellie, $59,267.63 and $53,092.37, pursuant to two loan deeds, with the said loans subsequently assigned by GSF to ABL. Mrs Shellie has not paid the amounts outstanding under the loans and ABL accordingly has brought a proceeding in the County Court against Mrs Shellie for full repayment of the loans.

9 Before the Associate Justice, Mrs Shellie produced a draft counterclaim upon which she wishes to proceed, and relied on three affidavits:

10 Mrs Shellie alleges that the product disclosure statement (the Prospectus) issued by GSMAL in respect of the 2003 plantation scheme omitted information that the Act required to be included and, by reason of these omissions, the Prospectus was defective within the meaning of s 1022A(1) of the Act.

11 Mrs Shellie further alleges that GSF was involved in the preparation of the Prospectus and directly or indirectly caused or contributed to it being defective.

12 Mrs Shellie alleges that - had she been informed that the information that was omitted from the product disclosure statement - she would not have executed an application form for finance in May 2003, nor agreed to pay the application fees and insurance costs, nor entered into the loan deeds.

13 The proposed counterclaim alleges that the loss and damage suffered by Mrs Shellie because of the omissions in the Prospectus is:

comprised of all amounts paid by Mrs Shellie and all liabilities incurred or to be incurred by her under the GSP Project documents (arising from Mrs Shellie's execution of the Woodlots Application Form and the Application) and the Loan Deeds, including:

(a) interest paid on the loan;

(b) fees and insurance costs;

(c) liability under the Loan Deeds to pay the Loans.

14 Mrs Shellie seeks an order pursuant to s 1022B(2)(c) of the Act that ABL and GSF repay her all amounts paid by her to ABL and GSF under the loan, together with interest and fees, including insurance costs sustained by Mrs Shellie as a consequence of her participation in the project. She also seeks an order that GSMAL indemnify her for all payments that she may be obliged to make to ABL under the loan deeds. As against ABL and GSF, Mrs Shellie also seeks an order pursuant to s 1022C(1)(a) of the Act declaring that the Loan Deeds with GSF are void and/or unenforceable. Mrs Shellie seeks other relief against ABL, GSF and GSMAL, and Messrs Young and Rhodes (former directors of the Great Southern Group of companies.)

Exhibit JAH1 is an ABL record showing loan repayments by Mrs Shellie, including payments made well before 2007. Mr Saker's affidavit related to whether conditions should be attached if leave to institute proceedings was granted against GSF.

16 Section 471B of the Act provides:

While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with -

(a) a proceeding in a court against the company or in relation to property of the company; or

(b) enforcement process in relation to such property;

except with the leave of the Court and in accordance with such terms (if any) as the Court imposes.

17 Section 500(2) of the Act provides:

After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

18 The issue raised in the appeal is whether or not the Court should have granted Mrs Shellie leave to counterclaim against GSMAL and GSF, as she proposes to do. For the reasons that follow, I have found that the appeal should be allowed and that Mrs Shellie be granted leave as sought.

Mrs Shellie's participation in Great Southern Plantations

19 Shortly prior to the end of the 2002-2003 financial year, Mrs Shellie's husband, Chris, was dealing with their then accountant, David Wilson of David Wilson and Co, concerning their taxation affairs and the preparation of their taxation returns. Mrs Shellie and her husband each had individual returns, as well as a return for the business they then conducted.

20 Most of Mrs Shellie's dealings with respect to accounting and tax matters were organised by her husband.

21 Mr Wilson suggested to them that they should investigate the possibility of investing in a Great Southern project. He said that this was because they were a good organisation and the investment would assist with a tax deduction for the 2002-2003 tax year. Mrs Shellie says that she believed that this suggestion was made to her husband at a meeting between them and later relayed to her by her husband.

22 It was Mrs Shellie's understanding that Mr Wilson learned about Great Southern projects by attending promotional activities conducted by representatives of Great Southern. Mrs Shellie is not aware of the full details of these promotional activities, but she believes that they were held on at least two occasions in Sydney some time prior to when the idea of the Great Southern project was first mentioned by Mr Wilson to her and her husband. Mrs Shellie says that she has subsequently learnt of these activities in discussions with her solicitor, Mr Bruce Dennis.

23 Mrs Shellie and her husband expressed their interest in such an investment to Mr Wilson, and Mr Wilson made arrangements for a representative from Great Southern to contact her and her husband.

24 Mrs Shellie's recollection is that a person called Allen Walker, who told her that he was a Great Southern representative, made an appointment and called at her home in May 2003 to explain to her the Great Southern Plantations 2003 Project that was then available for investment. She cannot recall the full details of the meeting, but she recalls that the possibility of investing in the Great Southern project was discussed, including the details of the amount she and her husband would invest and the likely return on the investment, as well as the taxation benefits to them. Mrs Shellie's husband was present at that meeting.

25 After Mr and Mrs Shellie's meeting with Mr Walker, he wrote a letter to them about the investment. The letter is headed "Great Southern Securities Pty Ltd" and is addressed to both Mr and Mrs Shellie. He thanked them for the opportunity of meeting with them on 8 April 2003 to discuss "the Great Southern Plantations Ltd strategy for use in the elimination of debit loan account balances and avoidance of Division 7A consequences". The letter included a heading "Re Shellies/Tilecraft Loan Accounts". The letter makes reference to the fact that Mr Walker had been advised by David Wilson, "It is intended for the company to pay you both dividends before 30 June 2003 sufficient to extinguish your loan accounts with the company".

26 The letter confirms that Mr Walker, an authorised representative, had provided them with copies of:

(1) Great Southern Securities Pty Ltd Advisory Services Guide;

(2) Great Southern Plantations Prospectus dated 7 February 2003;

(3) Great Southern Plantations 2003 Project Summary; and

(4) CD - Great Southern Plantations 2003 Project Overview.

27 The letter said, "Given the projected income levels and taxes paid as advised by David, set out on the attached schedules are estimates of your respective investments, cash flow, tax savings and loan repayments per annum should you decide to proceed".

28 Mr Walker wrote that he looked forward to meeting to conclude the matter, at which time Mr and Mrs Shellie would need to complete:

(1) the application form at the back of the prospectus;

(2) the direct debit form at the back of the prospectus;

(4) the general securities - no personal securities recommendation given form.

29 Mrs Shellie says that Mr Walker provided her and her husband with several documents as listed in the letter. These documents included the Great Southern Plantations Prospectus dated 7 February 2003, the Great Southern Plantations 2003 Project Summary, and a CD. She says that she considered these documents and was very interested in the recommendation of Mr Wilson and Mr Walker.

30 Mrs Shellie says that they were provided with individualised schedules setting out details of the proposed level of their investment, the projected results and the investment details. The schedules are described as Great Southern Plantations 2003 Investment Models. There was also a cash flow summary prepared for Mrs Shellie showing the table for Years 0 through to 10 (that is, from 2003 through to 2013) of cash payments and receipts. The calculations were made on an after tax basis, after taking into account tax savings. The first year tax deduction was stated to be $111,000, which gave a tax saving of $53,000-odd dollars, the loan payments being $11,100, making a cash surplus for that year of $42,735. It is clear from this that the loan was an intrinsic part of the calculations.

31 Mrs Shellie says she took particular note of the schedules provided to them by Mr Walker, as they appeared to show that in addition to obtaining a tax deduction Mr and Mrs Shellie would eventually receive sufficient returns to produce a good return on their investment (taking into account the borrowing).

32 Mrs Shellie said that, on the basis of the schedule in the documents that had been provided to her, she considered that the Great Southern Plantations 2003 project appeared to be a reasonably sound and reliable investment.

33 As the 2002-2003 financial year was drawing to a close, Mr and Mrs Shellie were under some pressure to complete the investment. On or about 28 May 2003, Mr and Mrs Shellie completed and submitted the application for the investment and finance.

34 Mr and Mrs Shellie agreed to purchase 37 woodlots for a cost of $111,000. They applied for a loan of the full purchase price of $111,000. Under the cash flow summary provided to them, it appears that payments were to be made each year and in Year 10 they would receive a substantial sum from the harvest of their woodlots. The evidence before me does not include the Prospectus, which presumably would have given details of the fees payable each year. There is no evidence of whether the woodlots could have been sold or not (and if so, at what value).

35 One of the forms was headed "Application for Term Finance Principal and Interest Loan". The form said that it should be submitted with the investment application. The form was headed "Great Southern Finance Pty Ltd", although it bore a logo which was common to that also used by GSMAL.

36 Under the form, Mrs Shellie declared that she had made an application to GSMAL to enter into a "Lease/Forest/Right and Management Agreement" in respect of Great Southern Plantations Project Managed Investment Scheme for the number of woodlots as specified in the application.

37 Mrs Shellie says that shortly after she and her husband signed the application for the investment and finance, she received a letter dated 4 June 2003 from Christine Cook, the administration manager of GSMAL, confirming details of their investment. The letter confirmed that they had invested in 37 woodlots at a cost of $111,000, with a zero deposit, and a loan amount of $111,000.

38 On or about 12 June 2003, Mr and Mrs Shellie received a letter from Christine Cook enclosing a replacement prospectus dated 12 June 2003, inviting them to read the replacement prospectus, but assuring them that "There are no material changes to the structure, costs, features or tax deduction available from the prospectus".

39 By letter dated 9 July 2003, Mr and Mrs Shellie were advised by Bruno Romeo, the Finance Manager of GSF, that their loan application was being processed and with their first payment due on 15 July 2003.

40 At the same time the letter from Mr Romeo was received, a bank account direct debit authority was set up on their bank account for payments to be debited to pay the instalments due upon the loan.

41 On or about 18 July 2003, Mr and Mrs Shellie received a letter from John Young, managing director of Great Southern Finance Securities Pty Ltd (GSF) advising them about tax information in relation to their investment in the woodlots.

42 Mr and Mrs Shellie did not sign any loan documents in May 2003. In fact, they signed the loan documents in December 2007, after Great Southern realised that the loan documents had not been signed by them. They received a letter dated 5 December 2007 from a Chris Kolzan of GSF, enclosing the loan documents for their signature. They signed the documents and returned them to Mr Kolzan.

43 All the documents provided to them by Mr Walker and the Great Southern companies were very positive about the investment, both before and after they applied to invest in GSMAL. On 28 July 2003, Mr Walker wrote to Mrs Shellie stating that Great Southern had had a record year, with investment and projects up 98% over the last year with a total of $109 million. It also stated that investment in Great Southern projects could play an important part in minimising tax and improving cash flow. Mrs Shellie took this as confirmation that her investment decision was a good one.

44 Christine Cook wrote to Mr and Mrs Shellie on 25 August 2003, advising details of the issue of the certificate for the woodlots and the planting of the woodlots. She also advised, however, that returns over the 2003 project would be average to maintain a consistent return to growers.

45 The investment in the Great Southern project was expected to have significant tax benefits for Mrs Shellie. She and her husband received a letter from GSMAL dated 18 July 2003, providing details of the Product Rulings issued by the ATO in respect of their investment.

46 In March 2009, Mr and Mrs Shellie sought to negotiate with GSF to assist with a loan repayment plan to assist with liquidity issues in their business. She can recall that this arrangement was dealt with by Karen Matthews of GSF.

47 Also in March 2009, Mr and Mrs Shellie received a pro forma letter from Bruno Romeo of GSF dated 13 March 2009, advising them that their investment had been converted into GSL shares. She said she did not understand the contents of this letter and did nothing about it, as best she could recall.

48 In April 2009, Mr and Mrs Shellie were advised, in a letter dated 30 April 2009 from Bendigo and Adelaide Bank Limited (the bank), that the management of their loans had been transferred to the bank. The letter pointed out, among other things, that "The change would allow Great Southern to concentrate on its core business" and that "This is a number of initiatives Great Southern is pursuing aimed at strengthening the company positioning it for future growth".

49 In about May 2009, Mrs Shellie became aware that the Great Southern companies were in financial difficulty and recalls reading in the media about the companies going into receivership. It was from this time that she first realised that her investment might not produce the anticipated return, and she could have difficulty servicing the loan taken out to finance the investment. She says that in light of what had been stated in the letter from the Bendigo and Adelaide Bank, she was surprised by such news.

50 Notification of the appointment of receivers and managers to the companies in the Great Southern group of companies was advised to her by a letter dated 19 June 2009 received from McGrath Nichol.

51 Mrs Shellie also received a letter from the bank dated 1 October 2009, advising that the bank had been investigating ways to promote their interests as a grower/investor in the Great Southern Managed Investment Scheme and enclosing a fact sheet about the situation. The fact sheet sent by the bank said, amongst other things, that significant assets were held within the schemes and that the Great Southern receivers were engaging with companies interested in bidding to take over the schemes or acquire scheme assets. The bank said it was therefore premature to assume investors would receive no further value for their investment.

52 After the appointment of receivers, Mr and Mrs Shellie received a letter from Brian Bourke dated 9 October 2009, stating that, "As we all know the shares in Great Southern are worthless and the company has collapsed".

53 Mrs Shellie says that she has learnt from inquiries by her solicitor that both GSF and GSMAL were placed in liquidation by a creditors' resolution on 19 November 2009. Mrs Shellie says that as a result of the apparently bad news about the companies within the Great Southern group (including GSF and GSMAL), which Mr and Mrs Shellie had received from May 2009 onwards, she became pessimistic about their investment. Mrs Shellie says that since about May 2009 she believes the value of the investment is nil or of little value, and that she will not receive any return on her investment and will suffer considerable loss as a result.

54 Mrs Shellie says that the plaintiff in the County Court proceeding began pressing for repayment of the loans in 2010, and issued proceedings on 8 August 2011.

55 Mrs Shellie alleges that she offered to purchase woodlots from GSMAL and applied to GSF for finance to enable her to complete the purchase.

56 The proposed counterclaim alleges that material facts were omitted from the Prospectus and were not disclosed to Mrs Shellie. In particular, it is alleged that forecast harvest yields and projected returns were inaccurate and were insufficient to meet projected returns to investors, at no time had GSMAL and GSF ever achieved or was likely to achieve certain harvest yields, and that GSL and GSMAL were likely to become insolvent. The claim alleges that these matters were known, would have been known, or ought to have been known to GSMAL and/or GSF.

57 These matters are defined as the "Prospectus Omission and Non-Disclosure" claim. The claim alleges that the Prospectus Omission and Non-Disclosure was information about a significant risk associated with the investment in the GSP 2003 Project which fell within the scope of ss 1013C, 1013D and 1013E of the Act, being information that might reasonably be expected to have a material influence on the decision of a reasonable person, as a retail client, whether to acquire an investment in the Project, within the meaning of s 1013E of the Act. Alternatively, it is alleged that this was information that constituted a material change to a matter or significant event that affects a matter being a matter that would have been required to be specified in the Prospectus by GSMAL and/or GSF, prepared on the day before the change of event occurred within the meaning of s 1017B of the Act.

58 The claim alleges that by reason of those matters and the Prospectus Omission and Non-Disclosure, the Prospectus was defective within the meaning of s 1022A(1) of the Act.

59 The claim alleges, inter alia, that GSMAL and GSF contravened s 1022B(1) of the Act.

60 The claim alleges that had Mrs Shellie been informed of the Prospectus Omissions and Non-Disclosure, she would not have invested in the scheme and entered into the Loan Deeds.

61 The claim alleges that because of the foregoing, Mrs Shellie is entitled recover loss and damage from GSMAL and/or GSF pursuant to ss 1022B(2)(c) and 1022B(2)(e) of the Act and is also entitled to relief afforded to her by operation of s 1022C of the Act against ABL.

62 The claim says that as a result of these omissions and non-disclosure Mrs Shellie suffered loss and damage. The particulars alleged that the loss and damage comprised all amounts paid by and liabilities incurred by Mrs Shellie including interest, fees and liability to pay the loan.

63 As pleaded, some of the loss and damage was not suffered until payments were made. Some payments were made by Mrs Shellie in 2011.

64 Section 1022B(2)(2)(c) and (e) relevantly provides:

In a situation to which this section applies, if a person suffers loss or damage:

...

(c) if paragraph (1)(c) applies - because the disclosure document or statement the client was given or sent was defective; or

...

(e) if paragraph (1)(e) applies - because of the contravention in that paragraph;

the person may recover the amount of the loss or damage by action against the, or a, liable person ...

65 Section 1022B(6) provides that an action under sub-section (2) may be begun at any time within 6 years after the day on which the cause of action arose.

66 The central issue for determination thus being: precisely when did the cause of action alleged by Mrs Shellie arise? The cause of action being, in substance, a claim by Mrs Shellie that she suffered loss or damage because the disclosure statement given to her was defective, with the claim that Mrs Shellie would not have purchased the 37 woodlots or borrowed the $111,000 to purchase them if the Prospectus was not defective.

67 I respectfully agree that the learned Associate Justice correctly identified the test to be applied to determine whether leave should be given under s 471B as being set out in the Full Federal Court decision in Vagrand Pty Ltd (in liquidation) v Fielding,[1] where the Court said:

Upon a close reading of the relevant authorities, it is apparent to us that the courts have not in fact required applicants for leave to demonstrate a prima facie case against the company in liquidation, in the technical sense of that term. They have required to be affirmatively satisfied that the claim has a solid foundation and gives rise to a serious dispute. Having regard to the course actually taken by the courts, the term "prima facie case" is misleading. Perhaps it should be avoided in the future.

The test which has actually been applied is akin to that now used in considering whether interlocutory relief should be granted: "a serious question to be tried". See Castlemaine Tooheys Limited v. The State of South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153 where Mason ACJ made it clear, with reference to the very same question which arose in the context of an interlocutory debate, that the test of "a serious question to be tried" is generally to be preferred to that of "a prima facie case". It is appropriate that the same standard of proof of the merits should be required for each of these forms of relief. In a particular case an applicant may need both orders. We would think it anomalous if an applicant had to meet a higher requirement merely to commence an action than that necessary to obtain an order potentially imposing a substantial burden on the respondent.[2]

68 In their Written Submissions, GSMAL referred to Oceanic Life Ltd v Insurance & Retirement Planning Services Pty Ltd (in liq),[3] in which it was said that one of the factors to be considered in exercising the discretion under s 500(2) is "[w]hether there is a substantial question to be tried."[4] As is apparent from the fact that Vagrand was cited with approval for this proposition, there is a significant overlap in the approach to be applied for leave to proceed against a company in liquidation, regardless of whether leave is sought under s 471B or s 500(2) - I assume this is why GSMAL submitted that "nothing turned on" the section which leave was being sought under. Accordingly, the first inquiry is whether there is a substantial or serious question to be tried.

69 The learned Associate Justice correctly observed that pursuant to s 1022B(2) of the Act, a person may recover loss or damage where a defective disclosure document or statement was given to that person. Pursuant to s 1022B(6), that action "may be begun at any time within six years after the day on which the cause of action arose."

70 His Honour correctly observed that pursuant to s 1022C of the Act, a court, in addition to awarding loss or damage under s 1022B(2), if it thinks it is necessary in order to do justice between the parties, may make an order declaring a contract void which was entered into by a person referred to in sub-section 1022B(2) for, or relating to, a financial product or a financial service. The six year limitation period in s 1022B(6) also applies to a claim for orders under s 1022C.

71 His Honour turned to the submission of GSMAL that the cause of action under s 1022B(2) has two elements, a contravention of one of the provisions of the Act specified in s 1022B(1) and the suffering of loss or damage by the plaintiff because of that contravention. GSMAL asserted that even assuming the relevant contravention is proved, the limitation period in s 1022B(6) commenced to run from the time when the loss and damage was first suffered by the plaintiff.

72 His Honour said that the plaintiff submits that the loss and damage involved here was caused by the contingent matters (referred to in the disclosure document and associated documents) becoming incapable of fulfilment, and that the plaintiff in the counterclaim suffering loss as a result (such as her being unable to fulfil her loan commitments). The plaintiff submits that the point in time when such loss became apparent was not until 16 May 2009, when GSF and GSMAL resolved to appoint administrators under the Act.

73 His Honour referred to the High Court of Australia's decision in Wardley Australia Ltd v Western Australia,[5] where the Court held in a case brought under s 82 of the Trade Practices Act 1974 (Cth) (Trade Practices Act) that the cause of action does not accrue until actual loss or damage is sustained.[6]

74 His Honour said that it was clear from Wardley that the plaintiff must plead when the actual loss was sustained, not when she knew it was sustained. Furthermore, his Honour said that the plaintiff submitted that the pleading does not distinguish between when the application forms were signed and the loan deeds were entered into and when the loss actually occurred. His Honour said that whilst the plaintiff had submitted that the loss had occurred after the contract was entered into, this had not been pleaded, nor had any evidence been put before the Court in that regard.

75 His Honour said that the Court adjourned a prior hearing so that the plaintiff could put evidence before the Court demonstrating when the loss occurred. Whilst an amended pleading referring to when the loss accrued may have been adequate, the plaintiff had chosen not to so amend her pleadings. The Court found that it was up to the plaintiff to show that she had a solid foundation which gave rise to a serious dispute, and that she had failed to do so. His Honour further found that as the draft counterclaim did not disclose an arguable cause of action, the application against GSMAL should fail.

76 Before the Associate Justice, Mrs Shellie had asserted that she did not sign the loan documents in May 2003, but did so in 2007, thus bringing her claim within the limitation period. The Associate Justice rejected this submission, finding that it was irrelevant at what point she signed the loan documents, as the loans were made in June 2003, and the subsequent deed merely formalised the terms of the loans.

77 His Honour referred to the proposed counterclaim against GSF, alleging that GSF authorised GSMAL to include the prospective statement relating to the availability of finance. His Honour could not identify a pleading relating to GSF's involvement in the preparation of the Prospectus, nor that it contributed to any defect in it. His Honour found that all that was pleaded was that GSF authorised uncontroversial statements to be contained in the Prospectus as to the availability of finance. Accordingly, his Honour held that there was no solid foundation upon which Mrs Shellie could bring the claim as no evidence had been filed by Mrs Shellie demonstrating that there was a cause of action.

79 Ground 1 of the Notice of Appeal alleges that the learned Associate Justice erred in refusing the application, but does not identify any error that his Honour made in so refusing. I assume the error is dealt with in the subsequent grounds.

80 Ground 2 alleges that the learned Associate Justice erred in his application of the principles in Wardley in making certain findings in respect of the limitation issue when this matter does not present the clearest case.

81 In oral submissions, Mr Dennis (solicitor for Mrs Shellie) argued that when, as in this case, someone invests in a project which is a ten year running project, there may well be various points in time when loss may crystallise and time starts to run.

82 Mr Dennis further submitted that the position of the Associate Justice (being that the loss occurred when the initial application to invest was signed and therefore statute barred by the time Mrs Shellie sought to bring her counterclaim) was incorrect and should be a matter for the trial judge.

83 Mr Dennis submitted that damage may have crystallised when:

(b) the administrators were appointed on 9 May 2009;

(d) the Great Southern Group was put into liquidation.

84 GSF submits that Mrs Shellie's claim is time-barred if the allegations in the draft counterclaim were proven to be correct, and thus there would be no useful purpose to the claim. GSF submits that the learned Associate Justice correctly accepted that on the face of the pleading the loss was constituted by the matters which occurred immediately upon entry into the loan transactions, being interest paid on the loan, fees and insurance and "liability under the Loan Deed to pay the loan."

Relevant authorities on when loss and damage is incurred

85 The relevant authorities establish that there are well-established rules for determining when a plaintiff first suffers loss or damage in tort, contract, and generally at common law. The authorities also establish that when a plaintiff first suffers economic loss and damage under a statutory cause of action depends on a proper construction of "loss and damage" within the context of the relevant Act. As discussed below, the High Court of Australia addressed that issue under s 52 of the Trade Practices Act in Wardley, whereas the issue currently before me relates to the enlivening of the power under s 1022C of the Act to order a contract void.

86 In my opinion, the following authorities lead me to conclude that the loss and damage that Mrs Shellie alleges she suffered did not occur when she first acquired her interest in the 37 woodlots in May 2003.

87 In this case, the plaintiff executed a mortgage in the presence of her solicitors over her freehold property as security for a loan made by a company to her son, who subsequently became bankrupt. Following a demand under the mortgage, she paid the loan. Subsequently, she sued her solicitors alleging negligence in failing to properly advise her when the mortgage was executed. The issue before the Court of Appeal was whether or not she had suffered loss and damage when the mortgage was signed or when she was called on to pay and meet her son's debt to the company, as the former was outside the limitation period when she sued her solicitors.

88 Lord Justice Dunn (with whom Cairns LJ agreed) held that as soon as the plaintiff executed the mortgage she not only became liable under its express terms, but more importantly the value of the equity of redemption of her property was reduced. His Lordship said that before she executed the mortgage deed, she owned the property free from encumbrances; thereafter, she became the owner of property subject to a mortgage. His Lordship said that when she executed the mortgage she suffered a quantifiable loss, and as from that date her cause of action against her solicitor was complete, because it was at that date she had suffered damage.[8]

UBAF Ltd v European American Banking Corporation****[9]

89 In UBAF Ltd, the plaintiffs (an English bank) were induced by the defendants (an American bank) to participate in two loans to a shipping group. The plaintiffs alleged that the defendants misrepresented that loans were attractive financing of a sound and profitable group. At issue was whether the plaintiffs suffered damage when the loan was made. The plaintiffs' case was that they would not have made the loans if they had known the respects in which the representations were inaccurate. The defendants argued that at the very moment of entering into the contract, the plaintiffs must have suffered damage.

In our judgment, this bare proposition in not self-evident. The plaintiffs are suing in tort - the tort of negligence. To establish a cause of action they must establish not only a breach of duty, but that breach of duty occasioned them damage. This is axiomatic. It is possible, although it may be improbable, that, at the date when the plaintiffs advanced their money, the value of the chose in action which they then acquired was, in fact, not less than the sum which the plaintiffs lent, or indeed even exceeded it.

This must depend on evidence. The mere fact that the innocent but negligent misrepresentations caused the plaintiffs to enter into a contract which they otherwise would not have entered into, does not inevitably mean that they had suffered damage by merely entering into the contract.[10]

Keen Mar Corp Ltd v Labrador Park Shopping Centre Pty Ltd****[11]

91 In Keen Mar, Pincus J of the Federal Court of Australia considered a limitation issue under a s 52 claim. A tenant in a shopping centre alleged that it had suffered loss and damage as it was induced by misleading and deceptive representations by the landlord to enter into a lease of premises in the shopping centre. The landlord alleged that the claim was brought outside the limitation period (any time within 3 years after the date on which the cause of action accrued).

92 Justice Pincus considered whether the cause of action accrued when the lease that committed the applicant was executed, the date of the occurrence of the various losses constituted by expenditure of moneys, or the date upon which the applicant became aware that he had been misled.

93 Justice Pincus referred to Forster and said that by analogy the execution of the lease and the execution of the mortgage in Forster seem reasonably close. His Honour said, "Although until registration each lease was ineffective in law (as opposed to equity), the lessees had by execution of it committed themselves and undertaken obligations."[12] His Honour said that if Forster is right and its principle is applied to suits under s 52 of the Trade Practices Act, there was a cause of action in existence when the lease was signed because there was then a quantifiable loss.

94 In Hawkins, the High Court considered a claim in negligence for economic loss and considered when the cause of action accrued. Justice Gaudron said that in determining when the cause of action accrues, it may be relevant to consider "the precise interest infringed" by the negligent act or omission. Her Honour gave several examples, and said:

... if the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible.[14]

Economic loss, on the other hand, imports loss sustained by a juristic entity in relation to the assets or liabilities of that entity. The various and complex economic relationships which are a feature of present day economic organization suggest that loss may manifest itself in various forms, and it is for this reason that there may be occasions when it is necessary to identify precisely the interest which has been infringed.[15]

Jobbins v Capel Court Corporation Ltd****[16]

95 In Jobbins, the Full Court of the Federal Court (Davies, Burchett and Hill JJ) struck out a statement of claim under s 52 of the Trade Practices Act as being out of time where the purchaser of an investment in a film alleged that he had been induced to buy the investment on the basis of misleading and deceptive representations. The Court held that the applicant suffered damage immediately upon his entry into the agreement and the making of the payment thereunder. Their Honours said that according to the pleadings the investment lacked the represented qualities; as a consequence it was from the outset less valuable than it should have been.

96 The applicant said that the loss was not suffered until a later date when the represented qualities proved to be false. The Court poetically said that that what happened then was "merely a reaping of the tears sown with the crop." Their Honours said the loss was analogous to Keen Mar, where Pincus J held that misrepresentations leading to the acceptance of a lease resulted in a loss at a time no later than the execution of the lease.

SWF Hoists & Industrial Equipment Pty Ltd v State Government Insurance Commission****[17]

97 In this case, the insured sued its insurer for loss suffered as a result of a misrepresentation as to the extent of the indemnity or liability coverage provided by a proposed contract of insurance. Justice Von Doussa of the Federal Court held that under the policy, the actual loss (as opposed to a mere potential for loss) occurred only when the insured was called on by a third party to make payments against which it would have been entitled to be indemnified by the insurer under the contract as represented to the insured. When the events entitling the third party to make the demand for payment occurred and when the insurer indicated, prior to making of that demand, that it would not indemnify the insured against any such demand, there was no more than a potential loss.[18]

Magman International Pty Ltd v Westpac****[19]

98 Magman involved an appeal to the Full Court of the Federal Court (Black CJ, Beaumont, Gummow, von Doussa and Hill JJ) from a decision of Sheppard J. It is important for the critical approach it took in deciding a preliminary limitation defence before trial, and that its approach was endorsed by the High Court of Australia in Wardley.

99 The case concerned a foreign currency loan. The appellants borrowed Swiss Francs through Westpac. The loans turned sour when the Australian Dollar fell as against the Swiss Franc, so that the appellants were at the end of the loan faced with repaying a larger sum in Australian dollars than that originally borrowed (when the Swiss loan was converted to Australian dollars).

100 The appellants alleged that Westpac engaged in misleading and deceptive conduct and negligence in making representations about the safety of entering into such borrowings. At an interlocutory stage, Westpac sought to strike out the claims as being statute-barred.

101 At first instance, Sheppard J made declaratory orders that the causes of action relied on by the appellants were statute barred under the Trade Practices Act.

102 Westpac argued that the appellants suffered loss and damage when they entered the foreign currency loan. Alternatively, it was argued that damage was suffered when the loans were rolled over and at that stage the loan amount in Australian Dollars had blown out. The appellants argued that the loss and damage was not suffered until the loans were repaid at which stage any loss would be crystallised.

104 The result is accurately summarised in the head note to the ALR report which I will repeat. The Court held that whether any of the causes of action pleaded under the Act or the general law were or were not statute barred necessarily depended upon an analysis of the evidence at the trial. The Court held that it was necessary to identify precisely what economic interests had been infringed. The Court held that to be precise in this sense required close attention to the details.

105 The Court held that on the limited material available it was not possible to give a definitive answer, affirmative or negative, that all or any of the causes of action under s 82(1) which were pleaded were barred. The Court held that all questions whether a claim was statute barred could only be resolved definitively be reference to the evidence in the particular case. Because so much would depend upon the way in which an applicant for relief presents a case under s 82(1), it was not possible to extract a principle which would have general application in such matters.

106 Justice Beaumont (with whom the remainder of the Court agreed) distinguished between the position in a once and for all dealing, such as in Jobbins, and an ongoing commercial arrangement. His Honour said:

Moreover, the facts in Jobbins, involving a once and for all dealing, are not readily applicable in a foreign currency loan where the parties are in an ongoing relationship over a period which may be substantial. In such a situation, it may be that the net effect, in terms of benefit and detriment, of entry into such a transaction can only be assessed once the term of the transaction has expired. So far as Forster may have been approved in Jobbins, it appears to have been on the footing that, unlike the present case, there was no ongoing commercial relationship involved. Although Wardley was not concerned with a loan transaction, it did involve an ongoing commercial arrangement and that brings it closer to the present case. As has been said, it is difficult to generalise in this area because so much depends upon the circumstances said to constitute misleading conduct and from which the claim for loss is alleged to arise. As Gaudron J. pointed out, it is necessary to identify precisely what economic interests have been infringed. To be precise in this sense requires close attention to the details of the individual claim.[20]

Western Australia v Wardley Australia Limited****[21]

107 I mention this case as it was upheld in by the High Court in Wardley (discussed below). In this case, when considering when loss and damage was suffered the Full Court of the Federal Court distinguished between the loss suffered in the purchase of a property and an incomplete commercial transaction. Their Honours said:

What is important is that a distinction is drawn in the provisions in Part VI between the suffering of loss or damage, the amount of which is recoverable, and the likelihood of such loss or damage which at that earlier stage may be prevented, or at least reduced, by one or other of the specialised remedies provided in s.87. Potential or likely damage is not actual damage which has already been suffered. This is not a case where an applicant has been misled into purchasing property, the true value of which at the time of the transaction was less than the price paid. The applicant in such a case has suffered loss or damage forthwith upon completion of the sale, because what has been acquired is, to put it colloquially, 'a lemon'. In our view, the mere assumption of an executory and contingent legal obligation, the future performance of which is likely to be more onerous than would have been the case had the representations in reliance upon which the obligation was assumed been true rather than false, is not the suffering of loss or damage the amount of which is forthwith recoverable by action under s.82. At that stage, the cause of action will not have accrued, may never accrue, and will not accrue whilst the suffering of the loss or damage remains a likelihood rather than a reality.[22]

108 This High Court of Australia case is of particular significance to the present proceedings. It is relied on by the appellant in support of her contention that her cause of action did not arise when she acquired the 37 woodlots, but arose at some subsequent time which should be left to be determined at trial.

109 In Wardley, the state of Western Australia granted an indemnity to NAB against a facility which the bank granted to Rothwells. The arrangement was induced by misleading conducted during October 1987 on the part of companies in the Wardley group. Following the failure of Rothwells, the State agreed to pay the bank $10.5 m in satisfaction of the indemnity. The case went to the High Court on a disputed application made in 1991 for leave to amend, which was challenged as outside the three year time limit for a claim under s 82 of the Trade Practices Act.

110 The Federal Court held that time did not start to run until the bank's liability was ascertained and quantified and the state was called on to meet its obligation. The High Court unanimously dismissed the appeal, with this central statement of the judgment:

Economic loss may take a variety of forms and, as Gaudron J noted in Hawkins v Clayton, the answer to the question when a cause of action for negligence accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed, and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough.

When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entering into the agreement. But ... detriment in this general sense has not universally been equated with the legal concept of 'loss or damage'.[23]

111 In this case it was concluded that the plaintiff suffered detriment in a general sense upon entering into the indemnity, but only suffered loss when the indemnity was called upon. It is clear from Wardley that the plaintiff must identify when the actual loss was sustained, not when she knew that it was sustained.

112 The majority laid down several relevant propositions:

(a) In determining when a plaintiff first suffers economic loss or damage in and action under s 82(1) of the Trade Practices Act based on misleading conduct constituting a contravention under s 52, it is necessary to have regard to the applicable measure of damages.[24]

(b) The measure of damages recoverable under s 82(1) can only be fully ascertained after a thorough analysis of those provisions in Parts IV and V of the Trade Practices Act for contravention of which the statutory cause of action may be maintained.[25]

(c) Under s 82(1) of the Trade Practices Act, as in common law, the plaintiff can only recover compensation for actual loss or damage incurred as distinct from potential or likely damage.[26]

(d) With economic loss, as with other forms of damage, there has to be some actual damage. Prospective loss is not enough.[27]

(e) When a plaintiff induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into the agreement.[28]

(f) Detriment in the general sense has not universally been equated with the legal concept of "loss or damage."

(g) In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold becomes known or apparent and, by then, the relevant limitation period may have expired.

(h) In the case of fraudulent or negligent misrepresentation which induces the plaintiff to enter into a contract to purchase property, the plaintiff's loss, apart from any question of consequential damage, is measured by the difference between the price paid or payable under the contract and the value of the property at the date of the contract. (Their Honours referred to Potts v Miller,[29] Toteff v Antonas,[30] and South Australia v Johnson.[31])

113 The plurality addressed the concept of loss or damage in the context of misrepresentations. Their Honours said:

Economic loss may take a variety of forms and, as Gaudron J. noted in Hawkins v. Clayton the answer to the question when a cause of action for negligence causing economic loss accrues may require consideration of the precise interest infringed by the negligent act or omission. The kind of economic loss which is sustained and the time when it is first sustained depend upon the nature of the interest infringed and, perhaps, the nature of the interference to which it is subjected. With economic loss, as with other forms of damage, there has to be some actual damage [their Honours cited Forster]. Prospective loss is not enough.

When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into the agreement. That is because the agreement subjects the plaintiff to obligations and liabilities which exceed the value or worth of the rights and benefits which it confers upon the plaintiff. But, as will appear shortly, detriment in this general sense has not universally been equated with the legal concept of "loss or damage". And that is just as well. In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold becomes known or apparent and, by then, the relevant limitation period may have expired. To compel a plaintiff to institute proceedings before the existence of his or her loss is ascertained or ascertainable would be unjust. Moreover, it would increase the possibility that the courts would be forced to estimate damages on the basis of likelihood or probability instead of assessing damages by reference to established events. In such a situation, there would be an ever-present risk of under compensation or overcompensation, the risk of the former being the greater. [32]

114 The plurality then referred to UBAF Ltd, accepting the finding of Ackner J:

"The mere fact that the innocent but negligent misrepresentations caused the plaintiffs to enter into a contract which they otherwise would not have entered into, does not inevitably mean that they had suffered damage by merely entering into the contract."

That is because it was not self-evident that the value of the chose in action which the plaintiff acquired, the right to repayment of a loan, was worth less than the amount paid to the borrower at the time of entry into the loan agreement. Evidence was required to establish that fact, if it were a fact.[33]

115 Importantly for this case, the plurality added:

That is because it was not self-evident that the value of the chose in action which the plaintiff acquired, the right to repayment of a loan, was worth less than the amount paid to the borrower at the time of entry into the loan agreement. Evidence was required to establish that fact, if it were a fact.[34]

116 The plurality said that the strongest statement in favour of the proposition that loss or damage is sustained on entry into an agreement induced by a false, negligent or misleading misrepresentation is contained in Jobbins. Their Honours said that the Full Court failed to specify whether the applicant first suffered loss or damage on entry into the agreement on 24 March 1986 or on payment on 9 April 1986 pursuant to the agreement of the sum of $60,000 each of which occurred more than three years prior to the filing of the statement of claim.

117 The plurality said that the decision may be supported by reference to the payment alone. The plurality said that they "have difficulty in accepting that the applicant suffered loss or damage on entry into the agreement merely because the investment lacked the represented qualities." Their Honours said that evidence was required on this issue as "although the investment lacked the represented qualities, it may have been worth no less than the consideration provided by the applicant."[35]

... the English decisions have proceeded according to the view that, where the plaintiff is induced by a negligent misrepresentation to enter into a contract and the contract, as a result of the negligence, yields property or contractual rights of lesser value, the plaintiff first suffers financial loss on entry into the contract, notwithstanding that the full extent of the plaintiff's financial loss may be incapable of ascertainment until some later date.[36]

119 The plurality then addressed the suggestion that the principle underlying the English decisions extended to the point that a "plaintiff sustains loss on entry into an agreement notwithstanding that the loss to which the plaintiff is subjected by the agreement is a loss upon a contingency."[37]

120 The plurality did not accept that proposition, but said that:

If, contrary to the view which we have just expressed, the English decisions properly understood support the proposition that where, as a result of the defendant's negligent misrepresentation, the plaintiff enters into a contract which exposes him or her to a contingent loss or liability, the plaintiff first suffers loss or damage on entry into the contract, we do not agree with them. In our opinion, in such a case, the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and may never be incurred. A deferred liability may stand in a different position but there is no occasion here to discuss that matter.[38]

121 The plurality said that in the result, they agreed with the decision of Von Doussa J in SWF Hoists (discussed above). The plurality said that the conclusion they had reached with respect to the time when the plaintiff first suffers loss in respect of contingent loss or damage liability accorded with what was said by Gaudron J in Hawkins v Clayton, where her Honour said:

... if the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible.[39]

Justice Gaudron went on to point out that "[i]t would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value or increased liability." [40]

122 The plurality said that their conclusion was also supported by their view that it would be unjust and unreasonable to expect a plaintiff to commence proceedings before the contingency was fulfilled.[41] Their Honours concluded:

These practical consequences which would follow from an adoption of the view for which the appellants contend outweigh the strength of the argument that the principle applicable to the cases in which the plaintiff acquires property (or a chose in action) should be extended to cases where an agreement subjects the plaintiff to a contingent loss. In such cases, it is fair and sensible to say that the plaintiff does not incur loss until the contingency is fulfilled.[42]

123 The starting point in considering Ground 2 of the Notice of Appeal is to recognise that under s 471B of the Act Mrs Shellie bore the onus of establishing that the case she wishes to raise against the companies in liquidation has a solid foundation and gives rise to a serious dispute.

124 It is convenient first to deal with the case against GSMAL. GSMAL contends that Mrs Shellie has not demonstrated that her claim has a solid foundation nor does it give rise to a serious dispute as her action was not begun within 6 years after the day on which the cause of action arose within the meaning of s 1022B(6) of the Act.

125 Mrs Shellie alleges that had she been informed of the disclosure omissions she would not have purchased the 37 woodlots (along with her husband). Wardley makes clear that the mere fact that an investment lacks the represented qualities does not establish that the plaintiff has suffered loss and damage on acquiring the investment. As the plurality said, although the investment lacked the represented qualities it may have been worth no less that the consideration provided by the applicant. This proposition was clearly set out in UBAF Ltd that was cited with approval by the plurality.

126 Further, the loss to Mrs Shellie arose through the represented returns from the venture not being realised. Mrs Shellie does not allege that the outgoings that she met were other than represented. The only income to be achieved was that when the woodlots were harvested. According to the principles laid down in Wardley, the existence of her loss and damage only arose when her loss was ascertained or ascertainable.

127 It is open on the facts pleaded and deposed to in the affidavit material for Mrs Shellie to argue that she contracted to enter into an ongoing commercial arrangement with GSMAL (as opposed to a once and for all dealing in 2003) and that under that arrangement her loss or damage was only incurred when it was ascertainable that the estimated returns would, as a matter of fact, not be achieved. Under the scheme arrangements, Mrs Shellie did not buy an investment property. Rather she became a grower in a scheme for growing trees. Part of that scheme involved taking an interest in the woodlots. But that was only a part of the scheme. The scheme was ongoing and Mrs Shellie did not expect a return from the scheme until the trees were harvested.

128 As discussed in Magman (as approved by the High Court in Wardley) it is premature at this stage to determine whether GSMAL did omit material matters, and if so which, from the disclosure document. To adopt what was said by Beaumont J in Magman,[43] in the absence of the precise nature of the matters omitted from the disclosure document it must follow that it is also not possible at this stage to identify which precise interest of Mrs Shellie's (if any) have been infringed.

129 It may be the case that the loss and damage was ascertained or ascertainable at the time Mrs Shellie acquired the woodlots (or soon after). On the other hand, the loss and damage may not have been ascertained or ascertainable until the administrator was appointed, or some other date within the limitation period, when the scheme became unworkable and lost its viability. This all depends on the precise economic interest of Mrs Shellie's that was infringed.

130 As held in Wardley and Magman, the day upon which Mrs Shellie's loss was ascertained or ascertainable is a matter for evidence at trial. In Wardley, the plurality criticised the decision in Jobbins were the Full Court of the Federal Court ruled that a claim was outside the limitation period merely because representations to the investor in the film were misleading and deceptive as to the true quality of the investment without the benefit of any evidence that the investment was worth less than the price paid. The plurality in Wardley warned that such issues should not be determined in interlocutory proceedings save in the clearest of cases. Their Honours said:

We should, however, state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases. Generally speaking, in such proceedings, insufficient is known of the damage sustained by the plaintiff and of the circumstances in which it was sustained to justify a confident answer to the question. Magman International illustrates the problems which can arise, particularly in a case involving foreign loans. [44]

131 Mrs Shellie produced evidence of the loss and damage that she has suffered. The learned Associate Justice criticised her for not putting evidence before the Court demonstrating when the loss was incurred or at least putting forward a pleading as to when the loss and damage occurred. On the basis of the authorities discussed above, I find that Mrs Shellie was not required to do so.

133 Mrs Shellie contends that the Associate Justice erred in finding that Mrs Shellie had failed to adequately plead the discrete point in time when the purported loss or damages arose. Neither Mrs Shellie or the defendants addressed this issue. GSF purported to do so, but merely said that his Honour was correct to decide that Mrs Shellie's pleading and affidavit material was to the effect that the loss was suffered immediately upon incurring liability under the loans.

134 I do not believe his Honour did say this. Rather, his Honour said that the plaintiff submits that the loss occurred after the contract was entered into. His Honour said that that has not been pleaded, nor any evidence been put to the Court in that regard.

135 In view of the fact that this point was not pressed, I will not rule on the matter. My initial view, however, is that there is no obligation to plead when loss and damage was sustained. It is a matter for the defence to raise any limitation period if the defence so wishes. In those instances, a reply may seek to respond to the allegation.

136 This ground alleged that "His Honour ... erred in finding that the draft counterclaim as cast against GSMAL put forward by the plaintiff did not disclose an arguable case." In my view, his Honour so found because of the limitation issue, which I have already addressed. GSML did not suggest otherwise.

137 This ground alleged that "His Honour ... erred in finding that there was no basis upon which a claim could be brought against GSF and GSML." I have already addressed the cause of action against GSML.

138 Under the proposed counterclaim, Mrs Shellie alleges as follows:

(c) was a corporation in the business of providing finance to investors (and Mrs Shellie) in the Projects including the GP 2003 Project;

(d) had no 'key employees' of its own, but authorised persons who were formally employed by GSL to act as agents of GSF for the purposes of conducting GSF's business and undertaking, which included the following conducted referred to in the Prospectus (and the documents included in the Prospectus entitled 'Application Form' and 'Application for Term Finance Principal and Interest Loan'):

(i) soliciting from investors (including Mrs Shellie applications for GSF to finance investments/applications to purchase woodlots in the Project; and

(ii) promoting the Project to Mrs Shellie and investors generally, by offering finance to investors and Mrs Shellie.

(i) include in the Prospectus (and the documents included (e) Authorised GSMAL to:

(i) include in the Prospectus (and the documents included in the Prospectus entitled 'Application Form' and 'Application for Term Finance Principal and Interest Loan'):

(A) statements relating to the availability and provision of finance from GSF to potential investors in the Project (including Mrs Shellie), with respect to applications by investors (and Mrs Shellie) to GSMAL to purchase of woodlots in the Project;

(B) a Direct Debit Request arrangement between GSF and purchasers of woodlots in the Project (including Mrs Shellie), who had applied to GSF to finance their acquisitions of woodlots in the Project and whose applications for finance had been approved by GSF, with respect to those repayment due to be made to GSF by GSF financed investors (including Mrs Shellie), pursuant to any Loan Deed entered into between GSF and such investors (and Mrs Shellie) with respect to woodlots purchased from GSMAL in the Project;

(C) an option within the application form to be submitted to GSMAL by potential investors in the Project (and Mrs Shellie) who sought to acquire woodlots in the GSF 2003 Project, for such investors (and Mrs Shellie) to apply to GSF for finance with respect to the acquisition of woodlots in the Project, by completing the appropriate section (paragraph 5 of such application form); and

(ii) seek an acknowledgement from investors (and Mrs Shellie) if they made application to GSF for finance with respect to their application to GSMAL to purchase the woodlots in the Project, that the provision of finance by GSF to such investors (and Mrs Shellie) would be on those terms and conditions set out in the Prospectus; and

(iii) collect forms completed by investors in the GSP Project (and Mrs Shellie) in which investors in the GSP 2003 Project (and Mrs Shellie) apply to GSF for the provision of finance with respect to those woodlots they sought to purchase from GSMAL in the Project, pursuant to the Prospectus.

(f) require that any moneys loaned by GSF to persons who applied to GSF for finance pursuant to the Prospectus with respect to their acquisition of woodlots in the Project, be directly and exclusively advanced to GSMAL on behalf of such persons and their application to purchase woodlots in the GSP 2003 Project from GSMAL;

(g) retained the sole and absolute discretion to require security over those woodlots purchased in the Project by those persons to whom GSF provided finance with respect to the acquisition of woodlots in the Project pursuant to the Prospectus; and

(h) lent to and relied upon the business and undertaking of GSMAL and the conduct of its business and undertaking the allegations made in respect of GSMAL

(i) being a promoter and manager of the Project and a regulated person within the meaning in ss 1022A(1) and 1011B of the Act;

(ii) it being a lender of money to investors in projects promoted by GSMAL (and GSF), including the Project that it did not offer loans or funds to persons for any other purpose;

(iii) GSMAL relying upon moneys lent by GSF to investors (including Mrs Shellie) in the Projects (including the Project) in order to sell woodlots in the GSP 2003 Project to investors (including Mrs Shellie);

(iv) GSMAL and/or GSF and/or GSL seeking and obtaining from the Australian Taxation Office (for and on behalf of GSMAL and GSF), Product Ruling PR 2002/134 referred to in the Prospectus ('the ATO rulings') so that GSMAL (and GSF) would attract investors (including Mrs Shellie) in the Project;

(v) the ATO rulings permitting investors in the Project (including Mrs Shellie) to claim a tax deduction against income earned in the 2003 financial year with respect to those moneys invested with GSMAL in the Project which were financed by way of loan moneys advanced to GSMAL by GSF on behalf of such investors, (including Mrs Shellie) (reference is made to page 18 of the Prospectus); and

(vi) the Prospectus expressly referred to the availability of finance from GSF to potential investors (including Mrs Shellie) for the purchase of woodlots from GSMAL by investors (including Mrs Shellie) upon the terms and conditions outlined in the Prospectus.

(i) was by reasons of the matters pleaded in paragraphs (ii) and (iii) about GSMAL and that paragraph a promoter of the Project.

139 It should also be noted that allegations are then made against Mr Young and Mr Rhodes. It is alleged that Mr Young was the managing director of the Great Southern Group of companies and was a common director of GSMAL and GSF in 2003. Similar allegations are made against Mr Rhodes as being a director and a company secretary.

140 It is alleged that Mr Young and Mr Rhodes were members of the Executive Committee of the Great Southern Group of companies which was responsible for corporate strategy and operational performance of the Great Southern Group of companies, which included the business and undertaking of GSMAL and GSF.

[6] Between March and June 2003, Mrs Shellie was provided with the following by her financial adviser:

(b) an investment application form with respect to the GSP 2003 Project issued by GSMAL and GSF (woodlots application form);

(c) a finance application form relating to investments in the GSP 2003 Project issued by GSMAL and GSF (application);

(d) an uncompleted document entitled 'Terms of Loan Deed', issued by GSMAL and GSF (which included loan options, loan conditions and a direct debit request and authority which was required to be signed and submitted by investors in the Project with the woodlots application form and application (if the subscribing investor was applying for investment finance) ('Terms of Loan Deed'); and

[7] The Prospectus was issued by GSMAL and jointly promoted by GSMAL and GSF (each of which at all material times stood to financially benefit from those persons choosing to invest in the GSP 2003 Project) and issued with each of GSMAL's and/or GSF's and/or Young's and/or Rhodes' express and/or tacit approval and consent and was provided by GSMAL and/or GSF and/or Young as agents for GSMAL and/or GSF (at some time prior to March-June 2003) and included within it, the certain provisions.

142 The provisions included information about the GSP 2003 Project, including that each grower was to pay $3,000 per woodlot. It was provided that no ongoing payments other than insurance were payable by the growers. It said that 5.5% of the nett harvest proceeds of the project (plus GST) were payable by the growers for management and rental expenses. It provided that in the case of what were called electing growers, they must pay their share of the costs and expenses associated with harvest and delivery of their timber upon collection, whereas in the case of non-electing growers, the cost of harvesting, shipping (if applicable) and sale of timber was to be deducted from the harvest proceeds. The information dealt with yield, representing that ten years after planting the plantations should reach an average of at least 250m³ of harvested timber per hectare. Under the heading of 'Pricing', representations were made about the responsible entity using its best endeavours to sell the timber for the best available price. Information was given on the current price of woodchips in Western Australia. Information was provided on tax deductibility, in that the application fee was fully tax deductible. Under the heading of 'Finance', it was provided that finance was available to growers from GSF, a wholly owned subsidiary of GSPL. Applicants were provided with the choice of applying for an interest-free loan or a principal and interest loan.

143 The particulars to that plea say the Prospectus was jointly promoted by GSMAL and GSF, and available to Mrs Shellie by her agents with each of GSMAL's and GSF's express and/or tacit approval and consent.

144 In reliance upon the contents of the Prospectus, the GSP investment model, and also in reliance upon the investment recommendation, on or about 28 May 2003 Mrs Shellie executed the woodlots application form and the application for finance.

145 Paragraph 12 alleges the Prospectus Omissions and Non-disclosure. It alleges that at the time that Mrs Shellie applied for the woodlots and for finance, the following facts were omitted from the Prospectus and/or were not disclosed to Mrs Shellie:

(a) original forecasts of harvest yields and projected returns in respect of the eucalyptus woodlots comprising Great Southern Plantations 2003 Managed Investment Scheme were inaccurate and insufficient to meet the projected returns to investors in those schemes;

(b) at no time had GSMAL (and GSF) ever achieved or was likely to achieve harvest yields in the vicinity of 250-300m³ per hectare, in any of the eucalyptus plantations it had conducted in similar locations to the locations chosen for the GSP 2003 Project throughout Australia. At best, yields were likely to average 130-160m³ per hectare;

(d) in all the circumstances, GSMAL was incapable, or likely to become incapable of properly continuing its role as responsible entity of the Great Southern Plantation 2003 Managed Investment Scheme to its completion.

146 In Paragraphs 12 to 15, these omissions from the Prospectus were alleged to be 'defective'.

147 The key allegation against GSF was that by reason of it being a 'promoter':

(a) GSF provided a defective Prospectus to Mrs Shellie, within the meaning of s 1022B(1)(c)(i) of the Act;

(b) was required by s 1013D of the Act to include a statement in the Prospectus correctly identifying and truthfully and accurately addressing those facts and circumstances comprising the Prospectus omission and non-disclosure;

(c) was required by s 1013E of the Act to include a statement in the Prospectus correctly identifying and truthfully and accurately addressing those facts and circumstances comprising the Prospectus omission and non-disclosure;

(A) s 1022B(3)(b)(ii) of the Act by reason of it (along with GSMAL) being involved in the preparation of the Prospectus and that it directly or indirectly caused or contributed to it being defective; and

(B) s 1022B(3)(d) of the Act by reason of the matters pleaded in paragraph 13(c) above.

148 Section 1022B(1)(e) of the Act refers to a contravention of ss 1017B or 1017D. Section 1017B refers to an obligation to make continuous disclosure, and s 1017D deals with the provision of a "periodic statement" to existing holders of a financial product.

149 Mrs Shellie pleads that had she been informed of the Prospectus Omissions and Non-disclosure (which also were materially adverse within the meaning of s 1021L(1) of the Act) prior to applying to GSMAL to purchase woodlots and applying to GSF to finance her purchase of woodlots by completing the woodlots application form and the application for finance, then she would not have been led into error and would not have invested in the woodlots and applied for finance and entered into the loan deed.

150 The allegation of unconscionability cross-refer back to and depend upon the conduct alleged against GSMAL in paragraph 20, in which GSF was not said to have been involved.

151 As to the allegation that it was a "liable person" within the meaning of s 1022B(3)(b)(ii), GSF says that there was no fact pleaded, much less some factual material in the affidavits in support, which might provide some foundation for this allegation. GSF says the only involvement alleged was that GSF authorised GSMAL to include matters in the Prospectus which are not suggested to be in any way misleading or deficient.

152 GSF says that the proposed litigation must have a solid foundation and give rise to a serious dispute. They say that it has been held that more than simply putting forward a proposed pleading containing assertions of fact is required, and rely upon OD Transport (Australia) Pty Ltd (in liquidation) v OD Transport Pty Ltd.[45]

153 In OD Transport, Finkelstein J of the Federal Court of Australia considered an application under s 500(2) of the Act for leave to proceed with or commence proceeding against the company after the passing of a resolution for the winding up of that company. After referring to JJ Leonard Properties Pty Ltd v Leonard (WA) Pty Ltd (in liquidation),[46] His Honour said that:

My reading of his Honour's reasons leads me to conclude that if there had been no evidence before the court indicating that the applicant had some prospect of success in its claim for rectification the order would not have been made.

Here the position is different. The first respondent has not put forward any material to establish that is claim has merit. It may be a very good claim or it may be quite hopeless. I am not in a position to say one way or the other. It would be wrong for me to grant leave to proceed in these circumstances. Before leave will be granted the first respondent must show that its proposed cross-claim has some merit and will not result in the first applicant incurring unnecessary expenditure which it may not be able to recover.[47]

154 GSF also says that the inability of an applicant to put a pleading forward which discloses an arguable cause of action of substance must be fatal. GSF says that evidence of the solid foundation of the claim is also required, and Mrs Shellie did not advance any evidence beyond some general matters of background concerning her entry into her investment. GSF contends that his Honour was correct to make the findings that he did.

The Associate Justice's reasons on the GSF claim

155 The Associate Justice said that Mrs Shellie pleaded in her counterclaim that GSF authorised GSMAL to include prospective statements relating to the availability of finance. His Honour said that it is alleged that GSF required that any monies loaned by it to person who applied to GSF for finance pursuant to the Prospectus be directly and exclusively advanced to GSMAL on behalf of such persons. Mrs Shellie pleaded that GSF retained the sole and absolute discretion to require security over those woodlots purchased in the project by those persons to whom GSF provided finance with respect to acquisition of woodlots in the project pursuant to the Prospectus. By reason of the matters pleaded, it is alleged that GSF was a promoter of the project.

It is pleaded that by reason of it being a promoter of the prospectus, GSF:

- provided the defective prospective [sic] to the plaintiff;

- was required by s 1013D of the Act to include a statement in the prospectus correctly identifying and truthfully and accurately addressing the facts and circumstances comprising the prospectus omission and non disclosure;

- was required by s 1013E of the Act to include a statement in the prospectus identifying and truthfully and accurately addressing those facts and circumstances comprising the prospective omission and non disclosure;

- contrived [sic] s 1022B(1)(e) of the Act;

- was a person liable within the meaning of s 1022B(3)(b)(ii) of the Act along with GSMAL, by being involved in the preparation of the prospectus and having caused or contributed to it being defective.

157 His Honour said that GSF submitted that the pleading did not set out GSF's involvement in the preparation of the Prospectus other than its authorisation of the uncontroversial statements concerning the availability of finance, none of which are attacked as misleading. His Honour held that the plaintiff could not refer to a pleading relating to GSF's involvement in the preparation of the Prospectus, nor could he find any pleading other than what was submitted by GSF.

158 His Honour concluded that there was no pleading that GSF was involved in the preparation of the Prospectus or that it contributed to any defect in it. His Honour said that all that was pleaded was that GSF authorised the uncontroversial statements to be contained in the Prospectus concerning the availability of finance. Accordingly, his Honour held that there was no solid foundation for the claim, and that no evidence had been filed by the plaintiff demonstrating that there was a cause of action. His Honour held that there was no basis upon which the claim could be made against GSF.

159 No written or oral submissions were raised by Mrs Shellie in support of this ground. The written submissions on behalf of Mrs Shellie tendered on the application before his Honour make no reference to the basis of the claim against GSF.

160 In her affidavit of September 2012, Mrs Shellie says that the loans from GSF were arranged by GSF in conjunction with an investment in woodlots in the Great Southern Plantations Project 2003 Project offered to her under a Prospectus dated 7 February 2013 issued by GSMAL. She says that on 12 June 2003, she was sent a replacement prospectus. Mrs Shellie exhibits a letter from Mr Walker of Great Southern Securities that says that the prospectus contained a direct debit form.

161 The draft counterclaim seeks an order under s 1022C(1)(a) declaring the loan deeds void and/or unenforceable. Under that provision:

The court dealing with an action under s 102B(2) may, in addition to awarding loss or damage under that subsection and if it thinks it necessary in order to do justice between the parties:

(a) make an order declaring void a contract entered into by the client referred to in that subsection for or relating to any financial product or financial service ...

162 For s 1022B(2) to be enlivened against GSF, the Court would be required to award as against GSF loss or damage under s 1022B(2). Pursuant to s 1022B(2), if a person suffers loss or damage - if paragraph (1)(c) applies - because of the disclosure document or statement the client was given or sent was defective; the person may recover the amount of the loss and damage by action against the, or a, liable person.

163 Regrettably, the Prospectus was not tendered in evidence before the learned Associate Justice.

164 In my opinion, the critical issue that his Honour addressed was whether or not Mrs Shellie had established facts that raised a serious dispute that GSF was a "liable person" for the purposes of s 1022B(3) of the Act. Relevantly, the parties agree that the critical allegation of Mrs Shellie against GSF is that GSF was involved in the preparation of the Prospectus and that GSF directly or indirectly caused or contributed to it being defective.

165 In my opinion, Mrs Shellie has established a sound foundation for alleging that GSF was involved in the preparation of the Prospectus. There is no suggestion that the allegations of the contents of the Prospectus are untrue. Both the Prospectus and application forms suggest an involvement by GSF in their preparation, as they make provision for applying to GSF for finance and enable a means of making payments to GSF. GSF was clearly a party to the means by which the schemes were marketed to investors. The scheme involved obtaining finance from GSF, which would direct the loaned monies to GSMAL for the purpose of acquiring the woodlots.

166 The next issue is whether there are reasonable grounds to suggest that GSF directly or indirectly caused or contributed to the Prospectus being defective. The evidence suggests that GSF was a party to the issuing of the Prospectus. In fact, the evidence establishes that GFC was a party to the scheme and an essential part of the scheme. That was the primary and chief means by which it obtained business. The alleged defects in the Prospectus are defects by omission.

167 In Woodcroft-Brown v Timbercorp,[48] Judd J refers to a proposition put in relation to the Timbercorp Group (it is notorious that Timbercorp and Great Southern were competing in the same market) which encapsulates a similar basis upon which GSF is said to be a 'liable person.' The proposition was:

The Timbercorp Group operated as a single interdependent and interconnected business of marketing, financing and management of forestry and horticulture projects in which different legal entities were involved in a common pursuit.[49]

168 At this early stage of the proceedings, it is arguable that GSF and GSMAL were merely the means by which GSL could conduct its business of selling and managing forestry managed investment schemes. On that basis, it might be argued that no distinction should be drawn between the various companies in the Great Southern group of companies in deciding which entity was responsible for putting forward and describing the attributes and character of the group's products in the Prospectus (or omitting to do so). This proposition is supported by the evidence that Mr Young (the managing director of the Great Southern Group of companies) and Mr Rhodes (the general manager, director and company secretary of GSL, GSMAL, and GSF) were common directors of GSMAL and GSF. When they approved the Prospectus (which they presumably did) it may have been unclear which company they were acting on behalf of.

169 Further, the scheme was developed and promoted by GSL. GSL was the parent of both GSMAL and GSF and was the ultimate body that financially benefited by the scheme. GSF was a participant in the scheme along with GSMAL and GSL. GSL was likely to have decided which companies in the Group would participate in the scheme and the nature of their participation. It is at this stage too early to determine if liability should for the prospectus should be limited to GSMAL or to other companies in the Great Southern Group of companies that participated in the scheme.

170 In Clarke & Ors v Great Southern Finance Pty Ltd & Ors (an application to strike out a statement of claim in proceedings not dissimilar to these proceedings and also involving GSF And GSMAL),[50] Croft J rejected the argument that common directorships alone were sufficient to impute common knowledge to separate companies in a group. After reviewing relevant authorities, his Honour said:

On this basis I am of the opinion that the "mere" fact of common directorships, noting that the position was that the directorships were not entirely common as there were some directors who were directors of one company only, does not establish common knowledge, common control or common liability.[51]

171 I respectfully agree with Croft J's finding that common directors alone are insufficient. However, the present case is distinguishable from Clarke on the basis that Clarke was an application to strike out pleadings (where the standard is more stringent than that required in the present case of leave to join a company in liquidation). I find that the evidence of common directors is relevant to satisfying the requisite standard in the present case (that the claim has a solid foundation and gives rise to a serious dispute), particularly as Mrs Shellie's application occurs at a far earlier stage in the proceedings than the application in Clarke, and without the benefit of further evidence presumably available to the parties in Clarke at that later stage.

172 Similarly, judicial notice can be taken of the fact that often corporations that conduct a single business or various businesses structure their management activities under areas of responsibility that may or may not bear any relationship to the myriad of companies that form the group. One can readily envisage responsibility being divided under areas such as marketing, finance, personnel, and plantation management that may bear little relationship to the various companies used by the group to carry on its business. This impression is fortified by the common logo used on material purported emanating from the different companies presented to investors (referred to above). I do not consider it necessary in seeking leave to proceed against GSF for Mrs Shellie to establish with precision the link between the management of the Great Southern group of companies and GSF.

173 For these reasons, I find that there is a serious issue to be tried that the Great Southern Group of companies including GSF directly or indirectly contributed to the omissions in the Prospectus. The requisite standard is satisfied.

174 This Ground submits that his Honour erred in finding that there was no evidence admitted by Mrs Shellie which disclosed an arguable cause of action. I have dealt with this above.

175 This Ground submits that his Honour erred in finding in respect of the involvement of GSF in the preparation or lack thereof of the relevant product disclosure statement as being a matter material to the exercise of his discretion in refusing leave to proceed.

176 In my opinion, establishment of GSF as a 'liable person' was critical to a claim for damages against it and hence enlivening s 1022C to enable Mrs Shellie to seek an order declaring void the loan deeds. There was not error on His Honours part.

177 My decision whether or not to grant leave to join GSF and GSMAL is discretionary.[52]

178 In their written submissions, GSMAL made reference to the factors considered in Oceanic Park:

Questions relevant to the exercise of my discretion as to whether leave ought to be granted at all include the following:

1. Whether there is a substantial question to be tried.
2. Whether the action would interfere with the orderly winding up of the respondent.
3. Whether the action would serve any sufficient purpose.
4. Whether the action would have any adverse effect upon the respondent and its shareholders.[53]

GSMAL also quote the following passage from the Full Court of the Supreme Court of South Australia's decision in Viscariello v Bernsteen Pty Ltd (in liq),[54] where Besanko J (Doyle CJ and White J agreeing) said:

The question is whether a claimant should be permitted to proceed by action or should be required to submit his proof of debt and, if dissatisfied, appeal to a judge. The question is one of choosing between alternative forms of procedure. The effect of s 500(2) is to require the claimant to adopt the course of lodging a proof of debt unless he can demonstrate that there is some good reason why a departure from that procedure is justified in the case of the particular claim in dispute. It is impossible to state exhaustively all the circumstances in which it may be appropriate to grant leave to proceed. Relevant factors are the amount and seriousness of the claim, the degree of complexity of the legal and factual issues involved, and, if proceedings have already been commenced, the stage to which those proceedings may have progressed.[55]

179 In exercising my discretion to grant leave to join GSF, I am fortified by the number of other cases in which leave has been granted to join GSF as a party - a table listing 22 such proceedings was handed up during the hearing of this matter and admitted into evidence. GSF is clearly the subject of extensive litigation arising out of the collapse of the Great Southern group of companies. These cases have been stayed, pending the outcome of other proceedings involving the Great Southern Group. In my discretion, I do not consider the addition of Mrs Shellie's claim to this list of proceedings to be an additional significant burden upon the liquidators, especially in light of the case management orders I intend to make (including staying the proceeding).

180 If leave is granted to Mrs Shellie as sought, GSF seeks to make submissions on the conditions (if any) that are imposed. As I propose to grant leave, I will hear GSF on these conditions.

181 In light of the above, I allow the appeal and propose to order the following:

(a) Leave is granted to join GSF and GSMAL as defendants to the proceeding.

(b) The proceeding be uplifted to the Supreme Court of Victoria.

(d) The proceeding be referred to the Honourable Justice Croft for further directions.

182 I will hear the parties on any conditions of leave and as to costs.

[1] (1993) 41 FCR 550 (Wilcox, Burchett and Beazley JJ) (Vagrand).

[3] (1993) 11 ACSR 516 (Oceanic Life).

[5] [1992] HCA 55; (1992) 175 CLR 514 (Wardley).

[7] [1982] 1 WLR 86 (Forster).

[8] Forster, 100 (an application for leave to appeal to the House of Lords was dismissed).

[9] [1984] QB 713 (UBAF Ltd).

[11] [1988] ATPR 49,185 (Keen Mar).

[16] [1989] FCA 538 (Jobbins).

[17] (1990) 6 ANZ Insurance Cases 76,888 (61-002).

[18] I have adopted the summary given by the majority in Wardley.

[19] [1991] FCA 41; (1991) 32 FCR 1 (Magman).

[21] [1991] FCA 314; (1991) 102 ALR 213.

[23] Wardley, 527 (citations omitted).

[29] [1940] HCA 43; (1940) 64 CLR 282, 297-299.

[30] [1952] HCA 16; (1952) 87 CLR 647, 650-651.

[31] (1982) 42 ALR 161, 170.

[32] Wardley, 527 (some citations omitted).

[33] Ibid, 528 (including quotation from UBAF Ltd, 725).

[45] (1997) 80 FCR 290.

[46] (1986) 11 ACLR 224.

[48] [2011] 85 ACSR 354 (Woodcroft-Brown).

[49] Woodcroft-Brown, [27] (his Honour did not make any findings on the proposition in his reasons for judgment; the proposition was merely recited).

[50] [2010] VSC 473 (Clarke).

[51] Clarke, [32] (and see [17]-[32] generally).

[52] See, e.g. Oceanic Park, and Commonwealth v Davis Samuel Pty Ltd (No 5) (2008) 68 ACSR 336, [19].

[54] [2004] SASC 266.